Core Insights - ST Lianchuang (300343.SZ) reported a total operating revenue of 443 million yuan for the first half of 2025, an increase of 50.39 million yuan or 12.83% compared to the same period last year [1] - The net profit attributable to shareholders reached 11.70 million yuan, an increase of 24.42 million yuan compared to the same period last year [1] - The net cash inflow from operating activities was 15.92 million yuan, an increase of 34.28 million yuan year-on-year [1] Financial Ratios - The latest debt-to-asset ratio stands at 18.83%, a decrease of 2.80 percentage points from the same period last year [3] - The gross profit margin is reported at 13.50%, an increase of 4.78 percentage points year-on-year [3] - The return on equity (ROE) is 0.61%, an increase of 1.27 percentage points compared to the same period last year [3] Earnings and Turnover - The diluted earnings per share are 0.01 yuan, an increase of 0.02 yuan from the same period last year [4] - The total asset turnover ratio is 0.18 times, an increase of 0.04 times or 26.24% year-on-year [4] - The inventory turnover ratio is 2.29 times, an increase of 0.02 times, marking two consecutive years of growth, with a year-on-year increase of 0.81% [4] Shareholder Information - The number of shareholders is 66,300, with the top ten shareholders holding a total of 174 million shares, accounting for 16.29% of the total share capital [4] - The largest shareholder, Li Hongguo, holds 12.14% of the shares [4]

Group 1 - The company ST Lianchuang (300343.SZ) reported a revenue of 443 million yuan for the first half of 2025, representing a year-on-year growth of 12.83% [1] - The net profit attributable to shareholders of the listed company was 11.6992 million yuan, marking a turnaround from a loss to profit compared to the previous year [1] - The net profit attributable to shareholders after deducting non-recurring gains and losses was 4.3074 million yuan, with a basic earnings per share of 0.0110 yuan [1]

Core Viewpoint - ST Lianchuang (300343.SZ) has indicated that the company is not currently involved in the production of fluorinated liquid electronic cooling products, but its fourth-generation refrigerants can be utilized for cooling AI computing hardware [1] Company Summary - ST Lianchuang does not have any current involvement in fluorinated liquid electronic cooling products [1] - The company's fourth-generation refrigerants are applicable for AI computing hardware cooling [1]

Group 1 - The company ST Lianchuang (300343.SZ) announced a share buyback program, having repurchased a total of 12,104,900 shares as of July 31, 2025, which represents 1.13% of the total share capital [1] - The shares were repurchased through a special securities account via centralized bidding, with a maximum transaction price of 4.28 yuan per share and a minimum transaction price of 3.93 yuan per share [1] - The total amount spent on the share buyback reached approximately 50.194917 million yuan, excluding transaction fees [1]

股份發行人及根據《上市規則》第十九B章上市的香港預託證券發行人的證券變動月報表 截至月份: 2025年7月31日 狀態: 新提交 致：香港交易及結算所有限公司 公司名稱: 文化傳信集團有限公司 呈交日期: 2025年8月1日 I. 法定/註冊股本變動 | 1. 股份分類 | 普通股 | 股份類別 | 不適用 | | | 於香港聯交所上市 (註1) | | 是 | | | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | | 證券代號 (如上市) | 00343 | 說明 | 普通股 | | | | | | | | | | 法定/註冊股份數目 | | | 面值 | | | 法定/註冊股本 | | | 上月底結存 | | | 200,000,000,000 | HKD | | 0.01 | HKD | | 2,000,000,000 | | 增加 / 減少 (-) | | | | | | | HKD | | | | 本月底結存 | | | 200,000,000,000 | HKD | | 0.01 | HKD | | 2,000,000,00 ...

[CHAIRMAN'S STATEMENT](index=6&type=section&id=CHAIRMAN%27S%20STATEMENT) [Results Overview](index=6&type=section&id=Results) For FY2025, the company's consolidated turnover decreased by 14.0% to **HKD 17.33 million**, with loss attributable to equity holders expanding to **HKD 27.96 million** and **1.7 HK cents** loss per share Key Performance Indicators for FY2025 | Indicator | FY2025 (HKD thousands) | FY2024 (HKD thousands) | YoY Change | | :--- | :--- | :--- | :--- | | Consolidated Turnover | 17,328 | 20,158 | -14.0% | | Loss attributable to equity holders | 27,963 | 20,782 | +34.6% | | Loss per share | 1.7 HK cents | 1.2 HK cents | +41.7% | | Final Dividend | Nil | Nil | - | [Business Review](index=6&type=section&id=BUSINESS%20REVIEW) The Group focused on cost control amidst an incomplete macroeconomic recovery, with publishing and IP licensing stable, digital marketing contracting by **95.7%**, and the new Natural Language Processing business in R&D with no significant short-term revenue Revenue Performance by Business Segment (HKD thousands) | Business Segment | FY2025 | FY2024 | YoY Change | | :--- | :--- | :--- | :--- | | Publishing and Intellectual Property Licensing | 15,990 | 15,104 | +5.9% | | Digital Marketing | 111 | 2,597 | -95.7% | | Retail and Wholesale | 1,227 | 2,457 | -50.1% | - The Natural Language Processing business focuses on developing software and chipsets for Chinese speech recognition, having secured several invention patents; due to intense market competition, the Group adopts a cautious strategy, primarily entering the market through partnerships or licensing, which may not generate significant revenue in the short term; net operating expenses for this business in the current fiscal year were approximately **HKD 2.58 million**[26](index=26&type=chunk)[27](index=27&type=chunk)[28](index=28&type=chunk) [Prospects](index=9&type=section&id=PROSPECT) The Group aims to commercialize its Natural Language Processing business for smart home, cockpit, and smartphone applications, while also revitalizing existing IP and exploring AI-generated film and television content to capitalize on Hong Kong's cultural nostalgia and original IP trends - The Group plans to apply Natural Language Processing technology to smart home, smart cockpit, and smartphone sectors through technology licensing partnerships[29](index=29&type=chunk)[31](index=31&type=chunk) - To align with market trends, the Group will revitalize its proprietary IP with partners, launching branded products and AI-generated film and television content, while maintaining traditional comic publishing and licensing businesses[29](index=29&type=chunk)[31](index=31&type=chunk) [MANAGEMENT DISCUSSION AND ANALYSIS](index=10&type=section&id=MANAGEMENT%20DISCUSSION%20AND%20ANALYSIS) [Financial Results](index=10&type=section&id=FINANCIAL%20RESULTS) The consolidated net loss attributable to owners of the Company expanded by 34.6% to **HKD 27.96 million** this fiscal year, driven by a 14.0% decline in total revenue primarily from digital marketing and retail/wholesale, despite a slight increase in publishing and IP licensing revenue, and an increase in impairment losses on right-of-use assets and intangible assets, leading to an expanded operating loss of **HKD 28.40 million** Financial Results Summary for FY2025 (HKD thousands) | Item | FY2025 | FY2024 | YoY Change | | :--- | :--- | :--- | :--- | | Total Revenue | 17,328 | 20,158 | -14.0% | | Gross Profit | 7,627 | 9,851 | -22.6% | | Gross Profit Margin | 44.0% | 48.9% | -4.9pp | | Administrative Expenses | 26,391 | 28,909 | -8.7% | | Operating Loss | 28,400 | 20,929 | +35.7% | | Loss for the Year | 27,963 | 20,782 | +34.6% | | Loss per share | 1.7 HK cents | 1.2 HK cents | +41.7% | | Net Assets | 80,119 | 108,679 | -26.3% | - Revenue decline was primarily due to the digital marketing business (**-95.7%**) and retail and wholesale business (**-50.1%**), with the former due to scaled-down operations and the latter due to a lack of bulk sales opportunities, while publishing and IP licensing revenue grew by **5.9%**[35](index=35&type=chunk)[36](index=36&type=chunk)[39](index=39&type=chunk) - Administrative expenses decreased mainly due to reductions in staff costs, audit fees, and directors' emoluments, reflecting the company's cost control efforts[46](index=46&type=chunk)[48](index=48&type=chunk) - Other impairment losses significantly increased, primarily including **HKD 1.69 million** for right-of-use assets and **HKD 0.55 million** for intangible assets[49](index=49&type=chunk)[53](index=53&type=chunk) [Liquidity and Financial Resources](index=15&type=section&id=LIQUIDITY%20AND%20FINANCIAL%20RESOURCES) As of March 31, 2025, the Group held cash and bank balances of **HKD 18.43 million**, with net current assets of **HKD 43.85 million** and a current ratio decreasing from 6.8 to 3.5, while the gearing ratio increased from 15.5% to 20.8%; to supplement working capital, the Group secured a **HKD 2 million** short-term loan in May 2025, and the directors believe the Group's liquidity is sufficient for daily operations Liquidity and Financial Position Indicators (HKD thousands) | Indicator | March 31, 2025 | March 31, 2024 | | :--- | :--- | :--- | | Cash and bank balances | 18,430 | - | | Net current assets | 43,850 | 101,410 | | Current ratio | 3.5 | 6.8 | | Total liabilities | 17,740 | 17,600 | | Gearing ratio | 20.8% | 15.5% | - In May 2025, the Group obtained an unsecured short-term loan of **HKD 2 million** from an independent third party at an annual interest rate of **24%** to supplement working capital[62](index=62&type=chunk)[65](index=65&type=chunk) [Employment and Remuneration Policies](index=16&type=section&id=EMPLOYMENT%20AND%20REMUNERATION%20POLICIES) As of March 31, 2025, the Group had 45 employees, a decrease of 2 from the previous year, with total staff costs for the year amounting to approximately **HKD 17.77 million**, a 15.6% year-on-year decrease Employment Situation (HKD thousands) | Indicator | March 31, 2025 | March 31, 2024 | | :--- | :--- | :--- | | Total number of employees | 45 | 47 | | - Hong Kong | 30 | - | | - China | 15 | - | | Total staff costs | 17,770 | 21,060 | [Proposed Acquisition](index=17&type=section&id=PROPOSED%20ACQUISITION) The Group's plan to acquire the entire equity of Brain-like Technology (Shenzhen) Co., Ltd. for a total consideration of **HKD 63 million**, proposed to be settled by issuing consideration shares, was jointly terminated by the vendor and the company on November 29, 2024 - The original plan to acquire Brain-like Technology (IBT) for **HKD 63 million** was terminated on November 29, 2024[71](index=71&type=chunk)[72](index=72&type=chunk)[74](index=74&type=chunk) [Proposed Placing of Non-Listed Warrants](index=18&type=section&id=PROPOSED%20PLACING%20OF%20NON-LISTED%20WARRANTS) On April 16, 2025, the company agreed to use its best efforts to place up to 200 million non-listed warrants at **HKD 0.031** per warrant, expecting net proceeds of approximately **HKD 5.45 million** if fully placed, with potential additional proceeds of up to **HKD 60 million** if warrants are fully exercised at an initial exercise price of **HKD 0.3** per share, totaling approximately **HKD 65.45 million** in net proceeds primarily for IP revitalization (**67%**) and general working capital (**33%**), pending EGM approval Proposed Placing of Non-Listed Warrants Details | Item | Details | | :--- | :--- | | Number of Warrants to be Placed | Up to 200,000,000 | | Placing Price | HKD 0.031 per warrant | | Initial Exercise Price | HKD 0.3 per share | | Gross/Net Proceeds from Placing | Approx. HKD 6,200 thousand / HKD 5,450 thousand | | Additional Proceeds upon Full Exercise | Up to approx. HKD 60,000 thousand | | Use of Total Net Proceeds | - Revitalization and promotion of IP: approx. HKD 43,630 thousand (67%)<br>- General working capital: approx. HKD 21,820 thousand (33%) | [Voluntary Liquidation of Two Non-Wholly Owned Subsidiaries](index=20&type=section&id=VOLUNTARY%20LIQUIDATION%20OF%20TWO%20NON-WHOLLY%20OWNED%20SUBSIDIARIES) To reduce losses and reallocate resources, the Group initiated voluntary liquidation for two non-wholly owned subsidiaries engaged in digital marketing, with Beijing Eqmen Technology Co., Ltd. (Eqmen) liquidation completed in March 2024, Beijing Star Engine Information Technology Co., Ltd. (Beijing Star Engine) liquidation ongoing, and wholly-owned subsidiary Guangzhou Honghao Technology Co., Ltd. deregistration completed on July 4, 2024 - The voluntary liquidation of Beijing Eqmen (Eqmen) was completed in March 2024[88](index=88&type=chunk)[92](index=92&type=chunk) - The voluntary liquidation process for Beijing Star Engine (Beijing Star Engine) is still ongoing[88](index=88&type=chunk)[92](index=92&type=chunk) - Wholly-owned subsidiary Guangzhou Honghao Technology Co., Ltd. completed its deregistration on July 4, 2024[90](index=90&type=chunk)[94](index=94&type=chunk) [DIRECTORS' REPORT](index=21&type=section&id=DIRECTORS%27%20REPORT) [Principal Activities and Major Customers and Suppliers](index=21&type=section&id=PRINCIPAL%20ACTIVITIES) As an investment holding company, the company's principal subsidiaries engage in publishing, IP licensing, digital marketing, retail and wholesale, and natural language processing businesses; this year, the Group exhibited high reliance on major customers and suppliers, with the top five customers accounting for **86.5%** of turnover from continuing operations and the largest customer for **28.7%**, while the top five suppliers accounted for **74.9%** of total purchases and the largest supplier for **28.2%** - The Group's top five customers accounted for **86.5%** of turnover from continuing operations, with the largest customer contributing **28.7%**[100](index=100&type=chunk)[105](index=105&type=chunk) - The Group's top five suppliers accounted for **74.9%** of total purchases from continuing operations, with the largest supplier contributing **28.2%**[100](index=100&type=chunk)[106](index=106&type=chunk) [Share Capital and Share Option Schemes](index=23&type=section&id=SHARE%20CAPITAL%20AND%20SHARE%20OPTIONS) The company's 2013 Share Option Scheme expired in August 2023, and a new 2023 scheme was adopted in the same year; as of March 31, 2025, **14 million** unexercised share options remained under the 2013 scheme, which lapsed after April 26, 2025, and no share options were granted, exercised, cancelled, or lapsed under either scheme during the current year Outstanding Share Options under 2013 Scheme (as of March 31, 2025) | Holder Category | Name | Number of Outstanding Options | Exercise Price per Share (HKD) | Exercise Period | | :--- | :--- | :--- | :--- | :--- | | Director | Wong Kon Man Jason | 8,000,000 | 0.72 | April 27, 2022 to April 26, 2025 | | Others (Consultant) | - | 6,000,000 | 0.72 | April 27, 2022 to April 26, 2025 | | **Total** | | **14,000,000** | | | - The 2013 Share Option Scheme expired on August 11, 2023, with no further options granted thereafter; a new 2023 Share Option Scheme was adopted on August 29, 2023[184](index=184&type=chunk)[189](index=189&type=chunk) - As of the report date, all **14,000,000** share options granted under the 2013 scheme lapsed on April 26, 2025, leaving no outstanding share options under that scheme[1016](index=1016&type=chunk) [Disclosure of Interests](index=39&type=section&id=DISCLOSURE%20OF%20INTERESTS) As of March 31, 2025, Non-Executive Director Mr. Wong Kon Man held **8 million** share options, while major shareholders L&W Holding Limited, Mr. Dizon Basilio, and Ms. Chow Lai Wah Livia were deemed to jointly hold **276,975,112** shares, representing **16.6%** of the issued share capital Directors' Interests (Share Options) | Director Name | Capacity | Nature of Interest | Number of Share Options | Approximate Percentage of Issued Share Capital | | :--- | :--- | :--- | :--- | :--- | | Mr. Wong Kon Man | Beneficial Owner | Personal Interest | 8,000,000 | 0.48% | Major Shareholders' Interests (Shares) | Shareholder Name/Name | Capacity | Number of Shares Held | Approximate Percentage of Issued Share Capital | | :--- | :--- | :--- | :--- | | L&W Holding Limited | Beneficial Owner | 178,767,312 | 10.71% | | Mr. Dizon Basilio | Interest in controlled corporation and spouse's interest, etc. | 276,975,112 | 16.6% | | Ms. Chow Lai Wah Livia | Interest in controlled corporation and spouse's interest, etc. | 276,975,112 | 16.6% | [CORPORATE GOVERNANCE REPORT](index=48&type=section&id=CORPORATE%20GOVERNANCE%20REPORT) [Corporate Governance Practices and Compliance](index=48&type=section&id=CORPORATE%20GOVERNANCE%20PRACTICES) The company is committed to maintaining high corporate governance standards and has adopted the Corporate Governance Code under the Listing Rules, complying with most code provisions during the year, with deviations including independent non-executive directors not being appointed for specific terms (but subject to retirement by rotation), a temporary shortfall in the minimum number of independent non-executive directors from May 6 to July 31, 2024, and the Corporate Governance Committee having fewer members than stipulated in its written terms of reference - The company deviates from code provision B.2.2, where independent non-executive directors are not appointed for specific terms, but the company believes the arrangement for all directors to retire by rotation achieves an equally stringent governance effect[249](index=249&type=chunk)[250](index=250&type=chunk) - Due to Mr. Fan Chun Wah's resignation, the number of independent non-executive directors temporarily fell to two between May 6 and July 31, 2024, below the minimum of three required by the Listing Rules[251](index=251&type=chunk)[252](index=252&type=chunk) - The Corporate Governance Committee currently has three members, fewer than the four stipulated in its written terms of reference, and the Board will identify candidates to fill the vacancy[253](index=253&type=chunk)[255](index=255&type=chunk) [Board of Directors](index=50&type=section&id=BOARD%20OF%20DIRECTORS) The Board of Directors is primarily responsible for leading and controlling the Group, formulating overall strategies, and overseeing financial performance; the roles of Chairman and Chief Executive Officer are segregated, held by Mr. Wong Kon Man and Dr. Liu Yin Hung respectively, though the CEO has been on leave for personal reasons since June 2024, with his duties temporarily assumed by Managing Director Mr. Kwan Kin Chung; the Board held 5 meetings during the year, with generally high director attendance Board Meeting Attendance (FY2025) | Director Name | Position | Attendance/Meetings Held | | :--- | :--- | :--- | | Mr. Kwan Kin Chung | Executive Director | 5/5 | | Mr. Wong Kon Man | Non-Executive Director (Chairman) | 5/5 | | Dr. Liu Ka Ying | Non-Executive Director (Vice Chairman) | 5/5 | | Mr. Wong Kwan Kit | Independent Non-Executive Director | 5/5 | | Mr. Mong Yat Lik | Independent Non-Executive Director | 5/5 | | Mr. Fung Ting Ho | Independent Non-Executive Director | 3/3 | - The roles of Chairman and Chief Executive Officer are segregated, but since June 2024, Chief Executive Officer Dr. Liu Yin Hung has been on leave for personal reasons, with his duties temporarily assumed by Managing Director Mr. Kwan Kin Chung[266](index=266&type=chunk)[267](index=267&type=chunk) [Board Committees](index=54&type=section&id=BOARD%20COMMITTEES) The company has an Audit Committee, Remuneration Committee, Nomination Committee, and Corporate Governance Committee; the Audit Committee, comprising three independent non-executive directors, held 4 meetings this year to review financial statements and internal controls; the Remuneration Committee, comprising two independent non-executive directors and one executive director, held 1 meeting; the Nomination Committee, comprising three independent non-executive directors, held 2 meetings and has adopted a Board Diversity Policy - The Audit Committee comprises three independent non-executive directors, chaired by Mr. Wong Kwan Kit, and held 4 meetings this year[279](index=279&type=chunk)[283](index=283&type=chunk) - The Remuneration Committee comprises two independent non-executive directors and one executive director, chaired by Mr. Wong Kwan Kit, and held 1 meeting this year[285](index=285&type=chunk)[288](index=288&type=chunk) - The Nomination Committee comprises three independent non-executive directors, chaired by Mr. Fung Ting Ho, and held 2 meetings this year[290](index=290&type=chunk)[298](index=298&type=chunk) - As of March 31, 2025, the Board's gender ratio was **16.6%** female and **83.4%** male[304](index=304&type=chunk) [Accountability and Audit](index=61&type=section&id=ACCOUNTABILITY%20AND%20AUDIT) Directors are responsible for preparing true and fair financial statements; this year, audit and non-audit service fees paid to the auditor were **HKD 1 million** and **HKD 0.23 million** respectively; the Group conducts annual reviews of its risk management and internal control systems through the Audit Committee and Corporate Governance Committee; due to scale and cost-effectiveness considerations, the Group has not established an internal audit department but engages independent consultants for reviews, and the Board considers the existing systems to be adequate and effective - This year, audit service fees paid to the auditor amounted to **HKD 1 million**, and non-audit service fees amounted to **HKD 0.23 million**[309](index=309&type=chunk)[312](index=312&type=chunk) - The Group has not established an internal audit function but engages independent consultants to review its risk management and internal control systems; the Board considers these systems to be adequate and effective, with no significant control failures or deficiencies identified[326](index=326&type=chunk)[327](index=327&type=chunk) [INDEPENDENT AUDITOR'S REPORT](index=69&type=section&id=INDEPENDENT%20AUDITOR%27S%20REPORT) [Auditor's Opinion](index=69&type=section&id=OPINION) Addison & Co. CPA Limited issued an unmodified opinion on the company's consolidated financial statements for the year ended March 31, 2025, affirming that the statements present a true and fair view of the Group's consolidated financial position, performance, and cash flows in accordance with Hong Kong Financial Reporting Standards and are properly prepared in compliance with the disclosure requirements of the Hong Kong Companies Ordinance - The auditor issued an unmodified opinion, stating that the consolidated financial statements present a true and fair view of the Group's financial position and performance[350](index=350&type=chunk)[353](index=353&type=chunk) [Key Audit Matters](index=70&type=section&id=KEY%20AUDIT%20MATTERS) This year's key audit matter is the Net Realizable Value (NRV) assessment of fine wines inventory, deemed critical due to its materiality to the overall statement of financial position (carrying amount approximately **HKD 30.05 million**) and the significant judgment involved in its NRV estimation; the auditor addressed this by discussing the assessment process with management, evaluating the reasonableness of estimates (including obtaining external valuation reports and conducting independent market research), among other procedures - The key audit matter is the Net Realizable Value (NRV) assessment of fine wines inventory, due to its material carrying amount (approximately **HKD 30.05 million**) and the significant judgment involved in its estimation[358](index=358&type=chunk)[361](index=361&type=chunk) - The auditor's procedures included discussing management's assessment process, evaluating the reasonableness of NRV estimates, obtaining external valuation reports, assessing valuation methodologies and key assumptions, and conducting independent market research[360](index=360&type=chunk)[363](index=363&type=chunk) [CONSOLIDATED FINANCIAL STATEMENTS](index=78&type=section&id=CONSOLIDATED%20FINANCIAL%20STATEMENTS) [Consolidated Statement of Profit or Loss and Other Comprehensive Income](index=78&type=section&id=CONSOLIDATED%20STATEMENT%20OF%20PROFIT%20OR%20LOSS%20AND%20OTHER%20COMPREHENSIVE%20INCOME) For FY2025, the Group's revenue decreased by 14.0% year-on-year to **HKD 17.33 million**, and gross profit decreased by 22.6% to **HKD 7.63 million**; due to a significant reduction in other income and an increase in other losses, the loss for the year expanded from **HKD 20.93 million** to **HKD 28.40 million**, with loss attributable to owners of the Company at **HKD 27.96 million** and basic loss per share at **1.7 HK cents** Consolidated Income Statement Summary (HKD thousands) | Item | FY2025 | FY2024 | | :--- | :--- | :--- | | Revenue | 17,328 | 20,158 | | Gross Profit | 7,627 | 9,851 | | Loss before tax | (28,728) | (20,808) | | Loss for the Year | (28,400) | (20,929) | | Loss attributable to owners of the Company | (27,963) | (20,782) | | Total Comprehensive Expenses | (28,560) | (23,712) | [Consolidated Statement of Financial Position](index=81&type=section&id=CONSOLIDATED%20STATEMENT%20OF%20FINANCIAL%20POSITION) As of March 31, 2025, the Group's total assets were **HKD 97.86 million**, total liabilities were **HKD 17.74 million**, and net assets were **HKD 80.12 million**, a 26.3% decrease from **HKD 108.68 million** in the prior year; non-current assets significantly increased due to a substantial rise in intangible assets, while current assets sharply declined due to reduced other receivables and cash, and current liabilities remained largely stable Consolidated Statement of Financial Position Summary (HKD thousands) | Item | March 31, 2025 | March 31, 2024 | | :--- | :--- | :--- | | **Assets** | | | | Non-current assets | 36,635 | 7,268 | | Current assets | 61,226 | 119,014 | | **Total Assets** | **97,861** | **126,282** | | **Liabilities and Equity** | | | | Current liabilities | 17,379 | 17,603 | | Non-current liabilities | 363 | – | | **Total Liabilities** | **17,742** | **17,603** | | **Net Assets** | **80,119** | **108,679** | | Equity attributable to owners of the Company | 85,484 | 113,787 | | Non-controlling interests | (5,365) | (5,108) | | **Total Equity** | **80,119** | **108,679** | [Consolidated Statement of Cash Flows](index=86&type=section&id=CONSOLIDATED%20STATEMENT%20OF%20CASH%20FLOWS) For FY2025, the Group experienced a net cash outflow from operating activities of **HKD 12.43 million**, a net cash outflow from investing activities of **HKD 0.55 million**, and a net cash outflow from financing activities of **HKD 7.06 million**, resulting in a net decrease in cash and cash equivalents of **HKD 20.04 million**, with the period-end balance of cash and cash equivalents at **HKD 18.43 million** Consolidated Cash Flow Statement Summary (HKD thousands) | Item | FY2025 | FY2024 | | :--- | :--- | :--- | | Net cash used in operating activities | (12,425) | (19,745) | | Net cash used in investing activities | (553) | (3,530) | | Net cash (used in) generated from financing activities | (7,063) | 5,477 | | Net decrease in cash and cash equivalents | (20,041) | (17,798) | | Cash and cash equivalents at beginning of year | 38,228 | 61,497 | | **Cash and cash equivalents at end of year** | **18,429** | **38,228** | [Notes to the Consolidated Financial Statements](index=90&type=section&id=NOTES%20TO%20THE%20CONSOLIDATED%20FINANCIAL%20STATEMENTS) This section elaborates on the Group's significant accounting policies, key accounting estimates, and sources of uncertainty, providing detailed breakdowns and explanations for various items in the financial statements, with key content including segment information (Note 10), intangible assets (Note 20), financial instruments and risk management (Note 38), and related party transactions (Note 39) - Segment information (Note 10) indicates the Group's operations are divided into four segments: Publishing and IP Licensing, Digital Marketing, Retail and Wholesale, and Natural Language Processing; this year, Publishing and IP Licensing was the primary source of revenue and profit, while the Natural Language Processing segment incurred the largest segment loss[816](index=816&type=chunk)[820](index=820&type=chunk) - Intangible assets (Note 20) carrying value significantly increased from **HKD 5.53 million** to **HKD 29.76 million**, primarily due to the addition of **HKD 28.34 million** in patented technology; concurrently, an impairment loss of **HKD 0.55 million** was recognized on intellectual property[913](index=913&type=chunk)[921](index=921&type=chunk) - Financial Instruments and Risk Management (Note 38) details the Group's exposure to market risks (currency, interest rate, price), credit risk, and liquidity risk, along with their management policies; notably, credit risk concentration is high, with the top two customers accounting for **58%** of trade receivables[1052](index=1052&type=chunk)[1087](index=1087&type=chunk) [FINANCIAL SUMMARY](index=300&type=section&id=FINANCIAL%20SUMMARY) [Five-Year Financial Summary](index=300&type=section&id=Five-Year%20Financial%20Summary) Over the past five years, the Group's revenue has shown a continuous downward trend, decreasing from **HKD 207 million** in FY2021 to **HKD 17.33 million** in FY2025; although the annual loss narrowed in the last two years, the loss for FY2025 expanded compared to FY2024, and the Group's total assets and net assets have also decreased year by year, reflecting a contraction in business scale and ongoing operational challenges Five-Year Performance Summary (HKD thousands) | As of March 31 | 2021 | 2022 | 2023 | 2024 | 2025 | | :--- | :--- | :--- | :--- | :--- | :--- | | Revenue | 206,605 | 62,365 | 30,600 | 20,158 | 17,328 | | Loss before tax | (71,042) | (39,574) | (38,503) | (20,808) | (28,728) | | Loss attributable to owners of the Company | (57,191) | (28,943) | (37,223) | (20,782) | (27,963) | Five-Year Assets and Liabilities Summary (HKD thousands) | As of March 31 | 2021 | 2022 | 2023 | 2024 | 2025 | | :--- | :--- | :--- | :--- | :--- | :--- | | Total Assets (Current + Non-current) | 174,202 | 190,906 | 147,757 | 108,679 | 80,482 | | Total Liabilities (Current + Non-current) | (1,628) | (12) | (357) | - | (363) | | **Net Assets** | **172,574** | **190,894** | **147,400** | **108,679** | **80,119** |

[Company Information and Disclaimer](index=1&type=section&id=Company%20Information%20and%20Disclaimer) This section provides the company's registration details and clarifies the disclaimer from Hong Kong Exchanges and Clearing Limited regarding the announcement content - Hong Kong Exchanges and Clearing Limited and The Stock Exchange of Hong Kong Limited are not responsible for the content of this announcement, make no representation, and accept no liability for any loss[1](index=1&type=chunk) - The Company is incorporated in Bermuda as a limited liability company with stock code: **00343**[2](index=2&type=chunk) [Financial Performance Overview](index=1&type=section&id=Financial%20Performance%20Overview) This section presents a high-level summary of the company's key financial performance indicators for the fiscal years 2025 and 2024 Key Financial Performance Overview for FY2025 | Metric | 2025 (Thousand HKD) | 2024 (Thousand HKD) | Year-on-Year Change | | :--- | :--- | :--- | :--- | | Annual Loss | (28,400) | (20,929) | 35.7% increase | | Annual Loss Attributable to Owners of the Company | (27,963) | (20,782) | 34.6% increase | | Basic and Diluted Loss Per Share (HK cents) | (1.7) | (1.2) | 41.7% increase | | Revenue | 17,328 | 20,158 | (14.0%) decrease | | Gross Profit | 7,627 | 9,851 | (22.6%) decrease | | Gross Profit Margin | 44.0% | 48.9% | (4.9) percentage points | [Consolidated Financial Statements](index=1&type=section&id=Consolidated%20Financial%20Statements) This section presents the audited consolidated statement of profit or loss and other comprehensive income and the consolidated statement of financial position as of March 31, 2025 [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) For the year ended March 31, 2025, the Group reported revenue of 17,328 Thousand HKD, gross profit of 7,627 Thousand HKD, and an expanded annual loss of 28,400 Thousand HKD Summary of Consolidated Statement of Profit or Loss and Other Comprehensive Income | Metric | 2025 (Thousand HKD) | 2024 (Thousand HKD) | | :--- | :--- | :--- | | Revenue | 17,328 | 20,158 | | Cost of Sales | (9,701) | (10,307) | | Gross Profit | 7,627 | 9,851 | | Other Income | 565 | 4,638 | | Other Gains or Losses | (1,743) | 4,039 | | Loss Before Tax | (28,728) | (20,808) | | Annual Loss | (28,400) | (20,929) | | Annual Loss Attributable to Owners of the Company | (27,963) | (20,782) | [Consolidated Statement of Financial Position](index=3&type=section&id=Consolidated%20Statement%20of%20Financial%20Position) As of March 31, 2025, the Group's non-current assets significantly increased to 36,635 Thousand HKD, while current assets decreased to 61,226 Thousand HKD, leading to a reduction in total equity Summary of Consolidated Statement of Financial Position | Metric | 2025 (Thousand HKD) | 2024 (Thousand HKD) | | :--- | :--- | :--- | | Non-current Assets | 36,635 | 7,268 | | Current Assets | 61,226 | 119,014 | | Current Liabilities | 17,379 | 17,603 | | Net Current Assets | 43,847 | 101,411 | | Net Assets | 80,119 | 108,679 | | Equity Attributable to Owners of the Company | 85,484 | 113,787 | | Cash and Cash Equivalents | 18,429 | 38,228 | [Notes to the Consolidated Financial Statements](index=5&type=section&id=Notes%20to%20the%20Consolidated%20Financial%20Statements) This section provides detailed explanations on the basis of preparation, accounting policies, revenue, segment performance, asset and liability items, and post-reporting period events [1. Basis of Preparation](index=5&type=section&id=1.%20Basis%20of%20Preparation) The consolidated financial statements are prepared in accordance with HKFRSs, comply with listing rules, and are presented in HKD for convenience, despite RMB being the functional currency - The consolidated financial statements are prepared in accordance with Hong Kong Financial Reporting Standards issued by the HKICPA and comply with the disclosure requirements of the Listing Rules and the Hong Kong Companies Ordinance[7](index=7&type=chunk) - The statements are prepared on a historical cost basis, with certain financial instruments measured at fair value[7](index=7&type=chunk) - The Company's functional currency is RMB, but for the convenience of HKEX users, it is presented in HKD[7](index=7&type=chunk) [2. Application of New and Revised HKFRSs](index=5&type=section&id=2.%20Application%20of%20New%20and%20Revised%20HKFRSs) The Group adopted several new and revised HKFRSs effective April 1, 2024, which had no material impact on current or prior period financial performance or position - This year, several revised HKFRSs were first applied, including lease liabilities in a sale and leaseback transaction and classification of liabilities as current or non-current[8](index=8&type=chunk) - The application of new and revised standards had no material impact on the Group's financial position and performance for the current and prior years[8](index=8&type=chunk) [3. Revenue](index=6&type=section&id=3.%20Revenue) For the year ended March 31, 2025, total Group revenue decreased by **14.0%** to 17,328 Thousand HKD, primarily from publishing and IP licensing, with significant declines in digital marketing and retail/wholesale Revenue Source Analysis | Revenue Source | 2025 (Thousand HKD) | 2024 (Thousand HKD) | Year-on-Year Change | | :--- | :--- | :--- | :--- | | Sales of Comic Books | 12,971 | 12,419 | 4.4% increase | | Intellectual Property Licensing Revenue | 3,019 | 2,685 | 12.4% increase | | Sales of Alcoholic Beverages | 1,227 | 2,457 | (50.0%) decrease | | Social Media Marketing | 111 | 113 | (1.8%) decrease | | New Media Advertising Revenue | – | 2,484 | (100.0%) decrease | | **Total** | **17,328** | **20,158** | **(14.0%) decrease** | - The Hong Kong market contributed the vast majority of revenue (**17,217 Thousand HKD**), while revenue from the China market significantly decreased to **111 Thousand HKD**[11](index=11&type=chunk)[13](index=13&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 the latter incurring the largest loss in FY2025 - The Group's operating segments include publishing and intellectual property licensing, digital marketing, retail and wholesale, and natural language processing[15](index=15&type=chunk) Segment Revenue and Results | Segment | 2025 Revenue (Thousand HKD) | 2024 Revenue (Thousand HKD) | 2025 Segment Results (Thousand HKD) | 2024 Segment Results (Thousand HKD) | | :--- | :--- | :--- | :--- | :--- | | Publishing and Intellectual Property Licensing | 15,990 | 15,104 | 1,738 | 1,384 | | Digital Marketing | 111 | 2,597 | (916) | 2,236 | | Retail and Wholesale | 1,227 | 2,457 | (767) | (887) | | Natural Language Processing | – | – | (8,605) | (2,873) | | **Consolidated Total** | **17,328** | **20,158** | **(8,550)** | **(140)** | - In 2025, non-current assets were primarily concentrated in China (**25,288 Thousand HKD**), compared to Hong Kong (**6,080 Thousand HKD**) in 2024, reflecting a shift in investment focus[22](index=22&type=chunk) [5. Other Income](index=13&type=section&id=5.%20Other%20Income) For the year ended March 31, 2025, other income significantly decreased to 565 Thousand HKD, primarily due to the absence of impairment loss reversals on trade receivables and prepayments recognized in the prior year Details of Other Income | Other Income Item | 2025 (Thousand HKD) | 2024 (Thousand HKD) | | :--- | :--- | :--- | | Bank Interest Income | 120 | 177 | | Imputed Interest Income on Loans Receivable | 268 | 183 | | Reversal of Impairment Loss on Trade Receivables Previously Recognized | – | 1,491 | | Reversal of Impairment Loss on Prepayments Previously Recognized | – | 2,453 | | **Total** | **565** | **4,638** | - Other income in 2024 included reversals of impairment losses received due to civil claims against digital marketing business customers and suppliers for misconduct[25](index=25&type=chunk) [6. Other Gains or Losses](index=13&type=section&id=6.%20Other%20Gains%20or%20Losses) For the year ended March 31, 2025, the Group recorded other losses of 1,743 Thousand HKD, a significant shift from the prior year's gains, primarily due to the absence of subsidiary disposal gains and new legal claim provisions Details of Other Gains or Losses | Item | 2025 (Thousand HKD) | 2024 (Thousand HKD) | | :--- | :--- | :--- | | Gains (Losses) from Fair Value Changes of Financial Assets at FVTPL | 447 | (5,936) | | Gain on Derecognition of a Subsidiary | – | 10,942 | | Gain on Disposal of a Subsidiary | – | 823 | | Net Exchange Loss | (580) | (2,499) | | Provision for Legal Claims | (1,579) | – | | **Total** | **(1,743)** | **4,039** | [7. Finance Costs](index=13&type=section&id=7.%20Finance%20Costs) For the year ended March 31, 2025, finance costs increased to 133 Thousand HKD from 69 Thousand HKD in the prior year Finance Costs | Item | 2025 (Thousand HKD) | 2024 (Thousand HKD) | | :--- | :--- | :--- | | Finance Costs | 133 | 69 | [8. Other Impairment Losses](index=14&type=section&id=8.%20Other%20Impairment%20Losses) For the year ended March 31, 2025, other impairment losses significantly increased to 2,241 Thousand HKD, primarily due to higher impairment losses on right-of-use assets and intangible assets Details of Other Impairment Losses | Item | 2025 (Thousand HKD) | 2024 (Thousand HKD) | | :--- | :--- | :--- | | Impairment Loss on Intangible Assets | 552 | – | | Impairment Loss on Right-of-Use Assets | 1,689 | 254 | | Impairment Loss on Prepayments | – | 560 | | Impairment Loss on Associates | –* | 157 | | **Total** | **2,241** | **971** | [9. Loss Before Tax](index=14&type=section&id=9.%20Loss%20Before%20Tax) For the year ended March 31, 2025, loss before tax expanded to 28,728 Thousand HKD, driven by increased staff costs, intangible asset amortization, and legal and consulting fees Loss Before Tax and Key Expenses | Item | 2025 (Thousand HKD) | 2024 (Thousand HKD) | | :--- | :--- | :--- | | Loss Before Tax | (28,728) | (20,808) | | Staff Costs | 16,436 | 19,777 | | Auditor's Remuneration | 1,230 | 1,600 | | Amortisation of Intangible Assets | 3,322 | 488 | | Legal, Consultancy and Other Professional Fees | 3,919 | 5,437 | [10. Income Tax Credit (Expense)](index=15&type=section&id=10.%20Income%20Tax%20Credit%20(Expense)) For the year ended March 31, 2025, the Group recorded an income tax credit of 328 Thousand HKD, primarily due to increased deferred tax credits, with Hong Kong profits tax at 16.5% and China subsidiaries at 25% Details of Income Tax Credit (Expense) | Item | 2025 (Thousand HKD) | 2024 (Thousand HKD) | | :--- | :--- | :--- | | Current Tax - Hong Kong Profits Tax | 88 | 154 | | Deferred Tax - Deferred Tax Credit | (416) | (9) | | **Income Tax Credit (Expense)** | **(328)** | **121** | - Hong Kong profits tax is calculated at **16.5%** (or a two-tiered rate of **8.25%/16.5%**), while Chinese subsidiaries are taxed at **25%**[30](index=30&type=chunk) [11. Dividends](index=15&type=section&id=11.%20Dividends) No dividends were paid or proposed by the Company for the year ended March 31, 2025, or since the end of the reporting period - No dividends were paid or proposed for the years ended March 31, 2025, and 2024[32](index=32&type=chunk) [12. Loss Per Share](index=16&type=section&id=12.%20Loss%20Per%20Share) For the year ended March 31, 2025, basic and diluted loss per share attributable to owners of the Company expanded to **1.7 HK cents**, with the weighted average number of shares remaining unchanged Loss Per Share Calculation | Metric | 2025 | 2024 | | :--- | :--- | :--- | | Weighted Average Number of Shares for Basic and Diluted Loss Per Share Calculation (Thousand shares) | 1,668,657 | 1,668,657 | | Annual Loss Attributable to Owners of the Company for Basic and Diluted Loss Per Share Calculation (Thousand HKD) | (27,963) | (20,782) | | Basic and Diluted Loss Per Share (HK cents) | (1.7) | (1.2) | - The exercise of share options was not assumed in calculating diluted loss per share as it would result in a reduction in loss per share[33](index=33&type=chunk) [13. Goodwill and Impairment Assessment](index=16&type=section&id=13.%20Goodwill%20and%20Impairment%20Assessment) As of March 31, 2025 and 2024, the Group's goodwill carrying amount was zero, as goodwill from Yi Qimen and Hui Chuan Network was fully impaired or derecognized Goodwill Carrying Amount | Metric | 2025 (Thousand HKD) | 2024 (Thousand HKD) | | :--- | :--- | :--- | | Goodwill Carrying Amount | – | – | - Goodwill of Yi Qimen was fully impaired as of March 31, 2021, and derecognized upon its deregistration on March 31, 2024[36](index=36&type=chunk)[37](index=37&type=chunk) - Goodwill of Hui Chuan Network was fully impaired as of March 31, 2022, and derecognized upon its disposal on March 31, 2024[38](index=38&type=chunk)[39](index=39&type=chunk) [14. Intangible Assets](index=18&type=section&id=14.%20Intangible%20Assets) As of March 31, 2025, intangible assets significantly increased to 29,761 Thousand HKD, driven by new patent technology additions, with an impairment loss of 552 Thousand HKD recognized for intellectual property Intangible Assets Carrying Amount | Intangible Asset Category | 2025 Carrying Amount (Thousand HKD) | 2024 Carrying Amount (Thousand HKD) | | :--- | :--- | :--- | | Club Memberships | 1,385 | 1,385 | | Intellectual Property | 3,100 | 4,140 | | Patent Technology | 25,276 | – | | **Total** | **29,761** | **5,525** | - New patent technology additions amounted to **28,341 Thousand HKD** in 2025[40](index=40&type=chunk) - An impairment loss of **552 Thousand HKD** was recognized for intellectual property due to challenging market conditions and failure to meet budgeted financial performance[41](index=41&type=chunk) [15. Trade Receivables](index=20&type=section&id=15.%20Trade%20Receivables) As of March 31, 2025, net trade receivables were 3,666 Thousand HKD, slightly higher than the prior year, with reduced credit loss provisions and a decrease in receivables overdue by more than 90 days Details of Trade Receivables | Metric | 2025 (Thousand HKD) | 2024 (Thousand HKD) | | :--- | :--- | :--- | | Gross Trade Receivables | 3,889 | 4,408 | | Less: Provision for Credit Losses | (223) | (943) | | **Net Trade Receivables** | **3,666** | **3,465** | Ageing Analysis of Trade Receivables | Ageing | 2025 (Thousand HKD) | 2024 (Thousand HKD) | | :--- | :--- | :--- | | 0 – 60 days | 1,706 | 1,439 | | 61 – 90 days | 701 | 442 | | 91 – 180 days | 1,108 | 1,264 | | Over 180 days | 151 | 320 | [16. Other Receivables, Deposits and Prepayments](index=21&type=section&id=16.%20Other%20Receivables,%20Deposits%20and%20Prepayments) As of March 31, 2025, total other receivables, deposits, and prepayments significantly decreased to 6,718 Thousand HKD, mainly due to a substantial reduction in intangible asset deposits for the natural language processing business Details of Other Receivables, Deposits and Prepayments | Item | 2025 (Thousand HKD) | 2024 (Thousand HKD) | | :--- | :--- | :--- | | Net Other Receivables | 50 | 80 | | Net Deposits and Prepayments | 6,668 | 35,733 | | **Total** | **6,718** | **35,813** | - Intangible asset deposits decreased from **33,269 Thousand HKD** (2024) to **4,859 Thousand HKD** (2025)[46](index=46&type=chunk) [17. Loans Receivable](index=22&type=section&id=17.%20Loans%20Receivable) As of March 31, 2025, net loans receivable decreased to 5,029 Thousand HKD, with the Group extending loan maturities for all borrowers and reclassifying some loans as non-current Details of Loans Receivable | Metric | 2025 (Thousand HKD) | 2024 (Thousand HKD) | | :--- | :--- | :--- | | Gross Loans Receivable from Independent Third Parties | 6,736 | 8,068 | | Less: Provision for Credit Losses | (1,707) | (112) | | **Net Loans Receivable** | **5,029** | **7,956** | - Loan maturity dates have been extended, with some reclassified as non-current items (**4,344 Thousand HKD**)[47](index=47&type=chunk) - As of March 31, 2025, loans receivable with a carrying amount of **5,029 Thousand HKD** were considered overdue[47](index=47&type=chunk) [18. Trade Payables, Other Payables and Accruals](index=23&type=section&id=18.%20Trade%20Payables,%20Other%20Payables%20and%20Accruals) As of March 31, 2025, net trade payables were 899 Thousand HKD, slightly lower than the prior year, while other payables and accruals remained stable at 8,891 Thousand HKD Details of Trade Payables, Other Payables and Accruals | Item | 2025 (Thousand HKD) | 2024 (Thousand HKD) | | :--- | :--- | :--- | | Trade Payables | 899 | 946 | | Other Payables and Accruals | 8,891 | 8,331 | - Other payables and accruals primarily include deposits received, accrued operating expenses, accrued salaries, and accrued employee termination costs[51](index=51&type=chunk) [19. Disposal/Derecognition of Subsidiaries](index=24&type=section&id=19.%20Disposal/Derecognition%20of%20Subsidiaries) In FY2024, the Group disposed of Hui Chuan Network and derecognized Yi Qimen, recognizing gains of 823 Thousand HKD and 10,942 Thousand HKD, respectively, leading to goodwill derecognition - On April 13, 2023, the Group disposed of its entire equity interest in Hui Chuan Network for **57 Thousand HKD**, recognizing a gain of **823 Thousand HKD**[52](index=52&type=chunk)[53](index=53&type=chunk) - On March 20, 2024, the Group derecognized Yi Qimen (55% owned), recognizing a gain on derecognition of **10,942 Thousand HKD**[54](index=54&type=chunk) [20. Provisions](index=25&type=section&id=20.%20Provisions) As of March 31, 2025, the Group made a provision of 1,565 Thousand HKD for legal claims related to a supplier dispute, resulting in the freezing of a Chinese subsidiary's bank account Details of Provisions | Item | 2025 (Thousand HKD) | 2024 (Thousand HKD) | | :--- | :--- | :--- | | Provision for Legal Claims | 1,565 | – | - The provision was made for legal proceedings in China with a supplier, resulting in the freezing of a bank account of approximately **RMB1,052,000**[55](index=55&type=chunk) [21. Comparative Figures](index=25&type=section&id=21.%20Comparative%20Figures) Certain comparative figures have been reclassified to conform with the current year's presentation, providing a more appropriate view of the Group's affairs - Certain comparative figures have been reclassified to conform with the current year's presentation, providing a more appropriate view of the Group's affairs[56](index=56&type=chunk) [22. Events After the Reporting Period](index=25&type=section&id=22.%20Events%20After%20the%20Reporting%20Period) Post-reporting period, the Company entered a warrant placing agreement to raise working capital and secured a 2 million HKD unsecured fixed loan at 24% annual interest - On April 16, 2025, the Company entered into a warrant placing agreement with a placing agent to place up to **200 million** warrants at an initial subscription price of **0.3 HKD** per share[57](index=57&type=chunk) - On May 16, 2025, the Company obtained a **2 million HKD** unsecured fixed loan from a third party at an annual interest rate of **24%**, repayable by June 16, 2025, for partial working capital[57](index=57&type=chunk) [Management Discussion and Analysis](index=26&type=section&id=Management%20Discussion%20and%20Analysis) This section reviews the Group's FY2025 financial performance, liquidity, human resources, significant transactions, and operations, outlining future strategies focused on resource conservation and cost control [Dividends](index=26&type=section&id=Dividends) No dividends were paid or proposed by the Company for the years ended 2025 and 2024 - No dividends were paid or proposed for the years ended 2025 and 2024[58](index=58&type=chunk) [Financial Results](index=26&type=section&id=Financial%20Results) For the year ended March 31, 2025, the Group's consolidated net loss increased by **34.6%** to 27,963 Thousand HKD, driven by a **14.0%** revenue decline, reduced gross margin, and increased impairment losses [1. Revenue](index=26&type=section&id=1.%20Revenue) For the year ended March 31, 2025, overall Group revenue decreased by **14.0%** to 17,328 Thousand HKD, with publishing and IP licensing showing slight growth, while digital marketing and retail/wholesale significantly declined Revenue Changes by Business Segment | Business Segment | 2025 Revenue (Thousand HKD) | 2024 Revenue (Thousand HKD) | Year-on-Year Change | | :--- | :--- | :--- | :--- | | Publishing and Intellectual Property Licensing | 15,990 | 15,104 | 5.9% increase | | Digital Marketing | 111 | 2,597 | (95.7%) decrease | | Retail and Wholesale | 1,227 | 2,457 | (50.0%) decrease | | **Total Revenue** | **17,328** | **20,158** | **(14.0%) decrease** | - The significant decrease in digital marketing revenue was due to reduced operating scale, as the Group prioritized cash and working capital preservation[60](index=60&type=chunk) [2. Gross Profit and Gross Profit Margin](index=27&type=section&id=2.%20Gross%20Profit%20and%20Gross%20Profit%20Margin) For the year ended March 31, 2025, gross profit decreased to 7,627 Thousand HKD, and gross profit margin fell to **44.0%**, primarily due to the recognition of production costs in the digital marketing segment Changes in Gross Profit and Gross Profit Margin | Metric | 2025 (Thousand HKD) | 2024 (Thousand HKD) | | :--- | :--- | :--- | | Gross Profit | 7,627 | 9,851 | | Gross Profit Margin | 44.0% | 48.9% | - The decrease in gross profit margin was due to the recognition of production costs in the digital marketing business segment during the year[62](index=62&type=chunk) [3. Selling Expenses](index=27&type=section&id=3.%20Selling%20Expenses) For the year ended March 31, 2025, selling expenses significantly decreased to zero from 1,949 Thousand HKD, primarily due to reduced revenue and operating scale in the digital marketing segment Changes in Selling Expenses | Metric | 2025 (Thousand HKD) | 2024 (Thousand HKD) | | :--- | :--- | :--- | | Selling Expenses | – | 1,949 | - The decrease in selling expenses was mainly due to reduced revenue and operating scale from the consolidation of the digital marketing business segment since 2024[63](index=63&type=chunk) [4. Administrative Expenses](index=27&type=section&id=4.%20Administrative%20Expenses) For the year ended March 31, 2025, total administrative expenses decreased to 26,391 Thousand HKD, primarily due to reduced digital marketing activities and ongoing cost control measures Administrative Expenses and Key Components | Metric | 2025 (Thousand HKD) | 2024 (Thousand HKD) | | :--- | :--- | :--- | | Administrative Expenses | 26,391 | 28,909 | | Staff Costs | 11,915 | 14,498 | | Depreciation of Right-of-Use Assets | 1,924 | 342 | | Directors' Remuneration | 3,282 | 4,204 | - The decrease in administrative expenses was mainly due to reduced business activities in the digital marketing segment and streamlined operations through continuous cost control[64](index=64&type=chunk) [5. Other Impairment Losses](index=28&type=section&id=5.%20Other%20Impairment%20Losses) For the year ended March 31, 2025, other impairment losses increased to 2,241 Thousand HKD, primarily comprising impairment losses on right-of-use assets and intangible assets Details of Other Impairment Losses | Item | 2025 (Thousand HKD) | 2024 (Thousand HKD) | | :--- | :--- | :--- | | Impairment Loss on Right-of-Use Assets | 1,689 | 254 | | Impairment Loss on Intangible Assets | 552 | – | | Impairment Loss on Prepayments | – | 560 | | Impairment Loss on Associates | – | 157 | [6. Other Expenses](index=28&type=section&id=6.%20Other%20Expenses) For the year ended March 31, 2025, other operating expenses decreased, primarily due to lower R&D costs and legal/consulting fees, reflecting ongoing cost control measures Details of Other Expenses | Item | 2025 (Thousand HKD) | 2024 (Thousand HKD) | | :--- | :--- | :--- | | Research and Development Costs | 1,481 | 2,423 | | Legal, Consultancy and Other Professional Fees | 3,919 | 5,437 | - The decrease in other operating expenses was mainly due to streamlined operations through continuous cost control measures[67](index=67&type=chunk) [7. Annual Loss](index=28&type=section&id=7.%20Annual%20Loss) For the year ended March 31, 2025, the Group's operating loss expanded to 28,400 Thousand HKD, with net assets and net assets per share both decreasing Annual Loss and Net Assets | Metric | 2025 (Thousand HKD) | 2024 (Thousand HKD) | | :--- | :--- | :--- | | Annual Loss | 28,400 | 20,929 | | Net Assets | 80,119 | 108,679 | | Net Assets Per Share (HKD) | 0.05 | 0.07 | [Liquidity and Financial Resources](index=29&type=section&id=Liquidity%20and%20Financial%20Resources) As of March 31, 2025, the Group's cash and bank balances were 18,429 Thousand HKD, with net current assets significantly decreasing to 43,847 Thousand HKD and a liquidity ratio of **3.5** Overview of Liquidity and Financial Resources | Metric | 2025 (Thousand HKD) | 2024 (Thousand HKD) | | :--- | :--- | :--- | | Cash and Bank Balances | 18,429 | 38,228 | | Net Current Assets | 43,847 | 101,411 | | Current Ratio | 3.5 | 6.8 | | Total Liabilities | 17,742 | 17,603 | | Gearing Ratio (Equity Attributable to Owners of the Company) | 20.8% | 15.5% | - The Group faces foreign exchange risk related to RMB but no significant foreign exchange rate fluctuation risk[69](index=69&type=chunk) - Post-reporting period, an unsecured fixed loan of **2 million HKD** was obtained at an annual interest rate of **24%** for partial working capital[69](index=69&type=chunk) [Deposits Paid for Intangible Assets](index=29&type=section&id=Deposits%20Paid%20for%20Intangible%20Assets) As of March 31, 2025, the Group paid approximately 4,859 Thousand HKD in intangible asset deposits for NLP technology development and production of software and chipsets, primarily for Chinese speech recognition Intangible Asset Deposits | Item | 2025 (Thousand HKD) | 2024 (Thousand HKD) | | :--- | :--- | :--- | | Intangible Asset Deposits (Natural Language Processing Business) | 4,859 | 33,269 | - The deposits are for the development and production of software and chipsets with natural language processing technology, primarily for Chinese speech recognition chips[71](index=71&type=chunk) [Employment and Remuneration Policies](index=29&type=section&id=Employment%20and%20Remuneration%20Policies) As of March 31, 2025, the Group had 45 employees with total staff costs of 17,769 Thousand HKD, and management regularly reviews remuneration and offers discretionary bonuses and share options Employment and Remuneration Overview | Metric | 2025 | 2024 | | :--- | :--- | :--- | | Total Number of Employees | 45 | 47 | | Total Staff Costs (Thousand HKD) | 17,769 | 21,061 | - Management regularly reviews remuneration packages to ensure competitiveness and offers discretionary bonuses and share options[72](index=72&type=chunk) [Acquisition of Entire Equity Interest in a Company (Involving Issue of Consideration Shares Under General Mandate)](index=30&type=section&id=Acquisition%20of%20Entire%20Equity%20Interest%20in%20a%20Company%20(Involving%20Issue%20of%20Consideration%20Shares%20Under%20General%20Mandate)) The Group's proposed acquisition of Brain-like Technology for 63,000 Thousand HKD, to be settled by issuing new shares, was terminated as of November 29, 2024 - The Group had planned to acquire the entire equity interest in Brain-like Technology for **63,000 Thousand HKD**, to be settled by issuing **191,000,000** new shares[73](index=73&type=chunk) - As of November 29, 2024, the proposed transaction was terminated[74](index=74&type=chunk) [Proposed Placing of Unlisted Warrants Under General Mandate](index=30&type=section&id=Proposed%20Placing%20of%20Unlisted%20Warrants%20Under%20General%20Mandate) The Company proposes to place up to **200 million** unlisted warrants to raise approximately 6,200 Thousand HKD (net 5,450 Thousand HKD) for general working capital, with potential additional funds for IP activation and general working capital upon full exercise - The Company proposes to place up to **200 million** warrants at **0.031 HKD** each, raising approximately **6,200 Thousand HKD** in gross proceeds and **5,450 Thousand HKD** in net proceeds[75](index=75&type=chunk)[76](index=76&type=chunk) - The net proceeds will be used as general working capital for the Group[76](index=76&type=chunk) - Upon full exercise of the warrants, an additional **60,000 Thousand HKD** is expected to be raised, with approximately **67%** for IP activation and promotion, and **33%** for general working capital[77](index=77&type=chunk) [Voluntary Liquidation of Two Non-wholly Owned Subsidiaries](index=31&type=section&id=Voluntary%20Liquidation%20of%20Two%20Non-wholly%20Owned%20Subsidiaries) The Group initiated voluntary liquidation for Beijing Yi Qimen Technology Co., Ltd. and Beijing Xinghe Engine Information Technology Co., Ltd. to mitigate losses and reallocate resources, with Yi Qimen's liquidation completed in March 2024 - The Group is undergoing voluntary liquidation for Yi Qimen and Beijing Xinghe Engine to reduce losses and reallocate resources[80](index=80&type=chunk) - The voluntary liquidation of Yi Qimen was completed in March 2024, while the liquidation of Beijing Xinghe Engine is still ongoing[80](index=80&type=chunk) [Derecognition of a Wholly-owned Subsidiary](index=31&type=section&id=Derecognition%20of%20a%20Wholly-owned%20Subsidiary) This year, the Group derecognized Guangzhou Honghao Technology Co., Ltd., a wholly-owned subsidiary engaged in digital marketing, with completion on July 4, 2024 - The Group derecognized Guangzhou Honghao Technology Co., Ltd., a wholly-owned subsidiary engaged in digital marketing, with completion on July 4, 2024[81](index=81&type=chunk) [Capital Commitments and Contingent Liabilities](index=32&type=section&id=Capital%20Commitments%20and%20Contingent%20Liabilities) As of March 31, 2025, the Group had no significant capital commitments or contingent liabilities - As of March 31, 2025, the Group had no significant capital commitments or contingent liabilities[82](index=82&type=chunk) [Business Review](index=32&type=section&id=Business%20Review) Amidst a challenging economic environment, the Group's total revenue decreased by **14.0%**, with ongoing efforts in resource conservation, business restructuring, and cost control across its diverse segments [Publishing and Intellectual Property Licensing Business](index=32&type=section&id=Publishing%20and%20Intellectual%20Property%20Licensing%20Business) This business segment showed stable performance with 2025 revenue of 15,990 Thousand HKD, and the Company plans to expand its comic publishing and distribution Publishing and Intellectual Property Licensing Business Revenue | Metric | 2025 (Thousand HKD) | 2024 (Thousand HKD) | | :--- | :--- | :--- | | Revenue | 15,990 | 15,104 | - The Company is focusing more on sales of published books with owned or licensed copyrights and plans to expand its comic publishing and distribution business in the last quarter of the fiscal year[84](index=84&type=chunk) [Digital Marketing](index=32&type=section&id=Digital%20Marketing) Following voluntary liquidation and restructuring, digital marketing business significantly contracted, with revenue decreasing by **95.7%** to 111 Thousand HKD and employee count reduced Digital Marketing Business Revenue | Metric | 2025 (Thousand HKD) | 2024 (Thousand HKD) | | :--- | :--- | :--- | | Revenue | 111 | 2,597 | - The business significantly scaled down, with the total number of employees reduced from **3** to **1**[85](index=85&type=chunk) - The voluntary liquidation process for Beijing Xinghe Engine is still ongoing[85](index=85&type=chunk) [Retail and Wholesale Business](index=32&type=section&id=Retail%20and%20Wholesale%20Business) The Group's premium alcoholic beverage retail and wholesale business maintains stable sales but faces revenue instability due to market demand, focusing on inventory turnover and positive cash flow - Premium alcoholic beverages are primarily for high-end consumers or restaurants, with wholesale sales being the main focus[86](index=86&type=chunk) - Sales are stable but revenue is unstable due to market demand[86](index=86&type=chunk) - The Group is focused on selling large quantities of alcoholic beverages to generate positive cash flow and turn over inventory[86](index=86&type=chunk) [Natural Language Processing Business](index=33&type=section&id=Natural%20Language%20Processing%20Business) The Group continues to invest in NLP technology development, focusing on Chinese speech recognition with several patents, incurring 2,581 Thousand HKD in net operating expenses for FY2025, and plans a cautious market entry via partnerships - The Group invests in developing and producing software and chipsets with natural language processing technology, focusing on Chinese speech recognition, and has obtained several invention patents[87](index=87&type=chunk) Natural Language Processing Business Overview | Metric | 2025 (Thousand HKD) | | :--- | :--- | | Net Operating Expenses (excluding amortization, impairment, legal provisions) | 2,581 | | Number of Employees | 14 | - The Group adopts a cautious strategy to enter the market through cooperation or licensing, which may not generate significant revenue in the short term[87](index=87&type=chunk) [Outlook](index=33&type=section&id=Outlook) The Group aims for sustainable growth in existing businesses and seeks to commercialize its NLP business through technology licensing, while also planning to expand IP and comic ventures with AI-generated content - Committed to maintaining the sustainable development of existing businesses and hopes the natural language processing business will enter the market and generate profits as soon as possible[88](index=88&type=chunk) - The natural language processing business will operate through technology licensing partnerships, applied in smart homes, intelligent cockpits, and smartphones[88](index=88&type=chunk) - Plans to revitalize and expand the scope of intellectual property and comic businesses, launching a series of products under its own IP brands, and AI-created film and television works[88](index=88&type=chunk) [Corporate Governance and Other Information](index=34&type=section&id=Corporate%20Governance%20and%20Other%20Information) This section details the Group's corporate governance practices, including share transfer arrangements, listed securities transactions, audit committee operations, code compliance, and adjustments to board composition [Closure of Register of Members](index=34&type=section&id=Closure%20of%20Register%20of%20Members) To determine eligibility for the 2025 AGM, the register of members will be closed from August 21 to August 26, 2025, with all transfer documents due by 4:30 p.m. on August 20, 2025 - The register of members will be closed from **August 21 to August 26, 2025**[89](index=89&type=chunk) - All transfer documents must be lodged by **4:30 p.m. on August 20, 2025**[89](index=89&type=chunk) [Purchase, Sale or Redemption of Listed Securities](index=34&type=section&id=Purchase,%20Sale%20or%20Redemption%20of%20Listed%20Securities) For the year ended March 31, 2025, neither the Company nor its subsidiaries purchased, sold, or redeemed any of the Company's listed securities - For the year ended March 31, 2025, neither the Company nor its subsidiaries purchased, sold, or redeemed any of the Company's listed securities[90](index=90&type=chunk) [Audit Committee](index=34&type=section&id=Audit%20Committee) The Company's Audit Committee, comprising three independent non-executive directors, reviewed the Group's accounting principles, internal controls, risk management, and financial reporting, including the audited financial statements for the year ended March 31, 2025 - The Audit Committee comprises **three** independent non-executive directors[91](index=91&type=chunk) - The Committee has reviewed the Group's accounting principles, internal controls, risk management, and financial reporting matters, including the audited financial statements[91](index=91&type=chunk) [Compliance with Corporate Governance Code](index=34&type=section&id=Compliance%20with%20Corporate%20Governance%20Code) The Company complied with all Code on Corporate Governance provisions during the reporting period, with the exception of directors' rotation, which is addressed by its articles of association - The Company has complied with all code provisions of the Corporate Governance Code during the reporting period[92](index=92&type=chunk) - There was a deviation from Code Provision B.2.2 (rotation of directors), but the Company's articles of association require all directors to retire by rotation at the AGM, which is considered sufficient[92](index=92&type=chunk) [Minimum Number of Independent Non-executive Directors](index=35&type=section&id=Minimum%20Number%20of%20Independent%20Non-executive%20Directors) Following Mr. Fan Chun Wah's resignation, the Company temporarily had fewer than the minimum required independent non-executive directors, but compliance was restored with Mr. Fung Ting Ho's appointment on July 31, 2024 - After Mr. Fan Chun Wah's resignation, the number of independent non-executive directors was temporarily below the minimum required by Listing Rule 3.10(1)[93](index=93&type=chunk) - Following Mr. Fung Ting Ho's appointment, the Company now meets the requirement of at least **three** independent non-executive directors[93](index=93&type=chunk) [Minimum Number of Members of Corporate Governance Committee](index=35&type=section&id=Minimum%20Number%20of%20Members%20of%20Corporate%20Governance%20Committee) The Corporate Governance Committee currently has three members, which is below the four members stipulated in its terms of reference, and the Board is seeking to fill the vacancy - The Corporate Governance Committee currently consists of **three** members, which is fewer than the **four** members stipulated in its written terms of reference[94](index=94&type=chunk) - The Board is in the process of identifying suitable candidates to fill the vacancy to meet the requirement[94](index=94&type=chunk) [Chairman of Nomination Committee](index=35&type=section&id=Chairman%20of%20Nomination%20Committee) Following Mr. Kwan Kin Chung's resignation, independent non-executive director Mr. Fung Ting Ho was appointed as the new Chairman of the Nomination Committee, ensuring compliance with Listing Rule 3.27A - Following Mr. Kwan Kin Chung's resignation as Chairman of the Nomination Committee, independent non-executive director Mr. Fung Ting Ho was appointed as the new Chairman[95](index=95&type=chunk) - The Company has complied with Listing Rule 3.27A regarding the Chairman of the Nomination Committee[95](index=95&type=chunk) [Compliance with the Model Code for Securities Transactions by Directors of Listed Issuers](index=35&type=section&id=Compliance%20with%20the%20Model%20Code%20for%20Securities%20Transactions%20by%20Directors%20of%20Listed%20Issuers) The Company adopted the Model Code for Securities Transactions by Directors of Listed Issuers, and all directors confirmed compliance during the reporting period - The Company has adopted the Model Code as set out in Appendix C3 of the Listing Rules as its code for directors' dealings in the Company's securities[96](index=96&type=chunk) - Following enquiry, all directors confirmed compliance with the Model Code during the reporting period[96](index=96&type=chunk) [Other Information](index=36&type=section&id=Other%20Information) This announcement is published on the HKEX and Company websites, with the annual report to follow, and the Board comprises one executive, two non-executive, and three independent non-executive directors as of the announcement date - The results announcement is published on the HKEX and the Company's website, and the annual report will be dispatched to shareholders and published on the website in due course[97](index=97&type=chunk) - As of the date of this announcement, the Board comprises Mr. Kwan Kin Chung (Executive Director), Mr. Wong Kon Man (Chairman and Non-executive Director), Dr. Liu Ka Ying (Vice Chairman and Non-executive Director), Mr. Wong Kwun Kit, Mr. Mong Yat Lik, and Mr. Fung Ting Ho (Independent Non-executive Directors)[99](index=99&type=chunk)

Revenue Performance - Total revenue decreased by 16.7% from HK$9,355,000 in 2023 to HK$7,792,000 in 2024[7] - Revenue from the publishing and IP licensing business was HK$7,680,000 in 2024, slightly up from HK$7,574,000 in 2023[8] - Revenue from the digital marketing segment plummeted by 93.7%, from HK$1,781,000 in 2023 to HK$112,000 in 2024[11] - Revenue for the six months ended September 30, 2024, was HK$7,792,000, a decrease of 16.7% compared to HK$9,355,000 in the same period of 2023[47] - Revenue from Publishing and IPs licensing was HK$7,680,000, while Digital marketing generated HK$112,000, indicating a significant reliance on the publishing segment[102] Financial Results - Gross profit for the period was HK$3,527,000, down 39.2% from HK$5,806,000 year-over-year[47] - Loss for the period was HK$11,620,000, an improvement from a loss of HK$19,310,000 in the previous year, representing a 39.5% reduction in losses[51] - Other income decreased significantly to HK$277,000 from HK$1,073,000, reflecting a decline of 74.1%[47] - Total comprehensive expense for the period was HK$10,409,000, compared to HK$25,064,000 in the same period last year, indicating a 58.5% reduction[51] - The company reported a basic and diluted loss per share of HK$0.7, compared to HK$0.8 in the previous year[51] Operational Changes - The total number of employees in the digital marketing segment reduced from 4 to 1[11] - The Group is planning to expand its business in the last quarter of the fiscal year, including publishing and distribution of certain comic titles[8] - The restructuring efforts are aimed at conserving resources and controlling costs amid a challenging operating environment[7] - The Group's net operating expenses for the six months ended 30 September 2024 amounted to approximately HK$1,151,000, primarily due to personnel and business promotion costs[24] - As of 30 September 2024, the total headcount of the Group is 50, a decrease from 55 on 30 September 2023[28] AI and Technology Development - The Group has invested in the development of software and chipset with natural language processing technology, focusing on Chinese language voice recognition[19] - A strategic alliance was formed with iFlytek and Imitation Brain Technology to develop AI speech technology for real-time human interaction[20] - The Group is focusing on the development and improvement of AI speech technology, particularly for real-time human-computer interaction[24] - The strategic partnership with iFlytek and IBT aims to develop AI speech recognition technology, with products like the Feilong Master mobile phone and IoT applications expected to be launched gradually[29] - The Group's focus on AI speech recognition chips is expected to position them as core components in IoT interactions, applicable in various devices[23] Cash Flow and Assets - Cash and cash equivalents decreased to HK$24,741,000 from HK$38,228,000, reflecting a decline of 35.3%[53] - Net current assets as of September 30, 2024, were HK$91,772,000, down from HK$101,411,000 as of March 31, 2024[53] - The company reported a net cash outflow from investment activities of HK$518,000, a significant decrease from a net inflow of HK$98,000 in the previous year[72] - The total cash and cash equivalents at the end of the period were HK$24,741,000, down from HK$50,309,000 at the end of the same period last year, representing a decrease of 50.9%[72] - The company made an advance of HK$600,000 to an associate, which was not present in the previous year's financials, indicating new financial engagements[72] Shareholder and Equity Information - The company’s total equity as of September 30, 2024, was HK$98,270,000, down from HK$108,679,000 as of March 31, 2024[57] - The authorized share capital remains at 200,000,000 shares, with issued and fully paid shares at 1,668,657,000 as of both September 30, 2024, and March 31, 2024[190] - No dividend was paid, declared, or proposed during both interim periods, as determined by the directors of the Company[141] - The company adopted a new share option scheme (2023 Scheme) effective for 10 years from August 29, 2023, replacing the expired 2013 Scheme[194] Impairment and Losses - The total impairment loss on right-of-use assets was HK$2,412,000, indicating a significant financial impact for the company[129] - The impairment loss recognized in respect of right-of-use assets was HK$2,412,000 for the six months ended September 30, 2024[119] - The company reported a loss before tax for the period, with significant costs attributed to impairment losses and staff expenses[128] - The loss for the period was HK$19,310,000, compared to a loss of HK$13,931,000 in the previous period[60] Market and Product Development - The Group continues to enhance its comic business by activating its intellectual properties and expanding its scope, in line with the ongoing cultural sentiment in Hong Kong[30] - The company has plans for market expansion and new product development, although specific details were not disclosed in the report[60] - The Group's digital marketing services focus on the PRC market, indicating potential for future growth in that region[99] - The Group's efforts in AI technology development are expected to support future profitability and market competitiveness[28]

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