杜甫酒业集团(00986) - 2025 - 年度财报

Company Information During the reporting period, the company's board and committee members underwent several changes, including appointments and resignations of the Chairman, independent non-executive directors, and company secretary - During the reporting period, the company's board and committee members underwent several changes, including appointments and resignations of the Chairman, independent non-executive directors, and company secretary[8] Chairman's Statement and Management Discussion and Analysis The Group achieved a turnaround to profit this year, primarily due to the reversal of expected credit losses on loans and interest receivables, with the lending business showing continuous growth and becoming the main profit contributor, while the jewelry design and marketing business declined due to macroeconomic uncertainties, maintaining a robust financial position with enhanced liquidity and a low gearing ratio Financial Review For the year ended March 31, 2025, the Group's total revenue slightly increased by 1.86% to HKD 67.28 million, gross profit grew by 15.6% to HKD 34.53 million with gross margin improving to 51.32%, and the most significant change was achieving an annual profit of HKD 30.39 million, a turnaround from a loss of HKD 18.51 million in the prior year, primarily driven by a reversal of expected credit losses of approximately HKD 16.31 million compared to a provision of HKD 30.72 million in the previous year Key Financial Indicators for FY2025 | Indicator | 2025 Fiscal Year ('000 HKD) | 2024 Fiscal Year ('000 HKD) | Year-on-Year Change | | :--- | :--- | :--- | :--- | | Revenue | 67,280 | 66,050 | +1.86% | | - Jewelry Design and Marketing | 34,430 | 37,900 | -9.16% | | - Lending Business | 32,860 | 28,150 | +16.73% | | Gross Profit | 34,530 | 29,870 | +15.6% | | Gross Margin | 51.32% | 45.22% | +6.1 pp | | Annual Profit/(Loss) | 30,390 | (18,510) | Turnaround to Profit | | Expected Credit Loss Reversal/(Provision) | 16,310 | (30,720) | N/A | Business Review The Group primarily operates in jewelry design and marketing and lending businesses, with the jewelry segment experiencing revenue decline and a shift from profit to loss due to economic uncertainties in mainland China, while the lending business demonstrated strong performance with increased interest income, borrower numbers, and total loan principal, becoming the main driver of the Group's results, supported by strict compliance with moneylenders ordinances and a robust credit assessment and risk monitoring system Jewelry Design and Marketing Business This year, jewelry business revenue decreased to HKD 34.43 million, resulting in a pre-tax operating loss of HKD 1.13 million, compared to a profit of HKD 0.28 million in the prior year, primarily due to consumer conservatism on non-essential spending amid economic uncertainties in mainland China after the lifting of pandemic restrictions Jewelry Business Performance | Indicator | 2025 Fiscal Year ('000 HKD) | 2024 Fiscal Year ('000 HKD) | | :--- | :--- | :--- | | Revenue | 34,430 | 37,900 | | Operating Profit/(Loss) Before Tax | (1,130) | 280 | - Despite the lifting of COVID-19 restrictions in mainland China, economic, employment, and income uncertainties led consumers to be more conservative in spending on non-essential items like jewelry, impacting business performance[17] Lending Business The lending business, operated by wholly-owned subsidiary Wai Cheung Finance in Hong Kong, generated significant year-on-year growth in interest income to HKD 32.86 million, with total loan principal increasing to approximately HKD 343 million and borrower numbers rising to 142 by year-end, supported by stringent credit assessment, due diligence, and loan monitoring mechanisms, and benefiting from a reversal of expected credit losses on loans and interest receivables of approximately HKD 24.26 million due to reduced global economic risk factors, with no actual bad debts incurred this year Lending Business Operating Data (as of Fiscal Year-End) | Indicator | March 31, 2025 | March 31, 2024 | | :--- | :--- | :--- | | Interest Income (Annual) | HKD 32.86 million | HKD 28.15 million | | Number of Borrowers | 142 | 122 | | Total Loan Principal | HKD 342.88 million | HKD 311.14 million | | Average Annual Interest Rate | 10.70% | 10.58% | | Loan Tenor | 1 to 3 years | 1 to 4 years | | Expected Credit Loss Provision | HKD 46.54 million | HKD 63.10 million | - The Group has established a comprehensive policy and procedure manual covering loan approval, renewal, recovery, compliance monitoring, and anti-money laundering, conducting detailed credit assessments and due diligence on potential clients before granting loans[19][20] - This year's reversal of expected credit losses on loans and interest receivables amounted to approximately HKD 24.26 million, primarily due to reduced global economic risk factors, with the Group incurring no actual bad debts during the year[23] Liquidity and Financial Resources As of March 31, 2025, the Group's net current assets significantly increased to approximately HKD 269 million from HKD 115 million in the prior year, with total interest-bearing borrowings at approximately HKD 32.97 million, and the gearing ratio (net debt/total equity + net debt) slightly rising from 6.77% to 9.03%, remaining at a healthy level Liquidity and Financial Position (as of Fiscal Year-End) | Indicator | March 31, 2025 | March 31, 2024 | | :--- | :--- | :--- | | Net Current Assets | HKD 268.67 million | HKD 114.86 million | | Cash and Cash Equivalents | HKD 0.22 million | HKD 0.35 million | | Total Interest-Bearing Borrowings | HKD 32.97 million | HKD 26.26 million | | Gearing Ratio | 9.03% | 6.77% | Prospects and Other Matters Looking ahead, the Board will continue to review the existing business portfolio and seek suitable investment opportunities to broaden revenue streams and diversify the business, with no significant acquisition, disposal, or major investment plans during the reporting period, and no annual dividend recommended, while the Group's employee count significantly decreased to 7 from 25 in the prior year - The Directors will continue to review the existing business portfolio and seek suitable investment opportunities to broaden revenue streams and achieve business portfolio diversification[28] - The Board does not recommend the payment of a dividend for the year ended March 31, 2025[36] - As of March 31, 2025, the Group's employee count was 7, a significant reduction from 25 in the prior year[38] Corporate Governance Report The Company is committed to maintaining high levels of corporate transparency and accountability, having adopted the principles of the HKEX Corporate Governance Code and complied with its code provisions throughout the reporting period, with the report detailing the Board's structure and responsibilities, the composition and work of various committees (Executive, Remuneration, Audit, Nomination), risk management and internal control systems, and communication mechanisms with shareholders to protect their rights Board of Directors The Board is responsible for leading, controlling, and managing the Company, overseeing the Group's business, strategy, and performance, and is composed of executive, non-executive, and independent non-executive directors in compliance with Listing Rules, having reviewed corporate governance policies, director training, securities dealing code compliance, and board diversity policy during the reporting period, deeming them appropriate and effective - The Board believes that the Company has complied with the code provisions set out in the Corporate Governance Code for the year ended March 31, 2025[42] - The Board currently comprises 7 members, including 3 executive directors, 1 non-executive director, and 3 independent non-executive directors, complying with Listing Rules regarding the number and professional qualifications of independent non-executive directors[47] - During the reporting period, attendance at Board and committee meetings was generally high, and all directors confirmed compliance with continuous professional development requirements[53][54] Board Committees The Board has four committees: Executive, Remuneration, Audit, and Nomination, with the Executive Committee handling daily management, the Remuneration Committee reviewing compensation policies and director/senior management remuneration, the Audit Committee overseeing financial reporting, internal controls, and risk management, and the Nomination Committee reviewing board structure and nominating directors, all composed of directors with relevant expertise and fulfilling their duties during the reporting period - The Audit Committee, composed of three independent non-executive directors, is primarily responsible for reviewing financial statements, assessing internal control and risk management systems, and recommending the appointment of external auditors to the Board[65][66] - The Remuneration Committee, with a majority of independent non-executive directors, is responsible for recommending the Company's remuneration policy and the compensation of executive directors and senior management to the Board[63] - The Nomination Committee, with a majority of independent non-executive directors, is responsible for regularly reviewing the Board's structure, size, and composition, and recommending the appointment or re-appointment of directors to the Board[70] Risk Management and Internal Control The Board bears ultimate responsibility for the Group's risk management and internal control systems, which are designed to manage rather than eliminate risks, with a top-down and bottom-up risk management framework encompassing identification, assessment, internal control, mitigation, and monitoring, and an annual independent evaluation by external consultants, leading the Board to conclude the system was effective and sound as of the fiscal year-end - The Board confirms its responsibility to continuously review the effectiveness of the risk management and internal control systems, which are designed to manage rather than eliminate the risk of failing to achieve business objectives[74] - The Group engaged external consultants to conduct an annual independent assessment of the risk management and internal control systems, with the Board concluding that the system was effective and sound as of the fiscal year-end[81] Communication with Shareholders and Investors The Company prioritizes effective communication with shareholders, disclosing information promptly through its website, general meetings, announcements, and financial reports, and clearly outlining shareholders' rights and procedures for convening extraordinary general meetings, proposing resolutions, and nominating director candidates to safeguard their interests - The Company maintains a website (www.dufu.com.hk) as a communication platform with shareholders and investors, providing contact information for written inquiries[88] - The report details the specific procedures and requirements for shareholders to convene extraordinary general meetings, propose resolutions, and nominate directors, safeguarding shareholder rights[89][90] Environmental, Social and Governance Report This report outlines the Group's Environmental, Social, and Governance (ESG) strategies, initiatives, and performance, with a governance structure overseen by the Board and executed by the ESG working group, demonstrating commitment to reducing emissions and resource consumption with set targets, and addressing employee rights, health and safety, supply chain management, product responsibility, and anti-corruption through relevant policies to fulfill corporate social responsibility A. Environment The Group is committed to sustainable development and has set environmental targets, achieving year-on-year reductions in greenhouse gas emissions and total energy consumption intensity, meeting its goals, while waste gas emissions decreased, but non-hazardous waste intensity did not meet targets, and the Group has implemented an Environmental Protection Policy covering emissions management, resource use, environmental protection, and climate change response, continuously monitoring relevant performance Key Environmental Performance Indicators | Indicator | Unit | 2025 Fiscal Year | 2024 Fiscal Year | | :--- | :--- | :--- | :--- | | Total Greenhouse Gas Emissions | tonnes of CO2e | 10.83 | 13.58 | | Greenhouse Gas Emissions Intensity | tonnes of CO2e/HKD million revenue | 0.16 | 0.21 | | Total Non-Hazardous Waste | kg | 385.28 | 387.28 | | Non-Hazardous Waste Intensity | kg/HKD million revenue | 5.73 | 5.86 | | Total Energy Consumption | MWh | 30.95 | 38.78 | | Energy Consumption Intensity | MWh/HKD million revenue | 0.46 | 0.59 | - The Group has formulated a Climate Change Policy to assess and address physical risks like extreme weather and transition risks such as tightening climate-related regulations, integrating these considerations into business planning[123][124][125] B. Society In terms of social responsibility, the Group prioritizes employee equality, health, and safety, providing training and development opportunities, with a significant reduction in employee numbers by year-end, but an increase in the percentage of trained employees to 100%, strictly adhering to labor standards, prohibiting child and forced labor, assessing environmental and social risks of suppliers, focusing on product quality, customer privacy protection, and intellectual property, and establishing an anti-corruption policy and whistleblowing mechanism with relevant training for directors and employees Employee Profile (as of Fiscal Year-End) | Indicator | March 31, 2025 | March 31, 2024 | | :--- | :--- | :--- | | Total Employees | 7 | 25 | | Overall Employee Turnover Rate | 19% | 64% | | Percentage of Trained Employees | 100% | 28% | | Average Training Hours per Employee | 8.29 hours | 2.32 hours | - The Group has formulated Sales and Procurement Policy and Sustainable Supply Chain Policy to regularly assess suppliers' performance in environmental, social, corporate governance, and business ethics aspects[143] - The Group has established an anti-corruption system, including a Code of Conduct, Anti-Fraud Policy, and Whistleblowing Policy, providing approximately 3.5 hours of anti-corruption training to 5 directors and 1 employee[151][152][153] Directors' Report This report outlines the Company's statutory disclosures for the year ended March 31, 2025, covering principal activities, business review, a five-year financial summary, compliance, director and senior management information, major customers and suppliers, share capital structure, and public float, noting that the Group's top five customers accounted for 35.6% of total sales, and top five suppliers accounted for 100% of total purchases, with the Company complying with Listing Rules regarding public float Financial Summary The report provides a summary of results, assets, and liabilities for the past five fiscal years, showing the Group achieved an annual profit of HKD 30.39 million in FY2025, a significant improvement from losses in the preceding two years, and net assets increased from HKD 332 million in FY2024 to HKD 367 million Five-Year Financial Summary (Continuing Operations) | For the Year Ended March 31 ('000 HKD) | 2025 | 2024 | 2023 | 2022 | 2021 | | :--- | :--- | :--- | :--- | :--- | :--- | | Revenue | 67,283 | 66,052 | 68,472 | 108,907 | 105,651 | | Profit/(Loss) for the Year | 30,386 | (18,513) | (14,461) | 604 | 4,447 | | Net Assets | 367,133 | 332,004 | 366,564 | 374,153 | 309,437 | Major Customers and Suppliers During the reporting period, the Group's customer concentration was relatively moderate, with the top five customers accounting for 35.6% of total sales and the largest customer at 8.5%, while supplier concentration was extremely high, with the top five suppliers accounting for 100% of total purchases and the largest supplier at 78.5% - The top five customers accounted for approximately 35.6% of total sales, with the largest customer accounting for approximately 8.5%[187] - The top five suppliers accounted for approximately 100.00% of total purchases, with the largest supplier accounting for approximately 78.5%[189] Independent Auditor's Report Longview (Hong Kong) CPA Limited issued an unmodified opinion on the Group's consolidated financial statements for the year ended March 31, 2025, affirming they present a true and fair view of the Group's financial position, performance, and cash flows in accordance with Hong Kong Financial Reporting Standards and the Companies Ordinance, highlighting three key audit matters: inventory valuation, impairment assessment of trade receivables, and impairment assessment of loans and interest receivables Audit Opinion The auditor believes that the consolidated financial statements present a true and fair view of the Group's consolidated financial position as of March 31, 2025, and its consolidated financial performance and cash flows for the year then ended, and have been properly prepared in accordance with Hong Kong Financial Reporting Standards and the disclosure requirements of the Hong Kong Companies Ordinance - The auditor issued a standard unmodified opinion on the Group's consolidated financial statements[213] Key Audit Matters The auditor identified three matters as most significant to the current period's audit: inventory valuation due to its materiality and judgment involved in determining provisions, impairment assessment of trade receivables due to their significant balance and the substantial judgment required for Expected Credit Loss (ECL) determination, and impairment assessment of loans and interest receivables due to their materiality and the significant judgments and estimates required in the ECL model - Key audit matters include: - Inventory Valuation: Involves judgment and estimation of the net realizable value of inventory, with the auditor engaging a professional valuation firm for assistance[216] - Impairment Assessment of Trade Receivables: Requires significant judgment in determining Expected Credit Loss (ECL) provisions, with the auditor engaging a professional valuation firm for assistance[219] - Impairment Assessment of Loans and Interest Receivables: Due to the materiality of the balance and the significant judgments and estimates involved in the ECL model, the auditor also engaged a professional valuation firm for assistance[222] Audited Consolidated Financial Statements This section contains the Group's detailed financial statements for the year ended March 31, 2025, including the Consolidated Statement of Profit or Loss and Other Comprehensive Income, Consolidated Statement of Financial Position, Consolidated Statement of Changes in Equity, Consolidated Statement of Cash Flows, and detailed notes to these statements, comprehensively presenting the Group's operating results, financial position, and cash flows Consolidated Statement of Profit or Loss and Other Comprehensive Income This year, the Group recorded revenue of HKD 67.28 million, a slight year-on-year increase, and achieved a pre-tax profit of HKD 32.01 million, with a final annual profit of HKD 30.39 million, successfully turning around from a loss, primarily due to a reversal of expected credit losses compared to a large provision last year, resulting in basic earnings per share of 2.35 HK cents Consolidated Statement of Profit or Loss Summary | Indicator ('000 HKD) | 2025 Fiscal Year | 2024 Fiscal Year | | :--- | :--- | :--- | | Revenue | 67,283 | 66,052 | | Gross Profit | 34,527 | 29,874 | | Profit/(Loss) Before Tax | 32,010 | (18,587) | | Profit/(Loss) for the Year | 30,386 | (18,513) | | Total Comprehensive Income/(Expense) for the Year | 35,129 | (34,560) | | Basic Earnings/(Loss) Per Share (HK cents) | 2.35 | (1.43) | Consolidated Statement of Financial Position As of March 31, 2025, the Group's total assets were HKD 439 million, total liabilities were HKD 72.08 million, and net assets (total equity) increased to HKD 367 million from HKD 332 million in the prior year, with loans and interest receivables and inventories being the main components of the asset structure Consolidated Statement of Financial Position Summary | Indicator ('000 HKD) | March 31, 2025 | March 31, 2024 | | :--- | :--- | :--- | | Non-current Assets | 125,114 | 229,381 | | Current Assets | 314,098 | 158,037 | | Total Assets | 439,212 | 387,418 | | Current Liabilities | 54,372 | 43,181 | | Non-current Liabilities | 17,707 | 12,233 | | Total Liabilities | 72,079 | 55,414 | | Net Assets (Total Equity) | 367,133 | 332,004 | Consolidated Statement of Cash Flows This year, the Group experienced a net cash outflow of HKD 3.58 million from operating activities, a net cash inflow of HKD 0.12 million from investing activities, and a net cash inflow of HKD 3.32 million from financing activities, resulting in a net decrease of HKD 0.14 million in cash and cash equivalents, with an ending balance of HKD 0.22 million Consolidated Statement of Cash Flows Summary | Indicator ('000 HKD) | 2025 Fiscal Year | 2024 Fiscal Year | | :--- | :--- | :--- | | Net Cash Used in Operating Activities | (3,579) | (4,187) | | Net Cash Generated from Investing Activities | 123 | 2 | | Net Cash Generated from Financing Activities | 3,318 | 3,186 | | Net Decrease in Cash and Cash Equivalents | (138) | (999) | | Cash and Cash Equivalents at Beginning of Period | 354 | 1,353 | | Cash and Cash Equivalents at End of Period | 216 | 354 | Notes to the Consolidated Financial Statements The notes to the financial statements provide detailed explanations and supplementary information for each item, including significant accounting policies adopted, key accounting estimates and judgments, financial risk management, segment information, detailed composition of various assets and liabilities, and related party transactions, serving as the foundation for understanding the financial statements - Note 8 discloses that the Group's revenue primarily derived from jewelry sales (HKD 34.43 million) and lending interest income (HKD 32.86 million)[363] - Note 9's segment information indicates that the lending business was the primary source of profit this year, with segment results of HKD 47.50 million, while the jewelry business recorded a loss of HKD 1.13 million[365] - Note 35 on capital risk management shows that the Group's capital gearing ratio (net debt/capital and net debt) increased from 7.35% last year to 8.42%[424]