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公告的內容概不負責， 對其準確性或完整性亦不發表任何聲明，並明確表示，概不對因本公告全部或任 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。 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） 截至二零二三年三月三十一日止年度之全年業績公告 亞洲雜貨有限公司（「本公司」）董事（「董事」）會（「董事會」）欣然公佈本公司及其 附屬公司截至二零二三年三月三十一日止年度之全年業績。本公告載列本公司二 零二三年全年報告全文，符合香港聯合交易所有限公司GEM證券上市規則內有關 全年業績初步公告附載資料的相關規定。 承董事會命 亞洲雜貨有限公司 主席兼執行董事 黃少文 香港，二零二三年六月二十六日 於本公告日期，執行董事為黃少文先生（主席）、黃少華先生（行政總裁）及葉錦昌 先生（合規主任），非執行董事為黃俊雄先生，而獨立非執行董事為吳奮基先生、王 兆斌先生及陳愷兒小姐。 ...

Financial Performance - The group recorded revenue of approximately HKD 215,358,000 for the nine months ended December 31, 2022, representing an increase of 13.06% compared to HKD 190,512,000 for the same period in 2021[5] - Profit attributable to owners of the company for the nine months ended December 31, 2022, was approximately HKD 4,568,000, a significant increase from HKD 277,000 for the same period in 2021[5] - The gross profit for the nine months ended December 31, 2022, was HKD 51,726,000, up from HKD 46,046,000 in the previous year, indicating a gross margin improvement[6] - The basic earnings per share for the nine months ended December 31, 2022, was HKD 0.39, compared to HKD 0.02 for the same period in 2021[6] - Total comprehensive income attributable to owners of the company for the nine months ended December 31, 2022, was HKD 4,568,000, compared to HKD 277,000 in the previous year[6] - The total revenue for the nine months ended December 31, 2022, was HKD 215,358,000, representing a 13.1% increase from HKD 190,512,000 in the same period of 2021[16] Expenses and Costs - The sales and distribution expenses for the nine months ended December 31, 2022, increased to HKD 25,211,000 from HKD 21,487,000 in the previous year, reflecting higher operational costs[6] - The total employee costs for the nine months ended December 31, 2022, amounted to HKD 20,438,000, up from HKD 16,305,000 in the same period of 2021, reflecting a 25.9% increase[20] - Administrative expenses increased from approximately HKD 23,381,000 to about HKD 23,793,000, mainly due to higher director remuneration and depreciation of newly leased warehouse assets[38] - The cost of sales for the same period was approximately HKD 163,632,000, representing an increase of about 13.3% from approximately HKD 144,466,000 in the previous year[32] Dividends and Shareholder Returns - The company did not recommend any dividend payment for the nine months ended December 31, 2022, consistent with the previous year[5] - The group did not declare or recommend any dividends for the nine months ended December 31, 2022[22] Government Support and Other Income - The group recognized government subsidies of HKD 1,501,000 for the nine months ended December 31, 2022, which were related to the "Employment Support" scheme[18] - Other income rose significantly from approximately HKD 185,000 to about HKD 3,357,000, primarily due to government subsidies received during the period[34] Financial Position and Ratios - The total equity attributable to owners of the company as of December 31, 2022, was HKD 105,983,000, an increase from HKD 103,829,000 as of December 31, 2021[8] - As of December 31, 2022, the company's cash and bank balances were approximately HKD 31,155,000, up from approximately HKD 29,797,000 as of March 31, 2022[45] - The current ratio as of December 31, 2022, was approximately 4.8 times, indicating strong liquidity compared to 6.8 times as of March 31, 2022[45] - As of December 31, 2022, the company's interest-bearing borrowings amounted to approximately HKD 13,408,000, an increase from HKD 8,467,000 as of March 31, 2022[46] - The company's debt-to-equity ratio as of December 31, 2022, was approximately 12.7%, up from 8.3% as of March 31, 2022[46] Strategic Plans and Investments - The company plans to allocate around HKD 5,540,000 for sales and marketing activities to attract more customers and increase loyalty, with HKD 1,268,000 already utilized for advertising[53] - The company has decided to reallocate funds initially intended for new packaging equipment to develop restaurant services due to current market conditions[55] - The company plans to open two warehouse facilities to accommodate increased inventory, although the leasing process has been delayed due to rising rental prices[51] - The company is taking a more cautious approach to its business expansion and investment plans in light of current economic conditions[49] - The company has allocated an additional HKD 5,211,000 for general working capital to support daily operations and maintain sufficient liquidity against market volatility[56] Corporate Governance and Compliance - The board has confirmed compliance with the securities trading code and has adopted internal control policies regarding insider information disclosure[63] - The company has confirmed compliance with the non-competition agreement established on March 27, 2017, with all commitments adhered to by the controlling shareholders as of December 31, 2022[66] - The company has maintained high standards of corporate governance, adhering to the principles and code provisions outlined in the GEM Listing Rules[68] - The board believes that the company has complied with the corporate governance code as of December 31, 2022[69] Risks and Market Conditions - Key strategic, operational, and financial risks include market competition, employee commitment and satisfaction, warehousing disruptions, customer credit risks, and investment returns[56] - The company remains cautiously optimistic about its core business despite economic uncertainties arising from the latest COVID-19 situation and government policy changes[56] - The board is actively assessing and managing uncertainties, taking necessary measures to navigate challenging times while adhering to pre-IPO strategic commitments[56]

Financial Performance - The company recorded revenue of approximately HKD 137,465,000 for the six months ended September 30, 2022, representing an increase of 12.93% compared to HKD 121,704,000 for the same period in 2021[5] - Profit attributable to owners of the company for the six months ended September 30, 2022, was approximately HKD 3,427,000, a significant increase from HKD 389,000 for the same period in 2021[5] - The gross profit margin improved to approximately 24.87% for the six months ended September 30, 2022, compared to 24.92% for the same period in 2021[7] - The group's revenue for the six months ended September 30, 2022, was HKD 137,465,000, an increase of 12.9% compared to HKD 121,704,000 for the same period in 2021[23] - The group's gross profit increased by approximately 12.7% from about HKD 30,340,000 for the six months ended September 30, 2021, to about HKD 34,204,000 for the six months ended September 30, 2022, with a gross margin maintained at approximately 24.9%[56] Dividends and Equity - The company did not recommend the payment of any interim dividend for the six months ended September 30, 2022, consistent with the previous year[5] - The company’s total equity attributable to owners increased to HKD 104,842,000 as of September 30, 2022, from HKD 101,415,000 as of March 31, 2022[9] - The company did not declare or recommend any dividends for the six months ended September 30, 2022[35] Cash Flow and Assets - The net cash generated from operating activities for the six months ended September 30, 2022, was HKD 4,203,000, compared to a net cash used of HKD 468,000 for the same period in 2021[14] - Total assets as of September 30, 2022, amounted to HKD 119,583,000, an increase from HKD 111,456,000 as of March 31, 2022[9] - The group reported a net decrease in cash and cash equivalents of HKD 789,000 for the six months ended September 30, 2022, compared to a decrease of HKD 3,433,000 for the same period in 2021[14] Employee Costs and Subsidies - Total employee costs for the six months amounted to HKD 13,315,000, reflecting an increase of 24.0% from HKD 10,700,000 in the same period last year[31] - The group recognized government subsidies of HKD 1,372,000 during the six months, which were related to the "Employment Support" scheme and restaurant subsidy program[29] - The group experienced a significant increase in demand for food and beverage products from local restaurants, hotels, and private clubs during the reporting period[53] Expenses and Financing - The company’s financing costs for the six months ended September 30, 2022, were HKD 340,000, compared to HKD 210,000 for the same period in 2021[7] - Selling and distribution expenses accounted for about 11.4% of total revenue for the six months ended September 30, 2022, compared to 11.3% for the same period in 2021, reflecting increased commissions and bonuses for sales personnel[59] - Administrative expenses increased from approximately HKD 15,502,000 to about HKD 16,370,000, primarily due to increased depreciation from newly leased warehouse assets[61] Strategic Plans and Investments - The group plans to allocate approximately HKD 12,560,000 to upgrade the ERP system to enhance operational efficiency, with about HKD 5,272,000 already spent on consulting services and software and hardware acquisition[89][90] - Approximately HKD 5,540,000 is planned for sales and marketing activities to attract more customers, with HKD 1,242,000 already utilized for advertising and participation in local food exhibitions[90] - The group has allocated around HKD 9,000,000 for the development of restaurant services, with HKD 3,064,000 already spent on renovations and startup costs for a new restaurant in Tsim Sha Tsui[92] Corporate Governance and Compliance - The company has maintained high standards of corporate governance, adhering to the principles and code provisions outlined in the GEM Listing Rules[108] - The board believes that the company has complied with the corporate governance code as of September 30, 2022[109] - The company has confirmed compliance with the non-competition agreement established on March 27, 2017, with all commitments adhered to by the controlling shareholders as of September 30, 2022[106] Market Outlook and Risks - The board anticipates that the Hong Kong economy will take time to return to normal and will closely monitor market conditions for suitable business opportunities[52] - The company remains cautiously optimistic about its core business despite economic uncertainties related to the Omicron variant[93] - Key strategic, operational, and financial risks include market competition, employee commitment and satisfaction, warehousing disruptions, customer credit risk, and investment returns[93]

Financial Performance - The group recorded revenue of approximately HKD 63,565,000 for the three months ended June 30, 2022, compared to HKD 57,944,000 for the same period in 2021, representing an increase of 9%[4] - Profit attributable to owners of the company for the three months ended June 30, 2022, was approximately HKD 1,125,000, a significant increase from HKD 192,000 for the same period in 2021[4] - The gross profit for the three months ended June 30, 2022, was HKD 16,202,000, compared to HKD 14,349,000 for the same period in 2021, indicating a growth of 13%[5] - The total comprehensive income for the period attributable to owners of the company was HKD 1,125,000, compared to HKD 192,000 for the same period in 2021[5] - Basic earnings per share for the three months ended June 30, 2022, was HKD 0.10, up from HKD 0.02 for the same period in 2021[5] - The group's cost of sales for the three months ended June 30, 2022, was approximately HKD 47,363,000, an increase of about HKD 3,768,000 or approximately 8.6% compared to HKD 43,595,000 for the same period in 2021, primarily due to increased sales volume[34] - Gross profit increased from approximately HKD 14,349,000 for the three months ended June 30, 2021, to approximately HKD 16,202,000 for the same period in 2022, representing an increase of about 12.9%[35] Dividends and Equity - The company did not recommend the payment of any dividends for the three months ended June 30, 2022, consistent with the previous year[4] - The group’s total equity as of June 30, 2022, was HKD 102,540,000, a slight decrease from HKD 103,552,000 as of June 30, 2021[8] - The company did not declare or recommend any dividends for the three months ended June 30, 2022[27] Income and Expenses - The company reported other income of HKD 766,000 for the three months ended June 30, 2022, compared to HKD 44,000 for the same period in 2021, reflecting a substantial increase[5] - The financing costs for the three months ended June 30, 2022, were HKD 151,000, compared to HKD 97,000 for the same period in 2021, indicating an increase of 55%[5] - The total employee costs amounted to HKD 6,124,000, an increase from HKD 5,316,000 in the previous year, reflecting a rise of about 15.2%[26] - Administrative expenses increased from approximately HKD 7,175,000 to approximately HKD 7,985,000, mainly due to increased depreciation from newly leased warehouse assets and higher legal and professional fees[40] - Other income rose significantly from approximately HKD 44,000 to approximately HKD 766,000, mainly due to government subsidies received during the period, including about HKD 630,000 from the "Employment Support" scheme[36] Market and Operational Insights - The company continues to engage in food and beverage grocery distribution and restaurant services in Hong Kong, with all revenue contracts being for one year or less[14] - The demand for food and beverage products surged, particularly from local restaurants, hotels, and private clubs, contributing to the revenue growth[32] - The company plans to closely monitor market conditions and seek suitable opportunities to mitigate the negative impacts of potential COVID-19 outbreaks[31] Shareholder Information - As of June 30, 2022, the major shareholders, Mr. Wong Siu Man and Mr. Wong Siu Wah, each hold 51.88% of the company’s shares, totaling 602,800,000 shares[57] - Major shareholder Yuan Tian holds 602,800,000 shares, representing 51.88% of the total issued shares as of June 30, 2022[59] Corporate Governance - The company confirmed compliance with the corporate governance code during the three months ended June 30, 2022[68] - The audit committee reviewed the unaudited consolidated results for the three months ended June 30, 2022, and found them to comply with applicable accounting standards and GEM listing rules[71] - The company has adopted a set of securities trading rules for directors, ensuring compliance with GEM listing rules[63] - The company has established a non-competition agreement with its major shareholders, confirming no engagement in competing businesses[65] - The company maintains a high standard of corporate governance, which is considered essential for effective and transparent operations[67] - The board of directors consists of three executive directors and three independent non-executive directors, ensuring a balanced governance structure[72] Strategic Planning and Risks - The company plans to allocate approximately HKD 12,560,000 to upgrade its ERP system to enhance operational efficiency by monitoring inventory levels and avoiding excess stock[52] - A total of approximately HKD 5,540,000 is earmarked for sales and marketing activities to attract more customers and increase loyalty, with about HKD 1,228,000 already spent on advertising and local food exhibitions[53] - The board has decided to repurpose funds originally intended for a new warehouse in Kowloon, reallocating them towards developing restaurant services and general operating capital, retaining about HKD 3,278,000 for rental expenses[52] - The company faces strategic, operational, and financial risks including market competition and customer credit risk, but believes it has a competitive advantage due to its strong track record and experienced management team[55] - The company maintains a reasonable optimism regarding its core business despite economic uncertainties posed by the Omicron variant[55] - The board is actively assessing and managing uncertainties, taking necessary measures to navigate challenges while continuing to execute strategic commitments made to shareholders[55] Recent Developments - The company closed its first restaurant in Tsim Sha Tsui in March 2022 due to the ongoing pandemic situation[33] - The company has utilized around HKD 3,064,000 for renovations and startup costs for a new restaurant in Tsim Sha Tsui, although it plans to close this location due to recent pandemic conditions[54] - No significant investments, acquisitions, or disposals of subsidiaries, associates, or joint ventures occurred during the three months ended June 30, 2022[48] - No significant events affecting the group occurred after June 30, 2022, up to the date of the quarterly report[69] - There were no purchases, sales, or redemptions of the company's listed securities by the company or its subsidiaries during the three months ended June 30, 2022[66] - No stock options were granted, exercised, expired, or canceled under the stock option plan during the three months ended June 30, 2022, with 112,000,000 unexercised options remaining[62]

[Company Information](index=4&type=section&id=Company%20Information) This report provides fundamental information about Asia Grocery Distribution Limited (Stock Code: 8413), including its board members, committee structures, registered office, principal bankers, and auditor - This report provides fundamental information about Asia Grocery Distribution Limited (Stock Code: 8413), including its board members, committee structures, registered office, principal bankers, and auditor[7](index=7&type=chunk) [Chairman's Statement](index=5&type=section&id=Chairman%27s%20Statement) The Group, operating under the 'Hung Fat Ho' brand, has over 40 years of experience in food and beverage grocery distribution in Hong Kong, serving restaurants, hotels, food processors, and wholesalers - The Group, operating under the 'Hung Fat Ho' brand, has over 40 years of experience in food and beverage grocery distribution in Hong Kong, serving restaurants, hotels, food processors, and wholesalers[11](index=11&type=chunk) - During the reporting period (April 2021 to March 2022), Hong Kong's total retail sales value decreased by approximately **4.0%** year-on-year; however, with stabilizing pandemic conditions and the issuance of electronic consumption vouchers, the Group anticipates stable performance in the coming year[11](index=11&type=chunk) - Leveraging strong supplier relationships, market familiarity, and an experienced team, the Group can swiftly adapt to changing customer preferences and adjust its product portfolio to maintain competitiveness[11](index=11&type=chunk) [Biographical Details of Directors and Senior Management](index=6&type=section&id=Biographical%20Details%20of%20Directors%20and%20Senior%20Management) This section provides an overview of the Group's leadership, including executive, non-executive, and independent non-executive directors, as well as key senior management personnel [Executive Directors](index=6&type=section&id=Executive%20Directors) The executive director team, comprising Mr Wong Siu Man (Chairman), Mr Wong Siu Wah (CEO), and Mr Yip Kam Cheong (Compliance Officer), is responsible for the Group's overall management, daily operations, and sales oversight, with members being controlling shareholders or possessing extensive industry experience - Mr Wong Siu Man (Chairman) is primarily responsible for the Group's overall management, business direction, and development strategies[16](index=16&type=chunk) - Mr Wong Siu Wah (Chief Executive Officer) is primarily responsible for the Group's daily management and operations, focusing on procurement and supplier relationships[17](index=17&type=chunk) - Mr Yip Kam Cheong (Compliance Officer) is primarily responsible for overseeing the Group's sales department, possessing over **ten years** of experience in the food and beverage industry[17](index=17&type=chunk) [Non-Executive Director](index=7&type=section&id=Non-Executive%20Director) Mr Wong Chun Hung serves as a Non-Executive Director, bringing over nineteen years of experience in the financial industry, holding senior positions at various financial institutions, and actively participating in public service - Mr Wong Chun Hung has over **nineteen years** of experience in the financial industry and currently serves as an Executive Director of Sun City Group Holdings Limited[21](index=21&type=chunk) [Independent Non-Executive Directors](index=8&type=section&id=Independent%20Non-Executive%20Directors) Independent Non-Executive Directors, Mr Ng Fan Ki, Mr Wong Siu Bun, and Ms Chan Hoi Yee, bring extensive professional experience in auditing, taxation, financial management, strategic planning, and accounting, serving as members of the Audit, Remuneration, and Nomination Committees - Mr Ng Fan Ki possesses over **20 years** of experience in auditing, taxation, and financial management, is a member of the Hong Kong Institute of Certified Public Accountants, and chairs the Audit Committee[26](index=26&type=chunk) - Mr Wong Siu Bun is highly experienced in strategic planning and operational management, serving as Chairman of the Remuneration Committee[27](index=27&type=chunk) - Ms Chan Hoi Yee, a member of the Hong Kong Institute of Certified Public Accountants, has over **ten years** of experience in auditing and financial reporting, and chairs the Nomination Committee[27](index=27&type=chunk) [Senior Management and Company Secretary](index=9&type=section&id=Senior%20Management%20and%20Company%20Secretary) Senior management includes Ms Chan Lai Yin (Financial Controller), Ms Kwong Hoi Sze (General Manager), and Mr Wong Chun Fung (Sales Manager), all with extensive experience in finance, operations, and sales, while Ms Lau Yin Ping serves as Company Secretary overseeing corporate secretarial affairs - Ms Chan Lai Yin serves as Financial Controller, responsible for overall corporate finance and capital management, and is a member of the Hong Kong Institute of Certified Public Accountants[31](index=31&type=chunk) - Ms Kwong Hoi Sze serves as General Manager, with **23 years** of international trade experience, specializing in the procurement, import, and distribution of food and beverage products[31](index=31&type=chunk) - Ms Lau Yin Ping serves as Company Secretary, is a member of the Hong Kong Institute of Certified Public Accountants, and oversees corporate secretarial affairs[33](index=33&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 operational performance, financial results, liquidity, and capital structure for the reporting period [Business Review](index=10&type=section&id=Business%20Review) The Group, a prominent Hong Kong food and beverage grocery distributor, faced initial challenges in FY2022 due to the Omicron variant but achieved overall revenue growth, expanded into catering services, and leased a new warehouse to accommodate increased inventory - The COVID-19 pandemic continued to impact business, with a rebound in late 2021 followed by revenue contraction in early 2022 due to the Omicron variant and tightened social distancing measures[37](index=37&type=chunk)[38](index=38&type=chunk) Key Performance Indicators for FY2022 | Indicator | FY2022 | FY2021 | Year-on-Year Change | | :--- | :--- | :--- | :--- | | Total Revenue | 241,372,000 HKD | 227,709,000 HKD | +6.0% | - The Group commenced catering services through restaurants in early 2021, with this segment contributing approximately **1.0%** of total revenue; a new warehouse was leased and established in Tuen Mun to manage increased inventory levels[38](index=38&type=chunk)[39](index=39&type=chunk) [Financial Review](index=11&type=section&id=Financial%20Review) In FY2022, the Group's total revenue grew by **6.0%** to **HKD 241.37 million**, driven by categories like daily necessities and grains, and sauces and condiments, while gross profit increased by **21.3%** to **HKD 58.33 million**, improving the gross profit margin from **21.1%** to **24.2%**, and the annual loss significantly narrowed to **HKD 2.14 million** from **HKD 14.62 million** due to reduced equity-settled share-based payment expenses Revenue Breakdown by Product Category (Thousand HKD) | Product Category | 2022 | 2021 | Change Percentage | | :--- | :--- | :--- | :--- | | Daily Necessities and Grains | 71,918 | 58,019 | +24.0% | | Packaged Foods | 52,999 | 60,076 | -11.8% | | Sauces and Condiments | 48,924 | 41,420 | +18.1% | | Dairy Products and Eggs | 31,205 | 27,052 | +15.4% | | Beverages and Alcoholic Drinks | 16,287 | 12,689 | +28.4% | | Kitchen and Hygiene Products | 17,564 | 28,453 | -38.3% | | Restaurant Operations | 2,475 | – | N/A | | **Total** | **241,372** | **227,709** | **+6.0%** | - Gross profit increased by **21.3%** from **HKD 48.07 million** to **HKD 58.33 million**, with the gross profit margin improving from **21.1%** to **24.2%**, primarily due to increased revenue, an expanded customer base, and lower procurement costs[50](index=50&type=chunk) - Annual loss significantly narrowed from **HKD 14.62 million** to **HKD 2.14 million**, mainly due to the absence of equity-settled share-based payments this year (compared to **HKD 15.42 million** last year), partially offset by reduced government grants[57](index=57&type=chunk)[62](index=62&type=chunk) - The Board does not recommend the payment of any dividend for the year ended March 31, 2022[63](index=63&type=chunk) [Liquidity, Financial Resources and Capital Structure](index=15&type=section&id=Liquidity%2C%20Financial%20Resources%20and%20Capital%20Structure) As of March 31, 2022, the Group maintained a robust financial position with bank balances and cash of approximately **HKD 29.8 million** and a current ratio of **6.8 times**, primarily funding operations through internal cash flow, while capital expenditure focused on the newly leased Tuen Mun warehouse Key Financial Position Indicators | Indicator | March 31, 2022 | March 31, 2021 | | :--- | :--- | :--- | | Bank Balances and Cash | 29,797,000 HKD | 38,438,000 HKD | | Current Ratio | 6.8 times | 6.7 times | | Gearing Ratio | 8.3% | 7.8% | - The Group's capital structure has remained unchanged since its listing, with share capital consisting solely of ordinary shares[71](index=71&type=chunk) - Capital expenditure for the year amounted to approximately **HKD 2.27 million**, primarily for the renovation and equipment acquisition of the newly leased Tuen Mun warehouse[77](index=77&type=chunk) [Use of Proceeds](index=17&type=section&id=Use%20of%20Proceeds) The Group detailed the utilization of approximately **HKD 48.5 million** in net proceeds from its listing, with about **HKD 18.73 million** remaining unutilized as of the reporting date, primarily allocated to restaurant business development, ERP system upgrades, and sales and marketing activities, expected to be fully utilized by December 31, 2022, with some original plans adjusted due to market changes Use of Net Proceeds and Progress (Thousand HKD) | Intended Use | Revised Allocated Amount | Unutilized Amount as of this Annual Report Date | | :--- | :--- | :--- | | Lease of warehouse facilities (lease payments) | 3,278 | 903 | | Development of catering services business | 9,000 | 5,936 | | Upgrade of ERP system | 8,330 | 7,576 | | Sales and marketing activities | 4,444 | 4,319 | | General working capital | 5,211 | – | | **Total** | **30,263** | **18,734** | - Due to rising factory rents in Hong Kong, the original plan to lease two warehouses was adjusted to establish a new warehouse in Yau Tong, Kowloon[91](index=91&type=chunk)[92](index=92&type=chunk) - The Group expanded into catering services in early 2021 but closed its Tsim Sha Tsui restaurant in March 2022 due to the pandemic, and is currently exploring further development opportunities for this segment[97](index=97&type=chunk) [Report of the Directors](index=20&type=section&id=Report%20of%20the%20Directors) This report details the Group's principal activities, key risks, dividend policy, share capital, reserves, and the interests of directors and major shareholders, along with information on the share option scheme [Principal Business and Risks](index=20&type=section&id=Principal%20Business%20and%20Risks) The Company primarily engages in investment holding, with its subsidiaries focusing on food and beverage grocery distribution and newly expanded catering services, facing key risks including customer retention, economic and political changes, financial exposures like foreign exchange and credit, and talent retention challenges - The Group's principal business is food and beverage grocery distribution, with catering services expanded during the year, and no significant changes in business nature[103](index=103&type=chunk) - Key risks include: - **Business Risk**: Potential inability to retain key customers, facing inventory and obsolescence risks - **Economic and Political Risk**: Adverse macroeconomic changes may impact strategy execution - **Financial Risk**: Exposure to foreign currency, interest rate, credit, and liquidity risks - **Personnel Risk**: Difficulty in retaining talent within a competitive market[111](index=111&type=chunk)[112](index=112&type=chunk)[113](index=113&type=chunk)[114](index=114&type=chunk) [Dividends, Share Capital and Reserves](index=21&type=section&id=Dividends%2C%20Share%20Capital%20and%20Reserves) The Board does not recommend a dividend for the year ended March 31, 2022, with dividend decisions guided by a policy considering financial performance, capital needs, and overall economic conditions, and the Company's distributable reserves amounted to approximately **HKD 21.64 million** at the reporting period end - The Board does not recommend the payment of a dividend for the year ended March 31, 2022[116](index=116&type=chunk) - As of March 31, 2022, the Company's distributable reserves to shareholders amounted to approximately **HKD 21,640,000**[127](index=127&type=chunk) [Directors' and Major Shareholders' Interests](index=23&type=section&id=Directors%27%20and%20Major%20Shareholders%27%20Interests) The report details the shareholdings of directors and major shareholders as of March 31, 2022, with Executive Directors Mr Wong Siu Man and Mr Wong Siu Wah jointly holding **51.88%** of the Company's shares through their controlled corporation, Yuan Tian Investment Limited, making them controlling shareholders Directors' Interests in the Company's Shares (Long Position) | Director's Name | 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% | Major Shareholders' Interests in the Company's Shares (Long Position) | Shareholder's Name/Name | Capacity/Nature of Interest | Number of Shares | Approximate Percentage of Shareholding | | :--- | :--- | :--- | :--- | | Yuan Tian Investment Limited | Legal and beneficial owner | 602,800,000 | 51.88% | | Ms Fan Wing | Spouse's interest | 602,800,000 | 51.88% | | Ms Chu Man | Spouse's interest | 602,800,000 | 51.88% | [Share Option Scheme](index=29&type=section&id=Share%20Option%20Scheme) The Company adopted a share option scheme on March 27, 2017, under which **112 million** share options were granted to Group employees on February 19, 2021, with an exercise price of **HKD 0.30** per share, and as of March 31, 2022, all remained unexercised, lapsed, or cancelled - On February 19, 2021, a total of **112,000,000** share options were granted to Group employees under the Share Option Scheme, with an exercise price of **HKD 0.30** per share, valid until February 18, 2023[165](index=165&type=chunk) - For the year ended March 31, 2022, no share options were granted, exercised, lapsed, or cancelled, with **112,000,000** unexercised share options remaining at the end of the reporting period[165](index=165&type=chunk) [Corporate Governance Report](index=33&type=section&id=Corporate%20Governance%20Report) This report outlines the Group's corporate governance practices, including the board structure, committee functions, and risk management and internal control systems, ensuring compliance with relevant codes and regulations [Board of Directors](index=33&type=section&id=Board%20of%20Directors) The Board of Directors, responsible for the Group's overall leadership and oversight, comprised three executive, one non-executive, and three independent non-executive directors during the reporting period, adhering to GEM Listing Rules, with distinct roles for the Chairman and CEO, and maintained high attendance across nine meetings held during the year - The Board believes the Company has complied with the Corporate Governance Code for the year ended March 31, 2022[190](index=190&type=chunk) - The roles of Chairman (Mr Wong Siu Man) and Chief Executive Officer (Mr Wong Siu Wah) are performed by different individuals, complying with the Corporate Governance Code requirements[202](index=202&type=chunk) - A total of **nine** Board meetings and **one** general meeting were held during the year, with all eligible directors attending all meetings[215](index=215&type=chunk)[216](index=216&type=chunk) [Board Committees](index=39&type=section&id=Board%20Committees) The Board has established Audit, Nomination, and Remuneration Committees, each chaired by an independent non-executive director, responsible for overseeing financial reporting and internal controls, reviewing board structure and diversity, and determining director and senior management remuneration policies, respectively, with all committees holding meetings and fulfilling their duties during the year - The Audit Committee, comprising three independent non-executive directors with Mr Ng Fan Ki as Chairman, held **five** meetings during the year, reviewing financial statements, risk management, and internal control systems[220](index=220&type=chunk)[221](index=221&type=chunk) - The Nomination Committee, comprising three independent non-executive directors with Ms Chan Hoi Yee as Chairman, held **one** meeting during the year, reviewing the Board's composition and diversity policy[225](index=225&type=chunk)[226](index=226&type=chunk) - The Remuneration Committee, comprising three independent non-executive directors with Mr Wong Siu Bun as Chairman, held **one** meeting during the year, reviewing the remuneration of directors and senior management[231](index=231&type=chunk)[232](index=232&type=chunk) [Risk Management and Internal Control](index=45&type=section&id=Risk%20Management%20and%20Internal%20Control) The Board holds overall responsibility for the Group's risk management and internal control systems, having engaged an independent third-party consultant to review and optimize these systems during the year, deeming them effective in safeguarding assets and shareholder interests, while annually assessing the necessity of an internal audit function - The Board bears overall responsibility for establishing, maintaining, and reviewing the Group's internal control systems, aiming to safeguard assets and shareholder investments[245](index=245&type=chunk) - During the year, the Board engaged an independent third-party consultant to review the internal control system and adopted its optimization recommendations, deeming the existing system effective and adequate[246](index=246&type=chunk) - The Group has identified four main categories of risks: market competition (strategic risk), employee and warehouse operations (operational risk), customer credit and return on capital (financial risk), and regulatory changes (compliance risk)[252](index=252&type=chunk) [Environmental, Social and Governance Report](index=50&type=section&id=Environmental%2C%20Social%20and%20Governance%20Report) This report details the Group's commitment to environmental sustainability, social responsibility, and corporate governance, covering initiatives in energy conservation, employee welfare, supply chain management, product quality, and community engagement [Environmental Aspect](index=51&type=section&id=Environmental%20Aspect) The Group is committed to energy conservation and emission reduction, with total greenhouse gas emissions decreasing to approximately **101.3 tonnes of CO2 equivalent** during the reporting period, despite an increase in total energy consumption due to the new Tuen Mun warehouse, and aims to reduce energy intensity by **10%** within five years while addressing climate change risks Greenhouse Gas Emissions (tonnes of CO2 equivalent) | Greenhouse Gas Emissions | 2022 | 2021 | | :--- | :--- | :--- | | Scope 1 Emissions | 10.5 | 3.4 | | Scope 2 Emissions | 90.5 | 110.7 | | Scope 3 Emissions | 0.3 | – | | **Total Greenhouse Gas Emissions** | **101.3** | **114.1** | Energy Consumption | Indicator | 2022 | 2021 | Unit | | :--- | :--- | :--- | :--- | | Total Energy Consumption | 282.1 | 229.0 | MWh equivalent | | Intensity (per revenue) | 1.169 | 1.006 | MWh equivalent / Million HKD Revenue | - The Group aims to reduce its energy intensity by **10%** within five years (by 2027), using 2022 as the baseline year[290](index=290&type=chunk) [Social Aspect](index=55&type=section&id=Social%20Aspect) The Group prioritizes employment and labor practices, employee health and safety, and development and training, with **59 employees** at the reporting period end, strictly adhering to labor laws, prohibiting child and forced labor, ensuring a safe work environment, collaborating with reputable suppliers, maintaining stringent food safety standards, and actively engaging in community investment, earning the 'Caring Company' title for seven consecutive years - As of the end of the reporting period, the Group had a total of **59 employees**, an increase from **50** last year, with detailed breakdowns by gender, age, and employment category provided in the report[313](index=313&type=chunk) - Over the past three years, the Group has had no work-related fatalities or injuries, with **zero** lost workdays due to work-related injuries[326](index=326&type=chunk)[327](index=327&type=chunk) - The Group maintains a zero-tolerance policy towards corruption and provides anti-corruption training to employees, with no legal cases related to corruption, fraud, or bribery during the reporting period[337](index=337&type=chunk)[340](index=340&type=chunk) - The Group actively engages in community investment, having been awarded the 'Caring Company' title by The Hong Kong Council of Social Service and recognized as a 'Friendly Enterprise' by The Hong Kong Federation of Youth Groups for **seven consecutive years**[342](index=342&type=chunk)[343](index=343&type=chunk) [Independent Auditor's Report](index=64&type=section&id=Independent%20Auditor%27s%20Report) Longview (Hong Kong) CPA Limited, the auditor, confirms that the consolidated financial statements fairly present the Group's financial position as of March 31, 2022, and its financial performance and cash flows for the year then ended, in compliance with Hong Kong Financial Reporting Standards and the Hong Kong Companies Ordinance - Longview (Hong Kong) CPA Limited, the auditor, opines that the consolidated financial statements fairly present the Group's consolidated financial position as of March 31, 2022, and its financial performance and cash flows for the year then ended, in accordance with Hong Kong Financial Reporting Standards and the disclosure requirements of the Hong Kong Companies Ordinance[362](index=362&type=chunk) - The auditor identified two key audit matters: - **Valuation of Inventories**: Involves management's judgment and estimation regarding slow-moving and obsolete inventories - **Impairment of Trade Receivables**: Measurement of expected credit losses involves significant judgment and complexity[367](index=367&type=chunk)[370](index=370&type=chunk) [Consolidated Financial Statements](index=70&type=section&id=Consolidated%20Financial%20Statements) This section presents the Group's consolidated financial performance, financial position, changes in equity, and cash flows for the reporting period, providing a comprehensive overview of its financial health [Consolidated Statement of Profit or Loss and Other Comprehensive Income](index=70&type=section&id=Consolidated%20Statement%20of%20Profit%20or%20Loss%20and%20Other%20Comprehensive%20Income) For the year ended March 31, 2022, the Group reported total revenue of **HKD 241.37 million**, a **6.0%** year-on-year increase, with gross profit at **HKD 58.33 million**, up **21.3%**, and the annual loss significantly narrowed to **HKD 2.14 million** from **HKD 14.62 million** last year, primarily due to a substantial reduction in administrative expenses Consolidated Statement of Profit or Loss Summary (Thousand HKD) | Indicator | 2022 | 2021 | | :--- | :--- | :--- | | Revenue | 241,372 | 227,709 | | Gross Profit | 58,332 | 48,070 | | Loss Before Tax | (1,538) | (14,376) | | **Loss and Total Comprehensive Expense for the Year** | **(2,137)** | **(14,618)** | - Basic loss per share significantly improved to **0.18 HK cents** from **1.26 HK cents** last year[393](index=393&type=chunk) [Consolidated Statement of Financial Position](index=71&type=section&id=Consolidated%20Statement%20of%20Financial%20Position) As of March 31, 2022, the Group's total assets stood at **HKD 123.16 million**, total liabilities at **HKD 21.75 million**, and net assets (total equity) at **HKD 101.42 million**, a slight decrease from the previous year, with net current assets remaining stable at **HKD 95.02 million** Consolidated Statement of Financial Position Summary (Thousand HKD) | Indicator | 2022 | 2021 | | :--- | :--- | :--- | | **Total Assets** | **123,163** | **124,063** | | Non-current Assets | 11,707 | 13,363 | | Current Assets | 111,456 | 110,700 | | **Total Liabilities** | **21,748** | **20,511** | | Current Liabilities | 16,438 | 16,616 | | Non-current Liabilities | 5,310 | 3,895 | | **Total Equity** | **101,415** | **103,552** | [Consolidated Statement of Changes in Equity](index=72&type=section&id=Consolidated%20Statement%20of%20Changes%20in%20Equity) As of March 31, 2022, total equity attributable to owners of the Company was **HKD 101.42 million**, with a **HKD 2.14 million** decrease during the year primarily due to the recorded loss - As of April 1, 2021, total equity was **103,552 Thousand HKD**[407](index=407&type=chunk) - Equity decreased by **2,137 Thousand HKD** during the year due to loss[407](index=407&type=chunk) - As of March 31, 2022, total equity was **101,415 Thousand HKD**[407](index=407&type=chunk) [Consolidated Statement of Cash Flows](index=73&type=section&id=Consolidated%20Statement%20of%20Cash%20Flows) During the year, the Group experienced a net cash outflow of **HKD 2.52 million** from operating activities, **HKD 1.78 million** from investing activities, and **HKD 4.34 million** from financing activities, resulting in a net decrease in cash and cash equivalents of **HKD 8.64 million**, with an ending balance of **HKD 29.80 million** Consolidated Cash Flow Summary (Thousand HKD) | Indicator | 2022 | 2021 | | :--- | :--- | :--- | | Net Cash Used in Operating Activities | (2,522) | (10,617) | | Net Cash Used in Investing Activities | (1,779) | (1,849) | | Net Cash Used in Financing Activities | (4,340) | (3,097) | | **Net Decrease in Cash and Cash Equivalents** | **(8,641)** | **(15,563)** | | Cash and Cash Equivalents at Beginning of Year | 38,438 | 54,001 | | **Cash and Cash Equivalents at End of Year** | **29,797** | **38,438** | [Notes to the Consolidated Financial Statements](index=75&type=section&id=Notes%20to%20the%20Consolidated%20Financial%20Statements) This section provides detailed explanations and supplementary information to the consolidated financial statements, covering general company information, basis of preparation, significant accounting policies, key accounting estimates and judgments, and detailed analysis of various financial statement items - This section provides detailed explanations and supplementary information to the consolidated financial statements, covering general company information, basis of preparation, significant accounting policies, key accounting estimates and judgments, and detailed analysis of various financial statement items[420](index=420&type=chunk)[421](index=421&type=chunk)[430](index=430&type=chunk) [Financial Summary](index=125&type=section&id=Financial%20Summary) This section presents a five-year overview of the Group's key financial performance indicators, including revenue, profit/loss, total assets, total liabilities, and net assets, providing a concise historical financial perspective Five-Year Performance Summary (Thousand HKD) | Year Ended March 31 | 2022 | 2021 | 2020 | 2019 | 2018 | | :--- | :--- | :--- | :--- | :--- | :--- | | Revenue | 241,372 | 227,709 | 204,368 | 213,926 | 194,137 | | (Loss)/Profit for the Year | (2,137) | (14,618) | (3,573) | 3,909 | 2,394 | Five-Year Assets and Liabilities Summary (Thousand HKD) | As of March 31 | 2022 | 2021 | 2020 | 2019 | 2018 | | :--- | :--- | :--- | :--- | :--- | :--- | | Total Assets | 123,163 | 124,063 | 118,920 | 114,636 | 111,504 | | Total Liabilities | 21,748 | 20,511 | 16,169 | 8,312 | 9,089 | | Total Net Assets | 101,415 | 103,552 | 102,751 | 106,324 | 102,415 |

Financial Performance - The company recorded revenue of approximately HKD 190,512,000 for the nine months ended December 31, 2021, representing an increase of 7.9% compared to HKD 176,930,000 for the same period in 2020[4]. - The profit attributable to owners of the company for the nine months ended December 31, 2021, was approximately HKD 277,000, a significant decrease of 87.4% from HKD 2,196,000 for the same period in 2020[4]. - The gross profit for the nine months ended December 31, 2021, was HKD 46,046,000, up from HKD 35,418,000 in the same period of 2020, indicating a gross margin improvement[6]. - The total comprehensive income attributable to owners of the company for the three months ended December 31, 2021, was a loss of HKD 112,000, compared to a profit of HKD 910,000 for the same period in 2020[6]. - The company reported a basic loss per share of HKD 0.01 for the three months ended December 31, 2021, compared to earnings per share of HKD 0.08 for the same period in 2020[6]. - The group's revenue for the three months ended December 31, 2021, was HKD 68,808,000, a decrease of 5% compared to HKD 72,570,000 for the same period in 2020[17]. - The group's food and beverage grocery sales revenue for the nine months ended December 31, 2021, was HKD 190,512,000, an increase of 7.6% from HKD 176,930,000 in the same period of 2020[17]. - The revenue from daily necessities and grain products for the three months ended December 31, 2021, was HKD 20,626,000, up 28.5% from HKD 16,087,000 in 2020[17]. - The revenue from packaged foods for the three months ended December 31, 2021, was HKD 14,247,000, down 54.5% from HKD 31,249,000 in 2020[17]. - The total employee costs for the nine months ended December 31, 2021, amounted to HKD 16,305,000, an increase of 31% from HKD 12,388,000 in the same period of 2020[26]. - The group reported a loss attributable to owners of the company of HKD 112,000 for the three months ended December 31, 2021, compared to a profit of HKD 910,000 in the same period of 2020[34]. - The company anticipates a revenue decline in the first quarter of 2022 due to tightened social distancing measures in Hong Kong[40]. Expenses and Costs - The company’s administrative expenses for the nine months ended December 31, 2021, were HKD 23,381,000, compared to HKD 18,060,000 for the same period in 2020, reflecting increased operational costs[6]. - The sales cost for the nine months ended December 31, 2021, was approximately HKD 144,466,000, an increase of about 2.1% from approximately HKD 141,512,000 for the same period in 2020[43]. - Administrative expenses increased from approximately HKD 18,060,000 for the nine months ended December 31, 2020, to approximately HKD 23,381,000 for the same period in 2021[49]. - Financing costs for the nine months ended December 31, 2021, were approximately HKD 369,000, an increase of about 69.9% from approximately HKD 217,000 for the same period in 2020[50]. - The interest expense on lease liabilities for the three months ended December 31, 2021, was HKD 159,000, compared to HKD 62,000 in 2020[24]. Dividends and Shareholder Returns - The company did not recommend the payment of any dividends for the nine months ended December 31, 2021, consistent with the previous year[4]. - The group did not declare or recommend any dividends for the nine months ended December 31, 2021[33]. - No dividends were declared or proposed for the nine months ended December 31, 2021, consistent with the previous year[54]. Cash and Equity Position - The total equity of the company as of December 31, 2021, was HKD 103,829,000, an increase from HKD 102,751,000 as of April 1, 2021[8]. - As of December 31, 2021, the group's bank balances and cash amounted to approximately HKD 27,879,000, down from HKD 38,438,000 as of March 31, 2021, with a current ratio of approximately 5.0 times[56]. - The group's interest-bearing borrowings totaled approximately HKD 11,769,000 as of December 31, 2021, compared to HKD 8,044,000 as of March 31, 2021, resulting in a debt-to-equity ratio of approximately 11.3%[57]. Strategic Initiatives and Investments - The company has begun providing catering services through restaurants, contributing approximately 1.3% to total revenue for the nine months ended December 31, 2021[40]. - The company plans to allocate approximately HKD 12,560,000 to upgrade its ERP system to enhance operational efficiency, with about HKD 4,702,000 already spent on consulting services and software and hardware acquisition[63]. - Approximately HKD 5,540,000 is planned for sales and marketing activities to attract more customers and increase loyalty, with HKD 1,183,000 already spent on advertising and participation in local food exhibitions[64]. - The company aims to enhance its position in the food and beverage grocery distribution industry and expand operations to create long-term shareholder value[62]. - The company has decided to reallocate unutilized net proceeds from the listing for developing restaurant services and general working capital, retaining approximately HKD 3,278,000 for leasing expenses[63]. - The company plans to invest approximately HKD 3,500,000 in new repackaging equipment to enhance automation and efficiency in the repackaging process[66]. - The company aims to open about 5 restaurants by December 31, 2022, with the first one already opened in Tsim Sha Tsui in April 2021[66]. - Approximately HKD 9,000,000 has been allocated for the startup and renovation costs of the restaurants, with around HKD 2,606,000 already spent on the Tsim Sha Tsui location[66]. - An additional HKD 5,211,000 has been allocated for general working capital to support daily operations, with about HKD 1,046,000 already utilized[67]. Risk Management and Compliance - The company remains cautiously optimistic about its core business despite economic uncertainties caused by the Omicron variant[67]. - The main strategic, operational, and financial risks identified include market competition, employee commitment and satisfaction, and customer credit risk[67]. - The company holds a competitive advantage due to its strong track record and experienced management team[67]. - The financial statements were prepared in accordance with Hong Kong Financial Reporting Standards, ensuring compliance with applicable disclosure requirements[12]. - The audit committee has reviewed the unaudited consolidated results for the nine months ending December 31, 2021, ensuring compliance with applicable accounting standards and GEM Listing Rules[86]. Shareholder Information - As of December 31, 2021, major shareholders Huang Shaowen and Huang Shaohua each hold 602,800,000 shares, representing 51.88% of the total issued shares[69]. - The company has granted a total of 112,000,000 share options to employees under its share option plan, with an exercise price of HKD 0.30 per share[75]. - The company has adopted a set of securities trading codes for directors, confirming compliance with the GEM Listing Rules for the nine months ending December 31, 2021[76]. - There are no known interests held by directors or major shareholders that could compete with the company's business as of December 31, 2021[78]. - The company has not purchased, sold, or redeemed any of its listed securities during the nine months ending December 31, 2021[81].

Financial Performance - The company recorded revenue of approximately HKD 121,704,000 for the six months ended September 30, 2021, compared to HKD 104,360,000 for the same period in 2020, representing an increase of 16.5%[6] - The profit attributable to owners of the company for the six months ended September 30, 2021, was approximately HKD 389,000, a decrease of 69.8% from HKD 1,286,000 for the same period in 2020[6] - The gross profit for the six months ended September 30, 2021, was HKD 30,340,000, compared to HKD 22,381,000 for the same period in 2020, indicating a growth of 35.7%[8] - The basic earnings per share for the six months ended September 30, 2021, was HKD 0.03, down from HKD 0.11 for the same period in 2020[8] - The group reported a net profit before tax of HKD 1,343,000 for the three months ended September 30, 2021, compared to HKD 917,000 for the same period in 2020, reflecting a 46.5% increase[34] Cash Flow and Assets - The company reported a net cash outflow from operating activities of HKD 468,000 for the six months ended September 30, 2021, compared to a net cash inflow of HKD 4,574,000 for the same period in 2020[15] - Total assets as of September 30, 2021, were HKD 111,753,000, an increase from HKD 107,447,000 as of March 31, 2021[10] - The company’s cash and cash equivalents at the end of the period were HKD 35,005,000, down from HKD 57,836,000 at the end of the same period in 2020[15] - The company’s total liabilities increased to HKD 20,405,000 as of September 30, 2021, compared to HKD 16,616,000 as of March 31, 2021[10] - Trade receivables as of September 30, 2021, amounted to HKD 38,300,000, slightly up from HKD 38,210,000 as of March 31, 2021[42] Dividends and Shareholder Information - The company did not recommend the payment of any interim dividend for the six months ended September 30, 2021, consistent with the previous year[6] - The company did not declare or recommend any dividends for the six months ended September 30, 2021, and 2020[38] - The total number of issued and fully paid shares remained at 1,162,000,000 as of both March 31, 2021, and September 30, 2021[47] - As of September 30, 2021, the company has a total of 1,162,000,000 issued ordinary shares, with major shareholders holding 51.88% of the shares[120] Operational Costs and Expenses - Total employee costs for the six months ended September 30, 2021, amounted to HKD 10,700,000, an increase of 38.5% from HKD 7,725,000 in the previous year[34] - Interest expenses on lease liabilities for the six months ended September 30, 2021, were HKD 210,000, up 35.5% from HKD 155,000 in 2020[32] - Administrative expenses increased from approximately HKD 11,893,000 to about HKD 15,502,000, mainly due to hiring new staff and increased depreciation of right-of-use assets[61] - Sales cost for the same period was approximately HKD 91,364,000, an increase of about HKD 9,385,000 or approximately 11.4% compared to HKD 81,979,000 for the previous period, attributed to increased sales volume[55] Revenue Breakdown - The group's revenue from food and beverage grocery sales for the six months ended September 30, 2021, was HKD 121,704,000, an increase of 16.5% compared to HKD 104,360,000 for the same period in 2020[25] - The sales revenue from daily necessities and grain products reached HKD 36,505,000 for the six months ended September 30, 2021, up 39.2% from HKD 26,230,000 in the previous year[25] - The revenue from packaged food for the same period was HKD 24,883,000, representing a 38.7% increase compared to HKD 17,922,000 in 2020[25] Strategic Developments - The group opened its first restaurant in Tsim Sha Tsui in April 2021, marking an expansion into the dining service sector[30] - The company has started providing catering services through restaurants, generating approximately 1.4% of total revenue for the six months ended September 30, 2021[51] - The company aims to open about 5 restaurants by December 31, 2022, with the first one already opened in Tsim Sha Tsui in April 2021[117] Future Plans and Investments - The company plans to allocate approximately HKD 12,560,000 to upgrade its ERP system to enhance operational efficiency, with about HKD 4,557,000 already spent on consulting services and software and hardware acquisition[114] - The company plans to invest approximately HKD 3,500,000 in new repackaging equipment to enhance automation and efficiency in the repackaging process[117] - Approximately HKD 9,000,000 has been allocated for the startup and renovation costs of the restaurants, with around HKD 2,231,000 already spent on the Tsim Sha Tsui restaurant[117] Risk Management and Governance - The company remains cautiously optimistic about its core business despite economic uncertainties caused by the COVID-19 pandemic[118] - The main strategic, operational, and financial risks faced by the company include market competition, employee commitment and satisfaction, and customer credit risk[118] - The company is committed to maintaining high standards of corporate governance, adhering to the GEM Listing Rules and corporate governance codes[135] - The audit committee, composed of three independent non-executive directors, reviewed the unaudited consolidated results for the six months ending September 30, 2021, ensuring compliance with applicable accounting standards[139]

Financial Performance - The group recorded revenue of approximately HKD 57,944,000 for the three months ended June 30, 2021, a decrease of 3.6% compared to HKD 61,032,000 for the same period in 2020[4] - The profit attributable to owners of the company for the same period was approximately HKD 192,000, down 84.7% from HKD 1,250,000 in the previous year[4] - Gross profit for the three months ended June 30, 2021, was HKD 14,349,000, representing a gross margin of 24.7%, compared to HKD 11,802,000 and a gross margin of 19.4% for the same period in 2020[6] - The company reported a pre-tax profit of HKD 409,000 for the quarter, significantly lower than HKD 1,433,000 in the prior year[6] - Basic earnings per share for the quarter were HKD 0.02, compared to HKD 0.11 for the same period last year, reflecting a decrease of 81.8%[6] - The pre-tax profit for the three months ended June 30, 2021, was HKD 192,000, down from HKD 1,250,000 in the same period last year[31] - Revenue for the three months ended June 30, 2021, decreased by approximately HKD 3,088,000 or about 5.1% to approximately HKD 57,944,000 compared to HKD 61,032,000 for the same period in 2020, primarily due to a sharp decline in sales of kitchen and hygiene products[35] - Sales of kitchen and hygiene products dropped by approximately HKD 14,695,000 to about HKD 4,167,000 for the three months ended June 30, 2021, compared to HKD 18,862,000 for the same period in 2020[35] - Gross profit increased by approximately 21.6% to about HKD 14,349,000 for the three months ended June 30, 2021, from approximately HKD 11,802,000 for the same period in 2020, despite a decrease in revenue[39] - Gross margin improved to 24.8% for the three months ended June 30, 2021, compared to 19.3% for the same period in 2020[39] Dividends and Equity - The board of directors did not recommend the payment of any dividend for the three months ended June 30, 2021, consistent with the previous year[4] - The group did not declare or recommend any dividends for the three months ended June 30, 2021[29] - Total equity as of June 30, 2021, was HKD 103,744,000, an increase from HKD 103,552,000 at the beginning of the period[8] Revenue Breakdown - Sales revenue from daily necessities and grain products was HKD 17,549,000, up from HKD 13,120,000 in 2020, representing a growth of approximately 33.5%[1] - The revenue from packaged foods was HKD 11,481,000, an increase from HKD 9,179,000 in the previous year, reflecting a growth of about 25.1%[1] - The group generated revenue of HKD 814,000 from restaurant operations, marking the commencement of its restaurant service business[33] Expenses and Costs - The total employee costs amounted to HKD 5,316,000, an increase from HKD 3,786,000 in 2020, indicating a rise of approximately 40.5%[27] - Selling and distribution expenses as a percentage of total revenue increased to approximately 11.5% for the three months ended June 30, 2021, from 8.5% for the same period in 2020[42] - Administrative expenses rose from approximately HKD 6,160,000 to about HKD 7,175,000, primarily due to increased employee costs and director remuneration[44] Cash and Debt Management - As of June 30, 2021, the group had cash and bank balances of approximately HKD 37,936,000, compared to HKD 38,438,000 as of March 31, 2021[50] - The debt-to-equity ratio was approximately 6.6% as of June 30, 2021, down from 7.8% as of March 31, 2021[52] Future Plans and Investments - The company plans to allocate approximately HKD 12,560,000 to upgrade the ERP system to enhance operational efficiency, with about HKD 4,447,000 already spent on consulting services and software and hardware acquisition[57] - Approximately HKD 5,540,000 is earmarked for sales and marketing activities to attract more customers and enhance loyalty, with around HKD 1,159,000 already utilized for advertising and local food exhibitions[58] - The company intends to open about 5 restaurants by December 31, 2022, with the first one already launched in Tsim Sha Tsui in April 2021, allocating approximately HKD 9,000,000 for startup and renovation costs[61] - As of the report date, approximately HKD 2,017,000 has been spent on the renovation and startup of the new restaurant in Tsim Sha Tsui[61] - The company has reallocated unutilized net proceeds of approximately HKD 3,278,000 for general working capital, excluding rental expenses for the Yau Tong property[57] - Approximately HKD 5,211,000 of net proceeds is designated for general working capital to support daily operations, with about HKD 621,000 already utilized[61] Corporate Governance and Compliance - The financial statements were prepared in accordance with Hong Kong Financial Reporting Standards, ensuring compliance with applicable disclosure requirements[14] - The financial results for the quarter have not been audited by independent auditors but have been reviewed by the company's audit committee[16] - The company confirmed compliance with the GEM Listing Rules regarding securities trading by directors[71] - The company has adopted corporate governance practices in line with GEM Listing Rules to ensure transparency and protect shareholder interests[76] - The audit committee was established in accordance with GEM Listing Rules and consists of three independent non-executive directors[80] - The audit committee reviewed the unaudited consolidated results for the three months ended June 30, 2021, and confirmed compliance with applicable accounting standards and GEM Listing Rules[80] Market Outlook - The group anticipates that the economic recovery in Hong Kong will take time, closely monitoring market conditions for suitable opportunities[34] - The company is actively assessing and managing uncertainties arising from the COVID-19 pandemic while maintaining a reasonable optimism about its core business[61] Shareholder Information - As of June 30, 2021, the total number of issued shares was 1,162,000,000[67] - Mr. Huang Shaowen and Mr. Huang Shaohua each hold 602,800,000 shares, representing approximately 51.88% of the total shares[65] - The company has granted a total of 112,000,000 share options to employees at an exercise price of HKD 0.30 per share[70] - No share options were exercised, lapsed, or cancelled during the three months ended June 30, 2021[70] - There were no purchases, sales, or redemptions of the company's listed securities during the three months ended June 30, 2021[75] - No significant events affecting the group occurred after June 30, 2021, up to the date of the quarterly report[78] - The current executive directors include the chairman and CEO, with independent non-executive directors providing oversight[81]

[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]