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].
南粤控股(01058) - 2020 - 年度财报