Financial Performance - For the year ended December 31, 2023, revenue from the manufacturing and trading of toys decreased by approximately 38.4% to HK$522.8 million, primarily due to reduced purchase orders from a major US customer[17]. - Revenue from the plantation and sale of agricultural products in Japan was HK$0.44 million for the year ended December 31, 2023[18]. - For FY2023, the Group recorded revenue of approximately HK$523.3 million, representing a decrease of approximately 38.4% compared to HK$849.1 million in FY2022[31]. - The net loss for FY2023 amounted to approximately HK$29.4 million, a significant decline from the net profit of approximately HK$8.1 million in FY2022[33]. - The Toys Division's revenue decreased by approximately 38.4% to HK$522.8 million, with gross profit dropping to approximately HK$39.2 million, a decrease of approximately 60.0% from FY2022[34]. - The Agricultural Products Division generated revenue of HK$0.44 million and recorded a segment loss before taxation of approximately HK$3.3 million due to its development stage in FY2023[40]. Operational Challenges and Strategies - The company anticipates that 2024 will be a challenging year, with continued pressure on product margins and turnover in the Toys Division[19]. - Cost-cutting measures have been implemented to reduce operating costs and improve the company's financial position[20]. - The company is seeking to diversify its principal business activities and move towards more profitable sectors to ensure shareholder returns[20]. - The Board is cautiously optimistic about the performance improvements in both the Toys Division and Agricultural Products Division[26]. - The company plans to explore new business opportunities with lower management costs and seek new potential customers to increase market share[26]. Capital and Funding - The company issued new shares under the General Mandate amounting to approximately HK$6.5 million on January 15, 2024, to explore opportunities and provide sufficient working capital[21]. - The Group has proposed to issue shares under the general mandate on January 15, 2024, to support ongoing business operations despite the net liabilities status[43]. - Management believes that the Group will have sufficient working capital for at least 12 months from December 31, 2023, due to successful measures such as share issuance and loan maturity extensions[54]. - The management plans to raise equity funds through placing new shares and/or rights issues by the end of 2024 to address auditor concerns regarding going concern issues[60]. - Management acknowledges the need for further equity funding to resolve the auditor's concerns and will actively seek potential investors[60]. Going Concern and Audit Issues - The Group's auditor issued a disclaimer of opinion on the consolidated financial statement for FY2023 due to material uncertainty regarding the Group's ability to continue as a going concern[47]. - The Group's current net current liabilities and net liabilities are approximately HKD 185,184,000 and HKD 80,869,000 respectively, with bank balances around HKD 119,335,000, indicating significant uncertainty regarding the Group's ability to continue as a going concern[50]. - The Group's ability to generate operating cash flows and secure additional financing remains uncertain, which is a key factor in the auditor's disclaimer[55]. - The Group aims to remove the disclaimer in the audit of the consolidated financial statements for the year ending December 31, 2024, if all plans are successfully completed[61]. - The Group's consolidated financial statements have been prepared on a going concern basis, contingent on the successful implementation of management's plans and obtaining additional financing[55]. Environmental, Social, and Governance (ESG) Initiatives - The Group's ESG Report for 2023 covers commitments, practices, and performance from January 1, 2023, to December 31, 2023, focusing on the toy manufacturing and trading business[74]. - The Group maintains the same ESG management structure and process as the previous reporting period, ensuring consistency in monitoring ESG issues and performance[86]. - The Group emphasizes the importance of resource management and occupational health and safety in achieving a good corporate image[71]. - The Group conducts regular stakeholder engagement and materiality assessments to identify key ESG-related issues[82]. - The Group's commitment to ethical standards and compliance with relevant laws is emphasized in all ESG matters[86]. Environmental Performance - Total GHG emissions decreased by 28.18% from 7,380 tonnes in 2022 to 5,300 tonnes in 2023[1]. - Scope 1 emissions reduced by 16.59% from 205 tonnes in 2022 to 171 tonnes in 2023[1]. - Scope 2 emissions decreased by 28.52% from 7,175 tonnes in 2022 to 5,129 tonnes in 2023[1]. - The Group targets to lower total GHG emissions by 2-3% for the coming year through various energy efficiency initiatives[3]. - The Group has implemented a VOCs removal system to ensure emissions are within legal requirements[4]. Employee Welfare and Safety - The Group's employment policy is regularly updated and certified by ICTI CARE Foundation, ensuring safe and fair working conditions[158]. - The Group adopts fair recruitment procedures, prohibiting discrimination based on various personal attributes[162]. - The Group provides additional medical insurance beyond the "Five social insurance and one housing fund" for extra protection[192]. - The Group has attained OHSAS 18001 certification to systematize occupational health and safety management[192]. - The Group offers regular medical checks and stress management courses to ensure employee well-being[191].
瀛晟科学(00209) - 2023 - 年度财报