eprint Group Limited — Annual Report 2021

Jun 24, 2021

Hong Kong Exchanges and Clearing Limited and The Stock Exchange of Hong Kong Limited take no responsibility for the contents of this announcement, make no representation as to its accuracy or completeness and expressly disclaim any liability whatsoever for any loss howsoever arising from or in reliance upon the whole or any part of the contents of this announcement.

==> picture [144 x 40] intentionally omitted <==

eprint GROUP LIMITED eprint 集團有限公司

(Incorporated in the Cayman Islands with limited liability)

(Stock code: 1884)

ANNUAL RESULTS ANNOUNCEMENT FOR THE YEAR ENDED 31 MARCH 2021

FINANCIAL HIGHLIGHTS

	For the year ended	For the year ended
	31 March
	2021	2020
	HK$’million	HK$’million	Change
Operating Results
Revenue	266.9	365.8	-27.0%
– e-print segment	210.4	282.3	-25.5%
– e-banner segment	56.5	83.5	-32.3%
Operating profit before other gains/(losses)
including impairment losses on financial assets – net	19.6	15.5	26.5%
– e-print segment	19.3	14.5	33.1%
– e-banner segment	0.3	1.0	-70.0%
Other gains/(losses) including impairment losses on
financial assets – net	0.7	(9.6)	-107.3%
– e-print segment	0.8	(9.6)	-108.3%
– e-banner segment	(0.1)	0.0	N/A
Operating profit	20.3	5.9	244.1%
– e-print segment	20.3	4.9	314.3%
– e-banner segment	0.0	1.0	-100.0%
Profit for the year attributable to
– equity holders of Company	19.0	5.7	233.3%
– non-controlling interests	0.3	(0.2)	-250.0%

1

	For the year ended	For the year ended
	31 March
	2021	2020	Change
Net profit margin % (Attributable to equity holders of
the Company)	7.1%	1.6%
Gross profit margin %	38.7%	34.8%
Basic earnings per share (HK Cents)	3.46	1.03	235.9%
	As at 31 March
	2021	2020
	HK$’million	HK$’million	Change
Financial Position
Total assets	331.2	327.6	1.1%
Total equity	250.7	230.0	9.0%
Cash and cash equivalents	106.6	101.5	5.0%

2

The board (the “ Board ”) of directors (the “ Directors ”) of eprint Group Limited (the “ Company ”) announces the consolidated results of the Company and its subsidiaries (collectively, the “ Group ”) for the year ended 31 March 2021, together with the comparative figures for the year ended 31 March 2020, are as follows:

CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME

For the year ended 31 March 2021

Note Revenue 2 Cost of sales 5 Gross profit Other income 3 Other gains/(losses) – net 4 Selling and distribution expenses 5 Administrative expenses 5 Impairment losses on financial assets Operating profit Finance income 6 Finance costs 6 Finance income – net 6 Share of (losses)/profits of associates Share of profits of joint ventures Profit before income tax Income tax expense 7 Profit for the year Other comprehensive income/(loss): Items that may be reclassified to profit or loss: Release of exchange reserve to profit or loss upon closure of an associate Currency translation differences Total comprehensive income for the year	2021 HK$’000	2020 HK$’000 365,801 (238,500) 127,301 2,339 (8,506) (33,340) (80,787) (1,117) 5,890
	266,902
	(163,649)
	103,253
	2,665
	1,414
	(25,570)
	(60,802)
	(685)
	20,275
		2,902 (2,090) 812
	3,333
	(1,553)
	1,780
		249 1,648 1,897
	(1,441)
	375
	(1,066)
		8,599 (3,153) 5,446 – (1,551) 3,895
	20,989
	(1,650)
	19,339
	171
	1,140
	20,650

3

Note Profit/(loss) for the year attributable to: – Equity holders of the Company – Non-controlling interests Earnings per share for profit attributable to equity holders of the Company during the year – Basic and diluted (expressed in HK cents per share) 8 Total comprehensive income/(loss) for the year attributable to: – Equity holders of the Company – Non-controlling interests	2021 HK$’000	2020 HK$’000 5,688 (242) 5,446 1.03 4,224 (329) 3,895
	19,009
	330
	19,339
	3.46
	20,297
	353
	20,650

4

CONSOLIDATED STATEMENT OF FINANCIAL POSITION

As at 31 March 2021

Note Assets Non-current assets Property, plant and equipment Right-of-use assets Intangible assets Other financial assets at amortised cost Investments in associates Investments in joint ventures Deferred income tax assets Deposits and prepayments Current assets Inventories Trade receivables 9 Deposits, prepayments and other receivables Other financial assets at amortised cost Financial assets at fair value through profit or loss Amounts due from related companies Cash and cash equivalents Total assets Equity Capital and reserves attributable to the equity holders of the Company Share capital Share premium Other reserves Non-controlling interests Total equity	2021 HK$’000 101,106 20,206 725 33,643 681 13,078 3,059 770 173,268 6,614 4,982 8,335 11,953 19,185 250 106,565 157,884 331,152 5,500 132,921 105,727 244,148 6,507 250,655	2020 HK$’000 108,365 38,151 725 833 2,407 11,792 2,134 2,921 167,328
		6,804 4,168 9,184 12,965 25,469 159 101,525 160,274
		327,602 5,500 132,921 85,430 223,851 6,154 230,005

5

Note Liabilities Non-current liabilities Lease liabilities Other payables Deferred income tax liabilities Current liabilities Trade payables 10 Accruals and other payables Borrowings 11 Lease liabilities Amounts due to related parties Amounts due to directors Current income tax payable Total liabilities Total equity and liabilities	2021 HK$’000 2,053 470 6,009 8,532 7,186 26,005 19,904 17,513 201 165 991 71,965 80,497 331,152	2020 HK$’000 17,004 766 6,348 24,118
		5,998 24,596 21,157 20,200 201 165 1,162 73,479
		97,597
		327,602

6

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

1 BASIS OF PREPARATION

The consolidated financial statements of the Company have been prepared in accordance with Hong Kong Financial Reporting Standards (“HKFRS”) issued by Hong Kong Institute of Certified Public Accountants (“HKICPA”) and disclosure requirements of the Hong Kong Companies Ordinance (Cap. 622).

The consolidated financial statements have been prepared under the historical cost convention, as modified by the revaluation of financial assets at fair value through profit or loss, which are carried at fair value.

The preparation of financial statements in conformity with HKFRS requires the use of certain critical accounting estimates. It also requires management to exercise its judgement in the process of applying the Group’s accounting policies.

1.1 Changes in accounting policy and disclosures

• (a) Amended standards and revised conceptual framework adopted by the Group

The Group has applied the following amendments and revised conceptual framework for the financial year beginning 1 April 2020 and are relevant to its operations:

Amendments to HKAS 1 and HKAS 8 Definition of material Amendments to HKAS 39, Interest rate benchmark reform HKFRS 7 and HKFRS 9 Amendments to HKFRS 3 Definition of a business Amendments to HKFRS 16 (Note) COVID-19 related rent concessions Conceptual Framework for Revised conceptual framework for financial reporting Financial Reporting 2018

Note:

HKFRS 16 (Amendment), “COVID-19 – related Rent Concessions” (effective for annual periods beginning on or after 1 June 2020, early application of the amendments is permitted). The Group has early adopted Amendments to HKFRS 16 from 1 April 2020. The amendment provides lessees with exemption from assessing whether COVID-19 – related rent concession is a lease modification and requires lessees that apply the exemption to account for COVID-19– related rent concession as if they were not lease modifications. In applying HKFRS 16 (Amendment) for the first time, the Group has applied the practical expedient and elected not to assess whether COVID-19 – related rent concession is a lease modification. All of the COVID-19 – related rent concessions amounted to HK$166,000 has been credited to the profit or loss within “other gains/ (losses) – net”.

The amendments and conceptual framework listed above did not have any impact on the amounts recognised in prior periods and are not expected to significantly affect the current or future periods.

7

• (b) New standard, amendments, annual improvement, interpretation and revised guideline which are not yet effective for this financial period and have not been early adopted by the Group

Certain new accounting standards, amendments to existing standards and annual improvements have been published that are not mandatory for 31 March 2021 reporting periods and have not been early adopted by the Group.

		Effective for annual
		periods beginning on
		or after
Amendments to annual	Annual improvements 2018-2020 cycle	1 April 2022
improvements project
Amendments to HKAS 1	Presentation of financial statements on	1 April 2023
	classification of liabilities
Amendments to HKAS 1 and	Disclosure of accounting policies	1 April 2023
Practice Statement 2
Amendments to HKAS 8	Definition of accounting estimates	1 April 2023
Amendments to HKAS 16	Property, plant and equipment: Proceeds	1 April 2022
	before intended use
Amendments to HKAS 37	Onerous contracts: Costs of fulfilling a	1 April 2022
	contract
Amendments to HKFRS 3	Reference to the conceptual framework	1 April 2022
Amendments to HKFRS 9,	Interest rate benchmark Reform – Phase 2	1 April 2021
HKAS 39, HKFRS 7, HKFRS 4
and HKFRS 16
Amendments to HKFRS 10 and	Sale or contribution of assets between an	Note
HKAS 28	investor and its associate or joint venture
Amendments to HKFRS 16	Covid-19 – Related rent concessions beyond	1 April 2021
	30 June 2021
HKFRS 17	Insurance contracts	1 April 2023
Hong Kong Interpretation 5 (2020)	Presentation of financial statements	1 April 2023
Revised Accounting Guideline 5	Merger accounting for common control	1 April 2022
	combination

Note: To be announced by HKICPA

The Group will adopt the new standards, amendments, annual improvement, interpretation and revised guideline when they become effective. The Group is in the process of assessing the adoption of the new standards, amendments, annual improvements, interpretation and revised guideline and it is not expected to have any significant impact on the results and the financial position of the Group.

8

2 SEGMENT INFORMATION

The chief operating decision-maker has been identified as the Executive Directors of the Company. The chief operating decision-maker has determined the operating segments based on the reports reviewed by the Executive Directors of the Company, that are used to make strategic decisions and assess performance.

The chief operating decision-maker has determined the operating segments based on these reports. The Group is organised into two business segments:

• (a) paper printing segment (mainly derived from the brand “e-print”); and

• (b) banner printing segment (mainly derived from the brand “e-banner”).

Operating segments are reported in a manner consistent with the internal reporting provided to the chief operating decision-maker.

Management assesses the performance of the operating segments based on a measure of gross profit less selling and distribution expenses and administrative expenses that are allocated to each segment. Other information provided is measured in a manner consistent with that in the consolidated financial statements.

Sales between segments are carried out at arm’s length basis.

The subsidiary incorporated in the People’s Republic of China (the “PRC”) provides I.T. support services within the Group. The subsidiary incorporated in Malaysia generated immaterial external revenue during the year. Since the Group mainly operates in Hong Kong and the Group’s assets are mainly located in Hong Kong, no geographical segment information is presented.

Information relating to segment liabilities is not disclosed as such information is not regularly reported to the chief operating decision-maker.

Revenue for the year consists of the revenue from paper printing and banner printing. The Group derives all revenue from the sale of goods at a point in time.

9

During the years ended 31 March 2021 and 2020, no external customers contributed over 10% of the Group’s revenue.

a) Segment revenue and results

The following tables present revenue and segment results regarding the Group’s reportable segments for the years ended 31 March 2021 and 2020 respectively.

For the year ended 31 March 2021:

Segment revenue Revenue from external customers1 Inter-segment revenue Total Segment results Unallocated: Finance income Finance costs Share of losses of associates Share of profits of joint ventures Profit before income tax Income tax expense Profit for the year Other information: Impairment losses on financial assets Depreciation of property, plant and equipment Depreciation of right-of-use assets Capital expenditure	Paper printing HK$’000 210,438 610 211,048 20,311 156 10,237 12,944 5,187	Banner printing HK$’000 56,464 34 56,498 (36) 529 1,148 7,495 2,109	Eliminations HK$’000 – (644) (644)	Total HK$’000 266,902 – 266,902 20,275 3,333 (1,553) (1,441) 375 20,989 (1,650) 19,339 685 11,385 20,439 7,296

10

For the year ended 31 March 2020:

Segment revenue Revenue from external customers1 Inter-segment revenue Total Segment results Unallocated: Finance income Finance costs Share of profits of associates Share of profits of joint ventures Profit before income tax Income tax expense Profit for the year Other information: Impairment losses on financial assets Depreciation of property, plant and equipment Depreciation of right-of-use assets Capital expenditure	Paper printing HK$’000 282,257 378 282,635 4,897 807 10,381 15,485 11,566	Banner printing HK$’000 83,544 107 83,651 993 310 3,220 5,653 5,438	Eliminations HK$’000 – (485) (485)	Total HK$’000 365,801 – 365,801 5,890 2,902 (2,090) 249 1,648 8,599 (3,153) 5,446 1,117 13,601 21,138 17,004

1 Included revenue of approximately HK$8,542,000 (2020: HK$10,813,000) derived from shipping service.

11

b) Segment assets

				Paper	Banner
				printing	printing	Total
				HK$’000	HK$’000	HK$’000
As at	31	March	2021	175,751	35,077	210,828
As at	31	March	2020	172,674	39,204	211,878

A reconciliation of segment assets to total assets is provided as follows:

Segment assets Investment in associates Investment in joint ventures Cash and cash equivalent 3 OTHER INCOME Scrap sales Government grant Sales of software Others 4 OTHER GAINS/(LOSSES) – NET Losses on disposals of property, plant and equipment Exchange losses – net Losses on closure of an associate Fair value gains/(losses) on financial assets at fair value through profit or loss Others	2021 HK$’000 210,828 681 13,078 106,565 331,152 2021 HK$’000 1,438 544 297 386 2,665 2021 HK$’000 (528) (58) (171) 1,938 233 1,414	2020 HK$’000 211,878 2,407 11,792 101,525
		327,602
		2020 HK$’000 1,552 318 297 172
		2,339
		2020 HK$’000 (1,325) (267) – (6,922) 8
		(8,506)

12

5 EXPENSES BY NATURE

Expenses included in cost of sales, selling and distribution expenses and administrative expenses are analysed as follows:

Cost of materials Auditor’s remuneration – Audit services – Non-audit services Employee benefits expense Depreciation of property, plant and equipment Depreciation of right-of-use assets Outsourced customer support expenses Subcontracting fee Operating lease for short-term and low value lease Repairs and maintenance Distribution costs Utility expenses Others Total cost of sales, selling and distribution expenses and administrative expenses	2021 HK$’000 49,366 1,080 250 59,728 11,385 20,439 16,738 58,004 2,762 2,686 11,931 2,327 13,325 250,021	2020 HK$’000 54,551 1,107 277 84,226 13,601 21,138 21,608 111,288 4,345 3,177 15,910 3,566 17,833
		352,627

Others mainly represent credit card handling charges, advertising and promotion expenses and telecommunication expenses.

6 FINANCE INCOME – NET

	2021	2020
	HK$’000	HK$’000
Finance income
– Interest income from loan receivables	2,700	1,215
– Interest income from bank deposits	401	1,464
– Unwinding of interests on refundable rental deposits	232	223
	3,333	2,902
Finance costs
– Interest expenses on lease liabilities	(1,103)	(1,544)
– Interest expenses on borrowings	(450)	(546)
	(1,553)	(2,090)
Finance income – net	1,780	812

13

7 INCOME TAX EXPENSE

Current income tax – Hong Kong profits tax – PRC corporate income tax Under/(over)-provision in prior years Deferred income tax Income tax expense	2021 HK$’000 2,882 – 32 2,914 (1,264) 1,650	2020 HK$’000 3,550 35 (58)
		3,527 (374)
		3,153

Subsidiaries incorporated in Hong Kong are subject to Hong Kong profits tax at a rate of 8.25% on the estimated assessable profit up to approximately HK$2,000,000 and 16.5% on any part of the estimated assessable profit over approximately HK$2,000,000 for the years ended 31 March 2021 and 2020.

Subsidiary incorporated in the PRC is subject to PRC corporate income tax based on the statutory income tax rate of 25% for the year (2020: 25%) as determined in accordance with the relevant PRC income tax rules and regulations. The Company has not been subject to any taxation in the Cayman Islands as it does not have any assessable profit since its incorporation.

8 EARNINGS PER SHARE

(a) Basic earnings per share

Basic earnings per share is calculated by dividing the profit attributable to equity holders of the Company by the weighted average number of ordinary shares in issue for the years ended 31 March 2021 and 2020.

2021 Profit attributable to equity holders of the Company (HK$’000) 19,009 Weighted average number of ordinary shares in issue (thousands) 550,000 Basic earnings per share (HK cents) 3.46	2020 5,688 550,000
	1.03

(b) Diluted earnings per share

Diluted earnings per share is the same as the basic earnings per share for the years ended 31 March 2021 and 2020 as there were no potential dilutive ordinary shares outstanding during the years.

14

9 TRADE RECEIVABLES

Trade receivables Less: loss allowance Trade receivables – net	2021 HK$’000 5,985 (1,003) 4,982	2020 HK$’000 4,493 (325
		4,168

Notes:

• (i) The directors of the Company apply the simplified approach to provide for expected credit losses prescribed by HKFRS 9, which permits the use of the lifetime expected loss provision for trade receivables. To measure the expected credit losses, these receivables have been grouped based on firstly shared credit risk characteristics and then aging from billing.

• (ii) As at 31 March 2021 and 2020, the maximum exposure to credit risk is the carrying amounts of trade receivables and the Group does not hold any collateral as security.

• (iii) As at 31 March 2021 and 2020, due to the short term nature of trade receivables, the directors of the Company consider that the carrying amounts of trade receivables approximate their fair values.

• (iv) As at 31 March 2021 and 2020, the carrying amounts of trade receivables are mainly denominated in Hong Kong dollars.

Payment terms granted to customers are mainly cash on delivery and on credit. The average credit period ranges from 30 days to 60 days. The ageing analysis of the gross trade receivables based on invoice date is as follows:

	2021	2020
	HK$’000	HK$’000
0 – 30 days	2,641	1,821
31 – 60 days	753	560
Over 60 days	2,591	2,112
	5,985	4,493

15

10 TRADE PAYABLES

Trade payables Notes:	2021 HK$’000 7,186	2020 HK$’000 5,998

• (i) Payment terms granted by suppliers are mainly on credit. The credit period ranges from 30 to 90 days.

• (ii) As 31 March 2021, all trade payables of the Group were non-interest bearing, and their carrying amounts approximated their fair values due to short maturities.

• (iii) The carrying amounts of the Group’s trade payables are mainly denominated in Hong Kong dollars.

The ageing analysis of the trade payables based on invoice date was as follows:

0 – 30 days 31 – 60 days 61 – 90 days Over 90 days	2021 HK$’000 6,222 646 318 – 7,186	2020 HK$’000 4,091 1,265 – 642
		5,998

11 BORROWINGS

Current Trust receipt loans Bank loans	2021 HK$’000 961 18,943 19,904	2020 HK$’000 1,208 19,949
		21,157

Notes:

• (i) The borrowings of the Group are subject to financial covenants and the Group is in compliance with the financial covenants as at 31 March 2021 and 2020.

• (ii) As at 31 March 2021, the borrowings of the Group were secured by personal guarantees provided by a related party of the Group. Included in bank loans to the extent of approximately HK$18,943,000 (2020: HK$19,949,000) are mortgage loans which are secured by properties of the Group of approximately HK$58,078,000 (2020: HK$60,290,000).

16

• (iii) The carrying amount of bank borrowings approximate their fair value as the interest payable on these borrowings is either close to current market rates or the borrowings are of a short-term nature.

• (iv) The carrying amounts of borrowings are denominated in Hong Kong dollars as at 31 March 2021 and 2020.

The table below analyses the Group’s borrowings into relevant maturity groups based on the scheduled repayment dates set out in the loan agreements and ignore the effect of any repayment on demand clause:

Within 1 year Between 1 and 2 years Between 2 and 5 years Over 5 years	2021 HK$’000 1,987 1,049 3,294 13,574 19,904	2020 HK$’000 2,212 1,026 3,220 14,699
		21,157

Note:

Bank borrowings contained a repayment on demand clause which enables the bank to exercise at its sole discretion. Accordingly, the entire balance was classified under current liabilities.

12 DIVIDENDS

No dividends paid for the year ended 31 March 2021 (For the year ended 31 March 2020, the dividend paid was amounted to approximately HK$8,800,000).

No dividend in respect of the year ended 31 March 2021 has been declared as of the date of approval of these consolidated financial statements (2020: Nil).

17

MANAGEMENT DISCUSSION AND ANALYSIS

BUSINESS REVIEW

The Company is an investment holding company principally engaged in the provision of printing services to a diversified customer base in Hong Kong. The Company is also engaged in the provision of solutions on advertisement, bound books and stationeries.

The Board presents to its shareholders the result of the Group for the year ended 31 March 2021. In the current financial year, affected by the COVID-19 and the macroeconomic downturn, the Group’s revenue decreased by 27.0%, from HK$365.8 million to HK$266.9 million. Although the revenue dropped, the gross profit margin was increased from 34.8% to 38.7% as the cost of sales decreased in a higher degree.

The Group’s audited profit attributable to equity holders for the year ended 31 March 2021 was HK$19.0 million, representing an increase of 233.3% when compared with last year. The increasing net profit was mainly attributed to (i) effective cost control measures implemented by the Group which resulted in the decrease in expenses, (ii) material increase in fair value gain from investments held by the Group measured at fair value through profit or loss and (iii) receipt of subsidies under the Employment Support Scheme of the Government of the Hong Kong Special Administrative Region.

For the year ended 31 March 2021 (“FY2020/21”) and for the year ended 31 March 2020 (“FY2019/20”), the revenue of the Group’s paper printing segment were approximately HK$210.4 million and HK$282.3 million respectively, representing a decrease of HK$71.9 million or 25.5%. Affected by the coronavirus outbreak and the macroeconomic downturn, the sales volume for the year ended 31 March 2021 declined as compared with that of the year ended 31 March 2020. The advertising printing was still the major contributor of the segment’s revenue and recorded the amount of HK$82.8 million, representing 31.0% to the revenue for the year. The segment’s gross profit margin has been increased from 34.2% to 38.7%, and the major reason was that the cost control on subcontracting fee which was decreased by 47.9%.

For the Group’s banner printing segment, similar to paper printing segment, the revenue decreased by HK$27.0 million or 32.3%. Subject to above mentioned drop in market demand, the revenue decreased during the year.

18

OUTLOOK

During FY2020/21, the business environment and operation of the Group was still challenging and difficult, both printing business and banner business were suffered from the impact of COVID-19 and the macroeconomic downturn, and thus the sales volume was declined during the reporting period. In the coming period, the management expects that the operating environment in Hong Kong will remain challenging and uncertain. With the unfavorable conditions, the Group will continue to closely monitor the changing of the business environment and implement the measures in order to overcome the challenges to maintain the profitability and maximise the shareholder’s value. In addition, the Company will continuity proactively to explore different business opportunities for business development through diversifying the business portfolio into new businesses.

Under the leadership of the Board, the management of the Group has formed a broad consensus in response to the key improvement areas in the existing business operation and market expansion in order to further enhance the Group’s overall competitiveness. The Group will continue to strengthen its market position and increase its market share by adopting the following approaches:

• Strengthening the cost control to maintain the competitive pricing strategy.

• Developing the new business line and customised products and services to meet the market demand.

• Continuously effort to improve the value added services, including but not limited to the e-print app, self – service Platform, phone ordering system, self checkout and collecting counters and the storage and delivery system.

19

FINANCIAL REVIEW

Revenue

Revenue from the provision of printing and other services significantly decreased by HK$98.9 million or 27.0% from HK$365.8 million to HK$266.9 million. The overall market demand was impacted by the macroeconomic downturn and coronavirus outbreak, and thus the sales volume of the Group declined during FY2020/21.

The following table sets forth a breakdown of the revenue by service category and their respective percentage of the total revenue for the years indicated.

	2021		2020
	HK$’000		HK$’000
Advertising printing	82,829	31.0%	114,129	31.2%
Bound book printing	53,831	20.2%	80,910	22.1%
Stationery printing	60,228	22.6%	73,139	20.0%
Banner printing	50,183	18.8%	73,212	20.0%
Other services	19,831	7.4%	24,411	6.7%
Total	266,902	100%	365,801	100%

The contribution to the sales mix remained stable. The advertising printing was still the major contributor of the revenue, which accounted for 31.0% of the total revenue for FY2020/21.

	2021		2020
Sales Channels	HK$’000		HK$’000
Stores	46,094	17.3%	61,997	16.9%
Websites	147,606	55.3%	192,257	52.6%
Others (Note)	73,202	27.4%	111,547	30.5%
Total	266,902	100%	365,801	100%

Note: “Others” refers to revenue derived from orders received over the telephone, through e-mail, e-print mobile application and “Photobook” program.

Websites remained the major sales channel and it contributed 55.3% of total revenue for FY2020/21, represented an increase of 2.7% when compared with last year. The sales contributed by stores increased from 16.9% for FY2019/20 to 17.3% to FY2020/21.

20

Other income

Other income of the Group mainly consisted of sales of scrap materials. The Group’s other income slightly increased from HK$2.3 million in FY2019/20 to HK$2.7 million in FY2020/21, representing an increase of HK$0.4 million.

Other gains/(losses) – net

For FY2020/21, the Group recorded a net gain of HK$1.4 million, representing an increase of HK$9.9 million as compared to a net loss of HK$8.5 million for FY2019/20. The gain in FY2020/21 was mainly attributable to the fair value gain of HK$1.9 million on the mutual fund investments held by the Group during FY2020/21 while the material loss in FY2019/20 was arising from the fair value loss of approximately HK$5.3 million on the listed equity investment held by the Group which was caused by significant decrease in the share price of SingAsia Holdings Limited.

Selling and distribution expenses

Selling and distribution expenses mainly consisted of staff costs, handling charges for electronic payments, and rental charges. Selling and distribution expenses represented 9.6% and 9.1% of the revenue for FY2020/21 and FY2019/20 respectively. The decrease of HK$7.8 million was the result of the decreased staff cost of HK$4.3 million.

Administrative expenses

Administrative expenses mainly included staff costs and outsourced customer support expenses. Administrative expenses represented 22.8% and 22.1% of the total revenue for FY2020/21 and FY2019/20 respectively. The amount decreased by HK$20.0 million from HK$80.8 million for FY2019/20 to HK$60.8 million for FY2020/21. The overall decrease in expenses was the result of decreased staff costs and outsourced customer support expenses.

Finance income

Finance income mainly represented the interest income generated from the loan receivables and bank interest income. The income increased by HK$0.4 million or 14.9% as the Group allocated more funds to the loans receivables in which the interest rate of loan receivables was favourable than that of bank during FY2020/21.

Finance costs

Finance costs primarily consisted of interest expenses on bank borrowings and interest expenses on lease liabilities. The overall decrease in finance cost by HK$0.5 million or 25.7% was mainly due to the drop in interest expenses on lease liabilities in the amount of HK$0.4 million for FY2020/21.

21

Share of profits of joint ventures

Share of profits of joint ventures represented the share of results of the Group’s joint ventures. As at 31 March 2021, the Group had two joint ventures in Malaysia and Hong Kong, namely e-print Solutions Sdn. Bhd and Top Success Investment Group Limited respectively.

During FY2020/21, the operation of e-print Solutions Sdn. Bhd was suffered from the coronavirus outbreak, and thus, the sales volume and revenue declined as compared with that of FY2019/20 in which leaded to the overall decrease in share of profits of joint ventures.

Share of losses of associates

The amount represented the share of results of the Group’s associates in Hong Kong, which are Sakura Japan Property (Hong Kong) Limited and E-post Limited respectively.

The share of losses of associates was mainly due to the drop in sales volume and revenue which was affected by the coronavirus outbreak and the macroeconomic downturn during the financial year.

Profit for the year attributable to equity holders of the Company

Profit for the year attributable to equity holders of the Company increased by HK$13.3 million or 233.3%, from HK$5.7 million for FY2019/20 to HK$19.0 million for FY2020/21. The increase in the profit for the year attributable to equity holders of the Company was mainly due to the fair value gain of approximately HK$1.9 million on the mutual fund investments held by the Group during FY2020/21 and the decrease in the operating costs of the Group compared with that of same period of last year.

Liquidity and Financial Information

As at 31 March 2021, the Group’s bank balances and cash was HK$106.6 million, represented an increase of HK$5.0 million when compared with that as at 31 March 2020. As at 31 March 2021 and 31 March 2020, the financial ratios of the Group were as follows:

		As at	As at
	31	March	31 March
		2021	2020
Current ratio(1)		2.2	2.2
Gearing ratio(2)		15.7%	25.4%

Notes:

• (1) Current ratio is calculated based on total current assets divided by total current liabilities.

• (2) Gearing ratio is calculated based on total bank borrowings and leases liabilities divided by total equity and multiplied by 100%.

22

Borrowings

The Group’ bank borrowings balance as at 31 March 2021 and 31 March 2020 were HK$19.9 million and HK$21.2 million respectively. All bank borrowings were made from banks in Hong Kong and were repayable within one year, except a mortgage loan with the carrying amount of HK$18.9 million which will be matured in 2036. No financial instruments were used for hedging purposes, nor were there any foreign currency net investments hedged by current borrowings and/ or other hedging instruments. The weighted average interest rates (per annum) were 2.3% for FY2020/21 and FY2019/20.

Treasury Policies

The Group has adopted a prudent financial management approach towards its treasury policies and thus maintained a healthy liquidity position throughout the year. The Board closely monitors the Group’s liquidity position to ensure that the liquidity structure of the Group’s assets, liabilities and other commitments can meet its funding requirements from time to time. Surplus cash will be invested to meet the Group’s cash need in support of the Group’s strategy direction from time to time.

Capital Structure

The capital of the Company comprises ordinary shares and other reserves. The shares of the Company have been listed on the Main Board of the Stock Exchange since 3 December 2013. As at 31 March 2021, the total number of issued ordinary shares of the Company was 550,000,000 shares.

Capital Commitments

As at 31 March 2021, the Group did not have capital commitments.

Significant Investments Held

In addition to the investments in subsidiaries, joint venture and associates, the Group also hold some investments including equity investment of the Company listed on the Stock Exchange, mutual fund investments, bonds and etc. These investments were classified as financial asset at fair value through profit or loss.

Future Plans for Material Investments and Capital Assets

The Group did not have plans for material investments and capital assets as at 31 March 2021.

Material Acquisitions or Disposal

The Group did not have any material acquisition or disposal of associates, joint ventures or subsidiaries for FY2020/21.

23

Exposure to Foreign Exchange Risk

The Group operates principally in Hong Kong and its business is supported by an information technology support services centre located in the PRC. The Group is exposed to foreign exchange risk mainly arising from the exposure of Renminbi against Hong Kong dollars. The Group does not hedge its foreign exchange risk as its exposure to foreign exchange risk is low as the Group’s cash flows mainly denominated in Hong Kong dollars.

Charge of Assets

At 31 March 2021 and 2020, the Group pledged the plant and machinery with a carrying value of HK$2.7 million and HK$4.3 million respectively, as collaterals to secure the Group’s leases liabilities. As at 31 March 2021 and 2020, the Group pledged two properties with the total carrying value of HK$58.1 million and HK$60.3 million respectively, as collaterals to secure the Group’s mortgage loan.

Capital Expenditure

During the year, the Group invested HK$7.3 million (2020: HK$17.0 million) in property, plant and equipment and right-of-use assets, which represented a decrease of HK$9.7 million in capital expenditure than last year.

EMPLOYEES AND EMOLUMENT POLICIES

At 31 March 2021, the Group had 302 (2020: 288) full time employees. There was no significant change in the Group’s emolument policies. On top of basic salaries, bonuses may be paid by reference to the Group’s performance as well as individual’s performance. Other staff benefits included contributions to Mandatory Provident Fund retirement benefits scheme in Hong Kong, provision of pension funds, medical insurance, unemployment insurance and other relevant insurance for employees who are employed by the Group pursuant to the PRC rules and regulations and the prevailing regulatory requirements of the PRC, and the Employees Provident Fund and contributions to Social Security Organization for employees who are employed by the Group pursuant to the Malaysian rules and regulations and the prevailing regulatory requirements of Malaysia.

FINAL DIVIDEND

The Board does not recommend the payment of final dividend for the FY2020/21 (2020: Nil).

PURCHASE, SALE OR REDEMPTION OF THE COMPANY’S LISTED SECURITIES

Neither the Company nor its subsidiaries purchased, redeemed or sold any of the Company’s listed securities during FY2020/21.

24

MODEL CODE FOR SECURITIES TRANSACTIONS BY DIRECTORS

The Company has adopted the Model Code for Securities Transactions by Directors of Listed Issuers (the “ Model Code ”) set out in Appendix 10 to the Rules Governing the Listing of Securities (the “ Listing Rules ”) on The Stock Exchange of Hong Kong Limited (the “ Stock Exchange ”) as the code of conduct regarding securities transactions by the Directors. Having made specific enquiry of all Directors, the Company confirmed that all Directors had complied with the required standard set out in the Model Code throughout the year.

CODE ON CORPORATE GOVERNANCE

The Company has adopted the code provisions set out in the Corporate Governance Code (“ CG Code ”) in Appendix 14 to the Listing Rules as its own code of corporate governance.

During FY2020/21, the Company was in compliance with the code provisions set out in the CG Code except for the deviation as explained below.

Code provision A.2.1 of the CG Code provides that the roles of the chairman and chief executive officer should be separated and should not be performed by the same individual. The Company does not at present separate the roles of the chairman and chief executive officer. Mr. She Siu Kee William is the chairman and chief executive officer of the Company. The Board believes that vesting the roles of both chairman and chief executive officer in the same person has the benefit of ensuring consistent leadership within the Group and enables more effective and efficient overall strategic planning for the Group. The Board further believes that the balance of power and authority for the present arrangement will not be impaired and is adequately ensured by the current Board which comprises experienced and high calibre individuals with sufficient number thereof being non-executive Directors and independent non-executive Directors.

Save as the aforesaid and in the opinion of the Directors, the Company had met all code provisions set out in the CG Code during FY2020/21.

The Board will continue to review and further improve the Company’s corporate governance practices and standards, so as to ensure its business activities and decision-making processes are regulated in a proper and prudent manner.

CLOSURE OF REGISTER OF MEMBERS

For the purpose of determining the identity of the shareholders entitled to attend and vote at the forthcoming annual general meeting of the Company to be held on 13 August 2021, the register of members of the Company will be closed from Monday, 9 August 2021 to Friday, 13 August 2021, both days inclusive, during which period no transfer of shares will be registered. All transfer of shares accompanied by the relevant certificates must be lodged with the Company’s transfer office and share registrar in Hong Kong, Tricor Investor Services Limited at Level 54, Hopewell Centre, 183 Queen’s Road East, Wanchai, Hong Kong for registration not later than 4:30 p.m. on Friday, 6 August 2021.

25

AUDIT COMMITTEE

The Company established the audit committee of the Company (the “ Audit Committee ”) on 13 November 2013 with written terms of reference which was revised on 25 February 2019 to comply with the Code on Corporate Governance Practices as set out in Appendix 14 to the Listing Rules. The primary duties of the Audit Committee are to review and supervise the financial reporting system and to review the risk management and internal control systems of the Group. The Audit Committee comprises three independent non-executive Directors, namely, Mr. Ma Siu Kit (chairman), Mr. Poon Chun Wai and Mr. Fu Chung. The Audit Committee has reviewed the audited financial statements of the Group for FY2020/21.

REVIEW OF PRELIMINARY ANNOUNCEMENT

The figures in respect of the preliminary announcement of the Group’s results for FY2020/21 have been agreed by the Group’s auditor, PricewaterhouseCoopers, to the amounts set out in the Group’s audited consolidated financial statements for the year. The work performed by PricewaterhouseCoopers in this respect did not constitute an assurance engagement in accordance with Hong Kong Standards on Auditing, Hong Kong Standards on Review Engagements or Hong Kong Standards on Assurance Engagements issued by the Hong Kong Institute of Certified Public Accountants and consequently no assurance has been expressed by PricewaterhouseCoopers on the preliminary announcement.

By Order of the Board eprint Group Limited She Siu Kee William Chairman and Chief Executive Officer

Hong Kong, 24 June 2021

As at the date of this announcement, the executive Directors are Mr. She Siu Kee William and Mr. Chong Cheuk Ki; the non-executive Directors are Mr. Leung Wai Ming and Mr. Li Lu; and the independent non-executive Directors are Mr. Poon Chun Wai, Mr. Fu Chung and Mr. Ma Siu Kit.

26