Financial Performance - The total revenue for the Group amounted to approximately HK$509.3 million, representing an increase of approximately 11.2% compared to the prior year[12]. - Loss attributable to the owners of the Company was approximately HK$20.1 million, a significant decline from a profit of HK$9.8 million in the prior year[12]. - The gross profit decreased by approximately HK$27.2 million, or 84.0%, from approximately HK$32.4 million to approximately HK$5.2 million, with a gross profit margin of approximately 1.0%[37]. - The direct costs increased by approximately HK$78.3 million, or 18.4%, from approximately HK$425.8 million to approximately HK$504.1 million[36]. - Total comprehensive income decreased by approximately HK$29.9 million or about 305.1%, resulting in a net loss of approximately HK$20.1 million for the review year, with a net loss margin of approximately 3.9%[46]. - Administrative expenses increased by approximately HK$1.8 million or about 9.1% to approximately HK$21.6 million, mainly due to an increase in staff costs[44]. - Finance costs rose by approximately HK$520,000 or about 175.1% to approximately HK$817,000, primarily due to increased bank borrowings[45]. - The current ratio decreased from approximately 7.2 times to approximately 3.6 times, mainly due to an increase in trade and other payables[51]. - The gearing ratio increased from approximately 2.0% to approximately 7.0%, primarily due to increased bank borrowings[51]. - Return on total assets declined from approximately 3.0% to approximately -5.7%, mainly due to the decrease in gross profit[53]. - Return on equity decreased from approximately 3.4% to approximately -7.5%, attributed to the decline in gross profit[54]. - Net profit margin fell from approximately 2.1% to approximately -3.9%, primarily due to the decrease in gross profit[55]. Market Conditions and Opportunities - The Group acknowledges the adverse impact of the COVID-19 pandemic and fierce competition on its financial performance during the Review Year[16]. - The construction industry in Hong Kong is facing a high unemployment rate and increased operational costs due to project delays caused by the pandemic[11]. - The Group recognizes the rising demand for housing and infrastructure in Hong Kong as potential opportunities for business expansion[19]. - The property industry in the Greater Bay Area has been growing favorably, presenting potential expansion opportunities for the Group[17]. - The Group plans to explore business opportunities and expand geographical coverage beyond the Hong Kong market to enhance future development[17]. - Management will continue to monitor developments and prepare the Group to take advantage of emerging opportunities as social and economic conditions improve[17]. - The diversification of the Group's business is anticipated to yield better returns for shareholders[17]. Operational Challenges - The COVID-19 pandemic has led to increased operational costs and reduced profit margins due to project delays and necessary quarantine measures[24]. - The Group's proactive pricing strategy in response to competitive market conditions contributed to the decrease in gross profit margin[37]. - Unexpected geological conditions may lead to additional costs and complexities in foundation works, potentially impacting the Group's financial position[66]. - Damage to underground service utilities during foundation works may result in repair costs that are not covered by insurance[71]. - Compliance risks may arise from changes in laws and regulations, which could increase costs and adversely affect the Group's operations[62]. Corporate Governance - The Group is committed to maintaining good corporate governance to safeguard shareholder interests and maximize shareholder value[165]. - The Company has complied with all code provisions set out in the Corporate Governance Code from the Listing Date to March 31, 2020, except for holding only two regular Board meetings instead of the required four due to social unrest and COVID-19 measures[168]. - The Board consists of five members, including one executive director and four independent non-executive directors, chaired by Mr. Yip[174]. - The Company has adopted the Model Code for Securities Transactions by Directors, and all directors confirmed compliance during the reporting period[169]. - The Company will review its corporate governance policies and compliance with the CG code each financial year[187]. - The Board is responsible for overall management and has delegated day-to-day operations to management under the CEO's leadership[187]. Human Resources - The total staff cost incurred by the Group for the review year was approximately HK$120.3 million, an increase from approximately HK$84.8 million in the year ended March 31, 2019[116]. - The Group employed a total of 426 full-time employees as of March 31, 2020, compared to 210 full-time employees as of March 31, 2019[116]. - The Group maintains a competitive remuneration package to attract and retain skilled labor in the local construction industry[87]. - The Group aims to reduce reliance on major customers by undertaking more sizable projects for other customers[89]. - The Group has developed stable relationships with suppliers and sub-contractors to effectively meet customer needs[94]. Environmental Management - The Group has established an environmental management system in accordance with ISO 14001:2015 standards to minimize adverse environmental impacts from business activities[80]. - The Group plans to purchase more environmentally friendly machines and equipment to comply with the Non-Road Mobile Machinery Regulation[83]. - As of March 31, 2020, the Group had 106 machines regulated under the NRMM Regulation, with 41 machines exempted and 65 machines approved by the Hong Kong Environmental Protection Department[81]. Shareholder Information - The Board resolved not to recommend the declaration of a final dividend for the review year, consistent with the previous year[118]. - The net proceeds received by the Group amounted to approximately HK$91.9 million, intended for enhancing the construction machinery fleet, strengthening the workforce, reinforcing sales and marketing efforts, and funding general working capital[108][109]. - There have been no changes in the directorships of Mr. Lee and Mr. Chan in public companies listed on any securities market in the last three years[158]. - The Company has not disclosed any additional matters that need to be brought to the attention of shareholders[160].
龙昇集团控股(06829) - 2020 - 年度财报