Financial Services Division 2025 環境、社會及 管治報告 Toys Division 環境、社會及管治報告2025 目錄 | | | | 頁次 | | --- | --- | --- | --- | | 緒言 | | | 2 | | 報告準則 | | | 2 | | 報告原則 | | | 2 | | 有關本集團 | | | 2 | | 董事會聲明 | | | 3 | | 可持續管治 | | | 3 | | 環境、社會及管治風險管理 | | | 3 | | 持份者的參與及重要性 | | | 4 | | 回饋及聯絡方式 | | | 4 | | A. | 環境 | | 4 | | A1. | | 排放物 | 5 | | A2. | | 資源使用 | 7 | | A3. | | 環境及天然資源 | 7 | | A4. | | 環保 | 8 | | B. | 社會 | | 9 | | B1. | | 僱傭 | 9 | | B2. | | 健康與安全 | 11 | | B3. | | 發展及培訓 | 11 | | B4. | | 勞工準則 | 12 | | B5. | | 供應鏈管理 | ...

[Company Information](index=3&type=section&id=%E5%85%AC%E5%B8%B8%E8%B3%87%E6%96%99) This section provides key company information including basic registration details, board and committee member lists, company secretary, auditor, principal bankers, and share registrar [Company Basic Information](index=3&type=section&id=%E5%85%AC%E5%B8%B8%E8%B3%87%E6%96%99) This chapter provides key company information including basic registration details, board and committee member lists, company secretary, auditor, principal bankers, and share registrar - The report lists the members of the Board of Directors, including executive and independent non-executive directors, and the four committees: Audit, Remuneration, Nomination, and Corporate Governance[4](index=4&type=chunk) - The company's auditor is BDO Limited, Hong Kong, and its stock code is **1348**[4](index=4&type=chunk)[5](index=5&type=chunk) [Chairman's Statement](index=4&type=section&id=%E4%B8%BB%E5%B8%AD%E5%A0%B1%E5%91%8A%E6%9B%B8) The Chairman's Statement reviews the year's operating performance, highlighting the Group's resilience amidst a complex global economic landscape, with the Toys segment maintaining operational stability through stringent cost management and the Financial Services segment focusing on prudent resource allocation and deepening client relationships under limited resources [Chairman's Statement](index=4&type=section&id=%E4%B8%BB%E5%B8%AD%E5%A0%B1%E5%91%8A%E6%9B%B8) The Chairman's Statement reviews the year's operating performance, highlighting the Group's resilience amidst a complex global economic landscape, with the Toys segment maintaining operational stability through stringent cost management and the Financial Services segment focusing on prudent resource allocation and deepening client relationships under limited resources - The Group's core businesses are toy manufacturing and sales (Toys segment) and financial services (Financial Services segment)[6](index=6&type=chunk) - The Toys segment faces challenges including squeezed profit margins, supply chain adjustments, and demand fluctuations, but maintained operational stability through stringent cost management and process optimization[6](index=6&type=chunk) - The Financial Services segment, due to limited business development capital, strategically prioritized prudent resource allocation over aggressive expansion[6](index=6&type=chunk) - In the future, the Board will focus on stringent capital management for both segments, with the Toys segment emphasizing operational excellence and precise innovation, and the Financial Services segment focusing on compliance and controllable growth[7](index=7&type=chunk) [Corporate Governance Report](index=5&type=section&id=%E4%BC%81%E6%A5%AD%E7%AE%A1%E6%B2%BB%E5%A0%B1%E5%91%8A) This report details the company's commitment to high corporate governance standards, adherence to the HKEX Corporate Governance Code, and the structure and responsibilities of its Board and various committees [Corporate Governance Practices and the Board](index=5&type=section&id=%E4%BC%81%E6%A5%AD%E7%AE%A1%E6%B2%BB%E5%B8%B8%E8%A6%8F) The company is committed to maintaining high corporate governance standards and has adopted the HKEX Corporate Governance Code, complying with all applicable code provisions during the reporting period, with the Board responsible for leading and overseeing the Group while delegating daily operations to executive directors and senior management - The company has adopted the HKEX Corporate Governance Code and complied with all applicable code provisions during the current year[10](index=10&type=chunk) - The Board is responsible for leading and controlling the Group, with daily responsibilities delegated to executive directors and senior management[13](index=13&type=chunk) - As of March 31, 2025, the Board comprises eight directors, including four executive directors and four independent non-executive directors[14](index=14&type=chunk) [Board Committees](index=7&type=section&id=%E8%91%A3%E4%BA%8B%E5%A7%94%E5%93%A1%E6%9C%83) The Board has established four committees—Audit, Remuneration, Nomination, and Corporate Governance—each with clear terms of reference and regular meetings, detailing their members, primary duties, and annual work summaries including financial review, remuneration policy review, director nomination, and governance policy monitoring - The Board has established four committees: Audit Committee, Remuneration Committee, Nomination Committee, and Corporate Governance Committee[21](index=21&type=chunk) Board and Committee Attendance | Director Name | Board Attendance | Audit Committee Attendance | Remuneration Committee Attendance | Nomination Committee Attendance | | :--- | :--- | :--- | :--- | :--- | | Mr. Poon Pak Kei | 4/4 | Not Applicable | 2/2 | 2/2 | | Mr. Chu Wan Ming | 4/4 | Not Applicable | 2/2 | 2/2 | | Mr. Hau Yiu Po | 4/4 | Not Applicable | Not Applicable | Not Applicable | | Ms. Tang Yuen Ching | 4/4 | Not Applicable | Not Applicable | Not Applicable | | Mr. Leung Po Wing | 4/4 | 4/4 | 2/2 | 2/2 | | Mr. Chan Siu Wing | 4/4 | 4/4 | 2/2 | 2/2 | | Mr. Wong Wah On | 4/4 | 4/4 | 2/2 | 2/2 | | Ms. Yeung Wai Ling | 2/2 | Not Applicable | Not Applicable | Not Applicable | - The Audit Committee reviewed the consolidated financial statements, oversaw internal control and risk management systems, and recommended the re-appointment of the auditor during the year[25](index=25&type=chunk)[27](index=27&type=chunk)[28](index=28&type=chunk) Fees Paid to Auditor | Services Provided | Fees Paid/Payable (Thousand HKD) | | :--- | :--- | | Audit Services – Statutory Audit | 950 | | Non-Audit Services: | | | – Agreed-upon Procedures | 80 | | **Total** | **1,030** | [Shareholder Communication and Rights](index=12&type=section&id=%E8%88%87%E8%82%A1%E6%9D%B1%E5%8F%8A%E6%8A%95%E8%B3%87%E8%80%85%E9%80%9A%E8%A8%8A) The company values communication with shareholders and has established a dividend policy, clarifying specific procedures and rights for shareholders to convene extraordinary general meetings, convey inquiries to the Board, and propose resolutions at general meetings - The company has adopted a dividend policy, with dividend payments at the discretion of the Board, based on factors such as earnings, cash flow, and financial position[46](index=46&type=chunk) - Shareholders holding not less than one-tenth of the paid-up share capital have the right to request an extraordinary general meeting[48](index=48&type=chunk) - The report clarifies the procedures for shareholders to nominate director candidates, with the nomination period from the day after the notice of the general meeting is issued until 7 days before the meeting[51](index=51&type=chunk)[52](index=52&type=chunk) [Management Discussion and Analysis](index=14&type=section&id=%E7%AE%A1%E7%90%86%E5%B1%A4%E8%A8%8E%E8%AB%96%E5%8F%8A%E5%88%86%E6%9E%90) This section provides an in-depth review of the Group's business and financial performance for the year, outlining challenges faced by the Toys segment and the Financial Services segment's growth despite capital limitations, along with future strategies [Business Review](index=14&type=section&id=%E6%A5%AD%E5%8B%99%E5%9B%9E%E9%A1%A7) This year, the Group's core businesses remained the Toys segment and the Financial Services segment, with the Toys segment facing multiple challenges including geopolitical tensions, global economic uncertainty, rising costs, and stringent ESG requirements, while the Financial Services segment, despite revenue growth, recorded a loss due to low capital levels and high operating costs - The Toys segment faces a complex operating environment, including US-China geopolitical tensions, global economic uncertainty (high inflation, interest rate hikes), conservative customer orders, rising costs (labor, materials, logistics), and stringent ESG requirements[59](index=59&type=chunk)[60](index=60&type=chunk) - The Financial Services segment's revenue increased from HKD **10.8 million** in the previous year to HKD **19.9 million** in the current year, but still recorded a net loss before tax of HKD **8.2 million** due to low capital levels and high operating costs[61](index=61&type=chunk) [Financial Review](index=15&type=section&id=%E8%B2%A1%E5%8B%99%E5%9B%9E%E9%A1%A7) The Group's total revenue decreased by **59.4%** year-on-year to HKD **71.9 million** this year, primarily due to a **68.7%** decline in Toys segment revenue, which could not be offset by the **83.4%** growth in Financial Services segment revenue, resulting in a narrowed net loss from HKD **74.0 million** to HKD **17.9 million**, mainly benefiting from the absence of the previous year's HKD **45.5 million** goodwill impairment loss Group Financial Performance | Indicator | Current Year (Thousand HKD) | Previous Year (Thousand HKD) | Change | | :--- | :--- | :--- | :--- | | **Group Total Revenue** | 71,933 | 177,259 | -59.4% | | **Group Net Loss** | 17,871 | 73,958 | -75.8% | Segment Performance | Segment | Revenue (Current Year, Million HKD) | Revenue (Previous Year, Million HKD) | Revenue Change | Segment Profit/Loss (Current Year, Million HKD) | | :--- | :--- | :--- | :--- | :--- | | **Toys Segment** | 52.1 | 166.4 | -68.7% | 0.4 (Profit) | | **Financial Services Segment** | 19.9 | 10.8 | +83.4% | (10.4) (Loss) | - The significant reduction in net loss is primarily due to the absence of the goodwill impairment loss of approximately HKD **45.5 million** in the Financial Services segment from the previous year[69](index=69&type=chunk) - As of March 31, 2025, the Group's cash and cash equivalents were HKD **25.6 million** (compared to HKD **57.5 million** last year), and the debt-to-equity ratio increased from **66.1%** to approximately **100%**[77](index=77&type=chunk) [Outlook and Strategy](index=20&type=section&id=%E5%89%8D%E6%99%AF) Looking ahead, the Toys segment will focus on cost control, innovation, and strategic management of its manufacturing network to address challenges, while the Group has decided to dispose of its securities brokerage and institutional trading business to preserve working capital, with future financial services focusing on investment and financial advisory businesses requiring less operating capital - Key to the Toys segment's future success lies in continuous innovation (materials, processes), deepening value-added services, implementing ESG agenda, and strategically managing its manufacturing network[97](index=97&type=chunk) - To preserve working capital, the company entered into an agreement on June 6, 2025, to dispose of its securities brokerage and institutional trading businesses, which have higher operating costs and capital requirements[98](index=98&type=chunk) - Following the disposal, the Group will continue its financial services business through Crosby Asset Management, focusing on investment and financial advisory services under Type 4 (advising on securities) and Type 9 (asset management) licenses, significantly reducing working capital requirements[98](index=98&type=chunk) [Biographies of Directors and Senior Management](index=21&type=section&id=%E8%91%A3%E4%BA%8B%E5%8F%8A%E9%AB%98%E7%B4%9A%E7%AE%A1%E7%90%86%E5%B1%A4%E5%B1%A5%E6%AD%B7) This section provides detailed personal biographies of the company's executive directors, independent non-executive directors, and senior management, including their age, position, professional experience, academic background, and positions held in other listed companies [Biographies of Directors and Senior Management](index=21&type=section&id=%E8%91%A3%E4%BA%8B%E5%8F%8A%E9%AB%98%E7%B4%9A%E7%AE%A1%E7%90%86%E5%B1%A4%E5%B1%A5%E6%AD%B7) This section provides detailed personal biographies of the company's executive directors, independent non-executive directors, and senior management, including their age, position, professional experience, academic background, and positions held in other listed companies - This chapter provides detailed biographies of the company's directors, including Mr. Chu Wan Ming, Mr. Poon Pak Kei, Mr. Hau Yiu Po, Ms. Tang Yuen Ching, Mr. Leung Po Wing, Mr. Chan Siu Wing, Mr. Wong Wah On, and Ms. Yeung Wai Ling[100](index=100&type=chunk)[102](index=102&type=chunk)[106](index=106&type=chunk)[108](index=108&type=chunk) [Directors' Report](index=24&type=section&id=%E8%91%A3%E4%BA%8B%E6%9C%83%E5%A0%B1%E5%91%8A) This report provides an overview of the company's principal activities, financial performance for the year, the Board's recommendation not to declare a final dividend, and details on the company's distributable reserves [Business and Financial Overview](index=24&type=section&id=%E4%B8%BB%E8%A6%81%E6%A5%AD%E5%8B%99) This chapter outlines the company's principal activities as investment holding and management services, presents the financial results for the current year, states the Board's recommendation not to declare a final dividend, and details the company's distributable reserves - The principal activities of the company are investment holding and the provision of management services[113](index=113&type=chunk) - The Board recommends not to declare a final dividend for the current year[114](index=114&type=chunk) - As of March 31, 2025, the company's distributable reserves were approximately HKD **34.0 million**[116](index=116&type=chunk) [Risk Management and Compliance](index=25&type=section&id=%E6%9C%AC%E9%9B%86%E5%9C%98%E9%9D%A2%E5%B0%8D%E7%9A%84%E4%B8%BB%E8%A6%81%E9%A2%A8%E9%9A%AA%E5%92%8C%E4%B8%8D%E7%A2%BA%E5%AE%9A%E6%80%A7) The report elaborates on the Group's key risks, including financial risks (credit, liquidity, etc.), market risks, seasonality, reliance on major customers, talent competition, regulatory risks, and environmental and social risks, along with measures taken such as cybersecurity protection and environmental policies to manage these risks - The Group faces key risks including financial risks, market risks, seasonality of product demand, reliance on major customers and suppliers, talent competition, regulatory risks, and environmental and social risks[125](index=125&type=chunk)[126](index=126&type=chunk)[127](index=127&type=chunk)[128](index=128&type=chunk) - During the current year, sales to the Group's largest customer and top five customers accounted for **74.7%** and **93.8%** of total turnover respectively, indicating a high concentration risk[139](index=139&type=chunk) - The Group has implemented cybersecurity measures, including installing firewalls and using antivirus software, and has a compliance manual to protect customer data[133](index=133&type=chunk)[134](index=134&type=chunk) [Directors, Shareholders, and Shareholding Structure](index=29&type=section&id=%E8%91%A3%E4%BA%8B) This chapter lists the directors during the reporting period and their changes, discloses the interests of directors and major shareholders in the company's shares, and details the company's share option scheme, including grant dates, exercise prices, number of outstanding share options, and their key terms Directors' Interests in Shares | Director Name | Total Shares Held | Percentage of Issued Share Capital | | :--- | :--- | :--- | | Mr. Poon Pak Kei | 20,796,000 | 1.41% | | Mr. Chu Wan Ming | 40,295,800 | 2.73% | | Mr. Hau Yiu Po | 14,540,000 | 0.99% | | Ms. Tang Yuen Ching | 1,200,000 | 0.08% | | Mr. Leung Po Wing | 2,800,000 | 0.19% | | Mr. Chan Siu Wing | 2,800,000 | 0.19% | | Mr. Wong Wah On | 1,400,000 | 0.10% | Major Shareholders | Major Shareholder Name | Total Shares Held | Percentage of Shareholding | | :--- | :--- | :--- | | Smart Investor Holdings Limited | 482,864,000 | 32.75% | | Silver Pointer Limited | 106,880,000 | 7.25% | | Benefit Global Limited | 218,463,111 | 14.82% | - The company has a share option scheme, and as of the reporting date, the total number of shares that may be issued due to outstanding share options is **65,643,800** shares, representing **4.5%** of the issued share capital[154](index=154&type=chunk)[162](index=162&type=chunk) [Independent Auditor's Report](index=38&type=section&id=%E7%8D%A8%E7%AB%8B%E6%A0%B8%E6%95%B8%E5%B8%AB%E5%A0%B1%E5%91%8A) The auditor, BDO Limited, Hong Kong, believes that the consolidated financial statements fairly and truly reflect the Group's financial position and performance in accordance with Hong Kong Financial Reporting Standards, specifically highlighting "Impairment assessment of non-financial assets" as a key audit matter due to significant management judgment involved [Independent Auditor's Report](index=38&type=section&id=%E7%8D%A8%E7%AB%8B%E6%A0%B8%E6%95%B8%E5%B8%AB%E5%A0%B1%E5%91%8A) The auditor, BDO Limited, Hong Kong, believes that the consolidated financial statements fairly and truly reflect the Group's financial position and performance in accordance with Hong Kong Financial Reporting Standards, specifically highlighting "Impairment assessment of non-financial assets" as a key audit matter due to significant management judgment involved - The auditor issued an unmodified opinion, stating that the consolidated financial statements truly and fairly reflect the Group's financial position and performance[185](index=185&type=chunk) - A key audit matter is "Impairment assessment of non-financial assets," particularly for property, plant and equipment and right-of-use assets of the "Financial Services" cash-generating unit, as their determination involves significant management judgment and estimates[187](index=187&type=chunk)[188](index=188&type=chunk) [Consolidated Financial Statements](index=42&type=section&id=%E7%B6%9C%E5%90%88%E8%B2%A1%E5%8B%99%E5%A0%B1%E8%A1%A8) This section presents the Group's consolidated financial statements, including the statement of profit or loss and other comprehensive income, statement of financial position, statement of cash flows, and detailed notes to the financial statements [Consolidated Statement of Profit or Loss and Other Comprehensive Income](index=42&type=section&id=%E7%B6%9C%E5%90%88%E6%90%8D%E7%9B%8A%E5%8F%8A%E5%85%B6%E4%BB%96%E5%85%A8%E9%9D%A2%E6%94%B6%E7%9B%8A%E8%A1%A8) This year, the Group recorded revenue of HKD **71.933 million**, a significant decrease from HKD **177.259 million** last year, with the loss for the year narrowing significantly to HKD **17.871 million** from HKD **73.958 million**, and basic and diluted loss per share at HKD **1.21** cents Consolidated Statement of Profit or Loss and Other Comprehensive Income | Indicator (Thousand HKD) | 2025 | 2024 | | :--- | :--- | :--- | | Revenue | 71,933 | 177,259 | | Administrative expenses | (44,558) | (48,062) | | Goodwill impairment loss | – | (45,508) | | Loss for the year and total comprehensive income | (17,871) | (73,958) | | Basic and diluted loss per share (HK cents) | (1.21) | (5.02) | [Consolidated Statement of Financial Position](index=43&type=section&id=%E7%B6%9C%E5%90%88%E8%B2%A1%E5%8B%99%E7%8B%80%E6%B3%81%E8%A1%A8) As of March 31, 2025, the Group's total assets were HKD **164.654 million**, total liabilities were HKD **126.357 million**, and net assets were HKD **38.297 million**, a decrease from HKD **56.168 million** in the previous year, with net current assets at HKD **72.691 million** Consolidated Statement of Financial Position | Indicator (Thousand HKD) | As at March 31, 2025 | As at March 31, 2024 | | :--- | :--- | :--- | | **Total Assets** | 164,654 | 176,551 | | Total Non-Current Assets | 5,926 | 5,782 | | Total Current Assets | 158,728 | 170,769 | | **Total Liabilities** | 126,357 | 120,383 | | Total Current Liabilities | 86,037 | 82,675 | | Total Non-Current Liabilities | 40,320 | 37,708 | | **Net Assets** | 38,297 | 56,168 | [Consolidated Statement of Cash Flows](index=46&type=section&id=%E7%B6%9C%E5%90%88%E7%8F%BE%E9%87%91%E6%B5%81%E9%87%8F%E8%A1%A8) This year, net cash generated from operating activities was HKD **11.947 million**, net cash used in investing activities was HKD **36.000 million**, primarily due to placement of time deposits, and net cash used in financing activities was HKD **7.923 million**, resulting in a net decrease in cash and cash equivalents of HKD **31.976 million**, with an ending balance of HKD **25.561 million** Consolidated Statement of Cash Flows | Indicator (Thousand HKD) | 2025 | 2024 | | :--- | :--- | :--- | | Net cash generated from operating activities | 11,947 | 23,683 | | Net cash used in investing activities | (36,000) | (19,863) | | Net cash used in financing activities | (7,923) | (8,231) | | Net decrease in cash and cash equivalents | (31,976) | (4,411) | | Cash and cash equivalents at year end | 25,561 | 57,537 | [Notes to the Consolidated Financial Statements](index=48&type=section&id=%E7%B6%9C%E5%90%88%E8%B2%A1%E5%8B%99%E5%A0%B1%E8%A1%A8%E9%99%84%E8%A8%BB) The notes section elaborates on the basis of financial statement preparation, significant accounting policies, and accounting judgments and estimates, covering segment information, revenue composition, details of various assets and liabilities (such as property, goodwill, receivables, convertible notes), related party transactions, contingent liabilities, and post-reporting period events - The Group has two reportable segments: "Manufacturing and Sales of Toys" and "Financial Services"[265](index=265&type=chunk) - Revenue from the two largest customers in the Toys segment totaled HKD **50.492 million**, accounting for approximately **70.2%** of the Group's total revenue[279](index=279&type=chunk) - As of March 31, 2025, the Group had outstanding bills payable with a principal amount of HKD **31.0 million** and convertible notes with a liability component carrying amount of HKD **7.295 million**[331](index=331&type=chunk)[336](index=336&type=chunk) - The Group has a contingent liability involving a lawsuit against its subsidiary, Crosby Securities Limited, for which the directors believe the outflow of resources is not yet probable at this stage, thus no provision has been made[383](index=383&type=chunk)[385](index=385&type=chunk) - Post-reporting period event: On June 6, 2025, the company entered into an agreement to dispose of its entire equity interest in Crosby Asia Limited, which holds the securities brokerage business, for an estimated consideration of approximately HKD **11.2 million**[386](index=386&type=chunk) [Five-Year Financial Summary](index=105&type=section&id=%E4%BA%94%E5%B9%B4%E8%B2%A1%E5%8B%99%E6%91%98%E8%A6%81) This chapter provides a summary of the Group's performance, assets, and liabilities over the past five financial years, showing a continuous decline in Group revenue since 2021 and a year-on-year decrease in net assets [Five-Year Financial Summary](index=105&type=section&id=%E4%BA%94%E5%B9%B4%E8%B2%A1%E5%8B%99%E6%91%98%E8%A6%81) This chapter provides a summary of the Group's performance, assets, and liabilities over the past five financial years, showing a continuous decline in Group revenue since 2021 and a year-on-year decrease in net assets Five-Year Financial Summary | Indicator (Thousand HKD) | 2025 | 2024 | 2023 | 2022 | 2021 | | :--- | :--- | :--- | :--- | :--- | :--- | | **Revenue** | 71,933 | 177,259 | 341,801 | 448,655 | 485,788 | | **Loss for the year** | (17,871) | (73,958) | (72,321) | (94,374) | (35,628) | | **Total Assets** | 164,654 | 176,551 | 243,876 | 381,507 | 438,842 | | **Net Assets** | 38,297 | 56,168 | 126,464 | 198,710 | 293,084 |

[Financial Highlights](index=1&type=section&id=Financial%20Highlights) [Core Financial Metrics](index=1&type=section&id=Core%20Financial%20Metrics) Total revenue in FY2025 significantly decreased to HKD 71.9 million, while net loss narrowed to HKD 17.9 million, primarily due to the absence of prior year's goodwill impairment | Metric | FY2025 | FY2024 | Year-on-Year Change | | :--- | :--- | :--- | :--- | | **Total Revenue** | 71.9 Million HKD | 177.3 Million HKD | -59.4% | | Toy Segment Revenue | 52.1 Million HKD | 166.4 Million HKD | -68.7% | | Financial Services Segment Revenue | 19.9 Million HKD | 10.8 Million HKD | +83.4% | | **Net Loss** | 17.9 Million HKD | 74.0 Million HKD | -75.8% | - Key reasons for the significant reduction in net loss include the non-recurrence of approximately **HKD 45.5 million** goodwill impairment loss in the financial services segment from the previous year[4](index=4&type=chunk) - Other income, gains, and losses increased by approximately **HKD 12.8 million**, mainly from office equipment service income and gains on asset disposal[4](index=4&type=chunk) - Reduced sales in the toy segment led to a corresponding decrease in selling expenses by approximately **HKD 2.3 million**[4](index=4&type=chunk) - The Board recommended no final dividend for the year ended March 31, 2025[4](index=4&type=chunk) [Consolidated Financial Statements](index=3&type=section&id=Consolidated%20Financial%20Statements) [Consolidated Statement of Profit or Loss and Other Comprehensive Income](index=3&type=section&id=Consolidated%20Statement%20of%20Profit%20or%20Loss%20and%20Other%20Comprehensive%20Income) The Group recorded a loss of HKD 17.9 million in FY2025, significantly narrowed from the prior year, with basic and diluted loss per share at HKD 1.21 cents | Item | 2025 (Thousand HKD) | 2024 (Thousand HKD) | | :--- | :--- | :--- | | Revenue | 71,933 | 177,259 | | Loss before income tax expense | (17,871) | (73,968) | | Loss for the year | (17,871) | (73,958) | | Loss attributable to owners of the Company | (17,872) | (73,941) | | Loss per share (HK cents) | (1.21) | (5.02) | [Consolidated Statement of Financial Position](index=4&type=section&id=Consolidated%20Statement%20of%20Financial%20Position) As of March 31, 2025, total assets were HKD 164.7 million, net assets decreased to HKD 38.3 million, and net current assets declined, indicating weakened liquidity | Item | 2025 (Thousand HKD) | 2024 (Thousand HKD) | | :--- | :--- | :--- | | Total non-current assets | 5,926 | 5,782 | | Total current assets | 158,728 | 170,769 | | Total current liabilities | 86,037 | 82,675 | | **Net current assets** | **72,691** | **88,094** | | Total non-current liabilities | 40,320 | 37,708 | | **Net assets** | **38,297** | **56,168** | [Consolidated Statement of Changes in Equity](index=6&type=section&id=Consolidated%20Statement%20of%20Changes%20in%20Equity) Total equity decreased to HKD 38.3 million as of March 31, 2025, primarily due to the HKD 17.9 million operating loss recorded during the year - Equity attributable to owners of the Company decreased from **HKD 56,110 thousand** at the beginning of the period to **HKD 38,238 thousand** at the end of the period, mainly due to the loss of **HKD 17,872 thousand** recorded during the year[9](index=9&type=chunk) [Notes to the Financial Information](index=7&type=section&id=Notes%20to%20the%20Financial%20Information) [Accounting Policies and Basis of Preparation](index=7&type=section&id=Accounting%20Policies%20and%20Basis%20of%20Preparation) Financial statements are prepared under HKFRS; new standards had no material impact, and the Group voluntarily changed the profit or loss presentation to the 'nature of expense' method retrospectively - The application of amendments to Hong Kong Financial Reporting Standards in the current year had no significant impact on the Group's financial performance and position[11](index=11&type=chunk) - The Group voluntarily changed the presentation of the consolidated statement of profit or loss and other comprehensive income from the "function of expense" method to the "nature of expense" method, as management believes this provides more reliable and relevant information to financial statement users[18](index=18&type=chunk) [Operating Segment Information](index=10&type=section&id=Operating%20Segment%20Information) The Group operates in toy manufacturing and financial services; toy revenue declined but was profitable, while financial services revenue grew but remained loss-making, with significant customer concentration risk Segment Results (FY2025) | Segment | External Revenue (Thousand HKD) | Segment Profit/(Loss) (Thousand HKD) | | :--- | :--- | :--- | | Manufacturing and Sales of Toys | 52,079 | 357 | | Financial Services | 19,854 | (10,424) | External Revenue by Geographical Region | Region | 2025 (Thousand HKD) | 2024 (Thousand HKD) | | :--- | :--- | :--- | | North America | 41,690 | 102,726 | | Western Europe | 6,011 | 28,164 | | Others | 24,232 | 46,869 | - Revenue from major customers A and B totaled **HKD 50,492 thousand**, accounting for **96.9%** of toy segment revenue and **70.2%** of the Group's total revenue, indicating a high degree of customer concentration[37](index=37&type=chunk) [Revenue and Other Income](index=16&type=section&id=Revenue%20and%20Other%20Income) Total revenue was HKD 71.9 million, primarily from toy sales and financial services, with other income significantly increasing to HKD 14.2 million from new service income and asset disposals Revenue Composition | Revenue Source | 2025 (Thousand HKD) | 2024 (Thousand HKD) | | :--- | :--- | :--- | | Manufacturing and Sales of Toys | 52,079 | 166,431 | | Financial Services | 19,854 | 10,828 | | **Total** | **71,933** | **177,259** | - Other income, gains, and losses increased from **HKD 1.4 million** in the prior year to **HKD 14.2 million**, with key contributions including office facility service income of **HKD 4,555 thousand**, gain on disposal of property, plant and equipment of **HKD 3,100 thousand**, and waived placement commission of **HKD 3,956 thousand**[42](index=42&type=chunk) [Key Expenses and Taxation](index=18&type=section&id=Key%20Expenses%20and%20Taxation) Annual loss narrowed due to the absence of prior year's HKD 45.5 million goodwill impairment, with no deferred tax assets recognized due to unutilized tax losses and uncertain future profits - The recognition of **HKD 45,508 thousand** in goodwill impairment loss and **HKD 585 thousand** in intangible asset impairment loss in the prior year, which did not recur in the current year, was a key factor in the significant reduction of the loss[43](index=43&type=chunk) - Finance costs slightly decreased from **HKD 5.5 million** to **HKD 5.1 million**[43](index=43&type=chunk) - Due to the inability to predict future profit sources, the Group did not recognize deferred tax assets for **HKD 258,919 thousand** in unutilized tax losses[46](index=46&type=chunk) [Balance Sheet Items Details](index=21&type=section&id=Balance%20Sheet%20Items%20Details) Goodwill and intangible assets of financial services were fully impaired in FY2024; inventories and trade receivables significantly decreased, consistent with the toy business contraction - As of March 31, 2024, due to the underperformance of the financial services segment (Crosby Securities and Crosby Asset Management), full impairment provisions were made for all goodwill (**HKD 184,783 thousand**) and intangible assets (**HKD 585 thousand**), resulting in a carrying value of zero as of March 31, 2025[50](index=50&type=chunk)[51](index=51&type=chunk)[57](index=57&type=chunk) | Item | 2025 (Thousand HKD) | 2024 (Thousand HKD) | | :--- | :--- | :--- | | Inventories | 3,271 | 16,428 | | Trade receivables | 2,358 | 24,954 | - For the year ended March 31, 2025, the financial services segment recognized expected credit losses of **HKD 4,452 thousand** and fully wrote off the related receivables[61](index=61&type=chunk) [Debt and Equity](index=29&type=section&id=Debt%20and%20Equity) The Group finances through promissory notes and convertible notes, with new notes issued in May 2023 to redeem old ones, while the share capital structure remained stable - On May 16, 2023, the Group issued promissory notes totaling **HKD 31.0 million** and convertible notes totaling **HKD 9.0 million** to redeem convertible notes issued in 2020[68](index=68&type=chunk)[69](index=69&type=chunk) - As of March 31, 2025, the issued ordinary share capital was **1,474,232,000 shares**, consistent with the prior year, with no changes during the year[74](index=74&type=chunk) - As of March 31, 2025, there were **65,643,800** unexercised share options with a weighted average remaining contractual life of approximately **1.3 years**[85](index=85&type=chunk) [Management Discussion and Analysis](index=38&type=section&id=Management%20Discussion%20and%20Analysis) [Business Review](index=38&type=section&id=Business%20Review) The toy segment faced declining revenue and profit due to various pressures, while the financial services segment, despite revenue growth, remained loss-making due to capital constraints - Challenges faced by the toy segment include uncertainties from US-China geopolitical tensions and trade wars, high inflation, interest rate hikes, and recession concerns impacting consumer sentiment, leading to conservative customer orders[87](index=87&type=chunk)[88](index=88&type=chunk) - Rising costs for labor, compliance, and eco-friendly materials are squeezing profit margins, alongside increasingly stringent customer requirements for ESG standards[88](index=88&type=chunk) - Although financial services segment revenue grew, it faced issues such as low capital levels, reliance on commission income, and insufficient working capital, which limited business expansion and resulted in continuous losses[89](index=89&type=chunk) [Financial Review](index=39&type=section&id=Financial%20Review) The Group's total revenue decreased by 59.4%, while net loss narrowed by 75.8%, driven by a significant decline in toy segment revenue and improved financial services segment performance Group Overall Financial Performance | Metric | FY2025 | FY2024 | Change | | :--- | :--- | :--- | :--- | | Revenue | 71.9 Million HKD | 177.3 Million HKD | -59.4% | | Net Loss | 17.9 Million HKD | 74.0 Million HKD | -75.8% | - Toy segment revenue decreased by **68.7%** to **HKD 52.1 million**, with gross margin falling from **10.3%** to **7.0%**, primarily due to reduced orders from major customers in North America and Western Europe[90](index=90&type=chunk)[93](index=93&type=chunk) - Financial services segment revenue increased by **83.4%** to **HKD 19.9 million**, and segment loss decreased from **HKD 67.1 million** to **HKD 10.4 million**, mainly due to the absence of goodwill and intangible asset impairment losses in the current year[91](index=91&type=chunk) [Liquidity and Financial Resources](index=44&type=section&id=Liquidity%20and%20Financial%20Resources) Despite prudent management, liquidity weakened with cash decreasing to HKD 25.6 million, and the debt-to-equity ratio significantly increased to 100% Key Financial Ratios | Metric | March 31, 2025 | March 31, 2024 | | :--- | :--- | :--- | | Cash and cash equivalents | 25.6 Million HKD | 57.5 Million HKD | | Debt-to-equity ratio | 100% | 66.1% | | Current ratio | 1.8 | 2.1 | [Significant Events and Outlook](index=45&type=section&id=Significant%20Events%20and%20Outlook) Post-period, the Group agreed to dispose of its securities brokerage business to optimize costs, focusing on lower capital advisory services, while the toy business faces ongoing trade and macroeconomic challenges - Subsequent to the reporting period, on June 6, 2025, the Company entered into an agreement to dispose of its wholly-owned subsidiary, Crosby Asia Limited (engaged in securities brokerage business), to preserve working capital[119](index=119&type=chunk)[122](index=122&type=chunk) - Upon completion of the disposal, the Group will continue to engage in Type 4 (advising on securities) and Type 9 (asset management) regulated activities through Crosby Asset Management, which require significantly less working capital[122](index=122&type=chunk) - Outlook: The toy segment faces severe impacts from US-China trade friction, soaring tariffs, and subdued customer demand, making business challenging; the Group's immediate priority is cost optimization[121](index=121&type=chunk)[122](index=122&type=chunk) - Crosby Securities is involved in a lawsuit, but the Company has reached an indemnity agreement with the buyer for potential losses, capped at **HKD 10 million**, which directors believe will not have a material adverse effect on the financial position[108](index=108&type=chunk)[109](index=109&type=chunk) [Corporate Governance and Other Information](index=48&type=section&id=Corporate%20Governance%20and%20Other%20Information) [Compliance and Governance](index=48&type=section&id=Compliance%20and%20Governance) The Company largely complies with the Corporate Governance Code, with the only deviation being the non-separation of Chairman and CEO roles, whose duties are jointly undertaken by executive directors - The Company has complied with all applicable provisions of the Corporate Governance Code throughout the year, except for Code Provision C.2.1[124](index=124&type=chunk) - The deviation is that the roles of Chairman and Chief Executive Officer are not separated, and the CEO position has remained vacant, with its duties jointly undertaken by the executive directors[125](index=125&type=chunk)

Group 1 - The company has entered into an agreement with Emperor Securities Investment Holdings Limited to sell all issued shares and loans of Crosby Asia for an estimated price of approximately HKD 11.2 million [1] - Following the completion of the sale, Crosby Asia and its subsidiaries will no longer be part of the company's consolidated financial statements, which will help streamline operations and reduce financial burdens [1][2] - The decision to sell Crosby Asia is driven by its continuous losses and the need for significant capital injection to restore profitability, particularly in light of increased operational costs and regulatory capital requirements [2] Group 2 - The estimated net proceeds from the sale are expected to be around HKD 10.9 million, which will provide additional working capital to strengthen the company's financial position [2] - The sale is seen as a strategic move to alleviate high operational costs associated with Crosby Asia, allowing the company to reallocate financial resources more effectively [2] - The company aims to enhance its financial resilience, especially considering challenges posed by the US-China trade war, which has impacted the toy division [2]

Financial Position - As of September 30, 2024, the group had no contingent liabilities, consistent with March 31, 2024[1]. - The group had no significant investments in any other companies, apart from investments in subsidiaries, as of September 30, 2024[2]. - As of September 30, 2024, total non-current assets amounted to HKD 8,959 million, an increase of 55.5% from HKD 5,782 million as of March 31, 2024[17]. - Current assets totaled HKD 193,622 million, up 13.3% from HKD 170,769 million as of March 31, 2024[17]. - Total liabilities increased to HKD 113,053 million, up 36.8% from HKD 82,675 million as of March 31, 2024[17]. - The net current assets decreased to HKD 80,569 million, down 8.7% from HKD 88,094 million as of March 31, 2024[17]. - The total liabilities of the group increased to HKD 156,557,000 as of September 30, 2024, compared to HKD 120,383,000 as of March 31, 2024, indicating a rise of about 30%[56]. - The company’s cash and cash equivalents decreased to HKD 35,654,000 as of September 30, 2024, down from HKD 67,662,000 in the previous period, reflecting a decline of approximately 47.4%[49]. - The debt-to-equity ratio increased to approximately 81.9% as of September 30, 2024, compared to 66.1% as of March 31, 2024, due to a decrease in total equity[158]. Revenue and Profitability - Total revenue for the six months ended September 30, 2024, was HKD 58,309 million, down 54.2% from HKD 127,149 million for the same period in 2023[26]. - The company reported a segment loss of HKD 5,568 million for the financial services division, compared to a profit of HKD 652 million in the toy manufacturing and sales segment[26]. - The company reported a loss attributable to owners of HKD 10,230,000 for the six months ended September 30, 2024, compared to a loss of HKD 10,091,000 for the same period in 2023, reflecting an increase in loss of approximately 1.38%[38]. - The company recorded a total comprehensive loss of HKD (10,091,000) for the period, compared to a loss of HKD (9,927,000) in the previous period, representing a decline of approximately 1.63%[48]. - The net loss for the group was approximately HKD 10.1 million, an increase of about HKD 0.2 million year-on-year, primarily due to reduced revenue from the toy division[131]. Toy Division Performance - The toy division faces challenges such as trade tariffs and rising cost pressures, necessitating careful evaluation of new investments to enhance innovation and sustainability[5]. - The company will continue to strictly control costs and review opportunities in new markets or customers to promote growth in the toy division[5]. - The toy division experienced a revenue decline, with major customer orders decreasing by approximately HKD 37.1 million from North America, HKD 14.6 million from Western Europe, and HKD 8.2 million from the Central America and Caribbean regions[109]. - The toy division experienced a significant revenue decline of approximately HKD 72.8 million, contributing to an overall revenue decrease of about HKD 68.8 million for the group[127]. - The trade payables for the toy division decreased by approximately HKD 3.4 million or 32.3% to about HKD 7.2 million, mainly due to reduced procurement and service costs[135]. Financial Services Performance - The financial services segment reported total revenue of HKD 10.5 million, a 60.6% increase from HKD 6.6 million in the previous period[104]. - The financial services segment reported a profit of HKD 3,645,000, contrasting with a loss of HKD (8,887,000) in the previous period, indicating a turnaround in performance[53]. - The financial services division's trade receivables remained stable at approximately HKD 5.7 million as of September 30, 2024, compared to HKD 6.3 million on March 31, 2024[134]. Cost Management - The company incurred employee benefits expenses of HKD 17,156 million, an increase of 5.4% from HKD 16,276 million in the previous year[35]. - The total employee costs for the period were approximately HKD 17.2 million, an increase from HKD 16.3 million in the previous year[141]. - The financing costs decreased by 20.1% to approximately HKD 2.5 million, primarily due to a reduction in the actual interest on convertible bonds[129]. - The company has a total of 12,896,000 stock options remaining for employees, after accounting for 400,000 that lapsed during the period[11]. Management and Governance - The board of directors has undergone changes, with Mr. Liu and Ms. Li resigning from their positions on November 9, 2023[12]. - The company has not recognized any share-based payment expenses for unvested and unexercised share options as of September 30, 2024[88]. - The company’s remuneration policy is regularly reviewed by the remuneration committee and is based on employee position, responsibilities, and performance[195]. - The company has adopted the standard code for securities trading by directors, ensuring compliance throughout the reporting period[197]. Market Conditions - The overall economic environment in mainland China and Hong Kong remains sluggish, with Hong Kong's GDP growth forecasted to slow from 3.2% in 2023 to around 2.4% in 2024[100]. - The average daily trading volume in the stock market during the period was approximately HKD 113 billion[100]. - The company faces competitive threats from rising manufacturing centers in Southeast Asia due to ongoing trade tensions between Western markets and China[102]. - The overall liquidity and new capital inflow into Hong Kong are hindered by market sentiment and economic conditions[100]. Shareholder Information - The company has a total of 482,864,000 shares held by Smart Investor Holdings Limited, representing 32.75% of the total shares[200]. - Benefit Global Limited holds 149,563,111 shares, accounting for 10.15% of the total shares[200]. - The company has no current share incentive plans in place[174]. - The company has not purchased, sold, or redeemed any of its listed securities during the six months ending September 30, 2024[167].

Revenue Performance - The group's revenue for the six months ended September 30, 2024, was approximately HKD 58.3 million, a decrease of about HKD 68.8 million or 54.1% compared to the same period last year[2]. - The toy segment's revenue decreased by approximately HKD 72.8 million, while the financial services segment's revenue increased by approximately HKD 4.0 million, representing a year-on-year decrease of about 60.4% and an increase of about 60.6%, respectively[2]. - For the six months ended September 30, 2024, external revenue was HKD 58,309 thousand, a decrease from HKD 127,149 thousand for the same period in 2023, representing a decline of approximately 54%[30]. - The manufacturing and sales segment generated revenue of HKD 47,765 thousand, while the financial services segment contributed HKD 10,544 thousand, indicating a significant drop in both segments compared to the previous year[30]. - The financial services segment reported total revenue of HKD 10.5 million, a 60.6% increase from HKD 6.6 million in the previous period[91]. Profitability and Loss - The group's gross profit margin increased from 16.0% in the previous period to approximately 26.6% in the current period, despite a decrease in revenue from the toy segment[5]. - The net loss for the group was approximately HKD 10.1 million, an increase of about HKD 0.2 million compared to the previous period, primarily due to reduced revenue from the toy segment and increased employee costs[5]. - The group reported a loss before tax of HKD 10,230,000 for the six months ended September 30, 2024, compared to a loss of HKD 10,091,000 in the same period of 2023, indicating a slight increase in losses[56]. - The total segment loss for the period was HKD 5,568 thousand, compared to a loss of HKD 5,242 thousand in the prior year, reflecting a worsening performance[30]. - The company incurred a loss of HKD (10,118,000) before income tax expenses for the period[27]. Assets and Liabilities - The group's total assets as of September 30, 2024, were approximately HKD 193.6 million, compared to HKD 170.8 million as of March 31, 2024[9]. - The group's current liabilities totaled approximately HKD 113.1 million, an increase from HKD 82.7 million as of March 31, 2024[9]. - The total liabilities increased to HKD 156,557 thousand as of September 30, 2024, compared to HKD 120,383 thousand as of March 31, 2024, showing a rise in financial obligations[36]. - The company's total equity as of September 30, 2024, was HKD 56,110,000, a decrease from HKD 126,389,000 reported for the same period in 2023[13]. - The debt-to-equity ratio increased to approximately 81.9% as of September 30, 2024, compared to 66.1% as of March 31, 2024, due to a decrease in total equity[115]. Cash Flow and Financing - For the six months ended September 30, 2024, the company reported a net cash outflow from operating activities of HKD (3,901,000) compared to a net inflow of HKD 9,970,000 for the same period in 2023[17]. - The total cash and cash equivalents decreased by HKD 21,883,000, resulting in a balance of HKD 35,654,000 as of September 30, 2024, down from HKD 67,662,000 in 2023[17]. - The company’s investment activities resulted in a net cash outflow of HKD (13,872,000) for the six months ended September 30, 2024[17]. - The company’s financing activities led to a net cash outflow of HKD (4,110,000) during the same period[17]. - Financing costs decreased by 20.1% to approximately HKD 2.5 million, primarily due to a reduction in interest on convertible bonds[106]. Employee and Operational Costs - Employee benefits expenses, including director remuneration, increased to HKD 17,156,000 for the six months ended September 30, 2024, up from HKD 16,276,000 in 2023, representing a growth of 5.4%[49]. - The total employee cost for the period was approximately HKD 17.2 million, compared to HKD 16.3 million in 2023[125]. - Administrative expenses increased by 1.9% to approximately HKD 26.2 million, primarily due to higher employee-related costs[103]. Inventory and Trade Receivables - The group’s total inventory as of September 30, 2024, was HKD 4,517,000, down from HKD 16,428,000 as of March 31, 2024, reflecting a significant reduction of 72.5%[60]. - Trade receivables in the toy segment increased from approximately HKD 18.7 million as of March 31, 2024, to approximately HKD 25.6 million as of September 30, 2024, due to the peak business season, with turnover days rising from 51.6 days to 84.6 days[111]. - Trade receivables from the financial services segment as of September 30, 2024, amounted to HKD 5,685,000, a decrease from HKD 6,293,000 as of March 31, 2024[63]. Dividend and Shareholder Information - The board of directors recommended not to declare any interim dividend for the current period[5]. - The company did not declare an interim dividend for the period, consistent with the previous period[83]. - The weighted average number of ordinary shares used to calculate basic loss per share remained constant at 1,474,232,000 shares for both periods[56]. Market and Economic Conditions - The overall economic environment in mainland China and Hong Kong remained sluggish, with GDP growth expected to slow from 3.2% in 2023 to around 2.4% in 2024[85]. - The geopolitical tensions affecting international trade continued to exert pressure on the export and trade markets, with Mexico becoming the largest trading partner of the U.S.[86]. - The financial services division is expected to have a more optimistic outlook for the remainder of the fiscal year and the following years due to several factors, including a projected 50 basis point cut in the federal funds rate starting September 2024, with two additional cuts expected in November and December 2024[130]. Corporate Governance and Management - The company has adopted the corporate governance code as per the listing rules and has complied with all applicable provisions during the review period[136]. - The role of the CEO has been vacant since November 25, 2013, with the responsibilities assumed by the executive directors, aiming for a better balance of power and functions[137]. - Independent non-executive director Yang Huiling was appointed on September 24, 2024, bringing over 25 years of management experience in manufacturing and logistics[140].

Customer and Supplier Concentration - The largest customer accounted for approximately 74.7% of the group's revenue, while the top five customers represented about 93.8%[5] - The largest supplier contributed 18.2% to the group's purchasing amount, with the top five suppliers accounting for 52.8%[5] Shareholding Structure - As of March 31, 2024, Smart Investor Holdings Limited held 482,864,000 shares, representing 32.75% of the total issued shares[16] - Benefit Global Limited, Clearfield Global Limited, and BlackPine Private Equity Partners G.P. Limited each held 218,463,111 shares, each representing 14.82%[16] - The total number of issued shares as of March 31, 2024, was 1,474,232,000[17] - At least 25% of the company's issued share capital is held by the public as of the report date[50] Share Option Plan - The company has not adopted any share incentive plans during the fiscal year ending March 31, 2024[21] - As of March 31, 2024, the total number of unexercised options under the share option plan is 66,803,800, which represents 4.7% of the issued share capital[34] - The company granted 10,800,000 options at an exercise price of HKD 1.00 on July 3, 2015, with a closing price of HKD 0.90 prior to the grant date[22] - A total of 13,400,000 options were granted on July 3, 2015, at an exercise price of HKD 4.07, with a closing price of HKD 3.70 prior to the grant date[22] - The company granted 109,411,600 options on March 24, 2016, at an exercise price of HKD 0.748, with a closing price of HKD 0.70 prior to the grant date[22] - The share options will vest in three tranches: 30% after the first anniversary, 30% after the second anniversary, and 40% after the third anniversary of the grant date[31] - The total number of options granted to directors and employees as of April 1, 2023, was 68,603,800, with 1,800,000 options having lapsed during the year[28] - The exercise price for options granted on July 3, 2015, is HKD 1.02, while for those granted on March 24, 2016, it is HKD 0.748[23] - The company aims to incentivize selected participants through the share option plan, rewarding their contributions to the group[33] - The options granted under the plan are subject to adjustments following a share split effective January 13, 2016[28] - The company must obtain independent non-executive directors' approval for granting options to directors or major shareholders if it exceeds 0.1% of the issued shares in any 12-month period[35] - The total number of shares issued and to be issued under the stock option plan cannot exceed 1% of the company's issued share capital within any 12-month period[38] - Participants can accept the stock option grant within 21 days from the grant date, with options exercisable over a period of up to 10 years[41] - The exercise price of shares will be determined by the board but cannot be lower than the higher of the closing price on the grant date or the average closing price over the preceding five trading days[42] Financial Performance - Total revenue for the year ended March 31, 2024, was HKD 177,259,000, a decrease from HKD 341,801,000 in 2023, representing a decline of approximately 48%[92] - Gross profit for the year was HKD 28,004,000, down from HKD 44,934,000 in the previous year, indicating a decrease of about 38%[92] - The company reported a total loss of HKD 73,958,000 for the year, compared to a loss of HKD 72,321,000 in 2023, reflecting an increase in loss of approximately 2.3%[92] - The impairment loss on goodwill was HKD 45,508,000, significantly higher than the HKD 36,161,000 recorded in the previous year, marking an increase of about 26%[92] - Current assets decreased to HKD 170,769,000 from HKD 183,160,000, a decline of approximately 6.7%[99] - Non-current assets dropped to HKD 5,782,000 from HKD 60,716,000, a decrease of about 90%[99] - The company's cash and cash equivalents were HKD 57,537,000, down from HKD 61,948,000, representing a decrease of approximately 7%[99] - Trade receivables decreased to HKD 24,954,000 from HKD 38,354,000, a decline of about 35%[99] - The total liabilities decreased to HKD 82,675,000 from HKD 102,474,000, a reduction of approximately 19%[99] - The company's equity decreased significantly from HKD 126,464,000 to HKD 56,168,000, a decline of about 55%[102] - As of April 1, 2023, the total equity amounted to HKD 198,710,000, with accumulated losses of HKD (296,922,000)[105] - The company reported a total comprehensive loss of HKD (72,321,000) for the year, compared to a loss of HKD (73,941,000) in the previous year[105][110] - Cash flow from operating activities for the year ended March 31, 2024, was HKD 23,683,000, down from HKD 39,983,000 in the prior year[110] - The company experienced a decrease in trade receivables by HKD 13,400,000, compared to a decrease of HKD 48,213,000 in the previous year[110] - The company issued convertible bonds generating proceeds of HKD 9,000,000 during the year[113] - The company reported a decrease in cash and cash equivalents to HKD 57,537,000 at year-end, down from HKD 61,948,000[113] - The company recorded a significant increase in goodwill impairment loss to HKD 45,508,000 from HKD 36,161,000 in the previous year[110] - The company’s financing activities resulted in a net cash outflow of HKD (8,231,000), compared to HKD (51,955,000) in the prior year[113] - The company’s total liabilities included bank borrowings of HKD 61,938,000 in the previous year, with no new borrowings reported for the current year[113] - The company’s investment activities resulted in a net cash outflow of HKD (19,863,000) compared to a net cash inflow of HKD 44,537,000 in the previous year[110] Operational Challenges - The company anticipates that its operations may be affected by global economic and political uncertainties, including the ongoing US-China trade war and public health situations[64] - The toy division's revenue decreased by over 49% year-on-year due to challenges from the US-China economic environment and geopolitical conflicts[135] - The financial services division faces intense competition for talent, which could adversely affect performance if key positions are not filled[61] - The company acknowledges the potential adverse impact of geopolitical tensions and trade sanctions on its performance[64] - The company plans to expand its subcontractor network in the toy division to mitigate risks associated with trade tariffs imposed by other countries[64] Compliance and Governance - The board of directors includes independent non-executive directors who meet the independence guidelines set by the stock exchange[5] - The company plans to further detail its environmental, social, and governance policies in its upcoming report[4] - The independent auditor's report emphasizes the importance of evaluating the company's ability to continue as a going concern[83] - The company is committed to maintaining internal controls to ensure the financial statements are free from material misstatement due to fraud or error[80] - The company has undergone a comprehensive financial audit, ensuring compliance with Hong Kong Financial Reporting Standards and relevant regulations[80] - The audit committee reviewed the consolidated financial statements for the fiscal year ending March 31, 2023[188] - The audit committee approved the remuneration and other terms of engagement for the auditor, Hong Kong Li Xin De Hao Accounting Firm Limited[188] - The company has no internal audit function and relies on external consultants for regular reviews of risk management and internal controls[189] - The company established a remuneration committee to review and advise on the compensation of directors and senior management, ensuring no conflicts of interest in salary determination[192] Financial Reporting Standards - The revised Hong Kong Financial Reporting Standards effective from April 1, 2023, did not have a significant impact on the group's financial performance or disclosures[120] - The group has not early adopted any new or revised Hong Kong Financial Reporting Standards that are not yet effective[123] - The board anticipates that future applications of the revised standards will not affect the group's consolidated financial statements[123] Credit Risk Management - The company uses a simplified approach to measure expected credit losses for trade receivables, calculating losses based on lifetime expected credit losses[163] - Expected credit losses are assessed based on the likelihood of default events occurring within 12 months or over the lifetime of the financial instrument[163] - The company assumes significant increases in credit risk if financial assets are overdue by more than 30 days, unless supported by reasonable evidence[163] - Financial assets are considered credit impaired if the borrower is unlikely to fully repay their credit obligations or if the asset is overdue by more than 90 days[165] - The company has established a provision matrix based on historical credit loss experience, adjusted for forward-looking factors[163] Director and Committee Activities - The board consists of seven directors, including four executive directors and three independent non-executive directors[172] - The company has adopted a standard code for securities trading by directors, ensuring compliance with required standards[170] - The company’s executive directors have service contracts for three years, with the option for renewal[174] - The company secretary regularly circulates details of training courses to encourage all directors to participate, with costs covered by the company[175] - The chairman and all non-executive directors held a meeting to assess the performance of executive directors and discuss operational concerns[177] - The audit committee's main responsibilities include reviewing the financial reporting process and internal control systems[185] - The company appointed new members to various committees on November 9, 2023, including the nomination and remuneration committees[184] - The company encourages continuous professional development for directors to enhance their knowledge and skills[175]

Financial Performance - Total revenue for the year ended March 31, 2024, was approximately HKD 177.3 million, a decrease of about HKD 164.5 million or 48.1% compared to HKD 341.8 million for the year ended March 31, 2023[4] - The toy segment's revenue decreased by approximately HKD 164.2 million or 49.7% to about HKD 166.4 million, while the financial services segment's revenue was approximately HKD 10.8 million, a decrease of about HKD 0.4 million or 3.3%[4] - Gross profit for the year was approximately HKD 28.0 million, down about HKD 16.9 million or 37.7% from HKD 44.9 million in the previous year[4] - The net loss for the year was approximately HKD 74.0 million, an increase of about HKD 1.7 million or 2.4% from a net loss of HKD 72.3 million in the previous year[5] - The company proposed not to declare a final dividend for the year ended March 31, 2024[5] - The basic and diluted loss per share was HKD 5.02 for the year ended March 31, 2024, compared to HKD 4.91 in the previous year[7] - The company reported a total loss before tax of HKD 73,968,000 for the fiscal year ending March 31, 2024[24] - The company reported a loss attributable to shareholders of approximately HKD 73,941,000 for the year ended March 31, 2024, compared to a loss of HKD 72,321,000 in 2023, reflecting an increase in loss of about 2.24%[58] Assets and Liabilities - Total assets decreased significantly from HKD 141.4 million in 2023 to HKD 93.9 million in 2024, reflecting a substantial reduction in non-current assets[9] - The company's total liabilities decreased from HKD 102.5 million in 2023 to HKD 82.7 million in 2024, indicating improved liquidity[9] - Cash and cash equivalents decreased from HKD 61.9 million in 2023 to HKD 57.5 million in 2024[8] - The total liabilities for the toy manufacturing segment were HKD 11,583,000, while financial services had liabilities of HKD 69,944,000, totaling HKD 81,527,000[32] - The company's debt-to-equity ratio increased to approximately 66.1% as of March 31, 2024, compared to 30.9% on March 31, 2023, due to a decrease in total equity[152] - The current ratio as of March 31, 2024, was approximately 2.1, up from 1.8 on March 31, 2023[152] Revenue Breakdown - For the fiscal year ending March 31, 2024, external revenue from toy manufacturing and sales was HKD 166,431,000, while financial services generated HKD 10,828,000, totaling HKD 177,259,000[24] - Revenue from toy manufacturing and sales was HKD 166,431,000, down 50% from HKD 330,600,000 in the previous year[47] - North America revenue dropped to HKD 102,726,000 from HKD 187,651,000, representing a decline of 45%[38] - Major customer A contributed HKD 132,442,000 in revenue, down 52% from HKD 273,628,000 in 2023[43] - The financial services division's revenue decreased by approximately HKD 0.4 million or 3.3% to about HKD 10.8 million, mainly due to a decline in corporate finance consulting revenue by approximately HKD 1.1 million or 18.8%[126] Impairment and Goodwill - The goodwill impairment loss increased by approximately HKD 9.3 million, contributing to the overall net loss[5] - The financial services segment incurred a goodwill impairment loss of approximately HKD 45,508,000 for the fiscal year ending March 31, 2024[28] - The goodwill impairment loss recognized for the year was approximately HKD 42,208,000, an increase from HKD 36,161,000 in 2023, due to adverse market conditions affecting cash flow forecasts[64] - The recoverable amount of the cash-generating unit related to a subsidiary was reduced to zero as of March 31, 2024, down from HKD 49,000,000 in 2023[64] Inventory and Receivables - Inventory decreased from HKD 51,727,000 in 2023 to HKD 16,428,000 in 2024, representing a decline of approximately 68.3%[70] - Trade receivables from the financial services segment decreased from HKD 9,949,000 in 2023 to HKD 6,293,000 in 2024, a reduction of about 36.5%[72] - Trade receivables from the manufacturing and sales of toys segment decreased from HKD 28,405,000 in 2023 to HKD 18,661,000 in 2024, a decline of approximately 34.5%[78] Expenses and Costs - Administrative expenses decreased by approximately HKD 13.6 million or 22.0% to about HKD 48.0 million, primarily due to reduced employee costs and lower office rental expenses[140] - Financing costs decreased by approximately 56.8% to about HKD 5.5 million, primarily due to a reduction in interest expenses on convertible bonds[143] - The total employee cost for the year ending March 31, 2024, was approximately HKD 26.6 million, down from HKD 33.6 million in 2023[164] Market Conditions and Future Outlook - The geopolitical tensions between major economies, particularly the US-China trade disputes, have led to increased tariffs and supply chain disruptions, negatively impacting the toy manufacturing sector's profit margins[115] - Economic fluctuations caused by interest rate hikes and inflation have suppressed consumer confidence and disposable income, leading to weakened demand in several toy categories[115] - The company anticipates growth in the economies of mainland China and Hong Kong following the end of COVID-19 quarantine measures, although this is tempered by ongoing geopolitical tensions[114] - The company expects a significant revenue increase of 50% in investment advisory and management services due to strong performance in the U.S. stock market[168] Stock Options and Convertible Bonds - The company granted a total of 10,800,000 stock options on March 17, 2014, with an exercise price of HKD 1 per share[100][101] - The company issued HKD 31 million in promissory notes with a fixed annual interest rate of 10%, due on May 16, 2026[85] - The company issued HKD 9,000,000 of unsecured convertible bonds with a conversion price of HKD 0.081 per share[91] - The actual interest rate for the liability portion of the 2023 convertible bonds is 25.53% per annum[91] Audit and Reporting - The audit committee, along with auditors, reviewed the annual audited consolidated financial statements, confirming they are prepared in accordance with applicable accounting standards and fairly present the group's financial position and performance for the year[175] - The annual report for 2024 will be published around mid-July 2024, in compliance with listing rules, and will be available on the Hong Kong Stock Exchange and the company's website[176]

Revenue Performance - The Toys Division's revenue decreased by approximately HKD 110.0 million or 47.7% compared to the previous period due to reduced consumer spending on non-essential items [12]. - The company's total revenue for the period was approximately HKD 127.1 million, a decrease of about HKD 108.6 million or 46.1% compared to the previous period's revenue of approximately HKD 235.7 million [20]. - The toy segment's revenue decreased by approximately HKD 110.0 million, while the financial services segment's revenue increased by approximately HKD 1.4 million, representing a year-on-year decrease of about 47.7% and an increase of about 28.2%, respectively [20]. - Revenue from external customers for the six months ended September 30, 2023, was HKD 127,149,000, a decrease of 46% compared to HKD 235,704,000 in the same period of 2022 [127]. - Revenue from North America dropped significantly to HKD 74,814,000 from HKD 139,144,000, representing a decline of 46% [127]. - Revenue from major customer A decreased to HKD 96,655,000 from HKD 187,975,000, a reduction of 48% [133]. - The company's total external revenue from the toy manufacturing segment was HKD 120,583,000 for the six months ended September 30, 2023, compared to HKD 230,581,000 for the same period in 2022 [115]. Financial Performance - The company reported a loss before tax of HKD 9,937,000 for the six months ended September 30, 2023, compared to a loss of HKD 15,683,000 for the same period in 2022 [115]. - The company reported a total comprehensive loss of HKD 10,091,000 for the period [95]. - Basic and diluted loss per share was HKD 0.67, an improvement from HKD 1.13 in the previous year [88]. - The company reported a loss before tax of HKD 9,937,000, an improvement from a loss of HKD 15,685,000 in the same period of 2022 [141]. - The company incurred financing costs of HKD 3,098,000 for the six months ended September 30, 2023, down from HKD 6,596,000 in the same period of 2022 [138]. - The company has seen a significant reduction in executive compensation, indicating a strategic shift in cost management [176]. Economic Conditions - The overall economic growth rate for Hong Kong is projected to reach 3.8% in 2023, following a weak economic performance in 2022 [10]. - The ongoing geopolitical tensions and the impact of the Ukraine war have adversely affected global economic conditions, influencing the company's operations [11]. - The company anticipates continued challenges in achieving economic rebound due to tightening monetary conditions and geopolitical conflicts [10]. - The financial market sentiment remains bearish, with the Morgan Stanley Capital International China Index expected to decline for the third consecutive year [14]. - The average daily trading volume in the market remained low at HKD 110 billion, slightly down from HKD 113 billion in the same period last year [14]. Cost Management - Selling expenses for the toy segment decreased by approximately HKD 3.5 million or 63.2% to about HKD 2.1 million due to a reduction in sales orders [23]. - Administrative expenses decreased by approximately HKD 7.1 million or 21.7% to about HKD 25.7 million, primarily due to the absence of provisions for expected credit losses in the financial services segment [24]. - The company plans to continue its focus on cost management and operational efficiency to improve financial performance in the upcoming periods [88]. Assets and Liabilities - Total assets as of September 30, 2023, amounted to HKD 233,209,000, a decrease from HKD 243,876,000 as of March 31, 2023 [119]. - Total liabilities decreased from HKD 102,474,000 to HKD 61,412,000, marking a reduction of about 40.2% [90]. - The company's cash and cash equivalents rose to HKD 67,662,000 from HKD 61,948,000, an increase of approximately 9.2% [103]. - The debt-to-equity ratio slightly decreased to approximately 30.5% from 30.9% as of March 31, 2023 [37]. - The current ratio improved to approximately 2.9 from 1.8 as of March 31, 2023 [37]. Shareholder Information - The total number of issued shares as of September 30, 2023, is 1,474,232,000 shares, with Smart Investor holding 482,864,000 shares, representing 32.75% [65]. - The company has a stock option plan that was adopted on January 3, 2013, and has granted a total of 24,200,000 options to eligible participants at various exercise prices [69]. - Major shareholders include Benefit Global Limited and Clearfield Global Limited, each holding 149,563,111 shares, representing 10.15% [66]. - The company has a total of 66,803,800 unexercised share options as of September 30, 2023, after accounting for 18,000,000 options that lapsed during the period [169]. Governance and Compliance - The company has adopted the corporate governance code as per the listing rules and has complied with all applicable provisions during the interim review period [57]. - The audit committee has reviewed the unaudited condensed consolidated financial statements for the six months ended September 30, 2023 [55]. - The company has not established any share incentive plans as of the report date [68]. - The board has resolved not to declare an interim dividend for the period [53].

Revenue Performance - The Toys Division's revenue decreased by approximately 20.5% compared to the previous year due to COVID-19 restrictions in China and inflationary pressures affecting consumer spending in Western markets[9]. - The Financial Services Division experienced a revenue decline of about 42% year-on-year, primarily due to a stagnant bond issuance market and a 31% drop in the value of managed investment portfolios[10]. - The toy division reported revenue of approximately HKD 330.6 million, a decrease of about 20.5% from the previous year's HKD 415.7 million, primarily due to reduced sales to the top five customers[81]. - The financial services division's revenue decreased by approximately 66.1% to about HKD 11.2 million, primarily due to a significant drop in investment advisory fees by approximately HKD 23.1 million or 86.3%[82]. - The group's total revenue for the reporting year was approximately HKD 341.8 million, a decrease of HKD 106.9 million or about 23.8% compared to the previous year's revenue of HKD 448.7 million[92]. Cost Management and Operational Strategies - The company plans to implement cost management strategies in the Toys Division, focusing on reducing production outsourcing costs and overall operational expenses[11]. - The company is committed to enhancing shareholder value and long-term returns despite the challenging environment[13]. - The company is committed to several ongoing fundraising and underwriting projects despite the challenging economic conditions[80]. - The group is implementing cost management strategies to enhance competitiveness in the toy division, particularly by reducing production outsourcing costs[128]. Governance and Board Structure - The board consists of eight members, including four executive directors and three independent non-executive directors, ensuring a diverse governance structure[19]. - The company has adhered to all applicable corporate governance codes during the reporting year, maintaining high standards of accountability[16]. - The board of directors held four regular meetings during the reporting year, with all executive directors attending 100% of the meetings[30]. - The audit committee, chaired by Mr. Chan, consists entirely of independent non-executive directors and is responsible for overseeing the financial reporting process and internal controls[32]. - The company has established four committees: Audit Committee, Remuneration Committee, Nomination Committee, and Corporate Governance Committee, each with clearly defined responsibilities[27]. Financial Performance and Position - The net loss for the reporting year was approximately HKD 72.3 million, a reduction of HKD 22.1 million or 23.4% compared to the previous year's net loss of HKD 94.4 million[96]. - Administrative expenses decreased by approximately HKD 18.4 million or 23.0% to about HKD 61.6 million, primarily due to reduced consulting fees paid to portfolio managers in the financial services segment[97]. - The total gross profit decreased by approximately HKD 9.5 million or 17.5% to about HKD 44.9 million, mainly due to reduced sales to the toy segment's top five customers[93]. - Cash and cash equivalents increased by approximately HKD 32.6 million to about HKD 61.9 million, with no interest-bearing bank borrowings as of March 31, 2023[112]. - The debt-to-equity ratio improved to approximately 30.9% from 36.5% due to a reduction in bank borrowings and early redemption of promissory notes[112]. Market Conditions and Economic Outlook - The overall economic outlook remains cautious due to uncertainties in the US economy and ongoing geopolitical tensions, particularly the war in Ukraine[11]. - The macroeconomic environment, including rising U.S. interest rates and geopolitical tensions, continues to adversely affect the company's operations and market outlook[75]. - The Hang Seng Index fell by 7.43% from 22,039 points in April 2022 to 20,400 points by the end of March 2023, reflecting a challenging market environment[77]. - The overall trading volume on the Hong Kong Stock Exchange has been declining since 2020, with average daily turnover dropping from HKD 154 billion in 2020 to HKD 120 billion in 2022[78]. Shareholder Engagement and Communication - The company emphasizes clear and transparent communication with shareholders to understand the group's performance and prospects[59]. - The company encourages shareholder participation in meetings and has implemented measures to facilitate this engagement[67]. Risk Management and Compliance - The company faces various financial risks, including foreign currency, trade receivables, and credit risks, but believes the pandemic has not significantly impacted its liquidity and working capital[162]. - Regulatory compliance is critical for the company's operations, especially in the financial services division, where non-compliance could have significant adverse effects[169]. - The company has adopted a compliance manual outlining specific procedures for handling and protecting customer data, particularly in the financial services division[173]. Environmental and Social Responsibility - Environmental policies are being implemented to reduce emissions and waste, reflecting the company's commitment to environmental protection[170]. - The company is committed to energy-saving measures, such as using LED lighting and water-saving devices in its offices[179]. - The group continues to provide electronic statements to reduce paper usage, reflecting its commitment to environmental responsibility[176]. Employee and Talent Management - The company emphasizes the importance of maintaining strong relationships with employees, customers, and suppliers to achieve its business goals[160]. - The company faces intense competition in talent acquisition, particularly in the financial services division, which could negatively impact performance if key positions are not filled[168].