Future Data Group Limited — Interim / Quarterly Report 2021

Nov 11, 2021

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T H I R D Q U A R T E R L Y R E P O R T

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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 Future Data Group 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 refer 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

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Corporate Information 2
Financial Highlights 4
5
Condensed Consolidated Statement of
5
Profit or Loss
Condensed Consolidated Statement of
6
Comprehensive Income
Condensed Consolidated Statement of
7
Changes in Equity
Notes to the Condensed Consolidated
8
Financial Statements
Management Discussion and Analysis 18
Corporate Governance and
24
Other Information
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Corporate Information

BOARD OF DIRECTORS

Executive Directors

Mr. Suh Seung Hyun (Chairman) Mr. Phung Nhuong Giang (Deputy Chairman) Mr. Lee Seung Han (Chief Executive Officer) Mr. Ryoo Seong Ryul (Chief Financial Officer) Mr. Tao Guolin

HEAD OFFICE AND PRINCIPAL PLACE OF BUSINESS IN KOREA

Unit 801–809, 822 Mullae SK V1 Center 10, Seonyu-ro 9-gil Yeongdeungpo-gu Seoul Korea

COMPANY SECRETARY

Ms. Cheung Yuet Fan

Independent Non-executive Directors

Mr. Wong Sik Kei Mr. Sum Chun Ho Mr. Yung Kai Tai

BOARD COMMITTEES

Audit Committee

Mr. Sum Chun Ho (Chairman) Mr. Wong Sik Kei Mr. Yung Kai Tai

AUTHORISED REPRESENTATIVES

Mr. Phung Nhuong Giang Ms. Cheung Yuet Fan

AUDITOR

BDO Limited Certified Public Accountants 25/F, Wing On Centre 111 Connaught Road Central Hong Kong

Remuneration Committee

COMPLIANCE ADVISER

Mr. Wong Sik Kei (Chairman) Mr. Sum Chun Ho Mr. Yung Kai Tai

Giraffe Capital Limited 3/F, 8 Wyndham Street Central, Hong Kong

Nomination Committee

Mr. Yung Kai Tai (Chairman) Mr. Sum Chun Ho Mr. Wong Sik Kei

COMPLIANCE OFFICER

Mr. Lee Seung Han

2

Future Data Group Limited

Corporate Information

LEGAL ADVISERS TO OUR COMPANY

As to Hong Kong law: Michael Li & Co. Solicitors, Hong Kong 19/F, Prosperity Tower 39 Queen’s Road Central Central, Hong Kong

HONG KONG BRANCH SHARE REGISTRAR AND TRANSFER OFFICE

Tricor Investor Services Limited Level 54, Hopewell Centre 183 Queen’s Road East Hong Kong

PRINCIPAL BANK

As to Korean law: Shin & Kim Attorneys-at-law, Korea 23/F, D-Tower (D2) 17 Jongno 3-gil Jongno-gu Seoul 03155 Korea

Woori Bank 51, Sogong-ro Jung-gu Seoul, 04632 Korea

COMPANY WEBSITE ADDRESS

www.futuredatagroup.com

REGISTERED OFFICE IN THE CAYMAN ISLANDS

Cricket Square Hutchins Drive P.O. Box 2681 Grand Cayman KY1-1111 Cayman Islands

STOCK CODE

8229

PRINCIPAL PLACE OF BUSINESS IN HONG KONG

Suite 1507–08, 15/F Two Chinachem Exchange Square 338 King’s Road North Point, Hong Kong

3

Third Quarterly Report 2021

Financial Highlights

For the nine months ended 30 September 2021

• Unaudited revenue of the Group was HK$483.5 million for the nine months ended 30 September 2021, representing an increase of HK$62.0 million or 14.7%, as compared to the same corresponding period a year ago.

• Unaudited profit for the period was HK$8.6 million for the nine months ended 30 September 2021, representing an increase of HK$5.5 million or 181.0% compared to HK$3.1 million for the nine months ended 30 September 2020.

• Unaudited basic and diluted earnings per share for the nine months ended 30 September 2021 was HK cents 2.1 (unaudited basic and diluted earnings per share for the nine months ended 30 September 2020: HK cents 0.91).

• The Board does not recommend the payment of an interim dividend for the nine months ended 30 September 2021 (for the nine months ended 30 September 2020: Nil).

4

Future Data Group Limited

Quarterly Results

The board of directors (the “Board”) of the Company presents the unaudited condensed consolidated results of the Group for the three and nine months ended 30 September 2021, together with comparative figures as follows:

Condensed Consolidated Statement of Profit or Loss

For the three and nine months ended 30 September 2021

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Three months ended Nine months ended
30 September 30 September
2021 2020 2021 2020
Notes HK$’000 HK$’000 HK$’000 HK$’000
(unaudited) (unaudited) (unaudited) (unaudited)
Revenue 3 142,101 157,274 483,484 421,521
Cost of sales and services (125,392) (136,051) (425,514) (368,792)
Gross profit 16,709 21,223 57,970 52,729
Other income, net 906 1,339 3,646 2,092
Selling and administrative
expenses (17,381) (12,802) (49,052) (47,338)
Finance costs (170) (142) (591) (569)
Profit before income tax 4 64 9,618 11,973 6,914
Income tax expense 5 (2,151) (2,385) (3,415) (3,868)
(Loss)/profit for the period (2,087) 7,233 8,558 3,046
Attributable to:
– Owners of the Company (2,453) 6,894 8,396 3,623
– Non-controlling interests 366 339 162 (577)
(2,087) 7,233 8,558 3,046
(Loss)/earnings per share
attributable to owners
of the Company
Basic and Diluted (HK cents) 6 (0.61) 1.72 2.10 0.91
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5

Third Quarterly Report 2021

Condensed Consolidated Statement of Comprehensive Income

For the three and nine months ended 30 September 2021

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Three months ended Nine months ended
30 September 30 September
2021 2020 2021 2020
HK$’000 HK$’000 HK$’000 HK$’000
(unaudited) (unaudited) (unaudited) (unaudited)
(Loss)/profit for the period (2,087) 7,233 8,558 3,046
Other comprehensive income
for the period
Items that will be reclassified
subsequently to profit or loss:
Exchange differences arising
on translation of foreign
operations (6,229) 2,999 (9,857) (1,778)
Total comprehensive income for
the period (8,316) 10,232 (1,299) 1,268
Attributable to:
– Owners of the Company (8,687) 9,898 (1,462) 1,841
– Non-controlling interests 371 334 163 (573)
(8,316) 10,232 (1,299) 1,268
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6

Future Data Group Limited

Condensed Consolidated Statement of Changes in Equity

For the nine months ended 30 September 2021

			Attributable to equity holders of the Company	Attributable to equity holders of the Company	Attributable to equity holders of the Company	Attributable to equity holders of the Company			Non- controlling interests HK$’000	Total equity HK$’000
	Share capital HK$’000	Share premium HK$’000	Capital reserve HK$’000	Research and development reserve HK$’000	Foreign exchange reserve HK$’000	Legal reserve HK$’000	Retained earnings HK$’000	Total HK$’000
At 1 January 2021 (audited) Profit for the period Exchange difference arising on translation of foreign operations	4,000	35,718	13,855	3,674	741	2,490	82,232	142,710	658	143,368
	–	–	–	–	–	–	8,396	8,396	162	8,558
	–	–	–	–	(9,858)	–	–	(9,858)	1	(9,857)
Transferred from retained earnings upon declaration of final dividend from a subsidiary	–	–	–	–	(9,858)	–	8,396	(1,462)	163	(1,299)
	–	–	–	–	–	454	(454)	–	–	–
At 30 September 2021 (unaudited)	4,000	35,718	13,855	3,674	(9,117)	2,944	90,174	141,248	821	142,069
At 1 January 2020 (audited) Profit for the period Exchange difference arising on translation of foreign operations	4,000	35,718	13,855	3,674	(5,792)	1,995	75,677	129,127	1,021	130,148
	–	–	–	–	–	–	3,623	3,623	(577)	3,046
	–	–	–	–	(1,782)	–	–	(1,782)	4	(1,778)
Transferred from retained earnings upon declaration of final dividend from a subsidiary	–	–	–	–	(1,782)	–	3,623	1,841	(573)	1,268
	–	–	–	–	–	495	(495)	–	–	–
At 30 September 2020 (unaudited)	4,000	35,718	13,855	3,674	(7,574)	2,490	78,805	130,968	448	131,416

7

Third Quarterly Report 2021

Notes to the Condensed Consolidated Financial Statements

For the nine months ended 30 September 2021

1. GENERAL INFORMATION

The Company was incorporated in the Cayman Islands on 4 January 2016 as an exempted company with limited liability under the Companies Law, Cap 22 (Law 3 of 1961, as revised and consolidated) of the Cayman Islands and its shares have been listed on GEM of the Stock Exchange since 8 July 2016. The Company’s registered office is located at Cricket Square, Hutchins Drive, P.O. Box 2681, Grand Cayman, KY1-1111, Cayman Islands.

The Company’s principal place of business in Hong Kong is located at Suite 1507–08, 15th Floor, Two Chinachem Exchange Square, 338 King’s Road, North Point, Hong Kong, whereas in Korea our principal place of business is located at Unit 801–809, 822, Mullae SK V1 Center, 10 Seonyu-ro, 9-gil, Yeongdeungpo-gu, Seoul, Korea.

The principal activity of the Company is investment holding. The Group is engaged in the provision of (i) integration of systems with network connectivity, cloud computing and security elements; (ii) maintenance services; and (iii) cyber security services in Korea and Hong Kong.

The functional currencies of the Company’s principal operating subsidiaries in Korea and Hong Kong are South Korean Won (“KRW”) and Hong Kong Dollars (“HK$”) respectively, while the condensed consolidated financial statements are presented in HK$. As the Company’s shares (the “Shares”) are listed on GEM of the Stock Exchange, the Directors consider that it is more appropriate to adopt HK$ as the Group’s presentation currency. The amount stated are rounded to the nearest HK$1,000 unless otherwise stated.

8

Future Data Group Limited

Notes to the Condensed Consolidated Financial Statements

For the nine months ended 30 September 2021

2. BASIS OF PREPARATION AND ACCOUNTING POLICIES

The condensed consolidated financial statements for the nine months ended 30 September 2021 have been prepared in accordance with Hong Kong Financial Reporting Standards (“HKFRS”) issued by the Hong Kong Institute of Certified Public Accountants and the applicable disclosure requirements of Chapter 18 of the GEM Listing Rules.

The accounting policies and methods of computation used in the preparation of the condensed consolidated financial statements for the nine months ended 30 September 2021 are consistent with those adopted in the annual financial statements for the year ended 31 December 2020. The condensed consolidated financial statements for the nine months ended 30 September 2021 should be read in conjunction with the annual financial statements for the year ended 31 December 2020.

On 1 January 2021, the Group has adopted all the new and revised HKFRSs, amendments and interpretations that are effective from that date and are relevant to its operations. The adoption of these new/revised HKFRSs, amendments and interpretations has no material effect on the results reported for the current or prior periods.

3. REVENUE AND SEGMENT INFORMATION

The Group’s business is organised into three segments:

• (i) system integration;

• (ii) maintenance services; and

• (iii) cyber security services.

9

Third Quarterly Report 2021

Notes to the Condensed Consolidated Financial Statements For the nine months ended 30 September 2021

Segment revenue and profit contribution are:

(a) Business segments:

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Three months ended 30 September
2021 2020
Cyber Cyber
System Maintenance security System Maintenance security
integration services services Total integration services services Total
HK$’000 HK$’000 HK$’000 HK$’000 HK$’000 HK$’000 HK$’000 HK$’000
(unaudited) (unaudited) (unaudited) (unaudited) (unaudited) (unaudited) (unaudited) (unaudited)
Total segment revenue 91,383 42,403 9,595 143,381 113,783 36,035 8,796 158,614
– – – –
Inter-segment revenue (1,280) (1,280) (1,340) (1,340)
Revenue from external
customers 91,383 42,403 8,315 142,101 113,783 36,035 7,456 157,274
Gross profit/segment
results 3,542 9,687 3,480 16,709 8,573 9,888 2,762 21,223
Other income, net 906 1,339
Selling and
administrative
expenses (17,381) (12,802)
Finance costs (170) (142)
Profit before income tax 64 9,618
Income tax expense (2,151) (2,385)
(Loss)/profit for the
period (2,087) 7,233
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10

Future Data Group Limited

Notes to the Condensed Consolidated Financial Statements

For the nine months ended 30 September 2021

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Nine months ended 30 September
2021 2020
Cyber Cyber
System Maintenance security System Maintenance security
integration services services Total integration services services Total
HK$’000 HK$’000 HK$’000 HK$’000 HK$’000 HK$’000 HK$’000 HK$’000
(unaudited) (unaudited) (unaudited) (unaudited) (unaudited) (unaudited) (unaudited) (unaudited)
Total segment revenue 334,172 127,083 25,889 487,144 292,306 110,332 24,760 427,398
– – – –
Inter-segment revenue (3,660) (3,660) (5,877) (5,877)
Revenue from external
customers 334,172 127,083 22,229 483,484 292,306 110,332 18,883 421,521
Gross profit/segment
results 21,286 29,455 7,229 57,970 17,570 30,057 5,102 52,729
Other income, net 3,646 2,092
Selling and
administrative
expenses (49,052) (47,338)
Finance costs (591) (569)
Profit before income tax 11,973 6,914
Income tax expense (3,415) (3,868)
Profit for the period 8,558 3,046
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11

Third Quarterly Report 2021

Notes to the Condensed Consolidated Financial Statements For the nine months ended 30 September 2021

(b) Geographic information:

	Three months ended 30 September 2021 2020 HK$’000 HK$’000 (unaudited) (unaudited)	Three months ended 30 September 2021 2020 HK$’000 HK$’000 (unaudited) (unaudited)	Nine months ended 30 September 2021 2020 HK$’000 HK$’000 (unaudited) (unaudited)	Nine months ended 30 September 2021 2020 HK$’000 HK$’000 (unaudited) (unaudited)
	2021		2021
	HK$’000		HK$’000
	(unaudited)		(unaudited)
Korea Hong Kong	133,786	149,818	461,255	402,638
	8,315	7,456	22,229	18,883
Total	142,101	157,274	483,484	421,521

(c) Revenue analysis:

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Three months ended Nine months ended
30 September 30 September
2021 2020 2021 2020
HK$’000 HK$’000 HK$’000 HK$’000
(unaudited) (unaudited) (unaudited) (unaudited)
Revenue from customers and
recognised over time:
– Revenue from system
integration services 91,383 113,783 334,172 292,306
– Revenue from maintenance
services 42,403 36,035 127,083 110,332
– Revenue from cyber security
services 8,315 7,456 22,229 18,883
Total 142,101 157,274 483,484 421,521
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12

Future Data Group Limited

Notes to the Condensed Consolidated Financial Statements

For the nine months ended 30 September 2021

The following tables disaggregate the Group’s revenue from contracts with customers:

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Three months ended 30 September
2021 2020
Cyber Cyber
System Maintenance security System Maintenance security
integration services services Total integration services services Total
HK$’000 HK$’000 HK$’000 HK$’000 HK$’000 HK$’000 HK$’000 HK$’000
(unaudited) (unaudited) (unaudited) (unaudited) (unaudited) (unaudited) (unaudited) (unaudited)
Type of goods or
services
– Cloud infrastructure 64,044 41,547 – 105,591 80,976 34,418 – 115,394
– Security 27,339 856 8,315 36,510 32,807 1,617 7,456 41,880
Total revenue from
contracts with
customers 91,383 42,403 8,315 142,101 113,783 36,035 7,456 157,274
Type of customers
– Public sector 23,944 26,421 – 50,365 46,459 21,664 – 68,123
– Private sector 67,439 15,982 8,315 91,736 67,324 14,371 7,456 89,151
Total revenue from
contracts with
customers 91,383 42,403 8,315 142,101 113,783 36,035 7,456 157,274
Type of contract
duration
– Within twelve months 89,294 30,703 6,898 126,895 96,858 13,308 5,441 115,607
– Over twelve months
but less than twenty-
four months 2,089 6,071 737 8,897 16,925 18,896 853 36,674
– Over twenty-four
months – 5,629 680 6,309 – 3,831 1,162 4,993
Total revenue from
contracts with
customers 91,383 42,403 8,315 142,101 113,783 36,035 7,456 157,274
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13

Third Quarterly Report 2021

Notes to the Condensed Consolidated Financial Statements

For the nine months ended 30 September 2021

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Nine months ended 30 September
2021 2020
Cyber Cyber
System Maintenance security System Maintenance security
integration services services Total integration services services Total
HK$’000 HK$’000 HK$’000 HK$’000 HK$’000 HK$’000 HK$’000 HK$’000
(unaudited) (unaudited) (unaudited) (unaudited) (unaudited) (unaudited) (unaudited) (unaudited)
Type of goods or
services
– Cloud infrastructure 249,985 120,220 – 370,205 238,155 105,075 – 343,230
– Security 84,187 6,863 22,229 113,279 54,151 5,257 18,883 78,291
Total revenue from
contracts with
customers 334,172 127,083 22,229 483,484 292,306 110,332 18,883 421,521
Type of customers
– Public sector 109,822 79,385 – 189,207 117,443 65,212 – 182,655
– Private sector 224,350 47,698 22,229 294,277 174,863 45,120 18,883 238,866
Total revenue from
contracts with
customers 334,172 127,083 22,229 483,484 292,306 110,332 18,883 421,521
Type of contract
duration
– Within twelve months 316,439 99,508 18,018 433,965 270,258 21,616 14,437 306,311
– Over twelve months
but less than twenty-
four months 17,733 15,229 1,487 34,449 22,048 73,737 2,448 98,233
– Over twenty-four
months – 12,346 2,724 15,070 – 14,979 1,998 16,977
Total revenue from
contracts with
customers 334,172 127,083 22,229 483,484 292,306 110,332 18,883 421,521
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14

Future Data Group Limited

Notes to the Condensed Consolidated Financial Statements

For the nine months ended 30 September 2021

4. PROFIT BEFORE INCOME TAX

Profit before income tax is arrived at after charging/(crediting):

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Three months ended Nine months ended
30 September 30 September
2021 2020 2021 2020
HK$’000 HK$’000 HK$’000 HK$’000
(unaudited) (unaudited) (unaudited) (unaudited)
Costs of inventories recognised as
expenses 101,387 116,128 351,008 305,799
Employee costs 25,618 21,176 73,003 64,745
Subcontracting costs 11,766 7,711 30,565 26,865
Net provision for impairment of trade
receivables (495) (1,651) (2,343) 57
Amortisation of intangible assets 1,018 1,213 3,051 3,637
Depreciation of property, plant and
equipment 453 467 1,374 1,832
Depreciation of right-of-use assets 652 568 1,941 1,731
Research and development costs 1,292 1,214 3,906 3,994
Interest on lease liabilities 28 20 82 62
Short term lease expenses 54 95 325 430
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5. INCOME TAX EXPENSE

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Three months ended Nine months ended
30 September 30 September
2021 2020 2021 2020
HK$’000 HK$’000 HK$’000 HK$’000
(unaudited) (unaudited) (unaudited) (unaudited)
Current tax
– Korea 1,574 1,838 1,896 2,380
– Hong Kong 182 – 182 –
1,756 1,838 2,078 2,380
Deferred Tax
– Korea 242 378 1,142 373
– Hong Kong 153 169 195 1,115
395 547 1,337 1,488
Total 2,151 2,385 3,415 3,868
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15

Third Quarterly Report 2021

Notes to the Condensed Consolidated Financial Statements

For the nine months ended 30 September 2021

Global Telecom Company Limited (“Global Telecom”), is subject to Korean Corporate Income Tax which comprised national and local taxes (collectively “Korean Corporate Income Tax”). Korean Corporate Income Tax is charged at the progressive rate from 11.0% to 24.2% on the estimated assessable profit of Global Telecom derived worldwide during each of the periods presented.

• 11% on assessable profit up to the first KRW200 million (equivalent to approximately HK$1.3 million);

• 22% on assessable profit in excess of KRW200 million (equivalent to approximately HK$1.3 million) and up to KRW20 billion (equivalent to approximately HK$130.5 million);

• 24.2% on assessable profit in excess of KRW20 billion (equivalent to approximately HK$130.5 million).

Subsidiaries operating in Hong Kong are subject to Hong Kong profits tax. Under two-tier profit tax regime, if the entity has one or more connected entity, the two-tiered profits tax rates would only apply to the one which is nominated to be chargeable at the two-tiered rates Hong Kong profits tax of the nominated entity is calculated at 8.25% on assessable profits up to HK$2 million and 16.5% on any part of assessable profits over HK$2 million.

For those entities which do not qualify for two-tiered profits tax rates, a profits tax rate of 16.5% on assessable profit shall remain in calculating Hong Kong profits tax.

6. BASIC AND DILUTED (LOSS)/EARNINGS PER SHARE

The calculation of basic and diluted (loss)/earnings per share is based on the following data.

	Three months ended	Nine months ended	Nine months ended
	30 September	30 September
	2021 2020	2021	2020
	HK$’000 HK$’000	HK$’000	HK$’000
	(unaudited) (unaudited)	(unaudited)	(unaudited)
(Loss)/profit for the period	(2,453) 6,894	8,396	3,623

16

Future Data Group Limited

Notes to the Condensed Consolidated Financial Statements For the nine months ended 30 September 2021

	Three months ended	Nine months ended	Nine months ended
	30 September	30 September
	2021 2020	2021	2020
	Number ’000 Number ’000	Number ’000	Number ’000
	(unaudited) (unaudited)	(unaudited)	(unaudited)
Weighted average number of
ordinary shares	400,000 400,000	400,000	400,000

Weighted average of 400,000,000 shares for the nine months ended 30 September 2021 represents the number of shares in issue throughout the period.

Diluted (loss)/earnings per share were the same as the basic (loss)/earnings per share as the Group had no potential dilutive ordinary shares during the three and nine months ended 30 September 2021 and 2020.

7. DIVIDEND

The Board does not recommend the payment of an interim dividend for the nine months ended 30 September 2021 (corresponding period in 2020: nil).

8. REMUNERATION OF DIRECTORS AND EMOLUMENTS OF KEY MANAGEMENT

	Three months ended	Nine months ended	Nine months ended
	30 September	30 September
	2021 2020	2021	2020
	HK$’000 HK$’000	HK$’000	HK$’000
	(unaudited) (unaudited)	(unaudited)	(unaudited)
Remuneration of directors and other
members of key management	4,326 2,971	9,939	6,937

17

Third Quarterly Report 2021

Management Discussion and Analysis

FINANCIAL REVIEW

CONDENSED CONSOLIDATED STATEMENT OF PROFIT OR LOSS

For the three and nine months ended 30 September 2021

	Three months ended 30 September 2021 30 June 2021 HK$’000 HK$’000 (unaudited) (unaudited)	Three months ended 30 September 2021 30 June 2021 HK$’000 HK$’000 (unaudited) (unaudited)	Change HK$’000	Change %	Nine months ended 30 September 2021 30 September 2020 HK$’000 HK$’000 (unaudited) (unaudited)	Nine months ended 30 September 2021 30 September 2020 HK$’000 HK$’000 (unaudited) (unaudited)	Change HK$’000	Change %
Revenue	142,101	177,797	(35,696)	(20.1%)	483,484	421,521	61,963	14.7%
Cost of sales and services	(125,392)	(157,640)	(32,248)	(20.5%)	(425,514)	(368,792)	56,722	15.4%
Grossprofit	16,709	20,157	(3,448)	(17.1%)	57,970	52,729	5,241	9.9%
Other income, net	906	1,228	(322)	(26.2%)	3,646	2,092	1,554	74.3%
Selling and administrative expenses	(17,381)	(14,307)	3,074	21.5%	(49,052)	(47,338)	1,714	3.6%
Finance costs	(170)	(171)	(1)	(0.6%)	(591)	(569)	22	3.9%
Profit before income tax	64	6,907	(6,843)	(99.1%)	11,973	6,914	(5,059)	73.2%
Income tax (expenses)/credit	(2,151)	185	2,336	(1,262.7%)	(3,415)	(3,868)	453	(11.7%)
(Loss)/profit for theperiod	(2,087)	7,092	(9,179)	(129.4%)	8,558	3,046	(5,512)	181.0%

18 Future Data Group Limited

Management Discussion and Analysis

For the nine months ended 30 September 2021, the Group posted a revenue of HK$483.5 million representing an increase of HK$62.0 million or 14.7% when compared to the revenue of HK$421.5 million in the same corresponding period in 2020. An analysis of the Group’s revenue is presented below:

• Korea and Hong Kong operations were expanding during the period. Korea contributed HK$461.3 million for the nine months ended 30 September 2021, surging by HK$58.7 million or 14.6% compared to HK$402.6 million a year ago. Business in Hong Kong contributed HK$22.2 million, which was HK$3.3 million or 17.7% higher compared to HK$18.9 million a year ago.

• All segments recorded a revenue growth for the nine months ended 30 September 2021. Revenue from system integration, maintenance services and cyber security services were HK$334.2 million, HK$127.1 million and HK$22.2 million respectively which accounting for 69.1%, 26.3% and 4.6% of the Group’s revenue (for the nine months ended 30 September 2020: 69.3%, 26.2% and 4.5%).

• For the nine months ended 30 September 2021, public sector contributed HK$189.2 million in revenue, which was increased by HK$6.6 million or 3.6%; while private sector contributed HK$294.3 million in revenue, which was increased by HK$55.4 million or 23.2% when compared to yearago period.

The Group’s gross profit increased by HK$5.3 million or 9.9% from HK$52.7 million for the nine months ended 30 September 2020 to HK$58.0 million for the nine months ended 30 September 2021. The increase was attributable to the growth in revenue but mitigated by a higher cost of sales and services.

The Group posted a selling and administrative expenses of HK$49.1 million for the nine months ended 30 September 2021 which was comparable to the amount of HK$47.3 million for the nine months ended 30 September 2020. The slight increase of HK$1.8 million or 3.6% year-on-year was caused by the increase in employee costs.

After a provision of HK$3.4 million for tax expenses, the Group’s profit for the period stood at HK$8.6 million for the nine months ended 30 September 2021, represented an increase of HK$5.5 million or 181% from HK$3.1 million a year ago.

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Third Quarterly Report 2021

Management Discussion and Analysis

Liquidity and Financial Resources

As at 30 September 2021, the Group’s net current assets were HK$98.2 million showing a strong liquidity.

The Group expresses its gearing ratio as a percentage of total debt over total equity. As at 30 September 2021, the gearing ratio was 38.8% (as at 31 December 2020: 21.1%). The increase was mainly due to the raise of new loans for business operations and properties purchase. The liquidity ratio, represented by a ratio of current assets over current liabilities, was 1.9 times (as at 31 December 2020: 1.6 times), reflecting the adequacy of financial resources.

As at 30 September 2021, the Group recorded cash and cash equivalents of approximately HK$74.2 million (as at 31 December 2020: approximately HK$96.2 million), which included approximately KRW9.9 billion, HK$6.0 million, US$0.4 million and small amount of Singapore dollars.

Foreign Exchange Exposure

The Group’s business in Korea is exposed to currency risk that mainly arose from the currency difference between our revenue receipts (which are denominated in KRW) and some of our payments for purchases (which are in US$). In preparing the costing of our system integration project in which procurement of components in US$ is required, we would add on a margin to the relevant cost items of the project as a cushion to safeguard against any unfavourable foreign exchange movement between the costing date and the relevant settlement date.

Revenue and cost of our Hong Kong operations are mainly denominated in HK$. Hence, there is no currency risk arising from it.

Charges on Group’s Assets

None of the Group’s assets were charged as at 30 September 2021.

As at 30 September 2021, the Group had variable rate bank borrowings of approximately US$4.6 million, which was equivalent to approximately HK$36.0 million (as at 31 December 2020: approximately HK$30.3 million). Certain banking borrowings are guaranteed by Korea Credit Guarantee Fund which is a public financial institution independent of the Group.

20

Future Data Group Limited

Management Discussion and Analysis

Material Investments and Capital Assets

The Group did not have any material investments and capital assets for the nine months ended 30 September 2021.

The carrying amount of the Group’s unlisted equity securities as at 30 September 2021 accounted for approximately 1.7% of the Group’s total assets and is not significant. The unlisted equity securities mainly represent the investment in KSFC (a cooperative established pursuant to the Software Industry Promotion Act with the purpose of promoting the development of the IT industry in Korea) for its membership. Depending on the amount of investment in KSFC, a member of KSFC is granted a certain amount of guarantee limit by KSFC for use in its operation.

The Group did not have any plan for material investments or capital asset as at 30 September 2021 as well.

Significant Acquisitions and Disposals

For the nine months ended 30 September 2021, the Group had not made any significant acquisition or disposal.

As at 30 September 2021, the Group was continuously seeking potential buyers for the remaining eleven properties. Having said that in the circular dated 25 January 2021 and the supplementary announcement dated 31 March 2021, since the properties are part of the government subsidised, the Directors consider that the prices of the properties will not have any downside risk. In the event that any of the eleven properties are not disposed of prior to the payment date for relevant intermediate payment(s) and/or remaining balance, the Company intends to satisfy these payable by bank borrowing in Korea. As at 30 September 2021, Global Telecom has obtained a banking facility totaling KRW5,013,132,000 (equivalent to approximately HK$32.9 million) to satisfy relevant intermediate payments.

Contingent Liabilities

The Group did not have any significant contingent liabilities as at 30 September 2021.

Capital Commitment

As at 30 September 2021, the Group has outstanding capital commitment of KRW4,713,060,000 (equivalent to approximately HK$31.0 million) related to the agreement entered for properties purchase in Korea which is not provided for in the Group’s financial statements.

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Third Quarterly Report 2021

Management Discussion and Analysis

BUSINESS REVIEW

	HK$’000
Opening backlog as at 1 January 2021 New booking during the period Revenue recognised during the period	166,124
	494,591
	(483,484)
Closing backlog as at 30 September 2021	177,231

The Group’s revenue showed a stable growth in spite that the threat of pandemic. For the nine months ended 30 September 2021, system integration segment was the main source of revenue of the Group and more sizable contracts were awarded to sustain revenue growth in consecutive years. Examples of these sizable contracts included:

• A contract won from government for equipment replacement amounting to KRW5.1 billion (equivalent to HK$34.1 million);

• A contract won from a search engine operator amounting to KRW3.5 billion (equivalent to HK$23.4 million); and

Revenue from maintenance services segment has been growing during the nine months ended 30 September 2021 to HK$127.1 million from HK$110.3 million for the same corresponding period in 2020. The growth was due to the increase in number of maintenance contracts.

Cyber security services segment was in growing trend. For the nine months ended 30 September 2021, this segment recorded a revenue of HK$22.2 million which represented an increase of HK$3.3 million or 17.7%, the highest growth rate among the segments of the Group.

• A contract won from a computer programming service provider amounting to KRW2.2 billion (equivalent to HK$14.6 million).

22 Future Data Group Limited

Management Discussion and Analysis

PROSPECTS

The Group recorded profit for the period of HK$8.6 million for the nine months ended 30 September 2021 with more sizable contracts won across all segments. As a result, we are positive that the Group will be profitable in the full year of 2021, bearing unforeseen circumstances.

EMPLOYEES AND REMUNERATION POLICY

As at 30 September 2021, the Group had an aggregate of 221 (30 September 2020: 220) employees comparable to a year ago.

rewards to eligible persons who contributed to the success of the Group’s operation. Up to 30 September 2021, no share option had been granted.

In enhancing the competitiveness and improving staff quality through continuous learning, the Group provides our staff with regular technical and on-the-job trainings and encourages our staff to attend external seminars and sit for examinations to develop their knowledge continuously.

The employees of the Group are remunerated according to their job scope and responsibilities. The employees are also entitled to discretionary bonus depending on their respective performance. Total employee costs, including Directors’ emoluments, amounted to approximately HK$73.0 million for the nine months ended 30 September 2021 (for the nine months ended 30 September 2020: approximately HK$64.7 million).

The Group has adopted a share option scheme for the purpose of providing incentives and

23

Third Quarterly Report 2021

Corporate Governance and Other Information

DIRECTORS’ AND CHIEF EXECUTIVES’ INTERESTS AND SHORT POSITIONS IN THE SHARES, UNDERLYING SHARES AND DEBENTURES OF THE COMPANY AND ITS ASSOCIATED CORPORATIONS

As at 30 September 2021, the interests and short positions in the Shares, underlying Shares and debentures of the Company or any of its associated corporations (within the meaning of Part XV of the Securities and Futures Ordinance (Chapter 571 of the Laws of Hong Kong) (the “SFO”)) held by the Directors and

chief executives of the Company which have been notified to the Company and the Stock Exchange pursuant to Divisions 7 and 8 of Part XV of the SFO (including interests and short positions which were taken or deemed to have under such provisions of the SFO) or have been entered in the register maintained by the Company pursuant to Section 352 of the SFO, or otherwise have been notified to the Company and the Stock Exchange pursuant to Rule 5.46 of the GEM Listing Rules are as follows:

Long Positions in the Shares

Name of Director	Capacity/Nature of interest	Number of Shares held	Approximate percentage of issued share capital(Note 4)
Mr. Phung Nhuong Giang(Notes 1, 2 and 3) (“Mr. Phung”)	Interest held jointly with other persons/Interest in controlled corporation/Interest of spouse	220,000,000	55.00%
Mr. Suh Seung Hyun(Notes 1 and 2) (“Mr. Suh”)	Interest held jointly with other persons/Interest in controlled corporation	220,000,000	55.00%
Mr. Lee Seung Han(Notes 1 and 2) (“Mr. Lee”)	Interest held jointly with other persons/Interest in controlled corporation	220,000,000	55.00%
Mr. Tao Guolin(Note 4) (“Mr. Tao”)	Beneficial owner	22,917,327	5.73%

24 Future Data Group Limited

Corporate Governance and Other Information

Notes:

• (1) LiquidTech Limited (“LiquidTech”) held 220,000,000 Shares, representing 55.00% of the issued Shares. LiquidTech is wholly owned by Asia Media Systems Pte. Ltd. (“AMS”) which is owned by Mr. Phung, Mr. Suh, Mr. Lee, Mr. Park Hyeoung Jin (“Mr. Park”), Mr. Lee Sung Gue, Mr. Lee Je Eun and Ms. Marilyn Tang as to 18.14%, 25.34%, 22.71%, 14.03%, 14.03%, 3.40% and 2.35% respectively.

• (2) On 21 June 2016, four of the ultimate controlling shareholders of the Company, namely, Mr. Phung, Mr. Suh, Mr. Lee and Mr. Park, entered into the acting in concert confirmation and undertaking to acknowledge and confirm, among other things, that they were parties acting in concert of each of the members of the Group. As such, Mr. Phung, Mr. Suh, Mr. Lee and Mr. Park together control approximately 55.00% interest in the share capital of the Company through AMS and LiquidTech. As a result, each of Mr. Phung, Mr. Suh, Mr. Lee and Mr. Park is deemed to be interested in approximately 55.00% interest in the share capital of the Company.

Save as disclosed above, as at 30 September 2021, none of the Directors and chief executive of the Company had any interest or short position in the Shares, underlying Shares or debentures of the Company or any of its associated corporations that was notified to the Company and the Stock Exchange pursuant to Divisions 7 and 8 of Part XV of the SFO, or was required to be recorded in the register maintained by the Company pursuant to Section 352 of the SFO, or as otherwise notified to the Company and the Stock Exchange pursuant to Rule 5.46 of the GEM Listing Rules.

• (3) Ms. Marilyn Tang is the owner of approximately 2.35% of the issued shares of AMS and the spouse of Mr. Phung. Mr. Phung is deemed to be interested in all the Shares in which Ms. Marilyn Tang is interested under Part XV of the SFO.

• (4) On 2 July 2021, LiquidTech and Mr. Tao have entered into a sale and purchase agreement, whereby LiquidTech agreed to sell and Mr. Tao agreed to purchase 22,917,327 shares representing approximately 5.73% interest in the share capital of the Company.

• (5) The percentage of shareholding was calculated based on the Company’s total number of issued Shares as at 30 September 2021 (i.e. 400,000,000 Shares).

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Third Quarterly Report 2021

Corporate Governance and Other Information

SUBSTANTIAL SHAREHOLDERS’ INTERESTS IN THE SHARES AND UNDERLYING SHARES

As at 30 June 2021, so far as known to the Directors, the following persons (not being Directors or chief executive of the Company) had or were deemed or taken to have an interest and/or short position in the Shares or

the underlying Shares which would fall to be disclosed to the Company under the provisions of Divisions 2 and 3 of Part XV of the SFO or which would be recorded in the register required to be kept under Section 336 of the SFO who, are directly or indirectly interested in 5% or more of the Shares.

Long Positions in the Shares

Name of Shareholder	Capacity/Nature of interest	Number of Shares held	Approximate percentage of issued share capital(Note 10)
LiquidTech(Note 1)	Beneficial owner	220,000,000	55.00%
AMS(Notes 1, 2 and 3)	Interest in controlled corporation	220,000,000	55.00%
Mr. Park(Notes 2 and 3)	Interest held jointly with other persons/Interest in controlled corporation	220,000,000	55.00%
Ms. Marilyn Tang(Notes 2, 3 and 4)	Interest held jointly with other persons/Interest in controlled corporation/Interest of spouse	220,000,000	55.00%
Ms. Lee Kim Sinae(Note 5)	Interest of spouse	220,000,000	55.00%
Ms. Suh Kim Seong Ock(Note 6)	Interest of spouse	220,000,000	55.00%
Ms. Shin Hee Kum(Note 7)	Interest of spouse	220,000,000	55.00%
Ms. Han Lerong(Note 8)	Interest of spouse	22,917,327	5.73%
Mr. Tao Jian	Beneficial owner	20,000,000	5.00%

Notes:

• (1) LiquidTech is wholly-owned by AMS. AMS is deemed to be interested in all the Shares in which LiquidTech is interested under Part XV of the SFO.

• (2) AMS is owned as to approximately 18.14% by Mr. Phung, 25.34% by Mr. Suh, 22.71% by Mr. Lee, 14.03% by Mr. Park, 14.03% by Mr. Lee Sung Gue, 3.40% by Mr. Lee Je Eun and 2.35% by Ms. Marilyn Tang.

• (3) On 21 June 2016, four of the ultimate controlling shareholders of the Company, namely, Mr. Phung, Mr. Suh, Mr. Lee and Mr. Park, entered into the acting in concert confirmation and undertaking to acknowledge and confirm, among other things, that they were parties acting in concert of each of the members of the Group. As such, Mr. Phung, Mr. Suh, Mr. Lee and Mr. Park together control approximately 55.00% interest in the share capital of the Company through AMS and LiquidTech. As a result, each of Mr. Phung, Mr. Suh, Mr. Lee and Mr. Park is deemed to be interested in approximately 55.00% interest in the share capital of the Company.

26 Future Data Group Limited

Corporate Governance and Other Information

• (4) Ms. Marilyn Tang is the owner of approximately 2.35% of the issued shares of AMS and the spouse of Mr. Phung. Ms. Marilyn Tang is deemed to be interested in all the Shares in which Mr. Phung is interested under Part XV of the SFO.

• (5) Ms. Lee Kim Sinae is the spouse of Mr. Lee. Ms. Lee Kim Sinae is deemed to be interested in all the Shares in which Mr. Lee is interested under Part XV of the SFO.

• (6) Ms. Suh Kim Seong Ock is the spouse of Mr. Suh. Ms. Suh Kim Seong Ock is deemed to be interested in all the Shares in which Mr. Suh is interested under Part XV of the SFO.

• (7) Ms. Shin Hee Kum is the spouse of Mr. Park. Ms. Shin Hee Kum is deemed to be interested in all the Shares in which Mr. Park is interested under Part XV of the SFO.

• (8) Ms. Han Lerong is the spouse of Mr. Tao. Ms. Han Lerong is deemed to be interested in all the Shares in which Mr. Tao is interested under Part XV of the SFO.

• (9) The percentage of shareholding was calculated based on the Company’s total number of issued Shares as at 30 September 2021 (i.e. 400,000,000 Shares).

Save as disclosed above, as at 30 September 2021, the Directors were not aware of any other persons who had any interests or short positions in the Shares or underlying Shares which would fall to be disclosed to the Company under the provisions of Divisions 2 and 3 of Part XV of the SFO or which would be recorded in the register required to be kept under Section 336 of the SFO, who are directly or indirectly interested in 5% or more of the Shares.

SHARE OPTION SCHEME

The Company has a share option scheme (the “Share Option Scheme”) which was approved and adopted by the written resolutions of the then sole shareholder of the Company passed on 21 June 2016. No share option has been granted under the Share Option Scheme since its adoption.

CODE OF CONDUCT REGARDING SECURITIES TRANSACTIONS BY DIRECTORS

The Company has adopted its securities dealing code (“Securities Dealing Code”) which is no less exacting than the required standard of dealings regarding securities transactions by the Directors as set out in Rules 5.48 to 5.67 of the GEM Listing Rules. Further, the Company had made specific enquiry with all Directors and each of them has confirmed his compliance with the Securities Dealing Code during the nine months ended 30 September 2021.

DIRECTORS’ INTEREST IN COMPETING BUSINESS

During the nine months ended 30 September 2021, none of the Directors or the controlling shareholders or their respective associates (as defined in the GEM Listing Rules) of the Company had an interest in a business which competed with or might compete with the business of the Group.

27

Third Quarterly Report 2021

Corporate Governance and Other Information

CORPORATE GOVERNANCE PRACTICES

The Company is committed to fulfilling its responsibilities to its shareholders and protecting and enhancing shareholder value through solid corporate governance.

The Company’s corporate governance practices are based on the principles of good corporate governance as set out in the Corporate Governance Code and Corporate Governance Report in Appendix 15 to the GEM Listing Rules (the “CG Code”) and in relation to, among others, our Directors, Chairman and Chief Executive Officer, Board composition, the appointment, re-election and removal of Directors, their responsibilities and remuneration and communications with the shareholders of the Company.

To the best knowledge of the Board, the Company had complied with the code provisions in the CG Code during the nine months ended 30 September 2021.

PURCHASE, SALE AND REDEMPTION OF THE COMPANY’S SECURITIES

The Company did not redeem any of its Shares listed on GEM nor did the Company or any of its subsidiaries purchase or sell any such Shares during the nine months ended 30 September 2021.

AUDIT COMMITTEE

The Company established an audit committee (“Audit Committee”) with written terms of reference in compliance with Rule 5.28 of the GEM Listing Rules and paragraph C.3 of the CG Code. For the nine months ended 30 September 2021, the Audit Committee consists of three independent non-executive Directors namely, Mr. Wong Sik Kei, Mr. Yung Kai Tai and Mr. Sum Chun Ho. Mr. Sum Chun Ho possesses the appropriate professional accounting qualifications and serves as the chairman of the Audit Committee.

The main duties of the Audit Committee are to assist the Board in reviewing the financial information and reporting process, risk management systems and internal control systems and the internal control function, audit plan and relationship with external auditors, and arrangement to enable employees of the Company to raise, in confidence, concerns about possible improprieties in financial reporting, internal control or other matters of the Company. The Audit Committee had reviewed the unaudited quarterly results of the Company for the nine months ended 30 September 2021.

By order of the Board Future Data Group Limited Suh Seung Hyun Chairman

Hong Kong, 5 November 2021

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Future Data Group Limited