Annual Report 2016
9
CHAIRMAN’S STATEMENT
The Automotive segment also put in a solid performance in FY2016, generating 22.0% more sales yoy
for the Group. The segment’s strong contribution was driven by the advent of automobile component
systems in cars and the strong rebound in China’s automotive market following the launch of new
stimulus policies by the China government in September 2015 to boost growth in the automotive
industry.
Growth from our Industrial segment was flat in FY2016, while the performance of our Dealer, Home
Appliance, Audio and Video, EMS and Lighting segments all declined due to weaker demand for these
products.
However, an unfortunate event had a profound impact on our bottomline performance in FY2016. The
Group recorded share of loss of associates of HK$38.3 million in FY2016 as compared with share of loss
of associates of HK$6.5 million in FY2015, mainly due to doubtful debts provision for debtors of memory
products.
The distributor agreements and cooperation between GW Electronics Company Limited (including its
subsidiaries located in mainland China, collectively “GW Electronics”) and Toshiba Electronics Asia, Ltd.
(“Toshiba Asia”) and Toshiba Electronics (China) Co., Ltd. respectively were terminated in September
2015.
Toshiba Asia filed a winding-up petition against GW Electronics and served GW Electronics the same in
March 2016 alleging an outstanding and payable amount of about US$15.3 million by GW Electronics.
As GW Electronics is a limited liability corporation, the Group’s maximum potential exposure to any
legal claim by Toshiba Asia against GW Electronics, including as a result of the winding-up petition, will
be limited to the Group’s equity interest in GW Electronics. This led to an impairment loss of HK$70.1
million.
As such, Willas-Array posted a net loss attributable to shareholders of HK$71.6 million in FY2016,
compared to attributable net profit of HK$32.0 million in FY2015. Excluding the impairment loss of
HK$70.1 million and the share of loss on associates of HK$38.3 million, the Group would have achieved
a net attributable profit of HK$36.8 million from its core business.
As the Company suffered a loss in FY2016 and in view of the Group’s working capital needs, the
Board has resolved not to recommend the payment of any dividend for the financial year ended March
31, 2016. On behalf of the Board and management, I would like to express my utmost regret that our
investment in GW Electronics did not turn out as expected. Nevertheless, we are resilient and resourceful
and we are ready to move on to focus all our efforts to growing our core business.
