i-Control Holdings Limited i-Control i-Control Holdings Limited 超智能控股有限公司 超智能控股有限公司 (Incorporated in the Cayman Islands with limited liability) Stock code: 8355 2018 ANNUAL REPORT ANNUAL REPORT 2018 年報 Characteristics of GEM of The Stock Exchange of Hong Kong Limited (the “Stock Exchange”) GEM has been positioned as a market designed to accommodate small and mid -sized companies to which a higher investment risk may be attached than other companies listed on the Stock Exchange. Prospective investors should be aware of the potential risks of investing in such companies and should make the decision to invest only after due and careful consideration. Given that the companies listed on GEM are generally small and mid-sized companies, there is a risk that securities traded on GEM may be more susceptible to high market volatility than securities traded on the Main Board and no assurance is given that there will be a liquid market in the securities traded on GEM. Hong Kong Exchanges and Clearing Limited and the Stock Exchange take no responsibility for the contents of this report, make no representation as to its accuracy or completeness and expressly disclaim any liability whatsoever for any loss howsoever arising from or in reliance upon the whole or any part of the contents of this report. This report, for which the directors (the “Directors”) of i-Control Holdings Limited (the “Company”) collectively and individually accept full responsibility, includes particulars given in compliance with the Rules Governing the Listing of Securities on GEM of the Stock Exchange (the “GEM Listing Rules”) for the purpose of giving information with regard to the Company and its subsidiaries (collectively referred to as the “Group”). The Directors, having made all reasonable enquiries, confirm that to the best of their knowledge and belief the information contained in this report is accurate and complete in all material respects and not misleading or deceptive, and there are no other matters the omission of which would make any statement herein or this report misleading. CONTENTS 3 Corporate Information 5 Chairman’s Statement 6 Management Discussion and Analysis 12 Directors and Senior Management 18 Corporate Governance Report 28 Environmental, Social and Governance Report 36 Report of the Directors 46 Independent Auditor’s Report on the Consolidated Financial Statements 50 Consolidated Statement of Profit or Loss and Other Comprehensive Income 51 Consolidated Statement of Financial Position 53 Consolidated Statement of Changes in Equity 54 Consolidated Statement of Cash Flows 56 Notes to the Consolidated Financial Statements 98 Particulars of Properties 100 Financial Summary CORPORATE INFORMATION i-Control Holdings Limited Annual Report 2018 3 CORPORATE INFORMATION BOARD OF DIRECTORS AUTHORISED REPRESENTATIVES Executive Directors Mr. Yau Wing Keung Mr. Zhong Naixiong^ (Chairman) Ms. Ng Tsz Wai Mr. Yau Wing Keung^ Mr. Tong Sai Wong AUDITOR Mr. Chan Wing Yiu SHINEWING (HK) CPA Limited Mr. Chan Wing Lun 43/F, Lee Garden One 33 Hysan Avenue Non-Executive Directors Causeway Bay Dr. Wong King Keung Hong Kong Mr. Lin Wing Ching# LEGAL ADVISER Independent Non-Executive Directors Sidley Austin Dr. Chan Man Hung# 39/F Mr. Fong Chi^ Two International Finance Centre Mr. Fung Chan Man Alex^ Central Mr. Lai Hing Kwong Joseph^ Hong Kong Dr. Lai Wing Chueng# Mr. Lum Pak Sum COMPLIANCE ADVISER Zhongtai International Capital Limited COMPANY SECRETARY 19/F, Li Po Chun Chambers Ms. Ng Tsz Wai, CPA 189 Des Voeux Road Central Hong Kong COMPLIANCE OFFICER Mr. Chan Wing Yiu REGISTERED OFFICE Estera Trust (Cayman) Limited BOARD COMMITTEES Clifton House, 75 Fort Street Audit Committee Grand Cayman KY1-1108 Mr. Lum Pak Sum (Chairman) Cayman Islands Dr. Chan Man Hung# Mr. Fong Chi^ HEADQUARTER AND PRINCIPAL PLACE Mr. Lai Hing Kwong Joseph^ OF BUSINESS IN HONG KONG Dr. Lai Wing Chueng# Units A&B, 12/F, MG Tower 133 Hoi Bun Road Nomination Committee Kwun Tong Mr. Fung Chan Man Alex^ (Chairman) Kowloon Dr. Chan Man Hung# Hong Kong Mr. Lai Hing Kwong Joseph^ Dr. Lai Wing Chueng# Mr. Lum Pak Sum Remuneration Committee Mr. Fung Chan Man Alex^ (Chairman) Dr. Chan Man Hung# Mr. Fong Chi^ Dr. Lai Wing Chueng# Mr. Lum Pak Sum ^ Appointed on 7 December 2017 # Resigned on 7 December 2017 i-Control Holdings Limited 4 Annual Report 2018 CORPORATE INFORMATION PRINCIPAL BANKER The Hong Kong and Shanghai Banking Corporation Limited 1 Queen’s Road Central Hong Kong PRINCIPAL SHARE REGISTRAR AND TRANSFER OFFICE IN THE CAYMAN ISLANDS Estera Trust (Cayman) Limited Clifton House, 75 Fort Street Grand Cayman KY1-1108 Cayman Islands HONG KONG BRANCH SHARE REGISTRAR AND TRANSFER OFFICE Tricor Investor Services Limited 22/F, Hopewell Centre 183 Queen’s Road East Hong Kong COMPANY’S WEBSITE http://www.i-controlholdings.com STOCK CODE 8355 CHAIRMAN’S STATEMENT i-Control Holdings Limited Annual Report 2018 5 CHAIRMAN’S STATEMENT Dear Shareholders, On behalf of the board of directors (the “Board”) 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 ended 31 March 2018. RESULTS The Group’s revenue for the year ended 31 March 2018 was approximately HK$158.6 million (2017: HK$138.1 million) representing an increase of 14.8% over the previous year which was attributable to the completion of a one-off sizable project. Profit for the year ended 31 March 2018 was approximately HK$16.9 million (2017: HK$19.2 million), representing a decrease of 12.0% as compared to the previous year. BUSINESS OVERVIEW As one of the leading service providers of video conferencing and multimedia audiovisual solutions, we continue to provide high quality services to secure our existing customers and explore opportunities to broaden our customer base. Our one- stop solutions services enhance the platform for communication and information sharing of different entities and locations, including banks, multinational and listed companies, convention and conference centers, educational institutions, shopping malls, banquet and entertainment venues, theme parks, social services and government bodies, religious assemblies, etc. In terms of hardware, large LED displays and video walls with customized size have played a significant role in our total solutions provided to our customers. PROSPECT In view of the fast-changing market environment and competition of the industry, we are committed to take the lead and equip ourselves with the latest technological knowledge. Meanwhile, we will better understand our customers’ needs and provide them with high standard of services in order to bolster our position as a leading solutions service provider as well as raise our brand recognition. Furthermore, we will look for business opportunities to further expand the Group’s market share in the video conferencing and multimedia audiovisual solutions industry in the Peoples’ Republic of China (the “PRC”), in order to support the long- term development of the Group. APPRECIATION Finally, on behalf of the Board, I would like to express our sincere thanks to our customers, business partners, suppliers and shareholders of the Company (the “Shareholders”) for their continuous support, and our appreciation for the efforts and endeavors made by our management and staff during the past year. Zhong Naixiong Chairman Hong Kong, 22 June 2018 MANAGEMENT DISCUSSION AND ANALYSIS i-Control Holdings Limited 6 Annual Report 2018 MANAGEMENT DISCUSSION AND ANALYSIS BUSINESS REVIEW During the year, the Group maintained its market position as one of the leading service providers of video conferencing and multimedia audiovisual solutions, mainly in Hong Kong, and other geographical locations such as the PRC and Macau. The Group’s service can be divided into two lines, namely the provision of (i) solutions for audiovisual, conferencing, presentation and multimedia control systems, including installation services; and (ii) audiovisual system maintenance services. The Group continues to maintain and strengthen its position as one of the leading service providers of video conferencing and multimedia audiovisual solutions in Hong Kong and to expand its market share in the video conferencing and multimedia audiovisual solutions industry in the PRC. FINANCIAL REVIEW Segment analysis Year ended 31 March 2018 Year ended 31 March 2017 HK$’000 % HK$’000 % Solutions for audiovisual, conferencing, presentation and multimedia control systems, including installation services 144,216 90.9 124,253 90.0 Audiovisual system maintenance services 14,393 9.1 13,860 10.0 Total 158,609 100.0 138,113 100.0 Revenue The Group’s revenue increased by 14.8% from approximately HK$138,113,000 for the year ended 31 March 2017 to approximately HK$158,609,000 for the year ended 31 March 2018. Revenue generated from solutions for audiovisual, conferencing, presentation and multimedia control systems, including installation services increased by approximately 16.1% from approximately HK$124,253,000 for the year ended 31 March 2017 to approximately HK$144,216,000 for the year ended 31 March 2018, which was primarily attributable to the completion of a one-off sizable project during the year ended 31 March 2018. Revenue generated from audiovisual system maintenance services increased by approximately 3.8% from approximately HK$13,860,000 for the year ended 31 March 2017 to approximately HK$14,393,000 for the year ended 31 March 2018, which was primarily attributable to the increase in total maintenance projects after the completion of related projects of solutions for audiovisual, conferencing, presentation and multimedia control systems, including installation services. i-Control Holdings Limited Annual Report 2018 7 MANAGEMENT DISCUSSION AND ANALYSIS Gross operating margin and gross operating margin ratio Gross operating margin is calculated based on our revenue for the year minus cost of inventories sold for the year. Gross operating margin ratio is calculated based on the gross operating margin for the year divided by revenue for the year multiplied by 100%.