Financial Performance - The company's revenue for the year ended December 31, 2018, was approximately HKD 316.6 million, a decrease of 20.3% compared to the previous year[23]. - The total profit and comprehensive income for the year was approximately HKD 12.2 million, which, after excluding one-time listing expenses, amounted to approximately HKD 29.7 million, a decrease of 39.5% year-on-year[23]. - The group's revenue decreased by 20.3% from approximately HKD 397.3 million for the year ended December 31, 2017, to approximately HKD 316.6 million for the year ended December 31, 2018, primarily due to delays in project site deliveries[29]. - Gross profit fell by 25.9% from approximately HKD 58.8 million in 2017 to approximately HKD 43.6 million in 2018, aligning with the revenue decline[30]. - Other income decreased by 67.4% from approximately HKD 4.3 million in 2017 to approximately HKD 1.4 million in 2018, mainly due to a reduction in the number of leased factories and equipment[31]. - The total profit and comprehensive income decreased by 73.2% from approximately HKD 45.6 million in 2017 to approximately HKD 12.2 million in 2018, with a normalized profit of approximately HKD 29.7 million after excluding one-time listing expenses[34]. Project Management - The company was awarded 10 projects during the year with a total initial contract value of approximately HKD 371.6 million, and completed 8 projects with a total initial contract value of approximately HKD 154.8 million[26]. - As of December 31, 2018, the company had 13 ongoing projects with a total initial contract value of approximately HKD 822.1 million, including 11 civil engineering projects and 2 building projects[26]. - The company faced challenges in the construction industry due to project delays, global economic uncertainties, and rising construction costs[23]. - The company remains cautiously optimistic about future business prospects due to ongoing government infrastructure projects and increased land supply policies[23]. - The company aims to maintain its competitive advantage and solidify its market position for long-term sustainable development[23]. Corporate Governance - The company has adopted the corporate governance code as per the Listing Rules Appendix 14, ensuring compliance since the listing date[78]. - The board believes that the dual role of the Chairman and CEO held by Mr. Lo enhances leadership consistency and maximizes strategic planning and execution efficiency[78]. - The company is committed to maintaining high standards of corporate governance to protect shareholder interests and enhance shareholder value[77]. - The company has a diverse board composition, with more independent non-executive directors than executive directors, enhancing board independence[78]. - The board consists of five members, including two executive directors and three independent non-executive directors[80]. Financial Position - The current ratio improved to 2.6 in 2018 from 1.4 in 2017, indicating better liquidity[36]. - The capital debt ratio significantly decreased to 2.0% in 2018 from 37.2% in 2017, reflecting a stronger equity position[40]. - Cash and cash equivalents increased to approximately HKD 42.3 million in 2018 from HKD 27.8 million in 2017, while borrowings decreased to approximately HKD 3.5 million from HKD 28.4 million[38]. - As of December 31, 2018, the company had distributable reserves of approximately HKD 99,688,000[143]. Risk Management - The company faced major risks including the inability to secure new projects, which are essential for maintaining business volume[127]. - Project cost overruns were identified as a risk due to uncontrollable factors such as material shortages and adverse geological conditions[128]. - The company has implemented a risk management and internal control system to manage potential strategic, operational, financial, and compliance risks[119]. Shareholder Relations - The company expresses gratitude to its shareholders, clients, subcontractors, suppliers, and business partners for their support during the year[24]. - The board of directors is committed to maintaining effective communication with shareholders, particularly through annual general meetings[117]. Employee Management - The company employed 125 staff as of December 31, 2018, up from 115 in 2017, with total employee costs rising to approximately HKD 38.3 million from HKD 28.9 million[44]. - The company has provided competitive compensation and development opportunities to attract and retain talented employees[135]. Listing and Capital Structure - The company successfully listed on the Hong Kong Stock Exchange on October 30, 2018, marking a significant milestone in its history[22]. - As of December 31, 2018, the company received net proceeds of approximately HKD 94.2 million from the share sale after deducting listing and related expenses[55]. - The planned use of the net proceeds includes HKD 42.7 million for purchasing plant and equipment, HKD 29.5 million for funding building projects, and HKD 11.1 million for strengthening project management teams[55]. - The company has utilized HKD 52.5 million of the net proceeds, leaving HKD 41.7 million unutilized as of the report date[55]. Audit and Compliance - The independent auditor's report confirms that the consolidated financial statements fairly reflect the group's financial position as of December 31, 2018[190]. - The audit committee reviewed the effectiveness of the internal control system and the independence of the external auditor[105]. - The audit committee held two meetings since the listing date, with all members attending both meetings, and approved a three-year internal audit plan for 2018 to 2020[105]. Environmental and Social Responsibility - The company emphasized the importance of environmental protection and efforts to reduce energy and resource usage[132]. - There were no significant violations of applicable laws and regulations that could materially affect the company's operations during the year[133].
富汇国际集团控股(01034) - 2018 - 年度财报