Sing Lee Software (Group) Limited — Interim / Quarterly Report 2021

May 11, 2021

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(incorporated in Bermuda with limited liability)

(Stock Code: 8076)

FIRST QUARTERLY RESULTS ANNOUNCEMENT FOR THE THREE MONTHS ENDED 31 MARCH 2021

CHARACTERISTICS OF GEM OF THE STOCK EXCHANGE OF HONG KONG LIMITED (THE “STOCK EXCHANGE”)

GEM has been positioned as a market designed to accommodate small and mid-sized companies to which a high investment risk may be attached than other companies listed on the Stock Exchange. Prospective investors should be aware of the potential risks of investing in such companies and should make the decision to invest only after due and careful consideration.

Given that the companies listed on GEM are generally small and mid-sized companies, there is a risk that securities traded on GEM may be more susceptible to high market volatility than securities traded on the Main Board and no assurance is given that there will be a liquid market in the securities traded on GEM.

Hong Kong Exchanges and Clearing Limited and The Stock Exchange of Hong Kong Limited take no responsibility for the contents of this announcement, makes 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.

This announcement, for which the directors of Sing Lee Software (Group) Limited (the “Company”) (the “Directors”) collectively and individually accept full responsibility, includes particulars given in compliance with the Rules Governing the Listing of Securities on GEM of The Stock Exchange of Hong Kong Limited for the purpose of giving information with regard to the Company. The Directors, having made all reasonable enquiries, confirm that, to the best of their knowledge and belief the information contained in this announcement is accurate and complete in all material respects and not misleading or deceptive and there are no other matters the omission of which would make any statement herein or this announcement misleading.

• For identification purposes only

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RESULTS

The board of directors (the “Board”) of Sing Lee Software (Group) Limited (the “Company”) is pleased to announce the unaudited consolidated results of the Company and its subsidiaries (the “Group”) for the three months ended 31 March 2021, together with the unaudited comparative figures for the corresponding period in 2020, as follows:

CONSOLIDATED STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME

Notes Revenue 2 Cost of sales and services Gross loss Other income 3 Impairment losses under expected credit loss model, net of reversal on trade receivables and contract assets Other gains and losses Distribution and selling expenses Administrative expenses Finance costs Loss before tax Income tax credit 4 Loss and total comprehensive expense for the period Loss per share – Basic_(RMB cents) _5 – Diluted_(RMB cents) _5

(Unaudited) Three months ended 31 March 2021 2020 RMB’000 RMB’000 13,615 3,347 (23,868) (18,076) (10,253) (14,729) 320 233 735 – (239) (664) (3,862) (4,550) (4,584) (3,739) (570) (555) (18,453) (24,004) – 785 (18,453) (23,219) (1.40) (1.76) (1.40) (1.76)

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CONSOLIDATED STATEMENT OF CHANGES IN EQUITY

For the three months ended 31 March 2021

At 1 January 2021 (Audited) Loss and total comprehensive expense for the period Lapse of share options At 31 March 2021 (Unaudited) At 1 January 2020 (Audited) Loss and total comprehensive expense for the period Lapse of share options At 31 March 2020 (Unaudited)	Share Capital RMB’000 12,538 – – 12,538 12,538 – – 12,538	Share premium RMB’000 (Note a) 179,132 – – 179,132 179,132 – – 179,132	Statutory reserve Shareholder’s contribution RMB’000 RMB’000 (Note b) (Note c) 3,613 786 – – – – 3,613 786 3,613 786 – – – – 3,613 786	Translation reserve RMB’000 5,217 – – 5,217 5,217 – – 5,217	Share based payments reserve RMB’000 30,991 – (23,774) 7,217 33,394 – (1,299) 32,095	Accumulated losses RMB’000 (166,529) (18,453) 23,774 (161,208) (137,728) (23,219) 1,299 (159,648)	Total RMB’000 65,748 (18,453) – 47,295 96,952 (23,219) – 73,733

Notes:

• (a) Under the Companies Act 1981 of Bermuda (“Companies Act”), share premium is distributable to shareholders, subject to the condition that the Company cannot declare or pay a dividend, or make a distribution out of share premium and other reserves if (i) it is, or would after the payment be, unable to pay its liabilities as they become due, or (ii) the realisable value of its assets would thereby be less than the aggregate of its liabilities and its issued share capital account.

• (b) As stipulated by the relevant laws and regulations for foreign investment enterprises in the People’s Republic of China (the “PRC”), the Company’s PRC subsidiaries are required to maintain two statutory reserves, being an enterprise expansion fund and a statutory surplus reserve fund which are non-distributable. Appropriations to such reserves are made out of net profit after taxation reported in the statutory financial statements of the PRC subsidiaries while the amounts and allocation basis are decided by their respective boards of directors annually. The statutory surplus reserve fund can be used to make up their prior year losses, if any, and can be applied in conversion into capital by means of capitalisation issue. The enterprise expansion fund can be used for expanding the capital base of the PRC subsidiaries by means of capitalisation issue.

• (c) On 30 September 2017, Mr. Hung Yung Lai, being the Chairman, executive director and controlling shareholder of the Company, waived the balance due to him of approximately RMB786,000. The amount has been capitalised as shareholder’s contribution.

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NOTES TO THE CONSOLIDATED STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME

1. GENERAL

The unaudited consolidated financial statements have been prepared in accordance with International Financial Reporting Standards (“IFRS”) issued by the International Accounting Standards Board, the disclosure requirements of the Hong Kong Companies Ordinance and the Rules Governing the Listing of Securities on GEM.

The unaudited consolidated financial statements are presented in Renminbi (“RMB”), which is the same as the functional currency of the Group.

All significant intra-group transactions and balances have been eliminated on consolidation.

The unaudited consolidated results for the three months ended 31 March 2021 have not been reviewed or audited by the external auditors of the Company but have been reviewed by the audit and risk management committee of the Company.

The accounting policies adopted are consistent with those followed in the preparation of the Group’s annual consolidated financial statements for the year ended 31 December 2020 (the “2020 Consolidated Financial Statements”), except for the amendments and interpretations of IFRSs (the “New IFRSs”) issued by IASB which have become effective in this period as detailed in the notes of the 2020 Consolidated Financial Statements. The adoption of the New IFRSs has no material impact on the accounting policies in the Group’s condensed consolidated financial statements for the period.

2. REVENUE

Revenue represents income from sale of computer software and related hardware, and provision of technical support services. Revenue comprises the following:

Sales of software products Sales of related hardware products Provision of technical support services	(Unaudited) Three months ended 31 March 2021 2020 RMB’000 RMB’000 1,595 902 69 14 11,951 2,431 13,615 3,347	(Unaudited) Three months ended 31 March 2021 2020 RMB’000 RMB’000 1,595 902 69 14 11,951 2,431 13,615 3,347
		3,347

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3. OTHER INCOME

Interest income Others 4. INCOME TAX CREDIT PRC enterprise income tax (“EIT”) – Under provision in prior years Deferred taxation – Current year	(Unaudited) Three months ended 31 March 2021 2020 RMB’000 RMB’000 34 133 286 100 320 233 (Unaudited) Three months ended 31 March 2021 2020 RMB’000 RMB’000 – (1,174) – 1,959 – 785

No provision for Hong Kong Profits Tax has been made as the Group had no estimated assessable profits arising from Hong Kong during the three months ended 31 March 2021 and 2020.

PRC enterprise income tax has not been provided as the Group had no estimated assessable profits arising from PRC for the three months ended 31 March 2021 (three months ended 31 March 2020: Nil).

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5. LOSS PER SHARE

The calculation of the basic and diluted loss per share attributable to the owners of the Company is based on the following data:

Loss for the period attributable to owners of the Company for the purposes of basic and diluted loss per share Weighted average number of ordinary shares for the purposes of basic and diluted loss per share	(Unaudited) Three months ended 31 March 2021 2020 RMB’000 RMB’000 (18,453) (23,219) (Unaudited) Three months ended 31 March 2021 2020 ’000 ’000 1,317,240 1,317,240

6. DIVIDEND

The Board does not recommend the payment of dividend for the three months ended 31 March 2021 (three months ended 31 March 2020: Nil).

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MANAGEMENT DISCUSSION AND ANALYSIS

Financial review and results of operations

For the three months ended 31 March 2021, the Group recorded a total revenue of approximately RMB13,615,000, increase of 307% as compared to the same period of last year (For the three months ended 31 March 2020: approximately RMB3,347,000). The increased in the turnover of the Group was mainly attributable to the increased in the revenue of the Group’s provision of technical support service. Cost of sales and services for the three months ended 31 March 2021 increased by 32% to approximately RMB23,868,000 (For the three months ended 31 March 2020: approximately RMB18,076,000). Increased in cost of sales and services was mainly due to increase in staff cost.

Administrative expenses for the three months ended 31 March 2021 is increased by 23% to approximately RMB4,584,000 (For the three months ended 31 March 2020: approximately RMB3,739,000). Increased in administrative expenses was mainly due to increase in staff cost. For the distribution and selling expenses, it is decreased by 15% to approximately RMB3,862,000 (For the three months ended 31 March 2020: approximately RMB4,550,000), decreased in distribution and selling expenses was mainly due to our effective cost control measures. Other income mainly included interest income and tax refund; and other gains and losses mainly included exchange differences and fair value changes in financial assets at fair value through profit or loss.

Finance costs for three months ended 31 March 2021 was approximately RMB570,000, not much movement when compared to the same period of last year (For the three months ended 31 March 2020: approximately RMB555,000).

The Group recorded a loss of approximately RMB18,453,000 for the three months ended 31 March 2021, decrease of 21% as compared to the same period of last year (For the three months ended 31 March 2020: approximately RMB23,219,000). Increase in revenue is the main factor leading to the decrease in loss.

We will continue striving our best to increase sales and strengthen our cost control measures. With the products of our Group becoming more mature in the market and the effective cost control, we expect that financial results of the group would be improved in the coming quarter.

BUSINESS REVIEW

Business of the Group for the First Quarter of 2021

Despite ongoing vaccine rollout and China’s relatively successful control of the coronavirus, the global financial crisis caused by the pandemic, which still threatens many countries, continues to worsens, leading to “the world’s worst recession since WWII”. While China’s economy has recovered gradually, all industries and sectors have been severely affected. Since banks were forced to suspend their operations last year, vendors serving banking related divisions were demanded to catch up on the progress this year, presenting another quarter of “significant input yet limited return”.

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As economic growth picks up its pace with increased activities, the Group recorded a growth of 307% in sales in the first quarter as compared to the same period of last year, and the cost of sales and total expenses increased by 20% as compared to the same period of last year. The results, though lower than expected, still showed significant improvement with the concerted effort of the team. The Group also made further progress in product development and in-depth research and development under the strategy that focuses on a core business and two complementary products as most of the products were highly recognised by the banking clients.

With the reaffirmed and strengthened development of such strategy, reopening merchants and online businesses, and the post-pandemic disruption of business models, the demand for online products has been growing amongst banks, driving new breakthroughs in Sing Lee’s software and further development of new payment modes. The Group’s relevant departments have also been shifting their research and development focus online. Apart from launching the WeChat Pay and CCB payment channels, cloudbased MIS was also introduced to adapt to the increasingly diversified models. Meanwhile, the Group also moved the payment process from offline to online, such as working with banks and third parties to deepen the overall process development. In addition, in addition to cooperating with state-owned banks, the Group also adjusted its strategy to focus more on payment products for small and medium-sized banks and small businesses, laying a solid foundation for digital currency development.

Under the strategy that focuses on a core business and two complementary products, banking outsourcing service (merchant) products that “focus on expanding offline markets and targeted development of merchant service businesses” have become one of the main objectives of the Group. The Group increased the number of banks served from only two provincial branch banks six years ago to a number of banks in 15 provinces, including Industrial and Commercial Bank of China, Agricultural Bank of China, China Construction Bank and Postal Savings Bank of China in Zhejiang, Jiangsu, Guangdong and other economic powerhouses, as well as Northwest China and Xinjiang where favourable policies are in place. The bidding processes suspended last year reactivated in the first quarter, and the Group won 70% of the tenders, which will facilitate the overall goal of promoting its payment business to more small merchants and consumers. The pandemic has also shifted the marketing focus online. The Group’s services will further reflect the operation project of “deepening value-added services and strengthening the cooperation with banks with a focus on merchants”, where businesses which were divided will be gradually combined to integrate banking outsourcing service (merchant) and payment products into the core of its development strategy.

Meanwhile, Sing Lee, as a leader in payment service in China for almost three decades, has witnessed the evolution of the nation’s financial payment sector. The digital currency pilot scheme led by the People’s Bank of China was introduced in 2020. Like the Greater Bay Area that marks the second wave of China’s economic reform, digital currency represents the second phase of the country’s financial currency reform, creating great opportunities for the Group in the payment market.

OUTLOOK

The“Payment plus service” remains the core of the Group. The new payment models targeting small and medium-sized merchants evolved from traditional operations and the “Bank-School Express” remain our main sources of big data. Based on these products, the Group has developed a unique OFFLINE TO ONLINE (O2O) model. Meanwhile, the business portfolio will be better aligned to the overall development of the financial environment.

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The Group will continue to implement stringent cost control, and strengthen the risk control over the overall operations and individual businesses in order to establish a virtuous cycle of identifying new sources of income and lowering the costs.

OTHER INFORMATION

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

So far as is known to any directors or chief executives of the Company, as at 31 March 2021, shareholders (other than directors or chief executive of the Company) who had interests or short positions in the shares, underlying shares and debentures of the Company which would fall to be disclosed to the Company under the provisions of Divisions 2 and 3 of Part XV of the SFO, or directly or indirectly, interested in 5% or more of the nominal value of any class of share capital carrying rights to vote on all circumstances at general meeting of any other members of the Group or substantial shareholders as recorded in the register required to be kept by the Company under Section 336 of the SFO were as follows:

Ordinary shares of HK$0.01 each of the Company

		Number of shares held	Number of shares held	Percentage
	Capacity/	Long	Short	of
Name of shareholder	Nature of interest	position	position	shareholding
Goldcorp Industrial Limited	Beneficial owner	431,782,500	–	32.78%
		(note 1)
Great Song Enterprises Limited	Beneficial owner	431,782,500	–	32.78%
		(notes 1 and 2)
Mr. Hung Yung Lai	Corporate interest	431,782,500	–	32.78%
		(notes 2 and 4)
	Beneficial owner	72,782,500	–	5.53%
Ms. Li Kei Ling	Corporate interest	431,782,500	–	32.78%
		(notes 2 and 3)
Mdm. Iu Pun	Family interest	504,565,000	–	38.31%
		(note 5)

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Notes:

1. Goldcorp Industrial Limited is a limited liability company incorporated in the British Virgin Islands equally owned by Mr. Hung Yung Lai and Great Song Enterprises Limited which in turn is wholly owned by Ms. Li Kei Ling.

2. The Shares were held by Goldcorp Industrial Limited.

3. Ms. Li Kei Ling controls more than one third of the voting power of Great Song Enterprises Limited which in turn holds more than one third of the voting power of Goldcorp Industrial Limited. Ms. Li Kei Ling is deemed, by virtue of the SFO, to be interested in the same 431,782,500 shares held by Goldcorp Industrial Limited.

4. Mr. Hung Yung Lai controls more than one third of the voting power of Goldcorp Industrial Limited. Mr. Hung Yung Lai is deemed, by virtue of the SFO, to be interested in the same 431,782,500 shares held by Goldcorp Industrial Limited.

5. These shares are beneficially owned by Goldcorp Industrial Limited as mentioned in Note 4 of above. Mr. Hung Yung Lai is deemed to be interested in the same 431,782,500 shares held by Goldcorp Industrial Limited. Mdm Iu Pun is the wife of Mr. Hung Yung Lai and is deemed to be interested in these shares in which Mr. Hung Yung Lai is deemed or taken to be interested for the purpose of the SFO. She is also deemed to be interested in the 72,782,500 shares beneficially owned by Mr. Hung Yung Lai as mentioned in Note 4 above for the purpose of SFO.

Save as disclosed above, as at 31 March 2021, the directors or chief executives of the Company were not aware of any other person (other than directors or chief executives of the Company) who had an interest or short position in the shares, underlying shares and debentures of the Company which would fall to be disclosed to the Company under the provision of Divisions 2 and 3 of Part XV of the SFO, or who was interested in 5% or more of the nominal value of any class of share capital carrying rights to vote in all circumstances at general meeting of any other member of the Group or any other substantial shareholders as recorded in the register required to be kept by the Company under Section 336 of the SFO.

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DIRECTORS’ AND CHIEF EXECUTIVES’ INTERESTS AND SHORT POSITION IN SHARES, UNDERLYING SHARES AND DEBENTURES

As at 31 March 2021, the interests or short positions of the directors and chief executives of the Company in the shares, underlying shares and debentures of the Company or any of its associated corporations (within the meaning of Part XV of the Securities and Futures Ordinance (Chapter 571 of Laws of Hong Kong (the “SFO”)) which were notified to the Company and the Stock Exchange pursuant to Divisions 7 and 8 of Part XV of the SFO (including interests or short positions which he/ she is taken or deemed to have under such provisions of the SFO); or which were required to be entered into the register required to be kept by the Company, pursuant to Section 352 of the SFO, or which were required, pursuant to Rules 5.48 to 5.67 of the GEM Listing Rules, to be notified to the Company and the Stock Exchange, were as follows:

Directors’ interests in securities of the Company:

						Percentage
						of aggregate
						interests
				Interest in		to total
			Interests in	underlying		issued share
	Long/	Capacity/Nature	ordinary	shares of	Aggregate	capital of the
Name of Directors	Short Position	of interests	shares	share options	interests	Company
Mr. Hung Yung Lai	Long Position	Corporate interest	431,782,500	–	431,782,500	32.78%
			(note 1)
	Long Position	Beneficial owner	72,782,500	–	72,782,500	5.53%
Mr. Hung Ying	Long Position	Beneficial owner	14,547,500	3,862,822	18,410,322	1.40%
Mr. Lin Xue Xin	Long Position	Beneficial owner	9,470,000	4,992,682	14,462,682	1.10%
Mr. Pao Ping Wing	Long Position	Beneficial owner	–	307,606	307,606	0.02%
Mr. Thomas Tam	Long Position	Beneficial owner	–	307,606	307,606	0.02%
Mr. Lo King Man	Long Position	Beneficial owner	–	307,606	307,606	0.02%

Directors’ interests in the associated corporation:

					Percentage of
					total number
					of shares of
				Number of	the associated
	Long/	Capacity/Nature	Name of the associated	ordinary	corporations
Name of Director	Short Position	of interests	corporation	shares held	(note 2)
Mr. Hung Yung Lai	Long Position	Beneficial owner	Goldcorp Industrial Limited	1	50%

Notes:

1. The Shares were held by Goldcorp Industrial Limited. Mr. Hung Yung Lai has 50% interest in Goldcorp Industrial Limited.

2. The entire issued capital of Goldcorp Industrial Limited as of 31 March 2021 composed of 2 ordinary shares.

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Save as disclosed above, as at 31 March 2021, none of the Directors and chief executives of the Company had any interests or short positions in any shares, underlying shares and debenture of the Company or any of its associated corporations (within the meaning of Part XV of the SFO) which would have to be notified to the Company and the Stock Exchange pursuant to Divisions 7 and 8 of Part XV of the SFO (including interests or short positions which they were taken or deemed to have under such provisions of the SFO), or which were recorded in the register required to be kept by the Company pursuant to Section 352 of the SFO, or which were required, pursuant to Rules 5.48 to 5.67 of the GEM Listing Rules, to be notified to the Company and the Stock Exchange.

SHARE OPTION SCHEME

The Company’s share option scheme (the “Scheme”) was adopted on 27 August 2001 for the primary purpose of providing incentives to directors and eligible employees, and has been expired on 27 August 2011. Under the Scheme, the Board of Directors of the Company may grant options to eligible employees, including directors of the Company and its subsidiaries, to subscribe for shares in the Company. The Scheme would be valid and effective for a period of ten years commencing on the adoption date and have come to its expiration. All other respects of the provisions of the Scheme shall remain in full force and holders of all options granted under the Scheme prior to such expiry shall be entitled to exercise the outstanding options pursuant to the terms of the Scheme until expiry of the said options. As a result, a new share option scheme which was approved on 28 February 2011 (the “New Scheme”), take effect immediately after the expiry of the Scheme. The principal terms of the New Scheme are same with the Scheme.

Pursuant to the ordinary resolution passed by the shareholders at the special general meeting of the Company held on 28 February 2011 (the “SGM”), the Scheme mandate limit was refreshed so that the Company was authorized to grant share options under the existing Scheme for subscription of up to a total of 81,184,000 shares, representing approximately 10% of the issued share capital of the Company as at the date of the SGM.

Pursuant to the ordinary resolution passed by the shareholders at the annual general meeting of the Company held on 11 May 2016 (the “AGM”), the scheme mandate limit under the share option scheme of the Company was refreshed again so that the Company was authorized to grant additional share options for subscription for a total of 86,443,000 shares under the refreshed mandate limit, representing approximately 10% of the issued share capital of the Company as at the date of the AGM.

Pursuant to the ordinary resolution passed by the shareholders at the annual general meeting of the Company held on 11 May 2018 (the “AGM”), the scheme mandate limit under the share option scheme of the Company was refreshed again so that the Company was authorised to grant additional share options for subscription for a total of 61,032,000 shares under the refreshed mandate limit, representing approximately 6.95% of the issued share capital of the Company as at the date of the AGM.

The total number of shares issued and to be issued upon the exercise of options granted and to be granted to each Participant (including both exercised and outstanding options) in any 12 months period up to the date of grant must not exceed 1% of the shares in issue at the date of grant.

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The subscription shall be a price determined by the Board at its absolute discretion and shall not be less than the higher of the closing price of the share on the date of grant of the option and the average closing price of the shares for the five business days immediately preceding the date of grant of the option.

Options granted shall be deemed to be accepted upon receipt of the acceptance of offer letter from the grantee within 28 days from the offer date, together with a remittance in favour of the Company of HK$1 by way of consideration for the grant.

An option may be exercised in accordance with the terms of the Scheme at any time during a period notified by the Board to each grantee but may not be exercised after the expiry of 10 years from the date of grant.

On 9 October 2007 the Company granted 47,550,000 options to subscribe for shares in the Company under the Scheme at an exercise price of HK$0.368 per share to its employees of the Group. Shares of the Company were at closing price of HK$0.36 immediately before the day on which options were granted. Options granted on 9 October 2007 were expired during year 2017.

On 19 January 2010 the Company granted 20,900,000 options to subscribe for shares in the Company under the Scheme at an exercise price of HK$0.20 per share to its directors and employees of the Group. Shares of the Company were at closing price of HK$0.20 immediately before the day on which options were granted. Options granted on 19 January 2010 were expired during year 2020.

On 16 August 2010 the Company granted 8,990,000 options to subscribe for shares in the Company under the Scheme at an exercise price of HK$0.84 per share to its employees of the Group. Shares of the Company were at closing price of HK$0.84 immediately before the day on which options were granted. Options granted on 16 August 2010 were expired during year 2020.

On 10 January 2011, the Company granted 65,000,000 share options to subscribe for shares in the company under the Share Option Scheme at an exercise price of HK$0.730 per share to Mr. Hung Yung Lai, Chairman of the Group. Shares of the Company were at closing price of HK$0.730 immediately before the day on which options were granted. The grant of share options to Mr. Hung Yung Lai and the specific mandate to allot, issue and deal with the shares of the Company upon conversion of the foregoing share options were approved by the SGM held on 28 February 2011. Options granted on 10 January 2011 were expired during year 2021.

On 13 January 2011, the Company granted 19,260,000 share options to subscribe for shares in the Company under the Share Option Scheme at an exercise price of HK$0.714 per share to its employees of the Group. Shares of the Company were at closing price of HK$0.690 immediately before the day on which options were granted. The grant of share options to its employees of the Company and the specific mandate to allot, issue and deal with the shares of the Company upon conversion of the foregoing share options were approved by the SGM held on 28 February 2011. Options granted on 13 January 2011 were expired during year 2021.

On 24 June 2013, the Company granted 59,780,000 share options to subscribe for shares in the Company under the Share Option Scheme at an exercise price of HK$0.1122 per share to a Director and its employees of the Group. Shares of the Company were at closing price of HK$0.101 immediately before the day on which options were granted.

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On 15 May 2015, the Company granted 21,400,000 share options to subscribe for shares in the Company under the Share Option Scheme at an exercise price of HK$0.43 per share to a Director and its employees of the Group. Shares of the Company were at closing price of HK$0.43 immediately before the day on which options were granted.

On 7 April 2017, the Company granted 86,440,000 share options to subscribe for shares in the Company under the Share Option Scheme at an exercise price of HK$0.182 per share to its directors, employees and consultants of the Group. Shares of the Company were at closing price of HK$0.182 immediately before the day on which options were granted.

The summary details of options granted are as follows:

			Number of				Number of
			share options	Number of	Number of	Number of	share options
			outstanding	share options	share options	share options	outstanding
Name of directors,			as at	granted	exercised	lapsed	as at
continuous contract		Adjusted	1 January	during	during	during	31 March
employees and consultants	Exercise period	exercise price	2021	the period	the period	the period	2021
		HK$
Hung Yung Lai	28 February 2011 to	0.6170	76,901,500	–	–	(76,901,500)	–
	9 January 2021
Lin Xue Xin	28 February 2011 to	0.6035	816,339	–	–	(816,339)	–
	12 January 2021
Continuous contract employees	28 February 2011 to	0.6035	13,723,960	–	–	(13,723,960)	–
(other than directors)	12 January 2021
Hung Ying	24 June 2013 to	0.0948	47,324	–	–	–	47,324
	23 June 2023
Continuous contract employees	24 June 2013 to	0.0948	7,335,220	–	–	–	7,335,220
(other than directors)	23 June 2023
Hung Ying	15 May 2015 to	0.3635	2,247,890	–	–	–	2,247,890
	14 May 2025
Lin Xue Xin	15 May 2015 to	0.3635	3,549,300	–	–	–	3,549,300
	14 May 2025
Continuous contract employees	15 May 2015 to	0.3635	16,859,175	–	–	–	16,859,175
(other than directors)	14 May 2025
Hung Ying	7 April 2017 to	0.1538	1,567,608	–	–	–	1,567,608
	6 April 2027
Lin Xue Xin	7 April 2017 to	0.1538	1,443,382	–	–	–	1,443,382
	6 April 2027
Pao Ping Wing	7 April 2017 to	0.1538	307,606	–	–	–	307,606
	6 April 2027
Thomas Tam	7 April 2017 to	0.1538	307,606	–	–	–	307,606
	6 April 2027
Lo King Man	7 April 2017 to	0.1538	307,606	–	–	–	307,606
	6 April 2027

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			Number of						Number of
			share options	Number of	Number of		Number of		share options
			outstanding	share options	share options		share options		outstanding
Name of directors,			as at	granted		exercised		lapsed	as at
continuous contract		Adjusted	1 January	during		during		during	31 March
employees and consultants	Exercise period	exercise price	2021	the period	the period		the period		2021
		HK$
Continuous contract employees	7 April 2017 to	0.1538	30,216,374	–		–		–	30,216,374
(other than directors)	6 April 2027
Consultants	7 April 2017 to	0.1538	42,644,839	–		–		–	42,644,839
	6 April 2027
			198,275,729	–		–	(91,441,799)		106,833,930

The exercise price for the options granted and number of shares in respect of options granted were adjusted to reflect the impact of the rights issue during the year ended 31 December 2019.

PURCHASE, SALE OR REDEMPTION OF LISTED SECURITIES

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

MATERIAL ACQUISITION AND DISPOSAL OF SUBSIDIARIES AND ASSOCIATED COMPANIES

Disposal of a subsidiary of the Company

On 26 March 2021, the Transferor (Hangzhou Singlee Technology Company Limited, an indirect wholly-owned subsidiary of the Company), the Transferee and Hangzhou Hengxin Lirong Software Company Limited (“ Hangzhou HL ”, an indirect wholly-owned subsidiary of the Company established on 20 January 2021) entered into the equity transfer agreement (the “ Agreement ”), pursuant to which the Transferor has conditionally agreed to sell and the Transferee has conditionally agreed to purchase the entire equity interest in Hangzhou HL at the consideration of RMB40,000,000 in cash.

Upon completion, the Transferor will no longer hold any equity interest in Hangzhou HL and Hangzhou HL will cease to be a subsidiary of the Company. The financial results of Hangzhou HL will no longer be consolidated into the consolidated financial statements of the Company.

Completion of the Agreement is conditional upon the fulfilment or waiver of the conditions set out in the section headed “Letter from the Board — 2. THE AGREEMENT — Conditions precedent” in the circular of the Company dated 5 May 2021.

Details of the Agreement are set out in the announcement and circular of the Company dated 26 March 2021 and 5 May 2021 respectively.

Save as disclosed above, for the three months ended 31 March 2021 and as at the date of this announcement, there was no material acquisition or disposal of subsidiaries or associated companies of the Company by the Group.

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COMPETITION AND CONFLICT OF INTERESTS

None of the Directors, management shareholders or substantial shareholders of the Company or any of their respective associates, as defined in GEM Listing Rules, has engaged in any business that competes or may compete, either directly or indirectly, with the business of the Group or has any other conflict or interests with the Group during the three months ended 31 March 2021.

CORPORATE GOVERNANCE PRACTICES

The Company has complied with the code provisions as set out in the Corporate Governance Code as contained in Appendix 15 to the GEM Listing Rules during the three months ended 31 March 2021.

DIRECTORS’ SECURITIES TRANSACTIONS

The Company has adopted the code of conduct regarding directors’ securities transactions during the three months ended 31 March 2021 as set out in GEM Listing Rules 5.48 to 5.67. The Company has made specific enquiry of all the Directors and the Company was not aware of any non-compliance with the required standard of dealings regarding the securities transactions by Directors.

Specific employees who are likely to be possession of unpublished price-sensitive information of the Group are also subject to compliance with the same Code of Conduct. No incident of non-compliance was noted by the Company for the three months ended 31 March 2021.

REMUNERATION COMMITTEE

The Company established a remuneration committee in November 2005. The primary duties of the remuneration committee are to review and make recommendation for the remuneration policy of the directors and senior management. The chairman of the remuneration committee is Mr. Pao Ping Wing and other members include Mr. Hung Yung Lai, Mr. Thomas Tam and Mr. Lo King Man.

NOMINATION COMMITTEE

The Company established a nomination committee in March 2012. The principal duties of the nomination committee are to formulate nomination policy and make recommendation to the Board on nomination and appointment of the directors and board succession; formulate and review the Board Diversity Policy. The chairman of the nomination committee is Mr. Hung Yung Lai and other members include Mr. Pao Ping Wing, Mr. Thomas Tam and Mr. Lo King Man.

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AUDIT AND RISK MANAGEMENT COMMITTEE

The Company established an audit and risk management committee on 27 August 2001 with written terms of reference in compliance with Rules 5.28 to 5.33 of the GEM Listing Rules. The primary duties of the audit and risk management committee are to review and supervise the financial reporting process, internal control procedures and risk management system of the Group. The chairman of the audit and risk management committee is Mr. Pao Ping Wing and other members include Mr. Thomas Tam and Mr. Lo King Man, all of them are independent non-executive directors.

The Group’s unaudited results for the three months ended 31 March 2021 have been reviewed by the audit and risk management committee, which was of the opinion that the preparation of such results complied with the applicable accounting standards and requirements and that adequate disclosures have been made.

By Order of the Board Sing Lee Software (Group) Limited Hung Yung Lai Chairman

The Board comprises of:

Hung Yung Lai (Executive Director) Hung Ying (Executive Director) Lin Xue Xin (Executive Director) Cui Jian (Executive Director) Pao Ping Wing (Independent Non-Executive Director) Thomas Tam (Independent Non-Executive Director) Lo King Man (Independent Non-Executive Director)

Hong Kong, 11 May 2021

This announcement will remain on the GEM website at http://www.hkgem.com on the “Latest Company Announcements” page for at least 7 days from the date of its posting and will be published on the website of the Company (http://www.singlee.com.cn).

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