协同通信(01613) - 2024 - 年度业绩

Company Information and Announcements Disclaimer The Hong Kong Exchanges and Clearing Limited and The Stock Exchange of Hong Kong Limited are not responsible for the content of this announcement, make no statement as to its accuracy or completeness, and expressly disclaim any liability for any loss arising from or in reliance upon the whole or any part of the contents of this announcement - The Hong Kong Stock Exchange assumes no responsibility for the content of this announcement, nor does it guarantee its accuracy or completeness[1] Company Overview and Performance Announcement Synertone Communication Group Limited (Stock Code: 1613) announced its consolidated results for the year ended March 31, 2024, with comparative data for the same period in 2023 - Synertone Communication Group Limited (Stock Code: 1613) released its annual results announcement for the year ended March 31, 2024[2] Consolidated Financial Statements Consolidated Statement of Profit or Loss and Other Comprehensive Income For the year ended March 31, 2024, the Group's revenue slightly increased, but it still recorded a loss, which significantly narrowed compared to the previous year, with gross profit notably improving despite fluctuations in other income and net other gains Key Data from Consolidated Statement of Profit or Loss and Other Comprehensive Income | Indicator | 2024 (HK$ thousand) | 2023 (HK$ thousand) | Change (HK$ thousand) | Change Rate (%) | | :--- | :--- | :--- | :--- | :--- | | Revenue | 62,581 | 60,538 | 2,043 | 3.38 | | Cost of Sales | (37,824) | (51,590) | 13,766 | -26.68 | | Gross Profit | 24,757 | 8,948 | 15,809 | 176.69 | | Other Income | 2,238 | 3,572 | (1,334) | -37.35 | | Net Other Gains | 4,806 | 1,800 | 3,006 | 167.00 | | Operating Loss | (11,883) | (37,036) | 25,153 | -67.91 | | Loss Before Tax | (17,752) | (43,675) | 25,923 | -59.36 | | Loss for the Year | (17,768) | (43,679) | 25,911 | -59.32 | | Loss Attributable to Owners of the Company | (17,840) | (40,971) | 23,131 | -56.46 | | Basic and Diluted Loss Per Share (HK cents) | (6.0) | (16.05) | 10.05 | -62.62 | Consolidated Statement of Financial Position As of March 31, 2024, the Group's non-current assets and current liabilities decreased, while current assets and total equity increased, resulting in a positive net current assets position and an overall improved financial condition Key Data from Consolidated Statement of Financial Position | Indicator | 2024 (HK$ thousand) | 2023 (HK$ thousand) | Change (HK$ thousand) | Change Rate (%) | | :--- | :--- | :--- | :--- | :--- | | Non-current Assets | 85,555 | 120,455 | (34,900) | -28.97 | | Current Assets | 137,540 | 105,568 | 31,972 | 30.28 | | Current Liabilities | 106,884 | 156,013 | (49,129) | -31.49 | | Net Current Assets | 30,656 | (50,445) | 81,101 | -160.77 | | Total Assets Less Current Liabilities | 116,211 | 70,010 | 46,201 | 65.99 | | Net Assets | 116,211 | 68,369 | 47,842 | 69.98 | | Total Equity | 116,211 | 68,369 | 47,842 | 69.98 | | Cash and Cash Equivalents | 33,373 | 2,345 | 31,028 | 1323.92 | | Trade and Other Receivables | 40,850 | 39,475 | 1,375 | 3.48 | | Trade and Other Payables | 45,646 | 57,212 | (11,566) | -20.22 | Notes to the Financial Statements General Information Synertone Communication Group Limited, incorporated in the Cayman Islands and listed on the Main Board of the Hong Kong Stock Exchange in 2012, primarily operates in China, focusing on the design, development, and sale of automatic control systems and smart systems, as well as leasing and hosting services for computer equipment, IT infrastructure, and robots, with financial statements presented in HKD - The company was incorporated in the Cayman Islands in 2006 and listed on the Hong Kong Stock Exchange in 2012[9][10] - Principal businesses include the design, development, and sale of automatic control systems and smart systems (visual intercom and surveillance), as well as leasing and hosting services for computer equipment, IT infrastructure, and robots[10] - The Group's main operations are conducted in China, and the consolidated financial statements are presented in Hong Kong dollars[11] Application of New and Revised Hong Kong Financial Reporting Standards This year marks the first application of several new and revised Hong Kong Financial Reporting Standards, including HKFRS 17 (Insurance Contracts) and amendments to HKAS 1, 8, and 12, which management assessed to have no material impact on the financial position or performance for the current and prior years - This year marks the first application of HKFRS 17 and amendments to HKAS 1, 8, and 12[14] - The implementation of new standards has no material impact on the Group's financial position and performance[14] Segment Reporting The Group manages and reports its operations across three business segments: building intelligence, control systems, and data centers; for FY2024, both control systems and building intelligence segments achieved profitability, while the data center segment's loss expanded, with revenue primarily from the Chinese market and changes in customer concentration - The Group's principal business segments include building intelligence, control systems, and data centers[16] Segment Results, Assets and Liabilities In FY2024, both the control systems and building intelligence segments turned from loss to profit, while the data center segment's loss widened, with external revenue for control systems growing, building intelligence remaining stable, and data centers significantly decreasing FY2024 Segment Performance Overview (Adjusted EBIT) | Segment | 2024 External Revenue (HK$ thousand) | 2023 External Revenue (HK$ thousand) | 2024 Segment Profit/(Loss) (HK$ thousand) | 2023 Segment Loss (HK$ thousand) | | :--- | :--- | :--- | :--- | :--- | | Building Intelligence | 24,305 | 25,766 | 3,616 | (13,734) | | Control Systems | 38,030 | 33,977 | 467 | (2,384) | | Data Center | 246 | 795 | (11,711) | (3,516) | - The increase in data center segment loss is primarily due to an impairment of property, plant and equipment of HK$4.7 million recorded in FY2024[53] Reconciliation of Reportable Segment Revenue, Profit or Loss, Assets and Liabilities This section provides a reconciliation of revenue, loss, assets, and liabilities for each reportable segment to the corresponding totals in the consolidated financial statements, illustrating the effects of inter-segment eliminations and unallocated corporate items FY2024 Consolidated Revenue and Loss Reconciliation | Indicator | 2024 (HK$ thousand) | 2023 (HK$ thousand) | | :--- | :--- | :--- | | Reportable Segment Revenue | 66,140 | 63,583 | | Elimination of Inter-segment Revenue | (3,559) | (3,045) | | Consolidated Revenue | 62,581 | 60,538 | | Reportable Segment Loss | (7,628) | (19,634) | | Consolidated Loss Before Tax | (17,752) | (43,675) | Geographical Information The Group's revenue primarily originates from China, with external customer revenue in the Chinese market increasing in FY2024, while revenue from Hong Kong and overseas markets decreased or was zero, and non-current assets are also mainly concentrated in China FY2024 Geographical Revenue and Non-current Assets | Region | 2024 Revenue from External Customers (HK$ thousand) | 2023 Revenue from External Customers (HK$ thousand) | 2024 Non-current Assets (HK$ thousand) | 2023 Non-current Assets (HK$ thousand) | | :--- | :--- | :--- | :--- | :--- | | Hong Kong | 246 | 795 | – | 11,172 | | China | 62,335 | 59,557 | 51,690 | 109,283 | | Overseas | – | 186 | – | – | | Total | 62,581 | 60,538 | 51,690 | 120,455 | Information about Major Customers In FY2024, the Group had two major customers (Customer A and Customer B) in the building intelligence business that contributed over 10% of total sales, whereas in FY2023, no single customer contributed over 10% FY2024 Major Customer Revenue Contribution | Customer | 2024 Revenue (HK$ thousand) | 2023 Revenue (HK$ thousand) | | :--- | :--- | :--- | | Customer A (Building Intelligence) | 16,972 | Not applicable* | | Customer B (Building Intelligence) | 6,612 | Not applicable* | * Revenue from customers in 2023 was less than 10% of the Group's total revenue - In FY2024, no single customer contributed 10% or more of the Group's revenue[30] Revenue The Group's total revenue for FY2024 was HK$62.581 million, representing a 3.38% increase from FY2023, driven by significant growth in the control systems business, a slight decrease in building intelligence, and a substantial reduction in data center business revenue Revenue by Major Products and Services | Business Segment | 2024 (HK$ thousand) | 2023 (HK$ thousand) | Change (HK$ thousand) | Change Rate (%) | | :--- | :--- | :--- | :--- | :--- | | Building Intelligence | 24,305 | 25,766 | (1,461) | -5.67 | | Control Systems | 38,030 | 33,977 | 4,053 | 11.93 | | Data Center | – | 371 | (371) | -100.00 | | Total Revenue from Contracts with Customers | 62,335 | 60,114 | 2,221 | 3.70 | | Rental income under HKFRS 16 | 246 | 424 | (178) | -42.00 | | Total Revenue | 62,581 | 60,538 | 2,043 | 3.38 | - Revenue from building intelligence and control systems businesses is recognized when customers obtain control of the goods, while data center business revenue is recognized over time[32][33] Other Income and Net Other Gains In FY2024, other income decreased due to reduced government subsidies, while net other gains significantly increased primarily from gains on disposal of subsidiaries and an associate Other Income and Net Other Gains | Item | 2024 (HK$ thousand) | 2023 (HK$ thousand) | Change (HK$ thousand) | Change Rate (%) | | :--- | :--- | :--- | :--- | :--- | | Other Income | | | | | | Interest income from bank deposits | 50 | 13 | 37 | 284.62 | | VAT refunds | 546 | 350 | 196 | 56.00 | | Government subsidies | – | 1,302 | (1,302) | -100.00 | | Miscellaneous income | 1,642 | 1,730 | (88) | -5.09 | | Subtotal | 2,238 | 3,572 | (1,334) | -37.35 | | Net Other Gains | | | | | | Net exchange gains | 292 | 49 | 243 | 495.92 | | Gain on disposal of a subsidiary | 3,044 | – | 3,044 | N/A | | Gain on disposal of an associate | 1,459 | – | 1,459 | N/A | | Subtotal | 4,806 | 1,800 | 3,006 | 167.00 | | Total | 7,044 | 5,372 | 1,672 | 31.12 | - A reduction in government subsidies of approximately HK$1.3 million was the primary reason for the decrease in other income[38] - Gains from the disposal of a subsidiary and an associate, approximately HK$3.0 million and HK$1.5 million respectively, drove the significant increase in net other gains[36][85] Loss Before Tax The loss before tax for FY2024 was calculated considering finance costs, staff costs, and other operating items, with both finance costs and staff costs decreasing, while net provision for expected credit losses slightly increased Components of Loss Before Tax | Item | 2024 (HK$ thousand) | 2023 (HK$ thousand) | Change (HK$ thousand) | Change Rate (%) | | :--- | :--- | :--- | :--- | :--- | | Finance Costs | | | | | | Interest expense on bank borrowings | 3,200 | 3,467 | (267) | -7.70 | | Finance charges on lease liabilities | 110 | 317 | (207) | -65.30 | | Subtotal | 3,310 | 3,784 | (474) | -12.53 | | Staff Costs | | | | | | Salaries, wages and other benefits | 16,282 | 17,303 | (1,021) | -5.90 | | Contributions to defined contribution retirement plans | 2,159 | 2,325 | (166) | -7.14 | | Subtotal | 18,441 | 19,628 | (1,187) | -6.05 | | Other Items | | | | | | Cost of inventories recognized as expense | 37,824 | 50,893 | (13,069) | -25.68 | | Depreciation of property, plant and equipment | 4,481 | 4,672 | (191) | -4.09 | | Depreciation of right-of-use assets | 2,859 | 6,168 | (3,309) | -53.65 | | Net provision for expected credit losses | 7,476 | 7,261 | 215 | 2.96 | | Research and development expenses | 2,588 | 4,221 | (1,633) | -38.69 | | Impairment of non-financial assets | 4,721 | 821 | 3,900 | 475.03 | Income Tax Income tax expense for FY2024 primarily consisted of China corporate income tax, which slightly increased compared to the previous year Income Tax Expense | Item | 2024 (HK$ thousand) | 2023 (HK$ thousand) | | :--- | :--- | :--- | | Current tax - China corporate income tax | 16 | – | | Underprovision in prior years - China corporate income tax | – | 4 | | Income Tax Expense | 16 | 4 | Dividends No dividends were paid or proposed for the year ended March 31, 2024 - No dividends were paid or proposed for both FY2024 and FY2023[41] Loss Per Share Basic loss per share for FY2024 significantly narrowed to 6.0 HK cents from 16.05 HK cents in FY2023, with no diluted loss per share presented due to the absence of potential dilutive ordinary shares Loss Per Share Data | Indicator | 2024 | 2023 | | :--- | :--- | :--- | | Loss Attributable to Owners of the Company (HK$ thousand) | (17,840) | (40,971) | | Weighted Average Number of Ordinary Shares (thousand shares) | 295,722 | 255,325 | | Basic and Diluted Loss Per Share (HK cents) | (6.0) | (16.05) | - Diluted loss per share is not presented as there were no potential dilutive ordinary shares in either year[43] Trade and Other Receivables As of March 31, 2024, total trade and other receivables amounted to HK$40.850 million, a slight increase from the previous year, with an increase in loss allowance for trade receivables but a significant decrease for loan receivables and other receivables Overview of Trade and Other Receivables | Item | 2024 (HK$ thousand) | 2023 (HK$ thousand) | | :--- | :--- | :--- | | Trade receivables | 48,546 | 47,407 | | Less: Loss allowance | (26,194) | (23,605) | | Net Trade Receivables | 22,352 | 23,802 | | Loan receivables | – | 21,318 | | Other receivables | 24,529 | 23,596 | | Prepaid VAT and other taxes | 67 | 118 | | Deposits and prepayments | 13,818 | 12,119 | | Less: Loss allowance | (19,916) | (41,255) | | Net Deposits and Prepayments | 18,498 | 16,050 | | Total Trade and Other Receivables | 40,850 | 39,852 | Ageing Analysis of Trade Receivables (by due date) | Ageing | 2024 (HK$ thousand) | 2023 (HK$ thousand) | | :--- | :--- | :--- | | Not yet due | 28,707 | 20,694 | | 1 to 60 days | 2,258 | 2,729 | | 61 to 90 days | 1,874 | 1,962 | | 91 to 180 days | 340 | 340 | | 181 to 365 days | 6,511 | 1,811 | | Over 365 days | 8,856 | 19,871 | | Total | 48,546 | 47,407 | | Less: Loss allowance | (26,194) | (23,605) | | Net | 22,352 | 23,802 | - Customer credit terms range from 30 to 180 days, extendable to 181 to 365 days for reputable customers[45] Trade and Other Payables As of March 31, 2024, total trade and other payables amounted to HK$45.646 million, a decrease from the previous year, primarily due to a reduction in trade payables and deposits received Overview of Trade and Other Payables | Item | 2024 (HK$ thousand) | 2023 (HK$ thousand) | | :--- | :--- | :--- | | Trade payables | 13,814 | 18,186 | | Accrued salaries | 3,492 | 3,213 | | Accrued expenses | 3,347 | 3,723 | | Other payables | 24,454 | 26,923 | | Deposits received | 3 | 4,416 | | Other taxes payable | 536 | 751 | | Total | 45,646 | 57,212 | Ageing Analysis of Trade Payables (by invoice date) | Ageing | 2024 (HK$ thousand) | 2023 (HK$ thousand) | | :--- | :--- | :--- | | 0 to 60 days | 4,424 | 2,208 | | 61 to 90 days | 197 | 8,692 | | 91 to 180 days | 254 | 2,474 | | 181 to 365 days | 449 | 1,244 | | Over 365 days | 8,490 | 3,568 | | Total | 13,814 | 18,186 | Management Discussion and Analysis Business Review The Group is a leading provider of smart building and home products and integrated automatic control system solutions, with applications across various industries; in FY2024, the control systems business saw revenue growth and profitability, building intelligence maintained stable revenue and turned profitable, while the data center business experienced revenue decline and expanded losses - The Group is a leading provider of smart building and home products and integrated automatic control system solutions, with products widely used in high-rise buildings, high-end villas, and smart communities[48] - Principal businesses include the design, development, and sale of automatic control systems and solutions; the design, R&D, production, and sale of smart systems; and leasing, hosting, and other related services for advanced technologies such as computer equipment, IT infrastructure, and robots[49] Control Systems Business The control systems business provides automatic control systems and solutions widely used in power, petrochemical, and utility industries; in FY2024, external revenue grew to HK$38.0 million, and the segment recorded a profit of HK$0.5 million, reversing last year's loss - External revenue for the control systems business increased to HK$38.0 million in FY2024 (2023: HK$34.0 million)[50] - The control systems segment recorded a segment profit of HK$0.5 million in FY2024, compared to a loss of HK$2.4 million in FY2023[50] Building Intelligence Business The building intelligence business primarily supplies visual intercom systems, security alarm solutions, and smart home devices to large real estate developers; in FY2024, external revenue remained stable at HK$24.3 million, and the segment recorded a profit of HK$3.6 million, mainly due to sales of high-margin products - External revenue for the building intelligence business was HK$24.3 million in FY2024 (2023: HK$25.8 million), remaining stable[52] - The building intelligence segment recorded a segment profit of HK$3.6 million for the year, compared to a segment loss of HK$13.7 million in the prior year, primarily due to the sale of more high-margin products[52] Data Center Business The data center business offers leasing and maintenance services for computer equipment, IT infrastructure, and robots; in FY2024, total revenue decreased to HK$0.2 million, and the segment loss expanded to HK$11.7 million, mainly due to impairment of property, plant and equipment - Total revenue for the data center business was HK$0.2 million in FY2024 (2023: HK$0.8 million)[53] - The data center segment recorded a segment loss of HK$11.7 million in FY2024 (2023: loss of HK$3.5 million), primarily due to an impairment of property, plant and equipment of HK$4.7 million[53] Investment in an Associate Engaged in Charging Station Leasing Business The Group invested in Iogo Workshop Investment Limited in 2020, holding a 20% equity stake; in FY2024, 5% of the equity was sold for a gain of HK$1.5 million, with the remaining 15% classified as financial assets at fair value through profit or loss, and the Group recognized a share of loss from the associate of HK$2.6 million for the year - The Group acquired a 20% equity stake in associate Iogo Workshop Investment Limited for HK$56 million in 2020[54] - In FY2024, 5% of Iogo Workshop Investment Limited's equity was sold for a gain of HK$1.5 million, with the remaining 15% stake classified as financial assets at fair value through profit or loss[54] - A share of loss from the associate of HK$2.6 million was recognized for the year (2023: HK$2.9 million)[55] Business Outlook for the Group's Principal Businesses Facing challenges in the Chinese market and US-China tensions, the Group achieved profitability in its building intelligence and control systems segments through cost-saving measures, and will continue to focus on 5G technology, IoT, and smart home markets while seeking new business opportunities to diversify revenue streams - The Chinese market is affected by inflation, high interest rates, and US-China tensions, leading to a weak economic recovery[56] - The Board believes that the growth of 5G technology, IoT, and smart home markets will ensure demand for building intelligence products[56] - Effective cost-saving measures implemented during the year resulted in segment profits for both the building intelligence and control systems segments[56] - The Group will continue to prudently control costs, identify potential business opportunities to diversify revenue sources, and leverage business opportunities arising from 5G technology and related products[57] Future Fundraising and Investment Opportunities The Company will continuously explore new investment or M&A opportunities to expand or diversify its businesses and evaluate potential fundraising options, including issuing new shares or convertible securities, to support existing operations and future development - The company will explore new business, investment, or M&A opportunities to expand or diversify its businesses[58] - The company will identify and evaluate potential fundraising opportunities, possibly including the issuance of new shares or convertible securities[58] The Group's Loan Transactions As of March 31, 2024, the Group had two outstanding loan receivables with zero net book value, Debtor 1 and Debtor 2, both fully provided for due to long-term overdue status and doubtful recoverability; the Group maintains internal control policies and credit assessment procedures before granting loans and continues to pursue recovery actions Overview of Outstanding Loan Receivables (as of March 31, 2024) | Borrower | Principal Amount (HK$ thousand) | Interest Rate | Term | Collateral | Outstanding Amount (HK$ thousand) | Loss Allowance (HK$ thousand) | Carrying Amount (HK$ thousand) | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | Debtor 1 | 13,000 | 8% per annum | One month | Mineral inventory assets and personal guarantee | 10,087 | (10,087) | – | | Debtor 2 | 13,000 (maximum revolving facility) | Interest-free | Repayable on demand | Factory production equipment and machinery | 11,134 | (11,134) | – | | Total | | | | | 21,221 | (21,221) | – | - All loan transactions are not part of the Group's ordinary course of business, and all applicable size test percentage ratios under the Listing Rules are below 5%[61] Regarding Debtor 1 Debtor 1, a trading and investment company, received a HK$13 million short-term bridging loan from the Group in 2020 at an 8% annual interest rate; due to long-term repayment delays and doubtful recoverability, the Group has fully provided for the outstanding HK$10.1 million - A HK$13 million short-term bridging loan was granted to Debtor 1 on April 29, 2020, at an 8% annual interest rate, initially unsecured, later secured by mineral inventory assets as additional collateral[63] - As of March 31, 2024, the outstanding amount is approximately HK$10.1 million, fully provided for due to doubtful recoverability[63][64] Regarding Debtor 2 Debtor 2, a mask manufacturing company, was granted a revolving facility of up to HK$13 million by the Group in 2020 for potential investment collaboration; due to repayment delays and doubtful recoverability, the Group has fully provided for the outstanding HK$11.1 million - A revolving facility of up to HK$13 million was granted to Debtor 2 on May 22, 2020, interest-free, for potential investment in a mask factory[66][67] - As of March 31, 2024, the outstanding amount is approximately HK$11.1 million, fully provided for due to doubtful recoverability[67][68] Internal Control System and Credit Assessment Before Granting Loans While not a registered money lender, the Company maintains an internal control system and conducts credit assessments, including borrower identification, financial review, and bankruptcy/liquidation searches; loan approvals are determined on a case-by-case basis, considering credit risk, market interest rates, and potential business relationships, with size and connected transaction tests performed to ensure Listing Rules compliance - The company maintains an internal control system and conducts credit assessments, including identity verification, financial statement review, and searches[70][71] - Loan terms consider borrower credit risk, recoverability, market interest rates, and potential business relationships[74] - The Group conducts size tests and connected transaction tests to comply with the Listing Rules[74] Actions Taken to Recover Outstanding Loan Receivables The Company continuously issues demand letters and reminders to debtors, seeks legal advice, requests collateral such as personal guarantees and asset pledges, and negotiates repayment schedules to achieve legally binding debt settlement arrangements, with ongoing monitoring of repayment status and legal action as necessary - The company continuously issues demand letters and reminders to debtors, and seeks legal advice[77] - Collateral such as personal guarantees and asset pledges has been requested from borrowers, and repayment schedules are being negotiated[77] - Repayment status will be continuously monitored, and legal action will be taken if necessary[78] Financial Review In FY2024, the Group's revenue slightly increased, sales costs significantly decreased, and gross profit and gross margin substantially improved; other income declined due to reduced government subsidies, but net other gains surged from the disposal of subsidiaries and an associate, while administrative expenses and finance costs both decreased, leading to a significant narrowing of the loss for the year Revenue The Group's revenue for FY2024 was approximately HK$62.6 million, a 3.5% year-on-year increase, primarily driven by increased market demand in the control systems segment - FY2024 revenue was approximately HK$62.6 million, a 3.5% increase year-on-year[79][81] - Revenue growth was primarily due to increased market demand in the control systems segment[81] Cost of Sales Cost of sales for FY2024 was approximately HK$37.8 million, a 26.7% year-on-year decrease, mainly because some R&D costs for new products were recognized as R&D expenses in the previous year - FY2024 cost of sales was approximately HK$37.8 million, a 26.7% decrease year-on-year[82] - The decrease in cost of sales was primarily due to some R&D costs for new products being recorded under R&D expenses in the prior year[82] Gross Profit and Gross Margin Gross profit for FY2024 was approximately HK$24.8 million, a 178.7% year-on-year increase, with the gross margin rising to 39.6%, primarily attributable to the sale of high-margin new products - FY2024 gross profit was approximately HK$24.8 million, a 178.7% increase year-on-year[83] - Gross margin increased to 39.6% (FY2023: 14.8%), primarily due to the launch of high-margin new products[83] Other Income Other income for FY2024 decreased to approximately HK$2.2 million, mainly due to a reduction in government subsidies of approximately HK$1.3 million - FY2024 other income decreased to approximately HK$2.2 million (2023: HK$3.6 million)[84] - Primarily due to a reduction in government subsidies of approximately HK$1.3 million[84] Net Other Gains Net other gains for FY2024 increased to approximately HK$4.8 million, primarily benefiting from gains of approximately HK$3.0 million and HK$1.5 million from the disposal of a subsidiary and an associate, respectively - FY2024 net other gains increased to approximately HK$4.8 million (2023: HK$1.8 million)[85] - Primarily due to a gain on disposal of a subsidiary of approximately HK$3.0 million and a gain on disposal of an associate of approximately HK$1.5 million[85] Selling and Distribution Expenses Selling and distribution expenses for FY2024 decreased to approximately HK$1.4 million, a 36.4% year-on-year decline, consistent with reduced sales in the building intelligence segment - FY2024 selling and distribution expenses decreased to approximately HK$1.4 million (2023: HK$2.2 million), a 36.4% decrease year-on-year[86] - The decrease is consistent with reduced sales in the building intelligence segment[86] Administrative and Other Operating Expenses Administrative and other operating expenses for FY2024 decreased to approximately HK$27.5 million, primarily due to lower staff costs - FY2024 administrative and other operating expenses decreased to approximately HK$27.5 million (2023: HK$36.8 million)[88] - Primarily due to lower staff costs[88] Net Provision for Expected Credit Losses Net provision for expected credit losses for FY2024 was HK$7.5 million, slightly higher than the previous year, with provisions mainly targeting trade receivables, loan receivables, and other receivables - FY2024 net provision for expected credit losses was HK$7.5 million (2023: HK$7.3 million)[89] - Provisions primarily target trade receivables (HK$26.2 million) and loan and other receivables (HK$19.9 million)[89] Finance Costs Finance costs for FY2024 were approximately HK$3.3 million, a 13.2% year-on-year decrease, mainly due to a reduction in the effective interest rate on bank borrowings - FY2024 finance costs were approximately HK$3.3 million, a 13.2% decrease year-on-year[90] - Primarily due to a reduction in the effective interest rate on bank borrowings[90] Loss for the Year Loss attributable to owners of the Company for FY2024 significantly decreased by 56.6% to approximately HK$17.8 million, primarily due to increased gross profit and net other gains - FY2024 loss attributable to owners of the Company was approximately HK$17.8 million, a significant 56.6% decrease year-on-year[92] - Primarily due to an increase in gross profit of approximately HK$15.9 million and an increase in net other gains of approximately HK$3.0 million[92] Capital Structure, Liquidity and Financial Resources The Group primarily meets its working capital needs through operating cash, bank borrowings, and shareholder contributions; in FY2024, the Company successfully raised funds through three placing exercises, significantly improving its current ratio and gearing ratio, thereby enhancing financial flexibility - The Group's working capital is primarily sourced from operating cash, bank borrowings, and shareholder contributions[93] - As of March 31, 2024, issued share capital was approximately HK$36.0 million (2023: HK$26.0 million)[93] - Net proceeds of approximately HK$12.1 million from the 2022 placing were fully utilized for general working capital and investment opportunities[96][97] - Net proceeds of approximately HK$14.7 million from the 2023 placing were fully utilized for general working capital and investment opportunities[99][101] - Net proceeds of approximately HK$23.8 million from the 2024 placing remained unutilized during the year, intended for general working capital and investment opportunities[103] Liquidity and Solvency Ratios | Indicator | March 31, 2024 | March 31, 2023 | | :--- | :--- | :--- | | Current Ratio | Approx. 1.3 | Approx. 0.7 | | Gearing Ratio | 15% | 96% | Bank Borrowings As of March 31, 2024, the Group's outstanding bank borrowings amounted to approximately HK$50.7 million, a decrease from the previous year - As of March 31, 2024, outstanding bank borrowings were approximately HK$50.7 million (2023: HK$62.8 million)[105] Pledged Assets As of March 31, 2024, the Group's land use rights, property, plant and equipment with a total carrying amount of approximately HK$28.2 million were pledged for bank borrowings - As of March 31, 2024, land use rights, property, plant and equipment with a total carrying amount of approximately HK$28.2 million were pledged to secure bank borrowings[106] Contingent Liabilities As of March 31, 2024, the Group had no significant contingent liabilities - As of March 31, 2024, the Group had no significant contingent liabilities[107] Significant Acquisitions and Disposals During the year, the Group completed several significant transactions, including the disposal of a portion of MOX Group Limited's equity, the full disposal of interests in Global Clean Energy Investment Limited, and the disposal of all equity and shareholder loans in Hong Kong Blockchain Development Marketing Limited and Hong Kong Blockchain Development Company Limited - On July 24, 2023, MOX Group Limited completed a placing, reducing the Group's shareholding from 100% to 66.67%[108] - On September 11, 2023, all interests in Global Clean Energy Investment Limited and its subsidiaries were disposed of for HK$1[109] - On October 31, 2023, all equity and shareholder loans in Hong Kong Blockchain Development Marketing Limited and Hong Kong Blockchain Development Company Limited were disposed of[109] Significant Capital Expenditure for the Year Except as otherwise disclosed in this announcement, the Group had no significant capital expenditure commitments as of March 31, 2024 - As of March 31, 2024, the Group had no significant capital expenditure commitments[111] Exchange Rate Fluctuation Risk The Group's transactions and bank deposits are primarily denominated in RMB and HKD, effectively mitigating foreign currency exchange risk; despite RMB exchange rate fluctuations against HKD, the Directors do not anticipate a material adverse impact on operations and thus have not implemented a formal hedging policy - The Group's transactions and bank deposits are primarily denominated in RMB and HKD, reducing foreign currency exchange risk[112] - The Directors do not expect RMB exchange rate fluctuations to have a material adverse impact on operations and have not implemented a formal hedging policy[112] Employees and Remuneration Policy As of March 31, 2024, the Group had 85 employees, with staff costs decreasing by 6.1% year-on-year; remuneration policy is based on individual performance, experience, and industry practice, reviewed annually, and the Company adopted a new share option scheme in 2022, granting 25,043,200 share options in April 2024 to incentivize employees - As of March 31, 2024, the Group had 85 employees (2023: 115 employees)[113] - FY2024 staff costs were approximately HK$18.4 million, a 6.1% decrease year-on-year, primarily due to a reduction in employee numbers[113] - Remuneration policy is determined based on individual performance, experience, and industry practice, and is reviewed annually[115] - A new share option scheme was adopted in 2022, and 25,043,200 share options were granted on April 27, 2024, to incentivize employees[115][116][117] Events After the Reporting Period Grant of Share Options On April 27, 2024, the Company granted a total of 25,043,200 share options to executive directors and certain employees under the share option scheme, with an exercise price of HK$0.49 and a five-year validity period - On April 27, 2024, a total of 25,043,200 share options were granted with an exercise price of HK$0.49[117] - The share options have a validity and vesting period of five years, from April 26, 2024, to April 25, 2029[117] - Of these, 3,596,800 options were granted to Mr. You Yiyang, an executive director, with the remainder granted to six employees[118] Appointment of Non-Executive Director On May 29, 2024, Ms. Mo Yina was appointed as a non-executive director of the Company and will retire and be eligible for re-election at the next annual general meeting - On May 29, 2024, Ms. Mo Yina was appointed as a non-executive director of the Company[120] Other Information Dividends The Board does not recommend the declaration of any dividend for the year ended March 31, 2024 - The Board does not recommend the declaration of any dividend for FY2024[122] Closure of Register of Members To determine eligibility to attend and vote at the 2024 Annual General Meeting, the Company will suspend its share transfer registration from August 26 to August 29, 2024, with all share transfer documents required to be lodged by 4:30 p.m. on August 23, 2024 - Share transfer registration will be suspended from August 26 to August 29, 2024[123] - All share transfer documents must be lodged by 4:30 p.m. on August 23, 2024[123] Purchase, Redemption or Sale of the Company's Listed Securities For the year ended March 31, 2024, neither the Company nor any of its subsidiaries purchased, sold, or redeemed any of the Company's listed securities - In FY2024, neither the Company nor its subsidiaries purchased, sold, or redeemed any of the Company's listed securities[124] Corporate Governance Practices The Company has adopted the Corporate Governance Code set out in Appendix 14 of the Listing Rules and complied with all applicable code provisions in FY2024, except for Code Provision C.2 (Chairman vacancy) and F.2.2 (Chairman attendance at AGM) - The company has adopted the Corporate Governance Code set out in Appendix 14 of the Listing Rules[125] - All applicable code provisions were complied with in FY2024, except for Code Provisions C.2 and F.2.2[125] Code Provision C.2 of the Corporate Governance Code The Company has not complied with Code Provision C.2 as the Chairman position has been vacant since January 3, 2020; currently, the Chairman's role is jointly performed by Board members, and the Company is seeking a suitable candidate to fill the vacancy - The position of Chairman of the Board has been vacant since January 3, 2020, failing to comply with Code Provision C.2[127] - The Chairman's role is jointly performed by Board members, and the company is seeking a suitable candidate[127] Code Provision F.2.2 of the Corporate Governance Code As the Chairman position was vacant on the day of the 2023 Annual General Meeting, Mr. Han Weining (Executive Director and CEO) was appointed as Chairman to address shareholder questions, aligning with the spirit of the Code - On the day of the 2023 Annual General Meeting, with the Chairman position vacant, Mr. Han Weining (Executive Director and Chief Executive Officer) was appointed as Chairman[128] - The Directors believe Mr. Han Weining has sufficient understanding of the Group's business to serve as Chairman of the meeting[128] Compliance with the Model Code for Securities Transactions by Directors Following specific inquiries, all Directors confirmed compliance with the Model Code set out in Appendix 10 of the Listing Rules for the year ended March 31, 2024 - All Directors confirmed compliance with the Model Code in FY2024[129] Audit Committee The Audit Committee, comprising three independent non-executive directors, has reviewed the Company's consolidated financial statements for FY2024 and concluded that all applicable accounting standards and requirements have been complied with, and adequate disclosures have been made - The Audit Committee comprises three independent non-executive directors, with Mr. Lam Ying Hung as Chairman[130] - The Audit Committee has reviewed the FY2024 consolidated financial statements and believes that accounting standards have been complied with and adequate disclosures made[130] Publication of Annual Results Announcement and Annual Report This annual results announcement has been published on the HKEX website and the Company's website; the FY2024 annual report will be dispatched to shareholders and published on the aforementioned websites in due course - The annual results announcement has been published on the HKEX website (www.hkexnews.hk) and the Company's website (www.synertone.net)[131](index=131&type=chunk) - The FY2024 annual report will be dispatched to shareholders and published on the aforementioned websites in due course[131]