万保刚集团(01213) - 2024 - 年度财报

Corporate Information The section provides fundamental details about the company's registration, contact information, and key personnel Financial Highlights In FY2023/2024, the Group's total revenue decreased by 17.0% to HKD 341 million, with net profit falling 66.8% to HKD 1.75 million, and loss attributable to shareholders expanding to HKD 4.9 million, despite a slight increase in gross profit margin to 26.3% and improved liquidity ratios | Key Financial Indicators | FY2024 | FY2023 | YoY Change (%) | | :--- | :--- | :--- | :--- | | Operating Results (HKD Thousand) | | | | | Revenue | 340,579 | 410,421 | (17.0) | | Gross Profit | 89,491 | 106,083 | (15.6) | | Operating Profit | 10,264 | 13,557 | (24.3) | | Net Profit | 1,751 | 5,269 | (66.8) | | Per Share Data (HK Cents) | | | | | Loss Per Share | (2.5) | (0.2) | 1,150 | | Total Dividend Per Share | 1 | 1 | - | | Financial Ratios | | | | | Gross Profit Margin (%) | 26.3 | 25.9 | +1.5% | | Current Ratio (times) | 2.2 | 1.9 | +15.8% | | Net Gearing Ratio (%) | 24.7 | 29 | -14.8% | - By business segment, the trading of electronic and electrical components is the primary revenue source, accounting for 66% of total revenue; computer business accounts for 19%; and cosmetics and online retail business accounts for 15%[24] - By geographical region, the Hong Kong market contributed 45% of revenue, the South African market 35%, and the Asia Pacific region (excluding Hong Kong) 17%[24] CEO's Statement The CEO reports a 16.8% decline in turnover to HKD 341 million and an expanded loss attributable to shareholders of HKD 4.9 million for FY2023/24, with all three core businesses experiencing revenue declines, while cost control measures reduced total operating expenses by 16.3% | Financial Indicator | FY2024 | FY2023 | | :--- | :--- | :--- | | Turnover | Approx. HKD 341 million | Approx. HKD 410 million | | Gross Profit | Approx. HKD 89 million | Approx. HKD 106 million | | Gross Profit Margin | 26.3% | 25.9% | | Operating Profit | Approx. HKD 10.3 million | Approx. HKD 13.6 million | | Loss Attributable to Shareholders | Approx. HKD 4.9 million | Approx. HKD 0.3 million | | Loss Per Share | Approx. HKD 0.025 | Approx. HKD 0.002 | - All three core business segments experienced a decline in turnover: - Trading of electronic and electrical components: decreased by approximately 18.3% to HKD 223 million - Computer business: decreased by approximately 15% to HKD 68 million - Cosmetics and online retail business: decreased by approximately 12.3% to HKD 50 million[28][30] - Company implemented cost control measures, reducing total operating expenses by 16.3% to HKD 82 million, and conducted staff reductions across various business units[29][31] - Future outlook and strategies include anticipating an improvement in geopolitical tensions, inflation, and high interest rates by late 2024, leveraging the new South African headquarters for logistics efficiency, focusing on brand image and product innovation for the computer business, and maintaining optimism for online retail despite changing consumer behavior[34][35][36][38] Management Discussion and Analysis This section provides an in-depth review of the Group's operational performance, financial position, capital structure, and human resources policies for the reporting period Business Review During the reporting period, all three core business segments faced challenges, with the electronic and electrical components trading business experiencing an 18.3% revenue decline due to shrinking demand, while the cosmetics and online retail business saw a 12.3% revenue decrease despite online growth | Business Segment | FY2024 Revenue (HKD Hundred Million) | YoY Change | FY2024 Gross Profit Margin | FY2023 Gross Profit Margin | | :--- | :--- | :--- | :--- | :--- | | Electronic and Electrical Components Trading | 2.23 | -18.3% | 29.5% | 28.0% | | Computer Business | 0.68 | -15.0% | 19.8% | 19.3% | | Cosmetics and Online Retail | 0.50 | -12.3% | 20.8% | 24.8% | - Total turnover of overseas subsidiaries was approximately HKD 144 million, a 16.8% year-on-year decrease, with South African subsidiaries' turnover at approximately HKD 119 million, down 9.8%, primarily due to reduced demand for electronic components in both consumer and industrial sectors[51][52] - Cosmetics business faced challenges due to conservative consumer spending, leading to the closure of a retail store in Tseung Kwan O in February 2024, but the Group observed continued growth in its online retail business[55][58] Liquidity and Financial Resources As of March 31, 2024, the Group maintained a robust financial position with approximately HKD 24 million in cash and bank balances, net current assets of approximately HKD 115 million, and an improved current ratio of 2.2, supported by HKD 63 million in unutilized bank facilities | Indicator | March 31, 2024 | March 31, 2023 | | :--- | :--- | :--- | | Cash and Bank Balances | Approx. HKD 24 million | Approx. HKD 30 million | | Net Current Assets | Approx. HKD 115 million | Approx. HKD 118 million | | Current Ratio | 2.2 | 1.9 | | Total Assets | Approx. HKD 274 million | Approx. HKD 320 million | | Net Asset Value Per Share | Approx. HKD 0.83 | Approx. HKD 0.86 | | Total Bank Facilities | Approx. HKD 89 million | Approx. HKD 91 million | | Unutilized Bank Facilities | Approx. HKD 63 million | Approx. HKD 40 million | Capital Structure and Gearing ratio As of March 31, 2024, the Group's total borrowings decreased by nearly half to approximately HKD 26 million, primarily short-term bank loans denominated in HKD, resulting in a lower net gearing ratio of 25% from 29% last year, indicating a more robust capital structure | Indicator | March 31, 2024 | March 31, 2023 | | :--- | :--- | :--- | | Total Borrowings | Approx. HKD 26 million | HKD 50 million | | Net Borrowings | Approx. HKD 38 million | Approx. HKD 46 million | | Total Equity | Approx. HKD 167 million | Approx. HKD 173 million | | Net Gearing Ratio | 25% | 29% | - Group's borrowing interest rates ranged from 3.08% to 12.4% per annum, an increase from 2.8% to 11.3% in the previous year[62][65] Employment, Training and Remuneration Policy As of March 31, 2024, the Group employed 358 full-time staff, with human resources policies based on performance, merit, and market conditions, offering competitive remuneration, MPF, medical insurance, and performance bonuses - As of March 31, 2024, the Group had 358 full-time employees in Hong Kong and overseas[75] Directors' and Senior Management's Profile This section provides biographical details and professional backgrounds of the Group's directors and senior management team Corporate Governance Report This report details the Group's commitment to maintaining high standards of corporate governance, outlining its practices, board structure, committee functions, and internal control systems Corporate Governance Practices The company strives to maintain high corporate governance standards, adhering to most Code on Corporate Governance provisions during the reporting period, with one deviation regarding the non-rotation of the Chairman and Vice Chairman for stability - Company complied with the Code on Corporate Governance provisions, with one deviation: the Chairman and Vice Chairman are not required to retire by rotation every three years, which the Board believes ensures continuity and stability in executing long-term business plans[136][138] Board of Directors The Board comprises seven directors, including four executive and three independent non-executive directors, meeting listing rule requirements, and is responsible for approving and monitoring the Group's long-term strategies, annual budgets, and performance - Board of Directors consists of 7 members: 4 executive directors and 3 independent non-executive directors, with one independent non-executive director possessing expertise in accounting or related financial management[142] - All directors participated in continuous professional development during the reporting period, through attending seminars and reading relevant professional materials[158][159] Committees The company has established Remuneration, Nomination, and Audit Committees to assist the Board, with the Remuneration Committee revising the management bonus mechanism, the Nomination Committee overseeing director appointments, and the Audit Committee reviewing financial reporting and internal controls - Remuneration Committee: On February 29, 2024, resolved to adopt a new executive director management bonus mechanism, lowering the profit-linked bonus threshold from HKD 8 million to HKD 3 million to adapt to the operating environment[177] - Nomination Committee: Responsible for leading the director appointment process and has adopted a director nomination policy, with selection criteria including integrity, experience, diversity, and independence[182][184] - Audit Committee: Composed of three independent non-executive directors, held four meetings during the reporting period, reviewing annual and interim results, internal control system effectiveness, accounting principles, and the scope and remuneration of external auditors[191][193] Risk Management and Internal Control The Board holds ultimate responsibility for the Group's risk management and internal control systems, regularly reviewing their effectiveness, with a compliance officer and internal audit function coordinating risk identification, assessment, and mitigation efforts - Board confirmed its responsibility for risk management and internal control systems and conducted an annual review of their effectiveness[208][211] - Group has established an internal audit function responsible for reviewing key financial and operational issues and reporting findings and improvement recommendations to the Audit Committee[210] Environmental, Social and Governance Report This report outlines the Group's commitment and performance across environmental protection, social responsibility, and corporate governance, detailing efforts in emissions reduction, resource efficiency, employee welfare, supply chain management, and community engagement Environmental Performance The Group is committed to environmental protection, with total greenhouse gas emissions decreasing by 23% to 203 tonnes during the reporting period, achieved through energy-saving measures and resource recycling, while also addressing climate change-related physical and transition risks | Emission Indicator | 2023/2024 | 2022/2023 | | :--- | :--- | :--- | | Total Greenhouse Gas Emissions (tonnes) | 203 | 264 | | - Scope 1 (Company Fleet) | 18 | 19 | | - Scope 2 (Electricity) | 181 | 245 | | - Scope 3 (Business Air Travel) | 4 | 0 | | Resource Usage Indicator | 2023/2024 | 2022/2023 | | :--- | :--- | :--- | | Total Energy Consumption (kWh) | 407,000 | 512,000 | | Office Paper Procurement (kg) | 1,600 | 1,800 | | Waste Paper/Cardboard Recycling (kg) | 8,000 | 7,800 | - Group has formulated a five-year plan aiming to reduce greenhouse gas and exhaust gas emission intensity by 5% and energy consumption by 5%, using this reporting period as the baseline[259][266] - Group identified physical risks (e.g., extreme weather impacting operations) and transition risks (e.g., increased compliance costs from stricter regulations) posed by climate change and has implemented contingency plans and monitoring measures to address them[276][277] Social Performance The Group prioritizes human capital, implementing equal opportunity policies, providing competitive compensation, ensuring a safe work environment with no reported accidents, and fostering continuous learning, while also upholding labor standards, ethical supply chain practices, and community engagement | Employee Composition (2023/2024) | Proportion | | :--- | :--- | | By Gender | | | Male | 57% | | Female | 43% | | By Region | | | Asia | 40% | | Africa | 57% | | Europe | 3% | - During the reporting period, the Group reported no work-related fatalities or injuries, with 0 lost workdays due to occupational injuries[294] - Group holds ISO9001 certification and evaluates suppliers' environmental and social responsibility performance, with 1,159 suppliers identified during the reporting period, primarily located in Asia (47%), Africa (37%), and Europe (16%)[304][309] - Group maintains a zero-tolerance policy towards corruption, has a whistleblowing mechanism, and provides anti-corruption training to directors and employees, with no related legal cases during the reporting period[319][322] - Group actively fulfills its social responsibilities, having been awarded the "Caring Company" logo by The Hong Kong Council of Social Service for 17 consecutive years[326] Report of the Directors This report provides an overview of the Group's performance, proposed dividend distributions, directors' and chief executive's interests, and details of connected transactions during the financial year Results and Appropriations The Board recommends a final dividend of 0.5 HK cents per ordinary share for the year ended March 31, 2024, totaling HKD 1 million, bringing the full-year dividend to 1 HK cent per share, consistent with the previous year - Board recommends a final dividend of 0.5 HK cents per ordinary share for the review year, totaling HKD 1 million[348] - Company paid an interim dividend of 0.5 HK cents per ordinary share on December 22, 2023, totaling HKD 1 million[347] Directors' and Chief Executive's Interests As of March 31, 2024, key management held significant interests in the company through personal and corporate shareholdings, with Chairman Dr. Hung Kim Fung and Vice Chairman Ms. Yeung Man Yi jointly holding 45%, and Executive Directors Mr. Hung Ying Fung and Mr. Yeung Kwok Leung holding 13.5% and 15% respectively | Director Name | Capacity | Number of Shares Held | Percentage of Shareholding | | :--- | :--- | :--- | :--- | | Dr. Hung Kim Fung, Measure | Chairman | 90,000,000 (Corporate Interest) | 45% | | Ms. Yeung Man Yi, Beryl | Vice Chairman & CEO | 90,000,000 (Corporate Interest) | 45% | | Mr. Hung Ying Fung | Executive Director | 26,990,000 (Personal Interest) | 13.50% | | Mr. Yeung Kwok Leung, Allix | Executive Director | 30,000,000 (Corporate Interest) | 15% | Connected Transactions During the reporting period, the Group engaged in ongoing connected transactions with M-Bar Limited, primarily for office and warehouse leases, with a renewed one-year agreement for HKD 232,000 monthly rent, notably including a HKD 2.784 million rent waiver for the period from April 1, 2023, to March 31, 2024 - Group leases properties for its headquarters, offices, and warehouses from M-Bar Limited, a connected company beneficially owned by the company's executive directors[411] - On September 26, 2023, both parties renewed a one-year lease agreement with a total monthly rent of HKD 232,000[413] - M-Bar agreed to waive the Group's rent for the period from April 1, 2023, to March 31, 2024, totaling HKD 2,784,000[418] Independent Auditors' Report Independent auditor Crowe CPA Limited issued an unmodified opinion on the Group's consolidated financial statements for the year ended March 31, 2024, affirming their fair presentation in accordance with Hong Kong Financial Reporting Standards and the Hong Kong Companies Ordinance, with "Revenue Recognition" highlighted as a key audit matter - Auditor's opinion is unmodified, stating that the consolidated financial statements fairly and truly reflect the Group's financial position and performance[431] - "Revenue Recognition" was identified as a key audit matter due to the significant volume of revenue transactions generated by the Group across different locations[436][437][438] Consolidated Financial Statements This section presents the Group's comprehensive financial performance, position, and cash flows, including detailed notes on accounting policies and segment information Consolidated Statement of Profit or Loss For the year ended March 31, 2024, the Group's revenue decreased by 17% to HKD 341 million, gross profit fell by 15.6% to HKD 89.49 million, and profit for the year significantly reduced to HKD 1.75 million, resulting in a loss attributable to equity holders of HKD 4.89 million | Item (HKD Thousand) | FY2024 | FY2023 | | :--- | :--- | :--- | | Revenue | 340,579 | 410,421 | | Gross Profit | 89,491 | 106,083 | | Operating Profit | 10,264 | 13,557 | | Profit Before Income Tax | 6,394 | 9,230 | | Profit for the Year | 1,751 | 5,269 | | (Loss)/Profit Attributable to Equity Holders of the Company | (4,891) | (378) | | Profit Attributable to Non-controlling Interests | 6,642 | 5,647 | Consolidated Statement of Financial Position As of March 31, 2024, the Group's total assets decreased by 14.4% to HKD 274 million, while total liabilities also reduced, leading to a slight 3.5% decrease in net assets (total equity) to HKD 167 million, maintaining net current assets at a robust HKD 115 million | Item (HKD Thousand) | March 31, 2024 | March 31, 2023 | | :--- | :--- | :--- | | Assets | | | | Non-current Assets | 59,788 | 67,557 | | Current Assets | 214,095 | 252,536 | | Total Assets | 273,883 | 320,093 | | Liabilities and Equity | | | | Current Liabilities | 99,452 | 134,883 | | Non-current Liabilities | 7,783 | 12,536 | | Total Liabilities | 107,235 | 147,419 | | Net Assets (Total Equity) | 166,648 | 172,674 | Consolidated Statement of Cash Flows During the reporting year, net cash generated from operating activities significantly decreased to HKD 21.95 million, with net cash used in investing activities at HKD 0.63 million and net cash used in financing activities at HKD 27.32 million, resulting in a net decrease in cash and cash equivalents of HKD 6 million | Item (HKD Thousand) | FY2024 | FY2023 | | :--- | :--- | :--- | | Net Cash Generated from Operating Activities | 21,954 | 44,615 | | Net Cash Used in Investing Activities | (632) | (17,929) | | Net Cash Used in Financing Activities | (27,318) | (29,366) | | Net Decrease in Cash and Cash Equivalents | (5,996) | (2,680) | | Cash and Cash Equivalents at Beginning of Year | 30,434 | 34,162 | | Cash and Cash Equivalents at End of Year | 23,658 | 30,434 | Notes to the Consolidated Financial Statements The notes provide detailed explanations of accounting policies and the composition of various financial statement items, including revenue segmentation, property, plant and equipment movements, bank borrowings, and related party transactions Note 5: Revenue and Segment Information Total revenue for the current fiscal year was HKD 341 million, a 17% year-on-year decrease, with the electronic and electrical components trading business remaining the largest segment at HKD 223 million despite an 18.3% decline, and all major geographical markets experiencing revenue reductions Revenue by Business Segment (HKD Thousand) | Business Segment | FY2024 | FY2023 | | :--- | :--- | :--- | | Electronic and Electrical Components Trading | 223,141 | 272,644 | | Computer Products, Mobile Accessories and Services | 67,835 | 80,129 | | Cosmetics | 49,603 | 57,648 | | Total | 340,579 | 410,421 | Revenue by Geographical Region (HKD Thousand) | Region | FY2024 | FY2023 | | :--- | :--- | :--- | | Hong Kong | 153,179 | 187,121 | | Asia Pacific | 59,697 | 81,436 | | South Africa | 119,448 | 132,145 | | Europe | 7,880 | 8,950 | | Other Countries | 375 | 769 | | Total | 340,579 | 410,421 | Financial Summary Five-year financial data shows the Group's revenue declining for two consecutive years after peaking at HKD 501 million in 2022, with profit attributable to equity holders turning into a loss, yet net assets have steadily grown from HKD 141 million in 2020 to HKD 167 million in 2024, indicating resilience Five-Year Performance Summary (HKD Thousand) | Fiscal Year | 2024 | 2023 | 2022 | 2021 | 2020 | | :--- | :--- | :--- | :--- | :--- | :--- | | Revenue | 340,579 | 410,421 | 501,269 | 456,369 | 461,245 | | Profit Before Income Tax | 6,394 | 9,230 | 27,436 | 20,539 | 1,565 | | (Loss)/Profit Attributable to Equity Holders of the Company | (4,891) | (378) | 13,211 | 12,151 | (5,729) | Five-Year Assets and Liabilities Summary (HKD Thousand) | Fiscal Year | 2024 | 2023 | 2022 | 2021 | 2020 | | :--- | :--- | :--- | :--- | :--- | :--- | | Total Assets | 273,883 | 320,093 | 355,925 | 334,479 | 306,355 | | Total Liabilities | 107,235 | 147,419 | 167,756 | 161,604 | 164,871 | | Net Assets | 166,648 | 172,674 | 188,169 | 172,875 | 141,484 |