Cover Page
Cover Page | 12 Months Ended |
Jun. 30, 2021shares | |
Document Information [Line Items] | |
Document Type | 20-F |
Amendment Flag | false |
Document Period End Date | Jun. 30, 2021 |
Entity File Number | 001-33602 |
Document Fiscal Year Focus | 2021 |
Document Fiscal Period Focus | FY |
Entity Registrant Name | HOLLYSYS AUTOMATION TECHNOLOGIES LTD. |
Entity Incorporation, State or Country Code | D8 |
Entity Address, Address Line One | No. 2 Disheng Middle Road |
Entity Address, Address Line Two | Beijing Economic-Technological Development Area |
Entity Address, City or Town | Beijing |
Entity Address, Country | CN |
Entity Address, Postal Zip Code | 100176 |
Entity Common Stock, Shares Outstanding | 61,367,337 |
Entity Central Index Key | 0001357450 |
Current Fiscal Year End Date | --06-30 |
Entity Well-known Seasoned Issuer | No |
Entity Voluntary Filers | No |
Entity Current Reporting Status | No |
Entity Interactive Data Current | Yes |
Entity Filer Category | Large Accelerated Filer |
Entity Emerging Growth Company | false |
Document Accounting Standard | U.S. GAAP |
Entity Shell Company | false |
Document Annual Report | true |
Document Transition Report | false |
Document Shell Company Report | false |
Document Registration Statement | false |
ICFR Auditor Attestation Flag | true |
Auditor Name | Union Power HK CPA Limited |
Auditor Firm ID | 3004 |
Auditor Location | Hong Kong |
Business Contact | |
Document Information [Line Items] | |
Entity Address, Address Line One | No. 2 Disheng Middle Road |
Entity Address, Address Line Two | Beijing Economic-Technological Development Area |
Entity Address, City or Town | Beijing |
Entity Address, Country | CN |
Entity Address, Postal Zip Code | 100176 |
Contact Personnel Name | Chuan (Arden) XIA |
City Area Code | 86 10 |
Local Phone Number | 5898 1386 |
Contact Personnel Email Address | xiachuan@hollysys.com |
Ordinary shares [Member] | |
Document Information [Line Items] | |
Title of 12(b) Security | Ordinary Shares |
Trading Symbol | HOLI |
Security Exchange Name | NASDAQ |
Preferred Stock [Member] | |
Document Information [Line Items] | |
Title of 12(b) Security | Preferred Share |
No Trading Symbol Flag | true |
Security Exchange Name | NASDAQ |
CONSOLIDATED BALANCE SHEETS
CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands | Jun. 30, 2021 | Jun. 30, 2020 |
Current assets: | ||
Cash and cash equivalents | $ 664,321 | $ 288,782 |
Short-term investments | 48,808 | 324,949 |
Restricted cash | 25,294 | 8,663 |
Accounts receivable, net of allowance for credit losses of $41,618 and $66,839 as of June 30, 2020 and 2021, respectively | 330,853 | 242,449 |
Costs and estimated earnings in excess of billings, net of allowance for credit losses of $6,150 and $11,835 as of June 30, 2020 and 2021, respectively | 196,706 | 186,879 |
Accounts receivable retention | 4,943 | 6,088 |
Other receivables, net of allowance for credit losses of $6,224 and $16,675 as of June 30, 2020 and 2021, respectively | 18,937 | 28,257 |
Advances to suppliers | 20,140 | 17,255 |
Amounts due from related parties | 28,243 | 21,444 |
Inventories | 47,912 | 48,210 |
Prepaid expenses | 937 | 648 |
Income tax recoverable | 464 | 870 |
Total current assets | 1,387,558 | 1,174,494 |
Non-current assets: | ||
Restricted cash | 5,932 | 21,652 |
Costs and estimated earnings in excess of billings | 1,230 | 2,309 |
Accounts receivable retention | 4,397 | 4,717 |
Prepaid expenses | 1 | 6 |
Property, plant and equipment, net | 94,046 | 78,050 |
Prepaid land leases | 16,568 | 15,742 |
Intangible assets, net | 1,399 | 1,713 |
Investments in equity investees | 60,166 | 41,133 |
Investments in securities | 2,622 | 4,640 |
Goodwill | 1,598 | 1,460 |
Deferred tax assets | 12,480 | 8,909 |
Operating lease right-of-use assets | 6,256 | 6,010 |
Total non-current assets | 206,695 | 186,341 |
Total assets | 1,594,253 | 1,360,835 |
Current liabilities (including amounts of the VIE without recourse to the primary beneficiary of $6,919 and $3,230 as of June 30, 2020 and 2021, respectively): | ||
Current portion of long-term loans | 15,308 | 320 |
Accounts payable | 140,235 | 117,460 |
Construction costs payable | 1,292 | 2,350 |
Deferred revenue | 184,543 | 139,242 |
Accrued payroll and related expenses | 22,077 | 17,245 |
Income tax payable | 3,508 | 3,142 |
Warranty liabilities | 5,902 | 6,604 |
Other tax payables | 6,373 | 3,279 |
Accrued liabilities | 38,633 | 31,595 |
Amounts due to related parties | 1,661 | 3,576 |
Operating lease liabilities | 3,098 | 2,489 |
Total current liabilities | 422,630 | 327,302 |
Non-current liabilities (including amounts of the VIE without recourse to the primary beneficiary of nil and nil as of June 30, 2019 and 2020, respectively): | ||
Accrued liabilities | 4,569 | 5,635 |
Long-term loans | 698 | 15,780 |
Deferred tax liabilities | 16,829 | 13,940 |
Accounts payable | 982 | 2,530 |
Warranty liabilities | 3,649 | 3,460 |
Operating lease liabilities | 2,928 | 3,302 |
Total non-current liabilities | 29,655 | 44,647 |
Total liabilities | 452,285 | 371,949 |
Commitments and contingencies | ||
Stockholders' equity: | ||
Ordinary shares, par value $0.001 per share, 100,000,000 shares authorized; 60,537,099 shares and 61,367,337 shares issued and outstanding as of June 30, 2020 and 2021, respectively | 61 | 61 |
Additional paid-in capital | 233,768 | 224,043 |
Statutory reserves | 64,449 | 49,423 |
Retained earnings | 806,598 | 774,473 |
Accumulated other comprehensive (loss) income | 32,814 | (63,517) |
Total Hollysys Automation Technologies Ltd. stockholders' equity | 1,137,690 | 984,483 |
Non-controlling interests | 4,278 | 4,403 |
Total equity | 1,141,968 | 988,886 |
Total liabilities and equity | $ 1,594,253 | $ 1,360,835 |
CONSOLIDATED BALANCE SHEETS (Pa
CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($) $ in Thousands | Jun. 30, 2021 | Jun. 30, 2020 |
Allowance for doubtful accounts, accounts receivable | $ 66,839 | $ 41,618 |
Allowance for doubtful accounts of costs and estimated earnings in excess of billings | 11,835 | 6,150 |
Allowance for doubtful accounts, other receivables | $ 16,675 | $ 6,224 |
Common stock, par value (in dollars per share) | $ 0.001 | $ 0.001 |
Common stock, shares authorized (in shares) | 100,000,000 | 100,000,000 |
Common stock, shares issued (in shares) | 61,367,337 | 60,537,099 |
Common stock, shares outstanding (in shares) | 61,367,337 | 60,537,099 |
Liabilities, Current | $ 422,630 | $ 327,302 |
Liabilities, Noncurrent | 29,655 | 44,647 |
Variable Interest Entity, Not Primary Beneficiary [Member] | ||
Liabilities, Current | 3,230 | 6,919 |
Liabilities, Noncurrent | $ 0 | $ 0 |
CONSOLIDATED STATEMENTS OF COMP
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME - USD ($) $ in Thousands | 12 Months Ended | ||
Jun. 30, 2021 | Jun. 30, 2020 | Jun. 30, 2019 | |
Net revenues | |||
Total net revenues | $ 593,466 | $ 503,327 | $ 570,341 |
Gross profit | 218,279 | 190,568 | 211,166 |
Operating expenses | |||
Selling | 35,197 | 30,642 | 28,926 |
General and administrative | 69,982 | 39,114 | 40,701 |
Goodwill impairment charge | 0 | 35,767 | 11,623 |
Research and development (including research and development from related parties of nil, $655 and $212 for the years ended June 30, 2019, 2020 and 2021, respectively) | 55,954 | 41,876 | 37,025 |
VAT refunds and government subsidies | (30,099) | (26,259) | (30,735) |
Total operating expenses | 131,034 | 121,140 | 87,540 |
Income from operations | 87,245 | 69,428 | 123,626 |
Other income, net (including other income from related parties of $2,520, $3,414 and $2,445 for the years ended June 30, 2019, 2020 and 2021, respectively) | 10,449 | 4,683 | 2,710 |
Foreign exchange (loss) gain | (6,219) | 599 | (1,161) |
Gains on deconsolidation of subsidiaries where the Company retains an equity interest | 0 | 0 | 5,768 |
Gains on disposal of an investment in an equity investee | 0 | 5,763 | |
Gains on disposal of an investment in securities | 3,323 | 0 | 0 |
Share of net income of equity investees | 604 | 3,131 | 404 |
Interest income | 14,131 | 13,060 | 11,839 |
Interest expenses | (553) | (306) | (575) |
Dividend income from equity investments | 912 | 1,139 | 1,112 |
Income before income taxes | 109,892 | 97,497 | 143,723 |
Income tax expenses | 20,554 | 18,171 | 18,184 |
Net income | 89,338 | 79,326 | 125,539 |
Less: Net income (losses) attributable to non-controlling interests | (371) | (70) | 278 |
Net income attributable to Hollysys Automation Technologies Ltd. | 89,709 | 79,396 | 125,261 |
Other comprehensive income, net of tax of nil | |||
Translation adjustments | 96,577 | (28,313) | (31,602) |
Comprehensive income | 185,915 | 51,013 | 93,937 |
Less: comprehensive income (loss) attributable to non-controlling interests | (125) | (387) | 17 |
Comprehensive income attributable to Hollysys Automation Technologies Ltd. | $ 186,040 | $ 51,400 | $ 93,920 |
Net income per share: | |||
Basic | $ 1.48 | $ 1.31 | $ 2.07 |
Diluted | $ 1.46 | $ 1.31 | $ 2.05 |
Shares used in net income per share computation: | |||
Basic | 60,566,709 | 60,478,717 | 60,456,524 |
Diluted | 61,513,749 | 60,609,242 | 61,273,884 |
Integrated Solution Contracts [Member] | |||
Net revenues | |||
Total net revenues | $ 460,180 | $ 414,272 | $ 467,371 |
Cost of revenue | 336,471 | 281,818 | 325,523 |
Product [Member] | |||
Net revenues | |||
Total net revenues | 28,667 | 20,144 | 33,102 |
Cost of revenue | 5,293 | 5,456 | 7,571 |
Service [Member] | |||
Net revenues | |||
Total net revenues | 104,619 | 68,911 | 69,868 |
Cost of revenue | $ 33,423 | $ 25,485 | $ 26,081 |
CONSOLIDATED STATEMENTS OF CO_2
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (Parenthetical) - USD ($) $ in Thousands | 12 Months Ended | ||
Jun. 30, 2021 | Jun. 30, 2020 | Jun. 30, 2019 | |
Other Income From Related Parties | $ 2,445 | $ 3,414 | $ 2,520 |
Research and Development Expense [Member] | |||
Research and development expenses related parties | 212 | 655 | 0 |
Integrated Solution Contracts [Member] | |||
Revenue from Related Parties | 1,446 | 227 | 1,323 |
Cost of Revenue from Related Parties | 1,860 | 1,400 | 0 |
Product [Member] | |||
Revenue from Related Parties | 8,186 | 3,003 | 10,287 |
Cost of Revenue from Related Parties | $ 1,198 | $ 177 | $ 706 |
CONSOLIDATED STATEMENTS OF CASH
CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands | 12 Months Ended | ||
Jun. 30, 2021 | Jun. 30, 2020 | Jun. 30, 2019 | |
Cash flows from operating activities: | |||
Net income | $ 89,338 | $ 79,326 | $ 125,539 |
Adjustments to reconcile net income to net cash provided by operating activities: | |||
Depreciation of property, plant and equipment | 9,959 | 8,483 | 7,879 |
Amortization of prepaid land leases | 454 | 384 | 264 |
Amortization of intangible assets | 316 | 300 | 311 |
Allowance for credit losses | 8,656 | 690 | 2,119 |
Loss (gain) on disposal of long-lived assets | (7) | (67) | 13 |
Impairment loss on property, plant and equipment | 0 | 17 | 0 |
Goodwill impairment charge | 0 | 35,767 | 11,623 |
Share of net income of equity investees | (604) | (3,131) | (404) |
Dividends received from an equity investee | 91 | 0 | 3,865 |
Gains on deconsolidation of subsidiaries where the Company retains an equity interest | 0 | 0 | (5,768) |
Gains on disposal of an investment of an equity investee | 0 | (5,763) | 0 |
Gains on disposal of an investment in securities | (3,323) | 0 | 0 |
Share-based compensation expenses | 9,724 | 410 | 238 |
Deferred income tax (benefit) expenses | (5,838) | 6,414 | (6,197) |
Accretion of convertible bond | 0 | 57 | 230 |
Fair value adjustments of a bifurcated derivative | 0 | 346 | |
Other income (expense), net | (6,724) | 0 | 0 |
Changes in operating assets and liabilities: | |||
Accounts receivable and retention | (88,854) | 30,894 | (33,782) |
Costs and estimated earnings in excess of billings | 3,049 | 3,186 | (2,757) |
Inventories | 4,657 | (6,474) | (3,773) |
Advances to suppliers | (1,253) | (4,745) | (5,357) |
Other receivables | 11,183 | (1,897) | 2,647 |
Prepaid expenses | (268) | (19) | 62 |
Due from related parties | 6,784 | 11,988 | 6,600 |
Accounts payable | 10,178 | 15,010 | (14,027) |
Deferred revenue | 31,432 | 1,825 | 10,836 |
Accruals and other payable | (966) | (1,663) | 11,488 |
Due to related parties | (1,915) | (1,819) | (1,494) |
Income tax payable | 514 | 3,335 | 1,740 |
Other tax payables | 2,700 | 2,616 | (11,720) |
Net cash provided by operating activities | 79,283 | 175,124 | 100,521 |
Cash flows from investing activities: | |||
Purchases of short-term investments | (147,237) | (426,846) | (256,328) |
Maturity of short-term investments | 443,095 | 242,174 | 245,880 |
Purchases of property, plant and equipment | (18,131) | (8,098) | (3,488) |
Prepayments for land lease | 0 | (7,099) | |
Proceeds from disposal of property, plant and equipment | 314 | 983 | 301 |
Investments made in equity investees | (9,459) | 0 | 0 |
Dividends received in excess of cumulative equity in earnings from an equity investee | 0 | 8,920 | |
Deconsolidation of subsidiary, ,net of cash disposed | 0 | (1,878) | |
Acquisition of a subsidiary, net of cash acquired | 0 | (251) | 0 |
Purchase of equity investments | 0 | (740) | |
Proceeds received from disposal of equity investments | 5,187 | 4,458 | 4,544 |
Cash prepaid for acquisition of a subsidiary | (9,406) | 0 | 0 |
Proceeds received from investment in equity securities without readily determinable fair value | 5,895 | 0 | 0 |
Net cash (used in) provided by investing activities | 270,258 | (187,580) | (9,888) |
Cash flows from financing activities: | |||
Proceeds from short-term bank loans | 0 | 2,371 | 5,908 |
Repayments of short-term bank loans | 0 | (4,243) | (6,875) |
Proceeds from long-term bank loans | 520 | 15,423 | 730 |
Repayments of long-term bank loans | (633) | (437) | (512) |
Capital contributions from subsidiaries' non-controlling interest shareholders | 0 | 2,139 | 1,456 |
Payment of dividends | (12,107) | (12,713) | (10,862) |
Principal repayment of convertible bond | 0 | (20,753) | 0 |
Proceeds from issuance of shares of a subsidiary | 2 | 0 | 0 |
Net cash used in financing activities | (12,218) | (18,213) | (10,155) |
Effect of foreign exchange rate changes on cash, cash equivalents and restricted cash | 39,127 | (8,621) | (9,400) |
Net increase (decrease) in cash, cash equivalents and restricted cash | 376,450 | (39,290) | 71,078 |
Cash, cash equivalents and restricted cash, beginning of year | 319,097 | 358,387 | 287,309 |
Cash, cash equivalents and restricted cash, end of year | 695,547 | 319,097 | 358,387 |
Reconciliation of cash, cash equivalents and restricted cash to the consolidated balance sheets: | |||
Cash and cash equivalents | 664,321 | 288,782 | 332,509 |
Current portion of restricted cash | 25,294 | 8,663 | 22,260 |
Non-current portion of restricted cash | 5,932 | 21,652 | 3,618 |
Total cash, cash equivalents and restricted cash | 695,547 | 319,097 | 358,387 |
Supplemental disclosures of cash flow information: | |||
Interest expense paid | 553 | 306 | 575 |
Income tax paid | 16,804 | 8,772 | 24,855 |
Supplemental disclosures of non-cash information: | |||
Acquisition of property, plant and equipment included in construction costs payable and accrued liabilities | 477 | 6,759 | 3,205 |
Acquisition of equity interest with non-cash consideration | 0 | $ 0 | |
Disposal of shares of a subsidiary | $ 0 | $ 4,110 |
CONSOLIDATED STATEMENTS OF STOC
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY - USD ($) $ in Thousands | Total | Ordinary shares [Member] | Additional Paid-in Capital [Member] | Statutory Reserves [Member] | Retained Earnings [Member] | Accumulated Other Comprehensive Income [Member] | Total Hollysys Automation Technologies Ltd. Stockholders' Equity [Member] | Noncontrolling Interest [Member] |
Balance at Jun. 30, 2018 | $ 842,353 | $ 60 | $ 223,396 | $ 45,970 | $ 578,079 | $ (5,453) | $ 842,052 | $ 301 |
Balance (in shares) at Jun. 30, 2018 | 60,342,099 | |||||||
Cumulative effect of change in accounting principle (Note 2) | 18,765 | 18,765 | 18,765 | |||||
Share-based compensation | 238 | 238 | 238 | |||||
Net income for the year | 125,539 | 125,261 | 125,261 | 278 | ||||
Appropriations to statutory reserves | 2,728 | (2,728) | ||||||
Dividend paid | (10,862) | (10,862) | (10,862) | |||||
Deconsolidation of a subsidiary | 1,273 | 1,273 | 1,273 | |||||
Capital contribution from subsidiaries' non-controlling interest shareholders | 1,456 | 1,456 | ||||||
Translation adjustments | (31,602) | (31,341) | (31,341) | (261) | ||||
Balance at Jun. 30, 2019 | 947,160 | $ 60 | 223,634 | 48,698 | 708,515 | (35,521) | 945,386 | 1,774 |
Balance (in shares) at Jun. 30, 2019 | 60,342,099 | |||||||
Issue of ordinary shares | $ 1 | (1) | ||||||
Issue of ordinary shares (in shares) | 195,000 | |||||||
Share-based compensation | 410 | 410 | 410 | |||||
Net income for the year | 79,326 | 79,396 | 79,396 | (70) | ||||
Appropriations to statutory reserves | 725 | (725) | ||||||
Dividend paid | (12,713) | (12,713) | (12,713) | |||||
Capital contribution from subsidiaries' non-controlling interest shareholders | 3,016 | 3,016 | ||||||
Translation adjustments | (28,313) | (27,996) | (27,996) | (317) | ||||
Balance at Jun. 30, 2020 | 988,886 | $ 61 | 224,043 | 49,423 | 774,473 | (63,517) | 984,483 | 4,403 |
Balance (in shares) at Jun. 30, 2020 | 60,537,099 | |||||||
Issue of ordinary shares | 1 | 1 | 1 | |||||
Issue of ordinary shares (in shares) | 830,238 | |||||||
Share-based compensation | 9,724 | 9,724 | 9,724 | |||||
Net income for the year | 89,338 | 89,709 | 89,709 | (371) | ||||
Appropriations to statutory reserves | 15,026 | (15,026) | ||||||
Dividend paid | (12,107) | (12,107) | (12,107) | |||||
Translation adjustments | 96,577 | 96,331 | 96,331 | 246 | ||||
Effect of change in accounting principle - ASC 326 | (30,451) | (30,451) | ||||||
Balance at Jun. 30, 2021 | $ 1,141,968 | $ 61 | $ 233,768 | $ 64,449 | $ 806,598 | $ 32,814 | $ 1,137,690 | $ 4,278 |
Balance (in shares) at Jun. 30, 2021 | 61,367,337 |
ORGANIZATION AND BUSINESS BACKG
ORGANIZATION AND BUSINESS BACKGROUND | 12 Months Ended |
Jun. 30, 2021 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
ORGANIZATION AND BUSINESS BACKGROUND | NOTE 1 - ORGANIZATION AND BUSINESS BACKGROUND Hollysys Automation Technologies Ltd. (“Hollysys” or the “Company”) was established under the laws of the British Virgin Islands (“BVI”) on February 6, 2006. As of June 30, 2021, the Company had subsidiaries incorporated in countries and jurisdictions including the People’s Republic of China (“PRC”), Singapore, Malaysia, Macau, Hong Kong, BVI, India, Qatar and Indonesia. The Company makes a determination at the inception of each arrangement whether an entity in which the Company has made an investment or in which the Company has other variable interests is considered a variable interest entity (“VIE”). The Company consolidates a VIE when it is deemed to be the primary beneficiary. The primary beneficiary of a VIE is the party that meets both of the following criteria: (i) has the power to make decisions that most significantly affect the economic performance of the VIE; and (ii) has the obligation to absorb losses or the right to receive benefits that in either case could potentially be significant to the VIE. Periodically, the Company determines whether any changes occurred requiring a reassessment of whether it is the primary beneficiary of a VIE. If the Company is not deemed to be the primary beneficiary in a VIE, the investment or other variable interests in a VIE is accounted for in accordance with applicable GAAP. In November 2015, CECL was established in Doha, Qatar, by CCPL, a wholly-owned subsidiary of the Company incorporated under the laws of Singapore, and a Qatar citizen as a nominee shareholder, with 49% and 51% of equity interest in CECL, respectively. Through a series of contractual arrangements signed in November 2015 and September 2016, CCPL is entitled to appoint a majority of the directors of CECL who have the power to direct the activities that significantly impact CECL’s economic performance. In addition, CCPL is entitled to 95% of the variable returns or loss from CECL’s operations. In accordance with ASC 810, Consolidation The following tables set forth the financial statement balances and amounts of the VIE that were included in the consolidated financial statements: June 30, 2020 2021 Current assets $ 9,708 $ 5,588 Non-current 183 37 Total assets 9,891 5,625 Current liabilities $ 6,919 $ 3,230 Total liabilities 6,919 3,230 Year ended June 30, 2020 2021 Net revenue $ 981 $ 46 Cost of revenue (1) (2,147 ) (2,177 ) Net profit 3,128 2,223 Net cash provided by (used in) operating activities 1,120 (451 ) (1) Cost of revenue is in credit side because of the reversal of warranties provision which was overprovided in previous years. As of June 30, 202 1 20 20 20 1 In July 2017, Bond Corporation Pte. Ltd (“BCPL”), a wholly-owned Singapore subsidiary of the Company, and a Malaysian citizen (the “Trustee”) entered into a trust deed, under which, 49.1% of BCPL’s equity interests in Bond M & E Sdn. Bhd. (“BMJB”), a Malaysian company, which previously was a 100% subsidiary of BCPL, was transferred to the Trustee. According to the trust deed, all of the beneficial interests in BMJB belong to BCPL and the Trustee shall hold the legal title of the transferred shares in trust for and act on behalf of BCPL absolutely. Any dividend, interest and other benefits received or receivable by the Trustee will be transferred to BCPL. The Trustee shall exercise the managerial rights and voting power in a manner directed by a prior written notice from BCPL. The Trustee shall be obligated to vote in the same manner as BCPL in the absence of any written notice. In addition, an undated Form of Transfer of Securities with the transferee’s name left blank was duly executed by the Trustee and delivered to BCPL. Therefore, BCPL can transfer the 49.1% of equity interests to any party at any time without further approval by the Trustee. Accordingly, the Company believes it holds all beneficial rights, obligation and the power of the 100% equity interest in BMJB, and therefore consolidates BMJB in its consolidated financial statements. The Company, its subsidiaries and the VIE, (collectively the “Group”) are principally engaged in the manufacture, sale and provision of integrated automation systems and services, mechanical and electrical solution services and installation services in the PRC, Southeast Asia and the Middle East. |
SUMMARY OF SIGNIFICANT ACCOUNTI
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 12 Months Ended |
Jun. 30, 2021 | |
Accounting Policies [Abstract] | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Basis of Presentation The consolidated financial statements are prepared in accordance with United States generally accepted accounting principles (“U.S. GAAP”). Principles of Consolidation The consolidated financial statements include the financial statements of the Company, its subsidiaries and a VIE. All inter-company transactions and balances between the Company, its subsidiaries, and the VIE are eliminated upon consolidation. The Company included the results of operations of acquired businesses from the respective dates of acquisition. Use of estimates The preparation of financial statements in conformity with US GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Management evaluates estimates, including those related to the expected total costs of integrated solutions contracts and service contracts, allowance for current expected credit losses, fair value of bifurcated derivative, fair value of the retained equity interest of a former subsidiary, warranties, valuation allowance of deferred tax assets, impairment of goodwill and other long-lived assets, goodwill related to the acquisition of Shandong Lukang Pharmaceutical Engineering Design Co., Ltd (“Shandong Lukang”), provision for loss contracts, incremental borrowing rate (“IBR”) for operating leases and net realizable value of inventory. Management’s estimates are based on historical experience and on various other assumptions that are believed to be reasonable, the results of which form the basis for making judgments about the carrying values of assets and liabilities. Actual results could differ materially from those estimates. Foreign currency translations and transactions The Company’s functional currency is the United States dollars (“US dollars” or “$”); whereas the Company’s subsidiaries and VIE use the primary currency of the economic environment in which their operations are conducted as their functional currency. According to the criteria of Accounting Standards Codification (“ASC”) Topic 830, Foreign currency matters The Company translates the assets and liabilities of its subsidiaries and VIE into US dollars using the rate of exchange prevailing at the balance sheet date, and the consolidated statements of comprehensive income are translated at average rates during the reporting period. Adjustments resulting from the translation of financial statements from the functional currency into US dollars are recorded in stockholders’ equity as part of accumulated other comprehensive income. Transactions dominated in currencies other than the functional currency are translated into functional currency at the exchange rates prevailing on the transaction dates, and the exchange gains or losses are reflected in the consolidated statements of comprehensive income for the reporting period. Transactions denominated in foreign currencies are measured into the functional currency at the exchange rates prevailing on the transaction dates. Foreign currency denominated financial assets and liabilities are re-measured at the exchange rates prevailing at the balance sheet date. Exchange gains and losses are included in earnings. “RMB” and “CNY” refer to Renminbi, the legal currency of China; “SGD” and “S$” refer to the Singapore dollar, the legal currency of Singapore; “US dollar,” “$” and “US$” refer to the legal currency of the United States; “MYR” refers to the Malaysian Ringgit, the legal currency of Malaysia; “AED” refers to the United Arab Emirates Dirham, the legal currency of United Arab Emirates; “HKD” refers to the Hong Kong dollar, the legal currency of Hong Kong; “MOP” refers to the Macau Pataca, the legal currency of Macau; “INR” refers to the Indian Rupee, the legal currency of India; and “QAR” refers to the Qatar Riyal, the legal currency of Qatar; “IDR” refers to Indonesia Rupiah, the legal currency of Indonesia; Business combinations The Company accounts for its business combinations using the purchase method of accounting in accordance with ASC Topic 805, Business Combinations non-controlling non-controlling The determination and allocation of fair values to the identifiable assets acquired, liabilities assumed and non-controlling Acquisition-related costs are recognized as general and administrative expenses in the consolidated statements of comprehensive income as incurred. Cash and cash equivalents Cash and cash equivalents consist of cash on hand and bank deposits, which are unrestricted as to withdrawal and use. All highly liquid investments that are readily convertible to known amounts of cash with original stated maturities of three months or less are classified as cash equivalents. Short-term investments Short-term investments consist of deposits placed with financial institutions with original maturity terms from four months to one year. As of June 30, 2021, $40,254, of short-term investments were placed in financial institutions in the PRC, Singapore, and Malaysia, respectively. As of June 30, 2020, of short-term investments were placed in financial institutions in the PRC, Singapore, Malaysia, respectively. Restricted cash Restricted cash mainly consists of the cash deposited in banks pledged for performance guarantees or bank loans. These cash balances are not available for use until these guarantees are expired or cancelled, or the loans are repaid. Revenue recognition Integrated solutions contracts Revenues generated from designing, building, and delivering customized integrated industrial automation systems are recognized over time as the customer simultaneously receives and consumes the benefits provided by the Company’s performance as it occurs or because the customers control the related asset as it is created or enhanced. Revenue generated from mechanical and electrical solution contracts for the construction or renovation of buildings, rail or infrastructure facilities are also recognized over time as the customer simultaneously receives and consumes the benefits provided by the Company’s performance as it occurs or because the customers control the related asset as it is created or enhanced. In accordance with ASC Topic 606, Revenue from Contract with Customers cost-to-cost The Company reviews and updates the estimated total costs of the contracts at least annually. Revisions to contract revenue and estimated total costs of the contracts are made in the period in which the facts and circumstances that cause the revision become known and are accounted for as changes in estimates. Unapproved change orders are considered claims. Claims are recognized only when they have been awarded by customers. Excluding the impact of change orders, if the estimated total costs of integrated solutions contracts, which were revised during the years ended June 30, 2019, 2020 and 2021, had been used as a basis of recognition of integrated solutions contracts revenue since the contract commencement, net income for the years ended June 30, 2019, 2020 and 2021 would have been decreased by respectively; basic net income per share for years ended June 30, 2019, 2020 and 2021 would have been decreased by respectively; and diluted net income per share for the years ended June 30, 2019, 2020 and 2021, would have decreased by , The Company combines a group of contracts as one project if they are closely related and are, in substance, parts of a single project with an overall profit margin. The Company segments a contract into several projects, when they are of different business substance, for example, with different business negotiation, solutions, implementation plans and margins. Revenue in excess of billings on the contracts is recorded as costs and estimated earnings in excess of billings. Billings in excess of revenues recognized on the contracts are recorded as deferred revenue until the above revenue recognition criteria are met. Recognition of accounts receivable and costs and estimated earnings in excess of billings are discussed below. The Company generally recognizes 100% of the contractual revenue when the customer acceptance has been obtained and no further major costs are estimated to be incurred, and normally this is also when the warranty period commences. Revenues are presented net of value-added tax collected on behalf of the government. Product sales The Company’s products mainly include hardware and software. Revenue generated from sales of products is recognized when control of promised goods is transferred to the Company’s customers in an amount of consideration to which the Company expects to be entitled to in exchange for those goods. Revenues are presented net of value-added tax collected on behalf of the government. Service rendered The Company mainly provides the following services: The Company provides maintenance service which is generally completed onsite at the customers’ premises. Revenue is recognized over time by using the cost-to-cost The Company also separately sells extended warranties to their integrated solution customers for a fixed period. Such arrangements are negotiated separately from the corresponding integrated solution system and are usually entered into upon the expiration of the warranty period attached to the integrated solutions contracts. During the extended warranty period, the Company is responsible for addressing issues related to the system. Part replacement is not covered in such services. The Company uses time elapsed to measure the progress toward complete satisfaction of the performance obligation and recognizes revenue ratably over the contractual term. Revenues are presented net of value-added tax collected on behalf of the government. Excluding the impact of change orders, if the estimated total costs of service contracts, which were revised during the year ended June 30, 2021, had been used as a basis of recognition of service contract revenue since the contract commencement, net income for the years ended June 30, 2019, 2020 and 2021 would have been decreased by , and $9,735, respectively; basic net income per share for years ended June 30, 2019, 2020 and 2021 would have been decreased by , and $0.16, respectively; and diluted net income per share for the years ended June 30, 2019, 2020 and 2021, would have decreased by , and $0.16, respectively. Revisions to the estimated total costs for the years ended June 30, 2019, 2020 and 2021 were made in the ordinary course of business. Contract assets Contract assets include amounts that represent the rights to receive payment for goods or services that have been transferred to the customer, with the rights conditional upon something other than the passage of time. Accordingly, the Company includes the following in the contract assets: (i) unbilled amounts resulting from revenue recognized exceeding amounts billed to customers for integrated solutions contracts and maintenance service contracts using the cost-to-cost Performance of the integrated solutions contracts will often extend over long periods and the Company’s right to receive payments depends on its performance in accordance with the contractual terms. The Company has different billing practices for its PRC subsidiaries, overseas subsidiaries, and the VIE (Concord and Bond Groups). For the Company’s PRC subsidiaries, billings are issued based on milestones specified in the contracts negotiated with customers. In general, there are four milestones: 1) project commencement; 2) system manufacturing and delivery; 3) installation, trial-run For Concord and Bond Groups, billing claims rendered are subject to the further approval and certification of the customers or their designated consultants. Payments are made to Concord or Bond Groups based on the certified billings according to the payment terms mutually agreed between the customers and Concord or Bond Groups. Certain amounts are retained by the customer and payable to Concord and Bond Groups upon the issuance of the final completion certificate and completion of the defects liability period. The retained amounts are recorded as accounts receivable retention. Contract liabilities Contract liabilities include the amounts that reflect obligations to provide goods or services for which payment has been received. Contract liabilities are presented in the balance sheet as deferred revenue. The Company receives prepayments for integrated solutions contracts, product sales and service contracts for goods or services to be provided in the future. Prepayments received are recorded as deferred revenue, which is recognized as revenue based on the revenue recognition policies disclosed above for integrated solutions contracts, product sales and services rendered. Accounts receivable, costs and estimated earnings in excess of billings and accounts receivable retention The carrying value of the Company’s accounts receivable, costs and estimated earnings in excess of billings and accounts receivable retention, net of the allowance for credit losses, represents their estimated net realizable value. An allowance for doubtful accounts is recognized when it is probable that the Company will not collect the amount and is written off in the period when deemed uncollectible. The Company periodically reviews the status of contracts and decides how much of an allowance for doubtful accounts should be made based on factors surrounding the credit risk of customers and historical experience. The Company does not require collateral from its customers and does not charge interest for late payments by its customers. Inventories Inventories are composed of raw materials, work in progress, purchased and manufactured finished goods and low value consumables. Inventories are stated at the lower of cost and net realizable value. The Company uses the weighted average cost method as its inventory costing method. The Company assesses the lower of cost and net realizable value for non-saleable, non-saleable, work-in-process Warranties Warranties represent a major term under integrated solutions contracts and maintenance service contracts, which will last, in general, for one to three years or otherwise specified in the terms of the contract. The Company accrues warranty liabilities under a service contract as a percentage of revenue recognized, which is derived from its historical experience, in order to recognize the warranty cost for the related contract throughout the contract period. Property, plant and equipment, net Property, plant and equipment, other than construction in progress, are recorded at cost and are stated net of accumulated depreciation and impairment, if any. Depreciation expense is determined using the straight-line method over the estimated useful lives of the assets as follows: Buildings 30 - 50 years Machinery 5 - 10 Software 3 - 10 Vehicles 5 - 10 Electronic and other equipment 3 - 10 Construction in progress represents uncompleted construction work of certain facilities which, upon completion, management intends to hold for production purposes. In addition to costs under construction contracts, other costs directly related to the construction of such facilities, including duty and tariff, equipment installation and shipping costs, and borrowing costs are capitalized. Depreciation commences when the asset is placed in service. Maintenance and repairs are charged directly to expenses as incurred, whereas betterment and renewals are capitalized in their respective accounts. When an item is retired or otherwise disposed of, the cost and applicable accumulated depreciation are removed and the resulting gain or loss is recognized for the reporting period. Prepaid land leases, net Prepaid land lease payments, for the land use right of four parcels of land in the PRC, three parcels of leasehold land in Malaysia and one parcel of leasehold land in Singapore, are initially stated at cost and are subsequently amortized on a straight-line basis over the lease terms of 49 to 88 years. Intangible assets, net Intangible assets are carried at cost less accumulated amortization and any impairment. Intangible assets acquired in a business combination are recognized initially at fair value at the date of acquisition. Intangible assets are amortized using a straight-line method. The estimated useful lives for the intangible assets are as follows: Category Estimated useful life Patents and copyrights 5 - 10 years Residual values are considered nil. Goodwill Goodwill represents the excess of the purchase price over the estimated fair value of net tangible and identifiable intangible assets acquired. The Company assesses goodwill for impairment in accordance with ASC subtopic 350-20, Intangibles – Goodwill and Other 350-20”), 350-20. The Company’s goodwill outstanding at June 30, 2021 was related to the acquisitions of Beijing Hollysys Industrial Software Company Ltd (“Hollysys Industrial Software”) and Shandong Lukang. The Company has the option to assess qualitative factors first to determine whether it is necessary to perform the two-step 350-20. more-likely-than-not two-step two-step The Company elected to assess goodwill for impairment using the two-step process for Concord Group for the year ended June 30, 2019, with the assistance of a third-party appraiser. The judgment in estimating the fair value of Concord Group includes forecasts of the amount and timing of expected future cash flows, which are based on management’s best estimates of forecasted revenue, gross profit, operating expenses, future capital expenditures and working capital levels, as well as the discount rate, which is determined using the Weighted Average Cost of Capital and Capital Asset Pricing Model approach and the selection of comparable companies operating in similar businesses. The carrying amount of Concord Group exceeded its fair value as of June 30, 2019, and a goodwill impairment charge of test (note 10). Due to downward revision of forecasted future profits, the Company determined it was more likely than not that an impairment existed within the Bond Group reporting unit and performed a quantitative goodwill impairment test as of June 30, 2020. The Company performed the two-step Significant management judgment and estimation are involved in forecasting the amount and timing of expected future cash flows and the underlying assumptions used in the discounted cash flow approach to determine the fair value of the Bond Group reporting unit. In particular, the fair value estimate is sensitive to significant assumptions, such as forecasted revenue growth rates, gross profit margins and discount rates, which are determined using the Weighted Average Cost of Capital and Capital Asset Pricing Model approach and the selection of comparable companies operating in similar businesses. These significant assumptions are forward looking and could be materially affected by future market or global economic conditions. As a result, the Company recorded a full impairment charge of There are uncertainties surrounding the amount and timing of future expected cash flows as they may be impacted by negative events such as uncertainty of the impact of COVID-19 Impairment of long-lived assets other than goodwill The Company evaluates its long-lived assets or asset groups including acquired intangibles with finite lives for impairment whenever events or changes in circumstances (such as a significant adverse change to market conditions that will impact the future use of the assets) indicate that the carrying amount of a group of long-lived assets may not be fully recoverable. When these events occur, the Company evaluates the impairment by comparing the carrying amount of the assets to future undiscounted cash flows expected to result from the use of the assets and their eventual disposition. If the sum of the expected undiscounted cash flows is less than the carrying amount of the assets, the Company recognizes an impairment loss based on the excess of the carrying amount of the asset group over its fair value, generally based upon discounted cash flows or quoted market prices. Shipping and handling costs All shipping and handling fees charged to customers are included in net revenue. Shipping and handling costs incurred are included in cost of integrated solutions contracts and/or costs of products sold as appropriate. Income taxes The Company follows the liability method of accounting for income taxes. Under this method, deferred tax assets and liabilities are determined based on the differences between the financial reporting and tax bases of assets and liabilities using enacted tax rates that will be in effect in the period in which the differences are expected to reverse. The Company records a valuation allowance to offset deferred tax assets if based on the weight of available evidence, it is more-likely-than-not The Company adopted ASC 740, Income Taxes , Research and development costs Research and development costs consist primarily of salaries, bonuses and benefits for research and development personnel. Research and development costs also include travel expenses of research and development personnel as well as depreciation of hardware equipment and software tools and other materials used in research and development activities. Research and development costs are expensed as incurred. Software development costs are also expensed as incurred as the costs qualifying for capitalization have been insignificant for the periods presented. VAT refunds and government subsidies Pursuant to the laws and regulations of the PRC, the Company remits 13%-16% of its sales as value added tax (“VAT”), and then is entitled to a refund of the portion of the Company’s actual VAT burden that exceeds the levied on all sales containing internally developed software products. VAT refunds are recognized in the consolidated statements of comprehensive income when cash refunds or the necessary approval from the tax authority has been received. Certain subsidiaries of the Company located in the PRC receive government subsidies from local PRC government agencies. Government subsidies are recognized in the consolidated statements of comprehensive income when the attached conditions have been met. Government grants received for the years ended June 30, 2019, 2020 and 2021 amounted to were included as a credit to operating expenses in the consolidated statements of comprehensive income for the years ended June 30, 2019, 2020 and 2021, respectively. Appropriations to statutory reserve Under the corporate law and relevant regulations in the PRC, all of the subsidiaries of the Company located in the PRC are required to appropriate a portion of their their after-tax after-tax Concord Corporation Pte. Ltd, Dubai Branch (“CCPL Dubai”) and Concord Electrical Contracting Ltd., a Qatar company (“CECL”). Segment reporting In accordance with ASC 280, Segment Reporting Comprehensive income Comprehensive income is defined as the changes in equity of the Company during a period from transactions and other events and circumstances excluding transactions resulting from investments by owners and distributions to owners. In accordance with ASC 220, Comprehensive Income Investments in equity investees and equity securities The Company accounts for its equity investments under the equity method when the Company has rights and ability to exercise significant influence over the investees. The investments in entities over which the Company has the ability to exercise significant influence are accounted for using the equity method. Significant influence is generally considered to exist when the Company has an ownership interest the investee between 20% and 50%. Other factors, such as representation on the investee’s board of directors and the impact of commercial arrangements, are also considered in determining whether the equity method of accounting is appropriate. Under the equity method, original investments are recorded at cost and adjusted by the Company’s share of undistributed earnings or losses of these entities, by the amortization of any basis difference between the amount of the Company’s investment and its share of the net assets of the investee, and by dividend distributions or subsequent investments. When dividends from an investee exceed the carrying amount of an equity method investment, the excess distribution is recognized as a gain and reported as share of net income of equity investees, net in the consolidated statements of comprehensive income when the Company is not liable for the obligations of the investee nor otherwise committed to provide financial support. In such cases, subsequent equity method earnings are not recorded until subsequent earnings equal the gain recorded. Unrealized inter-company profits and losses related to equity investees are eliminated. An impairment charge, being the difference between the carrying amount and the fair value of the equity investee, is recognized in the consolidated statements of comprehensive income when the decline in value is considered other than temporary. The Company will discontinue applying the equity method if an investment (plus additional financial support provided to the investee, if any) has been reduced to zero. When the Company has other investments in its equity-method investee and is not required to advance additional funds to that investee, the Company would continue to report its share of equity method losses in its consolidated statement of comprehensive income after its equity-method investment has been reduced to zero, to the extent of and as an adjustment to the adjusted basis of its other investments in the investee. Such losses are first applied to those investments of a lower liquidation preference before being further applied to the investments of a higher liquidation preference. The Company uses the cumulative earnings approach to classify distributions received from equity investees. Under this approach, distributions received from equity investees are presumed to be a return on the investment and are classified as cash inflows from operating activities unless the distributions received exceed cumulative equity in earnings recognized by the investor. In such case, the excess is considered a return of investment and is classified as cash inflows from investing activities. For equity investments other than those accounted for under the equity method or those that result in consolidation of the investee, the Company measures equity investments at fair value and recognizes any changes in fair value in net income. However, for equity investments that do not have readily determinable fair values and do not qualify for the existing practical expedient in ASC 820 to estimate fair value using the net asset value per share (or its equivalent) of the investment, the Company has elected to measure those investments at cost, less any impairment, plus or minus changes resulting from observable price changes in orderly transactions for the identical or a similar investment of the same issuer. At each reporting date, the Company is required to make a qualitative assessment as to whether equity investments without a readily determinable fair value for which the measurement alternative is elected is impaired. In the event that a qualitative assessment indicates that the investment is impaired and the fair value of the investment is less than the carrying value, the carrying value is written down to its fair value. A variety of factors are considered when determining if a decline in fair value is below carrying value, including, among others, the financial condition and prospects of the investee. Capitalization of interest Interest incurred on borrowings for the Company’s construction of facilities and assembly line projects during the active construction period is capitalized. The capitalization of interest ceases once a project is substantially complete. The amount to be capitalized is determined by applying the weighted-average interest rate of the Company’s outstanding borrowings to the average amount of accumulated capital expenditures for assets under construction during the year and is added to the cost of the underlying assets and amortized over their respective useful lives. Income per share Income per share is computed in accordance with ASC 260, Earnings Per Share Share-based compensation The Company accounts for share-based compensation in accordance with ASC 718, Compensation-Stock Compensation For share-based awards that are subject to performance-based vesting conditions in addition to time-based vesting, the Company recognizes the estimated grant-date fair value of performance-based awards, net of estimated forfeitures, as share-based compensation expense over the vesting period based upon the Company’s determination of whether it is probable that the performance-based criteria will be achieved. At each reporting period, the Company reassesses the probability of achieving the performance-based criteria. Determining whether the performance-based criteria will be achieved involves judgment, and the estimate of share-based compensation expense may be revised periodically based on changes in the probability of achieving the performance-based criteria. Revisions are reflected in the period in which the estimate is changed. If the performance-based criteria are not met, no share-based compensation expense is recognized, and, to the extent share-based compensation expense was previously recognized, such share-based compensation expense is reversed. Fair value measurements The Company complies with ASC 820, Fair Value Measurements and Disclosures Level 1 - Quoted prices in active markets for identical assets or liabilities. Level 2 - Inputs other than Level 1 that are observable, either directly or indirectly, such as quoted prices for similar assets or liabilities; quoted prices in markets that are not active; or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities. Level 3 - Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities. Classification within the hierarchy is determined based on the lowest level of input that is significant to the fair value measurement. ASC 820 describes three main approaches to measuring the fair value of assets and liabilities: (1) market approach; (2) income approach and (3) cost approach. The market approach uses prices and other relevant information generated from market transactions involving identical or comparable assets or liabilities. The income approach uses valuation techniques to convert future amounts to a single present value amount. The measurement is based on the value indicated by current market expectations about those future amounts. The cost approach is based on the amount that would currently be required to replace an asset. Concentration of risks Concentration of credit risk Assets that potentially subject the Company to a significant concentration of credit risk primarily consist of cash and cash equivalents, short-term investments, restricted cash, accounts receivable, costs and estimated earnings in excess of billings, accounts receivable retention, other receivables and amounts due from related parties. The maximum exposure of such assets to credit risk is their carrying amounts as of the balance sheet date. As of June 30, 2021, substantially all of the Company’s cash and cash equivalents and short-term The Company has no customer that individually comprised 10% or more of the outstanding balance of accounts receivable as of June 30, 20 20 1 Concentration of business and economic risk A majority of the Company’s net revenue and net income is derived in the PRC. The Company’s operations may be adversely affected by significant political, economic and social uncertainties in the PRC. Although the PRC government has been pursuing economic reform policies for more than 20 years, no assurance can be given that the PRC government will continue to pursue such policies or that such policies may not be significantly altered, especially in the event of a change in leadership, social or political disruption or unforeseen circumstances affecting the PRC’s political, economic and social conditions. There is also no guarantee that the PRC government’s pursuit of economic reforms will be consistent |
INVENTORIES
INVENTORIES | 12 Months Ended |
Jun. 30, 2021 | |
Inventory Disclosure [Abstract] | |
INVENTORIES | NOTE 3 - INVENTORIES Components of inventories are as follows: June 30, 2020 2021 Raw materials $ 18,307 $ 23,469 Work in progress 17,561 12,165 Finished goods 12,342 12,278 $ 48,210 $ 47,912 |
ACCOUNTS RECEIVABLE
ACCOUNTS RECEIVABLE | 12 Months Ended |
Jun. 30, 2021 | |
Receivables [Abstract] | |
ACCOUNTS RECEIVABLE | NOTE 4 - ACCOUNTS RECEIVABLE June 30, 2020 2021 Notes receivable $ 27,059 $ 54,830 Accounts receivable 257,008 342,862 Allowance for credit losses (41,618 ) (66,839 ) $ 242,449 $ 330,853 The movements in allowance for credit losses are as follows: June 30, 2019 2020 2021 Balance at the beginning of year $ 49,094 $ 47,162 $ 41,618 Adoption of ASU 2016-13 — — 16,284 Additions 4,318 178 7,749 Deconsolidation of a subsidiary (2,733 ) — — Written off (1,959 ) (4,399 ) (3,965 ) Translation adjustment (1,558 ) (1,323 ) 5,153 Balance at the end of year $ 47,162 $ 41,618 $ 66,839 |
COSTS AND ESTIMATED EARNINGS IN
COSTS AND ESTIMATED EARNINGS IN EXCESS OF BILLINGS | 12 Months Ended |
Jun. 30, 2021 | |
COSTS AND ESTIMATED EARNINGS IN EXCESS OF BILLINGS | |
COSTS AND ESTIMATED EARNINGS IN EXCESS OF BILLINGS | NOTE 5 - COSTS AND ESTIMATED EARNINGS IN EXCESS OF BILLINGS June 30, 2020 2021 Contract costs incurred plus estimated earnings $ 1,046,803 $ 988,496 Less: Progress billings (853,774 ) (779,955 ) Cost and estimated earnings in excess of billings 193,029 208,541 Less: Allowance for credit losses (6,150 ) (11,835 ) $ 186,879 $ 196,706 The movements in allowance for credit losses are as follows: June 30, 2019 2020 2021 Balance at the beginning of year $ 9,929 $ 6,981 $ 6,150 Adoption of ASU 2016-1 3 — — 3,111 Additions (reversals) (2,149 ) (651 ) 1,758 Deconsolidation of a subsidiary (465 ) — — Translation adjustments (334 ) (180 ) 816 Balance at the end of year $ 6,981 $ 6,150 $ 11,835 |
REVENUE FROM CONTRACTS WITH CUS
REVENUE FROM CONTRACTS WITH CUSTOMERS | 12 Months Ended |
Jun. 30, 2021 | |
REVENUE FROM CONTRACTS WITH CUSTOMERS | |
REVENUE FROM CONTRACTS WITH CUSTOMERS | NOTE 6 - REVENUE FROM CONTRACTS WITH CUSTOMERS Remaining Unsatisfied Performance Obligations (“RUPO”) As of June 30, 2021, the Company’s backlog relating to unsatisfied (or partially unsatisfied) performance obligations in contracts with its customers was $685.0 million. The Company expects to recognize the majority of its remaining performance obligations as revenue within the next three years. Disaggregation of revenues The Company assesses revenues based upon the nature or type of goods or services it provides and the geographic location of the related businesses. The geographic locations are consistent with the reportable segments. For more information on the reportable segments, see Note 24, “Segment Reporting”. The following table present disaggregated revenue information: Year ended June 30, 2021 PRC Non-PRC Total Integrated solutions contracts revenue $ 385,592 74,588 460,180 Product sales 28,200 467 28,667 Maintenance service revenue 101,081 241 101,322 Extended warranty service revenue 3,297 — 3,297 Total $ 518,170 75,296 593,466 Contract assets and contract liabilities Contract assets include amounts that represent the rights to receive payment for goods or services that have been transferred to the customer, with the rights conditional upon something other than the passage of time. Accordingly, the Company includes the following in the contract assets: (i) unbilled amounts resulting from revenue recognized exceeding amounts billed to customers for integrated solutions contracts and maintenance service contracts using the cost-to-cost Contract liabilities include the amounts that reflect obligations to provide goods or services for which payment has been received. Contract liabilities are presented in the consolidated balance sheets as deferred revenue. These contract assets and liabilities are calculated on a contract-by-contract Contract assets and contract liabilities are summarized below: June 30, 2020 June 30, 2021 Contract assets, current $ 194,511 202,462 Contract assets, non-current 7,026 5,627 Contract liabilities 139,242 185,596 The increase in contract assets was primarily due to timing of revenue recognized relative to its billings. The increase in contract liabilities was primarily due to the timing of contractual milestones. No other factors materially impacted the change in the contract liabilities balance. |
PROPERTY, PLANT AND EQUIPMENT
PROPERTY, PLANT AND EQUIPMENT | 12 Months Ended |
Jun. 30, 2021 | |
PROPERTY, PLANT AND EQUIPMENT | |
PROPERTY, PLANT AND EQUIPMENT | NOTE 7 - PROPERTY, PLANT AND EQUIPMENT A summary of property, plant and equipment is as follows: June 30, 2020 2021 Buildings $ 67,520 $ 73,617 Machinery 12,941 15,110 Software 14,222 16,294 Vehicles 4,675 4,860 Electronic and other equipment 36,647 41,154 Construction in progress 8,553 22,434 $ 144,558 $ 173,469 Less: Accumulated depreciation and impairment (66,508 ) (79,423 ) $ 78,050 $ 94,046 Buildings with a total carrying value of $2,854 and $2,888 were pledged to secure lines of credits from various banks in Singapore and Malaysia as of June 30, 2020 and 2021, respectively (note 13). Buildings and vehicles with a total carrying value of $1,178 and $1,168 were pledged to secure long-term bank loans as of June 30, 2020 and 2021, respectively (note 14). Construction in progress consists of capital expenditures and capitalized interest charges related to the construction of facilities and assembly line projects and the expenditures related to the Company’s information system constructions. The depreciation expenses for the years ended June 30, 2019, 2020 and 2021 were $7,879, $8,483 and $9,959, respectively. Assets leased to others under operating leases The Company has entered into operating lease contracts related to certain buildings owned with carrying amounts as shown below: June 30, 2020 2021 Buildings leased to others - at original cost $ 21,467 $ 23,491 Less: Accumulated depreciation (6,605 ) (7,950 ) Buildings leased to others - net $ 14,862 $ 15,541 |
PREPAID LAND LEASES
PREPAID LAND LEASES | 12 Months Ended |
Jun. 30, 2021 | |
PREPAID LAND LEASES | |
PREPAID LAND LEASES | NOTE 8 - PREPAID LAND LEASES A summary of prepaid land leases is as follows: June 30, 2020 2021 Prepaid land leases $ 18,681 $ 20,200 Less: Accumulated amortization (2,939 ) (3,632 ) $ 15,742 $ 16,568 The amortization for the years ended June 30, 2019, 2020 and 2021 was $ , $ and $ , respectively. The annual amortization of prepaid land leases for each of the five succeeding years is as follows: Year ending June 30, 2022 $ 419 2023 419 2024 419 2025 419 2026 419 |
INTANGIBLE ASSETS, NET
INTANGIBLE ASSETS, NET | 12 Months Ended |
Jun. 30, 2021 | |
INTANGIBLE ASSETS, NET | |
INTANGIBLE ASSETS, NET | NOTE 9 - INTANGIBLE ASSETS, NET June 30, 2020 2021 Gross Accumulated Net Gross Accumulated Net Patents and copyrights $ 2,620 (907 ) 1,713 $ 2,867 (1,468 ) 1,399 The amortization expenses for the years ended June 30, 2019, 2020 and 2021 were $311, $300 and $316, respectively. The annual amortization expense relating to the existing intangible assets for the five succeeding years is as follow: Year ending June 30, 2022 $ 459 2023 459 2024 301 2025 132 2026 — |
GOODWILL
GOODWILL | 12 Months Ended |
Jun. 30, 2021 | |
GOODWILL | |
GOODWILL | NOTE 10 - GOODWILL The changes in the carrying amount of goodwill are as follows: Operating segment Mechanical and Industrial Total Balance as of July 1, 2019 $ 36,468 586 $ 37,054 Goodwill upon acquisition — 958 958 Goodwill impairment charge (35,767 ) — (35,767 ) Translation adjustment (701 ) (84 ) (785 ) Balance as of June 30 $ — 1,460 $ 1,460 Translation adjustment — 138 138 Balance as of June 30, 2021 $ — 1,598 $ 1,598 Bond Group, as a component of the mechanical and electrical solutions operating segment, is considered to be a reporting unit for goodwill impairment purposes as Bond Group constitutes a business for which discrete financial information is available and segment management regularly reviews the operating results of Bond Group. The amount of goodwill allocated to Bond Group was $35,767 as of June 30, 2020, before any impairment charges. The Company performed the two-step quantitative goodwill impairment test with the assistance of an independent third-party appraiser and estimated the fair value of the reporting unit using a discounted cash flow approach. As a result, the Company recorded a full impairment charge of US$35,767 attributable to the Bond Group reporting unit due to downward revision of forecasted future profits. Management’s judgment and estimation is involved in forecasting the amount and timing of expected future cash flows and the underlying assumptions used in the discounted cash flow approach to determine the fair value of the Bond Group reporting unit. In particular, the fair value estimate was sensitive to significant assumptions, such as forecasted revenue growth rates, gross profit margins and discount rates. These significant assumptions are forward looking and could be materially affected by future market or global economic conditions. The Company performed qualitative assessments with respect to Hollysys Industrial Software and Shandong Lukang, to determine if it is more likely than not that the fair values of Hollysys Industrial Software and Shandong Lukang are less than their carrying amounts. By identifying the most relevant drivers of fair value and significant events, and weighing the identified factors, the Company concluded that it was not more-likely-than-not that the fair value of these reporting units would be less than their carrying amounts as of June 30, 2021. Therefore, no further impairment testing for Hollysys Industrial Software and Shandong Lukang was required. |
EQUITY INVESTMENTS
EQUITY INVESTMENTS | 12 Months Ended |
Jun. 30, 2021 | |
EQUITY INVESTMENTS | |
EQUITY INVESTMENTS | NOTE 11 - EQUITY INVESTMENTS Investments in equity inv estees The following long-term investments were accounted for under the equity method as of June 30, 2020 and 2021 as indicated: June 30, 2020 Interest Long-term Share of Disposal Advance Total Equity method Beijing Hollycon Medicine & Technology Co., Ltd. 30.00 % $ 21,816 4,069 — — 25,885 Beijing Hollysys Electric Motor Co., Ltd. 40.00 % 749 5,263 — — 6,012 Beijing IPE Biotechnology Co., Ltd. 22.02 % 1,395 — (1,395 ) — — China Techenergy Co., Ltd. 40.00 % — 7,919 — — 7,919 Ningbo Hollysys Intelligent Technologies Co., Ltd. 40.00 % 3,993 (3,993 ) — — Hunan LingXiang Maglev Technology Co., Ltd. 19.00 % 1,415 (330 ) — — 1,085 Beijing AIRmaker Technology Co., Ltd. 20.00 % 141 (15 ) — — 126 Southcon Development Sdn Bhd. 30.00 % 211 (105 ) — — 106 Beijing Hollysys Machine Automation Co., Ltd. 30.00 % 424 (424 ) — — — Beijing Jing Yi Intelligent Technologies Innovation Center Co., Ltd. 46.00 % — — — — — $ 30,144 12,384 (1,395 ) — 41,133 June 30, 2021 Interest Long-term Share of Disposal Advance Total Equity method Beijing Hollycon Medicine & Technology Co., Ltd. 30.00 % $ 23,874 5,741 — — 29,615 Beijing Hollysys Electric Motor Co., Ltd. 40.00 % 820 6,677 — — 7,497 Suqian Runhe Emerging Industry Investment Center (limited partnership) 29.97 % 9,754 (163 ) — — 9,591 China Techenergy Co., Ltd. 40.00 % — 11,811 — — 11,811 Ningbo Hollysys Intelligent Technologies Co., Ltd. 40.00 % 4,369 (4,369 ) — — Hunan LingXiang Maglev Technology Co., Ltd. 17.67 % 1,548 (141 ) — — 1,407 Beijing AIRmaker Technology Co., Ltd. 20.00 % 155 (18 ) — — 137 Southcon Development Sdn Bhd. 30.00 % 219 (111 ) — — 108 Beijing Hollysys Machine Automation Co., Ltd. 30.00 % 464 (464 ) — — — Beijing Jing Yi Intelligent Technologies Innovation Center Co., Ltd. 46.00 % — — — — — 41,203 18,963 — — 60,166 Disposal of Beijing IPE Biotechnology Co., Ltd. (“Beijing IPE”) In May 2019, the Company entered into an agreement to dispose all of its 22.02% interest in Beijing IPE for cash considerations of $9,087. The disposal transaction was completed in September 2019, and a disposal gain of $5,763 was recognized under the caption gains on disposal of an investment in an equity investee in the consolidated statements of comprehensive income for the year ended June 30, 2020. Deconsolidation of Beijing Hollysys Intelligent Technologies Co., Ltd. (“Hollysys Intelligent”) and equity investment in Ningbo Hollysys Intelligent Technologies Co Ltd. (“Ningbo Hollysys”) In June 2018, Ningbo Hollysys was established with a registered capital of RMB250,000 (equivalent to $38,060) and no capital contributions were made. In August 2018, the Company agreed to transfer 100% of their equity interest in Hollysys Intelligent, a wholly owned subsidiary, to Ningbo Hollysys in exchange for a 40% equity interest in Ningbo Hollysys. Upon the transfer of the equity interest, the Company lost control of Hollysys Intelligent and deconsolidated the subsidiary. The Company with the assistance of an independent third-party appraiser, determined the fair value of the consideration received and the retained equity interest in Hollysys Intelligent through its 40% equity interest in Ningbo Hollysys to be $4,110, which was measured using a discounted cash flow approach which involves significant unobservable inputs (Level 3), such as the amount and timing of future expected cash flows, terminal growth rate and discount rate. A disposal gain of $5,768 was recorded in the consolidated statement of comprehensive income for the year ended June 30, 2019. T . T Hollysys Intelligent held a 25% equity interest in Beijing Hollysys Digital Technology Co., Ltd. (“Hollysys Digital”) and a 60% equity interest in Shenzhen Hollysys Intelligent Technologies Co., Ltd. (“Shenzhen Hollysys”) as of June 30, 2018. As discussed above, the Company lost control of Hollysys Intelligent in August 2018, therefore, the related interests in Hollysys Digital and Shenzhen Hollysys were also disposed. Investments in equity securities without readily determinable fair values Investments in equity securities without readily determinable fair value were accounted for as cost method investments prior to adopting ASC 321. As of June 30, 2020 and 2021, the carrying amounts of investments in equity securities without readily determinable fair values for which the measurement alternative was elected were $4,640 and $2,622 , |
WARRANTY LIABILITIES
WARRANTY LIABILITIES | 12 Months Ended |
Jun. 30, 2021 | |
WARRANTY LIABILITIES | |
WARRANTY LIABILITIES | NOTE 12 - WARRANTY LIABILITIES June 30, 2020 2021 Beginning balance $ 12,116 $ 10,064 Expense accrued 2,309 4,431 Expense incurred (4,027 ) (5,639 ) Translation adjustment (334 ) 695 $ 10,064 $ 9,551 Less: Current portion of warranty liabilities (6,604 ) (5,902 ) Long-term $ 3,460 $ 3,649 |
SHORT-TERM BANK LOANS
SHORT-TERM BANK LOANS | 12 Months Ended |
Jun. 30, 2021 | |
SHORT-TERM BANK LOANS | |
SHORT-TERM BANK LOANS | NOTE 13 - SHORT-TERM BANK LOANS For the years ended June 30, 2020, and 2021, the Company had no outstanding short-term bank borrowings. For the years ended June 30, 2019, 2020, and 2021, interest expenses on short-term bank loans amounted to $110, $37 and $nil, respectively. As of June 30, 2020, the Company had available lines of credit from various banks in the PRC, Singapore and Malaysia amounting to $299,277, of which $47,694 was utilized and $251,583 was available for use. These lines of credit were secured by the pledge of restricted cash and buildings with a carrying value of $9,627 and $2,977, respectively. As of June 30, 2021, the Company had available lines of credit from various banks in the PRC, Singapore and Malaysia amounting to $461,166 , |
LONG-TERM LOANS
LONG-TERM LOANS | 12 Months Ended |
Jun. 30, 2021 | |
LONG-TERM LOANS | |
LONG-TERM LOANS | NOTE 14 - LONG-TERM LOANS June 30, 2020 2021 MYR denominated loans (i) 842 842 SGD denominated loans (ii) 258 164 USD denominated loan (iii) 15,000 15,000 $ 16,100 $ 16,006 Less: Current portion (320 ) (15,308 ) $ 15,780 $ 698 i. The MYR denominated loans are repayable in 3 to 75 installments with the last installment due in Ap ri ii. The SGD denominated loans are repayable in 10 to 31 installments with the last installment due on March 4, 2024. For the years ended June 30, 2020 and 2021, the effective interest rates ranged from 2.44% to 2.78% per annum and 2.44% to 2.78% per annum, respectively. The borrowing is secured by vehicles with a total carrying value of $305 and $204 as of June 30, 2020 and 2021, respectively. iii. The USD denominated loan was drawn on April 24, 2020 and is Scheduled principal for all outstanding long-term loans as of June 30, 2021 are as follows: Year ending June 30, 2022 $ 15,308 2023 308 2024 216 2025 34 2026 19 2026 onwards 121 $ 16,006 For the years ended June 30, 2019, 2020, and 2021, interest expenses of long-term loans incurred amounted to $465, $269 and $553, respectively, and nil was capitalized as construction in progress for either of these three years. |
FAIR VALUE MEASUREMENTS
FAIR VALUE MEASUREMENTS | 12 Months Ended |
Jun. 30, 2021 | |
Fair Value Disclosures [Abstract] | |
FAIR VALUE MEASUREMENTS | NOTE 15 - FAIR VALUE MEASUREMENTS Financial instruments include cash and cash equivalents, short-term investments, accounts receivable, accounts receivable retention, other receivables, amounts due to or from related parties, accounts payable, short-term bank loans, long-term bank loans and bifurcated derivative. The carrying values of these financial instruments, other than long-term bank loans and a bifurcated derivative (which is a recurring fair value measurement), approximate their fair values due to their short-term maturities. The carrying value of the Company’s long-term bank loans other than the Convertible Bond approximates nil and nil as of June 30, 2020 and 2021, respectively. The fair value measurement of the Convertible Bond assets and liabilities measured at fair value on a recurring basis as of June 30, 2020 and 2021. |
STOCKHOLDERS' EQUITY
STOCKHOLDERS' EQUITY | 12 Months Ended |
Jun. 30, 2021 | |
STOCKHOLDERS' EQUITY | |
STOCKHOLDERS' EQUITY | NOTE 16 - STOCKHOLDERS’ EQUITY In August 2010, the Board of Directors adopted the 2010 Rights Plan. The 2010 Rights Plan provides for a dividend distribution of one preferred share purchase (the “Right”), for each outstanding ordinary share. Each Right entitles the shareholder to buy one share of the Class A Preferred Stock at an exercise price of $160. The Right will become exercisable if a person or group announces an acquisition of 20% or more of the outstanding ordinary shares of the Company, or announces commencement of a tender offer for 20% or more of the ordinary shares. In that event, the Right permits shareholders, other than the acquiring person, to purchase the Company’s ordinary shares having a market value of twice the exercise price of the Right, in lieu of the Class A Preferred Stock. In addition, in the event of certain business combinations, the Right permits the purchase of the ordinary shares of an acquiring person at a 50% discount . In September 2020, the Company amended and restated the Rights Plan to, among other things, extend its term until September 27, 2030. Pursuant to the amended and restated Rights Plan, subject to limited exceptions, upon (i) a person or group obtaining ownership of 15% or more of the aggregate total of the ordinary shares of the Company then issued and outstanding or (ii) the commencement or announcement of an intention to make a tender offer or exchange offer, the consummation of which would result in the beneficial ownership by a person or group of 15% or more of the aggregate total of the ordinary shares of the Company then issued and outstanding, in each case, without the approval of the Board of Directors, each Right will entitle the holders, other than the acquiring person or group, to buy, at a purchase price of $160, one share of the Class A Preferred Shares of the Company, or, in lieu of a Class A Preferred Share, ordinary shares having a market value at that time of twice the Right’s exercise price. The Board of Directors is entitled to redeem the Rights at $0.001 per Right at any time before the Rights are exercisable. On September 27, 2019, the Company declared a regular annual cash dividend of $0.21 per share to the holders of the Company’s ordinary shares. The record date was October 22, 2019, and the dividend was paid on November 12, 2019. On October 5, 2020, the Company declared a regular annual cash dividend of $0.20 per share to the holders of the Company’s ordinary shares. The record date was October 22, 2020, and the dividend was paid on November 20, 2020. |
SHARE-BASED COMPENSATION EXPENS
SHARE-BASED COMPENSATION EXPENSES | 12 Months Ended |
Jun. 30, 2021 | |
SHARE-BASED COMPENSATION EXPENSES | |
SHARE-BASED COMPENSATION EXPENSES | NOTE 17 - SHARE-BASED COMPENSATION EXPENSES On May 14, 2015, the Board of Directors approved the 2015 Equity Incentive Plan (the “2015 Equity Plan”). The 2015 Equity Plan provided for 5,000,000 ordinary shares, and it will terminate ten years following the date that it was adopted by the Board of Directors. The purpose of the 2015 Equity Plan is Share options On November 16, 2020 and March 17, 2021, certain directors and employees of the Company were granted share-based compensation awards totaling 90,000 and 478,500, respectively, share options to purchase ordinary shares. The exercise price of these options is $11.85 per share. A summary of the share option activity for the year ended June 30, 2021 is as shown below: Share Options Number of Weighted Weighted average Aggregate Outstanding, vested and exercisable at June 30, 2020 — — — — Granted on November 16, 2020 90,000 11.85 10 — Granted on March 17, 2021 478,500 11.85 9.95 1,165 Outstanding, vested and exercisable at June 30, 2021 568,500 11.85 9.66 1,734 The Company recorded share-based compensation expense relating to options granted in 2021 in the amount of $1,406 which is included in general and administrative expenses in fiscal year 2021. As of June 30 2021, the unrecognized compensation expense of $2,147 related to the share options is expected to be recognized over a weighted-average vesting period of 1.43 years. Restricted shares On December 10, 2016, the Company granted 67,500 restricted ordinary shares to certain directors under the 2015 Plan. These restricted shares vest quarterly over a three-year period starting from the directors’ respective service inception date. Fair value of the restricted shares was determined with reference to the market closing price at grant date. On September 19, 2019, the Company granted 67,500 restricted ordinary shares to certain directors under the 2015 Plan. These restricted shares vest quarterly over a three-year period starting from the directors’ respective service inception date. Fair value of the restricted shares was determined with reference to the market closing price at grant date. On November 16, 2020, the Company granted 318,000 restricted ordinary shares to certain directors under the 2015 Plan. These restricted shares vest quarterly over a three-year period commencing from November 2020. Fair value of the restricted shares was determined with reference to the market closing price at grant date. On March 17, 2021, the Company granted 1,116,500 restricted ordinary shares to certain officers and certain employees under the 2015 Plan. These restricted shares vest quarterly over a three-year period commencing from March 2021. Fair value of the restricted shares was determined with reference to the market closing price at grant date. A summary of the restricted share activity for the year ended June 30, 2020 and 2021 is as follows: Number of restricted shares Weighted average grant-date fair value Un-vested at June 30, 2019 18,125 20.09 Granted 67,500 16.06 Vested (22,500 ) 19.31 Un-vested 63,125 16.06 Granted 1,434,500 11.85 Vested (177,288 ) 13.35 Un-vested 1,320,337 11.85 The aggregate grant-date fair value of restri c |
EMPLOYEE BENEFITS
EMPLOYEE BENEFITS | 12 Months Ended |
Jun. 30, 2021 | |
EMPLOYEE BENEFITS | |
EMPLOYEE BENEFITS | NOTE 18 - EMPLOYEE BENEFITS The Company contributes to a state pension scheme run by the Chinese government in respect of its employees in China, a central provision fund run by the Singapore government in respect of its employees in Singapore, and an employment provident fund in respect of its employees in Malaysia. The expenses related to these plans were$18,757, $17,210 and $24,141 for the years ended June 30, 2019, 2020 and 2021, respectively. These schemes were accounted for as defined contribution plans. |
INCOME TAX
INCOME TAX | 12 Months Ended |
Jun. 30, 2021 | |
Income Tax Disclosure [Abstract] | |
INCOME TAX | NOTE 19 - INCOME TAX BVI Hollysys and its subsidiaries incorporated in the BVI are not subject to income tax under the relevant regulations. Singapore The Company’s wholly owned subsidiaries incorporated in Singapore are subject to Singapore corporate tax at a rate of 17% on the assessable profits arising from Singapore. Malaysia The Company’s wholly owned subsidiaries incorporated in Malaysia are subject to Malaysia corporate income tax at a rate of 24% on the assessable profits arising from Malaysia. Dubai The branch of the Company’s wholly owned subsidiary is a tax exempt company incorporated in Dubai, and no tax provision has been made for each of the years ended June 30, 2019, 2020 and 2021. Hong Kong The Company’s wholly owned subsidiaries incorporated in Hong Kong are subject to Hong Kong profits tax at a rate of 16.5% on the assessable profits arising from Hong Kong for the year ended June 30, 2021. For the year ended June 30, 2021, the provision for Hong Kong profits tax has been made in the consolidated statements of comprehensive income. No provision for Hong Kong profits tax has been made in the consolidated statements of comprehensive income as there were sustained taxable losses arising from Hong Kong for each of the years ended June 30, 2019 and 2020. Macau The Company’s wholly owned subsidiary incorporated in Macau is subject to the Macau corporate income tax at a rate of 12% on the assessable profits arising from Macau, with an exemption up to MOP600. No provision for Macau profits tax has been made in the consolidated statements of comprehensive income for each of the years ended June 30, 2019, 2020 and 2021. India The Company’s wholly owned subsidiary incorporated in India is subject to India corporate tax at a rate of 30% on its worldwide income. No provision for India profits tax has been made in the consolidated statements of comprehensive income as there were no taxable profits noted for each of the years ended June 30, 2019, 2020 and 2021. Qatar CECL is subject to the Qatar Corporate income tax at a rate of 10% on the assessable profit arising from Qatar. Indonesia The Company’s wholly owned subsidiary incorporated in Indonesia is subject to the Indonesia Corporate income tax at a rate of 25% on the assessable profit arising from Indonesia. No provision for Indonesia tax has been made in the consolidated statements of comprehensive income as there were no assessable profits noted for the years ended June 30, 2019, 2020 and 2021. PRC The Company’s subsidiaries incorporated in the PRC are subject to PRC enterprise income tax (“EIT”) on their respective taxable incomes as adjusted in accordance with relevant PRC income tax laws. The PRC statutory EIT rate is 25%. The Company’s PRC subsidiaries are subject to the statutory tax rate except for the following: Beijing Hollysys Co., Ltd Beijing Hollysys was certified as a High and New Technology Enterprise (“HNTE”) which provides a preferential EIT rate of 15% for three calendar years from 2020 to 2022. Further, Beijing Hollysys was qualified for the Key Software Enterprise (“KSE”) status in calendar year 2020 and was entitled to the preferential tax rate of 10% for calendar year 2020. An entity can use the preferential rate of KSE after its self-assessment, of which, the filing documents for KSE status shall be well prepared and filed for the future inspection from tax authorities as they hold the right to inspect the KSE status. Hangzhou Hollysys Automation Co., Ltd Hangzhou Hollysys was certified as a HNTE which provides a preferential EIT rate of 15% for three calendar years from 2020 to 2022. Hangzhou Hollysys expects to receive the renewed HNTE certificate Hollysys Industrial Software Hollysys Industrial Software was certified as a HNTE which provides a preferential EIT rate of 15% for three calendar years from 2019 to 2021. The Company’s income (losses) before income taxes consists of: Year ended June 30, 2019 2020 2021 PRC $ 155,691 $ 140,539 $ 137,520 Non-PRC (11,968 ) (43,042 ) (27,628 ) $ 143,723 $ 97,497 $ 109,892 Income tax expense, most of which is incurred in the PRC, consists of: Year ended June 30, 2019 2020 2021 Current income tax expense PRC 22,206 10,369 25,634 Non-PRC 2,175 1,388 758 $ 24,381 $ 11,757 $ 26,392 Deferred income tax (benefit) expense PRC (5,722 ) 5,577 (7,971 ) Non-PRC (475 ) 837 2,133 $ (6,197 ) 6,414 (5,838 ) $ 18,184 $ 18,171 $ 20,554 Reconciliation of the income tax expenses as computed by applying the PRC statutory tax rate of 25% to income before income taxes and the actual income tax expenses is as follows: Year ended June 30, 2019 2020 2021 Income before income taxes $ 143,723 $ 97,497 $ 109,892 Expected income tax expense at statutory tax rate in the PRC 35,931 24,374 33,221 Effect of different tax rates in various jurisdictions 1,781 3,997 4,665 Effect of preferential tax treatment (13,444 ) (11,797 ) (14,334 ) Effect of non-taxable (1,500 ) (250 ) (4,770 ) Effect of additional deductible research and development expenses (5,833 ) (7,241 ) (9,838 ) Effect of non-deductible 5,489 10,661 6,644 Over provision of income tax in previous years (8,457 ) (6,118 ) 2,102 Change in valuation allowance 1,399 3,746 1,718 Withholding tax on dividends paid by subsidiaries 2,847 799 — Others (29 ) — 1,146 Total $ 18,184 $ 18,171 $ 20,554 The breakdown of deferred tax assets/liabilities caused by the temporary difference is shown as below: June 30, 2020 2021 Deferred tax assets Allowance for doubtful accounts $ 7,808 $ 12,480 Deferred subsidies 2,484 529 Warranty liabilities 984 911 Inventory provision 687 199 Long-term assets 397 622 Deferred revenue — 105 Provision for loss contracts 99 64 Net operating loss carry forward 13,824 17,290 Valuation allowance (14,821 ) (17,424 ) Others 325 214 Total deferred tax assets $ 11,787 $ 14,990 Deferred tax liabilities Property, plant and equipment $ (11 ) $ (678 ) Costs and estimated earnings in excess of billings (3,396 ) (1,159 ) Share of net losses of equity investees (668 ) (1,352 ) PRC dividend withholding tax (6,654 ) (8,829 ) Intangible assets and other non-current (6,089 ) (7,321 ) Total deferred tax liabilities $ (16,818 ) $ (19,339 ) As of June 30, 2021 the Company had incurred n e and 1 1 5 Realization of the deferred tax assets is dependent on factors including future reversals of existing taxable temporary differences and adequate future taxable income, exclusive of reversing deductible temporary differences and tax loss or credit carry forwards. The Group evaluates the potential realization of deferred tax assets on an entity-by-entity Under the EIT Law and the implementation rules, profits of the Company’s PRC subsidiaries earned on or after January 1, 2008 and distributed by the PRC subsidiaries to their respective foreign holding companies are subject to a withholding tax at 10% unless reduced by tax treaty. As of June 30, 20 1 and RMB6,642,966 (equivalent to $995,729 ), ) 1 As of June 30, 20 20 1 20 1 and $888,249 , 20 1 The Chinese tax law grants the tax authorities the rights to further inspect companies’ tax returns retroactively in a three-year period (up to five years under certain special conditions), which means theoretically the tax authorities can still review the PRC subsidiaries’ tax returns for the years ended December 31, 2016 through 2020. The tax law also states that companies will be liable to additional tax, interest charges and penalties if errors are found in their tax returns and such errors have led to an underpayment of tax. As of June 30, 2020 and 2021, the Company concluded that there was no significant unrecognized tax benefits requiring recognition in the consolidated financial statements. The amount of unrecognized tax benefits may change in the next 12 months, pending clarification of current tax law or audit by the tax authorities. However, an estimate of the range of the possible change cannot be made at this time. As of June 30, 2020 and 2021, no unrecognized tax benefits, if ultimately recognized, will impact the effective tax rate. The Company recorded no penalty or interest for the years ended June 30, 2019, 2020 and 2021, respectively. |
OPERATING LEASES
OPERATING LEASES | 12 Months Ended |
Jun. 30, 2021 | |
Lessee, Operating Lease, Description [Abstract] | |
OPERATING LEASES | NOTE 20 - OPERATING LEASES Operating lease as lessee The Company’s lease agreements include payments for land use rights and lease payments that are largely fixed, do not contain material residual value guarantees or variable lease payments. The leases, other than prepaid land leases, have remaining lease terms of up to five years. The Company’s leases do not contain restrictions or covenants that restrict the Company from incurring other financial obligations. Fiscal year ended June 30, 2021 Operating lease costs 2,324 Short-term lease costs 1,000 Amortization of prepaid land leases 454 Total lease costs 3,778 Fiscal year ended June 30, 2021 Other information Cash paid for amounts included in the measurement of operating lease liabilities 4,045 ROU assets obtained in exchange for new operating lease liabilities 3,011 Weighted-average remaining lease term (in years): Operating leases 1.97 Weighted-average discount rate: Operating leases 4.17 % For the fiscal year ended June 30, 2021, total lease costs of $970 were recorded in selling expenses, $1,674 were recorded in general and administrative expenses, and $1,134 were recorded in research and development expenses. For the fiscal year ended June 30, 2020, total lease costs of $881 were recorded in selling expenses, $1,052 were recorded in general and administrative expenses, and $596 were recorded in research and development expenses. For the fiscal year ended June 30, 2019, total lease costs of $1,013 were recorded in selling expenses, $627 were recorded in general and administrative expenses, and $338 were recorded in research and development expenses. Total expenses under operating leases were $3,778 for the fiscal year ended June 30, 2021. The total amortization of prepaid land leases was $454 for the fiscal year ended June 30, 2021. Future minimum lease payments for operating leases as of June 30, 2021 are as follows: As of June 30, 2022 $ 3,302 2023 2,091 2024 701 2025 16 2026 and onwards — Total minimum lease payments 6,110 Less: imputed interest 84 Total lease liability balance $ 6,026 Operating lease as lessor The Company entered into operating lease arrangements to lease out its buildings located in Beijing with lease term ranging from ten to fifteen years. The lease arrangements include lease payments that are largely fixed and do not contain variable lease payments. The leases do not contain any contingent rental income clauses or options for a lessee to purchase the buildings. Total rental income for the fiscal years ended June 30, 2019, 2020 and 2021 was Future minimum lease payments to be received for these operating lease arrangements for each of the five succeeding fiscal years as of June 30, 2021 are as follows: Year ending June 30, Minimum lease payments 2022 $ 3,523 2023 3,628 2024 2,189 2025 1,942 2026 2,000 Thereafter 14,940 Total minimum lease payments to be received $ 28,222 |
INCOME PER SHARE
INCOME PER SHARE | 12 Months Ended |
Jun. 30, 2021 | |
Earnings Per Share [Abstract] | |
INCOME PER SHARE | NOTE 21 - INCOME PER SHARE The following table sets forth the computation of basic and diluted net income per share attributable to the Company’s common shareholders for the years indicated: Year ended June 30, 2019 2020 2021 Numerator: Net income attributable to the Company as reported $ 125,261 $ 79,396 $ 89,709 Less: Earnings allocated to participating securities — (83 ) — Net income attributable to common stockholders - basic $ 125,261 $ 79,313 $ 89,709 Add: Effect of Convertible Bond 562 93 — Earnings allocated to participating securities — 83 — Less: Earnings reallocated to participating securities considering potentially dilutive securities — (83 ) — Net income attributable to common stockholders – diluted $ 125,823 $ 79,406 $ 89,709 Denominator: Weighted average ordinary shares outstanding used in computing basic income per share(i) 60,456,524 60,478,717 60,566,709 Effect of dilutive securities Convertible Bond 796,200 130,525 — Restricted shares 21,160 — 947,040 Weighted average ordinary shares outstanding used in computing diluted income per share 61,273,884 60,609,242 61,513,749 Income per share – basic $ 2.07 1.31 1.48 Income per share – diluted $ 2.05 1.31 1.46 (i) Vested and unissued restricted shares of 114,425, 15,000 and 15,000 shares are included in the computation of basic and diluted income per share for the years ended June 30, 2019, 2020 and 2021, respectively. The effect of share options has been excluded from the computation of diluted income per share for the years ended June 30, 2019 and 2020 as their effects would be anti-dilutive. |
RELATED PARTY TRANSACTIONS
RELATED PARTY TRANSACTIONS | 12 Months Ended |
Jun. 30, 2021 | |
Related Party Transactions [Abstract] | |
RELATED PARTY TRANSACTIONS | NOTE 22 - RELATED PARTY TRANSACTIONS The related party relationships and related party transactions are listed as follows: Related party relationships Name of related parties Relationship with the Company China Techenergy Co., Ltd. (“China Techenergy”) 40% owned by Beijing Hollysys Beijing Hollysys Electric Motor Co., Ltd. (“Electric Motor”) 40% owned by Beijing Hollysys Beijing Hollycon Medicine & Technology. Co., Ltd. (“Hollycon”) 30% owned by Hollysys Group Co., Ltd.(“Hollysys Group”) Ningbo Hollysys Intelligent Technologies Co., Ltd. (“Ningbo Hollysys”) 40% owned by Hollysys Group Hunan LingXiang Maglev Technology Co., Ltd.(“Hunan LingXiang”) 17.67% owned by Beijing Hollysys Due from related parties June 30, 2020 2021 China Techenergy $ 14,301 $ 19,241 Ningbo Hollysys 6,142 11,190 Hollycon 961 64 Hunan LingXiang 40 — Others — 3 Allowance for credit losses — (2,255 ) $ 21,444 $ 28,243 The Company’s management believes that the collection of amounts due from related parties is reasonably assured and accordingly an allowance for credit loss has been made for the year ended June 30, 2021. The Company has no fixed repayment terms for these related parties’ transactions. Due to related parties June 30, 2020 2021 China Techenergy $ 2,967 $ 1,028 Ningbo Hollysys 609 529 Hollycon — 23 Hunan LingXiang — 81 $ 3,576 $ 1,661 The Company has no fixed repayment terms for these related parties’ transactions. Transactions with related parties Purchases of goods and services from: Year ended June 30, 2019 2020 2021 Ningbo Hollysys (i) $ 702 $ 1,838 $ 3,051 Hollycon 4 — 7 $ 706 $ 1,838 $ 3,058 (i) The Company purchases products from Ningbo Hollysys which are customers Sales of goods and integrated solutions to: Year ended June 30, 2019 2020 2021 China Techenergy (i) $ 11,094 $ 1,711 $ 8,458 Hollycon (ii) 44 1,302 866 Ningbo Hollysys (ii) 472 179 308 HuNan LingXiang — 38 — $ 11,610 $ 3,230 $ 9,632 (i) The Company sells automation control systems to China Techenergy which is used for non-safety non-safety (ii) The Company sells products to Hollycon and Ningbo Hollysys, which incorporate the Company’s product with their Other income from: Year ended June 30, 2019 2020 2021 Ningbo Hollysys (i) $ 1,548 $ 2,214 $ 2,281 Hollycon (ii) 972 880 460 China Techenergy — 1,122 — $ 2,520 $ 4,216 $ 2,741 (i) The Company entered into an operating lease agreement with Ningbo Hollysys to lease part of a building in Beijing. The lease term is for one year from the commencement date of January 1, 2021 to December 31, 2021. (ii) The Company entered into an operating lease agreement with Hollycon to lease part of building located in Beijing. The lease term is for one year from the commencement date of January 1, 2021 to December 31, 2021. Research and development: Year ended June 30, 2019 2020 2021 Ningbo Hollysys (i) $ — $ 655 $ 212 (i) The Company purchases research and development services from Ningbo Hollysys for research and development projects in the field of intelligent manufacturing. Amounts due from and due to the related parties relating to the above transactions are unsecured, non-interest |
COMMITMENTS AND CONTINGENCIES
COMMITMENTS AND CONTINGENCIES | 12 Months Ended |
Jun. 30, 2021 | |
COMMITMENTS AND CONTINGENCIES | |
COMMITMENTS AND CONTINGENCIES | NOTE 23 - COMMITMENTS AND CONTINGENCIES Capital commitments As of June 30, 2021, the Company had $67,582 in capital obligations for the coming fiscal year, mainly for the construction of facilities. Purchase obligations As of June 30, 2021, the Company had $285,788 purchase obligations for the coming fiscal years, for purchases of inventories and subcontracts, mainly for fulfillment of in-process Years ending June 30, Minimum payments 2022 $ 229,407 2023 21,143 2024 14,095 2025 7,048 2026 14,095 Performance guarantee and standby letters of credit The Company had stand-by stand-by pre-agreed stand-by represents The Company accounts for performance guarantees and stand-by Guarantees. Both the performance guarantees and the stand-by stand-by |
SEGMENT REPORTING
SEGMENT REPORTING | 12 Months Ended |
Jun. 30, 2021 | |
Segment Reporting [Abstract] | |
SEGMENT REPORTING | NOTE 24 - SEGMENT REPORTING The chief operating decision makers (“CODM”) have been identified as the Chairman, Chief Executive Officer and Chief Financial Officer of the Company. The Company organizes its internal financial reporting structure based on its main product and service offerings. Based on the criteria established by ASC 280, Segment Reporting Summarized information by segments for the years ended June 30, 2019, 2020, and 2021 is as follows: Year ended June 30, 2019 IA Rail M&E Consolidated Revenues from external customers Integrated solutions contracts revenue $ 191,668 148,365 127,338 467,371 Product sales 27,390 5,712 — 33,102 Maintenance service revenue 13,978 53,359 288 67,625 Extended warranty service revenue 762 1,481 — 2,243 Total 233,798 208,917 127,626 570,341 Costs of revenue 139,010 109,567 110,598 359,175 Gross profit $ 94,788 99,350 17,028 211,166 Year ended June 30, 2020 IA Rail M&E Consolidated Revenues from external customers Integrated solutions contracts revenue $ 207,421 145,750 61,101 414,272 Product sales 15,504 4,640 — 20,144 Maintenance service revenue 15,985 49,140 916 66,041 Extended warranty service revenue 1,061 1,809 — 2,870 Total 239,971 201,339 62,017 503,327 Costs of revenue 154,298 107,382 51,079 312,759 Gross profit $ 85,673 93,957 10,938 190,568 Year ended June 30, 2021 IA Rail M&E Consolidated Revenues from external customers Integrated solutions contracts revenue $ 291,106 100,877 68,197 460,180 Product sales 22,772 5,895 — 28,667 Maintenance service revenue 21,402 79,874 46 101,322 Extended warranty service revenue 1,772 1,525 — 3,297 Total 337,052 188,171 68,243 593,466 Costs of revenue 227,107 90,386 57,694 375,187 Gross profit $ 109,945 97,785 10,549 218,279 The majority of the Company’s revenues and long-lived assets other than goodwill and intangible assets are derived from and located in the PRC. The following table sets forth the revenues by geographical area: Year ended June 30, 2019 2020 2021 Revenues: PRC $ 438,832 $ 441,305 $ 518,170 Non-PRC 131,509 62,022 75,296 $ 570,341 $ 503,327 $ 593,466 The following table sets forth the long-lived assets other than goodwill and intangible assets by geographical area: June 30, 2020 2021 Long-lived assets other than goodwill and acquired intangible assets PRC $ 129,340 $ 163,343 Non-PRC 11,938 11,458 $ 141,278 $ 174,801 |
DISPOSAL OF SUBSIDIARY
DISPOSAL OF SUBSIDIARY | 12 Months Ended |
Jun. 30, 2021 | |
Disposal Of Subsidary [Abstract] | |
DISPOSAL OF SUBSIDIARY | NOTE 2 5 In March 2021, the Company entered into an agreement to dispose all of its interest in Cixi Hollysys for cash consideration of $16,331. The Company received $5,187 of the proceeds prior to the year ended June 30, 2021 and recorded the amount as a liability as the disposal transaction was not completed as of June 30, 2021. As of the reporting date, the Company has not received any other payments on this matter. |
SUBSEQUENT EVENTS
SUBSEQUENT EVENTS | 12 Months Ended |
Jun. 30, 2021 | |
Subsequent Events [Abstract] | |
SUBSEQUENT EVENTS | NOTE 2 6 In August 2021, the Company completed the acquisition of 100% of the equity of Beijing Hollysys Intelligent Technologies Co., Ltd. (“Hollysys Intelligent”), a wholly owned subsidiary, from Ningbo Hollysys Intelligent Technologies Co Ltd. (“Ningbo Hollysys”), with a cash consideration of approximately $20,901. As a subsidiary of the Company, its financial performance will be included in the Company’s consolidated financial statements from the first quarter of fiscal year 2022. |
ENDORSEMENT OF NOTE RECEIVABLES
ENDORSEMENT OF NOTE RECEIVABLES | 12 Months Ended |
Jun. 30, 2021 | |
ENDORSEMENT OF NOTE RECEIVABLES | |
ENDORSEMENT OF NOTE RECEIVABLES | NOTE 2 7 The Company endorsed bank acceptance bills to its suppliers as a way of settling accounts payable. The total endorsed but not yet due bank acceptance bills amounted to $37,333 and $41,981 2020 2021 Transfer and Servicing |
CONDENSED FINANCIAL INFORMATION
CONDENSED FINANCIAL INFORMATION OF THE PARENT COMPANY | 12 Months Ended |
Jun. 30, 2021 | |
Condensed Financial Information Disclosure [Abstract] | |
CONDENSED FINANCIAL INFORMATION OF THE PARENT COMPANY | NOTE 2 8 Under the PRC laws and regulations, the Company’s PRC subsidiaries’ ability to transfer net assets in the form of dividend payments, loans, or advances are restricted. The amount restricted was RMB 624 and RMB524,181 (equivalent to $70,511) and 2021, The following represents condensed unconsolidated financial information of the parent company only: CONDENSED BALANCE SHEETS June 30, 2020 2021 ASSETS Current assets: Cash and cash equivalents $ 13,265 $ 7,824 Short-term investments 11,318 — Other receivables, net 31 — Amounts due from subsidiaries 53,503 53,503 Prepaid expenses 97 166 Total current assets 78,214 61,493 Investment in subsidiaries 1,046,725 1,221,755 Total assets $ 1,124,939 $ 1,283,248 LIABILITIES AND STOCKHOLDERS’ EQUITY Current liabilities: Accrued liabilities — 5,143 Amounts due to subsidiaries 140,456 140,415 Total liabilities 140,456 145,558 Equity: Ordinary shares, par value $0.001 per share, 100,000,000 shares authorized; 60,537,099 shares issued and 61,367,337 shares issued and 2020 2021 61 61 Additional paid-in 224,043 233,768 Retained earnings 823,896 871,047 Accumulated other comprehensive ( ) income (63,517 ) 32,814 Total equity 984,483 1,137,690 Total liabilities and equity $ 1,124,939 $ 1,283,248 CONDENSED STATEMENTS OF COMPREHENSIVE INCOME Year Ended June 30, 2019 2020 2021 General and administrative expenses $ 1,511 $ 1,344 $ 21,090 Loss from operations (1,511 ) (1,344 ) (21,090 ) Other expense, net (346 ) — Interest income — 309 117 Interest expenses (562 ) (90 ) — Foreign exchange ( ) gains (72 ) (1,043 ) 1,532 Share of net income of subsidiaries $ 127,752 $ 81,564 $ 109,150 Income before income taxes 125,261 79,396 89,709 Income tax expenses — — — Net income 125,261 79,396 89,709 Other comprehensive income, net of tax of nil Translation adjustment (31,341 ) (27,996 ) 96,331 Comprehensive income $ 93,920 $ 51,400 $ 186,040 CONDENSED STATEMENTS OF CASH FLOWS Year ended June 30, 2019 2020 2021 Cash flows from operating activities: Net income $ 125,261 $ 79,396 $ 89,709 Adjustments to reconcile net income to net cash used in operating activities: Share of net income of subsidiaries (127,752 ) (81,564 ) (109,150 ) Share-based compensation expenses 238 410 9,724 Accretion of convertible bond 230 57 — Fair value adjustments of a bifurcated derivative 346 — — Change in operating assets and liabilities (28 ) (142 ) 5,065 Net cash used in operating activities $ (1,705 ) $ (1,843 ) $ (4,652 ) Cash flows from investing activities: Loans to subsidiaries (4,200 ) (19,775 ) — Maturity of short-term investments — — 11,318 Net cash (used in) $ (4,200 ) $ (19,775 ) $ 11,318 Cash flows from financing activities: Repayment of convertible bond — (20,753 ) — Proceeds of loans from subsidiaries 43,538 20,000 — Payment of dividends (10,862 ) (12,713 ) (12,107 ) Net cash provided by (used in) $ 32,676 $ (13,466 ) $ (12,107 ) Net increase in cash and cash equivalents $ 26,771 $ (35,084 ) $ (5,441 ) Cash and cash equivalents, beginning of period 21,578 48,349 13,265 Cash and cash equivalents, end of period $ 48,349 $ 13,265 $ 7,824 Basis of presentation For the presentation of the parent company only condensed financial information, the Company records its investment in subsidiaries under the equity method of accounting as prescribed in ASC 323, Investments—Equity Method and Joint Ventures Commitments The Company does not have significant commitments or long-term obligations as of the period end other than those presented. |
SUMMARY OF SIGNIFICANT ACCOUN_2
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies) | 12 Months Ended |
Jun. 30, 2021 | |
Accounting Policies [Abstract] | |
Basis of Presentation | Basis of Presentation The consolidated financial statements are prepared in accordance with United States generally accepted accounting principles (“U.S. GAAP”). |
Principles of Consolidation | Principles of Consolidation The consolidated financial statements include the financial statements of the Company, its subsidiaries and a VIE. All inter-company transactions and balances between the Company, its subsidiaries, and the VIE are eliminated upon consolidation. The Company included the results of operations of acquired businesses from the respective dates of acquisition. |
Use of estimates | Use of estimates The preparation of financial statements in conformity with US GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Management evaluates estimates, including those related to the expected total costs of integrated solutions contracts and service contracts, allowance for current expected credit losses, fair value of bifurcated derivative, fair value of the retained equity interest of a former subsidiary, warranties, valuation allowance of deferred tax assets, impairment of goodwill and other long-lived assets, goodwill related to the acquisition of Shandong Lukang Pharmaceutical Engineering Design Co., Ltd (“Shandong Lukang”), provision for loss contracts, incremental borrowing rate (“IBR”) for operating leases and net realizable value of inventory. Management’s estimates are based on historical experience and on various other assumptions that are believed to be reasonable, the results of which form the basis for making judgments about the carrying values of assets and liabilities. Actual results could differ materially from those estimates. |
Foreign currency translations and transactions | Foreign currency translations and transactions The Company’s functional currency is the United States dollars (“US dollars” or “$”); whereas the Company’s subsidiaries and VIE use the primary currency of the economic environment in which their operations are conducted as their functional currency. According to the criteria of Accounting Standards Codification (“ASC”) Topic 830, Foreign currency matters The Company translates the assets and liabilities of its subsidiaries and VIE into US dollars using the rate of exchange prevailing at the balance sheet date, and the consolidated statements of comprehensive income are translated at average rates during the reporting period. Adjustments resulting from the translation of financial statements from the functional currency into US dollars are recorded in stockholders’ equity as part of accumulated other comprehensive income. Transactions dominated in currencies other than the functional currency are translated into functional currency at the exchange rates prevailing on the transaction dates, and the exchange gains or losses are reflected in the consolidated statements of comprehensive income for the reporting period. Transactions denominated in foreign currencies are measured into the functional currency at the exchange rates prevailing on the transaction dates. Foreign currency denominated financial assets and liabilities are re-measured at the exchange rates prevailing at the balance sheet date. Exchange gains and losses are included in earnings. “RMB” and “CNY” refer to Renminbi, the legal currency of China; “SGD” and “S$” refer to the Singapore dollar, the legal currency of Singapore; “US dollar,” “$” and “US$” refer to the legal currency of the United States; “MYR” refers to the Malaysian Ringgit, the legal currency of Malaysia; “AED” refers to the United Arab Emirates Dirham, the legal currency of United Arab Emirates; “HKD” refers to the Hong Kong dollar, the legal currency of Hong Kong; “MOP” refers to the Macau Pataca, the legal currency of Macau; “INR” refers to the Indian Rupee, the legal currency of India; and “QAR” refers to the Qatar Riyal, the legal currency of Qatar; “IDR” refers to Indonesia Rupiah, the legal currency of Indonesia; |
Business combinations | Business combinations The Company accounts for its business combinations using the purchase method of accounting in accordance with ASC Topic 805, Business Combinations non-controlling non-controlling The determination and allocation of fair values to the identifiable assets acquired, liabilities assumed and non-controlling Acquisition-related costs are recognized as general and administrative expenses in the consolidated statements of comprehensive income as incurred. |
Cash and cash equivalents | Cash and cash equivalents Cash and cash equivalents consist of cash on hand and bank deposits, which are unrestricted as to withdrawal and use. All highly liquid investments that are readily convertible to known amounts of cash with original stated maturities of three months or less are classified as cash equivalents. |
Time deposits with original maturities over three months | Short-term investments Short-term investments consist of deposits placed with financial institutions with original maturity terms from four months to one year. As of June 30, 2021, $40,254, of short-term investments were placed in financial institutions in the PRC, Singapore, and Malaysia, respectively. As of June 30, 2020, of short-term investments were placed in financial institutions in the PRC, Singapore, Malaysia, respectively. |
Restricted cash | Restricted cash Restricted cash mainly consists of the cash deposited in banks pledged for performance guarantees or bank loans. These cash balances are not available for use until these guarantees are expired or cancelled, or the loans are repaid. |
Revenue recognition | Revenue recognition Integrated solutions contracts Revenues generated from designing, building, and delivering customized integrated industrial automation systems are recognized over time as the customer simultaneously receives and consumes the benefits provided by the Company’s performance as it occurs or because the customers control the related asset as it is created or enhanced. Revenue generated from mechanical and electrical solution contracts for the construction or renovation of buildings, rail or infrastructure facilities are also recognized over time as the customer simultaneously receives and consumes the benefits provided by the Company’s performance as it occurs or because the customers control the related asset as it is created or enhanced. In accordance with ASC Topic 606, Revenue from Contract with Customers cost-to-cost The Company reviews and updates the estimated total costs of the contracts at least annually. Revisions to contract revenue and estimated total costs of the contracts are made in the period in which the facts and circumstances that cause the revision become known and are accounted for as changes in estimates. Unapproved change orders are considered claims. Claims are recognized only when they have been awarded by customers. Excluding the impact of change orders, if the estimated total costs of integrated solutions contracts, which were revised during the years ended June 30, 2019, 2020 and 2021, had been used as a basis of recognition of integrated solutions contracts revenue since the contract commencement, net income for the years ended June 30, 2019, 2020 and 2021 would have been decreased by respectively; basic net income per share for years ended June 30, 2019, 2020 and 2021 would have been decreased by respectively; and diluted net income per share for the years ended June 30, 2019, 2020 and 2021, would have decreased by , The Company combines a group of contracts as one project if they are closely related and are, in substance, parts of a single project with an overall profit margin. The Company segments a contract into several projects, when they are of different business substance, for example, with different business negotiation, solutions, implementation plans and margins. Revenue in excess of billings on the contracts is recorded as costs and estimated earnings in excess of billings. Billings in excess of revenues recognized on the contracts are recorded as deferred revenue until the above revenue recognition criteria are met. Recognition of accounts receivable and costs and estimated earnings in excess of billings are discussed below. The Company generally recognizes 100% of the contractual revenue when the customer acceptance has been obtained and no further major costs are estimated to be incurred, and normally this is also when the warranty period commences. Revenues are presented net of value-added tax collected on behalf of the government. Product sales The Company’s products mainly include hardware and software. Revenue generated from sales of products is recognized when control of promised goods is transferred to the Company’s customers in an amount of consideration to which the Company expects to be entitled to in exchange for those goods. Revenues are presented net of value-added tax collected on behalf of the government. Service rendered The Company mainly provides the following services: The Company provides maintenance service which is generally completed onsite at the customers’ premises. Revenue is recognized over time by using the cost-to-cost The Company also separately sells extended warranties to their integrated solution customers for a fixed period. Such arrangements are negotiated separately from the corresponding integrated solution system and are usually entered into upon the expiration of the warranty period attached to the integrated solutions contracts. During the extended warranty period, the Company is responsible for addressing issues related to the system. Part replacement is not covered in such services. The Company uses time elapsed to measure the progress toward complete satisfaction of the performance obligation and recognizes revenue ratably over the contractual term. Revenues are presented net of value-added tax collected on behalf of the government. Excluding the impact of change orders, if the estimated total costs of service contracts, which were revised during the year ended June 30, 2021, had been used as a basis of recognition of service contract revenue since the contract commencement, net income for the years ended June 30, 2019, 2020 and 2021 would have been decreased by , and $9,735, respectively; basic net income per share for years ended June 30, 2019, 2020 and 2021 would have been decreased by , and $0.16, respectively; and diluted net income per share for the years ended June 30, 2019, 2020 and 2021, would have decreased by , and $0.16, respectively. Revisions to the estimated total costs for the years ended June 30, 2019, 2020 and 2021 were made in the ordinary course of business. Contract assets Contract assets include amounts that represent the rights to receive payment for goods or services that have been transferred to the customer, with the rights conditional upon something other than the passage of time. Accordingly, the Company includes the following in the contract assets: (i) unbilled amounts resulting from revenue recognized exceeding amounts billed to customers for integrated solutions contracts and maintenance service contracts using the cost-to-cost Performance of the integrated solutions contracts will often extend over long periods and the Company’s right to receive payments depends on its performance in accordance with the contractual terms. The Company has different billing practices for its PRC subsidiaries, overseas subsidiaries, and the VIE (Concord and Bond Groups). For the Company’s PRC subsidiaries, billings are issued based on milestones specified in the contracts negotiated with customers. In general, there are four milestones: 1) project commencement; 2) system manufacturing and delivery; 3) installation, trial-run For Concord and Bond Groups, billing claims rendered are subject to the further approval and certification of the customers or their designated consultants. Payments are made to Concord or Bond Groups based on the certified billings according to the payment terms mutually agreed between the customers and Concord or Bond Groups. Certain amounts are retained by the customer and payable to Concord and Bond Groups upon the issuance of the final completion certificate and completion of the defects liability period. The retained amounts are recorded as accounts receivable retention. Contract liabilities Contract liabilities include the amounts that reflect obligations to provide goods or services for which payment has been received. Contract liabilities are presented in the balance sheet as deferred revenue. The Company receives prepayments for integrated solutions contracts, product sales and service contracts for goods or services to be provided in the future. Prepayments received are recorded as deferred revenue, which is recognized as revenue based on the revenue recognition policies disclosed above for integrated solutions contracts, product sales and services rendered. |
Accounts receivable and costs and estimated earnings in excess of billings | Accounts receivable, costs and estimated earnings in excess of billings and accounts receivable retention The carrying value of the Company’s accounts receivable, costs and estimated earnings in excess of billings and accounts receivable retention, net of the allowance for credit losses, represents their estimated net realizable value. An allowance for doubtful accounts is recognized when it is probable that the Company will not collect the amount and is written off in the period when deemed uncollectible. The Company periodically reviews the status of contracts and decides how much of an allowance for doubtful accounts should be made based on factors surrounding the credit risk of customers and historical experience. The Company does not require collateral from its customers and does not charge interest for late payments by its customers. |
Inventories | Inventories Inventories are composed of raw materials, work in progress, purchased and manufactured finished goods and low value consumables. Inventories are stated at the lower of cost and net realizable value. The Company uses the weighted average cost method as its inventory costing method. The Company assesses the lower of cost and net realizable value for non-saleable, non-saleable, work-in-process |
Warranties | Warranties Warranties represent a major term under integrated solutions contracts and maintenance service contracts, which will last, in general, for one to three years or otherwise specified in the terms of the contract. The Company accrues warranty liabilities under a service contract as a percentage of revenue recognized, which is derived from its historical experience, in order to recognize the warranty cost for the related contract throughout the contract period. |
Property, plant and equipment, net | Property, plant and equipment, net Property, plant and equipment, other than construction in progress, are recorded at cost and are stated net of accumulated depreciation and impairment, if any. Depreciation expense is determined using the straight-line method over the estimated useful lives of the assets as follows: Buildings 30 - 50 years Machinery 5 - 10 Software 3 - 10 Vehicles 5 - 10 Electronic and other equipment 3 - 10 Construction in progress represents uncompleted construction work of certain facilities which, upon completion, management intends to hold for production purposes. In addition to costs under construction contracts, other costs directly related to the construction of such facilities, including duty and tariff, equipment installation and shipping costs, and borrowing costs are capitalized. Depreciation commences when the asset is placed in service. Maintenance and repairs are charged directly to expenses as incurred, whereas betterment and renewals are capitalized in their respective accounts. When an item is retired or otherwise disposed of, the cost and applicable accumulated depreciation are removed and the resulting gain or loss is recognized for the reporting period. |
Prepaid land leases, net | Prepaid land leases, net Prepaid land lease payments, for the land use right of four parcels of land in the PRC, three parcels of leasehold land in Malaysia and one parcel of leasehold land in Singapore, are initially stated at cost and are subsequently amortized on a straight-line basis over the lease terms of 49 to 88 years. |
Intangible assets, net | Intangible assets, net Intangible assets are carried at cost less accumulated amortization and any impairment. Intangible assets acquired in a business combination are recognized initially at fair value at the date of acquisition. Intangible assets are amortized using a straight-line method. The estimated useful lives for the intangible assets are as follows: Category Estimated useful life Patents and copyrights 5 - 10 years Residual values are considered nil. |
Goodwill | Goodwill Goodwill represents the excess of the purchase price over the estimated fair value of net tangible and identifiable intangible assets acquired. The Company assesses goodwill for impairment in accordance with ASC subtopic 350-20, Intangibles – Goodwill and Other 350-20”), 350-20. The Company’s goodwill outstanding at June 30, 2021 was related to the acquisitions of Beijing Hollysys Industrial Software Company Ltd (“Hollysys Industrial Software”) and Shandong Lukang. The Company has the option to assess qualitative factors first to determine whether it is necessary to perform the two-step 350-20. more-likely-than-not two-step two-step The Company elected to assess goodwill for impairment using the two-step process for Concord Group for the year ended June 30, 2019, with the assistance of a third-party appraiser. The judgment in estimating the fair value of Concord Group includes forecasts of the amount and timing of expected future cash flows, which are based on management’s best estimates of forecasted revenue, gross profit, operating expenses, future capital expenditures and working capital levels, as well as the discount rate, which is determined using the Weighted Average Cost of Capital and Capital Asset Pricing Model approach and the selection of comparable companies operating in similar businesses. The carrying amount of Concord Group exceeded its fair value as of June 30, 2019, and a goodwill impairment charge of test (note 10). Due to downward revision of forecasted future profits, the Company determined it was more likely than not that an impairment existed within the Bond Group reporting unit and performed a quantitative goodwill impairment test as of June 30, 2020. The Company performed the two-step Significant management judgment and estimation are involved in forecasting the amount and timing of expected future cash flows and the underlying assumptions used in the discounted cash flow approach to determine the fair value of the Bond Group reporting unit. In particular, the fair value estimate is sensitive to significant assumptions, such as forecasted revenue growth rates, gross profit margins and discount rates, which are determined using the Weighted Average Cost of Capital and Capital Asset Pricing Model approach and the selection of comparable companies operating in similar businesses. These significant assumptions are forward looking and could be materially affected by future market or global economic conditions. As a result, the Company recorded a full impairment charge of There are uncertainties surrounding the amount and timing of future expected cash flows as they may be impacted by negative events such as uncertainty of the impact of COVID-19 |
Impairment of long-lived assets other than goodwill | Impairment of long-lived assets other than goodwill The Company evaluates its long-lived assets or asset groups including acquired intangibles with finite lives for impairment whenever events or changes in circumstances (such as a significant adverse change to market conditions that will impact the future use of the assets) indicate that the carrying amount of a group of long-lived assets may not be fully recoverable. When these events occur, the Company evaluates the impairment by comparing the carrying amount of the assets to future undiscounted cash flows expected to result from the use of the assets and their eventual disposition. If the sum of the expected undiscounted cash flows is less than the carrying amount of the assets, the Company recognizes an impairment loss based on the excess of the carrying amount of the asset group over its fair value, generally based upon discounted cash flows or quoted market prices. |
Shipping and handling costs | Shipping and handling costs All shipping and handling fees charged to customers are included in net revenue. Shipping and handling costs incurred are included in cost of integrated solutions contracts and/or costs of products sold as appropriate. |
Income taxes | Income taxes The Company follows the liability method of accounting for income taxes. Under this method, deferred tax assets and liabilities are determined based on the differences between the financial reporting and tax bases of assets and liabilities using enacted tax rates that will be in effect in the period in which the differences are expected to reverse. The Company records a valuation allowance to offset deferred tax assets if based on the weight of available evidence, it is more-likely-than-not The Company adopted ASC 740, Income Taxes , |
Research and development costs | Research and development costs Research and development costs consist primarily of salaries, bonuses and benefits for research and development personnel. Research and development costs also include travel expenses of research and development personnel as well as depreciation of hardware equipment and software tools and other materials used in research and development activities. Research and development costs are expensed as incurred. Software development costs are also expensed as incurred as the costs qualifying for capitalization have been insignificant for the periods presented. |
VAT refunds and government subsidies | VAT refunds and government subsidies Pursuant to the laws and regulations of the PRC, the Company remits 13%-16% of its sales as value added tax (“VAT”), and then is entitled to a refund of the portion of the Company’s actual VAT burden that exceeds the levied on all sales containing internally developed software products. VAT refunds are recognized in the consolidated statements of comprehensive income when cash refunds or the necessary approval from the tax authority has been received. Certain subsidiaries of the Company located in the PRC receive government subsidies from local PRC government agencies. Government subsidies are recognized in the consolidated statements of comprehensive income when the attached conditions have been met. Government grants received for the years ended June 30, 2019, 2020 and 2021 amounted to were included as a credit to operating expenses in the consolidated statements of comprehensive income for the years ended June 30, 2019, 2020 and 2021, respectively. |
Appropriations to statutory reserve | Appropriations to statutory reserve Under the corporate law and relevant regulations in the PRC, all of the subsidiaries of the Company located in the PRC are required to appropriate a portion of their their after-tax after-tax Concord Corporation Pte. Ltd, Dubai Branch (“CCPL Dubai”) and Concord Electrical Contracting Ltd., a Qatar company (“CECL”). |
Segment reporting | Segment reporting In accordance with ASC 280, Segment Reporting |
Comprehensive income | Comprehensive income Comprehensive income is defined as the changes in equity of the Company during a period from transactions and other events and circumstances excluding transactions resulting from investments by owners and distributions to owners. In accordance with ASC 220, Comprehensive Income |
Investments in Equity Investees and Equity Securities | Investments in equity investees and equity securities The Company accounts for its equity investments under the equity method when the Company has rights and ability to exercise significant influence over the investees. The investments in entities over which the Company has the ability to exercise significant influence are accounted for using the equity method. Significant influence is generally considered to exist when the Company has an ownership interest the investee between 20% and 50%. Other factors, such as representation on the investee’s board of directors and the impact of commercial arrangements, are also considered in determining whether the equity method of accounting is appropriate. Under the equity method, original investments are recorded at cost and adjusted by the Company’s share of undistributed earnings or losses of these entities, by the amortization of any basis difference between the amount of the Company’s investment and its share of the net assets of the investee, and by dividend distributions or subsequent investments. When dividends from an investee exceed the carrying amount of an equity method investment, the excess distribution is recognized as a gain and reported as share of net income of equity investees, net in the consolidated statements of comprehensive income when the Company is not liable for the obligations of the investee nor otherwise committed to provide financial support. In such cases, subsequent equity method earnings are not recorded until subsequent earnings equal the gain recorded. Unrealized inter-company profits and losses related to equity investees are eliminated. An impairment charge, being the difference between the carrying amount and the fair value of the equity investee, is recognized in the consolidated statements of comprehensive income when the decline in value is considered other than temporary. The Company will discontinue applying the equity method if an investment (plus additional financial support provided to the investee, if any) has been reduced to zero. When the Company has other investments in its equity-method investee and is not required to advance additional funds to that investee, the Company would continue to report its share of equity method losses in its consolidated statement of comprehensive income after its equity-method investment has been reduced to zero, to the extent of and as an adjustment to the adjusted basis of its other investments in the investee. Such losses are first applied to those investments of a lower liquidation preference before being further applied to the investments of a higher liquidation preference. The Company uses the cumulative earnings approach to classify distributions received from equity investees. Under this approach, distributions received from equity investees are presumed to be a return on the investment and are classified as cash inflows from operating activities unless the distributions received exceed cumulative equity in earnings recognized by the investor. In such case, the excess is considered a return of investment and is classified as cash inflows from investing activities. For equity investments other than those accounted for under the equity method or those that result in consolidation of the investee, the Company measures equity investments at fair value and recognizes any changes in fair value in net income. However, for equity investments that do not have readily determinable fair values and do not qualify for the existing practical expedient in ASC 820 to estimate fair value using the net asset value per share (or its equivalent) of the investment, the Company has elected to measure those investments at cost, less any impairment, plus or minus changes resulting from observable price changes in orderly transactions for the identical or a similar investment of the same issuer. At each reporting date, the Company is required to make a qualitative assessment as to whether equity investments without a readily determinable fair value for which the measurement alternative is elected is impaired. In the event that a qualitative assessment indicates that the investment is impaired and the fair value of the investment is less than the carrying value, the carrying value is written down to its fair value. A variety of factors are considered when determining if a decline in fair value is below carrying value, including, among others, the financial condition and prospects of the investee. |
Capitalization of interest | Capitalization of interest Interest incurred on borrowings for the Company’s construction of facilities and assembly line projects during the active construction period is capitalized. The capitalization of interest ceases once a project is substantially complete. The amount to be capitalized is determined by applying the weighted-average interest rate of the Company’s outstanding borrowings to the average amount of accumulated capital expenditures for assets under construction during the year and is added to the cost of the underlying assets and amortized over their respective useful lives. |
Income per share | Income per share Income per share is computed in accordance with ASC 260, Earnings Per Share |
Share-based compensation | Share-based compensation The Company accounts for share-based compensation in accordance with ASC 718, Compensation-Stock Compensation For share-based awards that are subject to performance-based vesting conditions in addition to time-based vesting, the Company recognizes the estimated grant-date fair value of performance-based awards, net of estimated forfeitures, as share-based compensation expense over the vesting period based upon the Company’s determination of whether it is probable that the performance-based criteria will be achieved. At each reporting period, the Company reassesses the probability of achieving the performance-based criteria. Determining whether the performance-based criteria will be achieved involves judgment, and the estimate of share-based compensation expense may be revised periodically based on changes in the probability of achieving the performance-based criteria. Revisions are reflected in the period in which the estimate is changed. If the performance-based criteria are not met, no share-based compensation expense is recognized, and, to the extent share-based compensation expense was previously recognized, such share-based compensation expense is reversed. |
Fair value measurements | Fair value measurements The Company complies with ASC 820, Fair Value Measurements and Disclosures Level 1 - Quoted prices in active markets for identical assets or liabilities. Level 2 - Inputs other than Level 1 that are observable, either directly or indirectly, such as quoted prices for similar assets or liabilities; quoted prices in markets that are not active; or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities. Level 3 - Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities. Classification within the hierarchy is determined based on the lowest level of input that is significant to the fair value measurement. ASC 820 describes three main approaches to measuring the fair value of assets and liabilities: (1) market approach; (2) income approach and (3) cost approach. The market approach uses prices and other relevant information generated from market transactions involving identical or comparable assets or liabilities. The income approach uses valuation techniques to convert future amounts to a single present value amount. The measurement is based on the value indicated by current market expectations about those future amounts. The cost approach is based on the amount that would currently be required to replace an asset. |
Concentration of risks | Concentration of risks Concentration of credit risk Assets that potentially subject the Company to a significant concentration of credit risk primarily consist of cash and cash equivalents, short-term investments, restricted cash, accounts receivable, costs and estimated earnings in excess of billings, accounts receivable retention, other receivables and amounts due from related parties. The maximum exposure of such assets to credit risk is their carrying amounts as of the balance sheet date. As of June 30, 2021, substantially all of the Company’s cash and cash equivalents and short-term The Company has no customer that individually comprised 10% or more of the outstanding balance of accounts receivable as of June 30, 20 20 1 Concentration of business and economic risk A majority of the Company’s net revenue and net income is derived in the PRC. The Company’s operations may be adversely affected by significant political, economic and social uncertainties in the PRC. Although the PRC government has been pursuing economic reform policies for more than 20 years, no assurance can be given that the PRC government will continue to pursue such policies or that such policies may not be significantly altered, especially in the event of a change in leadership, social or political disruption or unforeseen circumstances affecting the PRC’s political, economic and social conditions. There is also no guarantee that the PRC government’s pursuit of economic reforms will be consistent or effective. Concentration of currency convertibility risk A majority of the Company’s businesses are transacted in RMB, which is not freely convertible into foreign currencies. All foreign exchange transactions take place either through the People’s Bank of China or other banks authorized to buy and sell foreign currencies at the exchange rates quoted by the People’s Bank of China. Approval of foreign currency payments by the People’s Bank of China or other regulatory institutions requires submitting a payment application form together with suppliers’ invoices, shipping documents and signed contracts. Concentration of foreign currency exchange rate risk The Company’s exposure to foreign currency exchange rate risk primarily relates to monetary assets or liabilities held in foreign currencies. Since July 21, 2005, the RMB has been permitted to fluctuate within a narrow and managed band against a basket of certain foreign currencies. On June 19, 2010, the People’s Bank of China announced the end of the RMB’s de facto peg to USD, a policy which was instituted in late 2008 in the face of the global financial crisis, to further reform the RMB exchange rate regime and to enhance the RMB’s exchange rate flexibility. The exchange rate floating bands will remain the same as previously announced in the inter-bank foreign exchange market. The US dollar against RMB depreciated by and appreciated by for the years ended June 30, 2019, 2020 and 2021, respectively. Any significant revaluation of RMB may materially and adversely affect the Company’s cash flows, revenues, earnings and financial position, and the value of its shares in US dollars. An appreciation of the US dollar against the RMB would result in foreign currency translation losses when translating the net assets of the Company from RMB into the For the years ended June 30, 2019, 2020 and 2021, the net foreign currency translation gains (losses) resulting from the translation of RMB, SGD and other functional currencies to the US dollar reporting currency recorded in stockholders’ equity as part of accumulated other comprehensive income was |
Risks and Uncertainties | Risks and Uncertainties Since the third quarter of fiscal year 2020, a novel strain of coronavirus (COVID-19) COVID-19 COVID-19 COVID-19 COVID-19 During the last two quarters of fiscal year 2020, the pandemic has led to delays of project execution and contract bidding, while marketing events were also adversely affected due to restriction on on-site communication, which has negatively impacted the Company’s financial performance in 2020. While there has been gradual recovery of the Company’s overall business operations resulting from improving health statistics in China which also lessened the impact of COVID-19 on performance of the Company in FY2021, continuous impact of the pandemic on the Company overseas business is foreseeable due to the continued spread of COVID-19 in south east Asia and south Asia. The Company also faces risks that customers may delay their settlement with the Company or delay or fail to pay us as scheduled due to the impact of COVID-19. In addition, the pandemic is also one of the triggers for evaluating whether there is goodwill impairment of Bond Group and long-lived asset impairments. The measures taken by the governments of countries affected could disrupt the Company’s demand from its customers, sales efforts, the delivery of its products and services, reduce our customers’ ability to pay and adversely impact the Company’s business, financial condition and results, or results of operations. Because of the uncertainty surrounding the COVID-19 outbreak, the full severity of the business disruption and the related financial impact cannot be reasonably estimated at this time. |
Recent accounting pronouncements | Recent accounting pronouncements Recently Adopted Standards In June 2016, the FASB issued ASU No. 2016-13, Financial Instruments -Credit Losses 2019-05, Financial Instruments- Credit Losses (Topic 326): Targeted Transition Relief and ASU 2019-11, Credit Losses The Company is exposed to credit losses primarily through integrated solution contracts and sales of products and services. The cumulative effect of the changes made to the Company’s consolidated balance sheet at July 1, 2020, for the adoption of ASU 2016-13 Balance at June 30, Adjustment due 2016-13 Balance at July 1, Assets Accounts receivable 242,449 (16,284 ) 226,165 Accounts receivable retention 10,805 (145 ) 10,660 Costs and estimated earnings in excess of billings 189,188 (3,111 ) 186,077 Other receivables 28,257 (10,799 ) 17,458 Due from related parties 21,444 (1,880 ) 19,564 Deferred tax assets 8,909 1,768 10,677 Equity Retained earnings 774,473 (30,451 ) 744,022 The movements in the allowance for credit losses on accounts receivable and accounts receivable retention were as follows: June 30, 2021 Beginning balance, July 1, 2020 41,618 Adoption of ASU 2016-13 16,429 Provision for expected credit losses, net of recoveries 7,761 Amounts written off charged against the allowance (3,965 ) Translation adjustments 5,159 Ending balance, June 30, 2021 67,002 The movements in the allowance for credit losses on costs and estimated earnings in excess of billings were as follows: June 30, 2021 Beginning balance, July 1, 2020 6,150 Adoption of ASU 2016-13 3,111 Provision for expected credit losses, net of recoveries 1,758 Translation adjustments 816 Ending balance, June 30, 2021 11,835 In January 2017, the FASB issued ASU No. 2017-04 2017-04”), Intangibles – Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment 2017-04 In August 2018, the FASB issued ASU No. 2018-13 , Fair Value Measurement (Topic 820), Disclosure Framework — Changes to the Disclosure Requirements for Fair Value Measurement Standards Effective in Future Years In December 2019, the FASB issued ASU 2019-12, “ Simplifying the Accounting for Income Taxes, In January 2020, the FASB issued ASU No. 2020-01, Investments—Equity Securities Investments—Equity Method and Joint Ventures Derivatives and Hedging Clarifying the Interactions between Topic 321, Topic 323, and Topic 815 (a consensus of the FASB Emerging Issues Task Force) 2020-01”), 2020-01 2020-01 |
ORGANIZATION AND BUSINESS BAC_2
ORGANIZATION AND BUSINESS BACKGROUND (Tables) | 12 Months Ended |
Jun. 30, 2021 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Schedule of financial statement balances and amounts of the VIE | The following tables set forth the financial statement balances and amounts of the VIE that were included in the consolidated financial statements: June 30, 2020 2021 Current assets $ 9,708 $ 5,588 Non-current 183 37 Total assets 9,891 5,625 Current liabilities $ 6,919 $ 3,230 Total liabilities 6,919 3,230 Year ended June 30, 2020 2021 Net revenue $ 981 $ 46 Cost of revenue (1) (2,147 ) (2,177 ) Net profit 3,128 2,223 Net cash provided by (used in) operating activities 1,120 (451 ) (1) Cost of revenue is in credit side because of the reversal of warranties provision which was overprovided in previous years. |
SUMMARY OF SIGNIFICANT ACCOUN_3
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Tables) | 12 Months Ended |
Jun. 30, 2021 | |
Accounting Policies [Abstract] | |
Schedule of depreciation expense using the straight-line method over the estimated useful lives of the assets | Buildings 30 - 50 years Machinery 5 - 10 Software 3 - 10 Vehicles 5 - 10 Electronic and other equipment 3 - 10 |
Schedule of estimated useful lives for the intangible assets | The estimated useful lives for the intangible assets are as follows: Category Estimated useful life Patents and copyrights 5 - 10 years |
Summary of cumulative effect of the changes made to the Company's consolidated balance sheet | The cumulative effect of the changes made to the Company’s consolidated balance sheet at July 1, 2020, for the adoption of ASU 2016-13 Balance at June 30, Adjustment due 2016-13 Balance at July 1, Assets Accounts receivable 242,449 (16,284 ) 226,165 Accounts receivable retention 10,805 (145 ) 10,660 Costs and estimated earnings in excess of billings 189,188 (3,111 ) 186,077 Other receivables 28,257 (10,799 ) 17,458 Due from related parties 21,444 (1,880 ) 19,564 Deferred tax assets 8,909 1,768 10,677 Equity Retained earnings 774,473 (30,451 ) 744,022 |
Schedule of accounts receivables credit losses | The movements in the allowance for credit losses on accounts receivable and accounts receivable retention were as follows: June 30, 2021 Beginning balance, July 1, 2020 41,618 Adoption of ASU 2016-13 16,429 Provision for expected credit losses, net of recoveries 7,761 Amounts written off charged against the allowance (3,965 ) Translation adjustments 5,159 Ending balance, June 30, 2021 67,002 |
Schedule of credit losses on costs and estimated earnings | The movements in the allowance for credit losses on costs and estimated earnings in excess of billings were as follows: June 30, 2021 Beginning balance, July 1, 2020 6,150 Adoption of ASU 2016-13 3,111 Provision for expected credit losses, net of recoveries 1,758 Translation adjustments 816 Ending balance, June 30, 2021 11,835 |
INVENTORIES (Tables)
INVENTORIES (Tables) | 12 Months Ended |
Jun. 30, 2021 | |
Inventory Disclosure [Abstract] | |
Schedule of Inventory, Current | Components of inventories are as follows: June 30, 2020 2021 Raw materials $ 18,307 $ 23,469 Work in progress 17,561 12,165 Finished goods 12,342 12,278 $ 48,210 $ 47,912 |
ACCOUNTS RECEIVABLE (Tables)
ACCOUNTS RECEIVABLE (Tables) | 12 Months Ended |
Jun. 30, 2021 | |
Receivables [Abstract] | |
Schedule of Account receivable | June 30, 2020 2021 Notes receivable $ 27,059 $ 54,830 Accounts receivable 257,008 342,862 Allowance for credit losses (41,618 ) (66,839 ) $ 242,449 $ 330,853 |
Schedule of Movements in allowance for credit losses | The movements in allowance for credit losses are as follows: June 30, 2019 2020 2021 Balance at the beginning of year $ 49,094 $ 47,162 $ 41,618 Adoption of ASU 2016-13 — — 16,284 Additions 4,318 178 7,749 Deconsolidation of a subsidiary (2,733 ) — — Written off (1,959 ) (4,399 ) (3,965 ) Translation adjustment (1,558 ) (1,323 ) 5,153 Balance at the end of year $ 47,162 $ 41,618 $ 66,839 |
COSTS AND ESTIMATED EARNINGS _2
COSTS AND ESTIMATED EARNINGS IN EXCESS OF BILLINGS (Tables) | 12 Months Ended |
Jun. 30, 2021 | |
COSTS AND ESTIMATED EARNINGS IN EXCESS OF BILLINGS | |
Schedule of Costs in Excess of Billings | June 30, 2020 2021 Contract costs incurred plus estimated earnings $ 1,046,803 $ 988,496 Less: Progress billings (853,774 ) (779,955 ) Cost and estimated earnings in excess of billings 193,029 208,541 Less: Allowance for credit losses (6,150 ) (11,835 ) $ 186,879 $ 196,706 |
Schedule of Allowance For Credit Losses Of Costs And Estimated Earnings In Excess Of Billings | The movements in allowance for credit losses are as follows: June 30, 2019 2020 2021 Balance at the beginning of year $ 9,929 $ 6,981 $ 6,150 Adoption of ASU 2016-1 3 — — 3,111 Additions (reversals) (2,149 ) (651 ) 1,758 Deconsolidation of a subsidiary (465 ) — — Translation adjustments (334 ) (180 ) 816 Balance at the end of year $ 6,981 $ 6,150 $ 11,835 |
REVENUE FROM CONTRACTS WITH C_2
REVENUE FROM CONTRACTS WITH CUSTOMERS (Tables) | 12 Months Ended |
Jun. 30, 2021 | |
REVENUE FROM CONTRACTS WITH CUSTOMERS | |
Summary of disaggregated revenue information | The following table present disaggregated revenue information: Year ended June 30, 2021 PRC Non-PRC Total Integrated solutions contracts revenue $ 385,592 74,588 460,180 Product sales 28,200 467 28,667 Maintenance service revenue 101,081 241 101,322 Extended warranty service revenue 3,297 — 3,297 Total $ 518,170 75,296 593,466 |
Summary of contract assets and contract liabilities | Contract assets and contract liabilities are summarized below: June 30, 2020 June 30, 2021 Contract assets, current $ 194,511 202,462 Contract assets, non-current 7,026 5,627 Contract liabilities 139,242 185,596 |
PROPERTY, PLANT AND EQUIPMENT (
PROPERTY, PLANT AND EQUIPMENT (Tables) | 12 Months Ended |
Jun. 30, 2021 | |
PROPERTY, PLANT AND EQUIPMENT | |
Summary of property, plant and equipment | A summary of property, plant and equipment is as follows: June 30, 2020 2021 Buildings $ 67,520 $ 73,617 Machinery 12,941 15,110 Software 14,222 16,294 Vehicles 4,675 4,860 Electronic and other equipment 36,647 41,154 Construction in progress 8,553 22,434 $ 144,558 $ 173,469 Less: Accumulated depreciation and impairment (66,508 ) (79,423 ) $ 78,050 $ 94,046 |
Schedule of Assets leased to others under operating leases | The Company has entered into operating lease contracts related to certain buildings owned with carrying amounts as shown below: June 30, 2020 2021 Buildings leased to others - at original cost $ 21,467 $ 23,491 Less: Accumulated depreciation (6,605 ) (7,950 ) Buildings leased to others - net $ 14,862 $ 15,541 |
PREPAID LAND LEASES (Tables)
PREPAID LAND LEASES (Tables) | 12 Months Ended |
Jun. 30, 2021 | |
PREPAID LAND LEASES | |
Summary of prepaid land leases | A summary of prepaid land leases is as follows: June 30, 2020 2021 Prepaid land leases $ 18,681 $ 20,200 Less: Accumulated amortization (2,939 ) (3,632 ) $ 15,742 $ 16,568 |
Schedule of Annual amortization of prepaid land leases | The annual amortization of prepaid land leases for each of the five succeeding years is as follows: Year ending June 30, 2022 $ 419 2023 419 2024 419 2025 419 2026 419 |
INTANGIBLE ASSETS, NET (Tables)
INTANGIBLE ASSETS, NET (Tables) | 12 Months Ended |
Jun. 30, 2021 | |
INTANGIBLE ASSETS, NET | |
Schedule of Finite-Lived Intangible Assets | June 30, 2020 2021 Gross Accumulated Net Gross Accumulated Net Patents and copyrights $ 2,620 (907 ) 1,713 $ 2,867 (1,468 ) 1,399 |
Schedule of Annual amortization expense relating to the existing intangible assets | The annual amortization expense relating to the existing intangible assets for the five succeeding years is as follow: Year ending June 30, 2022 $ 459 2023 459 2024 301 2025 132 2026 — |
GOODWILL (Tables)
GOODWILL (Tables) | 12 Months Ended |
Jun. 30, 2021 | |
GOODWILL | |
Schedule of changes in the carrying amount of goodwill | Operating segment Mechanical and Industrial Total Balance as of July 1, 2019 $ 36,468 586 $ 37,054 Goodwill upon acquisition — 958 958 Goodwill impairment charge (35,767 ) — (35,767 ) Translation adjustment (701 ) (84 ) (785 ) Balance as of June 30 $ — 1,460 $ 1,460 Translation adjustment — 138 138 Balance as of June 30, 2021 $ — 1,598 $ 1,598 |
EQUITY INVESTMENTS (Tables)
EQUITY INVESTMENTS (Tables) | 12 Months Ended |
Jun. 30, 2021 | |
EQUITY INVESTMENTS | |
Schedule of long-term investments | The following long-term investments were accounted for under the equity method as of June 30, 2020 and 2021 as indicated: June 30, 2020 Interest Long-term Share of Disposal Advance Total Equity method Beijing Hollycon Medicine & Technology Co., Ltd. 30.00 % $ 21,816 4,069 — — 25,885 Beijing Hollysys Electric Motor Co., Ltd. 40.00 % 749 5,263 — — 6,012 Beijing IPE Biotechnology Co., Ltd. 22.02 % 1,395 — (1,395 ) — — China Techenergy Co., Ltd. 40.00 % — 7,919 — — 7,919 Ningbo Hollysys Intelligent Technologies Co., Ltd. 40.00 % 3,993 (3,993 ) — — Hunan LingXiang Maglev Technology Co., Ltd. 19.00 % 1,415 (330 ) — — 1,085 Beijing AIRmaker Technology Co., Ltd. 20.00 % 141 (15 ) — — 126 Southcon Development Sdn Bhd. 30.00 % 211 (105 ) — — 106 Beijing Hollysys Machine Automation Co., Ltd. 30.00 % 424 (424 ) — — — Beijing Jing Yi Intelligent Technologies Innovation Center Co., Ltd. 46.00 % — — — — — $ 30,144 12,384 (1,395 ) — 41,133 June 30, 2021 Interest Long-term Share of Disposal Advance Total Equity method Beijing Hollycon Medicine & Technology Co., Ltd. 30.00 % $ 23,874 5,741 — — 29,615 Beijing Hollysys Electric Motor Co., Ltd. 40.00 % 820 6,677 — — 7,497 Suqian Runhe Emerging Industry Investment Center (limited partnership) 29.97 % 9,754 (163 ) — — 9,591 China Techenergy Co., Ltd. 40.00 % — 11,811 — — 11,811 Ningbo Hollysys Intelligent Technologies Co., Ltd. 40.00 % 4,369 (4,369 ) — — Hunan LingXiang Maglev Technology Co., Ltd. 17.67 % 1,548 (141 ) — — 1,407 Beijing AIRmaker Technology Co., Ltd. 20.00 % 155 (18 ) — — 137 Southcon Development Sdn Bhd. 30.00 % 219 (111 ) — — 108 Beijing Hollysys Machine Automation Co., Ltd. 30.00 % 464 (464 ) — — — Beijing Jing Yi Intelligent Technologies Innovation Center Co., Ltd. 46.00 % — — — — — 41,203 18,963 — — 60,166 |
WARRANTY LIABILITIES (Tables)
WARRANTY LIABILITIES (Tables) | 12 Months Ended |
Jun. 30, 2021 | |
WARRANTY LIABILITIES | |
Schedule of Warranty Liability | June 30, 2020 2021 Beginning balance $ 12,116 $ 10,064 Expense accrued 2,309 4,431 Expense incurred (4,027 ) (5,639 ) Translation adjustment (334 ) 695 $ 10,064 $ 9,551 Less: Current portion of warranty liabilities (6,604 ) (5,902 ) Long-term $ 3,460 $ 3,649 |
LONG-TERM LOANS (Tables)
LONG-TERM LOANS (Tables) | 12 Months Ended |
Jun. 30, 2021 | |
LONG-TERM LOANS | |
Schedule Of Debt Instruments | June 30, 2020 2021 MYR denominated loans (i) 842 842 SGD denominated loans (ii) 258 164 USD denominated loan (iii) 15,000 15,000 $ 16,100 $ 16,006 Less: Current portion (320 ) (15,308 ) $ 15,780 $ 698 i. The MYR denominated loans are repayable in 3 to 75 installments with the last installment due in Ap ri ii. The SGD denominated loans are repayable in 10 to 31 installments with the last installment due on March 4, 2024. For the years ended June 30, 2020 and 2021, the effective interest rates ranged from 2.44% to 2.78% per annum and 2.44% to 2.78% per annum, respectively. The borrowing is secured by vehicles with a total carrying value of $305 and $204 as of June 30, 2020 and 2021, respectively. iii. The USD denominated loan was drawn on April 24, 2020 and is |
Schedule of principal and interest payments for all outstanding long-term loans | Scheduled principal for all outstanding long-term loans as of June 30, 2021 are as follows: Year ending June 30, 2022 $ 15,308 2023 308 2024 216 2025 34 2026 19 2026 onwards 121 $ 16,006 |
SHARE-BASED COMPENSATION EXPE_2
SHARE-BASED COMPENSATION EXPENSES (Tables) | 12 Months Ended |
Jun. 30, 2021 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Schedule of share option activity | A summary of the share option activity for the year ended June 30, 2021 is as shown below: Share Options Number of Weighted Weighted average Aggregate Outstanding, vested and exercisable at June 30, 2020 — — — — Granted on November 16, 2020 90,000 11.85 10 — Granted on March 17, 2021 478,500 11.85 9.95 1,165 Outstanding, vested and exercisable at June 30, 2021 568,500 11.85 9.66 1,734 |
Schedule of summary of the restricted share activity | A summary of the restricted share activity for the year ended June 30, 2020 and 2021 is as follows: Number of restricted shares Weighted average grant-date fair value Un-vested at June 30, 2019 18,125 20.09 Granted 67,500 16.06 Vested (22,500 ) 19.31 Un-vested 63,125 16.06 Granted 1,434,500 11.85 Vested (177,288 ) 13.35 Un-vested 1,320,337 11.85 |
INCOME TAX (Tables)
INCOME TAX (Tables) | 12 Months Ended |
Jun. 30, 2021 | |
Income Tax Disclosure [Abstract] | |
Schedule of income (losses) before income tax | The Company’s income (losses) before income taxes consists of: Year ended June 30, 2019 2020 2021 PRC $ 155,691 $ 140,539 $ 137,520 Non-PRC (11,968 ) (43,042 ) (27,628 ) $ 143,723 $ 97,497 $ 109,892 |
Schedule of Income tax expense | Income tax expense, most of which is incurred in the PRC, consists of: Year ended June 30, 2019 2020 2021 Current income tax expense PRC 22,206 10,369 25,634 Non-PRC 2,175 1,388 758 $ 24,381 $ 11,757 $ 26,392 Deferred income tax (benefit) expense PRC (5,722 ) 5,577 (7,971 ) Non-PRC (475 ) 837 2,133 $ (6,197 ) 6,414 (5,838 ) $ 18,184 $ 18,171 $ 20,554 |
Schedule of Reconciliation of the income tax expenses | Reconciliation of the income tax expenses as computed by applying the PRC statutory tax rate of 25% to income before income taxes and the actual income tax expenses is as follows: Year ended June 30, 2019 2020 2021 Income before income taxes $ 143,723 $ 97,497 $ 109,892 Expected income tax expense at statutory tax rate in the PRC 35,931 24,374 33,221 Effect of different tax rates in various jurisdictions 1,781 3,997 4,665 Effect of preferential tax treatment (13,444 ) (11,797 ) (14,334 ) Effect of non-taxable (1,500 ) (250 ) (4,770 ) Effect of additional deductible research and development expenses (5,833 ) (7,241 ) (9,838 ) Effect of non-deductible 5,489 10,661 6,644 Over provision of income tax in previous years (8,457 ) (6,118 ) 2,102 Change in valuation allowance 1,399 3,746 1,718 Withholding tax on dividends paid by subsidiaries 2,847 799 — Others (29 ) — 1,146 Total $ 18,184 $ 18,171 $ 20,554 |
Schedule of deferred tax assets/liabilities | The breakdown of deferred tax assets/liabilities caused by the temporary difference is shown as below: June 30, 2020 2021 Deferred tax assets Allowance for doubtful accounts $ 7,808 $ 12,480 Deferred subsidies 2,484 529 Warranty liabilities 984 911 Inventory provision 687 199 Long-term assets 397 622 Deferred revenue — 105 Provision for loss contracts 99 64 Net operating loss carry forward 13,824 17,290 Valuation allowance (14,821 ) (17,424 ) Others 325 214 Total deferred tax assets $ 11,787 $ 14,990 Deferred tax liabilities Property, plant and equipment $ (11 ) $ (678 ) Costs and estimated earnings in excess of billings (3,396 ) (1,159 ) Share of net losses of equity investees (668 ) (1,352 ) PRC dividend withholding tax (6,654 ) (8,829 ) Intangible assets and other non-current (6,089 ) (7,321 ) Total deferred tax liabilities $ (16,818 ) $ (19,339 ) |
OPERATING LEASES (Table)
OPERATING LEASES (Table) | 12 Months Ended |
Jun. 30, 2021 | |
Lessee, Operating Lease, Description [Abstract] | |
Schedule of lease and non-lease components | Fiscal year ended June 30, 2021 Operating lease costs 2,324 Short-term lease costs 1,000 Amortization of prepaid land leases 454 Total lease costs 3,778 |
Schedule of other information related to operating leases | Fiscal year ended June 30, 2021 Other information Cash paid for amounts included in the measurement of operating lease liabilities 4,045 ROU assets obtained in exchange for new operating lease liabilities 3,011 Weighted-average remaining lease term (in years): Operating leases 1.97 Weighted-average discount rate: Operating leases 4.17 % |
Schedule of Future Minimum Rental Payments for Operating Leases | Future minimum lease payments for operating leases as of June 30, 2021 are as follows: As of June 30, 2022 $ 3,302 2023 2,091 2024 701 2025 16 2026 and onwards — Total minimum lease payments 6,110 Less: imputed interest 84 Total lease liability balance $ 6,026 |
Schedule of Operating Lease Payments | Year ending June 30, Minimum lease payments 2022 $ 3,523 2023 3,628 2024 2,189 2025 1,942 2026 2,000 Thereafter 14,940 Total minimum lease payments to be received $ 28,222 |
INCOME PER SHARE (Tables)
INCOME PER SHARE (Tables) | 12 Months Ended |
Jun. 30, 2021 | |
Earnings Per Share [Abstract] | |
Schedule of the computation of basic and diluted net income per share | The following table sets forth the computation of basic and diluted net income per share attributable to the Company’s common shareholders for the years indicated: Year ended June 30, 2019 2020 2021 Numerator: Net income attributable to the Company as reported $ 125,261 $ 79,396 $ 89,709 Less: Earnings allocated to participating securities — (83 ) — Net income attributable to common stockholders - basic $ 125,261 $ 79,313 $ 89,709 Add: Effect of Convertible Bond 562 93 — Earnings allocated to participating securities — 83 — Less: Earnings reallocated to participating securities considering potentially dilutive securities — (83 ) — Net income attributable to common stockholders – diluted $ 125,823 $ 79,406 $ 89,709 Denominator: Weighted average ordinary shares outstanding used in computing basic income per share(i) 60,456,524 60,478,717 60,566,709 Effect of dilutive securities Convertible Bond 796,200 130,525 — Restricted shares 21,160 — 947,040 Weighted average ordinary shares outstanding used in computing diluted income per share 61,273,884 60,609,242 61,513,749 Income per share – basic $ 2.07 1.31 1.48 Income per share – diluted $ 2.05 1.31 1.46 (i) Vested and unissued restricted shares of 114,425, 15,000 and 15,000 shares are included in the computation of basic and diluted income per share for the years ended June 30, 2019, 2020 and 2021, respectively. The effect of share options has been excluded from the computation of diluted income per share for the years ended June 30, 2019 and 2020 as their effects would be anti-dilutive. |
RELATED PARTY TRANSACTIONS (Tab
RELATED PARTY TRANSACTIONS (Tables) | 12 Months Ended |
Jun. 30, 2021 | |
Related Party Transactions [Abstract] | |
Schedule Of Amount Due From Related Parties | Due from related parties June 30, 2020 2021 China Techenergy $ 14,301 $ 19,241 Ningbo Hollysys 6,142 11,190 Hollycon 961 64 Hunan LingXiang 40 — Others — 3 Allowance for credit losses — (2,255 ) $ 21,444 $ 28,243 |
Schedule Of Amount Due To Related Parties | Due to related parties June 30, 2020 2021 China Techenergy $ 2,967 $ 1,028 Ningbo Hollysys 609 529 Hollycon — 23 Hunan LingXiang — 81 $ 3,576 $ 1,661 The Company has no fixed repayment terms for these related parties’ transactions. |
Schedule of Related Party Transactions | Transactions with related parties Purchases of goods and services from: Year ended June 30, 2019 2020 2021 Ningbo Hollysys (i) $ 702 $ 1,838 $ 3,051 Hollycon 4 — 7 $ 706 $ 1,838 $ 3,058 (i) The Company purchases products from Ningbo Hollysys which are customers Sales of goods and integrated solutions to: Year ended June 30, 2019 2020 2021 China Techenergy (i) $ 11,094 $ 1,711 $ 8,458 Hollycon (ii) 44 1,302 866 Ningbo Hollysys (ii) 472 179 308 HuNan LingXiang — 38 — $ 11,610 $ 3,230 $ 9,632 (i) The Company sells automation control systems to China Techenergy which is used for non-safety non-safety (ii) The Company sells products to Hollycon and Ningbo Hollysys, which incorporate the Company’s product with their Other income from: Year ended June 30, 2019 2020 2021 Ningbo Hollysys (i) $ 1,548 $ 2,214 $ 2,281 Hollycon (ii) 972 880 460 China Techenergy — 1,122 — $ 2,520 $ 4,216 $ 2,741 (i) The Company entered into an operating lease agreement with Ningbo Hollysys to lease part of a building in Beijing. The lease term is for one year from the commencement date of January 1, 2021 to December 31, 2021. (ii) The Company entered into an operating lease agreement with Hollycon to lease part of building located in Beijing. The lease term is for one year from the commencement date of January 1, 2021 to December 31, 2021. Research and development: Year ended June 30, 2019 2020 2021 Ningbo Hollysys (i) $ — $ 655 $ 212 (i) The Company purchases research and development services from Ningbo Hollysys for research and development projects in the field of intelligent manufacturing. |
COMMITMENTS AND CONTINGENCIES (
COMMITMENTS AND CONTINGENCIES (Tables) | 12 Months Ended |
Jun. 30, 2021 | |
COMMITMENTS AND CONTINGENCIES | |
Schedule of purchase obligation | Years ending June 30, Minimum payments 2022 $ 229,407 2023 21,143 2024 14,095 2025 7,048 2026 14,095 |
SEGMENT REPORTING (Tables)
SEGMENT REPORTING (Tables) | 12 Months Ended |
Jun. 30, 2021 | |
Segment Reporting [Abstract] | |
Schedule of Reconciliation of revenue from segments to consolidated | Summarized information by segments for the years ended June 30, 2019, 2020, and 2021 is as follows: Year ended June 30, 2019 IA Rail M&E Consolidated Revenues from external customers Integrated solutions contracts revenue $ 191,668 148,365 127,338 467,371 Product sales 27,390 5,712 — 33,102 Maintenance service revenue 13,978 53,359 288 67,625 Extended warranty service revenue 762 1,481 — 2,243 Total 233,798 208,917 127,626 570,341 Costs of revenue 139,010 109,567 110,598 359,175 Gross profit $ 94,788 99,350 17,028 211,166 Year ended June 30, 2020 IA Rail M&E Consolidated Revenues from external customers Integrated solutions contracts revenue $ 207,421 145,750 61,101 414,272 Product sales 15,504 4,640 — 20,144 Maintenance service revenue 15,985 49,140 916 66,041 Extended warranty service revenue 1,061 1,809 — 2,870 Total 239,971 201,339 62,017 503,327 Costs of revenue 154,298 107,382 51,079 312,759 Gross profit $ 85,673 93,957 10,938 190,568 Year ended June 30, 2021 IA Rail M&E Consolidated Revenues from external customers Integrated solutions contracts revenue $ 291,106 100,877 68,197 460,180 Product sales 22,772 5,895 — 28,667 Maintenance service revenue 21,402 79,874 46 101,322 Extended warranty service revenue 1,772 1,525 — 3,297 Total 337,052 188,171 68,243 593,466 Costs of revenue 227,107 90,386 57,694 375,187 Gross profit $ 109,945 97,785 10,549 218,279 |
Schedule of Revenues by geographical area | The majority of the Company’s revenues and long-lived assets other than goodwill and intangible assets are derived from and located in the PRC. The following table sets forth the revenues by geographical area: Year ended June 30, 2019 2020 2021 Revenues: PRC $ 438,832 $ 441,305 $ 518,170 Non-PRC 131,509 62,022 75,296 $ 570,341 $ 503,327 $ 593,466 |
Schedule of long-lived assets other than goodwill and intangible assets by geographical area | The following table sets forth the long-lived assets other than goodwill and intangible assets by geographical area: June 30, 2020 2021 Long-lived assets other than goodwill and acquired intangible assets PRC $ 129,340 $ 163,343 Non-PRC 11,938 11,458 $ 141,278 $ 174,801 |
CONDENSED FINANCIAL INFORMATI_2
CONDENSED FINANCIAL INFORMATION OF THE PARENT COMPANY (Tables) | 12 Months Ended |
Jun. 30, 2021 | |
Condensed Financial Information Disclosure [Abstract] | |
Schedule of condensed balance sheet | CONDENSED BALANCE SHEETS June 30, 2020 2021 ASSETS Current assets: Cash and cash equivalents $ 13,265 $ 7,824 Short-term investments 11,318 — Other receivables, net 31 — Amounts due from subsidiaries 53,503 53,503 Prepaid expenses 97 166 Total current assets 78,214 61,493 Investment in subsidiaries 1,046,725 1,221,755 Total assets $ 1,124,939 $ 1,283,248 LIABILITIES AND STOCKHOLDERS’ EQUITY Current liabilities: Accrued liabilities — 5,143 Amounts due to subsidiaries 140,456 140,415 Total liabilities 140,456 145,558 Equity: Ordinary shares, par value $0.001 per share, 100,000,000 shares authorized; 60,537,099 shares issued and 61,367,337 shares issued and 2020 2021 61 61 Additional paid-in 224,043 233,768 Retained earnings 823,896 871,047 Accumulated other comprehensive ( ) income (63,517 ) 32,814 Total equity 984,483 1,137,690 Total liabilities and equity $ 1,124,939 $ 1,283,248 |
Schedule of condensed statement of comprehensive income | CONDENSED STATEMENTS OF COMPREHENSIVE INCOME Year Ended June 30, 2019 2020 2021 General and administrative expenses $ 1,511 $ 1,344 $ 21,090 Loss from operations (1,511 ) (1,344 ) (21,090 ) Other expense, net (346 ) — Interest income — 309 117 Interest expenses (562 ) (90 ) — Foreign exchange ( ) gains (72 ) (1,043 ) 1,532 Share of net income of subsidiaries $ 127,752 $ 81,564 $ 109,150 Income before income taxes 125,261 79,396 89,709 Income tax expenses — — — Net income 125,261 79,396 89,709 Other comprehensive income, net of tax of nil Translation adjustment (31,341 ) (27,996 ) 96,331 Comprehensive income $ 93,920 $ 51,400 $ 186,040 |
Schedule of condensed statement of cash flows | CONDENSED STATEMENTS OF CASH FLOWS Year ended June 30, 2019 2020 2021 Cash flows from operating activities: Net income $ 125,261 $ 79,396 $ 89,709 Adjustments to reconcile net income to net cash used in operating activities: Share of net income of subsidiaries (127,752 ) (81,564 ) (109,150 ) Share-based compensation expenses 238 410 9,724 Accretion of convertible bond 230 57 — Fair value adjustments of a bifurcated derivative 346 — — Change in operating assets and liabilities (28 ) (142 ) 5,065 Net cash used in operating activities $ (1,705 ) $ (1,843 ) $ (4,652 ) Cash flows from investing activities: Loans to subsidiaries (4,200 ) (19,775 ) — Maturity of short-term investments — — 11,318 Net cash (used in) $ (4,200 ) $ (19,775 ) $ 11,318 Cash flows from financing activities: Repayment of convertible bond — (20,753 ) — Proceeds of loans from subsidiaries 43,538 20,000 — Payment of dividends (10,862 ) (12,713 ) (12,107 ) Net cash provided by (used in) $ 32,676 $ (13,466 ) $ (12,107 ) Net increase in cash and cash equivalents $ 26,771 $ (35,084 ) $ (5,441 ) Cash and cash equivalents, beginning of period 21,578 48,349 13,265 Cash and cash equivalents, end of period $ 48,349 $ 13,265 $ 7,824 |
ORGANIZATION AND BUSINESS BAC_3
ORGANIZATION AND BUSINESS BACKGROUND (Details) - USD ($) $ in Thousands | 12 Months Ended | |||
Jun. 30, 2021 | Jun. 30, 2020 | Jun. 30, 2019 | ||
Equity Method Investment Summarized Financial Information [Line Items] | ||||
Current assets | $ 1,387,558 | $ 1,174,494 | ||
Non-current assets | 206,695 | 186,341 | ||
Total assets | 1,594,253 | 1,360,835 | ||
Current liabilities | 422,630 | 327,302 | ||
Total liabilities | 452,285 | 371,949 | ||
Net revenue | 593,466 | 503,327 | $ 570,341 | |
Net profit | 89,338 | 79,326 | 125,539 | |
Net cash provided by (used in) operating activities | 79,283 | 175,124 | $ 100,521 | |
Variable Interest Entity (VIE) or Potential VIE, Information Unavailability [Member] | ||||
Equity Method Investment Summarized Financial Information [Line Items] | ||||
Current assets | 5,588 | 9,708 | ||
Non-current assets | 37 | 183 | ||
Total assets | 5,625 | 9,891 | ||
Current liabilities | 3,230 | 6,919 | ||
Total liabilities | 3,230 | 6,919 | ||
Net revenue | 46 | 981 | ||
Cost of revenue | [1] | (2,177) | (2,147) | |
Net profit | 2,223 | 3,128 | ||
Net cash provided by (used in) operating activities | $ (451) | $ 1,120 | ||
[1] | Cost of revenue is in credit side because of the reversal of warranties provision which was overprovided in previous years. |
ORGANIZATION AND BUSINESS BAC_4
ORGANIZATION AND BUSINESS BACKGROUND - Additional Information (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Jun. 30, 2021 | Jun. 30, 2020 | Jul. 31, 2017 | |
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items] | |||
Percentage Of Variable ReturnsLoss attributable to CCPL | 95.00% | ||
Series of Individually Immaterial Business Acquisitions [Member] | |||
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items] | |||
Business Acquisition, Equity Interest Issued or Issuable, Description | In November 2015, CECL was established in Doha, Qatar, by CCPL, a wholly-owned subsidiary of the Company incorporated under the laws of Singapore, and a Qatar citizen as a nominee shareholder, with 49% and 51% of equity interest in CECL, respectively. | ||
Subsidiaries [Member] | |||
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items] | |||
Due to Affiliate, Current | $ 121 | $ 267 | |
Due from Affiliate, Current | $ 4,151 | $ 7,385 | |
Bond M E Sdn Bhd [Member] | |||
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items] | |||
Noncontrolling Interest, Ownership Percentage by Parent | 100.00% | ||
Bond Corporation Pte Ltd [Member] | Bond M E Sdn Bhd [Member] | |||
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items] | |||
Equity Method Investment, Ownership Percentage | 49.10% |
SUMMARY OF SIGNIFICANT ACCOUN_4
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Property, plant and equipment, net (Details) | 12 Months Ended |
Jun. 30, 2021 | |
Buildings [Member] | Minimum [Member] | |
Property, Plant and Equipment [Line Items] | |
Property, Plant and Equipment, Useful Life | 30 years |
Buildings [Member] | Maximum [Member] | |
Property, Plant and Equipment [Line Items] | |
Property, Plant and Equipment, Useful Life | 50 years |
Machinery [Member] | Minimum [Member] | |
Property, Plant and Equipment [Line Items] | |
Property, Plant and Equipment, Useful Life | 5 years |
Machinery [Member] | Maximum [Member] | |
Property, Plant and Equipment [Line Items] | |
Property, Plant and Equipment, Useful Life | 10 years |
Computer Software, Intangible Asset [Member] | Minimum [Member] | |
Property, Plant and Equipment [Line Items] | |
Property, Plant and Equipment, Useful Life | 3 years |
Computer Software, Intangible Asset [Member] | Maximum [Member] | |
Property, Plant and Equipment [Line Items] | |
Property, Plant and Equipment, Useful Life | 10 years |
Vehicles [Member] | Minimum [Member] | |
Property, Plant and Equipment [Line Items] | |
Property, Plant and Equipment, Useful Life | 5 years |
Vehicles [Member] | Maximum [Member] | |
Property, Plant and Equipment [Line Items] | |
Property, Plant and Equipment, Useful Life | 10 years |
Electronic and Other Equipment [Member] | Minimum [Member] | |
Property, Plant and Equipment [Line Items] | |
Property, Plant and Equipment, Useful Life | 3 years |
Electronic and Other Equipment [Member] | Maximum [Member] | |
Property, Plant and Equipment [Line Items] | |
Property, Plant and Equipment, Useful Life | 10 years |
SUMMARY OF SIGNIFICANT ACCOUN_5
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Intangible assets, net (Details) - Patents And Copyrights [Member] | 12 Months Ended |
Jun. 30, 2021 | |
Maximum [Member] | |
Finite-Lived Intangible Assets [Line Items] | |
Finite-Lived Intangible Asset, Useful Life | 10 years |
Minimum [Member] | |
Finite-Lived Intangible Assets [Line Items] | |
Finite-Lived Intangible Asset, Useful Life | 5 years |
SUMMARY OF SIGNIFICANT ACCOUN_6
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Schedule of cumulative effect of the changes made to the company consolidated balance sheet (Detail) - USD ($) $ in Thousands | Jun. 30, 2021 | Jul. 01, 2020 | Jun. 30, 2020 |
Assets and Liabilities, Lessee [Abstract] | |||
Accounts receivable | $ 226,165 | ||
Accounts receivable retention | $ 4,943 | 10,660 | $ 6,088 |
Costs and estimated earnings in excess of billings | 196,706 | 186,077 | 186,879 |
Other receivables | 17,458 | ||
Due from related parties | 28,243 | 19,564 | 21,444 |
Deferred tax assets | $ 12,480 | 10,677 | $ 8,909 |
Retained earnings | 744,022 | ||
Previously Reported [Member] | |||
Assets and Liabilities, Lessee [Abstract] | |||
Accounts receivable | 242,449 | ||
Accounts receivable retention | 10,805 | ||
Costs and estimated earnings in excess of billings | 189,188 | ||
Other receivables | 28,257 | ||
Due from related parties | 21,444 | ||
Deferred tax assets | 8,909 | ||
Retained earnings | 774,473 | ||
Adjustment due to ASU 2016-13 [Member] | |||
Assets and Liabilities, Lessee [Abstract] | |||
Accounts receivable | (16,284) | ||
Accounts receivable retention | (145) | ||
Costs and estimated earnings in excess of billings | (3,111) | ||
Other receivables | (10,799) | ||
Due from related parties | (1,880) | ||
Deferred tax assets | 1,768 | ||
Retained earnings | $ (30,451) |
SUMMARY OF SIGNIFICANT ACCOUN_7
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Schedule of accounts receivables credit losses (Detail) - USD ($) $ in Thousands | 12 Months Ended | |||
Jun. 30, 2021 | Jun. 30, 2020 | Jun. 30, 2019 | Jul. 01, 2020 | |
Accounts Receivable Allowance For Credit Loss [Line Items] | ||||
Balance at the beginning of year | $ 41,618 | $ 47,162 | $ 49,094 | |
Adoption of ASU 2016-13 | $ 744,022 | |||
Amounts written off charged against the allowance | (3,965) | (4,399) | (1,959) | |
Translation adjustments | 7,749 | 178 | 4,318 | |
Balance at the end of year | 66,839 | 41,618 | $ 47,162 | |
Accounts Receivable [Member] | ||||
Accounts Receivable Allowance For Credit Loss [Line Items] | ||||
Balance at the beginning of year | 41,618 | |||
Provision for expected credit losses, net of recoveries | 7,761 | |||
Amounts written off charged against the allowance | (3,965) | |||
Translation adjustments | 5,159 | |||
Balance at the end of year | 67,002 | $ 41,618 | ||
Accounts Receivable [Member] | Cumulative Effect, Period of Adoption, Adjustment [Member] | ||||
Accounts Receivable Allowance For Credit Loss [Line Items] | ||||
Adoption of ASU 2016-13 | $ 16,429 |
SUMMARY OF SIGNIFICANT ACCOUN_8
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Schedule of credit losses on costs and estimated earnings (Detail) - USD ($) $ in Thousands | 12 Months Ended | |||
Jun. 30, 2021 | Jun. 30, 2020 | Jun. 30, 2019 | Jul. 01, 2020 | |
Accounts Receivable Allowance For Credit Loss [Line Items] | ||||
Balance at the beginning of year | $ 41,618 | $ 47,162 | $ 49,094 | |
Adoption of ASU 2016-13 | $ 744,022 | |||
Translation adjustments | 7,749 | 178 | 4,318 | |
Balance at the end of year | 66,839 | 41,618 | $ 47,162 | |
Costs And Estimated Earnings In Excess Of Billings [Member] | ||||
Accounts Receivable Allowance For Credit Loss [Line Items] | ||||
Balance at the beginning of year | 6,150 | |||
Provision for expected credit losses, net of recoveries | 1,758 | |||
Translation adjustments | 816 | |||
Balance at the end of year | 11,835 | $ 6,150 | ||
Costs And Estimated Earnings In Excess Of Billings [Member] | Accounting Standards Update 2016-13 [Member] | ||||
Accounts Receivable Allowance For Credit Loss [Line Items] | ||||
Adoption of ASU 2016-13 | $ 3,111 |
SUMMARY OF SIGNIFICANT ACCOUN_9
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Additional Information (Details) - USD ($) $ / shares in Units, $ in Thousands | 12 Months Ended | |||
Jun. 30, 2021 | Jun. 30, 2020 | Jun. 30, 2019 | Jul. 01, 2020 | |
Accounting Policies [Line Items] | ||||
Percentage Of Recognized Contractual Revenue | 100.00% | |||
Goodwill, Impairment Loss | $ 0 | $ 35,767 | $ 11,623 | |
Percentage Of Value Added Tax Refunded | 3.00% | |||
Percentage Of After Tax Income Transferred To Statutory Reserved | 10.00% | |||
Government Grants Received | $ 3,934 | 6,930 | 6,559 | |
Revenue from Grants | $ 593,466 | 503,327 | 570,341 | |
Integrated Solutions Contracts Range Minimum | 6 months | |||
Integrated Solutions Contracts Range Maximum | 5 years | |||
Other Comprehensive Income (Loss), Foreign Currency Transaction and Translation Adjustment, Net of Tax, Portion Attributable to Parent | $ 96,331 | $ (27,996) | $ (31,341) | |
Decreased Net Income Per Share Basic | $ 0.22 | $ 0.23 | $ 0.23 | |
Decreased Net Income Per Share diluted | $ 0.22 | $ 0.23 | $ 0.23 | |
Decreased Net Income | $ 13,528 | $ 14,181 | $ 14,019 | |
Percentage of currency depreciation or appreciation | 8.62% | 2.93% | 3.65% | |
Statutory Reserve Balance Of Registered Capital | 50.00% | |||
Decreased in net income | $ 9,735 | $ 4,603 | $ 2,641 | |
Decreased net income per share basic | $ 0.16 | $ 0.08 | $ 0.04 | |
Decreased net income per share diluted | $ 0.16 | $ 0.08 | $ 0.04 | |
Retained earnings | $ 744,022 | |||
Income tax recoverable | $ 464 | $ 870 | ||
Concord [Member] | ||||
Accounting Policies [Line Items] | ||||
Goodwill, Impairment Loss | $ 11,623 | |||
Bond [Member] | ||||
Accounting Policies [Line Items] | ||||
Goodwill, Impairment Loss | 35,767 | |||
Accounting Standards Update 2016-13 [Member] | ||||
Accounting Policies [Line Items] | ||||
Retained earnings | 30,451 | |||
Income tax recoverable | $ 1,768 | |||
Grant [Member] | ||||
Accounting Policies [Line Items] | ||||
Revenue from Grants | 9,192 | 4,655 | 4,888 | |
Service [Member] | ||||
Accounting Policies [Line Items] | ||||
Revenue from Grants | 104,619 | 68,911 | $ 69,868 | |
Malaysia [Member] | ||||
Accounting Policies [Line Items] | ||||
Deposits Assets | 4,261 | 2,500 | ||
Singapore [Member] | ||||
Accounting Policies [Line Items] | ||||
Deposits Assets | 4,293 | 16,127 | ||
PRC [Member] | ||||
Accounting Policies [Line Items] | ||||
Deposits Assets | $ 40,254 | $ 306,322 | ||
Dubai And Qatar [Member] | ||||
Accounting Policies [Line Items] | ||||
Percentage Of After Tax Income Transferred To Statutory Reserved | 10.00% | |||
Statutory Reserve Balance Of Registered Capital | 50.00% | |||
Accounts Receivable [Member] | Customer Concentration Risk [Member] | Service [Member] | ||||
Accounting Policies [Line Items] | ||||
Concentration Risk, Percentage | 10.00% | |||
Revenue Benchmark [Member] | Customer Concentration Risk [Member] | Service [Member] | ||||
Accounting Policies [Line Items] | ||||
Concentration Risk, Percentage | 10.00% | |||
Minimum [Member] | ||||
Accounting Policies [Line Items] | ||||
Effective Value Added Tax Rate | 13.00% | |||
Contract Period | 6 months | |||
Minimum [Member] | Investments in Equity Investees and Equity Securities [Member] | ||||
Accounting Policies [Line Items] | ||||
Business Acquisition, Percentage of Voting Interests Acquired | 20.00% | |||
Minimum [Member] | Use Rights [Member] | ||||
Accounting Policies [Line Items] | ||||
Finite-Lived Intangible Asset, Useful Life | 49 years | |||
Maximum [Member] | ||||
Accounting Policies [Line Items] | ||||
Effective Value Added Tax Rate | (16.00%) | |||
Contract Period | 3 years | |||
Maximum [Member] | Investments in Equity Investees and Equity Securities [Member] | ||||
Accounting Policies [Line Items] | ||||
Business Acquisition, Percentage of Voting Interests Acquired | 50.00% | |||
Maximum [Member] | Use Rights [Member] | ||||
Accounting Policies [Line Items] | ||||
Finite-Lived Intangible Asset, Useful Life | 88 years |
INVENTORIES (Details)
INVENTORIES (Details) - USD ($) $ in Thousands | Jun. 30, 2021 | Jun. 30, 2020 |
Inventory [Line Items] | ||
Raw materials | $ 23,469 | $ 18,307 |
Work in progress | 12,165 | 17,561 |
Finished goods | 12,278 | 12,342 |
Inventories | $ 47,912 | $ 48,210 |
ACCOUNTS RECEIVABLE (Details)
ACCOUNTS RECEIVABLE (Details) - USD ($) $ in Thousands | Jun. 30, 2021 | Jun. 30, 2020 |
Receivables [Abstract] | ||
Notes receivable | $ 54,830 | $ 27,059 |
Accounts receivable | 342,862 | 257,008 |
Allowance for credit losses | (66,839) | (41,618) |
Accounts receivable and Notes receivable, net | $ 330,853 | $ 242,449 |
ACCOUNTS RECEIVABLE - Allowance
ACCOUNTS RECEIVABLE - Allowance For Credit Losses (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Jun. 30, 2021 | Jun. 30, 2020 | Jun. 30, 2019 | |
Receivables [Abstract] | |||
Balance at the beginning of year | $ 41,618 | $ 47,162 | $ 49,094 |
Adoption of ASU 2016-13 | 16,284 | ||
Additions | 7,749 | 178 | 4,318 |
Deconsolidation of a subsidiary | (2,733) | ||
Written off | (3,965) | (4,399) | (1,959) |
Translation adjustment | 5,153 | (1,323) | (1,558) |
Balance at the end of year | $ 66,839 | $ 41,618 | $ 47,162 |
COSTS AND ESTIMATED EARNINGS _3
COSTS AND ESTIMATED EARNINGS IN EXCESS OF BILLINGS (Details) - USD ($) $ in Thousands | Jun. 30, 2021 | Jul. 01, 2020 | Jun. 30, 2020 | Jun. 30, 2019 | Jun. 30, 2018 |
COSTS AND ESTIMATED EARNINGS IN EXCESS OF BILLINGS | |||||
Contracts costs incurred plus estimated earnings | $ 988,496 | $ 1,046,803 | |||
Less: Progress billings | (779,955) | (853,774) | |||
Cost and estimated earnings in excess of billings | 208,541 | 193,029 | |||
Less: Allowance for credit losses | (11,835) | (6,150) | $ (6,981) | $ (9,929) | |
Cost and estimated earnings in excess of billings, Total | $ 196,706 | $ 186,077 | $ 186,879 |
COSTS AND ESTIMATED EARNINGS _4
COSTS AND ESTIMATED EARNINGS IN EXCESS OF BILLINGS - Movements in Allowance For Credit Losses (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Jun. 30, 2021 | Jun. 30, 2020 | Jun. 30, 2019 | |
COSTS AND ESTIMATED EARNINGS IN EXCESS OF BILLINGS | |||
Balance at the beginning of year | $ 6,150 | $ 6,981 | $ 9,929 |
Adoption of ASU 2016-13 | 3,111 | ||
Additions (reversals) | 1,758 | (651) | (2,149) |
Deconsolidation of a subsidiary | (465) | ||
Translation adjustments | 816 | (180) | (334) |
Balance at the end of year | $ 11,835 | $ 6,150 | $ 6,981 |
REVENUE FROM CONTRACTS WITH C_3
REVENUE FROM CONTRACTS WITH CUSTOMERS - Additional Information (Details) $ in Millions | 12 Months Ended |
Jun. 30, 2021USD ($) | |
REVENUE FROM CONTRACTS WITH CUSTOMERS | |
Unsatisfied (or partially unsatisfied) performance obligations in contracts with its customers | $ 685 |
Period over which the entity expects to recognize the majority of its remaining performance obligations as revenue | 3 years |
REVENUE FROM CONTRACTS WITH C_4
REVENUE FROM CONTRACTS WITH CUSTOMERS - Disaggregated Revenue Information (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Jun. 30, 2021 | Jun. 30, 2020 | Jun. 30, 2019 | |
Disaggregation of Revenue [Line Items] | |||
Revenues | $ 593,466 | $ 503,327 | $ 570,341 |
PRC [Member] | |||
Disaggregation of Revenue [Line Items] | |||
Revenues | 518,170 | 441,305 | 438,832 |
Non-PRC [Member] | |||
Disaggregation of Revenue [Line Items] | |||
Revenues | 75,296 | $ 62,022 | $ 131,509 |
Integrated solutions contracts revenue | |||
Disaggregation of Revenue [Line Items] | |||
Revenues | 460,180 | ||
Integrated solutions contracts revenue | PRC [Member] | |||
Disaggregation of Revenue [Line Items] | |||
Revenues | 385,592 | ||
Integrated solutions contracts revenue | Non-PRC [Member] | |||
Disaggregation of Revenue [Line Items] | |||
Revenues | 74,588 | ||
Product [Member] | |||
Disaggregation of Revenue [Line Items] | |||
Revenues | 28,667 | ||
Product [Member] | PRC [Member] | |||
Disaggregation of Revenue [Line Items] | |||
Revenues | 28,200 | ||
Product [Member] | Non-PRC [Member] | |||
Disaggregation of Revenue [Line Items] | |||
Revenues | 467 | ||
Maintenance [Member] | |||
Disaggregation of Revenue [Line Items] | |||
Revenues | 101,322 | ||
Maintenance [Member] | PRC [Member] | |||
Disaggregation of Revenue [Line Items] | |||
Revenues | 101,081 | ||
Maintenance [Member] | Non-PRC [Member] | |||
Disaggregation of Revenue [Line Items] | |||
Revenues | 241 | ||
Extended Warranty Service Revenue [Member] | |||
Disaggregation of Revenue [Line Items] | |||
Revenues | 3,297 | ||
Extended Warranty Service Revenue [Member] | PRC [Member] | |||
Disaggregation of Revenue [Line Items] | |||
Revenues | $ 3,297 |
REVENUE FROM CONTRACTS WITH C_5
REVENUE FROM CONTRACTS WITH CUSTOMERS - Contract assets and contract liabilities (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Jun. 30, 2021 | Jun. 30, 2020 | |
REVENUE FROM CONTRACTS WITH CUSTOMERS | ||
Revenue recognized which was previously deferred | $ 78,453 | |
Contract assets and contract liabilities | ||
Contract assets, current | 202,462 | $ 194,511 |
Contract assets, non-current | 5,627 | 7,026 |
Contract liabilities | $ 185,596 | $ 139,242 |
PROPERTY, PLANT AND EQUIPMENT_2
PROPERTY, PLANT AND EQUIPMENT (Details) - USD ($) $ in Thousands | Jun. 30, 2021 | Jun. 30, 2020 |
Property, Plant and Equipment [Line Items] | ||
Property, Plant and Equipment, Gross | $ 173,469 | $ 144,558 |
Less: Accumulated depreciation and impairment | (79,423) | (66,508) |
Property, plant and equipment, net | 94,046 | 78,050 |
Buildings [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property, Plant and Equipment, Gross | 73,617 | 67,520 |
Machinery [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property, Plant and Equipment, Gross | 15,110 | 12,941 |
Computer Software, Intangible Asset [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property, Plant and Equipment, Gross | 16,294 | 14,222 |
Vehicles [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property, Plant and Equipment, Gross | 4,860 | 4,675 |
Electronic and Other Equipment [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property, Plant and Equipment, Gross | 41,154 | 36,647 |
Construction in Progress [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property, Plant and Equipment, Gross | $ 22,434 | $ 8,553 |
PROPERTY, PLANT AND EQUIPMENT -
PROPERTY, PLANT AND EQUIPMENT - Assets leased to others under operating leases (Details) - Assets Leased To Other [Member] - Buildings [Member] - USD ($) $ in Thousands | Jun. 30, 2021 | Jun. 30, 2020 |
Property Subject to or Available for Operating Lease [Line Items] | ||
Buildings leased to others - at original cost | $ 23,491 | $ 21,467 |
Less: accumulated depreciation | (7,950) | (6,605) |
Buildings leased to others - net | $ 15,541 | $ 14,862 |
PROPERTY, PLANT AND EQUIPMENT_3
PROPERTY, PLANT AND EQUIPMENT - Additional Information (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Jun. 30, 2021 | Jun. 30, 2020 | Jun. 30, 2019 | |
PROPERTY, PLANT AND EQUIPMENT | |||
Depreciation, Depletion and Amortization | $ 9,959 | $ 8,483 | $ 7,879 |
Property Plant And Equipment Pledged For Long Term Loans | 1,168 | 1,178 | |
Property Plant And Equipment Pledged For Line Of Credit | $ 2,888 | $ 2,854 |
PREPAID LAND LEASES (Details)
PREPAID LAND LEASES (Details) - USD ($) $ in Thousands | Jun. 30, 2021 | Jun. 30, 2020 |
PREPAID LAND LEASES | ||
Prepaid land leases | $ 20,200 | $ 18,681 |
Less: Accumulated amortization | (3,632) | (2,939) |
Deferred Costs, Leasing, Net | $ 16,568 | $ 15,742 |
PREPAID LAND LEASES - Annual Am
PREPAID LAND LEASES - Annual Amortization Of Prepaid Land Leases (Details) $ in Thousands | Jun. 30, 2021USD ($) |
PREPAID LAND LEASES | |
2022 | $ 419 |
2023 | 419 |
2024 | 419 |
2025 | 419 |
2026 | $ 419 |
PREPAID LAND LEASES - Additiona
PREPAID LAND LEASES - Additional Information (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Jun. 30, 2021 | Jun. 30, 2020 | Jun. 30, 2019 | |
PREPAID LAND LEASES | |||
Amortization of Deferred Leasing Fees | $ 454 | $ 384 | $ 264 |
INTANGIBLE ASSETS, NET (Details
INTANGIBLE ASSETS, NET (Details) - Patents and copyrights [Member] - USD ($) $ in Thousands | Jun. 30, 2021 | Jun. 30, 2020 |
Acquired Finite-Lived Intangible Assets [Line Items] | ||
Gross carrying value | $ 2,867 | $ 2,620 |
Accumulated amortization | (1,468) | (907) |
Net carrying value | $ 1,399 | $ 1,713 |
INTANGIBLE ASSETS, NET - Annual
INTANGIBLE ASSETS, NET - Annual Amortization Expense Of Intangible Assets (Details) $ in Thousands | Jun. 30, 2021USD ($) |
INTANGIBLE ASSETS, NET | |
2022 | $ 459 |
2023 | 459 |
2024 | 301 |
2025 | 132 |
2026 | $ 0 |
INTANGIBLE ASSETS, NET - Additi
INTANGIBLE ASSETS, NET - Additional Information (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Jun. 30, 2021 | Jun. 30, 2020 | Jun. 30, 2019 | |
Intangible Assets Net Excluding Goodwill [Line Items] | |||
Amortization of Intangible Assets | $ 316 | $ 300 | $ 311 |
Hollysys Industrial Software [Member] | Patents And Copyrights [Member] | |||
Intangible Assets Net Excluding Goodwill [Line Items] | |||
Amortization of Intangible Assets | $ 316 | $ 300 | $ 311 |
GOODWILL - Changes in the carry
GOODWILL - Changes in the carrying amount (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Jun. 30, 2021 | Jun. 30, 2020 | Jun. 30, 2019 | |
Goodwill [Line Items] | |||
Balance at beginning of year | $ 1,460 | $ 37,054 | |
Goodwill upon acquisition | 958 | ||
Goodwill impairment charge | 0 | (35,767) | $ (11,623) |
Translation adjustment | 138 | (785) | |
Balance at the end of year | 1,598 | 1,460 | 37,054 |
Mechanical And Electrical Solutions [Member] | |||
Goodwill [Line Items] | |||
Balance at beginning of year | 0 | 36,468 | |
Goodwill upon acquisition | 0 | ||
Goodwill impairment charge | (35,767) | ||
Translation adjustment | 0 | (701) | |
Balance at the end of year | 0 | 0 | 36,468 |
Industrial Automation [Member] | |||
Goodwill [Line Items] | |||
Balance at beginning of year | 1,460 | 586 | |
Goodwill upon acquisition | 958 | ||
Goodwill impairment charge | 0 | ||
Translation adjustment | 138 | (84) | |
Balance at the end of year | $ 1,598 | $ 1,460 | $ 586 |
GOODWILL - Additional Informati
GOODWILL - Additional Information (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Jun. 30, 2021 | Jun. 30, 2020 | Jun. 30, 2019 | |
Goodwill [Line Items] | |||
Goodwill, Impairment Loss | $ 0 | $ 35,767 | $ 11,623 |
Bond [Member] | |||
Goodwill [Line Items] | |||
Goodwill, Impairment Loss | $ 35,767 |
EQUITY INVESTMENTS - Long Term
EQUITY INVESTMENTS - Long Term Investments (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Jun. 30, 2021 | Jun. 30, 2020 | |
Schedule Of Equity And Cost Method Investments [Line Items] | ||
Total | $ 60,166 | $ 41,133 |
Suqian Runhe Emerging Industry Investment Center (limited partnership) [Member] | ||
Schedule Of Equity And Cost Method Investments [Line Items] | ||
Interest held (in percentage) | 29.97% | |
Long-term investment, at cost, less impairment | $ 9,754 | |
Share of undistributed profits | (163) | |
Disposal | 0 | |
Advance to investee company | 0 | |
Total | $ 9,591 | |
Beijing IPE Biotechnology Co Ltd [Member] | ||
Schedule Of Equity And Cost Method Investments [Line Items] | ||
Interest held (in percentage) | 22.02% | |
Equity Method Investments [Member] | ||
Schedule Of Equity And Cost Method Investments [Line Items] | ||
Long-term investment, at cost, less impairment | $ 41,203 | 30,144 |
Share of undistributed profits | 18,963 | 12,384 |
Disposal | 0 | (1,395) |
Advance to investee company | 0 | 0 |
Total | $ 60,166 | $ 41,133 |
Equity Method Investments [Member] | China Techenergy Co Ltd [Member] | ||
Schedule Of Equity And Cost Method Investments [Line Items] | ||
Interest held (in percentage) | 40.00% | 40.00% |
Long-term investment, at cost, less impairment | $ 0 | $ 0 |
Share of undistributed profits | 11,811 | 7,919 |
Disposal | 0 | 0 |
Advance to investee company | 0 | 0 |
Total | $ 11,811 | $ 7,919 |
Equity Method Investments [Member] | Beijing Hollysys Electric Motor Co Ltd [Member] | ||
Schedule Of Equity And Cost Method Investments [Line Items] | ||
Interest held (in percentage) | 40.00% | 40.00% |
Long-term investment, at cost, less impairment | $ 820 | $ 749 |
Share of undistributed profits | 6,677 | 5,263 |
Disposal | 0 | 0 |
Advance to investee company | 0 | 0 |
Total | $ 7,497 | $ 6,012 |
Equity Method Investments [Member] | Beijing IPE Biotechnology Co Ltd [Member] | ||
Schedule Of Equity And Cost Method Investments [Line Items] | ||
Interest held (in percentage) | 22.02% | |
Long-term investment, at cost, less impairment | $ 1,395 | |
Share of undistributed profits | 0 | |
Disposal | (1,395) | |
Advance to investee company | 0 | |
Total | $ 0 | |
Equity Method Investments [Member] | Beijing Hollysys Machine Automation Co Ltd [Member] | ||
Schedule Of Equity And Cost Method Investments [Line Items] | ||
Interest held (in percentage) | 30.00% | 30.00% |
Long-term investment, at cost, less impairment | $ 464 | $ 424 |
Share of undistributed profits | (464) | (424) |
Disposal | 0 | 0 |
Advance to investee company | 0 | 0 |
Total | $ 0 | $ 0 |
Equity Method Investments [Member] | Southcon Development Sdn Bhd [Member] | ||
Schedule Of Equity And Cost Method Investments [Line Items] | ||
Interest held (in percentage) | 30.00% | 30.00% |
Long-term investment, at cost, less impairment | $ 219 | $ 211 |
Share of undistributed profits | (111) | (105) |
Disposal | 0 | 0 |
Advance to investee company | 0 | 0 |
Total | $ 108 | $ 106 |
Equity Method Investments [Member] | Beijing Hollycon Medicine Technology Co., Ltd [Member] | ||
Schedule Of Equity And Cost Method Investments [Line Items] | ||
Interest held (in percentage) | 30.00% | 30.00% |
Long-term investment, at cost, less impairment | $ 23,874 | $ 21,816 |
Share of undistributed profits | 5,741 | 4,069 |
Disposal | 0 | 0 |
Advance to investee company | 0 | 0 |
Total | $ 29,615 | $ 25,885 |
Equity Method Investments [Member] | Beijing AIRmaker Technology Co., Ltd [Member] | ||
Schedule Of Equity And Cost Method Investments [Line Items] | ||
Interest held (in percentage) | 20.00% | 20.00% |
Long-term investment, at cost, less impairment | $ 155 | $ 141 |
Share of undistributed profits | (18) | (15) |
Disposal | 0 | 0 |
Advance to investee company | 0 | 0 |
Total | $ 137 | $ 126 |
Equity Method Investments [Member] | Beijing Jing Yi Intelligent Technologies Innovation Center Co Ltd [Member] | ||
Schedule Of Equity And Cost Method Investments [Line Items] | ||
Interest held (in percentage) | 46.00% | 46.00% |
Long-term investment, at cost, less impairment | $ 0 | $ 0 |
Share of undistributed profits | 0 | 0 |
Disposal | 0 | 0 |
Advance to investee company | 0 | 0 |
Total | $ 0 | $ 0 |
Equity Method Investments [Member] | Ningbo Hollysys Intelligent Technologies Co Ltd [Member] | ||
Schedule Of Equity And Cost Method Investments [Line Items] | ||
Interest held (in percentage) | 40.00% | 40.00% |
Long-term investment, at cost, less impairment | $ 4,369 | $ 3,993 |
Share of undistributed profits | (4,369) | (3,993) |
Disposal | 0 | 0 |
Advance to investee company | ||
Total | $ 0 | $ 0 |
Equity Method Investments [Member] | Hunan LingXiang Maglev Technology Co Ltd [Member] | ||
Schedule Of Equity And Cost Method Investments [Line Items] | ||
Interest held (in percentage) | 17.67% | 19.00% |
Long-term investment, at cost, less impairment | $ 1,548 | $ 1,415 |
Share of undistributed profits | (141) | (330) |
Disposal | 0 | 0 |
Advance to investee company | 0 | 0 |
Total | $ 1,407 | $ 1,085 |
EQUITY INVESTMENTS - Additional
EQUITY INVESTMENTS - Additional Information (Details) ¥ in Thousands, $ in Thousands | 12 Months Ended | |||||
Jun. 30, 2021USD ($) | Jun. 30, 2020USD ($) | Jun. 30, 2019USD ($) | Aug. 31, 2018 | Jun. 30, 2018USD ($) | Jun. 30, 2018CNY (¥) | |
Schedule of Equity Method Investments [Line Items] | ||||||
Disposal gain | $ 0 | $ 5,763 | ||||
Equity Securities without Readily Determinable Fair Value, Impairment Loss, Cumulative Amount | 464 | 424 | ||||
Equity Securities, FV-NI, Unrealized Gain (Loss) | 0 | 0 | ||||
Equity Securities, FV-NI, Realized Gain (Loss) | 3,323 | 0 | ||||
Cost-method Investments [Member] | ||||||
Schedule of Equity Method Investments [Line Items] | ||||||
Equity Securities without Readily Determinable Fair Value, Amount | 2,622 | $ 4,640 | ||||
Hollysys Intelligent [Member] | ||||||
Schedule of Equity Method Investments [Line Items] | ||||||
Noncontrolling Interest, Ownership Percentage by Parent | 100.00% | |||||
Ningbo Hollysys Intelligent Technology Company Limited | ||||||
Schedule of Equity Method Investments [Line Items] | ||||||
Registered Capital | ¥ | ¥ 250,000 | |||||
Noncontrolling Interest, Ownership Percentage by Parent | 40.00% | |||||
Shenhua Hollysys Information Technology Co., Ltd [Member] | Equity Method Investments [Member] | ||||||
Schedule of Equity Method Investments [Line Items] | ||||||
Equity Method Investment, Ownership Percentage | 60.00% | 60.00% | ||||
Ningbo Hollysys Intelligent Technology Company Limited | ||||||
Schedule of Equity Method Investments [Line Items] | ||||||
Registered Capital | $ 38,060 | |||||
Hollysys Intelligent [Member] | ||||||
Schedule of Equity Method Investments [Line Items] | ||||||
Investments in Affiliates, Subsidiaries, Associates, and Joint Ventures, Fair Value Disclosure | $ 4,110 | |||||
Disposal gain | $ 5,768 | |||||
Beijing Hollysys Digital Technology CoLtd [Member] | Equity Method Investments [Member] | ||||||
Schedule of Equity Method Investments [Line Items] | ||||||
Equity Method Investment, Ownership Percentage | 25.00% | 25.00% | ||||
Beijing IPE Biotechnology Co Ltd [Member] | ||||||
Schedule of Equity Method Investments [Line Items] | ||||||
Equity Method Investment, Ownership Percentage | 22.02% | |||||
Proceeds from Divestiture of Interest in Consolidated Subsidiaries | $ 9,087 | |||||
Disposal gain | $ 5,763 | |||||
Beijing IPE Biotechnology Co Ltd [Member] | Equity Method Investments [Member] | ||||||
Schedule of Equity Method Investments [Line Items] | ||||||
Equity Method Investment, Ownership Percentage | 22.02% |
WARRANTY LIABILITIES (Details)
WARRANTY LIABILITIES (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Jun. 30, 2021 | Jun. 30, 2020 | |
WARRANTY LIABILITIES | ||
Beginning balance | $ 10,064 | $ 12,116 |
Expense accrued | 4,431 | 2,309 |
Expense incurred | (5,639) | (4,027) |
Translation adjustment | 695 | (334) |
Closing balance | 9,551 | 10,064 |
Less: current portion of warranty liabilities | (5,902) | (6,604) |
Long-term warranty liabilities | $ 3,649 | $ 3,460 |
SHORT-TERM BANK LOANS (Details)
SHORT-TERM BANK LOANS (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Jun. 30, 2021 | Jun. 30, 2020 | Jun. 30, 2019 | |
Short-term Debt [Line Items] | |||
Short-term bank loans | $ 0 | $ 0 | |
Interest Expense | 0 | 37 | $ 110 |
Long-term Line of Credit | 461,166 | 299,277 | |
Line Of Credit Facility Amount Utilized | 89,297 | 47,694 | |
Line Of Credit Facility Amount Available For Use | 371,868 | 251,583 | |
Line Of Credit Facility Secured By Restricted Cash | 22,937 | 9,627 | |
Line Of Credit Facility Secured By Restricted Buildings | $ 2,888 | $ 2,977 |
LONG-TERM LOANS (Details)
LONG-TERM LOANS (Details) - USD ($) $ in Thousands | Jun. 30, 2021 | Jun. 30, 2020 |
Debt Instrument [Line Items] | ||
Loans Payable to Bank | $ 16,006 | $ 16,100 |
Less: current portion | (15,308) | (320) |
Long-term bank loans | 698 | 15,780 |
MYR-denominated loans [Member] | ||
Debt Instrument [Line Items] | ||
Loans Payable to Bank | 842 | 842 |
SGD-denominated loans [Member] | ||
Debt Instrument [Line Items] | ||
Loans Payable to Bank | 164 | 258 |
US Dollar Denominated Loan [Member] | ||
Debt Instrument [Line Items] | ||
Loans Payable to Bank | $ 15,000 | $ 15,000 |
LONG-TERM LOANS - Scheduled pri
LONG-TERM LOANS - Scheduled principal and interest payments (Details) $ in Thousands | Jun. 30, 2021USD ($) |
LONG-TERM LOANS | |
2022 | $ 15,308 |
2023 | 308 |
2024 | 216 |
2025 | 34 |
2026 | 19 |
2026 onwards | 121 |
Loans Payable to Bank | $ 16,006 |
LONG-TERM LOANS - Additional In
LONG-TERM LOANS - Additional Information (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Jun. 30, 2021 | Jun. 30, 2020 | Jun. 30, 2019 | |
Debt Instrument [Line Items] | |||
Interest Payable | $ 553 | $ 269 | $ 465 |
SGD-denominated loan [Member] | |||
Debt Instrument [Line Items] | |||
Prepaid Land Leases Total | $ 204 | $ 305 | |
SGD-denominated loan [Member] | Maximum [Member] | |||
Debt Instrument [Line Items] | |||
Debt Instrument, Interest Rate During Period | 2.78% | 2.78% | |
SGD-denominated loan [Member] | Minimum [Member] | |||
Debt Instrument [Line Items] | |||
Debt Instrument, Interest Rate During Period | 2.44% | 2.44% | |
MYR-denominated loan [Member] | |||
Debt Instrument [Line Items] | |||
Prepaid Land Leases Total | $ 964 | $ 873 | |
MYR-denominated loan [Member] | Maximum [Member] | |||
Debt Instrument [Line Items] | |||
Debt Instrument, Interest Rate During Period | 4.05% | 7.51% | |
MYR-denominated loan [Member] | Minimum [Member] | |||
Debt Instrument [Line Items] | |||
Debt Instrument, Interest Rate During Period | 2.08% | 2.19% | |
HOLIUs Dollar Denominated Loan [Member] | |||
Debt Instrument [Line Items] | |||
Debt Instrument, Interest Rate During Period | 3.02% | ||
Long term debt maturity date | Apr. 22, 2022 |
FAIR VALUE MEASUREMENTS - Addit
FAIR VALUE MEASUREMENTS - Additional Information (Details) - USD ($) $ in Thousands | Jun. 30, 2021 | Jun. 30, 2020 |
Fair Value, Measurements, Recurring [Member] | ||
Fair Value Input Liabilities Quantitative Information [Line Items] | ||
Assets, Fair Value Disclosure | $ 0 | $ 0 |
Bond [Member] | ||
Fair Value Input Liabilities Quantitative Information [Line Items] | ||
Convertible Debt | $ 0 | $ 0 |
STOCKHOLDERS' EQUITY (Details)
STOCKHOLDERS' EQUITY (Details) - $ / shares | Sep. 30, 2020 | Sep. 27, 2019 | Jun. 30, 2021 | Oct. 05, 2020 | Sep. 27, 2020 | Aug. 31, 2010 |
Stockholders Equity Note [Line Items] | ||||||
Dividends Payable, Amount Per Share | $ 0.21 | $ 0.20 | ||||
Dividends Payable, Date Declared | Sep. 27, 2019 | |||||
Dividends Payable, Date of Record | Oct. 22, 2019 | |||||
Dividends Payable, Date to be Paid | Nov. 12, 2019 | |||||
Preferred Class A [Member] | Investments in Equity Investees and Equity Securities [Member] | ||||||
Stockholders Equity Note [Line Items] | ||||||
Business Acquisition, Share Price (in dollars per share) | $ 160 | $ 160 | ||||
2010 Rights Plan [Member] | ||||||
Stockholders Equity Note [Line Items] | ||||||
Percentage Of Tender Offer For Ordinary Shares | 20.00% | |||||
Percentage Of Ordinary Shares Acquiring Discount | 50.00% | |||||
2010 Rights Plan [Member] | Investments in Equity Investees and Equity Securities [Member] | ||||||
Stockholders Equity Note [Line Items] | ||||||
Business Acquisition, Percentage of Voting Interests Acquired | 20.00% | 0.00% | ||||
2020 Rights Plan [Member] | ||||||
Stockholders Equity Note [Line Items] | ||||||
Percentage Of Tender Offer For Ordinary Shares | 15.00% | |||||
Rights issue redemption price per right | $ 0.001 | |||||
2020 Rights Plan [Member] | Investments in Equity Investees and Equity Securities [Member] | ||||||
Stockholders Equity Note [Line Items] | ||||||
Business Acquisition, Percentage of Voting Interests Acquired | 15.00% |
SHARE-BASED COMPENSATION EXPE_3
SHARE-BASED COMPENSATION EXPENSES - Share option activity (Details) - USD ($) $ / shares in Units, $ in Thousands | Mar. 17, 2021 | Nov. 16, 2020 | Jun. 30, 2021 | Jun. 30, 2020 |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Number of shares, Vested and exercisable at June 30, 2020 | 0 | |||
Number of shares, Granted | 478,500 | 90,000 | ||
Number of shares, Vested and exercisable at June 30, 2021 | 568,500 | 0 | ||
Weighted average exercise price, Vested and exercisable at June 30, 2020 (in dollars per share) | $ 0 | |||
Weighted average exercise price, Granted | $ 11.85 | $ 11.85 | 11.85 | |
Weighted average exercise price, Vested and exercisable at June 30, 2021 (in dollars per share) | $ 11.85 | $ 0 | ||
Weighted average remaining contractual life (years), Outstanding | 9 years 7 months 28 days | 0 years | ||
Weighted average remaining contractual life, Granted | 9 years 11 months 12 days | 10 years | ||
Aggregate intrinsic value, Granted | $ 1,165 | |||
Aggregate intrinsic value, Vested and exercisable (in dollars) | $ 1,734 | $ 0 |
SHARE-BASED COMPENSATION EXPE_4
SHARE-BASED COMPENSATION EXPENSES - Restricted shares (Details) - Vested and Unissued Restricted Shares [Member] - $ / shares | Mar. 17, 2021 | Nov. 16, 2020 | Jun. 30, 2021 | Jun. 30, 2020 | Jun. 30, 2017 |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Number of restricted shares, Un-vested | 63,125 | 18,125 | |||
Number of restricted shares, Granted | 1,116,500 | 318,000 | 1,434,500 | 67,500 | 67,500 |
Number of restricted shares, Vested | (177,288) | (22,500) | |||
Number of restricted shares, Un-vested | 1,320,337 | 63,125 | |||
Weighted average grant-date fair value, Un-vested (in dollars per share) | $ 16.06 | $ 20.09 | |||
Weighted average grant-date fair value, Granted (in dollars per share) | 11.85 | 16.06 | |||
Weighted average grant-date fair value, Vested (in dollars per share) | 13.35 | 19.31 | |||
Weighted average grant-date fair value, Un-vested (in dollars per share) | $ 11.85 | $ 16.06 |
SHARE-BASED COMPENSATION EXPE_5
SHARE-BASED COMPENSATION EXPENSES (Details) - USD ($) $ / shares in Units, $ in Thousands | Mar. 17, 2021 | Nov. 16, 2020 | Jun. 30, 2021 | Jun. 30, 2020 | Jun. 30, 2019 | Jun. 30, 2017 | May 14, 2015 |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Weighted average exercise price, Granted (in dollars per share) | $ 11.85 | $ 11.85 | $ 11.85 | ||||
Employee Service Share-based Compensation, Nonvested Awards, Total Compensation Cost Not yet Recognized, Stock Options | $ 2,147 | ||||||
Share-Based Compensation | $ 9,724 | $ 410 | $ 238 | ||||
Share-Based Compensation Arrangement By Share-Based Payment Award, Options, Grants In Period, Gross (is shares) | 478,500 | 90,000 | |||||
Share based compensation arrangement by share based payment award weighted average vesting period | 1 year 5 months 4 days | ||||||
General and Administrative Expense [Member] | |||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Share-Based Compensation | $ 1,406 | ||||||
Vested and Unissued Restricted Shares [Member] | |||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Employee Service Share-based Compensation, Nonvested Awards, Total Compensation Cost Not yet Recognized, Stock Options | $ 11,963 | ||||||
Employee Service Share-based Compensation, Nonvested Awards, Total Compensation Cost Not yet Recognized, Period for Recognition | 1 year 4 months 28 days | ||||||
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Vested in Period, Fair Value | $ 2,367 | $ 434 | 452 | ||||
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Grants in Period | 1,116,500 | 318,000 | 1,434,500 | 67,500 | 67,500 | ||
Vested and Unissued Restricted Shares [Member] | General and Administrative Expense [Member] | |||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Share-Based Compensation | $ 8,318 | $ 410 | $ 238 | ||||
Equity Plan 2015 [Member] | |||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Share-based Compensation Arrangement by Share-based Payment Award, Number of Shares Authorized (in shares) | 5,000,000 |
EMPLOYEE BENEFITS (Details)
EMPLOYEE BENEFITS (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Jun. 30, 2021 | Jun. 30, 2020 | Jun. 30, 2019 | |
EMPLOYEE BENEFITS | |||
Defined Contribution Plan, Cost | $ 24,141 | $ 17,210 | $ 18,757 |
INCOME TAX - Income (losses) be
INCOME TAX - Income (losses) before income taxes (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Jun. 30, 2021 | Jun. 30, 2020 | Jun. 30, 2019 | |
Income Tax Disclosure [Abstract] | |||
PRC | $ 137,520 | $ 140,539 | $ 155,691 |
Non-PRC | (27,628) | (43,042) | (11,968) |
Income (Loss) from Continuing Operations before Income Taxes, Extraordinary Items, Noncontrolling Interest, Total | $ 109,892 | $ 97,497 | $ 143,723 |
INCOME TAX - Income tax expense
INCOME TAX - Income tax expense (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Jun. 30, 2021 | Jun. 30, 2020 | Jun. 30, 2019 | |
Income Tax Expense Incurred In PRC [Line Items] | |||
Current income tax expense | $ 26,392 | $ 11,757 | $ 24,381 |
Deferred income tax (benefit) expense | (5,838) | 6,414 | (6,197) |
Effective income tax expense | 20,554 | 18,171 | 18,184 |
PRC [Member] | |||
Income Tax Expense Incurred In PRC [Line Items] | |||
Current income tax expense | 25,634 | 10,369 | 22,206 |
Deferred income tax (benefit) expense | (7,971) | 5,577 | (5,722) |
Non-PRC [Member] | |||
Income Tax Expense Incurred In PRC [Line Items] | |||
Current income tax expense | 758 | 1,388 | 2,175 |
Deferred income tax (benefit) expense | $ 2,133 | $ 837 | $ (475) |
INCOME TAX - Reconciliation of
INCOME TAX - Reconciliation of the income tax expenses (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Jun. 30, 2021 | Jun. 30, 2020 | Jun. 30, 2019 | |
Income Tax Statutory Tax Rate PRC [Line Items] | |||
Income before income taxes | $ 109,892 | $ 97,497 | $ 143,723 |
Withholding tax on dividends paid by subsidiaries | 8,829 | ||
Total | 20,554 | 18,171 | 18,184 |
People Republic Of China Subsidiaries [Member] | |||
Income Tax Statutory Tax Rate PRC [Line Items] | |||
Expected income tax expense at statutory tax rate in the PRC | 33,221 | 24,374 | 35,931 |
Effect of different tax rates in various jurisdictions | 4,665 | 3,997 | 1,781 |
Effect of preferential tax treatment | (14,334) | (11,797) | (13,444) |
Effect of non-taxable income | (4,770) | (250) | (1,500) |
Effect of additional deductible research and development expenses | (9,838) | (7,241) | (5,833) |
Effect of non-deductible expenses | 6,644 | 10,661 | 5,489 |
Over provision of income tax in previous years | 2,102 | (6,118) | (8,457) |
Change in valuation allowance | 1,718 | 3,746 | 1,399 |
Withholding tax on dividends paid by subsidiaries | 0 | 799 | 2,847 |
Others | $ 1,146 | $ 0 | $ (29) |
INCOME TAX - Deferred tax asset
INCOME TAX - Deferred tax assets/liabilities (Details) - USD ($) $ in Thousands | Jun. 30, 2021 | Jun. 30, 2020 |
Deferred tax assets | ||
Allowance for doubtful accounts | $ 12,480 | $ 7,808 |
Deferred subsidies | 529 | 2,484 |
Warranty liabilities | 911 | 984 |
Inventory provision | 199 | 687 |
Long-term assets | 622 | 397 |
Deferred revenue | 105 | |
Provision for loss contracts | 64 | 99 |
Net operating loss carry forward | 17,290 | 13,824 |
Valuation allowance | (17,424) | (14,821) |
Others | 214 | 325 |
Total deferred tax assets-non-current | 14,990 | 11,787 |
Deferred tax liabilities | ||
Property, plant and equipment | (678) | (11) |
Costs and estimated earnings in excess of billings | (1,159) | (3,396) |
Share of net losses of equity investees | (1,352) | (668) |
PRC dividend withholding tax | (8,829) | (6,654) |
Intangible assets and other non-current assets | (7,321) | (6,089) |
Total deferred tax liabilities, non-current | $ (19,339) | $ (16,818) |
INCOME TAX - Additional Informa
INCOME TAX - Additional Information (Details) ¥ in Thousands, $ in Thousands | 12 Months Ended | 24 Months Ended | ||||||
Jun. 30, 2021USD ($) | Jun. 30, 2021CNY (¥) | Jun. 30, 2020USD ($) | Jun. 30, 2019USD ($) | Dec. 31, 2008 | Jun. 30, 2021USD ($) | Jun. 30, 2021CNY (¥) | Jun. 30, 2020CNY (¥) | |
Income Tax Disclosure [Line Items] | ||||||||
Effective Income Tax Rate Reconciliation, Foreign Income Tax Rate Differential | 15.00% | 15.00% | ||||||
Undistributed Earnings of Foreign Subsidiaries (in dollars) | $ 995,729 | $ 900,285 | $ 995,729 | ¥ 6,642,966 | ¥ 6,002,587 | |||
Operating Loss Carry Forwards Expiration | 0 | 0 | ||||||
Withholding tax rate profits of subsidiaries earned | 10.00% | |||||||
Withholding Tax On Capital Gain | 8,829 | |||||||
Distributed Earnings | 88,295 | ¥ 570,288 | ||||||
Undistributed, Retained Earnings Of Foreign Subsidiaries With No Withholding Tax | 63,716 | 63,716 | 63,716 | |||||
Unrecognised tax benefits that would impact tax rate | 0 | 0 | 0 | |||||
Unrecognised tax benefits income tax penalty and expense | $ 0 | 0 | $ 0 | |||||
SINGAPORE [Member] | ||||||||
Income Tax Disclosure [Line Items] | ||||||||
Effective Income Tax Rate Reconciliation, at Federal Statutory Income Tax Rate, Percent | 17.00% | 17.00% | ||||||
Operating Loss Carryforwards (in dollars) | $ 81,379 | 81,379 | ||||||
Malaysia [Member] | ||||||||
Income Tax Disclosure [Line Items] | ||||||||
Effective Income Tax Rate Reconciliation, at Federal Statutory Income Tax Rate, Percent | 24.00% | 24.00% | ||||||
Hong kong [Member] | ||||||||
Income Tax Disclosure [Line Items] | ||||||||
Effective Income Tax Rate Reconciliation, at Federal Statutory Income Tax Rate, Percent | 16.50% | 16.50% | ||||||
Macau [Member] | Minimum [Member] | ||||||||
Income Tax Disclosure [Line Items] | ||||||||
Effective Income Tax Rate Reconciliation, Foreign Income Tax Rate Differential | 12.00% | 12.00% | ||||||
INDIA [Member] | ||||||||
Income Tax Disclosure [Line Items] | ||||||||
Effective Income Tax Rate Reconciliation, at Federal Statutory Income Tax Rate, Percent | 30.00% | 30.00% | ||||||
QATAR | ||||||||
Income Tax Disclosure [Line Items] | ||||||||
Effective Income Tax Rate Reconciliation, at Federal Statutory Income Tax Rate, Percent | 10.00% | 10.00% | ||||||
ID [Member] | ||||||||
Income Tax Disclosure [Line Items] | ||||||||
Effective Income Tax Rate Reconciliation, at Federal Statutory Income Tax Rate, Percent | 25.00% | 25.00% | ||||||
Operating Loss Carryforwards (in dollars) | $ 1,278 | 1,278 | ||||||
People Republic Of China Subsidiaries [Member] | ||||||||
Income Tax Disclosure [Line Items] | ||||||||
Effective Income Tax Rate Reconciliation, at Federal Statutory Income Tax Rate, Percent | 25.00% | 25.00% | ||||||
Operating Loss Carryforwards (in dollars) | $ 132 | 132 | ||||||
Withholding Tax On Capital Gain | 0 | 799 | $ 2,847 | |||||
Deferred Tax Liability Not Recognized, Amount of Unrecognized Deferred Tax Liability, Undistributed Earnings of Foreign Subsidiaries | 82,453 | 73,845 | 82,453 | |||||
Undistributed Earnings Of Foreign Subsidiaries With No Withholding Tax | $ 888,249 | $ 802,162 | $ 888,249 | |||||
Hangzhou Hollysys Automation Company Ltd [Member] | ||||||||
Income Tax Disclosure [Line Items] | ||||||||
Effective Income Tax Rate Reconciliation, at Federal Statutory Income Tax Rate, Percent | 10.00% | |||||||
Beijing Hollysys Company Ltd [Member] | ||||||||
Income Tax Disclosure [Line Items] | ||||||||
Effective Income Tax Rate Reconciliation, at Federal Statutory Income Tax Rate, Percent | 15.00% | 15.00% | ||||||
Beijing Hollysys Industrial Software Company Ltd [Member] | ||||||||
Income Tax Disclosure [Line Items] | ||||||||
Effective Income Tax Rate Reconciliation, Foreign Income Tax Rate Differential | 15.00% |
OPERATING LEASES -Additional In
OPERATING LEASES -Additional Information (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Jun. 30, 2021 | Jun. 30, 2020 | Jun. 30, 2019 | |
Operating Leases [Line Items] | |||
Lease Cost | $ 3,778 | ||
Total Expenses under Operating Leases | 3,778 | ||
Rental Income | 1,540 | $ 2,807 | $ 1,727 |
Amortization of prepaid land leases | 454 | 384 | 264 |
Selling and Marketing Expense [Member] | |||
Operating Leases [Line Items] | |||
Lease Cost | 970 | 881 | 1,013 |
General and Administrative Expense [Member] | |||
Operating Leases [Line Items] | |||
Lease Cost | 1,674 | 1,052 | 627 |
Research and Development Expense [Member] | |||
Operating Leases [Line Items] | |||
Lease Cost | $ 1,134 | $ 596 | $ 338 |
OPERATING LEASES - Schedule of
OPERATING LEASES - Schedule of lease and Non-Lease Components (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Jun. 30, 2021 | Jun. 30, 2020 | Jun. 30, 2019 | |
Lease, Cost [Abstract] | |||
Operating lease costs | $ 2,324 | ||
Short-term lease costs | 1,000 | ||
Amortization of prepaid land leases | 454 | $ 384 | $ 264 |
Total lease costs | $ 3,778 |
OPERATING LEASES - Schedule O_2
OPERATING LEASES - Schedule Of Other Information Related To Operating Leases (Details) $ in Thousands | 12 Months Ended |
Jun. 30, 2021USD ($) | |
Other Information [Abstract] | |
Cash paid for amounts included in the measurement of operating lease liabilities | $ 4,045 |
ROU assets obtained in exchange for new operating lease liabilities | $ 3,011 |
Weighted-average remaining lease term (in years): | |
Operating leases | 1 year 11 months 19 days |
Weighted-average discount rate: | |
Operating leases | 4.17% |
OPERATING LEASES - Schedule o_3
OPERATING LEASES - Schedule of Future Minimum lease Payments for Operating leases (Details) $ in Thousands | Jun. 30, 2021USD ($) |
Capital Leases, Future Minimum Payments Due, Fiscal Year Maturity [Abstract] | |
2022 | $ 3,302 |
2023 | 2,091 |
2024 | 701 |
2025 | 16 |
2026 and onwards | 0 |
Total minimum lease payments | 6,110 |
Less: imputed interest | 84 |
Total lease liability balance | $ 6,026 |
OPERATING LEASES - Summary of O
OPERATING LEASES - Summary of Operating Lease Payments (Details) $ in Thousands | Jun. 30, 2021USD ($) |
Operating Leases, Future Minimum Payments Receivable [Abstract] | |
2022 | $ 3,523 |
2023 | 3,628 |
2024 | 2,189 |
2025 | 1,942 |
2026 | 2,000 |
Thereafter | 14,940 |
Total minimum lease payments to be received | $ 28,222 |
INCOME PER SHARE - Computation
INCOME PER SHARE - Computation of Basic And Diluted Net Income Per Share Attributable (Details) - USD ($) $ / shares in Units, $ in Thousands | 12 Months Ended | ||
Jun. 30, 2021 | Jun. 30, 2020 | Jun. 30, 2019 | |
Numerator: | |||
Net income attributable to the Company as reported | $ 89,709 | $ 79,396 | $ 125,261 |
Less: Earnings allocated to participating securities | 0 | (83) | 0 |
Net income attributable to common stockholders - basic | 89,709 | 79,313 | 125,261 |
Effect of Convertible Bond | 0 | 93 | 562 |
Earnings allocated to participating securities | 0 | 83 | 0 |
Earnings reallocated to participating securities considering potentially dilutive securities | 0 | (83) | 0 |
Net income attributable to common stockholders – diluted | $ 89,709 | $ 79,406 | $ 125,823 |
Denominator: | |||
Weighted average ordinary shares outstanding used in computing basic income per share | 60,566,709 | 60,478,717 | 60,456,524 |
Effect of dilutive securities | |||
Convertible Bond | 0 | 130,525 | 796,200 |
Restricted shares | 947,040 | 0 | 21,160 |
Weighted average ordinary shares outstanding used in computing diluted income per share | 61,513,749 | 60,609,242 | 61,273,884 |
Income per share – basic (in dollars per share) | $ 1.48 | $ 1.31 | $ 2.07 |
Income per share – diluted (in dollars per share) | $ 1.46 | $ 1.31 | $ 2.05 |
INCOME PER SHARE - Additional I
INCOME PER SHARE - Additional Information (Details) - shares | 12 Months Ended | ||
Jun. 30, 2021 | Jun. 30, 2020 | Jun. 30, 2019 | |
Vested and Unissued Restricted Shares [Member] | |||
Earnings Per Share [Line Items] | |||
Weighted Average Number Diluted Shares Outstanding Vested And Unissued Restricted Shares | 15,000 | 15,000 | 114,425 |
RELATED PARTY TRANSACTIONS (Det
RELATED PARTY TRANSACTIONS (Details) - USD ($) $ in Thousands | Jun. 30, 2021 | Jul. 01, 2020 | Jun. 30, 2020 |
Related Party Transaction [Line Items] | |||
Due from Related Parties | $ 28,243 | $ 19,564 | $ 21,444 |
Allowance for credit losses | (2,255) | 0 | |
China Techenergy [Member] | |||
Related Party Transaction [Line Items] | |||
Due from Related Parties | 19,241 | 14,301 | |
Ningbo Hollysys [Member] | |||
Related Party Transaction [Line Items] | |||
Due from Related Parties | 11,190 | 6,142 | |
Hollycon [Member] | |||
Related Party Transaction [Line Items] | |||
Due from Related Parties | 64 | 961 | |
HuNan LingXiang [Menber] | |||
Related Party Transaction [Line Items] | |||
Due from Related Parties | 0 | $ 40 | |
Others [Member] | |||
Related Party Transaction [Line Items] | |||
Due from Related Parties | $ 3 |
RELATED PARTY TRANSACTIONS - Du
RELATED PARTY TRANSACTIONS - Due to related parties (Details) - USD ($) $ in Thousands | Jun. 30, 2021 | Jun. 30, 2020 |
Related Party Transaction [Line Items] | ||
Due to Related Parties | $ 1,661 | $ 3,576 |
China Techenergy [Member] | ||
Related Party Transaction [Line Items] | ||
Due to Related Parties | 1,028 | 2,967 |
Ningbo Hollysys [Member] | ||
Related Party Transaction [Line Items] | ||
Due to Related Parties | 529 | $ 609 |
Hollycon [Member] | ||
Related Party Transaction [Line Items] | ||
Due to Related Parties | 23 | |
HuNan LingXiang [Member] | ||
Related Party Transaction [Line Items] | ||
Due to Related Parties | $ 81 |
RELATED PARTY TRANSACTIONS - Pu
RELATED PARTY TRANSACTIONS - Purchases of Goods and Services From Related Parties (Details) - Goods And Services [Member] - USD ($) $ in Thousands | 12 Months Ended | ||
Jun. 30, 2021 | Jun. 30, 2020 | Jun. 30, 2019 | |
Related Party Transaction [Line Items] | |||
Purchases of goods and services from related parties | $ 3,058 | $ 1,838 | $ 706 |
Ningbo Hollysys [Member] | |||
Related Party Transaction [Line Items] | |||
Purchases of goods and services from related parties | 3,051 | 1,838 | 702 |
Hollycon [Member] | |||
Related Party Transaction [Line Items] | |||
Purchases of goods and services from related parties | $ 7 | $ 0 | $ 4 |
RELATED PARTY TRANSACTIONS - Sa
RELATED PARTY TRANSACTIONS - Sales of Goods and Integrated Solutions To Related Parties (Details) - Goods And Services [Member] - USD ($) $ in Thousands | 12 Months Ended | ||
Jun. 30, 2021 | Jun. 30, 2020 | Jun. 30, 2019 | |
Related Party Transaction [Line Items] | |||
Other income from related parties | $ 9,632 | $ 3,230 | $ 11,610 |
China Techenergy [Member] | |||
Related Party Transaction [Line Items] | |||
Other income from related parties | 8,458 | 1,711 | 11,094 |
Hollycon [Member] | |||
Related Party Transaction [Line Items] | |||
Other income from related parties | 866 | 1,302 | 44 |
Ningbo Hollysys [Member] | |||
Related Party Transaction [Line Items] | |||
Other income from related parties | 308 | 179 | 472 |
HuNan LingXiang [Member] | |||
Related Party Transaction [Line Items] | |||
Other income from related parties | $ 0 | $ 38 | $ 0 |
RELATED PARTY TRANSACTIONS - Ot
RELATED PARTY TRANSACTIONS - Other Income From Related Parties (Details) - Goods And Services [Member] - USD ($) $ in Thousands | 12 Months Ended | ||
Jun. 30, 2021 | Jun. 30, 2020 | Jun. 30, 2019 | |
Related Party Transaction [Line Items] | |||
Other income from related parties | $ 2,741 | $ 4,216 | $ 2,520 |
Ningbo Hollysys [Member] | |||
Related Party Transaction [Line Items] | |||
Other income from related parties | 2,281 | 2,214 | 1,548 |
Hollycon [Member] | |||
Related Party Transaction [Line Items] | |||
Other income from related parties | $ 460 | 880 | $ 972 |
Hollysys Intelligent [Member] | |||
Related Party Transaction [Line Items] | |||
Other income from related parties | $ 1,122 |
RELATED PARTY TRANSACTIONS - Re
RELATED PARTY TRANSACTIONS - Research And Development To Related Parties (Details) - Research and Development Expense [Member] - USD ($) $ in Thousands | 12 Months Ended | ||
Jun. 30, 2021 | Jun. 30, 2020 | Jun. 30, 2019 | |
Related Party Transaction [Line Items] | |||
Research and development expenses related parties | $ 212 | $ 655 | $ 0 |
HOLINingbo Hollysys [Member] | |||
Related Party Transaction [Line Items] | |||
Research and development expenses related parties | $ 212 | $ 655 | $ 0 |
RELATED PARTY TRANSACTIONS - Ad
RELATED PARTY TRANSACTIONS - Additional Information (Details) | 12 Months Ended |
Jun. 30, 2021 | |
Hollycon [Member] | |
Related Party Transaction [Line Items] | |
Lessor Operating Lease Term Of Contracts | 1 year |
Ningbo Hollysys [Member] | |
Related Party Transaction [Line Items] | |
Lessor Operating Lease Term Of Contracts | 1 year |
COMMITMENTS AND CONTINGENCIES -
COMMITMENTS AND CONTINGENCIES - Purchase Obligation (Details) $ in Thousands | Jun. 30, 2021USD ($) |
Purchase obligation | |
2022 | $ 229,407 |
2023 | 21,143 |
2024 | 14,095 |
2025 | 7,048 |
2026 | $ 14,095 |
COMMITMENTS AND CONTINGENCIES_2
COMMITMENTS AND CONTINGENCIES - Additional Information (Details) - USD ($) $ in Thousands | Jun. 30, 2021 | Jun. 30, 2020 |
Commitments And Contingencies Disclosure [Line Items] | ||
Commitments and contingencies | ||
Outstanding Guarantees | 56,975 | |
Purchase Obligation, Due in Next Twelve Months | 285,788 | |
Line of Credit Facility, Amount Outstanding | 461,166 | $ 299,277 |
Capital Commitments [Member] | ||
Commitments And Contingencies Disclosure [Line Items] | ||
Commitments and contingencies | 67,582 | |
Standby Letters of Credit [Member] | ||
Commitments And Contingencies Disclosure [Line Items] | ||
Line of Credit Facility, Amount Outstanding | 347 | |
Performance Guarantee [Member] | ||
Commitments And Contingencies Disclosure [Line Items] | ||
Restricted Cash and Cash Equivalents | $ 8,214 |
SEGMENT REPORTING - Summary of
SEGMENT REPORTING - Summary of Information By Segment (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Jun. 30, 2021 | Jun. 30, 2020 | Jun. 30, 2019 | |
Segment Reporting Information [Line Items] | |||
Revenues from external customers | $ 593,466 | $ 503,327 | $ 570,341 |
Gross profit | 218,279 | 190,568 | 211,166 |
IA [Member] | |||
Segment Reporting Information [Line Items] | |||
Revenues from external customers | 337,052 | 239,971 | 233,798 |
Costs of revenue | 227,107 | 154,298 | 139,010 |
Gross profit | 109,945 | 85,673 | 94,788 |
Rail [Member] | |||
Segment Reporting Information [Line Items] | |||
Revenues from external customers | 188,171 | 201,339 | 208,917 |
Costs of revenue | 90,386 | 107,382 | 109,567 |
Gross profit | 97,785 | 93,957 | 99,350 |
M&E [Member] | |||
Segment Reporting Information [Line Items] | |||
Revenues from external customers | 68,243 | 62,017 | 127,626 |
Costs of revenue | 57,694 | 51,079 | 110,598 |
Gross profit | 10,549 | 10,938 | 17,028 |
Consolidated [Member] | |||
Segment Reporting Information [Line Items] | |||
Revenues from external customers | 593,466 | 503,327 | 570,341 |
Costs of revenue | 375,187 | 312,759 | 359,175 |
Gross profit | 218,279 | 190,568 | 211,166 |
Integrated solutions contracts revenue [Member] | |||
Segment Reporting Information [Line Items] | |||
Revenues from external customers | 460,180 | ||
Integrated solutions contracts revenue [Member] | IA [Member] | |||
Segment Reporting Information [Line Items] | |||
Revenues from external customers | 291,106 | 207,421 | 191,668 |
Integrated solutions contracts revenue [Member] | Rail [Member] | |||
Segment Reporting Information [Line Items] | |||
Revenues from external customers | 100,877 | 145,750 | 148,365 |
Integrated solutions contracts revenue [Member] | M&E [Member] | |||
Segment Reporting Information [Line Items] | |||
Revenues from external customers | 68,197 | 61,101 | 127,338 |
Integrated solutions contracts revenue [Member] | Consolidated [Member] | |||
Segment Reporting Information [Line Items] | |||
Revenues from external customers | 460,180 | 414,272 | 467,371 |
Product [Member] | |||
Segment Reporting Information [Line Items] | |||
Revenues from external customers | 28,667 | ||
Costs of revenue | 5,293 | 5,456 | 7,571 |
Product [Member] | IA [Member] | |||
Segment Reporting Information [Line Items] | |||
Revenues from external customers | 22,772 | 15,504 | 27,390 |
Product [Member] | Rail [Member] | |||
Segment Reporting Information [Line Items] | |||
Revenues from external customers | 5,895 | 4,640 | 5,712 |
Product [Member] | M&E [Member] | |||
Segment Reporting Information [Line Items] | |||
Revenues from external customers | 0 | 0 | 0 |
Product [Member] | Consolidated [Member] | |||
Segment Reporting Information [Line Items] | |||
Revenues from external customers | 28,667 | 20,144 | 33,102 |
Maintenance [Member] | |||
Segment Reporting Information [Line Items] | |||
Revenues from external customers | 101,322 | ||
Maintenance [Member] | IA [Member] | |||
Segment Reporting Information [Line Items] | |||
Revenues from external customers | 21,402 | 15,985 | 13,978 |
Maintenance [Member] | Rail [Member] | |||
Segment Reporting Information [Line Items] | |||
Revenues from external customers | 79,874 | 49,140 | 53,359 |
Maintenance [Member] | M&E [Member] | |||
Segment Reporting Information [Line Items] | |||
Revenues from external customers | 46 | 916 | 288 |
Maintenance [Member] | Consolidated [Member] | |||
Segment Reporting Information [Line Items] | |||
Revenues from external customers | 101,322 | 66,041 | 67,625 |
Extended Warranty Service Revenue [Member] | |||
Segment Reporting Information [Line Items] | |||
Revenues from external customers | 3,297 | ||
Extended Warranty Service Revenue [Member] | IA [Member] | |||
Segment Reporting Information [Line Items] | |||
Revenues from external customers | 1,772 | 1,061 | 762 |
Extended Warranty Service Revenue [Member] | Rail [Member] | |||
Segment Reporting Information [Line Items] | |||
Revenues from external customers | 1,525 | 1,809 | 1,481 |
Extended Warranty Service Revenue [Member] | M&E [Member] | |||
Segment Reporting Information [Line Items] | |||
Revenues from external customers | 0 | 0 | 0 |
Extended Warranty Service Revenue [Member] | Consolidated [Member] | |||
Segment Reporting Information [Line Items] | |||
Revenues from external customers | $ 3,297 | $ 2,870 | $ 2,243 |
SEGMENT REPORTING - Revenues by
SEGMENT REPORTING - Revenues by Geographical Area (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Jun. 30, 2021 | Jun. 30, 2020 | Jun. 30, 2019 | |
Revenues from External Customers and Long-Lived Assets [Line Items] | |||
Revenues | $ 593,466 | $ 503,327 | $ 570,341 |
PRC [Member] | |||
Revenues from External Customers and Long-Lived Assets [Line Items] | |||
Revenues | 518,170 | 441,305 | 438,832 |
Non-PRC [Member] | |||
Revenues from External Customers and Long-Lived Assets [Line Items] | |||
Revenues | $ 75,296 | $ 62,022 | $ 131,509 |
SEGMENT REPORTING - Long-lived
SEGMENT REPORTING - Long-lived Assets Other Than Goodwill and Intangible Assets by Geographical Area (Details) - USD ($) $ in Thousands | Jun. 30, 2021 | Jun. 30, 2020 |
Revenues from External Customers and Long-Lived Assets [Line Items] | ||
Long-lived assets other than goodwill and acquired intangible assets | $ 174,801 | $ 141,278 |
PRC [Member] | ||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||
Long-lived assets other than goodwill and acquired intangible assets | 163,343 | 129,340 |
Non-PRC [Member] | ||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||
Long-lived assets other than goodwill and acquired intangible assets | $ 11,458 | $ 11,938 |
DISPOSAL OF SUBSIDIARY - Additi
DISPOSAL OF SUBSIDIARY - Additional Information (Detail) - USD ($) $ in Thousands | 1 Months Ended | 12 Months Ended | ||
Mar. 31, 2021 | Jun. 30, 2021 | Jun. 30, 2020 | Jun. 30, 2019 | |
Schedule of Equity Method Investments [Line Items] | ||||
Proceeds received from disposal of equity investments | $ 5,187 | $ 4,458 | $ 4,544 | |
Cixi Hollysys [Member] | ||||
Schedule of Equity Method Investments [Line Items] | ||||
Proceeds received from disposal of equity investments | $ 5,187 | |||
Cixi Hollysys [Member] | Maximum [Member] | ||||
Schedule of Equity Method Investments [Line Items] | ||||
Proceeds received from disposal of equity investments | $ 16,331 |
SUBSEQUENT EVENTS - Additional
SUBSEQUENT EVENTS - Additional Information (Details) - USD ($) $ in Thousands | 1 Months Ended | 12 Months Ended | |||
Aug. 31, 2021 | Jun. 30, 2021 | Jun. 30, 2020 | Jun. 30, 2019 | Aug. 31, 2018 | |
SUBSEQUENT EVENTS | |||||
Payments to Acquire Equity Method Investments | $ 9,459 | $ 0 | $ 0 | ||
Hollysys Intelligent [Member] | |||||
SUBSEQUENT EVENTS | |||||
Noncontrolling Interest, Ownership Percentage by Parent | 100.00% | ||||
Subsequent Event [Member] | Hollysys Intelligent [Member] | |||||
SUBSEQUENT EVENTS | |||||
Noncontrolling Interest, Ownership Percentage by Parent | 100.00% | ||||
Payments to Acquire Equity Method Investments | $ 20,901 |
ENDORSEMENT OF NOTE RECEIVABL_2
ENDORSEMENT OF NOTE RECEIVABLES - Additional Information (Details) - USD ($) $ in Thousands | Jun. 30, 2021 | Jun. 30, 2020 |
ENDORSEMENT OF NOTE RECEIVABLES | ||
Endorsed Bank Acceptance Bill | $ 41,981 | $ 37,333 |
CONDENSED FINANCIAL INFORMATI_3
CONDENSED FINANCIAL INFORMATION OF THE PARENT COMPANY - BALANCE SHEETS (Details) - USD ($) $ in Thousands | Jun. 30, 2021 | Jul. 01, 2020 | Jun. 30, 2020 | Jun. 30, 2019 | Jun. 30, 2018 |
ASSETS | |||||
Cash and cash equivalents | $ 664,321 | $ 288,782 | $ 332,509 | ||
Other receivables, net | 18,937 | 28,257 | |||
Prepaid expenses | 937 | 648 | |||
Total current assets | 1,387,558 | 1,174,494 | |||
Total assets | 1,594,253 | 1,360,835 | |||
LIABILITIES AND STOCKHOLDERS' EQUITY | |||||
Accrued liabilities | 38,633 | 31,595 | |||
Total liabilities | 452,285 | 371,949 | |||
Equity: | |||||
Ordinary shares, par value $0.001 per share, 100,000,000 shares authorized; 60,537,099 shares issued and 61,367,337 shares issued and outstanding as of June 30, 2020 and 2021, respectively | 61 | 61 | |||
Additional paid-in capital | 233,768 | 224,043 | |||
Retained earnings | $ 744,022 | ||||
Accumulated other comprehensive (loss) income | 32,814 | (63,517) | |||
Total equity | 1,141,968 | 988,886 | $ 947,160 | $ 842,353 | |
Total liabilities and equity | 1,594,253 | 1,360,835 | |||
Parent Company | |||||
ASSETS | |||||
Cash and cash equivalents | 7,824 | 13,265 | |||
Short-term investments | 11,318 | ||||
Other receivables, net | 31 | ||||
Amounts due from subsidiaries | 53,503 | 53,503 | |||
Prepaid expenses | 166 | 97 | |||
Total current assets | 61,493 | 78,214 | |||
Investment in subsidiaries | 1,221,755 | 1,046,725 | |||
Total assets | 1,283,248 | 1,124,939 | |||
LIABILITIES AND STOCKHOLDERS' EQUITY | |||||
Accrued liabilities | 5,143 | ||||
Amounts due to subsidiaries | 140,415 | 140,456 | |||
Total liabilities | 145,558 | 140,456 | |||
Equity: | |||||
Ordinary shares, par value $0.001 per share, 100,000,000 shares authorized; 60,537,099 shares issued and 61,367,337 shares issued and outstanding as of June 30, 2020 and 2021, respectively | 61 | 61 | |||
Additional paid-in capital | 233,768 | 224,043 | |||
Retained earnings | 871,047 | 823,896 | |||
Accumulated other comprehensive (loss) income | 32,814 | (63,517) | |||
Total equity | 1,137,690 | 984,483 | |||
Total liabilities and equity | $ 1,283,248 | $ 1,124,939 |
CONDENSED FINANCIAL INFORMATI_4
CONDENSED FINANCIAL INFORMATION OF THE PARENT COMPANY - PARENTHETICALS (Details) $ / shares in Units, ¥ in Thousands, $ in Thousands | Jun. 30, 2021CNY (¥)shares | Jun. 30, 2021USD ($)$ / sharesshares | Jun. 30, 2020CNY (¥)shares | Jun. 30, 2020USD ($)$ / sharesshares |
CONDENSED FINANCIAL INFORMATION OF THE PARENT COMPANY | ||||
Common stock, par value (in dollars per share) | $ / shares | $ 0.001 | $ 0.001 | ||
Common stock, shares authorized (in shares) | 100,000,000 | 100,000,000 | 100,000,000 | 100,000,000 |
Common stock, shares issued (in shares) | 61,367,337 | 61,367,337 | 60,537,099 | 60,537,099 |
Common stock, shares outstanding (in shares) | 61,367,337 | 61,367,337 | 60,537,099 | 60,537,099 |
Parent Company | ||||
CONDENSED FINANCIAL INFORMATION OF THE PARENT COMPANY | ||||
Common stock, par value (in dollars per share) | $ / shares | $ 0.001 | $ 0.001 | ||
Common stock, shares authorized (in shares) | 100,000,000 | 100,000,000 | 100,000,000 | 100,000,000 |
Common stock, shares issued (in shares) | 61,367,337 | 61,367,337 | 60,537,099 | 60,537,099 |
Common stock, shares outstanding (in shares) | 61,367,337 | 61,367,337 | 60,537,099 | 60,537,099 |
Amount Restricted To Transfer From Subsidiary To Parent | ¥ 524,181 | $ 70,511 | ¥ 624,496 | $ 92,349 |
CONDENSED FINANCIAL INFORMATI_5
CONDENSED FINANCIAL INFORMATION OF THE PARENT COMPANY - COMPREHENSIVE INCOME (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Jun. 30, 2021 | Jun. 30, 2020 | Jun. 30, 2019 | |
Condensed Income Statements, Captions | |||
General and administrative expenses | $ 69,982 | $ 39,114 | $ 40,701 |
Loss from operations | 87,245 | 69,428 | 123,626 |
Interest income | 14,131 | 13,060 | 11,839 |
Interest expenses | (553) | (306) | (575) |
Foreign exchange (losses) gains | (6,219) | 599 | (1,161) |
Income before income taxes | 109,892 | 97,497 | 143,723 |
Income tax expenses | 20,554 | 18,171 | 18,184 |
Net income | 89,709 | 79,396 | 125,261 |
Other comprehensive income, net of tax of nil | |||
Translation adjustment | 96,577 | (28,313) | (31,602) |
Comprehensive income | 185,915 | 51,013 | 93,937 |
Parent Company | |||
Condensed Income Statements, Captions | |||
General and administrative expenses | 21,090 | 1,344 | 1,511 |
Loss from operations | (21,090) | (1,344) | (1,511) |
Other expense, net | 0 | (346) | |
Interest income | 117 | 309 | 0 |
Interest expenses | 0 | (90) | (562) |
Foreign exchange (losses) gains | 1,532 | (1,043) | (72) |
Share of net income of subsidiaries | 109,150 | 81,564 | 127,752 |
Income before income taxes | 89,709 | 79,396 | 125,261 |
Income tax expenses | 0 | 0 | |
Net income | 89,709 | 79,396 | 125,261 |
Other comprehensive income, net of tax of nil | |||
Translation adjustment | 96,331 | (27,996) | (31,341) |
Comprehensive income | $ 186,040 | $ 51,400 | $ 93,920 |
CONDENSED FINANCIAL INFORMATI_6
CONDENSED FINANCIAL INFORMATION OF THE PARENT COMPANY - CASH FLOWS (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Jun. 30, 2021 | Jun. 30, 2020 | Jun. 30, 2019 | |
Cash flows from operating activities: | |||
Net income | $ 89,338 | $ 79,326 | $ 125,539 |
Adjustments to reconcile net income to net cash used in operating activities: | |||
Share of net income of subsidiaries | (604) | (3,131) | (404) |
Share-based compensation expenses | 9,724 | 410 | 238 |
Fair value adjustments of a bifurcated derivative | 0 | 346 | |
Net cash used in operating activities | 79,283 | 175,124 | 100,521 |
Cash flows from investing activities: | |||
Net cash (used in) provided by investing activities | 270,258 | (187,580) | (9,888) |
Cash flows from financing activities: | |||
Repayment of convertible bond | 0 | 20,753 | 0 |
Payment of dividends | (12,107) | (12,713) | (10,862) |
Net cash provided by (used in) financing activities | (12,218) | (18,213) | (10,155) |
Net increase (decrease) in cash, cash equivalents and restricted cash | 376,450 | (39,290) | 71,078 |
Cash, cash equivalents and restricted cash, beginning of year | 319,097 | 358,387 | 287,309 |
Cash, cash equivalents and restricted cash, end of year | 695,547 | 319,097 | 358,387 |
Parent Company | |||
Cash flows from operating activities: | |||
Net income | 89,709 | 79,396 | 125,261 |
Adjustments to reconcile net income to net cash used in operating activities: | |||
Share of net income of subsidiaries | (109,150) | (81,564) | (127,752) |
Share-based compensation expenses | 9,724 | 410 | 238 |
Accretion of convertible bond | 0 | 57 | 230 |
Fair value adjustments of a bifurcated derivative | 0 | 0 | 346 |
Change in operating assets and liabilities | 5,065 | (142) | (28) |
Net cash used in operating activities | (4,652) | (1,843) | (1,705) |
Cash flows from investing activities: | |||
Loans to subsidiaries | 0 | (19,775) | (4,200) |
Maturity of short-term investments | 11,318 | ||
Net cash (used in) provided by investing activities | 11,318 | (19,775) | (4,200) |
Cash flows from financing activities: | |||
Repayment of convertible bond | (20,753) | ||
Proceeds of loans from subsidiaries | 0 | 20,000 | 43,538 |
Payment of dividends | (12,107) | (12,713) | (10,862) |
Net cash provided by (used in) financing activities | (12,107) | (13,466) | 32,676 |
Net increase (decrease) in cash, cash equivalents and restricted cash | (5,441) | (35,084) | 26,771 |
Cash, cash equivalents and restricted cash, beginning of year | 13,265 | 48,349 | 21,578 |
Cash, cash equivalents and restricted cash, end of year | $ 7,824 | $ 13,265 | $ 48,349 |