ALCO HOLD-NEW(00328) - 2024 - 年度财报

Company Information This section provides core company details including registration information, principal place of business, stock code, legal advisors, auditors, and share registrars Company Basic Information This section provides core company details including registration information, principal place of business, stock code, legal advisors, auditors, and share registrars - The company's stock code is 328, listed on the Hong Kong Stock Exchange[9] - The company's auditor is Kao Lee & Co. CPA Limited[6] - The company's registered office is in Bermuda, with its principal place of business in Shatin, Hong Kong[7][170] Chairman's Statement Group Performance and Dividends This year, the Group's revenue significantly increased by 66% and recorded a gross profit, with the annual profit primarily attributed to a one-off gain from deconsolidation of discontinued operations; excluding this gain, the company would still face a net loss, and the Board does not recommend a final dividend FY2024 Performance Overview (Continuing Operations) | Indicator | FY2024 (HKD) | FY2023 (HKD) | Year-on-Year Change | | :--- | :--- | :--- | :--- | | Revenue | 148,000,000 | 89,000,000 | +66% | | Gross Profit/(Loss) | 9,000,000 | (11,000,000) | Turnaround to Profit | | Profit/(Loss) for the Year | 592,000,000 | (516,000,000) | Turnaround to Profit | - The annual profit primarily resulted from a HKD 596 million gain from the deconsolidation of discontinued operations[174] - The Board does not recommend a final dividend for the financial year ended March 31, 2024[175] Business Review and Outlook The Group's core business involves developing and selling own-brand notebook and tablet computers, transitioning from in-house manufacturing to outsourced ODM/OEM; despite slight operational improvements, the overall financial situation remains severe, necessitating continued reliance on capital market financing, enhanced operational efficiency, and exploration of business collaborations to address challenges and pursue growth - The core business involves the development and sales of own-brand notebook and tablet computers[19] - The company has transitioned from in-house manufacturing to outsourced ODM and OEM, achieving gross profit, but the business environment remains challenging, with new product and market development as a top priority[48] - Excluding the one-off gain from subsidiary divestment, the company would still face a net loss for the current year, advising caution in operations and cash flow management[139] - Future sustainability will rely on continued capital market fundraising, operational optimization, and business collaborations[178][483][498] Biographical Details of Directors Board of Directors Profile This section details the personal biographies of executive, non-executive, and independent non-executive directors, including their age, education, professional experience, and positions held in other listed companies - Executive Director Ms. Liao Liping possesses over twenty-seven years of experience in banking, investment, and education sectors[486] - Executive Director Mr. He Zeyu has extensive experience in multinational business, particularly in overseas market development[501] - The independent non-executive director team possesses diverse professional backgrounds including accounting, corporate finance, information technology, engineering, and public administration[12][533][535][16][491] Corporate Governance Report Corporate Governance Practices The company is committed to maintaining high corporate governance standards, having complied with all applicable code provisions in Appendix C1 of the Listing Rules; the Board is responsible for the Group's business and strategic decisions and has received annual independence confirmations from all independent non-executive directors - During the current year, the company has complied with all applicable code provisions of the Code[537] Board of Directors The Board currently comprises two executive directors, one non-executive director, and five independent non-executive directors, holding 49 meetings during the reporting period with generally high attendance; the company has adopted a board diversity policy and clarified the division of responsibilities between the Board and senior management - The Board consists of 8 members, including 2 executive directors, 1 non-executive director, and 5 independent non-executive directors, meeting independence requirements[508][538] Attendance at Board and General Meetings During the Year | Director Name | Position | Board Meeting Attendance | General Meeting Attendance | | :--- | :--- | :--- | :--- | | Mr. He Zeyu | Executive Director | 49/49 | 0/3 | | Mr. Yang Min | Non-Executive Director | 17/17 | Not Applicable | | Mr. Chu Hoi Kan | Independent Non-Executive Director | 49/49 | 2/3 | | Mr. Lam Chi Wing | Independent Non-Executive Director | 49/49 | 0/3 | | Mr. Tang She Kin | Independent Non-Executive Director | 49/49 | 2/3 | Board Committees The company has established Remuneration, Audit, and Nomination Committees, all composed of and chaired by independent non-executive directors; the report details each committee's responsibilities, composition, and annual meeting attendance, ensuring the independence and professionalism of the corporate governance structure - The Remuneration Committee comprises five independent non-executive directors, responsible for reviewing and recommending remuneration for directors and senior management[516][52] - The Audit Committee consists of five independent non-executive directors, overseeing the financial reporting process, internal controls, and risk management[517][53] - The Nomination Committee is composed of five independent non-executive directors, responsible for reviewing the Board structure, identifying, and nominating director candidates[55][550] Auditor's Opinion and Management's Response The auditor issued a 'Disclaimer of Opinion' on this year's consolidated financial statements primarily due to significant uncertainties related to going concern and insufficient audit evidence for discontinued operations; management responded by outlining remedial measures, including debt restructuring, seeking shareholder loan extensions, and improving operating cash flow, asserting the company's ability to continue as a going concern, which the Audit Committee concurred with, requesting resolution of the issues - Auditor Kao Lee & Co. CPA Limited issued a 'Disclaimer of Opinion' on the Group's consolidated financial statements[60][167] - The basis for the disclaimer includes significant uncertainties that may cast substantial doubt on the going concern ability, such as net current liabilities of HKD 169 million and overdue bank borrowings, along with insufficient evidence to support management's cash flow forecasts[555][93][526] - Another issue is the auditor's inability to verify the revenue, loss, and asset and liability amounts related to discontinued operations (disposal group) due to lack of access to their books and records[96][69][529] - Management is implementing multiple measures to address liquidity pressure, including bank loan restructuring, managing shareholder loans, negotiating extended repayment terms with suppliers, and striving to improve operating cash flow[43][46][98][67][99] Risk Management and Internal Control The Board bears ultimate responsibility for the Group's risk management and internal control systems, aiming to manage rather than eliminate risks; the Audit Committee oversees these systems and has outsourced internal control review to a third-party consulting firm to ensure system effectiveness and adequacy - The Board holds ultimate responsibility for risk management and internal control systems, and is responsible for reviewing their effectiveness[104] - The company has outsourced its internal control review to a third-party consulting firm to assess system effectiveness[566] Directors' Report Business and Financial Review This report reviews the Group's principal activities, performance, and financial position, focusing on consumer electronics products and environmental impact reduction; financially, it discloses the use of proceeds from placings and rights issues, detailing the Group's liquidity, inventory, trade receivables, and payables, noting a significant reduction in employee count by year-end - The Group's principal activity is investment holding, with subsidiaries engaged in the design, manufacture, and sale of consumer electronic products[600][110] - The Board does not recommend a final dividend[79] Financial Position Summary as at March 31, 2024 | Indicator | Amount (HKD) | 2023 Corresponding Period (HKD) | | :--- | :--- | :--- | | Total Deficit | 88,000,000 | 795,000,000 | | Bank Balances and Cash | 24,000,000 | 2,000,000 | | Net Borrowings | 186,000,000 | 154,000,000 | | Inventories | 3,000,000 | 38,000,000 | | Trade Receivables | 38,000,000 | 8,000,000 | | Trade Payables | 29,000,000 | 49,000,000 | - As at March 31, 2024, the Group employed approximately 15 employees, a significant reduction from 59 last year[143] Use of Proceeds The report details the use of proceeds from the 2022 placing, 2023 rights issue, and 2024 placing; most funds were used as planned for loan repayment, external debt settlement, and general working capital, with some remaining funds earmarked primarily for bank loan repayment Summary of Use of Proceeds | Event | Intended Use | Amount Used as at 31/3/2024 (Thousand HKD) | Unused Amount (Thousand HKD) | | :--- | :--- | :--- | :--- | | 2023 Rights Issue | Repayment of bank and other borrowings | 28,000 | 11,000 | | 2023 Rights Issue | Settlement of external debts | (37,080) | 0 | | 2024 Placing | Repayment of bank and other borrowings | 0 | 10,000 | | 2024 Placing | Settlement of external debts | 15,500 | 1,500 | Directors and Shareholding Structure This section lists Board members and changes during the reporting period, outlining director re-election arrangements; it confirms no material conflicts of interest for directors in competing businesses and the company's purchase of directors' liability insurance, also disclosing major shareholders with over 5% equity and confirming sufficient public float - Ms. Liao Liping, Mr. Yang Min, Mr. Tang Chaoman, and Ms. Mak Suet Man will retire and offer themselves for re-election at the upcoming Annual General Meeting[127] - No directors or chief executives held interests or short positions in the shares of the company or its associated corporations requiring disclosure under the Securities and Futures Ordinance[154][132] Major Shareholders' Shareholding (Over 5% Holding) | Shareholder Name | Capacity | Number of Shares (Long Position) | Percentage of Issued Share Capital | | :--- | :--- | :--- | :--- | | Mr. Bong Ching Chung | Beneficial Owner | 6,400,000 | 6.70% | | Mr. Toh Cheng Hock Kenneth | Beneficial Owner | 5,500,000 | 5.76% | - The company maintained a sufficient public float, exceeding 25% of its issued shares, throughout the reporting period and up to the report date[188] Independent Auditor's Report Disclaimer of Opinion Auditor Kao Lee & Co. CPA Limited issued a 'Disclaimer of Opinion' on the Group's consolidated financial statements as of March 31, 2024, primarily due to insufficient audit evidence regarding the appropriateness of the going concern assumption and inability to verify financial data for discontinued operations; these significant uncertainties and audit scope limitations form the basis for the disclaimer - The auditor explicitly stated that due to the significance of matters described in the 'Basis for Disclaimer of Opinion' section, sufficient and appropriate audit evidence could not be obtained, thus no opinion is provided on the consolidated financial statements[167][191] - Significant uncertainty exists regarding going concern: the Group recorded a net loss from continuing operations, with net current liabilities of HKD 169 million, approximately HKD 47.53 million in overdue bank borrowings, and cash and balances of only approximately HKD 23.86 million[192][555] - Audit scope limitation: the auditor could not verify the annual loss, assets held for sale, and related liabilities of the discontinued Dongguan production line (disposal group) due to inability to obtain its books and records[95][96][221][222] - The auditor could not be satisfied with the reasonableness of management's forecasts for debt restructuring, shareholder loan extensions, and future operational improvements, thus unable to determine the appropriateness of preparing financial statements on a going concern basis[196][526] Consolidated Financial Statements Consolidated Statement of Profit or Loss For the year ended March 31, 2024, the Group's continuing operations recorded a loss of approximately HKD 3.07 million, but achieved an overall profit of approximately HKD 592 million for the year, turning profitable, primarily due to a HKD 595 million profit from discontinued operations (mainly from deconsolidation gain); basic earnings per share were HKD 9.79 Consolidated Statement of Profit or Loss Summary | Item | 2024 (Thousand HKD) | 2023 (Thousand HKD) | | :--- | :--- | :--- | | Continuing Operations | | | | Revenue | 148,422 | 89,321 | | Gross Profit/(Loss) | 8,864 | (10,952) | | Loss for the Year from Continuing Operations | (3,070) | (91,919) | | Discontinued Operations | | | | Profit/(Loss) for the Year from Discontinued Operations | 594,842 | (423,695) | | Profit/(Loss) for the Year | 591,772 | (515,614) | Earnings/(Loss) Per Share | Item | 2024 (HKD) | 2023 (HKD) | | :--- | :--- | :--- | | Basic Earnings/(Loss) Per Share | 9.79 | (33.18) | | Diluted Earnings/(Loss) Per Share | 9.79 | (33.18) | Consolidated Statement of Financial Position As at March 31, 2024, the Group's financial position remained severe; despite an increase in total assets, net current liabilities amounted to HKD 169 million, and total equity was a negative HKD 87.53 million, with major liabilities including bank borrowings, shareholder loans, and financial guarantees for former subsidiaries Consolidated Statement of Financial Position Summary | Item | March 31, 2024 (Thousand HKD) | March 31, 2023 (Thousand HKD) | | :--- | :--- | :--- | | Total Assets | 182,410 | 283,288 | | Non-current Assets | 95,337 | 146,449 | | Current Assets | 87,073 | 136,839 | | Total Liabilities | (269,937) | (1,077,958) | | Current Liabilities | 256,444 | 1,058,588 | | Non-current Liabilities | 13,493 | 19,370 | | Net Current Liabilities | (169,371) | (921,749) | | Total Deficit (Total Equity) | (87,527) | (794,670) | Consolidated Statement of Cash Flows This year, the Group's operating activities resulted in a net cash outflow of HKD 69.47 million, while financing activities generated a net cash inflow of HKD 96.07 million, primarily from share issuance proceeds; consequently, cash and cash equivalents increased from HKD 2.39 million at the beginning of the year to HKD 23.86 million at year-end Consolidated Statement of Cash Flows Summary | Item | 2024 (Thousand HKD) | 2023 (Thousand HKD) | | :--- | :--- | :--- | | Net Cash Used in Operating Activities | (69,473) | (157) | | Net Cash Generated from Investing Activities | 3,645 | 8,316 | | Net Cash Generated From/(Used In) Financing Activities | 96,068 | (17,113) | | Net Increase/(Decrease) in Cash and Cash Equivalents | 30,240 | (8,954) | | Cash and Cash Equivalents at Beginning of Year | 2,392 | 10,202 | | Cash and Cash Equivalents at End of Year | 23,855 | 2,940 | Notes to the Consolidated Financial Statements Note 1: General Information and Basis of Preparation This note explains the basis for preparing financial statements on a going concern basis, despite significant uncertainties including continuous losses, high net current liabilities, and bank loan defaults; the Board believes in going concern based on plans like debt restructuring, shareholder loan negotiations, cost control, and sales expansion, but acknowledges risks if these plans fail - The Board acknowledges significant challenges for the Group, including a loss from continuing operations of approximately HKD 3.07 million and net current liabilities of approximately HKD 169 million[265] - As at year-end, the Group had approximately HKD 47.53 million in bank borrowings that were not repaid on schedule and could be demanded for immediate repayment[242][588] - Management is implementing multiple measures to maintain going concern, including debt restructuring with banks, negotiating shareholder loan extensions with the late former chairman's estate, discussing extended repayment terms with creditors, and improving operating cash flow through product portfolio simplification and enhanced cost control[267][268][248][270] Note 4: Financial Risk Management The Group faces market risks (foreign exchange, interest rate), credit risk, and liquidity risk; foreign exchange risk primarily stems from GBP and CAD with limited impact, while interest rate risk arises from floating-rate borrowings; credit risk from bank deposits and trade receivables has led to expected credit loss provisions; the most severe is liquidity risk, with current liabilities significantly exceeding current assets, a negative asset-liability ratio, and reliance on external financing for operations - Liquidity risk is extremely high: the Group has net current liabilities of approximately HKD 169 million, and approximately HKD 47.53 million in bank borrowings are overdue and subject to immediate repayment demand[927][618] - Capital structure deterioration: the Group is in a net deficit position, with an asset-liability ratio of -211.66%, indicating liabilities significantly exceed equity[701][700] - Credit risk management: the Group applies a lifetime expected credit loss model to trade receivables and has made a loss allowance provision of approximately HKD 6.47 million[469][482] Note 6: Revenue and Segment Information This year, all revenue from the Group's continuing operations, totaling HKD 148 million, came from the 'Notebook Computer Products' segment, representing a 66% year-on-year increase; geographically, Asia was the primary market, contributing over 70% of revenue, with high customer concentration as the top two clients accounted for over half of the total revenue Revenue by Business Segment (Continuing Operations) | Business Segment | 2024 (Thousand HKD) | 2023 (Thousand HKD) | | :--- | :--- | :--- | | Audio-Visual Products | – | – | | Notebook Computer Products | 148,422 | 89,321 | | Total | 148,422 | 89,321 | Revenue by Geographical Region (Continuing Operations) | Geographical Region | 2024 (Thousand HKD) | 2023 (Thousand HKD) | | :--- | :--- | :--- | | Asia | 105,435 | 60,479 | | Europe | 37,998 | 23,695 | | Others | 4,989 | 5,147 | | Total | 148,422 | 89,321 | - Customer concentration is high, with sales to Customer A and Customer B accounting for 29% and 22% of total revenue, respectively[971][990] Note 11: Discontinued Operations/Disposal Group Held for Sale This note details the financial impact of the discontinued Dongguan production line business (disposal group); due to a court-ordered winding-up of subsidiary Akai Electric Company Limited, the Group lost control and deconsolidated it on June 28, 2023, resulting in a gain of approximately HKD 596 million, which was the primary reason for the Group's overall profit this year - Due to a creditor's application, the court ordered the winding-up of Akai Electric Company Limited, a direct wholly-owned subsidiary of the Group, on June 28, 2023, leading to the Group losing control and deconsolidating it[643][977] Gain Calculation from Deconsolidation of Akai Electric Group | Item | Amount (Thousand HKD) | | :--- | :--- | | Net Liabilities Deconsolidated | 1,900,203 | | Amounts Due from Akai Electric Group | (1,180,785) | | Financial Guarantees Provided | (121,984) | | Foreign Exchange Reserve Released Upon Deconsolidation | (1,044) | | Gain on Deconsolidation | 596,390 | - Discontinued operations recorded a profit of HKD 595 million this year, compared to a loss of HKD 424 million in the same period last year[999] Note 40: Events After Reporting Period Subsequent to the reporting period, Shanghai Commercial Bank Limited filed a winding-up petition against the company in the Hong Kong High Court due to the company's failure to honor loan guarantees for former subsidiary Akai Electric, involving outstanding loan principal and interest, with a hearing scheduled for August 28, 2024 - On June 21, 2024, Shanghai Commercial Bank Limited filed a winding-up petition against the company with the court[1044][1051] - The petition is based on the company's loan guarantee for former subsidiary Akai Electric, involving outstanding loan principal of HKD 2.62 million and USD 2.52 million, plus interest[1044] Five-Year Financial Summary Five-Year Performance and Financial Position This summary presents the Group's key performance and financial position over the past five fiscal years; data indicates revenue continuously declined after peaking in 2021, while profit/loss attributable to owners of the company fluctuated significantly, showing losses in the last three years, with a profit only in FY2024 due to a one-off gain; total assets consistently shrank, and total liabilities peaked in 2022 and 2023, leading to total equity turning negative (total deficit) since 2022 Five-Year Performance Summary (As at Year Ended March 31) | Item | 2024 (Thousand HKD) | 2023 (Thousand HKD) | 2022 (Thousand HKD) | 2021 (Thousand HKD) | 2020 (Thousand HKD) | | :--- | :--- | :--- | :--- | :--- | :--- | | Revenue | 148,422 | 89,321 | 542,408 | 1,278,686 | 961,246 | | Profit/(Loss) Attributable to Owners of the Company | 600,692 | (510,242) | (594,575) | (360,463) | (599,374) | Five-Year Assets and Liabilities Summary (As at March 31) | Item | 2024 (Thousand HKD) | 2023 (Thousand HKD) | 2022 (Thousand HKD) | 2021 (Thousand HKD) | 2020 (Thousand HKD) | | :--- | :--- | :--- | :--- | :--- | :--- | | Total Assets | 182,410 | 283,288 | 833,777 | 1,363,113 | 1,216,024 | | Total Liabilities | (269,937) | (1,077,958) | (1,106,700) | (1,032,927) | (535,104) | | Total Deficit (Equity) | (87,527) | (794,670) | (272,923) | 330,186 | 680,920 |