Financial Performance - For the year ended December 31, 2022, the total revenue decreased by 6.6% to approximately HKD 357.2 million from HKD 382.3 million in the previous year[8]. - The group recorded a gross profit of approximately HKD 7.3 million, compared to a gross loss of HKD 29.9 million in the previous year[17]. - The net loss attributable to the owners of the company was approximately HKD 1.6 million, a significant improvement from a net loss of HKD 64.8 million in the previous year[17]. - The group's contracting service revenue decreased by approximately 6.6% to about HKD 357.2 million for the year, down from approximately HKD 382.3 million in the previous year[18]. - Gross profit from contracting services increased to approximately HKD 7.3 million, with a gross profit margin of 2.0%, compared to a gross loss of HKD 29.9 million and a gross loss margin of 7.8% in the previous year[18]. - Other income surged by approximately 1,042.9% to about HKD 8.0 million, primarily due to one-time income including government subsidies of about HKD 2.3 million[19]. - The company confirmed an expected credit loss impairment of approximately HKD 6.3 million for the year, compared to HKD 2.9 million in the previous year[17]. - Administrative expenses decreased by approximately 33.1% to about HKD 21.4 million, down from approximately HKD 32.0 million in the previous year due to cost control measures[26]. - Financing costs decreased by 66.6% to about HKD 0.1 million, down from approximately HKD 0.3 million in the previous year[27]. - The group reported a net cash position increase to approximately HKD 44.5 million, up from HKD 5.3 million in the previous year[33]. - The profit attributable to the owners of the company for the year was approximately HKD 1.0 million, a decline from a profit of HKD 40.1 million in the previous year[32]. Strategic Outlook - The company plans to explore various opportunities to maximize shareholder value despite ongoing challenges in the construction industry[9]. - The group aims to conduct a detailed review of its existing operations and financial status to formulate sustainable business plans and strategies for future development[16]. - The company anticipates that the lifting of travel restrictions and social distancing measures will allow for a gradual recovery of operations[14]. - The group expects to improve its financial performance and position over the next few years as material and transportation costs decrease due to China's reopening[14]. - The company intends to leverage expertise in real estate development and financial services to expand its revenue sources[16]. Risk Factors - The construction industry continues to face risks including the spread of COVID-19 variants, rising interest rates, supply chain disruptions, and labor shortages[9]. Corporate Governance - The board has adopted the corporate governance code as per the listing rules and has complied with all applicable provisions during the year ended December 31, 2022[60]. - The board consists of five members, including one executive director and four independent non-executive directors[62]. - The company has implemented a diversity policy for board members, considering various measurable aspects such as gender, age, and professional experience[69]. - The nomination committee reviews the diversity policy annually to ensure its effectiveness and promotes gender diversity at all levels[72]. - The company has established a code of conduct for directors' securities transactions, ensuring compliance with the listing rules[61]. - The board structure is designed to ensure a clear division of responsibilities between the chairman and the CEO, enhancing strategic efficiency[64]. - The company has arranged appropriate insurance to protect directors and senior officers against legal actions arising from corporate activities[67]. - The board held two meetings during the year ending December 31, 2022, with all executive and independent non-executive directors attending both meetings[76]. - The company conducted two annual general meetings in the same period, with most directors attending both, except for one who attended only one[76]. - The audit committee consists of four independent non-executive directors, with the chairman possessing appropriate professional qualifications and accounting experience[86]. - The audit committee's responsibilities include reviewing the independence of external auditors and monitoring the integrity of financial reports before submission to the board[87]. - The company emphasizes continuous professional development for directors, with all participating in relevant training and seminars[82]. - The board is responsible for corporate governance functions, including policy formulation and compliance with legal and regulatory requirements[78]. - Independent non-executive directors are appointed for a term of three years and must be re-elected according to the company's articles of association[80]. - The company has established three board committees: audit committee, remuneration committee, and nomination committee, with their terms of reference available on the stock exchange and company websites[85]. - The company ensures that all directors have access to the company secretary's advice and services to comply with board procedures and applicable rules[78]. - The board receives at least 14 days' notice for regular meetings, allowing sufficient time for directors to prepare[78]. - The audit committee held two meetings during the year ended December 31, 2022, to review and approve financial performance[88]. - The board and audit committee had no disagreements regarding the selection and appointment of external auditors for the year ended December 31, 2022[89]. - The company reviewed its internal control systems, including financial, operational, and compliance monitoring, during the year ended December 31, 2022[90]. - The company reported that there were no meetings held by the remuneration committee during the year ended December 31, 2022[92]. - The remuneration details for senior management members were categorized by salary range, with 4 employees earning between HKD 1,000,001 and HKD 2,000,000, and 1 employee earning between HKD 3,000,001 and HKD 4,000,000[96]. - The board is responsible for establishing and reviewing the internal control system to safeguard shareholder investments and the company's assets[102]. - The company believes that its risk management and internal control systems are adequate and effective as of the year ended December 31, 2022[103]. - The audit committee reviewed the effectiveness of the risk management and internal control systems, covering all significant control measures[103]. - The company has not established an internal audit function, considering its size, nature, and complexity[102]. - The board is committed to timely publishing the financial statements to provide a balanced and understandable assessment of the company's position and prospects[101]. - The external auditor's fees for statutory audit services amounted to HKD 891,000 for the year ended December 31, 2022, down from HKD 1,730,000 in 2021, indicating a decrease of approximately 48.5%[107]. - The total fees paid to external auditors, including non-audit services, were HKD 929,000 for 2022, compared to HKD 1,810,000 in 2021, reflecting a reduction of about 48.7%[107]. - The company has established a policy for handling and disclosing inside information to ensure timely processing and prevent any individual from gaining an unfair advantage in trading[106]. - The risk management and internal control framework has been reviewed by the board and deemed effective and adequate as of December 31, 2022[105]. Environmental, Social, and Governance (ESG) Initiatives - The environmental, social, and governance (ESG) report highlights the company's commitment to sustainable value creation during the reporting period ending December 31, 2022[118]. - The company is committed to managing environmental, social, and governance (ESG) risks through ongoing development and evaluation of its ESG policies[125]. - The company has established a clear direction for integrating ESG measures into its strategic planning to create sustainable value for stakeholders[125]. - The company is focused on balancing operational needs with environmental protection to achieve its business goals[129]. - The total greenhouse gas emissions for the reporting period amounted to 334 tons of CO2 equivalent, representing an increase of approximately 27% compared to the previous reporting period[134]. - Direct emissions (Scope 1) were recorded at 64 tons of CO2 equivalent, while indirect emissions (Scope 2) were 238 tons of CO2 equivalent, and other indirect emissions (Scope 3) were 32 tons of CO2 equivalent[134]. - The company achieved zero emissions for nitrogen oxides (NOx), sulfur oxides (SOx), and particulate matter (PM) during the reporting period due to reduced vehicle usage[132]. - The company has implemented strict monitoring to ensure compliance with environmental regulations, resulting in no significant non-compliance incidents related to emissions[127]. - Key performance indicators for air pollutant emissions were analyzed annually to enhance stakeholder value[125]. - The company has adopted ultra-low sulfur diesel for its machinery and has implemented measures to reduce waste generation[128]. - The company actively engages stakeholders for feedback on its ESG policies and performance[124]. - The company has set goals for waste reduction and is actively taking steps to achieve these targets, demonstrating a commitment to environmental sustainability[178]. - The company monitors its resource usage, including energy and water, and has established efficiency targets to optimize resource consumption[178]. - The company has implemented measures to improve resource efficiency and reduce energy consumption, including encouraging employees to turn off lights and appliances when leaving the office[145]. - The company has not generated any hazardous waste during the reporting period[139]. - The company’s environmental management system is certified to ISO 14001 standards, indicating a commitment to minimizing environmental impact[147]. Employee and Labor Practices - As of December 31, 2022, the total number of employees in the group is 88, with a gender distribution of 74% male and 26% female[154]. - The overall employee turnover rate for 2022 is 1%, with a male turnover rate of 4% and a female turnover rate of 0%[155]. - The group reported a total of 162 workdays lost due to work-related injuries in 2022, a significant decrease from 898 days in 2021[160]. - The group maintains a strict adherence to labor laws, with no reported cases of child or forced labor as of December 31, 2022[165]. - The group has implemented various health and safety measures, including the installation of air purifiers and encouraging vaccination among employees[158]. - The average training hours for general employees in 2022 is 20 hours, with 98% of training hours completed by male employees[164]. - The group has established a robust internal promotion mechanism to enhance employee motivation and career development[154]. - The group emphasizes the importance of employee development, providing various training opportunities to enhance skills and knowledge[161]. - The group conducts annual evaluations of suppliers to ensure compliance with quality and safety standards[167]. - The company has adhered to all relevant laws and regulations regarding employment practices as of December 31, 2022[150]. Community Engagement and Corporate Responsibility - The company encourages employee participation in community welfare initiatives, enhancing stakeholder engagement and understanding of community needs[174]. - Community investment efforts were outlined, focusing on areas such as education, environment, labor needs, health, and culture[188]. Compliance and Ethical Standards - The company has established policies to ensure compliance with relevant laws and regulations regarding service quality and safety, reflecting its commitment to operational integrity[170]. - The company emphasizes the importance of intellectual property protection and has implemented measures to ensure proper usage in contracts with clients and suppliers[170]. - There were no reported cases of non-compliance related to product liability during the year ending December 31, 2022, showcasing effective governance practices[172]. - The company has a zero-tolerance policy towards corruption and fraud, with no complaints received from government agencies regarding non-compliance with anti-corruption laws as of December 31, 2022[173]. - The company has implemented a code of conduct for employees to guide ethical behavior, particularly in areas such as gift acceptance and conflict of interest[173]. Board of Directors and Management - The executive director, Mr. Ng, has extensive experience in building surveying and has been with the company since March 2015, contributing to overall business development and strategic planning[190]. - The independent non-executive director, Mr. Chan, brings over 30 years of experience in the banking and finance industry, enhancing the company's governance[194]. - Mr. Yin Zhiwei has been an independent non-executive director since January 12, 2018, with professional experience in accounting and law[196]. - Mr. Liu Guohui has over 20 years of experience in accounting, auditing, financial advisory, and corporate governance, appointed as an independent non-executive director on January 12, 2018[198]. - Mr. Liu holds a Master's degree in Corporate Governance and Directorship from Hong Kong Baptist University, awarded in November 2014[200]. - Mr. Liu has served in various financial roles, including Chief Financial Officer and Company Secretary at International United Finance Leasing Limited, which was listed on the Hong Kong Stock Exchange in March 2019[198]. - Mr. Yin has been an independent non-executive director of Chuangmei Pharmaceutical Co., Ltd. since December 2015, which is listed on the Hong Kong Stock Exchange[196]. - Mr. Liu has held positions at KPMG, focusing on financial due diligence, corporate restructuring, and financial modeling[198]. - Mr. Liu has been a member of the Hong Kong Institute of Certified Public Accountants since July 2003 and a fellow member of the Association of Chartered Certified Accountants since December 2007[200]. - Mr. Yin graduated with a Bachelor's degree in Accounting from the Hong Kong University of Science and Technology in November 1997[196]. - Mr. Liu has experience in statutory audits and internal control reviews from his tenure at PwC and other firms[198].
丰展控股(01826) - 2022 - 年度财报