佰悦集团(08545) - 2024 - 年度财报

Corporate Information This section details key corporate information, including board members, committees, and advisors, noting significant board composition changes - The report details key corporate information including the board of directors, committee structures, principal bankers (Hang Seng Bank), auditors (Privatco CPA Limited), and legal advisors[48][49] - Multiple changes occurred in board membership during the reporting period, including the retirement of Non-executive Directors Mr. Li Ming Yeung and Mr. Ngai Ching on August 11, 2023, and the resignation and appointment of several Independent Non-executive Directors[48] Chairman's Statement The Chairman acknowledges economic challenges, affirms stable performance, and outlines strategic adjustments for future growth - The Chairman acknowledges the Group faced significant economic difficulties during a challenging period, particularly impacted by the COVID-19 pandemic, but affirmed stable performance was maintained under these circumstances[26][53] - Facing a severe economic climate, the Group is actively adjusting its business strategies, exploring new development opportunities, maintaining prudent operations, and optimizing internal management to enhance efficiency and reduce costs for sustainable development[27][54] - The Group will continue to focus on its core businesses, advance diversified layouts, and believes that agile and flexible development strategies will enable it to turn crises into opportunities, enhancing competitiveness and risk resilience[30][52] Management Discussion and Analysis This section reviews the Group's business performance, financial results, investments, and liquidity position Business Review The Group primarily designs, markets, distributes, and retails toys, with proprietary licensed toy sales growing despite ODM decline, and is diversifying into smart healthcare and IT solutions Revenue Performance by Business Segment (Year Ended March 31) | Business Segment | FY2024 Revenue (HKD) | FY2023 Revenue (HKD) | Year-on-Year Change | | :--- | :--- | :--- | :--- | | Sales of ODM Toys | 90,316,000 | 114,835,000 | -21.4% | | Distribution of Imported Toys and Related Products | 66,802,000 | 68,645,000 | -2.7% | | Sales of Proprietary Licensed Toys and Related Products | 59,072,000 | 49,099,000 | +20.3% | | Agency Services for Engineering Projects | 3,000,000 | 3,384,000 | -11.3% | - While ODM toy sales decreased, they remain the largest portion of sales, with gross profit margin declining from 7.8% to 7.3% primarily due to increased production costs from Chinese suppliers passed on to the Group[32] - The Group developed licensed toys using proprietary brands like 'SENTINEL/千值练', 'TOPI', and 'FLAME TOYS', with the delivery of a series of popular high-end robot figures driving significant revenue growth in this segment[32] Financial Analysis The Group's total revenue decreased by 7.1% to HKD 219.19 million, impacting gross profit and margin, though net other income significantly increased Financial Performance Summary (Year Ended March 31) | Financial Metric | FY2024 (HKD) | FY2023 (HKD) | Year-on-Year Change | | :--- | :--- | :--- | :--- | | Revenue | 219,190,000 | 235,963,000 | -7.1% | | Cost of Sales | 181,352,000 | 190,227,000 | -4.7% | | Gross Profit | 37,838,000 | 45,736,000 | -17.3% | | Gross Profit Margin | 17.3% | 19.4% | -2.1pp | | Net Other Income | 1,837,000 | 651,000 | +182.2% | | Selling Expenses | 6,779,000 | 9,187,000 | -26.2% | | Administrative Expenses | 26,560,000 | 27,993,000 | -5.1% | | Finance Costs | 368,000 | 234,000 | +57.3% | | Income Tax Expense | 1,044,000 | 1,861,000 | -43.9% | - Net other income significantly increased by 182.2%, primarily due to reduced foreign exchange losses from a slower appreciation of the US dollar and increased bank interest income from generally rising interest rates[59][36][91] - Selling expenses decreased by 26.2%, mainly due to reduced expenditures on traditional marketing channels during the year[37][60] Significant Investments and Future Plans The Group disclosed no new significant investments this year, focusing on existing joint ventures in protective products, smart healthcare, and IT solutions for diversification and growth - The Group holds a 30% equity interest in Grand Amuse Limited, a joint venture primarily engaged in the manufacturing and sale of protective products such as medical masks[68] - The Group holds a 30% equity interest in DongYiQuan Network Technology Co., Ltd., which focuses on smart healthcare industry solutions, aiming to capitalize on the growth potential in smart eldercare services[45] - The Group acquired a 45% equity interest in M.I.P. International Limited, which provides IT solutions to hotels, property developers, and the government in Hong Kong[97] Liquidity, Financial Resources and Other Information The Group maintains a sound financial position with a low debt-to-equity ratio and sufficient liquidity, with 35 employees, no dividend proposed, and no significant post-reporting events - The debt-to-equity ratio (total loans and borrowings/total equity) remained stable at approximately 0.02x, indicating a sound and robust financial position[98] - As of March 31, 2024, the Group had 35 employees in Hong Kong, with total annual staff costs (including directors' emoluments) of approximately HKD 15,808,000, a decrease from HKD 17,266,000 last year[98] - The Board of Directors does not recommend the payment of a dividend for the year ended March 31, 2024 (2023: Nil)[72][99] - At the end of the reporting period, the Group had no significant contingent liabilities, and no material events occurred subsequent to the reporting period[73][100] Directors and Senior Management Profile This section provides biographical details and key responsibilities of the Group's executive, non-executive, and independent non-executive directors Executive Directors The executive director team, led by Chairman and CEO Mr. Li Wai Keung, oversees business development, strategic planning, finance, and daily operations - Mr. Li Wai Keung, Group founder, serves as Chairman and Chief Executive Officer, possessing over 18 years of experience in the ACG toy industry[75][103] - Mr. To Hoi Bun, Executive Director and Company Secretary, has over 23 years of experience in accounting and financial management[76][104] - Ms. Li Kwai Fong, Executive Director and General Manager, joined the Group in 2006 and is primarily responsible for managing its general operations[81][83] Non-executive Directors Non-executive directors provide external perspectives and expertise to the Board, with Mr. Chu Wai Tak possessing extensive operational management experience, and two members retired during the period - Mr. Chu Wai Tak, appointed as a Non-executive Director in December 2021, has extensive experience in the operational management of biotechnology companies[81][109] - Mr. Li Ming Yeung and Mr. Ngai Ching retired as Non-executive Directors on August 11, 2023[139][113] Independent Non-executive Directors Independent non-executive directors provide independent judgment on company strategy, performance, and risk management, with diverse backgrounds ensuring board diversity and effective oversight, noting membership changes - Mr. Yu Pui Hang, Chairman of the Remuneration Committee, is a practicing solicitor in Hong Kong with extensive experience in legal and financial fields[117][145] - Ms. Chow Chi Ling, Chairman of the Audit Committee, is a practicing accountant with over 15 years of experience in the auditing and financial management industry[149][123] - Mr. Dong Wen was appointed as an Independent Non-executive Director on April 27, 2023, possessing over 26 years of experience in the banking and finance industry[152][126] - Ms. Kwok Wai Ling and Mr. Cheng Pak Lam resigned as Independent Non-executive Directors on April 3, 2023, and April 27, 2023, respectively[156][184] Corporate Governance Report This section details the Group's corporate governance practices, including Board structure, committees, risk management, internal controls, and shareholder relations, ensuring compliance Board of Directors The Board oversees the Group's strategy, financial performance, risk management, and internal controls, adhering to governance codes, with the combined Chairman and CEO roles providing strong leadership, supported by three committees and regular meetings - The Company complied with the Corporate Governance Code, with the sole deviation being the combined roles of Chairman and Chief Executive Officer held by Mr. Li Wai Keung, which the Board believes provides strong and consistent leadership to the Group[390][365] - The Board has established three committees: the Audit Committee, Remuneration Committee, and Nomination Committee, to assist in fulfilling its responsibilities[368][370] - During the reporting period, the Board held eight meetings, with detailed attendance records for each director provided in the report[372][400] Board Committees The Company has three Board committees—Audit, Remuneration, and Nomination—with significant independent non-executive director involvement, overseeing financial reporting, internal controls, executive remuneration, and board nominations - The Audit Committee comprises three Independent Non-executive Directors, with Ms. Chow Chi Ling as Chairman, responsible for reviewing financial information, overseeing the financial reporting system, and internal controls[375][402] - The Remuneration Committee consists of three Independent Non-executive Directors, chaired by Mr. Yu Pui Hang, responsible for advising the Board on remuneration policies for directors and senior management[378] - The Nomination Committee comprises three Independent Non-executive Directors, with Mr. Dong Wen as Chairman, responsible for reviewing the Board's structure, size, composition, and diversity, and identifying suitable director candidates[408][382] Risk Management and Internal Control The Board is responsible for the Group's internal control and risk management systems, deemed adequate and effective after independent review, complemented by whistleblowing and anti-corruption policies - The Board considers the Group's risk management and internal control systems to be adequate and effective for the year, with an annual review conducted by an independent external professional consultant[411][441] - The Company has established a whistleblowing policy, providing confidential channels for employees and external parties to report any misconduct[416][417] - The Group has formulated an anti-corruption policy prohibiting any form of corrupt practices, integrating it as part of its corporate governance framework[444][445] Shareholder Rights and Investor Relations The Company maintains high transparency in investor relations through regular communication and timely online financial disclosures, outlining procedures for shareholder meetings and providing contact for inquiries - The Company is committed to maintaining high transparency and regularly holds meetings with institutional investors and analysts[419][421] - The report details the procedures for shareholders holding 10% or more of the shares to request the convening of an extraordinary general meeting[453][478] - The Board is responsible for fulfilling corporate governance functions, including formulating and reviewing company policies, monitoring director training, and ensuring legal compliance[427] Report of the Directors This report outlines the Group's principal activities, dividend policy, major customer and supplier concentrations, and significant shareholdings, providing an overview of key operational and ownership aspects - During the reporting period, the Company's principal activity was investment holding, with its subsidiaries primarily engaged in the design, marketing, distribution, and retail of toys, and the provision of agency services[482] - The Board of Directors does not recommend the payment of a dividend for the year ended March 31, 2024[482] - For the year ended March 31, 2024, revenue from the Group's five largest customers accounted for approximately 53.8% of total revenue, with the largest customer contributing 43.2%; purchases from the five largest suppliers accounted for approximately 79.4% of total purchases, with the largest supplier contributing 31.7%[459][484] - As of March 31, 2024, Chairman Mr. Li Wai Keung held 180,800,000 shares through his wholly-owned company, Infinite Force Holdings Ltd, representing 15.16% of the Company's issued share capital[505] Independent Auditor's Report This report presents the independent auditor's opinion on the Group's consolidated financial statements, highlighting key audit matters and confirming a true and fair view of the financial position and performance - Auditor Privatco CPA Limited issued an unmodified opinion on the Group's consolidated financial statements, affirming they present a true and fair view of the Group's financial position and performance[561] - A key audit matter identified was 'Timing of revenue recognition from sales of products', due to varying terms in sales contracts and revenue being a key performance indicator, posing risks of misstatement or manipulation, which the auditor addressed by examining key customer contracts and sampling transaction vouchers[563][544][545] Consolidated Financial Statements This section presents the Group's comprehensive financial statements, including profit or loss, financial position, cash flows, and detailed notes, providing a complete overview of its financial performance and health Consolidated Statement of Profit or Loss and Other Comprehensive Income The Group's profitability significantly declined this fiscal year, with reduced total revenue, gross profit, and profit attributable to equity holders, leading to lower basic earnings per share Consolidated Statement of Profit or Loss Summary (Year Ended March 31) | Item | FY2024 (HKD thousands) | FY2023 (HKD thousands) | | :--- | :--- | :--- | | Revenue | 219,190 | 235,963 | | Gross Profit | 37,838 | 45,736 | | Profit Before Tax | 1,530 | 7,623 | | Profit for the Year | 486 | 5,762 | | Basic Earnings Per Share (HK cents) | 0.04 | 0.49 | Consolidated Statement of Financial Position As of March 31, 2024, the Group's total assets, liabilities, and net assets remained largely consistent with the prior year, with increased net current assets indicating improved short-term solvency Consolidated Statement of Financial Position Summary (As of March 31) | Item | 2024 (HKD thousands) | 2023 (HKD thousands) | | :--- | :--- | :--- | | Non-current Assets | 43,845 | 57,049 | | Current Assets | 178,036 | 199,793 | | Total Assets | 221,881 | 256,842 | | Current Liabilities | 25,225 | 56,618 | | Non-current Liabilities | 56 | 4,110 | | Total Liabilities | 25,281 | 60,728 | | Net Assets (Total Equity) | 196,600 | 196,114 | Consolidated Statement of Cash Flows This fiscal year, the Group's cash and cash equivalents decreased, with a net cash outflow from operating activities, continuous net outflow from investing activities primarily for bank deposits, and stable financing cash outflow Consolidated Statement of Cash Flows Summary (Year Ended March 31) | Item | FY2024 (HKD thousands) | FY2023 (HKD thousands) | | :--- | :--- | :--- | | Net Cash from Operating Activities | (28,146) | 10,262 | | Net Cash Used in Investing Activities | (60,565) | (42,664) | | Net Cash Used in Financing Activities | (4,270) | (2,743) | | Net Decrease in Cash and Cash Equivalents | (92,981) | (35,145) | | Cash and Cash Equivalents at End of Year | 23,514 | 116,495 | Notes to the Consolidated Financial Statements The notes provide detailed explanations for financial statement items, covering accounting policies, segment reporting, revenue recognition, asset/liability details, related party transactions, and risk management, including revenue segmentation and risk exposure analysis Revenue from External Customers by Geographical Location (HKD thousands) | Region | FY2024 | FY2023 | | :--- | :--- | :--- | | Japan | 96,745 | 134,877 | | People's Republic of China | 40,823 | 31,144 | | Hong Kong | 31,090 | 25,300 | | United States | 24,266 | 17,180 | | Taiwan | 10,839 | 12,371 | | Others | 15,427 | 15,091 | | Total | 219,190 | 235,963 | - The Group's major customers are toy distributors in Japan, with the five largest customers contributing approximately 54% of revenue for the year ended March 31, 2024 (2023: 65%)[203][221] - The Group is exposed to foreign currency risk, primarily involving the US dollar, Japanese Yen, and Renminbi, with the report detailing net exposures in these currencies[922][939] Particulars of Properties This section lists the Group's owned properties in Hong Kong, including a director's dormitory and a warehouse - The report lists two properties held by the Group in Hong Kong, one used as a director's dormitory and the other as a warehouse[1100] Financial Summary This section provides a concise overview of the Group's financial performance and position over the past five fiscal years, including key metrics like revenue, profit, and net assets Five-Year Financial Performance Summary (HKD thousands) | Fiscal Year | 2024 | 2023 | 2022 | 2021 | 2020 | | :--- | :--- | :--- | :--- | :--- | :--- | | Revenue | 219,190 | 235,963 | 216,485 | 211,467 | 206,965 | | Profit for the Year | 486 | 5,762 | 1,481 | 8,677 | 7,450 | | Net Assets | 196,600 | 196,114 | 180,352 | 178,871 | 170,194 |