Financial Performance - The group's revenue decreased by approximately 46.5% to about HKD 44.1 million from approximately HKD 82.4 million in the previous year[9]. - Gross profit fell by about 74.4%, from approximately HKD 35.6 million to about HKD 9.1 million[9]. - The company recorded a loss attributable to owners of approximately HKD 5.2 million, compared to a profit of HKD 16.7 million in the previous year[10]. - Revenue from office and elderly care projects accounted for 95.8% of total revenue, amounting to HKD 42.3 million, compared to HKD 28.8 million (34.9%) in the previous year[43]. - The gross profit margin for office and elderly care projects dropped from approximately 43.9% in the previous year to 20.9% in the current year[51]. - The overall gross profit margin decreased from about 43.3% to approximately 20.7%, primarily due to reduced margins in elderly care design and renovation projects[53]. - Administrative expenses remained relatively stable at approximately HKD 15.0 million this year compared to HKD 14.2 million last year[54]. - The company has a total distributable reserve of approximately HKD 34.0 million as of December 31, 2021, compared to HKD 34.3 million in 2020[96]. - The company relies on five major clients for over 50% of its total revenue, indicating a significant risk if relationships with these clients deteriorate[80]. - The company does not have long-term contracts with its clients, which poses a risk to its business operations and financial performance if clients choose not to engage the company in the future[80]. - The company’s financial performance may be adversely affected if it fails to retain key management personnel or hire suitable staff[80]. Dividends and Shareholder Returns - The board proposed a final dividend of HKD 0.003 per share, unchanged from the previous year[11]. - The board proposed a final dividend of HKD 0.003 per share for the year ended December 31, 2021, amounting to HKD 3.0 million, consistent with the previous year[76]. - The company aims to enhance long-term shareholder returns by focusing on its core business[13]. - The company will continue to invest more resources to undertake larger projects and explore new business opportunities to maximize long-term returns for shareholders[41]. Market Focus and Strategy - The company plans to focus on the healthcare sector to capture design and renovation projects due to the aging population in Hong Kong[13]. - The company remains optimistic about the future of the interior design and renovation market and will continue to invest resources in commercial and healthcare center projects[13]. - The company plans to strengthen its market responsiveness and continue expanding its business in the interior design and renovation sector[41]. - The company aims to benefit from the increasing demand for healthcare-related facilities due to heightened public awareness of health issues and an aging population in Hong Kong[41]. - The company has a strategic focus on expanding its market presence through innovative design solutions and project management services[20]. COVID-19 Impact and Risk Management - The ongoing impact of the COVID-19 pandemic has caused cash flow issues for some project owners, leading to delays in project progress[13]. - The company will closely monitor risks and uncertainties related to COVID-19 and take appropriate measures to mitigate risks as necessary[13]. - The company is committed to evaluating the ongoing effects of the pandemic on its operations and financial performance[13]. - The company has implemented preventive measures to maintain a hygienic work environment amid the ongoing COVID-19 pandemic[39]. - The group recognized a trade receivables loss provision of HKD 2.8 million as of December 31, 2021, down from HKD 3.9 million in 2020, with HKD 0.4 million related to customers with known financial difficulties[58]. Governance and Board Structure - The board consists of six members, including three executive directors and three independent non-executive directors, ensuring a diverse governance structure[145]. - The independent non-executive directors confirmed their independence in accordance with GEM listing rules[109]. - The board has a clear division of responsibilities between the chairman and the CEO, enhancing operational efficiency[143]. - The company has implemented a board diversity policy, considering various factors such as gender, age, and professional experience[150]. - The audit committee, established in November 2016, consists of three members and is responsible for overseeing financial reporting and risk management[160]. - The board meets regularly, with all members receiving at least 14 days' notice for meetings, ensuring informed decision-making[159]. - The company provides ongoing professional development for all directors to enhance their knowledge of governance and compliance[157]. - The board retains decision-making authority on major matters, including financial policies and significant transactions[147]. - The company has arranged appropriate insurance for directors against legal actions related to their responsibilities[149]. Audit and Compliance - The independent auditor's report confirms that the consolidated financial statements fairly reflect the group's financial position as of December 31, 2021[188]. - The financial statements were prepared in accordance with Hong Kong Financial Reporting Standards, ensuring compliance with disclosure requirements[188]. - The audit procedures included evaluating and verifying management's estimates of expected credit losses[200]. - The audit involved obtaining confirmations from major clients to verify recognized revenue for the year[197]. - The company has implemented internal controls to manage the revenue recognition process for its services[197]. - The audit procedures confirmed that the judgments and estimates used by management in the revenue recognition process were supported by available evidence[197]. - The company assesses the inherent risk of material misstatement in revenue recognition due to the complexity of contracts and management's estimates[196]. Shareholder Communication - The company has established a shareholder communication policy to facilitate timely access to comprehensive information for shareholders and potential investors[178]. - A shareholder annual general meeting was held during the year ending December 31, 2021, enhancing communication with existing and potential investors[179]. - The company encourages two-way communication with institutional and private investors, welcoming suggestions and inquiries[179].
K W NELSON GP(08411) - 2021 - 年度财报