新耀莱(00970) - 2025 - 年度业绩

Consolidated Statement of Comprehensive Income The Group's consolidated statement of comprehensive income for the year ended March 31, 2025, shows a significant decrease in revenue, leading to expanded gross loss and operating loss, ultimately worsening both loss for the year and total comprehensive loss compared to the prior year Key Financial Data from Consolidated Statement of Comprehensive Income (HK$ thousand) | Metric | 2025 | 2024 | | :--- | :--- | :--- | | Revenue | 2,067,544 | 3,264,747 | | Cost of sales | (1,926,583) | (2,958,400) | | Gross profit | 140,961 | 306,347 | | Other income, gains and losses | (78,449) | (67,388) | | Operating loss | (666,565) | (550,470) | | Loss before income tax | (731,799) | (631,855) | | Loss for the year | (717,317) | (612,287) | | Total comprehensive loss for the year | (669,167) | (686,395) | - Basic and diluted loss per share attributable to owners of the Company was (13.7) HK cents, an improvement from (16.1) HK cents in the prior year, which may be related to an increase in the weighted average number of ordinary shares despite the expanded total loss[4] Consolidated Statement of Financial Position As of March 31, 2025, the Group's consolidated statement of financial position indicates a decrease in both total assets and total liabilities, resulting in reduced net assets and total equity, with a significant contraction in net current assets Key Financial Data from Consolidated Statement of Financial Position (HK$ thousand) | Metric | 2025 | 2024 | | :--- | :--- | :--- | | Assets | | | | Non-current assets | 1,120,204 | 1,649,415 | | Current assets | 787,630 | 1,203,323 | | Liabilities | | | | Current liabilities | 722,669 | 991,977 | | Non-current liabilities | 214,890 | 269,241 | | Equity | | | | Net assets | 970,275 | 1,591,520 | | Total equity | 970,275 | 1,591,520 | - Net current assets significantly decreased from HK$211,346 thousand in 2024 to HK$64,961 thousand in 2025, indicating increased liquidity pressure[5] - Financial assets at fair value through other comprehensive income increased from HK$133,856 thousand in 2024 to HK$209,168 thousand, reflecting an increase in the value of certain investments[5] Notes 1. General Information The Group's principal businesses include luxury goods and motor vehicle dealerships, after-sales services, property management, property leasing, money lending, and film-related operations, primarily in Hong Kong and Mainland China, with significant changes in the Board of Directors during the year - The Group's principal businesses cover luxury goods and motor vehicle dealerships, after-sales services, property management, property leasing, money lending, and film-related operations, primarily located in Hong Kong and Mainland China[7] - Following the Extraordinary General Meeting on April 23, 2024, significant changes occurred in the Board of Directors, with several executive, non-executive, and independent non-executive directors resigning, and new independent non-executive directors being appointed[7] 2. Basis of Preparation The consolidated financial statements are prepared in accordance with Hong Kong Financial Reporting Standards and the Hong Kong Companies Ordinance, primarily on a historical cost basis, with investment properties and certain financial instruments measured at fair value, and presented in Hong Kong dollars, involving accounting estimates and assumptions - The consolidated financial statements are prepared in accordance with Hong Kong Financial Reporting Standards issued by the Hong Kong Institute of Certified Public Accountants and the disclosure requirements of the Hong Kong Companies Ordinance[8] - The statements are primarily prepared on a historical cost basis, except for investment properties and certain financial instruments which are measured at fair value, and are presented in Hong Kong dollars[9] 3. Changes in Accounting Policies The Group adopted several HKFRS amendments effective April 1, 2024, which had no material impact on current or prior period results and financial position, while new standards and amendments issued but not yet effective, particularly HKFRS 18, are expected to significantly affect presentation and disclosure - Amendments to Hong Kong Financial Reporting Standards effective April 1, 2024 (including classification of liabilities as current or non-current, non-current liabilities with covenants, etc.) had no material impact on the Group's results and financial position for the current and prior periods[10] - HKFRS 18 'Presentation and Disclosure in Financial Statements' is expected to have a significant impact on the presentation and disclosure of certain items in the consolidated financial statements, including classification and subtotals in the statement of profit or loss, aggregation/disaggregation and labelling of information, and disclosure of management-defined performance measures[12] 4. Segment Information The Group's operating segments include motor vehicle distribution, non-motor vehicle distribution, and property management and others, with significant revenue declines in motor vehicle and non-motor vehicle distribution in FY2025, leading to worsened reportable segment results, and impairment losses recognized across multiple segments - The Group identifies three reportable operating segments: Motor Vehicle Distribution (Bentley, Lamborghini, Rolls-Royce), Non-Motor Vehicle Distribution (luxury watches, jewelry, fine wines, etc.), and Property Management and Others (property management, leasing, money lending, film-related businesses)[16] FY2025 Revenue and Results by Segment (HK$ thousand) | Segment | Revenue from External Customers | Reportable Segment Results | | :--- | :--- | :--- | | Motor Vehicle Distribution | 1,724,766 | (281,912) | | Non-Motor Vehicle Distribution | 276,186 | (65,396) | | Property Management and Others | 66,592 | (210,278) | | Total | 2,067,544 | (557,586) | - In FY2025, the Motor Vehicle Distribution segment recognized impairment of property, plant and equipment of HK$328,542 thousand, while the Property Management and Others segment recognized impairment of goodwill of HK$29,318 thousand and other intangible assets of HK$120,126 thousand[17] Reconciliation of Reportable Segment Results to Loss Before Income Tax (HK$ thousand) | Item | 2025 | 2024 | | :--- | :--- | :--- | | Reportable segment results | (557,586) | (407,980) | | Bank interest income | 656 | 929 | | Unallocated corporate other income, gains and losses | (41,410) | (29,885) | | Unallocated corporate expenses | (68,225) | (113,534) | | Finance costs | (65,234) | (81,385) | | Loss before income tax | (731,799) | (631,855) | 5. Revenue The Group's total revenue for FY2025 was HK$2,067,544 thousand, a significant decrease from HK$3,264,747 thousand in FY2024, with motor vehicle and other goods sales remaining the primary businesses, but motor vehicle sales revenue notably declined while after-sales service revenue slightly increased - The Group's principal businesses are the sale of motor vehicles and other goods, and the provision of motor vehicle-related after-sales services, with other businesses including property management, money lending, and property leasing services[23] Revenue Streams Breakdown (HK$ thousand) | Revenue Stream | 2025 | 2024 | | :--- | :--- | :--- | | Motor vehicle sales | 1,644,673 | 2,717,035 | | Other goods sales | 276,186 | 388,841 | | Provision of after-sales services | 80,093 | 78,136 | | Provision of property management services | 39 | 2,041 | | Interest income from money lending services | – | 8,702 | | Provision of property leasing services | 66,553 | 69,992 | | Total | 2,067,544 | 3,264,747 | - Motor vehicle sales revenue decreased by 39.5% year-on-year in FY2025, which was the primary reason for the decline in total revenue[24][25] 6. Other Income, Gains and Losses Other income, gains and losses for the year recorded a loss of HK$78,449 thousand, an increase from the HK$67,388 thousand loss in the prior year, primarily due to fair value changes in investment properties, investments in film and television programs, and revaluation losses on property, plant and equipment Other Income, Gains and Losses Breakdown (HK$ thousand) | Item | 2025 | 2024 | | :--- | :--- | :--- | | Bank interest income | 656 | 929 | | Fair value changes in investment properties | (35,357) | (70,879) | | Fair value changes in investments in film and television programs | (37,516) | (5,228) | | Revaluation loss on property, plant and equipment | (19,125) | (30,977) | | Income from advertising, exhibition and other services | 6,136 | 26,546 | | Total | (78,449) | (67,388) | - Fair value changes in investments in film and television programs significantly worsened from a loss of HK$5,228 thousand in 2024 to a loss of HK$37,516 thousand in 2025[26] - Government grants of HK$339 thousand were received in 2025, primarily for Beijing consumption stimulus subsidies, with no attached conditions[26] 7. Operating Loss The operating loss for the year was HK$666,565 thousand, an increase from HK$550,470 thousand in the prior year, primarily impacted by various impairment losses, including property, plant and equipment, other intangible assets, and goodwill, as well as increased inventory costs Key Components of Operating Loss (HK$ thousand) | Item | 2025 | 2024 | | :--- | :--- | :--- | | Inventory costs recognized as expense | 1,917,608 | 2,948,688 | | Depreciation of property, plant and equipment | 46,486 | 70,987 | | Employee benefit expenses | 57,745 | 88,745 | | Impairment of trade receivables | 2,300 | – | | Impairment of goodwill | 29,318 | 207,640 | | Impairment of other intangible assets | 120,126 | 40,548 | | Impairment of property, plant and equipment | 328,542 | 87,250 | - Impairment of property, plant and equipment significantly increased from HK$87,250 thousand in 2024 to HK$328,542 thousand in 2025[27] - Impairment of goodwill decreased from HK$207,640 thousand in 2024 to HK$29,318 thousand in 2025[27] 8. Finance Costs Finance costs for the year were HK$65,234 thousand, a decrease from HK$81,385 thousand in the prior year, primarily due to reduced interest on bank borrowings and other loans Finance Costs Breakdown (HK$ thousand) | Item | 2025 | 2024 | | :--- | :--- | :--- | | Interest on bank borrowings | 16,852 | 23,779 | | Interest on other loans | 28,466 | 35,406 | | Accrued interest on lease liabilities | 19,916 | 21,600 | | Accrued interest on convertible bonds | – | 600 | | Total | 65,234 | 81,385 | 9. Income Tax The Group's income tax credit was HK$14,482 thousand, a decrease from HK$19,568 thousand in the prior year, with Hong Kong profits tax at 16.5%, a two-tiered tax rate for some subsidiaries, and Mainland China subsidiaries taxed at 25% - Hong Kong profits tax rate is 16.5%, with a two-tiered tax rate of 8.25% on the first HK$2,000,000 of assessable profits for certain qualifying entities[28] - Mainland China subsidiaries are subject to income tax at a rate of 25%[28] Income Tax Breakdown (HK$ thousand) | Item | 2025 | 2024 | | :--- | :--- | :--- | | Total tax for the year | 1,246 | 4,346 | | Deferred tax | (15,728) | (23,914) | | Income tax credit | (14,482) | (19,568) | 10. Loss Per Share Basic and diluted loss per share attributable to owners of the Company was (13.7) HK cents, an improvement from (16.1) HK cents in the prior year, with basic and diluted loss per share being equal due to the anti-dilutive effect of potential dilutive ordinary shares Loss Per Share Calculation Data (HK$ thousand/share) | Item | 2025 | 2024 | | :--- | :--- | :--- | | Loss for calculation of basic loss per share | (718,179) | (613,424) | | Loss for calculation of diluted loss per share | (718,179) | (612,824) | | Weighted average number of ordinary shares | 525,989,633 | 379,959,236 | | Basic loss per share (HK cents) | (13.7) | (16.1) | | Diluted loss per share (HK cents) | (13.7) | (16.1) | - In FY2025, the Company had no outstanding potential ordinary shares, while share options and convertible bonds in FY2024 had an anti-dilutive effect on basic loss per share[32] 11. Property, Plant and Equipment / Investment Properties The carrying amount of property, plant and equipment significantly decreased this year, primarily due to impairment losses of HK$328,542 thousand recognized in motor vehicle distribution and revaluation losses from reclassification of land and buildings to investment properties, which also saw a decline in fair value - The Group reclassified certain land and buildings to investment properties due to a change in use to long-term leasing, recognizing a revaluation loss of HK$19,125 thousand (2024: HK$30,977 thousand)[34] - The cash-generating unit for motor vehicle distribution recognized an impairment loss of property, plant and equipment of HK$328,542 thousand due to a significant increase in segment losses and uncertain economic market conditions[35] - As of March 31, 2025, the recoverable amount of the motor vehicle distribution cash-generating unit was higher than its carrying amount, with no further impairment loss recognized, as the easing of model transition challenges is expected to improve market response and demand[36] - Fair value changes in investment properties resulted in a recognized loss of approximately HK$35,357 thousand (2024: HK$70,879 thousand), with all investment properties located in Mainland China[37] 12. Other Intangible Assets Impairment losses on other intangible assets amounted to approximately HK$120,126 thousand this year, primarily from film rights due to significantly reduced expected returns from a change in distribution strategy, and property management contract customer lists affected by the sluggish Mainland China property market - Film rights recognized an impairment loss of approximately HK$91,996 thousand due to a significant reduction in expected returns as the distribution strategy shifted from theatrical release to online video platforms[39] - Property management contract customer lists recognized an impairment loss of HK$28,130 thousand due to a significant decline in revenue caused by the sluggish Mainland China property market[40] 13. Trade Receivables Trade receivables primarily comprise rent and sales of goods and services, with the Group maintaining strict credit risk control and regularly reviewing overdue balances, totaling HK$32,013 thousand as of March 31, 2025, a slight increase from the prior year - Trade receivables primarily refer to rent receivable from tenants and accounts receivable from customers for sales of goods and provision of services[41] - The Group primarily requires prepayment or cash on delivery for retail customers, offers credit terms of up to three months for reputable customers, generally one to two months for wholesale customers, and two to three months for after-sales services to motor vehicle manufacturers[41] Ageing Analysis of Trade Receivables (HK$ thousand) | Ageing | 2025 | 2024 | | :--- | :--- | :--- | | 0 to 30 days | 25,630 | 21,833 | | 31 to 120 days | 2,676 | 2,919 | | 121 to 365 days | 556 | 4,919 | | Over 365 days | 3,151 | 1,929 | | Total | 32,013 | 31,600 | 14. Investments in Film and Television Programs The Group's investments in film and television programs significantly decreased from HK$42,846 thousand in 2024 to HK$2,258 thousand in 2025, with fair value determined using the income approach based on estimated distribution revenue and discounted cash flow method Investments in Film and Television Programs Breakdown (HK$ thousand) | Item | 2025 | 2024 | | :--- | :--- | :--- | | Investments in film, at fair value through profit or loss | 2,258 | 19,839 | | Investments in television programs, at fair value through profit or loss | – | 23,007 | | Total | 2,258 | 42,846 | - Fair value is revalued by independent professional qualified valuers using the income approach, determined based on estimated film distribution revenue using the discounted cash flow method[43] 15. Trade Payables As of March 31, 2025, the Group's total trade payables amounted to HK$3,816 thousand, a significant decrease from HK$20,947 thousand in the prior year Ageing Analysis of Trade Payables (HK$ thousand) | Ageing | 2025 | 2024 | | :--- | :--- | :--- | | 0 to 30 days | 3,515 | – | | 31 to 60 days | – | 16,023 | | 61 to 90 days | – | 1,891 | | Over 90 days | 301 | 3,033 | | Total | 3,816 | 20,947 | 16. Dividends The Company did not pay, declare, or propose any dividends for the years ended March 31, 2024, and 2025 - The Company neither paid, declared, nor proposed any dividends for both FY2024 and FY2025[45] Management Discussion and Analysis Business Review Motor Vehicle Distribution Motor vehicle distribution revenue significantly decreased by 38.3% to approximately HK$1,724.8 million, primarily due to declines in Bentley and Rolls-Royce sales, average selling prices, and gross margins, while Lamborghini sales slightly increased despite fewer units sold Motor Vehicle Distribution Revenue (HK$ thousand) | Brand | FY2025 | FY2024 | Change (%) | | :--- | :--- | :--- | :--- | | Bentley | 778,000 | 1,352,700 | (42.5%) | | Rolls-Royce | 568,800 | 1,073,500 | (47.0%) | | Lamborghini | 297,900 | 290,800 | 2.4% | | Total | 1,724,800 | 2,795,200 | (38.3%) | - Overall gross profit from motor vehicle sales decreased by approximately 78.1%, primarily due to a decline in average selling prices and gross margins for Bentley and Rolls-Royce[46] - After-sales service revenue increased by approximately 2.5%, but the gross profit margin decreased from 30.2% to 25.3%[47] Non-Motor Vehicle Distribution The non-motor vehicle distribution segment's revenue decreased by 29.0% to approximately HK$276.2 million, with the gross profit margin falling from 9.3% to 6.4%, mainly due to the recognition of approximately HK$52.3 million in inventory impairment, while Bang & Olufsen performed best among brands - Revenue from the non-motor vehicle distribution segment decreased by approximately 29.0% from approximately HK$388,800 thousand to approximately HK$276,200 thousand[48] - Gross profit margin decreased from 9.3% to 6.4%, primarily due to the recognition of approximately HK$52,300 thousand in inventory impairment within cost of sales[48] - Bang & Olufsen performed best among brands including watches, jewelry, fine wines, and audio equipment[49] Others Revenue from the "Others" segment significantly decreased by 17.5% to approximately HK$66.6 million, mainly due to the suspension of money lending business and no new loans issued, reduced property management service revenue, and film investment business generating no revenue while facing ongoing legal disputes - Revenue from the Others segment decreased by approximately 17.5% from approximately HK$80,700 thousand to approximately HK$66,600 thousand, primarily due to the suspension of money lending business[50] - Property management business revenue decreased by approximately 7.6% to approximately HK$66,600 thousand due to the cancellation of leases with certain tenants[50] - The investments in film and television programs business generated no revenue during the current financial year, and legal proceedings against the film producers are ongoing[50] Equity Investments The Group holds shares in Bang & Olufsen A/S (B&O) as a long-term investment, with its carrying amount significantly increasing due to share price appreciation and share acquisitions, and further increasing its stake post-reporting period, while its investment in New Idea Group Limited has been fully disposed of - The Group holds B&O shares as a long-term investment, holding 13,450,000 shares as of March 31, 2025, representing approximately 9.13% of the issued shares[52] - The carrying amount of the B&O investment increased by approximately 57.8% from approximately HK$132,500 thousand to approximately HK$209,200 thousand, primarily due to share price appreciation and acquisition of shares[52] - Subsequent to the reporting period, the Group further acquired 2,164,140 B&O shares, increasing its total holding to 15,614,140 shares, representing approximately 10.60% of the issued shares[53] - The B&O investment generated no dividends in the current financial year, and the shareholding in New Idea Group Limited has decreased from 2,670,000 shares to zero shares[54][55] Prospects Facing an operating loss in the current financial year, the Group's new management will prudently manage finances and remains confident in maintaining its leading position in China's luxury goods market despite ongoing challenges - The Group's new management will prudently manage its financial affairs in the next financial year to address the operating loss incurred in the current financial year[56] - Despite the challenges, management remains confident in maintaining the Group's leading position in China's luxury goods market[56] Financial Review Revenue The Group's FY2025 revenue was approximately HK$2,067.5 million, a 36.7% decrease from the prior year, primarily due to weakened market conditions and intense competition in the motor vehicle business leading to reduced sales - Revenue for FY2025 was approximately HK$2,067,500 thousand, representing a decrease of approximately 36.7% compared to FY2024[57] - The decrease in revenue was primarily attributable to weak market conditions and intense competition in the motor vehicle business, leading to a decline in motor vehicle sales[57] Revenue Streams and Changes (HK$ thousand) | Revenue Stream | FY2025 | FY2024 | Change (%) | | :--- | :--- | :--- | :--- | | Motor vehicle sales | 1,644,673 | 2,717,035 | (39.5%) | | Provision of after-sales services | 80,093 | 78,136 | 2.5% | | Non-motor vehicle distribution segment | 276,186 | 388,841 | (29.0%) | | Others | 66,592 | 80,735 | (17.5%) | | Total | 2,067,544 | 3,264,747 | (36.7%) | Gross Profit and Gross Profit Margin The Group's FY2025 gross profit decreased by 54.0% to approximately HK$141.0 million, with the gross profit margin falling from 9.4% to 6.8%, primarily due to a decline in motor vehicle sales gross profit margin caused by weak market conditions and intense competition - Gross profit decreased by approximately 54.0% to approximately HK$141,000 thousand (2024: approximately HK$306,300 thousand)[58] - Gross profit margin decreased from 9.4% to 6.8%[58] - The decline in gross profit was primarily due to a decrease in the gross profit margin of motor vehicle sales caused by weak market conditions and intense competition[58] Other Income, Gains and Losses Other income, gains and losses for the year recorded a loss of approximately HK$78.4 million, an increase from the prior year's loss of approximately HK$67.4 million, primarily stemming from fair value changes in investment properties, investments in film and television programs, and revaluation losses on property, plant and equipment - Other income, gains and losses recorded a loss of approximately HK$78,400 thousand (2024: loss of approximately HK$67,400 thousand)[59] - Primarily stemmed from fair value changes in investment properties, investments in film and television programs, and revaluation losses on property, plant and equipment[59] Impairment of Goodwill and Property, Plant and Equipment Impairment losses for the year included approximately HK$29.3 million for goodwill, mainly from property management services, and approximately HK$328.5 million for property, plant and equipment, primarily from motor vehicle distribution, with management assessing cash-generating units and recognizing impairment based on recoverable amounts - Impairment loss on goodwill was approximately HK$29,300 thousand, mainly attributable to property management services (2024: HK$207,600 thousand, of which HK$200,200 thousand was attributable to motor vehicle distribution)[60] - Impairment loss on property, plant and equipment was approximately HK$328,500 thousand (2024: HK$87,300 thousand)[60] - The motor vehicle business cash-generating unit recognized an impairment loss of property, plant and equipment of HK$328,542 thousand due to a significant increase in segment losses and uncertain economic market conditions[62][63] - As of March 31, 2025, the property management services cash-generating unit's recoverable amount was higher than its carrying amount due to increased leased area and improved property rental income streams, with no further impairment recognized[61] Impairment of Other Intangible Assets Impairment losses on other intangible assets amounted to approximately HK$120.1 million this year, comprising HK$92.0 million for film rights and HK$28.1 million for property management contract customer lists - Impairment loss on other intangible assets was approximately HK$120,100 thousand, of which HK$92,000 thousand was for film rights impairment and HK$28,100 thousand for property management contract customer lists impairment[64] - Film rights impairment was primarily due to a significant reduction in expected returns as the distribution strategy shifted from theatrical release to online video platforms[65] - Property management contract customer lists impairment was due to a significant decrease in revenue caused by the sluggish Mainland China property market[66] Selling and Distribution Costs Selling and distribution costs decreased by 47.6% to approximately HK$178.0 million, primarily due to reduced marketing and promotion expenses - Selling and distribution costs decreased by approximately 47.6% from approximately HK$339,400 thousand to approximately HK$178,000 thousand[67] - Primarily stemmed from a reduction in marketing and promotion expenses[67] Administrative Expenses Administrative expenses decreased by 33.1% to approximately HK$70.8 million, primarily due to reduced legal and professional fees for litigation and the absence of share-based payments - Administrative expenses decreased by approximately 33.1% from approximately HK$105,900 thousand to approximately HK$70,800 thousand[68] - Primarily due to a reduction in legal and professional fees for litigation and the absence of share-based payments[68] Finance Costs Finance costs decreased by 19.8% to approximately HK$65.2 million, primarily due to reduced borrowings for motor vehicle inventory purchases and partial repayment of bank loans - Finance costs decreased by approximately 19.8% from approximately HK$81,400 thousand to approximately HK$65,200 thousand[69] - Resulted from a decrease in borrowings for motor vehicle inventory purchases and the Group's repayment of certain bank loans during the current financial year[69] Liquidity and Financial Resources Cash Flow As of March 31, 2025, the Group's bank and cash on hand amounted to approximately HK$105.5 million, an increase from the prior year, primarily used for loan repayments, inventory purchases, and working capital, with changes mainly attributable to foreign currency translation differences - Bank and cash on hand amounted to approximately HK$105,500 thousand (2024: approximately HK$93,600 thousand), primarily denominated in HKD, RMB, and DKK[71] - The Directors believe that the Group possesses sufficient working capital and financial resources to meet its current business needs and future business expansion[71] Property, Plant and Equipment The Group's carrying amount of property, plant and equipment was approximately HK$526.0 million, a significant decrease from the prior year, with new acquisitions during the year offset by disposals, changes in use, and revaluation losses - Property, plant and equipment amounted to approximately HK$526,000 thousand (2024: approximately HK$949,600 thousand)[72] - Acquisition costs totaled approximately HK$9,800 thousand during the year, with net book value of disposals at approximately HK$13,600 thousand, and revaluation losses of approximately HK$19,100 thousand arising from changes in use[72][73] Investment Properties The Group's investment properties amounted to approximately HK$323.2 million, a decrease from the prior year, primarily due to a decline in fair value and the reclassification of owner-occupied properties to investment properties - Investment properties amounted to approximately HK$323,200 thousand (2024: approximately HK$346,700 thousand)[74] - The change in value was primarily due to a decrease in fair value and the reclassification of one owner-occupied property to an investment property[74] Goodwill The Group's goodwill amounted to approximately HK$53.9 million, a decrease from the prior year, primarily due to impairment of goodwill related to property management services during the current financial year - Goodwill amounted to approximately HK$53,900 thousand (2024: approximately HK$84,700 thousand)[75] - The decrease in goodwill was primarily due to the impairment of goodwill related to property management services incurred during the current financial year[75] Borrowings The Group's borrowings amounted to approximately HK$526.8 million, a 27.6% decrease from the prior year, primarily denominated in RMB, with the reduction attributed to loan repayments - Borrowings amounted to approximately HK$526,800 thousand, representing a decrease of approximately 27.6% compared to 2024 (2024: approximately HK$727,300 thousand)[76] - Borrowings were primarily denominated in RMB, and the decrease was mainly due to loan repayments during the current financial year[77] Gearing Ratio The Group's gearing ratio (total borrowings divided by total equity) increased to approximately 54.3%, up from 45.7% in the prior year - The gearing ratio increased to approximately 54.3% (2024: approximately 45.7%)[78] Inventories The Group's inventories decreased by 31.4% to approximately HK$556.9 million, primarily due to a reduction in motor vehicle inventories, while the average inventory turnover days increased from 126 to 132 days - Inventories decreased by approximately 31.4% from approximately HK$811,600 thousand to approximately HK$556,900 thousand[79] - Primarily due to a decrease in motor vehicle inventories, which accounted for approximately 67.6% of the Group's total inventories[79] - Average inventory turnover days increased from 126 days to 132 days[79] Foreign Exchange Risk The Group's revenue and expenses are primarily denominated in RMB and HKD, while production costs, purchases, and investments are denominated in RMB, HKD, DKK, and USD, with no foreign currency forward contracts entered into or unrealized gains or losses recorded during the current financial year - The Group's revenue and expenses are primarily denominated in RMB and HKD, while production costs, purchases, and investments are denominated in RMB, HKD, DKK, and USD[80] - No foreign currency forward contracts were entered into, nor were any related unrealized gains or losses recorded during the current financial year[80] Contingent Liabilities and Capital Commitments As of March 31, 2025, the Board believes the Group has no significant contingent liabilities or material capital commitments related to the acquisition of property, plant and equipment - As of March 31, 2025, the Group had no significant contingent liabilities[81] - As of March 31, 2025, the Group had no material capital commitments related to the acquisition of property, plant and equipment[81] Pledge of Assets As of March 31, 2025, the Group had pledged land and buildings, right-of-use assets, investment properties, pledged deposits, and inventories to secure general banking facilities and other financing - The Group has pledged land and buildings (approximately HK$475,300 thousand), right-of-use assets (approximately HK$419,200 thousand), investment properties (approximately HK$84,800 thousand), pledged deposits (approximately HK$31,200 thousand), and inventories (approximately HK$339,500 thousand) to obtain financing[82] Human Resources As of March 31, 2025, the Group had 319 employees, with staff costs of approximately HK$57.7 million, and provides various benefits and training, with annual compensation reviews - As of March 31, 2025, the Group had 319 employees (2024: 396 employees)[83] - Staff costs for the current financial year (including directors' emoluments and one-off equity-settled share option expenses) amounted to approximately HK$57,700 thousand (2024: approximately HK$88,700 thousand)[83] - The Group provides employees with benefits such as basic salaries, commissions, discretionary bonuses, medical insurance, retirement funds, and equity-settled share-based payments, and offers training[83][85] Use of Proceeds from Subscription of New Shares under General Mandate The Company completed the allotment and issuance of 74,879,418 new ordinary shares in July 2024, raising net proceeds of approximately HK$46.4 million, which were planned for litigation expenses, potential investments, and general working capital, with most funds utilized as of March 31, 2025 - In July 2024, the Company allotted and issued 74,879,418 new ordinary shares to Mr. Yang Yun and Mr. Li Zhancheng, with net proceeds of approximately HK$46,400 thousand[86] Planned Use and Utilization of Net Proceeds (HK$ million) | Planned Use | Disclosed Amount | Utilized during the year ended March 31, 2025 | Unutilized as at March 31, 2025 | | :--- | :--- | :--- | :--- | | Litigation expenses incurred | 8.0 | 8.0 | – | | Possible investments | 25.4 | 12.8 | 12.6 | | General working capital | 13.0 | 13.0 | – | | Total | 46.4 | 33.8 | 12.6 | Litigation Update Winding-up Petition and Appointment and Discharge of Joint Provisional Liquidators The Company successfully withdrew a winding-up petition filed by former directors and discharged joint provisional liquidators, but the Bermuda Court ruled the Company must pay approximately US$1.4 million in fees to the liquidators, which the Company has appealed - The Company successfully withdrew the winding-up petition filed by former directors and discharged the appointment of joint provisional liquidators[88] - The Bermuda Court ruled that the Company should pay the joint provisional liquidators approximately US$1,400,000 in remuneration, fees, costs, and expenses, for which the Company has applied for leave to appeal[89] Indemnity Claims Against Former Directors The Company initiated indemnity claims against certain former directors for all costs and losses incurred from the Bermuda litigation and provisional liquidator appointment, with the High Court ruling that Mr. Zheng Haojiang, Mr. Zhu Lei, and Ms. Cheng Bin must indemnify the Company on an indemnity basis - The Company has taken legal action for indemnity claims against certain former directors, seeking compensation for all costs and losses incurred from the Bermuda litigation and the appointment of provisional liquidators[90] - The High Court has ruled that Mr. Zheng Haojiang, Mr. Zhu Lei, and Ms. Cheng Bin must indemnify the Company for related costs and losses on an indemnity basis[90] Injunction Against Its Largest Shareholder and Shenwan The Company's injunction claims against its largest shareholder, Mr. Shi Qingliu, and Shenwan Hongyuan Financing (Hong Kong) Limited have been terminated, with the Company paying HK$6,162,303.8 and HK$400,000 respectively as full and final settlement amounts - The Company's injunction claims against its major shareholder, Mr. Shi Qingliu, and Shenwan Hongyuan Financing (Hong Kong) Limited have been terminated[91] - The Company has paid Mr. Shi and Shenwan HK$6,162,303.8 and HK$400,000 respectively as full and final settlement amounts[91] Borrower's Breach of Loan Agreements Both borrowers under the Group's two loan agreements have defaulted; for the HK$58 million loan to the first borrower, the Group obtained a court judgment and is pursuing enforcement actions, and for the HK$32 million loan to the second borrower, a judgment and bankruptcy order were obtained, with recovery efforts underway - The first borrower failed to repay the HK$58,000 thousand loan and accrued interest, and the Group obtained a judgment in its favor from the High Court of Hong Kong and is considering enforcement legal actions[92][93][95] - The second borrower failed to repay the HK$32,000 thousand loan and accrued interest, and the Group obtained a judgment and a bankruptcy order against the second borrower on February 6, 2024[96][97] Dividends The Board does not recommend a final dividend for the year ended March 31, 2025, and no interim dividends were distributed during the year, aiming to retain funds for operating and developing existing businesses - The Directors do not recommend the payment of a final dividend for the year ended March 31, 2025, and no interim dividends were distributed during the year[98] - This action aims to retain more funds for operating and developing existing businesses[98] Corporate Governance Practices The Group is committed to maintaining high corporate governance standards and complied with applicable code provisions of the Corporate Governance Code in Appendix C1 of the Listing Rules for the financial year, except for the temporary dual role of Chairman and Chief Executive, which the Board deemed not to impede the balance of power - The Company has complied with the applicable code provisions of the Corporate Governance Code as set out in Appendix C1 of the Listing Rules throughout the year ended March 31, 2025[99] - Until April 23, 2024, the roles of Chairman and Chief Executive Officer were combined and held by Mr. Zheng Haojiang, deviating from code provision C.2.1, but the Board believed this arrangement facilitated consistent leadership and that internal controls were sufficient to balance the functions[99] Change of Directors Effective June 12, 2025, Mr. Li Yunjiu was appointed as an independent non-executive director, while several executive, non-executive, and independent non-executive directors resigned, and Mr. Ju Qinghao was appointed as authorized representative under the Listing Rules and Companies Ordinance, and a member of the Remuneration Committee - Mr. Li Yunjiu was appointed as an independent non-executive director, a member of the Audit Committee and the Nomination Committee, effective June 12, 2025[100] - Mr. Qiu Peiyuan resigned as an executive director, Mr. Shi Jiahao, Mr. Wu Peng, Mr. Li Qingsong, and Mr. You Yiyang resigned as non-executive directors, and Mr. Liao Kenan and Mr. Wu Weixiong resigned as independent non-executive directors[100][101] - Executive Director Mr. Ju Qinghao was appointed as the Company's authorized representative under the Listing Rules and the Companies Ordinance, and a member of the Remuneration Committee[101] Change of Hong Kong Share Registrar Effective November 15, 2024, the Company's Hong Kong share registrar was changed to Tricor Investor Services Limited - Effective November 15, 2024, the Company's Hong Kong share registrar was changed to Tricor Investor Services Limited[102] Change of Principal Share Registrar in Bermuda Effective January 1, 2025, the Company's principal share registrar in Bermuda was changed to Appleby Global Corporate Services (Bermuda) Limited - Effective January 1, 2025, the Company's principal share registrar in Bermuda was changed to Appleby Global Corporate Services (Bermuda) Limited[102] Share Option Scheme The Company's share option scheme was adopted in September 2022 for a ten-year term, with no share options granted, exercised, lapsed, or cancelled during the year ended March 31, 2025, and 199,709 share options available for further grants - The Share Option Scheme was adopted on September 29, 2022, with a validity period of ten years[102] - During the year ended March 31, 2025, no share options were granted, exercised, lapsed, or cancelled under the Share Option Scheme[103] - As of March 31, 2025, 199,709 shares were available for further grants, representing approximately 0.05% of the weighted average number of issued shares during the period[104] Audit Committee and Review of Financial Statements The Audit Committee, comprising three independent non-executive directors, is responsible for reviewing and overseeing financial reporting and internal controls, and has reviewed the audited consolidated financial statements and annual results announcement for the year, deeming them compliant with applicable accounting standards and requirements - The Audit Committee comprises three independent non-executive directors: Mr. Chan Man Kit (Chairman), Ms. Wong Fai, and Mr. Li Yunjiu[105] - The Audit Committee has reviewed the Company's audited consolidated financial statements and annual results announcement for the year ended March 31, 2025, and considers them to be in compliance with applicable accounting standards, requirements, and the Listing Rules[105] Scope of Work by BDO Limited in Relation to this Preliminary Announcement The Company's auditor, BDO Limited, has reconciled the financial figures in this announcement with the audited consolidated financial statements, but their work does not constitute an assurance engagement, and thus no assurance opinion has been expressed - The auditor, BDO Limited, has reconciled the financial figures contained in this announcement with the audited consolidated financial statements[106] - Their work does not constitute an assurance engagement, and therefore no assurance opinion has been expressed on this announcement[106] Purchase, Sale or Redemption of the Company's Listed Securities During the year ended March 31, 2025, neither the Company nor any of its subsidiaries purchased, sold, or redeemed any of the Company's listed securities, and the Company held no treasury shares - Neither the Company nor any of its subsidiaries purchased, sold, or redeemed any of the Company's listed securities during the current financial year[107] - As of March 31, 2025, the Company held no treasury shares[107] Standard Code for Securities Transactions The Company has adopted the Standard Code for Securities Transactions as set out in Appendix C3 of the Listing Rules to regulate directors' securities dealings and as a guideline for relevant employees, with all directors confirming compliance and no non-compliance by relevant employees identified - The Company has adopted the Standard Code for Securities Transactions as set out in Appendix C3 of the Listing Rules to regulate directors' securities dealings[108] - All Directors confirmed compliance with the Standard Code throughout the year ended March 31, 2025, and up to the date of this announcement[108] Post Balance Sheet Events Subsequent to the reporting period, the Company allotted and issued 93,800,301 new shares in May 2025 under a general mandate, raising net proceeds of approximately HK$36.8 million, with no other significant events materially affecting the Group occurring thereafter - On May 19, 2025, the Company allotted and issued 93,800,301 subscription shares under a general mandate, with net proceeds of approximately HK$36,800 thousand[109] - Subsequent to this event and as of the date of this announcement, the total number of issued shares was 562,801,809 shares[109] - Save as disclosed, no other significant events materially affecting the Group occurred subsequent to the reporting period and up to the date of this announcement[110] Publication of Annual Results and Board Information This announcement has been published on the HKEX and Company websites, with the annual report to be dispatched to shareholders in due course, and the Board currently comprises one executive and three independent non-executive directors - This announcement has been published on the HKEX website (www.hkexnews.hk) and the Company's website (www.hk970.com)[111](index=111&type=chunk) - The Company's annual report for the year ended March 31, 2025, containing all information required by the Listing Rules, will be dispatched to the Company's shareholders in due course[111] - As of the date of this announcement, the Company has one executive director (Mr. Ju Qinghao) and three independent non-executive directors (Mr. Chan Man Kit, Ms. Wong Fai, and Mr. Li Yunjiu)[113]