Financial Performance - The profit for the three months ended June 30, 2023, was approximately HK$1.0 million, compared to approximately HK$1.5 million for the same period in 2022[20]. - The revenue for the Group for the three months ended June 30, 2023, was approximately HK$48.6 million, representing an increase of approximately 51.0% compared to approximately HK$32.2 million for the same period in 2022[20]. - The Group's revenue increased by approximately HK$16.4 million, or approximately 51.0%, from approximately HK$32.2 million for the three months ended June 30, 2022, to approximately HK$48.6 million for the three months ended June 30, 2023[29]. - The Group's gross profit increased by approximately HK$2.2 million, or approximately 22.4%, from approximately HK$9.7 million to approximately HK$11.9 million[47]. - Gross profit for the same period was HK$11,929,000, up 22.4% from HK$9,746,000 year-on-year[91]. - Earnings for the period decreased to HK$1,042,000 in Q2 2023 from HK$1,501,000 in Q2 2022, representing a decline of approximately 30.6%[120]. Revenue Breakdown - Revenue from gem-set jewellery products increased by approximately HK$3.3 million, or approximately 25.2%, from approximately HK$12.8 million to approximately HK$16.1 million[34]. - Revenue from pure gold products increased by approximately HK$7.3 million, or approximately 44.7%, from approximately HK$16.3 million to approximately HK$23.6 million[35]. - Revenue from trading of recycled gold products increased by approximately HK$5.9 million, or approximately 195.7%, from approximately HK$3.0 million to approximately HK$8.9 million[36]. - Retail channel revenue increased by approximately HK$9.3 million, or approximately 34.4%, from approximately HK$27.2 million to approximately HK$36.5 million[41]. - Wholesale channel revenue increased by approximately HK$1.2 million, or approximately 58.9%, from approximately HK$2.0 million to approximately HK$3.2 million[42]. Corporate Governance - The company has adopted corporate governance practices consistent with the Corporate Governance Code, with a noted deviation from code provision C.2.1[52]. - The group is committed to maintaining high standards of corporate governance to meet the needs of its business and shareholders[52]. - The company did not purchase, sell, or redeem any of its shares during the three months ended June 30, 2023[60]. - No incidents of non-compliance with the Required Standard of Dealings were noted during the three months ended June 30, 2023[56]. - The Audit Committee reviewed the Group's unaudited consolidated results for the three months ended June 30, 2023, ensuring compliance with accounting standards[83]. Shareholder Information - As of June 30, 2023, Mr. Fu Chun Keung and Ms. Fu Wan Ling each held 562,500,000 shares, representing a 75% interest in the company[63]. - As of June 30, 2023, MGH Limited holds 562,500,000 shares, representing 75% of the issued share capital of the Company[69]. - The Directors and chief executives had no interests in shares or debentures of the Company or its associated corporations as of June 30, 2023[67]. - The Company did not identify any substantial shareholders with interests or short positions in shares or underlying shares as of June 30, 2023[71]. Future Plans and Strategies - The Group plans to expand its jewellery design collection to align with customer needs and market trends, as well as increase its retail presence[28]. - The marketing campaign will be extended to social media to enhance shareholder returns and support long-term growth[28]. - The company has no current plans for significant acquisitions or disposals[88]. Other Financial Metrics - Other income decreased by approximately HK$0.9 million, from approximately HK$1.0 million to approximately HK$68,000[48]. - The Group's other income decreased to HK$68,000 from HK$944,000 in the same period of 2022, primarily due to the absence of government grants received last year[110]. - The cost of inventories recognized as an expense was HK$43,842,000, compared to HK$22,428,000 in the same period last year, indicating a substantial rise[119]. - Interest on bank borrowings for the period was HK$266,000, an increase from HK$197,000 in the previous year[116]. - The total depreciation of property, plant, and equipment amounted to HK$2,430,000, up from HK$2,261,000 in the same period last year[119].

Hong Kong Exchanges and Clearing Limited and 香港交易及結算所有限公司及香港聯合交易所 The Stock Exchange of Hong Kong Limited 有限公司（「聯交所」）對本公告的內容概不負責， (“Stock Exchange”) take no responsibility for the 對其準確性或完整性亦不發表任何聲明，並表 contents of this announcement, make no 明概不就本公告全部或任何部分內容而產生或 representation as to its accuracy or completeness 因依賴該等內容而引致的任何損失承擔任何責 and expressly disclaim any liability whatsoever for 任。 any loss howsoever arising from or in reliance upon the whole or any part of the contents of this announcement. This announce ...

Business Operations - The Group operates seven retail stores under the brand "Chong Fai Jewellery" strategically located in Kowloon and the New Territories[17] - The principal products include gem-set jewellery and gold jewellery, produced in-house at a facility in Shenzhen, PRC[18] - The Group plans to expand its jewellery design collection to align with customer preferences and market trends[19] - Future retail expansion is aimed at capturing a wider range of market opportunities as the economic environment improves[19] - Marketing campaigns will be extended to social media to enhance shareholder returns and sustain long-term growth[19] Financial Performance - The Group's revenue increased by approximately HK$29.5 million, or approximately 27.5%, from approximately HK$107.3 million for the year ended 31 March 2022 to approximately HK$136.8 million for the year ended 31 March 2023[26] - Revenue from gold jewellery products increased by approximately HK$17.1 million, or approximately 45.6%, from approximately HK$37.4 million to approximately HK$54.5 million for the year ended 31 March 2023[31] - Revenue from gem-set jewellery products increased by approximately HK$8.8 million, or approximately 17.0%, from approximately HK$51.8 million to approximately HK$60.6 million for the year ended 31 March 2023[27] - Revenue from trading of recycled gold products increased by approximately HK$3.6 million, or approximately 19.8%, from approximately HK$18.1 million to approximately HK$21.7 million for the year ended 31 March 2023[32] - Retail operation revenue increased by approximately HK$25.8 million, or approximately 33.1%, from approximately HK$78.0 million to approximately HK$103.8 million for the year ended 31 March 2023[35] - The Group's cost of goods sold increased by approximately HK$26.5 million, or approximately 33.9%, from approximately HK$78.2 million to approximately HK$104.7 million for the year ended 31 March 2023[36] - The Group's gross profit increased by approximately HK$2.9 million, or approximately 10.1%, from approximately HK$29.2 million to approximately HK$32.1 million for the year ended 31 March 2023[41] - The gross profit margin decreased from approximately 27.2% for the year ended 31 March 2022 to approximately 23.5% for the year ended 31 March 2023[41] - Other income for the year ended 31 March 2023 amounted to approximately HK$2.3 million, representing an increase of approximately HK$1.3 million compared to the previous year[42] - Other net gain for the year ended 31 March 2023 amounted to approximately HK$0.1 million, compared to a loss of approximately HK$1.8 million for the year ended 31 March 2022[43] Cost and Expenses - Selling and distribution costs decreased by approximately HK$1.5 million or about 7.2%, from approximately HK$21.3 million in 2022 to approximately HK$19.8 million in 2023[49] - General and administrative expenses increased by approximately HK$1.2 million or about 7.8%, from approximately HK$14.7 million in 2022 to approximately HK$15.9 million in 2023[50] Assets and Liabilities - The total assets of the group as of March 31, 2023, amounted to approximately HK$128.3 million, a slight decrease from approximately HK$129.2 million in 2022[59] - The current ratio as of March 31, 2023, was approximately 1.63 times, down from approximately 1.99 times in 2022, mainly due to an increase in amounts due to a controlling shareholder[60] - The gearing ratio increased from approximately 38.8% as of March 31, 2022, to approximately 41.0% as of March 31, 2023, primarily due to a decrease in total equity[61] - The company did not recommend the payment of any dividend for the year ended March 31, 2023[57] - As of March 31, 2023, the company's issued share capital was HK$7.5 million, with 750 million shares outstanding[75] - The Group had capital commitments of approximately HK$0.2 million as of March 31, 2023, down from approximately HK$0.3 million in 2022[80] - The Group had no material contingent liabilities as of March 31, 2023[81] Market Influences - The Group's revenue growth was significantly boosted by the Hong Kong government's consumption voucher schemes launched in April and August 2022[96] - The Group faces risks including price fluctuations of jewellery raw materials and potential challenges in renewing retail store leases[93] - The Group currently has no foreign currency hedging policy but monitors exchange rate fluctuations closely[78] Leadership and Management - Mr. Fu Chun Keung has been the chairman and CEO since January 2018, overseeing overall management and strategy planning[100] - Ms. Cheung Lai Yuk, appointed in March 2018, leads the procurement department and has over 20 years of experience in the jewellery industry[102] - Ms. Fu Wan Ling, also appointed in March 2018, is responsible for overall strategy formulation and inventory oversight, with over 20 years in the jewellery sector[105] - Mr. Chan Cheong Tat has served as an independent non-executive director since September 2018, bringing over 32 years of experience from the Inland Revenue Department[113] - Mr. Tony Chan, an independent non-executive director since September 2018, has over 20 years of experience in business advisory, accounting, and auditing[120] - Mr. Wong Wing Keung Meyrick has been an independent non-executive director since September 2018 and is currently practicing as a barrister-at-law in Hong Kong[123] - The company has a strong leadership team with extensive experience in the jewellery industry and financial management[100][102][105][113][120][123] Corporate Governance - The Group's Board of Directors comprises six members, including three executive directors and three independent non-executive directors, ensuring compliance with GEM Listing Rules[143][152] - Mr. Fu Chun Keung serves as both Chairman and Chief Executive Officer, a decision deemed in the best interest of the Group despite deviation from CG Code provision C.2.1[137][140] - The independent non-executive directors represent more than one-third of the Board, fulfilling the requirement of Rule 5.05A of the GEM Listing Rules[152][153] - All directors participated in various training sessions during the year ended March 31, 2023, focusing on updated GEM Listing Rules and their responsibilities[155] - The Company has implemented corporate governance practices in line with the CG Code, with the exception of code provision C.2.1[135][139] - The Group's senior management is responsible for day-to-day operations, executing strategies set by the Board[141][146] - Each executive director has a service contract with an initial term of three years, subject to termination with three months' notice[144][152] - The Company has received written confirmations of independence from all independent non-executive directors, affirming their status[154] - The Board monitors the Group's operational and financial performance, collectively responsible for promoting the Company's success[141][146] - The Company Secretary, Mr. Wong Ho Pang, ensures that Board procedures are followed and provides necessary support to the directors[154] Board Committees - The company has established three Board committees: Audit Committee, Remuneration Committee, and Nomination Committee, each with specific written terms of reference[174] - The Audit Committee is responsible for reviewing and supervising the Group's financial reporting process, risk management, and internal control systems[179] - The Remuneration Committee's primary duty is to establish and review the remuneration policy for Directors and senior management[182] - The Nomination Committee evaluates candidates for directorship based on merit and objective criteria, considering the benefits of diversity[185] - The Company ensures that all committees have sufficient resources to perform their duties and can obtain independent professional advice when necessary[178] Compliance and Training - The Board is responsible for developing and reviewing the Group's corporate governance policies and practices[198] - The Company emphasizes a well-balanced Board with diverse cultural and educational backgrounds, industry experience, and professional expertise[197] - The Company has confirmed compliance with the Required Standard of Dealings by all Directors for the year ended March 31, 2023[199] - External audit fees for the year ended March 31, 2023, were approximately HK$500,000[200]

Hong Kong Exchanges and Clearing Limited and 香港交易及結算所有限公司及香港聯合交 The Stock Exchange of Hong Kong Limited (“Stock 易所有限公司（「聯交所」）對本公告的內容 Exchange”) take no responsibility for the contents of 概不負責，對其準確性或完整性亦不發表 this announcement, make no representation as to its 任何聲明，並表明概不就本公告全部或任 accuracy or completeness and expressly disclaim any 何部分內容而產生或因依賴該等內容而引 liability whatsoever for any loss howsoever arising 致的任何損失承擔任何責任。 from or in reliance upon the whole or any part of the contents of this announcement. This announce ...

Financial Performance - The Group reported a profit of approximately HK$2.2 million for the nine months ended December 31, 2022, compared to a loss of approximately HK$0.7 million in the same period of 2021[18]. - Revenue for the nine months ended December 31, 2022, was approximately HK$106.8 million, representing an increase of approximately 19.9% from approximately HK$89.1 million for the same period in 2021[18]. - The Group's financial results indicate a positive turnaround, moving from a loss to profitability within the reported period[20]. - Total comprehensive income for the nine months ended December 31, 2022, was HK$1,235,000, compared to a total comprehensive expense of HK$792,000 for the same period in 2021[95]. - The profit before taxation for the nine months ended December 31, 2022, was HK$2,170,000, compared to a loss of HK$700,000 in the same period of 2021[128]. Revenue Breakdown - Revenue from Gem-set Jewellery Products increased by approximately HK$4.8 million, or approximately 11.8%, from approximately HK$40.9 million to approximately HK$45.7 million[33]. - Revenue from pure gold products increased by approximately HK$8.4 million, or approximately 20.9%, from approximately HK$40.2 million to approximately HK$48.6 million[34]. - Revenue from trading of recycled gold products increased by approximately HK$4.5 million, or approximately 56.8%, from approximately HK$8.0 million to approximately HK$12.5 million[35]. - Retail channel revenue increased by approximately HK$14.0 million, or approximately 19.4%, from approximately HK$72.0 million to approximately HK$86.0 million[40]. - Wholesale channel revenue decreased by approximately HK$0.8 million, or approximately 8.9%, from approximately HK$9.1 million to approximately HK$8.3 million[41]. Corporate Governance - The report emphasizes the importance of compliance with GEM Listing Rules, ensuring the accuracy and completeness of the financial information provided[5]. - The company has adopted the corporate governance code as per GEM Listing Rules Appendix 15, with compliance noted since its listing on March 27, 2019, except for a deviation regarding the roles of the Chairman and CEO[52]. - The company has a strong governance structure with experienced management overseeing the Chairman and CEO's powers[52]. - The company has maintained a consistent approach to corporate governance, aligning with shareholder interests and regulatory requirements[52]. - The company’s governance practices are designed to protect shareholder interests and ensure effective management oversight[52]. Shareholder Information - As of December 31, 2022, Mr. Fu Chun Keung and Ms. Fu Wan Ling each hold 562,500,000 shares, representing a 75% interest in the company's issued share capital[61]. - No substantial shareholders were reported with interests or short positions in the shares and underlying shares of the company as of December 31, 2022[66]. - The entire issued share capital of MGH Limited is beneficially owned by Mr. Fu, Ms. Fu, and Ms. Cheung, who are deemed to be interested in the shares held by MGH Limited[68]. - The company has ensured that all directors confirmed compliance with the trading standards during the reporting period[57]. Operational Highlights - The Group plans to expand its jewellery design collection and retail presence to capture market opportunities as the COVID-19 situation improves[27]. - The Group is extending its marketing campaign to social media to enhance shareholder returns and sustain long-term growth[27]. - The Group continues to monitor market conditions and may adjust strategies accordingly to sustain growth momentum[18]. - The Board regularly reviews the risk management and internal control systems to ensure their effectiveness[84]. Other Financial Metrics - The cost of goods sold for the nine months ended December 31, 2022, was HK$76,036,000, up from HK$61,883,000 in the previous year, indicating a 22.9% increase[94]. - The retained profits as of December 31, 2022, were HK$13,750,000, an increase from HK$11,580,000 as of March 31, 2022[95]. - The total staff costs for the nine months ended December 31, 2022, amounted to HK$14,746,000, which is a 4% increase compared to HK$14,194,000 for the same period in 2021[123]. - The company incurred finance costs of HK$251,000 for the three months ended December 31, 2022, a decrease of 5.3% from HK$265,000 in the previous year[94]. - The company reported a loss of HK$516,000 for the three months ended December 31, 2022, compared to a profit of HK$236,000 in the same period of 2021[128].

[Corporate Information](index=4&type=section&id=Corporate%20Information) This section outlines the company's fundamental organizational structure, including key personnel and professional advisors - This section provides basic organizational structure information, including executive directors, independent non-executive directors, committee members, company secretary, auditor, legal advisors, and principal bankers[12](index=12&type=chunk)[13](index=13&type=chunk)[15](index=15&type=chunk) - The company's Chairman and Chief Executive Officer is Mr. Fu Chun Keung[12](index=12&type=chunk) - The company's auditor is Grant Thornton Hong Kong Limited[15](index=15&type=chunk) [Financial Highlights](index=7&type=section&id=Financial%20Highlights) This section provides a concise overview of the Group's key financial performance for the six months ended September 30, 2022 Financial Highlights for the Six Months Ended September 30, 2022 | Indicator | For the Six Months Ended September 30, 2022 | For the Six Months Ended September 30, 2021 | | :--- | :--- | :--- | | Revenue (HKD Million) | Approx. 71.9 | Approx. 55.1 | | Profit/(Loss) for the Period (HKD Million) | Profit Approx. 2.7 | Loss Approx. 0.9 | | Proposed Dividend | Not Distributed | Nil | - The Group achieved a turnaround from loss to profit, primarily driven by a significant **30.3% year-on-year increase in revenue**[20](index=20&type=chunk)[22](index=22&type=chunk) [Management Discussion and Analysis](index=8&type=section&id=Management%20Discussion%20and%20Analysis) This section offers an in-depth analysis of the Group's operational performance, financial health, liquidity, and strategic outlook [Outlook](index=8&type=section&id=Outlook) The Group maintains an optimistic outlook, planning to expand its jewelry design, retail network, and social media marketing for sustained growth - The Hong Kong government's consumption vouchers, launched in April and August 2022, significantly contributed to local consumption and revenue growth during the period[26](index=26&type=chunk) - Future strategic priorities include expanding the jewelry design series, enlarging retail outlets, and extending marketing activities to social media[27](index=27&type=chunk) [Business and Financial Review](index=9&type=section&id=Business%20and%20Financial%20Review) Total revenue grew by **30.3% to HKD 71.9 million**, driven by pure gold and recycled gold products, with other income boosted by government subsidies Revenue Breakdown by Product Category (HKD Million) | Product Category | 2022 H1 | 2021 H1 | Year-on-year Growth | | :--- | :--- | :--- | :--- | | Gem-set Jewelry Products | 29.0 | 25.8 | +12.4% | | Pure Gold Products | 34.4 | 25.6 | +34.2% | | Recycled Gold Product Trading | 8.5 | 3.8 | +126.6% | | **Total** | **71.9** | **55.1** | **+30.3%** | Revenue Breakdown by Sales Channel (HKD Million) | Sales Channel | 2022 H1 | 2021 H1 | Year-on-year Growth/Decrease | | :--- | :--- | :--- | :--- | | Retail | 58.4 | 45.6 | +28.0% | | Wholesale | 4.9 | 5.7 | -14.3% | | Recycled Gold Product Trading | 8.5 | 3.8 | +126.6% | - Other income increased by **HKD 1.1 million** year-on-year, primarily due to approximately **HKD 1.1 million** in government subsidies from the "Employment Support Scheme" received during the period[44](index=44&type=chunk) [Liquidity, Financial Resources, and Capital Structure](index=11&type=section&id=Liquidity%2C%20Financial%20Resources%2C%20and%20Capital%20Structure) The Group maintains a sound financial position with a **35.0% gearing ratio** and **1.8x current ratio**, reflecting prudent treasury management Key Financial Position Indicators | Indicator | September 30, 2022 | March 31, 2022 | | :--- | :--- | :--- | | Total Assets (HKD Million) | 135.1 | 129.2 | | Total Liabilities (HKD Million) | 60.2 | 56.2 | | Total Interest-bearing Borrowings (HKD Million) | 26.2 | 28.3 | | Current Ratio (Times) | Approx. 1.8 | Approx. 2.0 | | Gearing Ratio (%) | Approx. 35.0% | Approx. 38.8% | - As of the end of the reporting period, the Group had no pledged assets, significant capital commitments, or contingent liabilities[69](index=69&type=chunk)[73](index=73&type=chunk)[74](index=74&type=chunk) - The capital structure has remained unchanged since its listing on March 27, 2019, with an issued share capital of **HKD 7.5 million** corresponding to **750 million ordinary shares**[63](index=63&type=chunk) [Significant Investments, Material Acquisitions and Disposals](index=14&type=section&id=Significant%20Investments%2C%20Material%20Acquisitions%20and%20Disposals) The Group acquired a **20% equity interest in Dia Myth Jewellery Limited** for **HKD 8.9 million** to control future rental costs - On September 6, 2022, the company agreed to acquire a **20% equity interest** in Dia Myth Jewellery (Dia Myth) for **HKD 8.9 million** in cash[83](index=83&type=chunk) - This transaction constitutes a discloseable connected transaction with the company's Chairman, Mr. Fu Chun Keung, as the counterparty; upon completion, the company will hold a **20% stake** in Dia Myth Jewellery[83](index=83&type=chunk)[84](index=84&type=chunk) - The Board believes this transaction helps control the Group's rental costs for properties leased from Dia Myth Jewellery and can partially offset rental expenses by sharing its profits[84](index=84&type=chunk) [Other Information](index=15&type=section&id=Other%20Information) This section details corporate governance, directors' interests, share schemes, and the audit committee's functions [Corporate Governance Practice](index=15&type=section&id=Corporate%20Governance%20Practice) The company generally adheres to corporate governance standards, with a noted deviation where the Chairman and CEO roles are combined - The company deviated from Code Provision C.2.1 of the Corporate Governance Code, where the roles of Chairman and Chief Executive Officer are combined and held by the same individual, Mr. Fu Chun Keung[89](index=89&type=chunk)[90](index=90&type=chunk) - The Board believes this arrangement is beneficial for the Group's management, given Mr. Fu's extensive experience in the jewelry industry and his critical role in the Group's development[90](index=90&type=chunk) [Directors' and Chief Executive's Interests](index=16&type=section&id=Directors%27%20and%20Chief%20Executive%27s%20Interests) This section details directors' and major shareholders' interests, with Mr. Fu Chun Keung and related parties holding **75% of issued shares** Directors' Long Positions in the Company's Shares | Name of Director | 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% | [Share Schemes](index=20&type=section&id=Share%20Schemes) The company has share award and share option schemes, with **10.3 million unawarded shares** held by the trustee, but no awards or options were granted - As of September 30, 2022, the trustee of the Share Award Scheme held **10,300,000 purchased but unawarded shares** of the company[111](index=111&type=chunk) - As of the end of the reporting period, neither the Share Award Scheme nor the Share Option Scheme had granted any awards or options[111](index=111&type=chunk)[113](index=113&type=chunk) [Audit Committee](index=21&type=section&id=Audit%20Committee) The Audit Committee, chaired by Mr. Chan Tsz Ming, reviewed the unaudited interim results, confirming compliance with accounting standards - The Audit Committee has reviewed the Group's unaudited consolidated interim results for the six months ended September 30, 2022[120](index=120&type=chunk) [Unaudited Interim Financial Information](index=23&type=section&id=Unaudited%20Interim%20Financial%20Information) This section presents the Group's condensed interim financial statements for the six months ended September 30, 2022, with detailed notes [Condensed Consolidated Statement of Profit or Loss and Other Comprehensive Income](index=23&type=section&id=Condensed%20Consolidated%20Statement%20of%20Profit%20or%20Loss%20and%20Other%20Comprehensive%20Income) The Group achieved a **profit of HKD 2.686 million**, a turnaround from loss, driven by **30.3% revenue growth** and increased gross profit Key Items from Statement of Profit or Loss (HKD Thousand) | Item | 2022 H1 | 2021 H1 | | :--- | :--- | :--- | | Revenue | 71,862 | 55,134 | | Gross Profit | 21,401 | 16,907 | | Profit/(Loss) Before Tax | 3,232 | (1,401) | | Profit/(Loss) for the Period | 2,686 | (936) | | Basic Earnings/(Loss) Per Share (HK Cents) | 0.36 | (0.12) | [Condensed Consolidated Statement of Financial Position](index=24&type=section&id=Condensed%20Consolidated%20Statement%20of%20Financial%20Position) Total assets increased to **HKD 135.1 million**, with net assets reaching **HKD 74.862 million**, while net current assets decreased Key Items from Statement of Financial Position (HKD Thousand) | Item | September 30, 2022 | March 31, 2022 | | :--- | :--- | :--- | | Non-current Assets | 42,338 | 36,377 | | Current Assets | 92,807 | 92,791 | | **Total Assets** | **135,145** | **129,168** | | Current Liabilities | 52,616 | 46,592 | | Non-current Liabilities | 7,667 | 9,626 | | **Total Liabilities** | **60,283** | **56,218** | | **Net Assets** | **74,862** | **72,950** | [Condensed Consolidated Statement of Changes in Equity](index=26&type=section&id=Condensed%20Consolidated%20Statement%20of%20Changes%20in%20Equity) Total equity increased to **HKD 74.862 million**, primarily due to the **HKD 2.686 million profit**, partially offset by other factors - Total equity increased by **HKD 1.912 million** from **HKD 72.95 million** as of March 31, 2022, to **HKD 74.862 million** as of September 30, 2022[138](index=138&type=chunk) [Condensed Consolidated Statement of Cash Flows](index=27&type=section&id=Condensed%20Consolidated%20Statement%20of%20Cash%20Flows) Cash and cash equivalents decreased by **HKD 1.751 million**, with positive operating and investing cash flows offset by significant financing outflows Cash Flow Statement Summary (HKD Thousand) | Item | 2022 H1 | 2021 H1 | | :--- | :--- | :--- | | Net Cash from Operating Activities | 506 | 907 | | Net Cash from Investing Activities | 5,416 | 181 | | Net Cash Used in Financing Activities | (7,673) | (3,739) | | **Net Decrease in Cash and Cash Equivalents** | **(1,751)** | **(2,651)** | | Cash and Cash Equivalents at End of Period | 18,785 | 29,365 | [Notes to the Condensed Consolidated Financial Statements](index=29&type=section&id=Notes%20to%20the%20Condensed%20Consolidated%20Financial%20Statements) The notes provide supplementary financial details, including revenue segmentation, **HKD 1.13 million** in government grants, and the **HKD 8.9 million** acquisition of Dia Myth Jewellery - Revenue by business segment shows jewelry retail contributing **HKD 58.41 million** as the primary source, with recycled gold product trading growing fastest at **126.6% year-on-year**[157](index=157&type=chunk)[158](index=158&type=chunk) - Other income includes **HKD 1.13 million** in government grants from the Hong Kong "Anti-epidemic Fund" under the "Employment Support Scheme"[160](index=160&type=chunk)[162](index=162&type=chunk) - During the period, the Group acquired a **20% equity interest** in Dia Myth Jewellery Limited from the ultimate controlling party, Mr. Fu, for a cash consideration of **HKD 8.9 million**, making it an associate of the Group[173](index=173&type=chunk)

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 |