Hunlicar Group Limited — Annual Report 2021

Jun 22, 2021

Hong Kong Exchanges and Clearing Limited and The Stock Exchange of Hong Kong Limited (the “ Stock Exchange ”) 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.

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(Incorporated in the Cayman Islands with limited liability) (Stock code: 3638)

ANNUAL RESULTS ANNOUNCEMENT FOR THE YEAR ENDED 31 MARCH 2021

The Board of Directors (the “ Board ”) of Huabang Technology Holdings Limited (the “ Company ”) presents the consolidated results of the Company and its subsidiaries (collectively, the “ Group ”) for the year ended 31 March 2021 (“ Current Year ”) together with the comparative figures of the corresponding year ended 31 March 2020 (“ Last Corresponding Year ”).

• 1 -

CONSOLIDATED INCOME STATEMENT

For the year ended 31 March 2021

Note Revenue 3 Cost of sales Gross profit Selling expenses General and administrative expenses Expected credit loss on financial assets, net 4 Other (expenses)/income and (losses)/gains, net 5 Operating (loss)/profit Finance costs 6 Share of net loss of associates accounted for using the equity method Impairment loss on interest in an associate (Loss)/profit before income tax 7 Income tax credit/(expense) 8 (Loss)/profit for the year (Loss)/profit attributable to: Owners of the Company Non-controlling interests (Loss)/earnings per share attributable to owners of the Company Basic 9 Diluted 9

Year ended 31 March 2021 2020 HK$’000 HK$’000 2,023,680 933,638 (1,960,924) (867,481) 62,756 66,157 (1,364) (770) (43,012) (44,549) (106,351) (5,125) (1,822) 11,207 (89,793) 26,920 (7,913) (9,529) (1,946) (2,052) (6,258) – (105,910) 15,339 12,462 (5,597) (93,448) 9,742 (93,108) 5,607 (340) 4,135 (93,448) 9,742 HK(2.14) cent HK0.13 cent HK(2.14)cent HK0.13 cent

• 2 -

CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME

For the year ended 31 March 2021

(Loss)/profit for the year Other comprehensive income/(expense) Item that may be subsequently reclassified to profit or loss Currency translation differences Total comprehensive (expense)/income for the year Total comprehensive (expense)/income attributable to: Owners of the Company Non-controlling interests	Year ended 31 March 2021 2020 HK$’000 HK$’000 (93,448) 9,742 901 (828) (92,547) 8,914 (92,207) 4,779 (340) 4,135 (92,547) 8,914

• 3 -

CONSOLIDATED STATEMENT OF FINANCIAL POSITION

As at 31 March 2021

Note ASSETS Non-current assets Property, plant and equipment 11 Intangible assets Interest in an associate Deposits, prepayments and other receivables 14 Deferred tax assets Current assets Inventories Loan receivables 12 Account receivables 13 Deposits, prepayments and other receivables 14 Financial assets at fair value through profit or loss Income tax recoverable Bank balances held on behalf of clients Pledged bank deposits Cash and cash equivalents Total assets	As at 31 March 2021 2020 HK$’000 HK$’000 265,831 276,293 52,126 53,254 – 7,762 691 691 22,887 7,378 341,535 345,378 13,690 60,884 180,585 179,447 226,279 282,976 34,751 19,581 12,263 285 2,084 1,047 15,089 13,741 41,427 40,915 68,286 117,682 594,454 716,558 935,989 1,061,936	As at 31 March 2021 2020 HK$’000 HK$’000 265,831 276,293 52,126 53,254 – 7,762 691 691 22,887 7,378 341,535 345,378 13,690 60,884 180,585 179,447 226,279 282,976 34,751 19,581 12,263 285 2,084 1,047 15,089 13,741 41,427 40,915 68,286 117,682 594,454 716,558 935,989 1,061,936
		345,378
		60,884 179,447 282,976 19,581 285 1,047 13,741 40,915 117,682
		716,558
		1,061,936

• 4 -

CONSOLIDATED STATEMENT OF FINANCIAL POSITION (CONTINUED)

As at 31 March 2021

Note EQUITY Share capital 15 Other reserves (Accumulated losses)/retained earnings Total equity attributable to owners of the Company Non-controlling interests Total equity LIABILITIES Non-current liabilities Deferred tax liabilities Current liabilities Account payables 16 Other payables and accrued expenses 16 Contract liabilities Borrowings 17 Income tax payables Total liabilities Total equity and liabilities Net current assets Total assets less current liabilities	As at 31 March 2021 2020 HK$’000 HK$’000 3,654 3,654 538,532 537,631 (15,427) 77,681 526,759 618,966 7,117 7,957 533,876 626,923 163 840 163 840 40,035 83,616 4,815 1,725 2,917 1,197 346,759 342,754 7,424 4,881 401,950 434,173 402,113 435,013 935,989 1,061,936 192,504 282,385 534,039 627,763	As at 31 March 2021 2020 HK$’000 HK$’000 3,654 3,654 538,532 537,631 (15,427) 77,681 526,759 618,966 7,117 7,957 533,876 626,923 163 840 163 840 40,035 83,616 4,815 1,725 2,917 1,197 346,759 342,754 7,424 4,881 401,950 434,173 402,113 435,013 935,989 1,061,936 192,504 282,385 534,039 627,763
		618,966 7,957
		626,923
		840
		840
		83,616 1,725 1,197 342,754 4,881
		434,173
		435,013
		1,061,936
		282,385
		627,763

• 5 -

CONSOLIDATED STATEMENT OF CHANGES IN EQUITY

For the year ended 31 March 2021

For the year ended 31 March 2021 Balance at 1 April 2020 Loss for the year Other comprehensive income Currency translation differences Total comprehensive income/ (expense) for the year Dividend paid to non-controlling interests Balance at 31 March 2021			Attributable to owner	Attributable to owner	s of the Company	s of the Company		Total HK$’000 618,966 (93,108) 901 (92,207) – 526,759	Non- controlling interests HK$’000 7,957 (340) – (340) (500) 7,117	Total equity HK$’000 626,923 (93,448) 901
	Share capital HK$’000 3,654 – – – – 3,654		Other reserves				Sub total (Accumulated losses)/ retained earnings HK$’000 HK$’000 537,631 77,681 – (93,108) 901 – 901 (93,108) – – 538,532 (15,427)
		Share premium Shares held for share award scheme HK$’000 HK$’000 502,332 (21,630) – – – – – – – – 502,332 (21,630)	Merger reserve Note (a) HK$’000 50,374 – – – – 50,374	Capital reserve Note (b) HK$’000 2,480 – – – – 2,480	Statutory reserve Note (c) HK$’000 1,042 – – – – 1,042	Exchange reserve HK$’000 3,033 – 901 901 – 3,934
										(92,547)
										(500)
										533,876

• 6 -

CONSOLIDATED STATEMENT OF CHANGES IN EQUITY (CONTINUED)

For the year ended 31 March 2020

For the year ended 31 March 2020 Balance at 1 April 2019 Profit for the year Other comprehensive expense Currency translation differences Total comprehensive (expense)/ income for the year Employee share option scheme – forfeiture of employee share options Disposal of interests in a subsidiary without losing control Purchase of shares under share award scheme Balance at 31 March 2020				Attributable to owners of the	Attributable to owners of the	Company				Total HK$’000 635,322 5,607 (828) 4,779 – – (21,135) 618,966	Non- controlling interests Total equity HK$’000 HK$’000 – 635,322 4,135 9,742 – (828) 4,135 8,914 – – 3,822 3,822 – (21,135) 7,957 626,923	Non- controlling interests Total equity HK$’000 HK$’000 – 635,322 4,135 9,742 – (828) 4,135 8,914 – – 3,822 3,822 – (21,135) 7,957 626,923
	Share capital HK$’000 3,654 – – – – – – 3,654			Other re	serves			Sub total HK$’000 574,549 – (828) (828) (14,955) – (21,135) 537,631	Retained earnings HK$’000 57,119 5,607 – 5,607 14,955 – – 77,681
		Share premium Employee share-based compensation reserve HK$’000 HK$’000 502,332 14,955 – – – – – – – (14,955) – – – – 502,332 –	Shares held for share award scheme HK$’000 (495) – – – – – (21,135) (21,630)	Merger reserve Note (a) HK$’000 50,374 – – – – – – 50,374	Capital reserve Note (b) HK$’000 2,480 – – – – – – 2,480	Statutory reserve Note (c) HK$’000 1,042 – – – – – – 1,042	Exchange reserve HK$’000 3,861 – (828) (828) – – – 3,033
												8,914
												– 3,822 (21,135)
												626,923

• 7 -

CONSOLIDATED STATEMENT OF CHANGES IN EQUITY (CONTINUED) For the year ended 31 March 2021

Notes:

(a) Merger reserve

The Group’s merger reserve represents the difference between the share capital of the Company and the aggregate amount of share capital of other companies comprising the Group, after elimination of intragroup investments.

(b) Capital reserve

The Group’s capital reserve represents deemed contribution by the controlling shareholders as a shareholder acquired the remaining non-controlling interests of a subsidiary and contributed to the Group at no cost prior to 1 April 2011.

(c) Statutory reserve

The Company’s subsidiary in the People’s Republic of China (the “ PRC ”) is required to transfer 10% of its profit after income tax calculated in accordance with the PRC accounting standards and regulations to the statutory reserve until the balance reaches 50% of its respective registered capital, where further transfers will be at their directors’ discretion. The statutory reserve can be used to offset prior years’ losses, if any, and may be converted into share capital by issuing new shares to equity holders of the PRC subsidiary in proportion to their existing shareholding or by increasing the par value of the shares currently held by them, provided that the remaining balance of the statutory reserve after such issue is no less than 25% of share capital of the PRC subsidiary.

• 8 -

NOTES TO THE CONSOLIDATED FINANCIAL INFORMATION

1. GENERAL INFORMATION

The Company was incorporated in the Cayman Islands on 23 February 2011 as an exempted company with limited liability under the Companies Law, Cap. 22 (Law 3 of 1961, as consolidated and revised) of the Cayman Islands. The address of its registered office is PO Box 309, Ugland House, Grand Cayman, KY1-1104, Cayman Islands and the principal place of business is 33/F, Enterprise Square Three, 39 Wang Chiu Road, Kowloon Bay, Hong Kong.

The Company is an investment holding company. The Group is principally engaged in (i) computer and peripheral products business and (ii) financial services business.

The directors considered Mr. George Lu and Ms. Shen Wei, spouse of Mr. George Lu, to be the ultimate controlling shareholders.

The Company’s shares are listed on the Main Board of The Stock Exchange of Hong Kong Limited.

Pursuant to a special resolution passed at an extraordinary general meeting held on 15 April 2021, the name of the Company was changed from Huabang Financial Holdings Limited to the present one.

These consolidated financial information are presented in Hong Kong dollars (“ HK$ ”), which is also the functional currency of the Company. All values are rounded to the nearest thousands, unless otherwise stated.

2. APPLICATION OF AMENDMENTS TO HONG KONG FINANCIAL REPORTING STANDARDS (“HKFRSs”)

2.1 Amendments to HKFRSs that are mandatorily effective for the current year

In the current year, the Group has applied the Amendments to References to the Conceptual Framework in HKFRS Standards and the following amendments to HKFRSs issued by the Hong Kong Institute of Certified Public Accountants for the first time, which are mandatorily effective for the annual period beginning on or after 1 April 2020 for the preparation of the consolidated financial information:

Amendments to HKAS 1 and HKAS 8 Definition of Material Amendments to HKFRS 3 Definition of a Business Amendments to HKFRS 9, HKAS 39 Interest Rate Benchmark Reform and HKFRS 7

Except as described below, the application of the Amendments to References to the Conceptual Framework in HKFRS Standards and the amendments to HKFRSs in the current year had no material impact on the Group’s financial positions and performance for the current and prior years and/or on the disclosures set out in these consolidated financial information.

• 9 -

NOTES TO THE CONSOLIDATED FINANCIAL INFORMATION (CONTINUED)

2. APPLICATION OF AMENDMENTS TO HONG KONG FINANCIAL REPORTING STANDARDS (“HKFRSs”) (CONTINUED)

2.2 Impacts on application of Amendments to HKAS 1 and HKAS 8 Definition of Material

The Group has applied the Amendments to HKAS 1 and HKAS 8 for the first time in the current year. The amendments provide a new definition of material that states “information is material if omitting, misstating or obscuring it could reasonably be expected to influence decisions that the primary users of general purpose financial statements make on the basis of those financial statements, which provide financial information about a specific reporting entity.” The amendments also clarify that materiality depends on the nature or magnitude of information, either individually or in combination with other information, in the context of the financial statements taken as a whole.

The application of the amendments in the current year had no impact on the consolidated financial information.

2.3 New and amendments to HKFRSs in issue but not yet effective

The Group has not early applied the following new and amendments to HKFRSs that have been issued but are not yet effective:

HKFRS 17	Insurance Contracts and the related Amendments1
Amendment to HKFRS 16	Covid-19 – Related Rent Concessions4
Amendments to HKFRS 3	Reference to the Conceptual Framework2
Amendments to HKFRS 9, HKAS 39,	Interest Rate Benchmark Reform – Phase 25
HKFRS 7, HKFRS 4 and HKFRS 16
Amendments to HKFRS 10 and HKAS 28	Sale or Contribution of Assets between an
	Investor and its Associate or Joint Venture3
Amendments to HKAS 1	Classification of Liabilities as Current or Non-
	current and related amendments to Hong Kong
	Interpretation 5 (2020)1
Amendments to HKAS 16	Property, Plant and Equipment: Proceeds before
	Intended Use2
Amendments to HKAS 37	Onerous Contracts – Cost of Fulfilling a Contract2
Amendments to HKFRSs	Annual Improvements to HKFRSs 2018-20202

• 1 Effective for annual periods beginning on or after 1 January 2023 2 Effective for annual periods beginning on or after 1 January 2022 3 Effective for annual periods beginning on or after a date to be determined 4 Effective for annual periods beginning on or after 1 June 2020 5 Effective for annual periods beginning on or after 1 January 2021

Except for the new and amendments to HKFRSs mentioned below, the directors of the Company anticipate that the application of new and amendments to HKFRSs will have no material impact on the consolidated financial statements in the foreseeable future.

• 10 -

NOTES TO THE CONSOLIDATED FINANCIAL INFORMATION (CONTINUED)

2. APPLICATION OF AMENDMENTS TO HONG KONG FINANCIAL REPORTING STANDARDS (“HKFRSs”) (CONTINUED)

• 2.3 New and amendments to HKFRSs in issue but not yet effective (Continued)

Amendments to HKAS 1 Classification of Liabilities as Current or Non-current and related amendments to Hong Kong Interpretation 5 (2020)

The amendments provide clarification and additional guidance on the assessment of right to defer settlement for at least twelve months from reporting date for classification of liabilities as current or non-current, which:

• specify that the classification of liabilities as current or non-current should be based on rights that are in existence at the end of the reporting period. Specifically, the amendments clarify that:

• (i) the classification should not be affected by management intentions or expectations to settle the liability within 12 months; and

• (ii) if the right is conditional on the compliance with covenants, the right exists if the conditions are met at the end of the reporting period, even if the lender does not test compliance until a later date; and

• clarify that if a liability has terms that could, at the option of the counterparty, result in its settlement by the transfer of the entity’s own equity instruments, these terms do not affect its classification as current or non-current only if the entity recognises the option separately as an equity instrument applying HKAS 32 Financial Instruments: Presentation.

In addition, Hong Kong Interpretation 5 was revised as a consequence of the Amendments to HKAS 1 to align the corresponding wordings with no change in conclusion.

Based on the Group’s outstanding liabilities as at 31 March 2021, the application of the amendments will not result in reclassification of the Group’s liabilities.

• 11 -

NOTES TO THE CONSOLIDATED FINANCIAL INFORMATION (CONTINUED)

3. REVENUE AND SEGMENT INFORMATION

Revenue

An analysis of revenue is as follows:

Revenue from contracts with customers (Note i) Revenue from other sources Interest income calculated using the effective interest method from: – loan receivables – cash client receivables Total revenue (i) Disaggregated revenue information for revenue from contracts Type of goods or services Sales of goods Service income – Provision of underwriting and placing services Commission income – Provision of securities brokerage services Timing of revenue recognition A point in time	Year ended 31 March 2021 2020 HK$’000 HK$’000 1,977,119 905,045 17,913 12,113 28,648 16,480 46,561 28,593 2,023,680 933,638 with customers Year ended 31 March 2021 2020 HK$’000 HK$’000 1,976,348 904,005 248 86 523 954 1,977,119 905,045 1,977,119 905,045	Year ended 31 March 2021 2020 HK$’000 HK$’000 1,977,119 905,045 17,913 12,113 28,648 16,480 46,561 28,593 2,023,680 933,638 with customers Year ended 31 March 2021 2020 HK$’000 HK$’000 1,976,348 904,005 248 86 523 954 1,977,119 905,045 1,977,119 905,045
		905,045
		905,045

• 12 -

NOTES TO THE CONSOLIDATED FINANCIAL INFORMATION (CONTINUED)

3. REVENUE AND SEGMENT INFORMATION (CONTINUED)

Revenue (Continued)

• (i) Disaggregated revenue information for revenue from contracts with customers (Continued)

All the sales of goods, service income and commission income have an original expected duration of one year or less. As permitted under HKFRS 15, the transaction price allocated to these unsatisfied contracts is not disclosed.

Segment information

The chief operating decision-maker (“ CODM ”) has been identified as the executive directors of the Company. The CODM reviews the Group’s internal reporting in order to assess performance and allocate resources. Management has determined the operating segment based on these reports.

The CODM considers that the Group has two operating and reporting segments which are (i) computer and peripheral products business and (ii) financial services business (including securities brokerage business, advisory services business and money lending business).

The CODM assesses the performance of the operating segments based on segment (loss)/profit. Expenses, where appropriate, are allocated to operating segments with reference to revenue contributions of the respective segments. Unallocated expenses are not included in the result for each operating segment that is reviewed by the CODM.

Segment assets consist primarily of intangible assets, inventories, account receivables, loan receivables, allocated deposits, prepayments and other receivables where appropriate, financial assets at fair value through profit or loss where appropriate, pledged bank deposits, cash and cash equivalents where appropriate and bank balances held on behalf of clients. They exclude interest in an associate, property, plant and equipment, deferred tax assets, income tax recoverable and other unallocated assets, which are managed centrally.

Segment liabilities consist primarily of account payables, allocated borrowings where appropriate, allocated other payables and accrued expenses where appropriate and contract liabilities. They exclude deferred tax liabilities, income tax payables and other unallocated liabilities, which are managed centrally.

• 13 -

NOTES TO THE CONSOLIDATED FINANCIAL INFORMATION (CONTINUED)

3. REVENUE AND SEGMENT INFORMATION (CONTINUED)

Segment information (Continued)

Segment revenues and results

The following is an analysis of the Group’s revenue and results from continuing operations by reportable segments:

Revenue from external customers Cost of sales from external customers Selling expenses General and administrative expenses Expected credit loss on financial assets, net Other (expenses)/income and (losses)/gains, net Finance costs Segment (loss)/profit Share of net loss of an associate accounted for using the equity method Impairment loss on interest in an associate Unallocated expenses Loss before income tax Income tax credit Loss for the year

For the year ended 31 March 2021 Computer and peripheral products business Financial services business Total HK$’000 HK$’000 HK$’000 1,976,348 47,332 2,023,680 (1,960,924) – (1,960,924) 15,424 47,332 62,756 (1,268) (96) (1,364) (9,556) (8,003) (17,559) (88,010) (18,341) (106,351) (126) 1,226 1,100 (5,645) (263) (5,908) (89,181) 21,855 (67,326) (1,946) (6,258) (30,380) (105,910) 12,462 (93,448)

• 14 -

NOTES TO THE CONSOLIDATED FINANCIAL INFORMATION (CONTINUED)

3. REVENUE AND SEGMENT INFORMATION (CONTINUED)

Segment information (Continued)

Segment revenues and results (Continued)

The following is an analysis of the Group’s revenue and results from continuing operations by reportable segments: (Continued)

Revenue from external customers Cost of sales from external customers Selling expenses General and administrative expenses Expected credit loss on financial assets, net Other income and gains, net Finance costs Segment profit Share of net loss of associates accounted for using the equity method Unallocated expenses Profit before income tax Income tax expense Profit for the year	For the year ended 31 March 2020 Computer and peripheral products business Financial services business Total HK$’000 HK$’000 HK$’000 904,005 29,633 933,638 (867,481) – (867,481) 36,524 29,633 66,157 (770) – (770) (12,587) (9,797) (22,384) 513 (5,638) (5,125) 10,748 168 10,916 (6,665) – (6,665) 27,763 14,366 42,129 (2,052) (24,738) 15,339 (5,597) 9,742

Interest revenue of HK$46,561,000 (2020: HK$28,593,000) was included in revenue from external customers, wholly contributed by financial services business segment.

• 15 -

NOTES TO THE CONSOLIDATED FINANCIAL INFORMATION (CONTINUED)

3. REVENUE AND SEGMENT INFORMATION (CONTINUED)

Segment information (Continued)

Segment assets and liabilities

The following is an analysis of the Group’s assets and liabilities by reportable and operating segments:

31 March 2021

Segment assets Segment liabilities 31 March 2020 Segment assets Segment liabilities	Computer and peripheral products business HK$’000 149,149 351,244 Computer and peripheral products business HK$’000 317,823 333,011	Financial services business HK$’000 492,464 26,763 Financial services business HK$’000 457,219 14,059	Total HK$’000 641,613
			378,007
			Total HK$’000 775,042
			347,070

• 16 -

NOTES TO THE CONSOLIDATED FINANCIAL INFORMATION (CONTINUED)

3. REVENUE AND SEGMENT INFORMATION (CONTINUED)

Segment information (Continued)

Segment assets and liabilities (Continued)

The reconciliations of segment assets to total assets and segment liabilities to total liabilities are provided as follows:

Segment assets Cash and cash equivalents Property, plant and equipment Deposits, prepayments and other receivables Financial assets at fair value through profit or loss Deferred tax assets Interest in an associate Income tax recoverable Total assets Segment liabilities Deferred tax liabilities Income tax payables Borrowings Other unallocated liabilities Total liabilities	As at 2021 HK$’000 641,613 1,233 255,638 789 11,745 22,887 – 2,084 935,989 378,007 163 7,424 15,003 1,516 402,113	31 March 2020 HK$’000 775,042 4,357 265,514 836 – 7,378 7,762 1,047
		1,061,936
		347,070 840 4,881 82,014 208
		435,013

• 17 -

NOTES TO THE CONSOLIDATED FINANCIAL INFORMATION (CONTINUED)

3. REVENUE AND SEGMENT INFORMATION (CONTINUED)

Segment information (Continued)

Other segment information

	For the year ended 31 March 2021	For the year ended 31 March 2021	For the year ended 31 March 2021
	Computer and
	peripheral	Financial
	products	services
	business	business	Total
	HK$’000	HK$’000	HK$’000
Additions to property, plant and equipment	1,072	29	1,101
Depreciation of property, plant and equipment	1,547	138	1,685
Amortisation of intangible assets	–	1,128	1,128
Impairment of inventories	1,689	–	1,689
	For the year ended 31 March 2020
	Computer and
	peripheral	Financial
	products	services
	business	business	Total
	HK$’000	HK$’000	HK$’000
Additions to property, plant and equipment	171	8	179
Depreciation of property, plant and equipment	1,499	175	1,674
Amortisation of intangible assets	–	1,241	1,241
Impairment of inventories	122	–	122

• 18 -

NOTES TO THE CONSOLIDATED FINANCIAL INFORMATION (CONTINUED)

3. REVENUE AND SEGMENT INFORMATION (CONTINUED)

Segment information (Continued)

Geographical information

The Group’s operations are located in Hong Kong and the PRC.

Majority of the Group’s revenue were derived from operations located in Hong Kong.

Information about the Group’s total non-current assets (excluding deferred tax assets) is presented below based on the geographical location of the assets:

Hong Kong The PRC	As at 2021 HK$’000 317,732 916 318,648	31 March 2020 HK$’000 329,138 8,862
		338,000

Information about major customers

Revenue from the top five customers for all reportable segments is as follows:

Revenue from top five customers Total revenue Percentage Number of customers that individually accounted for more than 10% of the Group’s revenue	Year ended 31 March 2021 2020 HK$’000 HK$’000 1,714,790 870,769 2,023,680 933,638 85% 93% 1 4	Year ended 31 March 2021 2020 HK$’000 HK$’000 1,714,790 870,769 2,023,680 933,638 85% 93% 1 4
		4

For the year ended 31 March 2021, there was one customer individually contributing over 10% of the total revenue of the Group. The revenue was arisen from computer and peripheral products business and amounting to HK$1,142,855,000 for the year ended 31 March 2021, its corresponding revenue for year ended 31 March 2020 did not contribute over 10% of the total revenue of the Group.

For the year ended 31 March 2020, there were four customers individually contributing over 10% of the total revenue of the Group. The revenue was arisen from computer and peripheral products business and amounting to HK$417,038,000, HK$214,592,000, HK$113,874,000 and HK$108,609,000 respectively; their corresponding revenue for the year ended 31 March 2021 did not contribute over 10% of the total revenue of the Group.

• 19 -

NOTES TO THE CONSOLIDATED FINANCIAL INFORMATION (CONTINUED)

4. EXPECTED CREDIT LOSS ON FINANCIAL ASSETS, NET

Loan receivables (Note 12) Cash client receivables (Note 13) Trade receivables (Note 13) Interest receivables (Note 14)	Year ended 31 March 2021 2020 HK$’000 HK$’000 5,862 987 12,413 4,602 88,010 (513) 66 49 106,351 5,125

5. OTHER (EXPENSES)/INCOME AND (LOSSES)/GAINS, NET

Finance income Exchange (losses)/gains Gain on disposal of interest of an associate Loss on disposal of property, plant and equipment Realised gain/(loss) on disposal of equity investments at fair value through profit or loss Unrealised loss on the change in fair value of equity investments at fair value through profit or loss Handling fee income Dividend income from listed securities Write-back of other payables Others

Year ended 31 March 2021 2020 HK$’000 HK$’000 658 9,710 (983) 933 – 2 – (108) 220 (52) (2,703) (501) 935 746 7 – – 236 44 241 (1,822) 11,207

• 20 -

NOTES TO THE CONSOLIDATED FINANCIAL INFORMATION (CONTINUED)

6. FINANCE COSTS

	Year ended 31 March	Year ended 31 March
	2021	2020
	HK$’000	HK$’000
Finance costs
– Interest expenses on bank and other borrowings	7,913	9,529

7. (LOSS)/PROFIT BEFORE INCOME TAX

(Loss)/profit before income tax has been arrived at after charging:

• (a) Employee benefit expenses (including directors’ emoluments)

	Year ended 31 March	Year ended 31 March
	2021	2020
	HK$’000	HK$’000
Short term employee benefits	16,730	16,162
Post-employment benefits (Note i)	469	457
Others	88	10
	17,287	16,629

Notes:

• (i): These mainly represent:

• the Group’s contributions to the Mandatory Provident Funds (MPF) for employees working in Hong Kong. Under the MPF scheme, each of the group companies (the employer) and its employees make monthly contributions to the scheme at 5% of the employees’ earnings with a maximum of HK$1,500 for employee’s monthly contribution as defined under the Hong Kong Mandatory Provident Funds legislations.

• the Group’s contributions to defined contribution pension plans in the PRC for employees working in the PRC. These pension plans are organised by the respective municipal and provincial government of the PRC. These PRC subsidiaries are required to contribute certain percentage of the employees’ basic salaries to the pension plans depending on the applicable local regulations.

The Group has no other material obligations for the payment of pensions and other postretirement benefits of employees or retirees other than those disclosed above.

• (ii): For the year ended 31 March 2021, COVID-19 related government grants under “Employment Support Scheme” of the Hong Kong government, amounting to HK$1,478,000 have been offset against employee benefit expenses.

• 21 -

NOTES TO THE CONSOLIDATED FINANCIAL INFORMATION (CONTINUED)

7. (LOSS)/PROFIT BEFORE INCOME TAX (CONTINUED)

(Loss)/profit before income tax has been arrived at after charging: (Continued)

(b) Other items

	Year ended 31 March	Year ended 31 March
	2021	2020
	HK$’000	HK$’000
Cost of inventories sold	1,959,235	867,359
Auditor’s remuneration
- audit service	1,220	1,202
- non-audit service	50	–
Depreciation of property, plant and equipment	11,646	11,755
Amortisation of intangible assets	1,128	1,241
Short-term lease rentals of premises	532	2,310
Service fees for broker supplied systems	1,374	1,357
Impairment of inventories	1,689	122

8. INCOME TAX (CREDIT)/EXPENSE

Current income tax – Hong Kong profits tax Over-provision in prior year Deferred income tax	Year ended 31 March 2021 2020 HK$’000 HK$’000 3,810 5,247 (86) (1,094) (16,186) 1,444 (12,462) 5,597	Year ended 31 March 2021 2020 HK$’000 HK$’000 3,810 5,247 (86) (1,094) (16,186) 1,444 (12,462) 5,597
		5,597

On 21 March 2018, the Hong Kong Legislative Council passed The Inland Revenue (Amendment) (No. 7) Bill 2017 (the “ Bill ”) which introduces the two-tiered profits tax rates regime. The Bill was signed into law on 28 March 2019 and was gazetted on the following day. Under the two-tiered profits tax rates regime, the first HK$2 million of profits of the qualifying group entity will be taxed at 8.25%, and profits above HK$2 million will be taxed at 16.5%. The profits of group entities not qualifying for the two-tiered profits tax rates regime will continue to be taxed at a flat rate of 16.5%.

The Group has no assessable profit in PRC during the reporting period and is not subject to any PRC corporate income tax. The PRC corporate income tax rate during the reporting period is 25%.

• 22 -

NOTES TO THE CONSOLIDATED FINANCIAL INFORMATION (CONTINUED)

9. (LOSS)/EARNINGS PER SHARE

(a) Basic

Basic (loss)/earnings per share is calculated by dividing the (loss)/profit attributable to owners of the Company by the weighted average number of ordinary shares in issue during the year excluding ordinary shares purchased by the Company for share award scheme.

	Year ended 31 March	Year ended 31 March
	2021	2020
(Loss)/profit attributable to owners
of the Company (HK$’000)	(93,108)	5,607
Weighted average number of ordinary shares in issue	4,342,038,000	4,352,533,475
Basic (loss)/earnings per share	HK(2.14) cent	HK0.13 cent

(b) Diluted

Diluted (loss)/earnings per share for the years ended 31 March 2021 and 2020 was the same as the basic (loss)/earnings per share as there were no dilutive potential ordinary shares in existence during the years ended 31 March 2021 and 2020.

10. DIVIDENDS

No final dividend for the years ended 31 March 2021 and 2020 was proposed.

11. PROPERTY, PLANT AND EQUIPMENT

During the year, there was additions of HK$1,101,000 (2020: HK$464,000) for property, plant and equipment.

For the year ended 31 March 2021, there was no disposal of property, plant and equipment which resulting in no gain/loss on disposal.

For the year ended 31 March 2020, the Group disposed of certain property, plant and equipment with the aggregate carrying amount of HK$113,000 which resulting in a loss on disposal of HK$108,000.

• 23 -

NOTES TO THE CONSOLIDATED FINANCIAL INFORMATION (CONTINUED)

12. LOAN RECEIVABLES

Loan receivables Less: Impairment – Stage 1 – Stage 2 – Stage 3	As at 31 March 2021 2020 HK$’000 HK$’000 194,530 187,530 (1,065) (1,083) – – (12,880) (7,000) 180,585 179,447	As at 31 March 2021 2020 HK$’000 HK$’000 194,530 187,530 (1,065) (1,083) – – (12,880) (7,000) 180,585 179,447
		179,447

The Group’s loan receivables, which arise from its money lending business in Hong Kong, are denominated in Hong Kong dollars, unsecured, bearing fixed interest rate, and recoverable within one year from the dates of inception of the loan agreements.

A maturity profile of the loan receivables as at the end of the reporting period, based on the maturity date and net of impairment allowance, is as follows:

	As at 31 March	As at 31 March
	2021	2020
	HK$’000	HK$’000
Current – within one year	180,585	179,447

An aging analysis of the loan receivables as at the end of the reporting period, based on the due date and net of impairment allowance, is as follows:

	As at 31 March	As at 31 March
	2021	2020
	HK$’000	HK$’000
Not past due	180,585	179,447

• 24 -

NOTES TO THE CONSOLIDATED FINANCIAL INFORMATION (CONTINUED)

12. LOAN RECEIVABLES (CONTINUED)

The following is the analysis of the gross carrying amount of the loan receivables as at 31 March 2021 and 2020 by the past due date and year end classification:

As at 31 March 2021	Stage 1	Stage 2	Stage 3	Total
	HK$’000	HK$’000	HK$’000	HK$’000
Not past due	180,530	–	7,000	187,530
Past due over 90 days	–	–	7,000	7,000
	180,530	–	14,000	194,530
As at 31 March 2020	Stage 1	Stage 2	Stage 3	Total
	HK$’000	HK$’000	HK$’000	HK$’000
Not past due	180,530	–	–	180,530
Past due over 90 days	–	–	7,000	7,000
	180,530	–	7,000	187,530

The movements in the impairment allowance of loan receivables were as follows:

As at 1 April 2020 Changes due to financial instruments recognised as at 1 April 2020 -Impairment losses reversed New financial assets originated or purchased As at 31 March 2021 Expected credit loss (“ECL”) rate	Stage 1 HK$’000 1,083 (18) – 1,065 0.59%	Stage 2 HK$’000 – – – – N/A	Stage 3 HK$’000 7,000 – 5,880 12,880 92.00%	Total HK$’000 8,083 (18) 5,880
				13,945
				7.17%

During the year ended 31 March 2021, included in the impairment allowance of HK$5,880,000 from new financial assets originated or purchased under Stage 3 was mainly related to the gross carrying amount of HK$7,000,000. The Company has assessed the relevant borrower’s financial background, repayment abilities and expected future cash flows; and determined that an impairment allowance of HK$5,880,000 was provided.

• 25 -

NOTES TO THE CONSOLIDATED FINANCIAL INFORMATION (CONTINUED)

12. LOAN RECEIVABLES (CONTINUED)

The movements in the impairment allowance of loan receivables were as follows: (Continued)

As at 1 April 2019 Changes due to financial instruments recognised as at 1 April 2020 -Impairment losses reversed New financial assets originated or purchased As at 31 March 2020 ECL rate	Stage 1 HK$’000 96 (96) 1,083 1,083 0.60%	Stage 2 HK$’000 – – – – N/A	Stage 3 HK$’000 7,000 – – 7,000 100.00%	Total HK$’000 7,096 (96) 1,083 8,083 4.31%

The increase in the impairment allowance during the year ended 31 March 2020 was because of the increase in gross loan receivables of HK$165,230,000.

• 26 -

NOTES TO THE CONSOLIDATED FINANCIAL INFORMATION (CONTINUED)

13. ACCOUNT RECEIVABLES

Notes Trade receivables (b) Cash client receivables (a) Due from clearing house (c) Less: Impairment	As at 2021 HK$’000 104,782 258,375 341 363,498 (137,219) 226,279	31 March 2020 HK$’000 98,450 219,503 1,819 319,772 (36,796) 282,976

Account receivables are denominated in the following currencies:

HK$ US$	As at 2021 HK$’000 209,775 16,504 226,279	31 March 2020 HK$’000 184,794 98,182 282,976

Other than those disclosed in Note (a) below, the Group does not hold any collateral as security for other account receivables.

Notes:

(a) Analysis of cash client receivables

The carrying amount of cash client receivables of the Group was as follows:

Cash client receivables Less: Impairment – Stage 1 – Stage 2 – Stage 3	As at 2021 HK$’000 258,375 (9) (10,896) (38,036) 209,434	31 March 2020 HK$’000 219,503 (77) (658) (35,793) 182,975

• 27 -

NOTES TO THE CONSOLIDATED FINANCIAL INFORMATION (CONTINUED)

13. ACCOUNT RECEIVABLES (CONTINUED)

Notes: (Continued)

(a) Analysis of cash client receivables (Continued)

• (i) As at 31 March 2021, the Group held securities with an aggregate fair value of HK$404,232,000 (2020: HK$434,380,000) as collaterals over the receivables. The cash client receivables are interest-bearing and have no fixed repayment terms.

No aging analysis is disclosed as in the opinion of the directors, the aging analysis does not give additional value in view of the nature of securities brokerage business.

• (ii) The following is the analysis of the gross carrying amount of the cash client receivables as at 31 March 2021 and 2020 by Loan-to-collateral value (“ LTV ”) and year end classification:

As at 31 March 2021 LTV at 100% or above LTV less than 100% As at 31 March 2020 LTV at 100% or above LTV less than 100%	12-month ECLs Stage 1 HK$’000 – 78,444 78,444 12-month ECLs Stage 1 HK$’000 – 104,316 104,316	Lifetime ECLs Stage 2 Stage 3 HK$’000 HK$’000 134,896 45,035 – – 134,896 45,035 Lifetime ECLs Stage 2 Stage 3 HK$’000 HK$’000 70,930 44,257 – – 70,930 44,257	Total HK$’000 179,931 78,444
			258,375
			Total HK$’000 115,187 104,316
		Stage 2 HK$’000 70,930 – 70,930
			219,503

For the gross receivables of stage 3 cash client receivables, fair value of marketable securities pledged was HK$8,301,000 (2020: HK$9,959,000).

• 28 -

NOTES TO THE CONSOLIDATED FINANCIAL INFORMATION (CONTINUED)

13. ACCOUNT RECEIVABLES (CONTINUED)

Notes: (Continued)

(a) Analysis of cash client receivables (Continued)

(iii) The movements in the impairment allowance of cash client receivables were as follows:

As at 1 April 2020 Changes in the impairment allowance due to financial assets as at 1 April 2020 – Transfer from stage 1 to stage 2 – Net remeasurement of ECL arising from financial assets transferred from Stage 1 to Stage 2 New financial assets originated or purchased As at 31 March 2021 ECL rate	Stage 1 HK$’000 77 (72) – 4 9 0.01%	Stage 2 HK$’000 658 72 989 9,177 10,896 8.08%	Stage 3 HK$’000 35,793 – – 2,243 38,036 84.46%	Total HK$’000 36,528 – 989 11,424
				48,941
				18.94%

The following significant changes in the gross carrying amounts of cash client receivables contributed to the increase in the impairment allowance during the year ended 31 March 2021:

• Increase in gross cash client receivables of HK$38,872,000, which included origination of new client receivables and new drawdown from existing clients.

As at 1 April 2019 New financial assets originated or purchased As at 31 March 2020 ECL rate	Stage 1 HK$’000 22 55 77 0.07%	Stage 2 HK$’000 – 658 658 0.93%	Stage 3 HK$’000 31,904 3,889 35,793 80.88%	Total HK$’000 31,926 4,602
				36,528
				16.64%

The following significant changes in the gross carrying amounts of cash client receivables contributed to the increase in the impairment allowance during the year ended 31 March 2020:

• Increase in gross cash client receivables of HK$117,782,000, which included origination of new client receivables and new drawdown from existing clients.

Management has assessed the market value of the pledged securities of each individual client at the end of each reporting period. The collateral held can be sold at the Group’s discretion to settle any outstanding amount owned by the cash clients.

• 29 -

NOTES TO THE CONSOLIDATED FINANCIAL INFORMATION (CONTINUED)

13. ACCOUNT RECEIVABLES (CONTINUED)

Notes: (Continued)

(b) Analysis of trade receivables

The carrying amount of trade receivables of the Group was as follows:

Trade receivables Less: Impairment	As at 2021 HK$’000 104,782 (88,278) 16,504	31 March 2020 HK$’000 98,450 (268)
		98,182

• (i) The Group grants credit period ranging from 1 day to 60 days (2020: from 1 day to 60 days) to the customers of trading business. The aging analysis of relevant trade receivables at the date of consolidated statement of financial position based on invoice date and before impairment allowance is as follows:

	As at 31 March	As at 31 March
	2021	2020
	HK$’000	HK$’000
1 – 30 days	1,896	11,084
31 – 60 days	–	40,369
61 – 90 days	–	31,624
91 – 180 days	–	15,373
Over 180 days	102,886	–
	104,782	98,450

• 30 -

NOTES TO THE CONSOLIDATED FINANCIAL INFORMATION (CONTINUED)

13. ACCOUNT RECEIVABLES (CONTINUED)

Notes: (Continued)

(b) Analysis of trade receivables (Continued)

• (ii) The following is the analysis of the gross carrying amount of the trade receivables as at 31 March 2021 and 2020 by ECL assessment and year end classification:

As at 31 March 2021

	Lifetime ECL
	(provision	Credit-
	matrix)	impaired	Total
	HK$’000	HK$’000	HK$’000
Trade receivables included in account
receivables
– Not yet past due	1,896	–	1,896
– Past due	15,209	87,677	102,886
	17,105	87,677	104,782
As at 31 March 2020
	Lifetime ECL
	(provision	Credit-
	matrix)	impaired	Total
	HK$’000	HK$’000	HK$’000
Trade receivables included in account
receivables
– Not yet past due	74,474	–	74,474
– Past due	23,976	–	23,976
	98,450	–	98,450

• 31 -

NOTES TO THE CONSOLIDATED FINANCIAL INFORMATION (CONTINUED)

13. ACCOUNT RECEIVABLES (CONTINUED)

Notes: (Continued)

(b) Analysis of trade receivables (Continued)

(iii) The movements in the impairment allowance of trade receivables were as follows:

At the beginning of year Changes in the impairment allowance due to financial assets at the beginning of year – Transfer to credit-impaired – Net remeasurement of ECL due to change in credit risk without transfer of stage New financial assets originated or purchased At the end of year	Not credit- impaired HK$’000 268 (177) 499 11 601	As at 31 2021 Credit- impaired HK$’000 – 177 – 87,500 87,677	March Total HK$’000 268 – 499 87,511 88,278	2020 Not credit- impaired HK$’000 781 – (568) 55
				268

As part of the Group’s credit risk management, the Group uses debtors’ aging to assess the impairment for its customers in relation to its computer and peripheral products business because these customers have common risk characteristics that are representative of the customers’ abilities to pay all amounts due in accordance with the contractual terms.

During the year ended 31 March 2021, for trade receivables with gross carrying amount of HK$87,677,000, majority of which has been past due over 180 days, a full provision had been made after the Group’s assessment on the relevant customers’ financial background, repayment abilities, expected future cash flows; and taken consideration of their nonresponse to collection activities. The Group had commenced legal proceedings against one of these customers; up to date, legal proceedings are still in progress.

The following table provides information about the exposure to credit risk for trade receivables which are assessed on a collective basis by using provision matrix within lifetime ECL (not credit-impaired). Debtors of credit-impaired with gross carrying amounts of HK$87,677,000 as at 31 March 2021 were assessed individually.

As at 31 March 2021

	Not past due	Past due	Total
Expected credit loss rate	0.58%	3.88%	3.51%
Gross carrying amount (HK$’000)	1,896	15,209	17,105
Expected credit losses (HK$’000)	11	590	601

• 32 -

NOTES TO THE CONSOLIDATED FINANCIAL INFORMATION (CONTINUED)

13. ACCOUNT RECEIVABLES (CONTINUED)

Notes: (Continued)

(b) Analysis of trade receivables (Continued)

• (iii) The movements in the impairment allowance of trade receivables were as follows: (Continued)

As at 31 March 2020

	Not past due	Past due	Total
Expected credit loss rate	0.17%	0.60%	0.27%
Gross carrying amount (HK$’000)	74,474	23,976	98,450
Expected credit losses (HK$’000)	126	142	268

The estimated loss rates are estimated based on historical observed default rates over the expected life of the debtors and are adjusted for forward-looking information that is available without undue cost or effort. The grouping is regularly reviewed by management to ensure relevant information about specific debtors is updated. Due to greater financial uncertainty triggered by the COVID-19 pandemic, the Group has increased the expected loss rates in the current year as there is higher risk that a prolonged pandemic could led to increased credit default rates.

During the year ended 31 March 2021, the Group provided HK$601,000 (2020: HK$268,000) impairment allowance for trade receivables, based on the provision matrix. Impairment allowance of HK$87,677,000 (2020: nil) were made on credit-impaired debtors.

(c) Due from clearing house

The settlement terms of receivables arising from the ordinary course of business of dealing in securities from clearing house are within two days after trade date. Clearing house receivables are neither past due nor impaired and represent unsettled trades transacted on the last two days prior to the end of each financial year and solely related to the Hong Kong Securities Clearing Company Limited (“ HKSCC ”) for which there is limited risk of default.

In presenting the amounts due from HKSCC, the Group has offset the gross amount of the account receivables from and the gross amount of the account payable to HKSCC. Further details are set out in the Group’s annual report.

No aging analysis is disclosed for account receivables from clearing house as in the opinion of the directors of the Company, the aging analysis does not give additional value in view of the nature of the business.

As at 31 March 2021 and 2020, the amount due from clearing house was not past due.

• 33 -

NOTES TO THE CONSOLIDATED FINANCIAL INFORMATION (CONTINUED)

14. DEPOSITS, PREPAYMENTS AND OTHER RECEIVABLES

		As at 31	March
		2021	2020
Notes		HK$’000	HK$’000
Non-current
Other non-current deposits		486	486
Other assets	(1)	205	205
		691	691
Current
Prepayments		854	691
Deposits and other receivables	(2)	13,855	10,295
Interest receivables	(3)	20,042	8,595
		34,751	19,581
Total deposits, prepayments and other receivables		35,442	20,272
Deposits, prepayments and other receivables are denominated	in the following currencies:

HK$ RMB US$	As at 2021 HK$’000 23,648 – 11,794 35,442	31 March 2020 HK$’000 10,757 74 9,441
		20,272

• 34 -

NOTES TO THE CONSOLIDATED FINANCIAL INFORMATION (CONTINUED)

14. DEPOSITS, PREPAYMENTS AND OTHER RECEIVABLES (CONTINUED)

Notes:

(1) Other assets

The gross carrying amount of other assets of the Group was as follows:

Hong Kong Securities Clearing Company Limited – guarantee fund deposit – admission fee The Stock Exchange of Hong Kong Limited – compensation fund deposit – fidelity fund deposit – stamp duty deposit	As at 2021 HK$’000 50 50 50 50 5 205	31 March 2020 HK$’000 50 50 50 50 5
		205

As at 31 March 2021 and 2020, all other assets were not past due.

(2) Deposits and other receivables

No aging analysis is disclosed for deposits and other receivables as in the opinion of the directors of the Company, the aging analysis does not give additional value in view of the nature of the business.

As at 31 March 2021 and 2020, all deposits and other receivables were not past due.

(3) Interest receivables

	As at 31 March	As at 31 March
	2021		2020
	HK$’000	HK$’000
Interest receivables	20,686		9,173
Less: Impairment	(644)		(578)
	20,042		8,595

The Group’s interest receivables, which arise from the money lending business, are denominated in Hong Kong dollars and repayable at terms as agreed with the borrowers.

• 35 -

NOTES TO THE CONSOLIDATED FINANCIAL INFORMATION (CONTINUED)

14. DEPOSITS, PREPAYMENTS AND OTHER RECEIVABLES (CONTINUED)

Notes: (Continued)

(3) Interest receivables (Continued)

An aging analysis of the interest receivables as at the end of the reporting period, based on the due date and net of impairment allowance, is as follows:

	As at 31 March	As at 31 March
	2021		2020
	HK$’000	HK$’000
Not past due	20,042		8,595

The following is the analysis of the gross carrying amount of the interest receivables as at 31 March 2021 and 2020 by the past due date and year end classification:

As at 31 March 2021

Not past due Past due over 90 days As at 31 March 2020 Not past due Past due over 90 days	Stage 1 HK$’000 20,161 – 20,161 Stage 1 HK$’000 8,648 – 8,648	Stage 2 HK$’000 – – – Stage 2 HK$’000 – – –	Stage 3 HK$’000 – 525 525 Stage 3 HK$’000 – 525 525	Total HK$’000 20,161 525
				20,686
				Total HK$’000 8,648 525
				9,173

• 36 -

NOTES TO THE CONSOLIDATED FINANCIAL INFORMATION (CONTINUED)

14. DEPOSITS, PREPAYMENTS AND OTHER RECEIVABLES (CONTINUED)

Notes: (Continued)

(3) Interest receivables (Continued)

The movements in the impairment allowance of interest receivables were as follows:

As at 1 April 2020 New financial assets originated or purchased As at 31 March 2021 ECL rate	Stage 1 HK$’000 53 66 119 0.59%	Stage 2 HK$’000 – – – N/A	Stage 3 HK$’000 525 – 525 100.00%	Total HK$’000 578 66
				644
				3.11%

The increase in the impairment allowance during the year ended 31 March 2021 was because of longer period has been counted, resulting in an increase in relevant gross interest receivables of HK$11,513,000.

As at 1 April 2019 New financial assets originated or purchased As at 31 March 2020 ECL rate	Stage 1 HK$’000 4 49 53 0.61%	Stage 2 HK$’000 – – – N/A	Stage 3 HK$’000 525 – 525 100.00%	Total HK$’000 529 49
				578
				6.30%

The increase in the impairment allowance during the year ended 31 March 2020 was because of the increase in gross loan receivables of HK$165,230,000, resulting in an increase in relevant gross interest receivables of HK$8,013,000.

• 37 -

NOTES TO THE CONSOLIDATED FINANCIAL INFORMATION (CONTINUED)

15. SHARE CAPITAL

Authorised shares:

As at 31 March 2021, the total authorised number of ordinary shares is HK$96,000 million shares (2020: 96,000 million shares) with a par value of HK$0.0008333 per share (2020: HK$0.0008333 per share).

Issued shares:

	Number of
	shares	Share capital
	’000	HK$’000
As at 1 April 2019, 31 March 2020, 1 April 2020 and
31 March 2021	4,384,782	3,654
ACCOUNT PAYABLES, OTHER PAYABLES AND ACCRUED	EXPENSES
	As at	31 March
	2021	2020
	HK$’000	HK$’000
Trade payables	24,329	69,932
Cash client payables (Note a)	15,706	13,591
Due to clearing house (Note b)	–	93
Total account payables	40,035	83,616
Other payables and accrued expenses
Accrued expenses	4,193	1,651
Other payables	622	74
Total other payables and accrued expenses	4,815	1,725
Total account payables, other payables and accrued expenses	44,850	85,341

16. ACCOUNT PAYABLES, OTHER PAYABLES AND ACCRUED EXPENSES

• 38 -

NOTES TO THE CONSOLIDATED FINANCIAL INFORMATION (CONTINUED)

16. ACCOUNT PAYABLES, OTHER PAYABLES AND ACCRUED EXPENSES (CONTINUED)

Notes:

• (a) The settlement terms of payables arising from securities brokerage business are normally two to three days after trade date or specific terms agreed. The majority of the cash client payables are unsecured, non-interest-bearing and repayable on demand, except where certain balances represent trades pending settlement or cash received from clients for their trading activities under the normal course of business.

• (b) In presenting the amounts due to HKSCC, the Group has offset the gross amount of the account receivables from and the gross amount of the account payables to HKSCC. Further details are set out in the Group’s annual report.

• (c) As at 31 March 2021 and 2020, all trade payables were aged within two months, based on invoice date. No aging analysis is disclosed for cash client payables and due to clearing house as in the opinion of the directors of the Company, the aging analysis does not give additional value in view of the nature of the business.

Account payables, other payables and accrued expenses of the Group are denominated in the following currencies:

HK$ RMB US$	As at 2021 HK$’000 18,398 811 25,641 44,850	31 March 2020 HK$’000 15,362 47 69,932
		85,341

Other than those disclosed in Note (a) above, account payables and other payables are unsecured, noninterest-bearing and repayable on demand.

• 39 -

NOTES TO THE CONSOLIDATED FINANCIAL INFORMATION (CONTINUED)

17. BORROWINGS

Bank borrowings Other borrowings Analysed as: – Secured – Unsecured	As at 2021 HK$’000 336,475 10,284 346,759 331,803 14,956 346,759	31 March 2020 HK$’000 342,754 –
		342,754
		313,109 29,645
		342,754

As at 31 March 2021, the Group’s other borrowings of HK$10,284,000 and bank borrowings of HK$321,519,000 are secured by financial assets at fair value through profit or loss with carrying value of HK$8,050,000 and the Group’s owned properties situated in Hong Kong of HK$254,328,000 and pledged bank deposits of HK$41,427,000.

As at 31 March 2020, the Group’s bank borrowings of HK$232,953,000 are secured by mortgage over the Group’s owned properties situated in Hong Kong of HK$263,772,000. In additions, the Group’s bank borrowings of HK$80,156,000 are secured by pledged bank deposits of HK$40,915,000.

The Group’s secured bank borrowings, which contain a clause giving the lender an unconditional right to demand repayment at any time, have been classified as current liabilities irrespective of the probability that the lenders will invoke the clause without cause.

• 40 -

NOTES TO THE CONSOLIDATED FINANCIAL INFORMATION (CONTINUED)

17. BORROWINGS (CONTINUED)

The maturities of the bank borrowings that contain repayable on demand clause and other borrowings in accordance with the scheduled repayment dates are as follows:

The carrying amounts of other borrowings are repayable: -Within one year The carrying amounts of bank borrowings that contain a repayment on demand clause (shown under current liabilities) are repayable: – Within one year – Between one and two years – Between two and five years – Over five years The exposure of the Group’s borrowings are as follows: Variable-rate borrowings Fixed-rate borrowings	As at 2021 HK$’000 10,284 10,284 228,997 4,478 103,000 – 336,475 346,759 As at 2021 HK$’000 336,475 10,284 346,759	31 March 2020 HK$’000 –
		–
		233,708 5,061 16,128 87,857
		342,754
		342,754
		31 March 2020 HK$’000 342,754 –
		342,754

The Group’s variable-rate bank borrowings carry interest at a floating interest rate plus credit spread per annum (2020: same).

Other borrowings of HK$10,284,000 (2020: nil) is secured, interest bearing at a fixed rate per annum and repayable within one year.

• 41 -

NOTES TO THE CONSOLIDATED FINANCIAL INFORMATION (CONTINUED)

17. BORROWINGS (CONTINUED)

Borrowings of the Group are denominated in the following currencies:

HK$ US$	As at 2021 HK$’000 200,104 146,655 346,759	31 March 2020 HK$’000 276,689 66,065
		342,754

18. CAPITAL COMMITMENTS

The Group had the following capital commitments at the end of the reporting period:

	As at 31 March	As at 31 March
	2021		2020
	HK$’000	HK$’000
Contracted, but not provided for:
Leasehold improvements	386		1,606
Office equipment	–		32
	386		1,638

• 42 -

MANAGEMENT DISCUSSION AND ANALYSIS

BUSINESS REVIEW AND PROSPECT

The Group was principally engaged in (i) computer and peripheral products business and (ii) financial services business.

(i) Computer and peripheral products business

During the year under review, the global market has been sluggish and volatile due to the ongoing China-U.S. trade war, the novel coronavirus (“ COVID-19 ”) pandemic and the global economic slowdown. The Group operates in the computer and peripheral products industry which is dynamic and competitive and there have been constant changes in new technologies in the industry. The industry was challenging and the overall market competition was intensive during the year under review. Attributed to these market conditions, the Group effectively made good use of business and management strategies and appropriate inventory management to reduce the risk arising from the rapid changes of the market. The well-established relationship with vendors, customers, business, network and competent management team enable the Group to overcome these challenges. The Group’s overall revenue in the business segment of computer and peripheral products increased accordingly during the year under review, increased from approximately HK$904.0 million to approximately HK$1,976.3 million, representing an increment of approximately 118.6%. In view of such market conditions, the Group continuously keeps on tight control of its operations. The Group focused on enhancing operation efficiency and implementing various cost control measures. The Group also managed to further enhance its long term and close business relationships with suppliers and customers. The Group continues to monitor the market trends and takes prompt and appropriate actions to adjust our business strategies and allocates resources effectively under different market conditions.

(ii) Financial services business

The financial services business segment that the Group operates mainly includes securities brokerage business, advisory services business and money lending business. For the year ended 31 March 2021, the Group recorded an overall revenue of approximately HK$47.3 million (2020: approximately HK$29.6 million) and an operating profit of approximately HK$21.9 million (2020: approximately HK$14.4 million) for the business segment of financial services business.

• 43 -

The global economic and financial market continued to fluctuate and the China’s economic slowdown which brought uncertainties to the overall business environment. During the year under review, the Group recorded a revenue of approximately HK$29.4 million (2020: approximately HK$17.5 million) and an operating profit of approximately HK$10.8 million (2020: approximately HK$6.1 million) respectively in respect of the Group’s securities brokerage business. The revenue as at 31 March 2021 was nil (2020: nil) and the Group recorded an operating loss of approximately HK$0.5 million (2020: approximately HK$2.4 million) respectively in respect of the Group’s advisory services business.

The Group engaged in money lending business through an indirect wholly-owned subsidiary of the Company, which holds a money lender licence under the Money Lenders Ordinance (Chapter 163 of the Laws of Hong Kong) to carry out money lending business in Hong Kong. The Group is able to engage in the provision of loan financing including but not limited to personal loans and business loans under the scope of Money Lenders Ordinance, Chapter 163 of the Laws of Hong Kong. The Group recorded a revenue of approximately HK$17.9 million (2020: approximately HK$12.1 million) and an operating profit of approximately HK$11.6 million (2020: approximately HK$10.7 million) in respect of the Group’s money lending business.

LOOKING AHEAD

The outbreak of COVID-19 epidemic has generated unprecedented challenges to the global economy. However, with the recent implementation of vaccine programme for COVID-19, signs of recovery are shown and most countries around the world have introduced measures to stimulate economic growth. The Group will continue to closely monitor the development of COVID-19 on the industries the Group operates in, and plan proactively to its impact on the financial position and operating results of the Group.

Looking ahead, the management are confident with the future development of the Group. The Group will continue to adhere to our principle of steady development, and positively cope with any challenges and capture suitable opportunities. The Group will continue to dedicate to exploiting new business opportunities in other sectors from time to time, such as other financial services sectors or other business sectors, in order to further diversify and broaden revenue sources of the Group and generate fabulous returns and long-term values for the Shareholders.

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FINANCIAL REVIEW

Revenue and Gross Profit Margin

Revenue by business segments for the Group’s revenue for the year ended 31 March 2021 is as follows:

• Computer and peripheral products business: approximately HK$1,976.3 million, being an increase of approximately HK$1,072.3 million when compared to the previous year of approximately HK$904.0 million

• Financial services business (including securities brokerage business, advisory services business and money lending business): approximately HK$47.3 million, being an increase of approximately HK$17.7 million when compared to the previous year of approximately HK$29.6 million

The Group’s total revenue for the year was approximately HK$2,023.7 million, being an increase of approximately HK$1,090.1 million when compared to the previous year of approximately HK$933.6 million. The increase was mainly attributable to increase in revenue derived from computer and peripheral products business.

Gross profit margin for the year was approximately 3.1% (2020: approximately 7.1%). Decrease in gross profit margin was mainly caused by the relatively lower gross profit margin earned from computer and peripheral products business for the year.

Selling Expenses

The increase in selling expenses by approximately HK$0.6 million was mainly due to the increase in employee benefit expenses.

General and Administrative Expenses

General and administrative expenses for the year decreased by approximately HK$1.5 million from the Last Corresponding Year, which was mainly due to the decrease in short-term lease rentals of premises of approximately HK$1.8 million, entertainment expenses of approximately HK$0.6 million and travelling expenses of approximately HK$0.6 million which was partially offset by the increase in legal and professional fees.

Expected Credit Loss on Financial Assets, net

The increase in expected credit loss on financial assets by approximately HK$101.2 million was mainly attributable to increase in expected credit loss incurred from account receivables, mainly due to the issue of recoverability as a result of the global economic slowdown.

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Other (Expenses)/Income and (Losses)/Gains, net

The Group’s other expenses and losses for the year was approximately HK$1.8 million, as compared to the other income and gains in previous year of approximately HK$11.2 million. The change was mainly due to the decrease in finance income of approximately HK$9.1 million and the increase in unrealised loss on the change in fair value of equity investments at fair value through profit or loss of approximately HK$2.2 million during the year.

Finance Costs

Finance costs for the year was approximately HK$7.9 million, being a decrease of approximately HK$1.6 million when compared to the previous year of approximately HK$9.5 million. The decrease was mainly attributable to a relatively lower average bank borrowing interest rate during the year.

Income Tax Credit/(Expense)

Income tax credit for the year was approximately HK$12.5 million (2020: income tax expense of approximately HK$5.6 million). The change was mainly due to the decrease in the assessable profits and increase in deferred tax assets for the year.

(Loss)/Profit for the Year

The Group recorded loss of approximately HK$93.4 million for the Current Year, as compared to profit of approximately HK$9.7 million for the Last Corresponding Year.

(Loss)/Profit for the Year Attributable to Owners of the Company

The loss for the year attributable to owners of the Company amounted to approximately HK$93.1 million (2020: profit attributable to owners of the Company of approximately HK$5.6 million), resulted in a basic loss per share for the year of HK2.14 cent (2020: basic earnings per share HK0.13 cent) and diluted loss per share for the year of HK2.14 cent (2020: diluted earnings per share HK0.13 cent).

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Inventories, Loan Receivables and Account Receivables

The Group has enhanced the inventory control policy to manage business risks associated with its principal activities. Inventories as at 31 March 2021 was approximately HK$13.7 million (31 March 2020: approximately HK$60.9 million). The overall inventories turnover days remained healthy and reasonable for the year under review. The Group recorded an impairment of inventories of approximately HK$1.7 million for the year ended 31 March 2021.

As at 31 March 2021, the Group’s loan receivables amounted to HK$180.6 million (31 March 2020: approximately HK$179.4 million), which arise from its money lending business in Hong Kong. The Group recorded an expected credit loss of approximately HK$5.9 million for the year ended 31 March 2021.

The Group continues to closely monitor the settlements from its customers on a going basis to manage the credit risk from time to time. The Group’s account receivables decreased by approximately HK$56.7 million, from approximately HK$283.0 million as at 31 March 2020 to approximately HK$226.3 million as at 31 March 2021. The Group recorded an expected credit loss on trade receivables and cash client receivables of approximately HK$88.0 million and approximately HK$12.4 million respectively for the year ended 31 March 2021.

Liquidity, Financial Resources, Working Capital and Treasury Policy

The Group maintained a solid financial position during the year. As at 31 March 2021, cash and cash equivalents of the Group amounted to approximately HK$68.3 million (31 March 2020: approximately HK$117.7 million), and the Group’s net assets amounted to approximately HK$533.9 million (31 March 2020: approximately HK$626.9 million). As at 31 March 2021, there was approximately HK$346.8 million outstanding borrowings balance (31 March 2020: approximately HK$342.8 million).

As at 31 March 2021, non-current assets of the Group amounted to approximately HK$341.5 million (31 March 2020: approximately HK$345.4 million), the Group’s current assets amounted to approximately HK$594.5 million (31 March 2020: approximately HK$716.6 million), and net current assets as at 31 March 2021 amounted to approximately HK$192.5 million (31 March 2020: approximately HK$282.4 million). As at 31 March 2021, the current ratio was approximately 1.5 (31 March 2020: approximately 1.7) (calculated by dividing the total current assets by total current liabilities).

The Group’s objectives when managing capital are to safeguard the Group’s ability to continue as a going concern in order to provide returns for shareholders and benefits for other stakeholders and to maintain an optimal capital structure to reduce the cost of capital. The Group monitors capital on the basis of the gearing ratio. This ratio is calculated as net debt divided by total capital (the sum of total equity and net debt), as shown in the consolidated statement of financial position. Net debt is calculated as total borrowings less cash and cash equivalents and pledged bank deposits. The gearing ratio as at 31 March 2021 was approximately 30.7% (31 March 2020: approximately 22.7%).

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The Group has adopted a prudent treasury policy and thus maintained a healthy liquidity position throughout the year. The Group strives to reduce credit risk by performing ongoing credit assessments and evaluations of the financial status of its customers. To manage liquidity risk, 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.

The Group’s financial resources are sufficient to support its business operations.

Capital Structure and Fund Raising Activities

The capital of the Company comprises only ordinary shares.

No fund raising activities conducted by the Company during the year.

As at 31 March 2021 and 2020, the number of ordinary shares of the Company in issued and fully paid was 4,384,782,000.

Capital Commitments

Other than disclosed in Note 18 to the consolidated financial information in this announcement, the Group had no other capital commitments as at 31 March 2021.

Pledge of Assets

As at 31 March 2021, the Group’s other borrowings of HK$10.3 million and bank borrowings of HK$321.5 million are secured by financial assets at fair value through profit or loss with carrying value of HK$8.1 million and the Group’s owned properties situated in Hong Kong of HK$254.3 million and pledged bank deposits of HK$41.4 million.

As at 31 March 2020, the Group’s bank borrowings of HK$233.0 million are secured by mortgage over the Group’s owned properties situated in Hong Kong of HK$263.8 million. In addition, the Group’s bank borrowings of HK$80.2 million are secured by pledged bank deposits of HK$40.9 million.

Foreign Currency Exposure

The Group exposes to certain foreign currency risk primarily with respect to Renminbi (“ RMB ”) and United States dollar (“ US$ ”) as most of the transactions are denominated in Hong Kong dollar (“ HK$ ”), RMB and US$. The Group is exposed to foreign exchange risk primarily through expenses transactions that are denominated in currencies other than the functional currencies of the group companies. During the year, the Group generated a foreign exchange loss of approximately HK$1.0 million (2020: gain of approximately HK$0.9 million). The Group manages its exposures to foreign currency transactions by monitoring the level of foreign currency receipts and payments and ensures that the net exposure to foreign exchange risk is kept to an acceptable level. During the year, the Group has not used any forward exchange contract to hedge against foreign exchange risk as management considers its exposure as not significant. The Group will continue to manage the net exposure of foreign exchange risk to keep at an acceptable level from time to time.

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Contingent Liabilities

The Group did not have any significant contingent liabilities as at 31 March 2021 and 2020.

Employees and Emolument Policy

As at 31 March 2021, the Group had a total of 38 employees. Employee benefit expenses, including Directors’ remuneration for the year ended 31 March 2021, totally amounted to approximately HK$17.3 million (2020: approximately HK$16.6 million). The Group’s remuneration policy is based on position, duties and performance of the employees. The employees’ remuneration varies according to their positions, which may include salary, overtime allowance, bonus and various subsidies. The Group offers a comprehensive and competitive remuneration and benefits package to all its employees. In addition, the Group has adopted a share option scheme and a share award scheme for the purpose of providing incentives and rewards to eligible persons who contribute to the success of the Group’s operations. The Group has also adopted other employee benefit including a provident fund scheme for its employees in Hong Kong, as required under the Mandatory Provident Fund Schemes Ordinance, and has participated in employee pension schemes organised and governed by the relevant local governments for its employees in the PRC.

Dividend

The Board does not recommend the payment of final dividend for the year ended 31 March 2021.

Change of Company Name

Pursuant to a special resolution passed at an extraordinary general meeting held on 15 April 2021, the shareholders have approved to change the name of the Company from Huabang Financial Holdings Limited to Huabang Technology Holdings Limited. Reference is made to the announcements of the Company dated 18 February 2021, 15 April 2021 and 8 June 2021 and the circular of the Company dated 23 March 2021.

COMPETING INTEREST OF DIRECTORS, CONTROLLING SHAREHOLDERS AND THEIR RESPECTIVE ASSOCIATES

For the year ended 31 March 2021, none of the Directors, controlling shareholders of the Company or any of their respective associates (as defined under the Listing Rules) is considered to have interest in a business which competes or is likely to compete, either directly or indirectly, with the business of the Group and any other conflicts of interests, which is required to be disclosed under the Listing Rules.

CODE OF CONDUCT REGARDING SECURITIES TRANSACTIONS BY DIRECTORS

The Company had adopted a code of conduct regarding securities transactions by directors on terms no less exacting than the required standard of dealings according to the Model Code for Securities Transactions by Directors of Listed Issuers as set out in Appendix 10 to the Listing Rules. The Company had made specific enquiries of all Directors and was not aware of any non-compliance with the required standard of dealings and its code of conduct regarding securities transactions by Directors during the year ended 31 March 2021.

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

During the Current Year, neither the Company nor any of its subsidiaries purchased, sold or redeemed any of the Company’s listed securities.

CORPORATE GOVERNANCE

The Board is committed to achieving high standards of corporate governance to safeguard the interest of the Company’s shareholders and to enhance corporate value and accountability. During the year ended 31 March 2021, the Company has applied the principles and complied with the applicable code provisions of the Corporate Governance Code (the “ CG Code ”) as set out in Appendix 14 to the Listing Rules, except in relation to CG Code provisions A.2.1, as more particularly described below.

CG Code provision A.2.1

Code provision A.2.1 stipulates that the roles of Chairman and CEO should be separate and should not be performed by the same individual. The division of responsibilities between the Chairman and CEO should be clearly established and set out in writing. The current Chairman and CEO of the Company is Mr. George Lu. The Board believes that vesting the roles of both Chairman and CEO in the same person will not impair the balance of power and authority between the Directors and the management of the Company. Mr. George Lu has extensive experience in the industry which is beneficial and of great value to the overall development of the Company. The Board is of the view that although the Chairman is also the CEO, the balance of power and authority is ensured by the operation of the Board, which comprises experienced individuals and meets from time to time to discuss issues affecting operation of the Company. The Board also believes that the current structure is conducive to strong and consistent leadership, enabling the Company to make and implement decisions promptly and efficiently.

REVIEW BY AUDIT COMMITTEE

The Company has established an audit committee with written terms of reference set out in the CG Code. The principle duties of the audit committee include the review and supervision of the Group’s financial reporting matters, risk management and internal control procedures. The audit committee of the Board (the “ Audit Committee ”) comprises three independent Non-Executive Directors, namely Mr. Loo Hong Shing Vincent (Chairman of the Audit Committee), Mr. Zhu Shouzhong and Mr. Li Huaqiang. The Audit Committee has reviewed the accounting principles and practices adopted by the Group and discussed internal controls and financial reporting matters including a review of the consolidated financial statements of the Group for the year ended 31 March 2021 with the Directors and the external auditors of the Company.

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REVIEW OF PRELIMINARY ANNOUNCEMENT

The figures in respect of the preliminary announcement of the Group’s results for the year ended 31 March 2021 have been agreed by the Group’s auditor, Baker Tilly Hong Kong Limited, to the amounts set out in the Group’s consolidated financial statements for the year. The work performed by Baker Tilly Hong Kong Limited 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 Baker Tilly Hong Kong Limited on the preliminary announcement. The Audit Committee has reviewed the annual results for the year ended 31 March 2021.

ANNUAL GENERAL MEETING

The annual general meeting of the Company will be held on Wednesday, 25 August 2021. Details of the annual general meeting will be set out in the notice of the annual general meeting which will be published and issued to shareholders in due course.

CLOSURE OF REGISTER OF MEMBERS

For determining the entitlement to attend and vote at the annual general meeting, the register of members of the Company will be closed from Friday, 20 August 2021 to Wednesday, 25 August 2021 (both days inclusive), during which period no transfer of shares of the Company will be registered. In order to qualify for attending and voting at the forthcoming annual general meeting of the Company, all share transfer documents accompanied by the relevant share certificates must be lodged with the Company’s branch share registrar in Hong Kong, Tricor Investor Services Limited, at Level 54, Hopewell Centre, 183 Queen’s Road East, Hong Kong for registration not later than 4:30 p.m. on 19 August 2021.

PUBLICATION OF THE ANNUAL RESULTS AND 2021 ANNUAL REPORT ON THE WEBSITES OF THE STOCK EXCHANGE AND THE COMPANY

This annual results announcement is published on the websites of the Stock Exchange and the Company, and the annual report of the Company for the year ended 31 March 2021 containing all the information required by the Listing Rules will be despatched to the shareholders of the Company and published on the respective websites of the Stock Exchange and the Company in due course.

By order of the Board Huabang Technology Holdings Limited George Lu Chairman and Chief Executive Officer

Hong Kong, 22 June 2021

As at the date of this announcement, the Executive Directors of the Company are Mr. George Lu and Ms. Shen Wei, the Non-Executive Director of the Company is Mr. Pang Chung Fai Benny, and the independent Non-Executive Directors of the Company are Mr. Loo Hong Shing Vincent, Mr. Zhu Shouzhong and Mr. Li Huaqiang.

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