Financial Performance - The total revenue for the year ended December 31, 2018, was HKD 3,087,200,000, an increase of approximately 13% compared to the previous year, primarily due to rising steel prices and higher sales prices of steel products[34]. - The company reported a loss attributable to shareholders of HKD 84,782,000 for the year, mainly due to the downturn in the Hong Kong construction industry, which posed significant challenges to the building materials business[34]. - The metal products segment generated revenue of HKD 1,186,369,000, representing a 17% increase year-on-year, although the segment's profit before interest and tax decreased by approximately 32%[36]. - The revenue for the construction materials business was HKD 1,872,798,000, representing an increase of approximately 11% compared to the previous year, primarily due to rising prices of construction steel products[40]. - The group reported a pre-tax loss of HKD 75,470,000 in the construction materials segment, marking a disappointing performance and the first loss in many years[40]. - The company’s performance was adversely affected by the sluggish construction market in Hong Kong, leading to a disappointing financial year[34]. - The company reported a net loss of HKD 80,021 for the year, compared to a profit of HKD 48,889 in the previous year[185]. - Total comprehensive loss for the year amounted to HKD 102,344, a significant decrease from a comprehensive income of HKD 76,866 in 2017[185]. - The company experienced a net loss before tax of HKD 78,195,000 for the year, compared to a profit of HKD 69,168,000 in the previous year[199]. Dividends and Equity - The company plans to declare a final dividend of HKD 0.02 per share, in addition to an interim dividend of HKD 0.01 per share, totaling HKD 0.03 per share for the year[35]. - The company paid dividends totaling HKD 25,287,000 during the year, consistent with the previous year's dividend payments[191]. - The company’s total equity attributable to shareholders was HKD 934,918,000 as of December 31, 2018, down from HKD 1,057,820,000 at the end of 2017[191]. - The company’s retained earnings decreased to HKD 537,607,000 from HKD 651,592,000, indicating a decline in profitability[191]. Assets and Liabilities - Total assets as of December 31, 2018, were HKD 2,206,830,000, while total liabilities were HKD 1,221,081,000, resulting in net assets of HKD 985,749,000[9]. - The total borrowings of the group as of December 31, 2018, amounted to HKD 1,024,098,000, an increase from HKD 848,935,000 as of December 31, 2017[43]. - The net asset to debt ratio was 0.67:1 as of December 31, 2018, compared to 0.42:1 the previous year, indicating a deterioration in financial leverage[43]. - The current ratio of the group as of December 31, 2018, was 1.37:1, down from 1.46:1 the previous year, indicating a slight decline in short-term liquidity[42]. Governance and Compliance - The company has maintained compliance with the corporate governance code as per the Hong Kong Stock Exchange's listing rules for the year ending December 31, 2018[56]. - The board consists of four executive directors and three independent non-executive directors, ensuring a diverse governance structure[62]. - The roles of chairman and CEO are currently held by the same individual, Mr. Peng Dezhong, which the board believes provides strong and effective leadership[70]. - All independent non-executive directors have confirmed their independence according to the listing rules, ensuring unbiased oversight[62]. - The company has adopted a code of conduct for directors' securities transactions, adhering to the standards set forth in the listing rules[57]. - The board is collectively responsible for reviewing the structure and composition of the board to ensure it meets the company's needs[56]. - The company has arranged for directors and senior management to have liability insurance, providing additional protection[63]. - The audit committee reviewed the group's financial reports and internal control systems, meeting at least twice a year[82]. - The board is responsible for maintaining an effective internal control and risk management system[88]. Environmental Performance - Total direct and indirect carbon emissions for the fiscal year 2018 amounted to 2,882 tons of CO2 equivalent, a reduction of 17.5% compared to 2017[120]. - The emissions per production unit for direct and indirect carbon emissions (Scope 1 and 2) totaled 0.0115 tons of CO2 equivalent, up from 0.0086 tons in 2017[120]. - Nitrogen oxides (NOx) emissions were recorded at 4.63 tons, a decrease of 10% from the previous year[120]. - Sulfur oxides (SOx) emissions were 11.34 kilograms, down 12.8% compared to last year[120]. - Particulate matter (PM) emissions totaled 333.23 kilograms, reflecting a 10% reduction from 2017[120]. - The company is committed to maintaining high standards of environmental management and continuously improving its environmental performance[119]. - The company has adopted various practices to address environmental issues, including investing in facilities equipped with the latest technology to reduce energy consumption and gas emissions[119]. Community Engagement - The company actively supports community activities and has donated HKD 500,000 to the North District Football Recreation Association, becoming a major sponsor for their football team[109]. - The total charitable donations made by the group during the year amounted to HKD 559,000[144]. Operational Challenges - The company faced significant cost increases in raw materials and environmental fees, which could not be passed on to customers, impacting profit margins[36]. - The construction materials business experienced pressure and challenges, leading to disappointing performance during the year[34]. - The group's construction materials business performance is influenced by the overall operating environment of the construction industry in Hong Kong, amid economic slowdown and commodity price fluctuations in mainland China[89]. - The group closely monitors and implements stringent procurement measures for raw materials and components, as inventory valuation is affected by raw material price volatility[90]. Audit and Financial Reporting - The company’s independent auditor, Deloitte, has issued an unqualified opinion on the consolidated financial statements for the year ended December 31, 2018[158]. - The independent auditor confirmed that the ongoing related party transactions were conducted in the ordinary course of business and on normal commercial terms[154]. - The expected credit loss for trade receivables is identified as a key audit matter due to significant management judgment involved[162]. - The audit identified inventory write-downs as a key audit matter due to significant management judgment involved[167].
高力集团(01118) - 2018 - 年度财报