# Macau Property Opportunities Fund Annual Report for the year ended 30 June 2025 --- . --- Macau Property Opportunities Fund (“MPO”, or the “Company”) is a closed-end investment fund and the only London-listed company dedicated to investing in real estate in Macau, the world’s largest gaming market and the only Chinese city in which gaming is permitted. Historically, the Company has held multi-segment property assets in Macau and the neighbouring city of Zhuhai. It has been in realisation mode since 2018. Its current portfolio comprises prime residential assets in Macau fair-valued at a collective US$101.5 million as at 30 June 2025 that are being progressively divested. MPO is managed by Sniper Capital Limited, an Asia-based property investment manager with a strong track record in fund management and investment advisory. # Contents Corporate Introduction 2 Key Facts 3 Chairman’s Message 4 Board of Directors 10 Manager’s Report 12 Environmental, Social and Governance Report 35 Manager and Adviser 40 Directors’ Report 42 Corporate Governance Report 50 Committee Reports 56 Statement of Directors’ Responsibilities 65 Independent Auditor’s Report 67 Financial Statements 76 Directors and Company Information 112 --- # Corporate Introduction M acau Property Opportunities Fund Limited, a closed-end investment company, was incorporated and registered in Guernsey under the Companies (Guernsey) Law, 2008 (as amended) on 18 May 2006, under registration number 44813. The Company is an authorised entity under the Authorised Closed-Ended Investment Schemes Rules 2008. It is premium listed on the London Stock Exchange. Sniper Capital Limited, the Manager for MPO, is responsible for the day-to-day management of the Company’s property portfolio and the identification and execution of divestment opportunities. The Company’s entire remaining investment portfolio consists of residential property investments in Macau. The Company is managed with the objective of realising the value of all remaining assets in its portfolio, individually, in aggregate or in any other combination of disposals or transaction structures, in a prudent manner, consistent with the principles of good investment management and with a view to making an orderly return of capital to shareholders. Its overriding aim is to deliver cost-effective and timely divestments of its three remaining properties to enable further returns of capital to shareholders. The Company has ceased to make any new investments and will not undertake additional borrowings other than to refinance existing loans or for short-term working capital purposes. The Board reflects a diversity of ethnicity, gender and relevant experience from a corporate, sectoral and geographical perspective, coupled with a deep understanding of the unique features of Macau, its property market and the Company’s portfolio. The Board has assessed that it has the capacity to fulfil its obligations in the context of the latest corporate governance guidelines, taking full account of the Company’s late-stage divestment and its clearly defined business objectives. Pursuant to its Articles of Incorporation, MPO is subject to annual continuation votes. At the Annual General Meeting (AGM) held on 20 December 2024, Shareholders voted in favour of a Continuation Resolution to extend the life of the Company for a further year until the next continuation vote before 31 December 2025. The Board will be recommending the Company’s continuation at the AGM, which is expected to be held in December. 02.1 Corporate Introduction --- Key Facts Exchange London Stock Exchange (main market) Domicile Guernsey Share Denomination Pounds sterling; reporting currency: US dollars Symbol MPO Shares in Issue 61,835,733 Fee Structure Realisation-focused fee structure that incentivises the Manager to divest assets at optimal prices Lookup Reuters: MPO.L Bloomberg: MPO:LN Shares Held in Treasury Nil Inception Date 5 June 2006 Net IPO Proceeds GBP101 million (US$189 million) # ADVISERS & SERVICE PROVIDERS Company Secretary and Administrator Ocorian Administration (Guernsey) Limited Corporate Broker Panmure Liberum Limited External Auditor Deloitte LLP 03 / Key Facts --- Chairman's Message I present my statement for the financial year ended 30 June 2025 alongside commentary on post year end developments. Our property divestment programme continued during the period with nine units sold at The Waterside and a further five units sold or contracted to be sold post year end. Three villas at The Fountainside were also sold during the period with one transaction completed post year-end. The final remaining villa was contracted to be sold post year end, leaving only three small flats to be sold at The Fountainside. The Manager has identified potential buyers for the three flats and is seeking ways to clear the restrictions impacting the sale of these assets with several options being considered. Over recent months, the Manager has reported seeing increased interest and a slight hardening of pricing for the remaining 18 units in the Waterside and at the time of writing, is in discussions with potential buyers for a further three units as part of the ongoing divestment programme. Despite several focussed sales initiatives, divestment of Penha Heights has not yet been achieved. The targeted marketing resulted in an increase in interest and viewings and with revised pricing generating more engagement. Active marketing of this asset will continue in order to achieve a sale of this landmark asset at the earliest opportunity. On a combined basis, from July 2024 to October 2025, a total of 18 assets at The Waterside and The Fountainside were divested generating US$36.2 million (HK$282.6 million) of sales proceeds. Accelerated repayment plans have also been exercised to service and pay down bank debt. 04 I Chairman's Message --- The financial year started with moderate optimism and increased property market activity following the long overdue abolition of the Macau government's restrictive real estate and lending regulations. Although that was tempered by the effect of primary developers offering discounted sales of their units, it was felt that the higher quality of our properties would be a key differentiator in their appeal to prospective purchasers. Towards the end of 2024 there were signs that the economy both in Macau and on a broader basis in mainland China and Hong Kong continued to struggle. Not only did this create caution and a wait and see approach amongst prospective purchasers, it also limited the universe of buyers, especially from China where the economy continued to undergo significant adjustment. In Macau, whilst the gaming and tourism sectors continued their strong post Covid recovery, the performance of the wider economy has continued to suffer. Amid these changing economic conditions, investor confidence was further impacted by US-China trade tensions, which were emerging when we issued our interim results. Heightened geopolitical tensions also weighed on sentiment and added pressure to delivering our targeted level of divestments. This contributed to a decline in valuations to materially lower levels and emphasised the need to be dynamic on pricing strategy in order to continue delivering sales. The other significant factor we had to contend with was the changing attitude of lenders towards real estate. This directly influenced the behaviour towards our own debt facilities, but more importantly in the context of property market dynamics, it also severely restricted financing options for prospective purchasers. This resulted in some lost sales as prospective purchasers were unable to raise finance and withdrew from negotiations. Against this backdrop, and notwithstanding the dynamic and varying sales tactics adopted, there were periods when sales levels were static, and other times when sales were ahead of plan and allowed for early debt repayment. Without question, maintaining the divestment momentum and seeking to match sales to scheduled debt repayments has been our most significant challenge to date. 05 I Chairman's Message --- Delayed sales at key points causing deferred debt repayments have been a contributory factor in the tougher stance adopted by our lenders. Debt levels have been significantly reduced by US$22.8 million during the financial year falling from US$82.8 million to US$60.0 million. A further reduction of US$13.5 million has been achieved to the Annual Report date, 31 October 2025. Despite the welcome reduction in debt, lower valuations have impacted our Adjusted Net Asset Value and also the Loan to Value ratios. The need to manage LTV ratios in line with covenants has resulted in further debt repayments at the expense of operating cashflow. This increased focus on valuations and LTV ratios has necessitated a very proactive approach between lenders and the Manager in order to achieve successful loan extensions and some improvements in operating cash flow. More specific details on the changes to the debt and loan facilities are contained in the body of this Report and Accounts. Considerable rigour has been applied in the assessment of the ongoing viability of the Company, taking into consideration the stage in the Company’s life, divestments and debt reduction already achieved, as well as the remaining levels and timing of debt to be repaid. This is explained in more detail in the Director’s Report. At this stage in the Company’s divestment programme, the requirement to achieve continued sales and maintain the ongoing relationships with our lenders is to be highlighted. Management of covenants and repayment schedules necessarily has a close interplay with the Company’s operating cashflow. As valuations have declined, lenders positions have noticeable hardened. As a consequence, the Company is having to very strictly and carefully manage its working capital to meet obligations both to its lending partners and also its service providers. We have taken account of the progress achieved in delivering our strategy albeit at a slower pace because of market conditions. In recognition that we are moving towards full divestment and debt elimination leading to the objective of a repayment of capital to shareholders, the financial statements are prepared on a basis other than that of a going concern basis. The careful assessments that have been made are set out in more detail in the Director’s Report and in the Notes to these financial statements. The requirement to continue the sale of portfolio assets is key to achieve the Company’s objective. 06 I Chairman’s Message --- Reporting on our financial results, I must highlight that the factors already outlined have impacted our performance, resulting in a materially lower Adjusted Net Asset Value primarily as a consequence of reduced property valuations. The key points to highlight are as follows: - Our portfolio’s valuation declined 16% from 30 June 2024 on a like-for-like basis. - The Company’s adjusted net asset value (NAV) was US$37.6 million as of 30 June 2025. This is equivalent to US$0.61 (44 pence) per share and represents a decline of 43.1% (47.5% in sterling terms) compared to the previous year. - IFRS NAV, which records inventory at cost rather than market value, was US$31.5 million, or US$0.51 (37 pence) per share, down 32.2% from the previous year. Our share price has understandably been impacted by these changes in our financial results and the discount of our share price to Adjusted Net Asset value was 45.7% as at 30 June 2025. Following the release of our unaudited Net Asset Value, it was 43.1%. With continued operating cashflow constraints, it has not been possible to implement any form of discount management, although the general level of trading in the Company’s shares remains at historically low levels. Our environmental, social and governance policies and approach have been consistently applied, in line with those reported in previous years. These are now to be seen in context of our reduced portfolio of assets with no development being undertaken. The Board’s composition has been carefully considered, and given the limited projected life of the Company, no changes are proposed currently. The diversity of skill sets and broad experience has been applied well during a challenging year that required increased levels of board engagement to work through the changing circumstances. Director’s compensation remained unchanged. 07 / Chairman's Message --- The outlook is expected to remain challenging; however, it is hoped that the green shoots appearing in neighbouring Hong Kong’s residential market, combined with continued efforts to stabilise Mainland China’s property markets, may start to feed through to more positive sentiment in Macau. In addition, the downward trend of US interest rates has already started to feed through to the availability of more competitive financing options for purchasers of our properties. The slight increase in sales velocity and stronger pricing achieved by the Manager in recent weeks, combined with a number of active sale prospects in hand could also justify some cautious optimism, all of which provided support for our Going Concern Assessment. What has emerged through the summer was that the Chinese Communist Party has embarked on concerted efforts against involution, or *neijuan*. This is a catch-all-term that refers to a descent into industrial over capacity that leads to “race-to-the-bottom” pricing, causing deflation and lower profitability. The anti-involution campaign is reportedly targeting local authorities, corporates and most relevant in our context, the banking sector. Whilst generally a positive reaction on a macro scale there may be short term impact on sentiment and approach. What were previously well understood principles under which we managed our debt have clearly changed amid new and tougher guidelines that may signal a top-down shift as well as a reaction to lower valuations and the timing of debt repayments. Given an already challenged real estate sector, this is an emerging development that we need to manage carefully. Further to the Company’s announcements on 29 August 2025 and 22 October 2025, the Company continues in active discussions with its lending partners to closely monitor compliance with loan covenants and to manage repayments of the Company’s loans due in both 2025 and 2026. In October, the Company secured loan extension with *Penha Heights* lender BCM Bank to extend the loan to end of January 2026. The Company’s Directors and Manager are carefully implementing the Company’s asset divestment programme to ensure sufficient cashflow is generated from asset divestment to meet the needs of the Company, its lending partners and service providers, while at the same time protecting shareholders value through an appropriately phased divestment process. The Company’s primary source of working capital continues to be through the net proceeds of ongoing property sales, either individually or en bloc, which are also funding the Company’s scheduled debt repayments. To this end the Directors are considering all options. Based on feedback 08 I Chairman’s Message --- from pre-marketing in response to a potential of an equity capital raise announced on 22 October 2025 the Company intends to proceed with a modest capital raise. If successful this will supplement divestments to ensure that debt repayments are met. Such measures are moderately dilutive to shareholders but deemed necessary to provide confidence that the Company can meet its near term obligations. Should this be successful it is deemed to deliver a better outcome for shareholders. Should the capital raise be unsuccessful, however, the options for the Company will be adverse in terms of the overall outcome. The possibility will exist, for example, that we lose possession of Penha Heights as a further bank default is possible. The Company may remain viable subject to the continuing divestment of assets but it will undoubtedly be significantly impacted. We continue to believe that a carefully managed divestment process is in the best interest of all shareholders. Any unnecessary acceleration of the divestment of the portfolio, or any forced sale of assets, would produce a poor outcome for shareholders. Buyers, already aware of market stress, would likely take such an opportunity to force prices to even lower levels. Accordingly, it is our recommendation to the Annual General Meeting that Shareholders vote in favour of extending the life of the Company. The Company’s commitment, as demonstrated by the sales already delivered, remains to eliminate its debt and return capital to shareholders at the earliest possible opportunity. ![img-0.jpeg](img-0.jpeg) MARK HUNTLEY CHAIRMAN MACAU PROPERTY OPPORTUNITIES FUND LIMITED 31 October 2025 ![img-1.jpeg](img-1.jpeg) 09 I Chairman's Message --- Board of Directors ![img-2.jpeg](img-2.jpeg) # MARK HUNTLEY Chairman Mark Huntley has more than 40 years of experience of fund management, administration and fiduciary operations. His involvement in funds and private assets has spanned real estate, private equity and emerging market investment. He has served on the boards of listed and private investment funds and of management/general partner entities. Mr Huntley is a resident of Guernsey. 10 I Board of Directors --- ![img-3.jpeg](img-3.jpeg) # ALAN CLIFTON *Non-executive Director* *Chairman of Audit and Risk Committee* Alan Clifton began his career at stockbroker Kitcat & Aitken, first as an analyst, thereafter becoming a Partner and then a Managing Partner before the firm’s acquisition by the Royal Bank of Canada. He was subsequently invited to take up the role of Managing Director of the asset management arm of Aviva, the UK’s largest insurance group. He has had a long non-executive career as an Independent Director of numerous investment and finance sector companies. Mr Clifton is a UK resident. ![img-4.jpeg](img-4.jpeg) # CARMEN LING *Non-executive Director* Carmen Ling has more than 25 years of banking experience. She has served as a Managing Director at Citigroup and Standard Chartered Bank, and she has extensive experience of client coverage, real estate, transaction banking and network strategies. Her role as global head of RMB Internationalisation/Belt & Road at Standard Chartered Bank has added to her unique knowledge and experience as an international banker. Before beginning her banking career, Ms Ling worked in the hospitality industry for hotel project developments in North Asia, including China and Japan. She is a resident of Hong Kong. 11 / Board of Directors --- Financial Snapshot | | 2020 | 2021 | 2022 | 2023 | 2024 | 2025 | | --- | --- | --- | --- | --- | --- | --- | | NAV (IFRS) (US$ million) | 100.6 | 97.9 | 77.6 | 65.7 | 46.4 | 31.5 | | NAV per share (IFRS; US$) | 1.63 | 1.58 | 1.25 | 1.06 | 0.75 | 0.51 | | Adjusted NAV (US$ million)¹ | 136.5 | 128.8 | 103.4 | 90.4 | 66.1 | 37.6 | | Adjusted NAV per share (US$)² | 2.21 | 2.08 | 1.67 | 1.46 | 1.07 | 0.61 | | Adjusted NAV per share (pence)³,⁴ | 179 | 150 | 138 | 116 | 85 | 44 | | Share price (pence) | 61.75 | 67.5 | 38.2 | 58.5 | 35.6 | 24.1 | | Portfolio valuation (US$ million)⁵ | 275.6 | 265.4 | 242.0 | 200.5 | 152.7 | 101.5 | | Loan-to-value ratio⁴,⁵) | 49.6 | 49.3 | 53.3 | 50.9 | 52.5 | 58.3 | 1. Based on the following US dollar/sterling exchange rates on 30 June: 2020: 1.231; 2021: 1.386; 2022: 1.212; 2023: 1.261; 2024: 1.265; 2025: 1.372 a. Refer to Note 18 for calculation of Adjusted NAV and Adjusted NAV per share b. Refer to Notes 6 & 7 for independent valuations of the Group's portfolio, including investment property and inventories ![img-5.jpeg](img-5.jpeg) ![img-6.jpeg](img-6.jpeg) 12 / Manager's Report | Financial Snapshot --- # Overview The financial year under review was marked by pervasive uncertainty that weighed heavily on Macau's broader economy. Although headline figures indicated continued growth, driven primarily by the territory's core tourism and gaming sectors, the recovery outside those areas remained uneven. Key segments such as retail, food & beverage, and small and medium-sized enterprises continued to struggle to regain momentum. In the residential property sector, the Macau government's decision in April 2024 to dismantle its decade-long real estate cooling measures initially sparked optimism. However, the rebound was short-lived. Renewed investment interest was limited mainly to the more affordable segment and newly built units, with developers offering steep discounts to clear excess inventory and manage rising debt obligations. Although Macau has not been directly targeted in the U.S.-China trade dispute, it has felt the ripple effects. Given investors' preference for certainty and transparency, heightened geopolitical tensions and increased volatility have eroded confidence, particularly in the luxury residential property market. As a result of these pressures, prospective buyers have remained cautious, deferring purchasing decisions and avoiding long-term mortgage commitments. Even a series of interest rate cuts that lowered Macau's base rate by a total of 100 basis points in the second half of 2024 failed to generate sustained momentum in the market. By early 2025, residential property prices had declined to a 13-year low, with industry professionals describing the current conditions as the most challenging the sector has faced in four decades. Notwithstanding these headwinds, the Manager continued to advance the strata sales programme at The Waterside. The successful divestment of nine units during the financial year, followed by five more after year-end, brings the cumulative total to 41 units, realising a combined HK$834.5 million (US$106.7 million). Regarding the post-year-end sales, four of the five units has been completed as of Annual Report date, with completions for the remaining unit expected prior to the end of Q4 2025. The property's 18 remaining available units are primarily located on higher floors. In addition, three of the four villas at The Fountainside were also divested for a total consideration of HK$41.4 million (US$5.3 million), with two transactions completed during the financial year and one transaction completed post year end. The fourth villa was also sold following year end, subject to completion in January 2026. 13 / Manager's Report | Financial Snapshot --- Financial Snapshot ## Financial Review ### Valuation Amid the challenging operating environment, the Company’s portfolio, comprising three main assets, was appraised by its valuers, Savills (Macau) Limited at US$101.5 million as at 30 June 2025. On a like-for-like comparison, excluding units at *The Waterside* and *The Fountainside* that had been sold, the portfolio’s value depreciated by 16% from the previous year, continuing the decline seen during the Covid-19 pandemic. Despite the lower valuation, the Manager continues to make progress in asset sales by offering competitive prices, which has enabled the Company to continue to reduce bank debt levels and manage overall loan covenants. Leading real estate consultants have attributed the continued decline in property prices to poor market sentiment stemming from several compounding factors. Despite the strong performance of Macau’s key economic drivers — gaming and tourism — property market sentiment has suffered as banks have reduced or frozen their real estate lending, and credit departments have tightened their policies, making it increasingly difficult for buyers and developers alike to secure loans. These financial constraints, combined with uncertainty over the impact of China’s stimulus packages and geopolitical uncertainties, have weakened demand across the property sector, dragging down market activity and exerting pressure on prices. As a result of the decline in the value of the portfolio and the persistently high interest rate environment, MPO’s Adjusted Net Asset Value (NAV) was US$37.6 million as at 30 June 2025, which translates to US$0.61 (44 pence) per share, a 43.1% decrease year on year (YoY). Its IFRS NAV, which records inventory at cost rather than market value, was US$31.5 million, or US$0.51 (37 pence) per share, a 32.2% drop YoY. 14 / Manager's Report | Financial Snapshot --- # Capital Management Capital management remains a key priority for the Company. As at 30 June 2025, the total assets on its balance sheet, two of which were carried at cost, were valued at US$96.9 million, while its aggregate liabilities were US$65.5 million. Nevertheless, with new sales achieved during the financial year, the Company’s debt position has continued to improve. As at 30 June 2025, its gross borrowings had been reduced to US$60.0 million from US$82.8 million at the end of the previous financial year. Despite the reduction in gross borrowings, the Company’s loan-to-value (LTV) ratio had risen to 58.3% from 52.5% at the end of the previous financial year, due mainly to the sharp portfolio valuation decline, which aligned with the overall trend in Macau’s residential sector. The decline in valuation during the year resulted in breaches of LTV loan covenant with a lender. These breaches were noted and reported as appropriate; frequent dialogue has also been maintained including solutions and plans for loan covenant breaches. As at the end of October 2025, the Company’s debt position has improved since the year end, following the completion of all three committed disposals at *The Waterside* that were outstanding as of 30 June 2025, as well as four post year-end disposals. Looking ahead, the remaining one post-year-end transaction at *The Waterside* is expected to close before 31 December 2025, which will contribute to additional debt reduction. The post-year end disposal of the Villa at *The Fountainside* is also anticipated to close by Q1 2026. The proceeds from these sales will be primarily allocated to debt repayment. Once completed and the proceeds are applied, gross borrowings are projected to decrease to US$43.3 million, resulting in a projected Company-level LTV ratio of 53.5% based on valuations from June 2025. In parallel, the Company has secured an extension of its loan facilities for *The Waterside* and *The Fountainside* to September 2026. The revised agreement features a structured repayment schedule, ensuring capital management is coordinated with the inflow of sales proceeds and debt servicing obligations over the extended term. Subsequent to year end, the Company has also extended the *Penha Heights* loan facility with BCM Bank to January 2026. This relatively short extension period underscores the importance of maintaining liquidity and optimising the timing of asset disposal. As such, the Company will need to manage the sale of *Penha Heights* with caution, ensuring broader financial strategy without compromising the asset’s intrinsic value. 15 / Manager's Report | Financial Snapshot --- Financial Snapshot # Cash Management The Company ended the financial year with a consolidated cash balance, including deposits with lenders, of US$1.53 million, of which US$1.41 million remains pledged with lenders as collateral for credit facilities. The balance of approximately US$0.12 million reflects free cash, which declined from US$0.2 million as of 30 June 2024. During the financial year under review, a combination of US$23.3 million of sales proceeds and released pledged deposits of US$3.2 million was utilised to repay US$22.3 million of loan obligations, finance loan interest, and meet working capital requirements. The Company is engaged in ongoing discussions with lenders to address a recent tightening of restrictions on the usage of sales proceeds, which is successfully paying down debt levels but also putting pressure on operational liquidity. Discussions are progressing towards a more flexible framework, aligning repayments with the Company's asset sales strategy while ensuring sufficient operational liquidity to maintain financial momentum and meet other financial obligations. The Company's approach remains collaborative and transparent, with a shared goal of balancing liquidity requirements with prudent risk management. The Monetary Authority of Macao reduced interest rates from a 15-year high of 5.75% to 4.5% through a series of rate cuts during the period, in tandem with the U.S. Federal Reserve. Although commercial banks have lowered their lending rates accordingly, the overall high interest rate environment continues to weigh on the Company. Refinancing property in Macau has remained challenging due to banks adopting a more cautious stance towards real estate lending. Some lenders still offer refinancing options, but they tend to impose conservative LTV ratios and restrictive terms. The Company will continue to look to improve its financing options. 16 / Manager's Report | Financial Snapshot --- # Portfolio Updates | Property | Segment | No. of units | Commitment (US$ million) | Acquisition cost (US$ million) | Project development cost (US$ million) | 30 June 2025 Market valuation (US$ million) | Changes (based on market value) | | Project composition (based on market value) | | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | | | | | | | | | Over the year | Since acquisition | | | The Waterside Tower Six at One Central Residences* | Luxury residential | 26** | 43.7 | 37.7 | 6 | 62.8 | -13.6% | 67% | 61.8% | | The Fountainside*** | Low-density residential | 5*** | 4.2 | 1.2 | 3 | 7.4 | -24.1% | 503% | 7.3% | | Penha Heights | Luxury residential | N.A. | 28.4 | 26.7 | 1.7 | 31.3 | -18.4% | 17% | 30.9% | | Total | | | 76.3 | 65.6 | 10.7 | 101.5 | -16% | 54.7% | 100% | * One Central is a trademark registered in Macau SAR under the name of Basecity Investments Limited. Sniper Capital Limited, Macau Property Opportunities Fund Limited, MPOF Macau (Site 5) Limited, Bela Vista Property Services Limited and The Waterside are not associated with Basecity Investments Limited, Shun Tak Holdings Limited or Hongkong Land Holdings Limited. ** Three units at The Waterside were divested with completion occurring after the present financial year end, bringing the number of units available for sale to 23 as of year end. *** 1 villa has been sold with completion post year end, bringing the number of units available for sale to 4 as of year end. ![img-7.jpeg](img-7.jpeg) The Waterside ![img-8.jpeg](img-8.jpeg) The Fountainside ![img-9.jpeg](img-9.jpeg) Penha Heights 17 I Manager's Report I Portfolio Overview --- # Portfolio Updates ## Divestment Performance The Company has faced a series of challenges during the financial year, as the prevailing operating environment has deteriorated amid rising geopolitical tensions, economic disruptions and heightened overall uncertainty. Initial optimism following the Macau government's lifting of its decade-long real estate cooling measures in April 2024 dissipated quickly as investors remained largely on the sidelines, engaging only when compelling bargains emerged. This trend was exacerbated by aggressive discounting by major developers seeking to clear inventory held on their books. That led to a sharp increase in transaction levels but also required other sellers to offer discounts to remain competitive. The first half of 2025 was marked by further upheaval, with the United States' overhaul of its international trade policy injecting an unprecedented degree of volatility into the global economy. Although Macau has largely avoided a direct impact from U.S. tariffs, its deep economic integration with mainland China, particularly its reliance on mainland Chinese visitation to fuel tourism and gaming, has created uncertainty and left the territory vulnerable to broader macroeconomic pressures. The trade tensions and associated uncertainties have resulted in tightened borrowing conditions in Macau as lenders have grown increasingly risk-averse. This has constrained the Company's divestment efforts, with tighter credit conditions affecting both new mortgage approvals for property purchases and loan facilities secured against property assets, including those extended to the Company. As a result, the Company's ability to close divestment transactions has been limited. In most instances, this has necessitated sales at competitive prices to help accommodate buyers obtaining financing on terms acceptable to local banks. Despite these substantial headwinds, significant divestments were achieved throughout the year, which is a testament to the quality and resilience of the Company's assets and the effectiveness of its sales strategy in navigating an exceptionally difficult market. 18 / Manager's Report / Portfolio Updates --- 19 / Manager's Report / Portfolio Updates # The Waterside The Waterside, a 59-unit luxury apartment block in the prime Macau Peninsula area, is the Company's flagship asset. As at 30 June 2025, a total of 36 units at The Waterside with a combined value of HK$758.7 million (approximately US$97 million), with three of these unit sales completed post-year end, had been sold under the strata sales programme that commenced in H1 2022. 23 units remained available for sale at the end of the financial year. During the course of the financial year, the Company sold nine additional standard units for a total consideration of HK$151.6 million (US$19.5 million). The average price of these units transacted was HK$7,350 per square foot, with a discount to their respective valuations. Among the nine sales, three transactions were completed after year end. Five additional units were contracted for sale post-year end with four transactions completed as at Annual Report date. To compete with other developers' heavy discounts, the Company offered attractive pricing that secured sales while maintaining all prices well above acquisition cost. Although the Company is winding down its leasing programme at The Waterside to focus firmly on divestment, a significant number of prospective purchasers have expressed a preference for tenanted units. Therefore, pending their sale, the Company has leased a number of the remaining units on a shorter-term basis, yielding an occupancy rate of 37% of total available gross floor area for the period, with rents at an average of HK$18.36 (US$2.34) per square foot per month. --- ![img-10.jpeg](img-10.jpeg) ![img-11.jpeg](img-11.jpeg) ![img-12.jpeg](img-12.jpeg) 201 Manager's Report | Portfolio Updates --- 21 / Manager's Report / Portfolio Updates # The Fountainside The Fountainside is a low-density, 42-unit freehold residential development in Macau's Penha Hill district. Having previously sold all 36 standard units, the Company has focused on divesting the remaining four villas and three reconfigured apartments, as well as two car-parking spaces. By adopting a flexible approach and entertaining both individual and en bloc offers, the Company sold three villas for a total consideration of HK$41.4 million (US$5.3 million) during the financial year. Two of those transactions were completed during the financial year and the third sale completed in Q3 2025. The villas were sold at discounts to their most recent valuations that nevertheless represented an good premium level over their original cost. The Company has secured the disposal of the last villa following the year end with completion before end of January 2026. The sales and marketing effort for the three reconfigured apartments and two car-parking spaces that remain available for sale has been hampered by protracted challenges in obtaining approvals for the parking spaces, newly built as part of a reconfiguration at the property. Although the Company continues to pursue a resolution of these bureaucratic issues, the Manager is not ruling out the option of reinstating the units as duplexes or making further minimal adjustments to the apartments to ensure conforming of the requirements. --- ![img-13.jpeg](img-13.jpeg) ![img-14.jpeg](img-14.jpeg) ![img-15.jpeg](img-15.jpeg) 22 I Manager's Report I Portfolio Updates --- Penha Heights Penha Heights is a prestigious five-storey colonial-style villa spanning more than 12,000 square feet. Perched atop Penha Hill, an exclusive and highly sought-after residential enclave, the property is nestled amid lush greenery and boasts sweeping views of the bay. The Company has meticulously maintained and enhanced the villa, preserving its timeless charm and appeal. To market the property, the Company has engaged a Hong Kong-based firm of specialist property agents, leveraging its regional network of ultra-high-net-worth clients. Although these efforts have generated ongoing viewings by prospective buyers, no firm offers have been received to date. The Company nevertheless remains in active discussions with several interested parties to advance a potential sale of the property. 23 / Manager's Report / Portfolio Updates --- ![img-16.jpeg](img-16.jpeg) ![img-17.jpeg](img-17.jpeg) ![img-18.jpeg](img-18.jpeg) 24 / Manager's Report / Portfolio Updates --- Macroeconomic Update # Slowing economic growth After a strong post-pandemic rebound in 2023 and the first half of 2024, Macau's economic momentum has eased amid growing economic headwinds and increased volatility. For full-year 2024, gross domestic product rose 8.8% YoY, reaching roughly 86.4% of pre-pandemic levels but falling short of analysts' projections, which had anticipated growth exceeding 10%. Throughout the year, the pace of GDP expansion slowed significantly, from 23.0% and 7.1% YoY, respectively, during the first and second quarters to just 3.8% and 3.4% during the third and fourth quarters. During the first half of 2025, global economic uncertainty continued to weigh on Macau's economy. Additionally, shifts in visitor behaviour — including changes in spending patterns, preferences and demographics — affected tourism and gaming, the territory's twin drivers of growth. As a result, GDP contracted by 1.3% YoY in Q1 2025, bringing the economy's size to 85.2% of its corresponding 2019 scale. However, with the gaming sector rebounding strongly during the second quarter, GDP for the quarter grew by 5.1% YoY. This brought first-half 2025 growth to 1.8% YoY and lift economic output to around 87% of its pre-pandemic level. Despite the slowdown, Macau's labour market has remained stable, with an unemployment rate of 1.9% in May 2025, comparable to both the same period a year earlier and to pre-pandemic levels, which hovered just below 2%. Economic forecasts for 2025 have been revised downward, tempering earlier optimism about a full return to pre-pandemic output within the year. The International Monetary Fund now predicts 2025 GDP growth of 3.6% YoY, half of an earlier estimate of 7.3% in October last year. The University of Macau has also lowered its forecast but still anticipates full-year growth of 6.8%. ![img-19.jpeg](img-19.jpeg) GDP and Real Growth Rate Source: DSEC (Statistics and Census Service) 25 / Manager's Report / Macroeconomic Update --- # Tourism Macau recorded 34.9 million visitor arrivals in 2024, a 24% YoY increase and surpassing the government’s target of 33 million. The figure represented approximately 89% of the record set in 2019. Same-day and overnight visitor numbers rose by 35% and 13% YoY, respectively. However, as same-day visits outpaced overnight stays, the average length of stay declined slightly by 0.1 day to 1.2 days. The average duration of stay for overnight visitors remained unchanged at 2.3 days. Arrivals from mainland China grew by 28.6% YoY to 24.5 million, accounting for 70% of all visitors. Notably, 49% of these visitors came from the nine Pearl River Delta cities within the Greater Bay Area. Visitors from Hong Kong made up 21% of total arrivals, or around 7.2 million, representing a marginal 0.2% YoY decline. Altogether, approximately 93% of Macau’s visitors in 2024 were from Greater China. Nonetheless, efforts to broaden the city’s tourism base saw international visitor numbers rise by 66% YoY to about 2.4 million. In early July 2025, Macau surpassed the 20 million visitor arrivals mark, reaching that threshold 26 days earlier than in 2024. With a continued surge in tourist numbers during the summer months, Macau’s government is optimistic that total visitor arrivals for the year could come close to matching the record-breaking 39 million set in 2019. Visitor Arrivals to Macau (in million) ![img-20.jpeg](img-20.jpeg) Source: DSEC (Statistics and Census Service) 26 / Manager's Report / Macroeconomic Update --- # Gaming Macau’s gross gaming revenue (GGR) for 2024 increased 23.9% YoY, reaching MOP226.78 billion (approximately US$28.34 billion). This sustained recovery highlights the strong demand for Macau’s tourism and gaming offerings, particularly among visitors from mainland China and Hong Kong. Compared to pre-pandemic levels, 2024’s GGR amounts to roughly 78% of 2019’s total, a 16 percentage point improvement from 2023. Despite a sluggish start during the first four months of 2025, the gaming sector rebounded strongly, with GGR exceeding analysts’ expectations in May and June. As a result, GGR for the first half of the year rose by 4.4% YoY. In May, GGR reached MOP21.2 billion (US$2.62 billion), the highest monthly total since the lifting of pandemic-related restrictions. June also saw a surprising uplift, with GGR climbing 19% YoY to MOP21.06 billion (US$2.6 billion)-a notable achievement, given that June is typically a slow month for casinos. The surge was attributed largely to excitement surrounding a series of concerts by Cantopop icon Jacky Cheung, alongside other high-profile entertainment events. Gross Gaming Revenue (GGR) USD billion ![img-21.jpeg](img-21.jpeg) Source: DSEC (Statistics and Census Service) 27 / Manager's Report / Macroeconomic Update --- # SMEs and retailers struggle amid post-pandemic "new normal" Although Macau's economic indicators continue to signal a recovery, growth remains concentrated largely in the tourism and gaming sectors, with limited spillover into the broader economy. Small and medium-sized enterprises, alongside an increasingly strained retail sector, continue to face headwinds as Macau residents take advantage of convenient border crossings to mainland China, where a wider and more affordable range of goods and services is available. Additionally, as post-pandemic pent-up demand subsides, the retail sector has been further impacted by a decline in tourist spending. Retail sales in Macau fell by 15% YoY in 2024 — and declined by 9% YoY during the first half of 2025. 28 / Manager's Report / Macroeconomic Update --- # Property Market Overview Overall H1 Residential Transactions 2018-2025 ![img-22.jpeg](img-22.jpeg) Note: Luxury is defined as residential units with usable area above 150 square metres Source: DSEC (Statistics and Census Service) H1 Luxury Residential Transactions 2018-2025 ![img-23.jpeg](img-23.jpeg) Note: Luxury is defined as residential units with usable area above 150 square metres Source: DSEC (Statistics and Census Service) 29 / Manager's Report / Macroeconomic Update --- # Macau’s government policies fail to sustain property sector recovery Following the government’s removal of all anti-speculation measures relating to the property sector in April 2024, there was a brief resurgence of investor interest in residential properties. Purchasers entered the market to take advantage of steep discounts of up to 25% from peak prices as developers offloaded newly built inventory. However, activity was concentrated largely in the primary market and on smaller units selling at lower prices, while the secondary market, of which the Company’s portfolio is a part, remained relatively quiet. By the end of 2024, due to the rush by developers to sell inventory properties at substantial discounts, the number of residential property transactions had increased by 17.4% YoY, but the overall average residential property price index had dropped 11.7%, marking the sixth consecutive year of falling residential property prices. In H1 2025, the residential sector continued to decline in terms of both transaction volumes and prices. Only 1,555 residential property sales were recorded during the period, which represented a drop of 3% YoY. The drop in prices was sharper in H1 2025, with total transaction value falling 24% YoY according to Financial Services Bureau. 30 / Manager’s Report / Macroeconomic Update --- 31 / Manager's Report / Macroeconomic Update # New mortgage approvals shrink despite three interest rate cuts In H2 2024, the Monetary Authority of Macao cut its benchmark lending rate by 100 basis points in a series of three rate reductions to end the year at a base rate of 4.75%. Although borrowing costs were lower, the value of new mortgage loans continued to fall. In 2024, the total value of approved new residential loans fell by 9.1% YoY to MOP15.5 billion (US$1.93 billion). During the first five months of 2025, the average value of new residential mortgage loans approved was below MOP1 billion, in line with the reduced volume of transactions and reflecting lenders' tightening of credit. The total value of outstanding residential mortgage loans also continued to decline through H2 2024 and H1 2025, with a value approximately 5% lower in May 2025 than that in June 2024. # Mainland China’s economic challenges weigh on investor sentiment Mainland China’s economic difficulties continue to cast a long shadow over Macau’s economy, affecting investor sentiment in the territory. Although the country’s GDP exceeded analysts’ expectations to grow by 5.2% YoY in Q2 2025, ongoing trade tensions with the United States, combined with domestic challenges such as sluggish consumption, soaring youth unemployment, and prolonged stress in the property sector, have significantly weakened investor confidence. The prevailing weak sentiment has weighed persistently on the country’s property market, and its protracted challenges in turn constituted a significant drag on the broader economy. Despite government stimulus measures, recovery efforts have faltered. Home prices are forecast to decline by nearly 5% in 2025, and analysts anticipate continued stagnation into 2026 amid subdued investor confidence and mounting debt levels among property developers. --- # Luxury residential segment still faces uphill battle In the luxury residential segment, which comprises units with a usable floor area of more than 150 square metres, 227 sales were recorded in 2024, an increase of 67% YoY, which was 28% higher than the number in 2019. The increase in the number of transactions of luxury units is a direct result of developers selling their existing inventory at substantial discounts. Since the removal of Macau’s anti-speculation measures in April 2024, prices for units above 150 square metres dropped 23% QoQ in Q3 2024, a decline of 10% YoY and 32% lower than 2019’s prices. The average prices of luxury units hovered at those levels for the following three quarters. During the first half of 2025, 84 sales were recorded in the luxury residential segment, a volume that was 21% lower YoY. Valuations also fell, with prices dropping 27% YoY in Q2 2025. In light of the significant challenges that face the luxury residential segment, the Company has been prompted to expedite its divestment timeline and offer steeper discounts to close sales. 32 / Manager's Report / Macroeconomic Update --- # Extension of Company Life and Fee Revision At the last AGM in December 2024, shareholders voted to continue the life of the Company for a further year. We thank shareholders for their support, which has enabled the Company to advance the divestment programme for its portfolio. Further to the amendment signed in June 2024, the management fee revision agreed between the Company’s Board of Directors and the Manager took effect from January 2025. Revised provisions allow the Board of Directors discretion to reduce the fee and also to reduce the termination notice period from six months to three months. The aggregate amount of the management fees and any realisation fees paid to the Manager for each calendar year from 2024 onwards shall not exceed the amount which is equal to 4.99% of the lower of the Group’s market capitalisation and net asset value as calculated at close of business on the last business day of the previous calendar year. In view of the above, the timely completion of the Company’s divestment programme is likely to be extended to maximise valuations in sales transactions. Therefore, even though the Manager will deploy the most effective possible strategies to secure further sales, it is likely that another proposal for an extension of the Company’s life, to the end of 2026, will be necessary to enable the divestment programme to progress in an orderly manner and maximise value for shareholders. The Manager expects to continue to divest the portfolio properties throughout the second half of 2025 and 2026, targeting completion of the divestment programme by the end of calendar year 2026 and a return of capital to shareholders thereafter. 33 / Manager’s Report / Macroeconomic Update --- 34 / Manager's Report / Macroeconomic Update # Outlook Although forecasts for Macau's economic recovery in the second half of 2025 have been revised downward, the unexpected resilience of the territory's tourism and gaming sectors has kept its economy on track for full-year growth of between 3.6% and 6.8%. However, with growth heavily concentrated in those sectors, the outlook for the property market remains subdued. The sector continues to face a range of headwinds, including tighter credit conditions and cautious investor sentiment amid ongoing global and regional economic uncertainties. Macau's luxury residential segment, in which the Company operates, remains challenged, although neighbouring Hong Kong's luxury residential market has recently drawn attention, with media reports of celebrities, tycoons and other high-net-worth individuals from around the region acquiring properties at discounts of up to 45% from peak levels. That renewed activity has been driven by optimism over interest rate cuts of 25 basis points to 4.25% on October 30, 2025, a rebounding stock market, a healthy IPO pipeline and the removal of government property market cooling measures. Hong Kong's luxury segment resurgence comes as several high-profile transactions have made headlines, and a number of analysts believe valuations in the city's residential property market may have bottomed out. The Company will continue to monitor market conditions closely and manage its portfolio divestment programme with a focus on timely sales, debt reduction and cashflow management. The Manager remains proactive in identifying investor interest and potential opportunities that may arise from the expected easing of interest rates. A sustained improvement in investor sentiment is crucial for the Company to fully realise the portfolio's potential value, but it will continue to pursue all viable sales opportunities nonetheless. --- Environmental, Social and Governance Report # 1 About this report This ESG report has been prepared with reference to the Ten Principles of the United Nations Global Compact (UNGC). The report elaborates environmental and social responsibility measures, and the related performance of Macau Property Opportunities Fund Limited. # 1.1 Company core business The Company is in the process of an orderly and managed divestment of its three remaining portfolio properties. No new construction or development activities will be undertaken aside from a limited reconfiguration at The Fountainside. The Company is focused on and exposed solely to the high-end residential property market in Macau. It has never had any exposure to any property or other investments in the gaming or associated hospitality sectors, and each investment is in full compliance with the parameters set out in the its prospectus. # 1.2 Report boundary The ESG report focuses on the environmental and social responsibility performance of the Company's core business of investment in properties in Macau, as listed below: - The Waterside - The Fountainside - Penha Heights # 1.3 Overall ESG approach The Board understands the significance of ESG and has incorporated ESG-related risks into the Company's risk management processes. The Company's overall ESG approach is aimed at generating returns for shareholders in a responsible manner while taking into consideration environmental and social responsibility, and supply chain management. 35 I Environmental, Social and Governance Report --- The Company's ESG approach has been developed based on the Ten Principles of the UNGC. The UNGC is a voluntary, multi-stakeholder platform that convenes multinational companies to align with 10 principles relating to human rights, labour, the environment and anti-corruption standards. The Board is committed to the basic concepts of fairness, honesty and respect for people and the environment in its business activities. The scale of the activity has been reduced in the context of reducing size of portfolio. ## 2 Environment ### 2.1 Commitment principle The Company aims at all times to adopt environment-friendly practices in its business operations to minimise any potential negative impacts on the environment and natural resources. It complies strictly with all applicable environmental laws and regulations in Macau. Various environmental protection measures have been implemented at key stages of property development processes, alongside the incorporation of green building designs and the implementation of responsible construction practices at work sites. The Company also upholds recycling and reuse principles at its properties. ### 2.2 Initiatives and performance #### Property design The Company follows local green building requirements that take into consideration green design principles relating to project elements such as building materials, indoor air quality, site selection and energy use. Examples of green building designs and features are as follows: - Preservation and retention of cultural heritage such as façades of historic buildings; - Incorporation of passive building designs to improve ventilation and optimise natural light; - Use of water-efficient fixtures; - Greening of rooftops. 36 I Environmental, Social and Governance Report --- Indoor air quality is improved through the deployment of air purifying equipment. Measures for monitoring temperature and humidity in residential units, and thus enhancing living conditions for residents, have been implemented at The Waterside and The Fountainside. ## Property management Various green measures have been adopted at our properties to improve overall environmental performance, for example: - Energy efficiency: Energy consumption are controlled by (i) using incandescent, halogen and fluorescent lighting with LED lighting, (ii) optimising the amount of lighting used in common areas, and (iii) utilising air-conditioning systems with energy-efficiency labelling, in accordance with local requirements. - Resident engagement: Residents are encouraged to minimise their consumption of electricity, water and materials, and are provided with recycling facilities to reduce waste. - Rechargeable battery recycling: Collection points for rechargeable battery recycling have been provided, and tenants are encouraged to use these facilities for battery disposal. Certain materials in rechargeable batteries, such as cadmium, are hazardous to human health and the environment. An effective environmental management system has been implemented. Two of the Company's main environmental objectives in its property management activities are: - Using pesticides and cleansing agents in accordance with regulations, and aiming for zero adverse incidents involving their use and storage; - Managing community wastewater, waste and noise according to local standards. 37 | Environmental, Social and Governance Report --- Regulatory compliance The Company is not aware of any non-compliance with environmental regulatory requirements that may significantly impact its business. 2.3 Climate risk We have considered climate risk and concluded that there is no material impact on the Company’s Annual Report. 3 Social responsibility and supply chain management The Company believes strongly that quality property offers a pathway to quality living. It strives to provide a quality property experience through innovation and sensitivity, and by operating with integrity. Through such efforts, its aim is to enhance residents’ quality of life and become their trusted partner. 3.1 Supply chain management During the process of property construction and redevelopment, the Company appoints external contractors carefully by taking into consideration factors such as human rights protection, non-discrimination in employment and occupation, environmental protection, construction safety and product safety. When selecting contractors for property construction, the Company seeks those that are familiar with environmental, social and safety requirements, and which are committed to the abolition of child labour and corruption. The Company maintains close relations with contractors relating to all construction and sourcing activities, holding regular meetings to facilitate two-way communication. It also performs regular assessments of contractors based on environmental and social risk considerations. 3.2 Quality services To ensure consistently high quality in its property management services, the Company aims to: - Develop quality properties that embrace innovation and enhance their locales; - Provide committed service and improve its property management offering on an ongoing basis; 38 I Environmental, Social and Governance Report --- - Achieve high standards by through rigorous property management practices to maximise customer satisfaction; - Provide a tasteful living environment for residents. ### 3.3 Protection of privacy To ensure residents’ wellbeing, regular communication is maintained through satisfaction surveys that help to identify potential areas for improvement. Residents’ identities are kept confidential and access to information gathered is restricted. #### Regulatory Compliance The Company is not aware of any non-compliance with supply chain management regulations that may significantly impact its business. ### 4 Human rights and labour The Company believes strongly that businesses should support and respect the protection of internationally recognised human rights. ### 4.1 Gender Equality and Diversity To ensure that we have an equitable platform to perform, the Company aims to: - Ensure the hiring process is performance-based, regardless of gender; - Ensure diverse gender representation at all levels of the Company (as of June 2025, one of our three board members is female); - Ensure our service providers embrace diversity in their workforces. 39 I Environmental, Social and Governance Report --- Manager and Adviser ![img-24.jpeg](img-24.jpeg) ## Manager The day-to-day responsibility for the management of the Macau Property Opportunities Fund's (“MPO”, “Company” or “Group”) portfolio rests with Sniper Capital Limited. Founded in 2004, Sniper Capital Limited specializes in the active management and strategic divestment of real estate assets, with a focus on maximising value in niche and undervalued property markets. The firm leverages deep market insight and operational expertise to optimise performance across its portfolio, while identifying opportune moments to exit investments and unlock capital growth. Sniper Capital Limited's team of over 15 professionals covers all the required investment and development disciplines, including research, project management, asset management, divestment, investor relations and finance. Working closely with Headland Developments Limited and Bela Vista Property Services Limited, entities which share common directorship with the Manager, reflecting a close strategic and operational relationship, Sniper Capital Limited ensures that all necessary project management skills and services are provided in a way that will enable divestment of properties in an orderly and optimal manner. With its 29 August 2025 holding of 12.08 million shares or 19.54% of the Company's issued share capital, Sniper Investments Limited — an investment vehicle associated with Sniper Capital Limited — is the largest shareholder in MPO, which bears witness to Sniper Capital Limited's belief in the Company. The Manager is committed to dispose of the Company's Portfolio in full while striving to return maximum possible values to shareholders. ## Adviser The Company's Board of Directors and Manager are advised by Sniper Capital (Macau) Limited, which has a highly developed network of contacts and associates spanning Macau's financial and business community. The Investment Adviser provides professional services to the Company including sourcing, analysing and recommending potential divestment opportunities, whilst also providing the Board with property divestment and management advisory services in relation to the Company's real estate assets. For more information, please visit www.snipercapital.com 40 | Manager and Adviser --- # Manager and Adviser (continued) ## Divestment Policy The Company is managed with the objective of realising the value of all remaining assets in the portfolio, individually, in aggregate or in any other combination of disposals or transaction structures, in a prudent manner consistent with the principles of sound investment management with a view to making an orderly return of capital to shareholders at the earliest opportunity. The Company may sell or otherwise realise its investments (including individually, or in aggregate or other combinations) to such persons as it chooses, but in all cases with the objective of achieving the best exit values reasonably available within shortest acceptable time scales. The Company has ceased to make any new investments and will not undertake additional borrowing other than to refinance existing borrowing or for short-term working capital purposes. Any net cash received by the Company after discharging any relevant loans as part of the realisation process will be used for operations and held by the Company as cash on deposit and/or as cash equivalents prior to its distribution to shareholders. The Company’s Articles of Incorporation do not contain any restriction on borrowings externally. 41 | Manager and Adviser --- Directors' Report The Directors present their report and audited financial statements of the Group for the year ended 30 June 2025. This Directors' report should be read together with Corporate Governance Report on pages 50 to 55. ## Principal activities Macau Property Opportunities Fund Limited (the "Company") is a company incorporated in Guernsey on 18 May 2006 and is a registered closed-ended investment fund traded on the London Stock Exchange (the "LSE"). Following the passing of all resolutions at the Extraordinary General Meeting held on 28 June 2010, the Company's shares obtained a Premium Listing on the LSE Main Market on 30 June 2010. The Company is an authorised entity under the Authorised Closed-Ended Investment Schemes Rules and Guidance, 2021 and is regulated by the Guernsey Financial Services Commission ("GFSC"). During the year, the principal activities of the Company and its subsidiaries as listed in Note 4 to the Consolidated Financial Statements (together referred to as the "Group") were property investment in Macau. ## Business review A review of the business during the year, together with likely future developments, is contained in the Chairman's Message on pages 4 to 9 and in the Manager's Report on pages 12 to 34. ## Going concern The Group's business activities, together with the factors likely to affect its future development, performance and position, are set out in the Manager's Report. The financial position of the Group, its cash flows and its liquidity position are described in the Capital Management section of the Manager's Report. The financial risk management objectives and policies of the Group and the exposure of the Group to credit risk, market risk and liquidity risk are discussed in Note 2 to the Consolidated Financial Statements. In accordance with provision 30 of the 2018 revision of the UK Corporate Governance Code, (the "UK Code"), and as a fundamental principle of the preparation of financial statements in accordance with IFRS, the Directors have assessed as to whether the Company will continue in existence as a going concern for a period of at least 12 months from signing of the financial statements, which contemplates continuity of operations and the realisation of assets and settlement of liabilities occurring in the ordinary course of business. In view of the progress achieved in respect of the Group's divestment programme and the expected timeframe over which the remaining assets are expected to be realised, the Board have decided that the financial statements should be prepared on a basis other than that of a going concern. Notwithstanding this, and for the reasons set out below, the Directors, with recommendation from the Audit and Risk Committee, have a reasonable expectation that the Group will be able to realise its assets to meet its liabilities as they fall due for the next twelve months after date of approval of the Annual Report. In reaching its conclusion, the Board have considered the risks that could impact the Group's liquidity over the period to 31 October 2026. This period represents the period of at least 12 months from the date of signing of the Annual Report. As part of their assessment the Audit and Risk Committee highlighted the following key considerations: 1. Whether the Group can repay or refinance its loan facilities to discharge its liabilities over the period to 31 October 2026 2. Extension of life of the Company ## 1. Whether the Group can repay or refinance its loan facilities to discharge its liabilities over the period to 31 October 2026 As at 30 June 2025, the Group has major debt obligations to settle during the going concern period (further details as disclosed in Note 8) being: i) principal repayments for The Waterside loan facility of US$45.6 million; ii) principal repayments for The Fountainside loan facility of US$0.7 million; iii) principal repayments for the Penha Heights Banco Tai Fung loan facility of US$2.6 million; and iv) principal repayments for the Penha Heights BCM Bank loan facility of US$7.6 million. 42 / Director's Report --- Directors' Report (continued) ## The Waterside and The Fountainside Shaped by changing economic uncertainties and cautious investor sentiment, it is assumed that the Group can achieve a conservative modest rate of The Waterside unit sales from July 2025 to October 2026, generating approximately US$49.7 million of net proceeds based on the latest available valuations and pricing strategy. This would be sufficient to cover the instalments for both The Waterside and The Fountainside facilities due for repayment in the upcoming twelve months period as well as the Group's operating expenses. Loan repayments of US$13.5 million were made to Hang Seng Bank Limited ("Hang Sang Bank") for The Waterside facilities post year end to October 2025. This was predominantly settled through post year end disposals to October 2025, which included five units of The Waterside and one villa of The Fountainside, amounting to US$10.3 million. As of end of October 2025, one unit of the Waterside and one villa of The Fountainside are subject to completion. Throughout the year ended 30 June 2025 and up to the date of issuance of the Annual Report, breaches in the loan to value covenants with Hang Seng Bank were noted and reported as appropriate. Frequent dialogue has been maintained with Hang Seng Bank including acknowledgment of breaches, discussions about covenant restoration plan and accelerated asset disposal targets. Management anticipates that proceeds from the sale of The Waterside units and The Fountainside villas, based on achieved sales velocity, will cover the associated debt obligations and contribute to reinstating the LTV to a more acceptable level as of the Annual Report date. ## Penha Heights The loan repayments for the two Penha Heights facilities that would become due during the going concern period total US$10.2 million. Subsequent to year end, the loan facility with BCM Bank for Penha Heights has been extended to January 2026. Up to US$1.9 million will be due on or before December 2025 on Penha Heights bank facilities. It is anticipated that these facilities would be settled from sales proceeds of Penha Heights or via other financing sources as necessary. In light of the continued challenges faced by the Group, it is considering all options having received indications of support from some investors. ## Equity Capital Raise The Company intends to proceed with a modest equity capital raise which, if successful, will supplement sales to ensure that debt repayments are met as well as meeting short-term working capital obligations. Should this be successful it is deemed to deliver a better outcome for investors. Should the capital raise be unsuccessful, however, the options for the Company will be adverse in terms of the overall outcome. The possibility will exist, for example, that the Company loses possession of Penha Heights as a further bank default is possible. The Company may remain viable subject to the continuing divestment of assets but it will undoubtedly be significantly impacted. ## Relationship with Lenders The Manager is responsible for managing the Group's relationships with its lenders, ensuring continuous monitoring of loan terms and covenant compliance. Any exceptions and breaches are promptly reported to lenders, and relevant matters are regularly communicated to the Board. The Group has actively tracked the compliance status of all loan covenants and maintained frequent, transparent engagement with its lenders, who have consistently shown strong support over the years. However, it is worth noting that recent shifts in the regional lending landscape have led to more stringent regimes of loan facility renewals and credit assessments. As a result, while a solid track record of lender relationships remains valuable, it may no longer be the sole determinant in banks' evaluations of loan facilities. It is expected that the debt obligations that will become due for settlement over the going concern period are to be covered by proceeds from selling properties. In the case of the BCM Bank loan facility, this is expected to be achieved by a sale of Penha Heights or a capital raise. The fact that all banking facilities of the Group have been successfully renewed previously, with the loan-to-value ratios of the facilities carefully monitored and communicated under the respective loan agreements, the Board has reasonable expectations that the Group would be able to meet its debt obligations during the going concern period. Notwithstanding the above, it remains uncertain that adequate proceeds will be generated from sales of properties to settle payment obligations over the going concern period, and any necessary refinancing of debt obligations would still be subjected to lenders' approval. Due to the on-going challenging market environment, the Group may experience difficulties in achieving sales objectives. If sales proceeds are not adequate to meet payment obligations or alternative financing is not secured in a timely manner, the Group may face liquidity constraints that could adversely impact its ability to meet financial obligations as they fall due or the banks could call in the loan, take the investment assets as security or apply for legal action to put the relevant special purpose vehicle into liquidation and potentially the Group into insolvency. ## 2. Extension of life of the Company After the Ordinary Resolution was passed at the Annual General Meeting ("AGM") of the Company in its 2024 AGM to extend the Group's life until the 2025 AGM (expected to be held by December 2025), the Directors assessed the impact of the continuation vote on the Group's operations. In line with Article 38 of the Articles of Incorporation, the Company will put forward a resolution for its continuation at the next AGM. If any continuation resolution is not passed, the Directors are required to formulate proposals to be put to Members to reorganise, unitise, reconstruct or wind up the Company. The Directors expect to receive continuation support from major shareholders based upon ongoing communications and note that 50% of shareholder support is required to ensure continuation. It is likely that returns from the sale of properties would be significantly lower, as endorsed by the recent forced sales imposed on developers, if the Company was forced to sell as a result of a failed continuation vote from shareholders and it is therefore commercially sensible for the Company to continue in business. 43 / Director's Report --- Directors' Report (continued) ## Going Concern Conclusion After careful consideration and based on the reasons outlined above, including the Manager’s continuing dialogue with lenders and shareholders, the Directors have a reasonable expectation that the Group is able to realise its assets to meet its liabilities as they fall due for the next twelve months after date of approval of the Annual Report. However, in view of the pace of progress achieved in respect of the Group’s divestment programme and the expected timeframe to December 2026 over which the remaining assets are expected to be realised, the financial statements have been prepared on a basis other than that of a going concern. ## Viability Statement The Board has carried out a robust assessment of the principal risks facing the Company, including those that would threaten its business model, future performance, solvency and liquidity. The Directors consider each of the Company’s principal risks and uncertainties, during the quarterly Board meetings, supported by the twice monthly reporting from the Manager. The Directors also considered the Company’s policy for monitoring, managing and mitigating its exposure to these risks and the impact on the Company’s operations. This assessment involved an evaluation of the potential impact on the Company of these risks occurring. Where appropriate, the Company’s financial modelling was subject to a sensitivity analysis involving flexing a number of key assumptions in the underlying financial forecasts in order to analyse the effect on the Company’s net cash flows and other key financial ratios. A base case and adverse scenario, where projections calculated based upon flexing these key assumptions and considering plausible refinancing, if necessary, had both resulted in positive cash held balances throughout the two-year projection period with ending cash balances of over US$2 million under both scenarios to cover all liabilities. The Board has reasonable expectations to anticipate the payments obligation of the loan facilities which will be due within the next 12 months will be repaid while the Company continues to monitor financing needs and the loan covenants, report exceptions as required, and that the Company’s life will be further extended at the 2025 AGM. In accordance with provision 31 of the 2018 revision of the UK Code, the Directors have assessed the prospects of the Company over a longer period than the 12 months required by the going concern provision. During the year, the Board conducted a review for a period covering up to two years, including a review of a comprehensive cash flow projection, together with adverse scenarios to stress test the cash positions of the Company. The Board considered up to two years to be an appropriate time horizon for its divestment plan, being the period over which the majority of the Company’s properties should have been disposed of. This has rolled forward for another 6–9 months’ period from last year factoring in a moderated yet still elevated interest rate environment and persistently weakened market confidence. Were circumstances to allow, the Company would look to make early repayments of debt, subject to any penalty for doing so, if sales velocity can be accelerated. Based on an assessment of the principal risks facing the Company and the stress testing based assessment of the Company’s prospects, the Directors have a reasonable expectation that the Company will be able to continue in operation (subject to the Continuation Vote, projected sales and/or other financing options) and meet its liabilities as they fall due over the two-year period of their assessment. It is expected that the timeframe for the disposal of the majority of the assets will be within the remaining two-year period. ## Share capital ### Ordinary Shares The Company has one class of ordinary shares, which carries no rights to fixed income. On a show of hands, each member — present in person or by proxy — has the right to one vote at general meetings. On a poll, each member is entitled to one vote for every share held. The Company’s Memorandum and Articles of Incorporation contain details relating to the rules that the Company has regarding the appointment and removal of Directors or amendment to the Company’s Articles of Incorporation. ### Results and dividends The results for the year are set out in the Consolidated Financial Statements on pages 76 to 111. There are no dividends proposed or declared for the current year end (2024: US$ nil). ### Authority to purchase own shares Following the authority first granted in the Extraordinary General Meeting on 28 June 2010 and subsequently renewed at each AGM, the Board has publicly stated its commitment to undertake share buybacks at attractive levels of discount of the share price to Adjusted NAV. The Board intends to renew this authority at the 2025 AGM. No shares have been repurchased in the current or prior financial year. 44 / Director's Report --- Directors' Report (continued) # Significant shareholdings As at 20 August 2025, a total of 10 shareholders each held more than 3% of the issued ordinary shares of the Company, accounting for a total of 49,791,389 shares (29 August 2024: 49,850,654) or 80.52% (29 August 2024: 80.62%) of the issued share capital. Significant shareholdings as at 29 August 2025 are detailed below: | Name of shareholder | No. of shares | % | | --- | --- | --- | | Sniper Investments Limited | 12,081,904 | 19.54 | | Universities Superannuation Scheme | 8,494,683 | 13.74 | | Lazard Asset Management LLC | 7,765,135 | 12.56 | | FIL Investment International | 5,075,233 | 8.21 | | Apollo Multi Asset Management | 3,687,861 | 5.96 | | Asset Value Investors | 3,327,820 | 5.38 | | Progressive Capital Partners | 2,568,986 | 4.15 | | Hargreaves Lansdown Asset Management | 2,301,282 | 3.72 | | Banque de Luxembourg | 2,288,485 | 3.70 | | First Equity | 2,200,000 | 3.56 | | Subtotal | 49,791,389 | 80.52 | | Other | 12,044,344 | 19.48 | | Total | 61,835,733 | 100.00 | # Directors Biographies of the Directors who served during the year and up to the date of this report are detailed on page 10. | Name | Function | Date of appointment | | --- | --- | --- | | Mark Huntley | Chairman, Chairman of the Management Engagement Committee and the Chairman of the Disclosure and Communications Committee | 3 October 2018 | | Alan Clifton | Director, Chairman of the Audit and Risk Committee and the Nomination and Remuneration Committee | 18 May 2006 | | Carmen Ling | Director | 24 February 2022 | # Directors' interests Directors who held office during the year and had interests in the shares of the Company as at 30 June 2025 were: | Ordinary Shares of US$0.01 | | | | --- | --- | --- | | | Held at 30 June 2025 | Held at 30 June 2024 | | Mark Huntley | 200,000 | 200,000 | | Alan Clifton | 80,902 | 80,902 | | Carmen Ling | 50,000 | 50,000 | There have been no changes to the aforementioned interests since 30 June 2025. 45 / Director's Report --- Directors' Report (continued) ## Non-mainstream pooled investments The Board notes the changes to the Financial Conduct Authority (FCA) rules ("UK Listing Rules") relating to the restrictions on the retail distribution of unregulated collective investments schemes and close substitutes which came into effect on 1 January 2014. Following the receipt of legal advice, the Board confirms that it has conducted the Company's affairs in such a manner that the Company would have qualified for approval as an investment trust if it was resident in the United Kingdom, and that it is the Board's intention that the Company will continue to conduct its affairs in such a manner. Thus, the Company is, and the Board expects it will continue to be, outside the scope of the new restrictions and Independent Financial Advisors (IFAs) should therefore be able to recommend ordinary shares in the Company to retail investors in accordance with the FCA requirements relating to non-mainstream investment products. ## Directors' remuneration Directors of the Company are all non-executive and, by way of remuneration, receive an annual fee set in Sterling. During the year, the Directors received the following emoluments in the form of Directors' fees from the Company. There has been no change in director remuneration since 2017 with any annual differences the result of foreign exchange fluctuations. | | 2025 | 2024 | | --- | --- | --- | | | US$ | US$ | | Mark Huntley | 77,073 | 72,310 | | Alan Clifton | 57,893 | 54,232 | | Carmen Ling | 48,282 | 45,194 | | Total | 183,248 | 171,736 | ## Directors' Responsibilities to Stakeholders Section 172 of the UK Companies Act 2006 applies directly to UK domiciled companies. Nonetheless the AIC Code requires that the matters set out in section 172 are reported on by all companies, irrespective of domicile. 46 / Director's Report --- Directors' Report (continued) Section 172 recognises that directors are responsible for acting in a way that they consider, in good faith, is the most likely to promote the success of the Company for the benefit of its stakeholders as a whole. In doing so, they are also required to consider the broader implications of their decisions and operations on other key stakeholders and their impact on the wider community and the environment. Key decisions are those that are either material to the Company or are significant to any of the Company's key stakeholders. The Company's engagement with key stakeholders and the key decisions that were made or approved by the Directors during the year are described below. | Stakeholder Group | Methods of Engagement | Benefits of Engagements | | --- | --- | --- | | **Shareholders** The major investors in the Company's shares are set out on page 45 Continued shareholder support is vital to the Company's divestment objectives, and therefore, in line with its objectives, the Company seeks to maintain shareholder satisfaction through: - Net asset value preservation - Divestment of remaining properties, and - Operating cost reduction | The Company engages with its shareholders through the issue of periodic portfolio updates in the form of Regulatory News Service (“RNS”) announcements and half yearly updates. The Company provides in depth commentary on the investment portfolio and corporate outlook in its semi-annual financial statements. In addition, the Company directly and, through its Manager undertakes periodic roadshows to meet with existing and prospective investors to solicit their feedback and understand any areas of concern. In the financial year the Company issued: - 4 NAV updates by way of RNS - 2 half yearly updates. - Macau property market update by way of RNS - AGM notice and results by way of RNS The Company directly and through the Manager interacts with major shareholders. Such interaction provides mutual understanding of the Company's prospects and outlook for divestment. | Shareholders are aware of any developments and issues and through engagement can be actively engaged in the process of divestment. | 47 / Director's Report --- Directors' Report (continued) | Stakeholder Group | Methods of Engagement | Benefits of Engagements | | --- | --- | --- | | **Service Providers** The Company does not have any direct employees; however it works closely with a number of service providers (the Manager, the Investment Adviser, Administrators, Company Secretary, Brokers and other professional advisers) whose interests are aligned to the success of the Company. The quality and timeliness of their service provision is critical to the success of the Company. | The Company’s Management Engagement Committee has identified its key service providers. On an annual basis it undertakes a review of performance based on a questionnaire through which it also seeks feedback. Furthermore, the Board and its sub-committees engage regularly with its service providers on a formal and informal basis. The Management Engagement Committee will also regularly review all material contracts for service quality and value. | The Feedback given by the service providers is used to review the Company’s policies and procedures to ensure open lines of communication, operational efficiency and appropriate pricing for services provided. | | **Lenders** The Group has interest-bearing loans with three banks. These facilities provides the Group with the resources which can be used to finance capital expenditure or working capital and therefore their availability is a key component of the Company’s ability to operate. | The Group’s engagement with its bankers is primarily through its Manager who provides regular reports to the banks and has an open line of communication in respect of the ongoing operation and maintenance of the facilities. | The facilities have continued to operate throughout the year. | | **Tenants** The Group has rental paying tenants in *The Waterside*. | Formal lease agreements are executed to safeguard the interests of the landlord, *The Waterside*, and tenants. In addition, top-class facilities and quality property management services are provided at *The Waterside* to help ensure comfortable occupancy. | Positive feedback is received from residents at *The Waterside* with tenants renewing leases over the year. | | **Community & Environment** As an Investment Company whose purpose is the investment in real estate in Macau, the Company’s direct engagement with the local community and the environment is limited. | As discussed above the Board actively engages with the Company’s service providers on a regular basis. | The ESG report provides further information on the Manager’s approach to this important subject. | | **Change of control** There are no agreements that the Company considers significant and to which the Company is party, that would take effect, alter or terminate upon change of control of the Company, following a takeover bid. | | | | **Annual General Meeting** The AGM of the Company will be held in December 2025 at Floor 2, Trafalgar Court, Les Banques, St Peter Port, Guernsey. A notice of Meeting and Agenda will be released before December 2025 AGM. | | | 48 / Director's Report --- Directors' Report (continued) Independent auditors The Audit and Risk Committee reviews the appointment of the external auditor, its effectiveness and its relationship with the Group, which includes monitoring the use of the external auditor for non-audit services and the balance of audit and non-audit fees paid. Deloitte LLP have been appointed as external auditor for the year to 30 June 2025. Each Director believes that there is no relevant information of which the external auditor is unaware. Each has taken all steps necessary, as a director, to be aware of any relevant audit information and to establish that Deloitte LLP is made aware of any pertinent information. This confirmation is given and should be interpreted in accordance with the provisions of Section 249 of the Companies (Guernsey) Law, 2008. Subsequent events Significant subsequent events have been disclosed in Note 26. Financial risk management policies and objectives Financial risk management policies and objectives are disclosed in Note 2. Principal risks and uncertainties Principal risks and uncertainties are discussed in the Corporate Governance Report on page 53. On behalf of the Board ![img-25.jpeg](img-25.jpeg) Mark Huntley Chairman of the Board 31 October 2025 49 / Director's Report --- # Corporate Governance Report The Board has put in place a framework for corporate governance which it believes is appropriate for an investment company. Paragraph 6.6.6R of the UK Listing Rules obliges Boards to report upon their corporate governance arrangements against the UK Code issued by the Financial Reporting Council (the "FRC"). The Company is a member of the Association of Investment Companies (the "AIC") and the Board has considered the principles and recommendations of the 2019 AIC's Code of Corporate Governance ("AIC Code"). The Board considers that reporting against the principles and recommendations of the AIC Code provides better information to shareholders. The FRC has provided the AIC with an endorsement letter to cover the latest edition of the AIC Code. The endorsement confirms that by following the AIC Code, investment company boards should fully meet their obligations in relation to the UK Code and paragraph 6.6.6R of the UK Listing Rules. The AIC Code is available on the AIC's website, www.theaic.co.uk. The UK Code is available on the FRC's website, www.frc.org.uk. Throughout the accounting period, the Company has complied with the recommendations of the AIC Code and thus the relevant provisions of Section 1 of the UK Code, except as set out below. The UK Code includes provisions relating to: - the role of the chief executive; - executive directors' remuneration; - the need for an internal audit function; - appointment of a senior independent director; and - whistleblowing policy. The Board considers that the above provisions, where practical, have been fully adhered to but many are not currently relevant to the position of the Company which delegates most day-to-day functions to third parties. There are areas of governance codes which present genuine practical challenges for a company that is in the late stage of life, with a clearly defined but narrow strategic objective. All Directors are non-executive and independent of the Company's Manager and Investment Adviser and therefore the Directors consider the Company has no requirement for a Chief Executive or a Senior Independent Director and the Board is satisfied that any relevant issues can be properly considered by the Board. The absence of an internal audit function is discussed in the Report of the Audit and Risk Committee. The GFSC Finance Sector Code of Corporate Governance (the "GFSC Code") came into force in Guernsey on 1 January 2012 and was amended in February 2016, June 2021, November 2021 and July 2023. The Company is deemed to satisfy the GFSC Code provided that it continues to conduct its governance in accordance with the requirements of the AIC Code. Except as disclosed below, the Company complied throughout the year with the recommendations of the AIC Code and the relevant provisions of the UK Code. ## The Board The Board consists of three non-executive directors, all of whom are independent of the Company's Manager and Investment Adviser. Directors' details are listed on pages 10 to 11 which set out the range of investment, financial and business skills and experience represented. Provision 14 of the AIC Code states that a Board should consider appointing one independent non-executive director to be the senior independent director. The Board, having taken into account its small size and that all directors are each similarly independent and non-executive, considers it unnecessary to appoint a senior independent director. All Directors will retire annually in accordance with the AIC Code. A retiring director shall be eligible for reappointment. No director shall be required to vacate his office at any time by reason of the fact that they have attained any specific age. The Board has considered the need for a policy regarding tenure of office and a succession plan for the retirement of Directors; however, the Board believes that any decisions regarding tenure should consider the need for continuity and maintenance of knowledge and experience and to balance this against the need to periodically refresh Board's composition, with the limited expected life of the Company in mind. Alan Clifton has been a member of the Board for 19 years. However, the Board have satisfied themselves that Alan Clifton continues to be independent in approach and judgement. The Board are satisfied that Alan Clifton remains completely independent of the Investment Manager and provides consistency and continuity in the current realisation phase of the Company. 50 / Corporate Governance Report --- Corporate Governance Report (continued) The Company has benefitted greatly from the knowledge, expertise and skill mix of the Board as it has had to navigate through the difficulties of the current situation. Whilst there are no concerns about either stale behaviour or lack of vigour to deliver the Company's strategy, any appointment of a director requires a sound understanding and knowledge of the market in Macau as well as broader experience of the real estate market: to the contrary, the Board and Manager dynamics have been most constructive and measured in the face of unprecedented challenges. The majority of the Board is independent within the meaning of the AIC Code. The Board meets at least four times a year for regular scheduled meetings and, should the nature of the activity of the Company require it, additional meetings may be held, some at short notice. During the current year two ad hoc meetings have been held. At each meeting, the Board follows a formal agenda that covers the business to be discussed. To fulfil the recommendation of AIC Code Provision 15 and to give sufficient attention to strategy, the Board discusses strategy at each of its regular scheduled meetings, but holds a separate session annually devoted to this. Between meetings, there is regular contact with the Manager and the Administrator, and the Board requires to be supplied in a timely manner with information by the Manager, the Company Secretary and other advisers in a form and of a quality to enable it to discharge its duties. The terms and conditions of appointment of non-executive directors are available for inspection from the Company's registered office. ## Performance and evaluation Pursuant to Principle K of the AIC Code which requires a formal and rigorous annual evaluation of its performance, the Board formally reviews its performance annually through an internal process. Internal evaluation of the Board, the Audit and Risk Committee, the Nomination and Remuneration Committee, the Management Engagement Committee, the Disclosure and Communications Committee and individual Directors has taken the form of self-appraisal questionnaires and detailed discussions to determine effectiveness and performance in various areas, as well as the Directors' continued independence. Given the late stage of life of the Company, the Board considered it sufficient to undertake its own evaluation rather than appointing, at cost, an external facilitator. During the year, a formal board performance appraisal was carried out by the Nomination and Remuneration Committee. Following review and collation of the results, the Board considered that the overall performance of the Board during the year had been satisfactory and that the Board is confident in its ability to continue effectively to lead the Company and oversee its affairs. The Board believes that the current mix of skills, experience, knowledge and location of the Directors is appropriate to the requirements of the Company. Any new directors, were they to be appointed, would receive an induction from the Manager as part of the familiarisation process of candidates following appointment. All directors receive other relevant training as necessary. ## Duties and responsibilities The Board is responsible to shareholders for the overall management of the Company. The Board has adopted a Schedule of Matters Reserved for the Board which sets out the particular duties of the Board. Such reserved powers include decisions relating to the determination of investment policy and approval of investments, strategy, capital raising, statutory obligations and public disclosure, financial reporting and entering into any material contracts by the Company. The Directors have access to the advice and services of the Company Secretary and Administrator, who are responsible to the Board for ensuring that Board procedures are followed and that it complies with Guernsey Law and applicable rules and regulations of the GFSC and the LSE. Where necessary, in carrying out their duties, the Directors may seek independent professional advice at the expense of the Company. The Company maintains appropriate Directors' and Officers' liability insurance in respect of legal action against its Directors on an on-going basis. The Board has responsibility for ensuring that the Company keeps proper accounting records, which disclose with reasonable accuracy at any time the financial position of the Company, and which enable it to ensure that the financial statements comply with the Companies (Guernsey) Law, 2008. The Board has responsibility for ensuring that the Annual Report presents a fair, balanced and understandable assessment of the Company's position and prospects. This responsibility extends to interim and other price-sensitive public reports. 51 / Corporate Governance Report --- Corporate Governance Report (continued) Committees of the Board ## Nomination and Remuneration Committee The Nomination and Remuneration Committee Report is on page 56. ## Management Engagement Committee The Management Engagement Committee Report is on page 58. ## Audit and Risk Committee The Audit and Risk Committee Report is on page 59. Meeting Attendance | Name | Scheduled Board Meeting (max 4) | Audit and Risk Committee Meeting (max 3) | Nomination and Remuneration Committee Meeting (max 1) | Management Engagement Committee Meeting (max 1) | Ad hoc Board Meeting (max 2) | | --- | --- | --- | --- | --- | --- | | Mark Huntley | 4 | 3 | 1 | 1 | 2 | | Alan Clifton | 4 | 3 | 1 | 1 | 2 | | Carmen Ling | 4 | 3 | 1 | 1 | 1 | ## Internal control and financial reporting The Board is responsible for the Group's system of internal control and for reviewing its effectiveness, and the Board has, therefore, established a process designed to meet the particular needs of the Group in managing the risks to which it is exposed. The process takes a risk-based approach to internal control through a matrix which identifies the key functions carried out by the Manager and other key service providers, the various activities undertaken within those functions, the risks associated with each activity and the controls employed to minimise those risks. A residual risk rating is then applied. Regular reports are provided to the Board, highlighting material changes to risk ratings and a formal review of these procedures is carried out by the Audit and Risk Committee and reported to the Board on an annual basis and has been completed during the financial year. By their nature, these procedures provide a reasonable, but not absolute, assurance against material misstatement or loss. At each board meeting, the Board also monitors the Group's investment performance and activities since the last board meeting to ensure that the Manager adheres to the agreed investment policy and approved investment guidelines. Furthermore, at each board meeting, the Board receives reports from the Company Secretary and Administrator in respect of compliance matters and duties performed on behalf of the Company. The Board considers that an internal audit function specific to the Group is unnecessary and that the systems and procedures employed by the Administrator and Manager, including their own internal control functions, provide sufficient assurance that a sound system of internal control, which safeguards the Group's assets, is maintained. The Administrator issues a SOC 1 report annually, setting out a description of controls and detailed external testing of the controls over a year. The serving auditor concluded in the most recent report that control objectives were suitably designed and achieved during the period. Investment advisory services are provided to the Group by Sniper Capital (Macau) Limited. The Board is responsible for setting the overall investment policy and monitors the action of the Manager at regular board meetings. The Board has also delegated administration and company secretarial services to Ocorian Administration (Guernsey) Limited but retains accountability for all functions it delegates. ## Management agreement The Company has entered into an agreement with the Manager. This sets out the Manager's key responsibilities, which include proposing the property investment strategy to the Board and identifying property investments to recommend for divestment. The Manager is also responsible to the Board for all issues relating to property asset management. The management agreement is aimed at delivering a complete divestment of the remaining properties held and the return of capital to shareholders. The Company has delegated the provision of all services to external service providers whose work is overseen by the Management Engagement Committee at its regular scheduled meetings. Each calendar year, a detailed review of performance pursuant to their terms of engagement is undertaken by the Management Engagement Committee. 52 / Corporate Governance Report --- Corporate Governance Report (continued) In accordance with Listing Rule 11.7.2. (2)R and having formally appraised the performance and resources of the Manager, in the opinion of the Directors, the continuing appointment of the Manager, on the terms agreed, is in the interests of shareholders as a whole. ## Relations with shareholders The Company welcomes the views of shareholders and places great importance on communication with its shareholders. Senior members of the Manager are available at all reasonable times to meet with principal shareholders and key sector analysts. The Manager, Chairman and other Directors are not only available to meet with shareholders, but have actively done so, when requested. Reports on the views of shareholders are provided to the Board on a regular basis. The Board is also kept fully informed of all relevant market commentary on the Company by the Manager and the Corporate Broker. All shareholders can address their individual concerns to the Company in writing at its registered address. The AGM of the Company provides a forum for shareholders to meet and discuss issues with the Directors and the Manager. The Manager and Board also engage with shareholders on an ongoing basis. In addition, the Company maintains a website (www.mpofund.com) which contains comprehensive information, including company notifications, share information, financial reports, investment objectives and policy, investor contacts and information on the Board and corporate governance. ## Whistleblowing The Board has considered the AIC Code recommendations in respect of arrangements by which staff of the Administrator and Investment Manager may, in confidence, raise concerns within their respective organisations about possible improprieties in matters of financial reporting or other matters. It has concluded that adequate arrangements are in place for the proportionate and independent investigation of such matters and, where necessary, for appropriate follow-up action to be taken within their organisation. ## GDPR The Board confirmed that the Company has considered GDPR and taken measures itself and with its service providers to meet the requirements of GDPR and the equivalent Guernsey law. ## Cyber-security The Board recognises the increased incidence of cyber-security threats and regularly reviews its policies, procedures and defences to mitigate associated risks, and receives confirmation on such matters such as quarterly compliance reports, from the key service providers. ## Principal risks and uncertainties The Group's assets consist of residential property investments in Macau. Its principal risks are therefore related to the residential property market in general, but also the particular circumstances of the properties in which they are invested and, where relevant, their tenants. The Manager seeks to mitigate these risks through active asset management initiatives and carrying out due diligence work on potential tenants before entering into any new lease agreements. All the properties in the portfolio are insured. Each Director is aware of the risks inherent in the Group's business and understands the importance of identifying and evaluating these risks. The Board has adopted procedures and controls that enable it to manage these risks within acceptable limits and to meet all its legal and regulatory obligations. For each material risk, the likelihood and consequence are identified, management controls and frequency of monitoring are confirmed and results are reported and discussed at board meetings. The Company's principal risk factors are fully discussed in the Company's prospectus, are available on the Company's website and should be reviewed by shareholders. Note 2 further describes the Group's risk management processes. 53 / Corporate Governance Report --- Corporate Governance Report (continued) The principal risks and uncertainties faced by the Group are set out below: - The ongoing cash flow and financing issues which are faced by the Group. The Manager undertakes ongoing discussions with lenders to enable relief of the stress on cash flow. The Manager provides the Board with fortnightly updates with divestments progress and payable status reporting, bringing up-to-date information to the Board. Working capital requirements, cashflows scenarios and an analysis of loan to value covenants are reported to the Board for monitoring. - Economic and political changes that have occurred in the past few years such as high global inflation, interest rate increases, geopolitical upheaval and their impact on the Macau economy and in particular, the luxury property market. The Manager provides regular and timely updates on developments and ad-hoc analysis about such economic related impact to the Board, to facilitate their informed decision making process and allow sales strategy to be pivoted as required; - There can be no guarantee that Macau will remain the only centre in China where gambling is legal. Other centres are unlikely to be created, however, in the expected remaining life of the Company. Changes in policies of the government or changes in laws and regulations may result in the legalisation of gambling in other parts of China in the longer term. Other regional centres may also provide increased competition to Macau. These, in turn, may have an adverse effect on Macau's economy and property market and the favourable treatment of gambling in Macau. There is an inherent risk in investing in the Macau region which cannot be mitigated or managed by the Board. - The Group's loan refinancing may not be available in the future due to reduced lending appetite from banks and a change in market sentiment. The Board, through the Manager, has an ongoing dialogue with all external lenders and closely monitors the loan covenants of all facilities and ensures, in so far as possible, that asset sales achieve cash realisations sufficient to meet debt repayment obligations. - Inability to achieve the Group's strategic objectives, linked to a widening of the discount between share price and Adjusted NAV. The Continuation Vote in the AGM in December 2025, given the concentrated shareholder base which exists, represents an uncertainty. The Board, the Manager and the Company maintain good relationships with investors through periodic contact, investor updates, and addressing influences on the share price and through provision of factual information to support any resolutions requiring shareholders' approval. - New legislation or regulations, or different or more stringent interpretation or enforcement of existing laws or regulations, in any jurisdiction in which the Group operates, may have a material adverse effect on the Group's financial performance and returns to shareholders. The Manager provides the Board with updates on any relevant development on a regular basis. - Macau law governs the majority of the Group's agreements which relate to property investments, property ownership rights and securities. It cannot be guaranteed that the Group will be able to enforce any such agreements or that remedies will be available outside of Macau. The Manager provides the Board with updates on any concerning developments on a regular basis. - The Group's return on its investments and prospects are subject to economic, legal, political and social developments in Macau and China, and the Asia Pacific region in general. The Manager provides the Board with updates on any concerning developments on a regular basis. In particular, the Group's return on its investments may be adversely affected by: - bank debt situation and cash release policies; - changes in Macau's and China's political, economic and social conditions; - changes in policies of the government or changes in laws and regulations (including the revocation or modification by the Chinese Government of Macau's SAR status and high autonomy levels), or the interpretation of laws and regulations; - changes in foreign exchange rates or regulations; - measures that may be introduced to control inflation, such as interest rate increases; - changes in the rate or method of taxation; - title and/or legal disputes with neighbouring land owners and legal disputes with architects, project managers and suppliers; - changes to restrictions on or regulations concerning repatriation of funds; and - pressure to sell on developers. 54 / Corporate Governance Report --- # Corporate Governance Report (continued) ## Emerging risks Emerging risks have been identified by the Board through a process of evaluating which of the principal risks or any previously unidentified risks have increased materially through the year and/or are expected to grow significantly and such evaluation is completed at regular Board meetings. Any such emerging risks are likely to cause disruption to the Group's business. If ignored, there could be significant impact on the Group's financial situation and future operating performance but, if recognised, they could provide opportunities for transformation. In the current year no further emerging risks have been identified. There is a process for identifying, evaluating and managing the principal and emerging risks faced by the Group. This process (which accords with the FRC's "Guidance on Risk Management, Internal Control and Related Financial and Business Reporting") has been regularly reviewed and has been in place throughout the financial year and up to the date of approval of these annual accounts. The above principal risks are mitigated and managed by the Board through continual review, policy setting and annual updating of the Group's risk matrix to ensure that procedures are in place with the intention of minimising the impact of the above-mentioned risks should they crystallise. The Board relies on reports periodically provided by the Administrator and the Manager regarding risks that the Group faces. When required, experts are employed to gather information, including tax advisers, legal advisers and planning advisers. Some risks are, however, beyond the Board or Managers' ability to mitigate. The Board relies on the Manager's close relationship with legal and other professionals in Macau, Hong Kong and China to keep abreast of any potential changes to the law and any possible impact on the Group. The Board also regularly monitors the investment environment and the management of the Group's property portfolio, and applies the principles detailed in the internal control guidance issued by the FRC. Details of the Group's internal controls are described in more detail on page 52. The Group's financial risks and uncertainties are further discussed in Note 2 to the Consolidated Financial Statements. On behalf of the Board ![img-26.jpeg](img-26.jpeg) Mark Huntley Chairman of the Board 31 October 2025 55 / Corporate Governance Report --- # Nomination and Remuneration Committee Report ## Summary of the role of the Nomination and Remuneration Committee The Nomination and Remuneration Committee regularly reviews the structure, size and composition (including the skills, knowledge, gender, experience and diversity) of the Board and makes recommendations to the Board with regard to any required changes and also considers the appropriate levels of the Board's remuneration. The Board monitors the developments in corporate governance to ensure the Board remains aligned with best practice. The Board acknowledges the importance of diversity of experience, approach and gender, for the effective functioning of a board and commits to supporting diversity in the boardroom. The Board also values diversity of business skills and experience because directors with diverse skills sets, capabilities and experience gained from different geographical backgrounds enhance the Board by bringing a wide range of perspectives to the Company. The Board is satisfied with the current composition and functioning of its members. It is the Company's policy to give careful consideration to issues of the Board's balance, including gender and ethnic diversity, when appointing board members, but its priority is to appoint based on merit, notwithstanding a strong desire to maintain the Board's diversity. The Board's current ethnic diversity ratio is 33.33% and current gender diversity ratio is 33.33%. The terms of reference are considered annually by the Nomination and Remuneration Committee and are then referred to the Board for approval and are available on the Company's website. The Board's approach to succession takes into account of the fact that the Company is in the final phase of its life. ## Remuneration The Nomination and Remuneration Committee determines and agrees with the Board the remuneration of the Company's Chairman, and non-executive directors. No director shall be involved in any decisions as to their own remuneration. In determining such remuneration, the Nomination and Remuneration Committee takes into account all factors which it deems necessary including any relevant legal requirements, the provisions and recommendations in the AIC Code of Corporate Governance and the UK Listing Authority's Listing Rules and associated guidance. The Nomination and Remuneration Committee also obtains reliable, up-to-date information about remuneration in other comparable companies. There have been no changes to annual director remuneration since 2017. ## Composition of the Nomination and Remuneration Committee The members of the Nomination and Remuneration Committee are: ### Date of Appointment Alan Clifton (chairman) 23 May 2006 Mark Huntley 12 November 2018 Carmen Ling 24 February 2022 ## Meetings The Nomination and Remuneration Committee meets at least once a calendar year and otherwise as required. Meetings of the Nomination and Remuneration Committee shall be called by the Company Secretary at the request of the Committee Chairman. Unless otherwise agreed, notice of each meeting confirming the venue, time and date, together with an agenda of items to be discussed, shall be forwarded to each member of the Nomination and Remuneration Committee, any other person required to attend and all other non-executive directors, no later than five working days before the date of the meeting. Supporting papers shall be sent to the Nomination and Remuneration Committee and to other attendees as appropriate, at the same time. Any non-executive director who is not considered independent will not take part in the Nomination and Remuneration Committee's deliberations regarding remuneration levels. ## Consideration of Directors for re-election All Directors will retire annually in accordance with the AIC Code. A retiring director shall be eligible for reappointment. No director shall be required to vacate his office at any time by reason of the fact that he has attained any specific age. The Nomination and Remuneration Committee will consider the use of external consultants to assist with the appointment of future directors. 56 / Nomination and Remuneration Committee Report --- # Nomination and Remuneration Committee Report (continued) ## Overview The Nomination and Remuneration Committee met once during the year ended 30 June 2025. Matters considered at the meeting included but were not limited to: - the structure, size and composition (including the balance of skills, knowledge, experience and diversity) of the Board and Audit and Risk Committee and the need periodically to refresh membership; - to note guidance set out in the AIC Code; - to consider key outcomes from the Board’s evaluation process; - to consider Board’s tenure and succession planning; - consideration of Directors for re-election - consideration of Directors’ remuneration; and - consideration of the effectiveness of Directors. As a result of its work during the year, the Nomination and Remuneration Committee has concluded that it has acted in accordance with its terms of reference. On behalf of the Nomination and Remuneration Committee Alan Clifton Chairman of the Nomination and Remuneration Committee 31 October 2025 57 | Nomination and Remuneration Committee Report --- # Management Engagement Committee Report Summary of the role of the Management Engagement Committee The Management Engagement Committee annually reviews the terms of the Investment Management Agreement between the Company and the Manager and reviews the performance and terms of engagement of any other key service providers to the Company, as detailed in Appendix 1 of the Terms of Reference of the Committee. The terms of reference are considered annually by the Management Engagement Committee and are then referred to the Board for approval and are available on the Company's website. During the prior year the Management Agreement was amended to extend the Manager's entitlement to earn fees into 2025 in reflection of the delays to the realisation of assets arising as a consequence of the coronavirus pandemic and the challenging subsequent trading conditions. Composition of the Management Engagement Committee The members of the Management Engagement Committee are: ## Date of Appointment Mark Huntley (chairman) 12 November 2018 Alan Clifton 23 May 2006 Carmen Ling 24 February 2022 ## Meetings The Management Engagement Committee meets at least once a calendar year and otherwise as required. Meetings of the Management Engagement Committee shall be called by the Company Secretary at the request of the Committee Chairman. Unless otherwise agreed, notice of each meeting confirming the venue, time and date, together with an agenda of items to be discussed, shall be forwarded to each member of the Management Engagement Committee, any other person required to attend, no later than five working days before the date of the meeting. Supporting papers shall be sent to the Management Engagement Committee and to other attendees, as appropriate, at the same time. ## Performance of the Manager Following discussion, it is the opinion of the Management Engagement Committee that the performance of the Manager for the year ended 30 June 2025 was satisfactory and the continuing appointment of the Manager on the terms as currently agreed and, following negotiation and an affirmative Continuation Vote, any future ongoing extension is in the interests of the shareholders as a whole. ## Performance of key service providers Following discussion, it is the opinion of the Management Engagement Committee that the performance of the key service providers (as detailed in Appendix 1 of the Terms of Reference of the Committee) for the year ended 30 June 2025 was satisfactory. ## Overview The Management Engagement Committee met once during the year ended 30 June 2025 and, as a result of its work, the Management Engagement Committee has concluded that it has acted in accordance with its terms of reference. On behalf of the Management Engagement Committee ![img-27.jpeg](img-27.jpeg) Mark Huntley Chairman of the Management Engagement Committee 31 October 2025 58 / Management Engagement Committee Report --- # Audit and Risk Committee Report ## Summary of the role of the Audit and Risk Committee The Audit and Risk Committee is appointed by the Board from the non-executive directors of the Company. The Audit and Risk Committee’s terms of reference include all matters indicated by Disclosure Guidance and Transparency Rule 7.1 and the UK Code. The terms of reference are considered annually by the Audit and Risk Committee and are then referred to the Board for approval and are available on the Company’s website. The Audit and Risk Committee is responsible for: - reviewing and monitoring the integrity of the Annual Report and Audited Consolidated Financial Statements, the Interim Report and Interim Condensed Consolidated Financial Statements of the Group, and any formal announcements relating to the Group’s financial performance, and reviewing significant financial reporting judgements contained therein; - reporting to the Board on the appropriateness of the accounting policies and practices including critical accounting policies and practices; - advising the Board that the annual report and accounts, taken as a whole, is fair, balanced and understandable and provides the information necessary for shareholders to assess the Company’s performance, business model and strategy; - reviewing the Group’s internal financial controls and, unless expressly addressed by the Board itself, the Group’s internal controls and principal risks; - making recommendations to the Board for a resolution to be put to the shareholders, for their approval in general meetings, on the appointment of the external auditor and the approval of the remuneration and terms of engagement of the external auditor; - reviewing and monitoring the external auditor’s independence and objectivity and the effectiveness of the audit process, taking into consideration relevant UK professional and regulatory requirements; - developing and implementing a policy on the engagement of the external auditor to supply non-audit services, taking into account relevant guidance regarding the provision of any non-audit services by the external audit firm; - reviewing the valuations of the Company’s investments prepared by the Investment Adviser, and providing a recommendation to the Board on the valuation of the Company’s investments; - meeting the external auditor to review their proposed audit programme of work and the subsequent audit report and to assess the effectiveness of the audit process and the levels of fees paid in respect of both audit and any non-audit work; - considering annually whether there is a need for the Company to have its own internal audit function; and - reviewing and considering the UK Code, the AIC Code and the Stewardship Code. The Audit and Risk Committee is required to report its findings to the Board, identifying any matters on which it considers that action or improvement is needed, and to make recommendations on the steps to be taken. The Audit and Risk Committee is also required to report to the Board, identifying how it has discharged its responsibilities during the current year. The Board has taken note of the requirement that at least one member of the Audit and Risk Committee should have recent and relevant financial experience and is satisfied that the Audit and Risk Committee is properly constituted in that respect, with all members having relevant sector experience. The Audit and Risk Committee reviews the information contained in the other sections of the Annual Report including the Directors’ Report, Chairman’s Message and the Manager’s Report. The Audit and Risk Committee is the formal forum through which the external auditor reports to the Board. The external auditor is invited to attend the Audit and Risk Committee meetings at which the Annual Report and Audited Consolidated Financial Statements, and at which they have the opportunity to meet with the Audit and Risk Committee without representatives of the Investment Adviser being present at least once per year. 59 / Audit and Risk Committee Report --- Audit and Risk Committee Report (continued) Composition of the Audit and Risk Committee The members of the Audit and Risk Committee are: Date of appointment Alan Clifton (Chairman) 23 May 2006 Mark Huntley 12 November 2018 Carmen Ling 24 February 2022 Appointments to the Audit and Risk Committee will be for a period of up to three years, which is extendable, depending upon members continuing to be independent. Alan Clifton has been a member of the Audit and Risk Committee for 19 years. However, the Board and Audit and Risk Committee have satisfied themselves that Alan Clifton continues to be independent in approach and judgement. The Board are satisfied that Alan Clifton remains completely independent of the Investment Manager and provides consistency and continuity in the current realisation phase of the Company. Accordingly, it has resolved to extend his appointment to the Audit and Risk Committee for a further year. The Board has also considered the inclusion of the Chairman within the Audit and Risk Committee and, having taken into account that the Chairman is independent and non-executive, believes it appropriate for the Chairman to be a member. It is the intention to maintain the majority board independence within the meaning of the AIC Code. ## Financial Reporting The primary role of the Audit and Risk Committee in relation to the financial reporting is to review with the Administrator, Investment Adviser and the external auditor on the appropriateness of the Annual Report and Audited Consolidated Financial Statements and Interim Report, concentrating on, among other matters: - the quality and acceptability of accounting policies and practices; - the clarity of the disclosures and compliance with financial reporting standards and relevant financial and governance reporting requirements; - material areas in which significant judgement have been applied or there has been discussion with the external auditor; - whether the Annual Report and Audited Consolidated Financial Statements, taken as a whole, are fair, balanced and understandable and provide the information necessary for the shareholders to assess the Company's performance, business model and strategy; and - any correspondence from regulators in relation to Company's financial reporting. To aid its review, the Audit and Risk Committee considers reports from the Administrator, Manager and Investment Adviser and also reports from the external auditor on the outcomes of their annual audit. The Audit and Risk Committee supports Deloitte LLP in displaying the necessary professional scepticism their role requires. ## Significant issues considered in relation to the financial statements The Audit and Risk Committee has had regular contact with the Investment Adviser and the external auditor during the year end audit process. The Committee's discussions have been broad ranging, including the consideration of the Company's going concern status and key areas of judgement. The Audit and Risk Committee is satisfied, having received advice from professional advisers which include external valuers, tax advisers and lawyers, that these sensitivities have been appropriately reflected and disclosed in the financial statements. 60 / Audit and Risk Committee Report --- Audit and Risk Committee Report (continued) During its review of the Group's financial statements for the year ended 30 June 2025, the Audit and Risk Committee considered the following significant issues: - going concern and viability in relation to the Continuation Vote in December 2025 and availability of loan refinancing; - valuation of current assets held for sale and inventories; - existence and ownership of current assets held for sale and inventories; - interest rates and inflation; - income recognition for rental income; and - progress on divestment. The risks relating to going concern and viability are mitigated through ongoing management of cash resources, regular monitoring of compliance with loan covenants and re-negotiation with lender banks prior to loan maturities. However, uncertainty remains around the successful refinancing of existing debt facilities, which could impact liquidity if market conditions or lender appetite deteriorate. The Company continues to explore refinancing options and maintains open dialogue with financial institutions to address these risks. Communications with major shareholders lend support to the Company's continuation. However, as the Group's divestment programme, which will result in the Group's operations being wound down, is expected to be achieved, the financial statements have been prepared on a basis other than that of a going concern. The risk relating to the valuation of current assets held for sale and inventories is mitigated through use of a professionally qualified independent valuer to conduct the valuations in accordance with current Royal Institution of Chartered Surveyors Appraisal and Valuation Standards. The valuation is overseen by the Investment Adviser to ensure that the values are comparable to current market values of similar properties. The valuation process and methodology are discussed with the Investment Adviser regularly during the year and with the external auditor as part of the year-end audit planning. These valuations are reviewed, challenged and ultimately agreed by the Board, who possesses knowledge and understanding of the markets where the properties are situated. The Board ordinarily meets with the valuer at least once a year. The factors that affect the value and ownership of the current assets held for sale and inventory are further discussed in Notes 3, 6, 7 and 25. The risk relating to the ownership and existence of current assets held for sale and inventories is mitigated through ensuring proper title deeds for the properties are held. Asset reconciliations are performed by the Administrator with the special purpose vehicle ("SPV") Administrator on a quarterly basis. Property searches showing ownership of each of the assets are conducted to ascertain that there are no changes in ownership. The risk relating to taxation is mitigated through the setup of the Group structure. When taxation queries arise, an independent taxation adviser is employed to advise the Board on such issues. The factors that affect the Group's taxation position are further discussed in Note 9. ## Meetings The Audit and Risk Committee meets not less than twice a year and at such other times as the Chairman requires. Any member of the Audit and Risk Committee may request that a meeting be convened by the Company Secretary. The external auditor may request that a meeting be convened if they deem it necessary. Other Directors and third parties may be invited by the Audit and Risk Committee to attend meetings as and when appropriate. ## Annual General Meeting The Audit and Risk Committee Chairman, or other members of the Audit and Risk Committee appointed for the purpose, shall attend each AGM of the Company, prepared to respond to shareholders' questions on the Audit and Risk Committee's activities. ## Risk management The Company's risk assessment process and the way in which significant business risks are managed is a key area of focus for the Audit and Risk Committee. The work of the Audit and Risk Committee was driven primarily by the Company's assessment of its principal risks and uncertainties as set out in the Corporate Governance Report. The Audit and Risk Committee receives reports from the Investment Adviser and Administrator on the Company's risk evaluation process and reviews changes to the principal risks identified, including emerging risks. 61 / Audit and Risk Committee Report --- # Audit and Risk Committee Report (continued) ## Primary Area of Judgement The Audit and Risk Committee determined that the key risk of misstatement of the Company's financial statements is the fair value of the current assets held for sale held by the Group in the context of the high degree of judgement involved in the assumptions and estimates underlying the discounted cash flow calculations and any resulting impairment. The assets held at *The Waterside* were reclassified from Investment Property to current assets held for sale as at 30 June 2025 and are measured at fair value in accordance with the exemption criteria in IFRS 5 as explained on page 85. As outlined in Note 6 of the financial statements, the fair value of the Group's current assets held for sale as at 30 June 2025 was US$62,788,000. The valuation process is initiated by the Investment Adviser who appoints a suitably qualified valuer to conduct the valuation of the current assets held for sale. The results are overseen by the Investment Adviser. Once satisfied with the valuations based on their expectations, the Investment Adviser reports the results to the Board. The Board reviews the latest valuation based on their knowledge of the property market and compares these to previous valuations. The Group's current assets held for sale were revalued at 30 June 2025 by an independent, professionally-qualified valuer, Savills. Savills is required to make assumptions on establishing the current market valuation. The most significant assumptions (as described further in Note 6), relate to future income streams and discount rates applicable to these estimates. The principal technique deployed was the income capitalisation method and these estimates are based on the local market conditions existing at the reporting date. The valuation of the Group's current assets held for sale as at 30 June 2025 has been determined by the Board based upon the information provided by the Investment Adviser. The properties accounted for as inventory under IFRS are recorded at the lower of cost and net realisable value. The Company also discloses an Adjusted NAV reporting what the Company's net asset value would be if the inventory were recognised at fair value (see Note 18) using the valuation prepared by Savills. As detailed above, Savills is required to make assumptions on establishing the current market valuation. The valuation of the Group's inventories at fair value for the purpose of the Adjusted NAV as at 30 June 2025 has been determined by the Board based upon the information provided by the Investment Adviser. ## Internal audit The Audit and Risk Committee considers at least once a year whether or not there is a need for an internal audit function. Currently, the Audit and Risk Committee does not consider there to be a need for an internal audit function, given that there are no employees in the Group and all outsourced functions are with parties/administrators who have their own internal controls and procedures. During the year, a SOC 1 report was produced for the Administrator, Ocorian Administration (Guernsey) Limited. The Audit and Risk Committee also considers the review of controls of the service organisations. ## External audit Deloitte LLP have been appointed as external auditor for the year to 30 June 2025. The external auditor is required to rotate the audit partner every five years. The current Deloitte LLP lead audit partner, David Becker, started his tenure for the financial year ended 30 June 2021 and he will rotate off the audit for the 30 June 2026 year end. The GFSC have indicated that no audit rotation requirements are applicable to a Guernsey company. Accordingly, paragraph 3.9 of the FCA guidance which cross refers to the requirement included in UK legislation, is not relevant for a Guernsey incorporated company. During the year, the Audit and Risk Committee discussed the planning, conduct and conclusions of the external audit as it proceeded. At the June 2025 Audit and Risk Committee meeting, the Committee discussed and approved the external auditor's Group plan in which they identified the Group's going concern assumption, valuation of the current assets held for sale and carrying value of inventories as the key areas of risk of misstatement in the Group's financial statements. The Audit and Risk Committee discussed these issues at the June 2025 meeting to ensure that appropriate arrangements are in place to mitigate these risks. To fulfil its responsibility regarding the independence of the external auditor, the Audit and Risk Committee will consider: - discussions with or reports from the external auditor describing its arrangements to identify, report and manage any conflicts of interest; and - the extent of any non-audit services provided by the external auditor. 62 I Audit and Risk Committee Report --- Audit and Risk Committee Report (continued) To assess the effectiveness of the external auditor, the Audit and Risk Committee will review: - the external auditor’s fulfilment of the agreed audit plan and variations from it; - discussions or reports highlighting the major issues that arose during the course of the audit; - feedback from other service providers evaluating the performance of the audit team; - arrangements for ensuring independence and objectivity; - the robustness of the external auditor in handling key accounting and audit judgements; especially with regard to the external auditor’s review of the following areas: - Valuation of investment property: the external auditor identified this as a key focus area of the audit and challenged the underlying assumptions used to prepare the valuation of the investment property by independent and professionally-qualified valuer, Savills, using their regional market specialists in Hong Kong and performed recalculations of assumptions to ensure they sat within their parameters. The investment property was reclassified as current assets held for sale following consultation with the auditors and valued at fair value in accordance with the exemption criteria in IFRS 5. - The going concern assumption: the external auditor held discussions with the Corporate Broker to understand any negative sentiment from investors around the upcoming continuation vote. In addition, the external auditor performed rigorous testing of management’s cash flow forecasts and two-year viability period to obtain comfort over the going concern assumption. However, as the Group’s divestment programme, which will result in the Group’s operations being wound down, is expected to be achieved, the financial statements have been prepared on a basis other than that of a going concern. - Carrying value of inventory: Deloitte LLP performed an analysis of the cost of the properties classified as inventory against the valuation prepared by Savills and challenged the underlying assumptions that were used to prepare the valuations to ensure that these were appropriate. The Audit and Risk Committee also held private meetings with the external auditor during 2025 and the Audit and Risk Committee Chairman also maintained regular contact with the audit partner throughout the year. These meetings provide an opportunity for open dialogue with the external auditor without management being present. The Audit and Risk Committee is satisfied with Deloitte LLP’s effectiveness and independence as the external auditor having considered the degree of diligence and professional scepticism demonstrated by them. Having carried out the review described above and having satisfied itself that the external auditor remains independent and effective, the Audit and Risk Committee has concluded that the external auditor implemented sufficiently robust processes to deliver a high quality audit. Accordingly, the Committee recommended to the Board that Deloitte LLP be reappointed as external auditor for the year ending 30 June 2026. The Audit and Risk Committee has provided the Board with its recommendation to the shareholders on the re-appointment of Deloitte LLP as external auditor which will be put to shareholders at the AGM in December 2025. ## Non-audit services To safeguard the objectivity and independence of the external auditor from becoming compromised, the Audit and Risk Committee has a formal policy governing the engagement of the external auditor to provide non-audit services. This precludes Deloitte LLP from providing certain services, such as valuation work or the provision of accounting services, and also sets a presumption that Deloitte LLP should only be engaged for non-audit services where Deloitte LLP is best placed to provide the non-audit service. No non-audit services have been provided by Deloitte LLP in the current or prior financial years. 63 / Audit and Risk Committee Report --- # Audit and Risk Committee Report (continued) ## Overview The Audit and Risk Committee met three times in the year ended 30 June 2025. Matters considered at these meetings included but were not limited to: - consideration and agreement of the terms of reference of the Audit and Risk Committee for approval by the Board; - review of the accounting policies and format of the financial statements; - review of the valuations of the properties held; - review of the 2024 Annual Report and Audited Consolidated Financial Statements for the year ended 30 June 2024; - review of the 2024 Interim Report and unaudited Interim Condensed Consolidated Financial Statements for the 6 months ended 31 December 2024; - review of the quarterly results announcements issued in November 2024, February 2025 and May 2025; - review of the audit plan and timetable for the preparation of the 2025 Annual Report and Audited Consolidated Financial Statements; - challenge of the 2025 Annual Report and Audited Consolidated Financial Statements for the year ended 30 June 2025; - discussions and recommendation regarding the appointment of the external auditor; - discussions and approval of the fee for the external audit; - assessment of the effectiveness of the external audit process as described above; and - review of the Company’s principal risks, emerging risks and internal controls. As a result of its work during the year, the Audit and Risk Committee has concluded that it has acted in accordance with its terms of reference and has ensured the independence and objectivity of the external auditor. The Audit and Risk Committee has recommended to the Board that the Annual Report and Financial Statements are considered to be fair, balanced and understandable. The Audit and Risk Committee has recommended to the Board that the external auditor is re-appointed. On behalf of the Audit and Risk Committee Alan Clifton Chairman of the Audit and Risk Committee 31 October 2025 64 / Audit and Risk Committee Report --- # Statement of Directors' Responsibilities The Directors are responsible for preparing the annual report and accounts in accordance with applicable laws and regulations. The Companies (Guernsey) Law, 2008 requires the Directors to prepare financial statements for each financial year. The Directors prepare the Group's financial statements in accordance with International Financial Reporting Standards as approved by the International Accounting Standards Board ("IFRS"). Under Company Law, the Directors must not approve the accounts unless they are satisfied that they give a true and fair view of the state of affairs of the Group and of the financial performance and cash flows of the Group for that period. In preparing these Group's financial statements, the Directors are required to: - properly select and apply accounting policies; - present information, including accounting policies, in a manner that provides relevant, reliable, comparable and understandable information; - provide additional disclosures when compliance with the specific requirements in IFRS are insufficient to enable users to understand the impact of particular transactions, other events and conditions on the entity's financial position and financial performance; and - make an assessment of the Company's ability to continue as a going concern. The Directors confirm that they have complied with the above requirements in preparing the Group's financial statements. The Directors are responsible for keeping adequate accounting records that are sufficient to show and explain the Group's transactions and disclose with reasonable accuracy, at any time, the financial position of the Group and which enable them to ensure that the financial statements comply with the Companies (Guernsey) Law, 2008. They are also responsible for safeguarding the assets of the Group and, hence, for taking reasonable steps for the prevention and detection of fraud and other irregularities. The maintenance and integrity of the Company's website (www.mpofund.com) is delegated to the Manager but is ultimately the responsibility of the Directors. The work carried out by the external auditor does not involve consideration of these matters and, accordingly, the external auditor accepts no responsibility for any changes that may have occurred to the financial statements since they were initially presented on the website. Legislation in Guernsey governing the preparation and dissemination of financial statements may differ from legislation in other jurisdictions. All companies with a Premium Listing of equity shares in the UK are required under the Listing Rules to report on how they have applied the UK Code in their annual report and financial statements. 65 I Statement of Directors' Responsibilities --- # Statement of Directors' Responsibilities (continued) Responsibility Statement of the Directors in respect of the Annual Report and Accounts Each of the Directors, whose names are set out on pages 10 and 11 of the Annual Report, confirms that, to the best of their knowledge and belief that: ## Directors' statement under the Disclosure, Guidance and Transparency Rules - The Group's financial statements, prepared in accordance with IFRS, give a true and fair view of the assets, liabilities, financial position and profit or loss of the Company and the undertakings included in the consolidation taken as a whole. - The management report, which is incorporated into the Directors' Report, Manager's Report and Chairman's Message contained in the Annual Report, includes a fair review of the development and performance of the business and of the position of the Company and the undertakings included in the consolidation taken as a whole, together with a description of the principal risks and uncertainties they face. ## Directors' statement under the UK Corporate Governance Code - The Directors are responsible for preparing the Annual Report and Group's financial statements in accordance with applicable law and regulations. Having taken advice from the Audit and Risk Committee, the Directors consider the Annual Report and Group's Financial Statements, taken as a whole, as fair, balanced and understandable and that it provides the information necessary for shareholders to assess the Group's performance, business model and strategy. So far as each Director is aware, there is no relevant audit information of which the Company's external auditor is unaware, and each Director has taken all the steps that he ought to have taken as a Director in order to make himself aware of any relevant audit information and to establish that the Company's external auditor is aware of that information. This confirmation is given and should be interpreted in accordance with the provisions of section 249 of the Companies (Guernsey) Law, 2008 (as amended). On behalf of the Board ![img-28.jpeg](img-28.jpeg) Mark Huntley Chairman of the Board 31 October 2025 66 I Statement of Directors' Responsibilities --- Independent Auditor’s Report to the Members of Macau Property Opportunities Fund Limited Report on the audit of the financial statements 1. Opinion In our opinion the financial statements of Macau Property Opportunities Fund Limited (the ‘Company’/‘Fund’) and its subsidiaries (the ‘Group’): - give a true and fair view of the state of the Group’s affairs as at 30 June 2025 and of its loss for the year then ended; - have been properly prepared in accordance with IFRS Accounting Standards as issued by the International Accounting Standards Board (IASB); - have been prepared in accordance with the requirements of the Companies (Guernsey) Law, 2008. We have audited the financial statements which comprise: - the consolidated statement of financial position; - the consolidated statement of comprehensive income; - the consolidated statement of changes in equity; - the consolidated cash flow statement; and - the related notes 1 to 26. The financial reporting framework that has been applied in their preparation is applicable law and IFRS Accounting Standards as issued by the IASB. 2. Basis for opinion We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK)) and applicable law. Our responsibilities under those standards are further described in the auditor’s responsibilities for the audit of the financial statements section of our report. We are independent of the Group in accordance with the ethical requirements that are relevant to our audit of the financial statements in the UK, including the Financial Reporting Council’s (the ‘FRC’s’) Ethical Standard as applied to listed public interest entities, and we have fulfilled our other ethical responsibilities in accordance with these requirements. We confirm that we have not provided any non-audit services prohibited by the FRC’s Ethical Standard to the Group. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion. 3. Summary of our audit approach | Key audit matters | The key audit matters that we identified in the current year were: • The preparation of the financial statements on a basis other than going concern and key judgements in relation to going concern • Key judgements in the valuation of investment property held for sale • Carrying value of inventory | | --- | --- | | Materiality | The materiality that we used for the Group financial statements in the current year was $315k which was determined on the basis of 1% of net asset value. | | Scoping | The response to the risks of material misstatement was performed directly by the Group audit engagement team. | | Significant changes in our approach | There have been no significant changes in our approach compared with the prior year. | 4. Key audit matters Key audit matters are those matters that, in our professional judgement, were of most significance in our audit of the financial statements of the current period and include the most significant assessed risks of material misstatement (whether or not due to fraud) that we identified. These matters included those which had the greatest effect on: the overall audit strategy, the allocation of resources in the audit; and directing the efforts of the engagement team. These matters were addressed in the context of our audit of the financial statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters. We have determined the matters described below to be the key audit matters to be communicated in our report. 67 / Independent Auditor’s Report to the Members of Macau Property Opportunities Fund Limited --- # Independent Auditor’s Report to the Members of Macau Property Opportunities Fund Limited (continued) ## 4.1 Preparation of the financial statement on a basis other than going concern and key judgements in relation to going concern **Key audit matter description** The financial statements have been prepared on a basis other than that of a going concern. This reflects the Board’s decision, in view of the Company’s progress against the expected timeframe to realise the value of its entire remaining investment portfolio of residential properties in Macau. As a result of preparing the financial statements on a basis other than that of a going concern, the Directors assessed the valuation methodology of the Group’s assets and liabilities and classified the investment property as held for sale (see key audit matters 4.2 and 4.3 for further details). Notwithstanding this, and subject to the uncertainties noted below, the Board have a reasonable expectation that the Group will be able to realise its assets to meet its liabilities as they fall due for the next 12 months after date of approval of the Annual Report. This is a key audit matter due to the significant judgements involved in assessing the Group’s ability to execute its divestment plan and meet its financial obligations. Key factors considered by the Group included: **Significant debt maturities:** The Group faces major debt obligations maturing within 12 months of the financial statements’ approval date, including principal repayments for The Waterside loan facility ($45.6 million), The Fountainside loan facility ($0.7 million) and Penha Heights loan facilities (Tai Fung Bank: $2.6 million with $0.38 million due on or before December 2025 and BCM Bank: $7.6 million with $1.5 million due in November 2025). **Loan-to-value (“LTV”) covenant breach:** As at 30 June 2025, breaches in the loan to value covenants with Hang Seng bank were noted and reported as appropriate. The lender has acknowledged this breach and have requested an accelerated disposal plan. Management anticipates that proceeds from the sale of *The Waterside* units and *The Fountainside* villas, based on achieved sales velocity, will cover the associated debt obligations and contribute to reinstating an acceptable LTV level. **Penha Heights divestment and funding:** Repayments for the Penha Heights and Tai Fung Bank loan facilities are anticipated to be funded by the proceeds from the sale of the Penha Heights property. However, as at the date of approval of the financial statements, a buyer has not been identified. To address the impending loan repayments amounting to $1.9 million due on or before December and BCM loan maturity in January 2026, should the Penha Heights divestment not proceed as planned, the Group is exploring options including an equity capital raise to meet short-term working capital obligations. **Fund life expiry:** The Fund’s life is due to expire in December 2025. The Company will put forward a resolution for its continuation at the next annual general meeting. If any continuation resolution is not passed, the Directors are required to formulate proposals to be put to Members to reorganise, unitise, reconstruct or wind up the Company. Details of the Directors’ going concern assessment are included in note 1 of the financial statements, which includes the rationale for preparation of the financial statements on a basis other than going concern. ## How the scope of our audit responded to the key audit matter To respond to the key audit matter, we have performed the following audit procedures: - Obtained an understanding of the relevant controls in relation to the Group’s preparation of the financial statements on a basis other than that of a going concern, considering the Group’s divestment strategy and the expected timeframe for asset realisation; - Assessed the Group’s plans to meet its significant debt obligations falling due within the next 12 months and the mitigating factors, including evaluating supporting documentation for property sales, the financing options available to the Group, and the feasibility of proposed capital raises; - Assessed and performed sensitivity analysis on the key assumptions and inputs applied in the going concern assessment and cashflow model, including the ability to sell the remaining properties; - Assessed correspondence with the bank pertaining to instances of LTV ratio breaches to ascertain the lender’s enforcement of contractual rights, and evaluated the proposed accelerated asset disposal strategy particularly in the context of decreased property valuations and the impact of the current macro-economic environment including high interest rates; 681 Independent Auditor’s Report to the Members of Macau Property Opportunities Fund Limited --- # Independent Auditor’s Report to the Members of Macau Property Opportunities Fund Limited (continued) - Evaluated the likelihood of renewal of external financing arrangements at expiry, including consideration of history of renewal of such arrangements; - Assessed the intent of shareholders in providing support for the short term and long term capital raise planned by discussions with the broker; - Evaluated the assumption made by the directors related to passing of the upcoming continuation vote for the extension of the life of the Company; and - Evaluated the appropriateness of the disclosures in the financial statements. ## Key observations We concluded that management appropriately prepared the financial statement on a basis other than that of a going concern and the going concern disclosures including the Group’s assessment of its ability to execute the divestment plan to repay its debt obligations are appropriate. ## 4.2 Key judgements in the valuation of investment property held for sale ### Key audit matter description The Group owns a high-end residential investment property in Macau, China, as disclosed in note 6, that is valued at $62.0m as at 30 June 2025 (2024: $98.0m). As disclosed in note 25, the investment property met the criteria to be classified as held for sale as per IFRS 5 “Non-current Assets Held for Sale and Discontinued Operations” as the sale is highly probable within the next 12 months and the asset is actively marketed for sale at a price that is reasonable in relation to its current fair value. The property is valued by an independent, professionally qualified valuer using the ‘income capitalisation’ method of valuation. Directors are required to make a number of significant assumptions and judgements in determining the fair value and therefore we have identified this as a potential fraud risk. The key inputs into the fair value model which are subject to significant estimates include future cash flows from assets, such as lettings, as well as applicable comparable term yields and market rent. Unreasonable assumptions could give rise to a material misstatement. The value of investment property held for sale declined by 36% as at 30 June 2025 in comparison to prior year due to realisations of investment property units during the year which reduced the overall investment property portfolio as well as the drop in the fair value due to the downward trend of the market. Consistent with the market conditions observed in the prior year, there continued to be a higher level of judgement associated with high-end residential properties. The valuation of investment property held for sale is disclosed as one of the key sources of estimation uncertainty in note 3 of the financial statements. The Audit and Risk committee also considered this as a significant matter as discussed in the Audit and Risk Committee Report on page 59. ## How the scope of our audit responded to the key audit matter To respond to the key audit matter, we have performed the following audit procedures: - Obtained an understanding and tested the relevant controls in relation to the valuation process; - Tested the completeness and accuracy of the year end data provided to the valuers including reconciling the information included in the valuation report to supporting documentation such as lease agreements; - With involvement of our valuation specialists, discussed and challenged the appropriateness of the valuation methodology and the key inputs and assumptions (such as comparable term yields and market rent) with the valuers and management with reference to independent market data; - Evaluated the competence, objectivity and capabilities of the valuer; - Assessed whether the investment property met the criteria to be classified as held for sale and the associated valuation methodology; and 691 Independent Auditor’s Report to the Members of Macau Property Opportunities Fund Limited --- # Independent Auditor’s Report to the Members of Macau Property Opportunities Fund Limited (continued) Key observations - Assessed whether the disclosures in the financial statements are appropriate regarding the critical accounting judgements and key sources of estimation uncertainty. We concluded that the investment property met the criteria to be recognised as held for sale. We also concluded that the assumptions applied by management in arriving at its fair value, and the resulting valuations of investment property held for sale are appropriate. ## 4.3. Carrying value of inventory Key audit matter description The Group owns high-end residential properties held as inventory in Macau, as disclosed in note 7, with carrying value of 832.0m as at 30 June 2025 (2024: 835.0m). Properties held as inventory are carried at the lower of cost or net realisable value (“NRV”). In order to determine the NRV, the properties are valued by an independent, professionally qualified valuer using the ‘sales comparison’ method of valuation. The value indication is derived by comparing the property being appraised to similar properties that have been sold recently, then applying appropriate units of comparison and making adjustments to the sale prices of the comparable properties based on the elements of comparison. As disclosed in note 7, the NRV has been estimated as 835.8m at 30 June 2025 (2024: 853.1m). Directors are required to make a number of significant assumptions and judgements in determining the NRV such as comparable recent sales transactions, which are necessary to assess the appropriate carrying value in the financial statements, and therefore we have identified this as a potential fraud risk. The key inputs into the fair value model which are subject to significant estimates include the weighted unit rate per square foot and comparable sales transactions. The valuation of inventory is disclosed as one of the key sources of estimation uncertainty in note 3 of the financial statements. The Audit and Risk committee also considered this as a significant matter as discussed in the Audit and Risk Committee Report on page 59. How the scope of our audit responded to the key audit matter To respond to the key audit matter, we have performed the following audit procedures: - Obtained an understanding and tested the relevant controls in relation to the valuation process; - Tested the completeness and accuracy of the year end data provided to the valuers including reconciling the information included in the valuation report to supporting documentation; - With involvement of our valuation specialists, discussed and challenged the appropriateness of the valuation methodology and the key inputs (such as weighted unit rate per square foot, comparable sales transactions) and assumptions with the valuer and management with reference to independent market data; - Evaluated the competence, objectivity and capabilities of the valuer; - Compared NRV and cost to determine the carrying value of the property, including assessing the associated valuation methodology as a result of preparing the financial statements on a basis other than going concern; and - Assessed whether the disclosures in the financial statements are appropriate regarding the critical accounting judgements and key sources of estimation uncertainty. Key observations We note that the weighted unit rate per square foot determined by the independent valuer is within the range noted in our independent market research, therefore we concluded that the assumptions applied by management in arriving at the NRV of inventory, and the resulting carrying value of inventory are appropriate. 70 | Independent Auditor’s Report to the Members of Macau Property Opportunities Fund Limited --- # Independent Auditor’s Report to the Members of Macau Property Opportunities Fund Limited (continued) ## 5. Our application of materiality ### 5.1. Materiality We define materiality as the magnitude of misstatement in the financial statements that makes it probable that the economic decisions of a reasonably knowledgeable person would be changed or influenced. We use materiality both in planning the scope of our audit work and in evaluating the results of our work. Based on our professional judgement, we determined materiality for the financial statements as a whole as follows: Group materiality $315k (2024: $464k) Basis for determining materiality 1% of net asset value (“NAV”) (2024: 1% of NAV) Rationale for the benchmark applied In determining the materiality, we considered what the most important balances on which the users of the financial statements would judge the performance of the Group. We consider the NAV of the Group to be an appropriate benchmark as this is a key performance indicator for shareholders. ![img-29.jpeg](img-29.jpeg) ### 5.2. Performance materiality We set performance materiality at a level lower than materiality to reduce the probability that, in aggregate, uncorrected and undetected misstatements exceed the materiality for the financial statements as a whole. Group performance materiality was set at 70% of Group materiality for the 2025 audit (2024: 70%). In determining performance materiality, we considered the following factors: - Our risk assessment, including our assessment of the quality of the control environment including that present at the administrator, Ocorian Administration (Guernsey) Limited; - Our past experience of the audit, which has indicated a low number of corrected and uncorrected misstatements identified in prior period; - The continued impact of macro-economic factors in Macau on the Group’s performance in the current year. ### 5.3. Error reporting threshold We agreed with the Audit Committee that we would report to the Committee all audit differences in excess of $15k (2024: $23k), as well as differences below that threshold that, in our view, warranted reporting on qualitative grounds. We also report to the Audit Committee on disclosure matters that we identified when assessing the overall presentation of the financial statements. 71 | Independent Auditor’s Report to the Members of Macau Property Opportunities Fund Limited --- Independent Auditor’s Report to the Members of Macau Property Opportunities Fund Limited (continued) 6. An overview of the scope of our audit 6.1. Scoping Our audit was scoped by obtaining an understanding of the Group and its environment, including internal control, and assessing the risks of material misstatement for the Company and its subsidiaries. Audit work to respond to the risks of material misstatement was performed directly by the Group audit team and all work was performed to Group materiality. 6.2. Our consideration of the control environment We obtained an understanding of the IT systems in place. In assessing the control environment, we also considered the control environments of the key service providers, including the administrators, to whom the board have delegated certain functions for the Company and its subsidiaries. As part of our audit, we obtained an understanding of relevant controls established at the key service providers including obtaining the ISAE 3402 report. We obtained an understanding and tested the relevant controls over investment properties and inventory valuation. We did not rely on these controls for our audit procedures. 6.3. Our consideration of climate-related risks In planning our audit, we have considered the potential impact of environmental related risks on the Group’s business and its financial statements. The Group continues to develop its assessment of the impacts of environmental, social and governance (“ESG”) related risks as outlined on page 38. The Group evaluated the impact arising from climate change on the financial statements and concluded that there is no material effect. As a part of our audit, we have obtained management’s ESG policy and held discussions with management to understand the process of identifying ESG related risks, the determination of mitigating actions and the impact on the Group’s financial statements. We performed our own qualitative risk assessment of the climate impact and concur with management assessment. We also considered the consistency of the ESG disclosure on page 38 with the financial statements and our knowledge from our audit. 7. Other information The other information comprises the information included in the annual report, other than the financial statements and our auditor’s report thereon. The directors are responsible for the other information contained within the annual report. Our opinion on the financial statements does not cover the other information and we do not express any form of assurance conclusion thereon. Our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the course of the audit, or otherwise appears to be materially misstated. If we identify such material inconsistencies or apparent material misstatements, we are required to determine whether this gives rise to a material misstatement in the financial statements themselves. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact. We have nothing to report in this regard. 8. Responsibilities of directors As explained more fully in the directors’ responsibilities statement, the directors are responsible for the preparation of the financial statements and for being satisfied that they give a true and fair view, and for such internal control as the directors determine is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error. In preparing the financial statements, the directors are responsible for assessing the Group’s ability to continue as a going concern, disclosing as applicable, matters related to going concern and using the going concern basis of accounting unless the directors either intend to liquidate the Group or to cease operations, or have no realistic alternative but to do so. 9. Auditor’s responsibilities for the audit of the financial statements Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with ISAs (UK) will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements. A further description of our responsibilities for the audit of the financial statements is located on the FRC’s website at: www.frc.org.uk/auditorsresponsibilities. This description forms part of our auditor’s report. 72 I Independent Auditor’s Report to the Members of Macau Property Opportunities Fund Limited --- Independent Auditor’s Report to the Members of Macau Property Opportunities Fund Limited (continued) 10. Extent to which the audit was considered capable of detecting irregularities, including fraud Irregularities, including fraud, are instances of non-compliance with laws and regulations. We design procedures in line with our responsibilities, outlined above, to detect material misstatements in respect of irregularities, including fraud. The extent to which our procedures are capable of detecting irregularities, including fraud is detailed below. 10.1. Identifying and assessing potential risks related to irregularities In identifying and assessing risks of material misstatement in respect of irregularities, including fraud and non-compliance with laws and regulations, we considered the following: - the nature of the industry and sector, control environment and business performance including the design of the Group’s remuneration policies, key drivers for directors’ remuneration, bonus levels and performance targets; - results of our enquiries of management, the directors and the Audit Committee about their own identification and assessment of the risks of irregularities including those that are specific to the Group’s sector; - any matters we identified having obtained and reviewed the Group’s documentation of their policies and procedures relating to: - identifying, evaluating and complying with laws and regulations and whether they were aware of any instances of non-compliance; - detecting and responding to the risks of fraud and whether they have knowledge of any actual, suspected or alleged fraud; - the internal controls established to mitigate risks of fraud or non-compliance with laws and regulations; - the matters discussed among the audit engagement team and relevant internal specialists, including valuation specialists regarding how and where fraud might occur in the financial statements and any potential indicators of fraud. As a result of these procedures, we considered the opportunities and incentives that may exist within the organisation for fraud and identified the greatest potential for fraud in the following areas: - Key judgements in the valuation of investment property held for sale; and - Carrying value of inventory. In common with all audits under ISAs (UK), we are also required to perform specific procedures to respond to the risk of management override. We also obtained an understanding of the legal and regulatory framework that the Group operates in, focusing on provisions of those laws and regulations that had a direct effect on the determination of material amounts and disclosures in the financial statements. The key laws and regulations we considered in this context included the Companies (Guernsey) Law, 2008, the Listing Rules and relevant tax legislation. In addition, we considered provisions of other laws and regulations that do not have a direct effect on the financial statements but compliance with which may be fundamental to the Group’s ability to operate or to avoid a material penalty. 10.2. Audit response to risks identified As a result of performing the above, we identified the key judgements in the valuation of investment property held for sale and carrying value of inventory as key audit matters related to the potential risk of fraud. The key audit matters section of our report explains the matters in more detail and also describes the specific procedures we performed in response to those key audit matters. In addition to the above, our procedures to respond to risks identified included the following: - reviewing the financial statement disclosures and testing to supporting documentation to assess compliance with provisions of relevant laws and regulations described as having a direct effect on the financial statements; - enquiring of management and the Audit Committee concerning actual and potential litigation and claims; - performing analytical procedures to identify any unusual or unexpected relationships that may indicate risks of material misstatement due to fraud; - reading minutes of meetings of those charged with governance, reviewing internal audit reports and reviewing correspondence with the Guernsey Financial Services Commission; and 731 Independent Auditor’s Report to the Members of Macau Property Opportunities Fund Limited --- Independent Auditor’s Report to the Members of Macau Property Opportunities Fund Limited (continued) - in addressing the risk of fraud through management override of controls, testing the appropriateness of journal entries and other adjustments; assessing whether the judgements made in making accounting estimates are indicative of a potential bias; and evaluating the business rationale of any significant transactions that are unusual or outside the normal course of business. We also communicated relevant identified laws and regulations and potential fraud risks to all engagement team members including internal specialists, and remained alert to any indications of fraud or non-compliance with laws and regulations throughout the audit. Report on other legal and regulatory requirements 11. Corporate Governance Statement The Listing Rules require us to review the directors’ statement in relation to going concern, longer-term viability and that part of the Corporate Governance Statement relating to the Group’s compliance with the provisions of the UK Corporate Governance Code specified for our review. Based on the work undertaken as part of our audit, we have concluded that each of the following elements of the Corporate Governance Statement is materially consistent with the financial statements and our knowledge obtained during the audit: - the directors’ statement with regards to the reasons for preparing the financial statements on a basis other than going concern (set out on page 42); - the directors’ explanation as to its assessment of the Group’s prospects, the period this assessment covers and why the period is appropriate (set out on page 42); - the directors’ statement on fair, balanced and understandable (set out on page 51); - the board’s confirmation that it has carried out a robust assessment of the emerging and principal risks (set out on page 44); - the section of the annual report that describes the review of effectiveness of risk management and internal control systems (set out on page 61); and - the section describing the work of the audit committee (set out on page 59). 12. Matters on which we are required to report by exception 12.1. Adequacy of explanations received and accounting records Under the Companies (Guernsey) Law, 2008 we are required to report to you if, in our opinion: - we have not received all the information and explanations we require for our audit; or - proper accounting records have not been kept by the parent company; or - the financial statements are not in agreement with the accounting records. We have nothing to report in respect of these matters. 13. Other matters which we are required to address 13.1. Auditor tenure Following the recommendation of the audit committee, we were appointed by the Audit Committee to audit the financial statements for the year ending 30 June 2021 and subsequent financial periods. The period of total uninterrupted engagement including previous renewals and reappointments of the firm is 5 years, covering the years ending 30 June 2021 to 30 June 2025. 13.2. Consistency of the audit report with the additional report to the audit committee Our audit opinion is consistent with the additional report to the audit committee we are required to provide in accordance with ISAs (UK). 74 | Independent Auditor’s Report to the Members of Macau Property Opportunities Fund Limited --- # Independent Auditor’s Report to the Members of Macau Property Opportunities Fund Limited (continued) ## 14. Use of our report This report is made solely to the Company’s members, as a body, in accordance with Section 262 of the Companies (Guernsey) Law, 2008. Our audit work has been undertaken so that we might state to the Company’s members those matters we are required to state to them in an auditor’s report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the company and the company’s members as a body, for our audit work, for this report, or for the opinions we have formed. As required by the Financial Conduct Authority (FCA) Disclosure Guidance and Transparency Rule (DTR) 4.1.15R — DTR 4.1.18R, these financial statements will form part of the Electronic Format Annual Financial Report filed on the National Storage Mechanism of the FCA in accordance with DTR 4.1.15R — DTR 4.1.18R. This auditor’s report provides no assurance over whether the Electronic Format Annual Financial Report has been prepared in compliance with DTR 4.1.15R — DTR 4.1.18R. ![img-30.jpeg](img-30.jpeg) David Becker (Senior Statutory Auditor) For and on behalf of Deloitte LLP Recognised Auditor St Peter Port, Guernsey 31 October 2025 75 | Independent Auditor’s Report to the Members of Macau Property Opportunities Fund Limited --- # Consolidated Statement of Financial Position As at 30 June 2025 | | Note | 2025 US$/000 | 2024 US$/000 | | --- | --- | --- | --- | | ASSETS | | | | | Non-current assets | | | | | Investment property | 6 | - | 97,970 | | Deposits with lenders | 21 | - | 320 | | Other receivables | | - | 14 | | | | - | 98,304 | | Current assets | | | | | Assets held for sale | 25 | 62,788 | - | | Inventories | 7 | 32,582 | 35,017 | | Other receivables | 10 | 37 | 72 | | Deposits with lenders | 21 | 1,409 | 4,295 | | Cash and cash equivalents | | 119 | 243 | | | | 96,935 | 39,627 | | Total assets | | 96,935 | 137,931 | | EQUITY | | | | | Capital and reserves attributable to the Company’s equity holders | | | | | Share capital | 12 | 618 | 618 | | Retained earnings | | 16,100 | 30,722 | | Distributable reserves | | 15,791 | 15,791 | | Foreign currency translation reserve | | (1,048) | (740) | | Total equity | | 31,461 | 46,391 | | LIABILITIES | | | | | Non-current liabilities | | | | | Deferred taxation provision | 9 | 2,288 | 4,580 | | Interest-bearing loans | 8 | 4,490 | 51,816 | | | | 6,778 | 56,396 | | Current liabilities | | | | | Taxation provision | 9 | 449 | 316 | | Trade and other payables | 11 | 2,688 | 4,163 | | Interest-bearing loans | 8 | 55,559 | 30,665 | | | | 58,696 | 35,144 | | Total liabilities | | 65,474 | 91,540 | | Total equity and liabilities | | 96,935 | 137,931 | | Net Asset Value per share (US$) | 18 | 0.51 | 0.75 | | Adjusted Net Asset Value per share (US$) | 18 | 0.61 | 1.07 | The accompanying notes on pages 80 to 111 are an integral part of these Consolidated Financial Statements. The Consolidated Financial Statements on pages 76 to 111 were approved by the Board of Directors and authorised for issue on 31 October 2025. ![img-31.jpeg](img-31.jpeg) Mark Huntley Chairman of the Board 31 October 2025 Alan Clifton Chairman of the Audit and Risk Committee 31 October 2025 76 / Financial Statements --- # Consolidated Statement of Comprehensive Income Year ended 30 June 2025 | | Note | 2025 US$'000 | 2024 US$'000 | | --- | --- | --- | --- | | Income | | | | | Rental income | | 952 | 1,494 | | Other income | | 1 | 134 | | Income on sales of inventories | 7 | 3,452 | - | | | | 4,405 | 1,628 | | Expenses | | | | | Cost of sales of inventories | 7 | 2,296 | - | | Net loss on disposal of investment property | 6 | 1,974 | 2,398 | | Net loss from fair value adjustment on investment property | 6 | 9,648 | 12,657 | | Management fee | 20 | 1,084 | 1,200 | | Realisation fees | 20 | - | (7) | | Non-Executive Directors' fees | 19 | 183 | 172 | | Auditors' remuneration | 23 | 208 | 161 | | Property operating expenses | 15 | 922 | 1,169 | | Sales and marketing expenses | 16 | 257 | 95 | | General and administration expenses | 13 | 512 | 480 | | (Gain)/loss on foreign currency translation | | (166) | 106 | | | | (16,918) | (18,431) | | Operating loss for the year | | (12,513) | (16,803) | | Finance income and expenses | | | | | Bank loan interest | 8 | (3,919) | (6,283) | | Other financing costs | 14 | (288) | (291) | | Bank interest received | | 29 | 38 | | | | (4,178) | (6,536) | | Loss for the year before tax | | (16,691) | (23,339) | | Taxation | 9 | 2,069 | 3,719 | | Loss for the year after tax | | (14,622) | (19,620) | | Other Comprehensive Income | | | | | Items that may be reclassified subsequently to profit or loss | | | | | Exchange difference on translating foreign operations | | (308) | 327 | | Total comprehensive loss for the year | | (14,930) | (19,293) | | Loss attributable to: | | | | | Equity holders of the Company | | (14,622) | (19,620) | | Total comprehensive loss attributable to: | | | | | Equity holders of the Company | | (14,930) | (19,293) | | | | 2025 US$ | 2024 US$ | | Basic and diluted loss per ordinary share attributable to the equity holders of the Company during the year | 18 | (0.2365) | (0.3173) | The accompanying notes on pages 80 to 111 are an integral part of these Consolidated Financial Statements. All items in the above statement are derived from discontinued operations. 77 / Financial Statements --- # Consolidated Statement of Changes in Equity Year ended 30 June 2025 | | Note | Share capital US$'000 | Retained earnings US$'000 | Distributable reserves US$'000 | Foreign currency translation reserve US$'000 | Total US$'000 | | --- | --- | --- | --- | --- | --- | --- | | Balance brought forward at 1 July 2024 | 12 | 618 | 30,722 | 15,791 | (740) | 46,391 | | Loss for the year | | - | (14,622) | - | - | (14,622) | | Items that may be reclassified subsequently to profit or loss | | | | | | | | Exchange difference on translating foreign operations | | - | - | - | (308) | (308) | | Total comprehensive loss for the year | | - | (14,622) | - | (308) | (14,930) | | Balance carried forward at 30 June 2025 | 12 | 618 | 16,100 | 15,791 | (1,048) | 31,461 | | | Note | Share capital US$'000 | Retained earnings US$'000 | Distributable reserves US$'000 | Foreign currency translation reserve US$'000 | Total US$'000 | | Balance brought forward at 1 July 2023 | 12 | 618 | 50,342 | 15,791 | (1,067) | 65,684 | | Loss for the year | | - | (19,620) | - | - | (19,620) | | Items that may be reclassified subsequently to profit or loss | | | | | | | | Exchange difference on translating foreign operations | | - | - | - | 327 | 327 | | Total comprehensive loss for the year | | - | (19,620) | - | 327 | (19,293) | | Balance carried forward at 30 June 2024 | 12 | 618 | 30,722 | 15,791 | (740) | 46,391 | The accompanying notes on pages 80 to 111 are an integral part of these Consolidated Financial Statements. 78 / Financial Statements --- # Consolidated Statement of Cash Flows Year ended 30 June 2025 Net cash generated from/(used in) operating activities Cash flows from investing activities Movement in pledged bank balances Net sales proceeds from disposal of investment property Net cash generated from investing activities Cash flows from financing activities Repayment of bank borrowings Interest and bank charges paid Net cash used in financing activities Net movement in cash and cash equivalents Cash and cash equivalents at beginning of year Effect of foreign exchange rate changes Cash and cash equivalents at end of year | Note | 2025 US$'000 | 2024 US$'000 | | --- | --- | --- | | 17 | 423 | (679) | | 21 | 3,206 | 993 | | 6 | 23,303 | 28,480 | | | 26,509 | 29,473 | | | (22,277) | (23,263) | | | (4,634) | (6,457) | | | (26,911) | (29,720) | | | 21 | (926) | | | 243 | 1,118 | | | (145) | 51 | | | 119 | 243 | The accompanying notes on pages 80 to 111 are an integral part of these Consolidated Financial Statements. 79 / Financial Statements --- # Notes to the Consolidated Financial Statements General information Macau Property Opportunities Fund Limited (the “Company”) is a Company incorporated and registered in Guernsey under The Companies (Guernsey) Law, 1994. This law was replaced by the Companies (Guernsey) Law, 2008 on 1 July 2008. The Company is an authorised entity under the Authorised Closed-Ended Investment Schemes Rules and Guidance, 2021 and is regulated by the GFSC. The address of the registered office is given on page 112. The Consolidated Financial Statements for the year ended 30 June 2025 comprise the financial statements of the Company and its subsidiaries (together referred to as the “Group”). The Group has investments in residential property in Macau. These Consolidated Financial Statements have been approved for issue by the Board of Directors on 31 October 2025. ## 1 Summary of significant accounting policies The principal accounting policies applied in the preparation of these Consolidated Financial Statements are set out below. These policies have been consistently applied to all years presented, unless otherwise stated. ## Statement of compliance The financial statements have been prepared in accordance with the International Financial Reporting Standards (“IFRS”), which comprise standards and interpretations approved by the International Accounting Standards Board, together with applicable legal and regulatory requirements of Guernsey Law and the GFSC. ## Basis of preparation The Consolidated Financial Statements have been prepared in accordance with IFRS; applicable legal and regulatory requirements of Guernsey Law and under the historical cost basis, except for current assets held for sale that have been measured at fair value. All other assets and liabilities are carried at amortised cost. The financial statements have been prepared on a basis other than that of a going concern. The preparation of financial statements in conformity with IFRS requires the use of certain critical accounting estimates. It also requires management to exercise its judgement in the process of applying the Group’s accounting policies. The areas involving a higher degree of judgement or complexity, or areas where assumptions and estimates are significant to the financial statements, are disclosed in Note 3. The Consolidated Financial Statements are presented in US Dollars and all values are rounded to the nearest thousand ($’000), except where otherwise indicated. ## Going concern The Group’s business activities, together with the factors likely to affect its future development, performance and position, are set out in the Manager’s Report. The financial position of the Group, its cash flows and its liquidity position are described in the Capital Management section of the Manager’s Report. The financial risk management objectives and policies of the Group and the exposure of the Group to credit risk, market risk and liquidity risk are discussed in Note 2 to the Consolidated Financial Statements. In accordance with provision 30 of the 2018 revision of the UK Corporate Governance Code, (the “UK Code”), and as a fundamental principle of the preparation of financial statements in accordance with IFRS, the Directors have assessed as to whether the Company will continue in existence as a going concern for a period of at least 12 months from signing of the financial statements, which contemplates continuity of operations and the realisation of assets and settlement of liabilities occurring in the ordinary course of business. In view of the progress achieved in respect of the Group’s divestment programme and the expected timeframe over which the remaining assets are expected to be realised, the Board have decided that the financial statements should be prepared on a basis other than that of a going concern. Notwithstanding this, and for the reasons set out below, the Directors, with recommendation from the Audit and Risk Committee, have a reasonable expectation that the Group will be able to realise its assets to meet its liabilities as they fall due for the next twelve months after date of approval of the Annual Report. In reaching its conclusion, the Board have considered the risks that could impact the Group’s liquidity over the period to 31 October 2026. This period represents the period of at least 12 months from the date of signing of the Annual Report. 80 / Financial Statements --- # Notes to the Consolidated Financial Statements (continued) 1. Summary of significant accounting policies (continued) ## Going Concern (continued) As part of their assessment the Audit and Risk Committee highlighted the following key considerations: 1. Whether the Group can repay or refinance its loan facilities to discharge its liabilities over the period to 31 October 2026 2. Extension of life of the Company 1. Whether the Group can repay or refinance its loan facilities to discharge its liabilities over the period to 31 October 2026 As at 30 June 2025, the Group has major debt obligations to settle during the going concern period (further details as disclosed in Note 8) being: i) principal repayments for The Waterside loan facility of US$45.6 million; ii) principal repayments for The Fountainside loan facility of US$0.7 million; iii) principal repayments for the Penha Heights Banco Tai Fung loan facility of US$2.6 million; and iv) principal repayments for the Penha Heights BCM Bank loan facility of US$7.6 million. ## The Waterside and The Fountainside Shaped by changing economic uncertainties and cautious investor sentiment, it is assumed that the Group can achieve a conservative modest rate of The Waterside unit sales from July 2025 to October 2026, generating approximately US$49.7 million of net proceeds based on the latest available valuations and pricing strategy. This would be sufficient to cover the instalments for both The Waterside and The Fountainside facilities due for repayment in the upcoming twelve months period as well as the Group's operating expenses. Loan repayments of US$13.5 million were made to Hang Seng Bank for The Waterside facilities post year end to October 2025. This was predominantly settled through post year end disposals to October 2025, which included five units of The Waterside and one villa of The Fountainside, amounting to US$10.3 million. As of end of October 2025, one unit of the Waterside and one villa of The Fountainside are subject to completion. Throughout the year ended 30 June 2025 and up to the date of issuance of the Annual Report, breaches in the loan to value covenants with Hang Seng Bank were noted and reported as appropriate. Frequent dialogue has been maintained with Hang Seng Bank including acknowledgment of breaches, discussions about covenant restoration plan and accelerated asset disposal targets. Management anticipates that proceeds from the sale of The Waterside units and The Fountainside villas, based on achieved sales velocity, will cover the associated debt obligations and contribute to reinstating the LTV to a more acceptable level as of the Annual Report date. ## Penha Heights The loan repayments for the two Penha Heights facilities that would become due during the going concern period total US$10.2 million. Subsequent to year end, the loan facility with BCM Bank for Penha Heights has been extended to January 2026. Up to US$1.9 million will be due on or before December 2025 on Penha Heights bank facilities. It is anticipated that these facilities would be settled from sales proceeds of Penha Heights or via other financing sources as necessary. In light of the continued challenges faced by the Group, it is considering all options having received indications of support from some investors. ## Equity Capital Raise The Company intends to proceed with a modest equity capital raise which, if successful, will supplement sales to ensure that debt repayments are met as well as meeting short-term working capital obligations. Should this be successful it is deemed to deliver a better outcome for investors. Should the capital raise be unsuccessful, however, the options for the Company will be adverse in terms of the overall outcome. The possibility will exist, for example, that the Company loses possession of Penha Heights as a further bank default is possible. The Company may remain viable subject to the continuing divestment of assets but it will undoubtedly be significantly impacted. ## Relationship with Lenders The Manager is responsible for managing the Group's relationships with its lenders, ensuring continuous monitoring of loan terms and covenant compliance. Any exceptions and breaches are promptly reported to lenders, and relevant matters are regularly communicated to the Board. The Group has actively tracked the compliance status of all loan covenants and maintained frequent, transparent engagement with its lenders, who have consistently shown strong support over the years. However, it is worth noting that recent shifts in the regional lending landscape have led to more stringent regimes of loan facility renewals and credit assessments. As a result, while a solid track record of lender relationships remains valuable, it may no longer be the sole determinant in banks' evaluations of loan facilities. 81 / Financial Statements --- # Notes to the Consolidated Financial Statements (continued) 1. Summary of significant accounting policies (continued) ## Going Concern (continued) 1. Whether the Group can repay or refinance its loan facilities to discharge its liabilities over the period to 31 October 2026 (continued) Relationship with Lenders (continued) It is expected that the debt obligations that will become due for settlement over the going concern period are to be covered by proceeds from selling properties. In the case of the BCM Bank loan facility, this is expected to be achieved by a sale of Penha Heights or a capital raise. The fact that all banking facilities of the Group have been successfully renewed previously, with the loan-to-value ratios of the facilities carefully monitored and communicated under the respective loan agreements, the Board has reasonable expectations that the Group would be able to meet its debt obligations during the going concern period. Notwithstanding the above, it remains uncertain that adequate proceeds will be generated from sales of properties to settle payment obligations over the going concern period, and any necessary refinancing of debt obligations would still be subjected to lenders' approval. Due to the ongoing challenging market environment, the Group may experience difficulties in achieving sales objectives. If sales proceeds are not adequate to meet payment obligations or alternative financing is not secured in a timely manner, the Group may face liquidity constraints that could adversely impact its ability to meet financial obligations as they fall due or the banks could call in the loans, take the investment assets as security or apply for legal action to put the relevant special purpose vehicle into liquidation and potentially the Group into insolvency. 2. Extension of life of the Company After the Ordinary Resolution was passed at the Annual General Meeting ("AGM") of the Company in its 2024 AGM to extend the Fund's life until the 2025 AGM (expected to be held by December 2025), the Directors assessed the impact of the continuation vote on the Group's operations. In line with Article 38 of the Articles of Incorporation, the Company will put forward a resolution for its continuation at the next AGM. If any continuation resolution is not passed, the Directors are required to formulate proposals to be put to Members to reorganise, unitise, reconstruct or wind up the Company. The Directors expect to receive continuation support from major shareholders based upon ongoing communications and note that 50% of shareholder support is required to ensure continuation. It is likely that returns from the sale of properties would be significantly lower, as endorsed by the recent forced sales imposed on developers, if the Company was forced to sell as a result of a failed continuation vote from shareholders and it is therefore commercially sensible for the Company to continue in business. ## Going Concern Conclusion After careful consideration and based on the reasons outlined above, including the Manager's continuing dialogue with lenders and shareholders, the Directors have a reasonable expectation that the Group is able to realise its assets to meet its liabilities as they fall due for the next twelve months after date of approval of the Annual Report. However, in view of the pace of progress achieved in respect of the Group's divestment programme and the expected timeframe to December 2026 over which the remaining assets are expected to be realised, the financial statements have been prepared on a basis other than that of a going concern. ## New and amended standards and interpretations applied The following amendments to existing standards and interpretations were effective for the year ended 30 June 2025 and therefore were applied in the current year but they did not have a material impact on the Group: - Amendments to IFRS 7: Financial Instruments: Disclosures - Amendments to IAS 1: Classification of Liabilities as Current or Non-current - Amendments to IAS 1: Classification of debt with covenants - Amendments to IFRS 16: Leases - Amendments to IAS 7: Statement of Cash Flows ## New and amended standard and interpretation not applied The following new and amended standards and interpretations in issue are applicable to the Group but are not yet effective and have not been adopted by the Group: - Amendments to IAS 21: The Effects of Changes in Foreign Exchange Rates (effective 1 January 2025) - Amendments to IFRS 7: Financial Instruments: Disclosures (effective 1 January 2026) - Amendments to IFRS 9: Financial Instruments (effective 1 January 2026) - Annual Improvements to IFRS Accounting Standards (effective 1 January 2026) - IFRS 18: Presentation and Disclosure in Financial Statements (effective 1 January 2027) - IFRS 19: Subsidiaries without Public Accountability: Disclosures (effective 1 January 2027) 82 / Financial Statements --- # Notes to the Consolidated Financial Statements (continued) ## 1. Summary of significant accounting policies (continued) ### New and amended standard and interpretation not applied (continued) IFRS 18: Presentation and Disclosure in Financial Statements: This Standard replaces IAS 1: Presentation of Financial Statements. It carries forward many requirements from IAS 1 unchanged, effective for periods commencing 1 January 2027. The new accounting standard introduces the following key new requirements: - Entities are required to classify all income and expenses into five categories in the statement of profit and loss, namely operating, investing, financing, discontinued operations and income tax categories. - Entities are also required to present a newly-defined operating profit subtotal. Entities net profit will not change as a result of applying IFRS 18. - Management-defined performance measures (MPMs) are disclosed in a single note in the financial statements. - Enhanced guidance is provided on how to group information in the financial statements. - All entities are required to use the operating profit subtotal as the starting point for the statement of cash flows when presenting operating cash flows under the indirect method. The Company is still in the process of assessing the impact of the new accounting standard, particularly with respect to the structure of the Company’s statement of comprehensive income, the statement of cash flows and the additional disclosures required for MPMs. Other standards, amendments or interpretations in issue but not yet effective, except for IFRS 18, are not expected to have a material impact on the entity in the current or future reporting periods or on foreseeable future transactions. ### Consolidation The Consolidated Financial Statements incorporate the financial statements of the Company and all SPVs controlled by the Company and its subsidiaries. Control is achieved when the Group is exposed, or has rights, to variable returns from its involvement with the investee and has the ability to affect those returns through its power over the investee. The financial statements of subsidiaries are included in the Consolidated Financial Statements from the date control commences until the date control ceases. Certain of the Company’s subsidiaries have non-coterminous year-ends. These companies are consolidated on the basis of actual transactions occurring within the financial year. All intra-group transactions, balances, income and expenses are eliminated on consolidation. ### Segment reporting A business segment is a group of assets and operations engaged in providing products or services that are subject to risks and returns different from those of other business segments. A geographical segment is engaged in providing products or services within a particular economic environment that are subject to risks and returns different from those segments operating in other economic environments. The Directors are of the opinion that the Group is engaged in a single segment of business, being property investment and related business. This segment includes residential properties in Macau. Please refer to Note 5 for segment reporting. ### Foreign currency translation a) Presentation and functional currency The Consolidated Financial Statements are shown in US Dollars (“US$”) which is the Group’s presentation currency. The Group’s functional currency is Hong Kong Dollars (“HKD”). 83 / Financial Statements --- # Notes to the Consolidated Financial Statements (continued) ## 1. Summary of significant accounting policies (continued) ### Foreign currency translation (continued) #### b) Transactions and balances Foreign currency transactions are recorded in the respective functional currencies of group entities, Macanese Patacas and Hong Kong Dollars (the "functional currencies"), using the exchange rates prevailing at the date of the transaction. Foreign exchange gains and losses resulting from the settlement of such transactions and from the translation at year-end exchange rates of monetary assets and liabilities denominated in foreign currencies are recognised in the Consolidated Statement of Comprehensive Income. Non-monetary items that are measured in terms of historical cost in a foreign currency are translated using the exchange rates at the date of the initial transaction. Non-monetary items measured at fair value in a foreign currency are translated using the exchange rates at the date when the fair value is determined. The gain or loss arising on translation of non-monetary items measured at fair value is treated in line with the recognition of gain or loss on change in fair value of the item (i.e. translation differences on items whose fair value gain or loss is recognised in other comprehensive income or profit or loss are also recognised in other comprehensive income or profit or loss). #### c) Group companies The results and financial position of all the Group entities that have a functional currency different from the presentation currency are translated into the presentation currency as follows: i) assets and liabilities for each statement of financial position are translated at the closing rate at the date of that statement of financial position; ii) income and expenses for each statement of comprehensive income are translated at average exchange rates; iii) all resulting exchange differences are recognised as a separate component of other comprehensive income; and iv) on disposal of a foreign operation, the component of other comprehensive income relating to that particular foreign operation is recognised in profit or loss. ### Foreign currency translation reserve Foreign currency differences arising on translation of foreign operations into the Group's presentation currency are recognised in other comprehensive income and presented in the foreign currency translation reserve in equity. ### Investment property Property that is held for long-term rental yields or for capital appreciation or both, and that is not occupied by companies in the consolidated Group, is classified as investment property. Investment property also includes property that is being constructed or developed for future use as investment property. Investment property is measured initially at its cost, including related transaction costs. Subsequent expenditure is capitalised to the asset's carrying amount only when it is probable that future economic benefits associated with the item will flow to the Group and the cost of the item can be measured reliably. All other repairs and maintenance costs are charged to the Consolidated Statement of Comprehensive Income during the financial period in which they are incurred. After initial recognition, investment property is carried at fair value. The Group must be able to access the principal or the most advantageous market at the measurement date. The fair value of an asset or a liability is measured using the assumptions that market participants would use when pricing the asset or liability, assuming that market participants act in their economic best interest. There are no contractual obligations to purchase, construct or develop investment property for repairs, maintenance or enhancements. An investment property is derecognised upon disposal or when the investment property is permanently withdrawn from use and no future economic benefits are expected from the disposal. Any gain or loss arising on derecognition of the property (calculated as the difference between the net disposal proceeds and the carrying amount of the asset) is included in profit or loss in the period in which the property is derecognised. 84 / Financial Statements --- # Notes to the Consolidated Financial Statements (continued) ## 1. Summary of significant accounting policies (continued) ### Current assets held for sale Current assets classified as held for sale are measured at fair value in accordance with the exemption criteria under clause 5d) of IFRS 5 Non-current Assets Held for Sale and Discontinued Operations as they are current assets accounted for in accordance with the fair value model in IAS 40 Investment Property. Current assets are classified as held for sale if their carrying amount will be recovered through a sale transaction rather than through continuing use. This condition is regarded as met only when the sale is highly probable and the asset is available for immediate sale in its present condition. The Group must be committed to the sale which should be expected to qualify for recognition as a completed sale within one year from the date of classification. ### Fair value measurements The Group measures certain financial instruments, and non-financial assets such as investment property and current assets held for sale, at fair value at the end of each reporting period. Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The fair value measurement is based on the presumption that the transaction to sell the asset or transfer the liability takes place either: - in the principal market for the asset or liability; or - in the absence of a principal market, in the most advantageous market for the asset or liability. A fair value measurement of a non-financial asset takes into account a market participant's ability to generate economic benefits by using the asset in its highest and best use, or by selling it to another market participant that would use the asset in its highest and best use. The Group uses valuation techniques that are appropriate in the circumstances and for which sufficient data are available to measure fair value, maximising the use of relevant observable inputs and minimising the use of unobservable inputs significant to the fair value measurement as a whole: Level 1 — inputs that reflect unadjusted quoted prices in active markets for identical assets or liabilities that the Group has the ability to access at the measurement date; Level 2 — inputs other than quoted prices included in Level 1 that are observable for the asset or liability, either directly (that is, prices) or indirectly (that is, derived from prices); and Level 3 — inputs for the asset or liability that are not based on observable market data (that is, unobservable inputs). For assets and liabilities that are recognised in the financial statements on a recurring basis, the Group determines whether transfers have occurred between levels in the hierarchy by re-assessing categorisation (based on the lowest level input that is significant to the fair value measurement as a whole) at the end of each reporting period. ### Fair value of investment property and current assets held for sale Fair value is based on active market prices, adjusted, if necessary, for any difference in the nature, location or condition of the specific investment property. If this information is not available, the Group uses alternative valuation methods such as recent prices on less active markets or discounted cash flow projections. Valuations are prepared semi-annually by Savills (Macau) Limited ("Savills"), whose valuers hold recognised and relevant professional qualifications and have recent experience in the location and category of the investment properties being valued. Investment property that is being redeveloped for continuing use as investment property continues to be measured at fair value, if the fair value is considered to be reliably measurable. Changes in fair values are recorded in the Consolidated Statement of Comprehensive Income. ### Inventories Properties and land that are being held or developed for future sale are classified as inventories. In the opinion of the Board, inventories are held with a view to short term sale in the ordinary course of business. They are individually carried at the lower of cost and net realisable value ("NRV"). NRV is the estimated selling price in the ordinary course of business less costs to complete redevelopment and selling expenses. Cost is the acquisition cost together with subsequent capital expenditure incurred, including capitalised interest where relevant. ### Disposals Disposals are recognised when the risks and rewards of ownership of an asset transfer to the purchaser. 85 / Financial Statements --- 86 / Financial Statements # Notes to the Consolidated Financial Statements (continued) ## 1. Summary of significant accounting policies (continued) ### Borrowing costs Borrowing costs incurred for the purpose of acquiring, constructing or producing a qualifying asset, such as investment property or inventory, are capitalised as part of the cost. Borrowing costs are capitalised while the acquisition or construction is actively underway, and cease once the asset is substantially complete, or suspended if the development is suspended. All other borrowing costs are expensed in the period in which they occur. Borrowing costs consist of interest and other costs that an entity incurs in connection with the borrowing of funds. The interest capitalised is calculated using the Group's weighted average cost of borrowing after adjusting for borrowing associated with specific developments. Where borrowings are associated with specific developments, the amount capitalised is the gross interest incurred on those borrowings less any investment income arising from their temporary investment. ### Impairment #### Financial assets The Group holds only other receivables with no financing component and which have maturities of less than 12 months at amortised cost and deposits with lenders which represent restricted cash in relation to borrowing. The liquidity of this deposit with lenders follow the maturity of the borrowings. As such, the Group has chosen to apply an approach similar to the simplified approach for Expected Credit Losses (ECL) under IFRS 9 to all its other receivables. Therefore, the Group does not track changes in credit risk, but instead, recognises a loss allowance based on lifetime ECLs at each reporting date. The Group's approach to ECLs reflects a probability-weighted outcome, the time value of money and reasonable and supportable information that is available without undue cost or effort at the reporting date about past events, current conditions and forecasts of future economic conditions. #### Non-financial assets The carrying amounts of the Group's non-financial assets, other than investment property are reviewed at each reporting date to determine whether there is any indication of impairment. If any such indication exists, then the asset's recoverable amount is estimated. The recoverable amount of an asset or cash-generating unit is the greater of its value in use and its fair value less costs to sell. ### Leases Leases in which the Group does not transfer substantially all the risks and benefits of ownership to a lessee are classified as operating leases. Initial direct costs incurred in negotiating an operating lease are added to the carrying amount of the leased asset and recognised over the term of the lease on the same basis as rental income. Contingent rents are recognised as revenue in the period in which they are earned. The Group regularly reviews and assesses the risk associated with the leases of the underlying assets. ### Financial instruments #### i) Classification ##### Financial assets The Group classifies its financial assets as subsequently measured at amortised cost or measured at fair value through profit or loss on the basis of both: - The entity's business model for managing the financial assets - The contractual cash flow characteristics of the financial assets Financial assets measured at amortised cost Deposits with lenders and other receivables are measured at amortised cost if it is held within a business model whose objective is to hold financial assets in order to collect contractual cash flows and its contractual terms give rise on specified dates to cash flows that are solely payments of principal and interest on the principal amount outstanding. ##### Financial liabilities Financial liabilities measured at amortised cost This category includes all financial liabilities, other than those measured at FVPL. The Group includes in this category interest-bearing loans and trade and other payables. #### ii) Recognition The Group recognises a financial asset or a financial liability when it becomes a party to the contractual provisions of the instrument. Purchases or sales of financial assets that require delivery of assets within the time frame generally established by regulation or convention in the market place (regular way trades) are recognised on the trade date, i.e., the date that the Group commits to purchase or sell the assets. --- # Notes to the Consolidated Financial Statements (continued) ## 1. Summary of significant accounting policies (continued) ### Financial instruments (continued) #### iii) Initial measurement Financial assets and liabilities (other than those classified as at FVPL) are measured initially at their fair value plus any directly attributable incremental costs of acquisition or issue. #### iv) Subsequent measurement After initial measurement, the Company’s deposits with lenders and other receivables are measured at amortised cost using the effective interest method less any allowance for impairment. There has been no impairment in either the current or prior year. Gains and losses are recognised in profit or loss when the deposits with lenders and other receivables are derecognised or impaired, as well as through the amortisation process. Financial liabilities, other than those classified as at FVPL, are measured at amortised cost using the effective interest method. Gains and losses are recognised in profit or loss when the liabilities are derecognised, as well as through the amortisation process. The effective interest method is a method of calculating the amortised cost of a financial asset or a financial liability and of allocating and recognising the interest income or interest expense in profit or loss over the relevant period. The effective interest rate is the rate that exactly discounts estimated future cash payments or receipts through the expected life of the financial asset or financial liability to the gross carrying amount of the financial asset or to the amortised cost of the financial liability. When calculating the effective interest rate, the Group estimates cash flows considering all contractual terms of the financial instruments, but does not consider ECL. The calculation includes all fees paid or received between parties to the contract that are an integral part of the effective interest rate, transaction costs and all other premiums or discounts. ### Deposits with lenders Deposits with lenders comprise cash held at bank that is pledged for loan covenants and are recognised as current assets. ### Cash and cash equivalents Cash and cash equivalents in the Consolidated Statement of Financial Position comprise cash at bank and on hand and demand deposits with an original maturity of three months or less and other short-term, highly-liquid investments that are readily convertible to a known amount of cash and are subject to an insignificant risk of changes in value. For the purpose of the Consolidated Statement of Cash Flows, cash and cash equivalents consist of cash and cash equivalents as defined above. Deposits with lenders are excluded and not considered cash and cash equivalents. ### Share capital Shares are classified as equity when there is no obligation to transfer cash or other assets. Shares issued by the Company are recorded based upon the proceeds received, net of incremental costs directly attributable to the issue of new shares. ### Revenue recognition Revenue is measured based on the consideration to which the Group expects to be entitled in a contract with the customers, and includes rental income and income from property trading. Revenue from sales of completed properties and properties under development is within the scope of IFRS 15 and revenue from rental income is within the scope of IFRS 16. There are no significant assumptions or judgements involved in revenue recognition. The Group earns revenue from acting as lessor in operating leases which do not transfer substantially all of the risks and rewards incidental to ownership of an investment property. No subleases are currently held. ### Rental income Rental income from operating leases is recognised as income on a straight-line basis over the lease term. When the Group provides incentives to its customers, the cost of incentives is recognised over the lease term, on a straight-line basis, as a reduction of rental income. For investment property held primarily to earn rental income, the Group enters as a lessor into lease agreements that fall within scope of IFRS 16. ### Sale of completed property Revenue from sale of completed properties is recognised when effective control of ownership of the properties is transferred to the buyer, which is on unconditional exchange of contracts and change of title on the property. Where the sales contract stipulates payments that cross over reporting period, revenue is recognised over the period of the contract by reference to the progress towards complete satisfaction of each performance obligation. This is determined based on the actual cost incurred to date to estimated total cost for each contract. The proceeds from disposal are recognised in income and net assets disposed of are recognised in cost of sales in expenses. 87 / Financial Statements --- # Notes to the Consolidated Financial Statements (continued) ## 1. Summary of significant accounting policies (continued) ### Revenue recognition (continued) #### Sale of property under development Where property is under development and an agreement has been reached to sell such property when construction is complete, and where the Directors determine the pre-sale to constitute the sale of a completed property, revenue is recognised when the significant risks and rewards of ownership of the real estate have been transferred to the buyer, which is on the unconditional exchange of contracts and change of title on the property. Where the sales contract stipulates payments that cross over reporting periods, revenue is recognised as the satisfaction of performance obligations is completed. #### Sale of subsidiary Revenue from the sale of a subsidiary is recognised when effective control of ownership of the subsidiary is transferred to the buyer. The sale of the subsidiary is regarded as a loss of control under IFRS 10 with all assets and liabilities of the subsidiary derecognised at the date control is lost, the fair value of the consideration received from the transaction compared to the net assets of the subsidiary and the resulting net income or expense of the transaction recorded in the income statement. ### Borrowings Borrowings are recognised initially at fair value, net of transaction costs of the loan to the extent that it is probable that some or all of the facility will be drawn down and are subsequently measured at amortised cost using the effective interest method. Borrowings are classified as current liabilities, unless the Group has an unconditional right to defer settlement of the liability for at least 12 months after the date of the Consolidated Statement of Financial Position. ### Offsetting Financial assets and financial liabilities are offset and the net amount is reported in the statement of financial position if there is a currently enforceable legal right to offset the recognised amounts and there is an intention to settle on a net basis, to realise the assets and to settle the liabilities simultaneously. ### Finance income and expenses Interest income is recognised using the effective interest rate method in the Consolidated Statement of Comprehensive Income. Finance costs comprise interest expense on borrowings. Interest expense is recognised using the effective interest rate method in the Consolidated Statement of Comprehensive Income. ### Distributable reserves Distributable reserves may be legally paid out in the form of a dividend. Payments to shareholders from reserves can be seen as a distribution of accumulated profit. In accordance with the Listing Prospectus and under Guernsey law, on 7 June 2006 an application was made to the Royal Court of Guernsey to have the share premium cancelled and re-designated as a distributable reserve. ### Foreign currency translation reserve The foreign currency translation reserve comprises all foreign exchange differences arising from the translation of the financial statements of foreign operations. ### Taxes #### Current income tax Current income tax assets and liabilities are measured at the amount expected to be recovered from or paid to taxation authorities. The tax rates and tax laws used to compute the amount are those that are enacted or substantively enacted by the reporting date. Current income tax relating to items recognised directly in equity is recognised in equity and not in the Consolidated Statement of Comprehensive Income. Management periodically evaluates positions taken in tax returns with respect to situations in which applicable tax regulations are subject to interpretation and establishes provisions where appropriate. #### Deferred income tax Deferred income tax is provided using the liability method on all temporary differences at the reporting date between the tax basis of assets and liabilities and their carrying amounts for financial reporting purposes, except where the timing of the reversal of the temporary differences can be controlled by the Group and it is probable that the temporary differences will not reverse in the foreseeable future. 88 / Financial Statements --- # Notes to the Consolidated Financial Statements (continued) ## 1. Summary of significant accounting policies (continued) ### Taxes (continued) **Deferred income tax (continued)** Deferred income tax assets are recognised only to the extent that it is probable that taxable profit will be available against which deductible temporary differences, carried forward tax credits or tax losses can be utilised. Deferred income tax assets and liabilities are measured at the tax rates that are expected to apply to the year when the asset is realised or the liability is settled, based on tax rates (and tax laws) that have been enacted or substantively enacted at the reporting date. Deferred income tax relating to items recognised directly in equity is recognised in equity and not in the Consolidated Statement of Comprehensive Income. As a result of the discussion of the IFRS Interpretations Committee in its July 2014 meeting relating to deferred taxation for a single asset held by a corporate wrapper, the Group has recognised the deferred tax liability for the taxable temporary timing difference relating to the investment property carried at fair value. ## 2. Financial risk management, policies and objectives The Group’s activities expose it to a variety of financial risks: market risk (including foreign exchange risk, cash flow and fair value interest rate risk), credit risk and liquidity risk. The Board of Directors provides written principles for overall risk management, as well as written policies covering specific areas, such as foreign exchange risk, interest rate risk and liquidity risk. ### Market risk Market risk is the risk that the fair value of future cash flows of a financial instrument will fluctuate as a result of changes in market prices, whether caused by factors specific to an individual financial instrument or all factors affecting all financial instruments traded in the market including foreign exchange risk, equity price risk and cash flow and fair value interest rate risk as detailed below. The Group’s market risk is managed by the Manager in accordance with policies and procedures in place. The Group’s overall market position is monitored on a quarterly basis by the Board of Directors. Sensitivities to market risks included below are based on a change in one factor while holding all other factors constant. In practice, this is unlikely to occur and changes in some of the factors may be correlated, for example, changes in interest rates and changes in foreign currency rates. ### a) Foreign exchange risk The Group operates internationally and is exposed to foreign exchange risk arising from various currency exposures. Foreign exchange risk arises from future commercial transactions, recognised monetary assets and liabilities and net investments in foreign operations. The Group’s policy is not to enter into any currency hedging transactions. The tables below summarise the Group’s exposure to foreign currency risk as at 30 June 2025 and 30 June 2024. The Group’s financial assets and liabilities are included in the table, categorised by their currency at their carrying amount in US$’000. In the current economic climate, management’s assessment of a reasonable possible change in foreign exchange rates would be up to a 1% increase/decrease for Hong Kong Dollar (“HK$”)/US$, due to the HK$ being pegged to the US$, and up to a 10% increase/decrease for all other currencies. The following table presents financial assets and liabilities denominated in foreign currencies held by the Group as at 30 June 2025 and 30 June 2024, and can be used to monitor foreign currency risk as at that date. At 30 June 2025, if Sterling weakened/strengthened by 10% against US$ with all other variables held constant, the loss for the year would have been US$34,000 lower/higher (2024: US$26,000 lower/higher). The HK$ is pegged to the US$ with the Hong Kong Monetary Authority pledging to keep the exchange rate within a trading band of 5 Hong Kong cents either side of HK$7.80 per dollar. At present the rate is HK$7.85 per dollar so there is no downward risk while the currency peg remains in place. The foreign exchange risk is considered minimal and as such the Company does not actively manage against this risk. If the HK$ weakened/strengthened by 1% against the US$ with all other variables held constant, the net assets and movement in foreign currency translation reserve would have been US$603,000 higher/lower (2024: US$809,000 higher/lower). Any movement would have no other effect on the remaining equity components of the Group. There are no material transactions that would have effect on the profit/loss for the year. 89 / Financial Statements --- # Notes to the Consolidated Financial Statements (continued) ## 2. Financial risk management, policies and objectives (continued) ### Market risk (continued) #### a) Foreign exchange risk (continued) The Macanese Patacas (“MOP”) is fixed to the HK$ at a rate of MOP:HK$ of 1.03. Due to the low level of assets held in this currency, a 10% change in rate would not have a significant effect on the Consolidated Financial Statements. As the HK$ is pegged to the US$ and the MOP is fixed to the US$ the foreign exchange risk of these currencies is considered minimal as under the normal course of business the Group has minor exposure to other currencies. Movements in other currencies would not have a significant impact on the Consolidated Financial Statements. | As at 30 June 2025 | US$ US$’000 | £ US$’000 | HK$ US$’000 | Other currencies US$’000 | Total US$’000 | | --- | --- | --- | --- | --- | --- | | Other receivables (excluding prepayments) | – | – | – | 13 | 13 | | Cash and cash equivalents | 1 | 1 | 108 | 9 | 119 | | Deposits with lenders | – | – | 1,409 | – | 1,409 | | Total financial assets* | 1 | 1 | 1,517 | 22 | 1,541 | | Trade and other payables | 513 | 344 | 1,797 | 34 | 2,688 | | Interest-bearing loans | – | – | 60,049 | – | 60,049 | | Total financial liabilities | 513 | 344 | 61,846 | 34 | 62,737 | | Net financial position | (512) | (343) | (60,329) | (12) | (61,196) | | As at 30 June 2024 | US$ US$’000 | £ US$’000 | HK$ US$’000 | Other currencies US$’000 | Total US$’000 | | Other receivables (excluding prepayments) | – | – | – | 18 | 18 | | Cash and cash equivalents | 1 | 1 | 235 | 6 | 243 | | Deposits with lenders | – | – | 4,615 | – | 4,615 | | Total financial assets | 1 | 1 | 4,850 | 24 | 4,876 | | Trade and other payables | 575 | 265 | 3,034 | 289 | 4,163 | | Interest-bearing loans | – | – | 82,762 | – | 82,762 | | Total financial liabilities | 575 | 265 | 85,796 | 289 | 86,925 | | Net financial position | (574) | (264) | (80,946) | (265) | (82,049) | * Investment property, current assets held for sale and inventories are in MOP and have been excluded from the above table because the HK$ is pegged to the US$ and the MOP is fixed to the US$, therefore the foreign exchange risk of these currencies is considered minimal as under the normal course of business the Group has minor exposure to other currencies. 90 / Financial Statements --- # Notes to the Consolidated Financial Statements (continued) ## 2. Financial risk management, policies and objectives (continued) ### Market risk (continued) #### b) Cash flow and fair value interest rate risk The Group’s interest rate risk is managed by the Manager, in accordance with policies and procedures in place and can be mitigated through the use of interest rate swaps. The Group only has exposure to floating interest rates as at 30 June 2025. The Manager has assessed the interest rate risk as not being significant enough to warrant management through the use of interest rate swaps during either the current or prior years. The Group’s overall positions and exposures are monitored on a quarterly basis by the Board of Directors. If interest rates had been 500 bps higher/lower and all other variables were held constant, the Group’s loss for the year would have increased/decreased by US$2,926,000 (2024: loss for the year increased/decreased by US$3,895,000 (based on the interest bearing net financial liability per the table below). This is mainly due to the Group’s exposure to interest-bearing loans. The following table details the Group’s exposure to floating interest rates: As at 30 June 2025 - Other receivables (excluding prepayments) - Cash and cash equivalents - Deposits with lenders Total financial assets - Trade and other payables - Interest-bearing loans Total financial liabilities As at 30 June 2024 - Other receivables (excluding prepayments) - Cash and cash equivalents - Deposits with lenders Total financial assets - Trade and other payables - Interest-bearing loans Total financial liabilities | Interest bearing US$’000 | Non-interest bearing US$’000 | Total US$’000 | | --- | --- | --- | | — | 13 | 13 | | 119 | — | 119 | | 1,409 | — | 1,409 | | 1,528 | 13 | 1,541 | | — | 2,688 | 2,688 | | 60,049 | — | 60,049 | | 60,049 | 2,688 | 62,737 | | Interest bearing US$’000 | Non-interest bearing US$’000 | Total US$’000 | | --- | --- | --- | | — | 18 | 18 | | 243 | — | 243 | | 4,615 | — | 4,615 | | 4,858 | 18 | 4,876 | | — | 4,163 | 4,163 | | 82,762 | — | 82,762 | | 82,762 | 4,163 | 86,925 | The Group has no exposure to fixed interest rates. 91 / Financial Statements --- # Notes to the Consolidated Financial Statements (continued) ## 2. Financial risk management, policies and objectives (continued) ### Credit risk Credit risk is the risk that a counterparty to a financial instrument will fail to discharge an obligation or commitment that it has entered into with the Group. The Group is exposed to credit risks from both its leasing activities and financing activities, including deposits with banks and financial institutions. The Group's main exposure to credit risk is its cash balances with banks. This risk is mitigated through using banks with a high credit rating. The Group's cash and cash equivalents and deposits with lenders are all held with investment grade banks and the majority are held with a bank with a credit rating of A or higher. The Group's cash and cash equivalents have the following ratings from Fitch and Moody's Ratings: | Credit Rating | 2025 US$'000 | 2024 US$'000 | | --- | --- | --- | | AA- | 117 | 226 | | A+ | — | 2 | | A | 2 | 9 | | BBB+ | — | 6 | | | 119 | 243 | The Group's deposits with lenders with the following ratings from Fitch and Moody's Ratings: | Credit Rating | 2025 US$'000 | 2024 US$'000 | | --- | --- | --- | | AA- | 1,133 | 4,295 | | BBB+ | 276 | 320 | | | 1,409 | 4,615 | The Group is exposed to loss of rental income and increase in costs, such as legal fees, if tenants fail to meet their payment obligations under their leases. The Group seeks to mitigate default risk by diversifying its tenant base and requiring deposits or guarantees from banks or parent companies, where there is a perceived credit risk or in accordance with prevailing market practice. All of the Group's major tenants have met their rental requirements within the terms of arrangement and no material receivables which are past due have been impaired. The maximum exposure to credit risk at the reporting date is the carrying value of each class of financial asset. The Group's financial assets subject to the ECL model within IFRS 9 are cash and cash equivalents, deposits with lenders and other receivables. There is not considered to be any concentration of credit risk within these assets. The amount of ECL on cash and cash equivalents and deposit with lenders are considered to be US$nil considering the credit quality as indicated on the credit risk tables. Other receivables are receivables from counterparties of minimal credit default risk and ECL is expected to be US$nil. None of the Group's financial assets are past their due date as at the current or prior year end. ### Liquidity risk The Group adopts a prudent approach to liquidity management and aims to maintain sufficient cash reserves and borrowings to meet its obligations. 92 / Financial Statements --- # Notes to the Consolidated Financial Statements (continued) ## 2. Financial risk management, policies and objectives (continued) ### Liquidity risk (continued) It is anticipated that the remaining debt obligations that are due over the going concern period will be settled from sales proceeds that are to be generated from the ongoing divestments or the Group will need to arrange refinancing if necessary, see the Going Concern section in Note 1. The Manager is responsible for the relationship with the Group's lenders for monitoring compliance with loan terms and covenants and reporting to the Board on a regular basis all key matters arising. The Manager also maintains good relationships with other banks and explores refinancing options as part of its market function and contingency planning. Throughout the year ended 30 June 2025 and up to the date of issuance of the financial statements, the Group monitors loan covenants on an on-going basis, reports exceptions to lenders as appropriate and has maintained frequent dialogue with all lenders including solutions and plans for loan covenant. While lenders have indicated continued support for the Group, the underlying property loans refinancing outcomes remain subject to market conditions and lender assessments. Deposits amounting to US$1,409,000 (2024: US$4,615,000) have been pledged to secure banking facilities, of which US$Nil (2024: US$320,000) relates to long-term banking facilities; thus US$1,409,000 is classified as current assets (2024: US$4,295,000 as current assets and US$320,000 as non-current assets). Pledged bank balances represent deposits pledged to the banks to secure the banking facilities granted to the Group. As at 30 June 2025, the Group has term loan facilities with Hang Seng Bank, Banco Tai Fung and Banco Comercial de Macau, S. A. ("BCM Bank") for its investments in The Waterside, The Fountainside, and Penha Heights. The Group's liquidity position is monitored by the Manager and is reviewed quarterly by the Board. Please refer to Note 8 for details of the facilities. The following tables analyse the Group's financial assets and liabilities into relevant maturity profiles based on the remaining period at the Consolidated Statement of Financial Position date to the contractual maturity date. The amounts disclosed in the table are the contractual undiscounted cash flows (including interest payable). | As at 30 June 2025 | On demand US$'000 | Less than 3 months US$'000 | 3 to 12 months US$'000 | 1 to 2 years US$'000 | 2 to 5 years US$'000 | Over 5 years US$'000 | Total US$'000 | | --- | --- | --- | --- | --- | --- | --- | --- | | Other receivables (excluding prepayments) | - | - | - | 13 | - | - | 13 | | Cash and cash equivalents | 119 | - | - | - | - | - | 119 | | Deposits with lenders | - | 1,409 | - | - | - | - | 1,409 | | Total financial assets | 119 | 1,409 | - | 13 | - | - | 1,541 | | Trade and other payables | - | 2,688 | - | - | - | - | 2,688 | | Interest-bearing loans | - | 53,704 | 2,426 | 2,103 | 2,682 | - | 60,915 | | Total financial liabilities | - | 56,392 | 2,426 | 2,103 | 2,682 | - | 63,603 | | Net financial position | 119 | (54,983) | (2,426) | (2,090) | (2,682) | - | (62,062) | 93 / Financial Statements --- # Notes to the Consolidated Financial Statements (continued) ## 2. Financial risk management, policies and objectives (continued) ### Liquidity risk (continued) | As at 30 June 2024 | On demand US$'000 | Less than 3 months US$'000 | 3 to 12 months US$'000 | 1 to 2 years US$'000 | 2 to 5 years US$'000 | Over 5 years US$'000 | Total US$'000 | | --- | --- | --- | --- | --- | --- | --- | --- | | Other receivables (excluding prepayments) | – | 4 | – | 14 | – | – | 18 | | Cash and cash equivalents | 243 | – | – | – | – | – | 243 | | Deposits with lenders | – | 4,295 | – | 320 | – | – | 4,615 | | Total financial assets | 243 | 4,299 | – | 334 | – | – | 4,876 | | Trade and other payables | – | 4,163 | – | – | – | – | 4,163 | | Interest-bearing loans | – | 13,443 | 21,354 | 49,114 | 4,081 | – | 87,992 | | Total financial liabilities | – | 17,606 | 21,354 | 49,114 | 4,081 | – | 92,155 | | Net financial position | 243 | (13,307) | (21,354) | (48,780) | (4,081) | – | (87,279) | The table below analyses the Group’s changes in financial liabilities arising from financing activities. | | 1 July 2025 US$'000 | Cashflows US$'000 | Foreign Exchange Movement US$'000 | Other US$'000 | Profit and Loss US$'000 | 30 June 2025 US$'000 | | --- | --- | --- | --- | --- | --- | --- | | Current interest-bearing loans | 30,895 | (22,277) | (435) | 47,376 | – | 55,559 | | Non-current interest-bearing loans | 51,867 | – | (1) | (47,376) | – | 4,490 | | Loan arrangement fees | (281) | (1) | – | – | 282 | – | | Net interest-bearing loans | 82,481 | (22,278) | (436) | – | 282 | 60,049 | | Interest payable | 841 | (4,633) | – | – | 3,896 | 104 | | Total | 83,322 | (26,911) | (436) | – | 4,178 | 60,153 | | | 1 July 2024 US$'000 | Cashflows US$'000 | Foreign Exchange Movement US$'000 | Other US$'000 | Profit and Loss US$'000 | 30 June 2024 US$'000 | | Current interest-bearing loans | 23,463 | (22,879) | 87 | 30,224 | – | 30,895 | | Non-current interest-bearing loans | 82,168 | (384) | 307 | (30,224) | – | 51,867 | | Loan arrangement fees | (524) | (42) | – | – | 285 | (281) | | Net interest-bearing loans | 105,107 | (23,305) | 394 | – | 285 | 82,481 | | Interest payable | 967 | (6,415) | – | – | 6,289 | 841 | | Total | 106,074 | (29,720) | 394 | – | 6,574 | 83,322 | The ‘Other’ column includes the effect of reclassification of non-current portion of interest-bearing loans to current due to the passage of time. The Group classifies interest paid as cash flows from financing activities. 94 / Financial Statements --- # Notes to the Consolidated Financial Statements (continued) ## 2. Financial risk management, policies and objectives (continued) ### Fair value hierarchy **Financial investments measured at fair value** IFRS 13 requires disclosure of fair value measurements by level as discussed in Note 1. For all financial instruments, other than those recognised at fair value or whose fair value is disclosed within these financial statements, carrying value of the financial asset/liability is an approximation of their fair value. ### Capital risk management The Group’s objectives, when managing capital, are to safeguard the Group’s ability to continue as a going concern in order to provide returns for shareholders and benefits for other stakeholders, and to maintain an optimal capital structure to reduce the cost of capital. In order to maintain or adjust the capital structure, the Group may adjust the amount of dividends paid to shareholders, return capital to shareholders, issue new shares or sell assets to reduce debt. The Group’s objective is to provide shareholders with an attractive total return, derived from the disposal of its remaining real estate assets. The timing and amount of rental or other income cannot be predicted. Any cash received by the Company as part of the realisation process will be held by the Company as cash on deposit and/or as cash equivalents prior to its distribution to shareholders, which shall be at such intervals as the Board considers appropriate. While the Group anticipates that debt obligations will be met through divestment proceeds, refinancing may be required depending on market conditions and asset sale timing. As part of its capital management strategy, the Group continues to monitor funding needs and may evaluate capital raising options should refinancing or divestment proceeds prove insufficient. During the year ended 30 June 2025, there were no borrowings other than the Group’s loan facilities in place which are classified as interest bearing loans in the Consolidated Statement of Financial Position. There are no externally imposed capital requirements. ### Discount management policy The Board closely monitors the discount to Adjusted Net Asset Value (adjusted NAV) at which the Company’s shares trade and has sought shareholders’ approval of powers to buy shares in the market to moderate the volatility of the discount. These powers will be sought again at the forthcoming AGM. The Board is also very mindful of the working capital operating needs of the Company when considering buying back its shares in the market. During the year ended 30 June 2025, the Company did not purchase any ordinary shares under the discount management policy. Proceeds from divestment were allocated to debt repayment and working capital. Shares which are bought back by the Company may either be cancelled or held in treasury and subsequently re-issued. Pursuant to the Companies (Guernsey) Law, the number of shares of any class held as treasury shares must not, at any time, exceed 10% of the total number of issued shares of that class at that time. The authority to buy back up to 14.99% per annum of shares in issue is renewed at each AGM of the Company by special resolution. The Board remains committed to its discount management policy subject to available capital. 95 / Financial Statements --- # Notes to the Consolidated Financial Statements (continued) ## 3. Critical accounting estimates, assumptions and judgements The Directors' and Investment Adviser (the "management") make estimates and assumptions concerning the future. The resulting accounting estimates will, by definition, seldom equal the actual results. Accounting estimates are monetary amounts that are subject to measurement uncertainty. The estimates and assumptions that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year are outlined below: a) Fair value of the investment property, NRV and Adjusted NAV are based on the current market valuation provided by Savills, an independent valuer. Savills is required to make assumptions on establishing the current market valuation. The most significant assumptions (as described further in Note 6), relate to future income streams and the discount rates applicable to these estimates. The valuation has been made on the assumption that the owner sells the properties in the open market without a deferred term contract, leaseback, joint venture, management agreement or any similar arrangement, which could serve to affect the value of the properties. The Board and management have reviewed the valuations and are in agreement with the valuer's judgement. Some properties have been sold at a discount in the current year due to the need to meet bank obligations. As these discounts are only offered in specific circumstances it is not indicative of a lower fair value. This is an accounting estimate and assumption. b) Inventory is stated at the lower of cost and NRV. NRV for completed inventory property is assessed with reference to market conditions and prices existing at the reporting date, and is determined by the Group, having taken suitable external advice and in the light of recent market transactions. NRV in respect of inventory property under construction (see Note 7), is assessed with reference to market prices at the reporting date for similar completed property, less estimated costs to complete construction and less an estimate of the time value of money to the date of completion. This is an accounting estimate. c) The properties at The Waterside are classified as current assets held for sale under IFRS 5 — Non-current Assets Held for Sale and Discontinued Operations and are measured at fair value in accordance with the exemption criteria under clause 5d) of the Standard as they are current assets accounted for in accordance with the fair value model in IAS 40 Investment Property. This represents a change in classification from prior years when the property was recognised as Investment Property under IAS 40 and measured at fair value. The change is due to the Board's assessment that the sale of the assets is highly probable within one year of the Annual Report date and that they are available for immediate sale in their present condition. This is a critical judgement. d) The Annual Report has been prepared on a basis other than that of a going concern in light of the progress on the Group's divestment programme. This change reflects significant uncertainty that the Group will continue in existence as a going concern for 12 months from the date of signing the Annual Report. The Directors believe there are no material differences than had the financial statements been prepared on a going concern basis (see Going concern section in Note 1). This is a critical judgement. The Group did not make any critical accounting judgements, other than as described above, in the year ended 30 June 2025. 96 / Financial Statements --- # Notes to the Consolidated Financial Statements (continued) ## 4. Subsidiaries All SPVs are owned 100% by the Company. There are no significant restrictions on the ability to access or use the assets to settle the liabilities of the Group. The following subsidiaries, active for both the 30 June 2025 and 30 June 2024 year ends, have a year end of 31 December to coincide with the Macanese tax year and are the only subsidiaries which do not have the same year end as the Company: - MPOF Macau (Site 2) Limited - The Fountainside Company Limited - MPOF Macau (Site 5) Limited - The Waterside Company Limited - Castelo Branco Companhia Limitada The Consolidated Financial Statements include the financial statements of the Company and the subsidiaries listed below: | | Ownership | Incorporation | | Ownership | Incorporation | | --- | --- | --- | --- | --- | --- | | MPOF Macau (Site 2) Limited^{1} | 100% | Macau | Cannonball Limited^{1} | 100% | Guernsey | | MPOF Macau (Site 5) Limited^{1} | 100% | Macau | Civet Limited^{1} | 100% | Guernsey | | The Waterside Company Limited^{2} | 100% | Macau | Gorey Hills International Limited^{1} | 100% | British Virgin Islands (“BVI”) | | The Fountainside Company Limited^{2} | 100% | Macau | Hillsleigh Holdings Limited^{1} | 100% | BVI | | Castelo Branco Companhia Limitada^{3} | 100% | Macau | East Base Properties Limited^{1} | 100% | Hong Kong | | MPOF (Jose) Limited^{1} | 100% | Guernsey | Eastway Properties Limited^{3} | 100% | Hong Kong | | MPOF (Sun) Limited^{1} | 100% | Guernsey | | | | | MPOF (Guia) Limited^{1} | 100% | Guernsey | | | | | MPOF (Antonio) Limited^{1} | 100% | Guernsey | | | | 1. Company is a holding company. 2. Company is an investment holding company. ## 5. Segment reporting The Chief Operating Decision Maker (the “CODM”) in relation to the Company is deemed to be the Board itself. The factors used to identify the Group’s reportable segments are centred on asset class and differences in both geographical area and regulatory environment. Furthermore, foreign exchange and political risks are identified, as these also determine where resources are allocated. Based on the above and a review of information provided to the Board, it has been concluded that the Group is currently organised into one reportable segment based on the geographical area, Macau. This segment refers principally to residential properties. Furthermore, there are multiple individual properties that are held within each property type. However, the CODM considers, on a regular basis, the operating results and resource allocation of the aggregated position of all property types as a whole, as part of its ongoing performance review. This is supported by a further breakdown of individual property groups only to help support their review and investment appraisal objectives. ## Information about major customers The Group does not have any customers or rental agreements which represent more than 10% of Group’s revenues. Revenues represented by rental income were US$952,000 for the year ended 30 June 2025 (2024: US$1,494,000). 97 / Financial Statements --- # Notes to the Consolidated Financial Statements (continued) ## 6. Investment property ### At the beginning of the year Net sales proceeds from disposals Loss on disposal of investment property Fair value adjustment Exchange difference Reclassification to current assets held for sale ### Balance at end of year | 2025 | 2024 | | --- | --- | | US$'000 | US$'000 | | 97,970 | 141,045 | | (23,303) | (28,480) | | (1,974) | (2,398) | | (9,648) | (12,657) | | (257) | 460 | | (62,788) | – | | – | 97,970 | Valuation gains/(losses) (fair value adjustment) from investment property are recognised in profit and loss for the year. These are attributable to changes in unrealised gains/losses relating to completed investment properties held at the end of the reporting period. The valuation process is initiated by the Investment Adviser who appoints a suitably qualified valuer to conduct the valuation of the investment property. The results are overseen by the Investment Adviser. Once satisfied with the valuations based on their expectations, the Investment Adviser reports the results to the Board. The Board reviews the latest valuations based on its knowledge of the property market and compares these to previous valuations. The Group's investment properties were revalued at 30 June 2025 by an independent, professionally-qualified valuer, Savills. The valuation has been carried out in accordance with the current Royal Institution of Chartered Surveyors (RICS) Appraisal and Valuation Standards to calculate the market value of the investment properties in their existing state and physical condition, with the assumptions that: - The owner sells the property in the open market without any arrangements, which could serve to affect the value of the property. - The property is held for investment purposes. - The property is free from encumbrances, restrictions and outgoings of any onerous nature which could affect its value. The fair value of investment property is determined by Savills, using recognised valuation techniques. The principal technique deployed is the income capitalisation method. The determination of the fair value of investment property requires the use of estimates such as future cash flows from assets (such as lettings, tenants' profiles, future revenue streams, capital values of fixtures and fittings, any environmental matters and the overall repair and condition of the property) and discount rates applicable to those assets. These estimates are based on the local market conditions existing at the reporting date. No capital expenditure on property was incurred during the current or prior year. During the year ended 30 June 2025, 9 units were sold at The Waterside with net losses on disposal of investment properties of US$1,974,000 recognised. During the year ended 30 June 2024, 11 units were sold at The Waterside with net losses on disposal of investment properties of US$2,398,000 recognised. The market value as at 30 June 2025 as determined by the independent, professionally-qualified valuer, Savills, was US$62,788,000 (2024: US$97,970,000). Rental income arising from The Waterside of US$945,000 (2024: US$1,485,000) was received during the year. Direct operating expenses of US$425,000 (2024: US$611,000) arising from rented units were incurred during the year. Direct operating expenses during the year arising from vacant units totalled US$116,000 (2024: US$156,000). As at 30 June 2025 the properties at The Waterside were reclassified from Investment Property under IAS 40 and measured at fair value to current assets held for sale under IFRS 5 – Non-current Assets Held for Sale and Discontinued Operations and are measured at fair value in accordance with the exemption criteria under clause 5d) of the Standard as they are current assets accounted for in accordance with the fair value model in IAS 40 Investment Property. The change is due to the Board's assessment that the sale of the assets is highly probable within one year of the Annual Report date and that they are available for immediate sale in their present condition. The reclassification of the assets has not impacted their carrying value as at 30 June 2025. See Note 25. 98 / Financial Statements --- # Notes to the Consolidated Financial Statements (continued) ## 7. Inventories | | 2025 US$'000 | 2024 US$'000 | | --- | --- | --- | | Cost | | | | Balance brought forward | 35,017 | 34,775 | | Additions | 29 | 113 | | Disposals | (2,280) | – | | Exchange difference | (184) | 129 | | Balance carried forward | 32,582 | 35,017 | Two villas of *The Fountainside* (2024: no sales) were sold during the year for a total consideration of US$3.5 million (HK$26.9 million) (2024: US$Nil (HK$Nil)) against a total cost of US$2.4 million (HK$19.1 million) (2024: US$Nil (HK$Nil)) which resulted in a net profit of US$1.1 million (HK$7.8 million) (2024: US$Nil (HK$Nil)) after all associated fees and transaction costs. Additions include capital expenditure. Under IFRS, inventories are valued at the lower of cost and NRV. The carrying amounts for inventories as at 30 June 2025 amounts to US$32,582,000 (2024: US$35,017,000). The market value as at 30 June 2025 as determined by the independent, professionally-qualified valuer, Savills, was US$38,745,000 (2024: US$54,747,000). The NRV as at 30 June 2025 was US$37,583,000 (2024: US$53,104,000). If the estimated unit rate increased/decreased by 5% (and all other assumptions remained the same), the fair value of the properties would increase or decrease by US$1.8 million (2024: increase or decrease by US$2.6 million). ## 8. Interest-bearing loans | | 2025 US$'000 | 2024 US$'000 | | --- | --- | --- | | Bank loans – Secured | | | | – Current portion | 55,559 | 30,665 | | – Non-current portion | 4,490 | 51,816 | | | 60,049 | 82,481 | There are interest-bearing loans with three banks: ## Hang Seng Bank The Group has a term loan facility with Hang Seng Bank for *The Waterside*. As at 30 June 2025, the outstanding loan balance was HK$358 million (US$45.6 million) (2024: HK$526 million (US$67.4 million)). The interest rate is 1.8% per annum over the 1-, 2- or 3-month HIBOR rate. The Manager determines the interest period upon assessing funding and market conditions prevailing at each interest rate fixing date. The choice of rate is at the Group’s discretion. The loan-to-value covenant for *The Waterside* facility was 60%, which was assessed on an aggregate basis to include *The Fountainside* facility. As at 30 June 2025, the combined loan-to-value ratio was 64.5% (2024: 57.2%). The exception has been acknowledged and regularly reported to Hang Seng Bank as the Group has maintained ongoing communication with the bank, providing updates on the latest sales status and plans aimed at reducing the LTV ratio. These plans include strategic asset disposals, increasing repayment ratios and other measures designed to restore the ratio while maintaining minimal disruption to operations. Hang Seng Bank has also implemented additional cash monitoring procedures on usage of sales proceeds. The facility is secured by means of a first registered legal mortgage over all unsold units of *The Waterside* as well as a pledge of all income from the units. The Company is the guarantor for the credit facility. In addition, the Group is required to maintain a cash reserve equal to six months’ interest with the lender. Subsequent to year end, the maturity of the term loan facility has been extended from September 2025 to September 2026. 99 / Financial Statements --- # Notes to the Consolidated Financial Statements (continued) 8. Interest-bearing loans (continued) ## Hang Seng Bank (continued) The Group has a loan facility with Hang Seng Bank for The Fountainside: As at 30 June 2025, outstanding loan balance was HK$5.2 million (US$0.7 million) (2024: HK$5.2 million (US$0.7 million)). The interest rate applicable is 3.3% per annum over the 1-, 2- or 3-month HIBOR rate. The Manager determines the interest period upon assessing funding and market conditions prevailing at each interest rate fixing date. The loan-to-value covenant is 55%. As at 30 June 2025, the loan-to-value ratio was 9.03% (2024: 4.12%). The facility is secured by means of a first registered legal mortgage over all unsold units and car parking spaces of The Fountainside as well as a pledge of all income from the units and the car parking spaces. The Company is the guarantor for the credit facility. In addition, the Group is required to maintain a cash reserve equals to six months' interest with the lender. Properties pledged under loan facilities for The Waterside and The Fountainside cross-collateralised both facilities. Subsequent to the year end, the maturity of the loan has been extended to September 2026. The Group has two loan facilities for Penha Heights: ## Banco Tai Fung The loan facility with Banco Tai Fung has a term of seven years and interest was Prime Rate minus 2.25% per annum, with applicable interest rate of Prime minus 0.75% until January 2026. As at 30 June 2025, the facility had an outstanding balance of HK$48.0 million (US$6.1 million) (2024: HK$55.0 million (US$7.0 million)), maturing June 2029. This facility is secured by a first legal mortgage over the property as well as a pledge of all income from the property. The Company is the guarantor for this term loan. As at 30 June 2025, the loan-to-value ratio was 42.86% (2024: 40.15%). There is no loan-to-value covenant for this loan. Subsequent to year end, the Company is seeking to defer certain loan repayment amounts up to 3 months which is under review as of the issuance date of the financial statement. ## BCM Bank The Group has a loan facility with BCM Bank. As at 30 June 2025, the facility had an outstanding balance of HK$60.0 million (US$7.6 million) (2024: HK$60.0 million (US$7.7 million)) with interest at 3.25% over 3-month HIBOR. This facility is secured by a first legal mortgage over the property as well as a pledge of all income from the property. The Company is the guarantor for this term loan. In addition, the Group is required to maintain a cash reserve equal to six months' interest with the lender. The loan-to-value covenant is 45%. As at 30 June 2025, the loan-to-value ratio for this facility was 44.78% (2024: 36.81%). Subsequent to year end, the Company has extended the loan facility with BCM Bank due in September 2025 to January 2026 with a partial payment US$1.5 million due in November 2025. ## Bank Loan Interest Bank loan interest incurred during the year was US$3,919,000 (2024: US$6,283,000), including US$nil (2024: US$nil) capitalised during the year (see Note 7). Amortised loan arrangement fees for the year are disclosed in Note 14. ## Fair Value Interest-bearing loans are carried at amortised cost. The fair value of fixed rate financial assets and liabilities carried at amortised cost are estimated by comparing market interest rates when they were first recognised with current market rates for similar financial instruments. The estimated fair value of fixed interest bearing loans is based on discounted cash flows using prevailing market interest rates for debts with similar credit risk and maturity. As at 30 June 2025, the fair value of the interest-bearing loans was US$22,000 lower than the carrying value of the financial liabilities (2024: the fair value of the interest-bearing loans was US$204,000 lower than the carrying value of the financial liabilities). The Group's interest-bearing loans have been classified within Level 2, as they have observable inputs from similar loans. There have been no transfers between levels during the period or a change in valuation technique since the last period. 100 / Financial Statements --- # Notes to the Consolidated Financial Statements (continued) ## 9. Taxation The Company is exempt from taxation in Guernsey under the provisions of The Income Tax (Exempt Bodies) (Guernsey) Ordinances, 1989 to 1992, and is charged an annual exemption fee of £1,600 (US$2,109) (2024: £1,600 (US$2,032)). The Group would only be exposed to Hong Kong profits tax if it is: (i) not exempted under the Revenue (Profits Tax Exemption for Offshore Funds) Ordinance 2006 (the “Ordinance”); and (ii) treated as carrying on a trade or business in Hong Kong either on its own account or through any person as an agent. No accrual has been made for Hong Kong profits tax, as the Board believes that no such tax exposure exists at the end of the reporting year (2024: US$nil). The Group is not subject to any income, withholding or capital gains taxes in the BVI. No capital or stamp duties are levied in the BVI on the issue, transfer or redemption of shares. As a result, no provision for BVI taxes has been made in the Consolidated Financial Statements. The Macanese SPVs are liable to Macau Property Tax in respect of their ownership of Macau properties. Taxation will be charged at 8% (2024: 8%) of any rent received for rental properties or 6% (2024: 6%) of the official ratable value for self-use properties. Newly built residential buildings or commercial buildings were exempted from Property Tax for four years and six years, respectively (such time running from the month after the occupancy permit is issued) for properties located in Macau peninsula and outlying islands. Macau Complementary Taxes (“MCT”) are generally levied on income and profits arising in or derived from commercial and/or industrial activities carried on in Macau. There is no distinction made between a “revenue profit” and “capital profit” under the MCT regulations. Accordingly, income booked by a Macau corporate taxpayer, including gains on sale of investment/immovable property, will be subject to MCT in accordance with MCT regulations. Under prevailing practice, gains on the disposal of shares in a Macau company (such as an SPV of the Company) by a non-Macau entity which is not Macau tax resident should generally not attract MCT. The Board closely monitors and assesses the level of provisions for Macanese tax taking into consideration factors such as the Group’s structure. As at the year-end, the following amounts are the outstanding tax provisions. | | 2025 | 2024 | | --- | --- | --- | | | US$’000 | US$’000 | | Non-current liabilities | | | | Deferred taxation | 2,288 | 4,580 | | Provision for Macanese taxations | – | – | | | 2,288 | 4,580 | | Current liabilities | | | | Provisions for Macanese taxations | 449 | 316 | | | 449 | 316 | ## Deferred taxation The Group has recognised a deferred tax liability for the taxable temporary difference relating to the investment property carried at fair value and has been calculated at a rate of 12% as relates to Macau taxation as applicable. ## Provisions for Macanese taxations The Group has made provisions for property tax and complementary tax arising from its Macau business operations where applicable. 101 / Financial Statements --- # Notes to the Consolidated Financial Statements (continued) ## 9. Taxation (continued) ### Major components of taxation Provision to property tax (note 15) Movement in deferred taxation provision Provision for MCT | 2025 US$'000 | 2024 US$'000 | | --- | --- | | (153) | (208) | | 2,285 | 2,941 | | (216) | 778 | | 2,069 | 3,719 | The differences between the taxation charge for the year and the movement in taxation provisions are due to the disposal of investment property during the year. ## 10. Other receivables ### Current assets Prepayments Other receivables | 2025 US$'000 | 2024 US$'000 | | --- | --- | | 24 | 68 | | – | 4 | | 24 | 72 | ## 11. Trade and other payables ### Current liabilities Accruals Other payables | 2025 US$'000 | 2024 US$'000 | | --- | --- | | 654 | 809 | | 2,034 | 3,354 | | 2,688 | 4,163 | Other payables principally comprise outstanding amounts for operating expenses. 102 / Financial Statements --- # Notes to the Consolidated Financial Statements (continued) ## 12. Share capital ### Ordinary shares Authorised: 300 million ordinary shares of US$0.01 each Issued and fully paid: 61.8 million (2024: 61.8 million) ordinary shares of US$0.01 each | 2025 | 2024 | | --- | --- | | US$'000 | US$'000 | | 3,000 | 3,000 | | 618 | 618 | The Company has one class of ordinary shares which carries no rights to fixed income. The Board has publicly stated its commitment, in principle, to undertake share buybacks at attractive levels of discount of the share price to Adjusted NAV. In order to continue this strategy, the Board intends to renew this authority at the 2025 AGM. No redemption of shares was made during the current or prior year. There are no restrictions on the distribution of dividends and repayment of capital. ## 13. General and administration expenses ### General and administration expenses Legal and professional Holding Company administration Guernsey SPV administration BVI, Hong Kong, & Macanese SPV administration Insurance costs Listing fees Printing & postage Other operating expenses | 2025 | 2024 | | --- | --- | | US$'000 | US$'000 | | 63 | 54 | | 116 | 125 | | 58 | 63 | | 46 | 46 | | 14 | 14 | | 14 | 21 | | 24 | 25 | | 177 | 132 | | 512 | 480 | ## 14. Other financing costs ### Financing costs Bank charges Loan arrangement fees | 2025 | 2024 | | --- | --- | | US$'000 | US$'000 | | 6 | 6 | | 282 | 285 | | 288 | 291 | As at 30 June 2025, unamortised loan arrangement fees were US$Nil (2024: US$281,000). As at 30 June 2024, these have been netted off against the interest bearing loans. 103 / Financial Statements --- # Notes to the Consolidated Financial Statements (continued) ## 15. Property operating expenses | Property operating expenses | 2025 US$'000 | 2024 US$'000 | | --- | --- | --- | | Property management fees | 280 | 408 | | Leasing and property management service fee (Note 20) | 342 | 380 | | Property taxes | 153 | 208 | | Utilities | 6 | 8 | | Other property expenses | 141 | 165 | | | 922 | 1,169 | ## 16. Sales and marketing expenses | Sales and marketing expenses | 2025 US$'000 | 2024 US$'000 | | --- | --- | --- | | Agent commission | 257 | 95 | ## 17. Cash flows from operating activities | | 2025 US$'000 | 2024 US$'000 | | --- | --- | --- | | Cash flows from operating activities | | | | Loss for the year before tax | (16,691) | (23,339) | | Adjustments for: | | | | Loss on disposal of investment property | 1,974 | 2,398 | | Net loss from fair value adjustment on investment property | 9,648 | 12,657 | | Net finance costs | 4,178 | 6,574 | | Operating cash flows before movements in working capital | (891) | (1,710) | | Effects of foreign exchange rate changes | (166) | 106 | | Movement in other receivables | 49 | (4) | | Movement in trade and other payables | (820) | 1,042 | | Movement in inventories | 2,251 | (113) | | Net change in working capital | 1,480 | 925 | | Taxation paid | – | – | | Net cash used in operating activities | 423 | (679) | Cash and cash equivalents (which are presented as a single class of assets on the face of the Consolidated Statement of Financial Position) comprise cash at bank and other short-term, highly-liquid investments with a maturity of three months or less. For both year ends, there are no cash equivalents held by the Group. 104 / Financial Statements --- # Notes to the Consolidated Financial Statements (continued) ## 18. Basic and diluted loss per ordinary share and net asset value per share The basic and diluted loss per equivalent ordinary share is based on the loss attributable to equity holders for the year of US$14,622,000 (2024: loss of US$19,620,000) and on the 61,835,733 (2024: 61,835,733) weighted average number of ordinary shares in issue during the year. | | 30 June 2025 | | | 30 June 2024 | | | | --- | --- | --- | --- | --- | --- | --- | | | Loss Attributable US$'000 | Weighted Average No. of Shares '000s | Loss Per Share US$ | Loss Attributable US$'000 | Weighted Average No. of Shares '000s | Loss Per Share US$ | | Basic and diluted | (14,622) | 61,836 | (0.2365) | (19,620) | 61,836 | (0.3173) | | | | | | | 2025 US$'000 | 2024 US$'000 | | Net asset value reconciliation | | | | | 31,461 | 46,391 | | Net assets attributable to ordinary shareholders | | | | | 6,163 | 19,730 | | Uplift of inventories held at cost to market value | | | | | | | | Adjusted NAV | | | | | 37,624 | 66,121 | | Number of ordinary shares outstanding ('000) | | | | | 61,836 | 61,836 | | NAV per share (IFRS) (US$) | | | | | 0.51 | 0.75 | | Adjusted NAV per share (US$) | | | | | 0.61 | 1.07 | | Adjusted NAV per share (£)* | | | | | 0.44 | 0.85 | The NAV per share is arrived at by dividing the net assets as at the date of the Consolidated Statement of Financial Position, by the number of ordinary shares in issue at that date. Under IFRS, inventories are carried at the lower of cost and NRV (see Note 3 and Note 7). The NRV is determined by Savills and is subject to significant estimation uncertainty. The Adjusted NAV includes the uplift of inventories to their market values before any tax consequences or adjustments. The Adjusted NAV per share is arrived at by dividing the Adjusted NAV as at the date of the Consolidated Statement of Financial Position, by the number of ordinary shares in issue at that date. There are no potentially dilutive shares in issue. * US$/GBP rate as at 30 June 2025 is 1.572 (2024: 1.265). 105 / Financial Statements --- # Notes to the Consolidated Financial Statements (continued) ## 19. Related party transactions Directors of the Company are all non-executive and by way of remuneration, receive only an annual fee which is denominated in Sterling. | | 2025 US$'000 | 2024 US$'000 | | --- | --- | --- | | Directors' fees | 183 | 172 | The Directors are considered to be the key management personnel (as defined under IAS 24) of the Company. Directors' fees outstanding as at 30 June 2025 were US$94,000 (2024: US$43,000). Directors' fees are being deferred and will need to be paid before any returns are made to investors. ## 20. Material contracts ### Management fee Management fee is a quarterly fixed fee of US$300,000 for the calendar year 2021 onwards. At the option of the Board, from 1 January 2025 the management fee may be reduced to US$80,000 per month with one month's notice given to the Manager. The aggregate amount of the management fees and any realisation fees paid to the Manager for each calendar year from 2024 onwards shall not exceed the amount which is equal to 4.99% of the lower of the Group's market capitalisation and net asset value as calculated at close of business on the last business day of the previous calendar year. The fee cap for the calendar year 2025 is set at US$968,879 (calendar year 2024: US$1,439,816). Management fees for the year totalled US$1,084,440 (2024: US$1,200,000) with US$284,440 outstanding as at 30 June 2025 (2024: US$500,000). ### Realisation fee A realisation fee was payable on deals originated and secured by the Manager which shall be linked to the sales price achieved. The realisation fee is currently active until 31 December 2025. The realisation fee is payable upon the sale of individual properties and becomes payable 10 business days after completion. Up to the end of 2025, where the sale price of the asset was 90% or more of the value of the relevant asset as at 30 September 2019 (the "Carrying Value") a fee of 2.5% of net proceeds (net of debt, costs and taxes) ("Net Proceeds") was payable; where the sale price of an asset was more than 80% but less than 90% of the Carrying Value of the relevant asset, a realisation fee of 1.5% of Net Proceeds was payable; and where the sale price of an asset is less than 80% of the Carrying Value, no realisation fee shall be payable. As detailed above, the fee cap for 2025 onwards will be reset on 1 January of the relevant calendar year based on the market capitalisation or net asset value (as applicable) at close of business on the last business day of the previous calendar year. Any realisation fee achieved on strata sales of units at The Waterside will be subject to the retention of 50% until all units have been sold. Realisation fees for the year totalled US$Nil (2024: reverse of prior year overprovision of US$7,000) with US$91,000 outstanding as at 30 June 2025 (2024: US$91,000), of which US$46,000 (2024: US$46,000) was deferred until sale of all units at The Waterside. The Manager's appointment is terminable by the Manager or the Company on not less than 3 months' notice. The Company may terminate the Management Agreement with immediate effect, if either or both of the Principals are removed from their position of full-time employment with the Manager or ceases to be available for any reason beyond the Manager's reasonable control and the Manager fails, within three months (or six months in the case of one only) of such event, to cause to be made available the services of a competent replacement(s) of equivalent skill and experience. The Management Agreement may also be terminated with immediate effect by either the Manager or the Company if the other party has gone into liquidation, administration or receivership or has committed a material breach of the Management Agreement. 106 / Financial Statements --- # Notes to the Consolidated Financial Statements (continued) ## 20. Material contracts (continued) ### Leasing and Tenancy Management and Property Management Services Agreement Bela Vista operates as an affiliate of the Manager, Sniper Capital Limited. The two entities share overlapping directorship, reflecting a close strategic and operational relationship. Both Bela Vista and the Manager are ultimately owned by the same beneficial stakeholders, which may influence governance and decision-making processes and facilitate the execution processes. The Group and Bela Vista entered into a Leasing and Tenancy Management and Property Management Services Agreement, under which Bela Vista provides property services to the Group in respect of asset management, tenant management and leasing at The Waterside. Bela Vista is paid a leasing and tenancy management fee based on a percentage of the monthly rental receivable by The Waterside and fixed fees for property management services and the staff costs and overhead incurred. During the year, leasing and tenancy management and property management services fees of US$342,000 (HK$2,664,000) (2024: US$380,000 (HK$2,969,000)) were paid. As at 30 June 2025, US$Nil (2024: US$ Nil) was outstanding. ## 21. Deposits with lenders Pledged bank balances represent deposits pledged to the banks to secure the banking facilities granted to the Group. There are no other significant terms and conditions associated with these pledged bank balances. | | 2025 US$'000 | 2024 US$'000 | | --- | --- | --- | | Non-current | – | 320 | | Current | 1,409 | 4,295 | | Pledged for loan covenants | 1,409 | 4,615 | ## 22. Commitments and contingencies As at 30 June 2025, the Group had agreed consultancy contracts with an architectural firm, an engineering firm, an electrical engineering firm and a quantity surveying consultancy firm and are consequently committed to future capital expenditure in respect of inventories of US$64,000 (2024: US$107,000). ## 23. Auditors' remuneration All fees payable to the external auditor relate to audit services. Auditors' remuneration was broken down as follows: | | 2025 US$'000 | 2024 US$'000 | | --- | --- | --- | | Audit fees | 208 | 161 | | | 208 | 161 | 107 / Financial Statements --- # Notes to the Consolidated Financial Statements (continued) ## 24. Operating leases — Group as lessor The Group has entered into leases on its property portfolio. Future minimum rentals receivable under non-cancellable operating leases as at 30 June 2025 are as follows: | | 2025 US$'000 | 2024 US$'000 | | --- | --- | --- | | Residential | | | | Within 1 year | 265 | 658 | | Total future rental income | 265 | 658 | The majority of leases involve tenancy agreements with a term of 12 months. The Group has assessed the risks as minimal as the leases held are all operating leases relating to the rental of apartments in *The Waterside* to which the Group acts as lessor. As at 30 June 2025, lease incentives on which the Group was lessor amounted to US$4,000 (2024: US$71,000) with rent free liabilities of US$ Nil (2024: US$2,000). ## 25. Current assets held for sale | | 2025 US$'000 | 2024 US$'000 | | --- | --- | --- | | At the beginning of the year | – | – | | Reclassified from investment property | 62,788 | – | | Balance at end of the year | 62,788 | – | As at 30 June 2025 the properties at *The Waterside* were reclassified from Investment Property under IAS 40 and measured at fair value to current assets held for sale under IFRS 5 — Non-current Assets Held for Sale and Discontinued Operations and are measured at fair value in accordance with the exemption criteria under clause 5d) of the Standard as they are current assets accounted for in accordance with the fair value model in IAS 40 Investment Property. The change is due to the Board's assessment that the sale of the assets is highly probable within one year of the Annual Report date in light of the planned divestment programme at *The Waterside* in order to meet ongoing debt repayment obligations and that they are available for immediate sale in their present condition. The reclassification of the assets has not impacted the carrying value as at 30 June 2025. See Note 6. 108 / Financial Statements --- # Notes to the Consolidated Financial Statements (continued) ## 25. Current assets held for sale (continued) The following tables show the most appropriate presentation of the inputs used in valuing the investment property which is classified as Level 3 in the fair value hierarchy: | | Property information | Carrying amount/ fair value as at 30 Jun 2025 US$'000 | Valuation technique | Input | Unobservable and observable inputs used in determination of fair values | Other key information | | --- | --- | --- | --- | --- | --- | --- | | Name | The Waterside | 62,788 | Term and Reversion Analysis | Term rent (inclusive of management fee and furniture) | HK$18.4 psf | Age of building | | Type | Completed apartments | | | Term yield (exclusive of management fee and furniture) | 1.85% – 2.30% | Remaining useful life of building | | Location | One Central Tower 6 Macau | | | Reversionary rent (exclusive of management fee and furniture) | HK$12.9 psf | | | | | | | Reversionary yield | 2.00 % | | | | Property information | Carrying amount/ fair value as at 30 Jun 2024 US$'000 | Valuation technique | Input | Unobservable and observable inputs used in determination of fair values | Other key information | | Name | The Waterside | 97,970 | Term and Reversion Analysis | Term rent (inclusive of management fee and furniture) | HK$18.1 psf | Age of building | | Type | Residential/ Completed apartments | | | Term yield (exclusive of management fee and furniture) | 1.4% – 2.2% | Remaining useful life of building | | Location | One Central Tower 6 Macau | | | Reversionary rent (exclusive of management fee and furniture) | HK$11.99 psf | | | | | | | Reversionary yield | 1.55% | | 109 / Financial Statements --- # Notes to the Consolidated Financial Statements (continued) ## 25. Current assets held for sale (continued) There have not been any transfers in the fair value hierarchy during the current and prior years. The fair value of *The Waterside* is determined using the income approach, more specifically a term and reversion analysis, where a property's fair value is estimated based on the rent receivable and normalised net operating income generated by the property, which is divided by the capitalisation (discount) rate. The difference between gross and net rental income includes the same expense categories as those for the discounted cash flow method with the exception that certain expenses are not measured over time, but included on the basis of a time weighted average, such as the average lease up costs. Under the income capitalisation method, over- and under-rent situations are separately capitalised (discounted). If the estimated reversionary rent increased/decreased by 5% (and all other assumptions remained the same), the fair value of *The Waterside* would increase or decrease by US$2.8 million (2024: increase or decrease by US$4.4 million). If the term or revisionary yield increased/decreased by 5% (and all other assumptions remained the same), the fair value of *The Waterside* would decrease by US$3.0 million or increase by US$3.3 million (2024: decrease by US$4.6 million or increase by US$5.3 million). The same valuation method was deployed in June 2024 and December 2024. An increase/decrease by 5% in either the estimated reversionary rent or the term or revisionary yield is considered in the reasonably possible range by the Manager. *The Waterside* is currently valued at its highest and best use. There is no extra evidence available to suggest that it has an alternative use that would provide a greater fair value measurement. There have been no transfers between levels during the period or a change in valuation technique since the last period. All fair value disclosures in relation to *The Waterside* have been disclosed in this note but the prior year comparatives stated are when the investment was held as Investment Property. 110 / Financial Statements --- # Notes to the Consolidated Financial Statements (continued) ## 26. Subsequent events During the year, the Group entered into sales and purchase agreements to dispose of units which have been completed after year end: (a) 3 units at The Waterside with proceeds of US$4.9 million received; and (b) 1 villa at The Fountainside with proceeds of US$1.7 million received. Subsequent to the year end, additional sales have been achieved: (a) further 4 units at The Waterside have been sold with proceeds of US$7.7 million received; (b) a further 1 unit at The Waterside has been committed to be sold with sales consideration of US$1.9 million of which US$0.2 million has been received; and (c) 1 villa at The Fountainside has been committed to be sold with sales consideration of US$1.8 million which US$0.4 million has been received. (d) through the proceeds received from disposals completed after year end, and post year end sales with completion on or before October 2025, The Waterside loan balance due in September 2025 was settled. The December 2025 instalment of US$5.1 million and partial March 2026 instalment of US$2.4 million was also prepaid. In addition: the Group has extended loan facilities as follows: (a) The Waterside remaining loan balance and the Fountainside loan US$0.7 million due in September 2025 has been extended with the lender to September 2026; and (a) Penha Heights loan balance with BCM Bank due in September 2025 has been extended to January 2026 with a partial payment of US$1.5 million due in November 2025. 111 / Financial Statements --- Directors and Company Information Directors - Mark Huntley (Chairman) - Alan Clifton - Carmen Ling Audit and Risk Committee - Alan Clifton (Chairman) - Mark Huntley - Carmen Ling Management Engagement Committee - Mark Huntley (Chairman) - Alan Clifton - Carmen Ling Nomination and Remuneration Committee - Alan Clifton (Chairman) - Mark Huntley - Carmen Ling Disclosure and Communications Committee - Mark Huntley (Chairman) - Alan Clifton Manager - Sniper Capital Limited - Vistra Corporate Services Centre - Wickhams Cay II - Road Town, Tortola - VG1110 - British Virgin Islands Investment Adviser - Sniper Capital (Macau) Limited - Largo da Ponte, - Nos. 51 e 57, Taipa - Macau Solicitors to the Group as to English Law - Norton Rose Fulbright LLP - 3 More London Riverside - London SE1 2AQ Advocates to the Group as to Guernsey Law - Carey Olsen - Carey House - Les Banques - St Peter Port - Guernsey GY1 4BZ Corporate Broker - Panmure Liberum Limited - Ropemaker Place, Level 12 - 25 Ropemaker Street - London EC2Y 9LY Independent Auditors - Deloitte LLP - Regency Court - Glategny Esplanade - St Peter Port - Guernsey GY1 3HW Property Valuers - Savills (Macau) Limited - Suite 1309-10 - 13/F Macau Landmark - 555 Avenida da Amizade - Macau Administrator & Company Secretary - Ocorian Administration - (Guernsey) Limited - PO Box 286 - Floor 2, Trafalgar Court - Les Banques - St Peter Port, Guernsey - Channel Islands GY1 4LY Macau and Hong Kong Administrator - Adept Capital Partners Services Limited - Unit B1, 25/F, MG Tower - 133 Hoi Bun Road - Kwun Tong, Kowloon, - Hong Kong Registered Office - PO Box 286 - Floor 2, Trafalgar Court - Les Banques - St Peter Port, Guernsey - Channel Islands GY1 4LY 112 / Manager and Adviser --- Macau Property Opportunities Fund Company Registration Number 44813 P.O. Box 286 Floor 2, Trafalgar Court St Peter Port, Guernsey Channel Islands GY1 4LY www.mpofund.com