Business Operations and Market Strategy - AGTech Holdings Limited is committed to providing comprehensive professional gaming software, hardware, and marketing consulting services to enhance lottery sales in the Chinese lottery market[7]. - The company aims to explore new legal and regulated lottery channels to further expand its market presence[10]. - The company is focused on enhancing its product offerings to provide exciting and rewarding gaming experiences for lottery players[7]. - The company operates in two main business segments: lottery (including hardware, games, systems, and distribution services) and gaming and entertainment[26]. - The company aims to develop its business into a comprehensive provider of lottery, mobile gaming, and entertainment content and technology services globally[26]. - The company is actively seeking overseas opportunities and establishing strategic partnerships in markets such as India and Southeast Asia[35]. - The company plans to develop unique online gaming and entertainment platforms, integrating resources from e-commerce and electronic payment platforms[33]. - The company is prepared to leverage its leading position in the Chinese lottery market to expand sales through mobile and internet channels once approved[36]. - The company continues to focus on expanding its reach to end consumers through unique and innovative products[36]. - The company is committed to transforming illegal gambling revenues into a regulated lottery market to protect vulnerable groups and increase funding for public welfare[28]. Financial Performance and Market Insights - In 2018, China's total lottery sales reached approximately RMB 511.4 billion, representing a year-on-year increase of about 19.9%[27]. - The penetration rate of legalized lottery in China remains relatively low compared to developed markets like Europe and the United States, indicating significant growth potential for the future[27]. - In 2018, the sales of welfare lottery and sports lottery grew approximately 3.5% and 36.8% respectively, accounting for about 43.9% and 56.1% of the overall market[29]. - Sports betting was the best-performing product, increasing by approximately 78.2% compared to 2017, driven by the impact of the 2018 FIFA World Cup[30]. - Lottery sales for the year reached approximately RMB 2,758 billion, with a growth of 5.0% year-on-year, primarily due to the popularity of high-frequency lottery games[32]. - Video lottery sales amounted to approximately RMB 47.4 billion, representing about 9.3% of the domestic market[32]. - Instant lottery sales declined by approximately 8.5% to about RMB 22.5 billion, continuing a downward trend over several years[32]. Corporate Governance and Compliance - The board of directors has confirmed that the information in the report is accurate and complete, with no misleading or fraudulent elements[2]. - The company has a strong governance structure with various committees overseeing audit, remuneration, and nomination processes[11]. - The company has adopted corporate governance practices to enhance transparency and protect shareholder interests, including the establishment of various committees[66]. - The company has maintained compliance with corporate governance codes, with some deviations justified by the need for stable leadership[68]. - The board of directors is responsible for formulating corporate policies, business strategies, and significant financial matters, ensuring compliance with relevant regulations[75]. - The company has established a Nomination Committee to monitor the implementation of its nomination policy annually[102]. - The company has a structured governance framework involving its legal department, corporate governance committee, and risk management committee to oversee compliance and risk management[146]. Risk Management and Internal Controls - The Audit Committee is responsible for reviewing the financial reporting process and risk management systems[107]. - The risk management and internal control committee was established on January 1, 2016, to oversee risk management and internal control systems[109]. - The committee identified various risk areas, including operational, liquidity, foreign exchange, credit, and legal or political risks, and established acceptable levels for these risks[112]. - The board confirmed the effectiveness of the risk management and internal control systems, with no significant deficiencies or risks noted during the review year[114]. - The company has implemented measures to enhance risk management, including appointing an internal audit senior manager and establishing a fraud disclosure mechanism[115]. Corporate Social Responsibility and Community Engagement - The company is committed to responsible gaming practices and collaborates with lottery organizations to implement responsible gaming measures[40]. - The company is actively involved in various charitable and sports initiatives, contributing to the development of a healthy and responsible lottery industry in China[45]. - The company emphasizes corporate social responsibility by actively participating in sports development and charitable activities, sponsoring various sports events[147]. - The group sponsors sports events and participates in charitable activities, contributing to community welfare[136]. - The company has established a CHEER strategy focusing on corporate social responsibility, healthy market development, environmental management, employee development, and responsible gaming[155]. Employee Development and Workplace Policies - The company prioritizes employee and human resource development, focusing on R&D in gaming technology and expanding its internal R&D team to introduce innovative lottery products[150]. - The company provides various benefits, including year-end bonuses and medical benefits, in addition to salaries[168]. - The company has a strict policy regarding employee conduct, with potential dismissal for serious violations of the code of conduct[169]. - The company emphasizes a commitment to employee diversity, considering factors such as gender, age, nationality, and industry background in its hiring practices[179]. - The company provides on-the-job training and sponsorship for external training activities to enhance employees' professional knowledge and skills[187]. Environmental Management and Sustainability - The company is committed to environmental management by creating a low-carbon office environment and encouraging energy-saving practices among employees[149]. - The company has implemented energy-saving policies, including encouraging employees to turn off computers and lights when not in use[160]. - The company promotes the use of electronic documents to reduce paper usage significantly[160]. - The company has established a policy to minimize significant impacts on the environment and natural resources, aligning with resource usage policies[165].