衍生集团(06893) - 2024 - 年度业绩

Financial Highlights The company reported a 13.7% revenue increase and a 47.8% gross profit growth, significantly reducing its loss for the year Financial Highlights for the Year Ended March 31, 2024 | Metric | 2024 (Thousand HKD) | 2023 (Thousand HKD) | Change (%) | | :--- | :--- | :--- | :--- | | Revenue | 92,617 | 81,460 | 13.7 | | Gross Profit | 57,406 | 38,836 | 47.8 | | Loss for the Year | (36,400) | (49,168) | (26.0) | | Other Comprehensive Income/(Expense) for the Year | 5,820 | (12,721) | 145.8 | | Loss Per Share – Basic and Diluted (HK cents) | (3.36) | (4.53) | - | Results The company narrowed its net loss in FY2024 with increased revenue and gross profit, while facing significant uncertainty regarding its going concern due to net current liabilities Consolidated Statement of Profit or Loss and Other Comprehensive Income The company recorded a net loss of HKD 36.4 million in FY2024, a reduction from HKD 49.2 million last year, driven by a 13.7% revenue growth and a 47.8% gross profit increase, with other comprehensive income turning positive Key Data from Consolidated Statement of Profit or Loss and Other Comprehensive Income | Metric | 2024 (Thousand HKD) | 2023 (Thousand HKD) | Change (%) | | :--- | :--- | :--- | :--- | | Revenue | 92,617 | 81,460 | 13.7 | | Cost of Sales | (35,211) | (42,624) | (17.4) | | Gross Profit | 57,406 | 38,836 | 47.8 | | Other Income | 3,085 | 5,874 | (47.6) | | Other Gains and Losses, Net | (1,449) | (4,215) | 65.6 | | Selling and Distribution Expenses | (12,526) | (5,349) | 134.2 | | Administrative and Other Operating Expenses | (67,012) | (70,309) | (4.7) | | Finance Costs | (16,299) | (14,060) | 15.9 | | Loss Before Tax | (36,795) | (49,223) | (25.3) | | Income Tax Credit | 395 | 55 | 618.2 | | Loss for the Year | (36,400) | (49,168) | (26.0) | | Other Comprehensive Income/(Expense) for the Year | 5,820 | (12,721) | 145.8 | | Total Comprehensive Expense for the Year | (30,580) | (61,889) | (50.6) | Loss Per Share | Metric | 2024 (HK cents) | 2023 (HK cents) | | :--- | :--- | :--- | | Basic and Diluted Loss Per Share | (3.36) | (4.53) | Consolidated Statement of Financial Position As of March 31, 2024, total assets slightly decreased, net current liabilities expanded to HKD 198.6 million, and net assets declined, indicating significant going concern uncertainty Key Data from Consolidated Statement of Financial Position | Metric | 2024 (Thousand HKD) | 2023 (Thousand HKD) | | :--- | :--- | :--- | | Total Assets | 587,854 | 618,277 | | Net Current Liabilities | (198,600) | (174,216) | | Net Assets | 209,331 | 239,911 | | Total Equity | 209,331 | 239,911 | - As of March 31, 2024, the Group's current liabilities exceeded its current assets by approximately HKD 198.6 million, indicating a material uncertainty that may cast significant doubt on the Group's ability to continue as a going concern[11] Notes This section provides detailed explanations and disclosures for the consolidated financial statements, covering accounting policies, revenue, segments, and financial instruments 1. Basis of Preparation The consolidated financial statements are prepared under HKFRS, with the company facing significant going concern uncertainty due to a HKD 36.4 million net loss and HKD 198.6 million net current liabilities, prompting management to implement various remedial measures - The Group incurred a net loss of approximately HKD 36.4 million for the year ended March 31, 2024, with current liabilities exceeding current assets by approximately HKD 198.6 million, indicating a material uncertainty regarding its ability to continue as a going concern[11] - Management has implemented business strategies to enhance production efficiency, control administrative and operating costs, and seek alternative financing sources to improve the capital structure[11] - As of March 31, 2024, the Group had unutilized bank facilities of approximately HKD 8.32 million, and the Directors expect to renew these facilities upon maturity[12] 2. Application of New and Revised Hong Kong Financial Reporting Standards The company adopted several new and revised HKFRS this year with no significant impact on current or prior period financial performance, and future standards are not expected to have a material effect, except for certain liability classification amendments - The application of new and revised Hong Kong Financial Reporting Standards this year had no material impact on the Group's financial position and performance[14] - Except for amendments to HKAS 1 regarding the classification of liabilities, other new standards issued but not yet effective are not expected to have a significant impact on the consolidated financial statements[15] 3. Revenue Total revenue for FY2024 was HKD 92.6 million, predominantly from the sale of goods, accounting for approximately 99.4%, with a minor and declining contribution from healthcare services Revenue Stream Analysis | Revenue Category | 2024 (Thousand HKD) | 2023 (Thousand HKD) | | :--- | :--- | :--- | | Sale of goods | 92,049 | 80,765 | | Provision of healthcare services | 568 | 695 | | Total Revenue | 92,617 | 81,460 | 4. Segment Information The company operates four business segments: Product Development, Brand Development and Management, Trading of Goods, and Health, with Product Development being the largest revenue contributor at 97.7% and showing improved segment loss, while Hong Kong revenue grew and Mainland China revenue declined Revenue and Segment (Loss)/Profit by Business Segment (2024) | Segment | External Sales (Thousand HKD) | Segment (Loss)/Profit (Thousand HKD) | | :--- | :--- | :--- | | Product Development Segment | 90,505 | (19,040) | | Brand Development and Management Segment | 1,413 | 69 | | Trading of Goods Segment | 131 | 91 | | Health Segment | 568 | (766) | | Total | 92,617 | (19,646) | Revenue and Non-current Assets by Geographical Location | Geographical Location | Revenue from External Customers 2024 (Thousand HKD) | Revenue from External Customers 2023 (Thousand HKD) | Non-current Assets 2024 (Thousand HKD) | Non-current Assets 2023 (Thousand HKD) | | :--- | :--- | :--- | :--- | :--- | | Hong Kong, China | 65,815 | 46,038 | 208,872 | 214,626 | | Mainland China | 26,802 | 35,422 | 298,190 | 336,072 | | Total | 92,617 | 81,460 | 507,062 | 550,698 | Revenue from Major Customers | Customer | 2024 (Thousand HKD) | 2023 (Thousand HKD) | | :--- | :--- | :--- | | Customer A | 14,423 | Not Applicable | | Customer B | 11,786 | 9,779 | 5. Other Income Other income decreased from HKD 5.9 million in 2023 to HKD 3.1 million in 2024, primarily due to reduced government grants and bank interest income Other Income Details | Category | 2024 (Thousand HKD) | 2023 (Thousand HKD) | | :--- | :--- | :--- | | Interest income from bank deposits | 80 | 757 | | Rental income | 531 | 607 | | Government grants | 1,421 | 2,666 | | Others | 1,053 | 1,844 | | Total | 3,085 | 5,874 | 6. Other Gains and Losses, Net Net other losses improved to HKD 1.4 million in 2024 from HKD 4.2 million in 2023, mainly due to fair value gains on financial assets at fair value through profit or loss, partially offset by impairment losses on property, plant, and equipment Other Gains and Losses, Net Details | Category | 2024 (Thousand HKD) | 2023 (Thousand HKD) | | :--- | :--- | :--- | | Fair value changes on financial assets at fair value through profit or loss – gains/(losses) | 6,682 | (1,279) | | Fair value loss on investment properties | (980) | (765) | | Impairment loss recognised under expected credit loss model on trade receivables | (1,464) | (285) | | Impairment loss recognised on property, plant and equipment | (3,856) | - | | Net exchange losses | (1,764) | (1,263) | | Total | (1,449) | (4,215) | 7. Finance Costs Finance costs increased from HKD 14.1 million in 2023 to HKD 16.3 million in 2024, primarily driven by higher interest expenses on bank loans Finance Costs Details | Category | 2024 (Thousand HKD) | 2023 (Thousand HKD) | | :--- | :--- | :--- | | Interest expense on bank loans | 16,207 | 13,971 | | Interest expense on other loans | 6 | - | | Interest expense on lease liabilities | 86 | 89 | | Total borrowing costs | 16,299 | 14,060 | 8. Income Tax Credit An income tax credit of HKD 395,000 was recorded in 2024, a significant increase from HKD 55,000 in 2023, with Hong Kong profits tax applying a two-tiered rate and Mainland China subsidiaries at 25% Income Tax Credit Details | Category | 2024 (Thousand HKD) | 2023 (Thousand HKD) | | :--- | :--- | :--- | | Current tax: Hong Kong profits tax | 13 | 133 | | Current tax: Mainland China enterprise income tax | 46 | 51 | | Deferred tax: For the year | (454) | (239) | | Total income tax credit recognised in profit or loss | (395) | (55) | - Hong Kong profits tax applies a two-tiered rate, with the first HKD 2 million of assessable profits taxed at 8.25% and the remainder at 16.5%[27] - Mainland China subsidiaries are subject to an enterprise income tax rate of 25%[28] 9. Loss for the Year The net loss for 2024 narrowed to HKD 36.4 million from HKD 49.2 million in 2023, primarily influenced by depreciation, staff costs, and inventory costs Key Items Affecting Loss for the Year | Item | 2024 (Thousand HKD) | 2023 (Thousand HKD) | | :--- | :--- | :--- | | Total depreciation | 23,021 | 25,564 | | Staff costs (including Directors' emoluments) | 30,436 | 30,004 | | Cost of inventories recognised as an expense | 31,646 | 38,194 | | Net rental income from investment properties | (490) | (589) | 10. Loss Per Share Basic and diluted loss per share improved to 3.36 HK cents in 2024 from 4.53 HK cents in 2023 Loss Per Share Calculation Data | Metric | 2024 (Thousand HKD/Thousand Shares) | 2023 (Thousand HKD/Thousand Shares) | | :--- | :--- | :--- | | Loss for the year used in the calculation of basic and diluted loss per share | (36,705) | (49,491) | | Weighted average number of ordinary shares | 1,091,796 | 1,091,796 | | Basic and Diluted Loss Per Share (HK cents) | (3.36) | (4.53) | 11. Dividends No dividends were paid or proposed for the year ended March 31, 2024 - No dividends were paid or proposed to ordinary shareholders of the Company for the year ended March 31, 2024[31] 12. Trade and Other Receivables Total trade and other receivables decreased from HKD 13.8 million in 2023 to HKD 12.0 million in 2024, with trade receivables (net of credit loss allowance) declining by 20.4% Trade and Other Receivables Details | Category | 2024 (Thousand HKD) | 2023 (Thousand HKD) | | :--- | :--- | :--- | | Trade receivables (net of allowance for credit losses) | 7,939 | 9,969 | | Prepayments to suppliers | 1,120 | 1,055 | | Prepayments for other expenses | 2,448 | 2,276 | | Deposits | 465 | 508 | | Total | 11,972 | 13,808 | Ageing Analysis of Trade Receivables (Net of Allowance for Credit Losses) | Ageing | 2024 (Thousand HKD) | 2023 (Thousand HKD) | | :--- | :--- | :--- | | 0 to 30 days | 3,914 | 5,520 | | 31 to 60 days | 2,094 | 2,135 | | 61 to 90 days | 1,929 | 919 | | 91 to 365 days | 2 | 357 | | Over 365 days | - | 1,038 | | Total | 7,939 | 9,969 | 13. Trade and Other Payables Total trade and other payables increased from HKD 39.3 million in 2023 to HKD 40.3 million in 2024, primarily driven by a 30.9% rise in trade payables Trade and Other Payables Details | Category | 2024 (Thousand HKD) | 2023 (Thousand HKD) | | :--- | :--- | :--- | | Trade payables | 9,002 | 6,875 | | Accruals and other payables | 31,281 | 32,398 | | Total | 40,283 | 39,273 | Ageing Analysis of Trade Payables | Ageing | 2024 (Thousand HKD) | 2023 (Thousand HKD) | | :--- | :--- | :--- | | 0 to 30 days | 4,323 | 1,365 | | 31 to 60 days | 481 | 1,435 | | 61 to 90 days | 401 | 451 | | Over 90 days | 3,797 | 3,624 | | Total | 9,002 | 6,875 | 14. Events After the Reporting Period As of the announcement date, the Board is unaware of any significant disclosable events after the reporting period - Other than as disclosed in this announcement, the Board is not aware of any significant disclosable events that have occurred[35] Management Discussion and Analysis This section provides an overview of the company's business performance, segment-specific reviews, strategic outlook, and a detailed financial analysis for the reporting period Business Review The company primarily markets, sells, and manufactures children's healthcare products, with FY2024 revenue growing 13.7% to HKD 92.6 million driven by the Product Development segment, as Hong Kong sales recovered post-reopening while Mainland China revenue declined - The Group primarily engages in the marketing, sales, and manufacturing of healthcare products mainly for children, with "Yan Sang" being a long-established and well-known brand[37] Revenue and Segment Contribution | Metric | 2024 (Million HKD) | 2023 (Million HKD) | Change (%) | | :--- | :--- | :--- | :--- | | Total Revenue | 92.6 | 81.5 | 13.7 | | Product Development Segment contribution to total revenue | 97.7% | 96.5% | 1.2 ppt | | Brand Development and Management Segment contribution to total revenue | 1.5% | 1.7% | (0.2) ppt | | Trading of Goods Segment contribution to total revenue | 0.2% | 0.9% | (0.7) ppt | | Health Segment contribution to total revenue | 0.6% | 0.9% | (0.3) ppt | - Following the resumption of normal travel between Hong Kong and Mainland China, the Group's sales in Hong Kong gradually recovered, while revenue from the Mainland China market decreased[38] Product Development Segment This segment develops and sells own-brand healthcare and personal care products like "Yan Sang" and "Tai Wo Tong", with FY2024 revenue growing 15.1% to HKD 90.5 million due to market recovery, and segment loss rate improving from 31.4% to 21.0% - The Product Development segment develops and sells healthcare, personal care, and household products under its own brands, primarily "Yan Sang", "Tai Wo Tong", "Sze+Care", and "Sterilizing King"[40] Product Development Segment Performance | Metric | 2024 (Million HKD) | 2023 (Million HKD) | Change (%) | | :--- | :--- | :--- | :--- | | Revenue | 90.5 | 78.6 | 15.1 | | Segment Loss | (19.0) | (24.7) | (23.0) | | Segment Loss Rate | 21.0% | 31.4% | (10.4) ppt | - The increase in revenue was primarily due to the gradual recovery of the tourism and retail sectors since the resumption of normal travel between Hong Kong and Mainland China, leading to a general improvement in consumer sentiment[40] Brand Development and Management Segment This segment provides marketing, sales, and distribution services for various personal care product brands, maintaining stable revenue at HKD 1.4 million in FY2024 and achieving a turnaround with a profit of HKD 69,000 - Since 1999, the Group has provided one-stop solutions for marketing, sales and distribution, logistics, and delivery services to owners of various personal care product brands[41] Brand Development and Management Segment Performance | Metric | 2024 (Thousand HKD) | 2023 (Thousand HKD) | | :--- | :--- | :--- | | Revenue | 1,400 (approx) | 1,400 (approx) | | Segment Profit/(Loss) | 69 | (56) | | Segment Profit Margin/(Loss Margin) | 4.9% | (4.1)% | Trading of Goods Segment This segment's revenue significantly decreased to HKD 131,000, primarily due to the company's strategic focus on higher-margin product development and the gradual phasing out of low-margin products Trading of Goods Segment Revenue | Metric | 2024 (Thousand HKD) | 2023 (Thousand HKD) | Change (%) | | :--- | :--- | :--- | :--- | | Revenue | 131 | 747 | (82.5) | - Low-margin products in this segment will be gradually phased out, with more resources allocated to the Product Development segment, which is expected to generate higher profit margins[43] Health Segment This segment provides maternal and infant healthcare services and products in Mainland China, with revenue slightly decreasing to HKD 568,000 and segment loss marginally reduced - The Health segment provides various healthcare-related services and products for mothers and infants in Mainland China, and has established clinics offering traditional Chinese medicine healthcare services[44] Health Segment Performance | Metric | 2024 (Thousand HKD) | 2023 (Thousand HKD) | Change (%) | | :--- | :--- | :--- | :--- | | Revenue | 568 | 695 | (18.3) | | Segment Loss | (766) | (768) | (0.3) | Social Responsibility The company is committed to social responsibility, supporting charitable activities through its Yan Sang Volunteer Team and establishing the Yan Sang Scholarship for ten consecutive years, with a particular focus on child welfare - The Group provides assistance to vulnerable communities, such as children and the elderly, through its Yan Sang Volunteer Team, distributing essential supplies to those in need[45] - The Group has established the Yan Sang Scholarship for the tenth consecutive year for students from kindergarten to university in Hong Kong, aiming to encourage students with potential and diverse interests[45] Human Resources As of March 31, 2024, the Group had 247 employees, with an evaluation system for compensation, promotion, and training, and an employee share option scheme to recognize contributions Number of Employees | Metric | March 31, 2024 | March 31, 2023 | | :--- | :--- | :--- | | Total number of employees | 247 | 253 | - Employee remuneration includes fixed salaries, individual sales commissions, and year-end discretionary performance bonuses, with an evaluation system for salary reviews and promotions[47] - The share option scheme was adopted in September 2014 to recognize and reward employees for their contributions to the Group[47] Outlook The company remains confident in Hong Kong market growth, focusing on new product development and expanding its Mainland China distribution network, particularly in children's health supplements to capitalize on the "three-child" policy, with future strategies including brand enhancement, manufacturing expansion, and e-commerce growth - The Group is confident that the Hong Kong market will continue to provide a stable platform for business growth and expansion, focusing on developing the Mainland China children's health supplement market to benefit from the "three-child" policy[48] - Future strategies include continuously enhancing the awareness of own brands, expanding manufacturing operations, and developing e-commerce for own-brand products[49][51][52] (a) Continuously Enhancing Brand Awareness of the Group's Own Brands The Group will continuously enhance "Yan Sang" brand awareness through targeted advertising, multi-channel marketing, and diversified product portfolios, with new product development focusing on maternal and infant health supplements in Hong Kong and Mainland China - The Group will continuously enhance the "Yan Sang" brand awareness through effective, targeted, and positioned advertising campaigns, implementing multi-channel marketing and diversified product portfolio strategies[49] - New product development plans for the coming year will focus on developing more maternal and infant health supplement products in Hong Kong and Mainland China[49] (b) Expanding the Group's Manufacturing Business The Group has built a health supplement production plant in Yunfu, Guangdong, China, aiming for in-house production to reduce costs, enhance efficiency, and improve quality control, viewing this long-term investment as crucial for future market opportunities - The Group has constructed a health supplement production plant in Yunfu, Guangdong Province, China, aiming for in-house production to reduce costs, enhance efficiency, and improve quality control[51] - This facility is a long-term investment that will help the Group seize future opportunities in the health supplement market[51] (c) Expanding E-commerce for Own-Brand Products The Group will continue to develop and upgrade its e-commerce platforms, focusing on online sales of "Yan Sang" products, particularly for Mainland China customers, by leveraging platforms like Xiaohongshu, Douyin, Kuaishou, Tmall, JD, and Pinduoduo, and collaborating with KOLs for live e-commerce - The Group will continue to develop and upgrade its e-commerce platforms, focusing on online sales of "Yan Sang" products, especially targeting Mainland China customers[52] - The Group has established a presence on platforms such as Xiaohongshu, Douyin, Kuaishou, Tmall, JD, and Pinduoduo, and collaborates with KOLs for e-commerce live streaming to expand its online sales network[52] E-commerce Platform Revenue | Metric | 2024 (Million HKD) | 2023 (Million HKD) | | :--- | :--- | :--- | | E-commerce Platform Revenue | 17.4 | 25.9 | Financial Review In FY2024, the company's revenue grew 13.7%, gross profit surged 47.8% with a 62.0% gross margin, and net loss narrowed by 26.0%, while selling and distribution expenses rose significantly due to increased marketing, administrative expenses decreased, and net current liabilities expanded, leading to a higher gearing ratio Revenue The company's revenue grew 13.7% in FY2024, primarily driven by the Product Development segment, while the Trading of Goods and Health segments experienced revenue declines Revenue Overview | Metric | 2024 (Thousand HKD) | 2023 (Thousand HKD) | Change (%) | | :--- | :--- | :--- | :--- | | Total Revenue | 92,617 | 81,460 | 13.7 | | Product Development Segment revenue increase | 11,900 (approx) | - | 15.1 | | Trading of Goods Segment revenue | 131 | 747 | (82.5) | | Health Segment revenue | 568 | 695 | (18.3) | Cost of Sales Cost of sales decreased by 17.4%, primarily due to increased sales of higher-margin products from the Product Development segment Cost of Sales Overview | Metric | 2024 (Thousand HKD) | 2023 (Thousand HKD) | Change (%) | | :--- | :--- | :--- | :--- | | Cost of Sales | 35,211 | 42,624 | (17.4) | - The decrease in cost of sales was primarily due to increased sales of higher-margin products from the Product Development segment[55] Gross Profit and Gross Profit Margin Gross profit surged by 47.8%, with the gross profit margin increasing by 14.3 percentage points to 62.0%, primarily driven by higher sales of high-margin products Gross Profit and Gross Profit Margin Overview | Metric | 2024 (Thousand HKD) | 2023 (Thousand HKD) | Change (%) | | :--- | :--- | :--- | :--- | | Gross Profit | 57,406 | 38,836 | 47.8 | | Gross Profit Margin | 62.0% | 47.7% | 14.3 ppt | - The increase in gross profit and gross profit margin was primarily due to increased sales of higher-margin products from the Product Development segment[56] Other Income Other income decreased by 47.6%, primarily due to reduced government grants and interest income from bank deposits Other Income Overview | Metric | 2024 (Thousand HKD) | 2023 (Thousand HKD) | Change (%) | | :--- | :--- | :--- | :--- | | Other Income | 3,085 | 5,874 | (47.6) | | Government grants | 1,421 | 2,666 | (46.7) | | Interest income from bank deposits | 80 | 757 | (89.4) | - The decrease in other income was primarily due to reduced government grants and interest income from bank deposits[57] Other Gains and Losses Other losses decreased, primarily benefiting from fair value gains on financial assets at fair value through profit or loss, partially offset by impairment losses on property, plant, and equipment Other Gains and Losses Overview | Metric | 2024 (Thousand HKD) | 2023 (Thousand HKD) | | :--- | :--- | :--- | | Other Losses | (1,449) | (4,215) | | Fair value gains/(losses) on financial assets at fair value through profit or loss | 6,682 | (1,279) | | Impairment loss on property, plant and equipment | (3,856) | - | - The decrease in other losses was primarily due to fair value gains on financial assets at fair value through profit or loss, partially offset by impairment losses on property, plant and equipment[59] Selling and Distribution Expenses Selling and distribution expenses significantly increased by 134.2%, primarily due to adjusted and upgraded marketing plans and increased advertising to capitalize on the recovering market opportunities Selling and Distribution Expenses Overview | Metric | 2024 (Thousand HKD) | 2023 (Thousand HKD) | Change (%) | | :--- | :--- | :--- | :--- | | Selling and Distribution Expenses | 12,526 | 5,349 | 134.2 | - The increase in selling and distribution expenses was due to the adjustment and upgrade of marketing plans, with increased advertising to seize business opportunities from the gradual recovery of Hong Kong's tourism and retail sectors[60] Administrative Expenses Administrative expenses decreased by 4.7%, primarily due to a reduction in miscellaneous expenses Administrative Expenses Overview | Metric | 2024 (Thousand HKD) | 2023 (Thousand HKD) | Change (%) | | :--- | :--- | :--- | :--- | | Administrative and Other Operating Expenses | 67,012 | 70,309 | (4.7) | - The decrease in administrative expenses was primarily due to a reduction in miscellaneous expenses[61] Taxation Income tax credit significantly increased, reflecting a positive impact of taxation on the company's financial performance Income Tax Credit Overview | Metric | 2024 (Thousand HKD) | 2023 (Thousand HKD) | | :--- | :--- | :--- | | Income Tax Credit | 395 | 55 | Loss for the Year Loss for the year narrowed by 26.0%, indicating an improvement in the company's profitability Loss for the Year Overview | Metric | 2024 (Thousand HKD) | 2023 (Thousand HKD) | Change (%) | | :--- | :--- | :--- | :--- | | Loss for the Year | (36,400) | (49,168) | (26.0) | Other Comprehensive Income/(Expense) Other comprehensive income shifted from an expense to income, primarily attributable to fair value gains on financial assets and reduced exchange losses Other Comprehensive Income/(Expense) Overview | Metric | 2024 (Thousand HKD) | 2023 (Thousand HKD) | | :--- | :--- | :--- | | Other Comprehensive Income/(Expense) | 5,820 | (12,721) | | Fair value profit/(loss) on financial assets at fair value through other comprehensive income | 9,415 | (1,216) | | Exchange differences on translation of foreign operations | (3,595) | (11,505) | - Other comprehensive income turned from an expense to income, primarily attributable to fair value gains on financial assets at fair value through other comprehensive income and reduced exchange losses[65] Financial Assets at Fair Value Through Other Comprehensive Income The company holds medium-to-long-term investments, including listed and unlisted equity securities, with significant fair value gains from Nanjing Zhong Sheng United shares - The Group holds several medium-to-long-term investments, including two listed equity securities and one unlisted equity security[66] Financial Assets at Fair Value Through Other Comprehensive Income | Investment Target | Carrying Amount as at March 31, 2024 (Thousand HKD) | Carrying Amount as at March 31, 2023 (Thousand HKD) | Fair Value Change (Thousand HKD) | | :--- | :--- | :--- | :--- | | Feng Sheng (607) Shares | 1,200 | 13,200 | (12,000) (Loss) | | Nanjing Zhong Sheng United (3332) Shares | 26,800 | 5,400 | 21,400 (Gain) | Inventories Total inventories decreased by 10.4%, primarily due to a reduction in work-in-progress for distribution Inventories Overview | Metric | March 31, 2024 (Thousand HKD) | March 31, 2023 (Thousand HKD) | Change (%) | | :--- | :--- | :--- | :--- | | Inventories | 14,216 | 15,865 | (10.4) | | Work-in-progress for distribution | 500 (approx) | 1,700 (approx) | (68.0) (approx) | - The decrease in inventories was primarily due to a reduction in work-in-progress for distribution[70] Financial Assets at Fair Value Through Profit or Loss – Held for Trading The company holds two listed equity securities for short-term trading purposes, with a carrying amount of HKD 8.1 million - The Group holds two listed equity securities for short-term trading purposes, including 13,710,000 shares of Nanjing Zhong Sheng and 200,000 shares of Minsheng International Holdings Limited[71] Financial Assets at Fair Value Through Profit or Loss – Held for Trading | Metric | March 31, 2024 (Thousand HKD) | | :--- | :--- | | Carrying amount of equity securities held for trading | 8,100 | Trade Receivables Trade receivables (net of credit loss allowance) decreased by 20.4%, reflecting improved efficiency in accounts receivable management Trade Receivables Overview | Metric | March 31, 2024 (Thousand HKD) | March 31, 2023 (Thousand HKD) | Change (%) | | :--- | :--- | :--- | :--- | | Trade receivables (net of allowance for credit losses) | 7,939 | 9,969 | (20.4) | Trade Payables Trade payables increased by 30.9%, indicating an increase in the company's purchasing activities or an extension of payment cycles Trade Payables Overview | Metric | March 31, 2024 (Thousand HKD) | March 31, 2023 (Thousand HKD) | Change (%) | | :--- | :--- | :--- | :--- | | Trade payables | 9,002 | 6,875 | 30.9 | Liquidity, Gearing Ratio and Capital Structure Bank balances and cash slightly increased, but unutilized bank facilities significantly decreased, with the gearing ratio rising to 1.5 and the current ratio remaining stable at 0.2 Liquidity and Capital Structure Overview | Metric | March 31, 2024 (Thousand HKD) | March 31, 2023 (Thousand HKD) | Change (%) | | :--- | :--- | :--- | :--- | | Bank balances and cash | 11,232 | 10,775 | 4.2 | | Outstanding bank and other borrowings | 319,400 (approx) | 317,100 (approx) | 0.7 | | Unutilized bank facilities | 8,320 | 38,400 | (78.3) | | Gearing ratio | 1.5 | 1.3 | 0.2 ppt | | Current ratio | 0.2 | 0.2 | Stable | Contingent Liabilities As of March 31, 2024, the Board was not aware of any significant contingent liabilities - As of March 31, 2024, the Directors were not aware of any significant matters that could give rise to material contingent liabilities for the Group[76] Pledge of the Group's Assets The carrying amount of assets pledged to banks was approximately HKD 451.1 million, a decrease from the previous year Carrying Amount of Pledged Assets | Metric | March 31, 2024 (Thousand HKD) | March 31, 2023 (Thousand HKD) | Change (%) | | :--- | :--- | :--- | :--- | | Carrying amount of assets pledged to banks | 451,100 (approx) | 480,300 (approx) | (6.1) | Commitments As of March 31, 2024, the company had no capital commitments for the acquisition of property, plant, and equipment - As of March 31, 2024, the Group had no capital commitments for the acquisition of property, plant and equipment[78] Financial Management and Policies The company will continue to adopt prudent financial and treasury policies, with all financial activities centrally managed, and executive directors and the financial controller jointly responsible for identifying investment opportunities and monitoring cash positions - The Group will continue to adopt prudent financial and treasury policies, with all financial and treasury activities centrally managed and controlled[79] - The executive Directors, with the assistance of the Group's financial controller, are responsible for identifying, reviewing, evaluating, and analyzing the Group's investment opportunities, and regularly monitoring cash positions and funding requirements[79] Subsequent Events No significant disclosable subsequent events have occurred since March 31, 2024, up to the date of this announcement - No significant events affecting the Group and requiring disclosure have occurred since March 31, 2024, up to the date of this announcement[80] Other Information This section presents additional disclosures, including extracts from the independent auditor's report, corporate governance practices, and definitions of key terms used in the announcement Extract of Independent Auditor's Report The auditor deemed the consolidated financial statements to fairly represent the company's financial position and performance, while highlighting a material uncertainty regarding going concern due to current liabilities exceeding current assets by approximately HKD 198.6 million - The auditor believes the consolidated financial statements fairly present the Group's consolidated financial position as at March 31, 2024, in accordance with Hong Kong Financial Reporting Standards issued by the Hong Kong Institute of Certified Public Accountants[82] - The auditor draws attention to Note 2 to the consolidated financial statements, which indicates that the Group incurred a net loss of approximately HKD 36.4 million for the year ended March 31, 2024, and its current liabilities exceeded its current assets by approximately HKD 198.6 million, representing a material uncertainty regarding its ability to continue as a going concern[83] Dividends The Board does not recommend the payment of a final dividend for the current year - The Board does not recommend the payment of a final dividend for the current year (2023: nil)[84] Closure of Register of Members To determine shareholders' eligibility to attend and vote at the upcoming Annual General Meeting, the company will suspend its share transfer registration from September 23 to September 26, 2024 - The Company's register of members will be closed from Monday, September 23, 2024, to Thursday, September 26, 2024[85] - To be eligible to attend and vote at the said meeting, all transfer forms, accompanied by the relevant share certificates, must be lodged with Tricor Investor Services Limited for registration not later than 4:30 p.m. on Friday, September 20, 2024[85] Corporate Governance Practices The company is committed to maintaining high standards of corporate governance and complies with the principles and provisions of the Corporate Governance Code set out in Appendix C1 of the Listing Rules - The Group's Board of Directors and senior management are committed to maintaining high standards of corporate governance, establishing good corporate governance practices to enhance accountability and operational transparency[87] Compliance with the Corporate Governance Code The company complied with all applicable provisions of the Corporate Governance Code this year, except for Mr. Pang Siu Yin holding both Chairman and Chief Executive Officer roles, a deviation from Code Provision C.2.1, which the Board believes is in the company's best interest - The Company has complied with all applicable code provisions of the Corporate Governance Code throughout the current year, except for the roles of Chairman and Chief Executive Officer being held by Mr. Pang Siu Yin, which deviates from Code Provision C.2.1[88] - The Board believes that Mr. Pang's dual role facilitates efficient management and business development, serving the best interests of the Group[88] Directors' Securities Transactions All Directors confirmed compliance with the Model Code for Securities Transactions by Directors of Listed Issuers, as set out in Appendix C3 of the Listing Rules, throughout the current year - All Directors confirmed their compliance with the Model Code for Securities Transactions by Directors of Listed Issuers, as set out in Appendix C3 of the Listing Rules, throughout the current year[89] Purchase, Sale or Redemption of Shares Neither the company nor any of its subsidiaries purchased, sold, or redeemed any shares during the current year - Neither the Company nor any of its subsidiaries purchased, sold, or redeemed any shares during the current year[90] Audit Committee The Audit Committee, comprising three independent non-executive directors, reviewed the current year's consolidated financial statements and found them compliant with applicable accounting standards and Listing Rules - The Audit Committee, composed of three independent non-executive Directors, is primarily responsible for reviewing and monitoring the Group's financial information, overseeing the financial reporting system, risk management, and internal control systems[91] - The Audit Committee has reviewed the Group's consolidated financial statements for the current year and considers them to be in compliance with applicable accounting standards and the Listing Rules[91] Scope of Work of the Company's Auditor Crowe (HK) CPA Limited, the company's auditor, reconciled the financial figures in the final results announcement with the audited consolidated financial statements, but this work did not constitute an assurance engagement, thus no opinion or assurance conclusion was expressed - Crowe (HK) CPA Limited, the Group's auditor, has agreed the figures in the final results announcement regarding the Group's consolidated statement of financial position, consolidated statement of profit or loss and other comprehensive income, and their related notes for the current year with the amounts set out in the audited consolidated financial statements[93] - The work performed by the auditor did not constitute an assurance engagement, and accordingly, no opinion or assurance conclusion was expressed on the final results announcement[93] Publication of Annual Results and Annual Report The annual results announcement will be published on the HKEX website and the company's website, with the annual report to be published in due course - The annual results announcement will be published on the HKEX website www.hkexnews.hk and the Company's website www.hinsanggroup.com[94](index=94&type=chunk) - The Company's annual report will be published on the HKEX website and the Company's website in due course in accordance with the Listing Rules[94] Definitions This section provides definitions for key terms and terminology used throughout the announcement - This section provides definitions for key terms and terminology used throughout the announcement, including Audit Committee, Board, Brand Development and Management Segment, Company, Directors, Feng Sheng, Group, Health Segment, HKD, Hong Kong, Listing Rules, Mainland China, Product Development Segment, Shares, Shareholders, Share Option Scheme, Stock Exchange, Trading of Goods Segment, and the Year[95][96][97]