帝国金融集团(08029) - 2024 - 年度财报

Company and Financial Overview Company Information This chapter outlines Empire Financial Group Limited's fundamental corporate details, including board members, committees, and key operational information - The company's Chairman is Mr. Cheng Ting Kong, and the auditor is Crowe (HK) CPA Limited[6] Financial Highlights For the current fiscal year, the Group's revenue was approximately HKD 31.35 million, with a gross profit of approximately HKD 10.78 million, and a loss attributable to owners of approximately HKD 13.60 million 2024 Fiscal Year Financial Highlights | Metric | Amount (HKD) | | :--- | :--- | | Revenue | Approx. 31,354,000 | | Gross Profit | Approx. 10,776,000 | | Loss Attributable to Owners of the Company | Approx. 13,597,000 | | Year-end Bank Balances and Cash | Approx. 47,600,000 | | Proposed Final Dividend | Not Distributed | Chairman's Statement The Chairman's Statement highlights a 3.57% year-on-year revenue increase to approximately HKD 31.35 million, with a significant reduction in loss attributable to owners to approximately HKD 13.60 million from HKD 117.6 million last year Year-on-Year Performance Change | Metric | FY2024 (HKD) | FY2023 (HKD) | Change | | :--- | :--- | :--- | :--- | | Revenue | 31,354,000 | 30,273,000 | ▲ 3.57% | | Loss Attributable to Owners of the Company | 13,597,000 | 117,622,000 | ▼ 88.44% | - The Group believes the recovery in Bitcoin prices will be beneficial and remains confident in its long-term development[10] Management Discussion and Analysis Financial Performance Review Revenue increased by 3.57% this fiscal year, primarily driven by the cryptocurrency business, which offset declines in financial and equine services, while the annual loss significantly decreased due to insurance claims and reduced impairment losses - The annual loss significantly decreased from HKD 117.6 million to HKD 13.60 million, primarily due to (i) insurance claims under other operating income and (ii) a substantial reduction in impairment losses related to cryptocurrencies during the period[19] Revenue Change by Business Segment | Business Segment | Revenue Change (HKD) | | :--- | :--- | | Cryptocurrency Business | ▲ 12,074,000 | | Financial Services | ▼ 8,403,000 | | Equine Services | ▼ 2,561,000 | | Property Investment | Stable Performance | - Administrative expenses decreased by approximately HKD 17.88 million year-on-year, mainly due to improved internal controls and reduced depreciation expenses[18] Business Review The Group's business encompasses equine services, property investment, financial services, and cryptocurrency mining, with varying outlooks across segments due to market conditions and strategic decisions Equine Services Due to the aging of breeding horses, future revenue is expected to decline, and the Group has no intention of further investing in this segment - The Group anticipates a decline in revenue from the equine services segment in future fiscal years and has no intention of further investment in this segment[29] Property Investment The Group's investment properties in Australia provide stable rental income under a five-year lease term commencing March 31, 2021 - Property investment income is derived from leasing investment properties in Australia to an independent third party, under a five-year lease term commencing March 31, 2021[30] Financial Services Due to market volatility and subdued fundraising activities, the Group maintains a cautious approach to financial services, particularly money lending, resulting in decreased revenue and profit - Due to capital market volatility and subdued trading, the Board maintains a cautious approach to the financial services segment, particularly the money lending business, leading to reduced revenue and profit[31] Money Lending Business Portfolio (March 31, 2024) | Loan Type | Outstanding Principal (HKD) | Number of Loans | Collateral Status | | :--- | :--- | :--- | :--- | | Large Loans | Approx. 14,300,000 | 1 | Secured (Share Charge) | | Small Loans | Approx. 400,000 | 30 | Unsecured | Cryptocurrency Mining The Group commenced Bitcoin mining in April 2021 and, despite a market downturn in 2022, remains confident in its prospects following Bitcoin's strong rebound, though mining activities in Kazakhstan ceased in March 2024 - The Group is confident in the future development of Bitcoin mining and will adopt a flexible approach to seek further development, while having ceased its cryptocurrency mining activities in Kazakhstan in March 2024[41] Liquidity, Financial Resources, and Capital Structure As of March 31, 2024, the Group's current ratio significantly decreased to 0.57:1 from 1.50:1, with current liabilities exceeding current assets, though management believes existing liquid assets are sufficient for business needs while seeking alternative financing Liquidity Indicator Changes | Metric | March 31, 2024 | March 31, 2023 | | :--- | :--- | :--- | | Current Assets | HKD 105,267,000 | HKD 140,728,000 | | Current Liabilities | HKD 185,917,000 | HKD 93,988,000 | | Current Ratio | 0.57 : 1 | 1.50 : 1 | | Bank Balances | HKD 47,600,000 | HKD 66,249,000 | - Management believes the Group has sufficient financial resources for ongoing business needs, but with acceptances payable as a major component of current liabilities, the Group will continue negotiations upon maturity and seek alternative debt and/or equity financing to meet cash flow requirements[42] Prospects and Risks The Group anticipates a recovery in the Hong Kong stock market and plans to enhance its securities business, restart investment migration services, and seek strategic alliances, while facing key risks including country-specific risks, stock market volatility, and cryptocurrency value fluctuations - The Group plans to resume its investment migration business to leverage the Hong Kong government's new Capital Investment Entrant Scheme, aiming to diversify revenue streams[48] - Key risk factors include: - Country Risk: Equine business primarily in Australia, cryptocurrency business in Brunei and the US, facing policy uncertainties[49][50] - Stock Market Volatility: Global stock market uncertainties impact returns from securities trading and asset management services[51] - Cryptocurrency Value Volatility: Cryptocurrency asset values are highly volatile and entirely market-driven[54] Disclaimer of Opinion by Auditor In response to the auditor's disclaimer of opinion due to significant uncertainty regarding going concern, the Board outlined measures including exploring financing, enhancing cost control, and negotiating acceptance bill extensions, which the Audit Committee reviewed and approved - The auditor issued a "Disclaimer of Opinion" on the financial statements for the current fiscal year, its basis being the appropriateness of the going concern assumption for the company[55] - To address going concern issues, the Board plans to take the following measures: 1. Consider other financing arrangements and fundraising options[57] 2. Implement stronger measures to improve working capital and cash flow, including monitoring expenses, enhancing business performance, and seeking new businesses[57] 3. Continue negotiations for the extension of acceptance bills[57] - The Audit Committee has reviewed and agreed with management's action plan regarding the "Disclaimer of Opinion" and requested management to take necessary actions to ensure such an opinion does not recur in the next fiscal year[56] Outlook and Development Outlook and Development For 2024, the Group will closely monitor Hong Kong's challenging economic environment, including delayed interest rate cuts and subdued markets, while implementing stable development strategies and expanding its business portfolio through the acquisition of Unlimited Technology International Limited - Facing a challenging external economic environment, the Group will remain vigilant and formulate stable development strategies to strive for shareholder returns[58] - The Group expanded into new market segments by acquiring equity in Unlimited Technology International Limited, aiming to broaden its business portfolio and revenue streams[58] Directors and Governance Directors and Staff This chapter provides detailed personal biographies, professional backgrounds, and experience of the company's executive and independent non-executive directors - Executive Directors include Chairman Mr. Cheng Ting Kong, Ms. Cheng Mei Ching, and Mr. Jim Tak Lai. Independent Non-Executive Directors include Mr. To Kin Chuen, Mr. Chan Tin Lap, and Mr. Hung Hoi Chap[60][62][63] Directors' Report The Directors' Report outlines the fiscal year's key operations, performance, dividend policy, related party transactions, shareholder equity, and corporate governance practices, confirming no final dividend proposed and compliance with GEM Listing Rules - The Directors do not recommend a final dividend for the year ended March 31, 2024[69] Major Shareholder Holdings (March 31, 2024) | Shareholder Name | Nature of Interest | Number of Shares Held | Percentage of Holding | | :--- | :--- | :--- | :--- | | Mr. Cheng Ting Kong | Interest in Controlled Corporation | 1,437,914,040 | 61.61% | | Fresh Success Investments Ltd | Beneficial Owner | 1,437,914,040 | 61.61% | | Mr. Yeung Hak Kan | Interest in Controlled Corporation | 135,430,000 | 5.80% | | Raywell Holdings Limited | Beneficial Owner | 135,430,000 | 5.80% | - The Group entered into continuing connected transactions for brokerage services with Chairman Mr. Cheng Ting Kong and his associates, and former Executive Director Mr. Lui Man Wah, with annual caps of HKD 0.5 million each, confirmed by the auditor and independent non-executive directors[85][88][91][92] - For the year ended March 31, 2024, neither the Company nor any of its subsidiaries purchased, redeemed, or sold any of the Company's listed securities[105] Corporate Governance Report This report details the Group's corporate governance practices, confirming general compliance with GEM Listing Rules, outlining the board's structure and committee responsibilities, and describing the risk management and internal control systems - During the reporting period, the Company consistently complied with the Corporate Governance Code provisions in Appendix 15 of the GEM Listing Rules, with the only deviation being Chairman Mr. Cheng Ting Kong's inability to attend the 2023 Annual General Meeting due to unforeseen commitments[119][120] - The Board has established three committees: Audit, Remuneration, and Nomination, all chaired by independent non-executive directors[146][149][154] - The Group's risk management and internal control systems are the responsibility of the Board, with design, implementation, and monitoring handled by management with the assistance of external consultants[171][175][181] Auditor's Report and Financial Statements Independent Auditor's Report Independent auditor Crowe (HK) CPA Limited issued a 'Disclaimer of Opinion' on the Group's consolidated financial statements for the year ended March 31, 2024, primarily due to significant uncertainties regarding going concern - The auditor issued a "Disclaimer of Opinion" on the consolidated financial statements for the current year[188] - The basis for the disclaimer of opinion is "Material Uncertainty Related to Going Concern", citing the Group's net loss, net current liabilities, net liabilities position, and impending maturity of significant acceptance bills, which indicate a material uncertainty that may cast significant doubt on the Group's ability to continue as a going concern[189] - The auditor concluded that, due to the inability to obtain sufficient appropriate audit evidence regarding the outcome of management's plans and measures to improve liquidity, they were unable to determine whether the consolidated financial statements were appropriately prepared on a going concern basis[192] Consolidated Statement of Profit or Loss and Other Comprehensive Income For the current fiscal year, the Group reported revenue of HKD 31.354 million and a gross profit of HKD 10.776 million, with the loss attributable to owners significantly improving to HKD 13.597 million from HKD 117.622 million last year, primarily due to improved other income and reduced administrative expenses Consolidated Statement of Profit or Loss Summary | Metric (HKD '000) | 2024 | 2023 | | :--- | :--- | :--- | | Revenue | 31,354 | 30,273 | | Gross Profit | 10,776 | 17,807 | | Other Income and Losses | 8,614 | (70,381) | | Administrative Expenses | (27,260) | (45,139) | | Loss Before Tax | (14,247) | (119,459) | | Loss Attributable to Owners of the Company for the Year | (13,597) | (117,622) | | Basic Loss Per Share (HK cents) | (0.59) | (5.09) | Consolidated Statement of Financial Position As of March 31, 2024, the Group's total assets were HKD 143.353 million, total liabilities were HKD 190.301 million, resulting in a net liability position with capital deficiency expanding to HKD 46.948 million and net current liabilities of approximately HKD 80.65 million Consolidated Statement of Financial Position Summary | Metric (HKD '000) | March 31, 2024 | March 31, 2023 | | :--- | :--- | :--- | | Total Assets | 143,353 | 185,404 | | Non-current Assets | 38,086 | 44,676 | | Current Assets | 105,267 | 140,728 | | Total Liabilities | 190,301 | 218,109 | | Current Liabilities | 185,917 | 93,988 | | Non-current Liabilities | 4,384 | 124,121 | | Net Current (Liabilities) | (80,650) | 46,740 | | Net Liabilities / Capital Deficiency | (46,948) | (32,705) | Consolidated Statement of Cash Flows This fiscal year, the Group generated net cash inflow of HKD 12.582 million from operating activities and HKD 7.492 million from investing activities, while financing activities resulted in a net cash outflow of HKD 36.928 million, leading to a year-end cash balance of HKD 47.60 million Consolidated Statement of Cash Flows Summary | Metric (HKD '000) | 2024 | 2023 | | :--- | :--- | :--- | | Net Cash from Operating Activities | 12,582 | 36,266 | | Net Cash from Investing Activities | 7,492 | 444 | | Net Cash Used in Financing Activities | (36,928) | (54,897) | | Net Decrease in Cash and Cash Equivalents | (16,854) | (18,187) | | Cash and Cash Equivalents at Year-End | 47,600 | 66,249 | Notes to the Consolidated Financial Statements The notes to the financial statements detail accounting policies, significant judgments, and estimates, with key disclosures on going concern (Note 3a), financial instrument risk management (Note 5), segment information (Note 8), acceptance bills (Note 34), and post-reporting period events (Notes 38/48) - Note 3(a) elaborates on the material uncertainty regarding the Group's ability to continue as a going concern, including twelve consecutive years of losses, net current liabilities, and net liabilities, along with management's plans to address these issues[219][220][222] - Note 34 discloses that as of March 31, 2024, outstanding acceptance bills amounted to approximately HKD 107.8 million in principal, extended to mature on January 31, 2025[219][487][489] - Notes 38 and 48 disclose significant post-reporting period events: (i) the completion of the acquisition of a 51% equity interest in Unlimited Technology International Limited on April 22, 2024; and (ii) the receipt of an indicative offer for the sale of Australian investment properties on May 14, 2024[498][499][542] Five-Year Financial Summary The five-year financial summary indicates a continuous decline in Group revenue since FY2020, with the Group recording losses for five consecutive years, and total assets and liabilities showing a downward trend, entering a net liability position since FY2023 Five-Year Financial Data Trends (HKD '000) | Year Ended March 31 | 2024 | 2023 | 2022 | 2021 | 2020 | | :--- | :--- | :--- | :--- | :--- | :--- | | Results | | | | | | | Revenue | 31,354 | 30,273 | 53,691 | 63,724 | 98,073 | | Loss Attributable to Owners of the Company | (13,597) | (117,622) | (106,163) | (61,928) | (60,485) | | Assets and Liabilities | | | | | | | Total Assets | 143,353 | 185,404 | 343,575 | 390,887 | 558,610 | | Total Liabilities | (190,301) | (218,109) | (274,908) | (328,908) | (448,046) | | Net (Liabilities) / Assets | (46,948) | (32,705) | 68,667 | 61,979 | 110,564 |