Financial Performance - The company's revenue decreased significantly from HKD 164,305,000 in 2022 to HKD 90,982,000 in 2023, primarily due to a decline in New Zealand operations[9]. - Revenue from the New Zealand division dropped by 50.9%, with sales volume decreasing by 52.5%[10]. - The Suriname division's revenue decreased by 18.2%, leading to an adjusted EBITDA loss of HKD 15,192,000 in 2023 compared to a loss of HKD 8,913,000 in 2022[13]. - The company recorded a net loss of HKD 139,674,000 for the year ending December 31, 2023, compared to a net loss of HKD 97,746,000 in 2022[20]. - Total revenue decreased by 44.6% to HKD 90,982,000, with contributions from New Zealand and Suriname segments at HKD 65,200,000 and HKD 25,782,000 respectively[21]. - Gross loss increased by 84.9% to HKD 90,443,000, with Suriname segment gross loss rising significantly to HKD 91,757,000 from HKD 39,512,000[22]. - The attributable loss to the company's owners increased from HKD 68,152,000 to HKD 93,075,000 for the year[39]. - The annual loss for 2023 was HKD (139,674,000), worsening from a loss of HKD (97,746,000) in 2022[196]. - Total assets decreased to HKD 799,301,000 in 2023 from HKD 968,017,000 in 2022, representing a decline of 17.5%[196]. - Total liabilities decreased to HKD (512,247,000) in 2023 from HKD (547,205,000) in 2022, a reduction of 6.4%[196]. - The company reported a loss attributable to equity holders of HKD (93,075,000) in 2023, compared to a loss of HKD (68,152,000) in 2022[196]. Operational Challenges - The Suriname division faced significant challenges, including increased production costs and delays in government licensing, impacting operational risks[17]. - The group is facing operational challenges in Suriname due to external factors such as extreme weather, rising fuel costs, and government uncertainties, which have increased operational risks[49]. - The group has adjusted production levels in Suriname to control costs and manage inventory, focusing on improving operational efficiency[49]. - The company anticipates potential risks in 2024 due to geopolitical instability and a projected 30% to 60% decline in China's real estate investment over the next decade[14]. Cost Management - The company aims to focus on improving operational efficiency and prudent financial management in light of ongoing challenges[17]. - Administrative expenses decreased by 4.9% or HKD 2,370,000 due to reduced depreciation from completed logging activities[32]. - Sales and distribution costs decreased by 44.7% or HKD 11,816,000, mainly due to reduced sales volume and currency depreciation[31]. - Financing costs rose by 39.2% or HKD 6,698,000 due to generally higher interest rates affecting floating-rate bank loans[33]. Sustainability and Corporate Governance - The company has integrated sustainable development principles into its core business strategy, focusing on protecting forests and creating long-term economic value for shareholders[86]. - The management closely monitors greenhouse gas emissions and energy consumption, ensuring compliance with environmental regulations in operational areas[88]. - The company has adopted a sustainable forestry operation model, ensuring that only trees of a certain age are harvested and reforestation occurs within twelve months post-harvest[85]. - The company has a commitment to high corporate governance standards, enhancing transparency and stakeholder confidence[79]. - The company actively participates in community engagement, supporting green living initiatives and providing knowledge to local tribes[88]. - The company has established a whistleblowing policy and anti-corruption measures to maintain high ethical standards in its business culture[88]. - The company emphasizes employee safety and prohibits child labor and forced labor in its operations[88]. - The company aims to create and enhance long-term returns for shareholders while fulfilling corporate social responsibilities[80]. Board and Management Structure - The board consists of eight members, including one executive director and seven non-executive directors, ensuring a strong independent element in decision-making[90]. - The management team includes experienced professionals with extensive backgrounds in finance, accounting, and corporate governance, enhancing the company's strategic direction[63][64][66][67][70][73]. - The chairman and CEO roles are separated, with Mr. Zheng Zhiqian as chairman and Mr. Ding Weiquan as CEO, ensuring clear division of responsibilities[95]. - The board consists of three independent non-executive directors, with independent directors accounting for over one-third of the board, complying with listing rules[91]. - The board held four meetings in 2023, with an overall attendance rate of approximately 97.9%[98]. - The company appointed a new non-executive director, Ms. Sun Songxin, after the annual general meeting on May 31, 2023[96]. - The audit, nomination, and remuneration committees are chaired by non-executive directors and have been granted sufficient resources to fulfill their duties[91]. Risk Management - The board is responsible for maintaining an effective risk management and internal control system, with a clear management structure in place[150]. - The internal control framework is based on the COSO framework, covering monitoring environment, risk assessment, control activities, information and communication, and monitoring activities[153]. - The company has integrated risk management functions into its business operations, with department heads identifying potential risks in daily operations[154]. - The external auditor did not identify any significant internal control weaknesses during the 2023 audit[156]. - The audit committee has received reports on internal control and risk management for the year, which were considered when recommending the board to approve the group's interim and annual performance[157]. Shareholder Communication and Dividends - The company has adopted a shareholder communication policy to maintain ongoing dialogue with shareholders and the investment community[173]. - The company did not recommend any dividend payment for the current year, consistent with the previous year where no dividend was declared[193]. - The board of directors retains the discretion to declare interim and final dividends, subject to shareholder approval at the general meeting[177]. - The company emphasizes a sustainable dividend policy, balancing shareholder expectations with prudent capital management[179]. - The board considers multiple factors when deciding on dividends, including financial performance, retained earnings, and regulatory restrictions[180]. Employee Relations - As of December 31, 2023, the total number of employees in the group was 143, down from 152 in 2022, with employee costs amounting to approximately HKD 34,547,000, an increase from HKD 33,361,000 in 2022[60]. - The company has a compensation policy that includes salaries and discretionary bonuses based on group performance and individual contributions[60]. - The company encourages gender diversity across all departments, with at least one female in management positions in major departments[110].
绿心集团(00094) - 2023 - 年度财报