Financial Performance - Total revenue for the six months ended September 30, 2024, was HKD 76,929,000, with contributions from smartphone sales at HKD 59,691,000, building intelligence at HKD 861,000, control systems at HKD 15,560,000, and data centers at HKD 12,000[21]. - Total revenue for the six months ended September 30, 2024, was HKD 76,124 thousand, a significant increase from HKD 17,126 thousand in the same period of 2023, representing a growth of approximately 344%[29]. - The company reported a comprehensive loss before tax of HKD (14,948,000) for the period[21]. - The group reported an adjusted EBIT loss of HKD (409) thousand for the six months ended September 30, 2024, compared to a loss of HKD (9,807) thousand in the previous period, showing an improvement in operational efficiency[23]. - The group recorded a net loss before tax of HKD (9,807) thousand for the six months ended September 30, 2024, compared to a loss of HKD (9,807) thousand in the same period of 2023, indicating consistent performance despite challenges[23]. - The net loss attributable to the owners of the company was HKD 13,319,000, compared to HKD 8,801,000 in the prior year, marking an increase of about 51%[159]. - The total comprehensive loss for the period was HKD 14,910,000, compared to HKD 9,426,000 in the previous year, indicating an increase of approximately 58%[174]. Cash Flow and Liquidity - The net cash used in operating activities was HKD (25,617,000), compared to HKD (22,833,000) in the previous period[12]. - Cash inflow from bank borrowings amounted to HKD 6,176,000, while repayment of bank borrowings was HKD (13,283,000)[12]. - The cash and cash equivalents at the end of the period were HKD 3,995,000, down from HKD 12,821,000 in the previous year[96]. - The company's cash and cash equivalents significantly dropped to HKD 3,995,000 from HKD 33,373,000, reflecting a decline of approximately 88.0%[186]. - For the six months ended September 30, 2024, the net cash flow decreased by HKD 29,408,000 compared to an increase of HKD 11,069,000 in the same period of 2023[96]. Assets and Liabilities - The total assets of the group as of September 30, 2024, amounted to HKD 218,280 thousand, a slight decrease from HKD 223,095 thousand in the previous year[27]. - As of September 30, 2024, total assets minus current liabilities amounted to HKD 106,523,000, a decrease from HKD 116,211,000 as of March 31, 2024, representing a decline of approximately 8.9%[186]. - Current assets totaled HKD 133,815,000, down from HKD 137,540,000, indicating a decrease of about 2.0%[186]. - The company's total liabilities decreased to HKD 111,757,000 from HKD 106,884,000, indicating an increase of about 4.0%[186]. - The total amount of trade payables rose to HKD 23,639,000 as of September 30, 2024, up from HKD 13,814,000 as of March 31, 2024, reflecting an increase of 70.9%[72]. Share Capital and Equity - The total issued and paid-up share capital increased to HKD 36,031,000 as of September 30, 2024, from HKD 26,031,000 as of March 31, 2024, reflecting new share issuances[87]. - The company issued 10,656,000 shares under its share option plan, raising a total cash consideration of HKD 5,221,440 during the six months ended September 30, 2024[88]. - The company's issued share capital was approximately HKD 37.1 million, an increase from HKD 36.0 million as of March 31, 2024, with a total of 370,968,640 shares issued[146]. - The company completed a placement of 60,000,000 shares at a price of HKD 0.401 per share, representing approximately 16.65% of the enlarged issued share capital post-placement[149]. Operational Segments - Revenue from the smartphone distribution segment was HKD 59,691 thousand, while the building intelligence and control systems contributed HKD 861 thousand, indicating a strong performance in the smartphone sector[29]. - The smartphone distribution segment generated revenue of HKD 59.7 million, accounting for 78.4% of total revenue[132]. - The control systems segment revenue increased to HKD 15.6 million, representing 20.5% of total revenue, compared to HKD 12.7 million in the previous period[132]. - The smart home business experienced a significant decline in external revenue from HKD 4.3 million to HKD 0.9 million, resulting in a segment loss of HKD 7.5 million[124]. - The data center business reported a revenue decrease to approximately HKD 12,000, with a segment loss of about HKD 18,000 during the reporting period[126]. Governance and Compliance - The company has adopted the Corporate Governance Code and believes it has complied with all applicable code provisions[6]. - The company did not purchase, sell, or redeem any of its listed securities during the six months ended September 30, 2024[2]. - The company maintained sufficient public float as per listing rules as of September 30, 2024[9]. - The company has not violated any covenants related to its bank borrowings as of September 30, 2024, ensuring compliance with financial agreements[81]. Management and Personnel - There were changes in the board of directors, with Mr. Zheng resigning and Mr. Xu appointed as an independent non-executive director effective August 6, 2024[4]. - Employee costs, including director remuneration, decreased to HKD 9,536 thousand from HKD 10,595 thousand, indicating cost management efforts[45]. - Short-term employee benefits for key management personnel amounted to HKD 2,009,000, a decrease of 15.9% from HKD 2,391,000 in 2023[112]. - The company reported a total of HKD 2,030,000 in compensation for key management personnel, down from HKD 2,419,000 in the previous year[112]. Future Outlook - The company plans to continue exploring new business and investment opportunities to diversify and expand its operations for long-term benefits[130]. - The board believes that the growth will depend on opportunities brought by 5G technology and related products[129]. - The company aims to improve profit margins in the smartphone distribution business by increasing procurement levels through the net proceeds from the new share subscription[119].

Group 1 - The article discusses various financial metrics such as earnings per share, net asset value per share, operating cash flow per share, and retained earnings per share [1] - It highlights key performance indicators including return on equity, gross margin, and net profit [1] - The article emphasizes the importance of revenue growth and year-over-year comparisons for net profit and non-recurring net profit [1] Group 2 - The article provides insights into liquidity ratios such as asset-liability ratio, current ratio, quick ratio, and cash ratio [1] - It categorizes financial performance by product, industry, and region, indicating a comprehensive analysis approach [1]

[Financial Summary](index=4&type=section&id=Financial%20Summary) [Financial Summary](index=4&type=section&id=Financial%20Summary) In FY2024, the Group's revenue slightly increased to **62.6 Million HKD**, with gross profit surging to **24.8 Million HKD** and loss attributable to owners significantly narrowing to **17.8 Million HKD** Summary of Annual Performance | Metric | FY2024 | FY2023 | YoY Change | | :--- | :--- | :--- | :--- | | Revenue (Thousand HKD) | 62,581 | 60,538 | +3.5% | | Gross Profit (Thousand HKD) | 24,757 | 8,948 | +178.7% | | Gross Margin | 39.6% | 14.8% | +24.8 percentage points | | Loss for the Year (Thousand HKD) | (17,768) | (43,679) | -59.3% | | Loss Attributable to Owners of the Company (Thousand HKD) | (17,840) | (41,000) | -56.5% | | Basic Loss Per Share (HKD) | (0.06) | (0.16) | -62.5% | Summary of Liquidity and Gearing Ratios | Metric | FY2024 | FY2023 | | :--- | :--- | :--- | | Inventory Turnover Days | 459 | 370 | | Trade Receivables Turnover Days | 140 | 130 | | Current Ratio | 1.3 | 0.7 | | Gearing Ratio | 12.4% | 96.4% | - Net cash used in operating activities expanded from **2.7 Million HKD** to **17.5 Million HKD**, indicating increased pressure on operating cash flow[6](index=6&type=chunk) [CEO's Report](index=6&type=section&id=CEO%27s%20Report) [CEO's Report](index=6&type=section&id=CEO%27s%20Report) CEO Mr. Han Weining noted FY2024 was challenging, yet revenue slightly increased, primarily from building intelligence and control systems, with both segments turning profitable and significant loss reduction - FY2024 revenue was **62.6 Million HKD**, a 3.5% year-on-year increase, primarily from building intelligence (38.8%) and control systems (60.8%) businesses[10](index=10&type=chunk) - Loss attributable to owners of the Company significantly decreased from **41.0 Million HKD** to **17.8 Million HKD**, due to a **15.9 Million HKD** increase in gross profit and a **3.0 Million HKD** increase in net other income[10](index=10&type=chunk) - The Company successfully completed two share placements in May 2023 and March 2024, raising approximately **38.5 Million HKD** net proceeds for working capital and future investments[11](index=11&type=chunk) [Management Discussion and Analysis](index=7&type=section&id=Management%20Discussion%20and%20Analysis) [Business Review](index=7&type=section&id=Business%20Review) The Group operates three main businesses: control systems, building intelligence, and data centers, with control systems and building intelligence turning profitable in FY2024, while data center revenue declined and losses expanded due to asset impairment [Control Systems Business](index=7&type=section&id=Control%20Systems%20Business) The control systems segment provides automation solutions for various industries, with external revenue increasing to **38.0 Million HKD** and achieving a segment profit of **0.5 Million HKD** in FY2024, reversing the previous year's loss Control Systems Business Financial Performance | Metric | FY2024 | FY2023 | | :--- | :--- | :--- | | External Revenue (Million HKD) | 38.0 | 34.0 | | Segment Profit / (Loss) (Million HKD) | 0.5 | (2.4) | [Building Intelligence Business](index=8&type=section&id=Building%20Intelligence%20Business) The building intelligence business, offering "MOX" brand visual intercom and smart home systems, maintained stable external revenue at **24.3 Million HKD** in FY2024 and turned profitable with a **3.6 Million HKD** gain due to higher-margin product sales Building Intelligence Business Financial Performance | Metric | FY2024 | FY2023 | | :--- | :--- | :--- | | External Revenue (Million HKD) | 24.3 | 25.8 | | Segment Profit / (Loss) (Million HKD) | 3.6 | (13.7) | [Data Center Business](index=8&type=section&id=Data%20Center%20Business) The data center business, launched in 2022, saw its total revenue decline to **0.2 Million HKD** in FY2024, with segment loss expanding to **11.7 Million HKD** primarily due to a **4.7 Million HKD** impairment of property, plant, and equipment Data Center Business Financial Performance | Metric | FY2024 | FY2023 | | :--- | :--- | :--- | | Total Revenue (Million HKD) | 0.2 | 0.8 | | Segment Loss (Million HKD) | (11.7) | (3.5) | [Investment in an Associate Engaged in Charging Station Leasing Business](index=9&type=section&id=Investment%20in%20an%20Associate%20Engaged%20in%20Charging%20Station%20Leasing%20Business) The Group sold a 5% interest in associate Iogo Workshop Investment Limited for **RMB 15 Million**, recognizing a **1.5 Million HKD** gain, and reclassified the remaining 15% interest as a financial asset at fair value of **33.9 Million HKD**, while recognizing a **2.6 Million HKD** share of loss from the associate - Sold a **5%** interest in associate Iogo Workshop for **RMB 15 Million**, recognizing a **1.5 Million HKD** gain[22](index=22&type=chunk) - The remaining **15%** interest was reclassified as a financial asset at fair value through profit or loss, with a fair value of **33.9 Million HKD**[22](index=22&type=chunk) [Business Outlook and Future Plans](index=9&type=section&id=Business%20Outlook%20and%20Future%20Plans) Facing macroeconomic challenges, the Group will maintain prudent cost control, leverage growth in China's 5G, IoT, and smart home markets for building intelligence, actively seek diversification opportunities, and continuously evaluate fundraising options for future investments - Market challenges include weak economic recovery in China due to inflation, high interest rates, and US-China tensions[24](index=24&type=chunk) - Future strategy involves prudent cost control and seeking business opportunities to diversify revenue streams, particularly focusing on opportunities from 5G technology[24](index=24&type=chunk) - The Company will continue to explore new business and investment opportunities, and evaluate potential fundraising methods, including issuing new shares or convertible securities[26](index=26&type=chunk) [Loan Transactions](index=10&type=section&id=Loan%20Transactions) As of March 31, 2024, the Group had two outstanding loan receivables totaling approximately **21.2 Million HKD**, both fully impaired to zero net book value due to long-term overdue status and lack of formal repayment agreements, with the report detailing reasons for granting, impairment assessment, internal controls, and recovery actions Outstanding Loan Receivables (as of March 31, 2024) | Borrower | Outstanding Amount (Thousand HKD) | Loss Allowance (Thousand HKD) | Carrying Amount (Thousand HKD) | | :--- | :--- | :--- | :--- | | Debtor 1 | 10,087 | (10,087) | – | | Debtor 2 | 11,134 | (11,134) | – | | **Total** | **21,221** | **(21,221)** | **–** | - Due to long-term overdue status and absence of legally binding repayment arrangements, management adopted a prudent approach by making full specific provisions for both loans[31](index=31&type=chunk)[35](index=35&type=chunk) - The Group has established internal control policies for granting loans, including credit assessment procedures, and continues to pursue recovery actions such as debt collection and legal consultation for outstanding loans[36](index=36&type=chunk)[42](index=42&type=chunk)[44](index=44&type=chunk) [Financial Review](index=14&type=section&id=Financial%20Review) In FY2024, the Group's total revenue increased by 3.5% to **62.6 Million HKD**, driven by the control systems segment, while sales costs decreased by 26.7%, leading to a 178.7% surge in gross profit to **24.8 Million HKD**, and a significant narrowing of loss attributable to owners to **17.8 Million HKD** Revenue by Business Segment | Business Segment | FY2024 (Thousand HKD) | % of Total | FY2023 (Thousand HKD) | % of Total | | :--- | :--- | :--- | :--- | :--- | | Building Intelligence | 24,305 | 38.8% | 25,766 | 42.6% | | Control Systems | 38,030 | 60.8% | 33,977 | 56.1% | | Data Center | 246 | 0.4% | 795 | 1.3% | | **Total** | **62,581** | **100.0%** | **60,538** | **100.0%** | - Gross profit increased by **178.7%** year-on-year to **24.8 Million HKD**, with gross margin improving from **14.8%** to **39.6%**, primarily due to the launch of high-margin new products whose related R&D costs were expensed in prior years[48](index=48&type=chunk) - Administrative and other operating expenses decreased by **9.3 Million HKD** year-on-year to **27.5 Million HKD**, mainly due to lower staff costs[52](index=52&type=chunk) - Loss attributable to owners of the Company significantly decreased by **56.6%** from **41.0 Million HKD** to **17.8 Million HKD**[56](index=56&type=chunk) [Capital Structure, Liquidity and Financial Resources](index=16&type=section&id=Capital%20Structure%2C%20Liquidity%20and%20Financial%20Resources) The Group relies on operating cash, bank borrowings, and shareholder contributions for working capital, successfully raising approximately **38.5 Million HKD** net from two share placements in FY2024, significantly improving its financial position with current ratio increasing to **1.3** and gearing ratio decreasing to **15%** - Completed placement of **40,000,000** shares in May 2023, raising approximately **14.7 Million HKD** net proceeds, fully utilized for general working capital[62](index=62&type=chunk)[64](index=64&type=chunk) - Completed placement of **60,000,000** shares in March 2024, raising approximately **23.8 Million HKD** net proceeds, intended for general working capital and future investments[66](index=66&type=chunk)[68](index=68&type=chunk) Key Financial Ratios | Metric | March 31, 2024 | March 31, 2023 | | :--- | :--- | :--- | | Current Ratio | 1.3 | 0.7 | | Gearing Ratio | 15% | 96% | - Outstanding bank borrowings as of March 31, 2024, were approximately **50.7 Million HKD**, a decrease from **62.8 Million HKD** in the prior year[70](index=70&type=chunk) [Other Disclosures](index=19&type=section&id=Other%20Disclosures) This year, the Group undertook significant transactions including a share placement in MOX Group Limited, full disposal of Universal Clean Energy Investment Limited, and sale of two subsidiaries to a former co-CEO, while reducing employee count from 115 to 73, decreasing staff costs, and not recommending any dividends for the year, with post-reporting period events including share option grants and a new non-executive director appointment - Significant disposals include the full sale of Universal Clean Energy Investment Limited and the sale of two blockchain-related subsidiaries to a former co-CEO[73](index=73&type=chunk)[75](index=75&type=chunk) - Employee count decreased from **115** to **73** employees, with staff costs decreasing by **6.1%** year-on-year to **18.4 Million HKD**[79](index=79&type=chunk) - The Board does not recommend the declaration of any dividend for the year ended March 31, 2024[88](index=88&type=chunk) - Post-reporting period events include the grant of **25,043,200** share options on April 27, 2024, and the appointment of Ms. Mo Yina as a non-executive director on May 29, 2024[84](index=84&type=chunk)[86](index=86&type=chunk) [Directors](index=22&type=section&id=Directors) [Biographies of Directors](index=22&type=section&id=Biographies%20of%20Directors) This section provides detailed biographies of the Company's executive, non-executive, and independent non-executive directors, highlighting their diverse professional backgrounds in equity investment, logistics, accounting, finance, and law, which contribute to the Board's varied expertise - Executive Director Mr. Han Weining is the Company's CEO, with extensive experience in the telecommunications technology industry, holding a major stake in the Company through his wholly-owned entity[90](index=90&type=chunk) - Executive Director Mr. You Yiyang, appointed in March 2024, holds master's degrees in finance and accounting, with over ten years of experience in equity investment[91](index=91&type=chunk) - The independent non-executive director team possesses diverse professional backgrounds, covering accounting, finance, investment, and legal fields, contributing to corporate governance and decision-making[94](index=94&type=chunk)[95](index=95&type=chunk)[97](index=97&type=chunk)[98](index=98&type=chunk) [Directors' Report](index=25&type=section&id=Directors%27%20Report) [Principal Businesses and Risk Management](index=25&type=section&id=Principal%20Businesses%20and%20Risk%20Management) This report outlines the Group's principal businesses, including automatic control systems, intelligent systems, and advanced technology leasing/hosting services, while identifying key risks such as business/market, operational, financial (exchange rate, interest rate, liquidity), and compliance risks, along with their respective monitoring and management measures - The Group's principal businesses include: (i) automatic control systems and solutions; (ii) intelligent systems (visual intercom and surveillance); and (iii) leasing, hosting, and related services for advanced technologies (computer equipment, robots, etc)[102](index=102&type=chunk) - Key risks faced by the Group include: business/market risks (reliance on the Chinese market), operational risks, financial risks (exchange rate, interest rate, liquidity), and compliance risks[104](index=104&type=chunk)[105](index=105&type=chunk)[107](index=107&type=chunk)[108](index=108&type=chunk)[109](index=109&type=chunk) [Results and Dividends](index=27&type=section&id=Results%20and%20Dividends) The Group's detailed results for the current financial year are presented in the consolidated statement of profit or loss and other comprehensive income, with the Board deciding not to declare any dividends for the year ended March 31, 2024 - The Directors do not recommend the payment of any dividend for the year ended March 31, 2024[118](index=118&type=chunk) [Major Suppliers and Customers](index=28&type=section&id=Major%20Suppliers%20and%20Customers) In FY2024, the Group exhibited high reliance on its major customers, with the largest customer accounting for **27.1%** of total revenue and the top five customers collectively contributing **58.0%**, whereas suppliers were more diversified, with the largest accounting for **6.0%** of total purchases and the top five for **15.8%** Major Customer and Supplier Proportions | Category | Percentage of Total | | :--- | :--- | | Largest Customer | 27.1% | | Top Five Customers Total | 58.0% | | Largest Supplier | 6.0% | | Top Five Suppliers Total | 15.8% | [Directors' and Interests Disclosure](index=29&type=section&id=Directors%27%20and%20Interests%20Disclosure) The reporting period saw multiple changes in Board members, with CEO Mr. Han Weining holding approximately **18.67%** of the Company's shares through his controlled entities as of March 31, 2024, and Mr. Lin Shaoxin holding approximately **9.91%** as a major shareholder, with no material conflicts of interest for directors in competing businesses or significant contracts during the period - During and after the reporting period, there were several changes in Board members, including the appointment, resignation, and retirement of multiple directors[131](index=131&type=chunk) Directors' and Major Shareholders' Shareholdings (as of March 31, 2024) | Shareholder Name / Company Name | Capacity / Nature of Interest | Number of Shares Held | Approximate Percentage of Shareholding | | :--- | :--- | :--- | :--- | | Mr. Han Weining | Interest in controlled corporation and beneficial owner | 67,246,331 | 18.67% | | Excel Time | Beneficial owner | 53,814,331 | 14.94% | | Lin Shaoxin | Beneficial owner | 35,716,480 | 9.91% | [Share Option Scheme](index=33&type=section&id=Share%20Option%20Scheme) The Company adopted a new share option scheme on September 2, 2022, valid until September 1, 2032, to incentivize contributing directors and employees, with no outstanding share options as of March 31, 2024, and a total of **25,047,264** shares available for issue, representing approximately **6.95%** of the total issued shares - The Company has a share option scheme adopted on September 2, 2022, with a ten-year validity period[146](index=146&type=chunk) - As of March 31, 2024, there were no outstanding share options under the share option scheme[150](index=150&type=chunk) - The total number of shares available for issue under the share option scheme is **25,047,264**, representing approximately **6.95%** of the total issued shares as of the reporting date[151](index=151&type=chunk) [Corporate Governance Report](index=37&type=section&id=Corporate%20Governance%20Report) [Corporate Governance Practices](index=37&type=section&id=Corporate%20Governance%20Practices) The Company has adopted the Corporate Governance Code, complying with all applicable provisions during the reporting period, except for the continuous vacancy of the Board Chairman position since January 3, 2020, and the CEO chairing the 2023 AGM due to the Chairman's absence - The Company failed to comply with Corporate Governance Code Provision C.2 due to the continuous vacancy of the Board Chairman position, with related functions jointly performed by Board members[171](index=171&type=chunk) - Due to the vacant Chairman position, the Company failed to comply with Code Provision F.2.2, with the CEO chairing the 2023 Annual General Meeting[172](index=172&type=chunk) [Board of Directors](index=38&type=section&id=Board%20of%20Directors) As of the reporting period end, the Board comprised two executive and four independent non-executive directors, possessing diverse skills and experience, with the Company adopting a Board Diversity Policy and holding 17 meetings during the year to discuss strategy and operations, ensuring director liability insurance and independent non-executive director independence - The Board has adopted a diversity policy and believes the current Board members possess good diversity in terms of gender, age, cultural background, and professional experience[177](index=177&type=chunk) - For the year ended March 31, 2024, the Board held **17** meetings and **1** general meeting, with generally high attendance rates among directors[181](index=181&type=chunk) [Board Committees](index=42&type=section&id=Board%20Committees) The Company has established an Audit Committee, Remuneration Committee, and Nomination Committee, all chaired by independent non-executive directors, responsible for overseeing financial reporting, internal controls, remuneration policies, and Board structure/nominations, holding 2, 5, and 5 meetings respectively during the year - The Audit Committee, composed of three independent non-executive directors, is responsible for reviewing financial statements and internal control systems, holding **2** meetings during the year[194](index=194&type=chunk)[195](index=195&type=chunk) - The Remuneration Committee, composed of three independent non-executive directors, is responsible for reviewing remuneration policies, holding **5** meetings during the year[196](index=196&type=chunk)[199](index=199&type=chunk) - The Nomination Committee, primarily composed of independent non-executive directors, is responsible for reviewing Board composition and nominating candidates, holding **5** meetings during the year[200](index=200&type=chunk)[203](index=203&type=chunk) [Internal Control and Risk Management](index=47&type=section&id=Internal%20Control%20and%20Risk%20Management) The Board holds ultimate responsibility for the Group's risk management and internal control systems, reviewing their effectiveness annually, with a COSO-framework-based system and external review confirming its effectiveness, and the Company continuously assessing the need for an internal audit function - The Board confirms its responsibility for risk management and internal control systems, reviewing their effectiveness at least annually[211](index=211&type=chunk) - The Group has established a four-tier risk management governance structure and implemented an internal control system based on the COSO framework, covering five key components: control environment, risk assessment, control activities, information and communication, and monitoring activities[212](index=212&type=chunk)[218](index=218&type=chunk) - The Company currently does not have an internal audit function, with the Board deeming external professional review more cost-effective, and will continue to assess the need for an in-house internal audit department[228](index=228&type=chunk) [Environmental, Social and Governance Report](index=53&type=section&id=Environmental%2C%20Social%20and%20Governance%20Report) [Report Overview and Governance](index=53&type=section&id=Report%20Overview%20and%20Governance) This ESG report outlines the Group's FY2024 sustainability commitments and performance, focusing on operational company Wankesi, detailing its ESG governance structure, environmental targets, and 17 material ESG issues identified through stakeholder engagement, including GHG emissions, energy consumption, employee development, product quality, and anti-corruption - The report is prepared in accordance with the HKEX ESG Reporting Guide, primarily covering Wankesi, an operating company with significant environmental impact[233](index=233&type=chunk)[235](index=235&type=chunk) - The Group has established an ESG governance structure led by the Board, responsible for strategy, target setting, and risk oversight[238](index=238&type=chunk)[241](index=241&type=chunk) - Through materiality assessment, the Group identified **17** material ESG issues, with "Greenhouse Gas Emissions," "Waste Management," "Energy Consumption," "Employee Development and Training," and "Product Quality Control" deemed most important[248](index=248&type=chunk)[252](index=252&type=chunk) [A. Environment](index=58&type=section&id=A.%20Environment) The Group is committed to environmental sustainability, adhering to regulations, managing emissions through efficient filtration and energy-saving measures, promoting resource conservation in electricity, water, and packaging, and developing strategies to address physical and transitional climate-related risks Wankesi Greenhouse Gas Emissions | Metric | Unit | FY2024 | FY2023 | | :--- | :--- | :--- | :--- | | Total GHG Emissions | tonnes of CO2e | 133.92 | 345.97 | | GHG Emissions Intensity | tonnes of CO2e / Total Annual Production | 0.02 | 0.02 | Wankesi Energy and Water Consumption | Metric | Unit | FY2024 | FY2023 | | :--- | :--- | :--- | :--- | | Total Energy Consumption | kWh | 234,823.00 | 436,773.81 | | Energy Consumption Intensity | kWh / Total Annual Production | 31.31 | 26.07 | | Total Water Consumption | cubic meters | 3,704.00 | 3,955.83 | | Water Consumption Intensity | cubic meters / Total Annual Production | 0.49 | 0.24 | - The Group has set targets to reduce greenhouse gas emissions intensity, non-hazardous waste intensity, energy consumption intensity, and water consumption intensity by or before FY2025, using FY2022 as the baseline[256](index=256&type=chunk)[260](index=260&type=chunk)[268](index=268&type=chunk)[272](index=272&type=chunk) - The Group has identified physical risks (e.g., extreme weather) and transitional risks (e.g., stricter regulations) related to climate change, and has developed corresponding prevention and response measures[282](index=282&type=chunk)[284](index=284&type=chunk) [B. Society](index=64&type=section&id=B.%20Society) In social responsibility, the Group is committed to protecting employee rights, providing fair employment, a safe workplace, and diverse training, strictly prohibiting child and forced labor, implementing stringent supply chain management, prioritizing product quality, customer privacy, and intellectual property, and maintaining clear anti-corruption policies with relevant training for directors and staff - As of March 31, 2024, the Group had **73** employees, a decrease from **115** last year, with an employee turnover rate of **57.53%** for the year[289](index=289&type=chunk)[292](index=292&type=chunk) - The Group highly prioritizes occupational health and safety, with no work-related injuries or fatalities reported during the period, and zero lost workdays due to work-related injuries[294](index=294&type=chunk) - The Group has established a four-module training system, with approximately **32.88%** of employees receiving training in FY2024, averaging **1.99** hours per trainee[299](index=299&type=chunk)[300](index=300&type=chunk) - The Group has established a stringent supplier management system, requiring suppliers to adhere to a code of ethics, with **164** suppliers in FY2024, all located in China[308](index=308&type=chunk) - The Group has an anti-corruption policy and whistleblowing system, providing anti-corruption training to **3** directors and **37** employees during the current financial year[323](index=323&type=chunk) [Financial Statements](index=79&type=section&id=Financial%20Statements) [Independent Auditor's Report](index=79&type=section&id=Independent%20Auditor%27s%20Report) The auditor, Grandall CPA Limited, issued an unmodified opinion on the Group's consolidated financial statements for the year ended March 31, 2024, affirming they present a true and fair view in accordance with HKFRSs and the Companies Ordinance, with "Provision for Expected Credit Losses on Trade Receivables" identified as a key audit matter, which the auditor found supported by evidence after reviewing management's assessment - The auditor issued an unmodified opinion on the consolidated financial statements[339](index=339&type=chunk) - A key audit matter was "Provision for Expected Credit Losses on Trade Receivables," with total trade receivables of approximately **48.5 Million HKD** and expected credit loss provision of approximately **26.2 Million HKD** as of the reporting period end[341](index=341&type=chunk)[343](index=343&type=chunk) - The auditor's procedures, including understanding key controls, sampling aging and post-period settlements, inquiring management, and evaluating the ECL model, supported management's judgments and estimates[345](index=345&type=chunk)[346](index=346&type=chunk) [Consolidated Financial Statements](index=84&type=section&id=Consolidated%20Financial%20Statements) This section presents the Group's four core financial statements for the year ended March 31, 2024, showing a narrowed annual loss of **17.8 Million HKD**, total assets of **223.1 Million HKD**, increased total equity to **116.2 Million HKD**, and year-end cash and cash equivalents rising to **33.4 Million HKD**, primarily due to net cash inflow from financing activities Consolidated Financial Statements Key Data (Thousand HKD) | Statement | Metric | FY2024 | FY2023 | | :--- | :--- | :--- | :--- | | **Statement of Profit or Loss** | Revenue | 62,581 | 60,538 | | | Loss for the Year | (17,768) | (43,679) | | **Statement of Financial Position** | Total Assets | 223,095 | 226,023 | | | Total Liabilities | 106,884 | 157,654 | | | Total Equity | 116,211 | 68,369 | | **Statement of Cash Flows** | Net Cash from Operating Activities | (17,478) | (2,716) | | | Net Cash from Investing Activities | (2,657) | (390) | | | Net Cash from Financing Activities | 50,784 | (2,834) | | | Cash and Cash Equivalents at Year End | 33,373 | 2,345 | [Notes to the Consolidated Financial Statements](index=91&type=section&id=Notes%20to%20the%20Consolidated%20Financial%20Statements) The notes provide detailed explanations and supplementary information to the consolidated financial statements, covering general information, new accounting standards, significant accounting policies, key judgments and estimates, disaggregated revenue, expenses, assets, liabilities, and equity items, as well as segment information, related party transactions, financial risk management, and post-reporting period events - Note 5 discloses that revenue primarily originated from Building Intelligence (**24.3 Million HKD**) and Control Systems (**38.0 Million HKD**) businesses[496](index=496&type=chunk) - Note 13 provides detailed segment reporting, showing profitability in Building Intelligence and Control Systems segments, while the Data Center segment incurred losses[528](index=528&type=chunk) - Notes 21 and 30(a) detail the aging analysis of trade and other receivables and the assessment of expected credit loss provisions, a key audit matter[563](index=563&type=chunk)[602](index=602&type=chunk) - Note 28(b) records the share capital changes during the year, including the issuance of **100 Million** new shares through two placements[583](index=583&type=chunk)[585](index=585&type=chunk) - Note 35 discloses post-reporting period events, including the grant of **25,043,200** share options and the appointment of a non-executive director[649](index=649&type=chunk)[650](index=650&type=chunk) [Five Year Summary](index=175&type=section&id=Five%20Year%20Summary) [Five Year Summary](index=175&type=section&id=Five%20Year%20Summary) This section provides a summary of the Group's key financial data for the past five fiscal years (2020-2024), showing revenue peaking in 2022 before stabilizing around **60 Million HKD** in recent years, consistent losses over five years with FY2024 being the second lowest, and total assets and equity recovering in FY2024 after prior declines Five Year Financial Data Summary (Thousand HKD) | Year Ended March 31 | FY2024 | FY2023 | FY2022 | FY2021 | FY2020 | | :--- | :--- | :--- | :--- | :--- | :--- | | **Results** | | | | | | | Revenue | 62,581 | 60,538 | 114,165 | 90,281 | 73,243 | | Loss Attributable to Owners of the Company | (17,840) | (40,971) | (109,678) | (15,133) | (38,677) | | **Financial Position** | | | | | | | Total Assets | 223,095 | 226,023 | 271,452 | 309,714 | 296,288 | | Total Liabilities | (106,884) | (157,654) | (166,017) | (147,072) | (123,083) | | Equity Attributable to Owners of the Company | 113,173 | 69,126 | 102,893 | 156,218 | 165,568 |

[Supplemental Announcement Regarding Annual Results for FY2024](index=1&type=section&id=Supplemental%20Announcement%20Regarding%20Annual%20Results%20for%20the%20Year%20Ended%20March%2031%2C%202024) This announcement provides supplementary information to the annual results for the year ended March 31, 2024, primarily clarifying the auditor's scope of work [Announcement Background](index=1&type=section&id=Announcement%20Background) This announcement, issued by Synergis Holdings Limited on July 1, 2024, supplements the annual results announcement published on June 28, 2024, for the year ended March 31, 2024 - This document serves as a supplement to the annual results announcement released on June 28, 2024[2](index=2&type=chunk) [Clarification of Auditor's Scope of Work](index=1&type=section&id=Scope%20of%20Work%20of%20Guowei%20CPA%20Limited) The core of this announcement clarifies the scope of work performed by Guowei CPA Limited regarding the preliminary results announcement, confirming financial figures align with draft consolidated financial statements but without providing an audit opinion or assurance conclusion - The auditor confirmed that the financial figures in the preliminary results announcement are consistent with the company's draft consolidated financial statements for the same year[3](index=3&type=chunk) - The auditor explicitly stated that the work performed does not constitute an assurance engagement, thus no opinion or assurance conclusion was expressed on the preliminary announcement[3](index=3&type=chunk) [Other Information](index=2&type=section&id=Other%20Information) All other information in the original annual results announcement remains unchanged, with the announcement concluding by listing the Board of Directors as of the announcement date - Except for the supplementary information, all other content of the original annual results announcement remains unchanged[5](index=5&type=chunk) - The announcement lists the company's Board of Directors as of July 1, 2024, including executive, non-executive, and independent non-executive directors[6](index=6&type=chunk)

Company Information and Announcements [Disclaimer](index=1&type=section&id=Disclaimer) The 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 statement as to its accuracy or completeness, and expressly disclaim any liability for any loss arising from or in reliance upon the whole or any part of the contents of this announcement - The Hong Kong Stock Exchange assumes no responsibility for the content of this announcement, nor does it guarantee its accuracy or completeness[1](index=1&type=chunk) [Company Overview and Performance Announcement](index=1&type=section&id=Company%20Overview%20and%20Performance%20Announcement) Synertone Communication Group Limited (Stock Code: 1613) announced its consolidated results for the year ended March 31, 2024, with comparative data for the same period in 2023 - Synertone Communication Group Limited (Stock Code: 1613) released its annual results announcement for the year ended March 31, 2024[2](index=2&type=chunk) Consolidated Financial Statements [Consolidated Statement of Profit or Loss and Other Comprehensive Income](index=2&type=section&id=Consolidated%20Statement%20of%20Profit%20or%20Loss%20and%20Other%20Comprehensive%20Income) For the year ended March 31, 2024, the Group's revenue slightly increased, but it still recorded a loss, which significantly narrowed compared to the previous year, with gross profit notably improving despite fluctuations in other income and net other gains Key Data from Consolidated Statement of Profit or Loss and Other Comprehensive Income | Indicator | 2024 (HK$ thousand) | 2023 (HK$ thousand) | Change (HK$ thousand) | Change Rate (%) | | :--- | :--- | :--- | :--- | :--- | | Revenue | 62,581 | 60,538 | 2,043 | 3.38 | | Cost of Sales | (37,824) | (51,590) | 13,766 | -26.68 | | Gross Profit | 24,757 | 8,948 | 15,809 | 176.69 | | Other Income | 2,238 | 3,572 | (1,334) | -37.35 | | Net Other Gains | 4,806 | 1,800 | 3,006 | 167.00 | | Operating Loss | (11,883) | (37,036) | 25,153 | -67.91 | | Loss Before Tax | (17,752) | (43,675) | 25,923 | -59.36 | | Loss for the Year | (17,768) | (43,679) | 25,911 | -59.32 | | Loss Attributable to Owners of the Company | (17,840) | (40,971) | 23,131 | -56.46 | | Basic and Diluted Loss Per Share (HK cents) | (6.0) | (16.05) | 10.05 | -62.62 | [Consolidated Statement of Financial Position](index=4&type=section&id=Consolidated%20Statement%20of%20Financial%20Position) As of March 31, 2024, the Group's non-current assets and current liabilities decreased, while current assets and total equity increased, resulting in a positive net current assets position and an overall improved financial condition Key Data from Consolidated Statement of Financial Position | Indicator | 2024 (HK$ thousand) | 2023 (HK$ thousand) | Change (HK$ thousand) | Change Rate (%) | | :--- | :--- | :--- | :--- | :--- | | Non-current Assets | 85,555 | 120,455 | (34,900) | -28.97 | | Current Assets | 137,540 | 105,568 | 31,972 | 30.28 | | Current Liabilities | 106,884 | 156,013 | (49,129) | -31.49 | | Net Current Assets | 30,656 | (50,445) | 81,101 | -160.77 | | Total Assets Less Current Liabilities | 116,211 | 70,010 | 46,201 | 65.99 | | Net Assets | 116,211 | 68,369 | 47,842 | 69.98 | | Total Equity | 116,211 | 68,369 | 47,842 | 69.98 | | Cash and Cash Equivalents | 33,373 | 2,345 | 31,028 | 1323.92 | | Trade and Other Receivables | 40,850 | 39,475 | 1,375 | 3.48 | | Trade and Other Payables | 45,646 | 57,212 | (11,566) | -20.22 | Notes to the Financial Statements [General Information](index=6&type=section&id=General%20Information) Synertone Communication Group Limited, incorporated in the Cayman Islands and listed on the Main Board of the Hong Kong Stock Exchange in 2012, primarily operates in China, focusing on the design, development, and sale of automatic control systems and smart systems, as well as leasing and hosting services for computer equipment, IT infrastructure, and robots, with financial statements presented in HKD - The company was incorporated in the Cayman Islands in 2006 and listed on the Hong Kong Stock Exchange in 2012[9](index=9&type=chunk)[10](index=10&type=chunk) - Principal businesses include the design, development, and sale of automatic control systems and smart systems (visual intercom and surveillance), as well as leasing and hosting services for computer equipment, IT infrastructure, and robots[10](index=10&type=chunk) - The Group's main operations are conducted in China, and the consolidated financial statements are presented in Hong Kong dollars[11](index=11&type=chunk) [Application of New and Revised Hong Kong Financial Reporting Standards](index=7&type=section&id=Application%20of%20New%20and%20Revised%20Hong%20Kong%20Financial%20Reporting%20Standards) This year marks the first application of several new and revised Hong Kong Financial Reporting Standards, including HKFRS 17 (Insurance Contracts) and amendments to HKAS 1, 8, and 12, which management assessed to have no material impact on the financial position or performance for the current and prior years - This year marks the first application of HKFRS 17 and amendments to HKAS 1, 8, and 12[14](index=14&type=chunk) - The implementation of new standards has no material impact on the Group's financial position and performance[14](index=14&type=chunk) [Segment Reporting](index=8&type=section&id=Segment%20Reporting) The Group manages and reports its operations across three business segments: building intelligence, control systems, and data centers; for FY2024, both control systems and building intelligence segments achieved profitability, while the data center segment's loss expanded, with revenue primarily from the Chinese market and changes in customer concentration - The Group's principal business segments include building intelligence, control systems, and data centers[16](index=16&type=chunk) [Segment Results, Assets and Liabilities](index=8&type=section&id=Segment%20Results%2C%20Assets%20and%20Liabilities) In FY2024, both the control systems and building intelligence segments turned from loss to profit, while the data center segment's loss widened, with external revenue for control systems growing, building intelligence remaining stable, and data centers significantly decreasing FY2024 Segment Performance Overview (Adjusted EBIT) | Segment | 2024 External Revenue (HK$ thousand) | 2023 External Revenue (HK$ thousand) | 2024 Segment Profit/(Loss) (HK$ thousand) | 2023 Segment Loss (HK$ thousand) | | :--- | :--- | :--- | :--- | :--- | | Building Intelligence | 24,305 | 25,766 | 3,616 | (13,734) | | Control Systems | 38,030 | 33,977 | 467 | (2,384) | | Data Center | 246 | 795 | (11,711) | (3,516) | - The increase in data center segment loss is primarily due to an impairment of property, plant and equipment of **HK$4.7 million** recorded in FY2024[53](index=53&type=chunk) [Reconciliation of Reportable Segment Revenue, Profit or Loss, Assets and Liabilities](index=11&type=section&id=Reconciliation%20of%20Reportable%20Segment%20Revenue%2C%20Profit%20or%20Loss%2C%20Assets%20and%20Liabilities) This section provides a reconciliation of revenue, loss, assets, and liabilities for each reportable segment to the corresponding totals in the consolidated financial statements, illustrating the effects of inter-segment eliminations and unallocated corporate items FY2024 Consolidated Revenue and Loss Reconciliation | Indicator | 2024 (HK$ thousand) | 2023 (HK$ thousand) | | :--- | :--- | :--- | | Reportable Segment Revenue | 66,140 | 63,583 | | Elimination of Inter-segment Revenue | (3,559) | (3,045) | | Consolidated Revenue | 62,581 | 60,538 | | Reportable Segment Loss | (7,628) | (19,634) | | Consolidated Loss Before Tax | (17,752) | (43,675) | [Geographical Information](index=12&type=section&id=Geographical%20Information) The Group's revenue primarily originates from China, with external customer revenue in the Chinese market increasing in FY2024, while revenue from Hong Kong and overseas markets decreased or was zero, and non-current assets are also mainly concentrated in China FY2024 Geographical Revenue and Non-current Assets | Region | 2024 Revenue from External Customers (HK$ thousand) | 2023 Revenue from External Customers (HK$ thousand) | 2024 Non-current Assets (HK$ thousand) | 2023 Non-current Assets (HK$ thousand) | | :--- | :--- | :--- | :--- | :--- | | Hong Kong | 246 | 795 | – | 11,172 | | China | 62,335 | 59,557 | 51,690 | 109,283 | | Overseas | – | 186 | – | – | | **Total** | **62,581** | **60,538** | **51,690** | **120,455** | [Information about Major Customers](index=12&type=section&id=Information%20about%20Major%20Customers) In FY2024, the Group had two major customers (Customer A and Customer B) in the building intelligence business that contributed over 10% of total sales, whereas in FY2023, no single customer contributed over 10% FY2024 Major Customer Revenue Contribution | Customer | 2024 Revenue (HK$ thousand) | 2023 Revenue (HK$ thousand) | | :--- | :--- | :--- | | Customer A (Building Intelligence) | 16,972 | Not applicable* | | Customer B (Building Intelligence) | 6,612 | Not applicable* | * Revenue from customers in 2023 was less than 10% of the Group's total revenue - In FY2024, no single customer contributed **10% or more** of the Group's revenue[30](index=30&type=chunk) [Revenue](index=13&type=section&id=Revenue%20(Notes)) The Group's total revenue for FY2024 was HK$62.581 million, representing a 3.38% increase from FY2023, driven by significant growth in the control systems business, a slight decrease in building intelligence, and a substantial reduction in data center business revenue Revenue by Major Products and Services | Business Segment | 2024 (HK$ thousand) | 2023 (HK$ thousand) | Change (HK$ thousand) | Change Rate (%) | | :--- | :--- | :--- | :--- | :--- | | Building Intelligence | 24,305 | 25,766 | (1,461) | -5.67 | | Control Systems | 38,030 | 33,977 | 4,053 | 11.93 | | Data Center | – | 371 | (371) | -100.00 | | **Total Revenue from Contracts with Customers** | **62,335** | **60,114** | **2,221** | **3.70** | | Rental income under HKFRS 16 | 246 | 424 | (178) | -42.00 | | **Total Revenue** | **62,581** | **60,538** | **2,043** | **3.38** | - Revenue from building intelligence and control systems businesses is recognized when customers obtain control of the goods, while data center business revenue is recognized over time[32](index=32&type=chunk)[33](index=33&type=chunk) [Other Income and Net Other Gains](index=14&type=section&id=Other%20Income%20and%20Net%20Other%20Gains%20(Notes)) In FY2024, other income decreased due to reduced government subsidies, while net other gains significantly increased primarily from gains on disposal of subsidiaries and an associate Other Income and Net Other Gains | Item | 2024 (HK$ thousand) | 2023 (HK$ thousand) | Change (HK$ thousand) | Change Rate (%) | | :--- | :--- | :--- | :--- | :--- | | **Other Income** | | | | | | Interest income from bank deposits | 50 | 13 | 37 | 284.62 | | VAT refunds | 546 | 350 | 196 | 56.00 | | Government subsidies | – | 1,302 | (1,302) | -100.00 | | Miscellaneous income | 1,642 | 1,730 | (88) | -5.09 | | **Subtotal** | **2,238** | **3,572** | **(1,334)** | **-37.35** | | **Net Other Gains** | | | | | | Net exchange gains | 292 | 49 | 243 | 495.92 | | Gain on disposal of a subsidiary | 3,044 | – | 3,044 | N/A | | Gain on disposal of an associate | 1,459 | – | 1,459 | N/A | | **Subtotal** | **4,806** | **1,800** | **3,006** | **167.00** | | **Total** | **7,044** | **5,372** | **1,672** | **31.12** | - A reduction in government subsidies of approximately **HK$1.3 million** was the primary reason for the decrease in other income[38](index=38&type=chunk) - Gains from the disposal of a subsidiary and an associate, approximately **HK$3.0 million** and **HK$1.5 million** respectively, drove the significant increase in net other gains[36](index=36&type=chunk)[85](index=85&type=chunk) [Loss Before Tax](index=15&type=section&id=Loss%20Before%20Tax) The loss before tax for FY2024 was calculated considering finance costs, staff costs, and other operating items, with both finance costs and staff costs decreasing, while net provision for expected credit losses slightly increased Components of Loss Before Tax | Item | 2024 (HK$ thousand) | 2023 (HK$ thousand) | Change (HK$ thousand) | Change Rate (%) | | :--- | :--- | :--- | :--- | :--- | | **Finance Costs** | | | | | | Interest expense on bank borrowings | 3,200 | 3,467 | (267) | -7.70 | | Finance charges on lease liabilities | 110 | 317 | (207) | -65.30 | | **Subtotal** | **3,310** | **3,784** | **(474)** | **-12.53** | | **Staff Costs** | | | | | | Salaries, wages and other benefits | 16,282 | 17,303 | (1,021) | -5.90 | | Contributions to defined contribution retirement plans | 2,159 | 2,325 | (166) | -7.14 | | **Subtotal** | **18,441** | **19,628** | **(1,187)** | **-6.05** | | **Other Items** | | | | | | Cost of inventories recognized as expense | 37,824 | 50,893 | (13,069) | -25.68 | | Depreciation of property, plant and equipment | 4,481 | 4,672 | (191) | -4.09 | | Depreciation of right-of-use assets | 2,859 | 6,168 | (3,309) | -53.65 | | Net provision for expected credit losses | 7,476 | 7,261 | 215 | 2.96 | | Research and development expenses | 2,588 | 4,221 | (1,633) | -38.69 | | Impairment of non-financial assets | 4,721 | 821 | 3,900 | 475.03 | [Income Tax](index=16&type=section&id=Income%20Tax) Income tax expense for FY2024 primarily consisted of China corporate income tax, which slightly increased compared to the previous year Income Tax Expense | Item | 2024 (HK$ thousand) | 2023 (HK$ thousand) | | :--- | :--- | :--- | | Current tax - China corporate income tax | 16 | – | | Underprovision in prior years - China corporate income tax | – | 4 | | **Income Tax Expense** | **16** | **4** | [Dividends](index=16&type=section&id=Dividends%20(Notes)) No dividends were paid or proposed for the year ended March 31, 2024 - No dividends were paid or proposed for both FY2024 and FY2023[41](index=41&type=chunk) [Loss Per Share](index=16&type=section&id=Loss%20Per%20Share) Basic loss per share for FY2024 significantly narrowed to 6.0 HK cents from 16.05 HK cents in FY2023, with no diluted loss per share presented due to the absence of potential dilutive ordinary shares Loss Per Share Data | Indicator | 2024 | 2023 | | :--- | :--- | :--- | | Loss Attributable to Owners of the Company (HK$ thousand) | (17,840) | (40,971) | | Weighted Average Number of Ordinary Shares (thousand shares) | 295,722 | 255,325 | | Basic and Diluted Loss Per Share (HK cents) | (6.0) | (16.05) | - Diluted loss per share is not presented as there were no potential dilutive ordinary shares in either year[43](index=43&type=chunk) [Trade and Other Receivables](index=17&type=section&id=Trade%20and%20Other%20Receivables) As of March 31, 2024, total trade and other receivables amounted to HK$40.850 million, a slight increase from the previous year, with an increase in loss allowance for trade receivables but a significant decrease for loan receivables and other receivables Overview of Trade and Other Receivables | Item | 2024 (HK$ thousand) | 2023 (HK$ thousand) | | :--- | :--- | :--- | | Trade receivables | 48,546 | 47,407 | | Less: Loss allowance | (26,194) | (23,605) | | **Net Trade Receivables** | **22,352** | **23,802** | | Loan receivables | – | 21,318 | | Other receivables | 24,529 | 23,596 | | Prepaid VAT and other taxes | 67 | 118 | | Deposits and prepayments | 13,818 | 12,119 | | Less: Loss allowance | (19,916) | (41,255) | | **Net Deposits and Prepayments** | **18,498** | **16,050** | | **Total Trade and Other Receivables** | **40,850** | **39,852** | Ageing Analysis of Trade Receivables (by due date) | Ageing | 2024 (HK$ thousand) | 2023 (HK$ thousand) | | :--- | :--- | :--- | | Not yet due | 28,707 | 20,694 | | 1 to 60 days | 2,258 | 2,729 | | 61 to 90 days | 1,874 | 1,962 | | 91 to 180 days | 340 | 340 | | 181 to 365 days | 6,511 | 1,811 | | Over 365 days | 8,856 | 19,871 | | **Total** | **48,546** | **47,407** | | Less: Loss allowance | (26,194) | (23,605) | | **Net** | **22,352** | **23,802** | - Customer credit terms range from **30 to 180 days**, extendable to **181 to 365 days** for reputable customers[45](index=45&type=chunk) [Trade and Other Payables](index=18&type=section&id=Trade%20and%20Other%20Payables) As of March 31, 2024, total trade and other payables amounted to HK$45.646 million, a decrease from the previous year, primarily due to a reduction in trade payables and deposits received Overview of Trade and Other Payables | Item | 2024 (HK$ thousand) | 2023 (HK$ thousand) | | :--- | :--- | :--- | | Trade payables | 13,814 | 18,186 | | Accrued salaries | 3,492 | 3,213 | | Accrued expenses | 3,347 | 3,723 | | Other payables | 24,454 | 26,923 | | Deposits received | 3 | 4,416 | | Other taxes payable | 536 | 751 | | **Total** | **45,646** | **57,212** | Ageing Analysis of Trade Payables (by invoice date) | Ageing | 2024 (HK$ thousand) | 2023 (HK$ thousand) | | :--- | :--- | :--- | | 0 to 60 days | 4,424 | 2,208 | | 61 to 90 days | 197 | 8,692 | | 91 to 180 days | 254 | 2,474 | | 181 to 365 days | 449 | 1,244 | | Over 365 days | 8,490 | 3,568 | | **Total** | **13,814** | **18,186** | Management Discussion and Analysis [Business Review](index=19&type=section&id=Business%20Review) The Group is a leading provider of smart building and home products and integrated automatic control system solutions, with applications across various industries; in FY2024, the control systems business saw revenue growth and profitability, building intelligence maintained stable revenue and turned profitable, while the data center business experienced revenue decline and expanded losses - The Group is a leading provider of smart building and home products and integrated automatic control system solutions, with products widely used in high-rise buildings, high-end villas, and smart communities[48](index=48&type=chunk) - Principal businesses include the design, development, and sale of automatic control systems and solutions; the design, R&D, production, and sale of smart systems; and leasing, hosting, and other related services for advanced technologies such as computer equipment, IT infrastructure, and robots[49](index=49&type=chunk) [Control Systems Business](index=19&type=section&id=Control%20Systems%20Business) The control systems business provides automatic control systems and solutions widely used in power, petrochemical, and utility industries; in FY2024, external revenue grew to HK$38.0 million, and the segment recorded a profit of HK$0.5 million, reversing last year's loss - External revenue for the control systems business increased to **HK$38.0 million** in FY2024 (2023: HK$34.0 million)[50](index=50&type=chunk) - The control systems segment recorded a segment profit of **HK$0.5 million** in FY2024, compared to a loss of **HK$2.4 million** in FY2023[50](index=50&type=chunk) [Building Intelligence Business](index=19&type=section&id=Building%20Intelligence%20Business) The building intelligence business primarily supplies visual intercom systems, security alarm solutions, and smart home devices to large real estate developers; in FY2024, external revenue remained stable at HK$24.3 million, and the segment recorded a profit of HK$3.6 million, mainly due to sales of high-margin products - External revenue for the building intelligence business was **HK$24.3 million** in FY2024 (2023: HK$25.8 million), remaining stable[52](index=52&type=chunk) - The building intelligence segment recorded a segment profit of **HK$3.6 million** for the year, compared to a segment loss of **HK$13.7 million** in the prior year, primarily due to the sale of more high-margin products[52](index=52&type=chunk) [Data Center Business](index=20&type=section&id=Data%20Center%20Business) The data center business offers leasing and maintenance services for computer equipment, IT infrastructure, and robots; in FY2024, total revenue decreased to HK$0.2 million, and the segment loss expanded to HK$11.7 million, mainly due to impairment of property, plant and equipment - Total revenue for the data center business was **HK$0.2 million** in FY2024 (2023: HK$0.8 million)[53](index=53&type=chunk) - The data center segment recorded a segment loss of **HK$11.7 million** in FY2024 (2023: loss of HK$3.5 million), primarily due to an impairment of property, plant and equipment of **HK$4.7 million**[53](index=53&type=chunk) [Investment in an Associate Engaged in Charging Station Leasing Business](index=20&type=section&id=Investment%20in%20an%20Associate%20Engaged%20in%20Charging%20Station%20Leasing%20Business) The Group invested in Iogo Workshop Investment Limited in 2020, holding a 20% equity stake; in FY2024, 5% of the equity was sold for a gain of HK$1.5 million, with the remaining 15% classified as financial assets at fair value through profit or loss, and the Group recognized a share of loss from the associate of HK$2.6 million for the year - The Group acquired a **20% equity stake** in associate Iogo Workshop Investment Limited for **HK$56 million** in 2020[54](index=54&type=chunk) - In FY2024, **5% of Iogo Workshop Investment Limited's equity** was sold for a gain of **HK$1.5 million**, with the remaining **15% stake** classified as financial assets at fair value through profit or loss[54](index=54&type=chunk) - A share of loss from the associate of **HK$2.6 million** was recognized for the year (2023: HK$2.9 million)[55](index=55&type=chunk) [Business Outlook for the Group's Principal Businesses](index=21&type=section&id=Business%20Outlook%20for%20the%20Group%27s%20Principal%20Businesses) Facing challenges in the Chinese market and US-China tensions, the Group achieved profitability in its building intelligence and control systems segments through cost-saving measures, and will continue to focus on 5G technology, IoT, and smart home markets while seeking new business opportunities to diversify revenue streams - The Chinese market is affected by inflation, high interest rates, and US-China tensions, leading to a weak economic recovery[56](index=56&type=chunk) - The Board believes that the growth of **5G technology**, IoT, and smart home markets will ensure demand for building intelligence products[56](index=56&type=chunk) - Effective cost-saving measures implemented during the year resulted in segment profits for both the building intelligence and control systems segments[56](index=56&type=chunk) - The Group will continue to prudently control costs, identify potential business opportunities to diversify revenue sources, and leverage business opportunities arising from **5G technology** and related products[57](index=57&type=chunk) [Future Fundraising and Investment Opportunities](index=21&type=section&id=Future%20Fundraising%20and%20Investment%20Opportunities) The Company will continuously explore new investment or M&A opportunities to expand or diversify its businesses and evaluate potential fundraising options, including issuing new shares or convertible securities, to support existing operations and future development - The company will explore new business, investment, or M&A opportunities to expand or diversify its businesses[58](index=58&type=chunk) - The company will identify and evaluate potential fundraising opportunities, possibly including the issuance of new shares or convertible securities[58](index=58&type=chunk) [The Group's Loan Transactions](index=22&type=section&id=The%20Group%27s%20Loan%20Transactions) As of March 31, 2024, the Group had two outstanding loan receivables with zero net book value, Debtor 1 and Debtor 2, both fully provided for due to long-term overdue status and doubtful recoverability; the Group maintains internal control policies and credit assessment procedures before granting loans and continues to pursue recovery actions Overview of Outstanding Loan Receivables (as of March 31, 2024) | Borrower | Principal Amount (HK$ thousand) | Interest Rate | Term | Collateral | Outstanding Amount (HK$ thousand) | Loss Allowance (HK$ thousand) | Carrying Amount (HK$ thousand) | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | Debtor 1 | 13,000 | 8% per annum | One month | Mineral inventory assets and personal guarantee | 10,087 | (10,087) | – | | Debtor 2 | 13,000 (maximum revolving facility) | Interest-free | Repayable on demand | Factory production equipment and machinery | 11,134 | (11,134) | – | | **Total** | | | | | **21,221** | **(21,221)** | **–** | - All loan transactions are not part of the Group's ordinary course of business, and all applicable size test percentage ratios under the Listing Rules are below **5%**[61](index=61&type=chunk) [Regarding Debtor 1](index=23&type=section&id=Regarding%20Debtor%201) Debtor 1, a trading and investment company, received a HK$13 million short-term bridging loan from the Group in 2020 at an 8% annual interest rate; due to long-term repayment delays and doubtful recoverability, the Group has fully provided for the outstanding HK$10.1 million - A **HK$13 million** short-term bridging loan was granted to Debtor 1 on April 29, 2020, at an **8% annual interest rate**, initially unsecured, later secured by mineral inventory assets as additional collateral[63](index=63&type=chunk) - As of March 31, 2024, the outstanding amount is approximately **HK$10.1 million**, fully provided for due to doubtful recoverability[63](index=63&type=chunk)[64](index=64&type=chunk) [Regarding Debtor 2](index=24&type=section&id=Regarding%20Debtor%202) Debtor 2, a mask manufacturing company, was granted a revolving facility of up to HK$13 million by the Group in 2020 for potential investment collaboration; due to repayment delays and doubtful recoverability, the Group has fully provided for the outstanding HK$11.1 million - A revolving facility of up to **HK$13 million** was granted to Debtor 2 on May 22, 2020, interest-free, for potential investment in a mask factory[66](index=66&type=chunk)[67](index=67&type=chunk) - As of March 31, 2024, the outstanding amount is approximately **HK$11.1 million**, fully provided for due to doubtful recoverability[67](index=67&type=chunk)[68](index=68&type=chunk) [Internal Control System and Credit Assessment Before Granting Loans](index=25&type=section&id=Internal%20Control%20System%20and%20Credit%20Assessment%20Before%20Granting%20Loans) While not a registered money lender, the Company maintains an internal control system and conducts credit assessments, including borrower identification, financial review, and bankruptcy/liquidation searches; loan approvals are determined on a case-by-case basis, considering credit risk, market interest rates, and potential business relationships, with size and connected transaction tests performed to ensure Listing Rules compliance - The company maintains an internal control system and conducts credit assessments, including identity verification, financial statement review, and searches[70](index=70&type=chunk)[71](index=71&type=chunk) - Loan terms consider borrower credit risk, recoverability, market interest rates, and potential business relationships[74](index=74&type=chunk) - The Group conducts size tests and connected transaction tests to comply with the Listing Rules[74](index=74&type=chunk) [Actions Taken to Recover Outstanding Loan Receivables](index=27&type=section&id=Actions%20Taken%20to%20Recover%20Outstanding%20Loan%20Receivables) The Company continuously issues demand letters and reminders to debtors, seeks legal advice, requests collateral such as personal guarantees and asset pledges, and negotiates repayment schedules to achieve legally binding debt settlement arrangements, with ongoing monitoring of repayment status and legal action as necessary - The company continuously issues demand letters and reminders to debtors, and seeks legal advice[77](index=77&type=chunk) - Collateral such as personal guarantees and asset pledges has been requested from borrowers, and repayment schedules are being negotiated[77](index=77&type=chunk) - Repayment status will be continuously monitored, and legal action will be taken if necessary[78](index=78&type=chunk) [Financial Review](index=27&type=section&id=Financial%20Review) In FY2024, the Group's revenue slightly increased, sales costs significantly decreased, and gross profit and gross margin substantially improved; other income declined due to reduced government subsidies, but net other gains surged from the disposal of subsidiaries and an associate, while administrative expenses and finance costs both decreased, leading to a significant narrowing of the loss for the year [Revenue](index=27&type=section&id=Revenue%20(Financial%20Review)) The Group's revenue for FY2024 was approximately HK$62.6 million, a 3.5% year-on-year increase, primarily driven by increased market demand in the control systems segment - FY2024 revenue was approximately **HK$62.6 million**, a **3.5% increase** year-on-year[79](index=79&type=chunk)[81](index=81&type=chunk) - Revenue growth was primarily due to increased market demand in the control systems segment[81](index=81&type=chunk) [Cost of Sales](index=28&type=section&id=Cost%20of%20Sales) Cost of sales for FY2024 was approximately HK$37.8 million, a 26.7% year-on-year decrease, mainly because some R&D costs for new products were recognized as R&D expenses in the previous year - FY2024 cost of sales was approximately **HK$37.8 million**, a **26.7% decrease** year-on-year[82](index=82&type=chunk) - The decrease in cost of sales was primarily due to some R&D costs for new products being recorded under R&D expenses in the prior year[82](index=82&type=chunk) [Gross Profit and Gross Margin](index=28&type=section&id=Gross%20Profit%20and%20Gross%20Margin) Gross profit for FY2024 was approximately HK$24.8 million, a 178.7% year-on-year increase, with the gross margin rising to 39.6%, primarily attributable to the sale of high-margin new products - FY2024 gross profit was approximately **HK$24.8 million**, a **178.7% increase** year-on-year[83](index=83&type=chunk) - Gross margin increased to **39.6%** (FY2023: 14.8%), primarily due to the launch of high-margin new products[83](index=83&type=chunk) [Other Income](index=28&type=section&id=Other%20Income%20(Financial%20Review)) Other income for FY2024 decreased to approximately HK$2.2 million, mainly due to a reduction in government subsidies of approximately HK$1.3 million - FY2024 other income decreased to approximately **HK$2.2 million** (2023: HK$3.6 million)[84](index=84&type=chunk) - Primarily due to a reduction in government subsidies of approximately **HK$1.3 million**[84](index=84&type=chunk) [Net Other Gains](index=28&type=section&id=Net%20Other%20Gains%20(Financial%20Review)) Net other gains for FY2024 increased to approximately HK$4.8 million, primarily benefiting from gains of approximately HK$3.0 million and HK$1.5 million from the disposal of a subsidiary and an associate, respectively - FY2024 net other gains increased to approximately **HK$4.8 million** (2023: HK$1.8 million)[85](index=85&type=chunk) - Primarily due to a gain on disposal of a subsidiary of approximately **HK$3.0 million** and a gain on disposal of an associate of approximately **HK$1.5 million**[85](index=85&type=chunk) [Selling and Distribution Expenses](index=28&type=section&id=Selling%20and%20Distribution%20Expenses) Selling and distribution expenses for FY2024 decreased to approximately HK$1.4 million, a 36.4% year-on-year decline, consistent with reduced sales in the building intelligence segment - FY2024 selling and distribution expenses decreased to approximately **HK$1.4 million** (2023: HK$2.2 million), a **36.4% decrease** year-on-year[86](index=86&type=chunk) - The decrease is consistent with reduced sales in the building intelligence segment[86](index=86&type=chunk) [Administrative and Other Operating Expenses](index=29&type=section&id=Administrative%20and%20Other%20Operating%20Expenses) Administrative and other operating expenses for FY2024 decreased to approximately HK$27.5 million, primarily due to lower staff costs - FY2024 administrative and other operating expenses decreased to approximately **HK$27.5 million** (2023: HK$36.8 million)[88](index=88&type=chunk) - Primarily due to lower staff costs[88](index=88&type=chunk) [Net Provision for Expected Credit Losses](index=29&type=section&id=Net%20Provision%20for%20Expected%20Credit%20Losses) Net provision for expected credit losses for FY2024 was HK$7.5 million, slightly higher than the previous year, with provisions mainly targeting trade receivables, loan receivables, and other receivables - FY2024 net provision for expected credit losses was **HK$7.5 million** (2023: HK$7.3 million)[89](index=89&type=chunk) - Provisions primarily target trade receivables (**HK$26.2 million**) and loan and other receivables (**HK$19.9 million**)[89](index=89&type=chunk) [Finance Costs](index=29&type=section&id=Finance%20Costs) Finance costs for FY2024 were approximately HK$3.3 million, a 13.2% year-on-year decrease, mainly due to a reduction in the effective interest rate on bank borrowings - FY2024 finance costs were approximately **HK$3.3 million**, a **13.2% decrease** year-on-year[90](index=90&type=chunk) - Primarily due to a reduction in the effective interest rate on bank borrowings[90](index=90&type=chunk) [Loss for the Year](index=30&type=section&id=Loss%20for%20the%20Year) Loss attributable to owners of the Company for FY2024 significantly decreased by 56.6% to approximately HK$17.8 million, primarily due to increased gross profit and net other gains - FY2024 loss attributable to owners of the Company was approximately **HK$17.8 million**, a significant **56.6% decrease** year-on-year[92](index=92&type=chunk) - Primarily due to an increase in gross profit of approximately **HK$15.9 million** and an increase in net other gains of approximately **HK$3.0 million**[92](index=92&type=chunk) [Capital Structure, Liquidity and Financial Resources](index=30&type=section&id=Capital%20Structure%2C%20Liquidity%20and%20Financial%20Resources) The Group primarily meets its working capital needs through operating cash, bank borrowings, and shareholder contributions; in FY2024, the Company successfully raised funds through three placing exercises, significantly improving its current ratio and gearing ratio, thereby enhancing financial flexibility - The Group's working capital is primarily sourced from operating cash, bank borrowings, and shareholder contributions[93](index=93&type=chunk) - As of March 31, 2024, issued share capital was approximately **HK$36.0 million** (2023: HK$26.0 million)[93](index=93&type=chunk) - Net proceeds of approximately **HK$12.1 million** from the 2022 placing were fully utilized for general working capital and investment opportunities[96](index=96&type=chunk)[97](index=97&type=chunk) - Net proceeds of approximately **HK$14.7 million** from the 2023 placing were fully utilized for general working capital and investment opportunities[99](index=99&type=chunk)[101](index=101&type=chunk) - Net proceeds of approximately **HK$23.8 million** from the 2024 placing remained unutilized during the year, intended for general working capital and investment opportunities[103](index=103&type=chunk) Liquidity and Solvency Ratios | Indicator | March 31, 2024 | March 31, 2023 | | :--- | :--- | :--- | | Current Ratio | Approx. 1.3 | Approx. 0.7 | | Gearing Ratio | 15% | 96% | [Bank Borrowings](index=33&type=section&id=Bank%20Borrowings) As of March 31, 2024, the Group's outstanding bank borrowings amounted to approximately HK$50.7 million, a decrease from the previous year - As of March 31, 2024, outstanding bank borrowings were approximately **HK$50.7 million** (2023: HK$62.8 million)[105](index=105&type=chunk) [Pledged Assets](index=33&type=section&id=Pledged%20Assets) As of March 31, 2024, the Group's land use rights, property, plant and equipment with a total carrying amount of approximately HK$28.2 million were pledged for bank borrowings - As of March 31, 2024, land use rights, property, plant and equipment with a total carrying amount of approximately **HK$28.2 million** were pledged to secure bank borrowings[106](index=106&type=chunk) [Contingent Liabilities](index=33&type=section&id=Contingent%20Liabilities) As of March 31, 2024, the Group had no significant contingent liabilities - As of March 31, 2024, the Group had no significant contingent liabilities[107](index=107&type=chunk) [Significant Acquisitions and Disposals](index=33&type=section&id=Significant%20Acquisitions%20and%20Disposals) During the year, the Group completed several significant transactions, including the disposal of a portion of MOX Group Limited's equity, the full disposal of interests in Global Clean Energy Investment Limited, and the disposal of all equity and shareholder loans in Hong Kong Blockchain Development Marketing Limited and Hong Kong Blockchain Development Company Limited - On July 24, 2023, MOX Group Limited completed a placing, reducing the Group's shareholding from **100% to 66.67%**[108](index=108&type=chunk) - On September 11, 2023, all interests in Global Clean Energy Investment Limited and its subsidiaries were disposed of for **HK$1**[109](index=109&type=chunk) - On October 31, 2023, all equity and shareholder loans in Hong Kong Blockchain Development Marketing Limited and Hong Kong Blockchain Development Company Limited were disposed of[109](index=109&type=chunk) [Significant Capital Expenditure for the Year](index=34&type=section&id=Significant%20Capital%20Expenditure%20for%20the%20Year) Except as otherwise disclosed in this announcement, the Group had no significant capital expenditure commitments as of March 31, 2024 - As of March 31, 2024, the Group had no significant capital expenditure commitments[111](index=111&type=chunk) [Exchange Rate Fluctuation Risk](index=34&type=section&id=Exchange%20Rate%20Fluctuation%20Risk) The Group's transactions and bank deposits are primarily denominated in RMB and HKD, effectively mitigating foreign currency exchange risk; despite RMB exchange rate fluctuations against HKD, the Directors do not anticipate a material adverse impact on operations and thus have not implemented a formal hedging policy - The Group's transactions and bank deposits are primarily denominated in RMB and HKD, reducing foreign currency exchange risk[112](index=112&type=chunk) - The Directors do not expect RMB exchange rate fluctuations to have a material adverse impact on operations and have not implemented a formal hedging policy[112](index=112&type=chunk) [Employees and Remuneration Policy](index=34&type=section&id=Employees%20and%20Remuneration%20Policy) As of March 31, 2024, the Group had 85 employees, with staff costs decreasing by 6.1% year-on-year; remuneration policy is based on individual performance, experience, and industry practice, reviewed annually, and the Company adopted a new share option scheme in 2022, granting 25,043,200 share options in April 2024 to incentivize employees - As of March 31, 2024, the Group had **85 employees** (2023: 115 employees)[113](index=113&type=chunk) - FY2024 staff costs were approximately **HK$18.4 million**, a **6.1% decrease** year-on-year, primarily due to a reduction in employee numbers[113](index=113&type=chunk) - Remuneration policy is determined based on individual performance, experience, and industry practice, and is reviewed annually[115](index=115&type=chunk) - A new share option scheme was adopted in 2022, and **25,043,200 share options** were granted on April 27, 2024, to incentivize employees[115](index=115&type=chunk)[116](index=116&type=chunk)[117](index=117&type=chunk) Events After the Reporting Period [Grant of Share Options](index=35&type=section&id=Grant%20of%20Share%20Options) On April 27, 2024, the Company granted a total of 25,043,200 share options to executive directors and certain employees under the share option scheme, with an exercise price of HK$0.49 and a five-year validity period - On April 27, 2024, a total of **25,043,200 share options** were granted with an exercise price of **HK$0.49**[117](index=117&type=chunk) - The share options have a validity and vesting period of **five years**, from April 26, 2024, to April 25, 2029[117](index=117&type=chunk) - Of these, **3,596,800 options** were granted to Mr. You Yiyang, an executive director, with the remainder granted to six employees[118](index=118&type=chunk) [Appointment of Non-Executive Director](index=36&type=section&id=Appointment%20of%20Non-Executive%20Director) On May 29, 2024, Ms. Mo Yina was appointed as a non-executive director of the Company and will retire and be eligible for re-election at the next annual general meeting - On May 29, 2024, Ms. Mo Yina was appointed as a non-executive director of the Company[120](index=120&type=chunk) Other Information [Dividends](index=36&type=section&id=Dividends%20(Other%20Information)) The Board does not recommend the declaration of any dividend for the year ended March 31, 2024 - The Board does not recommend the declaration of any dividend for FY2024[122](index=122&type=chunk) [Closure of Register of Members](index=36&type=section&id=Closure%20of%20Register%20of%20Members) To determine eligibility to attend and vote at the 2024 Annual General Meeting, the Company will suspend its share transfer registration from August 26 to August 29, 2024, with all share transfer documents required to be lodged by 4:30 p.m. on August 23, 2024 - Share transfer registration will be suspended from **August 26 to August 29, 2024**[123](index=123&type=chunk) - All share transfer documents must be lodged by **4:30 p.m. on August 23, 2024**[123](index=123&type=chunk) [Purchase, Redemption or Sale of the Company's Listed Securities](index=36&type=section&id=Purchase%2C%20Redemption%20or%20Sale%20of%20the%20Company%27s%20Listed%20Securities) For the year ended March 31, 2024, neither the Company nor any of its subsidiaries purchased, sold, or redeemed any of the Company's listed securities - In FY2024, neither the Company nor its subsidiaries purchased, sold, or redeemed any of the Company's listed securities[124](index=124&type=chunk) [Corporate Governance Practices](index=36&type=section&id=Corporate%20Governance%20Practices) The Company has adopted the Corporate Governance Code set out in Appendix 14 of the Listing Rules and complied with all applicable code provisions in FY2024, except for Code Provision C.2 (Chairman vacancy) and F.2.2 (Chairman attendance at AGM) - The company has adopted the Corporate Governance Code set out in Appendix 14 of the Listing Rules[125](index=125&type=chunk) - All applicable code provisions were complied with in FY2024, except for Code Provisions C.2 and F.2.2[125](index=125&type=chunk) [Code Provision C.2 of the Corporate Governance Code](index=37&type=section&id=Code%20Provision%20C.2%20of%20the%20Corporate%20Governance%20Code) The Company has not complied with Code Provision C.2 as the Chairman position has been vacant since January 3, 2020; currently, the Chairman's role is jointly performed by Board members, and the Company is seeking a suitable candidate to fill the vacancy - The position of Chairman of the Board has been vacant since **January 3, 2020**, failing to comply with Code Provision C.2[127](index=127&type=chunk) - The Chairman's role is jointly performed by Board members, and the company is seeking a suitable candidate[127](index=127&type=chunk) [Code Provision F.2.2 of the Corporate Governance Code](index=37&type=section&id=Code%20Provision%20F.2.2%20of%20the%20Corporate%20Governance%20Code) As the Chairman position was vacant on the day of the 2023 Annual General Meeting, Mr. Han Weining (Executive Director and CEO) was appointed as Chairman to address shareholder questions, aligning with the spirit of the Code - On the day of the 2023 Annual General Meeting, with the Chairman position vacant, Mr. Han Weining (Executive Director and Chief Executive Officer) was appointed as Chairman[128](index=128&type=chunk) - The Directors believe Mr. Han Weining has sufficient understanding of the Group's business to serve as Chairman of the meeting[128](index=128&type=chunk) [Compliance with the Model Code for Securities Transactions by Directors](index=37&type=section&id=Compliance%20with%20the%20Model%20Code%20for%20Securities%20Transactions%20by%20Directors) Following specific inquiries, all Directors confirmed compliance with the Model Code set out in Appendix 10 of the Listing Rules for the year ended March 31, 2024 - All Directors confirmed compliance with the Model Code in FY2024[129](index=129&type=chunk) [Audit Committee](index=38&type=section&id=Audit%20Committee) The Audit Committee, comprising three independent non-executive directors, has reviewed the Company's consolidated financial statements for FY2024 and concluded that all applicable accounting standards and requirements have been complied with, and adequate disclosures have been made - The Audit Committee comprises three independent non-executive directors, with Mr. Lam Ying Hung as Chairman[130](index=130&type=chunk) - The Audit Committee has reviewed the FY2024 consolidated financial statements and believes that accounting standards have been complied with and adequate disclosures made[130](index=130&type=chunk) [Publication of Annual Results Announcement and Annual Report](index=38&type=section&id=Publication%20of%20Annual%20Results%20Announcement%20and%20Annual%20Report) This annual results announcement has been published on the HKEX website and the Company's website; the FY2024 annual report will be dispatched to shareholders and published on the aforementioned websites in due course - The annual results announcement has been published on the HKEX website (www.hkexnews.hk) and the Company's website (www.synertone.net)[131](index=131&type=chunk) - The FY2024 annual report will be dispatched to shareholders and published on the aforementioned websites in due course[131](index=131&type=chunk)

Financial Performance - Revenue for the six months ended September 30, 2023, was HKD 17,126,000, a decrease of 11.3% from HKD 19,312,000 in the same period of 2022[5] - Gross profit increased to HKD 6,443,000, up 104.3% from HKD 3,147,000 year-on-year[5] - Operating loss for the period was HKD 8,018,000, compared to a loss of HKD 6,598,000 in the previous year, reflecting a deterioration of 21.5%[5] - Net loss attributable to owners of the company was HKD 8,801,000, compared to HKD 8,076,000 in the same period last year, indicating a 9.0% increase in losses[6] - The company reported a basic and diluted loss per share of HKD 3.04, slightly improved from HKD 3.22 in the previous year[6] - The company reported a net loss of approximately 9,815 thousand HKD for the six months ended September 30, 2023[20] - For the six months ended September 30, 2023, the total revenue from external customers was HKD 17,126,000, a decrease from HKD 19,312,000 for the same period in 2022, representing a decline of approximately 11.3%[33] - The company reported a pre-tax loss of HKD 1,722,000 for the six months ended September 30, 2023, compared to HKD 1,981,000 in the same period of 2022[45] - The company reported a net exchange gain of HKD 29,000 for the period, down from HKD 72,000 in the previous year[41] - The total comprehensive loss for the six months ended September 30, 2023, was HKD 1,313,000, a significant reduction from HKD 4,077,000 in the prior year, reflecting an improvement of approximately 67.7%[61] Assets and Liabilities - Total assets less current liabilities increased to HKD 101,061,000 from HKD 70,010,000, representing a growth of 44.4%[9] - Cash and cash equivalents rose significantly to HKD 12,821,000 from HKD 2,345,000, marking a substantial increase of 447.5%[8] - Non-current liabilities decreased to HKD 215,000 from HKD 1,641,000, showing a reduction of 87.9%[9] - The company’s equity attributable to owners increased to HKD 98,878,000 from HKD 69,126,000, reflecting a growth of 42.9%[9] - The total assets of the company stood at 843,126 thousand HKD, indicating a stable financial position[10] - Total liabilities as of September 30, 2023, were HKD 120,645,000, down from HKD 157,654,000 as of March 31, 2023[37] - The company reduced its bank borrowings to approximately HKD 56.5 million as of September 30, 2023, compared to HKD 62.8 million on March 31, 2023[133] Cash Flow and Financing - For the six months ended September 30, 2023, the net cash used in operating activities was approximately (22,833) thousand HKD, compared to (6,148) thousand HKD for the same period in 2022[12] - The net cash generated from financing activities was 35,402 thousand HKD, a significant increase from (8,655) thousand HKD in the previous year[12] - The net increase in cash and cash equivalents for the six months ended September 30, 2023, was 11,069 thousand HKD, compared to 2,289 thousand HKD in 2022[13] - The company plans to implement cost control measures and expedite the collection of receivables to achieve positive cash flow from operations[21] - The board has considered various financing options, including shareholder loans and bank borrowings, to improve liquidity[21] - The company has taken steps to negotiate debt compromise plans with creditors to alleviate liquidity issues[21] - The company is exploring potential mergers and acquisitions to enhance its product offerings and market share, with a budget of 100,846 thousand HKD allocated for this purpose[10] Business Strategy and Market Expansion - The company plans to focus on expanding its market presence and enhancing its product offerings in the upcoming quarters[5] - The company plans to expand its market presence by entering two new regions by the end of 2024, targeting a revenue increase of 20% from these markets[10] - The company is actively seeking business and investment opportunities to enhance long-term growth potential[21] - The company is exploring new business and investment opportunities to expand or diversify its operations for long-term benefits[109] Segment Performance - Revenue from the "Building Intelligence" segment was HKD 6,057,000, while the "Control Systems" segment generated HKD 13,560,000, and the "Data Center" segment contributed HKD 123,000[33] - Revenue from the Building Intelligence segment was HKD 4,347,000, up 9.3% from HKD 3,975,000 year-on-year[38] - Revenue from the Control Systems segment was HKD 12,656,000, down 13.7% from HKD 14,666,000 in the previous year[38] - The control systems segment recorded an increase in operating profit to HKD 2.9 million, compared to HKD 1.3 million in the same period last year[96] - The "MOX" brand's revenue increased to HKD 4.3 million during the period, up from HKD 4.0 million in the previous period, resulting in a reduction of segment loss from HKD 3.4 million to HKD 1.9 million[99] Employee and Management - Employee costs increased to HKD 10,595,000 from HKD 9,484,000 year-on-year, reflecting a rise in salaries and benefits[45] - The total remuneration for directors and key management personnel for the six months ended September 30, 2023, was HKD 2,419,000, an increase from HKD 1,690,000 in the previous year[88] - The company conducts annual reviews of employee compensation policies, including performance-linked bonuses[144] - The company invests in continuous education and training programs for employees to enhance their skills and knowledge[145] Corporate Governance - The company has adopted the Corporate Governance Code and believes it has complied with all applicable provisions, except for specific clauses due to the chairman position being vacant since January 3, 2020[159][160] - The company is actively seeking a suitable candidate to fill the vacant chairman position[160] - The audit committee reviewed the unaudited consolidated financial statements for the six months ended September 30, 2023, and confirmed compliance with applicable accounting standards[165] - There were changes in the board of directors, with two directors not re-elected and one resigning to focus on personal business[157][158] Share Capital and Securities - The company has a total issued share capital of 300,313,000 shares as of September 30, 2023, with a par value of HKD 0.1 per share[82] - The company issued 40,000,000 new shares at a subscription price of HKD 0.375 per share, raising a net amount of HKD 14.7 million for general working capital and further investments[16] - The company completed a placement of 40,000,000 shares at a price of HKD 0.375 per share, representing a discount of approximately 14.77% from the market price of HKD 0.44 on the agreement date[128] - The stock ownership of Excel Time, a company controlled by the co-CEO, amounts to 54,227,451 shares, representing 18.06% of the total issued shares[149]

香港交易及結算所有限公司及香港聯合交易所有限公司對本公告之內容概不負 責,對 其 準 確 性 或 完 整 性 亦 不 發 表 任 何 聲 明,並 明 確 表 示 概 不 就 因 本 公 告 全 部 或任何部分內容而產生或因倚賴該等內容而引致之任何損失承擔任何責任。 協同通信集團有限公司 Synertone Communication Corporation (於開曼群島註冊成立之有限公司) (股份代號:1613) 截至二零二三年九月三十日止六個月 中期業績公告 協 同 通 信 集 團 有 限 公 司(「本公司」,連 同 其 附 屬 公 司,統 稱「本集團」)董 事(「董 事」) 會(「董事會」)公 佈 本 集 團 截 至 二 零 二 三 年 九 月 三 十 日 止 六 個 月 的 未 經 審 核 簡 明 綜 合 中 期 業 績,連 同 二 零 二 二 年 同 期 的 未 經 審 核 比 較 數 字。此 等 中 期 財 務 業 績 未經審核,但已由本公司審核委員會審閱。 簡明綜合損益及其他全面收益表 截至二零二三年九月三十日止六個月 | | | 截至九月三十日止 | | |------------------- ...

Financial Performance - The company's revenue decreased from approximately HKD 114.2 million in the fiscal year ending March 31, 2022, to approximately HKD 60.5 million in the fiscal year ending March 31, 2023, representing a decline of 47.0%[7] - Gross profit fell from approximately HKD 22.9 million in the fiscal year ending March 31, 2022, to approximately HKD 8.9 million in the fiscal year ending March 31, 2023, with a gross margin decrease from 20.1% to 14.8%[7] - The net loss attributable to shareholders decreased from approximately HKD 109.7 million in the fiscal year ending March 31, 2022, to approximately HKD 41.0 million in the fiscal year ending March 31, 2023, a reduction of 62.6%[7] - The company recorded revenue of approximately HKD 60.5 million for the year, a decrease of about HKD 53.7 million or 47.0% compared to the previous year's revenue of approximately HKD 114.2 million[50] - The decrease in revenue was primarily due to the lockdowns in China during the fiscal year 2023, which halted production activities in the Control Systems and Building Intelligence businesses, particularly in the East China region[50] - The company's cost of sales decreased to approximately HKD 51.6 million, a reduction of about HKD 39.6 million or 43.4% from approximately HKD 91.2 million in the previous fiscal year[52] - Gross profit for the fiscal year 2023 was approximately HKD 8.9 million, down about HKD 14.0 million or 61.1% from approximately HKD 22.9 million in the previous fiscal year, with a gross margin of 14.8% compared to 20.1% in fiscal year 2022[53] Cash Flow and Financial Position - Operating cash flow for the fiscal year ending March 31, 2023, was a net cash outflow of HKD 2.716 million, an improvement compared to HKD 7.702 million in the previous year[6] - The company's current ratio decreased to 0.7 in the fiscal year ending March 31, 2023, down from 0.8 in the previous year[6] - Capital expenditures for the fiscal year ending March 31, 2023, were HKD 223 thousand, a significant decrease from HKD 10.702 million in the previous year[6] - The debt-to-equity ratio as of March 31, 2023, was 96%, significantly up from 70% in 2022[75] - The company had outstanding bank borrowings of approximately HKD 62.8 million as of March 31, 2023, down from HKD 72.3 million in 2022[76] Business Segments and Operations - The company's control systems and building intelligence business recorded revenues of HKD 34.0 million and HKD 25.8 million, respectively, for the fiscal year ending March 31, 2023[10] - The control systems division reported external revenue of HKD 34.0 million for the fiscal year 2023, down from HKD 47.3 million in the previous year, reflecting a significant impact from COVID-19 lockdowns[17] - The building intelligence division experienced a decline in external revenue from HKD 60.4 million to HKD 25.8 million due to production halts and rising component costs, resulting in an operating loss of HKD 13.7 million[20] - The data center business incurred a total revenue of HKD 0.8 million in fiscal year 2023, a decrease from HKD 6.5 million in the previous year, leading to a division loss of HKD 3.5 million[22] - Revenue breakdown by business segment for the year includes: Building Intelligence at HKD 25.8 million (42.6%), Control Systems at HKD 34.0 million (56.1%), and Data Centers at HKD 0.8 million (1.3%) [50] Future Outlook and Strategic Initiatives - The company expects performance to improve in the next fiscal year due to the easing of COVID-19 restrictions in China[10] - The company is actively seeking new investment opportunities in the virtual asset trading platform sector to capitalize on emerging market trends[11] - The company aims to improve its financial performance and operational efficiency through the development of new technologies and services in the data center sector[21] - The company is considering restructuring plans for its building intelligence business to improve returns, including asset sales and business reorganization[27] - The company is expanding into virtual asset-related activities through a joint venture, Jade Power, which will operate VATP in Hong Kong[172] Share Capital and Fundraising - The company completed the first placement on January 25, 2022, issuing 58,000,000 shares at a price of HKD 0.25 per share, representing approximately 4.63% of the enlarged issued share capital post-placement[71] - The net proceeds from the first placement amounted to approximately HKD 14.2 million, with a net price per share of about HKD 0.245, intended for general working capital and future investments[71] - The company completed the second placement on October 3, 2022, issuing 49,200,000 shares at a price of HKD 0.25 per share, representing approximately 3.78% of the enlarged issued share capital post-placement[74] - The net proceeds from the second placement were approximately HKD 12.1 million, with a net price per share of about HKD 0.246, also intended for general working capital and future investments[74] - The company completed a new share placement on May 19, 2023, issuing 40,000,000 shares at a price of HKD 0.375 per share, which represents approximately 13.32% of the enlarged issued share capital[171] Governance and Management - The company appointed a new executive director and co-CEO, as well as an independent non-executive director, on May 19, 2023[89] - The company has established an audit committee consisting of three independent non-executive directors to review financial statements[178] - The board consists of two executive directors and three independent non-executive directors as of March 31, 2023, with changes noted by the report date[187] - The company has adopted a board diversity policy, currently comprising eight directors, including two females, with no numerical targets set for gender diversity[188] - The company has established mechanisms to ensure independent viewpoints are obtained and reviewed annually[197] Employee and Operational Management - The group has established stable relationships with major suppliers, ensuring that only materials passing quality tests are procured[123] - The company has implemented a new share option plan to incentivize employees, with no unexercised options remaining as of March 31, 2023[84] - Continuous training programs are provided to enhance the skills and knowledge of employees[148] - The employee compensation policy is reviewed annually, considering individual performance, experience, and industry standards[148] Risk Management - The company faces various risks that could significantly impact its business, financial condition, and growth prospects, including market risks related to China[115] - Financial risks include exposure to exchange rates, interest rates, and liquidity[119] - The company has implemented internal control procedures to ensure compliance with local regulations and listing rules[120] - The company has established preventive and emergency measures to mitigate potential operational losses[118] Legal and Compliance - As of March 31, 2023, the company reported no significant legal violations affecting its business operations[128] - The company has complied with all relevant laws and regulations related to health, safety, and environmental standards[126] - The company has not entered into any non-exempt connected transactions or continuing connected transactions under the Listing Rules as of March 31, 2023[165] Dividend Policy - No dividends were recommended for the year ended March 31, 2023[97] - The company is committed to a sustainable dividend policy that balances shareholder expectations with prudent capital management[200] - Dividend declarations will consider multiple factors including overall operational performance, financial condition, and future expansion plans[200]

香港交易及結算所有限公司及香港聯合交易所有限公司對本公告之內容概不負 責,對 其 準 確 性 或 完 整 性 亦 不 發 表 任 何 聲 明,並 明 確 表 示 概 不 就 因 本 公 告 全 部 或任何部分內容而產生或因倚賴該等內容而引致之任何損失承擔任何責任。 協同通信集團有限公司 Synertone Communication Corporation (於開曼群島註冊成立之有限公司) (股份代號:1613) 截至二零二三年三月三十一日止年度全年業績公告 協 同 通 信 集 團 有 限 公 司(「本公司」,連 同 其 附 屬 公 司 統 稱「本集團」)董 事(「董 事」) 會(「董事會」)公 佈 本 集 團 截 至 二 零 二 三 年 三 月 三 十 一 日 止 年 度 的 綜 合 業 績,連 同截至二零二二年同期的比較數字如下: – 1 – 綜合損益及其他全面收益表 截至二零二三年三月三十一日止年度 | | | 二零二三年 | 二零二二年 | |-----------------------------------------------|---------|----------------|----- ...

Financial Performance - Revenue for the six months ended September 30, 2022, was HKD 19,312,000, a decrease of 51.6% compared to HKD 39,950,000 in the same period of 2021[5] - Gross profit for the same period was HKD 3,147,000, down 72.7% from HKD 11,547,000 year-on-year[5] - The company reported a loss of HKD 8,855,000 for the six months, compared to a loss of HKD 9,964,000 in the previous year, indicating a 11.1% improvement[5] - Basic and diluted loss per share was HKD 0.64, compared to HKD 0.75 in the prior year[9] - The total comprehensive loss before tax for the period was HKD 8,851,000[44] - The company incurred a pre-tax loss of HKD 9,955 thousand for the six months ended September 30, 2022[46] - The company reported a net loss of approximately HKD 8,855,000 for the six months ended September 30, 2022[32] - The company's loss attributable to owners decreased by approximately HKD 0.8 million or 9.0% to about HKD 8.1 million, primarily due to reduced overall expenses under stricter cost control[190] Assets and Liabilities - Non-current assets decreased from HKD 142,525,000 as of March 31, 2022, to HKD 128,876,000 as of September 30, 2022, a decline of 9.6%[13] - Current assets also decreased from HKD 128,927,000 to HKD 104,766,000, representing a 18.7% decline[13] - Total liabilities decreased from HKD 163,048,000 to HKD 135,859,000, a reduction of 16.7%[13] - Total assets amounted to HKD 233,642 thousand, down from HKD 271,452 thousand as of March 31, 2022[49] - Total liabilities increased to HKD 136,841 thousand from HKD 166,017 thousand as of March 31, 2022[51] - As of September 30, 2022, total assets minus current liabilities amounted to HKD 97,783,000, down from HKD 108,404,000 in the previous period[17] - The company’s accumulated losses reached HKD 934,669,000, reflecting a decrease of 8,867,000 during the reporting period[19] Cash Flow - The net cash generated from operating activities for the six months ended September 30, 2022, was a loss of HKD 6,148,000, compared to a gain of HKD 3,324,000 in the previous year[23] - The net cash generated from investing activities was HKD 17,092,000, a significant improvement from a cash outflow of HKD 29,594,000 in the prior year[25] - The company reported a net increase in cash and cash equivalents of HKD 2,289,000 for the six months ended September 30, 2022, compared to an increase of HKD 9,739,000 in the previous year[25] - The company had a cash balance of HKD 9,738,000 at the end of the reporting period, down from HKD 13,924,000 a year earlier[25] Segment Performance - Revenue from external customers for the building intelligence segment was HKD 3,975,000, while the control systems segment generated HKD 14,666,000, and the data center segment contributed HKD 671,000, totaling HKD 19,312,000[44] - The adjusted EBIT for the building intelligence segment was a loss of HKD 3,393,000, while the control systems segment achieved a profit of HKD 1,339,000, and the data center segment reported a loss of HKD 1,695,000, resulting in a total adjusted EBIT loss of HKD 3,749,000[44] - The control systems segment's revenue decreased to HKD 14.7 million from HKD 26.4 million compared to the previous period, representing a decline of approximately 44.5%[135] - The building intelligence segment recorded an operating loss of HKD 3.4 million compared to a loss of HKD 5.5 million in the previous period, showing an improvement in loss margin[138] - The data center business generated revenue of HKD 0.7 million but incurred a loss of HKD 1.7 million during the period[141] Cost Management - Research and development expenses for the period were HKD 1,504,000, down 23.9% from HKD 1,975,000 in the previous year[5] - The company has implemented cost control measures and accelerated the collection of receivables to improve cash flow and financial condition[34] - Administrative and other operating expenses decreased by approximately HKD 3.0 million or 16.9% to about HKD 14.8 million due to reduced expenses during the lockdown period in China and stricter cost control measures implemented by the company[185] - Sales and distribution expenses decreased by approximately HKD 1.9 million or 65.5% to about HKD 1.0 million, consistent with the decrease in sales during the period[184] Credit and Receivables - The company recognized a reversal of expected credit loss of HKD 3,058,000, compared to a provision of HKD 1,429,000 in the previous year[5] - The expected credit loss provisions for trade receivables were HKD (748), compared to HKD 864 in the previous year, indicating an improvement[71] - The company maintains internal control policies and conducts credit assessments before granting loans to minimize credit and default risks[167] - The company has a significant overdue receivable balance of HKD 16,881,000 related to the sale of protective masks, which has been fully provided for[107] Future Outlook - The company expects a negative impact on the financial performance of the control systems and building intelligence segments due to ongoing lockdowns, particularly until March 31, 2023[146] - The company believes that if the COVID-19 situation improves, the rental and advertising business of Iogo Workshop will recover and financial performance will gradually improve[145] - The company anticipates stable organic growth in the medium term once the pandemic situation stabilizes and lockdowns are lifted[146] - The company plans to explore new business and investment opportunities, including potential mergers and acquisitions, to diversify and expand its operations for long-term benefits[152]