Financial Performance - The group's revenue decreased by approximately 3.6% to about HKD 42.5 million from approximately HKD 44.1 million in the previous year[7]. - Gross profit increased by approximately 30.9% from about HKD 9.1 million to approximately HKD 12.0 million[7]. - The company recorded a loss attributable to owners of approximately HKD 3.4 million, compared to a loss of HKD 5.2 million in the previous year[8]. - The group's revenue for the year ended December 31, 2022, decreased by approximately 3.6% to about HKD 42.5 million from approximately HKD 44.1 million in the previous year[38]. - The group's gross profit increased by approximately 30.9%, rising from about HKD 9.1 million in the previous year to approximately HKD 12.0 million in the current year[38]. - The loss attributable to the owners of the company for the year was approximately HKD 3.4 million, compared to a loss of HKD 5.2 million in the previous year[39]. - The company reported a 30% increase in customer satisfaction ratings, attributed to improved service delivery and project management practices[21]. Market Outlook and Strategy - The board believes that the COVID-19 pandemic will eventually subside, but the company will continue to assess its impact on operations and financial performance[9]. - The company anticipates an increase in healthcare centers, medical clinics, and elderly care homes due to the aging population in Hong Kong[9]. - The company plans to focus on the healthcare sector to secure design and renovation projects[9]. - The company aims to enhance long-term shareholder returns by investing more resources in the interior design and renovation business for commercial spaces and medical centers[9]. - The management remains optimistic about the future of the interior design and renovation market, particularly in commercial spaces and healthcare facilities[41]. - The company plans to strengthen its market position and continue business expansion by undertaking more large-scale projects[41]. Operational Efficiency and Development - K W Nelson is actively investing in new product development, with a budget allocation of HKD 5 million for innovative interior design solutions and technologies[21]. - The company has implemented new strategies to improve operational efficiency, resulting in a 12% reduction in project turnaround time[21]. - The group completed and was awarded several projects in elderly care homes, office properties, and medical centers during the year[40]. - The group has implemented preventive measures to maintain a hygienic working environment, including regular disinfection of workspaces and requiring staff and subcontractors to wear masks[40]. Client and Revenue Concentration - The revenue from the group's five largest clients accounts for over 50% of total revenue, indicating a significant reliance on these clients[79]. - The largest client contributed 62.3% to the sales revenue, while the total revenue from the top five clients reached 90.1%[97]. - The group does not have long-term contracts with its clients, which poses a risk to business operations and financial performance if clients choose not to engage the group in the future[79]. - The group relies on subcontractors for executing interior renovation projects, and the absence of long-term contracts with these subcontractors may lead to operational delays and financial impacts[79]. Sustainability and Corporate Governance - The group has implemented green office measures to promote sustainability, including resource efficiency and waste reduction initiatives[81]. - The company has adopted corporate governance practices in line with GEM listing rules, with a commitment to continuous improvement[139]. - The company has established a procedure for directors to seek independent professional advice at the company's expense[160]. - The company has implemented appropriate insurance arrangements for legal actions against directors[152]. Shareholder Communication and Engagement - The board emphasizes the importance of good communication with shareholders and has adopted a shareholder communication policy to facilitate timely access to information[185]. - The company encourages two-way communication with institutional and private investors, providing a platform for direct communication during the annual general meeting[185]. - Shareholders can request a special general meeting if they hold at least 10% of the issued share capital, and the board must convene the meeting within two months of receiving the request[191]. Risk Management and Internal Control - The board is responsible for ensuring effective risk management and internal control systems, which are designed to manage risks rather than eliminate them[179]. - The internal control policy covers various operational aspects, including risk assessment, financial reporting, cost management, and IT system monitoring, and is reviewed at least annually[180]. - The risk management team conducts quarterly risk identification and analysis, assessing the consequences and likelihood of risks, and develops management plans to mitigate them[181]. - The board concluded that the risk management and internal control systems were effective and adequate as of December 31, 2022[181]. Share Capital and Dividends - The company has adopted a dividend policy prioritizing cash dividends, subject to various financial and legal considerations[130]. - The board did not recommend a final dividend for the year ended December 31, 2022, compared to a dividend of HKD 0.003 per share in 2021[73]. - The total number of issued shares as of December 31, 2022, is 1,000,000,000[123].
K W NELSON GP(08411) - 2022 - 年度财报