markdown [Management Discussion and Analysis](index=3&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 overview of the company's operational and financial performance, liquidity, and future outlook [Business Review](index=3&type=section&id=%E6%A5%AD%E5%8B%99%E5%9B%9E%E9%A1%A7) As a clothing design and sourcing service provider for branded fashion retailers and wholesalers, the Group's revenue decreased by **16.8%** during the reporting period due to weak global demand caused by the COVID-19 pandemic and geopolitical tensions. Despite challenges, the Group continues to enhance its ability to provide customized integrated services within short lead times - Revenue for the period decreased by **16.8%** from approximately **HKD 70.8 million** to approximately **HKD 58.9 million**[3](index=3&type=chunk) - Revenue decrease primarily due to the COVID-19 pandemic and geopolitical tensions, leading to weak global demand and an exacerbated energy crisis in Europe[3](index=3&type=chunk) - The Group continues to enhance its ability to provide customized integrated apparel design and sourcing services to customers within shorter lead times to strengthen customer relationships[3](index=3&type=chunk) [Financial Review](index=3&type=section&id=%E8%B2%A1%E5%8B%99%E5%9B%9E%E9%A1%A7) The Group's financial performance significantly deteriorated during the period, with substantial declines in both revenue and gross profit, and an expanded loss for the period. This was primarily affected by reduced orders from UK customers, sales discounts, and unrealized losses on financial assets. While administrative expenses slightly increased, selling and distribution expenses were controlled [Revenue](index=3&type=section&id=%E6%94%B6%E7%9B%8A) This chapter covers revenue Revenue Comparison | Metric | Six Months Ended October 31, 2022 (HKD) | Six Months Ended October 31, 2021 (HKD) | Change Rate | | :--- | :-------------------------------------- | :-------------------------------------- | :---------- | | Revenue | 58,900,000 | 70,800,000 | -16.8% | - Revenue decrease primarily due to reduced purchase orders from a major UK-based customer and sales discounts granted at customer request[4](index=4&type=chunk) - Reduced demand from UK customers is due to their end-customers facing accelerating inflation and pressure on disposable income[4](index=4&type=chunk) [Cost of Sales](index=4&type=section&id=%E9%8A%B7%E5%94%AE%E6%88%90%E6%9C%AC) This chapter covers cost of sales Cost of Sales Comparison | Metric | Six Months Ended October 31, 2022 (HKD) | Six Months Ended October 31, 2021 (HKD) | Change Rate | | :--- | :-------------------------------------- | :-------------------------------------- | :---------- | | Cost of Sales | 48,300,000 | 54,300,000 | -11.0% | - The decrease in cost of sales is consistent with the decrease in revenue for the period[6](index=6&type=chunk) [Gross Profit and Gross Margin](index=4&type=section&id=%E6%AF%9B%E5%88%A9%E5%8F%8A%E6%AF%9B%E5%88%A9%E7%8E%87) This chapter covers gross profit and gross margin Gross Profit and Gross Margin Comparison | Metric | Six Months Ended October 31, 2022 (HKD) | Six Months Ended October 31, 2021 (HKD) | Change Rate | | :--- | :-------------------------------------- | :-------------------------------------- | :---------- | | Gross Profit | 10,600,000 | 16,500,000 | -35.8% | | Gross Margin | 18.0% | 23.3% | -5.3 percentage points | - Gross margin decrease primarily due to sales discounts granted to customers and additional production costs incurred from rescheduling shipments[7](index=7&type=chunk) [Net Other Income](index=4&type=section&id=%E5%85%B6%E4%BB%96%E6%94%B6%E7%9B%8A%E6%B7%A8%E9%A1%8D) This chapter covers net other income Net Other Income Comparison | Metric | Six Months Ended October 31, 2022 (HKD) | Six Months Ended October 31, 2021 (HKD) | | :--- | :-------------------------------------- | :-------------------------------------- | | Net Other Foreign Exchange Gains | 200,000 | 300,000 | - Foreign exchange gains from RMB depreciation mitigated the impact of GBP depreciation[8](index=8&type=chunk) [Net Unrealized Loss on Financial Assets at Fair Value Through Profit or Loss](index=4&type=section&id=%E6%8C%89%E5%85%AC%E5%B9%B3%E5%80%BC%E8%A8%88%E5%85%A5%E6%90%8D%E7%9B%8A%EF%BC%88%E3%80%8C%E6%8C%89%E5%85%AC%E5%B9%B3%E5%80%BC%E8%A8%88%E5%85%A5%E6%90%8D%E7%9B%8A%E3%80%D7%EF%BC%89%E7%9A%84%E8%B2%A1%E5%8B%99%E8%B3%87%E7%94%A2%E7%9A%84%E6%9C%AA%E8%AE%8A%E7%8F%BE%E8%99%A7%E6%90%8D%E6%B7%A8%E9%A1%8D) This chapter covers net unrealized loss on financial assets at fair value through profit or loss Net Unrealized Loss Comparison | Metric | Six Months Ended October 31, 2022 (HKD) | Six Months Ended October 31, 2021 (HKD) | | :--- | :-------------------------------------- | :-------------------------------------- | | Net Unrealized Loss | 2,100,000 | 200,000 | - The Group will continue to prudently explore suitable investment opportunities to enhance the interests of the Company and its shareholders[9](index=9&type=chunk) [Net Reversal of Impairment Loss (Impairment Loss) on Financial Assets](index=5&type=section&id=%E5%B0%B1%E8%B2%A1%E5%8B%99%E8%B3%87%E7%94%A2%E7%A2%BA%E8%AA%8D%E7%9A%84%E6%B8%9B%E5%80%BC%E8%99%A7%E6%90%8D%E6%92%A5%E5%9B%9E%EF%BC%88%E6%B8%9B%E5%80%BC%E8%99%A7%E6%90%8D%EF%BC%89%E6%B7%A8%E9%A1%8D) This chapter covers net reversal of impairment loss (impairment loss) on financial assets Net Reversal of Impairment Loss (Provision) Comparison | Metric | Six Months Ended October 31, 2022 (HKD) | Six Months Ended October 31, 2021 (HKD) | | :--- | :-------------------------------------- | :-------------------------------------- | | Net Reversal of Impairment Loss (Provision) | 100,000 (Reversal) | 700,000 (Provision) | - Lower provision for credit losses on trade receivables was recorded for the period, mainly due to reduced trade receivables from major customers and forward-looking factors considered in the assessment[11](index=11&type=chunk) [Administrative Expenses](index=5&type=section&id=%E8%A1%8C%E6%94%BF%E9%96%8B%E6%94%AF) This chapter covers administrative expenses Administrative Expenses Comparison | Metric | Six Months Ended October 31, 2022 (HKD) | Six Months Ended October 31, 2021 (HKD) | Change Rate | | :--- | :-------------------------------------- | :-------------------------------------- | :---------- | | Administrative Expenses | 8,900,000 | 8,700,000 | +2.3% | - Administrative expenses increased primarily due to an increase in employee benefits expenses of approximately **HKD 4.0 million** resulting from an increase in headcount to strengthen the back-office team for new markets and customers[12](index=12&type=chunk) [Selling and Distribution Expenses](index=5&type=section&id=%E9%8A%B7%E5%94%AE%E5%8F%8A%E5%88%86%E9%8A%B7%E9%96%8B%E6%94%AF) This chapter covers selling and distribution expenses Selling and Distribution Expenses Comparison | Metric | Six Months Ended October 31, 2022 (HKD) | Six Months Ended October 31, 2021 (HKD) | Change Rate | | :--- | :-------------------------------------- | :-------------------------------------- | :---------- | | Selling and Distribution Expenses | 6,000,000 | 7,800,000 | -23.1% | - Selling and distribution expenses decreased primarily due to reduced delivery orders from a major UK-based customer, leading to a decrease in transportation and logistics expenses of approximately **HKD 0.8 million**[13](index=13&type=chunk) [Loss for the Period](index=6&type=section&id=%E6%9C%9F%E5%85%A7%E8%99%A7%E6%90%8D) This chapter covers loss for the period Loss for the Period Comparison | Metric | Six Months Ended October 31, 2022 (HKD) | Six Months Ended October 31, 2021 (HKD) | | :--- | :-------------------------------------- | :-------------------------------------- | | Loss for the Period | 4,300,000 | 600,000 | - The increase in loss was primarily due to decreased revenue, reduced purchase orders from a major UK customer, and net unrealized losses on financial assets at fair value through profit or loss recorded during the period[15](index=15&type=chunk) [Total Comprehensive Expenses Attributable to Owners of the Company](index=6&type=section&id=%E6%9C%AC%E5%85%AC%E5%8F%B8%E6%93%81%E6%9C%89%E4%BA%BA%E6%87%89%E4%BD%94%E5%85%A8%E9%9D%A2%E9%96%8B%E6%94%AF%E7%B8%BD%E9%A1%8D) This chapter covers total comprehensive expenses attributable to owners of the company Total Comprehensive Expenses Comparison | Metric | Six Months Ended October 31, 2022 (HKD) | Six Months Ended October 31, 2021 (HKD) | | :--- | :-------------------------------------- | :-------------------------------------- | | Total Comprehensive Expenses | 6,200,000 | 600,000 | - The increase in total comprehensive expenses was primarily due to decreased revenue, reduced purchase orders from a major UK customer, net unrealized losses on financial assets at fair value through profit or loss, and fair value losses on financial instruments at fair value through other comprehensive income[16](index=16&type=chunk) [Basic Loss Per Share](index=6&type=section&id=%E6%AF%8F%E8%82%A1%E5%9F%BA%E6%9C%AC%E8%99%A7%E6%90%8D) This chapter covers basic loss per share Basic Loss Per Share Comparison | Metric | Six Months Ended October 31, 2022 (HKD) | Six Months Ended October 31, 2021 (HKD) | | :--- | :-------------------------------------- | :-------------------------------------- | | Basic Loss Per Share | 0.13 | 0.02 | [Liquidity and Financial Resources](index=6&type=section&id=%E6%B5%81%E5%8B%95%E8%B3%87%E9%87%91%E5%8F%8A%E8%B2%A1%E5%8B%99%E8%B3%87%E6%BA%90) The Group maintains a sound financial position, with a slight decrease in net current assets but an improvement in the current ratio. The debt-to-equity ratio increased, reflecting changes in the liability structure Liquidity and Financial Resources Comparison | Metric | October 31, 2022 (HKD) | April 30, 2022 (HKD) | | :--- | :-------------------- | :-------------------- | | Net Current Assets | 87,900,000 | 90,500,000 | | Bank Balances and Cash | 45,800,000 | 46,100,000 | | Current Ratio | 5.2 | 5.0 | | Debt-to-Equity Ratio | 0.1005 | 0.0545 | [Treasury Policy](index=7&type=section&id=%E5%BA%AB%E5%8B%99%E6%94%BF%E7%AD%96) The Group adopts a prudent treasury policy, effectively managing credit risk and ensuring funding needs through continuous customer credit assessment and close monitoring of liquidity by the Board - The Group adopts a prudent treasury policy, continuously assessing customer credit to mitigate credit risk[20](index=20&type=chunk) - The Board closely monitors the Group's liquidity position to ensure the liquidity structure of assets, liabilities, and commitments meets its funding requirements[20](index=20&type=chunk) [Commitments](index=7&type=section&id=%E6%89%BF%E6%93%94) As of the end of the reporting period, the Group had no contracted but unprovided capital commitments in its unaudited condensed consolidated financial statements - As of October 31, 2022, and April 30, 2022, the Group had no contracted but unprovided capital commitments[21](index=21&type=chunk) [Capital Structure](index=7&type=section&id=%E8%B3%87%E6%9C%AC%E7%B5%90%E6%A7%8B) The Company's issued share capital remained stable at **HKD 320,000**, divided into **32,000,000** shares of **HKD 0.01** par value each - As of October 31, 2022, and April 30, 2022, the Company's issued share capital was **HKD 320,000**, divided into **32,000,000** shares of **HKD 0.01** par value each[22](index=22&type=chunk) [Material Investments](index=7&type=section&id=%E9%87%8D%E5%A4%A7%E6%8A%95%E8%B3%87) As of the end of the reporting period, the Group held no material investments - As of October 31, 2022, and April 30, 2022, the Group held no material investments[23](index=23&type=chunk) [Material Acquisitions or Disposals of Subsidiaries and Affiliated Companies](index=7&type=section&id=%E9%87%8D%E5%A4%A7%E6%94%B6%E8%B3%BC%E6%88%96%E5%87%BA%E5%94%AE%E9%99%84%E5%B1%AC%E5%85%AC%E5%8F%B8%E5%8F%8A%E8%81%AF%E5%B1%AC%E5%85%AC%E5%8F%B8) As of the end of the reporting period, the Group did not undertake any material acquisitions or disposals of subsidiaries and affiliated companies - The Group had no material acquisitions or disposals of subsidiaries and affiliated companies for the six months ended October 31, 2022[24](index=24&type=chunk) [Future Plans for Material Investments and Capital Assets](index=7&type=section&id=%E9%87%8D%E5%A4%A7%E6%8A%95%E8%B3%87%E5%8F%8A%E8%B3%87%E6%9C%AC%E8%B3%87%E7%94%A2%E7%9A%84%E6%9C%AA%E4%BE%86%E8%A8%88%E5%8A%83) Except for plans disclosed in the prospectus, the Group currently has no other material investment and capital asset plans - Except as disclosed in the Company's prospectus dated February 28, 2017, for the listing of shares on GEM of the Stock Exchange, the Group currently has no other material investment and capital asset plans[25](index=25&type=chunk) [Contingent Liabilities](index=8&type=section&id=%E6%88%96%E7%84%B6%E8%B2%A0%E5%82%B5) As of the end of the reporting period, the Group had no material contingent liabilities - As of October 31, 2022, and April 30, 2022, the Group had no material contingent liabilities[27](index=27&type=chunk) [Foreign Exchange Risk](index=8&type=section&id=%E5%A4%96%E5%8C%AF%E9%A2%A8%E9%9A%AA) The Group's currency risk is primarily related to HKD and GBP, with HKD risk being immaterial. Management is working to change sales invoice currency from GBP to USD to reduce exchange rate risk, but currently has no foreign exchange hedging measures in place - The Group's currency risk is primarily related to HKD and GBP, with HKD risk being immaterial[28](index=28&type=chunk) - Management is committed to changing sales invoice currency from GBP to USD to minimize exchange rate risk arising from GBP fluctuations[28](index=28&type=chunk) - The Group currently has no foreign exchange hedging measures in place[28](index=28&type=chunk) [Pledge of Assets](index=8&type=section&id=%E8%B3%87%E7%94%A2%E6%8A%B5%E6%8A%BC) As of the end of the reporting period, the Group had no leased assets pledged by lessors under finance leases - As of October 31, 2022, and April 30, 2022, the Group had no leased assets pledged by lessors under finance leases[29](index=29&type=chunk) [Employees and Remuneration Policy](index=8&type=section&id=%E5%83%B1%E5%93%A1%E5%8F%8A%E8%96%AA%E9%85%AC%E6%94%BF%E7%AD%96) The Group's employee headcount decreased, but total employee benefits expenses slightly increased. Remuneration policy is based on market conditions, individual performance, qualifications, and experience, with year-end bonuses to incentivize outstanding employees Employee Headcount and Benefits Expenses Comparison | Metric | October 31, 2022 | April 30, 2022 | | :--- | :------------- | :------------- | | Number of Employees | 64 | 73 | | Metric | Six Months Ended October 31, 2022 (HKD) | Six Months Ended October 31, 2021 (HKD) | | :--- | :-------------------------------------- | :-------------------------------------- | | Total Employee Benefits Expenses | 7,000,000 | 6,500,000 | - Remuneration is determined based on market conditions, individual employee performance, qualifications, and experience, with discretionary year-end bonuses for outstanding employees[30](index=30&type=chunk) [Compliance with Laws and Regulations](index=9&type=section&id=%E9%81%B5%E5%AE%88%E6%B3%95%E4%BE%8B%E5%8F%8A%E6%B3%95%E8%A6%8F) The Group has complied with all relevant laws and regulations in Hong Kong and China during the period, and in terms of disclosure and corporate governance, it complies with the requirements of the Companies Act of the Cayman Islands, the Listing Rules of the Stock Exchange, and the Securities and Futures Ordinance - The Group has complied with all relevant laws and regulations in Hong Kong and China during the period[32](index=32&type=chunk) - In terms of disclosure and corporate governance, the Group complies with the requirements of the Companies Act of the Cayman Islands, the Listing Rules of the Stock Exchange, and the Securities and Futures Ordinance[32](index=32&type=chunk) [Environmental Policy](index=9&type=section&id=%E7%92%B0%E4%BF%9D%E6%94%BF%E7%AD%96) The Group is committed to minimizing the adverse environmental impact of its daily operations through measures such as energy saving and office resource recycling, and complies with all relevant environmental, health, and safety regulations - The Group strives to minimize the adverse environmental impact of its daily operations through energy saving and office resource recycling[33](index=33&type=chunk) - The Group has complied with all relevant laws and regulations related to environmental protection, health and safety, working conditions, and employment[33](index=33&type=chunk) [Relationship with Stakeholders](index=9&type=section&id=%E8%88%87%E5%88%A9%E7%9B%8A%E7%9B%B8%E9%97%9C%E6%96%B9%E7%9A%84%E9%97%9C%E4%BF%82) The Group values good relationships with employees, customers, and suppliers. It provides benefits to employees and complies with labor laws; offers quality services to customers and builds long-term business relationships; and maintains effective communication with suppliers, with no major disputes during the period - The Group regards employees as valuable assets, strictly complies with labor laws, and provides benefits such as medical insurance[34](index=34&type=chunk) - The Group provides quality services to customers and establishes long-term business relationships through direct communication via databases[34](index=34&type=chunk) - The Group maintains effective communication and long-term trust with suppliers, with no material disputes or disagreements during the period[34](index=34&type=chunk) [Comparison of Business Strategies with Actual Business Progress](index=10&type=section&id=%E6%A5%AD%E5%8B%99%E7%AD%96%E7%95%A5%E8%88%87%E5%AF%A6%E9%9A%9B%E6%A5%AD%E5%8B%99%E9%80%B2%E5%B1%95%E4%B9%8B%E6%AF%94%E8%BC%83) The Group has made actual progress against its business strategies outlined in the prospectus, including strengthening customer relationships, enhancing design and development, expanding the supplier base, broadening the product portfolio, and enhancing corporate image, by establishing showrooms, recruiting designers, setting up sourcing offices, and expanding product lines - **Strengthen existing customer relationships and develop new customer relationships**: Acquired property to establish a flagship showroom, launched an online platform, and recruited an Assistant General Manager to develop customer business relationships[38](index=38&type=chunk) - **Further enhance design and development capabilities**: Recruited two designers in the UK in May 2019[38](index=38&type=chunk) - **Expand the geographical base of third-party suppliers and broaden the supplier base**: Established two Chinese subsidiaries as sourcing offices in China[38](index=38&type=chunk) - **Broaden the Group's product portfolio**: Received the first knitwear product order in May 2017[38](index=38&type=chunk) - **Enhance the Group's corporate image to attract customer attention**: Plans to participate in trade shows in the UK and Europe during the year ending April 30, 2023[38](index=38&type=chunk) [Use of Proceeds](index=11&type=section&id=%E6%89%80%E5%BE%97%E6%AC%BE%E9%A0%85%E7%94%A8%E9%80%94) The net proceeds from the share offer were **HKD 44.4 million**. As of October 31, 2022, **HKD 43.084 million** had been utilized, with **HKD 1.328 million** unutilized, primarily for strengthening customer relationships and enhancing corporate image - The net proceeds from the share offer were approximately **HKD 44.4 million**[40](index=40&type=chunk) Adjusted Allocation and Actual Use of Net Proceeds | Business Strategies in Prospectus | Adjusted Allocation of Net Proceeds (thousand HKD) | Actual Use (thousand HKD) | Unutilized (thousand HKD) | | :------------------------------ | :----------------------------------------------- | :------------------------ | :------------------------ | | Strengthen existing customer relationships and develop new customers | 27,464 | 26,735 | 729 | | Enhance design and development capabilities | 4,703 | 4,703 | – | | Expand supplier geographical base and broaden supplier base | 5,191 | 5,191 | – | | Enhance corporate image | 2,662 | 2,063 | 599 | | General working capital | 4,392 | 4,392 | – | | **Total** | **44,412** | **43,084** | **1,328** | [Future Outlook](index=12&type=section&id=%E6%9C%AA%E4%BE%86%E5%B1%95%E6%9C%9B) Facing a global economy in 2023 that is expected to underperform market expectations, a cost of living crisis, the Russia-Ukraine war, and the ongoing impact of the COVID-19 pandemic, the Group will implement cost control measures, actively seek potential customers, strengthen customized services, expand its fashion accessories business, and optimize showroom displays, online promotions, and explore international collaborations to enhance its corporate image and brand awareness - The global economy in 2023 is expected to underperform market expectations, facing a cost of living crisis, the Russia-Ukraine war, and the ongoing impact of the COVID-19 pandemic[42](index=42&type=chunk) - The Group will adopt appropriate measures, including cost control, to navigate the challenging environment and enhance operational efficiency[42](index=42&type=chunk) - In the future, the Group will actively explore potential customers in different regions, strengthen customized integrated apparel design and sourcing services, and expand its fashion accessories business (including footwear and bags)[42](index=42&type=chunk) - The Group will continue to optimize showroom displays, online platform promotions, and explore collaboration opportunities with internationally renowned individuals to enhance its corporate image and brand awareness[42](index=42&type=chunk) [Key Risks and Uncertainties](index=13&type=section&id=%E4%B8%BB%E8%A6%81%E9%A2%A8%E9%9A%AA%E5%8F%8A%E4%B8%8D%E7%A2%BA%E5%AE%9A%E5%9B%A0%E7%B4%A0) The Group faces multiple risks, including reliance on major customers and revenue uncertainty due to the absence of long-term contracts, reduced orders from UK customers, intense market competition, customer credit risk, raw material price fluctuations, and potential reputational impact from supplier social responsibility non-compliance - The Group relies on several major customers and lacks long-term contracts, leading to revenue uncertainty and potential volatility risks[45](index=45&type=chunk) - Business risks include: customer reliance on the Group's ability to respond promptly to changes in end-customer preferences; significant reduction in UK customer orders may not be offset by sales from other markets; intense market competition may lead to reduced market share and declining profit margins[45](index=45&type=chunk) - The Group faces customer credit risk, and fluctuations in raw material prices, supply, and quality may lead to increased costs or affect supply[45](index=45&type=chunk) - Suppliers' non-compliance with social responsibility and compliance standards may adversely affect the Group's reputation and lead to customer business termination[45](index=45&type=chunk) [Other Information](index=14&type=section&id=%E5%85%B6%E4%BB%96%E8%B3%87%E6%96%99) This section details corporate governance, shareholder interests, and compliance matters [Directors' and Chief Executive's Interests and Short Positions in Shares, Underlying Shares and Debentures of the Company or Any Associated Corporation](index=14&type=section&id=%E8%91%A3%E4%BA%8B%E5%8F%8A%E4%B8%BB%E8%A6%81%E8%A1%8C%E6%94%BF%E4%BA%BA%E5%93%A1%E6%96%BC%E6%9C%AC%E5%85%AC%E5%8F%B8%E8%82%A1%E4%BB%BD%E3%80%81%E7%9B%B8%E9%97%9C%E8%82%A1%E4%BB%BD%E5%8F%8A%E5%82%B5%E6%AC%8A%E8%AD%89%E6%88%96%E6%9C%AC%E5%85%AC%E5%8F%B8%E6%88%96%E4%BB%BB%E4%BD%95%E5%85%B6%E4%BB%96%E7%9B%B8%E8%81%AF%E6%B3%95%E5%9C%98%E4%B9%8B%E4%BB%BB%E4%BD%95%E6%8C%87%E6%98%8E%E4%BA%8B%E5%8B%99%E7%9A%84%E6%AC%8A%E7%9B%8A%E5%8F%8A%E6%B7%A1%E5%80%89) As of October 31, 2022, Mr. Choi King Ting held **75.00%** of the Company's shares, and Mr. Lai Kwok Hung held **0.03%**. No other directors or chief executives held disclosable interests or short positions Directors' and Chief Executive's Shareholdings | Director Name | Nature of Interest | Number of Shares Held (L) | Percentage of Equity in Company's Issued Share Capital | | :------------ | :----------------- | :------------------------ | :------------------------------------- | | Mr. Choi King Ting | Interest in controlled corporation | 23,000,000 | 71.88% | | | Beneficial owner | 1,000,000 | 3.12% | | | **Total** | **24,000,000** | **75.00%** | | Mr. Lai Kwok Hung | Beneficial owner | 10,000 | 0.03% | - Mr. Choi King Ting directly owns the entire equity of JC Fashion International Group Limited, which holds **71.88%** of the Company's issued share capital, and Mr. Choi King Ting is deemed to have an interest in the shares held by it[47](index=47&type=chunk) [Substantial Shareholders' Interests and Short Positions in Shares, Underlying Shares and Debentures of the Company or Any Associated Corporation](index=16&type=section&id=%E4%B8%BB%E8%A6%81%E8%82%A1%E6%9D%B1%E6%96%BC%E6%9C%AC%E5%85%AC%E5%8F%B8%E8%82%A1%E4%BB%BD%E3%80%81%E7%9B%B8%E9%97%9C%E8%82%A1%E4%BB%BD%E5%8F%8A%E5%82%B5%E6%AC%8A%E8%AD%89%E6%88%96%E6%9C%AC%E5%85%AC%E5%8F%B8%E6%88%96%E4%BB%BB%E4%BD%95%E5%85%B6%E4%BB%96%E7%9B%B8%E8%81%AF%E6%B3%95%E5%9C%98%E4%B9%8B%E4%BB%BB%E4%BD%95%E6%8C%87%E6%98%8E%E4%BA%8B%E5%8B%99%E7%9A%84%E6%AC%8A%E7%9B%8A%E5%8F%8A%E6%B7%A1%E5%80%89) As of October 31, 2022, JC International was the Company's substantial shareholder, holding **71.88%** of the issued share capital. Mr. Choi King Ting, as the sole shareholder of JC International, is deemed to have an interest in the shares held by it Substantial Shareholders' Shareholdings | Shareholder Name | Nature of Interest | Number of Shares Held (L) | Percentage of Equity in 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 deemed or taken to have an interest in all shares held by JC International[52](index=52&type=chunk) [Purchase, Sale or Redemption of the Company's Listed Securities](index=17&type=section&id=%E8%B3%BC%E8%B2%B7%E3%80%81%E5%87%BA%E5%94%AE%E6%88%96%E8%B4%96%E5%9B%9E%E6%9C%AC%E5%85%AC%E5%8F%B8%E4%B8%8A%E5%B8%82%E8%AD%89%E5%88%B8) Neither the Company nor any of its subsidiaries purchased, sold, or redeemed any of the Company's listed securities during the current year and up to the date of this interim report - Neither the Company nor any of its subsidiaries purchased, sold, or redeemed any of the Company's listed securities during the current year and up to the date of this interim report[55](index=55&type=chunk) [Directors' Securities Transactions](index=17&type=section&id=%E8%91%A3%E4%BA%8B%E9%80%B2%E8%A1%8C%E8%AD%89%E5%88%B8%E4%BA%A4%E6%98%93) The Company has adopted a stringent code of conduct for directors' securities transactions, and all directors confirmed compliance for the six months ended October 31, 2022 - The Company has adopted a code of conduct regarding directors' securities transactions, which is no less stringent than the required standards of dealing set out in Appendix 10 of the Listing Rules[56](index=56&type=chunk) - All Directors confirmed that for the six months ended October 31, 2022, they have complied with the required standards of dealing and the Company's adopted code of conduct regarding directors' securities transactions[56](index=56&type=chunk) [Directors' Interests in Transactions, Arrangements or Contracts](index=17&type=section&id=%E8%91%A3%E4%BA%8B%E6%96%BC%E4%BA%A4%E6%98%93%E3%80%81%E5%AE%89%E6%8E%92%E6%88%96%E5%90%88%E7%B4%84%E7%9A%84%E6%AC%8A%E7%9B%8A) For the six months ended October 31, 2022, there were no material transactions, arrangements, or contracts in the Group's business where a director or an entity connected with a director had a material interest - For the six months ended October 31, 2022, there were no material transactions, arrangements, or contracts in relation to the Group's business entered into by the Company or any of its holding companies or any of its subsidiaries or fellow subsidiaries, in which a Director or an entity connected with a Director had a material direct or indirect interest[57](index=57&type=chunk) [Directors' Interests in Competing Businesses](index=18&type=section&id=%E8%91%A3%E4%BA%8B%E6%96%BC%E7%AB%B6%E7%88%AD%E6%A5%AD%E5%8B%99%E7%9A%84%E6%AC%8A%E7%9B%8A) During the period and up to the report date, none of the directors, controlling shareholders, or substantial shareholders, or their close associates, were deemed to have any interest in any business competing with the Group's business - During the period and up to the date of this report, none of the Directors, controlling shareholders, or substantial shareholders of the Company, or their respective close associates, were considered to have any interest in any business that directly or indirectly competes or may compete with the Group's business[59](index=59&type=chunk) [Non-Competition Undertaking](index=18&type=section&id=%E4%B8%8D%E7%AB%B6%E7%88%AD%E6%89%BF%E8%AB%BE) Covenantors Mr. Choi King Ting and JC International confirmed compliance with the non-competition undertaking terms, which were reviewed and confirmed by independent non-executive directors as fully complied with and enforced - Covenantors Mr. Choi King Ting and JC International have made annual declarations to the Company stating that they have complied with the terms of the non-competition undertaking for the six months ended October 31, 2022, and 2021[60](index=60&type=chunk) - The independent non-executive Directors have reviewed and confirmed that the undertaking has been fully complied with and enforced for the six months ended October 31, 2022, and 2021[60](index=60&type=chunk) [Corporate Governance Practices](index=18&type=section&id=%E4%BC%81%E6%A5%AD%E7%AE%A1%E6%B2%BB%E5%B8%B8%E8%A6%8F) The Company complies with all corporate governance code provisions, except for code provision C.2.1 where Mr. Choi King Ting serves as both Chairman and Chief Executive Officer. The Board believes this arrangement is in the Group's best interest, and the Board's structure ensures adequate balance of power - The Company complies with all code provisions of the Corporate Governance Code, except for code provision C.2.1 (which requires the roles of chairman and chief executive to be separate)[63](index=63&type=chunk) - The Board believes that Mr. Choi King Ting holding both the Chairman and Chief Executive Officer positions facilitates efficient management and business development, which is in the best interests of the Group[61](index=61&type=chunk)[63](index=63&type=chunk) [Events After the Reporting Period](index=19&type=section&id=%E5%A0%B1%E5%91%8A%E6%9C%9F%E5%BE%8C%E4%BA%8B%E9%A0%85) No material events affecting the Group occurred after the six months ended October 31, 2022, and up to the date of this report - No material events affecting the Group occurred after the six months ended October 31, 2022, and up to the date of this report[64](index=64&type=chunk) [Dividends](index=19&type=section&id=%E8%82%A1%E6%81%AF) The Board does not recommend the payment of any dividend for the six months ended October 31, 2022 - The Board does not recommend the payment of any dividend for the six months ended October 31, 2022 (October 31, 2021: nil)[65](index=65&type=chunk) [Audit and Risk Management Committee](index=20&type=section&id=%E5%AF%A9%E6%A0%B8%E5%8F%8A%E9%A2%A8%E9%9A%AA%E7%AE%A1%E7%90%86%E5%A7%94%E5%93%A1%E6%9C%83) The Audit and Risk Management Committee, comprising three independent non-executive directors, has reviewed the Group's unaudited condensed consolidated financial statements and considers them to be in compliance with applicable accounting standards, Listing Rules, and statutory requirements - The Audit and Risk Management Committee comprises all three independent non-executive Directors[67](index=67&type=chunk) - The Committee has reviewed the Group's unaudited condensed consolidated financial statements for the period and is of the opinion that the results were prepared in compliance with applicable accounting standards, the Listing Rules, and statutory requirements, and that adequate disclosures have been made[67](index=67&type=chunk) [Review Report on Condensed Consolidated Financial Statements](index=21&type=section&id=%E7%B0%A1%E6%98%8E%E7%B6%9C%E5%90%88%E8%B2%A1%E5%8B%99%E5%A0%B1%E8%A1%A8%E7%9A%84%E5%AF%A9%E9%96%B1%E5%A0%B1%E5%91%8A) This report reviews the condensed consolidated financial statements of Wah Sun Holdings Limited and its subsidiaries for the six months ended October 31, 2022, prepared under HKAS 34 [Introduction](index=21&type=section&id=%E5%BC%95%E8%A8%80) This report reviews the condensed consolidated financial statements of Wah Sun Holdings Limited and its subsidiaries for the six months ended October 31, 2022, prepared under HKAS 34 - The condensed consolidated financial statements of Wah Sun Holdings Limited and its subsidiaries for the six months ended October 31, 2022, have been reviewed[70](index=70&type=chunk) - The reporting of interim financial information must comply with the relevant provisions of the Listing Rules and Hong Kong Accounting Standard 34 'Interim Financial Reporting' issued by the Hong Kong Institute of Certified Public Accountants[70](index=70&type=chunk) [Scope of Review](index=21&type=section&id=%E5%AF%A9%E9%96%B1%E7%AF%84%E5%9C%8D) The review was conducted in accordance with Hong Kong Standard on Review Engagements 2410, with a scope significantly narrower than an audit, thus no audit opinion is expressed - The review was conducted in accordance with Hong Kong Standard on Review Engagements 2410 'Review of Interim Financial Information Performed by the Independent Auditor of the Entity' issued by the Hong Kong Institute of Certified Public Accountants[71](index=71&type=chunk) - As the scope of a review is substantially less than that of an audit conducted in accordance with Hong Kong Standards on Auditing, an audit opinion is not expressed[71](index=71&type=chunk) [Conclusion](index=22&type=section&id=%E7%B5%90%E8%AB%96) Based on the review, no matters were noted that cause us to believe the condensed consolidated financial statements are not prepared, in all material respects, in accordance with HKAS 34 - Based on the review, nothing has come to our attention that causes us to believe that the condensed consolidated financial statements are not prepared, in all material respects, in accordance with HKAS 34[73](index=73&type=chunk) [Condensed Consolidated Statement of Profit or Loss and Other Comprehensive Income](index=23&type=section&id=%E7%B0%A1%E6%98%8E%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) For the six months ended October 31, 2022, the Group's revenue decreased by **16.8%** year-on-year to **HKD 58.9 million**, and gross profit decreased by **35.8%** to **HKD 10.6 million**. Loss for the period expanded to **HKD 4.3 million**, total comprehensive expenses significantly increased to **HKD 6.2 million**, and basic loss per share was **HKD 0.13** Key Data from Condensed Consolidated Statement of Profit or Loss and Other Comprehensive Income | Metric | Six Months Ended October 31, 2022 (thousand HKD) | Six Months Ended October 31, 2021 (thousand HKD) | Change Rate | | :--- | :----------------------------------------------- | :----------------------------------------------- | :---------- | | Revenue | 58,910 | 70,818 | -16.8% | | Gross Profit | 10,602 | 16,548 | -35.8% | | Other income | 1,989 | 1,237 | +60.8% | | Net Other Income | 232 | 256 | -9.3% | | Net unrealized loss on financial assets at fair value through profit or loss | (2,123) | (167) | +1171.3% | | Net reversal of impairment loss (impairment loss) on financial assets | 102 | (725) | N/A | | Administrative Expenses | (8,922) | (8,707) | +2.5% | | Selling and Distribution Expenses | (5,978) | (7,775) | -23.2% | | Finance costs | (186) | (125) | +48.8% | | (Loss) Profit before tax | (4,284) | 542 | N/A | | Loss for the Period | (4,250) | (626) | +579.0% | | Total comprehensive expenses for the period | (6,186) | (589) | +950.4% | | Basic loss per share (HKD) | (0.13) | (0.02) | +550.0% | [Condensed Consolidated Statement of Financial Position](index=24&type=section&id=%E7%B0%A1%E6%98%8E%E7%B6%9C%E5%90%88%E8%B2%A1%E5%8B%99%E7%8B%80%E6%B3%81%E8%A1%A8) As of October 31, 2022, the Group's total assets less current liabilities were **HKD 122.091 million**, a decrease from April 30, 2022. Net assets were **HKD 120.008 million**. Financial instruments at fair value through other comprehensive income within non-current assets significantly decreased, while bank borrowings within current liabilities substantially increased Key Data from Condensed Consolidated Statement of Financial Position | Metric | October 31, 2022 (thousand HKD) | April 30, 2022 (thousand HKD) | Change Rate | | :--- | :------------------------------ | :------------------------------ | :---------- | | **Non-current assets** | | | | | Property, plant and equipment | 19,984 | 20,761 | -3.8% | | Right-of-use assets | 1,070 | 1,306 | -18.1% | | Investment properties | 7,442 | 7,522 | -1.1% | | Intangible assets | 4,434 | 5,251 | -15.6% | | Financial instruments at fair value through other comprehensive income | 859 | 2,925 | -70.6% | | Deferred tax assets | 406 | 271 | +49.8% | | **Total non-current assets** | **34,195** | **38,036** | **-10.1%** | | **Current assets** | | | | | Inventories | 3,021 | 4,236 | -28.7% | | Trade and other receivables | 49,839 | 47,031 | +5.9% | | Tax recoverable | – | 3,026 | -100.0% | | Financial assets at fair value through profit or loss | 10,394 | 12,517 | -16.9% | | Bank Balances and Cash | 45,776 | 46,110 | -0.7% | | **Total current assets** | **109,030** | **112,920** | **-3.4%** | | **Current liabilities** | | | | | Contract liabilities | 343 | 205 | +67.3% | | Trade and other payables | 7,764 | 15,014 | -48.3% | | Bank borrowings | 10,809 | 5,380 | +100.9% | | Lease liabilities | 230 | 245 | -6.1% | | Tax payable | 1,988 | 1,618 | +22.9% | | **Total current liabilities** | **21,134** | **22,462** | **-5.9%** | | **Net current assets** | **87,896** | **90,458** | **-2.8%** | | **Total assets less current liabilities** | **122,091** | **128,494** | **-5.0%** | | **Non-current liabilities** | | | | | Lease liabilities | 1,021 | 1,256 | -18.7% | | Deferred tax liabilities | 1,062 | 1,044 | +1.7% | | **Total non-current liabilities** | **2,083** | **2,300** | **-9.4%** | | **Net assets** | **120,008** | **126,194** | **-4.9%** | | **Total equity** | **120,008** | **126,194** | **-4.9%** | [Condensed Consolidated Statement of Changes in Equity](index=26&type=section&id=%E7%B0%A1%E6%98%8E%E7%B6%9C%E5%90%88%E6%AC%8A%E7%9B%8A%E8%AE%8A%E5%8B%95%E8%A1%A8) For the six months ended October 31, 2022, the Company's total equity decreased from **HKD 126.194 million** to **HKD 120.008 million**, primarily due to the loss for the period and fair value changes of equity instruments at fair value through other comprehensive income Key Data from Condensed Consolidated Statement of Changes in Equity | Metric | October 31, 2022 (thousand HKD) | May 1, 2022 (thousand HKD) | Change (thousand HKD) | | :--- | :------------------------------ | :------------------------- | :-------------------- | | Share capital | 320 | 320 | 0 | | Share premium | 39,201 | 39,201 | 0 | | Statutory reserve | 456 | 456 | 0 | | Investment revaluation reserve | (2,066) | – | (2,066) | | Exchange reserve | 401 | 271 | 130 | | Retained profits | 81,696 | 85,946 | (4,250) | | **Total equity** | **120,008** | **126,194** | **(6,186)** | - Loss for the period resulted in a decrease in retained profits of **HKD 4,250 thousand**[81](index=81&type=chunk) - Fair value changes of equity instruments at fair value through other comprehensive income led to a decrease in investment revaluation reserve of **HKD 2,066 thousand**[81](index=81&type=chunk) [Condensed Consolidated Statement of Cash Flows](index=27&type=section&id=%E7%B0%A1%E6%98%8E%E7%B6%9C%E5%90%88%E7%8F%BE%E9%87%91%E6%B5%81%E9%87%8F%E8%A1%A8) For the six months ended October 31, 2022, the Group's net cash used in operating activities increased, net cash from investing activities turned positive, and net cash from financing activities significantly increased, primarily due to new bank borrowings, ultimately leading to a slight decrease in cash and cash equivalents at period-end Key Data from Condensed Consolidated Statement of Cash Flows | Metric | Six Months Ended October 31, 2022 (thousand HKD) | Six Months Ended October 31, 2021 (thousand HKD) | Change (thousand HKD) | | :--- | :----------------------------------------------- | :----------------------------------------------- | :-------------------- | | Net cash used in operating activities | (6,181) | (3,118) | (3,063) | | Net cash from (used in) investing activities | 140 | (1,113) | 1,253 | | Net cash from (used in) financing activities | 5,128 | (702) | 5,830 | | Net decrease in cash and cash equivalents | (913) | (4,933) | 4,020 | | Cash and cash equivalents at end of period | 45,776 | 44,488 | 1,288 | - Net cash from financing activities significantly increased, primarily from new bank borrowings of **HKD 6,144 thousand**[83](index=83&type=chunk) [Notes to the Condensed Consolidated Financial Statements](index=28&type=section&id=%E7%B0%A1%E6%98%8E%E7%B6%9C%E5%90%88%E8%B2%A1%E5%8B%99%E5%A0%B1%E8%A1%A8%E9%99%84%E6%B3%A8) This section provides detailed notes and explanations supporting the condensed consolidated financial statements [1. General Information](index=28&type=section&id=1.%20%E4%B8%80%E8%88%AC%E8%B3%87%E6%96%99) Wah Sun Holdings Limited is an investment holding company incorporated in the Cayman Islands, with its shares listed on the Main Board of The Stock Exchange of Hong Kong. The Group primarily provides apparel product design and sourcing services for branded fashion retailers and offers consultancy services. The financial statements are presented in HKD, although the Company's functional currency is USD - Wah Sun Holdings Limited is incorporated in the Cayman Islands, and its shares are listed on the Main Board of The Stock Exchange of Hong Kong Limited[85](index=85&type=chunk) - The Group is principally engaged in providing apparel product design and sourcing services for branded fashion retailers, and providing consultancy services[86](index=86&type=chunk) - The condensed consolidated financial statements are presented in HKD, while the Company's functional currency is USD[86](index=86&type=chunk) [2. Basis of Preparation of Condensed Consolidated Financial Statements](index=29&type=section&id=2.%20%E7%B7%A8%E8%A3%BD%E7%B0%A1%E6%98%8E%E7%B6%9C%E5%90%88%E8%B2%A1%E5%8B%99%E5%A0%B1%E8%A1%A8%E7%9A%84%E5%9F%BA%E6%BA%96) The condensed consolidated financial statements are prepared in accordance with Hong Kong Financial Reporting Standards, Hong Kong Accounting Standards and Interpretations issued by the Hong Kong Institute of Certified Public Accountants, and the disclosure requirements of the Hong Kong Companies Ordinance - The Group's condensed consolidated financial statements are prepared in accordance with Hong Kong Financial Reporting Standards, Hong Kong Accounting Standards and Interpretations issued by the Hong Kong Institute of Certified Public Accountants, and the disclosure requirements of the Hong Kong Companies Ordinance (Cap. 622)[88](index=88&type=chunk) [3. Application of New and Revised Hong Kong Financial Reporting Standards](index=29&type=section&id=3.%20%E6%87%89%E7%94%A8%E6%96%B0%E8%A8%82%E5%8F%8A%E7%B6%93%E4%BF%AE%E8%A8%82%E9%A6%99%E6%B8%AF%E8%B2%A1%E5%8B%99%E5%A0%B1%E5%91%8A%E6%BA%96%E5%89%87%EF%BC%88%E3%80%8C%E9%A6%99%E6%B8%AF%E8%B2%A1%E5%8B%99%E5%A0%B1%E5%91%8A%E6%BA%96%E5%89%87%E3%80%D7%EF%BC%89) Several new and revised Hong Kong Financial Reporting Standards were first applied in the current interim period, but these revisions had no material impact on the Group's financial position and performance - Several new and revised Hong Kong Financial Reporting Standards, including HKFRS 3 (Revised), HKAS 16 (Revised), HKAS 37 (Revised), and HKFRSs (Amendments), were first applied in the current interim period[89](index=89&type=chunk) - The application of the revised HKFRSs during the period had no material impact on the Group's financial position and performance and/or the disclosures contained in these condensed consolidated financial statements for the current and prior periods[89](index=89&type=chunk) [4. Revenue and Segment Information](index=30&type=section&id=4.%20%E6%94%B6%E7%9B%8A%E5%8F%8A%E5%88%86%E9%83%A8%E8%B3%87%E6%96%99) The Group reorganized its internal reporting structure, merging the online fashion retailer segment with the fashion retailer segment into a single 'supply of apparel products' reportable segment. Segment revenue for the period primarily came from women's wear and children's wear, with segment results shifting from profit to loss - The Group reorganized its internal reporting structure, merging the online fashion retailer segment with the fashion retailer segment, with the chief operating decision maker making strategic decisions for fashion retail as a whole[92](index=92&type=chunk) - 'Supply of apparel products' is the Group's single reportable segment[93](index=93&type=chunk) Revenue by Product Category | Product Category | Six Months Ended October 31, 2022 (thousand HKD) | Six Months Ended October 31, 2021 (thousand HKD) | | :--------------- | :----------------------------------------------- | :----------------------------------------------- | | Women's wear | 52,813 | 60,128 | | Children's wear | 6,097 | 10,690 | | **Total** | **58,910** | **70,818** | Segment Revenue and Results | Metric | Six Months Ended October 31, 2022 (thousand HKD) | Six Months Ended October 31, 2021 (thousand HKD) | | :--- | :----------------------------------------------- | :----------------------------------------------- | | Segment revenue | 58,910 | 70,818 | | Segment (loss) profit | (361) | 2,205 | - No segment asset or segment liability analysis is presented as such information is not regularly provided to the Group's chief operating decision maker[105](index=105&type=chunk) [5. Net Other Income](index=34&type=section&id=5.%20%E5%85%B6%E4%BB%96%E6%94%B6%E7%9B%8A%E6%B7%A8%E9%A1%8D) Net exchange gains of **HKD 232 thousand** were recorded for the period, a decrease compared to the same period last year Net Exchange Gains Comparison | Metric | Six Months Ended October 31, 2022 (thousand HKD) | Six Months Ended October 31, 2021 (thousand HKD) | | :--- | :----------------------------------------------- | :----------------------------------------------- | | Net exchange gains | 232 | 256 | [6. (Loss) Profit Before Tax](index=34&type=section&id=6.%20%E9%99%A4%E7%A8%85%E5%89%8D%EF%BC%88%E8%99%A7%E6%90%8D%EF%BC%89%E6%BA%A2%E5%88%A9) A loss before tax of **HKD 4,284 thousand** was recorded for the period, compared to a profit of **HKD 542 thousand** in the prior period. Depreciation, amortization, and finance costs all impacted the results (Loss) Profit Before Tax and Key Deductions | Metric | Six Months Ended October 31, 2022 (thousand HKD) | Six Months Ended October 31, 2021 (thousand HKD) | | :--- | :----------------------------------------------- | :----------------------------------------------- | | (Loss) Profit before tax | (4,284) | 542 | | Depreciation of property, plant and equipment | 657 | 681 | | Depreciation of right-of-use assets | 119 | 127 | | Depreciation of investment properties | 80 | 80 | | Amortization of intangible assets | 817 | 817 | | Finance costs | 186 | 125 | - Finance costs primarily include bank interest expenses of **HKD 138 thousand** (2021: HKD 65 thousand) arising from bank borrowings[108](index=108&type=chunk) [7. Income Tax (Credit) Expense](index=35&type=section&id=7.%20%E6%89%80%E5%BE%97%E7%A8%85%EF%BC%88%E6%8A%B5%E5%85%8D%EF%BC%89%E9%96%8B%E6%94%AF) An income tax credit of **HKD 34 thousand** was recorded for the period, compared to an expense of **HKD 1,168 thousand** in the prior period. Different tax policies in Hong Kong, China, and the UK affected tax calculations Income Tax (Credit) Expense Comparison | Metric | Six Months Ended October 31, 2022 (thousand HKD) | Six Months Ended October 31, 2021 (thousand HKD) | | :--- | :----------------------------------------------- | :----------------------------------------------- | | Current tax | 70 | 1,215 | | Underprovision in prior years: Hong Kong | 12 | 255 | | Deferred tax credit | (116) | (302) | | **Total** | **(34)** | **1,168** | - Hong Kong profits tax adopts a two-tiered system, with a tax rate of **8.25%** for the first **HKD 2,000,000** of assessable profits and **16.5%** for profits above this threshold[110](index=110&type=chunk) - The statutory corporate income tax rate in China is **25%**, and in the UK it is **19%**[111](index=111&type=chunk)[112](index=112&type=chunk) [8. Dividends](index=36&type=section&id=8.%20%E8%82%A1%E6%81%AF) For the six months ended October 31, 2022, the Company neither paid nor proposed any dividends to ordinary shareholders - No dividends were paid or proposed to ordinary shareholders of the Company for the six months ended October 31, 2022[114](index=114&type=chunk) [9. Loss Per Share](index=36&type=section&id=9.%20%E6%AF%8F%E8%82%A1%E8%99%A7%E6%90%8D) Basic loss per share for the period was **HKD 0.13**, an increase from the prior period. Diluted loss is not presented due to the absence of potential ordinary shares Loss Per Share Comparison | Metric | Six Months Ended October 31, 2022 (HKD) | Six Months Ended October 31, 2021 (HKD) | | :--- | :-------------------------------------- | :-------------------------------------- | | Basic Loss Per Share | (0.13) | (0.02) | | Loss for calculation (thousand HKD) | (4,250) | (626) | | Number of ordinary shares (thousand shares) | 32,000 | 32,000 | - No diluted loss per share is presented for both periods as there were no potential ordinary shares issued in either period[115](index=115&type=chunk) [10. Property, Plant and Equipment](index=37&type=section&id=10.%20%E7%89%A9%E6%A5%AD%E3%80%81%E5%BB%A0%E6%88%BF%E5%8F%8A%E8%A8%AD%E5%82%99) For the six months ended October 31, 2022, additions to property, plant and equipment primarily consisted of fixtures and furniture, amounting to **HKD 27 thousand** - For the six months ended October 31, 2022, additions to property, plant and equipment primarily included fixtures and furniture, amounting to **HKD 27 thousand**[117](index=117&type=chunk) [11. Trade and Other Receivables](index=37&type=section&id=11.%20%E8%B2%BF%E6%98%93%E5%8F%8A%E5%85%B6%E4%BB%96%E6%87%89%E6%94%B6%E6%AC%BE%E9%A0%85) As of October 31, 2022, trade receivables (net of provision for credit losses) were **HKD 20,506 thousand**, and other receivables were **HKD 29,333 thousand**. The Group grants credit terms of up to **90 days** to customers with good credit quality Trade and Other Receivables Comparison | Metric | October 31, 2022 (thousand HKD) | April 30, 2022 (thousand HKD) | | :--- | :------------------------------ | :------------------------------ | | Trade receivables (net of provision for credit losses) | 20,506 | 21,958 | | Other receivables | 29,333 | 25,073 | | **Total** | **49,839** | **47,031** | - The Group grants credit terms of up to **90 days** to customers with good credit quality and payment records[120](index=120&type=chunk) Aging Analysis of Trade Receivables | Aging | October 31, 2022 (thousand HKD) | April 30, 2022 (thousand HKD) | | :---- | :------------------------------ | :------------------------------ | | Within 60 days | 20,366 | 20,157 | | 61 to 180 days | 140 | 1,794 | | 181 to 365 days | – | – | | Over 365 days | – | 7 | | **Total** | **20,506** | **21,958** | [12. Trade and Other Payables](index=39&type=section&id=12.%20%E8%B2%BF%E6%98%93%E5%8F%8A%E5%85%B6%E4%BB%96%E6%87%89%E4%BB%98%E6%AC%BE%E9%A0%85) As of October 31, 2022, trade payables were **HKD 5,181 thousand**, and other payables were **HKD 368 thousand**. Credit terms for trade payables range from **30 to 90 days** Trade and Other Payables Comparison | Metric | October 31, 2022 (thousand HKD) | April 30, 2022 (thousand HKD) | | :--- | :------------------------------ | :------------------------------ | | Trade payables | 5,181 | 8,673 | | Other receivables | 368 | 3,859 | | Deferred government grants with unfulfilled conditions | 665 | 665 | | Accrued expenses | 1,550 | 1,817 | | **Total** | **7,764** | **15,014** | - Credit terms for trade payables range from **30 to 90 days**[122](index=122&type=chunk) Aging Analysis of Trade Payables | Aging | October 31, 2022 (thousand HKD) | April 30, 2022 (thousand HKD) | | :---- | :------------------------------ | :------------------------------ | | Within 60 days | 4,135 | 6,855 | | 61 to 180 days | 890 | 1,818 | | 181 to 365 days | 128 | – | | Over 365 days | 28 | – | | **Total** | **5,181** | **8,673** | [13. Bank Borrowings](index=40&type=section&id=13.%20%E9%8A%80%E8%A1%8C%E5%80%9F%E6%AC%BE) For the six months ended October 31, 2022, the Group obtained new bank borrowings of **HKD 6,144 thousand**, primarily for general working capital and bond investments. Some borrowings are personally guaranteed by Mr. Choi King Ting, while others are secured by bond investments and corporate guarantees - For the six months ended October 31, 2022, the Group obtained new bank borrowings of **HKD 6,144 thousand**[126](index=126&type=chunk) - The new borrowings were used for general working capital and to purchase bond investments classified as financial assets at fair value through profit or loss[126](index=126&type=chunk) - Bank borrowings bear interest at floating rates based on market rates, with two guaranteed by Mr. Choi King Ting personally, and another secured by bond investments and a corporate guarantee[126](index=126&type=chunk) [14. Share Capital](index=40&type=section&id=14.%20%E8%82%A1%E6%9C%AC) The Company's authorized share capital is **HKD 2,000,000**, divided into **200,000,000** ordinary shares of **HKD 0.01** par value each. Issued and fully paid share capital is **HKD 320,000**, comprising **32,000,000** shares Share Capital Details | Metric | 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 | [15. Related Party Disclosures](index=41&type=section&id=15.%20%E9%97%9C%E8%81%AF%E6%96%B9%E6%8A%AB%E9%9C%B2) The Group disclosed a lease agreement with a relative of Mr. Choi King Ting, and the remuneration of directors and other key management personnel - The Group entered into a lease agreement with a relative of Mr. Choi King Ting for an office in Shenzhen, China, for a term of **10 years**[129](index=129&type=chunk) Key Management Personnel Remuneration Comparison | Metric | Six Months Ended October 31, 2022 (thousand HKD) | Six Months Ended October 31, 2021 (thousand HKD) | | :--- | :----------------------------------------------- | :----------------------------------------------- | | Salaries and allowances | 1,232 | 1,421 | | Retirement benefit scheme contributions | 62 | 71 | | **Total** | **1,294** | **1,492** |
桦欣控股(01657) - 2023 - 中期财报