安贤园中国(00922) - 2025 - 年度财报

Company Information This section provides fundamental details about the company's governance, registration, and share structure Board of Directors and Management This section lists the company's board members, committee composition, company secretary, auditor, and principal bankers, providing basic information on its corporate governance structure - Board members include Executive Directors Shi Hua (Chairman), Shi Jun (Chief Executive Officer), Luo Huicheng (Deputy Chief Executive Officer), and Independent Non-Executive Directors Chan Kwun Yung, Lam Pak Sum, Hung Wan Fong[3] - The Company Secretary is Ms. Chan Ka Man, and the auditor is BDO Limited, Hong Kong[3] - Principal bankers include CMB Wing Lung Bank Limited, Hong Kong and Industrial and Commercial Bank of China Limited[3] Registration and Share Information This section provides information on the company's registered office, principal places of business, and shares listed on the Hong Kong Stock Exchange - The company's registered office is in Bermuda, its principal place of business in China is Hangzhou, and its principal place of business in Hong Kong is Causeway Bay[3] - The stock code is 00922, with a board lot size of 10,000 shares[4] Chairman's Statement The Chairman's Statement reviews the year's operational performance, strategic initiatives, and future outlook Annual Operating Review and Dividends The Chairman's Statement notes that amidst global economic slowdown and China's moderate recovery, the Group actively implemented funeral reform, largely achieved its annual operating targets, and distributed two dividends to shareholders - In 2024, global economic growth slowed, China's economy moderately recovered, and the Group actively promoted funeral reform[5] - The Group's annual operating targets were largely achieved, and two dividends were distributed this year[5] - Full-year sales were approximately HKD 230 million, a slight decrease from the previous year, but overall burial plot sales remained stable[5] Innovative Development and Green Funeral Services The Group actively explores new cemetery formats by deeply integrating technology and humanities, aiming for 'innovative development and green funeral services' to build and upgrade core competencies, achieving significant results in multiple projects - Zhejiang Anxian Garden pioneered the creation of a 'Digital Smart Life Experience Space,' integrating AI smart butler, 270-degree holographic technology, and visual interactive systems to reshape personalized memorial services[7] - Yinchuan Fushouyuan improved mid-to-high-end tomb designs and developed green-themed cultural cemetery areas, with its 'Jiangnan Garden' project focusing on ecology, landscape, and cultural construction[7] - Zunyi Dachengshan project improved basic service facilities, developed public welfare burial areas, launched the 'Century of Worry-Free' public benefit service project and Taoist ritual services, achieving a win-win for social and economic benefits[7] - The Group's various sub-projects vigorously promoted land-saving ecological burial methods such as tree burial, lawn burial, wall burial, flower bed burial, and landscape burial, and actively advocated green memorial practices, with Yinchuan Fushouyuan introducing 'water-soluble paper' as a new environmentally friendly memorial method[7] Corporate Social Responsibility and Talent Strategy Adhering to a 'people-oriented, stay true to original aspiration' philosophy, the Group actively fulfills corporate social responsibility, enhances brand reputation through patriotic education, life education, and humanistic care activities, and implements an 'internal cultivation, external recruitment' talent strategy to improve employee professionalism - The Group actively undertakes corporate, social, industry, historical, and public responsibilities, fully leveraging park cultural resources to organize multiple brand public welfare activities[8] - Zhejiang Anxian Garden was successfully selected as one of Hangzhou's hundred patriotic education bases and designated as one of the first batch of Hangzhou New Era Civilization Practice Points[8] - Yinchuan Fushouyuan, as a Jinfeng District National Defense Education Base, established a special memorial square for martyrs of the Sino-Vietnamese War and held memorial activities for heroes[8] - The Group views talent as a core asset, implementing a dual-track 'internal cultivation and external recruitment' strategy, conducting various job training and continuing education to comprehensively enhance overall employee quality[9] 2025 Outlook Looking ahead to 2025, the Group will continue to deepen its core funeral services, enhance intensive land use, accelerate AI and digital technology integration to build a 'smart funeral ecosystem,' and strive to be a practitioner of 'century-long life memorial projects' - 2025 is a critical year for the transformation and development of the funeral industry; the Group will continue to deepen and expand its core funeral services, enhancing intensive land use efficiency[10] - Adhering to the 'innovation-driven development' requirement, the Group will accelerate the integration of AI and digital technologies with service scenarios to create a 'smart funeral ecosystem'[10] - The Group is committed to becoming a practitioner of 'century-long life memorial projects,' leveraging humanities, ecology, and technology to drive progress and transformation in China's funeral industry[10] Management Discussion and Analysis This section provides an in-depth analysis of the Group's market performance, business operations, and financial results Market Overview China's funeral services market continues to grow with a stable projected CAGR; the industry is transitioning from basic services to emotional value, driven by surging demand for personalized, digital, and green funeral services, and supported by policy and technology - China's funeral services market reached RMB 257.7 billion in 2020 and is projected to reach RMB 411.4 billion by 2026, with an estimated CAGR of 8.1%[13] - Changes in consumption patterns are driving a surge in demand for high-end customized services such as personalized cemetery design, digital memorial ceremonies, and cultural commemorations[13] - The '14th Five-Year Plan' for Civil Affairs proposes 'building a people-benefiting, green, and smart funeral system,' opening policy windows for innovative models like ecological burials and cloud memorials[13] - Artificial intelligence and blockchain technology are accelerating penetration, with digital scenarios like online obituaries and virtual memorial halls reshaping service experiences[13] Business Review and Outlook Amidst a complex market, the Group upheld its 'people-oriented, service-first' philosophy, achieving significant results in safety compliance, business expansion, service enhancement, and philanthropy, while actively embracing digital transformation; future plans include consolidating existing projects, expanding funeral services, and creating an integrated funeral and memorial service landscape - The Group achieved significant results in safety compliance, business expansion, service enhancement, and philanthropy, laying a solid foundation for the company's sustained healthy development[15] - This year's total sales amount and after-tax profit slightly decreased, but overall performance remained stable[15] - The Group proactively embraced the digital wave, leveraging technology to reshape the funeral service ecosystem, with its Zhejiang Anxian Garden creating a comprehensive digital smart life experience space[17] - Looking ahead, the Group will consolidate and develop existing projects, advance steadily, innovate business models, strive to expand into funeral services, and gradually build an integrated funeral and memorial service operating framework[18] Cemetery Business Key Performance Indicators This section outlines the Group's cemetery business revenue growth rate and gross profit margin, indicating negative revenue growth but stable gross profit margin Cemetery Business Key Performance Indicators | Indicator | 2025 | 2024 | | :--- | :--- | :--- | | Revenue Growth Rate | –16.9% | –16.5% | | Gross Profit Margin | 73.2% | 73.0% | - This year, the Group continued to focus on developing its cemetery business in China[20] Financial Review This year, the Group recorded a decrease in both net profit and revenue, primarily due to fewer burial plot sales and RMB depreciation; sales and distribution expenses and administrative fees decreased, but finance costs increased due to new short-term borrowings Key Financial Data Comparison | Indicator | 2025 (thousand HKD) | 2024 (thousand HKD) | | :--- | :--- | :--- | | Net Profit | 52,300 | 58,400 | | Revenue | 236,400 | 284,400 | | Profit Before Interest and Tax | 77,000 | 88,400 | - The decrease in revenue and gross profit was primarily due to a 17% reduction in the total number of burial plots sold and a 0.8% depreciation of RMB against HKD[23] - Sales and distribution expenses decreased from approximately HKD 37.8 million to approximately HKD 22.4 million, mainly due to reduced promotional expenses[25] - Administrative expenses decreased from approximately HKD 90.3 million to approximately HKD 79.6 million, primarily due to reduced wages, and maintenance and upkeep costs for cemetery and burial plot assets[26] - Finance costs increased by approximately HKD 400 thousand year-on-year, mainly due to new short-term bank borrowings of approximately HKD 43.9 million this year[27] Liquidity and Financial Resources The Group's operations are funded by internal resources and bank borrowings; this year saw a net cash outflow of approximately HKD 70.1 million, with changes in both current ratio and gearing ratio, yet the Group maintains sufficient working capital Consolidated Cash Flow Statement Overview | Indicator | 2025 (thousand HKD) | 2024 (thousand HKD) | | :--- | :--- | :--- | | Net Cash Flows from Operating Activities | 72,455 | 91,639 | | Net Cash Flows (Used in)/from Investing Activities | (129,852) | 57,775 | | Net Cash Flows Used in Financing Activities | (12,694) | (79,742) | | Net (Decrease)/Increase in Cash and Cash Equivalents | (70,091) | 69,672 | - As of March 31, 2025, the Group had cash and cash equivalents, time deposits, and financial assets at fair value through profit or loss denominated in HKD, USD, and RMB totaling approximately HKD 340.5 million[30] - The current ratio decreased from approximately 3.96 as of March 31, 2024, to approximately 3.42 as of March 31, 2025, primarily due to an increase in current liabilities[31] - The gearing ratio increased from approximately 0.23 in 2024 to approximately 0.24 in 2025[32] Capital Structure and Use of Rights Issue Proceeds This section describes the Group's capital structure, including issued share capital, total assets, and net assets, detailing the intended use of 2020 rights issue proceeds, subsequent reallocations, and actual utilization - As of March 31, 2025, the company's issued share capital was 2,221,363,150 shares, with no changes during the year[34] - Total assets were approximately HKD 1,283.4 million, net assets approximately HKD 973.5 million, and net asset value per share approximately HKD 0.44[34] - The slight decrease in net assets was primarily due to a reduction in net profit attributable to owners of the Company, dividend payments, and unrealized exchange losses from RMB depreciation against HKD[34] Use of Net Proceeds from Rights Issue | Original Intended Use of Net Proceeds | Net Proceeds as Stated in Rights Issue Document (thousand HKD) | Reallocation of Unutilized Net Proceeds (thousand HKD) | Actual Use of Net Proceeds as of March 31, 2025 (thousand HKD) | Remaining Unutilized Net Proceeds (thousand HKD) | | :--- | :--- | :--- | :--- | :--- | | Potential Strategic Investment Opportunities | 81,490 | (81,490) | – | – | | Repayment of Existing Debts and Payables | 28,891 | 60,000 | 88,891 | – | | General Working Capital | 21,120 | 21,490 | 42,610 | – | | Total | 131,501 | – | 131,501 | – | - The company has fully utilized the net proceeds from the rights issue according to the proposed plan outlined in the rights issue document and subsequent announcements[48] Exchange Rate Fluctuation Risk and Employee Remuneration Policy The Group primarily settles business in RMB, closely monitoring foreign currency risks; regarding employees, it regularly reviews remuneration and benefits, offering provident fund and share option schemes to enhance overall staff quality - The Group primarily settles business in RMB and closely monitors its foreign currency risks, considering hedging significant foreign currency exposures when necessary[42] - As of March 31, 2025, the Group had 11 employees in Hong Kong and 199 employees in China (including directors)[43] - The Group regularly reviews remuneration and benefits based on market practices and individual employee performance, offering provident fund schemes and share option schemes[43] - Total staff costs (including directors) for the year were approximately HKD 38.4 million (2024: approximately HKD 44.3 million)[44] Biographies of Directors and Senior Management This section presents detailed biographies of the company's executive and independent non-executive directors Executive Directors This section details the backgrounds, tenures, responsibilities, and equity holdings of the company's three executive directors: Chairman Mr. Shi Hua, CEO Mr. Shi Jun, and Deputy CEO Mr. Luo Huicheng - Mr. Shi Hua (Chairman): 73 years old, Executive Director since 2011, Chairman and Nomination Committee Chairman since 2011; holds approximately 58.49% of the company's shares[50][51] - Mr. Shi Jun (Chief Executive Officer): 43 years old, Executive Director since 2011, CEO since 2014; holds approximately 1.37% of the company's shares and is Mr. Shi Hua's son[52][53] - Mr. Luo Huicheng (Deputy Chief Executive Officer): 65 years old, a Hong Kong practicing accountant with over thirty years of auditing and accounting experience; holds approximately 2.25% of the company's shares and has a security interest of approximately 51.16% in pledged shares[55][57] Independent Non-Executive Directors This section introduces the professional backgrounds, experience, and committee roles of the company's three independent non-executive directors: Mr. Chan Kwun Yung, Mr. Lam Pak Sum, and Ms. Hung Wan Fong - Mr. Chan Kwun Yung: 66 years old, Independent Non-Executive Director since 2014, Chairman of Audit and Remuneration Committees, member of Nomination Committee; possesses over 35 years of management, auditing, finance, tax, and accounting experience[58][59] - Mr. Lam Pak Sum: 64 years old, Independent Non-Executive Director since 2017, member of Audit, Remuneration, and Nomination Committees; has over 20 years of experience in finance, money markets, and capital markets[60] - Ms. Hung Wan Fong: 51 years old, Independent Non-Executive Director since 2020, member of Audit, Remuneration, and Nomination Committees; has approximately 29 years of experience in auditing and assurance[63] Directors' Report The Directors' Report covers the company's principal activities, financial performance, governance, and compliance matters Principal Activities and Financial Overview The Directors' Report confirms the company's principal activities as investment holding and cemetery operations, reviewing this year's business and financial performance, including proposed dividend distribution - The company's principal activity is investment holding, while its main operating subsidiaries are engaged in the cemetery business[67] - The Board has recommended a final dividend of 1.1 HK cents per share for the year (2024: 1.3 HK cents)[69] - Together with the interim dividend of 0.5 HK cents per share (2024: 0.8 HK cents), the total dividend for the year will be 1.6 HK cents per share (2024: 2.1 HK cents)[69] Board Members and Governance This section details the board's composition, tenure, service contracts, independence assessment, and remuneration policy, confirming directors' interests in transactions and competing businesses - The Board comprises three Executive Directors (Shi Hua, Shi Jun, Luo Huicheng) and three Independent Non-Executive Directors (Chan Kwun Yung, Lam Pak Sum, Hung Wan Fong)[78] - Mr. Shi Jun and Mr. Lam Pak Sum will retire by rotation at the upcoming Annual General Meeting and are eligible and willing to offer themselves for re-election[78] - The company has received annual confirmations of independence from each Independent Non-Executive Director and considers all Independent Non-Executive Directors to be independent[82] - The company has established a Remuneration Committee to review and determine the remuneration and compensation packages for directors[89] Equity Disclosure and Share Option Scheme This section discloses the interests and short positions of directors, chief executives, and substantial shareholders in the company's shares, and details the main terms and operation of the company's share option scheme Directors' Long Positions in Issued Shares | Director's Name | Nature of Interest/Capacity | Number of Shares Held | Approximate Percentage of Shareholding | | :--- | :--- | :--- | :--- | | Mr. Shi Hua | Beneficial Owner | 25,795,000 | 1.16% | | | Interest in Controlled Corporation | 1,273,530,616 | 57.33% | | Mr. Shi Jun | Beneficial Owner | 30,500,000 | 1.37% | | Mr. Luo Huicheng | Beneficial Owner | 50,000,000 | 2.25% | | | Interest in Controlled Corporation | 1,136,530,616 | 51.16% | Major Shareholders' Long Positions in Issued Shares | Shareholder Name | Nature of Interest/Capacity | Number of Shares Held | Approximate Percentage of Shareholding | | :--- | :--- | :--- | :--- | | Master Point Overseas Limited | Beneficial Owner | 1,273,530,616 | 57.33% | | Win-Win International Limited | Person with Security Interest in Shares | 1,136,530,616 | 51.16% | | True Promise Investments Limited | Interest in Controlled Corporation | 1,136,530,616 | 51.16% | - The company adopted a share option scheme on August 28, 2018, aiming to provide incentives or rewards to eligible persons who contribute to the successful operation of the Group's business[105] - The total number of shares available for issue under the share option scheme is approximately 3.33% of the total issued shares (74,054,526 options)[107] - During the year, no share options were granted, exercised, cancelled, or lapsed under the share option scheme[114] Operations and Compliance Matters This section covers the Group's relationships with key customers and suppliers, employee relations, share dealings, public float, tax relief, retirement schemes, corporate governance compliance, post-reporting period events, and auditor appointment - The Group's top five customers accounted for less than 30% of its total revenue; the Group's largest supplier and top five suppliers accounted for approximately 50% and 87% of its total purchases, respectively[115] - During the year, neither the company nor any of its subsidiaries purchased, sold, or redeemed any of the company's listed securities[117] - The company has maintained a sufficient public float of at least 25% of its issued shares as required under the Listing Rules[121] - The Group has complied in all material respects with relevant laws and regulations significantly affecting its business and operations, with no serious breaches or non-compliance with applicable laws and regulations during the year[128] - The Group's consolidated financial statements for the year have been audited by BDO Limited, Hong Kong, and shareholder approval will be sought for their re-appointment[130] Five-Year Summary This section provides a five-year overview of the Group's key consolidated financial performance and position Consolidated Statement of Profit or Loss Summary This section provides key consolidated statement of profit or loss financial data for the Group's past five years (ended March 31, 2025), including revenue, profit before income tax, and profit for the year Consolidated Statement of Profit or Loss Key Data (thousand HKD) | Indicator | 2025 | 2024 | 2023 | 2022 | 2021 | | :--- | :--- | :--- | :--- | :--- | :--- | | Revenue | 236,429 | 284,430 | 340,533 | 310,947 | 298,742 | | Profit Before Income Tax | 75,955 | 87,718 | 146,041 | 108,006 | 114,163 | | Profit for the Year | 52,315 | 58,397 | 105,512 | 71,286 | 81,291 | | Profit for the Year Attributable to Owners of the Company | 51,078 | 57,824 | 104,921 | 73,125 | 80,295 | Consolidated Statement of Financial Position Summary This section outlines key consolidated statement of financial position data for the Group's past five years (ended March 31, 2025), including non-current assets, net current assets, non-current liabilities, and net assets Consolidated Statement of Financial Position Key Data (thousand HKD) | Indicator | 2025 | 2024 | 2023 | 2022 | 2021 | | :--- | :--- | :--- | :--- | :--- | :--- | | Non-current Assets | 723,320 | 691,611 | 727,036 | 816,247 | 800,141 | | Net Current Assets | 396,242 | 436,040 | 445,587 | 382,522 | 375,993 | | Non-current Liabilities | (146,097) | (148,980) | (165,916) | (194,850) | (240,089) | | Net Assets | 973,465 | 978,671 | 1,006,707 | 1,003,919 | 936,045 | | Equity Attributable to Owners of the Company | 937,649 | 942,965 | 970,326 | 965,288 | 897,186 | Corporate Governance Report This report details the company's corporate governance framework, board structure, committee functions, and compliance with best practices Corporate Governance Practices and Culture The company is committed to maintaining a robust, transparent, and sound corporate governance framework, having complied with the Corporate Governance Code; the report highlights a corporate culture valuing teamwork and employee dedication, with effectiveness assessed and monitored through various indicators - The company has complied with all applicable code provisions set out in the Corporate Governance Code throughout the year[135] - The company's corporate culture values teamwork and recognizes employee dedication, assessed and monitored through indicators such as employee turnover rate, whistleblowing statistics, and employee opinion surveys[138][139] - The company shares its ideal cultural vision and expectations for employee conduct through platforms such as interactive forums and a comprehensive code of conduct[140] Board Structure and Operation The Board comprises three executive and three independent non-executive directors, ensuring effective exercise of independent judgment; the report details board responsibilities, delegation of authority, attendance, continuous professional development, and the distinct roles of Chairman and CEO - The Board comprises 3 Executive Directors and 3 Independent Non-Executive Directors, with Independent Non-Executive Directors accounting for 50% of the total Board, meeting Listing Rules requirements[148] - The Board regularly holds meetings to review and approve financial and operating performance, and to deliberate and approve the company's overall strategies and policies[153] - Chairman Mr. Shi Hua is responsible for managing and leading the Board in formulating overall strategies, while CEO Mr. Shi Jun is responsible for the Group's daily operations, with clearly defined roles[166] - All directors are required to participate in continuous professional development to develop and update their knowledge and skills[162] Board Committees The Board has established Audit, Remuneration, and Nomination Committees with clear terms of reference to assist in overseeing specific matters and ensure effective corporate governance - The Board has established Audit, Remuneration, and Nomination Committees, with specific written terms of reference to clearly define their powers and responsibilities[169] - The Audit Committee, composed of three Independent Non-Executive Directors, is primarily responsible for reviewing and monitoring the integrity of financial information, internal control, and risk management systems[173][171] - The Remuneration Committee, composed of three Independent Non-Executive Directors, is primarily responsible for advising the Board on the remuneration of directors and certain senior management[181][179] - The Nomination Committee, comprising four members (majority being Independent Non-Executive Directors), is primarily responsible for regularly reviewing board structure, identifying qualified candidates, and assessing independence[190][186] Audit Committee The Audit Committee, composed of three independent non-executive directors, oversees financial reporting, internal control, and risk management systems, maintaining independent communication with external auditors - The Audit Committee currently comprises three Independent Non-Executive Directors: Mr. Chan Kwun Yung (Chairman), Mr. Lam Pak Sum, and Ms. Hung Wan Fong[173] - Key responsibilities include recommending the appointment, remuneration, and terms of engagement of external auditors, and reviewing and monitoring the external auditor's independence and audit process[174] - Five meetings were held this year, reviewing annual and interim financial statements, risk management and internal control systems, and recommending the re-appointment of the auditor[176][178] Remuneration Committee The Remuneration Committee, comprising three independent non-executive directors, advises the Board on remuneration policies, structures, and terms for directors and senior management - The Remuneration Committee currently comprises three Independent Non-Executive Directors: Mr. Chan Kwun Yung (Chairman), Mr. Lam Pak Sum, and Ms. Hung Wan Fong[181] - Key responsibilities include recommending remuneration policies and structures for all directors and senior management of the company, and reviewing and approving management's remuneration proposals[182] - One meeting was held this year, reviewing the remuneration policies and terms for the company's directors, management, and employees[184] Senior Management Remuneration Ranges | Remuneration Range | Number of People | | :--- | :--- | | HKD 1,000,001 to HKD 1,500,000 | 2 | | HKD 1,500,001 to HKD 2,000,000 | 1 | Nomination Committee The Nomination Committee, consisting of four members, is responsible for regularly reviewing board structure, identifying qualified candidates, assessing independent non-executive directors' independence, and proposing director succession plans - The Nomination Committee currently comprises Mr. Shi Hua (Chairman), Mr. Chan Kwun Yung, Mr. Lam Pak Sum, and Ms. Hung Wan Fong[190] - Key responsibilities include reviewing the Board's structure, size, and composition at least annually, identifying suitable candidates, and assessing the independence of Independent Non-Executive Directors[190] - Two meetings were held this year, reviewing the resignation of a non-executive director, the Board Diversity Policy, and the Director Nomination Policy[191] - The Board has adopted a Board Diversity Policy to achieve diversity through various considerations, including gender, age, cultural and educational background, professional experience, skills, and knowledge[192] Board Diversity Policy The Board has adopted a diversity policy to achieve board diversity by considering factors such as gender, age, cultural background, and professional experience; current board composition generally meets diversity requirements, with a commitment to increasing female representation in the future - The Board has adopted a Board Diversity Policy to achieve diversity through various considerations, including gender, age, cultural and educational background, professional experience, skills, and knowledge[192] Board Composition Diversity Overview (as of March 31, 2025) | Position | Number of Directors | Percentage* | | :--- | :--- | :--- | | Executive Directors | 3 | 50.0% | | Independent Non-Executive Directors | 3 | 50.0% | | Gender | | | | Male | 5 | 83.3% | | Female | 1 | 16.7% | | Age Group | | | | 40-49 years old | 1 | 16.7% | | 50-59 years old | 1 | 16.7% | | 60-69 years old | 3 | 50.0% | | 70-79 years old | 1 | 16.7% | - As of March 31, 2025, the Group had 210 employees, of whom 108 were female (51.4% of total), indicating a relatively balanced gender ratio[197] - The Board believes its composition generally meets the diversity requirements under the Listing Rules and will continue to increase the proportion of female board members[194] Corporate Governance Functions and Risk Management The Board is responsible for corporate governance duties, including policy formulation and review, monitoring training and development, and regulatory compliance; the Group has a 'three-tier' enterprise risk management framework and regularly assesses internal control effectiveness, with no significant deficiencies found this year - The Board is responsible for corporate governance duties, including formulating and reviewing corporate governance policies and practices, and reviewing and monitoring the training and continuous professional development of directors and management[200] - The Board is committed to making balanced, clear, and understandable assessments for annual and interim reports and other financial disclosures, and confirms its responsibility for presenting financial statements[202] - The Group adopts a 'three-tier' corporate governance structure: operating management departments are responsible for business management and control, the finance team conducts risk management monitoring, and independent internal audit is outsourced to Zhihui Enterprise Management Professionals Co., Ltd.[208] - During the review year, the Board, through the Audit Committee, reviewed the effectiveness of the design and implementation of the Group's risk management and internal control systems, finding no significant internal control deficiencies[210][211] External Audit and Information Disclosure This section outlines the external auditor's responsibilities and remuneration, along with the company's procedures and internal controls for handling and disseminating inside information, emphasizing timely, fair, accurate, true, and complete disclosure - The company's external auditor is BDO Limited, Hong Kong, and its independent auditor's report is on pages 50 to 54 of this annual report[212] External Auditor's Remuneration (thousand HKD) | Type of Services Provided by External Auditor | 2025 | | :--- | :--- | | Audit Services | 950 | | Non-Audit Services | – | | Total | 950 | - The Group has complied with the requirements of the Securities and Futures Ordinance and the Listing Rules, disclosing inside information to the public as soon as reasonably practicable[214] - The company is committed to ensuring that information contained in announcements is fair, accurate, true, and complete, disclosing both positive and negative facts equally[214] Company Secretary and Policies This section describes the Company Secretary's duties and outlines the company's dividend, whistleblowing, and anti-corruption policies to ensure operational transparency, compliance, and ethical standards - Ms. Chan Ka Man was appointed Company Secretary in July 2021, ensuring information flow among board members and adherence to board policies and procedures[215] - The Board has adopted a dividend policy, intending to distribute no more than 75% of its distributable reserves available for distribution, considering financial results, cash flow, and other factors[217] - The Group has established a whistleblowing policy covering fraudulent or unethical conduct, as well as violations of laws, regulations, and Group policies, and includes an anonymous reporting mechanism[219] - The Group has established an anti-corruption policy to ensure directors and employees comply with the Prevention of Bribery Ordinance (Cap. 201 of the Laws of Hong Kong), and regularly reviews this policy[220] Shareholders' Rights and Communication This section details procedures for shareholders to convene extraordinary general meetings, propose director candidates, and submit proposals at general meetings, emphasizing effective communication with shareholders through various channels to ensure information transparency and investor relations - Shareholders holding not less than one-tenth of the paid-up share capital carrying voting rights at general meetings may, in accordance with Article 58 of the company's Bye-laws, request the convening of an extraordinary general meeting[221] - Shareholders may propose individuals for election as directors in accordance with Article 85 of the company's Bye-laws, by submitting a written notice[223] - The company maintains its website www.anxianyuanchina.com as a communication platform with shareholders and investors, and utilizes tools such as annual general meetings and annual reports[226][227] - The company has established a Shareholder Communication Policy to ensure that shareholder opinions and concerns are properly addressed[228] Financial Statements This section presents the Group's audited consolidated financial statements, including the auditor's report and detailed notes Independent Auditor's Report The independent auditor issued an unqualified opinion on the Group's consolidated financial statements for the year ended March 31, 2025, deeming them to present a true and fair view of the Group's financial position, performance, and cash flows; the report highlighted goodwill impairment assessment and revenue recognition from burial plot and niche sales as key audit matters - The auditor is of the opinion that the consolidated financial statements give a true and fair view of the consolidated financial position of the Group as at March 31, 2025, and of its consolidated financial performance and its consolidated cash flows for the year then ended in accordance with Hong Kong Financial Reporting Standards[233] - Key audit matters include the impairment assessment of goodwill (goodwill of HKD 12,111 thousand as of March 31, 2025) and revenue recognition from sales of burial plots and niches (sales revenue of HKD 206,150 thousand in 2025, accounting for approximately 87% of total revenue)[237][240] - 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[251] Consolidated Statement of Profit or Loss The Consolidated Statement of Profit or Loss shows that for the year ended March 31, 2025, the Group's revenue was HKD 236,429 thousand, gross profit HKD 172,983 thousand, and profit for the year HKD 52,315 thousand, with HKD 51,078 thousand attributable to owners of the Company; basic and diluted earnings per share were 2.30 HK cents Consolidated Statement of Profit or Loss Key Data (thousand HKD) | Indicator | 2025 | 2024 | | :--- | :--- | :--- | | Revenue | 236,429 | 284,430 | | Cost of Sales | (63,446) | (76,701) | | Gross Profit | 172,983 | 207,729 | | Other Income and Gains, Net | 6,110 | 8,744 | | Selling and Distribution Expenses | (22,407) | (37,758) | | Administrative Expenses | (79,643) | (90,322) | | Finance Costs | (1,088) | (675) | | Profit Before Income Tax | 75,955 | 87,718 | | Income Tax Expense | (23,640) | (29,321) | | Profit for the Year | 52,315 | 58,397 | | Profit for the Year Attributable to Owners of the Company | 51,078 | 57,824 | | Basic and Diluted Earnings Per Share (HK cents) | 2.30 | 2.60 | Consolidated Statement of Comprehensive Income The Consolidated Statement of Comprehensive Income shows that for the year ended March 31, 2025, the Group's profit for the year was HKD 52,315 thousand, with other comprehensive income (primarily affected by exchange differences and fair value changes of financial assets at fair value through OCI) being negative HKD 17,045 thousand, resulting in a total comprehensive income for the year of HKD 35,270 thousand Consolidated Statement of Comprehensive Income Key Data (thousand HKD) | Indicator | 2025 | 2024 | | :--- | :--- | :--- | | Profit for the Year | 52,315 | 58,397 | | Exchange Differences on Translation of Financial Statements of Overseas Operations | (17,013) | (33,466) | | Fair Value Changes of Financial Assets at Fair Value Through Other Comprehensive Income | (32) | (1,876) | | Other Comprehensive Income for the Year (Net of Tax) | (17,045) | (35,342) | | Total Comprehensive Income for the Year | 35,270 | 23,055 | | Total Comprehensive Income for the Year Attributable to Owners of the Company | 34,669 | 23,730 | Consolidated Statement of Financial Position The Consolidated Statement of Financial Position shows that as of March 31, 2025, the Group's total assets less current liabilities were HKD 1,119,562 thousand, and net assets were HKD 973,465 thousand; non-current assets primarily include intangible assets and cemetery assets, while cash and cash equivalents constitute a significant portion of current assets; current liabilities increased, leading to a decrease in the current ratio Consolidated Statement of Financial Position Key Data (thousand HKD) | Indicator | 2025 | 2024 | | :--- | :--- | :--- | | Non-current Assets | | | | Property, Plant and Equipment | 62,296 | 68,698 | | Intangible Assets | 398,732 | 408,445 | | Goodwill | 12,111 | 12,328 | | Cemetery Assets | 235,608 | 197,911 | | Current Assets | | | | Inventories | 224,841 | 240,059 | | Cash and Cash Equivalents | 264,944 | 339,428 | | Current Liabilities | | | | Trade Payables | 33,307 | 36,456 | | Interest-bearing Bank Borrowings | 43,887 | 17,296 | | Tax Payable | 50,226 | 55,161 | | Net Assets | 973,465 | 978,671 | | Equity Attributable to Owners of the Company | 937,649 | 942,965 | Consolidated Statement of Changes in Equity The Consolidated Statement of Changes in Equity shows that for the year ended March 31, 2025, the Group's total equity decreased from HKD 978,671 thousand to HKD 973,465 thousand, with key changes including increased profit for the year, decreased exchange differences, dividend payments, and transfers from retained profits for future dividends Consolidated Statement of Changes in Equity Key Data (thousand HKD) | Indicator | 2025 March 31 | 2024 March 31 | | :--- | :--- | :--- | | Share Capital | 222,136 | 222,136 | | Share Premium | 151,136 | 151,136 | | Exchange Fluctuation Reserve | (77,388) | (61,006) | | Retained Profits | 547,667 | 538,623 | | Total Equity Attributable to Owners of the Company | 937,649 | 942,965 | | Non-controlling Interests | 35,816 | 35,706 | | Total Equity | 973,465 | 978,671 | - Total comprehensive income for the year was HKD 35,270 thousand (2024: HKD 23,055 thousand)[263] - Final dividends declared and paid were HKD 28,878 thousand (2024: HKD 33,320 thousand), and interim dividends were HKD 11,107 thousand (2024: HKD 17,771 thousand)[263] - A transfer of HKD 40,000 thousand from retained profits to surplus reserve represents dividends intended for future distribution[263] Consolidated Statement of Cash Flows The Consolidated Statement of Cash Flows shows that for the year ended March 31, 2025, the Group generated HKD 72,455 thousand net cash from operating activities, used HKD 129,852 thousand in investing activities, and HKD 12,694 thousand in financing activities, resulting in a net decrease of HKD 70,091 thousand in cash and cash equivalents Consolidated Statement of Cash Flows Key Data (thousand HKD) | Indicator | 2025 | 2024 | | :--- | :--- | :--- | | Net Cash Flows from Operating Activities | 72,455 | 91,639 | | Net Cash Flows (Used in)/from Investing Activities | (129,852) | 57,775 | | Net Cash Flows Used in Financing Activities | (12,694) | (79,742) | | Net (Decrease)/Increase in Cash and Cash Equivalents | (70,091) | 69,672 | | Cash and Cash Equivalents at End of Year | 264,944 | 339,428 | - Net cash outflow from investing activities was primarily affected by foreign currency structured product time deposits and the purchase of cemetery assets[268] - Cash outflow from financing activities was mainly affected by repayment of bank borrowings and dividend payments[268] Notes to the Consolidated Financial Statements The Notes to the Consolidated Financial Statements provide detailed supplementary information, covering company and group details, accounting policies, significant judgments and estimates, operating segment information, revenue and other income, expenses, directors' and employees' remuneration, income tax, dividends, earnings per share, various assets and liabilities, share capital and reserves, share option scheme, related party transactions, non-controlling interests, financial instrument classification and fair value hierarchy, financial risk management policies, and post-reporting period events - The company's principal activity is investment holding, with its main subsidiaries engaged in the cemetery business, and the ultimate controlling party is Mr. Shi Hua[269] - Significant accounting judgments and estimates involve goodwill impairment assessment, useful lives of assets, impairment of non-financial assets, impairment of financial assets, and income tax/deferred tax[327][328][329][330][331] Revenue by Product and Service (thousand HKD) | Products and Services | 2025 | 2024 | | :--- | :--- | :--- | | Sales of burial plots and niches | 206,150 | 254,494 | | Management fee income | 8,326 | 5,144 | | Funeral services | 21,953 | 24,792 | | Total Revenue | 236,429 | 284,430 | - Income tax expense for 2025 was HKD 23,640 thousand (2024: HKD 29,321 thousand), primarily from China corporate income tax and dividend withholding tax[347] - The Group faces interest rate risk, foreign currency risk, credit risk, and liquidity risk, and manages them with prudent strategies[427] - No significant events occurred after March 31, 2025, and up to the date of publication of these consolidated financial statements[444] Glossary This section defines key terms used throughout the annual report for clarity and understanding Definitions of Terms This section provides definitions for key terms used in the annual report to assist readers in understanding the report's content