Financial Performance - For the fiscal year 2019, Kinetix Systems Holdings Limited reported revenue of approximately HKD 2,156 million, an increase of about 11.4% compared to the fiscal year 2018[10]. - The gross profit for the fiscal year 2019 was approximately HKD 373 million, a decrease of about 13.1% compared to the previous year[10]. - The net profit attributable to shareholders for the fiscal year 2019 was HKD 2.2 million[10]. - For the fiscal year 2019, the company recorded a profit attributable to equity shareholders of approximately HKD 2.2 million, compared to a loss of approximately HKD 9 million in fiscal year 2018, marking a significant turnaround[24]. - The increase in profit was primarily due to a reduction in expected credit loss provisions by approximately HKD 7.8 million and a decrease in one-time listing expenses by HKD 9.8 million, despite a gross profit decrease of HKD 5.6 million and an increase in legal and professional fees by HKD 1.4 million[24]. - The company's revenue for the fiscal year 2019 was approximately HKD 2,156 million, an increase of about HKD 221 million or 11.4% compared to fiscal year 2018 (approximately HKD 1,935 million)[50]. - The gross profit for fiscal year 2019 was approximately HKD 373 million, a decrease of about HKD 56 million or 13.1% from fiscal year 2018 (approximately HKD 429 million), with the gross profit margin declining from approximately 22.2% to 17.3%[50]. - The company's selling expenses for fiscal year 2019 were approximately HKD 61 million, an increase of about HKD 7 million or 13.0% compared to fiscal year 2018 (approximately HKD 54 million)[51]. - Administrative expenses for fiscal year 2019 were approximately HKD 280 million, an increase of about HKD 16 million or 6.1% from fiscal year 2018 (approximately HKD 264 million)[52]. - The company reported a profit of approximately HKD 106 million for fiscal year 2019, compared to a loss of approximately HKD 90 million in fiscal year 2018[52]. Business Operations - Kinetix Systems has been providing IT services for about 21 years, serving both private and public sectors, including government, banking, and telecommunications[9]. - The company’s main business involves providing IT infrastructure solutions, development solutions, and maintenance and support services[150]. - There were no significant changes in the nature of the group's main business during the fiscal year 2019[150]. - The revenue from the IT development solutions segment for fiscal year 2019 was approximately HKD 53.5 million, accounting for about 24.8% of total revenue, representing a 14.6% increase from approximately HKD 46.7 million in fiscal year 2018[25]. - The IT infrastructure solutions segment generated revenue of approximately HKD 123.5 million in FY2019, accounting for about 57.3% of total revenue, a decrease of approximately 1.4% from FY2018's HKD 125.3 million[26]. - The IT maintenance and support services segment reported revenue of approximately HKD 28.6 million in FY2019, representing about 13.3% of total revenue, an increase of approximately 33.0% from FY2018's HKD 21.5 million[27]. - A new subsidiary focused on e-commerce for entertainment products generated revenue of approximately HKD 10 million, accounting for about 4.6% of total revenue in FY2019[30]. Risk Management - The company acknowledges potential adverse impacts on business and short-term performance due to global and local economic uncertainties[10]. - The company operates in a market characterized by higher investment risks due to its listing on the GEM[2]. - The company faces significant risks, including reliance on suppliers for hardware and software, which could adversely affect operational performance if supply is disrupted[34]. - The company has a concentration risk with a few key suppliers, and losing any of them could significantly impact business operations[37]. - The company is currently under a standing contractor agreement with the Hong Kong government, which is set to expire in July 2021, posing a risk to future service provision[39]. - The company has identified potential liabilities from negligence or omissions during service delivery, which could lead to claims or lawsuits[40]. - The company has implemented a risk management policy aimed at identifying, assessing, and managing significant risks associated with its business operations[138]. Strategic Development - The company aims to strategically develop its business to mitigate the impacts of changing business environments[10]. - Kinetix Systems continues to implement clear strategies to balance short-term performance with long-term goals[10]. - The company plans to develop IT solutions tailored for the financial and insurance industries, expand ERP system applications, and enhance cloud computing and IoT products[31]. - The company aims to diversify its revenue sources by providing specific IT solution services through its newly established subsidiary[45]. - The company plans to continue monitoring macroeconomic issues and trade disputes to manage their impact on performance and to provide optimal results for shareholders in the medium to long term[45]. Corporate Governance - The board believes that the risk of directors facing legal action is relatively low, thus no insurance arrangements have been made for such risks[76]. - The company believes that having the same individual serve as both Chairman and CEO ensures efficient management and business development, which is in the best interest of the group[83]. - The board is responsible for the overall management of the group's business and ensuring sustainable value for shareholders[84]. - The company has appointed three independent non-executive directors, meeting the requirement of at least one with appropriate professional qualifications or accounting expertise[90]. - All directors are committed to ongoing professional development to enhance their knowledge and skills, ensuring they contribute effectively to the company[97]. - The board has established three committees: Audit Committee, Remuneration Committee, and Nomination Committee, each with clear written terms of reference[98]. - The audit committee reviewed the consolidated financial statements for the year ended December 31, 2019, and confirmed compliance with applicable accounting standards and GEM listing rules[103]. - The audit committee held five meetings during the year, in addition to two meetings with external auditors[104]. - The remuneration committee recommended compensation policies for all directors and senior management, including benefits and retirement rights[109]. - The nomination committee reviewed the diversity policy of the board and assessed the independence of independent non-executive directors[113]. - The company adhered to GEM listing rules requiring the audit committee to consist of at least three members, with the chairman possessing appropriate professional qualifications[104]. - The audit committee monitored the fairness of the company's financial statements, including annual and quarterly reports[104]. - The remuneration committee approved compensation for executive directors and senior management, ensuring alignment with contractual terms[109]. - The nomination committee proposed candidates for board appointments based on qualifications and expertise[113]. - The company conducted two meetings with external auditors to discuss significant audit issues[106]. - The audit committee recommended the reappointment of external auditors and approved their engagement terms[104]. - The board emphasizes diversity as a key element for achieving strategic goals and sustainable development, considering factors such as gender, age, cultural background, and race in candidate selection[114]. - As of December 31, 2019, the board's composition reflects diversity across various dimensions, including age groups and professional industries[118]. - The board held regular meetings to review financial and operational performance, with attendance records indicating full participation from executive directors in key meetings[120]. Shareholder Communication - The company has established multiple channels for communication with shareholders, including financial reports and annual general meetings[142]. - The company has adopted a shareholder communication policy to enhance communication and ensure shareholders are informed[142]. - The group reported a total sales revenue of approximately 34.5% from its top five customers, with the largest customer accounting for about 8.8% of total sales[161]. - The group did not recommend the payment of a final dividend for the fiscal year 2019[152]. - As of December 31, 2019, the reserves available for distribution to shareholders were approximately HKD 40 million[161]. Employee and Community Engagement - As of December 31, 2019, the group had a total of 116 employees, an increase from 85 employees as of December 31, 2018[63]. - Total employee costs for the fiscal year 2019 amounted to approximately HKD 38 million, compared to approximately HKD 35.3 million in fiscal year 2018[63]. - The group made charitable donations totaling approximately HKD 10,000 in fiscal year 2019, down from approximately HKD 13,000 in 2018[66]. - The company is committed to maintaining high environmental and social standards, ensuring sustainable business practices[198]. - The company encourages participation from employees, customers, suppliers, and stakeholders in community-beneficial activities[198]. - The environmental, social, and governance policies and performance details will be disclosed in the ESG report found on pages 41 to 45 of the annual report[198].
倢冠控股(08606) - 2019 - 年度财报