Financial Summary Financial Summary In FY2024, the Group's revenue slightly increased to 62.6 Million HKD, with gross profit surging to 24.8 Million HKD and loss attributable to owners significantly narrowing to 17.8 Million HKD Summary of Annual Performance | Metric | FY2024 | FY2023 | YoY Change | | :--- | :--- | :--- | :--- | | Revenue (Thousand HKD) | 62,581 | 60,538 | +3.5% | | Gross Profit (Thousand HKD) | 24,757 | 8,948 | +178.7% | | Gross Margin | 39.6% | 14.8% | +24.8 percentage points | | Loss for the Year (Thousand HKD) | (17,768) | (43,679) | -59.3% | | Loss Attributable to Owners of the Company (Thousand HKD) | (17,840) | (41,000) | -56.5% | | Basic Loss Per Share (HKD) | (0.06) | (0.16) | -62.5% | Summary of Liquidity and Gearing Ratios | Metric | FY2024 | FY2023 | | :--- | :--- | :--- | | Inventory Turnover Days | 459 | 370 | | Trade Receivables Turnover Days | 140 | 130 | | Current Ratio | 1.3 | 0.7 | | Gearing Ratio | 12.4% | 96.4% | - Net cash used in operating activities expanded from 2.7 Million HKD to 17.5 Million HKD, indicating increased pressure on operating cash flow6 CEO's Report CEO's Report CEO Mr. Han Weining noted FY2024 was challenging, yet revenue slightly increased, primarily from building intelligence and control systems, with both segments turning profitable and significant loss reduction - FY2024 revenue was 62.6 Million HKD, a 3.5% year-on-year increase, primarily from building intelligence (38.8%) and control systems (60.8%) businesses10 - Loss attributable to owners of the Company significantly decreased from 41.0 Million HKD to 17.8 Million HKD, due to a 15.9 Million HKD increase in gross profit and a 3.0 Million HKD increase in net other income10 - The Company successfully completed two share placements in May 2023 and March 2024, raising approximately 38.5 Million HKD net proceeds for working capital and future investments11 Management Discussion and Analysis Business Review The Group operates three main businesses: control systems, building intelligence, and data centers, with control systems and building intelligence turning profitable in FY2024, while data center revenue declined and losses expanded due to asset impairment Control Systems Business The control systems segment provides automation solutions for various industries, with external revenue increasing to 38.0 Million HKD and achieving a segment profit of 0.5 Million HKD in FY2024, reversing the previous year's loss Control Systems Business Financial Performance | Metric | FY2024 | FY2023 | | :--- | :--- | :--- | | External Revenue (Million HKD) | 38.0 | 34.0 | | Segment Profit / (Loss) (Million HKD) | 0.5 | (2.4) | Building Intelligence Business The building intelligence business, offering "MOX" brand visual intercom and smart home systems, maintained stable external revenue at 24.3 Million HKD in FY2024 and turned profitable with a 3.6 Million HKD gain due to higher-margin product sales Building Intelligence Business Financial Performance | Metric | FY2024 | FY2023 | | :--- | :--- | :--- | | External Revenue (Million HKD) | 24.3 | 25.8 | | Segment Profit / (Loss) (Million HKD) | 3.6 | (13.7) | Data Center Business The data center business, launched in 2022, saw its total revenue decline to 0.2 Million HKD in FY2024, with segment loss expanding to 11.7 Million HKD primarily due to a 4.7 Million HKD impairment of property, plant, and equipment Data Center Business Financial Performance | Metric | FY2024 | FY2023 | | :--- | :--- | :--- | | Total Revenue (Million HKD) | 0.2 | 0.8 | | Segment Loss (Million HKD) | (11.7) | (3.5) | Investment in an Associate Engaged in Charging Station Leasing Business The Group sold a 5% interest in associate Iogo Workshop Investment Limited for RMB 15 Million, recognizing a 1.5 Million HKD gain, and reclassified the remaining 15% interest as a financial asset at fair value of 33.9 Million HKD, while recognizing a 2.6 Million HKD share of loss from the associate - Sold a 5% interest in associate Iogo Workshop for RMB 15 Million, recognizing a 1.5 Million HKD gain22 - The remaining 15% interest was reclassified as a financial asset at fair value through profit or loss, with a fair value of 33.9 Million HKD22 Business Outlook and Future Plans Facing macroeconomic challenges, the Group will maintain prudent cost control, leverage growth in China's 5G, IoT, and smart home markets for building intelligence, actively seek diversification opportunities, and continuously evaluate fundraising options for future investments - Market challenges include weak economic recovery in China due to inflation, high interest rates, and US-China tensions24 - Future strategy involves prudent cost control and seeking business opportunities to diversify revenue streams, particularly focusing on opportunities from 5G technology24 - The Company will continue to explore new business and investment opportunities, and evaluate potential fundraising methods, including issuing new shares or convertible securities26 Loan Transactions As of March 31, 2024, the Group had two outstanding loan receivables totaling approximately 21.2 Million HKD, both fully impaired to zero net book value due to long-term overdue status and lack of formal repayment agreements, with the report detailing reasons for granting, impairment assessment, internal controls, and recovery actions Outstanding Loan Receivables (as of March 31, 2024) | Borrower | Outstanding Amount (Thousand HKD) | Loss Allowance (Thousand HKD) | Carrying Amount (Thousand HKD) | | :--- | :--- | :--- | :--- | | Debtor 1 | 10,087 | (10,087) | – | | Debtor 2 | 11,134 | (11,134) | – | | Total | 21,221 | (21,221) | – | - Due to long-term overdue status and absence of legally binding repayment arrangements, management adopted a prudent approach by making full specific provisions for both loans3135 - The Group has established internal control policies for granting loans, including credit assessment procedures, and continues to pursue recovery actions such as debt collection and legal consultation for outstanding loans364244 Financial Review In FY2024, the Group's total revenue increased by 3.5% to 62.6 Million HKD, driven by the control systems segment, while sales costs decreased by 26.7%, leading to a 178.7% surge in gross profit to 24.8 Million HKD, and a significant narrowing of loss attributable to owners to 17.8 Million HKD Revenue by Business Segment | Business Segment | FY2024 (Thousand HKD) | % of Total | FY2023 (Thousand HKD) | % of Total | | :--- | :--- | :--- | :--- | :--- | | Building Intelligence | 24,305 | 38.8% | 25,766 | 42.6% | | Control Systems | 38,030 | 60.8% | 33,977 | 56.1% | | Data Center | 246 | 0.4% | 795 | 1.3% | | Total | 62,581 | 100.0% | 60,538 | 100.0% | - Gross profit increased by 178.7% year-on-year to 24.8 Million HKD, with gross margin improving from 14.8% to 39.6%, primarily due to the launch of high-margin new products whose related R&D costs were expensed in prior years48 - Administrative and other operating expenses decreased by 9.3 Million HKD year-on-year to 27.5 Million HKD, mainly due to lower staff costs52 - Loss attributable to owners of the Company significantly decreased by 56.6% from 41.0 Million HKD to 17.8 Million HKD56 Capital Structure, Liquidity and Financial Resources The Group relies on operating cash, bank borrowings, and shareholder contributions for working capital, successfully raising approximately 38.5 Million HKD net from two share placements in FY2024, significantly improving its financial position with current ratio increasing to 1.3 and gearing ratio decreasing to 15% - Completed placement of 40,000,000 shares in May 2023, raising approximately 14.7 Million HKD net proceeds, fully utilized for general working capital6264 - Completed placement of 60,000,000 shares in March 2024, raising approximately 23.8 Million HKD net proceeds, intended for general working capital and future investments6668 Key Financial Ratios | Metric | March 31, 2024 | March 31, 2023 | | :--- | :--- | :--- | | Current Ratio | 1.3 | 0.7 | | Gearing Ratio | 15% | 96% | - Outstanding bank borrowings as of March 31, 2024, were approximately 50.7 Million HKD, a decrease from 62.8 Million HKD in the prior year70 Other Disclosures This year, the Group undertook significant transactions including a share placement in MOX Group Limited, full disposal of Universal Clean Energy Investment Limited, and sale of two subsidiaries to a former co-CEO, while reducing employee count from 115 to 73, decreasing staff costs, and not recommending any dividends for the year, with post-reporting period events including share option grants and a new non-executive director appointment - Significant disposals include the full sale of Universal Clean Energy Investment Limited and the sale of two blockchain-related subsidiaries to a former co-CEO7375 - Employee count decreased from 115 to 73 employees, with staff costs decreasing by 6.1% year-on-year to 18.4 Million HKD79 - The Board does not recommend the declaration of any dividend for the year ended March 31, 202488 - Post-reporting period events include the grant of 25,043,200 share options on April 27, 2024, and the appointment of Ms. Mo Yina as a non-executive director on May 29, 20248486 Directors Biographies of Directors This section provides detailed biographies of the Company's executive, non-executive, and independent non-executive directors, highlighting their diverse professional backgrounds in equity investment, logistics, accounting, finance, and law, which contribute to the Board's varied expertise - Executive Director Mr. Han Weining is the Company's CEO, with extensive experience in the telecommunications technology industry, holding a major stake in the Company through his wholly-owned entity90 - Executive Director Mr. You Yiyang, appointed in March 2024, holds master's degrees in finance and accounting, with over ten years of experience in equity investment91 - The independent non-executive director team possesses diverse professional backgrounds, covering accounting, finance, investment, and legal fields, contributing to corporate governance and decision-making94959798 Directors' Report Principal Businesses and Risk Management This report outlines the Group's principal businesses, including automatic control systems, intelligent systems, and advanced technology leasing/hosting services, while identifying key risks such as business/market, operational, financial (exchange rate, interest rate, liquidity), and compliance risks, along with their respective monitoring and management measures - The Group's principal businesses include: (i) automatic control systems and solutions; (ii) intelligent systems (visual intercom and surveillance); and (iii) leasing, hosting, and related services for advanced technologies (computer equipment, robots, etc)102 - Key risks faced by the Group include: business/market risks (reliance on the Chinese market), operational risks, financial risks (exchange rate, interest rate, liquidity), and compliance risks104105107108109 Results and Dividends The Group's detailed results for the current financial year are presented in the consolidated statement of profit or loss and other comprehensive income, with the Board deciding not to declare any dividends for the year ended March 31, 2024 - The Directors do not recommend the payment of any dividend for the year ended March 31, 2024118 Major Suppliers and Customers In FY2024, the Group exhibited high reliance on its major customers, with the largest customer accounting for 27.1% of total revenue and the top five customers collectively contributing 58.0%, whereas suppliers were more diversified, with the largest accounting for 6.0% of total purchases and the top five for 15.8% Major Customer and Supplier Proportions | Category | Percentage of Total | | :--- | :--- | | Largest Customer | 27.1% | | Top Five Customers Total | 58.0% | | Largest Supplier | 6.0% | | Top Five Suppliers Total | 15.8% | Directors' and Interests Disclosure The reporting period saw multiple changes in Board members, with CEO Mr. Han Weining holding approximately 18.67% of the Company's shares through his controlled entities as of March 31, 2024, and Mr. Lin Shaoxin holding approximately 9.91% as a major shareholder, with no material conflicts of interest for directors in competing businesses or significant contracts during the period - During and after the reporting period, there were several changes in Board members, including the appointment, resignation, and retirement of multiple directors131 Directors' and Major Shareholders' Shareholdings (as of March 31, 2024) | Shareholder Name / Company Name | Capacity / Nature of Interest | Number of Shares Held | Approximate Percentage of Shareholding | | :--- | :--- | :--- | :--- | | Mr. Han Weining | Interest in controlled corporation and beneficial owner | 67,246,331 | 18.67% | | Excel Time | Beneficial owner | 53,814,331 | 14.94% | | Lin Shaoxin | Beneficial owner | 35,716,480 | 9.91% | Share Option Scheme The Company adopted a new share option scheme on September 2, 2022, valid until September 1, 2032, to incentivize contributing directors and employees, with no outstanding share options as of March 31, 2024, and a total of 25,047,264 shares available for issue, representing approximately 6.95% of the total issued shares - The Company has a share option scheme adopted on September 2, 2022, with a ten-year validity period146 - As of March 31, 2024, there were no outstanding share options under the share option scheme150 - The total number of shares available for issue under the share option scheme is 25,047,264, representing approximately 6.95% of the total issued shares as of the reporting date151 Corporate Governance Report Corporate Governance Practices The Company has adopted the Corporate Governance Code, complying with all applicable provisions during the reporting period, except for the continuous vacancy of the Board Chairman position since January 3, 2020, and the CEO chairing the 2023 AGM due to the Chairman's absence - The Company failed to comply with Corporate Governance Code Provision C.2 due to the continuous vacancy of the Board Chairman position, with related functions jointly performed by Board members171 - Due to the vacant Chairman position, the Company failed to comply with Code Provision F.2.2, with the CEO chairing the 2023 Annual General Meeting172 Board of Directors As of the reporting period end, the Board comprised two executive and four independent non-executive directors, possessing diverse skills and experience, with the Company adopting a Board Diversity Policy and holding 17 meetings during the year to discuss strategy and operations, ensuring director liability insurance and independent non-executive director independence - The Board has adopted a diversity policy and believes the current Board members possess good diversity in terms of gender, age, cultural background, and professional experience177 - For the year ended March 31, 2024, the Board held 17 meetings and 1 general meeting, with generally high attendance rates among directors181 Board Committees The Company has established an Audit Committee, Remuneration Committee, and Nomination Committee, all chaired by independent non-executive directors, responsible for overseeing financial reporting, internal controls, remuneration policies, and Board structure/nominations, holding 2, 5, and 5 meetings respectively during the year - The Audit Committee, composed of three independent non-executive directors, is responsible for reviewing financial statements and internal control systems, holding 2 meetings during the year194195 - The Remuneration Committee, composed of three independent non-executive directors, is responsible for reviewing remuneration policies, holding 5 meetings during the year196199 - The Nomination Committee, primarily composed of independent non-executive directors, is responsible for reviewing Board composition and nominating candidates, holding 5 meetings during the year200203 Internal Control and Risk Management The Board holds ultimate responsibility for the Group's risk management and internal control systems, reviewing their effectiveness annually, with a COSO-framework-based system and external review confirming its effectiveness, and the Company continuously assessing the need for an internal audit function - The Board confirms its responsibility for risk management and internal control systems, reviewing their effectiveness at least annually211 - The Group has established a four-tier risk management governance structure and implemented an internal control system based on the COSO framework, covering five key components: control environment, risk assessment, control activities, information and communication, and monitoring activities212218 - The Company currently does not have an internal audit function, with the Board deeming external professional review more cost-effective, and will continue to assess the need for an in-house internal audit department228 Environmental, Social and Governance Report Report Overview and Governance This ESG report outlines the Group's FY2024 sustainability commitments and performance, focusing on operational company Wankesi, detailing its ESG governance structure, environmental targets, and 17 material ESG issues identified through stakeholder engagement, including GHG emissions, energy consumption, employee development, product quality, and anti-corruption - The report is prepared in accordance with the HKEX ESG Reporting Guide, primarily covering Wankesi, an operating company with significant environmental impact233235 - The Group has established an ESG governance structure led by the Board, responsible for strategy, target setting, and risk oversight238241 - Through materiality assessment, the Group identified 17 material ESG issues, with "Greenhouse Gas Emissions," "Waste Management," "Energy Consumption," "Employee Development and Training," and "Product Quality Control" deemed most important248252 A. Environment The Group is committed to environmental sustainability, adhering to regulations, managing emissions through efficient filtration and energy-saving measures, promoting resource conservation in electricity, water, and packaging, and developing strategies to address physical and transitional climate-related risks Wankesi Greenhouse Gas Emissions | Metric | Unit | FY2024 | FY2023 | | :--- | :--- | :--- | :--- | | Total GHG Emissions | tonnes of CO2e | 133.92 | 345.97 | | GHG Emissions Intensity | tonnes of CO2e / Total Annual Production | 0.02 | 0.02 | Wankesi Energy and Water Consumption | Metric | Unit | FY2024 | FY2023 | | :--- | :--- | :--- | :--- | | Total Energy Consumption | kWh | 234,823.00 | 436,773.81 | | Energy Consumption Intensity | kWh / Total Annual Production | 31.31 | 26.07 | | Total Water Consumption | cubic meters | 3,704.00 | 3,955.83 | | Water Consumption Intensity | cubic meters / Total Annual Production | 0.49 | 0.24 | - The Group has set targets to reduce greenhouse gas emissions intensity, non-hazardous waste intensity, energy consumption intensity, and water consumption intensity by or before FY2025, using FY2022 as the baseline256260268272 - The Group has identified physical risks (e.g., extreme weather) and transitional risks (e.g., stricter regulations) related to climate change, and has developed corresponding prevention and response measures282284 B. Society In social responsibility, the Group is committed to protecting employee rights, providing fair employment, a safe workplace, and diverse training, strictly prohibiting child and forced labor, implementing stringent supply chain management, prioritizing product quality, customer privacy, and intellectual property, and maintaining clear anti-corruption policies with relevant training for directors and staff - As of March 31, 2024, the Group had 73 employees, a decrease from 115 last year, with an employee turnover rate of 57.53% for the year289292 - The Group highly prioritizes occupational health and safety, with no work-related injuries or fatalities reported during the period, and zero lost workdays due to work-related injuries294 - The Group has established a four-module training system, with approximately 32.88% of employees receiving training in FY2024, averaging 1.99 hours per trainee299300 - The Group has established a stringent supplier management system, requiring suppliers to adhere to a code of ethics, with 164 suppliers in FY2024, all located in China308 - The Group has an anti-corruption policy and whistleblowing system, providing anti-corruption training to 3 directors and 37 employees during the current financial year323 Financial Statements Independent Auditor's Report The auditor, Grandall CPA Limited, issued an unmodified opinion on the Group's consolidated financial statements for the year ended March 31, 2024, affirming they present a true and fair view in accordance with HKFRSs and the Companies Ordinance, with "Provision for Expected Credit Losses on Trade Receivables" identified as a key audit matter, which the auditor found supported by evidence after reviewing management's assessment - The auditor issued an unmodified opinion on the consolidated financial statements339 - A key audit matter was "Provision for Expected Credit Losses on Trade Receivables," with total trade receivables of approximately 48.5 Million HKD and expected credit loss provision of approximately 26.2 Million HKD as of the reporting period end341343 - The auditor's procedures, including understanding key controls, sampling aging and post-period settlements, inquiring management, and evaluating the ECL model, supported management's judgments and estimates345346 Consolidated Financial Statements This section presents the Group's four core financial statements for the year ended March 31, 2024, showing a narrowed annual loss of 17.8 Million HKD, total assets of 223.1 Million HKD, increased total equity to 116.2 Million HKD, and year-end cash and cash equivalents rising to 33.4 Million HKD, primarily due to net cash inflow from financing activities Consolidated Financial Statements Key Data (Thousand HKD) | Statement | Metric | FY2024 | FY2023 | | :--- | :--- | :--- | :--- | | Statement of Profit or Loss | Revenue | 62,581 | 60,538 | | | Loss for the Year | (17,768) | (43,679) | | Statement of Financial Position | Total Assets | 223,095 | 226,023 | | | Total Liabilities | 106,884 | 157,654 | | | Total Equity | 116,211 | 68,369 | | Statement of Cash Flows | Net Cash from Operating Activities | (17,478) | (2,716) | | | Net Cash from Investing Activities | (2,657) | (390) | | | Net Cash from Financing Activities | 50,784 | (2,834) | | | Cash and Cash Equivalents at Year End | 33,373 | 2,345 | Notes to the Consolidated Financial Statements The notes provide detailed explanations and supplementary information to the consolidated financial statements, covering general information, new accounting standards, significant accounting policies, key judgments and estimates, disaggregated revenue, expenses, assets, liabilities, and equity items, as well as segment information, related party transactions, financial risk management, and post-reporting period events - Note 5 discloses that revenue primarily originated from Building Intelligence (24.3 Million HKD) and Control Systems (38.0 Million HKD) businesses496 - Note 13 provides detailed segment reporting, showing profitability in Building Intelligence and Control Systems segments, while the Data Center segment incurred losses528 - Notes 21 and 30(a) detail the aging analysis of trade and other receivables and the assessment of expected credit loss provisions, a key audit matter563602 - Note 28(b) records the share capital changes during the year, including the issuance of 100 Million new shares through two placements583585 - Note 35 discloses post-reporting period events, including the grant of 25,043,200 share options and the appointment of a non-executive director649650 Five Year Summary Five Year Summary This section provides a summary of the Group's key financial data for the past five fiscal years (2020-2024), showing revenue peaking in 2022 before stabilizing around 60 Million HKD in recent years, consistent losses over five years with FY2024 being the second lowest, and total assets and equity recovering in FY2024 after prior declines Five Year Financial Data Summary (Thousand HKD) | Year Ended March 31 | FY2024 | FY2023 | FY2022 | FY2021 | FY2020 | | :--- | :--- | :--- | :--- | :--- | :--- | | Results | | | | | | | Revenue | 62,581 | 60,538 | 114,165 | 90,281 | 73,243 | | Loss Attributable to Owners of the Company | (17,840) | (40,971) | (109,678) | (15,133) | (38,677) | | Financial Position | | | | | | | Total Assets | 223,095 | 226,023 | 271,452 | 309,714 | 296,288 | | Total Liabilities | (106,884) | (157,654) | (166,017) | (147,072) | (123,083) | | Equity Attributable to Owners of the Company | 113,173 | 69,126 | 102,893 | 156,218 | 165,568 |
协同通信(01613) - 2024 - 年度财报