# EDGAR Filing Document

**Accession Number:** 0001969863
**File Stem:** 0001213900-25-059626
**Filing Date:** 2025-6
**Character Count:** 145598
**Document Hash:** 7e8eec4a296a73ce477df3fde6696186
**Contains OCR:** False
**Source Format:** 

## Filing Content

## Filing Summary
**0001213900-25-059626.hdr.sgml**: 20250630

**ACCESSION NUMBER**: 0001213900-25-059626

**CONFORMED SUBMISSION TYPE**: 6-K

**PUBLIC DOCUMENT COUNT**: 112

**CONFORMED PERIOD OF REPORT**: 20250331

**FILED AS OF DATE**: 20250630

**DATE AS OF CHANGE**: 20250630

**FILER**: 

**COMPANY DATA:**
- **COMPANY CONFORMED NAME:** SU Group Holdings Ltd
- **CENTRAL INDEX KEY:** 0001969863
- **STANDARD INDUSTRIAL CLASSIFICATION:** SERVICES-DETECTIVE, GUARD & ARMORED CAR SERVICES [7381]
- **ORGANIZATION NAME:** 07 Trade & Services
- **EIN:** 000000000
- **STATE OF INCORPORATION:** E9
- **FISCAL YEAR END:** 0930

**FILING VALUES:**
- **FORM TYPE:** 6-K
- **SEC ACT:** 1934 Act
- **SEC FILE NUMBER:** 001-41927
- **FILM NUMBER:** 251091862

**BUSINESS ADDRESS:**
- **STREET 1:** 31 HUNG TO ROAD, KWUN TONG
- **CITY:** KOWLOON
- **STATE:** K3
- **ZIP:** 000000
- **BUSINESS PHONE:** 85223418183

**MAIL ADDRESS:**
- **STREET 1:** 31 HUNG TO ROAD, KWUN TONG
- **CITY:** KOWLOON
- **STATE:** K3
- **ZIP:** 000000

**FORMER COMPANY:**
- **FORMER CONFORMED NAME:** SU Group Holdings Limited
- **DATE OF NAME CHANGE:** 20230316

?xml version='1.0' encoding='ASCII'?

**UNITED STATES**

**SECURITIES AND EXCHANGE COMMISSION**

**Washington, D.C. 20549**

**FORM 6-K**

**REPORT OF FOREIGN PRIVATE ISSUER PURSUANT TO RULE 13a-16 OR 15d-16**

**UNDER THE SECURITIES EXCHANGE ACT OF 1934**

For the month of June 2025

Commission File Number: 001-41927

**SU Group Holdings Limited**

**(Translation of registrant's name into English)**

**7<sup>th</sup> Floor, The Rays No. 71 Hung To Road, Kwun Tong**

**Kowloon, Hong Kong (Address of principal executive offices)**

Indicate by check mark whether the registrant files or will file annual reports under cover of Form 20-F or Form 40-F.

Form 20-F ☒ &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Form 40-F ☐

**EXPLANATORY NOTE**

SU Group Holdings Limited, a Cayman Islands exempted company (the "Company") is furnishing this Form 6-K to provide results for the six months ended March 31, 2025 in connection with the unaudited interim condensed consolidated financial statements for the six months ended March 31, 2025.

**Exhibits Index**

---

| | |
|:---|:---|
| **Exhibit No.** | **Description** |
| 99.1 | [Unaudited Condensed Consolidated Financial Statements as of September 30, 2024 and March 31, 2025 and for the Six Months Ended March 31, 2024 and 2025](ea024613801ex99-1_sugroup.htm) |
| 99.2 | [Management's Discussion and Analysis of Financial Condition and Results of Operation for the Six Months Ended March 31, 2025](ea024613801ex99-2_sugroup.htm) |
| 101. INS | Inline XBRL Instance Document. |
| 101. SCH | Inline XBRL Taxonomy Extension Schema Document |
| 101. CAL | Inline XBRL Taxonomy Extension Calculation Linkbase Document |
| 101. DEF | Inline XBRL Taxonomy Extension Definition Linkbase Document |
| 101. LAB | Inline XBRL Taxonomy Extension Label Linkbase Document |
| 101. PRE | Inline XBRL Taxonomy Extension Presentation Linkbase Document |
| 104 | Cover Page Interactive Data File (embedded within the Inline XBRL document) |

---

**SIGNATURES**

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

---

| | |
|:---|:---|
| **SU Group Holdings Limited** | **SU Group Holdings Limited** |
| By: | /s/ *Chan Ming Dave* |
| Name: | Chan Ming Dave |
| Title: | Chief Executive Officer |

---

Dated: June 30, 2025

## Exhibit 99.1

?xml version='1.0' encoding='ASCII'?

**Exhibit 99.1**

**SU GROUP HOLDINGS LIMITED**

**UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS**

**AS OF SEPTEMBER 30, 2024 AND MARCH 31, 2025**

**AND FOR THE SIX MONTHS ENDED MARCH 31, 2024 AND 2025**

**INDEX TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS**

---

| | |
|:---|:---|
| **CONTENTS** | **PAGE(S)** |
| **UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS** |  |
| [UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS AS OF SEPTEMBER 30, 2024 AND MARCH 31, 2025](#a_001) | F-2 |
| [UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF INCOME FOR THE SIX MONTHS ENDED MARCH 31, 2024 AND 2025](#a_002) | F-3 |
| [UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY FOR THE SIX MONTHS ENDED MARCH 31, 2024 AND 2025](#a_003) | F-4 |
| [UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWSFOR THE SIX MONTHS ENDED MARCH 31, 2024 AND 2025](#a_004) | F-5 |
| [NOTES TO THE UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS](#a_005) | F-6 – F-32 |

---

**SU GROUP HOLDINGS LIMITED**

**UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS**

---

| | | | |
|:---|:---|:---|:---|
|  | | **As of March 31,** | **As of March 31,** |
|  | **As of September 30,**<br>**2024** | **2025** | **2025** |
|  | **HK$** | **HK$** | **US$** |
| **Assets** |  |  |  |
| Current assets |  |  |  |
| &nbsp;&nbsp;&nbsp;Cash and cash equivalents | 52338132 | 40923581 | 5260979 |
| &nbsp;&nbsp;&nbsp;Trade receivables, net | 21851480 | 24852732 | 3194972 |
| &nbsp;&nbsp;&nbsp;Inventories | 47613381 | 29912977 | 3845498 |
| &nbsp;&nbsp;&nbsp;Prepaid expenses and other current assets | 5013876 | 2532942 | 325628 |
| &nbsp;&nbsp;&nbsp;Contract assets, net | 6443947 | 18038502 | 2318961 |
| &nbsp;&nbsp;&nbsp;Prepaid income tax | 2066219 | 1052841 | 135349 |
| **Total current assets** | 135327035 | 117313575 | 15081387 |
| **Non-current assets** |  |  |  |
| &nbsp;&nbsp;&nbsp;Property and equipment, net | 8886235 | 6966653 | 895606 |
| &nbsp;&nbsp;&nbsp;Intangible assets, net | 268500 | 231300 | 29735 |
| &nbsp;&nbsp;&nbsp;Goodwill | 1271160 | 1271160 | 163415 |
| &nbsp;&nbsp;&nbsp;Prepaid expenses and other non-current assets | 4462823 | 2945680 | 378685 |
| &nbsp;&nbsp;&nbsp;Operating lease right-of-use assets, net | 5496985 | 4543234 | 584061 |
| &nbsp;&nbsp;&nbsp;Investment in key management insurance policy | 1157520 | 1299900 | 167110 |
| &nbsp;&nbsp;&nbsp;Deferred tax assets | 207702 | 211753 | 27222 |
| **Total non-current assets** | 21750925 | 17469680 | 2245834 |
| **TOTAL ASSETS** | 157077960 | 134783255 | 17327221 |
| **LIABILITIES AND SHAREHOLDERS' EQUITY** |  |  |  |
| **Current liabilities** |  |  |  |
| &nbsp;&nbsp;&nbsp;Trade payables | 8625685 | 7686509 | 988148 |
| &nbsp;&nbsp;&nbsp;Notes payables | 2355023 | 631973 | 81244 |
| &nbsp;&nbsp;&nbsp;Other payables | 3499507 | 1436983 | 184733 |
| &nbsp;&nbsp;&nbsp;Accrued payroll and welfare | 9040942 | 8421744 | 1082667 |
| &nbsp;&nbsp;&nbsp;Operating lease liabilities – current | 1935187 | 1580205 | 203145 |
| &nbsp;&nbsp;&nbsp;Contract liabilities | 27801257 | 15020377 | 1930962 |
| **Total current liabilities** | 53257601 | 34777791 | 4470899 |
| **Non-current liabilities** |  |  |  |
| &nbsp;&nbsp;&nbsp;Operating lease liabilities – non-current | 3004974 | 2380571 | 306037 |
| &nbsp;&nbsp;&nbsp;Other payables – non-current | 1340016 | 1362306 | 175133 |
| &nbsp;&nbsp;&nbsp;Deferred tax liabilities | 431717 |  |  |
| &nbsp;&nbsp;&nbsp;Other liabilities | 1321956 | 643000 | 82662 |
| **Total non-current liabilities** | 6098663 | 4385877 | 563832 |
| **Total liabilities** | 59356264 | 39163668 | 5034731 |
| **Commitments and contingencies** |  |  |  |
| **Shareholders' Equity** |  |  |  |
| &nbsp;&nbsp;&nbsp;Ordinary shares (par value of HK$0.01 per share; 750,000,000 ordinary shares authorized and 13,647,500 and 13,847,500 ordinary shares issued and outstanding as of September 30, 2024 and March 31, 2025, respectively.) | 136475 | 138475 | 17802 |
| &nbsp;&nbsp;&nbsp;Shares subscription receivables | (90) |  |  |
| &nbsp;&nbsp;&nbsp;Additional paid-in capital | 46260499 | 48683768 | 6258600 |
| &nbsp;&nbsp;&nbsp;Retained earnings | 51324812 | 46797344 | 6016088 |
| **Total SU Group Holdings Limited shareholders' equity and total shareholders' equity** | 97721696 | 95619587 | 12292490 |
| **TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY** | 157077960 | 134783255 | 17327221 |

---

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

**SU GROUP HOLDINGS LIMITED**

**UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF INCOME**

---

| | | | |
|:---|:---|:---|:---|
|  | **For the Six Months Ended March 31,** | **For the Six Months Ended March 31,** | **For the Six Months Ended March 31,** |
|  | **2024** | **2025** | **2025** |
|  | **HK$** | **HK$** | **US$** |
| Revenues | 91845615 | 107912380 | 13872804 |
| Cost of revenues | (65231088) | (85953617) | (11049869) |
| **Gross profit** | 26614527 | 21958763 | 2822935 |
| **Operating expenses** |  |  |  |
| &nbsp;&nbsp;&nbsp;Selling, general and administrative expenses | (15598351) | (24921087) | (3203760) |
| &nbsp;&nbsp;&nbsp;Losses on disposal of property and equipment | (636289) | (1772107) | (227815) |
| **Income (loss) from operations** | 10379887 | (4734431) | (608640) |
| **Other income (expenses)** |  |  |  |
| &nbsp;&nbsp;&nbsp;Other income | 771005 | 715730 | 92012 |
| &nbsp;&nbsp;&nbsp;Finance expenses | (50854) | (149000) | (19155) |
| **Total other income, net** | 720151 | 566730 | 72857 |
| **Income (loss) before income tax expenses** | 11100038 | (4167701) | (535783) |
| Income tax expenses | (976169) | (359767) | (46250) |
| **Net income (loss) attributable to SU Group Holdings Limited's ordinary shareholders** | 10123869 | (4527468) | (582033) |
| **Net income (loss) per share** |  |  |  |
| &nbsp;&nbsp;&nbsp;Basic and diluted | 0.81 | (0.33) | (0.04) |
| **Weighted average number of shares** |  |  |  |
| &nbsp;&nbsp;&nbsp;Basic and diluted | 12464481 | 13770577 | 13770577 |

---

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

**SU GROUP HOLDINGS LIMITED**

**UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY**

---

| | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|
|  | **Ordinary shares** | **Ordinary shares** | | | | |
|  | **Share** | **Amount** | **Shares<br> subscription**<br>**receivables** | **Additional<br> paid-in**<br>**capital** | **Retained**<br>**earnings** | **Total SU Group<br> Holdings<br> Limited<br> shareholders'**<br>**equity** |
|  | | **HK$** | **HK$** | **HK$** | **HK$** | **HK$** |
| **Balance as of September 30, 2024** | 13647500 | 136475 | (90) | 46260499 | 51324812 | 97721696 |
| &nbsp;&nbsp;&nbsp;Net loss |  |  |  |  | (4527468) | (4527468) |
| &nbsp;&nbsp;&nbsp;Receipt of subscription receivables |  |  | 90 |  |  | 90 |
| &nbsp;&nbsp;&nbsp;Share-based compensation | 200000 | 2000 |  | 2423269 |  | 2425269 |
| **Balance as of March 31, 2025** | 13847500 | 138475 |  | 48683768 | 46797344 | 95619587 |
| **Balance as of March 31, 2025 (US$)** |  | 17802 |  | 6258600 | 6016088 | 12292490 |

---

---

| | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|
|  | **Ordinary shares** | **Ordinary shares** | | | | |
|  | **Share** | **Amount** | **Shares<br> subscription**<br>**receivables** | **Additional<br> paid-in**<br>**capital** | **Retained**<br>**earnings** | **Total SU Group<br> Holdings<br> Limited<br> shareholders'**<br>**equity** |
|  | | **HK$** | **HK$** | **HK$** | **HK$** | **HK$** |
| **Balance as of September 30, 2023** | 12000000 | 120000 | (119990) | 14642029 | 41782502 | 56424541 |
| &nbsp;&nbsp;&nbsp;Cumulative effect adjustment upon adoption of ASC 326 |  |  |  |  | (1111178) | (1111178) |
| **Balance as of October 1, 2023** | 12000000 | 120000 | (119990) | 14642029 | 40671324 | 55313363 |
| &nbsp;&nbsp;&nbsp;Net income |  |  |  |  | 10123869 | 10123869 |
| &nbsp;&nbsp;&nbsp;Capital injection from shareholder |  |  | 119900 | 762688 |  | 882588 |
| &nbsp;&nbsp;&nbsp;Initial public offering, net | 1250000 | 12500 |  | 24286697 |  | 24299197 |
| **Balance as of March 31, 2024** | 13250000 | 132500 | (90) | 39691414 | 50795193 | 90619017 |

---

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

**SU GROUP HOLDINGS LIMITED**

**UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS**

---

| | | | |
|:---|:---|:---|:---|
|  | **For the Six Months Ended March 31,** | **For the Six Months Ended March 31,** | **For the Six Months Ended March 31,** |
|  | **2024** | **2025** | **2025** |
|  | **HK$** | **HK$** | **US$** |
| **Cash flows from operating activities:** |  |  |  |
| Net income (loss) | 10123869 | (4527468) | (582033) |
| Adjustments to reconcile net income to net cash provided by (used in) operating activities: |  |  |  |
| &nbsp;&nbsp;&nbsp;Change in fair value of investment in key management insurance policy |  | (142380) | (18304) |
| &nbsp;&nbsp;&nbsp;Depreciation of property and equipment | 869104 | 905575 | 116417 |
| &nbsp;&nbsp;&nbsp;Amortization of intangible assets | 42500 | 37200 | 4782 |
| &nbsp;&nbsp;&nbsp;Amortization of operating lease right-of-use assets | 440254 | 953751 | 122611 |
| &nbsp;&nbsp;&nbsp;Amortization of service fee |  | 5203673 | 668964 |
| &nbsp;&nbsp;&nbsp;Provision for credit loss | 347000 | 203000 | 26097 |
| &nbsp;&nbsp;&nbsp;Write-down for inventories |  | 50000 | 6428 |
| &nbsp;&nbsp;&nbsp;Deferred tax | (346058) | (435768) | (56021) |
| &nbsp;&nbsp;&nbsp;Losses on disposal of property and equipment | 636289 | 1772107 | 227815 |
| &nbsp;&nbsp;&nbsp;Share-based compensation |  | 2425269 | 311783 |
| &nbsp;&nbsp;&nbsp;Foreign exchange losses - unrealized | 96492 | 35499 | 4564 |
| Changes in operating assets and liabilities |  |  |  |
| &nbsp;&nbsp;&nbsp;Inventories | (4058366) | 17650404 | 2269069 |
| &nbsp;&nbsp;&nbsp;Trade receivables | 4246864 | (3314240) | (426066) |
| &nbsp;&nbsp;&nbsp;Prepaid expenses and other assets | (3687198) | (1205596) | (154987) |
| &nbsp;&nbsp;&nbsp;Contract assets | (4397107) | (11484555) | (1476411) |
| &nbsp;&nbsp;&nbsp;Trade and notes payables | (10229186) | (2668298) | (343026) |
| &nbsp;&nbsp;&nbsp;Other payables, accrued payroll and welfare | (482856) | (2659432) | (341886) |
| &nbsp;&nbsp;&nbsp;Contract liabilities | 14821793 | (12780880) | (1643061) |
| &nbsp;&nbsp;&nbsp;Operating lease liabilities | (429154) | (979385) | (125906) |
| &nbsp;&nbsp;&nbsp;Other liabilities | 183136 | (678956) | (87284) |
| &nbsp;&nbsp;&nbsp;Prepaid income tax | (1965065) | 1013378 | 130276 |
| **Net cash provided by (used in) operating activities** | 6212311 | (10627102) | (1366179) |
| **Cash flows from investing activities:** |  |  |  |
| Purchases of property and equipment | (663000) | (1008100) | (129597) |
| Proceeds from disposal of property and equipment |  | 250000 | 32139 |
| **Net cash used in investing activities** | (663000) | (758100) | (97458) |
| **Cash flows from financing activities:** |  |  |  |
| Proceeds from capital contribution | 882588 | 90 | 12 |
| Net proceeds from initial public offering | 24299503 |  |  |
| Payments to related parties | (6984) |  |  |
| Repayments by related parties | 6984 |  |  |
| **Net cash provided by financing activities** | 25182091 | 90 | 12 |
| Effect of exchange rate changes | 89535 | (29439) | (3787) |
| **Net (decrease) increase in cash and cash equivalents** | 30820937 | (11414551) | (1467412) |
| **Cash and cash equivalents at beginning of the year** | 16400123 | 52338132 | 6728391 |
| **Cash and cash equivalents at end of the year** | 47221060 | 40923581 | 5260979 |
| **Supplemental disclosure of cash flow information:** |  |  |  |
| &nbsp;&nbsp;&nbsp;Interest expense paid | 8109 | 5384 | 692 |
| &nbsp;&nbsp;&nbsp;Income tax paid/(refunded) | 3287292 | (217843) | (28005) |
| **Supplemental disclosure of non-cash investing and financing information:** |  |  |  |
| &nbsp;&nbsp;&nbsp;Operating lease right-of-use assets obtained in exchange for operating lease obligations | 1803513 |  |  |
| &nbsp;&nbsp;&nbsp;Extinguishment of operating lease right-of-use assets and operating lease liabilities due to termination of lease | 35709 |  |  |

---

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

**SU GROUP HOLDINGS LIMITED**

**NOTES TO THE UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS**

**NOTE 1. ORGANIZATION AND PRINCIPAL ACTIVITIES**

SU Group Holdings Limited (the "Company") and its subsidiaries (collectively referred to as the "Group") are principally engaged in the provision of security-related engineering services, and security guarding and screening services in Hong Kong Special Administrative Region ("Hong Kong") of the People's Republic of China.

The Company was incorporated under the law of Cayman Islands as an exempted company with limited liability on March 11, 2021. The registered office of the Company is Cricket Square, Hutchins Drive, PO Box 2681, Grand Cayman, KY1-1111, Cayman Islands.

SU Group Investment Limited ("SU Investment"), which is 100% owned by the Company, was incorporated in British Virgin Islands (the "BVI") on November 21, 2019. It is an investment holding company with no operations.

Shine Union Limited ("Shine Union"), which was incorporated on January 2, 1998 in Hong Kong, has been 100% owned by SU Investment since December 11, 2019. It is engaged in providing security-related engineering services.

Fortune Jet Management & Training Co. Limited ("Fortune Jet"), which was incorporated on February 13, 2015 in Hong Kong, has been 90% owned by SU Investment since December 9, 2019. It is engaged in providing security guarding and screening services.

On March 1, 2023, the non-controlling shareholder of Fortune Jet transferred its 10.0% equity interest in Fortune Jet to SU Investment at a consideration of HK$1,000. After the transfer, Fortune Jet is 100% owned by SU Investment.

On December 29, 2023, the Securities and Exchange Commission declared effective SU Group's Registration Statement on Form F-1. On January 26, 2024, the Company consummated the initial public offering of 1,250,000 ordinary shares at a price of US$4.0 per share, generating net proceeds of approximately US$3.0 million after deducting underwriting discounts and commissions and offering expenses.

***Reorganization***

In anticipation of an initial public offering ("IPO") of its equity securities, the Company undertook a reorganization (the "Reorganization"). Since December 2019, SU Investment became the holding company of Shine Union and Fortune Jet. Effective on April 16, 2021, upon the transfer of all equity ownership of SU Investment to the Company, it became the ultimate holding company of SU Investment, Shine Union and Fortune Jet, which were all controlled by the same shareholder before and after the Reorganization.

The consolidation of the Company and its subsidiaries has been accounted for at historical cost and prepared on the basis as if the Reorganization had become effective as of the beginning of the first period presented in the accompanying unaudited condensed consolidated financial statements. Results of operations for the periods presented comprise those of the previously separate entities combined from the beginning of the period to the end of the period, eliminating the effects of intra-entity transactions.

**NOTE 2. SIGNIFICANT ACCOUNTING POLICIES**

&nbsp;&nbsp;&nbsp;&nbsp;**(a)** **Basis of presentation** 

The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America ("U.S. GAAP") for interim financial information. Accordingly, they do not include all the information and footnotes required by U.S. GAAP for complete financial statements. Certain information and note disclosures normally included in the annual financial statements prepared in accordance with U.S. GAAP have been condensed or omitted consistent with Article 10 of Regulation S-X.

The unaudited condensed consolidated financial statements have been prepared on the same basis as the audited annual consolidated financial statements and, in the opinion of management, reflect all adjustments, which include only normal recurring adjustments, necessary for the fair statement of the Company's financial position as of March 31, 2025 and the results of its operations and its cash flows for the six months ended March 31, 2024 and 2025. The results for the six months ended March 31, 2025 are not necessarily indicative of results to be expected for the year ending September 30, 2025, any other interim periods, or any future year or period. These unaudited condensed consolidated financial statements should be read in conjunction with the annual audited consolidated financial statements as of and for the year ended September 30, 2024 and notes thereto also included herein.

**SU GROUP HOLDINGS LIMITED NOTES TO THE UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS**

**NOTE 2. SIGNIFICANT ACCOUNTING POLICIES** (cont.)

&nbsp;&nbsp;&nbsp;&nbsp;**(b)** **Principal of consolidation** 

The unaudited condensed consolidated financial statements include the unaudited condensed financial statements of the Company and all the subsidiaries of the Company. All transactions and balances among the Company and its subsidiaries have been eliminated upon consolidation. A subsidiary is an entity in which the Company, directly or indirectly, controls more than one half of the voting powers; or has the power to appoint or remove the majority of the members of the board of directors; or to cast a majority of votes at the meeting of directors; or to govern the financial and operating policies of the investee under a statute or agreement among the shareholders or equity holders.

Non-controlling interests represent the portion of the net assets of a subsidiary attributable to interests that are not entitled by the Company. The non-controlling interest is presented in the unaudited condensed consolidated balance sheets, separately from equity attributable to the shareholders of the Company. Non-controlling interest's operating result is presented in the unaudited condensed consolidated statements of income as an allocation of the total profit or loss for the year between non-controlling shareholders and the shareholders of the Company.

&nbsp;&nbsp;&nbsp;&nbsp;**(c)** **Foreign currency translation and transactions** 

The Company uses Hong Kong dollars ("HK$") as its reporting currency. The functional currency of the Company and its subsidiaries is HK$, based on the criteria of Accounting Standards codification ("ASC") Topic 830, Foreign Currency Matters.

Transactions denominated in currencies other than the functional currency are translated into the functional currency at the exchange rates prevailing at the dates of the transactions. Monetary assets and liabilities denominated in currencies other than the functional currency are translated into the functional currency using the applicable exchange rates at end of the reporting period. The resulting exchange differences are recorded in the unaudited condensed consolidated statements of income. The equity denominated in currency other than the functional currency is translated at the historical rate of exchange at the time of capital contribution.

No foreign currency translation adjustments were made for the six months ended March 31, 2024 and 2025.

&nbsp;&nbsp;&nbsp;&nbsp;**(d)** **Convenience translation** 

The unaudited condensed consolidated financial statements as of and for the six months ended March 31, 2025 have been translated into U.S. dollars ("US$") solely for the convenience of the readers. The translation has been made at the rate of US$1.00 = HK$7.7787, representing the close rate on March 31, 2025 as set forth in the statistical release of Yahoo.com. No representation is made that the HK$ amounts represent or could have been, or could be, converted, realized or settled into US$ at that rate, or at any other rates.

&nbsp;&nbsp;&nbsp;&nbsp;**(e)** **Use of estimates and assumptions** 

The preparation of the unaudited condensed consolidated financial statements in conformity with U.S. GAAP requires that management make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities at the dates of the unaudited condensed financial statements, and the reported amounts of revenues and expenses during the reporting periods.

Estimates are adjusted to reflect actual experience when necessary. Significant accounting estimates reflected in the Group's unaudited condensed consolidated financial statements include allowance for credit loss related to trade receivables and contract assets and revenue recognition. The use of estimates is an integral component of the financial reporting process. Actual results could differ from those estimates.

&nbsp;&nbsp;&nbsp;&nbsp;**(f)** **Fair values of financial instruments** 

Fair value is defined as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. When available, the Group uses quoted market prices to determine the fair value of an asset or liability. If quoted market prices are not available, the Group will measure the fair value using valuation techniques that use, when possible, current market-based or independently sourced market parameters, such as interest rates and exchange rates. Valuation techniques used to measure fair value must maximize the use of observable inputs and minimize the use of unobservable inputs.

**SU GROUP HOLDINGS LIMITED NOTES TO THE UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS**

**NOTE 2. SIGNIFICANT ACCOUNTING POLICIES** (cont.)

Fair value measurements are based on a fair value hierarchy, based on three levels of inputs, of which the first two are considered observable and the last unobservable, that may be used to measure fair value which are the following:

Level 1 — Quoted prices (unadjusted) in active markets for identical assets or liabilities that the Group has the ability to access at the measurement date.

---

| | |
|:---|:---|
| Level 2 — | Inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly, such as quoted market prices for similar assets and liabilities; quoted prices for identical assets or liabilities in markets with insufficient volume or infrequent transactions (less active markets); or model-derived valuations in which significant inputs are observable or can be derived principally from, or corroborated by, observable market data. |
| Level 3 — | Unobservable inputs to the valuation methodology that are significant to the measurement of the fair value of the assets or liabilities. |

---

Financial assets and liabilities of the Group primarily consist of cash and cash equivalents, trade receivables, deposits and other receivables included in prepaid expenses and other assets, investment in key management insurance policy, trade payables, notes payables, other payables, operating lease liabilities, and other liabilities. The carrying amounts of cash and cash equivalents, trade receivables, deposits and other receivables included in prepaid expenses and other assets, amounts due from related parties, trade payables, notes payables, other payables, operating lease liabilities, and other liabilities approximate their fair values due to the short-term maturities. Investment in key management insurance policy is measured at fair value using unobservable inputs which is positively correlated to the surrender cash value and categorized in Level 3 of the fair value hierarchy.

&nbsp;&nbsp;&nbsp;&nbsp;**(g)** **Cash and cash equivalents** 

Cash and cash equivalents includes cash on hand, deposits held at call with financial institutions, and other short-term and highly liquid investments with original maturities of three months or less that are readily convertible to known amounts of cash and which are subject to an insignificant risk of changes in value.

&nbsp;&nbsp;&nbsp;&nbsp;**(h)** **Trade receivables, net** 

Trade receivables, net are stated at the original amount less an allowance for credit loss. Trade receivables are recognized in the period when the Group has delivered goods or rendered services to its customers and when the right to consideration is unconditional. The amounts due are stated at their net estimated realizable value. The credit terms are generally between 0 to 90 days.

The allowance for doubtful accounts reflects the Group's best estimate of expected losses. Before October 1, 2023 the Group determines the allowance for doubtful accounts based on an assessment of historical collection activity, the current business environment and forecasts that may affect the customers' ability to pay. From October 1, 2023, the Group determines the expected credit loss provisions based on ASU 2016-13 Financial Instruments - Credit Losses ("ASC 326"): Measurement of Credit Losses on Financial Instruments, detailed as Note 2(i).

**SU GROUP HOLDINGS LIMITED NOTES TO THE UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS**

**NOTE 2. SIGNIFICANT ACCOUNTING POLICIES** (cont.)

&nbsp;&nbsp;&nbsp;&nbsp;**(i)** **Expected credit loss** 

The Group adopted the accounting standards update of ASC 326 and several associated ASUs related to the measurement of credit losses on October 1, 2023 using a modified retrospective approach. The retrospective adjustment on the retained earnings as of October 1, 2023 was HK$1.1 million.

The Group's trade receivables, contract assets, other current assets, and other non-current assets are within the scope of ASC 326. The Group has identified the relevant risk characteristics of its customers and the related trade receivables, contract assets, other current assets, and other non-current assets which include size, type of the goods or services the Group provides, or a combination of these characteristics. Receivables with similar risk characteristics have been grouped into pools. For each pool, the Group considers the historical credit loss experience and any recoveries, adjusted by correlated industrial and macroeconomic forward-looking factors, in assessing the lifetime expected credit losses. Other key factors that influence the expected credit loss analysis include payment terms offered in the normal course of business to customers and industry-specific factors that could impact the Group's trade receivables, contract assets, other current assets, and other non-current assets. The Group also provides specific provisions for allowance when facts and circumstances indicate that the receivable is unlikely to be collected. Expected credit losses for trade receivables, contract assets, other current assets, and other non-current assets are recorded as selling, general and administrative expenses on the unaudited condensed consolidated statements of income.

&nbsp;&nbsp;&nbsp;&nbsp;**(j)** **Inventories** 

Inventories consist of spare parts and other materials and work-in-progress. Spare parts and other materials primarily comprise of components and parts for the security systems. Work-in-progress primarily comprises of certain costs incurred for installation of security systems that will be sold to customers, which are partially installed and have yet to meet the criteria for revenue recognition.

Inventories are stated at the lower of cost and net realizable value. Cost is determined using the moving weighted average method and in the case of work-in-progress, comprises raw materials and other direct costs. Net realizable value is based on estimated selling prices less any estimated costs to be incurred to disposal.

Where there is evidence that the utility of inventories, in their disposal in the ordinary course of business, will be less than their costs, whether due to physical deterioration, obsolescence, changes in price levels, or other causes, the inventories are written down to net realizable value. Write-down of inventories of nil and HK$0.1 million was made for the six months ended March 31, 2024 and 2025, respectively.

&nbsp;&nbsp;&nbsp;&nbsp;**(k)** **Prepaid expenses and other assets** 

Prepaid expenses and other assets are mainly prepaid insurance, prepaid professional service fee, deposits for rental, utilities and items in daily operations, and employee advances. These amounts are refundable and bear no interest. Management reviews its prepaid expenses and other assets on a regular basis to determine if the allowance is adequate, and adjusts the allowance when necessary. Management continues to evaluate the reasonableness of the allowance policy and update it if necessary.

&nbsp;&nbsp;&nbsp;&nbsp;**(l)** **Related party** 

A related party may be any of the following: a) an affiliate, which is a party that directly or indirectly controls, is controlled by, or is under common control with an entity; b) a principal owner, owner of record or known beneficial owner of more than 10% of the voting interest of an entity; c) management, which are persons having responsibility for achieving objectives of the entity and requisite authority to make decision; d) immediate family of management or principal owners; e) a parent company and its subsidiaries; and f) other parties that have ability to significantly influence the management or operating policies of the entity. The Group discloses all significant related party transactions.

**SU GROUP HOLDINGS LIMITED NOTES TO THE UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS**

**NOTE 2. SIGNIFICANT ACCOUNTING POLICIES** (cont.)

&nbsp;&nbsp;&nbsp;&nbsp;**(m)** **Property and equipment, net** 

Property and equipment, net is stated at historical cost less accumulated depreciation and impairment, if any. Cost represents the purchase price of the asset and other costs incurred to bring the asset into its intended use. Depreciation is calculated using the straight-line method to allocate their costs to their residual values over their estimated useful lives, as follows:

---

| | |
|:---|:---|
| **Items** | **Useful life** |
| Building | 25 years |
| Leasehold improvements | Shorter of the lease terms or the estimated useful lives |
| Motor vehicles | 4 years |
| Furniture, fixtures and equipment | 5 years |
| Equipment for leasing | 8 years |

---

The cost and related accumulated depreciation of assets sold or otherwise retired are eliminated from the accounts and any gain or loss is included in the unaudited condensed consolidated statements of income. Expenditures for maintenance and repairs are charged to unaudited condensed consolidated statements of income as incurred, while additions, renewals and betterments, which are expected to extend the useful lives of assets, are capitalized. The Group also re-evaluates the periods of depreciation to determine whether subsequent events and circumstances warrant revised estimates of useful lives.

&nbsp;&nbsp;&nbsp;&nbsp;**(n)** **Intangible assets, net** 

Indefinite-lived intangible assets are tested for impairment at least annually and are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. Indefinite-lived intangible assets are impaired if their estimated fair values are less than their carrying values.

Finite-lived intangible assets are carried at cost less accumulated amortization and impairment if any. The finite-lived intangible assets are amortized over their estimated useful lives, which are the period over which the assets are expected to contribute directly or indirectly to the future cash flows of the Group. These intangible assets are tested for impairment at the time of a triggering event, if one were to occur. Finite-lived intangible assets may be impaired when the estimated undiscounted future cash flows generated from the assets are less than their carrying amounts.

The Group may rely on a qualitative assessment when performing impairment test for its intangible assets. Otherwise, the impairment evaluation is performed at the lowest level of identifiable cash flows independent of other assets.

The Group's intangible assets mainly represented computer software. Computer software is classified as finite-lived intangible assets and amortized over its useful life of 5 years.

&nbsp;&nbsp;&nbsp;&nbsp;**(o)** **Goodwill** 

Goodwill represents the excess of the consideration paid of an acquisition over the fair value of the net identifiable assets of the acquired subsidiaries at the date of acquisition. Goodwill is not amortized and is tested for impairment at least annually, or more often when circumstances indicate that impairment may have occurred. Goodwill is carried at cost less accumulated impairment. If impairment exists, goodwill is immediately written off to its fair value and the loss is recognized in the unaudited condensed consolidated statements of income. Impairment losses on goodwill are not reversed.

**SU GROUP HOLDINGS LIMITED NOTES TO THE UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS**

**NOTE 2. SIGNIFICANT ACCOUNTING POLICIES** (cont.)

The Group reviews the carrying value of intangible assets not subject to amortization, including goodwill, to determine whether impairment may exist annually or more frequently if events and circumstances indicate that it is more likely than not that an impairment has occurred. The Group has the opinion to assess qualitative factors to determine whether it is necessary to perform the two-step in accordance with ASC Topic 350, Intangibles — Goodwill and Other. If the Group believes, as a result of the qualitative assessment, that it is more likely than not that the fair value of the reporting unit is less than its carrying amount, the two-step quantitative impairment test described below is required. The first step compares the fair value of a reporting unit to its carrying amount, including goodwill. If the fair value of the reporting unit exceeds its carrying amount, goodwill is not considered to be impaired and the second step will not be required. If the carrying amount of the reporting unit exceeds its fair value, the second step compares the implied fair value of goodwill to the carrying value of a reporting unit's goodwill. The implied fair value of goodwill is determined in a manner similar to accounting for a business acquisition with the allocation of the assessed fair value determined in the first step to the assets and liabilities of the reporting unit. The excess of the fair value of the reporting unit over the amounts assigned to the assets and liabilities is the implied fair value of goodwill. Estimating fair value is performed by utilizing various valuation techniques, with the primary technique being discounted cash flows.

No impairment of goodwill was made for the six months ended March 31, 2024 and 2025.

&nbsp;&nbsp;&nbsp;&nbsp;**(p)** **Deferred offering expenses** 

The Group capitalizes certain underwriting, legal, professional, and other third-party fees that are directly related to the IPO and follow-on offering, as deferred offering expenses until such IPO and follow-on offering are consummated. Upon consummation of the IPO and follow-on offering, these fees will be recorded in the stockholders' equity as a reduction of additional paid-in capital generated from the offering. In the event the offering is aborted, deferred offering costs will be expensed. There were no deferred offering expenses as of September 30, 2024 and March 31, 2025.

&nbsp;&nbsp;&nbsp;&nbsp;**(q)** **Investment in key management insurance policy** 

The Group invests in a key management insurance policy which is a life insurance policy. The key management insurance policy is initially recognized at the amount of premium paid, and subsequently measured at end of each reporting period at the cash surrender value that could be realized under the insurance policy, which is primarily based on the guaranteed cash value stated on the annual statement from the insurance company. Changes to the cash surrender value at end of each reporting period will be recognized in other income or other expenses in the unaudited condensed consolidated statements of income. Any gain or loss on the derecognition of the investment in the event of death of the insured person, the surrender of the policy, or upon the maturity of the policy, will be recognized in other income or other expenses in the unaudited condensed consolidated statements of income.

&nbsp;&nbsp;&nbsp;&nbsp;**(r)** **Impairment for long-lived assets** 

Long-lived assets such as property and equipment are evaluated for impairment whenever events or changes in circumstances indicate that the carrying value of an asset may not be fully recoverable or that the useful life is shorter than that the Group had originally estimated. When these events occur, the Group evaluates the impairment for the long-lived asset by comparing the carrying value of the asset to an estimate of future undiscounted cash flows expected to be generated from the use of the asset and its eventual disposition. If the sum of the expected future undiscounted cash flows is less than the carrying value of the asset, the Group recognizes an impairment loss based on the excess of the carrying value of the asset over the fair value of the asset.

No impairment of long-lived assets was recognized for the six months ended March 31, 2024 and 2025.

&nbsp;&nbsp;&nbsp;&nbsp;**(s)** **Notes payables** 

Notes payables represent outstanding bills with bank, mainly consist of outstanding letter of credit, import bills acceptance, and trust receipt. Notes payables are non-interest bearing and generally mature within six months.

**SU GROUP HOLDINGS LIMITED NOTES TO THE UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS**

**NOTE 2. SIGNIFICANT ACCOUNTING POLICIES** (cont.)

&nbsp;&nbsp;&nbsp;&nbsp;**(t)** **Commitments and contingencies** 

In the normal course of business, the Group is subject to commitments and contingencies, including operating lease commitments, legal proceedings and claims arising out of its business that relate to a wide range of matters, such as government investigations and tax matters. The Group recognizes a liability for such contingency if it determines that it is probable that a loss will occur and a reasonable estimate of the loss can be made. The Group may consider many factors in making these assessments on liability for contingencies, including historical and the specific facts and circumstances of each matter.

&nbsp;&nbsp;&nbsp;&nbsp;**(u)** **Revenue recognition** 

The Group recognized its revenue under ASC Topic 606, Revenue from Contracts with Customers ("ASC 606"). The core principle underlying the revenue recognition of this Accounting Standards Update ("ASU") allows the Group to recognize revenue that represents the transfer of goods and services to customers in an amount that reflects the consideration to which the Group expects to be entitled in such exchange. This will require the Group to identify contractual performance obligations and determine whether revenue should be recognized at a point in time or over time, based on when control of goods and services transfers to a customer.

To achieve that core principle, the Group applies five-step model to recognize revenue from customer contracts. The five-step model requires the Group to (i) identify the contract with the customer; (ii) identify the performance obligations in the contract; (iii) determine the transaction price, including variable consideration to the extent that it is probable that a significant future reversal will not occur; (iv) allocate the transaction price to the respective performance obligations in the contract; and (v) recognize revenue when (or as) the Group satisfies the performance obligation.

The Group accounts for a contract with a customer when the contract is committed in writing, the rights of the parties, including payment terms, are identified, the contract has commercial substance, and consideration is probable of substantially collection.

The Group derives its revenues principally from providing security-related engineering services, and security guarding and screening services.

Revenue recognition policies for each type of revenue stream are as follows:

***<u>Security-related engineering services</u>***

The Group offers security-related engineering services to customers, and signs project contracts with them. 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.

The Group determines 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 the Group's commitment to transfer the product or service to the customer is separately identifiable from other obligations in the contract.

The Group has 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. The Group also determines that the related maintenance services are distinct and represent a separate performance obligation.

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. If the standalone selling price is not observable through past transactions, we estimate the standalone selling price taking into account available information such as internally approved pricing guidelines related to the performance obligations.

**SU GROUP HOLDINGS LIMITED NOTES TO THE UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS**

**NOTE 2. SIGNIFICANT ACCOUNTING POLICIES** (cont.)

The Group recognizes revenues when (or as) it satisfies the performance obligation by transferring a promised product and/or service to a customer. 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 are delivered and services are rendered, and accepted by the customer, there is no unfulfilled obligation that could affect the customers' acceptance of the products and services, and it is highly probable that a significant reversal will not occur. The Group recognizes revenue from the maintenance services ratably over the term of the arrangement, because the customer simultaneously receives and consumes the benefits provided by the Group.

In addition, the Group provides equipment leasing to the customers with use of dedicated security-related systems and equipment for contractual periods. The Group assesses the equipment leasing arrangements under ASC Topic 842, Leases ("ASC 842"). Revenues are recognized on a straight-line basis over the lease period, usually 2 to 3 years.

Customers related to security-related engineering services generally make the payment monthly or quarterly, in accordance with the contract terms, except for the payment related to the supply of security systems and products which is payable upon customer's acceptance.

***<u>Security guarding and screening services</u>***

The Group enters into contracts with customers to provide security guarding services, by dispatching security guards with corresponding abilities and qualifications on demand, to fulfill the customers' needs such as securing and guarding 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. The Group also offers security guarding services targeted at crowd coordination and management.

The Group also enters into contracts with customers to provide security screening services, by dispatching certified screeners to the premises of the customers. The Group's screening services include the detection of explosives, incendiary devices in air cargo consignment and detection of dangerous goods for safety purpose through the operation of threat detection system by the screeners.

The Group identifies one performance obligation in security guarding and screening services as the contract comprises of a series of distinct services that are substantially the same and have the same pattern of transfer to the customers, which is to provide security guards and screeners in accordance with the demand orders.

Since the customer simultaneously receives and consumes the benefits as the dispatched security guards and screeners perform the services, revenue from security guarding and screening services is recognized over the contractual term, starting from the date that the Group's services are made available to the customers. The contracts have a transaction price that includes a fixed consideration and a variable consideration that is charged based on ad-hoc overtime work demanded, less any deduction due to absence. The considerations are reconciled with customers monthly before billing. For variable considerations, the Group uses the practical expedient that allows it to recognize revenue in the amount to which the Group has a right to invoice.

In addition to the abovementioned security guarding and screening services, the Group also offers various types of related vocational training courses. The fees are usually billed and paid in advance before commencement of the training. Revenues are recognized at the course fees over time during the training course period, usually within several days.

**SU GROUP HOLDINGS LIMITED NOTES TO THE UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS**

**NOTE 2. SIGNIFICANT ACCOUNTING POLICIES** (cont.)

The following table disaggregates the Group's revenue for the six months ended March 31, 2024 and 2025:

---

| | | |
|:---|:---|:---|
|  | **For the Six Months Ended<br> March 31,** | **For the Six Months Ended<br> March 31,** |
|  | **2024** | **2025** |
|  | **HK$** | **HK$** |
| ***By revenue type*** |  |  |
| Security-related engineering services |  |  |
| &nbsp;&nbsp;&nbsp;Security systems and products and installation | 43719185 | 54123745 |
| &nbsp;&nbsp;&nbsp;Security systems maintenance services | 9861830 | 10941037 |
| &nbsp;&nbsp;&nbsp;Equipment leasing | 2628120 | 2321530 |
|  | 56209135 | 67386312 |
| Security guarding and screening services |  |  |
| &nbsp;&nbsp;&nbsp;Security guarding services | 29206933 | 33454343 |
| &nbsp;&nbsp;&nbsp;Screening services | 4740771 | 5330615 |
| &nbsp;&nbsp;&nbsp;Related vocational training services | 1688776 | 1741110 |
|  | 35636480 | 40526068 |
| &nbsp;&nbsp;&nbsp;Total | 91845615 | 107912380 |
| ***By timing of revenue recognition*** |  |  |
| Security-related engineering services |  |  |
| &nbsp;&nbsp;&nbsp;Goods and services transferred at a point in time | 43719185 | 54123745 |
| &nbsp;&nbsp;&nbsp;Services rendered over time | 12489950 | 13262567 |
|  | 56209135 | 67386312 |
| Security guarding and screening services |  |  |
| &nbsp;&nbsp;&nbsp;Goods and services transferred at a point in time |  |  |
| &nbsp;&nbsp;&nbsp;Services rendered over time | 35636480 | 40526068 |
|  | 35636480 | 40526068 |
| &nbsp;&nbsp;&nbsp;Total | 91845615 | 107912380 |

---

***Contract balances***

Timing of revenue recognition may differ from the timing of invoicing to the customers. Trade receivables represent amounts invoiced when the Group has satisfied its performance obligations and has the unconditional right to payment. Contract assets are primarily unbilled trade receivables that are conditional on something other than the passage of time, and the Group reviews the contract assets for impairment when events or changes in circumstances indicate that the carrying value may not be recoverable.

As of September 30, 2024 and March 31, 2025, contracts assets amounted to HK$6,443,947 and HK$18,038,502, respectively. HK$5,761,309, or 31.9%, of the contract assets as of March 31, 2025 have been subsequently realized as of the date of this report, and the remaining balance is expected to be utilized within 1 year from March 31, 2025. Provision was made for credit loss of contract assets for the six months ended March 31, 2024 were HK$283,000. Reversal of provision was made for credit loss of contract assets for the six months ended March 31, 2025 were HK$110,000.

If a customer pays consideration or the Group has a right to an amount of consideration that is unconditional, before the Group transfers the promised goods or services to the customer, the Group presents the amount as a contract liability when the payment is received or a receivable is recorded (whichever is earlier). A contract liability is the Group's obligation to transfer the promised goods to a customer for which the Group has received consideration (or an amount of consideration is due) from the customer.

Contract liabilities were HK$27,801,257 and HK$15,020,377 as of September 30, 2024, and March 31, 2025, respectively. Due to the generally short-term duration of the contracts, the majority of the performance obligations are satisfied in the following reporting period. Revenue recognized during the six months ended March 31, 2025, respectively, relating to contract liabilities as of October 1, 2024 was HK$22,285,220.

**SU GROUP HOLDINGS LIMITED**

**NOTES TO THE UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS**

**NOTE 2. SIGNIFICANT ACCOUNTING POLICIES** (cont.)

**(v)** **Cost of revenues** 

Cost of revenues mainly consists of cost of goods sold, employee benefit expense of direct labor, depreciation, subcontracting fee, transportation fee, travelling expenses, freight charge, course expenses, sample, uniform, insurance for direct labor, and write-down of obsolete inventories.

**(w)** **Selling, general and administrative expenses** 

Selling, general and administrative expenses mainly represented employee benefit expense of directors, officers, and sales and administrative staff, rental, depreciation, legal and professional service fees, and other corporate expenses. Research and development expenses relating to improving development efficiency and quality of the Group's products and services are expensed as incurred. No research and development expenses were recognized for the six months ended March 31, 2024 and 2025.

**(x)** **Employee benefits** 

Employee benefits include employees' leave entitlements, bonus entitlements, and pension obligations, other than those expenses arising from basic salaries as a result of services rendered by the Group's employees.

Employees' entitlements to annual leave are recognized when they accrue to employees. A provision is made for the estimated liability for annual leave as a result of services rendered by the employees up to the end of the reporting period. Employee entitlements to sick leave and maternity or paternity leave are not recognized until the time of leave.

Bonus entitlements are recognized as a liability at its expected cost when the Group has a present legal or constructive obligation as a result of services rendered by employees and a reliable estimate of the obligation can be made. Liabilities for bonus are expected to be settled within twelve months and are measured at the amounts expected to be paid when they are settled.

Regarding pension obligations, the Group participates in defined contribution retirement benefit plans which are available to all relevant employees in Hong Kong. These plans are generally funded through payments to schemes established by publicly or privately administered funds. A defined contribution plan is a pension plan under which the Group pays contributions on mandatory, contractual or voluntary basis into a separate entity. The Group has no legal or constructive obligations to pay further contributions if the fund does not hold sufficient assets to pay all employees the benefits relating to employee services in the current period. The Group's contributions to the defined contribution plans are expensed.

**(y)** **Leases** 

Classification for leases under which the Group is a lessor is evaluated at lease commencement and leases not classified as sales-type leases or direct financing leases are classified as operating leases. 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. Additionally, leasing an asset so specialized that it is not deemed to have any value to the Group at the end of the lease term may also result in classification as a sales-type lease. 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.

Classification for leases under which the Group is a lessee is evaluated at lease commencement as finance or operating leases. 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 the Group is 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. Leases that do not qualify as finance leases are deemed to be operating leases. At lease commencement the Group records a lease liability which is measured as the present value of the lease payments and a right-of-use ("ROU") asset which is measured as the amount of the lease liability and any initial direct costs incurred. The Group applies 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, the Group uses a discount rate reflective of the incremental borrowing rate. In the unaudited condensed consolidated statements of income, operating leases are expensed through rent expense while financing leases are expensed through amortization and interest expense.

**SU GROUP HOLDINGS LIMITED NOTES TO THE UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS**

**NOTE 2. SIGNIFICANT ACCOUNTING POLICIES** (cont.)

*Leases — the Group as lessor*

The Group's lease arrangements are all operating leases which typically have a maturity of 2 to 3 years. Initial direct costs incurred by the Group in negotiating and arranging operating leases are added to the carrying amount of the leased assets and recognized as an expense in the unaudited condensed consolidated statements of income over the lease term on the same basis as equipment leasing income. See Note 2(u) for the accounting policy for revenue from equipment leasing.

*Leases — the Group as lessee*

The Group owns 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. Under ASC 842, the Group as a lessee is 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.

At the commencement date, the Group recognizes 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, the Group's incremental borrowing rate for the same term as the underlying lease. 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. No impairment of ROU assets was recognized for the six months ended March 31, 2024 and 2025.

The Group elected the practical expedient to account for leases with lease terms which end within 12 months of the initial date of application as short-term leases. The lease payments for short-term leases are recognized on a straight-line basis over the lease term and variable lease payments in the period in which the obligation for those payments is incurred.

**(z)** **Income tax** 

Income tax comprises current and deferred tax. Income tax relating to items recognized outside profit or loss is recognized outside profit or loss, either in other comprehensive income or directly in equity.

Current tax is provided on the basis of net income for financial reporting purposes, adjusted for income and expense items which are not assessable or deductible for income tax purposes, in accordance with the regulations of the relevant tax jurisdictions. It is calculated using tax rates that have been enacted or substantively enacted at end of the reporting period.

Deferred tax is accounted for using the asset and liability method in respect of temporary differences arising from differences between the carrying amount of assets and liabilities in the unaudited condensed consolidated financial statements and the corresponding tax basis used in the computation of assessable tax profit. In principle, deferred tax liabilities are recognized for all taxable temporary differences. Deferred tax assets are recognized to the extent that it is probable that taxable profit will be available against which deductible temporary differences can be utilized. Deferred tax is calculated using tax rates that are expected to apply to the period when the asset is realized or the liability is settled. Deferred tax is charged or credited in the profit or loss, except when it is related to items credited or charged directly to equity, in which case the deferred tax is also dealt with in equity. Deferred tax assets are reduced by a valuation allowance when, in the opinion of management, it is more likely than not that some portion or all of the deferred tax assets will not be realized.

An uncertain tax position is recognized as a benefit only if it is "more likely than not" that the tax position would be sustained in a tax examination, with a tax examination being presumed to occur. The amount recognized is the largest amount of tax benefit that is greater than 50% likely of being realized on examination. For tax positions not meeting the "more likely than not" test, no tax benefit is recorded. Penalties and interests incurred related to underpayment of income tax are classified as income tax expense in the period incurred. For the six months ended March 31, 2024 and 2025, no penalties and interests were incurred related to underpayment of income tax. Hong Kong Profits Tax returns filed in 2018 to 2024 are subject to examination by any applicable tax authorities.

**SU GROUP HOLDINGS LIMITED NOTES TO THE UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS**

**NOTE 2. SIGNIFICANT ACCOUNTING POLICIES** (cont.)

**(aa)** **Government grants** 

Government grants are recognized at their fair values when there is reasonable assurance that the grant will be received and the Group will comply with all attached conditions. Grants that compensate the Group for expenses incurred are recognized in other income on the unaudited condensed consolidated statements of income on a systematic basis in the same periods in which the expenses are recognized. When the grant relates to an asset, the fair value is deducted against the carrying amount of the assets. The Group recognized government grants of nil and HK$9,824 for the six months ended March 31, 2024 and 2025, respectively.

**(ab)** **Earnings per share** 

Earnings per share ("EPS") is computed by dividing net income by the weighted average number of ordinary shares outstanding. Diluted EPS presents the dilutive effect on a per share basis of the potential ordinary shares (e.g., convertible securities, options and warrants) as if they had been converted at the beginning of the periods presented, or issuance date, if later. Potential ordinary shares that have an anti-dilutive effect (i.e., those that increase income per share or decrease loss per share) are excluded from the calculation of diluted EPS. For the six months ended March 31, 2024 and 2025, there were no dilutive shares.

**(ac)** **Representative's Warrants** 

Upon the closing of IPO in January 2024, the Company issued to the representative of the underwriter warrants for 62,500 ordinary shares and are exercisable on a cashless basis. The Company accounts for warrants as either equity-classified or liability-classified instruments based on an assessment of the warrant's specific terms and applicable authoritative guidance in Financial Accounting Standards Board ("FASB") Accounting Standards Codification ASC 480, Distinguishing Liabilities from Equity and ASC 815, Derivatives and Hedging. The Company accounts for its warrants as equity that meet all of the criteria (i) require physical settlement or net-share settlement or (ii) give the Company a choice of net-cash settlement or settlement in its own shares (physical settlement or net-share settlement), the warrants are required to be recorded as a component of additional paid-in capital at the time of issuance and subsequent changes in fair value are not recognized as long as the warrants continue to be classified as equity.

**(ad)** **Share-based Compensation** 

Share-based payment transactions with employees are measured based on the grant-date fair value of the equity instrument. For the awards with graded vesting, that is with multiple vesting dates and with only service conditions, the Group elects to recognize the awards on a straight-line basis for the entire award (that is, over the requisite service period of the last separately vesting portion of the award). The amount of compensation cost recognized at any date is at least equal the portion of the grant-date value of the award that is vested at that date. For grant of restricted shares, the fair value of share-based awards was determined based on the market price of the Group's common stock at the date of grant. The share-based compensation is recognized as expense under selling, general and administrative expenses on the unaudited condensed consolidated statements of income. The Group elects to recognize forfeitures when they occur.

**(ae)** **Segment reporting** 

The Group has organized its continuing operations into two operating segments. The segments reflect the way the Group evaluates its business performance and manages its operations by the Group's chief operating decision maker ("CODM") for making decisions, allocating resources and assessing performance. The Group's CODM has been identified as the chief executive officer, who reviews consolidated results when making decisions about allocating resources and assessing performance of the Group.

The Group has two reportable segments from continuing operations, including security-related engineering services business and security guarding and screening services business. The Group considers a "management approach" concept as the basis for identifying reportable segments. The management approach is based on the way that management organizes the segments within the Group for making operating decisions, allocating resources, and assessing performance. The Group's reportable segments are strategic business units that offer different services and are managed separately because each business requires different technology and marketing strategies. As the Group's long-lived assets are substantially located in the Hong Kong, no geographical segments are presented.

**(af)** **Recently issued accounting pronouncements** 

In November 2023, the FASB issued ASU No. 2023-07, Segment Reporting (Topic 280) Improvements to Reportable Segment Disclosures, which requires that an entity report segment information in accordance with Topic 280, Segment Reporting. The amendment in the ASU is intended to improve reportable segment disclosure requirements primarily through enhanced disclosures about significant segment expenses. The amendments in this Update are effective for fiscal years beginning after December 15, 2023, and interim periods within fiscal years beginning after December 15, 2024. The Company is currently evaluating the impact of the new standard on its unaudited condensed consolidated financial statements which is expected to result in enhanced disclosures.

**SU GROUP HOLDINGS LIMITED NOTES TO THE UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS**

**NOTE 2. SIGNIFICANT ACCOUNTING POLICIES** (cont.)

In December 2023, the FASB issued ASU No. 2023-09, Income Taxes (Topic 740) Improvements to Income Tax Disclosures, which requires that an entity, on an annual basis, disclose additional income tax information, primarily related to the rate reconciliation and income taxes paid. The amendment in the ASU is intended to enhance the transparency and decision usefulness of income tax disclosures. The amendments in this Update are effective for annual periods beginning after December 15, 2024. The Company is currently evaluating the impact of the new standard on its unaudited condensed consolidated financial statements which is expected to result in enhanced disclosures.

The Group does not believe other recently issued but not yet effective accounting standards, if currently adopted, would have a material effect on the unaudited condensed consolidated balance sheets, unaudited condensed consolidated statements of income, and unaudited condensed consolidated statements of cash flows.

**NOTE 3. TRADE RECEIVABLES, NET**

Trade receivables, net consisted of the following:

---

| | | |
|:---|:---|:---|
|  | **As of<br> September 30,**<br>**2024** | **As of<br> March 31,**<br>**2025** |
|  | **HK$** | **HK$** |
| Trade receivables | 27928480 | 31242732 |
| Less: allowance for credit loss | (6077000) | (6390000) |
|  | 21851480 | 24852732 |

---

The Group recorded provision for allowance for credit loss of trade receivables of HK$64,000 and HK$313,000 for the six months ended March 31, 2024 and 2025, respectively.

Movement of provision for allowance for credit loss of trade receivables is as follows:

---

| | | |
|:---|:---|:---|
|  | **For the Six Months Ended<br> March 31,** | **For the Six Months Ended<br> March 31,** |
|  | **2024** | **2025** |
|  | **HK$** | **HK$** |
| Balance at beginning of the period | 8347208 | 6077000 |
| Retrospective adjustment upon adoption of ASC 326 | 947792 |  |
| Provision for the period | 64000 | 313000 |
| Balance at end of the period | 9359000 | 6390000 |

---

**NOTE 4. CONTRACT ASSETS, NET**

Contract assets, net consisted of the following:

---

| | | |
|:---|:---|:---|
|  | **As of<br> September 30,**<br>**2024** | **As of <br> March 31,**<br>**2025** |
|  | **HK$** | **HK$** |
| Contract assets | 7193947 | 18678502 |
| Less: allowance for credit loss | (750000) | (640000) |
|  | 6443947 | 18038502 |

---

The Group recorded provision for allowance for credit loss of contract assets of HK$283,000 for the six months ended March 31, 2024. The Group recorded reversal of provision for allowance for credit loss of contract assets of HK$110,000 for the six months ended March 31, 2025.

**SU GROUP HOLDINGS LIMITED NOTES TO THE UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS**

**NOTE 4. CONTRACT ASSETS, NET** (cont.)

Movement of provision for allowance for credit loss of contract assets is as follows:

---

| | | |
|:---|:---|:---|
|  | **For the Six Months Ended<br> March 31,** | **For the Six Months Ended<br> March 31,** |
|  | **2024** | **2025** |
|  | **HK$** | **HK$** |
| Balance at beginning of the period | 307040 | 750000 |
| Retrospective adjustment upon adoption of ASC 326 | 382960 |  |
| Provision (Reversal) for the period | 283000 | (110000) |
| Balance at end of the period | 973000 | 640000 |

---

**NOTE 5. INVENTORIES**

Inventories consisted of the following:

---

| | | |
|:---|:---|:---|
|  | **As of<br> September 30,**<br>**2024** | **As of <br> March 31,**<br>**2025** |
|  | **HK$** | **HK$** |
| Spare parts and other materials | 3539223 | 4333059 |
| Work-in-progress | 44074158 | 25579918 |
|  | 47613381 | 29912977 |

---

**NOTE 6. PREPAID EXPENSES AND OTHER ASSETS**

Prepaid expenses and other assets consisted of the following:

---

| | | |
|:---|:---|:---|
|  | **As of<br> September 30,**<br>**2024** | **As of <br> March 31,**<br>**2025** |
|  | **HK$** | **HK$** |
| Prepaid marketing expenses – current (A) | 3286530 |  |
| Prepaid marketing expenses – non-current (A) | 1917143 |  |
| Prepayment for purchase of intangible assets – non-current (B) | 2000000 | 2000000 |
| Other prepaid expenses – current (C) | 828973 | 1683342 |
| Other prepaid expenses – non-current |  | 400000 |
| Deposits – current (D) | 823201 | 809100 |
| Deposits – non-current (D) | 545680 | 545680 |
| Others | 75172 | 40500 |
|  | 9476699 | 5478622 |
| Prepaid expenses and other assets – current | 5013876 | 2532942 |
| Prepaid expenses and other assets – non-current | 4462823 | 2945680 |
|  | 9476699 | 5478622 |

---

(A) Mainly related to marketing activities
which are used to promote and market the Group's brand name as steps to expand the business.

(B) Mainly consist of fees prepaid
for system development which are used to improve internal working efficiency. The service provider was reviewing the enterprise resource
planning system being used by the Group, and will propose improvement suggestion.

(C) Mainly consist of prepayments
for insurance including directors and officers liability insurance and various insurance for daily operations such as contractors'
all risk insurance, office package insurance, and group medical insurance.

(D) Deposits consist of deposits paid
to utility service providers such as power and water supplies, landlords of the leased properties, and management offices of the leased
or owned properties. The deposits are refundable upon termination or expiry of corresponding services and rental.

No provision was made for credit loss of other assets for the six months ended March 31, 2024 and 2025.

**SU GROUP HOLDINGS LIMITED NOTES TO THE UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS**

**NOTE 7. PROPERTY AND EQUIPMENT, NET**

Property and equipment, net consisted of the following:

---

| | | |
|:---|:---|:---|
|  | **As of<br> September 30,**<br>**2024** | **As of <br> March 31,**<br>**2025** |
|  | **HK$** | **HK$** |
| Building | 565000 | 565000 |
| Leasehold improvements | 1009886 | 1009886 |
| Motor vehicles | 1435700 | 2051267 |
| Furniture, fixtures and equipment | 60400 |  |
| Equipment for leasing | 14510730 | 9281580 |
| Less: accumulated depreciation | (8695481) | (5941080) |
| Property and equipment, net | 8886235 | 6966653 |

---

Depreciation expenses were HK$869,104 and HK$905,575 for the six months ended March 31, 2024 and 2025, respectively.

Losses on disposal of property and equipment were HK$636,289 and HK$1,772,107 for the six months ended March 31, 2024 and 2025, respectively, mainly due to certain X-ray machines disposed upon the termination of rental equipment agreements during the six months ended March 31, 2024 and 2025.

No impairment loss was made for property and equipment for the six months ended March 31, 2024 and 2025.

**NOTE 8. INTANGIBLE ASSETS, NET**

Intangible assets, net consisted of the following:

---

| | | |
|:---|:---|:---|
|  | **As of<br> September 30,**<br>**2024** | **As of <br> March 31,**<br>**2025** |
|  | **HK$** | **HK$** |
| Computer software | 652000 | 652000 |
| Less: accumulated amortization | (383500) | (420700) |
| Intangible assets, net | 268500 | 231300 |

---

Amortization expenses were HK$42,500 and HK$37,200 for the six months ended March 31, 2024 and 2025, respectively.

Future estimated amortization expenses are disclosed as follows:

---

| | |
|:---|:---|
| **Twelve months ending March 31,** | **HK$** |
| 2026 | 74400 |
| 2027 | 62316 |
| 2028 | 45400 |
| 2029 | 45400 |
| 2030 | 3784 |
|  | 231300 |

---

No impairment loss was made for intangible assets for the six months ended March 31, 2024 and 2025.

**SU GROUP HOLDINGS LIMITED NOTES TO THE UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS**

**NOTE 9. INVESTMENT IN KEY MANAGEMENT INSURANCE POLICY**

The Group entered into a key management insurance policy for the founder to secure that the operation of the Group will not be affected by the death and loss of position of the founder. The fair value of the investment in key management insurance policy is determined at end of each reporting period at the cash surrender value that could be realized under the insurance policy, which is primarily based on the guaranteed cash value stated on the annual statement from the insurance company. The fair value measurement of the investment in key management insurance policy has been categorized as Level 3 based on the inputs to the valuation technique used and is positively correlated to the surrender cash value.

---

| | | |
|:---|:---|:---|
|  | **For the Years Ended<br> September 30,**<br>**2024** | **As of <br> March 31,**<br>**2025** |
|  | **HK$** | **HK$** |
| Balance at beginning of the year | 1157520 | 1157520 |
| Change in fair value recognized in the unaudited condensed consolidated statements of income (A) |  | 142380 |
| Balance at end of the year | 1157520 | 1299900 |

---

(A) The change in fair value was not
material for the year ended September 30, 2024.

**NOTE 10. LEASES**

 ****

***The Group as lessor***

The Group acts as a lessor of dedicated security-related systems and equipment, and recorded the income from the leases as revenues in the unaudited condensed consolidated statements of income. Equipment leasing income was HK$2,628,120 and HK$2,321,530 for the six months ended March 31, 2024 and 2025, respectively.

The leases are classified as operating leases, which have remaining terms of 1 to 35 months. The equipment leasing income is recognized on a straight-line basis over the lease term.

Assets leased under operating leases are included in property and equipment, net in the unaudited condensed consolidated balance sheets and depreciated over its estimated useful life. It had a cost of HK$14,510,730 and HK$9,281,580 as of September 30, 2024 and March 31, 2025, respectively, and accumulated depreciation associated with these assets was HK$6,750,528 and HK$4,027,120 as of September 30, 2024 and March 31, 2025, respectively. Depreciation expense amounted to HK$784,994 and HK$711,225 for the six months ended March 31, 2024 and 2025, respectively.

There were no variable lease conditions or purchase options.

 ****

***The Group as lessee***

The Group leases land use rights in Hong Kong, and leases training center, offices, workshops, warehouse, and carparking spaces under operating leases with terms ranging from 1 to 4 years. For the lease of land, the Group signed an agreement on November 8, 2007 for leasing the land use rights associated with a parcel of land, on which the Group's workshop is located. Payments were made upfront to obtain the leased land from the owner with a lease period of 55 years.

The Group considers those termination options that are reasonably certain not to be exercised in the determination of the lease term and initial measurement of ROU assets and lease liabilities. Leases with initial term of 12 months or less are short-term leases not recorded on the unaudited condensed consolidated balance sheets. Lease expenses for short-term leases are recognized on a straight-line basis over the lease term.

The Group's lease agreements do not contain any material residual value guarantees or material restrictive covenants.

**SU GROUP HOLDINGS LIMITED NOTES TO THE UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS**

**NOTE 10. LEASES** (cont.)

The table below presents the operating leases related assets and liabilities recorded on the unaudited condensed consolidated balance sheets:

---

| | | |
|:---|:---|:---|
|  | **As of<br> September 30,**<br>**2024** | **As of <br> March 31,**<br>**2025** |
|  | **HK$** | HK$ |
| Operating lease ROU assets, net | 5496985 | 4543234 |
| Operating lease liabilities – current | 1935187 | 1580205 |
| Operating lease liabilities – non-current | 3004974 | 2380571 |
|  | 4940161 | 3960776 |

---

The weighted average remaining lease terms and discount rates for the operating leases were as follows:

---

| | | |
|:---|:---|:---|
|  | **As of<br> September 30,**<br>**2024** | **As of <br> March 31,**<br>**2025** |
| Weighted average remaining lease term (years) | 8.28 | 9.01 |
| Weighted average discount rate | 6.20% | 6.15% |

---

A summary of lease expenses recognized in the Group's unaudited condensed consolidated statements of income and supplemental cash flow information related to operating leases is as follows:

---

| | | |
|:---|:---|:---|
|  | **For the Six Months Ended<br> March 31,** | **For the Six Months Ended<br> March 31,** |
|  | **2024** | **2025** |
|  | **HK$** | **HK$** |
| Operating lease expenses excluding short-term lease expense | 483000 | 1097367 |
| Operating cash flows used in operating leases | 471900 | 1123000 |
| Short-term lease cost | 561576 | 209719 |

---

The following is a schedule, by year, of maturities of operating lease liabilities as of March 31, 2025:

---

| | |
|:---|:---|
| **Twelve months ended March 31,** | **HK$** |
| 2026 | 1778000 |
| 2027 | 1176000 |
| 2028 | 1176000 |
| 2029 | 196000 |
| Total lease payments | 4326000 |
| Less: imputed interest | (365224) |
| Present value of operating lease liabilities | 3960776 |
| Less: operating lease liabilities – non-current | (1580205) |
| Operating lease liabilities – current | 2380571 |

---

**SU GROUP HOLDINGS LIMITED NOTES TO THE UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS**

**NOTE 11. OTHER PAYABLES**

Other payables consisted of the following:

---

| | | |
|:---|:---|:---|
|  | **As of<br> September 30,**<br>**2024** | **As of <br> March 31,**<br>**2025** |
|  | **HK$** | **HK$** |
| Rental deposit received – current | 1431999 | 1305069 |
| Rental deposit received – non-current | 1340016 | 1362306 |
| Accrued expenses | 2067508 | 131914 |
|  | 4839523 | 2799289 |
| Other payables – current | 3499507 | 1436983 |
| Other payables – non-current | 1340016 | 1362306 |
|  | 4839523 | 2799289 |

---

**NOTE 12. ACCRUED PAYROLL AND WELFARE**

Accrued payroll and welfare consisted of the following:

---

| | | |
|:---|:---|:---|
|  | **As of<br> September 30,**<br>**2024** | **As of <br> March 31,**<br>**2025** |
|  | **HK$** | **HK$** |
| Employees | 7840455 | 7076380 |
| Accrued paid time leave | 741481 | 851000 |
| Mandatory provident fund | 459006 | 494364 |
|  | 9040942 | 8421744 |

---

**NOTE 13. BANKING FACILITIES**

A subsidiary of the Group entered into a banking facility agreement with CMB Wing Lung Bank Limited, pursuant to which the subsidiary is entitled to trade facilities of HK$20.0 million and HK$9.0 million as of September 30, 2024, and March 31, 2025, respectively. The facilities were secured by a property owned by the subsidiary and a property jointly owned by the founder of the Company and his family member, and jointly guaranteed by the founder of the Company and his family member as of September 30, 2024 (see Note 21). The facilities are secured by a property owned by the subsidiary, a deposit placed in the bank by the subsidiary or the Company, and a corporate guarantee by the Company as of March 31, 2025. The banking facilities include letter of credit, trust receipt, invoice financing, letter of guarantee, and corporate credit card facilities. As of September 30, 2024 and March 31, 2025, the Group had utilized HK$2,355,023 and HK$631,973, respectively. The unutilized banking facilities were HK$17,644,977 and HK$8,368,027 as of September 30, 2024 and March 31, 2025, respectively.

**SU GROUP HOLDINGS LIMITED NOTES TO THE UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS**

**NOTE 14. EQUITY**

**Ordinary shares**

The Company's authorized share capital is HK$7,500,000 divided into 750,000,000 ordinary shares of par value HK$0.01 each. On March 11, 2021 and April 16, 2021, the Company issued 1 and 949 ordinary shares to its then shareholder, respectively. With the effect of resolutions passed by board of directors on February 27, 2023 and June 20, 2023, 9,000 and 11,990,000 ordinary shares were issued with a par value of HK$0.01, respectively. The issuances were considered as being part of the Reorganization of the Group and was retrospectively applied as if the transaction occurred at beginning of the period presented.

On April 29, 2021, the Company entered into a subscription agreement (the "Subscription Agreement") with its existing shareholder and two investors (together the "Subscribers"). Pursuant to the Subscription Agreement, the Company has allotted and issued 50 shares in aggregate to the Subscribers at a cash consideration of HK$160,000 per ordinary share. A total of HK$8.0 million was received by the Company.

On January 26, 2024, the Company consummated the initial public offering of 1,250,000 ordinary shares at a price of US$4.00 per share, generating gross proceeds of US$5.0 million before deducting underwriting discounts and commissions and offering expenses totaling HK$14,713,303. The net proceeds from the initial public offering were HK$24,286,697. The Company have granted a 30-day option to the representatives of the underwriters to purchase up to an additional 187,500 ordinary shares (the "over-allotment"). The over-allotment was not exercised after the 30-day period.

On April 26, 2024, the Company entered into a service agreement (the "Service Agreement") with Chengdu Xiaohou Information Technology Limited (the "Service Provider"). Pursuant to the Service Agreement, the Company has allotted and issued 397,500 shares to the Service Provider as a service fee for providing market research consultancy services.

On December 9, 2024, the Company granted restricted shares of in aggregate 600,000 pursuant to an equity incentive plan (the "2024 Plan") (Note 18), of which 200,000 were vested on December 9, 2024, 200,000 will be vested on December 9, 2025, and 200,000 will be vested on December 9, 2026. The fair value of the 600,000 restricted shares as of December 9, 2024 was US$936,000. 200,000 restricted shares have been issued during the six months ended March 31, 2025.

**SU GROUP HOLDINGS LIMITED NOTES TO THE UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS**

**NOTE 14. EQUITY** (cont.)

**Shares subscription receivables**

Shares subscription receivables represent the receivables for the issuance of ordinary shares of the Company and is reported as a deduction of equity and presented on a retroactive basis. It has no payment terms nor any interest receivable accrual. The shares subscription receivables of HK$90 as of September 30, 2024 was fully settled during the six months ended March 31, 2025.

**Representative's Warrants**

Upon the closing of IPO in January 2024, the Company issued to the representative of the underwriter warrants to purchase 62,500 of the Company's ordinary shares (the "Representative's Warrants"). The Representative's Warrants have an exercise price equal to US$4.00 per warrant and are exercisable at any time or from time to time beginning July 23, 2024 and ending at or before 5:00 p.m., Eastern time, January 23, 2029. The Warrant are also exercisable on a cashless basis. None of the Representative's Warrants were exercised as of September 30, 2024 and March 31, 2025.

The fair value of the Representative's Warrants, using the Black-Scholes-Merton Model on the date of issuance was US$116,815. The key inputs into the Black-Scholes-Merton Model variables were as follows at measurement date:

---

| | | |
|:---|:---|:---|
|  | **January 26,<br> 2024** | **January 26,<br> 2024** |
| Stock price | US$ | 3.52 |
| Risk-free interest rate |  | 4.04% |
| Volatility |  | 62.34% |
| Exercise price | US$ | 4.00 |
| Dividend yield |  |  |

---

The following table summarizes the Company's activities and status of the Representative's Warrants:

---

| | | | | |
|:---|:---|:---|:---|:---|
|  | **Number of<br> Warrant** | **Weighted<br> Average<br> Exercise Price** | **Weighted<br> Average<br> Exercise Price** | **Weighted<br> Average<br> Remaining<br> Term<br> (Years)** |
| Outstanding as of September 30, 2024 | 62500 | US$ | 4.00 | 4.3 |
| Exercised |  |  |  |  |
| Forfeited or expired |  |  |  |  |
| Outstanding as of March 31, 2025 | 62500 | US$ | 4.00 | 3.8 |

---

**NOTE 15. CAPITAL CONTRIBUTIONS**

During the six months ended March 31, 2024 and 2025, the Company's shareholder, Chan Ming Dave, made capital contributions of HK$762,688 and nil, respectively, to the Company.

**NOTE 16. DIVIDEND DECLARATION**

During the six months ended March 31, 2024 and 2025, no dividends were declared by the Group to its shareholders

**SU GROUP HOLDINGS LIMITED NOTES TO THE UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS**

**NOTE 17. INCOME TAX**

 ****

***Cayman Islands***

Under the current laws of the Cayman Islands, the Group is not subject to tax on income or capital gains. Additionally, upon payments of dividends to the shareholders, no withholding tax will be imposed.

 ****

***British Virgin Islands***

Under the current laws of the BVI, an entity incorporated in the BVI are not subject to tax on income or capital gains.

 ****

***Hong Kong***

In accordance with the relevant tax laws and regulations in Hong Kong, a company with trading activities in Hong Kong is subject to Profits Tax within Hong Kong at the applicable tax rate on its assessable profits. In March 2018, the Hong Kong government introduced a two-tiered Profits Tax rate regime by enacting the Inland Revenue (Amendment) (No.3) Ordinance 2018 (the "Ordinance"). Under the two-tiered Profits Tax rate regime, the first HK$2.0 million of assessable profits of qualifying entity is taxed at 8.25% and the remaining assessable profits at 16.5%. The Ordinance is effective from the year of assessment 2018/19. According to the relevant policy, if no election of the qualifying entity has been made, the whole of the taxpaying entity's assessable profits will be chargeable to the Profits Tax at the rate of 16.5%. The Group had elected Shine Union to have its qualifying profits of HK$2.0 million charged at half rate. Under the current laws of Hong Kong, payments of dividends are not subject to withholding tax.

 ****

***Uncertain tax positions***

The Group evaluates each uncertain tax position (including the potential application of interest and penalties) based on the technical merits, and measure the unrecognized benefits associated with the tax positions. As of September 30, 2024 and March 31, 2025, the Group did not have any significant unrecognized uncertain tax positions and the Group does not believe that its unrecognized tax benefits will change over the next twelve months. For the six months ended March 31, 2024 and 2025, the Group did not have any significant interest or penalties related to potential underpaid income tax expenses. The Group's major tax jurisdiction is Hong Kong. Under relevant Hong Kong tax laws, tax case is normally subject to investigation by the tax authority for up to 6 years of assessment prior to the current year of assessment, if in a case of fraud or willful evasion, then the investigation can be extended to cover 10 years of assessment.

Income tax expenses consisted of the following:

---

| | | |
|:---|:---|:---|
|  | **For the Six Months Ended<br> March 31,** | **For the Six Months Ended<br> March 31,** |
|  | **2024** | **2025** |
|  | **HK$** | **HK$** |
| Current income tax expenses | 1322227 | 795535 |
| Deferred income tax benefit | (346058) | (435768) |
| Income tax expenses | 976169 | 359767 |

---

Income (loss) before income tax expenses for the six months ended March 31, 2024 and 2025 is attributable to the following geographic locations:

---

| | | |
|:---|:---|:---|
|  | **For the Six Months Ended<br> March 31,** | **For the Six Months Ended<br> March 31,** |
|  | **2024** | **2025** |
|  | **HK$** | **HK$** |
| Hong Kong | 7124061 | 4514297 |
| Foreign | 3975977 | (8681998) |
| Income before income tax expenses | 11100038 | (4167701) |

---

**SU GROUP HOLDINGS LIMITED NOTES TO THE UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS**

**NOTE 17. INCOME TAX** (cont.)

The tax on the Group's income before income tax expenses differs from the theoretical amount that would arise using the enacted tax rate of the companies comprising the Group can be reconciled as follows:

---

| | | |
|:---|:---|:---|
|  | **For the Six Months Ended March 31,** | **For the Six Months Ended March 31,** |
|  | **2024** | **2025** |
|  | **HK$** | **HK$** |
| Income tax expenses calculated at Hong Kong Profits Tax rate | 1831508 | (687672) |
| Income not taxable for tax purposes | (1268395) | (104596) |
| Expenses not deductible for tax purposes (A) | 598351 | 11082 |
| Prior year true up | (20295) | (197255) |
| Effect of preferential tax rates in Hong Kong | (165000) | (165000) |
| Impact of different tax rates in other jurisdictions |  | 1503208 |
| Income tax expenses | 976169 | 359767 |

---

(A) Mainly relate to non-deductible
listing expenses.

Deferred tax assets and liabilities, net consisted of the following:

---

| | | |
|:---|:---|:---|
|  | **As of<br> September 30,**<br>**2024** | **As of <br> March 31,**<br>**2025** |
|  | **HK$** | **HK$** |
| Deferred tax assets: |  |  |
| Decelerated tax depreciation of property and equipment | 18447 |  |
| Provision for allowance for credit loss | 1126455 | 1159950 |
| Operating lease liabilities | 770659 | 653528 |
| Total deferred tax assets | 1915561 | 1813478 |
| Net off against deferred tax liabilities | (1707859) | (1601725) |
| Net deferred tax assets | 207702 | 211753 |
| Deferred tax liabilities: |  |  |
| Accelerated tax depreciation of property and equipment | (1368917) | (948197) |
| Operating lease ROU assets, net | (770659) | (653528) |
| Total deferred tax liabilities | (2139576) | (1601725) |
| Net off against deferred tax assets | 1707859 | 1601725 |
| Net deferred tax liabilities | (431717) |  |

---

A reconciliation of the movement in the beginning and ending net deferred tax assets (liabilities) is as follows:

---

| | | |
|:---|:---|:---|
|  | **For the Six Months Ended<br> March 31,** | **For the Six Months Ended<br> March 31,** |
|  | **2024** | **2025** |
|  | **HK$** | **HK$** |
| Balance at beginning of the period | (50156) | (224015) |
| Deferred income tax benefit | 346058 | 435768 |
| Balance at end of the period | 295902 | 211753 |

---

**SU GROUP HOLDINGS LIMITED NOTES TO THE UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS**

**NOTE 18. SHARE-BASED COMPENSATION**

On November 18, 2024, the Company adopted the 2024 Plan which enables the Group to attract and retain services of the best available personnel for positions of substantial responsibility, to provide additional incentive to employees, officers, directors and external persons, and to promote the success of the business of the Company and other members of the Group. The maximum aggregate number of options, restricted shares, restricted share units and shares that may be issued under the 2024 Plan will be equal to 1,000,000 ordinary shares of the Company.

During the six months ended March 31, 2025, the Group granted 600,000 restricted shares to personnel under the 2024 Plan, of which 200,000 restricted shares have been vested during the six months ended March 31, 2025. The vesting condition requires the grantees to provide continuing service from the date of grant through each vesting date which are December 9, 2024, 2025, and 2026.

The fair value of share-based awards was determined based on the market price of the Group's common stock at the date of grant. The share-based compensation of HK$2.4 million was recognized as expense under selling, general and administrative expenses on the unaudited condensed consolidated statements of income during the six months ended March 31, 2025.

As of March 31, 2025, unrecognized compensation expense amounted to HK$4.9 million which will be recognized over a weighted average period of 1.7 years.

**NOTE 19. CONCENTRATIONS**

 ****

***Credit risk***

As of September 30, 2024 and March 31, 2025, HK$52,319,608 and HK$40,918,658 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. Accordingly, the Group's total unprotected cash held in banks amounted to HK$49,978,752 and HK$36,778,314 as of September 30, 2024 and March 31, 2025, respectively.

 ****

***Customer concentration risk***

One customer represented more than 10% of the Group's revenues for the six months ended March 31, 2025. No customers represented more than 10% of the Group's revenues for the six months ended March 31, 2024.

No customers represented more than 10% of the Group's trade receivables, net as of September 30, 2024 and March 31, 2025.

 ****

***Supplier concentration risk***

Two suppliers represented 19.6% and 16.5% of the Group's purchases for the six months ended March 31, 2025. Two suppliers accounted for 19.0% and 17.4% of the Group's trade and notes payables as of March 31, 2025.

Five suppliers represented 15.3%, 15.0%, 14.8%,13.8%, and 10.2% of the Group's purchases for the six months ended March 31, 2024.

Two suppliers accounted for 23.1% and 14.9% of the Group's trade and notes payables as of September 30, 2024.

**NOTE 20. COMMITMENTS AND CONTINGENCIES**

 ****

***Commitments***

The Group has not entered into any off-balance sheet financial guarantees or other off-balance sheet commitments to guarantee the payment obligations of any third parties. The Group has not entered into any derivative contracts that are indexed to its shares and classified as shareholder's equity or that are not reflected in the unaudited condensed consolidated financial statements. Furthermore, the Group does not have any retained or contingent interest in assets transferred to an unconsolidated entity that serves as credit, liquidity or market risk support to such entity. The Group does 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 the Group.

**SU GROUP HOLDINGS LIMITED NOTES TO THE UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS**

**NOTE 20. COMMITMENTS AND CONTINGENCIES** (cont.)

The following table sets forth the Group's future minimum contractual obligations as of March 31, 2025:

---

| | | | |
|:---|:---|:---|:---|
|  | **Payments due by period** | **Payments due by period** | **Payments due by period** |
|  | **Total** | **Within <br> 1 Year** | **Within<br> 1-2 Years** |
|  | **HK$** | **HK$** | **HK$** |
| Operating lease payment – short-term leases |  |  |  |
| Non-cancellable purchase contracts (A) | 17132995 | 17132995 |  |
| Total | 17132995 | 17132995 |  |

---

The following table sets forth the Group's future minimum contractual obligations as of September 30, 2024:

---

| | | | |
|:---|:---|:---|:---|
|  | **Payments due by period** | **Payments due by period** | **Payments due by period** |
|  | **Total** | **Within <br> 1 Year** | **Within<br> 1-2 Years** |
|  | **HK$** | **HK$** | **HK$** |
| Operating lease payment – short-term leases | 198000 | 198000 |  |
| Non-cancellable purchase contracts (A) | 14401405 | 14401405 |  |
| Total | 14599405 | 14599405 |  |

---

 ****

(A) Mainly refers to the target or
minimum purchases from vendors pursuant to distributor agreements with certain vendors. The distributor agreements cover the period of
12 months.

 ****

***Contingencies***

 

*Severance Payment and Long Service Payment*

Employment Ordinance of the Laws of Hong Kong requires employers to assure the liability of severance payment if an employee who has been working for the employer for not less than 24 months under a continuous contract is, due to redundancy, dismissed, laid off, or upon expiry of a fixed-term employment contract. The 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.

As of September 30, 2024 and March 31, 2025, the Group estimated its long service payment to be HK$1,321,956 and HK$643,000, respectively. The provision for long service payment as at September 30, 2024 and March 31, 2025 have been reflected in the unaudited condensed consolidated balance sheets as "other liabilities" under non-current liabilities.

No severance payment is provided since the Group has no plan to dismiss any staff due to redundancy, and therefore considers the possibility of meeting the criteria of making severance payment is remote.

 

*Legal Contingencies*

In the ordinary course of business, the Group may be subject to legal proceedings regarding contractual and employment relationships and a variety of other matters. The Group records 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, 2024 and March 31, 2025, and through the issuance date of the unaudited condensed consolidated financial statements.

**SU GROUP HOLDINGS LIMITED NOTES TO THE UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS**

**NOTE 21. RELATED PARTY TRANSACTIONS AND BALANCES**

The table below sets forth the major related parties and their relationships with the Group as of September 30, 2024 and March 31, 2025:

---

| | |
|:---|:---|
| **Name** | **Relationship** |
| Mr. Chan Ming Dave | Founder, ultimate shareholder |
| Ms. Yam Fung Yee Carrie | Founder's family member |
| Exceptional Engineering Limited | Shareholder who owned 61.72% and 60.83% of the equity interest of the Company as of September 30, 2024 and March 31, 2025, respectively |

---

***Leases from related parties***

The Group has various agreements for the leases of offices and workshop, and warehouse owned by the founder and his family member. The terms of the agreements in effect as of September 30, 2024 state that the Group will continue to lease the property at a monthly rent of HK$70,500 with annual rental expense at HK$846,000. As of March 31, 2025, no leases from related parties were in effect.

The details of leases from related parties in effect as of September 30, 2024 are as below:

---

| | | | | |
|:---|:---|:---|:---|:---|
| | | **Rent Period** | **Rent Period** | |
| <br>**Lessee** | <br>**Lessor** | **From** | **To** | **Monthly**<br>**Rental** |
|  |  |  |  | **HK$** |
| Shine Union | &nbsp;&nbsp;Mr. Chan Ming Dave and Ms. Yam Fung Yee Carrie | &nbsp;&nbsp;April 1, 2024 | &nbsp;&nbsp;October 15, 2024 | 37500 |
| Shine Union | &nbsp;&nbsp;Mr. Chan Ming Dave | &nbsp;&nbsp;April 1, 2024 | &nbsp;&nbsp;March 31, 2025 | 13000 |
| Shine Union | &nbsp;&nbsp;Mr. Chan Ming Dave and Ms. Yam Fung Yee Carrie | &nbsp;&nbsp;April 1, 2024 | &nbsp;&nbsp;March 31, 2025 | 20000 |

---

The lease expenses charged by the above related parties during the six months ended March 31, 2024 and 2025 was HK$423,000 and HK$198,000, respectively.

As of September 30, 2024, and March 31, 2025, no operating lease ROU assets and operating lease liabilities of leases from related parties were recognized on the unaudited condensed consolidated 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 as of September 30, 2024 (see Note 13). No guarantee was provided by related parties as of March 31, 2025.

***Capital contributions***

During the six months ended March 31, 2024 and 2025, the Company's shareholder, Chan Ming Dave, made capital contributions of HK$762,688 and nil to the Company, respectively (see Note 15).

**SU GROUP HOLDINGS LIMITED NOTES TO THE UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS**

**NOTE 22. EARNINGS PER SHARE**

The following table sets forth the computation of basic and diluted EPS for the years ended September 30, 2024 and for the six months ended March 31, 2025:

---

| | | |
|:---|:---|:---|
|  | **As of<br> September 30,**<br>**2024** | **As of<br> March 31,**<br>**2025** |
| ***Numerator:*** |  |  |
| Numerator for basic and diluted earnings per share – net income (loss) attributable to the SU Group Holdings Limited's shareholders (in HK$) | 10653488 | (4527468) |
| ***Denominator:*** |  |  |
| Denominator for basic and diluted net income per share – weighted average number of shares | 13027752 | 13770577 |
| **Earnings (Losses) per share – basic and diluted (in HK$)** | **0.82** | **(0.33)** |

---

For the six months ended March 31, 2024 and 2025, the effects of all outstanding warrant have been excluded from the computation of diluted earnings per share as their effects would be anti-dilutive.

The potentially dilutive securities that have not been included in the calculation of diluted net earnings (losses) per share as their inclusion would be anti-dilutive are as follows:

---

| | | |
|:---|:---|:---|
|  | **For the Six Months Ended<br> March 31,** | **For the Six Months Ended<br> March 31,** |
|  | **2024** | **2025** |
|  | **HK$** | **HK$** |
| Outstanding warrant | 62500 | 62500 |

---

**NOTE 23. SEGMENT REPORTING**

The CODM reviews financial information of operating segments based on internal management report when making decisions about allocating resources and assessing the performance of the Group. As a result of the assessment made by CODM, the Group has two reportable segments for continuing operations, including security-related engineering services business and security guarding and screening services business. The Group's CODM evaluates performance based on the operating segment's revenues and their operating results.

The following tables present summary information by segment for the six months ended March 31, 2024 and 2025, and as of September 30, 2024 and March 31, 2025:

---

| | | | |
|:---|:---|:---|:---|
|  | **For the Six Months Ended March 31, 2025** | **For the Six Months Ended March 31, 2025** | **For the Six Months Ended March 31, 2025** |
|  | **Security-related engineering<br> services** | **Security guarding<br> and screening<br> services** | **Total** |
|  | **HK$** | **HK$** | **HK$** |
| Revenues | 67386312 | 40526068 | 107912380 |
| Cost of revenues | (51146038) | (34807579) | (85953617) |
| Gross profit | 16240274 | 5718489 | 21958763 |
| Depreciation | 875075 | 30500 | 905575 |
| Amortization of intangible assets | 22700 | 14500 | 37200 |
| Amortization of operating lease ROU assets | 499504 | 454247 | 953751 |
| Total capital expenditures |  | 250000 | 250000 |

---

**SU GROUP HOLDINGS LIMITED NOTES TO THE UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS**

**NOTE 23. SEGMENT REPORTING** (cont.)

---

| | | | |
|:---|:---|:---|:---|
|  | **For the Six Months Ended March 31, 2024** | **For the Six Months Ended March 31, 2024** | **For the Six Months Ended March 31, 2024** |
|  | **Security-related engineering<br> services** | **Security guarding<br> and screening<br> services** | **Total** |
|  | **HK$** | **HK$** | **HK$** |
| Revenues | 56209135 | 35636480 | 91845615 |
| Cost of revenues | (34944807) | (30286281) | (65231088) |
| Gross profit | 21264328 | 5350199 | 26614527 |
| Depreciation | 854229 | 14875 | 869104 |
| Amortization of intangible assets | 28000 | 14500 | 42500 |
| Amortization of operating lease ROU assets | 74230 | 366024 | 440254 |
| Total capital expenditures | 663000 | 1803513 | 2466513 |

---

---

| | | |
|:---|:---|:---|
|  | **As of<br> September 30,**<br>**2024** | **As of<br> March 31,**<br>**2025** |
|  | **HK$** | **HK$** |
| Total assets: |  |  |
| Security-related engineering services | 96154031 | 85735263 |
| Security guarding and screening services | 23982864 | 23905212 |
| Unallocated assets | 36941065 | 25142780 |
|  | 157077960 | 134783255 |

---

**NOTE 24. SUBSEQUENT EVENTS**

The Company evaluated subsequent events and transactions that occurred after the balance sheet date through the June 30, 2025 and, except for the events described below, the Company did not identify any subsequent events that would have required adjustment or disclosure in the unaudited condensed consolidated financial statements.

On April 1, 2025, a subsidiary of the Group renewed agreements for the leases of workshop and warehouse owned by the founder and his family member at a monthly rent of HK$33,000 in total. The rent periods are from April 1, 2025 to March 31, 2026.

On May 29, 2025, a subsidiary of the Group entered into an agreement for the leases of workshop and warehouse owned by the founder and his family member at a monthly rent of HK$13,000. The rent period is from June 1, 2025 to March 31, 2026.

On June 17, 2025, a subsidiary of the Group entered into three subcontracting contracts with a customer in relation to the expansion work of a hospital in Hong Kong. The total contract sum of the three contracts is approximately HK$89 million.

## Exhibit 99.2

**Exhibit 99.2**

**MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATION**

**IMPACT OF COVID-19 ON OUR OPERATIONS**

The Hong Kong economy has been affected by the COVID-19 outbreak as it hindered economic activities. The Hong Kong government has launched relief measures of unprecedented scale, including the two rounds of measures under the Anti-Epidemic Fund, which should provide some cushioning effects to the economy and the labor market. During the six months ended March 31, 2024 and 2025, we were granted subsidies from the aforementioned funds by the Hong Kong government in the amount of approximately nil and HK$9,824, respectively. Such government grants are non-recurring in nature and were recorded as an item in other income in our unaudited condensed consolidated financial statements. During the six months ended March 31, 2024 and 2025, we mainly sourced our security systems from Malaysia, Belgium and Hong Kong (i.e., places where our security systems are shipped from), and since the outbreak of the COVID-19 and up to September 30, 2024 and March 31, 2025, these suppliers and subcontractors had not expressed any difficulties in meeting our delivery schedules or service demands. Except as noted above, our directors confirm that the outbreak of COVID-19 has not resulted in any material adverse impact on our business operations and financial performance up to September 30, 2024 and March 31, 2025, such that (i) there is no loss or cancellation of our contracts or purchase orders after the six months ended March 31, 2024 and 2025, and our contracts in the pipeline are ongoing as planned; (ii) none of our customers have, or have expressed their intention to, (a) delay, suspend or terminate their existing contracts or purchase orders, or (b) reduce their demand for our services; (iii) we have not experienced any instance of material labor shortage or suspension of works of our subcontractors in security-related engineering projects; and (iv) we have not experienced any instance of material labor shortage in security guarding and screening services.

**RECEIPT OF NASDAQ NOTIFICATION REGARDING MINIMUM BID PRICE COMPLIANCE**

We received a letter from The Nasdaq Stock Market LLC ("Nasdaq"), notifying that we are currently not in compliance with the minimum bid price requirement set forth under Nasdaq Listing Rule 5550(a)(2) because the closing bid price of our ordinary shares was below US$1.00 per share for a period of 30 consecutive business days. The notification has no immediate effect on the listing of our ordinary shares, which will continue to trade uninterrupted on Nasdaq under the ticker "SUGP." Pursuant to Nasdaq Listing Rule 5810(c)(3)(A), we have a compliance period of 180 calendar days, or until September 16, 2025, to regain compliance with Nasdaq's minimum bid price requirement. We intend to monitor the closing bid price of our ordinary shares and will, if appropriate, consider implementing available options, including, but not limited to, implementing a reverse stock split of our ordinary shares, to regain compliance with the minimum bid price requirement under the Nasdaq Listing Rules. For more information, please refer to our current report on Form 6-K filed with the Securities and Exchange Commission on March 25, 2025.

**KEY COMPONENTS OF RESULTS OF OPERATIONS**

**Revenues**

We generate our revenues from (i) the provision of security-related engineering services; and (ii) the provision of security guarding and screening services.

The table below sets out the breakdown of our revenues by service line for the periods presented:

---

| | | | | | |
|:---|:---|:---|:---|:---|:---|
|  | **For the six months ended March 31,** | **For the six months ended March 31,** | **For the six months ended March 31,** | **Variances** | **Variances** |
|  | **2024** | **2025** | **2025** | **Amount** | **%** |
|  | **HK$** | **HK$** | **US$** | **HK$** | |
| **Security-related engineering services** | **56209135** | **67386312** | **8662927** | **11177177** | **19.9** |
| Project and maintenance | 53581015 | 65064782 | 8364480 | 11483767 | 21.4 |
| Equipment leasing | 2628120 | 2321530 | 298447 | (306590) | (11.7) |
| **Security guarding and screening services** | **35636480** | **40526068** | **5209877** | **4889588** | **13.7** |
| **Total revenues** | **91845615** | **107912380** | **13872804** | **16066765** | **17.5** |

---

***Security-related engineering services***

The provision of security-related engineering services is one of our principal businesses. We provide security-related engineering services primarily in Hong Kong.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;*(i)* *Project and maintenance* 

Project income in relation to security-related engineering services includes income from the supply and/or installation of security systems and related maintenance services. Our project income is generally driven by the number, size and types of projects involved, and nature of services provided.

We also provide standalone maintenance service to our customers in respect of (i) security systems and products supplied and installed by us but falling outside of or without a defects liability period; and (ii) security systems and products for which the supply and installation work were not handled by us.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;*(ii)* *Equipment leasing* 

Income derived from equipment leasing comprises rental income received from the leasing of security systems under operating leases. Rental income from operating leases is recognized in the unaudited condensed consolidated statements of income on a straight-line basis over the lease term. The rental income under the standalone equipment leasing arrangements with our lessees is determined by taking into account various factors, including the price and condition of the security systems and the period of the lease.

***Security guarding and screening services***

 ****

Since the acquisition of Fortune Jet in July 2019, we commenced our provision of security guarding and screening services in Hong Kong.

We secure and guard both individuals and physical properties by, among other things, conducting patrols, entrance guarding, access control and alarm monitoring through our dispatched employees. We provide screening services by dispatching certified screeners who are our employees to the premises of our customers.

We also offer various types of related vocational training courses (i.e., QASRS, Mandatory Basic Safety Training Course (Construction Work), and Mandatory Basic Safety Training Revalidation Course (Construction Work)).

**Cost of revenues**

Our cost of revenues consists of (i) costs of material in relation to security-related engineering services; (ii) employee benefit expenses for our staff which are attributable to the provision of services; (iii) subcontracting fees which mainly represent the cost of services from third-party service providers; and (iv) other costs directly attributable to our revenue-generating activities, such as depreciation of security systems leased to our customers under operating leases, freight charges, insurance, and other miscellaneous expenses.

The following table sets forth a breakdown of our cost of revenues by service line for the periods indicated:

---

| | | | | | |
|:---|:---|:---|:---|:---|:---|
|  | **For the six months ended March 31,** | **For the six months ended March 31,** | **For the six months ended March 31,** | **Variances** | **Variances** |
|  | **2024** | **2025** | **2025** | **Amount** | **%** |
|  | **HK$** | **HK$** | **US$** | **HK$** | |
| **Security-related engineering services** | **34944807** | **51146038** | **6575139** | **16201231** | **46.4** |
| Project and maintenance | 33985211 | 50115800 | 6442696 | 16130589 | 47.5 |
| Equipment leasing | 959596 | 1030238 | 132443 | 70642 | 7.4 |
| **Security guarding and screening services** | **30286281** | **34807579** | **4474730** | **4521298** | **14.9** |
| **Total cost of revenues** | **65231088** | **85953617** | **11049869** | **20722529** | **31.8** |

---

**Gross profit and gross profit margin**

Our gross profit equals our revenues less our cost of revenues. Our gross profit and gross profit margin are dependent on various factors, including the nature of the projects that were undertaken by us and the size of such projects during the respective financial period.

The following table sets forth a breakdown of our gross profit and gross profit margin by service line for the periods indicated:

---

| | | | | | |
|:---|:---|:---|:---|:---|:---|
|  | **For the six months ended March 31,** | **For the six months ended March 31,** | **For the six months ended March 31,** | **Variances** | **Variances** |
|  | **2024** | **2025** | **2025** | **Amount** | **%** |
|  | **HK$** | **HK$** | **US$** | **HK$** | |
| **Security-related engineering services** |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;Project and maintenance |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Gross profit | 19595804 | 14948982 | 1921784 | (4646822) | (23.7) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Gross profit margin | 36.6% | 23.0% | 23.0% | (13.0)% |  |
| &nbsp;&nbsp;&nbsp;Equipment leasing |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Gross profit | 1668524 | 1291292 | 166004 | (377232) | (22.6) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Gross profit margin | 63.5% | 55.6% | 55.6% | (7.9)% |  |
| **Security guarding and screening services** |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Gross profit | 5350199 | 5718489 | 735147 | 368290 | 6.9 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Gross profit margin | 15.0% | 14.1% | 14.1% | (0.9)% |  |
| **Total** |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Gross profit | 26614527 | 21958763 | 2822935 | (4655764) | (17.5) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Gross profit margin | 29.0% | 20.3% | 20.3% | (8.7)% |  |

---

**Selling, general and administrative expenses**

Our selling, general and administrative expenses mainly consist of (i) employee benefit expenses for our directors, officers, and sales and administrative staff; (ii) legal and professional fees; (iii) office expenses primarily including motor vehicle expenses for our operations, repair and maintenance expenses, insurance, computer accessories expenses, utilities, postage and courier, and other communication expenses; (iv) depreciation of right-of-use ("ROU") assets for our offices; (v) expenses relating to short-term leases and low-value assets; (vi) business development expenses which mainly consist of entertainment expenses, travelling expenses for business trips, and advertising and promotion expenses for our brand; (vii) provision for credit loss; and (viii) other miscellaneous expenses.

**Losses on disposal of property and equipment**

Losses on disposal of property and equipment represent the proceeds from disposal of property and equipment, net of the carrying amount of the property and equipment disposed of.

**Other income**

Other income mainly consists of (i) government grants received; (ii) net gains on foreign exchange arising from the fluctuation of US$, EUR, GBP, and RMB in relation to our procurement and bank and trade payables balances denominated in foreign currencies; (iii) interest income from bank deposits; and (iv) fair value gain on revaluation of the investment in our key management insurance policy.

**Finance expenses**

Finance expenses mainly represent interest expenses on notes payables.

**Other expenses**

Other expenses mainly consist of net losses on foreign exchange arising from the fluctuation of US$, EUR, GBP, and RMB in relation to our procurement and bank and trade payables balances denominated in foreign currencies.

**Income tax expenses**

The profits of a group entity in Hong Kong not qualifying for the two-tiered profits tax rates regime will be taxed at the flat rate of 16.5%. Accordingly, Hong Kong profits tax is calculated at 8.25% on the first HK$2.0 million of the estimated assessable profits for Shine Union and at 16.5% on the estimated assessable profits above HK$2.0 million.

We are not subject to any income tax in the Cayman Islands and the BVI pursuant to the rules and regulations in those jurisdictions.

We have fulfilled all our income tax obligations and have not had any unresolved income tax issues or disputes with the relevant tax authorities.

**RESULTS OF OPERATIONS**

The following table sets forth a summary of our unaudited condensed consolidated results of operations for the six months ended March 31, 2024 and 2025. This information should be read together with our unaudited condensed consolidated financial statements and related notes included elsewhere in this interim report. The results of operations in any period are not necessarily indicative of the results that may be expected for any future period.

---

| | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|
|  | **For the six months ended March 31,** | **For the six months ended March 31,** | **For the six months ended March 31,** | **For the six months ended March 31,** | **For the six months ended March 31,** | **Variances** | **Variances** |
|  | **2024** | **2024** | **2025** | **2025** | **2025** | **Amount** | **%** |
|  | **HK$** | **%** | **HK$** | **%** | **US$** | **HK$** | |
| Revenues | 91845615 | 100.0 | 107912380 | 100.0 | 13872804 | 16066765 | 17.5 |
| Cost of revenues | (65231088) | (71.0) | (85953617) | (79.7) | (11049869) | 20722529 | 31.8 |
| **Gross profit** | **26614527** | **29.0** | **21958763** | **20.3** | **2822935** | **(4655764)** | **(17.5)** |
| **Operating expenses** |  |  |  |  |  |  |  |
| Selling, general and administrative expenses | (15598351) | (17.0) | (24921087) | (23.1) | (3203760) | 9322736 | 59.8 |
| Losses on disposal of property and equipment | (636289) | (0.7) | (1772107) | (1.6) | (227815) | 1135818 | 178.5 |
| **Income (loss) from operations** | **10379887** | **11.3** | **(4734431)** | **(4.4)** | **(608640)** | **(15114318)** | **(145.6)** |
| **Other income (expenses)** |  |  |  |  |  |  |  |
| Other income | 771005 | 0.8 | 715730 | 0.7 | 92012 | (55275) | (7.2) |
| Finance expenses | (50854) | (0.1) | (149000) | (0.1) | (19155) | 98146 | 193.0 |
| **Total other income, net** | **720151** | **0.7** | **566730** | **0.6** | **72857** | **(153421)** | **(21.3)** |
| **Income (loss) before income tax expenses** | **11100038** | **12.1** | **(4167701)** | **(3.8)** | **(535783)** | **(15267739)** | **(137.5)** |
| Income tax expenses | (976169) | (1.1) | (359767) | (0.3) | (46250) | (616402) | (63.1) |
| **Net income (loss)** | **10123869** | **11.0** | **(4527468)** | **(4.1)** | **(582033)** | **(14651337)** | **(144.7)** |

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**Six Months Ended March 31, 2025 Compared to Six Months Ended March 31, 2024**

***Revenues***

Our revenues increased by HK$16.1 million, or 17.5%, from HK$91.8 million for the six months ended March 31, 2024 to HK$107.9 million (US$13.8 million) for the six months ended March 31, 2025 mainly due to (i) an increase in revenues from provision of security-related engineering services of HK$11.2 million; and (ii) an increase in revenues from security guarding and screening and related vocational training of HK$4.9 million.

Our revenues from the provision of security-related engineering services increased by HK$11.2 million, or 19.9%, from HK$56.2 million for the six months ended March 31, 2024 to HK$67.4 million (US$8.6 million) for the six months ended March 31, 2025. The increase was mainly attributable to the business growth of the security-related engineering services segment. Certain revenues for the six months ended March 31, 2025 were contributed by several projects with larger revenues recognized, including one project of over HK$17 million, one project of over HK$8 million, one project of over HK$2 million, and seven projects of each over HK$1 million. Comparatively, certain revenues for the six months ended March 31, 2024 were contributed by several projects with less revenues recognized, including two projects of each over HK$4 million, two projects of each over HK$2 million, and six projects of each over HK$1 million.

***Cost of revenues***

Our cost of revenues increased by HK$20.7 million, or 31.8%, from HK$65.2 million for the six months ended March 31, 2024 to HK$85.9 million (US$11.0 million) for the six months ended March 31, 2025. The increase was mainly due to an increase costs of goods sold from HK$13.7 million for the six months ended March 31, 2024 to HK$31.4 million (US$4.0 million) for the six months ended March 31, 2025, mainly attributable to (i) the increase in security-related engineering services work performed and the expansion of security guarding and screening business during the six months ended March 31, 2025; and (ii) an increase employee benefit expenses from HK$30.4 million for the six months ended March 31, 2024 to HK$34.7 million (US$4.4 million) for the six months ended March 31, 2025, mainly due to expansion of security guarding and screening business which is labor-intensive. The increase was consistent with the business growth of security-related engineering services and security guarding and screening.

***Gross profit and gross profit margin***

Our gross profit decreased by HK$4.6 million, or 17.5%, from HK$26.6 million for the six months ended March 31, 2024 to HK$22.0 million (US$2.8 million) for the six months ended March 31, 2025. The gross profit margin decreased from 29.0% in the six months ended March 31, 2024 to 20.3% for the six months ended March 31, 2025. The decrease was due to (i) a decrease in the gross profit margin of security-related engineering services triggered by certain projects completed during the six months ended March 31, 2025 with larger extent of use of subcontracting services; and (ii) a lower gross profit margin of security guarding services contracts resulting from an increasing labor cost.

Gross profit margin of project and maintenance income under security-related engineering services decreased from 36.6% for the six months ended March 31, 2024 to 23.0% for the six months ended March 31, 2025.

Gross profit margin of equipment leasing income under security-related engineering services decreased from 63.5% for the six months ended March 31, 2024 to 55.6% for the six months ended March 31, 2025.

Gross profit margin of security guarding and screening services slightly decreased from 15.0% for the six months ended March 31, 2024 and 14.1% for the six months ended March 31, 2025.

***Selling, general and administrative expenses***

Our selling, general and administrative expenses increased by HK$9.3 million, or 59.8%, from HK$15.6 million for the six months ended March 31, 2024 to HK$24.9 million (US$3.2 million) for the six months ended March 31, 2025. The increase was mainly due to (i) an increase in employee benefit expenses for directors, officers, and sales and administrative staff from HK$9.4 million for the six months ended March 31, 2024 to HK$10.9 million (US$1.4 million) for the six months ended March 31, 2025 triggered by salary adjustments; and (ii) an increase in advertising expenses from HK$0.1 million for the six months ended March 31, 2024 to HK$5.9 million (US$0.8 million) for the six months ended March 31, 2025 since more promotional activities and campaigns were performed to penetrate the market.

***Losses on disposal of property and equipment***

Our losses on disposal of property and equipment increased from HK$0.6 million for the six months ended March 31, 2024 to HK$1.8 million (US$0.2 million) for the six months ended March 31, 2025, mainly due to certain X-ray machines disposed upon the termination of rental equipment agreements during the six months ended March 31, 2025.

***Other income***

Our other income decreased by HK$0.1 million, or 7.2%, from HK$0.8 million for the six months ended March 31, 2024 to HK$0.7 million (US$0.1 million) for the six months ended March 31, 2025. The decrease was mainly due to the net impact of (i) a decrease in gain on foreign exchange from HK$0.5 million for the six months ended March 31, 2024 to HK$0.1 for the six months ended March 31, 2025; and (ii) an increase in bank interest income from HK$0.3 million for the six months ended March 31, 2024 to HK$0.5 million for the six months ended March 31, 2025.

***Finance expenses***

Our finance expenses maintained at a stable level of HK$0.1 million for the six months ended March 31, 2024 and 2025.

***Income tax expenses***

Our income tax expenses decreased by HK$0.6 million, or 63.1%, from HK$1.0 million for the six months ended March 31, 2024 to HK$0.4 million for the six months ended March 31, 2025. The decrease was mainly due to decrease in income before income tax.

***Net income***

As a result of the foregoing, we recorded a net income of HK$10.1 million for the six months ended March 31, 2024 and a net loss of HK$4.5 million for the six months ended March 31, 2025. We recorded net income margin of 11.0% for the six months ended March 31, 2024 and a net loss margin of 4.1% for the six months ended March 31, 2025.

**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.

We had cash and cash equivalents of HK$40.9 million (US$5.2 million) as of March 31, 2025. Our working capital was approximately HK$82.5 million (US$10.6 million) as of March 31, 2025. The cash and cash equivalents disaggregated by currency denomination are as follow:

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| | | |
|:---|:---|:---|
|  | **As of <br> March 31, 2025** | **As of <br> March 31, 2025** |
|  | **Amount** | **HK$ <br> equivalent** |
| Cash and cash equivalents: |  |  |
| HK$ | 20668932 | 20668932 |
| EUR | 28394 | 239040 |
| US$ | 2563751 | 19942652 |
| GBP | 7250 | 72957 |
| **Total** |  | **40923581** |

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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 regularly monitor the repayment dates of financial liabilities, including trade and notes payables, other payables and accrued charges, etc. to match with financial resources available to us from time to time. We manage liquidity risk by maintaining adequate financial resources, including existing cash and bank balances and operating cash flows. We believe that our current cash and cash equivalents and our anticipated cash flows from operating activities will be sufficient to meet our anticipated working capital requirements and capital expenditures in the next 12 months from the date of this interim report. Moreover, we expected that we are able to obtain additional cash flows from our financing activities, including the utilization of the bank facilities by a subsidiary, amounting up to HK$9.0 million. Our operating subsidiaries in Hong Kong are permitted under the laws of Hong Kong to provide direct or indirect funding to us through cash dividend distributions, funds transfer, loans, or advances. Currently, we are not aware of any interventions in or the imposition of restrictions and limitations by the PRC government on our and our operating subsidiaries' ability to transfer funds or assets. We currently intend to retain all available funds and future earnings, if any, for the operation and expansion of our business, and we do not anticipate declaring or paying any dividends in the foreseeable future.

In the long term, we do not have significant known commitment that requires us material cash outflows. Together with the ability to obtain funds from our operating subsidiaries, we believe that our current cash and cash equivalents and our anticipated cash flows from operating and financing activities will be sufficient to meet our anticipated working capital requirements and capital expenditures beyond 12 months from the date of this interim report.

We currently expect that there will not be any material change in the sources and uses of cash.

***Cash flows***

The following table sets forth a summary of our unaudited condensed consolidated cash flows for the fiscal periods indicated:

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| | | | | | |
|:---|:---|:---|:---|:---|:---|
|  | **For the six months ended March 31,** | **For the six months ended March 31,** | **For the six months ended March 31,** | **Change** | **Change** |
|  | **2024** | **2025** | **2025** | **Amount** | **%** |
|  | **HK$** | **HK$** | **US$** | **HK$** | |
| Net cash provided by (used in) operating activities | 6212311 | (10627102) | (1366179) | (16839413) | (271.1) |
| Net cash used in investing activities | (663000) | (758100) | (97458) | (95100) | (14.3) |
| Net cash provided by financing activities | 25182091 | 90 | 12 | (25182001) | (99.9) |
| Effects of exchange rate changes on cash and cash equivalents | 89535 | (29439) | (3787) | (118974) | (132.9) |
| **Net increase (decrease) in cash and cash equivalents** | 30820937 | (11414551) | (1467412) | (42235488) | 137.0 |
| Cash and cash equivalents at the beginning of the period | 16400123 | 52338132 | 6728391 | 35938009 | 219.1 |
| **Cash and cash equivalents at the end of the period** | 47221060 | 40923581 | 5260979 | (6297479) | (13.3) |

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*Operating activities*

For the six months ended March 31, 2024, our net cash provided by operating activities of HK$6.2 million was primarily attributable to (i) net income of HK$10.1 million, adjusted for depreciation of property and equipment and ROU assets of HK$0.9 million and HK$0.4 million, respectively, provision for allowance for credit loss of HK$0.3 million, and loss on disposal of property and equipment of HK$0.6 million; (ii) an increase of inventories of HK$4.0 million, a decrease of trade receivables of HK$4.2 million, an increase of prepaid expenses and other assets of HK$3.7 million, an increase of contract assets of HK$4.4 million; and (iii) a decrease of trade and notes payables of HK$10.2 million, an increase of contract liabilities of HK$14.8 million, and an increase of prepaid income tax of HK$2.0 million.

For the six months ended March 31, 2025, our net cash used in operating activities of HK$10.6 million was primarily attributable to (i) net loss of HK$4.5 million, adjusted for depreciation of property and equipment and ROU assets of HK$0.9 million and HK$1.0 million, respectively, provision for allowance for credit loss of HK$0.2 million, loss on disposal of property and equipment of HK$1.8 million, amortization of service fee of HK$5.2 million, and share-based compensation of HK$2.4 million; (ii) a decrease of inventories of HK$17.7 million, an increase of trade receivables of HK$3.3 million, an increase of contract assets of HK$11.5 million; and (iii) a decrease of trade and notes payables of HK$2.7 million, a decrease of contract liabilities of HK$12.8 million.

We identified several material changes of assets and liabilities as below:

Trade receivables, net increased by HK$3.0 million, or 13.7%, from HK$21.9 million as of September 30, 2024 to HK$24.9 million as of March 31, 2025. The increase of trade receivables was mainly attributable to increase in revenues during the six months ended March 31, 2025.

Inventories decreased by HK$17.7 million, or 37.2%, from HK$47.6 million as of September 30, 2024 to HK$29.9 million as of March 31, 2025. The decrease of inventories was mainly due to a realization of work-in-progress as cost of sales upon the completion of several projects with larger contract sum.

Contract assets increased by HK$11.6 million, or 179.9%, from HK$6.4 million as of September 30, 2024 to HK$18.0 million as of March 31, 2025. The increase was mainly due to the recognition of revenues upon the completion of several projects with larger contract sum.

Trade payables decreased by HK$0.9 million, or 10.9%, from HK$8.6 million as of September 30, 2024 to HK$7.7 million as of March 31, 2025. The decrease was due to more timely settlement of costs of revenues.

Contract liabilities decreased by HK$12.8 million, or 46.0%, from HK$27.8 million as of September 30, 2024 to HK$15.0 million as of March 31, 2025. The decrease was mainly due to the recognition of revenues by utilizing the prepayment received from customers upon the completion of several projects with larger contract sum.

*Investing activities*

During the six months ended March 31, 2024, our net cash used in investing activities was HK$0.7 million, which was primarily attributable to the purchase of equipment.

During the six months ended March 31, 2025, our net cash used in investing activities was HK$0.8 million, which was primarily attributable to the purchase of equipment.

*Financing activities*

For the six months ended March 31, 2024, our net cash provided by financing activities was HK$25.2 million, which was primarily attributable to net proceeds received from the initial public offering of the Company in January 2024.

For the six months ended March 31, 2025, our net cash provided by financing activities was HK$90 arising from settlements of shares subscription receivables.

Our subsidiary, Shine Union, has banking facilities of HK$20.0 million and HK$9.0 million with a commercial bank in Hong Kong as of September 30, 2024 and March 31, 2025, respectively. As of September 30, 2024 and March 31, 2025, Shine Union had utilized HK$2.4 million and HK$0.6 million, respectively. The unutilized banking facilities were HK$17.6 million and HK$8.4 million as of September 30, 2024 and March 31, 2025, respectively.

 ****

**Contingencies** 

*Severance Payment and Long Service Payment*

The Employment Ordinance of Hong Kong requires employers to assure the liability of severance payment if an employee who has been working for the employer for not less than 24 months under a continuous contract is, due to redundancy, dismissed, laid off, 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.

As of September 30, 2024 and March 31, 2025, we estimated our long service payment to be HK$1.3 million and HK$0.6 million, respectively. The provisions for long service payment as at September 30, 2024 and March 31, 2025 have been reflected in our unaudited condensed consolidated balance sheets as "other liabilities" under non-current liabilities.

No severance payment is provided since we have no plan to dismiss any staff due to redundancy, and therefore consider the possibility of meeting the criteria of making severance payment to be remote.

*Legal Contingencies*

In the ordinary course of business, we may be subject to legal proceedings regarding contractual and employment relationships and a variety of other matters. 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, 2024 and March 31, 2025, and through the issuance date of the unaudited condensed consolidated financial statements.

**Off-Balance Sheet Commitments and Arrangements**

We have not entered into any off-balance sheet financial guarantees or other off-balance sheet commitments to guarantee the payment obligations of any third parties. We have not entered into any derivative contracts that are indexed to our shares and classified as shareholder's equity or that are not reflected in our unaudited condensed consolidated financial statements. Furthermore, we do not have any retained or contingent interest in assets transferred to an unconsolidated entity that serves as credit, liquidity or market risk support to such entity. 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, 2024 and March 31, 2025 and any subsequent period primarily include our capital expenditures and contractual obligations.

 **

***Capital Expenditures***

 **

For the fiscal years ended September 30, 2024 and March 31, 2025, our capital expenditures were HK$3.2 million and HK$0.3 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. We will continue to make capital expenditures to meet the expected growth of our business.

 **

***Contractual Obligations***

 **

The following table sets forth our contractual obligations as of March 31, 2025:

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| | | | |
|:---|:---|:---|:---|
|  | **Payments due by period** | **Payments due by period** | **Payments due by period** |
|  | **Total** | **Within <br> 1 Year** | **Within <br> 1 – 2 Years** |
|  | **HK$** | **HK$** | **HK$** |
| Operating lease payment – short-term leases |  |  |  |
| Non-cancellable purchase contracts | 17132995 | 17132995 |  |
| Total | 17132995 | 17132995 |  |

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The following table sets forth our contractual obligations as of September 30, 2024:

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| | | | |
|:---|:---|:---|:---|
|  | **Payments due by period** | **Payments due by period** | **Payments due by period** |
|  | **Total** | **Within <br> 1 Year** | **Within <br> 1 – 2 Years** |
|  | **HK$** | **HK$** | **HK$** |
| Operating lease payment – short-term leases | 198000 | 198000 |  |
| Non-cancellable purchase contracts | 14401405 | 14401405 |  |
| Total | 14599405 | 14599405 |  |

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Other than as shown above, we did not have any significant capital and other commitments, long-term obligations, or guarantees as of September 30, 2024 and March 31, 2025.