Financial Performance - The total amount of loans provided increased by approximately 6%, from HKD 530.45 million as of December 31, 2017, to HKD 560.75 million as of December 31, 2018[13]. - The food business reported a revenue growth of approximately 26%, reaching HKD 124.66 million, compared to HKD 98.74 million in the previous year[14]. - The food business recorded a segment loss of approximately HKD 1.30 million for the year, compared to a segment profit of approximately HKD 0.8 million in the previous year[14]. - The group incurred a loss of approximately HKD 49.86 million from the sale of financial assets measured at fair value through profit or loss during the year[17]. - The dessert business segment recorded a loss of approximately HKD 19.19 million due to slowed progress in opening new stores and franchise operations[18]. - The wine trading business achieved revenue of approximately HKD 52.91 million and a segment profit of about HKD 3.04 million[20]. - The group's revenue for the year reached approximately HKD 184.83 million, an increase of about 66% compared to the previous year, driven by food business revenue of approximately HKD 124.66 million and new wine business revenue of approximately HKD 52.91 million[47]. - The group incurred a loss attributable to owners of approximately HKD 97.37 million, compared to a loss of approximately HKD 79.42 million in the previous year, primarily due to increased realized losses from financial assets and losses from joint ventures[48]. - The cost of goods sold for the year was approximately HKD 53.67 million, a 30% increase from HKD 41.36 million in the previous year, with wine trading sales cost accounting for approximately 92% of its revenue[49]. - Employee benefits expenses increased to approximately HKD 45.58 million, up from HKD 35.80 million in the previous year, due to hiring for the wine trading business and new franchise stores[49]. Market and Economic Conditions - The Hang Seng Index closed at 25,845 points at the end of December 2018, down from 29,919 points at the end of December 2017[17]. - The average daily trading amount for the main board and GEM increased by approximately 22%, from HKD 880 billion in the previous year to HKD 1,070 billion[17]. - The total retail sales value in Hong Kong increased from approximately HKD 446.1 billion in 2017 to about HKD 485.2 billion in 2018, representing a growth of around 9%[19]. - The total import value of wine in Hong Kong reached HKD 11.9 billion in 2018, with Australia becoming the second-largest wine supplier, accounting for 17% of total import value[19]. - Economic uncertainty may lead consumers to adopt a more conservative purchasing attitude, potentially affecting the group's performance in the high-end liquor market[89]. Business Strategy and Operations - The board aims to seek new investment opportunities to diversify the business portfolio and expand revenue sources, enhancing operational and financial performance[23]. - The company plans to establish long-term partnerships with multiple potential suppliers to gain cost advantages and expand its product portfolio[22]. - The wine trading business is expected to benefit from synergies with the existing distribution and restaurant operations[22]. - The group plans to enhance its wine trading sales capabilities and seek acquisition opportunities to expand its customer base and improve performance[51]. - The group plans to expand its restaurant network in China through local business partners due to rising operational costs[40]. - The group will continue to monitor and review the performance of its specialty stores and close underperforming locations[51]. - The company operates primarily in the food and beverage sector, with additional activities in food production, sales, and distribution to Hong Kong supermarkets[68]. - Over 90% of the group's revenue from the food business comes from specialty stores in Hong Kong's chain supermarkets[79]. - The group operates more than 80 specialty stores in Hong Kong's chain supermarkets as of December 31, 2018[79]. Shareholder and Governance Matters - The company acknowledges the support of shareholders and the contributions of directors and staff during the year[24]. - As of December 31, 2018, the company's equity attributable to owners was approximately HKD 348,995,000, a decrease from HKD 442,085,000 in 2017, representing a decline of about 21%[54]. - The cash and bank balances as of December 31, 2018, were approximately HKD 7,222,000, a significant decrease of approximately 81% from HKD 37,127,000 in 2017[56]. - The company raised approximately HKD 18 million from a rights issue, which has been fully utilized for its intended purposes as of December 31, 2018[57]. - The debt-to-equity ratio as of December 31, 2018, was approximately 21%, indicating the proportion of debt used in the company's capital structure[60]. - The company had no significant investments, acquisitions, or disposals of subsidiaries or associates during the year, maintaining a focus on existing operations[62]. - There were no interim dividends declared or paid during the year, consistent with the previous year[71]. - The board did not recommend the payment of a final dividend for the year, maintaining a conservative approach to capital distribution[73]. - The company has a dividend policy that allows for annual dividends not exceeding 20% of the consolidated annual net profit attributable to shareholders, excluding special items[183]. Risk Management and Compliance - The group faces significant credit risk in its lending business, as customers may default on loan repayments, potentially impacting financial performance[76]. - The value of securities used as collateral for loans may decline, increasing the risk of not recovering loans and negatively affecting profitability[77]. - The group is heavily reliant on the recognition of the "Lucky Dessert" trademark, and any damage to its reputation could significantly impact business performance[83]. - The group operates in a highly competitive dessert shop market, where pricing and quality are critical for maintaining business performance[84]. - The company has not established any agreements or instruments to hedge against foreign exchange risks, which may impact financial performance due to currency fluctuations[61]. - The company has a structured approach to ensure compliance with relevant laws and regulations, enhancing corporate governance awareness among directors[157]. - The audit committee reviewed the financial reports and compliance procedures, ensuring adherence to applicable accounting standards and GEM listing rules[139]. - The company has fully complied with the corporate governance code applicable to GEM listing rules during the year[143]. - The board is responsible for the risk management and internal control systems, which are designed to manage risks rather than eliminate them[174]. - The audit committee assists the board in overseeing the risk management and internal control systems, submitting annual reports for review[176]. Audit and Financial Reporting - The independent auditor's report confirms that the consolidated financial statements fairly reflect the group's financial position as of December 31, 2018[191]. - Key audit matters identified include the impairment assessment of receivables and interests, which requires significant judgment and complexity[195]. - The audit procedures include evaluating the reasonableness of management's assumptions and methods used in the impairment testing[198]. - The audit team has discussed potential impairment indicators with management and assessed the impairment tests when such indicators are identified[198]. - The audit team compared key input data with third-party sources to evaluate the valuation methods used[198]. - The financial statements disclose the credit risk exposure faced by the group[196]. Corporate Structure and Management - The board consists of five members, including two executive directors and three independent non-executive directors, ensuring a balance of power and independence[144]. - The company has adopted a board diversity policy to enhance effectiveness by considering various factors such as gender, age, and professional experience[152]. - The roles of the chairman and CEO are clearly separated to ensure independence and accountability[145]. - The company has established a procedure for directors to seek independent professional advice at the company's expense when necessary[157]. - The company emphasizes the importance of gender, age, cultural background, and professional qualifications in the selection of board members[156]. - The remuneration committee held 5 meetings during the year to review compensation policies and determine annual remuneration for directors and senior management[164].
百利达集团控股(08179) - 2018 - 年度财报