HMVOD视频(08103) - 2021 - 中期财报

Report Information This section provides general information about the interim report and the company's compliance with listing requirements Cover Page This report is the interim report of hmvod Limited (Stock Code: 8103) for the six months ended September 30, 2020 - This report is the interim report of hmvod Limited (Stock Code: 8103) for the six months ended September 30, 2020[1] GEM Disclaimer and Responsibility Statement The GEM market provides a listing platform for small and medium-sized companies with higher investment risks, and investors should exercise caution. The information in this report is published in compliance with GEM Listing Rules, and directors jointly and individually assume full responsibility for its accuracy and completeness - The GEM market is positioned to provide a listing platform for small and medium-sized companies with higher investment risks compared to other listed companies on the Stock Exchange[2] - The information in this report is published in compliance with the GEM Listing Rules of the Stock Exchange, and the directors jointly and individually assume full responsibility for the information, confirming its accuracy, completeness, and absence of misleading or fraudulent content[3] Summary This section provides a high-level overview of the company's financial performance and key operational highlights for the reporting period Financial Highlights For the six months ended September 30, 2020, the company's revenue decreased by 23.2% to approximately HK$15.9 million, with continuing operations turning from profit to a loss of approximately HK$10.3 million, resulting in a basic loss per share of 72 HK cents. The Board does not recommend an interim dividend Key Financial Data for the Six Months Ended September 30, 2020 | Metric | Six Months Ended September 30, 2020 (HK$ Thousand) | Six Months Ended September 30, 2019 (HK$ Thousand) | | :--------------- | :--------------------------------- | :--------------------------------- | | Revenue | 15,900 | 20,700 | | Loss/(Profit) for the Period from Continuing Operations | (10,300) | 4,000 | | Basic Loss/(Profit) Per Share | (72) HK Cents | 30 HK Cents | | Interim Dividend | Not Recommended | Nil | - Revenue for the six months ended September 30, 2020, was approximately HK$15.9 million, a decrease of approximately 23.2% compared to the same period in 2019[4] - Loss from continuing operations for the six months ended September 30, 2020, was approximately HK$10.3 million (2019: profit of HK$4 million)[4] - The Board does not recommend an interim dividend for the six months ended September 30, 2020 (2019: nil)[4] Unaudited Condensed Consolidated Financial Statements This section presents the unaudited condensed consolidated financial statements, including the statement of profit or loss, financial position, changes in equity, and cash flows Condensed Consolidated Statement of Profit or Loss and Other Comprehensive Income For the six months ended September 30, 2020, the Group's revenue was HK$15,876 thousand, a significant decrease from HK$20,749 thousand in the prior year, with continuing operations shifting from a profit of HK$4,007 thousand to a loss of HK$10,266 thousand Condensed Consolidated Statement of Profit or Loss and Other Comprehensive Income (HK$ Thousand) | Metric (HK$ Thousand) | Six Months Ended September 30, 2020 | Six Months Ended September 30, 2019 | | :------------ | :------------------------ | :------------------------ | | Revenue | 15,876 | 20,749 | | Income | 15,876 | 20,741 | | Other Income and Gains | 245 | 14,158 | | Outsourcing Costs | (10,053) | (17,601) | | Amortization of Intangible Assets | (3,444) | (3,444) | | Selling Expenses | (1,618) | (1,083) | | Administrative Expenses | (7,926) | (5,635) | | Finance Costs | (3,910) | (3,913) | | Profit/(Loss) Before Tax | (10,830) | 3,223 | | Income Tax Expense | 564 | 784 | | Profit/(Loss) for the Period from Continuing Operations | (10,266) | 4,007 | | Profit/(Loss) for the Period Attributable to Owners of the Company | (10,266) | 3,970 | | Basic and Diluted Loss Per Share (HK Cents) | (72) | 30 | - For the six months ended September 30, 2020, the Group's revenue was HK$15,876 thousand, a decrease from HK$20,749 thousand in the prior year period[6] - Profit/(loss) for the period from continuing operations shifted from a HK$4,007 thousand profit in the prior year period to a HK$10,266 thousand loss in 2020[6] Condensed Consolidated Statement of Financial Position As of September 30, 2020, the Group's total non-current assets were HK$29,162 thousand, total current assets were HK$13,505 thousand, and total current liabilities were HK$113,850 thousand, resulting in net current liabilities of HK$100,345 thousand. The deficit attributable to owners of the company was HK$72,797 thousand Condensed Consolidated Statement of Financial Position (HK$ Thousand) | Metric (HK$ Thousand) | As of September 30, 2020 (Unaudited) | As of March 31, 2020 (Audited) | | :------------ | :-------------------------- | :------------------------ | | Total Non-current Assets | 29,162 | 32,772 | | Total Current Assets | 13,505 | 7,107 | | Total Current Liabilities | 113,850 | 161,034 | | Net Current Liabilities | (100,345) | (153,927) | | Total Assets Less Current Liabilities | (71,183) | (121,155) | | Deficit Attributable to Owners of the Company | (72,797) | (122,715) | | Non-controlling Interests | (9,496) | (9,689) | | Total Non-current Liabilities | 11,110 | 11,249 | - As of September 30, 2020, the Group's total non-current assets were HK$29,162 thousand, and total current assets were HK$13,505 thousand[11] - Total current liabilities were HK$113,850 thousand, resulting in net current liabilities of HK$100,345 thousand[11] - The deficit attributable to owners of the company was HK$72,797 thousand[13] Condensed Consolidated Statement of Changes in Equity For the six months ended September 30, 2020, accumulated losses attributable to owners of the company increased from HK$634,152 thousand as of April 1, 2020, to HK$644,622 thousand, while the deficit attributable to owners of the company decreased from HK$122,715 thousand to HK$72,797 thousand, primarily influenced by profit and total comprehensive income for the period Condensed Consolidated Statement of Changes in Equity (HK$ Thousand) | Metric (HK$ Thousand) | Share Capital | Share Premium | Capital Reserve | Exchange Reserve | Accumulated Losses | Subtotal | Non-controlling Interests | Total | | :------------ | :--- | :------- | :------- | :------- | :------- | :--- | :--------- | :--- | | April 1, 2019 (Audited) | 142 | 510,565 | 1,200 | 1,586 | (597,004)| (83,511) | (8,091) | (91,602) | | Profit and Total Comprehensive Income for the Period | – | – | – | – | 4,214 | 4,214 | (244) | 3,970 | | September 30, 2019 (Unaudited) | 142 | 510,565 | 1,200 | 1,586 | (592,790)| (79,297) | (8,335) | (87,632) | | April 1, 2020 (Audited) | 142 | 510,565 | 1,200 | (470) | (634,152)| (122,715)| (9,689) | (132,404)| | Profit and Total Comprehensive Income for the Period | 711 | 59,748 | – | (71) | (10,470) | 49,918 | 193 | 50,111 | | September 30, 2020 (Unaudited) | 853 | 570,313 | 1,200 | (541) | (644,622)| (72,797) | (9,496) | (82,293) | - As of September 30, 2020, accumulated losses attributable to owners of the company were HK$(644,622) thousand, compared to HK$(634,152) thousand as of April 1, 2020[15] - The deficit attributable to owners of the company decreased from HK$(122,715) thousand as of April 1, 2020, to HK$(72,797) thousand as of September 30, 2020[15] Condensed Consolidated Cash Flow Statement For the six months ended September 30, 2020, the Group recorded a net cash inflow from operating activities of HK$8,768 thousand, compared to a net outflow of HK$230 thousand in the prior year period. Net cash used in financing activities was HK$3,910 thousand. Cash and cash equivalents at the end of the period amounted to HK$6,383 thousand Condensed Consolidated Cash Flow Statement (HK$ Thousand) | Metric (HK$ Thousand) | Six Months Ended September 30, 2020 | Six Months Ended September 30, 2019 | | :------------ | :------------------------ | :------------------------ | | Net Cash from Operating Activities | 8,768 (Inflow) | (230) (Outflow) | | Net Cash Used in Financing Activities | (3,910) | (646) | | Net Decrease in Cash and Cash Equivalents | 4,858 | (876) | | Cash and Cash Equivalents at Beginning of Period | 1,525 | 2,546 | | Cash and Cash Equivalents at End of Period | 6,383 | 1,670 | - For the six months ended September 30, 2020, net cash inflow from operating activities was HK$8,768 thousand, compared to a net outflow of HK$230 thousand in the prior year period[21] - Net cash used in financing activities was HK$3,910 thousand, compared to HK$646 thousand in the prior year period[22] - Cash and cash equivalents as of September 30 were HK$6,383 thousand, compared to HK$1,670 thousand in the prior year period[25] Notes to Financial Statements This section provides detailed notes to the condensed consolidated financial statements, explaining the basis of preparation, significant accounting policies, and breakdowns of key financial figures General Information and Basis of Preparation The company is an exempted company incorporated in the Cayman Islands and listed on GEM. The interim financial statements are prepared in accordance with HKAS 34 and GEM Listing Rules, presented at historical cost in HKD. As of September 30, 2020, the Group's current liabilities exceeded current assets by approximately HK$100,345 thousand, and it incurred a loss from continuing operations of approximately HK$10,266 thousand, indicating significant uncertainty. The Board has considered several measures to ensure going concern for the next 12 months - The Company is an exempted company incorporated in the Cayman Islands, with its shares listed on GEM[30] - The interim financial statements are prepared in accordance with Hong Kong Accounting Standard 34 issued by the Hong Kong Institute of Certified Public Accountants and the applicable disclosure requirements of Chapter 18 of the GEM Listing Rules of the Stock Exchange[31] - As of September 30, 2020, the Group's current liabilities exceeded its current assets by approximately HK$100,345,000, and it incurred a loss from continuing operations of approximately HK$10,266,000, indicating significant uncertainty[33] - The Directors believe the Group will have sufficient working capital for at least the next 12 months from the approval date of the interim financial statements, having considered measures such as increasing revenue, extending loan maturities, negotiating with creditors, rights issue fundraising, expanding credit facilities, and implementing cost control measures[35][36][37][45] Revenue Analysis For the six months ended September 30, 2020, the Group's total revenue was HK$15,876 thousand, primarily from OTT services (HK$15,690 thousand), with professional services contributing HK$186 thousand. The lending business has been discontinued Revenue Source Analysis (HK$ Thousand) | Revenue Source (HK$ Thousand) | Six Months Ended September 30, 2020 | Six Months Ended September 30, 2019 | | :---------------- | :------------------------ | :------------------------ | | Professional Service Fees | 186 | 1,187 | | OTT Services | 15,690 | 19,554 | | Lending Business | – | 8 | | Total Revenue | 15,876 | 20,749 | - Revenue refers to income from professional services, lending business, and over-the-top ('OTT') services (net of sales tax, if any)[46] Segment Information The Group's operating segments include professional services, OTT services, and lending business. For the six months ended September 30, 2020, OTT services was the only segment with a positive segment result, while professional services recorded a loss and the lending business was terminated. Segment assets and liabilities are also analyzed by business segment - The Group's operations have diversified into operating segments including professional services, OTT services, and lending business[48] Operating Segments For the six months ended September 30, 2020, OTT services contributed HK$15,690 thousand in revenue and a positive segment result of HK$1,454 thousand, while professional services generated HK$186 thousand in revenue with a segment loss of HK$14 thousand. The lending business has been terminated Revenue and Results by Operating Segment (HK$ Thousand) | Segment (HK$ Thousand) | 2020 Revenue | 2019 Revenue | 2020 Segment Result | 2019 Segment Result | | :------------ | :--------- | :--------- | :------------- | :------------- | | Professional Services | 186 | 1,187 | (14) | (45) | | OTT Services | 15,690 | 19,554 | 1,454 | (4,986) | | Lending Business | – | 8 | – | (37) | | Consolidated | 15,876 | 20,749 | 1,440 | (5,068) | - OTT services recorded HK$15,690 thousand in revenue and a HK$1,454 thousand segment result in 2020, while professional services generated HK$186 thousand in revenue with a HK$14 thousand segment loss[49] Segment Assets and Liabilities As of September 30, 2020, the OTT services segment assets amounted to HK$32,934 thousand. Unallocated assets, including plant and equipment, other receivables, deposits and prepayments, and bank balances and cash, totaled approximately HK$9,733 thousand. Unallocated liabilities primarily comprised other payables, bank and other borrowings, bonds, and deferred tax liabilities Segment Assets and Liabilities (HK$ Thousand) | Metric (HK$ Thousand) | As of September 30, 2020 (Unaudited) | As of March 31, 2020 (Audited) | | :------------ | :-------------------------- | :------------------------ | | Segment Assets | | | | Professional Services | – | 20 | | OTT Services | 32,934 | 35,376 | | Unallocated Assets | 9,733 | 4,483 | | Total Assets | 42,667 | 39,879 | | Unallocated Liabilities | | | | Other Payables | 75,301 | 74,701 | | Bank and Other Borrowings | 20,689 | 47,095 | | Bonds | 18,998 | 18,826 | | Deferred Tax Liabilities | 1,989 | 2,557 | | Tax Payable | 377 | 380 | - As of September 30, 2020, OTT services segment assets were HK$32,934 thousand[52] - Unallocated liabilities primarily included HK$75,301 thousand in other payables, HK$20,689 thousand in bank and other borrowings, HK$18,998 thousand in bonds, and HK$1,989 thousand in deferred tax liabilities[52] Other Income and Gains For the six months ended September 30, 2020, total other income and gains amounted to HK$245 thousand, a significant decrease from HK$14,158 thousand in the prior year period, primarily due to a HK$14,155 thousand gain on deemed acceptance of promissory notes in the prior year Other Income and Gains (HK$ Thousand) | Income Source (HK$ Thousand) | Six Months Ended September 30, 2020 | Six Months Ended September 30, 2019 | | :---------------- | :------------------------ | :------------------------ | | Interest Income | – | 2 | | Gain on Deemed Acceptance of Promissory Notes | – | 14,155 | | Others | 245 | 1 | | Total | 245 | 14,158 | - For the six months ended September 30, 2020, total other income and gains amounted to HK$245 thousand, a significant decrease from HK$14,158 thousand in the prior year period[54] - This decrease was primarily due to a HK$14,155 thousand gain on deemed acceptance of promissory notes in the prior year period[54] Finance Costs For the six months ended September 30, 2020, finance costs totaled HK$3,910 thousand, largely consistent with HK$3,913 thousand in the prior year period, primarily comprising interest on short-term loans and bonds Finance Costs (HK$ Thousand) | Finance Costs (HK$ Thousand) | Six Months Ended September 30, 2020 | Six Months Ended September 30, 2019 | | :---------------- | :------------------------ | :------------------------ | | Interest on Promissory Notes | – | 380 | | Interest on Short-term Loans | 3,128 | 2,647 | | Interest on Bonds | 736 | 886 | | Others | 46 | – | | Total | 3,910 | 3,913 | - For the six months ended September 30, 2020, total finance costs amounted to HK$3,910 thousand, largely consistent with HK$3,913 thousand in the prior year period[55] Income Tax Expense For the six months ended September 30, 2020, no Hong Kong profits tax was provided as the Group had no estimated assessable profits from Hong Kong, and the standard corporate income tax rate in China is 25% - No Hong Kong profits tax was provided in the unaudited condensed consolidated financial statements for the six months ended September 30, 2020, and 2019, as there were no estimated assessable profits arising in Hong Kong[57] - Under the PRC Enterprise Income Tax Law, the standard tax rate is 25%[57] Profit/(Loss) for the Period from Continuing Operations For the six months ended September 30, 2020, the loss for the period from continuing operations was HK$10,266 thousand, with staff costs, amortization of intangible assets, and depreciation being the primary expense items Key Expense Items (HK$ Thousand) | Expense Item (HK$ Thousand) | Six Months Ended September 30, 2020 | Six Months Ended September 30, 2019 | | :---------------- | :------------------------ | :------------------------ | | Staff Costs | 2,924 | 3,367 | | Amortization of Intangible Assets | 3,444 | 3,444 | | Depreciation | 275 | 282 | | Operating Lease | – | 74 | - Profit/(loss) for the period from continuing operations is derived after deducting items such as staff costs, amortization of intangible assets, depreciation, and operating leases[58] Dividends The Board does not recommend the payment of any interim dividend for the six months ended September 30, 2020, consistent with the prior year period - The Board does not recommend the payment of any dividend for the six months ended September 30, 2020 (2019: nil)[59] Earnings/(Loss) Per Share For the six months ended September 30, 2020, the basic and diluted loss per share attributable to owners of the company was 72 HK cents, compared to a profit of 30 HK cents per share in the prior year period. The weighted average number of ordinary shares used for calculation was 14,614,367 Earnings/(Loss) Per Share (HK Cents) | Metric (HK Cents) | Six Months Ended September 30, 2020 | Six Months Ended September 30, 2019 | | :---------- | :------------------------ | :------------------------ | | Basic and Diluted Loss Per Share (Continuing Operations) | (72) | 30 | | Basic and Diluted Loss Per Share (Discontinued Operations) | – | (0.26) | Weighted Average Number of Ordinary Shares for Basic Earnings/(Loss) Per Share Calculation | Metric | Six Months Ended September 30, 2020 | Six Months Ended September 30, 2019 | | :--- | :------------------------ | :------------------------ | | Weighted Average Number of Ordinary Shares for Basic Earnings/(Loss) Per Share Calculation | 14,614,367 | 14,225,687 | - The basic and diluted loss per share from continuing operations attributable to owners of the company was 72 HK cents, compared to a profit of 30 HK cents per share in the prior year period[79] Trade and Other Receivables As of September 30, 2020, total trade and bills receivables amounted to HK$5,074 thousand, an increase from HK$4,151 thousand as of March 31, 2020, with receivables aged 0 to 30 days accounting for the largest proportion Trade and Other Receivables (HK$ Thousand) | Aging (HK$ Thousand) | As of September 30, 2020 (Unaudited) | As of March 31, 2020 (Audited) | | :------------ | :-------------------------- | :------------------------ | | Trade and Bills Receivables | 5,074 | 4,151 | | Other Receivables | 58 | 278 | | Total | 5,132 | 4,429 | Aging Analysis of Trade and Bills Receivables (HK$ Thousand) | Aging (HK$ Thousand) | As of September 30, 2020 (Unaudited) | As of March 31, 2020 (Audited) | | :------------ | :-------------------------- | :------------------------ | | 0 to 30 days | 2,790 | 1,656 | | 31 to 90 days | 1,376 | 1,622 | | Over 90 days | 908 | 873 | | Total | 5,074 | 4,151 | - As of September 30, 2020, trade and bills receivables amounted to HK$5,074 thousand, an increase from HK$4,151 thousand as of March 31, 2020[82] Trade and Other Payables As of September 30, 2020, total trade and other payables amounted to HK$82,907 thousand, a decrease from HK$86,425 thousand as of March 31, 2020, with accruals and other payables constituting the major portion Trade and Other Payables (HK$ Thousand) | Item (HK$ Thousand) | As of September 30, 2020 (Unaudited) | As of March 31, 2020 (Audited) | | :------------ | :-------------------------- | :------------------------ | | Trade Payables | 7,606 | 11,723 | | Accruals and Other Payables | 75,301 | 74,702 | | Total | 82,907 | 86,425 | Aging Analysis of Trade Payables (HK$ Thousand) | Aging (HK$ Thousand) | As of September 30, 2020 (Unaudited) | As of March 31, 2020 (Audited) | | :------------ | :-------------------------- | :------------------------ | | 0 to 30 days | 1,187 | 676 | | 31 to 90 days | 1,083 | 2,499 | | Over 90 days | 5,336 | 8,548 | | Total | 7,606 | 11,723 | - As of September 30, 2020, total trade and other payables amounted to HK$82,907 thousand, a decrease from HK$86,425 thousand as of March 31, 2020[85] Bank and Other Borrowings As of September 30, 2020, the Group's other borrowings amounted to HK$20,689 thousand, a significant decrease from HK$64,095 thousand as of March 31, 2020 Bank and Other Borrowings (HK$ Thousand) | Item (HK$ Thousand) | As of September 30, 2020 (Unaudited) | As of March 31, 2020 (Audited) | | :------------ | :-------------------------- | :------------------------ | | Other Borrowings | 20,689 | 64,095 | - As of September 30, 2020, other borrowings amounted to HK$20,689 thousand, a significant decrease from HK$64,095 thousand as of March 31, 2020[89] Share Capital As of September 30, 2020, the company's authorized share capital was 20,000,000,000 ordinary shares of HK$0.01 each, totaling HK$200,000 thousand. The issued and fully paid share capital was 85,354,122 ordinary shares of HK$1 each, totaling HK$853 thousand Share Capital Structure (HK$ Thousand) | Share Capital Type | Number of Shares | Par Value (HK$ Thousand) | | :------- | :------- | :------------ | | Authorised Share Capital | 20,000,000,000 | 200,000 | | Issued and Fully Paid Share Capital | 85,354,122 | 853 | - As of September 30, 2020, the authorized share capital was 20,000,000,000 ordinary shares of HK$0.01 each, totaling HK$200,000 thousand[93] - The issued and fully paid share capital was 85,354,122 ordinary shares of HK$1 each, totaling HK$853 thousand[95] Share Premium and Reserves Changes in the Group's reserves during the period are presented in the unaudited condensed consolidated statement of changes in equity - Changes in the Group's reserves during the period are set out in the unaudited condensed consolidated statement of changes in equity[97] Management Discussion and Analysis This section provides an overview of the Group's business performance, financial results, liquidity, and future outlook, including strategic initiatives and risk factors Business Performance and Prospects The Group strategically expanded its cybersecurity professional services and remains optimistic about its OTT services business. The lending business was sold in December 2019. The Group will continue to seek investment and acquisition opportunities to expand its business scope beyond the IT industry, including renewable energy, finance, and other traditional businesses - The Group strategically expanded its professional services in cybersecurity services and solutions[99] - The lending business was sold to an independent third party in December 2019, primarily affected by unforeseen force majeure events, including social unrest in Hong Kong and the recent worsening situation due to the coronavirus outbreak[106] - The Group remains optimistic about its OTT services business segment, but revenue for the six months ended September 30, 2020, decreased due to the spread of COVID-19 and social unrest[107] - The Group will continue to seek opportunities to create value for shareholders by investing in and/or acquiring interests in companies or projects with promising development prospects, potentially expanding into renewable energy, the financial industry, and more traditional non-IT businesses[108] Professional Services The Group's professional services team focuses on enterprise cybersecurity solutions and risk management, offering services such as sprint mode consulting, physical and cybersecurity assessments, IT architecture design, security equipment implementation, IT business policy monitoring, penetration testing, vulnerability management, and DDoS protection. For the six months ended September 30, 2020, professional services revenue decreased due to project suspensions or delays caused by the COVID-19 pandemic - The professional services team provides cybersecurity services and solutions, including sprint mode consulting, physical and cybersecurity assessments, building and designing secure IT architectures, implementing security equipment, and monitoring IT business policies[99] - Services cover four major information security services: general IT security monitoring review and security risk assessment, external and internal penetration testing, risk-based cybersecurity protection and implementation, and outsourced 24x7 managed IT and security services[100][102][103][104] - For the six months ended September 30, 2020, professional services revenue was approximately HK$200,000 (2019: HK$1,200,000), a decrease due to the 'COVID-19' pandemic causing some clients to suspend or postpone their projects during the period[104] Lending Business The lending business was sold to an independent third party in December 2019, primarily influenced by uncertainties arising from social unrest in Hong Kong and the recent coronavirus outbreak. Interest income from the lending business significantly decreased for the year ended March 31, 2020 - In December 2019, the lending business was sold to an independent third party due to uncertainties faced by Hong Kong from social unrest since June 2019[106] Lending Business Interest Income (HK$ Thousand) | Metric (HK$ Thousand) | Year Ended March 31, 2020 | Year Ended March 31, 2019 | | :------------ | :---------------------- | :---------------------- | | Interest Income | 7 | 60 | - For the year ended March 31, 2020, interest income from the lending business was approximately HK$7,000 (2019: HK$60,000)[106] OTT Services OTT services provide multimedia-related services and content in Hong Kong through various platforms, and the Group is optimistic about its prospects. However, for the six months ended September 30, 2020, OTT services revenue decreased to approximately HK$15.7 million from HK$19.6 million in the prior year period, mainly due to business plan delays caused by the COVID-19 pandemic and social unrest - OTT services provide multimedia-related services and content in Hong Kong through various platforms, and the Group is optimistic about this business segment[107] - For the six months ended September 30, 2020, revenue from OTT services was approximately HK$15.7 million (2019: HK$19.6 million), a decrease primarily due to business plan delays caused by the spread of COVID-19 and social unrest[107] Future Prospects The Group will continue to seek investment and acquisition opportunities to create shareholder value by investing in or acquiring interests in companies or projects with promising development prospects. The business scope may expand beyond the IT industry to include renewable energy, finance, and other traditional businesses - The Group will continue to seek opportunities to create value for shareholders by investing in and/or acquiring interests in companies or projects with promising development prospects[108] - The business scope may expand beyond the IT industry to include renewable energy and other 'green' businesses, the financial industry, and more traditional non-IT businesses[108] Financial Performance For the six months ended September 30, 2020, the Group's revenue was approximately HK$15.9 million, a 23.2% year-on-year decrease. Other expenses increased by approximately 100% to HK$6.3 million, mainly due to increased legal and professional fees related to a rights issue. Finance costs remained at approximately HK$3.9 million. The loss attributable to owners of the company was approximately HK$10.5 million, compared to a profit of HK$4.2 million in the prior year period Financial Performance Overview (HK$ Thousand) | Metric (HK$ Thousand) | Six Months Ended September 30, 2020 | Six Months Ended September 30, 2019 | Change (%) | | :------------ | :------------------------ | :------------------------ | :------- | | Revenue | 15,900 | 20,700 | -23.2% | | Other Expenses | 6,300 | 3,100 | +100% | | Finance Costs | 3,900 | 3,900 | 0% | | Loss/(Profit) Attributable to Owners of the Company | (10,500) | 4,200 | Turned from Profit to Loss | - For the six months ended September 30, 2020, the Group recorded revenue of approximately HK$15.9 million, a decrease of approximately 23.2% compared to the same period in 2019[109] - Other expenses increased by approximately 100% to approximately HK$6.3 million from approximately HK$3.1 million in the prior year period, primarily due to increased legal and professional fees related to the rights issue in September 2020[109] - The loss attributable to owners of the company was approximately HK$10.5 million (2019: profit of HK$4.2 million)[109] Liquidity, Financial Resources and Capital Structure For the six months ended September 30, 2020, the company did not issue any equity securities for cash. The gearing ratio is not applicable as the Group recorded a deficit attributable to owners of the company. The Board continues to seek opportunities to attract more investors, expand the shareholder base, reduce accumulated losses, and enhance fundraising flexibility - For the six months ended September 30, 2020, the company did not issue any equity securities for cash[111] - As the Group recorded a deficit attributable to owners of the company as of September 30, 2020, and March 31, 2020, the gearing ratio is not applicable for both reporting periods[113] - The Board continues to seek opportunities to attract more investors, expand the shareholder base, reduce accumulated losses, and enhance fundraising flexibility[112] Foreign Exchange Risk For the six months ended September 30, 2020, the Group's operations primarily used HKD and RMB as functional currencies, experiencing only minor exchange rate fluctuations, thus no financial instruments were used for hedging - For the six months ended September 30, 2020, the Group experienced only minor exchange rate fluctuations as its operations primarily used HKD and RMB as functional currencies[114] - As the Group considers the risk of exchange rate differences to be insignificant, no financial instruments were used for hedging purposes[114] Material Investments, Acquisitions and Disposals For the six months ended September 30, 2020, the Group did not complete any material acquisitions or disposals - For the six months ended September 30, 2020, no material acquisitions or disposals were completed[115] Employees and Remuneration Policy As of September 30, 2020, the Group employed 26 staff, with total staff costs of approximately HK$2.9 million, a decrease from the prior year period. The remuneration policy aligns with market practices and is determined based on individual performance and experience Employee and Remuneration Overview | Metric | As of September 30, 2020 | As of September 30, 2019 | | :--- | :---------------- | :---------------- | | Number of Employees | 26 | 26 | | Total Staff Costs (HK$ Thousand) | 2,900 | 3,400 | - As of September 30, 2020, the Group employed 26 staff (2019: 26), including executive directors[116] - Total staff costs (including directors' emoluments) for the six-month review period were approximately HK$2.9 million (2019: HK$3.4 million)[116] - The Group's remuneration policy aligns with current market practices and is determined based on individual employee performance and experience[116] Pledged Assets and Contingent Liabilities As of September 30, 2020, the Group had no material pledged assets or contingent liabilities - As of September 30, 2020, the Group had no material pledged assets or contingent liabilities[117] Share Option Scheme This section details the company's share option scheme, including its purpose, eligible participants, share limits, subscription price, and duration Purpose of the Scheme The scheme aims to provide participants with an opportunity to acquire a proprietary interest in the company, encouraging them to enhance the value of the company and its shares for the benefit of the company and its shareholders as a whole - The purpose of the scheme is to provide participants with an opportunity to acquire a proprietary interest in the company and to encourage them to strive to enhance the value of the company and its shares, benefiting the company and its shareholders as a whole[119] Participants Eligible participants include directors (executive, non-executive, and independent non-executive) and employees who have contributed or will contribute to the Group, as well as consultants, advisors, distributors, contractors, suppliers, agents, customers, business partners, joint venture partners, promoters, service providers, shareholders, co-investors, and lenders of any Group member company or investment entity - Participant categories include any directors (including executive, non-executive, and independent non-executive directors) and employees of the Group or any entity whose equity is held by any member company of the Group, whom the Board in its absolute discretion considers to have contributed or will contribute to the Group, as well as any consultants, advisors, distributors, contractors, suppliers, agents, customers, business partners, joint venture partners, promoters, service providers, shareholders, co-investors, lenders, or persons with business relationships with any member company of the Group or any investment entity[120] Maximum Number of Shares The maximum number of shares that may be issued upon exercise of all outstanding options granted under this scheme and any other share option schemes of the company shall not exceed 30% of the company's issued share capital from time to time. The scheme mandate limit is 10% of the company's issued share capital as of the adoption date and can be refreshed with shareholder approval, but not exceeding 10% of the issued share capital on the date of approval for refreshment - The maximum number of shares that may be issued upon exercise of all outstanding options granted under this scheme and any other share option schemes of the company shall not exceed 30% of the company's issued share capital from time to time ('Scheme Limit')[121] - The maximum number of shares for options that may be granted under this scheme shall not exceed 10% of the company's issued share capital as of the adoption date ('Scheme Mandate Limit')[121] - The Scheme Mandate Limit may be refreshed at any time with prior shareholder approval, provided that in no circumstances shall it exceed 10% of the company's issued share capital on the date of approval for refreshment[123] Maximum Entitlement of Each Participant The maximum number of shares for options that may be granted to a single specific grantee (together with shares under other schemes) within any 12-month period shall not exceed 1% of the issued shares. Any grant exceeding this limit requires separate shareholder approval - The maximum number of shares for options that may be granted to a single specific grantee under this scheme within any 12-month period shall not exceed 1% of the issued shares ('Individual Limit')[125] - The company may grant options exceeding the Individual Limit to a participant with separate shareholder approval at a general meeting, provided that the proposed grantee and their associates abstain from voting[125] Subscription Price of Shares The subscription price for shares is determined by the Board at its sole discretion but shall not be less than the highest of the closing price of the shares on the Stock Exchange on the date of grant, the average closing price for the five business days immediately preceding the date of grant, and the par value of the shares - The subscription price is determined by the Board at its sole discretion but shall not be less than the highest of: the closing price of the shares as quoted on the Stock Exchange's daily quotation sheet on the date of grant; the average closing price of the shares as quoted on the Stock Exchange's daily quotation sheet for the five business days immediately preceding the date of grant; and the par value of the shares[126] Duration of the Scheme The share option scheme is valid for ten years from the adoption date. After this period, no further options may be offered or granted, but options granted during the validity period will remain exercisable - Subject to the provisions of the scheme, the scheme shall be valid for ten years from the adoption date ('Ten-Year Period')[128] - After the relevant period, no further options may be offered or granted, but the provisions of the scheme shall remain in full force and effect in all other respects, and options granted during the validity period of the scheme shall continue to be exercisable[128] Exercise of Share Options Options may be exercised in full or in part by the grantee in accordance with the scheme terms, requiring written notice to the company along with full remittance of the subscription price. The company shall allot and issue the relevant shares within 28 days of receiving the notice and auditor's certificate - Options may be exercised in full or in part by the grantee in accordance with the terms of the scheme, provided that written notice is given to the company, specifying that the options have been exercised and the number of shares exercised. Each notice must be accompanied by the full remittance of the subscription price multiplied by the number of shares specified in the notice[129] - Within 28 days of receiving the notice, the auditor's certificate, or the company's independent financial advisor's certificate (if applicable), the company shall allot and issue the relevant number of shares to the grantee accordingly[129] Minimum Vesting Period Under the scheme, there is no minimum vesting period before options can be exercised, nor are there any performance targets that grantees must achieve - Under the scheme, there is no minimum vesting period before options can be exercised, nor are there any performance targets that grantees must achieve before exercising duly granted options[130] Time of Acceptance and Acceptance Payment An offer is deemed accepted and options granted, accepted, and effective upon the company's receipt of a duly signed letter from the grantee (specifying the number of shares accepted) and a non-refundable remittance of HK$1.00 as consideration for the grant - An offer shall be deemed accepted and options granted, accepted, and effective upon the company's receipt of a duplicate letter, duly signed by the grantee and clearly stating the number of shares offered and accepted by the grantee, together with a remittance of HK$1.00 as consideration payable to the company for the grant of shares[131] - Such remittance shall not be refundable under any circumstances[131] Directors' and Major Shareholders' Information This section provides information on the interests of directors and major shareholders in the company's securities, as well as their interests in contracts and competing businesses Directors' and Chief Executive's Interests in Securities As of September 30, 2020, none of the company's directors or chief executive had any interests or short positions in the shares, underlying shares, or debentures of the company or any of its associated corporations that are required to be disclosed under Part XV of the Securities and Futures Ordinance - As of September 30, 2020, none of the company's directors or chief executive had any interests or short positions in the shares, underlying shares, or debentures of the company or any of its associated corporations that are required to be notified to the company and the Stock Exchange under Part XV of the Securities and Futures Ordinance[135] Major Shareholders' Interests in Securities As of September 30, 2020, Ms. Leung Lai Shan, Mr. Mu Kejia, and Kingston Securities Limited were major shareholders, holding 9.96%, 9.96%, and 9.37% interests, respectively, in the company's issued share capital Major Shareholders' Shareholding | Shareholder Name | Capacity | Number of Shares Held | Approximate Percentage of Shareholding | | :----------------- | :------- | :----------- | :--------------- | | Leung Lai Shan | Beneficial Owner | 8,500,000 | 9.96% | | Mu Kejia | Beneficial Owner | 8,500,000 | 9.96% | | Kingston Securities Limited | Beneficial Owner | 8,004,000 | 9.37% | - As of September 30, 2020, Ms. Leung Lai Shan, Mr. Mu Kejia, and Kingston Securities Limited had interests or short positions in the company's shares that are required to be disclosed under Part XV of the Securities and Futures Ordinance[136] - Ms. Leung Lai Shan has a controlling interest in Hang Fook Investment Limited and is deemed to have an interest in the shares held by Hang Fook Investment Limited[138] - Ms. Polly Lee Yuet Wah has a controlling interest in Kingston Securities Limited and is deemed to have an interest in the shares held by Kingston Securities Limited[138] Directors' Interests in Contracts For the six months ended September 30, 2020, or at any time during this period, there were no material contracts to which the Group was a party and in which a director had a direct or indirect material interest - For the six months ended September 30, 2020, or at any time during this period, there were no material contracts to which the Group was a party and in which a director had a direct or indirect material interest related to the Group's business[140] Directors' Interests in Competing Business As of September 30, 2020, none of the directors or their associates had any business or interest in any business that competes or is likely to compete with the Group's business - As of September 30, 2020, none of the directors or their respective associates had any business or interest in any business that competes or is likely to compete with the Group's business[141] Corporate Governance This section outlines the company's corporate governance practices, including the audit committee, compliance with the corporate governance code, directors' securities transactions, and changes in directors' information Audit Committee The company has established an audit committee responsible for reviewing internal accounting procedures, evaluating, and reporting to the Board on other audit and accounting matters, including the appointment, fees, and performance of independent auditors. The Group's unaudited condensed consolidated financial statements for the six months ended September 30, 2020, have been reviewed by the audit committee - The company has established an audit committee and defined its written terms of reference in compliance with Rules 5.28 and 5.33 of the GEM Listing Rules and the Corporate Governance Code[142] - The company's audit committee is responsible for reviewing internal accounting procedures and evaluating and reporting to the Board on other audit and accounting matters, including the appointment of independent auditors, fees paid to independent auditors, and the performance of independent auditors[142] - The Group's unaudited condensed consolidated financial statements for the six months ended September 30, 2020, have been reviewed by the company's audit committee[142] Code on Corporate Governance Practices The company has adopted the code provisions set out in Appendix 15 of the GEM Listing Rules as its own code on corporate governance practices, and the directors believe that the code provisions have been complied with during the period without any material deviation - The company has adopted the code provisions set out in Appendix 15 of the GEM Listing Rules as its own code on corporate governance practices[143] - The directors believe that the company has complied with the code provisions set out in the code during the period without any material deviation[143] Directors' Securities Transactions The company has adopted the dealing rules stipulated in the GEM Listing Rules as the code of conduct for directors' securities transactions involving the company's securities. All directors have confirmed compliance with these rules, and there were no breaches during the period - The company has adopted the dealing rules stipulated in Rules 5.48 to 5.67 of the GEM Listing Rules as the code of conduct for directors' securities transactions involving the company's securities[144] - Following specific enquiries, all directors have confirmed compliance with the dealing rules and that there were no breaches during the six months ended September 30, 2020[144] Purchase, Sale or Redemption of Listed Securities During the six-month review period, neither the company nor any of its subsidiaries purchased, sold, or redeemed any of the company's listed securities - During the six-month review period, neither the company nor any of its subsidiaries purchased, sold, or redeemed any of the company's listed securities[145] Changes in Directors' Information Ms. Yeung Yuen Ching was appointed as an independent non-executive director of the company on October 9, 2020, and serves as the chairperson of the audit, nomination, and remuneration committees. Ms. Yeung possesses extensive legal and accounting background, having served as an independent non-executive director for several listed companies - Ms. Yeung Yuen Ching was appointed as an independent non-executive director of the company effective October 9, 2020[147] - Ms. Yeung has been appointed as the chairperson of the audit committee, nomination committee, and remuneration committee[153] - Ms. Yeung has been a practicing barrister in Hong Kong since June 2005 and is a member of CPA Australia, the Hong Kong Institute of Certified Public Accountants, and the Institute of Chartered Accountants in England and Wales, possessing extensive professional background[150] - Ms. Yeung has served as an independent non-executive director for several Main Board and GEM listed companies on the Stock Exchange[148][149] Report Approval and Publication This section details the composition of the Board of Directors and the publication information for the report Board Composition As of the report date, the Board comprises Mr. Lau Kei Lit (Chief Executive Officer), Ms. Ho Chi Na, Mr. Hou Zunzhong, Ms. Sin Pui Ying as executive directors, and Ms. Yeung Yuen Ching, Mr. Hou Chi Kit, Mr. Ma Tze On as independent non-executive directors - As of the date of this report, the Board comprises executive directors Mr. Lau Kei Lit (Chief Executive Officer), Ms. Ho Chi Na, Mr. Hou Zunzhong, and Ms. Sin Pui Ying[154] - The Board comprises independent non-executive directors Ms. Yeung Yuen Ching, Mr. Hou Chi Kit, and Mr. Ma Tze On[154] Report Publication This report will be published on the GEM website and the company's website for seven consecutive days from the date of publication - This report will be published on the 'Latest Company Announcements' page of the GEM website at http://www.hkgem.com and on the company's website at www.hmvod.com.hk[154](index=154&type=chunk)