Company Profile The group is a comprehensive fintech entity focusing on digital banking, payments, and lottery, aiming to be a global leader leveraging Macau's strategic advantages for financial digitalization and blockchain innovation About the Group AGTech is a comprehensive fintech group with core businesses in digital banking, digital payments, local consumer services, and lottery, serving as the exclusive lottery platform for Alibaba and Ant Group - The company's core businesses are categorized into four segments: Digital Banking, Digital Payments, Local Consumer Services, and Lottery Operations28 - The Group serves as the exclusive lottery platform for Alibaba Group and Ant Group, and is an associate member of the World Lottery Association (WLA) and Asia Pacific Lottery Association (APLA)27 Corporate Strategy and Objectives AGTech aims to be a leading global comprehensive fintech group, focusing on digital banking, payments, and local consumer services, leveraging Macau's strategic advantages to drive financial digitalization and blockchain finance in the Web 3.0 era - The company's strategic goal is to become a leading global comprehensive fintech group, meeting market demands in digital banking, payments, local services, and lottery30 - Future plans include leveraging Macau's strategic advantages (free port, independent currency system, open financial innovation) to promote blockchain finance development in the Greater Bay Area through a one-stop digital life and financial platform, cross-border fintech, and blockchain technology30 Chairman's Statement Chairman Mr. Sun Hao reported the Group's adherence to its fintech strategy, building a digital business ecosystem through the acquisition of Ant Bank (Macau), achieving significant growth in digital banking clients and payments, empowering Macau's cultural tourism, and planning to advance blockchain finance - Acquired a controlling stake in Ant Bank (Macau) in September 2024, establishing a digital business ecosystem encompassing digital banking, digital payments, and digital local consumer services41 Key Operating Data for the Review Period | Metric | Data | | :--- | :--- | | Total Digital Banking Customers | Doubled growth compared to previous fiscal year-end | | Total Digital Banking Deposits | Increased by approximately 2.8 times compared to previous fiscal year-end | | MPay E-wallet Registered Users | Nearly 1.5 million | | MPay Cross-border Payment Service User Growth | Approximately 148% | | Macau Pass Card Cumulative Issuance | Over 5 million cards | - Launched the 'Macau Pass - National Pass Card', supporting public transportation in over 300 cities across Hong Kong, Macau, and mainland China, promoting Greater Bay Area connectivity42 - Through the 'Ticketing+' diversified service system, supported over 200 major performances and events in Macau, deeply empowering Macau's cultural tourism industry44 - Future plans include leveraging Macau's strategic advantages (free port + independent currency system + open financial innovation) to launch the 'Macau Web 3.0 Think Tank', focusing on blockchain financial policy research and RWA technical standard setting to promote blockchain finance development47 Corporate Governance Report The report details the company's commitment to high corporate governance standards, adherence to GEM Listing Rules, board structure, committee functions, diversity initiatives, and shareholder rights Corporate Governance Practices The company is committed to high corporate governance standards, largely complying with GEM Listing Rules' Code, though noting deviations like the Chairman and CEO roles being combined, which the company believes ensures stable leadership - The company has adopted the Corporate Governance Code in Appendix C1 of the GEM Listing Rules, applying its principles to board meetings, composition, and director appointments52 - The report disclosed seven deviations from the Code provisions, including the Chairman and CEO roles being combined, the Chairman being exempt from retirement by rotation, and the absence of a dividend policy545759 Board and Committees The Board is the company's highest decision-making body, supported by five committees—Remuneration, Nomination, Corporate Governance, Audit, and Risk Management & Internal Control—to oversee corporate policy, business strategy, and risk management Board of Directors The Board is responsible for the Group's strategic planning and major financial matters, with membership changes during the review period maintaining independent non-executive directors and ensuring their independence - The Board is the highest decision-making body, responsible for corporate policy formulation, business strategy planning, risk management, and major capital transactions62 - During the review period, Board membership changes included the resignation of Mr. Dong Benhong, retirement of Mr. Zou Liang, and appointment of Mr. Chan Ka Leung and Ms. Yuen Kit Ming as independent non-executive directors63 Board Committees The company has five Board committees: Remuneration, Nomination, Corporate Governance, Audit, and Risk Management & Internal Control, each responsible for specific areas such as compensation policy, director nominations, governance oversight, financial reporting, and risk identification and monitoring - Remuneration Committee: Composed of independent non-executive directors, responsible for setting remuneration policies and recommending director compensation packages, holding four meetings during the review period to deliberate on director remuneration and award share grants9294 - Nomination Committee: Composed of the Chairman and independent non-executive directors, responsible for formulating nomination policies, reviewing Board composition, and assessing director independence, holding two meetings during the review period to review director tenure and independence, and nominate new directors9697 - Audit Committee: Composed of independent non-executive directors, responsible for reviewing financial reporting processes and risk management and internal control systems, holding three meetings during the review period to review interim and annual results and meet with external auditors106 - Risk Management and Internal Control Committee: Composed of the CEO, CFO/Company Secretary, and Head of Internal Audit, responsible for implementing risk management and internal control systems, holding two meetings during the review period to confirm the effectiveness and adequacy of the Group's risk management and internal control systems109111116 Diversity The company has adopted a Board diversity policy with measurable targets for gender, age, nationality, and tenure, achieving these goals, and also focuses on employee gender diversity Board Diversity Target Achievement (As of Reporting Date) | Category | Composition | Measurable Target | Achieved | | :--- | :--- | :--- | :--- | | Gender | 4 Male (57%), 3 Female (43%) | Both male and female participation | ✓ | | Age | 40-49 years (43%), 50-69 years (57%) | Age range spanning at least ten years | ✓ | | Nationality/Region | Mainland China (43%), Hong Kong (43%), Macau (14%) | More than one nationality or regional identity | ✓ | | Tenure | <3 years (43%), 3-6 years (29%), >7 years (29%) | Different lengths of service | ✓ | | Designated Roles | Executive (29%), Non-executive (29%), Independent Non-executive (43%) | Significant proportion of non-executive directors | ✓ | - As of March 31, 2025, the Group's total workforce was 368 employees, with 217 males (approximately 59%) and 151 females (approximately 41%)140141 Shareholder Rights The report clarifies key shareholder rights, including procedures for convening extraordinary general meetings, proposing resolutions, and nominating directors, with clear channels for shareholder inquiries - Shareholders holding not less than one-tenth of the company's paid-up capital have the right to request the Board to convene an extraordinary general meeting to consider proposals in their written request154 - Shareholders can submit inquiries to the Company Secretary via mail, phone, or email, or directly ask questions to the Board at general meetings157 Management Discussion and Analysis of Group Performance and Business This section provides an overview of the industry landscape, a detailed review of the Group's business segments, and an analysis of its financial performance during the reporting period Industry Overview The report analyzes the macroeconomic environment of Macau's banking, digital payment, local consumer, and China's lottery industries, noting stable financial growth, record digital payment transactions, and booming lottery sales - Macau Banking Sector: As of March 2025, total assets reached MOP2.4 trillion, with 2024 profits decreasing by 21.3% year-on-year, yet capital adequacy and liquidity remain above regulatory requirements, indicating overall stability172 - Macau Digital Payment Market: In 2024, transaction volume increased by 17.9% year-on-year to 355 million transactions, with total transaction value rising by 7.8% to MOP30.3 billion, facing challenges such as low tourist spending, intense competition, and consumer outflow174175 - China Lottery Market: In 2024, national lottery sales reached RMB623.486 billion, a year-on-year increase of 7.6%, surpassing the RMB600 billion mark for the first time178 Business Review This year, all Group business segments made significant progress, with digital banking and payments achieving substantial growth, local consumer services integrating into Macau's cultural tourism, and the lottery business winning tenders despite a decline in offline sales - Digital Banking Business: Ant Bank (Macau) saw its total customer base double and total deposits increase by approximately 2.8 times compared to the previous fiscal year-end, establishing full-chain services for deposits, loans, wealth management, and investments, maintaining industry-leading capital adequacy180210 - Digital Payment Business: Macau Pass card cumulative issuance exceeded 5 million, with the launch of the 'National Pass Card'; MPay e-wallet registered users reached approximately 1.5 million, and cross-border payment user growth was 148%; acquiring business covered approximately 90% of local merchants in Macau182200202 - Local Consumer Services Business: Leveraging MPay and Macau Pass networks, value was created for merchants through the mCoin and mPass platforms, strategic cooperation was achieved with Huawei, and over 200 major performances and events were supported via the 'Ticketing+' model203204 - Lottery Business: Won 17 lottery hardware tenders, with offline lottery agency sales revenue of approximately HKD75.65 million, a year-on-year decrease of approximately 28%, primarily due to insufficient supply of instant tickets205211 Financial Performance Review For the 12-month period ended March 31, 2025, the Group recorded revenue of approximately HKD615 million, with operating loss expanding to HKD71.8 million and a net loss of HKD98.6 million, primarily due to fair value loss on a loan and decreased finance income, while maintaining a sound financial position - Due to a change in fiscal year-end, the current reporting period is 12 months (ended March 31, 2025), while the comparative period was 15 months (ended March 31, 2024), making the data not directly comparable212 Annual Financial Performance Summary (HKD) | Metric | Year Ended March 31, 2025 | Fifteen Months Ended March 31, 2024 | | :--- | :--- | :--- | | Revenue | 615 million | 767 million | | Operating Loss | 71.8 million | 44.8 million | | (Loss)/Profit for the Year/Period | (98.6 million) | 30.7 million | - Key reasons for the shift from profit to loss during the year include: fair value loss of approximately HKD70.9 million on a convertible term loan to an Indian joint venture, a decrease in finance income of approximately HKD32.2 million, and a one-off loss provision of approximately HKD10.3 million for a trade receivable218 - As of March 31, 2025, the Group's total assets were approximately HKD6.245 billion, with a current ratio of approximately 1.3, indicating sufficient financial resources, and Ant Bank (Macau)'s capital adequacy ratio was approximately 56.0%, significantly above the 8% minimum regulatory requirement220 Directors' Report This report details the Group's connected transactions, share option and award schemes, and provides a comprehensive review of business operations and key risk factors Connected Transactions and Continuing Connected Transactions The report details significant transactions with connected parties, primarily Alibaba and Ant Group, including capital injection into Ant Bank (Macau) and various continuing connected transactions for services, all with annual caps and reviewed by independent non-executive directors - Connected Transactions: The Group's indirect wholly-owned subsidiary, mFinance, along with connected parties including Alipay (Macau) Holdings, jointly injected capital into Ant Bank (Macau) to maintain their respective equity proportions and meet funding needs, with mFinance's subscription constituting a connected transaction for the company269272 - Continuing Connected Transactions with Alibaba Group: Includes the 2023 Retail Link Cooperation Agreement for lottery sales (ceased to be a continuing connected transaction in March 2024) and a Technology Service Framework Agreement for procuring cloud computing and e-commerce technology services from Alibaba Cloud with annual caps until March 31, 2027274279281286 - Continuing Connected Transactions with Ant Group: Includes Macau Pass acquiring services for Alipay entities, Macau Pass payment and related services (mutual provision of technology, clearing, user referral), Ant Bank (Macau) Framework Agreement for resource sharing and technology services from Ant Group, and Deposit Service Framework Agreement allowing the Group to place deposits with Ant Bank (Macau) with a maximum daily deposit limit290297307315 Share Option and Share Award Schemes The company operates share option and award schemes to incentivize employees, with the 2014 Share Option Scheme terminated and replaced by the 2024 scheme, and significant share awards granted, vested, and forfeited during the review period - 2014 Share Option Scheme: Terminated on September 9, 2024, with no share options granted, exercised, cancelled, or lapsed during the review period347351 - 2024 Share Option Scheme: Adopted on September 9, 2024, with a ten-year validity, and no share options granted as of March 31, 2025352357 - Share Award Scheme: During the review period, a total of 104,247,421 award shares were granted to 104 eligible persons, including directors and employees366 Share Award Scheme Movements (Year Ended March 31, 2025) | Item | Number of Shares | | :--- | :--- | | Outstanding as of April 1, 2024 | 106,565,450 | | Granted during the year | 104,247,421 | | Vested during the year | (39,239,020) | | Forfeited during the year | (22,400,000) | | Outstanding as of March 31, 2025 | 149,173,851 | Business Review and Risk Factors This section provides a comprehensive review of the Group's business and identifies key risks, including regulatory dependence and market competition in digital banking and payments, policy uncertainties in China's lottery business, and geopolitical impacts on overseas investments, with risk mitigation through internal controls and stakeholder engagement - Key risks faced by the Group include: Digital banking and payment business risks (reliance on Macau Monetary Authority licenses, intense market competition, and economic downturn impact on asset quality); China regulatory uncertainties (potential policy restrictions on lottery products, changes in issuance fee ratios, and uncertain opening of mobile/internet lottery agency channels); and Geopolitical risks (potential adverse impacts on overseas investments, such as in India, due to geopolitical tensions)409411 - The Group formulates risk management measures through its Risk Management and Internal Control Committee, regularly consulting with the Corporate Compliance and Legal Department to ensure compliance with relevant laws and regulations in mainland China and Macau412 - The report emphasizes relationships with key stakeholders including shareholders, business partners, employees, suppliers, customers, regulators, and the community, outlining specific measures to maintain these relationships423424 Financial Summary This section provides a summary of the Group's performance, assets, and liabilities for the past five financial years/reporting periods, showing revenue of HKD615 million and total assets increasing to HKD6.245 billion in FY2025 (12 months), primarily due to the consolidation of assets after the acquisition of Ant Bank (Macau) Five-Year Financial Summary (HKD '000) | Metric | Year Ended March 31, 2025 | Fifteen Months Ended March 31, 2024 | 2022 | 2021 | 2020 | | :--- | :--- | :--- | :--- | :--- | :--- | | Revenue | 614,968 | 766,583 | 351,414 | 253,242 | 161,649 | | Operating Loss | 71,826 | 44,778 | 129,715 | 65,785 | 131,087 | | (Loss)/Profit Attributable to Owners | (90,432) | 31,860 | (126,700) | (63,633) | (121,372) | | Total Assets | 6,244,605 | 3,729,660 | 6,422,104 | 3,081,673 | 3,148,432 | | Total Liabilities | (3,484,010) | (1,076,846) | (3,759,265) | (195,533) | (205,118) | | Net Assets | 2,760,595 | 2,652,814 | 2,662,839 | 2,886,140 | 2,943,314 | Financial Statements This section presents the independent auditor's report, the Group's consolidated financial statements, and detailed notes explaining accounting policies and financial performance Independent Auditor's Report PricewaterhouseCoopers issued an unmodified opinion on the Group's consolidated financial statements for the year ended March 31, 2025, identifying goodwill impairment assessment as a key audit matter due to significant judgment - PricewaterhouseCoopers issued an unmodified audit opinion440 - A key audit matter is goodwill impairment assessment; as of March 31, 2025, the Group's goodwill was HKD1.546 billion, a significant carrying amount with considerable estimation uncertainty, warranting auditor focus446447 Consolidated Financial Statements This section includes the Group's four core financial statements, showing a net loss for the review period but a significant increase in total assets due to the Ant Bank (Macau) acquisition, and positive operating cash flow Consolidated Statement of Profit or Loss Summary (HKD '000) | Item | Year Ended March 31, 2025 | Fifteen Months Ended March 31, 2024 | | :--- | :--- | :--- | | Revenue | 614,968 | 766,583 | | Operating Loss | (71,826) | (44,778) | | (Loss)/Profit for the Year/Period | (98,567) | 30,716 | | Attributable to Owners of the Company | (90,432) | 31,860 | Consolidated Statement of Financial Position Summary (HKD '000) | Item | As of March 31, 2025 | As of March 31, 2024 | | :--- | :--- | :--- | | Total Assets | 6,244,605 | 3,729,660 | | Non-current Assets | 2,059,709 | 1,998,092 | | Current Assets | 4,184,896 | 1,731,568 | | Total Liabilities | 3,484,010 | 1,076,846 | | Current Liabilities | 3,346,898 | 950,123 | | Total Equity | 2,760,595 | 2,652,814 | Consolidated Statement of Cash Flows Summary (HKD '000) | Item | Year Ended March 31, 2025 | Fifteen Months Ended March 31, 2024 | | :--- | :--- | :--- | | Net Cash from Operating Activities | 1,169,540 | (2,584,140) | | Net Cash Used in Investing Activities | (459,883) | (214,564) | | Net Cash from Financing Activities | 16,532 | (48,367) | | Net Increase/(Decrease) in Cash and Cash Equivalents | 726,189 | (2,847,071) | Notes to the Consolidated Financial Statements The notes to the financial statements provide detailed explanations of accounting policies, key estimates, and financial statement items, highlighting business combinations, goodwill impairment, financial instrument risk management, segment information, and connected party transactions - Business Combination: On September 2, 2024, the Group completed the acquisition of a controlling interest in Ant Bank (Macau), with a total consideration transferred at fair value of HKD275 million, recognizing identifiable net assets at fair value of HKD365 million, resulting in goodwill of HKD87.04 million737738739 - Goodwill Impairment Assessment: The Group performs annual impairment tests on goodwill; the recoverable amounts for the lottery and digital payment cash-generating units are determined using the market approach (EV/S ratio), while the digital banking business uses the value-in-use method (discounted cash flows), with management concluding no impairment was necessary as of March 31, 2025643644646 - Segment Information: The Group reports across three segments: digital payment and related businesses, digital banking business, and lottery business; for the year ended March 31, 2025, the lottery business recorded the highest segment result of HKD53.46 million, while both digital payment and digital banking businesses recorded losses604605 - Fair Value Changes of Financial Assets: A fair value loss of approximately HKD70.92 million was recognized during the year on a convertible term loan provided to an Indian joint venture, with its fair value decreasing from approximately HKD81.91 million to approximately HKD10.99 million703706
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