Financial Performance - The company reported a consolidated loss attributable to shareholders of HKD 22,113,000 for the six months ended June 30, 2019, a reduction of 53.9% compared to a loss of HKD 48,015,000 in the same period last year[6]. - The group's consolidated revenue for the period was HKD 102,081,000, a decline of 16.5% from HKD 122,260,000 in the same period last year[11]. - The group reported a revenue of HKD 102,081,000 for the six months ended June 30, 2019, down from HKD 122,260,000 in the same period of 2018, representing a decline of 16.5%[30]. - The gross loss for the period was HKD 3,652,000, significantly improved from a gross loss of HKD 20,313,000 in the prior year[30]. - The group incurred a net loss of HKD 22,113,000 for the six months ended June 30, 2019, compared to a net loss of HKD 48,015,000 in the same period of 2018, reflecting a reduction in losses by 54.0%[30]. - Total comprehensive loss for the period was HKD 23,117,000, down from HKD 48,953,000 in the previous year, indicating a 53% reduction in overall losses[32]. - The company reported a loss of HKD 22,113,000 for the six months ended June 30, 2019, compared to a loss of HKD 48,015,000 for the same period in 2018, representing a 54% improvement in performance[32]. Production and Sales - The total production of cowhide leather was 5,730,000 square feet, a decrease of 23.7% from 7,506,000 square feet in the same period last year[9]. - The total sales volume of cowhide leather was 6,295,000 square feet, down 4.0% from 6,554,000 square feet in the same period last year[9]. - Revenue from leather processing and sales for the six months ended June 30, 2019, was HKD 102,081,000, a decrease of 16.5% from HKD 122,260,000 for the same period in 2018[60]. - The cost of goods sold for the six months ended June 30, 2019, was HKD 101,655,000, down from HKD 133,250,000 in 2018, reflecting a reduction of 23.7%[63]. Inventory and Procurement - The procurement amount for the period was HKD 46,759,000, a decrease of 43.1% compared to the same period last year[12]. - The group's consolidated inventory as of June 30, 2019, was HKD 82,516,000, down 38.5% from HKD 134,131,000 as of December 31, 2018[12]. - The company experienced a decrease in inventory from HKD 134,131,000 to HKD 82,516,000, representing a reduction of approximately 38%[34]. Cash Flow and Assets - As of June 30, 2019, the group's cash and cash equivalents amounted to HKD 25,585,000, a decrease of 7.0% from HKD 27,513,000 as of December 31, 2018[15]. - Cash flow from operating activities showed a net outflow of HKD 910,000 for the six months ended June 30, 2019, compared to an inflow of HKD 23,196,000 in the same period of 2018[37]. - Current assets decreased to HKD 193,734,000 from HKD 226,220,000, a reduction of about 15% year-over-year[34]. - Non-current assets decreased to HKD 57,034,000 as of June 30, 2019, from HKD 58,516,000 at the end of 2018, reflecting a decline of approximately 2.5%[34]. Liabilities and Equity - The group's interest-bearing loans totaled HKD 142,379,000, with a debt-to-equity ratio of 79.8% as of June 30, 2019, compared to 70.7% as of December 31, 2018[16]. - Current liabilities decreased significantly to HKD 55,213,000 from HKD 79,424,000, a reduction of about 30%[34]. - The net asset value dropped to HKD 35,976,000 as of June 30, 2019, down from HKD 59,093,000 at the end of 2018, indicating a decline of approximately 39%[34]. Employee and Management - The group employed 384 staff as of June 30, 2019, a decrease from 393 employees as of December 31, 2018[21]. - The company reported a total of 385,000 HKD in remuneration for key management personnel, unchanged from 2018[104]. Financial Reporting and Compliance - The company adopted the Hong Kong Financial Reporting Standard No. 16, which replaces the previous standard on leases, requiring all leases to be recognized on the balance sheet[44]. - The financial impact of adopting the new lease standard was assessed, with no significant effects on the unaudited interim financial information[44]. - The company reported that the accounting policies adopted for the interim financial information are consistent with those used in the previous financial year, except for the new standards effective from January 1, 2019[41]. - The auditor's report for the year ended December 31, 2018, did not contain any qualifications or matters of emphasis[42]. Related Party Transactions - The company’s related party transactions included monthly maintenance fees for computer systems, which increased from HKD 13,000 to HKD 15,000[101]. - The company incurred office rent of HKD 267,000 to a related subsidiary, consistent with the previous year's amount[97]. Corporate Governance - The company has complied with the Corporate Governance Code during the six months ending June 30, 2019, with some deviations noted regarding the roles of the Chairman and CEO[113].

Financial Performance - The company reported a consolidated loss attributable to shareholders of HKD 81,241,000 for the year ended December 31, 2018, a decrease in loss of 18.5% compared to HKD 99,623,000 in 2017[25]. - Revenue for the year was HKD 238,317,000, down 26.0% from HKD 322,146,000 in 2017[22]. - The sales revenue from cowhide leather was HKD 223,663,000, down 24.6% from HKD 296,705,000 in 2017[38]. - The operating loss for the year was HKD 75.1 million, compared to a loss of HKD 92.1 million in the previous year[83]. - The total assets decreased to HKD 284.7 million in 2018 from HKD 420.9 million in 2017, representing a decline of 32.3%[85]. - The total liabilities were HKD 225.6 million, down from HKD 269.6 million in 2017, indicating a reduction of 16.3%[85]. - The net asset value dropped to HKD 59.1 million in 2018, a significant decrease of 60.9% from HKD 151.3 million in 2017[85]. - The company did not declare any interim or final dividends for the year ended December 31, 2018[68][69]. Production and Sales - The sales volume of cowhide leather decreased by 15.2% to 14,155 thousand square feet from 16,684 thousand square feet in the previous year[22]. - In 2018, the total production of cowhide leather was 13,051,000 square feet, a decrease of 20.3% from 16,380,000 square feet in the previous year[38]. - The total sales volume of cowhide leather was 14,155,000 square feet, down 15.2% from 16,684,000 square feet in 2017[38]. - The total procurement amount for the year was HKD 166,398,000, a decrease of 43.0% compared to the previous year[39]. Inventory and Assets - As of December 31, 2018, the group's total inventory was HKD 134,131,000, down 38.7% from HKD 218,900,000 at the end of 2017[41]. - The company's inventory (net of provisions) was approximately HKD 134,100,000, accounting for about 59.3% of the total current assets[190]. - The impairment assessment for cash-generating units required significant management judgment and assumptions, including sales growth rates, sales prices, operating expenses, and discount rates[190]. - The company’s inventory provision assessment involved evaluating the net realizable value based on inventory aging, historical sales performance, and expected future sales[190]. Financial Management and Governance - The company is committed to ensuring accurate financial reporting and compliance through its experienced board and management team[65]. - The financial director, Li Huiwei, has over 15 years of auditing and accounting experience, contributing to the group's financial management[62]. - The board of directors includes experienced professionals with extensive backgrounds in finance, law, and management, enhancing corporate governance[61][60][59]. - The company has arranged for appropriate and effective directors and officers liability insurance for its directors and senior management[100]. - The board is responsible for reviewing and monitoring the company's compliance with legal and regulatory requirements[143]. Risk Management - The company faces market risks due to shrinking demand in the leather industry, leading to increased operational and profitability risks[75]. - Environmental compliance risks have increased operational costs due to stricter regulations, prompting the company to adopt cleaner production technologies[76]. - The company is actively managing liquidity risks by monitoring market interest and exchange rate fluctuations to ensure cash flow stability[80]. - The internal control system is designed to mitigate risks, improve operational efficiency, and ensure compliance with relevant laws and regulations[163]. Employee Management - The group had 393 employees, a decrease from 461 employees on December 31, 2017[49]. - The employee compensation policy is based on the group's operational performance and individual performance, with bonuses tied to operational net cash flow and after-tax profit[49]. - The group emphasizes a performance-based reward system to enhance employee engagement and productivity[49]. - The company has implemented a performance evaluation mechanism that effectively motivates employees by linking rewards to individual performance[49]. Corporate Governance - The company is committed to high standards of corporate governance and has adhered to the corporate governance code during the fiscal year[125]. - The board consists of seven members, including three independent non-executive directors, ensuring a balanced structure in terms of age, professional experience, skills, and knowledge[140]. - The nomination committee is tasked with identifying suitable candidates for the board and recommending them for appointment[150]. - Independent non-executive directors have confirmed their independence, and their long tenure has not adversely affected their independent judgment[135]. Audit and Compliance - The audit committee held five meetings during the fiscal year ending December 31, 2018, to review the full-year results, interim results, and quarterly results before submission to the board[154]. - The total fees paid to the external auditor, Ernst & Young, amounted to HKD 1,450,000 for the annual audit and HKD 350,000 for the interim review[157]. - The audit committee ensures that management has fulfilled its responsibilities in establishing effective risk management and internal control systems[154]. - The company aims to enhance corporate governance and transparency by publishing unaudited financial data quarterly[161].