Financial Performance - The Group reported a revenue of approximately HK$99.0 million for FY2021, representing a 22.4% increase compared to HK$80.9 million for FY2020[17]. - Revenue from concrete demolition services decreased by 3.1% from approximately HK$57.9 million in FY2020 to approximately HK$56.1 million in FY2021[18]. - Revenue from prefabricated construction services increased by 86.9% from approximately HK$22.9 million in FY2020 to approximately HK$42.8 million in FY2021[18]. - The Group recorded a net loss of approximately HK$37.2 million for FY2021, a 129.6% increase from a net loss of approximately HK$16.2 million in FY2020[19]. - Basic loss per share for FY2021 was HK3.65 cents, compared to HK1.51 cents for FY2020[19]. - Revenue from private sector projects decreased to HK$46,256,000 in 2021 from HK$49,442,000 in 2020, while revenue from public sector projects increased to HK$9,885,000 from HK$8,505,000[39]. - Gross profit increased by approximately HK$1.3 million or 5.6% from approximately HK$23.3 million for FY2020 to approximately HK$24.6 million for the Reporting Period[53]. - Gross profit margin decreased from 28.9% for FY2020 to 24.9% for the Reporting Period[54]. - Loss attributable to owners of the Company was approximately HK$36.8 million for the Reporting Period, representing an increase of approximately HK$21.5 million compared to a loss of HK$15.3 million for FY2020[61]. Impact of COVID-19 - The Company anticipates challenges from the ongoing Covid-19 pandemic, particularly with the emergence of the Omicron variant and potential future mutations[20]. - The concrete demolition services business in Hong Kong remained relatively stable despite the pandemic's impact[20]. - The Group has adapted to supply chain disruptions and manpower resource challenges due to the pandemic[20]. - The Group's performance reflects the ongoing volatility and uncertainty in the market due to the pandemic[20]. - The prolonged COVID-19 pandemic has raised concerns about investment in overseas markets, particularly in countries with low vaccination rates[26]. - The Group intends to postpone its expansion plans due to difficulties in sourcing funds amid tight liquidity for many corporations[26]. - The Company is focused on recovery as the Hong Kong economy shows signs of improvement post-pandemic[20]. Business Expansion and Strategy - The Group plans to expand its prefabricated construction business into overseas markets, particularly along the Belt and Road, in partnership with a reputable construction company[26]. - The Group's prefabricated construction aims to contribute to green building practices by reducing construction waste and improving energy efficiency[40]. - The Group established production facilities in Huizhou, China, for the research and development of precast concrete components[41]. - The expectation of a downward trend in the Chinese property market has been formed due to economic pressures and a debt crisis among property developers[25]. Financial Management and Position - As at 31 December 2021, the Group had cash and bank deposits of approximately HK$37.1 million[62]. - The gearing ratio of the Group as at 31 December 2021 was approximately 18.9[62]. - Administrative and other operating expenses decreased by approximately HK$2.6 million from approximately HK$38.9 million for FY2020 to approximately HK$36.3 million for the Reporting Period[60]. - As of December 31, 2021, the total borrowings of the Group amounted to approximately HK$64.3 million, with an annual interest rate ranging from 6.75% to 12.0%[70][74]. - HK$45.8 million of the borrowings are repayable within one year, classified as current liabilities, while HK$18.5 million are repayable over one year, classified as non-current liabilities[70][74]. - The total employee costs for the Reporting Period, including directors' emoluments, amounted to approximately HK$41.2 million, an increase from approximately HK$37.0 million in 2020[78][84]. - The Group employed 124 staff as of December 31, 2021, compared to 116 staff in 2020, indicating a growth in workforce[78][84]. - The Group does not have any material capital commitments or contingent liabilities as of December 31, 2021[76][83]. - The Group has implemented prudent financial management policies to maintain a healthy liquidity position throughout the Reporting Period[71]. - The Group's borrowings are all unsecured and denominated in Hong Kong dollars, mitigating certain financial risks[70][74]. Corporate Governance - The Board does not recommend payment of a final dividend to shareholders for the Reporting Period, consistent with the previous year[80][85]. - The Board is committed to upholding good corporate governance standards for the best interest of the Company's shareholders[101]. - The Company complied with the GEM Listing Rules throughout the year ended December 31, 2021[109]. - The Board held 7 meetings and 1 general meeting during the Reporting Period[114]. - The Company received positive confirmations of independence from all independent non-executive Directors[112]. - The Company does not have insurance cover for legal actions against Directors, believing the risk is relatively low[103]. - The Board has delegated various responsibilities to board committees for effective governance[108]. - The Company has developed policies and practices on corporate governance and compliance with legal requirements[111]. - The Audit Committee consists of three members, including Mr. Li Kar Fai Peter as Chairman, ensuring compliance with GEM Listing Rules[126]. - The Audit Committee is responsible for monitoring the integrity of the Company's financial statements and reviewing significant financial reporting judgments[132]. - The Company has adopted a continuing professional development program for directors to enhance corporate governance knowledge[119]. - The Company encourages directors to attend at least one training course on GEM Listing Rules updates related to corporate governance practices[120]. - The Company has established a policy to reimburse directors for training costs related to corporate governance and internal control[120]. Risk Management - The Group's risk management and internal control systems are designed to provide reasonable assurance against material misstatement or loss, rather than absolute assurance[185]. - Each division is responsible for identifying and managing principal risks, including ESG risks, on a quarterly basis[184]. - The Board oversees the risk management framework and is responsible for reviewing its effectiveness and adequacy[185]. - An independent internal control consultant was engaged to review the internal control system, with no significant areas of concern identified[181]. - The Group has established a risk management policy to identify, evaluate, and manage principal risks affecting the business[179]. - The Company does not have an internal audit department, relying instead on external consultants for internal control reviews[181]. - The Board has concluded that the Group's risk management and internal control system is effective and in place[189]. Shareholder Communication - The annual general meeting (AGM) is scheduled for 8 June 2022, providing a platform for communication between the Board and Shareholders[197]. - The external auditor is invited to the AGM to address queries regarding audit procedures and the auditors' report[196].
朝威控股(08059) - 2021 - 年度财报