[Corporate Information](index=4&type=section&id=Corporate%20Information) The report lists core corporate information including executive and independent non-executive directors, committee members, company secretary, compliance officer, authorized representatives, auditor, and principal place of business - The report details core corporate information including executive and independent non-executive directors, members of the Audit, Remuneration, and Nomination Committees, company secretary, compliance officer, authorized representatives, auditor, and principal place of business[8](index=8&type=chunk)[9](index=9&type=chunk)[10](index=10&type=chunk) [Executive Director's Statement](index=6&type=section&id=Executive%20Director%27s%20Statement) Facing a complex environment in China's information system solutions industry, the Group adopted a prudent business development strategy, successfully shifting its focus from system development to operations, with enterprise SMS services contributing approximately **70% of total revenue** while actively expanding front-end and deepening back-end IT businesses - To navigate the challenging operating environment, the Group shifted its business focus from information technology system development to operations, aiming for market expansion with lower capital expenditure and staff costs[15](index=15&type=chunk) - The enterprise SMS service business achieved significant results, with its revenue accounting for approximately **70% of the Group's total revenue** during the reporting period[16](index=16&type=chunk)[19](index=19&type=chunk) - The Group actively expanded its front-end business, commencing distribution of the first batch of children's smartwatches in Beijing in mid-May 2024, with marketing activities planned for schools in the second half of the year[18](index=18&type=chunk)[20](index=20&type=chunk)[24](index=24&type=chunk) - For back-end operations, the Group continues to provide information verification, Artificial Intelligence (AI), and Robotic Process Automation (RPA) services to clients in industries such as securities, finance, and transportation infrastructure[22](index=22&type=chunk) - Looking ahead, the Group plans to increase investment in its SMS service business and consider expanding into other value-added services such as marketing-oriented voice SMS[24](index=24&type=chunk)[26](index=26&type=chunk) [Management Discussion and Analysis](index=8&type=section&id=Management%20Discussion%20and%20Analysis) [Industry Overview](index=8&type=section&id=Industry%20Overview) During the reporting period, China's information system solutions industry faced a complex and severe operating environment due to economic difficulties and US technology sanctions, yet the thriving e-commerce and logistics sectors drove demand for enterprise SMS services, while digital technology integration with the real economy created significant opportunities for AI services - Due to a sluggish Chinese economy and US technology sanctions, domestic internet and tech giants scaled back operations, impacting demand for information technology services[29](index=29&type=chunk)[30](index=30&type=chunk) - The booming e-commerce and logistics sectors drove increased demand for enterprise SMS services; according to the National Bureau of Statistics, China's mobile SMS traffic grew from approximately **1.507 trillion messages in 2019** to about **1.869 trillion messages in 2023**[33](index=33&type=chunk)[37](index=37&type=chunk) - IDC forecasts China's AI market size to reach **USD 14.75 billion in 2023**, projected to grow to **USD 26.44 billion by 2026**, with a compound annual growth rate exceeding **20% from 2021 to 2026**[39](index=39&type=chunk)[41](index=41&type=chunk) [Business Review](index=10&type=section&id=Business%20Review) To counter market volatility, the Group shifted its business focus from system development to operations, with enterprise SMS services becoming the primary revenue source, contributing approximately **70% of total revenue**, while also advancing front-end (children's smartwatches) and back-end (information verification, AI, RPA) businesses, alongside other ventures like electronic component supply and marketing website design - The Group's business focus has shifted from information technology system development to operations, with SMS services accounting for approximately **70% of total revenue** during the reporting period[44](index=44&type=chunk)[49](index=49&type=chunk) - Regarding front-end business, the Group commenced distribution of the first batch of children's smartwatches in Beijing in mid-May 2024, which feature the Group's proprietary software system and bundled telecommunication services[48](index=48&type=chunk)[50](index=50&type=chunk) - For back-end operations, the Group, through its subsidiary Cyber Security, continues to provide information verification services to securities brokers and digital certificate authorities, and is developing a unified digital authentication system for the IT subsidiary of a transportation infrastructure company[52](index=52&type=chunk)[54](index=54&type=chunk)[57](index=57&type=chunk) - The Group, through its subsidiary Shenzhen YBDS, provides Robotic Process Automation (RPA) training and consulting, assisting telecommunication companies in implementing AI customer service[61](index=61&type=chunk) [Prospects](index=14&type=section&id=Prospect) Despite an uncertain industry outlook, the Group will continue its business transformation and diversification, planning increased investment in SMS services and exploring new value-added services like voice SMS in H2 2024, while launching campus marketing for new children's smartwatches, aiming to mitigate macroeconomic impacts and drive long-term growth through a dual-track strategy - The Group is considering increasing investment in its SMS service business in the second half of 2024 to expand operations and revenue, and plans to explore other value-added services such as voice SMS[80](index=80&type=chunk)[84](index=84&type=chunk) - The Group commenced distribution of children's smartwatches in May 2024 and plans to conduct marketing activities in schools during the second half of 2024[81](index=81&type=chunk)[84](index=84&type=chunk) - The Group will continue to operate back-end businesses such as internet electronic identity authentication and AI services to capitalize on opportunities in the digital economy[82](index=82&type=chunk) [Liquidity, Financial Resources and Capital Structure](index=15&type=section&id=Liquidity%2C%20Financial%20Resources%20and%20Capital%20Structure) The report reviews the utilization of proceeds from the 2013 subscription, with approximately **HKD 2.794 million** remaining unutilized as of March 31, 2024, expected to be used for general working capital by end of March 2025, and notes the re-allocation of funds from new potential projects to general working capital during the period Net Proceeds from Subscription Utilization (As of March 31, 2024) | Purpose | Amount Utilized for the Year Ended March 31, 2024 (HKD Thousand) | Unutilized Net Proceeds as of March 31, 2024 (HKD Thousand) | Expected Timeline for Utilization of Unutilized Net Proceeds | | :--- | :--- | :--- | :--- | | New Potential Projects | – | – | – | | General Working Capital | (8,909) | 2,794 | By end of March 2025 | | **Total** | **(8,909)** | **2,794** | | - To optimize financial resource utilization, the company reallocated approximately **HKD 3.428 million** of unutilized net proceeds, originally designated for new potential projects, to general working capital[95](index=95&type=chunk)[96](index=96&type=chunk) [Financial Review](index=17&type=section&id=Financial%20Review) During the reporting period, the Group returned to profitability, with profit attributable to owners of the company at approximately **HKD 6.604 million** compared to a loss of **HKD 10.108 million** last year, despite a **12% year-on-year decrease** in total revenue to **HKD 16.152 million**, driven by new SMS services contributing **HKD 11.247 million** in revenue, while maintaining shareholders' funds of approximately **HKD 11.924 million** and a current ratio of **0.85:1** Financial Performance Summary | Metric | FY2024 (Reporting Period) | FY2023 (Prior Period) | Year-on-Year Change | | :--- | :--- | :--- | :--- | | Revenue | HKD 16.152 million | HKD 18.290 million | -12% | | Profit/(Loss) Attributable to Owners of the Company | HKD 6.604 million | (HKD 10.108 million) | Turnaround to Profit | - Business segment revenue changes: hardware sales revenue decreased by approximately **68% year-on-year**, service revenue decreased by approximately **74% year-on-year**, but the Group recorded SMS service segment revenue of approximately **HKD 11.247 million** for the first time[100](index=100&type=chunk)[105](index=105&type=chunk) Key Financial Resources Indicators (As of March 31, 2024) | Metric | Amount/Ratio | | :--- | :--- | | Shareholders' Funds | HKD 11.924 million | | Current Assets | HKD 14.752 million | | Current Liabilities | HKD 16.663 million | | Current Ratio | 0.85 : 1 | | Gearing Ratio | Zero | - As of March 31, 2024, the Group had **24 employees**, with total remuneration expenses of approximately **HKD 5.883 million** during the reporting period, a decrease from **HKD 7.175 million** in the previous period[111](index=111&type=chunk)[117](index=117&type=chunk) - The Group invested idle funds in low-risk wealth management products to enhance capital efficiency, with most products redeemed during the reporting period[113](index=113&type=chunk)[114](index=114&type=chunk)[122](index=122&type=chunk) [Corporate Governance Report](index=21&type=section&id=Corporate%20Governance%20Report) The company is committed to high standards of corporate governance, largely complying with the Corporate Governance Code during the reporting period, with deviations only in directors' legal action insurance (C.1.8) and the separation of Chairman and CEO roles (C.2.1), while detailing board composition, committee functions, risk management, internal controls, shareholder rights, and investor relations to maintain a transparent, accountable, and effective governance structure [Corporate Governance Practices](index=21&type=section&id=Corporate%20Governance%20Practices) During the reporting period, the company largely complied with the Corporate Governance Code, with two deviations: no appropriate insurance for directors' legal actions (C.1.8), and the roles of Chairman and CEO not separated (C.2.1), as the executive director team collectively focuses on business strategy, pending a suitable appointment - The company complied with the code provisions of the Corporate Governance Code during the reporting period, with certain deviations[131](index=131&type=chunk) - Deviation from Code Provision C.1.8: The company believes the likelihood of actual litigation against directors is extremely low, thus no directors' liability insurance has been arranged, but relevant insurance proposals will be considered for review[132](index=132&type=chunk)[133](index=133&type=chunk) - Deviation from Code Provision C.2.1: The roles of Chairman and Chief Executive Officer are not separated; the executive director team collectively evaluates new businesses and formulates strategies, thus no new Chairman and CEO have been appointed for the time being[134](index=134&type=chunk)[135](index=135&type=chunk) [Board of Directors](index=22&type=section&id=Board%20of%20Directors) The Board of Directors is responsible for formulating the Group's overall strategy and approving significant matters, delegating daily operations to executive directors and management, holding four meetings during the reporting period, with all directors subject to retirement by rotation at least every three years, and all independent non-executive directors confirmed to meet independence requirements Board and General Meeting Attendance Record | Director Name | Board Meetings Attended/Held | General Meetings Attended/Held | | :--- | :--- | :--- | | Mr. Wang Xiaoqi | 4/4 | 1/1 | | Mr. He Yang | 1/4 | 1/1 | | Ms. He Zheng | 4/4 | 1/1 | | Mr. Xie Yuxuan | 3/4 | 1/1 | | Mr. Liu Chuqi | 3/4 | 1/1 | | Mr. Huang Jianji | 3/4 | 1/1 | - The Board is responsible for formulating the Group's overall strategy, approving financial statements and significant transactions, and delegates daily operational and administrative functions to executive directors and management[146](index=146&type=chunk) - All directors, including those with specific terms, are subject to retirement by rotation at least once every three years, and re-election of independent non-executive directors serving more than nine years requires approval by shareholders through a separate resolution[157](index=157&type=chunk)[158](index=158&type=chunk) [Board Committees](index=27&type=section&id=Board%20Committees) The company established three Board Committees—Audit, Remuneration, and Nomination—all composed of independent non-executive directors and chaired by Mr. Xie Yuxuan, responsible for overseeing financial reporting, risk management, internal controls, reviewing director and executive remuneration, and managing director nominations and board diversity policy implementation [Audit Committee](index=27&type=section&id=Audit%20Committee) The Audit Committee, comprising three independent non-executive directors and chaired by Mr. Xie Yuxuan, is primarily responsible for reviewing the Group's audit results, accounting policies, internal controls, and risk management systems, holding three meetings during the reporting period to review financial reports and confirm compliance and adequate disclosure - The Audit Committee, composed of three independent non-executive directors, is responsible for reviewing financial reports, accounting policies, internal controls, and risk management matters[179](index=179&type=chunk)[184](index=184&type=chunk) Audit Committee Meeting Attendance Record | Member Name | Attendance/Meetings Held | | :--- | :--- | | Mr. Xie Yuxuan | 3/3 | | Mr. Liu Chuqi | 3/3 | | Mr. Huang Jianji | 3/3 | [Remuneration Committee](index=28&type=section&id=Remuneration%20Committee) The Remuneration Committee, comprising three independent non-executive directors and chaired by Mr. Xie Yuxuan, is primarily responsible for advising the Board on director and senior management remuneration, holding one meeting during the reporting period to review executive directors' service contracts, remuneration, and performance - The Remuneration Committee, composed of three independent non-executive directors, is responsible for recommending remuneration packages for directors and senior management to the Board[188](index=188&type=chunk)[189](index=189&type=chunk) Remuneration Committee Meeting Attendance Record | Member Name | Attendance/Meetings Held | | :--- | :--- | | Mr. Xie Yuxuan | 1/1 | | Mr. Liu Chuqi | 1/1 | | Mr. Huang Jianji | 1/1 | [Nomination Committee](index=29&type=section&id=Nomination%20Committee) The Nomination Committee, comprising three independent non-executive directors and chaired by Mr. Xie Yuxuan, is primarily responsible for identifying director candidates, recommending appointments or re-appointments to the Board, and overseeing the implementation of the board diversity policy, holding one meeting during the reporting period with no new director appointments - The Nomination Committee is responsible for identifying director candidates, proposing appointments, and overseeing the implementation of the board diversity policy[197](index=197&type=chunk)[194](index=194&type=chunk) - The company has adopted a board diversity policy, considering board composition from various aspects including gender, age, cultural and educational background, and professional experience[199](index=199&type=chunk)[200](index=200&type=chunk) Nomination Committee Meeting Attendance Record | Member Name | Attendance/Meetings Held | | :--- | :--- | | Mr. Xie Yuxuan | 1/1 | | Mr. Liu Chuqi | 1/1 | | Mr. Huang Jianji | 1/1 | [Risk Management and Internal Control](index=36&type=section&id=Risk%20Management%20and%20Internal%20Control) The Board holds overall responsibility for the Group's risk management and internal control systems, delegating daily oversight to executive directors and management, and has established risk management policies and reporting mechanisms using a bottom-up approach for risk identification and assessment; during the reporting period, the Board engaged independent consultant PAL Advisory to perform internal audit functions, reviewing the effectiveness of financial reporting procedures, systems, and controls, with both the Board and Audit Committee deeming the systems effective and adequately resourced - The Board holds overall responsibility for the risk management and internal control systems, reviewing their effectiveness at least annually[236](index=236&type=chunk)[238](index=238&type=chunk) - The Group has established risk management policies and reporting mechanisms, covering the entire process of risk identification, assessment, response, and monitoring reports[149](index=149&type=chunk)[242](index=242&type=chunk) - The Group engaged independent consultant PAL Advisory to perform internal audit functions, reviewing internal controls related to financial reporting and other areas[245](index=245&type=chunk) - The Audit Committee and the Board believe that the Group's risk management and internal control systems operated effectively and were adequately resourced during the reporting period[248](index=248&type=chunk)[249](index=249&type=chunk) [Shareholder's Rights & Investor Relations](index=41&type=section&id=Shareholder%27s%20Rights%20%26%20Investor%20Relations) The company clarifies shareholder rights, including the ability for shareholders holding at least **10% of paid-up capital** to requisition an extraordinary general meeting, emphasizing effective communication through various channels like general meetings, annual reports, announcements, and the company website, and strictly adhering to its adopted shareholder communication policy during the reporting period - Shareholders holding not less than **one-tenth of the company's paid-up capital** have the right to requisition an extraordinary general meeting of shareholders in writing to the Board[254](index=254&type=chunk)[259](index=259&type=chunk) - The company has adopted a shareholder communication policy and maintains effective communication with shareholders through various channels, including general meetings, financial reports, announcements, and the company website[263](index=263&type=chunk) [Environmental, Social and Governance Report](index=43&type=section&id=Environmental%2C%20Social%20and%20Governance%20Report) This ESG report outlines the Group's practices and commitments in environmental protection, social responsibility, and corporate governance, detailing the establishment of an ESG working group, identification of key ESG issues through stakeholder engagement and materiality assessment, setting targets for greenhouse gas emissions, waste management, and energy consumption, and implementing measures to reduce environmental impact, while also covering employment, health and safety, training, supply chain management, product responsibility, anti-corruption, and community investment, demonstrating the Group's efforts as a responsible enterprise [Governance, Stakeholder Engagement and Materiality Assessment](index=47&type=section&id=Governance%2C%20Stakeholder%20Engagement%20and%20Materiality%20Assessment) The Group established an ESG working group to assist the Board in overseeing ESG matters, communicating with key stakeholders like shareholders, employees, and customers through various channels including general meetings, financial reports, and customer service hotlines, and identified critical ESG issues such as greenhouse gas emissions, employee welfare, customer privacy protection, and anti-corruption through annual materiality assessments - The Group established an ESG working group, comprising senior management and departmental staff, responsible for implementing ESG initiatives, collecting data, and making recommendations to the Board[298](index=298&type=chunk) - The Group communicates with stakeholders including shareholders, government, employees, customers, suppliers, and the public through various channels to understand their expectations and feedback[305](index=305&type=chunk)[306](index=306&type=chunk) - Through annual materiality assessments, the Group identified **15 key ESG issues**, with occupational health and safety, anti-corruption, customer privacy protection, and employee welfare deemed most significant[308](index=308&type=chunk)[311](index=311&type=chunk) [A. Environmental](index=50&type=section&id=A.%20Environmental) The Group is committed to environmental protection, setting quantitative targets for greenhouse gas emissions, waste management, and energy consumption, achieving significant reductions in total greenhouse gas emissions and energy consumption during the reporting period due to office relocation and vehicle decommissioning, while implementing energy-saving measures, paperless operations, and 3R principles to reduce resource consumption, and has developed a climate change policy to address physical risks like typhoons and transitional risks like tightening regulations Environmental Targets and Progress | Category | Target (Baseline: 2023) | Progress | | :--- | :--- | :--- | | Greenhouse Gas Emissions | Maintain or reduce total greenhouse gas emission intensity (Baseline: 65.09 kg CO2e/m²) | Ongoing | | Waste Management | Maintain or reduce non-hazardous waste intensity (Baseline: 0.17 kg/m²) | Ongoing | | Energy Consumption | Maintain or reduce total energy consumption intensity (Baseline: 86.66 kWh/m²) | Ongoing | Greenhouse Gas Emissions Performance | Metric (kg CO2e) | 2024 | 2023 | | :--- | :--- | :--- | | Total Emissions | 18,165.71 | 24,929.62 | | Emission Intensity (kg CO2e/m²) | 47.43 | 65.09 | Energy Consumption Performance | Metric (kWh) | 2024 | 2023 | | :--- | :--- | :--- | | Total Energy Consumption | 22,819.21 | 33,190.92 | | Total Energy Consumption Intensity (kWh/m²) | 59.58 | 86.66 | - The Group has formulated a climate change policy to identify and address physical risks such as extreme weather and transitional risks like tightening regulations[357](index=357&type=chunk)[361](index=361&type=chunk)[363](index=363&type=chunk) [B. Social](index=58&type=section&id=B.%20Social) Regarding social responsibility, the Group established comprehensive policies for employment, health and safety, training, supply chain management, product responsibility, and anti-corruption, committing to equal opportunities and a safe work environment with no lost workdays due to injury during the reporting period, strictly adhering to labor standards prohibiting child and forced labor, assessing environmental and social risks in supplier management, prioritizing product quality with after-sales service and customer data protection mechanisms, reporting no product recalls or complaints, and maintaining business ethics through a whistleblowing mechanism [Employment and Labour Practices](index=58&type=section&id=Employment%20and%20Labour%20Practices) The Group established a comprehensive human resource management system ensuring fairness in recruitment, promotion, remuneration, and dismissal, providing statutory holidays and benefits, committing to equal opportunities, diversity, and anti-discrimination, strictly prohibiting child and forced labor, and as of March 31, 2024, had **21 employees** with an annual employee turnover rate of **13%** - As of March 31, 2024, the Group had **21 employees** (excluding independent non-executive directors), with **57% male** and **43% female**, and geographically, **71% of employees were in mainland China** and **29% in Hong Kong**[376](index=376&type=chunk)[377](index=377&type=chunk) - During the reporting period, the Group's employee turnover rate was **13%**[380](index=380&type=chunk) - The Group strictly prohibits child and forced labor, verifying identity documents during recruitment to prevent violations[395](index=395&type=chunk)[398](index=398&type=chunk) [Health, Safety, Development and Training](index=60&type=section&id=Health%2C%20Safety%2C%20Development%20and%20Training) The Group highly prioritizes employee health and safety, committed to providing a safe and comfortable work environment, with no lost workdays due to injury or work-related fatalities during the reporting period, and offers customized IT examination systems and training courses for employee development, totaling **85 hours of training** during the period - During the reporting period, the Group recorded **zero lost workdays due to work-related injuries** and no work-related fatalities in the past three years[384](index=384&type=chunk) Employee Training Hours Summary (FY2024) | Employee Category | Percentage of Employees Trained | Average Training Hours (Hours) | | :--- | :--- | :--- | | Executive Directors | 75% | 6.75 | | Management | 100% | 12.00 | | General Staff | 8% | 0.77 | [Operating Practices](index=63&type=section&id=Operating%20Practices) Regarding operating practices, the Group maintains strict management over its supply chain, product responsibility, and anti-corruption efforts, requiring suppliers to adhere to its code of conduct and considering environmental and social risks during selection, prioritizing product quality with after-sales service and customer data protection mechanisms, reporting no product recalls or related complaints during the period, and committing to prohibiting all forms of corruption through a whistleblowing mechanism - The Group considers suppliers' environmental (e.g., ISO14001 certification) and social (e.g., OHSAS18001 certification) performance during selection; during the reporting period, **all 4 major suppliers were located in China**[401](index=401&type=chunk)[406](index=406&type=chunk) - The Group emphasizes product quality, maintains a tracking system, and provides after-sales service; during the reporting period, there were **no product recalls** or complaints regarding product quality or services[413](index=413&type=chunk)[414](index=414&type=chunk)[417](index=417&type=chunk) - The Group is committed to protecting customer data and intellectual property, signing confidentiality agreements with partners[418](index=418&type=chunk)[419](index=419&type=chunk) - The Group strictly prohibits corrupt practices such as bribery, extortion, fraud, and money laundering, and has established an employee whistleblowing mechanism; during the reporting period, there were **no concluded corruption litigation cases**[426](index=426&type=chunk)[428](index=428&type=chunk)[436](index=436&type=chunk) [Biographical Information of Directors and Senior Management](index=77&type=section&id=Biographical%20Information%20of%20Directors%20and%20Senior%20Management) This section provides detailed biographical information for the company's executive and independent non-executive directors, including their age, position, tenure, professional experience, academic background, shareholding, and appointments in other listed companies or organizations - **Mr. Wang Xiaoqi**, Executive Director, **45 years old**, possesses over **15 years of experience** in China's telecommunications industry, holding a Bachelor's degree in Computer Control and Application[459](index=459&type=chunk) - **Mr. He Yang**, Executive Director, **69 years old**, previously served as a senior executive at a major high-tech software company in China and an executive director at a renowned real estate company, and was an independent non-executive director of China Gas Holdings Limited (Stock Code: 384)[462](index=462&type=chunk) - **Ms. He Zheng**, Executive Director, **31 years old**, holds a Bachelor of Business Administration degree and is a licensed representative for Type 1 (dealing in securities) regulated activities[463](index=463&type=chunk) - **Mr. Xie Yuxuan**, Independent Non-Executive Director, **54 years old**, possesses over **20 years of experience** in corporate finance and accounting, is a member of the Hong Kong Institute of Certified Public Accountants, and holds licenses for Type 1 and Type 6 regulated activities[467](index=467&type=chunk) [Report of the Directors](index=81&type=section&id=Report%20of%20the%20Directors) This report outlines statutory disclosures including the company's principal business activities, financial performance, dividend policy, share capital structure, and directors' and major shareholders' interests during the reporting period, noting no significant change in business nature, focusing on high-tech software and hardware trading, mobile payment platform development, and enterprise SMS services, with the company achieving profitability but not recommending a final dividend, while confirming sufficient public float and compliance with relevant laws and regulations [Principal Activities and Financials](index=81&type=section&id=Principal%20Activities%20and%20Financials) The company primarily engages in investment holding, with subsidiary businesses including high-tech software and hardware trading, mobile payment services, and enterprise SMS services, experiencing no significant change in business nature during the reporting period, recording a profit but not recommending a final dividend, and holding distributable reserves of approximately **HKD 101.852 million** as of March 31, 2024 - The Group's principal activities include high-tech software and hardware trading, mobile payment platform development, mobile application service procurement, and enterprise SMS services[477](index=477&type=chunk)[483](index=483&type=chunk) - The Directors do not recommend the payment of a final dividend for the reporting period[480](index=480&type=chunk)[486](index=486&type=chunk) - As of March 31, 2024, the company's distributable reserves (including share premium) amounted to approximately **HKD 101,852,000**[491](index=491&type=chunk)[499](index=499&type=chunk) [Directors and Shareholders' Interests](index=83&type=section&id=Directors%20and%20Shareholders%27%20Interests) The report lists directors and their service contracts for the period, with Happy On Holdings Limited and its ultimate beneficial owner, Mr. Chan Fu Wing, as major shareholders holding approximately **72.83% of the company's shares**, while executive directors Mr. Wang Xiaoqi and Mr. He Yang hold minor stakes, and the largest customer and supplier accounted for **68% of total sales** and **66% of total purchases**, respectively Major Shareholders' Shareholding (As of March 31, 2024) | Shareholder Name | Capacity | Number of Issued Ordinary Shares Held | Approximate Percentage of Issued Share Capital | | :--- | :--- | :--- | :--- | | Happy On Holdings Limited | Beneficial Owner | 987,888,771 (L) | 72.83% | | Mr. Chan Fu Wing | Interest of Controlled Corporation | 987,888,771 (L) | 72.83% | - Executive Director Mr. Wang Xiaoqi holds **382,000 shares** (approximately **0.028%**), and Mr. He Yang holds **18,083,500 shares** (approximately **1.333%**)[530](index=530&type=chunk)[532](index=532&type=chunk) - During the reporting period, the largest customer accounted for approximately **68% of total sales**, and the top five customers accounted for **100%**; the largest supplier accounted for approximately **66% of total purchases**, and the top five suppliers accounted for **100%**[538](index=538&type=chunk)[544](index=544&type=chunk) [Summary Financial Information](index=90&type=section&id=Summary%20Financial%20Information) This summary provides key financial data for the Group's past five fiscal years (2020-2024), including revenue, profit/loss before tax, profit/loss attributable to owners of the company, total assets, and total liabilities, indicating a return to profitability in FY2024 Summary of Results for the Past Five Financial Years (HKD Thousand) | Financial Year | 2024 | 2023 | 2022 | 2021 | 2020 | | :--- | :--- | :--- | :--- | :--- | :--- | | **Revenue** | 16,152 | 18,290 | 32,800 | 41,242 | 26,556 | | **Profit/(Loss) Before Tax** | 5,898 | (16,840) | (21,920) | 6,345 | (33,225) | | **Profit/(Loss) Attributable to Owners of the Company** | 6,604 | (10,108) | (18,189) | 16,703 | (26,710) | Summary of Assets and Liabilities for the Past Five Financial Years (HKD Thousand) | Financial Year | 2024 | 2023 | 2022 | 2021 | 2020 | | :--- | :--- | :--- | :--- | :--- | :--- | | **Total Assets** | 15,721 | 34,633 | 58,207 | 62,017 | 89,277 | | **Total Liabilities** | (17,402) | (48,006) | (54,956) | (37,125) | (98,718) | | **Equity Attributable to Owners of the Company** | 11,924 | 246 | 10,707 | 28,413 | 11,892 | [Independent Auditor's Report](index=91&type=section&id=Independent%20Auditor%27s%20Report) Auditor UHY CPA Limited issued an unmodified opinion on the company's consolidated financial statements as of March 31, 2024, deeming them to fairly present the Group's financial position and performance, while drawing attention to significant uncertainties related to going concern due to the Group's net liability position at period-end, with key audit matters including loss allowances for trade and other receivables and contract assets, which were subject to sufficient audit procedures - **Audit Opinion**: The auditor believes the consolidated financial statements fairly present the Group's financial position and are properly prepared in compliance with the disclosure requirements of the Hong Kong Companies Ordinance (unmodified opinion)[573](index=573&type=chunk)[575](index=575&type=chunk) - **Material Uncertainty Related to Going Concern**: The report draws attention to the Group's net liabilities of approximately **HKD 1.681 million** as of the reporting period end, a condition that may cast significant doubt on the Group's ability to continue as a going concern; however, the auditor's opinion is not modified in respect of this matter[578](index=578&type=chunk)[580](index=580&type=chunk) - **Key Audit Matter**: Loss allowance for trade and other receivables and contract assets, identified as a key audit matter due to its material amount and significant management judgment and estimation involved; the auditor evaluated and challenged management's Expected Credit Loss (ECL) model, assumptions, and data used[585](index=585&type=chunk)[588](index=588&type=chunk)[589](index=589&type=chunk) [Financial Statements](index=99&type=section&id=Financial%20Statements) [Consolidated Statement of Profit or Loss and Other Comprehensive Income](index=99&type=section&id=Consolidated%20Statement%20of%20Profit%20or%20Loss%20and%20Other%20Comprehensive%20Income) For the year ended March 31, 2024, the Group's revenue was **HKD 16.152 million**, a **12% year-on-year decrease**, yet it achieved a profit before tax of **HKD 5.898 million**, reversing a **HKD 16.840 million loss** from the prior year, primarily due to a **HKD 19.286 million gain** from the disposal of a subsidiary, resulting in a profit attributable to owners of the company of **HKD 6.604 million** and basic earnings per share of **HKD 0.49 cents** Consolidated Statement of Profit or Loss Summary (For the Year Ended March 31) | Item (HKD Thousand) | 2024 | 2023 | | :--- | :--- | :--- | | Revenue | 16,152 | 18,290 | | Gross Profit | 761 | 1,820 | | Gain on Disposal of a Subsidiary | 19,286 | – | | **Profit/(Loss) Before Tax** | **5,898** | **(16,840)** | | **Profit/(Loss) for the Year** | **5,898** | **(16,840)** | | Profit/(Loss) Attributable to Owners of the Company | 6,604 | (10,108) | | Basic and Diluted Earnings/(Loss) Per Share (HK Cents) | 0.49 | (0.75) | [Consolidated Statement of Financial Position](index=100&type=section&id=Consolidated%20Statement%20of%20Financial%20Position) As of March 31, 2024, the Group's total assets were **HKD 15.721 million** and total liabilities were **HKD 17.402 million**, resulting in net liabilities of **HKD 1.681 million**, an improvement from **HKD 13.373 million** net liabilities in the prior year, with current assets primarily comprising **HKD 11.770 million** in trade and other receivables, and current liabilities mainly **HKD 16.663 million** in trade and other payables, while equity attributable to owners of the company stood at **HKD 11.924 million** Consolidated Statement of Financial Position Summary (As of March 31) | Item (HKD Thousand) | 2024 | 2023 | | :--- | :--- | :--- | | **Total Non-Current Assets** | 969 | 1,977 | | **Total Current Assets** | 14,752 | 32,656 | | **Total Assets** | **15,721** | **34,633** | | **Total Current Liabilities** | 17,402 | 47,195 | | **Non-Current Liabilities** | – | 811 | | **Total Liabilities** | **17,402** | **48,006** | | **Net Liabilities** | **(1,681)** | **(13,373)** | | Equity Attributable to Owners of the Company | 11,924 | 246 | | Non-Controlling Interests | (13,605) | (13,619) | [Consolidated Statement of Changes in Equity](index=102&type=section&id=Consolidated%20Statement%20of%20Changes%20in%20Equity) For the year ended March 31, 2024, equity attributable to owners of the company increased from **HKD 0.246 million** at the beginning of the year to **HKD 11.924 million** at year-end, primarily driven by a **HKD 6.604 million profit** for the year, **HKD 0.462 million gain** from exchange differences, and **HKD 4.612 million** reclassification of reserves from the disposal of a subsidiary Summary of Changes in Equity Attributable to Owners of the Company (HKD Thousand) | Item | Amount (HKD Thousand) | | :--- | :--- | | As of April 1, 2023 | 246 | | Profit for the Year | 6,604 | | Other Comprehensive Income (Exchange Differences) | 462 | | Disposal of a Subsidiary (Reserve Impact) | 4,612 | | **As of March 31, 2024** | **11,924** | [Consolidated Statement of Cash Flows](index=103&type=section&id=Consolidated%20Statement%20of%20Cash%20Flows) For the year ended March 31, 2024, the Group's cash and cash equivalents decreased by **HKD 1.111 million**, with net cash outflow from operating activities of **HKD 8.156 million** primarily due to working capital changes, net cash inflow from investing activities of **HKD 7.886 million** mainly from disposal of financial assets, and net cash outflow from financing activities of **HKD 0.841 million** mainly for lease liability repayment, resulting in a year-end cash and cash equivalents balance of **HKD 2.742 million** Consolidated Statement of Cash Flows Summary (For the Year Ended March 31) | Item (HKD Thousand) | 2024 | 2023 | | :--- | :--- | :--- | | Net Cash Used in Operating Activities | (8,156) | (16,935) | | Net Cash From Investing Activities | 7,886 | 13,831 | | Net Cash Used in Financing Activities | (841) | (1,115) | | **Net Decrease in Cash and Cash Equivalents** | **(1,111)** | **(4,219)** | | Cash and Cash Equivalents at Beginning of Year | 3,493 | 7,978 | | **Cash and Cash Equivalents at End of Year** | **2,742** | **3,493** | [Notes to the Consolidated Financial Statements](index=105&type=section&id=Notes%20to%20the%20Consolidated%20Financial%20Statements) The notes to the financial statements provide detailed explanations of the company's financial position and performance, including the adoption of the going concern basis despite net liabilities, revenue sources from system development, hardware sales, and new SMS services, expected credit loss provisions for trade and other receivables, disclosures on financial instrument classification, risk management, and fair value measurement, details of the September 2023 disposal of Guangzhou YBDS subsidiary, and financial information for subsidiaries with significant non-controlling interests [Note 3: Material Accounting Policies Information](index=108&type=section&id=Note%203%3A%20Material%20Accounting%20Policies%20Information) This note outlines the Group's principal accounting policies, including the assessment of going concern, where despite net liabilities at period-end, directors deem the going concern basis appropriate given cost control measures, new business initiatives (children's smartwatches), and major shareholder financial support commitments, alongside other policies covering business combinations, revenue recognition, leases, and financial instrument classification and impairment (using the Expected Credit Loss model) - Despite the Group recording net liabilities of approximately **HKD 1.681 million** as of March 31, 2024, the directors believe the Group can continue as a going concern, based on cost control, new business expansion, and major shareholder commitments for financial support[649](index=649&type=chunk)[653](index=653&type=chunk)[655](index=655&type=chunk) - Revenue recognition follows a five-step model: for system development and consulting services, revenue is recognized over time; for hardware product sales and SMS services, revenue is recognized at the point control is transferred[681](index=681&type=chunk)[695](index=695&type=chunk)[707](index=707&type=chunk) - The Group applies the simplified approach to trade receivables and contract assets, recognizing Lifetime Expected Credit Losses (ECL)[809](index=809&type=chunk) [Note 7: Revenue and Segment Information](index=155&type=section&id=Note%207%3A%20Revenue%20and%20Segment%20Information) This year, the Group's total revenue was **HKD 16.152 million**, primarily from three segments: Services (**HKD 3.976 million**), Hardware Sales (**HKD 0.929 million**), and the new SMS Service Charges (**HKD 11.247 million**), with SMS services becoming the largest revenue source, and significant customer concentration as Company B contributed approximately **68%** and Company A approximately **25%** of total revenue Revenue by Segment (For the Year Ended March 31, 2024) | Segment | Revenue (HKD Thousand) | | :--- | :--- | | Services | 3,976 | | Hardware Sales | 929 | | SMS Service Charges | 11,247 | | **Total** | **16,152** | - During the reporting period, the Services segment recorded a loss of **HKD 4.460 million**, the Hardware Sales segment a loss of **HKD 1.096 million**, while the SMS Services segment achieved a profit of **HKD 0.353 million**[972](index=972&type=chunk) - There is significant customer concentration risk, with Company B contributing **HKD 11.047 million** in revenue and Company A contributing **HKD 3.976 million**, together accounting for over **90% of total revenue**[991](index=991&type=chunk) [Note 20: Trade and Other Receivables](index=173&type=section&id=Note%2020%3A%20Trade%20and%20Other%20Receivables) As of March 31, 2024, the gross carrying amount of trade receivables was **HKD 8.498 million**, with a net amount of **HKD 7.286 million** after a loss allowance of **HKD 1.212 million**, and other receivables net amount was **HKD 3.143 million**; the Group applies a provision matrix for Lifetime Expected Credit Losses on trade receivables, with an expected loss rate of **15% for amounts overdue over 60 days** Trade Receivables Aging Analysis (Net, HKD Thousand) | Aging | 2024 | 2023 | | :--- | :--- | :--- | | Within 90 days | 162 | 8,457 | | 91 to 180 days | 107 | 9 | | 181 to 365 days | 4,418 | 6,344 | | Over 365 days | 2,599 | 111 | | **Total** | **7,286** | **14,921** | - The Group recognized an impairment loss of **HKD 0.857 million** for trade receivables based on the Expected Credit Loss model (2023: **HKD 0.029 million**)[1059](index=1059&type=chunk)[1072](index=1072&type=chunk) - Other receivables include amounts due from former subsidiaries of approximately **HKD 1.099 million**[1073](index=1073&type=chunk) [Note 26: Disposal of a Subsidiary](index=182&type=section&id=Note%2026%3A%20Disposal%20of%20a%20Subsidiary) On September 19, 2023, the Group disposed of its entire equity interest in indirectly-owned subsidiary Guangzhou YBDS Information Technology Co., Ltd. for a cash consideration of RMB 1, generating a **HKD 19.286 million gain** primarily due to the disposed subsidiary's net liability position, and resulting in a net cash outflow of **HKD 3 thousand** from the transaction - The Group disposed of its subsidiary Guangzhou YBDS on September 19, 2023, for a nominal consideration of **RMB 1**[1107](index=1107&type=chunk)[1108](index=1108&type=chunk) Gain on Disposal of a Subsidiary Calculation (HKD Thousand) | Item | Amount (HKD Thousand) | | :--- | :--- | | Consideration Receivable | 0* | | Net Liabilities Disposed | 23,898 | | Reclassification of Cumulative Translation Reserve | (4,612) | | **Gain on Disposal** | **19,286** | - As of March 31, 2023, the disposed subsidiary Guangzhou YBDS had its assets classified as held for sale, with related liabilities primarily consisting of amounts payable to independent third party Beijing Huaqin of approximately **HKD 25.603 million**[1113](index=1113&type=chunk)[1116](index=1116&type=chunk)

[Financial Summary](index=2&type=section&id=Financial%20Summary) This section summarizes the company's financial performance, position, and equity movements, highlighting the swing to profit and changes in asset and liability structures [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) During the reporting period, the Group swung to profit, primarily due to a one-off gain from the disposal of a subsidiary, resulting in a profit attributable to owners of the company of HK$6,604 thousand compared to a loss of HK$10,108 thousand in the prior year Consolidated Statement of Profit or Loss Key Indicators (For the Year Ended March 31) | Indicator | 2024 (Thousand HKD) | 2023 (Thousand HKD) | Year-on-Year Change | | :--- | :--- | :--- | :--- | | Revenue | 16,152 | 18,290 | -11.7% | | Gross Profit | 761 | 1,820 | -58.2% | | Gain on Disposal of a Subsidiary | 19,286 | – | N/A | | Profit/(Loss) Before Tax | 5,898 | (16,840) | Swung to Profit | | Profit/(Loss) for the Year | 5,898 | (16,840) | Swung to Profit | | Profit/(Loss) Attributable to Owners of the Company | 6,604 | (10,108) | Swung to Profit | | Basic Earnings/(Loss) Per Share (HK cents) | 0.49 | (0.75) | Swung to Profit | [Consolidated Statement of Financial Position](index=4&type=section&id=Consolidated%20Statement%20of%20Financial%20Position) As of March 31, 2024, the Group's total assets significantly decreased to HK$15,721 thousand, while total liabilities also substantially declined to HK$17,402 thousand, primarily due to a large base of liabilities classified as assets held for sale in the prior period Consolidated Statement of Financial Position Summary (As of March 31) | Indicator | 2024 (Thousand HKD) | 2023 (Thousand HKD) | | :--- | :--- | :--- | | **Assets** | | | | Total Current Assets | 14,752 | 32,656 | | Total Non-current Assets | 969 | 1,977 | | **Total Assets** | **15,721** | **34,633** | | **Liabilities and Equity** | | | | Total Current Liabilities | 17,402 | 47,195 | | Non-current Liabilities | – | 811 | | **Total Liabilities** | **17,402** | **48,006** | | **Equity Attributable to Owners of the Company** | **11,924** | **246** | | **Capital Deficit (Net Liabilities)** | **(1,681)** | **(13,373)** | - The Group's net current liabilities narrowed from **HK$14,539 thousand** in the prior year to **HK$2,650 thousand**[9](index=9&type=chunk) [Consolidated Statement of Changes in Equity](index=6&type=section&id=Consolidated%20Statement%20of%20Changes%20in%20Equity) During the reporting period, equity attributable to owners of the company significantly increased from HK$246 thousand at the beginning of the year to HK$11,924 thousand at year-end, driven by the profit for the year and reclassification of accumulated translation reserve Changes in Equity Attributable to Owners of the Company | Item | Amount (Thousand HKD) | | :--- | :--- | | As of April 1, 2023 | 246 | | Total Comprehensive Income for the Year | 7,066 | | Disposal of a Subsidiary | 4,612 | | **As of March 31, 2024** | **11,924** | [Notes to the Consolidated Financial Statements](index=7&type=section&id=Notes%20to%20the%20Consolidated%20Financial%20Statements) This section provides detailed notes on the company's general information, basis of presentation, revenue segmentation, and the significant gain from the disposal of a subsidiary [General Information & Basis of Presentation](index=7&type=section&id=1.%20General%20Information%20%26%202.%20Basis%20of%20Presentation) The company is an investment holding company primarily engaged in system development, technology consulting, hardware sales, and SMS service charges, with financial statements prepared on a going concern basis despite net liabilities - The Group's principal activities include system development services, technology consulting, hardware sales, and SMS service charges[14](index=14&type=chunk) - Despite recording net liabilities of approximately **HK$1.681 million**, the financial statements are prepared on a going concern basis, supported by active cost control, new business initiatives (children's smartwatches), and financial support commitments from major shareholders[15](index=15&type=chunk) [Revenue and Segment Information](index=9&type=section&id=4.%20Revenue%20and%20Segment%20Information) During the reporting period, the Group's total revenue was HK$16,152 thousand, a 11.7% year-on-year decrease, with the newly added "SMS Service Charges" becoming the primary revenue source, contributing nearly 70% of total revenue Revenue by Business Segment (Thousand HKD) | Business Segment | 2024 | 2023 | | :--- | :--- | :--- | | Services (System Development and Consulting) | 3,976 | 15,412 | | Sales of Hardware | 929 | 2,878 | | SMS Service Charges | 11,247 | – | | **Total** | **16,152** | **18,290** | - The SMS service charges business commenced operations during the reporting period and became a core business[20](index=20&type=chunk) - Revenue from customer Company A (Services segment) and Company B (SMS Services segment) accounted for an extremely high proportion of total revenue, contributing **HK$3,976 thousand** and **HK$11,047 thousand** respectively[29](index=29&type=chunk) [Disposal of a Subsidiary](index=18&type=section&id=13.%20Disposal%20of%20a%20Subsidiary) On September 19, 2023, the Group disposed of its entire equity interest in Guangzhou Yunbo Information Technology Co., Ltd., an indirectly owned subsidiary, for a nominal consideration of HK$1, generating a gain of HK$19,286 thousand, which was a key factor in the Group's profitability for the year - The Group disposed of its entire equity interest in Guangzhou Yunbo, a subsidiary, for a cash consideration of RMB1 on September 19, 2023[46](index=46&type=chunk) Gain on Disposal of a Subsidiary Calculation (Thousand HKD) | Item | Amount | | :--- | :--- | | Net Liabilities Disposed Of | 23,898 | | Reclassification of Accumulated Translation Reserve | (4,612) | | **Gain on Disposal** | **19,286** | [Management Discussion and Analysis](index=20&type=section&id=Management%20Discussion%20and%20Analysis) This section discusses the company's strategic business transformation, future outlook, financial resources, performance highlights, and human capital management [Business Review](index=20&type=section&id=Business%20Review) To adapt to the volatile market, the Group has shifted its business focus from information technology system development to system operation, with the newly added enterprise SMS service business rapidly growing to account for approximately 70% of total revenue - The business focus has shifted from IT system development to system operation, with enterprise SMS services becoming core, accounting for approximately **70% of total revenue**[52](index=52&type=chunk) - The Group is preparing to launch a front-end business selling children's smartwatches, which will be bundled with services from major telecom operators, with initial distribution commencing in Beijing in May 2024[54](index=54&type=chunk) - Back-end businesses continue to provide information verification, unified digital authentication system construction, and other services for clients in industries such as securities, finance, and transportation infrastructure[56](index=56&type=chunk)[57](index=57&type=chunk)[58](index=58&type=chunk) [Prospects](index=24&type=section&id=Prospects) Looking ahead, given macroeconomic uncertainties, the Group will continue its transformation from development to operation, planning to increase investment in SMS services and expand into other value-added services while promoting children's smartwatches and maintaining back-end operations - Plans to increase investment in the SMS service business in the second half of 2024 and consider expanding into marketing-related voice SMS services[72](index=72&type=chunk) - The children's smartwatch business launched in May 2024, with marketing activities planned for schools in the second half of the year[73](index=73&type=chunk) - The Group will adhere to a strategy of simultaneously developing front-end (smartwatches) and back-end (IT solutions) businesses to achieve business diversification and sustainable development[73](index=73&type=chunk) [Liquidity, Financial Resources and Capital Structure](index=25&type=section&id=Liquidity%2C%20Financial%20Resources%20and%20Capital%20Structure) The Group's funding primarily originates from a 2013 share subscription, with approximately HK$2,794 thousand remaining unused as of March 31, 2024, expected to be fully utilized for general working capital by March 31, 2025 - As of March 31, 2024, approximately **HK$2.794 million** of net proceeds from the 2013 subscription remained unutilized[80](index=80&type=chunk) - The remaining unutilized funds are expected to be fully used for general working capital by March 31, 2025[80](index=80&type=chunk) [Financial Review](index=27&type=section&id=Financial%20Review) During the reporting period, the Group's revenue decreased by 11.69% year-on-year to HK$16,152 thousand, but it successfully swung to profit, recording a profit attributable to owners of the company of HK$6,604 thousand Financial Indicators Overview | Indicator | Value | | :--- | :--- | | Revenue | 16,152 Thousand HKD (-11.69% YoY) | | Profit Attributable to Owners | 6,604 Thousand HKD (Loss of 10,108 Thousand HKD in prior year) | | Current Ratio | 0.85 (1.49 in prior year) | | Debt-to-Equity Ratio | Zero | - The business revenue structure underwent a significant transformation, with the newly added SMS service segment becoming the primary revenue source[83](index=83&type=chunk) [Employees and Remuneration Policy](index=28&type=section&id=Employees%20and%20Remuneration%20Policy) As of March 31, 2024, the Group employed 24 individuals (including 6 directors), a decrease from 29 in the prior year, with total employee remuneration for the reporting period approximately HK$5,883 thousand Employee and Remuneration Overview | Indicator | March 31, 2024 | March 31, 2023 | | :--- | :--- | :--- | | Number of Employees (incl. Directors) | 24 | 29 | | Total Remuneration (Thousand HKD) | 5,883 | 7,175 | [Material Investments](index=28&type=section&id=Material%20Investments) To enhance the efficiency of idle funds, the Group invested in short-term wealth management products from several large banks; as of the end of the reporting period, most products were redeemed, with only one remaining with a fair value of HK$52 thousand - The Group invested idle funds in short-term wealth management products from several banks to achieve returns higher than fixed deposits[91](index=91&type=chunk) Wealth Management Product Investment Status (Thousand HKD) | Item | Amount (Approx.) | | :--- | :--- | | Total Investment Cost | 8,215 | | Redeemed During the Year | (7,814) | | Fair Value at Year-End | 52 | | Dividend Income During the Year | 65 | [Corporate Governance and Other Information](index=30&type=section&id=Corporate%20Governance%20and%20Other%20Information) This section details the company's adherence to corporate governance practices, audit committee oversight, and the auditor's report, including going concern considerations [Corporate Governance Practices](index=30&type=section&id=Corporate%20Governance%20Practices) The company complied with the GEM Listing Rules' Corporate Governance Code during the reporting period, with two deviations: no liability insurance for directors and no separation of Chairman and Chief Executive roles - Deviation from Code Provision C.1.8: No liability insurance purchased for directors, as the company believes the likelihood of litigation is extremely low[95](index=95&type=chunk) - Deviation from Code Provision C.2.1: Chairman and Chief Executive roles are not separated, with the company explaining that the executive director team jointly focuses on business development and no suitable candidate has been appointed yet[96](index=96&type=chunk) [Audit Committee and Auditor's Report](index=30&type=section&id=Audit%20Committee%20and%20Auditor%27s%20Report) The Audit Committee, comprising three independent non-executive directors, reviewed the financial statements and risk management and internal control systems for the reporting period, deeming them effective, while the independent auditor issued an unmodified opinion with an emphasis on material uncertainty related to going concern - The Audit Committee has reviewed the annual results and considers the Group's internal control and risk management mechanisms to be operating effectively[99](index=99&type=chunk) - The independent auditor issued an unmodified opinion, but included an "Emphasis of Matter regarding Material Uncertainty Related to Going Concern"[101](index=101&type=chunk)[103](index=103&type=chunk) - The auditor noted that the Group's net liabilities of approximately **HK$1,681,000** at year-end indicate a material uncertainty that may cast significant doubt on the Group's ability to continue as a going concern[103](index=103&type=chunk)

Financial Performance - For the six months ended September 30, 2023, the revenue was HK$8,273,000, a decrease of 17.5% compared to HK$10,023,000 for the same period in 2022[8]. - Gross profit for the six months was HK$651,000, down 58.6% from HK$1,568,000 in the corresponding period of 2022[8]. - The profit before income tax for the period was HK$12,287,000, compared to a loss of HK$7,258,000 in the same period last year[8]. - The profit for the period attributable to owners of the Company was HK$12,799,000, a significant recovery from a loss of HK$6,317,000 in the previous year[9]. - Basic earnings per share for the six months was HK$0.94, compared to a loss per share of HK$0.47 in the same period of 2022[9]. - The total comprehensive income for the period was HK$13,440,000, compared to a total comprehensive loss of HK$6,692,000 in the corresponding period last year[9]. - The Company recorded a gain on the disposal of a subsidiary amounting to HK$19,286,000 during the reporting period[8]. - Other income for the six months was HK$371,000, down from HK$991,000 in the same period last year[8]. Assets and Liabilities - Total non-current assets decreased from HK$1,977,000 to HK$1,412,000, a decline of 28.6%[11]. - Current assets decreased from HK$32,656,000 to HK$18,931,000, a reduction of 42.1%[11]. - Total current liabilities decreased from HK$47,195,000 to HK$15,374,000, a decrease of 67.4%[11]. - Net current assets improved from a deficit of HK$14,539,000 to a surplus of HK$3,557,000[11]. - Total assets as of September 30, 2023, were HK$20,343,000, a decrease from HK$34,633,000 as of March 31, 2023[51]. - Total liabilities as of September 30, 2023, were HK$15,664,000, down from HK$48,006,000 as of March 31, 2023[51]. - Trade payables as of September 30, 2023, were HK$9,159,000, down from HK$13,877,000 as of March 31, 2023, indicating a reduction of approximately 34%[81]. - Other payables and accruals decreased to HK$5,346,000 as of September 30, 2023, from HK$6,883,000 as of March 31, 2023, reflecting a decline of about 22%[81]. Cash Flow - Net cash used in operating activities was HK$6,090,000, slightly improved from HK$7,034,000 in the previous year[16]. - Cash flows from investing activities generated a net cash inflow of HK$5,715,000, compared to HK$7,557,000 in the previous year[16]. - The company recorded a net decrease in cash and cash equivalents of HK$849,000, compared to HK$361,000 in the previous year[16]. - Cash and cash equivalents at the end of the period were HK$2,595,000, down from HK$7,254,000 in the previous year[17]. - The Group's cash at banks and in hand was HK$2,595,000, compared to HK$6,054,000 in the previous year[17]. - The Group's short-term time deposits in banks decreased from HK$1,200,000 to HK$0[17]. - The Group's cash flow was negatively impacted by foreign exchange rate changes, with a decrease of HK$49,000[17]. Business Operations and Strategy - The Group will continue to control administrative costs through human resources optimization and management remuneration adjustments[33]. - The Group signed contracts in April 2023 with two information technology companies to provide multimedia short messaging service, which is expected to be profitable[33]. - The Group has shifted its business focus from the development of information technology systems to their operation, including diversifying into value-added services such as short messaging services[115]. - The Group began cooperation with an information technology company to provide multimedia short messaging services for businesses in Guangdong province, with contracts signed in the second half of 2022 and the first quarter of the financial year ending 31 March 2024[116]. - The company is diversifying into the wearable device market, specifically targeting children's smartwatches, with a launch planned by the end of 2023 in Liaoning and Guangdong provinces[117]. - The company aims to start the smartwatch business by the end of 2023, initially targeting the Liaoning and Guangdong provinces in mainland China[145]. - The company continues to operate its back-end businesses, including internet electronic identity authentication and AI services, to capitalize on China's digital economy[146]. Employee and Management Information - Key management personnel remuneration for the six months ended 30 September 2023 amounted to HK$1,234,000, down from HK$1,433,000 for the same period in 2022[99]. - The total remuneration paid to employees for the reporting period was approximately HK$2,851,000, a decrease from HK$3,327,000 in 2022[173]. - The Company employed 24 employees as of September 30, 2023, a decrease from 27 employees in the previous year[175]. Share Capital and Ownership - The company raised net proceeds of approximately HK$100 million through a subscription by issuing 450,000,000 ordinary shares at a price of HK$0.225 per share[150]. - Happy On Holdings Limited holds approximately 72.83% of the total issued share capital of the company following the subscription[150]. - The total number of issued shares of the Company as of September 30, 2023, is 1,356,250,000[186]. - The Group's issued and fully paid ordinary shares remained at 1,356,250,000 as of both September 30, 2023, and March 31, 2023, with a share capital of HK$135,625,000[85]. Compliance and Governance - The Group's financial statements have been prepared in accordance with HKAS 34 and the GEM Listing Rules[22]. - The company has complied with the GEM Listing Rules regarding securities transactions by directors throughout the reporting period[194]. - The company has adopted the Corporate Governance Code provisions but deviated from provisions C.1.8 and C.2.1[195]. - The roles of chairman and chief executive officer are not separated, which is a deviation from Code Provision C.2.1[197].

Quantum Thinking Limited 量 子 思 維 有 限 公 司 （於開曼群島註冊成立之有限公司） （股份代號：8050） 截 至 二 零 二 三 年 九 月 三 十 日 止 六 個 月 之 中 期 業 績 公 告 香港聯合交易所有限公司（「聯交所」）GEM的特色 GEM的定位，乃為中小型公司提供一個上市的市場，此等公司相比起其他在 主板上市的公司帶有較高投資風險。有意投資的人士應了解投資於該等公司 的潛在風險，並應經過審慎周詳的考慮後方作出投資決定。 由於GEM上市公司普遍為中小型公司，在GEM買賣的證券可能會較於主板買 賣之證券承受較大的市場波動風險，同時無法保證在GEM買賣的證券會有高 流通量的市場。 香港交易及結算所有限公司及聯交所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。 本公告的資料乃遵照聯交所GEM證券上市規則（「GEM上市規則」）而刊載，旨 在提供有關量子思維有限公司（「本公司」）的資料。本公司的董事（「董事」）願就 本公告的資料共同及個別地承擔全部責任。各董事在 ...

Financial Performance - For the three months ended June 30, 2023, the Company reported revenue of HK$3,222,000, a decrease of 37.6% compared to HK$5,165,000 in the same period of 2022[8]. - The gross profit for the same period was HK$387,000, down 50.2% from HK$778,000 in the prior year[8]. - The loss before income tax for the period was HK$3,503,000, slightly improved from a loss of HK$3,614,000 in the corresponding period of 2022[8]. - The total comprehensive expense for the period was HK$2,489,000, compared to HK$3,453,000 in the same period last year, indicating a reduction of 28.0%[9]. - The loss attributable to owners of the Company was HK$3,329,000, compared to HK$3,168,000 in the previous year, reflecting an increase in loss[9]. - The Company recorded other income of HK$241,000, down 19.1% from HK$298,000 in the same period of 2022[8]. - The administrative expenses decreased to HK$3,887,000 from HK$4,438,000, a reduction of 12.4% year-over-year[8]. - Basic loss per share for the reporting period was calculated based on 1,356,250,000 ordinary shares in issue[35]. - Other income for the three months ended June 30, 2023, was HK$241,000, a decrease from HK$298,000 in the same period in 2022[29]. - The Group received no government grants for the three months ended June 30, 2023, compared to HK$80,000 in the same period in 2022[29]. Business Strategy and Development - The Company continues to focus on system development services and value-added technical consultation services as part of its core business strategy[13]. - The Group is diversifying into value-added services, including multimedia short messaging services for businesses, and has signed contracts to expand this business[52][55]. - The Group is preparing to enter the market for wearable devices, such as smartwatches for children, which will be bundled with telecommunication services, with progress expected in the second half of 2023[53][55]. - The Group's ongoing business transformation aims to broaden income streams and foster growth drivers amid the challenging market conditions[54]. - The Group's strategy focuses on capitalizing on China's growing digital economy through back-end and front-end IT software and system development[57]. - The Group will continue to develop back-end businesses such as internet electronic identity authentication, electronic signature, and AI services to capitalize on China's booming digital economy[83]. Market Environment - The Chinese government's relaxation of anti-pandemic measures contributed to a 6.3% year-on-year growth in the country's GDP in the second quarter of 2023[42][44]. - The geopolitical tensions and sanctions against China's technology sector have created a complicated business environment for the information system solution industry[42][44]. Subsidiary Activities - CITIC Cyber Security, a 70%-held subsidiary, has implemented its eCitizen product for electronic identity authentication in banks and other companies[58]. - During the Reporting Period, CITIC Cyber Security conducted information verification for a securities brokerage and a full-service investment banking enterprise[59]. - CITIC Cyber Security is building a real-name system management infrastructure based on eCitizen technology, providing 5G-eCitizen SIM cards and customized applications[63]. - The Group's subsidiary signed a framework agreement to provide RPA training and consultancy, enabling AI-based customer services for a telecommunications company[67]. - The Group has engaged in supplying electrical components and designing mobile web pages for marketing purposes during the Reporting Period[69]. - The Group signed a contract to provide multimedia short messaging services for businesses through a major telecommunications carrier's network, generating income during the Reporting Period[76]. - CITIC Cyber Security continues to fulfill contracts for building unified digital authentication systems and application integration for various clients[72]. Financial Position - As of June 30, 2023, the accumulated losses of the Company stood at HK$233,143,000[11]. - As of June 30, 2023, the Group held financial assets at fair value through profit or loss of approximately RMB5,198,000, down from RMB7,185,000 as of March 31, 2023[94]. - The Group recorded total income of approximately HK$37,000 during the reporting period, mainly from dividend income received from its investment portfolio[94]. - The dual business strategy of fostering both front-end and back-end businesses aims to mitigate adverse impacts from a complicated business environment and support long-term development[86]. - The Group raised net proceeds of approximately HK$100 million through a subscription by issuing 450,000,000 ordinary shares at a price of HK$0.225 per share[87]. Governance and Compliance - The audit committee, established in May 2000, comprises independent non-executive directors and is responsible for reviewing the group's audit findings and compliance with GEM Listing Rules[114]. - The unaudited consolidated results for the reporting period have been reviewed by the audit committee[115]. - The current Audit Committee consists of independent non-executive directors, with Mr. Xie Yuxuan serving as the chairman[117]. - The company adopted a code of conduct for securities trading by directors, ensuring compliance with GEM listing rules[116].

Quantum Thinking Limited 量 子 思 維 有 限 公 司 （於開曼群島註冊成立之有限公司） （股份代號：8050） 截 至 二 零 二 三 年 六 月 三 十 日 止 三 個 月 之 第 一 季 度 業 績 公 告 香港聯合交易所有限公司（「聯交所」）GEM的特色 GEM的定位，乃為中小型公司提供一個上市的市場，此等公司相比起其他在 主板上市的公司帶有較高投資風險。有意投資的人士應了解投資於該等公司 的潛在風險，並應經過審慎周詳的考慮後方作出投資決定。 由於GEM上市公司普遍為中小型公司，在GEM買賣的證券可能會較於主板買 賣之證券承受較大的市場波動風險，同時無法保證在GEM買賣的證券會有高 流通量的市場。 香港交易及結算所有限公司及聯交所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。 本公告之資料乃遵照聯交所GEM證券上市規則（「GEM上市規則」）而刊載，旨 在提供有關量子思維有限公司（「本公司」）資料。本公司的董事（「董事」）願就本 公告的資料共同及個別承擔全部責任。各董 ...

Business Environment and Strategy - The information system solution industry in China faced a harsh business environment during the financial year ended March 31, 2023, due to a slowing economy and geopolitical tensions[13]. - The Group adopted a prudent approach to investment in research and development, shifting focus from system development to operation[14]. - The overall market volatility and regulatory changes present ongoing challenges for the Group's operations[13]. - The Group's approach to business development is characterized by prudence in response to a volatile and complicated business environment[27]. - The Group aims to control operating costs by developing less labor-intensive businesses while broadening its income streams[71]. - The Group's strategy includes maintaining a prudent approach to business development amid a volatile economic environment[70]. Diversification and New Business Initiatives - The Group is diversifying into selling wearable devices, such as smartwatches for children, bundled with telecommunications services[14]. - The Group's diversification strategy is aimed at building brand awareness in the end-user market[14]. - The Group is preparing to launch a front-end business selling smartwatches for children, which will be bundled with telecommunication services from a major telecom carrier in China[25]. - The Group plans to expand its value-added services, particularly short-messaging services, and diversify into selling wearable devices like smartwatches for children in 2023[71]. - The smartwatches will be equipped with the Group's IT software and will allow parents to track their children via GPS, enhancing brand awareness in the end-user market[73]. Financial Performance - The Group recorded a revenue of approximately HK$18,290,000 for the year ended 31 March 2023, representing a decrease of approximately 44% compared to HK$32,800,000 for the previous period[91]. - Loss attributable to owners of the Company for the Reporting Period was approximately HK$10,108,000, compared to a profit of approximately HK$18,189,000 for the previous period[92]. - Revenue from hardware sales decreased by approximately 13%, while revenue from services decreased by approximately 81% during the Reporting Period[93]. - Current assets as of 31 March 2023 were approximately HK$32,656,000, including cash and cash equivalents of approximately HK$3,493,000[95]. - The liquidity ratio of the Group was 1.49:1 as of 31 March 2023, compared to 1.01:1 as of 31 March 2022[95]. - The total remuneration paid to employees for the Reporting Period was approximately HK$7,175,000, down from HK$9,458,000 in the previous period[105]. Regulatory and Compliance Issues - The Chinese government's tighter regulation of digital payment services impacted project timelines and scales[13]. - The company has adopted the corporate governance code as per GEM Listing Rules, ensuring compliance throughout the reporting period[128]. - The Group complied with the Corporate Governance Code throughout the reporting period, with some deviations noted regarding insurance coverage for directors and the separation of roles between chairman and CEO[123][126]. Risk Management and Governance - The company has established a risk management policy and reporting mechanism during the reporting period[142]. - The company has identified certain risk areas and implemented systematic risk identification and assessment processes[142]. - The Board is responsible for formulating the Group's overall strategy and approving financial statements and significant transactions[138]. - The Board composition includes both Executive and Independent Non-executive Directors, ensuring a balanced governance structure[132]. Investments and Financial Strategy - The Group's investment strategy focuses on maintaining liquidity and minimizing operational impact while achieving reasonable returns on idle funds[113]. - Significant investments classified as financial assets at fair value through other comprehensive income included a total fair value of approximately HK$8,210,000 as of March 31, 2023, with dividend income of approximately HK$426,000 during the year[115]. - The Group raised approximately HK$100 million through a subscription by issuing 450 million ordinary shares, with Happy On Holdings Limited holding 72.83% of the total issued share capital post-subscription[81]. Employee and Board Composition - As of March 31, 2023, the Group employed 29 employees, a decrease from 34 employees as of March 31, 2022, with total employee compensation amounting to approximately HK$7,175,000, down from HK$9,458,000 in the previous period[111]. - The company requires at least one-third of Directors to retire at each annual general meeting, ensuring rotation every three years[155]. - The company emphasizes the importance of board diversity to enhance performance quality and achieve strategic objectives[192].

Quantum Thinking Limited 量 子 思 維 有 限 公 司 （於開曼群島註冊成立之有限公司） （股份代號：8050） 截 至 二 零 二 三 年 三 月 三 十 一 日 止 年 度 的 末 期 業 績 公 告 香港聯合交易所有限公司（「聯交所」）GEM的特色 GEM的定位，乃為中小型公司提供一個上市的市場，此等公司相比起其他在 主板上市的公司帶有較高投資風險。有意投資的人士應了解投資於該等公司 的潛在風險，並應經過審慎周詳的考慮後方作出投資決定。 由於GEM上市公司普遍為中小型公司，在GEM買賣的證券可能會較於主板買 賣之證券承受較大的市場波動風險，同時無法保證在GEM買賣的證券會有高 流通量的市場。 香港交易及結算所有限公司及聯交所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。 本公告之資料乃遵照聯交所GEM證券上市規則（「GEM上市規則」）而刊載，旨 在提供有關量子思維有限公司（「本公司」）資料。本公司各董事（「董事」）願就本 公告的資料共同及個別地承擔全部責任。董事在作出 ...

Financial Performance - Revenue for the three months ended December 31, 2022, was HK$4,399,000, a decrease of 48.3% compared to HK$8,513,000 in the same period of 2021[7]. - Gross profit for the nine months ended December 31, 2022, was HK$1,843,000, down 32.8% from HK$2,745,000 in the previous year[7]. - Loss before income tax for the three months ended December 31, 2022, was HK$4,741,000, compared to a loss of HK$5,952,000 in the same period of 2021, representing a 20.3% improvement[7]. - Total comprehensive expense for the nine months ended December 31, 2022, was HK$11,685,000, a reduction of 35.5% from HK$18,040,000 in the previous year[9]. - Basic loss per share for the three months ended December 31, 2022, was HK$0.32, compared to HK$0.39 in the same period of 2021[10]. - The company reported a loss for the period attributable to owners of the Company of HK$4,365,000 for the three months ended December 31, 2022, down from HK$5,234,000 in the previous year[9]. - Administrative expenses for the nine months ended December 31, 2022, were HK$14,288,000, a decrease of 33.4% from HK$21,647,000 in the same period of 2021[7]. - Other income for the three months ended December 31, 2022, was HK$181,000, an increase of 14.6% compared to HK$158,000 in the same period of 2021[9]. - For the nine months ended 31 December 2022, the Group reported a loss attributable to owners of the Company of approximately HK$10,682,000[26]. - The Group had net liabilities of approximately HK$8,443,000 as of 31 December 2022[26]. - The accumulated losses increased to HK$230,388,000 as of 31 December 2022[26]. Assets and Liabilities - As of 31 December 2022, the Group's current liabilities exceeded its current assets by approximately HK$9,229,000[26]. - The total comprehensive expense for the period was HK$11,003,000, which includes a loss of HK$10,682,000 and an exchange difference of HK$321,000[26]. - As at 31 December 2022, total equity attributable to owners of the Company was HK$296,000, reflecting a decrease from previous periods[26]. - The Group's share capital remained unchanged at HK$135,625,000 as of 31 December 2022[26]. - The translation reserve showed a slight improvement, with a balance of HK$5,468,000 as of 31 December 2022[26]. Business Developments - The Group plans to dispose of Guangzhou YBDS IT Co., Ltd., which had net liabilities of approximately HK$24,561,000 as of 31 December 2022[28]. - The Group signed a contract in October 2022 to provide multimedia short messaging services for a major telecommunications carrier in Guangdong Province, which is expected to be profitable[28]. - The Group is focusing on business transformation and diversification to capitalize on the growing digital economy in China, particularly in IT software and system development[70]. - The Group is shifting its business focus towards the operation of IT systems and developing value-added services such as SMS for businesses and selling wearable devices[73]. - The Group's initiatives aim to expand income sources and provide long-term business development momentum amid a challenging operating environment[109]. Market Trends - The electronic signature market in China is projected to grow from RMB15.28 billion in 2021 to RMB21.71 billion in 2022, and further to RMB40.42 billion in 2024[66]. - The market for electronic signature software in China is expected to reach US$91.0 million in 2022, growing at a compound annual growth rate of 26.4% from 2022 to 2026[66]. - The AI software and services market in China grew by 23.5% to RMB 106.44 billion in 2021 and is expected to exceed RMB 200 billion by 2024[69]. - The market for AI software and applications in China is anticipated to increase from USD 5.28 billion in 2021 to USD 6.6 billion in 2022[71]. Regulatory and Compliance - The Group's financial statements have been prepared in accordance with Hong Kong Financial Reporting Standards[18]. - The unaudited condensed consolidated financial statements have been reviewed by the audit committee of the Company[25]. - The Audit Committee, established in May 2000, reviews the Group's audit findings and compliance with GEM Listing Rules[143]. - The unaudited consolidated results for the Reporting Period have been reviewed by the Audit Committee[144]. Shareholder Information - Mr. Ho Yeung held 18,083,500 ordinary shares, representing approximately 1.333% of the total issued ordinary shares of the Company as of December 31, 2022[121][123]. - Happy On was the beneficial owner of 987,888,771 ordinary shares, accounting for approximately 72.83% of the issued share capital as of December 31, 2022[127]. - The Company has 1,356,250,000 ordinary shares issued as of December 31, 2022[135]. - Mr. Chan is deemed to be interested in 987,888,771 shares held by Happy On, representing approximately 72.8% of the total shares[135].

Financial Performance - For the six months ended September 30, 2022, the revenue was HK$4,858,000, a decrease of 53.8% compared to HK$10,503,000 for the same period in 2021[7]. - The gross profit for the six months ended September 30, 2022, was HK$790,000, down 6.4% from HK$844,000 in the corresponding period of 2021[7]. - The loss before income tax for the six months ended September 30, 2022, was HK$7,258,000, representing a 41.1% improvement compared to a loss of HK$12,378,000 in the same period of 2021[7]. - Total comprehensive expense for the period attributable to owners of the Company was HK$6,596,000 for the six months ended September 30, 2022, compared to HK$10,220,000 for the same period in 2021, indicating a 35.7% reduction[15]. - Basic loss per share for the six months ended September 30, 2022, was HK$0.47, an improvement from HK$0.78 in the corresponding period of 2021[15]. - The company reported a loss for the period of HK$3,644,000 for the three months ended September 30, 2022, compared to a loss of HK$6,382,000 in the same period of 2021, marking a 42.9% improvement[7]. - The total comprehensive expense for the period, net of tax, was HK$6,692,000 for the six months ended September 30, 2022, down from HK$12,137,000 in the same period of 2021, indicating a 44.0% decrease[11]. - The company reported a loss for the period of HK$ (6,317,000) for the six months ended September 30, 2022, compared to a loss of HK$ (10,535,000) in the same period of 2021[22]. - Loss attributable to owners for the six months ended September 30, 2022, was HK$6,317,000, an improvement from HK$10,535,000 in the same period of 2021, reflecting a reduction in loss of 40.5%[92]. - Basic loss per share for the six months ended September 30, 2022, was calculated at HK$0.00465, compared to HK$0.00777 for the same period in 2021, indicating a 40.5% improvement[92]. Revenue Breakdown - Total revenue for the six months ended September 30, 2022, was HK$10,023,000, a decrease from HK$20,286,000 in the same period of 2021, representing a decline of 50.5%[56]. - Hardware revenue for the six months ended September 30, 2022, was HK$1,274,000, down from HK$9,660,000 in the same period of 2021, indicating a decrease of 86.8%[56]. - Service revenue for the six months ended September 30, 2022, was HK$8,749,000, compared to HK$10,626,000 in the same period of 2021, reflecting a decline of 17.6%[56]. - The company reported a total revenue from contracts with customers of HK$4,858,000 for the three months ended September 30, 2022, compared to HK$10,503,000 in the same period of 2021, a decline of 53.8%[56]. - Revenue recognized at a point in time for the three months ended September 30, 2022, was HK$235,000, down from HK$4,857,000 in the same period of 2021, a decrease of 95.2%[56]. - Revenue recognized over time for the three months ended September 30, 2022, was HK$4,623,000, compared to HK$5,646,000 in the same period of 2021, reflecting a decline of 18.1%[56]. Expenses and Costs - Administrative expenses decreased to HK$9,317,000 for the six months ended September 30, 2022, down from HK$14,797,000 in the corresponding period of 2021, reflecting a 37.1% reduction[7]. - Research and development costs for the six months ended September 30, 2022, were HK$822,000, down from HK$1,211,000 in 2021, a decrease of 32.1%[88]. - Employee benefit expenses for the six months ended September 30, 2022, totaled HK$3,710,000, compared to HK$5,127,000 in 2021, reflecting a reduction of 27.6%[88]. - The Group is actively taking measures to control administrative costs, including human resources optimization and management remuneration adjustments[39]. Cash Flow and Assets - For the six months ended September 30, 2022, the company reported a net cash used in operating activities of HK$ (7,034,000), an improvement from HK$ (9,521,000) in the same period of 2021[26]. - The company generated net cash from investing activities of HK$ 7,557,000 for the six months ended September 30, 2022, compared to HK$ 1,785,000 in the prior year[26]. - Cash and cash equivalents at the end of the period were HK$ 7,254,000, down from HK$ 9,971,000 at the end of the previous year[29]. - The company had trade and other receivables of HK$ 14,041,000 as of March 31, 2022, which decreased to HK$ 11,000 as of September 30, 2022[21]. - The Group's cash and cash equivalents as of September 30, 2022, were reported at HK$ 2,080,000[126]. Liabilities and Equity - As of September 30, 2022, total assets amounted to HK$ 35,838,000, while total liabilities were HK$ 39,932,000, resulting in net liabilities of HK$ 4,094,000[21]. - The total liabilities per condensed consolidated statement of financial position as of September 30, 2022, were HK$39,932,000, down from HK$54,956,000 as of March 31, 2022, a decrease of 27.2%[67]. - The total equity attributable to owners of the company as of September 30, 2022, was HK$ 4,111,000, a decrease from HK$ 10,707,000 as of April 1, 2022[22]. - As of 30 September 2022, the Group's current liabilities exceeded its current assets by approximately HK$4,094,000, resulting in net liabilities of approximately HK$3,441,000[39]. - The Group's trade payables as of September 30, 2022, totaled HK$ 8,360,000, compared to HK$ 31,006,000 as of March 31, 2022, indicating a significant reduction[110]. Business Developments and Contracts - The Group signed a contract in October 2022 to provide multimedia short messaging services for a major PRC telecommunications carrier, which is expected to be profitable[44]. - The Group is diversifying into value-added services such as short messaging services for businesses, including banks[171]. - CITIC Cyber Security signed a contract to build an infrastructure for real-name system management based on eCitizen digital identity verification technology[173]. - The Group is fulfilling a contract to build a unified digital authentication system for a transportation infrastructure design and construction firm[174]. - In September 2022, the Group signed a contract to sell data encryption devices and develop software for an information technology firm[174]. Market Trends and Future Outlook - The electronic signature market in China is projected to grow from RMB15.28 billion in 2021 to RMB21.71 billion in 2022 and RMB40.42 billion in 2024[170]. - The Chinese AI software and services market grew by 23.5% to RMB 106.44 billion in 2021 and is projected to exceed RMB 200 billion by 2024[171]. - The United States government imposed restrictions on the export of advanced chips (less than 14 nanometers) and related technology to China in October 2022, which may impact China's information system solution industry in the next two to three years[197]. - The Group is shifting its business focus towards the operation of information technology systems, diversifying into value-added services such as multimedia short messaging services for businesses[198].