人和科技(08140) - 2022 Q1 - 季度财报

Company Information This section provides essential details about the company's governance structure and administrative contacts. Board of Directors and Committees This section details the composition of the company's board of directors, including executive, non-executive, and independent non-executive directors, as well as members and chairpersons of the Audit, Remuneration, and Nomination Committees. - The Board comprises Executive Directors Mr. Lam Shu Yu, Mr. Paulino Lim, Mr. Yeung Tim Lee, Non-executive Director Mr. Lo Chung Ching, and Independent Non-executive Directors Mr. Kwan Yin Tak (Chairman), Ms. Chu Wai Ning, Mr. Ng Ming Hon[14][15][16] - The Audit Committee Chairman is Mr. Kwan Yin Tak, Remuneration Committee Chairman is Mr. Ng Ming Hon, and Nomination Committee Chairman is Mr. Lo Chung Ching[11][12][13] Company Basic Information This section provides the company's administrative and contact details, including company secretary, authorized representatives, compliance officer, registered office, headquarters, independent auditor, principal bankers, and share registrar. - Company Secretary is Ms. Cheng Kei Sze, Authorized Representatives are Mr. Paulino Lim and Ms. Cheng Kei Sze, Compliance Officer is Mr. Paulino Lim[16] - Company stock code is 8140, and the company website is www.hklistco.com/8140[17](index=17&type=chunk) Management Discussion and Analysis This section provides an in-depth review of the Group's operational performance, market conditions, and financial position, along with future outlook and strategic plans. Market Review This section reviews the global and Hong Kong economic environment, noting the significant recovery in Hong Kong's economy in Q2 2021 after the severe impact of COVID-19, but still facing uncertainties from virus variants, US-China relations, and geopolitical tensions. Additionally, the appreciation of the New Taiwan Dollar and rising steel prices led to increased material costs. - Hong Kong's economy was severely hit by the COVID-19 pandemic in H1 2020, shrinking by 9.0% year-on-year, but with vaccinations and anti-epidemic measures, Q2 2021 saw 7.1% economic growth, with the full-year forecast revised up to 5.5% to 6.5%[19] - Economic recovery faces uncertainties from COVID-19 variants, US-China relations, and geopolitical tensions[19] - NTD appreciation (approx. 5.7% in 2020, approx. 1.4% in the first nine months of 2021) and rising steel prices (approx. 120% increase from June 30, 2020, to September 30, 2021) will increase connector procurement costs[19][20] Business Review The Group's primary business is providing mechanical rebar splicing services to the reinforced concrete construction industry in Hong Kong, serving main and sub-contractors in both public and private sectors. The Group will continue to prudently monitor business opportunities and strengthen market competitiveness to enhance profitability. - The Group primarily provides mechanical rebar splicing services to the reinforced concrete construction industry in Hong Kong[23] - Customers are mainly main and sub-contractors for various reinforced concrete construction projects in Hong Kong, categorized into public and private sectors[23] Prospects Hong Kong's overall construction business is expected to remain stable in the short to medium term, with potential government stimulus. However, COVID-19, US-China relations, and geopolitical tensions continue to pose uncertainties. NTD appreciation and rising steel prices will increase material costs, potentially harming gross profit margins, so the Group will carefully monitor selling and procurement prices to maintain reasonable margins. - Hong Kong's overall construction business is expected to remain stable in the short to medium term, with potential government stimulus[24] - COVID-19 pandemic, US-China relations, and geopolitical tensions continue to pose uncertainties[24] - NTD appreciation and rising steel prices will increase material costs, potentially harming gross profit margins; the Group will prudently monitor selling and procurement prices[24] Financial Summary and Overview This section provides an overview of the Group's financial performance for the three months ended September 30, 2021, showing significant growth in revenue, gross profit, net profit, and earnings per share. Financial Summary for the Three Months Ended September 30, 2021 | Metric | 2021 (HK$ thousand) | 2020 (HK$ thousand) | Change (%) | | :--- | :--- | :--- | :--- | | Revenue | 27,198 | 21,641 | 25.7 | | Gross Profit | 10,963 | 7,955 | 37.8 | | Net Profit and Total Comprehensive Income | 5,933 | 4,738 | 25.2 | | Earnings Per Share (HK cents) | 0.74 | 0.59 | 25.4 | Financial Review This section details the Group's financial performance, including revenue, cost of sales, gross profit, other income, administrative expenses, and profit for the period, explaining the main reasons for each change. Revenue For the three months ended September 30, 2021, the Group's revenue increased by 25.7% year-on-year to approximately HK$27.2 million, primarily due to increased connector sales and new infrastructure projects. - For the three months ended September 30, 2021, revenue increased by 25.7% from approximately HK$21.6 million in the same period of 2020 to approximately HK$27.2 million[30] - Revenue growth was primarily driven by increased connector sales volume and a higher number of new infrastructure projects for rebar splicing structures[30] Cost of Sales Cost of sales, primarily including connector supplies, direct labor, direct expenses, consumables, and workshop rental, increased by 18.6% year-on-year to approximately HK$16.2 million for the period, consistent with revenue growth. - Cost of sales increased by 18.6% from approximately HK$13.7 million in the same period of 2020 to approximately HK$16.2 million for the current period[31] - Cost of sales primarily includes connector supplies, direct labor costs, direct expenses (e.g., electricity, depreciation), consumables, and workshop rental costs[31] Gross Profit Gross profit for the period increased by 37.8% year-on-year to approximately HK$11.0 million, mainly driven by revenue growth. - Gross profit increased by 37.8% from approximately HK$8.0 million in the same period of 2020 to approximately HK$11.0 million for the current period[32] Other Income Other income decreased by 31.9% year-on-year to approximately HK$1.3 million, mainly due to the cessation of subsidies from the HKSAR Government's Employment Support Scheme, despite an increase in handling fees. - Other income decreased by 31.9% from approximately HK$1.9 million in the same period of 2020 to approximately HK$1.3 million for the current period[34] - The decrease was primarily due to the cessation of subsidies from the HKSAR Government's Employment Support Scheme (2020: HK$1.1 million) in the current period, despite an increase in handling fees[34] Administrative Expenses Administrative expenses increased by 9.8% year-on-year to approximately HK$4.6 million, mainly due to increased directors' emoluments. - Administrative expenses increased by 9.8% from approximately HK$4.2 million in the same period of 2020 to approximately HK$4.6 million for the current period[35] - The increase was primarily due to increased directors' emoluments[35] Profit for the Period The Group recorded a profit of approximately HK$5.9 million for the period, representing a 25.2% increase compared to the same period last year. - Profit for the period was approximately HK$5.9 million, an increase of 25.2% compared to the same period last year[36] Liquidity and Financial Resources The Group maintains prudent financial management; as of September 30, 2021, bank balances increased to approximately HK$87.8 million, the current ratio was 4.2 times, and the gearing ratio was zero, indicating a robust financial position. - As of September 30, 2021, bank balances were approximately HK$87.8 million (June 30, 2021: approximately HK$72.5 million)[37] - The current ratio (current assets divided by current liabilities) was 4.2 times (June 30, 2021: 4.1 times)[37] - The gearing ratio (total borrowings divided by total equity) was zero[37] Foreign Exchange Risk The Group procures connectors from Taiwan denominated in New Taiwan Dollars, exposing it to exchange rate fluctuations against the Hong Kong Dollar. Management believes existing foreign currency balances are sufficient to cover liabilities and will continue to monitor risks, considering hedging if necessary, but currently holds no speculative derivative financial instruments. - The Group purchases connectors from Taiwan, denominated in New Taiwan Dollars, and fluctuations in the NTD against the HKD may result in exchange losses or gains[42] - Management believes that existing foreign currency balances are sufficient to meet foreign currency liabilities when due and will continue to monitor foreign exchange risk, considering hedging if necessary[42] - As of September 30, 2021, the Group held no derivative financial instruments for speculative purposes[42] Contingent Liabilities As of September 30, 2021, the Group was involved in a patent infringement lawsuit, but the Board, based on legal advice, deemed no provision for contingent liabilities necessary. - The Group is involved in litigation concerning defamation and malicious falsehood claims against its subsidiary, alleging infringement of BOSA R&D's patent by the plaintiff's connector system[43] - The Board believes that as of September 30, 2021, no provision for contingent liabilities is required[43] Dividends The Board does not recommend the payment of a dividend for the current period. - The Board does not recommend the payment of a dividend for the current period (for the three months ended September 30, 2020: nil)[44] Pledged Assets As of September 30, 2021, the Group's secured and unsecured obligations under finance leases were approximately HK$602,000, collateralized by the Group's motor vehicles. No other assets were pledged. - As of September 30, 2021, the Group's secured and unsecured obligations under finance leases were approximately HK$602,000 (June 30, 2021: approximately HK$646,000)[45] - These obligations are collateralized by the Group's motor vehicles[45] - Other than this, the Group had no pledged assets as of September 30, 2021[47] Capital Structure The Company was incorporated in the Cayman Islands in 2016 and listed on GEM in 2018. Its capital comprises ordinary shares and capital reserves, with working capital primarily provided by cash and cash flows from operating activities. - The Company was incorporated in the Cayman Islands on October 24, 2016, and listed on GEM of the Stock Exchange on July 12, 2018[48] - Capital comprises ordinary shares and capital reserves, with funding from cash and cash equivalents and cash flows from operating activities[48] Future Material Investments and Capital Asset Plans As of September 30, 2021, the Group had no other material investment and capital asset plans, except for the planned acquisition of a piece of land in Hong Kong to establish a new workshop. - As of September 30, 2021, the Group had no other material investment and capital asset plans[49] - The only exception is the acquisition of a piece of land in Hong Kong to establish a new workshop[49] Material Investments Held, Acquisitions and Disposals During the period, the Group held no material investments and made no acquisitions or disposals of subsidiaries, associates, joint ventures, or affiliated companies. As of September 30, 2021, there were no such plans. - The Group held no material investments, acquisitions, or disposals of subsidiaries, associates, joint ventures, or affiliated companies during the period[50] - As of September 30, 2021, the Group had no other plans regarding material investments, acquisitions, or disposals[50] Use of Proceeds from Listing The Company's GEM listing in July 2018 raised approximately HK$37.8 million net. Proceeds were applied as stated in the prospectus, with no significant changes expected. The unutilized net proceeds are held as interest-bearing short-term demand deposits and are expected to be fully utilized by December 31, 2022. - The Company's net proceeds from listing were approximately HK$37.8 million[51] - All unutilized net proceeds are deposited as interest-bearing short-term demand deposits with licensed banks in Hong Kong[55] - Barring any unforeseen circumstances, the remaining proceeds are expected to be utilized by December 31, 2022[55] Comparison of Business Objectives and Actual Business Progress This section compares the proposed use of net proceeds disclosed in the prospectus with actual progress as of September 30, 2021. A total of HK$36.9 million was planned for use, with HK$1.2 million utilized, showing a discrepancy with the overall HK$1.4 million mentioned in the report. Use of Proceeds from Listing and Progress (As of September 30, 2021) | Business Objective | Designated Amount in Prospectus (HK$ million) | Amount Utilized as of Sep 30, 2021 (HK$ million) | Latest Development | Expected Timeline | | :--- | :--- | :--- | :--- | :--- | | Expand management scale (acquire land for new workshop) | 35.3 | 0 | Due to social unrest and COVID-19 pandemic, identifying suitable land plots has been delayed; other geographical locations are being considered | Proposed acquisition expected to be completed by December 31, 2022 | | Invest resources in R&D (hire technical staff) | 0.4 | 0 | Identifying suitable talent to join the R&D team | Completion date expected December 31, 2022 | | Invest resources in R&D (research and development activities) | 0.4 | 0.4 | Research and development activities have been conducted | | | Invest resources in R&D (explore automated performance methods) | 0.2 | 0.2 | Automated performance methods have been explored | | | Invest resources in R&D (develop other connector models) | 0.4 | 0.4 | Other connector models have been developed | | | Invest resources in R&D (formulate production manual and update quality audit guidelines) | 0.1 | 0.1 | Production manual formulated and quality audit guidelines updated | | | General working capital | 0.1 | 0.1 | Used for general working capital | | - As of the report date, the remaining approximately HK$36.4 million is expected to be utilized as disclosed in the prospectus[104] Acquisition of a Piece of Land to Establish a New Workshop Approximately HK$35.3 million allocated for acquiring land for a new workshop remains unutilized, originally planned for completion in 2018. Delays are due to social unrest, COVID-19, US-China political tensions, and high land prices. The Group is prudently evaluating land plots, and the unutilized funds are expected to be fully utilized by December 31, 2022. - Approximately HK$35.3 million allocated for acquiring land to establish a new workshop remains unutilized[104] - Delays are due to uncertainties from anti-amendment bill protests, the COVID-19 pandemic, US-China political tensions, and high land prices[104] - The unutilized net proceeds are expected to be fully utilized by December 31, 2022[104] Investment in Research and Development Of the HK$2.4 million planned for R&D, approximately HK$1.3 million was utilized as of September 30, 2021. The actual utilization was less than planned, mainly due to delays in establishing a new workshop and the time-consuming evaluation of R&D implementation. The remaining funds are expected to be fully utilized by December 31, 2022. - Of the HK$2.4 million planned for R&D, approximately HK$1.3 million was utilized as of September 30, 2021[105] - Actual utilization was less than planned, mainly due to delays in establishing a new workshop and the time-consuming evaluation of R&D implementation[105] - The unutilized net proceeds for R&D are expected to be fully utilized by December 31, 2022[107] Unaudited Condensed Consolidated Statement of Profit or Loss and Other Comprehensive Income This section presents the unaudited condensed consolidated statement of profit or loss and other comprehensive income for the three months ended September 30, 2021, showcasing the Group's financial performance during the period, including key metrics such as revenue, gross profit, profit for the period, and earnings per share. Unaudited Condensed Consolidated Statement of Profit or Loss and Other Comprehensive Income (For the three months ended September 30, 2021) | Metric | 2021 (HK$ thousand) | 2020 (HK$ thousand) | | :--- | :--- | :--- | | Revenue | 27,198 | 21,641 | | Cost of sales | (16,235) | (13,686) | | Gross Profit | 10,963 | 7,955 | | Other income | 1,277 | 1,876 | | Other losses | (423) | (61) | | Administrative expenses | (4,574) | (4,167) | | Finance costs | (66) | (34) | | Profit before tax | 7,177 | 5,569 | | Tax | (1,230) | (800) | | Profit for the period | 5,947 | 4,769 | | Exchange differences on translation of foreign operations | (14) | (31) | | Total comprehensive income for the period attributable to owners of the Company | 5,933 | 4,738 | | Basic earnings per share (HK cents) | 0.74 | 0.59 | Unaudited Condensed Consolidated Statement of Changes in Equity This section presents the changes in the Group's equity for the three months ended September 30, 2021, and the comparative period, including opening balances, period movements, and closing balances for share capital, share premium, other reserves, exchange reserve, and retained profits. Unaudited Condensed Consolidated Statement of Changes in Equity (As of September 30, 2021) | Metric | Share Capital (HK$ thousand) | Share Premium (HK$ thousand) | Other Reserves (HK$ thousand) | Exchange Reserve (HK$ thousand) | Retained Profits (HK$ thousand) | Total (HK$ thousand) | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | July 1, 2020 (audited) | 41 | 29,936 | 5,647 | (95) | 16,128 | 81,657 | | Total comprehensive income for the period | - | - | - | (31) | 4,769 | 4,738 | | September 30, 2020 (unaudited) | 41 | 29,936 | 5,647 | (126) | 20,897 | 86,395 | | July 1, 2021 (audited) | 41 | 59,936 | 5,647 | (487) | 37,769 | 102,906 | | Total comprehensive income for the period | - | - | - | (14) | 5,947 | 5,933 | | September 30, 2021 (unaudited) | 41 | 59,936 | 5,647 | (501) | 43,716 | 108,839 | Notes to the Unaudited Condensed Consolidated Financial Information This section provides detailed explanatory notes to the unaudited condensed consolidated financial statements, covering company information, accounting policies, and specific financial line items. Company Information The Company was incorporated in the Cayman Islands, and its shares have been listed on GEM since July 12, 2018. The Company and its subsidiaries are primarily engaged in providing mechanical rebar splicing services to the reinforced concrete construction industry in Hong Kong. - The Company was incorporated in the Cayman Islands, and its shares have been listed on GEM of the Stock Exchange since July 12, 2018[122] - The Company and its subsidiaries are primarily engaged in providing mechanical rebar splicing services to the reinforced concrete construction industry in Hong Kong[122] Basis of Preparation and Principal Accounting Policies This section outlines the basis for preparing the unaudited condensed consolidated financial statements, which comply with HKAS 34 and the GEM Listing Rules. It also details the new or revised HKFRSs adopted during the period, particularly HKFRS 16 Leases and its impact on accounting treatment. New or Revised Hong Kong Financial Reporting Standards During the period, the Group adopted new or revised HKFRSs issued by the HKICPA that are currently effective or have come into effect, including HKFRS 16 Leases and HK(IFRIC)—Interpretation 23. - During the period, the Group adopted new or revised HKFRSs issued by the HKICPA that are currently effective or have come into effect[125] - These primarily include HKFRS 16 Leases, HK(IFRIC)—Interpretation 23, and amendments to HKFRS 9[126] HKFRS 16 Leases HKFRS 16 introduces a comprehensive model for lease accounting, eliminating the distinction between operating and finance leases for lessees, requiring recognition of right-of-use assets and corresponding liabilities. This will reclassify lease payments in the cash flow statement from operating to financing activities. - HKFRS 16 introduces a comprehensive model for identifying and accounting for lease arrangements by lessors and lessees, replacing HKAS 17[127] - Except for short-term and low-value asset leases, all lessee leases will be accounted for by recognizing a right-of-use asset and a corresponding liability[127] - Lease payments for lease liabilities will be separated into principal and interest components and presented as financing cash flows[132] Revenue All of the Group's revenue for the period was derived from providing mechanical rebar splicing services in Hong Kong, confirming the Group's single operating and geographical segment. - Revenue refers to amounts received and receivable for services provided during the period, net of fair value of discounts[134] - The Group's operations and revenue are solely derived from providing mechanical rebar splicing services in Hong Kong during the period, thus having a single operating segment[134] Other Income This section provides a breakdown of other income, showing a year-on-year decrease to HK$1,277 thousand in 2021, primarily due to the cessation of Employment Support Scheme subsidies. Other Income Breakdown (For the three months ended September 30, 2021) | Item | 2021 (HK$ thousand) | 2020 (HK$ thousand) | | :--- | :--- | :--- | | Handling fees | 889 | 596 | | Insurance compensation | 31 | - | | Employment Support Scheme | - | 1,097 | | Others | 357 | 183 | | Total | 1,277 | 1,876 | Profit Before Tax This section details the various costs and expenses deducted when calculating profit before tax, including cost of inventories, depreciation, directors' emoluments, staff costs, research expenses, and depreciation of right-of-use assets. Profit Before Tax Components (For the three months ended September 30, 2021) | Item | 2021 (HK$ thousand) | 2020 (HK$ thousand) | | :--- | :--- | :--- | | Cost of inventories recognized as expense | 10,342 | 9,090 | | Depreciation of plant and equipment | 775 | 674 | | Directors' emoluments | 1,845 | 1,387 | | Other staff costs - salaries and other benefits | 3,840 | 3,434 | | Other staff costs - retirement benefit scheme contributions | 175 | 149 | | Total staff costs | 4,970 | 5,860 | | Research expenses | 101 | 92 | | Depreciation of right-of-use assets | 927 | 589 | Tax Hong Kong profits tax is levied under a two-tiered system, with the first HK$2.0 million of assessable profits taxed at 8.25% and the remainder at 16.5%. The Group expects no material unprovided deferred tax assets or liabilities in the foreseeable future. - Hong Kong profits tax is levied at 8.25% on the first HK$2.0 million of assessable profits and 16.5% on the remainder[163] - The Group has no material unprovided deferred tax assets or liabilities[163] Earnings Per Share Basic earnings per share for the period was 0.74 HK cents, calculated based on profit attributable to owners of the Company and the weighted average of 800,000,000 ordinary shares. Diluted earnings per share is the same as basic earnings per share due to no potential dilutive ordinary shares. Basic Earnings Per Share Calculation (For the three months ended September 30, 2021) | Item | 2021 | 2020 | | :--- | :--- | :--- | | Profit attributable to owners of the Company (HK$ thousand) | 5,933 | 4,738 | | Weighted average number of ordinary shares (thousand shares) | 800,000 | 800,000 | - Diluted earnings per share is the same as basic earnings per share because there were no potentially dilutive ordinary shares outstanding for the three months ended September 30, 2021 and 2020[169] Interim Dividends The Board does not recommend the payment of an interim dividend for the current period. - The Board does not recommend the payment of a dividend for the current period (for the three months ended September 30, 2020: nil)[170] Other Information This section covers additional disclosures including share option schemes, directors' interests, substantial shareholders, and corporate governance practices. Share Option Scheme The Company adopted a share option scheme in June 2018, effective in July. As of September 30, 2021, no share options were outstanding, granted, cancelled, exercised, or lapsed. - The Company conditionally adopted a share option scheme on June 19, 2018, which became unconditional on July 12, 2018[172] - As of September 30, 2021, no share options were outstanding, granted, cancelled, exercised, or lapsed[172] Directors' Rights to Acquire Shares or Debentures Except for the share option scheme, no arrangements were entered into by the Company or any associated corporation during the period that would enable directors to acquire benefits through acquiring shares or debentures of the Company or any other body corporate, and no director or their spouse or children under 18 had any right to subscribe for shares or debentures of the Company. - Save for the share option scheme, no arrangements were entered into by the Company or any associated corporation during the period that would enable directors to acquire benefits through acquiring shares or debentures of the Company or any other body corporate[173] - No director or their spouse or children under 18 had any right to subscribe for shares or debentures of the Company[173] Directors' and Chief Executive's Interests and Short Positions in Shares, Underlying Shares and Debentures This section discloses the long positions held by the Company's directors and chief executive in the shares, underlying shares, and debentures of the Company and its associated corporations as of September 30, 2021, in accordance with the SFO and GEM Listing Rules. Directors' and Chief Executive's Long Positions in Ordinary Shares and Underlying Shares of the Company (As of September 30, 2021) | Director's Name | Capacity | Number of Shares Held | Percentage of Company's Issued Voting Shares | | :--- | :--- | :--- | :--- | | Mr. Kwan Yin Tak | Interest of controlled corporation | 286,723,415 | 35.8% | | Mr. Lam Shu Yu | Beneficial owner | 76,580,732 | 9.6% | | Mr. Yeung Tim Lee | Beneficial owner | 64,390,244 | 8.0% | | Mr. Paulino Lim | Beneficial owner | 40,975,610 | 5.1% | - Mr. Kwan Yin Tak holds 100% equity in Kin Sun Creative Limited, which holds 10,000 shares, representing 100% of its issued voting shares[178] Substantial Shareholders' Interests and/or Short Positions in Shares and Underlying Shares of the Company This section lists the long positions held by substantial shareholders (other than directors or chief executive) in the Company's shares or underlying shares as of September 30, 2021, including beneficial ownership and spouse interests, in accordance with the SFO. Substantial Shareholders' Long Positions in Ordinary Shares and Underlying Shares of the Company (As of September 30, 2021) | Shareholder's Name/Entity | Capacity | Number of Shares Held | Percentage of Company's Issued Voting Shares | | :--- | :--- | :--- | :--- | | Kin Sun Creative Limited | Beneficial owner | 286,723,415 | 35.8% | | Mr. Wong Man Po | Beneficial owner | 51,230,244 | 6.4% | | Ms. Chiu Yin Mei | Beneficial owner | 40,975,610 | 5.1% | | Ms. Ha Jasmine Nim Chi | Spouse interest | 286,723,415 | 35.8% | | Ms. Chan Ching | Spouse interest | 76,580,732 | 9.6% | | Ms. Lau Lee Kit | Spouse interest | 64,390,244 | 8.0% | | Ms. Wong Yuk Yu | Spouse interest | 51,230,244 | 6.4% | | Ms. Ng Pei Ying | Spouse interest | 40,975,610 | 5.1% | - Mr. Kwan Yin Tak beneficially owns 100% of the issued shares of Kin Sun Creative Limited and is therefore deemed to have an interest in the shares held by it[183] - Ms. Ha Jasmine Nim Chi, spouse of Mr. Kwan Yin Tak, is deemed to have an interest in the shares held by him[185] Dividends The Board does not recommend the payment of a dividend for the current period. - The Board does not recommend the payment of a dividend for the current period (for the three months ended September 30, 2020: nil)[190] Purchase, Sale or Redemption of the Company's Listed Securities During the period, neither the Company nor any of its subsidiaries purchased, sold, or redeemed any of the Company's listed securities. - During the period, neither the Company nor any of its subsidiaries purchased, sold, or redeemed any of the Company's listed securities[192] Directors' Material Interests in Transactions, Arrangements and Contracts Significant to the Company's Business Except for disclosed directors' service contracts/letters of appointment, no other transactions, arrangements, or contracts significant to the Group's business, in which a director or an entity connected with a director had a material direct or indirect interest, subsisted at the end of or during the period. - Save for those disclosed and service contracts/letters of appointment with directors, no other transactions, arrangements, or contracts significant to the Group's business, in which a director or an entity connected with a director had a material direct or indirect interest, subsisted at the end of or during the period[193] Non-Competition Undertaking Kin Sun Creative Limited, Mr. Kwan Yin Tak, and Mr. Yeung Tim Lee have provided irrevocable and unconditional non-competition undertakings to the Company, promising not to engage in any business competing with the Group. They confirmed compliance for the year ended June 30, 2021, and will provide confirmation for 2021/22. - Kin Sun Creative Limited and Mr. Kwan Yin Tak each jointly and severally, irrevocably and unconditionally, provided a non-competition undertaking to the Company[194] - Mr. Yeung Tim Lee also irrevocably and unconditionally provided a non-competition undertaking to the Company[199] - For the year ended June 30, 2021, Kin Sun Creative Limited, Mr. Kwan Yin Tak, and Mr. Yeung Tim Lee each confirmed compliance with the terms of the non-competition undertaking[199] Conflicts of Interest During the period, none of the Company's directors, substantial shareholders, or management shareholders, or their respective associates, engaged in any business directly or indirectly competing or potentially competing with the Group's business, or had any other conflicts of interest with the Group. - During the period, none of the Company's directors, substantial shareholders, or management shareholders, or their respective associates, engaged in any business directly or indirectly competing or potentially competing with the Group's business, or had any other conflicts of interest with the Group[202] Audit Committee The Audit Committee was established in June 2018, comprising three independent non-executive directors, with Mr. Ng Ming Hon as Chairman. The Committee has reviewed the unaudited condensed consolidated financial results for the period and confirmed their compliance with applicable accounting standards and adequate disclosure. - The Audit Committee was established on June 19, 2018, comprising three independent non-executive directors, with Mr. Ng Ming Hon as Chairman[203] - The Audit Committee has reviewed the Group's unaudited condensed consolidated financial results for the period and believes that these statements were prepared in compliance with applicable accounting standards and provided adequate disclosure[203] Corporate Governance Code The Company's Board and management are committed to maintaining high standards of corporate governance and transparency. During the period, the Company complied with all provisions of the Corporate Governance Code and Corporate Governance Report set out in Appendix 15 of the GEM Listing Rules. - The Company's Board and management are committed to maintaining high standards of corporate governance and transparency for the benefit of all stakeholders[204] - During the period, the Company complied with all provisions of the Corporate Governance Code and Corporate Governance Report set out in Appendix 15 of the GEM Listing Rules[204] Code of Conduct for Securities Transactions by Directors The Company has adopted a code of conduct for securities transactions by directors and employees, no less stringent than required by the GEM Listing Rules. All directors confirmed compliance with this code for the three months ended September 30, 2021. - The Company has adopted a code of conduct for securities transactions by directors, its employees, and directors and employees of its subsidiaries and holding companies, with terms no less stringent than the required standards set out in Rules 5.48 to 5.67 of the GEM Listing Rules[209] - All directors confirmed that they complied with this code of conduct for the three months ended September 30, 2021[209] Publication of First Quarterly Report The Company's 2021/22 First Quarterly Report will be dispatched to shareholders and published on the Company's website and the Stock Exchange's "HKEXnews" website. - The Company's 2021/22 First Quarterly Report will be dispatched to the Company's shareholders and published on the Company's website www.hklistco.com/8140 and the Stock Exchange's "HKEXnews" website www.hkexnews.hk[210](index=210&type=chunk)