Company Overview - As of December 31, 2018, Perennial International Limited employed 930 staff worldwide, focusing on management, sales, marketing, shipping, procurement, financial accounting, engineering, production, and manufacturing[15]. - The company primarily manufactures and trades quality power cords, power cord sets, cables, solid wire, wire harnesses, and plastic resins, targeting markets in America, Europe, Australia, Mainland China, Japan, and Southeast Asia[15]. - The group was founded in 1989 and has established a reputation for quality among prominent multinational producers of electrical and electronic products[15]. - The registered office is located in Bermuda, while the principal place of business is in Hong Kong[8]. - The stock code for Perennial International Limited on the Hong Kong Stock Exchange is 00725[8]. Financial Performance - The Group's revenue decreased by 2.4% to HK$355,744,000 in 2018 compared to HK$364,401,000 in 2017[16]. - The net loss for the year was HK$1,760,000, resulting in a loss per share of HK$0.009, compared to a profit of HK$19,283,000 and earnings per share of HK$0.097 in 2017[16]. - The gross margin decreased from 22.6% in 2017 to 15.8% in 2018, primarily due to price competition and increased raw material costs[16]. - The Group recorded a negative net profit margin of 0.5% in 2018, down from a positive net profit margin of 5.3% in 2017[17]. - As of December 31, 2018, the Group's consolidated short-term indebtedness was approximately HK$61,534,000, with bank balances and cash amounting to approximately HK$49,996,000[31]. - The Group's trade and bill receivables balance was approximately HK$90,330,000, representing 25.4% of the annual revenue of approximately HK$355,744,000[32]. - The gearing ratio as of December 31, 2018, was 10.6%, an increase from 6.7% in 2017[32]. - The consolidated shareholders' equity increased by 2.8% to approximately HK$578,085,000 as of December 31, 2018[33]. - The capital expenditure for the year was approximately HK$46,155,000[38]. - The interest cover ratio decreased to 1.6 times in 2018 from 26.5 times in 2017[32]. - The debt to equity ratio was approximately 26.8% as of December 31, 2018[33]. Operations and Manufacturing - Phase I construction of the factory in Quang Ngai, Vietnam, was substantially completed by the end of 2018, with Phase II expected to be completed in March 2019[19]. - The Group is considering Phase III construction in Vietnam, which may involve cable manufacturing, while exercising caution in overseas investments[21]. - Customer feedback regarding the manufacturing facilities in Vietnam has been very encouraging, particularly from price-sensitive customers[21]. - The Group is actively working to reduce operational costs in response to the impact of the additional 10% tariff imposed by the United States on Chinese products[18]. Corporate Governance - The audit committee is chaired by Lau Chun Kay, with other members including Lee Chung Nai and Koo Di An[6]. - The Group has established various committees to enhance corporate governance standards[25]. - The company emphasizes transparency, independence, accountability, responsibility, and fairness in corporate governance[175]. - The company has fully complied with the Corporate Governance Code provisions set out in the Listing Rules[177]. - The Board consists of eight members and held four meetings during the year ended December 31, 2018[183]. - The Audit Committee was established on April 1, 2003, and currently consists of three Independent Non-Executive Directors and one Non-Executive Director[200]. - The Audit Committee is responsible for reviewing the Group's financial and accounting policies, making recommendations regarding external auditors, and discussing interim financial reports and annual consolidated financial statements[200]. Environmental Responsibility - The company emphasizes compliance with environmental regulations, including the Environmental Protection Law of Mainland China, to meet stakeholder expectations[69]. - The Group has established "Environmental Procedures" to guide energy resource usage, waste disposal, and pollution prevention, clearly defining personnel responsibilities[69]. - The Group is dedicated to energy conservation and waste management, recognizing the importance of these issues in its production processes[58]. - Total energy consumption decreased from 8,512 MWh in 2017 to 8,262 MWh in 2018, representing a reduction of approximately 2.9%[77]. - Direct energy consumption also declined from 681 MWh in 2017 to 653 MWh in 2018, a decrease of about 4.1%[77]. - Greenhouse gas (GHG) emissions reduced from 5,460 tCO2e in 2017 to 5,277 tCO2e in 2018, reflecting a decrease of approximately 3.3%[78]. - Solid waste generated in 2018 included 31.0 tonnes of waste paper, down from 41.7 tonnes in 2017, a reduction of about 25.5%[82]. - The company saved approximately 8,340 kWh per year by utilizing solar energy at the Heyuan plant[73]. - The company has joined the Shenzhen carbon emission trading market, subjecting its carbon emission data to audit[71]. Employee Relations and Safety - The company considers its employees to be its most important asset, with key values of quality, prudence, and integrity[15]. - The company focuses on building good employment relationships to aid in recruiting and retaining talent, linking business development plans closely to staff management[63]. - The number of working days lost due to work-related injuries increased to 422 days in 2018 from 188.5 days in 2017, reflecting a rise of approximately 124.5%[104]. - The company has not recorded any work-related deaths during the reporting year, maintaining a focus on employee safety[104]. - The company conducts regular safety training and assessments to enhance workplace safety and compliance with relevant regulations[98]. - Average training hours for male employees increased to 32.0 hours in 2018 from 29.2 hours in 2017, while female employees saw an increase to 34.2 hours from 30.4 hours[117]. - Approximately 78% of male and female staff received training[167]. Customer Relations - The company conducts customer satisfaction surveys and regular communication to maintain strong customer relationships, which contribute to stable income streams[66]. - The Group received a total of 12 customer complaints regarding product appearance in the reporting year, an increase from 9 in 2017, all of which were handled according to established procedures[130][134]. - The Group's quality control department must contact customers within 24 hours of receiving complaints and resolve issues within 7 working days[130][134]. Supplier Management - The number of suppliers increased significantly from 166 in 2017 to 263 in 2018, with 68 suppliers in Hong Kong, 180 in Mainland China, and 15 overseas[145]. - The Group has implemented the ISO 14001 environmental management system to ensure suppliers meet environmental performance standards[139]. - The Group requires suppliers to provide environmentally-friendly products and properly handle all types of waste produced during production[140]. - The Group conducts monthly assessments of existing suppliers and can disqualify those with poor performance[137]. - The Group aims to extend environmental protection responsibilities to its supply chain through stringent procurement procedures[139].
恒都集团(00725) - 2018 - 年度财报