Financial Performance - The Group's total revenue for FY2021 was approximately HK$17.1 million, a decrease of approximately 69.1% from HK$55.4 million in FY2020 due to the global impact of COVID-19[14]. - Gross profit for FY2021 totaled approximately HK$1.8 million, down approximately 67.9% from HK$5.6 million in FY2020, with a gross profit margin increase from approximately 10.1% to 10.5%[18]. - Total operating expenses for FY2021 were approximately HK$64.8 million, a decrease of approximately 29.2% from HK$91.5 million in FY2020, primarily due to a 63.3% reduction in distribution and selling expenses[19]. - Other income for FY2021 was approximately HK$1.9 million, down from approximately HK$10.9 million in FY2020, while net other losses were approximately HK$0.6 million compared to HK$4.7 million in FY2020[20]. - The Group recorded a loss of approximately HK$84.2 million for FY2021, compared to a loss of approximately HK$95.8 million in FY2020[21]. Impact of COVID-19 - The business has been severely impacted by COVID-19 since early 2020, with significant order cancellations from clients due to the pandemic and trade wars affecting the global supply chain[26]. - The Board anticipates that the impact of COVID-19 will be temporary, with expectations for substantial improvement in the business environment moving forward[24]. - The board believes that the impact of COVID-19 is temporary, and business conditions are expected to improve significantly as overseas clients regain confidence and orders[26]. - OS's total sales revenue for the year 2021 was approximately HK$12.5 million, a decrease of about 59.3% compared to HK$30.7 million in 2020, primarily due to the impact of the COVID-19 pandemic[67]. Business Strategy and Focus - The Company is shifting its long-term business focus towards design and sales, which require lighter asset commitments[25]. - The company is adjusting its business focus to concentrate on asset-light design and sales[26]. - The Group is focusing on developing health care products in partnership with a leading hospital and sleep science research institute in Jiangsu, China[64]. - The research and development team of VMS is exploring new partnership opportunities, including the joint development of innovative health measurement solutions[61]. Assets and Liabilities - The net liabilities value of the Group as of December 31, 2021, was approximately HK$305.6 million, an increase of about 38.1% from approximately HK$221.3 million in 2020[73]. - The Group's gearing ratio as of December 31, 2021, was approximately 321.9%, up from approximately 181.4% in 2020, due to an increase in loans from a shareholder[74]. - The Group's total assets as of December 31, 2021, were approximately HK$81.3 million, with total liabilities amounting to approximately HK$386.9 million[78]. Inventory and Receivables - As of December 31, 2021, trade receivables decreased by approximately 12.5% to approximately HK$0.7 million from HK$0.8 million in 2020[56]. - Inventory was maintained at a low level of approximately HK$5.2 million as of December 31, 2021, down approximately 26.8% from HK$7.1 million in 2020[65]. - The inventory turnover days increased to 147 days in FY2021, compared to 87 days in FY2020[65]. - Management is renegotiating commercial terms with VMS customers to improve gross margins and accelerate the recovery of trade receivables[62]. Legal Matters - The Group recognized a litigation loss provision of approximately HK$2.8 million in the consolidated statement of profit or loss for the year ended 31 December 2021 due to legal actions initiated by former employees[95]. - The Group was ordered by the PRC Court to pay approximately HK$2.0 million to a group of ten former employees and HK$0.8 million to three other former employees as compensation for breach of employment agreements[95]. - The Group has appealed the judgments related to the compensation claims from the three individual former employees[95]. - The Group's management believes that any potential legal liabilities from ongoing litigations will not have a material impact on its financial position[99]. Corporate Governance - The Company has complied with all principles and code provisions of the Corporate Governance Code, except for deviations from Code Provisions C.2.1, C.1.6, and C.1.8[111]. - The Company recognizes the importance of board diversity, considering factors such as cultural background, experience, skills, and gender[120]. - The Board of Directors consists of five members, including one Executive Director, one Non-Executive Director, and three Independent Non-Executive Directors[112]. - The Company aims to maintain an appropriate balance of independent Directors to ensure independent judgment[114]. - The Board is collectively responsible for the Company's activities and affairs, ensuring no individual or small group can dominate decision-making[143]. Board Meetings and Committees - The Board of Directors held a total of 4 meetings in FY2021, with all members attending all meetings[159]. - The Audit Committee (AC) is composed of three Independent Non-Executive Directors, ensuring that the majority possess the necessary accounting and financial management expertise[188]. - The Nomination and Corporate Governance Committee (NCGC) held two meetings during FY2021, with attendance from all members, and reviewed the structure and composition of the Board[177][181]. - The Remuneration Committee (RC) also held two meetings in FY2021, with all members present, and focused on reviewing the annual remuneration of Directors and senior management[185][186]. - The Company has established clear roles and responsibilities for its various committees to enhance governance and oversight[170].
IDT INT'L(00167) - 2021 - 年度财报