J-Long(US:JL)2025-07-28 16:54Corporate Governance - The Company has amended its audit committee charter to include the responsibility of implementing the Cybersecurity Policy, effective July 26, 2024[503]. - The audit committee is tasked with reviewing the adequacy of the Company's internal controls and discussing any significant deficiencies with management[502]. - The Company has established procedures for handling complaints regarding accounting and auditing matters, ensuring confidential and anonymous submissions[502]. - The compensation committee is responsible for reviewing and approving the compensation structure for directors and executive officers, ensuring independence from management[505]. - The Company has adopted a written code of business conduct and ethics applicable to all directors and officers, promoting ethical behavior[516]. - The Company is classified as a "foreign private issuer," allowing it to comply with home country governance requirements instead of Nasdaq standards[511]. Compensation and Incentives - The Compensation Committee has adopted a Compensation Recovery Policy, effective July 26, 2024, requiring recovery of excess incentive-based compensation in the event of a financial restatement[524]. - The summary compensation for Mr. Danny Tze Ching Wong, Chairman, includes HK$6,500,000 salary and HK$4,000,000 bonus for the fiscal year 2025[519]. - The summary compensation for Mr. Edwin Chun Yin Wong, CEO, includes HK$5,200,000 salary and HK$2,000,000 bonus for the fiscal year 2025[519]. - The company authorized a 2024 Equity Incentive Plan reserving 628,000 Ordinary Shares for various equity awards to attract and retain key personnel[526]. - The company’s directors and senior management receive compensation based on their qualifications, positions, and seniority, with a focus on aligning incentives with Company goals[517]. Employee and Operational Metrics - The total number of full-time employees increased from 62 as of March 31, 2024, to 167 as of March 31, 2025, with significant growth in sales and marketing and production roles[528]. - The total contributions to the Mandatory Provident Fund (MPF) for the fiscal years ended March 31, 2025, and 2024 were approximately HK$662,482 and HK$771,429, respectively[536]. - The total contributions to the Vietnam Social Security (VSS) for the fiscal year ended March 31, 2025, amounted to approximately VND 550,590,760 (approximately US$21,792)[539]. - The company has not experienced any significant labor disputes or disruptions in operations during the fiscal years ended March 31, 2025, and 2024[531]. Financial Performance and Transactions - A special cash dividend of $6,000,000 was declared on February 29, 2024, with approximately $0.19 per share distributed to shareholders[545]. - Related party transactions included purchases of garment trims from Guangdong Rongmian totaling $7,773,382 in 2025, up from $5,853,973 in 2024[548]. - Rental payments to related parties for office and warehouse space amounted to $157,202 in 2025, down from $216,831 in 2024[550]. - The beneficial ownership of Ordinary Shares as of the date of the report shows Mr. Danny Tze Ching Wong holding 48.09% and Mr. Edwin Chun Yin Wong holding 7.98%[542]. Debt and Liabilities - As of March 31, 2025, the total bank borrowings amount to US$1,391,827, with a significant portion maturing in 2026 and 2027[554]. - The company recognized operating lease liabilities of US$159,090 for J-Long's office and warehouse as of March 31, 2025, with corresponding right-of-use assets of US$155,058[552]. - The largest amount outstanding due from Mr. Danny Wong was US$7,859,052 as of March 31, 2024, indicating significant related party transactions[555]. - The company has a loan from J-Long Trims Pte. Ltd. amounting to US$200,000 as of March 31, 2025, with an interest rate of 4%[559][560]. - The company has a mortgage with Hang Seng Bank Limited, with a balance of US$302,685 due by March 31, 2025[554]. Risk Management - As of March 31, 2024, 32% of total accounts receivable were due from the five largest customers, highlighting a concentration of credit risk[698]. - The company incurred losses from impairment of marketable debt securities amounting to US$42,291 for the year ended March 31, 2024[703]. - The company’s exposure to currency risk is primarily from cash and cash equivalents, accounts receivable, and accounts payable, which are denominated in multiple currencies[699]. - The company does not currently have a foreign currency hedging policy but monitors foreign exchange exposure[702]. Interest Rate Sensitivity - For the year ended March 31, 2023, a hypothetical increase of +250 bps in interest rates would result in a net interest income impact of $3,390 for the floating loan principal of $5,352,564[706]. - For the year ended March 31, 2024, a hypothetical increase of +250 bps in interest rates would lead to a net interest income impact of $3,649 for the floating loan principal of $4,224,359[706]. - For the year ended March 31, 2025, a hypothetical increase of +250 bps in interest rates would result in a net interest income impact of $2,542 for the floating loan principal of $4,224,359[706]. - A hypothetical decrease of -250 bps in interest rates would result in a net interest expense impact of $3,390 for the year ended March 31, 2023[706]. - A hypothetical decrease of -250 bps in interest rates would lead to a net interest expense impact of $3,649 for the year ended March 31, 2024[706]. - A hypothetical decrease of -250 bps in interest rates would result in a net interest expense impact of $2,542 for the year ended March 31, 2025[706].