Company Information [Board of Directors and Committee Composition](index=5&type=section&id=Board%20of%20Directors%20and%20Committee%20Composition) The company's board of directors comprises executive and independent non-executive directors, with independent directors chairing or serving on key committees to ensure governance independence and professionalism - The Board of Directors consists of three executive directors and four independent non-executive directors, with Mr. Tung Hiu Man serving as Chairman[8](index=8&type=chunk) - The Audit, Remuneration, and Nomination Committees all include independent non-executive directors, ensuring the independence of corporate governance[8](index=8&type=chunk) - Ms. Kwan Shuk Ki is the Company Secretary, and the registered office is located at Unit A, 26/F, EGL Plaza, 83 Hung To Road, Kwun Tong, Kowloon, Hong Kong[8](index=8&type=chunk) Chairman's Statement [Annual Operating Review](index=6&type=section&id=Annual%20Operating%20Review) The Group achieved a 29.5% revenue growth to HKD 669.5 million despite a complex operating environment, but reported a HKD 9.9 million loss attributable to owners due to H1 supply chain disruptions - The operating environment for the year was complex, facing challenges such as geopolitical tensions, trade protectionism, and cautious consumers[9](index=9&type=chunk) - Total Revenue Comparison | Indicator | 2025 (HKD thousands) | 2024 (HKD thousands) | Growth Rate | | :--- | :--- | :--- | :--- | | Total Revenue | 669,500 | 516,800 | 29.5% | - Loss attributable to owners of the company was **HKD 9.9 million**, primarily due to supply chain disruptions at the Asian production center and production cost pressures in the first half of the year[9](index=9&type=chunk) [Strategy and Outlook](index=6&type=section&id=Strategy%20and%20Outlook) The Group is implementing a comprehensive feedback strategy focusing on cost optimization, operational efficiency, and customer-centricity, while advancing digitalization and ESG principles for sustainable growth - Implementation of a comprehensive feedback strategy, focusing on cost optimization, operational efficiency, and customer-centric execution[10](index=10&type=chunk) - Environmental, Social, and Governance (ESG) principles guide the strategy, expanding the use of eco-friendly materials, improving energy efficiency, and enhancing operational traceability[10](index=10&type=chunk) - Looking ahead, the Group will continue to pursue market expansion, accelerate product innovation, enhance digitalization capabilities, and seek long-term sustainable growth[10](index=10&type=chunk) Management Discussion and Analysis [Operating Results and Financial Review](index=7&type=section&id=Operating%20Results%20and%20Financial%20Review) Total revenue increased by 29.5% to HKD 669.5 million, driven by international exports and domestic sales, while gross margin declined and loss per share narrowed - Revenue Comparison | Indicator | 2025 (HKD thousands) | 2024 (HKD thousands) | | :--- | :--- | :--- | | Revenue | 669,450 | 516,783 | - Total revenue increased by **29.5%** year-on-year, driven by sales growth in international export markets, the China domestic market, and retail business[14](index=14&type=chunk) - Distribution Expenses Comparison | Indicator | 2025 (HKD thousands) | 2024 (HKD thousands) | Change (HKD thousands) | Percentage Change | | :--- | :--- | :--- | :--- | :--- | | Advertising and Promotion Fees | 19,073 | 15,960 | 3,113 | 19.5% | | Freight and Handling Fees | 6,515 | 3,160 | 3,355 | 106.2% | | Store Management Fees | 14,637 | 8,824 | 5,813 | 65.9% | | Store Rent and Operating Expenses | 8,586 | 10,296 | (1,710) | (16.6%) | | Staff Costs | 12,017 | 12,069 | (52) | (0.4%) | | Other Distribution Expenses | 4,999 | 4,998 | 1 | 0.0% | | **Total** | **65,827** | **55,307** | **10,520** | **19.0%** | - Gross profit margin decreased by **2.2 percentage points to 18.3%**, primarily due to pricing pressure in the manufacturing segment and increased production and procurement costs[17](index=17&type=chunk) - Administrative Expenses Comparison | Indicator | 2025 (HKD thousands) | 2024 (HKD thousands) | Change (HKD thousands) | Percentage Change | | :--- | :--- | :--- | :--- | :--- | | Auditor's Remuneration | 1,127 | 1,096 | 31 | 2.8% | | Depreciation and Amortisation | 3,411 | 5,509 | (2,098) | (38.1%) | | Entertainment and Travel Expenses | 3,362 | 2,941 | 421 | 14.3% | | Exchange Loss | 2 | 715 | (713) | (99.7%) | | Legal and Professional Fees | 2,535 | 2,976 | (441) | (14.8%) | | Staff Costs | 52,384 | 53,380 | (996) | (1.9%) | | Office Expenses | 4,232 | 3,875 | 357 | 9.2% | | Other Administrative Expenses | 6,346 | 6,306 | 40 | 0.6% | | **Total** | **73,399** | **76,798** | **(3,399)** | **(4.4%)** | - Key Profitability Indicators Comparison | Indicator | 2025 (HKD thousands) | 2024 (HKD thousands) | | :--- | :--- | :--- | | EBITDA | 2,851 | 1,561 | | Loss Before Tax | (9,872) | (13,310) | | Loss Per Share (HK cents) | (2.2) | (2.8) | - Operating Efficiency Indicators Comparison | Indicator | 2025 | 2024 | | :--- | :--- | :--- | | Inventory Turnover Days | 58 days | 71 days | | Trade Receivables Turnover Days | 57 days | 61 days | [Business Review](index=10&type=section&id=Business%20Review) The Group demonstrated resilience through customer-centric strategies, achieving sales growth in North America and other markets despite production cost increases in Vietnam and supply chain challenges - The Group demonstrated resilience through customer-centric and value-oriented business strategies, leveraging sustained demand in North America and strategically shifting focus to Canada and other lower-risk international markets[29](index=29&type=chunk) - Vietnam operations faced capacity constraints and order backlogs due to inefficient logistics in the first half, incurring additional air freight costs, while rising minimum wages increased production costs[29](index=29&type=chunk) - China's domestic manufacturing services secured new business from emerging local brands by adopting a flexible small-batch production model, with sales increasing by **30.9% to HKD 74.1 million**[30](index=30&type=chunk)[32](index=32&type=chunk) - Sales by Market Comparison | Market | 2025 (HKD thousands) | 2024 (HKD thousands) | Growth Rate | | :--- | :--- | :--- | :--- | | Asia Market | 332,500 | 277,700 | 19.7% | | North America Market | 311,900 | 220,875 | 41.2% | | Europe and Other Markets | 25,100 | 18,196 | 37.9% | - Total retail business sales increased by **15.8% to HKD 233.6 million**, primarily driven by online sales growth, with retail segment operating profit rising to **HKD 9.6 million** (2024: HKD 8.5 million)[36](index=36&type=chunk)[37](index=37&type=chunk) [Outlook](index=11&type=section&id=Outlook) The Group plans to enhance core capabilities, strengthen customer relationships, and expand beyond the US market, leveraging its dual-base manufacturing model and digital-first retail strategy for sustainable growth - Facing macroeconomic headwinds, the Group will enhance core capabilities, strengthen customer relationships, and strategically expand into markets beyond the United States[38](index=38&type=chunk) - The dual-base manufacturing model (China and Vietnam) provides flexible strategic adjustment capabilities, with plans to strengthen the local procurement network in Vietnam, maintain cost control, and improve operational efficiency[38](index=38&type=chunk) - Internationally, the Group will strengthen business development in the Asia-Pacific region (Japan and Australia) and Europe; domestically, it will continue to explore growth opportunities in the Greater China market and refine its digital-first retail model, prioritizing live streaming and social commerce[38](index=38&type=chunk)[39](index=39&type=chunk) - Domestic production and sales capabilities will be repositioned towards higher-margin and value-added services, such as design and vertically integrated solutions[39](index=39&type=chunk) [Capital Expenditure and Financial Resources](index=12&type=section&id=Capital%20Expenditure%20and%20Financial%20Resources) Capital expenditure for the year was HKD 3.1 million, with the Group maintaining a sound financial position, HKD 240.5 million in cash, and a 19.6% gearing ratio - Capital Expenditure Comparison | Indicator | 2025 (HKD thousands) | 2024 (HKD thousands) | | :--- | :--- | :--- | | Capital Expenditure | 3,100 | 2,100 | - Liquidity and Financial Resources Comparison | Indicator | 2025 (HKD thousands) | 2024 (HKD thousands) | | :--- | :--- | :--- | | Cash Level | 240,500 | 269,300 | | Pledged Bank Deposits | 104,000 | 101,100 | | Total Bank Borrowings | 74,100 | 51,400 | | Gearing Ratio | 19.6% | N/A | - The Group adopts a prudent policy to hedge exchange rate and interest rate risks, and regularly reviews net foreign exchange exposure to manage the impact of currency fluctuations[43](index=43&type=chunk)[44](index=44&type=chunk) - Interest rate risk primarily arises from interest-bearing borrowings, which the Group monitors regularly to avoid excessively significant volatility risks[45](index=45&type=chunk) [Human Resources and Litigation](index=12&type=section&id=Human%20Resources%20and%20Litigation) The Group employs approximately 1,500 staff with HKD 136 million in employee benefits, and is involved in one ongoing litigation detailed in note 33 to the consolidated accounts - The Group employs approximately **1,500 staff**, with total annual employee benefits expenses of **HKD 136 million** (2024: HKD 127.3 million)[46](index=46&type=chunk) - The company is committed to attracting and retaining talented employees, offering career development opportunities, job satisfaction, and competitive remuneration packages[46](index=46&type=chunk) - The current year involves one litigation, with specific details provided in Note 33 to the consolidated accounts[47](index=47&type=chunk) Corporate Governance Report [A. Directors](index=13&type=section&id=A.%20Directors) The Board is responsible for strategy and oversight, holding at least four annual meetings, with distinct roles for Chairman, Vice Chairman, and Managing Director to ensure power balance - The Board of Directors holds at least four meetings annually, with six board meetings and one general meeting held during the current year[50](index=50&type=chunk) - The positions of Chairman, Vice Chairman, and Managing Director are held by different individuals, ensuring a balance of power and effective execution of board decisions[52](index=52&type=chunk) - The composition of the Board is regularly reviewed to ensure appropriate professional knowledge, skills, and experience, and confirmations of independence have been received from independent non-executive directors[53](index=53&type=chunk)[54](index=54&type=chunk) - All directors comply with the Model Code for Securities Transactions by Directors of Listed Issuers and receive continuous professional development training[55](index=55&type=chunk) [B. Delegation of Board Authority](index=15&type=section&id=B.%20Delegation%20of%20Board%20Authority) The Board delegates specific responsibilities to the Audit, Remuneration, and Nomination Committees, each with defined written terms of reference to ensure effective oversight - The Board has established an Audit Committee, Remuneration Committee, and Nomination Committee to oversee specific areas, each with defined written terms of reference[59](index=59&type=chunk) - The Audit Committee is authorized to perform corporate governance functions, including formulating and reviewing corporate governance policies, overseeing director and senior management training, and ensuring compliance with laws and regulations[60](index=60&type=chunk) [C. Nomination Committee](index=16&type=section&id=C.%20Nomination%20Committee) Chaired by Mr. Tung Hiu Man, the Nomination Committee reviews board structure, identifies potential directors, assesses independence, and recommends appointments, re-election, and succession plans - The Nomination Committee is chaired by Mr. Tung Hiu Man, with two independent non-executive directors as members[61](index=61&type=chunk) - Its primary responsibilities include reviewing the board structure, identifying and nominating potential director candidates, assessing the independence of independent non-executive directors, and making recommendations on director appointments, re-election, and succession planning[65](index=65&type=chunk) - A board diversity policy has been adopted, considering factors such as gender, age, ethnicity, educational background, skills, and professional experience, with its effectiveness reviewed annually[62](index=62&type=chunk) - The Nomination Committee held two meetings during the year, with all members attending[66](index=66&type=chunk) [D. Remuneration Committee](index=17&type=section&id=D.%20Remuneration%20Committee) Chaired by independent non-executive director Mr. Cheung Chung Ki, the Remuneration Committee advises on and determines remuneration policies for directors and senior management based on responsibilities and market conditions - The Remuneration Committee is chaired by independent non-executive director Mr. Cheung Chung Ki, with executive director Mr. Tung Hiu Man and independent non-executive director Ms. Li Siu Mei as members[66](index=66&type=chunk) - Its main responsibilities are to advise the Board on the remuneration policy and structure for all directors and senior management, and to determine the remuneration packages for individual executive directors and senior management[66](index=66&type=chunk) - Remuneration is determined by reference to functional responsibilities, industry experience, prevailing market conditions, and the Group's performance, ensuring no director or their associates participate in determining their own remuneration[66](index=66&type=chunk) - The Remuneration Committee held one meeting during the year, with all members attending[67](index=67&type=chunk) - Senior Management Remuneration Bands (Excluding Directors) | Remuneration Band | Number of Individuals | | :--- | :--- | | HKD 500,001 to HKD 1,000,000 | 2 | | HKD 1,000,001 to HKD 1,500,000 | 2 | [E. Audit Committee](index=18&type=section&id=E.%20Audit%20Committee) Composed entirely of independent non-executive directors and chaired by Mr. Yuen Ki Lok, the Audit Committee oversees financial reporting, risk management, and internal controls, meeting three times annually - All members of the Audit Committee are independent non-executive directors, with Mr. Yuen Ki Lok, who possesses recognized accounting professional qualifications and extensive experience, serving as Chairman[70](index=70&type=chunk) - Its primary functions are to oversee the Group's financial reporting system, risk management, and internal control systems, and to review financial information and the reporting process[70](index=70&type=chunk) - The Audit Committee held three meetings during the year and conducted three independent meetings with the external auditor, reviewing financial statements, accounting principles, regulatory compliance, risk management, and internal controls[70](index=70&type=chunk) [F. Accountability and Audit](index=18&type=section&id=F.%20Accountability%20and%20Audit) The Board is responsible for fair financial statements and effective internal controls, annually reviewing risk management and internal control systems, and ensuring timely disclosure of inside information - Directors confirm their responsibility to present true and fair financial statements reflecting the Group's position and ensure appropriate accounting policies are adopted[72](index=72&type=chunk) - The Board annually reviews the effectiveness of the Group's risk management and internal control systems, covering financial, operational, and compliance controls[74](index=74&type=chunk) - The Group has established an information disclosure policy and taken reasonable measures to handle and disseminate inside information, including restricting access, prohibiting unauthorized use, and prompt disclosure[75](index=75&type=chunk)[80](index=80&type=chunk) - External Auditor's Remuneration | Services Provided | Fees (HKD thousands) | | :--- | :--- | | Audit Services | 850 | | Non-Audit Services | 277 | [G. Communication with Shareholders](index=19&type=section&id=G.%20Communication%20with%20Shareholders) The company maintains a shareholder communication policy, providing comprehensive information through reports and its website, enabling shareholders to raise inquiries and request general meetings - The company has adopted a shareholder communication policy, providing clear and comprehensive Group information through interim and annual reports, circulars, notices, and the company website[79](index=79&type=chunk) - Shareholders may request general meetings or circulate resolutions in accordance with the Companies Ordinance and may submit written questions to the Board[82](index=82&type=chunk)[83](index=83&type=chunk) - All resolutions will be voted on by poll, with results published on the company's and the Stock Exchange's websites[84](index=84&type=chunk) - The company has adopted a dividend policy aimed at allowing shareholders to share in profits while retaining sufficient reserves and liquidity for future business development[85](index=85&type=chunk) [H. Company Secretary](index=20&type=section&id=H.%20Company%20Secretary) Ms. Kwan Shuk Ki was appointed Company Secretary on October 1, 2024, and completed over 15 hours of professional training during the fiscal year - Ms. Kwan Shuk Ki was appointed Company Secretary effective October 1, 2024, and received no less than **15 hours** of relevant professional training during the fiscal year[86](index=86&type=chunk) Directors' Report [Principal Business and Financial Performance](index=21&type=section&id=Principal%20Business%20and%20Financial%20Performance) The company, an investment holding entity, primarily engages in garment manufacturing, sales, and retail, with the Board recommending a final dividend of HKD 0.5 cents per share - The company is an investment holding company, with its principal subsidiaries engaged in the manufacturing and sale of garment products, and retail of garment products[90](index=90&type=chunk) - The largest customer and the five largest customers accounted for **22%** and **52%** of total sales respectively for the year[91](index=91&type=chunk) - The Board recommends a final dividend of **HKD 0.5 cents per share** for the year ended March 31, 2025 (2024: HKD 0.5 cents per share)[92](index=92&type=chunk) - Distributable Reserves | Indicator | 2025 (HKD thousands) | 2024 (HKD thousands) | | :--- | :--- | :--- | | Accumulated Profits | 100,213 | 88,450 | [Key Risks and Uncertainties](index=21&type=section&id=Key%20Risks%20and%20Uncertainties) The Group faces risks from economic climate, key personnel loss, credit, liquidity, currency, and interest rates, mitigated by market diversification, talent retention, and hedging strategies - Key risks include economic climate and market performance (affecting consumer confidence and purchasing habits), and loss of key personnel (lack of experienced talent may hinder strategic objectives)[98](index=98&type=chunk)[99](index=99&type=chunk) - Customer credit risk is managed through credit limits, approval processes, and overdue debt collection procedures; liquidity risk is managed by monitoring cash and cash equivalents levels and bank borrowing utilization[101](index=101&type=chunk)[103](index=103&type=chunk) - Currency risk (foreign currency transactions and borrowings) is hedged through foreign currency forward contracts; interest rate risk (floating-rate borrowings) is managed through regular monitoring and hedging measures[105](index=105&type=chunk)[107](index=107&type=chunk) [Compliance and Responsibilities](index=22&type=section&id=Compliance%20and%20Responsibilities) The Group is committed to complying with relevant laws and regulations, including the Listing Rules and Corporate Governance Code, and engages with stakeholders to ensure responsible operations - The Group is committed to complying with relevant laws and regulations, including the Companies Ordinance, Listing Rules, Securities and Futures Ordinance, and Corporate Governance Code[109](index=109&type=chunk) - The Model Code for Securities Transactions by Directors of Listed Issuers has been adopted, and strict compliance with employment, human rights, labor rights, supply chain management, product liability, and anti-corruption regulations is maintained[109](index=109&type=chunk) - The Group regularly collects feedback from customers, employees, suppliers, and other stakeholders to ensure responsible operations and align with all parties' interests[110](index=110&type=chunk) - During the year, neither the company nor its subsidiaries purchased, sold, or redeemed any of the company's listed securities[112](index=112&type=chunk) [Directors and Senior Management](index=23&type=section&id=Directors%20and%20Senior%20Management) The Board comprises executive and independent non-executive directors, with details on their backgrounds and shareholdings, and a rotation policy for re-election - For the current year and up to the report date, the Board of Directors included executive directors Tung Hiu Man (Chairman), Tung Chung Man (Vice Chairman), Tung Wai Man (Managing Director), and independent non-executive directors Cheung Chung Ki, Yuen Ki Lok, Yu Wing Sang, and Li Siu Mei[114](index=114&type=chunk) - Mr. Tung Hiu Man, Mr. Cheung Chung Ki, and Mr. Yu Wing Sang will retire by rotation at the upcoming Annual General Meeting and are eligible for re-election[114](index=114&type=chunk) - The report provides detailed backgrounds, experience, and responsibilities of each director and senior management member, including Group Financial Controller Kwan Shuk Ki, Group Chief Financial Officer Cheung Yiu Shan, and Sales Director Li Ka Ki[116](index=116&type=chunk)[117](index=117&type=chunk)[118](index=118&type=chunk)[119](index=119&type=chunk)[120](index=120&type=chunk)[121](index=121&type=chunk)[122](index=122&type=chunk)[123](index=123&type=chunk)[124](index=124&type=chunk)[125](index=125&type=chunk)[127](index=127&type=chunk)[128](index=128&type=chunk) - Directors' Interests in the Company's Shares | Director Name | Capacity | Number of Issued Ordinary Shares Held | Percentage of Issued Shares | | :--- | :--- | :--- | :--- | | Tung Hiu Man | Beneficial Owner | 1,604,000 | 0.36% | | Tung Chung Man | Beneficial Owner | 3,052,400 | 0.68% | | Tung Wai Man | Beneficial Owner | 360,000 | 0.08% | | Cheung Chung Ki | Beneficial Owner | 3,844,760 | 0.85% | [Major Shareholders and Share Option Scheme](index=26&type=section&id=Major%20Shareholders%20and%20Share%20Option%20Scheme) Major shareholders include Corona Investments Limited and Webb David Michael, while the share option scheme, valid until 2028, aims to incentivize participants, with no options granted this year - Major Shareholder Holdings | Shareholder Name | Capacity | Number of Issued Ordinary Shares Held | Percentage of Issued Shares | | :--- | :--- | :--- | :--- | | Corona Investments Limited | Beneficial Owner | 150,059,268 | 33.27% | | Mr. Tung Wah Wing | Interest in Controlled Corporation | 150,059,268 | 33.27% | | Ms. Wong Fung Lin | Interest in Controlled Corporation | 150,059,268 | 33.27% | | Preferable Situation Assets Limited | Beneficial Owner | 35,778,200 | 7.93% | | Member One Limited | Beneficial Owner | 25,391,800 | 5.63% | | Webb David Michael | Interest in Controlled Corporation | 61,170,000 | 13.56% | - The company continues to operate a share option scheme designed to incentivize or reward eligible participants for their contributions to the Group, which remains effective until August 30, 2028[139](index=139&type=chunk) - The total number of shares that may be allotted and issued upon exercise of all options granted under the share option scheme shall not exceed **10%** of the company's issued share capital on the adoption date of the scheme (i.e., 46,407,755 shares)[139](index=139&type=chunk) - The total number of shares issued and to be issued upon exercise of all options granted to any single participant within any 12-month period shall not exceed **1%** of the company's issued share capital from time to time[140](index=140&type=chunk) - During the year, no share options were granted, vested, exercised, cancelled, or lapsed[144](index=144&type=chunk) [Other Disclosures](index=28&type=section&id=Other%20Disclosures) The company confirms no management contracts, independent non-executive director independence, compliance with the Corporate Governance Code, and sufficient public float, with charitable donations of HKD 21,000 - During the year, the company did not enter into or maintain any contracts concerning the management or administration of its whole business or any significant part thereof[145](index=145&type=chunk) - The company has received annual confirmations of independence from each independent non-executive director and considers all independent non-executive directors to be independent[146](index=146&type=chunk) - The company has complied with all code provisions of the Corporate Governance Code set out in Appendix C1 of the Listing Rules throughout the financial year[147](index=147&type=chunk) - The company maintains a sufficient public float, which is not less than **25%** of its issued shares[149](index=149&type=chunk) - During the year, the Group's charitable and other donations amounted to approximately **HKD 21,000**[150](index=150&type=chunk) - Deloitte Touche Tohmatsu Certified Public Accountants LLP served as the auditor for the current year and will retire, being eligible for re-election at the Annual General Meeting[151](index=151&type=chunk) Independent Auditor's Report [Opinion and Basis](index=29&type=section&id=Opinion%20and%20Basis) The independent auditor issued an unmodified opinion on the consolidated financial statements, confirming their fair presentation in accordance with HKFRS and the Hong Kong Companies Ordinance - The auditor issued an unmodified opinion on the consolidated financial statements, deeming them to present fairly, in all material respects, the Group's financial position, performance, and cash flows[153](index=153&type=chunk) - The audit was conducted in accordance with Hong Kong Standards on Auditing issued by the Hong Kong Institute of Certified Public Accountants and complied with professional ethical requirements[155](index=155&type=chunk) [Key Audit Matters](index=29&type=section&id=Key%20Audit%20Matters) Key audit matters include inventory valuation and impairment of property, plant, and equipment, involving significant management judgment and auditor assessment of estimates - Inventory valuation was identified as a key audit matter due to management's judgment and estimation involved in inventory provisions[154](index=154&type=chunk) - Inventory Carrying Value and Provision | Indicator | 2025 (HKD thousands) | 2024 (HKD thousands) | | :--- | :--- | :--- | | Inventory Carrying Value | 105,881 | 99,643 | | Inventory Provision/(Reversal) | 540 | (3,921) | - Impairment of production equipment and machinery, furniture, fixtures and equipment, leasehold improvements, and right-of-use assets was identified as a key audit matter due to its materiality and the high degree of management judgment involved[158](index=158&type=chunk) - Based on management's assessment, no impairment losses were recognized for production equipment and machinery, furniture, fixtures and equipment, leasehold improvements, and right-of-use assets for the years ended March 31, 2025 and 2024[159](index=159&type=chunk) [Directors' and Auditor's Responsibilities](index=30&type=section&id=Directors%27%20and%20Auditor%27s%20Responsibilities) Directors are responsible for preparing fair financial statements and internal controls, while the auditor aims for reasonable assurance against material misstatement, exercising professional judgment and skepticism - Directors are responsible for preparing consolidated financial statements that give a true and fair view in accordance with Hong Kong Financial Reporting Standards and the Hong Kong Companies Ordinance, and for internal controls[161](index=161&type=chunk) - The auditor's objective is to obtain reasonable assurance about whether the consolidated financial statements as a whole are free from material misstatement, whether due to fraud or error[164](index=164&type=chunk) - The auditor exercises professional judgment, maintains professional skepticism, and communicates with those charged with governance regarding the planned scope, timing of the audit, and significant audit findings[164](index=164&type=chunk) - The auditor evaluates the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by the directors[164](index=164&type=chunk) Consolidated Statement of Profit or Loss [Profit or Loss Performance](index=32&type=section&id=Profit%20or%20Loss%20Performance) For the year ended March 31, 2025, the Group reported revenue of HKD 669.45 million and a loss of HKD 11.07 million, with loss attributable to owners narrowing to HKD 9.931 million - Consolidated Statement of Profit or Loss Key Data | Indicator | 2025 (HKD thousands) | 2024 (HKD thousands) | | :--- | :--- | :--- | | Revenue | 669,450 | 516,783 | | Cost of Sales | (547,205) | (410,964) | | Gross Profit | 122,245 | 105,819 | | Other Income and Gains | 10,621 | 12,978 | | Distribution Expenses | (65,827) | (55,307) | | Administrative Expenses | (73,399) | (76,798) | | Finance Costs | (3,814) | (3,326) | | Loss Before Tax | (9,872) | (13,310) | | Loss for the Year | (11,070) | (13,989) | | Loss Attributable to Owners of the Company | (9,931) | (12,796) | | Loss Per Share (HK cents) | (2.2) | (2.8) | Consolidated Statement of Profit or Loss and Other Comprehensive Income [Comprehensive Income Performance](index=33&type=section&id=Comprehensive%20Income%20Performance) The Group reported a loss of HKD 11.07 million, with total comprehensive expense for the year significantly reduced to HKD 6.117 million, driven by revaluation gains and foreign exchange differences - Consolidated Statement of Profit or Loss and Other Comprehensive Income Key Data | Indicator | 2025 (HKD thousands) | 2024 (HKD thousands) | | :--- | :--- | :--- | | Loss for the Year | (11,070) | (13,989) | | Exchange Differences on Translation of Foreign Operations | 446 | (2,446) | | Gain on Revaluation of Property Transferred from Property, Plant and Equipment to Investment Properties | 4,507 | – | | Other Comprehensive Income/(Expense) for the Year | 4,953 | (2,446) | | Total Comprehensive Expense for the Year | (6,117) | (16,435) | | Total Comprehensive Expense Attributable to Owners of the Company | (4,978) | (15,242) | Consolidated Statement of Financial Position [Financial Position Overview](index=34&type=section&id=Financial%20Position%20Overview) The Group's total assets less current liabilities stood at HKD 378.479 million, with total equity at HKD 377.705 million, reflecting a mix of investment properties, inventory, and bank balances - Consolidated Statement of Financial Position Key Data | Indicator | 2025 (HKD thousands) | 2024 (HKD thousands) | | :--- | :--- | :--- | | **Non-Current Assets** | | | | Investment Properties | 33,022 | 28,017 | | Property, Plant and Equipment | 44,101 | 45,817 | | Right-of-use Assets | 6,769 | 10,670 | | Investment in an Associate | 404 | 451 | | **Current Assets** | | | | Inventories | 105,881 | 99,643 | | Trade and Other Receivables | 122,000 | 103,896 | | Pledged Bank Deposits | 103,964 | 101,114 | | Bank Balances and Cash | 136,583 | 168,162 | | **Current Liabilities** | | | | Trade and Other Payables | 86,978 | 107,785 | | Contract Liabilities | 10,905 | 5,076 | | Bank Borrowings | 74,071 | 51,392 | | **Capital and Reserves** | | | | Equity Attributable to Owners of the Company | 392,195 | 399,428 | | Non-Controlling Interests | (14,490) | (13,351) | | **Total** | **377,705** | **386,077** | Consolidated Statement of Changes in Equity [Equity Changes Overview](index=36&type=section&id=Equity%20Changes%20Overview) Total equity attributable to owners decreased to HKD 392.195 million, influenced by the year's loss, property revaluation gains, and foreign exchange differences, alongside dividend payments - Consolidated Statement of Changes in Equity Key Data | Indicator | 2025 (HKD thousands) | 2024 (HKD thousands) | | :--- | :--- | :--- | | Equity Attributable to Owners of the Company at Beginning of Year | 399,428 | 416,925 | | Loss for the Year | (9,931) | (12,796) | | Exchange Differences on Translation of Foreign Operations | 446 | (2,446) | | Gain on Revaluation of Property Transferred from Property, Plant and Equipment to Investment Properties | 4,507 | – | | Dividends Recognized as Distributed | (2,255) | (2,255) | | Equity Attributable to Owners of the Company at End of Year | 392,195 | 399,428 | - Property revaluation reserve represents the difference between the net carrying amount and the fair value, net of deferred tax, of properties transferred from property, plant and equipment to investment properties[174](index=174&type=chunk) - Statutory reserve represents amounts transferred from post-tax profits by PRC subsidiaries in accordance with relevant PRC laws, until it reaches **50%** of their registered capital[175](index=175&type=chunk) Consolidated Statement of Cash Flows [Cash Flow Overview](index=37&type=section&id=Cash%20Flow%20Overview) Net cash used in operating activities was HKD 44.294 million, while investing and financing activities generated HKD 0.755 million and HKD 12.263 million respectively, leading to a year-end cash balance of HKD 136.583 million - Consolidated Statement of Cash Flows Key Data | Indicator | 2025 (HKD thousands) | 2024 (HKD thousands) | | :--- | :--- | :--- | | Net Cash Used in Operating Activities | (44,294) | (17,708) | | Net Cash From Investing Activities | 755 | 15,161 | | Net Cash From/(Used in) Financing Activities | 12,263 | (13,403) | | Net Decrease in Cash and Cash Equivalents | (31,276) | (15,950) | | Cash and Cash Equivalents at End of Year | 136,583 | 168,162 | Notes to the Consolidated Financial Statements [1. General Information](index=39&type=section&id=1.%20General%20Information) The company is a public limited company incorporated in Hong Kong, listed on the HKEX, operating as an investment holding company with its primary business in garment manufacturing and sales - The company is a public limited company incorporated in Hong Kong and listed on The Stock Exchange of Hong Kong Limited, primarily engaged in investment holding[179](index=179&type=chunk)[181](index=181&type=chunk) - The functional currency is US dollars, but the consolidated financial statements are presented in Hong Kong dollars for the convenience of shareholders[180](index=180&type=chunk) [2. Application of New and Revised Hong Kong Financial Reporting Standards ("HKFRSs")](index=39&type=section&id=2.%20Application%20of%20New%20and%20Revised%20Hong%20Kong%20Financial%20Reporting%20Standards%20%28%22HKFRSs%22%29) Several HKFRS amendments were applied this year with no material impact on financial position, while new standards like HKFRS 18 are expected to broadly affect presentation and disclosure without altering recognition or measurement - Several amendments to Hong Kong Financial Reporting Standards were applied for the first time this year, but they had no material impact on the Group's financial position and performance[182](index=182&type=chunk) - New HKFRS 18, issued but not yet effective, is expected to have widespread effects on presentation and disclosure in the financial statements, but will not affect the recognition or measurement of items[184](index=184&type=chunk) [3. Significant Accounting Policies](index=40&type=section&id=3.%20Significant%20Accounting%20Policies) This section details the Group's significant accounting policies for preparing consolidated financial statements, covering historical cost, fair value measurement, consolidation, revenue, leases, and financial instruments - The consolidated financial statements are prepared in accordance with Hong Kong Financial Reporting Standards, the Listing Rules, and the Hong Kong Companies Ordinance, using the historical cost convention, with certain properties and financial instruments measured at fair value[185](index=185&type=chunk) - The basis of consolidation is detailed, including the assessment of control, consolidation of subsidiary accounts, and allocation of non-controlling interests[187](index=187&type=chunk)[189](index=189&type=chunk) - The equity method of accounting for investments in associates is explained, covering initial recognition, subsequent adjustments, and impairment testing[190](index=190&type=chunk)[191](index=191&type=chunk)[192](index=192&type=chunk) - Revenue recognition is based on the satisfaction of performance obligations, with revenue recognized when control of goods is transferred, involving refund liabilities and principal versus agent judgments[193](index=193&type=chunk)[194](index=194&type=chunk)[195](index=195&type=chunk) - Lease accounting policies cover both lessees (right-of-use assets, lease liabilities, short-term lease exemptions) and lessors (lease classification, rental income recognition)[196](index=196&type=chunk)[197](index=197&type=chunk)[199](index=199&type=chunk)[202](index=202&type=chunk)[205](index=205&type=chunk)[211](index=211&type=chunk)[212](index=212&type=chunk)[213](index=213&type=chunk)[214](index=214&type=chunk) - Foreign currency translation policies include the translation of foreign currency transactions, recognition of exchange differences on monetary items, and presentation of financial statements of overseas operations[216](index=216&type=chunk)[218](index=218&type=chunk) - Tax policies cover the calculation of current and deferred income tax expenses, recognition of temporary differences, and assessment of uncertainties in income tax treatment[225](index=225&type=chunk)[226](index=226&type=chunk)[227](index=227&type=chunk)[228](index=228&type=chunk) - Property, plant and equipment are stated at cost less accumulated depreciation and impairment losses, investment properties are measured at fair value, and asset impairment is assessed[229](index=229&type=chunk)[230](index=230&type=chunk)[231](index=231&type=chunk)[232](index=232&type=chunk)[233](index=233&type=chunk)[234](index=234&type=chunk) - Classification, measurement, and impairment assessment (expected credit loss model) of financial instruments are core policies, including the recognition and derecognition of financial assets and financial liabilities[238](index=238&type=chunk)[241](index=241&type=chunk)[242](index=242&type=chunk)[243](index=243&type=chunk)[244](index=244&type=chunk)[245](index=245&type=chunk)[246](index=246&type=chunk)[247](index=247&type=chunk)[248](index=248&type=chunk)[249](index=249&type=chunk)[250](index=250&type=chunk)[251](index=251&type=chunk)[252](index=252&type=chunk)[253](index=253&type=chunk)[254](index=254&type=chunk)[255](index=255&type=chunk)[256](index=256&type=chunk)[257](index=257&type=chunk)[258](index=258&type=chunk)[259](index=259&type=chunk)[260](index=260&type=chunk) [4. Critical Accounting Judgments and Key Sources of Estimation Uncertainty](index=52&type=section&id=4.%20Critical%20Accounting%20Judgments%20and%20Key%20Sources%20of%20Estimation%20Uncertainty) Key judgments and estimation uncertainties involve expected credit loss provisions for trade receivables, inventory provisions, and impairment of property, plant, and equipment, which are susceptible to future events - Key accounting judgments and sources of estimation uncertainty primarily arise from expected credit loss provisions for trade and bills receivables, inventory provisions, and impairment of production equipment and machinery, furniture, fixtures and equipment, leasehold improvements, and right-of-use assets[262](index=262&type=chunk)[263](index=263&type=chunk)[264](index=264&type=chunk)[265](index=265&type=chunk) - Inventory provisions are based on the assessment of net realizable value, considering aging analysis, market trends, and subsequent sales information[264](index=264&type=chunk) - Asset impairment assessment requires management to estimate the higher of an asset's fair value less costs of disposal and its value in use, involving judgments on future cash flow forecasts and discount rates[265](index=265&type=chunk)[266](index=266&type=chunk) - For the year ended March 31, 2025, inventory provisions amounted to **HKD 0.54 million**, and no impairment losses were recognized for production equipment and right-of-use assets[264](index=264&type=chunk)[267](index=267&type=chunk) [5. Revenue](index=54&type=section&id=5.%20Revenue) The Group's revenue, primarily from garment manufacturing, sales, and retail, totaled HKD 669.45 million, with significant contributions from China, the US, and Canada, all recognized at a point in time - Revenue by Business and Region (2025) | Business/Region | Production and Sale of Garment Products (HKD thousands) | Retail of Garment Products (HKD thousands) | Total (HKD thousands) | | :--- | :--- | :--- | :--- | | **Total** | **435,867** | **233,583** | **669,450** | | China | 74,887 | 233,583 | 308,470 | | United States | 176,066 | – | 176,066 | | Canada | 135,829 | – | 135,829 | | Other | 49,085 | – | 49,085 | - Revenue from the production and sale of garment products is recognized when control of the goods is transferred, i.e., when goods are shipped to the customer's designated location[269](index=269&type=chunk) - Revenue from the retail of garment products is recognized when control of the goods is transferred, i.e., when customers purchase the goods[270](index=270&type=chunk) - All revenue from contracts with customers is recognized within one year or less[271](index=271&type=chunk) [6. Segment Information](index=55&type=section&id=6.%20Segment%20Information) The Group operates in three segments: Asia, North America, and Europe & Other, with total revenue of HKD 669.45 million and segment profit of HKD 14.362 million, primarily from China, the US, and Canada - The Group is organized into three operating segments: Asia, North America, and Europe & Other, with principal activities being the production and sale of garment products, and retail of garment products[272](index=272&type=chunk) - Segment Revenue and Profit/(Loss) (2025) | Segment | Revenue (HKD thousands) | Segment Profit/(Loss) (HKD thousands) | | :--- | :--- | :--- | | Asia | 332,464 | 13,279 | | North America | 311,895 | 1,668 | | Europe and Other | 25,091 | (585) | | **Consolidated** | **669,450** | **14,362** | - Geographical Segment Revenue | Region | 2025 (HKD thousands) | 2024 (HKD thousands) | | :--- | :--- | :--- | | China | 308,470 | 258,911 | | United States | 176,066 | 135,620 | | Canada | 135,829 | 85,255 | | Other | 49,085 | 36,997 | | **Total** | **669,450** | **516,783** | - Non-Current Assets by Location | Location | 2025 (HKD thousands) | 2024 (HKD thousands) | | :--- | :--- | :--- | | China | 37,146 | 34,167 | | Hong Kong | 33,688 | 35,906 | | Vietnam | 13,058 | 14,431 | | **Total** | **83,892** | **84,504** | - For the year ended March 31, 2025, one external customer in North America contributed over **10%** of the Group's total sales (approximately **HKD 149 million**)[282](index=282&type=chunk) [7. Other Income and Gains](index=57&type=section&id=7.%20Other%20Income%20and%20Gains) Total other income and gains amounted to HKD 10.621 million, mainly comprising bank interest income of HKD 6.257 million and government grants of HKD 2.677 million - Other Income and Gains Comparison | Item | 2025 (HKD thousands) | 2024 (HKD thousands) | | :--- | :--- | :--- | | Bank Interest Income | 6,257 | 8,043 | | Government Grants | 2,677 | 3,623 | | Rental Income Net of Expenses | 889 | 938 | | Other Income | 798 | 365 | | Gain on Lease Termination | – | 9 | | **Total** | **10,621** | **12,978** | - Government grants primarily include special fund subsidies for brand development, upgrading and transformation, and domestic market expansion (HKD 0.163 million) and subsidies provided by the Chinese government (HKD 2.514 million)[283](index=283&type=chunk) [8. Finance Costs](index=57&type=section&id=8.%20Finance%20Costs) Total finance costs for the year were HKD 3.814 million, primarily consisting of interest on bank borrowings of HKD 3.623 million and lease liabilities of HKD 0.191 million - Finance Costs Comparison | Item | 2025 (HKD thousands) | 2024 (HKD thousands) | | :--- | :--- | :--- | | Interest on Bank Borrowings | 3,623 | 2,981 | | Interest on Lease Liabilities | 191 | 345 | | **Total** | **3,814** | **3,326** | [9. Net Impairment Losses Recognised on Financial Assets](index=58&type=section&id=9.%20Net%20Impairment%20Losses%20Recognised%20on%20Financial%20Assets) Net impairment losses recognized on financial assets amounted to HKD 0.038 million, primarily from trade and bills receivables impairment losses of HKD 0.041 million - Net Impairment Losses/(Reversals) on Financial Assets Comparison | Item | 2025 (HKD thousands) | 2024 (HKD thousands) | | :--- | :--- | :--- | | Trade and Bills Receivables | (41) | 1,025 | | Other Receivables | 3 | (6) | | **Total** | **(38)** | **1,019** | [10. Loss Before Tax](index=58&type=section&id=10.%20Loss%20Before%20Tax) The Group's loss before tax was HKD 9.872 million, after deducting directors' emoluments of HKD 8.507 million and other employee benefits of HKD 135.976 million - Loss Before Tax Major Deductions Comparison | Item | 2025 (HKD thousands) | 2024 (HKD thousands) | | :--- | :--- | :--- | | Total Directors' Emoluments | 8,507 | 10,453 | | Total Other Employee Benefits Expenses | 135,976 | 127,322 | | Auditor's Remuneration (Audit Services) | 850 | 820 | | Auditor's Remuneration (Non-Audit Services) | 277 | 276 | | Inventory Expenses Recognized as Expense | 547,205 | 410,964 | | Depreciation of Property, Plant and Equipment | 4,266 | 6,631 | | Depreciation of Right-of-use Assets | 4,643 | 4,914 | | Net Exchange Loss | 2 | 715 | [11. Directors' and Chief Executive's Emoluments](index=59&type=section&id=11.%20Directors%27%20and%20Chief%20Executive%27s%20Emoluments) Total emoluments for directors and the chief executive were HKD 8.507 million, a decrease from the prior year, with executive directors receiving salaries, benefits, and performance bonuses, and independent non-executive directors receiving fees - Total Directors' and Chief Executive's Emoluments Comparison | Indicator | 2025 (HKD thousands) | 2024 (HKD thousands) | | :--- | :--- | :--- | | Total Emoluments | 8,507 | 10,453 | - Executive Directors' Emoluments (2025) | Director Name | Fees (HKD thousands) | Salaries and Other Benefits (HKD thousands) | Performance Bonus (HKD thousands) | Retirement Benefit Scheme Contributions (HKD thousands) | Total (HKD thousands) | | :--- | :--- | :--- | :--- | :--- | :--- | | Tung Hiu Man | 190 | 2,275 | 188 | 36 | 2,689 | | Tung Chung Man | 100 | 2,210 | 188 | 36 | 2,534 | | Tung Wai Man | 100 | 2,210 | 188 | 36 | 2,534 | - Independent Non-Executive Directors' Emoluments (2025) | Director Name | Fees (HKD thousands) | | :--- | :--- | | Cheung Chung Ki | 208 | | Yau Ming Kin (Retired) | 92 | | Yuen Ki Lok | 190 | | Yu Wing Sang | 100 | | Li Siu Mei | 160 | - Performance bonuses are determined based on the Group's operating results, individual performance, and prevailing market conditions[287](index=287&type=chunk) [12. Emoluments of Five Highest Paid Individuals](index=60&type=section&id=12.%20Emoluments%20of%20Five%20Highest%20Paid%20Individuals) Excluding directors, the two highest-paid employees received total emoluments of HKD 2.123 million, primarily from salaries and benefits, with no performance bonuses paid this year - Emoluments of Five Highest Paid Employees (Non-Directors) Comparison | Item | 2025 (HKD thousands) | 2024 (HKD thousands) | | :--- | :--- | :--- | | Salaries and Other Benefits | 2,105 | 2,139 | | Performance-Related Bonuses | – | 228 | | Retirement Benefit Scheme Contributions | 18 | 26 | | **Total** | **2,123** | **2,393** | - The five highest-paid individuals in the Group include three directors, with the remaining two employees having remuneration in the range of **HKD 1,000,001 to HKD 1,500,000**[291](index=291&type=chunk) - In both years, the Group did not pay any joining or leaving compensation to any director, chief executive, or the five highest-paid employees[291](index=291&type=chunk) [13. Income Tax Expense](index=60&type=section&id=13.%20Income%20Tax%20Expense) Total income tax expense was HKD 1.198 million, mainly from Hong Kong profits tax and PRC corporate income tax, with PRC subsidiaries benefiting from preferential tax rates for small-profit enterprises - Income Tax Expense Comparison | Item | 2025 (HKD thousands) | 2024 (HKD thousands) | | :--- | :--- | :--- | | Current Tax (Hong Kong) | (1,081) | (873) | | Current Tax (China) | (201) | (196) | | Over-provision in Prior Years | 108 | 227 | | Deferred Tax | (24) | 163 | | **Total** | **(1,198)** | **(679)** | - Hong Kong profits tax is calculated at a rate of **16.5%**, with eligible entities' first **HKD 2 million** of assessable profits taxed at **8.25%**[292](index=292&type=chunk) - The tax rate for most Chinese subsidiaries remains at **25%**, with eligible small-profit enterprises enjoying preferential tax treatment[293](index=293&type=chunk)[294](index=294&type=chunk) - Reconciliation of Income Tax Expense to Loss Before Tax (2025) | Item | HKD thousands | | :--- | :--- | | Loss Before Tax | (9,872) | | At Hong Kong Profits Tax Rate of 16.5% | 1,629 | | Tax Effect of Non-Deductible Expenses for Taxable Profit Calculation | (1,966) | | Tax Effect of Non-Taxable Income for Taxable Profit Calculation | 1,610 | | Tax Effect of Unrecognized Tax Losses | (5,662) | | Utilisation of Previously Unrecognized Tax Losses | 2,260 | | Over-provision in Prior Years | 108 | | Effect of Different Tax Rates Used by Subsidiaries Operating in Other Jurisdictions | 656 | | Effect of Two-Tiered Profits Tax Regime | 165 | | Tax Concession | 2 | | **Income Tax Expense** | **(1,198)** | [14. Dividends](index=62&type=section&id=14.%20Dividends) The Group recognized a final dividend of HKD 0.5 cents per share, totaling HKD 2.255 million, proposed for approval and payable on September 22, 2025 - Dividends Recognized as Distributed Comparison | Item | 2025 (HKD thousands) | 2024 (HKD thousands) | | :--- | :--- | :--- | | Final Dividend (HKD 0.5 cents per share) | 2,255 | 2,255 | - The Board recommends a final dividend of **HKD 0.5 cents per share** for the year ended March 31, 2025, which, subject to shareholders' approval, will be paid on September 22, 2025[297](index=297&type=chunk) [15. Basic and Diluted Loss Per Share](index=62&type=section&id=15.%20Basic%20and%20Diluted%20Loss%20Per%20Share) Basic and diluted loss per share attributable to owners narrowed to HKD 2.2 cents, with no diluted loss per share presented due to the absence of potential ordinary shares - Loss Per Share Comparison | Indicator | 2025 | 2024 | | :--- | :--- | :--- | | Loss for the Year Attributable to Owners of the Company (HKD thousands) | (9,931) | (12,796) | | Weighted Average Number of Ordinary Shares in Issue During the Year | 451,067,557 | 451,067,557 | | Basic and Diluted Loss Per Share (HK cents) | (2.2) | (2.8) | - As there were no potential ordinary shares in issue for the years ended March 31, 2025 and 2024, diluted loss per share is not presented[298](index=298&type=chunk) [16. Property, Plant and Equipment](index=63&type=section&id=16.%20Property%2C%20Plant%20and%20Equipment) Net book value of property, plant, and equipment was HKD 44.101 million, with additions of HKD 3.122 million and transfers to investment properties of HKD 1.723 million, and no impairment losses recognized - Property, Plant and Equipment Net Book Value Comparison | Indicator | 2025 (HKD thousands) | 2024 (HKD thousands) | | :--- | :--- | :--- | | Net Book Value | 44,101 | 45,817 | - Additions to property, plant and equipment amounted to **HKD 3.122 million**, and transfers to investment properties amounted to **HKD 1.723 million** during the year[299](index=299&type=chunk) - As of March 31, 2025, the Group pledged buildings with a net book value of **HKD 31.32 million** (2024: HKD 32.791 million) to secure general banking facilities[300](index=300&type=chunk) - Depreciation is calculated on a straight-line basis at annual rates ranging from **4% to 33.3%**[300](index=300&type=chunk) - Based on management's assessment, no impairment losses were recognized for property, plant and equipment and right-of-use assets for the years ended March 31, 2025 and 2024[302](index=302&type=chunk) [17. Right-of-use Assets](index=65&type=section&id=17.%20Right-of-use%20Assets) Net book value of right-of-use assets decreased to HKD 6.769 million, with additions of HKD 0.101 million and reductions due to lease terminations of HKD 4.554 million - Right-of-use Assets Net Book Value Comparison | Indicator | 2025 (HKD thousands) | 2024 (HKD thousands) | | :--- | :--- | :--- | | Net Book Value | 6,769 | 10,670 | - Additions to right-of-use assets amounted to **HKD 0.101 million**, reductions due to lease terminations amounted to **HKD 4.554 million**, and transfers to investment properties amounted to **HKD 0.231 million** during the year[303](index=303&type=chunk) - The Group leases various retail shops, offices, and warehouses, with lease terms ranging from **2 to 5 years**[303](index=303&type=chunk) - Short-term lease expenses not included in the measurement of lease liabilities for the year amounted to **HKD 1.398 million** (2024: HKD 0.939 million)[303](index=303&type=chunk) [18. Investment Properties](index=66&type=section&id=18.%20Investment%20Properties) Fair value of investment properties increased to HKD 33.022 million, with fair value gains recognized in profit or loss and other comprehensive income, valued by independent professionals using the income approach - Investment Properties Fair Value Comparison | Indicator | 2025 (HKD thousands) | 2024 (HKD thousands) | | :--- | :--- | :--- | | Fair Value | 33,022 | 28,017 | - Fair value gains of **HKD 0.387 million** were recognized in profit or loss, and **HKD 4.507 million** in other comprehensive income during the year[310](index=310&type=chunk) - Investment properties are located in Zhongshan City, Guangdong Province, China, currently used as factories and offices, held under medium-term leasehold land[310](index=310&type=chunk) - Fair value is determined by independent professional valuers using the income approach, with the key input being the rental value per square meter[311](index=311&type=chunk)[312](index=312&type=chunk) [19. Investment in an Associate](index=67&type=section&id=19.%20Investment%20in%20an%20Associate) Investment in an associate totaled HKD 0.404 million, representing a 25% stake in Hengli Garment Technology Company Limited in Vietnam, with the Group's share of loss at HKD 0.047 million - Investment in an Associate Comparison | Indicator | 2025 (HKD thousands) | 2024 (HKD thousands) | | :--- | :--- | :--- | | Cost of Investment in an Associate | 776 | 776 | | Share of Post-Acquisition Losses | (372) | (325) | | **Total** | **404** | **451** | - The Group holds a **25%** interest in Hengli Garment Technology Company Limited, an associate located in Vietnam, primarily engaged in garment manufacturing and processing[313](index=313&type=chunk) - The Group's share of loss from the associate for the year was **HKD 0.047 million** (2024: profit of HKD 0.018 million)[314](index=314&type=chunk) [20. Particulars of Principal Subsidiaries of the Company](index=68&type=section&id=20.%20Particulars%20of%20Principal%20Subsidiaries%20of%20the%20Company) The company's principal subsidiaries, including Starwin (Hong Kong) Limited and Zhongshan Tungtex Silk Garment Co., Ltd., are wholly-owned and engage in property investment, garment trading, production, and retail - Principal Subsidiaries Details | Subsidiary Name | Place of Incorporation/Registration and Operation | Percentage of Equity Interest Held by the Company (2025) | Principal Business | | :--- | :--- | :--- | :--- | | Starwin (Hong Kong) Limited | Hong Kong | 100% (Indirect) | Property Investment | | Tungtex International Limited | Hong Kong | 100% (Indirect) | Garment Trading | | Tungtex Trading Limited | Hong Kong | 100% (Direct) | Garment Trading | | Zhongshan Tungtex Silk Garment Co., Ltd. | China | 100% (Indirect) | Garment Production | | Shenzhen Baiduoer Fashion Co., Ltd. | China | 100% (Indirect) | Garment Retail | | Ningbo Yuntu Fashion Co., Ltd. | China | 100% (Indirect) | Garment Retail | | Ningbo Yunshang Fashion Co., Ltd. | China | 100% (Indirect) | Garment Retail | | Tungtex Fashions (Vietnam) Limited | Vietnam | 100% (Indirect) | Garment Production | - Ningbo Yunshang Fashion Co., Ltd. was incorporated during the year, primarily engaged in garment retail[315](index=315&type=chunk) [21. Deferred Taxation](index=69&type=section&id=21.%20Deferred%20Taxation) Deferred tax liabilities amounted to HKD 0.389 million, primarily from accelerated tax depreciation, with unrecognised deferred tax assets for unused tax losses of HKD 405 million due to uncertain future profitability - Deferred Tax Liabilities Comparison | Indicator | 2025 (HKD thousands) | 2024 (HKD thousands) | | :--- | :--- | :--- | | Deferred Tax Liabilities | (389) | (365) | - The Group has approximately **HKD 405 million** (2024: HKD 410 million) of unused tax losses available to offset future profits, but no deferred tax assets have been recognized due to the unpredictable trend of future profits[318](index=318&type=chunk) - Unrecognized tax losses include those that can be carried forward for one to five years and up to twenty years, with approximately **HKD 39 million** of losses expiring in the current year[318](index=318&type=chunk) - No deferred tax provision has been made for the accumulated profits of PRC subsidiaries, as the Group controls the timing of the reversal of temporary differences[319](index=319&type=chunk) [22. Inventories](index=69&type=section&id=22.%20Inventories) Total inventories amounted to HKD 105.881 million, primarily comprising finished goods of HKD 72.823 million, raw materials of HKD 24.133 million, and work-in-progress of HKD 8.925 million - Inventory Composition Comparison | Item | 2025 (HKD thousands) | 2024 (HKD thousands) | | :--- | :--- | :--- | | Raw Materials | 24,133 | 25,146 | | Work-in-Progress | 8,925 | 9,296 | | Finished Goods | 72,823 | 65,201 | | **Total** | **105,881** | **99,643** | [23. Trade and Other Receivables](index=70&type=section&id=23.%20Trade%20and%20Other%20Receivables) Total trade and other receivables were HKD 122 million, with trade and bills receivables at HKD 104.196 million, and credit terms ranging from 14 to 90 days - Trade and Other Receivables Comparison | Item | 2025 (HKD thousands) | 2024 (HKD thousands) | | :--- | :--- | :--- | | Trade and Bills Receivables (Net of Provision) | 104,196 | 86,379 | | Deposits, Prepayments and Other Receivables | 17,804 | 17,517 | | **Total** | **122,000** | **103,896** | - The Group grants credit periods to customers ranging from **14 days to 90 days**[322](index=322&type=chunk) - Aging Analysis of Trade and Bills Receivables (2025) | Aging | HKD thousands | | :--- | :--- | | 0–30 Days | 87,794 | | 31–60 Days | 2,433 | | 61–90 Days | 12,897 | | Over 90 Days | 1,072 | | **Total** | **104,196** | - As of March 31, 2025, the balance of trade and bills receivables included overdue receivables totaling **HKD 10.498 million**, of which **HKD 0.497 million** were overdue for **90 days or more** but not considered in default[323](index=323&type=chunk) - Foreign Currency Trade and Other Receivables Comparison | Currency | 2025 (HKD thousands) | 2024 (HKD thousands) | | :--- | :--- | :--- | | HKD | 91 | 77 | | EUR | 14 | 15 | | RMB | – | 5 | | **Total** | **105** | **97** | [24. Pledged Bank Deposits and Bank Balances and Cash](index=71&type=section&id=24.%20Pledged%20Bank%20Deposits%20and%20Bank%20Balances%20and%20Cash) Pledged bank deposits totaled HKD 103.964 million, and bank balances and cash were HKD 136.583 million, with interest rates ranging from 0.1% to 5.25% per annum - Pledged Bank Deposits and Bank Balances and Cash Comparison | Item | 2025 (HKD thousands) | 2024 (HKD thousands) | | :--- | :--- | :--- | | Pledged Bank Deposits | 103,964 | 101,114 | | Bank Balances and Cash | 136,583 | 168,162 | - Market interest rates for bank deposits ranged from **0.1% to 5.15%** per annum, and for pledged bank deposits from **1.9% to 5.25%** per annum[325](index=325&type=chunk) - The Group's credit risk on bank balances is limited, and no credit loss provisions have been made[326](index=326&type=chunk) - Foreign Currency Bank Balances and Cash Comparison | Currency | 2025 (HKD thousands) | 2024 (HKD thousands) | | :--- | :--- | :--- | | HKD | 34,440 | 34,903 | | RMB | 7,154 | 28,447 | | USD | 661 | 1,808 | | GBP | 19 | 19 | | EUR | 10 | 10 | | **Total** | **42,284** | **65,187** | [25. Trade and Other Payables](index=71&type=section&id=25.%20Trade%20and%20Other%20Payables) Total trade and other payables were HKD 86.978 million, including trade and bills payables of HKD 57.487 million, with average credit terms for purchases ranging from 30 to 60 days - Trade and Other Payables Comparison | Item | 2025 (HKD thousands) | 2024 (HKD thousands) | | :--- | :--- | :--- | | Trade and Bills Payables | 57,487 | 66,440 | | Other Payables, Accruals and Advance Receipts | 29,491 | 41,345 | | **Total** | **86,978** | **107,785** | - Aging Analysis of Trade and Bills Payables (2025) | Aging | HKD thousands | | :--- | :--- | | 0–30 Days | 34,485 | | 31–60 Days | 5,292 | | 61–90 Days | 4,091 | | Over 90 Days | 13,619 | | **Total** | **57,487** | - The average credit period for purchases ranges from **30 to 60 days**[329](index=329&type=chunk) - Foreign Currency Trade and Other Payables Comparison | Currency | 2025 (HKD thousands) | 2024 (HKD thousands) | | :--- | :--- | :--- | | HKD | 5,141 | 7,068 | | RMB | 13 | – | | **Total** | **5,154** | **7,068** | [26. Contract Liabilities](index=72&type=section&id=26.%20Contract%20Liabilities) Contract liabilities significantly increased to HKD 10.905 million, with HKD 4.988 million recognized as revenue during the year, and the remaining balance expected to be recognized within one year - Contract Liabilities Comparison | Item | 2025 (HKD thousands) | 2024 (HKD thousands) | | :--- | :--- | :--- | | Production, Sales and Retail of Garment Products | 10,905 | 5,076 | - Contract liabilities recorded at the beginning of the year, amounting to **HKD 4.988 million** (2024: HKD 5.34 million), were recognized as revenue during the year[331](index=331&type=chunk) - Management expects the remaining balance to be recognized as revenue within approximately one year from March 31, 2025[331](index=331&type=chunk) [27. Lease Liabilities](index=72&type=section&id=27.%20Lease%20Liabilities) Total lease liabilities amounted to HKD 2.156 million, with HKD 1.771 million due within one year, and a weighted average incremental borrowing rate of 4.21% - Lease Liabilities Maturity Profile Comparison | Maturity Period | 2025 (HKD thousands) | 2024 (HKD thousands) | | :--- | :--- | :--- | | Within One Year | 1,771 | 4,661 | | Over One Year but Not Exceeding Two Years | 180 | 1,138 | | Over Two Years but Not Exceeding Five Years | 205 | 385 | | **Total** | **2,156** | **6,184** | - The weighted average incremental borrowing rate applied to lease liabilities was **4.21%** (2024: 4.02%)[332](index=332&type=chunk) [28. Bank Borrowings](index=73&type=section&id=28.%20Bank%20Borrowings) Total bank borrowings were HKD 74.071 million, all secured, floating-rate, and due within one year, with effective interest rates ranging from 2.95% to 7.09% per annum - Bank Borrowings Composition Comparison | Item | 2025 (HKD thousands) | 2024 (HKD thousands) | | :--- | :--- | :--- | | Bank Loans | 22,667 | 20,011 | | Trust Receipt Loans | 16,748 | 13,232 | | Import Trade Loans | 34,656 | 18,149 | | **Total** | **74,071** | **51,392** | - All bank bo

[Financial Highlights](index=2&type=section&id=Financial%20Highlights) The Group achieved strong financial growth this year, with total revenue increasing by 70% to HKD 157 million and profit for the year rising over 241% to HKD 39.6 million, primarily driven by energy-saving systems and product leasing services, though adjusted profit slightly declined due to expected credit loss provisions [Five-Year Financial Summary and Performance Highlights](index=2&type=section&id=Financial%20Highlights) The Group's financial performance showed robust growth this year, with total revenue increasing by 70% year-on-year to HKD 157 million and profit for the year rising over 241% to HKD 39.6 million, primarily driven by energy-saving systems and product leasing services, though adjusted profit slightly declined due to expected credit loss provisions Five-Year Financial Summary (HKD thousands) | Indicator | 2025 | 2024 | 2023 | 2022 | 2021 | | :--- | :--- | :--- | :--- | :--- | :--- | | **Revenue** | **157,371** | **92,619** | **46,550** | **80,434** | **53,784** | | Gross Profit | 93,385 | 56,744 | 27,713 | 32,563 | 26,376 | | EBITDA | 48,301 | 20,969 | (8,617) | (341,351) | (246,211) | | **Profit/(Loss) for the Year** | **39,597** | **11,602** | **(24,014)** | **(386,905)** | **(282,534)** | | Basic Earnings/(Loss) Per Share (HK cents) | 1.04 | 0.28 | (1.05) | (22.80) | (20.01) | | **Total Assets** | **565,908** | **468,382** | **373,638** | **417,811** | **404,890** | | Total Liabilities | 372,184 | 154,272 | 246,986 | 272,170 | 350,341 | | Net Assets | 193,724 | 314,110 | 126,652 | 145,641 | 54,549 | - For the year ended March 31, 2025, the Group recorded significant growth in several key financial indicators - **Revenue**: increased by **70%** year-on-year, reaching approximately **HKD 157.4 million**[8](index=8&type=chunk) - **Gross Profit**: increased by **64.7%** year-on-year, reaching approximately **HKD 93.4 million**[8](index=8&type=chunk) - **EBITDA**: increased by **130%** year-on-year, reaching **HKD 48.3 million**[8](index=8&type=chunk) - **Profit for the Year**: increased by **241.3%** year-on-year, reaching approximately **HKD 39.6 million**[8](index=8&type=chunk) - Despite growth in multiple indicators, adjusted profit (excluding significant non-recurring items) slightly decreased from **HKD 36.3 million** in the prior year to **HKD 35.2 million**, primarily due to the impact of expected credit loss provisions for financial assets[8](index=8&type=chunk) [Chairman's Statement](index=5&type=section&id=Chairman's%20Statement) Chairman Mr. Wong Man Fai highlighted the Group's key initiatives in sustainability and innovation, including plans for a secondary listing in Malaysia to expand the investor base, advancing digital ESG vertical farming for sustainable food production, and launching the world's first ESG lighting system certified with artificial carbon credits [Chairman's Statement](index=5&type=section&id=Chairman's%20Statement) Chairman Mr. Wong Man Fai highlighted the Group's key initiatives in sustainability and innovation, including plans for a secondary listing in Malaysia to expand the investor base, advancing digital ESG vertical farming for sustainable food production, and launching the world's first ESG lighting system certified with artificial carbon credits - The company is actively preparing for a secondary listing in Malaysia, aiming to broaden its investor base and strengthen its commitment to sustainable development in the region[9](index=9&type=chunk) - The Group is committed to innovation, continuously advancing its digital ESG vertical farming project to optimize resource utilization efficiency and promote sustainable food production[9](index=9&type=chunk) - The company successfully launched the world's first ESG lighting system certified with artificial carbon credits, demonstrating its leadership in carbon footprint reduction and environmental technology[10](index=10&type=chunk) [Management Discussion and Analysis](index=6&type=section&id=Management%20Discussion%20and%20Analysis) This section provides an overview of the Group's financial performance, liquidity, capital structure, significant investments, and future strategies [Financial Review](index=6&type=section&id=Financial%20Review) This year, the Group's total revenue significantly increased by 70.0% to HKD 157.4 million, primarily driven by the substantial expansion of energy-saving leasing projects in Malaysia; gross profit rose by 64.7% to HKD 93.4 million, but the gross profit margin slightly decreased to 59.3% [Revenue and Gross Profit](index=6&type=section&id=Revenue%20and%20Gross%20Profit) Total revenue increased by 70.0% to HKD 157.4 million, primarily driven by the "Energy Saving System and Product Leasing Services" segment, which saw revenue grow from HKD 39.3 million to HKD 85.1 million, mainly from the "Light in the Dark" project in Malaysia Revenue Segment Details (HKD thousands) | Business Segment | 2025 | 2024 | | :--- | :--- | :--- | | Energy Saving System and Product Leasing Services | 85,134 | 39,322 | | - Of which: Malaysia Project | 82,814 | 36,160 | | Energy Saving Product Trading | 65,033 | 40,278 | | Consulting Services Revenue | 7,204 | 12,931 | | Renewable Energy Services Revenue | – | 88 | | **Total** | **157,371** | **92,619** | - The "Light in the Dark" project in Malaysia was the primary driver of revenue growth, completing the installation of approximately **243,000 LED lights** this year and increasing customer numbers from **81 to 170**, thereby more than doubling the segment's revenue[14](index=14&type=chunk) - The Group's gross profit margin decreased from **61.3%** in the previous year to **59.3%** this year, primarily due to reduced profit margins from trade customers[18](index=18&type=chunk) [Other Income, Expenses and Profit Analysis](index=7&type=section&id=Other%20Income%2C%20Expenses%20and%20Profit%20Analysis) This year, the Group recorded net other expenses of approximately HKD 16.9 million, a significant shift from last year's net other income of HKD 10.9 million, mainly due to expected credit loss provisions for financial assets of approximately HKD 14.4 million - A gain on modification of financial assets of approximately **HKD 39.2 million** was recognized this year due to the restructuring of trade receivables with several debtors[19](index=19&type=chunk) - Selling and distribution expenses increased from **HKD 5.6 million** to **HKD 10.1 million**, primarily due to increased advertising and promotion expenses[20](index=20&type=chunk) - Administrative expenses increased from **HKD 46.6 million** to **HKD 56.6 million**, mainly driven by an increase of approximately **HKD 12.7 million** in equity-settled share option expenses[21](index=21&type=chunk) Reconciliation of Profit for the Year to Adjusted Profit (HKD thousands) | Item | 2025 | 2024 | | :--- | :--- | :--- | | **Profit for the Year** | **39,597** | **11,602** | | Add/(Less) Significant Non-recurring/Non-operating Items: | | | | Gain on modification of financial assets | (39,253) | – | | Share-based payment expenses relating to share options | 21,117 | 8,462 | | Fair value loss on equity investments at fair value through profit or loss | 3,738 | 15,078 | | Fair value changes and amortization related to convertible bonds | 844 | (5,754) | | Others | 9,176 | 6,923 | | **Adjusted Profit for the Year** | **35,222** | **36,311** | [Liquidity, Financial Resources and Capital Structure](index=10&type=section&id=Liquidity%2C%20Financial%20Resources%20and%20Capital%20Structure) The Group's financial position faced challenges this year, with the current ratio significantly decreasing from 2.5 times to 0.9 times, indicating increased short-term solvency pressure, while total liabilities substantially increased and total equity decreased by approximately 38.3% - The Group's current ratio significantly decreased from approximately **2.5 times** as at March 31, 2024, to approximately **0.9 times** as at March 31, 2025, primarily due to a substantial increase in current liabilities[35](index=35&type=chunk) Aging Analysis of Trade Receivables (HKD millions) | Aging | March 31, 2025 | March 31, 2024 | | :--- | :--- | :--- | | Not overdue | 233.4 | 47.1 | | Overdue 1-365 days | 4.9 | 39.2 | | Overdue over 365 days | 48.8 | 117.6 | | **Total** | **287.1** | **203.9** | - The Group reached settlement agreements with several customers to restructure long-outstanding trade receivables, with the restructured outstanding amount being approximately **HKD 226.9 million**, which improved the credit risk profile of trade receivables[43](index=43&type=chunk) - The gearing ratio (total liabilities/total equity) significantly increased from **32.0%** in the prior year to **66.8%** this year, reflecting a higher level of financial leverage[57](index=57&type=chunk) [Significant Investments and Corporate Activities](index=12&type=section&id=Significant%20Investments%20and%20Corporate%20Activities) This year, the Group made a significant acquisition, increasing its equity interest in SCML, its Malaysian business operating holding company, to 88.04% for HKD 200 million, which constituted a discloseable and connected transaction - The Group acquired a **25%** equity interest in its non-wholly owned subsidiary SCML (Malaysian business holding company) for **HKD 200 million**, increasing its interest in SCML from approximately **63.04% to 88.04%**, which constituted a discloseable connected transaction[46](index=46&type=chunk) - The Group's investment in associate KSL Group is its only significant investment (exceeding **5%** of total assets), accounting for approximately **7.5%** of total assets[48](index=48&type=chunk) - The share of loss from KSL Group this year was approximately **HKD 4 million**, primarily due to a one-off loss from KSL's early settlement of trade receivables[50](index=50&type=chunk) Use of Proceeds from Convertible Bonds (HKD millions) | Intended Use | Intended Amount | Actual Use for the Year Ended March 31, 2025 | Unutilized Proceeds | | :--- | :--- | :--- | :--- | | Capital expenditures for energy-saving projects | 59.6 | 19.8 | – | | General working capital | 14.9 | – | – | | **Total** | **74.5** | **19.8** | **–** | [Future Outlook](index=16&type=section&id=Future%20Outlook) The Group's future strategic focus is clear, with plans for a secondary listing in Malaysia to enhance company value and business development, while accelerating the "Light in the Dark" project and deepening cooperation with Nestlé in vertical farming - The Group is preparing for a potential secondary listing on the Malaysian stock exchange to broaden investor access, enhance corporate reputation, and support business development in Malaysia[64](index=64&type=chunk) - In Malaysia, the Group will accelerate the deployment of the "Light in the Dark" project and continue its collaboration with Nestlé on vertical farming projects, with promising results already achieved in chilli cultivation tests[65](index=65&type=chunk) - The Group is actively expanding into new markets, including: - **Singapore**: Establishing a strategic partnership with Primech Group to jointly explore energy efficiency solutions and commercial applications of robotics technology[69](index=69&type=chunk) - **Middle East**: Discussing cooperation opportunities with local partners on energy management contracts, solar equipment procurement, and green data centers[70](index=70&type=chunk) [Directors' Report](index=18&type=section&id=Directors'%20Report) This report details the Board of Directors' composition, their interests in the company's shares, and the company's share option scheme, along with information on major customers and suppliers [Directors' and Shareholders' Interests](index=19&type=section&id=Directors'%20and%20Shareholders'%20Interests) The report details the list of Board members and their shareholdings in the company, with Chairman Mr. Wong Man Fai, through his controlled corporations and personal beneficial ownership, collectively holding approximately 56.09% of the company's shares as the controlling shareholder Interests of Directors and Chief Executive in the Company's Shares (As at March 31, 2025) | Name of Director | Nature of Interest | Number of Shares (Long Position) | Approximate Percentage of Issued Share Capital | | :--- | :--- | :--- | :--- | | Wong Man Fai | Interest in controlled corporation / Beneficial owner | 1,931,807,481 | 56.090% | | Choi Yan Yan | Spouse's interest | 1,931,807,481 | 56.090% | | Tsang Sze Wai | Beneficial owner | 68,000,000 | 1.974% | Interests of Substantial Shareholders in the Company's Shares (As at March 31, 2025) | Name of Substantial Shareholder | Nature of Interest | Number of Shares (Long Position) | Approximate Percentage of Issued Share Capital | | :--- | :--- | :--- | :--- | | Rich Gain Development Limited | Beneficial owner | 1,825,245,360 | 52.996% | | Ancient Wisdom Limited | Interest in securities of shares | 1,240,547,360 | 36.019% | | Ng Sheung Tun | Interest in controlled corporation | 1,240,547,360 | 36.019% | [Share Option Scheme](index=23&type=section&id=Share%20Option%20Scheme) The company terminated its "2015 Share Option Scheme" on November 1, 2024, and adopted a new "2024 Share Option Scheme" with a ten-year validity, aimed at incentivizing and retaining talent - The company terminated its 2015 Share Option Scheme and adopted a new **"2024 Share Option Scheme"** on November 1, 2024, with a ten-year validity, aiming to attract, retain talent, and provide additional incentives[102](index=102&type=chunk)[103](index=103&type=chunk) Summary of Share Option Movements During the Year (As at March 31, 2025) | Status | Number of Share Options | | :--- | :--- | | Outstanding at beginning of year | 124,224,680 | | Granted during the year | 166,724,000 | | Exercised during the year | (35,606,680) | | Lapsed/forfeited during the year | (26,406,000) | | **Outstanding at end of year** | **207,367,320** | [Major Customers and Suppliers](index=28&type=section&id=Major%20Customers%20and%20Suppliers) The Group's procurement and sales demonstrate high concentration, with the top five suppliers accounting for 99.1% of total purchases and the top five customers accounting for 51.3% of total sales for the year ended March 31, 2025 - Supplier concentration is high: the top five suppliers accounted for **99.1%** of total purchases, with the largest supplier accounting for **94.6%**[127](index=127&type=chunk) - Customer concentration is relatively high: the top five customers accounted for **51.3%** of total sales, with the largest customer accounting for **20.7%**[127](index=127&type=chunk) [Corporate Governance Report](index=32&type=section&id=Corporate%20Governance%20Report) This report outlines the company's commitment to maintaining high corporate governance standards, detailing its practices, board composition, committee functions, risk management, internal controls, and shareholder communication [Corporate Governance Practices and the Board](index=32&type=section&id=Corporate%20Governance%20Practices%20and%20the%20Board) The company is committed to maintaining a high level of corporate governance and has complied with most provisions of the Corporate Governance Code, with one deviation where the roles of Chairman and Chief Executive Officer are combined and held by Mr. Wong Man Fai - The company deviated from the Corporate Governance Code's provision requiring separation of the roles of Chairman and Chief Executive Officer, with Mr. Wong Man Fai holding both positions, which the Board believes contributes to more effective leadership and focus on business strategy implementation[162](index=162&type=chunk) - The Board currently comprises seven directors, including one executive director, two non-executive directors, and four independent non-executive directors, meeting the Listing Rules' requirements for the number and proportion of independent non-executive directors[155](index=155&type=chunk) Board Meeting Attendance Record (For the Year Ended March 31, 2025) | Name of Director | Board Meetings | Audit Committee | Remuneration Committee | Nomination Committee | Annual General Meeting | | :--- | :--- | :--- | :--- | :--- | :--- | | Mr. Wong Man Fai | 4/4 | – | – | – | 1/1 | | Mr. Tsang Sze Wai | 4/4 | – | – | – | 1/1 | | Ms. Choi Yan Yan | 3/3 | – | – | – | 1/1 | | Mr. Chung Koon Yan | 4/4 | 3/3 | 1/1 | 1/1 | 1/1 | | Mr. Cheung Yik Hung | 4/4 | 3/3 | 1/1 | 1/1 | 1/1 | | Dr. Wong Tze King | 4/4 | 3/3 | 1/1 | 1/1 | 0/1 | | Mr. Tong Wai Lun | 4/4 | – | – | 1/1 | 1/1 | [Board Committees](index=39&type=section&id=Board%20Committees) The Board has established Audit, Nomination, and Remuneration Committees, all primarily led by independent non-executive directors to ensure independence and professionalism - **Audit Committee**: Composed of three independent non-executive directors, its primary responsibilities include reviewing financial statements, overseeing the financial reporting system, and risk management and internal control systems[187](index=187&type=chunk) - **Nomination Committee**: Composed of four independent non-executive directors and one non-executive director, it is responsible for reviewing the Board's structure, composition, and diversity, and this year recommended the appointment of a female non-executive director to avoid a single-gender board[192](index=192&type=chunk) - **Remuneration Committee**: Composed of three independent non-executive directors, it is responsible for determining the remuneration of executive directors and senior management, and this year reviewed remuneration packages and recommended the grant of share options to several directors and eligible participants[210](index=210&type=chunk)[211](index=211&type=chunk) [Risk Management, Internal Control and Shareholder Communication](index=46&type=section&id=Risk%20Management%2C%20Internal%20Control%20and%20Shareholder%20Communication) The Board assumes full responsibility for risk management and internal control systems, conducting annual effectiveness reviews, and has established written procedures for handling and disseminating inside information, while actively engaging with shareholders through various channels - The Board confirmed its full responsibility for risk management and internal control systems and, with the assistance of the Audit Committee, reviewed the effectiveness of the systems for the year ended March 31, 2025, deeming them effective and adequate[220](index=220&type=chunk)[223](index=223&type=chunk) - The company has established and implemented written procedures for handling and disseminating inside information, ensuring compliance and confidentiality of information disclosure[226](index=226&type=chunk) - The company values communication with shareholders, has adopted a shareholder communication policy, and facilitates information exchange through various channels such as general meetings and the company website to protect shareholder rights[230](index=230&type=chunk) [Biographies of Directors and Senior Management](index=54&type=section&id=Biographies%20of%20Directors%20and%20Senior%20Management%20Details) This section details the backgrounds, qualifications, and experience of the company's directors and senior management, highlighting the core leadership's expertise in electronic engineering, capital markets, private equity, investment banking, accounting, and business operations [Biographies of Directors and Senior Management](index=54&type=section&id=Biographies%20of%20Directors%20and%20Senior%20Management%20Details) This section details the backgrounds, qualifications, and experience of the company's directors and senior management, highlighting the core leadership's expertise in electronic engineering, capital markets, private equity, investment banking, accounting, and business operations - **Mr. Wong Man Fai (Chairman and Chief Executive Officer)**: 51 years old, holds a Master's degree in Electronic Engineering from Cornell University, with over **18 years** of management experience, primarily responsible for the Group's overall corporate strategy, development management, and operations[256](index=256&type=chunk) - **Mr. Tsang Sze Wai (Non-executive Director)**: 48 years old, with over **20 years** of experience in capital markets, specializing in SPACs, private equity, and M&A transactions, having previously worked at Templeton Asset Management and Lehman Brothers[257](index=257&type=chunk) - **Senior Management**: The team includes Mr. Cheng Chi Kuen (Chief Operating Officer), Mr. Lo Kwok Shing (Chief Investment Officer), Mr. Wong Ho Kwan (Chief Financial Officer), and Mr. Ng Sai Wing (Chief Strategy Officer), all possessing extensive industry experience in their respective fields[266](index=266&type=chunk)[267](index=267&type=chunk)[269](index=269&type=chunk)[270](index=270&type=chunk) [Independent Auditor's Report](index=60&type=section&id=Independent%20Auditor's%20Report) The auditor, Beijing Xinghua Dingfeng Certified Public Accountants Co., Ltd., issued an unmodified opinion on the company's consolidated financial statements for the year ended March 31, 2025, affirming that the financial statements truly and fairly reflect the Group's financial position and performance [Independent Auditor's Report](index=60&type=section&id=Independent%20Auditor's%20Report) The auditor, Beijing Xinghua Dingfeng Certified Public Accountants Co., Ltd., issued an unmodified opinion on the company's consolidated financial statements for the year ended March 31, 2025, affirming that the financial statements truly and fairly reflect the Group's financial position and performance - The auditor issued an **unmodified opinion** on the consolidated financial statements, deeming them to truly and fairly reflect the Group's financial position and performance in accordance with Hong Kong Financial Reporting Standards[272](index=272&type=chunk) - The "impairment assessment of trade receivables and finance lease receivables" was identified as a key audit matter, primarily because these amounts represent approximately **71%** of total assets, and their impairment assessment involves significant management judgment and estimation uncertainty[276](index=276&type=chunk) - The auditor performed procedures including evaluating management's estimation process, the appropriateness of data used, the competence of management's experts, and checking the accuracy of valuation models, concluding that the Group's impairment assessment for these amounts was supported by available evidence[278](index=278&type=chunk)[282](index=282&type=chunk)[285](index=285&type=chunk) [Consolidated Financial Statements](index=66&type=section&id=Consolidated%20Financial%20Statements) This section presents the Group's comprehensive financial performance and position, including the statement of comprehensive income, statement of financial position, and cash flow statement, along with detailed notes explaining accounting policies and key financial items [Key Financial Statements](index=66&type=section&id=Key%20Financial%20Statements) The financial statements show strong profit growth for the Group in FY2025, with profit for the year reaching HKD 39.6 million, significantly exceeding last year's HKD 11.6 million, though the balance sheet indicates a weakened financial structure with net current liabilities of HKD 29.46 million Summary of Consolidated Statement of Comprehensive Income (HKD thousands) | Indicator | 2025 | 2024 | | :--- | :--- | :--- | | Revenue | 157,371 | 92,619 | | Gross Profit | 93,385 | 56,744 | | Profit before income tax | 38,841 | 15,217 | | **Profit for the year** | **39,597** | **11,602** | | Profit attributable to owners of the Company | 35,532 | 8,387 | | Basic earnings per share (HK cents) | 1.04 | 0.28 | Summary of Consolidated Statement of Financial Position (HKD thousands) | Indicator | 2025 | 2024 | | :--- | :--- | :--- | | Non-current assets | 225,903 | 183,791 | | Current assets | 340,005 | 284,591 | | **Total assets** | **565,908** | **468,382** | | Current liabilities | 369,465 | 111,984 | | Non-current liabilities | 2,719 | 42,288 | | **Total liabilities** | **372,184** | **154,272** | | **Net assets** | **193,724** | **314,110** | [Notes to the Consolidated Financial Statements](index=72&type=section&id=Notes%20to%20the%20Consolidated%20Financial%20Statements) The notes to the financial statements provide detailed explanations of the company's accounting policies, key accounting estimates, and various financial statement items, including segment information, trade receivables, borrowings, and convertible bonds [Note 5: Segment Information](index=95&type=section&id=Note%205%3A%20Segment%20Information) This year, the Group's revenue primarily originated from two major segments: "Provision of Energy Saving Systems" and "Energy Saving Product Trading," with the Malaysian market contributing the most significant portion of revenue at HKD 85.06 million, accounting for 54% of total revenue Revenue from External Customers by Segment (HKD thousands) | Segment | 2025 | 2024 | | :--- | :--- | :--- | | Provision of Energy Saving Systems | 85,134 | 39,322 | | Energy Saving Product Trading | 65,033 | 40,278 | | Energy Saving Product Licensing Fees (Consulting) | 7,204 | 12,931 | | Solar PV System EPCC | – | 88 | | **Total** | **157,371** | **92,619** | Revenue from External Customers by Geographical Region (HKD thousands) | Region | 2025 | 2024 | | :--- | :--- | :--- | | Malaysia | 85,062 | 39,182 | | Japan | 32,526 | 17,179 | | Australia | 32,229 | 17,415 | | Macau | 7,204 | 8,102 | | Hong Kong | 65 | 10,127 | | Others | 285 | 614 | | **Total** | **157,371** | **92,619** | [Note 19: Trade Receivables](index=118&type=section&id=Note%2019%3A%20Trade%20Receivables) As of March 31, 2025, net trade receivables amounted to HKD 287 million, with the Group restructuring approximately HKD 369 million in receivables into a HKD 246 million repayment plan this year, resulting in a HKD 39.25 million gain on modification of financial assets and an improved aging structure - This year, the Group reached debt restructuring agreements with several trade debtors, restructuring approximately **HKD 369 million** in receivables into a **HKD 246 million** repayment plan, and consequently recognized a **HKD 39.25 million** gain on modification of financial assets in profit or loss[501](index=501&type=chunk) [Note 26: Borrowings](index=125&type=section&id=Note%2026%3A%20Borrowings) The Group's total borrowings significantly increased from HKD 17.42 million in the previous year to HKD 88.96 million, primarily due to a new MYR 50 million secured bank financing to support Malaysian operations, with most borrowings secured by finance lease receivables, trade receivables, and bank deposits - The Group's total borrowings significantly increased from **HKD 17.42 million** to **HKD 88.96 million**[526](index=526&type=chunk) - A new financing agreement of **MYR 50 million** (approximately **HKD 88.5 million**) was secured to support Malaysian business expansion, with the loan collateralized by finance lease receivables, trade receivables, and other assets[527](index=527&type=chunk) [Note 30: Convertible Bonds](index=130&type=section&id=Note%2030%3A%20Convertible%20Bonds) The convertible bonds with a total principal amount of USD 10 million, issued by the company in 2023, were fully converted into company shares during this fiscal year, with the remaining USD 2.5 million converted into approximately 59.09 million new shares on May 31, 2024 - On May 31, 2024, the remaining principal amount of **USD 2.5 million** of convertible bonds was converted into approximately **59.09 million** newly issued shares of the company[550](index=550&type=chunk) - As of March 31, 2025, all convertible bonds issued in 2023 have been converted, with a carrying value of zero[551](index=551&type=chunk)

[Corporate Information](index=2&type=section&id=Corporate%20Information) [Letter from the Board](index=5&type=section&id=Letter%20from%20the%20Board) [Review and Prospects](index=5&type=section&id=Letter%20from%20the%20Board_Review%20and%20Prospects) The Group's annual revenue grew significantly to HK$217.1 million, with net loss narrowing to HK$12.2 million Financial Highlights | Metric | FY2025 | FY2024 | Y-o-Y Change | | :--- | :--- | :--- | :--- | | **Revenue** | HK$217.1 million | HK$148.2 million | +46.5% | | **Net Loss** | HK$12.2 million | HK$22.6 million | -46.0% | - The increase in revenue was primarily attributable to a higher-than-expected demand for the company's products from an increase in construction works and projects in Hong Kong[13](index=13&type=chunk) - The company maintains a cautious outlook on the local Hong Kong market and will continue to pursue business opportunities in overseas markets[16](index=16&type=chunk)[19](index=19&type=chunk) [Management Discussion and Analysis](index=5&type=section&id=Management%20Discussion%20and%20Analysis) [Business Review](index=6&type=section&id=Business%20Review) The Group's core business of manufacturing and trading DTH rockdrilling tools constituted 98.1% of total revenue Revenue by Business Segment | Business Segment | Revenue Share (FY2025) | Revenue Share (FY2024) | | :--- | :--- | :--- | | Manufacturing and trading of DTH rockdrilling tools | 98.1% | 92.1% | | Trading of piling and drilling machines and rockdrilling equipment | 1.9% | 7.9% | Revenue by Geographical Market | Region | Revenue (FY2025) | Revenue (FY2024) | Revenue Share (FY2025) | | :--- | :--- | :--- | :--- | | Hong Kong | HK$196.3 million | HK$142.6 million | 90.4% | | China | HK$15.1 million | HK$0.6 million | 7.0% | | Macau | HK$1.7 million | HK$0.5 million | 0.8% | | Germany | HK$1.1 million | HK$1.5 million | 0.5% | | Scandinavia | HK$1.0 million | HK$1.5 million | 0.5% | [Financial Review](index=7&type=section&id=Financial%20Review) Revenue grew 46.5% to HK$217.1 million, while net loss narrowed significantly due to gains on financial assets Key Financial Metrics | Financial Metric | FY2025 | FY2024 | Y-o-Y Change | | :--- | :--- | :--- | :--- | | **Revenue** | HK$217.1 million | HK$148.2 million | +46.5% | | **Gross Profit** | HK$43.8 million | HK$34.1 million | +28.4% | | **Gross Profit Margin** | 20.2% | 23.0% | -2.8pp | | **Net Loss** | HK$12.2 million | HK$22.6 million | -46.0% | - Other income and losses shifted from a loss of HK$5.0 million last year to a gain of HK$5.3 million, mainly due to a **HK$7.0 million gain from changes in the fair value of financial assets** (compared to a HK$3.1 million loss last year)[34](index=34&type=chunk) - **Selling and distribution expenses** increased by 32.6% to HK$11.4 million, primarily due to higher freight and storage costs associated with increased revenue[37](index=37&type=chunk) - **Administrative expenses** rose by 12.7% to HK$45.3 million, mainly due to increased operating costs[38](index=38&type=chunk) [Strategy and Prospects](index=9&type=section&id=Strategy%20and%20Prospects) The Group remains cautious about the local business environment and will continue to focus on expanding its international presence - The business environment in Hong Kong remains stagnant due to an uncertain economic outlook, leading the Group to adopt a **cautious stance on local business prospects**[44](index=44&type=chunk)[45](index=45&type=chunk) - The Group will continue to explore international markets, expecting **increased revenue contributions from international customers** and actively seeking overseas business opportunities[44](index=44&type=chunk)[45](index=45&type=chunk) [Liquidity and Financial Resources](index=9&type=section&id=Liquidity%20and%20Financial%20Resources) The Group's gearing ratio improved significantly to 9.6%, supported by reduced borrowings and a new share placement Liquidity Position | Metric | As of Mar 31, 2025 | As of Mar 31, 2024 | | :--- | :--- | :--- | | **Cash and cash equivalents** | HK$42.2 million | HK$46.6 million | | **Bank and other borrowings** | HK$13.0 million | HK$23.0 million | | **Gearing ratio** | 9.6% | 21.9% | - In October 2024, the company raised **net proceeds of approximately HK$6.2 million** by placing 76,000,000 new shares at HK$0.085 per share to strengthen its financial position and for general working capital[65](index=65&type=chunk) [Employees and Remuneration Policies](index=12&type=section&id=Employees%20and%20Remuneration%20Policies) The Group's total number of employees increased to approximately 101 as of March 31, 2025 - The number of employees **increased from approximately 88** as of March 31, 2024, to **approximately 101** as of March 31, 2025[70](index=70&type=chunk) [Corporate Governance Report](index=12&type=section&id=Corporate%20Governance%20Report) [Board of Directors and Committees](index=14&type=section&id=Board%20of%20Directors%20and%20Committees) The company deviated from the corporate governance code by not separating the roles of Chairman and Chief Executive Officer - The company **did not comply with code provision C.2.1** of the Corporate Governance Code regarding the separation of the chairman and chief executive roles, with the chairman's functions being performed collectively by the executive directors[73](index=73&type=chunk)[74](index=74&type=chunk) Attendance of Directors | Director's Name | Board | Audit & Compliance Committee | Remuneration Committee | Nomination Committee | General Meeting | | :--- | :--- | :--- | :--- | :--- | :--- | | **Executive Directors** | | | | | | | Ms. Li Ka Lai | 10/10 | N/A | N/A | N/A | 1/1 | | Ms. Wu Lan Ying | 5/6 | N/A | N/A | N/A | 1/1 | | **Independent Non-executive Directors** | | | | | | | Mr. Cheung Sze Man | 7/10 | 3/3 | 1/1 | 2/2 | 1/1 | | Mr. Wong Siu Keung | 7/10 | 3/3 | 1/1 | 2/2 | 1/1 | | Mr. Yiu To Wa | 8/10 | 3/3 | 1/1 | 2/2 | 1/1 | [Risk Management and Internal Controls](index=26&type=section&id=Risk%20Management%20and%20Internal%20Controls) The Group's risk management and internal control systems were deemed effective, with internal audit functions outsourced - The Group has appointed an external independent professional, **BT Corporate Governance Limited (BTCGL)**, to perform the internal audit function and conduct an independent review of its risk management and internal control systems[149](index=149&type=chunk)[152](index=152&type=chunk) - Risk monitoring is conducted through a **"three-lines-of-defense"** corporate governance structure, executed by operational management, the finance team, and the external independent internal auditor[158](index=158&type=chunk) [Biographies of Directors and Senior Management](index=32&type=section&id=Biographies%20of%20Directors%20and%20Senior%20Management) [Directors' Report](index=35&type=section&id=Directors'%20Report) [Business and Financial Summary](index=36&type=section&id=Business%20and%20Financial%20Summary) The Board does not recommend a final dividend for the year ended March 31, 2025, citing key business risks - The Board **does not recommend the payment of a final dividend** for the year ended March 31, 2025[210](index=210&type=chunk) - Key risks and uncertainties faced by the Group include: - Over-concentration of customers and suppliers - Rising raw material prices and labor costs - Decrease in market demand - Failure to appoint a Chairman and a Chief Executive Officer[211](index=211&type=chunk) [Major Customers, Suppliers, and Connected Transactions](index=43&type=section&id=Major%20Customers,%20Suppliers,%20and%20Connected%20Transactions) The Group exhibits significant concentration risk with its top five customers and suppliers Concentration Ratios | Concentration Metric | FY2025 | FY2024 | | :--- | :--- | :--- | | **Revenue share from top five customers** | 56.4% | 55.2% | | **Purchase share from top five suppliers** | 80.9% | 89.2% | - The Group has ongoing property leasing agreements with a connected person, Top Champion Industries Limited, with related rental expenses of approximately **HK$0.828 million** for the year, which is exempt from full reporting requirements under Chapter 14A of the Listing Rules[271](index=271&type=chunk)[278](index=278&type=chunk)[279](index=279&type=chunk)[281](index=281&type=chunk) [Independent Auditor's Report](index=48&type=section&id=Independent%20Auditor's%20Report) [Audit Opinion and Key Audit Matters](index=49&type=section&id=Audit%20Opinion%20and%20Key%20Audit%20Matters) The auditor issued an unqualified opinion, highlighting the impairment assessment of trade receivables as a key audit matter - The auditor issued an **unqualified opinion**, concluding that the consolidated financial statements give a true and fair view of the Group's financial position[305](index=305&type=chunk) - The **impairment assessment of trade receivables** was identified as a key audit matter due to its material impact on the consolidated financial position and the subjective judgment and management estimates involved in the assessment[311](index=311&type=chunk) [Consolidated Financial Statements](index=55&type=section&id=Consolidated%20Financial%20Statements) [Consolidated Statement of Profit or Loss and Other Comprehensive Income](index=56&type=section&id=Consolidated%20Statement%20of%20Profit%20or%20Loss%20and%20Other%20Comprehensive%20Income) The Group reported a loss for the year of HK$12.2 million on revenue of HK$217.1 million Financial Performance | Item | FY2025 (HK$'000) | FY2024 (HK$'000) | | :--- | :--- | :--- | | **Revenue** | 217,074 | 148,231 | | **Gross Profit** | 43,826 | 34,146 | | **Loss before tax** | (11,949) | (21,328) | | **Loss for the year** | (12,204) | (22,561) | | **Loss attributable to owners of the Company** | (12,524) | (18,674) | | **Basic loss per share (HK cents)** | (3.04) | (4.91) | [Consolidated Statement of Financial Position](index=57&type=section&id=Consolidated%20Statement%20of%20Financial%20Position) The Group's total assets stood at HK$200.4 million, with net assets of HK$144.6 million as of March 31, 2025 Financial Position | Item | Mar 31, 2025 (HK$'000) | Mar 31, 2024 (HK$'000) | | :--- | :--- | :--- | | **Non-current assets** | 14,733 | 15,662 | | **Current assets** | 185,678 | 186,074 | | **Total assets** | 200,411 | 201,736 | | **Current liabilities** | 55,606 | 41,719 | | **Non-current liabilities** | 238 | 7,204 | | **Total liabilities** | 55,844 | 48,923 | | **Net assets** | 144,567 | 152,813 | | **Equity attributable to owners of the Company** | 115,233 | 122,707 | [Consolidated Statement of Cash Flows](index=60&type=section&id=Consolidated%20Statement%20of%20Cash%20Flows) The Group generated a net cash inflow of HK$11.5 million from operating activities, a significant turnaround from the prior year Cash Flow Summary | Item | FY2025 (HK$'000) | FY2024 (HK$'000) | | :--- | :--- | :--- | | **Net cash from operating activities** | 11,454 | (7,981) | | **Net cash (used in)/from investing activities** | (6,254) | 297 | | **Net cash used in financing activities** | (7,487) | (9,004) | | **Net decrease in cash and cash equivalents** | (2,287) | (16,688) | | **Cash and cash equivalents at end of year** | 42,174 | 46,616 | [Financial Summary](index=148&type=section&id=Financial%20Summary) Five-Year Financial Summary | Metric (HK$'000) | 2025 | 2024 | 2023 | 2022 | 2021 | | :--- | :--- | :--- | :--- | :--- | :--- | | **Revenue** | 217,074 | 148,231 | 157,048 | 141,748 | 106,693 | | **Loss for the year** | (12,204) | (22,561) | (3,576) | (1,475) | (6,537) | | **Total assets** | 200,411 | 201,736 | 231,105 | 232,796 | 239,093 | | **Net assets** | 144,567 | 152,813 | 177,869 | 186,305 | 185,986 | [Definitions](index=149&type=section&id=Definitions)

[Company Information](index=3&type=section&id=Company%20Information) During the reporting period, there were multiple changes in the company's Board of Directors and various committee members, including the resignation and appointment of several executive, non-executive, and independent non-executive directors - During the reporting period, there were multiple changes in the company's Board of Directors and various committee members, including the resignation and appointment of several executive, non-executive, and independent non-executive directors[5](index=5&type=chunk) [Chairman's Statement](index=6&type=section&id=Chairman's%20Statement) The company's existing coal mining business's financial performance was significantly impacted by challenges including tightening regulations, resource depletion, and increased capital investment in China's coal industry - The company's existing coal mining business's financial performance was significantly impacted by challenges including tightening regulations, resource depletion, and increased capital investment in China's coal industry[10](index=10&type=chunk) - To achieve business diversification, the Group invested in a copper mine in Laos in 2024, officially entering the Southeast Asian mining sector. Despite challenges encountered in the new business, the Board still considers diversification crucial for long-term development[10](index=10&type=chunk) - Moving forward, the Group will continue to focus on enhancing operational and capital efficiency, and actively seek new business opportunities in the energy and mining sectors to enhance shareholder value[10](index=10&type=chunk) [Financial Highlights](index=7&type=section&id=Financial%20Highlights) [Annual Financial Summary](index=7&type=section&id=Annual%20Financial%20Summary) In FY2024, the company's revenue decreased by 3.7% year-on-year to HK$181 million, while gross profit increased by 3.5% to HK$67.47 million. However, the loss attributable to owners of the company significantly expanded by 113.9% to HK$50.77 million, primarily due to impairment of non-financial assets and increased administrative expenses. Both total assets and total liabilities decreased, and cash balance declined by 23.0% Summary of FY2024 Operating Results and Financial Position | Metric | 2024 (HK$ Thousand) | 2023 (HK$ Thousand) | Change Rate | | :--- | :--- | :--- | :--- | | **Operating Results** | | | | | Revenue | 180,934 | 187,960 | -3.7% | | Gross Profit | 67,469 | 65,211 | 3.5% | | Loss for the year attributable to owners of the Company | (50,768) | (23,734) | 113.9% | | Loss per share - Basic | (25.50) HK cents | (14.62) HK cents | 74.4% | | **Financial Position** | | | | | Total Assets | 284,673 | 307,225 | -7.3% | | Total Liabilities | 96,423 | 109,737 | -12.1% | | Bank and cash balances | 73,412 | 95,359 | -23.0% | | Equity attributable to owners of the Company | 144,163 | 138,598 | 4.0% | [Five-Year Financial Summary](index=8&type=section&id=Five-Year%20Financial%20Summary) Over the past five years, the company's revenue fluctuated between HK$130 million and HK$190 million, with 2024 revenue at HK$181 million. In terms of operating profit, the company achieved profitability in 2021 and 2022 but recorded operating losses in 2020, 2023, and 2024, with the 2024 operating loss expanding to HK$66.81 million. Net profit attributable to owners of the company also showed significant fluctuations, with a loss of HK$50.77 million recorded in 2024, marking the second-largest loss in the past five years. Net assets remained relatively stable within the HK$180 million to HK$200 million range over the five-year period Five-Year Performance Summary (As at December 31) | Metric (HK$ Thousand) | 2024 | 2023 | 2022 | 2021 | 2020 | | :--- | :--- | :--- | :--- | :--- | :--- | | Revenue | 180,934 | 187,960 | 191,180 | 183,016 | 133,012 | | Operating (Loss) / Profit | (66,805) | (32,009) | 34,072 | 31,628 | (67,193) | | Loss / (Profit) for the year | (63,783) | (33,610) | 26,100 | 31,975 | (62,876) | | Attributable to owners of the Company | (50,768) | (23,734) | 10,237 | 14,372 | (42,505) | Five-Year Summary of Assets, Liabilities and Equity (As at December 31) | Metric (HK$ Thousand) | 2024 | 2023 | 2022 | 2021 | 2020 | | :--- | :--- | :--- | :--- | :--- | :--- | | Total Assets | 284,673 | 307,225 | 305,350 | 259,999 | 263,299 | | Total Liabilities | 96,423 | 109,737 | 111,940 | 81,224 | 78,623 | | Net Assets | 188,250 | 197,488 | 193,410 | 178,775 | 184,676 | | Equity attributable to owners of the Company | 144,163 | 138,598 | 123,125 | 119,128 | 105,497 | [Management Discussion and Analysis](index=10&type=section&id=Management%20Discussion%20and%20Analysis) [Business and Financial Review](index=10&type=section&id=Business%20and%20Financial%20Review) In FY2024, the Group's revenue decreased by 3.7% year-on-year to HK$181 million, and the loss attributable to owners of the company expanded from HK$23.73 million to HK$50.77 million. The primary reasons for the expanded loss include: an impairment loss of approximately HK$26 million recognized on non-financial assets of the coal mining business; an increase in operating costs of approximately HK$28 million due to compliance with green mining policies; and an increase in administrative expenses of approximately HK$11 million due to the acquisition of a copper mine in Laos and exploration of other investment opportunities - The primary reasons for the expanded loss in 2024 are threefold: (i) an impairment loss of approximately **HK$26 million** on non-financial assets of the coal mining business; (ii) an increase in operating costs of approximately **HK$28 million** due to compliance with China's green mining construction policies; and (iii) an increase in administrative expenses of approximately **HK$11 million** due to the acquisition of a copper mine in Laos and exploration of potential investment opportunities[17](index=17&type=chunk) [Coal Mining Business and Impairment Assessment](index=10&type=section&id=Coal%20Mining%20Business%20and%20Impairment%20Assessment) The Group's core coal business is located in Inner Mongolia, with an annual production capacity of 1.2 million tonnes, and actual production and sales in 2024 were approximately 0.9 million tonnes, consistent with the previous year. However, as the mine has been operating for about 15 years, shallow coal resources are largely depleted, and new government policies promoting intelligent and green mine construction are expected to lead to significant increases in ongoing capital expenditure and operating costs. Based on this, the company recognized an impairment loss of approximately HK$25.96 million on the non-financial assets of its coal mining business - The Inner Mongolia coal mine has been operating for approximately 15 years, with shallow coal resources largely depleted. Deep-level mining faces geological challenges, requiring replacement of old machinery and investment in more advanced equipment, which is expected to lead to significant increases in capital expenditure and operating costs[20](index=20&type=chunk) - Based on the impairment assessment, the company recognized an impairment loss of approximately **HK$25.96 million** on the non-financial assets of the coal mining business segment for the year ended December 31, 2024[20](index=20&type=chunk) Key Assumptions for Impairment Assessment of Coal Mining Cash-Generating Unit | Key Assumption | December 31, 2024 | | :--- | :--- | | Forecast Annual Coal Output | 900,000 tonnes | | Average Unit Selling Price per Tonne of Coal | 2025: RMB 191 | | Inflation Rate | 2.5% | | Pre-tax Discount Rate | 16.58% | [Capital Market Activities](index=14&type=section&id=Capital%20Market%20Activities) To raise funds for business operations and development, the company undertook two major capital market activities in 2024. First, a placement of new shares was completed in March, with approximately 323 million shares placed at HK$0.185 per share, raising net proceeds of approximately HK$59.1 million. Second, a share consolidation was completed in October, merging every ten shares with a par value of HK$0.01 into one consolidated share with a par value of HK$0.1 - On March 4, 2024, the company completed the placement of **322,692,000 new shares** at a placement price of **HK$0.185 per share**, raising net proceeds of approximately **HK$59.1 million**, primarily for business operations and development[28](index=28&type=chunk)[29](index=29&type=chunk) - On October 25, 2024, the company completed a "ten-into-one" share consolidation, changing its issued share capital from approximately **2.046 billion shares** (par value HK$0.01) to approximately **205 million shares** (par value HK$0.1)[30](index=30&type=chunk) [Investment in Copper Mine in Laos](index=15&type=section&id=Investment%20in%20Copper%20Mine%20in%20Laos) The Group advanced its investment in a copper mine in Laos in 2024, ultimately completing the acquisition of a 52% equity stake in the target company, Taishan Jiujiu, in August. This copper mine has a mining area of approximately 24 square kilometers and copper reserves exceeding 100,000 tonnes. However, since early 2025, the local management and business partners have been slow to respond and uncooperative with the company's requests, preventing the Group from exercising control over the company. Consequently, the Group recognized its investment in Taishan Jiujiu as an associate and accounted for it using the equity method. The company plans to continue communication while reserving the option to take legal action to protect its shareholder rights - On August 26, 2024, the Group completed the acquisition of a **52% equity stake** in Taishan Jiujiu Mining Co., Ltd. in Laos, which owns a copper mine with estimated copper reserves exceeding **100,000 tonnes**[34](index=34&type=chunk) - Since early 2025, due to the uncooperative local management and business partners of Taishan Jiujiu, the Group believes it currently cannot exercise control over Taishan Jiujiu but retains significant influence[36](index=36&type=chunk) - Based on the current inability to exercise control, the Group recognized its investment in Taishan Jiujiu as an associate and accounted for it using the equity method, in accordance with Hong Kong Accounting Standard 28[36](index=36&type=chunk) [Use of Proceeds from Past Fundraising Activities](index=18&type=section&id=Use%20of%20Proceeds%20from%20Past%20Fundraising%20Activities) As of December 31, 2024, the net proceeds from the convertible bonds issued in 2022 and the new share placement in 2024 have been fully utilized. Approximately HK$39.8 million from the convertible bonds was primarily used to strengthen mining operations and invest in the Laos copper mine. Approximately HK$59.1 million from the new share placement was mainly allocated to the Laos copper mine and other potential mining investments, enhancement of existing mining machinery, and general working capital Summary of Use of Proceeds from Fundraising (As at December 31, 2024) | Fundraising Activity | Net Proceeds (HK$ Thousand) | Amount Used (HK$ Thousand) | Primary Use | | :--- | :--- | :--- | :--- | | 2022 Convertible Bonds | 39,800 | 39,800 | Strengthening mining operations, Laos copper mine investment, working capital | | 2024 New Share Placement | 59,101 | 59,101 | Laos copper mine and potential investments, strengthening mining machinery, working capital | [Liquidity and Financial Resources](index=19&type=section&id=Liquidity%20and%20Financial%20Resources) As of the end of 2024, the Group's financial position showed total bank and cash balances of approximately HK$73.57 million, a year-on-year decrease. The Group had no borrowings, resulting in a zero gearing ratio. The current ratio was 1.52, slightly lower than last year's 1.56, but still at a healthy level. The Board will continue to closely monitor the financial position to support future operations and new business development Key Financial Indicators as at December 31, 2024 | Metric | 2024 | 2023 | | :--- | :--- | :--- | | Total bank and cash balances | Approx. HK$73,565,000 | HK$103,938,000 | | Borrowings | Nil | Nil | | Gearing ratio | Zero | Zero | | Current ratio | Approx. 1.52 | 1.56 | [Outlook](index=20&type=section&id=Outlook) Looking ahead, tightening policies in China's coal mining industry continue to exert working capital pressure on the Group's coal business. Therefore, the Group will continue to explore investment opportunities in the mining and mineral sectors globally to broaden its business scope. Despite challenges in the Laos copper mine investment, the Group believes diversification is crucial for long-term growth. Moving forward, the Group will implement cost control and strengthen capital management, aiming to improve its financial position and create shareholder value - Facing capital pressure from tightening policies in China's coal industry, the Group will continue to seek global investment opportunities in the mining and mineral sectors to achieve business diversification[49](index=49&type=chunk) - The Group will implement cost control measures and strengthen capital management to improve its financial position and is committed to enhancing shareholder value through business diversification[49](index=49&type=chunk) [Auditor's Qualified Opinion](index=21&type=section&id=Auditor's%20Qualified%20Opinion) The auditor issued a qualified opinion on the Group's 2024 consolidated financial statements, primarily concerning the investment in Taishan Jiujiu Company in Laos. Due to insufficient audit evidence to confirm the company's significant influence over Taishan Jiujiu, the auditor could not determine the appropriateness of classifying it as an associate and accounting for it using the equity method. Management and the Audit Committee, however, believe that despite the current inability to exercise control, the Group's 52% equity stake and related statutory rights are sufficient to constitute significant influence. The company has developed an action plan to address this issue and prevent similar situations in the future - The auditor issued a qualified opinion on the 2024 financial statements due to insufficient audit evidence to determine the appropriateness of classifying the **52% equity investment** in Taishan Jiujiu as an associate and accounting for it using the equity method[50](index=50&type=chunk)[51](index=51&type=chunk) - A divergence exists between management and the auditor regarding accounting treatment: the auditor believes that without the ability to convene a general meeting, it is uncertain whether the company can exercise significant influence; management, however, asserts that its **52% equity stake** and associated statutory rights inherently constitute significant influence[55](index=55&type=chunk)[56](index=56&type=chunk)[57](index=57&type=chunk) - The Audit Committee concurs with management's position, believing that classifying the investment as an associate is consistent with accounting standards after comprehensively considering substantive voting rights and statutory interests[58](index=58&type=chunk)[59](index=59&type=chunk) [Biographies of Directors and Senior Management](index=24&type=section&id=Biographies%20of%20Directors%20and%20Senior%20Management) Mr. Wu Yingji, the company's Executive Director, possesses over 20 years of experience in corporate finance and investment banking - Mr. Wu Yingji, the company's Executive Director, possesses over **20 years of experience** in corporate finance and investment banking. Ms. Kuang Peixian, a Non-Executive Director, has over **20 years of experience** in corporate mergers and acquisitions and asset management. Independent Non-Executive Directors and senior management possess extensive professional backgrounds in accounting, legal, and financial fields[61](index=61&type=chunk)[62](index=62&type=chunk)[63](index=63&type=chunk)[64](index=64&type=chunk)[65](index=65&type=chunk)[66](index=66&type=chunk) [Corporate Governance Report](index=26&type=section&id=Corporate%20Governance%20Report) [Corporate Governance Practices and the Board](index=26&type=section&id=Corporate%20Governance%20Practices%20and%20the%20Board) The company is committed to maintaining high standards of corporate governance. During the reporting period, the company complied with most provisions of the Corporate Governance Code, with a deviation concerning the vacant positions of Chairman and Chief Executive Officer. The Board is responsible for the Group's strategic direction and oversight, ensuring shareholder interests. The Board's composition is diverse, covering various professional backgrounds, genders, and age groups. High attendance at Board meetings during the year demonstrated active director participation - The company deviated from Corporate Governance Code Provision C.2.1, which stipulates that the roles of Chairman and Chief Executive Officer should be separate and not held by the same individual. Both positions are currently vacant, and the company is seeking suitable candidates[69](index=69&type=chunk) Board Diversity Composition (As at December 31, 2024) | Diversity Aspect | Composition | | :--- | :--- | | **Gender** | Male 80% (4 persons), Female 20% (1 person) | | **Age Group** | 41-45 years (40%), 46-50 years (20%), 51-55 years (20%), 56-60 years (20%) | | **Educational Background** | Business Administration (40%), Accounting/Finance (20%), Engineering (20%), Law (20%) | [Board Committees](index=32&type=section&id=Board%20Committees) The Board has established a Nomination Committee, Remuneration Committee, and Audit Committee to assist in fulfilling its responsibilities. The Nomination Committee reviews the Board's structure and nominates director candidates. The Remuneration Committee is responsible for formulating remuneration policies for directors and senior management. The Audit Committee, composed of three independent non-executive directors, oversees financial reporting, risk management, and internal control systems. Each committee held multiple meetings during the year, fulfilling their respective terms of reference - The Nomination Committee comprises two independent non-executive directors and one non-executive director, responsible for reviewing the Board's structure, size, composition, and diversity, and assessing the independence of independent non-executive directors[88](index=88&type=chunk) - The Remuneration Committee consists of two independent non-executive directors and one non-executive director, responsible for advising the Board on remuneration policies for directors and senior management[92](index=92&type=chunk) - The Audit Committee is composed of three independent non-executive directors, with the chairman possessing professional accounting qualifications, and its primary responsibilities include reviewing financial information, overseeing the financial reporting system, risk management, and internal control systems[96](index=96&type=chunk) [Risk Management and Internal Control](index=39&type=section&id=Risk%20Management%20and%20Internal%20Control) The Board bears overall responsibility for maintaining effective risk management and internal control systems. The company has not established an internal audit department, instead engaging external professional firms to perform this function. Given the auditor's qualified opinion on the Laos investment project, the Board has recognized deficiencies in subsidiary oversight and will implement multiple measures to strengthen management, including increasing Board representation, enhancing access to financial records, improving reporting procedures, and providing additional training - The company has not established an internal audit department, deeming it more cost-effective to engage external independent professional firms to perform internal audit functions given the current business scale[109](index=109&type=chunk) - In response to the auditor's qualified opinion, the Board will implement multiple measures to strengthen internal controls over subsidiaries and investee companies, including reviewing Board seats, enhancing access to financial records, improving reporting procedures, and providing training[111](index=111&type=chunk)[114](index=114&type=chunk) [Environmental, Social and Governance Report](index=43&type=section&id=Environmental%2C%20Social%20and%20Governance%20Report) [Environmental (ESG)](index=49&type=section&id=Environmental%20(ESG)) The Group is committed to reducing the environmental impact of coal mining. In terms of emissions management, measures such as water spraying and dust control facilities are implemented to control coal dust, and exhaust gas emissions are monitored. Total greenhouse gas emissions increased in 2024 due to higher electricity consumption. Regarding resource use, electricity is the primary energy consumption, and the Group has adopted various energy-saving measures. In water resource management, water is conserved through methods like recycling mine water. Furthermore, the Group has identified and formulated measures to address climate change-related physical and transition risks Greenhouse Gas Emissions Performance | Greenhouse Gas Emission Type | Unit | FY2024 | FY2023 | | :--- | :--- | :--- | :--- | | Scope 1 (Direct Emissions) | tonnes of CO2e | 779.7 | 835.6 | | Scope 2 (Indirect Emissions) | tonnes of CO2e | 9,968.5 | 8,265.7 | | **Total** | **tonnes of CO2e** | **10,748.2** | **9,101.3** | | Intensity | tonnes of CO2e / thousand tonnes of coal production | 11.92 | 10.07 | Energy Consumption Performance | Energy Type | Unit | FY2024 | FY2023 | | :--- | :--- | :--- | :--- | | Direct Energy Consumption | MWh | 3,033.3 | 3,259.1 | | Indirect Energy Consumption (Electricity) | MWh | 14,711.5 | 13,548.1 | | **Total** | **MWh** | **17,744.8** | **16,807.2** | | Intensity | MWh / thousand tonnes of coal production | 19.67 | 18.59 | - The Group has identified physical risks (e.g., extreme weather) and transition risks (e.g., tightening climate-related legislation) posed by climate change, and has formulated corresponding response measures, including establishing early warning systems and promoting green and low-carbon transformation[165](index=165&type=chunk)[166](index=166&type=chunk)[167](index=167&type=chunk) [Social (ESG)](index=59&type=section&id=Social%20(ESG)) In terms of social responsibility, the Group strictly adheres to labor regulations and provides equal employment opportunities. As of the end of 2024, the Group had 425 full-time employees, with employee turnover decreasing from 28.1% to 21.5%. The Group highly prioritizes occupational health and safety, aiming for zero work-related fatalities, a goal achieved over the past three years. Furthermore, the Group has established supply chain management procedures, promotes fair competition, and ensures product quality and safety in terms of product responsibility. The Group has also formulated anti-corruption policies and grievance procedures, providing relevant training to employees - As of the end of 2024, the Group had **425 full-time employees**, a decrease from **466** in 2023. The overall employee turnover rate decreased from **28.1%** in FY2023 to **21.5%** in FY2024[169](index=169&type=chunk)[174](index=174&type=chunk) - The Group achieved its goal of **zero work-related fatalities** over the past three years, including the reporting period. During the reporting period, the number of days lost due to **14 work-related accidents** was **1,320 days**, a decrease from **2,154 days** last year[177](index=177&type=chunk) - The Group prohibits the use of child or forced labor and ensures compliance through verification of identity documents and background checks[185](index=185&type=chunk) - The Group has formulated anti-corruption policies and grievance procedures, and provided anti-corruption training to all newly appointed directors and all employees[194](index=194&type=chunk)[195](index=195&type=chunk)[196](index=196&type=chunk) [Directors' Report](index=72&type=section&id=Directors'%20Report) The Board does not recommend the payment of any final dividend for the year ended December 31, 2024 - The Board does not recommend the payment of any final dividend for the year ended December 31, 2024[203](index=203&type=chunk) - As at December 31, 2024, the company's distributable reserves were approximately **HK$155 million**[206](index=206&type=chunk) Revenue Contribution from Major Customers (For the year ended December 31, 2024) | Customer | Percentage of Total Revenue | | :--- | :--- | | Largest Customer | 36.4% | | Top Five Largest Customers Total | 74.3% | - The company adopted a share option scheme in June 2023, with a validity period of **10 years**. As at December 31, 2024, no share options had been granted, exercised, lapsed, or cancelled under the scheme[226](index=226&type=chunk)[228](index=228&type=chunk) [Independent Auditor's Report](index=80&type=section&id=Independent%20Auditor's%20Report) [Qualified Opinion](index=80&type=section&id=Qualified%20Opinion) The auditor issued a qualified opinion on the 2024 consolidated financial statements. The primary reason is the auditor's inability to obtain sufficient audit evidence to determine the appropriateness of classifying the Group's 52% equity investment in Taishan Jiujiu Company in Laos as an associate and accounting for it using the equity method. This uncertainty may have corresponding implications for the Group's consolidated financial performance, cash flows, and financial position - The auditor issued a qualified opinion, stating that due to insufficient audit evidence to confirm the company's significant influence over the Laos investee, it was unable to determine the appropriateness of accounting for the **52% equity stake** as an interest in an associate[245](index=245&type=chunk) - This qualified opinion pertains to the "interest in an associate" investment with a carrying amount of approximately **HK$24.74 million** as at December 31, 2024, and the share of results of an associate of approximately **HK$1.67 million** recognized in profit or loss during the year[245](index=245&type=chunk) [Key Audit Matters](index=81&type=section&id=Key%20Audit%20Matters) Aside from the matter leading to the qualified opinion, the key audit matter identified by the auditor is the "Impairment assessment of non-financial assets of the coal mining cash-generating unit." This was designated as a key audit matter because the impairment assessment involves significant management judgments and key assumptions (such as inflation rate, discount rate) regarding future cash flows, and has a material impact on the financial statements. The auditor has evaluated, discussed, and verified this matter - The key audit matter is the impairment assessment of non-financial assets (including property, plant and equipment, intangible assets, and right-of-use assets) of the coal mining cash-generating unit[249](index=249&type=chunk) - This matter is key because the impairment assessment has a significant impact on the consolidated financial statements and involves significant management judgments and estimates regarding future cash flows, inflation rates, discount rates, etc., when using the value-in-use method[249](index=249&type=chunk) [Consolidated Financial Statements](index=85&type=section&id=Consolidated%20Financial%20Statements) [Consolidated Statement of Profit or Loss](index=85&type=section&id=Consolidated%20Statement%20of%20Profit%20or%20Loss) For the year ended December 31, 2024, the Group recorded revenue of HK$181 million, a 3.7% year-on-year decrease. Gross profit was HK$67.47 million, a 3.5% year-on-year increase. However, due to a significant increase in administrative expenses and the recognition of multiple asset impairment losses (totaling approximately HK$26 million), operating loss expanded from HK$32.01 million to HK$66.81 million. Ultimately, the loss for the year was HK$63.78 million, with the loss attributable to owners of the company being HK$50.77 million Summary of Consolidated Statement of Profit or Loss | Metric (HK$ Thousand) | 2024 | 2023 | | :--- | :--- | :--- | | Revenue | 180,934 | 187,960 | | Gross Profit | 67,469 | 65,211 | | Operating Loss | (66,805) | (32,009) | | Loss for the year | (63,783) | (33,610) | | Loss attributable to owners of the Company | (50,768) | (23,734) | [Consolidated Statement of Financial Position](index=87&type=section&id=Consolidated%20Statement%20of%20Financial%20Position) As at December 31, 2024, the Group's total assets were HK$285 million, a 7.3% decrease from HK$307 million in the prior year. Total liabilities were HK$96.42 million, a 12.1% year-on-year decrease. Net assets stood at HK$188 million. Non-current assets saw the addition of an "interest in an associate" investment of approximately HK$24.74 million. Bank and cash balances within current assets decreased to HK$73.41 million Summary of Consolidated Statement of Financial Position | Metric (HK$ Thousand) | 2024 | 2023 | | :--- | :--- | :--- | | Total Assets | 284,673 | 307,225 | | Total Liabilities | 96,423 | 109,737 | | **Net Assets** | **188,250** | **197,488** | | Equity attributable to owners of the Company | 144,163 | 138,598 | [Consolidated Statement of Cash Flows](index=90&type=section&id=Consolidated%20Statement%20of%20Cash%20Flows) In FY2024, the Group's net cash outflow from operating activities was HK$0.62 million, compared to a net inflow of HK$6.33 million last year. Net cash outflow from investing activities surged to HK$77.8 million, primarily for acquiring an associate, providing loans to an associate, and purchasing property, plant, and equipment. Net cash inflow from financing activities was HK$58.67 million, mainly from the placement of new shares. The combined effect resulted in a net decrease in cash and cash equivalents of HK$19.76 million during the year, with an ending balance of HK$73.41 million Summary of Consolidated Statement of Cash Flows | Metric (HK$ Thousand) | 2024 | 2023 | | :--- | :--- | :--- | | Net cash from operating activities | (620) | 6,325 | | Net cash used in investing activities | (77,804) | (26,527) | | Net cash from / (used in) financing activities | 58,666 | (945) | | **Net change in cash and cash equivalents** | **(19,758)** | **(21,147)** | | Cash and cash equivalents at December 31 | 73,412 | 95,359 | [Notes to the Consolidated Financial Statements](index=92&type=section&id=Notes%20to%20the%20Consolidated%20Financial%20Statements) The notes to the financial statements provide detailed explanations and supplementary information on the Group's accounting policies, financial risk management, segment information, details of various assets and liabilities, related party transactions, and capital commitments. Key notes include critical assumptions for impairment assessment of non-financial assets (Note 17), accounting treatment and related risks for the investment in the Laos associate (Note 18), changes in share capital (Note 31), and financial information of major subsidiaries (Note 36)

Royal Deluxe Holdings Limited 年報 2025 (Incorporated in the Cayman Islands with limited liability) Royal Deluxe Holdings Limited Stock code: 3789 Annual Report 2025 R O Y A L D E L U X E H O L D NI G S LIMIT E D 御 佳 控 股 有 限 公 司 Annual Report 2025 目錄 | 公司資料 | 2 | | --- | --- | | 主席報告 | 3 | | 財務摘要 | 5 | | 管理層討論及分析 | 7 | | 董事及高級管理層履歷詳情 | 17 | | 企業管治報告 | 21 | | 董事會報告 | 37 | | 獨立核數師報告 | 49 | | 綜合損益及其他全面收益表 | 54 | | 綜合財務狀況表 | 55 | | 綜合權益變動表 | 57 | | 綜合現金流量表 | 58 | | 綜合財務報表附註 | 60 | | 財務概要 | 106 | 1 御佳控股有限公司 • 二零二五 ...

Financial Performance - Profit attributable to equity shareholders amounted to HK$35.5 million, a decrease of 28.8% compared to HK$50.7 million in the previous year[14]. - Revenue was HK$3,100.1 million, down 1.2% from HK$3,136.9 million in the previous year[14]. - Basic earnings per share were HK27.43 cents, a decrease of 29.8% from HK39.10 cents in the previous year[14]. - The Group's operating profit was HK$72.3 million, compared to HK$98.5 million in the previous year, with a gross profit margin declining to 7.7% from 8.6%[26]. - Profit attributable to equity shareholders was HK$35.5 million, a decline of 30% from HK$50.7 million in 2024; excluding government grants, profit fell by 28.8% to HK$35.1 million[29]. - Operating profit decreased to HK$72.3 million from HK$98.5 million in 2024, with a gross profit margin of 7.7%, down from 8.6%[29]. - The Hong Kong restaurants segment profits decreased by 17.8% to HK$81.2 million, while the Mainland China restaurants segment loss increased by 121.2% to HK$14.6 million[102]. - Basic earnings per share decreased by 29.8% to HK27.43 cents for the year ended 31 March 2025, compared to HK39.10 cents in 2024[103]. - Total assets of the Group were HK$2,105.3 million, a decrease from HK$2,247.8 million in 2024[107]. - The Group's net current liabilities increased to HK$109.5 million from HK$61.9 million in 2024, with a current ratio of 0.9[107]. Dividends and Shareholder Returns - The proposed final dividend is HK17.0 cents per share, with a total annual dividend of HK22.0 cents, representing a payout ratio of approximately 80.2%[27]. - The Board recommended a final dividend of HK17.0 cents per share, down from HK30.0 cents in 2024, leading to a total dividend of HK22.0 cents for the year, representing approximately 80.2% of the Group's profit[30]. - The total amount of reserves available for distribution to equity shareholders as of March 31, 2025, was HK$253,786,000, down from HK$298,843,000 in 2024[173]. - The Company declared an interim dividend of HK5.0 cents per share and recommended a final dividend of HK17.0 cents per share for the year ended March 31, 2025[170]. Operational Developments - The Group opened 3 new stores and closed 5 underperforming stores in Hong Kong, ending the year with 147 outlets[68]. - Fairwood launched the Ah Wood Soft Meals program for elderly customers with eating difficulties, addressing the needs of up to 38% of elderly people in Hong Kong[53]. - The Group plans to open more restaurants in Hong Kong, taking advantage of low rental opportunities, while closing underperforming stores, expecting net growth in store numbers over the coming year[75]. - The Group will implement targeted micro strategies to adapt to new consumer behaviors, focusing on individual store performance and product innovation to drive increases in average check[76]. - Fairwood's initiative for repurposing coffee grounds and lemon rinds at 130 stores is estimated to have eliminated 280 tonnes of food waste in 2024/25[67]. Marketing and Customer Engagement - A marketing campaign themed "God of Claypots" was launched to promote the Hong Kong style claypot rice, resulting in significant social media engagement valued at approximately HK$1.5 million[47]. - Membership via the Fairwood app reached approximately 1.02 million, up from 790,000 last year, representing a growth rate of over 25%[50]. - Fairwood expanded its takeaway options, adding Roasted Butterflied Spring Chicken and Portuguese Egg Tarts, contributing to growth in this segment[45][46]. - The Group introduced various new products and special offers, including Classic Claypot Rice and Double-Boiled Soup, to enhance customer engagement and increase average spending[38][44]. Cost Management and Efficiency - The Group implemented cost-reduction measures, including leveraging low commercial rents and improving process efficiency to offset profit margin pressures[40]. - Administrative expenses decreased by 2.3% to HK$141.9 million, down from HK$145.3 million in 2024, mainly due to effective cost control measures[89]. - The Group's overall food costs fell year-on-year, aided by the introduction of new vendors for raw materials[60]. - The Group's rental costs have continued to decrease, providing opportunities for cost savings as it seeks competitive rental locations for future store openings[61]. Environmental and Social Responsibility - The Group's environmental initiatives included the installation of energy-efficient kitchen equipment and a Smart Kitchen System to monitor resource usage[66]. - Charitable and other donations made by the Group totaled HK$1,429,000 for the year ended March 31, 2025, compared to HK$846,000 in 2024[171]. Employee and Management Practices - The total number of employees decreased to approximately 5,500 from 5,700 in 2024, with staff costs for the year at approximately HK$1,096.2 million, slightly down from HK$1,100.4 million in 2024[130]. - The Group continues to offer competitive remuneration packages, share options, and bonuses to eligible staff based on performance[131]. - The Company is committed to providing training programs to enhance the quality, competence, and skills of all staff[131]. - The Group's employee remuneration is reviewed annually based on performance appraisals and other relevant factors[130]. Future Outlook and Strategy - The Group aims to strengthen its reputation for providing high-quality, value-for-money fast food experiences while achieving stable returns for shareholders[82]. - Despite economic challenges, the Group plans to continue its store expansion in Mainland China, ensuring low rent-to-sales ratios for new stores[78]. - The Group's financial position remains healthy despite the decline in profit and revenue[14]. Corporate Governance and Compliance - The Company has a comprehensive risk management policy detailed in the corporate governance report[152]. - The Board was not aware of any non-compliance with applicable laws and regulations that have a significant impact on the Group as of the report date[161].

[Corporate Information](index=4&type=section&id=%E5%85%AC%E5%8F%B8%E8%B3%87%E6%96%99) This section lists the company's board of directors, professional committees, senior management, legal advisors, auditor, and principal bankers[9](index=9&type=chunk)[10](index=10&type=chunk)[13](index=13&type=chunk) [Significant Events in FY2025](index=6&type=section&id=%E4%BA%8C%E9%9B%B6%E4%BA%8C%E4%BA%94%E5%B9%B4%E8%B2%A1%E6%94%BF%E5%B9%B4%E5%BA%A6%E9%87%8D%E5%A4%A7%E4%BA%8B%E4%BB%B6) The Group achieved key milestones in project delivery, new launches, capital market activities, and asset disposals this fiscal year[17](index=17&type=chunk)[19](index=19&type=chunk)[22](index=22&type=chunk) - **Project Delivery & Opening**: Commenced delivery of Aspen in London, Hyll on Holland in Singapore, and Queen's Wharf Residences (Tower 4) in Brisbane; Dorsett Kai Tak hotel in Hong Kong began its soft opening, and the initial phase of Queen's Wharf integrated resort in Brisbane opened[17](index=17&type=chunk)[21](index=21&type=chunk) - **New Project Launches**: Launched the "THE MORAYS" residential project in Hong Kong, the Kingfisher building at Red Bank Riverside in Manchester, and the 640 Bourke Street project in Melbourne[17](index=17&type=chunk)[22](index=22&type=chunk) - **Capital & Financing**: BC Invest successfully issued two RMBS bonds totaling over A$1 billion; the Group secured its third sustainability-linked loan facility of HK$540 million[17](index=17&type=chunk)[18](index=18&type=chunk)[19](index=19&type=chunk) - **Asset Disposal & Restructuring**: Completed the sale of certain UK car parks and entered into agreements to sell its stake in BC Invest and a hotel asset in London to optimize the asset portfolio[19](index=19&type=chunk)[22](index=22&type=chunk) [Financial Highlights](index=8&type=section&id=%E8%B2%A1%E5%8B%99%E6%91%98%E8%A6%81) [Income Statement Summary](index=8&type=section&id=%E6%90%8D%E7%9B%8A%E8%A1%A8%E6%91%98%E8%A6%81) In FY2025, revenue decreased by 6.2%, leading to a net loss attributable to shareholders of HK$1.275 billion due to non-cash impairments Income Statement Summary (HK$ million) | Indicator | FY2025 | FY2024 | Y-o-Y Change | | :--- | :--- | :--- | :--- | | Revenue | 9,572 | 10,204 | -6.2% | | Gross Profit | 2,361 | 2,785 | -15.2% | | Net Profit╱(Loss) Attributable to Shareholders | -1,275 | 226 | N/A | | Adjusted Cash Profit | 266 | 780 | -65.9% | | Total Dividend (HK cents) | 1.0 | 14.0 | -92.9% | [Balance Sheet Summary](index=9&type=section&id=%E8%B2%A1%E5%8B%99%E7%8B%80%E6%B3%81%E8%A1%A8%E6%91%98%E8%A6%81) As of March 31, 2025, total assets and net asset value declined, while the adjusted net gearing ratio remained relatively stable at 67.6% Balance Sheet Summary (HK$ million) | Indicator | 31 March 2025 | 31 March 2024 | Change | | :--- | :--- | :--- | :--- | | Cash Balance and Investment Securities | 3,878 | 4,920 | -21.2% | | Adjusted Total Assets | 61,224 | 65,943 | -7.2% | | Adjusted Net Asset Value Attributable to Shareholders | 28,505 | 30,362 | -6.1% | | Adjusted Net Gearing Ratio (%) | 67.6% | 68.1% | -0.5 p.p. | | Adjusted Net Asset Value Per Share (HK$) | 9.32 | 10.77 | -13.5% | [Chairman and CEO's Statement](index=12&type=section&id=%E4%B8%BB%E5%B8%AD%E5%8F%8A%E8%A1%8C%E6%94%BF%E7%B8%BD%E8%A3%81%E5%A0%B1%E5%91%8A%E6%9B%B8) The statement highlights business resilience, prioritizes deleveraging through asset monetization, and explains the dividend policy amidst economic challenges - Despite economic challenges and non-cash impairments affecting profitability, the Group's **adjusted revenue exceeded HK$10 billion for the second consecutive year**, and it recorded a positive adjusted cash profit, reflecting the resilience of its core businesses[33](index=33&type=chunk) - The Group's top priority is to **reduce its gearing ratio**, which has already seen a decline thanks to recent residential project completions and a solid pre-sale business[35](index=35&type=chunk) - To lower debt levels, the Group is actively executing a non-core asset monetization strategy, having **realized approximately HK$1.2 billion in FY2025**, including its stake in BC Invest and certain UK assets, which is expected to positively impact future financial performance[37](index=37&type=chunk) - To preserve cash and reduce the gearing ratio, the Board has decided not to recommend a final dividend but considers **resuming dividend payments a top priority** as soon as practicable[33](index=33&type=chunk) [Co-Managing Directors' Report](index=16&type=section&id=%E8%81%AF%E5%B8%AD%E8%91%A3%E4%BA%8B%E7%B8%BD%E7%B6%93%E7%90%86%E5%A0%B1%E5%91%8A%E6%9B%B8) [Key Achievements and Business Updates](index=16&type=section&id=%E4%B8%BB%E8%A6%81%E6%88%90%E5%B0%B1%E5%8F%8A%E6%9C%80%E6%96%B0%E6%A5%AD%E5%8B%99%E6%83%85%E6%B3%81) The report reviews FY2025 performance, noting steady hotel revenue growth, strong property development momentum, and strategic initiatives to reduce debt Overview of Business Segment Performance | Business Segment | FY2025 Revenue | Y-o-Y Change | Key Developments | | :--- | :--- | :--- | :--- | | Hotel Operations | Approx. HK$2.1 billion | +2.3% | Opening of Dorsett Kai Tak, Hong Kong; acquisition of 10% stake in a Singapore hotel | | Property Development | Approx. HK$7.2 billion (Adjusted) | +5.3% | Delivery of multiple projects; cumulative pre-sale value reached HK$8.9 billion | | Car Park Operations | HK$713 million | -2.6% | Adjusted gross margin increased to 28.3%; disposal of UK car parks | | Gaming Operations | HK$409 million | +1.6% | Phase one opening of the QWB project's casino | - The Group is actively managing its balance sheet to enhance liquidity and reduce debt by **disposing of non-core assets and businesses** (such as UK car parks, a London hotel asset, and its stake in BC Invest) and accelerating project collections[53](index=53&type=chunk)[59](index=59&type=chunk) [Performance Summary](index=19&type=section&id=%E6%A5%AD%E7%B8%BE%E6%91%98%E8%A6%81) In FY2025, the Group reported a 6.2% decline in revenue to HK$9.6 billion but a 3.8% increase in adjusted revenue to HK$10.6 billion FY2025 Performance Summary | Indicator | Amount | Y-o-Y Change | | :--- | :--- | :--- | | Revenue | Approx. HK$9.6 billion | -6.2% | | Adjusted Revenue | Approx. HK$10.6 billion | +3.8% | | Net Loss Attributable to Shareholders | Approx. HK$1.275 billion | From profit to loss | | Adjusted Cash Profit | Approx. HK$2.66 billion | -65.9% | | Adjusted Net Asset Value Per Share | HK$9.32 | -13.5% | | Full-Year Dividend | 1.0 HK cent per share | -92.9% | [Capital Structure](index=20&type=section&id=%E8%B3%87%E6%9C%AC%E6%9E%B6%E6%A7%8B) The Group improved its capital structure by reducing total borrowings by HK$2.391 billion, with the adjusted net gearing ratio decreasing to 67.6% - **Total bank loans, notes, and bonds decreased by approximately HK$2.391 billion** year-on-year, mainly due to the repayment of construction loans upon project completion[60](index=60&type=chunk) - The **adjusted net gearing ratio decreased to 67.6%**; excluding the impact of impairments, the pro-forma ratio would have fallen to 65.8%, reflecting the actual effectiveness of debt reduction efforts[60](index=60&type=chunk) - The Group possesses approximately **HK$4.6 billion in unencumbered hotel assets and unsold inventory**, which can be used to raise additional funds and enhance financial flexibility[60](index=60&type=chunk) [Outlook](index=21&type=section&id=%E5%89%8D%E6%99%AF) The Group is optimistic for FY2026, anticipating significant contributions from major project completions and continued growth in the hotel business - In property development, projects expected to be completed in FY2026, such as Victoria Riverside and THE MORAYS, will **generate significant revenue and cash flow**, contributing to debt reduction, with a cumulative pre-sale value of HK$8.9 billion securing future performance[66](index=66&type=chunk) - The hotel business will continue to expand, with approximately **305 rooms expected to be added in the next 12 months**; the strategic location of Dorsett Kai Tak in Hong Kong is set to gradually contribute to recurring income[67](index=67&type=chunk) - The Group anticipates a **decrease in financing costs** and is optimistic about achieving fruitful returns in FY2026, committed to creating sustainable long-term value for stakeholders[69](index=69&type=chunk) [Directors and Senior Management Profile](index=23&type=section&id=%E8%91%A3%E4%BA%8B%E5%8F%8A%E9%AB%98%E7%B4%9A%E7%AE%A1%E7%90%86%E5%B1%A4%E7%B0%A1%E4%BB%8B) This section details the backgrounds and responsibilities of the company's executive directors, INEDs, and senior management team[71](index=71&type=chunk)[73](index=73&type=chunk)[78](index=78&type=chunk)[84](index=84&type=chunk) [Five-Year Financial Summary](index=30&type=section&id=%E4%BA%94%E5%B9%B4%E8%B2%A1%E5%8B%99%E6%A6%82%E8%A6%81) This section presents a five-year summary of the Group's key performance, assets, and liabilities, highlighting financial trends from FY2021 to FY2025 Five-Year Financial Summary (HK$'000) | Indicator | FY2025 | FY2024 | FY2023 | FY2022 | FY2021 | | :--- | :--- | :--- | :--- | :--- | :--- | | **Performance** | | | | | | | Revenue | 9,572,234 | 10,203,679 | 6,478,958 | 5,895,636 | 5,943,694 | | Profit╱(Loss) Before Tax | (897,601) | 585,437 | 729,748 | 1,853,727 | 1,265,827 | | Profit╱(Loss) for the Year | (999,695) | 450,701 | 380,212 | 1,510,536 | 805,740 | | Basic Earnings╱(Loss) Per Share (HK cents) | (41.7) | 8.2 | 6.4 | 49.2 | 20.8 | | **Assets and Liabilities** | | | | | | | Total Assets | 42,543,356 | 47,261,297 | 53,422,780 | 54,804,316 | 49,900,788 | | Total Liabilities | (29,444,808) | (32,389,953) | (37,774,568) | (36,894,384) | (32,846,525) | | Owners' Funds | 12,793,500 | 14,583,163 | 15,258,728 | 17,533,321 | 16,680,933 | [Management Discussion and Analysis](index=31&type=section&id=%E7%AE%A1%E7%90%86%E5%B1%A4%E8%A8%8E%E8%AB%96%E5%8F%8A%E5%88%86%E6%9E%90) [Financial Review](index=31&type=section&id=%E8%B2%A1%E5%8B%99%E5%9B%9E%E9%A1%A7) This section analyzes financial performance, liquidity, and capital structure, noting a revenue decline and net loss but successful debt reduction efforts [1. Profit and Loss Analysis](index=31&type=section&id=1.%20%E6%BA%A2%E5%88%A9%E5%8F%8A%E8%99%A7%E6%90%8D%E5%88%86%E6%9E%90) FY2025 consolidated revenue was HK$9.57 billion, with a net loss attributable to shareholders of HK$1.275 billion due to financing costs and one-off expenses Revenue and Adjusted Gross Margin by Business Segment (FY2025) | Business Segment | Revenue (HK$ million) | Adjusted Gross Margin (%) | | :--- | :--- | :--- | | Property Development | 6,179 | 26.0% | | Hotel Operations and Management | 2,077 | 44.4% | | Car Park Operations and Facilities Management | 713 | 28.3% | | Gaming Operations | 409 | 43.0% | - Despite solid revenue performance, the Group's overall profitability was significantly impacted by **financing costs and various one-off, non-operating expenses**, leading to a net loss attributable to shareholders[105](index=105&type=chunk) [2. Liquidity, Financial Resources and Net Gearing](index=33&type=section&id=2.%20%E6%B5%81%E5%8B%95%E8%B3%87%E9%87%91%E3%80%81%E8%B2%A1%E5%8B%99%E8%B3%87%E6%BA%90%E5%8F%8A%E8%B3%87%E7%94%A2%E8%B2%A0%E5%82%B5%E6%B7%A8%E9%A1%8D) The Group reduced total borrowings by HK$2.391 billion to HK$25.371 billion, with an adjusted net gearing ratio of 67.6% as of March 31, 2025 Key Balance Sheet Metrics (HK$ million) | Indicator | 31 March 2025 | 31 March 2024 | | :--- | :--- | :--- | | Total Bank Loans, Notes and Bonds | 25,371 | 27,762 | | Liquidity Position | 3,878 | 4,920 | | Net Debt | 21,493 | 22,842 | | Adjusted Net Gearing Ratio | 67.6% | 68.1% | - The Group implemented several strategies to reduce debt, including: - **Accelerating project completion**: Expediting delivery of projects like Perth Hub and Queen's Wharf Residences to repay construction loans - **Actively monetizing inventory**: Promoting cash inflow through the sale of existing stock - **Disposing of non-core assets**: Realizing approximately HK$1.2 billion from non-core assets and businesses, such as UK car parks and the BC Invest stake - **Enhancing the hotel portfolio**: New hotel openings contributing cash flow and strengthening recurring income[112](index=112&type=chunk)[114](index=114&type=chunk) [3. Foreign Exchange Management](index=37&type=section&id=3.%20%E5%A4%96%E5%8C%AF%E7%AE%A1%E7%90%86) The Group's financial performance is exposed to foreign currency fluctuations, with details provided on the impact of exchange rate changes on profit and net assets - The Group hedges its investment risk in non-Hong Kong operations by borrowing in local currencies; in FY2025, exchange rate fluctuations of major currencies like AUD, RMB, and GBP against HKD impacted both the income statement and balance sheet[123](index=123&type=chunk) [4. Net Asset Value Per Share](index=38&type=section&id=4.%20%E6%AF%8F%E8%82%A1%E8%B3%87%E7%94%A2%E6%B7%A8%E5%80%BC) As of March 31, 2025, the adjusted net asset value per share was HK$9.32, based on an adjusted NAV of HK$28.505 billion Net Asset Value Per Share | Indicator | 31 March 2025 | 31 March 2024 | | :--- | :--- | :--- | | Adjusted Net Asset Value Attributable to Shareholders (HK$ million) | 28,505 | 30,362 | | Number of Issued Shares (million) | 3,059 | 2,818 | | Adjusted Net Asset Value Per Share (HK$) | 9.32 | 10.77 | [5. Capital Expenditure](index=39&type=section&id=5.%20%E8%B3%87%E6%9C%AC%E9%96%8B%E6%94%AF) Capital expenditure for FY2025 was approximately HK$798 million, primarily for hotel projects, with commitments expected to decrease significantly next year - **FY2025 capital expenditure was approximately HK$798 million**, mainly for the construction of Dorsett Canary Wharf, Dao by Dorsett North London, and Dorsett Perth[129](index=129&type=chunk) - **Capital commitments stood at approximately HK$1.387 billion**, primarily for hotel development projects, and are expected to decrease substantially in the next fiscal year[130](index=130&type=chunk) [Business Review](index=40&type=section&id=%E6%A5%AD%E5%8B%99%E5%9B%9E%E9%A1%A7) This section reviews the operational performance of core business segments, including property development, hotels, car parks, and gaming [1. Property Segment](index=40&type=section&id=1.%20%E7%89%A9%E6%A5%AD%E5%88%86%E9%83%A8) The property segment maintains a strong pipeline with a cumulative pre-sale value of HK$8.9 billion and an estimated GDV of HK$61 billion - As of March 31, 2025, the **cumulative attributable pre-sale value and unbooked contracted sales of properties under development was approximately HK$8.9 billion**, providing a solid foundation for future performance[134](index=134&type=chunk) - The Group's active residential property development projects have an **expected attributable gross development value (GDV) of approximately HK$61 billion**, with projects spanning multiple markets including Australia, the UK, Hong Kong, and Malaysia[137](index=137&type=chunk)[142](index=142&type=chunk) [2. Hotel Operations and Management](index=53&type=section&id=2.%20%E9%85%92%E5%BA%97%E6%A5%AD%E5%8B%99%E5%8F%8A%E7%AE%A1%E7%90%86) The hotel segment, with 35 hotels, saw a slight revenue increase to HK$1.918 billion, though performance varied across different regions Dorsett Group FY2025 Operational Performance | Indicator | FY2025 | FY2024 | Y-o-Y Change | | :--- | :--- | :--- | :--- | | Revenue (HK$ million) | 1,918 | 1,869 | +2.6% | | Occupancy Rate | 72.9% | 73.5% | -0.6 ppt | | Average Room Rate (HK$) | 785 | 783 | +0.3% | | RevPAR (HK$) | 572 | 576 | -0.7% | - The **Hong Kong market recovered slower than expected** due to a shift in travel patterns of Mainland tourists towards "same-day trips" and an increase in local residents traveling north, leading to a decline in both occupancy and average room rates[191](index=191&type=chunk)[194](index=194&type=chunk) - The **Malaysian and Australian markets showed strong performance**, with both revenue and occupancy rates recording growth, demonstrating the resilience of the geographical diversification strategy[191](index=191&type=chunk)[196](index=196&type=chunk)[208](index=208&type=chunk) [3. Car Park Operations and Facilities Management](index=58&type=section&id=3.%20%E5%81%9C%E8%BB%8A%E5%A0%B4%E6%A5%AD%E5%8B%99%E5%8F%8A%E8%A8%AD%E6%96%BD%E7%AE%A1%E7%90%86) Car park revenue decreased by 2.6% to HK$713 million due to portfolio optimization, but adjusted gross margin significantly improved to 28.3% - Although revenue decreased by 2.6% due to the disposal of underperforming car parks, the **adjusted gross margin improved from 20.8% to 28.3%**, indicating enhanced operational efficiency[212](index=212&type=chunk) - As part of its asset monetization strategy, the Group **sold its car park in Manchester, UK, for approximately £17.24 million**[213](index=213&type=chunk) [4. Gaming Operations and Facilities Management](index=58&type=section&id=4.%20%E5%8D%9A%E5%BD%A9%E6%A5%AD%E5%8B%99%E5%8F%8A%E8%A8%AD%E6%96%BD%E7%AE%A1%E7%90%86) Gaming revenue grew by 1.6% to HK$409 million, supported by the successful phase one opening of the QWB project in Brisbane - **Palasino Group's gaming revenue increased slightly by 1.6% to HK$409 million**, mainly driven by an increase in the number of slot machines and gaming attendance[214](index=214&type=chunk) - The **first phase of the casino at the QWB project**, in which the Group holds a 25% stake, successfully opened in August 2024 with a positive market response, laying the foundation for future cash flow growth[220](index=220&type=chunk)[221](index=221&type=chunk) [5. Provision of Mortgage Services](index=60&type=section&id=5.%20%E6%8F%90%E4%BE%9B%E6%8C%89%E6%8F%AD%E6%9C%8D%E5%8B%99) The Group has agreed to divest its entire stake in BC Invest as part of its strategy to dispose of non-core assets - The Group has entered into an agreement to **sell its 53.21% stake in BC Invest** for an initial consideration of approximately A$106 million, expecting to record a disposal gain of approximately HK$235 million in the first half of FY2026[224](index=224&type=chunk) - Post year-end, in May 2025, the Group **disposed of its mortgage portfolio in Hong Kong for approximately HK$485 million**, further increasing its liquidity[225](index=225&type=chunk) [Environmental, Social and Governance (ESG)](index=61&type=section&id=%E7%92%B0%E5%A2%83%E3%80%81%E7%A4%BE%E6%9C%83%E5%8F%8A%E7%AE%A1%E6%B2%BB) The Group is advancing its ESG agenda by developing a net-zero roadmap and securing a HK$540 million sustainability-linked loan - Following the TCFD framework, the Group has **engaged an independent professional firm to conduct a climate risk analysis** to identify significant climate-related risks and opportunities and integrate them into its risk management and strategic framework[227](index=227&type=chunk) - The Group successfully arranged its **third sustainability-linked loan of HK$540 million**, linking interest rates to ESG key performance indicators, with interest savings to be reinvested in the Group's ESG initiatives[228](index=228&type=chunk) [Outlook](index=61&type=section&id=%E5%B1%95%E6%9C%9B) The Group is confident about FY2026, expecting significant cash flow from project completions to drive deleveraging and create long-term shareholder value - Projects expected to be completed in FY2026 (such as THE MORAYS and Victoria Riverside) have an **attributable GDV of approximately HK$12 billion**, which will provide solid revenue and cash flow for deleveraging[229](index=229&type=chunk) - The **cumulative attributable pre-sale and unbooked sales value remains at approximately HK$8.9 billion**, providing visibility for near- to medium-term revenue[230](index=230&type=chunk) - The hotel business will further expand with the opening of two new hotels in London, while the QWB project and Palasino gaming operations are expected to deliver long-term value and growth opportunities[231](index=231&type=chunk)[232](index=232&type=chunk) [Non-GAAP Financial Measures](index=64&type=section&id=%E9%9D%9E%E5%85%AC%E8%AA%8D%E6%9C%83%E8%A8%88%E5%8E%9F%E5%89%87%E8%B2%A1%E5%8B%99%E8%A8%88%E9%87%8F) [Non-GAAP Financial Measures](index=64&type=section&id=%E9%9D%9E%E5%85%AC%E8%AA%8D%E6%9C%83%E8%A8%88%E5%8E%9F%E5%89%87%E8%B2%A1%E5%8B%99%E8%A8%88%E9%87%8F) This section provides definitions and reconciliations for non-GAAP measures like adjusted cash profit to offer a clearer view of core operating performance Reconciliation of (Loss)/Profit Attributable to Shareholders to Adjusted Cash Profit (HK$'000) | Item | FY2025 | FY2024 | | :--- | :--- | :--- | | **(Loss)╱Profit Attributable to Shareholders of the Company** | **(1,275,122)** | **226,100** | | Less: Change in fair value of investment properties (after tax) | 210,368 | (3,324) | | Add: Impairment loss on properties held for sale | 311,065 | – | | Add: Impairment loss recognised by associates and joint ventures | 465,875 | – | | Add: Depreciation and impairment of property, plant and equipment | 487,224 | 499,044 | | Other adjustments | (433,403) | 58,469 | | **Adjusted Cash Profit (Non-GAAP)** | **266,007** | **780,289** | Reconciliation of Adjusted Net Gearing Ratio (HK$ million) | Item | 31 March 2025 | 31 March 2024 | | :--- | :--- | :--- | | Total Equity | 13,099 | 14,871 | | Add: Hotel revaluation surplus | 18,681 | 18,682 | | **Adjusted Total Equity (Non-GAAP)** | **31,780** | **33,553** | | Net Debt | 21,493 | 22,842 | | **Adjusted Net Gearing Ratio (Non-GAAP)** | **67.6%** | **68.1%** | [Awards and Honours](index=68&type=section&id=%E7%8D%8E%E9%A0%85%E5%8F%8A%E6%A6%AE%E8%AD%BD) This section lists the numerous awards received by the Group during the year, recognizing its excellence in corporate governance, IR, ESG, and brand value[253](index=253&type=chunk)[254](index=254&type=chunk)[255](index=255&type=chunk)[256](index=256&type=chunk) [Diversified and Balanced Business Portfolio](index=78&type=section&id=%E5%A4%9A%E5%85%83%E5%8C%96%E5%8F%8A%E5%9D%87%E8%A1%A1%E4%B9%8B%E6%A5%AD%E5%8B%99%E7%B5%84%E5%90%88) The Group operates a diversified business portfolio across property, hotels, car parks, and gaming, with a geographical footprint in Asia-Pacific and Europe[304](index=304&type=chunk)[308](index=308&type=chunk)[310](index=310&type=chunk) [Major Projects](index=80&type=section&id=%E4%B8%BB%E8%A6%81%E9%A0%85%E7%9B%AE) This section showcases the Group's flagship residential, mixed-use, and hotel projects across its key global markets[313](index=313&type=chunk)[318](index=318&type=chunk)[321](index=321&type=chunk)[334](index=334&type=chunk) [Directors' Report](index=92&type=section&id=%E8%91%A3%E4%BA%8B%E6%9C%83%E5%A0%B1%E5%91%8A) This report provides statutory disclosures on the Group's principal activities, financial results, dividend policy, share capital, and corporate governance - The Board of Directors' report outlines the Group's principal activities, financial performance, dividend policy, share capital changes, and other statutory disclosures[376](index=376&type=chunk)[377](index=377&type=chunk) - Due to the loss recorded in FY2025 and to preserve cash, the Board **resolved not to recommend a final dividend**, bringing the full-year dividend to 1.0 HK cent per share[382](index=382&type=chunk) - The report confirms that as of March 31, 2025, the Chairman and CEO, Mr. David CHIU, held an aggregate interest of **approximately 56.12% of the Company's shares** through controlled corporations and other means[413](index=413&type=chunk)[417](index=417&type=chunk) [Corporate Governance Report](index=104&type=section&id=%E4%BC%81%E6%A5%AD%E7%AE%A1%E6%B2%BB%E5%A0%B1%E5%91%8A%E6%9B%B8) This report details the company's corporate governance framework, confirming compliance with the CG Code and explaining the roles of the board and its committees - The report confirms that for the year ended March 31, 2025, the Company **complied with the code provisions of the Corporate Governance Code**, with the only deviation being the roles of Chairman and CEO being held by the same individual (Mr. David CHIU), which the Board believes provides strong and consistent leadership[439](index=439&type=chunk)[443](index=443&type=chunk) - The Board has established an **Executive Committee, ESG Steering Committee, Audit Committee, Remuneration Committee, and Nomination Committee**, each with clear written terms of reference reporting to the Board[453](index=453&type=chunk) - The Board confirms it has established and annually reviewed an **effective risk management and internal control system**, covering procedures for risk identification, assessment, response, and monitoring, and has an anti-corruption and whistleblowing policy in place[471](index=471&type=chunk)[481](index=481&type=chunk) [Financial Statements and Notes](index=116&type=section&id=%E8%B2%A1%E5%8B%99%E5%A0%B1%E8%A1%A8%E5%8F%8A%E9%99%84%E8%A8%BB) [Independent Auditor's Report](index=116&type=section&id=%E7%8D%A8%E7%AB%8B%E6%A0%B8%E6%95%B8%E5%B8%AB%E5%A0%B1%E5%91%8A%E6%9B%B8) The auditor, Deloitte, issued an unqualified opinion on the financial statements, identifying the valuation of investment properties as a key audit matter - The auditor, Deloitte, issued an **unqualified opinion** on the consolidated financial statements for the year[492](index=492&type=chunk) - The **"Valuation of investment properties" was identified as a key audit matter** due to its carrying amount of HK$5.825 billion (approx. 13.7% of total assets) and the significant judgment and estimation involved in determining its fair value[494](index=494&type=chunk)[495](index=495&type=chunk) [Consolidated Financial Statements](index=121&type=section&id=%E7%B6%9C%E5%90%88%E8%B2%A1%E5%8B%99%E5%A0%B1%E8%A1%A8) This section presents the detailed consolidated income statement, balance sheet, and statements of equity changes and cash flows for the fiscal year Key Data from Consolidated Income Statement (HK$'000) | Item | FY2025 | FY2024 | | :--- | :--- | :--- | | Revenue | 9,572,234 | 10,203,679 | | Gross Profit | 2,360,653 | 2,784,757 | | (Loss) Profit Before Tax | (897,601) | 585,437 | | (Loss) Profit for the Year | (999,695) | 450,701 | | (Loss) Attributable to Shareholders of the Company | (1,275,122) | 226,100 | Key Data from Consolidated Balance Sheet (HK$'000) | Item | 31 March 2025 | 31 March 2024 | | :--- | :--- | :--- | | Total Assets | 42,543,356 | 47,261,297 | | Total Liabilities | 29,444,808 | 32,389,953 | | Total Equity | 13,098,548 | 14,871,344 | [Notes to the Consolidated Financial Statements](index=129&type=section&id=%E7%B6%9C%E5%90%88%E8%B2%A1%E5%8B%99%E5%A0%B1%E8%A1%A8%E9%99%84%E8%A8%BB) The notes provide detailed explanations of accounting policies, segment information, and breakdowns of assets and liabilities, crucial for understanding the financial statements - **Note 6** provides a detailed breakdown of revenue, results, and assets for each business segment (Property Development, Hotels, Car Parks, Gaming) and geographical region (Australia, Hong Kong, UK)[587](index=587&type=chunk)[589](index=589&type=chunk) - **Note 16** discloses that the fair value of investment properties is HK$5.825 billion, with a fair value loss of HK$236 million recorded for the year[632](index=632&type=chunk) - **Notes 31 and 34** detail the breakdown, maturity profile, and interest rates of bank borrowings and notes, totaling approximately HK$25.37 billion[687](index=687&type=chunk)[694](index=694&type=chunk) [Schedule of Major Properties](index=234&type=section&id=%E4%B8%BB%E8%A6%81%E7%89%A9%E6%A5%AD%E4%B8%80%E8%A6%BD%E8%A1%A8) This section provides a detailed list of the Group's major properties worldwide, categorized by type and including details on location, interest, and status[776](index=776&type=chunk)[801](index=801&type=chunk)[823](index=823&type=chunk) [Glossary](index=262&type=section&id=%E5%AD%97%E5%BD%99) This section defines specific terms, abbreviations, and definitions used throughout the report to aid reader comprehension[832](index=832&type=chunk)[834](index=834&type=chunk)[835](index=835&type=chunk)

[Company Information](index=3&type=section&id=Company%20Information) [Board of Directors](index=3&type=section&id=Board%20of%20Directors) The Company's Board of Directors consists of executive directors Lo Yuen Cheong (Chairman) and Lo Yik Cheong, non-executive director Chan Wai Ying, and independent non-executive directors Leung Wai Tat, Lo Man Chi, Chow Wai Yung, and So Ki Wai (appointed on July 15, 2024) - The Board of Directors includes two executive directors, one non-executive director, and four independent non-executive directors, with Mr. So Ki Wai appointed on July 15, 2024[3](index=3&type=chunk) [Committee Composition](index=3&type=section&id=Committee%20Composition) The Audit Committee, Remuneration Committee, and Nomination Committee all include independent non-executive directors, with Mr. So Ki Wai appointed to all committees on July 15, 2024 - The Audit Committee, Remuneration Committee, and Nomination Committee all include independent non-executive directors, with Mr. So Ki Wai appointed to all committees on July 15, 2024[3](index=3&type=chunk) [Company Contact Information](index=3&type=section&id=Company%20Contact%20Information) The Company Secretary is Lo Wai Ting, the auditor is PricewaterhouseCoopers, and major banks include The Hongkong and Shanghai Banking Corporation Limited and Industrial and Commercial Bank of China (Asia) Limited - Company Secretary is Lo Wai Ting, auditor is PricewaterhouseCoopers[3](index=3&type=chunk) - Major banks include The Hongkong and Shanghai Banking Corporation Limited and Industrial and Commercial Bank of China (Asia) Limited[3](index=3&type=chunk) - Company stock code is **2193**, website is http://www.manking.com.hk[4](index=4&type=chunk) [Chairman's Statement](index=4&type=section&id=Chairman's%20Statement) [Performance and Strategy](index=4&type=section&id=Performance%20and%20Strategy) Despite challenges in Hong Kong's construction industry, the Group's financial performance improved for the year ended March 31, 2025, with a significant reduction in gross loss, and the 20.3% interest in the Pakistan coal transshipment business continued to provide stable financial contributions, with cash dividends of approximately HKD 29.1 million received during the year - The Group's financial performance improved for the year ended March 31, 2025, with a significant reduction in gross loss, primarily due to decreased project costs after the completion of temporary works[6](index=6&type=chunk) - The **20.3%** interest in the Pakistan coal transshipment business continued to provide stable financial contributions, with cash dividends of approximately **HKD 29.1 million** received during the year[6](index=6&type=chunk) - Leveraging a robust capital structure, the Group is committed to improving core construction services, meeting client requirements, and pursuing strategic diversification to enhance long-term resilience and growth[7](index=7&type=chunk) [Group Employees](index=4&type=section&id=Group%20Employees) Facing labor shortages, the Group maintained a stable employee turnover rate and enhanced productivity through training programs and innovative technologies, demonstrating a strong commitment to safety and professional development with zero fatalities and an accident rate well below the industry average - The construction industry faces labor shortages, but the Group maintained a stable employee turnover rate over the past two years[8](index=8&type=chunk) - Productivity is enhanced through targeted training programs and the adoption of innovative technologies, prioritizing the integration of digitalization and advanced technology into public works projects[8](index=8&type=chunk) - The Group remains steadfast in its commitment to employee safety and professional development, achieving zero fatalities and an accident rate significantly below the industry average[8](index=8&type=chunk) [Prospects](index=4&type=section&id=Prospects) The Group maintains a cautious outlook for the new financial year, as the HKSAR Government's budget prioritization of large-scale projects may limit funding for projects within its specialized areas, while anticipating continued challenges from rising tender prices, supply chain competition, and labor shortages, necessitating prudent risk management and active pursuit of new opportunities and strategic diversification - A cautious outlook is maintained for the new financial year, as the government's budget prioritization of large-scale projects may limit funding for projects within the Group's specialized areas[10](index=10&type=chunk) - Challenges such as rising tender prices, competition for supply chain resources, and labor shortages are expected to persist, requiring prudent risk management, robust project execution, and effective procurement strategies[10](index=10&type=chunk) - Supported by solid capital reserves, the Group is actively seeking new business opportunities and diversification initiatives to expand its project portfolio, while also considering strategic mergers, acquisitions, and business collaborations[10](index=10&type=chunk) [Management Discussion and Analysis](index=5&type=section&id=Management%20Discussion%20and%20Analysis) [Business Review](index=5&type=section&id=Business%20Review) The Group primarily provides civil engineering services in Hong Kong, including roads and drainage, site formation, and port works, with five ongoing projects totaling approximately HKD 521.1 million in remaining contract value and order book as of March 31, 2025, while the Pakistan coal transshipment business contributed a profit share of approximately HKD 20.2 million - The Group primarily provides civil engineering services in Hong Kong, including roads and drainage, site formation, and port works[12](index=12&type=chunk) - As of March 31, 2025, the Group has five ongoing projects, with an estimated remaining contract amount and total value of engineering orders of approximately **HKD 521.1 million**[12](index=12&type=chunk) - The Pakistan coal transshipment business provided good returns to the Group, with the Company's share of profit amounting to approximately **HKD 20.2 million** for the year ended March 31, 2025[12](index=12&type=chunk) [Key Risks and Uncertainties](index=5&type=section&id=Key%20Risks%20and%20Uncertainties) The Group faces key risks including reliance on successful tender awards, impact of tender price estimation errors on profitability, the non-representativeness of historical performance for future results, and adverse effects from supplier and subcontractor delays or defects, while maintaining good relationships with clients and suppliers and adhering to environmental regulations - Key risks include reliance on successful tender awards, the impact of tender price estimation errors on profitability, the non-representativeness of historical revenue and profit margins for future performance, and adverse effects from project delays or defects by suppliers and subcontractors[15](index=15&type=chunk) - The Group's major clients are the HKSAR Government and reputable organizations, resulting in limited credit risk[13](index=13&type=chunk) - The Group complies with Hong Kong environmental protection laws and regulations and ensures subcontractors adhere to environmental management policies[14](index=14&type=chunk) [Compliance with Laws and Regulations](index=6&type=section&id=Compliance%20with%20Laws%20and%20Regulations) The Group has complied with all relevant laws, rules, and regulations in all material aspects and will continue to invest resources to strengthen internal controls to mitigate non-compliance issues - The Group has complied with all other relevant laws, rules, and regulations in all material aspects[16](index=16&type=chunk) - It will continue to deploy sufficient resources and efforts to maintain and strengthen internal controls, thereby reducing any non-compliance issues[16](index=16&type=chunk) [Financial Review](index=6&type=section&id=Financial%20Review) For the year ended March 31, 2025, the Group's revenue remained stable, gross loss significantly decreased, other income and net gains varied, and administrative expenses remained stable, while a financial asset impairment provision of approximately HKD 11.8 million was recognized due to increased credit risk from a joint venture partner, resulting in a net loss of approximately HKD 21.1 million, a narrower loss compared to the previous year 2025 Financial Highlights (Consolidated) | 指标 | 2025年 (thousand HKD) | 2024年 (thousand HKD) | 变化 (%) | | :--- | :--- | :--- | :--- | | Revenue | 335,702 | 338,486 | -0.8% | | Gross Loss | (11,264) | (26,645) | -57.7% | | Gross Loss Margin | 3.4% | 7.9% | -4.5pp | | Other Income | 7,586 | 8,983 | -15.5% | | Net Other Gains | 772 | 40 | 1830% | | Administrative Expenses | (26,371) | (26,647) | -1.0% | | Financial Asset Impairment | (11,752) | - | N/A | | Operating Loss | (41,029) | (44,269) | -7.3% | | Finance Costs | (418) | (356) | 17.4% | | Share of Profit from Associates | 20,179 | 20,059 | 0.6% | | Loss for the Year | (21,125) | (22,742) | -7.1% | | Basic and Diluted Loss Per Share (HK cents) | (5.03) | (5.42) | -7.2% | - Gross loss and gross loss margin significantly decreased, primarily due to a road and drainage public works project entering its final stage and a steady decline in project costs after the completion of temporary works[18](index=18&type=chunk) - A financial asset impairment provision of approximately **HKD 11.8 million** was recognized, primarily due to a joint venture partner's failure to meet contractual repayment obligations for a road and drainage project in the Kai Tak Development Area, leading to increased credit risk[22](index=22&type=chunk) - Excluding the one-off impairment of financial assets, the adjusted net loss for the year was approximately **HKD 9.4 million**, a decrease of approximately **58.8%** compared to the year ended March 31, 2024[27](index=27&type=chunk) [Consolidated Statement of Financial Position](index=7&type=section&id=Consolidated%20Statement%20of%20Financial%20Position) As of March 31, 2025, the Group's net assets decreased by approximately 7.8% to HKD 251.2 million, with non-current assets declining due to reduced investment in an associate and impairment of property, plant, and equipment, and current assets decreasing primarily due to net cash used in operating activities and impairment of amounts due from joint ventures Consolidated Statement of Financial Position Key Data | 指标 | 2025年 (thousand HKD) | 2024年 (thousand HKD) | 变化 (%) | | :--- | :--- | :--- | :--- | | Net Assets | 251,239 | 272,430 | -7.8% | | Non-current Assets | 122,982 | 139,065 | -11.6% | | Current Assets | 248,358 | 273,705 | -9.2% | | Cash and Cash Equivalents | 143,607 | 153,853 | -6.7% | | Total Interest-bearing Bank Borrowings | 4,028 | 599 | 572.5% | | Gearing Ratio | 1.6% | 0.2% | 1.4pp | | Total Equity | 251,239 | 272,430 | -7.8% | - Non-current assets decreased primarily due to a reduction in investment in an associate arising from the share of post-acquisition results and other comprehensive income (net of dividends), coupled with a decrease in property, plant, and equipment due to impairment during the year[28](index=28&type=chunk) - Current assets decreased primarily due to net cash used in operating activities and impairment of amounts due from joint ventures/other partners of joint ventures[28](index=28&type=chunk) [Liquidity and Financial Resources](index=7&type=section&id=Liquidity%20and%20Financial%20Resources) As of March 31, 2025, the Group held cash and cash equivalents of approximately HKD 143.6 million and bank deposits of approximately HKD 37.3 million, with total interest-bearing bank borrowings of approximately HKD 4.0 million and unutilized bank loan facilities of approximately HKD 23.7 million, facing no significant impact from currency exchange rate fluctuations - As of March 31, 2025, the Group had cash and cash equivalents of approximately **HKD 143.6 million**, and bank deposits maturing in over three months of approximately **HKD 37.3 million**[29](index=29&type=chunk) - Total interest-bearing bank borrowings amounted to approximately **HKD 4.0 million**, bearing interest at floating rates with no financial instruments for hedging[29](index=29&type=chunk) - The Group had unutilized bank loan facilities of approximately **HKD 23.7 million**[30](index=30&type=chunk) [Capital Structure and Gearing Ratio](index=7&type=section&id=Capital%20Structure%20and%20Gearing%20Ratio) As of March 31, 2025, total equity was approximately HKD 251.2 million, and the gearing ratio was approximately 1.6%, an increase from the previous year - As of March 31, 2025, total equity was approximately **HKD 251.2 million**[31](index=31&type=chunk) - The gearing ratio (total borrowings as a percentage of total equity) was approximately **1.6%**, an increase from **0.2%** in 2024[32](index=32&type=chunk) [Pledged Assets, New Business, and Capital Commitments](index=8&type=section&id=Pledged%20Assets,%20New%20Business,%20and%20Capital%20Commitments) As of March 31, 2025, the Group had no pledged bank deposits, and other deposits of approximately HKD 3.323 million pledged to an insurance institution in 2024 were released during the year, with no new business initiated or significant capital commitments - As of March 31, 2025, the Group had no pledged bank deposits[33](index=33&type=chunk) - Other deposits of approximately **HKD 3.323 million** pledged to an insurance institution in 2024 were released during the year[33](index=33&type=chunk) - For the year ended March 31, 2025, the Company did not commence any new types of business and had no capital commitments regarding property, plant, and equipment that were contracted for but not yet recognized as liabilities[35](index=35&type=chunk)[36](index=36&type=chunk) [Performance Guarantees and Contingent Liabilities](index=8&type=section&id=Performance%20Guarantees%20and%20Contingent%20Liabilities) Clients for the Group's construction contracts require performance guarantees, which are typically released upon contract completion, and as of March 31, 2025, the Group had no outstanding performance guarantees (compared to HKD 3.323 million in 2024) - Clients for the Group's construction contracts require performance guarantees, which are typically released upon completion or substantial completion of the contract[37](index=37&type=chunk) - As of March 31, 2025, the Group had no outstanding performance guarantees (2024: **HKD 3.323 million**)[38](index=38&type=chunk) [Employees and Remuneration Policy](index=8&type=section&id=Employees%20and%20Remuneration%20Policy) As of March 31, 2025, the Group had 164 full-time employees with employee costs of approximately HKD 70.2 million, adhering to employment ordinances, ensuring timely salary payments, and determining remuneration based on individual capabilities and market rates, while also adopting a share option scheme to reward and retain directors and staff - As of March 31, 2025, the Group had **164** full-time employees (2024: 167 employees)[39](index=39&type=chunk) - Employee costs (excluding directors' emoluments) for the year ended March 31, 2025, totaled approximately **HKD 70.2 million** (2024: HKD 76.9 million)[39](index=39&type=chunk) - The Group complies with employment ordinances, pays salaries on time, and determines remuneration based on individual capabilities, development potential, and market salary levels, having adopted a share option scheme to reward and retain directors and staff[39](index=39&type=chunk) [Future Outlook](index=8&type=section&id=Future%20Outlook) The Group maintains a cautious outlook for the future, as government budget priorities for large-scale projects may limit funding for its specialized areas, yet this year's performance significantly improved with a substantial reduction in gross loss, while the Group actively seeks new opportunities, diversifies strategies, and aims to enhance gross profit through innovative technology and AI, with reduced coal transshipment volume in the Pakistan "Belt and Road" project offset by increased bareboat charter income - The Group maintains a cautious outlook for the future, as government budget priorities for large-scale projects may limit funding for its specialized areas[40](index=40&type=chunk) - This year's performance significantly improved compared to the previous year, with a substantial reduction in gross loss, primarily due to the substantial completion of temporary works projects and a steady decline in costs[40](index=40&type=chunk) - Coal transshipment volume for the Pakistan "Belt and Road" project significantly decreased but was offset by an increase in bareboat charter income, with no significant impact on project performance expected[41](index=41&type=chunk) - The Group will continue to seek other investment opportunities for diversification and aims to enhance its gross profit by utilizing innovative technology and artificial intelligence to boost productivity, efficiency, and safety[44](index=44&type=chunk) [Material Investments, Acquisitions, and Future Plans](index=9&type=section&id=Material%20Investments,%20Acquisitions,%20and%20Future%20Plans) The Group holds a 20.3% equity interest in Richview with a total investment of approximately HKD 96.7 million, aiming for sustainable growth and maximized shareholder returns through business diversification, having recognized approximately HKD 20.2 million in profit share from Richview and received approximately HKD 29.1 million in cash dividends for the year ended March 31, 2025, with no material acquisitions or disposals of subsidiaries and associates, and no current future plans for significant investments or capital assets - The Group holds a **20.3%** equity interest in Richview, with a total investment of approximately **HKD 96.7 million**, aiming to maintain sustainable growth and maximize shareholder returns through business diversification[45](index=45&type=chunk) - For the year ended March 31, 2025, the Group's share of Richview's results was approximately **HKD 20.2 million**, and cash dividends of approximately **HKD 29.1 million** were received[45](index=45&type=chunk) - For the year ended March 31, 2025, the Company had no material acquisitions or disposals of subsidiaries and associates, and the directors currently have no future plans for any material investments or capital assets[47](index=47&type=chunk)[48](index=48&type=chunk) [Directors and Senior Management](index=10&type=section&id=Directors%20and%20Senior%20Management) [Executive Directors](index=10&type=section&id=Executive%20Directors) Mr. Lo Yuen Cheong (Chairman) and Mr. Lo Yik Cheong are Executive Directors, with over 44 and 43 years of engineering industry experience respectively, responsible for the Group's financial, operational, and business development strategies - Mr. Lo Yuen Cheong (Chairman) has over **44 years** of experience in the civil engineering industry, responsible for the Group's financial and operational matters, and jointly responsible for formulating business development strategies[49](index=49&type=chunk) - Mr. Lo Yik Cheong has over **43 years** of experience in the engineering industry, responsible for operations and business development, and jointly responsible for formulating business development strategies[49](index=49&type=chunk) [Non-Executive Director](index=10&type=section&id=Non-Executive%20Director) Ms. Chan Wai Ying is a Non-Executive Director with over 30 years of accounting experience, providing advice to the Board on internal controls and financial management - Ms. Chan Wai Ying is a Non-Executive Director with over **30 years** of accounting experience, providing advice on internal controls and financial management[52](index=52&type=chunk) [Independent Non-Executive Directors](index=11&type=section&id=Independent%20Non-Executive%20Directors) Mr. Leung Wai Tat, Professor Lo Man Chi, Ms. Chow Wai Yung, and Mr. So Ki Wai (appointed on July 15, 2024) serve as Independent Non-Executive Directors, each possessing extensive experience in engineering, academia, and accounting - Mr. Leung Wai Tat has over **50 years** of experience in the engineering industry, having served as Managing Director of Jacobs China Limited[56](index=56&type=chunk) - Professor Lo Man Chi is a full professor in the Department of Civil and Environmental Engineering at The Hong Kong University of Science and Technology, with extensive research and practical experience in civil and environmental engineering[57](index=57&type=chunk) - Ms. Chow Wai Yung is a member of the Hong Kong Institute of Certified Public Accountants, with experience in accounting and corporate restructuring[57](index=57&type=chunk) - Mr. So Ki Wai, appointed on July 15, 2024, has **47 years** of experience in the engineering industry, having served as a director of Zhen Hua Engineering Co., Ltd. and Deputy General Manager of the Marketing Department of China Harbour Engineering Company Limited[58](index=58&type=chunk) [Senior Management](index=12&type=section&id=Senior%20Management) Mr. Lam Tat Shing is the General Manager (Contracts and Operations), Mr. Yu King Tang is the Contracts Manager, and Ms. Lo Wai Ting is the Financial Controller and Company Secretary, each possessing extensive experience in civil engineering, site management, finance, and corporate governance - Mr. Lam Tat Shing is the General Manager (Contracts and Operations), with over **25 years** of experience in the civil engineering industry, responsible for site operations and management[60](index=60&type=chunk) - Mr. Yu King Tang is the Contracts Manager, with over **24 years** of experience in the civil engineering industry, responsible for site operations and management of civil projects[61](index=61&type=chunk) - Ms. Lo Wai Ting is the Financial Controller and Company Secretary, with over **18 years** of experience in auditing, accounting, financial management, and company secretarial matters[62](index=62&type=chunk) [Directors' Report](index=13&type=section&id=Directors'%20Report) [Principal Activities and Results](index=13&type=section&id=Principal%20Activities%20and%20Results) The Company's principal activities are investment holding and corporate management services, with its main subsidiaries and joint ventures engaged in construction and civil engineering projects, and for the year ended March 31, 2025, the Group recorded a loss, thus the Board does not recommend a final dividend - The Company's principal activities are investment holding and the provision of corporate management services, with its main subsidiaries and joint ventures engaged in construction and civil engineering projects[64](index=64&type=chunk)[65](index=65&type=chunk) - The Group recorded a loss for the year ended March 31, 2025, and the Board does not recommend the payment of any final dividend[66](index=66&type=chunk)[67](index=67&type=chunk) [Distributable Reserves and Financial Summary](index=13&type=section&id=Distributable%20Reserves%20and%20Financial%20Summary) As of March 31, 2025, the Company's distributable reserves under the Cayman Islands Companies Act amounted to HKD 2,407,000, with a summary of the Group's results, assets, and liabilities for the past five financial years provided on page 102 of this annual report - As of March 31, 2025, the Company's distributable reserves under the Cayman Islands Companies Act amounted to **HKD 2,407,000**[69](index=69&type=chunk) - A summary of the Group's results, assets, and liabilities for the past five financial years is presented on page 102 of this annual report[70](index=70&type=chunk) [Annual General Meeting and Share Register Closure](index=13&type=section&id=Annual%20General%20Meeting%20and%20Share%20Register%20Closure) To determine shareholders entitled to attend and vote at the Annual General Meeting on August 28, 2025, the Company will suspend share transfer registration from August 25 to August 28, 2025 - To determine shareholders entitled to attend and vote at the Annual General Meeting on August 28, 2025, the Company will suspend share transfer registration from August 25 to August 28, 2025[71](index=71&type=chunk) [Other Financial and Corporate Matters](index=13&type=section&id=Other%20Financial%20and%20Corporate%20Matters) Except for the share option scheme, no equity-related agreements could lead to the Company issuing shares, with charitable donations of HKD 75,000 made for the year ended March 31, 2025, and no treasury shares held or sold, while the Company's articles of association or Cayman Islands law contain no pre-emptive rights provisions - Except for the Company's share option scheme disclosed in Note 30 to the consolidated financial statements, no equity-related agreements will or may result in the Company issuing shares[72](index=72&type=chunk) - Charitable donations made by the Group for the year ended March 31, 2025, amounted to **HKD 75,000**[73](index=73&type=chunk) - Details of changes in the Company's share capital are set out in Note 25 to the consolidated financial statements, and no treasury shares were held or sold during the year[75](index=75&type=chunk)[76](index=76&type=chunk) [Board Composition and Service Contracts](index=14&type=section&id=Board%20Composition%20and%20Service%20Contracts) During the year and up to the report date, the Board comprised executive directors Lo Yuen Cheong and Lo Yik Cheong, non-executive director Chan Wai Ying, and independent non-executive directors Leung Wai Tat, Lo Man Chi, Chow Wai Yung, and So Ki Wai (appointed on July 15, 2024), with Mr. Lo Yik Cheong, Mr. Leung Wai Tat, and Ms. Chow Wai Yung retiring and eligible for re-election at the upcoming AGM, and the Company having received annual independence confirmations from all independent non-executive directors, whose service contracts are for three years, while non-executive directors' appointment letters are for one year - During the year and up to the report date, the Board of Directors included executive directors Lo Yuen Cheong and Lo Yik Cheong, non-executive director Chan Wai Ying, and independent non-executive directors Leung Wai Tat, Lo Man Chi, Chow Wai Yung, and So Ki Wai (appointed on July 15, 2024)[78](index=78&type=chunk) - Mr. Lo Yik Cheong, Mr. Leung Wai Tat, and Ms. Chow Wai Yung will retire at the upcoming Annual General Meeting and are eligible for re-election[79](index=79&type=chunk) - Executive directors' service contracts are for a term of three years, while non-executive directors' and independent non-executive directors' appointment letters are for one year and three years, respectively[81](index=81&type=chunk)[82](index=82&type=chunk)[83](index=83&type=chunk) [Management Contracts and Remuneration Policy](index=15&type=section&id=Management%20Contracts%20and%20Remuneration%20Policy) No management contracts involving the Company's entire or any substantial part of its business were entered into or existed during the year, and the Remuneration Committee regularly monitors and recommends remuneration for directors and senior management based on operating results, individual performance, and market levels, with total employee costs (excluding directors' emoluments) of approximately HKD 70.2 million for 164 full-time employees as of March 31, 2025, and a share option scheme adopted to reward and retain directors and employees - No management contracts involving the Company's entire or any substantial part of its business were entered into or existed during the year[85](index=85&type=chunk) - The Remuneration Committee considers and recommends to the Board the emoluments and other benefits payable to directors, with reference to the Company's operating results, individual performance, and comparable market levels[86](index=86&type=chunk) - Employee costs (excluding directors' emoluments) for the year ended March 31, 2025, totaled approximately **HKD 70.2 million** (2024: HKD 76.9 million)[86](index=86&type=chunk) - The Group has adopted a share option scheme to reward and retain directors and employees for their contributions to the Group's continued operation and development[87](index=87&type=chunk) [Directors' Interests in Material Transactions and Securities](index=15&type=section&id=Directors'%20Interests%20in%20Material%20Transactions%20and%20Securities) Except for related party transactions, no directors or their associated entities had significant interests in material transactions, arrangements, or contracts related to the Group's business with the Company, its subsidiaries, or holding company, and as of March 31, 2025, Mr. Lo Yuen Cheong and Mr. Lo Yik Cheong held a 71.59% interest in the Company's issued share capital through discretionary trusts and controlled corporations, with no share repurchases or convertible securities arrangements during the year, and no directors or chief executives holding or granted rights to subscribe for Company shares - Except as disclosed in the section "Related Party Transactions and Connected Transactions," no directors or entities connected with directors had a material interest, directly or indirectly, in any transaction, arrangement, or contract of significance to the business of the Company, its subsidiaries, or its holding company that was in force at the end of the year or at any time during the year[88](index=88&type=chunk) Directors' and Chief Executive's Interests in the Company's Shares | 董事姓名 | 身份╱性質 | 所持已發行普通股數目（好倉） | 本公司已發行股本的百分比 | | :--- | :--- | :--- | :--- | | Lo Yuen Cheong | Beneficiary and co-founder of discretionary trust, interest in controlled corporation and interest in spouse | 300,372,000 shares | 71.59% | | Lo Yuen Cheong | Beneficial owner | 4,716,000 shares | 1.12% | | Lo Yik Cheong | Beneficiary and co-founder of discretionary trust, interest in controlled corporation and interest in spouse | 300,372,000 shares | 71.59% | | Chan Wai Ying | Beneficial owner | 1,500,000 shares | 0.36% | | Leung Wai Tat | Beneficial owner | 100,000 shares | 0.02% | - No directors or chief executives (including their spouses and children under 18) held or were granted or exercised any rights to subscribe for shares, related shares, or debentures of the Company and its associated corporations during the year[91](index=91&type=chunk) [Share Option Scheme](index=17&type=section&id=Share%20Option%20Scheme) The Company adopted a share option scheme on June 3, 2015, to provide participants with an opportunity to acquire ownership interests and encourage them to enhance company value, with a maximum of 41,500,000 shares (10% of issued shares at listing) available for grant, and 34,874,000 shares available for issue as of June 26, 2025, with an exercise period of up to 10 years and a subscription price not less than specific market prices or par value, and no share options outstanding, granted, exercised, cancelled, or lapsed for the year ended March 31, 2025 - The share option scheme aims to provide participants with an opportunity to acquire ownership interests in the Company and encourage them to strive to enhance the value of the Company and its shares for the overall benefit of the Company and its shareholders[95](index=95&type=chunk) - The maximum number of shares for which options may be granted under the share option scheme shall not exceed **41,500,000** shares in aggregate, representing **10%** of the total issued shares at the commencement of trading on the Stock Exchange[97](index=97&type=chunk) - As of June 26, 2025, the shares available for issue under the share option scheme were **34,874,000** shares, representing approximately **8.3%** of the total issued shares[97](index=97&type=chunk) - For the year ended March 31, 2025, no share options were outstanding, granted, exercised, cancelled, or lapsed[104](index=104&type=chunk) [Major Customers and Suppliers](index=19&type=section&id=Major%20Customers%20and%20Suppliers) For the year ended March 31, 2025, the Group's top five customers accounted for 96.7% of total revenue, with the largest single customer contributing approximately 46.8%, while the top five suppliers and subcontractors accounted for approximately 53.8% of total purchases and 32.9% of total subcontracting fees, respectively, and no directors, their associates, or shareholders holding more than 5% of the Company's share capital had interests in any of the top five customers and/or top five suppliers/subcontractors Major Customer, Supplier, and Subcontractor Proportions | 类型 | 2025年占比 | 2024年占比 | | :--- | :--- | :--- | | Top five customers as % of total revenue | 96.7% | 96.7% | | Largest single customer as % of total revenue | 46.8% | 34.3% | | Top five suppliers as % of total purchases | 53.8% | 50.0% | | Largest single supplier as % of total purchases | 12.1% | 15.7% | | Top five subcontractors as % of total subcontracting fees | 32.9% | 51.2% | | Largest single subcontractor as % of total subcontracting fees | 12.7% | 17.9% | - No directors, their associates, or shareholders holding more than **5%** of the Company's share capital had interests in any of the Group's top five customers and/or top five suppliers/subcontractors for the year ended March 31, 2025[105](index=105&type=chunk) [Related Party Transactions and Public Float](index=19&type=section&id=Related%20Party%20Transactions%20and%20Public%20Float) Details of significant related party transactions are provided in Note 35 to the consolidated financial statements, none of which constitute discloseable connected transactions or continuing connected transactions as defined by the Listing Rules, and as of the report date, the Company has maintained the public float required by the Listing Rules - Details of significant related party transactions are set out in Note 35 to the consolidated financial statements, none of which constitute discloseable connected transactions or continuing connected transactions as defined by the Listing Rules[106](index=106&type=chunk) - As of the date of this report, the Company has maintained the public float required by the Listing Rules[107](index=107&type=chunk) [Share Repurchases and Other Matters](index=19&type=section&id=Share%20Repurchases%20and%20Other%20Matters) For the year ended March 31, 2025, the Company repurchased and cancelled a total of 224,000 shares for approximately HKD 41,000, aiming to enhance shareholder value in the long term, with no directors engaged in competing businesses during the year, no material contracts entered into with controlling shareholders, and the controlling shareholders having signed a non-competition undertaking, which is reviewed annually by independent non-executive directors, and the Company has arranged liability insurance for its directors and officers - For the year ended March 31, 2025, the Company repurchased a total of **224,000** shares through the Stock Exchange for a total consideration of approximately **HKD 41,000**, which were subsequently cancelled, aiming to enhance shareholder value in the long term[109](index=109&type=chunk) - Each director has confirmed that they have not engaged in any business that directly or indirectly competes or may compete with the Group's business, or held any interest in such businesses[111](index=111&type=chunk) - The controlling shareholders have entered into a non-competition undertaking, and independent non-executive directors annually review its compliance, with no non-compliance issues identified during the year[113](index=113&type=chunk) - The Company has arranged appropriate directors' and officers' liability insurance for its directors and senior officers[115](index=115&type=chunk) [Corporate Governance and Auditor](index=20&type=section&id=Corporate%20Governance%20and%20Auditor) The Company's Board of Directors is committed to maintaining high standards of corporate governance, with detailed information provided in the "Corporate Governance Report" on pages 20 to 30 of the annual report, and the Group's consolidated financial statements for the year ended March 31, 2025, have been audited by PricewaterhouseCoopers, with a resolution to re-appoint them to be proposed at the upcoming Annual General Meeting, and no change in auditor over the past three years - The Company's Board of Directors is committed to maintaining high standards of corporate governance in accordance with the Corporate Governance Code set out in Appendix C1 of the Listing Rules[116](index=116&type=chunk) - The Group's consolidated financial statements for the year ended March 31, 2025, have been audited by PricewaterhouseCoopers[118](index=118&type=chunk) - PricewaterhouseCoopers will retire at the upcoming Annual General Meeting and is eligible for re-election, with no change in the Company's auditor over the past three years[118](index=118&type=chunk)[119](index=119&type=chunk) [Corporate Governance Report](index=21&type=section&id=Corporate%20Governance%20Report) [Corporate Governance Overview](index=21&type=section&id=Corporate%20Governance%20Overview) The Company is committed to maintaining the highest standards of corporate governance and has complied with the Corporate Governance Code in Appendix C1 of the Stock Exchange Listing Rules for the year ended March 31, 2025, with Mr. Lo Yuen Cheong serving as both Chairman and Chief Executive Officer, an arrangement the Board believes facilitates efficient management without compromising the balance of power - The Company has adopted, applied, and complied with the Corporate Governance Code set out in Appendix C1 of the Stock Exchange Listing Rules for the year ended March 31, 2025[122](index=122&type=chunk) - Mr. Lo Yuen Cheong serves as both Chairman and Chief Executive Officer, an arrangement the Board believes facilitates efficient management without compromising the balance of power[122](index=122&type=chunk) [Corporate Culture, Values, and Strategy](index=21&type=section&id=Corporate%20Culture,%20Values%20and%20Strategy) The Group primarily provides civil engineering services in Hong Kong, upholding a culture of integrity, respect, collaboration, inclusivity, and care, committed to innovation and excellence, with its corporate culture reflected in employee engagement, retention, training, whistleblowing, data privacy, anti-corruption policies, and compliance with laws and regulations - The Group primarily operates as a main contractor providing civil engineering services in Hong Kong, upholding a culture of integrity, respect, collaboration, inclusivity, and care[123](index=123&type=chunk) - Corporate culture is reflected in various aspects including employee engagement, retention and training, whistleblowing, data privacy, and anti-corruption policies, as well as compliance with laws, rules, and regulations[123](index=123&type=chunk) [Board of Directors](index=21&type=section&id=Board%20of%20Directors) The Board of Directors, with a balanced composition, is responsible for the Group's overall strategy, policies, and business plans, overseeing financial performance, internal controls, and risk management, comprising 7 directors (two executive, one non-executive, and four independent non-executive), holding at least four meetings annually, and ensuring directors receive adequate information and independent professional advice - The Board of Directors is committed to the Group's overall strategy, policies, and business plans, overseeing the Group's financial performance, internal controls, and risk management[124](index=124&type=chunk) - The Board comprises **7** directors, including two executive directors, one non-executive director, and four independent non-executive directors, meeting the Listing Rules requirements[126](index=126&type=chunk) - The Board is required to hold regular meetings, with at least four Board meetings annually, and ensure Board papers are sent to all directors at least **3 days** prior to meetings[126](index=126&type=chunk) [Directors' Independence and Liability Insurance](index=22&type=section&id=Directors'%20Independence%20and%20Liability%20Insurance) The Board has established mechanisms to ensure independent perspectives, with at least four independent non-executive directors comprising over 50% of the Board, and the Chairman holding at least one private meeting annually with independent non-executive directors, while the Company has arranged liability insurance for its directors and senior officers covering costs, losses, expenses, and liabilities arising from their duties - The Board must have at least four independent non-executive directors, and at least one-third of the Board must be independent non-executive directors. Currently, the Board has four independent non-executive directors, comprising over **50%** of the Board[128](index=128&type=chunk) - The Chairman holds at least one private meeting annually with independent non-executive directors, providing a channel for direct communication of independent opinions to the Chairman[128](index=128&type=chunk) - The Company has arranged appropriate directors' and officers' liability insurance for its directors and senior officers, covering costs, losses, expenses, and liabilities arising from the performance of their duties[129](index=129&type=chunk) [Chairman and Chief Executive Officer Responsibilities](index=22&type=section&id=Chairman%20and%20Chief%20Executive%20Officer%20Responsibilities) Mr. Lo Yuen Cheong serves concurrently as the Company's Chairman and Chief Executive Officer, responsible for leading Board affairs, formulating overall strategies and policies, and efficiently managing the Group's business and overall operations, with daily business delegated to respective department heads - Mr. Lo Yuen Cheong concurrently serves as the Company's Chairman and Chief Executive Officer, responsible for leading and organizing Board affairs, ensuring its effectiveness, setting agendas, and formulating the Company's overall strategies and policies[131](index=131&type=chunk) - He also undertakes the responsibilities of Chief Executive Officer, managing the Group's business and overall operations efficiently, with daily business delegated to department heads responsible for different business areas[131](index=131&type=chunk) [Appointment and Re-election of Directors](index=23&type=section&id=Appointment%20and%20Re-election%20of%20Directors) Executive directors' service contracts are initially for three years, while non-executive and independent non-executive directors' appointments are for one and three years respectively, all subject to the Company's articles of association requiring one-third of directors to retire by rotation and be eligible for re-election, with the Nomination Committee responsible for nominating candidates - Executive directors' service contracts are initially for a term of three years, while non-executive directors' and independent non-executive directors' appointments are for one year and three years, respectively[132](index=132&type=chunk) - In accordance with the Company's articles of association, one-third of the directors shall retire by rotation, provided that each director shall be subject to retirement by rotation at least once every three years[132](index=132&type=chunk) - Should a vacancy arise on the Board, candidates will be nominated by the Nomination Committee and proposed to the Board[132](index=132&type=chunk) [Corporate Governance Functions](index=23&type=section&id=Corporate%20Governance%20Functions) The Board is responsible for formulating and reviewing corporate governance policies, overseeing the training and development of directors and senior management, ensuring compliance with laws and regulations, establishing codes of conduct, reviewing and approving environmental, social, and governance strategies, and monitoring compliance with the Corporate Governance Code - The Board is responsible for formulating and reviewing the Group's corporate governance policies and practices[136](index=136&type=chunk) - Reviewing and monitoring the training and continuous professional development of the Group's directors and senior management, as well as policies and practices in complying with legal and regulatory requirements[136](index=136&type=chunk) - Reviewing and approving environmental, social, and governance strategies and related policies, and reviewing the Group's compliance with the Corporate Governance Code (Appendix C1 of the Listing Rules) adopted from time to time[136](index=136&type=chunk) [Board Committees](index=23&type=section&id=Board%20Committees) The Company has established a Nomination Committee, Remuneration Committee, and Audit Committee, all with terms of reference formulated in accordance with the Corporate Governance Code, and each committee includes independent non-executive directors to ensure independent judgment and effective operation - The Company has established a Nomination Committee, Remuneration Committee, and Audit Committee, with their terms of reference formulated in accordance with the Corporate Governance Code and published on the Company's and Stock Exchange's websites[134](index=134&type=chunk) [Nomination Committee](index=23&type=section&id=Nomination%20Committee) The Nomination Committee comprises six members, including four independent non-executive directors and two executive directors, primarily responsible for regularly reviewing Board composition, identifying and nominating suitable candidates, assessing the independence of independent non-executive directors, and conducting Board evaluations, having revised and adopted a nomination policy based on criteria such as integrity, experience, time commitment, and diversity - The Nomination Committee currently comprises six members, namely four independent non-executive directors and two executive directors[135](index=135&type=chunk) - Its primary responsibilities include regularly reviewing the Board's composition, identifying and nominating suitable candidates for Board membership, assessing the independence of independent non-executive directors, and conducting Board evaluations[135](index=135&type=chunk) - The Committee has revised and adopted a nomination policy, with selection criteria including reputation for integrity, achievements and experience, time commitment, and diversity (e.g., gender, age, cultural and educational background, ethnicity, professional experience, skills, knowledge, and length of service)[137](index=137&type=chunk) [Remuneration Committee](index=24&type=section&id=Remuneration%20Committee) The Remuneration Committee comprises five members, including four independent non-executive directors and one executive director, responsible for reviewing and recommending directors' and senior management's remuneration to the Board, with independent non-executive directors' fees recommended by the Remuneration Committee and approved by the Annual General Meeting, and for the year ended March 31, 2025, senior management (excluding directors) remuneration ranged from HKD 2,000,001 to HKD 2,500,000 (2 persons) and HKD 1,000,001 to HKD 1,500,000 (1 person) - The Remuneration Committee currently comprises five members, namely four independent non-executive directors and one executive director[138](index=138&type=chunk) - It is responsible for reviewing the remuneration of directors and senior management and making recommendations to the Board for approval[138](index=138&type=chunk) Senior Management Remuneration Ranges (Excluding Directors) | 薪酬範圍 | 人數 | | :--- | :--- | | HKD 2,000,001 to HKD 2,500,000 | 2 | | HKD 1,000,001 to HKD 1,500,000 | 1 | [Audit Committee](index=25&type=section&id=Audit%20Committee) The Audit Committee comprises five members, including four independent non-executive directors and one non-executive director, with primary responsibilities including recommending the appointment, re-appointment, and removal of external auditors to the Board, assessing their independence and performance, and reviewing the effectiveness of financial reporting procedures, risk management, and internal control systems, holding at least two meetings annually with the external auditors - The Audit Committee currently comprises five members, namely four independent non-executive directors and one non-executive director[141](index=141&type=chunk) - Its primary responsibilities include making recommendations to the Board regarding the appointment, re-appointment, and removal of external auditors, approving their remuneration and terms of engagement, and assessing their independence and performance[141](index=141&type=chunk) - Reviewing the effectiveness of the Group's financial reporting procedures, risk management, and internal control systems, as well as reviewing the Group's financial information and compliance matters. It holds at least two meetings annually with the Company's external auditors[141](index=141&type=chunk) [Risk Management and Internal Control Systems](index=26&type=section&id=Risk%20Management%20and%20Internal%20Control%20Systems) The Board is responsible for assessing and determining the nature and extent of risks the Group is willing to accept and overseeing the effectiveness of risk management and internal control systems, with clear levels of responsibility and reporting procedures established, and an external independent consultant engaged for internal audit functions, identifying no significant risks or control deficiencies, leading the Board to conclude that the risk management and internal control systems are effective and adequate in all material aspects - The Board is responsible for assessing and determining the nature and extent of risks the Group is willing to accept in achieving its strategic objectives, and management has designed, implemented, and monitored the Group's risk management and internal control systems[143](index=143&type=chunk) - An external independent consultant was engaged during the year to perform internal audit functions and conduct internal control reviews, identifying no significant risks or control deficiencies[144](index=144&type=chunk) - Based on the review results from the independent professional firm and the Audit Committee, the Board concluded that the risk management and internal control systems are effective and adequate in all material aspects[144](index=144&type=chunk) [Disclosure of Inside Information and Governance Policy](index=26&type=section&id=Disclosure%20of%20Inside%20Information%20and%20Governance%20Policy) The Board has implemented procedures and internal controls for handling and disseminating inside information, ensuring equal and timely public disclosure in accordance with the Securities and Futures Ordinance and Listing Rules, and the Group places high importance on the conduct of directors and employees, having established anti-corruption and whistleblowing policies and systems to foster a healthy corporate culture - The Board has implemented procedures and internal controls for handling and disseminating inside information, ensuring equal and timely public disclosure of the Company's inside information in accordance with the Securities and Futures Ordinance and the Listing Rules[145](index=145&type=chunk) - The Group places high importance on the conduct, personal, and professional standards of its directors and employees, having established anti-corruption and whistleblowing policies and systems, which contribute to fostering a healthy corporate culture and good corporate governance practices[146](index=146&type=chunk) [Quality, Health, Safety, and Environmental Management](index=27&type=section&id=Quality,%20Health,%20Safety%20and%20Environmental%20Management) The Group has established an integrated management system compliant with ISO9001:2008 and ISO14001:2015 standards, committed to providing high-quality products and services, prioritizing employee health and safety and environmental matters, and has formed a Safety, Health, and Environmental Committee aimed at creating a zero-accident work environment, fostering a positive culture, implementing effective management systems, and enhancing health, safety, and environmental benefits - The Group has established an integrated management system compliant with ISO9001:2008, customer, and statutory and regulatory requirements, and has obtained ISO14001:2015 Environmental Management System certification[147](index=147&type=chunk) - The health and safety of all persons visiting and working at the Group's premises, along with environmental matters, have been and will continue to be the Group's top priority[149](index=149&type=chunk) - A Safety, Health, and Environmental Committee has been established, aiming to create and maintain a zero-accident/injury work environment, foster a positive health, safety, and environmental culture, implement effective management systems, and enhance health, safety, and environmental benefits[149](index=149&type=chunk)[150](index=150&type=chunk)[152](index=152&type=chunk) [Board Diversity Policy](index=27&type=section&id=Board%20Diversity%20Policy) The Company believes that board diversity significantly enhances the quality of company performance, with a policy aimed at establishing and maintaining diversity among directors in terms of skills, experience, knowledge, expertise, culture, independence, age, and gender, and three out of seven directors are female, with no current numerical targets for gender diversity, though the Nomination Committee will discuss measurable targets periodically, and as of March 31, 2025, the overall employee gender ratio was 21.3% female and 78.7% male - The Board Diversity Policy aims to establish and maintain diversity among directors in terms of skills, experience, knowledge, expertise, culture, independence, age, and gender[151](index=151&type=chunk) - Three out of seven directors on the Board are female, believing that gender diversity promotes proper problem-solving, brings different perspectives, and improves decision-making processes[151](index=151&type=chunk) - As of March 31, 2025, the overall employee gender ratio was **21.3%** female and **78.7%** male, considering the current workforce to have reasonable gender diversity given the general male-dominated nature of the civil engineering industry[157](index=157&type=chunk) [Directors' Induction and Continuous Professional Development](index=28&type=section&id=Directors'%20Induction%20and%20Continuous%20Professional%20Development) Each new director receives induction materials covering company business, policies, and director responsibilities to ensure full understanding of relevant requirements, and all directors participate in continuous professional development to develop and update their knowledge and skills, ensuring informed and relevant contributions to the Board, with all directors having participated in continuous professional development for the year ended March 31, 2025 - Each new director receives induction materials covering the Company's business operations, policies, and procedures, as well as general, statutory, and regulatory responsibilities of a director[158](index=158&type=chunk) - All directors should participate in continuous professional development to develop and update their knowledge and skills, ensuring they make continuous informed and relevant contributions to the Board[158](index=158&type=chunk) - For the year ended March 31, 2025, all directors participated in continuous professional development and provided the Company with records of their training[159](index=159&type=chunk) [Model Code for Securities Transactions and Delegation of Management Functions](index=29&type=section&id=Model%20Code%20for%20Securities%20Transactions%20and%20Delegation%20of%20Management%20Functions) The Company has adopted the Model Code for Securities Transactions by Directors of Listed Issuers in Appendix C3 of the Listing Rules as its code for securities transactions by directors and other relevant employees, with all directors confirming compliance, and the Board retains decision-making authority for all material matters, while daily management, administrative, and operational tasks are delegated to executive directors and senior management - The Company has adopted the Model Code for Securities Transactions by Directors of Listed Issuers set out in Appendix C3 of the Listing Rules, and all directors have confirmed their compliance with the Model Code for the year ended March 31, 2025[161](index=161&type=chunk) - The Board retains its decision-making authority for all material matters concerning the Company, including approving and overseeing all policy matters, overall strategy and budget, internal control and risk management systems, material transactions, financial information, appointment of directors, and other significant financial and operational matters[162](index=162&type=chunk) - The Company's daily management, administrative, and operational tasks have been delegated to executive directors and senior management[162](index=162&type=chunk) [Accountability and Company Secretary](index=29&type=section&id=Accountability%20and%20Company%20Secretary) Directors are aware of their responsibility to prepare the Group's financial statements in accordance with applicable laws and regulatory requirements, ensuring a true and fair view of the Company's condition, and management provides sufficient information to the Board to assess company performance and financial position, while Ms. Lo Wai Ting, the Company Secretary and a full-time employee, advises and serves the Board, having received no less than 15 hours of professional training during the year - Directors are aware of their responsibility to prepare the Group's financial statements for the year ended March 31, 2025, in accordance with applicable laws and regulatory requirements, which truly and fairly reflect the Group's state of affairs, operating results, and cash flows[163](index=163&type=chunk) - Management has provided the Board with sufficient explanations and information regarding the Group's financial, operational performance, and business development, enabling the Board to make informed assessments of the Group's performance, financial position, and prospects[164](index=164&type=chunk) - Ms. Lo Wai Ting, the Company Secretary, is a full-time employee of the Company, having received no less than **15 hours** of professional training during the year[166](index=166&type=chunk)[167](index=167&type=chunk) [Shareholder Rights and Communication](index=30&type=section&id=Shareholder%20Rights%20and%20Communication) The Company is committed to active dialogue with shareholders and provides information through its website and Annual General Meetings, with shareholders having the right to appoint proxies to attend and vote and to request extraordinary general meetings, and all resolutions will be decided by poll, with results published on the Company's and Stock Exchange's websites, and a shareholder communication policy established to ensure proper handling of shareholder opinions and concerns - The Company is committed to active dialogue with shareholders and providing information disclosure on significant developments of the Group to shareholders, investors, and other stakeholders[168](index=168&type=chunk) - Any shareholder entitled to attend and vote at the Company's general meetings has the right to appoint another person as their proxy to attend and vote on their behalf[168](index=168&type=chunk) - All resolutions will be decided by poll in accordance with the Listing Rules, and the poll results will be published on the Company's and Stock Exchange's websites after each general meeting[169](index=169&type=chunk) - The Company has established a shareholder communication policy to ensure proper handling of shareholders' opinions and concerns[178](index=178&type=chunk) [Dividend Policy and Auditor's Remuneration](index=30&type=section&id=Dividend%20Policy%20and%20Auditor's%20Remuneration) The Company's dividend policy aims for at least two dividend distributions annually, sharing the Group's performance with shareholders, with actual amounts determined by directors considering various factors, and for the year ended March 31, 2025, remuneration paid/payable to auditor PricewaterhouseCoopers was HKD 1,576,000, with no non-audit services - The Company's dividend policy aims for at least two dividend distributions annually (before the announcement of annual and interim results), with directors committed to sharing the Group's performance with shareholders through dividends[171](index=171&type=chunk) - For the year ended March 31, 2025, remuneration paid/payable to the Company's auditor, PricewaterhouseCoopers, for annual audit and interim review services was **HKD 1,576,000**[173](index=173&type=chunk) - No non-audit services were performed for the year ended March 31, 2025[173](index=173&type=chunk) [Constitutional Documents and Investor Relations](index=31&type=section&id=Constitutional%20Documents%20and%20Investor%20Relations) For the year ended March 31, 2025, the Company revised and adopted its Third Amended and Restated Memorandum and Articles of Association to comply with Listing Rules requirements, and the Group's corporate website features an investor relations section providing company information and financial/non-financial data, committed to enhancing transparency and fostering investor relations - For the year ended March 31, 2025, the Company amended its existing Second Amended and Restated Memorandum and Articles of Association and adopted the Third Amended and Restated Memorandum and Articles of Association to reflect and comply with the requirements of the Listing Rules[175](index=175&type=chunk) - The Group's corporate website, www.manking.com.hk, features a dedicated investor relations section to facilitate effective communication with shareholders, investors, and other stakeholders, providing timely electronic access to company information and other relevant financial and non-financial data[177](index=177&type=chunk) [Environmental, Social and Governance Report](index=32&type=section&id=Environmental,%20Social%20and%20Governance%20Report) [Reporting Scope and Principles](index=32&type=section&id=Reporting%20Scope%20and%20Principles) This Environmental, Social and Governance Report, prepared in accordance with Appendix C2 of the Hong Kong Stock Exchange Listing Rules, covers the period from April 1, 2024, to March 31, 2025, adhering to principles of materiality, balance, quantitative disclosure, and consistency, with the Board bearing ultimate responsibility for ESG strategy and direction, having established a Safety, Health, and Environmental Committee - This Environmental, Social and Governance Report is prepared in accordance with Appendix C2 "Environmental, Social and Governance Reporting Guide" of the Rules Governing the Listing of Securities on The Stock Exchange of Hong Kong Limited, covering the period from April 1, 2024, to March 31, 2025[179](index=179&type=chunk) - The report adheres to the principles of materiality, balance, quantitative disclosure, and consistency[182](index=182&type=chunk) - The Board bears ultimate responsibility for determining the Group's overall environmental, social, and governance strategy and direction, and has implemented internal environmental policies through the establishment of a Safety, Health, and Environmental Committee[180](index=180&type=chunk)[181](index=181&type=chunk) [Stakeholder Engagement and Materiality Assessment](index=33&type=section&id=Stakeholder%20Engagement%20and%20Materiality%20Assessment) The Group values stakeholder engagement, maintaining communication with employees, customers, investors, shareholders, suppliers, subcontractors, government and regulatory bodies, community groups, and media through various channels, and a materiality assessment identified workplace health and safety, customer and project safety, and anti-corruption and compliance as key areas of focus - The Group has communicated with internal and external stakeholders and provided information on the latest developments through various communication channels, including employees, customers, investors and shareholders, suppliers and subcontractors, government and regulatory bodies, community groups and the general public, and media[183](index=183&type=chunk) - The materiality assessment identified 3 "very important" issues: workplace health and safety, customer and project safety, and anti-corruption and compliance[185](index=185&type=chunk)[188](index=188&type=chunk) [Environment](index=35&type=section&id=Environment) The Group is committed to minimizing its negative environmental impact, holdi

目錄 | 3 | 公司資料 | | --- | --- | | 4 | 主席報告書 | | 6 | 摘要 | | 7 | 管理層討論及分析 | | 12 | 董事及高級管理人員履歷詳情 | | 16 | 董事會報告 | | 34 | 企業管治報告 | | 45 | 獨立核數師報告 | | 50 | 綜合損益及其他全面收益表 | | 51 | 綜合財務狀況表 | | 53 | 綜合權益變動表 | | 54 | 綜合現金流量表 | | 56 | 綜合財務報表附註 | | 120 | 五年財務概要 | ޞଙଶ䁭 香港聯合交易所有限公司（「聯交所」）GEM（「GEM」）的特色 GEM的定位，乃為中小型公司提供一個上市的市場，此等公司相比起其他在聯交所上市的公司可能帶有較高投資風 險。有意投資的人士應了解投資於該等公司的潛在風險，並應經過審慎周詳的考慮後方作出投資決定。 由於在GEM上市的公司普遍為中小型公司，在GEM買賣的證券可能會較於主板買賣的證券承受較大的市場波動風險， 同時無法保證在GEM買賣的證券會有高流通量的市場。 香港交易及結算所有限公司及聯交所對本報告之內容概不負責，對其準確性或完整性亦不發表任何聲明， ...

Contents 目錄 | Corporate Information 公司資料 | 2-3 | | --- | --- | | Chairman's Statement 主席報告 | 4-15 | | Major Awards 主要獎項 | 16-18 | | Management Discussion and Analysis 管理層討論及分析 | 19-26 | | Report of the Directors 董事會報告 | 27-42 | | Corporate Governance Report 企業管治報告 | 43-65 | | Independent Auditor's Report 獨立核數師報告 | 66-73 | | Audited Financial Statements 經審核財務報告 | | | Consolidated Statement of Profit or Loss 綜合損益表 | 74 | | Consolidated Statement of Comprehensive Income 綜合全面收益表 | 75 | | Consolidated Statement ...