Financial Performance - Revenue decreased by approximately 12.6% from HKD 132,900,000 for the year ended June 30, 2022, to HKD 116,100,000 for the year ended June 30, 2023, primarily due to intense competition and a reduction in construction orders[15] - Direct costs decreased by approximately 12.1% from HKD 125,200,000 to HKD 110,100,000, aligning with the revenue decline[16] - Gross profit fell by approximately 22.1% from HKD 7,700,000 to HKD 6,000,000, with the gross profit margin decreasing from 5.8% to 5.2%[17] - Administrative expenses decreased by approximately 12.1% from HKD 20,700,000 to HKD 18,200,000, attributed to increased legal fees and reduced director remuneration[18] - Other income shifted from HKD 700,000 in the year ended June 30, 2022, to a loss of HKD 3,600,000 for the year ended June 30, 2023, mainly due to increased provisions for bad debts[19] - Tax expenses decreased by 99.3% from approximately HKD 734,000 to about HKD 5,000, primarily due to a reduction in tax provisions[20] - Loss attributable to owners increased from approximately HKD 12,000,000 to HKD 14,100,000, driven by decreased gross profit and increased bad debts[21] - As of June 30, 2023, the group maintained a strong liquidity position with cash and bank balances of approximately HKD 45,500,000, up from HKD 39,200,000[22] - The group had no interest-bearing borrowings as of June 30, 2023, compared to approximately HKD 5,000,000 as of June 30, 2022, resulting in a debt-to-equity ratio of zero[25] Business Strategy and Market Conditions - The group submitted 22 tenders for construction projects, amounting to approximately HKD 1,404,800,000[12] - The group decided to suspend a construction contract in Guangxi Province due to the downturn in the Chinese real estate market[8] - The group aims to explore opportunities in modular integrated construction as an alternative strategy[9] - The group plans to actively pursue new projects in the Northern District of Hong Kong, anticipating an increase in construction project supply[12] - The group is focused on diversifying its business to enhance overall profitability despite challenges in the Chinese market[13] - The group is cautious about participating in low-margin tenders due to rising interest rates and strict stamp duty policies affecting the local real estate market[12] - The group recognizes the impact of geopolitical tensions and rising interest rates on the overall economic environment[8] - The group remains optimistic about future opportunities despite the competitive landscape in the construction industry[9] Corporate Governance - The company has maintained compliance with significant laws and regulations affecting its operations during the fiscal year[42] - The company has established a compliance manual applicable to directors and employees to uphold ethical standards[64] - The board consists of six members, including three executive directors and three independent non-executive directors, ensuring strong independent oversight[64] - The independent non-executive directors have confirmed their independence as per GEM listing rules, ensuring unbiased judgment in board decisions[66] - The company is committed to enhancing accountability and transparency to protect shareholder interests and create value[60] - The board is responsible for formulating the overall strategy and monitoring management performance[63] - The company has established three functional committees to assist the board in fulfilling its duties, including the audit committee, remuneration committee, and nomination committee[76] - The audit committee is responsible for reviewing the integrity of the company's financial statements, including quarterly and annual reports, ensuring compliance with applicable standards[83] - The company has adopted the GEM Listing Rules regarding the code of conduct for securities trading by directors, with full compliance confirmed by all directors for the fiscal year[72] - The company encourages directors to attend training courses to stay updated on corporate governance practices and regulations[73] Risk Management - The company has established a risk management framework consisting of the board of directors, audit committee, and dedicated risk management team to oversee various operational risks[102] - The board has conducted an annual review of the effectiveness of the risk management and internal control systems, confirming their adequacy and effectiveness[103] - The company has adopted risk management policies to identify, assess, and manage significant risks, with a dedicated team evaluating risks at least annually[105] - The risk management and internal control systems are designed to manage risks rather than eliminate them, providing reasonable assurance against material misstatements[105] - The company faces credit risk from clients, which could adversely affect its liquidity if clients fail to pay on time[39] Environmental, Social, and Governance (ESG) - The company is committed to minimizing adverse environmental impacts from its operations, adhering to various environmental regulations in Hong Kong[135] - The company has established an environmental, social, and governance (ESG) team to implement its ESG strategy effectively, with regular reviews by the board[126] - The company has conducted a materiality assessment to identify significant ESG issues, which will be reported in the ESG report[132] - The company emphasizes stakeholder engagement as a key factor in its ESG strategy, utilizing various communication channels[131] - The company has not reported any significant violations of environmental laws and regulations during the reporting period[135] - The company aims to reduce emissions through sustainable construction practices and encourages subcontractors to comply with its environmental management plan[135] - The company has implemented internal controls to manage and mitigate significant ESG risks identified by its ESG team and board[127] - The company’s major ESG issues include emissions management, employee welfare, and community investment[134] - The company aims to reduce greenhouse gas emissions by 2-3% in the coming year[137] - Nitrogen oxides emissions decreased from 0.74 kg in 2022 to 0.40 kg in 2023, a reduction of approximately 46%[139] - Total greenhouse gas emissions decreased from 36 metric tons CO2 equivalent in 2022 to 33 metric tons CO2 equivalent in 2023, a reduction of about 8.3%[143] - The company recycled 4.0 metric tons of paper, reducing greenhouse gas emissions by 19.2 metric tons CO2 equivalent[146] - Non-hazardous waste generated was 1,495 metric tons in 2023, down from 1,654 metric tons in 2022, representing a reduction of over 9%[149] - Electricity consumption decreased from 39,888 kWh in 2022 to 36,824 kWh in 2023, a reduction of approximately 7.8%[152] - Water consumption decreased by over 24%, from 483 cubic meters in 2022 to 365 cubic meters in 2023[156] - The company plans to implement energy-saving measures, including using more environmentally friendly appliances and LED lighting[155] - The company has set a target to reduce energy consumption by 2-3% in the upcoming year[155] - The company has effectively managed wastewater discharge by installing adequate drainage systems and sedimentation tanks[140] - The company aims to reduce water consumption by 2% to 3% in the coming year[159] Employee Management and Training - As of the reporting period, the company has 32 full-time employees and 4 part-time employees, showing a decrease in full-time staff from 43 in 2022[165][166] - Employee turnover rate for males is 31%, with 10 departures, while for females it is 7%, with 1 departure[168] - The company has implemented a safety plan to promote occupational health and safety, ensuring compliance with applicable laws and regulations[174] - There were no reported work-related deaths or injuries during the reporting period[175] - The company has received ISO 14001:2004 and OHSAS 18001:2007 certifications for its environmental and occupational health and safety management systems[160] - The company has adopted measures to minimize noise pollution during construction, including regular maintenance of machinery and selection of low-noise equipment[161] - The company is committed to providing a non-discriminatory work environment and supports equal opportunities in all aspects of employment[170] - The company provides competitive compensation and benefits to attract and retain quality employees, including retirement and medical benefits[169] - The number of trained employees in 2023 was 36, down from 47 in 2022, with total training hours decreasing from 137 to 105[178] - The percentage of trained employees remained at 100% for both years, with an average training time of 3 hours per employee in 2023[178] Quality Control and Supply Chain Management - The company has implemented strict monitoring measures for supply chain management, ensuring quality control and compliance with local regulations[182] - All suppliers and subcontractors are required to adhere to local labor laws, with no significant violations reported during the reporting period[181] - The company emphasizes the importance of quality control, believing it directly impacts financial performance and customer satisfaction[186] - The quality management system is certified according to ISO 9001:2008 standards, focusing on sustainable performance and continuous improvement[187] - The project management team is responsible for quality control, ensuring projects meet client requirements and legal standards[188] - The company has not reported any significant violations of product and service-related laws during the reporting period[189] - The company has established a list of approved suppliers and subcontractors, regularly updating it to maintain quality and reliability[183] Community Engagement and Donations - The company donated approximately HKD 1,014,700 during the reporting period, compared to HKD 1,248,300 in 2022, indicating a decrease of about 18.7%[196] - The company is committed to developing and implementing sustainable corporate policies in areas such as environmental protection, employee management, and occupational health and safety[194] - The company has implemented appropriate and effective internal controls to prevent and detect fraudulent activities, with all directors and employees receiving anti-corruption training[193]
宏强控股(08262) - 2023 - 年度财报