Financial Performance - For the six months ended September 30, 2024, the company reported a revenue of HKD 7,792,000, a decrease of 16.7% compared to HKD 9,355,000 for the same period in 2023[2]. - The gross profit for the same period was HKD 3,527,000, down from HKD 5,806,000, indicating a decline of 39.2%[2]. - The company recorded a loss attributable to owners of the company of HKD 11,384,000, compared to a loss of HKD 13,931,000 in the previous year, showing an improvement of 18.2%[11]. - Total comprehensive expenses for the period amounted to HKD 10,409,000, significantly lower than HKD 25,064,000 in the prior year, reflecting a reduction of 58.5%[10]. - The basic and diluted loss per share for the period was HKD 0.7, slightly improved from HKD 0.8 in the previous year[14]. - The company reported a total of HKD 3,510,000 in cost of inventories recognized as an expense for the six months ended September 30, 2024, compared to HKD 2,836,000 in 2023, indicating an increase of approximately 23.7%[59]. - The company recorded a net reversal of impairment losses of approximately HKD 362,000 for trade receivables and other receivables during the interim period[75]. - The group recorded an operating loss of approximately HKD 11,620,000 for the period, compared to a loss of HKD 19,310,000 in 2023[94]. Assets and Liabilities - The company's cash and cash equivalents decreased to HKD 24,741,000 from HKD 38,228,000, a decline of 35.3%[16]. - Non-current assets totaled HKD 7,857,000 as of September 30, 2024, compared to HKD 7,268,000 as of March 31, 2024, representing an increase of 8.1%[16]. - The company's total equity decreased to HKD 98,270,000 from HKD 108,679,000, a decline of 9.6%[18]. - The company reported a significant decrease in total liabilities, with current liabilities at HKD 15,651,000, down from HKD 17,603,000, a reduction of 11.1%[16]. - The total liabilities as of September 30, 2024, were approximately HKD 17,010,000, with a debt-to-equity ratio of approximately 16.4%[96]. Revenue Breakdown - The total revenue for the six months ending September 30, 2024, was HKD 9,355 million, with external sales from publishing and intellectual property licensing contributing HKD 7,574 million and digital marketing contributing HKD 1,781 million[28][50]. - The revenue from comic book sales was HKD 6,275 million, while revenue from intellectual property licensing was HKD 1,299 million for the six months ending September 30, 2023[32][33]. - The group’s digital marketing revenue in China was HKD 1,781 million for the six months ending September 30, 2023[34]. - The group’s total revenue for the six months ending September 30, 2024, included HKD 7,680 million from Hong Kong and HKD 112 million from China[28]. - The digital marketing segment's revenue plummeted by 93.7% to HKD 112,000 in 2024, down from HKD 1,781,000 in 2023, following a significant reduction in operations[108]. - The group plans to expand its publishing and licensing business, with revenues from this segment reported at HKD 7,680,000 in 2024 compared to HKD 7,574,000 in 2023[107]. Operational Changes and Strategies - The company has not disclosed any new product developments or market expansion strategies during this reporting period[2]. - The group is in the process of voluntary liquidation for two non-wholly owned subsidiaries, which is expected to reduce losses and reallocate resources[102]. - The group has proposed to acquire 100% equity of a company for a total consideration of HKD 63,000,000, to be settled through the issuance of approximately 191,000,000 new shares[100]. - The group has invested in the development and production of natural language processing software and chipsets, focusing on Chinese voice recognition, and has obtained several invention patents[111]. - The group aims to quickly bring the natural language processing division to market to generate profits, with total employees at 50 as of September 30, 2024, down from 55 a year earlier[114]. - Strategic partnerships with iFlytek and Brain Technology have led to the development of AI voice interaction technology, with products like the Flying Dragon Master mobile phone and IoT applications set to launch[114]. - The group is expanding its comic business in response to the ongoing cultural trend in Hong Kong, while maintaining traditional comic publishing and licensing operations[114]. Employee and Cost Management - Employee costs, including directors' remuneration, decreased to HKD 8,369,000 for the six months ended September 30, 2024, from HKD 10,231,000 in 2023, representing a reduction of approximately 18.2%[59]. - The group employed a total of 50 employees as of September 30, 2024, with employee costs from operations amounting to approximately HKD 8,835,000 for the six months ended September 30, 2024[98]. - Administrative expenses totaled approximately HKD 11,935,000, a decrease from HKD 15,535,000 in the previous year, primarily due to ongoing efforts to streamline operations and control costs[90][91]. Tax and Other Income - The estimated tax expense for Hong Kong profits tax for the six months ended September 30, 2024, was HKD (21,000), compared to HKD (142,000) in 2023[64]. - Other income for the six months ended September 30, 2024, includes estimated interest income from receivables of HKD 140,000, compared to zero for the same period in 2023[52]. - The fair value change gains (losses) on financial assets recognized in profit or loss for the six months ended September 30, 2024, were HKD 638,000, compared to a loss of HKD 5,503,000 in 2023[54]. - The net foreign exchange gain for the six months ended September 30, 2024, was HKD 241,000, compared to a loss of HKD 147,000 in 2023[54].

CORPORATE INFORMATION [Corporate Structure and Key Personnel](index=3&type=section&id=Corporate%20Structure%20and%20Key%20Personnel) The company's board comprises executive, non-executive, and independent non-executive directors, with Mr. Kwan Kin Chung as Managing Director and Mr. Wong Kon Man as Chairman - Executive Director: Mr. Kwan Kin Chung (Managing Director)[6](index=6&type=chunk) - Non-Executive Directors: Mr. Wong Kon Man (Chairman), Dr. Liu Ka Ying (Vice Chairman)[6](index=6&type=chunk) - Independent Non-Executive Directors: Mr. Wong Kwan Kit, Mr. Mong Yat Lik. Mr. Fan Chun Wah resigned on May 6, 2024[6](index=6&type=chunk) - Mr. Yuen Kin resigned as Executive Director on May 6, 2024[6](index=6&type=chunk) [Committees and Professional Advisors](index=3&type=section&id=Committees%20and%20Professional%20Advisors) The company has established Corporate Governance, Audit, Remuneration, and Nomination Committees, with key advisors including HSBC and Kadolier CPA Limited - Audit Committee members include Mr. Wong Kwan Kit, Mr. Mong Yat Lik, and Mr. Wong Kon Man, who was appointed on May 6, 2024[7](index=7&type=chunk)[8](index=8&type=chunk) - Remuneration Committee members include Mr. Wong Kwan Kit, Mr. Mong Yat Lik (appointed May 6, 2024), and Mr. Kwan Kin Chung[7](index=7&type=chunk)[8](index=8&type=chunk) - Nomination Committee members include Mr. Kwan Kin Chung, Mr. Wong Kwan Kit, and Mr. Mong Yat Lik (appointed May 6, 2024)[10](index=10&type=chunk)[11](index=11&type=chunk) - The company's auditor is Kadolier CPA Limited[10](index=10&type=chunk)[11](index=11&type=chunk) [Company Details](index=4&type=section&id=Company%20Details) The company's registered office is in Bermuda, with its principal place of business in Hong Kong, and its stock code is 343 - The company's registered office is located at Victoria Place, 5th Floor, 31 Victoria Street, Hamilton HM 10, Bermuda[10](index=10&type=chunk)[11](index=11&type=chunk) - The company's principal place of business is located at Unit 1502, 15th Floor, Far East Finance Centre, 16 Harcourt Road, Admiralty, Hong Kong[10](index=10&type=chunk)[11](index=11&type=chunk) - The company's stock code is **343**[13](index=13&type=chunk) CHAIRMAN'S STATEMENT [Results](index=6&type=section&id=RESULTS) For the year ended March 31, 2024, the company's consolidated turnover decreased by 34.1% to HKD 20,158 thousands, with a narrowed loss attributable to equity holders 2024 Fiscal Year Key Financial Data (Chairman's Statement) | Indicator | 2024 (HKD thousands) | 2023 (HKD thousands) | Year-on-Year Change | | :--- | :--- | :--- | :--- | | Consolidated Turnover | 20,158 | 30,600 | -34.1% | | Loss Attributable to Equity Holders | 20,782 | 37,223 | -44.2% (loss narrowed) | | Loss Per Share | 1.2 HK cents | 2.2 HK cents | -45.5% (loss narrowed) | - The Board has resolved not to declare a final dividend for the year ended March 31, 2024 (2023: nil)[16](index=16&type=chunk)[19](index=19&type=chunk) [Business Review](index=6&type=section&id=BUSINESS%20REVIEW) The group's total revenue declined due to slow post-pandemic economic recovery and changing consumption patterns, leading to resource conservation and business restructuring - Overall slow economic recovery, changing consumption patterns, and weak business activities led to a **34.1% year-on-year decrease** in the Group's total revenue[17](index=17&type=chunk)[20](index=20&type=chunk) Revenue by Business Segment (Chairman's Statement) | Business Segment | 2024 (HKD thousands) | 2023 (HKD thousands) | Year-on-Year Change | | :--- | :--- | :--- | :--- | | Publishing and IP Licensing | 15,104 | 11,983 | +26.0% | | Digital Marketing | 2,597 | 15,328 | -83.1% | | Retail and Wholesale | 2,457 | 3,289 | -25.3% | - Digital marketing business significantly scaled down, with Beijing Yiqimen Technology Co., Ltd. in the final stage of voluntary liquidation and Beijing Xinghe Engine Information Technology Co., Ltd. commencing voluntary liquidation, reducing total staff from 9 to 3 to save costs[22](index=22&type=chunk)[23](index=23&type=chunk)[24](index=24&type=chunk) - Publishing and IP licensing business revenue increased, primarily due to increased publishing sales from more Japanese manga licensing[27](index=27&type=chunk)[30](index=30&type=chunk) - Retail and wholesale business revenue decreased but is expected to gradually recover with economic revival, as the Group focuses on high-volume sales for positive cash flow and inventory clearance[28](index=28&type=chunk)[31](index=31&type=chunk) - The Group continues to invest in natural language processing technology, focusing on Chinese speech recognition software and chipset development, and has established strategic partnerships with iFlytek and Brain Robotics[29](index=29&type=chunk)[32](index=32&type=chunk)[34](index=34&type=chunk)[36](index=36&type=chunk) - Net operating expenses for the natural language processing business were approximately **HKD 2,873 thousands**, mainly for personnel and business promotion, with 13 employees in this segment[35](index=35&type=chunk)[37](index=37&type=chunk) [Prospect](index=10&type=section&id=PROSPECT) The Group is shifting its focus to natural language processing while maintaining the sustainability of other businesses, seeking new financing for AI software development - The Group will shift its focus to natural language processing business while maintaining the sustainable development and profitability of other business segments[45](index=45&type=chunk)[48](index=48&type=chunk) - Approximately **HKD 17,420 thousands** of unutilized net proceeds from the subscription have been reallocated as general working capital[40](index=40&type=chunk)[42](index=42&type=chunk) - The convertible bond placement, originally planned for natural language processing technology development and IP activation, was terminated in July 2023 due to weak market conditions and insufficient liquidity, but the Group will continue to seek new financing[41](index=41&type=chunk)[43](index=43&type=chunk) - AI voice real-time human-computer interaction technology has entered the product application stage, with the first generation Feilong Master human-computer interaction mobile phone soon to be launched[46](index=46&type=chunk)[48](index=48&type=chunk) - The Group's independently developed Feilong Code Chinese AI Computer Code is mature, fully adaptable to various operating systems and mainstream chip architectures, and has partnered with major AI manufacturers to launch new products[47](index=47&type=chunk)[48](index=48&type=chunk) - Short dramas and films adapted from Hong Kong comics have driven demand for Hong Kong comic IP, and the Group will further activate IP with partners, expecting significant revenue contributions[51](index=51&type=chunk)[53](index=53&type=chunk) MANAGEMENT DISCUSSION AND ANALYSIS [Financial Results](index=13&type=section&id=FINANCIAL%20RESULTS) For the year ended March 31, 2024, the Group's consolidated net loss significantly decreased by 44.2% to HKD 20,782 thousands, primarily due to reduced digital marketing operations 2024 Fiscal Year Key Financial Data (Management Discussion and Analysis) | Indicator | 2024 (HKD thousands) | 2023 (HKD thousands) | Year-on-Year Change | | :--- | :--- | :--- | :--- | | Consolidated Net Loss | 20,782 | 37,223 | -44.2% (loss narrowed) | | Loss Per Share | 1.2 HK cents | 2.2 HK cents | -45.5% (loss narrowed) | | Total Revenue | 20,158 | 30,600 | -34.1% | | Gross Profit | 9,851 | 14,516 | -32.1% | | Gross Profit Margin | 48.9% | 47.4% | +1.5 percentage points | | Selling Expenses | 1,949 | 4,891 | -60.1% | | Administrative Expenses | 28,909 | 31,078 | -7.0% | | Other Impairment Losses | 971 | 2,023 | -52.0% | | Other Expenses | 7,860 | 14,631 | -46.3% | | Loss for the Year | 20,929 | 38,655 | -45.8% (loss narrowed) | - Digital marketing business revenue significantly decreased from **HKD 15,328 thousands** to **HKD 2,597 thousands**, mainly due to reduced operating scale[57](index=57&type=chunk)[59](index=59&type=chunk) - Publishing and IP licensing business revenue increased by approximately **26.0%**, benefiting from increased publishing sales due to more Japanese manga licensing[61](index=61&type=chunk)[64](index=64&type=chunk) - Gross profit margin increased to **48.9%**, primarily due to significant reduction in production costs from the restructuring of the digital marketing business[63](index=63&type=chunk)[65](index=65&type=chunk)[66](index=66&type=chunk) - Administrative expenses decreased mainly due to reduced digital marketing business activities and ongoing cost control[69](index=69&type=chunk)[71](index=71&type=chunk) - Other impairment losses include **HKD 254 thousands** for right-of-use assets, **HKD 560 thousands** for prepayments for unpublished comics, and **HKD 157 thousands** for an associate[73](index=73&type=chunk)[74](index=74&type=chunk)[76](index=76&type=chunk) - As of March 31, 2024, the Group's net assets were **HKD 108,679 thousands**, with net assets per share of **HKD 0.07**[80](index=80&type=chunk) [Liquidity and Financial Resources](index=18&type=section&id=LIQUIDITY%20AND%20FINANCIAL%20RESOURCES) As of March 31, 2024, the Group maintained sufficient liquidity with HKD 38,228 thousands in cash and bank balances and a current ratio of 6.8 2024 Fiscal Year Liquidity and Financial Resources | Indicator | 2024 (HKD thousands) | 2023 (HKD thousands) | Year-on-Year Change | | :--- | :--- | :--- | :--- | | Cash and Bank Balances | 38,228 | 61,497 | -37.9% | | Financial Assets at FVTPL | 1,940 | 8,621 | -77.5% | | Net Current Assets | 101,411 | 133,475 | -24.0% | | Current Ratio | 6.8 | 10.0 | -32.0% | | Total Liabilities | 17,603 | 15,106 | +16.5% | | Gearing Ratio | 15.5% | 10.9% | +4.6 percentage points | - The Group is primarily exposed to exchange rate fluctuations of USD, AUD, JPY, and HKD against RMB, but has no significant foreign exchange hedging policy[83](index=83&type=chunk)[86](index=86&type=chunk) - The Board believes the Group has sufficient liquidity to support daily operations and maintains a prudent and conservative financial management strategy[85](index=85&type=chunk)[86](index=86&type=chunk) [Deposits Paid for Intangible Assets](index=19&type=section&id=DEPOSITS%20PAID%20FOR%20INTANGIBLE%20ASSETS) As of March 31, 2024, the Group paid approximately HKD 33,269 thousands in deposits for natural language processing technology development and software chipset production - As of March 31, 2024, the Group had paid approximately **HKD 33,269 thousands** in deposits for natural language processing technology development and software chipset production[88](index=88&type=chunk)[90](index=90&type=chunk) - These intangible asset deposits are primarily for the design and implementation of Chinese speech recognition chips, expected to be widely applied in various electronic devices or application environments[88](index=88&type=chunk)[90](index=90&type=chunk) [Employment and Remuneration Policies](index=19&type=section&id=EMPLOYMENT%20AND%20REMUNERATION%20POLICIES) As of March 31, 2024, the Group had 47 employees with total staff costs of approximately HKD 21,061 thousands, and management regularly reviews remuneration to maintain competitiveness 2024 Fiscal Year Employment and Remuneration Data | Indicator | 2024 | 2023 | | :--- | :--- | :--- | | Total Employees | 47 | 52 | | Hong Kong Employees | 31 | - | | China Employees | 16 | - | | Total Staff Costs | 21,061,000 HKD | 24,238,000 HKD | | Employee Severance Provision | 1,560,000 HKD | 0 HKD | - Management regularly reviews remuneration packages and provides discretionary bonuses and incentive share options based on Group and individual performance[89](index=89&type=chunk)[91](index=91&type=chunk) [Change in Use of Proceeds from the Subscription of New Shares Under Specific Mandate](index=20&type=section&id=Change%20in%20Use%20of%20Proceeds%20from%20the%20Subscription%20of%20New%20Shares%20Under%20Specific%20Mandate) Due to reduced digital marketing operations, the company reallocated approximately HKD 17,420 thousands of unutilized proceeds from the 2021 share subscription to general working capital - The 2021 subscription of new shares raised approximately **HKD 41,575 thousands** net, originally planned for marketing, KOL management services, potential acquisitions, and general working capital[40](index=40&type=chunk)[42](index=42&type=chunk)[96](index=96&type=chunk) - As of March 31, 2023, approximately **HKD 17,420 thousands** of the net proceeds from the subscription remained unutilized[97](index=97&type=chunk)[99](index=99&type=chunk) - The company resolved on June 12, 2023, to reallocate the unutilized net proceeds of approximately **HKD 17,420 thousands** to the Group's general working capital[98](index=98&type=chunk)[100](index=100&type=chunk) [Proposed Acquisition](index=22&type=section&id=PROPOSED%20ACQUISITION) The company plans to acquire all equity in Brain Robotics (Shenzhen) Co., Ltd. for HKD 63,000 thousands, payable by issuing 191,000,000 new shares, pending shareholder approval - The company plans to acquire all equity in Brain Robotics (Shenzhen) Co., Ltd. for a total consideration of **HKD 63,000 thousands**[102](index=102&type=chunk)[104](index=104&type=chunk) - The acquisition consideration will be paid by issuing **191,000,000 new shares** at an issue price of approximately **HKD 0.33 per share**[102](index=102&type=chunk)[104](index=104&type=chunk) - The acquisition is subject to shareholder approval and has not been completed as of the reporting date, requiring additional time to fulfill agreement conditions[103](index=103&type=chunk)[105](index=105&type=chunk)[1387](index=1387&type=chunk)[1389](index=1389&type=chunk) [Placing of Convertible Bonds Under General Mandate](index=23&type=section&id=Placing%20of%20Convertible%20Bonds%20Under%20General%20Mandate) The company's planned placement of convertible bonds for up to HKD 100,000 thousands, intended for natural language processing development, was terminated in July 2023 due to market conditions - The company had planned to place convertible bonds with a principal amount of up to **HKD 100,000 thousands**, with an initial conversion price of **HKD 0.50 per share**[106](index=106&type=chunk)[110](index=110&type=chunk) - The net proceeds from the placement, approximately **HKD 98,500 thousands**, were intended for natural language processing technology development (**HKD 68,950 thousands**) and IP activation and promotion (**HKD 19,700 thousands**)[41](index=41&type=chunk)[43](index=43&type=chunk)[106](index=106&type=chunk)[110](index=110&type=chunk) - This convertible bond placement was terminated on July 24, 2023, due to weak overall market sentiment and insufficient market liquidity[41](index=41&type=chunk)[43](index=43&type=chunk)[107](index=107&type=chunk)[111](index=111&type=chunk) [Disposal of a Non-Wholly Owned Subsidiary and Voluntary Liquidation of Two Non-Wholly Owned Subsidiaries](index=23&type=section&id=Disposal%20of%20a%20Non-Wholly%20Owned%20Subsidiary%20and%20Voluntary%20Liquidation%20of%20Two%20Non-Wholly%20Owned%20Subsidiaries) The Group streamlined its digital marketing business by disposing of one subsidiary and initiating voluntary liquidation for two others, aiming to reduce losses and reallocate resources - The Group disposed of all equity in Beijing Huichuan Network Information Technology Co., Ltd., an indirect non-wholly owned subsidiary, to an independent third party for a total cash consideration of **RMB 50,000**[109](index=109&type=chunk)[112](index=112&type=chunk) - The voluntary liquidation of Beijing Yiqimen Technology Co., Ltd. was completed in March 2024, while the voluntary liquidation of Beijing Xinghe Engine Information Technology Co., Ltd. was not completed as of the reporting date[115](index=115&type=chunk)[117](index=117&type=chunk) - The Group believes voluntary liquidation helps reduce losses and reallocate resources to other existing businesses and new opportunities[116](index=116&type=chunk)[118](index=118&type=chunk) - The Group disposed of a **7% equity interest** in Feilongxin Brain-like Intelligent Technology (Zhuhai) Co., Ltd. for zero consideration, reducing its effective interest from 100% to 93%[114](index=114&type=chunk)[117](index=117&type=chunk) [Capital Commitments and Contingent Liabilities](index=25&type=section&id=CAPITAL%20COMMITMENTS%20AND%20CONTINGENT%20LIABILITIES) As of March 31, 2024, the Group had no significant capital commitments or contingent liabilities - As of March 31, 2024, the Group had no significant capital commitments or contingent liabilities (2023: nil)[120](index=120&type=chunk)[121](index=121&type=chunk) DIRECTORS' REPORT [Principal Activities](index=26&type=section&id=PRINCIPAL%20ACTIVITIES) The company operates as an investment holding company, with details of its principal associates and subsidiaries provided in the consolidated financial statements - The company is an investment holding company[125](index=125&type=chunk)[130](index=130&type=chunk) - Details of the principal associates and subsidiaries are set out in notes 19 and 40 to the consolidated financial statements[125](index=125&type=chunk)[126](index=126&type=chunk)[130](index=130&type=chunk)[131](index=131&type=chunk) [Results and Appropriations](index=26&type=section&id=RESULTS%20AND%20APPROPRIATIONS) The Group's results and financial position for the year ended March 31, 2024, are disclosed in the financial statements, with no dividends paid or proposed - The Group's results and financial position for the year ended March 31, 2024, are disclosed on pages 82 to 298 of the financial statements[127](index=127&type=chunk)[132](index=132&type=chunk) - No dividends were paid or proposed for 2024, and no dividends have been proposed since the end of the reporting period (2023: nil)[138](index=138&type=chunk)[142](index=142&type=chunk) [Major Customers and Suppliers](index=26&type=section&id=MAJOR%20CUSTOMERS%20AND%20SUPPLIERS) The Group's top five customers accounted for 85.3% of total turnover from continuing operations, and its top five suppliers accounted for 84.1% of total purchases - During the year, the Group's top five customers accounted for **85.3%** of total turnover from continuing operations, with the largest customer accounting for **28.0%**[128](index=128&type=chunk)[133](index=133&type=chunk) - During the year, the Group's top five suppliers accounted for **84.1%** of total purchases from continuing operations, with the largest supplier accounting for **34.6%**[134](index=134&type=chunk) - No directors, their associates, or shareholders holding more than 5% of the company's share capital had any interest in any of the Group's top five customers or suppliers during the year[136](index=136&type=chunk)[140](index=140&type=chunk) [Business Review](index=27&type=section&id=BUSINESS%20REVIEW) The Group's business review, including a fair review of operations, key risks, uncertainties, and future developments, is detailed in various sections of the annual report - The Group's business review is detailed in the "Chairman's Statement," "Management Discussion and Analysis," and "Financial Summary" sections of the annual report[137](index=137&type=chunk)[141](index=141&type=chunk) - No significant events affecting the Group have occurred since the financial year-end of March 31, 2024, other than those disclosed in company announcements[137](index=137&type=chunk)[141](index=141&type=chunk) [Property and Equipment](index=27&type=section&id=PROPERTY%20AND%20EQUIPMENT) During the year, the Group spent approximately HKD 36 thousands on property and equipment acquisitions, with details of changes provided in note 16 to the consolidated financial statements - During the year, the Group acquired property and equipment totaling approximately **HKD 36 thousands**[139](index=139&type=chunk)[143](index=143&type=chunk) - Details of changes in property and equipment are set out in note 16 to the consolidated financial statements[139](index=139&type=chunk)[144](index=144&type=chunk) [Share Capital and Share Options](index=28&type=section&id=SHARE%20CAPITAL%20AND%20SHARE%20OPTIONS) Details of changes in the company's share capital and share option schemes during the year are provided in notes 33 and 34 to the consolidated financial statements - Details of changes in the company's share capital and share option schemes during the year are set out in notes 33 and 34 to the consolidated financial statements, respectively[147](index=147&type=chunk)[148](index=148&type=chunk) [Reserves](index=28&type=section&id=RESERVES) Changes in the Group's and company's reserves during the year are detailed in the consolidated statement of changes in equity and note 43, with no distributable reserves as of March 31, 2024 - Changes in the Group's and company's reserves during the year are set out in the consolidated statement of changes in equity and note 43 to the consolidated financial statements, respectively[149](index=149&type=chunk)[152](index=152&type=chunk) - As of March 31, 2024, the company had no reserves available for distribution to shareholders[150](index=150&type=chunk)[153](index=153&type=chunk) [Financial Summary](index=28&type=section&id=FINANCIAL%20SUMMARY) A summary of the Group's results, assets, and liabilities for the past five fiscal years is presented on pages 299 and 300 of the annual report - A summary of the Group's results, assets, and liabilities for the past five fiscal years is set out on pages 299 and 300 of the annual report[151](index=151&type=chunk)[154](index=154&type=chunk) [Directors](index=28&type=section&id=DIRECTORS) As of the reporting date, the company's directors include Mr. Kwan Kin Chung (Executive Director), Mr. Wong Kon Man (Chairman), Dr. Liu Ka Ying (Vice Chairman), Mr. Wong Kwan Kit, and Mr. Mong Yat Lik (Independent Non-Executive Directors) - As of the reporting date, the Executive Director is Mr. Kwan Kin Chung (Managing Director)[155](index=155&type=chunk) - The Non-Executive Directors are Mr. Wong Kon Man (Chairman) and Dr. Liu Ka Ying (Vice Chairman)[155](index=155&type=chunk) - The Independent Non-Executive Directors are Mr. Wong Kwan Kit and Mr. Mong Yat Lik. Mr. Yuen Kin and Mr. Fan Chun Wah have resigned[155](index=155&type=chunk) - All directors, including executive and non-executive directors, are subject to retirement by rotation and re-election at the annual general meeting[156](index=156&type=chunk)[159](index=159&type=chunk) - The company has received annual confirmations of independence from each independent non-executive director and considers all independent non-executive directors to be independent[158](index=158&type=chunk)[160](index=160&type=chunk) [Biographical Details of Directors and Senior Management](index=30&type=section&id=BIOGRAPHICAL%20DETAILS%20OF%20DIRECTORS%20AND%20SENIOR%20MANAGEMENT) This section provides detailed backgrounds, professional qualifications, and experience of the company's executive, non-executive, independent non-executive directors, and senior management - Mr. Kwan Kin Chung (Executive Director and Managing Director) holds a Bachelor of Arts in Economics from Sun Yat-sen University and has extensive experience in business restructuring and corporate investment[163](index=163&type=chunk)[165](index=165&type=chunk) - Mr. Wong Kon Man (Non-Executive Director and Chairman) holds a Bachelor of Business Administration from the University of Hawaii at Manoa, with over **26 years of experience** in fund management and capital market investment, known as the "Godfather of Asian SPACs"[169](index=169&type=chunk)[171](index=171&type=chunk)[174](index=174&type=chunk)[175](index=175&type=chunk) - Dr. Liu Ka Ying (Non-Executive Director and Vice Chairman) holds a dual Bachelor's degree in Business Management Studies from the University of York and a Doctor of Business Administration from Victoria University, Switzerland, with extensive experience in fund management, financing, and investment[184](index=184&type=chunk)[186](index=186&type=chunk) - Dr. Liu Yan Hung (Chief Executive Officer) has over **26 years of work experience**, with over **11 years** focused on the information technology and artificial intelligence industries in China and Southeast Asia[210](index=210&type=chunk)[212](index=212&type=chunk) [Share Option Scheme](index=40&type=section&id=SHARE%20OPTION%20SCHEME) The company adopted share option schemes in 2013 and 2023 to incentivize employees and attract talent, with 14,000,000 options outstanding under the 2013 scheme - The company adopted the 2013 Share Option Scheme on August 12, 2013, and the 2023 Share Option Scheme on August 29, 2023[219](index=219&type=chunk)[222](index=222&type=chunk)[251](index=251&type=chunk)[1183](index=1183&type=chunk) - The 2013 scheme expired on August 11, 2023, but options already granted remain valid[224](index=224&type=chunk)[228](index=228&type=chunk)[247](index=247&type=chunk)[1163](index=1163&type=chunk) Share Option Scheme Overview | Indicator | 2013 Scheme | 2023 Scheme | | :--- | :--- | :--- | | Number of Shares Available for Issue as of March 31, 2024 | 14,000,000 | 0 | | Number of Options Available for Grant as of March 31, 2024 | 0 | 166,865,681 | | Percentage of Weighted Average Issued Shares | 0.84% | 10% | | Sub-limit for Service Providers | Not applicable | 50,059,704 | | Granted/Exercised/Cancelled/Lapsed in FY2024 | None | None | - Under the 2013 scheme, Non-Executive Director Mr. Wong Kon Man and an advisor were granted a total of **14,000,000 share options** on April 27, 2022, with an exercise price of **HKD 0.72 per share** and an exercise period until April 26, 2025[234](index=234&type=chunk)[247](index=247&type=chunk)[1161](index=1161&type=chunk)[1165](index=1165&type=chunk) [Arrangements to Purchase Shares or Debentures](index=43&type=section&id=ARRANGEMENTS%20TO%20PURCHASE%20SHARES%20OR%20DEBENTURES) During the year, neither the company nor its subsidiaries entered into any arrangements enabling directors to acquire benefits by purchasing shares or debentures of the company or any other corporation - During the year, neither the company nor its subsidiaries entered into any arrangements enabling directors to acquire benefits by purchasing shares or debentures of the company or any other corporation[235](index=235&type=chunk)[236](index=236&type=chunk) [Disclosure of Interests](index=44&type=section&id=DISCLOSURE%20OF%20INTERESTS) As of March 31, 2024, Non-Executive Director Mr. Wong Kon Man held 8,000,000 share options, and major shareholders held significant interests in the company's shares Directors' Interests in Company Share Options (as of March 31, 2024) | Director Name | Capacity | Nature of Interest | Number of Share Options | Exercise Price Per Share (HKD) | Exercise Period | Approximate Percentage of Issued Share Capital | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | Mr. Wong Kon Man | Beneficial Owner | Personal Interest | 8,000,000 | 0.72 | April 27, 2022 to April 26, 2025 | 0.48% | Major Shareholders' Interests in Company Shares and Related Shares (as of March 31, 2024) | Name | Capacity | Number of Shares Held | Approximate Percentage of Issued Share Capital | | :--- | :--- | :--- | :--- | | L&W Holding Limited | Beneficial Owner | 178,767,312 | 10.71% | | Mr. Li Pak Sze | Beneficial Owner, Interest in Controlled Corporation and Spouse's Interest | 276,975,112 | 16.6% | | Ms. Chow Lai Wah | Beneficial Owner, Interest in Controlled Corporation and Spouse's Interest | 276,975,112 | 16.6% | - Mr. Li Pak Sze is deemed to have an interest in a total of **276,975,112 shares** of the company through L&W Holding Limited (65% owned) and his spouse Ms. Chow Lai Wah's interest[255](index=255&type=chunk) [Directors' Interests in Contracts](index=48&type=section&id=DIRECTORS'%20INTERESTS%20IN%20CONTRACTS) Except as disclosed in note 30 to the consolidated financial statements, no director had a material direct or indirect interest in any significant contract entered into by the company or its subsidiaries during the year or at year-end - Except as disclosed in note 30 to the consolidated financial statements, no director had a material direct or indirect interest in any significant contract entered into by the company or its subsidiaries during the year or at year-end[257](index=257&type=chunk)[261](index=261&type=chunk) [Directors' Interests in Competing Business](index=48&type=section&id=DIRECTORS'%20INTERESTS%20IN%20COMPETING%20BUSINESS) During the year or at year-end, no director or their respective associates had any business that competes or might compete directly or indirectly with the Group's business - During the year or at year-end, no director or their respective associates had any business that competes or might compete directly or indirectly with the Group's business[258](index=258&type=chunk)[262](index=262&type=chunk) [Pre-emptive Rights](index=48&type=section&id=PRE-EMPTIVE%20RIGHTS) There are no provisions for pre-emptive rights in the company's bye-laws or Bermuda law that would require the company to offer new shares proportionally to existing shareholders - There are no provisions for pre-emptive rights in the company's bye-laws or Bermuda law that would require the company to offer new shares proportionally to existing shareholders[259](index=259&type=chunk)[263](index=263&type=chunk) [Permitted Indemnity](index=48&type=section&id=PERMITTED%20INDEMNITY) Each director and officer is entitled to indemnification from the company's assets for losses incurred in the performance of their duties, and the company has arranged appropriate liability insurance - Each director and other officer of the company is entitled to indemnification from the company's assets for losses or damages incurred or arising from the performance of their duties[260](index=260&type=chunk)[264](index=264&type=chunk) - The company has arranged appropriate directors' and officers' liability insurance for its directors and senior officers[260](index=260&type=chunk)[265](index=265&type=chunk) [Repurchase, Sale or Redemption of Listed Securities](index=49&type=section&id=REPURCHASE,%20SALE%20OR%20REDEMPTION%20OF%20LISTED%20SECURITIES) For the year ended March 31, 2024, neither the company nor its subsidiaries repurchased, sold, or redeemed any of the company's listed securities - For the year ended March 31, 2024, neither the company nor its subsidiaries repurchased, sold, or redeemed any of the company's listed securities[267](index=267&type=chunk)[269](index=269&type=chunk) [Audit Committee](index=49&type=section&id=AUDIT%20COMMITTEE) The Audit Committee, comprising two independent non-executive directors and one non-executive director, has reviewed the Group's accounting principles, internal controls, risk management, and financial reporting matters - The Audit Committee comprises Mr. Wong Kwan Kit, Mr. Mong Yat Lik (Independent Non-Executive Directors), and Mr. Wong Kon Man (Non-Executive Director)[268](index=268&type=chunk)[270](index=270&type=chunk) - The Committee has reviewed the Group's accounting principles and practices with management and discussed internal controls, risk management, and financial reporting matters, including the audited financial statements for the year ended March 31, 2024[268](index=268&type=chunk)[270](index=270&type=chunk) [Compliance with Laws and Regulations](index=50&type=section&id=COMPLIANCE%20WITH%20LAWS%20AND%20REGULATIONS) During the year, the Group complied with all material laws and regulations significantly affecting its business, with no major breaches or non-compliance incidents - During the year, the Group complied in all material respects with relevant laws and regulations that have a significant impact on its business[273](index=273&type=chunk)[276](index=276&type=chunk) - No material breaches or non-compliance with applicable laws and regulations occurred[273](index=273&type=chunk)[276](index=276&type=chunk) [Environmental Policies and Performance](index=50&type=section&id=ENVIRONMENTAL%20POLICIES%20AND%20PERFORMANCE) The Group is committed to environmental sustainability, complying with regulations, and implementing measures for resource efficiency, waste reduction, and energy saving - The Group is committed to achieving environmental sustainability, complying with relevant environmental laws and regulations, and implementing effective measures for efficient resource utilization, waste reduction, and energy saving[274](index=274&type=chunk)[277](index=277&type=chunk) - The Group's internal production facilities operate in accordance with relevant environmental rules and regulations, and its environmental policies are regularly reviewed[274](index=274&type=chunk)[277](index=277&type=chunk) - The company's Environmental, Social and Governance Report will be published on its website in due course[275](index=275&type=chunk)[278](index=278&type=chunk) [Corporate Governance](index=51&type=section&id=CORPORATE%20GOVERNANCE) The report on the company's principal corporate governance practices is included on pages 52 to 72 of the annual report - The report on the company's principal corporate governance practices is included on pages 52 to 72 of the annual report[280](index=280&type=chunk)[283](index=283&type=chunk) [Compliance with the Model Code for Securities Transactions by Directors of Listed Issuers](index=51&type=section&id=Compliance%20with%20the%20Model%20Code%20for%20Securities%20Transactions%20by%20Directors%20of%20Listed%20Issuers) The company has adopted the Model Code for Securities Transactions by Directors of Listed Issuers, and all directors confirmed compliance during the year ended March 31, 2024 - The company has adopted the Model Code for Securities Transactions by Directors of Listed Issuers as its code of conduct for directors' dealings in the company's securities[281](index=281&type=chunk)[284](index=284&type=chunk) - Following specific enquiries, the company confirmed that all directors complied with the required standards set out in the Model Code for the year ended March 31, 2024[281](index=281&type=chunk)[284](index=284&type=chunk) [Sufficiency of Public Float](index=51&type=section&id=SUFFICIENCY%20OF%20PUBLIC%20FLOAT) Based on publicly available information and the directors' knowledge, the company maintained a sufficient public float as required by the Listing Rules as of the reporting date - As of the reporting date, the company maintained a sufficient public float as required by the Listing Rules[282](index=282&type=chunk)[285](index=285&type=chunk) [Auditor](index=52&type=section&id=AUDITOR) The company's financial statements for the year ended March 31, 2024, were audited by Kadolier CPA Limited, which is due to retire and will be proposed for re-appointment at the upcoming AGM - The company's financial statements for the year ended March 31, 2024, were audited by Kadolier CPA Limited[288](index=288&type=chunk)[289](index=289&type=chunk) - Kadolier CPA Limited is due to retire and a resolution for its re-appointment will be proposed at the forthcoming annual general meeting[288](index=288&type=chunk)[289](index=289&type=chunk) CORPORATE GOVERNANCE REPORT [Introduction](index=53&type=section&id=INTRODUCTION) The Group is committed to maintaining high standards of corporate governance through effective internal controls and board transparency to be accountable to all shareholders - The Group is committed to maintaining high standards of corporate governance, with effective internal control measures and enhanced board transparency, to be accountable to all shareholders[292](index=292&type=chunk)[295](index=295&type=chunk) [Corporate Governance Practices](index=53&type=section&id=CORPORATE%20GOVERNANCE%20PRACTICES) The company complied with all code provisions of the Corporate Governance Code during the period from April 1, 2023, to March 31, 2024, except for code provision B.2.2 regarding independent non-executive directors' tenure - The company complied with all code provisions of the Corporate Governance Code during the period from April 1, 2023, to March 31, 2024, except for code provision B.2.2[293](index=293&type=chunk)[295](index=295&type=chunk) - Code provision B.2.2 requires each director to retire by rotation at least once every three years, while the company's independent non-executive directors are not appointed for a specific term, but all directors are subject to retirement by rotation[294](index=294&type=chunk)[295](index=295&type=chunk) [Minimum Numbers of Independent Non-Executive Directors](index=54&type=section&id=Minimum%20Numbers%20of%20Independent%20Non-Executive%20Directors) Following Mr. Fan Chun Wah's resignation on May 6, 2024, the number of independent non-executive directors fell below the Listing Rules' minimum, and the Board is seeking a replacement - Following Mr. Fan Chun Wah's resignation on May 6, 2024, the number of independent non-executive directors fell below the minimum required by Listing Rule 3.10(1)[297](index=297&type=chunk)[300](index=300&type=chunk) - The Board is identifying suitable candidates to fill the vacancy and will make an appointment within three months from Mr. Fan's resignation date[298](index=298&type=chunk)[300](index=300&type=chunk) [Minimum Numbers of Corporate Governance Committee](index=54&type=section&id=Minimum%20Numbers%20of%20Corporate%20Governance%20Committee) The Corporate Governance Committee currently has three members, which is below the four members stipulated in its written terms of reference, and the Board is seeking to fill the vacancy - The Corporate Governance Committee currently comprises three members: Mr. Kwan Kin Chung, Mr. Wong Kon Man, and Mr. Yu Chi Wing[299](index=299&type=chunk)[301](index=301&type=chunk) - The number of committee members is below the four members stipulated in its written terms of reference, and the Board has begun identifying candidates to fill the vacancy[299](index=299&type=chunk)[301](index=301&type=chunk) [Directors' Securities Transactions](index=55&type=section&id=DIRECTORS'%20SECURITIES%20TRANSACTIONS) The company has adopted the Model Code for Securities Transactions by Directors of Listed Issuers, and all directors confirmed compliance during the year ended March 31, 2024 - The company has adopted the Model Code for Securities Transactions by Directors of Listed Issuers as the code of conduct for directors' securities transactions[303](index=303&type=chunk)[305](index=305&type=chunk) - All directors confirmed compliance with the required standards of the Model Code for the year ended March 31, 2024[303](index=303&type=chunk)[305](index=305&type=chunk) [Board of Directors](index=55&type=section&id=BOARD%20OF%20DIRECTORS) As of March 31, 2024, the Board comprised a Chairman, Vice Chairman, Managing Director, one Executive Director, and three Independent Non-Executive Directors, responsible for leadership and governance - As of March 31, 2024, the Board comprised a Chairman, Vice Chairman, Managing Director, one Executive Director, and three Independent Non-Executive Directors[304](index=304&type=chunk)[306](index=306&type=chunk) - The Board regularly convenes meetings to formulate overall strategies and oversee business development and financial performance[308](index=308&type=chunk)[309](index=309&type=chunk) Board Meeting and Annual General Meeting Attendance (FY2024) | Director | Board Meeting Attendance (attended/total) | AGM Attendance (attended/total) | | :--- | :--- | :--- | | Mr. Kwan Kin Chung | 4/4 | 1/1 | | Mr. Yuen Kin | 4/4 | 1/1 | | Mr. Wong Kon Man | 4/4 | 1/1 | | Dr. Liu Ka Ying | 4/4 | 1/1 | | Mr. Wong Kwan Kit | 4/4 | 1/1 | | Mr. Mong Yat Lik | 4/4 | 1/1 | | Mr. Fan Chun Wah | 4/4 | 1/1 | - The company has received annual confirmations of independence from each independent non-executive director and considers all independent non-executive directors to be independent[311](index=311&type=chunk)[314](index=314&type=chunk) [Roles and Responsibilities of Chairman and Chief Executive Officer](index=57&type=section&id=ROLES%20AND%20RESPONSIBILITIES%20OF%20CHAIRMAN%20AND%20CHIEF%20EXECUTIVE%20OFFICER) The roles of Chairman and Chief Executive Officer are segregated, with the Chairman responsible for board meetings and strategy, and the CEO for daily operations - The roles of Chairman and Chief Executive Officer are segregated, with the Chairman responsible for convening Board meetings and formulating business strategies[312](index=312&type=chunk)[315](index=315&type=chunk) - Dr. Liu Yan Hung was appointed Chief Executive Officer on March 5, 2023, primarily responsible for the Group's daily operations[312](index=312&type=chunk)[315](index=315&type=chunk) - The Board believes the company has established a robust corporate governance structure to ensure effective oversight of management[313](index=313&type=chunk)[316](index=316&type=chunk) [Terms of Non-Executive Directors](index=58&type=section&id=TERMS%20OF%20NON-EXECUTIVE%20DIRECTORS) Independent non-executive directors are not appointed for specific terms, but all directors are subject to retirement by rotation at annual general meetings, ensuring adequate corporate governance - The company's independent non-executive directors are not appointed for specific terms[318](index=318&type=chunk)[321](index=321&type=chunk) - All directors, including executive and independent non-executive directors, are subject to retirement by rotation at annual general meetings in accordance with Bye-law 110(A) of the company's Bye-laws[318](index=318&type=chunk)[321](index=321&type=chunk) [Directors' Continuous Training and Professional Development](index=58&type=section&id=DIRECTORS'%20CONTINUOUS%20TRAINING%20AND%20PROFESSIONAL%20DEVELOPMENT) All directors engage in continuous professional development to update their knowledge and skills, ensuring informed and relevant contributions to the Board - All directors engage in continuous professional development to update their knowledge and skills, ensuring informed and relevant contributions to the Board[319](index=319&type=chunk)[322](index=322&type=chunk) - Continuous professional development is conducted through reading materials on legal or regulatory updates and/or attending training courses provided by legal advisors[320](index=320&type=chunk)[323](index=323&type=chunk) [Audit Committee](index=59&type=section&id=AUDIT%20COMMITTEE) The Audit Committee meets at least twice annually to review financial results, internal controls, risk management, and financial reporting, chaired by Mr. Wong Kwan Kit - The Audit Committee meets at least twice annually to review annual and interim results, internal controls, risk management, and financial reporting matters[325](index=325&type=chunk)[327](index=327&type=chunk) - The Committee comprises two independent non-executive directors and one non-executive director, with Mr. Wong Kwan Kit serving as Chairman[328](index=328&type=chunk) Audit Committee Meeting Attendance (FY2024) | Director | Attendance (attended/total meetings) | | :--- | :--- | | Mr. Wong Kwan Kit | 3/3 | | Mr. Fan Chun Wah | 3/3 | | Mr. Mong Yat Lik | 3/3 | | Mr. Wong Kon Man | 0/0 | [Remuneration Committee](index=61&type=section&id=REMUNERATION%20COMMITTEE) The Remuneration Committee advises the Board on the Group's remuneration policies and structure, and reviews and determines the remuneration of executive directors and senior management - The Remuneration Committee is responsible for considering and recommending to the Board the Group's remuneration policies and structure, and for reviewing and determining the remuneration of executive directors and senior management[333](index=333&type=chunk)[334](index=334&type=chunk) - Directors' remuneration is determined based on their respective duties and responsibilities within the company, company performance, and current market conditions[333](index=333&type=chunk)[334](index=334&type=chunk) - The Remuneration Committee comprises two independent non-executive directors and one executive director, with Mr. Wong Kwan Kit serving as Chairman[335](index=335&type=chunk) [Nomination Committee](index=62&type=section&id=NOMINATION%20COMMITTEE) The Nomination Committee is responsible for developing and implementing director nomination policies, ensuring a diverse board with appropriate skills and experience - The Nomination Committee is responsible for developing nomination policies for Board consideration and implementing Board-approved nomination policies[338](index=338&type=chunk)[341](index=341&type=chunk) - The Nomination Committee comprises one executive director, Mr. Kwan Kin Chung, and two independent non-executive directors, Mr. Mong Yat Lik and Mr. Wong Kwan Kit[339](index=339&type=chunk)[342](index=342&type=chunk) - The director nomination policy aims to ensure the Board possesses appropriate skills, experience, and diversity, and to ensure Board continuity[340](index=340&type=chunk)[343](index=343&type=chunk) - The Board Diversity Policy aims to achieve Board diversity by considering factors such as gender, age, cultural and educational background, and professional experience[351](index=351&type=chunk)[352](index=352&type=chunk) Board Gender Ratio (as of March 31, 2024) | Category | Female | Male | | :--- | :--- | :--- | | Board | 14.3% | 85.7% | [Corporate Governance Committee](index=65&type=section&id=CORPORATE%20GOVERNANCE%20COMMITTEE) The Corporate Governance Committee advises the Board on proposed corporate transactions, but its current three-member composition is below the four members stipulated in its terms of reference - The Corporate Governance Committee is responsible for advising the Board on any proposed corporate transactions and providing a joint opinion on their appropriateness, feasibility, and prudence[356](index=356&type=chunk)[358](index=358&type=chunk) - The Committee currently comprises three members, with Mr. Kwan Kin Chung serving as Chairman, but this is below the four members stipulated in its written terms of reference[357](index=357&type=chunk)[358](index=358&type=chunk) [Accountability and Audit](index=66&type=section&id=ACCOUNTABILITY%20AND%20AUDIT) The Board is responsible for ensuring sound and effective risk management and internal control systems, which are reviewed annually to manage and mitigate risks - The Board is responsible for ensuring sound and effective risk management and internal control systems, and reviews their effectiveness at least annually[367](index=367&type=chunk)[370](index=370&type=chunk) - The Group's risk management and internal control systems are designed to manage and mitigate risks, not eliminate them, providing reasonable rather than absolute assurance[368](index=368&type=chunk)[371](index=371&type=chunk) - The Group employs a risk matrix approach to identify, assess, and manage significant risks, and continuously updates risk response measures[373](index=373&type=chunk)[376](index=376&type=chunk)[380](index=380&type=chunk)[383](index=383&type=chunk) - The Group engaged independent consultants to review its risk management and internal control systems, and the Board considers the systems adequate and effective, with no material deficiencies found[381](index=381&type=chunk)[384](index=384&type=chunk)[382](index=382&type=chunk)[385](index=385&type=chunk) - The Group has established policies for handling and disseminating inside information, requiring all employees to comply to ensure information security and compliance[387](index=387&type=chunk)[389](index=389&type=chunk) [Company Secretary](index=70&type=section&id=COMPANY%20SECRETARY) Ms. Li Yuk Ping, the company secretary and a full-time employee, complied with relevant professional training requirements under Listing Rule 3.29 during the year - Ms. Li Yuk Ping, the company secretary, is a full-time employee of the company[388](index=388&type=chunk)[390](index=390&type=chunk) - During the year, the company secretary complied with the relevant professional training requirements under Listing Rule 3.29[388](index=388&type=chunk)[390](index=390&type=chunk) [Shareholders' Rights](index=71&type=section&id=SHAREHOLDERS'%20RIGHTS) The company values shareholder interests, allowing shareholders to requisition extraordinary general meetings and ensuring all resolutions are voted by poll, with results published online - Shareholders may requisition an extraordinary general meeting in accordance with Bye-law 70 of the company's Bye-laws and Section 74 of the Companies Act of Bermuda[392](index=392&type=chunk)[394](index=394&type=chunk) - All resolutions at general meetings will be voted by poll, and the results will be published on the HKEX and company websites[397](index=397&type=chunk)[400](index=400&type=chunk) - Shareholders can submit enquiries to the Board through various channels, including telephone, fax, postal address, and the company website[398](index=398&type=chunk)[400](index=400&type=chunk) [Dividend Policy](index=72&type=section&id=DIVIDEND%20POLICY) The Board has adopted a dividend policy without a predetermined payout ratio, considering operating results, working capital, financial position, future prospects, and capital needs for dividend payments - The Board has adopted a dividend policy, but there is no predetermined dividend payout ratio[399](index=399&type=chunk)[401](index=401&type=chunk) - When considering dividend payments, the Board will comprehensively consider factors such as operating results, working capital, financial position, future prospects, and capital needs[399](index=399&type=chunk)[401](index=401&type=chunk) - The dividend policy does not constitute any commitment or obligation for the company to declare dividends[399](index=399&type=chunk)[401](index=401&type=chunk) [Investors Relations](index=73&type=section&id=INVESTORS%20RELATIONS) The Board prioritizes balanced, clear, and transparent communication to help shareholders and investors understand the Group's prospects and market environment - The Board highly values balanced, clear, and transparent communication to enable shareholders and investors to understand the Group's prospects and market operating environment[403](index=403&type=chunk)[405](index=405&type=chunk) - The company maintains contact with shareholders and other investors through various communication channels to ensure their opinions and concerns are understood and addressed constructively[403](index=403&type=chunk)[405](index=405&type=chunk) [Significant Changes in the Constitutional Documents](index=73&type=section&id=Significant%20Changes%20in%20the%20Constitutional%20Documents) There were no significant changes to the company's constitutional documents during the reporting period or up to the reporting date, with the amended bye-laws available online - There were no significant changes to the company's constitutional documents during the reporting period or up to the reporting date[404](index=404&type=chunk)[406](index=406&type=chunk) - The amended and restated company bye-laws are available for inspection on the HKEX and company websites[404](index=404&type=chunk)[406](index=406&type=chunk) INDEPENDENT AUDITOR'S REPORT [Opinion](index=74&type=section&id=OPINION) The auditor believes the consolidated financial statements for the year ended March 31, 2024, fairly present the Group's financial position, performance, and cash flows in accordance with HKFRSs and the Hong Kong Companies Ordinance - The auditor believes the consolidated financial statements fairly present the Group's consolidated financial position, financial performance, and cash flows in accordance with Hong Kong Financial Reporting Standards[410](index=410&type=chunk)[413](index=413&type=chunk) - The consolidated financial statements have been properly prepared in compliance with the disclosure requirements of the Hong Kong Companies Ordinance[410](index=410&type=chunk)[413](index=413&type=chunk) [Basis for Opinion](index=74&type=section&id=BASIS%20FOR%20OPINION) The audit was conducted in accordance with Hong Kong Standards on Auditing, with the auditor maintaining independence and professional ethics, and finding sufficient and appropriate audit evidence - The audit was conducted in accordance with Hong Kong Standards on Auditing issued by the Hong Kong Institute of Certified Public Accountants[411](index=411&type=chunk)[414](index=414&type=chunk) - The auditor is independent of the Group and has fulfilled professional ethical responsibilities in accordance with the Code of Ethics for Professional Accountants[411](index=411&type=chunk)[414](index=414&type=chunk) - The auditor believes that the audit evidence obtained is sufficient and appropriate to provide a basis for the audit opinion[411](index=411&type=chunk)[414](index=414&type=chunk) [Key Audit Matters](index=75&type=section&id=KEY%20AUDIT%20MATTERS) A key audit matter is the net realizable value assessment of inventories (premium wines), which is material to the consolidated statement of financial position and involves significant judgment and estimation - The net realizable value assessment of inventories (premium wines) was identified as a key audit matter due to its materiality to the consolidated statement of financial position and the significant judgment and estimation involved[417](index=417&type=chunk)[418](index=418&type=chunk) - The auditor's procedures included discussing the management's assessment process, challenging judgments on inventory provisions, evaluating the reasonableness of valuation methods and key assumptions, and conducting independent market research[419](index=419&type=chunk)[424](index=424&type=chunk) - As of March 31, 2024, the carrying amount of premium wines was approximately **HKD 31,289 thousands**[422](index=422&type=chunk)[423](index=423&type=chunk) [Other Information](index=77&type=section&id=OTHER%20INFORMATION) The company's directors are responsible for other information in the annual report, which the auditor has read and found no material misstatements - The company's directors are responsible for other information in the annual report, and the auditor's opinion does not cover this information[426](index=426&type=chunk)[428](index=428&type=chunk)[429](index=429&type=chunk) - The auditor has read the other information and has not identified any material misstatements[427](index=427&type=chunk)[429](index=429&type=chunk) [Responsibilities of Directors and Those Charged With Governance for the Consolidated Financial Statements](index=78&type=section&id=Responsibilities%20of%20Directors%20and%20Those%20Charged%20With%20Governance%20for%20the%20Consolidated%20Financial%20Statements) The company's directors are responsible for preparing fair consolidated financial statements in accordance with HKFRSs and the Hong Kong Companies Ordinance, ensuring effective internal controls, and assessing the Group's going concern ability - The company's directors are responsible for preparing consolidated financial statements that give a true and fair view in accordance with Hong Kong Financial Reporting Standards and the Hong Kong Companies Ordinance[432](index=432&type=chunk)[434](index=434&type=chunk) - Directors are responsible for ensuring effective internal controls to prevent material misstatements in the consolidated financial statements[432](index=432&type=chunk)[434](index=434&type=chunk) - Directors are responsible for assessing the Group's ability to continue as a going concern and using the going concern basis of accounting[433](index=433&type=chunk)[435](index=435&type=chunk) - Those charged with governance are responsible for overseeing the Group's financial reporting process[433](index=433&type=chunk)[436](index=436&type=chunk) [Auditor's Responsibilities for the Audit of the Consolidated Financial Statements](index=79&type=section&id=Auditor's%20Responsibilities%20for%20the%20Audit%20of%20the%20Consolidated%20Financial%20Statements) The auditor aims to obtain reasonable assurance that the consolidated financial statements are free from material misstatement, applying professional judgment and skepticism to assess risks and evaluate accounting policies - The auditor's objective is to obtain reasonable assurance that the consolidated financial statements as a whole are free from material misstatement, whether due to fraud or error[438](index=438&type=chunk)[440](index=440&type=chunk) - The audit process involves applying professional judgment and skepticism to identify and assess risks of material misstatement, and designing and performing audit procedures[439](index=439&type=chunk)[441](index=441&type=chunk) - The auditor understands internal controls relevant to the audit, evaluates the appropriateness of accounting policies used by directors, and the reasonableness of accounting estimates and related disclosures[445](index=445&type=chunk) - The auditor concludes on the appropriateness of the directors' use of the going concern basis of accounting and communicates with those charged with governance regarding the planned scope, timing, and significant audit findings[445](index=445&type=chunk)[447](index=447&type=chunk)[449](index=449&type=chunk) CONSOLIDATED FINANCIAL STATEMENTS [Consolidated Statement of Profit or Loss and Other Comprehensive Income](index=83&type=section&id=Consolidated%20Statement%20of%20Profit%20or%20Loss%20and%20Other%20Comprehensive%20Income) For the year ended March 31, 2024, the Group reported revenue of HKD 20,158 thousands, a loss for the year of HKD 20,929 thousands, and total comprehensive expenses of HKD 23,712 thousands Summary of Consolidated Statement of Profit or Loss and Other Comprehensive Income | Indicator | 2024 (HKD thousands) | 2023 (HKD thousands) | | :--- | :--- | :--- | | Revenue | 20,158 | 30,600 | | Cost of Sales | (10,307) | (16,084) | | Gross Profit | 9,851 | 14,516 | | Other Income | 5,349 | 1,213 | | Other Gains or Losses | 3,328 | (1,957) | | Selling Expenses | (1,949) | (4,891) | | Administrative Expenses | (28,909) | (31,078) | | Other Expenses | (7,860) | (14,631) | | Loss Before Tax | (20,808) | (38,503) | | Loss for the Year | (20,929) | (38,655) | | Loss for the Year Attributable to Owners of the Company | (20,782) | (37,223) | | Loss for the Year Attributable to Non-controlling Interests | (147) | (1,432) | | Other Comprehensive Expenses for the Year | (2,783) | (3,752) | | Total Comprehensive Expenses for the Year | (23,712) | (42,407) | | Basic and Diluted Loss Per Share (HK cents) | (1.2) | (2.2) | [Consolidated Statement of Financial Position](index=86&type=section&id=Consolidated%20Statement%20of%20Financial%20Position) As of March 31, 2024, the Group's total assets less current liabilities were HKD 108,679 thousands, with net current assets of HKD 101,411 thousands Summary of Consolidated Statement of Financial Position | Indicator | 2024 (HKD thousands) | 2023 (HKD thousands) | | :--- | :--- | :--- | | Non-current Assets | 7,268 | 14,282 | | Current Assets | 119,014 | 148,224 | | Current Liabilities | 17,603 | 14,749 | | Net Current Assets | 101,411 | 133,475 | | Total Liabilities | 17,603 | 15,106 | | Net Assets | 108,679 | 147,400 | | Equity Attributable to Owners of the Company | 113,787 | 138,550 | | Non-controlling Interests | (5,108) | 8,850 | | Total Equity | 108,679 | 147,400 | [Consolidated Statement of Changes in Equity](index=89&type=section&id=Consolidated%20Statement%20of%20Changes%20in%20Equity) For the year ended March 31, 2024, equity attributable to owners of the company decreased to HKD 113,787 thousands, primarily due to the annual loss and exchange differences, while non-controlling interests became negative Summary of Consolidated Statement of Changes in Equity | Indicator | 2024 (HKD thousands) | 2023 (HKD thousands) | | :--- | :--- | :--- | | Equity Attributable to Owners of the Company at Beginning of Year | 138,550 | 182,840 | | Loss for the Year | (20,782) | (37,223) | | Exchange Differences | (3,296) | (3,373) | | Disposal of Subsidiaries | 0 | (7,447) | | Release of Non-controlling Interests upon Deregistration of Subsidiaries | (11,705) | (40) | | Equity Attributable to Owners of the Company at End of Year | 113,787 | 138,550 | | Non-controlling Interests at Beginning of Year | 8,850 | 8,054 | | Loss for the Year | (147) | (1,432) | | Exchange Differences | 364 | (1,811) | | Disposal of Subsidiaries | 38 | 2,647 | | Release of Non-controlling Interests upon Deregistration of Subsidiaries | (11,705) | (40) | | Non-controlling Interests at End of Year | (5,108) | 8,850 | - The change in non-controlling interests this year was primarily affected by the disposal of a subsidiary (Huichuan Network) and the deregistration of a subsidiary (Yiqimen)[475](index=475&type=chunk)[478](index=478&type=chunk) [Consolidated Statement of Cash Flows](index=92&type=section&id=Consolidated%20Statement%20of%20Cash%20Flows) For the year ended March 31, 2024, the Group reported net cash outflow from operating activities of HKD 19,745 thousands, a net decrease in cash and cash equivalents of HKD 17,798 thousands, and year-end cash of HKD 38,228 thousands Summary of Consolidated Statement of Cash Flows | Indicator | 2024 (HKD thousands) | 2023 (HKD thousands) | | :--- | :--- | :--- | | Net Cash Used in Operating Activities | (19,745) | (59,438) | | Net Cash (Used in) From Investing Activities | (3,530) | 271 | | Net Cash From (Used in) Financing Activities | 5,477 | (6,460) | | Net Decrease in Cash and Cash Equivalents | (17,798) | (65,627) | | Cash and Cash Equivalents at End of Year | 38,228 | 61,497 | - Cash outflow from operating activities was primarily due to the loss for the year, but it narrowed compared to the previous year[480](index=480&type=chunk)[481](index=481&type=chunk)[484](index=484&type=chunk) - Cash inflow from financing activities primarily resulted from advances from shareholders and directors' loans[486](index=486&type=chunk) NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS [General Information](index=96&type=section&id=GENERAL%20INFORMATION) Culturecom Holdings Limited, incorporated in Bermuda and listed in Hong Kong, operates as an investment holding company with primary businesses in Hong Kong and China, presenting its financial statements in HKD - Culturecom Holdings Limited is incorporated in Bermuda, and its shares are listed on the Main Board of The Stock Exchange of Hong Kong[488](index=488&type=chunk)[491](index=491&type=chunk) - The company is an investment holding company, with its principal businesses located in Hong Kong and China[489](index=489&type=chunk)[492](index=492&type=chunk) - The company's functional currency is RMB, but the consolidated financial statements are presented in HKD for user convenience[490](index=490&type=chunk)[493](index=493&type=chunk) [Application of New and Amendments to Hong Kong Financial Reporting Standards ("HKFRSs")](index=97&type=section&id=Application%20of%20New%20and%20Amendments%20to%20Hong%20Kong%20Financial%20Reporting%20Standards%20(%22HKFRSs%22)) The Group adopted several new and amended HKFRSs during the year, which had no material impact on its financial position or performance but affected accounting policy disclosures - The Group adopted several new and amended Hong Kong Financial Reporting Standards, including HKFRS 17, HKAS 8, HKAS 12, and HKAS 1, for the first time this year[495](index=495&type=chunk)[496](index=496&type=chunk) - Amendments to HKAS 8 clarified the distinction between accounting estimates and changes in accounting policies and error corrections, with no material impact on the consolidated financial statements[498](index=498&type=chunk)[500](index=500&type=chunk)[499](index=499&type=chunk)[501](index=501&type=chunk) - Amendments to HKAS 1 and HKFRS Practice Statement 2 replaced "material accounting policies" with "material accounting policy information" and clarified disclosure requirements, with no material impact on financial position or performance but affecting accounting policy disclosures[503](index=503&type=chunk)[505](index=505&type=chunk)[504](index=504&type=chunk)[506](index=506&type=chunk)[508](index=508&type=chunk)[510](index=510&type=chunk)[509](index=509&type=chunk)[511](index=511&type=chunk) - Amendments to HKAS 12 narrowed the scope of the deferred tax liability and asset recognition exemption, with no material impact on the Group's financial position or performance but affecting accounting policy disclosures[513](index=513&type=chunk)[514](index=5

[Financial Performance Overview](index=1&type=section&id=Financial%20Performance%20Overview) This section presents a high-level overview of the Group's financial results, encompassing its income statement and financial position [Consolidated Statement of Profit or Loss and Other Comprehensive Income](index=1&type=section&id=Consolidated%20Statement%20of%20Profit%20or%20Loss%20and%20Other%20Comprehensive%20Income) The Group's net consolidated loss significantly narrowed by 44.2% to HKD 20,782 thousand for the year ended March 31, 2024, primarily due to revenue structure adjustments and cost control, despite a 34.1% decrease in total revenue and a slight improvement in gross margin Consolidated Statement of Profit or Loss and Other Comprehensive Income Summary | Metric | 2024 (HKD thousands) | 2023 (HKD thousands) | YoY Change (%) | | :--- | :--- | :--- | :--- | | Revenue | 20,158 | 30,600 | -34.1% | | Cost of Sales | (10,307) | (16,084) | -35.9% | | Gross Profit | 9,851 | 14,516 | -32.1% | | Other Income | 5,349 | 1,213 | +340.9% | | Other Gains or Losses | 3,328 | (1,957) | N/A | | Loss for the Year | (20,929) | (38,655) | -45.8% | | Loss for the Year Attributable to Owners of the Company | (20,782) | (37,223) | -44.2% | | Basic and Diluted Loss Per Share (HK cents) | (1.2) | (2.2) | -45.5% | - Gross margin increased from **47.4% in 2023** to **48.9% in 2024**, primarily due to the restructuring of the digital marketing segment, which significantly reduced production costs[73](index=73&type=chunk)[212](index=212&type=chunk) [Consolidated Statement of Financial Position](index=3&type=section&id=Consolidated%20Statement%20of%20Financial%20Position) As of March 31, 2024, the Group's total net assets and net current assets both decreased, but the current ratio remained healthy, with non-controlling interests shifting from positive to negative, reflecting losses in some subsidiaries Consolidated Statement of Financial Position Summary | Metric | 2024 (HKD thousands) | 2023 (HKD thousands) | YoY Change (%) | | :--- | :--- | :--- | :--- | | Non-current Assets | 7,268 | 14,282 | -49.1% | | Current Assets | 119,014 | 148,224 | -19.7% | | Current Liabilities | 17,603 | 14,749 | +19.3% | | Net Current Assets | 101,411 | 133,475 | -24.0% | | Net Assets | 108,679 | 147,400 | -26.3% | | Equity Attributable to Owners of the Company | 113,787 | 138,550 | -17.9% | | Non-controlling Interests | (5,108) | 8,850 | N/A | - Current ratio decreased from **10.0 in 2023** to **6.8 in 2024**[84](index=84&type=chunk) - Debt-to-equity ratio (attributable to owners of the Company) increased from **10.9% in 2023** to **15.5% in 2024**[84](index=84&type=chunk) [Notes to the Consolidated Financial Statements](index=5&type=section&id=Notes%20to%20the%20Consolidated%20Financial%20Statements) This section details the accounting policies, significant judgments, and other explanatory information supporting the consolidated financial statements [1. Basis of Preparation](index=5&type=section&id=1.%20Basis%20of%20Preparation) The consolidated financial statements are prepared in accordance with Hong Kong Financial Reporting Standards and presented in Hong Kong dollars, despite the company's functional currency being Renminbi, with some financial instruments measured at fair value - Consolidated financial statements are prepared in accordance with Hong Kong Financial Reporting Standards issued by the Hong Kong Institute of Certified Public Accountants[11](index=11&type=chunk) - The Company's functional currency is Renminbi, but for user convenience, the consolidated financial statements are presented in Hong Kong dollars[24](index=24&type=chunk) - The statements are prepared on a historical cost basis, except for certain financial instruments measured at fair value at the end of the reporting period[11](index=11&type=chunk) [2. Application of New and Revised Hong Kong Financial Reporting Standards](index=5&type=section&id=2.%20Application%20of%20New%20and%20Revised%20Hong%20Kong%20Financial%20Reporting%20Standards) This year, the Group first applied new and revised Hong Kong Financial Reporting Standards mandatory for annual periods beginning on or after April 1, 2023, which had no significant impact on the financial position or performance for the current and prior years - The Group first applied new and revised Hong Kong Financial Reporting Standards issued by the Hong Kong Institute of Certified Public Accountants, which are mandatory for annual periods beginning on or after April 1, 2023[1](index=1&type=chunk)[25](index=25&type=chunk) - The application of new standards had no significant impact on the Group's financial position and performance for the current and prior years[28](index=28&type=chunk) [3. Revenue](index=6&type=section&id=3.%20Revenue) The Group's total revenue for FY2024 was HKD 20,158 thousand, a 34.1% decrease from HKD 30,600 thousand in FY2023, primarily due to a significant reduction in digital marketing services revenue, partially offset by growth in publishing and intellectual property licensing revenue Revenue by Source | Revenue Source | 2024 (HKD thousands) | 2023 (HKD thousands) | YoY Change (%) | | :--- | :--- | :--- | :--- | | Sales of Comic Books | 12,419 | 8,336 | +49.0% | | Copyright Income from IP Licensing | 2,685 | 3,647 | -26.4% | | New Media Advertising Income | 2,484 | 15,328 | -83.8% | | Sales of Alcoholic Beverages | 2,457 | 3,289 | -25.3% | | Social Media Marketing | 113 | – | N/A | | **Total** | **20,158** | **30,600** | **-34.1%** | - Digital marketing business revenue significantly decreased from **HKD 15,328 thousand in 2023** to **HKD 2,597 thousand in 2024**, mainly due to scaled-down operations[72](index=72&type=chunk) - Publishing and intellectual property licensing business revenue increased from **HKD 11,983 thousand in 2023** to **HKD 15,104 thousand in 2024**, a **26.0% growth**[72](index=72&type=chunk)[210](index=210&type=chunk) [4. Segment Information](index=7&type=section&id=4.%20Segment%20Information) The Group's operating segments include publishing and IP licensing, digital marketing, retail and wholesale, and natural language processing, with publishing and IP licensing performing well in FY2024, while digital marketing and retail and wholesale revenues declined, and natural language processing remained in an investment phase - The Group's operating and reportable segments include: publishing and intellectual property licensing, digital marketing, retail and wholesale, and natural language processing[124](index=124&type=chunk)[130](index=130&type=chunk)[131](index=131&type=chunk)[143](index=143&type=chunk) - The natural language processing business commenced operations in FY2023 through a newly incorporated subsidiary[129](index=129&type=chunk) [Segment Revenue and Results](index=8&type=section&id=Segment%20Revenue%20and%20Results) In FY2024, the publishing and IP licensing segment saw growth in both revenue and results, the digital marketing segment experienced a significant revenue decline and recorded a loss, the retail and wholesale segment's revenue decreased and turned to a loss, and the natural language processing segment remained in an investment loss state Segment Revenue and Results Summary | Segment | 2024 Revenue (HKD thousands) | 2023 Revenue (HKD thousands) | 2024 Segment Results (HKD thousands) | 2023 Segment Results (HKD thousands) | | :--- | :--- | :--- | :--- | :--- | | Publishing and IP Licensing | 15,104 | 11,983 | 1,384 | 1,261 | | Digital Marketing | 2,597 | 15,328 | 2,236 | (8,654) | | Retail and Wholesale | 2,457 | 3,289 | (887) | (721) | | Natural Language Processing | – | – | (2,873) | (1,191) | | **Consolidated Total** | **20,158** | **30,600** | **(140)** | **(9,305)** | - In FY2024, the digital marketing segment's results turned from a loss to a profit, despite a significant decrease in revenue[133](index=133&type=chunk)[146](index=146&type=chunk) - The natural language processing segment recorded a **loss of HKD 2,873 thousand in 2024**, indicating it is still in its early development stage[133](index=133&type=chunk) [Geographical Information](index=11&type=section&id=Geographical%20Information) The Group's operations are primarily located in China (including Hong Kong), with revenue and non-current assets from Hong Kong being higher than mainland China in FY2024 Geographical Information Summary | Region | 2024 External Customer Revenue (HKD thousands) | 2023 External Customer Revenue (HKD thousands) | 2024 Non-current Assets (HKD thousands) | 2023 Non-current Assets (HKD thousands) | | :--- | :--- | :--- | :--- | :--- | | Hong Kong (Place of Operation) | 17,561 | 15,272 | 6,080 | 7,484 | | China | 2,597 | 15,328 | 21 | – | | **Total** | **20,158** | **30,600** | **6,101** | **7,484** | - Non-current assets exclude deferred tax assets and financial instruments[152](index=152&type=chunk) [Major Customer Information](index=12&type=section&id=Major%20Customer%20Information) In FY2024, four customers contributed over 10% of the Group's total sales, with Customer A and Customer D being new major customers, and Customer E no longer a major customer Major Customer Information Summary | Customer | 2024 Revenue (HKD thousands) | 2023 Revenue (HKD thousands) | Segment | | :--- | :--- | :--- | :--- | | Customer A | 5,648 | Not Applicable | Publishing and IP Licensing | | Customer B | 5,133 | 5,590 | Publishing and IP Licensing | | Customer C | 2,457 | 3,289 | Retail and Wholesale | | Customer D | 2,362 | Not Applicable | Publishing and IP Licensing | | Customer E | Not Applicable | 6,251 | Digital Marketing | - Customer A and Customer D became major customers, contributing over **10% of total sales in 2024**[142](index=142&type=chunk) - Customer E was a major customer in the digital marketing segment in 2023 but is no longer applicable in 2024[142](index=142&type=chunk) [5. Other Income](index=13&type=section&id=5.%20Other%20Income) The Group's other income significantly increased to HKD 5,349 thousand in FY2024, primarily due to the reversal of impairment losses on previously recognized trade receivables and prepayments Other Income Summary | Income Item | 2024 (HKD thousands) | 2023 (HKD thousands) | | :--- | :--- | :--- | | Bank Interest Income | 177 | 215 | | Consulting Income | 41 | – | | Dividend Income from Financial Assets at FVTPL | 85 | 28 | | Imputed Interest Income on Loans Receivable | 183 | – | | Investment Income from Financial Assets at FVOCI | 46 | – | | Reversal of Impairment Loss on Trade Receivables Previously Recognized | 1,491 | – | | Reversal of Impairment Loss on Prepayments Previously Recognized | 2,453 | – | | Subsidies | 19 | 827 | | Miscellaneous Income | 143 | 104 | | Write-off of Other Payables | 658 | 39 | | Write-off of Trade Receivables | 53 | – | | **Total** | **5,349** | **1,213** | - In FY2024, impairment losses on previously recognized trade receivables and prepayments were reversed due to civil litigation initiated against suspicious misconduct by digital marketing business customers and suppliers[156](index=156&type=chunk) - Subsidies significantly decreased in FY2024, mainly because 2023 included subsidies from the Hong Kong Government's Employment Support Scheme[157](index=157&type=chunk) [6. Other Gains or Losses](index=14&type=section&id=6.%20Other%20Gains%20or%20Losses) The Group's other gains or losses shifted from a loss of HKD 1,957 thousand in 2023 to a gain of HKD 3,328 thousand in 2024, mainly driven by gains from the derecognition and disposal of subsidiaries, offsetting fair value changes in financial assets and exchange losses Other Gains or Losses Summary | Item | 2024 (HKD thousands) | 2023 (HKD thousands) | | :--- | :--- | :--- | | Gains (Losses) from Fair Value Changes of Financial Assets at FVTPL | (5,936) | (1,377) | | Gain on Derecognition of a Subsidiary | 10,942 | 42 | | Gain on Disposal of a Subsidiary | 823 | – | | Gains (Losses) on Disposal of Property and Equipment | 3 | (14) | | Loss on Write-off of Property and Equipment | (5) | – | | Net Exchange Loss | (2,499) | (608) | | **Total** | **3,328** | **(1,957)** | - Derecognition of a subsidiary resulted in a **gain of HKD 10,942 thousand**, and disposal of a subsidiary resulted in a **gain of HKD 823 thousand**[167](index=167&type=chunk) - Financial assets at fair value through profit or loss recorded a **fair value change loss of HKD 5,936 thousand**[167](index=167&type=chunk) [7. Finance Costs](index=14&type=section&id=7.%20Finance%20Costs) The Group's finance costs for FY2024 were HKD 69 thousand, a decrease from HKD 125 thousand in FY2023, primarily consisting of interest expenses on lease liabilities Finance Costs Summary | Item | 2024 (HKD thousands) | 2023 (HKD thousands) | | :--- | :--- | :--- | | Interest on Lease Liabilities | 69 | 125 | | **Total** | **69** | **125** | [8. Other Impairment Losses](index=14&type=section&id=8.%20Other%20Impairment%20Losses) The Group recognized other impairment losses of HKD 971 thousand in FY2024, a decrease from HKD 2,023 thousand in FY2023, primarily including impairments on an associate, prepayments, and right-of-use assets Other Impairment Losses Summary | Impairment Item | 2024 (HKD thousands) | 2023 (HKD thousands) | | :--- | :--- | :--- | | Associate | 157 | – | | Intangible Assets | – | 245 | | Prepayments | 560 | – | | Right-of-use Assets | 254 | 1,778 | | **Total** | **971** | **2,023** | - In FY2024, an impairment loss of **HKD 157 thousand** was recognized due to the associate's continuous losses[221](index=221&type=chunk) - In FY2024, an impairment loss of **HKD 560 thousand** was made for prepayments for unpublished comics[168](index=168&type=chunk) [9. Loss Before Tax](index=15&type=section&id=9.%20Loss%20Before%20Tax) The Group's loss before tax for FY2024 was calculated after deducting (or including) staff costs, auditor's remuneration, cost of inventories, costs to fulfill customer contracts, depreciation and amortization, legal and consulting fees, severance costs, and research costs Loss Before Tax Adjustments | Item | 2024 (HKD thousands) | 2023 (HKD thousands) | | :--- | :--- | :--- | | Staff Costs | 19,777 | 24,556 | | Auditor's Remuneration | 1,600 | 1,800 | | Cost of Inventories Recognized as Expense | 8,860 | 7,505 | | Costs to Fulfill Customer Contracts | 1,447 | 8,579 | | Depreciation of Property and Equipment | 54 | 117 | | Depreciation of Right-of-use Assets | 342 | 2,085 | | Amortization of Intangible Assets | 488 | 631 | | Legal, Consulting and Other Professional Fees | 5,437 | 7,126 | | Severance Costs | 1,560 | – | | Research Costs | 2,423 | 5,939 | | Gain on Derecognition of a Subsidiary | (10,942) | (42) | | Gain on Disposal of a Subsidiary | (823) | – | - Staff costs for FY2024 were **HKD 19,777 thousand**, a decrease from 2023[37](index=37&type=chunk) - Legal, consulting, and other professional fees amounted to **HKD 5,437 thousand**, primarily paid to lawyers and consultants for legal services and professional advice[36](index=36&type=chunk)[37](index=37&type=chunk) [10. Income Tax Expense](index=16&type=section&id=10.%20Income%20Tax%20Expense) The Group's income tax expense for FY2024 was HKD 121 thousand, a decrease from HKD 152 thousand in FY2023, with Hong Kong profits tax calculated under a two-tiered system and Chinese subsidiaries taxed at 25% Income Tax Expense Summary | Item | 2024 (HKD thousands) | 2023 (HKD thousands) | | :--- | :--- | :--- | | Current Tax – Hong Kong Profits Tax | 154 | 195 | | Deferred Tax – Over-provision in Prior Years | (9) | (43) | | Deferred Tax – Hong Kong Profits Tax | (24) | – | | **Income Tax Expense** | **121** | **152** | - Hong Kong profits tax is calculated at **8.25%** on the first HKD 2 million of estimated assessable profits and **16.5%** on the remaining portion[45](index=45&type=chunk) - Chinese subsidiaries were taxed at a rate of **25%** for both years[38](index=38&type=chunk) [11. Dividends](index=17&type=section&id=11.%20Dividends) The Company neither paid nor proposed any dividends for the years ended 2024 and 2023 - Basic and diluted loss per share attributable to owners of the Company is calculated based on relevant data[39](index=39&type=chunk) - No dividends were paid or proposed for the year ended March 31, 2024, and no dividends have been proposed since the end of the reporting period[160](index=160&type=chunk) [12. Loss Per Share](index=17&type=section&id=12.%20Loss%20Per%20Share) The Group's basic and diluted loss per share for FY2024 was 1.2 HK cents, an improvement from 2.2 HK cents in FY2023, with no assumed exercise of outstanding share options for diluted loss per share calculation as it would reduce the loss Loss Per Share Calculation | Metric | 2024 | 2023 | | :--- | :--- | :--- | | Weighted Average Number of Shares for Basic and Diluted Loss Per Share (thousands) | 1,668,657 | 1,668,657 | | Loss for the Year Attributable to Owners of the Company for Basic and Diluted Loss Per Share (HKD thousands) | (20,782) | (37,223) | | Basic and Diluted Loss Per Share (HK cents) | (1.2) | (2.2) | - The exercise of outstanding share options was not assumed for the calculation of diluted loss per share, as it would result in a reduction in loss per share[48](index=48&type=chunk) [13. Goodwill and Impairment Assessment](index=18&type=section&id=13.%20Goodwill%20and%20Impairment%20Assessment) The Group's goodwill was fully impaired in prior years and fully derecognized in FY2024 due to the disposal and derecognition of subsidiaries, with goodwill primarily allocated to two cash-generating units within the digital marketing segment - Goodwill was fully impaired in prior years[74](index=74&type=chunk)[187](index=187&type=chunk)[188](index=188&type=chunk) - For the year ended March 31, 2024, goodwill was fully derecognized upon disposal[52](index=52&type=chunk) - Goodwill was allocated to two separate cash-generating units within the digital marketing segment: Beijing Yiqimen Technology Co., Ltd. and Beijing Huichuan Network Information Technology Co., Ltd[186](index=186&type=chunk) [14. Intangible Assets](index=20&type=section&id=14.%20Intangible%20Assets) The Group's intangible assets include club memberships, customer contracts and related customer relationships, software, and intellectual property, with the carrying amount decreasing to HKD 5,525 thousand in FY2024, mainly due to the elimination of related assets from the disposal/derecognition of subsidiaries Intangible Assets Carrying Amounts | Intangible Asset Category | 2024 Carrying Amount (HKD thousands) | 2023 Carrying Amount (HKD thousands) | | :--- | :--- | :--- | | Club Memberships | 1,385 | 1,385 | | Customer Contracts and Related Customer Relationships | – | – | | Software | – | – | | Intellectual Property | 4,140 | 4,628 | | **Total** | **5,525** | **6,013** | - Club memberships are considered by the directors to have an indefinite useful life and are not amortized[53](index=53&type=chunk) - Intellectual property is amortized on a straight-line basis over its estimated useful life of **10 years**, based on its expected contribution to future cash flows[54](index=54&type=chunk) - Due to reduced revenue and continuous losses in the digital marketing segment, the recoverable amount of software was determined to be zero, resulting in an impairment of approximately **HKD zero in FY2024** (2023: HKD 245 thousand) for intangible assets[43](index=43&type=chunk) [15. Trade Receivables](index=21&type=section&id=15.%20Trade%20Receivables) The Group's net trade receivables for FY2024 significantly decreased to HKD 3,465 thousand from HKD 8,674 thousand in FY2023, with approximately HKD 942 thousand of receivables overdue for more than 90 days considered credit-impaired and provided for Trade Receivables Aging Analysis | Aging | 2024 (HKD thousands) | 2023 (HKD thousands) | | :--- | :--- | :--- | | 0 – 60 Days | 1,439 | 6,980 | | 61 – 90 Days | 442 | 381 | | 91 – 180 Days | 1,264 | 1,281 | | Over 180 Days | 320 | 32 | | **Total** | **3,465** | **8,674** | - As of March 31, 2024, gross trade receivables of approximately **HKD 1,837 thousand** were overdue for more than 90 days, of which approximately **HKD 942 thousand** were considered credit-impaired and provided for[44](index=44&type=chunk) - Trade receivables include approximately **HKD 38 thousand** due from Culturecom Holdings Limited, an associate[55](index=55&type=chunk) [16. Other Receivables, Deposits and Prepayments](index=22&type=section&id=16.%20Other%20Receivables%2C%20Deposits%20and%20Prepayments) The Group's total other receivables, deposits, and prepayments amounted to HKD 35,813 thousand in FY2024, primarily comprising deposits for intangible assets paid to independent third parties for the natural language processing business Other Receivables, Deposits and Prepayments Summary | Item | 2024 (HKD thousands) | 2023 (HKD thousands) | | :--- | :--- | :--- | | Other Receivables (Net) | 80 | 2,718 | | Deposits and Prepayments (Net) | 35,733 | 39,122 | | **Total** | **35,813** | **41,840** | | Less: Amounts to be Settled or Utilized within One Year | (35,325) | (41,374) | | Amounts to be Utilized After One Year | 488 | 466 | - Deposits and prepayments primarily include approximately **HKD 33,269 thousand** paid to independent third parties for intangible assets related to the natural language processing business[65](index=65&type=chunk) - Deposits and prepayments include approximately **HKD 220 thousand** paid to CMEL, an associate[192](index=192&type=chunk) [17. Loans Receivable](index=23&type=section&id=17.%20Loans%20Receivable) The Group recognized new loans receivable from independent third parties of HKD 7,956 thousand in FY2024, which are unsecured, interest-free, and repayable within one year Loans Receivable Summary | Item | 2024 (HKD thousands) | 2023 (HKD thousands) | | :--- | :--- | :--- | | Loans Receivable from Independent Third Parties | 8,068 | – | | Less: Provision for Credit Losses | (112) | – | | **Total** | **7,956** | **–** | - The loans receivable are unsecured, interest-free, and repayable within one year[201](index=201&type=chunk) - The difference between the principal amount of the loan and its initial fair value recognition is approximately **HKD 384 thousand**, determined using an annual effective interest rate of **3.50% to 3.71%**[201](index=201&type=chunk) [18. Trade Payables, Other Payables and Accruals](index=23&type=section&id=18.%20Trade%20Payables%2C%20Other%20Payables%20and%20Accruals) The Group's net trade payables for FY2024 decreased to HKD 946 thousand from HKD 1,419 thousand in FY2023, with other payables and accruals mainly comprising accrued operating expenses and salaries Trade Payables Aging Analysis | Aging | 2024 (HKD thousands) | 2023 (HKD thousands) | | :--- | :--- | :--- | | 0 – 60 Days | 717 | 1,031 | | 61 – 90 Days | 216 | 308 | | Over 90 Days | 13 | 80 | | **Total** | **946** | **1,419** | - The average credit period for goods purchased ranges from **15 to 90 days**[57](index=57&type=chunk) - Other payables and accruals include deposits received, accrued operating expenses, accrued salaries, and accrued severance costs[202](index=202&type=chunk) [19. Disposal/Derecognition of Subsidiaries](index=24&type=section&id=19.%20Disposal%2FDerecognition%20of%20Subsidiaries) The Group disposed of its entire equity interest in Huichuan Network and derecognized Yiqimen in FY2024, recognizing a gain on disposal of HKD 823 thousand and a gain on derecognition of HKD 10,942 thousand - On April 13, 2023, the Group disposed of its entire equity interest in Huichuan Network for a total cash consideration of **RMB 50,000** (approximately **HKD 57,075**), recognizing a **gain on disposal of HKD 823 thousand**[58](index=58&type=chunk)[195](index=195&type=chunk)[196](index=196&type=chunk) - On March 20, 2024, the Group derecognized Yiqimen (55% owned), recognizing a **gain on derecognition of approximately HKD 10,942 thousand**[69](index=69&type=chunk) - The disposal of Huichuan Network resulted in a **net cash outflow of HKD 47 thousand**[197](index=197&type=chunk)[198](index=198&type=chunk) [20. Events After the Reporting Period](index=25&type=section&id=20.%20Events%20After%20the%20Reporting%20Period) As of the date of this announcement, no significant post-reporting period events occurred after March 31, 2024, although the Company had previously entered into an agreement for the acquisition of an AI hardware and software company, which had not been completed by the financial statement date - Except as disclosed elsewhere in this announcement, no significant post-reporting period events occurred after March 31, 2024, and up to the date of this announcement[61](index=61&type=chunk)[205](index=205&type=chunk) - The Company had entered into an agreement for the possible acquisition of 100% equity interest in a Chinese company engaged in the development and sale of AI hardware and software for a total consideration of approximately **HKD 63,000,000**, but this transaction had not been completed as of the financial statement date[199](index=199&type=chunk) [Business Review and Outlook](index=26&type=section&id=Business%20Review%20and%20Outlook) This section provides an overview of the Group's operational performance, financial results analysis, liquidity, and future strategic direction [Overall Business Review](index=32&type=section&id=Overall%20Business%20Review) In FY2024, the Group faced a challenging business and economic environment, with total revenue decreasing by 34.1%, and focused on resource conservation, business restructuring, and cost control to protect resources and address market challenges - After the COVID-19 pandemic, the overall economy required time to recover, and the Group continued to face a considerably challenging year[116](index=116&type=chunk) - The Group focused on conserving resources, restructuring businesses, and taking action to control and reduce costs and expenses[116](index=116&type=chunk) - For the year ended March 31, 2024, total revenue decreased by **34.1%** from **HKD 30,600,000 in 2023** to **HKD 20,158,000 in 2024**[116](index=116&type=chunk) [Financial Performance Analysis](index=26&type=section&id=Financial%20Performance%20Analysis) The Group's consolidated net loss significantly narrowed in FY2024, primarily due to the restructuring of the digital marketing business and cost control, despite a decrease in total revenue - The Group's consolidated net loss decreased by approximately **44.2%** to **HKD 20,782,000**, with a loss per share of **1.2 HK cents**[210](index=210&type=chunk) [Revenue](index=26&type=section&id=Revenue) The Group's overall revenue significantly decreased by 34.1% to HKD 20,158 thousand in FY2024, mainly impacted by a substantial reduction in digital marketing business revenue - Overall revenue significantly decreased by approximately **34.1%** from **HKD 30,600,000** to **HKD 20,158,000**[72](index=72&type=chunk) - Digital marketing business revenue significantly decreased from **HKD 15,328,000** to **HKD 2,597,000**, primarily due to scaled-down operations[72](index=72&type=chunk) - Publishing and intellectual property licensing business revenue surged by approximately **26.0%**, mainly due to increased publishing sales from acquiring more Japanese manga licenses[210](index=210&type=chunk) [Gross Profit and Gross Margin](index=26&type=section&id=Gross%20Profit%20and%20Gross%20Margin) The Group's gross profit for FY2024 was HKD 9,851 thousand, with a gross margin of 48.9%, an improvement from the prior year, primarily due to the restructuring of the digital marketing segment - The Group recorded a gross profit of approximately **HKD 9,851,000** and a gross margin of **48.9%**, compared to a gross profit of **HKD 14,516,000** and a gross margin of **47.4%** in the same period of 2023[73](index=73&type=chunk) - The increase in gross margin was due to the restructuring of the digital marketing segment, which significantly reduced production costs[212](index=212&type=chunk) [Selling Expenses](index=27&type=section&id=Selling%20Expenses) The Group's selling expenses significantly decreased to HKD 1,949 thousand in FY2024, primarily due to reduced revenue and scaled-down operations following the restructuring of the digital marketing segment - Selling expenses decreased from approximately **HKD 4,891,000 in FY2023** to approximately **HKD 1,949,000 in FY2024**[208](index=208&type=chunk) - The reduction in selling expenses was primarily due to decreased revenue and scaled-down operations resulting from the restructuring of the digital marketing segment[208](index=208&type=chunk) [Administrative Expenses](index=27&type=section&id=Administrative%20Expenses) The Group's total administrative expenses for FY2024 were HKD 28,909 thousand, a decrease from 2023, mainly attributed to reduced digital marketing business activities and ongoing cost control - Total administrative expenses were approximately **HKD 28,909,000** (2023: HKD 31,078,000)[209](index=209&type=chunk) - Key expenses included staff costs of **HKD 14,498,000**, depreciation of right-of-use assets of **HKD 342,000**, audit fees of **HKD 1,350,000**, and directors' emoluments of **HKD 4,204,000**[209](index=209&type=chunk) - The decrease in administrative expenses was mainly due to reduced business activities in the digital marketing segment and streamlined operations through continuous cost control[209](index=209&type=chunk) [Other Impairment Losses](index=27&type=section&id=Other%20Impairment%20Losses) In FY2024, the Group recognized an impairment loss of HKD 254 thousand on right-of-use assets, a HKD 560 thousand impairment loss on prepayments for unpublished comics, and a HKD 157 thousand impairment loss due to the continued losses of an associate - An impairment loss of approximately **HKD 254,000** was recognized on right-of-use assets (2023: HKD 1,778,000)[221](index=221&type=chunk) - As of March 31, 2024, no impairment loss on intangible assets was recognized (2023: HKD 245,000)[221](index=221&type=chunk) - An impairment loss of approximately **HKD 560,000** was made for prepayments to suppliers for unpublished comics[221](index=221&type=chunk) - Due to the continuous losses of an associate, an impairment loss of approximately **HKD 157,000** was recognized during the year[221](index=221&type=chunk) [Other Expenses](index=28&type=section&id=Other%20Expenses) The Group's other operating expenses in FY2024 included research and development costs of HKD 2,423 thousand and legal, consulting, and other professional fees of HKD 5,437 thousand - Other operating expenses included research and development costs of approximately **HKD 2,423,000** (2023: HKD 5,939,000), used for developing online platforms for the digital marketing business and the natural language processing business[222](index=222&type=chunk) - Legal, consulting, and other professional fees totaled approximately **HKD 5,437,000** (2023: HKD 7,126,000)[222](index=222&type=chunk) - In FY2024, the Company did not recognize any expense for share options granted to a consultant (2023: HKD 1,566,000)[222](index=222&type=chunk) [Loss for the Year](index=28&type=section&id=Loss%20for%20the%20Year) The Group recorded a loss from operations of approximately HKD 20,929 thousand for FY2024, a reduction from 2023, primarily due to the continued decrease in sales from the digital marketing segment - The Group recorded a loss from operations of approximately **HKD 20,929,000** for the year ended March 31, 2024 (2023: HKD 38,655,000)[223](index=223&type=chunk) - The narrowing of the loss was primarily due to the continuous decrease in sales from the digital marketing segment[223](index=223&type=chunk) [Liquidity and Financial Resources](index=29&type=section&id=Liquidity%20and%20Financial%20Resources) As of March 31, 2024, the Group held cash and bank balances totaling HKD 38,228 thousand, with net current assets and current ratio decreasing but remaining healthy, and the Group maintaining prudent financial management with no significant foreign exchange risks - As of March 31, 2024, the Group's cash and bank balances at financial institutions totaled approximately **HKD 38,228,000**[225](index=225&type=chunk) - Net current assets were approximately **HKD 101,411,000** (2023: HKD 133,475,000), and the current ratio was approximately **6.8** (2023: 10.0)[84](index=84&type=chunk) - The Group does not face significant foreign exchange rate fluctuation risks, except for those related to Renminbi[90](index=90&type=chunk) [Deposits Paid for Intangible Assets](index=29&type=section&id=Deposits%20Paid%20for%20Intangible%20Assets) As of March 31, 2024, the Group had paid deposits totaling approximately HKD 33,269 thousand for the development of natural language processing technology and the production of software and chipsets - The Group has paid deposits totaling approximately **HKD 33,269,000** for the development of natural language processing technology and the production of software and chipsets[91](index=91&type=chunk) - These intangible assets are used to design and implement software and embedded chipsets, and to produce various offline Chinese speech recognition chips widely used in various electronic devices or application environments[91](index=91&type=chunk) [Change in Use of Proceeds from Subscription of New Shares under General Mandate](index=29&type=section&id=Change%20in%20Use%20of%20Proceeds%20from%20Subscription%20of%20New%20Shares%20under%20General%20Mandate) On June 12, 2023, the Company resolved to change the use of the unutilized net proceeds of approximately HKD 17,420 thousand from a subscription to be used as general working capital for the Group - The Company completed a subscription of new shares to an investor under a general mandate in 2021, raising net proceeds of approximately **HKD 41,575,000**[121](index=121&type=chunk) - Due to the scaled-down operations of the digital marketing segment, the Company decided to change the use of the remaining unutilized net proceeds of approximately **HKD 17,420,000** from the subscription[121](index=121&type=chunk)[218](index=218&type=chunk) - The revised use of proceeds is for the Group's general working capital, including salaries and benefits, rent and utilities, and other general and administrative expenses[93](index=93&type=chunk)[121](index=121&type=chunk) [Proposed Acquisition](index=31&type=section&id=Proposed%20Acquisition) The Company had planned to acquire the entire equity interest in Brain-like Technology (Shenzhen) Co., Ltd. for a total consideration of HKD 63,000,000, to be paid by issuing new shares, but this transaction had not been completed as of the financial statement date - The Company had entered into an agreement with four vendors to acquire the entire equity interest in Brain-like Technology (Shenzhen) Co., Ltd. for a total consideration of **HKD 63,000,000**[219](index=219&type=chunk) - The total consideration was to be satisfied by the Company issuing and allotting **191,000,000 shares**[199](index=199&type=chunk)[219](index=219&type=chunk) - This proposed acquisition was subject to approval by the Company's shareholders at an extraordinary general meeting, but the transaction had not been completed as of the financial statement date[94](index=94&type=chunk)[199](index=199&type=chunk) [Placement of Convertible Bonds under General Mandate](index=31&type=section&id=Placement%20of%20Convertible%20Bonds%20under%20General%20Mandate) The Company had planned to place convertible bonds to raise net cash of HKD 98,500,000, primarily for natural language processing technology development and IP activation, but the placement was terminated in July 2023 due to weak market sentiment - The Company had entered into a placing agreement with a placing agent to procure not less than six placees to subscribe for convertible bonds with an aggregate principal amount of up to **HKD 100,000,000** on a best-effort basis[95](index=95&type=chunk) - The net proceeds from the placing would be approximately **HKD 98,500,000**, of which approximately **HKD 68,950,000** would be used for natural language processing technology development[95](index=95&type=chunk)[108](index=108&type=chunk) - Due to weak overall market sentiment and insufficient market liquidity, the placement of convertible bonds was terminated in July 2023[108](index=108&type=chunk)[112](index=112&type=chunk) [Segment Business Performance](index=33&type=section&id=Segment%20Business%20Performance) The Group's business segments showed mixed performance in FY2024: publishing and IP licensing grew, digital marketing significantly scaled down, retail and wholesale sales decreased, while natural language processing continued R&D investments and achieved initial results [Publishing and Intellectual Property Licensing Business](index=33&type=section&id=Publishing%20and%20Intellectual%20Property%20Licensing%20Business) The publishing and intellectual property licensing business improved, with revenue of HKD 15,104 thousand in FY2024, primarily due to more Japanese manga licenses and increased publishing sales, and the Group plans to continue expanding this business - The publishing and intellectual property licensing business performance improved, with revenue of **HKD 15,104,000 in 2024** and **HKD 11,983,000 in 2023**[118](index=118&type=chunk) - The Company is dedicating more effort to the sales of self-owned or licensed copyrighted publications and expanding its licensing business scope[118](index=118&type=chunk) - Recent short dramas and films adapted from Hong Kong comics have driven a wave of Hong Kong cultural sentiment, increasing demand for Hong Kong comic IPs in mainland China, and the Group is collaborating with partners to revitalize these IPs[123](index=123&type=chunk) [Digital Marketing](index=33&type=section&id=Digital%20Marketing) The digital marketing segment is in the final stages of voluntary liquidation, with significantly scaled-down operations and a reduction in total employees from 9 to 3, leading to a substantial decrease in revenue, and the Group expects to recover cash for general working capital upon liquidation completion - The digital marketing segment is at a crossroads, in the final stages of voluntary liquidation, with the remaining operations in Beijing and Guangzhou significantly scaled down[103](index=103&type=chunk) - The total number of employees was reduced from **9 to 3**, resulting in significant cost savings, but also a substantial decrease in revenue[103](index=103&type=chunk) - The Group has streamlined its organizational structure and initiated voluntary liquidation and disposal of its indirect non-wholly owned subsidiaries[72](index=72&type=chunk)[113](index=113&type=chunk)[117](index=117&type=chunk) [Retail and Wholesale Business](index=33&type=section&id=Retail%20and%20Wholesale%20Business) The Group's revenue from premium wine sales was HKD 2,457 thousand in FY2024, a decrease from the previous year, but the Group anticipates sales to gradually recover with economic recovery and is focusing on bulk wine sales to generate positive cash flow and reduce inventory - The Company sold certain wine inventory, generating revenue of **HKD 2,457,000**, compared to **HKD 3,289,000** in the previous year[105](index=105&type=chunk) - The Group expects sales of premium wines to gradually recover with the economic recovery[105](index=105&type=chunk) - The Group is also focusing on selling wine in bulk to generate positive cash flow and reduce inventory[105](index=105&type=chunk) [Natural Language Processing](index=34&type=section&id=Natural%20Language%20Processing) The Group continues to invest in R&D for Chinese AI recognition, collaborating with iFlytek and Brain-like Technology to develop real-time human-machine interaction AI voice technology, which has entered the product application stage, and its independently developed "Flying Dragon Code" Chinese AI Computer Code is mature and launching new products - The Group has formed a strategic partnership with iFlytek and Brain-like Technology to develop real-time human-machine interaction AI voice technology, focusing on Chinese speech recognition[120](index=120&type=chunk) - The AI voice real-time human-machine interaction technology has entered the product application stage, with the first generation of Flying Dragon Master human-machine interaction mobile phones soon to be launched[109](index=109&type=chunk) - The Group's independently developed Flying Dragon Code – Chinese AI Computer Code strategically addresses the security, autonomy, and independence issues of underlying AI operating system technology and has been integrated with major AI manufacturers[126](index=126&type=chunk) [Outlook](index=34&type=section&id=Outlook) The Group will focus on its natural language processing business, while maintaining sustainable development levels for other business segments, committed to new financing to support Chinese AI software development, and expects significant revenue contributions from Hong Kong comic IP activation - The Group notes critical changes in its business and will focus on the natural language processing business while maintaining sustainable development levels for other business segments[125](index=125&type=chunk) - The Group continues to seek new financing to provide more working capital, especially for investing in Chinese AI software development[108](index=108&type=chunk) - The Group is further revitalizing its Hong Kong comic IPs with partners, expecting significant revenue contributions[123](index=123&type=chunk) [Corporate Governance and Other Information](index=35&type=section&id=Corporate%20Governance%20and%20Other%20Information) This section covers the Company's corporate governance practices, compliance with listing rules, and other relevant administrative and employment information [Suspension of Share Transfer Registration](index=35&type=section&id=Suspension%20of%20Share%20Transfer%20Registration) To be eligible to attend the 2024 Annual General Meeting, the Company will suspend share transfer registration from August 15 to August 20, 2024 - The principal share registrar and branch share registrar will suspend share transfer registration from **August 15, 2024, to August 20, 2024** (both dates inclusive)[30](index=30&type=chunk)[127](index=127&type=chunk) - All transfer documents, along with the relevant share certificates, must be submitted to the Company's branch share registrar in Hong Kong by **4:30 p.m. on August 14, 2024**[30](index=30&type=chunk) [Repurchase, Sale or Redemption of Listed Securities](index=36&type=section&id=Repurchase%2C%20Sale%20or%20Redemption%20of%20Listed%20Securities) Neither the Company nor its subsidiaries repurchased, sold, or redeemed any of the Company's listed securities for the year ended March 31, 2024 - Neither the Company nor its subsidiaries repurchased, sold, or redeemed any of the Company's listed securities for the year ended March 31, 2024[31](index=31&type=chunk)[87](index=87&type=chunk) [Audit Committee](index=36&type=section&id=Audit%20Committee) The Company's Audit Committee, comprising two independent non-executive directors and one non-executive director, has reviewed the Group's accounting principles, internal controls, risk management, and financial reporting matters, including the audited financial statements - The Company's Audit Committee currently comprises two independent non-executive directors and one non-executive director[88](index=88&type=chunk) - The Audit Committee has reviewed the accounting principles and practices adopted by the Group with management and discussed matters such as internal controls, risk management, and financial reporting[88](index=88&type=chunk) [Compliance with Corporate Governance Code](index=36&type=section&id=Compliance%20with%20Corporate%20Governance%20Code) The Company complied with all code provisions of the Corporate Governance Code from April 1, 2023, to March 31, 2024, except for a deviation in the rotation of independent non-executive directors' terms, but the Company believes sufficient measures have been taken to ensure corporate governance practices are no less stringent than the code - The Company has complied with all code provisions set out in the Corporate Governance Code, except for a deviation regarding the rotation of terms for independent non-executive directors[33](index=33&type=chunk)[89](index=89&type=chunk) - All directors of the Company (including executive and non-executive directors) are subject to retirement by rotation at the annual general meeting in accordance with Article 110(A) of the Company's Articles of Association[89](index=89&type=chunk) [Minimum Number of Independent Non-Executive Directors](index=36&type=section&id=Minimum%20Number%20of%20Independent%20Non-Executive%20Directors) Following Mr. Fan Chun Wah's resignation, the number of the Company's independent non-executive directors fell below the minimum required by the Listing Rules, and the Board is identifying suitable candidates for appointment within three months - Following Mr. Fan Chun Wah's resignation on May 6, 2024, the Company has two independent non-executive directors, which is below the minimum number required by Rule 3.10(1) of the Listing Rules[77](index=77&type=chunk) - The Board is identifying suitable candidates to fill the vacancy of independent non-executive director and will make its best efforts to appoint a suitable candidate within three months from Mr. Fan's resignation date[79](index=79&type=chunk) [Minimum Number of Members for Corporate Governance Committee](index=37&type=section&id=Minimum%20Number%20of%20Members%20for%20Corporate%20Governance%20Committee) The Company's Corporate Governance Committee currently has three members, which is less than the four members stipulated in its written terms of reference, and the Board is identifying candidates to fill the vacancies - The Corporate Governance Committee (the "Corporate Governance Committee") comprises four members, but currently consists of three members[80](index=80&type=chunk) - The Board will initiate procedures to identify candidates to fill these vacancies to comply with the Corporate Governance Committee's written terms of reference[80](index=80&type=chunk) [Compliance with Model Code for Securities Transactions by Directors of Listed Issuers](index=37&type=section&id=Compliance%20with%20Model%20Code%20for%20Securities%20Transactions%20by%20Directors%20of%20Listed%20Issuers) The Company has adopted the Model Code for Securities Transactions by Directors of Listed Issuers as its code of conduct for directors' securities transactions and confirmed that all directors complied with the code's standards for the year ended March 31, 2024 - The Company has adopted the Model Code for Securities Transactions by Directors of Listed Issuers as its code of conduct for directors' securities transactions[81](index=81&type=chunk) - Following specific inquiries with the directors, they have confirmed compliance with the required standards set out in the Model Code for the year ended March 31, 2024[81](index=81&type=chunk) [Publication of Results Announcement](index=37&type=section&id=Publication%20of%20Results%20Announcement) This results announcement has been published on the HKEX and the Company's websites, and the annual report will be dispatched to shareholders and published on the aforementioned websites in due course - This results announcement is published on the website of the Stock Exchange (www.hkexnews.hk) and the Company's website (www.culturecom.com.hk)[82](index=82&type=chunk) - The annual report will be dispatched to the Company's shareholders in due course and will be published on the aforementioned websites[82](index=82&type=chunk) [Employment and Remuneration Policies](index=29&type=section&id=Employment%20and%20Remuneration%20Policies) As of March 31, 2024, the Group employed a total of 47 employees, with staff costs amounting to approximately HKD 21,061 thousand, and management regularly reviews remuneration to ensure competitiveness, offering discretionary bonuses and share options based on performance - As of March 31, 2024, the Group employed a total of **47 employees**, with **31 in Hong Kong** and **16 in China**[216](index=216&type=chunk) - For the year ended March 31, 2024, staff costs from operations totaled approximately **HKD 21,061,000**[216](index=216&type=chunk) - Management regularly reviews remuneration to ensure its competitiveness, and certain directors and employees may receive discretionary bonuses and share options based on the Group's performance and their individual performance and achievements[216](index=216&type=chunk)

Revenue Performance - Total revenue decreased by 44.9% from HK$16,982,000 in 2022 to HK$9,355,000 in 2023[17] - Revenue from the publishing and IPs licensing business was HK$7,574,000 in 2023, up from HK$5,415,000 in 2022[9] - External sales revenue for the publishing and IPs licensing segment was HK$7,574,000, while digital marketing generated HK$1,781,000, contributing to a total revenue of HK$9,355,000 for the period[81] - For the six months ended September 30, 2023, total revenue was HK$9,355,000, with external sales from publishing and IP licensing contributing HK$7,574,000 and digital marketing contributing HK$1,781,000[148] - The geographical breakdown of revenue shows HK$7,574,000 generated from Hong Kong and HK$1,781,000 from the PRC[148] Digital Marketing Segment - The digital marketing segment has downsized significantly, reducing the number of employees from 22 to 4, resulting in substantial cost savings[8] - The remaining operation of the digital marketing segment in Beijing and Guangzhou has been significantly downsized, with an uncertain prospect for recovery[8] - The Group's focus on digital marketing has shifted to streamline operations, consolidating with Beijing Skyvior Technology Co. Ltd.[19] - Digital marketing segment generated HK$9,555,000 in revenue, indicating a significant contribution to overall performance[149] - The digital marketing segment includes services such as IPs digitalization and agency services in the PRC, reflecting strategic market positioning[153] Financial Performance - The loss for the period attributable to owners of the Company was HK$13,931,000, a reduction from HK$20,851,000 in the prior year, indicating a year-over-year improvement of approximately 33.5%[72] - For the six months ended September 30, 2023, the total comprehensive expense attributable to owners of the Company was HK$19,719,000, compared to HK$26,758,000 for the same period in 2022, representing a decrease of approximately 26.1%[72] - The loss before tax for the Company was HK$19,168,000, reflecting the overall financial performance for the interim period[81] - The Group reported a loss before tax of HK$23,922,000 for the six months ended September 30, 2023, compared to a segment loss of HK$8,713,000[131] - The company reported a basic and diluted loss per share of HK$0.8, an improvement from HK$1.2 in the previous year[72] Cost Management and Restructuring - The Group's restructuring efforts are aimed at conserving resources and controlling costs in a challenging economic environment[17] - The Group is focusing on selling premium wine in large lots to generate positive cash flow and move inventory as the economy recovers[1] - Approximately HK$19,700,000 from the convertible bond placement will be used for working capital to revitalize and promote the Group's intellectual properties[29] - The Group's focus on natural language processing aims to broaden its revenue and profit base, especially in the context of recovering from the adverse effects of the Covid-19 pandemic[31] - The Group's strategic initiatives include enhancing AI speech technology and maintaining sustainable levels in other business segments[43] Assets and Liabilities - As of September 30, 2023, the total assets less current liabilities amounted to HK$122,374,000, a decrease from HK$147,757,000 as of March 31, 2023, representing a decline of approximately 17%[95] - The net current assets were reported at HK$114,845,000, down from HK$133,475,000, indicating a decrease of about 14%[95] - The total equity attributable to owners of the company was HK$122,374,000, down from HK$147,400,000, reflecting a decline of approximately 17%[95] - The company recorded a decrease in trade receivables by HK$1,617,000, improving from a decrease of HK$2,802,000 in the previous year[103] - The company reported a net foreign exchange loss of HK$3,823, which may affect overall financial performance[161] Strategic Initiatives and Future Outlook - The Group plans to expand its publishing and distribution of certain comic titles in the last quarter of the fiscal year[9] - A strategic alliance was formed with iFlytek and Imitation Brain Technology to develop AI speech technology for real-time human interaction, focusing on offline Chinese language voice recognition chips[28] - The Group anticipates that the commercialization of AI speech technology will significantly contribute to revenues in the second half of the fiscal year[44] - The company continues to explore opportunities for market expansion and new product development as part of its strategic initiatives[84] - The company is committed to hiring professionals to build a technical and business development team for the natural language processing segment[33] Expenses and Costs - The company reported staff costs of HK$10,231,000, a decrease of 19.4% compared to HK$12,693,000 for the same period in 2022[188] - The amortization of intangible assets for the six months ended September 30, 2023, was HK$244,000, down from HK$501,000 in the previous year, representing a decline of 51.3%[188] - Research costs included in other expenses amounted to HK$500,000 for the six months ended September 30, 2023, significantly lower than HK$3,972,000 for the same period in 2022, indicating a reduction of 87.4%[188] - The company incurred legal, consultancy, and other professional fees of HK$3,054,000 for the six months ended September 30, 2023, slightly down from HK$3,103,000 in the previous year[188] - Depreciation of property and equipment was HK$34,000 for the six months ended September 30, 2023, a decrease of 59.5% from HK$84,000 in the same period of 2022[188] Taxation and Dividends - The Hong Kong profits tax is calculated at a rate of 16.5% on estimated assessable profits, with a lower rate of 8.25% applicable to the first HK$2 million of profits for qualifying group entities[190][192] - The tax rate for the company's subsidiaries in China was 25% for both interim periods, as per the Corporate Income Tax Law of the People's Republic of China[193] - No dividends were declared or proposed for the interim periods, as the board decided against any interim dividend payments[194]

香港交易及結算所有限公司及香港聯合交易所有限公司對本公告之內容概不負責，對其 準確性或完整性亦不發表任何聲明，並明確表示，概不就因本公告全部或任何部份內容 而產生或因倚賴該等內容而引致之任何損失承擔任何責任。 （於百慕達註冊成立之有限公司） （股份代號：00343） 截至二零二三年九月三十日止六個月之 中期業績公告 中期業績 文化傳信集團有限公司（「本公司」）董事（「董事」）會欣然宣佈本公司及其附屬公司（統稱「本 集團」）截至二零二三年九月三十日止六個月之未經審核簡明綜合中期業績，連同二零 二二年同期之比較數字如下： 簡明綜合損益及其他全面收益表 截至二零二三年九月三十日止六個月 截至九月三十日止六個月 二零二三年 二零二二年 千港元 千港元 附註 （未經審核） （未經審核） 收入 3 9,355 16,982 ...

Financial Performance - The consolidated turnover for the year ended 31 March 2023 was HK$30,600,000, a decrease of 50.9% from HK$62,365,000 in 2022[37]. - Revenue from digital marketing dropped 69.5% from HK$50,313,000 in 2022 to HK$15,328,000 in 2023[40]. - The loss for the year attributable to equity holders was HK$37,223,000, compared to HK$28,943,000 in 2022, with a loss per share of HK2.2 cents[37]. - The publishing and IPs licensing business generated revenue of HK$11,983,000 in 2023, slightly down from HK$12,052,000 in 2022[52]. - Retailing and wholesales business generated revenue of HK$3,289,000 in 2023, compared to HK$nil in the previous year[52]. - The Group's overall revenue decreased by approximately 50.9% from HK$62,365,000 in 2022 to HK$30,600,000 in 2023[73]. - The consolidated net loss attributable to the owners of the Company increased by approximately 28.6% to HK$37,223,000, or HK2.2 cents per share, compared to a loss of HK$28,943,000, or HK1.8 cents per share in 2022[73]. Corporate Actions - The Company entered into a Placing Agreement to issue Convertible Bonds with an aggregate principal amount of up to HK$100,000,000 at an initial Conversion Price of HK$0.50 per Share, potentially resulting in the allotment of up to 200,000,000 Conversion Shares[1]. - The net proceeds from the Placing are expected to be approximately HK$98,500,000 after deducting commissions and other costs[1]. - The Group disposed of its entire equity interest in Hyperchannel Info Tech., Ltd for a total cash consideration of RMB50,000[2]. - A resolution was passed to set up a liquidation group for Beijing Eqmen Technology Limited and Beijing Star Engine Information Technology Co., Ltd, aiming to reduce losses and reallocate resources[6]. - The voluntary liquidation of Eqmen and Beijing Star Engine is deemed appropriate to minimize losses and explore potential business opportunities[9]. - The Group plans to invest approximately HK$68,950,000 from the placement of convertible bonds into the development and production of natural language processing technology and related software and chipsets[65]. - The Group agreed to acquire the entire equity interests in Imitation Brain Technology (Shenzhen) Co., Ltd. for a total consideration of HK$63,000,000, to be settled by issuing 191,000,000 new shares[167]. Governance and Management - The Company maintains a strong governance structure with various committees overseeing operations and compliance[29]. - The company has a strong focus on corporate governance, with the Managing Director serving as the Chairman of the Corporate Governance Committee[184]. - The company has independent directors with experience in various international markets, including the American and Singapore stock exchanges, enhancing its governance and strategic oversight[195][197]. - The company is focused on expanding its market presence and enhancing corporate governance through experienced board members[196]. - The board's composition reflects a diverse range of skills and experiences, which is crucial for effective oversight and strategic direction[196]. - The company continues to prioritize strong governance practices to enhance shareholder value and operational efficiency[200]. Operational Efficiency and Cost Management - The Group plans to change the use of unutilized proceeds to cover general working capital needs, expected to be fully utilized by March 31, 2024[163]. - The Group is taking actions to reduce costs and improve profitability going forward[132]. - Selling expenses decreased from approximately HK$13,051,000 for the year ended 31 March 2022 to approximately HK$4,891,000 for the year ended 31 March 2023, a reduction of about 62.5%[95]. - Administrative expenses from operations totaled approximately HK$31,078,000 for the year ended 31 March 2023, down from HK$33,164,000 in 2022[95]. - The major expense components included staff costs of approximately HK$14,138,000, down from HK$17,337,000 in 2022, and directors' emoluments of approximately HK$6,211,000, up from HK$3,349,000 in 2022[80]. Future Outlook - The Group anticipates economic recovery in the second half of 2023 and aims to improve operational efficiency while fostering new business development[55]. - The Group expects the first application of AI speech recognition technology to yield significant results after years of research and development[60]. - The Group anticipates a recovery in the economy in the second half of 2023, which will support its business expansion efforts[56]. Employee and Workforce Changes - The total number of employees reduced from 84 in 2022 to 52 in 2023[54]. - The Group has decided to liquidate Beijing Eqmen Technology Limited and has downsized its digital marketing operations significantly, reducing employees from 54 to 9[52]. - The Group's employee count decreased from 84 in 2022 to 52 in 2023 due to the impact of the COVID-19 pandemic[56]. - Total staff costs for the year ended March 31, 2023, amounted to approximately HK$22,369,000, a decrease from HK$33,483,000 in the previous year[147].

香港交易及結算所有限公司及香港聯合交易所有限公司對本公告之內容概不負責，對其 準確性及完整性亦不發表任何聲明，並明確表示，概不對因本公告全部或任何部份內容 而產生或倚賴該等內容而引致之任何損失承擔任何責任。 （於百慕達註冊成立之有限公司） （股份代號：00343） 截至二零二三年三月三十一日止年度之 末期業績公告 業績 文化傳信集團有限公司（「本公司」）董事（「董事」）會欣然宣佈本公司及其附屬公司（統稱「本 集團」）截至二零二三年三月三十一日止年度之經審核綜合業績，連同二零二二年同期之 比較數字如下： 綜合損益及其他全面收益表 截至二零二三年三月三十一日止年度 二零二三年 二零二二年 附註 千港元 千港元 收入 3 30,600 62,365 銷售成本 (16,084) (40,607) ...

Revenue Performance - Revenue decreased from approximately HK$45.0 million to approximately HK$17.0 million, a decrease of 62.0% compared to the same period last year[7] - Revenue for the six months ended 30 September 2022 was HK$16,982,000, a decrease of 62.3% compared to HK$44,974,000 for the same period in 2021[25] - Total revenue for the six months ended September 30, 2022, was HK$16,982,000, a decrease from HK$44,974,000 for the same period in 2021, representing a decline of approximately 62.2%[86] - Revenue from publishing and IP licensing decreased from HK$7.2 million to HK$5.4 million during the corresponding interim periods[9] - For the six months ended 30 September 2022, total revenue was HK$16,982,000, with contributions from publishing and intellectual properties licensing (HK$5,415,000), digital marketing (HK$9,555,000), and retailing and wholesales (HK$2,012,000) [73] Expenses and Losses - Selling, administrative, and other expenses decreased by 29.8% from HK$37.9 million to HK$26.6 million during the six months ended 30 September 2022[9] - Gross profit for the period was HK$7,490,000, down 40.5% from HK$12,655,000 in the previous year[25] - Loss for the period was HK$23,922,000, compared to a loss of HK$25,657,000 in the same period of 2021, indicating a slight improvement[25] - Total comprehensive expense for the period was HK$30,237,000, an increase from HK$24,116,000 in the previous year[29] - The company recorded a loss for the period amounting to HK$20,851,000, contributing to a total comprehensive expense of HK$30,237,000 for the six months ended September 30, 2022[39] Cash Flow and Assets - Operating cash flows before movements in working capital were negative at HK$15,379,000 for the six months ended September 30, 2022, compared to negative HK$17,774,000 for the same period in 2021[47] - The total cash used in operating activities was HK$15,413,000 for the six months ended September 30, 2022, compared to cash generated of HK$16,311,000 in the same period of the previous year[47] - Cash and cash equivalents at the end of the period were HK$103,879,000, down from HK$121,578,000 at the end of the previous period [50] - The net decrease in cash and cash equivalents was HK$21,083,000, compared to an increase of HK$44,861,000 in the previous period [50] - Current assets totaled HK$169,300,000, down from HK$194,654,000 as of 31 March 2022[33] Workforce and Operational Changes - The workforce in Digital Marketing was significantly reduced from 84 employees at the beginning of the period to 22 employees as of 30 September 2022[9] - The Group has held back on its plan to expand the Digital Marketing business to conserve cash and working capital[7] - Business activities related to core Intellectual Properties and Digital Marketing have been significantly impacted by the Covid-19 pandemic[7] Strategic Initiatives - A cooperative arrangement or joint venture is being forged with an international advertising and marketing group to apply big data analysis in digital marketing[7] - The Group is focusing on broadening the scope of its licensing business and encouraging customers to use digital images[9] - A strategic alliance was formed with iFlytek and Imitation Brain Technology to develop an offline Chinese language voice recognition chip, expected to yield significant results from years of AI research[17] Share Capital and Equity - The company issued 278,000,000 new shares at HK$0.15 per share on May 6, 2021, with the excess over par value recognized in share premium[40] - The Group's issued and fully paid share capital remained at HK$16,687,000 as of September 30, 2022, unchanged from the previous period[168] - The company granted a total of 14,000,000 share options to Mr. Wong and a consultant, representing approximately 0.84% of the total issued shares post-exercise[172] Government Support and Subsidies - The company received government subsidies amounting to HK$565,000 during the period [50] - Other income included government grants of approximately HK$565,000 related to Covid-19 subsidies, a new addition compared to no such income in the previous year[95] Financial Ratios and Performance Metrics - Basic and diluted loss per share remained at HK$1.2 for both periods[29] - The weighted average number of ordinary shares for the purpose of basic loss per share increased to 1,668,657,000 shares in 2022 from 1,614,580,000 shares in 2021, reflecting an increase of about 3.3%[128] - The digital marketing segment reported a significant loss of HK$9,137,000, highlighting challenges in this area[86] Impairment and Valuation - The company recognized no impairment loss for goodwill related to its subsidiaries Eqmen Technology Limited and Hyperchannel Info Tech., Ltd during the six months ended 30 September 2022, compared to an impairment of HK$1,396,000 for Hyperchannel Info in the same period of 2021[105][108] - The fair value of listed equity securities classified as financial assets at fair value through profit or loss was HK$8,554,000 as of 30 September 2022, compared to HK$8,370,000 as of 31 March 2022[186]

Financial Performance - The consolidated turnover for the year ended March 31, 2022, was HK$62,365,000, a decrease of 69.8% from HK$206,605,000 in 2021[23] - Revenue from digital marketing dropped 75% from HK$198,394,000 in 2021 to HK$50,313,000 in 2022[26] - The loss attributable to equity holders for the year was HK$28,943,000, compared to a loss of HK$57,191,000 in 2021[23] - The loss per share was HK1.8 cents, down from HK4.1 cents in the previous year[23] - Overall revenue dropped approximately 70% from HK$206,605,000 in 2021 to HK$62,365,000 in 2022[46] - Loss attributable to shareholders reduced by about 49.4% from HK$57,191,000 in 2021 to HK$28,943,000 in 2022[46] - The Group's consolidated net loss attributable to the owners decreased by approximately 49.4% to HK$28,943,000 or HK1.8 cents per share for the year ended 31 March 2022, compared to a loss of HK$57,191,000 or HK4.1 cents per share in 2021[59] - Overall revenue from continuing operations significantly decreased by approximately 70% from HK$206,605,000 to HK$62,365,000 for the year ended 31 March 2022[59] Operational Efficiency and Cost Management - The group focused on improving profit margins and reducing expenses amid a challenging business environment due to Covid-19[26] - The original plans for business development and increased manpower were scaled back due to the ongoing impact of the Covid-19 pandemic[31] - Selling expenses from continuing operations decreased from approximately HK$30,734,000 in 2021 to approximately HK$13,051,000 in 2022[64] - Administrative expenses from continuing operations decreased to approximately HK$33,164,000 for the year ended 31 March 2022, down from HK$43,138,000 in 2021[70] - The decrease in administrative expenses was mainly due to lower business activities under the Covid-19 pandemic and streamlining of operations[70] - Total staff costs from continuing operations for the year ended 31 March 2022 were approximately HK$33,483,000, a reduction from HK$54,456,000 in 2021[84] Digital Marketing Segment - The gross profit margin for the digital marketing segment improved from approximately 17% in 2021 to 30% in 2022[31] - The gross margin of the Digital Marketing segment increased from 17% in 2021 to 30% in 2022[33] - The total number of employees in the Digital Marketing segment decreased from 133 at the end of fiscal 2021 to 54 at the end of fiscal 2022[46] - Research and development costs amounted to approximately HK$10,239,000 in 2022, compared to HK$9,453,000 in 2021, aimed at enhancing digital marketing operations[6] Share Subscription and Financial Position - The Group raised approximately HK$41,575,000 through a subscription of new shares to strengthen its financial position and fund new projects[52] - The current ratio improved to approximately 12.9 as of 31 March 2022, compared to 3.2 in 2021, indicating enhanced liquidity[78] - The net proceeds from the share subscription amounted to approximately HK$40.4 million, with 20.8% allocated for working capital to strengthen the marketing and technical team[95] - HK$15.2 million, representing 36.7% of the total net proceeds, is designated for working capital to provide Key Opinion Leader (KOL) management services[95] - The company has earmarked HK$11.9 million, or 28.7% of the total net proceeds, for potential acquisition opportunities to enhance competitiveness and long-term sustainability[95] Acquisition Plans - The Group is pursuing an acquisition of a PRC company specializing in AI voice recognition, pending shareholder approval[53] - The proposed acquisition involves purchasing the entire equity interests in Imitation Brain Technology (Shenzhen) Co., Ltd. for a total consideration of HK$63 million, to be settled by issuing 191 million new shares at approximately HK$0.33 each[98] Governance and Management - The Company’s Executive Directors include Ms. Chow Lai Wah Livia, Mr. Kwan Kin Chung, and Mr. Yuen Kin, with extensive experience in corporate management and finance[132][133][138] - Mr. Kwan Kin Chung has been with the Group since 1998 and has held various leadership roles, including Managing Director since March 2008[133] - Mr. Yuen Kin, appointed as an Executive Director in September 2017, holds a Master of Business Administration degree and has extensive experience in corporate finance[138] - The Company has a strong governance structure with members on various committees, including Audit, Remuneration, and Nomination[161] - The board includes members with significant experience in both local and international markets, enhancing the company's governance[169] Share Capital and Options - The number of shares available for issue under the 2013 share option scheme is 14,000,000 shares, representing approximately 0.84% of the issued share capital as of the date of the annual report[194] - No share options were granted, exercised, cancelled, or lapsed during the year ended 31 March 2022[200] - Jason Wong was granted 8,000,000 share options at an exercise price of HK$0.72, with an exercise period from 27 April 2022 to 26 April 2025[197] - A consultant of the Group was granted 6,000,000 share options at an exercise price of HK$0.72, with the same exercise period as above[198]

Revenue Performance - During the interim period ended 30 September 2021, the Group's revenue from digital marketing decreased from HK$79.6 million to HK$45.0 million, a decline of 43.5% compared to the same period last year[7]. - Revenue from continuing operations for the six months ended September 30, 2021, was HK$44,974,000, a decrease of 43.5% compared to HK$79,576,000 in 2020[20]. - The Group's revenue for the same period in 2020 was HK$79,576,000, indicating a significant decrease in revenue year-over-year[60]. - For the six months ended 30 September 2021, total revenue was HK$44,974,000, comprising HK$7,201,000 from publishing and intellectual properties licensing and HK$37,773,000 from digital marketing[56]. - Revenue from the digital marketing business significantly decreased from HK$75,711,000 to HK$37,773,000, attributed to clients reducing outsourcing of advertising and marketing activities[187]. - Revenue from the publishing and IP licensing business increased from HK$3.9 million to HK$7.2 million during the corresponding interim periods[8]. - The revenue from new media advertising was HK$35,517,000, while social media marketing contributed HK$2,256,000[56]. Financial Performance - Gross profit for the same period was HK$12,655,000, down 39.1% from HK$20,908,000 in 2020[20]. - The Group recorded a gross profit of approximately HK$12,655,000 with a gross profit margin of 28.1%, compared to a gross profit of HK$20,908,000 and a margin of 26.3% in the same period of 2020[187]. - Loss before tax increased to HK$25,673,000, compared to a loss of HK$24,529,000 in the previous year, reflecting a 4.7% increase in losses[20]. - The total comprehensive income for the period was a loss of HK$25,657,000, compared to a loss of HK$21,077,000 in the previous year[35]. - The loss for the period attributable to owners of the Company was HK$20,171,000 in 2021, compared to HK$19,783,000 in 2020, showing an increase in loss[114]. - The Group recorded a loss from continuing operations of approximately HK$25,657,000 for the six months ended 30 September 2021, compared to HK$24,400,000 in 2020[191]. Cost Management - Selling, administrative, and other expenses decreased by 10.2% from HK$42.2 million to HK$37.9 million during the six months ended 30 September 2021[8]. - Staff costs decreased to HK$19,163,000 in 2021 from HK$24,158,000 in 2020, indicating a reduction of approximately 20.7%[104]. - Administrative expenses from continuing operations decreased to approximately HK$19,065,000 for the six months ended 30 September 2021, down from HK$19,878,000 in 2020[188]. - Selling expenses from continuing operations decreased from approximately HK$13,746,000 to approximately HK$8,957,000, mainly due to reduced revenue from the digital marketing segment[187]. Asset and Liability Management - Non-current assets decreased to HK$7,637,000 from HK$13,825,000 as of March 31, 2021, indicating a decline of 44.7%[25]. - Current assets increased to HK$233,535,000 from HK$231,893,000, showing a slight increase of 0.7%[25]. - Total equity increased to HK$190,033,000 from HK$172,574,000, marking an increase of 10.1%[27]. - The Group's total liabilities as of 30 September 2021 amounted to approximately HK$51,139,000, down from HK$73,144,000 as of 31 March 2021[192]. - The Group reported a significant reduction in trade receivables, which fell to HK$26,231,000 from HK$62,841,000, a decrease of 58.3%[25]. - Trade payables amounted to HK$4,776,000, a decrease from HK$14,519,000 as of 31 March 2021, reflecting a significant reduction of approximately 67.1%[136]. Strategic Initiatives - The Group is focusing on maintaining and strengthening its marketing and technical team to expand service offerings, including the development and management of Multi-channel Networks (MCNs)[7]. - A cooperative arrangement or joint venture is being established with an international advertising and marketing group to enhance digital marketing capabilities using big data analyses[7]. - The Group is attempting to establish more distribution channels for premium wines, including online platforms and wine dealers[11]. - The Group is exploring more distribution channels for its premium wines, indicating a potential strategy for market expansion[78]. - The Group aims to utilize the proceeds to expand its digital marketing segment, focusing on various strategic initiatives[196]. Shareholder Actions - The Group raised HK$41.6 million by placing 278 million new shares in May 2021, primarily for general working capital and acquisition[11]. - The share subscription was completed on May 6, 2021, with net proceeds of approximately HK$41,575,000 intended for the expansion of the Group's digital marketing segment[196]. - The subscription agreement involved the allotment of 278,000,000 shares at a subscription price of HK$0.15 per share[195]. - The share subscription was approved by shareholders at a special general meeting on April 30, 2021[195]. Compliance and Governance - The Group's financial statements have been prepared in accordance with HKAS 34 and applicable disclosure requirements, ensuring compliance with accounting standards[1]. - The Group's accounting policies remain consistent with those presented in the annual financial statements for the year ended 31 March 2021[47]. - The application of amendments to HKFRSs in the current interim period has had no material impact on the Group's financial positions and performance[53].