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What changed in TOP Financial Group Ltd's 20-F — 2022 vs 2023

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Paragraph-level year-over-year comparison of TOP Financial Group Ltd's 2022 and 2023 20-F annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2023 report.

+426 added−428 removedSource: 20-F (2023-06-30) vs 20-F (2022-08-16)

Top changes in TOP Financial Group Ltd's 2023 20-F

426 paragraphs added · 428 removed · 323 edited across 4 sections

Item 3. Legal Proceedings

Legal Proceedings — active lawsuits and investigations

92 edited+29 added−40 removed79 unchanged
Biggest changeAs of March 31, 2022 2021 US$ US$ Assets Cash and cash equivalents 6,199,213 4,858,052 Restricted cash 1,757,546 1,977,424 Receivables from broker-dealers and clearing organizations 2,360,157 2,571,080 Receivables from customers 1,230,542 137,912 Securities owned, at fair value 1,288,747 481,897 Fixed assets, net 421,285 18,241 Intangible asset, net 63,837 64,312 Right of use assets 242,665 - Income tax recoverable 296,532 - Other assets 20,292 155,645 Total Assets 13,880,816 10,264,563 Liabilities Payable to customers 3,210,113 3,262,724 Income tax payable - 129,324 Payable to customers – related parties 99,423 - Accrued expenses and other liabilities 131,317 118,328 Lease liabilities 244,861 - Total liabilities 3,685,714 3,510,376 Cash and cash equivalents Cash and cash equivalents consist of funds deposited with banks, which are highly liquid and are unrestricted as to withdrawal or use.
Biggest changeAs of March 31, 2023 2022 US$ US$ Assets Cash and cash equivalents 15,966,421 6,199,213 Restricted cash 1,879,472 1,757,546 Loans receivable 8,855,220 - Receivables from broker-dealers and clearing organizations 3,212,777 2,360,157 Receivables from customers 3,773,982 1,230,542 Receivables from customers – a related party 1,523,259 - Securities owned, at fair value 2,741,178 1,288,747 Fixed assets, net 482,130 421,285 Intangible asset, net 63,695 63,837 Right of use assets 156,656 242,665 Long-term investment in a limited partnership 256,420 - Deposit for long-term investment 200,000 - Available-for-sale investments 1,000,000 - Income tax recoverable 14,386 20,292 Other assets 158,300 296,532 Total Assets 40,283,896 13,880,816 Liabilities Payable to customers 3,500,690 3,210,113 Payable to customers – related parties 43,127 99,423 Accrued expenses and other liabilities 638,617 131,317 Lease liabilities 150,139 244,861 Total liabilities 4,332,573 3,685,714 Cash and cash equivalents Cash and cash equivalents consist of funds deposited with banks, which are highly liquid and are unrestricted as to withdrawal or use.
Communications and technology – Communications and technology expenses increased by 113.5% from US$0.2 million in the year ended March 31, 2021 to US$0.4 million in the year ended March 31, 2022. The increase in communications and technology expenses was caused by technology expenses of $0.2 million to support trading solution services provided to our customers, which commenced since May 2021.
Communications and technology – Communications and technology expenses increased by 113.5% from US$0.2 million in the year ended March 31, 2021 to US$0.4 million in the year ended March 31, 2022. The increase in communications and technology expenses was caused by technology expenses of US$0.2 million to support trading solution services provided to our customers, which commenced since May 2021.
For the Years Ended March 31, 2022 2021 US$ US$ Consolidated Statements of Operations Data: Revenues: Futures brokerage commissions 4,287,038 16,085,815 Trading solution service revenues 3,309,288 - Structure note subscription fees 734,317 78,311 Other service revenues 280,677 277,937 Trading (losses) gains (794,460 ) 387,057 Interest income and others 3,535 77,252 7,820,395 16,906,372 Expenses: Commission expenses (2,728,389 ) (10,263,351 ) Compensation and benefits (562,297 ) (690,867 ) Communications and technology (428,445 ) (200,715 ) Occupancy (129,064 ) (132,220 ) Travel and business development (53,337 ) (16,880 ) Professional fees (271,477 ) (382,827 ) Other administrative expenses (67,434 ) (104,077 ) (4,240,443 ) (11,790,937 ) Income before income taxes 3,579,952 5,115,435 Income tax expense (88,647 ) (70,765 ) Net income 3,491,305 5,044,670 76 Revenues Total revenues decreased by 53.7% from US$16.9 million in the year ended March 31, 2021 to US$7.8 million in year ended March 31, 2022.
For the Years Ended March 31, 2022 2021 US$ US$ Consolidated Statements of Operations Data: Revenues: Futures brokerage commissions 4,287,038 16,085,815 Trading solution service revenues 3,309,288 - Structure note subscription fees 734,317 78,311 Other service revenues 280,677 277,937 Trading (losses) gains (794,460 ) 387,057 Interest income and others 3,535 77,252 7,820,395 16,906,372 Expenses: Commission expenses (2,728,389 ) (10,263,351 ) Compensation and benefits (562,297 ) (690,867 ) Communications and technology (428,445 ) (200,715 ) Occupancy (129,064 ) (132,220 ) Travel and business development (53,337 ) (16,880 ) Professional fees (271,477 ) (382,827 ) Other administrative expenses (67,434 ) (104,077 ) (4,240,443 ) (11,790,937 ) Income before income taxes 3,579,952 5,115,435 Income tax expense (88,647 ) (70,765 ) Net income 3,491,305 5,044,670 Revenues Total revenues decreased by 53.7% from US$16.9 million in the year ended March 31, 2021 to US$7.8 million in year ended March 31, 2022.
Our ability to continuously provide our customers with low-latency trading platforms and high quality services at competitive prices, and the outcome of our advertising and marketing activities, will affect whether we can retain our existing customers and attract new customers. 71 Our ability to earn commissions from brokerage services We charge commission fees for the brokerage services we offer.
Our ability to continuously provide our customers with low-latency trading platforms and high quality services at competitive prices, and the outcome of our advertising and marketing activities, will affect whether we can retain our existing customers and attract new customers. Our ability to earn commissions from brokerage services We charge commission fees for the brokerage services we offer.
Structure note subscription fee Since December 2020, we have entered into the structured products business with fund houses and asset management companies and are responsible for providing subscriber services. We assist customers to identify and subscribe for structure note products. The subscription fees are charged at a fixed percentage of investment amount.
Structure note subscription fees Since December 2020, we have entered into the structured products business with fund houses and asset management companies and are responsible for providing subscriber services. We assist customers to identify and subscribe for structured note products. The subscription fees are charged at a fixed percentage of investment amount.
Current income taxes are provided for in accordance with the laws of the relevant taxing authorities. An uncertain tax position is recognized as a benefit only if it is “more likely than not” that the tax position would be sustained in a tax examination, with a tax examination being presumed to occur.
Current income taxes are provided for in accordance with the laws of the relevant taxing authorities. 92 An uncertain tax position is recognized as a benefit only if it is “more likely than not” that the tax position would be sustained in a tax examination, with a tax examination being presumed to occur.
We charge management fees based on their assets under management as well as commissions for certain transactions. Our ability to provide stable and low-latency trading platforms to our customers As an online brokerage service provider, we attract new customers and retain our existing customers by providing them with stable and low-latency trading platforms.
We charge management fees based on their assets under management as well as commissions for certain transactions. 77 Our ability to provide stable and low-latency trading platforms to our customers As an online brokerage service provider, we attract new customers and retain our existing customers by providing them with stable and low-latency trading platforms.
On November 25, 2020, the Board of Directors of ZYSL declared an interim cash dividend of HK$24.8 million (equivalent to $3.2 million) to its shareholder ZYSL (BVI), following which ZYSL (BVI) declared an interim cash dividend to its shareholder ZYFGL and ZYFGL declared an interim cash dividends to its shareholders for the same amount on the same day.
On November 25, 2020, the Board of Directors of ZYSL declared an interim cash dividend of HK$24.8 million (equivalent to US$3.2 million) to its shareholder ZYSL (BVI), following which ZYSL (BVI) declared an interim cash dividend to its shareholder ZYFGL and ZYFGL declared an interim cash dividends to its shareholders for the same amount on the same day.
The decrease was mainly driven by a decrease of $11.8 million in futures brokerage commission, net off against new revenues streams from trading solution services and structure note subscriber services that contributed a total revenue of $3.3 million.
The decrease was mainly driven by a decrease of US$11.8 million in futures brokerage commission, net off against new revenues streams from trading solution services and structure note subscriber services that contributed a total revenue of US$3.3 million.
Occupancy – Occupancy expenses decreased slightly by 2.4% and kept at US$0.13 million in the years ended March 31, 2022 and 2021. 77 Income before income taxes We had an income before income taxes of US$3.6 million and US$5.1 million in the years ended March 31, 2022 and 2021, respectively.
Occupancy – Occupancy expenses decreased slightly by 2.4% and kept at US$0.13 million in the years ended March 31, 2022 and 2021. Income before income taxes We had an income before income taxes of US$3.6 million and US$5.1 million in the years ended March 31, 2022 and 2021, respectively.
Trading (losses) gains We began proprietary trading in US stocks since March 2020, and trading in HK stocks since January 2021. The trading (losses) gain mainly consist of realized and unrealized gains and losses from investment in US stocks, which are included in Securities owned, at fair value.
Trading gains (losses) We began proprietary trading in US stocks since March 2020, and trading in HK stocks since January 2021. The trading gains (losses) mainly consist of realized and unrealized gains and losses from investment in US stocks, which are included in Securities owned, at fair value.
We plan to keep our business growing by expanding our customer base to include retail investors of a wider range of wealth within the Asian communities across the globe, by increasing the products we offer to include securities and futures from a larger number of stock exchanges, and by starting to offer services such as asset management, and CFD products and services.
We plan to keep our business growing by expanding our customer base to include retail investors of a wider range of wealth within the Asian communities across the globe, by increasing the products we offer to include securities and futures from a larger number of stock exchanges, and offering services such as asset management, and CFD products.
We identify a single performance obligation for each subscription service, and recognize subscription fee income when the customers successfully subscribe for the structure note products and underlying contract between the customer and financial institution becomes non-cancellable, which is the point in time when the control of service is completed.
We identify a single performance obligation for each subscription service, and recognize subscription fee income when the customers successfully subscribe for the structured note products and underlying contract between the customer and financial institution becomes non-cancellable, which is the point in time when the control of service is completed.
The margin financing services did not generate any revenue for the years ended March 31, 2022, 2021 and 2020. For options trading, we have the capacity to offer options trading services and they are available to our clients. However, there was no revenue generated from options trading services for the relevant periods.
The margin financing services did not generate any revenue for the years ended March 31, 2023, 2022, and 2021. For options trading, we have the capacity to offer options trading services and they are available to our clients. However, there was no revenue generated from options trading services for the relevant periods.
Although we have not been affected by inflation in the past, we may be affected if Hong Kong and any other jurisdiction where we operate in the future experience higher rates of inflation in the future. 88
Although we have not been affected by inflation in the past, we may be affected if Hong Kong and any other jurisdiction where we operate in the future experience higher rates of inflation in the future. 93
We charge each customer a fixed amount of initial installation fee and the monthly service fee based on a fixed rate per transaction executed on the platform with a minimum monthly fee. Trading solution services fees accounted for 42.3% of total revenues during the year ended March 31, 2022.
We charge each customer a fixed amount of initial installation fee and the monthly service fee based on a fixed rate per transaction executed on the platform with a minimum monthly fee. Trading solution services fees accounted for 45.3% and 42.3%, respectively, of total revenues during the year ended March 31, 2023 and 2022.
Communications and technology expenses accounted for 5.5%, 1.2% and 2.5% of our revenues for the years ended March 31, 2022, 2021 and 2020, respectively. Occupancy Occupancy expenses are the rental expenses we paid for our office premises, which accounted for around 1.7%, 0.8% and 0.8% of our revenues for the years ended March 31, 2022, 2021 and 2020, respectively.
Communications and technology expenses accounted for 8.0%, 5.5% and 1.2% of our revenues for the years ended March 31, 2023, 2022 and 2021, respectively. Occupancy Occupancy expenses are the rental expenses we paid for our office premises, which accounted for around 1.3%, 1.7% and 0.8% of our revenues for the years ended March 31, 2023, 2022 and 2021, respectively.
Our price mark-ups over the price offered by an exchange vary depending on the underlying product. iii). automatically roll-over currency positions each day and provide either a credit or debit for the interest rate difference between the two currencies in the pairs being held.
Our price mark-ups over the price offered by an exchange vary depending on the underlying product. iii). automatically roll-over currency positions each day and provide either a credit or debit for the interest rate difference between the two currencies in the pairs being held. The clients’ debits are our gains.
Subscription fee income is recognized when the customers successfully subscribe for the structure note products and underlying contract between the customer and financial institution becomes non-cancellable. Since December 2020, we have entered into the structured products business with fund houses and asset management companies and are responsible for providing subscriber services.
Subscription fee income is recognized when the customers successfully subscribe for the structured note products and underlying contract between the customer and financial institution becomes non-cancellable. We have entered into the structured products business with fund houses and asset management companies and are responsible for providing subscriber services.
Structure note subscription fees accounted for 9.4% and 0.5% of total revenues during the year ended March 31, 2022 and 2021, respectively. Other service revenues Other service revenues represent the revenues generated from rendering other financial services including securities brokerage, consulting services, and currency exchange services.
Structured note subscription fees accounted for 0.0%, 9.4% and 0.5% of total revenues during the year ended March 31, 2023, 2022 and 2021, respectively. 79 Other service revenues Other service revenues represent the revenues generated from rendering other financial services including securities brokerage, consulting services, and currency exchange services.
We generally receive subscription fees calculated with reference to the amount subscribed by our clients of the structured products. For the years ended March 31, 2022, 2021 and 2020, other service revenues accounted for 3.6%, 1.6% and 1.4% of total revenues, respectively.
We generally receive subscription fees calculated with reference to the amount subscribed by our clients of the structured products. For the years ended March 31, 2023, 2022 and 2021, other service revenues accounted for 3.0%, 3.6%, and 1.6% of total revenues, respectively.
This information should be read together with our consolidated financial statements and related notes included elsewhere in this prospectus. The operating results in any year are not necessarily indicative of the results that may be expected for any future trends.
This information should be read together with our unaudited condensed consolidated financial statements and related notes included elsewhere in this prospectus. The operating results in any period are not necessarily indicative of the results that may be expected for any future trends.
The volume rebates offered during the years ended March 31, 2022, 2021 and 2020 were $nil, $64,648 and $1,155,914, respectively. Trading solution services fees We provide trading solution services to customers (including individuals, proprietary trading companies or brokerage companies) for their trading on derivatives, equity, CFD and other financial products, through the internally developed proprietary investment management software.
The volume rebates offered during the years ended March 31, 2023, 2022 and 2021 were US$nil, US$nil and US$64,648, respectively. Trading solution services fees We provide trading solution services to customers (including individuals, proprietary trading companies or brokerage companies) for their trading on derivatives, equity, CFD and other financial products, through the internally developed proprietary investment management software.
The clients’ debits are our gains. 72 Asset Management Services Based on our clients’ different needs, we plan to provide personalized investment strategies to optimize their asset allocations. Our clients can purchase a wide variety of investment portfolios, which include assets such as stocks, bonds, ETFs, investment funds and derivatives.
Asset Management Services Based on our clients’ different needs, we plan to provide personalized investment strategies to optimize their asset allocations. Our clients can purchase a wide variety of investment portfolios, which include assets such as stocks, bonds, ETFs, investment funds and derivatives.
Currently our customers are mainly high volume and frequency trading institutional and individual investors. 70 Our revenues were US$7.8 million, US$16.9 million and US$16.5 million for the years ended March 31, 2022, 2021 and 2020, respectively.
Currently our customers are mainly high volume and frequency trading institutional and individual investors. Our revenues were US$9.7 million, US$7.8 million and US$16.9 million for the years ended March 31, 2023, 2022 and 2021, respectively.
The Company had trading gains of US$0.4 million in the year ended March 31, 2021 as compared to trading losses of US$0.8 million in the year ended March 31, 2022, which was mainly driven by the market condition of the US stock market.
The Company had trading gains of US$0.2 million in the year ended March 31, 2023 as compared to trading losses of US$0.8 million in the year ended March 31, 2022, which was mainly driven by the market condition of the US stock market.
ASC 606 establishes principles for reporting information about the nature, amount, timing and uncertainty of revenues and cash flows arising from the entity’s contracts to provide goods or services to customers.
Revenue recognition a) Revenue from Contracts with Customers ASC 606 establishes principles for reporting information about the nature, amount, timing and uncertainty of revenues and cash flows arising from the entity’s contracts to provide goods or services to customers.
We, through our Operating Subsidiaries, generated net income of US$3.5 million, US$5.0 million and US$2.5 million for the years ended March 31, 2022, 2021 and 2020, respectively.
We, through our Operating Subsidiaries, generated net income of US$3.4 million, US$3.5 million and US$5.0 million for the years ended March 31, 2023, 2022 and 2021, respectively.
Investing activities Net cash used in investing activities in year ended March 31, 2022 was US$0.4 million, which was fully spent on the purchase of investment properties in Cambodia. Net cash used in investing activities in year ended March 31, 2021 was US$16,278, which was fully spent on the purchase of fixed assets.
Net cash used in investing activities in year ended March 31, 2022 was US$0.4 million, which was fully spent on the purchase of investment properties in Cambodia. Net cash used in investing activities in year ended March 31, 2021 was US$16,278, which was fully spent on the purchase of property and equipment.
An accounting policy is considered critical if it requires an accounting estimate to be made based on assumptions about matters that are highly uncertain at the time such estimate is made, and if different accounting estimates that reasonably could have been used, or changes in the accounting estimates that are reasonably likely to occur periodically, could materially impact the consolidated financial statements.
An accounting policy is considered critical if it requires an accounting estimate to be made based on assumptions about matters that are highly uncertain at the time such estimate is made, and if different accounting estimates that reasonably could have been used, or changes in the accounting estimates that are reasonably likely to occur periodically, could materially impact the consolidated financial statements. 90 We prepare our financial statements in conformity with U.S.
Compensation and benefits expenses accounted for 7.2%, 4.1% and 4.0% of our revenues for the years ended March 31, 2022, 2021 and 2020, respectively.
Compensation and benefits expenses accounted for 10.4%, 7.2% and 4.1% of our revenues for the years ended March 31, 2023, 2022 and 2021, respectively.
Commissions from futures broking make up for most of our revenues, at 54.9%, 95.1% and 98.1% of the total revenues for the years ended March 31, 2022, 2021 and 2020, respectively.
Commissions from futures broking make up for most of our revenues, at 44.6%, 54.9% and 95.1% of the total revenues for the years ended March 31, 2023, 2022 and 2021, respectively.
According to the Census and Statistics Department of Hong Kong, the year-over-year percent changes in the consumer price index was an increase of 0.6% and 2.3% for fiscal years ended March 31, 2021 and 2020, respectively.
According to the Census and Statistics Department of Hong Kong, the year-over-year percent changes in the consumer price index was an increase of 1.7% and 0.6% for fiscal years ended March 31, 2022 and 2021, respectively.
Contract for Difference (“CFD”) We are preparing the launch of CFD products and services in the first or second quarter of 2023. We expect to generate CFD trading revenues from (i) commissions, (ii) bid/offer spreads, (iii) difference in interest rates. In particular, we plan to: i). charge commissions for all CFD transactions.
Contract for Difference (“CFD”) We are preparing the launch of CFD products and services in the year of 2024. We expect to generate CFD trading revenues from (i) commissions, (ii) bid/offer spreads, (iii) difference in interest rates. In particular, we plan to: i). charge commissions for all CFD transactions.
Our receivables from broker-dealers and clearing organizations decreased by 8.2% from US$2.6 million as of March 31, 2021 to US$2.3 million as of March 31, 2022, mainly due to such daily fluctuations. Securities owned, at fair value Securities owned, at fair value, mainly represented investments in both US stocks, all of which are on S&P500 index, and in HK stocks.
Our receivables from broker-dealers and clearing organizations increased by 36.1% from US$2.4 million as of March 31, 2022 to US$3.2 million as of March 31, 2023, mainly due to such daily fluctuations. Securities owned, at fair value Securities owned, at fair value, mainly represented investments in both US stocks, all of which are on S&P500 index, and in HK stocks.
Our payables to customers change daily depending on various factors, including the trading volume, net buy/sell transactions, futures contracts, long/short position and frequency of transactions on each specific day. The balances as of March 31, 2022 and 2021 kept stable. 5.B. Liquidity and Capital Resources .
Our payables to customers change daily depending on various factors, including the trading volume, net buy/sell transactions, futures contracts, long/short position and frequency of transactions on each specific day. The balances as of March 31, 2023 and 2022 kept stable at US$3.5 million and US$3.2 million, respectively. 87 5.B. Liquidity and Capital Resources .
Our ability to serve more consolidated accounts, depends on, among other things, our ability to support all aspects of customer verification, record keeping and compliance functions using our technology and human resources.
We intend to invest more resources on customer verification, record keeping, compliance and trading-related functions for consolidated accounts. Our ability to serve more consolidated accounts, depends on, among other things, our ability to support all aspects of customer verification, record keeping and compliance functions using our technology and human resources.
The following table sets forth the breakdown of our total revenues, both in absolute amount and as a percentage of our total revenues, for the years indicated: For the Years Ended March 31, 2022 2021 2020 US$ % US$ % US$ % Revenues: Futures brokerage commissions 4,287,038 54.9 16,085,815 95.1 16,179,198 98.1 Trading solution services fees 3,309,288 42.3 - 0.0 - 0.0 Structure note subscription fees 734,317 9.4 78,311 0.5 - 0.0 Other service revenues 280,677 3.6 277,937 1.6 226,599 1.4 Trading (losses) gains (794,460 ) (10.2 ) 387,057 2.3 22,124 0.1 Interest income and others 3,535 0.0 77,252 0.5 72,304 0.4 Total revenues 7,820,395 100.0 16,906,372 100.0 16,500,225 100.0 Futures brokerage commissions Futures brokerage commissions represent commission income on futures broking that are charged at a fixed rate for each transaction our customers executed through our online trading platforms, all of which are under the consolidated accounts where the customer information is not disclosed to the third party brokers.
The following table sets forth the breakdown of our total revenues, both in absolute amount and as a percentage of our total revenues, for the years indicated: For the Years Ended March 31, 2023 2022 2021 US$ % US$ % US$ % Revenues: Futures brokerage commissions 4,312,075 44.6 4,287,038 54.9 16,085,815 95.1 Trading solution services fees 4,396,207 45.3 3,309,288 42.3 - 0.0 Structure note subscription fees - 0.0 734,317 9.4 78,311 0.5 Other service revenues 294,083 3.0 280,677 3.6 277,937 1.6 Trading gains (losses) 193,926 2.0 (794,460 ) (10.2 ) 387,057 2.3 Interest income and others 499,111 5.1 3,535 0.0 77,252 0.5 Total revenues 9,695,402 100.0 7,820,395 100.0 16,906,372 100.0 Futures brokerage commissions Futures brokerage commissions represent commission income on futures broking that are charged at a fixed rate for each transaction our customers executed through our online trading platforms, all of which are under the consolidated accounts where the customer information is not disclosed to the third party brokers.
Our total registered customer number increased from 226 as of March 31, 2020 to 247 as of March 31, 2021, and further increased to 292 as of March 31, 2022. In the year ended March 31, 2020, we had 77 revenue-generating accounts in total, including 61 accounts for futures trading and 16 accounts for securities trading.
Our total registered customer number increased from 247 as of March 31, 2021 to 292 as of March 31, 2022, and further increased to 296 as of March 31, 2023. In the year ended March 31, 2021, we had 49 revenue-generating accounts in total, including 33 accounts for futures trading and 16 accounts for securities trading.
We prepare our financial statements in conformity with U.S. GAAP, which requires us to make judgments, estimates and assumptions. We continually evaluate these estimates and assumptions based on the most recently available information, our own historical experiences and various other assumptions that we believe to be reasonable under the circumstances.
GAAP, which requires us to make judgments, estimates and assumptions. We continually evaluate these estimates and assumptions based on the most recently available information, our own historical experiences and various other assumptions that we believe to be reasonable under the circumstances.
Trading solution services fees During the year ended March 31, 2022, we started providing trading solution services to customers (including individuals, proprietary trading companies or brokerage companies) for their trading on derivatives, equity, CFD and financial products, through our internally developed proprietary investment management software. We provide a variety of functions suitable for front-end transaction executions and back-office settlement operations.
Trading solution services fees Commencing in the year of 2021, we provided trading solution services to customers (including individuals, proprietary trading companies or brokerage companies) for their trading on derivatives, equity, CFD and financial products, through our internally developed proprietary investment management software. We provide a variety of functions suitable for front-end transaction executions and back-office settlement operations.
Net cash used in financing activities in the year ended March 31, 2020 was US$0.6 million, which was fully used in repayment of borrowings to a related party. 84 Dividend On March 24, 2020, we declared an interim cash dividend of HK$3.9 million (approximately US$0.5 million) and HK$1.5 million (approximately US$0.2 million) by our two major subsidiaries, ZYSL and ZYCL, respectively, to our single shareholder at the time of record, i.e. the Predecessor Parent Company.
Net cash used in financing activities in the year ended March 31, 2021 was US$2.3 million, which was used in payment of dividends of US$5.2 million to shareholders of ZYHL, partially net off against collection of borrowings of US$2.9 million from a related party. 89 Dividend On March 24, 2020, we declared an interim cash dividend of HK$3.9 million (approximately US$0.5 million) and HK$1.5 million (approximately US$0.2 million) by our two major subsidiaries, ZYSL and ZYCL, respectively, to our single shareholder at the time of record, i.e. the Predecessor Parent Company.
The following table sets forth a summary of the key requirements under the HK Financial Resources Rules that are applicable to ZYSL and ZYCL: Company Type of regulated activities governed by the HKSFC Minimum amount of paid- up capital Required liquid capital ZYSL Type 1 and 2 HK$ 10,000,000 HK$ 3,000,000 or (i) ZYCL Type 4, 5 and 9 HK$ 5,000,000 HK$ 3,000,000 or (i) (i) for company licensed for any regulated activities other than Type 3 regulated activities, its variable required liquid capital, which means 5% of the aggregate of (a) its adjusted liabilities, (b) the aggregate of the initial margin requirements in respect of outstanding futures contracts and outstanding options contracts held by it on behalf of its clients, and (c) the aggregate of the amounts of margin required to be deposited in respect of outstanding futures contracts and outstanding options contracts held by it on behalf of its clients, to the extent that such contracts are not subject to the requirement of payment of initial margin requirements.
The following table sets forth a summary of the key requirements under the HK Financial Resources Rules that are applicable to ZYSL and ZYCL: Company Type of regulated activities governed by the HKSFC Minimum amount of paid-up capital Required liquid capital ZYSL Type 1 and 2 $ 1,273,900 $ 382,170 or (i) ZYCL Type 4, 5 and 9 $ 636,950 $ 382,170 or (i) (i) for company licensed for any regulated activities other than Type 3 regulated activities, its variable required liquid capital, which means 5% of the aggregate of (a) its adjusted liabilities, (b) the aggregate of the initial margin requirements in respect of outstanding futures contracts and outstanding options contracts held by it on behalf of its clients, and (c) the aggregate of the amounts of margin required to be deposited in respect of outstanding futures contracts and outstanding options contracts held by it on behalf of its clients, to the extent that such contracts are not subject to the requirement of payment of initial margin requirements. 88 As of March 31, 2023 and 2022, all of our operating subsidiaries were in compliance with their respective regulatory capital requirements.
Our cash, cash equivalents and restricted cash primarily consist of general bank balances and segregated clients’ bank account balances. 82 We believe that our current cash, cash equivalents and restricted cash and our anticipated cash flows from operations will be sufficient to meet our cash needs for general corporate purposes for at least the next 12 months.
We believe that our current cash, cash equivalents and restricted cash and our anticipated cash flows from operations will be sufficient to meet our cash needs for general corporate purposes for at least the next 12 months.
We charge each customer a fixed amount of initial installation fee and the monthly service fee based on a fixed rate per transaction executed on the platform with a minimum monthly fee. We recognize the trading solution services as satisfied over the time.
We charge each customer a fixed amount of initial installation fee and the monthly service fee based on a fixed rate per transaction executed on the platform with a minimum monthly fee.
Results of Operations Year ended March 31, 2022 compared with year ended March 31, 2021 The following table sets forth a summary of our consolidated results of operations for the years ended March 31, 2022 and 2021 as indicated, and provides information regarding the dollar and percentage increase or (decrease) during such periods.
Top Fin and Top AM are subject to a flat rate of 17%. 81 Results of Operations Year ended March 31, 2023 compared with year ended March 31, 2022 The following table sets forth a summary of our consolidated results of operations for the years ended March 31, 2023 and 2022 as indicated, and provides information regarding the dollar and percentage increase or (decrease) during such periods.
Commission expenses accounted for 34.9%, 60.7% and 75.6% of our revenues for the years ended March 31, 2022, 2021 and 2020, respectively. Compensation and benefits Compensation and benefits represent the salaries, performance based discretionary bonuses and contribution to retirement fund.
Commission expenses accounted for 29.1%, 34.9% and 60.7% of our revenues for the years ended March 31, 2023, 2022 and 2021, respectively. 80 Compensation and benefits Compensation and benefits represent the salaries, performance based discretionary bonuses and contribution to retirement fund, and share-based compensation expenses to non-executive directors.
Expenses The following table sets forth our operating cost and expenses, both in absolute amount and as a percentage of total revenues, for the years indicated: For the Years Ended March 31, 2022 2021 2020 US$ % US$ % US$ % Expenses: Commission expenses 2,728,389 34.9 10,263,351 60.7 12,473,805 75.6 Compensation and benefits 562,297 7.2 690,867 4.1 657,473 4.0 Communications and technology 428,445 5.5 200,715 1.2 417,496 2.5 Occupancy 129,064 1.7 132,220 0.8 133,344 0.8 Travel and business development 53,337 0.7 16,880 0.1 52,167 0.3 Professional fees 271,477 3.5 382,827 2.3 55,946 0.3 Interest income and others 67,434 0.9 104,077 0.6 112,475 0.8 Total expenses 4,240,443 54.4 11,790,937 69.8 13,902,706 84.3 Commission expenses Commission expenses represent the fees we paid to our broker partners, when we place a client order to an exchange market through these partners.
Expenses The following table sets forth our operating cost and expenses, both in absolute amount and as a percentage of total revenues, for the years indicated: For the Years Ended March 31, 2023 2022 2021 US$ % US$ % US$ % Expenses: Commission expenses 2,818,124 29.1 2,728,389 34.9 10,263,351 60.7 Compensation and benefits 1,010,460 10.4 562,297 7.2 690,867 4.1 Communications and technology 775,464 8.0 428,445 5.5 200,715 1.2 Occupancy 124,792 1.3 129,064 1.7 132,220 0.8 Travel and business development 188,963 1.9 53,337 0.7 16,880 0.1 Professional fees 1,207,552 12.5 271,477 3.5 382,827 2.3 Interest income and others 140,784 1.5 67,434 0.9 104,077 0.6 Total expenses 6,266,139 64.7 4,240,443 54.4 11,790,937 69.8 Commission expenses Commission expenses represent the fees we paid to our broker partners, when we place a client order to an exchange market through these partners.
Other service revenues – Other service revenues kept stable at US$0.3 million in the year ended March 31, 2022, as compared with US$0.3 million in the year ended March 31, 2021. Trading (losses) gains – Trading gains/losses were firstly recognized as proprietary trading business started in March 2020.
Other service revenues – Other service revenues were stable at US$0.3 million and US$0.3 million in the years ended March 31, 2023 and 2022, respectively. Trading gains (losses) – Trading gains/losses were firstly recognized as proprietary trading business started in March 2020.
Cash Flows For the Years Ended March 31, 2022 2021 2020 Net cash provided by/(used in) operating activities $ 1,584,921 $ 4,333,768 $ (938,349 ) Net cash used in investing activities (413,890 ) (16,278 ) - Net cash used in financing activities - (2,326,250 ) (581,954 ) Net increase (decrease) in cash, cash equivalents and restricted cash 1,171,031 1,991,240 (1,520,303 ) Effect of exchange rates on cash, cash equivalents and restricted cash (49,748 ) (20,261 ) 74,864 Cash, cash equivalents and restricted cash, beginning of year 6,835,476 4,864,497 6,309,936 Cash, cash equivalents and restricted cash, end of year $ 7,956,759 $ 6,835,476 $ 4,864,497 83 Operating activities Net cash provided by operating activities in the year ended March 31, 2022 was US$1.6 million, as compared to the net profit of US$3.5 million.
Cash Flows For the Years Ended March 31, 2023 2022 2021 Net cash (used in) provided by operating activities $ (6,031,451 ) $ 1,584,921 $ 4,333,768 Net cash used in investing activities (6,542,863 ) (413,890 ) (16,278 ) Net cash provided by (used in) financing activities 22,500,871 - (2,326,250 ) Net increase in cash, cash equivalents and restricted cash 9,914,966 1,171,031 1,991,240 Effect of exchange rates on cash, cash equivalents and restricted cash (37,423 ) (49,748 ) (20,261 ) Cash, cash equivalents and restricted cash, beginning of year 7,956,759 6,835,476 4,864,497 Cash, cash equivalents and restricted cash, end of year $ 17,834,302 $ 7,956,759 $ 6,835,476 Operating activities Net cash used in operating activities in the year ended March 31, 2023 was US$2.2 million, as compared to the net profit of US$3.4 million.
Structure note subscription fees – Since December 2020, we have entered into the structured products business with fund houses and asset management companies and are responsible for providing subscriber services. For the years ended March 31, 2022 and 2021, the Company generated revenues of $0.7 million and $0.1 million from structure note subscription fees, respectively.
For the year ended March 31, 2022, the Company generated revenues of US$3.3 million from provision of trading solution services to 9 customers. Structured note subscription fees – Since December 2020, we have entered into the structured products business with fund houses and asset management companies and are responsible for providing subscriber services.
As of March 31, 2022, we had US$8.0 million in cash, cash equivalents and restricted cash, out of which US$7.6 million was held in U.S. dollars and the rest was held in Hong Kong dollars and other currencies.
As of March 31, 2023, we had US$17.8 million in cash, cash equivalents and restricted cash, out of which US$7.6 million was held in U.S. dollars and the rest was held in Hong Kong dollars and other currencies. Our cash, cash equivalents and restricted cash primarily consist of general bank balances and segregated clients’ bank account balances.
Structure note subscription fee We earn subscription service fees from customers by assisting customers to identify and subscribe for structure note products, which is calculated at a fixed percentage of investment amount.
We recognize the trading solution services as satisfied over the time. 91 Structured note subscription fees We earn subscription service fees from customers by assisting customers to identify and subscribe for structured note products, which is calculated at a fixed percentage of investment amount.
Trading gains – Trading gains were firstly recognized in the year ended March 31, 2020 as proprietary trading business started in March 2020. Trading gains increased from US$22,124 in the year ended March 31, 2020 to US$387,057 in the year ended March 31, 2021 which was mainly driven by the market condition of the US stock market.
Trading (losses) gains – Trading gains/losses were firstly recognized as proprietary trading business started in March 2020. The Company had trading gains of US$0.4 million in the year ended March 31, 2021 as compared to trading losses of US$0.8 million in the year ended March 31, 2022, which was mainly driven by the market condition of the US stock market.
The changes (as amended) are effective for the Company for annual and interim periods in fiscal years beginning after December 15, 2022, and we are in the process of evaluating the potential effect on our consolidated financial statements.
The changes (as amended) are effective for the Company for annual and interim periods in fiscal years beginning after December 15, 2022, and the adoption of the new accounting guidance did not have material impact on our consolidated financial statements.
Net income As a result of the foregoing, our net income decreased by 30.8% from US$5.0 million in the year ended March 31, 2021 to US$3.5 million in the year ended March 31, 2022.
Net income As a result of the foregoing, our net income decreased by 30.8% from US$5.0 million in the year ended March 31, 2021 to US$3.5 million in the year ended March 31, 2022. 85 Discussion of Certain Balance Sheet Items The following table sets forth selected information from our consolidated balance sheets as of March 31, 2023 and 2022.
Some of our accounting policies require a higher degree of judgment than others in their application and require us to make significant accounting estimates. 85 The following descriptions of critical accounting policies, judgments and estimates should be read in conjunction with our consolidated financial statements and other disclosures included in this prospectus.
The following descriptions of critical accounting policies, judgments and estimates should be read in conjunction with our consolidated financial statements and other disclosures included in this prospectus.
US$0.5 million have been settled with the shareholders in cash on January 19, 2021 and January 20, 2021 respectively, the remaining US$0.5 million was settled with the shareholders in cash on March 3, 2021.
US$0.5 million have been settled with the shareholders in cash on January 19, 2021 and January 20, 2021 respectively, the remaining US$0.5 million was settled with the shareholders in cash on March 3, 2021. We did not declare or pay any dividends for the years ended March 31, 2023 and 2022.
Year ended March 31, 2021 compared with year ended March 31, 2020 The following table sets forth a summary of our consolidated results of operations for the years ended March 31, 2021 and 2020 as indicated, and provides information regarding the dollar and percentage increase or (decrease) during such years.
Net income As a result of the foregoing, our net income decreased by 2.7% from US$3.5 million in the year ended March 31, 2022 to US$3.4 million in the year ended March 31, 2023. 83 Year ended March 31, 2022 compared with year ended March 31, 2021 The following table sets forth a summary of our consolidated results of operations for the years ended March 31, 2022 and 2021 as indicated, and provides information regarding the dollar and percentage increase or (decrease) during such periods.
Trading solution services fees – The Company commenced trading solution services to customers since May 2021. For the year ended March 31, 2022, the Company generated revenues of $3.3 million from provision of trading solution services to 9 customers.
Trading solution services fees – The Company commenced trading solution services to customers since May 2021. Trading solution service fees increased by 32.8% from US$3.3 million for the year ended March 31, 2022 to US$4.4 million for the year ended March 31, 2023.
Recent Developments On June 3, 2022, the Company completed its initial public offering on the National Association of Securities Dealers Automated Quotations (“NASDAQ”). In this offering, 5,000,000 Ordinary Shares were issued at a price of $5.00 per share. The gross proceeds received from the initial public offering totaled US$25 million.
In this offering, 5,000,000 ordinary shares were issued at a price of $5.00 per share. The gross proceeds received from the initial public offering totaled US$ 25.0 million.
Income before income taxes We had an income before income taxes of US$5.1 million and US$2.6 million in the years ended March 31, 2021 and 2020, respectively. Our operating margin was 30.3% and 15.7% in the years ended March 31, 2021 and 2020, respectively.
Income before income taxes We had an income before income taxes of US$3.4 million and US$3.6 million in the years ended March 31, 2023 and 2022, respectively. Our operating margin was 35.4% and 45.8% in the year ended March 31, 2023 and 2022, respectively.
We currently pursue a niche market strategy in Hong Kong and plan to expand to Southeast Asia as the first step in achieving the final goal of becoming the preferred online trading platforms for Asian investors worldwide, including the United States.
We have established two subsidiaries in Singapore during the year of 2023 and planned to expand to Southeast Asia as the first step in achieving the final goal of becoming the preferred online trading platforms for Asian investors worldwide, including the United States.
Trading gains make up for negative 10.2%, 2.3% and 0.1% of total revenues for the year ended March 31, 2022, 2021 and 2020. 74 Interest income and others Interest income and others primarily consist of interests earned on bank deposits.
Trading gains make up for 2.0%, negative 10.2%, and 2.3% of total revenues for the year ended March 31, 2023, 2022 and 2021.
Since the use of estimates is an integral component of the financial reporting process, actual results could differ from our expectations as a result of changes in our estimates.
Since the use of estimates is an integral component of the financial reporting process, actual results could differ from our expectations as a result of changes in our estimates. Some of our accounting policies require a higher degree of judgment than others in their application and require us to make significant accounting estimates.
We also expect cash segregated for regulatory purposes and payables due to customers on our balance sheet to increase significantly as a result of such growth. We intend to invest more resources on customer verification, record keeping, compliance and trading-related functions for consolidated accounts.
With the continuous improvement of our technology infrastructure and compliance capabilities, we are able to serve more consolidated accounts. We also expect cash segregated for regulatory purposes and payables due to customers on our balance sheet to increase significantly as a result of such growth.
We also plan to develop new sources of income from asset management, and CFD products and services, as we have seen the demand for these services by our customers.
We also plan to develop new sources of income from asset management, and CFD products and services, as we have seen the demand for these services by our customers. 76 Our ability to effectively improve technology infrastructure Our technology infrastructure and compliance capabilities are critical for us to offer high quality products and services as well as to retain and attract users and customers.
The Company recognizes revenue net of discount (if any) on a gross basis as the Company is determined to be the primary obligor in fulfilling the subscription services.. 86 Other service revenues We provide other financial services including securities brokerage, consulting services, and currency exchange services, and earn securities brokerage commissions, consultancy fee income and other revenues, which are recognized when the service is rendered according to the relevant contracts.
Other service revenues We provide other financial services including securities brokerage, consulting services, and currency exchange services, and earn securities brokerage commissions, consultancy fee income and other revenues, which are recognized when the service is rendered according to the relevant contracts.
Other administrative expenses primarily consist of fees paid to the Stock Exchange of Hong Kong and Chicago Mercantile Exchange, business entertainment expenses, exchange difference, depreciation expense, finance costs and other miscellaneous expenses such as utilities.
Other administrative expenses primarily consist of fees paid to the Stock Exchange of Hong Kong and Chicago Mercantile Exchange, business entertainment expenses, exchange difference, depreciation expense, finance costs and other miscellaneous expenses such as utilities. All of these expenses accounted for 15.9%, 5.1% and 3.0% of our revenues for the years ended March 31, 2023, 2022 and 2021, respectively.
Trading volume of futures contracts decreased from 9.61 million of futures contracts in the year ended March 31, 2021 to 2.64 million of futures contracts in the year ended March 31, 2022. The average commission rate over trading volumes in the year ended March 31, 2022 and 2021 kept relatively stable at US$1.62 and US$1.67 per contract, respectively.
The average commission rate over trading volumes in the year ended March 31, 2022 and 2021 kept relatively stable at US$1.62 and US$1.67 per contract, respectively. 84 Trading solution services fees – The Company commenced trading solution services to customers since May 2021.
To retain our responsible officers and stay compliant with the availability of responsible officer, we offer attractive remuneration packages and align their interests with the Company’s interests.
To retain our responsible officers and stay compliant with the availability of responsible officer, we offer attractive remuneration packages and align their interests with the Company’s interests. 78 Key Components of Results of Operations Revenues Our revenues consist of commissions, trading solution services and other service revenues, trading gains, interest income and others.
To expand our business, we aim to diversify our customer base by attracting smaller retail customers, whom we can charge higher commission rates. We expect to incur expenses in our promotional efforts through different online and offline media/ channels to increase the number of customer accounts, which can potentially lead to trading volume and revenues.
We expect to incur expenses in our promotional efforts through different online and offline media/ channels to increase the number of customer accounts, which can potentially lead to trading volume and revenues. We currently pursue a niche market strategy in Hong Kong.
Income tax expense We are subject to Hong Kong profits tax and under Hong Kong tax laws, ZYSL and ZYCL are exempted from income tax on its foreign-derived income.
Under Hong Kong tax laws, ZYSL and ZYCL are exempted from income tax on its foreign-derived income and there are no withholding taxes in Hong Kong on remittance of dividends.
We must continue to upgrade and expand our technology infrastructure and to strengthen our compliance system to keep pace with the growth of our business and to develop new features and services for our users and customers. With the continuous improvement of our technology infrastructure and compliance capabilities, we are able to serve more consolidated accounts.
They also enable us to facilitate secure, fast and cost-efficient financial transactions on our platform. We must continue to upgrade and expand our technology infrastructure and to strengthen our compliance system to keep pace with the growth of our business and to develop new features and services for our users and customers.
The amount recognized is the largest amount of tax benefit that is greater than 50% likely of being realized on examination.
The amount recognized is the largest amount of tax benefit that is greater than 50% likely of being realized on examination. Penalties and interest incurred related to underpayment of income tax are classified as income tax expense in the period incurred.
The total balance of cash and cash equivalents increased from US$4.9 million as of March 31, 2021 to US$6.2 million as of March 31, 2022, primarily as a result of improved cash provided by operating activities. Our cash and cash equivalents kept stable as of March 31, 2022 and 2021.
The total balance of cash and cash equivalents increased from US$6.2 million as of March 31, 2022 to US$16.0 million as of March 31, 2023, primarily as a result of proceeds raised in IPO.
Prior to our initial public offering in June 2022, our principal sources of liquidity to finance our operating activities have been net cash generated from operating activities, except in the year ended March 31, 2020 whereas we recorded net cash outflow in operating activities.
Prior to our initial public offering in June 2022, our principal sources of liquidity to finance our operating activities have been net cash generated from operating activities. On June 3, 2022, the Company completed its initial public offering on the National Association of Securities Dealers Automated Quotations (“NASDAQ”).
Our income tax expense decreased from US$58,443 in the year ended March 31, 2020 to US$70,765 in the year ended March 31, 2021, which was primarily due to the increase of the offshore profit in the year ended March 31, 2021 that was exempted from income taxation.
Income tax expense Our income tax expense decreased from US$88,647 in the year ended March 31, 2022 to US$31,520 in the year ended March 31, 2023, which was primarily due to the decrease of the onshore profit generated by ZYSL in the year ended March 31, 2023.
In the year ended March 31, 2021, we had 49 revenue-generating accounts in total, including 33 accounts for futures trading and 16 accounts for securities trading.
In the year ended March 31, 2023, we had 24 revenue-generating accounts in total, including 12 accounts for futures trading, 12 accounts for securities trading, and 10 accounts for trading solution services. Our top five customers accounted for 42%, 22%, and 92% of our total revenues for the years ended March 31, 2023, 2022 and 2021, respectively.
Our top five customers accounted for 22%, 91.6% and 64.8% of our total revenues for the years ended March 31, 2022, 2021 and 2020, respectively. Our customers are mainly sourced by referral through our shareholders’ expansive and expanding social and professional networks of high-net-worth individuals. Currently, we have not incurred significant spending on marketing activities.
Our customers are mainly sourced by referral through our shareholders’ expansive and expanding social and professional networks of high-net-worth individuals. Currently, we have not incurred significant spending on marketing activities. To expand our business, we aim to diversify our customer base by attracting smaller retail customers, whom we can charge higher commission rates.

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Item 4. Mine Safety Disclosures

Mine Safety Disclosures — required of mining issuers

200 edited+67 added−60 removed544 unchanged
Biggest changeGiven that (1) our Operating Subsidiaries are incorporated in Hong Kong or the British Virgin Islands and are located in Hong Kong, (2) we have no subsidiary, VIE structure nor any direct operations in mainland China, and (3) pursuant to the Basic Law of the Hong Kong Special Administrative Region (the “Basic Law”), which is a national law of the PRC and the constitutional document for Hong Kong, national laws of the PRC shall not be applied in Hong Kong except for those listed in Annex III of the Basic Law (which is confined to laws relating to defense and foreign affairs, as well as other matters outside the autonomy of Hong Kong), the Measures for Cybersecurity Review (2021), the PRC Personal Information Protection Law and the Draft Overseas Listing Regulations will not have an impact on our business, operations or future offerings, as our Operating Subsidiaries will not be deemed to be an “Operator” that are required to file for cybersecurity review before listing in the United States, because (i) our Operating Subsidiaries were incorporated in Hong Kong and the British Virgin Islands and operate in Hong Kong without any subsidiary or VIE structure in mainland China and each of the Measures for Cybersecurity Review (2021), the PRC Personal Information Protection Law and the Draft Overseas Listing Regulations remains unclear whether it shall be applied to a company based in Hong Kong; (ii) as of date of this annual report, our Operating Subsidiaries have in aggregate collected and stored personal information of approximately 300 PRC individuals (i.e., less than one million users); (iii) all of the data our Operating Subsidiaries have collected is stored in servers located in Hong Kong; and (iv) as of the date of this annual report, none of our Operating Subsidiaries have been informed by any PRC governmental authority of any requirement that it files for a cybersecurity review or a CSRC review.
Biggest changeIf a domestic company fails to complete required filing procedures or conceals any material fact or falsifies any major content in its filing documents, such domestic company may be subject to administrative penalties, such as an order to rectify, warnings, fines, and its controlling shareholders, actual controllers, the person directly in charge and other directly liable persons may also be subject to administrative penalties, such as warnings and fines. 12 In connection with our issuance of securities to foreign investors, under current PRC laws, regulations and regulatory rules, as of the date of this annual report, we do not believe we are currently required to obtain permissions from or complete any filing with the CSRC, or required to go through cybersecurity review by the CAC, given that (1) our Operating Subsidiaries are incorporated in Hong Kong or the British Virgin Islands and are located in Hong Kong, (2) we have no subsidiary, VIE structure nor any direct operations in mainland China, and (3) pursuant to the Basic Law of the Hong Kong Special Administrative Region (the “Basic Law”), which is a national law of the PRC and the constitutional document for Hong Kong, national laws of the PRC shall not be applied in Hong Kong except for those listed in Annex III of the Basic Law (which is confined to laws relating to defense and foreign affairs, as well as other matters outside the autonomy of Hong Kong).
The PRC government may also intervene or impose restrictions on our ability to move money out of Hong Kong to distribute earnings and pay dividends or to reinvest in our business outside of Hong Kong.
The PRC government may also intervene or impose restrictions on our ability to move money out of Hong Kong to distribute earnings and pay dividends or to reinvest in our business outside of Hong Kong.
The law requires data collection to be conducted in a legitimate and proper manner, and stipulates that, for the purpose of data protection, data processing activities must be conducted based on data classification and hierarchical protection system for data security.
The law requires data collection to be conducted in a legitimate and proper manner, and stipulates that, for the purpose of data protection, data processing activities must be conducted based on data classification and hierarchical protection system for data security.
On July 6, 2021, the General Office of the Communist Party of China Central Committee and the General Office of the State Council jointly issued a document to crack down on illegal activities in the securities market and promote the high-quality development of the capital market, which, among other things, requires the relevant governmental authorities to strengthen cross-border oversight of law-enforcement and judicial cooperation, to enhance supervision over China-based companies listed overseas, and to establish and improve the system of extraterritorial application of the PRC securities laws.
On July 6, 2021, the General Office of the Communist Party of China Central Committee and the General Office of the State Council jointly issued a document to crack down on illegal activities in the securities market and promote the high-quality development of the capital market, which, among other things, requires the relevant governmental authorities to strengthen cross-border oversight of law-enforcement and judicial cooperation, to enhance supervision over China-based companies listed overseas, and to establish and improve the system of extraterritorial application of the PRC securities laws.
On August 20, 2021, the 30th meeting of the Standing Committee of the 13th National People’s Congress voted and passed the “Personal Information Protection Law of the People’s Republic of China”, or “PRC Personal Information Protection Law”, which became effective on November 1, 2021.
On August 20, 2021, the 30th meeting of the Standing Committee of the 13th National People’s Congress voted and passed the “Personal Information Protection Law of the People’s Republic of China”, or “PRC Personal Information Protection Law”, which became effective on November 1, 2021.
The PRC Personal Information Protection Law applies to the processing of personal information of natural persons within the territory of China that is carried out outside of China where (1) such processing is for the purpose of providing products or services for natural persons within China, (2) such processing is to analyze or evaluate the behavior of natural persons within China, or (3) there are any other circumstances stipulated by related laws and administrative regulations.
The PRC Personal Information Protection Law applies to the processing of personal information of natural persons within the territory of China that is carried out outside of China where (1) such processing is for the purpose of providing products or services for natural persons within China, (2) such processing is to analyze or evaluate the behavior of natural persons within China, or (3) there are any other circumstances stipulated by related laws and administrative regulations.
In support of our plan to expand our securities and futures brokerage services to additional foreign exchanges, two new investment holding companies, namely ZYAL (BVI) Limited (“ZYAL (BVI)”) and ZYNL (BVI) Limited (“ZYNL (BVI)”), were established, under the laws of British Virgin Islands on January 7, 2021 and January 20, 2021, respectively.
In support of our plan to expand our securities and futures brokerage services to additional foreign exchanges, two new investment holding companies, namely ZYAL (BVI) Limited (“ZYAL (BVI)”) and ZYNL (BVI) Limited (“ZYNL (BVI)”), were established, under the laws of the British Virgin Islands on January 7, 2021 and January 20, 2021, respectively.
The HFCA Act states if the SEC determines that a company has filed audit reports issued by a registered public accounting firm that has not been subject to inspection by the PCAOB for three consecutive years beginning in 2021, the SEC shall prohibit the company’s shares from being traded on a national securities exchange or in the over the counter trading market in the United States.
The HFCA Act states if the SEC determines that a company has filed audit reports issued by a registered public accounting firm that has not been subject to inspection by the PCAOB for three consecutive years beginning in 2021, the SEC shall prohibit the company’s shares from being traded on a national securities exchange or in the over the counter trading market in the United States.
On March 24, 2021, the SEC adopted interim final rules relating to the implementation of certain disclosure and documentation requirements of the HFCA Act. A company will be required to comply with these rules if the SEC identifies it as having a “non-inspection” year under a process to be subsequently established by the SEC.
On March 24, 2021, the SEC adopted interim final rules relating to the implementation of certain disclosure and documentation requirements of the HFCA Act. A company will be required to comply with these rules if the SEC identifies it as having a “non-inspection” year under a process to be subsequently established by the SEC.
The rules apply to registrants that the SEC identifies as having filed an annual report with an audit report issued by a registered public accounting firm that is located in a foreign jurisdiction and that PCAOB is unable to inspect or investigate completely because of a position taken by an authority in foreign jurisdictions.
The rules apply to registrants that the SEC identifies as having filed an annual report with an audit report issued by a registered public accounting firm that is located in a foreign jurisdiction and that PCAOB is unable to inspect or investigate completely because of a position taken by an authority in foreign jurisdictions.
Recent Regulatory Development in the PRC We are aware that, recently, the PRC government initiated a series of regulatory actions and statements to regulate business operations in certain areas in China with little advance notice, including cracking down on illegal activities in the securities market, enhancing supervision over China-based companies listed overseas using a variable interest entity structure, adopting new measures to extend the scope of cybersecurity reviews, and expanding the efforts in anti-monopoly enforcement.
Recent Regulatory Development in the PRC We are aware that, recently, the PRC government initiated a series of regulatory actions and statements to regulate business operations in certain areas in China with little advance notice, including cracking down on illegal activities in the securities market, enhancing supervision over China-based companies listed overseas using a variable interest entity structure, adopting new measures to extend the scope of cybersecurity reviews, and expanding the efforts in anti-monopoly enforcement.
For example, on June 10, 2021, the Standing Committee of the National People’s Congress enacted the PRC Data Security Law, which took effect on September 1, 2021.
For example, on June 10, 2021, the Standing Committee of the National People’s Congress enacted the PRC Data Security Law, which took effect on September 1, 2021.
The law requires data collection to be conducted in a legitimate and proper manner, and stipulates that, for the purpose of data protection, data processing activities must be conducted based on data classification and hierarchical protection system for data security.
The law requires data collection to be conducted in a legitimate and proper manner, and stipulates that, for the purpose of data protection, data processing activities must be conducted based on data classification and hierarchical protection system for data security.
On July 6, 2021, the General Office of the Communist Party of China Central Committee and the General Office of the State Council jointly issued a document to crack down on illegal activities in the securities market and promote the high-quality development of the capital market, which, among other things, requires the relevant governmental authorities to strengthen cross-border oversight of law-enforcement and judicial cooperation, to enhance supervision over China-based companies listed overseas, and to establish and improve the system of extraterritorial application of the PRC securities laws.
On July 6, 2021, the General Office of the Communist Party of China Central Committee and the General Office of the State Council jointly issued a document to crack down on illegal activities in the securities market and promote the high-quality development of the capital market, which, among other things, requires the relevant governmental authorities to strengthen cross-border oversight of law-enforcement and judicial cooperation, to enhance supervision over China-based companies listed overseas, and to establish and improve the system of extraterritorial application of the PRC securities laws.
On August 20, 2021, the 30th meeting of the Standing Committee of the 13th National People’s Congress voted and passed the “Personal Information Protection Law of the People’s Republic of China”, or “PRC Personal Information Protection Law”, which became effective on November 1, 2021.
On August 20, 2021, the 30th meeting of the Standing Committee of the 13th National People’s Congress voted and passed the “Personal Information Protection Law of the People’s Republic of China”, or “PRC Personal Information Protection Law”, which became effective on November 1, 2021.
On December 28, 2021, the CAC jointly with the relevant authorities formally published Measures for Cybersecurity Review (2021) which took effect on February 15, 2022 and replace the former Measures for Cybersecurity Review (2020) issued on July 10, 2021.
On December 28, 2021, the CAC jointly with the relevant authorities formally published Measures for Cybersecurity Review (2021) which took effect on February 15, 2022 and replace the former Measures for Cybersecurity Review (2020) issued on July 10, 2021.
We, through our Operating Subsidiaries, currently derive substantially all our revenues from our futures and securities brokerage services through commission fees we charge our clients and other financial services including consulting services. currency exchange services and structured note subscriber services. Our revenues from commission fees are generated by client trades and are largely determined by trading volume and commission rates.
Our Operating Subsidiaries currently derive substantially all our revenues from our futures and securities brokerage services through commission fees we charge our clients and other financial services including consulting services. currency exchange services and structured note subscriber services. Our revenues from commission fees are generated by client trades and are largely determined by trading volume and commission rates.
We also encounter competition from the broker-dealer affiliates of established full-commission brokerage firms as well as from banks, mutual fund sponsors, online wealth management services (including so-called “robo-advisors”) and other financial institutions and organizations, some of which provide online brokerage services.
We also encounter competition from the broker-dealer affiliates of established full-commission brokerage firms as well as from banks, mutual fund sponsors, online wealth management services (including so-called “robo-advisors”) and other financial institutions and organizations, some of which provide online brokerage services.
ZYSL currently holds a Type 1 license for dealing in securities and a Type 2 license for dealing in futures contracts. ZYCL currently holds a Type 4 license for advising on securities, a Type 5 license for advising on futures contracts and a Type 9 license for asset management. See “ Item 4. Information on the Company—4.B.
ZYSL currently holds a Type 1 license for dealing in securities and a Type 2 license for dealing in futures contracts. ZYCL currently holds a Type 4 license for advising on securities, a Type 5 license for advising on futures contracts and a Type 9 license for asset management. See “ Item 4. Information on the Company—4.B.
We pay standard governmental annual fees to the HKSFC and are subject to continued regulatory obligations and requirements, including the maintenance of minimum paid-up share capital and liquid capital, maintenance of segregated accounts, and submission of audited accounts and other required documents, among others. See “ Item 4. Information on the Company—4.B.
We pay standard governmental annual fees to the HKSFC and are subject to continued regulatory obligations and requirements, including the maintenance of minimum paid-up share capital and liquid capital, maintenance of segregated accounts, and submission of audited accounts and other required documents, among others. See “ Item 4. Information on the Company—4.B.
Although there is no statutory enforcement in the Cayman Islands of judgments obtained in the federal or state courts of the United States (and the Cayman Islands are not a party to any treaties for the reciprocal enforcement or recognition of such judgments), a judgment in personam obtained in such jurisdiction will be recognized and enforced in the courts of the Cayman Islands at common law, without any re-examination of the merits of the underlying dispute, by an action commenced on the foreign judgment debt in the Grand Court of the Cayman Islands, provided such judgment (a) is given by a competent foreign court with jurisdiction to give the judgment, (b) imposes a specific positive obligation on the judgment debtor (such as an obligation to pay a liquidated sum or perform a specified obligation), (c) is final and conclusive, (d) is not in respect of taxes, a fine or a penalty;I) has not been obtained by fraud; and (f) was not obtained in a manner and is not of a kind the enforcement of which is contrary to natural justice or the public policy of the Cayman Islands.
Although there is no statutory enforcement in the Cayman Islands of judgments obtained in the federal or state courts of the United States (and the Cayman Islands are not a party to any treaties for the reciprocal enforcement or recognition of such judgments), a judgment in personam obtained in such jurisdiction will be recognized and enforced in the courts of the Cayman Islands at common law, without any re-examination of the merits of the underlying dispute, by an action commenced on the foreign judgment debt in the Grand Court of the Cayman Islands, provided such judgment (a) is given by a competent foreign court with jurisdiction to give the judgment, (b) imposes a specific positive obligation on the judgment debtor (such as an obligation to pay a liquidated sum or perform a specified obligation), (c) is final and conclusive, (d) is not in respect of taxes, a fine or a penalty) has not been obtained by fraud; and (f) was not obtained in a manner and is not of a kind the enforcement of which is contrary to natural justice or the public policy of the Cayman Islands.
Outlined below are some of the key continuing obligations of our licensed corporations under the HKSFO: ● maintenance of minimum paid-up share capital and liquid capital, and submission of financial returns to the HKSFC in accordance with the requirements under the Securities and Futures (Financial Resources) Rules (as discussed in more detail below); ● maintenance of segregated account(s), and custody and handling of client securities in accordance with the requirements under the Securities and Futures (Client Securities) Rules (Chapter 571H of the Laws of Hong Kong); ● maintenance of segregated account(s), and holding and payment of client money in accordance with the requirements under the Securities and Futures (Client Money) Rules (Chapter 571I of the Laws of Hong Kong); ● maintenance of proper records in accordance with the requirements prescribed under the Securities and Futures (Keeping of Records) Rules (Chapter 571O of the Laws of Hong Kong); ● maintenance of insurance against specific risks for specified amounts in accordance with the requirements under the Securities and Futures (Insurance) Rules (Chapter 571AI of the Laws of Hong Kong); ● payment of annual fees and submission of annual returns to the HKSFC within one month after each anniversary date of the license; and ● implementation of appropriate policies and procedures relating to client acceptance, client due diligence, record keeping, identification, and reporting of suspicious transactions and staff screening, education, and training in accordance with the requirements under the Guideline on Anti-Money Laundering and Counter-Terrorist Financing issued by the HKSFC; Obligation for substantial shareholders A person shall, in relation to a corporation, be regarded as a substantial shareholder of the corporation if he, either alone or with any of his associates— (i) has an interest in shares in the corporation— (a) the aggregate number of which shares is equal to more than 10% of the total number of issued shares of the corporation; or (b) which entitles the person, either alone or with any of his associates and either directly or indirectly, to exercise or control the exercise of more than 10% of the voting power at general meetings of the corporation; or (i) holds shares in any other corporation which entitles him, either alone or with any of his associates and either directly or indirectly, to exercise or control the exercise of 35% or more of the voting power at general meetings of the other corporation, or of a further corporation, which is itself entitled, either alone or with any of its associates and either directly or indirectly, to exercise or control the exercise of more than 10% of the voting power at general meetings of the corporation. 65 A person shall be regarded as being entitled to exercise or control the exercise of 35% or more of the voting power at general meetings of a corporation indirectly if he, either alone or with any of his associates, has an interest in shares in a further corporation which entitles him, either alone or with any of his associates, to exercise or control the exercise of 35% or more of the voting power at general meetings of the further corporation which is itself entitled, either alone or with any of its associates, to exercise or control the exercise of 35% or more of the voting power at general meetings of the first-mentioned corporation.
Outlined below are some of the key continuing obligations of our licensed corporations under the HKSFO: ● maintenance of minimum paid-up share capital and liquid capital, and submission of financial returns to the HKSFC in accordance with the requirements under the Securities and Futures (Financial Resources) Rules (as discussed in more detail below); ● maintenance of segregated account(s), and custody and handling of client securities in accordance with the requirements under the Securities and Futures (Client Securities) Rules (Chapter 571H of the Laws of Hong Kong); ● maintenance of segregated account(s), and holding and payment of client money in accordance with the requirements under the Securities and Futures (Client Money) Rules (Chapter 571I of the Laws of Hong Kong); ● maintenance of proper records in accordance with the requirements prescribed under the Securities and Futures (Keeping of Records) Rules (Chapter 571O of the Laws of Hong Kong); ● maintenance of insurance against specific risks for specified amounts in accordance with the requirements under the Securities and Futures (Insurance) Rules (Chapter 571AI of the Laws of Hong Kong); ● payment of annual fees and submission of annual returns to the HKSFC within one month after each anniversary date of the license; and ● implementation of appropriate policies and procedures relating to client acceptance, client due diligence, record keeping, identification, and reporting of suspicious transactions and staff screening, education, and training in accordance with the requirements under the Guideline on Anti-Money Laundering and Counter-Terrorist Financing issued by the HKSFC; Obligation for substantial shareholders A person shall, in relation to a corporation, be regarded as a substantial shareholder of the corporation if he, either alone or with any of his associates— (i) has an interest in shares in the corporation— (a) the aggregate number of which shares is equal to more than 10% of the total number of issued shares of the corporation; or (b) which entitles the person, either alone or with any of his associates and either directly or indirectly, to exercise or control the exercise of more than 10% of the voting power at general meetings of the corporation; or (i) holds shares in any other corporation which entitles him, either alone or with any of his associates and either directly or indirectly, to exercise or control the exercise of 35% or more of the voting power at general meetings of the other corporation, or of a further corporation, which is itself entitled, either alone or with any of its associates and either directly or indirectly, to exercise or control the exercise of more than 10% of the voting power at general meetings of the corporation. 69 A person shall be regarded as being entitled to exercise or control the exercise of 35% or more of the voting power at general meetings of a corporation indirectly if he, either alone or with any of his associates, has an interest in shares in a further corporation which entitles him, either alone or with any of his associates, to exercise or control the exercise of 35% or more of the voting power at general meetings of the further corporation which is itself entitled, either alone or with any of its associates, to exercise or control the exercise of 35% or more of the voting power at general meetings of the first-mentioned corporation.
Detailed guidelines are contained in “the Fit and Proper Guidelines,” “the Licensing Information Booklet,” and “the Guidelines on Competence” published by the HKSFC. 63 The Fit and Proper Guidelines apply to a number of persons including the following: ● an individual who applies for license or is licensed under Part V of the HKSFO; ● a licensed representative who applies for approval or is approved as a responsible officer under Part V of the HKSFO; ● a corporation which applies for license or is licensed under Part V of the HKSFO; ● an authorized financial institution which applies for registration or is registered under Part V of the HKSFO; ● an individual whose name is to be or is entered in the register maintained by the Hong Kong Monetary Authority under section 20 of the Banking Ordinance (Cap. 155) of Hong Kong; and ● an individual who applies to be or has been given consent to act as an executive director of a registered institution under section 71C of the Banking Ordinance (Cap. 155 of Hong Kong). ● Section 129(2) of the HKSFO empowers the HKSFC to take into consideration any of the following in considering whether a person is fit and proper: ● decisions made by such relevant authorities as stated in section 129(2)(a) of the HKSFO or any other authority or regulatory organization, whether in Hong Kong or elsewhere, in respect of that person; ● in the case of a corporation, any information relating to: o any other corporation within the group of companies; or o any substantial shareholder or officer of the corporation or of any of its group companies; ● in the case of a corporation licensed under section 116 or 117 of the HKSFO or registered under section of the HKSFO or an application for such license or registration: o any information relating to any other person who will be acting for or on its behalf in relation to the regulated activity; and o whether the person has established effective internal control procedures and risk management systems to ensure its compliance with all applicable regulatory requirements under any of the relevant provisions; ● in the case of a corporation licensed under section 116 or section 117 of the HKSFO or an application for the license, any information relating to any person who is or to be employed by, or associated with, the person for the purposes of the regulated activity; and ● the state of affairs of any other business which the person carries on or proposes to carry on.
Detailed guidelines are contained in “the Fit and Proper Guidelines,” “the Licensing Information Booklet,” and “the Guidelines on Competence” published by the HKSFC. 67 The Fit and Proper Guidelines apply to a number of persons including the following: ● an individual who applies for license or is licensed under Part V of the HKSFO; ● a licensed representative who applies for approval or is approved as a responsible officer under Part V of the HKSFO; ● a corporation which applies for license or is licensed under Part V of the HKSFO; ● an authorized financial institution which applies for registration or is registered under Part V of the HKSFO; ● an individual whose name is to be or is entered in the register maintained by the Hong Kong Monetary Authority under section 20 of the Banking Ordinance (Cap. 155) of Hong Kong; and ● an individual who applies to be or has been given consent to act as an executive director of a registered institution under section 71C of the Banking Ordinance (Cap. 155 of Hong Kong). ● Section 129(2) of the HKSFO empowers the HKSFC to take into consideration any of the following in considering whether a person is fit and proper: ● decisions made by such relevant authorities as stated in section 129(2)(a) of the HKSFO or any other authority or regulatory organization, whether in Hong Kong or elsewhere, in respect of that person; ● in the case of a corporation, any information relating to: o any other corporation within the group of companies; or o any substantial shareholder or officer of the corporation or of any of its group companies; ● in the case of a corporation licensed under section 116 or 117 of the HKSFO or registered under section of the HKSFO or an application for such license or registration: o any information relating to any other person who will be acting for or on its behalf in relation to the regulated activity; and o whether the person has established effective internal control procedures and risk management systems to ensure its compliance with all applicable regulatory requirements under any of the relevant provisions; ● in the case of a corporation licensed under section 116 or section 117 of the HKSFO or an application for the license, any information relating to any person who is or to be employed by, or associated with, the person for the purposes of the regulated activity; and ● the state of affairs of any other business which the person carries on or proposes to carry on.
Disciplinary Power of the HKSFC Under Part IX of the HKSFO and subject to the due process for exercising disciplinary powers laid down in section 198 of the HKSFO, the HKSFC may exercise any of the following disciplinary actions against a regulated person (including a licensed person or a registered institution) if that person is found to be guilty of misconduct or the HKSFC is of the opinion that a regulated person is not fit and proper to be or remain the same type of regulated person (sections 194 and 196 of the HKSFO). ● revocation or suspension of a license or a registration; revocation or suspension of part of a license or registration in relation to any of the regulated activities for which a regulated person is licensed or registered; ● revocation or suspension of the approval granted to a responsible officer; ● public or private reprimand on a regulated person; ● prohibition of a regulated person from applying to be licensed or registered or to be approved as a responsible officer; ● prohibition of a regulated person from applying to be given consent to act or continue to act as an executive officer of a registered institution; ● prohibition of a regulated person from re-entry to be licensed or registered; and ● pecuniary penalty of not exceeding the amount of HK$10 million or three times the amount of the profit gained or loss avoided as a result of the misconduct. 66 Exchange and Clearing Participantship As of the date of this annual report, ZYSL is a participant of the following exchanges or clearing houses: Exchange/Clearing House Type of Participantship SEHK Type 1 Participants (Participant ID: 02011) HKSCC Type 1 Participants (Participant ID: B02011) Trading Rights In addition to the licensing requirements under the HKSFO, the rules promulgated by the SEHK and the HKFE require any person who wishes to trade on or through their respective facilities to hold a trading right, or Trading Right.
Disciplinary Power of the HKSFC Under Part IX of the HKSFO and subject to the due process for exercising disciplinary powers laid down in section 198 of the HKSFO, the HKSFC may exercise any of the following disciplinary actions against a regulated person (including a licensed person or a registered institution) if that person is found to be guilty of misconduct or the HKSFC is of the opinion that a regulated person is not fit and proper to be or remain the same type of regulated person (sections 194 and 196 of the HKSFO). ● revocation or suspension of a license or a registration; revocation or suspension of part of a license or registration in relation to any of the regulated activities for which a regulated person is licensed or registered; ● revocation or suspension of the approval granted to a responsible officer; ● public or private reprimand on a regulated person; ● prohibition of a regulated person from applying to be licensed or registered or to be approved as a responsible officer; ● prohibition of a regulated person from applying to be given consent to act or continue to act as an executive officer of a registered institution; ● prohibition of a regulated person from re-entry to be licensed or registered; and ● pecuniary penalty of not exceeding the amount of HK$10 million or three times the amount of the profit gained or loss avoided as a result of the misconduct. 70 Exchange and Clearing Participantship As of the date of this annual report, ZYSL is a participant of the following exchanges or clearing houses: Exchange/Clearing House Type of Participantship SEHK Type 1 Participants (Participant ID: 02011) HKSCC Type 1 Participants (Participant ID: B02011) Trading Rights In addition to the licensing requirements under the HKSFO, the rules promulgated by the SEHK and the HKFE require any person who wishes to trade on or through their respective facilities to hold a trading right, or Trading Right.
Furthermore, securities markets may from time to time experience significant price and volume fluctuations that are not related to our operating performance, which may have a material and adverse effect on the trading price of our Ordinary Shares. 13 In addition to the above factors, the price and trading volume of our Ordinary Shares may be highly volatile due to multiple factors, including the following: ● regulatory developments affecting us or our industry; ● variations in our revenues, profit, and cash flow; ● changes in the economic performance or market valuations of other financial services firms; ● actual or anticipated fluctuations in our quarterly results of operations and changes or revisions of our expected results; ● changes in financial estimates by securities research analysts; ● detrimental negative publicity about us, our services, our officers, directors, Controlling Shareholder, other beneficial owners, our business partners, or our industry; ● announcements by us or our competitors of new service offerings, acquisitions, strategic relationships, joint ventures, capital raisings or capital commitments; ● additions to or departures of our senior management; ● litigation or regulatory proceedings involving us, our officers, directors, or Controlling Shareholder; ● release or expiry of lock-up or other transfer restrictions on our outstanding Ordinary Shares; and ● sales or perceived potential sales of additional Ordinary Shares.
Furthermore, securities markets may from time to time experience significant price and volume fluctuations that are not related to our operating performance, which may have a material and adverse effect on the trading price of our Ordinary Shares. 15 In addition to the above factors, the price and trading volume of our Ordinary Shares may be highly volatile due to multiple factors, including the following: ● regulatory developments affecting us or our industry; ● variations in our revenues, profit, and cash flow; ● changes in the economic performance or market valuations of other financial services firms; ● actual or anticipated fluctuations in our quarterly results of operations and changes or revisions of our expected results; ● changes in financial estimates by securities research analysts; ● detrimental negative publicity about us, our services, our officers, directors, Controlling Shareholder, other beneficial owners, our business partners, or our industry; ● announcements by us or our competitors of new service offerings, acquisitions, strategic relationships, joint ventures, capital raisings or capital commitments; ● additions to or departures of our senior management; ● litigation or regulatory proceedings involving us, our officers, directors, or Controlling Shareholder; ● release or expiry of lock-up or other transfer restrictions on our outstanding Ordinary Shares; and ● sales or perceived potential sales of additional Ordinary Shares.
WIN100 uses such software to provides trading solutions for clients trading on the world’s major derivatives and stock exchanges. The license agreement will automatically renew for up to 10 additional successive 5-year terms unless earlier termination. Either party may give the other party written notice of non-renewal at least 30 days prior to the expiration of the then-current term.
WIN100 Tech uses such software to provides trading solutions for clients trading on the world’s major derivatives and stock exchanges. The license agreement will automatically renew for up to 10 additional successive 5-year terms unless earlier termination. Either party may give the other party written notice of non-renewal at least 30 days prior to the expiration of the then-current term.
These risks and challenges include our ability to, among other things: ● build a well-recognized and respected brand; ● establish and expand our client base; ● maintain and enhance our relationships with our business partners; ● attract, retain, and motivate talented employees; ● anticipate and adapt to changing market conditions and a competitive landscape; 19 ● manage our future growth; ● ensure that the performance of our products and services meets client expectations; ● maintain or improve our operational efficiency; ● navigate a complex and evolving regulatory environment; ● defend ourselves in any legal or regulatory actions against us; ● enhance our technology infrastructure and maintain the security of our system and the confidentiality of the information provided and utilized across our system; ● avoid and remedy operating errors as a result of human or system errors; ● identify and address conflicts of interest; and ● identify and appropriately manage our related party transactions.
These risks and challenges include our ability to, among other things: ● build a well-recognized and respected brand; ● establish and expand our client base; ● maintain and enhance our relationships with our business partners; ● attract, retain, and motivate talented employees; ● anticipate and adapt to changing market conditions and a competitive landscape; ● manage our future growth; ● ensure that the performance of our products and services meets client expectations; ● maintain or improve our operational efficiency; 21 ● navigate a complex and evolving regulatory environment; ● defend ourselves in any legal or regulatory actions against us; ● enhance our technology infrastructure and maintain the security of our system and the confidentiality of the information provided and utilized across our system; ● avoid and remedy operating errors as a result of human or system errors; ● identify and address conflicts of interest; and ● identify and appropriately manage our related party transactions.
We, through our Operating Subsidiaries, own and maintain a number of registered domain names (including our website www.ZYFGL.com ) and, although we do not currently own any registered trademarks other than our company logo, registered in Hong Kong, we may in the future acquire new intellectual property such as trademarks, copyrights, domain names, and know-how.
Our Operating Subsidiaries own and maintain a number of registered domain names (including our website www.ZYFGL.com ) and, although we do not currently own any registered trademarks other than our company logo, registered in Hong Kong, we may in the future acquire new intellectual property such as trademarks, copyrights, domain names, and know-how.
Revenues from the structure note subscription fees accounted for 9.4% and 0.5% of the total revenues for the fiscal year ended March 31, 2022 and 2021, respectively. Our Operating Subsidiaries also provide other financial services including stock brokerage, options brokerage, consulting services, currency exchange services, and margin financing services to our clients.
Revenues from the structure note subscription fees accounted for 0%, 9.4% and 0.5% of the total revenues for the fiscal year ended March 31, 2023, 2022 and 2021, respectively. Our Operating Subsidiaries also provide other financial services including stock brokerage, options brokerage, consulting services, currency exchange services, and margin financing services to our clients.
The fees charged are independent from the trading volume or our revenues. The contract terms are reviewed and renegotiated annually. See “ Item 3. Key Information — 3.D. Risk Factors – Risks Relating to Our Business and Industry – We, through our Operating Subsidiaries, currently conduct our futures and stock brokerage business through trading platforms licensed from third parties.
The fees charged are independent from the trading volume or our revenues. The contract terms are reviewed and renegotiated annually. See “ Item 3. Key Information — 3.D. Risk Factors – Risks Relating to Our Business and Industry – Our Operating Subsidiaries currently conduct our futures and stock brokerage business through trading platforms licensed from third parties.
Our ability to compete successfully in the securities brokerage industry depends on a number of factors, such as: ● maintaining and expanding our market position; ● retaining existing customers and attracting and retaining new customers; ● providing easy to use and innovative financial products and services; ● our reputation and the market perception of our brand and overall value; ● maintaining competitive pricing; ● competing in a concentrated competitive landscape; ● optimizing our costs of doing business; ● the effectiveness of our technology (including cybersecurity defenses), products and services; ● deploying a secure and scalable technology and back office platform; ● complying with the differences in regulatory oversight regimes; ● attracting new employees and retaining our existing employees; and ● general economic and industry trends, including customer demand for financial products and services. 33 Our competitive position within the industry could be adversely affected if we were unable to address these factors adequately.
Our ability to compete successfully in the securities brokerage industry depends on a number of factors, such as: ● maintaining and expanding our market position; ● retaining existing customers and attracting and retaining new customers; ● providing easy to use and innovative financial products and services; ● our reputation and the market perception of our brand and overall value; ● maintaining competitive pricing; ● competing in a concentrated competitive landscape; ● optimizing our costs of doing business; ● the effectiveness of our technology (including cybersecurity defenses), products and services; ● deploying a secure and scalable technology and back office platform; ● complying with the differences in regulatory oversight regimes; ● attracting new employees and retaining our existing employees; and ● general economic and industry trends, including customer demand for financial products and services. 35 Our competitive position within the industry could be adversely affected if we were unable to address these factors adequately.
We generally receive subscription fee calculated with reference to the amount of the structured note products subscribed by our clients and the management fee rebate as subscription fee. Structured note subscriber services accounted for 9.4% and 0.5% of total revenues during the fiscal year ended March 31, 2022 and 2021, respectively.
We generally receive subscription fee calculated with reference to the amount of the structured note products subscribed by our clients and the management fee rebate as subscription fee. Structured note subscriber services accounted for 0%, 9.4% and 0.5% of total revenues during the fiscal year ended March 31, 2023, 2022 and 2021, respectively.
(1) In the case of a corporation licensed for any regulated activities other than Type 3 regulated activities, its variable required liquid capital which means 5% of the aggregate of (i) its adjusted liabilities, (ii) the aggregate of the initial margin requirements in respect of outstanding futures contracts and outstanding options contracts held by it on behalf of its clients, and (iii) the aggregate of the amounts of margin required to be deposited in respect of outstanding futures contracts and outstanding options contracts held by it on behalf of its clients, to the extent that such contracts are not subject to the requirement of payment of initial margin requirements. 61 Use of proceeds to fulfill requirements under the Financial Resources Rules Currently, neither of ZYSL or ZYCL needs to rely on any of the IPO proceeds to fulfill the requirements under the Financial Resources Rules Nevertheless, ZYSL and ZYCL may use part of the IPO proceeds for its future business development, and its liquidity position under the Financial Resources rules will be strengthened as a result.
(1) In the case of a corporation licensed for any regulated activities other than Type 3 regulated activities, its variable required liquid capital which means 5% of the aggregate of (i) its adjusted liabilities, (ii) the aggregate of the initial margin requirements in respect of outstanding futures contracts and outstanding options contracts held by it on behalf of its clients, and (iii) the aggregate of the amounts of margin required to be deposited in respect of outstanding futures contracts and outstanding options contracts held by it on behalf of its clients, to the extent that such contracts are not subject to the requirement of payment of initial margin requirements. 65 Use of proceeds to fulfill requirements under the Financial Resources Rules Currently, neither of ZYSL or ZYCL needs to rely on any of the IPO proceeds to fulfill the requirements under the Financial Resources Rules Nevertheless, ZYSL and ZYCL may use part of the IPO proceeds for its future business development, and its liquidity position under the Financial Resources rules will be strengthened as a result.
Under the HKSFO, a corporation that is not an authorized financial institution (as defined in section 2(1) of the Banking Ordinance (Cap. 155) of Hong Kong) and is: ● carrying on a business in a regulated activity (or holding out as carrying on a regulated activity), or ● actively marketing, whether in Hong Kong or from a place outside Hong Kong, to the public such services it provides, would constitute a regulatory activity if provided in Hong Kong, must be licensed by the HKSFC to carry out that regulatory activity, unless one of the exemptions under the HKSFO applies. 60 In addition to the licensing requirements on corporations, any individual who: (i) performs any regulated function in relation to a regulated activity carried on as a business, or (ii) holds himself out as performing such regulated activity, must be licensed separately under the HKSFO as a Licensed Representative accredited to his principal.
Under the HKSFO, a corporation that is not an authorized financial institution (as defined in section 2(1) of the Banking Ordinance (Cap. 155) of Hong Kong) and is: ● carrying on a business in a regulated activity (or holding out as carrying on a regulated activity), or ● actively marketing, whether in Hong Kong or from a place outside Hong Kong, to the public such services it provides, would constitute a regulatory activity if provided in Hong Kong, must be licensed by the HKSFC to carry out that regulatory activity, unless one of the exemptions under the HKSFO applies. 64 In addition to the licensing requirements on corporations, any individual who: (i) performs any regulated function in relation to a regulated activity carried on as a business, or (ii) holds himself out as performing such regulated activity, must be licensed separately under the HKSFO as a Licensed Representative accredited to his principal.
Products and services Pricing terms Futures contracts in COMEX, CBOT, ASX Transaction fees : US$20.0 per contract Futures contracts in CME, NYMEX, SGX Transaction fees : US$15.0 to 20.0 per contract Futures contracts in HKEX US Gold, CNH to USD Transaction fees : US$10.0 per contract Mini-Hang Seng Index, H-Share Index, Mini H-Share Index, Hang Seng Index Transaction fees : HK$50.0 to 100.0 per contract USD to CNH Transaction fees : US$20.0 per contract Futures contracts in EUREX DAX Performance Index, Mini DAX Performance Index Transaction fees : EUR20.0 per contract Futures contracts in NYBOT Cocoa, Cotton, Coffee, Sugar Transaction fees : US$20.0 per contract 48 Trading Solution Services During the fiscal year ended March 31, 2022, we commenced trading solution services to customers (including individuals, proprietary trading companies or brokerage companies) for their trading on derivatives, equity, CFD and financial products, through our internally developed proprietary investment management software.
Products and services Pricing terms Futures contracts in COMEX, CBOT, ASX Transaction fees : US$20.0 per contract Futures contracts in CME, NYMEX, SGX Transaction fees : US$15.0 to 20.0 per contract Futures contracts in HKEX US Gold, CNH to USD Transaction fees : US$10.0 per contract Mini-Hang Seng Index, H-Share Index, Mini H-Share Index, Hang Seng Index Transaction fees : HK$50.0 to 100.0 per contract USD to CNH Transaction fees : US$20.0 per contract Futures contracts in EUREX DAX Performance Index, Mini DAX Performance Index Transaction fees : EUR20.0 per contract Futures contracts in NYBOT Cocoa, Cotton, Coffee, Sugar Transaction fees : US$20.0 per contract 52 Trading Solution Services During the fiscal year ended March 31, 2022, we commenced trading solution services to customers (including individuals, proprietary trading companies or brokerage companies) for their trading on derivatives, equity, CFD and financial products, through our internally developed proprietary investment management software.
We face additional risks as we offer new products and services, transact with a broader array of clients and counterparties and expose ourselves to new geographical markets. We, through our Operating Subsidiaries, are committed to providing new products and services in order to strengthen our market position in the financial services industry and client relationships.
We face additional risks as we offer new products and services, transact with a broader array of clients and counterparties and expose ourselves to new geographical markets. Our Operating Subsidiaries are committed to providing new products and services in order to strengthen our market position in the financial services industry and client relationships.
The term of this contract is two years starting and has been automatically renewed. Pursuant to the agreement, we agreed to pay the annual licensing fee in the amount of HK$180,000 per year (approximately US$23,028). All copyright of Epolestar is owned by Esunny.
The term of this contract is two years starting and has been automatically renewed. Pursuant to the agreement, we agreed to pay the annual licensing fee in the amount of HK$180,000 per year (approximately US$23,000). All copyright of Epolestar is owned by Esunny.
The loss of any such customers or a material decline in their trading activities through us would have an adverse effect on our operating results (page 21). ● We may not succeed in promoting and sustaining our brand, which could have an adverse effect on our future growth and business (page 23). ● Our businesses depend on key management executives and professional staff, and our business may suffer if we are unable to recruit and retain them (page 23). ● We are subject to extensive and evolving regulatory requirements, the non-compliance with which may result in penalties, limitations, and prohibitions on our future business activities or suspension or revocation of our licenses, and consequently may materially and adversely affect our business, financial condition, and results of operations.
The loss of any such customers or a material decline in their trading activities through us would have an adverse effect on our operating results (page 23). ● We may not succeed in promoting and sustaining our brand, which could have an adverse effect on our future growth and business (page 25). ● Our businesses depend on key management executives and professional staff, and our business may suffer if we are unable to recruit and retain them (page 25). ● We are subject to extensive and evolving regulatory requirements, the non-compliance with which may result in penalties, limitations, and prohibitions on our future business activities or suspension or revocation of our licenses, and consequently may materially and adversely affect our business, financial condition, and results of operations.
If any person, including any of our employees, negligently disregards or intentionally breaches our established controls with respect to client or employee data, or otherwise mismanages or misappropriates that data, we could be subject to significant monetary damages, regulatory enforcement actions, fines and criminal prosecutions. 34 Although we maintain insurance coverage that we believe is reasonable, prudent and adequate for the purpose of our business, it might be insufficient in type or amount to protect us against all losses and costs stemming from security breaches, cyber-attacks and other types of unlawful activity or any resulting disruptions from such events.
If any person, including any of our employees, negligently disregards or intentionally breaches our established controls with respect to client or employee data, or otherwise mismanages or misappropriates that data, we could be subject to significant monetary damages, regulatory enforcement actions, fines and criminal prosecutions. 36 Although we maintain insurance coverage that we believe is reasonable, prudent and adequate for the purpose of our business, it might be insufficient in type or amount to protect us against all losses and costs stemming from security breaches, cyber-attacks and other types of unlawful activity or any resulting disruptions from such events.
To the extent any new or more stringent measures are required to be implemented, our business, financial condition and results of operations could be adversely affected and such measured could materially decrease the value of our Ordinary Shares, potentially rendering it worthless. 9 We may become subject to a variety of PRC laws and other obligations regarding data security offerings that are conducted overseas and/or foreign investment in China-based issuers, and any failure to comply with applicable laws and obligations could have a material and adverse effect on our business, financial condition and results of operations and may hinder our ability to offer or continue to offer Ordinary Shares to investors and cause the value of our Ordinary Shares to significantly decline or be worthless.
To the extent any new or more stringent measures are required to be implemented, our business, financial condition and results of operations could be adversely affected and such measured could materially decrease the value of our Ordinary Shares, potentially rendering it worthless. 11 We may become subject to a variety of PRC laws and other obligations regarding data security offerings that are conducted overseas and/or foreign investment in China-based issuers, and any failure to comply with applicable laws and obligations could have a material and adverse effect on our business, financial condition and results of operations and may hinder our ability to offer or continue to offer Ordinary Shares to investors and cause the value of our Ordinary Shares to significantly decline or be worthless.
Through our Operating Subsidiaries, we conduct our brokerage business through two trading platforms licensed from third parties. Our proposed CFD trading business will also be conducted through a trading platform licensed from a third party. Any interruption in the third parties’ services, or deterioration in the third parties’ performance or quality could adversely affect our business operation.
Our Operating Subsidiaries conduct brokerage business through two trading platforms licensed from third parties. Our proposed CFD trading business will also be conducted through a trading platform licensed from a third party. Any interruption in the third parties’ services, or deterioration in the third parties’ performance or quality could adversely affect our business operation.
However, if we choose to follow home country practices in the future, our shareholders may be afforded less protection than they would otherwise enjoy under the Nasdaq Capital Market listing standards applicable to U.S. domestic issuers. 17 There can be no assurance that we will not be a passive foreign investment company, or PFIC, for United States federal income tax purposes for any taxable year, which could subject United States investors in our Ordinary Shares to significant adverse United States income tax consequences.
However, if we choose to follow home country practices in the future, our shareholders may be afforded less protection than they would otherwise enjoy under the Nasdaq Capital Market listing standards applicable to U.S. domestic issuers. 19 There can be no assurance that we will not be a passive foreign investment company, or PFIC, for United States federal income tax purposes for any taxable year, which could subject United States investors in our Ordinary Shares to significant adverse United States income tax consequences.
YCM CPA Inc., the independent registered public accounting firm that issues the audit report for the fiscal year ended March 31, 2022 included in this annual report, is currently subject to PCAOB inspections and the PCAOB is thus able to inspect YCM CPA Inc.
YCM CPA Inc., the independent registered public accounting firm that issues the audit report for the fiscal year ended March 31, 2023 and 2022 included in this annual report, is currently subject to PCAOB inspections and the PCAOB is thus able to inspect YCM CPA Inc.
For consolidated accounts, we receive commission and pay a pre-determined portion to third parties clearing agents as execution and clearing fees License Agreement between Junli Yang and WIN100 On August 11, 2022, WIN100 entered into a license agreement with Ms.
For consolidated accounts, we receive commission and pay a pre-determined portion to third parties clearing agents as execution and clearing fees License Agreement between Junli Yang and WIN100 TECH On August 11, 2022, WIN100 Tech entered into a license agreement with Ms.
Even if you are successful in bringing an action of this kind, the laws of the Cayman Islands, Hong Kong, or other relevant jurisdictions may render you unable to enforce a judgment against our assets or the assets of our directors and officers. 15 There is uncertainty as to whether the courts of the Cayman Islands would (1) recognize or enforce judgments of U.S. courts obtained against us or our directors or officers that are predicated upon the civil liability provisions of the federal securities laws of the United States or the securities laws of any state in the United States, or (2) entertain original actions brought in the Cayman Islands against us or our directors or officers that are predicated upon the federal securities laws of the United States or the securities laws of any state in the United States.
Even if you are successful in bringing an action of this kind, the laws of the Cayman Islands, Hong Kong, or other relevant jurisdictions may render you unable to enforce a judgment against our assets or the assets of our directors and officers. 17 There is uncertainty as to whether the courts of the Cayman Islands would (1) recognize or enforce judgments of U.S. courts obtained against us or our directors or officers that are predicated upon the civil liability provisions of the federal securities laws of the United States or the securities laws of any state in the United States, or (2) entertain original actions brought in the Cayman Islands against us or our directors or officers that are predicated upon the federal securities laws of the United States or the securities laws of any state in the United States.
We, through our Operating Subsidiaries, currently conduct our futures and stock brokerage business through two trading platforms, Esunny for futures trading and 2GoTrade for stock trading, both of which were licensed from third parties. The cost, quality and accessibility of the two trading platforms are essential to our services.
Our Operating Subsidiaries currently conduct our futures and stock brokerage business through two trading platforms, Esunny for futures trading and 2GoTrade for stock trading, both of which were licensed from third parties. The cost, quality and accessibility of the two trading platforms are essential to our services.
The HKSFC works to strengthen and protect the integrity and soundness of Hong Kong’s securities and futures markets for the benefit of investors and the industry. 59 As set out in the HKSFO, HKSFC’s regulatory objectives are: ● to maintain and promote the fairness, efficiency, competitiveness, transparency, and orderliness of the securities and futures industry; ● to promote understanding by the public of financial services including the operation and functioning of the securities and futures industry; ● to provide protection for members of the public investing in or holding financial products; ● to minimize crime and misconduct in the securities and futures industry; ● to reduce systemic risks in the securities and futures industry; and ● to assist the Financial Secretary of Hong Kong in maintaining the financial stability of Hong Kong by taking appropriate actions in relation to the securities and futures industry.
The HKSFC works to strengthen and protect the integrity and soundness of Hong Kong’s securities and futures markets for the benefit of investors and the industry. 63 As set out in the HKSFO, HKSFC’s regulatory objectives are: ● to maintain and promote the fairness, efficiency, competitiveness, transparency, and orderliness of the securities and futures industry; ● to promote understanding by the public of financial services including the operation and functioning of the securities and futures industry; ● to provide protection for members of the public investing in or holding financial products; ● to minimize crime and misconduct in the securities and futures industry; ● to reduce systemic risks in the securities and futures industry; and ● to assist the Financial Secretary of Hong Kong in maintaining the financial stability of Hong Kong by taking appropriate actions in relation to the securities and futures industry.
You may face difficulties in protecting your interests, and your ability to protect your rights through U.S. courts may be limited, because we are incorporated under Cayman Islands law. We are a company incorporated under the laws of the Cayman Islands.
You may face difficulties in protecting your interests, and your ability to protect your rights through U.S. courts may be limited, because we are incorporated under Cayman Islands law. We are a company formed under the laws of the Cayman Islands.
If we fail to address any or all of these risks and challenges, our business may be materially and adversely affected. We, through our Operating Subsidiaries, have a relatively short history in serving our current client base.
If we fail to address any or all of these risks and challenges, our business may be materially and adversely affected. Our Operating Subsidiaries have a relatively short history in serving our current client base.
We believe that with our well-established IT infrastructure and streamlined organizational structure, the account opening process for individual and corporate accounts is smooth and efficient. 46 For the omnibus accounts, we also perform our KYC procedures to the futures commission merchants by obtaining supporting documents including, among others, Identity credentials and address Proof of Significant Controllers and Directors, Addendum to Agreement for Financial Intermediary, Certificate of Incorporation, Licensing Information, Board Minutes, Company Search Result and Annual Return / Certificate of Incumbency.
We believe that with our well-established IT infrastructure and streamlined organizational structure, the account opening process for individual and corporate accounts is smooth and efficient. 50 For the omnibus accounts, we also perform our KYC procedures to the futures commission merchants by obtaining supporting documents including, among others, Identity credentials and address Proof of Significant Controllers and Directors, Addendum to Agreement for Financial Intermediary, Certificate of Incorporation, Licensing Information, Board Minutes, Company Search Result and Annual Return / Certificate of Incumbency.
These risks are discussed more fully below and include, but are not limited to, risks related to: Risks Relating to Our Corporate Structure ● We rely on dividends and other distributions on equity paid by the Operating Subsidiaries to fund any cash and financing requirements we may have, and any limitation on the ability of the Operating Subsidiaries to make payments to us could have a material adverse effect on our ability to conduct our business (page 8). 6 Risks Relating to Doing Business in the Jurisdictions in which the Operating Subsidiaries Operate ● Substantially all of the Operating Subsidiaries’ operations are in Hong Kong.
These risks are discussed more fully below and include, but are not limited to, risks related to: Risks Relating to Our Corporate Structure ● We rely on dividends and other distributions on equity paid by the Operating Subsidiaries to fund any cash and financing requirements we may have, and any limitation on the ability of the Operating Subsidiaries to make payments to us could have a material adverse effect on our ability to conduct our business (page 4). 8 Risks Relating to Doing Business in the Jurisdictions in which the Operating Subsidiaries Operate ● Substantially all of the Operating Subsidiaries’ operations are in Hong Kong.
Changes in the policies, regulations, rules, and the enforcement of laws of the Chinese government may also be quick with little advance notice and our assertions and beliefs of the risk imposed by the PRC legal and regulatory system cannot be certain (page 9). ● We may become subject to a variety of PRC laws and other obligations regarding data security, and any failure to comply with applicable laws and obligations could have a material and adverse effect on our business, financial condition and results of operations (page 10). ● If the Chinese government chooses to extend the oversight and control over offerings that are conducted overseas and/or foreign investment in mainland China based issuers to Hong Kong-based issuers, such action may significantly limit or completely hinder our ability to offer or continue to offer Ordinary Shares to investors and cause the value of our Ordinary Shares to significantly decline or be worthless (page 11). ● The Hong Kong legal system embodies uncertainties which could limit the legal protections available to ZYSL and ZYCL (page 12). ● The Hong Kong regulatory requirement of prior approval for the transfer of shares in excess of a certain threshold may restrict future takeovers and other transactions (page 12). ● The enforcement of foreign civil liabilities in the Cayman Islands and Hong Kong is subject to certain conditions.
Changes in the policies, regulations, rules, and the enforcement of laws of the Chinese government may also be quick with little advance notice and our assertions and beliefs of the risk imposed by the PRC legal and regulatory system cannot be certain (page 11). ● We may become subject to a variety of PRC laws and other obligations regarding data security, and any failure to comply with applicable laws and obligations could have a material and adverse effect on our business, financial condition and results of operations (page 12). ● If the Chinese government chooses to extend the oversight and control over offerings that are conducted overseas and/or foreign investment in mainland China based issuers to Hong Kong-based issuers, such action may significantly limit or completely hinder our ability to offer or continue to offer Ordinary Shares to investors and cause the value of our Ordinary Shares to significantly decline or be worthless (page 13). ● The Hong Kong legal system embodies uncertainties which could limit the legal protections available to ZYSL and ZYCL (page 14). ● The Hong Kong regulatory requirement of prior approval for the transfer of shares in excess of a certain threshold may restrict future takeovers and other transactions (page 14). ● The enforcement of foreign civil liabilities in the Cayman Islands and Hong Kong is subject to certain conditions.
In addition, if a claim is successfully made against us, we may be required to pay significant damages, which could have a material adverse effect on our financial condition and results of operations. 14 If securities or industry analysts do not publish or publish inaccurate or unfavorable research about our business, or if they adversely change their recommendations regarding our Ordinary Shares, the market price for our Ordinary Shares and trading volume could decline.
In addition, if a claim is successfully made against us, we may be required to pay significant damages, which could have a material adverse effect on our financial condition and results of operations. 16 If securities or industry analysts do not publish or publish inaccurate or unfavorable research about our business, or if they adversely change their recommendations regarding our Ordinary Shares, the market price for our Ordinary Shares and trading volume could decline.
In addition, our profitability could be adversely affected due to our fixed costs and the possibility that we would be unable to reduce our variable costs without reducing revenues or within a timeframe sufficient to offset any decreases in revenues relating to changes in the market and economic conditions. 20 Geopolitical risks and political uncertainty may adversely impact economic conditions, increase market volatility, cause operational disruption to us and impact our strategic plans, which could have adverse effects on our business and its profitability.
In addition, our profitability could be adversely affected due to our fixed costs and the possibility that we would be unable to reduce our variable costs without reducing revenues or within a timeframe sufficient to offset any decreases in revenues relating to changes in the market and economic conditions. 22 Geopolitical risks and political uncertainty may adversely impact economic conditions, increase market volatility, cause operational disruption to us and impact our strategic plans, which could have adverse effects on our business and its profitability.
The fee which we will charge our client for an executed trade will include the total amount of fees charged by the execution broker, together with a brokerage fee which we will charge for arranging the trade through the execution broker. 58 Securities Clearing As we are a licensed broker in Hong Kong with integration into the trading systems of the Hong Kong Stock Exchange and the CCASS clearing system, we manage all steps involved in processing securities transactions independently for securities listed on the Hong Kong Stock Exchange or qualified under the Hong Kong.
The fee which we will charge our client for an executed trade will include the total amount of fees charged by the execution broker, together with a brokerage fee which we will charge for arranging the trade through the execution broker. 62 Securities Clearing As we are a licensed broker in Hong Kong with integration into the trading systems of the Hong Kong Stock Exchange and the CCASS clearing system, we manage all steps involved in processing securities transactions independently for securities listed on the Hong Kong Stock Exchange or qualified under the Hong Kong.
Although we have not identified any failure to detect material money laundering activities since we commenced our current businesses in 2015, if we fail to fully comply with applicable laws and regulations, the relevant government agencies may impose fines and other penalties on us, which may adversely affect our business. 28 We regularly encounter potential conflicts of interest, and failure to identify and address such conflicts of interest could adversely affect our business.
Although we have not identified any failure to detect material money laundering activities since we commenced our current businesses in 2015, if we fail to fully comply with applicable laws and regulations, the relevant government agencies may impose fines and other penalties on us, which may adversely affect our business. 30 We regularly encounter potential conflicts of interest, and failure to identify and address such conflicts of interest could adversely affect our business.
Anti-Money Laundering and Counter-Terrorist Financing Licensed corporations are required to comply with the applicable anti-money laundering and counter-terrorist financing laws and regulations in Hong Kong (including Anti-Money Laundering and Counter-Terrorist Financing (Financial Institutions) Ordinary Chapter 615 of the Laws of Hong Kong) as well as the Guideline on Anti-Money Laundering and Counter-Financing of Terrorism (For Licensed Corporations), or Anti-Money Laundering Guideline. 68 The Anti-Money Laundering Guideline provides practical guidance to assist licensed corporations and their senior management in designing and implementing their own anti-money laundering and counter-terrorist financing policies, procedures and controls in order to meet the relevant legal and regulatory requirements in Hong Kong.
Anti-Money Laundering and Counter-Terrorist Financing Licensed corporations are required to comply with the applicable anti-money laundering and counter-terrorist financing laws and regulations in Hong Kong (including Anti-Money Laundering and Counter-Terrorist Financing (Financial Institutions) Ordinary Chapter 615 of the Laws of Hong Kong) as well as the Guideline on Anti-Money Laundering and Counter-Financing of Terrorism (For Licensed Corporations), or Anti-Money Laundering Guideline. 72 The Anti-Money Laundering Guideline provides practical guidance to assist licensed corporations and their senior management in designing and implementing their own anti-money laundering and counter-terrorist financing policies, procedures and controls in order to meet the relevant legal and regulatory requirements in Hong Kong.
If our platform is unable to provide our clients with margin loans or fund the loans on a timely basis due to insufficient funding or less favorable pricing compared to those of our competitors, it would harm our business, financial condition and results of operations. 22 We may not succeed in promoting and sustaining our brand, which could have an adverse effect on our future growth and business.
If our platform is unable to provide our clients with margin loans or fund the loans on a timely basis due to insufficient funding or less favorable pricing compared to those of our competitors, it would harm our business, financial condition and results of operations. 24 We may not succeed in promoting and sustaining our brand, which could have an adverse effect on our future growth and business.
As of the date of this annual report, our operations are run in compliance with the Anti-Money Laundering Guideline. C. Organizational structure. The following is a list of our subsidiaries as of the date of this annual report.
As of the date of this annual report, our operations are run in compliance with the Anti-Money Laundering Guideline. 4.C. Organizational structure. The following is a list of our subsidiaries as of the date of this annual report.
In addition, the Cayman Islands companies may not have standing to initiate a shareholder derivative action in a federal court of the United States. 16 Shareholders of Cayman Islands companies like us have no general rights under the Cayman Islands laws to inspect corporate records, other than the amended and restated memorandum and articles of association and any special resolutions passed by such companies, and the registers of mortgages and charges of such companies.
In addition, the Cayman Islands companies may not have standing to initiate a shareholder derivative action in a federal court of the United States. 18 Shareholders of Cayman Islands companies like us have no general rights under the Cayman Islands laws to inspect corporate records, other than the amended and restated memorandum and articles of association and any special resolutions passed by such companies, and the registers of mortgages and charges of such companies.
The margin financing services did not generate any revenue as during the years ended March 31, 2022, 2020 and 2021. Clients can trade on margin through our trading platform licensed by 2GoTrade. The minimum deposit that customers must have to open and maintain a margin account so as to conduct margin trading is currently set at US$2,000.
The margin financing services did not generate any revenue as during the years ended March 31, 2023, 2022 and 2021. Clients can trade on margin through our trading platform licensed by 2GoTrade. The minimum deposit that customers must have to open and maintain a margin account so as to conduct margin trading is currently set at US$2,000.
Lastly, all compliance employees are required to undergo continuous intensive on-the-job training to become familiar with the latest regulatory environment developments. 56 Data Privacy In the course of our operation, we will collect personal data from our customers in connection with the account opening and our business operations and this information may be subject to data privacy laws in the jurisdiction of Hong Kong.
Lastly, all compliance employees are required to undergo continuous intensive on-the-job training to become familiar with the latest regulatory environment developments. 60 Data Privacy In the course of our operation, we will collect personal data from our customers in connection with the account opening and our business operations and this information may be subject to data privacy laws in the jurisdiction of Hong Kong.
Any limitation on the ability of our Hong Kong subsidiaries to pay dividends or make other distributions to us could materially and adversely limit our ability to grow, make investments or acquisitions that could be beneficial to our business, pay dividends, or otherwise fund and conduct our business. 8 Risks Relating to Doing Business in the Jurisdictions in which the Operating Subsidiaries Operate Substantially all of the Operating Subsidiaries’ operations are in Hong Kong.
Any limitation on the ability of our Hong Kong subsidiaries to pay dividends or make other distributions to us could materially and adversely limit our ability to grow, make investments or acquisitions that could be beneficial to our business, pay dividends, or otherwise fund and conduct our business. 10 Risks Relating to Doing Business in the Jurisdictions in which the Operating Subsidiaries Operate Substantially all of the Operating Subsidiaries’ operations are in Hong Kong.
Our agent for service of process in the United States is Cogency Global Inc. located at 122 Ea st 42nd Str ee t, 18th Floor, New York, NY 10168. Investors should contact us for any inquiries through the address and telephone number of our principal executive offices. Our website is www.TFGL.com .
Our agent for service of process in the United States is Cogency Global Inc. located at 122 Ea st 42nd Str ee t, 18th Floor, New York, NY 10168. Investors should contact us for any inquiries through the address and telephone number of our principal executive offices. Our website is www. ZYFGL.com .
Accordingly, the applicant has to fulfil certain requirements on academic and industry qualifications, relevant industry experience, management experience, and local regulatory framework paper as stipulated by the HKSFC. 62 Managers-in-Charge of Core Functions, or MICs A licensed corporation is required to designate certain individuals as MICs and provide to the HKSFC information about its MICs and their reporting lines.
Accordingly, the applicant has to fulfil certain requirements on academic and industry qualifications, relevant industry experience, management experience, and local regulatory framework paper as stipulated by the HKSFC. 66 Managers-in-Charge of Core Functions, or MICs A licensed corporation is required to designate certain individuals as MICs and provide to the HKSFC information about its MICs and their reporting lines.
Any such reallocation or adjustment could result in a higher overall tax liability for us and may adversely affect our business, financial condition, and results of operations. 26 Our risk management and internal control systems, as well as the risk management tools available to us, may not fully protect us against various risks inherent in our business.
Any such reallocation or adjustment could result in a higher overall tax liability for us and may adversely affect our business, financial condition, and results of operations. 28 Our risk management and internal control systems, as well as the risk management tools available to us, may not fully protect us against various risks inherent in our business.
Risk Factors — Risks Relating to Our Ordinary Shares— Our Ordinary Shares may be prohibited from being traded on a national exchange under the Holding Foreign Companies Accountable Act (the “HFCA Act”), if the Public Company Accounting Oversight Board (the “PCAOB”) is unable to inspect our auditors for three consecutive years beginning in 2021.
Risk Factors — Risks Relating to Our Ordinary Shares— Our Ordinary Shares may be prohibited from being traded on a national exchange under the Holding Foreign Companies Accountable Act (the “HFCA Act”), if the Public Company Accounting Oversight Board (the “PCAOB”) is unable to inspect our auditors for two consecutive years beginning in 2021.
Esunny agrees to (i) provide remote system operation services and technical support and (ii) provide safe and applicable storage space for our hardware equipment. 54 Epolestar Intelligent Platform V9.0 Licensing Service Contract On May 23, 2017, ZYSL entered into a Licensing Service Contract with Esunny in connection with the use of Epolestar Intelligent Platform V9.0 (“Epolestar”).
Esunny agrees to (i) provide remote system operation services and technical support and (ii) provide safe and applicable storage space for our hardware equipment. 58 Epolestar Intelligent Platform V9.0 Licensing Service Contract On May 23, 2017, ZYSL entered into a Licensing Service Contract with Esunny in connection with the use of Epolestar Intelligent Platform V9.0 (“Epolestar”).
System failures and constraints and transaction errors at such intermediaries could result in delays and erroneous or unanticipated execution prices, cause substantial losses for our customers and for us, and subject us to claims from our customers for damages. 35 Failure of third-party systems upon which we rely could adversely affect our business operation.
System failures and constraints and transaction errors at such intermediaries could result in delays and erroneous or unanticipated execution prices, cause substantial losses for our customers and for us, and subject us to claims from our customers for damages. 37 Failure of third-party systems upon which we rely could adversely affect our business operation.
Failure to successfully manage these risks in the development and implementation of new lines of business or new services could have a material adverse effect on our business, results of operations and financial condition. 36 We may not be able to obtain additional capital when desired, on favorable terms or at all.
Failure to successfully manage these risks in the development and implementation of new lines of business or new services could have a material adverse effect on our business, results of operations and financial condition. 38 We may not be able to obtain additional capital when desired, on favorable terms or at all.
Our management is responsible for defining the priorities, initiatives and resources necessary to execute the strategic plan, the success of which is regularly evaluated by the board of directors. 57 Reputational Risk — Reputational risk is the risk arising from possible negative perceptions, whether true or not, of the Company among our clients, counterparties, shareholders, suppliers, employees and regulators.
Our management is responsible for defining the priorities, initiatives and resources necessary to execute the strategic plan, the success of which is regularly evaluated by the board of directors. 61 Reputational Risk — Reputational risk is the risk arising from possible negative perceptions, whether true or not, of the Company among our clients, counterparties, shareholders, suppliers, employees and regulators.
Property, Plant and Equipment Facilities Our principal executive office is located at Flat 1101, 118 Connaught Road West in Hong Kong, where ZYSL, our subsidiary, leased approximately 189 square meters of office space. We pay an annual rent in the amount of HK$831,600 (approximately US$106,829).
Property, Plant and Equipment Facilities Our principal executive office is located at Flat 1101, 118 Connaught Road West in Hong Kong, where ZYSL, our subsidiary, leased approximately 189 square meters of office space. We pay an annual rent in the amount of HK$831,600 (approximately US$106,800).
Risks Relating to our Ordinary Shares ● Our Ordinary Shares may be prohibited from being traded on a national exchange under the Holding Foreign Companies Accountable Act (the “HFCA Act”), if the Public Company Accounting Oversight Board (the “PCAOB”) is unable to inspect our auditors for three consecutive years beginning in 2021.
Risks Relating to our Ordinary Shares ● Our Ordinary Shares may be prohibited from being traded on a national exchange under the Holding Foreign Companies Accountable Act (the “HFCA Act”), if the Public Company Accounting Oversight Board (the “PCAOB”) is unable to inspect our auditors for two consecutive years beginning in 2021.
Risks Relating to our Ordinary Shares Our Ordinary Shares may be prohibited from being traded on a national exchange under the Holding Foreign Companies Accountable Act (the “HFCA Act”), if the Public Company Accounting Oversight Board (the “PCAOB”) is unable to inspect our auditors for three consecutive years beginning in 2021.
Risks Relating to our Ordinary Shares Our Ordinary Shares may be prohibited from being traded on a national exchange under the Holding Foreign Companies Accountable Act (the “HFCA Act”), if the Public Company Accounting Oversight Board (the “PCAOB”) is unable to inspect our auditors for two consecutive years beginning in 2021.
In addition, we may be at a competitive disadvantage with regard to some of our competitors that have larger customer bases and greater human resources. During the years ended March 31, 2022, 2021 and 2020, our top five customers accounted for a significant portion of our total revenues.
In addition, we may be at a competitive disadvantage with regard to some of our competitors that have larger customer bases and greater human resources. During the years ended March 31, 2023, 2022 and 2021, our top five customers accounted for a significant portion of our total revenues.
Any interruption or deterioration in the performance of these third parties or failures of their information systems and technology could impair our operations, affect our reputation, and adversely affect our businesses. 27 Fraud or misconduct by our directors, officers, employees, agents, clients, or other third parties could harm our reputation and business and may be difficult to detect and deter.
Any interruption or deterioration in the performance of these third parties or failures of their information systems and technology could impair our operations, affect our reputation, and adversely affect our businesses. 29 Fraud or misconduct by our directors, officers, employees, agents, clients, or other third parties could harm our reputation and business and may be difficult to detect and deter.
If we incur any loss that is not covered by our insurance policies, or the compensated amount is significantly less than our actual loss, our business, financial condition, and results of operations could be materially and adversely affected. We have identified certain material weakness in our internal control over financial reporting.
If we incur any loss that is not covered by our insurance policies, or the compensated amount is significantly less than our actual loss, our business, financial condition, and results of operations could be materially and adversely affected. We have identified a material weakness in our internal control over financial reporting.
We generate interest income arising from margin financing offered by us to consolidated account clients and earn financing service fees related to the margin financing provided to our customers. 49 Agreements between ZYSL and Vision Financial Markets LLC and between ZYSL and Zinvest Global Limited We have entered into agreements with Vision Financial Markets LLC (“Vision”) and Zinvest Global Limited (“Zinvest”) for our margin financing business.
We generate interest income arising from margin financing offered by us to consolidated account clients and earn financing service fees related to the margin financing provided to our customers. 53 Agreements between ZYSL and Vision Financial Markets LLC and between ZYSL and Zinvest Global Limited We have entered into agreements with Vision Financial Markets LLC (“Vision”) and Zinvest Global Limited (“Zinvest”) for our margin financing business.
These disruptions to our business may take up significant energy and resources of our company, and materially and adversely affect our future prospects. 23 Moreover, our business operations depend on our professional staff, our most valuable asset. Their skills, reputation, professional experience, and client relationships are critical elements in obtaining and executing client engagements.
These disruptions to our business may take up significant energy and resources of our company, and materially and adversely affect our future prospects. 25 Moreover, our business operations depend on our professional staff, our most valuable asset. Their skills, reputation, professional experience, and client relationships are critical elements in obtaining and executing client engagements.
As we, through our Operating Subsidiaries, expand the scope of our business and our client base, it is critical for us to be able to timely address potential conflicts of interest, including situations where two or more interests within our businesses naturally exist but are in competition or conflict.
As our Operating Subsidiaries expand the scope of our business and our client base, it is critical for us to be able to timely address potential conflicts of interest, including situations where two or more interests within our businesses naturally exist but are in competition or conflict.

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Biggest changeFrom July 2019 to November 2020, Ms. Cai served as the Chief Financial Officer of China Eco-Materials Group Co. Limited, a company in the business of production and sales of eco-friendly construction material. From October 2017 to July 22, 2019, Ms. Cai has served as manager of Wealth Financial Services LLC. From December 2013 to September 2017, Ms.
Biggest changeCai served as the Director of CN Energy Group Inc., a Nasdaq-listed company in the business of manufactures and supplies wood-based activated carbon. From July 2019 to November 2020, Ms. Cai served as the Chief Financial Officer of China Eco-Materials Group Co. Limited, a company in the business of production and sales of eco-friendly construction material.
As the appointments of our independent directors was effective on May 31, 2022, for the fiscal year ended March 31, 2022 and 2021, we did not have any non-executive directors and therefore have not paid any compensation to any non-executive directors.
As the appointments of our independent directors was effective on May 31, 2022, for the fiscal year ended March 31, 2022, we did not have any non-executive directors and therefore have not paid any compensation to any non-executive directors.
The compensation committee will be responsible for, among other things: ● reviewing the total compensation package for our executive officers and making recommendations to the board; ● reviewing the compensation of our non-employee directors and making recommendations to the board with respect to it; and ● periodically reviewing and approving any long-term incentive compensation or equity plans, programs or similar arrangements, annual bonuses, and employee pension and welfare benefit plans. 92 Nominating and Corporate Governance Committee.
The compensation committee will be responsible for, among other things: ● reviewing the total compensation package for our executive officers and making recommendations to the board; ● reviewing the compensation of our non-employee directors and making recommendations to the board with respect to it; and ● periodically reviewing and approving any long-term incentive compensation or equity plans, programs or similar arrangements, annual bonuses, and employee pension and welfare benefit plans. 97 Nominating and Corporate Governance Committee.
Employees We had 11 employees as of March 31, 2022. We enter into individual employment contracts with selected employees to cover matters including non-competition and confidentiality arrangements. We generally formulate our employees’ remuneration package to include salary and benefits. We provide our employees with social security benefits in accordance with all applicable regulations and internal policies.
Employees We had 11 employees as of March 31, 2023. We enter into individual employment contracts with selected employees to cover matters including non-competition and confidentiality arrangements. We generally formulate our employees’ remuneration package to include salary and benefits. We provide our employees with social security benefits in accordance with all applicable regulations and internal policies.
Our board of directors has adopted a charter for the audit committee, the compensation committee, and the nominating and corporate governance committee. Each committee’s members and functions are described below. 91 Audit Committee. Our audit committee consists of Mr. Anthony S. Chan, Ms. Mei Cai, and Mr. Mau Chung Ng and will be chaired by Mr. Anthony S. Chan. Mr.
Our board of directors has adopted a charter for the audit committee, the compensation committee, and the nominating and corporate governance committee. Each committee’s members and functions are described below. 96 Audit Committee. Our audit committee consists of Mr. Anthony S. Chan, Ms. Mei Cai, and Mr. Mau Chung Ng and will be chaired by Mr. Anthony S. Chan. Mr.
Chan holds an MBA in Finance and Investments from Baruch College of the City University of New York, and a Bachelor of Arts in Accounting and Economics from Queens College of the City University of New York. Mau Chung Ng has served as a director and as our chairman since May 31, 2022. Mr.
Chan holds an MBA in Finance and Investments from Baruch College of the City University of New York, and a Bachelor of Arts in Accounting and Economics from Queens College of the City University of New York. Mau Chung Ng has served as a director and as the chairman of our compensation committee since May 31, 2022. Mr.
A shareholder may in certain limited exceptional circumstances have the right to seek damages in our name if a duty owed by our directors is breached. 93 Our board of directors has all the powers necessary for managing, and for directing and supervising, our business affairs.
A shareholder may in certain limited exceptional circumstances have the right to seek damages in our name if a duty owed by our directors is breached. 98 Our board of directors has all the powers necessary for managing, and for directing and supervising, our business affairs.
Through these relationships, we are able to offer a higher variety of products to our customers cost-efficiently. Ms. Yang received a Bachelor of Science Degree in Applied Psychology from Beijing Normal University in January 2012. Anthony S. Chan has served as a director and as our chairman since May 31, 2022. Mr.
Through these relationships, we are able to offer a higher variety of products to our customers cost-efficiently. Ms. Yang received a Bachelor of Science Degree in Applied Psychology from Beijing Normal University in January 2012. Anthony S. Chan has served as a director and as the chairman of our audit committee since May 31, 2022. Mr.
None of our employees are represented by labor unions. We believe that we maintain a good working relationship with our employees and we have not experienced any significant labor disputes. 94 6.E.
None of our employees are represented by labor unions. We believe that we maintain a good working relationship with our employees and we have not experienced any significant labor disputes. 99 6.E.
Tam received a Bachelor of Business Administration and a Higher Diploma in Business Studies from the Open University of Hong Kong in 2003 and 2001 respectively. 89 Junli Yang has served as a director and as our chairman since August 1, 2019. She is the founder of the Company and has extensive experience in various management capacities.
Tam received a Bachelor of Business Administration and a Higher Diploma in Business Studies from the Open University of Hong Kong in 2003 and 2001 respectively. 94 Junli Yang has served as a director and as our chairwoman since August 1, 2019. She is the founder of the Company and has extensive experience in various management capacities.
The calculations in the table below are based on 35,050,000 Ordinary Shares issued and outstanding as of the date of this annual report. All of our shareholders who own our Ordinary Shares have the same voting rights. Beneficial ownership is determined in accordance with the rules and regulations of the SEC.
The calculations in the table below are based on 35,007,233 Ordinary Shares issued and outstanding as of the date of this annual report. All of our shareholders who own our Ordinary Shares have the same voting rights. Beneficial ownership is determined in accordance with the rules and regulations of the SEC.
Directors and Senior Management The following table provides information regarding our executive officers and directors as of the date hereof: Name Age Position(s) Ka Fai Yuen 48 Chief Executive Officer and Director Yung Yung Lo 40 Chief Financial Officer Jennifer Hoi Ling Tam 45 Chief Operating Officer Junli Yang 44 Director (Chairwoman) Anthony S.
Directors and Senior Management The following table provides information regarding our executive officers and directors as of the date hereof: Name Age Position(s) Ka Fai Yuen 49 Chief Executive Officer and Director Yung Yung Lo 41 Chief Financial Officer Jennifer Hoi Ling Tam 46 Chief Operating Officer Junli Yang 45 Director (Chairwoman) Anthony S.
Chan is a Certified Public Accountant registered with the State of New York and a seasoned executive with over 30 years of professional experience in auditing, financial reporting and business advisory. Currently, Mr.
Chan is a Certified Public Accountant registered with the State of New York and a seasoned executive with over 30 years of professional experience in auditing, financial reporting and business advisory. Currently, Mr. Chan is the Chief Operating Officer of Alset Inc.
Chan 58 Independent Director (Appointee) (1) Mau Chung Ng 64 Independent Director (Appointee) (1) Mei Cai 42 Independent Director (Appointee) (1) Ka Fai Yuen has served as our chief executive officer and as a director since February 1, 2021. Mr. Yuen has more than 20 years of experience in the financial services industry.
Chan 59 Independent Director Mau Chung Ng 65 Independent Director Mei Cai 43 Independent Director Ka Fai Yuen has served as our chief executive officer and as a director since February 1, 2021. Mr. Yuen has more than 20 years of experience in the financial services industry.
Chan, Independent Director (Appointee) - - Mau Chung Ng, Independent Director (Appointee) - - Mei Cai, Independent Director (Appointee) - - All Directors and Executive Officers as a Group (7 people) 30,000,000 85.59 % Principal Shareholders holding 5% or more: Zhong Yang Holdings (BVI) Limited (1)(2) 30,000,000 85.59 % (1) Represents 30,000,000 Ordinary Shares held by Zhong Yang Holdings (BVI) Limited.
Chan, Independent Director (Appointee) 2,411 * Mau Chung Ng, Independent Director (Appointee) 2,411 * Mei Cai, Independent Director (Appointee) 2,411 * All Directors and Executive Officers as a Group (7 people) 30,007,233 85.72 % Principal Shareholders holding 5% or more: Zhong Yang Holdings (BVI) Limited (1)(2) 30,000,000 85.70 % * less than 1% (1) Represents 30,000,000 Ordinary Shares held by Zhong Yang Holdings (BVI) Limited.
These shares, however, are not included in the computation of the percentage ownership of any other person. Ordinary Shares Beneficially Owned Number % Directors and Executive Officers: Junli Yang, Director (Chairman) (2) 30,000,000 (1) 85.59 % Ka Fai Yuen, CEO - - Yung Yung Lo, CFO (2) 2,490,000 7.10 % Jennifer Hoi Ling Tam, COO - - Anthony S.
These shares, however, are not included in the computation of the percentage ownership of any other person. Ordinary Shares Beneficially Owned Number % Directors and Executive Officers: Junli Yang, Director (Chairwoman) (2) 30,000,000 (1) 85.70 % Ka Fai Yuen, CEO - - Yung Yung Lo, CFO (2) 1,818,000 5.19 % Jennifer Hoi Ling Tam, COO - - Anthony S.
(2) Zhong Yang Holdings (BVI) Limited is a company incorporated in the British Virgin Islands. Junli Yang owns 55.5% of the equity interest in Zhong Yang Holdings (BVI) Limited. Yung Yung Lo holds 8.3% of the equity interest in Zhong Yang Holdings (BVI) Limited. Ji An holds 20.2% of the equity interest in Zhong Yang Holdings (BVI) Limited.
(2) Zhong Yang Holdings (BVI) Limited is a company incorporated in the British Virgin Islands. Junli Yang owns 82.3% of the equity interest in Zhong Yang Holdings (BVI) Limited. Yung Yung Lo holds 6.06% of the equity interest in Zhong Yang Holdings (BVI) Limited. Ji An holds 8.68% of the equity interest in Zhong Yang Holdings (BVI) Limited.
Chan is the Chief Financial Officer (CFO) of Sharing Services Global Corporation (OTC: SHRG) and President of CA Global Consulting Inc., a company he co-founded in February 2014. Since February 2020, he has been serving as the Director of Assurance and Advisory Services at Wei, Wei& Co., LLP., a full-service CPA firm registered with the PCAOB.
(Nasdaq: AEI), Chief Financial Officer (CFO) of Sharing Services Global Corporation (OTC: SHRG) and President of CA Global Consulting Inc. Since February 2020, he has been serving as the Director of Assurance and Advisory Services at Wei, Wei & Co., LLP., a full-service CPA firm registered with the PCAOB. From July 2019 to January 2020, Mr.
Compensation of Directors and Executive Officers For the fiscal year ended March 31, 2022, we paid an aggregate of HK$2,162,426 (US$277,790) as compensation to our directors and executive officers as well as an aggregate of HK$54,000 (US$6,937) contributions to the Mandatory Provident Fund (“MPF”), a statutory retirement scheme introduced after the enactment of the Mandatory Provident Fund Schemes Ordinance in Hong Kong.
Compensation of Directors and Executive Officers For the fiscal year ended March 31, 2023, we paid an aggregate of HK$2,646,072 (US$339,253) as compensation to our directors and executive officers as well as an aggregate of HK$49,910 (US$6,399) contributions to the Mandatory Provident Fund (“MPF”), a statutory retirement scheme introduced after the enactment of the Mandatory Provident Fund Schemes Ordinance in Hong Kong.
Family Relationships None of the directors or executive officers has a family relationship as defined in Item 401 of Regulation S-K. 90 6.B. Compensation Employment Agreements and Indemnification Agreements We have entered into employment agreements with our senior executive officers.
Cai graduated from Jiangsu Radio & TV University with a major in Economic Management in December 2003. Family Relationships None of the directors or executive officers has a family relationship as defined in Item 401 of Regulation S-K. 95 6.B. Compensation Employment Agreements and Indemnification Agreements We have entered into employment agreements with our senior executive officers.
For the fiscal year ended March 31, 2021, we paid an aggregate of HK$2,193,694 (US$282,962) as compensation to our directors and executive officers as well as an aggregate of HK$54,000 (US$6,965) contributions to the MPF.
For the fiscal year ended March 31, 2022, we paid an aggregate of HK$2,162,426 (US$277,790) as compensation to our directors and executive officers as well as an aggregate of HK$54,000 (US$6,937) contributions to the MPF.
Board Practices Board of Directors Our board of directors consists of five directors. A director is not required to hold any shares in our company to qualify to serve as a director.
We do not have any equity incentive plan in place as of the date of this annual report. 6.C. Board Practices Board of Directors Our board of directors consists of five directors. A director is not required to hold any shares in our company to qualify to serve as a director.
Mei Cai has served as a director and as our chairman since May 31, 2022. Ms. Cai is a seasoned executive with approximately 15 years of professional experience in auditing and financial reporting. Since November 2020, Ms. Cai has been serving as the Chief Financial Officer of Jowell Global Ltd., a Nasdaq-listed e-commerce platform.
Mei Cai has served as a director and as the chairwoman of our Nominating and Corporate Governance Committee since May 31, 2022. Ms. Cai is a seasoned executive with approximately 15 years of professional experience in auditing and financial reporting. Since January 2023, Ms.
Junli Yang is the sole director of Zhong Yang Holdings (BVI) Limited and has the power to direct the voting and disposition of the Ordinary Shares held by Zhong Yang Holdings (BVI) Limited. Junli Yang may be deemed the beneficial owner of all Ordinary Shares held by Zhong Yang Holdings (BVI) Limited. 95
Jian Li, and Hong Chen each owns less than 2% of the equity interest in Zhong Yang Holdings (BVI) Limited. Junli Yang is the sole director of Zhong Yang Holdings (BVI) Limited and has the power to direct the voting and disposition of the Ordinary Shares held by Zhong Yang Holdings (BVI) Limited.
From July 2019 to January 2020, Mr. Chan served as the CFO of SPI Energy Co. Ltd, a Nasdaq-listed company in the business of delivering green energy solutions. From October 2017 to March 2019, Mr. Chan served as the CFO of Helo Corp., a technology company listed on the OTC. From September 2013 to November 2015, Mr.
Chan served as the CFO of SPI Energy Co. Ltd. (Nasdaq: SPI). From October 2017 to March 2019, Mr. Chan served as the CFO of Helo Corp. (OTC: HLOC). From September 2013 to November 2015, Mr. Chan served as Executive Vice President, Director and Acting CFO of Sino-Global Shipping America, Ltd. Mr.
Except our contribution to the MPF, we have not set aside or accrued any amount to provide pension, retirement, or other similar benefits to our directors and executive officers. We do not have any equity incentive plan in place as of the date of this annual report. 6.C.
For the fiscal year ended March 31, 2023, we paid an aggregate of US$75,000 as compensation to non-executive directors and issued 2,411 Ordinary Shares to each non-executive director. Except our contribution to the MPF, we have not set aside or accrued any amount to provide pension, retirement, or other similar benefits to our directors and executive officers.
Cai served as audit manager at Friedman, LLP. From December 2006 to November 2013, Ms. Cai served as audit manager at Patrizio & Zhao, LLC. Ms. Cai graduated from Jiangsu Radio & TV University with a major in Economic Management in December 2003.
From October 2017 to July 22, 2019, Ms. Cai has served as manager of Wealth Financial Services LLC. From December 2013 to September 2017, Ms. Cai served as audit manager at Friedman, LLP. From December 2006 to November 2013, Ms. Cai served as audit manager at Patrizio & Zhao, LLC. Ms.
Removed
Chan served as Executive Vice President, Director and Acting CFO of Sino-Global Shipping America, Ltd., a Nasdaq-listed logistics and shipping company with operations in China, Australia and Hong Kong. From February 2005 to August 2013, Mr.
Added
Cai has been serving as Chief Financial Officer of Nuance Biotech Co., Ltd. a biomedical research and development company. From November 2020 to December 2022, Ms. Cai has served as the Chief Financial Officer of Jowell Global Ltd., a Nasdaq-listed e-commerce platform. From August 2019 to June 2022, Ms.
Removed
Chen Tseng Yuan holds 10% of the equity interest in Zhong Yang Holdings (BVI) Limited. Jian Li, and Hong Chen each owns less than 5% of the equity interest in Zhong Yang Holdings (BVI) Limited.
Added
Junli Yang may be deemed the beneficial owner of all Ordinary Shares held by Zhong Yang Holdings (BVI) Limited. 6.F. Disclosure of a Registrant’s Action to Recover Erroneously Awarded Compensation Not applicable 100

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

4 edited+5 added−3 removed2 unchanged
Biggest changeThese amount payables represent the bank balances held on behalf of the related party that were received by us for the related parties’ structure note investments On August 11, 2022, WIN100 entered into a license agreement with Ms. Junli Yang, the Chairwoman of the Board of the Company, to document a non-exclusive, non-sublicensable, and non-transferable license granted by Ms. Yang.
Biggest changeOn August 11, 2022, WIN100 TECH entered into a license agreement with Ms. Junli Yang, the Chairwoman of the Board of the Company, to document a non-exclusive, non-sublicensable, and non-transferable license granted by Ms. Yang to use a software that supports algorithm trading, order analytics, risk control and technical monitoring which can be integrated with different vendors’ API.
Directors, Senior Management and Employees—6.B. Compensation—Employment Agreements and Indemnification Agreements.” Other Related Party Transactions Our leased premises are leased from Zhong Yang Holdings Limited (the Predecessor Parent Company), which is owned by the same group of shareholders as the Controlling Shareholder. Zhong Yang Holdings Limited has proper authorization from the titleholder to sublease the property.
Directors, Senior Management and Employees—6.B. Compensation—Employment Agreements and Indemnification Agreements.” Other Related Party Transactions Before September 2022, we leased premises were leased from Zhong Yang Holdings Limited (the Predecessor Parent Company), which is owned by the same group of shareholders as the Controlling Shareholder. Zhong Yang Holdings Limited has proper authorization from the titleholder to sublease the property.
In addition, during the fiscal year ended March 31, 2021 and 2020, we generated gross commission income in the amount of $19,959 and 1,808,799 for future brokerage services provided to Sunx Global Limited, 95% owned by the Predecessor Parent Company.
Junli Yang, the Chairwoman of the Board. In addition, during the fiscal year ended March 31, 2021, we generated gross commission income in the amount of $19,959 for future brokerage services provided to Sunx Global Limited, 95% owned by the Predecessor Parent Company.
During the fiscal years ended March 31, 2022, 2021 and 2020, we paid rental expenses to the Predecessor Parent Company in the amount of $54,510, $119,759 and $118,776, respectively.
During the fiscal years ended March 31, 2023, 2022 and 2021, we paid rental expenses to the Predecessor Parent Company in the amount of $nil, $54,510 and $119,759, respectively. During the year ended March 31, 2023, we generated interest income in the amount of $96,801 for margin financing services provided to Mr. Huaixi Yang, an immediate family member of Ms.
Removed
As of March 31, 2021, we had no balance with related parties. As of March 31, 2022, we had (i) an amount payable to Mr. Huaixi Yang, an immediate family member of Ms. Junli Yang, the Chairwoman of the Board, in the amount of $3,378, (ii) an amount payable to WSYQR Limited, an entity wholly owned by Mr.
Added
In consideration for such license, WIN100 Tech agreed to pay Ms. Yang $100 in license fee. The agreement was negotiated at arm’s length and was approved by the Board of Directors of the Company. For more details, see “Item 4. Information on the Company—4.B.
Removed
Huaixi Yang, in the amount of $65,398, and (iii) an amount payable to Sunx Global Limited, entity controlled by Mr. Huaixi Yang, in the amount of $30,648.
Added
Business Overview— Our Revenues Model and Core Services—License Agreement between Junli Yang and WIN100” On February 9, 2023, ZYIL(BVI) completed an acquisition of WIN100 WEALTH a company formed under the laws of the British Virgin Islands, at a purchase price of $10,000 in exchange for 100% of the equity interest in WIN100 WEALTH, pursuant to a Share Purchase Agreement dated February 9, 2023 by and among the Company, ZYIL(BVI), WIN100 WEALTH and the sole shareholder of WIN100 WEALTH.
Removed
For more details, see “Item 4. Information on the Company—4.B. Business Overview— Our Revenues Model and Core Services—License Agreement between Junli Yang and WIN100”
Added
The sole shareholder of WIN100 WEALTH is Junli Yang, the Chairwoman of the Board of Directors of the Company. The Agreement was negotiated at arm’s length and was approved by the Board of Directors of the Company.
Added
On April 12, 2023, ZYAL (BVI) completed an acquisition of TOP 500 SEC PTY LTD (“TOP 500”), a company formed under the laws of Australia that owns an Australian Financial Services License (AFSL: 328866), at a purchase price of $700,000 in exchange for 100% of the equity interest in TOP 500, pursuant to a Share Purchase Agreement dated August 31, 2022 by and among the Company, ZYAL (BVI), TOP 500 and the sole shareholder of TOP 500.
Added
The sole shareholder of TOP 500 is a company controlled by Junli Yang, the Chairwoman of the Board of Directors of the Company. The Agreement was negotiated at arm’s length and was approved by the Board of Directors of the Company. 7.C. Interests of Experts and Counsel Not Applicable.

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