Company and Financial Overview Chairman's Statement The Chairman highlights a volatile global economy, stable port operations, and anticipates significant business growth from a new partnership - Looking ahead, the global economic environment is expected to remain volatile, and the effectiveness of China's stimulus policies is uncertain; the Group will adopt a prudent strategy to consolidate existing businesses, seek new opportunities, and consider disposing of non-core assets69 - The petroleum port and storage business (Qian Yang) operated stably, while petrochemical trading profits fluctuated due to external factors, and the investment banking business in Mauritius achieved steady growth67 - The company anticipates that its cooperation with the National Pipe Network Group will officially launch within the year, making the terminal its sole sea access point in Guangxi Province, which is expected to significantly increase business volume for the terminal and storage facilities8 Management Discussion and Analysis The Group's loss attributable to owners widened significantly to HK$176 million, driven by investment losses and asset impairments Financial Performance Review The annual loss attributable to owners widened to HK$176 million, mainly due to unrealized losses on an investment and asset impairments Annual Financial Performance Summary | Indicator | FY2025 | FY2024 | | :--- | :--- | :--- | | Loss attributable to owners of the Company | HK$175,968,000 | HK$21,341,000 | | Basic loss per share | 58.12 HK cents | 7.39 HK cents | - The widening annual loss was primarily due to the unrealized fair value loss on the AFC Mercury Fund investment and impairment losses on assets in the petrochemicals segment12 Business Segment Review Segment performance varied, with the long-term investment segment posting a significant loss while the financial institutions business grew Segment Performance (FY2025) | Business Segment | Revenue (HK$) | Segment Profit/(Loss) (HK$) | Key Reason | | :--- | :--- | :--- | :--- | | Trading | 70,285,000 | (2,625,000) | Adoption of a more prudent risk control approach | | Metal Recycling (Discontinued) | 579,000 | 15,248,000 | Includes a net gain of HK$16.2M on deconsolidation of Cupral | | Long-term Investment | Zero | (125,794,000) | Unrealized fair value loss on AFC Mercury Fund investment | | Petrochemicals (Qian Yang) | 51,494,000 | (64,668,000) | Impairment loss of HK$53.94M on PP&E and right-of-use assets | | Financial Institutions | 18,888,000 | 3,736,000 | Improved performance of MCL business in Mauritius | | Loan Financing Services | Zero | 515,000 | - | Financial Position Review The Group's total assets and equity declined sharply, while the gearing ratio surged from 16.8% to 44.9% Financial Position Indicators (as of March 31) | Indicator | 2025 | 2024 | | :--- | :--- | :--- | | Total Assets | HK$654,715,000 | HK$911,258,000 | | Equity attributable to owners of the Company | HK$173,208,000 | HK$344,135,000 | | Current Ratio | 0.39 | 0.33 | | Gearing Ratio | 44.9% | 16.8% | - The company completed a 10-for-1 share consolidation on December 11, 2024, consolidating every 10 existing shares of HK$0.01 each into 1 consolidated share of HK$0.1029 Significant Investment: AFC Mercury Fund | Item | Carrying Amount at Apr 1, 2024 | Fair Value Loss recognized in P&L | Carrying Amount at Mar 31, 2025 | % of Total Assets | | :--- | :--- | :--- | :--- | :--- | | Investment in AFC Mercury Fund | HK$230,705 '000 | (HK$116,454) '000 | HK$114,251 '000 | 17.5% | Board of Directors and Corporate Governance Biographical Details of Directors and Company Secretary This section details the backgrounds and qualifications of the company's executive directors, independent non-executive directors, and company secretary - Executive Director Mr. Ching Man Chun is the Chairman, Managing Director, and ultimate controlling shareholder of the company33 - The Board members possess diverse professional backgrounds, covering areas such as commodity trading, accounting, auditing, financial services, and corporate finance33343536383940 Report of the Directors The Directors' Report outlines corporate affairs for the year, including business activities, share interests, and post-period events - The Board does not recommend the payment of a final dividend for the year ended March 31, 202545 - Post-reporting period, MARCHING GREAT LIMITED completed a cash offer, making Mr. Ching Man Chun the controlling shareholder with an aggregate holding of approximately 50.83% of the company's issued shares7088 Major Shareholders' Interests (at March 31, 2025) | Name of Major Shareholder | Capacity | Number of Shares Held | Approx. % of Issued Shares | | :--- | :--- | :--- | :--- | | Mr. Ching Man Chun | Beneficial owner/Controlled corporation | 88,200,000 | 29.13% (Total) | | Champion Choice | Beneficial owner | 73,200,000 | 24.18% | | Mr. Zhu Bin | Beneficial owner/Controlled corporation | 31,522,276 | 10.40% (Total) | Major Customers and Suppliers Breakdown | Category | % of Total Sales | % of Total Purchases | | :--- | :--- | :--- | | Five Largest | 38% | 47% | | Largest | 7% | 14% | Corporate Governance Report The auditor issued a disclaimer of opinion on the financial statements due to significant uncertainties regarding the company's ability to continue as a going concern - The company deviated from two Corporate Governance Code provisions: the roles of Chairman and CEO are held by the same individual, and the Chairman was absent from the 2024 AGM9697 - The auditor issued a Disclaimer of Opinion on the consolidated financial statements due to multiple material uncertainties related to going concern, including legal claims, loan covenant breaches, and net current liabilities, which prevented them from obtaining sufficient audit evidence137138140143247 - To address going concern risks, management has formulated several mitigating measures, including negotiating debt terms with banks and lessors, defending legal proceedings, seeking additional financing, and realizing investments in unlisted funds141146149150151 Auditor's Remuneration (FY2025) | Services Rendered | Fees Paid/Payable (HK$ '000) | | :--- | :--- | | Statutory audit services | 2,000 | | Non-audit services | 46 | | Total | 2,046 | Environmental, Social and Governance Report ESG Report Overview and Governance This ESG report covers the Group's environmental and social performance for FY2025, prepared in accordance with HKEX guidelines - The report is prepared in accordance with the HKEX ESG Reporting Guide, covering the period from April 1, 2024, to March 31, 2025, and includes all revenue-generating business segments174175 - The Board of Directors has ultimate oversight responsibility for ESG matters and has engaged an independent consultant to assist in identifying and managing ESG risks178 Environmental Protection The Group reduced its total GHG emissions by 11.4% but saw a significant increase in hazardous waste due to oil tank cleaning Greenhouse Gas Emissions (Scope 1, 2, 3) | Type | FY2025 | FY2024 | | :--- | :--- | :--- | | Total Emissions (tonnes CO2e) | 812 | 917 | | Intensity (tonnes CO2e/employee) | 6.1 | 6.5 | Waste Generation | Type | FY2025 | FY2024 | | :--- | :--- | :--- | | Hazardous Waste (kg) | 14,230 | 4,088 | | Non-hazardous Waste (tonnes) | 39.29 | 57.05 | Energy and Water Consumption | Type | FY2025 | FY2024 | | :--- | :--- | :--- | | Total Energy Consumption (MWh) | 1,722 | 1,795 | | Water Consumption (m³) | 25,966 | 33,034 | - The Group has identified climate change risks, such as the impact of extreme weather on supply chains, and manages them through risk assessment, insurance coverage, and contingency planning209210 Valuing Our Employees The Group is committed to protecting employee rights and providing a safe working environment, reporting zero work-related injuries this year Employee Profile (FY2025) | Indicator | Data | | :--- | :--- | | Total Headcount | 133 | | Gender Distribution | Male: 82%, Female: 18% | | Age Distribution | <30: 21%, 30-50: 65%, >50: 14% | | Geographical Distribution | Hong Kong: 18%, China: 80%, Mauritius: 2% | Employee Training (FY2025) | Employee Category | % of Employees Trained | Average Training Hours | | :--- | :--- | :--- | | Male | 93% | 19 hours | | Female | 88% | 10 hours | | Senior | 91% | 10 hours | | Middle | 88% | 16 hours | | Junior | 92% | 19 hours | - The Group demonstrated a strong health and safety record, with no work-related fatalities in the past three years and zero work-related injuries or lost days due to injury in the current year221 Optimising Our Business The Group maintains its reputation through stringent supply chain management, quality control, and a zero-tolerance policy towards corruption - The Group implements a strict supplier screening process, prioritizing reputable partners compliant with environmental and social standards, and requires qualification certification (e.g., ISO 9001, ISO 14001) for contractors in high-risk businesses224225226 - The Group has established a comprehensive customer complaint handling mechanism but received no complaints regarding its products and services during the year231232233 - The Group strictly adheres to anti-corruption laws, has established a code of conduct, anti-corruption policies, and whistle-blowing policies, and has not identified any related legal cases during the year238239 Financial Statements and Notes Independent Auditor's Report The independent auditor issued a disclaimer of opinion on the financial statements due to multiple material uncertainties regarding the Group's going concern ability - The auditor issued a Disclaimer of Opinion on the FY2025 consolidated financial statements247251 - The basis for the disclaimer is multiple material uncertainties related to going concern, including significant legal claims, breaches of bank loan and sale-and-leaseback covenants, and a severe net current liability position248249250 - The auditor concluded that they could not determine if the financial statements were properly prepared on a going concern basis, as the success of management's mitigating plans could not be ascertained250251 Consolidated Financial Statements The financial statements reveal a severe deterioration in financial health, with widening losses, shrinking assets, and a significant net current liability position Consolidated Statement of Profit or Loss Summary | Indicator | FY2025 (HK$ '000) | FY2024 (HK$ '000) | | :--- | :--- | :--- | | Revenue | 140,667 | 151,959 | | Gross Loss | (28,954) | (83,215) | | Loss before tax | (224,342) | (56,505) | | Loss for the year | (209,094) | (89,250) | | Loss attributable to owners of the Company | (175,968) | (21,341) | | Basic loss per share | (58.12) HK cents | (7.39) HK cents | Consolidated Statement of Financial Position Summary | Indicator | Mar 31, 2025 (HK$ '000) | Mar 31, 2024 (HK$ '000) | | :--- | :--- | :--- | | Total Assets | 654,715 | 911,258 | | Net Current Liabilities | (351,476) | (353,013) | | Total Liabilities | 573,744 | 634,177 | | Equity attributable to owners of the Company | 173,208 | 344,135 | | Total Equity | 80,971 | 277,081 | Consolidated Statement of Cash Flows Summary | Indicator | FY2025 (HK$ '000) | FY2024 (HK$ '000) | | :--- | :--- | :--- | | Net cash used in operating activities | (14,040) | (69,737) | | Net cash used in investing activities | (8,699) | 56,925 | | Net cash used in financing activities | (22,530) | 26,693 | | Net decrease in cash and cash equivalents | (45,269) | 13,881 | Notes to the Consolidated Financial Statements (Selected) The notes detail the root causes of the financial crisis, including major lawsuits, loan defaults, and management's plans to address these issues - Note 3.1 explicitly states that material uncertainties exist that cast significant doubt on the Group's ability to continue as a going concern, citing legal claims, breach of bank loan covenants, breach of sale-and-leaseback terms, and net current liabilities of HK$351 million276278 - To address the going concern crisis, management has implemented a five-point plan: (i) negotiate revised loan covenants with banks; (ii) negotiate extended leaseback terms with lessors; (iii) legally defend civil claims; (iv) seek additional financing; (v) seek to dispose of unlisted fund assets and receive distributions280283 - Note 41 details multiple significant lawsuits: 1) several civil actions with Lianwei Financial Leasing regarding sale-and-leaseback arrangements for oil tanks with substantial claims; 2) debt dispute litigation involving a subsidiary of Guangming; 3) a construction contract arbitration faced by Jiangsu Hongmao; 4) a winding-up petition filed by shareholder Mr. Zhu against Qian Yang and other subsidiaries489492493495498 - Due to property preservation orders from PRC courts, the Group has breached bank loan covenants and sale-and-leaseback terms, allowing lenders and lessors to demand immediate repayment; consequently, bank borrowings of HK$111 million and related lease liabilities of HK$258 million have been reclassified as current liabilities405407 - A significant impairment was recognized for the petrochemicals segment's cash-generating unit (Qian Yang Group), including HK$36 million for property, plant and equipment and HK$17.95 million for right-of-use assets366 Five-Year Financial Summary The five-year summary shows a continuous and severe deterioration in the Group's operating and financial condition, with plummeting revenue and equity Five-Year Financial Summary (For the year ended March 31) | Indicator (HK$ '000) | 2021 | 2022 | 2023 | 2024 | 2025 | | :--- | :--- | :--- | :--- | :--- | :--- | | Revenue | 1,468,217 | 884,491 | 452,530 | 151,959 | 140,667 | | Profit (Loss) before tax | 166,458 | (170,603) | (360,403) | (56,505) | (224,342) | | Total Assets | 789,037 | 1,600,250 | 1,029,144 | 911,258 | 654,715 | | Total Equity | 715,148 | 716,238 | 318,004 | 277,081 | 80,971 |
保德国际发展(00372) - 2025 - 年度财报