此乃要件 請即處理 閣下如對本通函任何方面或應採取之行動有任何疑問，應諮詢 閣下之股票經紀或其他註冊 證券商、銀行經理、律師、專業會計師或其他專業顧問。 閣下如已將名下之新耀萊國際集團有限公司股份全部出售或轉讓，應立即將本通函連同隨附 之代表委任表格送交買主或承讓人，或經手買賣或轉讓之銀行、股票經紀或其他代理商，以便 轉交買主或承讓人。 香港交易及結算所有限公司及香港聯合交易所有限公司對本通函之內容概不負責，對其準確 性或完整性亦不發表任何聲明，並明確表示，概不對因本通函全部或任何部份內容而產生或因 倚賴該等內容而引致之任何損失承擔任何責任。 New Sparkle Roll International Group Limited 新 耀 萊 國 際 集 團 有 限 公 司 （於 百 慕 達 註 冊 成 立 之 有 限 公 司 ） （股份代號：970） (1)授出發行新股份及購回股份之一般授權； (2)重選董事； (3)建議終止股份期權計劃及採納二零二五年股份計劃； 及 (4)股東週年大會通告 本公司謹訂於二零二五年九月二十五日（星期四）上午十一時正在香港中環皇后大道中99號中 環中心12樓2室舉行股東週年大 ...

) (Incorporated in Bermuda with limited liability 於百慕達註冊成立之有限公司 (Stock Code 股份代號: 970) ANNUAL REPORT 年報 2025 ANNUAL REPORT 2025 年報 目錄 Contents | Corporate Information | 公司資料 | 2 | | --- | --- | --- | | Financial Highlights | 財務摘要 | 7 | | Chairman's Statement | 主席報告 | 10 | | Management Discussion and Analysis | 管理層討論及分析 | 13 | | Report of the Directors | 董事會報告 | 33 | | Corporate Governance Report | 企業管治報告 | 51 | | Biographies of Directors and Senior Management | 董事及高級管理人員之履歷 | 81 | | Environmental, Social an ...

[Consolidated Statement of Comprehensive Income](index=2&type=section&id=Consolidated%20Statement%20of%20Comprehensive%20Income) The Group's consolidated statement of comprehensive income for the year ended March 31, 2025, shows a significant decrease in revenue, leading to expanded gross loss and operating loss, ultimately worsening both loss for the year and total comprehensive loss compared to the prior year Key Financial Data from Consolidated Statement of Comprehensive Income (HK$ thousand) | Metric | 2025 | 2024 | | :--- | :--- | :--- | | Revenue | 2,067,544 | 3,264,747 | | Cost of sales | (1,926,583) | (2,958,400) | | Gross profit | 140,961 | 306,347 | | Other income, gains and losses | (78,449) | (67,388) | | Operating loss | (666,565) | (550,470) | | Loss before income tax | (731,799) | (631,855) | | Loss for the year | (717,317) | (612,287) | | Total comprehensive loss for the year | (669,167) | (686,395) | - Basic and diluted loss per share attributable to owners of the Company was **(13.7) HK cents**, an improvement from **(16.1) HK cents** in the prior year, which may be related to an increase in the weighted average number of ordinary shares despite the expanded total loss[4](index=4&type=chunk) [Consolidated Statement of Financial Position](index=4&type=section&id=Consolidated%20Statement%20of%20Financial%20Position) As of March 31, 2025, the Group's consolidated statement of financial position indicates a decrease in both total assets and total liabilities, resulting in reduced net assets and total equity, with a significant contraction in net current assets Key Financial Data from Consolidated Statement of Financial Position (HK$ thousand) | Metric | 2025 | 2024 | | :--- | :--- | :--- | | **Assets** | | | | Non-current assets | 1,120,204 | 1,649,415 | | Current assets | 787,630 | 1,203,323 | | **Liabilities** | | | | Current liabilities | 722,669 | 991,977 | | Non-current liabilities | 214,890 | 269,241 | | **Equity** | | | | Net assets | 970,275 | 1,591,520 | | Total equity | 970,275 | 1,591,520 | - Net current assets significantly decreased from **HK$211,346 thousand** in 2024 to **HK$64,961 thousand** in 2025, indicating increased liquidity pressure[5](index=5&type=chunk) - Financial assets at fair value through other comprehensive income increased from **HK$133,856 thousand** in 2024 to **HK$209,168 thousand**, reflecting an increase in the value of certain investments[5](index=5&type=chunk) [Notes](index=6&type=section&id=Notes) [1. General Information](index=6&type=section&id=1.%20General%20Information) The Group's principal businesses include luxury goods and motor vehicle dealerships, after-sales services, property management, property leasing, money lending, and film-related operations, primarily in Hong Kong and Mainland China, with significant changes in the Board of Directors during the year - The Group's principal businesses cover luxury goods and motor vehicle dealerships, after-sales services, property management, property leasing, money lending, and film-related operations, primarily located in Hong Kong and Mainland China[7](index=7&type=chunk) - Following the Extraordinary General Meeting on April 23, 2024, significant changes occurred in the Board of Directors, with several executive, non-executive, and independent non-executive directors resigning, and new independent non-executive directors being appointed[7](index=7&type=chunk) [2. Basis of Preparation](index=6&type=section&id=2.%20Basis%20of%20Preparation) The consolidated financial statements are prepared in accordance with Hong Kong Financial Reporting Standards and the Hong Kong Companies Ordinance, primarily on a historical cost basis, with investment properties and certain financial instruments measured at fair value, and presented in Hong Kong dollars, involving accounting estimates and assumptions - The consolidated financial statements are prepared in accordance with Hong Kong Financial Reporting Standards issued by the Hong Kong Institute of Certified Public Accountants and the disclosure requirements of the Hong Kong Companies Ordinance[8](index=8&type=chunk) - The statements are primarily prepared on a historical cost basis, except for investment properties and certain financial instruments which are measured at fair value, and are presented in Hong Kong dollars[9](index=9&type=chunk) [3. Changes in Accounting Policies](index=7&type=section&id=3.%20Changes%20in%20Accounting%20Policies) The Group adopted several HKFRS amendments effective April 1, 2024, which had no material impact on current or prior period results and financial position, while new standards and amendments issued but not yet effective, particularly HKFRS 18, are expected to significantly affect presentation and disclosure - Amendments to Hong Kong Financial Reporting Standards effective April 1, 2024 (including classification of liabilities as current or non-current, non-current liabilities with covenants, etc.) had no material impact on the Group's results and financial position for the current and prior periods[10](index=10&type=chunk) - HKFRS 18 'Presentation and Disclosure in Financial Statements' is expected to have a significant impact on the presentation and disclosure of certain items in the consolidated financial statements, including classification and subtotals in the statement of profit or loss, aggregation/disaggregation and labelling of information, and disclosure of management-defined performance measures[12](index=12&type=chunk) [4. Segment Information](index=8&type=section&id=4.%20Segment%20Information) The Group's operating segments include motor vehicle distribution, non-motor vehicle distribution, and property management and others, with significant revenue declines in motor vehicle and non-motor vehicle distribution in FY2025, leading to worsened reportable segment results, and impairment losses recognized across multiple segments - The Group identifies three reportable operating segments: Motor Vehicle Distribution (Bentley, Lamborghini, Rolls-Royce), Non-Motor Vehicle Distribution (luxury watches, jewelry, fine wines, etc.), and Property Management and Others (property management, leasing, money lending, film-related businesses)[16](index=16&type=chunk) FY2025 Revenue and Results by Segment (HK$ thousand) | Segment | Revenue from External Customers | Reportable Segment Results | | :--- | :--- | :--- | | Motor Vehicle Distribution | 1,724,766 | (281,912) | | Non-Motor Vehicle Distribution | 276,186 | (65,396) | | Property Management and Others | 66,592 | (210,278) | | Total | 2,067,544 | (557,586) | - In FY2025, the Motor Vehicle Distribution segment recognized impairment of property, plant and equipment of **HK$328,542 thousand**, while the Property Management and Others segment recognized impairment of goodwill of **HK$29,318 thousand** and other intangible assets of **HK$120,126 thousand**[17](index=17&type=chunk) Reconciliation of Reportable Segment Results to Loss Before Income Tax (HK$ thousand) | Item | 2025 | 2024 | | :--- | :--- | :--- | | Reportable segment results | (557,586) | (407,980) | | Bank interest income | 656 | 929 | | Unallocated corporate other income, gains and losses | (41,410) | (29,885) | | Unallocated corporate expenses | (68,225) | (113,534) | | Finance costs | (65,234) | (81,385) | | Loss before income tax | (731,799) | (631,855) | [5. Revenue](index=11&type=section&id=5.%20Revenue) The Group's total revenue for FY2025 was HK$2,067,544 thousand, a significant decrease from HK$3,264,747 thousand in FY2024, with motor vehicle and other goods sales remaining the primary businesses, but motor vehicle sales revenue notably declined while after-sales service revenue slightly increased - The Group's principal businesses are the sale of motor vehicles and other goods, and the provision of motor vehicle-related after-sales services, with other businesses including property management, money lending, and property leasing services[23](index=23&type=chunk) Revenue Streams Breakdown (HK$ thousand) | Revenue Stream | 2025 | 2024 | | :--- | :--- | :--- | | Motor vehicle sales | 1,644,673 | 2,717,035 | | Other goods sales | 276,186 | 388,841 | | Provision of after-sales services | 80,093 | 78,136 | | Provision of property management services | 39 | 2,041 | | Interest income from money lending services | – | 8,702 | | Provision of property leasing services | 66,553 | 69,992 | | Total | 2,067,544 | 3,264,747 | - Motor vehicle sales revenue decreased by **39.5%** year-on-year in FY2025, which was the primary reason for the decline in total revenue[24](index=24&type=chunk)[25](index=25&type=chunk) [6. Other Income, Gains and Losses](index=12&type=section&id=6.%20Other%20Income,%20Gains%20and%20Losses) Other income, gains and losses for the year recorded a loss of HK$78,449 thousand, an increase from the HK$67,388 thousand loss in the prior year, primarily due to fair value changes in investment properties, investments in film and television programs, and revaluation losses on property, plant and equipment Other Income, Gains and Losses Breakdown (HK$ thousand) | Item | 2025 | 2024 | | :--- | :--- | :--- | | Bank interest income | 656 | 929 | | Fair value changes in investment properties | (35,357) | (70,879) | | Fair value changes in investments in film and television programs | (37,516) | (5,228) | | Revaluation loss on property, plant and equipment | (19,125) | (30,977) | | Income from advertising, exhibition and other services | 6,136 | 26,546 | | Total | (78,449) | (67,388) | - Fair value changes in investments in film and television programs significantly worsened from a loss of **HK$5,228 thousand** in 2024 to a loss of **HK$37,516 thousand** in 2025[26](index=26&type=chunk) - Government grants of **HK$339 thousand** were received in 2025, primarily for Beijing consumption stimulus subsidies, with no attached conditions[26](index=26&type=chunk) [7. Operating Loss](index=13&type=section&id=7.%20Operating%20Loss) The operating loss for the year was HK$666,565 thousand, an increase from HK$550,470 thousand in the prior year, primarily impacted by various impairment losses, including property, plant and equipment, other intangible assets, and goodwill, as well as increased inventory costs Key Components of Operating Loss (HK$ thousand) | Item | 2025 | 2024 | | :--- | :--- | :--- | | Inventory costs recognized as expense | 1,917,608 | 2,948,688 | | Depreciation of property, plant and equipment | 46,486 | 70,987 | | Employee benefit expenses | 57,745 | 88,745 | | Impairment of trade receivables | 2,300 | – | | Impairment of goodwill | 29,318 | 207,640 | | Impairment of other intangible assets | 120,126 | 40,548 | | Impairment of property, plant and equipment | 328,542 | 87,250 | - Impairment of property, plant and equipment significantly increased from **HK$87,250 thousand** in 2024 to **HK$328,542 thousand** in 2025[27](index=27&type=chunk) - Impairment of goodwill decreased from **HK$207,640 thousand** in 2024 to **HK$29,318 thousand** in 2025[27](index=27&type=chunk) [8. Finance Costs](index=13&type=section&id=8.%20Finance%20Costs) Finance costs for the year were HK$65,234 thousand, a decrease from HK$81,385 thousand in the prior year, primarily due to reduced interest on bank borrowings and other loans Finance Costs Breakdown (HK$ thousand) | Item | 2025 | 2024 | | :--- | :--- | :--- | | Interest on bank borrowings | 16,852 | 23,779 | | Interest on other loans | 28,466 | 35,406 | | Accrued interest on lease liabilities | 19,916 | 21,600 | | Accrued interest on convertible bonds | – | 600 | | Total | 65,234 | 81,385 | [9. Income Tax](index=14&type=section&id=9.%20Income%20Tax) The Group's income tax credit was HK$14,482 thousand, a decrease from HK$19,568 thousand in the prior year, with Hong Kong profits tax at 16.5%, a two-tiered tax rate for some subsidiaries, and Mainland China subsidiaries taxed at 25% - Hong Kong profits tax rate is **16.5%**, with a two-tiered tax rate of **8.25%** on the first **HK$2,000,000** of assessable profits for certain qualifying entities[28](index=28&type=chunk) - Mainland China subsidiaries are subject to income tax at a rate of **25%**[28](index=28&type=chunk) Income Tax Breakdown (HK$ thousand) | Item | 2025 | 2024 | | :--- | :--- | :--- | | Total tax for the year | 1,246 | 4,346 | | Deferred tax | (15,728) | (23,914) | | Income tax credit | (14,482) | (19,568) | [10. Loss Per Share](index=14&type=section&id=10.%20Loss%20Per%20Share) Basic and diluted loss per share attributable to owners of the Company was (13.7) HK cents, an improvement from (16.1) HK cents in the prior year, with basic and diluted loss per share being equal due to the anti-dilutive effect of potential dilutive ordinary shares Loss Per Share Calculation Data (HK$ thousand/share) | Item | 2025 | 2024 | | :--- | :--- | :--- | | Loss for calculation of basic loss per share | (718,179) | (613,424) | | Loss for calculation of diluted loss per share | (718,179) | (612,824) | | Weighted average number of ordinary shares | 525,989,633 | 379,959,236 | | Basic loss per share (HK cents) | (13.7) | (16.1) | | Diluted loss per share (HK cents) | (13.7) | (16.1) | - In FY2025, the Company had no outstanding potential ordinary shares, while share options and convertible bonds in FY2024 had an anti-dilutive effect on basic loss per share[32](index=32&type=chunk) [11. Property, Plant and Equipment / Investment Properties](index=15&type=section&id=11.%20Property,%20Plant%20and%20Equipment%20/%20Investment%20Properties) The carrying amount of property, plant and equipment significantly decreased this year, primarily due to impairment losses of HK$328,542 thousand recognized in motor vehicle distribution and revaluation losses from reclassification of land and buildings to investment properties, which also saw a decline in fair value - The Group reclassified certain land and buildings to investment properties due to a change in use to long-term leasing, recognizing a revaluation loss of **HK$19,125 thousand** (2024: **HK$30,977 thousand**)[34](index=34&type=chunk) - The cash-generating unit for motor vehicle distribution recognized an impairment loss of property, plant and equipment of **HK$328,542 thousand** due to a significant increase in segment losses and uncertain economic market conditions[35](index=35&type=chunk) - As of March 31, 2025, the recoverable amount of the motor vehicle distribution cash-generating unit was higher than its carrying amount, with no further impairment loss recognized, as the easing of model transition challenges is expected to improve market response and demand[36](index=36&type=chunk) - Fair value changes in investment properties resulted in a recognized loss of approximately **HK$35,357 thousand** (2024: **HK$70,879 thousand**), with all investment properties located in Mainland China[37](index=37&type=chunk) [12. Other Intangible Assets](index=16&type=section&id=12.%20Other%20Intangible%20Assets) Impairment losses on other intangible assets amounted to approximately HK$120,126 thousand this year, primarily from film rights due to significantly reduced expected returns from a change in distribution strategy, and property management contract customer lists affected by the sluggish Mainland China property market - Film rights recognized an impairment loss of approximately **HK$91,996 thousand** due to a significant reduction in expected returns as the distribution strategy shifted from theatrical release to online video platforms[39](index=39&type=chunk) - Property management contract customer lists recognized an impairment loss of **HK$28,130 thousand** due to a significant decline in revenue caused by the sluggish Mainland China property market[40](index=40&type=chunk) [13. Trade Receivables](index=17&type=section&id=13.%20Trade%20Receivables) Trade receivables primarily comprise rent and sales of goods and services, with the Group maintaining strict credit risk control and regularly reviewing overdue balances, totaling HK$32,013 thousand as of March 31, 2025, a slight increase from the prior year - Trade receivables primarily refer to rent receivable from tenants and accounts receivable from customers for sales of goods and provision of services[41](index=41&type=chunk) - The Group primarily requires prepayment or cash on delivery for retail customers, offers credit terms of up to three months for reputable customers, generally one to two months for wholesale customers, and two to three months for after-sales services to motor vehicle manufacturers[41](index=41&type=chunk) Ageing Analysis of Trade Receivables (HK$ thousand) | Ageing | 2025 | 2024 | | :--- | :--- | :--- | | 0 to 30 days | 25,630 | 21,833 | | 31 to 120 days | 2,676 | 2,919 | | 121 to 365 days | 556 | 4,919 | | Over 365 days | 3,151 | 1,929 | | Total | 32,013 | 31,600 | [14. Investments in Film and Television Programs](index=18&type=section&id=14.%20Investments%20in%20Film%20and%20Television%20Programs) The Group's investments in film and television programs significantly decreased from HK$42,846 thousand in 2024 to HK$2,258 thousand in 2025, with fair value determined using the income approach based on estimated distribution revenue and discounted cash flow method Investments in Film and Television Programs Breakdown (HK$ thousand) | Item | 2025 | 2024 | | :--- | :--- | :--- | | Investments in film, at fair value through profit or loss | 2,258 | 19,839 | | Investments in television programs, at fair value through profit or loss | – | 23,007 | | Total | 2,258 | 42,846 | - Fair value is revalued by independent professional qualified valuers using the income approach, determined based on estimated film distribution revenue using the discounted cash flow method[43](index=43&type=chunk) [15. Trade Payables](index=18&type=section&id=15.%20Trade%20Payables) As of March 31, 2025, the Group's total trade payables amounted to HK$3,816 thousand, a significant decrease from HK$20,947 thousand in the prior year Ageing Analysis of Trade Payables (HK$ thousand) | Ageing | 2025 | 2024 | | :--- | :--- | :--- | | 0 to 30 days | 3,515 | – | | 31 to 60 days | – | 16,023 | | 61 to 90 days | – | 1,891 | | Over 90 days | 301 | 3,033 | | Total | 3,816 | 20,947 | [16. Dividends](index=18&type=section&id=16.%20Dividends) The Company did not pay, declare, or propose any dividends for the years ended March 31, 2024, and 2025 - The Company neither paid, declared, nor proposed any dividends for both FY2024 and FY2025[45](index=45&type=chunk) [Management Discussion and Analysis](index=19&type=section&id=Management%20Discussion%20and%20Analysis) [Business Review](index=19&type=section&id=Business%20Review) [Motor Vehicle Distribution](index=19&type=section&id=Motor%20Vehicle%20Distribution) Motor vehicle distribution revenue significantly decreased by 38.3% to approximately HK$1,724.8 million, primarily due to declines in Bentley and Rolls-Royce sales, average selling prices, and gross margins, while Lamborghini sales slightly increased despite fewer units sold Motor Vehicle Distribution Revenue (HK$ thousand) | Brand | FY2025 | FY2024 | Change (%) | | :--- | :--- | :--- | :--- | | Bentley | 778,000 | 1,352,700 | (42.5%) | | Rolls-Royce | 568,800 | 1,073,500 | (47.0%) | | Lamborghini | 297,900 | 290,800 | 2.4% | | Total | 1,724,800 | 2,795,200 | (38.3%) | - Overall gross profit from motor vehicle sales decreased by approximately **78.1%**, primarily due to a decline in average selling prices and gross margins for Bentley and Rolls-Royce[46](index=46&type=chunk) - After-sales service revenue increased by approximately **2.5%**, but the gross profit margin decreased from **30.2%** to **25.3%**[47](index=47&type=chunk) [Non-Motor Vehicle Distribution](index=19&type=section&id=Non-Motor%20Vehicle%20Distribution) The non-motor vehicle distribution segment's revenue decreased by 29.0% to approximately HK$276.2 million, with the gross profit margin falling from 9.3% to 6.4%, mainly due to the recognition of approximately HK$52.3 million in inventory impairment, while Bang & Olufsen performed best among brands - Revenue from the non-motor vehicle distribution segment decreased by approximately **29.0%** from approximately **HK$388,800 thousand** to approximately **HK$276,200 thousand**[48](index=48&type=chunk) - Gross profit margin decreased from **9.3%** to **6.4%**, primarily due to the recognition of approximately **HK$52,300 thousand** in inventory impairment within cost of sales[48](index=48&type=chunk) - Bang & Olufsen performed best among brands including watches, jewelry, fine wines, and audio equipment[49](index=49&type=chunk) [Others](index=20&type=section&id=Others) Revenue from the "Others" segment significantly decreased by 17.5% to approximately HK$66.6 million, mainly due to the suspension of money lending business and no new loans issued, reduced property management service revenue, and film investment business generating no revenue while facing ongoing legal disputes - Revenue from the Others segment decreased by approximately **17.5%** from approximately **HK$80,700 thousand** to approximately **HK$66,600 thousand**, primarily due to the suspension of money lending business[50](index=50&type=chunk) - Property management business revenue decreased by approximately **7.6%** to approximately **HK$66,600 thousand** due to the cancellation of leases with certain tenants[50](index=50&type=chunk) - The investments in film and television programs business generated no revenue during the current financial year, and legal proceedings against the film producers are ongoing[50](index=50&type=chunk) [Equity Investments](index=20&type=section&id=Equity%20Investments) The Group holds shares in Bang & Olufsen A/S (B&O) as a long-term investment, with its carrying amount significantly increasing due to share price appreciation and share acquisitions, and further increasing its stake post-reporting period, while its investment in New Idea Group Limited has been fully disposed of - The Group holds B&O shares as a long-term investment, holding **13,450,000 shares** as of March 31, 2025, representing approximately **9.13%** of the issued shares[52](index=52&type=chunk) - The carrying amount of the B&O investment increased by approximately **57.8%** from approximately **HK$132,500 thousand** to approximately **HK$209,200 thousand**, primarily due to share price appreciation and acquisition of shares[52](index=52&type=chunk) - Subsequent to the reporting period, the Group further acquired **2,164,140 B&O shares**, increasing its total holding to **15,614,140 shares**, representing approximately **10.60%** of the issued shares[53](index=53&type=chunk) - The B&O investment generated no dividends in the current financial year, and the shareholding in New Idea Group Limited has decreased from **2,670,000 shares** to zero shares[54](index=54&type=chunk)[55](index=55&type=chunk) [Prospects](index=21&type=section&id=Prospects) Facing an operating loss in the current financial year, the Group's new management will prudently manage finances and remains confident in maintaining its leading position in China's luxury goods market despite ongoing challenges - The Group's new management will prudently manage its financial affairs in the next financial year to address the operating loss incurred in the current financial year[56](index=56&type=chunk) - Despite the challenges, management remains confident in maintaining the Group's leading position in China's luxury goods market[56](index=56&type=chunk) [Financial Review](index=22&type=section&id=Financial%20Review) [Revenue](index=22&type=section&id=Revenue) The Group's FY2025 revenue was approximately HK$2,067.5 million, a 36.7% decrease from the prior year, primarily due to weakened market conditions and intense competition in the motor vehicle business leading to reduced sales - Revenue for FY2025 was approximately **HK$2,067,500 thousand**, representing a decrease of approximately **36.7%** compared to FY2024[57](index=57&type=chunk) - The decrease in revenue was primarily attributable to weak market conditions and intense competition in the motor vehicle business, leading to a decline in motor vehicle sales[57](index=57&type=chunk) Revenue Streams and Changes (HK$ thousand) | Revenue Stream | FY2025 | FY2024 | Change (%) | | :--- | :--- | :--- | :--- | | Motor vehicle sales | 1,644,673 | 2,717,035 | (39.5%) | | Provision of after-sales services | 80,093 | 78,136 | 2.5% | | Non-motor vehicle distribution segment | 276,186 | 388,841 | (29.0%) | | Others | 66,592 | 80,735 | (17.5%) | | Total | 2,067,544 | 3,264,747 | (36.7%) | [Gross Profit and Gross Profit Margin](index=22&type=section&id=Gross%20Profit%20and%20Gross%20Profit%20Margin) The Group's FY2025 gross profit decreased by 54.0% to approximately HK$141.0 million, with the gross profit margin falling from 9.4% to 6.8%, primarily due to a decline in motor vehicle sales gross profit margin caused by weak market conditions and intense competition - Gross profit decreased by approximately **54.0%** to approximately **HK$141,000 thousand** (2024: approximately **HK$306,300 thousand**)[58](index=58&type=chunk) - Gross profit margin decreased from **9.4%** to **6.8%**[58](index=58&type=chunk) - The decline in gross profit was primarily due to a decrease in the gross profit margin of motor vehicle sales caused by weak market conditions and intense competition[58](index=58&type=chunk) [Other Income, Gains and Losses](index=22&type=section&id=Other%20Income,%20Gains%20and%20Losses) Other income, gains and losses for the year recorded a loss of approximately HK$78.4 million, an increase from the prior year's loss of approximately HK$67.4 million, primarily stemming from fair value changes in investment properties, investments in film and television programs, and revaluation losses on property, plant and equipment - Other income, gains and losses recorded a loss of approximately **HK$78,400 thousand** (2024: loss of approximately **HK$67,400 thousand**)[59](index=59&type=chunk) - Primarily stemmed from fair value changes in investment properties, investments in film and television programs, and revaluation losses on property, plant and equipment[59](index=59&type=chunk) [Impairment of Goodwill and Property, Plant and Equipment](index=23&type=section&id=Impairment%20of%20Goodwill%20and%20Property,%20Plant%20and%20Equipment) Impairment losses for the year included approximately HK$29.3 million for goodwill, mainly from property management services, and approximately HK$328.5 million for property, plant and equipment, primarily from motor vehicle distribution, with management assessing cash-generating units and recognizing impairment based on recoverable amounts - Impairment loss on goodwill was approximately **HK$29,300 thousand**, mainly attributable to property management services (2024: **HK$207,600 thousand**, of which **HK$200,200 thousand** was attributable to motor vehicle distribution)[60](index=60&type=chunk) - Impairment loss on property, plant and equipment was approximately **HK$328,500 thousand** (2024: **HK$87,300 thousand**)[60](index=60&type=chunk) - The motor vehicle business cash-generating unit recognized an impairment loss of property, plant and equipment of **HK$328,542 thousand** due to a significant increase in segment losses and uncertain economic market conditions[62](index=62&type=chunk)[63](index=63&type=chunk) - As of March 31, 2025, the property management services cash-generating unit's recoverable amount was higher than its carrying amount due to increased leased area and improved property rental income streams, with no further impairment recognized[61](index=61&type=chunk) [Impairment of Other Intangible Assets](index=24&type=section&id=Impairment%20of%20Other%20Intangible%20Assets) Impairment losses on other intangible assets amounted to approximately HK$120.1 million this year, comprising HK$92.0 million for film rights and HK$28.1 million for property management contract customer lists - Impairment loss on other intangible assets was approximately **HK$120,100 thousand**, of which **HK$92,000 thousand** was for film rights impairment and **HK$28,100 thousand** for property management contract customer lists impairment[64](index=64&type=chunk) - Film rights impairment was primarily due to a significant reduction in expected returns as the distribution strategy shifted from theatrical release to online video platforms[65](index=65&type=chunk) - Property management contract customer lists impairment was due to a significant decrease in revenue caused by the sluggish Mainland China property market[66](index=66&type=chunk) [Selling and Distribution Costs](index=25&type=section&id=Selling%20and%20Distribution%20Costs) Selling and distribution costs decreased by 47.6% to approximately HK$178.0 million, primarily due to reduced marketing and promotion expenses - Selling and distribution costs decreased by approximately **47.6%** from approximately **HK$339,400 thousand** to approximately **HK$178,000 thousand**[67](index=67&type=chunk) - Primarily stemmed from a reduction in marketing and promotion expenses[67](index=67&type=chunk) [Administrative Expenses](index=25&type=section&id=Administrative%20Expenses) Administrative expenses decreased by 33.1% to approximately HK$70.8 million, primarily due to reduced legal and professional fees for litigation and the absence of share-based payments - Administrative expenses decreased by approximately **33.1%** from approximately **HK$105,900 thousand** to approximately **HK$70,800 thousand**[68](index=68&type=chunk) - Primarily due to a reduction in legal and professional fees for litigation and the absence of share-based payments[68](index=68&type=chunk) [Finance Costs](index=25&type=section&id=Finance%20Costs) Finance costs decreased by 19.8% to approximately HK$65.2 million, primarily due to reduced borrowings for motor vehicle inventory purchases and partial repayment of bank loans - Finance costs decreased by approximately **19.8%** from approximately **HK$81,400 thousand** to approximately **HK$65,200 thousand**[69](index=69&type=chunk) - Resulted from a decrease in borrowings for motor vehicle inventory purchases and the Group's repayment of certain bank loans during the current financial year[69](index=69&type=chunk) [Liquidity and Financial Resources](index=25&type=section&id=Liquidity%20and%20Financial%20Resources) [Cash Flow](index=25&type=section&id=Cash%20Flow) As of March 31, 2025, the Group's bank and cash on hand amounted to approximately HK$105.5 million, an increase from the prior year, primarily used for loan repayments, inventory purchases, and working capital, with changes mainly attributable to foreign currency translation differences - Bank and cash on hand amounted to approximately **HK$105,500 thousand** (2024: approximately **HK$93,600 thousand**), primarily denominated in HKD, RMB, and DKK[71](index=71&type=chunk) - The Directors believe that the Group possesses sufficient working capital and financial resources to meet its current business needs and future business expansion[71](index=71&type=chunk) [Property, Plant and Equipment](index=25&type=section&id=Property,%20Plant%20and%20Equipment) The Group's carrying amount of property, plant and equipment was approximately HK$526.0 million, a significant decrease from the prior year, with new acquisitions during the year offset by disposals, changes in use, and revaluation losses - Property, plant and equipment amounted to approximately **HK$526,000 thousand** (2024: approximately **HK$949,600 thousand**)[72](index=72&type=chunk) - Acquisition costs totaled approximately **HK$9,800 thousand** during the year, with net book value of disposals at approximately **HK$13,600 thousand**, and revaluation losses of approximately **HK$19,100 thousand** arising from changes in use[72](index=72&type=chunk)[73](index=73&type=chunk) [Investment Properties](index=26&type=section&id=Investment%20Properties) The Group's investment properties amounted to approximately HK$323.2 million, a decrease from the prior year, primarily due to a decline in fair value and the reclassification of owner-occupied properties to investment properties - Investment properties amounted to approximately **HK$323,200 thousand** (2024: approximately **HK$346,700 thousand**)[74](index=74&type=chunk) - The change in value was primarily due to a decrease in fair value and the reclassification of one owner-occupied property to an investment property[74](index=74&type=chunk) [Goodwill](index=26&type=section&id=Goodwill) The Group's goodwill amounted to approximately HK$53.9 million, a decrease from the prior year, primarily due to impairment of goodwill related to property management services during the current financial year - Goodwill amounted to approximately **HK$53,900 thousand** (2024: approximately **HK$84,700 thousand**)[75](index=75&type=chunk) - The decrease in goodwill was primarily due to the impairment of goodwill related to property management services incurred during the current financial year[75](index=75&type=chunk) [Borrowings](index=26&type=section&id=Borrowings) The Group's borrowings amounted to approximately HK$526.8 million, a 27.6% decrease from the prior year, primarily denominated in RMB, with the reduction attributed to loan repayments - Borrowings amounted to approximately **HK$526,800 thousand**, representing a decrease of approximately **27.6%** compared to 2024 (2024: approximately **HK$727,300 thousand**)[76](index=76&type=chunk) - Borrowings were primarily denominated in RMB, and the decrease was mainly due to loan repayments during the current financial year[77](index=77&type=chunk) [Gearing Ratio](index=26&type=section&id=Gearing%20Ratio) The Group's gearing ratio (total borrowings divided by total equity) increased to approximately 54.3%, up from 45.7% in the prior year - The gearing ratio increased to approximately **54.3%** (2024: approximately **45.7%**)[78](index=78&type=chunk) [Inventories](index=26&type=section&id=Inventories) The Group's inventories decreased by 31.4% to approximately HK$556.9 million, primarily due to a reduction in motor vehicle inventories, while the average inventory turnover days increased from 126 to 132 days - Inventories decreased by approximately **31.4%** from approximately **HK$811,600 thousand** to approximately **HK$556,900 thousand**[79](index=79&type=chunk) - Primarily due to a decrease in motor vehicle inventories, which accounted for approximately **67.6%** of the Group's total inventories[79](index=79&type=chunk) - Average inventory turnover days increased from **126 days** to **132 days**[79](index=79&type=chunk) [Foreign Exchange Risk](index=26&type=section&id=Foreign%20Exchange%20Risk) The Group's revenue and expenses are primarily denominated in RMB and HKD, while production costs, purchases, and investments are denominated in RMB, HKD, DKK, and USD, with no foreign currency forward contracts entered into or unrealized gains or losses recorded during the current financial year - The Group's revenue and expenses are primarily denominated in RMB and HKD, while production costs, purchases, and investments are denominated in RMB, HKD, DKK, and USD[80](index=80&type=chunk) - No foreign currency forward contracts were entered into, nor were any related unrealized gains or losses recorded during the current financial year[80](index=80&type=chunk) [Contingent Liabilities and Capital Commitments](index=27&type=section&id=Contingent%20Liabilities%20and%20Capital%20Commitments) As of March 31, 2025, the Board believes the Group has no significant contingent liabilities or material capital commitments related to the acquisition of property, plant and equipment - As of March 31, 2025, the Group had no significant contingent liabilities[81](index=81&type=chunk) - As of March 31, 2025, the Group had no material capital commitments related to the acquisition of property, plant and equipment[81](index=81&type=chunk) [Pledge of Assets](index=27&type=section&id=Pledge%20of%20Assets) As of March 31, 2025, the Group had pledged land and buildings, right-of-use assets, investment properties, pledged deposits, and inventories to secure general banking facilities and other financing - The Group has pledged land and buildings (approximately **HK$475,300 thousand**), right-of-use assets (approximately **HK$419,200 thousand**), investment properties (approximately **HK$84,800 thousand**), pledged deposits (approximately **HK$31,200 thousand**), and inventories (approximately **HK$339,500 thousand**) to obtain financing[82](index=82&type=chunk) [Human Resources](index=27&type=section&id=Human%20Resources) As of March 31, 2025, the Group had 319 employees, with staff costs of approximately HK$57.7 million, and provides various benefits and training, with annual compensation reviews - As of March 31, 2025, the Group had **319 employees** (2024: **396 employees**)[83](index=83&type=chunk) - Staff costs for the current financial year (including directors' emoluments and one-off equity-settled share option expenses) amounted to approximately **HK$57,700 thousand** (2024: approximately **HK$88,700 thousand**)[83](index=83&type=chunk) - The Group provides employees with benefits such as basic salaries, commissions, discretionary bonuses, medical insurance, retirement funds, and equity-settled share-based payments, and offers training[83](index=83&type=chunk)[85](index=85&type=chunk) [Use of Proceeds from Subscription of New Shares under General Mandate](index=27&type=section&id=Use%20of%20Proceeds%20from%20Subscription%20of%20New%20Shares%20under%20General%20Mandate) The Company completed the allotment and issuance of 74,879,418 new ordinary shares in July 2024, raising net proceeds of approximately HK$46.4 million, which were planned for litigation expenses, potential investments, and general working capital, with most funds utilized as of March 31, 2025 - In July 2024, the Company allotted and issued **74,879,418 new ordinary shares** to Mr. Yang Yun and Mr. Li Zhancheng, with net proceeds of approximately **HK$46,400 thousand**[86](index=86&type=chunk) Planned Use and Utilization of Net Proceeds (HK$ million) | Planned Use | Disclosed Amount | Utilized during the year ended March 31, 2025 | Unutilized as at March 31, 2025 | | :--- | :--- | :--- | :--- | | Litigation expenses incurred | 8.0 | 8.0 | – | | Possible investments | 25.4 | 12.8 | 12.6 | | General working capital | 13.0 | 13.0 | – | | Total | 46.4 | 33.8 | 12.6 | [Litigation Update](index=28&type=section&id=Litigation%20Update) [Winding-up Petition and Appointment and Discharge of Joint Provisional Liquidators](index=28&type=section&id=Winding-up%20Petition%20and%20Appointment%20and%20Discharge%20of%20Joint%20Provisional%20Liquidators) The Company successfully withdrew a winding-up petition filed by former directors and discharged joint provisional liquidators, but the Bermuda Court ruled the Company must pay approximately US$1.4 million in fees to the liquidators, which the Company has appealed - The Company successfully withdrew the winding-up petition filed by former directors and discharged the appointment of joint provisional liquidators[88](index=88&type=chunk) - The Bermuda Court ruled that the Company should pay the joint provisional liquidators approximately **US$1,400,000** in remuneration, fees, costs, and expenses, for which the Company has applied for leave to appeal[89](index=89&type=chunk) [Indemnity Claims Against Former Directors](index=29&type=section&id=Indemnity%20Claims%20Against%20Former%20Directors) The Company initiated indemnity claims against certain former directors for all costs and losses incurred from the Bermuda litigation and provisional liquidator appointment, with the High Court ruling that Mr. Zheng Haojiang, Mr. Zhu Lei, and Ms. Cheng Bin must indemnify the Company on an indemnity basis - The Company has taken legal action for indemnity claims against certain former directors, seeking compensation for all costs and losses incurred from the Bermuda litigation and the appointment of provisional liquidators[90](index=90&type=chunk) - The High Court has ruled that Mr. Zheng Haojiang, Mr. Zhu Lei, and Ms. Cheng Bin must indemnify the Company for related costs and losses on an indemnity basis[90](index=90&type=chunk) [Injunction Against Its Largest Shareholder and Shenwan](index=29&type=section&id=Injunction%20Against%20Its%20Largest%20Shareholder%20and%20Shenwan) The Company's injunction claims against its largest shareholder, Mr. Shi Qingliu, and Shenwan Hongyuan Financing (Hong Kong) Limited have been terminated, with the Company paying HK$6,162,303.8 and HK$400,000 respectively as full and final settlement amounts - The Company's injunction claims against its major shareholder, Mr. Shi Qingliu, and Shenwan Hongyuan Financing (Hong Kong) Limited have been terminated[91](index=91&type=chunk) - The Company has paid Mr. Shi and Shenwan **HK$6,162,303.8** and **HK$400,000** respectively as full and final settlement amounts[91](index=91&type=chunk) [Borrower's Breach of Loan Agreements](index=30&type=section&id=Borrower's%20Breach%20of%20Loan%20Agreements) Both borrowers under the Group's two loan agreements have defaulted; for the HK$58 million loan to the first borrower, the Group obtained a court judgment and is pursuing enforcement actions, and for the HK$32 million loan to the second borrower, a judgment and bankruptcy order were obtained, with recovery efforts underway - The first borrower failed to repay the **HK$58,000 thousand** loan and accrued interest, and the Group obtained a judgment in its favor from the High Court of Hong Kong and is considering enforcement legal actions[92](index=92&type=chunk)[93](index=93&type=chunk)[95](index=95&type=chunk) - The second borrower failed to repay the **HK$32,000 thousand** loan and accrued interest, and the Group obtained a judgment and a bankruptcy order against the second borrower on February 6, 2024[96](index=96&type=chunk)[97](index=97&type=chunk) [Dividends](index=32&type=section&id=Dividends) The Board does not recommend a final dividend for the year ended March 31, 2025, and no interim dividends were distributed during the year, aiming to retain funds for operating and developing existing businesses - The Directors do not recommend the payment of a final dividend for the year ended March 31, 2025, and no interim dividends were distributed during the year[98](index=98&type=chunk) - This action aims to retain more funds for operating and developing existing businesses[98](index=98&type=chunk) [Corporate Governance Practices](index=32&type=section&id=Corporate%20Governance%20Practices) The Group is committed to maintaining high corporate governance standards and complied with applicable code provisions of the Corporate Governance Code in Appendix C1 of the Listing Rules for the financial year, except for the temporary dual role of Chairman and Chief Executive, which the Board deemed not to impede the balance of power - The Company has complied with the applicable code provisions of the Corporate Governance Code as set out in Appendix C1 of the Listing Rules throughout the year ended March 31, 2025[99](index=99&type=chunk) - Until April 23, 2024, the roles of Chairman and Chief Executive Officer were combined and held by Mr. Zheng Haojiang, deviating from code provision C.2.1, but the Board believed this arrangement facilitated consistent leadership and that internal controls were sufficient to balance the functions[99](index=99&type=chunk) [Change of Directors](index=32&type=section&id=Change%20of%20Directors) Effective June 12, 2025, Mr. Li Yunjiu was appointed as an independent non-executive director, while several executive, non-executive, and independent non-executive directors resigned, and Mr. Ju Qinghao was appointed as authorized representative under the Listing Rules and Companies Ordinance, and a member of the Remuneration Committee - Mr. Li Yunjiu was appointed as an independent non-executive director, a member of the Audit Committee and the Nomination Committee, effective June 12, 2025[100](index=100&type=chunk) - Mr. Qiu Peiyuan resigned as an executive director, Mr. Shi Jiahao, Mr. Wu Peng, Mr. Li Qingsong, and Mr. You Yiyang resigned as non-executive directors, and Mr. Liao Kenan and Mr. Wu Weixiong resigned as independent non-executive directors[100](index=100&type=chunk)[101](index=101&type=chunk) - Executive Director Mr. Ju Qinghao was appointed as the Company's authorized representative under the Listing Rules and the Companies Ordinance, and a member of the Remuneration Committee[101](index=101&type=chunk) [Change of Hong Kong Share Registrar](index=33&type=section&id=Change%20of%20Hong%20Kong%20Share%20Registrar) Effective November 15, 2024, the Company's Hong Kong share registrar was changed to Tricor Investor Services Limited - Effective November 15, 2024, the Company's Hong Kong share registrar was changed to Tricor Investor Services Limited[102](index=102&type=chunk) [Change of Principal Share Registrar in Bermuda](index=33&type=section&id=Change%20of%20Principal%20Share%20Registrar%20in%20Bermuda) Effective January 1, 2025, the Company's principal share registrar in Bermuda was changed to Appleby Global Corporate Services (Bermuda) Limited - Effective January 1, 2025, the Company's principal share registrar in Bermuda was changed to Appleby Global Corporate Services (Bermuda) Limited[102](index=102&type=chunk) [Share Option Scheme](index=33&type=section&id=Share%20Option%20Scheme) The Company's share option scheme was adopted in September 2022 for a ten-year term, with no share options granted, exercised, lapsed, or cancelled during the year ended March 31, 2025, and 199,709 share options available for further grants - The Share Option Scheme was adopted on September 29, 2022, with a validity period of ten years[102](index=102&type=chunk) - During the year ended March 31, 2025, no share options were granted, exercised, lapsed, or cancelled under the Share Option Scheme[103](index=103&type=chunk) - As of March 31, 2025, **199,709 shares** were available for further grants, representing approximately **0.05%** of the weighted average number of issued shares during the period[104](index=104&type=chunk) [Audit Committee and Review of Financial Statements](index=34&type=section&id=Audit%20Committee%20and%20Review%20of%20Financial%20Statements) The Audit Committee, comprising three independent non-executive directors, is responsible for reviewing and overseeing financial reporting and internal controls, and has reviewed the audited consolidated financial statements and annual results announcement for the year, deeming them compliant with applicable accounting standards and requirements - The Audit Committee comprises three independent non-executive directors: Mr. Chan Man Kit (Chairman), Ms. Wong Fai, and Mr. Li Yunjiu[105](index=105&type=chunk) - The Audit Committee has reviewed the Company's audited consolidated financial statements and annual results announcement for the year ended March 31, 2025, and considers them to be in compliance with applicable accounting standards, requirements, and the Listing Rules[105](index=105&type=chunk) [Scope of Work by BDO Limited in Relation to this Preliminary Announcement](index=35&type=section&id=Scope%20of%20Work%20by%20BDO%20Limited%20in%20Relation%20to%20this%20Preliminary%20Announcement) The Company's auditor, BDO Limited, has reconciled the financial figures in this announcement with the audited consolidated financial statements, but their work does not constitute an assurance engagement, and thus no assurance opinion has been expressed - The auditor, BDO Limited, has reconciled the financial figures contained in this announcement with the audited consolidated financial statements[106](index=106&type=chunk) - Their work does not constitute an assurance engagement, and therefore no assurance opinion has been expressed on this announcement[106](index=106&type=chunk) [Purchase, Sale or Redemption of the Company's Listed Securities](index=35&type=section&id=Purchase,%20Sale%20or%20Redemption%20of%20the%20Company's%20Listed%20Securities) During the year ended March 31, 2025, neither the Company nor any of its subsidiaries purchased, sold, or redeemed any of the Company's listed securities, and the Company held no treasury shares - Neither the Company nor any of its subsidiaries purchased, sold, or redeemed any of the Company's listed securities during the current financial year[107](index=107&type=chunk) - As of March 31, 2025, the Company held no treasury shares[107](index=107&type=chunk) [Standard Code for Securities Transactions](index=35&type=section&id=Standard%20Code%20for%20Securities%20Transactions) The Company has adopted the Standard Code for Securities Transactions as set out in Appendix C3 of the Listing Rules to regulate directors' securities dealings and as a guideline for relevant employees, with all directors confirming compliance and no non-compliance by relevant employees identified - The Company has adopted the Standard Code for Securities Transactions as set out in Appendix C3 of the Listing Rules to regulate directors' securities dealings[108](index=108&type=chunk) - All Directors confirmed compliance with the Standard Code throughout the year ended March 31, 2025, and up to the date of this announcement[108](index=108&type=chunk) [Post Balance Sheet Events](index=35&type=section&id=Post%20Balance%20Sheet%20Events) Subsequent to the reporting period, the Company allotted and issued 93,800,301 new shares in May 2025 under a general mandate, raising net proceeds of approximately HK$36.8 million, with no other significant events materially affecting the Group occurring thereafter - On May 19, 2025, the Company allotted and issued **93,800,301 subscription shares** under a general mandate, with net proceeds of approximately **HK$36,800 thousand**[109](index=109&type=chunk) - Subsequent to this event and as of the date of this announcement, the total number of issued shares was **562,801,809 shares**[109](index=109&type=chunk) - Save as disclosed, no other significant events materially affecting the Group occurred subsequent to the reporting period and up to the date of this announcement[110](index=110&type=chunk) [Publication of Annual Results and Board Information](index=36&type=section&id=Publication%20of%20Annual%20Results%20and%20Board%20Information) This announcement has been published on the HKEX and Company websites, with the annual report to be dispatched to shareholders in due course, and the Board currently comprises one executive and three independent non-executive directors - This announcement has been published on the HKEX website (www.hkexnews.hk) and the Company's website (www.hk970.com)[111](index=111&type=chunk) - The Company's annual report for the year ended March 31, 2025, containing all information required by the Listing Rules, will be dispatched to the Company's shareholders in due course[111](index=111&type=chunk) - As of the date of this announcement, the Company has one executive director (Mr. Ju Qinghao) and three independent non-executive directors (Mr. Chan Man Kit, Ms. Wong Fai, and Mr. Li Yunjiu)[113](index=113&type=chunk)

Financial Performance - Revenue for the six months ended September 30, 2024, decreased by approximately 39.7% from HK$1,733,707,000 to HK$1,046,126,000 compared to the same period last year[85]. - Gross profit for the same period decreased from HK$214,033,000 to HK$112,417,000[85]. - Other income, gains, and losses for the six months ended September 30, 2024, were losses of HK$39,920,000, compared to losses of HK$11,376,000 in 2023[85]. - Loss attributable to owners of the Company for the six months ended September 30, 2024, was HK$562,895,000, compared to a loss of HK$51,747,000 in the same period of 2023[85]. - Loss per share attributable to owners of the Company was HK134.2 cents for the six months ended September 30, 2024, compared to HK15.0 cents in the last financial period[85]. - The gross profit margin for the interim period was 10.7%, down from 12.3% in the previous interim period[114]. - The gross profit margin for the automotive business sector is estimated to be between 6% and 12% for the six months ended September 30, 2024, reflecting a significant decrease compared to historical margins[148]. - The gross profit from automobile sales decreased by approximately HK$74.4 million during the financial period under review, primarily due to weak market sentiment and increased competition[174]. Borrowings and Financial Position - As of September 30, 2024, the total bank loans amounted to HK$263,333,000, a decrease from HK$297,527,000 as of March 31, 2024[3]. - Other loans increased to HK$466,173,000 from HK$429,724,000, resulting in a total borrowing of HK$729,506,000, slightly up from HK$727,251,000[3]. - The Group's borrowings as at 30 September 2024 were approximately HK$729.5 million, representing an increase of approximately 0.3% from approximately HK$727.3 million as at 31 March 2024[193]. - The Group's gearing ratio decreased to approximately 67.1% as at 30 September 2024, down from approximately 45.7% as at 31 March 2024[194]. - The current ratio for the interim period was 1.18, slightly down from 1.21 in the previous period[114]. Impairment and Asset Valuation - The cash impairment charge for the automotive distribution segment amounted to HKD 328,542,000 due to significant performance decline and uncertain economic market conditions[55]. - Impairment loss recognized on property, plant, and equipment amounted to approximately HK$328,542,000, while impairment loss on other intangible assets was approximately HK$89,877,000[85]. - The recoverable amount as of 30 September 2024 was assessed to be approximately HK$1,019.6 million, which is lower than the carrying amount of approximately HK$1,348.1 million[181]. - Impairment losses on goodwill for property management services were approximately HK$29.3 million for the period ended 30 September 2024, up from approximately HK$7.4 million for the same period last year[174]. - The recoverable amount of properties, machinery, and equipment in automotive distribution was HKD 1,019,558,000, based on a valuation by an independent professional valuation firm[55]. Corporate Governance and Compliance - The company has complied with the applicable code provisions set out in the Corporate Governance Code throughout the six months ended 30 September 2024, except for a deviation from code provision C.2.1 until 23 April 2024[27]. - The company maintains a high standard of corporate governance, with the Board reviewing practices to ensure compliance with legal and statutory requirements[27]. - The company has sufficient internal controls to provide checks and balances on the functions of the Chairman and the Chief Executive Officer[27]. - The company has adopted the Model Code as guidelines for relevant employees regarding their dealings in securities, with no incidents of non-compliance noted during the reporting period[27]. Market Conditions and Economic Outlook - The global economic growth rate is forecasted to be stable at 3.2% for both 2024 and 2025 according to the International Monetary Fund[90]. - Chinese luxury consumers are expected to spend RMB572 billion on luxury goods in 2024, a 4% increase from the previous year[91]. - The luxury goods market in China is showing signs of recovery, particularly driven by high-net-worth individuals, indicating significant market potential[121]. - The group expects the business environment in the second half of the financial year to remain challenging, although recent stimulus measures from the Mainland China government may have a positive impact[137]. Share Capital and Securities - The company issued a total of 74,879,418 new ordinary shares at a price of HK$0.64 per share, raising approximately HK$2,396,141[6]. - The total number of issued shares as of September 30, 2024, was 469,001,508 shares, which was used for calculating approximate percentages[24]. - The company did not purchase, sell, or redeem any of its listed securities during the six months ended 30 September 2024[47]. - There were no dividends declared or proposed for the six months ended 30 September 2024, and no dividends have been recommended since the reporting period[53]. Revenue Breakdown by Segment - The automobile segment sales decreased by approximately 43.9% to HK$819.9 million, contributing 78.4% to total revenue, down from 84.3% in the previous year[141]. - The non-automobile dealership segment recorded a revenue of approximately HK$146.2 million, representing a decrease of about 24.6% compared to HK$193.9 million in the prior year[128]. - Revenue from the property management services and money lending business increased by approximately 5.1% to approximately HK$37.2 million compared to HK$35.4 million in the previous financial period[101]. - Revenue from after-sales services increased slightly by approximately 0.7% to HK$42.8 million, but the gross profit margin decreased from approximately 33.3% to approximately 23.7%[159]. - The group did not generate any revenue from its films and television program investment business during the review period, with ongoing legal actions to recover the investment principal[130].

Financial Performance - Revenue for the six months ended September 30, 2024, was HKD 1,046,126 thousand, a decrease of 39.5% compared to HKD 1,733,707 thousand in the same period of 2023[3] - Gross profit for the same period was HKD 112,417 thousand, down 47.5% from HKD 214,033 thousand year-on-year[3] - Operating loss increased significantly to HKD 542,494 thousand from HKD 8,901 thousand in the previous year, indicating a substantial decline in operational performance[3] - The net loss for the period was HKD 562,270 thousand, compared to a loss of HKD 50,620 thousand in the prior year, reflecting a significant deterioration in financial results[5] - Total comprehensive income for the period was HKD (552,549) thousand, compared to HKD (175,827) thousand in the same period last year[5] - Basic and diluted loss per share for the period was HKD (134.2) cents, compared to HKD (15.0) cents in the previous year, indicating a significant increase in losses per share[5] - The reported segment performance showed a loss of HKD 494,101,000 for the six months ended September 30, 2024, compared to a profit of HKD 43,955,000 for the same period in 2023[33] - The automotive division's sales revenue decreased by approximately HKD 641,908,000, representing a decline of 43.9% year-over-year, contributing 78.4% of total revenue[101] - Other income, losses, and gains recorded a net loss of approximately HKD 39,900,000, compared to a net loss of about HKD 11,400,000 in the previous year[104] Assets and Liabilities - Non-current assets decreased to HKD 1,145,884 thousand as of September 30, 2024, down from HKD 1,349,530 thousand as of March 31, 2024[7] - Current assets also declined to HKD 1,146,866 thousand from HKD 1,649,415 thousand, indicating a reduction in liquidity[7] - The company's total liabilities increased to HKD 1,003,997 thousand from HKD 991,977 thousand, reflecting a slight rise in financial obligations[8] - The total reportable segment assets as of September 30, 2024, amounted to HKD 1,949,598,000, a decrease from HKD 2,495,866,000 as of March 31, 2024[35] - The total liabilities as of September 30, 2024, were HKD 1,245,585,000, compared to HKD 1,261,218,000 as of March 31, 2024, indicating a slight reduction in liabilities[35] - The company’s total assets as of September 30, 2024, were HKD 2,332,478,000, a decrease from HKD 2,852,738,000 as of March 31, 2024[35] Segment Performance - The automotive distribution segment generated revenue of HKD 862,699,000 for the six months ended September 30, 2024, down from HKD 1,504,350,000 in the same period of 2023, reflecting a decline of 42.5%[33] - The non-automotive distribution segment reported revenue of HKD 146,247,000 for the six months ended September 30, 2024, compared to HKD 193,920,000 for the same period in 2023, a decrease of 24.6%[33] - The property management and other segment reported a revenue of HKD 37,180,000 for the six months ended September 30, 2024, down from HKD 35,437,000 in the same period of 2023, indicating a slight increase of 4.9%[33] Impairment and Valuation - A significant impairment charge of HKD 328,542,000 was recognized for the automotive distribution cash-generating unit due to a substantial decline in segment performance and uncertain economic conditions[53] - The recoverable amount of automotive distribution's property, plant, and equipment as of September 30, 2024, was HKD 1,019,558,000, determined using the value-in-use method[53] - The carrying amount of goodwill as of September 30, 2024, was HKD 55,680,000, down from HKD 84,708,000, with an impairment loss of approximately HKD 29,318,000 recognized during the period[63] - The recoverable amount of the property management services cash-generating unit was HKD 225,397,000, which is below its carrying amount of HKD 255,367,000, leading to an impairment allocation[65] - The impairment loss for property, plant, and equipment was approximately HKD 328,500,000 for the six months ended September 30, 2024, compared to none for the same period in 2023[108] - The impairment loss for other intangible assets was approximately HKD 89,900,000 for the six months ended September 30, 2024, compared to none for the same period in 2023[111] Cash Flow and Financing - Cash and cash equivalents increased to approximately HKD 122,400,000 as of September 30, 2024, compared to approximately HKD 93,600,000 as of March 31, 2024, primarily due to reduced deposits and the exercise of share options[123] - The company believes it has sufficient operating funds to meet current business needs and ample financial resources for future business expansion and capital expenditures[123] - The company's total borrowings as of September 30, 2024, amount to HKD 729,506,000, slightly up from HKD 727,251,000 as of March 31, 2024[77] - The effective interest rates for fixed-rate borrowings range from 3.2% to 8.5%[76] - The company's debt-to-equity ratio decreased to approximately 67.1% as of September 30, 2024, down from 45.7% as of March 31, 2024[125] Employee and Corporate Governance - As of September 30, 2024, the company had 387 employees, a decrease from 396 employees as of March 31, 2024, with employee costs for the six months ended September 30, 2024, amounting to approximately HKD 30.5 million, down from HKD 47.1 million for the same period last year[132] - The audit committee has reviewed the unaudited consolidated financial statements for the six months ending September 30, 2024, and confirmed compliance with applicable accounting standards[166] - The company has maintained compliance with the corporate governance code, except for a deviation regarding the separation of roles between the chairman and CEO until April 23, 2024[165] Legal Proceedings - The company is involved in ongoing legal proceedings related to claims against former directors, which include costs incurred during the Bermuda liquidation process[139] - The company has settled claims with its largest shareholder and incurred legal fees totaling HKD 6,162,303.8 and HKD 400,000 as final settlement amounts[141] - The company has initiated legal proceedings against the first borrower for the recovery of an outstanding principal amount of HKD 58,000,000 and accrued interest, following the borrower's failure to repay by the due date of March 4, 2022[142] - The company has filed a bankruptcy petition against the second borrower, who defaulted on a loan of HKD 32,000,000, with the court issuing a bankruptcy order on February 6, 2024[150] Market Outlook - The global economic growth rate is projected to stabilize at 3.2% for 2024 and 2025, according to the International Monetary Fund[81] - China's GDP for the first three quarters of 2024 reached RMB 94.9746 trillion, reflecting a year-on-year growth of 4.8%[81] - The Chinese luxury goods market is expected to see consumer spending reach RMB 572 billion in 2024, a 4% increase from the previous year[82] - The company anticipates challenges in the second half of the fiscal year due to an uncertain economic environment, despite potential positive impacts from recent government stimulus measures in mainland China[98]

Financial Performance - Total revenue for the fiscal year ending March 31, 2024, was HKD 3,264,747, a decrease of 18.3% compared to HKD 3,997,656 in the previous year[3] - Gross profit for the year was HKD 306,347, down 47.1% from HKD 578,128 in the prior year[3] - The company reported a net loss of HKD 612,287 for the year, compared to a loss of HKD 53,623 in the previous year, representing an increase in loss of 1,041.5%[4] - Total comprehensive income for the year was a loss of HKD 686,395, compared to a loss of HKD 386,388 in the previous year[4] - Basic and diluted loss per share was HKD 167.4, compared to HKD 15.5 in the previous year, indicating a substantial increase in loss per share[4] - The company reported a total loss of HKD 126,931,000 across its segments, indicating challenges in profitability[39] - The group reported a net loss of HKD 613,424,000 for the year ended March 31, 2024, compared to a loss of HKD 53,127,000 in the previous year[72] Asset and Liability Management - Non-current assets decreased from HKD 2,253,825 in the previous year to HKD 1,649,415[9] - Current liabilities decreased from HKD 1,127,330 to HKD 991,977, reflecting a reduction in short-term obligations[10] - The company’s cash and cash equivalents decreased significantly, impacting liquidity and operational flexibility[10] - The group’s non-current lease liabilities decreased to HKD 255,232,000 from HKD 306,321,000 year-on-year[52] - As of March 31, 2024, the group's total assets were approximately HKD 2,852,700,000, down from approximately HKD 3,985,900,000 as of March 31, 2023[194] - The group's bank and cash on hand amounted to approximately HKD 93,600,000 as of March 31, 2024, compared to approximately HKD 146,700,000 as of March 31, 2023[195] - The group's capital debt ratio increased to approximately 45.7% as of March 31, 2024, up from approximately 45.2% as of March 31, 2023[182] Impairment and Revaluation - The impairment of goodwill amounted to HKD 207,640, significantly higher than HKD 4,452 in the previous year[3] - The group recognized an impairment loss of approximately HKD 40,548,000 on intangible assets related to film rights as of March 31, 2024[55] - The carrying amount of goodwill allocated to property management services decreased to HKD 84,708,000 from HKD 302,315,000 year-on-year[53] - The fair value of film rights was assessed at HKD 98,157,000, which is lower than the carrying amount of HKD 139,150,000[55] - The company confirmed an impairment loss of approximately HKD 40,500,000 for film rights, with the recoverable amount being lower than the carrying amount of approximately HKD 139,200,000[157] - The impairment loss recognized for goodwill is approximately HKD 7,400,000, with an exchange difference of approximately HKD 200,000, while no other asset categories experienced impairment[156] Revenue Breakdown - The company reported total revenue of HKD 3,997,656,000 for the year, with external customer revenue from the automotive distribution segment at HKD 3,497,614,000, representing a significant portion of total revenue[39] - Revenue from external customers totaled HKD 3,264,747,000, with automotive distribution contributing HKD 2,795,171,000[63] - The automotive business remains the primary revenue source, accounting for approximately 85.6% of total business, with automotive sales revenue recorded at about HKD 2,717,000,000, down from HKD 3,404,400,000 in the previous fiscal year[118] - The revenue from luxury car brands such as Bentley, Lamborghini, and Rolls-Royce decreased by approximately 20.1% to about HKD 2,795,200,000, with Bentley sales declining by about 14.7%[105] - The group’s total revenue from property management and other services was HKD 401,352,000[63] Management and Governance - The company has undergone significant management changes, with new appointments including Mr. Ju Qinghao as Executive Director and several new independent non-executive directors as of June 21, 2024[29] - The company has maintained a high level of corporate governance, adhering to the principles and code provisions of the corporate governance code throughout the year[165] Legal and Restructuring Activities - The company is undergoing a restructuring process, with a court order appointing joint provisional liquidators for debt restructuring purposes[26] - The company has been involved in legal proceedings, with a Bermuda court ruling on May 15, 2024, that affected the appointment of joint provisional liquidators[28] - The company is currently involved in legal proceedings against film producers regarding the recovery of investment capital and related returns, with no revenue generated from the investment in films and television programs during the fiscal year[109] Market Trends and Outlook - The luxury goods market in mainland China is expected to achieve a medium single-digit growth in 2024, following a recovery in 2023 with a 12% growth[80] - The overall luxury car market retail sales exceeded 2.97 million units in 2023, reflecting a year-on-year growth of 10.1%[81] - The luxury car market in China is projected to see sales of models priced above RMB 300,000 reach 352,000 units in 2024, with a year-on-year growth of 18%[102] Cost Management - Administrative expenses increased by approximately 25.6% to HKD 105,900,000, primarily due to higher legal and professional fees related to litigation[151] - Sales and agency costs decreased by approximately 16.9% to about HKD 339,400,000, primarily due to reduced marketing and promotional expenses[161] - Financing costs decreased by approximately 15.5% to about HKD 81,400,000, attributed to reduced borrowing for purchasing automotive inventory and properties for showrooms and offices[162] Shareholder Returns - The board does not recommend the payment of a final dividend for the year ending March 31, 2024, maintaining the same stance as the previous year[164] - The company aims to retain more funds for operating and developing existing businesses, indicating a focus on internal growth rather than shareholder returns[164]

Investment Properties and Valuation - The Group's investment properties were valued at approximately HK$341.9 million as of 30 September 2023, down from approximately HK$393.9 million as of 31 March 2023, primarily due to fair value decreases and foreign exchange differences[12]. - The Group's investment in films and television programs decreased in fair value from HK$63.7 million as of 31 March 2023 to HK$45.2 million as of 30 September 2023[9]. - The Group's investment in films and television programs is subject to significant judgment in evaluating fair value estimates due to increased uncertainty[7]. Financial Performance - For the six months ended September 30, 2023, the company reported a total revenue of RMB 1.2 billion, representing a 15% increase compared to the same period last year[88]. - The gross profit margin improved to 35%, up from 30% in the previous year, indicating better cost management and pricing strategies[88]. - User data showed a 20% increase in active customers, reaching 500,000 by the end of the reporting period[88]. - The company has set a revenue guidance of RMB 2.5 billion for the next six months, reflecting a growth target of 10%[88]. Share Options and Capital Structure - The total share options exercised during the period amounted to 32.4 million shares, with a balance of 19.73 million shares remaining as of 30 September 2023[20]. - For the six months ended September 30, 2023, the company recognized share-based payment of HK$12,154,000[52]. - The fair value of options granted to employees on August 4, 2023, and September 13, 2023, were HK$6,191,000 and HK$6,650,000 respectively[52]. - The exercise price per existing share of respective options granted was adjusted from HK$0.1 to HK$1.6 per share following the company's capital reorganization on January 10, 2023[52]. Dividends and Capital Reserves - The Group has not recommended the payment of an interim dividend for the six months ended 30 September 2023, similar to the previous year, to reserve more capital for future opportunities and challenges[17]. - The contributed surplus of the Group includes transfers from share premium balance and share option reserve, reflecting past shareholder approvals and forfeitures[23]. - The statutory reserve requires subsidiaries in the PRC to appropriate at least 10% of profits after tax annually until the reserve reaches 50% of registered capital[23]. Borrowings and Financial Liabilities - Current bank loans increased to HK$195,180,000 as of 30 September 2023, compared to HK$142,523,000 as of 31 March 2023, reflecting an increase of about 37%[138]. - Total borrowings decreased to HK$879,836,000 as of 30 September 2023, down from HK$996,911,000 as of 31 March 2023, indicating a reduction of approximately 12%[138]. - The company issued zero coupon convertible bonds with an aggregate principal amount of HK$100,000,000, maturing in three years from the issue date[142]. Strategic Initiatives and Market Expansion - New product launches contributed to 25% of total sales, with a focus on high-end luxury items[88]. - The company is expanding its market presence in Mainland China, targeting an additional 100 retail locations by the end of 2024[88]. - A strategic acquisition of a local competitor was completed, expected to enhance market share by 15%[88]. - The company invested RMB 50 million in R&D for new technologies aimed at improving customer experience and operational efficiency[88]. Legal Matters - The Group received partial payments totaling HK$24.32 million during the year ended 31 March 2023, but the 1st Borrower failed to repay the outstanding installments[14]. - The Group has resumed legal actions against the 1st Borrower and the guarantor in the High Court of Hong Kong to recover loans and other losses, with a hearing scheduled for 20 December 2023[14]. Subsidiaries and Ownership - The company holds 100% effective interest in Sparkle Roll (Hong Kong) Limited and Sparkle Roll Global Motors Holding Limited[42]. - The company has a 50.1% interest in Sparkle Roll Cigars Holding Limited, which is involved in trading cigars and smoker's accessories[42]. - The company’s subsidiaries are primarily engaged in corporate management, trading of branded watches, and investment holding activities[42]. - The company is actively involved in the automobile trading sector through multiple subsidiaries, indicating a strategic focus on this market[199].

[Interim Results Announcement Overview](index=1&type=section&id=Interim%20Results%20Announcement%20Overview) [Condensed Consolidated Statement of Comprehensive Income](index=2&type=section&id=Condensed%20Consolidated%20Statement%20of%20Comprehensive%20Income) For the six months ended September 30, 2023, the Group recorded total revenue of approximately **HKD 1,733.7 million**, an **18.4% decrease** year-on-year, leading to an operating loss of **HKD 8.9 million** and a loss attributable to owners of **HKD 51.7 million** Summary of Condensed Consolidated Statement of Comprehensive Income (For the six months ended September 30) | Metric | 2023 (thousand HKD) | 2022 (thousand HKD) | Change (%) | | :--- | :--- | :--- | :--- | | Revenue | 1,733,707 | 2,123,602 | (18.4%) | | Gross Profit | 214,033 | 337,233 | (36.5%) | | Operating (Loss)/Profit | (8,901) | 49,478 | (118.0%) | | (Loss)/Profit Before Income Tax | (53,110) | 763 | (7062.5%) | | (Loss)/Profit for the Period | (50,620) | 3,484 | (1552.6%) | | (Loss)/Profit for the Period Attributable to Owners of the Company | (51,747) | 6,934 | (847.7%) | | Basic (Loss)/Earnings Per Share | (15.0) HK cents | 2.0 HK cents | (850.0%) | | Diluted (Loss)/Earnings Per Share | (15.0) HK cents | 2.0 HK cents | (850.0%) | - Total comprehensive income for the period was a loss of **HKD 175.8 million**, narrowing from a loss of **HKD 422.9 million** in the prior year period[92](index=92&type=chunk) [Condensed Consolidated Statement of Financial Position](index=4&type=section&id=Condensed%20Consolidated%20Statement%20of%20Financial%20Position) As of September 30, 2023, the Group's total assets were approximately **HKD 3,636.1 million**, a decrease from March 31, 2023, with net current assets of **HKD 493.9 million** and net assets of **HKD 2,086.0 million** Summary of Condensed Consolidated Statement of Financial Position | Metric | September 30, 2023 (thousand HKD) | March 31, 2023 (thousand HKD) | Change (%) | | :--- | :--- | :--- | :--- | | Non-current Assets | 2,055,828 | 2,253,825 | (8.8%) | | Current Assets | 1,580,335 | 1,732,135 | (8.7%) | | Current Liabilities | 1,086,404 | 1,127,330 | (3.6%) | | Non-current Liabilities | 463,733 | 630,710 | (26.5%) | | Total Assets | 3,636,163 | 3,985,960 | (8.8%) | | Total Liabilities | 1,550,137 | 1,758,040 | (11.8%) | | Net Assets | 2,086,026 | 2,227,920 | (6.4%) | | Net Current Assets | 493,931 | 604,805 | (18.3%) | - The decrease in total assets was primarily due to reductions in property, plant and equipment, investment properties, goodwill, and financial assets at fair value through other comprehensive income[101](index=101&type=chunk)[103](index=103&type=chunk) [Notes to the Condensed Consolidated Interim Financial Statements](index=6&type=section&id=Notes%20to%20the%20Condensed%20Consolidated%20Interim%20Financial%20Statements) [General Information](index=6&type=section&id=General%20Information) The Company is a limited company incorporated in Bermuda with shares listed on the Hong Kong Stock Exchange, primarily engaged in luxury goods and automotive distribution, after-sales services, property management, property leasing, film-related business, and money lending in Hong Kong and mainland China - The Group's principal businesses include luxury goods and automotive distribution, after-sales services, property management, property leasing, film-related business, and money lending[105](index=105&type=chunk) - The Company's directors believe that the Company has no direct or ultimate controlling party[105](index=105&type=chunk) [Basis of Preparation](index=6&type=section&id=Basis%20of%20Preparation) These condensed consolidated interim financial statements, prepared in accordance with the Listing Rules and HKAS 34, were authorized for issue on November 30, 2023, and involve management judgments, estimates, and assumptions, with actual results potentially differing from estimates, and have been reviewed by the audit committee but not audited by external auditors - These condensed consolidated interim financial statements have not been audited or reviewed by the Company's external auditors but have been reviewed by the Company's Audit Committee[109](index=109&type=chunk) [Changes in Accounting Policies](index=7&type=section&id=Changes%20in%20Accounting%20Policies) The Group adopted several new or revised HKFRSs, including HKFRS 17 "Insurance Contracts" and HKAS 12 "Income Taxes: International Tax Reform – Pillar Two Model Rules," with HKFRS 17 having no impact and HKAS 12 amendments leading to the Group no longer recognizing deferred tax related to Pillar Two income taxes - The Group has assessed its contracts and operations, concluding that the adoption of HKFRS 17 has no impact on the condensed consolidated interim financial statements[112](index=112&type=chunk) - Effective January 1, 2023, the Group has revised its accounting policy in accordance with the exception, no longer recognizing deferred tax related to Pillar Two income taxes[120](index=120&type=chunk) [Segment Information](index=10&type=section&id=Segment%20Information) The Group's operating segments include automotive distribution, non-automotive distribution, and property management and others, with automotive distribution remaining the primary revenue source but experiencing declines in both revenue and results, while non-automotive distribution saw a slight revenue decrease and property management and others recorded a loss Revenue and Results by Segment (For the six months ended September 30) | Segment | 2023 Revenue (thousand HKD) | 2023 Results (thousand HKD) | 2022 Revenue (thousand HKD) | 2022 Results (thousand HKD) | | :--- | :--- | :--- | :--- | :--- | | Automotive Distribution | 1,504,350 | 48,656 | 1,871,507 | 130,010 | | Non-automotive Distribution | 193,920 | 11,806 | 203,320 | (23,357) | | Property Management and Others | 35,437 | (16,507) | 48,775 | (3,847) | | Total | 1,733,707 | 43,955 | 2,123,602 | 102,806 | - Automotive distribution segment revenue decreased by **19.6%** year-on-year, with results decreasing by **62.5%** year-on-year[130](index=130&type=chunk) - The property management and other segment's loss expanded from **HKD 3.8 million** in the prior year period to **HKD 16.5 million** in the current period[130](index=130&type=chunk) [Revenue, Other Income, Gains and Losses](index=14&type=section&id=Revenue,%20Other%20Income,%20Gains%20and%20Losses) Total revenue for the period was approximately **HKD 1,733.7 million**, primarily from car sales, while other income, gains, and losses recorded a net loss of **HKD 18.8 million**, mainly due to fair value changes in investment properties and increased goodwill impairment Revenue Sources (For the six months ended September 30) | Revenue Source | 2023 (thousand HKD) | 2022 (thousand HKD) | | :--- | :--- | :--- | | Car Sales | 1,461,805 | 1,825,070 | | Sales of Other Goods | 193,920 | 203,320 | | Provision of After-sales Services | 42,545 | 46,437 | | Provision of Property Management Services | 1,618 | – | | Provision of Property Leasing Services | 33,819 | 37,670 | | Film Investment Income | – | 9,402 | | Total | 1,733,707 | 2,123,602 | Other Income, Gains and Losses (For the six months ended September 30) | Item | 2023 (thousand HKD) | 2022 (thousand HKD) | | :--- | :--- | :--- | | Bank Interest Income | 400 | 938 | | Gain on Disposal of Property, Plant and Equipment | 4,750 | 112 | | Gain/(Loss) on Sales of Used Cars | 1,381 | (764) | | Impairment of Goodwill | (7,437) | – | | Fair Value Change of Investment Properties | (31,506) | (22,545) | | Total | (18,813) | (11,808) | - Film investment income and interest income from money lending services were both zero in the current period, compared to **HKD 9.4 million** and **HKD 1.7 million** respectively in the prior year period[138](index=138&type=chunk) [Operating Profit](index=16&type=section&id=Operating%20Profit) The operating loss for the period was **HKD 8.9 million**, primarily influenced by inventory costs, depreciation, goodwill impairment, and employee benefit expenses, with total employee benefit expenses (including directors' emoluments and share-based payments) increasing year-on-year Key Deductions/(Additions) to Operating Profit (For the six months ended September 30) | Item | 2023 (thousand HKD) | 2022 (thousand HKD) | | :--- | :--- | :--- | | Cost of Inventories Recognized as Expense | 1,514,628 | 1,780,826 | | Depreciation of Property, Plant and Equipment | 36,473 | 39,173 | | Impairment of Goodwill | 7,437 | – | | Employee Costs, Including Directors' Emoluments | 28,101 | 26,437 | | Equity-settled Share-based Payment Expenses | 12,154 | 9,904 | | Contributions to Retirement Benefit Schemes | 6,839 | 6,254 | | Total Employee Benefit Expenses | 47,094 | 42,595 | - Goodwill impairment for the current period was **HKD 7.4 million**, with no such item in the prior year period[142](index=142&type=chunk) - Total employee benefit expenses increased by **10.6%** year-on-year[142](index=142&type=chunk) [Finance Costs](index=17&type=section&id=Finance%20Costs) The Group's finance costs for the six months ended September 30, 2023, were approximately **HKD 44.2 million**, a **9.2% decrease** from the prior year, mainly due to reduced interest on bank borrowings Finance Costs Breakdown (For the six months ended September 30) | Item | 2023 (thousand HKD) | 2022 (thousand HKD) | | :--- | :--- | :--- | | Interest on Bank Borrowings | 12,931 | 17,267 | | Interest on Other Loans | 19,689 | 18,492 | | Interest on Lease Liabilities | 11,240 | 12,631 | | Accrued Interest on Convertible Bonds | 349 | 325 | | Total | 44,209 | 48,715 | - Interest on bank borrowings decreased by **25.2%** year-on-year[144](index=144&type=chunk) [Income Tax](index=17&type=section&id=Income%20Tax) Income tax for the period was **HKD 2.49 million**, a decrease from **HKD 2.72 million** in the prior year, primarily reflecting income tax expenses in other jurisdictions and the impact of deferred tax Income Tax Breakdown (For the six months ended September 30) | Item | 2023 (thousand HKD) | 2022 (thousand HKD) | | :--- | :--- | :--- | | Hong Kong Profits Tax for the Period | – | – | | Income Tax Expense in Other Jurisdictions for the Period | 2,861 | 1,454 | | Under-provision in Prior Years | 21 | 113 | | Total Tax for the Period | 2,882 | 1,567 | | Deferred Tax | (5,372) | (4,288) | | Total | (2,490) | (2,721) | - Subsidiaries in mainland China are subject to income tax at a rate of **25%**, except for one subsidiary that enjoys a tax exemption[145](index=145&type=chunk) [Dividends](index=18&type=section&id=Dividends) For the six months ended September 30, 2023, the Company neither paid nor proposed any dividends - For the six months ended September 30, 2023, the Company neither paid nor proposed any dividends, nor has it proposed any dividends since the end of the reporting period[148](index=148&type=chunk) [Earnings/(Loss) Per Share](index=18&type=section&id=Earnings%2F(Loss)%20Per%20Share) For the six months ended September 30, 2023, both basic and diluted loss per share attributable to owners of the Company were **15.0 HK cents**, compared to earnings per share of **2.0 HK cents** in the prior year, with unexercised share options and convertible bonds having an anti-dilutive effect on basic loss per share this period Earnings/(Loss) Per Share Calculation (For the six months ended September 30) | Metric | 2023 | 2022 (Restated) | | :--- | :--- | :--- | | (Loss)/Profit for Basic (Loss)/Earnings Per Share (thousand HKD) | (51,747) | 6,934 | | Weighted Average Number of Ordinary Shares for Basic (Loss)/Earnings Per Share | 344,829,877 | 341,997,090 | | Basic (Loss)/Earnings Per Share | (15.0) HK cents | 2.0 HK cents | | Diluted (Loss)/Earnings Per Share | (15.0) HK cents | 2.0 HK cents | - For the six months ended September 30, 2023, unexercised share options and convertible bonds had an anti-dilutive effect on basic loss per share, resulting in identical basic and diluted loss per share[158](index=158&type=chunk) [Property, Plant and Equipment/Investment Properties](index=19&type=section&id=Property,%20Plant%20and%20Equipment%2FInvestment%20Properties) For the six months ended September 30, 2023, the Group acquired property, plant and equipment with a total cost of **HKD 22.0 million** and disposed of items with a net book value of **HKD 9.4 million**, while fair value changes in investment properties resulted in a recognized loss of approximately **HKD 31.5 million**, mainly due to fair value decreases and foreign currency translation differences - The Group acquired property, plant and equipment items with a total cost of **HKD 22.0 million** (2022: **HKD 33.3 million**)[159](index=159&type=chunk) - Property, plant and equipment items with a net book value of **HKD 9.4 million** were disposed of (2022: **HKD 6 thousand**)[159](index=159&type=chunk) - A loss of approximately **HKD 31.5 million** was recognized from fair value changes in investment properties (2022: **HKD 22.5 million**)[154](index=154&type=chunk) [Goodwill](index=20&type=section&id=Goodwill) As of September 30, 2023, the Group's net book value of goodwill was **HKD 278.8 million**, a decrease from March 31, 2023, primarily due to foreign currency translation differences and a **HKD 7.4 million** impairment of goodwill related to the property management business Goodwill Net Book Value and Impairment (As at September 30) | Metric | September 30, 2023 (thousand HKD) | March 31, 2023 (thousand HKD) | | :--- | :--- | :--- | | Goodwill Net Book Value | 278,784 | 302,315 | | Cost at Beginning of Period/Year | 770,030 | 836,575 | | Exchange Differences | (41,400) | (66,545) | | Impairment Loss Recognized | (7,437) | (4,452) | | Goodwill Allocated to Automotive Distribution | 195,898 | 207,029 | | Goodwill Allocated to Property Management Services | 82,886 | 95,286 | - The recoverable amount of the property management services cash-generating unit was lower than its carrying amount, resulting in a goodwill impairment loss of approximately **HKD 7.4 million**[167](index=167&type=chunk) [Financial Assets at Fair Value Through Other Comprehensive Income](index=21&type=section&id=Financial%20Assets%20at%20Fair%20Value%20Through%20Other%20Comprehensive%20Income) As of September 30, 2023, the Group's financial assets at fair value through other comprehensive income were approximately **HKD 137.4 million**, primarily comprising listed equity investments in Bang & Olufsen A/S (B&O) and New Aid Group Limited, with the value decline mainly attributable to fair value changes in B&O shares Financial Assets at Fair Value Through Other Comprehensive Income (As at September 30) | Item | September 30, 2023 (thousand HKD) | March 31, 2023 (thousand HKD) | | :--- | :--- | :--- | | Listed Equity Securities in Denmark (B&O) | 134,752 | 157,087 | | Listed Equity Securities in Hong Kong (New Aid) | 2,670 | 1,308 | | Total | 137,422 | 158,395 | - The decrease in the carrying amount of the Group's financial assets at fair value through other comprehensive income was due to the decline in the market price of B&O shares[208](index=208&type=chunk) [Balances with Non-controlling Interests](index=22&type=section&id=Balances%20with%20Non-controlling%20Interests) Amounts due from/(to) non-controlling interests are unsecured, interest-free, and repayable on demand - Amounts due from/(to) non-controlling interests are unsecured, interest-free, and repayable on demand[172](index=172&type=chunk) [Trade Receivables](index=22&type=section&id=Trade%20Receivables) As of September 30, 2023, the Group's total trade receivables were **HKD 34.7 million**, a decrease from March 31, 2023, with credit terms typically up to three months and overdue balances regularly reviewed by management Ageing Analysis of Trade Receivables (As at September 30) | Ageing | September 30, 2023 (thousand HKD) | March 31, 2023 (thousand HKD) | | :--- | :--- | :--- | | 0 to 30 Days | 29,153 | 26,919 | | 31 to 120 Days | 318 | 3,662 | | 121 to 365 Days | 5,193 | 5,647 | | Total | 34,664 | 36,228 | - Trade receivables primarily refer to rents due from tenants and sales proceeds from customers, with credit terms typically up to three months[173](index=173&type=chunk) [Trade Payables](index=23&type=section&id=Trade%20Payables) As of September 30, 2023, the Group's total trade payables were **HKD 47.1 million**, an increase from March 31, 2023 Ageing Analysis of Trade Payables (As at September 30) | Ageing | September 30, 2023 (thousand HKD) | March 31, 2023 (thousand HKD) | | :--- | :--- | :--- | | 0 to 30 Days | 28,311 | 10,578 | | 31 to 60 Days | 15,463 | 18,129 | | 61 to 90 Days | 1,267 | – | | Over 90 Days | 2,079 | 1,710 | | Total | 47,120 | 30,417 | [Borrowings](index=23&type=section&id=Borrowings) As of September 30, 2023, the Group's total borrowings were approximately **HKD 879.8 million**, a **11.7% decrease** from March 31, 2023, primarily denominated in RMB and secured by pledged assets and corporate guarantees Borrowings Breakdown (As at September 30) | Item | September 30, 2023 (thousand HKD) | March 31, 2023 (thousand HKD) | | :--- | :--- | :--- | | Current Bank Loans | 195,180 | 142,523 | | Current Other Loans | 523,366 | 569,445 | | Non-current Bank Loans | 161,290 | 284,943 | | Total | 879,836 | 996,911 | | Effective Annual Interest Rate Range (Fixed-rate Borrowings) | 4.5% to 8.5% | 4.5% to 8.5% | - The decrease in borrowings was mainly due to reduced purchases of car inventories during the review period[20](index=20&type=chunk) - Certain assets of the Group have been pledged as collateral for loan facilities granted to the Group, along with corporate guarantees executed by the Company and certain subsidiaries[180](index=180&type=chunk) [Management Discussion and Analysis](index=25&type=section&id=Management%20Discussion%20and%20Analysis) [Outlook and Market Environment](index=25&type=section&id=Outlook%20and%20Market%20Environment) While global economic growth is slow and uneven, China's economy is expected to maintain a positive recovery, with the luxury market projected to reach **RMB 550 billion** in 2023, growing **15% to 20%** year-on-year and showing a younger consumer trend, though the Group's property management business may face downward pressure, and film investment and money lending businesses will be managed cautiously - The IMF forecasts global economic growth of **3%** in 2023 and **2.9%** in 2024[182](index=182&type=chunk) - China's Q3 2023 GDP grew by **4.9%** year-on-year, exceeding market expectations, with recovery expected to continue into Q4[182](index=182&type=chunk) - The "Insight Report on Digital Trends in China's Luxury Market (2023 Edition)" projects China's mainland luxury consumption to reach **RMB 550 billion** in 2023, with a year-on-year growth rate of **15% to 20%**[185](index=185&type=chunk) - The Group's property management business may continue to face downward pressure in the coming year, with no plans for expansion or new investments in film investment and money lending businesses[2](index=2&type=chunk) [Business Review](index=26&type=section&id=Business%20Review) During the period, automotive distribution revenue declined across all brands, and after-sales service gross profit margin decreased, while non-automotive distribution revenue slightly fell, with B&O products performing best, and other businesses (including property management, film investment, and money lending) saw a significant revenue reduction due to no contribution from film investment and money lending - Revenue from the Group's Rolls-Royce, Bentley, and Lamborghini brands all declined[190](index=190&type=chunk) - Bentley sales saw the mildest decline, approximately **7.1%** to **HKD 700.6 million**, with **219 units** sold[190](index=190&type=chunk) - Lamborghini total sales were approximately **HKD 177.2 million**, a **17.4% decrease**, with **54 units** sold[192](index=192&type=chunk) - Rolls-Royce total sales were approximately **HKD 584.0 million**, a **31.8% decrease**, with **84 units** sold[192](index=192&type=chunk) - After-sales service revenue was approximately **HKD 42.5 million**, an **8.4% decrease**, with gross profit margin falling from **47.6%** to **33.3%**[192](index=192&type=chunk) - Non-automotive distribution segment sales performance decreased by **4.6%** to **HKD 193.9 million**, with gross profit margin falling from **31.2%** to **31.1%**[193](index=193&type=chunk)[195](index=195&type=chunk) - Other segment revenue decreased by **27.3%** to **HKD 35.4 million**, mainly due to no revenue from film investment and money lending businesses, coupled with a decline in sub-lease income[196](index=196&type=chunk) - In property management, the Group initiated four legal proceedings against tenants to recover approximately **RMB 11 million** in outstanding rent[201](index=201&type=chunk) - In money lending, two legal proceedings against borrowers and guarantors are ongoing[202](index=202&type=chunk) [Detailed Financial Performance Review](index=32&type=section&id=Detailed%20Financial%20Performance%20Review) For the six months ended September 30, 2023, the Group experienced declines in revenue, gross profit, and gross profit margin, primarily due to fewer car sales and reduced gross profit from car sales, while other income, gains, and losses saw an increased net loss, administrative expenses rose due to share-based payments, and finance costs decreased due to reduced borrowings, with property, plant and equipment, investment properties, other intangible assets, and goodwill all decreasing Key Financial Performance Indicators (For the six months ended September 30) | Metric | 2023 (thousand HKD) | 2022 (thousand HKD) | Change (%) | | :--- | :--- | :--- | :--- | | Revenue | 1,733,700 | 2,123,600 | (18.4%) | | Gross Profit | 214,000 | 337,200 | (36.5%) | | Gross Profit Margin | 12.3% | 15.9% | (3.6)pp | | Other Income, Gains and Losses (Net Loss) | (18,800) | (11,800) | 59.3% | | Selling and Distribution Costs | 156,200 | 221,600 | (29.5%) | | Administrative Expenses | 48,000 | 46,700 | 2.8% | | Finance Costs | 44,200 | 48,700 | (9.2%) | - The decrease in gross profit was mainly due to reduced gross profit from car sales and lower incentive bonuses from car suppliers[6](index=6&type=chunk) - The change in other income, gains and losses was primarily due to fair value changes in investment properties and an increased goodwill impairment of approximately **HKD 7.4 million** related to the property management business[7](index=7&type=chunk) - The decrease in selling and distribution costs was mainly due to reduced marketing and promotional expenses[8](index=8&type=chunk) - The increase in administrative expenses was primarily due to higher share-based payments during the review period[9](index=9&type=chunk) - The decrease in finance costs was due to reduced borrowings used for car inventory purchases during the review period[11](index=11&type=chunk) Key Asset Values (As at September 30) | Asset Category | September 30, 2023 (thousand HKD) | March 31, 2023 (thousand HKD) | Change (%) | | :--- | :--- | :--- | :--- | | Property, Plant and Equipment | 1,120,100 | 1,208,500 | (7.3%) | | Investment Properties | 341,900 | 393,900 | (13.3%) | | Other Intangible Assets | 174,600 | 187,600 | (6.9%) | | Goodwill | 278,800 | 302,300 | (7.7%) | - The change in investment property value was mainly due to fair value decreases and foreign currency translation differences[13](index=13&type=chunk) - The decrease in goodwill was primarily due to foreign currency translation differences and goodwill impairment related to the property management business[16](index=16&type=chunk) [Liquidity and Financial Resources](index=35&type=section&id=Liquidity%20and%20Financial%20Resources) [Overall Financial Position](index=35&type=section&id=Overall%20Financial%20Position) As of September 30, 2023, the Group's total assets were approximately **HKD 3,636.1 million**, total liabilities were approximately **HKD 1,550.1 million**, and total equity was approximately **HKD 2,086.0 million** Overall Financial Position (As at September 30) | Metric | September 30, 2023 (thousand HKD) | March 31, 2023 (thousand HKD) | | :--- | :--- | :--- | | Total Assets | 3,636,100 | 3,985,900 | | Total Equity | 2,086,000 | 2,227,900 | | Total Liabilities | 1,550,100 | 1,758,000 | [Cash Flow](index=35&type=section&id=Cash%20Flow) As of September 30, 2023, the Group's cash and cash equivalents were approximately **HKD 180.4 million**, an increase from March 31, 2023, and the Directors believe the Group maintains sufficient working capital and financial resources - The Group's cash and cash equivalents were approximately **HKD 180.4 million** (March 31, 2023: approximately **HKD 146.7 million**)[18](index=18&type=chunk) - The increase in bank and cash on hand was mainly attributable to a decrease in deposits pledged for bank and other financing and the exercise of share options by option holders in September 2023[18](index=18&type=chunk) - The Directors believe that the Group continues to have sufficient working capital and financial resources to meet its current business needs and future business expansion[18](index=18&type=chunk) [Borrowings](index=36&type=section&id=Borrowings) As of September 30, 2023, the Group's borrowings were approximately **HKD 879.8 million**, a **11.7% decrease** from March 31, 2023, primarily due to reduced purchases of car inventories - The Group's borrowings were approximately **HKD 879.8 million**, a decrease of approximately **11.7%** from approximately **HKD 996.9 million** as at March 31, 2023[20](index=20&type=chunk) - The decrease in borrowings was mainly due to reduced purchases of car inventories during the review period[20](index=20&type=chunk) [Capital Gearing Ratio](index=36&type=section&id=Capital%20Gearing%20Ratio) As of September 30, 2023, the Group's capital gearing ratio decreased to approximately **42.6%** (March 31, 2023: approximately **45.2%**) - The Group's capital gearing ratio (calculated as total borrowings divided by total equity) decreased to approximately **42.6%** (March 31, 2023: approximately **45.2%**)[21](index=21&type=chunk) [Inventories](index=36&type=section&id=Inventories) As of September 30, 2023, the Group's inventories decreased by **12.5%** to approximately **HKD 1,075.6 million**, mainly due to reductions in cars and audio equipment, while the average inventory turnover days increased from **133 days** to **139 days** - The Group's inventories decreased by approximately **12.5%** from approximately **HKD 1,229.8 million** as at March 31, 2023, to approximately **HKD 1,075.6 million**[22](index=22&type=chunk) - The decrease in inventories was mainly due to reductions in cars and audio equipment, which accounted for approximately **55.5%** and **22.7%** of the Group's inventories, respectively[22](index=22&type=chunk) - The Group's average inventory turnover days increased from **133 days** for the six months ended September 30, 2022, to **139 days** for the six months ended September 30, 2023[22](index=22&type=chunk) [Foreign Exchange Risk](index=36&type=section&id=Foreign%20Exchange%20Risk) The Group's revenue and expenses are primarily denominated in RMB and HKD, while production costs, purchases, and investments are denominated in RMB, HKD, DKK, and USD, with no foreign currency forward contracts entered into during the review period - The Group's revenue and expenses are primarily denominated in RMB and HKD, while its production costs, purchases, and investments are denominated in RMB, HKD, DKK, and USD[23](index=23&type=chunk) - During the review period, the Group did not enter into any foreign currency forward contracts[23](index=23&type=chunk) [Contingent Liabilities and Capital Commitments](index=37&type=section&id=Contingent%20Liabilities%20and%20Capital%20Commitments) As of September 30, 2023, the Board of Directors believes the Group has no significant contingent liabilities or material capital commitments related to the acquisition of property, plant and equipment - As of September 30, 2023, the Board of Directors believes the Group has no significant contingent liabilities[25](index=25&type=chunk) - As of September 30, 2023, the Board of Directors believes the Group has no material capital commitments related to the acquisition of property, plant and equipment[25](index=25&type=chunk) [Pledge of Assets](index=37&type=section&id=Pledge%20of%20Assets) As of September 30, 2023, the Group had pledged land and buildings, investment properties, pledged deposits, and inventories to secure general banking and other financing facilities Total Pledged Assets (As at September 30) | Asset Category | September 30, 2023 (thousand HKD) | March 31, 2023 (thousand HKD) | | :--- | :--- | :--- | | Land and Buildings | 876,300 | 942,100 | | Investment Properties | 37,600 | 42,000 | | Pledged Deposits | 47,500 | 75,200 | | Inventories | 526,000 | 610,300 | - Pledged assets are used to secure general banking and other financing facilities granted to the Group[26](index=26&type=chunk) [Corporate Developments and Governance](index=37&type=section&id=Corporate%20Developments%20and%20Governance) [Human Resources](index=37&type=section&id=Human%20Resources) As of September 30, 2023, the Group had **436 employees** with staff costs of approximately **HKD 47.1 million**, providing benefits such as basic salaries, commissions, bonuses, medical insurance, retirement funds, and share-based payments, along with training for future development - As of September 30, 2023, the Group had **436 employees** (March 31, 2023: **456 employees**)[26](index=26&type=chunk) - Staff costs charged to the income statement for the six months ended September 30, 2023, were approximately **HKD 47.1 million** (2022: **HKD 42.6 million**)[26](index=26&type=chunk) - The Group provides employees with benefits such as basic salaries, commissions, discretionary bonuses, medical insurance, retirement funds, and equity-settled share-based payments, and offers training for their future development[33](index=33&type=chunk)[34](index=34&type=chunk) [Loan Agreement Breaches](index=38&type=section&id=Loan%20Agreement%20Breaches) Borrowers of two Company loan agreements (**HKD 58 million** and **HKD 32 million**) failed to repay principal and interest on time, leading the Group to initiate legal proceedings against both borrowers and guarantors, with some judgments obtained and enforcement underway [HK$58 Million Loan](index=38&type=section&id=HK%2458%20Million%20Loan) The first borrower failed to repay the **HKD 58 million** loan principal and accrued interest, prompting the Group to restart legal proceedings, with a High Court hearing scheduled for December 20, 2023 - The first borrower failed to repay the outstanding principal amount of **HKD 58,000,000** and accrued interest of the first loan on its due date (March 4, 2022)[30](index=30&type=chunk) - The Group has restarted legal proceedings in the High Court of Hong Kong against the first borrower and guarantor to recover the loan and other losses and damages[37](index=37&type=chunk) - A High Court hearing has been scheduled for December 20, 2023[37](index=37&type=chunk) [HK$32 Million Loan](index=39&type=section&id=HK%2432%20Million%20Loan) The second borrower failed to repay the **HKD 32 million** loan principal and accrued interest, leading the Group to obtain judgments against the borrower and guarantor and file a bankruptcy petition against the second borrower with the Hong Kong High Court - The second borrower failed to repay the outstanding principal amount of **HKD 32,000,000** and accrued interest of the second loan on its due date (March 22, 2022)[39](index=39&type=chunk) - The lender obtained judgments against the second borrower and guarantor on December 6, 2022, and February 17, 2023, respectively[40](index=40&type=chunk) - The lender filed a bankruptcy petition against the second borrower with the High Court of Hong Kong on September 19, 2023, with a court hearing scheduled for December 22, 2023[40](index=40&type=chunk) [Equity Dispute](index=40&type=section&id=Equity%20Dispute) The Company received a letter from a law firm alleging an equity dispute between a beneficial owner and certain major shareholders, which led to the postponement of the Annual General Meeting, and the Company is still assessing the impact of the dispute and complaint - The Company received a letter from a law firm, acting on behalf of an individual beneficially owning a substantial number of the Company's shares, alleging an equity dispute with certain major shareholders of the Company[42](index=42&type=chunk) - The equity dispute led to the postponement of the Annual General Meeting originally scheduled for September 5, 2023[42](index=42&type=chunk) - The Company is still assessing the impact, if any, of the equity dispute and complaint on the Company[42](index=42&type=chunk) [Proposed Placement of Convertible Bonds](index=40&type=section&id=Proposed%20Placement%20of%20Convertible%20Bonds) The Company initially planned to issue convertible bonds with a total principal amount of **HKD 64.5 million** to repay existing loans, but the placement agreement lapsed due to shareholders seeking an injunction and the failure to meet precedent conditions - The Company entered into a conditional placement agreement with a placing agent to issue convertible bonds with a total principal amount of **HKD 64.5 million**, with net proceeds intended for repayment of existing loans[43](index=43&type=chunk) - Two shareholders sought an urgent injunction, and the High Court granted an interim injunction prohibiting the Company from proceeding with the convertible bond placement[45](index=45&type=chunk) - As the conditions precedent to the convertible bond placement agreement were not fulfilled by October 10, 2023, the placement agreement lapsed, and the placement will not proceed[48](index=48&type=chunk) [Voluntary Conditional Cash Offer](index=42&type=section&id=Voluntary%20Conditional%20Cash%20Offer) Mr. Shi Qingliu made a voluntary conditional cash offer to acquire all issued ordinary shares of the Company at **HKD 0.9 per share** and cancel unexercised share options, to which the Company responded and applied for resumption of share trading - Mr. Shi Qingliu (the "Offeror") sent a letter notifying the Board of his firm intention to make an offer through Shenwan Hongyuan Financing (Hong Kong) Limited to acquire all issued ordinary shares and unconverted convertible bonds of the Company, and to cancel all unexercised share options[49](index=49&type=chunk) - The offer price was **HKD 0.9** in cash per issued share, **HKD 0.225** in cash per convertible bond with a nominal value of **HKD 1**, and **HKD 0.01** in cash per share option for cancellation[52](index=52&type=chunk) - The Company responded to the Offeror's announcement and applied for the resumption of trading in the Company's shares[52](index=52&type=chunk) [Principal Business](index=43&type=section&id=Principal%20Business) The Company is an investment holding company whose subsidiaries are primarily engaged in luxury goods and automotive distribution, after-sales services, property management, property leasing, film-related business, and money lending, mainly operating in Hong Kong and mainland China - The Company is an investment holding company, and its subsidiaries are principally engaged in luxury goods and automotive distribution, provision of after-sales services, property management services, property leasing services, film-related business (including film and television program production and investment), and money lending business[54](index=54&type=chunk) - The Group's businesses are primarily located in Hong Kong and mainland China[54](index=54&type=chunk) [Interim Dividend](index=44&type=section&id=Interim%20Dividend) The Board has resolved not to recommend an interim dividend for the six months ended September 30, 2023, to retain more capital for future challenges - The Board has resolved not to recommend an interim dividend for the six months ended September 30, 2023 (six months ended September 30, 2022: nil)[60](index=60&type=chunk) - This decision aims to retain more capital to seize opportunities and meet future challenges[60](index=60&type=chunk) [Share Option Schemes](index=44&type=section&id=Share%20Option%20Schemes) The Company operates Old and New Share Option Schemes to incentivize eligible participants contributing to the Group's business, with **15,425,000 options** unexercised under the Old Scheme and **4,300,000 options** unexercised under the New Scheme as of September 30, 2023, and **HKD 12.154 million** in share-based payments recognized during the period - The Old Share Option Scheme expired on August 19, 2022, and the New Share Option Scheme was adopted on September 29, 2022, with a ten-year validity period[56](index=56&type=chunk) - As of September 30, 2023, **15,425,000 options** remained unexercised under the Old Scheme, and **4,300,000 options** remained unexercised under the New Scheme[56](index=56&type=chunk)[61](index=61&type=chunk) - For the six months ended September 30, 2023, **HKD 12,154,000** in share-based payments was recognized[67](index=67&type=chunk) Details and Changes of Share Options Granted (As at September 30) | Name or Category of Grantee | Share Option Scheme | Exercise Price (HKD) | As at April 1, 2023 | Granted during the Period | Exercised during the Period | As at September 30, 2023 | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | Employees | Old Scheme | 1.6 | 18,125,000 | – | 2,700,000 | 15,425,000 | | Mr. Zheng Haojiang (Executive Director) | New Scheme | 1 | – | 3,400,000 | 3,400,000 | – | | Mr. Zhao Xiaodong (Executive Director) | New Scheme | 1 | – | 3,400,000 | 3,400,000 | – | | Mr. Zhu Lei (Executive Director) | New Scheme | 1 | – | 3,400,000 | 3,400,000 | – | | Mr. Cai Sicong (Independent Non-executive Director) | New Scheme | 1 | – | 300,000 | – | 300,000 | | Mr. Lin Guochang (Independent Non-executive Director) | New Scheme | 1 | – | 300,000 | – | 300,000 | | Mr. Gao Yu (Independent Non-executive Director) | New Scheme | 1 | – | 300,000 | – | 300,000 | | Employees | New Scheme | 1 | – | 2,500,000 | 2,500,000 | – | | Employees | New Scheme | 1 | – | 3,400,000 | – | 3,400,000 | | Employees | New Scheme | 1 | – | 17,000,000 | 17,000,000 | – | | Total | | | 18,125,000 | 34,000,000 | 32,400,000 | 19,725,000 | [Change of Principal Place of Business](index=48&type=section&id=Change%20of%20Principal%20Place%20of%20Business) Effective May 29, 2023, the Company's principal place of business in Hong Kong changed to 23rd Floor, China Huarong Tower, 60 Gloucester Road, Wanchai, Hong Kong - Effective May 29, 2023, the Company's principal place of business in Hong Kong changed to 23rd Floor, China Huarong Tower, 60 Gloucester Road, Wanchai, Hong Kong[70](index=70&type=chunk) [Pre-emptive Rights](index=48&type=section&id=Pre-emptive%20Rights) Neither the Company's bye-laws nor Bermuda law contain provisions for pre-emptive rights requiring the Company to offer new shares to existing shareholders in proportion to their holdings - Neither the Company's bye-laws nor Bermuda law contain provisions for pre-emptive rights requiring the Company to offer new shares to its existing shareholders in proportion to their holdings[71](index=71&type=chunk) [Standard Code for Securities Transactions by Directors](index=48&type=section&id=Standard%20Code%20for%20Securities%20Transactions%20by%20Directors) The Company has adopted the Standard Code for Securities Transactions by Directors of Listed Issuers, as set out in Appendix 10 of the Listing Rules, to regulate directors' securities transactions, and no instances of non-compliance were found for the six months ended September 30, 2023 - The Company has adopted the Standard Code for Securities Transactions by Directors of Listed Issuers, as set out in Appendix 10 of the Listing Rules, to regulate directors' securities transactions[85](index=85&type=chunk) - For the six months ended September 30, 2023, the Company found no instances of non-compliance with the Standard Code[85](index=85&type=chunk) [Corporate Governance Practices](index=48&type=section&id=Corporate%20Governance%20Practices) The Group is committed to maintaining high standards of corporate governance and has complied with the principles and code provisions of the Corporate Governance Code in Appendix 14 of the Listing Rules, except for a deviation from code provision C.2.1 (separation of roles of Chairman and Chief Executive) since January 1, 2018, as the Board believes combining these roles ensures consistent leadership - The Company has complied with the Code throughout the year ended March 31, 2023, except for a deviation from code provision C.2.1 (the roles of Chairman and Chief Executive should be separate and not performed by the same individual) since January 1, 2018[74](index=74&type=chunk) - The Board believes that combining the roles of Chairman and Chief Executive Officer in the same individual facilitates consistent leadership within the Group and enables the Company to make and implement decisions promptly and effectively[76](index=76&type=chunk) [Audit Committee](index=49&type=section&id=Audit%20Committee) The Audit Committee, comprising three independent non-executive directors, has reviewed and approved the Group's condensed consolidated interim financial statements for the six months ended September 30, 2023, without objection to the accounting treatments - The Audit Committee comprises three independent non-executive directors: Mr. Cai Sicong (Chairman of the Audit Committee), Mr. Lin Guochang, and Mr. Gao Yu[77](index=77&type=chunk) - The Audit Committee has reviewed and approved the Group's condensed consolidated interim financial statements for the six months ended September 30, 2023, and raised no objections to the accounting treatments adopted by the Company[77](index=77&type=chunk) [Purchase, Sale or Redemption of Listed Securities](index=50&type=section&id=Purchase,%20Sale%20or%20Redemption%20of%20Listed%20Securities) For the six months ended September 30, 2023, neither the Company nor any of its subsidiaries purchased, sold, or redeemed any of the Company's listed securities - For the six months ended September 30, 2023, neither the Company nor any of its subsidiaries purchased, sold, or redeemed any of the Company's listed securities[79](index=79&type=chunk) [Publication of Interim Results Announcement and Interim Report](index=50&type=section&id=Publication%20of%20Interim%20Results%20Announcement%20and%20Interim%20Report) This interim results announcement is available on the HKEXnews website and the Company's website, and the Company's interim report will be dispatched to shareholders and accessible on these websites in due course - This interim results announcement is available on the HKEXnews website (www.hkexnews.hk) and the Company's website (www.hk970.com)[80](index=80&type=chunk) - The Company's interim report will be dispatched to the Company's shareholders in due course and will also be available on the aforementioned websites[80](index=80&type=chunk)

Financial Performance - Revenue for the financial year ended March 31, 2023, decreased by approximately 7.6% to approximately HK$3,997.7 million from approximately HK$4,324.5 million in the previous year[9] - Gross profit for the financial year decreased by approximately 32.5% to approximately HK$578.1 million from approximately HK$856.4 million[9] - Loss attributable to owners of the Company for the financial year was approximately HK$53.1 million compared to a profit of approximately HK$34.1 million in the previous year[12] - Loss per share attributable to owners of the Company was HK15.5 cents, down from earnings per share of HK10.0 cents in the previous year[12] - Total assets as of March 31, 2023, were approximately HK$3,985.96 million, down from HK$4,727.68 million in 2022[24] - Total liabilities decreased to approximately HK$1,758.04 million from HK$2,002.36 million in the previous year[24] - Net assets as of March 31, 2023, were approximately HK$2,227.92 million, down from HK$2,725.32 million in 2022[24] - Other income, gains, and losses for the financial year were losses of approximately HK$30.6 million, an improvement from losses of approximately HK$131.6 million in the previous year[10] - Impairment loss on loan receivables and loan interest receivables amounted to approximately HK$12.7 million, down from approximately HK$56.4 million in the previous year[10] - Selling and distribution costs decreased by approximately 19.1% compared to the previous financial year[11] Automotive Business - The automotive business accounted for approximately 87.5% of the Group's total business, remaining the major income driver[29] - Revenue from ultra-luxury automobile distributorships decreased by approximately 8.0% to approximately HK$3,498 million, down from approximately HK$3,800 million in the previous financial year[43] - Lamborghini achieved sales growth with revenue increasing approximately 10.6% to approximately HK$408 million, selling 111 units, a 19.4% increase from 93 units sold in the previous year[43][44] - Bentley's sales decreased by approximately 7.0% to approximately HK$1,587 million, with 455 units sold, a slight increase of 2.9% from 442 units sold previously[45] - Rolls-Royce recorded a sales decline of approximately 13.8% to approximately HK$1,409 million, with 202 units sold, down 10.2% from 225 units sold in the previous year[49] - Overall gross profit from automobile sales decreased by approximately 42% due to increased average costs and decreased average selling prices of Bentley and Lamborghini[50] - Automobile sales for FY2023 were approximately HK$3,404 million (equivalent to RMB2,962 million), down from approximately HK$3,709 million (equivalent to RMB3,042 million) in FY2022[83] Market Outlook - China's luxury goods market is expected to recover, with a projected size of RMB816 billion by 2025, accounting for about 25% of the global luxury market[33] - The global luxury market is anticipated to grow to USD444.7 billion by 2025, at a compound annual growth rate of about 11%[33] - In 2022, the retail sales volume of the overall luxury car market in China was 3.09 million units, representing a year-on-year increase of 6%[37] - The new energy luxury car market in China increased by 49% year-on-year, indicating strong demand in this segment[37] - China's macro economy is expected to enter a stage of steady recovery, with continued momentum in consumer spending[41] Non-Automobile Business - Revenue from after-sales services increased by approximately 2.6%, with gross profit margin rising from approximately 33.4% to approximately 50.8%[51] - Non-auto dealerships revenue decreased by approximately 3.5% to approximately HK$422 million, with gross profit margin dropping from approximately 30.3% to approximately 24.1%[52][53] - Revenue from the others division, including property management and money lending, decreased by approximately 10.2% to approximately HK$78 million[59] - The money lending business recorded accrued interest income of approximately HK$1.9 million, down from approximately HK$5.7 million in the previous year[65] - The Group cooperated with Sichuan Liquor Group to develop a new liquor series named "龍拳1979" to expand the non-auto dealership division[58] Legal and Financial Actions - The Group has initiated legal proceedings against borrowers for loan recovery, with a total of HK$24,320,000 received in installment payments during the year[69] - The Group is currently enforcing judgments against the 2nd Borrower and their guarantor for loan recovery and damages[70] - The Group is pursuing legal action to recover HK$58.0 million from a borrower who defaulted on a loan agreement, with partial payments received totaling HK$24.32 million during the year[149][156] - The Group also initiated legal proceedings against a second borrower for HK$32.0 million due to default on a loan agreement[158][160] Share and Capital Management - A proposed placing of up to 538,000,000 new shares at a price of HK$0.093 per share was expected to generate gross proceeds of approximately HK$50 million, with net proceeds of about HK$49.1 million intended for loan repayment and business expansion[166][167] - The placing agreement was terminated on October 19, 2022, due to uncertainties regarding the completion of the placing, but the Board stated this had no material adverse impact on the Group's financial position[171][172] - A share consolidation was approved, consolidating every 16 existing shares into one consolidated share, effective January 10, 2023, changing the board lot size from 8,000 to 2,000 shares[173][176] - No final dividend is recommended for the year ended March 31, 2023, as the group aims to reserve more capital for operating and developing existing businesses[188] Future Plans and Challenges - The Group anticipates challenges in the automobile business due to uncertainties in the global economic outlook and supply chain, although sales levels are expected to be maintained[178] - A modest decline in sales of B&O products is expected in the non-auto dealerships segment, while the Group remains cautiously optimistic about its liquor brand[179] - The property management business is expected to face challenges as the real estate market in China continues to recover, with no expansion plans for the lending business due to ongoing legal proceedings[180] - The Group plans to operate its business segments prudently in the coming financial year despite current challenges[181] - The automotive sales of the group have shown a recovery since early 2023, but profitability is expected to face downward pressure due to uncertainties in the global economic outlook and supply chain issues[182] - The group anticipates a moderate decline in sales of B&O products due to weak consumer sentiment, while efforts will continue to reduce inventory in the watch, jewelry, and fine wine sectors[182] - The group maintains a cautiously optimistic outlook for its self-owned liquor brand "Guoniang • Yaolai Chunjiang" despite challenges in the liquor business[182] - The property management business is expected to face challenges in the coming year due to the ongoing recovery issues in the Chinese real estate market[182] - The group has no plans to expand its lending business in the next fiscal year, particularly considering ongoing legal proceedings[182] Employee and Operational Changes - As of March 31, 2023, the Group had 456 employees, with staff costs amounting to approximately HK$84.2 million, an increase from approximately HK$70.2 million in 2022[142][145] - Administrative expenses increased by approximately 3.2% from HK$81.7 million to HK$84.3 million, mainly due to one-off equity-settled share option expenses[105] - The carrying amount of loan receivables was nil as of March 31, 2023, down from HK$34.5 million in FY2022[96] - Impairment losses on trade receivables were approximately HK$5.9 million for FY2023, compared to nil in FY2022[97][100]

[Annual Results Announcement](index=1&type=section&id=Annual%20Results%20Announcement) The group reported a revenue decline and a shift from profit to loss for the year ended March 31, 2023, alongside a decrease in total assets and an increase in gearing ratio [Consolidated Statement of Comprehensive Income](index=2&type=section&id=Consolidated%20Statement%20of%20Comprehensive%20Income) For the year ended March 31, 2023, the Group's revenue decreased by 7.6% to HKD 3.998 billion, gross profit fell by 32.5% to HKD 578 million, and the company recorded a loss of HKD 53.62 million compared to a profit of HKD 31.51 million in the prior year Consolidated Statement of Comprehensive Income Summary (Thousand HKD) | Indicator | 2023 | 2022 | Year-on-Year Change | | :--- | :--- | :--- | :--- | | Revenue | 3,997,656 | 4,324,487 | -7.6% | | Gross Profit | 578,128 | 856,432 | -32.5% | | Operating Profit | 36,416 | 82,267 | -55.7% | | (Loss)/Profit Before Income Tax | (59,852) | 9,619 | - | | (Loss)/Profit for the Year | (53,623) | 31,514 | - | | (Loss)/Profit Attributable to Owners of the Company | (53,127) | 34,052 | - | Per Share (Loss)/Earnings | Indicator | 2023 | 2022 | | :--- | :--- | :--- | | Basic (Loss)/Earnings Per Share | (15.5) HK cents | 10.0 HK cents | | Diluted (Loss)/Earnings Per Share | (15.5) HK cents | 10.0 HK cents | [Consolidated Statement of Financial Position](index=4&type=section&id=Consolidated%20Statement%20of%20Financial%20Position) As of March 31, 2023, the Group's total assets decreased by 15.7% to HKD 3.986 billion, total liabilities were HKD 1.758 billion, and net assets were HKD 2.228 billion, with the gearing ratio increasing to 45.2% Consolidated Statement of Financial Position Summary (Thousand HKD) | Indicator | 2023 | 2022 | | :--- | :--- | :--- | | Non-current Assets | 2,253,825 | 2,693,652 | | Current Assets | 1,732,135 | 2,034,032 | | **Total Assets** | **3,985,950** | **4,727,684** | | Non-current Liabilities | 630,710 | 642,553 | | Current Liabilities | 1,127,330 | 1,359,808 | | **Total Liabilities** | **1,758,040** | **2,002,361** | | **Total Equity** | **2,227,920** | **2,725,323** | - As of March 31, 2023, the Group's gearing ratio (total borrowings and convertible bonds divided by total equity) increased to approximately **45.2%** from approximately 39.4% as of March 31, 2022[246](index=246&type=chunk) [Notes to Financial Statements](index=6&type=section&id=Notes%20to%20Financial%20Statements) This section provides detailed breakdowns of the Group's segment performance, revenue sources, changes in financial assets, and dividend policy [Segment Information](index=10&type=section&id=4.%20Segment%20Information) The Group's three segments are automobile distribution, non-automobile distribution, and property management and others, with automobile distribution remaining the primary revenue source at 87.5% of total revenue, while its segment result declined by 47.3% to HKD 231 million Segment Results (Thousand HKD) | Segment | 2023 | 2022 | | :--- | :--- | :--- | | **Automobile Distribution** | | | | Revenue | 3,497,614 | 3,800,194 | | Result | 230,559 | 437,642 | | **Non-Automobile Distribution** | | | | Revenue | 422,022 | 437,458 | | Result | (63,376) | (75,046) | | **Property Management and Others** | | | | Revenue | 78,020 | 86,835 | | Result | (40,252) | (202,461) | [Revenue](index=12&type=section&id=5.%20Revenue) Total revenue for the year decreased by 7.6% to HKD 3.998 billion, primarily due to an 8.2% decline in automobile sales to HKD 3.404 billion, while after-sales and property management services saw slight increases Revenue by Product or Service Line (Thousand HKD) | Revenue Source | 2023 | 2022 | | :--- | :--- | :--- | | Automobile Sales | 3,404,431 | 3,709,351 | | Other Goods Sales | 422,022 | 437,458 | | Provision of After-sales Services | 93,183 | 90,843 | | Provision of Property Management Services | 1,561 | 1,059 | | Interest Income from Lending Services | 1,942 | 5,652 | | Provision of Property Leasing Services | 74,517 | 80,124 | | **Total** | **3,997,656** | **4,324,487** | [Financial Assets at Fair Value Through Other Comprehensive Income](index=24&type=section&id=15.%20Financial%20Assets%20at%20Fair%20Value%20Through%20Other%20Comprehensive%20Income) As of March 31, 2023, financial assets at fair value through other comprehensive income significantly decreased to approximately HKD 158 million from HKD 320 million, mainly due to a decline in the market price of shares held in Bang & Olufsen A/S - The fair value of the Group's listed equity securities decreased from **HKD 320 million** to **HKD 158 million**, primarily invested in Denmark-listed Bang & Olufsen A/S[113](index=113&type=chunk) - These equity investments are designated as at fair value through other comprehensive income because the Group considers them strategic investments[99](index=99&type=chunk) [Dividends](index=26&type=section&id=19.%20Dividends) The Board did not recommend a final dividend for the year ended March 31, 2023, nor were any interim dividends distributed, to retain funds for existing business operations and development - The Company did not pay, declare, or propose any dividends for the years ended March 31, 2022, and 2023[146](index=146&type=chunk)[235](index=235&type=chunk) [Management Discussion and Analysis](index=27&type=section&id=Management%20Discussion%20and%20Analysis) This section provides management's insights into the Group's operational performance, strategic initiatives, and financial position, highlighting key drivers and future outlook [Chairman's Statement](index=27&type=section&id=Chairman%27s%20Statement) The Chairman's Statement highlights a revenue decline from approximately HKD 4.32 billion to HKD 4 billion and a shift from net profit to a loss attributable to owners of approximately HKD 53.1 million, while expressing confidence in the long-term growth potential of China's luxury market Performance Overview (HKD) | Indicator | Current Fiscal Year | Previous Fiscal Year | | :--- | :--- | :--- | | Revenue | Approx. 3,997,700,000 | Approx. 4,324,500,000 | | Gross Profit | Approx. 578,100,000 | Approx. 856,400,000 | | (Loss)/Net Profit Attributable to Owners | Approx. (53,100,000) | Approx. 34,100,000 | - The report cites research from Bain, PwC, and McKinsey, forecasting that China's luxury market will gradually recover and continue to grow, reaching a market size of **RMB 816 billion** by 2025, accounting for approximately **25%** of the global market share[120](index=120&type=chunk)[121](index=121&type=chunk)[122](index=122&type=chunk) [Business Review](index=29&type=section&id=Business%20Review) This section reviews the performance of each business segment, including automobile distribution, non-automobile distribution, other operations, and equity investments, detailing revenue changes and key operational highlights [Automobile Distribution](index=29&type=section&id=Automobile%20Distribution) Automobile distribution revenue decreased by 8.0% to approximately HKD 3.5 billion, with Lamborghini sales growth offset by declines in Bentley and Rolls-Royce, leading to a 42% drop in overall gross profit from car sales due to rising costs and falling average selling prices Ultra-Luxury Automobile Brand Sales Performance | Brand | Current Fiscal Year Sales Revenue (HKD) | Year-on-Year Change | Sales Volume (Units) | Year-on-Year Change | | :--- | :--- | :--- | :--- | :--- | | Lamborghini | Approx. 408 million | +10.6% | 111 | +19.4% | | Bentley | Approx. 1.587 billion | -7.0% | 455 | +2.9% | | Rolls-Royce | Approx. 1.409 billion | -13.8% | 202 | -10.2% | - After-sales service revenue increased by approximately **2.6%**, with gross profit margin significantly rising from **33.4%** to **50.8%**[127](index=127&type=chunk) [Non-Automobile Distribution](index=30&type=section&id=Non-Automobile%20Distribution) Non-automobile distribution revenue decreased by 3.5% to approximately HKD 422 million, with gross profit margin falling from 30.3% to 24.1% primarily due to increased inventory write-downs of approximately HKD 28 million, while Bang & Olufsen was the top contributor - Non-automobile distribution segment sales revenue decreased by **3.5%** from approximately **HKD 437.5 million** to approximately **HKD 422 million**[128](index=128&type=chunk) - Gross profit margin decreased from **30.3%** to **24.1%**, primarily due to increased inventory write-downs[156](index=156&type=chunk) - To expand its business, the Group collaborated with Chuanjiu Group to produce its own brand, "Longquan 1979"[157](index=157&type=chunk) [Other Businesses](index=31&type=section&id=Other%20Businesses) Other businesses revenue decreased by 10.2% to approximately HKD 78 million, with property management revenue down 6.3% due to reduced sub-lease income, while film and TV investment generated no revenue and faced legal issues, and lending interest income declined with ongoing default lawsuits - Property management business revenue decreased by **6.3%** to approximately **HKD 76.1 million**, with impairment provisions made for overdue sub-lease receivables[132](index=132&type=chunk) - Investment in film and television programs generated no revenue this year, and legal proceedings have commenced due to the producer's failure to repay[159](index=159&type=chunk) - Lending business interest income was approximately **HKD 1.9 million** (last year: HKD 5.7 million), with both loans in default and subject to legal proceedings[160](index=160&type=chunk) [Equity Investments](index=32&type=section&id=Equity%20Investments) The Group's 11.45% stake in B&O saw its share price drop by approximately 49.8%, significantly reducing the investment's book value with no dividends received, while the acquisition of a 2.97% stake in New Idea Group is seen as an opportunity to expand into high-end cigar and wine lounge club businesses - The Group holds **14,059,347** B&O shares, representing approximately **11.45%** of its total issued shares[136](index=136&type=chunk) - B&O's share price decreased from **DKK 19.35** to **DKK 9.72** per share, a decline of approximately **49.8%**[194](index=194&type=chunk) - The Group acquired **2,670,000** shares in New Idea Group, representing approximately **2.97%** of its shareholding[195](index=195&type=chunk)[164](index=164&type=chunk) [Recent Developments and Prospects](index=34&type=section&id=Recent%20Developments%20and%20Prospects) The Group maintains a cautious outlook, expecting stable automobile sales but facing downward pressure on profitability, a moderate decline in B&O product sales, continued inventory reduction in other non-automobile distribution, ongoing challenges in property management, and no new expansion or investment plans for lending and film businesses - The automobile business faces challenges from global economic uncertainty and a slower-than-expected economic recovery in China, with anticipated downward pressure on profitability[140](index=140&type=chunk) - In non-automobile distribution, B&O product sales are expected to decline moderately, while the watches, jewelry, and fine wine businesses will continue to seek opportunities to reduce inventory[197](index=197&type=chunk) - The property management business is expected to remain challenging; there are no new expansion or investment plans for the lending and film businesses in the next fiscal year[167](index=167&type=chunk) [Financial Review](index=35&type=section&id=Financial%20Review) This fiscal year saw revenue decline by 7.6% to HKD 3.998 billion due to exchange rate fluctuations and pandemic-affected auto sales, gross profit fell by 32.5% with margin dropping to 14.5%, finance costs rose by 32.5%, impairment losses were recorded on receivables, inventory turnover days increased to 139, and the gearing ratio rose to 45.2% Financial Metrics Changes | Indicator | 2023 Fiscal Year | 2022 Fiscal Year | Change | | :--- | :--- | :--- | :--- | | Revenue | HKD 3.998 billion | HKD 4.325 billion | -7.6% | | Gross Profit | HKD 578 million | HKD 856 million | -32.5% | | Gross Profit Margin | 14.5% | 19.8% | -5.3pp | | Finance Costs | HKD 96.3 million | HKD 72.6 million | +32.5% | | Inventory Turnover Days | 139 days | 109 days | +30 days | | Gearing Ratio | 45.2% | 39.4% | +5.8pp | - Impairment losses of approximately **HKD 12.7 million** were recorded on loans and interest receivable, and approximately **HKD 5.9 million** on trade receivables[171](index=171&type=chunk)[174](index=174&type=chunk) - As of March 31, 2023, the Group had pledged assets totaling approximately **HKD 1.67 billion** to secure bank financing[221](index=221&type=chunk) [Significant Events](index=42&type=section&id=Significant%20Events) This section details key corporate actions and events, including a significant acquisition, ongoing legal proceedings due to loan defaults, and the termination of a proposed share placement [Significant Acquisition](index=42&type=section&id=Significant%20Acquisition) In January 2023, the Group acquired an additional 26.1% equity interest in Beijing Wenfuxintiandi Property Co., Ltd. for RMB 81.56 million, increasing its stake to 96.5% in the company whose primary asset is a property in Chaoyang District, Beijing - The Group's indirect wholly-owned subsidiary agreed to acquire a **26.1%** equity interest in Beijing Wenfuxintiandi Property Co., Ltd. for a consideration of **RMB 81.56 million**[223](index=223&type=chunk) - Upon completion of the acquisition, the Group's shareholding in the target company increased to **96.5%**[252](index=252&type=chunk) [Borrower Default on Loan Agreements](index=42&type=section&id=Borrower%20Default%20on%20Loan%20Agreements) Borrowers of two loans, totaling HKD 58 million and HKD 32 million respectively, defaulted on principal and interest repayments, leading the Group to initiate legal proceedings against both borrowers and their guarantors, with one case restarting after a failed settlement and the other proceeding to judgment enforcement - For the first loan of **HKD 58 million**, the borrower failed to repay on the due date; although a settlement was reached, legal proceedings have been re-initiated due to non-fulfillment by the counterparty[225](index=225&type=chunk)[256](index=256&type=chunk) - For the second loan of **HKD 32 million**, the borrower failed to repay on the due date; the Group has obtained a judgment against the borrower and guarantor and is currently enforcing it[258](index=258&type=chunk)[230](index=230&type=chunk) [Proposed Placing of New Shares and Its Termination](index=44&type=section&id=Proposed%20Placing%20of%20New%20Shares%20and%20Its%20Termination) The company entered a placing agreement in September 2022 to place up to 538 million new shares, aiming to raise approximately HKD 49.1 million net, but the placing was terminated on October 19, 2022, by mutual agreement due to a key placee requiring more time for legal advice - The Company originally planned to place up to **538 million** new shares at **HKD 0.093** per share, with an expected net proceeds of approximately **HKD 49.1 million**[232](index=232&type=chunk) - The Company and the placing agent mutually agreed to terminate the placing due to a key placee requiring more time and the uncertainty of completion time[233](index=233&type=chunk) [Corporate Governance and Other Information](index=46&type=section&id=Corporate%20Governance%20and%20Other%20Information) This section outlines the Group's adherence to corporate governance standards, including a noted deviation regarding the Chairman and CEO roles, and provides details on the upcoming Annual General Meeting [Corporate Governance Practices](index=46&type=section&id=Corporate%20Governance%20Practices) The Group is committed to high corporate governance standards, complying with the Listing Rules' Corporate Governance Code during the reporting year, with the only deviation being Mr. Zheng Haojiang's dual role as Chairman and CEO, which the Board believes enhances decision-making efficiency - The Group has complied with the Corporate Governance Code throughout the year ended March 31, 2023, with the exception of Code Provision C.2.1[267](index=267&type=chunk) - Mr. Zheng Haojiang serves concurrently as the Chairman of the Board and Chief Executive Officer, an arrangement the Board believes ensures consistent leadership and decision-making efficiency, and will be reviewed periodically[237](index=237&type=chunk) [Annual General Meeting and Closure of Register of Members](index=47&type=section&id=Annual%20General%20Meeting%20and%20Closure%20of%20Register%20of%20Members) The upcoming Annual General Meeting is scheduled for September 5, 2023, at 4:30 PM, with the register of members to be closed from August 31 to September 5, 2023, to determine eligibility for attendance and voting - The Annual General Meeting is scheduled for **September 5, 2023, at 4:30 PM**[1](index=1&type=chunk) - The register of members will be closed from **August 31 to September 5, 2023** (both dates inclusive)[2](index=2&type=chunk)