[Financial Highlights](index=1&type=section&id=Financial%20Highlights) [Consolidated Statement of Profit or Loss](index=1&type=section&id=Consolidated%20Statement%20of%20Profit%20or%20Loss) For the year ended March 31, 2025, the Group's revenue increased by **56.7%** year-on-year to **HK$43.71 million**, and despite gross profit decreasing from **HK$5.44 million** to **HK$3.95 million**, the annual loss significantly narrowed from **HK$43.67 million** in the prior year to **HK$4.78 million**, primarily due to a net reversal of impairment losses on trade receivables Consolidated Statement of Profit or Loss Summary (HKD '000) | Metric | 2025 | 2024 | Year-on-Year Change | | :--- | :--- | :--- | :--- | | Revenue | 43,708 | 27,883 | +56.7% | | Gross Profit | 3,947 | 5,439 | -27.4% | | Loss Before Tax | (4,782) | (44,434) | Loss narrowed by 89.2% | | Loss for the Year Attributable to Owners of the Company | (4,782) | (43,668) | Loss narrowed by 89.1% | | Basic Loss Per Share (HK cents) | (4.84) | (45.44) | Loss narrowed by 89.3% | - The year saw a net reversal of impairment losses on trade receivables of **HK$6.67 million**, compared to an impairment loss provision of **HK$34.45 million** in the prior year, which was a key factor in the significant narrowing of the annual loss[2](index=2&type=chunk) [Consolidated Statement of Profit or Loss and Other Comprehensive Income](index=2&type=section&id=Consolidated%20Statement%20of%20Profit%20or%20Loss%20and%20Other%20Comprehensive%20Income) This year, total other comprehensive income amounted to **HK$17.30 million**, primarily due to a **HK$18.49 million** gain from reclassification of cumulative exchange reserves upon disposal of overseas operations, resulting in a turnaround to total comprehensive income attributable to owners of the Company of **HK$12.52 million**, compared to a total comprehensive expense of **HK$44.23 million** in the prior year Other Comprehensive Income/(Expense) Summary (HKD '000) | Item | 2025 | 2024 | | :--- | :--- | :--- | | Loss for the Year | (4,782) | (43,668) | | Other Comprehensive Income/(Expense) for the Year | 17,303 | (563) | | **Total Comprehensive Income/(Expense) for the Year Attributable to Owners of the Company** | **12,521** | **(44,231)** | - A reclassification adjustment of cumulative exchange reserves amounting to **HK$18.49 million** from the disposal of overseas operations was the primary reason for the other comprehensive income recorded this year[3](index=3&type=chunk) [Consolidated Statement of Financial Position](index=3&type=section&id=Consolidated%20Statement%20of%20Financial%20Position) As of March 31, 2025, the Group's total assets increased to **HK$51.88 million**, and total liabilities significantly decreased to **HK$7.30 million**, leading to a substantial improvement in the balance sheet with total equity rising from **HK$16.75 million** to **HK$44.58 million**, and net current assets increasing from **HK$14.48 million** to **HK$43.49 million** Consolidated Statement of Financial Position Summary (HKD '000) | Metric | 2025 | 2024 | | :--- | :--- | :--- | | **Assets** | | | | Non-current Assets | 1,081 | 2,267 | | Current Assets | 50,795 | 29,772 | | **Total Assets** | **51,876** | **32,039** | | **Equity and Liabilities** | | | | Total Equity | 44,575 | 16,750 | | Current Liabilities | 7,301 | 15,289 | | **Total Liabilities** | **7,301** | **15,289** | | **Total Equity and Liabilities** | **51,876** | **32,039** | - Cash and cash equivalents significantly increased from **HK$0.727 million** to **HK$15.04 million**, substantially enhancing the Group's liquidity[4](index=4&type=chunk) [Notes to the Consolidated Financial Statements](index=5&type=section&id=Notes%20to%20the%20Consolidated%20Financial%20Statements) [1. Company Information](index=5&type=section&id=1.%20Company%20Information) The Company is an exempted limited liability company incorporated in the Cayman Islands, primarily engaged in design services and advertising through mobile devices, e-commerce, film trading and production, with financial statements prepared in Hong Kong Dollars - The Group is primarily engaged in mobile device design and advertising, internet product sales (e-commerce), film trading and production, and other related services[7](index=7&type=chunk) - The Company's directors believe that the Company has no direct and ultimate holding company or ultimate controlling party[7](index=7&type=chunk) [3. Segment Information](index=7&type=section&id=3.%20Segment%20Information) The Group's operations are divided into two main segments: advertising and e-commerce, with the advertising segment turning profitable this year with **HK$9.36 million** in results, while the e-commerce segment shifted from profit to loss with **HK$1.38 million** in losses, leading to an overall segment result improvement from a **HK$41.40 million** loss last year to a **HK$7.97 million** profit Segment Revenue and Results (HKD '000) | Segment | Revenue (2025) | Revenue (2024) | Results (2025) | Results (2024) | | :--- | :--- | :--- | :--- | :--- | | Advertising | 13,686 | 5,800 | 9,357 | (42,753) | | E-commerce | 30,022 | 22,083 | (1,384) | 1,352 | | **Total** | **43,708** | **27,883** | **7,973** | **(41,401)** | - All revenue from external customers originated from the Hong Kong region[17](index=17&type=chunk) [9. Loss Per Share](index=11&type=section&id=9.%20Loss%20Per%20Share) Basic and diluted loss per share for the year was **4.84 HK cents**, a significant narrowing from **45.44 HK cents** (restated) in the prior year, with the weighted average number of shares increasing due to the rights issue in March 2025 Loss Per Share Calculation | Metric | 2025 | 2024 (Restated) | | :--- | :--- | :--- | | Loss for the Year Attributable to Owners of the Company (HKD '000) | (4,782) | (43,668) | | Weighted Average Number of Shares (thousands) | 98,749 | 96,097 | | **Basic and Diluted Loss Per Share (HK cents)** | **(4.84)** | **(45.44)** | [10. Trade Receivables](index=12&type=section&id=10.%20Trade%20Receivables) At the end of the reporting period, total trade receivables amounted to **HK$55.74 million**, with a net amount of **HK$16.48 million** after an impairment allowance for credit losses of **HK$39.27 million**, and despite some overdue amounts, management believes these balances are recoverable due to no recent default records - Net trade receivables increased from **HK$11.29 million** to **HK$16.48 million**, while the allowance for credit losses decreased from **HK$55.02 million** to **HK$39.27 million**[36](index=36&type=chunk) - The credit period granted to customers is a maximum of **90 days**[37](index=37&type=chunk) [Management Discussion and Analysis](index=13&type=section&id=Management%20Discussion%20and%20Analysis) [Business and Financial Review](index=13&type=section&id=Business%20and%20Financial%20Review) This year, the Group's revenue grew by **57%** year-on-year to approximately **HK$43.71 million**, driven by both advertising and e-commerce segments, while the gross profit margin decreased from **19.5%** to **9.0%** due to a higher proportion of lower-margin e-commerce revenue, and the loss attributable to owners of the Company significantly narrowed to **HK$4.78 million**, primarily due to the net impact of impairment loss provisions on trade receivables - Revenue increased by **57%** year-on-year to approximately **HK$43.71 million**, primarily due to increased turnover in both the advertising and e-commerce segments[40](index=40&type=chunk) - Gross profit margin decreased from **19.5%** to **9.0%**, mainly due to an increased proportion of revenue from the lower-margin e-commerce segment[40](index=40&type=chunk) - Loss attributable to owners of the Company significantly decreased from **HK$43.67 million** to **HK$4.78 million**[40](index=40&type=chunk) [Significant Investments](index=13&type=section&id=Significant%20Investments) The Group maintains a diversified investment portfolio and closely monitors market trends, with financial assets held for trading totaling approximately **HK$17.12 million** and equity instruments at fair value through other comprehensive income totaling approximately **HK$1.08 million** at the end of the reporting period, and the Group remains committed to achieving long-term returns from its investments Financial Assets Held for Trading (HKD '000) | Name of Investee Company | Fair Value as at March 31, 2025 | Percentage of Total Assets | | :--- | :--- | :--- | | Capital Strategic Investment Limited (2324.HK) | 1,838 | 3.5% | | Asia Resources Holdings Limited (8413.HK) | 948 | 1.8% | | Other Listed Securities | 14,338 | 27.6% | | **Total** | **17,124** | **32.9%** | Equity Instruments at Fair Value Through Other Comprehensive Income (HKD '000) | Name of Investee Company | Fair Value as at March 31, 2025 | Percentage of Total Assets | | :--- | :--- | :--- | | Regal Time Group Holdings Limited (1327) | 514 | 1.0% | | Other Listed Securities | 567 | 1.1% | | **Total** | **1,081** | **2.1%** | - The Group's investment strategy is to invest in a diversified and flexible portfolio to maximize sustainable long-term returns[45](index=45&type=chunk) [Capital Structure, Liquidity and Financial Resources](index=15&type=section&id=Capital%20Structure%2C%20Liquidity%20and%20Financial%20Resources) At the end of the reporting period, the Group's cash and bank balances significantly increased to **HK$15.04 million**, with no bank borrowings and a zero gearing ratio, and during the year, the Company completed a capital reorganization and rights issue, improving its capital structure and liquidity position - As of March 31, 2025, total cash and bank balances were approximately **HK$15.04 million**, compared to **HK$0.727 million** in the prior year[50](index=50&type=chunk) - The Group had no bank borrowings and a zero gearing ratio as of March 31, 2025[50](index=50&type=chunk) - During the year, the Company completed a capital reorganization and rights issue, issuing **156 million** rights shares[49](index=49&type=chunk) [Share Option Scheme](index=16&type=section&id=Share%20Option%20Scheme) As of March 31, 2025, outstanding share options granted under the share option scheme involved **5,888,400 shares**, representing **2.51%** of the issued shares, with **9,665,200** options lapsing during the year and no new options granted or exercised - As of March 31, 2025, outstanding share options involved **5,888,400 shares**, representing **2.51%** of the issued shares[60](index=60&type=chunk) - A total of **9,665,200** share options lapsed during the year[63](index=63&type=chunk) [Outlook](index=19&type=section&id=Outlook) The Group remains confident in accelerated growth for 2025, primarily driven by Hong Kong's strong economic recovery and the expansion of the digital economy, with future plans including continued development of existing businesses, seeking acquisition and collaboration opportunities, and potential expansion into other industries such as media and culture for business diversification - The Group is optimistic about future growth, viewing Hong Kong's economic recovery and the expansion of the digital economy as key drivers[67](index=67&type=chunk) - Future plans include: - Continued development of advertising and e-commerce businesses - Business expansion through acquisitions, product portfolio enhancement, and collaborations - Diversification into other industries such as media and culture[73](index=73&type=chunk) [Other Information](index=20&type=section&id=Other%20Information) [Dividend](index=20&type=section&id=Dividend) The Board does not recommend the payment of any dividend for the year ended March 31, 2025 - The Board does not recommend the payment of any dividend for the current year[69](index=69&type=chunk) [Corporate Governance](index=20&type=section&id=Corporate%20Governance) The Group has complied with all code provisions of the Corporate Governance Code during the reporting year, and all directors have confirmed compliance with the Model Code for Securities Transactions by Directors - The Group has adopted and consistently complied with all code provisions of the Corporate Governance Code as set out in Appendix C1 to the Listing Rules during the current year[71](index=71&type=chunk) [Directors' and Major Shareholders' Interests](index=21&type=section&id=Directors%27%20and%20Major%20Shareholders%27%20Interests) The report discloses that four directors each hold **490,700** unlisted share options, and apart from the disclosed options, no directors or chief executives held disclosable interests in shares, and furthermore, no major shareholders held disclosable interests or short positions at the end of the reporting period - Four directors (Sun Wei, Man Qiaozhen, Wang Miaojun, Wang Yujie) each hold **490,700** unlisted share options, each representing **0.21%** of the issued share capital[74](index=74&type=chunk) - As of March 31, 2025, no major shareholders held any interests or short positions in the shares or underlying shares that are required to be disclosed under the Securities and Futures Ordinance[77](index=77&type=chunk)

Group 1 - The core point of the article highlights the performance of China National Cultural Industry (00745.HK), which saw a significant increase in its stock price by 34.27% to HKD 0.239 per share, with a trading volume of 2.1087 million shares and a turnover of HKD 431,800, reflecting a volatility of 30.9% [1] - Over the past month, China National Cultural Industry has achieved a cumulative increase of 1.71%, and since the beginning of the year, it has risen by 60.79%, outperforming the Hang Seng Index by 22.01% [1] - Financial data shows that as of September 30, 2024, the company reported total operating revenue of HKD 23.5097 million, a year-on-year growth of 4.33%, while the net profit attributable to the parent company was a loss of HKD 1.1552 million, with a year-on-year increase of 82.51%. The gross profit margin stood at 13.67%, and the debt-to-asset ratio was 47.6% [1] Group 2 - Currently, there are no institutional investment ratings for China National Cultural Industry [2] - In terms of industry valuation, the average price-to-earnings (P/E) ratio for the media and entertainment sector (TTM) is -6.98 times, with a median of -1.49 times. China National Cultural Industry has a P/E ratio of -1.11 times, ranking 99th in the industry [2] - The company primarily engages in providing advertising media services and film production and distribution [2]

Share Option Scheme - The maximum number of shares available for issuance under the share option scheme is clarified to be 15,555,325 shares, correcting a previous printing error[3] Annual Report - The annual report for the year ending March 31, 2024, was published on July 31, 2024[3] - No other changes were made to the content of the annual report aside from the clarification mentioned[4] Corporate Governance - The announcement was made on June 16, 2025, indicating ongoing corporate governance and transparency efforts[6] - The board acknowledges the error and takes responsibility for ensuring accurate information dissemination[3] Board of Directors - The board of directors consists of executive directors Sun Wei and Man Qiaozhen, along with independent non-executive directors Liao Guangsheng, Wang Miaojun, and Wang Yujie[6] Communication and Accountability - The company emphasizes the importance of accurate reporting and accountability in its communications[2] - The announcement is part of the company's commitment to maintaining investor relations and providing updates on corporate matters[2] - The company continues to focus on its operational integrity and shareholder communication[2] Company Information - The company operates under the name China National Culture Group Limited, registered in the Cayman Islands[2]

Group 1: Market Performance - The automotive parts sector saw significant stock price increases, with Tongxin Transmission rising by 22.83%, and several other companies, including Meichen Technology and Xinrui Technology, hitting the 20% daily limit [1][2] - Other notable performers included Jindao Technology, Huayang Transmission, and Disenli, all of which experienced gains exceeding 10% [1][2] Group 2: Policy Impact - Recent directives from the Ministry of Industry and Information Technology and the State-owned Assets Supervision and Administration Commission aim to stabilize supply chains and promote high-quality development in the automotive industry [1][3] - The implementation of the "Regulations on Ensuring Payment to Small and Medium Enterprises" on June 1 mandates that large enterprises must pay small and medium suppliers within 60 days of delivery, addressing long-standing payment issues in the automotive supply chain [1][3] Group 3: Corporate Commitments - Major automotive companies, including FAW Group, Dongfeng Motor, and Guangzhou Automobile Group, have committed to limiting supplier payment terms to 60 days, aligning with the new regulations and promoting a healthier industry ecosystem [3][4][5] - This collective commitment is seen as a move to resist unhealthy competition and restore balance within the industry [3][12] Group 4: Industry Dynamics - The average accounts payable turnover days for 32 listed vehicle manufacturers reached 109.74 days, while 241 listed auto parts companies had an average accounts receivable turnover of 100.99 days, indicating significant pressure on smaller suppliers [11] - The automotive industry has historically seen a power imbalance, with large manufacturers exerting significant influence over payment terms, often leading to financial strain on smaller suppliers [11][12]

Financial Performance - For the six months ended September 30, 2024, the company reported revenue of HKD 26,070,000, an increase of 4.3% from HKD 24,988,000 in the same period of 2023[3] - The gross profit for the same period was HKD 3,564,000, compared to HKD 3,738,000 in 2023, reflecting a decrease of 4.7%[3] - The company recorded a loss attributable to owners of HKD 1,281,000, significantly improved from a loss of HKD 7,323,000 in the previous year, representing an 82.5% reduction in losses[3] - The basic and diluted loss per share was HKD 1.64, compared to HKD 9.37 in the prior year, indicating a substantial improvement[3] - The total revenue for the group for the six months ended September 30, 2024, was HKD 26,070, down from HKD 24,988 in 2023[22] - The group recorded a pre-tax loss of HKD 1,281 for the six months ended September 30, 2024, compared to a loss of HKD 7,323 in the same period of 2023[36] - The group experienced a net loss from financial assets of HKD 1,259 for the six months ended September 30, 2024, compared to HKD 5,764 in 2023[32] Assets and Liabilities - Total assets decreased to HKD 25,690,000 as of September 30, 2024, down from HKD 32,039,000 as of March 31, 2024[7] - Current liabilities increased to HKD 12,228,000 from HKD 15,289,000, indicating a reduction in short-term obligations[8] - The total equity attributable to owners decreased to HKD 13,462,000 from HKD 16,750,000, reflecting the overall financial performance during the period[8] - Cash and cash equivalents at the end of the period were HKD 1,168,000, up from HKD 727,000 at the beginning of the period, showing a positive cash flow trend[14] - The company reported a total of HKD 13,443,000 in trading financial assets as of September 30, 2024, a slight decrease from HKD 13,914,000 as of March 31, 2024[42] - Total current assets were approximately HKD 24,901,000, while total current liabilities were approximately HKD 12,228,000 as of September 30, 2024[64] Cash Flow - The company experienced a net cash inflow from operating activities of HKD 441,000, a significant recovery from a cash outflow of HKD 4,219,000 in the previous year[14] - Cash and bank balances totaled approximately HKD 1,168,000 as of September 30, 2024, up from HKD 727,000 on March 31, 2024[64] - The company has no bank borrowings and maintains a capital debt ratio of zero as of September 30, 2024[64] Revenue Breakdown - For the six months ended September 30, 2024, the group reported revenue from advertising of HKD 8,580, a decrease from HKD 24,988 in the same period of 2023[22] - E-commerce revenue for the same period was HKD 17,490, compared to HKD 26,070 in 2023, indicating a decline[22] - Gross profit decreased to approximately HKD 3,564,000, with a gross margin of 13.7%, down from 15.0% in the previous year, primarily due to increased revenue from the lower-margin e-commerce segment[60] Dividends and Shareholder Information - The group did not declare any interim dividends for the six months ended September 30, 2024, consistent with the previous year[34] - The board of directors did not recommend the payment of an interim dividend for the current period[59] - As of September 30, 2024, no individuals were reported to hold or be deemed to hold interests or short positions in shares or related securities that require disclosure under the Securities and Futures Ordinance[82] Management and Governance - The audit committee, composed of three independent non-executive directors, reviewed and recommended the approval of the interim financial statements[89] - The group adopted all new and revised Hong Kong Financial Reporting Standards effective from April 1, 2024, with no significant changes to accounting policies[20] Future Plans and Strategy - The group aims to expand revenue sources and diversify its business, actively seeking new business opportunities in various industries and regions[75] - Future plans include continuous development of advertising, e-commerce, and film production-related businesses, as well as strategic investments in regional and overseas film production[77] Other Information - The company did not acquire any properties, plants, or equipment during the six months ended September 30, 2024[38] - The company continues to monitor investment performance and market trends to adjust its investment strategy accordingly[42] - The group has no significant contingent liabilities or major capital commitments as of September 30, 2024[71][69] - No arrangements were made for any directors or their spouses or minor children to benefit from purchasing shares of the company or any other corporate entity during the interim period[81] - The company did not engage in any trading of its listed securities during the interim period[85] - The company maintained a credit period of 180 days on average for advertising clients[43] - Short-term employee benefits for key management personnel amounted to HKD 348,000 for the six months ended September 30, 2024, unchanged from the previous year[57] - The company’s issued and paid-up capital as of September 30, 2024, was HKD 78,122,000, consistent with the previous period[47] - The fair value loss recognized in other comprehensive income for listed equity investments was approximately HKD 1,478,000 for the six months ended September 30, 2024, compared to HKD 1,181,000 in the previous year[41] - As of September 30, 2024, accounts receivable aged analysis showed HKD 49,511,000 overdue for more than 365 days, a decrease from HKD 60,511,000 as of March 31, 2024[43] - The group operates primarily in two regions: Hong Kong and China, with no significant revenue concentration from any single customer[26] - The group has not identified any single customer contributing more than 10% of total revenue for the periods ended September 30, 2024, and 2023[26] - The board proposed a capital reorganization on October 2, 2024, involving capital reduction and share split, along with a rights issue of two shares for every adjusted share held[90]

Financial Performance - For the six months ended September 30, 2024, the company reported a revenue of HKD 26,070,000, an increase of 4.34% from HKD 24,988,000 in the same period of 2023[4] - The gross profit for the same period was HKD 3,564,000, compared to HKD 3,738,000 in 2023, reflecting a decrease of 4.66%[4] - The company recorded a loss attributable to owners of HKD 1,281,000, significantly improved from a loss of HKD 7,323,000 in the previous year, marking an improvement of 82.53%[4] - The basic and diluted loss per share was HKD 1.64, compared to HKD 9.37 in the prior year, indicating a substantial reduction in losses[4] - The group recorded a net loss before tax of HKD 1,259 for the six months ended September 30, 2024, compared to a loss of HKD 5,764 in the same period of 2023[33] - For the six months ended September 30, 2024, the company reported a loss attributable to shareholders of HKD 1,281,000, compared to a loss of HKD 7,323,000 for the same period in 2023, representing a decrease in loss of approximately 82.5%[37] Assets and Liabilities - Total assets as of September 30, 2024, were HKD 25,690,000, down from HKD 32,039,000 as of March 31, 2024, representing a decrease of 19.73%[9] - The company's total equity decreased to HKD 13,462,000 from HKD 16,750,000, a decline of 19.38%[9] - Cash and cash equivalents at the end of the period were HKD 1,168,000, compared to HKD 2,063,000 at the end of the previous year, a decrease of 43.43%[15] - Current liabilities increased to HKD 12,228,000 from HKD 15,289,000, a decrease of 20.14%[9] - Current assets amounted to approximately HKD 24,901,000, while current liabilities were approximately HKD 12,228,000 as of September 30, 2024[65] - The company has no bank borrowings and maintains a capital debt ratio of zero as of September 30, 2024[65] Revenue Breakdown - For the six months ended September 30, 2024, the group reported revenue from advertising of HKD 8,580, a decrease from HKD 24,988 in the same period of 2023[23] - E-commerce revenue for the same period was HKD 17,490, compared to HKD 26,070 in the previous year, indicating a decline[23] - The total revenue for the group for the six months ended September 30, 2024, was HKD 26,070, down from HKD 24,988 in 2023[25] - Gross profit decreased to approximately HKD 3,564,000, with a gross margin of 13.7%, down from 15.0% in the previous year, primarily due to increased revenue from the lower-margin e-commerce segment[61] Cash Flow - The company reported a net cash inflow from operating activities of HKD 441,000, a recovery from a net outflow of HKD 4,219,000 in the same period last year[15] - Cash and bank balances totaled approximately HKD 1,168,000 as of September 30, 2024, up from HKD 727,000 on March 31, 2024[65] Corporate Governance and Compliance - The group adopted all new and revised Hong Kong Financial Reporting Standards effective from April 1, 2024, with no significant changes to accounting policies[21] - The audit committee, composed of three independent non-executive directors, reviewed and recommended the approval of the interim financial statements[90] - The company has adopted and complied with the corporate governance code, with some deviations noted regarding the roles of the chairman and CEO[88] - The company confirmed that all directors complied with the standard code of conduct for securities trading during the interim period[87] Future Plans and Strategy - The group aims to expand revenue sources and diversify its business, actively seeking new opportunities in various industries and regions[76] - Future plans include continuous development of advertising, e-commerce, and film production-related businesses, as well as strategic investments in regional and overseas film production[78] Shareholder Information - No dividends were declared or proposed for the six months ended September 30, 2024, consistent with the previous year[35] - The board proposed a capital reorganization involving capital reduction and share split on October 2, 2024[91] - The board expressed gratitude to shareholders, management, and employees for their efforts and support[92] Miscellaneous - The group has no significant contingent liabilities or major capital commitments as of September 30, 2024[72][70] - The company did not engage in any trading of its listed securities during the interim period[86] - No arrangements were made for any directors or their spouses or minor children to benefit from purchasing shares of the company or any other corporate entity during the interim period[82] - As of September 30, 2024, no individuals were reported to hold or be deemed to hold interests in shares or related shares that require disclosure under the Securities and Futures Ordinance[83] - The company has not issued any convertible preference shares as of September 30, 2024[52] - The group has no inter-segment sales reported for the periods under review[23] - Employee costs, excluding director remuneration, were HKD 1,699 for the six months ended September 30, 2024, down from HKD 2,179 in 2023[34] - Short-term employee benefits for key management personnel amounted to HKD 348,000 for the six months ended September 30, 2024, unchanged from the same period in 2023[58] - The company did not acquire any property, plant, or equipment during the six months ended September 30, 2024[39] - The company experienced a foreign exchange loss of HKD 529,000 related to overseas operations, compared to a gain of HKD 1,077,000 in the previous year[6] - The company maintained a diversified investment portfolio, with trading financial assets valued at HKD 13,443,000 as of September 30, 2024, down from HKD 13,914,000 as of March 31, 2024[43]

C hin a Natio nal C ulture Group Limite 業 集 團 d 中 國 國 家 文 化 產 有 限 公 司 ANNUAL REP O R T 2024 年 報 目錄 | 2 | 公司資料 | | --- | --- | | 3 | 主席報告 | | 4 | 管理層討論及分析 | | 9 | 董事會報告 | | 19 | 企業管治報告 | | 28 | 董事履歷 | | 30 | 環境、社會及管治報告 | | 47 | 獨立核數師報告 | | 52 | 綜合損益表 | | 53 | 綜合損益及其他全面收入表 | | 54 | 綜合財務狀況表 | | 56 | 綜合權益變動表 | | 57 | 綜合現金流量表 | | 58 | 綜合財務報表附註 | | 118 | 財務資料概要 | 01 中國國家文化產業集團有限公司 目錄 公司資料 董事 執行董事 孫薇女士 滿巧珍女士 獨立非執行董事 廖廣生先生 王妙君女士 王玉潔女士 審核委員會 廖廣生先生（ 主席） 王妙君女士 王玉潔女士 薪酬委員會 廖廣生先生（ 主席） 孫薇女士 王妙君女士 王玉潔女士 提名委員會 王妙君女士（ 主席） 孫 ...

[Supplementary Announcement Overview](index=1&type=section&id=Supplementary%20Announcement%20Overview) This announcement supplements the 2024 annual results, providing additional details for the business review and audit committee sections [Purpose and Scope of Announcement](index=1&type=section&id=Purpose%20and%20Scope%20of%20Announcement) This announcement supplements the China National Culture Group Co., Ltd.'s 2024 annual results, providing additional information for the "Business Review" and "Audit Committee" sections - This announcement supplements the annual results announcement published on June 28, 2024[3](index=3&type=chunk) - The supplementary content primarily addresses the "Business Review" and "Audit Committee" sections[3](index=3&type=chunk) [Supplementary Information on Business Review](index=1&type=section&id=Supplementary%20Information%20on%20Business%20Review) This section details the performance and strategic adjustments for the advertising and e-commerce businesses [Advertising Business](index=1&type=section&id=Advertising%20Business) The Group's advertising business revenue declined due to China's economic slowdown, stricter regulations, reduced consumer confidence, and increased industry competition; the Group is shifting its client base to Hong Kong to expand market share - The Chinese advertising market faces multiple challenges, including slowing economic growth, stricter internet industry regulations, reduced consumer confidence, and intensified industry competition, leading to decreased corporate advertising spending and compressed profit margins[3](index=3&type=chunk) - The Group decided to shift its client base to Hong Kong, leveraging Hong Kong's relatively stable economic environment, stronger consumer confidence, and diversified media landscape[3](index=3&type=chunk) - For the year ended March 31, 2024, advertising segment revenue decreased[3](index=3&type=chunk) - The Group will continue to expand its client base in Hong Kong's advertising business, provide customized services, and seek participation in exhibitions or collaborations with renowned companies to enhance visibility[4](index=4&type=chunk) [E-commerce Business](index=2&type=section&id=E-commerce%20Business) The Group's e-commerce wholesale business, primarily selling used iPhones and components, saw revenue growth due to increased market demand driven by frequent new iPhone releases, consumer focus on cost-effectiveness, and high iPhone repair costs; the Group plans to optimize its product portfolio and enhance its position in the Hong Kong market - The Group operates a wholesale business of used iPhones and components through its e-commerce platform, responsible for procurement, pricing, testing, packaging, and delivery[5](index=5&type=chunk) - E-commerce business revenue increased, primarily due to growing demand for used iPhones and components[5](index=5&type=chunk) - Demand growth is attributed to frequent new iPhone releases leading to older models entering the secondary market, consumers prioritizing cost-effectiveness, and high iPhone repair costs increasing demand for alternative components[5](index=5&type=chunk) - The Group will continue to allocate resources to provide customized services and products to enhance its position in the Hong Kong market, and regularly review its product portfolio to meet market demand[6](index=6&type=chunk) [Supplementary Information on Audit Committee](index=2&type=section&id=Supplementary%20Information%20on%20Audit%20Committee) The Audit Committee reviewed the annual results, accounting principles, and financial reporting matters for the year ended March 31, 2024 [Audit Committee Work](index=2&type=section&id=Audit%20Committee%20Work) The Audit Committee reviewed the Group's annual results, accounting principles, and practices for the year ended March 31, 2024, and discussed audit and financial reporting matters related to the consolidated financial statements - The Audit Committee reviewed the Group's annual results for the year ended March 31, 2024[7](index=7&type=chunk) - The review included the accounting principles and practices adopted by the Group[7](index=7&type=chunk) - The Audit Committee discussed audit and financial reporting matters related to the preparation of the consolidated financial statements of the Company and its subsidiaries[7](index=7&type=chunk) [Other Information](index=2&type=section&id=Other%20Information) This section confirms the unchanged status of the main annual results announcement and lists the board of directors' composition [Conclusion of Announcement and Board Composition](index=2&type=section&id=Conclusion%20of%20Announcement%20and%20Board%20Composition) Except for the disclosures in this supplementary announcement, the remaining content of the annual results announcement remains unchanged; the announcement is signed by Executive Director Sun Wei and lists the board members - Except for the disclosures in this announcement, the remaining content of the annual results announcement remains unchanged[8](index=8&type=chunk) - The announcement is signed by Sun Wei, Executive Director of China National Culture Group Co., Ltd[9](index=9&type=chunk) - The Board of Directors comprises two Executive Directors (Ms. Sun Wei, Ms. Man Qiaozhen) and three Independent Non-executive Directors (Mr. Liao Guangsheng, Ms. Wang Miaojun, Ms. Wang Yujie)[10](index=10&type=chunk)

[Company Announcements and Financial Highlights](index=1&type=section&id=Company%20Announcements%20and%20Financial%20Highlights) This section presents the audited consolidated annual results and key financial statements, highlighting the company's significant losses [Annual Results Announcement](index=1&type=section&id=Annual%20Results%20Announcement) The company announced its audited consolidated results for the year ended March 31, 2024, indicating significant losses - The audited consolidated results of the Company and its subsidiaries (collectively, the "Group") for the year ended March 31, 2024, along with comparative figures, have been announced[1](index=1&type=chunk) - Hong Kong Exchanges and Clearing Limited and The Stock Exchange of Hong Kong Limited take no responsibility for the contents of this announcement[7](index=7&type=chunk) [Consolidated Statement of Profit or Loss](index=1&type=section&id=Consolidated%20Statement%20of%20Profit%20or%20Loss) Revenue significantly decreased, leading to a sharp reduction in gross profit and a substantial increase in both pre-tax and attributable losses Consolidated Statement of Profit or Loss Key Financial Data | Indicator | 2024 (HK$ thousand) | 2023 (HK$ thousand) | | :----------- | :-------------- | :-------------- | | Revenue | 27,883 | 43,019 | | Cost of sales | (22,444) | (24,469) | | Gross profit | 5,439 | 18,550 | | Administrative expenses | (5,021) | (15,793) | | Other income or losses | (10,394) | (8,299) | | Impairment loss on trade receivables (provision) / reversal | (34,451) | 3,652 | | Loss before tax | (44,434) | (3,015) | | Income tax credit | 766 | 1,517 | | Loss for the year attributable to owners of the Company | (43,668) | (1,498) | | Loss per share (basic and diluted) | (55.90) HK cents | (1.96) HK cents | - Revenue decreased by **35% year-on-year**, primarily due to reduced turnover in the advertising segment[9](index=9&type=chunk)[117](index=117&type=chunk) - Gross profit margin declined from **43.1% to 19.5%**, mainly due to decreased revenue from higher-margin advertising business[117](index=117&type=chunk) [Consolidated Statement of Profit or Loss and Other Comprehensive Income](index=2&type=section&id=Consolidated%20Statement%20of%20Profit%20or%20Loss%20and%20Other%20Comprehensive%20Income) Total comprehensive expense attributable to owners significantly increased to HK$44,231 thousand, driven by the expanded annual loss Consolidated Statement of Profit or Loss and Other Comprehensive Income Key Data | Indicator | 2024 (HK$ thousand) | 2023 (HK$ thousand) | | :------------------------- | :-------------- | :-------------- | | Loss for the year | (43,668) | (1,498) | | Exchange differences on translation of overseas operations | (37) | (673) | | Fair value loss on equity instruments at fair value through other comprehensive income | (526) | (4,687) | | Other comprehensive expense for the year, net of tax | (563) | (5,360) | | Total comprehensive expense for the year attributable to owners of the Company | (44,231) | (6,858) | [Consolidated Statement of Financial Position](index=3&type=section&id=Consolidated%20Statement%20of%20Financial%20Position) As of March 31, 2024, total assets and equity significantly decreased, with intangible assets at zero and current assets shrinking due to reduced financial assets and cash Consolidated Statement of Financial Position Key Data | Indicator | 2024 (HK$ thousand) | 2023 (HK$ thousand) | | :------------- | :-------------- | :-------------- | | **Assets** | | | | Intangible assets | – | 3,207 | | Equity instruments at fair value through other comprehensive income | 2,267 | 2,793 | | Financial assets held for trading | 13,914 | 21,309 | | Trade receivables | 11,294 | 43,276 | | Cash and cash equivalents | 727 | 6,282 | | Total assets | 32,039 | 78,006 | | **Equity** | | | | Share capital | 31,249 | 31,249 | | Reserves | (14,499) | 29,732 | | Total equity | 16,750 | 60,981 | | **Liabilities** | | | | Total liabilities | 15,289 | 17,025 | - Non-current assets decreased to approximately **HK$2,267 thousand** (2023: HK$6,000 thousand) due to impairment losses on intangible assets[118](index=118&type=chunk) - Total current assets significantly decreased from **HK$72,006 thousand to HK$29,772 thousand**, primarily due to reductions in financial assets held for trading and cash and cash equivalents[95](index=95&type=chunk) [Notes to the Consolidated Financial Statements](index=5&type=section&id=Notes%20to%20the%20Consolidated%20Financial%20Statements) This section provides detailed notes on the company's accounting policies, segment information, revenue recognition, and other financial disclosures [Company Information](index=5&type=section&id=Company%20Information) China National Culture Group Limited's principal activities include mobile device design services, advertising, e-commerce, and film production, with the company incorporated in the Cayman Islands and using HKD as its functional currency - The Group's principal activities are design services and advertising through mobile devices, e-commerce for product sales via the internet, film trading and production, and other film-related services[16](index=16&type=chunk) - The Company was incorporated in the Cayman Islands as an exempted company with limited liability on August 27, 2002[40](index=40&type=chunk) - The consolidated financial statements are presented in Hong Kong Dollars ("HK$"), the Company's functional currency[41](index=41&type=chunk) [Application of New and Revised Hong Kong Financial Reporting Standards](index=5&type=section&id=Application%20of%20New%20and%20Revised%20Hong%20Kong%20Financial%20Reporting%20Standards) The Group adopted new and revised HKFRS effective April 1, 2023, primarily impacting accounting policy disclosures without material effect on financial performance or position, and anticipates no significant future impact from other issued but not yet effective standards - The Group first applied Hong Kong Financial Reporting Standards mandatorily effective for the annual period beginning April 1, 2023[17](index=17&type=chunk) - The application of new and revised HKFRS had no material impact on the Group's financial performance and position for the current and prior years, except for affecting the disclosures of accounting policies in the consolidated financial statements[17](index=17&type=chunk)[20](index=20&type=chunk) - HKAS 1 (Amendments) replaced "significant accounting policies" with "material accounting policy information" and clarified materiality judgment criteria[18](index=18&type=chunk)[19](index=19&type=chunk)[45](index=45&type=chunk) [New and Revised Hong Kong Financial Reporting Standards Mandatorily Effective for the Current Year](index=5&type=section&id=New%20and%20Revised%20Hong%20Kong%20Financial%20Reporting%20Standards%20Mandatorily%20Effective%20for%20the%20Current%20Year) The Group adopted HKFRS 17 (Insurance Contracts) and amendments to HKAS 1 and HKFRS Practice Statement 2 (Disclosure of Accounting Policies) for the current year - Hong Kong Financial Reporting Standard 17 (Insurance Contracts) and Hong Kong Accounting Standard 1 and Hong Kong Financial Reporting Standards Practice Statement 2 (Disclosure of Accounting Policies Amendments) were first applied in the current year[42](index=42&type=chunk) - HKAS 1 (Amendments) replaced "significant accounting policies" with "material accounting policy information" and emphasized materiality judgment for accounting policy information[18](index=18&type=chunk)[19](index=19&type=chunk) [Revised Hong Kong Financial Reporting Standards Issued But Not Yet Effective](index=6&type=section&id=Revised%20Hong%20Kong%20Financial%20Reporting%20Standards%20Issued%20But%20Not%20Yet%20Effective) This section lists new and revised HKFRS issued but not yet effective, with no anticipated material impact on the Group's future financial position or performance - Issued but not yet effective amendments include HKFRS 10 and HKAS 28 (Sale or Contribution of Assets between an Investor and its Associate or Joint Venture), HKFRS 16 (Lease Liability in a Sale and Leaseback), among others[21](index=21&type=chunk) - The Directors of the Company do not expect the application of all revised HKFRS to have a material impact on the Group's financial position and performance or disclosures in the foreseeable future[46](index=46&type=chunk) [Segment Information](index=7&type=section&id=Segment%20Information) The Group's operating segments include advertising, film, and e-commerce, with advertising revenue and results significantly declining, while e-commerce revenue grew but profit decreased, and a major shift in revenue source from China to Hong Kong occurred - The Group's operating and reportable segments include: (a) the advertising segment (providing design services and advertising through mobile devices); (b) the film segment (film trading and production and providing other film-related services); and (c) the e-commerce segment (selling products on the internet)[24](index=24&type=chunk)[47](index=47&type=chunk) [Operating Segments](index=7&type=section&id=Operating%20Segments) The board of directors, as the chief operating decision maker, assesses resource allocation and segment performance based on product or service categories - The chief operating decision maker (the Board) assesses resource allocation and segment performance based on

Financial Performance - For the six months ended September 30, 2023, the company reported a revenue of HKD 24,988,000, a decrease of 39.5% compared to HKD 41,321,000 for the same period in 2022[4] - The cost of sales for the same period was HKD 21,250,000, resulting in a gross profit of HKD 3,738,000, down from HKD 6,122,000 in 2022[4] - The company recorded a loss before tax of HKD 7,323,000, compared to a loss of HKD 261,000 in the previous year, indicating a significant increase in losses[4] - Total comprehensive loss for the period was HKD 7,427,000, compared to HKD 1,566,000 in the same period last year[6] - The company reported a basic and diluted loss per share of HKD 9.37 for the current period, compared to HKD 0.17 in the previous year[4] - The group reported a pre-tax loss of HKD 7,323,000 for the six months ended September 30, 2023, compared to a pre-tax loss of HKD 261,000 in the same period of 2022[23] - The group reported a total loss for the period of HKD 7,323,000 for the six months ended September 30, 2023, compared to a loss of HKD 128,000 in the same period of 2022[23] - The company reported a total employee cost (excluding directors' remuneration) of HKD 2,179,000 for the six months ended September 30, 2023, compared to HKD 1,895,000 in the previous year, reflecting an increase of approximately 15%[34] Assets and Equity - As of September 30, 2023, total assets amounted to HKD 65,816,000, down from HKD 78,006,000 as of March 31, 2023[8] - The company's total equity decreased to HKD 53,554,000 from HKD 60,981,000 at the end of the previous reporting period[10] - Cash and cash equivalents at the end of the period were HKD 2,063,000, a decrease from HKD 6,282,000 at the beginning of the period[14] - The total accounts receivable as of September 30, 2023, was HKD 66,640,000, with a provision for impairment losses of HKD 24,089,000[47] - Total cash and bank balances as of September 30, 2023, amounted to approximately HKD 2,063,000, down from HKD 6,282,000 as of March 31, 2023[65] - The company had no bank borrowings as of September 30, 2023, maintaining a capital debt ratio of zero[65] Revenue Segments - For the six months ended September 30, 2023, the advertising segment generated revenue of HKD 24,988,000, a decrease of 34% compared to HKD 37,905,000 in the same period of 2022[23] - The electronic commerce segment had no revenue for the six months ended September 30, 2023, compared to HKD 3,416,000 in the same period of 2022[27] - The group operates primarily in two regions: Hong Kong and China, with external customer revenue from Hong Kong being HKD 3,416,000 and from China being HKD 24,988,000 for the six months ended September 30, 2023[26] Expenses and Losses - The fair value loss on financial assets held for trading was HKD 5,764,000, a significant decrease from a gain of HKD 11,328,000 in the previous year[32] - Administrative expenses decreased to approximately HKD 5,297,000 from HKD 13,178,000 in the previous year, primarily due to reductions in share-based payment expenses, employee costs, and marketing expenses[61] - The group’s depreciation and amortization for the six months ended September 30, 2023, was HKD 807,000, with no new non-current assets acquired during the period[24] Corporate Governance and Compliance - The company has adopted and complied with all provisions of the Corporate Governance Code as of September 30, 2023, except for certain deviations regarding the separation of the roles of Chairman and CEO, and the appointment of non-executive directors[88] - The Audit Committee, consisting of three independent non-executive directors, has reviewed the interim financial statements for the six months ending September 30, 2023, and recommended their approval to the Board[91] Future Plans and Strategies - The company aims to expand its revenue sources and diversify its business to enhance long-term growth potential and shareholder value[77] - Future plans include continuous reporting to shareholders regarding the group's latest developments[79] - The company is actively seeking new business opportunities, including in media and cultural-related sectors[77] - The e-commerce segment did not generate any revenue during the six months ended September 30, 2023, due to intense competition, prompting the company to consider new strategies to maintain market share[63] Employee and Shareholder Information - The group has 28 full-time employees as of September 30, 2023, all employed in Hong Kong and China[76] - The company has issued stock options to six employees, each holding 490,700 options, as part of its stock option plan[57] - There were no significant changes affecting the company's performance from April 1, 2023, to September 30, 2023[74] - No changes in director information have been disclosed since the annual report date on July 28, 2023, as per Listing Rule 13.51B[89] Miscellaneous - The group has no pledged assets as of September 30, 2023, consistent with the previous period[69] - There are no significant capital commitments or contingent liabilities reported as of September 30, 2023[70][72] - The company did not declare or propose any interim dividends for the six months ended September 30, 2023, consistent with the previous year[35] - The group has adopted a stock option plan since August 29, 2014, with no options granted, exercised, or canceled during the reporting period[75] - There were no significant events after the reporting period that required disclosure as of September 30, 2023[92] - The Board expresses gratitude to shareholders, management, and employees for their efforts and support[93]