Financial Performance - For the year ended December 31, 2019, the group generated revenue of approximately HKD 59,313,000, while the loss attributable to owners of the group was approximately HKD 4,946,000[48]. - The company's revenue increased from approximately HKD 54,733,000 for the year ended December 31, 2018, to approximately HKD 59,313,000 for the year ended December 31, 2019, representing an increase of about HKD 4,580,000[63]. - The gross profit for the year ended December 31, 2019, was approximately HKD 21,975,000, with a gross profit margin of approximately 37.05%, down from 42.45% in the previous year[64]. - The company reported a loss attributable to owners of approximately HKD 4,946,000 for the year ended December 31, 2019, an increase of about HKD 6,726,000 from a profit of approximately HKD 1,780,000 for the year ended December 31, 2018[74]. - The administrative expenses increased from approximately HKD 12,996,000 for the year ended December 31, 2018, to approximately HKD 13,524,000 for the year ended December 31, 2019, primarily due to increases in employee costs and professional fees[67]. Business Strategy and Development - The group aims to expand its digital photo booth network by installing machines in selected locations and acquiring businesses in the market[47]. - The group plans to continue developing its existing business while seeking attractive locations for digital photo booths to enhance profitability[47]. - The company plans to expand its self-service digital photo booth network in Hong Kong and replicate its successful business model in mainland China and other countries[58]. - The company is actively researching and seeking new business opportunities to achieve sustainable growth and long-term benefits for shareholders[62]. - The company is exploring opportunities to expand its digital photo booth network to locations such as railway stations, shopping malls, and large residential areas in mainland China[58]. Operational Challenges - The group recognizes significant challenges in the operating environment due to the COVID-19 outbreak and ongoing changes in government policies[47]. - The outbreak of COVID-19 has introduced uncertainties to the photography service market, significantly impacting sales and potentially affecting employee attendance[94]. - The company is facing downward pressure on its Hong Kong business due to unexpected policy changes regarding the issuance of identity documents[57]. - The company has experienced a risk related to the demand for its products, which is closely tied to the application and renewal of identification documents[119]. Corporate Governance and Management - The company has a strong board of directors with members having extensive experience in various industries, including over 42 years in the garment industry and over 37 years in the self-service photography sector[101][102]. - The company’s financial oversight is managed by an executive director with around 32 years of experience in accounting and financial management[99]. - The company has established a remuneration committee to review the remuneration policies and structures for directors and senior management, considering the group's operational performance[146]. - The board of directors consists of two executive directors, two non-executive directors, and three independent non-executive directors[200]. - The company has established three board committees: Audit Committee, Remuneration Committee, and Nomination Committee to oversee specific matters[197]. Compliance and Risk Management - The company has maintained compliance with relevant laws and regulations, confirming no significant violations that could impact its operations[121]. - The company has established a liquidity risk management framework to monitor and maintain appropriate levels of cash and cash equivalents[80]. - The independent non-executive directors confirmed their independence according to GEM listing rules[140]. - The auditor has concluded that the ongoing connected transactions have been approved by the board and comply with the company's pricing policy[183]. - The company has appointed a compliance advisor to provide guidance on compliance with GEM listing rules[192]. Shareholder Information - The company reported that the executive directors hold a total of 427,600,560 shares, representing 53.45% of the issued shares[151]. - Major shareholder Causeway Treasure holds 427,600,560 shares, representing approximately 53.45% of the company's equity[159]. - Photo-Me International Plc. is a beneficial owner with 109,972,500 shares, accounting for 13.75% of the company's equity[159]. - The independent non-executive directors hold approximately 7.80% of the shares[151]. - The company’s total distributable reserves as of December 31, 2019, were approximately HK$20,043,000[133]. Dividend Policy - The board does not recommend the declaration of a final dividend for the year ended December 31, 2019, to maintain sufficient funds for future business development[49]. - The company did not declare a final dividend for the year ended December 31, 2019, after paying an interim dividend of HKD 0.005 per share[95]. - The company’s dividend policy considers various factors, including actual and expected financial performance and operational funding needs[146]. Supplier Relationships - The company reported a significant reliance on its major supplier, Photo-Me International Plc, which accounted for approximately 93.2% of total procurement in the fiscal year ending December 31, 2019[129]. - The main supply agreement with Photo-Me International Plc. has been in effect since July 9, 2017, and is expected to continue until December 31, 2019[179]. - The total transaction amount with Photo-Me International Plc. and its subsidiaries for the fiscal year ending December 31, 2019, is capped at HKD 6,700,000, which includes HKD 5,300,000 for digital cameras and components, and HKD 1,400,000 for consumables[181]. Corporate Social Responsibility - The company made donations amounting to approximately HKD 26,000 for scholarships to students facing adversity during the fiscal year ending December 31, 2019[185]. - The company aims to enhance its environmental, social, and governance (ESG) practices to improve corporate governance and stakeholder value[122].
名仕快相(08483) - 2019 - 年度财报