Financial Performance - The company recorded a total loss of HKD 50 million from three contracts due to project delays and disputes with subcontractors[9]. - The company plans to liquidate its investments in the Philippines, resulting in a sale generating approximately HKD 109 million after direct taxes, with a total loss of HKD 50.8 million recorded for the fiscal year[12]. - The total revenue from engineering contracts in mainland China, the Philippines, and Malaysia amounted to HKD 320 million, with a total profit of HKD 11 million[13]. - The revenue for the construction and property development segment was approximately HKD 582.4 million, an increase of 10.0% from HKD 529.5 million in the previous year[43]. - The segment's revenue increase was primarily due to a one-time sale of a property in the Philippines, generating a net income of HKD 109 million; excluding this, revenue decreased by HKD 56.1 million[43]. - Revenue from road engineering contracts decreased significantly by 52.6%, from HKD 234.8 million to HKD 111.2 million, mainly due to the completion of contracts NE201605 and DC201810[44]. - The revenue from the Malaysia construction segment increased by HKD 194.1 million, while the Philippines construction segment contributed HKD 40.6 million[47]. - The gross loss for the construction and property development segment was approximately HKD 118.3 million, a significant increase from HKD 31.7 million in the previous year[48]. - The company recorded a gross loss of HKD 74.7 million in road engineering and landslide prevention services due to project delays and additional costs incurred[51]. - The revenue from trade business was approximately HKD 72.1 million, a decrease from HKD 94.6 million in the previous year[53]. - The net impairment loss of financial and contract assets for the reporting year was approximately HKD 3.4 million, a decrease from HKD 35.1 million in 2023[56]. - Impairment of properties, plants, and equipment amounted to HKD 4.5 million due to a decline in real estate market prices, compared to no impairment in 2023[58]. - Other income for the reporting year was approximately HKD 9 million, down from HKD 12.8 million in 2023, primarily due to the absence of government subsidies recorded in the previous year[59]. - Administrative expenses increased by approximately HKD 13.5 million to a total of HKD 54.8 million, driven by a rise in employee costs of about HKD 9.3 million[61]. - Financial costs for the reporting year were approximately HKD 17.4 million, up from HKD 9.2 million in 2023, mainly due to costs associated with property development in the Philippines[64]. - The group's current assets net value as of March 31, 2024, was approximately HKD 77.6 million, down from HKD 282.6 million in 2023, with a current ratio of 1.15 compared to 1.58 in 2023[66]. - The debt-to-equity ratio as of March 31, 2024, was approximately 72.8%, an increase from 54.8% in 2023[66]. - The group had no significant capital commitments as of March 31, 2024, consistent with the previous year[68]. - The company’s financial performance details are available in the audited consolidated financial statements[167]. Project Management and Operations - The company has allocated additional resources to expedite contract progress in response to government pressures[8]. - The ongoing geopolitical tensions and rising financial costs have created significant challenges for the company's property development projects in the Philippines[12]. - The company is actively engaging with the government to explore feasible solutions for contract issues[9]. - The company faced intensified competition in the Hong Kong civil engineering construction market, leading to suppressed contract prices and challenges in bidding[8]. - The company successfully secured new engineering and pipeline contracts in Malaysia valued at approximately HKD 187.8 million during the fiscal year[13]. - The company successfully secured construction contracts in mainland China, the Philippines, and Malaysia during the reporting year[36]. - As of March 31, 2024, the total contract amount for ongoing projects is HKD 1,063.4 million, with cumulative revenue recognized at HKD 946.8 million[37]. - The expected completion date for the Kai Tak Development Phase 4 infrastructure project is December 13, 2017, with a contract value of HKD 1,038.3 million and recognized revenue of HKD 938.8 million[37]. - The slope repair and improvement project in Area A has a contract value of HKD 25.1 million, with recognized revenue of HKD 8.0 million and expected completion by January 9, 2025[37]. - The company is listed as an approved contractor for various public works projects in Hong Kong, including waterworks and road engineering services[35]. - The management team includes experienced professionals with over 20 years in the industry, enhancing the company's operational capabilities[30][31]. - The company aims to expand its market presence through strategic partnerships and new project acquisitions in the region[36]. - The management is focused on enhancing operational efficiency and exploring new technologies to improve service delivery[36]. - The company has a strong pipeline of projects, indicating a positive outlook for future revenue growth[36]. - The company has submitted applications for further extensions on project completion dates, which are currently under consideration by clients[40]. Corporate Governance - The board of directors consists of six members, including three executive directors and three independent non-executive directors, ensuring a balanced representation to protect shareholder interests[91]. - The company aims to enhance its corporate governance practices to comply with the corporate governance code[89]. - The board has adopted a diversity policy, considering various measurable aspects such as gender, age, cultural background, and professional experience in its member selection process[100]. - The company plans to appoint at least one female director to the board by December 31, 2024, to improve gender diversity[101]. - Approximately 22% of the company's employees are female, indicating a commitment to increasing female representation in the workforce[101]. - The board meets at least four times a year, although only two regular meetings were held in the reporting year, with management providing updates through electronic communication[88]. - The company has established a code of conduct for securities trading by directors, ensuring compliance with listing rules[90]. - The board is responsible for the overall management of the company's business and is supported by executive directors and senior management in fulfilling its duties[94]. - The nomination committee is tasked with monitoring the implementation of the board diversity policy and will review it periodically to ensure effectiveness[100]. - The company emphasizes the importance of continuous professional development for directors and senior management to enhance governance practices[94]. - The company held two regular board meetings and various committee meetings during the reporting year[104]. - All executive directors have service contracts effective for an initial term of three years[108]. - Independent non-executive directors are required to rotate and seek re-election every three years[111]. - The board has established four committees: Audit, Remuneration, Nomination, and Risk Management[117]. - Each committee has a written terms of reference available on the stock exchange and the company's website[117]. - The company provides training for new directors to ensure understanding of business operations and regulatory responsibilities[113]. - All directors participated in training on corporate governance and regulatory requirements[117]. - The company has purchased liability insurance for directors and key personnel[112]. - The board ensures timely provision of meeting records containing all necessary information for informed decision-making[107]. - The company secretary is responsible for maintaining records of all board and committee meetings[104]. Risk Management - The Audit Committee reviewed the consolidated financial statements for the reporting year and confirmed compliance with applicable accounting standards and listing rules[121]. - The Compensation Committee assessed the remuneration of directors and senior management, finding it fair and reasonable, with three members earning between HKD 1,000,001 and HKD 1,500,000, and two members earning between HKD 1,500,001 and HKD 2,000,000[131]. - The Risk Management Committee held a meeting to discuss the 2023 risk management report and updated key risk indicators for 2024[129]. - The company has established a risk management framework that includes participation from the Board, Audit Committee, and Risk Management Committee[136]. - The Board is responsible for maintaining and annually reviewing the effectiveness of the risk management and internal control systems[133]. - The company has no significant uncertainties regarding its ability to continue as a going concern as of March 31, 2024[132]. - The Audit Committee consists of three independent non-executive directors, ensuring independence and objectivity in the audit process[121]. - The company has a structured process for identifying, assessing, and managing significant risks, which is continuously implemented[137]. - The Nomination Committee evaluates the structure and diversity of the Board, considering factors such as gender, age, and professional experience[127]. - The company has established a policy for handling and disclosing inside information, ensuring confidentiality and compliance[137]. - The company has engaged an independent advisory firm to conduct internal audits, assessing key risks and internal controls, with results submitted to senior management and the audit committee[140]. - The audit fees for the year ending March 31, 2024, amounted to approximately HKD 1,400,000, with HKD 1,200,000 for audit services and HKD 200,000 for other services[142]. - The board has conducted a comprehensive review of the risk management and internal control systems, concluding that they are effective and sufficient for the year[145]. Shareholder Communication and Dividend Policy - The company aims to balance dividend distribution and retention of sufficient liquidity to meet operational needs and seize future growth opportunities[147]. - The board will review the dividend policy periodically and has the discretion to update or modify it as deemed appropriate[149]. - The company has implemented various channels for communication with shareholders and investors, ensuring effective engagement[156]. - The board confirmed the effectiveness and adequacy of the risk management and internal control systems through an annual review, including changes in significant risks since the last review[141]. - The company encourages environmental protection measures among employees and has implemented practices to reduce energy consumption[156]. - The company has established a policy for shareholder communication, which has been effectively implemented during the reporting year[155]. - The board will consider various factors, including actual earnings performance and capital expenditure needs, when determining dividend amounts[147]. Market and Operational Challenges - Government contracts accounted for approximately 30% of the group's total revenue in the reporting year, down from 48% in 2023[169]. - The group primarily generates revenue from non-recurring projects, with no long-term agreements in place with clients, which may significantly impact future financial performance[172]. - The group did not experience any significant labor shortages or industrial actions during the reporting year, but future construction activities may face challenges in labor availability[173]. - Delays in public project commencement may arise from political disagreements and funding approval issues, potentially affecting operational performance[176]. - The group relies heavily on government contracts, and a significant reduction in such contracts could adversely impact business and profitability[169]. - The group’s main business activities remained unchanged during the reporting year, focusing on water engineering, roadworks, and construction services[166]. - The group has established anti-corruption policies to support compliance with relevant laws and regulations[162]. - The group has implemented a whistleblowing policy to allow employees and stakeholders to raise concerns confidentially[161]. - The company has expanded its business into the Philippines and Malaysia for construction projects and into mainland China for chemical materials trading, facing operational risks in overseas markets[177]. - Revenue from the largest customer accounted for approximately 35% of total revenue in the reporting year, down from 48% in 2023; revenue from the top five customers represented about 82% of total revenue, compared to 84% in 2023[183]. - The sales cost from the top five suppliers constituted about 18% of total sales costs in the reporting year, a decrease from approximately 45% in 2023; the largest supplier accounted for about 6% of total sales costs, down from 30% in 2023[186].
均安控股(01559) - 2024 - 年度财报