10q10k10q10k.net

What changed in SU Group Holdings Ltd's 20-F — 2023 vs 2024

vs

Paragraph-level year-over-year comparison of SU Group Holdings Ltd's 2023 and 2024 20-F annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2024 report.

+604 added−527 removedSource: 20-F (2025-01-28) vs 20-F (2024-01-31)

Top changes in SU Group Holdings Ltd's 2024 20-F

604 paragraphs added · 527 removed · 330 edited across 5 sections

Item 3. Legal Proceedings

Legal Proceedings — active lawsuits and investigations

143 edited+93 added−20 removed347 unchanged
Biggest changeOur business, financial condition and results of operations, and/or the value of our ordinary shares or our ability to continue to offer securities to investors may be materially and adversely affected to the extent the laws and regulations of the PRC become applicable to a company such as us.
Biggest changeDividends payable to our foreign investors and gains on the sale of our shares of ordinary shares by our foreign investors may become subject to tax by the PRC. ● Our business, financial condition and results of operations, and/or the value of our ordinary shares or our ability to continue to offer securities to investors may be materially and adversely affected to the extent the laws and regulations of the PRC become applicable to a company such as us. 6 ● Under the HFCA Act, our ordinary shares may be prohibited from being traded on any U.S. securities exchange, including the New York Stock Exchange and Nasdaq, or through any other trading method within the SEC’s regulatory jurisdiction, if our auditor is not inspected by the PCAOB for three consecutive years, and this ultimately could result in trading in our ordinary shares being prohibited.
Dividends payable to our foreign investors and gains on the sale of our shares of ordinary shares by our foreign investors may become subject to tax by the PRC. SU Group is a holding company incorporated in Cayman Islands with its operating subsidiaries located in Hong Kong. Accordingly, most of our cash is maintained in HK$.
Dividends payable to our foreign investors and gains on the sale of our ordinary shares by our foreign investors may become subject to tax by the PRC. SU Group is a holding company incorporated in Cayman Islands with its operating subsidiaries located in Hong Kong. Accordingly, most of our cash is maintained in HK$.
The market price for our ordinary shares may be subject to wide fluctuations in response to factors including the following: ● regulatory developments affecting us or our industry; ● actual or anticipated fluctuations in our results of operations and changes or revisions of our expected results; ● changes in financial estimates by securities research analysts; 26 ● conditions in the market for intermediary services; ● announcements by us or our competitors of new product and/or service offerings, acquisitions, strategic relationships, joint ventures, capital raisings or capital commitments; ● additions to or departures of our senior management; ● fluctuations of exchange rates; ● release or expiry of lock-up or other transfer restrictions on our outstanding shares; ● political or legal actions taken or restrictions imposed by the government in mainland China and Hong Kong; and ● sales or perceived potential sales of additional ordinary shares.
The market price for our ordinary shares may be subject to wide fluctuations in response to factors including the following: ● regulatory developments affecting us or our industry; ● actual or anticipated fluctuations in our results of operations and changes or revisions of our expected results; ● changes in financial estimates by securities research analysts; ● conditions in the market for intermediary services; ● announcements by us or our competitors of new product and/or service offerings, acquisitions, strategic relationships, joint ventures, capital raisings or capital commitments; ● additions to or departures of our senior management; ● fluctuations of exchange rates; ● release or expiry of lock-up or other transfer restrictions on our outstanding shares; ● political or legal actions taken or restrictions imposed by the government in mainland China and Hong Kong; and ● sales or perceived potential sales of additional ordinary shares.
Furthermore, if any security systems, parts and/or components are damaged in the course of transportation beyond our control, we cannot assure you that we would not be involved in any legal proceedings related to the quality of any single product sold by us. 15 Our business operations and financial performance may be materially affected if any product liability claim arises.
Furthermore, if any security systems, parts and/or components are damaged in the course of transportation beyond our control, we cannot assure you that we would not be involved in any legal proceedings related to the quality of any single product sold by us. Our business operations and financial performance may be materially affected if any product liability claim arises.
All these risks may affect our performance of contracts with public bodies, and may have a material adverse effect on our business and results of operations. If we fail to meet the requirements of our contracts or quality standards of our services, we may be required to pay damages and additional costs, which may adversely affect our business and reputation.
All these risks may affect our performance of contracts with public bodies, and may have a material adverse effect on our business and results of operations. 26 If we fail to meet the requirements of our contracts or quality standards of our services, we may be required to pay damages and additional costs, which may adversely affect our business and reputation.
Prospective investors should note that historical dividend payments should not be regarded as an indication of our future dividends. 25 Changes in the rules and regulations, industry standards and advanced technology innovation relating to the security-related engineering services and security guarding and screening services and related vocational training services may affect our operation.
Prospective investors should note that historical dividend payments should not be regarded as an indication of our future dividends. Changes in the rules and regulations, industry standards and advanced technology innovation relating to the security-related engineering services and security guarding and screening services and related vocational training services may affect our operation.
We generate revenues from both private and public sector projects, including those carried out in residential properties and infrastructure facilities. For the fiscal years ended September 30, 2022 and 2023, 86.8% and 82.3% of our revenue was generated from private sector projects, respectively, and 13.2% and 17.7% of our revenue was generated from public sector projects, respectively.
We generate revenues from both private and public sector projects, including those carried out in residential properties and infrastructure facilities. For the fiscal years ended September 30, 2022, 2023 and 2024, 86.8%, 82.3% and 86.2% of our revenue was generated from private sector projects, respectively, and 13.2%, 17.7% and 13.8% of our revenue was generated from public sector projects, respectively.
For the fiscal years ended September 30, 2022 and 2023, Shine Union declared dividends of HK$25.3 million and nil, respectively, and Fortune Jet declared dividends of HK$0.4 million, and nil, respectively, totaling HK$25.7 million and nil, respectively, to their then respective shareholders, of which HK$40,400 and nil, respectively, was attributable to a non-controlling interest.
For the fiscal years ended September 30, 2022, 2023 and 2024, Shine Union declared dividends of HK$25.3 million, nil and nil, respectively, and Fortune Jet declared dividends of HK$0.4 million, nil, and nil, respectively, totaling HK$25.7 million, nil and nil, respectively, to their then respective shareholders, of which HK$40,400, nil and nil, respectively, was attributable to a non-controlling interest.
Any negative media coverage about our suppliers or their brands, incidents of product recall by our suppliers or the supply of poor quality or defective products by them may adversely impact our business performance and reputation. Various registrations, approvals, licenses and certifications are required to operate our businesses.
Any negative media coverage about our suppliers or their brands, incidents of product recall by our suppliers or the supply of poor quality or defective products by them may adversely impact our business performance and reputation. 19 Various registrations, approvals, licenses and certifications are required to operate our businesses.
Moreover, the minimum wage requirement in Hong Kong has increased and can continue to increase our labor costs in the future. 17 Our agreements do not contain labor cost adjustment mechanisms, and we may fail to anticipate or may be unable to transfer the full impact of any increase in labor cost to our customers.
Moreover, the minimum wage requirement in Hong Kong has increased and can continue to increase our labor costs in the future. Our agreements do not contain labor cost adjustment mechanisms, and we may fail to anticipate or may be unable to transfer the full impact of any increase in labor cost to our customers.
Any of these factors may result in large and sudden changes in the volume and price at which our ordinary shares will trade. In the past, shareholders of public companies have often brought securities class action suits against those companies following periods of instability in the market price of their securities.
Any of these factors may result in large and sudden changes in the volume and price at which our ordinary shares will trade. 32 In the past, shareholders of public companies have often brought securities class action suits against those companies following periods of instability in the market price of their securities.
Although the specific cause of such volatility is unclear, our anticipated public float may amplify the impact the actions taken by a few shareholders have on the price of our ordinary shares, which may cause our share price to deviate, potentially significantly, from a price that better reflects the underlying performance of our business.
Although the specific cause of such volatility is unclear, our public float may amplify the impact the actions taken by a few shareholders have on the price of our ordinary shares, which may cause our share price to deviate, potentially significantly, from a price that better reflects the underlying performance of our business.
We cannot assure you that we will continue to meet those continued listing requirements. If Nasdaq delists our securities from trading on its exchange and we are not able to list our securities on another national securities exchange, we expect our securities could be quoted on an over-the-counter market.
We cannot assure you that we will continue to meet those continued listing requirements. 39 If Nasdaq delists our securities from trading on its exchange and we are not able to list our securities on another national securities exchange, we expect our securities could be quoted on an over-the-counter market.
As a result, it is uncertain whether and on what basis a PRC court would enforce a judgment rendered by a court in the United States. It may also be difficult for you or overseas regulators to conduct investigations or collect evidence within China.
As a result, it is uncertain whether and on what basis a PRC court would enforce a judgment rendered by a court in the United States. 16 It may also be difficult for you or overseas regulators to conduct investigations or collect evidence within China.
Any of the foregoing could materially and adversely affect our reputation, business, results of operations and financial condition. Our success and business operations are largely dependent on certain key personnel and our ability to attract and retain talented employees such as screeners with requisite skills, expertise and experience.
Any of the foregoing could materially and adversely affect our reputation, business, results of operations and financial condition. 24 Our success and business operations are largely dependent on certain key personnel and our ability to attract and retain talented employees such as screeners with requisite skills, expertise and experience.
There is no assurance that our business will continue to attain similar performance as being comparable to that during the fiscal years ended September 30, 2022 and 2023 or we will be able to maintain continued growth through organic growth and implementation of our business strategies.
There is no assurance that our business will continue to attain similar performance as being comparable to that during the fiscal years ended September 30, 2022, 2023 and 2024 or we will be able to maintain continued growth through organic growth and implementation of our business strategies.
Federal Income Tax Considerations — Passive Foreign Investment Company Rules .” Our current amended and restated memorandum and articles of association contains anti-takeover provisions that could have a material adverse effect on the rights of holders of our ordinary shares.
Federal Income Tax Considerations — Passive Foreign Investment Company Rules.” 35 Our current amended and restated memorandum and articles of association contains anti-takeover provisions that could have a material adverse effect on the rights of holders of our ordinary shares.
As a result, our ordinary shares may decline in value dramatically or even become worthless should we become subject to new requirement to obtain permission from the PRC government to list on a U.S. exchange in the future. 12 Recently, the General Office of the Central Committee of the Communist Party of China and the General Office of the State Council jointly issued the Opinions on Severe and Lawful Crackdown on Illegal Securities Activities, which were available to the public on July 6, 2021.
As a result, our ordinary shares may decline in value dramatically or even become worthless should we become subject to new requirement to obtain permission from the PRC government to list on a U.S. exchange in the future. 15 Recently, the General Office of the Central Committee of the Communist Party of China and the General Office of the State Council jointly issued the Opinions on Severe and Lawful Crackdown on Illegal Securities Activities, which were available to the public on July 6, 2021.
Failure to satisfy these requirements may subject us to penalties under the Substance Act. 30 We are an “emerging growth company” within the meaning of the Securities Act and may take advantage of certain reduced reporting requirements.
Failure to satisfy these requirements may subject us to penalties under the Substance Act. We are an “emerging growth company” within the meaning of the Securities Act and may take advantage of certain reduced reporting requirements.
During the fiscal years ended September 30, 2022 and 2023, we were not liable for losses or required to pay any damages for any delay in the completion or non-completion of any projects.
During the fiscal years ended September 30, 2022, 2023 and 2024, we were not liable for losses or required to pay any damages for any delay in the completion or non-completion of any projects.
If adequate funds are unavailable to us on acceptable terms, we may be unable to expand or enhance our security-related engineering services, take advantage of future opportunities or respond to competitive pressures or unanticipated events, any of which could have a material adverse effect on our business development. 24 Fluctuations in foreign exchange rates may become material and adversely affect our business, financial condition and results of operations.
If adequate funds are unavailable to us on acceptable terms, we may be unable to expand or enhance our security-related engineering services, take advantage of future opportunities or respond to competitive pressures or unanticipated events, any of which could have a material adverse effect on our business development. 29 Fluctuations in foreign exchange rates may become material and adversely affect our business, financial condition and results of operations.
Our failure to purchase a minimum purchase quantity may entitle suppliers to terminate the distribution agreements entered with us and/or terminate our exclusive right to market and sell one or more of their products as distributors, and failure to meet with other such restrictions or obligations could adversely affect our business relationships with our suppliers, thus our business and results of operations. 18 Increase in our security systems costs may adversely affect our operations and financial performance.
Our failure to purchase a minimum purchase quantity may entitle suppliers to terminate the distribution agreements entered with us and/or terminate our exclusive right to market and sell one or more of their products as distributors, and failure to meet with other such restrictions or obligations could adversely affect our business relationships with our suppliers, thus our business and results of operations. 22 Increase in our security systems costs may adversely affect our operations and financial performance.
During the fiscal years ended September 30, 2022 and 2023, we were granted subsidies from the aforementioned funds by the Hong Kong government in the amount of HK$3.3 million and HK$0.4 million, respectively. Such government grants are non-recurring in nature and were recorded as an item in other income in our consolidated financial statements.
During the fiscal years ended September 30, 2022, 2023 and 2024, we were granted subsidies from the aforementioned funds by the Hong Kong government in the amount of HK$3.3 million, HK$0.4 million, and nil, respectively. Such government grants are non-recurring in nature and were recorded as an item in other income in our consolidated financial statements.
During the fiscal years ended September 30, 2022 and 2023, our insurance costs had continued to increase and the aggregate expenses of our insurance were approximately HK$0.9 million and HK$1.2 million, respectively. We cannot control if there are reductions or limitations of insurance coverage by insurers upon the expiry of our currently existing policies.
During the fiscal years ended September 30, 2022, 2023 and 2024, our insurance costs had continued to increase, and the aggregate expenses of our insurance were approximately HK$0.9 million, HK$1.2 million and HK$1.9 million (US$0.2 million), respectively. We cannot control if there are reductions or limitations of insurance coverage by insurers upon the expiry of our currently existing policies.
A non-U.S. corporation such as us will be classified as a passive foreign investment company, which is known as a PFIC, for any taxable year if, for such year, either: ● At least 75% of our gross income for the year is passive income; or ● The average percentage of our assets (determined at the end of each quarter) during the taxable year which produces passive income or which are held for the production of passive income is at least 50%.
A non-U.S. corporation such as us will be classified as a passive foreign investment company, which is known as a “PFIC”, for any taxable year if, for such year, either: ● At least 75% of our gross income for the year is passive income; or ● The average percentage of our assets (determined at the end of each quarter) during the taxable year which produces passive income or which are held for the production of passive income is at least 50%.
Our employee turnover rate in respect of the full-time employees for providing security guarding and screening services and related vocational training services, calculated by dividing the number of relevant employees who left us by the total number of relevant full-time employees during the relevant period, was 57.0% and 61.3% for the fiscal years ended September 30, 2022 and 2023, respectively.
Our employee turnover rate in respect of the full-time employees for providing security guarding and screening services and related vocational training services, calculated by dividing the number of relevant employees who left us by the total number of relevant full-time employees during the relevant period, was 57.0%, 61.3% and 79.3% for the fiscal years ended September 30, 2022, 2023 and 2024, respectively.
The Ensuring Quality Information and Transparency for Abroad-Based Listings on our Exchanges (EQUITABLE) Act prescribes increased disclosure requirements for such issuers and, beginning in 2025, the delisting from national securities exchanges of issuers included for three consecutive years on the SEC’s list. On May 20, 2020, the U.S. Senate passed S. 945, the HFCAA.
The Ensuring Quality Information and Transparency for Abroad-Based Listings on our Exchanges (EQUITABLE) Act prescribes increased disclosure requirements for such issuers and, beginning in 2025, the delisting from national securities exchanges of issuers included for three consecutive years on the SEC’s list. On May 20, 2020, the U.S. Senate passed S. 945, the HFCA Act.
The enactment of the HFCAA and any additional rulemaking efforts to increase U.S. regulatory access to audit information could cause investor uncertainty for affected issuers, including us, and the market price of our ordinary shares could be adversely affected, and our ordinary shares could be prohibited from being traded on any U.S. national securities exchange, or through any other trading method within the SEC’s regulatory jurisdiction, if it is unable to cure the situation to meet the PCAOB inspection requirement in time.
The enactment of the HFCA Act and any additional rulemaking efforts to increase U.S. regulatory access to audit information could cause investor uncertainty for affected issuers, including us, and the market price of our ordinary shares could be adversely affected, and our ordinary shares could be prohibited from being traded on any U.S. national securities exchange, or through any other trading method within the SEC’s regulatory jurisdiction, if it is unable to cure the situation to meet the PCAOB inspection requirement in time.
On December 29, 2022, the Consolidated Appropriations Act was signed into law. The Consolidated Appropriations Act contains, among other things, an identical provision to AHFCAA, which reduces the number of consecutive non-inspection years required for triggering the prohibitions under the HFCAA from three years to two.
On December 29, 2022, the Consolidated Appropriations Act was signed into law. The Consolidated Appropriations Act contains, among other things, an identical provision to AHFCAA, which reduces the number of consecutive non-inspection years required for triggering the prohibitions under the HFCA Act from three years to two.
We recorded certain one-off gains which may be non-recurring in the future. For the fiscal years ended September 30, 2022 and 2023, we received government grants of HK$3.5 million and HK$0.6 million, respectively.
We recorded certain one-off gains which may be non-recurring in the future. For the fiscal years ended September 30, 2022, 2023 and 2024, we received government grants of HK$3.5 million, HK$0.6 million, and HK$0.1 million, respectively.
On September 22, 2021, the PCAOB adopted a final rule implementing the HFCAA, which provides a framework for the PCAOB to use when determining, as contemplated under the HFCAA, whether the PCAOB is unable to inspect or investigate completely registered public accounting firms located in a foreign jurisdiction because of a position taken by one or more authorities in that jurisdiction.
On September 22, 2021, the PCAOB adopted a final rule implementing the HFCA Act, which provides a framework for the PCAOB to use when determining, as contemplated under the HFCA Act, whether the PCAOB is unable to inspect or investigate completely registered public accounting firms located in a foreign jurisdiction because of a position taken by one or more authorities in that jurisdiction.
In essence, the HFCAA requires the SEC to prohibit foreign companies from listing securities on U.S. securities exchanges or trading through any other trading method within the SEC’s regulatory jurisdiction, if a company retains a foreign accounting firm that cannot be inspected by the PCAOB for three consecutive years, beginning in 2021.
In essence, the HFCA Act requires the SEC to prohibit foreign companies from listing securities on U.S. securities exchanges or trading through any other trading method within the SEC’s regulatory jurisdiction, if a company retains a foreign accounting firm that cannot be inspected by the PCAOB for three consecutive years, beginning in 2021.
In the event that the actual recoverability is lower than expected, or that our past loss allowance for doubtful accounts becomes insufficient in light of any new information, we may need to provide for an additional loss allowance for doubtful accounts, which may in turn materially and adversely affect our business, financial position and results of operations.
In the event that the actual recoverability is lower than expected, or that our past loss allowance for credit loss becomes insufficient in light of any new information, we may need to provide for an additional allowance for credit loss, which may in turn materially and adversely affect our business, financial position and results of operations.
On March 24, 2021, the SEC adopted interim final rules relating to the implementation of certain disclosure and documentation requirements of the HFCAA. We will be required to comply with these rules if the SEC identifies it as having a “non-inspection” year under a process to be subsequently established by the SEC.
On March 24, 2021, the SEC adopted interim final rules relating to the implementation of certain disclosure and documentation requirements of the HFCA Act. We will be required to comply with these rules if the SEC identifies it as having a “non-inspection” year under a process to be subsequently established by the SEC.
During the fiscal years ended September 30, 2022 and 2023, we have outsourced certain parts of our security-related engineering works to subcontractors engaged by us.
During the fiscal years ended September 30, 2022, 2023 and 2024, we outsourced certain parts of our security-related engineering works to subcontractors engaged by us.
We may not have adequate insurance coverage and we are affected by the increasing insurance costs. We have maintained insurance coverage for various risks in relation to our operations, employees and protection against accidents and injuries. For details of our insurance policies, see “ Item 4. Information on the Company –4.B.
We may not have adequate insurance coverage and we are affected by the increasing insurance costs. We have maintained insurance coverage for various risks in relation to our operations, employees and protection against accidents and injuries. For details of our insurance policies, see “Item 4. Information on the Company — 4.B.
This report recommended the SEC implement five recommendations to address companies from jurisdictions that do not provide the PCAOB with sufficient access to fulfil its statutory mandate. Some of the concepts of these recommendations were implemented with the enactment of the HFCAA. However, some of the recommendations were more stringent than the HFCAA.
This report recommended the SEC implement five recommendations to address companies from jurisdictions that do not provide the PCAOB with sufficient access to fulfil its statutory mandate. Some of the concepts of these recommendations were implemented with the enactment of the HFCA Act. However, some of the recommendations were more stringent than the HFCA Act.
For further details, see “ Item 4 – 4.B Business Overview - Regulations .” Our business could be affected by the Hong Kong government’s level of spending on public works as well as the constant supply of residential buildings and establishment of infrastructure facilities in Hong Kong.
For further details, see “Item 4. — 4.B Business Overview - Regulations.” 31 Our business could be affected by the Hong Kong government’s level of spending on public works as well as the constant supply of residential buildings and establishment of infrastructure facilities in Hong Kong.
Furthermore, the AHFCAA amends the HFCAA and requires the SEC to prohibit an issuer’s securities from trading on any U.S. stock exchanges if its auditor is not subject to PCAOB inspections for two consecutive years instead of three.
Furthermore, the AHFCAA amends the HFCA Act and requires the SEC to prohibit an issuer’s securities from trading on any U.S. stock exchanges if its auditor is not subject to PCAOB inspections for two consecutive years instead of three.
Section 404 of the Sarbanes-Oxley Act of 2002 will require that we include a report of management on our internal control over financial reporting in our annual report on Form 20-F beginning with our annual report for the fiscal year ending September 30, 2024.
Section 404 of the Sarbanes-Oxley Act of 2002 requires that we include a report of management on our internal control over financial reporting in our annual report on Form 20-F beginning with our annual report for the fiscal year ending September 30, 2024.
For a more detailed discussion of the application of the PFIC rules to us and the consequences to U.S. taxpayers who own our ordinary shares if we were determined to be a PFIC, see “ Item 10 – Additional Information - 10.E Taxation — Certain U.S.
For a more detailed discussion of the application of the PFIC rules to us and the consequences to U.S. taxpayers who own our ordinary shares if we were determined to be a PFIC, see “Item 10. – Additional Information - 10.E Taxation — Certain U.S.
The interests of these beneficial owners may differ from the interests of our other shareholders. The concentration in the ownership of our ordinary shares may cause a material decline in the value of our ordinary shares. For more information regarding our beneficial owners and their affiliated entities, see “ Item 6. - 6.E.
The interests of these beneficial owners may differ from the interests of our other shareholders. The concentration in the ownership of our ordinary shares may cause a material decline in the value of our ordinary shares. For more information regarding our beneficial owners and their affiliated entities, see “Item 6. — 6.E.
Our directors, senior management and directors of our subsidiaries have extensive knowledge and are experienced in the security-related engineering services industry and security guarding and screening services industry, as applicable, and they have all significantly contributed to the development of our business. See “ Item 6.
Our directors, senior management and directors of our subsidiaries have extensive knowledge and are experienced in the security-related engineering services industry and security guarding and screening services industry, as applicable, and they have all significantly contributed to the development of our business. See “Item 6.
Customers are considered to be recurring if they engage us for more than one fiscal year or period. For the fiscal years ended September 30, 2022 and 2023, we had 319 and 351 recurring customers, respectively, representing approximately 72.7% and 79.8% of the total number of our customers, respectively, for the corresponding fiscal year or period.
Customers are considered to be recurring if they engage us for more than one fiscal year or period. For the fiscal years ended September 30, 2022, 2023 and 2024, we had 319, 351 and 352 recurring customers, respectively, representing approximately 72.7%, 79.8% and 81.5% of the total number of our customers, respectively, for the corresponding fiscal year or period.
For the years ended September 30, 2022 and 2023, the Company declared dividends of HK$8.0 million and nil, respectively, to its then shareholders. For details, see Notes 14 and 16 in our audited consolidated financial statements included elsewhere in this annual report.
For the fiscal years ended September 30, 2022, 2023 and 2024, the Company declared dividends of HK$8.0 million, nil and nil, respectively, to its then shareholders. For details, see Notes 15 and 16 in our audited consolidated financial statements included elsewhere in this annual report.
In addition, after we become a public company, our reporting obligations may place a significant strain on our management, operational, and financial resources and systems for the foreseeable future. We may be unable to complete our evaluation testing and any required remediation in a timely manner.
In addition, as we are a public company, our reporting obligations may place a significant strain on our management, operational, and financial resources and systems for the foreseeable future. We may be unable to complete our evaluation testing and any required remediation in a timely manner.
For the fiscal years ended September 30, 2022 and 2023, our cost of goods sold amounted to HK$24.3 million and HK$29.7 million, respectively, representing approximately 24.9% and 25.7% of our total cost of revenues. The prices of our security systems generally follow the price trends of, and vary with, market conditions.
For the fiscal years ended September 30, 2022, 2023 and 2024, our cost of goods sold amounted to HK$24.3 million, HK$29.7 million and HK$33.7 million (US$4.3 million), respectively, representing approximately 24.9%, 25.7% and 25.0% of our total cost of revenues. The prices of our security systems generally follow the price trends of, and vary with, market conditions.
Recently, companies with comparable public floats and initial public offering sizes have experienced instances of extreme stock price run-ups followed by rapid price declines, and such stock price volatility was seemingly unrelated to the respective company’s underlying performance.
Recently, companies with public floats comparable to ours have experienced instances of extreme stock price run-ups followed by rapid price declines, and such stock price volatility was seemingly unrelated to the respective company’s underlying performance.
In addition, if any of our employees are affected by any severe communicable diseases outbreak, it could severely disrupt our business operations and adversely affect our results of operations as we may be required to temporarily shut down our offices and training centers and to prohibit our staff from going to work to circumvent the spread of the disease.
In addition, if any of our employees are affected by any severe communicable diseases outbreak, it could severely disrupt our business operations and adversely affect our results of operations as we may be required to temporarily shut down our offices and training centers and to prohibit our staff from going to work to circumvent the spread of the disease. 27 In addition, any outbreak of communicable disease in Hong Kong could also adversely affect our customers’ business activities.
For the fiscal years ended September 30, 2022 and 2023, our subcontracting costs, which mainly represent the cost of services from third-party service providers, were HK$15.6 million and HK$32.0 million, respectively, representing 16.0% and 27.7% of our total cost of revenues, respectively. We cannot assure you that work completed by our subcontractors is up to our standard.
For the fiscal years ended September 30, 2022, 2023 and 2024, our subcontracting costs, which mainly represent the cost of services from third-party service providers, were HK$15.6 million, HK$32.0 million and HK$35.4 million (US$4.6 million), respectively, representing 16.0%, 27.7% and 26.3% of our total cost of revenues, respectively. 20 We cannot assure you that work completed by our subcontractors is up to our standard.
During the fiscal years ended September 30, 2022 and 2023, we have recorded net exchange losses of HK$96,028 and net exchange gains of HK$0.5 million, respectively, due to foreign exchange fluctuations.
During the fiscal years ended September 30, 2022, 2023 and 2024, we have recorded net exchange losses of HK$96,028, net exchange gains of HK$0.5 million and net exchange gains of HK$0.3 million (US$0.1 million), respectively, due to foreign exchange fluctuations.
Based solely on documents and representations received from the Company and their understanding of the current PRC laws and as of the date of this annual report, nothing comes to the attention of our PRC counsel, Han Kun Law Offices, that suggests we meet both of the explicit conditions set out in the Article 15 of the Trial Measures which stipulates whether an indirect offering and listing of a PRC domestic company shall fulfil the filing procedure with the CSRC, and thus, based on the opinion of our PRC counsel, we believe that we were not required to obtain the approval from or complete the filing with the CSRC for our IPO, based on the facts (1) we do not have any subsidiaries or business operation in the PRC; (2) none of our operating revenues, total profits, total assets or net assets is accounted for by any subsidiaries based in the PRC; and (3) no issuance or sale of the ordinary shares has been or will be made directly or indirectly within the PRC.
As of the date of this annual report, nothing comes to our attention that suggests we meet both of the explicit conditions set out in the Article 15 of the Trial Measures which stipulates whether an indirect offering and listing of a PRC domestic company shall fulfil the filing procedure with the CSRC, and thus, we believe that we were not required to obtain the approval from or complete the filing with the CSRC for our IPO, based on the facts (1) we do not have any subsidiaries or business operation in the PRC; (2) none of our operating revenues, total profits, total assets or net assets is accounted for by any subsidiaries based in the PRC; and (3) no issuance or sale of the ordinary shares has been or will be made directly or indirectly within the PRC.
Share Ownership ” 27 Because we do not expect to pay dividends in the foreseeable future after our IPO, you must rely on price appreciation of our ordinary shares for return on your investment. We currently intend to retain all of our available funds and any future earnings after our IPO to fund the development and growth of our business.
Because we do not expect to pay dividends in the foreseeable future, you must rely on price appreciation of our ordinary shares for return on your investment. We currently intend to retain all of our available funds and any future earnings to fund the development and growth of our business.
The HFCAA was approved by the U.S. House of Representatives on December 2, 2020. On December 18, 2020, the former U.S. president signed into law the HFCAA.
The HFCA Act was approved by the U.S. House of Representatives on December 2, 2020. On December 18, 2020, the former U.S. president signed into law the HFCA Act.
Based on the opinion of our PRC counsel, Han Kun Law Offices, we have determined that we are not subject to cybersecurity review with the CAC, given that: (i) we do not possess a large amount of personal information in our business operations originated from mainland China; and (ii) data processed in our business does not have a bearing on national security and thus may not be classified as core or important data by the authorities.
We have determined that we are not subject to cybersecurity review with the CAC, given that: (i) we do not possess a large amount of personal information in our business operations originated from mainland China; and (ii) data processed in our business does not have a bearing on national security and thus may not be classified as core or important data by the authorities.
For the fiscal years ended September 30, 2022 and 2023, approximately 47.0% and 31.4% of our revenues generated from security guarding services was generated from quotations, respectively, and approximately 53.0% and 68.6% was generated from tendering, respectively. Our revenues generated from screening services was mainly generated from quotations for the fiscal years ended September 30, 2022 and 2023.
For the fiscal years ended September 30, 2022, 2023 and 2024, approximately 47.0%, 31.4% and 22.4% of our revenues generated from security guarding services was generated from quotations, respectively, and approximately 53.0%, 68.6% and 77.6% was generated from tendering, respectively.
In addition, as advised by our PRC counsel, Han Kun Law Offices, we have determined that we are not subject to merger control review by China’s anti-monopoly enforcement agency due to the level of our revenues, and the fact that we currently do not expect to propose or implement any acquisition of control of, or decisive influence over, any company with revenues within China of more than RMB400 million.
In addition, we have determined that we are not subject to merger control review by China’s anti-monopoly enforcement agency due to the level of our revenues, and the fact that we currently do not expect to propose or implement any acquisition of control of, or decisive influence over, any company with revenues within China of more than RMB400 million.
The SEC is assessing how to implement other requirements of the HFCAA, including the listing and trading prohibition requirements described above.
The SEC is assessing how to implement other requirements of the HFCA Act, including the listing and trading prohibition requirements described above.
On December 2, 2021, the SEC issued amendments to finalize rules implementing the submission and disclosure requirements in the HFCAA.
On December 2, 2021, the SEC issued amendments to finalize rules implementing the submission and disclosure requirements in the HFCA Act.
The rules apply to registrants that the SEC identifies as having filed an annual report with an audit report issued by a registered public accounting firm that is located in a foreign jurisdiction and that PCAOB is unable to inspect or investigate completely because of a position taken by an authority in foreign jurisdictions.
The rules apply to registrants that the SEC identifies as having filed an annual report with an audit report issued by a registered public accounting firm that is located in a foreign jurisdiction and that PCAOB is unable to inspect or investigate completely because of a position taken by an authority in foreign jurisdictions. 13 Furthermore, on June 22, 2021, the U.S.
Our status as a “controlled company” could cause our ordinary shares to look less attractive to certain investors or otherwise harm our trading price. Our directors and officers currently collectively own an aggregate of 72.9% of the total voting power of our outstanding ordinary shares after the completion of our IPO.
Our status as a “controlled company” could cause our ordinary shares to look less attractive to certain investors or otherwise harm our trading price. Our directors and officers currently collectively own an aggregate of 71.2% of the total voting power of our outstanding ordinary shares.
Because we are a foreign private issuer under the Exchange Act, we are exempt from certain provisions of the securities rules and regulations in the United States that are applicable to U.S. domestic issuers, including: ● the rules under the Exchange Act requiring the filing of quarterly reports on Form 10-Q or current reports on Form 8-K with the SEC; ● the sections of the Exchange Act regulating the solicitation of proxies, consents, or authorizations in respect of a security registered under the Exchange Act; ● the sections of the Exchange Act requiring insiders to file public reports of their share ownership and trading activities and liability for insiders who profit from trades made in a short period of time; and ● the selective disclosure rules by issuers of material non-public information under Regulation FD.
Because we are a foreign private issuer under the Exchange Act, we are exempt from certain provisions of the securities rules and regulations in the United States that are applicable to U.S. domestic issuers, including: ● the rules under the Exchange Act requiring the filing of quarterly reports on Form 10-Q or current reports on Form 8-K with the SEC; ● the sections of the Exchange Act regulating the solicitation of proxies, consents, or authorizations in respect of a security registered under the Exchange Act; ● the sections of the Exchange Act requiring insiders to file public reports of their share ownership and trading activities and liability for insiders who profit from trades made in a short period of time; and ● the selective disclosure rules by issuers of material non-public information under Regulation FD. 37 We will be required to file an annual report on Form 20-F within four months of the end of each fiscal year.
The concentration in the ownership of our ordinary shares may cause a material decline in the value of our ordinary shares. For more information regarding Mr. Chan and his affiliated entity, see “ 6.E.
The concentration in the ownership of our ordinary shares may cause a material decline in the value of our ordinary shares. For more information regarding Mr. Chan and his affiliated entity, see “Item 6. — Directors, Senior Management and Employees — 6.E.
For details of our future plans, see “ Item 4 – 4.B Business Overview — Our Strategies .” In addition, our future plans involve recruiting additional staff, renting and setting up a workshop with showroom, renting and renovating a premises to be used as training center and central monitoring room, purchasing vehicles and renting carparking spaces and purchasing security systems and equipment, the implementation of which will increase our costs and expenses.
In addition, our future plans involve recruiting additional staff, renting and setting up a workshop with showroom, renting and renovating a premises to be used as training center and central monitoring room, purchasing vehicles and renting carparking spaces and purchasing security systems and equipment, the implementation of which will increase our costs and expenses.
Any actions by the PRC government to exert more oversight and control over overseas offerings (including divesture or similar actions) could limit or completely hinder our ability to offer or continue to offer securities to investors, resulting in a material adverse effect on us and on your investment in us and could render our ordinary shares and your investment in our ordinary shares to significantly decline or become worthless. 7 There are substantial uncertainties regarding the interpretation and application of PRC laws and regulations.
Any actions by the PRC government to exert more oversight and control over overseas offerings (including divesture or similar actions) could limit or completely hinder our ability to offer or continue to offer securities to investors, resulting in a material adverse effect on us and on your investment in us and could render our ordinary shares and your investment in our ordinary shares to significantly decline or become worthless.
Although the influence of the law has been increasing, China has not developed a fully integrated legal system and recently enacted laws and regulations may not sufficiently cover all aspects of economic activities in China.
There are substantial uncertainties regarding the interpretation and application of PRC laws and regulations. Although the influence of the law has been increasing, China has not developed a fully integrated legal system and recently enacted laws and regulations may not sufficiently cover all aspects of economic activities in China.
Chan Ming Dave, our Chairman of the board of directors and our Chief Executive Officer, beneficially owns approximately 9,016,800 ordinary shares, or approximately 68.1 % of our outstanding ordinary shares. 29 Accordingly, Mr.
Chan Ming Dave, our Chairman of the board of directors and our Chief Executive Officer, beneficially owns approximately 9,116,800 ordinary shares, or approximately 65.8% of our outstanding ordinary shares. Accordingly, Mr.
See “ Item 3 – 3.D Risk Factors — Our business, financial condition and results of operations, and/or the value of our ordinary shares or our ability to continue to offer securities to investors may be materially and adversely affected by existing or future laws and regulations of the PRC which may become applicable to a company such as us .” The PRC legal system is evolving rapidly and the PRC laws, regulations, and policies may change quickly with little advance notice.
Risk Factors — Risks Related to Conducting Operations in Hong Kong — Our business, financial condition and results of operations, and/or the value of our ordinary shares or our ability to continue to offer securities to investors may be materially and adversely affected to the extent the laws and regulations of the PRC which may become applicable to a company such as us.” 8 The PRC legal system is evolving rapidly and the PRC laws, regulations, and policies may change quickly with little advance notice.
Furthermore, on June 22, 2021, the U.S. Senate passed the AHFCAA, which, if enacted, would amend the HFCAA and require the SEC to prohibit an issuer’s securities from trading on any U.S. stock exchanges if its auditor is not subject to PCAOB inspections for two consecutive years instead of three.
Senate passed the Accelerating Holding Foreign Companies Accountable Act, or the AHFCAA, which, if enacted, would amend the HFCA Act and require the SEC to prohibit an issuer’s securities from trading on any U.S. stock exchanges if its auditor is not subject to PCAOB inspections for two consecutive years instead of three.
Any audit reports not issued by auditors that are completely inspected by the PCAOB, or a lack of PCAOB inspections of audit work undertaken in mainland China or Hong Kong that prevents the PCAOB from regularly evaluating our auditors’ audits and their quality control procedures, could result in a lack of assurance that our financial statements and disclosures are adequate and accurate. 11 The SEC may propose additional rules or guidance that could impact us if our auditor is not subject to PCAOB inspection.
Any audit reports not issued by auditors that are completely inspected by the PCAOB, or a lack of PCAOB inspections of audit work undertaken in mainland China or Hong Kong that prevents the PCAOB from regularly evaluating our auditors’ audits and their quality control procedures, could result in a lack of assurance that our financial statements and disclosures are adequate and accurate.
The amount of total costs we incur on a project is affected by a variety of factors, including fluctuations in the price of parts and components, variations in labor and security systems costs over the term of a contract, changes in project scope or conditions, delay in or extension of construction period, disagreements on contract terms or works between the customers and the main contractors, adverse weather conditions, labor disputes, accidents and other unforeseen circumstances.
In addition, any delay caused by the variation works may adversely impact the timely scheduling of other project work and our ability to meet specified contract stages. 18 The amount of total costs we incur on a project is affected by a variety of factors, including fluctuations in the price of parts and components, variations in labor and security systems costs over the term of a contract, changes in project scope or conditions, delay in or extension of construction period, disagreements on contract terms or works between the customers and the main contractors, adverse weather conditions, labor disputes, accidents and other unforeseen circumstances.
Our funds are held in accounts at banks or other financial institutions. As of September 30, 2022 and 2023, HK$25.2 million and HK$16.4 million of the Group’s cash was on deposit at financial institutions in Hong Kong, respectively. In accordance with the relevant regulations in Hong Kong, the maximum insured bank deposit amount is HK$500,000 for each financial institution.
As of September 30, 2022, 2023 and 2024, HK$25.2 million, HK$16.4 million, and HK$52.3 million (US$6.7 million) of the Group’s cash was on deposit at financial institutions in Hong Kong, respectively. In accordance with the relevant regulations in Hong Kong, the maximum insured bank deposit amount is HK$500,000 for each financial institution.
Complying with emerging and changing international requirements may cause us to incur substantial costs or require us to change our business practices. 9 Our Hong Kong subsidiaries may be subject to restrictions on paying dividends or making other payments to us, which may restrict their ability to satisfy liquidity requirements, fund operations or for other use outside of Hong Kong, conduct business and pay dividends to holders of our ordinary shares.
Our Hong Kong subsidiaries may be subject to restrictions on paying dividends or making other payments to us, which may restrict their ability to satisfy liquidity requirements, fund operations or for other use outside of Hong Kong, conduct business and pay dividends to holders of our ordinary shares.
While detailed interpretation of or implementing rules under Article 177 have yet to be promulgated, the inability for an overseas securities regulator to directly conduct investigation or evidence collection activities within China may further increase difficulties faced by you in protecting your interests. 13 The market price for our ordinary shares could be adversely affected by increased tensions between the United States and China.
While detailed interpretation of or implementing rules under Article 177 have yet to be promulgated, the inability for an overseas securities regulator to directly conduct investigation or evidence collection activities within China may further increase difficulties faced by you in protecting your interests.
In particular, because these laws, rules and regulations are relatively new, and because of the limited number of published decisions and the non-precedential nature of these decisions, the interpretation and enforcement of these laws, rules and regulations may involve uncertainties. 6 If we were to become subject to the direct influence and discretion of the PRC government at any time due to changes in laws or other unforeseeable reasons or as a result of our development, expansion or acquisition of operations in mainland China, it may require material changes in our operations and/or result in increased costs necessary to comply with existing and newly adopted laws and regulations or penalties for any failure to comply.
If we were to become subject to the direct influence and discretion of the PRC government at any time due to changes in laws or other unforeseeable reasons or as a result of our development, expansion or acquisition of operations in mainland China, it may require material changes in our operations and/or result in increased costs necessary to comply with existing and newly adopted laws and regulations or penalties for any failure to comply.
If we fail to do so or our customers no longer perceive our services to be of high quality, our brand and reputation could be adversely affected, which will in turn materially and adversely affect our business, financial condition and results of operations.
If we fail to do so or our customers no longer perceive our services to be of high quality, our brand and reputation could be adversely affected, which will in turn materially and adversely affect our business, financial condition and results of operations. 23 As of September 30, 2024, we had three registered trademarks in Hong Kong, which we consider material to our business.
Since these statements and regulatory actions are new, it is highly uncertain how soon legislative or administrative regulation making bodies will respond and what existing or new laws or regulations or detailed implementations and interpretations will be modified or promulgated, if any, and the potential impact such modified or new laws and regulations will have on our daily business operation, the ability to accept foreign investments, or the ability to list our ordinary shares on a U.S. or other foreign exchange.
Since these statements and regulatory actions are new, it is highly uncertain how soon legislative or administrative regulation making bodies will respond and what existing or new laws or regulations or detailed implementations and interpretations will be modified or promulgated, if any, and the potential impact such modified or new laws and regulations will have on our daily business operation, the ability to accept foreign investments, or the ability to list our ordinary shares on a U.S. or other foreign exchange. 9 Substantial uncertainties and restrictions with respect to the political and economic policies of the PRC government, as well as PRC laws and regulations, could have a significant impact on the business that we conduct in Hong Kong.
Any such restrictions and limitations may adversely affect our ability to finance our cash requirements, service debt or make dividends or other distributions to our shareholders and could result in a material adverse change to our business operations, our prospects, financial condition, and results of operations, and could cause our ordinary shares to significantly decline in value or become worthless.
Any such restrictions and limitations may adversely affect our ability to finance our cash requirements, service debt or make dividends or other distributions to our shareholders and could result in a material adverse change to our business operations, our prospects, financial condition, and results of operations, and could cause our ordinary shares to significantly decline in value or become worthless. 12 Our business, financial condition and results of operations, and/or the value of our ordinary shares or our ability to continue to offer securities to investors may be materially and adversely affected to the extent the laws and regulations of the PRC become applicable to a company such as us.
The implications of this possible regulation in addition to the requirements of the HFCAA are uncertain. Such uncertainty could cause the market price of our ordinary shares to be materially and adversely affected, and our ordinary shares could be delisted and prohibited from being traded on the national securities exchange earlier than would be required by the HFCAA.
Such uncertainty could cause the market price of our ordinary shares to be materially and adversely affected, and our ordinary shares could be delisted and prohibited from being traded on the national securities exchange earlier than would be required by the HFCA Act.
Risks Related to the Ownership of Our Ordinary Shares ● The trading price of our ordinary shares may be volatile, which could result in substantial losses to investors. ● An active trading market for our ordinary shares or our ordinary shares may not continue and the trading price for our ordinary shares may fluctuate significantly. 5 ● As a “controlled company” under the rules of Nasdaq, we may choose to exempt our company from certain corporate governance requirements that could have an adverse effect on our public shareholders. ● Our directors and officers currently collectively own an aggregate of 72.9% of the total voting power of our outstanding ordinary shares. ● Because we do not expect to pay dividends in the foreseeable future, you must rely on price appreciation of our ordinary shares for return on your investment.
Risks Related to the Ownership of Our Ordinary Shares ● The trading price of our ordinary shares may be volatile, which could result in substantial losses to investors. ● An active trading market for our ordinary shares or our ordinary shares may not continue and the trading price for our ordinary shares may fluctuate significantly. ● As a “controlled company” under the rules of Nasdaq, we may choose to exempt our company from certain corporate governance requirements that could have an adverse effect on our public shareholders. 7 ● Our directors and officers currently collectively own an aggregate of 71.2% of the total voting power of our outstanding ordinary shares. ● As an exempted company incorporated in the Cayman Islands, we are permitted to adopt certain home country practices for corporate governance matters that differ significantly from the Nasdaq Stock Market corporate governance listing standards; these practices may afford less protection to shareholders than they would enjoy if we complied fully with the corporate governance listing standards. ● Because we do not expect to pay dividends in the foreseeable future, you must rely on price appreciation of our ordinary shares for return on your investment.

… 176 more changes not shown on this page.

Item 4. Mine Safety Disclosures

Mine Safety Disclosures — required of mining issuers

117 edited+25 added−118 removed243 unchanged
Biggest changeLand Use Right We Own As of the date of this annual report, through our subsidiary Shine Union, we own a land use right of a property located at Unit 10, 11/F, Century Centre, 44-46 Hung To Road, Kwun Tong, Kowloon, Hong Kong. 61 Properties We Lease Property/Land User Properties Primary Usage Area (square feet) Term of Lease Shine Union Unit 05, 3/F, Billion Trade Centre, 31 Hung To Road, Kwun Tong, Kowloon, Hong Kong Workshop 800 Apr 1, 2023 to Mar 31, 2024 Unit 11, 11/F, Century Centre, 44-46 Hung To Road, Kwun Tong, Kowloon, Hong Kong Warehouse 1,541 Apr 1, 2023 to Mar 31, 2024 Unit 01-03, 3/F, Billion Trade Centre, 31 Hung To Road, Kwun Tong, Kowloon, Hong Kong Office and workshop 2,501 Apr 1, 2023 to Mar 31, 2024 Unit H, 7/F, Houston Industrial Building, 32-40 Wang Lung Street, Tsuen Wan, New Territories, Hong Kong Workshop 931 Mar 15, 2023 to Mar 14, 2025 Fortune Jet 17/F, Wing Wong Commercial Building, 557-559 Nathan Road, Yau Ma Tei, Kowloon, Hong Kong Training center 1,750 Nov 16, 2023 to Nov 15, 2025 18/F, Wing Wong Commercial Building, 557-559 Nathan Road, Yau Ma Tei, Kowloon, Hong Kong Office 1,750 Dec 16, 2023 to Dec 15, 2025 Car Park No.730, Charming Garden, 16 Hoi Ting Road, Tai Kok Tsui, Kowloon, Hong Kong Carparking space 130 Dec 22, 2022 to Dec 21, 2024 ITEM 4A.
Biggest changeProperties We Lease Property/Land User Properties Primary Usage Area (square feet) Term of Lease Shine Union Unit 05, 3/F, Billion Trade Centre, 31 Hung To Road, Kwun Tong, Kowloon, Hong Kong Workshop 800 Apr 1, 2024 to Mar 31, 2025 Unit 11, 11/F, Century Centre, 44-46 Hung To Road, Kwun Tong, Kowloon, Hong Kong Warehouse 1,541 Apr 1, 2024 to Mar 31, 2025 7th Floor, The Rays, No. 71 Hung To Road, Kwun Tong, Kowloon, Hong Kong Office 7,285 Jun 17, 2024 to Jun 16, 2027 Fortune Jet 17/F, Wing Wong Commercial Building, 557-559 Nathan Road, Yau Ma Tei, Kowloon, Hong Kong Training center 1,750 Nov 16, 2023 to Nov 15, 2025 18/F, Wing Wong Commercial Building, 557-559 Nathan Road, Yau Ma Tei, Kowloon, Hong Kong Office 1,750 Dec 16, 2023 to Dec 15, 2025
Defects liability period. Our contracts typically include a defects liability period, during which we are responsible for rectifying the works defects. The defects liability period is typically a period of one year from the date of completion of our installation works for security systems.
Our contracts typically include a defects liability period, during which we are responsible for rectifying the works defects. The defects liability period is typically a period of one year from the date of completion of our installation works for security systems.
Shine Union is one of the providers in the Hong Kong security-related engineering services market authorized to distribute over 10 brands of security systems.
Shine Union is one of the providers in the security-related engineering services market in Hong Kong authorized to distribute over 10 brands of security systems.
They would then decide whether to engage Shine Union based on the quotations and tenders submitted. ● Mobilization, project planning, procurement, and subcontracting Once a contract has been awarded to Shine Union, a project management team will be formed, usually comprising a team of three to five personnel, including engineers/technicians led by a project manager depending on the complexity of the project, to review the contract terms and conditions, to identify and assess material project risks and cost control risks and to prepare a budget and work execution plan setting out the detailed forecast expenditures, delivery schedules and work schedules.
They would then decide whether to engage Shine Union based on the quotations and tenders submitted. 47 ● Mobilization, project planning, procurement, and subcontracting Once a contract has been awarded to Shine Union, a project management team will be formed, usually comprising a team of three to five personnel, including engineers/technicians led by a project manager depending on the complexity of the project, to review the contract terms and conditions, to identify and assess material project risks and cost control risks and to prepare a budget and work execution plan setting out the detailed forecast expenditures, delivery schedules and work schedules.
Registration of our company As of the date of this annual report, Shine Union was registered as a specialist contractor or a subcontractor under the following trades: ● as a specialist contractor under the “List of Approved Suppliers of Materials and Specialist Contractors for Public Works”: ● burglar alarm and security installation; and ● video electronics installation. 56 ● as a subcontractor under the Register of Subcontractors: ● shutters/doors fabrication and installation (automatic sliding door); ● electrical (electrical wiring, general electrical installation, and electrical control and power panel assembly); ● other electrical and mechanical trades (security and communication system, building automation system, general mechanical fitting and signage); and ● audio and video electronic equipment.
Registration of our company As of the date of this annual report, Shine Union was registered as a specialist contractor or a subcontractor under the following trades: ● as a specialist contractor under the “List of Approved Suppliers of Materials and Specialist Contractors for Public Works”: ● burglar alarm and security installation; and ● video electronics installation. ● as a subcontractor under the Register of Subcontractors: ● shutters/doors fabrication and installation (automatic sliding door); ● electrical (electrical wiring, general electrical installation, and electrical control and power panel assembly); ● other electrical and mechanical trades (security and communication system, building automation system, general mechanical fitting and signage); and ● audio and video electronic equipment.
Fortune Jet may act as a contractor or a subcontractor in the provision of security guarding services, whereas Fortune Jet generally acts as a direct service provider in the provision of screening services and related vocational training services. ● Security guarding services Fortune Jet secures and guards both individuals and physical properties by, among other things, conducting patrols, entrance guarding, access control and alarm monitoring and response such as fire and gas detection, burglary detection and emergency management such as first aid service and communication and evacuation through dispatched employees.
Fortune Jet may act as a contractor or a subcontractor in the provision of security guarding services, whereas Fortune Jet generally acts as a direct service provider in the provision of screening services and related vocational training services. 45 ● Security guarding services Fortune Jet secures and guards both individuals and physical properties by, among other things, conducting patrols, entrance guarding, access control and alarm monitoring and response such as fire and gas detection, burglary detection and emergency management such as first aid service and communication and evacuation through dispatched employees.
During the fiscal years ended September 30, 2022 and 2023, there had been no material incident where security systems and parts were returned to our suppliers due to quality deficiencies. ● Project execution We keep track of the work progress for our projects to ensure that our projects are carried out on schedule in accordance with our respective project execution plans and within our budgeted costs, and to better manage any foreseeable cost overruns in our projects.
During the fiscal years ended September 30, 2022, 2023 and 2024, there had been no material incident where security systems and parts were returned to our suppliers due to quality deficiencies. ● Project execution We keep track of the work progress for our projects to ensure that our projects are carried out on schedule in accordance with our respective project execution plans and within our budgeted costs, and to better manage any foreseeable cost overruns in our projects.
During the fiscal years ended September 30, 2022 and 2023, we did not receive any material complaints and were not subject to any disciplinary actions imposed by any government authorities in respect of the quality of the security guarding and screening services that we provided which could have resulted in any material adverse impact on our operations or financial condition and no material compensation or penalty was paid to resolve any complaints.
During the fiscal years ended September 30, 2022, 2023 and 2024, we did not receive any material complaints and were not subject to any disciplinary actions imposed by any government authorities in respect of the quality of the security guarding and screening services that we provided which could have resulted in any material adverse impact on our operations or financial condition and no material compensation or penalty was paid to resolve any complaints.
Fortune Jet’s customers are generally RACSF operators who are logistics companies. 37 ● Related vocational training services Fortune Jet offers various types of related vocational training courses, including (i) Certificate in Basic Security Services under QASRS, upon completion of which students are expected to receive Certificate of Quality Assurance System Compliance, (ii) Mandatory Basic Safety Training Course, upon completion of which students are expected to receive Construction Industry Safety Training Certificate, and (iii) Mandatory Basic Safety Training Revalidation Course, upon completion of which students are expected to successfully renew their certifications.
Fortune Jet’s customers are generally RACSF operators who are logistics companies. ● Related vocational training services Fortune Jet offers various types of related vocational training courses, including (i) Certificate in Basic Security Services under QASRS, upon completion of which students are expected to receive Certificate of Quality Assurance System Compliance, (ii) Mandatory Basic Safety Training Course, upon completion of which students are expected to receive Construction Industry Safety Training Certificate, and (iii) Mandatory Basic Safety Training Revalidation Course, upon completion of which students are expected to successfully renew their certifications.
Upon completion of each project, our project-in-charge also conducts a final handover inspection and testing and commissioning to confirm that our work has been completed in accordance with our customer’s requirements and quality standards, as well as the relevant statutory and regulatory requirements. ● Customer feedback We receive feedback from our customers by reaching out to them on a regular basis, or by providing them with a questionnaire upon completion of a project.
Upon completion of each project, our project-in-charge also conducts a final handover inspection and testing and commissioning to confirm that our work has been completed in accordance with our customer’s requirements and quality standards, as well as the relevant statutory and regulatory requirements. 57 ● Customer feedback We receive feedback from our customers by reaching out to them on a regular basis, or by providing them with a questionnaire upon completion of a project.
This enables us to obviate the need for keeping a large number of workers under our permanent employment, thereby giving us the feasibility to deploy our resources more cost effectively without compromising our quality. During the fiscal years ended September 30, 2022 and 2023, we mainly subcontracted our installation works in relation to security-related engineering services.
This enables us to obviate the need for keeping a large number of workers under our permanent employment, thereby giving us the feasibility to deploy our resources more cost effectively without compromising our quality. During the fiscal years ended September 30, 2022, 2023 and 2024, we mainly subcontracted our installation works in relation to security-related engineering services.
During the fiscal years ended September 30, 2022 and 2023, and to the date of this annual report, (i) we have obtained all material licenses, qualifications and registrations necessary for the operation of our business in the jurisdictions in which we operate and such licenses are still valid and in force; and (ii) we have not experienced any refusal of the renewal application of any material licenses necessary for the operation of our business.
During the fiscal years ended September 30, 2022, 2023 and 2024, and to the date of this annual report, (i) we have obtained all material licenses, qualifications and registrations necessary for the operation of our business in the jurisdictions in which we operate and such licenses are still valid and in force; and (ii) we have not experienced any refusal of the renewal application of any material licenses necessary for the operation of our business.
In addition to the related vocational training services, which are provided by trainers who are also our subcontractors, we also outsourced a part of our operation in security guarding services during the fiscal years ended September 30, 2022 and 2023. We have maintained business relationships with over 20 subcontractors who have undertaken engineering works with us.
In addition to the related vocational training services, which are provided by trainers who are also our subcontractors, we also outsourced a part of our operation in security guarding services during the fiscal years ended September 30, 2022, 2023 and 2024. We have maintained business relationships with over 20 subcontractors who have undertaken engineering works with us.
Chu Hon Wai transferred 1,000 shares of Fortune Jet, representing 10.0% of the issued share capital of Fortune Jet, to SU Investment. Upon the completion of such transfer, Fortune Jet became an indirect wholly-owned subsidiary of our company. On June 20, 2023, SU Group issued an aggregate of 11,990,000 ordinary shares to its existing shareholders.
Chu Hon Wai transferred 1,000 shares of Fortune Jet, representing 10.0% of the issued share capital of Fortune Jet, to SU Investment. Upon the completion of such transfer, Fortune Jet became an indirect wholly-owned subsidiary of our company. 40 On June 20, 2023, SU Group issued an aggregate of 11,990,000 ordinary shares to its existing shareholders.
A typical quotation takes approximately 1 to 14 days from quotation to entering into a contract, while a typical tender process takes approximately four weeks from the receipt of tender invitation to the announcement of the tender result. 41 ● Dispatch of security guards and screeners to our customers’ sites Once we have secured a contract, we will allocate our resources based on the availability of our qualified staff.
A typical quotation takes approximately 1 to 14 days from quotation to entering into a contract, while a typical tender process takes approximately four weeks from the receipt of tender invitation to the announcement of the tender result. ● Dispatch of security guards and screeners to our customers’ sites Once we have secured a contract, we will allocate our resources based on the availability of our qualified staff.
During the fiscal years ended September 30, 2022 and 2023, we did not experience any material shortage or delay of our major equipment, parts or components causing material disruption to our business operation. We select suppliers for inclusion into our internal approved lists of suppliers based on the quality and price of their supplies.
During the fiscal years ended September 30, 2022, 2023 and 2024, we did not experience any material shortage or delay of our major equipment, parts or components causing material disruption to our business operation. We select suppliers for inclusion into our internal approved lists of suppliers based on the quality and price of their supplies.
Individuals providing security services and companies offering security services are regulated under a permit and license system. As such, we face potential competition with various industry providers in the same industry. The competition in related vocational training is fierce, while some market participants could increase their market share by providing more training courses.
Individuals providing security services and companies offering security services are regulated under a permit and license system. 60 As such, we face potential competition with various industry providers in the same industry. The competition in related vocational training is fierce, while some market participants could increase their market share by providing more training courses.
We usually need to settle the balance of the purchase amount in accordance with the relevant contracts, with the credit period granted generally ranging between zero and 60 days. ● Product return . Upon arrival of the products at our warehouse, we will examine them and report to the relevant supplier if defects are found.
We usually need to settle the balance of the purchase amount in accordance with the relevant contracts, with the credit period granted generally ranging between zero and 60 days. 52 ● Product return . Upon arrival of the products at our warehouse, we will examine them and report to the relevant supplier if defects are found.
During the fiscal years ended September 30, 2022 and 2023, there was no material contract terminated for such reasons. Maintenance Service Scope. Our maintenance services include all costs of labor, tools and consumables (such as service grease and oil) and transportation. Costs for parts replacement may be charged separately. Frequency of service.
During the fiscal years ended September 30, 2022, 2023 and 2024, there was no material contract terminated for such reasons. Maintenance Service Scope. Our maintenance services include all costs of labor, tools and consumables (such as service grease and oil) and transportation. Costs for parts replacement may be charged separately. Frequency of service.
If the security systems are defective, we will replace the defective parts during the defects liability period or request our suppliers or subcontractors to do so. Costs incurred by us to rectify defective works or products during the fiscal years ended September 30, 2022 and 2023 were immaterial. Variation orders.
If the security systems are defective, we will replace the defective parts during the defects liability period or request our suppliers or subcontractors to do so. Costs incurred by us to rectify defective works or products during the fiscal years ended September 30, 2022, 2023 and 2024 were immaterial. Variation orders.
Public works tenders are usually invited from contractors on the two approved lists. 55 For admission and retention on the “List of Approved Suppliers of Materials and Specialist Contractors for Public Works” and for the award of public works contracts, a contractor is required to meet the financial, technical, management and personal criteria applicable to the appropriate category and group.
Public works tenders are usually invited from contractors on the two approved lists. For admission and retention on the “List of Approved Suppliers of Materials and Specialist Contractors for Public Works” and for the award of public works contracts, a contractor is required to meet the financial, technical, management and personal criteria applicable to the appropriate category and group.
Therefore, additional manpower shall be deployed and overtime service charges shall be applied if service hours exceed eight hours. In such circumstance, a minimum charge of four hours per screener applies. The customer shall notify us at least two working days in advance for such arrangement. Service scope.
Therefore, additional manpower shall be deployed and overtime service charges shall be applied if service hours exceed eight hours. In such circumstance, a minimum charge of four hours per screener applies. The customer shall notify us at least two working days in advance for such arrangement. 56 Service scope.
Generally, we offer a credit period ranging from zero to 90 days after the issuance of the invoice. 44 Retention money. Depending on the scale of the projects, the contracts may contain a term for the customers to require retention money be held back by them from the progress payments.
Generally, we offer a credit period ranging from zero to 90 days after the issuance of the invoice. Retention money. Depending on the scale of the projects, the contracts may contain a term for the customers to require retention money be held back by them from the progress payments.
In general, Shine Union will impose a back-to-back defects liability period to its subcontractors to ensure its liability is sufficiently covered under the defects liability period. 40 ● Maintenance The following sets out the operational workflow of Shine Union’s maintenance business originated from standalone maintenance contracts: ● Service and maintenance department receives confirmed orders In respect of maintenance works performed for security systems supplied and installed by Shine Union but falling outside of or without a defects liability period, Shine Union’s maintenance work orders originate from existing customers for which Shine Union has provided other security-related engineering services, such as design, supply, installation and/or maintenance services during the defects liability period.
In general, Shine Union will impose a back-to-back defects liability period to its subcontractors to ensure its liability is sufficiently covered under the defects liability period. 49 ● Maintenance The following sets out the operational workflow of Shine Union’s maintenance business originated from standalone maintenance contracts: ● Service and maintenance department receives confirmed orders In respect of maintenance works performed for security systems supplied and installed by Shine Union but falling outside of or without a defects liability period, Shine Union’s maintenance work orders originate from existing customers for which Shine Union has provided other security-related engineering services, such as design, supply, installation and/or maintenance services during the defects liability period.
Based on the confirmations of our Directors and our company, our Hong Kong counsel, Watson Farley & Williams LLP, is of the view that each of our current Security Company License (Type I) and Security Company License (Type III) remain valid as of the date of this annual report.
Based solely on the confirmations of our Directors and our company, our Hong Kong counsel, Watson Farley & Williams LLP, is of the view that each of our current Security Company License (Type I) and Security Company License (Type III) remain valid as of the date of this annual report.
An employer who fails to do so intentionally, knowingly or recklessly commits an offence and is liable on conviction to a fine of HK$200,000 and to imprisonment for 6 months. 59 The Commissioner for Labor may also serve (i) an improvement notice against any noncompliance of the Occupational Safety and Health Ordinance or the Factories and Industrial Undertakings Ordinance; and/or (ii) a suspension notice against any activity undertaken at workplace, or condition or use of workplace or of any plant or substance located at workplace which may create imminent risk of death or serious bodily injury.
An employer who fails to do so intentionally, knowingly or recklessly commits an offence and is liable on conviction to a fine of HK$200,000 and to imprisonment for 6 months. 70 The Commissioner for Labor may also serve (i) an improvement notice against any noncompliance of the Occupational Safety and Health Ordinance or the Factories and Industrial Undertakings Ordinance; and/or (ii) a suspension notice against any activity undertaken at workplace, or condition or use of workplace or of any plant or substance located at workplace which may create imminent risk of death or serious bodily injury.
ITEM 4. INFORMATION ON THE COMPANY 4A. History and Development of the Company We are a Cayman Islands exempted company structured as a holding company and conduct our operations in Hong Kong through our subsidiaries, Shine Union and Fortune Jet.
ITEM 4. INFORMATION ON THE COMPANY 4.A. History and Development of the Company We are a Cayman Islands exempted company structured as a holding company and conduct our operations in Hong Kong through our subsidiaries, Shine Union and Fortune Jet.
In addition, related market information, such as material price trends, is also retrieved for reference. 38 Shine Union also considers the manageability and profitability of such projects with reference to its resources, capacity, and capability.
In addition, related market information, such as material price trends, is also retrieved for reference. Shine Union also considers the manageability and profitability of such projects with reference to its resources, capacity, and capability.
Our Business Model Through Shine Union and Fortune Jet, our principal businesses include providing (i) security-related engineering services which involves the design, supply, installation, and/or maintenance of security systems in Hong Kong; and (ii) security guarding and screening services and related vocational training services in Hong Kong. 34 The diagrams below illustrate the business models of our principal business operations: Security-related engineering services Note: Depending on the availability of resources, intensiveness of labor and cost effectiveness, we may subcontract some security-related engineering works to selected subcontractors.
Our Business Model Through Shine Union and Fortune Jet, our principal businesses include providing (i) security-related engineering services which involves the design, supply, installation, and/or maintenance of security systems in Hong Kong; and (ii) security guarding and screening services and related vocational training services in Hong Kong. 42 The diagrams below illustrate the business models of our principal business operations: Security-related engineering services Note: Depending on the availability of resources, intensiveness of labor and cost effectiveness, we may subcontract some security-related engineering works to selected subcontractors.
Based on the confirmation of our directors, our Hong Kong counsel, Watson Farley & Williams LLP, is of the view that the relevant Security Personnel Permits remained valid as of the date of this annual report.
Based solely on the confirmation of our directors, our Hong Kong counsel, Watson Farley& Williams LLP, is of the view that the relevant Security Personnel Permits remained valid as of the date of this annual report.
For the security of air cargo to be in line with Annex 17 to the CICA, the Hong Kong Aviation Security Program, which is enforceable under the Aviation Security Ordinance, has adopted the regulated agent regime since March 2000. 54 In September 2016, the ICAO introduced a new policy direction that consignors not subject to approval by the authority for aviation security should be phased out by June 30, 2021.
For the security of air cargo to be in line with Annex 17 to the CICA, the Hong Kong Aviation Security Program, which is enforceable under the Aviation Security Ordinance, has adopted the regulated agent regime since March 2000. 64 In September 2016, the ICAO introduced a new policy direction that consignors not subject to approval by the authority for aviation security should be phased out by June 30, 2021.
For further information on the material licenses and permits necessary for the operation of our business, see “ Regulations .” The following table summarizes all requisite licenses, permissions or approvals needed for our current operations in Hong Kong: Company License/ Qualifications/ Registrations Issuing Authority Validity Shine Union Security Company License (Type III) Security and Guarding Services Industry Authority December 30, 2020 to December 29, 2025 Radioactive Substances License Radiation Board February 9, 2023 to February 25, 2024 Radio Dealers License (Unrestricted) Communications Authority February 1, 2023 to January 31, 2024 Irradiating Apparatus License Radiation Board October 13, 2023 to November 1, 2024 Certificate of Registration of Electrical Contractor Electrical and Mechanical Services Department July 11, 2023 to July 14, 2026 Registered Subcontractor Construction Industry Council March 31, 2019 to March 30, 2024 Endorsement of Removal Service Plan Environmental Protection Department August 13, 2018 (no expiry date) Certificate of Registration as a Registered Supplier Environmental Protection Department August 14, 2018 (no expiry date) Type Approval Certificate (Smart Park) Octopus Cards Limited May 4, 2022 to May 4, 2025 Type Approval Certificate (Self-Service Kiosk) Octopus Cards Limited May 4, 2022 to May 4, 2025 Type Approval Certificate (Access Control System) Octopus Cards Limited August 3, 2023 to August 3, 2026 Property Management Company License Property Management Services Authority November 7, 2022 to November 6, 2025 Fortune Jet Security Company License (Type I) Security and Guarding Services Industry Authority September 18, 2020 to September 17, 2025 Statement of Accreditation Approval for Certificate in Basic Security Services under QASRS (QF Level 1) The Hong Kong Council for Accreditation of Academic and Vocational Qualifications November 23, 2022 to November 22, 2024 Property Management Company License Property Management Services Authority November 18, 2022 to November 17, 2025 50 As of the date of this annual report, we are on the lists of approved suppliers and/or contractors of more than 13 Hong Kong government departments.
For further information on the material licenses and permits necessary for the operation of our business, see “— Regulations.” 59 The following table summarizes all requisite licenses, permissions or approvals needed for our current operations in Hong Kong: Company License/ Qualifications/ Registrations Issuing Authority Validity Shine Union Security Company License (Type III) Security and Guarding Services Industry Authority December 30, 2020 to December 29, 2025 Radioactive Substances License Radiation Board January 26, 2024 to February 25, 2025 Radio Dealers License (Unrestricted) Communications Authority February 1, 2024 to January 31, 2025 Irradiating Apparatus License Radiation Board October 25, 2024 to November 1, 2025 Certificate of Registration of Electrical Contractor Electrical and Mechanical Services Department July 11, 2023 to July 14, 2026 Registered Subcontractor Construction Industry Council March 31, 2024 to March 30, 2027 Endorsement of Removal Service Plan Environmental Protection Department August 13, 2018 (no expiry date) Certificate of Registration as a Registered Supplier Environmental Protection Department August 14, 2018 (no expiry date) Type Approval Certificate (Smart Park) Octopus Cards Limited May 4, 2022 to May 4, 2025 Type Approval Certificate (Self-Service Kiosk) Octopus Cards Limited May 4, 2022 to May 4, 2025 Type Approval Certificate (Access Control System) Octopus Cards Limited August 3, 2023 to August 3, 2026 Property Management Company License Property Management Services Authority November 7, 2022 to November 6, 2025 Fortune Jet Security Company License (Type I) Security and Guarding Services Industry Authority September 18, 2020 to September 17, 2025 Statement of Accreditation Approval for Certificate in Basic Security Services under QASRS (QF Level 1) The Hong Kong Council for Accreditation of Academic and Vocational Qualifications November 23, 2024 to November 22, 2027 Property Management Company License Property Management Services Authority November 18, 2022 to November 17, 2025 As of the date of this annual report, we are on the lists of approved suppliers and/or contractors of more than 13 Hong Kong government departments.
Shine Union may act as a contractor or a subcontractor in providing project-based services, whereas Shine Union generally acts as a direct service provider in the provision of maintenance services and leasing of security systems. 35 Security systems and equipment leasing Shine Union maintains a diversified portfolio of suppliers and sources its security systems mainly from Malaysia, Belgium and Hong Kong.
Shine Union may act as a contractor or a subcontractor in providing project-based services, whereas Shine Union generally acts as a direct service provider in the provision of maintenance services and leasing of security systems. 43 Security systems and equipment leasing Shine Union maintains a diversified portfolio of suppliers and sources its security systems mainly from Malaysia, Belgium and Hong Kong.
Our employees engaging in the design, installation and/or maintenance of security systems and/or provision of security guarding services have obtained the relevant Security Personnel Permits for performing Category A Security Work, Category B Security Work and Category D Security Work for the years ended September 30, 2022 and 2023 and as of the date of this annual report.
Our employees engaging in the design, installation and/or maintenance of security systems and/or provision of security guarding services have obtained the relevant Security Personnel Permits for performing Category A Security Work, Category B Security Work and Category D Security Work for the fiscal years ended September 30, 2022, 2023 and 2024, and as of the date of this annual report.
For details, please refer to “ Our Subcontractors .” Once the relevant order in relation to maintenance services is assigned, Shine Union’s sales and marketing team will confirm the service schedule with the customers. ● Maintenance staff are dispatched to customers’ premises Shine Union’s engineers and technicians are dispatched to its customers’ premises for maintenance services.
For details, please refer to “Our Subcontractors.” Once the relevant order in relation to maintenance services is assigned, Shine Union’s sales and marketing team will confirm the service schedule with the customers. ● Maintenance staff are dispatched to customers’ premises Shine Union’s engineers and technicians are dispatched to its customers’ premises for maintenance services.
For details, please refer to “ Our Suppliers — Major Contract Terms with Our Suppliers .” During the fiscal years ended September 30, 2022 and 2023, costs of such rectification were immaterial. The defects liability period is generally 12 to 18 months.
For details, please refer to “Our Suppliers — Major Contract Terms with Our Suppliers.” During the fiscal years ended September 30, 2022, 2023 and 2024, costs of such rectification were immaterial. The defects liability period is generally 12 to 18 months.
Period of service. The period of our maintenance service agreements ranges from one to three years. Payment terms. The customer shall make payment within 30 days from the date of invoice. 45 Equipment leasing Term. 2 to 3 years. Delivery of equipment and other complementary services.
Period of service. The period of our maintenance service agreements ranges from one to three years. Payment terms. The customer shall make payment within 30 days from the date of invoice. 55 Equipment leasing Term. 2 to 3 years. Delivery of equipment and other complementary services.
For the years ended September 30, 2022 and 2023, and as of the date of this annual report, Shine Union held the Irradiating Apparatus License (to sell and stow, to possess (for installation) or to possess and use certain irradiating apparatus) and the Radioactive Substance License (to convey and sell certain radioactive substances).
For the fiscal years ended September 30, 2022, 2023 and 2024, and as of the date of this annual report, Shine Union held the Irradiating Apparatus License (to sell and stow, to possess (for installation) or to possess and use certain irradiating apparatus) and the Radioactive Substance License (to convey and sell certain radioactive substances).
For the fiscal years ended September 30, 2022 and 2023, 81.9% and 68.6% of our revenues generated from security-related engineering services, respectively, was generated from quotations, whereas 18.1%, and 31.4% of our revenues generated from security-related engineering services, respectively, was generated from tendering. ● Preparation of quotation and tender submissions Shine Union’s sales and marketing department is responsible for the preparation of quotations, tender submissions, and the bidding process.
For the fiscal years ended September 30, 2022, 2023 and 2024, 81.9%, 68.6% and 58.1% of our revenues generated from security-related engineering services, respectively, was generated from quotations, whereas 18.1%, 31.4% and 41.9% of our revenues generated from security-related engineering services, respectively, was generated from tendering. ● Preparation of quotation and tender submissions Shine Union’s sales and marketing department is responsible for the preparation of quotations, tender submissions, and the bidding process.
In the fiscal years ended September 30, 2022 and 2023, 74.2% and 76.9% of our revenues from the provision of security guarding and screening services was contributed by recurring customers, respectively.
In the fiscal years ended September 30, 2022, 2023 and 2024, 74.2%, 76.9% and 88.2% of our revenues from the provision of security guarding and screening services was contributed by recurring customers, respectively.
Please see “ Our Subcontractors ” for further details. 39 ● Project implementation and supervision Shine Union’s project management team is responsible for implementation of the installation works and supervision of the works of its subcontractors (in cases where subcontractors are engaged).
Please see “— Our Subcontractors” for further details. ● Project implementation and supervision Shine Union’s project management team is responsible for implementation of the installation works and supervision of the works of its subcontractors (in cases where subcontractors are engaged).
We will be requested to prepare a list of documents, including letter of authorization, valid business registration certificate, valid employees’ compensation insurance policy, valid public liability insurance policy, updated employee list which should consist of the names of the engineers, technicians and security guards and the expiry dates of their corresponding Security Personnel Permits. 48 ● Customer evaluation and complaint handling system We consider customer feedback a valuable tool for improving our services.
We will be requested to prepare a list of documents, including letter of authorization, valid business registration certificate, valid employees’ compensation insurance policy, valid public liability insurance policy, updated employee list which should consist of the names of the security guards and the expiry dates of their corresponding Security Personnel Permits. 58 ● Customer evaluation and complaint handling system We consider customer feedback a valuable tool for improving our services.
A proprietor of an industrial undertaking who contravenes these duties commits an offence and is liable to a fine of HK$500,000. A proprietor who contravenes these duties willfully and without reasonable excuse commits an offence and is liable to a fine of HK$500,000 and to imprisonment for six months.
A proprietor who contravenes these duties willfully and without reasonable excuse commits an offence and is liable to a fine of HK$500,000 and to imprisonment for six months.
For details, please see “— Employees .” As work orders in the security guarding services industry are sometimes broken down into jobs with shorter time segments, maintaining a pool of part-time security guards is a common practice in the industry for flexible deployment of human resources.
Employees.” As work orders in the security guarding services industry are sometimes broken down into jobs with shorter time segments, maintaining a pool of part-time security guards is a common practice in the industry for flexible deployment of human resources.
For the years ended September 30, 2022 and 2023, and as of the date of this annual report, Shine Union was recognized as a registered electrical contractor.
For the fiscal years ended September 30, 2022, 2023 and 2024, and as of the date of this annual report, Shine Union was recognized as a registered electrical contractor.
We take into consideration the increase in costs of materials such as security systems and parts and transfer a portion of the actual or anticipated price increases to our customers when we prepare for quotations. As we source some of our supplies from oversees countries, we are subject to foreign currency risk. For details, see “ Item 3. 3.D.
We take into consideration the increase in costs of materials such as security systems and parts and transfer a portion of the actual or anticipated price increases to our customers when we prepare for quotations. As we source some of our supplies from oversees countries, we are subject to foreign currency risk. For details, see “Item 3.
According to Schedule 2 to the Security and Guarding Services (Licensing) Regulation (Chapter 460B of the Laws of Hong Kong), there are three types of security work in which a company holding a Security Company License may perform under Security Company License Regime: ● Type I — Provision of security guarding services; ● Type II — Provision of armored transportation services; and ● Type III — Installation, maintenance and/or repairing of a security device and/or designing (for any particular premises or place) a security system incorporating a security device. 52 Our Group is involved in the provision of Type I security work and Type III security work.
According to Schedule 2 to the Security and Guarding Services (Licensing) Regulation (Chapter 460B of the Laws of Hong Kong), there are three types of security work in which a company holding a Security Company License may perform under Security Company License Regime: ● Type I — Provision of security guarding services; ● Type II — Provision of armored transportation services; and ● Type III — Installation, maintenance and/or repairing of a security device and/or designing (for any particular premises or place) a security system incorporating a security device.
Risk Factors — Risks Related to Our Business and Industry — Fluctuations in foreign exchange rates may become material and adversely affect our business, financial condition and results of operations .” Our Subcontractors We generally subcontract labor works to selected subcontractors based on the labor-intensiveness of the works involved and the need for cost effectiveness.
Key Information — 3.D. Risk Factors — Risks Related to Our Business and Industry — Fluctuations in foreign exchange rates may become material and adversely affect our business, financial condition and results of operations.” Our Subcontractors We generally subcontract labor works to selected subcontractors based on the labor-intensiveness of the works involved and the need for cost effectiveness.
Our Contracts In the fiscal years ended September 30, 2022 and 2023, 80.9% and 81.1% of our revenues from the provision of security-related engineering services was contributed by recurring customers, respectively.
Our Contracts In the fiscal years ended September 30, 2022, 2023 and 2024, 80.9%, 81.1% and 61.8% of our revenues from the provision of security-related engineering services was contributed by recurring customers, respectively.
Under the RSTCS, an applicant for registration as a registered subcontractor is subject to entry requirements including: (a) proof of completion of at least one job within the last five years as a main contractor/subcontractor in the trades and specialties for which registration is applied; or, comparable experience acquired by the applicant or its proprietors, partners or directors within the last five years; (b) listings on one or more government registration schemes relevant to the trades and specialties for which registration is sought; or (c) the company’s proprietor, partner or director having been employed by a registered subcontractor for at least five years with experience in the trade/specialty applying for and having completed all the modules of the Project Management Training Series for Sub-contractors (or equivalent) conducted by the CIC; or the company’s proprietor, partner or director having registered as Registered Skilled Worker under the Construction Workers Registration Ordinance (Chapter 583 of the Laws of Hong Kong) for the relevant trade/specialty with experience of at least five years in the trade/specialty applying for and having completed the Senior Construction Workers Trade Management Course (or equivalent) conducted by the CIC.
Under the RSTCS, an applicant for registration as a registered subcontractor is subject to entry requirements including: (a) proof of completion of at least one job within the last five years as a main contractor/subcontractor in the trades and specialties for which registration is applied; or, comparable experience acquired by the applicant or its proprietors, partners or directors within the last five years; (b) listings on one or more government registration schemes relevant to the trades and specialties for which registration is sought; or (c) the company’s proprietor, partner or director having been employed by a registered subcontractor for at least five years with experience in the trade/specialty applying for and having completed all the modules of the Project Management Training Series for Sub-contractors (or equivalent) conducted by the CIC; or the company’s proprietor, partner or director having registered as Registered Skilled Worker under the Construction Workers Registration Ordinance (Chapter 583 of the Laws of Hong Kong) for the relevant trade/specialty with experience of at least five years in the trade/specialty applying for and having completed the Senior Construction Workers Trade Management Course (or equivalent) conducted by the CIC. 66 An approved registration shall be valid for three years or five years from the approval date.
Depending on the offence committed, the maximum penalties for the above offences under the Prevention of Bribery Ordinance range from fines of HK$100,000 to HK$500,000 and imprisonment for 1 year to 10 years. 4C.
Depending on the offence committed, the maximum penalties for the above offences under the Prevention of Bribery Ordinance range from fines of HK$100,000 to HK$500,000 and imprisonment for 1 year to 10 years. 4.C.
In addition, we maintain a logbook on our license holders to keep track of the expiration date of their respective licenses. ● External audit The Crime Prevention Bureau of the Hong Kong Police Force conducts inspection on our security-related engineering and security guarding businesses annually under the Security Company License regime.
In addition, we maintain a logbook on our license holders to keep track of the expiration date of their respective licenses. ● External audit The Crime Prevention Bureau of the Hong Kong Police Force conducts inspection on our businesses annually under the Security Company License regime.
We do not undertake hedging activities against the price of goods that we procure. During the fiscal years ended September 30, 2022 and 2023, we have not experienced any material adverse effect to our business or financial performance as a result of price fluctuations of supplies sourced by us.
We do not undertake hedging activities against the price of goods that we procure. During the fiscal years ended September 30, 2022, 2023 and 2024, we did not experience any material adverse effect to our business or financial performance as a result of price fluctuations of supplies sourced by us.
Property, Plants and Equipment We lease the properties for our principal executive office, which is located at Kwun Tong, Hong Kong with an aggregate area of approximately 2,500 square feet.
Property, Plants and Equipment We lease the properties for our principal executive office, which is located at Kwun Tong, Hong Kong with an aggregate area of approximately 7,300 square feet.
In the fiscal years ended September 30, 2022 and 2023, we have not incurred substantial liquidated damages or costs arising from the delay or non-completion of works which had or would materially and adversely affect our business operations and financial results. Termination.
In the fiscal years ended September 30, 2022, 2023 and 2024, we did not incur substantial liquidated damages or costs arising from the delay or non-completion of works which had or would materially and adversely affect our business operations and financial results. Termination.
Our principal competitors include KML Technology Group Limited and IWS Group Holdings Ltd. Environmental Matters Due to the nature of our business, our operational activities do not significantly generate industrial pollutants, and we did not incur material costs of compliance with applicable environmental protection rules and regulations during the fiscal years ended September 30, 2022 and 2023.
Our principal competitors include Manifest Marketing Limited and ECI Technology Holdings Ltd. Environmental Matters Due to the nature of our business, our operational activities do not significantly generate industrial pollutants, and we did not incur material costs of compliance with applicable environmental protection rules and regulations during the fiscal years ended September 30, 2022, 2023 and 2024.
Our Operational Flow Security-related Engineering Services ● Projects ● Project identification In relation to Shine Union’s security-related engineering projects, Shine Union identifies potential projects after undergoing direct negotiation and quotation process with its potential customers, or through tendering, which may be open tenders or sent to a selected group of prequalified contractors on the customer’s list of approved contractors, which is more common for public sector projects.
We plan to continue expanding our related vocational training services in the upcoming years. 46 Our Operational Flow Security-related Engineering Services ● Projects ● Project identification In relation to Shine Union’s security-related engineering projects, Shine Union identifies potential projects after undergoing direct negotiation and quotation process with its potential customers, or through tendering, which may be open tenders or sent to a selected group of prequalified contractors on the customer’s list of approved contractors, which is more common for public sector projects.
Organizational Structure For descriptions of our organizational structure, contractual arrangements, variable interest entity and subsidiaries as of the date of this annual report, please see “ Item 3. Key Information — Our Corporate Structure and Certain Financial Conditions .” 4D.
Organizational Structure For descriptions of our organizational structure, contractual arrangements, variable interest entity and subsidiaries as of the date of this annual report, please see “Item 3. Key Information — Our Corporate Structure and Certain Financial Conditions.” 4.D.
Under the Factories and Industrial Undertakings Ordinance, every proprietor of an industrial undertaking shall take care of the safety and health at work of all persons employed by it at an industrial undertaking by: ● providing and maintaining plant and work systems that are safe and without risks to health; ● making arrangement for ensuring safety and absence of risks to health in connection with the use, handling, storage and transport of articles and substances; ● providing all necessary information, instruction, training, and supervision for ensuring safety and health; ● providing and maintaining means of access to and egress from the workplace that are safe and without risks to health; and ● providing and maintaining a work environment that is safe and without risks to health.
Under the Factories and Industrial Undertakings Ordinance, every proprietor of an industrial undertaking shall take care of the safety and health at work of all persons employed by it at an industrial undertaking by: ● providing and maintaining plant and work systems that are safe and without risks to health; ● making arrangement for ensuring safety and absence of risks to health in connection with the use, handling, storage and transport of articles and substances; ● providing all necessary information, instruction, training, and supervision for ensuring safety and health; ● providing and maintaining means of access to and egress from the workplace that are safe and without risks to health; and ● providing and maintaining a work environment that is safe and without risks to health. 67 A proprietor of an industrial undertaking who contravenes these duties commits an offence and is liable to a fine of HK$500,000.
In relation to its screening business, Fortune Jet identified its contracts primarily through a direct negotiation and quotation process, and to the lesser extent, through a tendering process. ● Preparation of quotations and tender submissions After understanding customers’ instructions and requirements, Fortune Jet’s sales and marketing department will prepare the quotations or tender submissions with reference to its available resources and the expected manpower required for the job and take into account various factors, including expected profit margin, the location, the background of our customers, potential competitors for the contract, urgency of the intended timetable, prevailing market rates, complexity of the work or services, requirement on equipment and uniform, and any factors affecting the supply of human resources.
The availability of our financial resources may also affect Fortune Jet’s evaluation of the project and its strategy in tendering or providing quotation for such project. 50 In relation to its screening business, Fortune Jet identified its contracts through direct negotiation, quotation process, and tendering process. ● Preparation of quotations and tender submissions After understanding customers’ instructions and requirements, Fortune Jet’s sales and marketing department will prepare the quotations or tender submissions with reference to its available resources and the expected manpower required for the job and take into account various factors, including expected profit margin, the location, the background of our customers, potential competitors for the contract, urgency of the intended timetable, prevailing market rates, complexity of the work or services, requirement on equipment and uniform, and any factors affecting the supply of human resources.
During the fiscal years ended September 30, 2022 and 2023, and up to the date of this annual report, we have not recorded any material non-compliance in respect of any applicable laws and regulations on environmental protection in Hong Kong. Regulations Our business operations are primarily in Hong Kong and we are primarily subject to Hong Kong laws and regulations.
During the fiscal years ended September 30, 2022, 2023 and 2024, and up to the date of this annual report, we have not recorded any material non-compliance in respect of any applicable laws and regulations on environmental protection in Hong Kong.
Other than the largest supplier in the fiscal year ended September 30, 2022, there was no other supplier who accounted for more than 10% of our total purchases in the fiscal year ended September 30, 2022. For the fiscal year ended September 30, 2023, two suppliers represented 15.0% and 13.7% of the Group’s purchases. See “ Item 3. - 3.D.
For the fiscal year ended September 30, 2023, two suppliers represented 15.0% and 13.7% of the Group’s purchases. Other than the largest supplier we had in the fiscal year ended September 30, 2022, there was no other supplier who accounted for more than 10% of our total purchases in the fiscal year ended September 30, 2022.
An approved registration shall be valid for three years or five years from the approval date. A registered subcontractor shall apply for renewal within three months before the expiry date of its registration by submitting an application to the committee of the CIC in a specified format providing information with supporting documents.
A registered subcontractor shall apply for renewal within three months before the expiry date of its registration by submitting an application to the committee of the CIC in a specified format providing information with supporting documents. An application for renewal shall be subject to approval by the committee of the CIC.
During the fiscal years ended September 30, 2022 and 2023, and up to the date of this annual report, we have not received any material complaints about the quality of our products and services. 47 ● External audit The Crime Prevention Bureau of the Hong Kong Police Force conducts inspection on us annually.
During the fiscal years ended September 30, 2022, 2023 and 2024, and up to the date of this annual report, we have not received any material complaints about the quality of our products and services. ● External audit The Crime Prevention Bureau of the Hong Kong Police Force conducts inspection on our businesses annually under the Security Company License regime.
During the fiscal years ended September 30, 2022 and 2023, there had been no material nonperformance issues or disputes with our subcontractors and we had not experienced any material difficulty in securing services from subcontractors. Major Subcontracting Terms with Our Subcontractors The major subcontracting terms with our subcontractors are summarized as follows: ● Project information.
During the fiscal years ended September 30, 2022, 2023 and 2024, there were no material nonperformance issues or disputes with our subcontractors and we did not experience any material difficulty in securing services from subcontractors. 53 Major Subcontracting Terms with Our Subcontractors The major subcontracting terms with our subcontractors are summarized as follows: ● Project information.
Nevertheless, we recognize the importance of environmental protection and we strive to meet the expectation of the community for healthy standards of living and working environment. 51 We have implemented environmental protection measures in the course of providing our security related engineering services, security guarding and screening services and related vocational training services, and we have the following environmental protection measures in place: ● ensuring that we are in compliance with applicable regulations, customer requirements and industry best practices in the environmental aspect of our business operation; ● educating, training and motivating employees to carry out work tasks in an environmentally responsible manner; and ● effectively conserving the use of resources and minimizing waste generation and pollution.
We have implemented environmental protection measures in the course of providing our security related engineering services, security guarding and screening services and related vocational training services, and we have the following environmental protection measures in place: ● ensuring that we are in compliance with applicable regulations, customer requirements and industry best practices in the environmental aspect of our business operation; ● educating, training and motivating employees to carry out work tasks in an environmentally responsible manner; and ● effectively conserving the use of resources and minimizing waste generation and pollution.
Our net income increased by 18.8% from HK$8.3 million (US$1.1 million) in the fiscal year ended September 30, 2022 to HK$9.8 million (US$1.3 million) in the fiscal year ended September 30, 2023.
Our net income increased by 18.8% from HK$8.3 million in the fiscal year ended September 30, 2022 to HK$9.8 million in the fiscal year ended September 30, 2023, and further increased by 8.7% to HK$10.7 million (US$1.4 million) in the fiscal year ended September 30, 2024.
We had over 11,000 and over 11,100 students enrolled in related vocational training courses with revenue contributed in the fiscal years ended September 30, 2022 and 2023, respectively. Our Suppliers Our principal purchases are security systems, including threat detection systems, traffic and pedestrian control systems, and ELV systems. We mainly source our security systems from Malaysia, Belgium and Hong Kong.
We had over 11,000, over 11,100 and 10,000 students enrolled in related vocational training courses with revenue contributed in the fiscal years ended September 30, 2022, 2023 and 2024, respectively. 51 Our Suppliers Our principal purchases are security systems, including threat detection systems, traffic and pedestrian control systems, and ELV systems.
The retention money is typically approximately 5% of the total awarded contract sum. Either (i) half of the retention money is released to us upon completion of the project, with the remaining half released upon expiry of the defects liability period; or (ii) the whole sum of retention money is released after the end of the defects liability period.
Either (i) half of the retention money is released to us upon completion of the project, with the remaining half released upon expiry of the defects liability period; or (ii) the whole sum of retention money is released after the end of the defects liability period. 54 Defects liability period.
For the fiscal years ended September 30, 2022 and 2023, our project income from the supply of carpark systems under the proprietary brand “SUNGATE” amounted to HK$4.3 million and HK$3.5 million, respectively, representing 5.3% and 3.5% of our revenues generated from security-related engineering services. The “SUNGATE” carpark systems are designed and developed pursuant to customers’ requests.
For the fiscal years ended September 30, 2022, 2023 and 2024, our project income from the supply of carpark systems under the proprietary brand “SUNGATE” amounted to HK$4.3 million, HK$3.5 million and HK$4.6 million (US$0.6 million), respectively, representing 5.3%, 3.5% and 4.3% of our revenues generated from security-related engineering services.
We also own a land use right of a property for use as a workshop in Hong Kong with an aggregate area of approximately 1,400 square feet and lease seven properties for use as training center, office, workshops, warehouse, and carparking spaces, with an aggregate floor area of approximate 7,000 square feet.
We also own a land use right of a property for use as a workshop in Hong Kong with an aggregate area of approximately 1,400 square feet and lease four premises for use as training center, office, workshop, and warehouse, with an aggregate floor area of approximate 6,000 square feet.
Fortune Jet maintains a pool of both full-time and part-time security guards for its security guarding business where Fortune Jet’s part-time employees are engaged to satisfy ad-hoc or urgent work requests from its customers.
Fortune Jet maintains a pool of both full-time and part-time security guards for its security guarding business where Fortune Jet’s part-time employees are engaged to satisfy ad-hoc or urgent work requests from its customers. For details, please see “Item 6. Directors, Senior Management and Employees — 6.D.
While the contract period of a security-related engineering project, from the date of award of contract to the completion of installation works, excluding the defects liability period, generally lasts for 2 to 12 months, the actual implementation of installation works generally spans over a relatively shorter duration of one day to three months, as the installation of security systems is subject to the site condition and the progress of other site works delivered by other contractors in a project (as the case may be).
While the contract period of a security-related engineering project, from the date of award of contract to the completion of installation works, excluding the defects liability period, generally lasts for 2 to 12 months, the actual implementation of installation works generally spans over a relatively shorter duration of one day to three months, as the installation of security systems is subject to the site condition and the progress of other site works delivered by other contractors in a project (as the case may be). 48 Generally, Shine Union provides installation works irrespective of whether customers purchase the security systems outright from Shine Union or rent the equipment under the equipment leasing arrangement.
Our Customers Our major customers included system integrators, logistics companies and air cargo terminal operators in Hong Kong. In the fiscal years ended September 30, 2022 and 2023, our five largest customers accounted for 15.2% and 19.9% of our total revenues, respectively. Our single largest customer accounted for 3.8% and 4.6% of our total revenues during the same periods, respectively.
Our Customers Our major customers included system integrators, logistics companies and air cargo terminal operators in Hong Kong. In the fiscal years ended September 30, 2022, 2023 and 2024, our five largest customers accounted for 15.2%, 19.9% and 27.5% of our total revenues, respectively.
Our principal executive office in Hong Kong is located at Unit 01 – 03, 3/F, Billion Trade Centre, 31 Hung To Road, Kwun Tong, Kowloon, Hong Kong. Our telephone number at this address is +852 2341-8183. Our agent for service of process in the United States is Puglisi & Associates, 850 Library Avenue, Suite 204, Newark, Delaware 19711.
Our principal executive office in Hong Kong is located at 7th Floor, The Rays, No. 71 Hung To Road, Kwun Tong, Kowloon, Hong Kong. Our telephone number at this address is +852 2341-8183. Our agent for service of process in the United States is Puglisi & Associates, 850 Library Avenue, Suite 204, Newark, Delaware 19711.
The First Conduct Rule provides that an undertaking must not (a) make or give effect to an agreement; (b) engage in a concerted practice; or (c) as a member of an association of undertakings, make or give effect to a decision of the association, if the object or effect of the agreement, concerted practice or decision is to prevent, restrict or distort competition in Hong Kong.
The Competition Ordinance includes, among others, the First Conduct Rule to prohibit anti-competitive conduct involving more than one party. 71 The First Conduct Rule provides that an undertaking must not (a) make or give effect to an agreement; (b) engage in a concerted practice; or (c) as a member of an association of undertakings, make or give effect to a decision of the association, if the object or effect of the agreement, concerted practice or decision is to prevent, restrict or distort competition in Hong Kong.
We generally place orders with our suppliers on a project basis and based on the requirements of each project. To ensure consistency in quality, we generally place purchase orders with suppliers which are on our internal list of approved suppliers or that of our customers.
To ensure consistency in quality, we generally place purchase orders with suppliers which are on our internal list of approved suppliers or that of our customers.
Some notable projects undertaken by Shine Union include the design, supply, installation and/or maintenance of X-ray machines at a rail link terminus and the air cargo terminal based at the Hong Kong International Airport, the traffic control system and ELV system at the bridge-tunnel system connecting Hong Kong, Macau and Zhuhai, the pedestrian control system at the headquarters office building of a Hong Kong-based banking and financial services company and the Hong Kong office building of a French cosmetics company, and the parking system at a mixed-use complex located on the Kwun Tong Promenade.
Shine Union is also the exclusive distributor to market and sell two brands of threat detection systems, which includes X-ray machines, trace detection products, metal detectors and mail screening machines. 41 Some notable projects undertaken by Shine Union include the design, supply, installation and/or maintenance of X-ray machines at a rail link terminus and the air cargo terminal based at the Hong Kong International Airport, the traffic control system and ELV system at the bridge-tunnel system connecting Hong Kong, Macau and Zhuhai, the pedestrian control system at the headquarters office building of a Hong Kong-based banking and financial services company and the Hong Kong office building of a French cosmetics company, and the parking system at a mixed-use complex located on the Kwun Tong Promenade.
We maintain an internal list of approved suppliers and subcontractors. For the fiscal years ended September 30, 2022 and 2023, our subcontracting cost, which represented the cost of services from third-party service providers, amounted to HK$15.6 million and HK$32.0 million, respectively, representing approximately 16.0% and 27.7% of our total cost of revenues for the respective years.
For the fiscal years ended September 30, 2022, 2023 and 2024, our subcontracting cost, which represented the cost of services from third-party service providers, amounted to HK$15.6 million, HK$32.0 million and HK$35.4 million (US$4.6 million), respectively, representing approximately 16.0%, 27.7% and 26.3% of our total cost of revenues for the respective years.
This section sets forth a summary of the most significant regulations or requirements that affect our business activities in Hong Kong or our shareholders’ rights to receive dividends and other distributions from us. Regulations in Hong Kong The following section summarizes the principal laws and regulations of Hong Kong which may be relevant to our business.
Regulations Our business operations are primarily in Hong Kong and we are primarily subject to Hong Kong laws and regulations. This section sets forth a summary of the most significant regulations or requirements that affect our business activities in Hong Kong or our shareholders’ rights to receive dividends and other distributions from us.

… 180 more changes not shown on this page.

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

28 edited+132 added−38 removed17 unchanged
Biggest changeCash flows The following table sets forth a summary of our consolidated cash flows for the fiscal years indicated: For the years ended September 30, Change between the years ended September 30, 2022 and 2023 2021 2022 2023 2023 Amount % HK$ HK$ HK$ US$ HK$ Net cash provided by (used in) operating activities 18,583,165 4,453,913 (13,540,058 ) (1,729,409 ) (17,993,971 ) (404.0 ) Net cash provided by (used in) investing activities 14,869,866 (2,250,000 ) (112,163 ) (14,326 ) (2,137,837 ) (95.0 ) Net cash (used in) provided by financing activities (16,552,193 ) (8,071,760 ) 4,788,172 611,571 12,859,932 159.3 Effects of exchange rate changes on cash and cash equivalents (20,302 ) (27,496 ) 78,542 10,032 106,038 385.6 Net increase (decrease) in cash and cash equivalents 16,880,536 (5,895,343 ) (8,785,507 ) (1,122,132 ) 2,890,164 49.0 Cash and cash equivalents at the beginning of the years presented 14,200,437 31,080,973 25,185,630 3,216,843 (5,895,343 ) (19.0 ) Cash and cash equivalents at the end of the years presented 31,080,973 25,185,630 16,400,123 2,094,711 (8,785,507 ) (34.9 ) Operating activities For the year ended September 30, 2021, our net cash provided by operating activities of HK$18.5 million was primarily attributable to (i) net income of HK$6.0 million, adjusted for depreciation of property and equipment and ROU assets of HK$2.8 million and HK$1.3 million, respectively, gain on disposal of property and equipment of HK$3.9 million, and deferred tax of HK$1.1 million; (ii) a decrease of inventories of HK$3.5 million, due to utilization of inventories triggered by an increase in sales activities; (iii) an increase of contract liabilities of HK$14.8 million, triggered by an increase in revenues; and (iv) an increase of income tax payable of HK$3.6 million, due to an increase in assessable profits, net off with (v) a decrease of contract assets of HK$2.2 million due to issuance of invoices upon completion of jobs; and (vi) a decrease of trade and notes payables of HK$1.7 million due to settlement made. 73 For the fiscal year ended September 30, 2022, our net cash provided by operating activities of HK$4.5 million was primarily attributable to (i) net income of HK$8.2 million, adjusted for depreciation of property and equipment and ROU assets of HK$2.3 million and HK$1.3 million respectively, losses on disposal of property and equipment of HK$1.9 million, and deferred tax of HK$0.4 million; (ii) an increase of trade receivables of HK$6.6 million, offset by (iii) a decrease of contract liabilities of HK$2.8 million triggered by increase in revenues; and (iv) an decrease of income tax payable of HK$1.7 million, due to settlement of income tax.
Biggest changeCash flows The following table sets forth a summary of our consolidated cash flows for the fiscal years indicated: For the fiscal years ended September 30, Change between the fiscal years ended September 30, 2023 and 2024 2022 2023 2024 2024 Amount % HK$ HK$ HK$ US$ HK$ Net cash provided by (used in) operating activities 4,453,913 (13,540,058 ) 14,098,052 1,813,651 27,638,110 204.1 Net cash used in investing activities (2,250,000 ) (112,163 ) (3,245,966 ) (417,579 ) (3,133,803 ) (2,794.0 ) Net cash (used in) provided by financing activities (8,071,760 ) 4,788,172 25,181,785 3,239,523 20,393,613 425.9 Effects of exchange rate changes on cash and cash equivalents (27,496 ) 78,542 (95,862 ) (12,332 ) (174,404 ) (222.1 ) Net (decrease) increase in cash and cash equivalents (5,895,343 ) (8,785,507 ) 35,938,009 4,623,263 44,723,516 509.1 Cash and cash equivalents at the beginning of the years presented 31,080,973 25,185,630 16,400,123 2,109,802 (8,785,507 ) (34.9 ) Cash and cash equivalents at the end of the years presented 25,185,630 16,400,123 52,338,132 6,733,065 35,938,009 219.1 85 Operating activities For the fiscal year ended September 30, 2022, our net cash provided by operating activities of HK$4.5 million was primarily attributable to (i) net income of HK$8.2 million, adjusted for depreciation of property and equipment and ROU assets of HK$2.3 million and HK$1.3 million respectively, losses on disposal of property and equipment of HK$1.9 million, and deferred tax of HK$0.4 million; (ii) an increase of trade receivables of HK$6.6 million, offset by (iii) a decrease of contract liabilities of HK$2.8 million triggered by increase in revenues; and (iv) a decrease of income tax payable of HK$1.7 million, due to settlement of income tax.
During the fiscal years ended September 30, 2022 and 2023, our expenditure on research and development, which comprised expenses incurred through the conducting of research and development activities (such as equipment compatibility testing services), amounted to HK$200,028 and nil, respectively.
During the fiscal years ended September 30, 2022, 2023 and 2024, our expenditure on research and development, which comprised expenses incurred through the conducting of research and development activities (such as equipment compatibility testing services), amounted to HK$200,028, nil and nil, respectively.
We are of the view that having the ability to develop new technological solutions relating to security systems will benefit our future development for the purposes of implementation of our projects undertaken. 76 Intellectual Property We develop and protect our intellectual property portfolio by registering our trademarks and domain names.
We are of the view that having the ability to develop new technological solutions relating to security systems will benefit our future development for the purposes of implementation of our projects undertaken. Intellectual Property We develop and protect our intellectual property portfolio by registering our trademarks and domain names.
We record contingent liabilities resulting from such claims, when a loss is assessed to be probable, and the amount of the loss is reasonably estimable. In the opinion of management, there were no pending or threatened claims and litigation as of September 30, 2021, 2022, and 2023, and through the issuance date of the consolidated financial statements.
We record contingent liabilities resulting from such claims, when a loss is assessed to be probable, and the amount of the loss is reasonably estimable. In the opinion of management, there were no pending or threatened claims and litigation as of September 30, 2022, 2023 and 2024, and through the issuance date of the consolidated financial statements.
Risk Factors — Risks Related to Our Business and Industry — Any failure to maintain effective quality assurance system could have a material adverse effect on our reputation, business and operations .” During the fiscal years ended September 30, 2022 and 2023, and up to the date of this annual report, we are not aware of any infringement by us of any intellectual property rights owned by third parties, or by any third parties of any intellectual property rights owned by us, and we have not been subject to any disputes or proceedings concerning any material claims of infringement, either threatened or pending, of any intellectual property rights initiated by or against us that had a material and adverse effect on our business.
Risk Factors — Risks Related to Our Business and Industry — Any failure to maintain an effective quality assurance system could have a material adverse effect on our reputation, business and operations.” During the fiscal years ended September 30, 2022, 2023 and 2024, and up to the date of this annual report, we are not aware of any infringement by us of any intellectual property rights owned by third parties, or by any third parties of any intellectual property rights owned by us, and we have not been subject to any disputes or proceedings concerning any material claims of infringement, either threatened or pending, of any intellectual property rights initiated by or against us that had a material and adverse effect on our business. 5.D.
We do not have any variable interest in any unconsolidated entity that provides financing, liquidity, market risk or credit support to us or engages in leasing, hedging or product development services with us. 75 Material Cash Requirements Our material cash requirements as of September 30, 2021, 2022 and 2023 and any subsequent period primarily include our capital expenditures and contractual obligations.
We do not have any variable interest in any unconsolidated entity that provides financing, liquidity, market risk or credit support to us or engages in leasing, hedging or product development services with us. Material Cash Requirements Our material cash requirements as of September 30, 2022, 2023 and 2024 and any subsequent period primarily include our capital expenditures and contractual obligations.
Item 5.E. Critical Accounting Policies and Estimates The preparation of the financial statements in accordance with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the end of the reporting period and revenues and expenses during the reporting periods.
Critical Accounting Policies and Estimates The preparation of the financial statements in accordance with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the end of the reporting period and revenues and expenses during the reporting periods.
Item 5.C. Research and Development, Patents and Licenses, etc. We believe that effective research and development is essential to maintaining our competitive position in the market.
Research and Development, Patents and Licenses, etc. We believe that effective research and development is essential to maintaining our competitive position in the market.
Capital Expenditures For the fiscal years ended September 30, 2021, 2022, and 2023, our capital expenditures were HK$2.9 million, HK$2.3 million, and HK$1.4 million, respectively, which primarily related to acquisition of equipment, and computer software. We plan to fund our future capital expenditures with our existing cash balance and proceeds from this offering.
Capital Expenditures For the fiscal years ended September 30, 2022, 2023 and 2024, our capital expenditures were HK$2.3 million, HK$1.4 million, and HK$3.2 million respectively, which primarily related to acquisition of equipment and computer software. We plan to fund our future capital expenditures with our existing cash balance.
During the year ended September 30, 2022, our net cash used in investing activities was HK$2.3 million, which was primarily attributable to the purchase of equipment and intangible assets. 74 During the year ended September 30, 2023, our net cash used in investing activities was HK$0.1 million, which was primarily attributable to the purchase of and proceeds from disposal of equipment.
During the fiscal year ended September 30, 2023, our net cash used in investing activities was HK$0.1 million, which was primarily attributable to the purchase of and proceeds from disposal of equipment.
Trade receivables, net increased by HK$11.3 million, or 47.6%, from HK$23.7 million as of September 30, 2022 to HK$35.0 million as of September 30, 2023. The increase of trade receivables was mainly attributable to increase in revenues during the fiscal year ended September 30, 2023.
We identified several material changes of assets and liabilities as below: Trade receivables, net increased by HK$11.3 million, or 47.6%, from HK$23.7 million as of September 30, 2022 to HK$35.0 million as of September 30, 2023. The increase of trade receivables was mainly attributable to increase in revenues during the fiscal year ended September 30, 2023.
Trend Information Other than as disclosed elsewhere herein, we are not aware of any trends, uncertainties, demands, commitments or events for the years ended September 30, 2021, 2022 and 2023 that are reasonably likely to have a material and adverse effect on our revenues, income, profitability, liquidity or capital resources, or that would cause the disclosed financial information to be not necessarily indicative of future results of operations or financial condition.
Trend Information Other than as disclosed elsewhere herein, we are not aware of any trends, uncertainties, demands, commitments or events for the period since October 1, 2024 that are reasonably likely to have a material and adverse effect on our revenues, income, profitability, liquidity or capital resources, or that would cause the disclosed financial information to be not necessarily indicative of future results of operations or financial condition. 5.E.
Out of our significant accounting policies, which are described in Note 2 to the consolidated financial statements included elsewhere in this annual report, certain accounting policies are deemed “critical”, as they require management’s highest degree of judgment, estimates and assumptions, including (i) Trade receivables, net; (ii) Revenue recognition; (iii) Leases; and (iv) Income tax.
Out of our significant accounting policies, which are described in Note 2 to the consolidated financial statements included elsewhere in this annual report, certain accounting policies are deemed “critical”, as they require management’s highest degree of judgment, estimates and assumptions, including (i) Allowance for credit loss; and (ii) Revenue recognition.
For the year ended September 30, 2022, our net cash used in financing activities was HK$8.1 million, which was primarily attributable to the payment for dividends of HK$8.0 million. For the year ended September 30, 2023, our net cash provided by financing activities was HK$4.8 million, which was primarily attributable to the capital contribution by a shareholder.
Financing activities For the fiscal year ended September 30, 2022, our net cash used in financing activities was HK$8.1 million, which was primarily attributable to the payment for dividends of HK$8.0 million.
The Employment Ordinance also requires employers to assure the liability of long service payment if an employee who has been working for the employer for not less than 5 years under a continuous contract is dismissed, dies, resigns on ground of ill health or on or after 65 years old, or upon expiry of a fixed-term employment contract.
The Employment Ordinance also requires employers to assure the liability of long service payment if an employee who has been working for the employer for not less than 5 years under a continuous contract is dismissed, dies, resigns on ground of ill health or on or after 65 years old, or upon expiry of a fixed-term employment contract. 87 As of September 30, 2022, 2023 and 2024, we estimated our long service payment to be HK$1.0 million, HK$1.0 million, and HK$1.3 million, respectively.
The cash and cash equivalents disaggregated by currency denomination are as follow: As of September 30, 2021 As of September 30, 2022 As of September 30, 2023 Amount HK$ equivalent Amount HK$ equivalent Amount HK$ equivalent Cash and cash equivalents: HK$ 28,696,780 28,696,780 23,094,209 23,094,209 14,430,523 14,430,523 EUR 163,811 1,520,950 99,766 769,721 182,238 1,506,997 US$ 4,137 32,142 16,127 126,587 11,989 93,867 GBP 12,145 129,288 54,110 474,305 38,592 368,736 RMB 587,815 701,192 654,211 720,221 - - Others 73 621 73 587 - - Total 31,080,973 25,185,630 16,400,123 72 In managing our liquidity risk, we monitor and maintain a level of cash and cash equivalents deemed adequate by our management to finance our operations and mitigate the effects of unexpected fluctuations in cash flows.
The cash and cash equivalents disaggregated by currency denomination are as follow: As of September 30, 2022 As of September 30, 2023 As of September 30, 2024 Amount HK$ equivalent Amount HK$ equivalent Amount HK$ equivalent Cash and cash equivalents: HK$ 23,094,209 23,094,209 14,430,523 14,430,523 29,103,653 29,103,653 EUR 99,766 769,721 182,238 1,506,997 2,888 25,075 US$ 16,127 126,587 11,989 93,867 2,943,394 22,879,887 GBP 54,110 474,305 38,592 368,736 31,676 329,517 RMB 654,211 720,221 - - - - Others 73 587 - - - - Total 25,185,630 16,400,123 52,338,132 In managing our liquidity risk, we monitor and maintain a level of cash and cash equivalents deemed adequate by our management to finance our operations and mitigate the effects of unexpected fluctuations in cash flows.
We currently expect that there will not be any material change in the sources and uses of cash, except that we would have additional cash outflow for payment of listing expenses.
We currently expect that there will not be any material change in the sources and uses of cash.
The increase of inventories was mainly due to an increase in work-in-progress since there are more ongoing projects and thus more project costs being incurred and transferred to work-in-progress. Trade payables decreased by HK$2.4 million, or 42.8%, from HK$5.6 million as of September 30, 2021 to HK$3.2 million as of September 30, 2022.
Inventories increased by HK$6.7 million, or 16.4%, from HK$40.9 million as of September 30, 2023 to HK$47.6 million as of September 30, 2024. The increase of inventories was mainly due to an increase in work-in-progress since there are more ongoing projects and thus more project costs being incurred and transferred to work-in-progress.
As of September 30, 2021, 2022, and 2023, we estimated our long service payment to be HK$0.9 million, HK$1.0 million, and HK$1.0 million, respectively. The provisions for long service payment as at September 30, 2021, 2022, and 2023 have been reflected in our balance sheets as “other liabilities” under non-current liabilities.
The provisions for long service payment as at September 30, 2022, 2023 and 2024 have been reflected in our consolidated balance sheets as “other liabilities” under non-current liabilities.
Our subsidiary, Shine Union, has banking facilities of HK$20.0 million with a commercial bank in Hong Kong. As of September 30, 2021, 2022, and 2023, Shine Union had utilized HK$2.0 million, HK$2.9 million, and HK$3.5 million, respectively. The unutilized banking facilities were HK$18.0 million, HK$17.1 million, and HK$16.5 million as of September 30, 2021, 2022, and 2023, respectively.
As of September 30, 2022, 2023 and 2024, Shine Union had utilized HK$2.9 million, HK$3.5 million, and HK$2.4 million, respectively. The unutilized banking facilities were HK$17.1 million, HK$16.5 million, and HK$17.6 million as of September 30, 2022, 2023 and 2024, respectively.
Contractual Obligations The following table sets forth our contractual obligations as of September 30, 2023: Payments due by period Total Within one year Within 1 – 2 years HK$ HK$ HK$ Operating lease payment – short-term leases 521,065 521,065 - Operating lease payment – leases with lease term of more than 12 months 271,200 209,600 61,600 Non-cancellable purchase contracts 9,296,574 9,296,574 - Total 10,088,839 10,027,239 61,600 The following table sets forth our contractual obligations as of September 30, 2022: Payments due by period Total Within one year Within 1 – 2 years Over 2 years HK$ HK$ HK$ HK$ Operating lease payment – short-term leases 494,600 494,600 — — Operating lease payment – leases with lease term of more than 12 months 589,000 551,000 38,000 — Non-cancellable purchase contracts 8,988,703 8,988,703 — — Total 10,072,303 10,034,303 38,000 — Other than as shown above, we did not have any significant capital and other commitments, long-term obligations, or guarantees as of September 30, 2022 and 2023.
Contractual Obligations The following table sets forth our contractual obligations as of September 30, 2024: Payments due by period Total Within 1 Year Within 1 – 2 Years HK$ HK$ HK$ Operating lease payment – short-term leases 198,000 198,000 — Non-cancellable purchase contracts 14,401,405 14,401,405 — Total 14,599,405 14,599,405 — 88 The following table sets forth our contractual obligations as of September 30, 2023: Payments due by period Total Within 1 Year Within 1 – 2 Years HK$ HK$ HK$ Operating lease payment – short-term leases 521,065 521,065 — Non-cancellable purchase contracts 9,296,574 9,296,574 — Total 9,817,639 9,817,639 — Other than as shown above, we did not have any significant capital and other commitments, long-term obligations, or guarantees as of September 30, 2023 and 2024. 5.C.
We have also adopted a comprehensive set of internal rules for intellectual property management. As of the date of this annual report, we have registered a total of 3 trademarks and 3 domain names in Hong Kong, including the domain names of our operating websites, www.sugroup.com.hk , www.shineunion.com.hk and www.fortune-jet-mgt.com .
As of the date of this annual report, we have registered a total of three trademarks and three domain names in Hong Kong, including the domain names of our operating websites, www.sugroup.com.hk , www.shineunion.com.hk and www.fortune-jet-mgt.com . 89 Despite our efforts to protect our proprietary rights, unauthorized parties may attempt to copy or otherwise obtain and use our technology.
Investing activities During the year ended September 30, 2021, our net cash provided by investing activities was HK$14.9 million which was attributable to proceeds from disposal of property and equipment of HK$17.8 million, net off with the purchase of equipment of HK$2.9 million.
During the fiscal year ended September 30, 2024, our net cash used in investing activities was HK$3.2 million, which was primarily attributable to the purchase of equipment and intangible assets.
We believe the following accounting estimates involve the most significant judgments used in the preparation of our financial statements. 77 Allowance for doubtful accounts In establishing the required allowance for doubtful accounts, management considers historical collection experience, aging of the receivables, the economic environment, industry trend analysis, and the credit history and financial condition of the customers.
We believe the following accounting estimates involve the most significant judgments used in the preparation of our financial statements. Allowance for Credit Loss The allowance for doubtful accounts reflects our best estimate of expected losses.
We had cash and cash equivalents of HK$31.1 million, HK$25.2 million, and HK$16.4 million as of September 30, 2021, 2022, and 2023, respectively. Our working capital was approximately HK$42.6 million as of September 30, 2023.
We have historically financed our operations primarily through a combination of cash flows generated from our operations and proceeds from bank borrowings. 84 We had cash and cash equivalents of HK$25.2 million, HK$16.4 million, and HK$52.3 million (US$6.7 million) as of September 30, 2022, 2023 and 2024, respectively.
Credit terms of our trade receivables were generally between 0 to 90 days for the years ended September 30, 2021 and 2022. Inventories increased by HK$4.8 million, or 26.4%, from HK$17.9 million as of September 30, 2021 to HK$22.7 million as of September 30, 2022.
Net income As a result of the foregoing, our net income increased by HK$0.9 million, or 8.7%, from HK$9.8 million for the fiscal year ended September 30, 2023 to HK$10.7 million (US$1.4 million) for the fiscal year ended September 30, 2024.
Financing activities For the year ended September 30, 2021, our net cash used in financing activities was HK$16.6 million, which was primarily attributable to (i) payment for dividends of HK$17.0 million; (ii) repayment for long-term bank loans of HK$4.9 million; (iii) repayment to related parties of HK$2.9 million for settling the balance due, offset by (iv) proceeds from capital contribution of HK$8.0 million.
For the fiscal year ended September 30, 2023, our net cash provided by financing activities was HK$4.8 million, which was primarily attributable to the capital contribution by a shareholder.
We identified several material changes of assets and liabilities as below: Trade receivables, net decreased by HK$6.7 million, or 22.0%, from HK$30.4 million as of September 30, 2021 to HK$23.7 million as of September 30, 2022. The decrease of trade receivables was mainly attributable to the improvement in credit control and collection.
Trade receivables, net decreased by HK$13.1 million, or 37.5%, from HK$35.0 million as of September 30, 2023 to HK$21.9 million as of September 30, 2024. The decrease of trade receivables was mainly attributable to a general reduction in gross amount of receivables triggered by improving credit collection activities during the fiscal year ended September 30, 2024.
Removed
Item 5.B. Liquidity and Capital Resources Liquidity and Capital Resources Our use of cash primarily related to operating activities and capital expenditure. We have historically financed our operations primarily through a combination of cash flows generated from our operations and proceeds from bank borrowings.
Added
ITEM 5. OPERATING AND FINANCIAL REVIEW AND PROSPECTS The following discussion and analysis should be read in conjunction with our consolidated financial statements, the notes to those financial statements and other financial data that appear elsewhere in this annual report. In addition to historical information, the following discussion contains forward-looking statements based on current expectations that involve risks and uncertainties.
Removed
The decrease was due to payment procedures improvement contributing an acceleration in the payment cycle. Contract liabilities decreased by HK$2.9 million, or 9.5%, from HK$30.1 million as of September 30, 2021 to HK$27.2 million as of September 30, 2022. It was mainly due to the recognition of revenues by utilizing the prepayment received from customers.
Added
Actual results and the timing of certain events may differ significantly from those projected in such forward-looking statements due to a number of factors, including those set forth in “Item 3. Key Information — D. Risk Factors” and elsewhere in this annual report. Our consolidated financial statements are prepared in conformity with U.S. GAAP. 5.A.
Removed
Despite our efforts to protect our proprietary rights, unauthorized parties may attempt to copy or otherwise obtain and use our technology. See “ Item 3 – 3.D.
Added
Operating Results OVERVIEW Through our subsidiaries, Shine Union and Fortune Jet, we are an integrated security-related services company that primarily provides security-related engineering services, and to a lesser extent, security guarding and screening services, in Hong Kong. 73 Established in 1998, Shine Union is an engineering company that provides turnkey services to the existing infrastructure or planned development of our customers through the design, supply, installation and maintenance of security systems.
Removed
Management reviews its receivables on a regular basis to determine if the allowance is adequate, and adjusts the allowance when necessary. Delinquent account balances are written-off against allowance for doubtful accounts after management has determined that the likelihood of collection is not probable.
Added
The security systems our services encompass can be broadly categorized into threat detection systems, traffic and pedestrian control systems and ELV systems. Shine Union is one of the providers in the Hong Kong security-related engineering services market authorized to distribute over 10 brands of security systems.
Removed
Our allowance for doubtful accounts amounted to HK$14,000, HK$44,000, and HK$8,347,208 as of September 30, 2021 and 2022, and 2023, respectively. Transaction price allocation of security-related engineering services We offer security-related engineering services to customers, and sign project contracts with them.
Added
Shine Union is also the exclusive distributor to market and sell two brands of threat detection systems, which includes X-ray machines, trace detection products, metal detectors and mail screening machines.
Removed
The contracts typically comprise one or multiple arrangements, such as: (i) supplies of security systems and products, provision of installation, and related maintenance services; (ii) supplies of security systems and products only; or (iii) maintenance services only.
Added
With more than two decades of industry experience, Shine Union acts as both a contractor and a subcontractor and has completed various security-related engineering projects in both the private and public sectors, which were carried out in commercial properties, public facilities and residential properties in Hong Kong.
Removed
We determine whether arrangements are distinct based on whether the customer can benefit from the product or service on its own or together with other resources that are readily available and whether our commitment to transfer the product or service to the customer is separately identifiable from other obligations in the contract.
Added
Some notable projects undertaken by Shine Union include the design, supply, installation and/or maintenance of X-ray machines at a rail link terminus and the air cargo terminal based at the Hong Kong International Airport, the traffic control system and ELV system at the bridge-tunnel system connecting Hong Kong, Macau and Zhuhai, pedestrian control system at the headquarters office building of a Hong Kong-based banking and financial services company and the Hong Kong office building of a French cosmetics company, and the parking system at a mixed-use complex located on the Kwun Tong Promenade.
Removed
We have identified that the supply of security systems and products with the installation services are a combined performance obligation, as they are interdependent and interrelated services as one promise to the customer. We also determine that the related maintenance services are distinct and represent a separate performance obligation.
Added
Shine Union obtains its contracts either through direct invitation for quotation from customers, or through a competitive tendering process of the project employers or their main contractors.
Removed
The transaction price of a contract containing multiple performance obligations is allocated to the separate performance obligations on a relative standalone selling price basis, which is determined using observable inputs, such as standalone sales of the maintenance services and historical contract pricing.
Added
As part of our strategy to provide a comprehensive suite of security-related service offerings to our customers, and in view of the capabilities of Fortune Jet in the provision of security guarding services as a holder of the Security Company Licence (Type I) issued by the Security and Guarding Services Industry Authority in Hong Kong and seeing the potential opportunities in light of the introduction of new policies by the ICAO in September 2016 and the RACSF introduced by the CAD in October 2018, which require all outgoing air cargo in Hong Kong to be subject to security screening by June 2021, we acquired Fortune Jet in July 2019, which is principally engaged in the provision of security guarding and screening services and, to a lesser extent, related vocational training services in Hong Kong.
Removed
If the standalone selling price is not observable through past transactions, we estimate the standalone selling price taking into account available information such as market conditions and internally approved pricing guidelines related to the performance obligations. We recognize revenues when (or as) it satisfies the performance obligation by transferring a promised product and/or service to a customer.
Added
Since the acquisition, we have evolved from an engineering company providing services in respect of security systems to an integrated security-related provider, with our businesses also covering security guarding and screening services.
Removed
Revenues from supplying security systems and products and installation services are recognized at a point in time when the legal title and control of the products and services has been transferred, being when the products and services are delivered, and accepted by the customer, there is no unfulfilled obligation that could affect the customer’s acceptance of the products and services, and it is highly probable that a significant reversal will not occur.
Added
We believe that the acquisition has brought synergy to our development by enabling us to market ourselves as a one-stop security-related services provider and identify cross-selling opportunities among our business segments, thereby increasing our market share.
Removed
We recognize revenues from the maintenance services ratably over the term of the arrangement, because the customer simultaneously receives and consumes the benefits provided by us. 78 Leases We adopted ASC 842 effective October 1, 2020.
Added
Our principal businesses comprise (i) the provision of security-related engineering services which includes income from the supply and installation of security systems and related maintenance services; and (ii) the provision of security guarding and screening services in Hong Kong.
Removed
Lease classification for leases under which we are a lessor is evaluated at lease commencement and leases not classified as sales-type leases or direct financing leases are classified as operating leases.
Added
KEY FACTORS AFFECTING OUR RESULTS OF OPERATIONS Our business and operating results are affected by the general factors that impact our total addressable market, including, among others, overall economic growth in Hong Kong and globally, the continued relationship with recurring customers, costs of supplies, regulatory, tax and geopolitical environments, the level of cross-border investment, and the competitive landscape for our services.
Removed
Leases qualify as sales-type leases if the contract includes either transfer of ownership clauses, certain purchase options, a lease term representing a major part of the economic life of the asset, or the present value of the lease payments and residual guarantees provided by the lessee exceeds substantially all of the fair value of the asset.
Added
Changes in any of these general factors could affect the demand for our principal businesses and our results of operations. Despite the general factors mentioned above, we believe that our results of operations have been and will continue to be affected more directly by a number of factors, including those set out below.
Removed
Additionally, leasing an asset so specialized that it is not deemed to have any value to us at the end of the lease term may also result in classification as a sales-type lease.
Added
Demand for our services Our business and results of operations are highly affected by the demand for our different services offered.
Removed
Leases qualify as direct financing leases when the present value of the lease payments and residual value guarantees provided by the lessee and unrelated third parties exceeds substantially all of the fair value of the asset and collection of the payments is probable.
Added
Changes in economic activities in Hong Kong, including expansion and development of private and public infrastructure, the number of events and exhibitions or ad-hoc or emergency situations that raise the public’s willingness to invest in security systems arising from the social movements in Hong Kong, would affect the business of our customers, which in turn may affect demand for our security services, and therefore our business and results of operations.
Removed
Lease classification for leases under which we are a lessee is evaluated at lease commencement as finance or operating leases.
Added
The demand for our services may also be influenced by the change of government policies, such as the change in policies of the CAD.
Removed
Leases qualify as finance leases if the lease transfers ownership of the asset at the end of the lease term, the lease grants an option to purchase the asset that we are reasonably certain to exercise, the lease term is for a major part of the remaining economic life of the asset, or the present value of the lease payments exceeds substantially all of the fair value of the asset.
Added
Moreover, with the government policies on promotion of the “Smart City” initiatives by the Hong Kong government, which involve the development of a city-wide network of sensors and data analytics tools to monitor and manage traffic and transportation, the demand for security and safety services is expected to rise, thereby driving the growth of security systems and services in Hong Kong.
Removed
Leases that do not qualify as finance leases are deemed to be operating leases. At lease commencement we record a lease liability which is measured as the present value of the lease payments and a ROU asset which is measured as the amount of the lease liability and any initial direct costs incurred.
Added
However, we cannot assure you that any favorable policies will continue, or at all. 74 Thus, our results of operations are highly dependent on the demand for our services and may be influenced by the changes of government policies, which are in turn driven by a variety of factors.
Removed
We apply the rate implicit in the lease, if available, as a discount rate to determine the present value of the lease payments. If the rate implicit in the lease is not known, we use a discount rate reflective of the incremental borrowing rate.
Added
Ability to secure new contract and maintain our backlog Our current business strategies rely heavily on recurring customers. We track new and recurring customers. Customers are considered to be recurring if they engage us for more than one fiscal year or period.
Removed
In the consolidated statements of income, operating leases are expensed through rent expense while financing leases are expensed through amortization and interest expense. Leases — we as lessor Our lease arrangements are all operating leases which typically have a maturity of 2 to 3 years.
Added
For the fiscal years ended September 30, 2022, 2023, and 2024 we had 319, 351, and 352 recurring customers, respectively, representing approximately 72.7%, 79.8%, and 81.5% of the total number of our customers, respectively, for the corresponding fiscal year or period.
Removed
Initial direct costs incurred by us in negotiating and arranging operating leases are added to the carrying amount of the leased assets and recognized as an expense in the consolidated statements of income over the lease term on the same basis as equipment leasing income.
Added
Accordingly, approximately 80.9%, 81.1%, and 61.8% of our revenues from security-related engineering services, respectively, and approximately 74.2%, 76.9%, and 88.2% of our revenues from security guarding and screening services, respectively, was contributed by our recurring customers for the fiscal years ended September 30, 2022, 2023 and 2024.
Removed
See Note 2(s) of our audited consolidated financial statements included elsewhere in this annual report for the accounting policy for revenues from equipment rental services. Leases — we as lessee We own leasehold land in Hong Kong and lease training center, offices, workshops, warehouse, and carparking spaces, which are classified as operating leases in accordance with ASC 842.
Added
While we devote resources to maintain or improve the relationships with our recurring customers, we also make efforts to source new customers. Although such expansion would reduce the proportion of revenues generated from recurring customers, it diversifies our clientele to reduce the potential impact in a case where the recurring customers cease to engage us to provide services.
Removed
Under ASC 842, we as a lessee are required to recognize the following for all leases (with the exception of short-term leases, usually with initial term of 12 months or less) on the commencement date: (i) lease liability, which is a lessee’s obligation to make lease payments arising from a lease, measured on a discounted basis; and (ii) ROU asset, which is an asset that represents the lessee’s right to use, or control the use of, a specified asset for the lease term.
Added
Our customers operate across a wide variety of applications for our services. Our major customers include system integrators, logistics companies and an air cargo terminal operator in Hong Kong. We mainly secure our contracts through direct negotiation and quotation process with our potential customers.
Removed
At the commencement date, we recognize the lease liability at the present value of the lease payments not yet paid, discounted using the interest rate implicit in the lease or, if that rate cannot be readily determined, our incremental borrowing rate for the same term as the underlying lease.
Added
For the fiscal years ended September 30, 2022, 2023, and 2024, approximately 81.9%, 68.6%, and 58.1% of our revenues generated from security-related engineering services was generated from quotations, respectively, and approximately 18.1%, 31.4%, and 41.9% was generated from tendering, respectively.
Removed
The ROU asset is recognized initially at cost, which primarily comprises the initial amount of the lease liability, plus any initial direct costs incurred, consisting mainly of brokerage commissions, less any lease incentives received. All ROU assets are reviewed for impairment annually. There was no impairment for ROU asset as of September 30, 2021 and 2022, and 2023.
Added
For the fiscal years ended September 30, 2022, 2023 and 2024, approximately 47.0%, 31.4%, and 22.4% of our revenues generated from security guarding services was generated from quotations, respectively, and approximately 53.0%, 68.6%, and 77.6% was generated from tendering, respectively.

… 118 more changes not shown on this page.

Item 6. [Reserved]

Selected Financial Data — reserved (removed by SEC in 2021)

42 edited+11 added−19 removed38 unchanged
Biggest changeUnder Cayman Islands law, directors owe the following fiduciary duties: (i) duty to act in good faith in what the director believes to be in the best interests of the company as a whole; (ii) duty to exercise powers for the purposes for which those powers were conferred and not for a collateral purpose; (iii) directors should not improperly fetter the exercise of future discretion; (iv) duty not to put themselves in a position in which there is a conflict between their duty to the company and their personal interests; and (v) duty to exercise independent judgment.
Biggest changeThe functions and powers of our board of directors include, among others: ● convening shareholders’ annual and extraordinary general meetings and reporting its work to shareholders at such meetings; ● declaring dividends and distributions; ● appointing officers and determining the term of office of the officers; ● exercising the borrowing powers of our company and mortgaging the property of our company; and ● approving the transfer of shares in our company, including the registration of such shares in our share register. 97 Under Cayman Islands law, directors owe the following fiduciary duties: (i) duty to act in good faith in what the director believes to be in the best interests of the company as a whole; (ii) duty to exercise powers for the purposes for which those powers were conferred and not for a collateral purpose; (iii) directors should not improperly fetter the exercise of future discretion; (iv) duty not to put themselves in a position in which there is a conflict between their duty to the company and their personal interests; and (v) duty to exercise independent judgment.
The nominating and corporate governance committee is responsible for, among other things: ● recommending nominees to the board for election or re-election to the board, or for appointment to fill any vacancy on the board; ● reviewing annually with the board the current composition of the board with regards to characteristics such as independence, knowledge, skills, experience, expertise, diversity and availability of service to us; 85 ● selecting and recommending to the board the names of directors to serve as members of the audit committee and the compensation committee, as well as of the nominating and corporate governance committee itself; ● developing and reviewing the corporate governance principles adopted by the board and advising the board with respect to significant developments in the law and practice of corporate governance and our compliance with such laws and practices; and ● evaluating the performance and effectiveness of the board as a whole.
The nominating and corporate governance committee is responsible for, among other things: ● recommending nominees to the board for election or re-election to the board, or for appointment to fill any vacancy on the board; ● reviewing annually with the board the current composition of the board with regards to characteristics such as independence, knowledge, skills, experience, expertise, diversity and availability of service to us; ● selecting and recommending to the board the names of directors to serve as members of the audit committee and the compensation committee, as well as of the nominating and corporate governance committee itself; ● developing and reviewing the corporate governance principles adopted by the board and advising the board with respect to significant developments in the law and practice of corporate governance and our compliance with such laws and practices; and ● evaluating the performance and effectiveness of the board as a whole.
Accordingly, we believe our continued success depends in part upon our ability to maintain a stable team of operational workforce to deliver consistent and quality services to our customers. Our recruitment policy is based on a number of factors including the level of knowledge and experience we require from our staff.
Accordingly, we believe our continued success depends in part upon our ability to maintain a stable team of operational workforce to deliver consistent and quality services to our customers. 98 Our recruitment policy is based on a number of factors including the level of knowledge and experience we require from our staff.
You should refer to “ Description of Securities ” in the exhibit attached to this annual report, for additional information on our standard of corporate governance under Cayman Islands law. 86 Terms of Directors and Officers Our officers are appointed by and serve at the discretion of our board of directors.
You should refer to “ Description of Securities ” in the exhibit attached to this annual report, for additional information on our standard of corporate governance under Cayman Islands law. Terms of Directors and Officers Our officers are appointed by and serve at the discretion of our board of directors.
The audit committee is responsible for, among other things: ● selecting the independent registered public accounting firm and pre-approving all auditing and non-auditing services permitted to be performed by the independent registered public accounting firm; ● reviewing with the independent registered public accounting firm any audit problems or difficulties and management’s response; ● reviewing and approving all proposed related party transactions, as defined in Item 404 of Regulation S-K under the Securities Act; ● discussing the annual audited financial statements with management and the independent registered public accounting firm; 84 ● reviewing the adequacy and effectiveness of our accounting and internal control policies and procedures and any special steps taken to monitor and control major financial risk exposures; ● annually reviewing and reassessing the adequacy of our audit committee charter; ● meeting separately and periodically with management and the independent registered public accounting firm; ● monitoring compliance with our code of business conduct and ethics, including reviewing the adequacy and effectiveness of our procedures to ensure proper compliance; and ● reporting regularly to the board.
The audit committee is responsible for, among other things: ● selecting the independent registered public accounting firm and pre-approving all auditing and non-auditing services permitted to be performed by the independent registered public accounting firm; ● reviewing with the independent registered public accounting firm any audit problems or difficulties and management’s response; ● reviewing and approving all proposed related party transactions, as defined in Item 404 of Regulation S-K under the Securities Act; ● discussing the annual audited financial statements with management and the independent registered public accounting firm; ● reviewing the adequacy and effectiveness of our accounting and internal control policies and procedures and any special steps taken to monitor and control major financial risk exposures; ● annually reviewing and reassessing the adequacy of our audit committee charter; ● meeting separately and periodically with management and the independent registered public accounting firm; ● monitoring compliance with our code of business conduct and ethics, including reviewing the adequacy and effectiveness of our procedures to ensure proper compliance; and ● reporting regularly to the board. 96 Compensation Committee.
Board Diversity Matrix Country of Principal Executive Offices: Hong Kong Foreign Private Issuer Yes Disclosure Prohibited under Home Country Law No Total Number of Directors 5 Female Male Non- Binary Did Not Disclose Gender Part I: Gender Identity Directors 1 4 0 0 Part II: Demographic Background Underrepresented Individual in Home Country Jurisdiction 0 LGBTQ+ 0 Did Not Disclose Demographic Background 0 83 6.B.
Board Diversity Matrix Country/Region of Principal Executive Offices: Hong Kong Foreign Private Issuer Yes Disclosure Prohibited under Home Country Law No Total Number of Directors 5 Female Male Non- Binary Did Not Disclose Gender Part I: Gender Identity Directors 1 4 0 0 Part II: Demographic Background Underrepresented Individual in Home Country Jurisdiction 0 LGBTQ+ 0 Did Not Disclose Demographic Background 0 6.B.
Chan worked in various companies engaging in design, supply, installation and/or maintenance of security systems, such as traffic and pedestrian systems, and sale of security-related components and building materials, principally responsible for sales, marketing, and management. Mr. Chan obtained a Technical Diploma in Electrical Engineering from Aberdeen Technical School in Hong Kong in October 1983. 81 Mr.
Chan worked in various companies engaging in design, supply, installation and/or maintenance of security systems, such as traffic and pedestrian systems, and sale of security-related components and building materials, principally responsible for sales, marketing, and management. Mr. Chan obtained a Technical Diploma in Electrical Engineering from Aberdeen Technical School in Hong Kong in October 1983. 92 Mr.
Koo has over 30 years of experience in engineering and manufacturing and corporate management and he has worked in different companies engaging in sales and manufacturing of engineering systems and electronic components. From March 1993 to October 2022, Mr. Koo served as director of Asean Limited, a Hong Kong trading company specialized in security engineering products.
Koo has over 31 years of experience in engineering and manufacturing and corporate management and he has worked in different companies engaging in sales and manufacturing of engineering systems and electronic components. From March 1993 to October 2022, Mr. Koo served as director of Asean Limited, a Hong Kong trading company specialized in security engineering products.
He was appointed as a director of Shine Union and Fortune Jet in March 2006 and August 2019, respectively. Mr. Chan also serves as a director of our investment holding company, SU Investment, since November 2019. As the founder of our company, Mr. Chan has over 39 years of experience in security-related engineering services industry. Mr.
He was appointed as a director of Shine Union and Fortune Jet in March 2006 and August 2019, respectively. Mr. Chan also serves as a director of our investment holding company, SU Investment, since November 2019. As the founder of our company, Mr. Chan has over 40 years of experience in security-related engineering services industry. Mr.
Each executive officer service agreement is for an initial term of one year and shall continue thereafter until terminated by our Company or our director/executive officer, each giving to the other at least two months’ prior written notice or otherwise in accordance with the terms thereof.
Each executive officer service agreement is for an initial term of one year and shall continue thereafter until terminated by our Company or our director/executive officer, each giving to the other at least three months’ prior written notice or otherwise in accordance with the terms thereof.
During the fiscal years ended September 30, 2021, 2022 and 2023, and up to the date of this annual report, we have complied with the applicable employment and labor laws and regulations in all material respects, and we have not experienced any material labor disputes with our employees. 6.E.
During the fiscal years ended September 30, 2022, 2023 and 2024, and up to the date of this annual report, we have complied with the applicable employment and labor laws and regulations in all material respects, and we have not experienced any material labor disputes with our employees. 6.E.
Kong joined Shine Union in October 2018 and is currently general manager of Shine Union, mainly responsible for the operational management, financial management and corporate governance of Shine Union. Mr. Kong has over 18 years of experience in security-related engineering services industry and has extensive experience in financial management and corporate governance. From September 2005 to September 2018, Mr.
Kong joined Shine Union in October 2018 and is currently general manager of Shine Union, mainly responsible for the operational management, financial management and corporate governance of Shine Union. Mr. Kong has over 19 years of experience in security-related engineering services industry and has extensive experience in financial management and corporate governance. From September 2005 to September 2018, Mr.
Tse Sui Man 34 Independent Director Mr. Chan Ming Dave has served as our Chief Executive Officer since April 2021 and as our Chairman of the board of directors since July 2021. Mr. Chan is currently managing director of Shine Union and Fortune Jet.
Tse Sui Man 35 Independent Director Mr. Chan Ming Dave has served as our Chief Executive Officer since April 2021 and as our Chairman of the board of directors since July 2021. Mr. Chan is currently managing director of Shine Union and Fortune Jet.
We are not aware of any arrangement that may, at a subsequent date, result in a change of control of our company. 88 6.F. Disclosure of a Registrant’s Action to Recover Erroneously Awarded Compensation. The Company was not required to prepare an accounting restatement during or after the last completed fiscal year. ITEM 7.
We are not aware of any arrangement that may, at a subsequent date, result in a change of control of our company. 6.F. Disclosure of a Registrant’s Action to Recover Erroneously Awarded Compensation The Company was not required to prepare an accounting restatement during or after the last completed fiscal year.
Compensation For the fiscal years ended September 30, 2022 and 2023, we paid an aggregate of HK$3.5 million and HK$4.0 million, respectively, in cash (including salaries and mandatory provident fund contributions) to our directors and officers.
Compensation For the fiscal years ended September 30, 2022, 2023 and 2024, we paid an aggregate of HK$3.5 million, HK$4.0 million and HK$5.0 million (US$0.6 million), respectively, in cash (including salaries and mandatory provident fund contributions) to our directors and officers.
Koo Lon Tien has entered into an executive officer service agreement with our Company on November 21, 2023, the form of which is attached as an exhibit to this annual report. The terms and conditions of such executive officer service agreements are similar in all material respects.
Koo Lon Tien has entered into an executive officer service agreement with our Company on November 21, 2023 and October 10, 2024, respectively, the form of which is attached as an exhibit to this annual report. The terms and conditions of such executive officer service agreements and supplement to service agreement are similar in all material respects.
Out of the 405 employees, 257 are full-time and 148 are part-time employees, who are all based in Hong Kong. We maintain a certain number of part-time employees in relation to our security guarding and screening services to satisfy ad-hoc or urgent work requests from our customers without relying on subcontractors or external manpower supply companies.
Out of the 444 employees, 202 are full-time and 242 are part-time employees, who are all based in Hong Kong. We maintain a certain number of part-time employees in relation to our security guarding and screening services to satisfy ad-hoc or urgent work requests from our customers without relying on subcontractors or external manpower supply companies.
The office of a director will be vacated automatically if, among other things, the director resigns in writing, becomes bankrupt or makes any arrangement or composition with his/her creditors generally or is found to be or becomes of unsound mind. 6.D. Employees As of January 29, 2024, we had 405 employees.
The office of a director will be vacated automatically if, among other things, the director resigns in writing, becomes bankrupt or makes any arrangement or composition with his/her creditors generally or is found to be or becomes of unsound mind. 6.D. Employees As of September 30, 2024, we had 444 employees.
Directors and Officers Age Position/Title Mr. Chan Ming Dave 57 Chairman of the board of directors and Chief Executive Officer Mr. Kong Wing Fai 42 Director, Company Secretary, and Chief Financial Officer Mr. Koo Lon Tien 57 Chief Operating Officer Mr. To Hoi Pan 50 Independent Director Mr. Mark Allen Brisson 57 Independent Director Ms.
Directors and Officers Age Position/Title Mr. Chan Ming Dave 58 Chairman of the board of directors and Chief Executive Officer Mr. Kong Wing Fai 43 Director, Company Secretary, and Chief Financial Officer Mr. Koo Lon Tien 58 Chief Operating Officer Mr. To Hoi Pan 51 Independent Director Mr. Mark Allen Brisson 58 Independent Director Ms.
In addition, he is currently a member of the Chartered Professional Accountants of British Columbia, Canada. Mr. Kong obtained a degree of Bachelor of Arts with Honors in Finance with Mathematics with first class honors from the University of Stirling in the United Kingdom in June 2005. Mr.
In addition, he is currently a member of the Chartered Professional Accountants of British Columbia, Canada, and an International Associate of Association of International Certified Professional Accountants. Mr. Kong obtained a degree of Bachelor of Arts with Honors in Finance with Mathematics with first class honors from the University of Stirling in the United Kingdom in June 2005. Mr.
From December 2013 to December 2016, Mr. Brisson served as President of Building & Industrial Services divisions of United Technologies Corporation (Australia and New Zealand), including Chubb Field business, Otis Elevators, Carrier HVAC and Fire and Security Products. From May 2010 to December 2013, Mr.
Brisson served as President of The Building & Industrial Services divisions of United Technologies Corporation (Australia and New Zealand), including Chubb Fire and Security, Otis Elevators, and oversaw Carrier HVAC support services. From May 2010 to December 2013, Mr.
As of January 29, 2024 Functions Number Percentage Management 5 1.2 % Sales and Marketing 8 2.0 % Project and Maintenance 55 13.6 % Security Guarding 276 68.1 % Screening 34 8.4 % Administration and Human Resources 19 4.7 % Accounting and Finance 8 2.0 % Total 405 100.0 % Our employee turnover rate in respect of the full-time employees for providing security guarding and screening services was 57.0% and 61.3% for the fiscal years ended September 30, 2022 and 2023, respectively.
As of September 30, 2024 Functions Number Percentage Management 8 1.8 % Sales and Marketing 10 2.3 % Project and Maintenance 62 14.0 % Security Guarding 308 69.3 % Screening 29 6.5 % Administration and Human Resources 20 4.5 % Accounting and Finance 7 1.6 % Total 444 100.0 % Our employee turnover rate in respect of the full-time employees for providing security guarding and screening services was 57.0%, 61.3% and 79.3% for the fiscal years ended September 30, 2022, 2023 and 2024, respectively.
Ordinary Shares Beneficially Owned (2) Name of Beneficial Owners (1) Number % 5% or Greater Shareholders: Exceptional Engineering Limited (3) 8,422,800 63.6 % Directors, Director Nominees, and Officers Mr. Chan Ming Dave (4) 9,016,800 68.1 % Mr. Kong Wing Fai 120,000 0.9 % Mr. Koo Lon Tien 523,200 3.9 % Mr. To Hoi Pan — — Mr.
Ordinary Shares Beneficially Owned (2) Name of Beneficial Owners (1) Number % 5% or Greater Shareholders: Exceptional Engineering Limited (3) 8,422,800 60.8 % Directors, Director Nominees, and Officers Mr. Chan Ming Dave (3) (4) 9,116,800 65.8 % Mr. Kong Wing Fai 157,962 1.1 % Mr. Koo Lon Tien 553,200 4.0 % Mr. To Hoi Pan * * Mr.
We participate in and provide contribution to the Mandatory Provident Fund as required under the Mandatory Provident Fund Schemes Ordinance (Chapter 485 of the Laws of Hong Kong). Work safety training is provided to our operational staff.
Our employees also receive welfare benefits, including medical care and training sponsorship. We participate in and provide contribution to the Mandatory Provident Fund as required under the Mandatory Provident Fund Schemes Ordinance (Chapter 485 of the Laws of Hong Kong). Work safety training is provided to our operational staff.
To has served as company secretary and Chief Financial Officer of, and, since March 2017, as Executive Director of Amuse Group Holding Limited (HKG: 8545), a company specializing in the design, marketing, and distribution of toys. From May 2013 to June 2015, Mr. To served as Chief Financial Officer of China Internet Investment Finance Holdings Ltd.
To Hoi Pan has served as our director since December 2023. Since July 2015, Mr. To has served as company secretary and Chief Financial Officer of, and, since March 2017, as Executive Director of Amuse Group Holding Limited (HKG: 8545), a company specializing in the design, marketing, and distribution of toys. From May 2013 to June 2015, Mr.
From September 2017 to February 2023, Ms. Tse served as the financial controller and company secretary of Altus Holdings Limited (HKG: 8149), an investment holding company in Hong Kong specializing in proprietary investments and advisory and consulting. From August 2016 to September 2017, Ms.
Tse served as the financial controller and company secretary of Altus Holdings Limited (HKG: 8149), an investment holding company in Hong Kong specializing in proprietary investments and advisory and consulting. From August 2016 to September 2017, Ms. Tse served as group financial analyst for Jardine Schindler Group, an elevator and moving walks manufacturing company in Hong Kong.
Directors and Officers The following table sets forth information regarding our directors and officers as of the date of this annual report. Unless otherwise stated, the business address for our directors and officers is that of our principal executive office at Unit 01 – 03, 3/F, Billion Trade Centre, 31 Hung To Road, Kwun Tong, Kowloon, Hong Kong.
Directors and Officers The following table sets forth information regarding our directors and officers as of the date of this annual report. Unless otherwise stated, the business address for our directors and officers is that of our principal executive office at 7th Floor, The Rays, No. 71 Hung To Road, Kwun Tong, Kowloon, Hong Kong.
Under the executive officer agreements, the initial annual salary of each executive officer is as follows: Mr. Chan Ming Dave HK$ 1,329,720 Mr. Kong Wing Fai HK$ 1,079,160 Mr. Koo Lon Tien HK$ 707,760 6.C. Board Practices Board of Directors Our board of directors consists of five directors, including two executive directors and three independent directors.
Under the executive officer agreements, the annual salary of each executive officer is as follows: Mr. Chan Ming Dave HK$ 1,587,192 Mr. Kong Wing Fai HK$ 1,270,176 Mr. Koo Lon Tien HK$ 817,896 95 6.C. Board Practices Board of Directors Our board of directors consists of five directors, including two executive directors and three independent directors.
Brisson obtained a degree of Bachelor of Arts in Political Science from Simon Fraser University in Canada in 1989. Mr. Brisson is a Fellow of the Hong Kong Institute of Directors. Ms. Tse Sui Man has served as our director since December 29, 2023, when our registration statement on Form F-1 was declared effective by the SEC.
Brisson obtained a degree of Bachelor of Arts in Political Science from Simon Fraser University in Canada in 1989. Mr. Brisson is a Fellow of the Hong Kong Institute of Directors. 93 Ms. Tse Sui Man has served as our director since December 2023. From September 2017 to February 2023, Ms.
(HKG: 0810) (formerly known as Opes Asia Development Limited), a Hong Kong public company engaged in investing in equity and debt instruments of public and private companies in Hong Kong. From July 2011 to February 2013, Mr. To served as a consultant at Timex Corporate Consulting Limited, a provider of financial, accounting and secretarial services in Hong Kong.
To served as Chief Financial Officer of China Internet Investment Finance Holdings Ltd. (HKG: 0810) (formerly known as Opes Asia Development Limited), a Hong Kong public company engaged in investing in equity and debt instruments of public and private companies in Hong Kong. From July 2011 to February 2013, Mr.
Tse served as group financial analyst for Jardine Schindler Group, an elevator and moving walks manufacturing company in Hong Kong. From December 2013 to August 2016, Ms. Tse worked at PricewaterhouseCoopers (Hong Kong) and her last position was audit senior associate. From September 2012 to December 2013, Ms. Tse worked as audit associate at Deloitte Touche Tohmatsu (Hong Kong). Ms.
From December 2013 to August 2016, Ms. Tse worked at PricewaterhouseCoopers (Hong Kong) and her last position was audit senior associate. From September 2012 to December 2013, Ms. Tse worked as audit associate at Deloitte Touche Tohmatsu (Hong Kong). Ms.
We enter into employment contracts with all of our employees (full-time and part-time employees) which set out terms such as remuneration and confidentiality requirements.
We enter into employment contracts with all of our employees (full-time and part-time employees) which set out terms such as remuneration and confidentiality requirements. In relation to employees in the security guarding and screening services, the employment contracts would generally include scope of work and work hours as well.
Compensation Committee. Mr. To Hoi Pan, Mr. Mark Allen Brisson and Ms. Tse Sui Man serve as members of our Compensation Committee with Mr. Mark Allen Brisson serving as the chairman of the Compensation Committee.
Mr. To Hoi Pan, Mr. Mark Allen Brisson and Ms. Tse Sui Man serve as members of our Compensation Committee with Mr. Mark Allen Brisson serving as the chairman of the Compensation Committee. All of our Compensation Committee members satisfy the “independence” requirements of the Nasdaq listing rules and meet the independence standards under Rule 10A-3 under the Exchange Act.
From April 2004 to June 2011, Mr. To served as an accounting manager at China Everbright Water Limited (formerly known as Bio-Treat Technology Limited), a company specializing in wastewater treatment in mainland China. Mr. To obtained a degree of Bachelor of Commerce in Accountancy from University of Wollongong in Australia in December 1999. Mr.
To served as a consultant at Timex Corporate Consulting Limited, a provider of financial, accounting and secretarial services in Hong Kong. From April 2004 to June 2011, Mr. To served as an accounting manager at China Everbright Water Limited (formerly known as Bio-Treat Technology Limited), a company specializing in wastewater treatment in mainland China. Mr.
Unless otherwise indicated, the person identified in this table has sole voting and investment power with respect to all shares shown as beneficially owned by such person, subject to applicable community property laws.
Unless otherwise indicated, the person identified in this table has sole voting and investment power with respect to all shares shown as beneficially owned by such person, subject to applicable community property laws. 99 As of January 16, 2025, we had approximately 488,470 ordinary shares outstanding that were held by record holders in the United States, representing approximately 3.5% of our outstanding shares.
Our Chief Executive Officer may not be present at any committee meeting during which his compensation is deliberated upon.
The compensation committee assists the board in reviewing and approving the compensation structure, including all forms of compensation, relating to our directors and officers. Our Chief Executive Officer may not be present at any committee meeting during which his compensation is deliberated upon.
To is currently a certified practising accountant of the CPA Australia and a Certified Public Accountant of the Hong Kong Institute of Certified Public Accountants. 82 Mr. Mark Allen Brisson has served as our director since December 29, 2023, when our registration statement on Form F-1 was declared effective by the SEC. Since December 2020, Mr.
To obtained a degree of Bachelor of Commerce in Accountancy from University of Wollongong in Australia in December 1999. Mr. To is currently a certified practising accountant of the CPA Australia and a Certified Public Accountant of the Hong Kong Institute of Certified Public Accountants. Mr. Mark Allen Brisson has served as our director since December 2023.
Brisson has been a consultant in the Electronic Security and Life Safety segment and a Director of Kaizntree Hong Kong Limited, a small business inventory management software company. From December 2016 to November 2020, Mr. Brisson served as President of Chubb Fire and Security (Australia and New Zealand), an international provider of security and fire safety products and solutions.
Since December 2020, Mr. Brisson has been a consultant in the Electronic Security and Life Safety segment and currently serves as a Non-Executive Director of The Intelligent Monitoring Group (ASX:IMB). Mr. Brisson is also an advisor to Kaizntree Limited, a business inventory management software company. From December 2016 to November 2020, Mr.
(2) Applicable percentage of ownership is based on 13,250,000 ordinary shares outstanding as of the date of this annual report. (3) The registered address of Exceptional Engineering Limited, a British Virgin Islands company, is Craigmuir Chamber, Road Town, Tortola, VG 1110, British Virgin Islands. 8,422,800 ordinary shares are directly held by Exceptional Engineering Limited, of which Mr.
(3) The registered address of Exceptional Engineering Limited, a British Virgin Islands company, is Craigmuir Chamber, Road Town, Tortola, VG 1110, British Virgin Islands. 8,422,800 ordinary shares are directly held by Exceptional Engineering Limited, of which Mr. Chan Ming Dave is the sole shareholder and holds the voting and dispositive power over the ordinary shares held by such entity.
As of January 29, 2024, we had 1,520,000 ordinary shares outstanding that were held by record holders in the United States, representing approximately 11.5% of our outstanding shares. Other than disclosed above, none of our shareholders has informed us that it is affiliated with a registered broker-dealer or is in the business of underwriting securities.
Other than disclosed above, none of our shareholders has informed us that it is affiliated with a registered broker-dealer or is in the business of underwriting securities.
In relation to employees in the security guarding and screening services, the employment contracts would generally include scope of work and work hours as well. 87 We offer attractive remuneration packages and career development opportunities to maintain employee loyalty and retention. Salary levels of our employees are reviewed annually based on their performance and market conditions.
We offer attractive remuneration packages and career development opportunities to maintain employee loyalty and retention. Salary levels of our employees are reviewed annually based on their performance and market conditions. We have also implemented a discretionary bonus system for awarding bonus to employees with good performance. Our remuneration package for our employees generally includes salary and/or discretionary bonus.
As of the date of this annual report, we are in compliance with all relevant laws and regulations regarding such benefits. Outstanding Equity Awards at Fiscal Year-End We do not have any outstanding equity awards. Employment Agreements Each of Mr. Chan Ming Dave, Mr. Kong Wing Fai and Mr.
As of the date of this annual report, we are in compliance with all relevant laws and regulations regarding such benefits. 94 Outstanding Equity Awards at Fiscal Year-End We adopted our 2024 Plan in November 2024, to attract and retain best available personnel, provide additional incentives to employees, officers, directors and consultants and promote the success of our business.
Removed
To Hoi Pan has served as our director since December 29, 2023, when our registration statement on Form F-1 was declared effective by the SEC. Since July 2015, Mr.
Added
Brisson served as President of Chubb Fire and Security (Australia and New Zealand), an international provider of security and fire safety products and solutions. From December 2013 to December 2016, Mr.
Removed
All of our Compensation Committee members satisfy the “independence” requirements of the Nasdaq listing rules and meet the independence standards under Rule 10A-3 under the Exchange Act. The compensation committee assists the board in reviewing and approving the compensation structure, including all forms of compensation, relating to our directors and officers.
Added
Set forth below is a summary of the key terms of the Plan: Authorized Shares . Under the Plan, the maximum number of ordinary shares authorized is 1,000,000. Type of Awards . The Plan permits the awards of options, restricted shares, restricted share units and local awards. Plan Administration .
Removed
The functions and powers of our board of directors include, among others: ● convening shareholders’ annual and extraordinary general meetings and reporting its work to shareholders at such meetings; ● declaring dividends and distributions; ● appointing officers and determining the term of office of the officers; ● exercising the borrowing powers of our company and mortgaging the property of our company; and ● approving the transfer of shares in our company, including the registration of such shares in our share register.
Added
Our board of directors or a committee which will be constituted according to the applicable laws administers the Plan (the “Administrator”). The Administrator may delegate limited authority over the day-to-day administration of the Plan to other subcommittees or specified officers.
Removed
We have also implemented a discretionary bonus system for awarding bonus to employees with good performance. Our remuneration package for our employees generally includes salary and/or discretionary bonus. Our employees also receive welfare benefits, including medical care and training sponsorship.
Added
Under the Plan, the Administrator has the authority to, among other things, determine fair market value, determine the eligibility for participants, select the service providers to whom awards may be granted, determine the type and number of shares or shares unit to be covered by each award granted under the Plan, approve forms of award agreements under the Plan, determine the terms and conditions of any award granted under the Plan, including the vesting schedule, vesting conditions, the time or times when awards may be exercised, any vesting acceleration or waiver of forfeiture restrictions, cancellation or repurchase restrictions.
Removed
Mark Allen Brisson — — Ms. Tse Sui Man — — All directors and officers as a group (6 persons) 9,660,000 72.9 % (1) Except as otherwise indicated below, the business address of our directors and officers is Unit 01 – 03, 3/F, Billion Trade Centre, 31 Hung To Road, Kwun Tong, Kowloon, Hong Kong.
Added
Eligibility . Employees, officers, directors of our group and consultants are eligible to participate in the Plan. Plan Amendment or Termination . The Administrator may at any time amend, alter, suspend or terminate this Plan.
Removed
Chan Ming Dave is the sole shareholder and holds the voting and dispositive power over the ordinary shares held by such entity. (4) Mr.
Added
The following table summarizes, as of the date of this annual report, the number of outstanding restricted shares we had granted to our directors and executive officers under the 2024 Plan: Name Ordinary Shares Underlying Restricted Shares Exercise Price Date of Grant Date of Expiration Chan Ming Dave * N/A December 9, 2024 N/A Kong Wing Fai * N/A December 9, 2024 N/A Koo Lon Tien * N/A December 9, 2024 N/A Mark Allen Brisson * N/A December 9, 2024 N/A To Hoi Pan * N/A December 9, 2024 N/A Tse Sui Man * N/A December 9, 2024 N/A All directors and executive officers as a group 200,000 — — — * Less than 1% of our total outstanding ordinary shares on an as-converted basis.
Removed
Chan Ming Dave, our Chairman of the board of directors and Chief Executive Officer, is the sole shareholder of Exceptional Engineering Limited and DC & Partners Incorporation Limited and holds the voting and dispositive power over the ordinary shares held by such entities. None of our major shareholders have differing voting rights.
Added
As of the date of this annual report, none of our employees other than directors and executive officers held any restricted shares of our Company. Employment Agreements Each of Mr. Chan Ming Dave, Mr. Kong Wing Fai and Mr.
Removed
MAJOR SHAREHOLDERS AND RELATED PARTY TRANSACTIONS 7.A. Major Shareholders See “ Item 6.E.- Share Ownership, ” for a description of our major shareholders. 7.B.
Added
Tse Sui Man * * All directors and officers as a group (6 persons) 9,857,962 71.2 % * Represents less than 1% of our total outstanding shares as of the date of this annual report. † For each person and group included in this column, percentage ownership is calculated by dividing the number of shares beneficially owned by such person or group by the sum of the total number of shares outstanding and the number of shares such person or group has the right to acquire upon exercise of option, warrant or other right within 60 days after the date of this annual report.
Removed
Related Party Transactions In addition to the director and officer compensation arrangements discussed in “Compensation of Directors and Officers,” we describe below the related party transactions of our company and our subsidiaries that occurred during the past two full fiscal years, and up to the date of this annual report.
Added
(1) Except as otherwise indicated below, the business address of our directors and officers is 7th Floor, The Rays, No. 71 Hung To Road, Kwun Tong, Kowloon, Hong Kong. (2) Applicable percentage of ownership is based on 13,847,500 ordinary shares outstanding as of the date of this annual report.
Removed
Transactions with Certain Related Parties We have adopted an audit committee charter, which requires the committee to review all related party transactions on an ongoing basis and all such transactions be approved by the audit committee.
Added
(4) Represents (i) 8,422,800 ordinary shares held by Exceptional Engineering Limited, (ii) 594,000 ordinary shares held by DC & Partners Incorporation Limited, a limited company organized under the laws of British Virgin Islands wholly-owned by Mr. Chan Ming Dave, and (iii) 100,000 ordinary shares held by Mr. Chan Ming Dave.
Removed
In determining whether to approve a related party transaction, the audit committee shall consider, among other factors, the following factors to the extent relevant to the related party transaction: ● whether the terms of the related party transaction are fair to the Company and on the same basis as would apply if the transaction did not involve a related party; ● whether there are business reasons for the Company to enter into the related party transaction; ● whether the related party transaction would impair the independence of an outside director; ● whether the related party transaction would present an improper conflict of interest for any director or executive officer of the Company, taking into account the size of the transaction, the overall financial position of the director, executive officer or the related party, the direct or indirect nature of the director’s, executive officer’s or the related party’s interest in the transaction and the ongoing nature of any proposed relationship, and any other factors the audit committee deems relevant; and ● any pre-existing contractual obligations.
Added
The registered address of DC & Partners Incorporation Limited is Craigmuir Chambers, Road Town, Tortola, VG 1110, British Virgin Islands. None of our major shareholders have differing voting rights.
Removed
Set forth below are our related party transactions that occurred since the beginning of our preceding two fiscal years up to the date of this annual report. 89 Amounts due from related parties Amounts due from related parties represented current accounts with related parties, which are used for daily operations, as follows: As of September 30, 2022 2023 HK$ HK$ Exceptional Engineering Limited 15,210 — Ms.
Removed
Yam Fung Yee Carrie* 7,600 — 22,810 — * Ms. Yam Fung Yee Carrie is Mr. Chan Ming Dave’s family member. Amount due to a related party Amount due to a related party represented a current account with a related party, which is used for daily operations, as follows: As of September 30, 2022 2023 HK$ HK$ Mr.
Removed
Chan Ming Dave 195,958 — Leases from related parties The Group has various agreements for the leases of office, workshops and warehouse owned by Mr. Chan Ming Dave and/or Ms. Yam Fung Yee Carrie.
Removed
The terms of the agreements in effect as of the date of this annual report state that the Group will continue to lease the properties at a monthly rent of HK$70,500 in total with annual rental expenses at HK$846,000 in total.
Removed
The details of leases from related parties in effect as of the date of this annual report are as below: Rent Period Monthly Lessee Lessor From To Rental HK$ Shine Union Mr. Chan Ming Dave and Ms. Yam Fung Yee Carrie April 1, 2023 March 31, 2024 37,500 Shine Union Mr.
Removed
Chan Ming Dave April 1, 2023 March 31, 2024 13,000 Shine Union Mr. Chan Ming Dave and Ms. Yam Fung Yee Carrie April 1, 2023 March 31, 2024 20,000 The lease expenses charged by the above related parties during the years ended September 30, 2022 and 2023 was HK$829,600 and HK$899,970, respectively.
Removed
As of September 30, 2022 and 2023, no operating lease ROU assets and operating lease liabilities of leases from related parties were recognized on the balance sheets since all of these leases were short-term leases. Guarantee/collateral provided by related parties Mr. Chan Ming Dave and Ms. Yam Fung Yee Carrie provided guarantee for the banking facilities of a subsidiary.
Removed
Capital contributions During the year ended September 30, 2023, the Company’s shareholder, Chan Ming Dave, made capital contributions of HK$4,961,320 to the Company. 90 7.C. Interests of Experts and Counsel Not applicable.

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

0 edited+13 added−2 removed0 unchanged
Removed
Item 7. Major Shareholders and Related Party Transactions 89 Item 8. Financial Information 91 Item 9. The Offer and Listing 91 Item 10. Additional Information 92 Item 11. Quantitative and Qualitative Disclosures about Market Risk 110 Item 12. Description Of Securities Other Than Equity Securities 111 PART II 112 Item 13. Defaults, Dividend Arrearages and Delinquencies 112 Item 14.
Added
ITEM 7. MAJOR SHAREHOLDERS AND RELATED PARTY TRANSACTIONS 7.A. Major Shareholders See “Item 6.E.— Share Ownership” for a description of our major shareholders. 100 7.B.
Removed
Material Modifications to the Rights of Security Holders and Use of Proceeds 112 Item 15. Controls and Procedures 112
Added
Related Party Transactions In addition to the director and officer compensation arrangements discussed in “Compensation of Directors and Officers,” we describe below the related party transactions of our company and our subsidiaries that occurred during the past three full fiscal years, and up to the date of this annual report.
Added
Transactions with Certain Related Parties We have adopted an audit committee charter, which requires the committee to review all related party transactions on an ongoing basis and all such transactions be approved by the audit committee.
Added
In determining whether to approve a related party transaction, the audit committee shall consider, among other factors, the following factors to the extent relevant to the related party transaction: ● whether the terms of the related party transaction are fair to the Company and on the same basis as would apply if the transaction did not involve a related party; ● whether there are business reasons for the Company to enter into the related party transaction; ● whether the related party transaction would impair the independence of an outside director; ● whether the related party transaction would present an improper conflict of interest for any director or executive officer of the Company, taking into account the size of the transaction, the overall financial position of the director, executive officer or the related party, the direct or indirect nature of the director’s, executive officer’s or the related party’s interest in the transaction and the ongoing nature of any proposed relationship, and any other factors the audit committee deems relevant; and ● any pre-existing contractual obligations.
Added
Set forth below are our related party transactions that occurred since the beginning of our preceding three fiscal years up to the date of this annual report.
Added
Amounts due from related parties Amounts due from related parties represented current accounts with related parties, which are used for daily operations, as follows: As of September 30, 2022 2023 2024 HK$ HK$ HK$ Exceptional Engineering Limited 15,210 — — Ms. Yam Fung Yee Carrie* 7,600 — — 22,810 — — * Ms. Yam Fung Yee Carrie is Mr.
Added
Chan Ming Dave’s family member. Amount due to a related party Amount due to a related party represented a current account with a related party, which is used for daily operations, as follows: As of September 30, 2022 2023 2024 HK$ HK$ HK$ Mr.
Added
Chan Ming Dave 195,958 — — 101 Leases from related parties The Group has various agreements for the leases of workshop and warehouse owned by Mr. Chan Ming Dave and/or Ms. Yam Fung Yee Carrie.
Added
The terms of the agreements in effect as of the date of this annual report state that the Group will continue to lease the properties at a monthly rent of HK$33,000 in total with annual rental expenses at HK$396,000 in total.
Added
The details of leases from related parties in effect as of the date of this annual report are as below: Rent Period Monthly Lessee Lessor From To Rental HK$ Shine Union Mr. Chan Ming Dave April 1, 2024 March 31, 2025 13,000 Shine Union Mr. Chan Ming Dave and Ms.
Added
Yam Fung Yee Carrie April 1, 2024 March 31, 2025 20,000 The lease expenses charged by the above related parties during the fiscal years ended September 30, 2022, 2023 and 2024 was HK$829,600, HK$899,970, and HK$846,000 respectively.
Added
As of September 30, 2022, 2023 and 2024, no operating lease ROU assets and operating lease liabilities of leases from related parties were recognized on the balance sheets since all of these leases were short-term leases. Guarantee/collateral provided by related parties No guarantee is provided by related parties as of the date of this annual report.
Added
Capital contributions During the fiscal years ended September 30, 2022, 2023 and 2024, the Company’s shareholder, Chan Ming Dave, made capital contributions of nil, HK$5.0 million and HK$0.8 million to the Company. 7.C. Interests of Experts and Counsel Not applicable.