上善黄金(01939) - 2025 - 年度财报

Corporate Information Directors and Committees During the reporting period, the company's board of directors and various committees underwent significant personnel changes, with several executive, non-executive, and independent non-executive directors resigning or being appointed between May and June 2025, and Mr. Wong Sze Kwan being appointed as the new Executive Director and Chairman of the Board - Significant changes occurred in the board membership, with several executive, non-executive, and independent non-executive directors resigning or being appointed on May 30, 2025, and June 20, 2025[6][7][8][9] - Mr. Wong Sze Kwan was appointed as an Executive Director on May 30, 2025, and as Chairman of the Board on June 20, 2025[6][8] - The chairmen and members of the Audit Committee, Remuneration Committee, Nomination Committee, and Corporate Governance Committee were also adjusted accordingly[8][9][11][12][13][14] Key Service Providers and Offices The company's key service providers include Union Power CPA Limited as auditor, and The Hongkong and Shanghai Banking Corporation Limited and Sumitomo Mitsui Banking Corporation as principal bankers. The company has headquarters and principal places of business in Japan and Hong Kong, with its share registrar in Hong Kong - The auditor is Union Power CPA Limited, and principal bankers include The Hongkong and Shanghai Banking Corporation Limited and Sumitomo Mitsui Banking Corporation[13][14] - The company's share registrar is Tricor Investor Services Limited, with its registered office in Hong Kong and its head office and principal place of business in Tokyo, Japan[15][16] Chairman's Statement Group Overview and Achievements Tokyo Chuo Auction Holdings Limited, a renowned Chinese and Japanese art auction house in Hong Kong and Japan with over ten years of experience, has established a widely recognized brand. Over the past year, the Group continuously improved operations through professional marketing, consolidating market position, business diversification (into contemporary art and fine wines), talent acquisition, and expanding market footprint - The Group is a renowned Chinese and Japanese art auction house in Hong Kong and Japan, specializing in Chinese paintings and calligraphy, Chinese antiques, and Chinese and Japanese tea ceremony utensils, with over ten years of operating experience[19][20] - Over the past year, the Group implemented various measures to improve operations, including using professional marketing techniques to enhance auction prices, strengthening market position and brand awareness, diversifying business into contemporary art and fine wines, recruiting high-quality talent, and planning to expand into other potential markets[25][26] Prospects and Future Strategies Facing global economic and financial market uncertainties, the Group plans to expand its business scope into contemporary art and jewelry, and accelerate the development of online systems and auction platforms to address economic uncertainties. Additionally, the newly appointed Executive Director, Mr. Wong Sze Kwan, will assist the Group in exploring the Greater Bay Area market and seeking cooperation opportunities with other auction companies to achieve stable growth and business diversification - Given global economic and financial market uncertainties, the Group plans to expand its business scope into contemporary art and jewelry, and accelerate the development of online systems and auction platforms to address economic uncertainties[28][29] - The newly appointed Executive Director, Mr. Wong Sze Kwan, will leverage his background and network in China to explore the auction and related services market in the Guangdong-Hong Kong-Macao Greater Bay Area, and seek business cooperation opportunities with other auction companies[32][33] - The Group will strive for stable growth and development in the future, continuously upholding its mission of "sourcing excellent artworks for art lovers" and enriching its range of auction items[32][33] Management Discussion and Analysis Business Review During the reporting period, the Group's business was adversely affected by global economic uncertainties, yet it successfully held 7 auctions, offering 4,166 lots, with 2,152 lots sold, achieving a success rate of 51.7%. The Group is actively expanding into new auction areas such as jewelry and contemporary art, and plans to further expand into the Taiwan market - Global economic and financial market uncertainties adversely affected the Chinese and Japanese art business, making market demand, art values, and auction market development unpredictable[35][37] - The Group successfully held 7 auctions, offering a total of 4,166 lots, with 2,152 lots sold, achieving a success rate of 51.7%[36][37] 2025 Fiscal Year Auction Results | Indicator | Hong Kong | Japan | | :--- | :--- | :--- | | Total Hammer Price | Approximately HK$92.0 million | Approximately JPY2,306.3 million | - The Group is actively developing new auction businesses such as jewelry and contemporary art to increase customer numbers and sources, identify new business opportunities, and plans to further expand into the Taiwan market[35][37] Prospects and Future Plan The Group plans to maintain stable growth, continuing to uphold the principle of "verifiable origin and traceable provenance" to source more precious artworks. Future focus will be on developing online auction platforms, jewelry, and contemporary art segments to diversify auction channels, and actively seeking cooperation with other auction companies and strategic investments to address economic uncertainties and achieve synergistic effects - The Group will strive for stable growth and development, upholding the principle of "verifiable origin and traceable provenance" to source more precious artworks for art lovers[40][42] - The Group will allocate more resources to develop online auction platforms, jewelry, and contemporary art segments to expand business and flexibly respond to economic uncertainties[40][42] - Management will seek suitable business partners for auction activities and consider strategic investments in art-related businesses to achieve synergistic effects[40][42] Financial Review During the reporting period, the Group's revenue increased by 7.25% year-on-year to approximately HK$62.1 million, and gross profit increased by 3.63% to approximately HK$48.5 million, though the overall gross profit margin slightly decreased. Net other gains significantly increased, primarily from fair value gains on financial assets at fair value through profit or loss. Administrative expenses decreased due to lower share-based payments, but loss attributable to owners of the Company remained approximately HK$19.5 million 2025 Fiscal Year Revenue and Gross Profit Overview | Indicator | 2025 (HK$ million) | 2024 (HK$ million) | YoY Change (%) | | :--- | :--- | :--- | :--- | | Revenue | 62.1 | 57.9 | 7.25 | | Revenue from art auction and related businesses | 52.2 | 48.7 | 7.19 | | Revenue from art sales | 9.9 | 9.2 | 7.61 | | Gross Profit | 48.5 | 46.8 | 3.63 | | Overall Gross Profit Margin | 78.1% | 80.8% | -2.7pp | | Gross Profit Margin for art auction and related businesses | 90.3% | 91.4% | -1.1pp | | Gross Profit Margin for art sales | 13.7% | 24.9% | -11.2pp | - Net other gains were approximately HK$5.3 million, primarily from fair value gains on financial assets at fair value through profit or loss, a significant increase from HK$7,000 in 2024[45][48] - Administrative expenses decreased by approximately 8.3% to approximately HK$39.9 million, mainly due to a reduction in equity-settled share-based payments recognized[51][55] 2025 Fiscal Year Key Financial Data | Indicator | 2025 (HK$ million) | 2024 (HK$ million) | | :--- | :--- | :--- | | Selling and distribution expenses | 23.6 | 23.8 | | Net finance costs | 1.1 | 0.819 | | Loss attributable to owners of the Company | 19.5 | 26.9 | Consignor Advances As of March 31, 2025, total consignor advances amounted to approximately HK$76.5 million, with outstanding principal of approximately HK$59.0 million. These advances are primarily granted to art collectors and collateralized by consigned artworks. The Group conducts background assessments of consignors and recorded no impairment losses, as the fair value of collateralized artworks exceeded the carrying amount of advances Consignor Advances Overview | Indicator | March 31, 2025 (HK$ million) | March 31, 2024 (HK$ million) | | :--- | :--- | :--- | | Total Principal Amount | 76.5 | 70.9 | | Total Outstanding Principal | 59.0 | 63.0 | | Interest Rate Range | 0% to 12% | 0% to 12% | - Consignor advances were granted to 28 consignors, all of whom are corporate or individual art collectors, and are collateralized by consigned artworks[59][62] - The Group conducts background assessments of consignors, including personal information, artwork value, length of business relationship, and creditworthiness[65][67] - No impairment losses were recognized during the reporting period as the fair value of consigned artworks exceeded the carrying amount of consignor advances[68][73] Financial Position and Liquidity As of March 31, 2025, the Group's current assets were approximately HK$381.4 million, with cash and cash equivalents of approximately HK$76.5 million. Interest-bearing bank borrowings amounted to approximately HK$37.3 million, of which HK$14.5 million is repayable within one year. The Group is in a net cash position and has no significant capital commitments or contingent liabilities Current Assets and Liabilities Overview | Indicator | March 31, 2025 (HK$ million) | March 31, 2024 (HK$ million) | | :--- | :--- | :--- | | Current Assets | 381.4 | 368.1 | | Cash and Cash Equivalents | 76.5 | 48.7 | | Interest-bearing Bank Borrowings | 37.3 | 41.6 | | Borrowings repayable within one year | 14.5 | 14.6 | - The Group is in a net cash position and had no significant capital commitments or contingent liabilities at the end of the reporting period[71][72][75][76][77][81] Treasury Policy and Capital Structure The Group adopts a prudent treasury and funding policy, with funds primarily denominated in JPY and HKD, held in banks for short to medium-term deposits. The capital structure is mainly financed by working capital, borrowings, and net proceeds from the listing. The Group faces foreign exchange risk but currently has no hedging policy and will closely monitor exchange rate fluctuations. As of March 31, 2025, bank deposits of HK$4.0 million were pledged to secure bank facilities - The Group adopts a prudent treasury and funding policy, with funds primarily denominated in JPY and HKD, held in banks for short to medium-term deposits[79][83] - The Group's borrowings and cash are primarily denominated in HKD and JPY, exposing it to foreign exchange risk, but currently, there is no foreign currency hedging policy, and exchange rate fluctuations will be closely monitored[80][84] - As of March 31, 2025, bank deposits of HK$4.0 million were pledged to banks to secure general banking facilities granted to the Group[86][90] Employees and Share Option Scheme As of March 31, 2025, the Group had 33 full-time and 3 part-time employees, primarily located in Japan and Hong Kong. The Group regularly reviews its remuneration and benefits policies and provides Mandatory Provident Fund and share options to retain talent. 48,000,000 share options under the 2018 Share Option Scheme remained unexercised and were surrendered for cancellation on June 20, 2025. The 2023 Share Option Scheme was approved by shareholders to incentivize employees and promote the Group's sustainable development 2025 Fiscal Year Employee Headcount Distribution | Region | Number of Employees | | :--- | :--- | | Japan | 21 | | Hong Kong | 9 | | Taiwan | 2 | | China | 1 | - The Group regularly reviews its remuneration and benefits policies and provides additional benefits, Mandatory Provident Fund, and share options to retain loyal employees[87][91] - 48,000,000 share options under the 2018 Share Option Scheme remained unexercised between April 1, 2024, and March 31, 2025, and were surrendered for cancellation on June 20, 2025[95][96][97][99] - The 2023 Share Option Scheme was approved by shareholders to incentivize employees' contributions to the Group, attract and retain talent, and align the interests of grantees with those of the Company and its shareholders[99][101][103][111][115][116] Biographical Details of Directors and Senior Management Executive Directors This section details the biographies of the Group's executive directors, including the resignations of Mr. Ando Shokei, Ms. Ando Eri, Mr. Ge Wenhai, and Mr. Sun Hongyue, and the appointments of Mr. Wong Sze Kwan, Mr. Wong Sze Fung, Ms. Qian Yuanyuan, and Mr. Tong Jun. The newly appointed director, Mr. Wong Sze Kwan, also serves as Chairman of Shenzhen Jinyafu Holdings Group Co., Ltd., possessing extensive corporate management experience and a broad business network in China - Mr. Ando Shokei, Ms. Ando Eri, Mr. Ge Wenhai, and Mr. Sun Hongyue resigned as Executive Directors on June 20, 2025[123][125][127][128][129][130] - Mr. Wong Sze Kwan, Mr. Wong Sze Fung, Ms. Qian Yuanyuan, and Mr. Tong Jun were appointed as Executive Directors on May 30, 2025[132][137][139][142][144][145][147] - Mr. Wong Sze Kwan also serves as Chairman of Shenzhen Jinyafu Holdings Group Co., Ltd., which ranked 295th in the 2024 Fortune China 500, and he possesses extensive experience in the gold and jewelry industry chain and a broad network in China[132][134] Non-executive Directors Mr. Li Jiefeng and Mr. Zheng Haoran were appointed as Non-executive Directors on May 30, 2025. Mr. Li holds a senior engineer qualification in architectural decoration design and has investment holding experience, while Mr. Zheng has experience in banking and private equity fund management - Mr. Li Jiefeng and Mr. Zheng Haoran were appointed as Non-executive Directors on May 30, 2025[146][148][149][151] - Mr. Li Jiefeng holds a senior engineer qualification in architectural decoration design and is the owner of JKL Investment, s.r.o., primarily engaged in investment holding[146][148] - Mr. Zheng Haoran previously served as branch manager of China Merchants Bank Zhuhai Branch and is currently a founding partner of Qinwan (Shenzhen) Private Equity Fund Management Partnership (Limited Partnership)[149][151] Independent Non-executive Directors Mr. Zhong Guowu, Ms. Lin Shuling, and Mr. Qin Zhimin resigned as Independent Non-executive Directors on June 20, 2025. Professor He Jia, Professor Hu Zuo Hao, and Mr. Liang Tingyu were appointed as new Independent Non-executive Directors on May 30, 2025, bringing rich professional backgrounds in finance, academia, management, and accounting - Mr. Zhong Guowu, Ms. Lin Shuling, and Mr. Qin Zhimin resigned as Independent Non-executive Directors on June 20, 2025[150][152][154][157][159][160] - Professor He Jia, Professor Hu Zuo Hao, and Mr. Liang Tingyu were appointed as Independent Non-executive Directors on May 30, 2025[161][163][165][167][169][171] - The newly appointed Independent Non-executive Directors possess profound professional knowledge and extensive experience in finance, academic research, corporate management, and accounting and auditing[161][163][165][167][169][171] Senior Management Mr. Zhai Zhisheng serves as the company's Chief Financial Officer and Company Secretary, responsible for corporate finance, investor relations, financial management, and company secretarial matters. He has over 15 years of experience in auditing, accounting, corporate finance, and corporate governance - Mr. Zhai Zhisheng serves as the company's Chief Financial Officer and Company Secretary, responsible for corporate finance, investor relations, financial management, and company secretarial matters[172][174] - Mr. Zhai is a practicing accountant of the Hong Kong Institute of Certified Public Accountants and CPA Australia, with over 15 years of experience in auditing, accounting, corporate finance, and financial management[176][177] Corporate Governance Report Corporate Governance Practices The company is committed to maintaining a high level of corporate governance and has complied with all code provisions of the Corporate Governance Code set out in Appendix 14 of the Listing Rules. Securities transactions by directors and senior management comply with the Model Code - The company has complied with all code provisions of the Corporate Governance Code set out in Appendix 14 of the Listing Rules[179][183] - All directors have confirmed full compliance with the Model Code for Securities Transactions by Directors of Listed Issuers, and no non-compliance by senior management was noted[180][181][184] Board of Directors The Board of Directors is responsible for overseeing the Group's business, strategic decisions, and performance, and has delegated day-to-day responsibilities to executive directors and senior management. During the reporting period, there were significant changes in board membership, with Mr. Wong Sze Kwan appointed as Chairman. The Board continues to comply with the appointment requirements for independent non-executive directors and encourages directors to participate in continuous professional development - The Board is responsible for leadership and control of the company, collectively responsible for guiding and overseeing company affairs, and delegates day-to-day responsibilities to executive directors and senior management[182][185] - Significant changes occurred in the board membership, with Mr. Wong Sze Kwan appointed as Chairman of the Board effective June 20, 2025[187][188][191][192][194] - The Board continuously complies with the Listing Rules' requirements for appointing at least three independent non-executive directors, who must constitute at least one-third of the Board[196][201] - The company encourages directors to participate in continuous professional development to develop and update their knowledge and skills, and arranges internal briefings and provides reading materials[208][210][211][212] Board Committees The Board has established an Audit Committee, Remuneration Committee, Nomination Committee, and Corporate Governance Committee to oversee specific areas of the company's affairs. Each committee has clear written terms of reference and holds regular meetings. The Nomination Committee has adopted a director nomination policy and a board diversity policy to ensure the balance and continuity of the board - The Board has established an Audit Committee, Remuneration Committee, Nomination Committee, and Corporate Governance Committee, each with specific written terms of reference[213][214] - The Audit Committee is responsible for reviewing financial statements, risk management, and internal control systems; the Remuneration Committee is responsible for formulating remuneration policies for directors and senior management; the Nomination Committee is responsible for reviewing board structure, identifying director candidates, and assessing independence; the Corporate Governance Committee is responsible for formulating and reviewing corporate governance policies[221][222][227][229][234][237][266][268] - The Nomination Committee has adopted a director nomination policy and a board diversity policy, aiming to ensure a balance of skills, experience, and diverse perspectives on the Board, without setting measurable targets[235][238][239][241][242][243][247][252] Risk Management and Internal Control The Board is responsible for evaluating and determining the nature and extent of risks, and ensuring the establishment of an effective risk management system. The Group has reviewed its risk management system and considers it effective and adequate. The company does not have an internal audit department but appoints an independent internal control review consultant to review risk management and internal control systems, and has adopted improvement recommendations - The Board is responsible for evaluating and determining the nature and extent of risks it is willing to undertake in achieving the company's strategic objectives, and ensuring the establishment and maintenance of appropriate and effective risk management systems[274][278] - The Group has reviewed its risk management system, and the Board considers it effective and adequate, with no significant control issues[274][275][278] - The company does not have an internal audit department but appoints an independent internal control review consultant to review risk management and internal control systems, and has adopted improvement recommendations[288][291][294][298] Shareholders' Rights and Communication The company is committed to effective communication with shareholders and protecting their rights. Shareholders can request to convene a general meeting or propose resolutions in accordance with the Companies Ordinance, and can make inquiries to the Board via written correspondence or email. The company regularly publishes annual and interim reports and ensures that all resolutions at general meetings are voted on by poll - The company is committed to effective communication with shareholders and protecting their rights, with all resolutions at general meetings voted on by poll[304][307][318][320][321] - Shareholders can request to convene a general meeting (holding at least 5% of shares) or propose resolutions (holding at least 2.5% of shares or 50 shareholders) in accordance with the Companies Ordinance[305][308][309][312] - Shareholders can make inquiries to the Board via written correspondence or email, and the company website also provides an online inquiry form[310][313][314] - The company has adopted a dividend policy outlining principles and guidelines for dividend declaration and distribution[323][325] Environmental, Social and Governance Report About This Report This report outlines Tokyo Chuo Auction Holdings Limited's business practices, policies, and strategies in environmental, social, and governance (ESG) aspects, covering the period from April 1, 2024, to March 31, 2025. The report is prepared in accordance with the ESG Reporting Guide in Appendix C2 of the Hong Kong Stock Exchange Listing Rules, adhering to the principles of materiality, quantification, balance, and consistency - This report covers the period from April 1, 2024, to March 31, 2025, outlining the Group's business practices, policies, and strategies in ESG aspects[328][332] - The report is prepared in accordance with the ESG Reporting Guide in Appendix C2 of the Hong Kong Stock Exchange Listing Rules, adhering to the principles of materiality, quantification, balance, and consistency[329][333][334][335] - The report scope covers the Group's Japan headquarters and Hong Kong operations; the impact of China and Taiwan offices is minimal, thus their environmental matters are not detailed[336][339] Stakeholder Engagement The Group believes that identifying and addressing stakeholder feedback is fundamental to long-term development, having established a broad network of stakeholders including investors, employees, sellers and business partners, customers, government, and the community. The Group communicates with stakeholders through various formal and informal channels to respond to their needs, anticipate risks, and strengthen key relationships - The Group has a broad network of stakeholders, including investors, employees, sellers and business partners, customers, government, and the community[341][343][344] - The Group communicates with stakeholders through various channels such as general meetings, financial reports, the company website, business meetings, training courses, statutory filings, and community activities[345][346][347][348][349] Materiality Assessment The Group adopted a three-step process of identification, prioritization, and validation to determine 19 sustainable development topics with environmental and social impacts. Through scoring by senior management, the report identified service quality and customer satisfaction, customer privacy protection, workplace health and safety, greenhouse gas emissions, energy consumption, water consumption, and climate change strategy as highly material topics - The Group identified 19 sustainable development topics with environmental and social impacts and prioritized them through senior management scoring[351][353][354][355][356][357] - Highly material topics include service quality and customer satisfaction, customer privacy protection, workplace health and safety, greenhouse gas emissions, energy consumption, water consumption, and climate change strategy[359][360] Approach to Sustainability Development The Board of Directors bears overall responsibility for the Group's ESG strategy and reporting, including assessing ESG-related risks, overseeing management systems, and ensuring smooth strategy implementation. The Board has established an ESG working group to assist in formulating and implementing strategies, and regularly reviews ESG performance and targets to ensure the Group's ESG strategy is achieved - The Board bears overall responsibility for the Group's ESG strategy and reporting, including identifying and assessing ESG-related risks, and overseeing and ensuring the establishment of appropriate and effective ESG risk management and internal control systems[365][366] - The Board has established an ESG working group responsible for assisting in the formulation and implementation of ESG strategies, policies, and practices, and regularly reports progress to the Board[365][366] - The Board tracks, reviews, and follows up on the achievement of key ESG issues at least once a year, ensuring continuous policy implementation[367][370] Environmental Responsibility The Group is committed to environmental sustainability, implementing measures to reduce the environmental impact of its operations, particularly greenhouse gas emissions and resource consumption. During the reporting period, the Group complied with regulatory standards for exhaust gas emissions and waste disposal, and set targets for carbon emissions and water consumption to maintain them at 2022 levels by the end of 2027 - The Group is committed to environmental sustainability, seeking solutions to mitigate the environmental impact of its operations, particularly reducing greenhouse gas emissions and conserving resources[368][371] - During the reporting period, the Group had no incidents of non-compliance with all applicable laws and regulations concerning exhaust gas emissions and waste disposal in all operating regions[369][372] Emissions and Waste The Group's exhaust gas emissions primarily originate from vehicle use, with nitrogen oxides, sulfur oxides, and particulate matter emissions all decreasing by approximately 22-23% year-on-year in 2025. Total greenhouse gas emissions (Scope 1 and 2) were 69.25 tCO2e, with carbon intensity per employee of 1.92 tCO2e; total carbon intensity (Scope 1, 2, and 3) increased compared to 2024. The Group has set a target to maintain greenhouse gas emission intensity at 2022 levels by the end of 2027. Non-hazardous waste (waste paper) generated was 500 kg, with a density of 13.9 kg per employee, achieving the waste emission density target 2025 Fiscal Year Exhaust Gas Emissions | Exhaust Gas Emission | 2025 (kg) | 2024 (kg) | YoY Change (%) | | :--- | :--- | :--- | :--- | | Nitrogen Oxides (NOx) | 3.16 | 4.05 | -22 | | Sulfur Oxides (SOx) | 0.07 | 0.09 | -22 | | Particulate Matter (PM) | 0.23 | 0.30 | -23 | 2025 Fiscal Year Greenhouse Gas Emissions and Carbon Intensity | Indicator | 2025 | 2024 | YoY Change (%) | | :--- | :--- | :--- | :--- | | Scope 1 (Direct Emissions) (tCO2e) | 12.43 | 15.90 | -22 | | Scope 2 (Indirect Emissions) (tCO2e) | 56.82 | 49.33 | 15 | | Scope 3 (Other Indirect Emissions) (tCO2e) | 5.45 | 3.41 | 60 | | Total (Scope 1 and 2) (tCO2e) | 69.25 | 65.23 | 6 | | Total (Scope 1, 2 and 3) (tCO2e) | 105.44 | 68.64 | 54 | | Carbon Intensity (Scope 1 and 2) (tCO2e/employee) | 1.92 | 1.71 | 12 | | Carbon Intensity (Scope 1, 2 and 3) (tCO2e/employee) | 2.08 | 1.63 | 28 | - The Group has set emission targets to maintain Scope 1, Scope 2, and Scope 3 emission density (per employee) at the same level as 2022 by the end of 2027, with the target currently in progress[381][385] 2025 Fiscal Year Non-hazardous Waste Generation | Indicator | 2025 | 2024 | | :--- | :--- | :--- | | Waste Paper Generated (kg) | 500 | 475 | | Non-hazardous Waste Density per Employee (kg/employee) | 13.9 | 12.5 | - The Group has achieved its waste target to maintain the emission density of hazardous and non-hazardous waste (per employee) at the same level as 2022 by the end of 2027[386][387] Use of Resources The Group's energy consumption primarily comes from office electricity (approximately 75%) and vehicle fuel (approximately 25%). In 2025, total energy consumption was 184,140 kWh, with energy intensity per employee of 5,115 kWh, a 9% year-on-year increase. The Group has achieved its energy consumption emission density target. Total water consumption was 59 cubic meters, with water intensity per employee of 1.64 cubic meters, a significant 52% year-on-year decrease, also achieving the water target. The Group does not produce physical products, and packaging material consumption is negligible 2025 Fiscal Year Energy Consumption and Intensity | Indicator | 2025 (kWh) | 2024 (kWh) | YoY Change (%) | | :--- | :--- | :--- | :--- | | Direct Energy Consumption (Gasoline) | 45,157 | 57,775 | -22 | | Indirect Energy Consumption (Purchased Electricity) | 138,983 | 121,208 | 15 | | Total (Direct and Indirect) | 184,140 | 178,983 | 3 | | Energy Intensity (kWh/employee) | 5,115 | 4,710 | 9 | - The Group has achieved its energy consumption target to maintain emission density (per employee) at the same level as 2022 by the end of 2027[396][399] 2025 Fiscal Year Water Consumption and Intensity | Indicator | 2025 | 2024 | YoY Change (%) | | :--- | :--- | :--- | :--- | | Total Water Consumption (cubic meters) | 59 | 123.0 | -52 | | Water Intensity (cubic meters/employee) | 1.64 | 3.24 | -49 | - The Group has achieved its water target to maintain emission density (per employee) at the same level as 2022 by the end of 2027[401][402] - Due to the nature of its business, the Group does not produce physical products, and packaging materials for auction items are negligible, thus no related data is disclosed[406][408] The Environment and Natural Resources The Group is committed to integrating sustainability principles into the management of its activities, such as reducing waste generated during events. The Group encourages employees to choose public transportation and provides eco-friendly office supplies to foster an environmentally conscious culture - The Group continuously seeks to integrate sustainability principles into activity management, aiming to reduce waste generated during events[409][411] - The Group encourages employees to choose public transportation for commuting and provides eco-friendly office supplies, as well as reusable cups and kitchenware, to foster an environmentally conscious culture[409][411] Climate Change The Group has begun incorporating climate change risks and opportunities into its operating strategy, conducting corporate risk assessments at least annually to evaluate potential risks from climate change. The Group's ESG policy emphasizes strengthening carbon emission disclosure, improving climate change risk management, and integrating climate change issues into future operating plans - The Group has begun incorporating climate change risks and opportunities into its operating strategy, conducting corporate risk assessments at least annually to evaluate potential risks arising from climate change impacts[410][412] - The Group's ESG policy emphasizes strengthening carbon emission disclosure, improving climate change risk management, and integrating climate change issues into future operating plans[414][415] Climate-Related Risks and Mitigation Strategies | Risk Type | Risk | Potential Financial Impact | Mitigation Strategy | | :--- | :--- | :--- | :--- | | Physical Risks | Changes in rainfall patterns, extreme weather events | Business interruption leading to revenue reduction | Establish severe weather policies and emergency plans; insurance coverage | | Transition Risks | Changes in environmental regulations, increased emission liabilities | Increased operating and compliance costs | Implement energy-saving measures to reduce emissions; continuously monitor regulatory environment | Social Responsibility The Group integrates social responsibility into all levels of its operations, committed to providing a fair and safe workplace with development opportunities, delivering quality products/services through ethical business practices and supply chain management, and actively participating in community activities. During the reporting period, the Group complied with relevant laws and regulations regarding employment, occupational health and safety, labor standards, data privacy, and anti-corruption - The Group embeds social responsibility into all levels of its operations, committed to providing a fair and safe workplace and development opportunities, and delivering quality products/services through ethical business practices and supply chain management[417][419] - During the reporting period, the Group had no incidents of non-compliance with all applicable laws and regulations concerning employment, occupational health and safety, labor standards, data privacy, advertising and labeling, and anti-corruption in all operating regions[422][424][432][435][456][457][480][482][491][493] Employment As of the end of the reporting period, the Group employed 36 staff, comprising 20 males and 16 females, primarily located in Japan and Hong Kong. The Group's employee handbook outlines policies on compensation, dismissal, promotion, working hours, recruitment, rest periods, equal opportunities, diversity, and other benefits, which are regularly reviewed and updated. The employee turnover rate continued to decrease to 17% in 2025 2025 Fiscal Year Employee Headcount Distribution | Indicator | 2025 (Number of Employees) | 2024 (Number of Employees) | | :--- | :--- | :--- | | Total Employees | 36 | 38 | | Male | 20 | 20 | | Female | 16 | 18 | | Full-time | 33 | 36 | | Part-time | 3 | 2 | | Executive | 6 | 5 | | Technical | 1 | 1 | | Management | 29 | 32 | | Under 30 | 5 | 5 | | 30-39 years old | 16 | 18 | | 40-49 years old | 8 | 7 | | 50 years old and above | 7 | 8 | | Japan | 26 | 25 | | Hong Kong | 8 | 11 | | China | 1 | 1 | | Taiwan | 1 | 1 | - The Group's employee handbook outlines policies on compensation, dismissal, promotion, working hours, recruitment, rest periods, equal opportunities, diversity, and other benefits, which are regularly reviewed and updated[422][424][425][427] 2025 Fiscal Year Employee Turnover Rate | Indicator | 2025 (%) | 2024 (%) | | :--- | :--- | :--- | | Total Turnover Rate | 17 | 47 | | Male | 20 | 40 | | Female | 13 | 56 | | Under 30 | 40 | 100 | | 30-39 years old | 19 | 39 | | Japan | 4 | 36 | | Hong Kong | 62 | 45 | - The Group is an equal opportunity employer, prohibiting discrimination based on age, gender, marital status, family status, race, disability, nationality, religion, political affiliation, and sexual orientation[431][434] Workplace Health and Safety The Group prioritizes employee safety, with the management team responsible for identifying hazards and risks and ensuring a work environment compliant with relevant laws and regulations. During the reporting period, there were no work-related fatalities or lost workdays due to occupational injuries. The Group ensures employee safety through measures such as establishing safety guidelines, providing safety orientations and training, and conducting regular inspections and drills - The Group's management team is responsible for identifying any actual and potential hazards and risks faced by each employee, and is committed to creating a safe and healthy working environment, ensuring compliance with relevant laws and regulations[432][435] - There have been no work-related fatalities in the past three years. Furthermore, no lost workdays due to occupational injuries were recorded during the reporting period[443][448] - The Group ensures employee and workplace safety through measures such as establishing safety guidelines, providing safety orientations, conducting regular inspections, performing rescue/fire prevention/evacuation drills, and providing safety training materials[438][439][440] Development and Training The Group regards employees as its most valuable asset, investing significant resources to attract and retain talent, and providing comprehensive on-the-job training programs focusing on auction operational know-how, customer service skills, and art authentication and valuation capabilities. During the reporting period, a total of 36 employees participated in training, with total training hours of 48, averaging 1.8 hours for male employees and 0.8 hours for female employees - The Group is committed to providing comprehensive on-the-job training programs, focusing on auction operational know-how, customer service skills, and art authentication and valuation capabilities, to enhance employee capabilities and skills[444][445][449] - Each newly appointed director receives a formal, comprehensive, and appropriate induction, and directors are encouraged to participate in continuous professional development[446][447][449] 2025 Fiscal Year Employee Training Data | Indicator | 2025 | 2024 | | :--- | :--- | :--- | | Total Employees Trained (%) | 100% | 100% | | Male Employees Trained (%) | 56% | 48% | | Female Employees Trained (%) | 44% | 52% | | Average Training Hours (hours/employee) | 1.33 | 1.12 | | Average Training Hours for Male Employees (hours) | 1.80 | 1.13 | | Average Training Hours for Female Employees (hours) | 0.75 | 1.11 | | Average Training Hours for Executive Staff (hours) | 3.00 | 2.00 | | Average Training Hours for Technical Staff (hours) | 6.00 | 1.00 | | Average Training Hours for Management Staff (hours) | 0.83 | 1.00 | Labor Standard The Group strictly prohibits all forms of child labor, forced labor, or modern slavery, and ensures compliance with relevant labor laws and regulations through employee handbooks and age verification procedures. During the reporting period, the Group had no incidents of non-compliance with anti-child labor and anti-forced labor practices in all operating regions - The Group strictly prohibits all forms of child labor, forced labor, or modern slavery[455][457] - The Group avoids employing child labor through employee handbooks and age verification procedures for all job applicants[455][457] - During the reporting period, the Group had no incidents involving non-compliance with all applicable laws and regulations concerning anti-child labor and anti-forced labor practices in all operating regions[456][457] Supply Chain Management The Group is committed to building mutually beneficial working relationships with business partners, with major suppliers located in China, Hong Kong, and Japan. The Group selects suppliers based on their business scale and reputation, and supports them in promoting resource efficiency and environmental protection. The Group implements strict evaluation procedures for art suppliers to ensure art quality and legal provenance. Additionally, the Group has incorporated pandemic risks into its risk management mechanism and utilizes online platforms to maintain business continuity - The Group's major suppliers are located in China, Hong Kong, and Japan, and suppliers are selected based on business scale and reputation, supporting them in promoting resource efficiency and environmental protection[462][463][464] 2025 Fiscal Year Supplier Geographical Distribution | Region | 2025 (%) | 2024 (%) | | :--- | :--- | :--- | | Japan | 55 | 55 | | Hong Kong | 25 | 30 | | China | 15 | 10 | | Other Regions | 5 | 5 | - The Group implements strict evaluation procedures for art suppliers, including screening, authentication, and valuation, and has established an internal art appraisal team and external consultants[465][466] - The Group has incorporated pandemic risks into its enterprise risk management mechanism and utilizes online auction platforms to maintain business continuity[467][468] Product Responsibility The Group provides quality products and services through responsible operating practices, ensuring the quality and safety of artworks. The Group implements strict internal control and risk management systems for art authentication and valuation, and confirms ownership and legal provenance. During the reporting period, the Group faced no significant product liability claims, nor did it recall any products due to safety or health reasons. The Group prioritizes data privacy protection and implements ethical marketing and product labeling guidelines - The Group implements specific internal control systems and risk management systems for art authentication and valuation, and confirms their ownership and legal provenance[470][471][473][474][478] - During the reporting period, the Group faced no significant product liability claims, recalled no products due to safety and health reasons, and received no major customer complaints regarding product quality[475][477] - The Group is committed to protecting personal data privacy, regularly updates its antivirus systems, and has established internal policies for handling personal data of employees, customers, and business partners[483][485] - The Group implements clear ethical marketing and product labeling guidelines, ensuring all auction catalog information is complete and accurate, and regularly evaluates policy effectiveness[484][486] Anti-corruption The Group is committed to maintaining the highest standards of openness, integrity, and accountability, requiring all employees to act with integrity. During the year, the Group conducted internal anti-corruption and anti-money laundering training and performed annual corruption risk assessments. The Group implements a whistleblowing policy, encouraging employees to report misconduct, and conducts regular screening and investigation of money laundering activities. During the reporting period, the Group strictly complied with all rules and regulations, with no lawsuits filed against the Group or its employees regarding bribery - The Group is committed to maintaining the highest standards of openness, integrity, and accountability, requiring employees at all levels to act with integrity, fairness, and honesty[487][490] - During the year, the Group conducted internal anti-corruption and anti-money laundering training and performed annual corruption risk assessments to continuously strengthen internal controls[487][490] - The Group implements a whistleblowing policy, encouraging employees to report any suspected misconduct, and conducts regular screening and monitoring of money laundering activities[488][489][490] - During the reporting period, the Group strictly complied with all rules and regulations, with no lawsuits filed against the Group or its employees regarding bribery[491][493] Community Investment Despite challenging market and economic conditions, the Group remains committed to socio-economic development, community well-being, and sustainability. During the reporting period, the Group donated approximately HK$296,500 to charitable organizations and activities, and organized volunteer activities such as beach clean-ups and storytelling for children - The Group is committed to socio-economic development, community well-being, and sustainability, and encourages employee participation in community projects[492][494] - During the reporting year, the Group donated a total of approximately HK$296,500 to charitable organizations and activities, and organized volunteer activities such as beach clean-ups and storytelling for children[492][494] Reports of the Directors Business Overview and Financial Performance The Group's principal activities are providing Chinese and Japanese art auction and related services in Hong Kong and Japan. Details of the year's results and business review are set out in the Management Discussion and Analysis. The Board does not recommend the payment of any dividend for the years ended March 31, 2025, and 2024 - The Group's principal activities are providing Chinese and Japanese art auction and related services in Hong Kong and Japan, including Chinese paintings and calligraphy, Chinese antiques, and Chinese and Japanese tea ceremony utensils[497][502] - The Board does not recommend the payment of any dividend for the years ended March 31, 2025, and 2024[499][506] Dividend Policy and Capital Structure The company has adopted a dividend policy, with payout decisions based on factors such as profit, cash flow, financial position, and capital requirements. During the reporting period, the company had no outstanding debentures and was not involved in any share or debenture repurchase arrangements. As of March 31, 2025, the company had no reserves available for distribution to shareholders - The company has adopted a dividend policy, and dividend decisions will be based on the company's profit, cash flow, financial position, capital requirements, and other conditions deemed relevant by the Board[509][514] - During the reporting period, the company had no outstanding debentures and was not involved in any arrangements for repurchasing shares or debentures[512][517][519][522] - As of March 31, 2025, the Directors believed the company had no reserves available for distribution to shareholders[520][524] Directors and Senior Management During the reporting period, several directors resigned or were appointed, including Mr. Ando Shokei and others resigning, and Mr. Wong Sze Kwan and others being appointed. Directors' service contracts have an initial term of one year and are automatically renewable. Directors' remuneration is determined based on comparable company remuneration, time contribution, responsibilities, and Group performance. At the end of the reporting period, no director had a service contract with the company that could not be terminated within one year - During the reporting period and up to the date of this report, several executive, non-executive, and independent non-executive directors resigned or were appointed[521][525][526][529] - Directors' service contracts have an initial term of one year, are automatically renewable, and are subject to retirement by rotation and re-election at annual general meetings in accordance with the company's articles of association[527][533][536][537] - Directors' remuneration is determined based on comparable company remuneration, directors' time commitment, duties and responsibilities, individual performance, and Group performance[528][530] - As of March 31, 2025, no director proposed for re-election at the forthcoming annual general meeting had a service contract with the company or any of its subsidiaries that could not be terminated by the Group within one year without compensation[527][530] Share Option Scheme The company adopted a share option scheme on September 13, 2018, to incentivize or reward selected participants who contribute to the Group. On April 24, 2023, 48,000,000 share options were granted to directors, senior management, and employees, with an exercise price of HK$0.80 per share, and were surrendered for cancellation on June 20, 2025. The 2023 Share Option Scheme was approved by shareholders to promote the Group's sustainable development - The company adopted a share option scheme on September 13, 2018, to incentivize or reward selected participants who contribute to the Group[553][554] - On April 24, 2023, 48,000,000 share options were granted to directors, senior management, and employees, with an exercise price of HK$0.80 per share, and an exercise period from April 24, 2024, to April 23, 2029[556][558] - These 48,000,000 share options were surrendered for cancellation on June 20, 2025[558][580] - The 2023 Share Option Scheme was approved by shareholders to incentivize employees' contributions to the Group, attract and retain talent, and align the interests of grantees with those of the Company and its shareholders[560][561][564][565] Major Customers and Suppliers The Group's customers primarily include art enthusiasts, artists, collectors, etc., while suppliers include art sellers, venue providers, event planning service providers, etc. As of March 31, 2025, the top five customers accounted for 25.0% of total sales, with the largest customer accounting for 6.37%; the top five suppliers accounted for 21.3% of total purchases, with the largest supplier accounting for 4.6%. No directors, their close associates, or shareholders holding 5% or more of the shares had interests in the top five customers or suppliers - The Group's customers primarily include art enthusiasts, artists, masters, experts, dealers, collectors, art galleries, and private museums[584][588] - Suppliers primarily include art sellers, venue providers for auction previews and auctions, event planning and accommodation booking service providers, catalog photography/printing/delivery service providers, and delivery/security/insurance service providers for auctioned artworks[589][590] 2025 Fiscal Year Major Customer and Supplier Proportions | Category | Percentage of Total Sales/Purchases | | :--- | :--- | | Top Five Customers | 25.0% | | Largest Customer | 6.37% | | Top Five Suppliers | 21.3% | | Largest Supplier | 4.6% | - To the best knowledge of the Directors, none of the Directors, their close associates, or shareholders holding 5% or more of the Company's issued shares had any interest in the Group's top five customers or top five suppliers[595][600] Events After the Reporting Period and Use of Proceeds After the reporting period, Mr. Ando Shokei entered into a sale and purchase agreement with ESSA Financial Group Ltd on April 25, 2025, to dispose of approximately 74.99% of the issued shares for a total consideration of approximately HK$165 million. The net proceeds from the global offering, approximately HK$110 million, were fully utilized by March 31, 2025, primarily for strengthening auction business, marketing activities, talent acquisition, and ERP system development - Mr. Ando Shokei entered into a sale and purchase agreement with ESSA Financial Group Ltd on April 25, 2025, to dispose of 374,967,278 shares, representing approximately 74.99% of the company's issued share capital, for a total consideration of approximately HK$164,985,602.32[605][608] - The net proceeds from the global offering, approximately HK$110 million, were fully utilized by March 31, 2025[609][611] Use of Net Proceeds from Global Offering (As of March 31, 2025) | Purpose | Amount Disclosed in Prospectus (HK$ million) | Reallocated Amount (HK$ million) | Amount Utilized as of March 31, 2025 (HK$ million) | | :--- | :--- | :--- | :--- | | Strengthening and expanding existing auction business | 62.7 | (22.8) | 39.9 | | Strengthening marketing and promotional activities | 22.0 | — | 22.0 | | Recruiting high-quality management talent and experts | 8.8 | — | 8.8 | | Developing Enterprise Resource Planning system | 5.5 | (4.5) | 1.0 | | Supplementing working capital and general corporate purposes | 11.0 | — | 11.0 | | Developing online trading and information platform art business | — | 27.3 | 11.5 | | Total | 110.0 | — | 94.2 | Independent Auditor's Report Opinion and Basis for Opinion Union Power CPA Limited has audited the consolidated financial statements of Tokyo Chuo Auction Holdings Limited for the year ended March 31, 2025, and believes that the statements present fairly, in all material respects, the Group's financial position, performance, and cash flows in accordance with Hong Kong Financial Reporting Standards, and have been properly prepared in compliance with the Hong Kong Companies Ordinance. The audit was conducted in accordance with Hong Kong Standards on Auditing, and the auditor maintained independence - The auditor believes that the consolidated financial statements present fairly, in all material respects, the consolidated financial position of the Group as at March 31, 2025, and its consolidated financial performance and consolidated cash flows for the year then ended in accordance with Hong Kong Financial Reporting Standards, and have been properly prepared in compliance with the Hong Kong Companies Ordinance[642][645] - The audit was conducted in accordance with Hong Kong Standards on Auditing issued by the Hong Kong Institute of Certified Public Accountants, and the auditor remained independent of the Group and fulfilled professional ethical responsibilities[643][646] Key Audit Matters Key audit matters for this period's audit include the assessment of net realizable value of inventories and impairment of consignor advances. These two matters were identified due to the inherent uncertainty involving management judgment and their significant impact on the consolidated financial statements. The auditor performed detailed audit procedures, including evaluating external experts' qualifications, sampling valuation reports, conducting physical counts, and assessing management's impairment evaluations - Key audit matters include the assessment of net realizable value of inventories and impairment of consignor advances, due to their materiality to the consolidated financial statements and the inherent uncertainty of management judgment[647][648][652](index=652