Business Performance - The Group continued to secure existing projects and services while actively negotiating new projects and tenders to enhance business performance despite the adverse impact of the COVID-19 pandemic on the construction industry [19]. - The Group aims to execute its business strategies and utilize its competitive strengths [19]. - The COVID-19 pandemic has delayed the progress of existing projects but the Group has maintained stable operations [19]. - The Group recorded total revenue of approximately HK$149.3 million, representing an increase of approximately 14.9% compared to HK$129.9 million for the year ended 31 December 2021 [24]. - Profit attributable to equity holders of the Company was approximately HK$20.0 million, slightly down from approximately HK$20.2 million for the previous year; excluding COVID-19 related government subsidies, profit would have been approximately HK$16.0 million for the Year [24]. - The increase in staff costs was identified as the main reason for the decrease in profit attributable to equity holders [24]. - There has been an increasing number of project quotation invitations received from potential and current customers, indicating a positive market response [26]. - The Group plans to utilize net proceeds from the Listing to expand service capacity and improve operational efficiency [26]. - The Group aims to expand its team of professionals to enhance technical capabilities for future project bids [26]. - The outlook for the Group's business is cautiously optimistic due to strong demand in the infrastructure development market [27]. - Infrastructure developers are actively launching new projects with aggressive financing schemes as COVID-19 restrictions ease [25]. - The Group will proactively seek opportunities to expand its customer base and market share [26]. - The Group is focused on undertaking more building projects to enhance value for shareholders and stakeholders [26]. Corporate Governance - The ultimate controlling shareholder of the Group is Mr. Cheung Kwan Tar [18]. - The Company was incorporated on April 18, 2018, in the Cayman Islands [17]. - The registered office is located at Windward 3, Regatta Office Park, P.O. Box 1350, Grand Cayman KY1-1108, Cayman Islands [17]. - The principal place of business is at 5/F, Winning Commercial Building, 46–48 Hillwood Road, Tsim Sha Tsui, Kowloon, Hong Kong [17]. - The company has a strong governance structure with independent non-executive Directors actively participating in key committees [46]. - The management team includes professionals with advanced degrees and certifications in engineering, business administration, and corporate governance [55][59]. - The company emphasizes the importance of independent judgement in its Board decisions, enhancing overall governance and accountability [48]. - The company is committed to maintaining high standards of corporate governance through the expertise of its Directors and senior management [52]. - The diverse backgrounds of the management team contribute to a well-rounded approach to project management and corporate governance [61]. Financial Overview - The Group recorded a profit attributable to equity holders of approximately HK$20.0 million for the Year, a slight decrease from HK$20.2 million in the previous year, primarily due to increased staff costs [71]. - Revenue increased by approximately HK$19.4 million or 14.9% to approximately HK$149.3 million for the Year, driven by an increase in projects awarded [73]. - Cost of services rose by approximately HK$20.7 million or 24.5% to approximately HK$105.1 million, mainly due to higher salaries and bonuses for technical staff [74]. - Gross profit decreased by approximately HK$1.3 million or 2.8% to approximately HK$44.2 million, attributed to increased technical staff costs [80]. - Other income and gains surged by approximately HK$4.8 million or 384.3% to approximately HK$6.1 million, largely due to increased government subsidies related to COVID-19 [81]. - Administrative expenses increased by approximately HK$4.3 million or 18.9% to approximately HK$27.1 million, primarily due to rising staff costs and benefits [82]. - Income tax expense decreased by approximately HK$0.5 million or 13.9% to approximately HK$3.1 million, reflecting a decrease in taxable profit [83]. - The Group aims to improve operational efficiency and profitability while seeking opportunities to expand its customer base and market share [72]. - The increase in projects awarded during the Year contributed significantly to revenue growth [73]. Shareholder Information - The Board does not recommend the payment of a final dividend for the year, consistent with the previous year where no dividend was declared [91][97]. - There were no significant investments or material acquisitions or disposals of subsidiaries, associates, or joint ventures during the year [114][119]. - The Group maintained a nil gearing ratio as of December 31, 2022, consistent with 2021 [116][122]. - The Group had a total of 349 employees as of December 31, 2022, an increase from 290 in 2021 [106][112]. - As of December 31, 2022, the Group's cash and bank balances and short-term time deposits amounted to approximately HK$136.0 million, an increase from HK$121.0 million in 2021 [93][99]. - The Group's net current assets as of December 31, 2022, were approximately HK$185.6 million, up from HK$165.0 million in 2021 [94][100]. - Total equity attributable to owners of the Company as of December 31, 2022, was approximately HK$191.4 million, compared to HK$171.4 million in 2021 [102][108]. Environmental, Social, and Governance (ESG) - The company has committed to improving corporate social responsibility standards and complying with relevant ESG laws and regulations during the reporting period [130]. - The ESG report covers the core business of providing engineering consultancy services in Hong Kong for the year from January 1, 2022, to December 31, 2022 [131]. - The Group has established an ESG governance structure to incorporate ESG issues into business operations and decision-making processes [137]. - Regular meetings are held between the Board and operating department heads to discuss ESG-related issues and evaluate risks, targets, and strategies [138]. - The Group maintains continuous communication with stakeholders to identify their needs and drive business development [142]. - Key performance indicators (KPIs) data are disclosed in the ESG report, ensuring comparability with the previous year [136]. - The Group's stakeholders include shareholders and potential investors, with communication methods including financial reports and annual general meetings [144]. - The company emphasizes ethical and professional engineering consultancy services without compromising environmental standards [130]. - The Group's commitment to sustainability includes community involvement and fostering a better environment [130]. Emissions and Resource Management - For FY2022, nitrogen oxides (NOX) emissions increased to 3,422.32 grams from 2,795.49 grams in FY2021, representing a 22.3% rise [157]. - Sulphur oxides (SOX) emissions rose to 36.82 grams in FY2022, up from 31.87 grams in FY2021, indicating a 15.4% increase [157]. - Respiratory suspended particles (PM) emissions increased to 251.98 grams in FY2022, compared to 205.83 grams in FY2021, reflecting a 22.4% rise [157]. - Total greenhouse gas emissions for Scope 1 and Scope 2 reached 69.86 tonnes in FY2022, up from 65.81 tonnes in FY2021, marking a 4.7% increase [159]. - Emission intensity for CO2 was recorded at 0.47 tonnes per staff in FY2022, compared to 0.37 tonnes per staff in FY2021, showing a 27.0% increase [159]. - The Group aims to reduce GHG emissions intensity by 2% by 2026 compared to the baseline of 2021 [163]. - Non-hazardous waste generated was 4.47 tonnes in FY2022, down from 5.28 tonnes in FY2021, indicating a 15.4% reduction [164]. - The Group maintained zero business air travel during the year, promoting video conferencing to decrease carbon emissions [162]. - The consumption of electricity slightly increased due to office area expansion, but the Group encouraged public transportation for employees [162]. - Total electricity consumption increased to 170,814 kWh in FY2022 from 161,992 kWh in FY2021, representing a growth of approximately 6.5% [180]. - Electricity usage intensity rose to 1,162 kWh per staff member in FY2022, up from 904.98 kWh in FY2021, indicating a significant increase of about 28.4% [180]. - Total water consumption decreased to 95 m³ in FY2022 from 112.73 m³ in FY2021, reflecting a reduction of approximately 15.7% [183]. - Water consumption intensity slightly increased to 0.65 m³ per staff member in FY2022 from 0.63 m³ in FY2021 [183]. - The company aims to reduce electricity usage intensity to around 900 kWh per staff member in the coming year [174]. - The company has not encountered any significant issues in sourcing water that is fit for purpose and maintains low water consumption [181]. - The company has implemented measures to reduce paper waste, including duplex printing and electronic communication, but does not find setting a waste reduction target meaningful [171]. - The increase in energy consumption during the year is attributed to the expansion of office area to improve the working environment [174]. - The Group has established a comprehensive human resources framework covering compensation, recruitment, appraisal, dismissal, welfare, training, and development [193]. Human Resources and Employment Practices - A fair recruitment policy is in place, assessing candidates based solely on performance, experience, qualifications, and skills, without discrimination based on gender, age, race, or disability [194]. - The Group did not have any non-compliance incidents related to child or forced labor during the year [196]. - An annual appraisal process is conducted for employees, leading to appropriate salary adjustments and promotions [197]. - The Group offers an internship program for university students to nurture new talents in the construction industry, providing full-time training during summer vacations [199]. - All dismissals and terminations are conducted lawfully, with no instances of non-compliance reported regarding compensation, recruitment, or promotion practices [200].
宝燵控股(08601) - 2022 - 年度财报