Financial Performance - The group recorded a total revenue of approximately HKD 104 million for the year ended December 31, 2020, a decrease of 21.3% compared to HKD 132 million for the year ended December 31, 2019[12]. - The net loss attributable to owners of the company was approximately HKD 5.1 million, a decline of 167.7% compared to a profit of HKD 7.6 million for the previous year[12]. - The group expresses gratitude to its management team, employees, shareholders, and business partners for their continued support during challenging times[14]. - The group's customer contact center services and system solutions faced a decline in demand due to business activity slowdown and decision delays, leading to lower profit margins in some service segments[17]. - The overall gross margin declined from approximately 16.7% for the year ended December 31, 2019, to approximately 4.6% for the year ended December 31, 2020[46]. - The gross margin for financial services dropped from approximately 33.4% to approximately (17.8%), primarily due to increased expected credit losses of approximately HKD 11,000,000[53]. - Expected credit losses increased significantly from approximately HKD 500,000 for the year ended December 31, 2019, to approximately HKD 13,100,000 for the year ended December 31, 2020[33]. - The company reported a loss attributable to owners of approximately HKD 5,100,000 for the year ended December 31, 2020, compared to a profit of approximately HKD 7,600,000 for the year ended December 31, 2019, primarily due to the impact of COVID-19 on revenue and gross margin[33]. - Total revenue decreased by approximately HKD 28,100,000, from approximately HKD 132,300,000 for the year ended December 31, 2019, to approximately HKD 104,200,000 for the year ended December 31, 2020[35]. Business Strategy and Operations - The company plans to focus on core business areas, including contact center services and system solutions, while exploring potential investments or acquisitions in the financial sector[13]. - The operational performance of the customer contact center remained largely unaffected during the year, ensuring continuity in customer service[13]. - The company has initiated several potential new initiatives to enhance its capabilities in the financial sector despite delays caused by the pandemic[13]. - The group aims to expand its securities business opportunities, particularly focusing on the establishment and distribution of stock funds in the retail and institutional sectors[28]. - The group plans to further expand its business in the Greater Bay Area, leveraging local experience and market understanding to attract investors[29]. - The group is exploring the development of virtual asset services, recognizing significant potential in Hong Kong's virtual asset market[29]. - The company will maintain a cautious approach due to the uncertain local business environment while focusing on core business and exploring new opportunities[29]. Economic Context - The Hong Kong economy contracted by 6.1% in 2020, marking the highest annual decline in history, with a 9.0% year-on-year contraction in the first half of the year due to the COVID-19 pandemic[16]. - The future recovery of the economy is expected to depend on the effectiveness of government measures against the virus and vaccination efforts[28]. - The company acknowledges the ongoing adverse market conditions and their potential impact on future business operations[13]. Corporate Governance - The company has maintained compliance with all corporate governance codes as of December 31, 2020, except for one specific provision[77]. - The board consists of two executive directors, one non-executive director, and three independent non-executive directors, ensuring a balanced structure[79]. - The company has a strong commitment to transparency and accountability, continuously improving corporate governance practices[77]. - The management team is responsible for daily operations, with significant decisions requiring board approval[82]. - The company has adopted a code of conduct for securities trading, ensuring all directors complied with the regulations during the reporting period[78]. - The company emphasizes the importance of training for newly appointed directors to understand their responsibilities and the company's operations[83]. - The company has a diverse management team with extensive experience in various sectors, contributing to its strategic goals[74]. - The company is committed to reviewing and enhancing its governance practices in line with international best practices[77]. - The board is responsible for setting corporate and strategic objectives, monitoring operational activities, and ensuring financial performance[81]. - The board held six meetings during the year ending December 31, 2020, with attendance rates for executive directors ranging from 4/6 to 6/6[86]. - The nomination committee conducted two meetings in the year, with full attendance from all members[100]. - The company has established a diversity policy for the board, considering factors such as gender, age, and professional experience[104]. - The independent non-executive directors' independence was reviewed as part of the nomination committee's responsibilities[101]. - The roles of the chairman and CEO are separated to ensure a balance of power and authority within the company[91]. - The company has a three-year service contract for all directors, with the latest contracts starting from December 21, 2020[93]. - The company has implemented a procedure for directors to seek independent professional advice when necessary[87]. - The company has arranged appropriate liability insurance for directors and senior officers[88]. - The board's structure and composition are regularly reviewed to ensure it meets the company's needs[97]. - The company encourages active participation from all directors in board meetings to reflect a consensus in decision-making[91]. - The company confirmed its responsibility for preparing financial statements in accordance with statutory requirements and applicable accounting standards[109]. - The audit committee held four meetings during the year, reviewing the effectiveness of the internal control and risk management systems[119]. - The remuneration committee reviewed the compensation packages of executive directors and independent non-executive directors, providing recommendations for approval[115]. - The company paid approximately HKD 1,000,000 for audit services to its auditor, a decrease from HKD 1,100,000 in the previous year[126]. - The risk management and internal control committee conducted two meetings, assessing credit risk, liquidity risk, and business risk[123]. - The company established an internal control department to oversee and review the effectiveness of its internal control systems[127]. - The board of directors is responsible for developing and reviewing corporate governance policies and practices[128]. - The company ensured that all directors received monthly updates on performance, condition, and prospects[110]. - The audit committee recommended the reappointment of the external auditor for the upcoming annual general meeting[126]. - The company confirmed that there were no significant uncertainties regarding its ability to continue as a going concern[109]. - The board of directors has established various committees, including the Audit Committee, Remuneration Committee, Nomination Committee, and Risk Management and Internal Control Committee, to effectively oversee the company's operations[129]. - The company secretary, Mr. Sun Fook Hoi, has completed over 15 hours of professional training to update his skills and knowledge in accordance with GEM listing rules[132]. - The company has not made any changes to its Articles of Association during the review year[133]. - Shareholders holding at least 10% of the paid-up capital have the right to request a special general meeting within two months of their request[134]. - The company emphasizes the importance of clear and timely communication with shareholders and investors, utilizing multiple channels including annual general meetings and reports[138]. Environmental, Social, and Governance (ESG) Initiatives - The company has established an Environmental, Social, and Governance (ESG) Committee to implement sustainability measures across its departments[141]. - The company has committed to reducing its environmental impact through energy-saving, waste reduction, and recycling initiatives[142]. - No significant environmental law violations were reported during the year, ensuring compliance with relevant regulations[142]. - The primary source of air emissions for the company is from fuel consumption of its vehicles, which is limited in nature[145]. - Total nitrogen oxides emissions from fuel consumption in 2020 amounted to 3,889 grams[146]. - Total greenhouse gas emissions from fuel consumption included 6,745 grams of CO2, 21 grams of methane, and 1,376 grams of nitrous oxide, totaling 8,143 kilograms[146]. - CO2 emissions from purchased electricity decreased by approximately 1.5% from about 423,846 kilograms in 2019 to approximately 417,405 kilograms in 2020[146]. - Paper usage in 2020 was approximately 1,193 kilograms, a reduction of about 36.9% compared to 1,890 kilograms in 2019[151]. - Total energy consumption in 2020 was 417,405 kilowatt-hours, a decrease of about 38% from approximately 672,772 kilowatt-hours in 2019[157]. - Water consumption in 2020 was 3,363 cubic meters, a reduction of about 4.8% from 3,531 cubic meters in 2019[158]. - The company recycled 1,445 kilograms of paper in 2020, equivalent to planting 37 saplings, which was less than the 1,834 kilograms recycled in 2019[153]. - The company implemented various measures to reduce energy consumption, including using energy-efficient LED lighting and automatic timers for equipment[157]. - The company has no significant production or consumption of packaging materials in 2020 due to its business nature[159]. - The company did not record any significant indirect emissions from air travel in 2020[147]. Employee Welfare and Development - As of December 31, 2020, the company had a total of 321 employees in Hong Kong, with a gender distribution of 56% female and 44% male[169]. - The company reported three work-related injury cases during the reporting period, resulting in a total of 6 lost workdays[175]. - The average training hours for male employees in 2020 was 3.0 hours, compared to 2.78 hours in 2019, indicating an increase in training[192]. - The company has implemented various health and safety measures during the COVID-19 pandemic, including increased cleaning frequency and mandatory mask-wearing for all employees[178]. - The company offers a range of employee benefits, including paid leave, medical coverage, and training subsidies, to attract and retain talent[165]. - The management conducts annual reviews of the compensation policy to ensure competitiveness and effectiveness[165]. - The company emphasizes a diverse workforce and has policies in place to prevent discrimination based on various factors, including gender and age[169]. - The average training hours for female employees in 2020 was 4.0 hours, compared to 3.55 hours in 2019, showing a positive trend in employee development[184]. - The company organizes various internal and external training programs to enhance employee skills and market competitiveness[179]. - The management is committed to maintaining a clean and pleasant work environment, organizing health-promoting activities for employees[165]. - The group strictly prohibits any form of child labor and forced labor, ensuring compliance with local labor laws and regulations[194]. - The group has established clear procurement guidelines to manage the entire procurement process, including maintaining an updated list of approved suppliers[195]. - The group has been ISO 9001:2015 certified since 1997 for its design and provision of telemarketing and 24-hour customer service hotline, emphasizing quality control and process management[197]. - There were no product recalls during the reporting period due to health or safety reasons, and no significant complaints were reported that impacted the group[199].
易通讯集团(08031) - 2020 - 年度财报