Financial Performance - The group's revenue for the year ended December 31, 2019, was approximately HKD 141,936,000, a slight decrease of about 2% compared to HKD 145,251,000 in 2018[10]. - The group recorded a loss attributable to the owners of the company of approximately HKD 55,038,000, compared to a loss of HKD 36,424,000 in 2018, with basic and diluted loss per share of HKD 0.1684[10]. - The core business recorded a loss of HKD 26,831,000 for the year ended December 31, 2019, compared to a loss of HKD 23,629,000 in 2018[20]. - Revenue from toy products slightly increased by approximately 0.5% to about HKD 128,203,000, accounting for about 90% of total revenue[21]. - Revenue from novelty and decorative products decreased by approximately 22% to about HKD 13,733,000, primarily due to reduced sales to European and American customers[22]. - Administrative expenses increased by approximately 50% to about HKD 81,303,000, mainly due to employee compensation related to the relocation of the production facility[23]. - Financial expenses rose to approximately HKD 2,197,000, up from HKD 124,000 in 2018, due to increased interest on bank loans and lease liabilities[24]. - As of December 31, 2019, the group had a debt-to-equity ratio of approximately 44%, compared to 6% in 2018[25]. - The net asset value per share as of December 31, 2019, was approximately HKD 0.37, down from HKD 0.48 in 2018[28]. - The top five customers accounted for approximately 95% of the total revenue, with the largest customer contributing about 82%[161]. - The top five suppliers represented about 43% of the total purchase value, with the largest supplier accounting for approximately 21%[161]. Corporate Governance - The company has adopted the corporate governance code as per the Hong Kong Stock Exchange's listing rules, ensuring compliance and transparency in its operations[44]. - The board of directors consists of six members, all experienced professionals in their respective fields, overseeing the company's long-term strategic goals and performance evaluation[48]. - The independent non-executive directors play a crucial role in providing oversight and ensuring the integrity of the company's financial reporting[49]. - The company emphasizes the importance of good corporate governance to maintain trust with employees, business partners, shareholders, and investors[44]. - The board has established service contracts for its directors, ensuring structured governance and accountability within the management team[35][38][40]. - The board regularly reviews the company's financial and operational performance, discussing future development plans to align with strategic objectives[46]. - The board consists of independent non-executive directors, making up at least 50% of the board members, ensuring high standards of financial reporting and governance[51]. - The board has established a memorandum outlining its authorization policy and the division of responsibilities between the board and management[82]. - The board has three committees: the Remuneration Committee, the Audit Committee, and the Nomination Committee, each with specific responsibilities[86]. - The company has established a nomination policy to ensure a balanced board in terms of skills, experience, and diversity[93]. - The board diversity policy was adopted on August 29, 2013, and aims to enhance board effectiveness through diverse perspectives[112]. - The company maintains a commitment to confidentiality regarding candidate information until the shareholder circular is issued[108]. Risk Management and Internal Control - The company has established and maintained an effective risk management and internal control system throughout the year[136]. - The internal control system complies with the COSO 2013 framework, which aims to achieve operational effectiveness, reliability of financial reporting, and compliance with applicable laws and regulations[139]. - The audit committee assessed the company's compliance with statutory and regulatory requirements, as well as the development of accounting standards and their impact on the company[131]. - The audit committee is responsible for reviewing the external auditor's work scope and effectiveness[127]. - The audit committee and board review the internal control and risk management systems at least annually, with no significant concerns or weaknesses identified for the year ending December 31, 2019[143]. - The company has adopted measures to ensure the authenticity, accuracy, completeness, and timeliness of its disclosures[140]. - The company has implemented green office measures to promote environmental sustainability[193]. - The company has complied with all relevant laws and regulations affecting its operations[194]. Shareholder Relations and Dividends - The board does not recommend the distribution of a final dividend for the years ended December 31, 2019, and 2018[16]. - No interim dividends were declared to shareholders during the year, and the board does not recommend a final dividend for the year ending December 31, 2019[160]. - The company recognizes the importance of maintaining good relationships with suppliers, customers, employees, and other stakeholders to achieve medium to long-term goals[158]. - The company maintained sufficient public float as of December 31, 2019[192]. Management and Operations - The company plans to acquire 100% equity of Kozhan JSC, which is primarily engaged in oil exploration and production in Kazakhstan[11]. - The company intends to acquire over 50% interest in Sozak Oil and Gas LLP, which is involved in oil and gas exploration in Kazakhstan[12]. - The board believes that the proposed acquisitions will help shift the company's focus towards natural gas and clean energy to meet the growing demand in China[13]. - The company has taken emergency measures to mitigate the impact of COVID-19, which has caused operational delays[15]. - The company has established an internal audit function, which is independent of daily operations and evaluates risk management and internal control systems through discussions and operational efficiency tests[142]. - The company has a share option plan as a reward for its directors and eligible employees[187]. - The company did not issue any shares during the year[166]. - The company did not purchase, sell, or redeem any of its listed securities during the year[185]. Employee and Director Information - The group employed approximately 680 full-time employees as of December 31, 2019, down from 860 in 2018[29]. - The remuneration policy for employees is determined by the board based on merit, qualifications, and capabilities[186]. - The remuneration committee held three meetings during the year to evaluate executive performance and recommend compensation structures[116]. - The performance-based portion of executive directors' compensation is a significant part of their total remuneration package[119]. - The company has purchased and maintained directors' liability insurance to provide adequate protection for its directors[199]. - The indemnity provisions for directors were effective throughout the review year and remain valid at the time of this report[200].
PERFECTECH INTL(00765) - 2019 - 年度财报