The major financial instruments of the Group include trade and other receivables, bank balances and cash, bank balances - client accounts, trade and other payables, amount due to a director, loan from a former related company and dividend payables. Details of the financial instruments are disclosed in the respective notes. The risks associated with these financial instruments include market risk (represented by interest rate risk), credit risk and liquidity risk. The policies on how to mitigate these risks are set out below. The Group’s management manages and monitors these exposures to ensure appropriate measures are implemented in a timely and effective manner.

Interest rate risk

The Group is primarily exposed to fair value interest rate risk in relation to bank balances and dividend payables. The Group has not used any derivative contracts to hedge its exposure to such interest rate risk. However, the directors of the Group monitors interest rate exposure and will consider other necessary action when significant interest rate exposure is anticipated.

Sensitivity analysis

No sensitivity analysis is presented since the directors of the Group consider that the Group’s exposure to interest rate risk is insignificant.

Credit risk refers to the risk that the Group’s counterparties default on their contractual obligations resulting in financial losses to the Group. The Group’s credit risk exposures are primarily attributable to bank balances - client accounts, bank balances and cash and trade and other receivables. The Group does not hold any collateral or other credit enhancements to cover its credit risks associated with its financial assets.

Bank balances – client accounts

Cash segregated for regulatory purpose is deposited in financial institutions as required by the Hong Kong Securities and Futures Ordinance. These financial institutions are of sound credit ratings and hence management believes that there is no significant credit risk related to cash held for regulatory purpose.

The Group’s securities trading activities are transacted on either a cash or margin basis. The Group’s credit risk is limited because substantially all of the contracts entered into are settled directly at securities clearing organizations. In margin transactions, the Group extends credit to customers subject to various regulatory and internal margin requirements, collateralized by cash and securities in the customers’ account. IPO loans are exposed to credit risk from customers who fail to repay the loans upon IPO stock allotment. The Gorup monitors the customers’ collateral level and has the right to dispose of the newly allotted stocks once the stocks first start trading. No IPO loans are outstanding as of March 31, 2024 and 2025.

In connection with its clearing activities, the Group is obligated to settle transactions with brokers and other financial institutions even if its customers fail to meet their obligations to the Group. Customers are required to complete their transactions by the settlement date, generally two business days after the trade date. If customers do not fulfil their contractual obligations, the Group may incur losses. The Group has established procedures to reduce this risk by generally requiring customers to deposit sufficient cash and/or securities into their account prior to placing an order.

Bank balances and cash

The credit risk of bank balances and cash is limited because the majority of the counterparties are international banks with good reputation. Based on the average loss rate, the 12m ECL on bank balances is considered to be insignificant.

Expected credit losses assessment

The Group’s maximum exposure to credit risk in the event that counterparties fail to perform their obligations at the end of the reporting period in relation to each class of recognized financial assets is the carrying amounts of those assets as stated in the consolidated statement of financial position. The Group’s credit risk is primarily attributable to its trade and other receivables. In order to minimize credit risk, the directors review the recoverable amount of each individual receivable regularly to ensure that adequate impairment losses are recognized for irrecoverable receivable. In this regard, the directors consider that the Group’s credit risk is significantly reduced.

The Group considers whether there has been a significant increase in credit risk of financial assets on an ongoing basis throughout each reporting period by comparing the risk of a default occurring as at the reporting date with the risk of default as at the date of initial recognition. It considers available reasonable and supportive forwarding-looking information. Especially the following information is used:

Despite the aforegoing, the Group assumes that the credit risk on a debt instrument has not increased significantly since initial recognition if the debt instrument is determined to have low credit risk at the reporting date. A debt instrument is determined to have low credit risk if (i) it has a low risk of default, (ii) the borrower has a strong capacity to meet its contractual cash flow obligations in the near term and (iii) adverse changes in economic and business conditions in the longer term may, but will not necessarily, reduce the ability of the borrower to fulfil its contractual cash flow obligations.

Financial assets are written off when there is no reasonable expectation of recovery, such as a debtor failing to engage in a repayment plan with the Group. Where loans or receivables have been written off, the Group, if practicable and economical, continues to engage in enforcement activity to attempt to recover the receivable due.

The Group regularly monitors the effectiveness of the criteria used to identify whether there has been a significant increase in credit risk and revises them as appropriate to ensure that the criteria are capable of identifying significant increase in credit risk before the amount becomes past due.

The Group applies simplified approach under IFRS 9 to provide for ECL using lifetime expected loss provision for trade receivables from contracts with customers and assessed the impairment assessment with credit-impaired individually by making periodic assessments on the recoverability of the receivables based on the historical credit loss experience, adjusted for factors that are specific to the debtors, general economic conditions, assessment of both the current conditions and repayment arrangements with the customers at the reporting date as well as the forecast of future conditions. The provision rates are based on the historical credit loss experience and are adjusted for forward-looking information that is available without undue cost or effort. At every reporting date, the historical observed default rates are reassessed and changes in the forward-looking information are considered.

For internal credit risk management, the Group considers an event of default occurs when information developed internally or obtained from external sources indicates that the debtor is unlikely to pay its creditors, including the Group, in full. It is presumed that default has occurred when a financial asset is more than 90 days past due unless the Group has reasonable and supportable information to demonstrate that a more lagging default criterion is more appropriate. When assessing expected credit losses, default receivables are subject to higher provisions compared to non-default receivables. This is to account for the increased credit risk associated with defaults.

The Group enters into additional payment arrangements with certain customers who have overdue balances. These arrangements serve as structured repayment plans, clearly outlining the repayment schedule for the amounts owed by these customers. In assessing the recoverability of the trade receivables, the Group thoroughly evaluates the financial condition of each customer, taking into consideration their financial statements, historical payment records, and direct communications. Based on this comprehensive assessment, the Group may determine that certain trade receivables overdue by more than 90 days should not be considered in default, as the repayment plans provide a reasonable basis for expecting recovery.

Generally, the ECL is estimated as the difference between all contractual cash flows that are due to the Group in accordance with the contract and all the cash flows that the Group expects to receive, discounted at the effective interest rate determined at initial recognition.

The Group uses two categories for non-trade receivables which reflect their credit risk and how the loss provision is determined for each of the categories. In calculating the expected credit loss rates, the Group considers historical loss rates for each category and adjusts for forward-looking data.

The Group provides financing services only to recognized and creditworthy third parties. Credits are extended to securities margin clients subject to the marginable value of the listed securities pledged with the Group. The margin ratios are reviewed and determined periodically.

The Group applies simplified approach under IFRS 9 to provide for ECL using lifetime expected loss provision for trade receivables from contracts with customers and assessed the impairment assessment with credit-impaired individually by making periodic assessments on the recoverability of the receivables based on the historical credit loss experience, adjusted for factors that are specific to the debtors, general economic conditions, assessment of both the current conditions and repayment arrangements with the customers at the reporting date as well as the forecast of future conditions. The provision rates are based on the historical credit loss experience and are adjusted for forward-looking information that is available without undue cost or effort. At every reporting date, the historical observed default rates are reassessed and changes in the forward-looking information are considered.

The information about the ECL for the trade receivables from margin clients at the end of the reporting period based on the Group’s internal credit risk grading assessment is recognized below.

The movement in the loss allowance for trade receivables from margin clients during the year is recognized below.

During the year ended March 31, 2025, net impairment loss of HK$nil (2024: HK$nil and 2023: HK$860,000) was recognized for trade receivables from margin clients during the year. Write-off of the loss allowance for trade receivables from margin clients for the year ended March 31, 2025 was HK$nil (2024: HK$5,004,000 and 2023: HK$nil).

The information about the ECL for the trade receivables from cash clients at the end of the reporting period based on the Group’s internal credit risk grading assessment is summarized below.

The movement in the loss allowance for trade receivables from cash clients during the year is summarized below.

During the year ended March 31, 2025, net impairment loss of HK$nil (2024: HK$nil and 2023: HK$284,000) was recognized during the year. Write-off of the loss allowance for trade receivables from cash clients for the year ended March 31, 2025 was HK$nil (2024: HK$2,360,000 and 2023: HK$nil).

The Group applies simplified approach under IFRS 9 to provide for ECL using lifetime expected loss provision for trade receivables from contracts with customers and assessed the impairment assessment with credit-impaired individually by making periodic assessments on the recoverability of the receivables based on the historical credit loss experience, adjusted for factors that are specific to the debtors, general economic conditions, assessment of both the current conditions and repayment arrangements with the customers at the reporting date as well as the forecast of future conditions. The provision rates are based on the historical credit loss experience and are adjusted for forward-looking information that is available without undue cost or effort. At every reporting date, the historical observed default rates are reassessed and changes in the forward-looking information are considered.

The Group enters into additional payment arrangements with certain customers who have overdue balances. These arrangements serve as structured repayment plans, clearly outlining the repayment schedule for the amounts owed by these customers. In assessing the recoverability of the trade receivables, the Group thoroughly evaluates the financial condition of each customer, taking into consideration their financial statements, historical payment records, and direct communications. Based on this comprehensive assessment, the Group may determine that certain trade receivables overdue by more than 90 days should not be considered in default, as the repayment plans provide a reasonable basis for expecting recovery.

The information about the ECL for the trade receivables from contracts with customers at the end of the reporting period based on the Group’s internal credit risk grading assessment is summarized below.

The movement in the loss allowance for trade receivables from contracts with customers during the year is summarized below.

During the year ended March 31, 2025, net impairment loss on trade receivables from contracts with customers of HK$330,000 (2024: HK$863,000 and 2023: HK$18,678,000) was recognized during the year. Write-off of the loss allowance for trade receivables from contracts with customers for the year ended March 31, 2025 was HK$4,844,000 (2024: HK$nil and 2023: HK$nil).

Concentration of credit risk

The Group’s exposure to credit risk associated with its activities is measured on an individual counterparty basis, as well as by groups of counterparties that share similar attributes.

Details of the customers accounting for 10% or more of total revenue are as follows:

* Less than 10% of the total revenue

Details of the customers accounting for 10% or more of total trade receivables are as follows:

* Less than 10% of the total trade receivables

In order to minimize the credit risk, the management of the Group has delegated a team responsible for determination of credit limits and credit approvals.   

The disclosure of customers represents separate and distinct customers and there are no other customers listed that also comprise a significant percentage of either the Group’s revenues and trade receivables for any year presented.

Other receivables

As part of the Group’ credit risk management, the directors of the Group have obtained understanding to the credit background of the debtors and undertaken the internal credit approval process. The Group applies internal credit rating for its debtors. As of March 31, 2025 and March 31, 2024, the other receivables subject to ECL assessment were classified as “performing” by the management pursuant to their assessment. The gross carrying amounts of the other receivable are disclosed in Note 13. During the year ended March 31, 2025, an impairment loss amounting to HK$nil (2024: HK$nil and 2023: HK$800,00  0) was recognized in profit or loss.

The following table details the Group’s remaining contractual maturity for its non-derivative financial liabilities. The table has been drawn up based on the undiscounted cash flows of financial liabilities based on the earliest date on which the Group can be required to pay.

The directors of the Group consider that the carrying amounts of the financial assets and financial liabilities of the Group recorded at amortized cost in the consolidated financial statements at the end of each reporting period approximate their fair values. Such fair values have been determined in accordance with generally accepted pricing models based on discounted cash flow analysis.

IFRS 7 Financial Instruments: Disclosures establishes a fair value hierarchy that prioritizes the inputs to valuation technique used to measure fair value as follows:

There were no transfers between levels 1, 2 and 3 during the year.