Financial Performance - The company's revenue decreased by 87.6% to HKD 6,000,000 in 2018, down from HKD 48,800,000 in 2017[9] - The loss attributable to shareholders for the year was HKD 34,100,000, compared to a loss of HKD 17,900,000 in the previous year[9] - Revenue from the sale of lottery terminals and components decreased by 89.4% to HKD 5,100,000, down from HKD 47,800,000 in 2017[18] - Revenue from the distribution of lottery products and solutions was HKD 400,000, a decrease of 60.4% from HKD 1,000,000 in 2017[19] - The company recorded a loss of HKD 34,800,000 for the year, compared to a loss of HKD 18,600,000 in 2017, primarily due to a 89.4% decrease in sales of lottery terminals and components in the mainland China market[22] Cash and Investments - Cash and bank balances as of December 31, 2018, amounted to HKD 198,200,000, with no debt[9] - The company’s cash and bank balances as of December 31, 2018, were HKD 198,200,000, a decrease of HKD 9,900,000 from HKD 208,100,000 in 2017[36] - The decrease in cash and bank balances was primarily due to investments in associates and equity investments of HKD 23,400,000 and property, machinery, and equipment purchases of approximately HKD 6,500,000[36] - The company invested HKD 10,000,000 in the NetGame fund, which focuses on high-quality technology companies with growth potential[23] - As of December 31, 2018, the total fair value of the equity investment in NetGame was HKD 10,100,000, with no impairment identified[24] Business Strategy and Operations - The company aims to seek investment opportunities to diversify its existing business and maximize long-term shareholder value[10] - The company plans to restructure its operations to adapt to the changing regulatory environment in the lottery market[15] - The company is focusing on enhancing competitiveness through advanced technology and applications, particularly in the lottery and online gaming sectors[10] - The newly introduced mobile gaming agency business generated revenue of HKD 600,000 since its launch at the end of August 2018, contributing 9.5% to total revenue[20] - The group is exploring new business models in the lottery terminal market and online gaming operations, aiming for diversification[39] Corporate Governance - The board emphasized the importance of corporate governance, ensuring compliance with all relevant regulations and maintaining high standards[66] - The management team is committed to providing quarterly updates to the board, ensuring transparency and informed decision-making[66] - The board of directors consists of three independent non-executive directors, accounting for over one-third of the board members[73] - The company has adopted a diversity policy for board members, considering factors such as age, gender, cultural background, and professional experience[80] - The company has established three board committees: Audit Committee, Remuneration Committee, and Nomination Committee, each with defined responsibilities and sufficient resources[95] Risk Management - The board is committed to maintaining a robust internal control and risk management system to protect shareholder investments and the company's assets[115] - The risk management policy provides a framework for identifying and assessing significant business, operational, financial, and compliance risks[117] - The internal control system aims to safeguard assets from misappropriation and unauthorized disposal, with regular reviews conducted to ensure effectiveness[118] - The company has established a comprehensive financial reporting process to provide balanced and clear assessments of the group's performance and outlook[112] - The audit committee reviewed and supervised the financial reporting procedures and risk management systems of the group[115] Supplier and Customer Relationships - The largest supplier, Wusheng Computer Technology (Shanghai) Co., Ltd., accounted for 53% of the group's total purchases, while the largest customer, Interdata, represented 84% of total revenue, indicating a significant reliance on key customers and suppliers[138] - The group has a long-term relationship with Wusheng and Interdata, benefiting from close cooperation since 2008, ensuring consistent service quality for customers[143] - The procurement agreement with Wusheng is non-exclusive, allowing the group to source approved lottery selling machines from other suppliers if necessary[144] - To reduce reliance on Wusheng, the group plans to procure some approved lottery selling machines from other suppliers if competitive terms and product quality can be compared favorably[145] - The group recognizes the risk of reliance on Interdata and has implemented risk management policies to assess and mitigate related risks[149] Shareholder Information - The company aims to balance shareholder expectations and prudent capital management through a sustainable dividend policy, considering various factors including financial performance and future expansion plans[131] - The distributable reserves as of December 31, 2018, were approximately HKD 335,729,000, compared to HKD 347,937,000 in 2017[167] - The total issued shares of the company as of December 31, 2018, were 3,145,935,836 shares[179] - The company has no changes in its issued share capital during the year[165] - The company has received annual confirmations regarding the independence of its independent non-executive directors[171] Director and Executive Compensation - The total remuneration for directors in 2018 was approximately HKD 11.6 million, including non-cash payments of HKD 6.9 million in shares[47] - The company has not entered into any significant transactions with directors or related entities during the year[176] - The independent non-executive directors have reviewed the related party transactions and confirmed they were conducted on normal commercial terms[198] - The company has appropriate insurance arrangements for potential legal actions faced by its directors and officers, with no claims made under the policy in 2018[90] - The company encourages all directors to participate in continuous professional development to enhance their knowledge and skills[89]
加幂科技(08198) - 2018 - 年度财报