快意智能(08040) - 2024 - 年度业绩

Company Information and Disclaimer This section provides an overview of Coolpoint Innonism Holding Limited, its listing on GEM, and associated investment risks Company Overview Coolpoint Innonism Holding Limited is a Cayman Islands-registered company listed on the Hong Kong Stock Exchange GEM with stock code 8040 - Company name: Coolpoint Innonism Holding Limited[2] - Registered in: Cayman Islands[2] - Listed on: Hong Kong Stock Exchange GEM, stock code: 8040[2] GEM Listing Characteristics and Risk Warnings The GEM market targets small and medium-sized companies, carrying higher investment risks that investors should carefully consider - The GEM market is positioned for small and medium-sized companies, entailing higher investment risks[2] - GEM securities may be subject to significant market volatility and do not guarantee high liquidity[2] Financial Highlights The Group experienced significant revenue growth in FY2024, but gross profit substantially declined, turning from profit to loss with expanded loss per share, mainly due to increased service costs and reduced government subsidies 2024 Financial Highlights vs. 2023 Financial Highlights | Indicator | FY2024 (HK$ Thousand) | FY2023 (HK$ Thousand) | Year-on-Year Change (%) | | :--- | :--- | :--- | :--- | | Revenue | 345,600 | 260,500 | +32.7% | | Gross Profit | 12,000 | 21,700 | -44.7% | | (Loss)/Profit and Total Comprehensive (Expense)/Income Attributable to Owners of the Company | (14,500) | 1,200 | Turned from profit to loss | | (Loss)/Earnings Per Share | (4.28) HK Cents | 0.36 HK Cents | Turned from profit to loss | Financial Results This section details the Group's financial performance, including the consolidated statement of profit or loss and other comprehensive income, and the consolidated statement of financial position Consolidated Statement of Profit or Loss and Other Comprehensive Income In FY2024, the Group's revenue grew by 32.7% to HK$345,630 thousand, but a significant increase in cost of services led to a 44.7% decline in gross profit, resulting in a loss attributable to owners of the company of HK$14,545 thousand Key Data from Consolidated Statement of Profit or Loss and Other Comprehensive Income | Indicator | 2024 (HK$ Thousand) | 2023 (HK$ Thousand) | Change | | :--- | :--- | :--- | :--- | | Revenue | 345,630 | 260,473 | +32.7% Growth | | Cost of Services | (333,643) | (238,783) | Increased | | Gross Profit | 11,987 | 21,690 | -44.7% Decrease | | Other Income and Gains/(Losses), Net | 32 | 1,455 | Significantly Decreased | | Reversal/(Provision) for Impairment Loss on Trade Receivables | 922 | (1,432) | Turned from provision to reversal | | Reversal/(Provision) for Impairment Loss on Other Receivables | (1,075) | (231) | Increased provision | | Reversal/(Provision) for Impairment Loss on Contract Assets | (4,862) | (1,027) | Increased provision | | Administrative Expenses | (19,147) | (18,610) | Increased | | Finance Costs | (2,404) | (576) | +317.4% Increase | | (Loss)/Profit Before Tax | (14,547) | 1,269 | Turned from profit to loss | | Income Tax Expense | – | (101) | Decreased | | (Loss)/Profit and Total Comprehensive (Expense)/Income for the Year | (14,547) | 1,168 | Turned from profit to loss | | (Loss)/Profit and Total Comprehensive (Expense)/Income Attributable to Owners of the Company for the Year | (14,545) | 1,188 | Turned from profit to loss | | Basic (Loss)/Earnings Per Share (HK Cents) | (4.28) | 0.36 | Turned from earnings to loss | Consolidated Statement of Financial Position As of March 31, 2024, the Group's total assets less current liabilities increased, but net assets and equity attributable to owners of the company both decreased, primarily due to a significant rise in non-current liabilities Key Data from Consolidated Statement of Financial Position | Indicator | 2024 (HK$ Thousand) | 2023 (HK$ Thousand) | Change | | :--- | :--- | :--- | :--- | | Non-current Assets | | | | | Property, Plant and Equipment | 2,031 | 1,146 | Increased | | Right-of-use Assets | 2,944 | 3,588 | Decreased | | Financial Assets at Fair Value Through Profit or Loss | 3,678 | 3,675 | Slightly Increased | | Current Assets | | | | | Inventories | 657 | 163 | Increased | | Trade and Other Receivables | 43,383 | 14,021 | Significantly Increased | | Contract Assets | 91,651 | 88,338 | Increased | | Bank Balances and Cash | 23,274 | 26,326 | Decreased | | Current Liabilities | | | | | Trade and Other Payables | 34,854 | 20,380 | Increased | | Contract Liabilities | 13,738 | 12,263 | Increased | | Bank and Other Borrowings | 7,409 | 13,000 | Decreased | | Net Current Assets | 93,482 | 76,503 | Increased | | Non-current Liabilities | | | | | Bank and Other Borrowings | 27,000 | – | Significantly Increased | | Net Assets | 68,352 | 82,850 | Decreased | | Equity Attributable to Owners of the Company | 68,178 | 82,723 | Decreased | Notes to the Financial Statements This section provides detailed notes on the Group's financial statements, covering general information, basis of preparation, adoption of new accounting standards, and specific financial line items General Information The Company was incorporated in the Cayman Islands on March 8, 2017, and listed on GEM on February 14, 2018, primarily providing renovation and Nano-AM application services in Hong Kong - The Company was incorporated on March 8, 2017, and listed on GEM on February 14, 2018[12] - The Group's principal activities are renovation services and Nano-AM application services in Hong Kong[13] - The ultimate holding company is Advance Goal Group Limited, held by Mr. Cheng Tsang Fu, Ms. Liu Li Li, and former director Mr. Cheng Tsang Wai[13] Basis of Preparation The consolidated financial statements are prepared in accordance with Hong Kong Financial Reporting Standards issued by the HKICPA, primarily on a historical cost basis, with certain financial instruments measured at fair value - The consolidated financial statements are prepared in accordance with Hong Kong Financial Reporting Standards issued by the Hong Kong Institute of Certified Public Accountants[15] - The statements are primarily prepared on a historical cost basis, with certain financial instruments measured at fair value at the end of the reporting period[15] Adoption of New and Revised Hong Kong Financial Reporting Standards Several new and revised HKFRSs were first applied this year, including amendments related to insurance contracts, accounting estimates, deferred tax, and accounting policy disclosures, which had no material impact on the Group's financial position or performance - Hong Kong Financial Reporting Standard 17, amendments to Hong Kong Accounting Standard 8, Hong Kong Accounting Standard 12, and amendments to Hong Kong Accounting Standard 1 and Hong Kong Financial Reporting Standards Practice Statement 2 were first applied this year[17] - The application of new and revised standards had no material impact on the Group's financial position and performance for the current and prior years[17] - The accounting impact of the abolition of the MPF offsetting mechanism against long service payments in Hong Kong has been retrospectively applied, but its effect on long service liabilities is minimal[24][25] Standards and Amendments to Existing Standards Effective in the Current Year Mandatory standards effective this year include HKFRS 17 (Insurance Contracts), HKAS 8 (Definition of Accounting Estimates), HKAS 12 (Deferred Tax), and HKAS 1 & HKFRS Practice Statement 2 (Disclosure of Accounting Policies), which had no material financial impact but may affect disclosures - Amendments to HKAS 8 “Definition of Accounting Estimates” clarified the distinction between changes in accounting estimates, changes in accounting policies, and error corrections, with no impact on the consolidated financial statements[18][19] - Amendments to HKAS 1 and HKFRS Practice Statement 2 “Disclosure of Accounting Policies” changed “significant accounting policies” to “material accounting policy information” and clarified materiality judgments, potentially affecting accounting policy disclosures[20][22] - The guidance on the abolition of the MPF offsetting mechanism against long service payments in Hong Kong has been retrospectively implemented, but its impact on long service liabilities is negligible[24][25] Issued but Not Yet Effective Hong Kong Financial Reporting Standards The Group has not early adopted several issued but not yet effective HKFRSs, including amendments related to asset sales between an investor and its associate or joint venture, sale and leaseback, classification of liabilities, and supplier finance arrangements, which are not expected to have a material impact - The Group has not early adopted amendments to HKFRS 10 and HKAS 28, HKFRS 16, HKAS 1, HKAS 7 and HKFRS 7, and HKAS 21[26] - Amendments to HKAS 1 “Classification of Liabilities as Current or Non-current” and “Non-current Liabilities with Covenants” will be effective for annual periods beginning on or after January 1, 2024, and are not expected to result in reclassification of the Group’s liabilities[29][30] Revenue and Segment Information The Group's revenue primarily derives from renovation, refurbishment, and Nano-AM projects, with total revenue growing by 32.7% in FY2024, but overall gross profit declined by 44.7% due to cost overruns and lower margins - The Group's principal operating segments include renovation, refurbishment, and Nano-AM projects[34][35] Revenue and Gross Profit by Segment (HK$ Thousand) | Segment | 2024 Revenue | 2023 Revenue | Revenue Change | 2024 Gross Profit | 2023 Gross Profit | Gross Profit Change | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | Renovation Projects | 255,786 | 172,991 | +47.9% | 10,516 | 11,698 | -10.28% | | Refurbishment Projects | 85,776 | 83,010 | +3.3% | 39 | 8,279 | -99.53% | | Nano-AM Projects | 4,068 | 4,472 | -9.03% | 1,432 | 1,713 | -16.40% | | Total | 345,630 | 260,473 | +32.7% | 11,987 | 21,690 | -44.7% | - Gross profit for refurbishment projects significantly decreased due to cost overruns on several large projects during the year[85] - Gross profit for renovation projects decreased primarily due to lower gross profit margins on several large renovation projects undertaken during the year[85] Segment Revenue and Results In FY2024, the Group's total revenue was HK$345,630 thousand, a 32.7% increase year-on-year, with renovation projects contributing the largest share of revenue and profit, while refurbishment projects recorded a loss FY2024 Segment Revenue and Profit/(Loss) | Segment | Revenue (HK$ Thousand) | % of Total | Profit/(Loss) (HK$ Thousand) | | :--- | :--- | :--- | :--- | | Renovation Projects | 255,786 | 74.0 | 10,835 | | Refurbishment Projects | 85,776 | 24.8 | (4,220) | | Nano-AM Projects | 4,068 | 1.2 | 1,432 | | Total | 345,630 | 100.0 | 8,047 | - Segment revenue refers to revenue from external customers, with no inter-segment sales in the current year[38] Other Segment Information In FY2024, the Group's total capital expenditure was HK$3,393 thousand, depreciation expense was HK$2,895 thousand, and total impairment losses were HK$5,015 thousand, mainly from increased impairment losses on contract assets FY2024 Other Segment Information | Indicator | Amount (HK$ Thousand) | | :--- | :--- | | Total Capital Expenditure | 3,393 | | Total Depreciation Expense | 2,895 | | Impairment Loss (Reversed)/Recognized on Trade Receivables | (922) | | Impairment Loss Recognized on Contract Assets | 4,862 | | Impairment Loss Recognized on Other Receivables (Unallocated) | 1,075 | | Total Impairment Losses | 5,015 | - The Group's revenue and all non-current assets are derived from Hong Kong[43] Other Income and Gains/(Losses), Net The Group's other income and gains, net, significantly decreased from HK$1,455 thousand in 2023 to HK$32 thousand in 2024, primarily due to reduced government subsidies Other Income and Gains/(Losses), Net Comparison | Item | 2024 (HK$ Thousand) | 2023 (HK$ Thousand) | | :--- | :--- | :--- | | Bank interest income | 232 | 133 | | Miscellaneous income | 24 | 15 | | Fair value change in financial assets at fair value through profit or loss | 16 | (204) | | Government grants from "Employment Support Scheme" | – | 1,490 | | Government grants from "Distance Business Programme" | – | 23 | | Loss on disposal of property, plant and equipment | (227) | – | | Net exchange loss | (13) | (2) | | Total | 32 | 1,455 | - Other income and gains, net, decreased by approximately HK$1,423 thousand, mainly due to a reduction in government subsidies of approximately HK$1,513 thousand[87] Finance Costs The Group's finance costs significantly increased by 317.4% to HK$2,404 thousand in FY2024, primarily due to increased interest on amounts due to the ultimate holding company and bank and other borrowings Finance Costs Comparison | Item | 2024 (HK$ Thousand) | 2023 (HK$ Thousand) | | :--- | :--- | :--- | | Interest on amount due to ultimate holding company | 765 | – | | Interest on bank and other borrowings | 1,467 | 396 | | Interest on lease liabilities | 172 | 180 | | Total | 2,404 | 576 | - Finance costs increased by approximately 317.4%, mainly due to an increase in interest from related party loans of approximately HK$1,700 thousand[90] (Loss)/Profit Before Tax The Group recorded a loss before tax of HK$14,547 thousand in FY2024, compared to a profit of HK$1,269 thousand in FY2023, primarily due to decreased gross profit, reduced other income, increased impairment losses, and higher finance costs (Loss)/Profit Before Tax Related Deductions | Item | 2024 (HK$ Thousand) | 2023 (HK$ Thousand) | | :--- | :--- | :--- | | Total directors' emoluments | 3,664 | 5,537 | | Total other staff costs | 35,644 | 31,540 | | Total Staff Costs | 39,308 | 37,077 | | Auditor's remuneration | 530 | 530 | | Depreciation of property, plant and equipment | 571 | 459 | | Depreciation of right-of-use assets | 2,324 | 2,382 | Income Tax Expense The Group had no income tax expense in FY2024, compared to HK$101 thousand in FY2023, and has unutilised tax losses of approximately HK$21,457 thousand available for offset against future profits, for which no deferred tax asset was recognised Income Tax Expense Comparison | Item | 2024 (HK$ Thousand) | 2023 (HK$ Thousand) | | :--- | :--- | :--- | | Hong Kong Profits Tax – Current year provision | – | 101 | - The Group has unutilised tax losses of approximately HK$21,457 thousand (2023: HK$7,448 thousand) that can be carried forward indefinitely, but no deferred tax asset was recognised[49] Dividends The Board of Directors does not recommend the payment of any dividends for FY2024, consistent with FY2023 - The Board of Directors does not recommend the payment of any dividends for the current year (2023: nil)[50] (Loss)/Earnings Per Share The Group's basic loss per share was 4.28 HK Cents in FY2024, compared to earnings per share of 0.36 HK Cents in FY2023, primarily due to the loss attributable to owners of the company for the year (Loss)/Earnings Per Share Comparison | Indicator | 2024 | 2023 | | :--- | :--- | :--- | | (Loss)/Profit for the year attributable to owners of the Company (HK$ Thousand) | (14,545) | 1,188 | | Weighted average number of ordinary shares in issue for the year (Thousand shares) | 340,000 | 333,260 | | Basic (Loss)/Earnings Per Share (HK Cents) | (4.28) | 0.36 | - Diluted loss/earnings per share is not presented as there are no potential ordinary shares in issue[51] Trade and Other Receivables The Group's total trade and other receivables significantly increased from HK$14,021 thousand in 2023 to HK$43,383 thousand in 2024, with a decrease in impairment provision for trade receivables but an increase for other receivables Trade and Other Receivables Comparison | Item | 2024 (HK$ Thousand) | 2023 (HK$ Thousand) | | :--- | :--- | :--- | | Total trade receivables | 44,300 | 14,785 | | Less: Impairment loss recognised | (918) | (1,840) | | Trade receivables net of impairment loss | 43,382 | 12,945 | | Total other receivables | 1 | 1,554 | | Less: Impairment loss recognised | – | (478) | | Other receivables net of impairment loss | 1 | 1,076 | | Total Trade and Other Receivables | 43,383 | 14,021 | Ageing Analysis of Overdue but Not Impaired Trade Receivables | Ageing | 2024 (HK$ Thousand) | 2023 (HK$ Thousand) | | :--- | :--- | :--- | | 0 to 30 days | 33,331 | 9,724 | | 31 to 60 days | 5,087 | 914 | | 61 to 90 days | 4,345 | – | | Over 90 days | 619 | 2,307 | | Total | 43,382 | 12,945 | - Impairment loss provision for trade receivables decreased from HK$1,840 thousand at the beginning of the year to HK$918 thousand at year-end, with a reversal of HK$922 thousand during the year[56] - Impairment loss provision for other receivables decreased from HK$478 thousand at the beginning of the year to HK$0 thousand at year-end, with HK$1,075 thousand impairment loss recognised and HK$1,553 thousand of written-off other receivables during the year[59] Contract Assets / Contract Liabilities The Group's total contract assets slightly increased, but recognised impairment losses significantly decreased, while contract liabilities also increased, mainly from renovation projects Contract Assets and Contract Liabilities Comparison | Item | 2024 (HK$ Thousand) | 2023 (HK$ Thousand) | | :--- | :--- | :--- | | Contract Assets | | | | Renovation Projects | 76,027 | 67,330 | | Refurbishment Projects | 17,322 | 25,028 | | Subtotal | 93,349 | 92,358 | | Less: Impairment loss recognised | (1,698) | (4,020) | | Net Contract Assets | 91,651 | 88,338 | | Contract Liabilities | | | | Renovation Projects | 8,765 | 7,262 | | Refurbishment Projects | 4,538 | 4,747 | | Nano-AM Projects | 435 | 254 | | Total Contract Liabilities | 13,738 | 12,263 | - Contract assets primarily relate to the right to consideration for completed but unbilled work, which are reclassified as trade receivables when the right becomes unconditional[59] - Retention money held by customers is included in contract assets, with approximately HK$18,959 thousand expected to be recovered after 12 months[61] - Impairment loss provision for contract assets decreased from HK$4,020 thousand at the beginning of the year to HK$1,698 thousand at year-end, with HK$4,862 thousand impairment loss recognised and HK$7,184 thousand of written-off contract assets during the year[63] - Revenue recognised in the current year related to contract liabilities brought forward was HK$11,426 thousand, mainly from renovation and refurbishment projects[67] Trade and Other Payables The Group's total trade and other payables increased from HK$20,380 thousand in 2023 to HK$34,854 thousand in 2024, mainly due to increases in trade payables, accrued interest on amounts due to the ultimate holding company, and accrued interest on loans from the Company's directors Trade and Other Payables Comparison | Item | 2024 (HK$ Thousand) | 2023 (HK$ Thousand) | | :--- | :--- | :--- | | Trade payables | 28,787 | 16,754 | | Accrued interest on amount due to ultimate holding company | 286 | – | | Accrued interest on loans from directors of the Company | 743 | – | | Other accruals and payables | 5,038 | 3,626 | | Total | 34,854 | 20,380 | Ageing Analysis of Trade Payables | Ageing | 2024 (HK$ Thousand) | 2023 (HK$ Thousand) | | :--- | :--- | :--- | | 1–30 days | 20,149 | 16,528 | | 31–60 days | 7,575 | 25 | | 61–90 days | 1,036 | 25 | | Over 90 days | 27 | 176 | | Total | 28,787 | 16,754 | Share Capital As of March 31, 2024, the Company's issued share capital was HK$3,400 thousand, comprising 340,000 thousand ordinary shares with a par value of HK$0.01 each, consistent with the previous year Share Capital Details | Item | Number of Shares (Thousand shares) | Amount (HK$ Thousand) | | :--- | :--- | :--- | | Authorised share capital (Ordinary shares of HK$0.01 each) | 10,000,000 | 100,000 | | Issued and fully paid share capital (as at March 31, 2024) | 340,000 | 3,400 | Management Discussion and Analysis This section provides a comprehensive review of the Group's business operations, financial performance, liquidity, capital structure, and future outlook Business Review and Outlook The Group primarily provides renovation, refurbishment, and Nano-AM application services in Hong Kong, securing major projects in FY2024 and expanding Nano-AM into marine maintenance, with plans to further develop high-end markets and Nano-AM applications - The Group is principally engaged in providing renovation services, refurbishment services, and Nano-AM application services in Hong Kong[72] - In FY2024, the Group was awarded 11 major projects (9 renovation, 2 refurbishment) with a total contract sum of approximately HK$480,400 thousand, contributing approximately HK$148,300 thousand in revenue[74] - The Group holds an exclusive sales license for Nano-AM (nanophotocatalytic anti-fouling material), successfully expanding into marine maintenance and planning to apply it to renovation and refurbishment projects to diversify revenue streams[75][77] - Looking ahead, the Board believes demand for high-end renovation and refurbishment services will remain strong, and the Group will continue to explore this market[77] Renovation and Refurbishment Services The Group's renovation and refurbishment services cater to property developers, main contractors, and property owners/tenants in the private sector, managing project execution and defect rectification - Clients include property developers, main contractors/direct contractors, and property owners/tenants[73] - Services cover interior renovation and refurbishment for residential apartments, show flats, clubhouses, sales offices, common areas, offices, shopping malls, and shops in Hong Kong[73] - The Group is responsible for overall project execution, including planning, coordination, monitoring, supervision, and defect rectification during the warranty period[73] Nano-AM Application Services The Group holds an exclusive sales license for Nano-AM, an eco-friendly nanophotocatalytic anti-fouling material, successfully applying it to marine maintenance and planning to integrate it into renovation and refurbishment projects to expand revenue - The Group holds an exclusive sales license for Nano-AM (nanophotocatalytic anti-fouling material), used for surface disinfection and protective coatings[75] - Successfully expanded into marine maintenance and maintenance business, and exploring other application opportunities for Nano-AM in the construction materials market[77] Outlook The Board anticipates strong demand for high-end renovation and refurbishment services, and the Group will continue to explore this market while actively developing the significant potential of Nano-AM applications - The Board believes demand for high-end renovation and refurbishment services will remain strong, and the Group will continue to explore this market[77] - Nano-AM applications have significant development potential and will bring new revenue growth points for the Group[77] Financial Review The Group's FY2024 revenue grew by 32.7%, driven by renovation projects, but gross profit significantly declined by 44.7% due to refurbishment project cost overruns and lower renovation margins, leading to a net loss for the year - The Group's revenue primarily derives from renovation services, refurbishment services, and Nano-AM application services[78] - Overall gross profit decreased by 44.7% from HK$21,700 thousand in 2023 to HK$12,000 thousand in 2024[85] - The loss attributable to owners of the Company for the current year was approximately HK$14,500 thousand, compared to a profit of approximately HK$1,200 thousand last year[92] Revenue Total revenue in FY2024 was approximately HK$345,600 thousand, a 32.7% year-on-year increase, with renovation project revenue growing by 47.9% to HK$255,800 thousand, driven by large projects Revenue by Operating Segment | Segment | 2024 (HK$ Thousand) | 2024 (%) | 2023 (HK$ Thousand) | 2023 (%) | | :--- | :--- | :--- | :--- | :--- | | Renovation Projects | 255,786 | 74.0 | 172,991 | 66.4 | | Refurbishment Projects | 85,776 | 24.8 | 83,010 | 31.9 | | Nano-AM Projects | 4,068 | 1.2 | 4,472 | 1.7 | | Total | 345,630 | 100.0 | 260,473 | 100.0 | - Renovation project revenue increased by approximately 47.9%, mainly due to increased contributions from several large renovation projects in Pak Shek Kok, Jordan, Wong Chuk Hang, The Peak, and Lantau Island[81] Cost of Services and Gross Profit Cost of services generally increased with revenue, but overall gross profit decreased by 44.7% to HK$12,000 thousand year-on-year, primarily due to cost overruns in refurbishment projects and lower gross margins in renovation projects - Cost of services mainly includes subcontracting costs, material costs, and direct labour costs, increasing in line with revenue growth[82] Gross Profit and Gross Profit Margin by Operating Segment | Segment | 2024 Gross Profit (HK$ Thousand) | 2024 Gross Profit Margin (%) | 2023 Gross Profit (HK$ Thousand) | 2023 Gross Profit Margin (%) | | :--- | :--- | :--- | :--- | :--- | | Renovation Projects | 10,516 | 4.1 | 11,698 | 6.8 | | Refurbishment Projects | 39 | 0.0 | 8,279 | 10.0 | | Nano-AM Projects | 1,432 | 35.2 | 1,713 | 38.3 | | Total | 11,987 | 3.5 | 21,690 | 8.3 | - Gross profit for refurbishment projects significantly decreased due to cost overruns on several large refurbishment projects during the year[85] Other Income and Gains/(Losses), Net The Group's other income and gains, net, significantly decreased from HK$1,455 thousand in 2023 to HK$32 thousand in 2024, primarily due to a reduction in government subsidies of approximately HK$1,513 thousand - Other income and gains, net, decreased by approximately HK$1,423 thousand, mainly due to a reduction in government subsidies of approximately HK$1,513 thousand[87] Impairment Losses on Trade Receivables, Other Receivables and Contract Assets Total impairment losses on trade receivables, other receivables, and contract assets increased by 86.4% from HK$2,700 thousand in 2023 to HK$5,000 thousand in 2024, mainly due to an increase in contract asset impairment losses, partially offset by a decrease in trade receivable impairment losses - Total impairment losses increased by approximately 86.4%, primarily due to an increase in impairment losses on contract assets of approximately HK$3,800 thousand[88] Administrative Expenses The Group's administrative expenses slightly increased by 2.9% from HK$18,600 thousand in 2023 to HK$19,100 thousand in 2024 - Administrative expenses increased by approximately 2.9% to approximately HK$19,100 thousand[89] Finance Costs The Group's finance costs significantly increased by 317.4% from HK$600 thousand in 2023 to HK$2,400 thousand in 2024, mainly due to an increase in interest from related party loans of approximately HK$1,700 thousand - Finance costs increased by approximately 317.4%, mainly due to an increase in interest from related party loans of approximately HK$1,700 thousand[90] Income Tax Expense The Group had no income tax expense in FY2024, compared to approximately HK$100 thousand in FY2023 - No income tax expense for the current year (2023: approximately HK$100 thousand)[91] Loss)/Profit and Total Comprehensive (Expense)/Income for the Year Due to the aforementioned financial performance changes, the Group recorded a loss and total comprehensive expense attributable to owners of the Company of approximately HK$14,500 thousand in FY2024, compared to a profit and total comprehensive income of approximately HK$1,200 thousand in FY2023 - The loss and total comprehensive expense attributable to owners of the Company for the current year was approximately HK$14,500 thousand, compared to a profit and total comprehensive income of approximately HK$1,200 thousand last year[92] Borrowing Facilities As of March 31, 2024, the Group's total bank credit facilities decreased to HK$30,000 thousand, with outstanding term loan facilities of HK$7,400 thousand and zero revolving loan facilities, while total guarantees under performance bonds also decreased - The Group's total bank credit facilities decreased to approximately HK$30,000 thousand (2023: HK$75,900 thousand)[94] - Outstanding term loan facilities amounted to HK$7,400 thousand, and revolving loan facilities were zero[94] - Total guarantees under performance bonds amounted to approximately HK$10,400 thousand (2023: HK$20,600 thousand)[94] Liquidity and Financial Resources The Group maintains prudent financial management with a current ratio of approximately 2.4 times, but bank balances and cash decreased due to net cash used in operating activities, partially offset by advances from directors, while the gearing ratio significantly increased to 70.7% - The Group's bank balances and cash were approximately HK$23,300 thousand (2023: HK$26,300 thousand), with the decrease mainly due to net cash used in operating activities of approximately HK$27,500 thousand, partially offset by advances from directors of approximately HK$27,000 thousand[95] - The current ratio remained at approximately 2.4 times (2023: 2.3 times)[95] - The gearing ratio increased from 15.7% in 2023 to approximately 70.7% in 2024, due to an increase in interest-bearing borrowings from the Company's directors and ultimate holding company[95] Capital Structure As of March 31, 2024, the Company's issued share capital was HK$3,400 thousand, comprising 340,000 thousand ordinary shares with a par value of HK$0.01 each, consistent with the previous year - Issued share capital was HK$3,400 thousand, with 340,000 thousand ordinary shares in issue, each with a par value of HK$0.01[96] Use of Proceeds from Placing The net proceeds of approximately HK$10,644 thousand from the placing on August 2, 2022, were intended for working capital, with HK$6,610 thousand utilised as of March 31, 2024, and the remaining HK$1,971 thousand expected to be used by September 30, 2024 - The net proceeds from the placing on August 2, 2022, were approximately HK$10,644 thousand, all intended for working capital[98] Actual Use of Proceeds from Placing Analysis | Planned Use | Proceeds (HK$ Thousand) | Unutilised as at March 31, 2023 (HK$ Thousand) | Utilised for the year ended March 31, 2024 (HK$ Thousand) | Unutilised as at March 31, 2024 (HK$ Thousand) | Expected Utilisation Timeline for Unused Net Proceeds | | :--- | :--- | :--- | :--- | :--- | :--- | | Working Capital | 10,644 | 8,581 | 6,610 | 1,971 | Before September 30, 2024 | Foreign Exchange Risk and Treasury Policy The Group's core business in Hong Kong primarily transacts in HKD, resulting in non-significant foreign exchange risk, and while there is no specific hedging policy, foreign exchange risk is continuously monitored, and treasury policy adopts a prudent financial management approach - The Group's core business is in Hong Kong, with most transactions denominated in HKD, resulting in non-significant foreign exchange risk[99] - The Group does not have a foreign currency hedging policy but continuously monitors foreign exchange risk[99] - The treasury policy adopts a prudent financial management approach, managing risks through continuous credit assessment and liquidity monitoring[99] Pledge of Assets As of March 31, 2024, the Group had no pledged bank deposits, but an investment in life insurance policies with a fair value of HK$3,700 thousand was pledged as collateral for bank facilities - As of March 31, 2024, the Group had no pledged bank deposits (2023: approximately HK$6,100 thousand)[101] - An investment in life insurance policies with a fair value of HK$3,700 thousand was pledged as collateral for bank facilities[101] Performance Guarantees and Contingent Liabilities As of the reporting period, the Group's outstanding performance guarantees issued by banks totaled HK$10,380 thousand, a significant decrease from the previous year Outstanding Performance Guarantees | Item | 2024 (HK$ Thousand) | 2023 (HK$ Thousand) | | :--- | :--- | :--- | | Issued by banks | 10,380 | 20,599 | Capital Commitments As of March 31, 2024, the Group had no significant capital commitments - The Group had no significant capital commitments[104] Future Plans for Material Investments and Capital Assets As of March 31, 2024, the Group had no other future plans for material investments and capital assets - The Group had no other future plans for material investments and capital assets[105] Material Acquisitions and Disposals of Subsidiaries, Associates and Joint Ventures For the year ended March 31, 2024, the Group had no material acquisitions or disposals of subsidiaries, associates, and joint ventures - There were no material acquisitions or disposals of subsidiaries, associates, and joint ventures during the year[106] Employees and Remuneration Policy As of March 31, 2024, the Group had 80 employees, an increase from the previous year, with total staff costs of approximately HK$39,300 thousand, and remuneration policies based on market terms, individual performance, qualifications, and experience - As of March 31, 2024, the Group had 80 employees (2023: 56 employees)[107] - Total staff costs (including directors' emoluments) for the year were approximately HK$39,300 thousand (2023: approximately HK$37,100 thousand)[107] - Remuneration policy refers to market terms and individual performance, qualifications, and experience, including discretionary bonuses and a Mandatory Provident Fund Scheme[107] Significant Events After Reporting Period As of the announcement date, the Directors were not aware of any significant events concerning the Group's business or financial performance after the year ended March 31, 2024 - As of the announcement date, the Directors were not aware of any significant events concerning the Group's business or financial performance after the reporting period[108] Corporate Governance Principles and Practices This section outlines the Company's commitment to maintaining good corporate governance, adherence to the GEM Listing Rules' Corporate Governance Code, and details on board structure, securities dealings, and audit committee functions Corporate Governance Overview The Company is committed to maintaining good corporate governance, having adopted and complied with the Corporate Governance Code in Appendix 15 of the GEM Listing Rules to ensure proper oversight of business activities and decision-making - The Company is committed to maintaining good corporate governance and has adopted and complied with the Corporate Governance Code set out in Appendix 15 of the GEM Listing Rules[109] - The Board is dedicated to continuously enhancing and reviewing the effectiveness and performance of corporate governance principles and practices[109] Chairman and Chief Executive Officer Mr. Cheng Tsang Fu serves as both Chairman and Chief Executive Officer, a deviation from CG Code Provision C.2.1, which the Board believes facilitates business strategy execution and operational efficiency, with appropriate checks and balances in place - Mr. Cheng Tsang Fu serves as both Chairman and Chief Executive Officer, deviating from Corporate Governance Code Provision C.2.1[110] - The Board believes this arrangement facilitates the execution of business strategies and enhances operational efficiency, and the Board has an appropriate structure with checks and balances[110] - The Company will continue to review and seek to re-comply with Corporate Governance Code Provision C.2.1[110] Model Code for Securities Transactions by Directors The Company has adopted a model code for directors' securities transactions, no less exacting than the GEM Listing Rules, and all directors confirmed compliance throughout the year - The Company has adopted a model code for securities transactions by directors, with terms no less exacting than those set out in the GEM Listing Rules[112] - All Directors confirmed compliance with the code throughout the year[112] Directors' and Chief Executive's Interests and Short Positions in Shares, Underlying Shares and Debentures of the Company or its Associated Corporations As of March 31, 2024, Mr. Cheng Tsang Fu and Ms. Liu Li Li jointly held 48.29% of the Company's shares through controlled corporations and spouse interests, with other directors holding minor stakes Directors' and Chief Executive's Long Positions in Ordinary Shares and Underlying Shares of the Company | Name | Capacity/Nature of Interest | Number of Shares Held | Approximate % of Shareholding | | :--- | :--- | :--- | :--- | | Mr. Cheng Tsang Fu | Interest in controlled corporation/Spouse interest | 164,200,000 | 48.29% | | Ms. Liu Li Li | Interest in controlled corporation/Spouse interest | 164,200,000 | 48.29% | | Mr. Tsui Kai Tai | Beneficial owner | 12,800,000 | 3.76% | | Ms. Lam Hiu Ling | Beneficial owner | 2,550,000 | 0.75% | | Mr. Li Chi Wai | Beneficial owner | 155,000 | 0.05% | | Mr. Keung Hon Sing | Spouse interest | 2,550,000 | 0.75% | | Professor Leung Yiu Cheung | Beneficial owner | 2,500,000 | 0.74% | | Professor Leung Kwok Hei | Beneficial owner | 3,200,000 | 0.94% | | Ms. Cheung Kong Hung | Beneficial owner | 385,000 | 0.11% | - Mr. Cheng Tsang Fu, Ms. Liu Li Li, and Mr. Cheng Tsang Wai are parties acting in concert, jointly holding interests in 164,200,000 shares held by Advance Goal[116] - Ms. Lam Hiu Ling resigned as an executive director on June 21, 2024, and Professor Leung Kwok Hei resigned as a non-executive director on May 3, 2024[116] Substantial Shareholders' and Other Persons' Interests and Short Positions in Shares and Underlying Shares of the Company As of March 31, 2024, Advance Goal held 48.29% of the Company's shares, with Mr. Cheng Tsang Wai holding the same proportion through controlled corporations, and Mr. Chen Yi Sung holding 10.80% Substantial Shareholders' and Other Persons' Long Positions in Ordinary Shares and Underlying Shares of the Company | Shareholder Name/Name | Capacity/Nature of Interest | Number of Ordinary Shares Held | Approximate % of Shareholding | | :--- | :--- | :--- | :--- | | Advance Goal | Beneficial owner | 164,200,000 | 48.29% | | Mr. Cheng Tsang Wai | Interest in controlled corporation | 164,200,000 | 48.29% | | Ms. Chow Siu Shan | Spouse interest | 164,200,000 | 48.29% | | Mr. Chen Yi Sung | Beneficial owner | 36,730,000 | 10.80% | - Mr. Cheng Tsang Wai, Mr. Cheng Tsang Fu, and Ms. Liu Li Li are parties acting in concert, jointly owning the share interests held by Advance Goal[118] - Ms. Chow Siu Shan, being the spouse of Mr. Cheng Tsang Wai, is deemed to be interested in the shares held by Mr. Cheng Tsang Wai through Advance Goal[118] Directors' Right to Acquire Shares or Debentures During the year, neither the Company nor any of its subsidiaries participated in any arrangements enabling directors, chief executives, or their associates to subscribe for securities of the Company or its associated corporations, or to obtain benefits by acquiring shares or debentures - During the year, neither the Company nor any of its subsidiaries participated in any arrangements enabling directors, chief executives, or their associates to subscribe for securities of the Company or its associated corporations[120] Purchase, Sale or Redemption of the Company's Listed Securities Neither the Company nor any of its subsidiaries purchased, sold, or redeemed any of the Company's shares during the year - Neither the Company nor any of its subsidiaries purchased, sold, or redeemed any of the Company's shares during the year[121] Competition and Conflicts of Interest The Company's controlling shareholders have entered into a non-competition undertaking, and no directors, management shareholders, or substantial shareholders, or their respective associates, were involved in any competing businesses or conflicts of interest with the Group during the year - Each of the Company's controlling shareholders has entered into a non-competition undertaking[122] - During the year, no directors, management shareholders, or substantial shareholders, or their respective associates, were involved in any business competing or likely to compete with the Group's business, or had any other conflicts of interest with the Group[122] - The independent non-executive directors have reviewed and confirmed the controlling shareholders' compliance with the terms of the non-competition undertaking during the year[124] Audit Committee The Company's Audit Committee, established on January 19, 2018, comprises four independent non-executive directors with Mr. Chiu Wai Hon as Chairman, and has reviewed the Group's annual results for the year ended March 31, 2024 - The Audit Committee was established on January 19, 2018, comprising four independent non-executive directors, with Mr. Chiu Wai Hon as Chairman[125] - The Audit Committee has reviewed the Group's annual results for the year ended March 31, 2024[125] Scope of Work of ZHONGZHENG TIANHENG CPA LIMITED The financial figures in this preliminary announcement have been agreed by the Group's auditor, ZHONGZHENG TIANHENG CPA LIMITED, whose work does not constitute an assurance service, thus no assurance opinion is expressed on these preliminary results - The financial figures in this preliminary announcement have been agreed by the auditor, ZHONGZHENG TIANHENG CPA LIMITED[126] - The auditor's work does not constitute an assurance service, and no assurance opinion is expressed on these preliminary results[126] Other Information This section covers details regarding the upcoming Annual General Meeting, dividend policy, share register closure, publication of the 2024 Annual Report, and the current composition of the Board of Directors Annual General Meeting The Company's Annual General Meeting will be held on September 10, 2024, with the relevant notice to be published and dispatched to shareholders as required by the GEM Listing Rules - The Annual General Meeting will be held on Tuesday, September 10, 2024, at 11:00 a.m.[127] - The notice convening the meeting will be published and dispatched to shareholders in the manner required by the GEM Listing Rules[127] Dividends The Board of Directors does not recommend the payment of any dividends for the year ended March 31, 2024 - The Board of Directors does not recommend the payment of any dividends for the year ended March 31, 2024[129] Closure of Register of Members To be eligible to attend and vote at the Annual General Meeting, the Company's share transfer registration will be suspended from September 5 to September 10, 2024, with all transfer documents to be lodged by 4:30 p.m. on September 4, 2024 - The register of members will be closed from September 5 to September 10, 2024 (both dates inclusive)[130] - All share transfer documents must be lodged with the Company's Hong Kong Share Registrar by 4:30 p.m. on September 4, 2024[130] Publication of 2024 Annual Report The Company's 2024 Annual Report, containing all information required by the GEM Listing Rules, will be dispatched to shareholders and published on the Company's website in due course - The 2024 Annual Report, containing all information required by the GEM Listing Rules, will be dispatched to shareholders and published on the Company's website in due course[131] Board of Directors As of the announcement date, the Board comprises executive directors Mr. Cheng Tsang Fu (Chairman and CEO), Ms. Liu Li Li, Mr. Tsui Kai Tai, Mr. Li Chi Wai, and Mr. Keung Hon Sing; non-executive director Professor Leung Yiu Cheung; and independent non-executive directors Mr. Chow Kwok Ki, Mr. Hui Chi Keung, Mr. Chiu Wai Hon, and Ms. Cheung Kong Hung - Executive Directors: Mr. Cheng Tsang Fu (Chairman and Chief Executive Officer), Ms. Liu Li Li, Mr. Tsui Kai Tai, Mr. Li Chi Wai, Mr. Keung Hon Sing[133] - Non-executive Director: Professor Leung Yiu Cheung[133] - Independent Non-executive Directors: Mr. Chow Kwok Ki, Mr. Hui Chi Keung, Mr. Chiu Wai Hon, Ms. Cheung Kong Hung[133]