DJ HK Bourse: Results Announcement From Lee Kee Holdings Ltd.

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https://www1.hkexnews.hk/listedco/listconews/sehk/2020/0629/2020062902303.pdf ANNUAL RESULTS ANNOUNCEMENT FOR THE YEAR ENDED 31ST MARCH 2020
The Board of Directors (the " Board " ) of Lee Kee Holdings Limited (the "Company" )
hereby announces the consolidated results of the Company and its subsidiaries (collectively
"LEE KEE" or the "Group") for the year ended 31st March 2020 (the "Financial Year" or
the "Year") together with the comparative figures for the year ended 31st March 2019 (the
"Comparative Period") as follows:
CONSOLIDATED STATEMENT OF PROFIT OR LOSS For the year ended 31st March 2020 2019 HK$ '000 HK$ '000 Note
Revenue 1,864,166 4 2,276,977 (1,862,286)
Cost of sales (2,237,825)
Gross profit 1,880 39,152 4,228
Other income 6,040 (23,895)
Distribution and selling expenses (28,350) (82,902)
Administrative expenses (86,756) (18,302)
Other net losses (3,067)
Loss from operations (118,991) (72,981) 1,605
Finance income 1,467 (6,008)
Finance costs (10,181) (4,403) 5(a)
Net finance costs (8,714) 1 For the year ended 31st March 2020 2019 HK$ '000 HK$ '000 Note
Loss before taxation (123,394) 5 (81,695) (4,763) 6
Income tax (4,965) (128,157)
Loss for the year (86,660)
Attributable to: (128,057)
Equity shareholders of the Company (86,652) (100)
Non-controlling interests (8) (128,157)
Loss for the year (86,660)
Loss per share 8 (15.45)
Basic and diluted (Hong Kong cents) (10.46)
Note: The Group has initially applied HKFRS 16, at 1st April 2019. Under the transition method chosen, comparative information is not restated. See note 3. 2
CONSOLIDATED STATEMENT OF PROFIT OR LOSS AND OTHER
COMPREHENSIVE INCOME For the year ended 31st March 2020 2019 HK$ '000 HK$ '000
Loss for the year (128,157) (86,660)
Other comprehensive income for the year:
Items that will not be reclassified to profit or loss:
Revaluation of financial assets at fair value through (3,729) other comprehensive income, net of nil tax (4,965) -
Surplus on revaluation of land and buildings held for own use 17,456 -
Tax effect to surplus on revaluation of land and buildings (2,098)
Items that may be subsequently reclassified to profit or loss, net of nil tax:
Exchange differences on translation of financial statements (15,451) of subsidiaries outside Hong Kong (11,590) (19,180) (1,197)
Total comprehensive income for the year (147,337) (87,857)
Attributable to: (147,231) Equity shareholders of the Company (87,849) (106) Non-controlling interests (8)
Total comprehensive income for the year (147,337) (87,857) 3
CONSOLIDATED STATEMENT OF FINANCIAL POSITION As at 31st March 2020 2019 HK$ '000 HK$ '000 Note
Non-current assets Interests in leasehold land held for own use - under operating leases 17,976 64,600 Investment property 64,600 36,703 9 Other property, plant and equipment 35,744 Financial assets at fair value through other 4,651 comprehensive income 8,380 307 11 Prepayments 188 2,643 Deferred tax assets 2,600 108,904 129,488
Current assets 456,552 10 Inventories 596,869 181,656 11 Trade and other receivables 206,937

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DJ HK Bourse: Results Announcement From Lee Kee Holdings Ltd. -2-

826 Tax recoverable 6 2,473 Derivative financial instruments 2,041 - Cash held on behalf of customers 9,605 306,115 12 Cash and cash equivalents 356,734 947,622 1,172,192
Current liabilities 63,573 13 Trade and other payables and contract liabilities 83,894 107,654 14 Bank borrowings 183,284 1,112 Lease liabilities - 935 Tax payable 959 1,043 Derivative financial instruments 3,755 174,317 271,892
Net current assets 773,305 900,300
Total assets less current liabilities 882,209 1,029,788 4 As at 31st March 2020 2019 HK$ '000 HK$ '000 Note
Non-current liabilities 11,997 14
Bank borrowings 13,183 2,261
Employee retirement benefit obligations 2,028 573
Lease liabilities - 4,565
Deferred tax liabilities 4,397 19,396 19,608
NET ASSETS 862,813 1,010,180
CAPITAL AND RESERVES 82,875
Share capital 82,875 779,814
Reserves 927,075
Total equity attributable to equity shareholders of the Company 862,689 1,009,950 124
Non-controlling interests 230
TOTAL EQUITY 862,813 1,010,180 5
NOTES:
1 GENERAL INFORMATION The Company was incorporated in the Cayman Islands on 11 November 2005 as an exempted company with limited liability under the Companies Law (2004 Revision) of the Cayman Islands. The address of the Company's registered office is Ugland House, South Church Street, George Town, Grand Cayman, Cayman Islands. The principal activity of the Company is investment holding. The principal activities of the Company and its subsidiaries (together, the "Group") are trading of zinc, zinc alloy, nickel, nickel-related products, aluminium, aluminium alloy, stainless steel and other electroplating chemical products in Hong Kong and Mainland China. The Company's shares are listed on the Main Board of The Stock Exchange of Hong Kong Limited (the "Stock Exchange").
2 BASIS OF PREPARATION The financial results set out in this announcement do not constitute the Group's consolidated financial statements for the year ended 31st March 2020, but are derived from those financial statements. The financial statements have been prepared in accordance with the same accounting policies adopted in the 2018/19 annual financial statements, except for the changes in accounting policies set out in note 3. The consolidated financial statements of the Group have been prepared in accordance with all applicable Hong Kong Financial Reporting Standards ( "HKFRS"), which collective term includes all individual Hong Kong Financial Reporting Standards, Hong Kong Accounting Standards ("HKASs") and interpretations issued by the Hong Kong Institute of Certified Public Accountants ("HKICPA") and accounting principles generally accepted in Hong Kong. The financial statements also comply with the applicable disclosure requirements of the Rules Governing the Listing of Securities on The Stock Exchange ("Listing Rules") and the Hong Kong Companies Ordinance. The consolidated financial statements have been prepared under the historical cost basis, except for financial assets at fair value through other comprehensive income and derivative financial instruments which are carried at fair values. 6
3 CHANGES IN ACCOUNTING POLICIES The HKICPA has issued a new HKFRS, HKFRS 16, Leases , and a number of amendments to HKFRSs that are first effective for the current accounting period of the Group. Except for HKFRS 16, Leases , none of the developments have had a material effect on how the Group's results and financial position for the current or prior periods have been prepared or presented in the financial results. The Group has not applied any new standard or interpretation that is not yet effective for the current accounting period. The Group has initially applied HKFRS 16 as from 1st April 2019. The Group has elected to use the modified retrospective approach and has therefore recognised lease liabilities and corresponding right-of- use assets of HK$1,364,000 and HK$1,334,000 respectively in relation to leases previously classified as operating leases. Interests in leasehold land held for own use under operating leases of HK$17,976,000 were reclassified to right-of-use assets on 1st April 2019. The Group presents right-of-use assets that do not meet the definition of investment property in "other property, plant and equipment" and presents lease liabilities separately in the statement of financial position. Comparative information has not been restated and continues to be reported under HKAS 17.
4 REVENUE AND SEGMENT REPORTING The Group is principally engaged in the trading of zinc, zinc alloy, nickel, nickel-related products, aluminium, aluminium alloy, stainless steel and other electroplating chemical products. Revenue recognised during the year are as follows: 2020 2019 HK$ '000 HK$ '000 Revenue 1,864,166 Sales of goods 2,276,977 7
(a) Segment revenue and results The chief operating decision-maker assesses the performance of the operating segments based on a measure of operating results (before income tax) of each segment, which excludes the effects of other income, other net losses and net finance costs. 2020 2019 Segment Segment Revenue results Revenue results HK$ '000 HK$ '000 HK$ '000 HK$ '000 1,041,736 (127,061) Hong Kong 1,341,464 (92,376) 822,430 22,144 Mainland China 935,513 16,422 1,864,166 (104,917) 2,276,977 (75,954)

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DJ HK Bourse: Results Announcement From Lee Kee Holdings Ltd. -3-

An analysis of the Group's segment assets and segment liabilities by reporting segment is set out below: As at 31st March 2020 Hong Kong Mainland China Total HK$ '000 HK$ '000 HK$ '000 752,211 304,315 Segment assets 1,056,526 81,397 112,316 Segment liabilities 193,713 As at 31st March 2019 Hong Kong Mainland China Total HK$ '000 HK$ '000 HK$ '000 Segment assets 942,088 359,592 1,301,680 Segment liabilities 130,015 161,485 291,500
(b) Reconciliation of reportable segment results 2020 2019 HK$ '000 HK$ '000 (104,917) Total segment results (75,954) 4,228 Other income 6,040 (18,302) Other net losses (3,067) (4,403) Net finance costs (8,714) (123,394) Loss before taxation (81,695) 8
5 LOSS BEFORE TAXATION Loss before taxation is arrived at after (crediting)/charging: 2020 2019 HK$ '000 HK$ '000 (a) Net finance costs (1,605) Interest income (1,467) 95 Interest on lease liabilities - 5,605 Interest on short-term bank borrowings 9,853 308 Interest on mortgage loan 328 4,403 8,714 (b) Other items Auditor's remuneration 1,760 - audit services 1,780 410 - other services 210 Depreciation# 6,884 - owned property, plant and equipment 9,440 2,195 - right-of-use assets - - Amortisation of leasehold land# 568 Total minimum lease payments for leases previously - classified as operating leases under HKAS 17# 3,090 Lease payment not included in the measurement of 1,416 lease liabilities - 1,819,615 Cost of inventories recognised as expense 2,233,778 (5) (Gain)/loss on disposal of property, plant and equipment 766 Realised loss/(gain) on metal future trading contracts and 768 foreign exchange forward contracts (508) Unrealised (gain)/loss on metal future trading contracts and (2,050) foreign exchange forward contracts 1,165 Staff costs (including directors' remuneration) 62,557 61,585 42,671 Provision for write-down of inventories 4,047 2,651 Net foreign exchange loss 1,644 16,938 Impairment loss of property, plant and equipment - 167 Credit loss of trade receivables 277 The Group has initially applied HKFRS 16 using the modified retrospective approach and # adjusted the opening balances at 1st April 2019 to recognise right-of-use assets relating to leases which were previously classified as operating leases under HKAS 17. The depreciated carrying amount of the finance lease assets which were previously included in "other property, plant and equipment" is also identified as a right-of-use asset. After initial recognition of right-of-use assets at 1st April 2019, the Group as a lessee is required to recognise the depreciation of right-of-use assets, instead of the previous policy of recognising rental expenses incurred under operating leases on a straight-line basis over the lease term. Under this approach, the comparative information is not restated. See note 3. 9
6 INCOME TAX 2020 2019 HK$ '000 HK$ '000 Current tax 154 - Hong Kong Profits Tax 840 4,711 - Mainland China Corporate Income Tax 5,003 (227) Over-provision in prior years (127) 4,638 5,716 125 Deferred tax (751)

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DJ HK Bourse: Results Announcement From Lee Kee Holdings Ltd. -4-

4,763 4,965 The provision for Hong Kong Profits Tax is calculated by applying the estimated annual effective tax rate of 16.5% (2019: 16.5%). Taxation for Mainland China's subsidiaries is similarly calculated using the estimated annual effective rate of 25% (2019: 25%) for the year.
7 DIVIDENDS (a) Dividends payable to equity shareholders attributable to the year The directors do not recommend the payment of interim and final dividend for the year ended 31st March 2020 and 2019. (b) Dividend payable to equity shareholders of the Company attributable to the previous financial year, approved and paid during the year 2020 2019 HK$ '000 HK$ '000 Final dividend in respect of the previous financial year, approved and paid during the year ended 31st March 2020, - of $Nil (2019: $0.015) per ordinary share 12,432 10
8 LOSS PER SHARE (a) Basic loss per share The calculation of basic loss per share is based on the loss attributable to ordinary equity shareholders of the Company of HK$128,057,000 (2019: HK$86,652,000) and the weighted average number of 828,750,000 (2019: 828,750,000) ordinary shares in issue during the year. (b) Diluted loss per share Diluted loss per share for the year ended 31st March 2020 and 2019 are the same as basic loss per share as there were no potential dilutive ordinary shares outstanding during the years.
9 OTHER PROPERTY, PLANT AND EQUIPMENT 2020 2019 HK$ '000 HK$ '000 35,744 Net book value as at 31st March 2019/2018 86,316 19,310 Impact on initial application of HKFRS 16 - 55,054 Net book value as at 1st April 2019/2018 86,316 - Revaluation 17,456 - Transferred to investment property (64,600) (533) Exchange difference (606) 8,254 Additions 7,384 (55) Disposals (766) (16,938) Impairment loss - (9,079) Depreciation (9,440) 36,703 Net book value as at 31st March 35,744
10 INVENTORIES 2020 2019 HK$ '000 HK$ '000 520,362 Finished goods 617,971 (63,810) Less: Write-down of inventories (21,102) 456,552 596,869 The cost of inventories recognised as expense and included in " cost of sales " amounted to HK$1,819,615,000 (2019: HK$2,233,778,000) for the year. 11
11 TRADE AND OTHER RECEIVABLES 2020 2019 HK$ '000 HK$ '000 Non-current portion 307 Prepayments for purchase of property, plant and equipment 188 Current portion 128,151 Trade receivables, net of loss allowance 173,210 35,232 Prepayments to suppliers 5,194 1,525 Deposits 2,951 16,748 Other receivables 25,582 181,656 206,937 181,963 207,125 The Group grants credit terms to its customers ranging from cash on delivery to 90 days. At the end of the reporting period, the ageing analysis of trade receivables, based on the invoice date and net of loss allowance, is as follows: 2020 2019 HK$ '000 HK$ '000 113,089 Within 1 month 143,263 8,577 Over 1 but within 2 months 19,012 4,525 Over 2 but within 3 months 9,787 1,960 Over 3 months 1,148 128,151 173,210 12
12 CASH AND CASH EQUIVALENTS 2020 2019 HK$ '000 HK$ '000 70,542 Short-term bank deposits 45,115 235,573 Cash at bank and on hand 311,619 306,115 356,734
13 TRADE AND OTHER PAYABLES AND CONTRACT LIABILITIES 2020 2019 HK$ '000 HK$ '000 44,592

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