Financial Performance - The group's consolidated revenue increased by 16% to HKD 1,196,000,000 in 2018, compared to HKD 1,028,200,000 in 2017[16] - The original design manufacturing segment contributed 78% of the total revenue, with sales rising 20% from HKD 776,100,000 in 2017 to HKD 931,900,000 in 2018[17] - The distribution segment's revenue grew by 5% to HKD 264,100,000 in 2018, accounting for 22% of the group's total revenue[20] - The group recorded a significant reduction in losses, with a loss attributable to owners of HKD 38,300,000 in 2018, compared to a loss of HKD 674,500,000 in 2017[16] - Gross profit for 2018 was HKD 258,066 thousand, up 63.8% from HKD 157,513 thousand in 2017[167] - The company reported a loss before tax of HKD 25,031 thousand, significantly improved from a loss of HKD 657,539 thousand in the previous year[167] - The net loss for the year was HKD 34,586 thousand, compared to a net loss of HKD 668,947 thousand in 2017, indicating a substantial reduction in losses[167] - The total comprehensive income for the year was a loss of HKD 571,902 thousand, compared to a loss of HKD 668,947 thousand in the previous year, indicating a reduction in losses[180] Cash Flow and Liquidity - Cash outflow from operating activities was HKD 56,300,000 in 2018, compared to a cash inflow of HKD 46,100,000 in 2017[21] - The group's cash position decreased from HKD 291,700,000 at the end of 2017 to HKD 191,600,000 at the end of 2018[21] - Cash and cash equivalents at year-end were HKD 222,277 thousand, compared to HKD 210,464 thousand in 2017, showing a slight increase in cash reserves[169] - Current liabilities decreased to HKD 457,440 thousand from HKD 482,797 thousand in 2017, reflecting improved liquidity management[169] - The company reported a net cash inflow from financing activities of HKD 1,183 thousand, a recovery from a net outflow of HKD 411,083 thousand in 2017[182] Assets and Liabilities - Trade receivables increased by 23% to HKD 339,600,000, reflecting the rise in revenue during the period[24] - Inventory balance rose by 15% to HKD 182,600,000, as the company prepared for shipments before the Lunar New Year[24] - The total assets as of December 31, 2018, were HKD 1,542,744 thousand, down from HKD 1,659,411 thousand in 2017[169] - The company's equity attributable to owners was HKD 1,045,415 thousand, down from HKD 1,144,587 thousand in 2017[172] - The group reported non-current liabilities of HKD 12,000,000 as of December 31, 2018, compared to HKD 9,800,000 in the previous year[25] Market and Operational Strategy - The European market accounted for 54% of the group's revenue, with the US and Asia contributing 30% and 12% respectively[14] - The group plans to establish a new production facility and procurement office in Yingtan City, Jiangxi Province, in 2019 to reduce operational costs[30] - The group intends to operate the new production facility on a small scale initially, with plans to expand as sales demand grows[30] - The group faces challenges in the manufacturing environment due to ongoing U.S.-China trade negotiations and Brexit issues[30] Corporate Governance and Compliance - The company has adopted corporate governance principles in line with the Hong Kong Stock Exchange's requirements[92] - The board of directors consists of five members, including two executive directors and three independent non-executive directors, with full attendance at meetings[95] - The company has received annual confirmations regarding the independence of its independent non-executive directors[55] - The board is responsible for establishing corporate governance policies and reviewing compliance with legal and regulatory requirements[122] Shareholder Information - The company will not recommend a final dividend for the year ended December 31, 2018[33] - The company declared a special dividend of HKD 0.05 per share, with a total cash dividend payment of HKD 14,166,000 and the issuance of 2,613,374 new ordinary shares during the year[50] - The company aims to provide stable and sustainable returns to shareholders through a progressive dividend policy[118] - The board considers the group's financial performance, financial condition, investment needs, and future prospects when determining dividend recommendations[118] Risk Management - The company has implemented a risk management and internal control system to manage risks associated with achieving business objectives[127] - The audit committee regularly meets with executive directors to discuss internal controls and compliance matters[128] - The board conducted an annual review of the effectiveness of the risk management and internal control systems as of December 31, 2018[127] Accounting Standards and Financial Reporting - The company adopted the new Hong Kong Financial Reporting Standards (HKFRS) 9 and 15, which had no significant impact on the financial performance and position for the year ended December 31, 2018[187] - The cumulative impact of adopting HKFRS 15 on January 1, 2018, resulted in a reclassification of liabilities, with contract liabilities recognized at HKD 8,294,000 and refund liabilities at HKD 4,303,000[190] - The company must ensure that the financial statements are prepared in accordance with the Hong Kong Financial Reporting Standards and the Companies Ordinance[156] - The independent auditor's report confirmed that the consolidated financial statements reflect the company's financial position as of December 31, 2018, in accordance with Hong Kong Financial Reporting Standards[144]