[Corporate Overview](index=3&type=section&id=Corporate%20Overview) This section provides an overview of the company's structure, leadership, and foundational business operations [Corporate Information](index=4&type=section&id=Corporate%20Information) This section provides Asia Grocery Distribution Limited's basic corporate information, including board members, committee structures, registered office, principal bankers, and auditors - The company's board of directors comprises three executive directors, one non-executive director, and three independent non-executive directors. Mr. Wong Siu Man serves as Chairman, and Mr. Wong Siu Wah serves as Chief Executive Officer[7](index=7&type=chunk) - The company's Audit Committee, Remuneration Committee, and Nomination Committee are all composed of independent non-executive directors, meeting corporate governance requirements[7](index=7&type=chunk) [Chairman's Statement](index=5&type=section&id=Chairman%27s%20Statement) The Chairman's Statement reviews the operating environment for FY2021, noting that despite COVID-19 challenges to the retail sector, the company expects stable performance due to its long-standing "Hung Fat Ho" brand and solid supplier and customer relationships. The report also highlights the group's expansion into catering services for revenue diversification and expresses gratitude to shareholders, partners, and employees - The Group has operated a food and beverage grocery distribution business in Hong Kong for over 40 years under the local brand "Hung Fat Ho," serving customers including restaurants, hotels, food processors, and wholesalers[11](index=11&type=chunk) - Affected by COVID-19, Hong Kong's total retail sales value from April 2020 to March 2021 decreased by approximately **13.9%** year-on-year. Despite challenging prospects, with the easing of social distancing measures, local consumer sentiment has improved, and the Group anticipates stable performance in the coming year[11](index=11&type=chunk) - To diversify revenue streams, the Group commenced a new business of providing catering services through restaurants in 2021[12](index=12&type=chunk) [Biographical Details of Directors and Senior Management](index=6&type=section&id=Biographical%20Details%20of%20Directors%20and%20Senior%20Management) This section details the personal biographies, industry experience, and roles within the Group for executive directors, non-executive directors, independent non-executive directors, and senior management. The core management team possesses extensive experience in the food and beverage industry and finance - Executive Directors Mr. Wong Siu Man (Chairman) and Mr. Wong Siu Wah (Chief Executive Officer) are brothers and controlling shareholders of the company, responsible for the Group's overall management and development strategy, and daily management and operations, respectively[16](index=16&type=chunk)[17](index=17&type=chunk) - Senior management, such as Ms. Chan Lai Yin (Financial Controller) and Ms. Kwong Hoi Sze (General Manager), possess extensive professional experience in accounting, finance, and procurement, distribution, and operations within the food and beverage industry[32](index=32&type=chunk) [Management Discussion and Analysis](index=10&type=section&id=Management%20Discussion%20and%20Analysis) This section provides an in-depth review of the Group's financial performance, liquidity, capital resources, and future outlook [Business and Financial Review](index=10&type=section&id=Business%20and%20Financial%20Review) In FY2021, the Group's total revenue increased by 11.4% year-on-year to HKD 227.7 million, primarily driven by significant sales growth in kitchen and hygiene products (especially masks) and high-value packaged foods (such as cordyceps). However, due to decreased demand from traditional catering clients amidst the pandemic and lower profit margins on newly sold products, the gross profit margin declined from 23.3% to 21.1%. Concurrently, administrative expenses surged due to approximately HKD 15.42 million in equity-settled share-based payments from share option grants, leading to an expanded full-year loss of HKD 14.62 million Revenue by Product Category (HKD thousands) | Product Category | 2021 | 2020 | Change % | | :--- | :--- | :--- | :--- | | Household & Cereal Products | 58,019 | 53,707 | 8.0% | | Packaged Food | 60,076 | 46,809 | 28.3% | | Sauces & Condiments | 41,420 | 43,728 | –5.3% | | Dairy Products & Eggs | 27,052 | 27,684 | –2.3% | | Beverages & Wines | 12,689 | 12,791 | –0.8% | | Kitchen & Hygiene Products | 28,453 | 19,649 | 44.8% | | **Total** | **227,709** | **204,368** | **11.4%** | - Sales of kitchen and hygiene products significantly increased by **44.8%** year-on-year, primarily due to immense demand for masks during the COVID-19 pandemic, with mask sales alone contributing approximately **HKD 16.13 million** in revenue[46](index=46&type=chunk) - Packaged food sales grew by **28.3%**, mainly driven by the sale of high-value products such as cordyceps and wild ginseng[45](index=45&type=chunk) - Despite revenue growth, gross profit only slightly increased to **HKD 48.07 million**, and the gross profit margin decreased from **23.3%** to **21.1%**, primarily due to lower profit margins on masks and high-value packaged foods[52](index=52&type=chunk) - Loss attributable to owners of the company expanded from **HKD 3.57 million** last year to **HKD 14.62 million**, mainly due to approximately **HKD 15.42 million** in equity-settled share-based payment expenses incurred during the year[62](index=62&type=chunk)[59](index=59&type=chunk) - The Board does not recommend the payment of any dividend for the year ended March 31, 2021[63](index=63&type=chunk) [Liquidity and Capital Resources](index=14&type=section&id=Liquidity%20and%20Capital%20Resources) As of March 31, 2021, the Group held bank balances and cash of approximately HKD 38.44 million, a decrease from the previous year. The current ratio was 6.7 times, maintaining a healthy level. The Group primarily relies on internal cash flow and proceeds from its listing to fund operations and expansion. The gearing ratio slightly increased to 7.8%, indicating overall stable financial health Liquidity and Capital Structure Indicators | Indicator | March 31, 2021 | March 31, 2020 | | :--- | :--- | :--- | | Bank Balances and Cash | HKD 38,438,000 | HKD 54,001,000 | | Current Ratio | 6.7 times | 8.3 times | | Gearing Ratio | 7.8% | 6.1% | - Trade receivables significantly increased by **95.1%** year-on-year to **HKD 38.21 million**, primarily due to increased sales demand at year-end[67](index=67&type=chunk) - The Group's capital comprises only ordinary shares, with issued share capital of **HKD 11.62 million** as of March 31, 2021, corresponding to **1,162,000,000** ordinary shares[70](index=70&type=chunk) [Significant Investments and Future Plans](index=16&type=section&id=Significant%20Investments%20and%20Future%20Plans) During the reporting period, the Group terminated the acquisition agreement for Carty (Shanghai) Biotechnology Co., Ltd., and had no other significant investment, acquisition, or disposal activities. Apart from plans already disclosed in the annual report, the Group currently has no other significant future plans for investments or capital assets - On September 30, 2020, the Group terminated the sale and purchase agreement for the acquisition of Carty (Shanghai) Biotechnology Co., Ltd[82](index=82&type=chunk) - For the year ended March 31, 2021, the Group had no significant investments, major acquisitions, or disposals of subsidiaries, associates, and joint ventures[82](index=82&type=chunk) [Use of Proceeds](index=17&type=section&id=Use%20of%20Proceeds) The Group adjusted the use of net proceeds from its listing to adapt to changing business environments. Funds originally allocated for warehouse leasing and packaging equipment acquisition were reallocated to develop catering services and supplement general working capital. As of the reporting date, approximately HKD 26.95 million in proceeds remained unutilized, primarily planned for rent payments, restaurant business development, ERP system upgrades, and marketing - The Board resolved to reallocate a portion of the unutilized net proceeds to develop new catering services through restaurants and to supplement general working capital[89](index=89&type=chunk)[95](index=95&type=chunk)[96](index=96&type=chunk) Changes in Use of Net Proceeds and Utilization (HKD thousands) | Intended Use of Net Proceeds | Revised Allocation Amount | Unutilized Amount as at Date of this Annual Report | | :--- | :--- | :--- | | Payment of warehouse lease payments | 3,278 | 2,547 | | Development of catering services through restaurants | 9,000 | 7,186 | | Upgrade of ERP system | 8,330 | 8,149 | | Sales and marketing activities | 4,444 | 4,391 | | General working capital | 5,211 | 4,675 | | **Total** | **30,263** | **26,948** | [Outlook and Risks](index=19&type=section&id=Outlook%20and%20Risks) Looking ahead, the Group maintains reasonable optimism for its core business and will actively manage uncertainties arising from the pandemic. The Group plans to expand its catering business by opening approximately 5 restaurants to achieve vertical integration and cost control. Concurrently, the Group will continue its commitment to becoming a leading food and beverage grocery distributor in Hong Kong, while monitoring key risks such as market competition, talent retention, and customer credit - The Group plans to open approximately **5** restaurants by December 31, 2022, with the first one opened in Tsim Sha Tsui in April 2021, aiming to enhance competitive advantage through vertical expansion[100](index=100&type=chunk) - Key risks faced by the Group include market competition, employee commitment and satisfaction, warehouse disruption, customer credit risk, and investment and return on capital[101](index=101&type=chunk) [Report of the Directors](index=20&type=section&id=Report%20of%20the%20Directors) This section outlines the Group's business activities, risk management, dividend policy, board composition, and statutory disclosures [Business and Risk Overview](index=20&type=section&id=Business%20and%20Risk%20Overview) During this reporting period, the Group primarily engaged in food and beverage grocery distribution, with no significant changes in business nature. The Group is committed to complying with relevant laws and regulations and maintaining good relationships with employees, customers, and suppliers. The report identifies key risks faced by the Group, including customer loss risk, economic and political risks, financial risks (foreign currency, interest rate, credit, liquidity), and talent attrition risk - The Group's principal business is food and beverage grocery distribution in Hong Kong, with no significant changes in business nature during the year[106](index=106&type=chunk) - Key risks and uncertainties include: - **Business Risks**: Potential inability to retain key customers, inventory and inventory obsolescence risks - **Economic and Political Risks**: Macroeconomic environment and government policy changes may affect strategy execution - **Financial Risks**: Exposure to foreign currency, interest rate, credit, and liquidity risks - **Personnel Risks**: Difficulty in retaining talent in a competitive market[114](index=114&type=chunk)[115](index=115&type=chunk)[116](index=116&type=chunk)[117](index=117&type=chunk) [Dividends and Reserves](index=22&type=section&id=Dividends%20and%20Reserves) The Board does not recommend a dividend for the year ended March 31, 2021. The company has adopted a dividend policy, where payout decisions will consider the Group's financial performance, capital needs, and future development. As of the end of the reporting period, the company's distributable reserves were approximately HKD 23.97 million - The Board does not recommend the payment of any dividend for the year ended March 31, 2021[119](index=119&type=chunk) - As of March 31, 2021, the amount of reserves available for distribution to shareholders was approximately **HKD 23,972,000**[130](index=130&type=chunk) [Directors and Service Contracts](index=23&type=section&id=Directors%20and%20Service%20Contracts) The report lists the directors in office during the reporting period and explains the arrangements for directors' rotation and re-election. All executive, non-executive, and independent non-executive directors have signed three-year service agreements or appointment letters with the company, and there are no service contracts that cannot be terminated without compensation within one year - During the reporting period, Ms. Chan Hoi Yee was appointed as an independent non-executive director on October 12, 2020, and Mr. Wong Ka Ho resigned on the same day[133](index=133&type=chunk) - Each executive director, non-executive director, and independent non-executive director has entered into a service agreement or appointment letter with the company for an initial term of three years[139](index=139&type=chunk) [Interests of Directors and Substantial Shareholders](index=26&type=section&id=Interests%20of%20Directors%20and%20Substantial%20Shareholders) As of March 31, 2021, controlling shareholders Mr. Wong Siu Man and Mr. Wong Siu Wah jointly held 51.88% of the company's shares through their controlled corporation, Yuan Tian Investment Limited. Other than this, no other directors or chief executives held disclosable share interests Directors' Long Positions in the Company's Shares | Name of Director | Capacity/Nature of Interest | Number of Shares | Approximate Percentage of Shareholding | | :--- | :--- | :--- | :--- | | Mr. Wong Siu Man | Interest in controlled corporation | 602,800,000 | 51.88% | | Mr. Wong Siu Wah | Interest in controlled corporation | 602,800,000 | 51.88% | - The above shares are held by Yuan Tian Investment Limited, which is beneficially owned by Mr. Wong Siu Man and Mr. Wong Siu Wah with **58.38%** and **38.92%** interests, respectively[149](index=149&type=chunk) [Share Option Scheme](index=29&type=section&id=Share%20Option%20Scheme) The company adopted a share option scheme on March 27, 2017. During the reporting period, specifically on February 19, 2021, the company granted a total of 112 million share options to Group employees under this scheme, with an exercise price of HKD 0.30 per share. As of the end of the reporting period, all these share options remained unexercised - On February 19, 2021, the company granted a total of **112,000,000** share options to Group employees[169](index=169&type=chunk) Details of Share Options Granted | Item | Details | | :--- | :--- | | Exercise Price | HKD 0.30/share | | Validity Period | February 19, 2021 to February 18, 2023 | | Closing Price on Grant Date | HKD 0.32 | | Number of Unexercised Share Options (as of 2021/3/31) | 112,000,000 options | [Other Statutory Disclosures](index=28&type=section&id=Other%20Statutory%20Disclosures) This section covers various statutory disclosures. During the reporting period, the Group had no significant connected transactions, and controlling shareholders complied with the non-competition undertaking. The company maintained sufficient public float and did not purchase, sell, or redeem any listed securities. Post-reporting period, on April 30, 2021, the company entered into a non-legally binding memorandum of understanding for a potential acquisition. Additionally, the auditor changed from BDO Limited to Evergreen (Hong Kong) CPA Limited - Controlling shareholders have confirmed compliance with the non-competition undertaking, which has been reviewed and confirmed by independent non-executive directors[163](index=163&type=chunk) - The company confirmed that it has maintained a public float of not less than **25%**[167](index=167&type=chunk) - Subsequent to the reporting period, on April 30, 2021, the company entered into a non-legally binding memorandum of understanding with Beijing Douguo Yangtian Network Technology Co., Ltd. regarding a possible acquisition[186](index=186&type=chunk) - Effective May 3, 2021, BDO Limited resigned as auditor, and Evergreen (Hong Kong) CPA Limited was appointed to fill the vacancy[190](index=190&type=chunk) [Corporate Governance Report](index=32&type=section&id=Corporate%20Governance%20Report) This section details the Group's corporate governance practices, including board structure, committee functions, risk management, and shareholder communication [The Board](index=33&type=section&id=A.%20The%20Board) The Board is responsible for the Group's overall leadership, strategy formulation, and oversight. During the reporting period, the Board comprised three executive directors, one non-executive director, and three independent non-executive directors, complying with Listing Rules requirements. The roles of Chairman and Chief Executive Officer are held by different individuals, ensuring checks and balances. Clear procedures are in place for director appointment, re-election, and continuous professional development, with detailed records of directors' meeting attendance - The company confirmed compliance with all code provisions of the Corporate Governance Code during the reporting period[194](index=194&type=chunk) - The roles of Chairman (Mr. Wong Siu Man) and Chief Executive Officer (Mr. Wong Siu Wah) are clearly separated, with the former leading the Board and the latter responsible for daily management[206](index=206&type=chunk) Directors' Meeting Attendance Record (for the year ended 2021/3/31) | Name of Director | Board | Remuneration Committee | Audit Committee | Nomination Committee | General Meeting | | :--- | :--- | :--- | :--- | :--- | :--- | | Mr. Wong Siu Man | 9/9 | N/A | N/A | N/A | 1/1 | | Mr. Wong Siu Wah | 9/9 | N/A | N/A | N/A | 1/1 | | Mr. Yip Kam Cheong | 9/9 | N/A | N/A | N/A | 1/1 | | Mr. Wong Chun Hung | 9/9 | N/A | N/A | N/A | 1/1 | | Ms. Chan Hoi Yee | 4/4 | N/A | 2/2 | N/A | N/A | | Mr. Ng Fan Kei | 9/9 | 1/1 | 4/4 | 1/1 | 1/1 | | Mr. Wong Siu Bun | 9/9 | 1/1 | 4/4 | 1/1 | 1/1 | | Mr. Wong Ka Ho (resigned) | 5/5 | 1/1 | 2/2 | 1/1 | 1/1 | [Board Committees](index=39&type=section&id=B.%20Board%20Committees) The Group has established three Board committees: Audit, Nomination, and Remuneration, all composed of independent non-executive directors with clear written terms of reference. The Audit Committee oversees financial reporting and internal control systems; the Nomination Committee reviews board structure and director nominations; and the Remuneration Committee determines directors' and senior management's remuneration. Each committee held meetings during the reporting period to fulfill its duties - The Audit Committee, Nomination Committee, and Remuneration Committee are all composed of independent non-executive directors, with the chairpersons also being independent non-executive directors[225](index=225&type=chunk)[230](index=230&type=chunk)[236](index=236&type=chunk) - The Audit Committee reviewed quarterly, interim, and annual financial statements and recommended the re-appointment of external auditors[226](index=226&type=chunk) Fees Paid to Auditors (HKD thousands) | Nature of Service | 2021 | 2020 | | :--- | :--- | :--- | | Audit Services | 650 | 750 | | Non-audit related services | – | 10 | - The company has adopted a Board Diversity Policy and a Nomination Policy to ensure the Board possesses a balanced mix of skills, experience, and diverse perspectives[232](index=232&type=chunk)[235](index=235&type=chunk) [Risk Management and Internal Control](index=45&type=section&id=G.%20Risk%20Management%20and%20Internal%20Control) The Board bears overall responsibility for the Group's risk management and internal control systems. During the reporting period, the Group engaged an independent internal control consultant to review the systems and adopted their optimization recommendations. The Board considers the existing risk management and internal control measures effective and adequate. The Group currently does not have an internal audit function but reviews its necessity annually - The Board has reviewed and deemed the Group's financial, operational, compliance controls, and risk management mechanisms to be adequate[250](index=250&type=chunk) - The Group engaged an independent third-party consultant to review its internal control system and implemented optimizations based on their recommendations[251](index=251&type=chunk) - Key risks identified by the Group are categorized into four types: - **Strategic Risks**: Market competition - **Operational Risks**: Employee commitment and satisfaction, warehouse operation disruption - **Financial Risks**: Customer credit risk, capital investment and return - **Compliance Risks**: Regulatory changes[257](index=257&type=chunk) [Shareholders' Rights and Communication](index=47&type=section&id=J.%20Shareholders%27%20Rights) The company clarifies shareholders' rights, including the right of shareholders holding not less than 10% of the paid-up capital to requisition an extraordinary general meeting, and procedures for nominating director candidates. The company maintains communication with shareholders and investors through various channels such as annual reports, interim reports, website announcements, and general meetings to ensure fair information disclosure - Shareholders holding not less than one-tenth of the paid-up capital have the right to requisition the Board to convene an extraordinary general meeting[265](index=265&type=chunk) - The company has established multiple communication channels, including corporate communications, website updates, and general meetings, to facilitate effective communication with shareholders[270](index=270&type=chunk) [Environmental, Social and Governance Report](index=50&type=section&id=Environmental%2C%20Social%20and%20Governance%20Report) This section details the Group's commitment and performance in environmental protection, social responsibility, and corporate governance [Environmental Aspect](index=51&type=section&id=Environmental%20Aspect) In terms of environmental aspects, the Group is committed to energy conservation, emission reduction, and efficient resource utilization. During the reporting period, total greenhouse gas emissions were approximately 114.1 tonnes of CO2 equivalent, primarily from electricity consumption. The Group promotes waste reduction at source, prioritizes environmentally friendly or recyclable packaging materials, and implements water and electricity saving measures. There were no significant environmental violations during the reporting period Greenhouse Gas Emissions (tonnes of CO2 equivalent) | Scope | Quantity | | :--- | :--- | | Scope 1 – Direct Emissions | 3.4 | | Scope 2 – Energy Indirect Emissions | 110.7 | | **Total GHG Emissions** | **114.1** | Resource Utilization | Resource Category | Quantity | Unit | | :--- | :--- | :--- | | Total Energy Consumption | 229.0 | MWh equivalent | | Total Water Consumption | 219.6 | cubic meters | | Total Packaging Material | 49.9 | tonnes | - The Group's total non-hazardous waste generated was **0.67 tonnes**, primarily daily office waste[291](index=291&type=chunk) [Social Aspect](index=54&type=section&id=Social%20Aspect) On the social front, the Group focuses on employee rights, health and safety, development and training, supply chain management, product responsibility, anti-corruption, and community engagement. As of the end of the reporting period, the Group had 50 employees and strictly complied with labor laws, prohibiting child and forced labor. The Group prioritizes food safety, establishing stringent product quality control and after-sales procedures. Additionally, the Group actively participates in community welfare activities and has received multiple social responsibility-related awards - As of the end of the reporting period, the Group had **50** employees, comprising **27** females and **23** males. **49** were full-time employees[304](index=304&type=chunk)[305](index=305&type=chunk)[309](index=309&type=chunk) - Regarding health and safety, no work-related injuries, fatalities, or accidents were reported during the period[318](index=318&type=chunk) - In terms of product responsibility, the Group strictly adheres to food safety regulations, with no products recalled due to safety or health reasons during the reporting period[333](index=333&type=chunk) - The Group maintains a zero-tolerance policy towards corruption, with no related violations or legal cases during the reporting period[336](index=336&type=chunk) - The Group actively participates in community affairs, making cash and material donations to organizations such as Lions Club of Hong Kong Peace and Hong Kong Federation of Youth Groups, and organizing volunteer services[340](index=340&type=chunk)[341](index=341&type=chunk) [Consolidated Financial Statements and Auditor's Report](index=63&type=section&id=Consolidated%20Financial%20Statements%20and%20Auditor%27s%20Report) This section presents the Group's audited consolidated financial statements, including the auditor's report, income statement, balance sheet, cash flow statement, and detailed notes [Independent Auditor's Report](index=63&type=section&id=Independent%20Auditor%27s%20Report) The auditor, Evergreen (Hong Kong) CPA Limited, issued an unqualified opinion on the Group's consolidated financial statements for the year ended March 31, 2021, deeming them to present a true and fair view of the Group's financial position and performance. The report specifically highlighted two key audit matters: inventory valuation and the assessment of expected credit losses on trade receivables - The auditor believes that the consolidated financial statements present a true and fair view of the Group's financial position and performance in accordance with Hong Kong Financial Reporting Standards and comply with relevant disclosure requirements[357](index=357&type=chunk) - Key audit matters are: - **Inventory Valuation**: Involves estimates for provisions against slow-moving and obsolete inventory - **Provision for Expected Credit Losses on Trade Receivables**: Involves significant management judgment and estimates[361](index=361&type=chunk) [Consolidated Statement of Profit or Loss and Other Comprehensive Income](index=69&type=section&id=Consolidated%20Statement%20of%20Profit%20or%20Loss%20and%20Other%20Comprehensive%20Income) For the year ended March 31, 2021, the Group recorded revenue of HKD 227.7 million, an 11.4% year-on-year increase. However, due to a significant increase in administrative expenses (especially equity-settled share-based payments), the loss before tax expanded to HKD 14.38 million, with a total loss and comprehensive expenses for the year of HKD 14.62 million Consolidated Statement of Profit or Loss Summary (HKD thousands) | Item | 2021 | 2020 | | :--- | :--- | :--- | | Revenue | 227,709 | 204,368 | | Gross Profit | 48,070 | 47,618 | | Loss Before Tax | (14,376) | (3,280) | | Loss and Total Comprehensive Expense for the Year | (14,618) | (3,573) | | Basic Loss Per Share (HK cents) | (1.26) | (0.31) | [Consolidated Statement of Financial Position](index=70&type=section&id=Consolidated%20Statement%20of%20Financial%20Position) As of March 31, 2021, the Group's total assets were HKD 124 million, total liabilities were HKD 20.51 million, and net assets were HKD 103.6 million, largely consistent with the previous year. Current assets significantly increased, mainly reflected in the growth of trade receivables, while bank balances and cash decreased Consolidated Statement of Financial Position Summary (HKD thousands) | Item | March 31, 2021 | March 31, 2020 | | :--- | :--- | :--- | | **Assets** | | | | Non-current Assets | 13,363 | 11,609 | | Current Assets | 110,700 | 107,311 | | **Total Assets** | **124,063** | **118,920** | | **Liabilities and Equity** | | | | Current Liabilities | 16,616 | 12,911 | | Non-current Liabilities | 3,895 | 3,258 | | **Total Liabilities** | **20,511** | **16,169** | | **Net Assets** | **103,552** | **102,751** | | **Total Equity** | **103,552** | **102,751** | [Consolidated Statement of Cash Flows](index=72&type=section&id=Consolidated%20Statement%20of%20Cash%20Flows) For the year ended March 31, 2021, the Group's net cash used in operating activities was HKD 10.62 million, primarily due to a significant increase in trade receivables. Net cash outflow from investing activities was HKD 1.85 million, and net cash outflow from financing activities was HKD 3.10 million. Cash and cash equivalents decreased by HKD 15.56 million, with an ending balance of HKD 38.44 million Consolidated Statement of Cash Flows Summary (HKD thousands) | Item | 2021 | 2020 | | :--- | :--- | :--- | | Net cash used in operating activities | (10,617) | (3,561) | | Net cash used in investing activities | (1,849) | (4,146) | | Net cash used in financing activities | (3,097) | (3,037) | | **Net decrease in cash and cash equivalents** | **(15,563)** | **(10,744)** | | Cash and cash equivalents at beginning of year | 54,001 | 64,745 | | **Cash and cash equivalents at end of year** | **38,438** | **54,001** | [Notes to the Consolidated Financial Statements](index=74&type=section&id=Notes%20to%20the%20Consolidated%20Financial%20Statements) The notes to the financial statements provide detailed explanations and supplementary information for financial statement items, covering the company's principal accounting policies, accounting estimates, details of various assets and liabilities, revenue composition, related party transactions, share option scheme, capital risk management, and post-reporting period events - Note 5 discloses that all the Group's revenue is derived from Hong Kong, with packaged food and household & cereal products being the two largest revenue sources by product category[570](index=570&type=chunk)[573](index=573&type=chunk) - Note 26 details the terms of the share option scheme and discloses the valuation method and parameters for the **112 million** share options granted on February 19, 2021, with an estimated fair value of **HKD 15.42 million**[660](index=660&type=chunk)[665](index=665&type=chunk) - Note 32 discloses a post-reporting period event: on April 30, 2021, the company entered into a non-legally binding memorandum of understanding for the possible acquisition of Beijing Douguo Information Technology Co., Ltd[711](index=711&type=chunk) [Financial Summary](index=127&type=section&id=Financial%20Summary) This section provides a concise overview of the Group's key financial performance and position over the past five fiscal years [Five-Year Financial Summary](index=127&type=section&id=Five-Year%20Financial%20Summary) This section provides a summary of the Group's key performance and financial position data for the past five fiscal years. The data shows steady revenue growth over the past five years, but profitability has fluctuated, with losses recorded in the most recent two fiscal years. Total assets and net assets remained relatively stable after significant growth in FY2019 Five-Year Performance Summary (HKD thousands) | For the year ended March 31 | 2021 | 2020 | 2019 | 2018 | 2017 | | :--- | :--- | :--- | :--- | :--- | :--- | | Revenue | 227,709 | 204,368 | 213,926 | 194,137 | 188,298 | | Loss/Profit Before Tax | (14,376) | (3,280) | 4,931 | 3,821 | 738 | | Loss/Profit for the Year | (14,618) | (3,573) | 3,909 | 2,394 | (1,824) | Five-Year Assets and Liabilities Summary (HKD thousands) | As at March 31 | 2021 | 2020 | 2019 | 2018 | 2017 | | :--- | :--- | :--- | :--- | :--- | :--- | | Non-current Assets | 13,363 | 11,609 | 4,571 | 5,385 | 4,364 | | Current Assets | 110,700 | 107,311 | 110,065 | 106,119 | 51,353 | | Total Net Assets | 103,552 | 102,751 | 106,324 | 102,415 | 33,497 |

Financial Performance - The group recorded revenue of approximately HKD 176,930,000 for the nine months ended December 31, 2020, compared to HKD 149,084,000 for the same period in 2019, representing an increase of 18.7%[4] - Profit attributable to owners of the company for the nine months ended December 31, 2020, was approximately HKD 2,196,000, up from HKD 678,000 for the same period in 2019, reflecting a growth of 224.3%[4] - Gross profit for the nine months ended December 31, 2020, was HKD 35,418,000, compared to HKD 36,257,000 for the same period in 2019, indicating a slight decrease of 2.3%[4] - The company reported a pre-tax profit of HKD 2,502,000 for the nine months ended December 31, 2020, compared to HKD 1,066,000 for the same period in 2019, marking an increase of 134.0%[4] - The company’s total comprehensive income for the nine months ended December 31, 2020, was HKD 2,196,000, compared to HKD 678,000 for the same period in 2019, reflecting a growth of 224.3%[4] - Other income for the nine months ended December 31, 2020, was HKD 2,513,000, compared to HKD 408,000 for the same period in 2019, representing a significant increase of 516.4%[4] - For the three months ended December 31, 2020, total revenue was HKD 72,570,000, an increase of 43.7% compared to HKD 50,479,000 for the same period in 2019[23] - The revenue from packaged food increased significantly to HKD 31,249,000 for the three months ended December 31, 2020, compared to HKD 11,463,000 in the same period of 2019, representing a growth of 173.5%[23] - Basic earnings per share for the nine months ended December 31, 2020, were HKD 2,196,000, compared to HKD 678,000 in the same period of 2019, indicating a significant increase[36] Expenses and Costs - Total sales and distribution expenses for the nine months ended December 31, 2020, were HKD 17,136,000, compared to HKD 16,961,000 for the same period in 2019, showing an increase of 1.0%[4] - The total employee costs for the nine months ended December 31, 2020, amounted to HKD 12,388,000, an increase of 7.2% from HKD 11,552,000 in the same period of 2019[31] - The cost of sales for the nine months ended December 31, 2020, was approximately HKD 141,512,000, an increase of about 25.4% from approximately HKD 112,827,000 for the same period in 2019[44] - Administrative expenses increased from approximately HKD 17,672,000 to about HKD 18,060,000, mainly due to rising employee costs and legal fees[50] - Financing costs rose to approximately HKD 217,000 from about HKD 6,000 in the same period of 2019[51] Dividends and Shareholder Information - The board of directors did not recommend the payment of any dividend for the nine months ended December 31, 2020, consistent with the previous year[4] - The company did not declare or recommend any dividends for the nine months ended December 31, 2020, consistent with the previous year[35] - As of December 31, 2020, the company had a total of 1,162,000,000 issued ordinary shares[68] - Mr. Huang Shaowen and Mr. Huang Shaohua each hold 602,800,000 shares, representing approximately 51.88% of the total shares[68] - The shareholding structure indicates that the controlling shareholders have significant influence over the company, with Mr. Huang Shaowen and Mr. Huang Shaohua holding substantial stakes[69] Assets and Liabilities - The company’s total assets as of December 31, 2020, were HKD 104,947,000, compared to HKD 106,324,000 as of December 31, 2019, indicating a decrease of 1.3%[13] - As of December 31, 2020, the group's bank balance and cash amounted to approximately HKD 34,415,000, down from HKD 54,001,000 as of March 31, 2020[56] - The current ratio as of December 31, 2020, was 7.8 times, compared to 8.3 times as of March 31, 2020[56] - The total interest-bearing borrowings as of December 31, 2020, were HKD 3,891,000, a decrease from HKD 6,297,000 as of March 31, 2020, resulting in a debt-to-equity ratio of 3.7%[58] Strategic Goals and Future Plans - The company plans to utilize approximately HKD 12,560,000 to upgrade its ERP system to enhance operational efficiency[64] - Approximately HKD 5,540,000 is allocated for sales and marketing activities to attract more customers and increase loyalty[64] - The company is actively leasing two warehouse facilities to accommodate increased inventory due to rising customer orders[63] - The board is committed to strategic goals including enhancing market position in the food and beverage distribution sector and improving operational efficiency[63] - The management team is focused on exploring opportunities for business diversification to enhance and broaden the customer base[66] - The company remains cautiously optimistic about maintaining core business amidst economic uncertainties caused by COVID-19[66] Compliance and Governance - The company confirmed compliance with the corporate governance code as of December 31, 2020[82] - The company has adopted a set of securities trading rules for directors, ensuring compliance with GEM Listing Rules[75] - The audit committee was established in accordance with GEM Listing Rules and consists of three independent non-executive directors[87] - The audit committee reviewed the unaudited consolidated results for the nine months ended December 31, 2020, and confirmed compliance with applicable accounting standards and GEM Listing Rules[87] - The executive directors include the chairman and CEO, indicating a strong leadership structure within the company[88] Market and Operational Insights - The company operates primarily in the trade and distribution of food and beverage grocery products in Hong Kong[16] - The company’s customer contracts are fixed-price contracts, and all customers are located in Hong Kong[25] - Sales of kitchen and hygiene products increased by approximately HKD 16,850,000 to about HKD 25,050,000, driven by heightened hygiene awareness due to the COVID-19 pandemic[42] - Mask sales contributed approximately HKD 16,126,000 to the company's revenue, compensating for the decline in food and beverage product sales[42] Other Income and Losses - Other income increased from approximately HKD 408,000 to about HKD 2,513,000, primarily due to government subsidies under the "Employment Support Scheme"[46] - The company recorded a net loss of approximately HKD 16,000 from other income and losses, compared to a net loss of about HKD 960,000 in the same period of 2019[47] - Interest expenses related to lease liabilities for the three months ended December 31, 2020, were HKD 62,000, compared to HKD 2,000 in the same period of 2019[29] - Other income, including government subsidies, amounted to HKD 7,809,000 for the three months ended December 31, 2020, compared to HKD 0 in the same period of 2019[28] No Significant Matters - No significant matters affecting the group were identified after December 31, 2020, up to the report date[84] - No directors or major shareholders had interests in any business that competes directly or indirectly with the group as of December 31, 2020[76] - The company has established internal control policies regarding the disclosure of inside information[75] - There were no purchases, sales, or redemptions of the company's listed securities by the company or its subsidiaries during the nine months ended December 31, 2020[80] - The company has not granted, exercised, or cancelled any options under the share option scheme since its adoption on March 27, 2017[74]

Asia Grocery Distribution Limited 亞洲雜貨有限公司 (於開曼群島註冊成立的有限公司) 股份代號 : 8413 中期報告2020/21 香港聯合交易所有限公司（「聯交所」）GEM之特色 GEM的定位，乃為相比起其他在聯交所上市的公司帶有較高投資風險的中小型公司提供一個上市 的市場。有意投資的人士應了解投資於該等公司的潛在風險，並應經過審慎周詳的考慮後方作出投 資決定。 由於GEM 上市公司普遍為中小型公司，在GEM 買賣的證券可能會較於主板買賣之證券承受較大 的市場波動風險，同時無法保證在GEM買賣的證券會有高流通量的市場。 香港交易及結算所有限公司及聯交所對本中期報告的內容概不負責，對其準確性或完整性亦不發 表任何聲明，並明確表示，概不對因本中期報告全部或任何部份內容而產生或因倚賴該等內容而引 致的任何損失承擔任何責任。 本中期報告乃根據聯交所GEM證券上市規則（「GEM上市規則」）提供有關亞洲雜貨有限公司（「本 公司」）之資料，本公司董事（「董事」）願就本中期報告之內容共同及個別承擔全部責任。董事在作 出一切合理查詢後確認，據彼等所深知及確信，本報告所載之資料於各重大方面均 ...

Financial Performance - The company recorded revenue of approximately HKD 61,032,000 for the three months ended June 30, 2020, compared to HKD 49,003,000 for the same period in 2019, representing a growth of 24.6%[4] - The profit attributable to owners of the company for the three months ended June 30, 2020, was approximately HKD 1,250,000, a significant improvement from a loss of HKD 163,000 in the same period of 2019[4] - The total comprehensive income for the three months ended June 30, 2020, was HKD 1,250,000, compared to a total comprehensive loss of HKD 163,000 for the same period in 2019[7] - The company reported a pre-tax profit of HKD 1,433,000 for the three months ended June 30, 2020, compared to a pre-tax loss of HKD 119,000 in the same period of 2019[7] - The company reported a pre-tax profit of HKD 1,250,000 for the three months ended June 30, 2020, compared to a loss of HKD 163,000 in the same period in 2019[36] Revenue and Sales Breakdown - The sales breakdown by product category for the three months ended June 30, 2020, included daily necessities and grain products at HKD 13,120,000, packaged foods at HKD 9,179,000, and sauces and seasonings at HKD 9,857,000[21] - Sales of kitchen and hygiene products surged, contributing approximately HKD 15,920,000 in sales from masks alone, which helped offset declines in food and beverage product sales[40] - The company experienced a significant increase in sales of kitchen and hygiene products, with total sales reaching approximately HKD 18,862,000 for the three months ended June 30, 2020, compared to HKD 2,742,000 in the same period in 2019[40] Costs and Expenses - The cost of sales for the three months ended June 30, 2020, was approximately HKD 49,230,000, an increase of about 32.7% from approximately HKD 37,090,000 for the same period in 2019[42] - The company's administrative expenses for the three months ended June 30, 2020, were HKD 6,160,000, slightly lower than HKD 5,849,000 for the same period in 2019[7] - The group's administrative expenses rose from approximately HKD 5,849,000 to about HKD 6,160,000, mainly due to increased legal and professional fees[48] - The financing costs for the three months ended June 30, 2020, were HKD 83,000, compared to HKD 2,000 in the same period of 2019[7] - Financing costs increased significantly to approximately HKD 83,000 from about HKD 2,000, attributed to interest expenses on finance leases[49] Equity and Financial Position - The total equity attributable to owners of the company increased to HKD 104,001,000 as of June 30, 2020, up from HKD 106,161,000 as of June 30, 2019[9] - The group's cash and bank balances were approximately HKD 58,489,000 as of June 30, 2020, up from HKD 54,001,000 as of March 31, 2020, with a current ratio of 7.0 times[56] - The group's gearing ratio was approximately 5.3% as of June 30, 2020, down from 6.1% as of March 31, 2020[57] Dividends - The company did not recommend the payment of any dividend for the three months ended June 30, 2020, consistent with the previous year[4] - The company did not declare any dividends for the three months ended June 30, 2020, nor for the same period in 2019[35] - The company did not declare or recommend any dividends for the period, consistent with the previous year[52] Future Outlook and Strategy - The company anticipates that the economic recovery in Hong Kong will take time, potentially impacting performance until the end of 2020[39] - The group plans to strategically increase warehouse facilities near customers and upgrade its ERP system to enhance operational efficiency[62] - The company aims to diversify its business and strengthen its customer base to maintain a competitive advantage in the market[66] - The board is actively assessing and managing uncertainties and will take necessary actions to navigate challenges[65] Corporate Governance - The company is committed to maintaining high standards of corporate governance, which is essential for effective and transparent operations[82] - The audit committee, composed of three independent non-executive directors, has reviewed the unaudited consolidated results for the three months ending June 30, 2020, ensuring compliance with applicable accounting standards[88] - The company has adopted a securities trading code for directors, confirming compliance with the GEM Listing Rules for the three months ending June 30, 2020[77] Shareholder Information - As of June 30, 2020, major shareholders hold approximately 51.88% of the company's shares, totaling 602,800,000 shares[68] - No stock options have been granted, exercised, or canceled under the stock option plan as of June 30, 2020[76] - No directors or controlling shareholders have interests in any business that competes or may compete with the group as of June 30, 2020[78] - The controlling shareholders have confirmed no engagement in any competing business and have adhered to the non-competition agreement since the company's listing[79] Other Income - The company’s total other income for the three months ended June 30, 2020, was HKD 1,069,000, compared to HKD 116,000 in the same period in 2019[26] - Other income increased significantly from approximately HKD 116,000 to about HKD 1,069,000, primarily due to government subsidies under the "Employment Support Scheme" during the pandemic[44]

Asia Grocery Distribution Limited 亞洲雜貨有限公司 (於開曼群島註冊成立的有限公司) 股份代號 : 8413 2019/20 第三季度 報 告 香港聯合交易所有限公司（「聯交所」）GEM之特色 GEM的定位，乃為相比起其他在聯交所上市的公司帶有較高投資風險的中小型公司提供一個上市 的市場。有意投資的人士應了解投資於該等公司的潛在風險，並應經過審慎周詳的考慮後方作出投 資決定。 由於GEM 上市公司普遍為中小型公司，在GEM 買賣的證券可能會較於主板買賣之證券承受較大 的市場波動風險，同時無法保證在GEM買賣的證券會有高流通量的市場。 香港交易及結算所有限公司及香港聯合交易所有限公司對本報告的內容概不負責，對其準確性或 完整性亦不發表任何聲明，並明確表示，概不對因本報告全部或任何部份內容而產生或因倚賴該等 內容而引致的任何損失承擔任何責任。 本季度報告乃根據聯交所GEM證券上市規則（「GEM上市規則」）提供有關亞洲雜貨有限公司（「本 公司」）之資料，本公司董事（「董事」）願就本季度報告之內容共同及個別承擔全部責任。董事在作 出一切合理查詢後確認，據彼等所深知及確信，本報告所載之 ...

Asia Grocery Distribution Limited 亞洲雜貨有限公司 (於開曼群島註冊成立的有限公司) 股份代號 : 8413 中期報告 2019/20 香港聯合交易所有限公司（「聯交所」）GEM之特色 GEM的定位，乃為相比起其他在聯交所上市的公司帶有較高投資風險的中小型公司提供一個上市 的市場。有意投資的人士應了解投資於該等公司的潛在風險，並應經過審慎周詳的考慮後方作出投 資決定。 由於GEM 上市公司普遍為中小型公司，在GEM 買賣的證券可能會較於主板買賣之證券承受較大 的市場波動風險，同時無法保證在GEM買賣的證券會有高流通量的市場。 香港交易及結算所有限公司及香港聯合交易所有限公司對本報告的內容概不負責，對其準確性或 完整性亦不發表任何聲明，並明確表示，概不對因本報告全部或任何部份內容而產生或因倚賴該等 內容而引致的任何損失承擔任何責任。 本報告乃根據聯交所GEM證券上市規則（「GEM上市規則」）提供有關亞洲雜貨有限公司（「本公司」） 之資料，本公司董事（「董事」）願就本報告之內容共同及個別承擔全部責任。董事在作出一切合理 查詢後確認，據彼等所深知及確信，本報告所載之資料於各重大方面 ...

Financial Performance - The company recorded revenue of approximately HKD 49,003,000 for the three months ended June 30, 2019, representing an increase of 5% compared to HKD 46,389,000 for the same period in 2018[4]. - The loss attributable to owners of the company for the three months ended June 30, 2019, was approximately HKD 163,000, compared to a profit of HKD 241,000 for the same period in 2018[4]. - The gross profit for the three months ended June 30, 2019, was HKD 11,913,000, an increase from HKD 11,059,000 in the same period of 2018[9]. - The company’s total comprehensive income for the period was a loss of HKD 163,000, compared to a total comprehensive income of HKD 241,000 in the same period of 2018[11]. - The company’s basic loss per share for the three months ended June 30, 2019, was HKD (0.01), compared to earnings per share of HKD 0.02 in the same period of 2018[12]. - The company recorded a net loss of approximately HKD 927,000 due to losses from the sale of properties, plants, and equipment for the three months ended June 30, 2019[60]. Revenue and Expenses - The cost of sales for the three months ended June 30, 2019, was approximately HKD 37,090,000, an increase of about HKD 1,760,000 or approximately 5.0% from HKD 35,330,000 for the same period in 2018[57]. - Total employee costs for the three months ended June 30, 2019, amounted to HKD 3,565,000, compared to HKD 3,287,000 for the same period in 2018, reflecting an increase in salaries and benefits[42]. - The company's sales and distribution expenses increased to HKD 5,370,000 for the three months ended June 30, 2019, compared to HKD 4,930,000 in the same period in 2018[9]. - Sales and distribution expenses increased to approximately 11.0% of total revenue for the three months ended June 30, 2019, compared to 10.6% for the same period in 2018[62]. - Administrative expenses rose from approximately HKD 5,739,000 for the three months ended June 30, 2018, to approximately HKD 5,849,000 for the same period in 2019, primarily due to increased rental costs from a new office and warehouse[63]. Dividends - The company did not recommend any dividend payment for the three months ended June 30, 2019, consistent with the same period in 2018[4]. - No dividends were declared or proposed for the three months ended June 30, 2019, consistent with the same period in 2018[68]. - The company did not recommend any dividend payments for the three months ended June 30, 2019, and 2018, maintaining a consistent policy since its establishment[50]. Assets and Liabilities - The company’s total equity as of June 30, 2019, was HKD 106,161,000, a decrease from HKD 106,324,000 as of April 1, 2019[16]. - As of June 30, 2019, the company's cash and bank balances were approximately HKD 62,314,000, down from approximately HKD 64,745,000 as of March 31, 2019[69]. - The company's total interest-bearing borrowings were approximately HKD 268,000 as of June 30, 2019, compared to HKD 285,000 as of March 31, 2019, resulting in a debt-to-equity ratio of 0.3%[70]. Strategic Initiatives - The company anticipates continued market competition and is focusing on controlling expenses while investing in sales and marketing activities to enhance its market share[54]. - The company aims to enhance its position in the food and beverage grocery distribution industry through strategic warehouse expansions and improved operational efficiency[75]. - The company plans to invest approximately HKD 3,500,000 in new repackaging equipment to further automate and enhance efficiency in the repackaging process[78]. - The company has selected a new ERP software for installation, with approximately HKD 2,909,000 allocated for consulting services and software and hardware acquisition[75]. - The company plans to lease two warehouse facilities to accommodate increased inventory levels, although the leasing process has been delayed due to rising rental prices in the market[75]. Corporate Governance - The company emphasizes the importance of high standards of corporate governance to protect shareholder interests[95]. - The company has adhered to the corporate governance code as per GEM listing rules during the three months ending June 30, 2019[96]. - The audit committee has reviewed the unaudited consolidated results for the three months ending June 30, 2019, and confirmed compliance with applicable accounting standards and GEM listing rules[101]. - The company has established an audit committee in accordance with GEM listing rules to oversee financial reporting processes[101]. - The chairman and executive directors are responsible for the company's operations and governance practices[102]. Shareholder Information - As of June 30, 2019, the total number of issued ordinary shares is 1,162,000,000[80]. - Major shareholders, including Mr. Huang Shaowen and Mr. Huang Shaohua, hold 602,800,000 shares each, representing 51.88% of the total shares[83]. - There were no stock options granted, exercised, lapsed, or cancelled under the stock option plan as of June 30, 2019[89]. - The company and its subsidiaries did not purchase, sell, or redeem any of its listed securities during the three months ended June 30, 2019[94].

Financial Performance - The company's revenue for the year ended March 31, 2019, was approximately HKD 213,926,000, representing a 10.2% increase from approximately HKD 194,137,000 for the same period in 2018[35]. - The gross profit for the year ended March 31, 2019, was approximately HKD 47,983,000, slightly down from approximately HKD 47,987,000 in 2018, resulting in a gross margin decrease to 22.4% from 24.7%[44]. - The cost of sales for the year ended March 31, 2019, was approximately HKD 165,943,000, an increase of approximately 13.5% from approximately HKD 146,150,000 in 2018, due to increased sales volume and higher procurement costs[43]. - Other income rose from approximately HKD 61,000 in 2018 to approximately HKD 387,000 in 2019, mainly due to increased interest income from fixed-term bank deposits[47]. - The group recorded a net income of approximately HKD 15,000 for the year ended March 31, 2019, compared to a net loss of approximately HKD 149,000 for the previous year, primarily due to the reversal of bad debt provisions[48]. - Sales and distribution expenses accounted for approximately 9.6% of total revenue for the year ended March 31, 2019, compared to 10.0% for the previous year, with increases attributed to transportation costs and advertising expenses[49]. - Administrative expenses increased from approximately HKD 22,610,000 for the year ended March 31, 2018, to approximately HKD 22,825,000 for the year ended March 31, 2019, mainly due to increased salaries for administrative staff[50]. - Trade receivables increased by 54.7% from approximately HKD 20,931,000 as of March 31, 2018, to approximately HKD 32,375,000 as of March 31, 2019, due to significant sales at the end of the reporting period[59]. - Trade payables decreased by 27.3% from approximately HKD 6,687,000 as of March 31, 2018, to approximately HKD 4,861,000 as of March 31, 2019, primarily due to surplus cash on hand[60]. - The group's cash and bank balances were approximately HKD 64,745,000 as of March 31, 2019, compared to approximately HKD 54,007,000 as of March 31, 2018, indicating improved liquidity[63]. Market and Business Strategy - The company plans to enhance its marketing team to improve communication with customers and expand market share[13]. - The company aims to provide a one-stop service solution for food and beverage distribution, including procurement, repackaging, quality assurance, and logistics[13]. - The company has been investing resources in sales and marketing activities, including participation in local food exhibitions[13]. - The company anticipates facing significant challenges in 2019/2020 due to external uncertainties and rising operational costs[12]. - The company is exploring opportunities for market expansion and new product development to enhance its competitive edge[24]. - The management emphasizes the importance of strategic partnerships and collaborations to drive growth and innovation in the industry[26]. - The company remains committed to expanding its market share in the food and beverage distribution sector through new product development and strategic marketing initiatives[36]. - The company plans to continue expanding to become a leading distributor in the food and beverage grocery sector in Hong Kong[87]. Corporate Governance - The independent non-executive directors bring a wealth of experience in accounting, finance, and corporate governance, contributing to the company's strategic oversight[22]. - The company is committed to maintaining high standards of corporate governance through its audit and remuneration committees[25]. - The board consists of three executive directors, one non-executive director, and three independent non-executive directors, ensuring a balance of skills, experience, and diversity[180]. - The company complies with GEM listing rules, maintaining at least three independent non-executive directors, with at least one possessing appropriate professional qualifications and financial management expertise[180]. - The chairman and CEO roles are separated, with the chairman leading major decisions and business strategy implementation[183]. - The board meets at least four times a year to review financial statements, operational performance, and overall strategy[193]. - The company has established service agreements for executive directors for an initial term of three years, subject to re-election[184]. - The board ensures that all directors receive timely and reliable information regarding board matters[183]. - The company has a structured process for appointing and re-electing directors at the annual general meeting[184]. Shareholder Information - The company’s major shareholders, Mr. Huang Shaowen and Mr. Huang Shaohua, each hold 602,800,000 shares, representing approximately 51.88% of the total issued shares as of March 31, 2019[130]. - The company had a total of 1,162,000,000 issued ordinary shares, with major shareholder Yuantian holding 602,800,000 shares, representing approximately 51.88% of the total[134]. - The beneficial ownership of Yuantian is divided among its executive directors, with Mr. Huang Shaowen holding 58.38%, Mr. Huang Shaohua holding 38.92%, and Rongzhi holding 2.7%[135]. - The board does not recommend the payment of a dividend for the year ended March 31, 2019[104]. - The company has adopted a dividend policy that allows the board to declare and pay dividends at its discretion, subject to shareholder approval[106]. - The board will periodically review the dividend policy but cannot guarantee the payment of any specific amount of dividend in any given period[107]. Operational Risks and Challenges - The company faces significant risks including market competition, employee satisfaction, and customer credit risk, which could impact operational performance[87]. - The company may face challenges in retaining talent in a competitive market, which could impact its business and financial performance[102]. - The company faced financial risks related to foreign currency, interest rates, credit, and liquidity in its daily operations[101]. Community and Social Responsibility - The company has been actively involved in various charitable and community organizations, enhancing its corporate social responsibility profile[21]. - The company is committed to adhering to applicable environmental laws and minimizing negative impacts from its business activities[94].