Financial Performance - The company recorded revenue of approximately HKD 324.9 million for the year, a decrease of about 47.4% compared to approximately HKD 617.8 million for the previous year[32]. - Revenue from the construction business segment was approximately HKD 319.4 million, down about 47% from approximately HKD 606.1 million in the previous year[32]. - The securities investment segment reported revenue of approximately HKD 3.7 million, a decrease of about 64% from approximately HKD 10.3 million in the previous year[32]. - The property investment segment saw an increase in revenue to approximately HKD 600,000, up about 260% from approximately HKD 200,000 in the previous year[32]. - The lending business segment recorded revenue of approximately HKD 1.3 million, an increase of about 10% from approximately HKD 1.1 million in the previous year[32]. - The net profit attributable to the owners of the company was approximately HKD 15.3 million, compared to HKD 9.9 million in the previous year[32]. - The overall gross profit increased by approximately HKD 1,000,000 or 2% to about HKD 49,900,000, with a gross margin of 15.4%, up 7.5 percentage points from 7.9% in the previous year[56]. - Basic earnings per share were HKD 0.0767, compared to HKD 0.0493 in the previous year[50]. - Other income and gains decreased by 78% to approximately HKD 1,000,000 from HKD 4,500,000 in the previous year[57]. Business Strategy and Market Outlook - The company plans to continue seeking attractive growth opportunities in China, Hong Kong, and other regions to drive long-term financial returns for shareholders[34]. - The construction market in Hong Kong is expected to remain competitive and challenging, but the company aims to enhance its market position and diversify its customer base[33]. - The company will adopt a prudent strategy for project bidding to address challenges in the construction and engineering sectors[31]. - Potential opportunities may arise from the Hong Kong government's promotion of modular integrated construction methods and recent developments in the Greater Bay Area[33]. - The group aims to enhance its market position in Hong Kong by attracting larger corporate clients and bidding for capital-intensive projects, driven by an upward trend in overall building and construction expenditure[86]. - The company will focus on its interior decoration business in Hong Kong and Macau following the sale of its construction business, adopting a prudent strategy for project bidding[81]. Financial Position and Investments - The company managed a fair value of approximately HKD 19,000,000 in listed equity investments and non-listed debt investments as of March 31, 2022[46]. - Prepayments, deposits, and other receivables decreased by approximately HKD 56,000,000 or 77% to reflect the sale of DCEL Group and the reduction in cash held in licensed corporate securities accounts[62]. - Contract assets decreased by approximately HKD 54,200,000 or 59.3% due to the cancellation of consolidated accounts from the sale of DCEL Group[63]. - Accounts payable decreased by approximately HKD 38,800,000 or 82.2%, primarily due to the cancellation of consolidated accounts from the sale of DCEL Group[64]. - Other payables and accrued expenses decreased by approximately HKD 54,300,000 or 34.3%, mainly due to the sale of DCEL Group and project completion in the construction segment[65]. - The group holds approximately HKD 19,000,000 in equity and debt investments at fair value, with significant investments including HKD 1,092,000 in Heng Tai Yu Group Holdings Limited, representing 12.4% of the group's net asset value[95]. - The group sold certain investments during the reporting period, generating proceeds of approximately HKD 27,100,000, resulting in a net gain of approximately HKD 3,800,000[2]. Corporate Governance - The board of directors is committed to maintaining high standards of corporate governance and business ethics[9]. - The board of directors consists of five members, including two executive directors and three independent non-executive directors[117]. - All directors have sufficient experience to effectively perform their duties, and the board has complied with GEM listing rules by appointing at least three independent non-executive directors[119]. - The company has established formal and transparent procedures for the appointment and succession of directors, ensuring compliance with GEM listing rules[120]. - Each director is required to retire and be re-elected by shareholders at least once every three years[121]. - The company has established a diversity policy for board members, considering various factors such as gender, age, and professional experience[152]. - The company allows shareholders to propose candidates for the board, with details provided in a circular sent to shareholders[158]. - The board has the final decision-making authority regarding any proposed candidates for shareholder meetings[160]. Risk Management and Internal Controls - The group has adopted a risk management system to manage business and operational risks, which includes identifying risk sources and assessing their potential impact[182][183]. - The internal control system is designed in accordance with the COSO 2013 framework, aiming for operational effectiveness, reliable financial reporting, and compliance with applicable laws[186]. - The board has concluded that the risk management and internal control systems are effective and adequate, although they are designed to manage rather than eliminate risks[198]. - The internal audit department, composed of qualified professionals, independently evaluates the risk management and internal control systems[197]. - There were no identified significant deficiencies in internal controls during the reporting period[196]. Employee and Operational Information - Employee benefit expenses for the reporting period totaled approximately HKD 36,000,000, an increase from approximately HKD 33,000,000 in the previous year[6]. - The group had 92 employees as of March 31, 2022, primarily based in Hong Kong[6]. - The company has no major investment or capital asset plans as of March 31, 2022[3]. Audit and Compliance - The audit committee consists of three independent non-executive directors, including one with relevant professional qualifications in accounting or financial management[138]. - The audit committee held four meetings during the review period to assess recent financial performance and compliance procedures[141]. - The company appointed a new auditor, Tianzhi Hong Kong CPA Limited, effective from September 20, 2021, following the resignation of Ernst & Young[175]. - The audit fees for the year ended March 31, 2022, amounted to HKD 1,100,000 for audit services and HKD 114,000 for non-audit services[175]. - The company has adopted a code of conduct for securities trading, ensuring compliance with relevant regulations during the review period[176].
智城发展控股(08268) - 2022 - 年度财报