Corporate Information This section details the company's core corporate information, including board members, committees, legal advisors, and auditors, noting significant board and committee changes during and after the reporting period - The report details core corporate information including board members, committee structures, authorized representatives, legal advisors, registered office, principal bankers, and auditors, noting multiple changes in board and committee members, including chairman succession and director resignations and appointments, during and after the reporting period345 Chairman's Statement The company experienced a 34.5% revenue decrease and a shift from profit to loss attributable to owners, primarily due to reduced gross profit and increased gross loss, yet maintains cautious optimism for the future Financial Performance Summary | Metric | FY2024/25 (HKD) | FY2023/24 (HKD) | YoY Change | | :--- | :--- | :--- | :--- | | Total Revenue | Approx. 405 million | Approx. 618 million | -34.5% | | (Loss)/Profit Attributable to Owners | Loss approx. 81.5 million | Profit approx. 17.3 million | Shift from profit to loss | - The shift from profit to loss was primarily due to decreased gross profit and increased gross loss. Despite international economic uncertainties, the Group maintains cautious optimism for future prospects, driven by sustained government investment in infrastructure, and actively seeks new investment opportunities to enhance profitability161721 Directors and Senior Management This section details the backgrounds and responsibilities of executive and independent non-executive directors, noting significant board changes during and after the reporting period with new appointments aimed at strengthening strategic, operational, and compliance capabilities - This chapter details the backgrounds, experience, and responsibilities of the company's executive and independent non-executive directors, noting significant board personnel changes during and after the reporting period, with multiple new directors appointed across construction, finance, and capital management to strengthen the company's strategic, operational, and compliance capabilities253559 Management Discussion and Analysis Industry Overview Despite economic slowdown and labor shortages, Hong Kong's construction and foundation industry benefits from government-driven land development and infrastructure projects, with labor import schemes supporting future growth - Hong Kong's economic slowdown led to decreased demand for residential and commercial properties, but active government land development and surging infrastructure projects present opportunities for the foundation industry84 - The construction industry faces severe labor shortages, with a projected deficit of 48,500 to 55,000 workers by 2027. To address this, the government approved 12,840 quotas through a supplementary labor scheme to ease labor constraints8687 Business Review and Outlook As a Hong Kong foundation contractor, the Group's revenue primarily came from non-residential projects this year, incurring significant gross losses due to cost pressures, change order disputes, and payment delays on the HKIA Three-Runway System project; the Group plans to leverage industry experience and favorable government policies for future growth - The Group incurred significant gross losses on the Hong Kong International Airport Three-Runway System project due to: - Contractor denying original contract rates and suppressing prices - Accelerated work requested by the contractor not being recognized, with the Group instead accused of delays - Change orders for additional costs not being approved - Contractor delaying payments by understating work progress, impacting the Group's cash flow and revenue recognition92102 - The Hong Kong government's 2024 Policy Address prioritizes housing and land issues, planning to increase public housing supply and advance major transport infrastructure projects, which is expected to generate substantial business opportunities for the construction industry91 Extract of Independent Auditor's Report The independent auditor issued a "qualified opinion" on the consolidated financial statements due to insufficient audit evidence for the opening balance of a construction contract deposit of RMB4,754,500 (approx. HKD5,153,000), a scope limitation from the prior auditor; the audit committee confirmed this relates only to the opening balance, does not affect current year financials or internal controls, and the deposit has been fully recovered - The auditor issued a qualified opinion due to insufficient audit evidence for the opening balance of a construction contract deposit of approximately HKD5.153 million, making it impossible to determine its transaction nature, commercial substance, and appropriate accounting treatment, which could significantly impact the corresponding figures for the year ended March 31, 2024103105 - Although the deposit was fully refunded in July 2024, the auditor could not determine if the opening balance required adjustment due to audit scope limitations104107 - The Audit Committee confirmed that the qualified opinion stemmed from scope limitations encountered by the previous auditor, relating solely to the opening balance, and has no impact on the current year's consolidated statement of financial position or consolidated profit112117 Financial Review This fiscal year, the Group's financial performance significantly declined, with total revenue down 34.5% to HKD405 million due to fewer large construction projects; gross profit shifted from a HKD34.8 million profit to a HKD60 million loss, and administrative expenses surged 157.0% due to increased staff welfare, resulting in a HKD81.5 million loss attributable to owners compared to a HKD17.3 million profit last year Financial Performance Metrics | Financial Metric | FY2024/25 (HKD million) | FY2023/24 (HKD million) | YoY Change | | :--- | :--- | :--- | :--- | | Revenue | 405.0 | 618.2 | -34.5% | | Cost of Sales | 464.9 | 583.4 | -20.3% | | Gross (Loss)/Profit | (60.0) | 34.8 | Shift from profit to loss | | Gross (Loss)/Profit Margin | (14.8)% | 5.6% | -20.4 percentage points | | Administrative and Other Operating Expenses | 29.3 | 11.4 | +157.0% | | (Loss)/Profit Attributable to Owners | (81.5) | 17.3 | -571.1% | - The decrease in revenue was primarily attributable to a reduction in the number of large contract construction and renovation projects undertaken during the year123 - The significant increase in administrative expenses was mainly due to an increase of approximately HKD11.7 million in staff welfare expenses, including directors' and senior management's remuneration132 Use of Proceeds The Group raised approximately HKD35.6 million net from a new share placement on August 30, 2024, with all proceeds fully utilized as general working capital by March 31, 2025 Proceeds Utilization | Use | Planned Allocation (HKD million) | Utilized as of March 31, 2025 (HKD million) | Unutilized Balance (HKD million) | | :--- | :--- | :--- | :--- | | General Working Capital | 35.6 | 35.6 | 0 | Principal Risks and Uncertainty Key risks include industry slowdowns in Hong Kong's property market reducing foundation projects, compliance risks from regulatory changes increasing costs, construction uncertainties from unforeseen geological conditions leading to cost overruns, and client concentration risk from over-reliance on a few customers - Industry Risk: The Group's business is highly dependent on the continued development of the Hong Kong property market, and any market slowdown could have a significant adverse impact on its business and financial condition150 - Construction Uncertainty: Foundation projects face risks from unforeseen geological or subsoil conditions, which could increase project complexity and lead to cost overruns, adversely affecting business operations and financial condition156 - Customer Concentration Risk: A significant portion of the Group's revenue is derived from a few customers; a substantial reduction in projects awarded by major clients, without securing alternative projects from others, would materially and adversely affect the financial condition157 Liquidity, Financial Position and Capital Structure As of March 31, 2025, the Group's financial position showed improved liquidity, with issued share capital increasing to HKD12 million and cash and cash equivalents to HKD33.9 million through a new share placement; the current ratio rose from 3.1x to 4.3x, and the gearing ratio significantly decreased from 11.1% to 2.4% due to reduced bonds and bank loans, while maintaining a conservative treasury policy with immaterial foreign exchange exposure - On August 30, 2024, the company successfully placed 200 million new shares, increasing the total number of issued shares to 1.2 billion173 Key Financial Ratios | Metric | March 31, 2025 | March 31, 2024 | | :--- | :--- | :--- | | Cash and Cash Equivalents | Approx. HKD33.9 million | Approx. HKD25.1 million | | Current Ratio | Approx. 4.3x | Approx. 3.1x | | Gearing Ratio | Approx. 2.4% | Approx. 11.1% | - The increase in the current ratio was primarily due to a decrease in trade payables, retention payables, bonds, secured bank loans, and current tax liabilities; the decrease in the gearing ratio was mainly due to a reduction in bonds and secured bank loans176181 Significant Investment and Disposals During the reporting period, the Group actively diversified its business by forming a joint venture in digital assets in November 2024, acquiring a money lending business in February 2025, and disposing of its subsidiary, Shenzhen Guanglianxing - Joint Venture Formation: A joint venture was established with Ding Shi Capital Limited, with a registered capital of HKD25 million, to engage in digital asset businesses including virtual real estate and decentralized finance, with the Group holding a 60% stake189 - Acquisition of Money Lending Business: On February 5, 2025, the Group acquired 100% equity in Ling Feng International Finance Limited for HKD200,000 in cash, aiming to diversify business and broaden its revenue base190 - Disposal of Subsidiary: The Group disposed of its 100%-owned subsidiary, Shenzhen Guanglianxing191 Environmental, Social and Governance Report Environmental The Group is committed to environmental compliance, holding ISO 14001:2015 certification, and implemented various measures for emissions, waste, and resource use; while construction soil disposal significantly increased, NOx and SOx emissions decreased, with a target to reduce greenhouse gas emissions and energy consumption by 5% by 2027 - The Group's environmental management system has received independent ISO 14001:2015 certification, and a waste management policy has been established to reduce environmental impact235 Environmental Performance | Environmental Metric | Unit | 2025 | 2024 | | :--- | :--- | :--- | :--- | | Nitrogen Oxides (NOx) Emissions | kg | 75.1 | 86.3 | | Sulfur Oxides (SOx) Emissions | kg | 0.3 | 0.8 | | Construction Waste: Soil | tonnes | 92,464 | 18,289 | | Electricity Consumption | kWh | 15,510 | 10,560 | - The Group has set a target to reduce greenhouse gas emissions and energy consumption by 5% by 2027, using 2022 as the baseline239256 - The Group has identified physical risks (e.g., extreme weather) and transition risks (e.g., stricter environmental regulations) from climate change, and has developed corresponding risk management policies and response measures264269 Social The Group adheres to employment and labor laws, providing a safe, healthy, and equitable work environment, with its occupational health and safety management system compliant with OHSAS 18001; employee count decreased from 197 to 156, with a 41% full-time staff turnover rate, while emphasizing training, robust supply chain, product responsibility, anti-corruption, and whistleblowing policies for transparent governance - As of March 31, 2025, the Group had 156 employees, comprising 123 males and 33 females, with a full-time employee turnover rate of approximately 41% for the year278 - The Group's occupational health and safety management system is certified to OHSAS 18001 international standards; no workplace accidents occurred during the reporting period, compared to 1 incident resulting in 229 lost labor days in the prior year272290 - The Group maintains an approved list of suppliers and subcontractors to ensure service and procurement quality; during the reporting period, the Group collaborated with 172 suppliers and subcontractors, of which 170 were located in Hong Kong298301 - The Group has established a strict anti-corruption policy and a whistleblowing policy, allowing employees and relevant third parties to report any suspected misconduct directly to designated personnel309311 Corporate Governance Report Corporate Governance Practices The company maintains high corporate governance standards, complying with Appendix C1 of the Listing Rules' Corporate Governance Code, except for a deviation where the Chairman and Chief Executive roles are not separate, with executive directors collectively performing CEO duties; the Board will continuously review this structure's effectiveness - The company has complied with the Corporate Governance Code, with one deviation: the roles of Chairman and Chief Executive are not separate; currently, the company has no Chief Executive Officer, and the responsibilities are jointly undertaken by the executive directors321328 Board of Directors The Board of Directors leads and oversees company affairs in shareholders' best interests, undergoing multiple member changes during the period; three independent non-executive directors, comprising over one-third of the Board, were appointed as required, with 18 board meetings held and attendance records provided - During the reporting period, the composition of the Board of Directors underwent multiple changes, including resignations and appointments of the Chairman, executive directors, and independent non-executive directors332 Board and Committee Meeting Attendance | Meeting Type | Number of Meetings | | :--- | :--- | | Board Meetings | 18 | | Audit Committee | 7 | | Nomination Committee | 5 | | Remuneration Committee | 4 | | General Meetings | 2 | Board Committees The company established Audit, Remuneration, and Nomination Committees to assist the Board; the Audit Committee reviews financial statements and internal controls, the Remuneration Committee sets director and executive compensation, and the Nomination Committee reviews board structure and diversity, recommending appointments, with independent non-executive directors forming the majority in each - The Audit Committee, comprising three independent non-executive directors, held seven meetings during the year, reviewing annual and interim financial results, risk management, and the effectiveness of internal control systems361362 - The Nomination Committee, consisting of four members with an independent non-executive director as Chairman, held five meetings during the year, assessing the independence of independent non-executive directors and recommending new director appointments363368 - The Remuneration Committee, comprising four members with an independent non-executive director as Chairman, held four meetings during the year, reviewing the remuneration policies and packages for all directors and senior management376377 Risk Management and Internal Control The Board is responsible for establishing, maintaining, and reviewing the Group's risk management and internal control systems; due to a relatively simple company structure, no internal audit department exists, with the Board and Audit Committee directly overseeing these functions; this year, the Board reviewed internal control effectiveness and engaged an independent consultant to address delayed annual results and prior audit qualifications - The Group has not established an internal audit department, with related functions directly overseen by the Board and Audit Committee413 - In response to the qualified opinion in the FY2023/24 audit report and the delay in this year's results announcement, the Board engaged an internal control consultant for an independent review and implemented corresponding remedial measures115419 Directors' Report Principal Activities and Business Review The company's principal business is investment holding, with subsidiaries primarily engaged in foundation engineering subcontracting in Hong Kong; detailed business review, financial performance, key risks, and future outlook are elaborated in the Chairman's Statement and Management Discussion and Analysis - The company is an investment holding company, with its principal subsidiaries engaged in construction services443 Dividends and Reserves The Board resolved not to recommend any final dividend for the year ended March 31, 2025; the company's dividend policy considers the Group's financial position, capital levels, and future cash requirements - The Board resolved not to recommend a final dividend for the current year (FY2023/24: nil)462 Share Option Scheme The company adopted a share option scheme on February 19, 2021, to incentivize contributors, with a total authorization of 100 million shares; no options have been granted under the scheme as of the report date - The share option scheme was adopted on February 19, 2021, with a ten-year validity period and an authorized limit of 100 million shares473481 - As of the report date, the company has not granted any share options490 Major Customers and Suppliers This year, the Group experienced high customer concentration, with the largest customer contributing 60% of sales and the top five 91%; supplier concentration was lower, with the largest accounting for 11% of purchases and the top five for 35% Customer and Supplier Concentration | Category | Percentage of Total (%) | | :--- | :--- | | Sales | | | Largest Customer | 60% | | Top Five Customers | 91% | | Purchases | | | Largest Supplier | 11% | | Top Five Suppliers | 35% | Disclosure of Interests As of March 31, 2025, only Mr. Yang Zhenwei among directors and chief executives held company shares, approximately 0.06% of issued capital; Arena Investment Management (Singapore) Pte Ltd and its associates collectively held approximately 24.95%, making them the largest shareholders - Executive Director Mr. Yang Zhenwei held 675,000 shares, representing approximately 0.06% of the company's issued share capital504 - Principal shareholder Arena Investment Management (Singapore) Pte Ltd and its associates are deemed to have an interest in 299,400,000 shares, representing 24.95% of the company's issued share capital506 Independent Auditor's Report Qualified Opinion Linksfield CPA Limited issued a qualified opinion on the Group's consolidated financial statements for the year ended March 31, 2025, solely due to insufficient audit evidence for the opening balance of a construction contract deposit of RMB4,754,500 (approx. HKD5.153 million), a scope limitation from the prior auditor, preventing determination of its nature, commercial rationale, and accounting treatment - The auditor issued a qualified opinion, stating that, except for the possible effects of not being able to verify the opening balance of a deposit, the financial statements present a true and fair view of the Group's financial position552 - The basis for the qualified opinion concerns a construction contract deposit of approximately HKD5.153 million; as the auditor was appointed only on November 18, 2024, and the previous auditor had already raised a qualified opinion on this item, the current auditor could not obtain sufficient audit evidence for the opening balance of this amount555556 Key Audit Matters Beyond the qualified opinion, the auditor identified three key audit matters: 1) recognition of construction service revenue and contract assets due to significant management judgment and estimation; 2) impairment of trade receivables and contract assets due to material carrying amounts and high estimation in determining impairment provisions; and 3) impairment of deposits due to material carrying values and significant judgment required for assessment - Recognition of construction service revenue and contract assets: This is considered a key audit matter due to the significant amounts involved and the reliance on management's significant judgments and estimates regarding progress towards completion and total costs571572 - Impairment of trade receivables and contract assets: This constitutes a key audit matter due to the material carrying amounts and the high degree of estimation and judgment involved in determining expected credit loss (ECL) provisions575577 - Impairment of deposits: This is considered a key audit matter because the carrying value of deposits is material to the financial statements, and their impairment assessment requires significant management judgment and estimation581 Consolidated Financial Statements Consolidated Statement of Profit or Loss and Other Comprehensive Income For the year ended March 31, 2025, the Group reported HKD405 million in revenue, a 34.5% YoY decrease, resulting in a HKD59.96 million gross loss due to higher cost of sales; after expenses and tax credits, the total annual loss was HKD81.52 million, with HKD81.516 million attributable to owners, and basic and diluted loss per share of 7.30 HK cents Consolidated Statement of Profit or Loss and Other Comprehensive Income | Item (HKD '000) | 2025 | 2024 | | :--- | :--- | :--- | | Revenue | 404,950 | 618,193 | | Gross (Loss)/Profit | (59,955) | 34,759 | | (Loss)/Profit Before Income Tax | (86,646) | 21,163 | | Total (Loss)/Profit for the Year | (81,524) | 17,260 | | (Loss)/Profit Attributable to Owners of the Company | (81,516) | 17,260 | | Basic and Diluted (Loss)/Earnings Per Share (HK cents) | (7.30) | 1.73 | Consolidated Statement of Financial Position As of March 31, 2025, the Group's total assets were HKD299 million, total liabilities HKD66.76 million, and net assets HKD232 million, both total and net assets decreasing YoY; net current assets of HKD206 million indicate strong short-term solvency, with HKD222 million in equity attributable to owners Consolidated Statement of Financial Position | Item (HKD '000) | March 31, 2025 | March 31, 2024 | | :--- | :--- | :--- | | Total Non-Current Assets | 30,294 | 52,025 | | Total Current Assets | 268,319 | 329,147 | | Total Assets | 298,613 | 381,172 | | Total Current Liabilities | 62,155 | 106,961 | | Total Non-Current Liabilities | 4,601 | 7,830 | | Total Liabilities | 66,756 | 114,791 | | Net Assets | 231,857 | 266,381 | | Total Equity | 231,857 | 266,381 | Consolidated Statement of Cash Flows This year, the Group reported a HKD11.48 million net cash outflow from operating activities, a HKD8.24 million net cash inflow from investing activities, and a HKD12.01 million net cash inflow from financing activities, resulting in a net increase of HKD8.77 million in cash and cash equivalents, with an ending balance of HKD33.92 million Consolidated Statement of Cash Flows | Item (HKD '000) | 2025 | 2024 | | :--- | :--- | :--- | | Net Cash Used in Operating Activities | (11,476) | (28,330) | | Net Cash From Investing Activities | 8,236 | 2,667 | | Net Cash From Financing Activities | 12,012 | 25,450 | | Net Increase/(Decrease) in Cash and Cash Equivalents | 8,772 | (213) | | Cash and Cash Equivalents at Beginning of Year | 25,148 | 25,361 | | Cash and Cash Equivalents at End of Year | 33,920 | 25,148 | Financial Summary This section provides a five-year overview (FY2021-2025) of key financial data, including revenue, gross profit, profit before tax, profit attributable to owners, total assets, total liabilities, and total equity, for quick reference and trend analysis Five-Year Financial Summary | Item (HKD '000) | 2021 | 2022 | 2023 | 2024 | 2025 | | :--- | :--- | :--- | :--- | :--- | :--- | | Revenue | 481,710 | 548,839 | 338,318 | 618,193 | 404,950 | | Gross Profit | 60,823 | 46,167 | 11,910 | 34,759 | (59,955) | | Profit/(Loss) Before Income Tax | 40,013 | 28,261 | (153) | 21,163 | (86,646) | | Profit/(Loss) for the Year Attributable to Owners of the Company | 31,134 | 23,519 | 1,001 | 17,260 | (81,524) | | Total Assets | 115,041 | 282,668 | 292,714 | 381,172 | 298,613 | | Total Liabilities | 34,219 | 58,067 | 43,593 | 114,791 | 66,756 | | Total Equity | 80,822 | 224,601 | 249,121 | 266,381 | 231,857 |
铸帝控股(01413) - 2025 - 年度财报