Financial Performance - The total revenue for the fiscal year ended March 31, 2022, was approximately HKD 232.2 million, a decrease of about 16.5% compared to the previous fiscal year[9]. - The loss attributable to equity holders for the fiscal year was approximately HKD 4.0 million, an improvement of about HKD 28.5 million from the previous fiscal year due to cost control measures implemented by the company[9]. - The group's revenue decreased by approximately HKD 46.0 million or 16.5% to about HKD 232.2 million for the fiscal year, compared to HKD 278.2 million in the previous fiscal year[15]. - The group recorded a gross profit of approximately HKD 9.9 million, a turnaround from a gross loss of about HKD 28.1 million in the previous fiscal year, attributed to improved cost control[20]. - Other income decreased to approximately HKD 158,000 from about HKD 11.8 million in the previous fiscal year, primarily due to government subsidies received in the prior year[21]. - Administrative and other operating expenses decreased by approximately HKD 1.9 million or 13.1% to about HKD 12.6 million, down from HKD 14.5 million in the previous fiscal year[22]. - Financial costs decreased by approximately HKD 0.3 million or 17.6% to about HKD 1.4 million, compared to HKD 1.7 million in the previous fiscal year[23]. - The net loss attributable to equity holders decreased by approximately HKD 28.5 million to about HKD 4.0 million, down from HKD 32.5 million in the previous fiscal year, due to improved cost control[26]. - As of March 31, 2022, the group's cash and bank balances totaled approximately HKD 20.7 million, down from HKD 26.6 million in the previous fiscal year[27]. - The group's debt-to-equity ratio decreased from approximately 35.3% to about 34.7% as of March 31, 2022, mainly due to a reduction in amounts payable to a director[27]. Economic Environment - The economic growth forecast for Hong Kong in 2022 has been revised down from 2%-3.5% to 1%-2% due to anticipated challenges from the ongoing COVID-19 pandemic[9]. - The company expects to continue operating in a challenging environment over the next two years, with ongoing pandemic measures and rising operational costs hindering recovery momentum[11]. - The construction industry, which the company is part of, has been significantly affected by the pandemic, with the renovation market still struggling to recover[8]. - The overall economic environment in Hong Kong remains below pre-pandemic levels, approximately 2% lower than in 2018, despite a GDP growth of 6.4% in 2021[13]. - The construction industry's business sentiment remains low, particularly among large enterprises, indicating ongoing challenges in the sector[8]. - The construction industry in Hong Kong is expected to face ongoing challenges due to economic uncertainties and inflation pressures[18]. Business Outlook - The company maintains a cautious outlook for future business prospects but remains optimistic about regaining growth momentum once market conditions normalize[11]. - The company will closely monitor industry trends and adopt a prudent approach to improve profitability in the coming year[11]. - The company faced significant industry risks due to competition from rivals with more resources and established customer relationships, potentially leading to downward price pressure and reduced profit margins[29]. - The company plans to maintain a cautious approach in daily operations while closely monitoring market conditions for potential opportunities post-COVID-19[18]. Corporate Governance - The company emphasizes the importance of good corporate governance to maximize shareholder value and has adopted the applicable code provisions of the Corporate Governance Code[69]. - The board consists of 6 members, including 3 executive directors and 3 independent non-executive directors, ensuring a balanced composition for effective independent judgment[71]. - The company has adopted a board diversity policy, considering factors such as gender, age, cultural background, and professional experience in board member selection[73]. - All independent non-executive directors have confirmed their independence according to the relevant listing rules, ensuring compliance with the requirement that independent directors must constitute at least one-third of the board[74]. - The board is responsible for overall management and has delegated daily operational management to the executive team led by the CEO[78]. - The company provides appropriate insurance for all directors to cover their responsibilities[81]. - Directors receive internal training on applicable laws and regulations, with costs borne by the company[82]. - The board has not established a corporate governance committee, but it undertakes corporate governance functions, including policy review and compliance monitoring[80]. - The company has a policy for the appointment and re-election of directors, ensuring that one-third of the directors retire at each annual general meeting[77]. - The company emphasizes the importance of board diversity to enhance the quality and effectiveness of the board[73]. - The independent non-executive directors contribute expertise and independent judgment through active participation in board meetings and committees[74]. - The board held five meetings and one annual general meeting during the review year, with all board members attending 100% of the meetings[85]. - The Audit Committee conducted two meetings, reviewing the annual performance for the fiscal year 2021 and the interim report for the six months ending September 30, 2021[90]. - The Compensation Committee also held two meetings, evaluating the compensation structure for directors and senior management based on their responsibilities and the company's performance[97]. - The Nomination Committee met twice, reviewing the board's diversity policy and overseeing its implementation[100]. - The company has adopted a nomination policy outlining the procedures for selecting candidates for the board[101]. - The Audit Committee consists of three independent non-executive directors, ensuring oversight of financial reporting and risk management[88]. - The Compensation Committee ensures that no individual participates in determining their own compensation[94]. - The company provided sufficient resources for each committee to fulfill its responsibilities and seek independent professional advice when necessary[87]. - The board and the Audit Committee reported no disagreements during the review year[93]. - The company has established three committees: Audit, Compensation, and Nomination, to enhance governance and oversight[87]. Environmental, Social, and Governance (ESG) Practices - The company has conducted a comprehensive internal materiality assessment to identify and evaluate environmental, social, and governance issues that are of concern to stakeholders[123]. - Emissions and resource utilization are considered the most significant issues impacting stakeholders and the company[123]. - The company strictly complies with relevant environmental laws and regulations, with no known violations regarding the use of natural resources or emissions[127]. - The governance structure for environmental, social, and governance matters includes the board of directors, a sustainable development team, and third-party consultants[120]. - The company emphasizes the importance of communication with stakeholders to understand their expectations and requirements[124]. - Key stakeholders include shareholders, government and regulatory bodies, customers, employees, communities, and media[124]. - The company is committed to sustainable business practices while ensuring financial returns and social responsibility[118]. - The sustainable development team reports directly to the board of directors on the implementation of environmental, social, and governance principles[120]. - Direct greenhouse gas emissions (Scope 1) decreased to 6,815 kg CO2 equivalent, with a reduction in emission intensity to 29.35 kg per million revenue compared to 9,762 kg and 35.09 kg per million revenue in the previous year[131]. - Indirect greenhouse gas emissions (Scope 2) were recorded at 10,298 kg CO2 equivalent, with an emission intensity of 44.35 kg per million revenue, down from 22,015 kg and 79.13 kg per million revenue in the previous year[131]. - Total greenhouse gas emissions amounted to 17,113 kg CO2 equivalent, with a significant reduction in emission intensity to 73.70 kg per million revenue from 31,777 kg and 114.22 kg per million revenue in the previous year[131]. - Total energy consumption was 46,175 kWh, with an energy intensity of 198.86 kWh per million revenue, down from 72,334 kWh and 260.95 kWh per million revenue in the previous year[135]. - The company used 2,562 liters of unleaded gasoline, resulting in an intensity of 11.03 liters per million revenue, compared to 3,605 liters and 12.96 liters per million revenue in the previous year[135]. - The company purchased 21,346 kWh of electricity, with an intensity of 91.93 kWh per million revenue, down from 37,397 kWh and 134.42 kWh per million revenue in the previous year[135]. - The company aims to maintain resource usage and pollutant emission density at stable levels compared to the previous year, focusing on reducing energy and resource consumption[130]. - The company has implemented measures to reduce waste generation and disposal, including reusing construction tools and guiding employees on proper waste disposal[130]. - The company emphasizes the importance of monitoring subcontractors' compliance with environmental regulations on construction sites[130]. - The company continues to seek optimal methods to reduce its environmental footprint while balancing business development and environmental protection[130]. Employee and Workplace Practices - The total employee turnover rate for the group significantly decreased compared to previous years, with male turnover at 19% (down from 23%) and female turnover at 7% (down from 88%) in 2022[140]. - The average training hours per employee in 2022 were 0.75 hours for both male and female employees, with 21% of male employees and 50% of female employees receiving training[145]. - The group recorded only 1 work-related injury in 2022, resulting in 0 lost workdays, consistent with the previous year[146]. - The total number of suppliers decreased from 92 in 2021 to 54 in 2022, with a notable drop in suppliers from Hong Kong from 89 to 52[150]. - The group implemented attractive compensation packages and equal promotion opportunities to retain senior management and frontline employees[140]. - The employee composition is diverse, with ages ranging from under 30 to 60, although there is a higher number of male employees due to industry interest[141]. - The group has established safety policies and training programs to ensure a safe working environment, particularly during the COVID-19 pandemic[146]. - The group has not received any complaints regarding unequal employment or treatment, reflecting its commitment to equal opportunities[141]. - The group emphasizes the importance of risk awareness education and maintains high safety standards in the office environment[146]. - The group regularly reviews and updates its list of approved suppliers to ensure quality and compliance with safety standards[148]. Shareholder and Stakeholder Relations - The company has recorded approximately HKD 82.5 million in distributable reserves as of March 31, 2022[164]. - The board of directors decided not to recommend a final dividend for the year under review, consistent with the previous fiscal year[165]. - The company aims to reduce reliance on major clients by taking on more projects from other customers, focusing on profitable and large-scale projects[175]. - The company has established stable relationships with suppliers and subcontractors to effectively meet customer demands[176]. - There were no recorded incidents of bribery, extortion, corruption, fraud, or money laundering during the review year[156]. - The company emphasizes high standards of corporate governance and compliance with anti-corruption regulations[155]. - The company encourages employee participation in volunteer activities and contributions to charitable organizations, despite not engaging in corporate community activities during the COVID-19 pandemic[157]. - The company has not recorded any serious violations of environmental laws that would significantly impact its business operations[171]. - The company has implemented internal guidelines to minimize resource consumption and promote recycling in its daily operations[171]. - The company will suspend share transfer registration from August 23, 2022, to August 26, 2022, to facilitate attendance at the annual general meeting[178]. - The board of directors includes three executive directors and three independent non-executive directors, with specific terms for rotation and re-election[180]. - No directors or major shareholders have disclosed any interests in competing businesses during the review period[182]. - The company has arranged appropriate liability insurance for directors and senior management against legal claims arising from corporate activities[186]. - As of March 31, 2022, the chairman holds 360,000,000 shares, representing 75% of the company's issued share capital[194]. - The company has established a remuneration committee to review the compensation policies for all directors and senior management[191]. - There were no significant contracts involving the company or its subsidiaries where directors had direct or indirect interests during the review period[187]. - The company has confirmed that all independent non-executive directors are independent as per the listing rules[180]. - The company has not entered into any management contracts for the execution of its business during the review period[189]. - The board of directors has received annual independence confirmations from all independent non-executive directors[184]. - Kairong Holdings Limited holds a substantial 75% stake in the company, representing 360,000,000 shares[199]. - The beneficial ownership of Kairong Holdings is distributed among three executives: 50% by Mr. Wen Haiyuan, 30% by Ms. Wu Yuanzhen, and 20% by Mr. He Zhikang[199]. - No other individuals, excluding directors or senior executives, hold any significant interests or short positions in the company's shares as of March 31, 2022[200].
耀高控股(01796) - 2022 - 年度财报