Financial Performance - The company's revenue for the fiscal year ending March 31, 2024, increased to approximately HKD 333.4 million, representing a stable growth of 6.6% compared to HKD 312.9 million in the previous year[10]. - Net profit for the fiscal year was approximately HKD 39.5 million, a significant increase from HKD 18.9 million in the previous fiscal year[5]. - Gross profit rose to approximately HKD 60.8 million, an increase of about 147.4% compared to the previous year's gross profit[13]. - The gross profit margin improved to approximately 18.2%, up by 10.3 percentage points from 7.9% in the previous year[13]. - Other income and gains for the year amounted to approximately HKD 4.4 million, an increase of about HKD 2.5 million or 135.4% compared to the same period last year[16]. - Administrative and other operating expenses were approximately HKD 22.4 million, an increase of about HKD 0.1 million or 0.3% compared to the same period last year[17]. - As of March 31, 2024, the total bank balance was approximately HKD 93.4 million, compared to approximately HKD 45.0 million as of March 31, 2023[22]. - The group had no outstanding debts as of March 31, 2024 and March 31, 2023[23]. - Capital expenditure for the year was approximately HKD 2.6 million for the purchase of properties, plants, and equipment, funded entirely by internal resources[29]. - The total amount of corporate indemnity guarantees provided was approximately HKD 19.0 million as of March 31, 2024, compared to approximately HKD 9.8 million as of March 31, 2023[33]. - Total salary costs for the year were approximately HKD 33.2 million, compared to approximately HKD 34.3 million for the previous year[42]. - As of March 31, 2024, the company’s distributable reserves are approximately HKD 30 million[193]. - The board has decided not to recommend any final dividend for the review year[194]. Operational Challenges - The company anticipates challenges in the foundation industry due to fierce competition and a decline in consumer property purchasing intent[6]. - Management plans to adjust bidding strategies to maintain competitiveness amid increasing price competition[11]. - The company expects to benefit from the Hong Kong government's measures to stimulate residential property demand, including the cancellation of cooling measures and the introduction of a talent admission scheme[11]. - Approximately HKD 23.6 million has been set aside for compensation related to delays in complex foundation projects, impacting gross and net profits[5]. - The future development of the foundation industry is contingent on the Hong Kong property market, which poses significant risks to the group's business[178]. - Compliance risks arise from the nature of the foundation industry, with potential changes in regulations impacting operational costs and business performance[179]. - The company reported a significant risk related to unpredictable geological conditions that may lead to increased costs and project difficulties[180]. - The company faces potential liabilities for damages to underground utility services during foundation works, which may not be covered by insurance[182]. - The company does not guarantee the acquisition of new business due to the absence of long-term agreements with clients, which may lead to significant impacts on its financial condition[183]. Corporate Governance - The company is committed to maintaining good corporate governance to protect shareholder interests and maximize shareholder value[56]. - The board regularly reviews the company's daily corporate governance practices and procedures to ensure compliance with relevant laws and regulations[56]. - The company has adopted the corporate governance code principles as outlined in the Hong Kong Stock Exchange Listing Rules[57]. - The board has established the company's mission and values, integrating environmental protection, social responsibility, and sustainable growth into its business strategy[58]. - The company emphasizes a strong corporate culture to guide employee behavior and ensure alignment with its mission and values[58]. - The board consists of six members, including three executive directors and three independent non-executive directors[60]. - The chairman of the board is Mr. Huang Renxiong, who is also the father of Mr. Huang Yibang[60]. - The company has a dedicated company secretary with over 20 years of experience in auditing and accounting[53]. - The company has implemented a standard code of conduct for directors regarding securities trading, ensuring compliance throughout the review period[59]. - The company has a technical director with over 40 years of experience in the construction industry, overseeing foundation engineering[52]. - The board currently consists of 6 male directors, with no female members, and plans to add one female director by December 2024 to enhance diversity[64]. - The company has established a formal and transparent policy to prohibit all forms of bribery and corruption, ensuring compliance with local laws and regulations[66]. - The board's dividend policy considers factors such as the group's operating performance, cash flow, and future capital requirements when determining dividend frequency and amount[66]. - The company has three independent non-executive directors, accounting for over one-third of the board, ensuring compliance with listing rules[70]. - The nomination committee will continue to monitor and review the implementation of the board diversity policy and propose amendments for consideration[65]. - The board is responsible for the overall management of the group, while daily operations are delegated to the management team led by the CEO[72]. - The company emphasizes the importance of gender diversity in hiring senior management and aims to build a pipeline of potential female successors for the board[64]. - The board's diversity policy includes considerations of gender, age, cultural background, and professional experience when selecting candidates[65]. - The company has a formal process for the nomination and selection of directors, ensuring adherence to the company's articles of association and relevant regulations[67]. - The board of directors held five meetings during the review year, with all members attending all meetings[85]. - The audit committee, consisting of three independent non-executive directors, reviewed the group's financial statements and confirmed compliance with applicable accounting standards[89]. - The audit committee held two meetings during the review year, with full attendance from all members[90]. - The company arranged appropriate insurance for all directors in relation to their duties[75]. - The company provided internal training for directors to enhance their knowledge and skills, covering relevant laws and regulations[77]. - The company conducted its annual general meeting on September 7, 2023, with all board members and external auditors present[83]. - The board of directors is responsible for approving major policies, financial statements, and capital expenditures[75]. - The company has established three board committees: the audit committee, nomination committee, and remuneration committee to oversee specific matters[86]. - The company has a clear board meeting procedure, with regular meetings held at least four times a year[79]. - The company has ensured that all directors have dedicated sufficient time and attention to the group's affairs during the review year[81]. - The Nomination Committee held two meetings during the review year, with all members attending both sessions[94]. - The Compensation Committee reviewed the overall compensation policy for all directors and senior management, ensuring it reflects performance and achievements[97]. - The range of senior management compensation during the review year included one individual earning between HKD 1,000,001 and HKD 1,500,000[98]. - The Group paid HKD 760,000 for audit services and HKD 120,000 for non-audit services during the review year[102]. - The Board confirmed its responsibility for risk management and internal control systems, assessing their effectiveness regularly[103]. - The Group employs a "three lines of defense" model for risk management, ensuring effective identification and mitigation of risks[103]. - The Group has established guidelines for approving and controlling expenditures to ensure financial reporting reliability and operational efficiency[104]. - The Nomination Committee reviewed the diversity and independence of board members and made recommendations for re-election of retiring directors[94]. - The Compensation Committee's recommendations are based on comparisons with similar-sized companies in the industry[97]. - The Group's internal control policies aim to identify and manage risks that could adversely affect business objectives[104]. - The company has established a whistleblowing procedure to allow employees to report concerns regarding financial reporting, internal controls, or potential violations confidentially[105]. - The board has appointed a company secretary, who has completed no less than 15 hours of professional training during the review year to enhance skills and knowledge[107]. - All shares of the company have the same voting rights and entitlement to dividends, as stated in the company's articles of association and the Cayman Islands Companies Law[108]. - The company has implemented a policy to ensure insider information is disclosed fairly and timely in accordance with applicable laws and regulations[106]. - The annual general meeting is scheduled for September 13, 2024, with a notice to be sent to shareholders at least 21 days prior to the meeting[116]. Environmental and Social Responsibility - The company aims to control energy consumption and waste emissions on construction sites while ensuring worker safety as part of its sustainability goals[121]. - The total energy consumption for the fiscal year 2024 was 237,067 kWh, an increase from 186,480 kWh in 2023, representing a 27% rise[135]. - The total greenhouse gas emissions equivalent to CO2 for fiscal year 2024 was 1,136 tons, up from 1,042 tons in 2023, indicating an increase of approximately 9%[135]. - Direct greenhouse gas emissions for fiscal year 2024 were 117 tons, compared to 97 tons in 2023, reflecting a 21% increase[135]. - The company reported a total water consumption of 18,848 cubic meters in 2024, which is a significant increase from 9,994 cubic meters in 2023, marking an 88% rise[135]. - The nitrogen oxides emissions were recorded at 404 kg in 2024, slightly down from 409 kg in 2023, showing a marginal decrease of about 1%[135]. - The company aims to reduce carbon emissions and enhance energy efficiency as part of its environmental policy[128]. - The company is committed to minimizing environmental impact while maintaining high-quality standards in service delivery[127]. - The company has established internal policies to comply with various environmental regulations in Hong Kong, including the Air Pollution Control Ordinance and Waste Disposal Ordinance[127]. - The company encourages stakeholder feedback to improve internal policies and operations, demonstrating a commitment to continuous improvement[125]. - The company emphasizes the importance of community engagement and pollution control as part of its corporate social responsibility initiatives[126]. - The total construction waste generated by the group increased significantly to 158,504 tons in the fiscal year 2024, compared to 91,321 tons in 2023, resulting in a waste density of 475 tons per million sales[138]. - The group reported a substantial increase in inert construction waste disposed of at public fill reception facilities, rising to 156,671 tons in 2024 from 91,032 tons in 2023[138]. - The company has complied with mandatory disclosure requirements regarding environmental, social, and governance (ESG) matters[164]. - The company reported compliance with key performance indicators related to resource usage and emissions[165]. - The company has established policies to reduce significant impacts on the environment and natural resources[167]. - The company has taken actions to manage significant climate-related issues that may affect its operations[167]. - The company has adhered to employment and labor standards, including policies on equal opportunities and non-discrimination[167]. - The company has reported on employee turnover rates categorized by gender, age group, and region[167]. - The company has implemented waste management strategies and set waste reduction targets[165]. - The company has disclosed its greenhouse gas emissions data and management strategies[165]. - The group has complied with safety work environment policies and regulations to protect employees from occupational hazards[169]. - The percentage of trained employees is categorized by gender and employee type, ensuring compliance with training policies[171]. - The group has implemented measures to prevent child labor and forced labor, adhering to relevant laws and regulations[171]. - The number of suppliers is categorized by region, demonstrating effective supply chain management practices[171]. - The group has reported on the number of product complaints and the corresponding response methods, ensuring product responsibility[173]. - The company recognizes the importance of community support and aims to improve the welfare of local disadvantaged groups through donations and assistance[121]. - The company donated HKD 38,000 to support organizations for children with rare diseases in September 2023[162]. - In February 2024, the company contributed HKD 10,000 to visit the Caritas Yuen Long Elderly Community Center, focusing on the mental and physical health of elderly residents[162]. - The group has not reported any incidents related to child labor or forced labor during the review period[139]. - The group provides various types of leave and benefits to ensure employee welfare and work-life balance[140]. - In the fiscal year 2024, the company recorded three work-related accidents, resulting in a total of 358 lost workdays for internal workers and 136 lost workdays for subcontractor workers[145]. - The average training hours per employee in fiscal year 2024 were 12.9 hours, with 85% of employees completing training, compared to 11.3 hours and 90% in fiscal year 2023[147]. - The company emphasizes a fair and competitive career development environment, ensuring performance evaluations are unbiased and based solely on talent[149]. - All 180 major suppliers in Hong Kong had no violations or significant threats to the environment during the review year[153]. - The company conducted seven anti-corruption training sessions with a total of four participants, and there were no corruption lawsuits or reports received during the review year[161]. - The company has implemented an environmental management system certified to ISO 14001:2015 standards to ensure compliance with environmental regulations[184]. - The company emphasizes the importance of employee welfare and offers competitive compensation and training opportunities to retain talent[188]. - The company aims to reduce reliance on major clients by undertaking larger projects with a diverse client base[189]. - The company maintains stable relationships with suppliers and subcontractors to effectively meet client needs[190].
汛和集团(01591) - 2024 - 年度财报