Forest Management and Operations - The company owns concession rights for approximately 615,333 hectares of forests in Peru as of December 31, 2023[75]. - Approximately 14.21% and 3.48% of the company's forests are covered by Cumaru and Estoraque timber species, respectively, as of December 31, 2023[76]. - The company has established a vertically-integrated business model that enhances operational efficiency and quality control throughout the timber supply chain[79]. - As of December 31, 2023, the company managed approximately 112,600 hectares of forests for local forest owners in Peru under FSC management agreements[80]. - The company has a total of five subsidiaries that have obtained FSC CoC certifications, enhancing its credibility in sustainable forestry practices[77]. - The company has built a professional forest management team with an average of over 8 years of experience in FSC forest management[131]. - The company engages in timber auctions in France for log supply and collaborates with local forest owners in Peru[131]. Revenue and Financial Performance - Total revenue for the year ended December 31, 2023, was 55,339,000 in 2022[81]. - Revenue from logs was 6,049,000, representing 23.8% of total revenue, compared to 21.7% in 2022[81]. - Revenue from decking was 11.5 million for 2023, compared to a total comprehensive income of approximately 2.4 million, representing a significant decrease of approximately 88.0% from 10.4 million in revenue from logs, accounting for 40.9% of total revenues in 2023, down from 50.2% in 2022[141]. - Flooring revenue was 7.7 million, accounting for 30.1% of total revenues[141]. Market and Sales - Sales to China accounted for 60.9% of total revenue at 8,095,000, representing 31.8% of total revenue, an increase from 27.6% in 2022[82]. - The company is facing increased competition in the international timber market due to environmental protection policies and export restrictions[83]. - Seasonal fluctuations affect sales, with typically lower sales in the first and fourth quarters due to adverse weather conditions[84]. - The company has a diverse product line including logs, decking, flooring, and sawn timber, with a focus on maintaining strong customer relationships[83]. Compliance and Regulations - The company has maintained compliance with all relevant laws and regulations, with no incidents of non-compliance reported during the years ended December 31, 2021, 2022, and 2023[90]. - The company is subject to Peruvian forestry regulations, which include the Organic Act for the sustainable use of natural resources and the Forest and Wildlife Act[92]. - The company is required to pay economic compensation to the Peruvian government for the right of use granted over public forests, calculated based on area and exploitation value[93]. - The company must obtain environmental certifications before commencing projects, classified by their potential impact[94]. Corporate Governance and Management - The company has established three committees under the board of directors: audit committee, compensation committee, and nominating and corporate governance committee[160]. - The audit committee consists of three independent directors, all of whom qualify as "audit committee financial experts" under Nasdaq Listing Rules[158]. - The company is a "foreign private issuer," allowing it to comply with home country governance requirements instead of Nasdaq standards[161]. - The total compensation for executive officers and directors for the fiscal year ended December 31, 2023, amounted to 3.979 million as of December 31, 2023, from 0.2 million for the year ended December 31, 2023, a significant decrease from 5.1 million from its IPO, providing a new source of capital for business expansion[149]. - The company believes its cash and cash equivalents, along with available funds from its credit facility, are sufficient to fund working capital and capital expenditure requirements for at least the next twelve months[149]. Taxation and Financial Regulations - Dividend distributions are subject to a 5% tax in Peru, and companies can only pay dividends if approved by the General Shareholders Meeting[95]. - Companies engaged in forestry activities in Peru may benefit from a preferential income tax regime with rates of 15% for revenues up to 1,700 tax units, increasing to 29.5% by 2028 for higher revenues[98]. - The standard corporate income tax (CIT) rate in France is 25%, with a reduced rate of 15% for small and medium corporations on net taxable profits below €38,120[178]. - The withholding tax rate for dividends paid to corporations is generally 25%, but can increase to 75% for payments made to non-cooperative states[180]. Risk Management and Internal Controls - The company has not identified any material weaknesses in its internal control over financial reporting as of December 31, 2023[214]. - The company has implemented information security processes to manage material risks from cybersecurity threats, including annual employee training and systems monitoring[220]. - The independent Directors oversee the company's cybersecurity risk management processes, ensuring integration into overall risk management strategy[220]. - The company’s disclosure controls and procedures were deemed effective as of December 31, 2023[213]. Shareholder Information - Major shareholders include Mr. Hok Pan Se, who beneficially owns 70.18% of the ordinary shares[169]. - The total number of shares issued and outstanding as of the date of this report is 132,425,321 ordinary shares[172]. - The maximum authorized shares of the Company is 200,000,000 shares[172]. - The Company’s ADSs began trading on the Nasdaq Capital Market under the symbol "NWGL" on September 12, 2023[171].
Nature Wood(NWGL) - 2023 Q4 - Annual Report