Company Overview [Corporate Information](index=4&type=section&id=%E5%85%AC%E5%8F%B8%E8%B3%87%E6%96%99) This section provides the company's basic information, including board members, committee compositions, and key operational details - The company primarily engages in platform facade and curtain wall engineering in Hong Kong with over 20 years of experience, providing one-stop services[3](index=3&type=chunk) - Mr Li Chi Hung serves as the Chairman of the Board and Chief Executive Officer, with various committees chaired by key board members[6](index=6&type=chunk) [Chairman's Statement](index=5&type=section&id=%E4%B8%BB%E5%B8%AD%E5%A0%B1%E5%91%8A) The Chairman reviews a challenging 2020, highlighting a record-high contract value on hand despite pandemic-related revenue delays - Revenue for 2020 was lower than expected due to the pandemic and construction delays by other contractors[9](index=9&type=chunk) - The Group adopted a prudent bidding strategy, securing new projects worth approximately **HK$635 million** and achieving a record-high value of uncompleted contracts[9](index=9&type=chunk) - The Board of Directors recommends a final dividend of **1.1 HK cents per share** for the year 2020[11](index=11&type=chunk) [Directors and Senior Management](index=26&type=section&id=%E8%91%A3%E4%BA%8B%E5%8F%8A%E9%AB%98%E7%B4%9A%E7%AE%A1%E7%90%86%E5%B1%A4) This section details the backgrounds, experiences, and primary responsibilities of the company's directors and senior management - Executive Director, Chairman, and CEO Mr Li Chi Hung, a co-founder of the Group, has over 23 years of experience in the Hong Kong construction industry[137](index=137&type=chunk) - The senior management team possesses extensive industry experience in construction, design, project management, and finance, with an average experience of over 20 years[144](index=144&type=chunk)[145](index=145&type=chunk)[148](index=148&type=chunk) Management Discussion and Analysis [Financial Review](index=6&type=section&id=%E8%B2%A1%E5%8B%99%E5%9B%9E%E9%A1%A7) The Group's revenue declined in 2020 due to project delays, but gross margin improved and its financial position remained solid Key Financial Indicators for FY2020 | Indicator | 2020 (HK$ million) | 2019 (HK$ million) | Y-o-Y Change | | :--- | :--- | :--- | :--- | | **Total Revenue** | 243.4 | 299.8 | -18.8% | | Design and Build Projects Revenue | 232.9 | 285.3 | -18.4% | | Repair and Maintenance Services Revenue | 10.5 | 14.5 | -27.6% | | **Gross Profit** | 63.2 | 69.5 | -9.0% | | **Gross Profit Margin** | 26.0% | 23.2% | +2.8pp | | **Profit for the Year** | 23.3 | 26.4 | -11.7% | | **Administrative and Other Operating Expenses** | 39.3 | 38.4 | +2.3% | - The decrease in revenue was mainly due to the progress delay of a major project caused by other contractors[17](index=17&type=chunk) - The increase in gross profit margin was primarily attributable to more effective project cost management[21](index=21&type=chunk) - The decrease in profit for the year was mainly due to lower gross profit, partially offset by government subsidies related to the pandemic of approximately **HK$3.6 million**[26](index=26&type=chunk) - As of the end of 2020, the Group maintained a healthy gearing ratio of **0.5%** with cash and cash equivalents of approximately **HK$149 million**, an increase of HK$20.7 million year-on-year[29](index=29&type=chunk) [Prospects and Outlook](index=7&type=section&id=%E5%89%8D%E6%99%AF%E5%8F%8A%E5%B1%95%E6%9C%9B) The Group holds a strong project pipeline with an estimated remaining contract value of HK$780 million, demonstrating a successful business strategy Major Projects on Hand as at 31 December 2020 | No. | Project Type | Location | Expected Completion | Est. Remaining Contract Value (HK$ million) | | :--- | :--- | :--- | :--- | :--- | | 1 | Platform Facade | Kai Tak, Kowloon | Dec 2022 | 291.4 | | 2 | Platform Facade | Kwun Tong, Kowloon | Jun 2022 | 218.2 | | 3 | Platform Facade | Taikoo, Hong Kong | Dec 2021 | 197.8 | | 4 | Platform Facade | Tin Shui Wai, N.T. | Jun 2021 | 58.6 | | 5 | Platform Facade | Yuen Long, N.T. | Jun 2021 | 14.1 | | **Total** | | | | **780.1** | - After the reporting date, the Group was bidding for 7 large-scale platform facade projects with a total estimated contract value exceeding **HK$285.6 million**[20](index=20&type=chunk) [Principal Risks and Uncertainties](index=11&type=section&id=%E4%B8%BB%E8%A6%81%E9%A2%A8%E9%9A%AA%E5%8F%8A%E4%B8%8D%E7%A2%BA%E5%AE%9A%E5%9B%A0%E7%B4%A0) The Group faces risks from market conditions, project bidding uncertainty, and reliance on a few major customers for revenue - The Group's operations are subject to overall economic and market risks, which may affect industry competitiveness and project profitability[53](index=53&type=chunk) - Business risks include the inability to continuously secure new project orders and a heavy reliance on a few major customers[53](index=53&type=chunk) [Employees and Remuneration Policies](index=9&type=section&id=%E5%83%B1%E5%93%A1%E5%8F%8A%E8%96%AA%E9%85%AC%E6%94%BF%E7%AD%96) The Group's workforce and employee benefit expenses both increased in 2020, reflecting growth in headcount and average remuneration Employee and Remuneration Overview | Indicator | 2020 | 2019 | | :--- | :--- | :--- | | Total Employees (Year-end) | 103 people | 100 people | | Total Employee Benefit Expenses | HK$57.6 million | HK$51.7 million | Corporate Governance Report [Corporate Governance Practices](index=12&type=section&id=%E4%BC%81%E6%A5%AD%E7%AE%A1%E6%B2%BB%E5%B8%B8%E8%A6%8F) The company complied with most Corporate Governance Code provisions, with the deviation of the Chairman and CEO roles being held by the same person - The company complied with most provisions of the Corporate Governance Code in 2020, with the only deviation being the combined role of Chairman and CEO held by Mr Li Chi Hung[58](index=58&type=chunk) - The Board believes this arrangement is beneficial for management, and the strong independent composition of the Board ensures a balance of power[58](index=58&type=chunk) [Board and Committees](index=12&type=section&id=%E8%91%A3%E4%BA%8B%E6%9C%83%E5%8F%8A%E5%A7%94%E5%93%A1%E6%9C%83) The Board leads the Group's business and has established four committees to oversee specific functions including audit, nomination, and risk - The Board has established four committees: Audit, Nomination, Remuneration, and Risk Management to oversee specific functions[68](index=68&type=chunk) - The committees are responsible for reviewing financial reporting, nominating directors, recommending remuneration policies, and overseeing the risk management system[72](index=72&type=chunk)[73](index=73&type=chunk)[74](index=74&type=chunk)[75](index=75&type=chunk) [Risk Management and Internal Control](index=16&type=section&id=%E9%A2%A8%E9%9A%AA%E7%AE%A1%E7%90%86%E5%8F%8A%E5%85%A7%E9%83%A8%E7%9B%A3%E6%8E%A7) The Board, assisted by the Risk Management Committee, deems the Group's risk management and internal control systems effective and adequate - The company has engaged an external independent consultant for an annual review of its internal control system as it has no internal audit department[80](index=80&type=chunk) - The 2020 internal control review covered project budgeting, tendering, cash flow management, and the risk management function[80](index=80&type=chunk) - Based on the review, the Board considers the Group's risk management and internal control systems to be effective and adequate[80](index=80&type=chunk) [Auditor's Remuneration](index=16&type=section&id=%E6%A0%B8%E6%95%B8%E5%B8%AB%E9%85%AC%E9%87%91) Total fees paid to the auditor, BDO Limited, for 2020 amounted to HK$630,000, entirely for audit services Auditor's Remuneration for FY2020 | Service Type | Fee (HK$ thousand) | | :--- | :--- | | Audit services | 630 | | Non-audit services | – | | **Total** | **630** | Report of the Directors [Results and Dividends](index=18&type=section&id=%E6%A5%AD%E7%B8%BE%E5%8F%8A%E8%82%A1%E6%81%AF) The Board recommends a final dividend of 1.1 HK cents per share for the year ended 31 December 2020, representing a payout ratio of 47.2% - The Board recommends a final dividend of **1.1 HK cents per share** for 2020, totaling HK$11 million[92](index=92&type=chunk) - The proposed dividend payout ratio is approximately **47.2%**[92](index=92&type=chunk) [Share Option Scheme](index=19&type=section&id=%E8%B3%BC%E8%82%A1%E6%AC%8A%E8%A8%88%E5%8A%83) During the reporting period, 2,750,000 share options lapsed under the scheme, with no options exercised or cancelled - In 2020, a total of **2,750,000 share options lapsed**, including 1,500,000 from a former executive director and 1,250,000 from other participants[102](index=102&type=chunk)[107](index=107&type=chunk) - As of the end of 2020, all granted share options had lapsed, leaving no outstanding options[107](index=107&type=chunk) [Disclosure of Interests](index=22&type=section&id=%E6%8A%AB%E9%9C%B2%E6%AC%8A%E7%9B%8A) The controlling shareholder, Cheung Mau Limited, holds a 75% stake in the company and is controlled by two directors acting in concert - The controlling shareholder, Cheung Mau Limited, holds 750,000,000 shares, representing **75% of the issued share capital**[120](index=120&type=chunk)[121](index=121&type=chunk) - Cheung Mau is owned 75% by Mr Li Chi Hung (Executive Director) and 25% by Mr Leung Ping Kwan (Non-executive Director), who are parties acting in concert[120](index=120&type=chunk)[124](index=124&type=chunk) [Major Customers and Suppliers](index=24&type=section&id=%E4%B8%BB%E8%A6%81%E5%AE%A2%E6%88%B6%E5%8F%8A%E4%BE%9B%E6%87%89%E5%95%86) The Group exhibits very high customer concentration, with its top five customers accounting for 97.9% of total revenue in 2020 - **High customer concentration**: The top five customers accounted for **97.9%** of total revenue, with the largest single customer contributing **48.9%**[125](index=125&type=chunk) - **Relatively lower supplier concentration**: The top five suppliers accounted for **56.5%** of total purchases, with the largest single supplier at **14.8%**[126](index=126&type=chunk) Environmental, Social and Governance Report [ESG Governance and Strategy](index=30&type=section&id=ESG%E7%AE%A1%E6%B2%BB%E8%88%87%E7%AD%96%E7%95%A5) The Group's ESG strategy focuses on sustainability, with governance overseen by the Board and implemented by a dedicated ESG working group - The report is prepared in accordance with the HKEX's ESG Reporting Guide, covering the Group's Hong Kong operations for the 2020 financial year[157](index=157&type=chunk)[158](index=158&type=chunk) - The Board oversees ESG matters and has delegated daily execution to an ESG working group composed of internal and external experts[163](index=163&type=chunk)[165](index=165&type=chunk) [Social Aspect](index=34&type=section&id=%E7%A4%BE%E6%9C%83%E5%B1%A4%E9%9D%A2) The Group is committed to fair employment, employee well-being, health and safety, and community support through charitable donations - The Group adheres to a fair employment policy, opposes all forms of discrimination, and has a zero-tolerance policy for child and forced labor[176](index=176&type=chunk)[177](index=177&type=chunk) - In response to COVID-19, the company implemented measures such as work-from-home arrangements and relaxed private car usage to protect employee health[197](index=197&type=chunk)[200](index=200&type=chunk)[201](index=201&type=chunk) - In 2020, the Group donated approximately **HK$149,000** to various charitable organizations to support vulnerable communities[206](index=206&type=chunk)[207](index=207&type=chunk) [Environmental Aspect](index=41&type=section&id=%E7%92%B0%E5%A2%83%E5%B1%A4%E9%9D%A2) The Group aims to reduce its environmental footprint, achieving a significant reduction in waste despite an increase in energy consumption in 2020 Environmental Performance Indicators for 2020 | Key Performance Indicator | 2020 | 2019 | Y-o-Y Change | | :--- | :--- | :--- | :--- | | **Total Energy Consumption (kWh)** | 214,592 | 184,527 | +16% | | - Electricity (kWh) | 173,684 | 145,658 | +19% | | - Petrol (litres) | 4,221 | 4,010 | +5% | | **Total GHG Emissions (tonnes CO2-e)** | 108.2 | 104.8 | +3.2% | | - GHG Emission Intensity (tonnes CO2-e/employee) | 1.071 | 1.075 | -0.4% | | **Total Non-hazardous Waste (tonnes)** | 3.2 | 3.8 | -16% | | - Non-hazardous Waste Intensity (tonnes/employee) | 0.031 | 0.039 | -20% | - The increase in electricity and petrol consumption was mainly due to more overtime work and relaxed use of company vehicles during the pandemic[216](index=216&type=chunk)[217](index=217&type=chunk) - Despite increased energy consumption, the amount of non-hazardous waste was significantly reduced through the implementation of a paperless system[227](index=227&type=chunk) [Operating Practices](index=46&type=section&id=%E7%87%9F%E9%81%8B%E6%85%A3%E4%BE%8B) The Group prioritizes quality and safety through ISO 9001:2015 compliance, responsible sourcing, and a zero-tolerance anti-corruption policy - The Group's business operations comply with the **ISO 9001:2015** quality standard, ensuring high-quality construction works for clients[244](index=244&type=chunk) - The Group practices responsible sourcing, considering suppliers' social responsibility performance and conducting rigorous assessments of subcontractors[248](index=248&type=chunk) - The Group has a **zero-tolerance policy** towards corruption and bribery, with no related legal cases during the reporting period[253](index=253&type=chunk)[254](index=254&type=chunk)[255](index=255&type=chunk) Independent Auditor's Report [Audit Opinion](index=52&type=section&id=%E5%AF%A9%E8%A8%88%E6%84%8F%E8%A6%8B) The auditor issued an unqualified opinion, stating the financial statements give a true and fair view of the Group's financial position and performance - The auditor issued an **unqualified opinion** on the Group's consolidated financial statements for the year 2020[286](index=286&type=chunk) [Key Audit Matters](index=53&type=section&id=%E9%97%9C%E9%8D%B5%E5%AF%A9%E8%A8%88%E4%BA%8B%E9%A0%85) The key audit matter was the recognition of contract revenue, which involves significant management judgment in estimating total contract costs - The key audit matter was the **recognition of contract revenue, contract assets and contract liabilities**[290](index=290&type=chunk)[291](index=291&type=chunk) - This matter was critical because revenue recognition relies on estimates of total contract costs, which involve **significant management judgment and uncertainty**[291](index=291&type=chunk) - The auditor's procedures included assessing controls, testing budget costs, evaluating the reasonableness of budgeting, and recalculating the percentage of completion[292](index=292&type=chunk)[293](index=293&type=chunk)[294](index=294&type=chunk) Consolidated Financial Statements [Consolidated Statement of Comprehensive Income](index=57&type=section&id=%E7%B6%9C%E5%90%88%E5%85%A8%E9%9D%A2%E6%94%B6%E7%9B%8A%E8%A1%A8) The Group recorded revenue of HK$243 million and profit for the year of HK$23.3 million, with basic earnings per share of 2.3 HK cents Consolidated Statement of Comprehensive Income Summary (For the year ended 31 December) | Item (HK$ thousand) | 2020 | 2019 | | :--- | :--- | :--- | | Revenue | 243,399 | 299,756 | | Gross Profit | 63,170 | 69,452 | | Profit before income tax | 27,670 | 31,233 | | Profit for the year | 23,299 | 26,366 | | Total comprehensive income for the year | 23,294 | 26,356 | | **Basic earnings per share (HK cents)** | **2.3** | **2.6** | [Consolidated Statement of Financial Position](index=58&type=section&id=%E7%B6%9C%E5%90%88%E8%B2%A1%E5%8B%99%E7%8B%80%E6%B3%81%E8%A1%A8) As of 31 December 2020, the Group's total assets stood at HK$349 million, with total equity increasing to HK$237 million Consolidated Statement of Financial Position Summary (As at 31 December) | Item (HK$ thousand) | 2020 | 2019 | | :--- | :--- | :--- | | **Assets** | | | | Non-current assets | 19,386 | 5,700 | | Current assets | 329,553 | 286,247 | | **Total assets** | **348,939** | **291,947** | | **Liabilities and Equity** | | | | Current liabilities | 100,938 | 63,188 | | Non-current liabilities | 11,128 | 1,180 | | **Total liabilities** | **112,066** | **64,368** | | **Total equity** | **236,873** | **227,579** | [Consolidated Statement of Changes in Equity](index=59&type=section&id=%E7%B6%9C%E5%90%88%E6%AC%8A%E7%9B%8A%E8%AE%8A%E5%8B%95%E8%A1%A8) Total equity increased to HK$237 million, driven by the profit for the year, partially offset by dividends paid - Total equity increased from **HK$227,579 thousand** at the beginning of the year to **HK$236,873 thousand** at year-end[316](index=316&type=chunk) - The change in equity was mainly affected by: - Profit for the year: **+HK$23,299 thousand** - Dividends paid: **-HK$14,000 thousand**[316](index=316&type=chunk) [Consolidated Statement of Cash Flows](index=61&type=section&id=%E7%B6%9C%E5%90%88%E7%8F%BE%E9%87%91%E6%B5%81%E9%87%8F%E8%A1%A8) The Group's cash and cash equivalents increased by HK$20.7 million during the year, reaching a balance of HK$149 million Consolidated Statement of Cash Flows Summary (For the year ended 31 December) | Item (HK$ thousand) | 2020 | 2019 | | :--- | :--- | :--- | | Net cash from operating activities | 40,434 | 60,285 | | Net cash used in investing activities | (2,924) | (428) | | Net cash used in financing activities | (16,821) | (28,078) | | **Increase in cash and cash equivalents** | **20,689** | **31,779** | | Cash and cash equivalents at end of year | 149,157 | 128,467 | Notes to the Consolidated Financial Statements [Note 5 Key sources of estimation uncertainty](index=83&type=section&id=Note%205%20%E9%97%9C%E9%8D%B5%E6%9C%83%E8%A8%88%E5%88%A4%E6%96%B7%E5%8F%8A%E4%BC%B0%E8%A8%88%E4%B8%8D%E7%A2%BA%E5%AE%9A%E5%9B%A0%E7%B4%A0%E7%9A%84%E4%B8%BB%E8%A6%81%E4%BE%86%E6%BA%90) This note discloses key judgments and estimates, with major uncertainties in construction contract revenue recognition and credit loss provisions - The recognition of construction contract revenue depends on estimates of total contract costs, which require periodic review and revision by management[438](index=438&type=chunk) - The provision for expected credit losses on trade receivables and contract assets requires management judgment, especially when assessing significant increases in credit risk[443](index=443&type=chunk)[444](index=444&type=chunk) [Note 7 Revenue](index=86&type=section&id=Note%207%20%E6%94%B6%E7%9B%8A) This note details the composition of revenue, with design and build projects contributing the majority of the HK$243 million total Revenue Breakdown (HK$ thousand) | Item | 2020 | 2019 | | :--- | :--- | :--- | | **Design and build projects** | **232,855** | **285,255** | | - Platform facade and related works | 159,406 | 142,634 | | - Curtain wall works | 73,449 | 142,621 | | **Repair and maintenance services** | **10,544** | **14,501** | | **Total** | **243,399** | **299,756** | - The total amount of remaining performance obligations (i.e., order book) to be recognized in the future is **HK$823 million**[451](index=451&type=chunk) [Note 36 Financial risk management](index=116&type=section&id=Note%2036%20%E8%B2%A1%E5%8B%99%E9%A2%A8%E9%9A%AA%E7%AE%A1%E7%90%86) This note outlines the Group's management of key financial risks, including credit, interest rate, currency, and liquidity risks - **Credit risk**: Significant customer concentration risk exists, with approximately **97%** of trade receivables from the top five customers in 2020[593](index=593&type=chunk) - **Interest rate risk**: Arises mainly from floating-rate bank borrowings, with a 1% rate change impacting annual profit by approximately HK$4,000[595](index=595&type=chunk)[598](index=598&type=chunk) - **Liquidity risk**: Managed by monitoring liquidity needs and maintaining sufficient cash reserves and financing facilities[606](index=606&type=chunk)[612](index=612&type=chunk) Five-Year Financial Summary [Five-Year Financial Summary](index=122&type=section&id=%E4%BA%94%E5%B9%B4%E8%B2%A1%E5%8B%99%E6%A6%82%E8%A6%81) The Group's revenue and profit have declined from their 2018 peak, while total assets and equity have shown consistent growth over five years Five-Year Results Summary (For the year ended 31 December, HK$ thousand) | Indicator | 2020 | 2019 | 2018 | 2017 | 2016 | | :--- | :--- | :--- | :--- | :--- | :--- | | Revenue | 243,399 | 299,756 | 365,436 | 315,751 | 273,912 | | Gross Profit | 63,170 | 69,452 | 86,995 | 99,505 | 90,523 | | Profit for the year | 23,299 | 26,366 | 36,939 | 52,267 | 50,077 | Five-Year Assets, Liabilities and Equity Summary (As at 31 December, HK$ thousand) | Indicator | 2020 | 2019 | 2018 | 2017 | 2016 | | :--- | :--- | :--- | :--- | :--- | :--- | | Total assets | 348,939 | 291,947 | 302,498 | 274,608 | 163,655 | | Total liabilities | 112,066 | 64,368 | 83,479 | 66,523 | 80,708 | | Total equity | 236,873 | 227,579 | 219,019 | 208,085 | 82,947 |

Revenue and Profitability - The group's revenue increased by approximately HKD 4.1 million or 3.1% to about HKD 135.5 million compared to the previous period's HKD 131.4 million[12]. - Gross profit decreased by approximately HKD 1.1 million or 3.1% to about HKD 35.8 million, with a gross margin decline from approximately 28.1% to 26.4%[13]. - Net profit for the period decreased by approximately HKD 2.1 million or 11.3% to about HKD 16.5 million, primarily due to the decline in gross profit and an increase in administrative expenses[15]. - Revenue for the six months ended June 30, 2020, was HKD 135,524 thousand, an increase of 3.2% compared to HKD 131,411 thousand in 2019[50]. - Gross profit for the same period was HKD 35,827 thousand, down 2.9% from HKD 36,885 thousand in 2019[51]. - Profit before tax decreased to HKD 19,560 thousand, a decline of 11.6% from HKD 22,180 thousand in the previous year[51]. - Net profit for the period was HKD 16,498 thousand, down 11.2% from HKD 18,584 thousand in 2019[51]. - Basic and diluted earnings per share were both HKD 1.6, compared to HKD 1.9 in the same period last year[51]. Expenses and Costs - Administrative and other operating expenses increased by approximately HKD 3.6 million or 24.6% to about HKD 18.2 million, mainly due to higher salaries and professional fees[14]. - The cost of goods sold for the six months ended June 30, 2020, included depreciation of HKD 46,570 thousand, up from HKD 25,640 thousand in 2019, indicating an increase of approximately 82%[81]. - The income tax expense for the six months ended June 30, 2020, was HKD 3,062 thousand, compared to HKD 3,596 thousand in 2019, a decrease of about 15%[83]. Cash Flow and Financial Position - Cash and cash equivalents at the end of the period were HKD 120,792 thousand, a decrease from HKD 125,622 thousand in 2019[59]. - Operating cash flow for the period was negative HKD 14,146 thousand, compared to positive HKD 34,829 thousand in 2019[59]. - The group maintained a net cash position exceeding HKD 100 million, indicating confidence in navigating the challenging global economic environment[6]. Borrowings and Liabilities - As of June 30, 2020, the group's bank borrowings amounted to approximately HKD 7.8 million, an increase of about HKD 6.8 million from HKD 1.0 million as of December 31, 2019[19]. - The asset-to-liability ratio as of June 30, 2020, was 3.4%, up from 0.4% as of December 31, 2019, due to the increase in bank borrowings[20]. - The company's bank borrowings due within one year increased to HKD 7,786,000 as of June 30, 2020, compared to HKD 1,000,000 as of December 31, 2019[108]. Contracts and Projects - The group has secured new contracts worth approximately HKD 378.5 million for two new façade projects and one maintenance contract[10]. - The estimated contract value for a large-scale façade project currently in bidding exceeds HKD 122.1 million[10]. - Contract assets as of June 30, 2020, were HKD 81,106,000, compared to HKD 74,661,000 as of December 31, 2019, indicating an increase of 8.5%[95]. Employee and Management Compensation - The group had 103 employees as of June 30, 2020, compared to 98 employees as of June 30, 2019, with total employee costs amounting to approximately HKD 26.7 million, an increase from HKD 24.9 million in the previous period[21]. - The compensation for directors and key management personnel for the six months ended June 30, 2020, is HKD 5,525,000, an increase from HKD 5,100,000 in 2019, reflecting a growth of about 8.3%[115]. - Share-based payment expenses for key management increased significantly to HKD 5,584,000 in 2020 from HKD 102,000 in 2019, indicating a substantial rise in equity compensation[115]. Dividends and Shareholder Returns - The board does not recommend the payment of an interim dividend for the period, considering the overall business performance, financial condition, and capital requirements[47]. - The company did not recommend any interim dividend for the six months ended June 30, 2020, consistent with no dividend declared for the same period in 2019[88]. - The company approved a final dividend of HKD 14,000,000 for the year ended December 31, 2019, which was distributed to shareholders on July 17, 2020[88]. Assets and Investments - Total assets as of June 30, 2020, were HKD 230,071 thousand, an increase from HKD 227,579 thousand at the end of 2019[53]. - The company reported a net asset value of HKD 226,158 thousand, up from HKD 223,059 thousand in the previous year[53]. - Trade receivables as of June 30, 2020, amounted to HKD 40,675,000, a decrease from HKD 46,166,000 as of December 31, 2019, representing a decline of 11.9%[98]. - The company did not hold any significant investments during the period[40]. - As of June 30, 2020, the group had no significant capital commitments[41]. - There were no significant contingent liabilities as of June 30, 2020[42]. Regulatory and Accounting Standards - The company has adopted new or revised Hong Kong Financial Reporting Standards effective from January 1, 2020, but these did not have a significant impact on the interim financial statements[68]. - The company is currently evaluating the impact of newly issued accounting standards that have been announced but are not yet effective, with no significant effects anticipated at this time[71]. Market and Operational Focus - The company operates primarily in Hong Kong, with over 72% of its non-current assets located there, indicating a strong regional focus[74]. - The company continues to provide integrated design and construction solutions, focusing on maintenance services for external wall and curtain wall engineering[77].

Financial Performance - The revenue from curtain wall engineering increased from approximately HKD 63 million in 2017 to about HKD 142.6 million in 2019, reflecting a significant growth trajectory[9]. - The group's net profit decreased from HKD 37 million to HKD 26 million, primarily due to project delays and additional construction costs incurred near project completion[10]. - In 2019, the group's total revenue was approximately HKD 299.8 million, a decrease of about HKD 65.6 million or 17.9% compared to HKD 365.4 million in 2018[18]. - The revenue from design and construction projects accounted for approximately HKD 285.3 million, representing 95.2% of total revenue, while maintenance and repair services generated about HKD 14.5 million, or 4.8%[18]. - The group's gross profit decreased to approximately HKD 69.5 million in 2019, down about HKD 17.5 million or 20.1% from approximately HKD 87.0 million in 2018[22]. - The gross profit margin for 2019 was approximately 23.2%, slightly down from about 23.8% in 2018[22]. - The group recorded a net profit of approximately HKD 26.4 million in 2019, a decrease of about HKD 10.5 million or 28.5% from approximately HKD 36.9 million in 2018[25]. Cash Position and Debt - The company maintains a strong cash position with net cash exceeding HKD 100 million, allowing it to withstand economic uncertainties such as those posed by the COVID-19 outbreak[11]. - The group's bank borrowings as of December 31, 2019, were approximately HKD 1.0 million, a decrease of about HKD 7.2 million from approximately HKD 8.2 million on December 31, 2018[29]. - As of December 31, 2019, the group's cash and bank balances were approximately HKD 128.5 million, an increase of about HKD 31.9 million from approximately HKD 96.6 million as of December 31, 2018, mainly due to the recovery of receivables[30]. - The group's debt-to-equity ratio as of December 31, 2019, was approximately 0.4%, a significant decrease from 3.8% as of December 31, 2018, primarily due to an increase in total equity and a reduction in bank borrowings[30]. Competition and Market Position - The group has been facing increased competition in the Hong Kong platform facade and curtain wall market, along with rising labor and operational costs[10]. - The company is optimistic about its market position in platform facades, supported by long-term relationships with clients and an experienced management team[11]. - The company has secured one project out of six bids for curtain wall engineering in the fiscal year 2019, indicating a competitive bidding environment[9]. - The group aims to seek more opportunities in curtain wall projects and continue executing its growth strategies outlined in the prospectus issued in May 2017[11]. Corporate Governance - The company is committed to maintaining high standards of corporate governance to maximize shareholder and group benefits[62]. - The board of directors consists of two executive directors, one non-executive director, and three independent non-executive directors, ensuring strong independence in its composition[63]. - The company has adopted the corporate governance code and has complied with its provisions, except for the separation of roles between the chairman and CEO[63]. - The board is responsible for setting overall strategies and policies, assessing performance, and overseeing management functions[65]. - The company has established four committees within the board to oversee specific functions, ensuring good corporate governance practices[74]. Employee and Talent Management - The total employee benefit expenses for the group in the fiscal year 2019 were approximately HKD 51.7 million, up from HKD 49.6 million in the previous year, primarily due to an increase in the number of employees[41]. - The group employed 100 staff members as of December 31, 2019, compared to 95 staff members as of December 31, 2018[41]. - Approximately 30% of senior talents enjoy insurance coverage equivalent to that of the CEO, while the remaining talents have slightly lower coverage[181]. - The company has implemented policies to ensure fair employment practices, prohibiting child labor and forced labor, and ensuring voluntary employment conditions[183]. - Management provides competitive compensation and benefits to attract and retain talent, with annual performance evaluations determining salary adjustments and bonuses[188]. Social Responsibility and Sustainability - G&M has been committed to engineering excellence and social responsibility since its establishment in 1993, contributing to the development of the façade and curtain wall industry for over 20 years[155]. - In 2017, G&M established an ESG working group to address CSR issues and related risks, aiming to integrate sustainable development principles into business operations[156]. - The ESG strategy aims to create long-term value for stakeholders, with the board overseeing ESG development and setting objectives[162]. - The company emphasizes ethical conduct and contributions to society while improving the quality of life for employees and their families[167]. - The company has developed an ESG framework to guide its sustainable development performance and ensure adequate resources for strategic goals[170]. Risk Management - The company believes its risk management and internal control systems are effective and adequate, although they cannot eliminate all risks[85]. - The board is responsible for evaluating the nature and extent of risks associated with achieving the company's strategic objectives[84]. - The Risk Management Committee conducted a risk assessment aligned with the group's latest operations, identifying key risks recorded in a risk register[84]. Customer and Supplier Relationships - Revenue from several key customers constitutes a significant portion of the group's total revenue, and failure to maintain business relationships or secure sufficient new business could adversely affect the group's operational and financial performance[57]. - The top five customers accounted for approximately 95.8% of the total revenue, with the largest single customer contributing 56.3%[130]. - The top five suppliers represented about 56.1% of total purchases, with the largest single supplier accounting for 17.1%[131]. Shareholder Returns - The board proposed a final dividend of HKD 0.014 per share for the fiscal year 2019, reflecting the company's commitment to returning value to shareholders[13]. - The company reported a proposed final dividend of HKD 1.4 per share, totaling HKD 14 million, with a dividend payout ratio of approximately 53.1%[97]. - As of December 31, 2019, the company's available distributable reserves amounted to HKD 164.3 million[106]. Training and Development - The company recognizes the importance of training and development for employee satisfaction and business growth[196]. - External training programs are provided based on employees' professional development needs, including courses from recognized institutions[198]. - The company has established a policy to reimburse employees for external training and education course fees upon completion[198].

Financial Performance - The group's revenue decreased by approximately HKD 35.6 million or 21.3% to about HKD 131.4 million compared to the previous period's revenue of approximately HKD 167.0 million[13]. - Gross profit decreased by approximately HKD 1.1 million or 2.9% to about HKD 36.9 million, while the gross profit margin increased from approximately 22.7% to 28.1%[14]. - Profit for the period decreased by approximately HKD 1.4 million or 7.0% to about HKD 18.6 million, primarily due to the previously mentioned decline in gross profit[16]. - Revenue for the six months ended June 30, 2019, was HKD 131,411 thousand, a decrease of 21.3% compared to HKD 166,974 thousand in 2018[48]. - Gross profit for the same period was HKD 36,885 thousand, slightly down from HKD 37,971 thousand, resulting in a gross margin of 28.1%[48]. - Profit before tax decreased to HKD 22,180 thousand from HKD 23,879 thousand, reflecting a decline of 7.1%[48]. - Net profit for the period was HKD 18,584 thousand, down from HKD 20,029 thousand, representing a decrease of 7.2%[48]. - Basic and diluted earnings per share were both HKD 1.9, compared to HKD 2.0 in the previous year[48]. - Cash generated from operating activities was HKD 34,829 thousand, a slight decrease from HKD 35,507 thousand in 2018[57]. Assets and Liabilities - As of June 30, 2019, the group's bank borrowings were approximately HKD 3.0 million, a decrease of about HKD 5.2 million from approximately HKD 8.2 million as of December 31, 2018[19]. - The group's cash and cash equivalents increased by HKD 29.0 million to approximately HKD 125.6 million compared to approximately HKD 96.6 million as of December 31, 2018[20]. - The asset-to-liability ratio as of June 30, 2019, was 1.37%, down from 3.76% as of December 31, 2018, due to the reduction in bank borrowings[20]. - Total assets as of June 30, 2019, were HKD 219,706 thousand, an increase from HKD 219,019 thousand at the end of 2018[50]. - Total equity remained stable at HKD 219,706 thousand, compared to HKD 219,019 thousand in the previous year[50]. - Trade receivables as of June 30, 2019, amounted to HKD 43,075,000, a decrease from HKD 77,679,000 as of December 31, 2018, reflecting a reduction of approximately 44.5%[106]. - Contract assets as of June 30, 2019, were HKD 88,916,000, compared to HKD 87,891,000 as of December 31, 2018, showing a slight increase of about 1.2%[103]. - The group’s warranty provision as of June 30, 2019, was HKD 1,265,000,000, down from HKD 1,424,000,000 as of December 31, 2018, indicating a decrease of about 11.1%[103]. - The group’s contract liabilities as of June 30, 2019, were HKD 11,734,000, a decrease from HKD 16,153,000 as of December 31, 2018, reflecting a reduction of approximately 27.5%[103]. Operational Highlights - The group has secured a new contract for platform facade work valued at approximately HKD 305.7 million and is bidding for four large-scale projects with an estimated total contract value exceeding HKD 396.7 million[12]. - The group is optimistic about continued growth in demand for construction projects in both public and private sectors, providing ample opportunities to increase revenue and client base[12]. - The group employed 98 staff as of June 30, 2019, an increase from 97 staff as of June 30, 2018, with total employee benefit expenses of approximately HKD 24.9 million[21]. - Employee benefits expenses, including directors' remuneration, totaled HKD 24,878 million for the six months ended June 30, 2019, slightly up from HKD 24,669 million in 2018[89]. Investments and Capital Expenditure - The company has utilized HKD 48.4 million for expanding its capacity to undertake more design and construction projects[45]. - The company has allocated HKD 16.6 million for expanding its workforce[45]. - The company has invested HKD 5.2 million to enhance operational efficiency and technical capabilities[45]. - The group purchased property, plant, and equipment at a cost of approximately HKD 495,000,000 for the six months ended June 30, 2019, down from HKD 672,000,000 as of December 31, 2018[102]. Compliance and Governance - The company has confirmed compliance with the standards for securities trading by directors during the reporting period[40]. - The company has adopted the corporate governance code and has been in compliance, except for the combined role of the chairman and CEO[39]. - The unaudited interim financial statements are prepared in accordance with Hong Kong Financial Reporting Standards and are not audited by external auditors[61]. - The accounting policies used in the interim financial statements are consistent with those described in the 2018 financial statements[65]. - The group’s audit committee has reviewed the interim financial statements[61]. Shareholder Information - As of June 30, 2019, the company had a total of 750,000,000 shares held by major shareholders, representing 75% ownership[24]. - The issued and paid-up share capital as of June 30, 2019, was HKD 10,000,000, with a total of 1,000,000,000 shares issued[117]. - The company did not report any significant acquisitions or disposals of subsidiaries or associated companies during the period[33]. - The company has not made any significant investments during the period[34]. - The board of directors does not recommend the payment of dividends for the period, considering the overall business performance and financial condition[41]. - The company declared a dividend of HKD 18,000 thousand during the period[55]. - The group did not recommend any interim dividend for the six months ended June 30, 2019, compared to HKD 24,000,000 distributed in the same period of 2018[96]. Related Party Transactions - The company engaged in transactions with related parties, including purchasing materials from Kentan Co., Ltd., amounting to HKD 656,000 in 2018, with no transactions reported for 2019[122].

Financial Performance - The company recorded revenue of approximately HKD 365.4 million for the fiscal year 2018, an increase of about HKD 49.6 million or 15.7% compared to HKD 315.8 million in 2017[15]. - The gross profit decreased to approximately HKD 87.0 million in 2018, down about HKD 12.5 million or 12.6% from approximately HKD 99.5 million in 2017, with a gross margin of 23.8%[20]. - The group recorded a profit of approximately HKD 36.9 million for the fiscal year 2018, a decrease of about HKD 15.4 million or 29.4% compared to approximately HKD 52.3 million in 2017[24]. - Administrative and other operating expenses increased by approximately HKD 12.5 million or 43.3% to about HKD 41.4 million in 2018, primarily due to business expansion[21]. - The company proposed a final dividend of HKD 0.018 per share for the fiscal year 2018[11]. Project Backlog and Bidding - The company has a backlog of key projects with an estimated contract value of approximately HKD 216.7 million as of December 31, 2018[17]. - The company is currently bidding for six large-scale projects with an estimated total contract value exceeding HKD 863.2 million[17]. - The company observed a tightening of client budgets for curtain wall market tenders, but expects an increase in bidding opportunities due to the reconstruction of several commercial buildings[18]. - The company plans to continue focusing on curtain wall projects and seek more opportunities to maintain its competitive advantage[9]. Financial Position and Borrowings - The group’s bank borrowings as of December 31, 2018, were approximately HKD 8.2 million, a decrease of about HKD 11.3 million from approximately HKD 19.5 million as of December 31, 2017[26]. - The group’s cash and cash equivalents as of December 31, 2018, were approximately HKD 96.6 million, a decrease of about HKD 10.0 million from approximately HKD 106.6 million as of December 31, 2017[29]. - The group’s asset-liability ratio as of December 31, 2018, was approximately 0.04 times, down from 0.09 times as of December 31, 2017, mainly due to an increase in total equity and a decrease in bank borrowings[29]. Employee and Operational Metrics - Employee benefits expenses for the fiscal year 2018 totaled approximately HKD 49.6 million, an increase from HKD 43.5 million in 2017, primarily due to business expansion[39]. - The group had 70 employees in Hong Kong and 25 employees in China as of December 31, 2018, compared to 62 and 29 employees respectively in 2017[178]. - The group’s accounts receivable turnover days increased to approximately 63.1 days in 2018 from approximately 45.7 days in 2017[25]. Corporate Governance - The board of directors consists of two executive directors, one non-executive director, and three independent non-executive directors, ensuring strong independence[60]. - The board has adopted the corporate governance code and has complied with it since the fiscal year 2018, except for the separation of roles of chairman and CEO[60]. - The board is responsible for overall strategy and policy formulation, performance evaluation, and management oversight[62]. - The company recognizes that board diversity supports its strategic goals and sustainable development[68]. Environmental and Social Responsibility - The company is committed to minimizing the adverse environmental impacts of its business growth through various environmental protection measures[152]. - The company's greenhouse gas emissions decreased by 4% to 116 tons in 2018, compared to 121 tons in 2017, reflecting a reduction in carbon emissions density by 15.5% per average employee[160]. - The company recycled 620 kg of waste paper in 2018, reducing approximately 3 tons of greenhouse gas emissions[154]. - The company has implemented various energy-saving measures in its offices, including turning off unused lighting and air conditioning[154]. Risk Management - The risk management committee conducted a risk assessment for the fiscal year 2018, identifying major risks and ensuring continuous monitoring and control[77]. - The company has adopted a policy and procedural manual for internal control and risk management compliance across various operations[78]. - The company’s governance report indicates that the board is responsible for assessing the nature and extent of risks associated with its strategic objectives[77]. Community Engagement - The group actively supports employee participation in community activities, including charity fundraising events[180]. - The group has made donations to various charities, including the Rainbow Foundation and the Hong Kong World Vision, to support vulnerable communities in Hong Kong[180]. Compliance and Legal Matters - The group has not encountered any significant violations of employment and labor standards laws during the reporting period[178]. - The company has confirmed compliance with the non-competition commitments made by its controlling shareholder since May 12, 2017[108]. - The group has not found any significant violations related to product liability laws during the reporting period[186].