OneForce Holdings Limited - Annual Report 2021

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OneForce Holdings Limited 元力控股有限公司

(Incorporated in the Cayman Islands with limited liability)

(Stock code: 1933)

ANNUAL RESULTS ANNOUNCEMENT FOR THE YEAR ENDED 31 MARCH 2021

FINANCIAL HIGHLIGHTS

	For the year	For the year
	ended	ended
	31 March	31 March
	2021	2020
	*RMB’000*	RMB’000
Revenue	293,666	163,454
Gross profit	66,947	23,836
Other income	217	93
Administrative and other operating expenses	33,213	45,366
Impairment losses	697	39,401
Profit/(loss) attributable to shareholders	20,855	(69,168)
Earnings/(loss) per share – basic and diluted (RMB cents)	4.21	(13.88)

For the year ended 31 March 2021 (the “ Year ”), the Group recorded a revenue of approximately RMB293,666,000, an increase of RMB130,212,000 or approximately 80% as compared with the previous year. The Group recorded a profit attributable to shareholders of approximately RMB20,855,000, an increase of RMB90,023,000 as compared with the previous year. The increase of revenue and profit were mainly due to the combined impact of the following factors:

(i) Increase in income from existing customers. With the Group’s continuous research and development on innovative technologies, improvement in service quality, and enhancement in professional skills and capacities of the Group’s technical staff, the Group continued to receive increasing customers’ satisfaction for its products and services, which in turn continued to drive revenue derived from its existing customers. In particular, as compared with that of the previous year, income from State Grid Corporation of China (“ SGCC ”) increased by approximately 94%; income from China Southern Power Grid Company Limited (“ CSG ”) increased by approximately 170%, and the income from Inner Mongolia Power (Group) Co., Ltd. (內蒙古電力集團有限責任公司) (“ IMPG* ”) increased by approximately 36%.

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(ii) Exploring new customers. The Group has commenced cooperation with China Huaneng Group, one of the leading electricity generation enterprises in China since the Year. The Group has expanded its business upstream from power grid enterprises to power generation enterprises by participating in various power generation informatisation projects.
(iii) Achieving a breakthrough in the smart lifestyle business. Beijing Beikong Zhike Energy Internet Company Limited (北京北控智科能源互聯網有限公司), which is jointly established by the Group and the subsidiary of Beijing Enterprises Group Company Limited, Beijing Beikong Smart City Technology Development Company Limited (北京北控智慧城市科技發展有限公司), has achieved a breakthrough in its smart lifestyle business. Starting from the Year, it entered the residential communities and set up smart garbage sorting stations and garbage sorting information platforms in the residential communities, in order to achieve resource recycling and reduction in domestic garbage. The Group will continue to invest in the smart garbage sorting segment, which will become the future growth point of its new business. Moreover, the investment made to the smart city business of the Group in the early stage has recorded a long-term and stable operating income.
(iv) Effective management and organisation structure reform. During the Year, the Group recorded a gross profit margin of approximately 23%, increased by approximately 8 percentage points as compared with previous year. It is mainly due to the fact that the Group has enhanced its organisation structure with an aim of flattening organisational hierarchy, shortening decision-making procedures and strengthening vitality of the organisation. At the same time, the Group also implemented effective arrangements in terms of working hours and more efficient use of staff, which helped save labour costs of the Group.
(v) Less asset impairment losses. During the previous year, impairment losses of assets related to smart city Internet of Things (“IoT”) of approximately RMB36,036,000 were recognised. No impairment losses of assets related to smart city IoT were recognised during the Year.

CHAIRMAN’S STATEMENT

The board (the “ Board ”) of directors (the “ Directors ”) of OneForce Holdings Limited (the “ Company ”, and together with its subsidiaries, the “ Group ”) is pleased to present to you the results of the Group for the year ended 31 March 2021.

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INDUSTRY AND BUSINESS REVIEW

The year of 2020 is an extraordinary year. The COVID-19 epidemic and the severe and complex external environment have brought unprecedented impacts and challenges to the social economy. Under the leadership of the Board, the Group actively responded to external impacts, fine-tuned its business operation frameworks, turned challenges into opportunities, achieved high level of standards in terms of the Group’s major performance indicators and achieved annual targets in all material aspects.

As a technology company with the mission of “Smart energy, Smart life”, the Group is embracing the best opportunity for development. At present, digitization is subverting and reconstructing our way of production and life. Premier Li Keqiang’s “Government Work Report of the State Council in 2021” proposed to “accelerate digital development and improve the construction level of digital government in order to promote digital industrialization and industrial digital transformation”. Digital economy, digital society and digital government have been promoted as national strategies in the 14th Five-Year Plan and the Outline of 2035 Long-range Goals.

Since its establishment, the Group has been committed to becoming the world’s leading provider of smart energy and smart life, from power system information technology services, smart city services to today’s smart life. Through research and development of the IoT and internet applications, the Group provides hardware products, information technology services and solutions for users such as energy enterprises, industrial parks, communities and governments, enabling the digital upgrading of the industry and cities, and building a better life with science and technology.

SMART ENERGY

Digital upgrading has become the consensus of power grid enterprises in the transformation. After the CSG launched the “Digital transformation and Digital Construction Action Plan” in 2019, the SGCC launched “New Digital Infrastructure” in June 2020, which set out top ten key construction tasks, focusing on big data, IoT, comprehensive energy services, artificial intelligence, and other areas of the new infrastructure. The overall investment by SGCC on New Digital Infrastructure would be approximately RMB24.7 billion in 2020 and is expected to stimulate investment of approximately RMB100 billion. Through the use of big data of energy, data sharing, analysis and mining, applications can be used to serve the needs of the government for scientific decision-making, the society for fine governance, and the enterprise for intelligent energy use.

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In the context of energy revolution, China has put forward the goal of “carbon peak by 2030 and carbon neutral by 2060”. As a bridge and link connecting energy production and consumption, power grid companies promote clean, low-carbon, safe and efficient utilization of energy through supply-side structural adjustment and demand-side response. In 2020, the share of electric energy in China’s terminal energy consumption has increased to 27%. It is estimated that in 2025 and 2030, the share of electric energy in terminal energy consumption will reach over 30% and 35% respectively.

Three big power grid companies ( SGCC , CSG and IMPG ) are the Group’s main customers. Seizing the opportunities of digital power grid upgrading and “carbon neutrality”, the Group’s revenue reached a new record in the Year. As compared with that of the previous year, income from SGCC increased by 94%; income from CSG increased by 170%, and the income from IMPG increased by 36%.

SMART LIFE

The digitization of industry has brought about the improvement of productivity and the change of lifestyle. The Group anticipated this trend as early as 2013. Through industryuniversity-research cooperation, a number of advanced technological achievements have been accumulated. IoT gateway device ‘ π core ’ is one of them. As the world’s unique intelligent IoT gateway device, ‘ π core ’ provides access to power and network to all kinds of smart applications. Possessing the functions of carrying the input of all smart application, obtaining data and distributing information, ‘ π core ’ is the sensory nerve endings of the city, making the city smart.

Through the relevant experience, technology and talent reserves accumulated in the field of energy industry information, in 2019, the Group acquired Beijing Aipu Zhicheng Technology Co., Ltd. and entered into the field of smart city. The Group built smart light poles in Mentougou District of Beijing, which became the first group of pilot smart city in Beijing. In 2020, the Group has established the development strategy of upgrading smart city to smart life. Smart life includes smart cities, smart parks/communities, and smart homes. At the urban level, the government implements the fine governance of “instant perception and datadriven” in the fields of traffic environment, city appearance, security, communication and people’s livelihood, so as to build a smart city. At the community and park level, managers can create smart communities and smart parks through digital management of property, sanitation, parking, security, public services and other matters. At the family level, the Group is committed to making digitization play the maximum value in specified household, such as bed care, remote medical care, AED first aid, intelligent interactive companionship, etc., so that residents can live at ease and conveniently, With all the above improvements in technologies related to smart life, digitization could truly benefit and enhance the daily life of the residents.

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During the Year, the Group comprehensively upgraded its business cognition, business philosophy, development strategy, business model and promotion path, and reformed its organizational structure, incentive mechanism, talent team and research and development system. The Group has made gratifying achievements in the field of smart life after upgrading. In terms of smart city, it provided smart application equipment for Tianjin Tanggu Bay Smart Micro-city Demonstration Area, helping to build Tianjin’s first “Smart Micro-city”. The Group continued to provide Beijing Mentougou public security monitoring project with various environmental monitoring services, communication base station mounting services and other operational services; In the smart community, the Group has built a smart garbage classification station and a data platform for Licheng District of Jinan City, realizing the full coverage of household garbage classification.

Looking ahead, the year of 2021 is the first year of China’s 14th Five-Year Plan. The Group will seize the opportunity of Digital China to accelerate the construction of a scientific, complete and efficient management system. For smart energy and smart life, through innovation incubation of industry, studies and research, we will build core products around the technologies of IoT, continue to enable the smart development of cities and the digital transformation of industries, strive to implement the ideal of digital China, and create value for the Group’s shareholders and the society.

WANG Dongbin Chairman

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MANAGEMENT DISCUSSION AND ANALYSIS

FINANCIAL REVIEW

Revenue

Below sets out a breakdown of the Group’s revenue by business segments for the the Year:

Sale of software and solutions Provision of technical services Sale of products	For the year ended 31 March 2021 *RMB’000* 41,164 202,862 49,640 293,666	For the year ended 31 March 2020 RMB’000 16,854 98,426 48,174
		163,454

For the Year, the Group’s revenue increased by approximately RMB130,212,000 as compared with previous year, mainly due to the increase of software and solutions, and technical services. The reasons are set out below:

(i) Revenue from sale of software and solutions increased by approximately RMB24,310,000, or 144% as compared with previous year. Benefiting from the transformation and upgrading opportunities of the “Digital Grid” of power grid companies, the Group has carried out large projects including the upgrading of the Inner Mongolia Power Marketing Information System;
(ii) Revenue from provision of technical services increased by approximately RMB104,436,000, or 106% as compared with previous year. The Group has provided technical consulting services to IMPG and SGCC and other customers for many years, with good cooperative relations and experience, business continues to grow; and
(iii) Revenue from provision of sale of products increased by approximately RMB1,466,000, or 3% as compared with previous year. Among them, the sales volume of macro rear projection large screen has further increased. In addition to users in the power industry, the application of macro rear projection large screen has been expanded to hospitals, schools, government emergency management service centers and other places.

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Cost of sales and gross profit margin

Below sets out a breakdown of the Group’s cost of sales and gross profit margin by business segments for the Year:

Cost of sales Sale of software and solutions Provision of technical services Sale of products Total Gross profit margin Sale of software and solutions Provision of technical services Sale of products Average	For the year ended 31 March 2021 *RMB’000* 27,113 156,166 43,440 226,719 34.1% 23.0% 12.5% 22.8%	For the year ended 31 March 2020 RMB’000 11,356 85,147 43,115
		139,618
		32.6% 13.5% 10.5% 14.6%

For the Year, the cost of sales of the Group increased by approximately RMB87,101,000, and gross profit margin of the Group increased from 14.6% to 22.8%. This was mainly due to:

(i) Effective management and organisation structure reform. During the Year, the Group enhanced its organisation structure with an aim of flattening organisational hierarchy, shortening decision-making procedures and strengthening vitality of the organisation. At the same time, the Group also implemented effective arrangements in terms of working hours and more efficient use of staff, which helped save labour costs of the Group; and
(ii) The Group has served IMPG , SGCC and other customers for many years. With good cooperative relationships and experience, the Group can provide customers with system maintenance and upgrading services in a faster and more efficient manner, which help with continuous increase in business volume, reduce operating costs and thus increasing the gross profit margin.

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Administrative and other operating expenses

Below sets out a breakdown of the Group’s administrative and other operating expenses incurred for the Year:

Labour costs R&D expenses Professional services expenses Amortisation of intangible assets Others	For the year ended 31 March 2021 *RMB’000* 6,336 12,297 6,275 – 8,305 33,213	For the year ended 31 March 2020 RMB’000 6,793 5,254 8,927 15,780 8,612
		45,366

For the Year, the Group’s administrative and other operating expenses reduced by approximately RMB12,153,000, or 27% as compared with previous year. The reduction was mainly due to:

(i) Decrease of corporate social insurance expenses. Pursuant to RenShebufa（人社部發） [2020] No.11 and No.49 Notice on the periodic reduction and exemption of corporate social insurance premiums from February 2020 to December 2020, the subsidiaries of the Group as middle size companies defined by Classified statistics of large, medium, small and micro enterprises (2017 ) issued by National Bureau of Statistics were entitled to a exemption of contributions to defined contribution retirement plan during the year;
(ii) The amortisation of intangible assets is included in “cost of sales” in the consolidated statement of profit or loss, as the intangible assets (smart IoT) generated revenue during the Year; and
(iii) Professional service expenses decreased by RMB2,652,000, which was mainly due to a decrease in expenses in relation to financial consulting and other professional service incurred by the Group.

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Intangible assets

Below sets out a breakdown of the Group’s intangible assets as of 31 March 2021:

Cost Less: Accumulated amortisation Less: Impairment losses Net book value	For the year ended 31 March 2021 *RMB’000* 98,280 (48,213) (22,418) 27,649	For the year ended 31 March 2020 RMB’000 94,211 (34,950) (22,418) 36,843

As an innovation-driven company, the Group further boosted its commitment to and resources in R&D activities during the current financial year. As of 31 March 2021, the Group’s operating subsidiaries have applied for/registered a total of 25 patents and 113 software copyrights in the PRC (31 March 2020: 24 patents and 108 software copyrights).

Trade and bill receivables

Below sets out a breakdown of trade and bill receivables for the year ended 31 March 2021:

Trade receivables Bill receivables Total Less: loss allowance Net book value	For the year ended 31 March 2021 *RMB’000* 219,915 2,184 222,099 (9,953) 212,146	For the year ended 31 March 2020 RMB’000 122,930 675 123,605 (8,940) 114,665

As of 31 March 2021, the Group’s trade and bill receivables increased by approximately RMB97,481,000, or 85% as compared with previous year, which is approximately in line with the increase of revenue. The Group’s credit policy and the creditability of its customers were stable as compared with prior years.

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Inventories and contract costs

Below sets out a breakdown of inventories and contract costs as of 31 March 2021:

Products Software systems under development	For the year ended 31 March 2021 *RMB’000* 277 12,231 12,508	For the year ended 31 March 2020 RMB’000 327 9,456
		9,783

As of 31 March 2021, the Group’s inventories and contract costs increased by approximately RMB2,725,000 or 28%, mainly due to the increase in business activities and the increase of projects under development during the Year.

R&D expenditure

Below sets out a breakdown of the Group’s capitalised/R&D expenditure charged to profit or loss accounts incurred for the Year:

R&D expenditure Capitalised Charged to profit or loss accounts	For the year ended 31 March 2021 *RMB’000* 4,069 12,297 16,366	For the year ended 31 March 2020 RMB’000 8,893 5,254
		14,147

As a technology and innovation driven company, the Group has maintained its focus on investing in R&D activities for a long term. For the Year, the Group’s R&D expenditure increased by approximately RMB2,219,000, or 16% as compared with previous year.

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CONSOLIDATED STATEMENT OF PROFIT OR LOSS

For the year ended 31 March 2021 (Expressed in Renminbi (“ RMB ”))

Note Revenue 4 Cost of sales Gross profit 4(b) Other income 5 Selling expenses Administrative and other operating expenses Impairment loss on non-current assets 6(b) Impairment loss on trade receivables and contract assets 6(b) Profit/(loss) from operations Net finance (costs)/income – Finance income – Finance costs Share of profits of an associate Profit/(loss) before taxation 6 Income tax 7 Profit/(loss) for the year attributable to equity shareholders of the Company Earnings/(loss) per share Basic/diluted (RMB cents) 10	2021 *RMB’000* 293,666 (226,719) 66,947 217 (7,223) (33,213) – (697) 26,031 (637) 534 (1,171) 13 25,407 (4,552) 20,855 4.21	2020 RMB’000 163,454 (139,618) 23,836 93 (7,753) (45,366) (36,036) (3,365) (68,591) 9 1,060 (1,051) 725 (67,857) (1,311) (69,168) (13.88)

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C O N S O L I D A T E D S T A T E M E N T O F P R O F I T O R L O S S A N D O T H E R COMPREHENSIVE INCOME

For the year ended 31 March 2021 (Expressed in RMB)

Profit/(loss) for the year Other comprehensive income for the year (after tax) Item that may be reclassified subsequently to profit or loss: – Exchange differences on translation into presentation currency Total comprehensive income for the year attributable to equity shareholders of the Company	2021 *RMB’000* 20,855 (1,276) 19,579	2020 RMB’000 (69,168) 2,824 (66,344)

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CONSOLIDATED STATEMENT OF FINANCIAL POSITION

at 31 March 2021

(Expressed in RMB)

Note Non-current assets Property, plant and equipment 11 Intangible assets 12 Interest in an associate 14 Deferred tax assets Current assets Inventories and other contract costs 15 Contract assets 16 Trade and bill receivables 17 Prepayments, deposits and other receivables 18 Bank balances and cash 19 Current liabilities Trade payables 20 Other payables and accruals 21 Bank loans 22 Income tax payable Net current assets Total assets less current liabilities Non-current liabilities Lease liabilities Deferred tax liabilities Net assets Capital and reserves Share capital Reserves Total equity	2021 *RMB’000* 9,624 27,649 3,419 193 40,885 12,508 39,601 212,146 26,850 31,703 322,808 67,516 36,909 31,267 13,142 148,834 173,974 214,859 496 860 1,356 213,503 4,130 209,373 213,503	2020 RMB’000 9,782 36,843 3,406 347
		50,378
		9,783 34,885 114,665 21,804 31,802
		212,939
		20,321 26,478 13,000 8,553
		68,352
		144,587
		194,965
		139 1,288
		1,427
		193,538
		4,141 189,397
		193,538

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N O T E S T O T H E F I N A N C I A L I N F O R M A T I O N E X T R A C T E D F R O M CONSOLIDATED FINANCIAL STATEMENTS PREPARED UNDER IFRS

(Expressed in RMB unless otherwise indicated)

1 CORPORATE INFORMATION

The Company was incorporated in the Cayman Islands on 5 July 2016 as an exempted company with limited liability under the Companies Law, Cap. 22 (Law 3 of 1961, as consolidated and revised) of the Cayman Islands. The Company’s shares were listed on the Main Board of The Stock Exchange of Hong Kong Limited (the “ Stock Exchange ”) on 2 March 2018 (the “ Listing Date ”). The Company and its subsidiaries (collectively referred to as the “ Group ”) are principally engaged in the design, implementation, enhancement and upgrades of software systems and the provision of technical services for power grid and distribution companies in the People’s Republic of China (the “ PRC ”) and the sale of products and the investment, construction and operation of smart city infrastructure in the PRC.

2 SIGNIFICANT ACCOUNTING POLICIES

(a) Statement of compliance

The financial statements have been prepared in accordance with all applicable International Financial Reporting Standards (“ IFRSs ”), which collective term includes all applicable individual International Financial Reporting Standards, International Accounting Standards (“ IASs ”) and Interpretations issued by the International Accounting Standards Board (the “ IASB ”) and the disclosure requirements of the Hong Kong Companies Ordinance. The financial statements also comply with the applicable disclosure provisions of the Rules Governing the Listing of Securities on the Stock Exchange (the “ Listing Rules ”).

The IASB has issued certain amendments to IFRSs that are first effective or available for early adoption for the current accounting year of the Group. Note 2(c) provides information on any changes in accounting policies resulting from initial application of these developments to the extent that they are relevant to the Group for the current accounting year reflected in the financial statements.

(b) Basis of preparation of the financial statements

The consolidated financial statements for the Year comprise the Group and the Group’s interest in an associate.

The measurement basis used in the preparation of the financial statements is the historical cost basis except that the following assets and liabilities are stated at their fair value as explained in the accounting policies set out below:

investments in debt and equity securities;

The preparation of financial statements in conformity with IFRSs requires management to make judgements, estimates and assumptions that affect the application of policies and reported amounts of assets, liabilities, income and expenses. The estimates and associated assumptions are based on historical experience and various other factors that are believed to be reasonable under the circumstances, the results of which form the basis of making the judgements about carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates.

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The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the year in which the estimate is revised if the revision affects only that year, or in the year of the revision and future years if the revision affects both current and future years.

Judgements made by management in the application of IFRSs that have significant effect on the financial statements and major sources of estimation uncertainty are discussed in Note 3.

(c) Changes in accounting policies

The IASB has issued the following amendments to IFRSs that are first effective for the current accounting period of the Group:

Amendments to IFRS 3, Definition of a Business
Amendments to IAS 1 and IAS 8, Definition of Material
Amendments to IFRS 9, IAS 39 and IFRS 7, Interest Rate Benchmark Reform

None of these developments have had a material effect on how the Group’s results and financial position for the current or prior years have been prepared or presented in this financial report. The Group has not applied any new standard or interpretation that is not yet effective for the current accounting period.

3 ACCOUNTING JUDGEMENT AND ESTIMATES

Sources of estimation uncertainty

In the process of applying the Group’s accounting policies, management has made the following accounting judgements.

(a) Service contracts

Revenue recognition on an uncompleted service project is dependent on estimating the total outcome of the service contract, as well as the work done to date. Based on the Group’s recent experience and the nature of the service activity undertaken by the Group, the Group makes estimates of the point at which it considers the work is sufficiently advanced such that the costs to complete and revenue can be reliably estimated. As a result, until this point is reached the amounts due from customers for contract work as disclosed in Note 16 will not include profit which the Group may eventually realise from the work done to date. In addition, actual outcomes in terms of total cost or revenue may be higher or lower than estimated at the end of the reporting year, which would affect the revenue and profit recognised in future years as an adjustment to the amounts recorded to date.

(b) Impairment of trade receivables and contract assets

The impairment provisions for trade receivables and contract assets based on assumptions about the expected loss rates. The Group uses judgement in making these assumptions and selecting the inputs to the impairment calculation, based on the Group’s past history, existing market conditions as well as forward looking estimates at the end of each reporting period. Changes in these assumptions and estimated could materially affect the result of the assessment and it may be necessary to make additional impairment charge to the profit or loss.

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(c) Provision for inventories

Inventories are stated at the lower of cost or net realisable value. Management estimates the net realisable value based on the current market condition and historical experience of similar nature. Any change in the assumptions would increase or decrease the amount of inventories write-down or the related reversals of write-downs and affect the Group’s net asset value. The Group reviews the carrying amounts of the inventories at each reporting period end date to determine whether the inventories are carried at the lower of cost and net realizable value.

(d) Impairment of property, plant and equipment, and intangible assets

If circumstances indicate that the carrying amount of property, plant and equipment, and intangible asset may not be recoverable, the asset may be considered “impaired”, and an impairment loss may be recognised in accordance with accounting policy for impairment of property, plant and equipment, and intangible assets. These assets are tested for impairment periodically or whenever the events or changes in circumstances indicate that their recorded carrying amounts may not be recoverable.

When such a decline has occurred, the carrying amount is reduced to recoverable amount. The recoverable amount is the greater of the fair value less costs of disposal and value in use. In determining the value in use, expected future cash flows generated by the asset are discounted to their present value, which requires significant judgment relating to the level of revenue and amount of operating costs. The Group uses all readily available information in determining an amount that is a reasonable approximation of the recoverable amount, including estimates based on reasonable and supportable assumptions and projections of the level of revenue and amount of operating costs. Changes in these estimates could have a significant impact on the recoverable amount of the assets and could result in additional impairment charge or reversal of impairment in future years.

(e) Income tax

The Group calculates current taxation based on the taxable income for the year using tax rates enacted or substantively enacted at the end of the reporting year, and after taking into consideration whether the Group has satisfied the conditions as stipulated in the tax rules and regulations which may result in the Group be able to enjoy certain preferential tax rates and tax allowable deductions. Such preferential tax rates and tax allowable deductions are subject to the approvals by the relevant tax authorities in the following fiscal year. Actual current taxation maybe higher or lower than estimated at the end of the reporting year.

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4 REVENUE AND SEGMENT REPORTING

(a) Revenue

The Group is principally engaged in the design, implementation, enhancement and upgrades of software and solutions and the provision of technical services for power grid and distribution companies in the PRC and the sale of products. Further details regarding the Group’s principal activities are disclosed in Note 4(b).

(i) Disaggregation of revenue

Disaggregation of revenue from contracts with customers by major service lines is as follows:

Sale of software and solutions Provision of technical services Sale of products	2021 *RMB’000* 41,164 202,862 49,640 293,666	2020 RMB’000 16,854 98,426 48,174
		163,454

Revenue from customers with whom transactions have exceeded 10% of the Group’s revenue are set out below:

	2021	2020
	*RMB’000*	RMB’000
Customer A	124,807	64,485
Customer B	60,584	44,516
Customer C	35,145	less than 10%

(ii) Revenue expected to be recognised in the future arising from contracts with customers in existence at the reporting date

The Group has applied the practical expedient in paragraph 121 of IFRS 15 to its contracts for revenue from sale of software and solutions, provision of technical services and sale of products such that the financial information does not include information about revenue, that the Group will be entitled to when it satisfies the remaining performance obligations under the contracts had an original expected duration of one year or less.

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(b) Segment reporting

The Group manages its businesses by business lines. In a manner consistent with the way in which the information is reported internally to the Group’s most senior executive management for the purposes of resource allocation and performance assessment, the Group has presented the following three reportable segments. No operating segments have been aggregated to form the following reportable segments:

Software and solutions: this segment engages in the design, implementation, enhancement and upgrades of software systems for power grid and distribution companies.
Technical services: this segment engages in the provision of maintenance services on the software systems sold.
Products: this segment sells software systems related hardware and spare parts.
(i) Segment results, assets and liabilities

For the purposes of assessing segment performance and allocating resources between segments, the Group’s most senior executive management monitor the results attributable to each reportable segment on the following basis:

Revenue and expenses are allocated to the reportable segments with reference to revenue generated by those segments and the expenses incurred by those segments. The measure used for reporting segment profit is gross profit. No inter-segment sales have occurred for the years ended 31 March 2021 and 2020. The Group’s other income and expense items, such as other income, selling expenses, administrative and other operating expenses, and assets and liabilities, including the sharing of technical know-how, are not measured under individual segments. Accordingly, neither information on segment assets and liabilities nor information concerning capital expenditure, interest income and interest expenses is presented.

Information regarding the Group’s reportable segments as provided to the Group’s most senior executive management for the purposes of resource allocation and assessment of segment performance for the years ended 31 March 2021 and 2020 is set out below.

	2021	2021
Sale of software and solutions *RMB’000* 41,164 – 41,164 14,051	Provision of technical services *RMB’000* 202,862 – 202,862 46,696	Sale of products *RMB’000* – 49,640 49,640 6,200	Total *RMB’000* 244,026 49,640
			293,666
			66,947

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2020

Disaggregated by timing of revenue recognition – Over time – Point in time Revenue from external customers and reportable segment revenue Reportable segment gross profit	Sale of software and solutions RMB’000 16,854 – 16,854 5,498	Provision of technical services RMB’000 98,426 – 98,426 13,279	Sale of products RMB’000 – 48,174 48,174 5,059	Total RMB’000 115,280 48,174
				163,454
				23,836

(ii) Reconciliations of reportable segment results to consolidated profit before taxation

Segment results Other income Net finance (costs)/income Selling expenses Administrative and other operating expenses Impairment loss on non-current assets (Note 11 and Note 12) Impairment loss on trade receivables and contract assets Share of profits of an associate Consolidated profit/(loss) before taxation	2021 *RMB’000* 66,947 217 (637) (7,223) (33,213) – (697) 13 25,407	2020 RMB’000 23,836 93 9 (7,753) (45,366) (36,036) (3,365) 725
		(67,857)

(iii) Geographic information

All the Group’s operations are carried out and the Group’s customers are located in the PRC. The Group’s non-current assets, including property, plant and equipment and intangible assets are all located or allocated to operations located in the PRC.

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5 OTHER INCOME

Gains on changes in fair value of wealth management products_(Note 18(ii))_ Others	2021 *RMB’000* 125 92 217	2020 RMB’000 – 93
		93

6 PROFIT/(LOSS) BEFORE TAXATION

Profit/(loss) before taxation is arrived at after charging:

(a) Staff costs[#]

Salaries, wages and other benefits Contributions to defined contribution retirement scheme Equity-settled share-based payment expenses	2021 *RMB’000* 26,619 280 78 26,977	2020 RMB’000 23,848 1,767 144
		25,759

The employees of the subsidiaries of the Group established in the PRC (other than Hong Kong) participate in a defined contribution retirement benefit scheme managed by the local government authority, whereby these subsidiaries are required to contribute to the scheme at a rate of 16% of the employees’ basic salaries. Employees of these subsidiaries are entitled to retirement benefits, calculated based on a percentage of the average salaries level in the PRC (other than Hong Kong), from the above-mentioned retirement scheme at their normal retirement age.

Pursuant to RenShebufa [2020] No.11 and No.49 Notice on the periodic reduction and exemption of corporate social insurance premiums (關於階段性減免企業社會保險費的通知) from February 2020 to December 2020, the subsidiaries of the Group as middle size companies defined by Classified statistics of large, medium, small and micro enterprises (2017) issued by National Bureau of Statistics were entitled to a exemption of contributions to defined contribution retirement plan during the year.

The Group has no further obligation for payment of other retirement benefits beyond the above contributions.

– 20 –

(b) Other items

	2021	2020
	*RMB’000*	RMB’000
Depreciation and amortisation# (Notes 11 and 12)	15,126	26,255
Impairment loss on property, plant and equipment_(Note 11)_	–	13,618
Impairment loss on intangible assets_(Note 12)_	–	22,418
Impairment loss on trade receivables and contract assets
(Note 16 and Note 17)	697	3,365
Operating lease charges in respect of office premises	1,514	1,858
Auditors’ remuneration:
– Statutory audit services	2,830	2,654
Research and development costs (other than amortisation)	12,297	5,254
Outsourced labour cost#	149,602	75,063
Cost of inventories sold# (Note 15)	225,631	139,226

Cost of inventories sold include RMB178,078,000 (2020: RMB96,576,000) relating to staff costs, outsourced labor cost, and depreciation and amortisation, respectively, which amounts are also included in the respective total amounts disclosed separately above or in Note 6 for each of these types of expenses.

7 INCOME TAX IN THE CONSOLIDATED STATEMENTS OF PROFIT OR LOSS

(a) Taxation in the consolidated statements of profit or loss represent:

Current tax – PRC Corporate Income Tax – Provision for the year – Under provision in respect of prior years Deferred Tax – Origination and reversal of temporary differences	2021 *RMB’000* 4,755 71 (274) 4,552	2020 RMB’000 114 – 1,197
		1,311

– 21 –

(b) Reconciliation between tax expense and accounting profit/(loss) at applicable tax rates:

Profit/(loss) before taxation Expected tax on profit/(loss) before taxation, calculated at the rates applicable in the jurisdictions concerned_(Notes (i), (ii) and (iii)) Tax effect of non-deductible expenses Tax effect of non-taxable income – Share of profits of an associate Tax effect on bonus deduction of research and development costs(Note (iv)) Effect of tax losses not recognised Write off deferred tax assets Tax concessions(Notes (v) and (vi))_ Actual tax expense	2021 *RMB’000* 25,407 6,785 1,024 (3) (3) (2,904) 1,824 – (2,174) 4,552	2020 RMB’000 (67,857) (16,225) 819 (181) (181) (1,451) 9,995 2,113 6,241 1,311

Notes:

(i) The two-tiered profits tax rates regime of the subsidiaries of the Group incorporated in Hong Kong is applicable from the year of assessment 2019/20 onwards. The profits tax rate for the first Hong Kong Dollars (“ HK$ ”) 2,000,000 of profits of corporations will be lowered to 8.25%, and profits above that amount will continue to be subject to the tax rate of 16.5%.
(ii) The Company and the subsidiaries of the Group incorporated outside of the PRC are not subject to any income tax pursuant to the rules and regulations of their respective countries of incorporation.
(iii) The subsidiaries of the Group established in Mainland China are subject to PRC Corporate Income Tax rate of 25% for the year ended 31 March 2021 (2020: 25%).
(iv) According to the relevant tax rules in the PRC, qualified research and development expenditures, are allowed for bonus deduction for income tax purpose, i.e. an additional 75% of such expenditures is deemed to be deductible expenses.
(v) The subsidiary of the Group established in the PRC, namely Along Grid, has obtained an approval from the tax bureau to be taxed as an enterprise with advanced and new technologies, and therefore enjoys a preferential PRC Corporate Income Tax rate of 15% for the period from 15 October 2019 to 14 October 2022.
(vi) The subsidiary of the Group established in the PRC, namely Aipu Zhicheng, has obtained an approval from the tax bureau to be taxed as an enterprise with advanced and new technologies, and therefore enjoys a preferential PRC Corporate Income Tax rate of 15% for the period from 15 October 2019 to 14 October 2022.

– 22 –

8 DIRECTORS’ EMOLUMENTS

Directors’ emoluments disclosed pursuant to section 383(1) of the Hong Kong Companies Ordinance and Part 2 of the Companies (Disclosure of Information about Benefits of Directors) Regulation are as follows:

	2021	2021
Directors’ fees *RMB’000* 316 105 316 105 105 105 105 1,157	Salaries, allowances and benefits in-kind Retirement scheme contributions *RMB’000* *RMB’000* 444 44 712 13 – – 600 13 – – – – – – 1,756 70 2020		Share-based payments *RMB’000* – – – – 26 26 26 78	Total *RMB’000* 804 830 316 718 131 131 131
				3,061

Directors’ fees RMB’000 285 107 285 107 107 107 107 1,105	Salaries, allowances and benefits in-kind RMB’000 439 709 – 646 – – – 1,794	Retirement scheme contributions RMB’000 39 39 – 39 – – – 117	Share-based payments RMB’000 – – – – 48 48 48 144	Total RMB’000 763 855 285 792 155 155 155
				3,160

No emoluments were paid by the Group to the directors during the years as an inducement to join or upon joining the Group or as compensation for loss of office. There was no arrangement under which a director waived or agreed to waive any remuneration during the year.

– 23 –

9 INDIVIDUALS WITH HIGHEST EMOLUMENTS

Of the five individuals with the highest emoluments, two (2020: three) are directors whose emoluments are disclosed in Note 8. The aggregate of the emoluments in respect of the remaining highest paid individuals are as follows:

Salaries and other emoluments Discretionary bonuses Retirement scheme contributions	2021 *RMB’000* 2,194 486 30 2,710	2020 RMB’000 1,160 241 79
		1,480

The emoluments of the individuals who are not directors and who are amongst the five highest paid individuals of the Group are within the following band:

	2021	2020
Hong Kong dollars (“HKD”) Nil to HKD1,000,000	2	2
Hong Kong dollars (“HKD”) HKD1,000,001 to HKD1,500,000	1	–

No emoluments were paid by the Group to these individuals during the years as an inducement to join or upon joining the Group or as compensation for loss of office.

10 EARNINGS/(LOSS) PER SHARE

(a) Basic earnings/(loss) per share

The calculation of basic earnings per share is based on the profit attributable to the equity shareholders of the Company of RMB20,855,000 (2020: loss of RMB69,168,000) and the weighted average of 495,415,177 ordinary shares (2020: 498,251,319 shares) in issue during the year ended 31 March 2021.

The weighted average number of ordinary shares is calculated as follows:

Number of shares in issue at 1 April Effect of shares repurchased Weighted average number of shares in issue	2021 505,211,177 (9,796,000) 495,415,177	2020 505,263,177 (7,011,858
		498,251,319

(b) Diluted earnings per share

The diluted earnings per share for the year ended 31 March 2021 has not been considered the effect of the outstanding share options, which is anti-dilutive.

– 24 –

11 PROPERTY, PLANT AND EQUIPMENT

Cost: At 1 April 2019 Additions Transferred out from construction in progress At 31 March 2020 Additions Disposals At 31 March 2021 Less: Accumulated depreciation: At 1 April 2019 Charge for the year At 31 March 2020 Charge for the year Written back on disposals At 31 March 2021 Less: Impairment loss: At 1 April 2019 Impairment charge At 31 March 2020 and 2021 Net book value: At 31 March 2021 At 31 March 2020	Motor vehicles, office equipment and other equipment RMB’000 2,309 95 – 2,404 459 (885) 1,978 1,166 450 1,616 381 (869) 1,128 – – – 850 788	Leasehold improvement RMB’000 25,139 – – 25,139 – – 25,139 221 2,646 2,867 1,028 – 3,895 – 13,618 13,618 7,626 8,654	Construction in progress RMB’000 47 – (47) – – – – – – – – – – – – – – –	Right-of-use assets RMB’000 – 451 – 451 1,504 (451) 1,504 – 111 111 454 (209) 356 – – – 1,148 340	Total RMB’000 27,495 546 (47) 27,994 1,963 (1,336) 28,621 1,387 3,207 4,594 1,863 (1,078) 5,379 – 13,618 13,618 9,624 9,782

The leasehold improvement mainly represents that one of the Group’s subsidiaries has entered into an agreement with Committee on Economy and Informatisation of Mentougou District to obtain the right of use of light poles for 10 years. The subsidiary renovated the poles to provide smart city infrastructure service.

For the year ended 31 March 2021, management has performed an impairment assessment of the Cash Generating Units (“ CGU ”) of leasehold improvement based on the prevailing circumstances and determined the recoverable amount of the CGU of leasehold improvement by using discounted cash flow techniques. No further impairment was recognised in 2021 (2020: RMB13,618,000).

– 25 –

12 INTANGIBLE ASSETS

Cost: At 1 April 2019 Additions At 31 March 2020 Additions At 31 March 2021 Less: Accumulated amortisation: At 1 April 2019 Charge for the year At 31 March 2020 Charge for the year At 31 March 2021 Less: Impairment loss: At 1 April 2019 Charge for the year At 31 March 2020 and 2021 Net book value: At 31 March 2021 At 31 March 2020	Software and patents RMB’000 85,318 8,893
	94,211 4,069
	98,280
	11,902 23,048
	34,950 13,263
	48,213
	– 22,418
	22,418
	27,649
	36,843

Management has performed an impairment assessment of intangible assets based on the prevailing circumstances, and determined the recoverable amount of the intangible assets by using discounted cash flow techniques. No further impairment was recognised in 2021 (2020: RMB22,418,000).

The amortisation charges are included in “cost of sales” in the consolidated statements of profit or loss.

– 26 –

13 INVESTMENTS IN SUBSIDIARIES

The following list contains the particulars of subsidiaries which principally affected the results, assets or liabilities of the Group.

Name of subsidiaries
Place and date of
establishment/
incorporation
Particulars of
registered/issued
and paid-up capital
Along Grid (北京愛朗格瑞科技
有限公司)(Note i)
The PRC
25 May 2011
RMB126,136,174
First Magic International Limited
(“First Magic”)
The British Virgin
Islands
9 June 2015
1 share of
US$1 each
Citimax Development Limited
(“Citimax Development”)
Hong Kong
26 January 2016
1 share
Aipu Zhicheng (北京艾普智城
網絡科技有限公司)(Note ii)
The PRC
27 December 2013
RMB81,050,000
Great Progress International
Limited (“Great Progress”)
The British Virgin
Islands
23 October 2018
1 share of
US$1 each
Main Smart (H.K.) Limited
(“Main Smart”)
Hong Kong
13 April 2016
1 share
Mingan Zhicheng (北京明安智
城科技有限公司)(Note i)
The PRC
26 November 2018
HKD20,000,000
Mingan Wulian (北京明安物
聯科技有限公司)(Note ii)
The PRC
5 December 2018
RMB20,202,000

Proportion of ownership interest
The Group’s
effective
interest
Held by the
Company
Held by
a subsidiary Principal activities
100%
–
100% Design, implementation,
enhancement and upgrades
of software systems and
the provision of technical
services and the sale of
products
100%
100%
– Investment holding
100%
–
100% Investment holding
100%
–
100% Investment, construction and
operation of smart city
infrastructure
100%
100%
– Investment holding
100%
–
100% Investment holding
100%
–
100% Investment holding
100%
–
100% Investment holding

Note: (i) The official name of these entities is in Chinese. The English name is for identification purpose only. These entities were registered as a wholly foreign-owned enterprise in the PRC.

(ii) The official name of these entities is in Chinese. The English name is for identification purpose only. These entities were registered as domestic enterprise in the PRC.

– 27 –

14 INTEREST IN AN ASSOCIATE

The following are the particulars of the associate, which is an unlisted corporate entity whose quoted market price is not available:

		Place of
	Form of business	establishment	Particulars of	The Group’s
Name of associate	structure	and business	paid-up capital	effective interest	Principal activity
北京北控智科能源互聯網	Limited	PRC	RMB16,400,020	36.59%	Development of smart city
有限公司(Beijing Beikong	liability company				energy internet
Zhike Energy Internet
Company Limited#)

# English translation for identification only.

Summarised information of the associate:

2021 *RMB’000* Amounts of the Group’s share of the associate Gains from continuing operations 35 Total comprehensive income 35 15 INVENTORIES AND CONTRACT COSTS 2021 *RMB’000* Products 277 Software systems under development 12,231 12,508 The analysis of the amounts of inventories recognised as expenses as follows: 2021 *RMB’000* Cost of inventories sold 225,631 Write-down of inventories 137 225,768	2020 RMB’000 1,982
	1,982
	2020 RMB’000 327 9,456
	9,783
	2020 RMB’000 139,226 3,213
	142,439

– 28 –

16 CONTRACT ASSETS

Arising from performance under contracts with customers Less: loss allowance	2021 *RMB’000* 40,331 730 39,601	2020 RMB’000 35,931 1,046
		34,885

The amount of contract assets that is expected to be recovered after more than one year is RMB4,957,000 at 31 March 2021 (31 March 2020: RMB3,199,000), all of which relates to retentions.

17 TRADE AND BILL RECEIVABLES

Trade receivables Bill receivables Less: loss allowance	2021 *RMB’000* 219,915 2,184 222,099 9,953 212,146	2020 RMB’000 122,930 675
		123,605 8,940
		114,665

(a) Ageing analysis

The ageing analysis of trade and bill receivables, based on the invoice date and net of loss allowance, of the Group is as follows:

Less than 1 year 1 to 2 years 2 to 3 years Over 3 years	2021 *RMB’000* 191,564 15,995 4,587 – 212,146	2020 RMB’000 102,034 12,234 95 302
		114,665

The Group generally requires customers to settle progress billings and retention receivables in accordance with contracted terms. Credit terms of 90 days may be granted to certain customers for progress billings.

– 29 –

18 PREPAYMENTS, DEPOSITS AND OTHER RECEIVABLES

Amounts due from related parties Amounts due from third parties_(Note (i)) Prepayment for technical service fee Staff advances and other deposits VAT refundable Prepayment for miscellaneous expenses Wealth management products(Note (ii))_ Others	2021 *RMB’000* 1,538 6,206 1,827 4,994 811 460 9,125 1,889 26,850	2020 RMB’000 38 6,000 731 6,479 2,765 3,256 – 2,535
		21,804

Note:

(i) As at 31 March 2021, the amount was loan granted to a third party with annual interest rate of 7%, which have been repaid in April 2021.
(ii) As at 31 March 2021, the Group’s investment in a wealth management product issued by a commercial bank which can be redeemed at anytime is as follows:

		31 March 2021
	Expected
	annual rate	Principal
	of return	amount
		RMB’000
Non-principal-guaranteed product	1.56%	9,000
Fair value		9,125

19 CASH AND CASH EQUIVALENTS

Cash and cash equivalents comprise:

Total bank balances and cash Less: restricted cash Cash at bank and on hand	2021 *RMB’000* 31,703 9,980 21,723	2020 RMB’000 31,802 109
		31,693

The Group’s operations in the PRC (excluding Hong Kong) are conducted in RMB. RMB is not a freely convertible currency and the remittance of RMB out of the PRC (excluding Hong Kong) is subject to the relevant rules and regulations of the foreign exchange controls promulgated by the PRC government.

Restricted cash include RMB260,000 as at 31 March 2021 (31 March 2020: RMB109,000) of cash deposits pledged to banks for the performance guarantee in relation to certain sales contracts, and RMB9,720,000 (31 March 2020: Nil) of bank balance which has been pledged for the loan from the bank.

– 30 –

20 TRADE PAYABLES

	2021	2020
	*RMB’000*	RMB’000
Trade payables to third parties	67,516	20,321

All of the trade payables are expected to be settled within one year or are repayable on demand.

The ageing analysis of the Group’s trade payables, based on the invoice date, is as follows:

Less than 1 year 1 to 2 years 2 to 3 years Over 3 years OTHER PAYABLES AND ACCRUALS Amounts due to related parties Amounts due to a third party Other taxes payables Payables for staff related costs Lease liabilities (within 1 year) Others	2021 *RMB’000* 64,232 2,636 136 512 67,516 2021 *RMB’000* 9,559 6,926 9,615 3,745 646 6,418 36,909	2020 RMB’000 17,833 1,976 212 300
		20,321
		2020 RMB’000 9,559 1,000 5,957 4,117 205 5,640
		26,478

21 OTHER PAYABLES AND ACCRUALS

Note: As at 31 March 2021, amounts due to a third party are unsecured, interest-free and repayable within one year.

– 31 –

22 BANK LOANS

Short-term bank loans, secured_(Note (i))_ Short-term bank loans, unsecured	2021 *RMB’000* 28,500 2,767 31,267	2020 RMB’000 9,000 4,000
		13,000

Notes:

(i) As at 31 March 2021, the secured short-term bank loans comprises the following:
The bank loan RMB5,000,000 is jointly guaranteed by the executive directors, a founder and Beijing Haidian Sci-tech Enterprises Financing Guarantee Co., Ltd;
The bank loan of RMB2,000,000 is jointly guaranteed by the executive director and director’s spouse and Beijing Cultural Technology Financing Guarantee Co., Ltd;
The bank loan of RMB3,500,000 is jointly guaranteed by the executive directors, a founder and Beijing Yizhuang International Financing Guarantee Co., Ltd;
The bank loan of RMB5,000,000 is guaranteed by the executive directors;
The bank loan RMB4,000,000 is guaranteed by Beijing Shouchuang Financing Guarantee Co.,Ltd; and
The bank loan RMB9,000,000 is pledged by the cash deposits of the Company (see Note 19).
(ii) All short-term loans are repayable within one year.

23 EQUITY SETTLED SHARE-BASED TRANSACTIONS

The Company has a share option scheme which was adopted on 5 February 2018 whereby the directors are authorised, at their discretion, to grant eligible participants option to subscribe for the shares of the Company. On 30 July 2018, the Company offered to grant share options to certain eligible persons (including executive directors and independent non-executive directors of the Company) to subscribe for a total of 26,700,000 shares of the Company. For the share options granted, 20% vested on 30 June 2019, another 30% vested on 30 June 2020, and the remaining 50% will vest on 30 June 2021, subject to the vesting condition. These share options will be exercisable until 31 December 2021.

No options were exercised during the year ended 31 March 2021.

– 32 –

(a) The terms and conditions of the grants are as follows:

Options granted to directors:
– on 30 July 2018
– on 30 July 2018
– on 30 July 2018
Options granted to employees
and advisers to the Group:
– on 30 July 2018
– on 30 July 2018
– on 30 July 2018
Total share options granted

Number of
instruments
Vesting periods
Contractual
life of options
1,140,000
11 months from the date of grant
41 months
1,710,000
23 months from the date of grant
41 months
2,850,000
35 months from the date of grant
41 months
4,200,000
11 months from the date of grant
41 months
6,300,000
23 months from the date of grant
41 months
10,500,000
35 months from the date of grant
41 months
26,700,000

Except for share options granted to advisors and independent non-executive directors of the Group, vesting of share options are subject to financial performance of the Group for the years ended 31 March 2020 and 2021, unless the board of directors of the Company waive such condition. At 31 March 2021, as the vesting conditions in respect of financial performance have not been met and the board of directors of the Company had no intention to waive such condition, the share options mentioned above which vested on 30 June 2019 and on 30 June 2020 were considered forfeitures.

(b) Fair value of share options and assumptions

The fair value of services received in return for share options granted is measured by reference to the fair value of share options granted. The estimate of the fair value of the share options granted is measured based on a Black-Scholes model. The contractual life of the share option is used as an input into this model. Expectations of early exercise are incorporated into the Black-Scholes model.

Fair value of share options and assumptions

Fair value at measurement date	HKD 0.28
Exercise price	HKD 0.80
Expected volatility (expressed as weighted average volatility used
in the modelling under Black-Scholes model)	44.90%
Option life (expressed as weighted average life used in the modelling under
Black-Scholes model)	3.42
Risk-free interest rate (based on Exchange Fund Notes)	1.94%

The expected volatility is based on the historic volatility (calculated based on the weighted average remaining life of the share options), adjusted for any expected changes to future volatility based on publicly available information. Expected dividends are based on historical dividends. Changes in the subjective input assumptions could materially affect the fair value estimate.

Share options were granted under a service condition. This condition has not been taken into account in the grant date fair value measurement of the services received. There were no market conditions associated with the share option grants.

– 33 –

PUBLIC FLOAT

Based on the information publicly available to the Company and within the knowledge of the Directors, at least 25% of the Company’s total issued share capital was held by the public at all times throughout the Year as required under the Listing Rules of Stock Exchange of Hong Kong Limited (the “ Stock Exchange ”).

PURCHASE, SALE OR REDEMPTION OF THE COMPANY’S LISTED SECURITIES

During the year ended 31 March 2021, neither the Company nor any of its subsidiaries has purchased, sold or redeemed any of the listed securities of the Company.

COMPLIANCE WITH CORPORATE GOVERNANCE CODE

The Company strives to attain and maintain high standards of corporate governance best suited to the needs and interests of the Group as it believes that an effective corporate governance framework is fundamental to promoting and safeguarding interests of shareholders and other stakeholders and enhancing shareholder value. Accordingly, the Company has adopted and applied corporate governance principles and practices that emphasise a quality Board, effective risk management and internal controls systems, stringent disclosure practices, transparency and accountability. It is, in addition, committed to continuously improving these practices and inculcating an ethical corporate culture.

Throughout the Year, the Company has complied with all code provisions of the Corporate Governance Code (the “ CG Code ”) contained in Appendix 14 to the Listing Rules.

COMPLIANCE WITH THE MODEL CODE OF FOR SECURITIES TRANSACTIONS BY DIRECTORS

The Company has adopted the Model Code for Securities Transactions by Directors of Listed Issuers (the “ Model Code ”) as set out in Appendix 10 to the Listing Rules. In response to specific enquiries made, all Directors confirmed that they have complied with the Model Code in their securities transactions throughout the Year.

ANNUAL GENERAL MEETING

The Annual General Meeting (the “ AGM ”) of the Company will be held on Thursday, 16 September 2021. Shareholders of the Company should refer to the details regarding the AGM in the circular to be despatched by the Company and the notice of meeting and form of proxy accompanying therewith.

– 34 –

FINAL DIVIDEND

The Directors do not recommend the payment of a final dividend for the Year (2020: Nil).

CLOSURE OF REGISTER OF MEMBERS

For determining the entitlement to attend and vote at the AGM, the register of members of the Company will be closed from Saturday, 11 September 2021 to Thursday, 16 September 2021, both days inclusive, during which period no transfer of shares will be registered. In order to be eligible to attend and vote at the AGM, all transfers of shares, accompanied by the relevant share certificates, must be lodged with the Company’s share registrar in Hong Kong, Tricor Investor Services Limited, at Level 54, Hopewell Centre, 183 Queen’s Road East, Hong Kong, for registration not later than 4:30 p.m. on Friday, 10 September 2021 (Hong Kong time), being the last registration date.

EMPLOYEES AND REMUNERATION POLICIES

The total number of employees was approximately 111 as at 31 March 2021 (31 March 2020: 115). The Group’s employee benefit expenses mainly included salaries, overtime payment and discretionary bonus, share options, other staff benefits and contributions to retirement schemes. For the Year, the Group’s total expenditure for employee benefit (including directors’ emoluments) amounted to approximately RMB30.4 million (2020: RMB31.8 million).

Remuneration is determined with reference to the qualification, experience and work performance, whereas the payment of discretionary bonus is generally subject to work performance, the financial performance of the Group in that particular year and general market conditions.

COMPLIANCE WITH LAWS AND REGULATIONS

The Group recognises the importance of compliance with regulatory requirements and that the risks of non-compliance with such requirements. To the best of the Directors’ knowledge, information and belief, and having made all reasonable enquiries, the Group has complied with all applicable laws and regulations in the PRC and Hong Kong in all material respects during the Year.

– 35 –

ENVIRONMENTAL, SOCIAL AND GOVERNANCE RESPONSIBILITY

The Group is committed to the long-term sustainability of its businesses and the communities with which it engages. It delivers quality products and services to its customers by managing its businesses prudently, while executing management decisions with due care and attention. The Group demonstrates a strong sense of corporate social responsibility and believes such a commitment helps strengthen its relationship with the community. Operating as a sound corporate citizen through sponsorship and supporting social-responsible projects at company level, the Group is committed to bringing positive impact to the general welfare of the community.

REVIEW OF FINANCIAL STATEMENTS

The consolidated financial statements of the Group for the Year have been reviewed by the audit committee of the Company and audited by the independent auditor of the Company, KPMG, a Public Interest Entity Auditor registered in accordance with the Financial Reporting Council Ordinance. The unqualified independent auditor’s report will be included in the Annual Report to shareholders.

The figures set out in the preliminary announcement of the Group’s results in respect of the Group’s consolidated statement of financial position, consolidated statement of profit or loss, consolidated statement of profit or loss and other comprehensive income and the related notes for the Year have been compared by the Company’s auditor, KPMG, a Public Interest Entity Auditor registered in accordance with the Financial Reporting Council Ordinance, to the amounts set out in the Group’s audited consolidated financial statements for the Year. The auditor of the Company, KPMG, found that the figures set out in the Group’s preliminary annual results in respect of the Group’s consolidated statement of financial position, consolidated statement of profit or loss, consolidated statement of profit or loss and other comprehensive income and the related notes for the Year contained in this announcement are in agreement with the amounts set out in the Group’s audited consolidated financial statements for the year. The work performed by KPMG in this respect was limited and did not constitute an audit, review or other assurance engagement and consequently no assurance has been expressed by the auditor for this announcement.

EVENTS AFTER REPORTING PERIOD

Other than as disclosed elsewhere in this announcement, from 1 April 2021 to the date of this announcement, there are no significant events occurred that may affect the Group.

– 36 –

PUBLICATION OF ANNUAL RESULTS AND ANNUAL REPORT

This annual results announcement is published on the website of the Company at http://www.oneforce.com.cn and the Hong Kong Exchanges and Clearing Limited at http://www.hkexnews.hk. The 2021 annual report of the Company will be despatched to the Company’s shareholders in due course and will also be available at the websites above.

APPRECIATION

The Board would like to present its great appreciation to the management team and employees of the Group who have contributed to the success of the Group and are working towards achieving the Group’s visions. Heartfelt gratitude is also expressed to all of partners, customers, suppliers of the Group and the Shareholders. With their kind support and trust, the Board is confident that it will lead the Group to another milestone.

By order of the Board OneForce Holdings Limited WANG Dongbin Chairman

Beijing, PRC, 18 June 2021

For identification purpose only

As at the date of this announcement, the Board of the Company comprises Mr. Wang Dongbin, Mr. Wu Zhanjiang, Mr. Wu Hongyuan and Mr. Li Kangying as the executive Directors; and Mr. Ng Kong Fat, Mr. Han Bin and Mr. Wang Peng as the independent non-executive Directors.

– 37 –