Hunlicar Group Limited — Interim / Quarterly Report 2022

Dec 14, 2021

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

2021 INTERIM REPORT

CONTENTS

Page

• 2 CORPORATE INFORMATION

• 5 CONDENSED CONSOLIDATED INCOME STATEMENT

• 6 CONDENSED CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME

• 7 CONDENSED CONSOLIDATED STATEMENT OF FINANCIAL POSITION

• 9 CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY

• 11 CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS

• 12 NOTES TO INTERIM CONDENSED CONSOLIDATED FINANCIAL INFORMATION

• 32 MANAGEMENT DISCUSSION AND ANALYSIS

• 39 OTHER INFORMATION

CORPORATE INFORMATION

EXECUTIVE DIRECTORS

Mr. George Lu (Chief Executive Officer and Chairman) Ms. Shen Wei (resigned on 4 August 2021)

NON-EXECUTIVE DIRECTOR

Mr. Pang Chung Fai Benny (resigned on 30 October 2021)

INDEPENDENT NON-EXECUTIVE DIRECTORS

Mr. Loo Hong Shing Vincent Mr. Zhu Shouzhong Mr. Li Huaqiang

AUTHORISED REPRESENTATIVES

Mr. Wong Kwok Ming Mr. George Lu

COMPANY SECRETARY

Mr. Wong Kwok Ming

AUDIT COMMITTEE

Mr. Loo Hong Shing Vincent (Chairman) Mr. Zhu Shouzhong Mr. Li Huaqiang

REMUNERATION COMMITTEE

Mr. Loo Hong Shing Vincent (Chairman) Mr. George Lu Mr. Li Huaqiang

NOMINATION COMMITTEE

Mr. Loo Hong Shing Vincent (Chairman) Mr. George Lu Mr. Li Huaqiang

REGISTERED OFFICE

PO Box 309, Ugland House, Grand Cayman, KY1-1104, Cayman Islands

HEAD OFFICE AND PRINCIPAL PLACE OF BUSINESS

33/F, Enterprise Square Three 39 Wang Chiu Road Kowloon Bay Kowloon, Hong Kong

PRINCIPAL BANKERS

Bank of China (Hong Kong) Limited China Everbright Bank Co., Ltd. Hong Kong Branch China Merchants Bank Co., Ltd. Hong Kong Branch Chiyu Banking Corporation Limited Dah Sing Bank, Limited Hang Seng Bank Limited OCBC Wing Hang Bank Limited Standard Chartered Bank (Hong Kong) Limited The Hongkong and Shanghai Banking Corporation Limited

PRINCIPAL SHARE REGISTRAR AND TRANSFER OFFICE IN THE CAYMAN ISLANDS

Maples Fund Services (Cayman) Limited PO Box 1093, Boundary Hall Cricket Square Grand Cayman, KY1-1102 Cayman Islands

BRANCH SHARE REGISTRAR AND TRANSFER OFFICE IN HONG KONG

Tricor Investor Services Limited Level 54, Hopewell Centre 183 Queen’s Road East Wanchai Hong Kong

CORPORATE GOVERNANCE COMMITTEE

Mr. Wong Kwok Ming (Chairman) Mr. George Lu Mr. Loo Hong Sing Vincent

2 Huabang Technology Holdings Limited

CORPORATE INFORMATION

LEGAL ADVISERS TO THE COMPANY

As to Hong Kong law Simmons & Simmons 30/F, One Taikoo Place 979 King’s Road Hong Kong

As to Cayman Islands law Maples and Calder (Hong Kong) LLP 26/F, Central Plaza 18 Harbour Road Wanchai Hong Kong

AUDITOR

Baker Tilly Hong Kong Limited Certified Public Accountants 2/F, 625 King’s Road North Point Hong Kong

STOCK CODE

3638

COMPANY WEBSITE ADDRESS

www.huabangtechnology.com (information contained in this website does not form part of this report)

Interim Report 2021 3

INTERIM RESULTS FOR THE SIX MONTHS ENDED 30 SEPTEMBER 2021

The board of Directors (the “Board”) of Huabang Technology Holdings Limited (the “Company”) is pleased to announce the following unaudited interim condensed consolidated results of the Company and its subsidiaries (collectively, the “Group”) for the six months ended 30 September 2021 (“Current Period”) together with the unaudited comparative figures for the corresponding period in 2020 (“Last Corresponding Period”) as follows:

4 Huabang Technology Holdings Limited

CONDENSED CONSOLIDATED INCOME STATEMENT

For the six months ended 30 September 2021

		Unaudited	Unaudited
		Six months
		ended 30 September
		2021	2020
	Note	HK$’000	HK$’000
Revenue	4	1,242,516	427,398
Cost of sales		(1,216,712)	(394,801)
Gross profit		25,804	32,597
Selling expenses		(346)	(585)
General and administrative expenses		(30,581)	(20,040)
Expected credit loss on financial assets, net	5	(69,618)	(4,480)
Other income andgains, net		1,084	1,963
Operating (loss)/profit		(73,657)	9,455
Finance costs	6	(3,385)	(4,169)
Share of net loss of associates accounted for
usingequitymethod		–	(1,468)
(Loss)/profit before income tax	7	(77,042)	3,818
Income tax credit/(expense)	8	10,318	(1,572)
(Loss)/profit for the period		(66,724)	2,246
Attributable to:
Owners of the Company		(68,210)	1,473
Non-controllinginterests		1,486	773
		(66,724)	2,246
(Loss)/earnings per share attributable
to owners of the Company
Basic	9	HK(1.57) cent	HK0.03 cent
Diluted	9	HK(1.57) cent	HK0.03 cent

Interim Report 2021 5

CONDENSED CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME

For the six months ended 30 September 2021

	Unaudited
	Six months
	ended 30 September
	2021	2020
	HK$’000	HK$’000
(Loss)/profit for the period	(66,724)	2,246
Other comprehensive income
Item that may be subsequently reclassified to profit or loss
Currencytranslation differences	120	244
Total comprehensive (expense)/income for the period	(66,604)	2,490
Attributable to:
Owners of the Company	(68,090)	1,717
Non-controllinginterests	1,486	773
	(66,604)	2,490

6 Huabang Technology Holdings Limited

CONDENSED CONSOLIDATED STATEMENT OF FINANCIAL POSITION

As at 30 September 2021

		Unaudited	Audited
		30 September	31 March
		2021	2021
	Note	HK$’000	HK$’000
ASSETS
Non-current assets
Property, plant and equipment	11	260,125	265,831
Intangible assets	12	43,169	52,126
Deposits, prepayments and other receivables	15	672	691
Deferred tax assets		34,683	22,887
		338,649	341,535
Current assets
Inventories		37,098	13,690
Loan receivables	13	180,218	180,585
Account receivables	14	126,341	226,279
Deposits, prepayments and other receivables	15	46,321	34,751
Financial assets at fair value through profit or loss		932	12,263
Income tax recoverable		2,917	2,084
Bank balances held on behalf of clients		11,778	15,089
Pledged bank deposits		41,552	41,427
Cash and cash equivalents	16	87,872	68,286
		535,029	594,454
Total assets		873,678	935,989
EQUITY
Share capital	19	3,654	3,654
Other reserves		538,652	538,532
Accumulated losses		(83,637)	(15,427)
Total equity attributable to owners of the Company		458,669	526,759
Non-controllinginterests		8,603	7,117
Total equity		467,272	533,876

Interim Report 2021 7

CONDENSED CONSOLIDATED STATEMENT OF FINANCIAL POSITION (Continued)

As at 30 September 2021

		Unaudited	Audited
		30 September	31 March
		2021	2021
	Note	HK$’000	HK$’000
LIABILITIES
Non-current liabilities
Deferred tax liabilities		182	163
		182	163
Current liabilities
Account payables	17	47,161	40,035
Other payables and accrued expenses	17	2,039	4,815
Contract liabilities		10,837	2,917
Borrowings	18	338,831	346,759
Income taxpayables		7,356	7,424
		406,224	401,950
Total liabilities		406,406	402,113
Total equity and liabilities		873,678	935,989
Net current assets		128,805	192,504
Total assets less current liabilities		467,454	534,039

8 Huabang Technology Holdings Limited

CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY

For the six months ended 30 September 2021

		Unaudited Attributable to owners of the Company Other reserves Share premium Merger reserve Capital reserve Statutory reserve Exchange reserve Shares held for share award scheme Sub total (Accumulated losses)/ retained earnings Total Non- controlling interests Total equity HK$’000 HK$’000 HK$’000 HK$’000 HK$’000 HK$’000 HK$’000 HK$’000 HK$’000 HK$’000 HK$’000 Note (a) Note (b) Note (c)
	Share capital HK$’000
For 6 months ended 30 September 2020 Balance as at 1 April 2020 (audited)	3,654	502,332 50,374 2,480 1,042 3,033 (21,630) 537,631 77,681 618,966 7,957 626,923
Profit for the period Other comprehensive income Currency translation differences	– –	– – – – – – – 1,473 1,473 773 2,246 – – – – 244 – 244 – 244 – 244
Total comprehensive income Dividends paid to non-controlling shareholder	– –	– – – – 244 – 244 1,473 1,717 773 2,490 – – – – – – – – – (500) (500)
Balance as at 30 September 2020 (unaudited)	3,654	502,332 50,374 2,480 1,042 3,277 (21,630) 537,875 79,154 620,683 8,230 628,913
For 6 months ended 30 September 2021 Balance as at 1 April 2021 (audited)	3,654	502,332 50,374 2,480 1,042 3,934 (21,630) 538,532 (15,427) 526,759 7,117 533,876
(Loss)/profit for the period Other comprehensive income Currency translation differences	– –	– – – – – – – (68,210) (68,210) 1,486 (66,724) – – – – 120 – 120 – 120 – 120
Total comprehensive income/(expense)	–	– – – – 120 – 120 (68,210) (68,090) 1,486 (66,604)
Balance as at 30 September 2021 (unaudited)	3,654	502,332 50,374 2,480 1,042 4,054 (21,630) 538,652 (83,637) 458,669 8,603 467,272

Interim Report 2021 9

CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY (Continued)

For the six months ended 30 September 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 intra-group 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 its 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.

10 Huabang Technology Holdings Limited

CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS

For the six months ended 30 September 2021

	Unaudited
	Six months
	ended 30 September
	2021	2020
	HK$’000	HK$’000
Net cash flows generated from/(used in) operating activities	19,135	(25,334)
Net cash flows generated from investing activities	1,515	247
Net cash flows used in financing activities	(980)	(19,833)
Net increase/(decrease) in cash and cash equivalents	19,670	(44,920)
Cash and cash equivalents as at 1 April	68,286	117,682
Effect of foreign exchange rate changes, net	(84)	(40)
Cash and cash equivalents as at 30 September	87,872	72,722

Interim Report 2021 11

NOTES TO INTERIM CONDENSED CONSOLIDATED FINANCIAL INFORMATION

1. GENERAL INFORMATION

Huabang Technology Holdings Limited 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 Company’s shares are listed on the Main Board of the Stock Exchange (“Main Board”).

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 “Business”).

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.

This interim condensed consolidated financial information has not been audited.

2. BASIS OF PREPARATION

The interim condensed consolidated financial information has been prepared in accordance with the applicable disclosure requirements of the Rules Governing the Listing of Securities of the Stock Exchange (the “Listing Rules”) and with Hong Kong Accounting Standard 34 “Interim Financial Reporting” issued by the Hong Kong Institute of Certified Public Accountants (“HKICPA”). It should be read in conjunction with the annual financial statements for the year ended 31 March 2021, prepared in accordance with Hong Kong Financial Reporting Standards (“HKFRSs”).

The interim condensed consolidated financial information are presented in Hong Kong Dollars (“HK$”) which is the same as the functional currency of the Company.

3. ACCOUNTING POLICIES

The accounting policies adopted in the preparation of the interim condensed consolidated financial information are consistent with those followed in the preparation of the Group’s annual consolidated financial statements for the year ended 31 March 2021, except for the adoption of new and amended standards as set out below.

The following amendments to standards are mandatory for the first time for the financial period beginning 1 April 2021 and currently relevant to the Group:

Amendment to HKFRS 16 Covid-19-Related Rent Concessions Amendments to HKFRS 9, HKAS 39, Interest Rate Benchmark Reform - Phase 2 HKFRS 7, HKFRS 4 and HKFRS 16

The adoption of the above amendments to standards has had no significant effect on the interim condensed consolidated financial information and there have been no significant changes to the accounting policies applied in the interim condensed consolidated financial information.

12 Huabang Technology Holdings Limited

NOTES TO INTERIM CONDENSED CONSOLIDATED FINANCIAL INFORMATION

4. REVENUE AND SEGMENT INFORMATION

Revenue

An analysis of revenue is as follows:

An analysis of revenue is as follows:
	Unaudited
	Six months ended 30	September
	2021	2020
	HK$’000	HK$’000
Revenue from contracts with customers (Note i)	1,224,693	404,099
Revenue from other sources
Interest income calculated using the effective interest
method from:
– loan receivables	8,955	9,542
– cash client receivables	8,868	13,757
	17,823	23,299
Total revenue	1,242,516	427,398

Note:

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

	Unaudited
	Six months ended 30	September
	2021	2020
	HK$’000	HK$’000
Type of goods or services
Sales of goods	1,224,355	403,843
Service income
– Provision of underwriting and placing services	195	31
Commission income
– Provision of securities brokerage services	143	225
	1,224,693	404,099
Timing of revenue recognition
A point in time	1,224,693	404,099

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.

Interim Report 2021 13

NOTES TO INTERIM CONDENSED CONSOLIDATED FINANCIAL INFORMATION

4. REVENUE AND SEGMENT INFORMATION (Continued)

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 profit/(loss). 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 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 contracts liabilities. They exclude deferred tax liabilities, income tax payables and other unallocated liabilities, which are managed centrally.

14 Huabang Technology Holdings Limited

NOTES TO INTERIM CONDENSED CONSOLIDATED FINANCIAL INFORMATION

4. 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:

	Unaudited For the six months ended 30 September 2021	Unaudited For the six months ended 30 September 2021
	Computer and peripheral products business Financial services business HK$’000 HK$’000	Total HK$’000
Revenue from external customers Cost of sales from external customers	1,224,355 18,161 (1,216,712) –	1,242,516 (1,216,712)
7,643 18,161 Selling expenses (260) (86) General and administrative expenses (3,752) (13,006) Expected credit loss on financial assets, net 11 (69,629) Other (expenses)/income and (losses)/gains, net (74) 585 Finance costs (1,959) (80)		25,804 (346) (16,758) (69,618) 511 (2,039)
Segment profit/(loss) 1,609 (64,055)		(62,446) (1,346) (13,250)
Finance costs Unallocated expenses Loss before income tax Income tax credit Loss for the period
		(77,042) 10,318
		(66,724)

Interim Report 2021 15

NOTES TO INTERIM CONDENSED CONSOLIDATED FINANCIAL INFORMATION

4. 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)

	Unaudited For the six months ended 30 September 2020	Unaudited For the six months ended 30 September 2020
	Computer and peripheral products business Financial services business HK$’000 HK$’000	Total HK$’000
Revenue from external customers Cost of sales from external customers	403,843 23,555 (394,801) –	427,398 (394,801)
Selling expenses General and administrative expenses Expected credit loss on financial assets, net Other income and gains, net Finance costs	9,042 23,555 (585) – (4,457) (3,862) (324) (4,156) 680 1,002 (2,115) –	32,597 (585) (8,319) (4,480) 1,682 (2,115)
Segment profit	2,241 16,539	18,780 (1,468) (2,054) (11,440)
Share of net loss of associates accounted for using equity method Finance costs Unallocated expenses Profit before income tax Income tax expense Profit for the period
		3,818 (1,572)
		2,246

Interest revenue of HK$17,823,000 (Last Corresponding Period: HK$23,299,000) was included in revenue from external customers, wholly contributed by financial services business segment.

16 Huabang Technology Holdings Limited

NOTES TO INTERIM CONDENSED CONSOLIDATED FINANCIAL INFORMATION

4. 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:

	Unaudited As at 30 September 2021
	Computer and peripheral products business Financial services business Total HK$’000 HK$’000 HK$’000
Segment assets	180,335 403,007 583,342
Segment liabilities	381,155 16,735 397,890
	Audited As at 31 March 2021
	Computer and peripheral products business Financial services business Total HK$’000 HK$’000 HK$’000
Segment assets	149,149 492,464 641,613
Segment liabilities	351,244 26,763 378,007

Interim Report 2021 17

NOTES TO INTERIM CONDENSED CONSOLIDATED FINANCIAL INFORMATION

4. 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:

	Unaudited	Audited
	30 September	31 March
	2021	2021
	HK$’000	HK$’000
Segment assets	583,342	641,613
Cash and cash equivalents	1,055	1,233
Property, plant and equipment	250,707	255,638
Deposits, prepayments and other receivables	574	789
Financial assets at fair value through profit or loss	400	11,745
Deferred tax assets	34,683	22,887
Income tax recoverable	2,917	2,084
Total assets	873,678	935,989
Segment liabilities	397,890	378,007
Deferred tax liabilities	182	163
Borrowings	–	15,003
Income tax payables	7,356	7,424
Other unallocated liabilities	978	1,516
Total liabilities	406,406	402,113

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

18 Huabang Technology Holdings Limited

NOTES TO INTERIM CONDENSED CONSOLIDATED FINANCIAL INFORMATION

4. REVENUE AND SEGMENT INFORMATION (Continued)

Segment information (Continued)

Other segment information

		Unaudited
	For the six months ended 30 September 2021
	Computer	Financial
	and peripheral	services
	products business	business	Total
	HK$’000	HK$’000	HK$’000
Additions to property, plant and equipment	100	–	100
Depreciation of property, plant and equipment	804	70	874
Amortisation of intangible assets	–	114	114
Impairment of goodwill	–	8,844	8,844
		Unaudited
	For the six months ended 30		September 2020
	Computer	Financial
	and peripheral	services
	products business	business	Total
	HK$’000	HK$’000	HK$’000
Additions to property, plant and equipment	–	29	29
Depreciation of property, plant and equipment	757	68	825
Amortisation of intangible assets	–	620	620
Reversal of impairment of inventories	(122)	–	(122)

Interim Report 2021 19

NOTES TO INTERIM CONDENSED CONSOLIDATED FINANCIAL INFORMATION

5. EXPECTED CREDIT LOSS ON FINANCIAL ASSETS, NET

	Unaudited
	Six months ended 30	September
	2021	2020
	HK$’000	HK$’000
Loan receivables	367	5
Cash client receivables	69,296	4,135
Trade receivables	(11)	325
Interest receivables	(34)	15
	69,618	4,480

6. FINANCE COSTS

	Unaudited
	Six months ended 30	September
	2021	2020
	HK$’000	HK$’000
Finance costs
– Interest expenses on bank and other borrowings	3,385	4,169

7. (LOSS)/PROFIT BEFORE INCOME TAX

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

	Unaudited
	Six months ended 30	September
	2021	2020
	HK$’000	HK$’000
Cost of inventories sold	1,216,712	394,923
Auditor’s remuneration	589	614
Depreciation of property, plant and equipment	5,821	5,827
Amortisation of intangible assets	113	620
Employee benefit expenses (Note)	8,190	7,101
Service fees for broker supplied systems	680	700
Impairment of goodwill	8,844	–
Reversal of impairment of inventories	–	(122)

Note:

For the six months ended 30 September 2020, COVID-19 related government grants under “Employment Support Scheme” of the Hong Kong government, amounting to HK$821,000, has been offset against employee benefit expenses.

20 Huabang Technology Holdings Limited

NOTES TO INTERIM CONDENSED CONSOLIDATED FINANCIAL INFORMATION

8. INCOME TAX (CREDIT)/EXPENSE

INCOME TAX (CREDIT)/EXPENSE
	Unaudited
	Six months ended 30	September
	2021	2020
	HK$’000	HK$’000
Current income tax
– Hong Kong profits tax	1,459	2,605
Deferred income tax	(11,777)	(1,033)
	(10,318)	1,572

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%.

9. (LOSS)/EARNINGS PER SHARE

The calculation of basic loss per share (Last Corresponding Period: basic earnings per share) is based on the loss attributable to owners of the Company for the Current Period of approximately HK$68,210,000 (Last Corresponding Period: profit of approximately HK$1,473,000) and of the weighted average number of 4,342,038,000 (Last Corresponding Period: 4,342,038,000) ordinary shares in issue during the Current Period.

Diluted loss per share (Last Corresponding Period: diluted earnings per share) was same as the basic loss per share (Last Corresponding Period: basic earnings per share) as there were no potential dilutive ordinary shares in existence during the reporting periods.

10. DIVIDENDS

The Board does not recommend any interim dividend for the Current Period (Last Corresponding Period: nil).

Interim Report 2021 21

NOTES TO INTERIM CONDENSED CONSOLIDATED FINANCIAL INFORMATION

11. PROPERTY, PLANT AND EQUIPMENT

During the Current Period, there was additions of approximately HK$100,000 (Last Corresponding Period: approximately HK$29,000) for property, plant and equipment.

Also, during the Current Period and the Last Corresponding Period, there was no disposal of property, plant and equipment which resulting in no gain/loss on disposal.

12. INTANGIBLE ASSETS

INTANGIBLE ASSETS
		Money	Contractual
		lending	customer
	Goodwill	license	relationship	Total
	HK$’000	HK$’000	HK$’000	HK$’000
30 September 2021
Opening carrying amount	52,013	113	–	52,126
Amortisation	–	(113)	–	(113)
Impairment	(8,844)	–	–	(8,844)
Closing carrying amount	43,169	–	–	43,169
At 30 September 2021
Cost	56,654	1,703	2,756	61,113
Accumulated amortisation and
impairment	(13,485)	(1,703)	(2,756)	(17,944)
Net carrying amount	43,169	–	–	43,169
		Money	Contractual
		lending	customer
	Goodwill	license	relationship	Total
	HK$’000	HK$’000	HK$’000	HK$’000
31 March 2021
Opening carrying amount	52,013	453	788	53,254
Amortisation	–	(340)	(788)	(1,128)
Closing carrying amount	52,013	113	–	52,126
At 31 March 2021
Cost	56,654	1,703	2,756	61,113
Accumulated amortisation and
impairment	(4,641)	(1,590)	(2,756)	(8,987)
Net carrying amount	52,013	113	–	52,126

22 Huabang Technology Holdings Limited

NOTES TO INTERIM CONDENSED CONSOLIDATED FINANCIAL INFORMATION

12. INTANGIBLE ASSETS (Continued)

The Group tests goodwill annually for impairment or more frequently if there are indications that goodwill might be impaired.

During the six months ended 30 September 2021, the Group recognised an impairment loss of approximately HK$8,844,000 in relation to goodwill arising on acquisition of Huabang Securities Limited (“Huabang Securities”) resulting in the carrying amount of the cash generating unit being written down to its recoverable amount. The impairment loss of goodwill was resulted from decrease in value-in-use of Huabang Securities. No impairment loss has been recognised during the year ended 31 March 2021.

13. LOAN RECEIVABLES

LOAN RECEIVABLES
	Unaudited	Audited
	30 September	31 March
	2021	2021
	HK$’000	HK$’000
Loan receivables	194,530	194,530
Less: Impairment
– Stage 1	(1,065)	(1,065)
– Stage 2	–	–
– Stage 3	(13,247)	(12,880)
	180,218	180,585

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.

Interim Report 2021 23

NOTES TO INTERIM CONDENSED CONSOLIDATED FINANCIAL INFORMATION

14. ACCOUNT RECEIVABLES

	Unaudited	Audited
	30 September	31 March
	2021	2021
	HK$’000	HK$’000
Trade receivables (Note a)	87,677	104,782
Cash client receivables (Note b)	244,578	258,375
Due from clearinghouse (Note c)	–	341
	332,255	363,498
Less: Impairment	(205,914)	(137,219)
	126,341	226,279

Account receivables are denominated in the following currencies:

		Unaudited	Audited
	30	September	31 March
		2021	2021
		HK$’000	HK$’000
HK$		126,341	209,775
US$		–	16,504
		126,341	226,279

Notes:

(a) Analysis of trade receivables

The Group generally grants credit periods up to 60 days to the customers of trading business. The aging analysis of relevant trade receivables based on invoice date is as follows:

	Unaudited	Audited
	30 September	31 March
	2021	2021
	HK$’000	HK$’000
1 – 30 days	–	1,896
31 – 60 days	–	–
61 – 90 days	–	–
91 – 180 days	–	–
Over 180 days	87,677	102,886
	87,677	104,782
Less: Impairment	(87,677)	(88,278)
	–	16,504

24 Huabang Technology Holdings Limited

NOTES TO INTERIM CONDENSED CONSOLIDATED FINANCIAL INFORMATION

14. ACCOUNT RECEIVABLES (Continued)

Notes: (continued)

(b) Analysis of cash client receivables

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

	Unaudited	Audited
	30 September	31 March
	2021	2021
	HK$’000	HK$’000
Cash client receivables	244,578	258,375
Less: Impairment
– Stage 1	(15)	(9)
– Stage 2	(5,291)	(10,896)
– Stage 3	(112,931)	(38,036)
	126,341	209,434

At 30 September 2021, the Group held securities with an aggregate fair value of HK$316,057,000 (31 March 2021: HK$404,232,000) 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 of the Company, the aging analysis does not give additional value in view of the nature of securities brokerage business.

• (c) Due from clearing house

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 securities brokerage business.

Interim Report 2021 25

NOTES TO INTERIM CONDENSED CONSOLIDATED FINANCIAL INFORMATION

15. DEPOSITS, PREPAYMENTS AND OTHER RECEIVABLES

	Unaudited	Audited
	30 September	31 March
	2021	2021
	HK$’000	HK$’000
Non-current
Other non-current deposits	467	486
Other assets	205	205
	672	691
Current
Prepayments	27,995	854
Deposits and other receivables	3,975	13,855
Interest receivables	14,961	20,686
	46,931	35,395
Less: Impairment	(610)	(644)
	46,321	34,751
Total deposits, prepayments and other receivables	46,993	35,442

Deposits, prepayments and other receivables are denominated in the following currencies:

		Unaudited	Audited
	30	September	31 March
		2021	2021
		HK$’000	HK$’000
HK$		42,939	23,648
RMB		175	–
US$		3,879	11,794
		46,993	35,442

26 Huabang Technology Holdings Limited

NOTES TO INTERIM CONDENSED CONSOLIDATED FINANCIAL INFORMATION

16. CASH AND CASH EQUIVALENTS

Cash and cash equivalents are denominated in the following currencies:

	Unaudited	Audited
	30 September	31 March
	2021	2021
	HK$’000	HK$’000
Cash on hand
HK$	35	65
US$	57	58
Israeli Shekel (“ILS”)	4	4
	96	127
Cash at banks
HK$	30,145	16,448
RMB	354	631
New Taiwan Dollar (“TWD”)	27	27
US$	57,250	51,053
	87,776	68,159
	87,872	68,286

The effective interest rate on cash at banks was 0.1% (31 March 2021: 1.0%) per annum.

The conversion of bank and cash balances denominated in RMB into foreign currencies in the PRC and the remittance of these deposits or cash out of the PRC are subject to the relevant rules and regulations of foreign exchange control promulgated by the PRC government. As at 30 September 2021, the Group’s cash at banks of approximately HK$297,000 (31 March 2021: approximately HK$576,000) was deposited at banks in the PRC.

As at 30 September 2021, the Group pledged approximately HK$41,552,000 (31 March 2021: approximately HK$41,427,000), which is denominated in US$, to secure the borrowings (Note 18). The pledged bank deposits will be released upon the settlement of relevant borrowings.

As at 30 September 2021 and 31 March 2021, no impairment was made on cash and cash equivalents.

Interim Report 2021 27

NOTES TO INTERIM CONDENSED CONSOLIDATED FINANCIAL INFORMATION

17. ACCOUNT PAYABLES, OTHER PAYABLES AND ACCRUED EXPENSES

	Unaudited	Audited
	30 September	31 March
	2021	2021
	HK$’000	HK$’000
Trade payables	31,110	24,329
Cash client payables (Note a)	11,679	15,706
Due to clearinghouse (Note b)	4,372	–
Total account payables	47,161	40,035
Accrued expenses	1,985	4,193
Other payables	54	622
Total otherpayables and accrued expenses	2,039	4,815
Total account payables, other payables and accrued expenses	49,200	44,850

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 Hong Kong Securities Clearing Company Limited (“HKSCC”), the Group has offset the gross amount of the account receivables from and the gross amount of the account payables to HKSCC.

• (c) As at 30 September 2021 and 31 March 2021, 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:

		Unaudited	Audited
	30	September	31 March
		2021	2021
		HK$’000	HK$’000
HK$		18,024	18,398
RMB		24	811
US$		31,152	25,641
		49,200	44,850

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

28 Huabang Technology Holdings Limited

NOTES TO INTERIM CONDENSED CONSOLIDATED FINANCIAL INFORMATION

18. BORROWINGS

BORROWINGS
	Unaudited	Audited
	30 September	31 March
	2021	2021
	HK$’000	HK$’000
Bank borrowings	338,831	336,475
Other borrowings	–	10,284
	338,831	346,759
Analysed as:
– Secured	338,831	331,803
– Unsecured	–	14,956
	338,831	346,759

As at 30 September 2021, the Group’s bank borrowings of HK$338,831,000 are secured by the Group’s owned properties situated in Hong Kong of HK$249,606,000 and pledged bank deposits of HK$41,552,000.

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.

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.

Interim Report 2021 29

NOTES TO INTERIM CONDENSED CONSOLIDATED FINANCIAL INFORMATION

18. 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:

	Unaudited	Audited
	30 September	31 March
	2021	2021
	HK$’000	HK$’000
The carrying amounts of other borrowings are repayable:
– Within oneyear	–	10,284
	–	10,284
The carrying amounts of bank borrowings that contain a
repayment on demand clause (shown under current liabilities)
are repayable:
– Within one year	235,831	228,997
– Between one and two years	4,478	4,478
– Between two and fiveyears	98,522	103,000
	338,831	336,475
	338,831	346,759

The exposure of the Group’s borrowings are as follows:

	Unaudited	Audited
	30 September	31 March
	2021	2021
	HK$’000	HK$’000
Variable-rate borrowings	338,831	336,475
Fixed-rate borrowings	–	10,284
	338,831	346,759

As at 30 September 2021, the Group’s variable-rate bank borrowings carry interest at a floating interest rate plus credit spread per annum (31 March 2021: same).

As at 31 March 2021, other borrowings of HK$10,284,000 is secured, interest bearing at a fixed rate per annum and repayable within one year.

30 Huabang Technology Holdings Limited

NOTES TO INTERIM CONDENSED CONSOLIDATED FINANCIAL INFORMATION

18. BORROWINGS (Continued)

Borrowings of the Group are denominated in the following currencies:

		Unaudited	Audited
	30	September	31 March
		2021	2021
		HK$’000	HK$’000
HK$		157,219	200,104
US$		181,612	146,655
		338,831	346,759

19. SHARE CAPITAL

Authorised shares:

As at 30 September 2021, the total authorised number of ordinary shares is 96,000 million shares (31 March 2021: 96,000 million shares) with a par value of HK$0.0008333 per share (31 March 2021: HK$0.0008333 per share).

	Unaudited	Unaudited	Audited	Audited
	30 September 2021		31 March	2021
	Number of		Number of
	shares	Amount	shares	Amount
	’000	HK$’000	’000	HK$’000
Issued and fully paid:
At the beginning and end of period/year	4,384,782	3,654	4,384,782	3,654

20. CAPITAL COMMITMENTS

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

	Unaudited	Audited
	30 September	31 March
	2021	2021
	HK$’000	HK$’000
Contracted, but not provided for:
Leasehold improvements	286	386

Interim Report 2021 31

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 period under review, the global market has been sluggish and volatile due to the ongoing China-U.S. trade war, the outbreak of 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 period 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 period under review, increased from approximately HK$403.8 million to approximately HK$1,224.4 million, representing an increment of approximately 203.2%. 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 Current Period, the Group recorded an overall revenue of approximately HK$18.2 million (Last Corresponding Period: approximately HK$23.6 million) and a segment loss of approximately HK$64.1 million (Last Corresponding Period: segment profit of approximately HK$16.5 million) for the business segment of financial services business.

32 Huabang Technology Holdings Limited

MANAGEMENT DISCUSSION AND ANALYSIS

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 period under review, the Group recorded a revenue of approximately HK$9.2 million (Last Corresponding Period: approximately HK$14.1 million) and a segment loss of approximately HK$71.7 million (Last Corresponding Period: segment profit of approximately HK$7.3 million) respectively in respect of the Group’s securities brokerage business. The revenue was nil (Last Corresponding Period: nil) and the Group recorded a segment loss of approximately HK$0.5 million (Last Corresponding Period: approximately HK$0.1 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$9.0 million (Last Corresponding Period: approximately HK$9.5 million) and a segment profit of approximately HK$8.1 million (Last Corresponding Period: approximately HK$9.3 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 COVID-19 vaccination programme, 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 in 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.

Interim Report 2021 33

MANAGEMENT DISCUSSION AND ANALYSIS

FINANCIAL REVIEW

Revenue and Gross Profit Margin

Revenue by business segments for the Group’s revenue for the Current Period is as follows:

• Computer and peripheral products business: approximately HK$1,224.4 million, being an increase of approximately HK$820.6 million when compared to the Last Corresponding Period of approximately HK$403.8 million

• Financial services business (including securities brokerage business, advisory services business and money lending business): approximately HK$18.2 million, being a decrease of approximately HK$5.4 million when compared to the Last Corresponding Period of approximately HK$23.6 million

The Group’s total revenue for the Current Period was approximately HK$1,242.5 million, being an increase of approximately HK$815.1 million when compared to the Last Corresponding Period of approximately HK$427.4 million. The increase was mainly attributable to increase in revenue derived from computer and peripheral products business.

Gross profit margin for the Current Period was approximately 2.1% (Last Corresponding Period: approximately 7.6%). Decrease in gross profit margin was mainly caused by the relatively lower gross profit margin earned from computer and peripheral products business for the Current Period.

Selling Expenses

The decrease in selling expenses by approximately HK$0.2 million was mainly due to the decrease in employee benefit expenses.

General and Administrative Expenses

General and administrative expenses for the Current Period increased by approximately HK$10.5 million from the Last Corresponding Period, which was mainly due to the increase in employee benefit expenses of approximately HK$1.4 million and impairment of goodwill of approximately HK$8.8 million.

Expected Credit Loss on Financial Assets, net

The increase in expected credit loss on financial assets by approximately HK$65.1 million was mainly attributable to the increase in expected credit loss incurred from cash client receivables, mainly due to the stock market volatility during the Current Period.

34 Huabang Technology Holdings Limited

MANAGEMENT DISCUSSION AND ANALYSIS

Other Income and Gains, net

The Group’s other income and gains for the Current Period was approximately HK$1.1 million, being a decrease of approximately HK$0.9 million when compared to the Last Corresponding Period of approximately HK$2.0 million. The decrease was mainly due to the decrease in handling fee income and increase in unrealised loss on the change in fair value of equity investment at fair value through profit or loss which was partially offset by the increase in realised gain on disposal of equity investment at fair value through profit or loss during the Current Period.

Finance Costs

Finance costs for the Current Period was approximately HK$3.4 million, being a decrease of approximately HK$0.8 million when compared to the Last Corresponding Period of approximately HK$4.2 million. The decrease was mainly attributable to a relatively lower average interest rate on bank borrowings during the Current Period.

Income Tax Credit/(Expense)

Income tax credit for the Current Period was approximately HK$10.3 million (Last Corresponding Period: income tax expense of approximately HK$1.6 million). The change was mainly due to the decrease in the assessable profits and increase in deferred tax assets for the Current Period.

(Loss)/Profit for the Period

The Group recorded loss of approximately HK$66.7 million for the Current Period, as compared to profit of approximately HK$2.2 million for the Last Corresponding Period.

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

The loss for the Current Period attributable to owners of the Company amounted to approximately HK$68.2 million (Last Corresponding Period: profit attributable to owners of the Company of approximately HK$1.5 million), resulted in a basic loss per share for the Current Period of HK1.57 cent (Last Corresponding Period: basic earnings per share HK0.03 cent) and diluted loss per share for the Current Period of HK1.57 cent (Last Corresponding Period: diluted earnings per share HK0.03 cent).

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 30 September 2021 was approximately HK$37.1 million (31 March 2021: approximately HK$13.7 million). The overall inventories turnover days remained healthy and reasonable for the period under review.

As at 30 September 2021, the Group’s loan receivables amounted to approximately HK$180.2 million (31 March 2021: approximately HK$180.6 million), which arise from its money lending business in Hong Kong. The Group recorded an expected credit loss of approximately HK$0.4 million for the Current Period.

Interim Report 2021 35

MANAGEMENT DISCUSSION AND ANALYSIS

The Group continues to closely monitor the settlements from its customers on an ongoing basis to manage the credit risk from time to time. As at 30 September 2021, include in the account receivables, there are trade receivables, cash client receivables and clearing house receivables, amounted to nil (31 March 2021: approximately HK$16.5 million), approximately HK$126.3 million (31 March 2021: approximately HK$209.4 million) and nil (31 March 2021: approximately HK$0.3 million), respectively. Trade receivables are arising from its computer and peripheral products business. Cash client receivables and clearing house receivables are arising from its securities brokerage business. The Group recorded a reversal of expected credit loss on trade receivables of approximately HK$0.1 million for the Current Period. The Group recorded an expected credit loss on cash client receivables of approximately HK$69.3 million for the Current Period. There is no expected credit loss for clearing house receivables.

Liquidity, Financial Resources, Working Capital and Treasury Policy

The Group maintained a solid financial position during the Current Period. As at 30 September 2021, cash and cash equivalents of the Group amounted to approximately HK$87.9 million (31 March 2021: approximately HK$68.3 million), and the Group’s net assets amounted to approximately HK$467.3 million (31 March 2021: approximately HK$533.9 million). As at 30 September 2021, there was approximately HK$338.8 million outstanding borrowings balance (31 March 2021: approximately HK$346.8 million).

As at 30 September 2021, non-current assets of the Group amounted to approximately HK$338.6 million (31 March 2021: approximately HK$341.5 million), the Group’s current assets amounted to approximately HK$535.0 million (31 March 2021: approximately HK$594.5 million), and net current assets as at 30 September 2021 amounted to approximately HK$128.8 million (31 March 2021: approximately HK$192.5 million). As at 30 September 2021, the current ratio was approximately 1.3 (31 March 2021: approximately 1.5) (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 condensed 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 30 September 2021 was approximately 31.0% (31 March 2021: approximately 30.7%).

The Group has adopted a prudent treasury policy and thus maintained a healthy liquidity position throughout the period. 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.

36 Huabang Technology Holdings Limited

MANAGEMENT DISCUSSION AND ANALYSIS

Capital Structure and Fund Raising Activities

The capital of the Company comprises only ordinary shares.

No fund raising activities were conducted by the Company during the Current Period.

As at 30 September 2021 and 31 March 2021, 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 20 to the interim condensed consolidated financial information in this report, the Group had no other capital commitments as at 30 September 2021.

Pledge of Assets

As at 30 September 2021, the Group’s bank borrowings of HK$338.8 million are secured by the Group’s owned properties situated in Hong Kong of HK$249.6 million and pledged bank deposits of HK$41.6 million.

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.

Foreign Currency Exposure

The Group is exposed 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 Current Period, the Group generated a foreign exchange loss of approximately HK$0.2 million (Last Corresponding Period: approximately HK$0.2 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 Current Period, the Group has not used any forward exchange contract to hedge against foreign exchange risk as management considers its exposure is 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.

Contingent Liabilities

The Group did not have any significant contingent liabilities as at 30 September 2021.

Interim Report 2021 37

MANAGEMENT DISCUSSION AND ANALYSIS

Employees and Emolument Policy

As at 30 September 2021, the Group had a total of 33 employees. Employee benefit expenses, including Directors’ remuneration for the Current Period, totally amounted to approximately HK$8.2 million (Last Corresponding Period: approximately HK$7.1 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.

Interim Dividend

The Board does not recommend the payment of an interim dividend for the Current Period.

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.

Subsequent Event after the Reporting Period

An indirect wholly-owned subsidiary of the Company entered into a provisional sale and purchase agreement to sell properties at a total consideration of HK$78.8 million on 12 October 2021. Reference is made to the announcement of the Company dated 12 October 2021.

38 Huabang Technology Holdings Limited

OTHER INFORMATION

DIRECTORS’ AND CHIEF EXECUTIVE’S INTERESTS AND SHORT POSITIONS IN SHARES, UNDERLYING SHARES AND DEBENTURES

As at 30 September 2021, the interests of the Directors and chief executive of the Company in the shares, underlying shares and debentures of the Company and its associated corporations (within the meaning of Part XV of the Securities and Futures Ordinance (chapter 571 of the Laws of Hong Kong, the “SFO”)) which were required to be notified to the Company and the Stock Exchange pursuant to Divisions 7 and 8 of Part XV of the SFO (including interests and short positions which they were taken or deemed to have under such provisions of the SFO), or were required pursuant to section 352 of the SFO, to be entered in the register referred to therein, or were required, pursuant to the Model Code for Securities Transactions by Directors of Listed Issuers (the “Model Code”) as set out in Appendix 10 to the Listing Rules, to be notified to the Company and the Stock Exchange were as follows:

Long positions in ordinary shares of the Company

			Approximate
		Number	percentage
		of issued	of issued
		ordinary	share capital
Name of Director	Capacity/nature of interest	shares held	(Note 2)
Mr. George Lu	Interest of spouse (Note 1)	2,558,360,000	58.35

Notes:

• (1) There are 2,412,560,000 shares were registered in the name of Forever Star Capital Limited (“Forever Star”). Ms. Shen Wei holds 100% interest in Forever Star, a company incorporated in the British Virgin Islands. Ms. Shen Wei is also the beneficial owner of 145,800,000 shares. Mr. George Lu is the spouse of Ms. Shen Wei and is therefore deemed to be interested in the same parcel of shares that Ms. Shen Wei has interests.

• (2) The percentage holding in calculated based on the issued share capital of the Company as at 30 September 2021 comprising 4,384,782,000 shares.

Interim Report 2021 39

OTHER INFORMATION

SUBSTANTIAL SHAREHOLDERS’ AND OTHER PERSONS’ INTERESTS AND SHORT POSITIONS IN SHARES, UNDERLYING SHARES AND DEBENTURES

As at 30 September 2021, so far as it was known by or otherwise notified to any Directors or the chief executive of the Company, the following interest of which would fall to be disclosed under Divisions 2 and 3 of Part XV of the SFO, or the particulars of the corporations or persons (other than a Director or the chief executive of the Company) which had 5% or more interests in the shares and the underlying shares as recorded in the register kept under section 336 of the SFO were as follows:

Long positions in ordinary shares of the Company

			Approximate
			percentage of
		Number of	issued share
Name	Nature of interest	shares held	capital
Forever Star Capital Limited	Beneficial owner	2,412,560,000	55.02
Ms. Shen Wei	Interest in controlled	2,412,560,000	55.02
	corporation (Note 1)
	Beneficial owner (Note 1)	145,800,000	3.33
Glory Sun Securities Limited	Custodian interest (Note 2)	346,912,000	7.91
Newpont Holdings Limited	Beneficial owner	231,000,000	5.27

Notes:

• (1) There are 2,412,560,000 shares were registered in the name of Forever Star. Ms. Shen Wei holds 100% interest in Forever Star, a company incorporated in the British Virgin Islands. Ms. Shen Wei is also the beneficial owner of 145,800,000 shares.

• (2) According to the information available to the Company, Glory Sun Securities Limited (formerly known as China Goldjoy Securities Limited) is a custodian of a total 346,912,000 Shares.

Save as disclosed above, the Company had not been notified by any persons (other than Directors or chief executives of the Company) who had interests or short positions in the shares or underlying shares of the Company which would fall under the provisions of Divisions 2 and 3 of Part XV of the SFO to be disclosed to the Company, or which were recorded in the register required to be kept by the Company under Section 336 of the SFO.

40 Huabang Technology Holdings Limited

OTHER INFORMATION

SHARE OPTION SCHEME

On 21 August 2013 (“the date of adoption”), the Company conditionally approved a share option scheme (the “Share Option Scheme”) and refreshed on 24 February 2017, under which options will be granted to eligible persons to subscribe for shares of the Company at subscription price which should not be less than the highest of (i) the closing price of the Company’s shares as stated in the Stock Exchange’s daily quotation sheets on the date of grant, which must be a trading day (“Offer Date”); (ii) the average closing price of the Company’s shares as stated in the Stock Exchange’s daily quotation sheets for the five trading days immediately preceding the Offer Date; and (iii) the nominal value of the Company’s shares, provided that for the purpose of calculating the subscription price, where the Company has been listed for less than five trading days, the issue price shall be used as the closing price for any business day falling within the period before listing.

Pursuant to the Share Option Scheme, the participants of the scheme are, inter alia, executive, shareholder of any member of the Group, supplier, customer, consultant, business or joint venture partners, franchisee, contractor, agent, representative or service providers of any member of the Group, as may be determined by the Directors at their absolute discretion. Upon acceptance of the share option, the grantee shall pay HK$1.00 to the Company as consideration for the grant. The maximum number of Shares issued and to be issued upon exercise of the options granted to any eligible person (including exercised and outstanding share options) in any 12-month period shall not exceed 1% of the Shares in issue from time to time. An option may be exercised at any time during the period commencing immediately after the business day on which the share option is deemed to be granted in accordance with the Share Option Scheme but shall not exceed 10 years from the date of adoption. The Board may, at its absolute discretion, fix any minimum period for which a share option must be held. The Share Option Scheme shall be valid and effective for a period of 10 years from the date of adoption, i.e. 21 August 2013.

During the Current Period, no share options were granted, exercised, cancelled or lapsed (Last Corresponding Period: nil). There were no outstanding share options as at 30 September 2021 (31 March 2021: nil). The total number of Shares available for issue under the Share Option Scheme is 385,656,000 representing approximately 8.80% of the total number of Shares as at the date of this interim report.

Interim Report 2021 41

OTHER INFORMATION

SHARE AWARD SCHEME

On 14 March 2019, the Company adopted the share award scheme (the “Share Award Scheme”) under which shares of the Company (the “Awarded Shares”) may be awarded to selected employees (including executive directors), consultants or advisers of or to the Group and non-executive directors (including independent nonexecutive directors) of the Group (the “Selected Person(s)”) pursuant to the terms of the Share Award Scheme and trust deed of the Share Award Scheme (the “Trust Deed”). The share award scheme became effective on the adoption date and, unless otherwise terminated or amended, will remain in force for 10 years from that date, i.e., 13 March 2029. The Share Award Scheme is subject to the administration of the Board of Directors and the trustee of the Share Award Scheme (the “Trustee”) in accordance with the Share Award Scheme and the Trust Deed.

The Board of Directors shall not make any further award of Awarded Shares which will result in the nominal value of the Shares awarded by the Board of Directors under the Scheme exceeding 10% of the issued share capital of the Company from time to time. The maximum number of Shares which may be awarded to a Selected Person under the Scheme shall not exceed 1% of the issued share capital of the Company from time to time.

The Board of Directors may contribute funds to the trust constituted by the Trust Deed (the “Trust”) for the purchase or subscription of shares of the Company and other purposes set out in the Share Award Scheme and the Trust Deed. The Trustee shall hold the trust fund in accordance with the terms of the Trust Deed. The Board of Directors may instruct the Trustee to purchase shares of the Company on the Stock Exchange and to hold them in trust for the benefit of the persons who are eligible for the Awarded Shares on and subject to the terms and conditions of the Share Award Scheme and the Trust Deed (the “Eligible Persons”). The Trustee shall not exercise the voting rights in respect of any shares, including but not limited to the Awarded Shares, any bonus shares and scrip shares derived therefrom, held by it under the Trust.

Subject to the terms and conditions of the Share Award Scheme and the fulfillment of all relevant vesting conditions, the respective Awarded Shares held by the Trustee on behalf of a Selected Person pursuant to the provision of the Share Award Scheme shall vest in such Selected Person in accordance with the vesting schedule (if any) and the Trustee shall cause the Awarded Shares to be transferred to such Selected Person on the vesting date at no consideration.

During the Current Period, no ordinary share of the Company for the Share Award Scheme was acquired (Last Corresponding Period: nil). Since the adoption of the Share Award Scheme and up to 30 September 2021, no Awarded Shares were granted to any Eligible Persons of the Group. As at 30 September 2021, 42,744,000 shares of the Company were held by the Trustee of the Company.

42 Huabang Technology Holdings Limited

OTHER INFORMATION

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

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

CORPORATE GOVERNANCE CODE

The Board is committed to achieving high standards of corporate governance to safeguard the interests of the Company’s shareholders and to enhance corporate value and accountability. During the Current Period, 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.

MODEL CODE FOR 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 (the “Model Code”) 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 Current Period.

Interim Report 2021 43

OTHER INFORMATION

REVIEW OF FINANCIAL INFORMATION

The audit committee of the Company (the “Audit Committee”) has reviewed with management the accounting principles and practices adopted by the Group and discussed internal controls and financial reporting matters, including a review of the unaudited interim condensed consolidated financial statements for the interim period with the Directors. The Audit Committee comprises three independent Non-Executive Directors, namely Mr. Loo Hong Shing Vincent, Mr. Li Huaqiang and Mr. Zhu Shouzhong.

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

Hong Kong, 26 November 2021

As at the date of this report, the Executive Director of the Company is Mr. George Lu; and the independent Non-Executive Directors of the Company are Mr. Loo Hong Shing Vincent, Mr. Li Huaqiang and Mr. Zhu Shouzhong.

44 Huabang Technology Holdings Limited