香港交易及結算所有限公司及香港聯合交易所有限公司對本公告的內容概不負責，對其 準確性或完整性亦不發表任何聲明，並明確表示，概不會因本公告全部或任何部分內容 而產生或因倚賴該等內容而引致的任何損失承擔任何責任。 K. H. GROUP HOLDINGS LIMITED 劍虹集團控股有限公司 — 2 — （股份代號：1557） （ 於 開 曼 群 島 註 冊 成 立 的 有 限 公 司） 於二零二五年九月十一日舉行之 二零二五年股東週年大會投票表決結果 茲提述劍虹集團控股有限公司（「本公司」）日期為二零二五年七月二十五日之二零二五年 股東週年大會（「二零二五年股東週年大會」）通函（「二零二五年股東週年大會通函」）及通 告（「二零二五年股東週年大會通告」）。除非本公告另有界定，否則本公告所用詞彙與二 零二五年股東週年大會通函所定義者具有相同涵義。 董事會欣然宣佈，二零二五年股東週年大會已於二零二五年九月十一日（星期四）上午十 時正假座香港皇后大道中181號新紀元廣場21樓舉行，二零二五年股東週年大會通告所載 之所有獲提呈決議案（「決議案」）已獲本公司股東（「股東」）以投票表決方式正式通過。 本公司之香港股份過戶登記 ...

股份發行人及根據《上市規則》第十九B章上市的香港預託證券發行人的證券變動月報表 截至月份: 2025年8月31日 狀態: 新提交 致：香港交易及結算所有限公司 本月底法定/註冊股本總額： HKD 100,000,000 FF301 第 1 頁 共 10 頁 v 1.1.1 FF301 II. 已發行股份及/或庫存股份變動 公司名稱: 劍虹集團控股有限公司 呈交日期: 2025年9月1日 I. 法定/註冊股本變動 | 1. 股份分類 | 普通股 | 股份類別 | 不適用 | | | 於香港聯交所上市 (註1) | | 是 | | | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | | 證券代號 (如上市) | 01557 | 說明 | 普通股 | | | | | | | | | | 法定/註冊股份數目 | | | 面值 | | | 法定/註冊股本 | | | 上月底結存 | | | 10,000,000,000 | HKD | | 0.01 | HKD | | 100,000,000 | | 增加 / 減少 (-) | | | | | | ...

致：香港交易及結算所有限公司 公司名稱: 劍虹集團控股有限公司 呈交日期: 2025年8月1日 股份發行人及根據《上市規則》第十九B章上市的香港預託證券發行人的證券變動月報表 截至月份: 2025年7月31日 狀態: 新提交 I. 法定/註冊股本變動 | 1. 股份分類 | 普通股 | 股份類別 | 不適用 | | | 於香港聯交所上市 (註1) | | 是 | | | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | | 證券代號 (如上市) | 01557 | 說明 | 普通股 | | | | | | | | | | 法定/註冊股份數目 | | | 面值 | | | 法定/註冊股本 | | | 上月底結存 | | | 10,000,000,000 | HKD | | 0.01 | HKD | | 100,000,000 | | 增加 / 減少 (-) | | | | | | | HKD | | | | 本月底結存 | | | 10,000,000,000 | HKD | | 0.01 | HKD | | 100,000,000 | 本月 ...

[Corporate Information](index=2&type=section&id=Corporate%20Information) The report details core company information including board members, committee compositions, and key appointments, noting significant changes in board and committee members during the year - The report details core company information including board members, committee compositions, company secretary, auditors, principal bankers, and share registrars During the year, there were significant changes in the board and committee members, including resignations and new appointments of the Chairman, executive directors, and independent non-executive directors[9](index=9&type=chunk)[10](index=10&type=chunk)[11](index=11&type=chunk) [Chairman's Statement](index=6&type=section&id=Chairman's%20Statement) Amidst a challenging Hong Kong construction market, the company experienced a **26.0%** revenue decline and expanded losses, prompting a conservative strategy, potential divestment of its Hong Kong piling business, and a strategic pivot to mainland China through the acquisition of Changzhou Yonghong Group for diversification FY2024/25 Performance Overview | Metric | FY2025 (Current Year) (HKD) | FY2024 (Comparative Year) (HKD) | YoY Change | | :--- | :--- | :--- | :--- | | **Total Revenue** | Approx. 129,580,000 | 175,174,000 | -26.0% | | **Loss Attributable to Owners of the Company** | Approx. 57,592,000 | 51,560,000 | +11.7% | - Due to significant and ongoing losses and uncertain prospects in the Hong Kong piling business, the Board is actively evaluating the possibility of divesting this segment and exploring new opportunities in other areas to streamline operations and reduce risk exposure[18](index=18&type=chunk)[20](index=20&type=chunk) - The company's strategic focus has shifted to mainland China, completing the acquisition of a mainland construction company and, on March 21, 2025, acquiring Changzhou Yonghong Group, entering the NMP (N-Methyl-2-pyrrolidone) recycling sector with an annual capacity of **60,000 tonnes**, positioning itself in the chemical and environmental industries for anticipated new performance growth in the next fiscal year[21](index=21&type=chunk)[22](index=22&type=chunk)[26](index=26&type=chunk) [Management Discussion and Analysis](index=8&type=section&id=Management%20Discussion%20and%20Analysis) This section reviews the company's financial performance, liquidity, capital structure, and human resources, highlighting a significant revenue decline, expanded losses, and strategic shifts in operations and employee focus [Business and Financial Review](index=8&type=section&id=Business%20and%20Financial%20Review) Overall revenue declined by **26.0%** to **HKD 129.6 million** due to project terminations in Hong Kong, partially offset by mainland China growth; gross loss expanded by **40.9%** to **HKD 43.7 million** with a **33.8%** margin, and net loss widened to **HKD 57.6 million** due to reduced other income and increased construction costs FY2024/25 Key Financial Indicators | Financial Metric | FY2025 (HKD) | FY2024 (HKD) | YoY Change | | :--- | :--- | :--- | :--- | | **Revenue** | 129,580,000 | 175,174,000 | -26.0% | | **Gross Loss** | (43,738,000) | (31,039,000) | +40.9% | | **Gross Loss Margin** | 33.8% | 17.7% | +16.1 percentage points | | **Other Income** | 5,383,000 | 90,925,000 | -94.1% | | **Finance Costs** | 946,000 | 9,179,000 | -89.7% | | **Net Loss** | (57,592,000) | (51,560,000) | +11.7% | - The decline in revenue was primarily due to: 1) the termination of two large projects during the year, leading to reduced revenue recognition; and 2) the company adopting a more cautious and selective bidding strategy for Hong Kong construction projects However, revenue from the China segment significantly increased from approximately **HKD 3.3 million** to approximately **HKD 34.2 million**, partially offsetting the decline in Hong Kong operations[33](index=33&type=chunk) - Other income significantly decreased, mainly because the comparative year recognized **HKD 90 million** in project performance guarantee compensation from the former ultimate controlling company, New Grace Gain, whereas only **HKD 5 million** was recognized in the current year[35](index=35&type=chunk) [Liquidity, Financial Resources and Capital Structure](index=11&type=section&id=Liquidity%2C%20Financial%20Resources%20and%20Capital%20Structure) As of March 31, 2025, total debt increased to **HKD 54.1 million** while cash balances decreased to **HKD 48.5 million**, with the current ratio falling from **0.8** to **0.4**; proceeds from a **HKD 29.6 million** share placement were reallocated to prioritize bank loan repayment due to a winding-up petition, and foreign exchange exposure is limited to RMB balances Liquidity and Capital Structure Key Indicators (As of March 31) | Metric | FY2025 (HKD) | FY2024 (HKD) | | :--- | :--- | :--- | | **Total Debt** | Approx. 54,061,000 | 25,667,000 | | **Bank and Cash Balances** | 48,481,000 | 84,497,000 | | **Current Ratio** | 0.4 | 0.8 | - On November 30, 2023, the company entered into a placing agreement to place **80 million** new shares at **HKD 0.375** per share, raising net proceeds of approximately **HKD 29.6 million** for business development and working capital replenishment[65](index=65&type=chunk)[67](index=67&type=chunk) - Following a winding-up petition filed by The Bank of East Asia in June 2024, the Board decided to adjust the use of placing proceeds, prioritizing repayment of bank borrowings; as of March 31, 2025, **HKD 12.5 million** was used for bank loan repayment, **HKD 6.8 million** for general working capital, with **HKD 4.3 million** remaining unutilized[68](index=68&type=chunk)[71](index=71&type=chunk) - The **HKD 100 million** unsecured loan from former ultimate controlling company New Grace Gain had its carrying amount reduced to zero as of March 31, 2025, after offsetting **HKD 5 million** in losses through project performance guarantees and repaying the remaining balance during the year[57](index=57&type=chunk)[58](index=58&type=chunk) [Employees and Remuneration Policy](index=16&type=section&id=Employees%20and%20Remuneration%20Policy) As of March 31, 2025, the Group's total number of employees decreased from **81** to **63**, with a shift in employee focus from Hong Kong to mainland China; total staff costs for the year were approximately **HKD 32.9 million**, down from **HKD 39.6 million** last year, and the company regularly reviews its remuneration policy, offering salary increments and discretionary bonuses based on individual performance Employee Data Changes | Metric | FY2025 | FY2024 | | :--- | :--- | :--- | | **Total Employees** | 63 people | 81 people | | **Total Staff Costs (HKD)** | Approx. 32,928,000 | 39,575,000 | [Corporate Governance Report](index=17&type=section&id=Corporate%20Governance%20Report) This report details the company's corporate governance practices, including compliance with the Corporate Governance Code, board composition, committee functions, risk management, internal controls, and shareholders' rights [Corporate Governance Practices](index=17&type=section&id=Corporate%20Governance%20Practices) During the reporting period, the company largely complied with the Corporate Governance Code, with one deviation regarding the non-separation of Chairman and CEO roles, and a temporary non-compliance with Listing Rules on independent non-executive director numbers due to a resignation, which was resolved on April 17, 2025 - The company deviated from Code Provision C.2.1 of the Corporate Governance Code, which requires the roles of chairman and chief executive to be separate, as the company currently has no chief executive officer, with responsibilities undertaken by the Chairman and other Board members[83](index=83&type=chunk)[84](index=84&type=chunk) - Due to Mr Wang Bo's resignation on January 21, 2025, the company temporarily failed to meet Listing Rules requirements for the number of independent non-executive directors (at least three), audit committee members (at least three), and the majority of independent non-executive directors on the nomination committee This issue was resolved with the appointment of Ms Szeto Dan Ni on April 17, 2025[86](index=86&type=chunk)[87](index=87&type=chunk) [The Board](index=18&type=section&id=The%20Board) The Board, responsible for leading and overseeing the Group, currently comprises three executive and three independent non-executive directors with diverse professional backgrounds; the company has adopted a board diversity policy and held eight meetings during the reporting period with good attendance - The Board currently consists of **six** members, including three executive directors and three independent non-executive directors, with no association among members[95](index=95&type=chunk)[111](index=111&type=chunk) - The company has adopted a board diversity policy, disclosing the age distribution (31-50 years old) and professional experience (information technology, banking and finance, accounting and law, investment consulting, etc) of its directors[97](index=97&type=chunk)[102](index=102&type=chunk) [Board Committees](index=24&type=section&id=Board%20Committees) The company has established Audit, Nomination, and Remuneration Committees; the Audit Committee, comprising three independent non-executive directors, held two meetings to review financial information and oversee risk and internal control systems, while the Nomination and Remuneration Committees each held one meeting to review board structure, director independence, and remuneration schemes - The Audit Committee, composed of three independent non-executive directors with professional qualifications, held **two** meetings during the year to review annual and interim results, and to assess risk management, internal control, and corporate governance functions[128](index=128&type=chunk)[129](index=129&type=chunk)[130](index=130&type=chunk) - The Nomination Committee held **one** meeting during the year, reviewing board composition and the independence of independent non-executive directors, and adopting a board nomination policy that outlines selection criteria and procedures[137](index=137&type=chunk)[141](index=141&type=chunk) - The Remuneration Committee held **one** meeting during the year, independently reviewing and approving the remuneration packages and structures for all directors and senior management[146](index=146&type=chunk)[147](index=147&type=chunk) [Risk Management and Internal Controls](index=30&type=section&id=Risk%20Management%20and%20Internal%20Controls) While the company lacks an independent internal audit department, it fulfills internal audit functions through close supervision by executive directors and senior management, supplemented by external professional firms; the Board, via the Audit Committee, conducted an annual review of risk management and internal control systems, deeming them effective and adequate - The company does not have an independent internal audit department but has engaged an external professional firm to assist in performing internal audit functions, conducting annual internal control reviews and reporting to the Audit Committee[160](index=160&type=chunk)[161](index=161&type=chunk) - The Board, through the Audit Committee, conducted an annual review of the effectiveness of the risk management and internal control systems for the year ended March 31, 2025, concluding that the systems are effective and adequate, with no significant areas for improvement requiring the Audit Committee's attention[166](index=166&type=chunk)[169](index=169&type=chunk) [Shareholders' Rights](index=34&type=section&id=Shareholders'%20Rights) This report clarifies the specific procedures for shareholders to convene an Extraordinary General Meeting (EGM) and nominate director candidates - Shareholders holding not less than **one-tenth** of the company's paid-up capital with voting rights may issue a written request to the Board or company secretary to convene an Extraordinary General Meeting[185](index=185&type=chunk) - Shareholders wishing to nominate director candidates must submit a written notice of their intention and the candidate's willingness to stand for election to the company secretary at least **seven days** before the General Meeting[189](index=189&type=chunk) [Environmental, Social and Governance Report](index=38&type=section&id=Environmental%2C%20Social%20and%20Governance%20Report) This report outlines the Group's commitment to minimizing environmental impact, complying with regulations, and fulfilling social responsibilities, including employee welfare, health and safety, supply chain management, and anti-corruption policies [A. Environmental](index=41&type=section&id=A.%20Environmental) The Group is committed to minimizing the negative environmental impact of its business activities and complying with relevant environmental regulations; this year, total greenhouse gas emissions increased to **769.9 tonnes of CO2 equivalent**, yet met reduction targets, while fuel consumption significantly rose and electricity consumption slightly decreased, with the Group implementing "green" initiatives and assessing climate change risks Greenhouse Gas Emissions (tonnes of CO2 equivalent) | Scope | FY2025 | FY2024 | YoY Change | | :--- | :--- | :--- | :--- | | **Scope 1 – Direct Emissions** | 728.4 | 467.6 | +55.8% | | **Scope 2 – Indirect Emissions** | 15.6 | 51.7 | -69.8% | | **Scope 3 – Other Indirect Emissions** | 25.9 | 43.2 | -40.0% | | **Total** | 769.9 | 562.5 | +36.9% | Energy Consumption Intensity (kWh/sqm) | Energy Type | FY2025 | FY2024 | YoY Change | | :--- | :--- | :--- | :--- | | **Fuel** | 131.4 | 29.1 | +351.5% | | **Electricity** | 1.2 | 1.3 | -7.7% | - This year, the total amount of construction waste disposed of in landfills was approximately **25,205 tonnes**, a decrease from **31,961 tonnes** last year[225](index=225&type=chunk) [B. Social](index=50&type=section&id=B.%20Social) In terms of social responsibility, the Group complies with labor regulations, with total employees decreasing from **81** to **63** and a shift in focus to mainland China; the Group prioritizes health and safety, reporting zero recordable incidents this year, provides occupational safety training, and has established strict supply chain management and anti-corruption policies, with a significant shift in supplier geographical distribution to mainland China - As of March 31, 2025, the Group had **63** full-time employees (2024: 81), predominantly construction workers in mainland China, with a gender distribution of **83%** male and **17%** female[253](index=253&type=chunk)[254](index=254&type=chunk) - The Group demonstrated strong health and safety performance, recording **zero** reportable incidents and **zero** work-related fatalities for the year ended March 31, 2025, consistent with the previous year[260](index=260&type=chunk)[263](index=263&type=chunk) Supplier Distribution by Location | Location | FY2025 | FY2024 | | :--- | :--- | :--- | | **Hong Kong** | 28% | 99% | | **Mainland China** | 72% | 1% | | **Other Countries** | 0% | 0% | - The Group has established an anti-corruption policy and adopted a formal whistleblowing policy in 2017 As of the year ended March 31, 2025, the Group was not involved in any corruption-related legal cases[287](index=287&type=chunk)[288](index=288&type=chunk) [Profile of Directors and Senior Management](index=57&type=section&id=Profile%20of%20Directors%20and%20Senior%20Management) This chapter details the personal biographies of the company's executive directors, independent non-executive directors, senior management, and company secretary, including their age, educational background, professional qualifications, and extensive work experience in relevant industries such as optoelectronics, new materials, finance, accounting, and construction - The new Chairman, Mr Zhang Zhijia, **51** years old, possesses many years of project, investment, and management experience in the optoelectronics, display materials, and industrial manufacturing sectors[292](index=292&type=chunk)[294](index=294&type=chunk) - Executive Directors Dr Wang Lei and Mr Yang Xuefeng have extensive experience in R&D management and project investment in synthetic new materials, and in supply chain, trade finance, new energy, and new materials project investment and management, respectively[297](index=297&type=chunk)[302](index=302&type=chunk) - The independent non-executive director team brings diverse professional backgrounds, including Mr Feng Zhidong's experience in financial management and capital operations, Ms Liu Yixing's certified public accountant qualification, and Ms Szeto Dan Ni's expertise in auditing and M&A consulting[306](index=306&type=chunk)[310](index=310&type=chunk)[312](index=312&type=chunk) [Directors' Report](index=64&type=section&id=Directors'%20Report) The Directors' Report outlines the company's principal activities as investment holding, with subsidiaries primarily engaged in piling and construction services and chemical product sales; the company complied with relevant laws, did not purchase or redeem listed securities, and the Board does not recommend a final dividend for the year ended March 31, 2025, also disclosing high customer and supplier concentration - The Board does not recommend the payment of a final dividend for the year ended March 31, 2025 (2024: nil)[337](index=337&type=chunk) Major Customer and Supplier Concentration (FY2025) | Category | Percentage | | :--- | :--- | | **Revenue from Top Five Customers** | Approx. 95.3% of total revenue | | **Revenue from Largest Customer** | Approx. 42.9% of total revenue | | **Purchases from Top Five Suppliers** | Approx. 90.2% of total purchases | | **Purchases from Largest Supplier** | Approx. 28.1% of total purchases | - As of March 31, 2025, Blessing Well, a major shareholder, held **62.5%** of the company's shares, with its ultimate controlling party being Mr Chan Yung Sing[384](index=384&type=chunk) - No share options have been granted by the company since the adoption of the share option scheme in 2016[350](index=350&type=chunk) [Independent Auditor's Report](index=75&type=section&id=Independent%20Auditor's%20Report) The independent auditor, Evergreen (Hong Kong) CPA Limited, issued an unmodified opinion on the company's FY2024/25 consolidated financial statements, affirming their true and fair view, but highlighted a "material uncertainty related to going concern" due to the Group's annual loss, net current liabilities, and net liabilities, along with a subsidiary facing a winding-up petition, and identified three key audit matters: revenue recognition for construction contracts, expected credit loss provisions for trade receivables and contract assets, and purchase price allocation for subsidiary acquisitions - The auditor issued an unmodified opinion but drew attention to a "material uncertainty related to going concern"[406](index=406&type=chunk)[410](index=410&type=chunk) - The material uncertainty related to going concern primarily stems from: - A loss of approximately **HKD 57.6 million** for the year ended March 31, 2025 - Net current liabilities of approximately **HKD 191.6 million** and net liabilities of approximately **HKD 84.2 million** as of March 31, 2025 - A winding-up petition faced by a subsidiary of the Group[410](index=410&type=chunk) - Key audit matters include: 1. **Revenue recognition for construction contracts**: Involves significant management judgments regarding total contract costs, stage of completion, and variations in work 2. **Expected credit loss provision for trade receivables and contract assets**: Involves significant amounts and requires substantial management judgment and estimation in determining the provision 3. **Purchase price allocation for acquisition of a subsidiary**: Involves significant management judgment and estimation in determining the fair values of acquired assets and liabilities[417](index=417&type=chunk)[425](index=425&type=chunk)[430](index=430&type=chunk) [Consolidated Financial Statements](index=86&type=section&id=Consolidated%20Financial%20Statements) This section presents the Group's consolidated financial statements, including the statement of profit or loss and other comprehensive income, statement of financial position, and detailed notes, providing a comprehensive overview of its financial performance, position, and significant accounting policies, judgments, and legal proceedings [Consolidated Statement of Profit or Loss and Other Comprehensive Income](index=86&type=section&id=Consolidated%20Statement%20of%20Profit%20or%20Loss%20and%20Other%20Comprehensive%20Income) For the year ended March 31, 2025, the Group recorded revenue of **HKD 129.6 million**, a **26.0%** year-on-year decrease; a gross loss of **HKD 43.74 million** resulted from sales costs exceeding revenue, and despite a **HKD 40.95 million** bargain purchase gain, the annual loss expanded to **HKD 57.59 million** with a total comprehensive loss of **HKD 58.44 million** due to significantly reduced other income and contract asset write-offs Consolidated Statement of Profit or Loss Summary (For the year ended March 31) | Item (HKD Thousands) | FY2025 | FY2024 | | :--- | :--- | :--- | | **Revenue** | 129,580 | 175,174 | | **Gross Loss** | (43,738) | (31,039) | | **Bargain Purchase Gain** | 40,947 | – | | **Loss from Operations** | (56,101) | (42,381) | | **Loss Before Tax** | (57,047) | (51,560) | | **Loss for the Year** | (57,592) | (51,560) | | **Total Comprehensive Loss for the Year** | (58,440) | (56,490) | [Consolidated Statement of Financial Position](index=87&type=section&id=Consolidated%20Statement%20of%20Financial%20Position) As of March 31, 2025, the Group's total assets were **HKD 273.9 million** and total liabilities were **HKD 358.1 million**; non-current assets significantly increased to **HKD 157.5 million** due to acquisitions, but net current liabilities expanded from **HKD 38.3 million** to **HKD 191.6 million**, leading to net liabilities increasing from **HKD 25.8 million** to **HKD 84.2 million**, reflecting a deeper negative equity position Consolidated Statement of Financial Position Summary (As of March 31) | Item (HKD Thousands) | FY2025 | FY2024 | | :--- | :--- | :--- | | **Non-current Assets** | 157,468 | 12,667 | | **Current Assets** | 116,479 | 189,322 | | **Total Assets** | 273,947 | 201,989 | | **Current Liabilities** | 308,111 | 227,597 | | **Non-current Liabilities** | 50,040 | 156 | | **Total Liabilities** | 358,151 | 227,753 | | **Net Current Liabilities** | (191,632) | (38,275) | | **Net Liabilities / Deficit in Equity** | (84,204) | (25,764) | [Notes to the Consolidated Financial Statements](index=92&type=section&id=Notes%20to%20the%20Consolidated%20Financial%20Statements) The financial statement notes provide detailed explanations of accounting policies, key judgments, and estimates; Note 2 highlights a material uncertainty regarding "going concern" and outlines management's liquidity measures, Note 35 details the acquisition of Changzhou Yonghong Group and its bargain purchase gain, and Notes 40 and 41 disclose multiple winding-up petitions and their latest developments - **Material Uncertainty Related to Going Concern**: Note 2 indicates a material uncertainty regarding the Group's ability to continue as a going concern, given the annual loss, net current liabilities, and winding-up petitions faced by subsidiaries Management has implemented measures including seeking financial support from the ultimate controlling party, considering fundraising activities, expanding China operations, and implementing cost-saving plans[473](index=473&type=chunk)[475](index=475&type=chunk)[480](index=480&type=chunk) - **Acquisition of a Subsidiary**: Note 35(a) discloses that on March 21, 2025, the company completed the acquisition of Changzhou Yonghong Group for a total consideration of approximately **HKD 68.61 million** (including cash and shareholder loan transfer) This acquisition resulted in a bargain purchase gain of approximately **HKD 40.95 million** and significantly increased the Group's property, plant, and equipment and right-of-use assets[961](index=961&type=chunk)[966](index=966&type=chunk) - **Litigation**: Notes 40 and 41 disclose that the company and its subsidiary KHF received multiple winding-up petitions from banks and creditors during and after the reporting period, involving outstanding credit facilities, subcontracting fees, and legal costs Some petitions were dismissed by the court through settlement and payment, but new substitute petitioners have applied as of the report date, with related hearings adjourned[1008](index=1008&type=chunk)[1011](index=1011&type=chunk)[1017](index=1017&type=chunk) - **Segment Information**: Note 9 shows that the piling and building services segment generated **HKD 125.9 million** in revenue and recorded a loss of **HKD 94.31 million**; the chemical product sales segment generated **HKD 3.7 million** in revenue and recorded a profit of **HKD 0.173 million** Geographically, Hong Kong contributed **HKD 95.42 million** in revenue, and mainland China contributed **HKD 34.16 million**[770](index=770&type=chunk)[778](index=778&type=chunk) [Financial Summary](index=208&type=section&id=Financial%20Summary) The financial summary presents the Group's key performance and financial position over the past five fiscal years, indicating a continuous decline in revenue since FY2021, consecutive gross and net losses in the last three fiscal years with expanding deficits, and a significant reduction in total assets in recent years, with net assets turning negative and net liabilities continuously widening, reflecting severe financial challenges Five-Year Performance Summary (For the year ended March 31) | Item (HKD Thousands) | 2025 | 2024 | 2023 | 2022 | 2021 | | :--- | :--- | :--- | :--- | :--- | :--- | | **Revenue** | 129,580 | 175,174 | 245,349 | 751,767 | 933,797 | | **(Gross Loss)/Gross Profit** | (43,738) | (31,039) | (28,983) | 29,748 | 41,653 | | **(Loss)/Profit for the Year** | (57,592) | (51,560) | (74,115) | (18,346) | 1,071 | Five-Year Assets and Liabilities Summary (As of March 31) | Item (HKD Thousands) | 2025 | 2024 | 2023 | 2022 | 2021 | | :--- | :--- | :--- | :--- | :--- | :--- | | **Total Assets** | 273,947 | 201,989 | 440,035 | 658,020 | 682,892 | | **Total Liabilities** | (358,151) | (227,753) | (439,009) | (582,879) | (589,405) | | **Net (Liabilities)/Assets** | (84,204) | (25,764) | 1,026 | 75,141 | 93,487 |

Company Overview [Company Basic Information](index=1&type=section&id=General%20Information) Kim Hung Group Holdings Limited is a Cayman Islands-incorporated investment holding company listed on the Hong Kong Stock Exchange, primarily engaged in foundation and construction services and the sale of chemical products in China, with Mr Chan Yung Shing as the ultimate controlling party - The company was incorporated in the Cayman Islands on July 23, 2015, and listed on the Main Board of the Hong Kong Stock Exchange on March 18, 2016[6](index=6&type=chunk) - As an investment holding company, its principal businesses include foundation and construction services, and the sale of chemical products in China[6](index=6&type=chunk) - **Mr Chan Yung Shing** is the ultimate controlling party of the company[6](index=6&type=chunk) [Basis of Preparation and Going Concern](index=4&type=section&id=Basis%20of%20Preparation) The Group's financial statements are prepared under HKFRS, but a loss of HK$57,592,000, significant net current and total liabilities, and a winding-up petition indicate a material uncertainty regarding its ability to continue as a going concern - The Group incurred a loss of approximately **HK$57,592,000** for the year ended March 31, 2025[8](index=8&type=chunk) Key Financial Position for FY2025 | Metric | Amount (HK$ '000) | | :--- | :--- | | Net Current Liabilities | (191,632) | | Net Liabilities | (84,204) | - Material uncertainties exist that may cast significant doubt on the Group's ability to continue as a going concern, but management has implemented measures including financial support from the ultimate controlling party, fundraising considerations, business expansion in China, and cost-saving initiatives to ensure working capital for the next 12 months[8](index=8&type=chunk)[9](index=9&type=chunk)[11](index=11&type=chunk) [Adoption of Accounting Standards](index=5&type=section&id=Adoption%20of%20New%20and%20Revised%20Hong%20Kong%20Financial%20Reporting%20Standards%20Accounting%20Standards) The Group adopted several new and revised HKFRSs, which had no material impact on its financial position or performance, while the upcoming HKFRS 18 is expected to significantly alter financial statement presentation - The application of new and revised Hong Kong Financial Reporting Standards this year had **no material impact** on the Group's financial position and performance[12](index=12&type=chunk) - **HKFRS 18 "Presentation and Disclosure in Financial Statements"**, effective January 1, 2027, will replace HKAS 1 and introduce significant changes to the income statement structure, management-defined performance measures, and data aggregation categories[14](index=14&type=chunk)[15](index=15&type=chunk) Financial Performance [Consolidated Statement of Profit or Loss and Other Comprehensive Income](index=2&type=section&id=Consolidated%20Statement%20of%20Profit%20or%20Loss%20and%20Other%20Comprehensive%20Income) The Group's revenue declined significantly by 26.0% to HK$129,580 thousand, with an expanded gross loss and a sharp drop in other income, leading to an increased loss for the year of HK$57,592 thousand despite lower finance costs Summary of Consolidated Statement of Profit or Loss and Other Comprehensive Income | Metric | 2025 (HK$ '000) | 2024 (HK$ '000) | Change (%) | | :--- | :--- | :--- | :--- | | Revenue | 129,580 | 175,174 | -26.0% | | Gross Loss | (43,738) | (31,039) | +40.9% | | Other Income | 5,383 | 90,925 | -94.1% | | Gain on Bargain Purchase of a Subsidiary | 40,947 | – | N/A | | Administrative and Other Operating Expenses | (35,376) | (33,584) | +5.3% | | Loss from Operations | (56,101) | (42,381) | +32.4% | | Finance Costs | (946) | (9,179) | -89.7% | | Loss Before Tax | (57,047) | (51,560) | +10.6% | | Loss for the Year | (57,592) | (51,560) | +11.7% | | Basic Loss Per Share (HK cents) | (12.0) | (12.2) | -1.6% | [Consolidated Statement of Financial Position](index=3&type=section&id=Consolidated%20Statement%20of%20Financial%20Position) The Group's non-current assets surged due to growth in property, plant and equipment and right-of-use assets, but declining current assets and rising current liabilities widened net current liabilities and net liabilities, exacerbating the equity deficit Summary of Consolidated Statement of Financial Position | Metric | 2025 (HK$ '000) | 2024 (HK$ '000) | Change (%) | | :--- | :--- | :--- | :--- | | Non-current Assets | 157,468 | 12,667 | +1143.2% | | Current Assets | 116,479 | 189,322 | -38.5% | | Current Liabilities | 308,111 | 227,597 | +35.4% | | Net Current Liabilities | (191,632) | (38,275) | +400.7% | | Total Assets less Current Liabilities | (34,164) | (25,608) | +33.4% | | Non-current Liabilities | 50,040 | 156 | +31976.9% | | Net Liabilities | (84,204) | (25,764) | +226.8% | | Equity Deficit | (84,204) | (25,764) | +226.8% | [Segment Information](index=7&type=section&id=Segment%20Information) The Group operates two main segments, with foundation and construction services revenue declining and losses widening, while chemical product sales revenue grew and turned profitable, reflecting a significant shift in assets and liabilities toward the latter - The Group has identified "Foundation and Construction Services" and "Sale of Chemical Products" as its reportable operating segments[17](index=17&type=chunk) [Operating Segment Revenue and Results](index=8&type=section&id=Operating%20Segment%20Revenue%20and%20Results) The foundation and construction services segment's revenue fell while its losses widened, whereas the chemical product sales segment's revenue increased, turning a prior-year loss into a profit Segment Revenue and Results | Segment | 2025 Revenue (HK$ '000) | 2024 Revenue (HK$ '000) | Revenue Change (%) | 2025 Result (HK$ '000) | 2024 Result (HK$ '000) | Result Change (%) | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | Provision of foundation and construction services | 125,885 | 171,856 | -26.86% | (94,311) | (32,615) | +189.17% | | Sale of chemical products | 3,695 | 3,318 | +11.36% | 173 | (3,089) | N/A (Turned to profit) | | Total | 129,580 | 175,174 | -26.03% | (94,138) | (35,921) | +162.07% | [Segment Assets and Liabilities](index=9&type=section&id=Segment%20Assets%20and%20Liabilities) Assets in the foundation services segment decreased while liabilities grew, whereas the chemical products segment saw a substantial increase in both assets and liabilities, indicating significant business expansion Segment Assets and Liabilities | Segment | 2025 Assets (HK$ '000) | 2024 Assets (HK$ '000) | Asset Change (%) | 2025 Liabilities (HK$ '000) | 2024 Liabilities (HK$ '000) | Liability Change (%) | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | Provision of foundation and construction services | 47,323 | 122,208 | -61.28% | 207,059 | 192,897 | +7.34% | | Sale of chemical products | 178,169 | 6,680 | +2567.20% | 69,358 | 7,818 | +787.19% | | Others | 42,289 | 45,450 | -6.95% | – | 1,928 | -100.00% | | Total | 267,781 | 174,338 | +53.61% | 276,417 | 202,643 | +36.41% | [Geographical Information](index=10&type=section&id=Geographical%20Information) Revenue from Hong Kong declined sharply while non-current assets were eliminated, whereas revenue and non-current assets from China grew substantially, indicating a strategic shift in business focus Geographical Revenue and Non-current Assets | Region | 2025 Revenue (HK$ '000) | 2024 Revenue (HK$ '000) | Revenue Change (%) | 2025 Non-current Assets (HK$ '000) | 2024 Non-current Assets (HK$ '000) | Non-current Asset Change (%) | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | Hong Kong | 95,423 | 171,856 | -44.59% | – | 12,636 | -100.00% | | China | 34,157 | 3,318 | +929.60% | 157,468 | 31 | +507861.29% | | Total | 129,580 | 175,174 | -26.03% | 157,468 | 12,667 | +1143.20% | [Revenue from Major Customers](index=10&type=section&id=Revenue%20from%20Major%20Customers) Revenue from Customer 1 decreased significantly, Customer 2 was no longer a major client in 2025, and two new major customers, Customer 3 and Customer 4, emerged during the year Revenue from Major Customers (Foundation and Construction Services) | Customer | 2025 (HK$ '000) | 2024 (HK$ '000) | | :--- | :--- | :--- | | Customer 1 | 55,588 | 100,009 | | Customer 2 | N/A | 41,209 | | Customer 3 | 39,835 | N/A | | Customer 4 | 16,254 | N/A | [Revenue Analysis](index=10&type=section&id=Revenue) The Group's total revenue decreased by 26.0% to HK$129,580 thousand, driven by a sharp decline in foundation and construction services, while the value of unfulfilled performance obligations also fell substantially Revenue Analysis | Revenue Source | 2025 (HK$ '000) | 2024 (HK$ '000) | Change (%) | | :--- | :--- | :--- | :--- | | Provision of foundation and construction services | 125,885 | 171,856 | -26.75% | | Sale of chemical products | 3,695 | 3,318 | +11.36% | | Total | 129,580 | 175,174 | -26.03% | - The total amount of unsatisfied performance obligations expected to be recognized in the future has **significantly decreased** to approximately HK$18,199 thousand (2024: HK$305,204 thousand)[26](index=26&type=chunk) [Other Income](index=11&type=section&id=Other%20Income) The Group's other income plummeted from HK$90,925 thousand to HK$5,383 thousand, primarily due to a sharp reduction in compensation from the former ultimate holding company under a project performance guarantee Other Income | Item | 2025 (HK$ '000) | 2024 (HK$ '000) | Change (%) | | :--- | :--- | :--- | :--- | | Compensation from former ultimate holding company for write-off of contract assets | 5,000 | 90,000 | -94.44% | | Interest income | 2 | 361 | -99.45% | | Sundry income | 381 | 557 | -31.60% | | Total | 5,383 | 90,925 | -94.08% | - The remaining undrawn guaranteed amount under the project performance guarantee was **zero** as of March 31, 2025 (2024: HK$5,000 thousand)[27](index=27&type=chunk) [Finance Costs](index=12&type=section&id=Finance%20Costs) The Group's finance costs decreased substantially from HK$9,179 thousand to HK$946 thousand, mainly due to a significant reduction in interest expenses on bank borrowings and imputed interest on other borrowings Finance Costs | Item | 2025 (HK$ '000) | 2024 (HK$ '000) | Change (%) | | :--- | :--- | :--- | :--- | | Interest expense on bank borrowings | 906 | 6,154 | -85.28% | | Interest expense on lease liabilities | 77 | 233 | -66.95% | | Imputed interest expense on other borrowings | – | 6,211 | -100.00% | | Total (net of amount attributable to contract works) | 946 | 9,179 | -89.70% | [Income Tax Expense](index=12&type=section&id=Income%20Tax%20Expense) The Group incurred a PRC Enterprise Income Tax expense of HK$545 thousand in 2025, compared to none in 2024, and made no provision for Hong Kong Profits Tax due to the absence of assessable profits Income Tax Expense | Item | 2025 (HK$ '000) | 2024 (HK$ '000) | | :--- | :--- | :--- | | PRC Enterprise Income Tax - Provision for the year | 545 | – | - The Group had no assessable profits in Hong Kong, hence no provision for Hong Kong Profits Tax was made[29](index=29&type=chunk) [Items Deducted from Loss for the Year](index=13&type=section&id=Items%20Deducted%20from%20Loss%20for%20the%20Year) The loss for the year included higher auditor's remuneration, lower construction material and inventory costs, reduced depreciation, a smaller write-off of contract assets, and a significant new impairment loss on right-of-use assets Summary of Items Deducted from Loss for the Year | Item | 2025 (HK$ '000) | 2024 (HK$ '000) | | :--- | :--- | :--- | | Auditor's remuneration (Total) | 1,480 | 830 | | Cost of construction materials recognised as cost of services | 33,140 | 59,080 | | Cost of inventories recognised as cost of services | 3,515 | 3,153 | | Depreciation of property, plant and equipment | 1,123 | 2,101 | | Depreciation of right-of-use assets | 1,734 | 2,354 | | Write-off of contract assets | 18,008 | 65,932 | | Provision for expected credit losses | 2,627 | 768 | | Impairment of property, plant and equipment | 842 | 1,983 | | Impairment loss on right-of-use assets | 1,840 | – | | Short-term lease payments | 2,701 | 6,126 | [Loss Per Share](index=14&type=section&id=Loss%20Per%20Share) The Group's basic loss per share for the year ended March 31, 2025, was 12.0 HK cents, a slight improvement from 12.2 HK cents in 2024, with no diluted loss per share presented due to the absence of potential dilutive ordinary shares Loss Per Share | Metric | 2025 | 2024 | | :--- | :--- | :--- | | Loss for the purpose of basic loss per share (HK$ '000) | (57,592) | (51,560) | | Weighted average number of ordinary shares for basic loss per share ('000) | 480,000 | 424,044 | | Basic loss per share (HK cents) | (12.0) | (12.2) | - No diluted loss per share was presented as the Company had no potential dilutive ordinary shares for the years ended March 31, 2025 and 2024[34](index=34&type=chunk) Details of Financial Position [Trade Receivables](index=14&type=section&id=Trade%20Receivables) The Group's net trade receivables decreased slightly, with an increased provision for bad debts, a significant rise in receivables aged over 60 days, and a substantial shift towards RMB-denominated balances Trade Receivables | Item | 2025 (HK$ '000) | 2024 (HK$ '000) | Change (%) | | :--- | :--- | :--- | :--- | | Trade receivables (Gross) | 41,218 | 40,513 | +1.74% | | Less: Provision for bad debts under expected credit losses | (11,098) | (8,571) | +29.48% | | Net | 30,120 | 31,942 | -5.70% | Ageing Analysis of Trade Receivables (Net of Provision) | Ageing | 2025 (HK$ '000) | 2024 (HK$ '000) | Change (%) | | :--- | :--- | :--- | :--- | | 0 to 30 days | 18,188 | 30,466 | -40.30% | | 31 to 60 days | 5,181 | – | N/A | | Over 60 days | 6,751 | 1,476 | +357.38% | | Total | 30,120 | 31,942 | -5.70% | Currency of Trade Receivables | Currency | 2025 (HK$ '000) | 2024 (HK$ '000) | Change (%) | | :--- | :--- | :--- | :--- | | HKD | 13,788 | 30,639 | -54.94% | | RMB | 16,332 | 1,303 | +1153.49% | | Total | 30,120 | 31,942 | -5.70% | [Contract Assets and Liabilities](index=15&type=section&id=Contract%20Assets%2FContract%20Liabilities) The Group's contract assets decreased sharply due to project completions and write-offs, while contract liabilities also plummeted following a reduction in advance payments for construction services Contract Assets | Item | 2025 (HK$ '000) | 2024 (HK$ '000) | Change (%) | | :--- | :--- | :--- | :--- | | From performance of construction contracts | 23,798 | 68,831 | -65.30% | | Less: Provision for contract assets under expected credit losses | (3,185) | (3,152) | +1.05% | | Net | 20,613 | 65,679 | -68.64% | - The decrease in contract assets was mainly due to the completion and finalization of certain construction projects and the write-off of approximately **HK$18,008 thousand** (2024: HK$65,932 thousand) in contract assets during the year ended March 31, 2025[37](index=37&type=chunk) Contract Liabilities | Item | 2025 (HK$ '000) | 2024 (HK$ '000) | Change (%) | | :--- | :--- | :--- | :--- | | Advance settlement for performance obligations - construction contracts | 162 | 11,961 | -98.64% | - The decrease in contract liabilities was mainly due to the reduction in advance payments received from customers for the provision of construction services during the year ended March 31, 2025[42](index=42&type=chunk) [Trade Payables and Retention Money Payables](index=18&type=section&id=Trade%20Payables%20and%20Retention%20Money%20Payables) The Group's total trade and retention money payables increased, with a significant rise in trade payables aged over 90 days, while retention money payable after 12 months was reduced to zero Trade Payables and Retention Money Payables | Item | 2025 (HK$ '000) | 2024 (HK$ '000) | Change (%) | | :--- | :--- | :--- | :--- | | Trade payables | 148,795 | 120,340 | +23.65% | | Retention money payables | 35,065 | 29,381 | +19.35% | | Total | 183,860 | 149,721 | +22.80% | Ageing Analysis of Trade Payables | Ageing | 2025 (HK$ '000) | 2024 (HK$ '000) | Change (%) | | :--- | :--- | :--- | :--- | | 0 to 30 days | 42,930 | 32,298 | +33.08% | | 31 to 60 days | 4,253 | 11,487 | -62.98% | | 61 to 90 days | 1,506 | 1,829 | -17.66% | | Over 90 days | 100,106 | 74,726 | +33.96% | | Total | 148,795 | 120,340 | +23.65% | - As of March 31, 2025, the amount of retention money payables expected to be due after more than twelve months was approximately **zero** (2024: HK$2,659 thousand)[44](index=44&type=chunk) Liquidity and Capital Management [Indebtedness and Pledge of Assets](index=19&type=section&id=Indebtedness%20and%20Pledge%20of%20Assets) The Group's total debt increased to HK$54,061 thousand, with collateral for bank facilities shifting to property, plant and equipment and right-of-use assets, while an unsecured loan from the former ultimate holding company was fully settled Total Indebtedness | Metric | 2025 (HK$ '000) | 2024 (HK$ '000) | Change (%) | | :--- | :--- | :--- | :--- | | Total Indebtedness (including bank borrowings, lease liabilities, and other borrowings) | 54,061 | 25,667 | +110.63% | - As of March 31, 2025, bank facilities were secured by property, plant and equipment of approximately **HK$130,342 thousand** and right-of-use assets of approximately **HK$26,375 thousand**[66](index=66&type=chunk) - The unsecured loan from the former ultimate holding company was fully settled to **zero** as of March 31, 2025 (2024: HK$10,000 thousand)[69](index=69&type=chunk) [Liquidity, Financial Resources and Capital Structure](index=24&type=section&id=Liquidity%2C%20Financial%20Resources%20and%20Capital%20Structure) The Group's bank and cash balances decreased, the gearing ratio was not applicable due to an equity deficit, and the current ratio fell from 0.8 to 0.4, indicating increased liquidity pressure Liquidity Metrics | Metric | 2025 (HK$ '000) | 2024 (HK$ '000) | Change (%) | | :--- | :--- | :--- | :--- | | Bank and cash balances | 48,481 | 84,497 | -42.62% | | Current ratio | 0.4 | 0.8 | -50.00% | - The gearing ratio is not applicable as the Group recorded a deficit attributable to the owners of the Company as of March 31, 2025 and 2024[70](index=70&type=chunk) - The Group did not use any financial instruments for hedging purposes during the year ended March 31, 2025[71](index=71&type=chunk) [Use of Proceeds](index=24&type=section&id=Placing%20of%20New%20Shares%20under%20General%20Mandate) The Company raised net proceeds of approximately HK$29.6 million from a share placement and, due to a winding-up petition, reallocated funds to prioritize the repayment of bank borrowings - The Company completed a placement of 80,000,000 new ordinary shares on November 30, 2023, raising net proceeds of approximately **HK$29.6 million**[72](index=72&type=chunk) - Due to a winding-up petition, the Board reallocated the use of proceeds to prioritize the repayment of bank borrowings[73](index=73&type=chunk) Use of Net Proceeds (HK$ million) | Purpose | Available Balance at 1 Apr 2024 | Utilised before Re-allocation | Revised Allocation after Re-allocation | Utilised at 31 Mar 2025 | Unutilised at 31 Mar 2025 | | :--- | :--- | :--- | :--- | :--- | :--- | | Business development opportunities | 9.6 | – | – | – | – | | General working capital | 14.8 | 0.8 | 11.1 | 6.8 | 4.3 | | Repayment of bank borrowings | – | – | 12.5 | 12.5 | – | | Total | 24.4 | 0.8 | 23.6 | 19.3 | 4.3 | [Foreign Exchange Risk](index=25&type=section&id=Foreign%20Exchange%20Risk) The Group faces minimal foreign exchange risk as most transactions are denominated in Hong Kong dollars, and while no hedging policy is in place, it closely monitors currency fluctuations - The Group's exposure to foreign exchange risk is minimal as most of its business transactions, assets, and liabilities are denominated in Hong Kong dollars[75](index=75&type=chunk) - If the HKD appreciates by 5% against the RMB, the consolidated loss after tax for 2025 would decrease by approximately **HK$1,297 thousand**; if it depreciates by 5%, the loss would increase by the same amount[76](index=76&type=chunk) [Material Investments, Acquisitions or Disposals](index=26&type=section&id=Material%20Investments%2C%20Material%20Acquisitions%20or%20Disposals) During the year, the Group acquired a subsidiary for approximately HK$68,614 thousand, added right-of-use assets of HK$2,008 thousand, and disposed of property, plant and equipment for HK$8,666 thousand - Acquisition of a subsidiary for approximately **HK$68,614 thousand**[77](index=77&type=chunk) - Addition of right-of-use assets of approximately **HK$2,008 thousand**[77](index=77&type=chunk) - Disposal of property, plant and equipment for approximately **HK$8,666 thousand**[77](index=77&type=chunk) [Dividend](index=26&type=section&id=Dividend) The Board of Directors does not recommend the payment of any dividend for the year ended March 31, 2025 - The Board does not recommend the payment of any dividend to shareholders for the year ended March 31, 2025 (2024: Nil)[79](index=79&type=chunk) Business Review and Prospects [Business Review](index=21&type=section&id=Foundation%20and%20Construction%20Services) The Group's foundation and construction services had four ongoing projects, but revenue declined due to project terminations and a cautious bidding approach in Hong Kong, partially offset by strong growth in the China segment - As of March 31, 2025, the Group had **4 ongoing foundation and construction projects**[57](index=57&type=chunk) - Overall revenue decreased by **26.0% to HK$129,580 thousand**, mainly due to the termination of two major projects and a cautious bidding approach amid challenges in the Hong Kong construction industry[58](index=58&type=chunk)[59](index=59&type=chunk) - Revenue from the China segment **increased significantly from HK$3,318 thousand to HK$34,157 thousand**, partially offsetting the decline in the Hong Kong segment[59](index=59&type=chunk) [Financial Review](index=21&type=section&id=Financial%20Review) The Group's revenue fell 26.0%, gross loss widened by 40.9% with a higher gross loss margin, and other income plunged 94.1%, ultimately increasing the net loss to HK$57,592 thousand despite significantly lower finance costs Key Financial Review Metrics | Metric | 2025 (HK$ '000) | 2024 (HK$ '000) | Change (%) | | :--- | :--- | :--- | :--- | | Revenue | 129,580 | 175,174 | -26.0% | | Gross Loss | (43,738) | (31,039) | +40.9% | | Gross Loss Margin | 33.8% | 17.7% | +16.1pp | | Other Income | 5,383 | 90,925 | -94.1% | | Provision for expected credit losses | 2,627 | 768 | +242.1% | | Write-off of contract assets | 18,008 | 65,932 | -72.7% | | Finance Costs | 946 | 9,179 | -89.7% | | Net Loss | 57,592 | 51,560 | +11.7% | - The increase in gross loss margin was mainly due to higher construction costs incurred during the completion stage of certain projects in the year ended March 31, 2025[58](index=58&type=chunk) [Future Prospects](index=27&type=section&id=Future%20Prospects) Facing a challenging Hong Kong construction market, the Board is exploring the disposal of its Hong Kong foundation business while actively reallocating resources to mainland China through acquisitions to diversify into the chemical and environmental sectors - The Group's Hong Kong foundation business recorded a significant loss due to the complex operating environment in the local construction industry[81](index=81&type=chunk)[82](index=82&type=chunk) - The Board is actively evaluating the potential **disposal of its Hong Kong foundation business** and exploring new business opportunities in other areas[82](index=82&type=chunk) - The Group has completed the acquisition of a construction company in mainland China and acquired **100% of Changzhou Yonghong Group** to expand into the chemical and environmental sectors for business diversification[82](index=82&type=chunk) - The long-term strategy is to reallocate resources to the mainland China market, focusing on rigorous project evaluation, selective market participation, and maintaining operational flexibility[83](index=83&type=chunk) Corporate Governance and Risk [Corporate Governance](index=28&type=section&id=Corporate%20Governance) The Company maintained a high level of corporate governance, complying with all code provisions except for the combined role of Chairman and CEO, and a temporary non-compliance with board composition rules which was later rectified - The Company has complied with all code provisions of the Corporate Governance Code as set out in Appendix 14 to the Listing Rules, except for the deviation where the roles of Chairman and Chief Executive Officer are not separated[84](index=84&type=chunk) - Following the resignation of Mr Wong Po, the Company temporarily failed to comply with Listing Rules regarding the number of independent non-executive directors and the composition of the Audit and Nomination Committees[85](index=85&type=chunk) - Compliance with the relevant Listing Rules was restored upon the appointment of **Ms Szeto Tan Nei** as an independent non-executive director on April 17, 2025[85](index=85&type=chunk) [Risk Management and Internal Control](index=29&type=section&id=Risk%20Management%20and%20Internal%20Control) Despite lacking a dedicated internal audit department, the Company ensures effective risk management and internal control through management oversight and the engagement of external professionals, with the Board confirming the system's adequacy - The Company does not have an independent internal audit department but fulfills the function through close monitoring by executive directors and senior management, and by engaging an external professional firm[86](index=86&type=chunk) - The Board, through the Audit Committee, conducted an annual review of the effectiveness of the risk management and internal control procedures for the year ended March 31, 2025[88](index=88&type=chunk) - The Board is satisfied that the internal control procedures applicable to the Group, including financial, operational, and compliance controls, are effective and adequate[88](index=88&type=chunk) [Litigation and Events After the Reporting Period](index=19&type=section&id=Litigation) The Company and its subsidiaries faced several winding-up petitions, most of which have been dismissed after settlement, though one revised petition from Icore International Limited involving approximately HK$2.7 million remains outstanding - The winding-up petitions filed by **The Bank of East Asia, Limited** against the Company and Kim Hung Foundation were dismissed in September 2024 after the loan was repaid[49](index=49&type=chunk)[50](index=50&type=chunk) - The petition by **China Geo-Engineering Corporation** against Kim Hung Foundation was dismissed in December 2024 after unsettled subcontracting fees were cleared[50](index=50&type=chunk)[51](index=51&type=chunk)[52](index=52&type=chunk) - The second petition by **Ince & Co** against Kim Hung Foundation was dismissed in May 2025 after legal fees were settled[52](index=52&type=chunk) - **Icore International Limited** filed a second amended petition in May 2025 concerning an outstanding amount of approximately **HK$2.7 million**, with the hearing adjourned to July 16, 2025[53](index=53&type=chunk) [Employees and Remuneration Policy](index=26&type=section&id=Employees%20and%20Remuneration%20Policy) The Group's employee count decreased to 63, with most staff based in China, and total staff costs amounted to approximately HK$32,928 thousand under a performance-based remuneration policy Employees and Remuneration | Metric | 2025 | 2024 | | :--- | :--- | :--- | | Number of employees | 63 | 81 | | Total staff costs (HK$ '000) | 32,928 | 39,575 | - The majority of the Group's employees are construction workers in China[80](index=80&type=chunk) - Remuneration policies and packages are reviewed periodically, with salary increments and discretionary bonuses awarded based on individual performance evaluations[80](index=80&type=chunk) [Excerpt from the Independent Auditor's Report](index=31&type=section&id=Excerpt%20from%20the%20Independent%20Auditor's%20Report%20Prepared%20by%20the%20Company's%20Auditor) The independent auditor highlighted a material uncertainty related to going concern, citing the Group's annual loss, net current and total liabilities, and winding-up petitions, without modifying their conclusion on the matter - The auditor draws attention to a **material uncertainty related to going concern**, citing the Group's loss of approximately HK$57,592 thousand, net current liabilities of HK$191,632 thousand, net liabilities of HK$84,204 thousand, and the winding-up petitions[94](index=94&type=chunk) - The auditor's conclusion is **not modified** in respect of the going concern uncertainty[94](index=94&type=chunk) [Other Corporate Information](index=32&type=section&id=Publication%20of%20Annual%20Results%20Announcement%20and%20Annual%20Report) The annual results announcement has been published on the websites of the Stock Exchange and the Company, with the annual report to be dispatched to shareholders and published in due course - The annual results announcement is available on the Stock Exchange's website (www.hkexnews.hk) and the Company's website (www.kh-holdings.com)[96](index=96&type=chunk) - The annual report for the year ended March 31, 2025, will be dispatched to shareholders and published on the aforementioned websites in due course in accordance with the Listing Rules[96](index=96&type=chunk)

劍虹集團控股有限公司（「本公司」）董事（「董事」）會（「董事會」）公佈本公司及其附屬公司 （統稱為「本集團」）截至二零二五年三月三十一日止年度之綜合全年業績，連同截至二零 二四年三月三十一日止年度之比較數字如下： — 1 — 香港交易及結算所有限公司及香港聯合交易所有限公司對本公告的內容概不負責，對其 準確性或完整性亦不發表任何聲明，並明確表示，概不會因本公告全部或任何部分內容 而產生或因倚賴該等內容而引致的任何損失承擔任何責任。 K. H. GROUP HOLDINGS LIMITED 劍虹集團控股有限公司 （股份代號：1557） （ 於 開 曼 群 島 註 冊 成 立 的 有 限 公 司） 截至二零二五年三月三十一日止年度之 全年業績公告 綜合財務狀況表 附註 於二零二五年三月三十一日 1. 一般資料 | | 附註 | 二零二五年 | 二零二四年 | | --- | --- | --- | --- | | | | 千港元 | 千港元 | | 非流動資產 | | | | | 物業、機器及設備 | | 131,093 | 10,642 | | 使用權資產 | | 26,375 | 2,025 | | | | ...

Revenue and Financial Performance - The Group's overall revenue decreased by 0.6% from approximately HK$75,549,000 during the six months ended 30 September 2023 to approximately HK$75,068,000 during the Period[17]. - The decrease in overall revenue was mainly due to a reduction in work done after the completion of certain large projects during the Period[17]. - Revenue for the six months ended September 30, 2024, was HK$75,068,000, a decrease from HK$75,549,000 in the same period of 2023, representing a decline of 0.6%[108]. - The Group reported a loss of approximately HKD 44,825,000 for the six months ended 30 September 2024[134]. - Loss for the period increased to HK$44,825,000 from HK$23,524,000 in 2023, reflecting a rise of 90.0%[111]. - Basic loss per share for the period was 9.3 cents, compared to 5.9 cents in the previous year, representing a deterioration of 57.6%[111]. - The Group reported a total comprehensive loss of HK$ (183,762) thousand as of 30 September 2024, compared to HK$ (138,937) thousand as of 1 April 2024[119]. - The Group's overall gross loss decreased by 78.7% from approximately HK$51,192,000 to approximately HK$10,914,000, with the gross loss margin dropping from approximately 67.8% to about 14.5%[19]. Expenses and Costs - Administrative and other operating expenses increased by 16.3% from approximately HK$19,941,000 to approximately HK$23,190,000 during the Period[21]. - Finance costs decreased by 94.3% from approximately HK$7,189,000 to approximately HK$409,000, primarily due to the absence of imputed interest expenses and reduced interest on bank borrowings[26]. - An additional provision for expected credit loss of approximately HK$6,406,000 was recognized during the Period, attributed to the deteriorating operating environment in the construction industry[25]. - Employee benefits expense, including directors' remuneration, amounted to HK$20,874,000 for the six months ended 30 September 2024, up from HK$18,000,000 in 2023, marking an increase of approximately 16%[187]. - The Group's depreciation charge for property, plant, and equipment was HK$850,000 for the six months ended 30 September 2024, compared to HK$1,306,000 in 2023, indicating a decrease of about 35%[187]. Assets and Liabilities - The total debts of the Group as of 30 September 2024 amounted to approximately HK$17,993,000, down from HK$25,667,000 as of 31 March 2024[42]. - The Group's bank and cash balances were approximately HK$72,123,000 as of 30 September 2024, down from approximately HK$84,497,000 as of 31 March 2024[50]. - The current ratio of the Group was 0.6 as of 30 September 2024, compared to 0.8 as of 31 March 2024[50]. - Net current liabilities increased from HK$38,275,000 to HK$72,778,000, indicating a worsening of 90.0%[113]. - The company reported an impairment of property, plant, and equipment amounting to HK$3,050,000 for the period[108]. - The Group's net current liabilities amounted to approximately HKD 72,778,000 and net liabilities were approximately HKD 70,152,000[134]. Projects and Business Development - As of 30 September 2024, there were 4 active projects, with 2 completed and 2 ongoing[12]. - One new project was awarded during the twelve months ended 30 September 2024, resulting in a total of 3 projects in progress as of 30 September 2024[12]. - The Group commenced sales of chemical products to diversify income streams and business risks starting from the third quarter of 2023[12]. - The Group has secured decoration contracts worth over RMB 5 million in the People's Republic of China, indicating progress in market expansion[36]. - The Group plans to acquire a company with N-Methyl2-pyrrolidone recycling facilities to expand into the environmental protection sector[37]. Governance and Compliance - The Board does not recommend the payment of an interim dividend to shareholders for the period[69]. - The Company has adopted the Model Code for Securities Transactions by Directors and all Directors confirmed compliance throughout the period[80]. - The Company did not establish a standalone internal audit department during the period but implemented measures for internal control and risk management[72]. - There were no significant contingent liabilities or major litigations as of September 30, 2024[61]. Market Outlook - The Board remains cautiously optimistic about the prospects of the foundation industry in Hong Kong due to long-term housing development and land policy[38]. - The Directors believe that the Group will have sufficient working capital to finance its operations and meet financial obligations for at least the next 12 months from 30 September 2024[137]. - The Company has obtained a letter of financial support from Mr. Chen Rongsheng, the ultimate controlling party, to provide adequate financial resources[137].

Financial Performance - The Group's overall revenue decreased by 0.6% from approximately HK$75,549,000 during the Comparative Period to approximately HK$75,068,000 during the Period [19]. - The overall gross loss decreased by 78.7% from approximately HK$51,192,000 during the Comparative Period to approximately HK$10,914,000 during the Period, with a gross loss margin decreasing from approximately 67.8% to approximately 14.5% [20]. - The Group reported a net loss of approximately HK$44,388,000 during the Period, compared to a net loss of approximately HK$23,524,000 during the Comparative Period [32]. - The Group recorded a net loss of approximately HK$44,388,000 for the period, compared to a net loss of HK$23,524,000 in the comparative period [35]. - Revenue for the six months ended September 30, 2024, was HK$75,068,000, a decrease from HK$75,549,000 in the same period of 2023, representing a decline of 0.6% [110]. - Gross loss for the period was HK$10,914,000, significantly improved from a gross loss of HK$51,192,000 in 2023, indicating a reduction of 78.7% [110]. - Loss for the period increased to HK$44,825,000 compared to HK$23,524,000 in 2023, reflecting an increase of 90.1% [113]. - The company reported a total comprehensive loss of HK$44,388,000 for the period, compared to HK$23,524,000 in 2023, marking an increase of 88.5% [113]. - The company experienced a net cash used in financing activities of HK$3,059,000, compared to HK$53,229,000 in the previous year, indicating improved cash flow management [125]. - The group incurred a loss of approximately HK$44,825,000 for the six months ended September 30, 2024, highlighting ongoing financial challenges [136]. Revenue and Income Sources - The Group commenced sales of chemical products to diversify income streams and mitigate business risks starting from Q3 2023 [14]. - Other income significantly decreased from approximately HK$54,798,000 during the Comparative Period to approximately HK$160,000 during the Period, primarily due to the absence of recognized compensation from the former ultimate holding company [23]. - Interest income for the six months ended September 30, 2024, was HK$27,000, a significant decrease from HK$247,000 in the same period of 2023 [176]. - The company recognized other income of HK$160,000 for the six months ended September 30, 2024, compared to HK$54,798,000 in the previous year, which included a compensation of HK$52,700,000 from the former ultimate holding company [179]. Expenses and Liabilities - Administrative and other operating expenses increased by 16.3% from approximately HK$19,941,000 during the Comparative Period to approximately HK$23,190,000 during the Period [23]. - A provision for impairment of property, plant, and equipment of approximately HK$3,050,000 was recognized during the Period, whereas no such impairment was made during the Comparative Period [26]. - An additional provision for expected credit loss of approximately HK$6,406,000 was recognized during the Period due to the deteriorating operating environment in the construction industry [27]. - The total staff costs incurred by the Group during the Period were approximately HK$20,874,000, an increase from approximately HK$18,000,000 during the Comparative Period [67]. - The Group's net current liabilities increased to HK$72,778,000 from HK$38,275,000, indicating a worsening liquidity position [115]. Project and Business Development - For the six months ended September 30, 2024, K. H. Group Holdings Limited reported a total of 4 active projects, with 2 completed and 2 ongoing as of the reporting date [14]. - One new project was awarded during the twelve months ended September 30, 2024, resulting in a total of 3 projects in progress as of September 30, 2024 [14]. - The Group plans to expand into the environmental protection sector, driven by increased demand for environmental recycling and renewable energy [39]. - The Group intends to acquire a company with N-Methyl-2-pyrrolidone recycling facilities, as detailed in an announcement dated November 5, 2024 [39]. - The Group has secured decoration contracts worth over RMB 5 million in the People's Republic of China [38]. Financial Position and Liquidity - As of September 30, 2024, total debts amounted to approximately HK$17,993,000, a decrease from HK$25,667,000 as of March 31, 2024 [44]. - The Group plans to strengthen its liquidity position by reducing capital expenditures, managing debt levels, and actively recovering outstanding receivables amid challenges in the Hong Kong construction sector [34]. - As of September 30, 2024, the Group had bank and cash balances of approximately HK$72,123,000, down from approximately HK$84,497,000 as of March 31, 2024 [52]. - The current ratio of the Group as of September 30, 2024, was 0.6, compared to 0.8 as of March 31, 2024 [52]. - The Group's gearing ratio was not applicable as it recorded a deficit attributable to owners of the Company as of September 30, 2024 [52]. Governance and Compliance - The Audit Committee, consisting of three Independent Non-executive Directors, has reviewed the condensed consolidated interim financial statements for the Period [105]. - The Company expresses gratitude to its management, staff, shareholders, and business associates for their support during the period [106]. - The Company is committed to compliance with the Model Code for Securities Transactions by Directors throughout the reporting period [82]. - The interests of Directors in the Company and associated corporations have been disclosed in accordance with the Securities and Futures Ordinance [91]. - The Company has maintained a transparent governance structure as evidenced by the establishment of the Audit Committee [105]. Shareholder Information - The Board does not recommend the payment of an interim dividend to shareholders for the Period [71]. - As of September 30, 2024, Mr. Chen holds 300,000,000 shares, representing a 75% interest in the Company [90]. - Blessing Well, a beneficial owner, also holds 300,000,000 shares, equating to a 75% interest in the Company [99]. - Sendlink Limited, which is wholly owned by Mr. Chen, is deemed to have a 75% interest in the Company through its ownership of Blessing Well [101]. - The Company has adopted a share option scheme since February 19, 2016, but no share options have been granted under this scheme to date [84].

Financial Performance - The Group's overall revenue decreased by approximately 28.6% to approximately HK$175,174,000 for the year ended March 31, 2024, compared to HK$245,349,000 in 2023[11]. - The loss attributable to owners of the Company for the year ended March 31, 2024, amounted to approximately HK$56,490,000, down from HK$74,115,000 in 2023[11]. - The overall gross loss increased by 7.1% from approximately HK$28,983,000 in 2023 to approximately HK$31,039,000 in 2024, with the gross loss margin rising from 11.8% to 17.7%[25]. - The Group reported a net loss of approximately HK$51,560,000 for the year ended March 31, 2024, compared to a net loss of approximately HK$74,115,000 for the year ended March 31, 2023[45]. - Total debts decreased significantly to approximately HK$25,667,000 as of March 31, 2024, down from HK$211,686,000 in 2023[41]. - The Group's current ratio as of March 31, 2024, was 0.8, compared to 1.0 as of March 31, 2023[57]. - The Group's bank deposits and cash balances were approximately HK$84,497,000, down from approximately HK$98,074,000 as of March 31, 2023[57]. - The Group's retained earnings and distributable reserves are considered when determining dividend amounts[185]. Business Strategy and Operations - The construction sector in Hong Kong continues to face challenges, including rising interest rates and labor supply issues, impacting operational and financial stability[12]. - The Group shifted its focus from a proactive tender strategy to improving liquidity by reducing capital expenditures and strategically disposing of non-profitable assets[13]. - Proceeds from asset disposals and redemptions were utilized for working capital and repayment of bank borrowings, aiming to reduce maintenance costs and finance expenses[13]. - The Company is exploring new business potential in environmental recycling and renewable energy, aligning with China's 14th Five-Year Plan[18]. - The Company initiated chemical trade as a pilot project to expand into new markets and enhance research in new energy materials[18]. - The Group commenced sales of chemical products during the year ended March 31, 2024, to diversify income streams and mitigate business risks[28]. - The Group will continuously monitor global economic developments and adjust its business strategies accordingly[18]. Corporate Governance - The Group's corporate governance practices are aimed at creating long-term value for shareholders, with ongoing reviews to improve governance standards[71]. - The Board currently consists of six members, including three Executive Directors and three Independent Non-executive Directors, ensuring a balance of skills and experience[81]. - The roles of the Chairman of the Board and the Chief Executive are currently held by different individuals, in compliance with corporate governance standards[73]. - The Company has established a formal and transparent procedure for developing remuneration policy for Directors and senior management[135]. - The Company acknowledges the responsibility of all Directors for preparing the consolidated financial statements[147]. - The Company did not establish a standalone Internal Audit Department for the year ended March 31, 2024, but implemented adequate measures for internal audit functions through close supervision by Executive Directors and senior management[153]. Risk Management - The Group does not currently have any interest rate hedging policy and continuously monitors interest rate risks[52]. - The Group faces low foreign exchange risk as most transactions, assets, and liabilities are denominated in Hong Kong dollars, with no foreign currency hedging policies currently in place[62]. - The Group's risk management and internal control procedures aim to provide reasonable assurance that assets are safeguarded, transactions are authorized, and accounting records are reliable[154]. - The Board conducted an annual review of the effectiveness of risk management and internal control procedures through the Audit Committee, with no significant areas for improvement identified[156]. ESG Commitment - The Group's ESG Report for the year ended March 31, 2024, demonstrates its commitment to sustainable development by delivering environmental, social, and economic benefits to stakeholders[193]. - The ESG Report is prepared in accordance with the Environmental, Social and Governance Reporting Guide and covers the principal businesses of the Group[194]. - The Board plays a crucial role in overseeing ESG issues, dedicating substantial time to evaluate ESG-related risks and formulating relevant policies during the year ended March 31, 2024[198]. - Regular Board meetings are held to assess progress, targets, and goals related to ESG performance[199]. - The management and ESG Working Team are responsible for reviewing and supervising the ESG process and risk management throughout the year[200].

[Annual Results Announcement](index=1&type=section&id=Annual%20Results%20Announcement) [Consolidated Statement of Profit or Loss and Other Comprehensive Income](index=2&type=section&id=Consolidated%20Statement%20of%20Profit%20or%20Loss%20and%20Other%20Comprehensive%20Income) The Group's revenue decreased by 28.6% to HKD 175 million, but a HKD 90 million compensation significantly narrowed the annual loss to HKD 51.56 million Key Indicators of Consolidated Statement of Profit or Loss | Indicator | 2024 (HKD thousands) | 2023 (HKD thousands) | YoY Change | | :--- | :--- | :--- | :--- | | Revenue | 175,174 | 245,349 | -28.6% | | Gross Loss | (31,039) | (28,983) | +7.1% | | Other Income | 90,925 | 10,239 | +788.0% | | Loss from Operations | (42,381) | (63,794) | -33.6% | | Loss Before Tax | (51,560) | (74,115) | -30.4% | | Loss for the Year | (51,560) | (74,115) | -30.4% | | Total Comprehensive Loss for the Year | (56,490) | (74,115) | -23.8% | | Basic Loss Per Share (HK cents) | (12.2) | (18.5) | -34.1% | [Consolidated Statement of Financial Position](index=3&type=section&id=Consolidated%20Statement%20of%20Financial%20Position) As of March 31, 2024, the Group's total assets decreased to HKD 202 million, resulting in net current liabilities and a shift to net liabilities of HKD 25.76 million Key Indicators of Consolidated Statement of Financial Position | Indicator | March 31, 2024 (HKD thousands) | March 31, 2023 (HKD thousands) | YoY Change | | :--- | :--- | :--- | :--- | | Non-current Assets | 12,667 | 50,953 | -75.1% | | Current Assets | 189,322 | 389,082 | -51.3% | | **Total Assets** | **201,989** | **440,035** | **-54.1%** | | Current Liabilities | 227,597 | 373,598 | -39.1% | | Non-current Liabilities | 156 | 65,411 | -99.8% | | **Total Liabilities** | **227,753** | **439,009** | **-48.1%** | | Net Current (Liabilities)/Assets | (38,275) | 15,484 | N/A | | **Net (Liabilities)/Assets** | **(25,764)** | **1,026** | **N/A** | [Summary of Notes to Financial Statements](index=4&type=section&id=Summary%20of%20Notes%20to%20Financial%20Statements) The notes reveal significant going concern uncertainties due to losses, net liabilities, and winding-up petitions, despite a HKD 90 million compensation - The Group faces significant going concern uncertainties, primarily due to an annual loss of approximately **HKD 51.56 million**, net current liabilities of approximately **HKD 38.28 million**, net liabilities of approximately **HKD 25.76 million**, and two winding-up petitions filed by a bank for outstanding credit facilities[7](index=7&type=chunk) - Other income significantly increased to **HKD 90.93 million**, primarily from a **HKD 90 million** compensation provided by the former ultimate holding company, New Grace Gain, for losses on certain foundation projects[32](index=32&type=chunk)[33](index=33&type=chunk) - Post-reporting period, The Bank of East Asia Limited filed a winding-up petition against the Company and its wholly-owned subsidiary, Kim Hung Foundation, involving an outstanding credit facility of approximately **HKD 11.6 million** plus accrued interest[56](index=56&type=chunk) [Basis of Preparation and Going Concern](index=4&type=section&id=2.%20Basis%20of%20Preparation) Despite being prepared on a going concern basis, the financial statements highlight significant uncertainties due to losses, net liabilities, and winding-up petitions - As of March 31, 2024, the Group incurred a loss of approximately **HKD 51.56 million**, with net current liabilities of approximately **HKD 38.28 million** and net liabilities of approximately **HKD 25.76 million**, alongside two winding-up petitions, indicating significant going concern uncertainties[7](index=7&type=chunk) - To address liquidity issues, the Company has obtained financial support letters from Mr. Chan Yung Sang, the ultimate controlling shareholder, the former ultimate holding company, and a subsidiary director, pledging financial resources or not demanding repayment of amounts due[10](index=10&type=chunk) [Segment Information](index=8&type=section&id=4.%20Segment%20Information) The Group's main segments are Foundation and Building Services, which incurred a HKD 32.62 million loss, and the smaller Chemical Product Sales, with most revenue from Hong Kong Segment Performance Summary (2024) | Segment | Revenue (HKD thousands) | Results (HKD thousands) | | :--- | :--- | :--- | | Provision of Foundation and Building Services | 171,856 | (32,615) | | Chemical Product Sales | 3,318 | (3,089) | | Others | — | (217) | | **Total** | **175,174** | **(35,921)** | - Geographically, the Hong Kong market contributed the vast majority of revenue, reaching **HKD 172 million**, accounting for **98.1%** of total revenue[28](index=28&type=chunk) [Contract Assets and Liabilities](index=16&type=section&id=13.%20Contract%20Assets%2FContract%20Liabilities) Contract assets significantly decreased to HKD 65.68 million due to project completion and compensated write-offs, while new contract liabilities of HKD 11.96 million arose - Contract assets significantly decreased from **HKD 249 million** to **HKD 65.68 million**, primarily due to the write-off of approximately **HKD 65.93 million** in contract assets, which was compensated by the former ultimate holding company[43](index=43&type=chunk)[44](index=44&type=chunk) - New contract liabilities of **HKD 11.96 million** arose during the year, primarily due to customer prepayments received for the provision of construction services[47](index=47&type=chunk)[48](index=48&type=chunk) [Events After Reporting Period](index=19&type=section&id=18.%20Events%20After%20Reporting%20Period) On June 21, 2024, The Bank of East Asia filed a winding-up petition against the Company and its subsidiary for approximately HKD 11.6 million in unpaid credit facilities, posing a severe threat - On June 21, 2024, The Bank of East Asia Limited filed a winding-up petition against the Company and its wholly-owned subsidiary, Kim Hung Foundation, involving outstanding credit facility principal of approximately **HKD 11.6 million** plus accrued interest[56](index=56&type=chunk) [Management Discussion and Analysis](index=20&type=section&id=Management%20Discussion%20and%20Analysis) Management reviewed a challenging year with a 28.6% revenue decrease, but net loss narrowed due to compensation; strategic focus shifted to cash flow improvement and diversification - Overall Group revenue decreased by **28.6%** to **HKD 175 million**, primarily due to reduced completed works following the completion of several large foundation and building projects[62](index=62&type=chunk) - To address uncertain economic conditions, the Group's strategic focus shifted from aggressive bidding to improving liquidity, including measures such as selling unprofitable machinery, redeeming life insurance policies, and reducing debt and administrative expenses[86](index=86&type=chunk) - The Group has initiated chemical product trading as a pilot and is actively researching and deploying the feasibility of development in new energy materials, environmental recycling, and other fields to explore new revenue and profit growth points[87](index=87&type=chunk) [Financial Review](index=20&type=section&id=Financial%20Review) Revenue decreased by 28.6% and gross loss expanded by 7.1%, but a HKD 90 million compensation narrowed net loss to HKD 51.56 million Financial Performance Summary | Item | Reason for Change | | :--- | :--- | | **Revenue Decrease** | Reduced completed works after the completion of several large projects[62](index=62&type=chunk) | | **Gross Loss Increase** | Increased construction costs incurred at the completion stage of certain projects[63](index=63&type=chunk) | | **Other Income Increase** | Recognition of **HKD 90 million** compensation from the former ultimate holding company[65](index=65&type=chunk) | | **Increase in Write-off of Contract Assets** | Final agreements with customers on long-outstanding projects for lower amounts, and management adopting a more prudent estimation[68](index=68&type=chunk) | | **Net Loss Decrease** | Primarily due to compensation from the former holding company[71](index=71&type=chunk) | [Liquidity, Financial Resources and Capital Structure](index=23&type=section&id=Liquidity%2C%20Financial%20Resources%20and%20Capital%20Structure) The Group's liquidity is extremely tight with a 0.8 current ratio and an equity deficit; total debt significantly decreased to HKD 25.67 million Liquidity and Capital Structure Indicators | Indicator | March 31, 2024 | March 31, 2023 | | :--- | :--- | :--- | | Bank and Cash Balances (HKD thousands) | 84,497 | 98,074 | | Total Debt (HKD thousands) | 25,667 | 211,686 | | Current Ratio | 0.8 | 1.0 | | Debt-to-Asset Ratio | Not Applicable | 20,632.2% | [Outlook](index=24&type=section&id=Outlook) Despite challenges in the Hong Kong construction industry, the Group remains cautiously optimistic, prudently expanding core businesses while vigorously exploring new growth areas like new energy and recycling - Facing challenges in Hong Kong's construction industry, the Group's primary focus has shifted from aggressive bidding to improving liquidity, including strategic asset sales and debt reduction[86](index=86&type=chunk) - The Group is optimistic about the development potential of new energy materials and environmental recycling industries, having initiated chemical product trading as a pilot and planning further development in this area to explore new revenue and profit growth points[87](index=87&type=chunk) [Corporate Governance](index=26&type=section&id=Corporate%20Governance) The Company largely complied with corporate governance codes, though Chairman and CEO roles are not separated, and no independent internal audit department exists - The Company complied with most provisions of the Corporate Governance Code, but with deviations: the roles of Chairman and Chief Executive Officer are not segregated, and the Company has no Chief Executive Officer position[89](index=89&type=chunk) - The Company has not established an independent internal audit department, but the Board believes that internal audit functions are fulfilled through close monitoring by executive directors and senior management, and by engaging external independent consultants for review[90](index=90&type=chunk)[92](index=92&type=chunk)