Financial Performance - The company reported a comprehensive loss attributable to shareholders of HKD 19,943,000 for the year ended December 31, 2021, an increase in loss of 624.9% compared to HKD 2,751,000 in 2020[14]. - Revenue for the year was HKD 196,231,000, reflecting a 2.5% increase from HKD 191,404,000 in 2020[11]. - The operating loss for 2021 was HKD (17,692,000), compared to a profit of HKD 2,020,000 in 2020[71]. - The pre-tax loss for 2021 was HKD (19,686,000), worsening from a loss of HKD (2,624,000) in 2020[71]. - The total assets as of December 31, 2021, were HKD 228,284,000, with total liabilities of HKD 53,748,000[73]. - The group reported a cash and cash equivalents balance of HKD 18,942,000, a decrease of 68.9% from HKD 60,939,000 in the previous year[32]. - The group had no interest-bearing loans as of December 31, 2021, compared to HKD 386,000 in interest-bearing loans in 2020[33]. - The group recognized an impairment loss of approximately HKD 4,500,000 in the consolidated income statement for the year ended December 31, 2021, due to operating losses[196]. Sales and Production - The sales volume of cowhide leather decreased by 18.0% to 12,262 thousand square feet from 14,949 thousand square feet in 2020[11]. - The total production of cowhide leather for the year was 11,706,000 square feet, a decrease of 10.4% from last year's 13,058,000 square feet[24]. - The total sales of cowhide leather for the year were 12,262,000 square feet, down 18.0% from last year's 14,949,000 square feet[24]. - Sales of cowhide leather amounted to HKD 171,485,000, a slight increase of 0.4% from HKD 170,736,000 in 2020[26]. Dividends and Shareholder Returns - The company did not recommend the payment of a final dividend for the year ended December 31, 2021, consistent with 2020[15]. - The company did not declare an interim dividend during the year and the board does not recommend a final dividend for the year ended December 31, 2021[54]. - The board aims to provide stable and sustainable returns to shareholders, considering factors such as earnings performance, financial condition, investment needs, and future prospects when deciding on dividends[55]. Corporate Governance - The board of directors includes experienced individuals with diverse backgrounds in finance, management, and industry, enhancing the company's governance[49][50][51]. - The company has complied with the corporate governance code during the fiscal year ending December 31, 2021, except for certain disclosures due to travel restrictions[112]. - The independent non-executive directors have confirmed their independence in accordance with the listing rules[122]. - The company is committed to achieving the highest standards of corporate governance to align with business needs and stakeholder interests[112]. - The board has established a comprehensive risk management and internal control system to identify, assess, and manage significant risks faced by the Group[166]. Environmental and Operational Improvements - Environmental improvements were made, including the reconstruction of hazardous waste storage and the addition of waste gas collection facilities to enhance operational efficiency[23]. - The company has increased its investment in environmental improvement projects to comply with stricter environmental regulations[64]. - The company is committed to protecting the environment and ensuring compliance with applicable environmental standards and laws[177]. Strategic Plans and Future Development - The company plans to implement a product strategy, optimize production capacity, and promote innovation to enhance market competitiveness in 2022[18]. - The company aims to strengthen its technical team and advance product development and design to create a complete product system without generating new inventory[18]. - The company has a strategic focus on sustainable growth and market expansion, as indicated by its ongoing investments and operational strategies[56]. Risk Management - The company faced significant market risks due to the ongoing impact of the pandemic, leading to a continuous decline in demand for leather products[63]. - The liquidity risk is heightened due to shrinking market demand and potential difficulties in collecting payments from downstream shoe manufacturers[67]. - The company has implemented a cash flow forecasting model to manage liquidity risks effectively[67]. Shareholder Communication - The company promotes investor relations and communication through regular briefings, announcements, video conferences, and presentations to respond to information requests from investors[175]. - The company has established a shareholder communication policy to ensure shareholders can exercise their rights with informed knowledge[175]. - Shareholders holding at least 5% of the voting rights can request the board to convene a special general meeting within 21 days[172]. Audit and Internal Controls - The Audit Committee held four meetings during the fiscal year ending December 31, 2021, reviewing the full-year results for 2020, mid-year, and quarterly results before submission to the Board[157]. - The Board is responsible for overseeing the preparation of the financial statements for the fiscal year ending December 31, 2021, ensuring they reflect a true and fair view of the Group's affairs[163]. - The internal audit department ensures compliance with policies and procedures, risk management, and the effectiveness of internal control systems, focusing on high-risk areas for audit resources[167].

Revenue Performance - For the three months ended March 31, 2022, the company's revenue was approximately HKD 23,405,000, a decrease of 55% compared to HKD 52,132,000 in the same period last year[3]. - The decrease in revenue was primarily due to weak demand for cowhide products[7]. Financial Loss - The company's attributable consolidated loss was approximately HKD 10,280,000, an increase of 125% from HKD 4,572,000 in the previous year[7]. Production and Sales Volume - Total production of cowhide leather was approximately 1,020,000 square feet, down 66% from approximately 3,060,000 square feet in the same period last year[6]. - Total sales volume of cowhide leather was approximately 1,280,000 square feet, a decrease of 66% compared to approximately 3,741,000 square feet in the previous year[6]. - The production of grey leather was approximately 78 tons, down 90% from approximately 806 tons in the same period last year[6]. - The sales of grey leather and other products were zero, a decline of 100% from approximately HKD 2,976,000 in the previous year[7]. Market Challenges - The company faced challenges such as overcapacity, weak demand, and narrowing profit margins in the leather market[6]. - The factory in Xuzhou, Jiangsu Province, experienced production stoppages for several weeks due to pandemic control measures, leading to a decrease in output[6]. Product Development - The company continues to strengthen product development and design while implementing quality control throughout the production process[6].

Financial Performance - The company reported a consolidated loss attributable to shareholders of HKD 3,995,000 for the six months ended June 30, 2021, a reduction of HKD 5,636,000 or 58.5% compared to a loss of HKD 9,631,000 in the same period last year [19]. - The consolidated revenue for the period was HKD 112,398,000, an increase of HKD 56,747,000 or 102.0% from HKD 55,651,000 in the same period last year [23]. - Sales revenue from cowhide leather was HKD 100,497,000, up 119.5% from HKD 45,780,000 in the same period last year [23]. - The group recorded a net cash outflow from operating activities of HKD 34,562,000, primarily due to increased inventory [28]. - The group reported a pre-tax loss of HKD 3,995,000 for the six months ended June 30, 2021, compared to a loss of HKD 9,631,000 for the same period in 2020, indicating a reduction in losses [115]. - The total comprehensive loss for the period was HKD 1,680,000, significantly lower than HKD 13,542,000 in the same period of 2020 [47]. - The company reported a net loss of HKD 3,995,000 for the six months ended June 30, 2021, an improvement from a net loss of HKD 9,631,000 in the prior year [45]. - Basic and diluted loss per share improved to HKD 0.74 from HKD 1.79 in the same period last year [45]. Production and Procurement - The total production of cowhide leather reached 6,749,000 square feet, an increase of 2,592,000 square feet or 62.4% compared to 4,157,000 square feet in the same period last year [21]. - The total procurement amount for the period was HKD 102,157,000, an increase of 72.5% compared to the same period last year [24]. - The cost of goods sold was HKD 101,322,000 for the six months ended June 30, 2021, compared to HKD 57,005,000 for the same period in 2020, reflecting an increase in production costs [110]. Assets and Liabilities - The net asset value of the company as of June 30, 2021, was HKD 26,264,000, an increase of HKD 20,118,000 compared to the previous year [19]. - Total assets as of June 30, 2021, were HKD 203,098,000, up from HKD 196,076,000 at the end of 2020 [49]. - Current liabilities increased to HKD 69,773,000 from HKD 62,569,000 at the end of 2020, reflecting a rise in accounts payable [49]. - The group's interest-bearing loans totaled HKD 142,548,000, compared to HKD 386,000 as of December 31, 2020, with a debt-to-equity ratio of 84.4% [29]. - The group had a trust receipt loan of HKD 4,529,000 as of June 30, 2021, significantly up from HKD 386,000 as of December 31, 2020 [125]. - The company’s total liabilities increased to HKD 335,711 million as of June 30, 2021, compared to HKD 331,716 million as of January 1, 2021, representing a slight increase of approximately 1.2% [92]. Cash Flow and Financial Position - The group's cash and cash equivalents amounted to HKD 23,756,000, a decrease of HKD 37,183,000 or 61.0% from December 31, 2020 [28]. - The company reported a cash outflow from operating activities of HKD 34,562 million for the six months ended June 30, 2021, compared to HKD 17,003 million for the same period in 2020, indicating a worsening cash flow situation [95]. - The company’s financial expenses for the six months ended June 30, 2021, were HKD 1,364 million, compared to HKD 2,588 million for the same period in 2020, indicating a decrease of approximately 47% [95]. - The company reported a decrease in cash flow from investing activities, with a net cash outflow of HKD 2,954 million for the six months ended June 30, 2021, compared to HKD 4,010 million for the same period in 2020 [95]. Operational Strategies and Market Position - The company implemented a marketing strategy focusing on "full product production and sales," which contributed to improved operational efficiency and profitability [20]. - The company actively expanded its innovative business to enhance product value and create new profit growth points [20]. - The group plans to enhance R&D efforts and focus on developing high-end and high-value-added products to improve profitability [37]. - The company continues to focus on improving operational efficiency and exploring market expansion opportunities [45]. - The company expects a revenue growth forecast of 10% for the next fiscal year, driven by new product launches and market expansion strategies [169]. - A strategic acquisition of a local competitor is anticipated to enhance operational efficiency and broaden the product portfolio [169]. Employee and Management Information - The group had 385 employees as of June 30, 2021, a decrease from 392 employees as of December 31, 2020 [35]. - Total remuneration for key management personnel increased to HKD 516,000 for the six months ended June 30, 2021, compared to HKD 383,000 in the same period of 2020, reflecting a growth of approximately 34.7% [154]. Customer and Market Insights - Major customers contributing over 10% of total revenue include Customer A with HKD 23,197,000 (up from HKD 7,425,000), Customer B with HKD 20,705,000 (up from HKD 12,649,000), and Customer C with HKD 14,814,000 (up from HKD 6,143,000) [106]. - Customer satisfaction ratings have improved by 15%, indicating a positive response to recent service enhancements [169]. Compliance and Governance - The company has adhered to the Corporate Governance Code as per the Listing Rules during the six months ended June 30, 2021 [165]. - The company’s management confirmed compliance with the standards set forth in the Securities Trading Code during the six months ended June 30, 2021 [166].

Financial Performance - The company reported a significant reduction in net loss for the year ended December 31, 2020, amounting to HKD 2,751,000, a decrease of 92.9% compared to HKD 38,994,000 in 2019[16]. - Total revenue for the year was HKD 191,404,000, reflecting a growth of 7.5% from HKD 178,020,000 in the previous year[6]. - The group's consolidated revenue for 2020 was HKD 191,404,000, a 7.5% increase from HKD 178,020,000 in 2019[24]. - The operating profit for the year was HKD 2.020 million, a significant recovery from an operating loss of HKD 33.234 million in 2019[68]. - The group reported a pre-tax loss of HKD 2.624 million for the year, an improvement from a pre-tax loss of HKD 38.928 million in 2019[68]. - Total comprehensive income for the year was HKD 8,256,000, compared to a total comprehensive loss of HKD 44,353,000 in 2019[187]. - The company reported a basic and diluted loss per share of HKD 0.51, a significant improvement from HKD 7.25 in 2019[184]. - The company recognized a foreign exchange gain of HKD 10,677,000 in 2020, compared to a loss of HKD 3,664,000 in 2019, indicating favorable currency movements[187]. Sales and Production - The sales volume of cowhide leather increased by 30.7% to 14,949 thousand square feet in 2020, compared to 11,439 thousand square feet in 2019[6]. - In 2020, the total production of cowhide leather reached 13,058,000 square feet, an increase of 32.6% compared to 9,851,000 square feet in the previous year[23]. - The total sales volume of cowhide leather was 14,949,000 square feet, up 30.7% from 11,439,000 square feet in 2019[23]. - The sales revenue of cowhide leather was HKD 170,736,000, a slight increase of 1.2% from HKD 168,729,000 in 2019[24]. Financial Position - The company's current ratio improved to 3.13 times, up 4.0% from 3.01 times in 2019, indicating better short-term financial health[6]. - The net asset value as of December 31, 2020, was HKD 27,944,000, an increase of HKD 12,201,000 from the previous year[16]. - The total assets of the group as of December 31, 2020, amounted to HKD 251.528 million, while total liabilities were HKD 223.584 million, resulting in a net asset value of HKD 27.944 million[69]. - Current assets rose to HKD 196,076,000 in 2020, up from HKD 185,041,000 in 2019, driven by an increase in receivables and cash[189]. - Current liabilities increased slightly to HKD 62,569,000 in 2020 from HKD 61,537,000 in 2019[189]. - Net assets improved to HKD 27,944,000 in 2020, compared to HKD 15,743,000 in 2019, reflecting a stronger financial position[191]. Cost Management and Efficiency - The company aims to optimize production capacity and reduce costs while expanding its processing business to improve operational efficiency[14]. - The total procurement amount for the year was HKD 132,493,000, reflecting a 15.2% increase compared to the previous year[25]. - The interest expense for the year was HKD 4,644,000, a decrease of 18.4% compared to the previous year, primarily due to lower loan rates[30]. - The company incurred financial expenses of HKD 4,644,000 in 2020, down from HKD 5,694,000 in 2019, reflecting improved cost management[196]. Corporate Governance - The company has committed to the highest corporate governance standards, applying the principles outlined in the Corporate Governance Code[108]. - The board structure includes two executive directors, two non-executive directors, and three independent non-executive directors, ensuring a high level of independence[113]. - The company has adopted a board diversity policy to enhance strategic goals and sustainable development, considering factors such as gender, age, and professional experience[125]. - The audit committee held four meetings during the fiscal year ending December 31, 2020, to review the company's financial performance and ensure the integrity of financial statements[139]. Environmental and Risk Management - The company emphasizes the importance of environmental safety and risk management in its operational strategies moving forward[14]. - The group has increased its investment in environmental improvement projects to comply with stricter environmental regulations, which has raised operational costs[61]. - The company is committed to environmental protection and compliance with applicable environmental standards and regulations, having obtained the necessary permits and approvals for its operations[156]. - The company has implemented a risk management system to identify, assess, and manage significant risks[147]. Inventory and Asset Management - As of December 31, 2020, the group's total inventory was HKD 60,260,000, a decrease of 23.7% from HKD 78,930,000 at the end of 2019[27]. - The group's inventory (net of provisions) was approximately HKD 60,300,000 as of December 31, 2020[168]. - The company experienced a significant decrease in inventory provisions, amounting to HKD (31,244,000) in 2020 compared to a reversal of HKD 7,887,000 in 2019[196]. Shareholder and Stakeholder Engagement - The major shareholder, Guangdong Yuehai Holdings Group Co., Ltd., holds 383,820,000 shares, representing 71.34% of the total issued shares of 538,019,000[95]. - The company recognizes employees, customers, suppliers, and business partners as key stakeholders for its success and is dedicated to sustainable development through collaboration[157]. - Shareholders holding at least 5% of the total voting rights can request the board to convene a special general meeting within 21 days[152].

Financial Performance - The unaudited consolidated loss attributable to shareholders for the six months ended June 30, 2020, was HKD 9,631,000, a decrease of HKD 12,482,000 or 56.4% compared to HKD 22,113,000 for the same period last year [30]. - The consolidated revenue for the period was HKD 55,661,000, a decrease of HKD 46,430,000 or 45.5% from HKD 102,081,000 in the same period last year [36]. - Revenue for the six months ended June 30, 2020, was HKD 55,651,000, a decrease of 45.8% compared to HKD 102,081,000 in the same period of 2019 [70]. - Loss before tax was HKD 9,508,000, significantly reduced from HKD 22,083,000 in the prior year [70]. - Net loss for the period was HKD 9,631,000, compared to a net loss of HKD 22,113,000 in 2019, indicating a 56.4% improvement [70]. - Basic and diluted loss per share was HKD 1.79, an improvement from HKD 4.11 in the same period last year [70]. - Total comprehensive loss for the period was HKD 13,542,000, compared to HKD 23,117,000 in the same period of 2019, showing a 41.5% improvement [76]. Production and Sales - The total production of cowhide leather was 4,157,000 square feet, a decrease of 1,573,000 square feet or 27.5% from 5,730,000 square feet in the same period last year [32]. - The total sales volume of cowhide leather was 3,541,000 square feet, down 2,754,000 square feet or 43.7% compared to 6,295,000 square feet last year [32]. - The sales revenue of cowhide leather was HKD 45,780,000, down 53.2% from HKD 97,886,000 in the same period last year [36]. - The cost of goods sold for the six months ended June 30, 2020, was HKD 57,005,000, down from HKD 101,655,000 in 2019, indicating a reduction of approximately 44% [111]. Impact of COVID-19 - The production and sales activities were significantly impacted by the COVID-19 pandemic, leading to a substantial reduction in orders and production capacity [31]. - The company anticipates continued impact on its performance due to uncertainties arising from the COVID-19 pandemic [173]. - The company will closely monitor the developments related to COVID-19 and assess its financial and operational impacts [173]. Inventory and Assets - As of June 30, 2020, the group's consolidated inventory was HKD 88,247,000, an increase of HKD 9,317,000 or 11.8% compared to December 31, 2019 [40]. - Total assets as of June 30, 2020, were HKD 165,415,000, down from HKD 177,196,000 at the end of 2019 [79]. - Inventory increased to HKD 88,247,000 from HKD 78,930,000, indicating a rise of 11.7% [79]. Financial Position and Liabilities - The group's cash and cash equivalents amounted to HKD 26,690,000, a decrease of HKD 22,142,000 or 45.3% from December 31, 2019 [42]. - The interest-bearing loans totaled HKD 7,896,000 as of June 30, 2020, significantly reduced from HKD 145,531,000 on December 31, 2019, with a debt-to-equity ratio of 56.2% [43]. - The group had interest-bearing loans of HKD 143,357,000 as of June 30, 2020, compared to HKD 145,531,000 as of December 31, 2019 [129]. - The group's accounts payable as of June 30, 2020, totaled HKD 23,702,000, a decrease from HKD 33,621,000 as of December 31, 2019 [125]. Cost Control and Operational Strategy - The company focused on cost control measures, including administrative expense savings and receivables impairment reversals, to mitigate the impact of the pandemic [31]. - The group plans to focus on "stabilizing production, stabilizing operations, and reducing inventory" in the second half of 2020, amid ongoing economic challenges [53]. - The group aims to enhance research and development capabilities and cost control to improve product competitiveness and reduce inventory retention rates [53]. Governance and Compliance - The company has complied with the Corporate Governance Code as per the Listing Rules, with some exceptions related to the resignation of independent non-executive directors [187]. - The company failed to meet the requirements of the Listing Rules regarding the number and proportion of independent non-executive directors from June 19, 2020, to August 13, 2020 [188]. - The audit committee and the company's auditor, Ernst & Young, reviewed the unaudited interim financial information for the six months ending June 30, 2020 [194].

Financial Performance - The company reported a consolidated loss attributable to shareholders of HKD 38,994,000 for 2019, a 52.0% improvement compared to a loss of HKD 81,241,000 in 2018[8]. - Revenue for the year was HKD 178,020,000, representing a decline of 25.3% from HKD 238,317,000 in the previous year[6]. - The group's consolidated revenue for the year was HKD 178,020,000, a decrease of HKD 60,297,000 or 25.3% from HKD 238,317,000 in the previous year[22]. - The operating loss for the year was HKD 33,234,000, an improvement from a loss of HKD 75,062,000 in the previous year[75]. - The pre-tax loss decreased to HKD 38,928,000 from HKD 81,035,000 in 2018, indicating a reduction in financial distress[75]. - The total loss for the year was HKD 38,994,000, down from HKD 81,241,000 in 2018, reflecting a significant improvement in financial performance[75]. Sales and Production - The sales volume of cowhide leather decreased by 19.2% to 11,439 thousand square feet in 2019, down from 14,155 thousand square feet in 2018[6]. - The total production of cowhide leather for the year was 9,851,000 square feet, a decrease of 3,200,000 square feet or 24.5% from the previous year's production of 13,051,000 square feet[22]. - The total sales volume of cowhide leather was 11,439,000 square feet, down 2,716,000 square feet or 19.2% from 14,155,000 square feet in the previous year[22]. Inventory and Assets - Total inventory as of December 31, 2019, was HKD 78,930,000, down HKD 55,201,000 or 41.2% from HKD 134,131,000 on December 31, 2018[26]. - Total assets decreased to HKD 238,733,000 in 2019 from HKD 284,736,000 in 2018, representing a decline of approximately 16.1%[77]. - Current assets decreased to HKD 185,041,000 in 2019, down from HKD 226,220,000 in 2018, reflecting a decline of approximately 18.2%[77]. - Non-current assets fell to HKD 53,692,000 in 2019 from HKD 58,516,000 in 2018, a decrease of about 8.5%[77]. Financial Ratios - The company's current ratio improved to 3.01 times in 2019, up 5.6% from 2.85 times in 2018[6]. - The asset-liability ratio increased to 93.4% in 2019, up from 79.2% in 2018, indicating a higher level of financial leverage[6]. - The ratio of interest-bearing loans to equity as of December 31, 2019, was 90.2%, up from 70.7% on December 31, 2018[29]. Dividends - The company did not declare a final dividend for the year ended December 31, 2019[9]. - The company did not declare an interim dividend and the board did not recommend a final dividend for the year ended December 31, 2019[59]. - The company aims to provide stable and sustainable returns to shareholders, considering factors such as earnings performance and future prospects when deciding on dividends[60]. Market Conditions - The overall leather industry is expected to face severe challenges due to the impact of the COVID-19 pandemic, leading to a further decline in market demand[13]. - The outbreak of COVID-19 in early 2020 introduced uncertainties to the group's operating environment, but production resumed in late February 2020[39]. - The company is facing market risks due to changes in macroeconomic conditions and consumer behavior, impacting the leather industry[67]. Corporate Governance - The board of directors underwent changes, with new appointments and resignations noted, impacting governance structure[90]. - The company has adhered to the corporate governance code during the fiscal year, with the exception of the roles of chairman and CEO being held by the same individual for a period[124]. - The company appointed Mr. Kuang Hu as Chairman and Mr. Sun Jun as Managing Director effective September 3, 2019, ensuring clear delineation of responsibilities for independence and checks and balances[129]. - The board consists of seven members, including three independent non-executive directors, which aids in strict review and monitoring of management procedures[152]. Risk Management - The board has established a framework for internal controls and risk management, which is reviewed for effectiveness[155]. - The internal audit department conducts regular reviews to maintain a robust internal control system, focusing on high-risk areas based on a risk-based approach[179]. - The group has established an internal control system to mitigate risks and enhance operational efficiency, ensuring asset protection and compliance with relevant laws and regulations[175]. Audit and Compliance - The consolidated financial statements of Guangdong Leather Co., Ltd. reflect a true and fair view of the group's financial position as of December 31, 2019[196]. - The audit was conducted in accordance with the Hong Kong Standards on Auditing, ensuring compliance with professional ethical responsibilities[197]. - Key audit matters were identified based on professional judgment, highlighting the most significant issues during the audit of the consolidated financial statements[198].

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].