量子思维(08050) - 2024 - 年度财报

Corporate Information The report lists core corporate information including executive and independent non-executive directors, committee members, company secretary, compliance officer, authorized representatives, auditor, and principal place of business - The report details core corporate information including executive and independent non-executive directors, members of the Audit, Remuneration, and Nomination Committees, company secretary, compliance officer, authorized representatives, auditor, and principal place of business[8][9][10] Executive Director's Statement Facing a complex environment in China's information system solutions industry, the Group adopted a prudent business development strategy, successfully shifting its focus from system development to operations, with enterprise SMS services contributing approximately 70% of total revenue while actively expanding front-end and deepening back-end IT businesses - To navigate the challenging operating environment, the Group shifted its business focus from information technology system development to operations, aiming for market expansion with lower capital expenditure and staff costs[15] - The enterprise SMS service business achieved significant results, with its revenue accounting for approximately 70% of the Group's total revenue during the reporting period[16][19] - The Group actively expanded its front-end business, commencing distribution of the first batch of children's smartwatches in Beijing in mid-May 2024, with marketing activities planned for schools in the second half of the year[18][20][24] - For back-end operations, the Group continues to provide information verification, Artificial Intelligence (AI), and Robotic Process Automation (RPA) services to clients in industries such as securities, finance, and transportation infrastructure[22] - Looking ahead, the Group plans to increase investment in its SMS service business and consider expanding into other value-added services such as marketing-oriented voice SMS[24][26] Management Discussion and Analysis Industry Overview During the reporting period, China's information system solutions industry faced a complex and severe operating environment due to economic difficulties and US technology sanctions, yet the thriving e-commerce and logistics sectors drove demand for enterprise SMS services, while digital technology integration with the real economy created significant opportunities for AI services - Due to a sluggish Chinese economy and US technology sanctions, domestic internet and tech giants scaled back operations, impacting demand for information technology services[29][30] - The booming e-commerce and logistics sectors drove increased demand for enterprise SMS services; according to the National Bureau of Statistics, China's mobile SMS traffic grew from approximately 1.507 trillion messages in 2019 to about 1.869 trillion messages in 2023[33][37] - IDC forecasts China's AI market size to reach USD 14.75 billion in 2023, projected to grow to USD 26.44 billion by 2026, with a compound annual growth rate exceeding 20% from 2021 to 2026[39][41] Business Review To counter market volatility, the Group shifted its business focus from system development to operations, with enterprise SMS services becoming the primary revenue source, contributing approximately 70% of total revenue, while also advancing front-end (children's smartwatches) and back-end (information verification, AI, RPA) businesses, alongside other ventures like electronic component supply and marketing website design - The Group's business focus has shifted from information technology system development to operations, with SMS services accounting for approximately 70% of total revenue during the reporting period[44][49] - Regarding front-end business, the Group commenced distribution of the first batch of children's smartwatches in Beijing in mid-May 2024, which feature the Group's proprietary software system and bundled telecommunication services[48][50] - For back-end operations, the Group, through its subsidiary Cyber Security, continues to provide information verification services to securities brokers and digital certificate authorities, and is developing a unified digital authentication system for the IT subsidiary of a transportation infrastructure company[52][54][57] - The Group, through its subsidiary Shenzhen YBDS, provides Robotic Process Automation (RPA) training and consulting, assisting telecommunication companies in implementing AI customer service[61] Prospects Despite an uncertain industry outlook, the Group will continue its business transformation and diversification, planning increased investment in SMS services and exploring new value-added services like voice SMS in H2 2024, while launching campus marketing for new children's smartwatches, aiming to mitigate macroeconomic impacts and drive long-term growth through a dual-track strategy - The Group is considering increasing investment in its SMS service business in the second half of 2024 to expand operations and revenue, and plans to explore other value-added services such as voice SMS[80][84] - The Group commenced distribution of children's smartwatches in May 2024 and plans to conduct marketing activities in schools during the second half of 2024[81][84] - The Group will continue to operate back-end businesses such as internet electronic identity authentication and AI services to capitalize on opportunities in the digital economy[82] Liquidity, Financial Resources and Capital Structure The report reviews the utilization of proceeds from the 2013 subscription, with approximately HKD 2.794 million remaining unutilized as of March 31, 2024, expected to be used for general working capital by end of March 2025, and notes the re-allocation of funds from new potential projects to general working capital during the period Net Proceeds from Subscription Utilization (As of March 31, 2024) | Purpose | Amount Utilized for the Year Ended March 31, 2024 (HKD Thousand) | Unutilized Net Proceeds as of March 31, 2024 (HKD Thousand) | Expected Timeline for Utilization of Unutilized Net Proceeds | | :--- | :--- | :--- | :--- | | New Potential Projects | – | – | – | | General Working Capital | (8,909) | 2,794 | By end of March 2025 | | Total | (8,909) | 2,794 | | - To optimize financial resource utilization, the company reallocated approximately HKD 3.428 million of unutilized net proceeds, originally designated for new potential projects, to general working capital[95][96] Financial Review During the reporting period, the Group returned to profitability, with profit attributable to owners of the company at approximately HKD 6.604 million compared to a loss of HKD 10.108 million last year, despite a 12% year-on-year decrease in total revenue to HKD 16.152 million, driven by new SMS services contributing HKD 11.247 million in revenue, while maintaining shareholders' funds of approximately HKD 11.924 million and a current ratio of 0.85:1 Financial Performance Summary | Metric | FY2024 (Reporting Period) | FY2023 (Prior Period) | Year-on-Year Change | | :--- | :--- | :--- | :--- | | Revenue | HKD 16.152 million | HKD 18.290 million | -12% | | Profit/(Loss) Attributable to Owners of the Company | HKD 6.604 million | (HKD 10.108 million) | Turnaround to Profit | - Business segment revenue changes: hardware sales revenue decreased by approximately 68% year-on-year, service revenue decreased by approximately 74% year-on-year, but the Group recorded SMS service segment revenue of approximately HKD 11.247 million for the first time[100][105] Key Financial Resources Indicators (As of March 31, 2024) | Metric | Amount/Ratio | | :--- | :--- | | Shareholders' Funds | HKD 11.924 million | | Current Assets | HKD 14.752 million | | Current Liabilities | HKD 16.663 million | | Current Ratio | 0.85 : 1 | | Gearing Ratio | Zero | - As of March 31, 2024, the Group had 24 employees, with total remuneration expenses of approximately HKD 5.883 million during the reporting period, a decrease from HKD 7.175 million in the previous period[111][117] - The Group invested idle funds in low-risk wealth management products to enhance capital efficiency, with most products redeemed during the reporting period[113][114][122] Corporate Governance Report The company is committed to high standards of corporate governance, largely complying with the Corporate Governance Code during the reporting period, with deviations only in directors' legal action insurance (C.1.8) and the separation of Chairman and CEO roles (C.2.1), while detailing board composition, committee functions, risk management, internal controls, shareholder rights, and investor relations to maintain a transparent, accountable, and effective governance structure Corporate Governance Practices During the reporting period, the company largely complied with the Corporate Governance Code, with two deviations: no appropriate insurance for directors' legal actions (C.1.8), and the roles of Chairman and CEO not separated (C.2.1), as the executive director team collectively focuses on business strategy, pending a suitable appointment - The company complied with the code provisions of the Corporate Governance Code during the reporting period, with certain deviations[131] - Deviation from Code Provision C.1.8: The company believes the likelihood of actual litigation against directors is extremely low, thus no directors' liability insurance has been arranged, but relevant insurance proposals will be considered for review[132][133] - Deviation from Code Provision C.2.1: The roles of Chairman and Chief Executive Officer are not separated; the executive director team collectively evaluates new businesses and formulates strategies, thus no new Chairman and CEO have been appointed for the time being[134][135] Board of Directors The Board of Directors is responsible for formulating the Group's overall strategy and approving significant matters, delegating daily operations to executive directors and management, holding four meetings during the reporting period, with all directors subject to retirement by rotation at least every three years, and all independent non-executive directors confirmed to meet independence requirements Board and General Meeting Attendance Record | Director Name | Board Meetings Attended/Held | General Meetings Attended/Held | | :--- | :--- | :--- | | Mr. Wang Xiaoqi | 4/4 | 1/1 | | Mr. He Yang | 1/4 | 1/1 | | Ms. He Zheng | 4/4 | 1/1 | | Mr. Xie Yuxuan | 3/4 | 1/1 | | Mr. Liu Chuqi | 3/4 | 1/1 | | Mr. Huang Jianji | 3/4 | 1/1 | - The Board is responsible for formulating the Group's overall strategy, approving financial statements and significant transactions, and delegates daily operational and administrative functions to executive directors and management[146] - All directors, including those with specific terms, are subject to retirement by rotation at least once every three years, and re-election of independent non-executive directors serving more than nine years requires approval by shareholders through a separate resolution[157][158] Board Committees The company established three Board Committees—Audit, Remuneration, and Nomination—all composed of independent non-executive directors and chaired by Mr. Xie Yuxuan, responsible for overseeing financial reporting, risk management, internal controls, reviewing director and executive remuneration, and managing director nominations and board diversity policy implementation Audit Committee The Audit Committee, comprising three independent non-executive directors and chaired by Mr. Xie Yuxuan, is primarily responsible for reviewing the Group's audit results, accounting policies, internal controls, and risk management systems, holding three meetings during the reporting period to review financial reports and confirm compliance and adequate disclosure - The Audit Committee, composed of three independent non-executive directors, is responsible for reviewing financial reports, accounting policies, internal controls, and risk management matters[179][184] Audit Committee Meeting Attendance Record | Member Name | Attendance/Meetings Held | | :--- | :--- | | Mr. Xie Yuxuan | 3/3 | | Mr. Liu Chuqi | 3/3 | | Mr. Huang Jianji | 3/3 | Remuneration Committee The Remuneration Committee, comprising three independent non-executive directors and chaired by Mr. Xie Yuxuan, is primarily responsible for advising the Board on director and senior management remuneration, holding one meeting during the reporting period to review executive directors' service contracts, remuneration, and performance - The Remuneration Committee, composed of three independent non-executive directors, is responsible for recommending remuneration packages for directors and senior management to the Board[188][189] Remuneration Committee Meeting Attendance Record | Member Name | Attendance/Meetings Held | | :--- | :--- | | Mr. Xie Yuxuan | 1/1 | | Mr. Liu Chuqi | 1/1 | | Mr. Huang Jianji | 1/1 | Nomination Committee The Nomination Committee, comprising three independent non-executive directors and chaired by Mr. Xie Yuxuan, is primarily responsible for identifying director candidates, recommending appointments or re-appointments to the Board, and overseeing the implementation of the board diversity policy, holding one meeting during the reporting period with no new director appointments - The Nomination Committee is responsible for identifying director candidates, proposing appointments, and overseeing the implementation of the board diversity policy[197][194] - The company has adopted a board diversity policy, considering board composition from various aspects including gender, age, cultural and educational background, and professional experience[199][200] Nomination Committee Meeting Attendance Record | Member Name | Attendance/Meetings Held | | :--- | :--- | | Mr. Xie Yuxuan | 1/1 | | Mr. Liu Chuqi | 1/1 | | Mr. Huang Jianji | 1/1 | Risk Management and Internal Control The Board holds overall responsibility for the Group's risk management and internal control systems, delegating daily oversight to executive directors and management, and has established risk management policies and reporting mechanisms using a bottom-up approach for risk identification and assessment; during the reporting period, the Board engaged independent consultant PAL Advisory to perform internal audit functions, reviewing the effectiveness of financial reporting procedures, systems, and controls, with both the Board and Audit Committee deeming the systems effective and adequately resourced - The Board holds overall responsibility for the risk management and internal control systems, reviewing their effectiveness at least annually[236][238] - The Group has established risk management policies and reporting mechanisms, covering the entire process of risk identification, assessment, response, and monitoring reports[149][242] - The Group engaged independent consultant PAL Advisory to perform internal audit functions, reviewing internal controls related to financial reporting and other areas[245] - The Audit Committee and the Board believe that the Group's risk management and internal control systems operated effectively and were adequately resourced during the reporting period[248][249] Shareholder's Rights & Investor Relations The company clarifies shareholder rights, including the ability for shareholders holding at least 10% of paid-up capital to requisition an extraordinary general meeting, emphasizing effective communication through various channels like general meetings, annual reports, announcements, and the company website, and strictly adhering to its adopted shareholder communication policy during the reporting period - Shareholders holding not less than one-tenth of the company's paid-up capital have the right to requisition an extraordinary general meeting of shareholders in writing to the Board[254][259] - The company has adopted a shareholder communication policy and maintains effective communication with shareholders through various channels, including general meetings, financial reports, announcements, and the company website[263] Environmental, Social and Governance Report This ESG report outlines the Group's practices and commitments in environmental protection, social responsibility, and corporate governance, detailing the establishment of an ESG working group, identification of key ESG issues through stakeholder engagement and materiality assessment, setting targets for greenhouse gas emissions, waste management, and energy consumption, and implementing measures to reduce environmental impact, while also covering employment, health and safety, training, supply chain management, product responsibility, anti-corruption, and community investment, demonstrating the Group's efforts as a responsible enterprise Governance, Stakeholder Engagement and Materiality Assessment The Group established an ESG working group to assist the Board in overseeing ESG matters, communicating with key stakeholders like shareholders, employees, and customers through various channels including general meetings, financial reports, and customer service hotlines, and identified critical ESG issues such as greenhouse gas emissions, employee welfare, customer privacy protection, and anti-corruption through annual materiality assessments - The Group established an ESG working group, comprising senior management and departmental staff, responsible for implementing ESG initiatives, collecting data, and making recommendations to the Board[298] - The Group communicates with stakeholders including shareholders, government, employees, customers, suppliers, and the public through various channels to understand their expectations and feedback[305][306] - Through annual materiality assessments, the Group identified 15 key ESG issues, with occupational health and safety, anti-corruption, customer privacy protection, and employee welfare deemed most significant[308][311] A. Environmental The Group is committed to environmental protection, setting quantitative targets for greenhouse gas emissions, waste management, and energy consumption, achieving significant reductions in total greenhouse gas emissions and energy consumption during the reporting period due to office relocation and vehicle decommissioning, while implementing energy-saving measures, paperless operations, and 3R principles to reduce resource consumption, and has developed a climate change policy to address physical risks like typhoons and transitional risks like tightening regulations Environmental Targets and Progress | Category | Target (Baseline: 2023) | Progress | | :--- | :--- | :--- | | Greenhouse Gas Emissions | Maintain or reduce total greenhouse gas emission intensity (Baseline: 65.09 kg CO2e/m²) | Ongoing | | Waste Management | Maintain or reduce non-hazardous waste intensity (Baseline: 0.17 kg/m²) | Ongoing | | Energy Consumption | Maintain or reduce total energy consumption intensity (Baseline: 86.66 kWh/m²) | Ongoing | Greenhouse Gas Emissions Performance | Metric (kg CO2e) | 2024 | 2023 | | :--- | :--- | :--- | | Total Emissions | 18,165.71 | 24,929.62 | | Emission Intensity (kg CO2e/m²) | 47.43 | 65.09 | Energy Consumption Performance | Metric (kWh) | 2024 | 2023 | | :--- | :--- | :--- | | Total Energy Consumption | 22,819.21 | 33,190.92 | | Total Energy Consumption Intensity (kWh/m²) | 59.58 | 86.66 | - The Group has formulated a climate change policy to identify and address physical risks such as extreme weather and transitional risks like tightening regulations[357][361][363] B. Social Regarding social responsibility, the Group established comprehensive policies for employment, health and safety, training, supply chain management, product responsibility, and anti-corruption, committing to equal opportunities and a safe work environment with no lost workdays due to injury during the reporting period, strictly adhering to labor standards prohibiting child and forced labor, assessing environmental and social risks in supplier management, prioritizing product quality with after-sales service and customer data protection mechanisms, reporting no product recalls or complaints, and maintaining business ethics through a whistleblowing mechanism Employment and Labour Practices The Group established a comprehensive human resource management system ensuring fairness in recruitment, promotion, remuneration, and dismissal, providing statutory holidays and benefits, committing to equal opportunities, diversity, and anti-discrimination, strictly prohibiting child and forced labor, and as of March 31, 2024, had 21 employees with an annual employee turnover rate of 13% - As of March 31, 2024, the Group had 21 employees (excluding independent non-executive directors), with 57% male and 43% female, and geographically, 71% of employees were in mainland China and 29% in Hong Kong[376][377] - During the reporting period, the Group's employee turnover rate was 13%[380] - The Group strictly prohibits child and forced labor, verifying identity documents during recruitment to prevent violations[395][398] Health, Safety, Development and Training The Group highly prioritizes employee health and safety, committed to providing a safe and comfortable work environment, with no lost workdays due to injury or work-related fatalities during the reporting period, and offers customized IT examination systems and training courses for employee development, totaling 85 hours of training during the period - During the reporting period, the Group recorded zero lost workdays due to work-related injuries and no work-related fatalities in the past three years[384] Employee Training Hours Summary (FY2024) | Employee Category | Percentage of Employees Trained | Average Training Hours (Hours) | | :--- | :--- | :--- | | Executive Directors | 75% | 6.75 | | Management | 100% | 12.00 | | General Staff | 8% | 0.77 | Operating Practices Regarding operating practices, the Group maintains strict management over its supply chain, product responsibility, and anti-corruption efforts, requiring suppliers to adhere to its code of conduct and considering environmental and social risks during selection, prioritizing product quality with after-sales service and customer data protection mechanisms, reporting no product recalls or related complaints during the period, and committing to prohibiting all forms of corruption through a whistleblowing mechanism - The Group considers suppliers' environmental (e.g., ISO14001 certification) and social (e.g., OHSAS18001 certification) performance during selection; during the reporting period, all 4 major suppliers were located in China[401][406] - The Group emphasizes product quality, maintains a tracking system, and provides after-sales service; during the reporting period, there were no product recalls or complaints regarding product quality or services[413][414][417] - The Group is committed to protecting customer data and intellectual property, signing confidentiality agreements with partners[418][419] - The Group strictly prohibits corrupt practices such as bribery, extortion, fraud, and money laundering, and has established an employee whistleblowing mechanism; during the reporting period, there were no concluded corruption litigation cases[426][428][436] Biographical Information of Directors and Senior Management This section provides detailed biographical information for the company's executive and independent non-executive directors, including their age, position, tenure, professional experience, academic background, shareholding, and appointments in other listed companies or organizations - Mr. Wang Xiaoqi, Executive Director, 45 years old, possesses over 15 years of experience in China's telecommunications industry, holding a Bachelor's degree in Computer Control and Application[459] - Mr. He Yang, Executive Director, 69 years old, previously served as a senior executive at a major high-tech software company in China and an executive director at a renowned real estate company, and was an independent non-executive director of China Gas Holdings Limited (Stock Code: 384)[462] - Ms. He Zheng, Executive Director, 31 years old, holds a Bachelor of Business Administration degree and is a licensed representative for Type 1 (dealing in securities) regulated activities[463] - Mr. Xie Yuxuan, Independent Non-Executive Director, 54 years old, possesses over 20 years of experience in corporate finance and accounting, is a member of the Hong Kong Institute of Certified Public Accountants, and holds licenses for Type 1 and Type 6 regulated activities[467] Report of the Directors This report outlines statutory disclosures including the company's principal business activities, financial performance, dividend policy, share capital structure, and directors' and major shareholders' interests during the reporting period, noting no significant change in business nature, focusing on high-tech software and hardware trading, mobile payment platform development, and enterprise SMS services, with the company achieving profitability but not recommending a final dividend, while confirming sufficient public float and compliance with relevant laws and regulations Principal Activities and Financials The company primarily engages in investment holding, with subsidiary businesses including high-tech software and hardware trading, mobile payment services, and enterprise SMS services, experiencing no significant change in business nature during the reporting period, recording a profit but not recommending a final dividend, and holding distributable reserves of approximately HKD 101.852 million as of March 31, 2024 - The Group's principal activities include high-tech software and hardware trading, mobile payment platform development, mobile application service procurement, and enterprise SMS services[477][483] - The Directors do not recommend the payment of a final dividend for the reporting period[480][486] - As of March 31, 2024, the company's distributable reserves (including share premium) amounted to approximately HKD 101,852,000[491][499] Directors and Shareholders' Interests The report lists directors and their service contracts for the period, with Happy On Holdings Limited and its ultimate beneficial owner, Mr. Chan Fu Wing, as major shareholders holding approximately 72.83% of the company's shares, while executive directors Mr. Wang Xiaoqi and Mr. He Yang hold minor stakes, and the largest customer and supplier accounted for 68% of total sales and 66% of total purchases, respectively Major Shareholders' Shareholding (As of March 31, 2024) | Shareholder Name | Capacity | Number of Issued Ordinary Shares Held | Approximate Percentage of Issued Share Capital | | :--- | :--- | :--- | :--- | | Happy On Holdings Limited | Beneficial Owner | 987,888,771 (L) | 72.83% | | Mr. Chan Fu Wing | Interest of Controlled Corporation | 987,888,771 (L) | 72.83% | - Executive Director Mr. Wang Xiaoqi holds 382,000 shares (approximately 0.028%), and Mr. He Yang holds 18,083,500 shares (approximately 1.333%)[530][532] - During the reporting period, the largest customer accounted for approximately 68% of total sales, and the top five customers accounted for 100%; the largest supplier accounted for approximately 66% of total purchases, and the top five suppliers accounted for 100%[538][544] Summary Financial Information This summary provides key financial data for the Group's past five fiscal years (2020-2024), including revenue, profit/loss before tax, profit/loss attributable to owners of the company, total assets, and total liabilities, indicating a return to profitability in FY2024 Summary of Results for the Past Five Financial Years (HKD Thousand) | Financial Year | 2024 | 2023 | 2022 | 2021 | 2020 | | :--- | :--- | :--- | :--- | :--- | :--- | | Revenue | 16,152 | 18,290 | 32,800 | 41,242 | 26,556 | | Profit/(Loss) Before Tax | 5,898 | (16,840) | (21,920) | 6,345 | (33,225) | | Profit/(Loss) Attributable to Owners of the Company | 6,604 | (10,108) | (18,189) | 16,703 | (26,710) | Summary of Assets and Liabilities for the Past Five Financial Years (HKD Thousand) | Financial Year | 2024 | 2023 | 2022 | 2021 | 2020 | | :--- | :--- | :--- | :--- | :--- | :--- | | Total Assets | 15,721 | 34,633 | 58,207 | 62,017 | 89,277 | | Total Liabilities | (17,402) | (48,006) | (54,956) | (37,125) | (98,718) | | Equity Attributable to Owners of the Company | 11,924 | 246 | 10,707 | 28,413 | 11,892 | Independent Auditor's Report Auditor UHY CPA Limited issued an unmodified opinion on the company's consolidated financial statements as of March 31, 2024, deeming them to fairly present the Group's financial position and performance, while drawing attention to significant uncertainties related to going concern due to the Group's net liability position at period-end, with key audit matters including loss allowances for trade and other receivables and contract assets, which were subject to sufficient audit procedures - Audit Opinion: The auditor believes the consolidated financial statements fairly present the Group's financial position and are properly prepared in compliance with the disclosure requirements of the Hong Kong Companies Ordinance (unmodified opinion)[573][575] - Material Uncertainty Related to Going Concern: The report draws attention to the Group's net liabilities of approximately HKD 1.681 million as of the reporting period end, a condition that may cast significant doubt on the Group's ability to continue as a going concern; however, the auditor's opinion is not modified in respect of this matter[578][580] - Key Audit Matter: Loss allowance for trade and other receivables and contract assets, identified as a key audit matter due to its material amount and significant management judgment and estimation involved; the auditor evaluated and challenged management's Expected Credit Loss (ECL) model, assumptions, and data used[585][588][589] Financial Statements Consolidated Statement of Profit or Loss and Other Comprehensive Income For the year ended March 31, 2024, the Group's revenue was HKD 16.152 million, a 12% year-on-year decrease, yet it achieved a profit before tax of HKD 5.898 million, reversing a HKD 16.840 million loss from the prior year, primarily due to a HKD 19.286 million gain from the disposal of a subsidiary, resulting in a profit attributable to owners of the company of HKD 6.604 million and basic earnings per share of HKD 0.49 cents Consolidated Statement of Profit or Loss Summary (For the Year Ended March 31) | Item (HKD Thousand) | 2024 | 2023 | | :--- | :--- | :--- | | Revenue | 16,152 | 18,290 | | Gross Profit | 761 | 1,820 | | Gain on Disposal of a Subsidiary | 19,286 | – | | Profit/(Loss) Before Tax | 5,898 | (16,840) | | Profit/(Loss) for the Year | 5,898 | (16,840) | | Profit/(Loss) Attributable to Owners of the Company | 6,604 | (10,108) | | Basic and Diluted Earnings/(Loss) Per Share (HK Cents) | 0.49 | (0.75) | Consolidated Statement of Financial Position As of March 31, 2024, the Group's total assets were HKD 15.721 million and total liabilities were HKD 17.402 million, resulting in net liabilities of HKD 1.681 million, an improvement from HKD 13.373 million net liabilities in the prior year, with current assets primarily comprising HKD 11.770 million in trade and other receivables, and current liabilities mainly HKD 16.663 million in trade and other payables, while equity attributable to owners of the company stood at HKD 11.924 million Consolidated Statement of Financial Position Summary (As of March 31) | Item (HKD Thousand) | 2024 | 2023 | | :--- | :--- | :--- | | Total Non-Current Assets | 969 | 1,977 | | Total Current Assets | 14,752 | 32,656 | | Total Assets | 15,721 | 34,633 | | Total Current Liabilities | 17,402 | 47,195 | | Non-Current Liabilities | – | 811 | | Total Liabilities | 17,402 | 48,006 | | Net Liabilities | (1,681) | (13,373) | | Equity Attributable to Owners of the Company | 11,924 | 246 | | Non-Controlling Interests | (13,605) | (13,619) | Consolidated Statement of Changes in Equity For the year ended March 31, 2024, equity attributable to owners of the company increased from HKD 0.246 million at the beginning of the year to HKD 11.924 million at year-end, primarily driven by a HKD 6.604 million profit for the year, HKD 0.462 million gain from exchange differences, and HKD 4.612 million reclassification of reserves from the disposal of a subsidiary Summary of Changes in Equity Attributable to Owners of the Company (HKD Thousand) | Item | Amount (HKD Thousand) | | :--- | :--- | | As of April 1, 2023 | 246 | | Profit for the Year | 6,604 | | Other Comprehensive Income (Exchange Differences) | 462 | | Disposal of a Subsidiary (Reserve Impact) | 4,612 | | As of March 31, 2024 | 11,924 | Consolidated Statement of Cash Flows For the year ended March 31, 2024, the Group's cash and cash equivalents decreased by HKD 1.111 million, with net cash outflow from operating activities of HKD 8.156 million primarily due to working capital changes, net cash inflow from investing activities of HKD 7.886 million mainly from disposal of financial assets, and net cash outflow from financing activities of HKD 0.841 million mainly for lease liability repayment, resulting in a year-end cash and cash equivalents balance of HKD 2.742 million Consolidated Statement of Cash Flows Summary (For the Year Ended March 31) | Item (HKD Thousand) | 2024 | 2023 | | :--- | :--- | :--- | | Net Cash Used in Operating Activities | (8,156) | (16,935) | | Net Cash From Investing Activities | 7,886 | 13,831 | | Net Cash Used in Financing Activities | (841) | (1,115) | | Net Decrease in Cash and Cash Equivalents | (1,111) | (4,219) | | Cash and Cash Equivalents at Beginning of Year | 3,493 | 7,978 | | Cash and Cash Equivalents at End of Year | 2,742 | 3,493 | Notes to the Consolidated Financial Statements The notes to the financial statements provide detailed explanations of the company's financial position and performance, including the adoption of the going concern basis despite net liabilities, revenue sources from system development, hardware sales, and new SMS services, expected credit loss provisions for trade and other receivables, disclosures on financial instrument classification, risk management, and fair value measurement, details of the September 2023 disposal of Guangzhou YBDS subsidiary, and financial information for subsidiaries with significant non-controlling interests Note 3: Material Accounting Policies Information This note outlines the Group's principal accounting policies, including the assessment of going concern, where despite net liabilities at period-end, directors deem the going concern basis appropriate given cost control measures, new business initiatives (children's smartwatches), and major shareholder financial support commitments, alongside other policies covering business combinations, revenue recognition, leases, and financial instrument classification and impairment (using the Expected Credit Loss model) - Despite the Group recording net liabilities of approximately HKD 1.681 million as of March 31, 2024, the directors believe the Group can continue as a going concern, based on cost control, new business expansion, and major shareholder commitments for financial support[649][653][655] - Revenue recognition follows a five-step model: for system development and consulting services, revenue is recognized over time; for hardware product sales and SMS services, revenue is recognized at the point control is transferred[681][695][707] - The Group applies the simplified approach to trade receivables and contract assets, recognizing Lifetime Expected Credit Losses (ECL)[809] Note 7: Revenue and Segment Information This year, the Group's total revenue was HKD 16.152 million, primarily from three segments: Services (HKD 3.976 million), Hardware Sales (HKD 0.929 million), and the new SMS Service Charges (HKD 11.247 million), with SMS services becoming the largest revenue source, and significant customer concentration as Company B contributed approximately 68% and Company A approximately 25% of total revenue Revenue by Segment (For the Year Ended March 31, 2024) | Segment | Revenue (HKD Thousand) | | :--- | :--- | | Services | 3,976 | | Hardware Sales | 929 | | SMS Service Charges | 11,247 | | Total | 16,152 | - During the reporting period, the Services segment recorded a loss of HKD 4.460 million, the Hardware Sales segment a loss of HKD 1.096 million, while the SMS Services segment achieved a profit of HKD 0.353 million[972] - There is significant customer concentration risk, with Company B contributing HKD 11.047 million in revenue and Company A contributing HKD 3.976 million, together accounting for over 90% of total revenue[991] Note 20: Trade and Other Receivables As of March 31, 2024, the gross carrying amount of trade receivables was HKD 8.498 million, with a net amount of HKD 7.286 million after a loss allowance of HKD 1.212 million, and other receivables net amount was HKD 3.143 million; the Group applies a provision matrix for Lifetime Expected Credit Losses on trade receivables, with an expected loss rate of 15% for amounts overdue over 60 days Trade Receivables Aging Analysis (Net, HKD Thousand) | Aging | 2024 | 2023 | | :--- | :--- | :--- | | Within 90 days | 162 | 8,457 | | 91 to 180 days | 107 | 9 | | 181 to 365 days | 4,418 | 6,344 | | Over 365 days | 2,599 | 111 | | Total | 7,286 | 14,921 | - The Group recognized an impairment loss of HKD 0.857 million for trade receivables based on the Expected Credit Loss model (2023: HKD 0.029 million)[1059][1072] - Other receivables include amounts due from former subsidiaries of approximately HKD 1.099 million[1073] Note 26: Disposal of a Subsidiary On September 19, 2023, the Group disposed of its entire equity interest in indirectly-owned subsidiary Guangzhou YBDS Information Technology Co., Ltd. for a cash consideration of RMB 1, generating a HKD 19.286 million gain primarily due to the disposed subsidiary's net liability position, and resulting in a net cash outflow of HKD 3 thousand from the transaction - The Group disposed of its subsidiary Guangzhou YBDS on September 19, 2023, for a nominal consideration of RMB 1[1107][1108] Gain on Disposal of a Subsidiary Calculation (HKD Thousand) | Item | Amount (HKD Thousand) | | :--- | :--- | | Consideration Receivable | 0* | | Net Liabilities Disposed | 23,898 | | Reclassification of Cumulative Translation Reserve | (4,612) | | Gain on Disposal | 19,286 | - As of March 31, 2023, the disposed subsidiary Guangzhou YBDS had its assets classified as held for sale, with related liabilities primarily consisting of amounts payable to independent third party Beijing Huaqin of approximately HKD 25.603 million[1113][1116]