Consolidated Financial Statements [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) For the year ended March 31, 2025, the company experienced a significant decrease in revenue, an expanded gross loss, and an increased loss for the year, primarily due to reduced compensation from the former ultimate holding company and lower finance costs Consolidated Statement of Profit or Loss and Other Comprehensive Income Key Data (HK$ thousand) | Indicator | 2025 | 2024 | Change | | :--- | :--- | :--- | :--- | | Revenue | 129,580 | 175,174 | -26.0% | | Cost of sales and services provided | (173,318) | (206,213) | -15.9% | | 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) As of March 31, 2025, the company's non-current assets significantly increased, mainly in property, plant and equipment and right-of-use assets, while net current liabilities and net liabilities expanded, further increasing the deficit in equity Consolidated Statement of Financial Position Key Data (HK$ thousand) | Indicator | 2025 | 2024 | Change | | :--- | :--- | :--- | :--- | | **Non-current assets** | | | | | Property, plant and equipment | 131,093 | 10,642 | +1131.8% | | Right-of-use assets | 26,375 | 2,025 | +1202.5% | | **Current assets** | | | | | Inventories | 2,974 | 1,314 | +126.3% | | Trade receivables | 30,120 | 31,942 | -5.7% | | Contract assets | 20,613 | 65,679 | -68.6% | | Bank and cash balances | 48,481 | 84,497 | -42.7% | | **Current liabilities** | | | | | Trade payables and retention money payable | 183,860 | 149,721 | +22.8% | | Contract liabilities | 162 | 11,961 | -98.6% | | Accruals and other payables | 116,203 | 40,404 | +187.6% | | Bank borrowings, secured | 6,436 | 13,645 | -52.9% | | Net current liabilities | (191,632) | (38,275) | +400.7% | | Net liabilities | (84,204) | (25,764) | +226.8% | | Deficit in equity | (84,204) | (25,764) | +226.8% | Notes to the Financial Statements [Note 1. General Information](index=4&type=section&id=1.%20General%20Information) Jian Hong Group Holdings Limited, incorporated in the Cayman Islands and listed on the HKEX, primarily provides foundation and building services and sells chemical products in China, with Mr. Chan Yung Sang as the ultimate controlling party - The Company is incorporated in the Cayman Islands, and its shares have been listed on the Main Board of the Stock Exchange of Hong Kong since March 18, 2016[6](index=6&type=chunk) - The principal activities of the Group are the provision of foundation and building services and the sale of chemical products in the PRC[6](index=6&type=chunk) - Fook Shun Enterprises Limited is the immediate holding company, Sendlink Limited is the ultimate holding company, and Mr. Chan Yung Sang is the ultimate controlling party[6](index=6&type=chunk) [Note 2. Basis of Preparation](index=4&type=section&id=2.%20Basis%20of%20Preparation) The consolidated financial statements are prepared in accordance with HKFRSs and comply with HKEX Listing Rules and the Hong Kong Companies Ordinance, with management affirming the going concern assumption despite significant uncertainties - The consolidated financial statements have been prepared in accordance with Hong Kong Financial Reporting Standards issued by the Hong Kong Institute of Certified Public Accountants[7](index=7&type=chunk) - The financial statements also comply with the applicable disclosure provisions of the Rules Governing the Listing of Securities on The Stock Exchange of Hong Kong Limited and the disclosure requirements of the Hong Kong Companies Ordinance (Cap. 622)[7](index=7&type=chunk) [Going Concern Assumption](index=4&type=section&id=Going%20Concern%20Assumption) The Group's significant loss and net current liabilities raise material uncertainties about its ability to continue as a going concern, though the ultimate controlling party has pledged financial support and management plans fundraising and business expansion - For the year ended March 31, 2025, the Group incurred a loss of approximately HK$57,592,000[8](index=8&type=chunk) - As at March 31, 2025, the Group had net current liabilities and net liabilities of approximately HK$191,632,000 and HK$84,204,000 respectively[8](index=8&type=chunk) - Mr. Chan, the ultimate controlling party, has agreed to provide sufficient financial resources to enable the Group to meet its financial obligations as they fall due and to continue to operate in the foreseeable future for at least the next 12 months[11](index=11&type=chunk) - The Group plans to undertake fundraising activities, expand its construction and chemical materials business in the PRC, and implement cost-saving measures to maintain adequate cash flows[11](index=11&type=chunk) [Note 3. Adoption of New and Revised HKFRSs](index=5&type=section&id=3.%20Adoption%20of%20New%20and%20Revised%20HKFRSs) The Group has applied several new and revised HKFRSs effective from April 1, 2024, with no significant impact on current or prior period financial statements, while HKFRS 18 is expected to significantly alter financial statement presentation [Standards Applied](index=5&type=section&id=Standards%20Applied) The Group's initial application of new and revised HKFRSs effective from April 1, 2024, has not materially impacted its financial position or performance for the current and prior years - The Group has applied for the first time a number of new and revised HKFRSs that are effective for the annual period beginning on or after April 1, 2024[10](index=10&type=chunk) - The new and revised HKFRSs had no significant impact on the Group’s financial position and performance for the current and prior years[12](index=12&type=chunk) [Standards Issued But Not Yet Effective](index=6&type=section&id=Standards%20Issued%20But%20Not%20Yet%20Effective) The Group has not early adopted new and revised standards issued but not yet effective, with HKFRS 18 anticipated to introduce significant changes to the statement of profit or loss structure and disclosure of management-defined performance measures - The Group has not early applied any new and revised HKFRSs that have been issued but are not yet effective for the financial year beginning April 1, 2024[13](index=13&type=chunk) - HKFRS 18, "Presentation and Disclosure in Financial Statements," will replace HKAS 1 and introduce significant changes to the structure of the statement of profit or loss, disclosure of management-defined performance measures, and classification of information aggregation[15](index=15&type=chunk) - The directors are currently assessing the impact of applying HKFRS 18 on the presentation and disclosures in the consolidated financial statements[16](index=16&type=chunk) [Note 4. Segment Information](index=7&type=section&id=4.%20Segment%20Information) The Group's operating segments, "Foundation and Building Services" and "Chemical Products Sales," show a decline in foundation services revenue and an expanded loss, while chemical product sales revenue grew and turned profitable, with a significant shift of non-current assets and revenue to China - The Group determines its operating segments based on internal reports that are regularly reviewed by the chief operating decision maker[17](index=17&type=chunk) - The reportable operating segments are "Foundation and building – provision of foundation and building services" and "Chemical materials – sales of chemical products"[17](index=17&type=chunk) [Operating Segment Information](index=8&type=section&id=Operating%20Segment%20Information) The Group's operating segments, "Foundation and Building Services" and "Chemical Products Sales," show a decline in foundation services revenue and an expanded loss, while chemical product sales revenue grew and turned profitable Reportable Segment Revenue and Results (HK$ thousand) | Segment | 2025 Revenue | 2024 Revenue | 2025 Results | 2024 Results | | :--- | :--- | :--- | :--- | :--- | | Provision of foundation and building services | 125,885 | 171,856 | (94,311) | (32,615) | | Sales of chemical products | 3,695 | 3,318 | 173 | (3,089) | | Others | – | – | – | (217) | | Total | 129,580 | 175,174 | (94,138) | (35,921) | - Unallocated gain on bargain purchase was **HK$40,947 thousand** in 2025, compared to zero in 2024[18](index=18&type=chunk) - Loss before tax increased from **HK$(51,560) thousand** in 2024 to **HK$(57,047) thousand** in 2025[18](index=18&type=chunk) [Segment Assets and Liabilities](index=9&type=section&id=Segment%20Assets%20and%20Liabilities) Segment assets and liabilities show a significant increase in chemical product sales assets and liabilities, while foundation and building services assets decreased Segment Assets and Liabilities (HK$ thousand) | Indicator | 2025 | 2024 | Change | | :--- | :--- | :--- | :--- | | **Segment assets** | | | | | Provision of foundation and building services | 47,323 | 122,208 | -61.2% | | Sales of chemical products | 178,169 | 6,680 | +2567.2% | | Others | 42,289 | 45,450 | -7.0% | | Total segment assets | 267,781 | 174,338 | +53.6% | | Consolidated assets | 273,947 | 201,989 | +35.6% | | **Segment liabilities** | | | | | Provision of foundation and building services | 207,059 | 192,897 | +7.3% | | Sales of chemical products | 69,358 | 7,818 | +787.1% | | Others | – | 1,928 | -100.0% | | Total segment liabilities | 276,417 | 202,643 | +36.4% | | Consolidated liabilities | 358,151 | 227,753 | +57.2% | [Geographical Information](index=10&type=section&id=Geographical%20Information) Revenue from Hong Kong significantly decreased, while revenue and non-current assets in China substantially increased, reflecting a geographical shift in the Group's operations Geographical Revenue and Non-current Assets (HK$ thousand) | Region | 2025 Revenue | 2024 Revenue | 2025 Non-current Assets | 2024 Non-current Assets | | :--- | :--- | :--- | :--- | :--- | | Hong Kong | 95,423 | 171,856 | – | 12,636 | | PRC | 34,157 | 3,318 | 157,468 | 31 | | Total | 129,580 | 175,174 | 157,468 | 12,667 | [Revenue from Major Customers](index=10&type=section&id=Revenue%20from%20Major%20Customers) Revenue from major customers in foundation and building services shows changes in contributions, with some customers no longer applicable in 2025 and new ones emerging Revenue from Major Customers (HK$ thousand) | Customer | 2025 | 2024 | | :--- | :--- | :--- | | Customer 1 (Foundation and building services) | 55,588 | 100,009 | | Customer 2 (Foundation and building services) | N/A | 41,209 | | Customer 3 (Foundation and building services) | 39,835 | N/A | | Customer 4 (Foundation and building services) | 16,254 | N/A | [Note 5. Revenue](index=10&type=section&id=5.%20Revenue) The Group's total revenue decreased in 2025, primarily due to a reduction in foundation and building services, with a significant decrease in the total amount of unsatisfied performance obligations expected to be recognized in the future Revenue Analysis (HK$ thousand) | Revenue Source | 2025 | 2024 | | :--- | :--- | :--- | | Provision of foundation and building services | 125,885 | 171,856 | | Sales of chemical products | 3,695 | 3,318 | | Total | 129,580 | 175,174 | - The total amount of unsatisfied performance obligations expected to be recognized in the future significantly decreased from **HK$305,204,000** in 2024 to **HK$18,199,000** in 2025[26](index=26&type=chunk) [Note 6. Other Income](index=11&type=section&id=6.%20Other%20Income) Other income significantly decreased from HK$90,925 thousand in 2024 to HK$5,383 thousand in 2025, mainly due to a substantial reduction in compensation from the former ultimate holding company for contract asset write-offs Other Income (HK$ thousand) | Item | 2025 | 2024 | | :--- | :--- | :--- | | Compensation from former ultimate holding company for write-off of contract assets | 5,000 | 90,000 | | Interest income | 2 | 361 | | Miscellaneous income | 381 | 557 | | Total | 5,383 | 90,925 | - The remaining unutilised guaranteed amount under the project performance guarantee was **nil** as at March 31, 2025 (2024: HK$5,000,000)[27](index=27&type=chunk) [Note 7. Finance Costs](index=12&type=section&id=7.%20Finance%20Costs) The Group's finance costs significantly decreased from HK$9,179 thousand in 2024 to HK$946 thousand in 2025, primarily due to a substantial reduction in interest expenses on bank borrowings and imputed interest on other borrowings Finance Costs (HK$ thousand) | Item | 2025 | 2024 | | :--- | :--- | :--- | | Interest expense on bank borrowings | 906 | 6,154 | | Interest expense on lease liabilities | 77 | 233 | | Imputed interest expense on other borrowings | – | 6,211 | | Total (net of amount capitalised in contract work) | 946 | 9,179 | [Note 8. Income Tax Expense](index=12&type=section&id=8.%20Income%20Tax%20Expense) No Hong Kong profits tax provision was made due to the absence of taxable profits, while China enterprise income tax expense of HK$545 thousand was incurred in 2025 - No provision for Hong Kong profits tax has been made as the Group had no assessable profits for the years ended March 31, 2025 and 2024[29](index=29&type=chunk) - China enterprise income tax expense of **HK$545,000** was incurred in 2025[28](index=28&type=chunk) [Note 9. Loss for the Year](index=13&type=section&id=9.%20Loss%20for%20the%20Year) The Group's loss for the year is presented after deducting various expenses, including auditor's remuneration, construction material costs, depreciation, contract asset write-offs, and expected credit loss provisions Loss for the Year Deducted Items (HK$ thousand) | Item | 2025 | 2024 | | :--- | :--- | :--- | | Auditor's remuneration (audit services) | 880 | 830 | | Auditor's remuneration (non-audit services) | 600 | – | | Construction materials cost recognised as cost of services | 33,140 | 59,080 | | 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 | – | [Note 10. Dividends](index=13&type=section&id=10.%20Dividends) The Board of Directors does not recommend the payment of any dividends for the year ended March 31, 2025 - The Board of Directors does not recommend the payment of any dividend for the year ended March 31, 2025 (2024: nil)[31](index=31&type=chunk) [Note 11. Loss Per Share](index=14&type=section&id=11.%20Loss%20Per%20Share) 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 (HK cents) | Indicator | 2025 | 2024 | | :--- | :--- | :--- | | Basic loss per share | (12.0) | (12.2) | - No diluted loss per share is presented as the Company had no potential dilutive ordinary shares for the years ended March 31, 2025 and 2024[34](index=34&type=chunk) [Note 12. Trade Receivables](index=14&type=section&id=12.%20Trade%20Receivables) As of March 31, 2025, net trade receivables slightly decreased to HK$30,120 thousand, with credit terms typically ranging from 14 to 60 days, an increase in expected credit loss provisions, and a significant rise in RMB-denominated receivables Trade Receivables (HK$ thousand) | Item | 2025 | 2024 | | :--- | :--- | :--- | | Trade receivables | 41,218 | 40,513 | | Less: Allowance for doubtful debts under expected credit losses | (11,098) | (8,571) | | Net | 30,120 | 31,942 | - The credit period granted on trade receivables is normally 14 to 60 days (2024: 14 to 45 days)[35](index=35&type=chunk) - Trade receivables are denominated in HKD and RMB, with the RMB-denominated portion significantly increasing[36](index=36&type=chunk) [Note 13. Contract Assets/Contract Liabilities](index=15&type=section&id=13.%20Contract%20Assets%2FContract%20Liabilities) Contract assets significantly decreased as of March 31, 2025, due to project completion and write-offs, while contract liabilities also substantially reduced, reflecting fewer advance payments for construction services Contract Assets (HK$ thousand) | Item | 2025 | 2024 | | :--- | :--- | :--- | | From performance of construction contracts | 23,798 | 68,831 | | Less: Provision for contract assets under expected credit losses | (3,185) | (3,152) | | Net | 20,613 | 65,679 | - The decrease in contract assets was due to the completion and finalisation of certain construction projects for the years ended March 31, 2025 and 2024[37](index=37&type=chunk) - Contract assets of approximately **HK$18,008,000** (2024: HK$65,932,000) were written off and partially recovered through compensation from the Company's former ultimate holding company under the project performance guarantee[37](index=37&type=chunk) Contract Liabilities (HK$ thousand) | Item | 2025 | 2024 | | :--- | :--- | :--- | | Advance receipts for performance obligations – construction contracts | 162 | 11,961 | - The decrease in contract liabilities in 2025 was mainly due to a reduction in advance payments received from customers for the provision of construction services[42](index=42&type=chunk) [Note 14. Trade Payables and Retention Money Payable](index=18&type=section&id=14.%20Trade%20Payables%20and%20Retention%20Money%20Payable) As of March 31, 2025, total trade payables and retention money payable increased to HK$183,860 thousand, with the largest proportion being trade payables aged over 90 days Trade Payables and Retention Money Payable (HK$ thousand) | Item | 2025 | 2024 | | :--- | :--- | :--- | | Trade payables | 148,795 | 120,340 | | Retention money payable | 35,065 | 29,381 | | Total | 183,860 | 149,721 | Ageing Analysis of Trade Payables (HK$ thousand) | Ageing | 2025 | 2024 | | :--- | :--- | :--- | | 0 to 30 days | 42,930 | 32,298 | | 31 to 60 days | 4,253 | 11,487 | | 61 to 90 days | 1,506 | 1,829 | | Over 90 days | 100,106 | 74,726 | [Note 15. Performance Bonds](index=19&type=section&id=15.%20Performance%20Bonds) As of March 31, 2025, the Group had no performance bonds for construction contracts, a change from approximately HK$10,158 thousand in 2024 - As at March 31, 2025, the Group had no performance bonds for construction contracts[46](index=46&type=chunk) - As at March 31, 2024, performance bonds for construction contracts of approximately **HK$10,158,000** were pledged in various ways[47](index=47&type=chunk) [Note 16. Capital Commitments](index=19&type=section&id=16.%20Capital%20Commitments) As of March 31, 2025, the Group had capital commitments of HK$1,057 thousand for contracted purchases of property, plant and equipment Capital Commitments (HK$ thousand) | Item | 2025 | 2024 | | :--- | :--- | :--- | | Contracted for the purchase of property, plant and equipment | 1,057 | – | [Note 17. Litigation](index=19&type=section&id=17.%20Litigation) The Company and its subsidiary, Jian Hong Foundation Limited, faced multiple winding-up petitions from various parties, some of which were settled and withdrawn, while new petitions emerged post-reporting period - The Bank of East Asia, Limited filed a winding-up petition against the Company and Jian Hong Foundation on June 21, 2024, which was subsequently withdrawn after negotiation[49](index=49&type=chunk)[50](index=50&type=chunk) - China Geo-Engineering Corporation, as an alternative petitioner, filed an amended petition against Jian Hong Foundation for unsettled subcontracting fees, which was settled and withdrawn on December 27, 2024[50](index=50&type=chunk)[51](index=51&type=chunk)[52](index=52&type=chunk) - Ince & Co filed a second petition on February 7, 2025, for unpaid legal fees, which was subsequently settled and withdrawn on April 28, 2025[52](index=52&type=chunk) [Note 18. Events After the Reporting Period](index=20&type=section&id=18.%20Events%20After%20the%20Reporting%20Period) On May 21, 2025, Emperor International Limited was granted leave to be substituted as petitioner and filed a second amended petition for approximately HK$2.7 million in outstanding amounts, with the hearing adjourned to July 16, 2025 - On May 21, 2025, Emperor International Limited was granted leave to be substituted as petitioner and filed a second amended petition for an outstanding amount of approximately **HK$2.7 million**[53](index=53&type=chunk) - The hearing of the second amended petition has been adjourned to July 16, 2025[53](index=53&type=chunk) Management Discussion and Analysis and Outlook [Business Review](index=21&type=section&id=Business%20Review) For the year ended March 31, 2025, the Group primarily engaged in foundation and building services and chemical product sales, with a decrease in active foundation projects and some project terminations - The Group is principally engaged in the provision of foundation and building services and sales of chemical products[56](index=56&type=chunk) - As at March 31, 2025, there were **4** foundation and building projects still in progress, of which **1** was substantially completed and **2** were terminated[57](index=57&type=chunk) [Financial Review](index=21&type=section&id=Financial%20Review) The Group experienced a 26.0% decrease in overall revenue, a 40.9% increase in gross loss, and an expanded net loss, with other income significantly declining due to reduced compensation, but finance costs notably decreased, and liquidity ratios worsened - The Group's overall revenue decreased by **26.0%** from **HK$175,174,000** in 2024 to **HK$129,580,000** in 2025[58](index=58&type=chunk) - The overall gross loss increased by **40.9%** from **HK$31,039,000** in 2024 to **HK$43,738,000** in 2025[58](index=58&type=chunk) - The Group recorded a net loss of approximately **HK$57,592,000** (2024: HK$51,560,000)[65](index=65&type=chunk) - As at March 31, 2025, the Group’s current ratio was **0.4** (2024: 0.8)[70](index=70&type=chunk) [Revenue and Gross Loss](index=21&type=section&id=Revenue%20and%20Gross%20Loss) Revenue decreased primarily due to project terminations and a more selective approach to new construction contracts, while the overall gross loss margin increased due to higher construction costs - The decrease in revenue was mainly due to the termination of two large projects and the Group's more selective and prudent approach to tendering for new construction contracts[59](index=59&type=chunk) - The Group's revenue from the PRC segment significantly increased from approximately **HK$3,318,000** in 2024 to approximately **HK$34,157,000** in 2025[59](index=59&type=chunk) - The overall gross loss margin increased from approximately **17.7%** in 2024 to approximately **33.8%** in 2025, mainly due to increased construction costs incurred at the completion stage of certain projects[58](index=58&type=chunk) [Other Income and Expenses](index=22&type=section&id=Other%20Income%20and%20Expenses) Other income significantly decreased due to reduced compensation from the former ultimate holding company, while expected credit loss provisions for trade receivables and contract assets increased due to a deteriorating operating environment - Other income decreased from approximately **HK$90,925,000** in 2024 to approximately **HK$5,383,000** in 2025, mainly due to reduced compensation from the former ultimate holding company[60](index=60&type=chunk) - The net provision for expected credit losses on trade receivables and contract assets increased from approximately **HK$768,000** in 2024 to approximately **HK$2,627,000** in 2025, due to the deteriorating operating environment[62](index=62&type=chunk) - Write-off of contract assets decreased from approximately **HK$65,932,000** in 2024 to approximately **HK$18,008,000** in 2025[63](index=63&type=chunk) [Net Loss and Indebtedness](index=23&type=section&id=Net%20Loss%20and%20Indebtedness) The Group recorded an increased net loss for the year, with total indebtedness rising, while the unsecured loan from the former ultimate holding company was fully discharged - The Group recorded a net loss of approximately **HK$57,592,000** (2024: HK$51,560,000)[65](index=65&type=chunk) - As at March 31, 2025, the Group’s total indebtedness was approximately **HK$54,061,000** (2024: HK$25,667,000)[66](index=66&type=chunk) - As at March 31, 2025, the carrying amount of the unsecured loan from the former ultimate holding company was **nil** (2024: HK$10,000,000), having been fully discharged[69](index=69&type=chunk) [Liquidity, Financial Resources and Capital Structure](index=24&type=section&id=Liquidity%2C%20Financial%20Resources%20and%20Capital%20Structure) As of March 31, 2025, the Group's bank and cash balances decreased, and its current ratio deteriorated, with no financial instruments used for hedging purposes - As at March 31, 2025, the Group held bank and cash balances of **HK$48,481,000** (2024: approximately HK$84,497,000)[70](index=70&type=chunk) - As at March 31, 2025, the Group’s current ratio was **0.4** (2024: 0.8)[70](index=70&type=chunk) - The Group did not use any financial instruments for hedging purposes[71](index=71&type=chunk) [Use of Proceeds from Placing of New Shares](index=24&type=section&id=Use%20of%20Proceeds%20from%20Placing%20of%20New%20Shares) The net proceeds of approximately HK$29.6 million from the placing of new shares were reallocated by the Board to prioritize repayment of overdue debts and for general working capital and bank loan repayment - The Company placed **80,000,000** new ordinary shares on November 30, 2023, raising net proceeds of approximately **HK$29.6 million**[72](index=72&type=chunk) - The Board decided to prioritize repayment of overdue debts to the petitioner and resolved to change the use of unutilised net proceeds on September 30, 2024[73](index=73&type=chunk) Use of Net Proceeds from Placing (HK$ million) | Use | Balance available as at April 1, 2024 | Utilised before reallocation | Revised allocation after reallocation | Utilised as at March 31, 2025 | Unutilised as at March 31, 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, assets, and liabilities are denominated in HKD, and it currently has no foreign currency hedging policy - The Group faces extremely low foreign exchange risk as most of its business transactions, assets, and liabilities are primarily denominated in Hong Kong Dollars[75](index=75&type=chunk) - The Group currently does not have any foreign currency hedging policy in respect of foreign currency transactions, assets, and liabilities[75](index=75&type=chunk) - If the HKD had appreciated by **5%** against the RMB, the consolidated loss after tax would have decreased by approximately **HK$1,297,000**[76](index=76&type=chunk) [Material Investments, Material Acquisitions or Disposals](index=26&type=section&id=Material%20Investments%2C%20Material%20Acquisitions%20or%20Disposals) For the year ended March 31, 2025, the Group undertook significant activities including the acquisition of a subsidiary, an increase in right-of-use assets, and the disposal of property, plant and equipment - The Group acquired a subsidiary for approximately **HK$68,614,000**[77](index=77&type=chunk) - Right-of-use assets increased by approximately **HK$2,008,000**[77](index=77&type=chunk) - Property, plant and equipment were disposed of for approximately **HK$8,666,000**[77](index=77&type=chunk) [Employees and Remuneration Policy](index=26&type=section&id=Employees%20and%20Remuneration%20Policy) As of March 31, 2025, the Group's employee count decreased to 63, primarily comprising construction workers in China, with remuneration policies regularly reviewed and adjusted based on performance - As at March 31, 2025, the Group had **63** employees (2024: 81 employees)[80](index=80&type=chunk) - The majority of the Group’s employees are construction workers in the PRC (2024: Hong Kong)[80](index=80&type=chunk) - The total staff costs incurred by the Group for the year ended March 31, 2025, amounted to approximately **HK$32,928,000** (2024: HK$39,575,000)[80](index=80&type=chunk) [Management Discussion and Analysis and Outlook](index=27&type=section&id=Management%20Discussion%20and%20Analysis%20and%20Outlook) The Group's FY2025 saw reduced revenue and expanded losses due to Hong Kong's construction industry challenges, prompting a conservative strategy, potential spin-off of Hong Kong foundation business, and active expansion into mainland China through acquisitions for diversification and growth - The Group's overall revenue for FY2025 decreased by approximately **26.0%** to approximately **HK$129,580,000**, with a loss and total comprehensive loss of approximately **HK$57,592,000**[81](index=81&type=chunk) - The Hong Kong construction industry faces challenges such as labor shortages, an aging workforce, and a cooling property market, leading to limited project activity and narrower profit margins[81](index=81&type=chunk) - The Board is actively evaluating the possibility of a spin-off and sale 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, on March 21, 2025, completed the acquisition of **100%** equity in Changzhou Yonghong Group, expanding into the chemical and environmental sectors[82](index=82&type=chunk) - In the long term, the Group will continue to reallocate resources to the mainland market, where sustained infrastructure development and supportive economic policies are expected to lay a solid foundation for growth[83](index=83&type=chunk) Corporate Governance Report [Corporate Governance](index=28&type=section&id=Corporate%20Governance) The Board is committed to high corporate governance standards, addressing past non-compliance with Listing Rules regarding independent non-executive directors and committee compositions, and ensuring effective internal controls through close monitoring and external audits - The Board is committed to achieving a high level of corporate governance and strives to maintain transparent and accountable management practices[84](index=84&type=chunk) - The Company previously failed to comply with Listing Rules 3.10(1), 3.21, and 3.27A regarding the number of independent non-executive directors and the composition of the Audit and Nomination Committees[85](index=85&type=chunk) - Following the appointment of Ms. Szeto Danny as an independent non-executive director on April 17, 2025, the Company has complied with the relevant Listing Rules[85](index=85&type=chunk) [Compliance with Corporate Governance Code](index=28&type=section&id=Compliance%20with%20Corporate%20Governance%20Code) The Company has complied with all code provisions of the Corporate Governance Code, except for the non-segregation of Chairman and Chief Executive roles, with the Chairman and other Board members assuming CEO responsibilities - 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 non-segregation of the roles of chairman and chief executive[84](index=84&type=chunk) - The Company does not have a chief executive officer, and the responsibilities are performed by the Chairman of the Board and other members[84](index=84&type=chunk) [Risk Management and Internal Control](index=29&type=section&id=Risk%20Management%20and%20Internal%20Control) The Company, lacking an independent internal audit department, relies on close monitoring by executive directors and senior management, supplemented by an external professional firm for annual internal audits, with the Board reviewing effectiveness annually - The Company does not have an independent internal audit department but relies on close and regular monitoring by executive directors and senior management[86](index=86&type=chunk) - The Company has additionally engaged an external professional firm to facilitate the internal audit function, conducting annual internal audits of the Group and reporting to the Audit Committee[86](index=86&type=chunk) - The Board annually reviews the need for an internal audit function and conducted an annual review of its effectiveness through the Audit Committee in FY2025[88](index=88&type=chunk)[89](index=89&type=chunk) [Securities Transactions](index=30&type=section&id=Securities%20Transactions) The Board confirms that neither the Company nor its subsidiaries purchased, sold, or redeemed any of its listed securities during the year, and all directors complied with the Model Code for securities transactions [Purchase, Sale or Redemption of the Company's Listed Securities](index=30&type=section&id=Purchase%2C%20Sale%20or%20Redemption%20of%20the%20Company%27s%20Listed%20Securities) For the year ended March 31, 2025, neither the Company nor any of its subsidiaries purchased, sold, or redeemed any of the Company's listed securities - For the year ended March 31, 2025, neither the Company nor any of its subsidiaries purchased, sold, or redeemed any of the Company's listed securities[90](index=90&type=chunk) [Securities Transactions by Directors](index=30&type=section&id=Securities%20Transactions%20by%20Directors) All directors confirmed their compliance with the required standards of the Model Code for Securities Transactions by Directors of Listed Issuers throughout the year ended March 31, 2025 - The Company has adopted the Model Code for Securities Transactions by Directors of Listed Issuers as set out in Appendix 10 to the Listing Rules[91](index=91&type=chunk) - All Directors confirmed that they have complied with the required standards set out in the Model Code throughout the year ended March 31, 2025[91](index=91&type=chunk) [Audit Committee](index=31&type=section&id=Audit%20Committee) The Audit Committee, composed of three independent non-executive directors with professional qualifications, has reviewed the Group's accounting principles and draft consolidated financial statements - The Audit Committee comprises three independent non-executive directors: Ms. Lau Ngai Sing (Chairperson), Mr. Fung Chi Tung, and Ms. Szeto Danny[92](index=92&type=chunk) - All members of the Audit Committee possess the appropriate professional qualifications or accounting or related financial management expertise required[92](index=92&type=chunk) - The Audit Committee has reviewed the accounting principles and practices adopted by the Group and the draft consolidated financial statements for the year ended March 31, 2025[92](index=92&type=chunk) [Annual General Meeting](index=31&type=section&id=Annual%20General%20Meeting) The Company's Annual General Meeting for the year ended March 31, 2025, will be held on a date to be determined by the Board, with notice to be published and dispatched to shareholders in due course - The Company's Annual General Meeting for the year ended March 31, 2025, is intended to be held on a date to be determined by the Board[93](index=93&type=chunk) - Notice of the Annual General Meeting will be published and dispatched to shareholders in due course in accordance with the Listing Rules[93](index=93&type=chunk) Excerpt from Independent Auditor's Report [Material Uncertainty Related to Going Concern](index=31&type=section&id=Material%20Uncertainty%20Related%20to%20Going%20Concern) The independent auditor's report notes the Group's FY2025 loss, substantial net current liabilities, and ongoing winding-up petitions, which collectively indicate a material uncertainty regarding its ability to continue as a going concern, without modifying the auditor's conclusion - The auditor draws attention to the Group's loss of approximately **HK$57,592,000** for FY2025[94](index=94&type=chunk) - As at March 31, 2025, the Group had net current liabilities and net liabilities of approximately **HK$191,632,000** and **HK$84,204,000** respectively[94](index=94&type=chunk) - A supporting creditor of the petition filed a winding-up petition against a subsidiary of the Company for outstanding fees of approximately **HK$2.7 million**[94](index=94&type=chunk) - These conditions indicate the existence of a material uncertainty that may cast significant doubt on the Group’s ability to continue as a going concern, and the auditor's conclusion is not modified in respect of this matter[94](index=94&type=chunk) [Scope of Work of Evergreen (Hong Kong) CPA Limited](index=32&type=section&id=Scope%20of%20Work%20of%20Evergreen%20%28Hong%20Kong%29%20CPA%20Limited) Evergreen (Hong Kong) CPA Limited, the Group's auditor, confirmed that the figures in the preliminary announcement's consolidated statement of financial position, consolidated statement of profit or loss and other comprehensive income, and related notes align with the draft consolidated financial statements - The auditor confirmed that the figures in the consolidated statement of financial position, consolidated statement of profit or loss and other comprehensive income, and the relevant notes set out in the preliminary announcement are consistent with the amounts set out in the draft consolidated financial statements of the Group for the current year[95](index=95&type=chunk) Other Information [Publication of Annual Results Announcement and Annual Report](index=32&type=section&id=Publication%20of%20Annual%20Results%20Announcement%20and%20Annual%20Report) The annual results announcement has been published on the HKEX and company websites, with the annual report for the year ended March 31, 2025, to be dispatched to shareholders and published online in due course - The annual results announcement has been published on the website of the Stock Exchange and the Company's website[96](index=96&type=chunk) - The Company's 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) [Appreciation and Board Composition](index=32&type=section&id=Appreciation%20and%20Board%20Composition) The Board Chairman extends gratitude to shareholders, clients, suppliers, management, and staff, and the announcement lists the Board's composition as of the announcement date - The Chairman of the Board, on behalf of the Board, extends sincere gratitude to the shareholders, customers, suppliers, management team, and staff[97](index=97&type=chunk) - As of the date of this announcement, the Board comprises three executive directors (Mr. Zhang Zhijia, Dr. Wang Lei, Mr. Yang Xuefeng) and three independent non-executive directors (Mr. Fung Chi Tung, Ms. Lau Ngai Sing, Ms. Szeto Danny)[97](index=97&type=chunk)

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)

Revenue and Income - The Group's revenue from foundation services for the six months ended 30 September 2023 was HK$75,549,000, a decrease of 45% compared to HK$137,316,000 in the same period of 2022[3]. - Other income for the six months ended 30 September 2023 totaled HK$2,098,000, down from HK$5,345,000 in the previous year, primarily due to the absence of government grant income[6]. - The overall revenue of the Group decreased by approximately 45.0% to about HK$75,549,000 for the period, compared to approximately HK$137,316,000 in the comparative period[74]. - The Group's other income decreased from approximately HK$5,345,000 in the comparative period to approximately HK$2,098,000 during the period[79]. Financial Performance - The Group reported a net loss of approximately HK$23,524,000 during the Period, an improvement from a net loss of approximately HK$46,193,000 during the Comparative Period[58]. - The gross profit was approximately HK$1,508,000 during the Period, with a gross profit margin of approximately 2.0%, compared to a gross loss of approximately HK$21,045,000 and a gross loss margin of approximately 15.3% during the Comparative Period[47]. - The loss before tax for the period was HK$23,524,000, an improvement from a loss of HK$46,193,000 in the prior year[151]. - The total comprehensive income for the six months ended September 30, 2023, was a loss of HKD 22,498,000, compared to a loss of HKD 59,455,000 for the same period in 2022[192]. Expenses and Costs - Employee benefits expense for the six months ended 30 September 2023 was HK$2,478,000, significantly lower than HK$4,987,000 in the same period of 2022[15]. - The Group's administrative and other operating expenses increased by 28.0% from approximately HK$15,578,000 during the Comparative Period to approximately HK$19,941,000 during the Period[55]. - Interest on bank borrowings and other financing costs amounted to HK$7,189,000 for the six months ended 30 September 2023, compared to HK$4,580,000 in the same period of 2022[11]. - Finance costs increased by 57.0% from approximately HK$4,580,000 during the Comparative Period to approximately HK$7,189,000 during the Period, primarily due to an increase in imputed interest expenses[54]. Projects and Operations - As of 30 September 2023, the Group had a total of 4 active projects in progress, following the award of 2 new projects during the twelve months ended 30 September 2023[31]. - The Group shifted its focus from a proactive tender strategy to improving liquidity by reducing capital expenditures and strategically disposing of non-profitable machinery[62]. - The Group did not engage in any significant investments, acquisitions, or disposals during the Period, aside from the aforementioned acquisition[131]. Dividends and Shareholder Information - The Group did not recommend the payment of an interim dividend for the six months ended 30 September 2023, consistent with the previous year[20]. - The Board does not recommend the payment of an interim dividend to shareholders for the Period[111]. - As of September 30, 2023, Blessing Well holds 300,000,000 shares, representing a 75% interest in the Company[145]. - Mr. Chen, through Sendlink Limited, is deemed to have a 75% interest in the Company, holding the same number of shares[145]. Cash Flow and Financial Position - For the six months ended September 30, 2023, net cash generated from operating activities was HK$7,428,000, a decrease from HK$23,055,000 in the same period last year[173]. - Net cash generated from investing activities was HK$40,623,000, significantly higher than HK$1,399,000 in the previous year[173]. - Net cash used in financing activities amounted to HK$53,229,000, compared to HK$18,718,000 in the same period last year[173]. - The current ratio of the Group as of September 30, 2023, was 0.9, compared to 1.0 as of March 31, 2023[70]. Company Structure and Governance - The Company was incorporated in the Cayman Islands and has been listed on the Main Board of The Stock Exchange of Hong Kong Limited since March 18, 2016[194]. - The immediate holding company of the Company is Blessing Well Enterprise Limited, incorporated in the British Virgin Islands[194]. - The audit committee has reviewed the interim financial statements for the period[148]. - The company has maintained a robust internal control system, regularly reviewing its effectiveness in financial, operational, and compliance controls[156]. Risk and Compliance - The Group's financial position has not been materially impacted by the application of new and amendments to HKFRSs during the current interim period[183]. - The company has not established an independent internal audit department but relies on the executive directors and senior management for internal control and risk management[155]. - The company has minimal exposure to foreign currency risk, primarily dealing in HK$ for most transactions[125].

Financial Performance - The Group's overall revenue decreased by approximately 67.4% to approximately HK$245,349,000 for the year ended March 31, 2023, compared to HK$751,767,000 in 2022[14]. - The loss attributable to owners of the Company amounted to approximately HK$74,115,000 for the year ended March 31, 2023, compared to a profit of HK$18,346,000 in 2022[14]. - The overall gross profit margin decreased from approximately 4.0% for the year ended 31 March 2022 to a gross loss margin of approximately 11.8% for the year ended 31 March 2023[28]. - The Group reported a net loss of approximately HK$74,115,000 for the year ended 31 March 2023, compared to a net loss of HK$18,346,000 in 2022[40]. - The Group's other income increased from approximately HK$8,084,000 during the year ended 31 March 2022 to approximately HK$10,239,000 during the year ended 31 March 2023, mainly due to a non-recurring government grant[32]. - Administrative and other operating expenses decreased by 15.9% from approximately HK$46,441,000 during the year ended 31 March 2022 to approximately HK$39,050,000 during the year ended 31 March 2023[33]. - The net provision for expected credit loss on trade receivables increased from approximately HK$910,000 during the year ended 31 March 2022 to approximately HK$6,000,000 during the year ended 31 March 2023[34]. - The Group's finance costs increased from approximately HK$8,825,000 during the year ended 31 March 2022 to approximately HK$10,321,000 during the year ended 31 March 2023[39]. - As at 31 March 2023, the total debts of the Group were approximately HK$211,686,000, a decrease from HK$281,749,000 in 2022[41]. - The Group's gearing ratio as of March 31, 2023, was approximately 20,632.2%, significantly higher than 375.0% as of March 31, 2022[57]. - The current ratio of the group as of March 31, 2023, was approximately 1.0, down from approximately 1.2 as of March 31, 2022[57]. - The group had pledged bank deposits and cash balances of approximately HK$98,074,000 as of March 31, 2023, compared to HK$126,283,000 as of March 31, 2022[57]. Strategic Outlook - The economic environment in Hong Kong is expected to gradually recover as the government relaxes pandemic-related restrictions and reinstates cross-border activities[15]. - The Group remains optimistic about the foundation and construction industry in Hong Kong due to increased land supply for housing developments and infrastructure plans[16]. - The Group will continue to explore suitable investment opportunities to broaden its revenue base and maximize returns to shareholders[20]. - The Group is actively seeking development opportunities in sectors such as new energy and new raw materials to increase profitability and diversify its operations[20]. - The group has minimal exposure to foreign currency risk, with most transactions denominated in HK$[59]. Corporate Governance - The Board is committed to high standards of corporate governance and has complied with all applicable code provisions as set out in the Corporate Governance Code[75][76]. - The Board currently consists of six members, including three Executive Directors and three Independent Non-executive Directors, ensuring a balance of skills and experience[85][89]. - The Company has complied with the Listing Rules regarding the appointment of Independent Non-executive Directors[103]. - All Independent Non-executive Directors confirmed their independence from the Company as per the Listing Rules[104]. - The Company has adopted a Board Nomination Policy to recommend candidates for election as Directors at general meetings or to fill casual vacancies[128]. - The Nomination Committee uses various selection criteria, including integrity, experience, commitment, and diversity, to assess proposed candidates[130]. - The Remuneration Committee is responsible for making recommendations on the remuneration policy and structure for all Directors and senior management[132]. - The Board has reviewed the Company's policies and practices on corporate governance during the year ended March 31, 2023[142]. - The Company has established Board Committees to oversee specific aspects of its affairs and ensure effective governance[112]. Human Resources - As of March 31, 2023, the Group had 98 employees, a decrease from 160 employees in 2022, with total staff costs of approximately HK$50,259,000, down from HK$69,290,000 in 2022[68][73]. - The total staff costs incurred by the Group during the year ended March 31, 2023, were approximately HK$50,259,000, reflecting a reduction of about 27.5% from the previous year[68][73]. - The Group's remuneration policy includes periodic reviews and potential salary increments based on individual performance assessments[68][73]. - The remuneration paid to senior management during the year ended March 31, 2023, included 1 person in the band of HK$1,000,001 to HK$1,500,000, 1 person in the band of HK$1,500,001 to HK$2,000,000, and 1 person in the band of HK$2,000,001 to HK$2,500,000[141]. Risk Management and Internal Control - The Group's risk management and internal control procedures aim to safeguard assets against misappropriation and ensure reliable accounting records[150]. - The Group's internal control procedures, including financial, operational, and compliance controls, are considered effective and adequate by the Board[156]. - The Board conducted an annual review of the effectiveness of the Group's internal control procedures for the year ended March 31, 2023, with no significant areas of improvement identified[155]. - The Company did not establish a standalone Internal Audit Department but has implemented measures for internal audit functions[149]. - The Company has implemented procedures for responding to external inquiries about the Group's affairs[165]. ESG Commitment - The Group's ESG report for the year ended March 31, 2023, demonstrates its commitment to sustainable development by delivering environmental, social, and economic benefits to stakeholders[190]. - The ESG report is prepared in accordance with the Environmental, Social and Governance Reporting Guide and covers the principal businesses of the Group[191]. - The Group emphasizes the "Materiality" principle in determining significant ESG issues through stakeholder engagement and materiality assessment[194]. - The Board oversees the Group's ESG strategies and compliance with ESG-related laws and regulations, ensuring alignment with the requirements set by the Board[196]. - During the year ended March 31, 2023, substantial time was spent by the Board, management, and the ESG Working Team evaluating ESG-related risks and formulating relevant policies[195]. - Regular Board meetings are held to monitor progress, targets, and goals related to ESG performance[196].

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 （於開曼群島註冊成立的有限公司） （股份代號：1557） 截至二零二三年三月三十一日止年度之 全年業績公告 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」）截至二零二三年三月三十一日止年度之綜合全年業績，連同截至二零 二二年三月三十一日止年度之比較數字如下： ...

Financial Performance - The Group's overall revenue decreased by 66.7% from approximately HK$412,700,000 during the six months ended 30 September 2021 to approximately HK$137,316,000 during the Period[13]. - The gross profit decreased by 216.4% from approximately HK$18,076,000 during the Comparative Period to a gross loss of approximately HK$21,045,000 during the Period[14]. - The gross profit margin decreased from approximately 4.4% during the Comparative Period to a gross loss margin of approximately 15.3% during the Period[14]. - The net loss for the Period was approximately HK$46,193,000, significantly higher than the net loss of approximately HK$4,911,000 during the Comparative Period[26]. - The loss before tax for the period was HK$46,193,000, compared to a loss of HK$4,911,000 in the same period of 2021, reflecting a worsening financial performance[106]. - The loss per share for the period was 11.5 cents, compared to 1.2 cents in the previous year, indicating a larger loss per share[106]. - The total equity as at 30 September 2022 was HK$28,948,000, a decrease from HK$75,141,000 as at 31 March 2022, reflecting a decline of 61%[116]. - The company reported retained profits of HK$(59,455,000) as of 30 September 2022, compared to HK$(13,262,000) as of 31 March 2022, indicating a worsening of 348%[116]. Revenue and Income - Other income increased from approximately HK$2,193,000 during the Comparative Period to approximately HK$5,345,000 during the Period[18]. - The increase in other income was mainly due to a non-recurring government grant of approximately HK$2,152,000 under the Employment Support Scheme launched by the Hong Kong SAR Government[18]. - The Group's overall revenue decreased by approximately 64.5% to approximately HK$137,316,000 during the Period, compared to approximately HK$412,700,000 during the Comparative Period[27]. - Reportable segment revenue for foundation services was HK$137,316,000, a decrease of 63.5% from HK$376,098,000 in the same period last year[141]. - The group did not report any revenue from trading of electronic devices for the six months ended 30 September 2022, down from HK$36,602,000 in the same period last year[152]. Expenses and Costs - The increase in project costs was attributed to unexpected changes in on-site arrangements and work schedules due to the fifth wave outbreak of COVID-19 during the Period[14]. - Administrative and other operating expenses decreased by 14.9% from approximately HK$18,303,000 during the Comparative Period to approximately HK$15,578,000 during the Period[21]. - Employee benefits expense, including salaries and bonuses, decreased to HK$25,914,000 in 2022 from HK$35,310,000 in 2021, a decline of about 26%[164]. - Costs of construction materials decreased to HK$39,059,000 in 2022 from HK$122,176,000 in 2021, representing a reduction of approximately 68%[164]. Assets and Liabilities - As of September 30, 2022, total assets were HK$488,033,000, down from HK$586,124,000 as of March 31, 2022, showing a decrease in total assets[110]. - Current liabilities amounted to HK$461,094,000, a decrease from HK$489,598,000 as of March 31, 2022, indicating a reduction in short-term obligations[110]. - Net assets as of September 30, 2022, were HK$28,948,000, significantly lower than HK$75,141,000 as of March 31, 2022, reflecting a decline in equity[112]. - The Group's total debts as of September 30, 2022, were approximately HK$261,565,000, down from approximately HK$281,749,000 as of March 31, 2022[44]. - The Group's trade payables decreased to approximately HK$1,697,000 as of 30 September 2022, down from approximately HK$17,192,000 as of 31 March 2022[182]. Cash Flow and Financing - For the six months ended 30 September 2022, net cash generated from operating activities was HK$23,055,000, compared to HK$8,134,000 for the same period in 2021, representing an increase of 184%[118]. - The net cash used in financing activities was HK$(18,718,000) for the six months ended 30 September 2022, compared to net cash generated of HK$53,508,000 in the same period of 2021[118]. - The company raised bank borrowings of HK$106,879,000 during the period, down from HK$217,000,000 in the previous year, a decrease of 51%[118]. - The carrying amount of the Unsecured Loan was approximately HK$93,788,000 as of 30 September 2022, compared to approximately HK$92,894,000 as of 31 March 2022[194]. Corporate Governance and Compliance - The Board does not recommend the payment of an interim dividend to shareholders for the period[69]. - The Company has complied with the Corporate Governance Code provisions during the period, except for the establishment of a standalone internal audit department[71]. - The audit committee, comprising three independent non-executive directors, has reviewed the interim financial statements for the period[99]. - The Board regularly reviews the effectiveness of the Group's internal control system, including financial, operational, and compliance controls[80]. Future Outlook and Strategy - The Group remains optimistic about the foundation industry in Hong Kong, supported by government plans to increase land supply for housing development over the next five years[34]. - The Group will continue to explore suitable investment opportunities to broaden its revenue base and maximize returns to shareholders[40]. - The Group plans to monitor global economic developments closely and adjust its business strategies as necessary[41].

Financial Performance - The Group's overall revenue decreased by approximately 19.5% to approximately HK$751,767,000 for the year ended 31 March 2022, compared to approximately HK$933,797,000 in 2021[10]. - The loss attributable to owners of the Company amounted to approximately HK$18,346,000 for the year ended 31 March 2022, compared to a profit of approximately HK$1,071,000 in 2021[10]. - The overall gross profit decreased by 28.6% from approximately HK$41,653,000 for the year ended 31 March 2021 to approximately HK$29,748,000 for the year ended 31 March 2022, with the gross profit margin decreasing from approximately 4.5% to 4.0%[21]. - The Group's other income decreased from approximately HK$12,699,000 for the year ended 31 March 2021 to approximately HK$8,084,000 for the year ended 31 March 2022, primarily due to the absence of a non-recurring government grant received in the previous year[21]. - Administrative and other operating expenses increased by 6.5% from approximately HK$43,626,000 for the year ended 31 March 2021 to approximately HK$46,441,000 for the year ended 31 March 2022[21]. - The Group reported a net loss of approximately HK$18,346,000 for the year ended 31 March 2022, compared to a net profit of approximately HK$1,071,000 in 2021[24]. - Total debts of the Group increased to approximately HK$281,749,000 as at 31 March 2022, up from approximately HK$201,952,000 in 2021[24]. - The gearing ratio of the Group as at 31 March 2022 was approximately 375.0%, significantly up from approximately 216.0% in 2021[30]. - The Group's finance costs increased from approximately HK$7,513,000 in 2021 to approximately HK$8,825,000 in 2022, primarily due to increased interest payments to banks[24]. - The current ratio of the Group remained stable at approximately 1.2 as at 31 March 2022[30]. Market Outlook and Strategy - The COVID-19 pandemic has created a challenging operating environment, exacerbated by supply chain disruptions and workforce shortages[10]. - The Group will adopt different tendering strategies and foster long-term relationships with quality customers to maintain competitiveness in the market[10]. - The Hong Kong Government's focus on increasing land supply and housing development is expected to positively impact the foundation industry in the medium to long term[10]. - The Group remains prudently optimistic about the prospects of the foundation industry in Hong Kong despite current challenges[15]. - The Group aims to balance risks and opportunities in the foundation industry while pursuing its core business[15]. - The Board will closely monitor developments in the global economy and adjust business strategies as necessary[15]. - The Group will continue to explore suitable investment opportunities to broaden its revenue base[14]. - The Group commenced trading of electronic devices during the year ended 31 March 2022 to diversify income streams and business risks[19]. Corporate Governance - The Group has complied with all applicable code provisions of the Corporate Governance Code as of March 31, 2022[41]. - The Board consists of five members, including two Executive Directors and three Independent Non-executive Directors[47]. - The Group has adopted a Board Diversity Policy considering factors such as gender, age, and professional experience[49]. - The Audit Committee, composed of three independent non-executive directors, held two meetings during the year ended March 31, 2022[72]. - The company has adopted a board diversity policy aiming for gender parity and appropriate representation of different ethnic backgrounds[55]. - The company has complied with the Listing Rules regarding the appointment of independent non-executive directors, confirming their independence[62]. - The chairman, Mr. Chen Rongsheng, oversees overall management, including daily operations and strategic planning[69]. - The company arranged seminars for directors as continuing professional training for corporate governance and compliance purposes[68]. - The Audit Committee is responsible for reviewing the company's financial information and overseeing risk management and internal control systems[71]. - The Nomination Committee will monitor the implementation of the Board Diversity Policy and report annually[56]. Environmental, Social, and Governance (ESG) Initiatives - The Group's ESG Report for the year ended March 31, 2022, demonstrates its commitment to sustainable development by balancing environmental, social, and economic benefits for stakeholders[148]. - The Board and management dedicated substantial time to evaluating ESG-related risks and formulating policies to address these risks during the fiscal year[150]. - The Group has identified key ESG issues through stakeholder engagement and materiality assessments, ensuring that significant impacts on the business are covered[150]. - The Group is committed to minimizing adverse environmental impacts by complying with legal requirements and reducing pollution from its operations[162]. - The Group aims to reduce waste and resource consumption while promoting recycling of construction materials in its processes[165]. - The Group has received major recognitions for its environmental management systems, including ISO 50001:2018 and ISO 14001:2015 certifications[157][158]. - The Group's greenhouse gas (GHG) emissions for the year ended March 31, 2022, totaled 5,838.4 tonnes, a decrease of 10.9% from 6,552.1 tonnes in 2021[183]. - Total construction waste disposed of at landfills was approximately 40,242 tonnes, a significant decrease of 76.8% from 172,840 tonnes in 2021[187]. - The Group achieved its GHG emission target of 7,000 tonnes for the year ended March 31, 2022[185]. - The Group emphasizes environmental responsibility by implementing management policies to reduce waste and avoid overuse of resources[199].