Corporate Governance - The Nomination Committee held two meetings in the year ending December 31, 2023, to review the board's structure, size, composition, and the effectiveness of the diversity policy[2]. - The board has delegated corporate governance responsibilities to the Audit Committee, which includes reviewing and monitoring compliance with legal and regulatory requirements[3]. - The company has adopted a code of conduct for securities trading by directors, ensuring compliance with the standards set forth in the listing rules[8]. - All directors confirmed compliance with the code of conduct and relevant regulations during the year ending December 31, 2023[8]. - The board has established procedures for directors to seek independent professional advice at the company's expense[9]. - The company has provided all directors with training on their responsibilities and relevant regulations, ensuring they are aware of good corporate governance practices[9]. - The independent non-executive directors attended all meetings, demonstrating strong engagement in corporate governance[6]. - The board diversity policy is in place to ensure a balanced composition in terms of skills, experience, and perspectives, with annual discussions on measurable diversity goals[20]. - The company has adopted the corporate governance code as per the listing rules, ensuring compliance with all relevant provisions as of December 31, 2023[132]. - The board is committed to maintaining high standards of corporate governance and accountability, ensuring transparency in operations[155]. - The company has a whistleblowing policy to encourage reporting of concerns related to operations, ensuring independent opinions are considered[161]. - The nomination committee is chaired by the board chairman, with a majority of independent non-executive directors, to assess the effectiveness of governance mechanisms[162]. - The company emphasizes the importance of independent opinions and has conducted annual reviews of its governance mechanisms to ensure effectiveness[162]. - The company has established appropriate insurance to protect its directors and senior officers against potential liabilities arising from company activities[167]. - The company has a clear division of roles between the chairman and the CEO to enhance independence and ensure checks and balances[167]. - The company has a policy for the re-election of directors, ensuring that at least one-third of the board retires at each annual general meeting[183]. Financial Performance - For the year ended December 31, 2023, the group's revenue was HKD 361,301,000, an increase of approximately 13.1% compared to HKD 319,535,000 in 2022[53]. - The revenue from terminal and related businesses grew by 15.0% to HKD 152,042,000, primarily due to increased container throughput at Yangluo Port[53]. - Supply chain management and trading business revenue surged by 34.9% to HKD 158,281,000, accounting for approximately 43.8% of total revenue[65]. - The gross profit decreased by 9.0% to HKD 77,653,000, with a gross profit margin of 21.5%, down from 26.7% in 2022[66]. - The profit attributable to the company's owners decreased by HKD 5,415,000 or approximately 26.1% to HKD 15,360,000 for the year ended December 31, 2023, compared to HKD 20,775,000 in 2022[77]. - The basic and diluted earnings per share attributable to the company's owners were HKD 0.89, a decrease of 25.8% from HKD 1.20 in the previous year[77]. - Other income increased by approximately 305.0% to HKD 22,117,000 for the year ended December 31, 2023, compared to HKD 6,201,000 in 2022[79]. - The group recorded a fair value loss on investment properties of HKD 993,000, compared to a fair value gain of HKD 25,785,000 in 2022[68]. - The net asset value of the group as of December 31, 2023, was HKD 864,757,000, down from HKD 881,566,000 in 2022[107]. - The total outstanding interest-bearing borrowings of the group as of December 31, 2023, amounted to HKD 375,434,000, a decrease from HKD 427,293,000 in 2022[107]. Operational Performance - The container throughput reached 900,142 TEUs, representing a year-on-year increase of 12.3%[35]. - CFS dismantling and assembly business significantly grew, completing 18,661 TEUs, up 10% from the previous year[35]. - The overall cargo throughput of inland ports in China reached 3.8 billion tons, a year-on-year increase of 14.2%[39]. - Revenue from container handling, storage, and other services increased by 46.4% to HKD 37,161,000 from HKD 25,384,000[49]. - The comprehensive logistics services revenue decreased by 37.4% to HKD 38,230,000 from HKD 61,067,000[49]. - The total throughput at Yangluo Port increased by about 12.3% to 900,142 TEUs, with local cargo throughput decreasing by 4.8% and transshipment cargo increasing by 24.7%[61]. - The rental income from warehouses and yards at Wuhan Hannan Port increased by 43.2% to HKD 12,748,000, representing about 3.5% of total revenue[65]. - The company aims to build a comprehensive port logistics system, focusing on core industries such as port construction and operation, port and warehouse leasing, and logistics services[28]. - The company is expanding its integrated service system to include comprehensive port processing trade and infrastructure investment, aiming to create the largest inland port logistics system in China[28]. - The company aims to develop Hannan Port into a multi-business platform, enhancing logistics services and creating synergies with Wuhan Yangluo Port[43]. Risk Management - The internal control and risk management systems have been confirmed as effective and sufficient, with no significant failures reported, ensuring compliance with relevant laws and regulations[18]. - The group faces significant cash flow risks if it encounters difficulties in collecting receivables, which could adversely impact its financial condition[102]. - The competitive landscape in the supply chain management industry is intense and fragmented, potentially affecting the group's ability to attract and retain customers[101]. - The group is exposed to operational risks, including delays in the completion of development and construction projects[116]. - The group may face inventory accumulation risks if customers cancel orders, which could negatively impact its financial status[120]. - The group has significant investments in properties, including port and warehouse facilities, which are influenced by the economic performance of Hubei Province[100]. Human Resources - The company employed 357 full-time staff as of December 31, 2023, down from 369 in 2022, maintaining good labor relations[91]. - The group aims to enhance employee skills and knowledge through targeted training and development programs[111]. - The group is at risk of not being able to attract and retain key employees due to talent competition in its operational regions[115]. Strategic Initiatives - The company is focused on a three-pronged growth strategy: "internal-driven growth," "smart reform," and "innovation," to enhance service quality and market expansion[28]. - The company plans to further invest in the Wuhan area to enhance its port business, leveraging its strategic location along the Yangtze River[36]. - The introduction of new business in pebble-to-container conversion is expected to generate an additional annual income of nearly RMB 500,000[35]. Board and Management - The board consists of seven members responsible for formulating business strategies and monitoring the group's performance[158]. - The management team is dedicated to enhancing corporate value and accountability to protect shareholder interests[156]. - The company appointed Mr. Zou Guoqiang as an independent non-executive director in May 2022, with extensive experience in financial management and corporate governance[125]. - Mr. Fu Xinping has been an independent non-executive director since May 2022, and is a professor at Wuhan University of Technology, contributing expertise in transportation management[127]. - The company appointed Mr. Qiao Yun as the General Manager since May 2022, who has extensive experience in logistics services[144]. - Mr. Xu Ao Ling has been serving as a non-executive director since May 2022 and has been involved in financial management within the Hubei Port Group since 2021[144]. Audit and Remuneration - The remuneration committee held three meetings during the year to review the company's remuneration policies, including the compensation structure for directors and senior management[169]. - The audit committee conducted three meetings during the year, reviewing interim and annual performance, risk management reports, and internal control systems[188]. - The company has adopted a whistleblowing policy allowing employees to report misconduct or malpractice confidentially to the audit committee[173]. - The company has appointed an independent professional firm to conduct internal audits of its internal control systems[188]. - The remuneration committee's responsibilities include assisting in the formulation of transparent remuneration policies and ensuring no director participates in determining their own remuneration[186].
中国通商集团(01719) - 2023 - 年度财报