Financial Performance - For the year ended December 31, 2019, the Group recorded total revenue of approximately HK$40,073,000, a decrease of approximately HK$13,895,000 or 25.7% compared to HK$53,968,000 in 2018[16] - Interest income from the Money Lending Business increased significantly to approximately HK$17,040,000, up from approximately HK$13,473,000 in 2018[16] - Revenue from the Software Platform Business was approximately HK$20,107,000, compared to approximately HK$18,603,000 in 2018, indicating positive growth[16] - The decline in total revenue was partially offset by growth in the Money Lending and Software Platform segments[16] - The Group's performance in the Mobile Games and Applications Business saw a decrease in segment revenue, contributing to the overall revenue decline[16] - The loss attributable to owners of the Company increased by approximately 57.7% to approximately HK$61,470,000, compared to approximately HK$38,967,000 in 2018, mainly due to decreased revenue in the Mobile Games and Applications Business and an impairment loss of approximately HK$44,975,000 related to goodwill[25] - Revenue from the Mobile Games and Applications Business decreased by approximately HK$18,966,000 from approximately HK$21,892,000 in 2018 to approximately HK$2,926,000 in 2019[39] - The Money Lending Business generated an increment of approximately 26.5% in segment revenue, contributing approximately 42.5% to the Group's total revenue for the year ended December 31, 2019[41] Cost and Profitability - The cost of sales for the Group amounted to approximately HK$4,598,000, down from approximately HK$9,124,000 in 2018[17] - Gross profit decreased by approximately 20.9% to approximately HK$35,475,000, while maintaining a high gross profit margin of approximately 88.5%[18] - The Group's gross profit decreased by approximately 20.9% to approximately HK$35,475,000 for the year ended December 31, 2019, while maintaining a high gross profit margin of approximately 88.5%[21] - Administrative and other operating expenses amounted to approximately HK$58,275,000, a slight decrease from approximately HK$59,208,000 in 2018, primarily due to a minor reduction in research and development expenses[23] Assets and Liabilities - The Group's cash and cash equivalents as of December 31, 2019, were approximately HK$9,610,000, down from approximately HK$14,948,000 in 2018[52] - The total assets of the Group were approximately HK$260,698,000 as of December 31, 2019, compared to approximately HK$324,784,000 in 2018, indicating a decrease in total assets[53] - The Group's gearing ratio increased to approximately 22.2% as of December 31, 2019, up from approximately 16.7% in 2018[53] - The Group's outstanding loans receivable, net of provisions, decreased to approximately HK$106,045,000 as of December 31, 2019, from approximately HK$108,519,000 in 2018[50] - The Group's provision for loan losses increased to approximately HK$4,520,000 as of December 31, 2019, compared to approximately HK$80,000 in 2018[50] - The loss allowance related to loans receivable increased to approximately HK$4,520,000 as of December 31, 2019, compared to approximately HK$80,000 in 2018[46] Corporate Governance - The Company is committed to high standards of corporate governance, emphasizing integrity, transparency, and accountability to maximize shareholder returns[76][82] - The Company complied with most provisions of the Corporate Governance Code, with exceptions explained in the report[77][83] - The Board comprises seven directors, including three executive directors and three independent non-executive directors, ensuring a balanced composition for independent judgment[79][80] - The Company plans to appoint a new Chairman when deemed appropriate, following the resignation of the previous deputy chairman[95] - The roles of Chairman and CEO are currently separated, with the CEO responsible for day-to-day management[92][93] - The Company has established clear written terms of reference for each committee, available on its website and GEM website[107] - The Company emphasizes meritocracy in Board appointments while considering diversity benefits[138] Risk Management - The Group will continue to adopt a prudent credit policy and risk management approach to mitigate potential bad debts and losses in the Money Lending Business[47] - The Board is responsible for evaluating risks associated with achieving strategic objectives and ensuring effective risk management systems[161] - The internal control system was reviewed annually, covering financial, operational, and compliance controls, with no major issues identified for the year ended December 31, 2019[162] Future Strategies - The Company continues to focus on developing and marketing patented technologies and software solutions to enhance revenue streams[16] - Future strategies may include further expansion in the Money Lending and Software Platform sectors to drive growth[16] - The Group plans to utilize approximately HK$1,458,000 of unutilized proceeds from a previous placing for investments in environmental-related projects in the coming year[60] Employee and Board Composition - As of December 31, 2019, the Group had 58 employees, a decrease from 66 employees in 2018, with total staff costs approximately HK$18,570,000, down from HK$21,238,000 in 2018[72][74] - The biographies of executive directors highlight extensive experience in finance, accounting, and corporate governance[188][190][191] - The company has a strong focus on R&D in software system design, led by Mr. Zheng, who has over 18 years of experience in software engineering[195] - The board comprises members with diverse backgrounds in finance, accounting, and technology, enhancing strategic decision-making capabilities[194] Audit and Compliance - The Audit Committee is responsible for recommending the appointment and removal of external auditors and ensuring the accuracy of financial statements[142] - The Audit Committee reviewed quarterly, interim, and annual results, ensuring compliance with accounting standards and GEM Listing Rules[152] - External auditor remuneration for audit services was HK$868,000 and for non-audit services was HK$45,000 for the year ended December 31, 2019[160] - Related party transactions were periodically reviewed and approved by the Audit Committee during the year[176]
悟喜生活(08148) - 2019 - 年度财报