Financial Performance - The group's revenue reached approximately HKD 312.9 million, representing a significant year-on-year increase of 29.1%[12]. - The net profit for the year was approximately HKD 18.9 million, a turnaround from a net loss of approximately HKD 4.5 million in the previous fiscal year[5]. - The gross profit amounted to approximately HKD 24.6 million, an increase of about HKD 7.2 million or 41.5% compared to the previous year[13]. - The gross margin improved to approximately 7.9%, up from 7.2% in the previous year, reflecting effective cost control measures[13]. - Other income and gains were approximately HKD 1.9 million, an increase of 21.2% year-on-year, primarily due to government subsidies related to COVID-19[15]. - The increase in revenue was mainly due to several large construction projects awarded in 2021 and 2022[12]. - Administrative and other operating expenses for the year were approximately HKD 22.3 million, a decrease of about HKD 0.1 million or 0.5% compared to the same period in 2022[18]. - The net impairment loss reversal of financial and contract assets was approximately HKD 14.8 million, compared to a loss of HKD 1.0 million in 2022, due to the recovery of previously impaired long-term trade receivables[20]. - As of March 31, 2023, the group had total bank balances (including pledged bank deposits) of approximately HKD 51.2 million, up from HKD 23.0 million as of March 31, 2022[23]. - The group had no outstanding debts as of March 31, 2023 and March 31, 2022[24]. - Capital expenditures for the year amounted to approximately HKD 9.0 million for the purchase of properties, plants, and equipment, funded entirely by internal resources[31]. - The total salary cost incurred during the year was approximately HKD 34.3 million, compared to HKD 31.1 million for the same period in 2022[43]. - The net proceeds received amounted to approximately HKD 84.2 million, with about HKD 82.5 million utilized as of March 31, 2023[42]. - The group plans to utilize the remaining net proceeds of approximately HKD 1.7 million for the purchase of excavators, cranes, and crushers by March 31, 2024[42]. Corporate Governance - The company is committed to maintaining good corporate governance to protect shareholder interests and maximize shareholder value[57]. - The board has established a mission and values that integrate environmental protection, social responsibility, and sustainable growth into the business strategy[59]. - The company has adopted the corporate governance code as per the listing rules and has complied with it throughout the review period[58]. - The board consists of six members, including three executive directors and three independent non-executive directors[61]. - The company has a diverse board member policy, a nomination policy, a dividend policy, and an anti-corruption policy in place[63]. - The operational director has over 20 years of experience in the foundation industry, contributing to the company's strategic planning[46]. - The company emphasizes a culture of integrity and accountability to guide employee behavior and align with its mission and values[59]. - The company secretary has over 20 years of experience in auditing and accounting, enhancing the company's governance[54]. - The board regularly reviews the company's corporate governance practices and procedures to ensure compliance with relevant laws and regulations[57]. - The board's dividend policy is influenced by the group's financial performance, cash flow, and future expenditure plans, with no guaranteed specific dividend amounts[68]. - The company prohibits all forms of bribery and corruption, ensuring compliance with local laws and regulations[70]. - The board comprises three independent non-executive directors, meeting the requirement of more than one-third of the board's members[72]. - The company has established a formal and transparent policy against bribery for all employees[70]. - The chairman and CEO positions are held by different individuals to ensure a balance of power and authority[71]. - The company will review the board's structure and diversity regularly to ensure compliance with its policies[69]. - Two directors are set to retire at the upcoming annual general meeting and are eligible for re-election[74]. - The board of directors held five meetings during the review year, with all members attending 100% of the meetings[89]. - The audit committee, consisting of three independent non-executive directors, held two meetings and reviewed the group's financial statements and reporting systems[95]. - The company has established a clear board meeting procedure, with regular meetings held at least four times a year[82]. - The company provides appropriate insurance for all directors in relation to their duties[78]. - The company has arranged internal training for directors to enhance their knowledge and skills[80]. - The company has a comprehensive training program for newly appointed directors[81]. - The audit committee reviewed the independence and objectivity of the external auditor during the review year[95]. - The company has established three board committees: the audit committee, nomination committee, and remuneration committee to oversee specific matters[90]. - The company ensures compliance with legal and regulatory requirements through regular reviews of its governance policies[78]. - The company has a policy for handling potential conflicts of interest among directors, requiring independent directors to manage such matters[78]. - The Nomination Committee held two meetings during the review year, with all members attending 2 out of 2 meetings[99]. - The Compensation Committee reviewed the overall compensation policy for all directors and senior management, ensuring it reflects performance and achievements[101]. - The total fees paid to the auditor for audit services amounted to HKD 720,000, while non-audit services totaled HKD 120,000[107]. - The company has established guidelines for approving and controlling expenditures to ensure the reliability of financial reporting and compliance with applicable laws[109]. - The board confirmed its responsibility for risk management and internal control systems, assessing their effectiveness in line with the group's risk appetite[108]. - The group has implemented a "three lines of defense" model for risk management, involving departmental heads, management, and the audit committee[108]. - The Compensation Committee's recommendations for management compensation are based on comparisons with similar-sized companies in the industry[103]. - The Nomination Committee reviewed the board's structure, size, and diversity, making recommendations for approval by the board[99]. - The group has a policy for evaluating the independence of non-executive directors, ensuring compliance with governance standards[99]. - The board is not aware of any significant uncertainties that would raise doubts about the group's ability to continue as a going concern[105]. - The company has established a whistleblowing procedure to allow employees to report concerns regarding financial reporting, internal controls, or potential violations confidentially[110]. - The board has taken appropriate measures to fulfill internal audit functions despite the absence of an internal audit capability within the company[110]. - The company has appointed a new company secretary, who has completed no less than 15 hours of professional training during the review year to enhance her skills and knowledge[112]. - All shares of the company have the same voting rights and entitlement to dividends, ensuring equal shareholder rights[113]. - The company has a policy in place to ensure insider information is disclosed fairly and timely according to applicable laws and regulations[111]. - The company emphasizes the importance of communication with stakeholders and has established a shareholder communication policy to provide balanced and easily understandable information[119]. - The company has been closely monitoring the developments of COVID-19 and has adjusted communication channels to minimize the risk of virus transmission[120]. - The annual general meeting is scheduled for September 7, 2023, with a notice to be sent to shareholders at least 20 full business days prior[121]. - The company has not made any significant changes to its constitutional documents during the review year[122]. Environmental, Social, and Governance (ESG) Initiatives - The board is responsible for the company's environmental, social, and governance (ESG) principles and policies, with a dedicated team collecting and integrating ESG data[126]. - The company has set major environmental, social, and governance (ESG) goals to manage and stabilize energy consumption at levels comparable to the previous year[127]. - Despite a significant increase in water usage, other energy consumption and pollutant emissions have improved, generally meeting the targets[127]. - The company has implemented various energy efficiency measures, including using energy-saving equipment and reducing vehicle idle time[135]. - There were no violations related to air and greenhouse gas emissions, water and land pollution, or waste generation during the review year[136]. - The greenhouse gas emissions performance is calculated based on guidelines from the Environmental Protection Department and the Electrical and Mechanical Services Department[139]. - The company actively engages with stakeholders to gather feedback on ESG policies and performance, which aids in improving future sustainability performance[131]. - The company has identified emissions and resource usage as critical issues due to the environmental pollution caused by its main construction business[133]. - The company has invested in clean energy and sustainable materials to mitigate the impact of climate change[135]. - The board believes the group has achieved its ESG goals and plans to implement improvement measures for the coming year[127]. - The company ensures compliance with all relevant environmental laws and regulations[136]. - Energy consumption decreased significantly, with diesel usage down from 462,999 liters in 2022 to 352,298 liters in 2023, a reduction of approximately 24%[140]. - Total greenhouse gas emissions equivalent to CO2 decreased from 1,334 tons in 2022 to 1,042 tons in 2023, representing a decline of about 22%[140]. - Water consumption increased from 3,475 cubic meters in 2022 to 9,994 cubic meters in 2023, a rise of approximately 187%[141]. - Construction waste generated decreased to approximately 91,321 tons in 2023 from 117,113 tons in 2022, a reduction of about 22%[143]. - The density of greenhouse gas emissions per million sales improved from 5.5 in 2022 to 3.3 in 2023[140]. - The density of construction waste per million sales decreased from 483 in 2022 to 292 in 2023[143]. - The company aims to further reduce energy consumption and air pollutants in the future to enhance environmental performance[141]. Workforce and Training - The workforce is predominantly male, with 92 males and 5 females employed as of March 31, 2023[148]. - Employee count rose from 72 in 2022 to 97 in 2023, an increase of approximately 35%[148]. - Employee turnover rate increased from about 21% in 2022 to approximately 45% in 2023[149]. - The company provided approximately 1,002 hours of training in the fiscal year 2023, with construction workers accounting for about 957 hours, averaging 13 hours of training per worker[151]. - The average training hours per employee in fiscal year 2023 were 11.3 hours, with 90% of employees completing training[156]. - The company emphasized a safe working environment, implementing various health and safety measures during the ongoing COVID-19 pandemic[151]. - The company maintained high hygiene standards and preventive measures at most construction sites and offices despite the easing of COVID-19 restrictions[151]. - The company has established a performance evaluation mechanism to ensure fair career development opportunities for employees[158]. - The company reported a 100% training completion rate for workers in fiscal year 2023[156]. - The company actively manages supplier selection criteria, ensuring compliance with occupational health and safety regulations[161]. - The company has not recorded any significant violations related to workplace safety in the fiscal year 2023[154]. Community Engagement and Charitable Activities - The company contributed HKD 58,000 to local community initiatives, focusing on child care and accident rescue[171]. - The company actively participates in charitable activities, including donations to the construction industry care fund after a serious accident[171]. - The company supports various charitable events, including the Lifewire Run 2022 for rare disease children[171]. - The company aims to participate in more charitable activities in the future to contribute to the betterment of the local community[171]. Compliance and Risk Management - The group faces significant industry risks, particularly related to the Hong Kong property market's development and the availability of foundation projects, which could adversely impact business operations[188]. - Compliance risks are present due to the regulatory nature of the foundation industry, with potential changes in licensing requirements that could increase operational costs[189]. - Unforeseen geological conditions can lead to additional costs and project delays, impacting the group's financial status[190]. - The group emphasizes environmental protection and has implemented an environmental management system certified to ISO 14001:2015 standards[194]. - The group prioritizes subcontractors with ISO 14001 certification to enhance environmental awareness among business partners[195]. - The group recognizes employees as key assets for sustainable growth and offers competitive compensation and training opportunities[199]. - The group aims to reduce reliance on major clients by undertaking large-scale projects for a broader client base[200].
汛和集团(01591) - 2023 - 年度财报