Financial Performance - The company's revenue decreased by 11.6% to approximately HKD 149.4 million for the year ending April 30, 2023, down from approximately HKD 168.9 million in the previous year[10]. - Gross profit fell by approximately 45.7%, from about HKD 34.4 million to approximately HKD 18.7 million, resulting in a gross margin of about 12.5% compared to 20.4% in the previous year[11][15]. - The sales cost decreased by 2.9% to approximately HKD 130.7 million, aligning with the revenue decline[13]. - The overall comprehensive expenses attributable to the company's owners amounted to approximately HKD 19.2 million, a significant decrease from approximately HKD 0.2 million in the previous year[11]. - The group recorded a net loss of approximately HKD 16.4 million for the year, compared to a net profit of approximately HKD 0.5 million for the year ended April 30, 2022[21]. - Administrative expenses decreased from approximately HKD 19.1 million for the year ended April 30, 2022, to approximately HKD 17.7 million, a reduction of about 7.2%[18]. - The group recorded an unrealized loss on financial assets measured at fair value through profit or loss of approximately HKD 1.4 million for the year, compared to HKD 1.7 million for the year ended April 30, 2022[16]. - Basic loss per share for the year was approximately HKD 0.513, compared to basic earnings per share of approximately HKD 0.015 for the year ended April 30, 2022[23]. Business Strategy and Operations - A new major client targeting the U.S. market contributed approximately HKD 35.3 million, accounting for 23.7% of the total revenue for the year[10]. - The company is actively exploring new business opportunities and enhancing its supply chain management to improve gross margins[6][10]. - The company plans to continue strengthening its customized integrated apparel design and procurement services to meet existing and potential client needs[6]. - Management is taking actions to develop supply chain management in Cambodia to mitigate rising production costs from approved suppliers in China[11]. - The company will continue to assess business objectives and strategies while considering market uncertainties and risks[7]. - The company aims to enhance its design and development capabilities, with a focus on improving operational models[43]. - The company is actively expanding its fashion-related business, including footwear and bags, to meet customer demands[48]. - The company is dedicated to exploring potential mergers and acquisitions to further enhance market expansion and operational efficiency[51]. Market and Economic Environment - The company acknowledges the ongoing geopolitical tensions, high inflation, and recession risks affecting the fashion retail and wholesale market[11]. - The global economic performance in 2023 is expected to be below market expectations due to various factors, including the cost of living crisis and geopolitical tensions[46]. - The company faces risks related to reliance on major customers without long-term contracts, leading to revenue uncertainty[49]. Management and Governance - The company reported a significant increase in overall management and operational strategies under the leadership of Mr. Cai Jingting, who has over 15 years of experience in clothing design and procurement[51]. - The company has a strong board of directors with extensive experience in corporate governance, financial advisory, and risk management, led by independent non-executive director Mr. Lai Guohong[56]. - The board emphasizes the importance of integrity in financial reporting and compliance with legal and ethical standards[79]. - The company has established a diversity policy for the board, focusing on gender, age, cultural background, and professional experience[82]. - The board will review the implementation of the diversity policy annually to ensure its effectiveness[82]. Risk Management - The company faces significant risks including currency, interest rate, credit, and liquidity risks, as well as operational risks due to reliance on key customers without long-term contracts[120]. - The risk management framework follows the COSO framework, allowing effective management of various risks faced by the company[119]. - The company has implemented measures to improve its risk management and internal control systems based on independent assessments[116]. Environmental, Social, and Governance (ESG) - The group emphasizes sustainable development and corporate responsibility, aiming to balance business growth with environmental and social considerations[145]. - The board is responsible for overseeing the group's environmental, social, and governance (ESG) strategies and ensuring effective risk management related to ESG issues[148]. - The company reported a 53.4% increase in indirect greenhouse gas emissions due to higher electricity consumption compared to the previous year[165]. - The company aims to reduce its environmental impact through various protective measures in its operations[161]. - The company is committed to sustainable development and actively participates in green initiatives[163]. Employee and Workforce - Total number of employees decreased from 73 in 2022 to 44 in 2023, a reduction of approximately 40%[199]. - Female employees accounted for 61% of the workforce in 2023, down from 62% in 2022[199]. - The company promotes a harmonious work environment through regular employee activities and encourages work-life balance[196].

香港交易及結算所有限公司及香港聯合交易所有限公司對本公告的內容概不負責，對其 準確性或完整性亦不發表任何聲明，並明確表示概不就因本公告全部或任何部分內容而 產生或因倚賴該等內容而引致的任何損失承擔任何責任。 樺欣控股有限公司（「本公司」）董事（「董事」）會（「董事會」）欣然宣佈本公司及其附屬公 承董事會命 香港，二零二三年七月二十八日 於本公告日期，執行董事為蔡敬庭先生及蔡清丞先生；而獨立非執行董事為黎國鴻先 SG Group Holdings Limited 樺欣控股有限公司 （於開曼群島註冊成立的有限公司） （股份代號：1657） 截至二零二三年四月三十日止年度的全年業績公告 司截至二零二三年四月三十日止年度之綜合業績。本公告列載本公司截至二零二三年 四月三十日止年度的二零二三年年報全文，乃符合香港聯合交易所有限公司（「聯交所」） 證券上市規則（「上市規則」）中有關全年業績初步公告附載的資料之相關要求。 樺欣控股有限公司 主席、行政總裁兼執行董事 蔡敬庭 生、楊存洲先生及Cüneyt Bülent Bilâloˇglu先生。 目錄 公司資料 2 主席報告 3 管理層討論及分析 4 董事及高級管理層的履歷詳 ...

Management Discussion and Analysis [Business Review](index=3&type=section&id=Business%20Review) The Group's revenue significantly declined due to COVID-19, yet it strengthened customer relations and successfully transferred its listing to the Main Board, enhancing corporate image and liquidity. - The Group's primary revenue sources are the supply of apparel products and provision of consulting services to online fashion retailers and fashion retailers[3](index=3&type=chunk) - Segment Revenue Changes (Six Months Ended October 31) | Segment Item | 2020 (Million HKD) | 2019 (Million HKD) | Change (%) | | :------- | :---------------- | :---------------- | :--------- | | Apparel Product Supply | 48.0 | 141.9 | -66.2 | | Consulting Services | 0.7 | 1.2 | -41.7 | - The company successfully transferred its listing from GEM to the Main Board of the Stock Exchange on March 20, 2020, aiming to attract new institutional investors, broaden the investor base, increase share trading liquidity, and enhance corporate image and market visibility[7](index=7&type=chunk) [Financial Review](index=4&type=section&id=Financial%20Review) Group revenue and gross profit significantly decreased due to COVID-19 and discounts, leading to reduced comprehensive income and EPS, though liquidity improved with a higher current ratio and increased gearing. - Key Financial Indicators Changes (Six Months Ended October 31) | Indicator | 2020 (Million HKD) | 2019 (Million HKD) | Change (%) | | :--- | :---------------- | :---------------- | :--------- | | Revenue | 48.7 | 143.1 | -66.0 | | Cost of Sales and Services | 39.3 | 107.9 | -63.6 | | Gross Profit | 9.4 | 35.1 | -73.2 | | Gross Profit Margin | 19.4% | 24.6% | -5.2 pp | | Administrative Expenses | 6.2 | 6.9 | -9.5 | | Selling and Distribution Expenses | 4.8 | 7.9 | -39.1 | | Total Comprehensive Income Attributable to Owners of the Company | 0.8 | 12.0 | -93.1 | | Basic Earnings Per Share (HKD) | 0.01 | 0.40 | -97.5 | - The decrease in gross profit margin was primarily due to sales discounts given to major customers and additional production costs incurred from shortened production lead times[11](index=11&type=chunk) - Liquidity and Financial Resources (As at October 31) | Indicator | 2020 (Million HKD) | April 30, 2020 (Million HKD) | | :--- | :---------------- | :----------------------- | | Net Current Assets | 89.0 | 90.1 | | Bank Balances and Cash | 43.6 | 35.1 | | Current Ratio | 4.3 | 3.8 | | Gearing Ratio | 0.0663 | 0.0186 | [Treasury Policy](index=8&type=section&id=Treasury%20Policy) The Group adopts a prudent treasury policy, continuously assessing customer credit to mitigate credit risk and closely monitoring liquidity to ensure funding needs are met. - The Group's management continuously assesses the financial standing of customers to mitigate credit risk[24](index=24&type=chunk) - The Board closely monitors the Group's liquidity position to ensure the liquidity structure of assets, liabilities, and commitments aligns with its funding requirements[24](index=24&type=chunk) [Commitments](index=8&type=section&id=Commitments) As of October 31, 2020, the Group had no contracted capital commitments, a decrease from HKD 1.7 million previously, related to property and tangible asset acquisitions. - Capital Commitments (Contracted but Unprovided) | Date | Amount (Million HKD) | | :--- | :-------------- | | October 31, 2020 | 0 | | April 30, 2020 | 1.7 | [Capital Structure](index=8&type=section&id=Capital%20Structure) The company's issued share capital remained unchanged at HKD 320,000, comprising 32,000,000 shares with a HKD 0.01 par value. - Issued Share Capital | Date | Issued Share Capital (HKD) | Number of Shares | | :--- | :---------------- | :------- | | October 31, 2020 | 320,000 | 32,000,000 | | April 30, 2020 | 320,000 | 32,000,000 | [Significant Investments](index=8&type=section&id=Significant%20Investments) As of October 31, 2020, and April 30, 2020, the Group held no other significant investments. - The Group held no significant investments during or at the end of the reporting period[27](index=27&type=chunk) [Significant Acquisitions or Disposals of Subsidiaries and Associates](index=8&type=section&id=Significant%20Acquisitions%20or%20Disposals%20of%20Subsidiaries%20and%20Associates) For the six months ended October 31, 2020, the Group did not undertake any significant acquisitions or disposals of subsidiaries and associates. - The Group did not undertake any significant acquisitions or disposals of subsidiaries and associates during the reporting period[28](index=28&type=chunk) [Future Plans for Major Investments and Capital Assets](index=8&type=section&id=Future%20Plans%20for%20Major%20Investments%20and%20Capital%20Assets) Except for plans disclosed in the prospectus, the Group currently has no other significant investment and capital asset plans. - The Group currently has no significant investment and capital asset plans beyond those disclosed in the prospectus[29](index=29&type=chunk) [Contingent Liabilities](index=9&type=section&id=Contingent%20Liabilities) As of October 31, 2020, and April 30, 2020, the Group had no significant contingent liabilities. - The Group had no significant contingent liabilities at the end of the reporting period or the comparative period end[31](index=31&type=chunk) [Foreign Exchange Risk](index=9&type=section&id=Foreign%20Exchange%20Risk) The Group manages HKD and GBP currency risks through a comprehensive policy, aiming to shift sales invoices from GBP to USD to reduce exchange rate volatility. - The Group's currency risk is primarily related to HKD and GBP; HKD is pegged to USD, so no significant exchange risk is expected[32](index=32&type=chunk) - The Group's management is committed to changing sales invoice currency from GBP to USD to minimize exchange rate risk arising from GBP fluctuations[32](index=32&type=chunk) - The Group has established a comprehensive foreign currency risk management policy but currently does not employ any foreign exchange hedging measures[32](index=32&type=chunk) [Pledge of Assets](index=9&type=section&id=Pledge%20of%20Assets) As of October 31, 2020, and April 30, 2020, the Group had no leased assets pledged by lessors under finance leases. - The Group had no leased assets pledged at the end of the reporting period or the comparative period end[33](index=33&type=chunk) [Employees and Remuneration Policy](index=9&type=section&id=Employees%20and%20Remuneration%20Policy) The Group employed 41 staff with HKD 4.4 million in benefits, using a remuneration policy based on market, performance, and experience, with discretionary bonuses. - Employee Count and Benefit Expenses | Indicator | October 31, 2020 | April 30, 2020 | Six Months Ended October 31, 2020 (Million HKD) | Six Months Ended October 31, 2019 (Million HKD) | | :--- | :------------- | :------------- | :-------------------------------- | :-------------------------------- | | Employee Count | 41 | 49 | - | - | | Total Employee Benefit Expenses | - | - | 4.4 | 5.9 | - Remuneration is determined based on market conditions, individual employee performance, qualifications, and experience, with discretionary year-end bonuses for high-performing employees[34](index=34&type=chunk) [Compliance with Laws and Regulations](index=10&type=section&id=Compliance%20with%20Laws%20and%20Regulations) Operating in Hong Kong and China, the Group complied with all relevant laws and regulations, including company law, listing rules, and securities ordinances. - The Group complied with all relevant laws and regulations in Hong Kong and China during this period[36](index=36&type=chunk) - The Group also complied with the requirements of the Companies Law of the Cayman Islands, the Listing Rules of the Stock Exchange, and the Securities and Futures Ordinance regarding disclosure and corporate governance[36](index=36&type=chunk) [Environmental Policy](index=10&type=section&id=Environmental%20Policy) The Group minimizes environmental impact through energy saving and recycling, ensuring compliance with all environmental, health, and safety regulations. - The Group minimizes the adverse environmental impact of its daily operations through methods such as energy saving and office resource recycling[37](index=37&type=chunk) - The Group complied with all relevant laws and regulations related to environmental protection, health and safety, working conditions, and employment[37](index=37&type=chunk) [Relationship with Stakeholders](index=10&type=section&id=Relationship%20with%20Stakeholders) The Group prioritizes strong relationships with employees, customers, and suppliers, adhering to labor laws, providing quality service, and fostering trust without major disputes. - The Group regards employees as valuable assets, strictly adheres to labor laws, and provides benefits such as medical insurance[38](index=38&type=chunk) - The Group provides quality service to customers and maintains direct communication with familiar customers through a database to build long-term business relationships[38](index=38&type=chunk) - The Group maintains effective communication and builds long-term trust with suppliers, with no significant disputes or disagreements during this period[38](index=38&type=chunk) [Comparison of Business Strategies with Actual Business Progress](index=11&type=section&id=Comparison%20of%20Business%20Strategies%20with%20Actual%20Business%20Progress) The Group progressed on prospectus strategies, strengthening customer relations, enhancing design, expanding supplier base, and broadening product portfolio through new showrooms, online platforms, and procurement offices. - Comparison of Business Strategies with Actual Business Progress | Business Strategies in Prospectus | Actual Business Progress as of Report Date | | :------------------- | :--------------------------- | | Further strengthen relationships with existing customers and develop relationships with new customers | - Acquired property, planning to establish a flagship showroom in Hong Kong<br>- Online platform launched in the year ended April 30, 2020<br>- Recruited an Assistant General Manager responsible for developing and enhancing customer business relationships and addressing Brexit impacts | | Further enhance the Group's design and development capabilities to improve its operating model | - Recruited two designers in the UK in May 2019 | | Expand the geographical base of third-party suppliers and broaden the supplier base | - Established two Chinese subsidiaries as procurement offices in China | | Broaden the Group's product portfolio | - Received the first knitwear product order in May 2017 | | Enhance the Group's corporate image to attract customer attention | - Plans to participate in trade shows in the UK and Europe in the year ending April 30, 2021, to reach potential customers | [Use of Proceeds](index=12&type=section&id=Use%20of%20Proceeds) Actual net proceeds of HKD 44.4 million from the share offer were largely utilized (HKD 38.0 million) for prospectus-outlined strategies, with HKD 6.4 million remaining. - The actual net proceeds from the share offer were approximately **HKD 44.4 million**, higher than the estimated figure in the prospectus[42](index=42&type=chunk) - Use of Actual Net Proceeds (As of October 31, 2020) | Business Strategies in Prospectus | Adjusted Allocation (Thousand HKD) | Actual Use (Thousand HKD) | Unutilized (Thousand HKD) | | :------------------- | :------------------ | :---------------- | :-------------- | | Further strengthen relationships with existing customers and develop relationships with new customers | 27,464 | 24,986 | 2,478 | | Further enhance design and development capabilities | 4,703 | 3,479 | 1,224 | | Expand the geographical base of third-party suppliers and broaden the supplier base | 5,191 | 4,872 | 319 | | Enhance corporate image to attract customer attention | 2,662 | 256 | 2,406 | | General working capital | 4,392 | 4,392 | – | | **Total** | **44,412** | **37,985** | **6,427** | [Future Outlook](index=13&type=section&id=Future%20Outlook) Despite COVID-19's global impact, the Group's asset-light model and digital-native clients mitigated effects; it will enhance services, promote products, and seek new growth opportunities. - The COVID-19 pandemic severely curbed global economic activities, leading to a sharp drop in apparel demand, but the Group was less affected due to over half of its sales coming from digital-native brands and platform customers, and operating with an asset-light business model[44](index=44&type=chunk) - The Group will continue to strengthen customized integrated apparel design and procurement services and actively promote products through various channels, including displaying samples at Hong Kong and UK showrooms and e-promotions on online platforms[45](index=45&type=chunk) - The Directors will continue to review and evaluate business objectives and strategies and explore suitable business and investment opportunities to create and build new profit growth drivers[45](index=45&type=chunk) [Key Risks and Uncertainties](index=14&type=section&id=Key%20Risks%20and%20Uncertainties) The Group faces risks from customer reliance, revenue uncertainty, intense competition, credit risk, raw material volatility, and potential reputational damage from supplier non-compliance. - The Group relies on certain key customers and lacks long-term contracts, facing revenue uncertainty and potential variability risks[47](index=47&type=chunk) - The Group faces intense market competition, which may lead to reduced market share and declining profit margins[47](index=47&type=chunk) - Other risks include customer credit risk, fluctuations in raw material prices, supply, and quality, and potential adverse reputational impact from suppliers' non-compliance with corporate social responsibility standards[47](index=47&type=chunk) Other Information [Directors' and Chief Executive's Interests and Short Positions in Shares, Underlying Shares, and Debentures of the Company or Any Specified Undertaking of the Company or Any Other Associated Corporation](index=15&type=section&id=Directors'%20and%20Chief%20Executive's%20Interests%20and%20Short%20Positions%20in%20Shares,%20Underlying%20Shares,%20and%20Debentures%20of%20the%20Company%20or%20Any%20Specified%20Undertaking%20of%20the%20Company%20or%20Any%20Other%20Associated%20Corporation) As of October 31, 2020, Mr. Choi King Ting held 72.67% of the company's equity (71.88% via controlled entities, 0.79% beneficially), while Mr. Lai Kwok Hung held 0.03% beneficially. - Directors' and Chief Executive's Shareholdings (As of October 31, 2020) | Director Name | Nature of Interest | Number of Shares Held (L) | Percentage of Company's Issued Share Capital | | :------- | :------- | :--------------- | :----------------------------- | | Mr. Choi King Ting | Interest in controlled corporation | 23,000,000 | 71.88% | | Mr. Choi King Ting | Beneficial owner | 252,500 | 0.79% | | **Mr. Choi King Ting Total** | **-** | **23,252,500** | **72.67%** | | Mr. Lai Kwok Hung | Beneficial owner | 10,000 | 0.03% | - Except as disclosed above, no other Directors and chief executives had disclosable interests or short positions in the shares, underlying shares, or debentures of the Company or any of its associated corporations[53](index=53&type=chunk) [Substantial Shareholders' Interests and Short Positions in Shares, Underlying Shares, and Debentures of the Company or Any Specified Undertaking of the Company or Any Other Associated Corporation](index=17&type=section&id=Substantial%20Shareholders'%20Interests%20and%20Short%20Positions%20in%20Shares,%20Underlying%20Shares,%20and%20Debentures%20of%20the%20Company%20or%20Any%20Specified%20Undertaking%20of%20the%20Company%20or%20Any%20Other%20Associated%20Corporation) JC Fashion International Group Limited, a substantial shareholder, beneficially owned 71.88% of the company's issued share capital, entirely owned by Mr. Choi King Ting. - Substantial Shareholders' Shareholdings (As of October 31, 2020) | Shareholder Name | Nature of Interest | Number of Shares Held (L) | Percentage of Company's Issued Share Capital | | :------- | :------- | :--------------- | :----------------------------- | | JC International | Beneficial owner | 23,000,000 | 71.88% | - Mr. Choi King Ting directly owns the entire equity of JC International, and is therefore deemed to have an interest in all shares held by JC International[55](index=55&type=chunk) [Purchase, Sale or Redemption of the Company's Listed Securities](index=18&type=section&id=Purchase,%20Sale%20or%20Redemption%20of%20the%20Company's%20Listed%20Securities) Neither the company nor its subsidiaries purchased, sold, or redeemed any listed securities during the reporting period or up to the report date. - Neither the Company nor its subsidiaries purchased, sold, or redeemed any listed securities during or after the reporting period[58](index=58&type=chunk) [Directors' Securities Transactions](index=18&type=section&id=Directors'%20Securities%20Transactions) The company adopted a stringent code for directors' securities transactions, with all directors confirming compliance with the code and Listing Rules' trading standards. - The Company has adopted a code of conduct for directors' securities transactions no less stringent than the required standard set out in Appendix 10 to the Listing Rules[59](index=59&type=chunk) - All Directors confirmed compliance with the required trading standards and the Company's adopted code of conduct for the six months ended October 31, 2020[59](index=59&type=chunk) [Directors' Interests in Transactions, Arrangements or Contracts](index=18&type=section&id=Directors'%20Interests%20in%20Transactions,%20Arrangements%20or%20Contracts) No significant transactions, arrangements, or contracts involving material interests of directors or connected entities were entered into by the Group during the period. - During the reporting period, no director or entity connected with a director had a material interest in any significant transactions, arrangements, or contracts of the Group's business[60](index=60&type=chunk) [Directors' Interests in Competing Businesses](index=19&type=section&id=Directors'%20Interests%20in%20Competing%20Businesses) No directors, controlling shareholders, or their associates held interests in competing businesses during or after the reporting period. - During and after the reporting period, none of the directors, controlling shareholders, or substantial shareholders and their close associates had any interest in competing businesses[62](index=62&type=chunk) [Non-Competition Undertaking](index=19&type=section&id=Non-Competition%20Undertaking) Covenantors Mr. Choi King Ting and JC International confirmed compliance with the non-competition undertaking, which independent non-executive directors reviewed and confirmed as fully enforced. - Covenantors Mr. Choi King Ting and JC International confirmed compliance with the terms of the non-competition undertaking during the reporting period[63](index=63&type=chunk) - The independent non-executive directors reviewed and determined that the non-competition undertaking was fully complied with and enforced during the reporting period[63](index=63&type=chunk) [Corporate Governance Practices](index=19&type=section&id=Corporate%20Governance%20Practices) The company's corporate governance code, based on Listing Rules Appendix 14, ensures board quality and transparency; a deviation exists with the Chairman/CEO role, but the Board deems it in the Group's best interest and maintains power balance. - The Company's corporate governance code is established based on the principles set out in the Corporate Governance Code in Appendix 14 to the Listing Rules[64](index=64&type=chunk) - Mr. Choi King Ting concurrently serves as the Company's Chairman and Chief Executive Officer, constituting a deviation from code provision A.2.1, but the Board believes this arrangement is in the best interests of the Group[64](index=64&type=chunk)[66](index=66&type=chunk) - For the six months ended October 31, 2020, the Company complied with all code provisions of the Corporate Governance Code, except for code provision A.2.1[66](index=66&type=chunk) [Events After Reporting Period](index=20&type=section&id=Events%20After%20Reporting%20Period) No significant events affecting the Group occurred after the reporting period and up to the date of this report. - No significant events affecting the Group occurred after the reporting period and up to the date of this report[67](index=67&type=chunk) [Dividends](index=20&type=section&id=Dividends) The Board does not recommend dividend payment for the six months ended October 31, 2020. - The Board does not recommend the payment of dividends for the six months ended October 31, 2020[68](index=68&type=chunk) [Audit and Risk Management Committee](index=21&type=section&id=Audit%20and%20Risk%20Management%20Committee) The Audit and Risk Management Committee, comprising three independent non-executive directors, reviewed the unaudited financial statements, ensuring compliance with accounting standards and Listing Rules, and oversees audit and internal controls. - The Audit and Risk Management Committee comprises three independent non-executive directors, including Mr. Lai Kwok Hung (Chairman), Mr. Yeung Chuen Chau, and Mr. Cüneyt Bülent Bilâloğlu[70](index=70&type=chunk) - The Committee's responsibilities include reviewing the relationship with external auditors, examining financial information, monitoring the financial reporting system and internal control procedures, and overseeing continuing connected transactions[70](index=70&type=chunk) - The Committee reviewed the Group's unaudited condensed consolidated financial statements for this period and deemed them compliant with applicable accounting standards, Listing Rules, and statutory requirements[70](index=70&type=chunk) Review Report on Condensed Consolidated Financial Statements [Review Report on Condensed Consolidated Financial Statements](index=22&type=section&id=Review%20Report%20on%20Condensed%20Consolidated%20Financial%20Statements) Debo CPA Limited reviewed the condensed consolidated financial statements for the six months ended October 31, 2020, concluding no material non-compliance with HKAS 34 based on HK Standard on Review Engagements 2410. - The scope of a review is substantially less than that of an audit conducted in accordance with Hong Kong Standards on Auditing, and consequently, no audit opinion is expressed[74](index=74&type=chunk) - The review concluded that nothing has come to their attention that causes them to believe the condensed consolidated financial statements are not prepared, in all material respects, in accordance with Hong Kong Accounting Standard 34[76](index=76&type=chunk) - The comparative condensed consolidated statement of profit or loss and other comprehensive income, condensed consolidated statement of changes in equity, and condensed consolidated statement of cash flows for the six months ended October 31, 2019, and related explanatory notes were not reviewed in accordance with Hong Kong Standard on Review Engagements 2410[76](index=76&type=chunk) Condensed Consolidated Statement of Profit or Loss and Other Comprehensive Income [Condensed Consolidated Statement of Profit or Loss and Other Comprehensive Income](index=24&type=section&id=Condensed%20Consolidated%20Statement%20of%20Profit%20or%20Loss%20and%20Other%20Comprehensive%20Income) This statement shows the Group's condensed consolidated profit or loss and other comprehensive income, reflecting a significant decline in revenue and profit, with other comprehensive income shifting from loss to gain. - Condensed Consolidated Profit or Loss and Other Comprehensive Income (Six Months Ended October 31) | Indicator | 2020 (Thousand HKD) | 2019 (Thousand HKD) | | :--- | :-------------- | :-------------- | | Revenue | 48,713 | 143,082 | | Gross Profit | 9,427 | 35,146 | | Profit Before Tax | 847 | 16,749 | | Profit for the Period | 348 | 12,771 | | Other Comprehensive Income (Expense) for the Period | 483 | (785) | | Total Comprehensive Income for the Period | 831 | 11,986 | | Basic and Diluted Earnings Per Share (HKD) | 0.01 | 0.40 | Condensed Consolidated Statement of Financial Position [Condensed Consolidated Statement of Financial Position](index=25&type=section&id=Condensed%20Consolidated%20Statement%20of%20Financial%20Position) This statement presents the Group's condensed consolidated financial position, indicating a slight increase in total assets less current liabilities, and growth in net assets and total equity. - Condensed Consolidated Financial Position (As of October 31) | Indicator | October 31, 2020 (Thousand HKD) | April 30, 2020 (Thousand HKD) | | :--- | :---------------------- | :--------------------- | | Non-current Assets | 39,594 | 36,533 | | Current Assets | 116,296 | 122,253 | | Current Liabilities | 27,327 | 32,141 | | Net Current Assets | 88,969 | 90,112 | | Total Assets Less Current Liabilities | 128,563 | 126,645 | | Non-current Liabilities | 2,813 | 1,726 | | Net Assets | 125,750 | 124,919 | | Total Equity | 125,750 | 124,919 | Condensed Consolidated Statement of Changes in Equity [Condensed Consolidated Statement of Changes in Equity](index=27&type=section&id=Condensed%20Consolidated%20Statement%20of%20Changes%20in%20Equity) This statement details the Group's condensed consolidated equity changes, showing a HKD 831 thousand profit and comprehensive income, increasing total equity from HKD 124,919 thousand to HKD 125,750 thousand. - Condensed Consolidated Changes in Equity (Six Months Ended October 31) | Item | Share Capital (Thousand HKD) | Share Premium (Thousand HKD) | Statutory Reserve (Thousand HKD) | Exchange Reserve (Thousand HKD) | Retained Profits (Thousand HKD) | Total (Thousand HKD) | | :--- | :------------ | :---------------- | :---------------- | :---------------- | :---------------- | :------------ | | As at May 1, 2020 (Audited) | 320 | 39,201 | 456 | (601) | 85,543 | 124,919 | | Profit and Total Comprehensive Income for the Period | – | – | – | 483 | 348 | 831 | | As at October 31, 2020 (Unaudited) | 320 | 39,201 | 456 | (118) | 85,891 | 125,750 | - Chinese subsidiaries are required to transfer at least **10%** of their after-tax net profit to a non-distributable statutory reserve until the reserve balance reaches **50%** of their registered capital[83](index=83&type=chunk) Condensed Consolidated Statement of Cash Flows [Condensed Consolidated Statement of Cash Flows](index=28&type=section&id=Condensed%20Consolidated%20Statement%20of%20Cash%20Flows) This statement presents the Group's condensed consolidated cash flows, showing increased operating cash, higher investing outflow, and a shift to financing inflow, resulting in a net increase in cash and equivalents. - Condensed Consolidated Cash Flows (Six Months Ended October 31) | Activity | 2020 (Thousand HKD) | 2019 (Thousand HKD) | | :--- | :-------------- | :-------------- | | Net Cash From Operating Activities | 12,877 | 4,159 | | Net Cash Used in Investing Activities | (10,491) | (2,966) | | Net Cash From (Used in) Financing Activities | 5,838 | (636) | | Net Increase (Decrease) in Cash and Cash Equivalents | 8,224 | 557 | | Cash and Cash Equivalents at End of Period | 43,625 | 44,414 | - The increase in net cash used in investing activities was primarily due to the purchase of financial assets at fair value through profit or loss and deposits paid for the acquisition of self-owned properties[85](index=85&type=chunk) - Net cash from financing activities primarily resulted from new bank borrowings of **HKD 6,551 thousand**[85](index=85&type=chunk) Notes to the Condensed Consolidated Financial Statements [1. General Information](index=29&type=section&id=1.%20General%20Information) Wah Sun Holdings Limited, incorporated in the Cayman Islands, transferred to the Main Board on March 20, 2020, primarily providing apparel design, procurement, and consulting services, with financial statements in HKD. - The Company successfully transferred its listing from GEM to the Main Board of The Stock Exchange of Hong Kong Limited on March 20, 2020[87](index=87&type=chunk) - The Group is primarily engaged in providing apparel product design and procurement services for branded fashion retailers and offering consulting services[88](index=88&type=chunk) - The condensed consolidated financial statements are presented in HKD, although the Company's functional currency is USD[88](index=88&type=chunk) [2. Basis of Preparation of Condensed Consolidated Financial Statements](index=30&type=section&id=2.%20Basis%20of%20Preparation%20of%20Condensed%20Consolidated%20Financial%20Statements) The Group's condensed consolidated financial statements are prepared under HKFRSs, HKAS, and Hong Kong Companies Ordinance disclosure requirements, using the historical cost basis. - The condensed consolidated financial statements are prepared in accordance with Hong Kong Financial Reporting Standards, Hong Kong Accounting Standards, and Interpretations, as well as the disclosure requirements of the Hong Kong Companies Ordinance[90](index=90&type=chunk) - The condensed consolidated financial statements are prepared on a historical cost basis[90](index=90&type=chunk) [3. Adoption of New and Revised Hong Kong Financial Reporting Standards ("HKFRSs")](index=30&type=section&id=3.%20Adoption%20of%20New%20and%20Revised%20Hong%20Kong%20Financial%20Reporting%20Standards%20(%22HKFRSs%22)) New and revised HKFRSs, including HKFRS 3, HKAS 1 & 8, and HKFRS 9, 39 & 7, were adopted this period with no significant financial impact. - HKFRS 3 (Revised) "Definition of a Business", HKAS 1 and 8 (Revised) "Definition of Material", and HKFRS 9, 39, and 7 (Revised) "Interest Rate Benchmark Reform" were first applied during this interim period[91](index=91&type=chunk) - The application of the revised HKFRSs had no significant impact on the Group's financial position and performance for this period and prior periods[91](index=91&type=chunk) [4. Revenue and Segment Information](index=31&type=section&id=4.%20Revenue%20and%20Segment%20Information) The Group's revenue from apparel product supply and consulting services saw internal reporting restructuring; product revenue is recognized upon control transfer, and service revenue over time. - The Group primarily sells apparel products and provides apparel design and procurement services to fast fashion apparel retailers, and offers consulting services[93](index=93&type=chunk) - The Group reorganized its internal reporting structure, merging the online fashion retailer segment with the fashion retailer segment, and prior period segment disclosures have been restated[93](index=93&type=chunk) - Segment Revenue and Profit (Six Months Ended October 31) | Segment | 2020 Revenue (Thousand HKD) | 2020 Profit (Thousand HKD) | 2019 Revenue (Thousand HKD) | 2019 Profit (Thousand HKD) | | :--- | :------------------ | :------------------ | :------------------ | :------------------ | | Supply of Apparel Products | 48,013 | 723 | 141,882 | 21,276 | | Consulting Services | 700 | 513 | 1,200 | 867 | | **Consolidated Total** | **48,713** | **1,236** | **143,082** | **22,143** | - Revenue by Product/Service Category (Six Months Ended October 31) | Product/Service Category | 2020 (Thousand HKD) | 2019 (Thousand HKD) | | :------------ | :-------------- | :-------------- | | Women's Wear | 45,385 | 136,152 | | Children's Wear | 2,628 | 5,730 | | Consulting Services | 700 | 1,200 | | **Total** | **48,713** | **143,082** | [5. Other Income and Net Losses](index=35&type=section&id=5.%20Other%20Income%20and%20Net%20Losses) A net loss of HKD 721 thousand was recorded, mainly from intangible asset impairment (HKD 538 thousand) and exchange losses (HKD 183 thousand), a reduction from the prior year's loss. - Other Income and Net Losses (Six Months Ended October 31) | Item | 2020 (Thousand HKD) | 2019 (Thousand HKD) | | :--- | :-------------- | :-------------- | | Impairment loss recognized on intangible assets | (538) | – | | Net exchange loss | (183) | (1,365) | | Gain on disposal of property, plant and equipment | – | 288 | | **Total** | **(721)** | **(1,077)** | [6. Profit Before Tax](index=35&type=section&id=6.%20Profit%20Before%20Tax) Profit before tax was reduced by depreciation (property, right-of-use, investment property), intangible asset amortization, and finance costs totaling HKD 1,701 thousand. - Items Deducted from Profit Before Tax (Six Months Ended October 31) | Item | 2020 (Thousand HKD) | 2019 (Thousand HKD) | | :--- | :-------------- | :-------------- | | Depreciation of property, plant and equipment | 520 | 535 | | Depreciation of right-of-use assets | 604 | 609 | | Depreciation of investment property | 50 | – | | Amortization of intangible assets | 403 | 100 | | Finance costs | 124 | 90 | - Bank interest expense of **HKD 57 thousand** on bank borrowings was accounted for in finance costs and secured by bond investments and personal guarantees[107](index=107&type=chunk) [7. Income Tax Expense](index=36&type=section&id=7.%20Income%20Tax%20Expense) Income tax expense was HKD 499 thousand, including Hong Kong profits tax (net of over-provision) and deferred tax, with varying corporate tax rates across jurisdictions. - Income Tax Expense (Six Months Ended October 31) | Item | 2020 (Thousand HKD) | 2019 (Thousand HKD) | | :--- | :-------------- | :-------------- | | Current tax: Hong Kong profits tax | 35 | 3,787 | | Current tax: China corporate income tax | – | 253 | | Over-provision in prior years: Hong Kong | (246) | (184) | | Deferred tax expense | 710 | 122 | | **Total** | **499** | **3,978** | - Hong Kong profits tax adopts a two-tiered rate system, with a tax rate of **8.25%** for the first **HKD 2,000,000** of assessable profits and **16.5%** for the remaining portion[109](index=109&type=chunk) - The statutory corporate income tax rate in China is **25%**, and the corporate tax rate in the UK is **19%**[110](index=110&type=chunk)[111](index=111&type=chunk) [8. Dividends](index=37&type=section&id=8.%20Dividends) No dividends were paid or proposed to ordinary shareholders during or after the six months ended October 31, 2020. - No dividends were paid or proposed during or after the reporting period[113](index=113&type=chunk) [9. Basic and Diluted Earnings Per Share](index=37&type=section&id=9.%20Basic%20and%20Diluted%20Earnings%20Per%20Share) Basic earnings per share significantly decreased to HKD 0.01 from HKD 0.40; diluted EPS is not presented due to no potential ordinary shares. - Basic Earnings Per Share Calculation (Six Months Ended October 31) | Indicator | 2020 | 2019 | | :--- | :----- | :----- | | Profit for the purpose of calculating basic earnings per share (Thousand HKD) | 348 | 12,771 | | Number of ordinary shares (Thousand shares) | 32,000 | 32,000 | | Basic Earnings Per Share (HKD) | 0.01 | 0.40 | - Diluted earnings per share are not presented as no potential ordinary shares were issued in either period[114](index=114&type=chunk) [10. Property, Plant and Equipment](index=37&type=section&id=10.%20Property,%20Plant%20and%20Equipment) Property, plant, and equipment additions included HKD 432 thousand for fixtures and furniture, and HKD 2,594 thousand for self-owned property renovation in progress. - Property, Plant and Equipment Additions (Six Months Ended October 31) | Item | 2020 (Thousand HKD) | 2019 (Thousand HKD) | | :--- | :-------------- | :-------------- | | Fixtures and furniture | 432 | - | | Land and buildings and motor vehicles | - | 2,900 | | Construction in progress for renovation of self-owned properties | 2,594 | 1,848 | [11. Deposits Paid for Acquisition of Intangible Assets / Acquisition / Renovation of Self-Owned Properties / Trade and Other Receivables](index=38&type=section&id=11.%20Deposits%20Paid%20for%20Acquisition%20of%20Intangible%20Assets%20/%20Acquisition%20/%20Renovation%20of%20Self-Owned%20Properties%20/%20Trade%20and%20Other%20Receivables) Trade receivables (net of allowances) decreased significantly to HKD 27,522 thousand; other receivables included HKD 30,344 thousand in deposits and prepayments, with credit terms up to 90 days. - Trade and Other Receivables (As of October 31) | Item | October 31, 2020 (Thousand HKD) | April 30, 2020 (Thousand HKD) | | :--- | :---------------------- | :--------------------- | | Trade receivables | 29,521 | 62,363 | | Less: Allowance for credit losses | (1,999) | (3,167) | | **Net Trade Receivables** | **27,522** | **59,196** | | Other receivables: Deposits and prepayments | 30,344 | 24,353 | | Other receivables: Deposits paid for acquisition of intangible assets | – | 5,324 | | Other receivables: Deposits paid for acquisition/renovation of self-owned properties | 2,000 | 1,238 | | **Total Trade and Other Receivables** | **62,815** | **92,847** | - Ageing Analysis of Trade Receivables (Net of Allowance for Credit Losses, As of October 31) | Ageing | October 31, 2020 (Thousand HKD) | April 30, 2020 (Thousand HKD) | | :--- | :---------------------- | :--------------------- | | Within 60 days | 18,947 | 26,301 | | 61 to 180 days | 6,796 | 31,616 | | 181 to 365 days | 767 | 421 | | Over 365 days | 1,012 | 858 | | **Total** | **27,522** | **59,196** | - The Group grants credit terms of no more than **90 days** to customers with good credit quality and payment records[119](index=119&type=chunk) [12. Trade and Other Payables](index=40&type=section&id=12.%20Trade%20and%20Other%20Payables) Total trade and other payables decreased to HKD 20,237 thousand, with trade payables having a credit period of 30 to 90 days. - Trade and Other Payables (As of October 31) | Item | October 31, 2020 (Thousand HKD) | April 30, 2020 (Thousand HKD) | | :--- | :---------------------- | :--------------------- | | Trade payables | 15,535 | 22,124 | | Other payables | 3,263 | 2,966 | | Accrued expenses | 1,439 | 1,788 | | **Total** | **20,237** | **26,878** | - Ageing Analysis of Trade Payables (As of October 31) | Ageing | October 31, 2020 (Thousand HKD) | April 30, 2020 (Thousand HKD) | | :--- | :---------------------- | :--------------------- | | Within 60 days | 12,118 | 16,424 | | 61 to 180 days | 3,197 | 5,087 | | 181 to 365 days | 203 | 436 | | Over 365 days | 17 | 177 | | **Total** | **15,535** | **22,124** | [13. Bank Borrowings](index=41&type=section&id=13.%20Bank%20Borrowings) New bank borrowings of HKD 6,551 thousand were secured for working capital and bond investments, bearing floating rates, repayable within one year, and collateralized by bonds and personal guarantee. - The Group obtained new bank borrowings of approximately **HKD 6,551 thousand** during the reporting period for general working capital and the purchase of bond investments[124](index=124&type=chunk) - Bank borrowings bear floating interest rates, are repayable within one year or on demand, and are secured by bond investments and Mr. Choi King Ting's personal guarantee[124](index=124&type=chunk) [14. Share Capital](index=41&type=section&id=14.%20Share%20Capital) The company's authorized share capital is HKD 2,000,000 (200,000,000 shares at HKD 0.01 par), with issued and paid-up capital of HKD 320,000 (32,000,000 shares), unchanged across periods. - Share Capital Details (As of October 31) | Item | Number of Shares | Share Capital (HKD) | | :--- | :------- | :---------- | | Authorized Share Capital | 200,000,000 | 2,000,000 | | Issued and Fully Paid Share Capital | 32,000,000 | 320,000 | - The Company's authorized and issued share capital remained unchanged in both periods[125](index=125&type=chunk) [15. Related Party Disclosures](index=42&type=section&id=15.%20Related%20Party%20Disclosures) The Group incurred lease-related expenses with related parties; total remuneration for directors and key management personnel was HKD 1,123 thousand. - Related Party Transactions (Six Months Ended October 31) | Transaction Nature | 2020 (Thousand HKD) | 2019 (Thousand HKD) | | :------- | :-------------- | :-------------- | | Interest expense on lease liabilities | 62 | 70 | | Expenses related to short-term leases | 48 | 37 | | Lease expenses | – | 93 | | Lease liabilities | 1,788 | 1,898 | - Key Management Personnel Remuneration (Six Months Ended October 31) | Item | 2020 (Thousand HKD) | 2019 (Thousand HKD) | | :--- | :-------------- | :-------------- | | Salaries and allowances | 1,070 | 1,062 | | Contributions to retirement benefit schemes | 53 | 39 | | **Total** | **1,123** | **1,101** | [16. Capital Commitments](index=43&type=section&id=16.%20Capital%20Commitments) As of October 31, 2020, the Group had no contracted capital expenditures, a decrease from HKD 1,653 thousand previously, related to intangible assets and property renovation. - Capital Commitments (Contracted but Unprovided, As of October 31) | Item | October 31, 2020 (Thousand HKD) | April 30, 2020 (Thousand HKD) | | :--- | :---------------------- | :--------------------- | | Acquisition of intangible assets | – | 947 | | Renovation of self-owned properties | – | 706 | | **Total** | **–** | **1,653** |

Financial Performance - The company achieved revenue of approximately HKD 257.3 million for the fiscal year ending April 30, 2020, representing an increase of about 25.9% compared to HKD 204.4 million for the previous year[21]. - Revenue from the supply of apparel products to brand fashion retailers and wholesalers increased by 27.5% to approximately HKD 254.9 million, driven by sales increases from two major customers[26]. - The company's revenue increased by 25.9% to approximately HKD 257.3 million for the year, up from approximately HKD 204.4 million in the previous year[29]. - Sales and service costs rose by 28.1% to approximately HKD 197 million, compared to HKD 153.8 million in the previous year, aligning with the revenue increase[31]. - Gross profit increased by 19.2% to approximately HKD 60.3 million, with a gross margin of 23.4%, down from 24.8% in the previous year[32]. - Other income recorded a net amount of approximately HKD 1.1 million, a significant increase of 140.7% from a loss of HKD 2.7 million in the previous year[33]. - Administrative expenses surged by 57.4% to approximately HKD 15.9 million, primarily due to increased depreciation and employee salaries[35]. - Basic earnings per share decreased by approximately 12.3% to HKD 0.50, down from HKD 0.57 in the previous year[40]. - The company did not recommend the payment of dividends for the year, consistent with the previous year[44]. Impact of COVID-19 - The company plans to closely monitor the impact of COVID-19 on its operations and implement cost control measures to mitigate adverse effects on cash flow and financial resources[22]. - The company acknowledges the significant challenges and uncertainties posed by the COVID-19 pandemic on its business operations[22]. - The company anticipates a significant decline in product demand due to the adverse financial and operational impacts of COVID-19, which may negatively affect future operational performance[75]. - The board will continue to assess the impact of COVID-19 on the company's operations and financial performance, implementing cost control measures as necessary[75]. Business Strategy and Development - The company will continue to evaluate existing business strategies and explore suitable business and investment opportunities for sustainable and stable development[22]. - The company aims to attract new institutional investors and broaden its investor base through its successful transfer of listing to the main board of the Hong Kong Stock Exchange[20]. - The company emphasizes the importance of maintaining existing customer relationships and enhancing its ability to provide customized apparel design and procurement services[26]. - The company plans to enhance its customized integrated apparel design and procurement services to meet existing and potential customer needs[75]. - The board will continue to explore suitable business and investment opportunities to create new profit growth drivers for sustainable development[75]. Risk Management - The company faces several risks, including reliance on major customers without long-term contracts, leading to revenue uncertainty[76]. - There is a risk of reduced orders from UK customers, with no guarantee that losses can be compensated by other markets[76]. - The company operates in a highly competitive market, which may lead to a decrease in market share and profit margins[76]. - The company faces several major risks, including currency risk, interest rate risk, credit risk, and liquidity risk, which could impact financial performance and operational results[147]. - The company has implemented a three-tier corporate governance structure for risk monitoring, involving operational management, financial team risk management, and independent internal audits[149]. Corporate Governance - The company has complied with all corporate governance code provisions except for provision A.2.1, which states that the roles of chairman and CEO should be separate[99]. - The board consists of two executive directors and three independent non-executive directors, ensuring a balance of skills and experience[100]. - The board meets at least four times a year, with additional meetings held as necessary, ensuring adequate oversight of strategic goals and financial matters[99]. - The company has established committees for audit and risk management, remuneration, and nomination, with independent directors leading these committees[102]. - The company regularly reviews its board composition to maintain an appropriate balance of independence and effective management[102]. Environmental Responsibility - The company reported a decrease in indirect greenhouse gas emissions from 57.32 tons in 2019 to 34.66 tons in 2020[187]. - The company has not recorded any significant air pollutants during the reporting year, indicating minimal environmental impact from operations[180]. - The company emphasizes sustainable development and corporate responsibility, balancing business growth with environmental and social considerations[167]. - The company has adopted various strategies to achieve sustainability, including environmental sustainability and community development[168]. - The company operates without direct textile production, resulting in limited hazardous waste generation[177]. Employee Welfare - The group employed a total of 49 and 44 employees as of April 30, 2020, and 2019, respectively, with total employee benefit expenses amounting to approximately HKD 12,200,000 and HKD 7,000,000 for the respective years[53]. - Employee compensation is determined based on market conditions and individual performance, with total employee benefit expenses including director remuneration[53]. - The company maintains a focus on employee welfare, providing reasonable compensation and a safe working environment[200].