艾硕控股(08341) - 2020 - 年度财报

Company Information This section provides essential corporate details including board composition, committee structures, registered office, principal business location, auditors, share registrars, and main bankers Chairman's Statement and Management Discussion and Analysis This section presents the Chairman's overview and management's detailed analysis of the Group's business performance, financial results, future outlook, liquidity, and use of capital during the reporting period Business Review The Group primarily engages in fitting-out and renovation projects for new and existing commercial buildings in Hong Kong, achieving HK$199.9 million in total revenue and securing 21 new projects worth HK$184.4 million during the reporting period - The Group's core business involves fitting-out and renovation projects in Hong Kong, serving new commercial and residential developments[15] - Total revenue for the reporting period was approximately HK$199.9 million, with approximately HK$113.5 million (about 56.8%) from new clients, indicating enhanced market development capabilities[15] - During the reporting period, the company submitted tenders worth approximately HK$1.901 billion and successfully secured 21 projects with a total contract value of approximately HK$184.4 million, showing significant year-on-year growth[16] Financial Review The Group's total revenue significantly increased by 124.9% year-on-year to HK$199.9 million, driven by new project revenue recognition, while administrative expenses rose by 57.9% due to resumption-related professional fees and share-based payments, leading to an expanded loss attributable to owners of the company of HK$27.4 million 2020 Fiscal Year Key Financial Indicators | Indicator | 2020 Fiscal Year (HK$ Million) | 2019 Fiscal Year (HK$ Million) | Year-on-Year Change | | :--- | :--- | :--- | :--- | | Total Revenue | 199.9 | 88.9 | +124.9% | | - Fitting-out Project Revenue | 156.9 | 52.9 | +196.6% | | - Renovation Project Revenue | 43.0 | 36.0 | +19.5% | | Gross Profit | 14.5 | 7.5 | +93.3% | | Administrative Expenses | 28.1 | 17.8 | +57.9% | | Loss Attributable to Owners of the Company | (27.4) | (12.4) | +121.0% | - The increase in administrative expenses was primarily due to higher professional fees incurred for the resumption of trading on July 31, 2019, and approximately HK$4.2 million in share-based payment expenses during the reporting period[23] Prospects and Outlook The Group maintains a positive outlook for future business development, considering capital raising activities like rights issues or share placements to expand operations, while focusing on renovation and fitting-out projects in Hong Kong's entertainment and private club sectors, and closely monitoring economic uncertainties from social events and the COVID-19 pandemic - The Group is actively considering capital raising activities (including rights issues, open offers, and share placements) to raise new capital for business expansion[25][30] - Business will continue to focus on the Hong Kong market, particularly renovation projects in the entertainment industry (cinemas, museums) and leisure facilities (private clubs), and actively bidding for new fitting-out projects from mainland property developers in Hong Kong[28] - Management acknowledges recent social events in Hong Kong and the COVID-19 pandemic as major uncertainties for future economic development, and is monitoring their potential impact on the supply chain[28] Liquidity and Financial Resources As of March 31, 2020, the Group faced financial pressure with a net current liability of approximately HK$24.6 million and a net liability of approximately HK$21.1 million, addressed by financial support commitments from a major shareholder, active consideration of capital raising, cost reduction, and securing new profitable contracts, alongside available unutilized bank facilities Financial Position Summary (As of March 31, 2020) | Indicator | Amount (HK$ Million) | | :--- | :--- | | Net Current Liabilities | 24.6 | | Net Liabilities | 21.1 | | Bank Balances and Cash | 34.8 | | Pledged Bank Deposits | 1.8 | - To ensure continued operation, the company has adopted several measures, including: obtaining financial support commitments from a major shareholder, actively considering raising new capital, implementing cost control measures, and utilizing existing bank financing[29][30][31][33] Use of Proceeds from Placing The company listed in January 2017, with net proceeds from placing of approximately HK$40.6 million, of which HK$35.7 million was utilized by March 31, 2020, primarily for developing contracting business, expanding and renovating offices, purchasing vehicles, strengthening internal teams, and general working capital, with only HK$0.8 million used for property acquisition out of the planned HK$5.7 million Summary of Use of Proceeds from Placing (As of March 31, 2020) | Purpose | Adjusted Net Proceeds (HK$ Million) | Actual Use (HK$ Million) | | :--- | :--- | :--- | | Further Development of Contracting Business | 22.8 | 22.8 | | Acquisition of Hong Kong Property | 5.7 | 0.8 | | Expansion of Hong Kong Office | 1.7 | 1.7 | | Renovation of Hong Kong Office | 1.9 | 1.9 | | Purchase of Motor Vehicles | 1.2 | 1.2 | | Further Strengthening of Internal Team | 3.2 | 3.2 | | General Working Capital | 4.1 | 4.1 | | Total | 40.6 | 35.7 | Biographical Details of Directors and Senior Management This section provides comprehensive biographical information for the company's executive and independent non-executive directors, as well as key senior management personnel and the company secretary Profile of Directors and Senior Management This section details the personal biographies, professional qualifications, and industry experience of the company's executive directors, independent non-executive directors, senior management, and company secretary, highlighting the core management team's extensive experience in construction, surveying, accounting, and business development - The executive director team is led by founder Mr. Chan Siu Chung, who has nearly 24 years of experience in the construction and fitting-out sectors[50] - The independent non-executive director team members possess diverse backgrounds in accounting, multinational corporate management, and IT consulting[54] - Senior management includes Mr. Chiu Fu Keung, Financial Controller, and Ms. Cheng Nga Lai, Senior Sales Manager, both with over 20 years of senior experience in their respective fields[55][56] Corporate Governance Report This report details the company's adherence to corporate governance principles, outlining its practices, board and committee structures, and risk management and internal control frameworks Corporate Governance Practices The company is committed to maintaining high standards of corporate governance, complying with the GEM Listing Rules' Corporate Governance Code during the reporting period, with disclosed deviations primarily concerning the non-separation of Chairman and CEO roles and flexible board meeting notice periods to ensure timely and effective decision-making - The company complied with most provisions of the Corporate Governance Code during the reporting period, but with some deviations[60] - Deviation from Code Provision A.2.1: Chairman Mr. Chan Siu Chung also performs the functions of Chief Executive Officer, and the company has not separately established a Chief Executive Officer position[60] - Deviations from Code Provisions A.1.3 and A.7.1: Board meeting notice periods adopted a more flexible approach than prescribed to ensure timely and effective management decisions[61] Board and Committees The Board of Directors comprises three executive and three independent non-executive directors, ensuring a balanced structure, with remuneration, nomination, and audit and risk management committees established, where independent non-executive directors play key roles to ensure independence and effective oversight, and all committees held meetings and fulfilled their responsibilities during the reporting period - The Board of Directors consists of six directors, including three executive directors and three independent non-executive directors, meeting independence requirements[63] Committee Meeting Attendance | Committee | Number of Meetings (During Reporting Period) | Member Attendance | | :--- | :--- | :--- | | Remuneration Committee | 1 | All members attended | | Nomination Committee | 1 | All members attended | | Audit and Risk Management Committee | 4 | All members attended | - The Audit and Risk Management Committee comprises three independent non-executive directors, responsible for reviewing financial statements, internal controls, and risk management systems[91] Risk Management and Internal Control The Board is ultimately responsible for the Group's risk management and internal control systems, having established an enterprise risk management framework and appointed external professional institutions to assist in identifying, assessing, and independently reviewing the effectiveness of internal control systems, identifying three main risk categories—strategic, operational, and compliance—and establishing corresponding control mechanisms - The company has appointed an external professional firm, Evergreen Corporate Services Limited, to assist with risk identification, assessment, and independent review of internal controls[116] Identified Key Risks | Risk Category | Key Risk Description | | :--- | :--- | | Strategic Risk | Increased competition in Hong Kong's fitting-out and renovation industry, with low entry barriers for new entrants, potentially leading to reduced profit margins | | Operational Risk | Reliance on subcontractors, posing risks related to project quality and worker safety, which may affect the Group's operations and financial position | | Compliance Risk | Need to ensure subcontractors comply with various engineering, safety, and environmental regulations; non-compliance may result in fines or remedial measures | - The company currently does not have an internal audit function, instead appointing external independent professionals to perform this role, which the Board considers more cost-effective, and will review its necessity annually[121] Environmental, Social and Governance Report This report outlines the company's commitment and performance across environmental, social, and governance aspects, detailing its policies and initiatives for sustainable operations Environmental Aspect The company values the environmental impact of its business activities and has established an environmental policy, reporting total greenhouse gas emissions of 89.0 tonnes of CO2e, a 12% year-on-year increase, and total energy consumption of 196.5 MWh, a 54% year-on-year increase, primarily due to increased private car fuel consumption and office working hours, while implementing measures like dust control, waste segregation, and energy/water conservation to reduce its environmental footprint Key Environmental Performance Indicators (FY2020) | Indicator | 2020 Fiscal Year | 2019 Fiscal Year | Year-on-Year Change | | :--- | :--- | :--- | :--- | | Total Greenhouse Gas Emissions (tonnes CO2e) | 89.0 | 79.6 | +12% | | Total Energy Consumption (MWh) | 196.5 | 127.3 | +54% | | Total Water Consumption (cubic meters) | 44.0 | - | - | | Non-Hazardous Waste Generated (tonnes) | 0.5 | - | - | - The primary source of greenhouse gas emissions was electricity consumption (Scope 2), accounting for 66.3% of total emissions[145] - During the reporting period, the company complied with all relevant environmental laws and regulations, with no significant violations[159] Social Aspect The company is committed to fostering a harmonious work environment for employees with comprehensive human resources policies, ensuring employee safety through regular health and safety meetings, training, and inspections, managing supply chains by annually evaluating suppliers for service quality, implementing strict anti-corruption policies, and engaging in community investment during the reporting period - As of March 31, 2020, the Group had 32 employees, with no work-related fatalities or injuries reported during the period[43][187] - The company has established a supplier evaluation system, annually assessing the service quality and safety performance of all suppliers/subcontractors[179] - The company has formulated a strict anti-corruption policy, prohibiting any form of bribery, extortion, fraud, and money laundering, with no related violations or legal cases during the reporting period[180] - During the reporting period, the company participated in community investment activities, contributing HK$30,000[184][189] Directors' Report This report provides an overview of the company's business and financial performance, key operational aspects, and compliance with statutory and regulatory requirements for the reporting period Business and Financial Overview This report outlines the company's primary business as fitting-out and renovation projects in Hong Kong, with the Board recommending no dividend distribution for the reporting period, emphasizing the importance of maintaining good relationships with employees, suppliers, and customers, and adhering to relevant environmental regulations - The company's principal business is providing interior fitting-out and renovation engineering services in Hong Kong[207] - The Board recommends no dividend be paid for the year ended March 31, 2020[209] Major Customers and Suppliers The Group exhibits high customer and supplier concentration, with the top five customers accounting for 87.7% of total turnover and the largest customer for 35.0%, while the top five suppliers accounted for 54.2% of total purchases and the largest supplier for 27.9% during the reporting period - High customer concentration: The top five customers accounted for 87.7% of total turnover, with the largest customer accounting for 35.0%[232] - Relatively high supplier concentration: The top five suppliers accounted for 54.2% of total purchases, with the largest supplier accounting for 27.9%[232] Share Option Scheme The company adopted a share option scheme on September 30, 2019, and granted 20,000,000 share options on November 15, 2019, at an exercise price of HK$0.445 per share to executive directors and other employees during the reporting period Details of Share Options Granted (As of March 31, 2020) | Grantee | Grant Date | Number of Outstanding Share Options | Exercise Price Per Share (HK$) | | :--- | :--- | :--- | :--- | | Executive Director (Chan Siu Chung) | 2019/11/15 | 2,000,000 | 0.445 | | Executive Director (Cheung Hiu Tung) | 2019/11/15 | 2,000,000 | 0.445 | | Executive Director (Cheung Hoi Wai) | 2019/11/15 | 2,000,000 | 0.445 | | Other Employees | 2019/11/15 | 14,000,000 | 0.445 | | Total | | 20,000,000 | | Independent Auditor's Report This report presents the independent auditor's opinion on the consolidated financial statements, highlighting key audit matters and material uncertainties related to the company's going concern assumption Auditor's Opinion and Material Uncertainty Related to Going Concern Auditor Crowe (HK) CPA Limited issued an unmodified opinion on the consolidated financial statements, but highlighted a 'material uncertainty related to going concern' due to the Group's annual loss, net current liabilities, and net liabilities, which may cast significant doubt on its ability to continue as a going concern, noting this does not modify the opinion - The auditor issued a true and fair unmodified opinion on the financial statements[247] - The report highlighted a 'material uncertainty related to going concern,' primarily due to the Group recording a loss of approximately HK$27.422 million and having net current liabilities of approximately HK$24.592 million and net liabilities of HK$21.135 million at the end of the reporting period[249] Key Audit Matters The auditor identified two key audit matters: the assessment of expected credit losses for trade receivables and contract assets, involving significant management judgment and estimation, and the revenue recognition and accounting treatment for construction contracts, which relies on estimates of completion progress and total costs, posing uncertainties - Key Audit Matter One: Assessment of expected credit losses for trade receivables and contract assets. The auditor, by evaluating credit risk controls, sampling and verifying aging and subsequent settlements, and inquiring about overdue amounts, concluded that management's judgments and estimates were supported by objective evidence[252][253] - Key Audit Matter Two: Revenue recognition and accounting treatment for construction contracts. The auditor, by evaluating revenue recognition practices, sampling project contracts, reconciling costs, and recalculating completion progress, concluded that management's estimates for construction contract revenue were reasonable[256][257][259] Consolidated Financial Statements This section presents the Group's complete consolidated financial statements, including the statement of profit or loss, statement of financial position, and statement of cash flows, providing a comprehensive view of its financial performance and position Consolidated Statement of Profit or Loss and Other Comprehensive Income For the year ended March 31, 2020, the Group's revenue was HK$199.9 million, a 124.9% increase from HK$88.91 million last year, but due to increased cost of services, administrative expenses, and expected credit loss provisions, the loss for the year expanded to HK$27.42 million from HK$12.44 million in the prior year, with basic loss per share of HK$0.1371 Consolidated Statement of Profit or Loss Summary | Item (HK$ Thousand) | 2020 | 2019 | | :--- | :--- | :--- | | Revenue | 199,939 | 88,913 | | Gross Profit | 14,549 | 7,499 | | Loss Before Tax | (27,422) | (12,496) | | Loss for the Year and Total Comprehensive Loss | (27,422) | (12,439) | | Basic and Diluted Loss Per Share (HK Cents) | (13.71) | (6.22) | Consolidated Statement of Financial Position As of March 31, 2020, the Group's total assets were HK$119.6 million and total liabilities were HK$140.8 million, resulting in a total equity of negative HK$21.14 million (net liabilities), compared to net assets of HK$2.11 million in the prior year, with current assets of HK$113.2 million unable to cover current liabilities of HK$137.8 million, showing a net current liability of HK$24.59 million Consolidated Statement of Financial Position Summary | Item (HK$ Thousand) | March 31, 2020 | March 31, 2019 | | :--- | :--- | :--- | | Assets | | | | Non-Current Assets | 6,458 | 1,370 | | Current Assets | 113,187 | 73,892 | | Total Assets | 119,645 | 75,262 | | Liabilities and Equity | | | | Current Liabilities | 137,779 | 73,056 | | Non-Current Liabilities | 3,001 | 101 | | Total Liabilities | 140,780 | 73,157 | | (Net Liabilities) / Net Assets | (21,135) | 2,105 | | Total Equity | (21,135) | 2,105 | Consolidated Statement of Cash Flows During the reporting period, net cash generated from operating activities was HK$0.608 million, a significant decrease from HK$8.356 million last year, while net cash from investing activities was HK$17.085 million, primarily from withdrawal of pledged bank deposits, and net cash from financing activities was HK$7.82 million, with cash and cash equivalents at year-end significantly increasing to HK$34.782 million from HK$9.269 million at the beginning of the year Consolidated Statement of Cash Flows Summary | Item (HK$ Thousand) | 2020 | 2019 | | :--- | :--- | :--- | | Net Cash From Operating Activities | 608 | 8,356 | | Net Cash From Investing Activities | 17,085 | 5,066 | | Net Cash From / (Used In) Financing Activities | 7,820 | (4,103) | | Net Increase in Cash and Cash Equivalents | 25,513 | 9,319 | | Cash and Cash Equivalents at Year-End | 34,782 | 9,269 | Notes to the Financial Statements This section provides detailed explanations and breakdowns of the figures presented in the consolidated financial statements, outlining significant accounting policies, estimates, and specific financial disclosures Selected Notes The notes to the financial statements detail accounting policies, significant accounting estimates and judgments, and provide breakdowns and explanations for various financial statement items, including explanations on the going concern assumption, application of new accounting standards (especially HKFRS 16 Leases), revenue recognition methods, financial instrument risk management, impairment assessment of trade receivables and contract assets, and related party transactions - Note 3 (Going Concern Basis): Details management's measures to address going concern uncertainties, including obtaining financial support from a major shareholder, considering capital raising, controlling costs, and securing new contracts[308][309][310][311] - Note 4 (Significant Accounting Estimates and Judgments): Identifies revenue recognition for construction contracts and expected credit loss provisions for trade receivables as areas involving significant management estimates and judgments[407][408] - Note 6 (Financial Instruments): Trade receivables exhibit high credit risk concentration, with the top five customers accounting for 92% of total trade receivables; the company has made expected credit loss provisions based on aging and customer circumstances[425][429] - Note 7 (Revenue and Segment Information): Revenue primarily derived from fitting-out projects (HK$156.9 million) and renovation projects (HK$43.03 million), with all revenue and non-current assets located in Hong Kong[445][448][451] Financial Summary This section offers a concise overview of the Group's financial performance and position over the past five fiscal years, highlighting key trends and financial health indicators Five-Year Financial Data Summary This section provides a summary of the Group's key financial data for the past five fiscal years, showing a significant rebound in revenue in FY2020 but continuous pre-tax losses since FY2017, with net assets turning into net liabilities in FY2020, reflecting the company's financial challenges Five-Year Financial Summary (Years Ended March 31) | Item (HK$ Thousand) | 2020 | 2019 | 2018 | 2017 | 2016 | | :--- | :--- | :--- | :--- | :--- | :--- | | Revenue | 199,939 | 88,913 | 96,306 | 114,685 | 180,391 | | Profit / (Loss) Before Tax | (27,422) | (12,496) | (35,300) | (25,794) | 17,003 | | Profit / (Loss) for the Year | (27,422) | (12,439) | (35,245) | (26,739) | 13,722 | | (Net Liabilities) / Net Assets | (21,135) | 2,105 | 17,196 | 52,441 | 23,419 |