Financial Performance - The company's revenue for the year ended December 31, 2023, was HKD 155,390,000, representing a decrease of 20.1% compared to the previous year[9]. - The loss attributable to the company's owners was HKD 41,180,000, a decline of 22.5% year-on-year[9]. - The group recorded a revenue of approximately HKD 155,390,000 for the fiscal year 2023, a decrease of about HKD 39,150,000 or 20.1% compared to HKD 194,540,000 in fiscal year 2022[18]. - Revenue from the cigarette packaging business was approximately HKD 154,880,000, down HKD 12,700,000 or 7.6% from HKD 167,580,000 in the previous fiscal year[19]. - The environmental governance business generated revenue of approximately HKD 260,000, a significant decrease of HKD 26,380,000 or 99.0% from HKD 26,640,000 in fiscal year 2022[19]. - The overall gross profit for the group was approximately HKD 33,300,000, down from HKD 47,060,000 in the previous fiscal year, resulting in a gross margin of 21.4%, a decline of 2.8%[21]. - The net impairment loss on financial and contract assets was approximately HKD 17,860,000, a decrease of about HKD 10,550,000 from HKD 28,410,000 in fiscal year 2022[24]. - The net asset value of the group as of December 31, 2023, was HKD 315,200,000, down from HKD 361,260,000 in the previous fiscal year[34]. - The total cash and restricted cash balance was approximately HKD 46,130,000, a decrease from HKD 91,230,000 in the previous fiscal year[34]. - The net cash inflow from operating activities for the fiscal year 2023 was HKD 5,493,000, a significant decrease from HKD 54,891,000 in fiscal year 2022[36]. - The total capital expenditure for the year was approximately HKD 15,200,000, down from HKD 69,470,000 in the previous fiscal year[39]. - The company reported a net decrease in cash and cash equivalents of HKD 34,249,000, resulting in year-end cash and cash equivalents of HKD 12,341,000[36]. Market Conditions - The domestic tobacco industry experienced a decline in high-end tobacco sales, marking a reversal of five years of continuous high growth, with market prices continuing to fall[8]. - The company faced significant impacts from weak market demand in its tobacco packaging materials supply business, leading to a decrease in overall performance[10]. - The overall economic environment in China showed resilience, with a GDP growth rate of 5.2% by the end of the fourth quarter, despite challenges in consumer confidence and uneven recovery[8]. - The company acknowledges the impact of declining local government fiscal revenues on its operations, particularly due to reduced land transfer fees[14]. Strategic Initiatives - The company plans to adopt cautious strategies to reduce losses, including in-depth market analysis and risk assessment of strategic decisions[15]. - The company aims to explore new growth opportunities while maintaining business continuity and competitiveness under challenging market conditions[15]. - The company plans to focus on strengthening relationships with existing customers in the cigarette packaging business, which remains its primary revenue source[43]. - The company aims to explore new wastewater treatment projects to expand its revenue sources, supported by a solid technical background[43]. - The company will continue to seek business opportunities and adhere to its operational strategy to create more value for shareholders[44]. Corporate Governance - The company appointed independent non-executive directors with extensive experience in finance and law, enhancing governance and oversight[50]. - The company emphasizes a corporate culture of integrity, harmony, and excellence, aiming to provide high-quality products and services[56]. - The board held only two regular meetings this year, focusing on annual and interim performance reviews, which may indicate a need for more frequent oversight[58]. - The management did not submit monthly performance reports to the board as required, relying instead on regular updates before board meetings[59]. - The company is committed to maintaining high standards of corporate governance to ensure competitiveness and healthy growth[57]. - The new financial director has over 18 years of experience in auditing, accounting, and corporate finance, which strengthens the financial management team[54]. - The company has a significant focus on risk control and strategic planning, with key personnel involved in these areas[52]. - The company has not disclosed quarterly performance, which may affect transparency and investor confidence[58]. - The independent non-executive directors play a crucial role in audit and remuneration committees, ensuring accountability and fair practices[50]. - The board consists of two executive directors, one non-executive director, and three independent non-executive directors, ensuring a diverse range of business and professional expertise[63]. - The company aims to achieve and maintain at least 10% female representation in the board and senior management by December 31, 2024, with current gender ratio at approximately 70% male to 30% female[69]. - The nomination committee has established measurable targets for board diversity, considering factors such as gender, age, cultural background, and professional experience[70]. - The company has implemented a nomination policy to ensure qualified and competent board members, enhancing corporate strategy and shareholder value[71]. - Independent non-executive directors are required to meet independence standards as per listing rules, ensuring effective oversight and protection of shareholder interests[73]. - The company has arranged appropriate liability insurance for directors and senior management, with annual reviews of the coverage[65]. - The board is responsible for strategic decisions, performance monitoring, and ensuring compliance with applicable rules and regulations[64]. - The company encourages continuous professional development for all directors to enhance their knowledge and skills[80]. - The board retains the authority to select and approve candidates for board membership, with a third of directors required to retire and seek re-election at each annual general meeting[79]. - The audit committee's responsibilities include reviewing financial reports and monitoring the company's risk management and internal control systems[86]. - The company has established various committees, including the audit, remuneration, nomination, and corporate governance committees, to oversee specific matters[85]. - The attendance rate for the audit committee members was 100% for all meetings held[88]. - The company has adopted a standard code of conduct and confirmed compliance throughout the year[97]. - The audit committee was informed of the non-audit services provided by the auditor, which totaled HKD 1,834,000, including HKD 1,701,000 for audit services and HKD 133,000 for other services[99]. - The board confirmed its responsibility for maintaining effective risk management and internal control systems to protect shareholder interests and the group's assets[100]. - The company will distribute no less than 35% of the annual consolidated distributable profit as dividends, with the board retaining discretion over the declaration and payment[103]. - The company conducted a self-assessment to ensure compliance with risk and internal control policies, finding no significant irregularities[102]. - The board reviewed the effectiveness of the risk management and internal control systems and deemed them effective and sufficient[102]. - The company encourages shareholder participation in annual general meetings to facilitate dialogue with the board[108]. - The nomination committee has proposed the re-election of directors based on their contributions and skills, considering board diversity[92]. - The governance committee held one meeting this year to review compliance with governance policies and the company's ESG report[93]. - The company appointed a new company secretary following the retirement of the previous secretary[107]. - The company has established effective communication channels with shareholders, ensuring timely and equal access to information regarding overall performance[110]. Environmental, Social, and Governance (ESG) Initiatives - The company emphasizes the importance of ESG initiatives, integrating environmental management and social responsibility into its operational practices[116]. - The report covers the management policies and strategies related to ESG for the fiscal year 2023, focusing on two wholly-owned subsidiaries that contribute significantly to revenue[120]. - The company has a stakeholder engagement strategy that includes regular communication with shareholders, customers, employees, suppliers, and regulatory bodies to ensure long-term development goals are met[121]. - The company is committed to maintaining a stable and sustainable growth trajectory, with a focus on effective financial management and operational cost control[122]. - The company adheres to environmental regulations and pollution control laws, demonstrating compliance and commitment to sustainability[126]. - In 2023, the total carbon dioxide emissions for Shantou Xinda and Hongdong Governance were 3,329.75 tons, a decrease of approximately 8.5% compared to 2022[136]. - Shantou Xinda's volatile organic compounds (VOCs) emissions were 11.4 micrograms per cubic meter in 2023, significantly below the Guangdong provincial standard limit of 120 micrograms per cubic meter[132]. - The nitrogen oxides emissions for Shantou Xinda and Hongdong Governance totaled 0.7461 tons in 2023, an increase from 0.5704 tons in 2022[138]. - Shantou Xinda's total energy consumption decreased by approximately 8.5% in 2023 due to reduced business volume and equipment efficiency upgrades[137]. - The sulfur oxides emissions for Shantou Xinda and Hongdong Governance totaled 0.1059 tons in 2023, slightly higher than 0.0788 tons in 2022[142]. - Shantou Xinda's benzene emissions were 0.52 micrograms per cubic meter in 2023, well below the limit of 1 microgram per cubic meter[132]. - The total carbon dioxide emissions from liquefied petroleum gas were 1.00 ton in 2023, down from 28.00 tons in 2022[136]. - Shantou Xinda has implemented a comprehensive waste management policy, ensuring that hazardous waste is properly stored and collected[130]. - The company has established an emergency response plan for environmental incidents, which has been reviewed by experts and filed with relevant government departments[131]. - Regular maintenance of equipment and vehicles is conducted to ensure compliance with emissions regulations[135]. - In 2023, Shantou Xinda's solid waste generation increased to 6.200 tons, up from 4.554 tons in 2022, primarily due to a rise in waste ink liquid from 2.500 tons to 4.200 tons[145]. - The target for greenhouse gas emissions is to reduce CO2, NOx, and SOx emissions by 1% in 2024 compared to 2023 levels[150]. - The total harmless waste generated in 2023 was 25.63 tons, a decrease from 27.53 tons in 2022, with a goal to reduce this by 0.5% in the following year[148][154]. - Shantou Xinda aims to control material consumption within budget limits to achieve a 1% reduction in emissions per unit of output[157]. - The company has implemented measures to reduce energy consumption, including shutting down machines during non-production hours and optimizing air conditioning usage[158]. - The consumption of liquefied petroleum gas significantly decreased due to the switch to natural gas in the cafeteria[164]. - The total amount of harmful waste produced by Shantou Xinda was 6.200 tons in 2023, with no harmful solid waste generated by Hongdong Governance[145][156]. - The company is promoting the use of electric vehicles and shared bicycles to reduce greenhouse gas emissions during project inspections[152]. - The total harmless waste from Shantou Xinda was 19.43 tons in 2023, compared to 21.03 tons in 2022[148]. - The company is committed to using energy-efficient equipment and promoting paperless operations to minimize resource consumption[162]. - Total water consumption for 2023 was 25,915 tons, a decrease from 29,874 tons in 2022, representing a reduction of approximately 13.5%[166]. - The company aims to reduce water consumption and improve water efficiency through rainwater collection for irrigation and other uses[170]. - Shantou Xinda employed 57.36 tons of recyclable packaging materials in 2023, down from 62 tons in the previous fiscal year, indicating a reduction of about 7.3%[173]. Employee Management and Welfare - As of December 31, 2023, the total number of full-time employees was 288, with total employee compensation amounting to HKD 37,990,000[45]. - The company emphasizes fair employment practices, ensuring equal opportunities for all employees regardless of gender or disability[184]. - Employee welfare programs include social insurance, birthday celebrations, and performance-based bonuses to enhance job satisfaction and retention[185]. - 弘东治理在2023年12月31日的全职员工人数为60名，较2022年减少6名，员工性别比例为男性81.67%和女性18.33%[187]. - 汕头信达在2023年共有8名员工离职，较2022年的17名减少了53%，员工流失率显著下降[188]. - 弘东治理在2023年共有11名员工离职，较2022年的29名减少了62%[188]. - 汕头信达和弘东治理在过去三年内均未发生因工死亡事件，因工死亡率为零[190]. - 本年度，汕头信达和弘东治理均未发生工伤，因工伤损失的工作日数为零[191]. - 两家公司均已通过职业健康安全管理体系认证(GB/T45001-2020/ISO45001:2018)[189]. - 公司设立了职业安全监视小组，负责监测和测量职业健康安全参数[194]. - 本年度，汕头信达和弘东治理为各级员工提供了一系列高质量的技能培训课程，确保管理和生产等方面的行业领先地位[195]. - 弘东治理的员工年龄分布中，26-35岁年龄组占50%[187]. - 汕头信达的员工中，≥56岁年龄组占12.50%[188]. - Shantou Xinda provided training for a total of 665 employee sessions in the fiscal year 2023, an increase from 596 sessions in the fiscal year 2022[196]. - The total training hours reached 76 in fiscal year 2023, significantly up from 30 hours in fiscal year 2022[196]. - The average training hours per employee category were 4.0 hours for senior management, 2.0 hours for middle management, and 2.14 hours for other employees in fiscal year 2023[197]. - The percentage of training participation was 0.45% for senior management, 33.23% for middle management, and 66.32% for other employees in fiscal year 2023[197]. - In fiscal year 2023, Shantou Xinda conducted various training programs, including safety production operation training and quality management training, with participation ranging from 1 to 68 employees per session[199]. - Hongdong Governance provided training for a total of 59 employee sessions in fiscal year 2023, slightly up from 56 sessions in fiscal year 2022[200].
华禧控股(01689) - 2023 - 年度财报