Financial Performance - The Group's total revenue for the year ended March 31, 2021, was approximately HK$922.9 million, an increase of approximately 81.2% compared to HK$509.3 million in the previous year[11]. - The Group experienced a gross loss of HK$13.3 million, compared to a gross profit of HK$5.2 million in the previous year, primarily due to intensified market competition and COVID-19-related project delays[11]. - Despite an increase in revenue, the Group recorded a gross loss due to increased direct costs amid the COVID-19 pandemic[28]. - The gross loss for the Review Year was approximately HK$13.3 million, compared to a gross profit of approximately HK$5.2 million for the previous year, resulting in a gross loss margin of approximately 1.4%[34]. - The net loss for the Review Year was approximately HK$20.1 million, with a net loss margin of approximately 2.2%, improved from a margin of approximately 3.9% in the previous year[43]. - The net profit margin improved to approximately negative 2.2% as at 31 March 2021, from negative 3.9% as at 31 March 2020, primarily due to an increase in revenue[58]. Market Conditions - The total gross value of construction works performed by main contractors in Hong Kong decreased by approximately 2.8% in nominal terms to approximately HK$229.9 billion in 2020[11]. - The construction industry is facing challenges such as skilled labor shortages and rising labor costs, which are expected to continue even after COVID-19 restrictions are lifted[13]. - The overall sentiment in the construction industry remains pessimistic, with players expected to stay prudent in their business decisions[22]. - The construction industry remains cautious due to ongoing competition, skilled labor shortages, and rising labor costs[17]. Business Strategy - The Group plans to explore business opportunities and expand its geographical coverage beyond the Hong Kong market to enhance future development and strengthen revenue bases[14]. - The Group aims to leverage its competitive strengths and established long-term relationships with customers to navigate the challenging market environment[14]. - The Group aims to diversify its business and expand its geographical coverage beyond the Hong Kong market to enhance its revenue base[17]. - The Group continues to leverage its competitive advantages in foundation engineering and long-term client relationships to explore new business opportunities[17]. - The Group aims to reduce reliance on major customers by undertaking larger projects for a broader customer base[87]. Operational Challenges - Government subsidies have provided relief for businesses and individuals in the construction industry, contributing to a hopeful outlook for recovery[13]. - The Group acknowledges the importance of maintaining productivity and performance despite ongoing challenges faced by the industry[15]. - Uncertainties in construction progress may arise from unexpected geological conditions, leading to potential cost overruns[65]. - The company’s financial position may be adversely affected by significant unexpected geological or subsoil conditions during foundation works[65]. Financial Management - Direct costs rose by approximately HK$432.1 million, or approximately 85.7%, from approximately HK$504.1 million to approximately HK$936.2 million[33]. - The current ratio increased from approximately 3.6 times as at 31 March 2020 to approximately 5.1 times as at 31 March 2021, primarily due to a decrease in trade and other payables[50]. - The gearing ratio decreased from approximately 7.0% as at 31 March 2020 to approximately 5.1% as at 31 March 2021, mainly due to a reduction in bank borrowings[50]. - The Group has adopted a prudent financial management approach towards its treasury policy, closely monitoring liquidity to meet funding requirements[94]. Human Resources - As of 31 March 2021, the Company employed 335 full-time employees, a decrease from 426 employees as of 31 March 2020[114]. - Total staff costs for the Review Year were approximately HK$171.9 million, compared to approximately HK$120.3 million for the year ended 31 March 2020, reflecting a 43% increase[114]. - The remuneration packages for employees include salary, discretionary bonuses, and other cash subsidies, with an annual review system in place[114]. - The Group recognizes the importance of maintaining competitive remuneration packages to attract and retain skilled labor in the construction industry[86]. Corporate Governance - The Group has adopted the corporate governance code contained in Appendix 14 to the Listing Rules to enhance accountability and safeguard shareholder interests[164]. - The Board consists of six members, including two executive Directors and four independent non-executive Directors, ensuring a balanced composition[169]. - The Company has confirmed compliance with the Model Code for Securities Transactions by Directors during the reporting period[168]. - The Company reviews its corporate governance policies annually and complies with the "comply or explain" principle in its corporate governance report[197]. Environmental Management - The Group has established an environmental management system certified to ISO 14001:2015 standards to minimize adverse environmental impacts from operations[79]. - The Group plans to acquire more environmentally friendly machinery to comply with the NRMM Regulation and adapt to industry changes[80]. - The Group's operations may result in emissions and waste, subjecting them to various environmental protection laws and regulations[77].
龙昇集团控股(06829) - 2021 - 年度财报