3.1 Sanai Health Industry Group Company Limited 三 爱 健 康 產 業 集 團 有 限 公 司 (Incorporated in the Cayman Islands with limited liability) (於閱曼群島註冊成立的有限公司) Stock Code 股份代號：1889 Interim Report 中期報告 । 2019 Corporate Information 公司資料 BOARD OF DIRECTORS Executive Directors Mr. Chen Chengqing (Chairman) Mr. Gao Borui (appointed on 26 July 2019) Mr. Yuan Chaoyang (appointed on 26 July 2019) Professor Zhang Rongqing Mr. Cheng Hok Kai, Frederick (appointed on 9 May 2019) Ms. Hung Hoi Lan (resigned on 26 July 2019) Non-exe ...

Financial Performance - The company reported a consolidated profit of $XX million for the year, representing a YY% increase compared to the previous year[6]. - Revenue increased by 2.5% to RMB64.1 million, with a total loss after tax of RMB229.76 million, including a one-off extraordinary loss of RMB189.65 million[12]. - The Group recorded a gross loss margin of 0.6% for the reporting period[12]. - For the year ended December 31, 2018, the Group achieved total revenue of RMB 64.12 million, representing an increase of 2.54% compared to RMB 62.53 million in 2017[23]. - The gross loss margin improved significantly to 0.55% in 2018 from 90.79% in 2017[23]. - The loss attributable to owners of the Company decreased to RMB 229.76 million in 2018 from RMB 1,151.74 million in 2017[23]. - The basic loss per share was RMB 7.7 cents in 2018, down from RMB 47.8 cents in 2017[23]. - The Group's financial performance for the year ended December 31, 2018, is detailed in the consolidated statement of profit or loss[152]. User Growth and Market Expansion - User data showed a growth of ZZ% in active users, reaching a total of AA million users by the end of the fiscal year[11]. - The company plans to expand its market presence in Asia, targeting a market share increase of DD% over the next two years[11]. - The company provided a future outlook, projecting a revenue growth of BB% for the next fiscal year, driven by new product launches and market expansion[11]. Product Development and Innovation - Investment in R&D increased by CC%, focusing on innovative technologies and product development[11]. - A strategic acquisition was completed, enhancing the company's capabilities in the health sector, expected to contribute an additional EE million in revenue annually[11]. - The company introduced a new product line that is anticipated to generate FF million in sales within the first year of launch[11]. - The Company has acquired a biotechnology company to enhance its precision medicine capabilities, focusing on genetic testing and molecular diagnostic testing[20]. - A new plant factory project for cultivating Taiwan anoectochilus with an expected investment of about RMB30 million is set to be launched[19]. Operational Efficiency and Cost Management - The gross margin improved to GG%, reflecting better cost management and pricing strategies[11]. - The company aims to reduce operational costs by HH% through efficiency improvements and process optimization[11]. - The Company plans to transfer part of the production of oral pharmaceutical products to Fujian Yongchun Pharmaceutical Company to expand production scale[14]. Governance and Board Structure - The Company does not currently have a Chief Executive Officer, with the Chairman overseeing operations[57]. - The Board consists of four independent non-executive Directors, ensuring adequate independence and protection of shareholder interests[57]. - The Board reviews corporate governance policies and practices annually, making recommendations as necessary[56]. - The Company has developed a code of conduct applicable to directors and employees, which is reviewed regularly[56]. - The Board's attendance at meetings reflects a commitment to governance, with all Executive Directors present at every meeting[56]. - The Company appointed four independent non-executive Directors, with at least one possessing appropriate professional accounting qualifications or related financial management expertise[60]. Risk Management and Internal Control - The Board is committed to reviewing the adequacy and effectiveness of the Group's risk management and internal control systems at least annually[111]. - An annual risk assessment was conducted, identifying strategic, operational, financial, and compliance risks for major business operations, leading to a prioritized internal audit plan[114]. - The Group has established risk management and internal control systems to manage risks associated with achieving business objectives[111]. - The Company has taken steps to enhance its risk management and internal control systems based on identified weaknesses[118]. Shareholder Communication and Participation - The Company encourages shareholder participation and maintains communication through interim reports, annual reports, and public disclosures[122]. - The Company has a structured process for convening extraordinary general meetings upon shareholder request[123]. - The Board of Directors did not recommend declaring any final dividend for the year ended December 31, 2018, consistent with the previous year where no dividend was declared[152]. Remuneration and Compensation - The remuneration policy for executive directors is based on the company's operating results, individual performance, and comparable market statistics[170][175]. - The emoluments of non-executive directors are recommended by the Remuneration Committee, with details provided in the financial statements[170][175]. - The total remuneration paid to the external auditor for the year ended December 31, 2018, was HK$2,220,000, which included HK$1,950,000 for audit services and HK$270,000 for non-audit services[105]. Share Options and Capital Structure - The New Share Option Scheme allows for the grant of options not exceeding 10% of the issued shares, which is 233,877,250 shares, approximately 7.63% of the Company's issued shares as of the report date[197]. - The maximum number of shares that may be issued upon exercise of all outstanding options under the New Share Option Scheme shall not exceed 30% of the shares of the Company in issue at any time[197]. - The Company has not entered into any arrangements enabling Directors to acquire benefits through share acquisition during the year ended December 31, 2018[190].