浩德控股(08149) - 2022 Q3 - 季度财报

Company Information and GEM Characteristics This section provides an overview of Altus Holdings Limited, its incorporation details, and the specific characteristics and risks associated with its listing on the GEM market Company Overview Altus Holdings Limited (stock code: 8149), incorporated in the Cayman Islands, presents its Q3 FY2022 report - Company Name: Altus Holdings Limited - Place of Incorporation: Cayman Islands [2] - Stock Code: 8149 [2] - Reporting Period: Third Quarter of Fiscal Year 2022 [2] GEM Listing Characteristics GEM provides a listing platform for high-risk SMEs; investors should understand risks, and directors confirm report accuracy - The GEM market is positioned as a listing platform for small and medium-sized companies with higher investment risks [3] - GEM securities may be subject to significant market volatility and high liquidity is not guaranteed [3] - Directors collectively and individually bear full responsibility for this report, confirming its accuracy, completeness, and absence of misleading or fraudulent content [3] Financial Highlights This section summarizes the Group's financial performance for the nine months ended December 31, 2021, highlighting revenue, reported profit, and underlying profit trends Financial Highlights Overview For the nine months ended December 31, 2021, group revenue was HK$40.7 million, down 9.3%, while reported profit significantly improved to HK$6.2 million due to no fair value loss on investment properties, though underlying profit decreased due to lack of government subsidies Financial Highlights for the Nine Months Ended December 31, 2021 | Metric | Nine Months Ended Dec 31, 2021 (HK$ Thousand) | Nine Months Ended Dec 31, 2020 (HK$ Thousand) | YoY Change (%) | | :---------------- | :-------------------------------------------- | :-------------------------------------------- | :------------- | | Revenue | 40,700 | 44,800 | -9.3 | | Reported Profit | 6,200 | 1,100 | +463.6 | | Underlying Profit | 6,200 | 8,500 | -27.1 | | Underlying EPS | 0.70 HK Cents | 0.99 HK Cents | -29.3 | | Reported EPS | 0.69 HK Cents | 0.07 HK Cents | +885.7 | - The improvement in reported profit was primarily due to no net fair value decrease of investment properties of HK$7.7 million recorded for the nine months ended December 31, 2021 [5] - The decrease in underlying profit was mainly due to the absence of government subsidies, such as the 'Employment Support Scheme' [5] - The Directors do not recommend the payment of any interim dividend for the third quarter of fiscal year 2022 [7] Unaudited Condensed Consolidated Results This section presents the unaudited condensed consolidated financial statements, including the statement of profit or loss, earnings per share, comprehensive income, and changes in equity Condensed Consolidated Statement of Profit or Loss For the nine months ended December 31, 2021, the Group's revenue was HK$40,665 thousand, a decrease from the prior year, while profit for the period significantly grew to HK$6,219 thousand, mainly due to the absence of net fair value decrease on investment properties Condensed Consolidated Statement of Profit or Loss (for the nine months ended December 31) | Metric | Nine Months Ended Dec 31, 2021 (HK$ Thousand) | Nine Months Ended Dec 31, 2020 (HK$ Thousand) | | :----------------------------------------------- | :-------------------------------------------- | :-------------------------------------------- | | Revenue | 40,665 | 44,835 | | Other income | 199 | 1,933 | | Net fair value decrease in investment properties | – | (7,663) | | Fair value change in derivative financial liabilities | 31 | (74) | | Property expenses | (9,434) | (10,777) | | Administrative and operating expenses | (18,780) | (20,537) | | Share of results of associates | 2 | 18 | | Finance costs | (3,176) | (3,527) | | Profit before tax | 9,507 | 4,208 | | Income tax expense | (3,288) | (3,061) | | Profit for the period | 6,219 | 1,147 | | Profit for the period attributable to owners of the Company | 5,625 | 599 | | Non-controlling interests | 594 | 548 | - For the nine months ended December 31, 2021, revenue decreased by 9.3% year-on-year to HK$40,665 thousand [10] - Profit for the period significantly increased by 442.2% year-on-year to HK$6,219 thousand, primarily due to the absence of a net fair value decrease in investment properties [10] Earnings Per Share For the nine months ended December 31, 2021, reported basic and diluted earnings per share attributable to owners of the Company significantly increased to 0.70 HK cents and 0.69 HK cents respectively, while underlying EPS slightly decreased Earnings Per Share (for the nine months ended December 31) | Metric | Nine Months Ended Dec 31, 2021 (HK Cents) | Nine Months Ended Dec 31, 2020 (HK Cents) | | :----------------------- | :---------------------------------------- | :---------------------------------------- | | Reported EPS - Basic | 0.70 | 0.07 | | Reported EPS - Diluted | 0.69 | 0.07 | | Underlying EPS - Basic | 0.70 | 0.99 | | Underlying EPS - Diluted | 0.69 | 0.98 | - Reported earnings per share significantly increased, reflecting the improvement in profit for the period [12] - Underlying earnings per share (excluding fair value changes in investment properties) decreased, consistent with the trend of reduced underlying profit in the financial highlights [12] Condensed Consolidated Statement of Comprehensive Income For the nine months ended December 31, 2021, the Group recorded a total comprehensive expense of HK$7,414 thousand, primarily due to exchange differences on translating foreign operations (HK$13,499 thousand expense), a stark contrast to the comprehensive income in the prior year Condensed Consolidated Statement of Comprehensive Income (for the nine months ended December 31) | Metric | Nine Months Ended Dec 31, 2021 (HK$ Thousand) | Nine Months Ended Dec 31, 2020 (HK$ Thousand) | | :----------------------------------------------- | :-------------------------------------------- | :-------------------------------------------- | | Profit for the period | 6,219 | 1,147 | | Exchange differences on translating foreign operations | (13,499) | 18,094 | | Fair value change of financial assets at fair value through other comprehensive income | (134) | (229) | | Other comprehensive (expense) income for the period | (13,633) | 17,865 | | Total comprehensive (expense) income for the period | (7,414) | 19,012 | | Total comprehensive (expense) income for the period attributable to owners of the Company | (7,840) | 16,447 | | Non-controlling interests | 426 | 2,565 | - For the nine months ended December 31, 2021, exchange differences on translating foreign operations resulted in an expense of HK$13,499 thousand, compared to an income of HK$18,094 thousand in the prior period, which was the primary reason for the shift from positive to negative total comprehensive income [14] Condensed Consolidated Statement of Changes in Equity As of December 31, 2021, total equity attributable to owners of the Company was HK$442,781 thousand, a decrease from HK$449,634 thousand on April 1, 2021, mainly impacted by total comprehensive expense for the period and a reduction in exchange reserve Condensed Consolidated Statement of Changes in Equity (as of December 31, 2021) | Metric | Apr 1, 2021 (Audited) (HK$ Thousand) | Profit for the Period (HK$ Thousand) | Total Comprehensive (Expense) Income for the Period (HK$ Thousand) | Shares Repurchased and Cancelled (HK$ Thousand) | Shares Vested from Share Awards (HK$ Thousand) | Share-based Payments (HK$ Thousand) | Dividends Paid to Non-controlling Shareholders (HK$ Thousand) | Dec 31, 2021 (Unaudited) (HK$ Thousand) | | :----------------------------------------------- | :----------------------------------- | :----------------------------------- | :------------------------------------------------- | :-------------------------------------- | :--------------------------------------------- | :---------------------------------- | :-------------------------------------------- | :-------------------------------------- | | Total attributable to owners of the Company | 449,634 | 5,625 | (7,840) | (101) | – | 1,088 | – | 442,781 | | Non-controlling interests | 14,529 | 594 | 426 | – | – | – | (108) | 14,847 | | Total | 464,163 | 6,219 | (7,414) | (101) | – | 1,088 | (108) | 457,628 | - Exchange reserve decreased from HK$(20,873) thousand on April 1, 2021, to HK$(34,204) thousand on December 31, 2021, reflecting the negative impact of exchange differences from foreign operations [16] - Share premium slightly changed due to share repurchases and cancellations but remained stable overall [16] Notes to the Financial Statements This section provides detailed notes to the condensed consolidated financial statements, covering general information, presentation basis, revenue, segment information, other income, finance costs, income tax, profit for the period, dividends, earnings per share, and share awards General Information The Company, incorporated in the Cayman Islands in 2015 and listed on GEM in 2016, primarily engages in investment holding, corporate finance, and property/securities investment, including Japanese tokumei kumiai arrangements, with its ultimate holding company, KHHL, controlled by Ms. Chan Kit Lai and trust beneficiaries Mr. Yip Tin Chi and Ms. Lam Yip Tin Wai - The Company was incorporated in the Cayman Islands on November 11, 2015, and listed on GEM of the Stock Exchange on October 17, 2016 [23] - Principal activities include investment holding, corporate finance and other advisory services, and proprietary property and securities investment, particularly in Japanese properties through tokumei kumiai arrangements [23] - The ultimate holding company is KHHL, incorporated in the British Virgin Islands, ultimately controlled by Ms. Chan Kit Lai and trust beneficiaries Mr. Yip Tin Chi and Ms. Lam Yip Tin Wai [24] - The condensed consolidated financial statements are unaudited but have been reviewed by the Audit Committee, presented in Hong Kong Dollars, with the functional currency of Japanese subsidiaries being Japanese Yen [24] Basis of Presentation of Consolidated Financial Information The unaudited condensed consolidated financial statements are prepared in accordance with HKAS 34 and HKFRS, presented on a historical cost basis except for financial instruments and investment properties, with new HKFRS amendments applied during the period having no significant impact - The financial statements are prepared in accordance with Hong Kong Accounting Standard 34 Interim Financial Reporting and Hong Kong Financial Reporting Standards issued by the Hong Kong Institute of Certified Public Accountants [28] - The statements are prepared on a historical cost basis, except for financial instruments and investment properties measured at fair value [28] - The Group first applied new HKFRS amendments for the nine months ended December 31, 2021, which had no significant impact on the financial statements [29][30] Revenue The Group's revenue primarily derives from corporate finance and advisory services and investment property rentals, totaling HK$40,665 thousand for the nine months ended December 31, 2021, with rental income at HK$27,741 thousand and corporate finance income at HK$12,924 thousand, representing a 9.3% year-on-year decrease Revenue Analysis (for the nine months ended December 31) | Revenue Source | Nine Months Ended Dec 31, 2021 (HK$ Thousand) | Nine Months Ended Dec 31, 2020 (HK$ Thousand) | | :----------------------------------------------- | :-------------------------------------------- | :-------------------------------------------- | | Corporate finance and other advisory services income | 12,924 | 14,946 | | Rental income from investment properties under operating leases | 27,741 | 29,889 | | Total Revenue | 40,665 | 44,835 | Net Rental Income Analysis (for the nine months ended December 31) | Metric | Nine Months Ended Dec 31, 2021 (HK$ Thousand) | Nine Months Ended Dec 31, 2020 (HK$ Thousand) | | :--------------------------------------- | :-------------------------------------------- | :-------------------------------------------- | | Total rental income from investment properties | 27,741 | 29,889 | | Direct operating expenses | (9,434) | (10,777) | | Net Rental Income | 18,307 | 19,112 | - As of December 31, 2021, the aggregate amount of transaction price allocated to unsatisfied performance obligations was approximately HK$5,300 thousand, with most expected to be recognized within one year [34] Segment Information The Group operates in advisory and consulting (corporate finance) and proprietary investment (rental properties and securities) segments; for the nine months ended December 31, 2021, proprietary investment revenue was HK$27,741 thousand and advisory revenue was HK$12,924 thousand, with proprietary investment profit significantly increasing due to no fair value decrease on investment properties this period - The Group's operating segments are: (i) Advisory and Consulting (providing corporate finance services); and (ii) Proprietary Investment (leasing investment properties and securities investment) [37] Segment Revenue and Profit (for the nine months ended December 31) | Segment | Nine Months Ended Dec 31, 2021 (HK$ Thousand) | Nine Months Ended Dec 31, 2020 (HK$ Thousand) | | :---------------------- | :-------------------------------------------- | :-------------------------------------------- | | Revenue | | | | Advisory and Consulting | 12,924 | 14,946 | | Proprietary Investment | 27,741 | 29,889 | | Total Revenue | 40,665 | 44,835 | | Segment Profit | | | | Advisory and Consulting | 5,185 | 7,011 | | Proprietary Investment | 15,100 | 7,717 | | Total Profit | 20,285 | 14,728 | - For the nine months ended December 31, 2021, profit from the proprietary investment segment significantly increased, mainly due to no fair value changes in investment properties recognized in the current period (compared to a decrease of approximately HK$7,700 thousand in the prior period) [42] Other Income For the nine months ended December 31, 2021, the Group's other income was HK$199 thousand, a significant decrease from HK$1,933 thousand in the prior year, primarily due to the absence of government subsidies and reduced gains from disposal of financial assets Other Income Analysis (for the nine months ended December 31) | Other Income Source | Nine Months Ended Dec 31, 2021 (HK$ Thousand) | Nine Months Ended Dec 31, 2020 (HK$ Thousand) | | :------------------------------------------------ | :-------------------------------------------- | :-------------------------------------------- | | Bank interest income | 5 | 41 | | Dividend income from financial assets at fair value through other comprehensive income | 55 | 69 | | Gain on disposal of financial assets at fair value through profit or loss | – | 247 | | Reversal of impairment loss on trade receivables | 139 | 16 | | Others (government subsidies, forfeiture of tenant deposits) | – | 1,560 | | Total | 199 | 1,933 | - Other income significantly decreased, primarily because of government subsidies (Employment Support Scheme) of HK$1,560 thousand in the prior period of 2020, which were absent in the corresponding period of 2021 [45][46] Finance Costs For the nine months ended December 31, 2021, the Group's finance costs decreased to HK$3,176 thousand from HK$3,527 thousand in the prior year, primarily due to interest on secured bank borrowings Finance Costs (for the nine months ended December 31) | Finance Cost Source | Nine Months Ended Dec 31, 2021 (HK$ Thousand) | Nine Months Ended Dec 31, 2020 (HK$ Thousand) | | :------------------ | :-------------------------------------------- | :-------------------------------------------- | | Secured bank borrowings | 3,176 | 3,527 | | Total | 3,176 | 3,527 | - Finance costs decreased by 9.9% year-on-year, primarily reflecting lower Hong Kong Dollar loan interest rates and reduced Japanese Yen loan interest expenses due to a weaker Japanese Yen [49][72] Income Tax Expense For the nine months ended December 31, 2021, the Group's income tax expense increased to HK$3,288 thousand from HK$3,061 thousand in the prior year, primarily comprising Japanese corporate income tax, Japanese withholding tax, and deferred tax, with Hong Kong profits tax being negative Income Tax Expense (for the nine months ended December 31) | Income Tax Category | Nine Months Ended Dec 31, 2021 (HK$ Thousand) | Nine Months Ended Dec 31, 2020 (HK$ Thousand) | | :---------------------- | :-------------------------------------------- | :-------------------------------------------- | | Current tax: | | | | Hong Kong profits tax | (58) | 269 | | Japanese corporate income tax | 543 | 239 | | Japanese withholding tax | 1,348 | 1,392 | | Total Current Tax | 1,833 | 1,900 | | Deferred tax | 1,455 | 1,161 | | Total | 3,288 | 3,061 | - Hong Kong profits tax is calculated under a two-tiered system, with a rate of 8.25% for the first HK$2,000,000 of assessable profits for qualifying corporations, and 16.5% for the remainder [49] - Japanese corporate income tax is calculated at 33.58% of estimated assessable profits, and a withholding tax rate of 20.42% applies to Japanese subsidiaries under TK arrangements [50] - The Group is not subject to any income tax in the Cayman Islands and the British Virgin Islands [50] Profit for the Period For the nine months ended December 31, 2021, the Group's profit for the period was net of expenses including staff costs (excluding directors' emoluments) of HK$8,236 thousand, directors' emoluments of HK$2,696 thousand, and share-based payments of HK$1,088 thousand Deductions from Profit for the Period (for the nine months ended December 31) | Item | Nine Months Ended Dec 31, 2021 (HK$ Thousand) | Nine Months Ended Dec 31, 2020 (HK$ Thousand) | | :------------------------------------- | :-------------------------------------------- | :-------------------------------------------- | | Staff costs (excluding directors' emoluments) | 8,236 | 8,915 | | Directors' emoluments | 2,696 | 2,783 | | Auditor's remuneration | 525 | 563 | | Depreciation of property, plant and equipment | 782 | 824 | | Depreciation of right-of-use assets | – | 61 | | Share-based payments | 1,088 | 795 | | Impairment loss on trade receivables | – | 628 | | Net exchange loss | 382 | 437 | - Staff costs (excluding directors' emoluments) decreased by 7.6% year-on-year, and directors' emoluments decreased by 3.1% year-on-year [52] - Share-based payments increased by 36.9% year-on-year, reflecting the vesting of share awards [52] Dividends For the nine months ended December 31, 2021, total dividends distributed to non-controlling interests amounted to HK$108 thousand, a decrease from HK$222 thousand in the prior year, and the Directors do not recommend any interim dividend for Q3 FY2022 Dividends Distributed to Non-controlling Interests (for the nine months ended December 31) | Company Name | Nine Months Ended Dec 31, 2021 (HK$ Thousand) | Nine Months Ended Dec 31, 2020 (HK$ Thousand) | | :------------------------------------ | :-------------------------------------------- | :-------------------------------------------- | | Smart Tact Property Investment Limited | 30 | 94 | | I Corporation | 19 | 29 | | EXE Rise Shimodori Investor Limited | 14 | 99 | | Residence Motoki Investment Limited | 45 | – | | Total | 108 | 222 | - The Directors do not recommend the payment of any interim dividend for the third quarter of fiscal year 2022 [55] Earnings Per Share For the nine months ended December 31, 2021, the weighted average number of ordinary shares used for basic and diluted EPS calculations was 803,493 thousand shares, with reported profit attributable to owners of the Company at HK$5,625 thousand and underlying profit at HK$5,625 thousand (excluding fair value changes in investment properties and related deferred tax) Earnings Per Share Calculation Data (for the nine months ended December 31) | Metric | Nine Months Ended Dec 31, 2021 (Thousand Shares/HK$ Thousand) | Nine Months Ended Dec 31, 2020 (Thousand Shares/HK$ Thousand) | | :----------------------------------------------- | :----------------------------------------------------------- | :----------------------------------------------------------- | | Weighted average number of ordinary shares for basic EPS | 803,493 (Thousand Shares) | 800,000 (Thousand Shares) | | Dilutive effect of potential ordinary shares: share awards | 6,375 (Thousand Shares) | 6,397 (Thousand Shares) | | Weighted average number of ordinary shares for diluted EPS | 809,868 (Thousand Shares) | 806,397 (Thousand Shares) | | Profit for the period attributable to owners of the Company (Reported Profit) | 5,625 (HK$ Thousand) | 599 (HK$ Thousand) | | Underlying profit for the period attributable to owners of the Company | 5,625 (HK$ Thousand) | 7,923 (HK$ Thousand) | - For the nine months ended December 31, 2021, the Company repurchased and cancelled 500,000 ordinary shares for a total consideration of approximately HK$100 thousand [57] - Underlying profit was consistent with reported profit in the corresponding period of 2021 due to no fair value changes in investment properties during the period [60] Share Awards For the nine months ended December 31, 2021, the Group granted a total of 14,500,000 share awards, with 6,180,000 issued and lapsed, and 4,530,000 vested; in January 2022, the Board resolved to conditionally award 300,000 new shares to three selected employees Share Award Movements (for the nine months ended December 31, 2021) | Grant Date | Category of Grantees | New Shares Granted (Shares) | Issued and Lapsed (Shares) | Vested (Shares) | Lapsed (Shares) | Unvested as of Dec 31, 2021 (Shares) | | :--------------- | :------------------------------------------------- | :-------------------------- | :------------------------- | :-------------- | :-------------- | :----------------------------------- | | June 25, 2018 | Deputy Head of Wholly-owned Subsidiary, Executive Director | 4,800,000 | 3,520,000 | 1,280,000 | – | – | | July 3, 2019 | Deputy Head of Wholly-owned Subsidiary, Executive Director, Seven Employees | 1,200,000 | 1,200,000 | – | – | – | | June 26, 2020 | Deputy Head of Wholly-owned Subsidiary, Executive Director, Ten Employees | 2,030,000 | 740,000 | 1,340,000 | – | – | | Dec 31, 2020 | Deputy Head of Wholly-owned Subsidiary, Executive Director, Ten Employees | 1,440,000 | – | 540,000 | – | 900,000 | | June 29, 2021 | Deputy Head of Wholly-owned Subsidiary, Executive Director, Ten Employees | 2,490,000 | – | 1,370,000 | 160,000 | 960,000 | | Total | | 14,500,000 | 6,180,000 | 4,530,000 | 170,000 | 3,620,000 | - Portions of the 2018, 2020, and 2021 share awards vested on December 31, 2021, and were issued to relevant employees in January 2022 [65][66] - On January 4, 2022, the Board resolved to conditionally award a total of 300,000 new shares to three selected employees, subject to conditions such as shareholder approval and Stock Exchange listing permission [66] Management Discussion and Analysis This section provides a review of the Group's business performance and strategic outlook, covering corporate finance, proprietary investment, and profit for the period Business Review For Q3 FY2022, the Group's unaudited revenue was approximately HK$14.8 million, a 12.9% year-on-year decrease, with proprietary investment contributing 60.6% and the remainder from corporate finance and advisory services; underlying and reported profit were both approximately HK$2.5 million, with underlying profit decreasing due to lower revenue and absence of government subsidies - For the third quarter of fiscal year 2022, the Group recorded unaudited revenue of approximately HK$14.8 million, a decrease of approximately 12.9% compared to the prior period [69] - Proprietary investment activities contributed approximately 60.6% of the quarter's revenue, with the remainder from corporate finance and other advisory services [69] - Underlying profit for the third quarter of fiscal year 2022 was approximately HK$2.5 million, and reported profit was approximately HK$2.5 million [74] - The decrease in underlying profit was primarily due to lower revenue and the absence of government subsidies from the prior period [74] Corporate Finance and Other Advisory Services In Q3 FY2022, corporate finance and advisory services revenue decreased by approximately 15.4% year-on-year, mainly due to reduced income from sponsorship and compliance advisory services, partially offset by growth in financial advisory services - Corporate finance and other advisory services revenue decreased by approximately 15.4%, primarily impacted by lower income from sponsorship and compliance advisory services [70] - Financial advisory services revenue continued to grow, partially offsetting the revenue decline in other segments [70] - Revenue recognition for corporate finance services is influenced by service agreement terms and the completion of significant actions, which may lead to revenue fluctuations across periods [70] Proprietary Investment The Group's property investment portfolio includes 26 buildings in Japan and one commercial unit in Hong Kong; in Q3 FY2022, Hong Kong properties were fully leased, while Japan's occupancy rate slightly dropped to 90.9%, and a weaker Japanese Yen led to a 11.3% decrease in proprietary investment revenue to approximately HK$9.0 million - The property investment portfolio includes 26 buildings in Japan and one commercial unit in Hong Kong [71] - Hong Kong properties are fully leased, while the occupancy rate of the Japanese property portfolio slightly decreased to approximately 90.9% (prior period: 93.6%), with the pandemic affecting rental demand from service industry workers [71] - A weaker Japanese Yen led to a decrease in proprietary investment revenue of approximately 11.3% to approximately HK$9.0 million [71] Profit for the Period In Q3 FY2022, administrative and operating expenses were comparable to the prior year, and finance costs slightly decreased; the reduction in underlying profit was mainly due to lower revenue and the absence of government subsidies, while reported profit increased due to no net fair value decrease on investment properties this period - Administrative and operating expenses were comparable to the prior period [72] - Finance costs slightly decreased, primarily due to lower Hong Kong Dollar loan interest rates and reduced Japanese Yen loan interest expenses resulting from a weaker Japanese Yen [72] - The increase in reported profit was mainly due to no net fair value decrease of investment properties recorded in the third quarter of fiscal year 2022, whereas there was a decrease of approximately HK$2.3 million in the prior period [74] Outlook and Strategies The Group anticipates continued improvement in financial advisory services revenue within its advisory and consulting segment; for proprietary investment, the Hong Kong Central office leasing market is stabilizing, Japanese property occupancy rates are expected to improve, but a weak Japanese Yen may adversely affect revenue and HKD profits, with overall proprietary investment portfolio revenue projected to remain stable - For advisory and consulting services, financial advisory services revenue is expected to continue its improving trend in the coming quarter [75] - The office leasing market in Hong Kong's Central business district is stabilizing, with increased leasing activity and ongoing negotiations for renewal of existing leases [76] - The occupancy rate of the Japanese property portfolio is expected to improve, but the continued weakness of the Japanese Yen will adversely affect the Group's revenue and Hong Kong Dollar profits [77] - Overall, the Directors expect the Group's proprietary investment portfolio revenue to remain stable in the coming quarter [78] Other Information This section covers various other information, including directors' and substantial shareholders' interests, share repurchase activities, employee and remuneration policies, and share option/award schemes Directors' and Chief Executive's Interests and Short Positions in Shares, Underlying Shares and Debentures of the Company and its Associated Corporations As of December 31, 2021, Mr. Yip Tin Chi, Mr. Tsang Hon Pui, and Ms. Leung Cheuk Yin held shares in the Company, with Mr. Yip holding the majority through trust beneficiary status and spouse's interests; directors also held interests in the Company's associated corporations Directors' Interests in Shares of the Company (as of December 31, 2021) | Director's Name | Capacity and Nature of Interest | Number of Shares Interested (L) | Approximate Percentage of Total Issued Share Capital of the Company (%) | | :-------------- | :------------------------------ | :------------------------------ | :------------------------------------------------------ | | Mr. Yip | Beneficiary of a trust | 557,200,000 | 69.35 | | | Beneficial owner | 1,250,000 | 0.16 | | | Spouse's interest | 1,250,000 | 0.16 | | Mr. Tsang | Beneficial owner | 22,400,000 | 2.79 | | Ms. Leung | Beneficial owner | 9,400,000 | 1.17 | - Mr. Yip is deemed to be interested in 557,200,000 shares of the Company held by KHHL through his capacity as a beneficiary of The Hecico 1985 Trust [80] Directors' Interests in Associated Corporations of the Company (as of December 31, 2021) | Name | Name of Associated Corporation | Capacity and Nature of Interest | Number of Shares Interested (L) | Approximate Percentage of Equity (%) | | :-------- | :----------------------------- | :------------------------------ | :------------------------------ | :----------------------------------- | | Mr. Yip | KHHL | Beneficiary of a trust | 204 | 80.0 | | | I Corporation | Spouse's interest | 14 | 20.0 | | Ms. Leung | Residence | Beneficial owner | 20 | 0.33 | | Mr. Tsang | Residence | Beneficial owner | 10 | 0.17 | Directors' Rights to Acquire Shares or Debentures For the nine months ended December 31, 2021, neither the Company nor its subsidiaries or associated corporations entered into any arrangements enabling directors and chief executives to acquire benefits by purchasing shares, underlying shares, or debentures of the Company or its associated corporations, except for share option schemes - Neither the Company nor its subsidiaries or associated corporations entered into any arrangements during the nine months ended December 31, 2021, to enable directors and chief executives to acquire benefits by purchasing shares, underlying shares, or debentures of the Company or any of its associated corporations, except for share option schemes [85] Substantial Shareholders' and Other Persons' Interests and Short Positions in Shares and Underlying Shares of the Company and Interests of Relevant Persons in Other Group Members As of December 31, 2021, Flying Castle Limited, KHHL, the Trustee, Ms. Chan, Mr. Yip, Ms. Yip, and Ms. Ho were all deemed interested in 557,200,000 shares of the Company, representing approximately 69.35% of the issued share capital, with Yuanta Asia Investment Limited holding 5.51%; additionally, Ms. Ho, Mr. Henry Shih, and Mr. Lo Yuen Tik also held interests in other Group members Substantial Shareholders' Interests in Shares of the Company (as of December 31, 2021) | Shareholder Name/Entity | Capacity and Nature of Interest | Number of Shares Interested (L) | Approximate Percentage of Total Issued Share Capital of the Company (%) | | :-------------------------------- | :------------------------------ | :------------------------------ | :------------------------------------------------------ | | Flying Castle Limited | Beneficial owner | 557,200,000 | 69.35 | | KHHL | Interest in controlled corporation | 557,200,000 | 69.35 | | The Trustee | Trustee | 557,200,000 | 69.35 | | Ms. Chan | Founder of discretionary trust | 557,200,000 | 69.35 | | | Beneficial owner | 1,250,000 | 0.16 | | Mr. Yip | Beneficiary of a trust | 557,200,000 | 69.35 | | | Beneficial owner | 1,250,000 | 0.16 | | | Spouse's interest | 1,250,000 | 0.16 | | Ms. Yip | Beneficiary of a trust | 557,200,000 | 69.35 | | | Beneficial owner | 1,250,000 | 0.16 | | Ms. Ho | Spouse's interest | 558,450,000 | 69.50 | | | Beneficial owner | 1,250,000 | 0.16 | | Yuanta Asia Investment Limited | Beneficial owner | 44,250,000 | 5.51 | Interests of Other Persons in Group Members (as of December 31, 2021) | Shareholder Name | Name of Group Member Company | Capacity and Nature of Interest | Number of Shares Interested (L) | Percentage of Equity (%) | | :--------------- | :--------------------------- | :------------------------------ | :------------------------------ | :----------------------- | | Ms. Ho | I Corporation | Beneficial owner | 14 | 20.0 | | Mr. Henry Shih | Smart Tact | Beneficial owner | 922 | 10.0 | | | Residence | Beneficial owner | 600 | 10.0 | | | Lynton Gate Limited | Beneficial owner | 1 | 10.0 | | | EXE | Beneficial owner | 12 | 10.0 | | Mr. Lo Yuen Tik | Residence | Interest in controlled corporation | 600 | 10.0 | Sufficiency of Public Float For the nine months ended December 31, 2021, the Company maintained the public float as required by the GEM Listing Rules - The Company maintained the public float as required by the GEM Listing Rules throughout the nine months ended December 31, 2021 [93] Purchase, Sale or Redemption of the Company's Listed Securities For the nine months ended December 31, 2021, the Company repurchased 500,000 ordinary shares on GEM of the Stock Exchange for a total consideration of approximately HK$100 thousand, which were all cancelled, with Directors believing the repurchase benefited the Company and its shareholders Share Repurchase Details (for the nine months ended December 31, 2021) | Month | Number of Ordinary Shares | Highest Price Paid Per Share (HK$) | Lowest Price Paid Per Share (HK$) | Approximate Total Consideration (HK$ Thousand) | | :------------ | :------------------------ | :--------------------------------- | :-------------------------------- | :--------------------------------------------- | | November 2021 | 500,000 | 0.202 | 0.2 | 101 | - The 500,000 ordinary shares repurchased were all cancelled on December 31, 2021, with the total consideration of approximately HK$100 thousand paid from the Company's reserves [94] - The Directors believe that the share repurchase will be beneficial to the Company and its shareholders [94] Employees and Remuneration Policy As of December 31, 2021, the Group had 20 employees, with a remuneration policy considering duties, experience, skills, and company performance, benchmarked against comparable companies, including monthly salaries, discretionary bonuses, share awards, provident fund contributions, medical insurance, and other benefits - As of December 31, 2021, the Group had 20 employees (prior period of 2020: 23 employees) [96] - The remuneration policy considers duties, responsibilities, experience, skills, time commitment, and the Group's performance, and is formulated with reference to remuneration of comparable companies [96] - Employee benefits include monthly salaries, discretionary bonuses, share awards, provident fund contributions, medical insurance, and other allowances and benefits [96] Share Option Scheme The Company adopted a share option scheme in 2016 with a ten-year validity, and no share options were granted or remained outstanding during the nine months ended December 31, 2021, up to the report date - The Company adopted a share option scheme on September 26, 2016, by shareholder resolution, with a validity period of ten years [97] - No share options were granted or remained outstanding during the nine months ended December 31, 2021, and up to the date of this report [97] Share Awards Details of the Group's share awards are provided in Note 11 to the condensed consolidated financial statements - Details of the Group's share awards are set out in Note 11 to the condensed consolidated financial statements [99] Corporate Governance This section outlines the Company's adherence to corporate governance standards, including compliance, directors' securities transactions, competing interests, loan agreements, and the composition and responsibilities of the Audit Committee and Board of Directors Corporate Governance Compliance The Company complied with GEM Listing Rules 17.22 and 17.24, providing no advances to entities or affiliates, and the Board confirmed the Group's compliance with the Corporate Governance Code in Appendix 15 of the GEM Listing Rules for the nine months ended December 31, 2021 - The Company complied with Rules 17.22 and 17.24 of the GEM Listing Rules, having provided no advances to any entities or affiliates [100] - The Company's substantial shareholders have not pledged any of their shares [100] - The Board is satisfied that the Group complied with the code provisions of the Corporate Governance Code set out in Appendix 15 to the GEM Listing Rules for the nine months ended December 31, 2021 [100] Directors' Securities Transactions The Company adopted the dealing standards in GEM Listing Rules 5.48 to 5.67 as the code of conduct for directors' securities transactions, and all directors confirmed compliance during the nine months ended December 31, 2021, and up to the report date - The Company adopted the dealing standards set out in Rules 5.48 to 5.67 of the GEM Listing Rules as the code of conduct for directors' securities transactions [101] - Following enquiry, each Director confirmed compliance with the required dealing standards throughout the nine months ended December 31, 2021, and up to the date of this report, with no non-compliance incidents [101] Competing Interests As of December 31, 2021, no directors, substantial shareholders, or their respective associates held any interests in businesses that directly or indirectly compete or may compete with the Group's business - As of December 31, 2021, no directors, substantial shareholders of the Company, or their respective associates had any interests in businesses that directly or indirectly compete or may compete with the Group's business [102] Loan Agreement with Covenants Relating to Specific Performance by Controlling Shareholder The Group entered into a loan agreement with Dah Sing Bank Limited, which includes covenants requiring Mr. Yip Tin Chi, the controlling shareholder, to remain as Chairman and maintain control over management and operations, with his beneficial interest in the Company to be no less than 60.0% - The Group entered into a loan agreement with Dah Sing Bank Limited for a HK$60,000,000 revolving loan facility [103] - The loan agreement requires Mr. Yip to remain as Chairman of the Board and continue to control the Company's management and business [103] - Mr. Yip's beneficial interest in the Company shall remain no less than 60.0% [103] Audit Committee The Audit Committee, comprising three independent non-executive directors chaired by Mr. Chan Sun Kwong, is responsible for reviewing and overseeing the Group's financial reporting, risk management, and internal control systems, and has reviewed the unaudited consolidated results for the nine months ended December 31, 2021 - The Audit Committee is established in accordance with the GEM Listing Rules and the Corporate Governance Code, comprising three independent non-executive directors, with Mr. Chan Sun Kwong as Chairman [105] - Its primary responsibilities include reviewing and overseeing financial reporting procedures, risk management, and internal control systems, as well as monitoring continuing connected transactions [105] - The Audit Committee has reviewed the Group's unaudited consolidated results for the nine months ended December 31, 2021, and confirmed their preparation in compliance with applicable accounting principles and requirements [105] Board of Directors As of the report date, the Board of Directors comprises three executive directors (Mr. Yip Tin Chi, Mr. Tsang Hon Pui, Ms. Leung Cheuk Yin) and three independent non-executive directors (Mr. Chiu Tin Yuk, Mr. Chan Sun Kwong, Mr. Lee Shu Yuen) - The Board of Directors includes executive directors Mr. Yip Tin Chi, Mr. Tsang Hon Pui, and Ms. Leung Cheuk Yin [106] - The Board of Directors includes independent non-executive directors Mr. Chiu Tin Yuk, Mr. Chan Sun Kwong, and Mr. Lee Shu Yuen [106]