[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)

Financial Performance - Revenue for the six months ended September 30, 2022, decreased by approximately 13.7% from HK$2,460,817,000 to HK$2,123,602,000 compared to the same period last year[8]. - Gross profit for the same period decreased from HK$421,214,000 to HK$337,233,000, with a gross profit margin of 15.9%[8][12]. - Profit attributable to owners of the Company for the six months ended September 30, 2022, was HK$6,934,000, down from HK$37,989,000 in the corresponding period of 2021[8]. - Earnings per share attributable to owners of the Company were HK$0.1 cent for the six months ended September 30, 2022, compared to HK$0.7 cent in the last financial period[8]. - Total comprehensive income for the period was HK$ (422,879,000), a decrease from HK$ 57,060,000 in the previous year, reflecting a significant decline[123]. - Profit for the period was HK$3,484,000, a significant decrease from HK$36,881,000 in 2021[121]. - The company reported a profit for the period of HK$6,934,000, despite the overall comprehensive income loss[132]. Revenue Breakdown - The automobile segment generated revenue of HK$1,825.1 million, accounting for 85.9% of total revenue, a decrease of 16.4% from HK$2,184.4 million in the previous year[57]. - Revenue from after-sales services increased to approximately HK$46.4 million, up about 3.2% from the previous period, with gross profit margin rising from approximately 32.1% to 47.6%[34]. - Non-auto dealership sales performance increased by approximately 8.7% to about HK$203.3 million, compared to HK$187.1 million in the previous period[35]. - Revenue from the others division, including property management and film investments, rose by approximately 9.9% to about HK$48.8 million, compared to HK$44.4 million in the previous period[42]. - The Group's total revenue from external customers was HK$2,123,602,000, with HK$1,871,507,000 from the auto dealership segment and HK$203,320,000 from the non-auto dealership segment[156]. Expenses and Costs - Selling and distribution costs decreased by approximately 7.2% compared to the same period last year[8]. - Administrative expenses increased by approximately 5.3% compared to the same period last year[8]. - Finance costs increased by approximately 49.8% to approximately HK$48.7 million, driven by increased borrowings for automobile inventory purchases and property acquisitions[70]. - Staff costs for the six months ended 30 September 2022 amounted to approximately HK$42.6 million, compared to approximately HK$27.4 million for the same period in 2021, reflecting a significant increase[85]. - The impairment of loan receivables and loan interest receivables was recorded at HK$7,665,000, indicating a new expense not present in the previous year[174]. Assets and Liabilities - Total assets decreased to HK$4,063,355, down from HK$4,727,684 in FY2022, representing a decline of approximately 14%[15]. - Total liabilities decreased to HK$1,778,796, down from HK$2,002,361 in FY2022, reflecting a reduction of about 11%[15]. - Net assets decreased to HK$2,284,559, down from HK$2,725,323 in FY2022, indicating a decline of approximately 16%[15]. - The carrying amount of loan receivables as of 30 September 2022 was approximately HK$18.4 million, down from HK$34.5 million as of 31 March 2022, with accumulated impairment increasing to HK$61.9 million[67]. - The Group's cash and cash equivalents as of 30 September 2022 were approximately HK$164.9 million, an increase from approximately HK$151.5 million as of 31 March 2022[78]. Market and Economic Conditions - The IMF forecasts global economic growth of 3.2% for 2022 and 2.9% for 2023, indicating a potential economic downturn[18]. - China's GDP growth rate for the first three quarters of 2022 was 3.0% year-on-year, with a significant recovery in the third quarter at 3.9%[19]. - The decrease in revenue was primarily due to a series of lockdown measures against COVID-19 in the PRC, which caused logistics restrictions and reduced foot traffic[58]. Shareholder Actions and Corporate Governance - No interim dividend was declared for the six months ended September 30, 2022[8]. - A placing agreement was entered into on 9 September 2022 to issue up to 538,000,000 new shares at a price of HK$0.093 per share, with expected gross proceeds of approximately HK$50 million[92]. - The placing was terminated on 19 October 2022 due to uncertainties regarding the completion of the placing and the background information of a major placee[97]. - The Board proposed a share consolidation on 23 November 2022, consolidating every 16 existing shares into one consolidated share[98]. Segment Performance - Lamborghini sales increased by approximately 19.2% to HK$214.6 million, up from HK$180.0 million in the corresponding period last year[26]. - Rolls-Royce sales decreased by approximately 13.7% to HK$856.6 million, down from HK$992.6 million in the corresponding period last year[28]. - Bentley sales decreased by approximately 25.5% to HK$754.0 million, down from HK$1,011.8 million in the corresponding period last year[29]. - The reportable segment results for the six months ended September 30, 2022, amounted to HK$102,806,000, with the auto dealership segment generating HK$130,010,000 and the non-auto dealership segment reporting a loss of HK$23,357,000[156]. Accounting and Reporting Standards - The interim financial statements were prepared in accordance with HKAS 34 and were authorized for issue on 30 November 2022[142]. - The Group has not applied any new standards or interpretations that are not yet effective for the current accounting period[145]. - The Group's financial statements are reviewed by the Company's audit committee but not audited by external auditors[142].

Financial Performance - Revenue for the financial year ended 31 March 2022 decreased by 4.4% from HK$4,525,762,000 to HK$4,324,487,000 compared to the last financial year[11]. - Gross profit for this financial year increased by 23.8% from HK$691,753,000 to HK$856,432,000[11]. - Profit attributable to owners of the Company for the financial year ended 31 March 2022 was HK$34,052,000, down from HK$37,527,000 in the previous year[11]. - Earnings per share attributable to owners of the Company were HK0.6 cent for this financial year, compared to HK0.7 cent in the last financial year[11]. - Other income, gains and losses for this financial year were losses of HK$131,599,000, compared to losses of HK$51,230,000 in 2021[11]. - Selling and distribution costs for this financial year increased by 8.0% compared to the same in the last financial year[11]. - Administrative expenses for this financial year increased by 6.6% compared to the same in the last financial year[11]. - Impairment loss recognized on loan receivables amounted to HK$56,390,000, compared to nil in 2021[11]. - No dividend was declared for this financial year, consistent with the previous year[11]. Revenue Breakdown - The auto dealership business accounted for approximately 87.9% of total revenue, remaining the major income driver[22]. - Revenue from ultra-luxury automobile distributorships decreased by approximately 6.8% to approximately HK$3,800 million compared to HK$4,076 million in the previous financial year[38]. - Revenue from the automobile segment decreased by approximately 7.2% to HK$3,709.4 million, contributing 85.8% to total revenue, while after-sales services revenue increased by 16.6% to HK$90.8 million[66]. - Revenue from after-sales services increased by approximately 16.6%, while gross profit margin decreased from approximately 38.4% to approximately 33.4%[42]. - Non-auto dealerships recorded a revenue increase of approximately 32.2% to approximately HK$437.5 million compared to approximately HK$331.0 million in the previous financial year[43]. Profitability Metrics - The Company continues to focus on improving gross profit margins, which increased to 19.8% in FY2022 from 15.2% in FY2021[15]. - The gross profit margin improved to 19.8% from 15.3%, indicating enhanced profitability[18]. - Overall gross profit from automobile sales increased by approximately 40% due to the rise in average selling prices across all three auto brands[41]. - Gross profit for the Group increased by approximately 23.8% to HK$856.4 million, with the gross profit margin rising from 15.3% to 19.8%[73]. Asset and Liability Changes - Total assets increased to HK$4,727.7 million from HK$4,086.2 million, reflecting a growth of approximately 15.7%[18]. - Total liabilities rose to HK$2,002.4 million from HK$1,426.9 million, an increase of approximately 40%[18]. - The gearing ratio increased to 39.4% from 17.2%, suggesting a higher level of financial leverage[18]. - The Group's inventories increased by approximately 95.5% to approximately HK$1,361.2 million as of March 31, 2022, from approximately HK$696.2 million as of March 31, 2021, with automobile inventories comprising approximately 56.2% of total inventories[94]. Market Trends and Outlook - The luxury goods market in China is expected to maintain a favorable growth momentum, driven by increasing consumer spending[32]. - The proportion of luxury automobile sales in China is predicted to exceed 20% of total automobile sales by 2030[31]. - The group anticipates moderate pressure on sales and profitability from the recovery of parallel imported luxury cars in the coming year[122]. - Strong demand for fast-moving consumer electronics has led to stable performance in the audio business, with cautious optimism for B&O product sales[122]. - The liquor business is expected to positively impact revenue due to new cooperation with a leading liquor manufacturer and the promotion of the company's own branded liquor[119]. Legal and Financial Issues - The company has a loan agreement for HK$58 million with a borrower who failed to repay the principal and accrued interest by the maturity date of March 4, 2022[103]. - The company entered into a second loan agreement for HK$32 million with another borrower, who also failed to repay the principal and accrued interest by the maturity date of March 22, 2022[105]. - Legal actions have been initiated against both borrowers in the High Court of Hong Kong to recover the outstanding loans and damages[107]. - The company has sought legal advice regarding the defaults on both loan agreements[107]. Corporate Governance - The company has received annual confirmations of independence from all Independent Non-executive Directors, who are considered independent[178]. - No significant transactions or contracts involving Directors with material interests were reported during the financial year[179]. - There are no Directors with interests in any business that competes directly or indirectly with the Group's business[180]. - The company is committed to ensuring compliance with the Model Code for Securities Transactions by Directors of Listed Issuers[199].

Financial Performance - Revenue for the six months ended September 30, 2021, increased by approximately 33.0% to HK$2,460,817,000 from HK$1,850,031,000 in the corresponding period last year[7] - Gross profit for the same period rose from HK$286,206,000 to HK$421,214,000[7] - Profit attributable to owners of the Company for the six months ended September 30, 2021, was HK$37,989,000, compared to HK$31,413,000 in the same period of 2020[7] - Earnings per share attributable to owners of the Company were HK$0.7 cent for the six months ended September 30, 2021, up from HK$0.6 cent in the previous financial period[7] - Operating profit decreased to HK$50,501,000, down 21% from HK$64,007,000 in the previous year[78] - Profit for the period was HK$36,881,000, compared to HK$30,958,000 in the same period of 2020, reflecting a 19% increase[78] - Total comprehensive income for the period was HK$57,060,000, a decrease of 60% compared to HK$142,405,000 in the same period last year[80] - Profit for the period attributable to owners of the Company was HK$37,989,000, up from HK$31,413,000, representing a 21% increase[80] Expenses and Costs - Other income, gains, and losses for the six months ended September 30, 2021, recorded losses of HK$87,606,000, compared to gains of HK$17,787,000 in 2020[7] - Selling and distribution costs increased by approximately 17.6% compared to the same period last year[7] - Administrative expenses for the six months ended September 30, 2021, increased by approximately 19.9% compared to the same period last year[7] - Selling and distribution costs increased to HK$238,757,000 from HK$202,985,000 year-on-year[78] - Administrative expenses rose to HK$44,350,000, compared to HK$37,001,000 in the previous year[78] - Financing costs decreased by approximately 6.7% to approximately HK$32.5 million, attributed to a decrease in borrowings for purchasing automobile inventories[51] Assets and Liabilities - Total assets increased to HK$4,283,876, up from HK$4,086,152, representing a growth of approximately 4.8% year-over-year[14] - Total liabilities rose to HK$1,533,796, compared to HK$1,426,856, indicating an increase of about 7.5%[14] - Net assets reached HK$2,750,080, reflecting a growth of 3.4% from HK$2,659,296[14] - Current ratio decreased slightly to 1.63 from 1.71, indicating a reduction in short-term liquidity[14] - Gearing ratio increased to 22.5%, up from 17.2%, suggesting a higher level of financial leverage[14] - Non-current assets totaled HK$2,482,756,000, an increase from HK$2,575,366,000 as of March 31, 2021[81] - Current assets increased to HK$1,801,120,000 from HK$1,510,786,000, marking a 19.2% rise[81] - Inventories rose significantly to HK$930,216,000, up from HK$696,224,000, indicating a 33.5% increase[81] - Total equity attributable to owners of the Company was HK$2,713,081,000, compared to HK$2,654,955,000, reflecting a growth of 2.2%[83] Market Trends and Outlook - China's luxury goods market is projected to grow, contributing €60 billion or 21% of the global market, making it the second largest after the US[16] - The luxury market in China accounts for over 35% of global luxury spending, with a rising trend expected[16] - The emergence of Gen Z and millennials as key consumers is reshaping the luxury market dynamics in China[16] - Economic growth in China is expected to slow to 5.5% in 2022 from an anticipated 8.2% in 2021, indicating potential challenges ahead[16] - The Group anticipates stable performance in automobile sales for the second half of the financial year[39] - The property management business is expected to continue declining due to tightening real estate policies in China and increased competition[43] Business Segments Performance - Rolls-Royce Motor Cars delivered 1,380 motor cars in Q1 2021, a 62% increase compared to the same period in 2020, surpassing the previous record set in 2019[22] - Bentley's sales increased by approximately 28.4% to HK$1,011.8 million, with 277 units sold, representing a 19.4% increase from 232 units sold last year[22] - Lamborghini recorded a 11.4% increase in unit sales to 49 units, with total sales revenue of approximately HK$180.0 million, up 26.7% from HK$142.1 million last year[22] - Revenue from after-sales services increased to approximately HK$45.0 million, a 9.2% rise compared to the previous year, but gross profit margin decreased from 45.9% to 32.1%[22] - Non-auto dealership division sales increased by approximately 24.5% to HK$187.1 million, compared to HK$150.3 million in the previous financial period[26] - Revenue from the property management business decreased by approximately 18.2% to HK$41.4 million, down from HK$50.6 million in the previous financial period[28] - The film business generated no revenue during the financial period due to delays caused by the COVID-19 Delta variant[29] Shareholder Information - No interim dividend was declared for the six months ended September 30, 2021[7] - The company did not recommend the payment of an interim dividend for the six months ended September 30, 2021, as it aims to reserve more capital for future opportunities[70] - The total number of shares under the New Scheme as of September 30, 2021, was 297,982,885, representing 10% of the issued share capital[72] Legal Matters - On September 9, 2021, the Plaintiff's action against the Company and the Secretary was dismissed by the High Court[66] - The Company received a writ of summons claiming damages of approximately HK$143 million, but the preliminary legal advice indicated that the claim lacked sufficient particulars[66]

Financial Performance - Revenue for the financial year ended 31 March 2021 increased by 31.4% from HK$3,443,430,000 to HK$4,525,762,000 compared with the last financial year[9] - Gross profit for this financial year increased by 23.6% from HK$559,885,000 to HK$691,753,000[9] - Profit attributable to owners of the Company for the financial year ended 31 March 2021 was HK$37,527,000, up from HK$30,283,000 in 2020[9] - Earnings per share attributable to owners of the Company were HK$0.7 cent for this financial year, compared with HK$0.6 cent in the last financial year[9] - The Group's revenue increased from HK$3,443.4 million in 2020 to HK$4,525.8 million in 2021, representing a growth of approximately 31.5%[24] - Gross profit rose from HK$559.9 million in 2020 to HK$691.8 million in 2021, marking an increase of about 23.5%[24] - Net profit attributable to owners increased to HK$37.5 million in 2021 from HK$30.3 million in 2020, reflecting a growth of approximately 23.5%[24] Expenses and Costs - Selling and distribution costs for this financial year increased by 22.0% compared with the same in the last financial year[9] - Administrative expenses for this financial year decreased by 9.6% compared with the same in the last financial year[9] - Other income, gains and losses for this financial year were losses of HK$51,230,000, compared to gains of HK$5,506,000 in 2020[9] - Finance costs decreased by approximately 21.4% from approximately HK$82.1 million to approximately HK$64.5 million, attributed to reduced borrowing for automobile inventories[60] Assets and Liabilities - Total assets grew to HK$4,086.2 million in 2021 from HK$3,597.1 million in 2020, an increase of about 13.6%[19] - Total liabilities decreased from HK$1,594.1 million in 2020 to HK$1,426.9 million in 2021, a reduction of approximately 10.5%[19] - The Group's total liabilities were approximately HK$2,659.3 million as of 31 March 2021, compared to approximately HK$2,002.9 million in the previous year[61] - The Group's cash at banks and in hand increased to approximately HK$246.5 million from approximately HK$116.0 million, mainly due to a decrease in inventory levels[61] Market and Business Segments - The Group's auto business remains the primary income driver, contributing approximately 90% of total revenue[24] - The ultra-luxury automobile distributorships of Bentley, Lamborghini, and Rolls-Royce recorded a revenue increase of approximately 35% to approximately HK$4,076 million, compared to approximately HK$3,016 million in the previous financial year[38] - Bentley achieved total sales of approximately HK$2,005 million, representing a 75% increase from approximately HK$1,146 million in the previous financial year, with 586 units sold, a 70% increase from 345 units[38] - Rolls-Royce sales rose to approximately HK$1,553 million, reflecting a 17% increase from approximately HK$1,326 million, with 233 units sold, a 13% increase from 207 units[38] - Lamborghini recorded a revenue increase of approximately 1% to approximately HK$440.8 million, with 130 units sold, a 13% increase from 115 units[40] Dividends and Share Capital - No dividend was declared for this financial year, consistent with 2020[9] - The company raised approximately HK$50 million from the issuance of 318,500,000 new ordinary shares at a price of HK$0.157 per share, fully utilized for the subscription of B&O Rights Shares[89] - As of March 31, 2021, the total number of shares issued by the Company is 5,471,953,447[164] - The company's distributable reserves amount to approximately HK$359,173,000, a decrease from HK$365,527,000 in 2020[134] Future Outlook and Challenges - The global semiconductor shortage poses a threat to the supply of automobiles by manufacturers, despite stable luxury car sales[104] - The financial and operational activities of the group have returned to a healthy status due to effective COVID-19 control measures in Mainland China[103] - The Group will adopt a prudent approach in its money lending business and will not increase investment amounts in the upcoming financial year[107] - The film investment segment is not expected to contribute substantially to the Group in the upcoming financial year[107] Corporate Governance - The board of directors includes both executive and independent non-executive members, with specific appointments and resignations noted[145] - The Company has received annual confirmations of independence from all Independent Non-executive Directors[150] - There are no significant transactions or contracts involving Directors with material interests during the financial year[150] - The Company has arranged appropriate liability insurance coverage for its directors and officers[159]

Financial Performance - Revenue for the six months ended September 30, 2020, increased by approximately 5.8% to HK$1,850,031,000 from HK$1,748,357,000 in the corresponding period last year[10]. - Gross profit for the same period decreased from HK$310,312,000 to HK$286,206,000, resulting in a gross profit margin decline from 17.7% to 15.5%[10][25]. - Profit attributable to owners of the Company for the six months ended September 30, 2020, was HK$31,413,000, down from HK$38,732,000 in the same period of 2019[13]. - Earnings per share attributable to owners of the Company were HK0.6 cent, compared to HK0.8 cent in the last financial period[13]. - Total comprehensive income for the period was HK$111,447, compared to a loss of HK$233,050 in 2019[161]. - Operating profit for the period was HK$64,007, a decline of 6.8% from HK$68,787 in 2019[159]. - Profit before income tax remained stable at HK$29,154, slightly up from HK$29,145 in the previous year[159]. Revenue Breakdown - Sales of automobiles contributed HK$1,607.8 million, accounting for 86.9% of total revenue, with a growth of 9.4% year-on-year[75]. - Bentley sales increased by approximately 84.8% to HK$787.9 million, with 232 units sold, a 74.4% increase compared to the previous year[35]. - Rolls-Royce sales decreased by approximately 10.5% to HK$677.8 million, with 104 units sold, a 12.6% decrease compared to the previous year[39]. - Lamborghini experienced a 50.4% drop in sales to approximately HK$142.1 million, with unit sales down 38.9% to 44 units[40]. - Revenue from after-sales services decreased by approximately 27.2% to HK$41.2 million, with gross profit margin declining from 52.7% to 45.9%[41]. - Non-auto dealership sales increased by approximately 1.8% to HK$150.3 million, with gross profit margin slightly decreasing from 35.8% to 35.0%[42]. Expenses and Costs - Selling and distribution costs decreased by approximately 3.4% compared to the corresponding period last year[11]. - Administrative expenses decreased by approximately 25.0% compared to the same period last year[12]. - Financing costs decreased by approximately 11.9% to HK$34.9 million, attributed to reduced borrowing for automobile inventories and lower interest expenses on lease liabilities[86]. - Staff costs for the six months ended September 30, 2020, amounted to approximately HK$24.3 million, down from HK$32.4 million for the same period in 2019[117]. - Employee costs for the six months ended September 30, 2020, were approximately HK$24.3 million, down from HK$32.4 million for the same period in 2019[119]. Assets and Liabilities - Total assets as of September 30, 2020, were HK$3,621,518,000, an increase from HK$3,597,058,000[23]. - Total liabilities decreased to HK$1,424,494,000 from HK$1,594,148,000[23]. - The Group's cash and cash equivalents increased to approximately HK$216.0 million as of September 30, 2020, compared to HK$116.0 million as of March 31, 2020[98]. - The Group's borrowings decreased by approximately 37.3% to HK$473.6 million as of September 30, 2020, down from HK$755.4 million as of March 31, 2020[101]. - The Group's inventories decreased by approximately 28.4% from HK$912.9 million as of March 31, 2020, to HK$654.0 million as of September 30, 2020[107]. Dividends and Share Capital - No interim dividend was declared for the six months ended September 30, 2020[13]. - The Group has resolved not to recommend the payment of an interim dividend for the six months ended September 30, 2020, to reserve more capital for future opportunities[149]. - The company completed a placing of 318,500,000 new ordinary shares at a price of HK$0.157, raising a total of HK$50,004,000[172]. - The total number of shares under the New Share Option Scheme as of September 30, 2020, was 297,982,885, representing 10% of the issued share capital[154]. Market Trends and Outlook - China's GDP grew by 4.9% in Q3 2020, with IMF predicting a 1.9% growth for the year and 8.2% for 2021[29]. - Chinese demand for luxury goods is projected to grow by up to 30% in 2020, driven by high-income consumers[31]. - The percentage of Chinese consumers making global luxury purchases is expected to rise from 40% to 50% over the next decade[33]. - The luxury market in China is witnessing a shift towards an omni-channel shopping experience, with online purchases increasing to 30%[31]. - The Group expects luxury auto supply to stabilize in the last quarter of FY2021 if the COVID-19 pandemic is effectively controlled[62]. Segment Information - The Group operates in three reportable segments: Auto dealership, Non-auto dealership, and Others, each managed separately due to differing resource and marketing needs[196][197]. - The Auto dealership segment includes sales of branded automobiles such as Bentley, Lamborghini, and Rolls-Royce, along with related after-sales services[196]. - The Non-auto dealership segment encompasses sales of branded watches, jewelry, fine wines, audio equipment, and other luxury goods[197]. - The Others segment provides property management services, catering services, property leasing services, and film-related businesses, including production and investment in films[200]. Accounting Policies and Changes - The Group's accounting policies were not significantly impacted by the new or amended HKFRSs effective from April 1, 2020[190]. - The Group has early adopted amendments to HKFRS 16 related to COVID-19 rent concessions, allowing for practical expedient accounting for qualifying concessions received during the interim reporting period[193]. - The definition of "material" has been aligned across all HKFRS Standards and the Conceptual Framework, incorporating supporting requirements in HKAS 1[190].

Financial Performance - Revenue for the financial year ended March 31, 2020, decreased by 7.6% from HK$3,724,845,000 to HK$3,443,430,000 compared to the previous financial year[9]. - Gross profit for this financial year decreased by 0.9% from HK$564,937,000 to HK$559,885,000[9]. - Other income, gains, and losses decreased by 93.9% from HK$90,634,000 to HK$5,506,000[9]. - Profit attributable to owners of the Company for the financial year was HK$30,283,000, down from HK$97,429,000 in 2019[10]. - Earnings per share attributable to owners of the Company were HK0.6 cent, compared to HK2.0 cents in the previous financial year[11]. - The Group's revenue decreased from HK$3,725 million to HK$3,443 million, representing a decline of approximately 7.6%[25]. - Gross profit for the financial year decreased slightly from HK$564.9 million to HK$559.9 million, a decrease of about 0.9%[25]. - Net profit attributable to owners was HK$30.3 million, down from HK$97.4 million in the previous financial year, indicating a decline of approximately 68.9%[25]. - The Group's revenue for the year ended 31 March 2020 was approximately HK$3,443.4 million, representing a decrease of approximately 7.6% compared to HK$3,724.8 million in the previous year[73]. Assets and Liabilities - Total assets decreased from HK$3,933,651,000 in 2019 to HK$3,597,058,000 in 2020[20]. - Net assets decreased from HK$2,373,194,000 in 2019 to HK$2,002,910,000 in 2020[20]. - The Group's total liabilities as of March 31, 2020, were approximately HK$1,594.1 million, compared to approximately HK$1,560.5 million as of March 31, 2019[88]. - The Group's borrowings as of March 31, 2020, were approximately HK$755.4 million, representing a decrease of approximately 13.6% from approximately HK$873.9 million as of March 31, 2019[104]. - The gearing ratio increased to approximately 37.7% as of March 31, 2020, compared to approximately 36.8% as of March 31, 2019[105]. - Cash at banks and in hand as of March 31, 2020, was approximately HK$116.0 million, a decrease from approximately HK$185.2 million as of March 31, 2019[89]. Business Segments - The auto business remained the major income driver, accounting for approximately 87.6% of the Group's total business[25]. - Revenue from ultra-luxury automobile distributorships decreased by approximately 8.8% to HK$3,016 million compared to HK$3,308 million in the previous year[38]. - Lamborghini recorded a significant sales growth of approximately 71%, with total sales reaching HK$437.6 million compared to HK$256.2 million in the previous financial year[38]. - A total of 115 units of Lamborghini were sold, representing an increase of approximately 117% compared to 53 units sold in the previous financial year[38]. - Bentley's sales decreased by approximately 18% to HK$1,146 million, down from HK$1,397 million in the previous financial year, with unit sales dropping by 21% to 345 vehicles[40][42]. - Rolls-Royce recorded a sales decline of approximately 14% to HK$1,326 million, while unit sales increased by approximately 2% to 207 vehicles[44][49]. Market Trends - The luxury goods market in China is expected to recover, with Chinese consumers projected to account for nearly 50% of the market by 2025[26]. - Online luxury purchases have increased during the crisis, potentially representing up to 30% of the market by 2025[26]. - The luxury car market in China saw a year-on-year decline of 16.4% to 795,000 units in the first four months of 2020 due to the pandemic[31]. Expenses and Costs - Selling and distribution costs increased by approximately 0.3%, mainly due to higher depreciation for property, plant, and equipment[80]. - Administrative expenses decreased by approximately HK$65.8 million, attributed to the absence of expenses related to acquisitions and a decrease in amortization of intangible assets[81]. - The gross profit margin for after-sales services decreased from approximately 44.3% to 41.6%, reflecting a decline of about 6.5% in revenue[46][50]. Future Outlook - The Group expects a short-term impact on luxury car sales due to COVID-19, with recovery anticipated in the second half of FY2021[130]. - Sales of B&O products are expected to see a moderate drop in the first half of FY2021, with a return to normal in the second half[131]. - The pandemic has caused significant delays in film investments and projects, with expectations that this segment will not contribute significantly to the Group in the upcoming fiscal year[135]. Corporate Governance - The Directors do not recommend the payment of a final dividend for the year ended March 31, 2020, in order to reserve more capital for business operations and development[140]. - The Company has received annual confirmations of independence from all Independent Non-executive Directors, affirming their independence[185]. - The Company has arranged appropriate directors' and officers' liability insurance coverage for its directors and officers[195].

Financial Performance - Revenue for the six months ended September 30, 2019, decreased by approximately 1% to HK$1,748,357,000 from HK$1,759,937,000 in the corresponding period last year[10]. - Gross profit increased from HK$244,441,000 to HK$310,312,000 for the same period, indicating a significant improvement[11]. - Profit attributable to owners of the Company rose to HK$38,732,000 compared to HK$9,310,000 in the previous year, reflecting a strong performance[13]. - Earnings per share attributable to owners of the Company increased to HK$0.8 cent from HK$0.2 cent in the last financial period[13]. - Operating profit increased significantly to HK$68,787, compared to HK$21,024 in the same period of 2018, marking a growth of 226%[133]. - Profit for the period attributable to owners of the Company was HK$35,281, a substantial increase from HK$7,776 in the prior year[140]. - Total comprehensive income for the period was a loss of HK$197,769, compared to a loss of HK$172,689 in the same period of 2018[139]. Assets and Liabilities - Total assets as of September 30, 2019, were HK$3,995,386,000, up from HK$3,933,651,000 in the previous interim period[21]. - Total liabilities increased to HK$1,842,805,000 from HK$1,560,457,000, indicating a rise in financial obligations[21]. - Cash and cash equivalents decreased to approximately HK$143.3 million, primarily due to repayment of borrowings during the financial period[97]. - The Group's borrowings decreased by approximately 14.6% to HK$746.3 million as of September 30, 2019, from HK$873.9 million as of March 31, 2019, mainly due to repayment of borrowings[101]. - The gearing ratio decreased to approximately 34.7% as of September 30, 2019, compared to 36.8% as of March 31, 2019[102]. - Current assets as of 30 September 2019 totaled HK$2,212,260, an increase from HK$2,028,449 as of 31 March 2019[145]. - Net current assets decreased to HK$598,489 from HK$695,856 as of 31 March 2019[147]. Revenue Breakdown - Revenue from the automobile segment decreased by 4.2% to HK$1,526.8 million, primarily due to lower sales of automobiles and after-sales services[73]. - Revenue from after-sales services decreased to approximately HK$56.6 million, a decline of about 6.9% compared to the same period last year[45]. - Revenue from the audio equipment division increased by approximately 1.05% to HK$116.1 million[51]. - Revenue from property management and catering services surged by approximately 217% to approximately HK$74 million[57]. - Sales performance of the non-auto division increased by approximately 3.1% to approximately HK$147.6 million[48]. Market Conditions - China's GDP growth slowed to a record low of 6.2% in Q2 2019, impacting the overall economic environment[25]. - The economic growth rate in China fell to a historical low of 6.2% in Q2 2019, down from 6.4% in Q1 2019[27]. - The Chinese luxury goods market is expected to grow by 18-20% year-over-year, driven by local consumer spending[31][33]. - Chinese luxury spending is projected to double to 1.2 trillion renminbi by 2025, contributing 65% of global market growth[32][34]. - The global personal luxury goods market is expected to grow by 4-6% in 2019, reaching €271-276 billion, with strong performance driven by Chinese consumers[31][33]. Cost Management - The gross profit margin improved to 17.7% from 13.9% in the previous interim period, showcasing better cost management[22]. - Selling and distribution costs and administrative expenses decreased by approximately 3.8% compared to the same period last year, reflecting operational efficiency[12]. - Selling and distribution costs increased by approximately 7.3%, mainly due to additional consumption levy and operating expenses from new businesses[83]. - Financing costs surged by approximately 205% from HK$13.0 million to HK$39.6 million, driven by increased borrowing for property acquisitions and lease liabilities[85]. Investments and Acquisitions - The Group acquired 6,519,358 shares in Bang & Olufsen A/S for approximately HK$494 million, representing a 15.09% stake[60]. - As of September 30, 2019, the Group's investment in Bang & Olufsen represented approximately 6.34% of total assets[61]. - The share price of Bang & Olufsen decreased by approximately 33% during the six-month period ended September 30, 2019[65]. Dividends and Shareholder Returns - No interim dividend was declared for the six months ended September 30, 2019, consistent with the previous year[14]. - The Group did not recommend the payment of an interim dividend for the six months ended September 30, 2019, as it aims to reserve more capital for future opportunities[121]. Employee and Operational Metrics - Staff costs for the six months ended September 30, 2019, amounted to approximately HK$32.4 million, compared to HK$26.3 million for the same period in 2018[115]. - As of September 30, 2019, the Group had 591 employees, an increase from 530 employees as of March 31, 2019[115]. - The total number of shares under the new share option scheme as of September 30, 2019, was 297,982,885 shares, representing 10% of the issued share capital[124]. Cash Flow and Financial Position - Net cash generated from operating activities for the six months ended 30 September 2019 was HK$196,521,000, an increase of 77.8% compared to HK$110,503,000 in 2018[155]. - Net cash used in investing activities amounted to HK$77,618,000, a significant decrease from HK$430,391,000 in the same period last year[155]. - The company reported a net decrease in cash and cash equivalents of HK$151,221,000 for the period, compared to a net increase of HK$287,666,000 in the previous year[155]. Accounting Changes - The impact of adopting HKFRS 16, Leases, is summarized in the interim financial report, indicating changes in accounting policies[166]. - The adoption of HKFRS 16 resulted in the recognition of right-of-use assets amounting to HK$251,208,000 for property, plant, and equipment[174]. - Right-of-use assets for investment properties were reported at HK$478,990,000[177]. - Lease liabilities recognized as of April 1, 2019, totaled HK$479,401,000[189]. - The Group applied the cumulative effect approach for HKFRS 16, adjusting the opening balance of retained earnings without restating comparative information[181].