人和科技(08140) - 2022 Q3 - 季度财报

Corporate Information This chapter provides essential corporate information for Renhe Technology Holdings Limited, including board members, committee compositions, registered office, headquarters, independent auditor, principal bankers, and share registrar - Board members include Mr. Quet Yim Tak (Non-executive Chairman), Mr. Lam Shu Yu, Mr. Paulino Lim, Mr. Yeung Tim Lee (Executive Directors), and Mr. Lo Chung Ching, Ms. Chuk Wai Ning, Mr. Ng Ming Hon (Independent Non-executive Directors)[11] - The Audit Committee Chairman is Mr. Ng Ming Hon, the Remuneration Committee Chairman is Mr. Lo Chung Ching, and the Nomination Committee Chairman is Mr. Quet Yim Tak[11] - The company's registered office is in the Cayman Islands, with its headquarters and principal place of business in Hong Kong at Unit D, 29/F, King Palace Plaza, 55 King Yip Street, Kwun Tong, Kowloon, Hong Kong[11] - The independent auditor is BDO Limited, and the principal banker is Bank of China (Hong Kong) Limited[11] - The Hong Kong share registrar is Tricor Investor Services Limited, and the stock code is 8140[14] Management Discussion and Analysis Market Overview Hong Kong's economy significantly recovered in 2021 after two years of recession, growing by 6.4% for the year, its fastest pace since 2010; however, the fifth wave of COVID-19 (Omicron variant) in late 2021 escalated in Q1 2022, severely impacting the economy and society, though the government still forecasts 2% to 3.5% growth for 2022 - Hong Kong's economy achieved 6.4% growth in 2021, its fastest pace since 2010, primarily driven by a rebound in global demand and local epidemic control[16] - Economic growth remained robust in the second half of 2021, with 5.5% growth in Q3 and 4.8% in Q4[16] - The fifth wave of COVID-19, which erupted in late 2021, escalated in Q1 2022, with confirmed cases briefly exceeding 50,000, severely impacting the economy and society[16] - Despite the pandemic's impact, the government forecasts Hong Kong's economy to still grow by 2% to 3.5% in 2022, with consumer price inflation expected to remain at a moderate 2%[17] Business Review and Outlook The Group primarily provides mechanical rebar splicing services to the reinforced concrete construction industry in Hong Kong, serving main and sub-contractors; the company will continuously monitor business opportunities, strengthen market competitiveness to enhance profitability, and the board believes the 2018 GEM listing improved the Group's financial position and will further elevate its industry leadership - The Group's core business is providing mechanical rebar splicing services to the reinforced concrete construction industry in Hong Kong[19] - Key clients include main and sub-contractors for various reinforced concrete construction projects in Hong Kong, covering both public and private sectors[19] - The company will continuously monitor business opportunities and strengthen market competitiveness to enhance profitability and shareholder value[19] - The board believes that the listing on GEM of the Stock Exchange on July 12, 2018, improved the Group's financial position and facilitated the implementation of business plans, enhancing its industry standing[20] Financial Summary and Review For the nine months ended March 31, 2022, the Group's revenue increased by 11.6% to HK$77.6 million, driven by new projects and clients; gross profit rose 8.2% to HK$29.8 million, and net profit and total comprehensive income grew 9.5% to HK$16.2 million, with both cost of sales and administrative expenses increasing Financial Summary for the Nine Months Ended March 31, 2022 | Metric | 2022 (HK$ '000) | 2021 (HK$ '000) | Change (%) | | :--- | :--- | :--- | :--- | | Revenue | 77,631 | 69,565 | 11.6 | | Gross Profit | 29,814 | 27,558 | 8.2 | | Net Profit and Total Comprehensive Income | 16,194 | 14,793 | 9.5 | | Earnings Per Share (HK cents) | 2.02 | 1.86 | 8.6 | - The increase in revenue was primarily due to an increase in new projects and clients during the period[26] - Cost of sales increased by 13.8% to HK$47.8 million, mainly due to higher connector costs and direct labor costs[27] - Other income remained at approximately HK$4.5 million, as increased inspection income and insurance compensation were offset by a decrease in one-off Employment Support Scheme income[30] - Administrative expenses increased by 3.1% to HK$13.2 million, primarily due to an increase in directors' emoluments[31] Liquidity and Financial Resources As of March 31, 2022, the Group maintained a robust financial position with cash and bank balances of approximately HK$74.1 million, a current ratio of approximately 4.8 times, and a zero gearing ratio; the board believes the Group has sufficient resources to meet its operational financial needs - As of March 31, 2022, cash and bank balances were approximately HK$74.1 million (June 30, 2021: approximately HK$72.6 million)[37] - The current ratio was approximately 4.8 times (June 30, 2021: approximately 4.1 times), indicating good liquidity[37] - The gearing ratio was zero (June 30, 2021: zero), indicating no external borrowings[37] - The board believes the Group has sufficient resources to meet its operational financial needs[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 is sufficient to cover liabilities and will monitor risks, but currently holds no hedging agreements or derivative financial instruments for speculative purposes - All connectors for the Group are procured from Taiwan and denominated in New Taiwan Dollars, exposing it to exchange rate fluctuation risk against the Hong Kong Dollar[38] - Management believes the Group's foreign currency is sufficient to cover foreign currency liabilities when due, and will be funded by cash generated from operating activities[38] - The Group has not entered into any agreements to hedge exchange rate risks and will continue to monitor, considering hedging if necessary[38] - As of March 31, 2022, the Group held no derivative financial instruments for speculative purposes[38] Contingent Liabilities As of March 31, 2022, the Group was involved in a patent infringement lawsuit against its subsidiary; based on legal counsel's assessment, the board believes no provision for contingent liabilities is required, and there are no other significant contingent liabilities - The Group is involved in a patent infringement lawsuit against its subsidiary, BOSA Technology (R&D) Limited[40] - Based on legal counsel's assessment, the board believes no provision for contingent liabilities is required as of March 31, 2022[40] - Other than the aforementioned lawsuit, the Group had no other material contingent liabilities as of March 31, 2022[40] Dividends The board does not recommend paying any dividends for the current period, consistent with the prior year's corresponding period - The board does not recommend paying any dividends for the nine months ended March 31, 2022[41] - No dividends were paid for the nine months ended March 31, 2021[41] Pledged Assets The Group's obligations under finance leases are secured by the lessor's pledge over the leased assets (motor vehicles); as of March 31, 2022, secured and unsecured obligations were approximately HK$515,000, a decrease from HK$646,000 as of June 30, 2021 - The Group's obligations under finance leases are secured by the lessor's pledge over the leased assets (motor vehicles)[42] - As of March 31, 2022, secured and unsecured obligations were approximately HK$515,000[42] - This amount decreased from approximately HK$646,000 as of June 30, 2021[42] - Other than this, the Group had no pledged assets as of March 31, 2022[42] Capital Structure The company was incorporated in the Cayman Islands in 2016 and listed on GEM of the Stock Exchange on July 12, 2018; its capital comprises ordinary shares and capital reserves, with working capital primarily sourced from cash and operating cash flows - The company was incorporated in the Cayman Islands as an exempted company on October 24, 2016[43] - Shares were listed on GEM of the Stock Exchange on July 12, 2018[43] - The company's capital comprises ordinary shares and capital reserves[43] - The Group funds its working capital, capital expenditures, and other liquidity needs through cash and cash equivalents and cash flows generated from operating activities[43] Future Investments and Use of Listing Proceeds The Group plans to acquire land in Hong Kong for a new workshop and invest in R&D; net listing proceeds of approximately HK$37.8 million remain largely unutilized, expected to be fully deployed by December 31, 2022, though social unrest and the pandemic have delayed the new workshop acquisition Future Material Investments and Capital Asset Plans As of March 31, 2022, the Group had no other material investment or capital asset plans apart from acquiring a plot of land in Hong Kong for a new workshop; unutilized listing proceeds are held as interest-bearing deposits and will be gradually used based on market conditions - As of March 31, 2022, the Group had no other material investment or capital asset plans, only a plan to acquire a plot of land in Hong Kong to establish a new workshop[48] - Unutilized proceeds are held as interest-bearing deposits with licensed banks in Hong Kong[48] - The Group will gradually utilize the remaining net proceeds in accordance with the methods outlined in the prospectus, subject to market conditions[48] Material Investments, Acquisitions, and Disposals Held During the period, the Group held no material investments, nor did it undertake any acquisitions or disposals of subsidiaries, associates, joint ventures, or affiliated companies; as of March 31, 2022, there were no related material plans - During the period, the Group held no material investments, nor did it undertake any acquisitions or disposals of subsidiaries, associates, joint ventures, or affiliated companies[49] - As of March 31, 2022, the Group had no other material plans regarding significant investments, acquisitions, and disposals of subsidiaries, associates, and joint ventures[49] Use of Listing Proceeds The company listed on July 12, 2018, issuing 200 million new shares with net proceeds of approximately HK$37.8 million; these funds will be applied as stated in the prospectus, expected to be fully utilized by December 31, 2022, with unutilized portions held as interest-bearing short-term demand deposits - The company's shares were listed on GEM of the Stock Exchange on July 12, 2018, with 200,000,000 new shares issued, generating net proceeds of approximately HK$37.8 million[50] - The proceeds will be applied in the manner described in the 'Future Plans and Use of Proceeds' section of the prospectus[50] - No material changes are expected to the plans related to the use of listing proceeds[50] - All unutilized net proceeds are held as interest-bearing short-term demand deposits with licensed banks in Hong Kong[50] - Barring any unforeseen circumstances, the remaining proceeds are expected to be utilized by December 31, 2022[50] Comparison of Business Objectives with Actual Business Progress This section details the comparison between the use of listing proceeds outlined in the prospectus and actual progress as of March 31, 2022; the HK$35.3 million planned for land acquisition for a new workshop was delayed due to social unrest and the pandemic, now expected by December 31, 2022, and R&D expenditure was less than planned due to workshop delays and extended evaluation Use of Listing Proceeds vs. Actual Progress (As of March 31, 2022) | Purpose | Amount Planned in Prospectus (HK$ million) | Amount Utilized as of March 31, 2022 (HK$ million) | Remaining Net Amount Available as of March 31, 2022 (HK$ million) | Latest Development | Expected Timeline | | :--- | :--- | :--- | :--- | :--- | :--- | | Expansion of Operating Facilities (New Workshop) | 35.3 | - | 35.3 | Social unrest and COVID-19 pandemic affected acquisition assessment certainty, leading to delays | Completion of construction on a plot of land by December 31, 2022 | | Investment in R&D | 2.4 | 1.3 | 1.1 | Continue to seek suitable R&D opportunities to improve service quality and cost-effectiveness | Completion by December 31, 2022 | | General Working Capital | 0.1 | 0.1 | - | Utilized | Completed | | Total | 37.8 | 1.4 | 36.4 | | | - The HK$35.3 million originally allocated for land acquisition to establish a new workshop has been delayed due to social unrest, the COVID-19 pandemic, Sino-US political tensions, and high land prices, affecting assessment and acquisition progress[111] - As of March 31, 2022, R&D expenditure actually used was approximately HK$1.3 million, less than the planned HK$2.4 million, primarily due to delays in opening the new workshop and longer evaluation and execution times for R&D plans[116] - The board confirms no material change in the Group's business nature, and the delay in using proceeds will not materially adversely affect operations, though the Omicron outbreak may cause further delays[116] Unaudited Condensed Consolidated Statement of Profit or Loss and Other Comprehensive Income This statement presents the unaudited condensed consolidated profit or loss and other comprehensive income for the nine and three months ended March 31, 2022; for the nine-month period, revenue was HK$77,631 thousand, net profit and total comprehensive income was HK$16,194 thousand, and basic earnings per share was 2.02 HK cents Unaudited Condensed Consolidated Statement of Profit or Loss and Other Comprehensive Income for the Nine Months Ended March 31, 2022 | Metric | 2022 (HK$ '000) | 2021 (HK$ '000) | | :--- | :--- | :--- | | Revenue | 77,631 | 69,565 | | Cost of Sales | (47,817) | (42,007) | | Gross Profit | 29,814 | 27,558 | | Other Income | 4,513 | 4,485 | | Other Losses | (1,472) | (1,356) | | Administrative Expenses | (13,207) | (12,762) | | Finance Costs | (204) | (113) | | Profit Before Tax | 19,444 | 17,812 | | Taxation | (3,300) | (2,950) | | Profit for the Period | 16,144 | 14,862 | | Exchange Differences Arising from Translation of Foreign Operations | 50 | (69) | | Profit and Total Comprehensive Income Attributable to Owners of the Company | 16,194 | 14,793 | | Basic Earnings Per Share (HK cents) | 2.02 | 1.86 | - For the three months ended March 31, 2022, revenue was HK$23,223 thousand, and profit for the period was HK$3,864 thousand[118] Unaudited Condensed Consolidated Statement of Changes in Equity This statement outlines the unaudited condensed consolidated changes in equity for the nine months ended March 31, 2022; total equity at period-end was HK$119,100 thousand, an increase from HK$102,906 thousand as of July 1, 2021, primarily due to profit for the period and changes in exchange reserves Unaudited Condensed Consolidated Statement of Changes in Equity for the Nine Months Ended March 31, 2022 | Item | Share Capital (HK$ '000) | Share Premium (HK$ '000) | Other Reserves (HK$ '000) | Exchange Reserve (HK$ '000) | Retained Profits (HK$ '000) | Total (HK$ '000) | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | Balance as of July 1, 2020 | 41 | 59,936 | 5,647 | (95) | 16,128 | 81,657 | | Total Comprehensive Income for the Period (2020/21) | - | - | - | (69) | 14,862 | 14,793 | | Balance as of March 31, 2021 | 41 | 59,936 | 5,647 | (164) | 30,990 | 96,450 | | Balance as of July 1, 2021 | 41 | 59,936 | 5,647 | (487) | 37,769 | 102,906 | | Total Comprehensive Income for the Period (2021/22) | - | - | - | 50 | 16,144 | 16,194 | | Balance as of March 31, 2022 | 41 | 59,936 | 5,647 | (437) | 53,913 | 119,100 | - As of March 31, 2022, retained profits increased to HK$53,913 thousand, while exchange reserves improved from negative HK$487 thousand to negative HK$437 thousand[123] Notes to the Unaudited Condensed Consolidated Financial Information Company Information The company is an investment holding company incorporated in the Cayman Islands, with its shares listed on GEM of the Stock Exchange since July 12, 2018; the Group's principal business is providing mechanical rebar splicing services in Hong Kong - The company is an investment holding company incorporated in the Cayman Islands as an exempted company[128] - Shares have been listed on GEM of the Stock Exchange since July 12, 2018[128] - The Group is principally engaged in providing mechanical rebar splicing services to the reinforced concrete construction industry in Hong Kong[128] Basis of Preparation and Principal Accounting Policies The unaudited condensed consolidated third quarterly financial statements are prepared in accordance with HKAS 34 and GEM Listing Rules, consistent with annual audited consolidated financial statements; several new or revised HKFRSs were adopted during the period, with HKFRS 16 Leases significantly impacting lease accounting by requiring lessees to recognize right-of-use assets and corresponding liabilities - The financial statements are prepared in accordance with Hong Kong Accounting Standard 34 'Interim Financial Reporting' issued by the HKICPA and the applicable disclosure requirements of the GEM Listing Rules[129] - New or revised Hong Kong Financial Reporting Standards, effective or early adopted by the HKICPA, including HKFRS 16 Leases, have been adopted during the period[134][135] - HKFRS 16 Leases introduces a single lessee accounting model, eliminating the distinction between operating and finance leases, requiring lessees to recognize right-of-use assets and corresponding liabilities[137] - Following the application of HKFRS 16, lease payments will be separated into principal and interest components and presented as financing cash flows[139] Revenue Revenue represents amounts received and receivable for services provided during the period, net of fair value of discounts; the Group's operations and revenue are solely derived from providing mechanical rebar splicing services in Hong Kong, thus it has only a single operating segment - Revenue represents amounts received and receivable for services provided during the period, net of the fair value of discounts[143] - The Group's operations and revenue are solely derived from providing mechanical rebar splicing services in Hong Kong[143] - Consequently, the Group has only a single operating segment, and no further analysis of this single segment is presented[143] Other Income and Other Losses For the nine months ended March 31, 2022, other income was HK$4,513 thousand, mainly comprising handling fees and insurance compensation; other losses for the same period were HK$1,472 thousand, primarily net exchange losses Other Income and Other Losses for the Nine Months Ended March 31, 2022 | Item | 2022 (HK$ '000) | 2021 (HK$ '000) | | :--- | :--- | :--- | | Other Income | | | | Handling Fees | 3,926 | 2,177 | | Insurance Compensation | 559 | - | | Employment Support Scheme | - | 2,296 | | Others | 28 | 6 | | Total Other Income | 4,513 | 4,485 | | Other Losses | | | | Net Exchange Loss | 1,472 | 1,356 | - For the three months ended March 31, 2022, other income was HK$1,460 thousand, and other losses were HK$660 thousand[144] Profit Before Tax Profit before tax is derived after deducting various expenses, including cost of inventories, depreciation of plant and equipment, directors' emoluments, other staff costs (salaries and benefits, retirement benefit scheme contributions), research expenses, and depreciation of right-of-use assets Profit Before Tax Deductions for the Nine Months Ended March 31, 2022 | Item | 2022 (HK$ '000) | 2021 (HK$ '000) | | :--- | :--- | :--- | | Cost of Inventories Recognized as Expense | 29,944 | 26,132 | | Depreciation of Plant and Equipment | 2,526 | 2,646 | | Directors' Emoluments | 4,963 | 4,335 | | Total Other Staff Costs | 17,802 | 16,082 | | Research Expenses | 396 | 352 | | Depreciation of Right-of-Use Assets | 2,737 | 1,843 | - Total staff costs include salaries and other benefits of HK$12,333 thousand and retirement benefit scheme contributions of HK$506 thousand[158] Taxation Hong Kong profits tax is levied under a two-tiered system, with the first HK$2.0 million of estimated assessable profits provisioned at 8.25% and the remainder at 16.5%; the Group anticipates no material unprovided deferred tax assets or liabilities in the foreseeable future - Hong Kong profits tax is provisioned at 8.25% for the first HK$2.0 million of estimated assessable profits[163] - Estimated assessable profits exceeding HK$2.0 million are provisioned at 16.5%[163] - The Group has no material unprovided deferred tax assets or liabilities expected to be realized in the foreseeable future[163] Earnings Per Share For the nine months ended March 31, 2022, basic earnings per share increased to 2.02 HK cents from 1.86 HK cents in the prior year; calculation is based on profit attributable to owners of the company and the weighted average of 800,000 thousand ordinary shares Basic Earnings Per Share Calculation Data for the Nine Months Ended March 31, 2022 | Item | 2022 (HK$ '000/ '000 shares) | 2021 (HK$ '000/ '000 shares) | | :--- | :--- | :--- | | Profit Attributable to Owners of the Company (HK$ '000) | 16,144 | 14,862 | | Weighted Average Number of Ordinary Shares ('000 shares) | 800,000 | 800,000 | | Basic Earnings Per Share (HK cents) | 2.02 | 1.86 | - For the three months ended March 31, 2022, basic earnings per share was 0.48 HK cents, compared to 0.58 HK cents for the same period last year[118][164] Other Information Share Option Scheme The company conditionally adopted a share option scheme on June 19, 2018, which became unconditional on July 12, 2018; as of March 31, 2022, there were no outstanding, granted, cancelled, exercised, or lapsed share options - The share option scheme was adopted on June 19, 2018, and became unconditional on July 12, 2018[168] - The terms of the scheme are in accordance with Chapter 23 of the GEM Listing Rules[168] - As of March 31, 2022, there were no outstanding, granted, cancelled, exercised, or lapsed share options[168] Directors' Rights to Acquire Shares or Debentures Excluding the share option scheme, during the period, neither the company nor any associated company entered into arrangements enabling directors to acquire benefits through shares or debentures of the company or any other body corporate; no director, spouse, or child under 18 has rights to subscribe for company shares or debentures - Excluding the share option scheme, during the period, neither the company nor any associated company entered into arrangements enabling directors to acquire benefits through shares or debentures of the company or any other body corporate[169] - No director, spouse, or child under 18 has rights to subscribe for the company's shares or debentures[169] Directors' and Chief Executive's Interests and Short Positions in Shares, Underlying Shares, and Debentures As of March 31, 2022, the company's directors and chief executive held long positions in the company's ordinary shares and underlying shares; Mr. Quet Yim Tak held 33.2% through a controlled corporation, Mr. Lam Shu Yu held 12.4%, Mr. Yeung Tim Lee held 8.0%, and Mr. Paulino Lim held 5.1% Directors' and Chief Executive's Long Positions in Ordinary Shares and Underlying Shares of the Company as of March 31, 2022 | Name | Capacity | Number of Shares Held | % of Company's Issued Voting Shares | | :--- | :--- | :--- | :--- | | Mr. Quet Yim Tak | Interest in Controlled Corporation | 265,163,415 | 33.2% | | Mr. Lam Shu Yu | Beneficial Owner | 99,340,732 | 12.4% | | Mr. Yeung Tim Lee | Beneficial Owner | 64,390,244 | 8.0% | | Mr. Paulino Lim | Beneficial Owner | 40,975,610 | 5.1% | - Mr. Quet Yim Tak beneficially owns 100% of Kin Sun Creative Limited, and is therefore deemed to have an interest in the shares held by it[180] - Save as disclosed above, no other directors and chief executive had any interests and short positions in the shares, underlying shares, and debentures of the company and its associated corporations that were required to be recorded or notified[174] Substantial Shareholders' Interests and/or Short Positions in Shares and Underlying Shares of the Company As of March 31, 2022, excluding directors, Kin Sun Creative Limited was the largest shareholder with 33.2% of shares; other substantial shareholders included Mr. Wong Man Po (6.4%) and Ms. Chiu Yin Mei (5.1%), with several directors' spouses also deemed to hold shares due to spousal interests Substantial Shareholders' Long Positions in Ordinary Shares and Underlying Shares of the Company as of March 31, 2022 | Shareholder Name/Entity | Capacity | Number of Shares Held | % of Company's Issued Voting Shares | | :--- | :--- | :--- | :--- | | Kin Sun Creative Limited | Beneficial Owner | 265,163,415 | 33.2% | | 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 | Spousal Interest (Spouse of Mr. Quet Yim Tak) | 265,163,415 | 33.2% | | Ms. Chan Ching | Spousal Interest (Spouse of Mr. Lam Shu Yu) | 99,340,732 | 12.4% | | Ms. Lau Lee Kit | Spousal Interest (Spouse of Mr. Yeung Tim Lee) | 64,390,244 | 8.0% | | Ms. Wong Yuk Yu | Spousal Interest (Spouse of Mr. Wong Man Po) | 51,230,244 | 6.4% | | Ms. Ng Pei Ying | Spousal Interest (Spouse of Mr. Paulino Lim) | 40,975,610 | 5.1% | - Ms. Chiu Yin Mei is the company's administrative manager[181] - Spouses of several directors are deemed or taken to be interested in the shares owned by their spouses under the Securities and Futures Ordinance[182][183][184][185][186] Dividends The board does not recommend paying any dividends for the current period, consistent with the prior year's corresponding period - The board does not recommend paying any dividends for the current period[187] - No dividends were paid for the nine months ended March 31, 2021[187] 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[189] Directors' Material Interests in Transactions, Arrangements, and Contracts Significant to the Company's Business Except for disclosed service contracts/letters of appointment, as of the period-end or during the period, there were no other subsisting transactions, arrangements, or contracts entered into by the company or its subsidiaries in which a director or an entity connected with a director had a material direct or indirect interest significant to the Group's business - Except for those disclosed and service contracts/letters of appointment entered into with directors, there were no other subsisting transactions, arrangements, or contracts entered into by the company or its subsidiaries in which a director or an entity connected with a director had a material direct or indirect interest significant to the Group's business[190] Non-Competition Undertaking Kin Sun Creative Limited, Mr. Quet Yim Tak, and Mr. Yeung Tim Lee have each given an irrevocable and unconditional non-competition undertaking to the company, pledging not to directly or indirectly engage in any business competing with the Group's operations; as of the year ended June 30, 2021, they all confirmed compliance with this undertaking - Kin Sun Creative Limited, Mr. Quet Yim Tak, and Mr. Yeung Tim Lee have each given an irrevocable and unconditional non-competition undertaking to the company[191][196] - The undertaking states that they will not directly or indirectly participate in, acquire, or hold any business that competes with or is similar to the Group's business[191][196] - For the year ended June 30, 2021, Kin Sun Creative Limited, Mr. Quet Yim Tak, and Mr. Yeung Tim Lee all confirmed compliance with the terms of the non-competition undertaking[196] - The independent non-executive directors have reviewed and confirmed their compliance with the non-competition undertaking[196] 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[198] Audit Committee The company established an Audit Committee on June 19, 2018, comprising three independent non-executive directors, with Mr. Ng Ming Hon as Chairman; the Audit Committee has reviewed the Group's unaudited condensed consolidated financial results for the period and deemed them compliant with applicable accounting standards - The Audit Committee was established on June 19, 2018, and operates in accordance with its terms of reference approved by the board[199] - The committee comprises three independent non-executive directors: Mr. Ng Ming Hon (Chairman), Mr. Quet Yim Tak, and Mr. Lo Chung Ching[199] - The Audit Committee has reviewed the Group's unaudited condensed consolidated financial results for the period and is of the opinion that they were prepared in accordance with applicable accounting standards and adequately disclosed[199] Corporate Governance Code The board and management are committed to maintaining high standards of corporate governance and transparency in the interests of all stakeholders; during the period, the company complied with all provisions of the Corporate Governance Code and Corporate Governance Report set out in Appendix 15 to the GEM Listing Rules - The board and management are committed to maintaining high standards of corporate governance and transparency in the interests of all stakeholders[200] - During the period, the company complied with all provisions of the Corporate Governance Code and Corporate Governance Report set out in Appendix 15 to the GEM Listing Rules[200] Model Code for Securities Transactions by Directors The company has adopted a model code for securities transactions by its directors and employees, whose terms are no less exacting than those in the GEM Listing Rules; upon enquiry, all directors confirmed compliance with this code for the nine months ended March 31, 2021 - The company has adopted a model code for securities transactions by its directors, employees, and directors and employees of its subsidiaries and holding companies[204] - The terms of this model code are no less exacting than the required standards of dealing set out in Rules 5.48 to 5.67 of the GEM Listing Rules[204] - All directors confirmed that they had complied with the model code for the nine months ended March 31, 2021[204] Publication of Third Quarterly Report The company's Third Quarterly Report for 2021/2022 will be dispatched to the company's shareholders and published on the company's website www.hklistco.com/**8140** and the HKEXnews website www.hkexnews.hk - The company's Third Quarterly Report for 2021/2022 will be dispatched to the company's shareholders[205] - The report will also be published on the company's website www.hklistco.com/**8140** and the HKEXnews website www.hkexnews.hk[205](index=205&type=chunk)