The Board of Directors of Herald Holdings Limited informed the shareholders of the company and potential investors that, based on the information currently available, the group is expected to record a net loss attributable to the Shareholders for the year ended 31 March 2018 as compared to the net profit attributable to the shareholders for the year ended 31 March 2017, which were mainly attributable to: the absence of the net gain on disposal of properties in Shenzhen attributable to the equity shareholders of approximately HKD 106.4 million; and the recognition of an allowance for doubtful debt of approximately HKD 21 million for a Toys Division customer who was adversely affected by the bankruptcy of a leading toy retailer in the United States and has gone into liquidation. The management has decided to recognize the allowance for doubtful debt for this customer as the recovery is in question.