ai16599398505_8537_Chong Fai_1Q22 CR_B01_op.pdf 1 8/8/2022 2:24 PM CHARACTERISTICS OF GEM OF THE STOCK EXCHANGE OF HONG KONG LIMITED (THE "STOCK EXCHANGE") 香港聯合交易所有限公司（「聯交所」）GEM 的特色 2022/23 FIRST QUARTERLY REPORT 第一季度業績報告 1 GEM has been positioned as a market designed to accommodate small and mid-sized companies to which a higher investment risk may be attached than other companies listed on the Main Board of the Stock Exchange. Prospective investors should be aware of the potential risks of investing in su ...

[CHAIRMAN'S STATEMENT](index=7&type=section&id=CHAIRMAN'S%20STATEMENT) [CHAIRMAN'S STATEMENT](index=7&type=section&id=CHAIRMAN'S%20STATEMENT) The Chairman outlines the Group's vertically integrated jewelry business model, its key product lines, and future plans for expansion and social media marketing to drive long-term growth - The Group is a vertically integrated jeweler headquartered in Hong Kong, selling its own products through a network of seven retail stores under the 'CRANSON' brand[18](index=18&type=chunk) - Key products include gem-set jewelry and gold jewelry products manufactured in Shenzhen and Guangdong, China, alongside wholesale operations and trade in recycled gold products[19](index=19&type=chunk) - The Group plans to expand its jewelry design collections and retail network and explore social media marketing to pursue sustainable long-term growth once the economic environment improves[20](index=20&type=chunk) [MANAGEMENT DISCUSSION AND ANALYSIS](index=8&type=section&id=MANAGEMENT%20DISCUSSION%20AND%20ANALYSIS) [FINANCIAL REVIEW](index=9&type=section&id=FINANCIAL%20REVIEW) In FY2022, the Group's total revenue grew by 5.5% year-on-year to HK$107.3 million, driven by gold jewelry sales, but the annual loss widened from HK$0.28 million to HK$7.68 million due to reduced government subsidies and fair value losses on financial assets [Revenue](index=9&type=section&id=Revenue) Total revenue for the fiscal year increased by 5.5% to HK$107.3 million, primarily driven by a 43.8% surge in gold jewelry sales, while retail business revenue grew by 13.4% Total Revenue | Indicator | FY2022 (HK$ million) | FY2021 (HK$ million) | YoY Change | | :--- | :--- | :--- | :--- | | **Total Revenue** | **107.3** | **101.7** | **+5.5%** | Revenue by Product | Revenue by Product | FY2022 (HK$ million) | FY2021 (HK$ million) | YoY Change | | :--- | :--- | :--- | :--- | | Gem-set jewellery products | 51.8 | 54.0 | -4.1% | | Gold jewellery products | 37.4 | 26.0 | +43.8% | | Trade in recycled gold products | 18.1 | 21.7 | -16.6% | Revenue by Business Channel | Revenue by Business Channel | FY2022 (HK$ million) | FY2021 (HK$ million) | YoY Change | | :--- | :--- | :--- | :--- | | Retail business | 78.0 | 68.8 | +13.4% | | Wholesale business | 11.2 | 11.2 | 0.0% | | Trade in recycled gold products | 18.1 | 21.7 | -16.6% | [Gross Profit and Other Income/Loss](index=12&type=section&id=Gross%20Profit%20and%20Other%20Income%2FLoss) Gross profit for the fiscal year rose by 5.0% to HK$29.2 million with a stable gross margin, but other income fell sharply due to the absence of prior-year government subsidies, and an other net loss was recorded due to fair value losses on financial assets Gross Profit and Gross Profit Margin | Indicator | FY2022 (HK$ million) | FY2021 (HK$ million) | YoY Change | | :--- | :--- | :--- | :--- | | **Gross Profit** | **29.2** | **27.8** | **+5.0%** | | **Gross Profit Margin** | **27.2%** | **27.3%** | **-0.1pp** | - Other income decreased significantly from HK$5.6 million to HK$1.0 million, mainly because the **HK$4.2 million** government anti-epidemic fund subsidy received in the prior year was not available this year[45](index=45&type=chunk) - An other net loss of **HK$1.8 million** was recorded, compared to a net gain of HK$1.3 million last year, primarily due to a **HK$2.3 million** fair value loss on financial assets at FVTPL[46](index=46&type=chunk) [Expenses, Taxation and Dividend](index=13&type=section&id=Expenses%2C%20Taxation%20and%20Dividend) During the fiscal year, selling and distribution costs decreased while general and administrative expenses increased, and the Group recorded an income tax credit due to higher pre-tax losses in Hong Kong, with the Board recommending no dividend Expense Items | Expense Item | FY2022 (HK$ million) | FY2021 (HK$ million) | YoY Change | | :--- | :--- | :--- | :--- | | Selling and distribution costs | 21.3 | 22.0 | -3.2% | | General and administrative expenses | 14.7 | 12.7 | +15.7% | | Finance costs | 1.1 | 1.3 | -15.4% | - An income tax credit of **HK$1.4 million** was recorded for the year, up from HK$1.0 million last year, due to increased pre-tax losses in Hong Kong[54](index=54&type=chunk) - The Board does not recommend the payment of any dividend for the year ended 31 March 2022[55](index=55&type=chunk) [LIQUIDITY AND FINANCIAL RESOURCES AND TREASURY POLICY](index=14&type=section&id=LIQUIDITY%20AND%20FINANCIAL%20RESOURCES%20AND%20TREASURY%20POLICY) As of 31 March 2022, the Group maintained a stable financial position with total assets of HK$129.2 million, a current ratio of 1.99, and believes its financial resources are sufficient for its operations under a prudent treasury policy Key Financial Position Indicators | Indicator | 31 March 2022 (HK$ million) | 31 March 2021 (HK$ million) | | :--- | :--- | :--- | | Total assets | 129.2 | 136.2 | | Total liabilities | 56.2 | 55.3 | | Shareholders' equity | 73.0 | 80.9 | | Total interest-bearing borrowings | 28.3 | 31.3 | Key Financial Ratios | Ratio | 31 March 2022 | 31 March 2021 | | :--- | :--- | :--- | | Current ratio | 1.99 times | 1.96 times | | Gearing ratio | 38.8% | 38.7% | - The Group adopts a prudent treasury policy with centralized treasury activities, and cash is generally held in Hong Kong dollars with major licensed banks in Hong Kong[66](index=66&type=chunk) - As of 31 March 2022, the Group had **85 employees** (2021: 90 employees)[85](index=85&type=chunk) [PRINCIPAL RISKS AND UNCERTAINTIES and OUTLOOK](index=17&type=section&id=PRINCIPAL%20RISKS%20AND%20UNCERTAINTIES%20and%20OUTLOOK) The Group faces key risks including raw material price volatility and economic challenges from COVID-19, but plans to expand its product lines, retail network, and social media marketing for future growth - The Group's principal risks include: - Fluctuation in prices of jewelry raw materials - Uncertainty in the renewal of retail store leases - Sustainability of profitability - Liquidity risk from a high gearing ratio - Impact of the economic downturn caused by COVID-19 on product demand[93](index=93&type=chunk) - Looking ahead, the Group plans to expand its jewelry design collections, enlarge its retail network, and explore extending marketing activities to social media as the economic environment improves[95](index=95&type=chunk) [BIOGRAPHICAL DETAILS OF DIRECTORS AND SENIOR MANAGEMENT](index=18&type=section&id=BIOGRAPHICAL%20DETAILS%20OF%20DIRECTORS%20AND%20SENIOR%20MANAGEMENT) [BIOGRAPHICAL DETAILS OF DIRECTORS AND SENIOR MANAGEMENT](index=18&type=section&id=BIOGRAPHICAL%20DETAILS%20OF%20DIRECTORS%20AND%20SENIOR%20MANAGEMENT) This section details the professional backgrounds and responsibilities of the executive directors, independent non-executive directors, and senior management, highlighting the extensive industry experience of the founding family members and the diverse expertise of the independent directors - The executive director team primarily consists of founding family members, including Chairman and CEO Mr. Fu Town Kong, Ms. Cheung Lai Yuk responsible for procurement, and Ms. Fu Wan Ling overseeing overall strategy and administration, all with **over 20 years of experience** in the jewelry industry[99](index=99&type=chunk)[101](index=101&type=chunk)[104](index=104&type=chunk) - The independent non-executive director team, comprising Mr. Chan Cheong Tat, Mr. Chan Tsz Ming, and Mr. Wong Wing Keung, provides independent oversight with their profound professional backgrounds in taxation, accounting, auditing, and law[113](index=113&type=chunk)[120](index=120&type=chunk)[123](index=123&type=chunk) - Senior management includes Mr. Weng Kam Keung, Head of Wholesale and Retail, who has **over 20 years of experience** in the jewelry industry and is responsible for overseeing the Group's wholesale and retail operations[130](index=130&type=chunk) [CORPORATE GOVERNANCE REPORT](index=22&type=section&id=CORPORATE%20GOVERNANCE%20REPORT) [BOARD AND COMMITTEES](index=23&type=section&id=BOARD%20AND%20COMMITTEES) The Board comprises six members, including three independent non-executive directors, and has established Audit, Remuneration, and Nomination Committees, with the only deviation from the Corporate Governance Code being the combined role of Chairman and CEO - The Board consists of six members: three executive directors (Mr. Fu Town Kong, Ms. Cheung Lai Yuk, Ms. Fu Wan Ling) and three independent non-executive directors (Mr. Chan Cheong Tat, Mr. Wong Wing Keung, Mr. Chan Tsz Ming), meeting the requirement for **INEDs to comprise over one-third of the Board**[144](index=144&type=chunk)[153](index=153&type=chunk) - The Company deviates from the Corporate Governance Code's provision that the roles of Chairman and CEO should be separate, with **Mr. Fu Town Kong holding both positions**; the Board believes this arrangement is in the Group's best interest due to his extensive experience and the presence of sufficient checks and balances[136](index=136&type=chunk)[137](index=137&type=chunk) Board Committees | Committee | Chairman | Members | | :--- | :--- | :--- | | **Audit Committee** | Mr. Chan Tsz Ming (INED) | Mr. Chan Cheong Tat (INED), Mr. Wong Wing Keung (INED) | | **Remuneration Committee** | Mr. Chan Tsz Ming (INED) | Mr. Fu Town Kong (ED), Mr. Wong Wing Keung (INED) | | **Nomination Committee** | Mr. Fu Town Kong (ED) | Mr. Chan Cheong Tat (INED), Mr. Wong Wing Keung (INED) | [INTERNAL CONTROLS AND RISK MANAGEMENT](index=31&type=section&id=INTERNAL%20CONTROLS%20AND%20RISK%20MANAGEMENT) The Board confirms its responsibility for the effectiveness of the Group's internal control and risk management systems, which it reviewed and deemed effective, and currently does not have an internal audit function due to the Group's size - The Board acknowledges its responsibility for the effectiveness of the internal control and risk management systems and, having reviewed them during the year, considers them **effective** in financial, operational, compliance, and risk management aspects[205](index=205&type=chunk)[206](index=206&type=chunk) - Given the scale of the Group's operations, an **internal audit function has not been established**; the Board considers the existing monitoring mechanisms adequate and will continuously review the need for such a department[207](index=207&type=chunk) - The Group utilizes a POS system as its primary IT platform to support business operations, effectively recording sales and inventory changes to help management assess the performance of each retail store and market demand[219](index=219&type=chunk)[220](index=220&type=chunk) [SHAREHOLDER RELATIONS AND OTHER POLICIES](index=34&type=section&id=SHAREHOLDER%20RELATIONS%20AND%20OTHER%20POLICIES) The company has established a dividend policy based on multiple factors and has clear procedures for shareholders to convene general meetings, with no significant changes to its constitutional documents during the reporting period - The Company's dividend policy states that the Board will consider multiple factors when declaring dividends, including financial performance, retained earnings, capital expenditure needs, liquidity, and the overall economic environment[225](index=225&type=chunk)[226](index=226&type=chunk) - To protect shareholder rights, shareholders holding **not less than one-tenth** of the Company's paid-up share capital have the right to make a written request for the Board to convene a special general meeting[227](index=227&type=chunk)[229](index=229&type=chunk) [REPORT OF DIRECTORS](index=37&type=section&id=REPORT%20OF%20DIRECTORS) [Business and Financial Overview](index=37&type=section&id=Business%20and%20Financial%20Overview) This section outlines the Group's principal activities in jewelry retail, wholesale, and recycled gold trading, confirms no dividend recommendation for the year, and discloses a relatively dispersed customer and supplier base - The Group is principally engaged in the retail business of its proprietary brand 'CRANSON', supplemented by jewelry wholesale and trade in recycled gold products[243](index=243&type=chunk) - The Board **does not recommend the payment of any final dividend** for the year ended 31 March 2022[257](index=257&type=chunk) - For the year ended 31 March 2022, the five largest customers accounted for approximately **5%** of total revenue, while the five largest suppliers accounted for approximately **18%** of total purchases[263](index=263&type=chunk) [Share Capital and Incentive Schemes](index=45&type=section&id=Share%20Capital%20and%20Incentive%20Schemes) This section details the Company's equity incentive plans, noting that while shares have been purchased for the Share Award Scheme, none have been granted, and no options have been granted under the Share Option Scheme, while confirming compliance with the public float requirement - The Company adopted a Share Award Scheme on 19 March 2021; as of 31 March 2022, the trustee had purchased **9,470,000 shares** for the scheme, but **no awarded shares have been granted yet**[321](index=321&type=chunk)[322](index=322&type=chunk)[323](index=323&type=chunk) - The Company adopted a Share Option Scheme on 6 March 2019, but **no options have been granted**, exercised, cancelled, or lapsed from its adoption to 31 March 2022[340](index=340&type=chunk) - Based on public information and to the knowledge of the Directors, the Company has maintained a **public float of not less than 25%**, in compliance with the GEM Listing Rules[361](index=361&type=chunk) [ENVIRONMENTAL, SOCIAL AND GOVERNANCE REPORT](index=57&type=section&id=ENVIRONMENTAL%2C%20SOCIAL%20AND%20GOVERNANCE%20REPORT) [Environmental](index=63&type=section&id=Environmental) The Group is committed to sustainable development, managing emissions through filtration and energy-saving measures, and has disclosed detailed consumption data for energy, water, and packaging materials, while also monitoring climate-related operational risks Greenhouse Gas Emissions | Greenhouse Gas Emissions (tCO2e) | FY2022 | FY2021 | | :--- | :--- | :--- | | Scope 1 (Direct Emissions) | 7.64 | - | | Scope 2 (Indirect Emissions) | 135.15 | - | | **Total Emissions** | **142.79** | **169.09** | | **Emission Intensity (tCO2e/employee)** | **1.68** | **1.88** | Resource Consumption | Resource Consumption | FY2022 | FY2021 | | :--- | :--- | :--- | | Total energy consumption (kWh) | 291,081.39 | 340,002.24 | | Total water consumption (m³) | 984.50 | 1,175.84 | | Total packaging material (tonnes) | 0.59 | 0.64 | Non-hazardous Waste Generation | Non-hazardous Waste Generation (tonnes) | FY2022 | FY2021 | | :--- | :--- | :--- | | Paper | 0.40 | 0.41 | | Ink Cartridges | 3.55 | 3.16 | | Waste Batteries | 0.07 | 0.09 | | **Total** | **4.02** | **3.66** | [Social](index=75&type=section&id=Social) The Group values its 85 employees, ensuring compliance with labor laws, providing a safe work environment with zero work-related fatalities or lost days, managing its supply chain responsibly, and upholding policies on product quality, anti-corruption, and community investment Employee Distribution (as of 31 March 2022) | Employee Distribution (as of 31 March 2022) | Number/Ratio | | :--- | :--- | | **Total Number** | **85** | | By Gender | Male: 33%, Female: 67% | | By Age | Below 30: 13%, 30-50: 41%, 51 and above: 46% | | By Region | Hong Kong: 70%, China: 30% | - In the past three years (for the years ended 31 March 2020, 2021, and 2022), the Group had **no work-related fatalities or serious injuries**, and there were **no lost days due to work injury**[523](index=523&type=chunk) - During the reporting period, all employees received training, with male employees averaging approximately **12 hours** of training and female employees averaging approximately **13 hours**[540](index=540&type=chunk) - The Group collaborates with approximately **20 suppliers**, all from China, and has implemented stringent environmental and social risk management processes[547](index=547&type=chunk) - During the reporting period, there were **no concluded legal cases regarding corrupt practices** brought against the Company or its employees[575](index=575&type=chunk) [INDEPENDENT AUDITOR'S REPORT](index=100&type=section&id=INDEPENDENT%20AUDITOR'S%20REPORT) [INDEPENDENT AUDITOR'S REPORT](index=100&type=section&id=INDEPENDENT%20AUDITOR'S%20REPORT) The independent auditor, Grant Thornton Hong Kong Limited, issued an unmodified opinion on the consolidated financial statements for the year ended 31 March 2022, identifying 'valuation of inventories' as a key audit matter due to its material balance and the significant management judgment involved - The auditor concluded that the consolidated financial statements give a true and fair view of the Group's consolidated financial position as of 31 March 2022, and of its financial performance and cash flows for the year in accordance with Hong Kong Financial Reporting Standards, issuing an **unmodified opinion**[606](index=606&type=chunk) - The key audit matter was the **valuation of inventories**, as the carrying amount of **HK$59,634,000** represents approximately **46%** of the Group's total assets, and its valuation involves significant management judgment in determining provisions for inventories[613](index=613&type=chunk) [CONSOLIDATED FINANCIAL STATEMENTS](index=108&type=section&id=CONSOLIDATED%20FINANCIAL%20STATEMENTS) [CONSOLIDATED STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME](index=108&type=section&id=CONSOLIDATED%20STATEMENT%20OF%20PROFIT%20OR%20LOSS%20AND%20OTHER%20COMPREHENSIVE%20INCOME) For the year ended 31 March 2022, the Group's revenue increased by 5.5% to HK$107.3 million, but the loss for the year widened to HK$7.68 million from HK$0.28 million in the prior year, resulting in a basic and diluted loss per share of 1.02 HK cents Key P&L Items | Item (HK$'000) | FY2022 | FY2021 | | :--- | :--- | :--- | | Revenue | 107,344 | 101,702 | | Gross profit | 29,154 | 27,769 | | Loss before tax | (9,065) | (1,244) | | **Loss for the year** | **(7,683)** | **(280)** | | Basic and diluted loss per share (HK cents) | (1.02) | (0.04) | [CONSOLIDATED STATEMENT OF FINANCIAL POSITION](index=109&type=section&id=CONSOLIDATED%20STATEMENT%20OF%20FINANCIAL%20POSITION) As of 31 March 2022, the Group's total assets stood at HK$129.2 million and total liabilities at HK$56.2 million, with inventories and bank borrowings being the largest components of assets and liabilities, respectively Key Balance Sheet Items | Item (HK$'000) | 31 March 2022 | 31 March 2021 | | :--- | :--- | :--- | | **Non-current assets** | **36,377** | **30,006** | | **Current assets** | **92,791** | **106,228** | | Of which: Inventories | 59,634 | 61,568 | | Of which: Bank balances and cash | 20,572 | 32,021 | | **Total assets** | **129,168** | **136,234** | | **Current liabilities** | **46,592** | **54,192** | | Of which: Bank borrowings | 28,295 | 31,324 | | **Non-current liabilities** | **9,626** | **1,101** | | **Total liabilities** | **56,218** | **55,293** | | **Net assets** | **72,950** | **80,941** | [CONSOLIDATED STATEMENT OF CASH FLOWS](index=112&type=section&id=CONSOLIDATED%20STATEMENT%20OF%20CASH%20FLOWS) For the fiscal year, the Group generated HK$6.88 million in net cash from operating activities, while net cash used in investing and financing activities led to a decrease in cash and cash equivalents to HK$20.57 million at year-end Key Cash Flow Items | Item (HK$'000) | FY2022 | FY2021 | | :--- | :--- | :--- | | Net cash generated from operating activities | 6,883 | 1,267 | | Net cash used in investing activities | (3,407) | (8,374) | | Net cash used in financing activities | (14,927) | (4,296) | | **Net decrease in cash and cash equivalents** | **(11,451)** | **(11,403)** | | Cash and cash equivalents at beginning of year | 32,021 | 43,429 | | **Cash and cash equivalents at end of year** | **20,572** | **32,021** | [FINANCIAL SUMMARY](index=210&type=section&id=FINANCIAL%20SUMMARY) [FINANCIAL SUMMARY](index=210&type=section&id=FINANCIAL%20SUMMARY) This section provides a five-year summary of the Group's key financial data, showing a declining revenue trend since FY2019 and consecutive pre-tax losses in the last three years Five-Year Financial Summary | Item (HK$'000) | 2022 | 2021 | 2020 | 2019 | 2018 | | :--- | :--- | :--- | :--- | :--- | :--- | | **Revenue** | 107,344 | 101,702 | 119,869 | 175,589 | 173,020 | | **(Loss)/profit before tax** | (9,065) | (1,244) | (6,854) | 3,908 | 8,012 | | **(Loss)/profit for the year** | (7,683) | (280) | (5,484) | 2,223 | 4,835 | | **Total assets** | 129,168 | 136,234 | 137,335 | 157,471 | 138,196 | | **Total liabilities** | (56,218) | (55,293) | (55,730) | (69,692) | (84,813) | | **Total equity** | 72,950 | 80,941 | 81,605 | 87,779 | 53,383 |

chong fai 3Q21_22_orange_OP.pdf 1 9/2/2022 13:39:06 CHARACTERISTICS OF GEM OF THE STOCK EXCHANGE OF HONG KONG LIMITED (THE "STOCK EXCHANGE") 香港聯合交易所有限公司（「聯交所」）GEM 的特色 GEM has been positioned as a market designed to accommodate small and mid-sized companies to which a higher investment risk may be attached than other companies listed on the Main Board of the Stock Exchange. Prospective investors should be aware of the potential risks of investing in such companies and should make the decision to invest only ...

[Corporate Information](index=4&type=section&id=Corporate%20Information) The report lists the company's key management personnel, including executive directors, independent non-executive directors, and members of the audit, remuneration, and nomination committees - The company's principal bankers are The Hongkong and Shanghai Banking Corporation Limited and Nanyang Commercial Bank, Limited[16](index=16&type=chunk) - The company's headquarters and principal place of business in Hong Kong are located in Hung Hom, Kowloon[20](index=20&type=chunk) [Financial Highlights](index=7&type=section&id=Financial%20Highlights) The Group's interim performance for 2021/22 saw revenue increase by **34.5%** to approximately **HKD 55.13 million**, but shifted from a profit of approximately **HKD 0.19 million** to a loss of approximately **HKD 0.94 million** 2021/22 Interim Performance Highlights | Metric | Six Months Ended September 30, 2021 | Six Months Ended September 30, 2020 | Year-on-Year Change | | :--- | :--- | :--- | :--- | | Revenue | approximately **HKD 55.13 million** | approximately **HKD 41.00 million** | ▲ 34.5% | | (Loss) Profit for the Period | loss of approximately **HKD 0.94 million** | profit of approximately **HKD 0.19 million** | shifted from profit to loss | | Interim Dividend | not recommended | N/A | - | [Management Discussion and Analysis](index=8&type=section&id=Management%20Discussion%20and%20Analysis) This section provides an overview of the Group's operational performance, financial position, capital structure, and human resources, along with future strategies [Business Review and Outlook](index=8&type=section&id=Business%20Review%20and%20Outlook) The Group's total revenue increased by **34.5%** year-on-year, driven by a rebound in local consumer sentiment and store traffic in Hong Kong, with gem-set jewelry and pure gold product sales being key growth drivers, while recycled gold product trading revenue decreased; the Group plans to expand jewelry design, retail network, and social media marketing to capitalize on future economic improvements - Future strategy: The Group aims to expand its jewelry design series, enlarge its retail network, and explore extending marketing activities to social media to sustain long-term growth[29](index=29&type=chunk) Revenue Breakdown by Product Category (Six Months Ended September 30) | Product Category | Revenue 2021 (HKD million) | Revenue 2020 (HKD million) | Year-on-Year Change | | :--- | :--- | :--- | :--- | | Gem-set Jewelry Products | 25.75 | 19.15 | ▲ 34.5% | | Pure Gold Products | 25.62 | 12.10 | ▲ 111.7% | | Recycled Gold Product Trading | 3.76 | 9.76 | ▼ 61.5% | Revenue Breakdown by Sales Channel (Six Months Ended September 30) | Sales Channel | Revenue 2021 (HKD million) | Revenue 2020 (HKD million) | Year-on-Year Change | | :--- | :--- | :--- | :--- | | Retail | 45.63 | 26.56 | ▲ 71.8% | | Wholesale | 5.75 | 4.69 | ▲ 22.6% | - Other income significantly decreased from **HKD 3.6 million** in the prior period to **HKD 0.8 million**, primarily due to approximately **HKD 3.0 million** in government anti-epidemic fund subsidies received in the prior period, which were absent in the current reporting period[46](index=46&type=chunk) [Liquidity and Financial Resources](index=11&type=section&id=Liquidity%20and%20Financial%20Resources) As of September 30, 2021, the Group maintained a sound financial position with total assets of **HKD 129 million** and a current ratio of **2.0 times**; the gearing ratio slightly increased from **38.7%** to **38.8%** due to a decrease in total equity, with cash primarily held in HKD at major licensed banks in Hong Kong under a prudent treasury policy Financial Position Overview | Metric | September 30, 2021 | March 31, 2021 | | :--- | :--- | :--- | | Total Assets | HKD 129 million | HKD 136.2 million | | Total Liabilities | HKD 49.1 million | HKD 55.3 million | | Shareholders' Equity | HKD 79.9 million | HKD 80.9 million | | Total Interest-bearing Borrowings | HKD 30.9 million | HKD 31.3 million | | Current Ratio | 2.0 times | 1.9 times | | Gearing Ratio | 38.8% | 38.7% | - The Group adopts prudent financial management and treasury policies, with centralized treasury activities and cash primarily held in HKD at major licensed banks in Hong Kong[60](index=60&type=chunk) [Capital Structure and Other Financial Information](index=12&type=section&id=Capital%20Structure%20and%20Other%20Financial%20Information) The company's capital structure has remained unchanged since its 2019 listing, with **HKD 7.5 million** in issued share capital corresponding to **750 million** ordinary shares; as of the period-end, the Group had no pledged assets, significant investment plans, capital commitments, or contingent liabilities, and deemed its foreign currency exposure immaterial, thus not adopting a hedging policy - As of September 30, 2021, the company's issued share capital was **HKD 7,500,000**, with **750,000,000** ordinary shares issued, and the capital structure has remained unchanged since its listing[66](index=66&type=chunk)[67](index=67&type=chunk) - At the end of the reporting period, the Group had no pledged assets, capital commitments, or contingent liabilities[68](index=68&type=chunk)[72](index=72&type=chunk)[73](index=73&type=chunk) - The Group primarily faces foreign currency risks from USD and RMB, but management considers the exposure immaterial and has not adopted a foreign currency hedging policy[70](index=70&type=chunk)[71](index=71&type=chunk) [Employees and Remuneration Policies](index=13&type=section&id=Employees%20and%20Remuneration%20Policies) As of September 30, 2021, the Group employed **95** staff members, a slight increase from **90** as of March 31, 2021; employee remuneration is determined by qualifications, duties, contributions, and experience, complemented by comprehensive training programs - As of September 30, 2021, the Group's employee count was **95**, an increase from **90** as of March 31, 2021[80](index=80&type=chunk) [Other Information](index=14&type=section&id=Other%20Information) This section details the company's corporate governance practices, director and shareholder interests, share schemes, and other key disclosures [Corporate Governance and Director Information](index=14&type=section&id=Corporate%20Governance%20and%20Director%20Information) During the reporting period, the company largely complied with the Corporate Governance Code, except for deviation from provision A.2.1 where the Chairman and Chief Executive Officer roles are held by the same individual, Mr. Fu Chun Keung, which the Board deems to be in the Group's best interest; the report also disclosed changes in the directorship of independent non-executive director Mr. Chan Tsz Ming - The company deviated from Corporate Governance Code provision A.2.1, with Mr. Fu Chun Keung serving as both Chairman and Chief Executive Officer; the Board believes this arrangement is in the Group's best interest due to his extensive experience and critical importance to the Group's development[85](index=85&type=chunk)[86](index=86&type=chunk) - Director information change: Mr. Chan Tsz Ming resigned as an independent non-executive director of Glory Flame International Holdings Limited (stock code: 990) on August 28, 2021[87](index=87&type=chunk) [Directors' and Shareholders' Interests](index=15&type=section&id=Directors'%20and%20Shareholders'%20Interests) As of September 30, 2021, executive directors Mr. Fu Chun Keung, Ms. Fu Wan Ling, and Ms. Cheung Lai Yuk collectively held **562,500,000** shares, representing **75%** of the issued share capital, through their jointly controlled entity Mythe Group Holdings Company Limited, which also constitutes a major shareholder interest Directors' and Major Shareholders' Shareholdings (As of September 30, 2021) | Name/Entity | Capacity | Number of Shares Held | Percentage of Shareholding | | :--- | :--- | :--- | :--- | | Mr. Fu Chun Keung | Interest in controlled corporation | 562,500,000 | 75% | | Ms. Fu Wan Ling | Interest in controlled corporation | 562,500,000 | 75% | | Ms. Cheung Lai Yuk | Interest in controlled corporation, Spouse's interest | 562,500,000 | 75% | | MGH Limited | Beneficial interest | 562,500,000 | 75% | [Share Schemes](index=19&type=section&id=Share%20Schemes) The company has a share award scheme adopted on March 19, 2021, and a share option scheme adopted on March 6, 2019, both designed to incentivize and reward eligible individuals for their contributions to the Group; as of September 30, 2021, no share awards or share options had been granted, exercised, or cancelled under either scheme - The company adopted a share award scheme on March 19, 2021, aimed at recognizing and rewarding contributions from eligible individuals[109](index=109&type=chunk) - The company adopted a share option scheme on March 6, 2019, designed to incentivize eligible participants[115](index=115&type=chunk) - As of September 30, 2021, no awards or share options had been granted, exercised, outstanding, cancelled, or lapsed under either the share award scheme or the share option scheme[111](index=111&type=chunk)[116](index=116&type=chunk) [Audit Committee and Other Disclosures](index=20&type=section&id=Audit%20Committee%20and%20Other%20Disclosures) The Audit Committee, comprising three independent non-executive directors, has reviewed the unaudited consolidated results for the period; the report confirms that directors and their close associates have no competing business interests, the company maintains sufficient public float, and there are no current plans for significant acquisitions or disposals - The Audit Committee, composed of three independent non-executive directors, has reviewed the financial results for the period and deemed their preparation compliant with accounting standards and relevant regulations[118](index=118&type=chunk)[119](index=119&type=chunk) - As of the reporting date, the company maintained a sufficient public float as required by the GEM Listing Rules[126](index=126&type=chunk) [Unaudited Interim Financial Information](index=22&type=section&id=Unaudited%20Interim%20Financial%20Information) This section presents the Group's unaudited condensed consolidated financial statements, including the statement of profit or loss, financial position, changes in equity, cash flows, and accompanying notes [Condensed Consolidated Statement of Profit or Loss and Other Comprehensive Income](index=22&type=section&id=Condensed%20Consolidated%20Statement%20of%20Profit%20or%20Loss%20and%20Other%20Comprehensive%20Income) For the six months ended September 30, 2021, the Group shifted from a profit of **HKD 0.189 million** in the prior year to a loss of **HKD 0.936 million**; despite a **34.5%** revenue increase to **HKD 55.13 million** and gross profit rising to **HKD 16.91 million**, the overall result turned to loss primarily due to a significant decrease in other income (mainly from prior-year government subsidies) and fair value losses on financial assets, resulting in a basic loss per share of **HKD 0.12 cents** Condensed Consolidated Statement of Profit or Loss Summary (Six Months Ended September 30) | Item (HKD thousand) | 2021 (Unaudited) | 2020 (Unaudited) | | :--- | :--- | :--- | | Revenue | 55,134 | 41,003 | | Gross Profit | 16,907 | 13,311 | | Other Income | 832 | 3,569 | | Other Gains or Losses | (807) | 520 | | (Loss) Profit Before Taxation | (1,401) | 227 | | (Loss) Profit for the Period | (936) | 189 | | Basic (Loss) Earnings Per Share (HK cents) | (0.12) | 0.03 | [Condensed Consolidated Statement of Financial Position](index=23&type=section&id=Condensed%20Consolidated%20Statement%20of%20Financial%20Position) As of September 30, 2021, the Group's total assets were **HKD 129 million**, a slight decrease from March 31, 2021, with net assets (total equity) at **HKD 79.93 million**; net current assets stood at **HKD 51.08 million**, indicating strong short-term solvency, with key assets including inventories (**HKD 61.79 million**) and bank balances and cash (**HKD 29.37 million**), and primary liabilities being bank borrowings (**HKD 30.97 million**) Statement of Financial Position Summary (HKD thousand) | Item | September 30, 2021 (Unaudited) | March 31, 2021 (Audited) | | :--- | :--- | :--- | | Non-current Assets | 28,845 | 30,006 | | Current Assets | 100,164 | 106,228 | | **Total Assets** | **129,009** | **136,234** | | Current Liabilities | 49,081 | 54,192 | | Non-current Liabilities | — | 1,101 | | **Total Liabilities** | **49,081** | **55,293** | | **Net Assets** | **79,928** | **80,941** | | **Total Equity** | **79,928** | **80,941** | [Condensed Consolidated Statement of Changes in Equity](index=25&type=section&id=Condensed%20Consolidated%20Statement%20of%20Changes%20in%20Equity) For the six months ended September 30, 2021, the Group's total equity decreased by **HKD 1.013 million** from **HKD 80.94 million** at the beginning of the period to **HKD 79.93 million** at the end, primarily due to a loss of **HKD 0.936 million** for the period and exchange differences of **HKD 0.077 million** arising from translation of foreign operations - Total equity decreased by **HKD 1.013 million** during the period, from **HKD 80.941 million** to **HKD 79.928 million**[137](index=137&type=chunk) - The decrease in equity was primarily composed of a loss for the period of **HKD 0.936 million** and exchange differences (loss) of **HKD 0.077 million** arising from the translation of foreign operations[137](index=137&type=chunk) [Consolidated Statement of Cash Flows](index=26&type=section&id=Consolidated%20Statement%20of%20Cash%20Flows) During the reporting period, the Group's cash and cash equivalents decreased by **HKD 2.65 million**; net cash generated from operating activities significantly declined to **HKD 0.91 million** from **HKD 8.66 million** in the prior year, while investing activities generated **HKD 0.18 million** in net cash, and financing activities resulted in a net outflow of **HKD 3.74 million** due to repayment of bank loans and lease liabilities, with the period-end cash and cash equivalents balance at **HKD 29.37 million** Cash Flow Statement Summary (Six Months Ended September 30, HKD thousand) | Item | 2021 (Unaudited) | 2020 (Unaudited) | | :--- | :--- | :--- | | Net Cash from Operating Activities | 907 | 8,664 | | Net Cash from Investing Activities | 181 | (13,683) | | Net Cash from Financing Activities | (3,739) | (1,841) | | **Net Decrease in Cash and Cash Equivalents** | **(2,651)** | **(6,860)** | | Cash and Cash Equivalents at Beginning of Period | 32,021 | 43,429 | | **Cash and Cash Equivalents at End of Period** | **29,365** | **36,582** | [Notes to the Condensed Consolidated Financial Statements](index=28&type=section&id=Notes%20to%20the%20Condensed%20Consolidated%20Financial%20Statements) This section provides the basis of preparation, significant accounting policies, and detailed explanations for various financial statement items, including revenue segmentation by business and product categories, the impact of government grants on other income, taxation, earnings per share composition, aging analysis of assets and liabilities, and share capital structure [Note 4. REVENUE AND SEGMENT INFORMATION](index=29&type=section&id=Note%204.%20REVENUE%20AND%20SEGMENT%20INFORMATION) Of the total revenue of **HKD 55.13 million**, the jewelry business contributed **HKD 51.37 million**, with retail accounting for **HKD 45.63 million** and wholesale for **HKD 5.75 million**; recycled gold product trading contributed **HKD 3.76 million**, and by product category, revenue from gem-set jewelry products and gold jewelry products was comparable at **HKD 25.75 million** and **HKD 25.62 million**, respectively Revenue Breakdown (Six Months Ended September 30, 2021) | Business Segment | Revenue (HKD thousand) | | :--- | :--- | | Jewelry Retail Business | 45,625 | | Wholesale of Jewelry Products | 5,746 | | Recycled Gold Product Trading | 3,763 | | **Total** | **55,134** | [Note 5, 6, 7. Other Income, Gains/Losses, and Finance Costs](index=30&type=section&id=Note%205%2C%206%2C%207.%20Other%20Income%2C%20Gains%2FLosses%2C%20and%20Finance%20Costs) Other income significantly decreased to **HKD 0.832 million** year-on-year, primarily due to the absence of **HKD 3.0 million** in government subsidies received in the prior period; other gains/losses recorded a net loss of **HKD 0.807 million**, mainly from fair value losses on financial assets, and finance costs amounted to **HKD 0.579 million**, predominantly from bank borrowing interest - The primary reason for the year-on-year decrease in other income was the **HKD 3.0 million** in government subsidies (Anti-epidemic Fund and Employment Support Scheme) received in the corresponding period of 2020, which were not present in the current reporting period[162](index=162&type=chunk)[163](index=163&type=chunk) - A net other loss of approximately **HKD 0.807 million** was recorded, primarily due to a fair value loss of **HKD 0.798 million** on financial assets at fair value through profit or loss[165](index=165&type=chunk) [Note 8, 9. (Loss) Profit Before Taxation and Taxation](index=32&type=section&id=Note%208%2C%209.%20(Loss)%20Profit%20Before%20Taxation%20and%20Taxation) The pre-tax loss for the reporting period was **HKD 1.401 million**; key expenses included total staff costs of **HKD 9.151 million** and depreciation of property, plant, and equipment totaling **HKD 5.29 million**; in terms of taxation, a deferred tax credit of **HKD 0.465 million** was recognized, narrowing the after-tax loss Key Expense Items (Six Months Ended September 30) | Item (HKD thousand) | 2021 | 2020 | | :--- | :--- | :--- | | Total Staff Costs | 9,151 | 7,920 | | Total Depreciation of Property, Plant and Equipment | 5,290 | 5,750 | | Cost of Inventories Recognized as Expense | 38,172 | 27,642 | [Note 10, 11. Dividends and (Loss) Earnings Per Share](index=33&type=section&id=Note%2010%2C%2011.%20Dividends%20and%20(Loss)%20Earnings%20Per%20Share) During the reporting period, the company neither paid, declared, nor proposed any dividends; based on a loss of **HKD 0.936 million** for the period and a weighted average of **750 million** shares, the basic loss per share was calculated at **HKD 0.12 cents**; diluted earnings per share were not presented due to the absence of potential dilutive ordinary shares - The Directors resolved not to declare any dividend for the interim period[174](index=174&type=chunk) - Basic loss per share was **HKD 0.12 cents**, calculated based on a loss for the period of **HKD 0.936 million** and a weighted average of **750,000,000** ordinary shares[179](index=179&type=chunk) [Note 13, 14. Assets and Liabilities Analysis](index=35&type=section&id=Note%2013%2C%2014.%20Assets%20and%20Liabilities%20Analysis) As of September 30, 2021, net trade receivables amounted to **HKD 1.649 million**, primarily aged within **60** days; trade payables were **HKD 3.389 million**, with a significant portion of **HKD 1.547 million** aged over **90** days Trade Receivables Aging Analysis (HKD thousand) | Aging | September 30, 2021 | | :--- | :--- | | 0 to 30 days | 882 | | 31 to 60 days | 471 | | 61 to 90 days | 124 | | Over 90 days | 222 | | **Total** | **1,699** | Trade Payables Aging Analysis (HKD thousand) | Aging | September 30, 2021 | | :--- | :--- | | 0 to 30 days | 592 | | 31 to 60 days | 553 | | 61 to 90 days | 697 | | Over 90 days | 1,547 | | **Total** | **3,389** | [Note 15. SHARE CAPITAL](index=37&type=section&id=Note%2015.%20SHARE%20CAPITAL) As of September 30, 2021, the company's authorized share capital was **HKD 15 million** (**1.5 billion** shares at **HKD 0.01** par value per share), with issued and fully paid share capital at **HKD 7.5 million** (**750 million** shares); there were no changes in the share capital structure during the reporting period Share Capital Structure (As of September 30, 2021) | Item | Number of Shares | Amount (HKD) | | :--- | :--- | :--- | | Authorized ordinary shares (HKD 0.01 par value per share) | 1,500,000,000 | 15,000,000 | | Issued and fully paid ordinary shares | 750,000,000 | 7,500,000 |

[Corporate Information](index=4&type=section&id=Corporate%20Information) This section provides essential corporate details including board members, committee structures, key senior management, auditors, legal advisors, principal bankers, share registrars, and registered office information [Corporate Basic Information](index=4&type=section&id=Corporate%20Information) This chapter provides the company's basic information, including key contact details for the board of directors, committee composition, key senior management, auditors, legal advisors, principal bankers, share registrar, and registered office - The company's Chairman and Chief Executive Officer is **Mr. Fu Chun Keung**[13](index=13&type=chunk) - The appointment of Ample Capital Limited as the company's compliance advisor concluded on **June 30, 2021**[16](index=16&type=chunk)[17](index=17&type=chunk) [Financial Highlights](index=7&type=section&id=Financial%20Highlights) This section summarizes the first quarter performance, noting a 35.1% revenue increase to HKD 27.1 million but an expanded loss of HKD 0.279 million, with no dividend recommended [First Quarter Performance Summary](index=7&type=section&id=Financial%20Highlights) For the three months ended June 30, 2021, the Group's revenue increased by 35.1% year-on-year to HKD 27.1 million, but the loss expanded from HKD 0.09 million in the prior year to HKD 0.279 million, with the Board not recommending any dividend | Metric | Three Months Ended June 30, 2021 | Three Months Ended June 30, 2020 | Year-on-Year Change | | :--- | :--- | :--- | :--- | | Revenue | Approximately **HKD 27.1 million** | Approximately **HKD 20.08 million** | +35.1% | | Loss for the Period | Approximately **HKD 0.279 million** | Approximately **HKD 0.09 million** | Loss expanded | - The Board does not recommend the payment of any dividend for the three months ended **June 30, 2021**[22](index=22&type=chunk)[24](index=24&type=chunk) [Management Discussion and Analysis](index=8&type=section&id=Management%20Discussion%20and%20Analysis) This section discusses the company's business outlook, review of operations by product and sales channel, and financial performance [Business Outlook](index=8&type=section&id=OUTLOOK) Despite the ongoing impact of the COVID-19 pandemic on Hong Kong's retail sector, the Group plans to expand its jewelry design series and retail network once the pandemic and economic environment improve, while also exploring social media marketing to generate shareholder returns and sustain long-term growth - The **COVID-19 pandemic** continues to impact Hong Kong's retail sector through social distancing measures, leading to decreased consumer spending[29](index=29&type=chunk)[33](index=33&type=chunk) - Future strategies include **expanding jewelry design series**, **extending the retail network**, and **exploring social media marketing**[30](index=30&type=chunk)[33](index=33&type=chunk) [Business Review](index=9&type=section&id=BUSINESS%20REVIEW) Total revenue for the quarter increased by 35.1% to HKD 27.12 million, primarily driven by increased marketing activities boosting sales of gem-set jewelry and pure gold products, though recycled gold product trade revenue declined due to global gold price fluctuations, with both retail and wholesale channels showing significant growth - Total revenue for the quarter increased by **HKD 7.04 million** (35.1% year-on-year), primarily driven by increased sales of gem-set jewelry and pure gold products, partially offset by a decrease in recycled gold product trade revenue, mainly attributable to increased marketing activities[34](index=34&type=chunk)[38](index=38&type=chunk) [Revenue Analysis by Product](index=9&type=section&id=Revenue%20by%20Products) This quarter saw strong revenue growth in gem-set jewelry products and pure gold products, increasing by 31.5% and 126.7% respectively, primarily due to market promotion activities, while recycled gold product trade revenue significantly decreased by 46.0% due to global gold price fluctuations | Product Category | Q1 2021 Revenue (Million HKD) | Q1 2020 Revenue (Million HKD) | Year-on-Year Change | | :--- | :--- | :--- | :--- | | Gem-set Jewelry Products | **13.70** | **10.42** | +31.5% | | Pure Gold Products | **10.77** | **4.75** | +126.7% | | Recycled Gold Product Trade | **2.65** | **4.91** | -46.0% | [Revenue Analysis by Business (Sales Channels)](index=10&type=section&id=Revenue%20by%20Business%20%28sales%20channels%29) This quarter, retail channel revenue increased by 66.5% year-on-year, and wholesale channel revenue increased by 32.5%, primarily due to increased marketing activities, while recycled gold product trade revenue decreased by 46.0% | Sales Channel | Q1 2021 Revenue (Million HKD) | Q1 2020 Revenue (Million HKD) | Year-on-Year Change | | :--- | :--- | :--- | :--- | | Retail | **21.36** | **12.83** | +66.5% | | Wholesale | **3.10** | **2.34** | +32.5% | | Recycled Gold Product Trade | **2.65** | **4.91** | -46.0% | [Financial Review](index=10&type=section&id=Other%20income) Other income for the quarter was HKD 0.4 million, a significant decrease of HKD 1.4 million from HKD 1.8 million in the prior year, primarily because the prior period included approximately HKD 1.67 million in government anti-epidemic fund subsidies, which were absent this quarter - Other income decreased from **HKD 1.8 million** in the prior year to **HKD 0.4 million**, mainly due to **HKD 1.67 million** in government subsidies (Anti-epidemic Fund and Employment Support Scheme) received in the prior period, which were not present in the current period[46](index=46&type=chunk)[50](index=50&type=chunk) [Other Information](index=11&type=section&id=Other%20Information) This section covers corporate governance practices, directors' and substantial shareholders' interests, share schemes, and the audit committee's review [Corporate Governance Practices](index=11&type=section&id=CORPORATE%20GOVERNANCE%20PRACTICE) The company is committed to maintaining high standards of corporate governance, largely complying with the Corporate Governance Code during the reporting period, but deviating from code provision A.2.1 where the Chairman and Chief Executive Officer roles are held by the same person, Mr. Fu Chun Keung, an arrangement the Board believes is in the Group's best interest given Mr. Fu's critical role and extensive experience - The company deviated from Corporate Governance Code (CG Code) provision A.2.1, where the **Chairman and Chief Executive Officer roles are held by the same person, Mr. Fu Chun Keung**[52](index=52&type=chunk)[54](index=54&type=chunk) - The Board believes this arrangement is appropriate as it benefits the Group's overall management, decision-making, and strategic planning, with effective checks and balances from senior management and the Board[53](index=53&type=chunk)[54](index=54&type=chunk) [Directors' and Substantial Shareholders' Interests](index=12&type=section&id=Directors%27%20and%20Substantial%20Shareholders%27%20Interests) As of June 30, 2021, MGH Limited, the company's principal controlling shareholder, held 75% of the company's shares, with directors Mr. Fu Chun Keung, Ms. Fu Wan Ling, and Ms. Cheung Lai Yuk deemed to jointly hold these shares through their interests in MGH Limited, and no other substantial shareholder interests or short positions were disclosed beyond the information provided | Name | Capacity | Number of Shares Held | Percentage of Equity | | :--- | :--- | :--- | :--- | | Mr. FU Chun Keung | Controlled Corporation Interest | **562,500,000** | **75%** | | Ms. FU Wan Ling | Controlled Corporation Interest | **562,500,000** | **75%** | | Ms. CHEUNG Lai Yuk | Controlled Corporation Interest, Spouse's Interest | **562,500,000** | **75%** | - **MGH Limited**, as the beneficial owner, holds **562,500,000 shares**, representing **75%** of the company's issued share capital[69](index=69&type=chunk) [Share Schemes](index=16&type=section&id=Share%20Schemes) The company adopted a Share Award Scheme on March 19, 2021, and a Share Option Scheme on March 6, 2019, with no share awards or options granted, exercised, cancelled, or lapsed under either scheme as of June 30, 2021 - The company has adopted a **Share Award Scheme** (March 19, 2021) and a **Share Option Scheme** (March 6, 2019)[72](index=72&type=chunk)[73](index=73&type=chunk) - As of **June 30, 2021**, no awards or share options have been granted, exercised, or remain outstanding under either the Share Award Scheme or the Share Option Scheme[72](index=72&type=chunk)[74](index=74&type=chunk) [Audit Committee](index=17&type=section&id=AUDIT%20COMMITTEE) The Audit Committee, comprising three independent non-executive directors with Mr. Chan Tsz Ming as Chairman, has reviewed the unaudited consolidated results for the quarter and found them to be prepared in compliance with appropriate accounting standards and relevant regulations - The Audit Committee comprises **three independent non-executive directors**, with **Mr. Chan Tsz Ming as Chairman**[82](index=82&type=chunk)[87](index=87&type=chunk) - The Audit Committee has reviewed the **unaudited consolidated results for the three months ended June 30, 2021**[83](index=83&type=chunk)[87](index=87&type=chunk) [Unaudited Condensed Consolidated Financial Statements](index=19&type=section&id=Unaudited%20Condensed%20Consolidated%20Financial%20Statements) This section presents the unaudited condensed consolidated financial statements, including the statement of profit or loss and other comprehensive income, statement of changes in equity, and notes to the financial statements [Unaudited Condensed Consolidated Statement of Profit or Loss and Other Comprehensive Income](index=19&type=section&id=Unaudited%20Condensed%20Consolidated%20Statement%20of%20Profit%20or%20Loss%20and%20Other%20Comprehensive%20Income) For the three months ended June 30, 2021, the company reported revenue of HKD 27.117 million, a 35.1% year-on-year increase, and gross profit of HKD 8.164 million, up 17.0%, but due to increased selling and administrative expenses and a significant decrease in other income, the loss for the period expanded to HKD 0.279 million from HKD 0.085 million in the prior year, resulting in a basic loss per share of HKD 0.04 cents | Financial Metric (Thousand HKD) | Three Months Ended June 30, 2021 | Three Months Ended June 30, 2020 | | :--- | :--- | :--- | | Revenue | **27,117** | **20,079** | | Gross profit | **8,164** | **6,975** | | Loss before taxation | **(539)** | **(73)** | | Loss for the period | **(279)** | **(85)** | | Basic loss per share (HK cents) | **(0.04)** | **(0.01)** | [Unaudited Condensed Consolidated Statement of Changes in Equity](index=20&type=section&id=Unaudited%20Condensed%20Consolidated%20Statement%20of%20Changes%20in%20Equity) As of June 30, 2021, the company's total equity was HKD 80.587 million, a slight decrease from HKD 80.941 million as of March 31, 2021, primarily due to a loss for the period of HKD 0.279 million and an exchange difference expense of HKD 0.075 million | Equity Item (Thousand HKD) | March 31, 2021 (Audited) | June 30, 2021 (Unaudited) | | :--- | :--- | :--- | | Total Equity | **80,941** | **80,587** | [Notes to the Unaudited Condensed Consolidated Financial Statements](index=21&type=section&id=Notes%20to%20the%20Unaudited%20Condensed%20Consolidated%20Financial%20Statements) The financial statement notes provide detailed information on the company's general information, basis of preparation, revenue composition, other income, expense items, loss per share calculation, and dividend policy, highlighting revenue breakdown by business and product type, and the reason for the significant decrease in other income [Note 3: Revenue and Segment Information](index=22&type=section&id=3.%20REVENUE%20AND%20SEGMENT%20INFORMATION) Total revenue for the quarter was HKD 27.117 million, with jewelry business (retail and wholesale) contributing HKD 24.463 million and recycled gold product trade contributing HKD 2.654 million; by product, gem-set jewelry products generated HKD 13.699 million and gold jewelry products generated HKD 10.764 million Revenue by Business (Thousand HKD) | Business Type | Q1 2021 | Q1 2020 | | :--- | :--- | :--- | | Retail business of jewelry shops | **21,363** | **12,831** | | Wholesale of jewelry products | **3,100** | **2,336** | | Recycled gold product trade | **2,654** | **4,912** | | **Total** | **27,117** | **20,079** | Revenue by Product (Thousand HKD) | Product Type | Q1 2021 | Q1 2020 | | :--- | :--- | :--- | | Gem-set jewelry products | **13,699** | **10,422** | | Gold jewelry products | **10,764** | **4,745** | | Recycled gold product trade | **2,654** | **4,912** | | **Total** | **27,117** | **20,079** | [Note 4: Other Income](index=23&type=section&id=4.%20OTHER%20INCOME) Total other income for the quarter was HKD 0.04 million, significantly lower than HKD 1.8 million in the prior year, primarily due to the absence of HKD 1.672 million in Hong Kong government anti-epidemic fund and Employment Support Scheme subsidies received in the prior period - The **HKD 1.672 million** government grants received in the prior period were from the **Retail Sector Subsidy Scheme** and the **Employment Support Scheme** under the Hong Kong SAR Government's Anti-epidemic Fund[118](index=118&type=chunk)[120](index=120&type=chunk) [Note 8: Loss Per Share](index=25&type=section&id=8.%20LOSS%20PER%20SHARE) Basic loss per share for the quarter was HKD 0.04 cents, calculated based on a loss for the period of HKD 0.279 million and a weighted average of 750 million shares, with no diluted loss per share presented due to the absence of outstanding potentially dilutive ordinary shares | Metric | Three Months Ended June 30, 2021 | Three Months Ended June 30, 2020 | | :--- | :--- | :--- | | Loss for the period (Thousand HKD) | **(279)** | **(85)** | | Weighted average number of shares (Thousand shares) | **750,000** | **750,000** | [Note 10: Dividends](index=25&type=section&id=10.%20DIVIDENDS) The Board does not recommend the payment of any dividend for the three months ended June 30, 2021, consistent with the policy for the prior year - The Board does not recommend the payment of any dividend for the three months ended **June 30, 2021** (2020: nil)[130](index=130&type=chunk)[131](index=131&type=chunk)

CHARACTERISTICS OF GEM OF THE STOCK EXCHANGE OF HONG KONG LIMITED (THE "STOCK EXCHANGE") 香港聯合交易所有限公司（「聯交所」）GEM 的特色 GEM has been positioned as a market designed to accommodate small and mid-sized companies to which a higher investment risk may be attached than other companies listed on the Main Board. Prospective investors should be aware of the potential risks of investing in such companies and should make the decision to invest only after due and careful consideration. Given that the companies listed on GE ...

GEM has been positioned as a market designed to accommodate small and mid-sized companies to which a higher investment risk may be attached than other companies listed on the Main Board of the Stock Exchange. Prospective investors should be aware of the potential risks of investing in such companies and should make the decision to invest only after due and careful consideration. Given that the companies listed on GEM are generally small and mid-sized companies, there is a risk that securities traded on GEM ...

CHARACTERISTICS OF GEM OF THE STOCK EXCHANGE OF HONG KONG LIMITED (THE "STOCK EXCHANGE") 香港聯合交易所有限公司（「聯交所」）GEM 的特色 GEM has been positioned as a market designed to accommodate small and mid-sized companies to which a higher investment risk may be attached than other companies listed on the Main Board of the Stock Exchange. Prospective investors should be aware of the potential risks of investing in such companies and should make the decision to invest only after due and careful consideration. Given that the ...

chong fai Q1_20-21_Blue_OP.pdf 1 7/8/2020 14:49:18 CHARACTERISTICS OF GEM OF THE STOCK EXCHANGE OF HONG KONG LIMITED (THE "STOCK EXCHANGE") 香港聯合交易所有限公司（「聯交所」）GEM 的特色 GEM has been positioned as a market designed to accommodate small and mid-sized companies to which a higher investment risk may be attached than other companies listed on the Main Board of the Stock Exchange. Prospective investors should be aware of the potential risks of investing in such companies and should make the decision to invest only a ...

chong fai AR19-20_X2_Final_(12.2mm)_OP.pdf 1 22/6/2020 18:04:19 CHARACTERISTICS OF GEM of the stock exchange of hong kong limited (the "stock exchange") 香港聯合交易所有限公司（「聯交所」）GEM 的特色 GEM has been positioned as a market designed to accommodate small and mid-sized companies to which a higher investment risk may be attached than other companies listed on the Main Board. Prospective investors should be aware of the potential risks of investing in such companies and should make the decision to invest only after due ...