Financial Performance - Revenue decreased by approximately 36.2% from HKD 217.3 million for the year ended June 30, 2020, to HKD 138.7 million for the year ended June 30, 2021, primarily due to a reduction in construction orders and project delays caused by COVID-19[16]. - Direct costs decreased by approximately 29.8% from HKD 196.2 million for the year ended June 30, 2020, to HKD 137.7 million for the year ended June 30, 2021, attributed to reduced revenue and additional follow-up costs during the final completion phase[17]. - The group's gross profit decreased by approximately 95.3% from about HKD 21,100,000 for the year ended June 30, 2020, to about HKD 1,000,000 for the year ended June 30, 2021, with a gross profit margin dropping from approximately 9.7% to 0.7%[18]. - Administrative expenses reduced by approximately 32.5% from about HKD 24,600,000 for the year ended June 30, 2020, to about HKD 16,600,000 for the year ended June 30, 2021, primarily due to decreases in business entertainment, charitable donations, professional fees, and employee costs[19]. - The loss attributable to owners for the year ended June 30, 2021, was approximately HKD 22,500,000, a significant change from a profit of about HKD 2,400,000 for the year ended June 30, 2020[22]. - Cash and bank balances decreased from approximately HKD 131,400,000 as of June 30, 2020, to about HKD 54,800,000 as of June 30, 2021, primarily due to a deposit of HKD 40,000,000 for a construction project and the loss incurred during the year[23]. - The total assets as of June 30, 2021, were approximately HKD 179,500,000, down from about HKD 242,200,000 as of June 30, 2020[23]. - The debt-to-equity ratio increased to approximately 3.9% as of June 30, 2021, from about 3.1% as of June 30, 2020, while maintaining a low level due to sufficient cash and bank balances[24]. Business Operations - The company is currently operating approximately 33 construction projects, with a new project launched during the year and a total of over HKD 360 million confirmed for new property development projects[14]. - The company submitted 58 tenders during the year, with a total value exceeding HKD 5.363 billion, although the win rate remains low due to the need to target projects with reasonable profit margins[14]. - The company has entered into a cooperation agreement with a state-owned enterprise and is in discussions with a Chinese construction company for several projects in China, expecting additional business and profits in the coming years[10]. - The company is exploring new business opportunities through joint ventures and expanding into financial investment, indicating a strategic shift beyond just property construction projects[15]. - The company aims to maintain a low debt level to ensure a stable financial position amid fierce competition and economic uncertainty in the construction market[14]. - The company acknowledges that the performance of the Hong Kong property market will significantly impact future business opportunities[15]. - The company continues to implement business strategies to identify and undertake reasonably profitable projects while balancing risks and returns[10]. Corporate Governance - The board of directors consists of six members, including three executive directors and three independent non-executive directors, ensuring strong independence[66]. - The company held a total of 13 board meetings during the fiscal year ending June 30, 2021[70]. - All independent non-executive directors confirmed their independence according to GEM listing rules, ensuring compliance with governance standards[67]. - The company has adhered to the corporate governance code throughout the fiscal year ending June 30, 2021[63]. - The board is responsible for setting the overall strategy and monitoring management performance, enhancing accountability and transparency[64]. - The company has established a code of conduct and compliance manual applicable to directors and employees[65]. - The board has delegated certain responsibilities to the board committees to improve governance practices[64]. - The company is committed to maintaining high corporate governance standards to protect shareholder interests and create value[61]. - The executive directors attended all board meetings, demonstrating strong engagement and oversight[71]. - The company has adopted the GEM listing rules regarding the conduct of securities transactions by directors, ensuring compliance[73]. - The company provided training courses related to corporate governance, ensuring all directors attended at least one session during the fiscal year ending June 30, 2021[75]. - The Audit Committee held four meetings during the fiscal year, with all members attending all sessions[84]. - The Audit Committee reviewed the unaudited quarterly, interim, and audited annual financial statements of the group[86]. - The Remuneration Committee held two meetings during the fiscal year, reviewing the compensation of individual executive directors and senior management[89]. - The company established three functional committees to assist the board in fulfilling its duties, including the Audit Committee, Remuneration Committee, and Nomination Committee[77]. - The Audit Committee is composed of three members, all of whom are independent non-executive directors, ensuring compliance with GEM listing rules[81]. - The company emphasizes the importance of continuous professional development for directors to maintain effective internal control systems and corporate governance[76]. - The Audit Committee's responsibilities include monitoring the integrity of financial statements and reviewing significant judgments made in financial reporting[82]. - The company has provided sufficient resources and support to all committees to fulfill their duties effectively[78]. - The Remuneration Committee made recommendations to the board regarding the remuneration of executive directors and senior management[89]. - The remuneration for directors is determined based on their service contracts and is recommended by the remuneration committee[91]. - The remuneration committee held 2 meetings during the year ended June 30, 2021, with all members present at each meeting[91]. - The external auditor received HKD 755,000 for statutory audit services for the year ended June 30, 2021[98]. Risk Management and Compliance - The risk management framework includes a dedicated risk management team that identifies and assesses significant risks at least annually[102]. - The board has conducted an annual review of the effectiveness of the risk management and internal control systems[103]. - The company is committed to promptly disclosing inside information to the public while ensuring confidentiality[104]. - The nomination committee held 2 meetings during the year ended June 30, 2021, with all members present at each meeting[96]. - The nomination committee reviewed the board's structure, size, and composition during the year[95]. - The company has established a risk management policy to identify, assess, and manage significant risks[102]. - The board is responsible for overseeing the design, implementation, and overall effectiveness of the risk management and internal control systems[102]. - The board confirmed that the consolidated financial statements for the year ended June 30, 2021, were prepared in accordance with relevant accounting standards and principles[108]. Environmental, Social, and Governance (ESG) Initiatives - The company has established a governance team for environmental, social, and governance (ESG) matters, which is responsible for implementing the ESG strategy[123]. - The company is committed to sustainable development and has implemented internal controls to manage significant ESG risks[124]. - The company has complied with all "comply or explain" provisions of the ESG reporting guidelines[121]. - The company has established a risk management system to identify, assess, and address significant ESG risks[124]. - The company aims to reduce greenhouse gas emissions by 2% to 3% in the coming year[134]. - Total greenhouse gas emissions decreased from 80 metric tons CO2 equivalent in 2020 to 57 metric tons CO2 equivalent in 2021, a reduction of 28.75%[140]. - The company achieved a reduction in nitrogen oxides emissions from 8.52 kg in 2020 to 0.85 kg in 2021, a decrease of 90%[136]. - The company recycled 3.5 metric tons of paper, resulting in a reduction of 16.8 metric tons of CO2 equivalent emissions[143]. - The company reported a decrease in energy indirect emissions from 31 metric tons CO2 equivalent in 2020 to 27 metric tons CO2 equivalent in 2021, a reduction of 12.9%[140]. - The company has implemented various environmental management policies to minimize emissions and ensure compliance with local regulations[132]. - The company has engaged stakeholders through various channels, including internal emails, business meetings, and public consultations[128]. - The company has identified significant environmental, social, and governance issues through stakeholder surveys and assessments[129]. - The company has established a carbon assessment with professional consultants to quantify greenhouse gas emissions[134]. - The company has committed to encouraging green driving practices among employees to reduce vehicle emissions[135]. - The company reduced construction waste by over 59% in 2021, generating 1,673 tons compared to 4,073 tons in 2020, resulting in a density of 34.85 tons per employee in 2021 versus 76.85 tons per employee in 2020[144]. - Electricity consumption decreased to 53,772 kWh (1,120.25 kWh per employee) in 2021 from 60,772 kWh (1,146.64 kWh per employee) in 2020, while gasoline consumption dropped to 1,370 liters (28.54 liters per employee) from 3,002 liters (56.64 liters per employee) in 2020[149]. - Water consumption was reduced by over 13%, with 497 cubic meters (10.35 cubic meters per employee) in 2021 compared to 577 cubic meters (10.89 cubic meters per employee) in 2020[153]. - The company aims to reduce energy consumption by 2-3% in the coming year[152]. - The company has implemented a green management system to improve energy and resource efficiency and enhance employee awareness of resource conservation[148]. - The company is committed to using environmentally friendly materials and methods in its operations, favoring suppliers that provide green materials[148]. - The company has not encountered any issues in sourcing water during the reporting period[154]. Employee Relations and Development - The workforce consisted of 44 full-time and 4 part-time employees at the end of the reporting period, with a gender distribution of 33 males and 15 females[164]. - Employee turnover rate for males increased to 36% in 2021 from 23% in 2020, while for females it decreased slightly to 7% from 8%[167]. - The turnover rate for employees aged 50 and above surged to 47% in 2021, compared to 16% in 2020[167]. - Total training hours for employees reached 140 hours, with 100% of employees receiving training[177]. - Average training hours per employee were 3 hours, with male employees averaging 3 hours and female employees averaging 2 hours[177]. - The company reported zero cases of work-related deaths or injuries during the reporting period[174]. - The company has implemented safety plans and training to ensure compliance with local health and safety regulations[173]. - There were no significant violations of employment laws and regulations during the reporting period[170]. - The company has a strict policy against child labor and forced labor, with no violations reported during the period[181]. - Employee compensation and benefits are reviewed annually based on performance, with competitive packages offered to attract and retain talent[168]. - The company emphasizes continuous training and development to enhance employee performance and loyalty[176]. Community Engagement - The company donated approximately HKD 1,061,800 during the reporting period, compared to HKD 1,036,000 in 2020, reflecting its commitment to community investment[195]. - The company actively engages in community support initiatives, including financial assistance for underprivileged students through the Starry Star Program[194].
宏强控股(08262) - 2021 - 年度财报