Financial Performance - For the year ended December 31, 2020, the Group's revenue was approximately HK$139.34 million, a decrease of approximately 29.64% compared to 2019 due to the COVID-19 pandemic[17]. - The decline in revenue was primarily due to the COVID-19 pandemic, which led to quarantine, lockdown, and travel restrictions, resulting in weak demand and decreased sales in major markets[34]. - The Group's revenue decreased by approximately HK$58.71 million or approximately 29.64% from approximately HK$198.05 million for the year ended 31 December 2019 to approximately HK$139.34 million for the year ended 31 December 2020[45]. - Gross profit decreased by approximately HK$17.17 million or approximately 34.13% from approximately HK$50.31 million for the year ended 31 December 2019 to approximately HK$33.14 million for the year ended 31 December 2020[47]. - Loss before taxation increased by approximately HK$26.19 million for the year ended 31 December 2020 compared to a loss before taxation of approximately HK$13.87 million for the year ended 31 December 2019[56]. - The Group recorded a loss for the year of approximately HK$26.21 million for the year ended 31 December 2020 compared to approximately HK$14.55 million for the year ended 31 December 2019[58]. Market Outlook - The pandemic led to weak demand and decreased sales in major markets, but demand is expected to gradually increase with vaccine availability in January 2021[17]. - The HKTDC Export Index rose from 18.8 in 4Q19 to 36.2 in 4Q20, indicating improved exporter sentiment but remaining below the neutral mark of 50[18]. - The timepieces sector's index improved from 15.5 in 4Q19 to 33.5 in 4Q20, reflecting a broad economic recovery across major industry sectors[19]. - Mainland China and ASEAN markets showed the most positive short-term outlook, with 48.4% and 47.2% of interviewees respectively expressing optimism[19]. - Despite improvements, the overall export index remains below the watershed mark of 50, indicating ongoing uncertainties in the short-term export outlook[39]. - The Group anticipates gradual growth in 2021, contingent on global economic performance and control of the COVID-19 situation[27]. Cost Management - The cost of sales decreased by approximately HK$41.55 million or 28.12% from approximately HK$147.74 million for the year ended 31 December 2019 to approximately HK$106.19 million for the year ended 31 December 2020[46]. - Selling and distribution expenses decreased by approximately HK$0.99 million or approximately 18.54% from approximately HK$5.34 million for the year ended 31 December 2019 to approximately HK$4.35 million for the year ended 31 December 2020[48]. - Administrative expenses decreased by approximately HK$6.12 million or approximately 11.34% from approximately HK$53.96 million for the year ended 31 December 2019 to approximately HK$47.84 million for the year ended 31 December 2020[54]. - Finance costs increased by approximately HK$1.01 million or approximately 25.31% from approximately HK$3.99 million for the year ended 31 December 2019 to approximately HK$5.00 million for the year ended 31 December 2020[55]. Cash and Assets - As of 31 December 2020, the Group had cash and cash equivalents of approximately HK$17.85 million, down from HK$22.19 million in 2019[70]. - The gearing ratio of the Group calculated by total borrowings as a percentage of total equity was approximately 160% as of 31 December 2020, up from 89% in 2019[71]. - As of December 31, 2020, the Group had total assets pledged to banks amounting to HK$131.71 million[79]. Corporate Governance - The Company has complied with the Corporate Governance Code provisions during the year ended December 31, 2020, with specified deviations explained[122]. - The Board consists of six Directors, including two Executive Directors and four Independent Non-executive Directors as of the date of the annual report[139]. - The roles of chairman and chief executive officer are held by Mr. Cheuk Sin Cheong Clement, which the Board believes strengthens leadership and allows for efficient business planning[129]. - The Company has adopted a Board Diversity Policy to achieve diversity through various factors, including gender, age, and professional experience[145]. - The Company has complied with GEM Listing Rules by appointing at least three Independent Non-executive Directors, with one possessing relevant professional qualifications[157]. Employee Management - The number of employees decreased from 166 in 2019 to 112 in 2020, primarily due to outsourcing manufacturing[85]. - The Company has a share option scheme approved on June 20, 2018, to incentivize and retain high-caliber employees[102]. Audit and Internal Control - The Audit Committee, comprising four Independent Non-executive Directors, oversees the financial reporting process and has reviewed annual results for the year ended December 31, 2020[165]. - The Company engaged HLB Hodgson Impey Cheng Limited as its auditors for the year ended December 31, 2020, with total auditors' remuneration amounting to HK$860,000[194]. - The Group did not have an internal audit function for the year ended 31 December 2020, as required under code provision C.2.5 of the CG Code[197]. - An external independent internal control consultant was engaged to review the Group's risk management and internal control systems for the year ended 31 December 2020[197]. - The Audit Committee reviewed the internal control review report and deemed the risk management and internal control systems effective and adequate[197].
恒伟集团控股(08219) - 2020 - 年度财报