i-Control Holdings Limited i-Control i-Control Holdings Limited 超智能控股有限公司 (Incorporated in the Cayman Islands with limited liability) Stock code: 1402 超智能控股有限公司 ANNUAL REPORT 2021 ANNUAL REPORT 2021 年報 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS For the Year Ended 31 March 2019 CONTENTS 2 Corporate Information 3 Chairman’s Statement 5 Management Discussion and Analysis 13 Directors and Senior Management 19 Corporate Governance Report 29 Environmental, Social and Governance Report 40 Report of the Directors 51 Independent Auditor’s Report on the Consolidated Financial Statements 55 Consolidated Statement of Profit or Loss and Other Comprehensive Income 56 Consolidated Statement of Financial Position 58 Consolidated Statement of Changes in Equity 59 Consolidated Statement of Cash Flows 61 Notes to the Consolidated Financial Statements 111 Particulars of Properties 112 Financial Summary CORPORATE INFORMATION i-Control Holdings Limited 2 Annual Report 2021 CORPORATE INFORMATION BOARD OF DIRECTORS LEGAL ADVISER Executive Directors Vincent T.K. Cheung. Yap & Co. Mr. Zhong Naixiong (Chairman) Suite 2302, 23/F Mr. Yau Wing Keung Office Tower, Convention Plaza Mr. Tong Sai Wong 1 Harbour Road Mr. Chan Wing Yiu Wanchai Mr. Chan Wing Lun Hong Kong Non-Executive Director REGISTERED OFFICE Dr. Wong King Keung PO Box 1350, Clifton House 75 Fort Street Independent Non-Executive Directors Grand Cayman KY1-1108 Mr. Fong Chi Mr. Fung Chan Man Alex Cayman Islands ^ Mr. Li Ying Wai Wayne HEADQUARTERS AND PRINCIPAL PLACE Mr. Lum Pak Sum Mr. Mong Cheuk Wai# OF BUSINESS IN HONG KONG Units A&B, 12/F, MG Tower COMPANY SECRETARY 133 Hoi Bun Road Ms. Ng Tsz Wai, CPA Kwun Tong Kowloon COMPLIANCE OFFICER Hong Kong Mr. Chan Wing Yiu PRINCIPAL BANKER BOARD COMMITTEES The Hongkong and Shanghai Banking Corporation Limited Audit Committee 1 Queen’s Road Central Mr. Lum Pak Sum (Chairman) Hong Kong Mr. Fong Chi Mr. Li Ying Wai Wayne^ OCBC Wing Hang Bank Limited Mr. Mong Cheuk Wai# 161 Queen’s Road Central Hong Kong Nomination Committee Mr. Fung Chan Man Alex (Chairman) PRINCIPAL SHARE REGISTRAR AND Mr. Li Ying Wai Wayne^ TRANSFER OFFICE IN THE CAYMAN Mr. Lum Pak Sum ISLANDS Mr. Mong Cheuk Wai# Ocorian Trust (Cayman) Limited PO Box 1350, Clifton House Remuneration Committee 75 Fort Street Mr. Fung Chan Man Alex (Chairman) Grand Cayman KY1-1108 Mr. Fong Chi Cayman Islands Mr. Lum Pak Sum HONG KONG BRANCH SHARE REGISTRAR AUTHORISED REPRESENTATIVES AND TRANSFER OFFICE Mr. Yau Wing Keung Tricor Investor Services Limited Ms. Ng Tsz Wai Level 54, Hopewell Centre 183 Queen’s Road East AUDITOR Hong Kong SHINEWING (HK) CPA Limited 43/F, Lee Garden One COMPANY’S WEBSITE 33 Hysan Avenue http://www.i-controlholdings.com Causeway Bay Hong Kong STOCK CODE 1402 ^ Appointed on 4 February 2021 # Resigned on 4 February 2021 CHAIRMAN’S STATEMENT i-Control Holdings Limited Annual Report 2021 3 CHAIRMAN’S STATEMENT Dear Shareholders, On behalf of the board (the “Board”) of directors (the “Directors”) of i-Control Holdings Limited (the “Company”), I am pleased to present the audited annual results of the Company and its subsidiaries (collectively referred to as the “Group”) for the year under review (the “Reviewing Year”). The global coronavirus outbreak (COVID-19) spread to strike every economy around the world, severely impacting people’s daily lives. In 2020, the Hong Kong economy recorded an annual contraction of 6.1%, the largest in its history. This was mainly due to the suspension of economic activities based on tourism and reduced consumption under the stringent anti- pandemic lockdown measures and strict border closures. During the Reviewing Year, the economic environment was dampened by the various pandemic waves which persistently affected the Group’s operations and financial performance – with new project launches delayed and ongoing projects suspended. Nonetheless, the impact of the COVID-19 pandemic on the Group’s business should be temporary. According to economic figures released by the HKSAR government in May 2021, Hong Kong’s economy saw growth in GDP in the first quarter of 2021, recording a 7.9% year-on-year (YoY) growth in and a 5.4% quarter-on-quarter (QoQ) growth for three consecutive quarters. For the Reviewing Year, the Group recorded a 8.3% decline in revenue to approximately HK$145,380,000 (2020: HK$158,504,000). This was mainly due to a decline in projects completed and the absence of major projects. Profit for the Reviewing Year increased by 385.5% to approximately HK$12,724,000 (2020: HK$2,621,000), which was mainly attributed to the absence of non-recurring transfer of listing expenses incurred in relation to the transfer of listing (the “Main Board Transfer”) of the shares (“Shares”) of the Company from GEM to the Main Board of The Stock Exchange of Hong Kong Limited (the “Stock Exchange”) in December 2019 as well as government subsidies from the Employment Support Scheme. As a leading provider of video conferencing and multimedia audiovisual (“VCMA”) solutions in Hong Kong with over three decades’ of experience, we offer customers integrated and customized VCMA solution and maintenance services. These range from project consultation and design, to project management, installation and maintenance. Our extensive and established customer base includes major government and financial institutions and multi-national corporations, public companies and education institutions that are primarily located in Hong Kong though with some in the People’s Republic of China (“PRC”) and Macau. We provide them with customized VCMA solutions to suit various requirements and specifications across a wide spectrum of industries. In 2020, Hong Kong’s commercial property market was severely hit by the COVID-19 pandemic, bringing the vacancy rate to a 16-year high of 12% and hurting our VCMA solutions business due to reduced demand for smart office systems, audiovisual equipment and related services. The postponement and cancellation of onsite business conferences, closure of shopping centers, and suspension of public events all seriously affected the sales of various hi-tech digital display products. Under the new normal during the Reviewing Year, the shift from onsite to online education – necessitated by social distancing measures – led to a surge in demand from education institutions for cloud-based services, which created fresh opportunities for the Group in providing a series of system integration and assembly and total solutions that supporting cloud-based education. Although revenue from such business is insignificant, we foresee the future potential of VCMA total solutions for specially addressing the rising and on-going demand for cloud-related equipment and total solutions will be able to bring stable growth in sales on our integrated solutions. i-Control Holdings Limited 4 Annual Report 2021 CHAIRMAN’S STATEMENT In early 2021, we expanded into the ubiquitous internet of things (“IoT”) sector where Information Technology and Operational Technology (“IT+OT”) converge. On 4 February 2021, we entered into a joint venture agreement in relation to Beijing National Greenfield Technology Co. Limited*（北京能興國雲信息科技有限公司）(“Beijing National Greenfield”), an 85% owned joint venture located in the PRC which focuses on inter alia, IoT cloud services, cyber security operation centre products and services, and digital transformation consulting services. On 5 March 2021, we also acquired a 4% stake in Changzhou Guoyun Green Data Technology Co., Limited*（常州國雲綠色數據技術有限公司）(“Changzhou Guoyun”) which owns a plot of land in Changzhou, the PRC’s innovation hub for technology enterprises. This plot of land is being developed into a smart and sustainable internet data center (“IDC”) that is expected to be completed and begin operations by end of 2021. We have every confidence in embarking on this new development. Not only do we have solid experience in VCMA solutions and expertise in cloud technology platforms, we can also draw on the deep experience of Beijing National Greenfield’s management team in serving multinational companies and playing a senior role in planning, building and maintaining major cloud infrastructure and management projects. From 2022, we expect our IT+OT business to become a new revenue driver for the Group, allowing us to target major multi-national and local enterprises in the PRC and provide them with a full range of cloud services – from Software as a Service (SaaS), self-developed data security operation center products and services through to IDC digital management products and services. In June 2021, Beijing National Greenfield achieved a significant milestone by entering into a 5-year strategic cooperation with Micro Focus Singapore entity on distributing Micro Focus’s product, ArcSight, in China by using Beijing National Greenfield’s own brand, and offering Micro Focus’s cloud management service in the PRC. Micro Focus is a world leading enterprise software company, and ArcSight is a cyber security product which provides big data security analytics and intelligence software for security information and event management (SIEM) and log management. As a startup company, Beijing National Greenfield has great potential of future development after having this cooperation. The Hong Kong economy is expected to grow by 3.5% to 5.5% in 2021. In the post-pandemic economy, we anticipate increasing demand for VCMA solution services arising from the trend toward smart offices. The Group will prudently seek opportunities in both VCMA solution services and IT+OT and smart