Cellyan Biotechnology (HKPD) interim revenue and profit drop sharply in 2025
Cellyan Biotechnology Co., Ltd reports unaudited results for the six months ended September 30, 2025, showing weaker performance year over year. Revenue was $7,137,140, down from $11,091,189, as both supply chain services and procurement and distribution declined.
Net profit fell to $153,735 from $828,559, with basic and diluted earnings per share dropping to $0.014 from $0.083, despite operating expenses decreasing. Cash and cash equivalents declined to $190,912, and operating activities used $244,017 in cash compared with inflows a year earlier. Total assets were $9,633,830 and shareholders’ equity $5,143,431 as of September 30, 2025.
Positive
- None.
Negative
- Revenue and profit sharply lower: Six‑month revenue fell to $7.14M from $11.09M and net profit declined to $153,735 from $828,559, significantly reducing earnings per share to $0.014 from $0.083.
- Weaker cash generation and lower liquidity: Net cash from operating activities moved from an inflow of $753,119 to an outflow of $244,017, while cash and cash equivalents dropped to $190,912 as of September 30, 2025.
Insights
Interim results show sharp profit decline and weaker cash generation.
Cellyan Biotechnology generated revenue of $7.14M for the six months ended September 30, 2025, down from $11.09M. Both core lines, supply chain services and procurement and distribution, contracted, cutting gross profit to $930,764 from $1.91M.
Net profit dropped to $153,735 versus $828,559, while earnings per share fell to $0.014 from $0.083. Operating cash flow swung from an inflow of $753,119 to an outflow of $244,017, and cash and cash equivalents declined to $190,912 as of September 30, 2025.
Leverage remains notable, with bank loans totaling $1,690,031 and lease liabilities of $582,653. Revenue is concentrated, with five major customers accounting for a substantial portion of the $7,137,140 in sales, which ties performance closely to a small customer group.
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM
REPORT OF FOREIGN PRIVATE ISSUER
PURSUANT TO RULE 13a-16 OR 15d-16 OF THE
SECURITIES EXCHANGE ACT OF 1934
For the month of March 2026
Commission File Number
(Translation of registrant’s name into English)
Room B1, 5/F., Well Town Industrial Building,
13 Ko Fai Road, Yau Tong, Kowloon
Hong Kong
(Address of principal executive offices)
Indicate by check mark whether the registrant files or will file annual reports under cover of Form 20-F or Form 40-F:
Form 20-F ☒ Form 40-F ☐
INFORMATION CONTAINED IN THIS FORM 6-K REPORT
Interim Financial Statements
Cellyan Biotechnology Co., Ltd (f.k.a. Hong Kong Pharma Digital Technology Holdings Limited), a Cayman Islands exempted company with limited liability, is furnishing this Form 6-K to provide six-month interim financial statements.
1
EXHIBIT INDEX
| Exhibit No. | Description | |
| 99.1 | Unaudited Interim Consolidated Financial Statements as of September 30, 2025 and for the six months ended September 30, 2025 and 2024 | |
| 99.2 | Operating and Financial Review and Prospects in connection with the Unaudited Interim Consolidated Financial Statements as of September 30, 2025 and for the six months ended September 30, 2025 and 2024 | |
| 101.INS | Inline XBRL Instance Document | |
| 101.SCH | Inline XBRL Taxonomy Extension Schema Document | |
| 101.CAL | Inline XBRL Taxonomy Extension Calculation Linkbase Document | |
| 101.DEF | Inline XBRL Taxonomy Extension Definition Linkbase Document | |
| 101.LAB | Inline XBRL Taxonomy Extension Label Linkbase Document | |
| 101.PRE | Inline XBRL Taxonomy Extension Presentation Linkbase Document | |
| 104 | Cover Page Interactive Data File (embedded within the Inline XBRL document) |
2
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
| Date: March 18, 2026 | CELLYAN BIOTECHNOLOGY CO., LTD | |
| By: | /s/ Chenyu Liang | |
| Chenyu Liang | ||
| Director and Chief Executive Officer | ||
3
Exhibit 99.1
INDEX TO FINANCIAL STATEMENTS
| Page | ||
| Consolidated Financial Statements for the Six Months Ended September 30, 2025 and 2024 (unaudited) | ||
| Unaudited Condensed Consolidated Statements of Profit or Loss and Other Comprehensive Income for the Six Months Ended September 30, 2025 and 2024 | F-2 | |
| Unaudited Condensed Consolidated Statements of Financial Position as of September 30, 2025 and March 31, 2025 | F-3 | |
| Unaudited Condensed Consolidated Statements of Changes in Equity for the Six Months Ended September 30, 2025 and 2024 | F-4 | |
| Unaudited Condensed Consolidated Statements of Cash Flows for the Six Months Ended September 30, 2025 and 2024 | F-5 | |
| Notes to Unaudited Condensed Consolidated Financial Statements | F-6 - F-38 |
F-1
CELLYAN BIOTECHNOLOGY CO., LTD
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME
(Expressed in U.S. dollar, except for the number of shares)
| For the Six Months Ended September 30, |
||||||||||||
| Note | 2025 unaudited | 2024 unaudited | ||||||||||
| Revenues | 7 | $ | $ | |||||||||
| Cost of revenues | 8 | ( |
) | ( |
) | |||||||
| Gross profit | ||||||||||||
| Other income | 9 | |||||||||||
| Operating expenses: | ||||||||||||
| Selling, general and administrative expenses | 8 | ( |
) | ( |
) | |||||||
| Other gains, net | 10 | |||||||||||
| Total operating expenses | ( |
) | ( |
) | ||||||||
| Operating profit | ||||||||||||
| Financial income | 11 | |||||||||||
| Finance costs | 11 | ( |
) | ( |
) | |||||||
| Finance costs, net | ( |
) | ( |
) | ||||||||
| Profit before income taxes | ||||||||||||
| Income tax expense | 12 | ( |
) | ( |
) | |||||||
| Net profit for the period | 13 | |||||||||||
| Less: profit attributable to non-controlling interests | - |
- |
||||||||||
| Profit attributable to owners of the Company | ||||||||||||
| Other comprehensive income | ||||||||||||
| Foreign currency translation adjustments | ( |
) | ||||||||||
| Comprehensive income attributable to the Company’s shareholders | $ | $ | ||||||||||
| Earnings per share | ||||||||||||
| Basic and diluted * | 15 | $ | $ | |||||||||
| Weighted average number of shares outstanding | ||||||||||||
| Basic and diluted * | ||||||||||||
| * |
The accompanying notes are an integral part of these consolidated financial statements.
F-2
CELLYAN BIOTECHNOLOGY CO., LTD
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF FINANCIAL POSITION
(Expressed in U.S. dollar, except for the number of shares)
| September 30, 2025 | March 31, 2025 | |||||||||||
| Note | unaudited | audited | ||||||||||
| ASSETS | ||||||||||||
| NON-CURRENT ASSETS: | ||||||||||||
| Property and equipment, net | 16 | |||||||||||
| Intangible assets, net | 17 | |||||||||||
| Right of use assets, net | 25 | |||||||||||
| TOTAL NON-CURRENT ASSETS | ||||||||||||
| CURRENT ASSETS: | ||||||||||||
| Investment for funds at fair value through profit or loss | 21 | $ | $ | |||||||||
| Inventories | 18 | |||||||||||
| Trade receivables, net | 19 | |||||||||||
| Other receivables and prepayments | 19 | |||||||||||
| Amount due from related parties | 23 | |||||||||||
| Restricted cash | ||||||||||||
| Cash and cash equivalents | 20 | |||||||||||
| TOTAL CURRENT ASSETS | ||||||||||||
| TOTAL ASSETS | $ | $ | ||||||||||
| LIABILITIES AND SHAREHOLDERS’ EQUITY | ||||||||||||
| NON-CURRENT LIABILITIES: | ||||||||||||
| Lease liabilities non-current portion | 25 | |||||||||||
| Long term bank loan non-current portion | 24 | |||||||||||
| TOTAL NON-CURRENT LIABILITIES | ||||||||||||
| CURRENT LIABILITIES: | ||||||||||||
| Trade and other payables | 22 | $ | $ | |||||||||
| Tax payable | 12 | |||||||||||
| Contract liabilities | 7 | |||||||||||
| Due to related parties | 23 | |||||||||||
| Lease liabilities – current portion | 25 | |||||||||||
| Current portion of long-term bank loan | 24 | |||||||||||
| TOTAL CURRENT LIABILITIES | ||||||||||||
| TOTAL LIABILITIES | ||||||||||||
| COMMITMENTS AND CONTINGENCIES | — | — | ||||||||||
| EQUITY: | ||||||||||||
| Ordinary shares, | ||||||||||||
| Class A ordinary shares, | 26 | |||||||||||
| Class B Ordinary shares, nil shares issued and outstanding at September 30, 2025 and March 31, 2025, respectively * | - | - | ||||||||||
| Additional paid in capital | 26 | |||||||||||
| Retained earnings | 27 | |||||||||||
| Accumulated other comprehensive income | 27 | |||||||||||
| TOTAL SHAREHOLDERS’ EQUITY | ||||||||||||
| TOTAL LIABILITIES AND EQUITY | $ | $ | ||||||||||
| * |
The accompanying notes are an integral part of these consolidated financial statements.
F-3
CELLYAN BIOTECHNOLOGY CO., LTD
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY
(Expressed in U.S. dollar, except for the number of shares)
| Attributable to CELLYAN BIOTECHNOLOGY CO., LTD’s shareholders | Accumulated | |||||||||||||||||||||||||||||||||||
| Ordinary shares | Additional | Other | ||||||||||||||||||||||||||||||||||
| Class A | Class B | Paid-in | Subscription | Retained | Comprehensive | Total | ||||||||||||||||||||||||||||||
| Shares * | Amount | Shares * | Amount | Capital | receivable | earnings | Income (Loss) | equity | ||||||||||||||||||||||||||||
| Balance at March 31, 2024 | $ | ( | ) | ( | ) | |||||||||||||||||||||||||||||||
| Class B capital injection | — | — | — | — | — | — | — | |||||||||||||||||||||||||||||
| Net income (loss) for the period | — | — | — | — | — | — | — | |||||||||||||||||||||||||||||
| Foreign currency translation gain | — | — | — | — | — | — | — | |||||||||||||||||||||||||||||
| Balance at September 30, 2024 | $ | ( | ) | |||||||||||||||||||||||||||||||||
| Balance at March 31, 2025 | $ | — | — | — | ||||||||||||||||||||||||||||||||
| Class B capital injection | — | — | — | — | — | — | — | — | — | |||||||||||||||||||||||||||
| Net income (loss) for the period | — | — | — | — | — | — | — | |||||||||||||||||||||||||||||
| Foreign currency translation gain | — | — | — | — | — | — | — | ( | ) | ( | ) | |||||||||||||||||||||||||
| Balance at September 30, 2025 | $ | — | — | — | ||||||||||||||||||||||||||||||||
| * |
The accompanying notes are an integral part of these consolidated financial statements.
F-4
CELLYAN BIOTECHNOLOGY CO., LTD
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Expressed in U.S. dollar, except for the number of shares)
For the Six Months Ended September 30, | ||||||||
2025 unaudited | 2024 unaudited | |||||||
| Cash flows from operating activities: | ||||||||
| Net profit for the period | $ | $ | ||||||
| Adjustments to reconcile net income to net cash (used in) provided by operating activities: | ||||||||
| Depreciation and amortization | ||||||||
| Fair value gain on Investment for funds at fair value through profit or loss | ( | ) | - | |||||
| Amortization of ROU assets | ||||||||
| Changes in operating assets and liabilities: | ||||||||
| Trade receivables | ( | ) | ( | ) | ||||
| Inventories | ( | ) | ||||||
| Other receivables and prepayments | ( | ) | ( | ) | ||||
| Trade and other payables | ( | ) | ||||||
| Contract liabilities | ( | ) | ||||||
| Taxes payable | ||||||||
| Amount due from/to related parties, net | ( | ) | ||||||
| Net cash (used in)/provided by operating activities | ( | ) | ||||||
| Cash flows from investing activities: | ||||||||
| Additions to property, plant and equipment | ( | ) | ( | ) | ||||
| Additions to intangible assets | ( | ) | ( | ) | ||||
| Net cash used in investing activities | ( | ) | ( | ) | ||||
| Cash flows from financing activities: | ||||||||
| Repayment of bank loans | ( | ) | ( | ) | ||||
| Capital contribution from shareholders | - | |||||||
| Deferred IPO costs paid | - | ( | ) | |||||
| Repayment of loan to related parties | ( | ) | ( | ) | ||||
| Loan from related parties | ||||||||
| Decrease of lease liabilities, net | ( | ) | ( | ) | ||||
| Net cash used in financing activities | ( | ) | ( | ) | ||||
| Effect of exchange rates changes on cash | ( | ) | ||||||
| Net increase in cash | ( | ) | ( | ) | ||||
| Cash and restricted cash, beginning of the year | ||||||||
| Cash and restricted cash, end of the year | $ | $ | ||||||
| September 30, | September 30, | |||||||
| 2025 | 2024 | |||||||
| Supplemental cash flow disclosures: | ||||||||
| Cash paid for interest (exclusive of interest for lease liability) | $ | $ | ||||||
| Non cash investing/financing activities: | ||||||||
| Right-of-use assets obtained in exchange for operating new lease liabilities | $ | $ | ||||||
| Right-of-use assets and operating lease liabilities modification | $ | - | $ | ( | ) | |||
| Shares issued advanced amortized for deferred IPO costs | $ | - | $ | |||||
The accompanying notes are an integral part of these consolidated financial statements.
F-5
CELLYAN BIOTECHNOLOGY CO., LTD
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
NOTE 1 — ORGANIZATION AND BUSINESS DESCRIPTION
Cellyan Biotechnology Co., Ltd (f.k.a. Hong Kong Pharma Digital Technology Holdings Limited) (“Hong Kong Pharma” or “the Company”) is an exempted limited liability company formed under the laws of the Cayman Islands on August 17, 2023. On December 31, 2025, the English name of the Company was changed to “Cellyan Biotechnology Co., Ltd”. The Company is an investment holding company and its subsidiaries (together, the “Group”) are principally engaged in the OTC pharmaceutical business through its wholly owned subsidiaries, Joint Cross Border Logistics Company Limited (“JCB”) and V-Alliance Technology Supplies Limited (“VA”), each a limited liability corporation incorporated in Hong Kong and collectively referred to as HK Subsidiaries. There are two main categories of business offering: (i) OTC pharmaceutical cross-border e-commerce supply chain services, primarily conducted through our Hong Kong subsidiary, JCB, which we refer to as the “Supply Chain Services” division and (ii) OTC pharmaceutical cross-border procurement and distribution, primarily conducted through our Hong Kong subsidiary, VA, which we refer to as the “Procurement and Distribution” division.
As of September 30, 2025, the Company’s subsidiaries and consolidated affiliated entities were as follows:
| Subsidiaries | Date of Incorporation | Jurisdiction of Formation | Percentage of direct/indirect Economic Ownership | Principal Activities | ||||||
As described below, the Company, through a series of transactions which is accounted for as a reorganization of entities under common control (the “Reorganization”), became the ultimate parent of its subsidiaries. Mr. Lap Sun Wong, the CEO and the Chairman of the Board of Directors of the Company, is the ultimate controlling shareholder of the Company.
Reorganization
A reorganization of the legal structure was completed on December 7, 2023. The reorganization involved:
| (i) | The transfer of all the shareholder equity interest in JCB to the Company on December 7, 2023; |
| (ii) | The transfer of all the shareholders’ equity interest in VA to the Company on December 7, 2023; |
Before and after the Reorganization, the Company, together with its subsidiaries, is effectively controlled by the same shareholder, and therefore the reorganization is considered as a recapitalization of entities under common control in accordance with Accounting Standards Codification (“ASC”) 805-50-25. IFRS does not have a standard nor cover combination under common control, and the Company chooses to adapt from US GAAP ASC is not contradictory to compliance with IFRS. Therefore, the consolidation of the Company and its subsidiaries have been accounted for at historical cost and prepared on the basis as if the aforementioned transactions had become effective as of the beginning of the first period presented in the accompanying consolidated financial statements in accordance with ASC 805-50-45-5. Therefore, all subsidiaries are consolidated under common control basis. All references to the number of ordinary shares and per share data in the accompanying consolidated financial statements have been retrospectively restated to reflect the reorganization. However, the shares issued to new investors on December 1, 2023 were not part of the reorganization and have been accounted for prospectively.
F-6
NOTE 2 — ADOPTION OF NEW AND REVISED STANDARDS
Adoption of new and revised Standards — For the purpose of preparing and presenting the consolidated financial statements for the six months ended September 30, 2024 and 2025, the Group has consistently applied the accounting policies which conform with International Financial Reporting Standards (“IFRS Accounting Standards”), which are effective for the accounting periods beginning on or after April 1, 2024, throughout the year ended March 31, 2025 and six months ended September 30, 2025.
Amendments to IAS 1 and IFRS Practice Statement 2: Disclosure of Accounting Policies
The Group has adopted the amendments to IAS 1 Presentation of Financial Statements for the first time in the financial year ended March 31, 2023. The amendments change the requirements in IAS 1 with regard to disclosure of accounting policies. Accounting policy information is material if, when considered together with other information included in an entity’s financial statements, it can reasonably be expected to influence decisions that the primary users of general purpose financial statements make on the basis of those financial statements.
The supporting paragraphs in IAS 1 are also amended to clarify that accounting policy information that relates to immaterial transactions, other events or conditions is immaterial and need not be disclosed. Accounting policy information may be material because of the nature of the related transactions, other events or conditions, even if the amounts are immaterial. However, not all accounting policy information relating to material transactions, other events or conditions is itself material.
The Group has applied materiality guidance in IFRS Practice Statement 2 in identifying its material accounting policies for disclosures in the related notes. The previous term ‘significant accounting policies’ used throughout the financial statements has been replaced with ‘material accounting policies information’.
New and revised IFRS Accounting Standards in issue but not yet effective
At September 30, 2025, the Group has not applied the following new and revised IFRS Accounting Standards that have been issued but are not yet effective:
| ● | Lack of Exchangeability – Amendments to IAS 21 (1) |
| ● | Sales or Contribution of Assets between an Investor and its Associate or Joint Venture-Amendments to IFRS 10 and IAS 28 (2) | |
| ● | Disclosures in Uncertainties in the Financial Statements (1) |
| (1) | Effective for annual periods beginning on or after January 1, 2025, with early application permitted. |
| (2) | Effective date is deferred indefinitely. |
The Group does not expect that the adoption of the Standards listed above will have a material impact on the consolidated financial statements of the Group in future periods.
F-7
NOTE 3 — material ACCOUNTING POLICIES
The principal accounting policies adopted in the preparation of the financial statements are set out below. The policies have been consistently applied to all the years presented, unless otherwise stated.
Basis of preparation
The consolidated financial statements have been prepared in accordance with IFRS Accounting Standards issued by the International Accounting Standards Board.
The consolidated financial statements have been prepared on historical cost basis, except for certain financial instruments that are measured at fair values at the end of each reporting period, as explained in the accounting policies below. Historical cost is generally based on the fair value of the consideration given in exchange for goods and services.
Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date, regardless of whether that price is directly observable or estimated using another valuation technique. In estimating the fair value of an asset or a liability, the Group takes into account the characteristics of the asset or liability if market participants would take those characteristics into account when pricing the asset or liability at the measurement date. Fair value for measurement and/or disclosure purposes in these consolidated financial statements is determined on such a basis, except for share-based payment transactions that are within the scope of IFRS 2 Share-based Payment, leasing transactions that are within the scope of IFRS 16 Leases, and measurements that have some similarities to fair value but are not fair value, such as net realizable value in IAS 2 Inventories or value in use in IAS 36 Impairment of Assets.
In addition, for financial reporting purposes, fair value measurements are categorized into Level 1, 2 or 3 based on the degree to which the inputs to the fair value measurements are observable and the significance of the inputs to the fair value measurement in its entirety, which are described as follows:
| ● | Level 1 inputs are quoted prices (unadjusted) in active markets for identical assets or liabilities that the Group can access at the measurement date; |
| ● | Level 2 inputs are inputs, other than quoted prices included within Level 1, that are observable for the asset or liability, either directly or indirectly; and |
| ● | Level 3 inputs are unobservable inputs for the asset or liability. |
Basis of consolidation
The accompanying condensed consolidated financial statements were prepared in accordance with IAS 34, Interim Financial Reporting and pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”) for interim financial information. Accordingly, they do not include all of the information and footnotes required by IFRS for complete financial statements. In the opinion of management, all adjustments considered necessary for a fair presentation were included in the Company’s unaudited condensed consolidated financial statements. The unaudited condensed consolidated financial statements should be read in conjunction with the Company’s consolidated financial statements and the notes thereto for the years ended March 31, 2025 and 2024 included in the Company’s Form 20-F. The accompanying unaudited condensed consolidated financial statements include the financial statements of the Company and its subsidiaries. All inter-company balances and transactions are eliminated in consolidation. Operating results for the six months ended September 30, 2025 and 2024 are not necessarily indicative of the results that may be expected for the full year.
The acquisition method of accounting is used to account for business combinations by the Group. No subsidiaries were acquired during the six months ended September 30, 2025 and 2024.
F-8
Foreign currencies
Functional and presentation currency
The functional currencies of the Company are the local currency of the country in which the subsidiaries operate. The Company’s consolidated financial statements are reported using U.S. Dollars. The results of operations and the consolidated statements of cash flows denominated in foreign currencies are translated at the average rates of exchange during the reporting period. Assets and liabilities denominated in foreign currencies at the balance sheet date are translated at the applicable rates of exchange in effect on that date. The equity denominated in the functional currencies is translated at the historical rates of exchange at the time of capital contributions. Because cash flows are translated based on the average translation rates, amounts related to assets and liabilities reported on the consolidated statements of cash flows will not necessarily agree with changes in the corresponding balances on the consolidated statements of financial position. Translation adjustments arising from the use of different exchange rates from period to period are included as a separate component in accumulated other comprehensive income included in consolidated statements of changes in equity. Gains and losses from foreign currency transactions are included in the consolidated statement of income and comprehensive income (loss).
Since the Company operates primarily in Hong Kong, the Company’s functional currency is the Hong Kong dollar (“HK$”). The Company’s consolidated financial statements have been translated into the reporting currency of U.S. Dollars (“US$”).
The following table outlines the currency exchange rates that were used in creating the consolidated financial statements in this report:
| September 30, 2025 |
September 30, 2024 |
|||||||
| HK$ Balance sheet items, except for equity accounts | US$1=HK$ |
US$1=HK$ |
||||||
| HK$ Items in the statements of income and cash flows | US$1=HK$ |
US$1=HK$ |
Segment reporting
Operating segments, and the amounts of each segment item reported in the financial statements, are identified from the financial information provided regularly to the Group’s most senior executive management for the purposes of allocating resources to, and assessing the performance of, the Group’s various lines of business and geographical locations.
Individually material operating segments are not aggregated for financial reporting purposes unless the segments have similar economic characteristics and are similar in respect of the nature of products and services, the nature of production processes, the type or class of customers, the methods used to distribute the products or provide the services, and the nature of the regulatory environment. Operating segments which are not individually material may be aggregated if they share a majority of these criteria.
The Group did not allocate or manage the resources
of different revenue streams by companies or business units. Therefore, the Group’s management reviews the consolidated financial
results when making decisions about allocating resources and assessing the performance of the Company as a whole and hence, the Group
has only
Revenue recognition
Revenue from contracts with customers
Revenue from contracts with customers is recognized when control of goods or services is transferred to the customers at an amount that reflects the consideration to which the Company expects to be entitled in exchange for those goods or services.
When the consideration in a contract includes a variable amount, the amount of consideration is estimated to which the Company will be entitled in exchange for transferring the goods or services to the customer. The variable consideration is estimated at contract inception and constrained until it is highly probable that a significant revenue reversal in the amount of cumulative revenue recognized will not occur when the associated uncertainty with the variable consideration is subsequently resolved.
F-9
When the contract contains a financing component which provides the customer a significant benefit of financing the transfer of goods or services to the customer for more than one year, revenue is measured at the present value of the amount receivable, discounted using the discount rate that would be reflected in a separate financing transaction between the Company and the customer at contract inception. When the contract contains a financing component which provides the Company a significant financial benefit for more than one year, revenue recognized under the contract includes the interest expense accreted on the contract liability under the effective interest method. For a contract where the period between the payment by the customer and the transfer of the promised goods or services is one year or less, the transaction price is not adjusted for the effects of a significant financing component, using the practical expedient in IFRS 15. Currently, the Company’s contracts with its customers do not include financial benefit for more than one year.
Nature and timing of satisfaction of performance obligations for each of the revenue streams are as follows:
Revenue from resale of OTC pharmaceutical products (procurement and distribution)
The Company sells OTC pharmaceutical products to various wholesalers. In accordance with the contracts signed between the Company and customers, the Company promises to deliver a batch of specific pharmaceutical products, which is identified as a performance obligation, and only one obligation can be identified. For all the Company’s sales contracts, the sales amount is fixed. No significant variable consideration is involved. Performance obligation is satisfied at the point in time when control of the OTC pharmaceutical products is transferred to the customers, generally on delivery and acceptance of the goods, because the Company does not have a right to payment for the performance completed before the customer acceptance and the customer cannot simultaneously receive and consume the benefit from the products provided by the Company. The Company does not have any further performance obligations after the customer acceptance. The Company presents revenues from such transactions on a gross basis in the consolidated statement of income and comprehensive income (loss), as the Company acts as a principal to take inventory risks of these goods.
Revenue from consignment sales of OTC pharmaceutical products (consignment sales)
The Company sells OTC pharmaceutical products to customers through certain sales agents. In accordance with the contracts signed between the Company and the sales agent, the Company promises to deliver a batch of specific pharmaceutical products, which is identified as a performance obligation. For all the Company’s consignment sales contracts, the sales price is fixed, and no significant variable consideration is involved. Performance obligation is satisfied at the point in time when control of the OTC pharmaceutical products are transferred to the customers. Although we contracted directly with the sales agent, the revenue is recognized upon the products are sold to end customers. The products kept by the sales agent before sold out to the end customers are recorded as consignment inventories. The Company does not have any further performance obligations after products are accepted and sold to end customers. The Company presents revenues from such transactions on a gross basis in the consolidated statement of income and comprehensive income (loss), as the Company acts as a principal to take inventory risks of these goods.
Revenue from providing varied logistics services (supply chain services)
The Company provided types of logistics services in connection to goods transported from different countries to be delivered to customers located in Hong Kong or mainland China. These services include international transportation and customs clearance service, storage service, packing and labeling services, Customs clearance service, mainland China delivery service, etc. Some contracts (hereby is called “distinct services”) are signed to include varied performance obligations independent from each other with distinct price for each type of service, while some contracts (hereby is called “packaged services”) are signed to include types of performance obligations with sequence to be delivered and the customer could receive and accept the packaged services when the last obligation is completed. As such, the Company considered the packaged services as one distinct performance obligation. Performance obligation is satisfied in time when the customers have received and accepted the service, which represents the distinct obligation service is completed. Customers confirm the services accepted and the corresponding amount with the Company on a monthly basis. The Company presents revenues from such transactions on a gross basis in the consolidated statement of income and comprehensive income (loss), as the Company acts as a principal to provide a type of logistics service or a package of logistics services and take a full obligation to provide such services even if the suppliers are not able to deliver service.
Some of the contracts include penalty clause to adjust down the price to the Company if the Company are not able to meet certain logistics requirements. The Company estimates the penalty amount as a liability at each period end and adjusts the revenue accordingly. When the amount is confirmed by the customer, the liability will be revised accordingly. As of September 30, 2025 and March 31, 2025, the liability is zero.
F-10
Other revenue
Other revenue represents the revenue from sales of packing materials and sample products. Performance obligation is satisfied at the point in time when control of the goods are transferred to the customers, generally on delivery and acceptance of the goods. The Company presents revenues from such transactions on a gross basis in the consolidated statement of income and comprehensive income (loss), as the Company acts as a principal to take inventory risks of these goods.
Other income
Other income includes government grants and penalty
income. Subsidy income is recognized upon receiving the government grants. During the six months ended September 30, 2025, the Company
recorded $
Borrowing costs
Borrowing costs directly attributable to the acquisition, construction or production of qualifying assets, which are assets that necessarily take a substantial period of time to get ready for their intended use or sale, are added to the cost of those assets until such time as the assets are substantially ready for their intended use or sale.
All other borrowing costs are recognized in profit or loss in the period in which they are incurred.
Retirement benefit costs
Pursuant to the relevant regulations of the Hong Kong government, the Group’s subsidiaries located in the Hong Kong participate in a Mandatory Provident Fund, which is a government retirement benefits scheme (the “Scheme”), whereby they contribute a prescribed percentage of the basic salaries of their employees to the Scheme to fund their retirement benefits. Once the Scheme has been funded via contributions by the Group’s participating subsidiaries, Hong Kong government takes responsibility for the retirement benefits obligations of all existing and future retired employees of those subsidiaries located in the Hong Kong; accordingly, the only obligation of the Group with respect to the Scheme is to pay the on-going required contributions as long as the employees maintain employment with the Group. There are no provisions under the Scheme whereby forfeited contributions may be used to reduce future contributions. These plans are considered defined contribution plans. The Group has no legal or constructive obligations to pay further contributions after its payment of the fixed contributions into the pension schemes. Contributions to pension schemes are recognized as an expense in the period in which the related service is performed.
Taxation
The tax expense for the period comprises current and deferred tax. Tax is recognized in the income statement, except to the extent that it relates to items recognized in other comprehensive income or directly in equity. In this case the tax is also recognized in other comprehensive income or directly in equity, respectively.
The current income tax charge is calculated on the basis of the tax laws enacted or substantively enacted at the balance sheet date in the countries where the Group operates and generates taxable income. Management periodically evaluates positions taken in tax returns with respect to situations in which applicable tax regulation is subject to interpretation and establishes provisions where appropriate on the basis of amounts expected to be paid to the tax authorities.
F-11
Deferred tax is recognized as temporary differences between the carrying amounts of assets and liabilities in the consolidated financial statements and the corresponding tax bases used in the computation of taxable profit. Deferred tax liabilities are generally recognized for all taxable temporary differences. Deferred tax assets are generally recognized for all deductible temporary differences to the extent that it is probable that taxable profits will be available against which those deductible temporary differences can be utilized. Such deferred tax assets and liabilities are not recognized if the temporary difference arises from goodwill or from the initial recognition (other than in a business combination) of other assets and liabilities in a transaction that affects neither the taxable profit nor the accounting profit.
Deferred tax liabilities are recognized for taxable temporary differences associated with investments in subsidiaries, except where the Group is able to control the reversal of the temporary difference and it is probable that the temporary difference will not reverse in the foreseeable future. Deferred tax assets arising from deductible temporary differences associated with such investments are only recognized to the extent that it is probable that there will be sufficient taxable profits against which to utilize the benefits of the temporary differences and they are expected to reverse in the foreseeable future.
The carrying amount of deferred tax assets is reviewed at the end of each reporting period and reduced to the extent that it is no longer probable that sufficient taxable profits will be available to allow all or part of the assets to be recovered.
Deferred tax assets and liabilities are measured at the tax rates that are expected to apply in the period in which the liability is settled or the asset realized, based on tax rates (and tax laws) that have been enacted or substantively enacted by the end of the reporting period. The measurement of deferred tax liabilities and assets reflects the tax consequences that would follow from the manner in which the Group expects, at the end of the reporting period, to recover or settle the carrying amount of its assets and liabilities.
Deferred income tax assets and liabilities are offset when there is a legally enforceable right to offset current tax assets against current tax liabilities and when the deferred income tax assets and liabilities relate to income taxes levied by the same taxation authority on either the taxable entity or different taxable entities where there is an intention to settle the balances on a net basis.
Current and deferred tax are recognized in profit or loss, except when they relate to items that are recognized in other comprehensive income or directly in equity, in which case, the current and deferred tax are also recognized in other comprehensive income or directly in equity respectively. Where current tax or deferred tax arises from the initial accounting for a business combination, the tax effect is included in the accounting for the business combination.
Leasing
IFRS 16 Leases requires lessees to recognize assets and liabilities for most leases based on a ‘right-of-use model’ which reflects that, at the commencement date, a lessee has a financial obligation to make lease payments to the lessor for its right to use the underlying asset during the lease term. The lessor conveys that right to use the underlying asset at lease commencement, which is the time when it makes the underlying asset available for use by the lessee.
IFRS 16 defines a lease term as the noncancellable period for which the lessee has the right to use an underlying asset including optional periods when an entity is reasonably certain to exercise an option to extend (or not to terminate) a lease.
Under IFRS 16 lessees may also elect not to recognize assets and liabilities for leases with a lease term of 12 months or less. In such cases a lessee recognizes the lease payments in profit or loss on a straight-line basis over the lease term. The exemption is required to be applied by class of underlying assets. Lessees can also make an election for leases for which the underlying asset is of low value. This election can be made on a lease-by-lease basis.
F-12
Under a lease longer than 1 year, the lessees are required to recognize right-of-use asset (“ROU assets”) and lease liabilities. ROU assets represent the Company’s right to use an underlying asset for the lease term and are recognized as the amount of the lease liabilities, adjusted for any prepaid or accrued lease payments, net of lease incentives received, unamortized initial direct costs, or impairment charges relating to the right-of-use-asset. Lease liabilities represent the Company’s obligation to make lease payments arising from the lease and are recognized at the present value of the future lease payments at the lease commencement date. The Group determines its incremental borrowing rate by obtaining interest rates from various external financing sources to reflect the terms of the lease and type of the asset leased. The Company’s lease terms include options to renew or terminate the lease when it is reasonably certain that it will exercise the option.
Any lease with a term of 12 months or less is considered short-term. As permitted by IFRS 16, short-term leases are excluded from the ROU asset and lease liabilities accounts on the consolidated statements of financial position. Consistent with all other operating leases, short-term lease expenses are recorded on a straight-line basis over the lease term.
Leasehold improvements
Leasehold improvements, principally comprising costs of office buildings and warehouse renovation, are held for administrative and logistics processing purposes. Leasehold improvements are initially measured at cost and amortized systematically over its useful life.
Property, plant and equipment
Property, plant and equipment (“PPE”) are stated at cost less subsequent accumulated depreciation and accumulated impairment losses.
Depreciation is provided to write off the cost of items of property, plant and equipment other than construction in progress over their estimated useful lives and after taking into account of their estimated residual value, using the straight-line method.
An item of property, plant and equipment is derecognized upon disposal or when no future economic benefits are expected to arise from the continued use of the asset. Any gain or loss arising from de-recognition of the asset (calculated as the difference between the net disposal proceeds and the carrying amount of the item) is included in profit or loss in the period in which the item is de-recognized.
Intangible assets
Intangible assets, principally comprising software
purchased. Separately acquired software is shown at historical cost. They have a finite useful life and are subsequently carried at cost
less accumulated amortization and impairment losses. The software is amortized over
Inventories
Inventories, comprising of packing materials and merchandise inventories, are stated at the lower of cost and net realizable value. Costs of inventories are determined using the weighted average method for each type of inventory initially recorded at purchase cost. Net realizable value represents the estimated selling price for inventories less all estimated costs of completion and costs necessary to make the sale.
Deferred IPO costs
Deferred IPO costs represent costs associated with the Company’s shares offering, which will be netted against the gross proceeds from the Company’s shares offering.
Trade receivables
Timing of revenue recognition may differ from the timing of invoicing to customers. Trade receivables represent amounts invoiced and revenues recognized prior to invoicing when the Company has satisfied the Company’s performance obligation and has the unconditional rights to payment.
Cash and cash equivalents
Cash and cash equivalents include cash on hand and deposits held at call with banks.
F-13
Restricted cash
Restricted cash represents the cash deposited in the escrow account managed by online platforms (sales agents). The cash in the escrow account is used to be compensated to ending customers who bought the goods through the online platforms, in case certain ending customers ask for return or other quality claims.
Share-based payments
Shares granted to employees
Equity-settled share-based payments to employees and others providing similar services are measured at the fair value of the equity instruments at the grant date.
The fair value of the equity-settled share-based payments determined at the grant date without taking into consideration all non-market vesting conditions is expensed on a straight-line basis over the vesting period, based on the Group’s estimate of equity instruments that will eventually vest, with a corresponding increase in equity (shares held under share award scheme). At the end of each reporting period, the Group revises its estimate of the number of equity instruments expected to vest based on assessment of all relevant non-market vesting conditions. The impact of the revision of the original estimates, if any, is recognized in profit or loss such that the cumulative expense reflects the revised estimate, with a corresponding adjustment to the share-based payments reserve. For shares that vest immediately at the date of grant, the fair value of the shares granted is expensed immediately to profit or loss.
Shares granted to non-employees
Equity-settled share-based payment transactions with parties other than employees are measured at the fair value of the goods or services received, except where that fair value cannot be estimated reliably, in which case they are measured at the fair value of the equity instruments granted, measured at the date the entity obtains the goods or the counterparty renders the service. The fair value of the goods or services received are recognized as expenses (unless the goods or services qualify for recognition as assets).
When shares granted are vested, the amount previously recognized in share-based payment reserve will be transferred to share premium.
Financial instruments — investments and other financial assets
Initial recognition and measurement
Financial assets are classified, at initial recognition, as subsequently measured at amortized cost, fair value through other comprehensive income, and fair value through profit or loss.
The classification of financial assets at initial recognition depends on the financial asset’s contractual cash flow characteristics and the Group’s business model for managing them. With the exception of trade receivables that do not contain a significant financing component or for which the Group has applied the practical expedient of not adjusting the effect of a significant financing component, the Group initially measures a financial asset at its fair value, plus in the case of a financial asset not at fair value through profit or loss, transaction costs. Trade receivables that do not contain a significant financing component or for which the Group has applied the practical expedient are measured at the transaction price determined under IFRS 15 in accordance with the policies set out for “Revenue recognition”.
In order for a financial asset to be classified and measured at amortized cost or fair value through other comprehensive income, it needs to give rise to cash flows that are solely payments of principal and interest (“SPPI”) on the principal amount outstanding.
The Group’s business model for managing financial assets refers to how it manages its financial assets in order to generate cash flows. The business model determines whether cash flows will result from collecting contractual cash flows, selling the financial assets, or both.
F-14
All regular way purchases and sales of financial assets are recognized on the trade date, that is, the date that the Group commits to purchase or sell the asset. Regular way purchases or sales are purchases or sales of financial assets that require delivery of assets within the period generally established by regulation or convention in the marketplace.
Subsequent measurement
The subsequent measurement of financial assets depends on their classification as follows:
Financial assets at amortized cost (debt instruments)
The Group measures financial assets at amortized cost if both of the following conditions are met:
| ● | The financial asset is held within a business model with the objective to hold financial assets in order to collect contractual cash flows. |
| ● | The contractual terms of the financial asset give rise on specified dates to cash flows that are solely payments of principal and interest on the principal amount outstanding. |
Financial assets at amortized cost are subsequently measured using the effective interest method and are subject to impairment. Gains and losses are recognized in the income statement when the asset is derecognized, modified or impaired.
Financial assets at fair value through other comprehensive income (debt instruments)
The Group measures debt instruments at fair value through other comprehensive income if both of the following conditions are met:
| ● | The financial asset is held within a business model with the objective of both holding to collect contractual cash flows and selling. |
| ● | The contractual terms of the financial asset give rise on specified dates to cash flows that are solely payments of principal and interest on the principal amount outstanding. |
For debt instruments at fair value through other comprehensive income, interest income, foreign exchange revaluation and impairment losses or reversals are recognized in the income statement and computed in the same manner as for financial assets measured at amortized cost. The remaining fair value changes are recognized in other comprehensive income. Upon derecognition, the cumulative fair value change recognized in other comprehensive income is recycled to the income statement.
F-15
Financial assets at fair value through other comprehensive income (equity investments)
Upon initial recognition, the Group can elect to classify irrevocably its equity investments as equity investments designated at fair value through other comprehensive income when they meet the definition of equity under HKAS 32 Financial Instruments: Presentation and are not held for trading. The classification is determined on an instrument-by-instrument basis.
Gains and losses on these financial assets are never recycled to the income statement. Dividends are recognized as other income in the income statement when the right of payment has been established, it is probable that the economic benefits associated with the dividend will flow to the Group and the amount of the dividend can be measured reliably, except when the Group benefits from such proceeds as a recovery of part of the cost of the financial asset, in which case, such gains are recorded in other comprehensive income. Equity investments designated at fair value through other comprehensive income are not subject to impairment assessment.
Financial assets at fair value through profit or loss
Financial assets at fair value through profit or loss include financial assets held for trading, financial assets designated upon initial recognition at fair value through profit or loss, or financial assets mandatorily required to be measured at fair value. Financial assets are classified as held for trading if they are acquired for the purpose of selling or repurchasing in the near term. Derivatives, including separated embedded derivatives, are also classified as held for trading unless they are designated as effective hedging instruments. Financial assets with cash flows that are not sole payments of principal and interest are classified and measured at fair value through profit or loss, irrespective of the business model. Notwithstanding the criteria for debt instruments to be classified at amortized cost or at fair value through other comprehensive income, as described above, debt instruments may be designated at fair value through profit or loss on initial recognition if doing so eliminates, or significantly reduces, an accounting mismatch.
Financial assets at fair value through profit or loss are carried in the statement of financial position at fair value with net changes in fair value recognized in the income statement. This category includes derivative financial instruments and structured bank deposits.
A derivative embedded in a hybrid contract, with a financial liability or non-financial host, is separated from the host and accounted for as a separate derivative if the economic characteristics and risks are not closely related to the host; a separate instrument with the same terms as the embedded derivative would meet the definition of a derivative; and the hybrid contract is not measured at fair value through profit or loss. Embedded derivatives are measured at fair value with changes in fair value recognized in the income statement. Reassessment only occurs if there is either a change in the terms of the contract that significantly modifies the cash flows that would otherwise be required or a reclassification of a financial asset out of the fair value through profit or loss category.
A derivative embedded within a hybrid contract containing a financial asset host is not accounted for separately. The financial asset host together with the embedded derivative is required to be classified in its entirety as a financial asset at fair value through profit or loss.
Financial instruments — impairment of financial assets
The Group recognizes an allowance for ECLs for all debt instruments not held at fair value through profit or loss. ECLs are based on the difference between the contractual cash flows due in accordance with the contract and all the cash flows that the Group expects to receive, discounted at an approximation of the original effective interest rate. The expected cash flows will include cash flows from the sale of collateral held or other credit enhancements that are integral to the contractual terms.
General approach
ECLs are recognized in two stages. For credit exposures for which there has not been a significant increase in credit risk since initial recognition, ECLs are provided for credit losses that result from default events that are possible within the next 12-months (a 12-month ECL). For those credit exposures for which there has been a significant increase in credit risk since initial recognition, a loss allowance is required for credit losses expected over the remaining life of the exposure, irrespective of the timing of the default (a lifetime ECL).
At each reporting date, the Group assesses whether the credit risk on a financial instrument has increased significantly since initial recognition. When making the assessment, the Group compares the risk of a default occurring on the financial instrument as at the reporting date with the risk of a default occurring on the financial instrument as at the date of initial recognition and considers reasonable and supportable information that is available without undue cost or effort, including historical and forward-looking information.
The Group considers a financial asset in default when contractual payments are 120 days past due. However, in certain cases, the Group may also consider a financial asset to be in default when internal or external information indicates that the Group is unlikely to receive the outstanding contractual amounts in full before taking into account any credit enhancements held by the Group. A financial asset is written off when there is no reasonable expectation of recovering the contractual cash flows.
F-16
Debt instruments at fair value through other comprehensive income and financial assets at amortized cost are subject to impairment under the general approach and they are classified within the following stages for measurement of ECLs except for trade receivables which apply the simplified approach as detailed below.
Stage 1 — Financial instruments for which credit risk has not increased significantly since initial recognition and for which the loss allowance is measured at an amount equal to 12-month ECLs
Stage 2 — Financial instruments for which credit risk has increased significantly since initial recognition but that are not credit-impaired financial assets and for which the loss allowance is measured at an amount equal to lifetime ECLs
Stage 3 — Financial assets that are credit-impaired at the reporting date (but that are not purchased or originated credit-impaired) and for which the loss allowance is measured at an amount equal to lifetime ECLs
Simplified approach
For trade receivables that do not contain a significant financing component or when the Group applies the practical expedient of not adjusting the effect of a significant financing component, the Group applies the simplified approach in calculating ECLs. Under the simplified approach, the Group does not track changes in credit risk, but instead recognizes a loss allowance based on lifetime ECLs at each reporting date. The Group has established a provision matrix that is based on its historical credit loss experience, adjusted for forward-looking factors specific to the debtors and the economic environment.
For trade receivables that contain a significant financing component and lease receivables, the Group chooses as its accounting policy to adopt the simplified approach in calculating ECLs with policies as described above.
Financial instruments — derecognition of financial assets
A financial asset (or, where applicable, a part of a financial asset or part of a group of similar financial assets) is primarily derecognized (i.e., removed from the Group’s consolidated balance sheet) when:
| ● | the rights to receive cash flows from the asset have expired; or |
| ● | the Group has transferred its rights to receive cash flows from the asset or has assumed an obligation to pay the received cash flows in full without material delay to a third party under a “pass-through” arrangement; and either (a) the Group has transferred substantially all the risks and rewards of the asset, or (b) the Group has neither transferred nor retained substantially all the risks and rewards of the asset, but has transferred control of the asset. |
When the Group has transferred its rights to receive cash flows from an asset or has entered into a pass-through arrangement, it evaluates if, and to what extent, it has retained the risk and rewards of ownership of the asset. When it has neither transferred nor retained substantially all the risks and rewards of the asset nor transferred control of the asset, the Group continues to recognize the transferred asset to the extent of the Group’s continuing involvement. In that case, the Group also recognizes an associated liability. The transferred asset and the associated liability are measured on a basis that reflects the rights and obligations that the Group has retained.
Continuing involvement that takes the form of a guarantee over the transferred asset is measured at the lower of the original amount of the asset and the maximum amount of consideration that the Group could be required to repay.
Financial instruments — financial liabilities
Initial recognition and measurement
All financial liabilities are recognized initially at fair value and, in the case of loans and borrowings, net of directly attributable transaction costs. The Group’s financial liabilities include trade payables, other payables, financial liabilities included in accruals and interest-bearing bank borrowings.
F-17
Subsequent measurement
After initial recognition, interest-bearing loans and borrowings are subsequently measured at amortized cost, using the effective interest rate method unless the effect of discounting would be immaterial, in which case they are stated at cost. Gains and losses are recognized in the income statement when the liabilities are derecognized as well as through the effective interest rate amortization process.
Amortized cost is calculated by taking into account any discount or premium on acquisition and fees or costs that are an integral part of the effective interest rate. The effective interest rate amortization is included in finance costs in the income statement.
Financial instruments — derecognition of financial liabilities
A financial liability is derecognized when the obligation under the liability is discharged or cancelled, or expires.
When an existing financial liability is replaced by another from the same lender on substantially different terms, or the terms of an existing liability are substantially modified, such an exchange or modification is treated as a derecognition of the original liability and a recognition of a new liability, and the difference between the respective carrying amounts is recognized in the income statement.
Financial instruments — offsetting financial instruments
Financial assets and financial liabilities are offset and the net amount is reported in the statement of financial position if there is a currently enforceable legal right to offset the recognized amounts and there is an intention to settle on a net basis, or to realize the assets and settle the liabilities simultaneously.
Capital and Reserves
Share capital represents the nominal value of shares that have been issued by the Group. Share capital is determined using the nominal value of shares that have been issued.
Retained profits include all current and prior period results as determined in the combined statement of comprehensive income.
Foreign currency translation reserve arising on the translation are included in the currency translation reserve.
All transactions with owners of the Group are recorded separately within equity.
Earnings/(loss) per share
Basic earnings per share (“EPS”) are computed by dividing income attributable to holders of common shares by the weighted average number of common shares outstanding during the year. Diluted EPS reflects the potential dilution that could occur if securities or other contracts to issue common shares were exercised or converted into common shares. Potential dilutive securities are excluded from the calculation of diluted EPS in loss periods as their effect would be anti-dilutive.
The preparation of financial statements in conformity with IFRS requires management to exercise judgment in the process of applying the Group’s accounting policies and requires the use of accounting estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of financial statements and reported amount of revenue and expenses during the reporting period. The following estimates that have a significant risk of causing a material adjustment to the carrying amount of assets and liabilities within the next financial year are disclosed below.
F-18
NOTE 4 — SIGNIFICANT MANAGEMENT JUDGEMENT IN APPLYING ACCOUNTING POLICIES
Impairment Losses
Impairment losses are based on an assessment of the investment or long-lived assets’ ability to generate future cash flows when there is evidence that these assets may be impaired. The calculation of the amount of impairment loss is based on estimates made by management when applying broad accounting principles governing the accounting for these assets. The determination of these estimates requires judgment by management. The final outcome may differ from the original estimates made by management, which may impact the carrying value of the assets which management has determined to be impaired and charged to the Company’s profit or loss during the period.
Provisions
Provisions for legal claims, service warranties and make good obligations are recognized when the Company has a present legal or constructive obligation as a result of past events, it is probable that an outflow of resources will be required to settle the obligation, and the amount can be reliably estimated. Provisions are not recognized for future operating losses. Where there are a number of similar obligations, the likelihood that an outflow will be required in settlement is determined by considering the class of obligations as a whole. A provision is recognized even if the likelihood of an outflow with respect to any one item included in the same class of obligations may be small.
Provisions are measured at the present value of management’s best estimate of the expenditure required to settle the present obligation at the end of the reporting period. The discount rate used to determine the present value is a pre-tax rate that reflects current market assessments of the time value of money and the risks specific to the liability. The increase in the provision due to the passage of time is recognized as interest expense.
Income Tax
Significant judgment is involved in determining
the Group’s provision for income taxes. There are certain transactions and computations for which the ultimate tax determination
is uncertain during the ordinary course of business. The Group recognizes liabilities for expected tax issues based on estimates of whether
additional taxes will be due. Where the final tax outcome of these matters is different from the amounts that were initially recognized,
such differences will impact the income tax and deferred tax provisions in the period in which such determination is made. The carrying
amount of the Group’s income tax payable as at September 30, 2025 and March 31, 2025 amounted to $
NOTE 5 — KEY SOURCES OF ESTIMATION UNCERTAINTY
In the application of the Group’s accounting policies, which are described in Note 3, management is required to make estimates and assumptions about the carrying amounts of assets and liabilities that are not readily apparent from other sources. The estimates and associated assumptions are based on historical experience and other factors that are considered to be relevant. Actual results may differ from these estimates.
The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognized in the period in which the estimate is revised if the revision affects only that period or in the period of the revision and future periods if the revision affects both current and future periods.
The following are the key assumptions concerning the future, and other key sources of estimation uncertainty at the end of the reporting period, that have a significant risk of causing a material adjustment to the carrying amounts of assets within the next financial year.
Depreciation of property, plant and equipment
The costs of property, plant and equipment and
intangible assets are depreciated or amortized on a straight-line basis over the assets’ estimated useful lives. Management estimates
the useful lives of these property, plant and equipment, and intangible assets to be within
F-19
Impairment of non-financial assets
Property, plant and equipment and intangible assets are tested for impairment whenever there is any objective evidence or indication that these assets may be impaired.
For the purpose of impairment testing, the recoverable amount (i.e. the higher of the fair value less cost to sell and the value-in-use) is determined on an individual asset basis unless the asset does not generate cash flows that are largely independent of those from other assets. If this is the case, the recoverable amount is determined for the cash-generating-unit (“CGU”) to which the asset belongs.
If the recoverable amount of the asset (or CGU) is estimated to be less than its carrying amount, the carrying amount of the asset (or CGU) is reduced to its recoverable amount.
The difference between the carrying amount and recoverable amount is recognized as an impairment loss in the income statement, unless the asset is carried at revalued amount, in which case, such impairment loss is treated as a revaluation decrease.
An impairment loss for an asset other than goodwill is reversed if, and only if, there has been a change in the estimates used to determine the asset’s recoverable amount since the last impairment loss was recognized. The carrying amount of this asset is increased to its revised recoverable amount, provided that this amount does not exceed the carrying amount that would have been determined (net of any accumulated amortization or depreciation) had no impairment loss been recognized for the asset in prior years.
A reversal of impairment loss for an asset other than goodwill is recognized in the income statement, unless the asset is carried at revalued amount, in which case, such reversal is treated as a revaluation increase.
During the six months ended September 30, 2025 and 2024, the Group recognized impairment losses of $nil.
Allowance for expected credit losses
The calculation of the Group’s expected credit loss allowances and provisions against trade receivables, under IFRS 9 requires the Group to make a number of judgements, assumptions and estimates. The expected outcome may be different from the original estimate, and such difference will impact carrying value of trade receivables and doubtful debt expenses in the period in which such estimate has been charged.
Critical judgements include:
| ● | Determining an appropriate definition of default against which a probability of default, exposure at default and loss given default parameter can be evaluated |
| ● | Establishing the criteria for a significant increase in credit risk (SICR) |
| ● | The individual assessment of material cases and the use of judgmental adjustments made to impairment modelling processes that adjust inputs, parameters and outputs to reflect risks not captured by models |
Key source of estimation uncertainty includes:
| ● | Base case and multiple economic scenarios (MES) assumptions, including the rate of unemployment and the rate of change of house prices, required for creation of MES scenarios and forward-looking credit parameters |
In accordance with the contracts, when the goods or services are delivered, the customers are due to pay the full amount of revenue. However, most customers may postpone paying the outstanding balance in one or two months after acceptance of the goods or services. In general, if a receivable’s ageing is more than 1 year, it is very possible to be uncollectable or with certain disputes. As such, the management will examine all balances longer than 1 year and distinguish which are in special events to be not collectable. The Company determines that any receivables with ageing longer than 2 year or any receivables identified by the management with special events to be uncollectable are deemed to be uncollectable and need to be written off.
F-20
As of September 30, 2025 and March 31, 2025, the Company has not identified any receivables that need to be written-off. As such, no allowance on expected credit loss is considered as of September 30, 2025 and March 31, 2025.
Share-based payments
The Company measures the share-based payments value, by reference to the fair value of the equity instruments granted. As no active market for the Company’s equity value, the Company used discounted cash flow analyses for valuing the fair value and made estimates about expected future cash flows and credit spreads. Interest rate spreads, credit spreads, earnings multiples and interest rate volatility are the key sources of estimation, which may takes significant impact on the value of the share-based payments.
Lease liability
The Company uses estimation in determining the incremental borrowing rate used to measure the lease liability, specific to the asset, underlying currency, and geographic location. Where the rate implicit in the lease is not readily determinable, the discount rate of the lease obligations are estimated using a discount rate similar to the Company’s specific borrowing rate. This rate represents the rate that the Company would incur to obtain the funds necessary to purchase the asset of a similar value, with similar payment terms and security in a similar environment. The Company applies judgement in determining whether the contract contains an identified asset, whether they have the right to control the asset, and the lease term.
NOTE 6 — CONCENTRATION RISKS
Geographical information
The Group’s operations are located in Hong Kong and all of the Group’s revenue is derived from sales in Hong Kong. Hence, no analysis by geographical area of operations is provided.
Information about major customers
Major distributors that make up 10% or more of revenue are as below:
| Six Months ended September 30, 2025 | Six Months ended September 30, 2024 | |||||||
| Customer A | $ | $ | * | |||||
| Customer B | * | |||||||
| Customer C | * | |||||||
| Customer D | * | |||||||
| Customer E | * | |||||||
| Total revenue | $ | $ | ||||||
| * |
F-21
Information about major suppliers
Major suppliers that make up 10% or more of purchases are as below:
| Six Months ended September 30, 2025 | Six Months ended September 30, 2024 | |||||||
| Supplier A | $ | * | $ | |||||
| Supplier B | ||||||||
| Supplier C | * | |||||||
| Total purchase | $ | $ | ||||||
| * |
NOTE 7 — REVENUE
| Six Months ended September 30, 2025 | Six Months ended September 30, 2024 | |||||||
| Supply chain services | $ | $ | ||||||
| Procurement and distribution | ||||||||
| Consignment sales and other revenue | ||||||||
| Total Revenue | $ | $ | ||||||
During the six months ended September 30, 2025
and 2024, $
The Company presents the consideration that a
customer pays before the Company transfers a service or goods to the customer as a contract liability when the payment is made. Contract
liability is the Company’s obligation to transfer services to a customer for which the Company has received consideration from the
customer. As of September 30, 2025, the balance of contract liability was $
NOTE 8 — BREAKDOWN OF EXPENSES BY NATURE
Cost of revenue mainly comprise the cost of products purchased, cost of packing material, transportation cost, warehouse leasing cost, labor cost, compensation cost for loss of goods, outsourcing packing cost, and other direct costs.
Selling, general and administrative expenses comprise labor costs, depreciation and amortization, professional expenses, utility expenses and other office expenses.
The following table shows a breakdown of cost of revenue, Selling, general and administrative expenses of all business for the periods presented for each category:
| Six Months ended September 30, 2025 | Six Months ended September 30, 2024 | |||||||
| Changes in inventories of merchandised goods | $ | $ | ||||||
| Storage cost | ||||||||
| Transportation cost | ||||||||
| Consumption of packing material | ||||||||
| Depreciation and amortization | ||||||||
| Labor cost | ||||||||
| Outsourcing expenses | ||||||||
| Others | ||||||||
| Total cost of revenue, selling, general and administrative expenses | $ | $ | ||||||
F-22
NOTE 9 — OTHER INCOME
| Six Months ended September 30, 2025 | Six Months ended September 30, 2024 | |||||||
| Government grant | $ | $ | - | |||||
| Disposal of scraps and others | ||||||||
| Total | $ | $ | ||||||
NOTE 10 — OTHER GAINS, NET
| Six Months ended September 30, 2025 | Six Months ended September 30, 2024 | |||||||
| Foreign currency exchange gain (loss) | $ | ( | ) | $ | ||||
| Unrealized gain or loss from investment | - | |||||||
| Others | - | - | ||||||
| Total | $ | $ | ||||||
NOTE 11 — FINANCE COSTS, NET
| Six Months ended September 30, 2025 | Six Months ended September 30, 2024 | |||||||
| Interest income on bank balance | $ | $ | ||||||
| Finance income | ||||||||
| Interest expenses on lease liability | ( | ) | ( | ) | ||||
| Interest expenses on bank loans | ( | ) | ( | ) | ||||
| Finance costs | ( | ) | ( | ) | ||||
| - | - | |||||||
| Finance costs, net | $ | ( | ) | $ | ( | ) | ||
NOTE 12 — INCOME TAX EXPENSE
| Six Months ended September 30, 2025 | Six Months ended September 30, 2024 | |||||||
| Hong Kong enterprises income tax: | ||||||||
| Current tax | $ | $ | ||||||
| Deferred tax | — | — | ||||||
| Total | $ | $ | ||||||
F-23
Cellyan Biotechnology Co., Ltd was incorporated in the Cayman Islands, and, under the current laws of the Cayman Islands, is not subject to income taxes.
The Group’s tax charge is applicable solely to its Hong Kong operating entities, which may be subject to current income tax and deferred income tax.
Hong Kong
On March 21, 2018, the Hong Kong Legislative
Council passed The Inland Revenue (Amendment) (No. 7) Bill 2017 (the “Bill”) which introduces the two-tiered profits tax rates
regime. The Bill was signed into law on March 28, 2018 and was announced on the following day. Under the two-tiered profits
tax rates regime, the first
The following table reconciles the statutory rate to the Company’s effective tax rate for the six months ended September 30, 2025 and 2024:
| Six Months ended September 30, 2025 | Six Months ended September 30, 2024 | |||||||
| Hong Kong Statutory income tax rate | % | % | ||||||
| Permanent difference for non-deductible expense | - | % | % | |||||
| Permanent difference for non-taxable income | ( | )% | ( | )% | ||||
| Deferred tax not provided for | % | % | ||||||
| Previous years’ operating loss deducted in current year | - | % | - | % | ||||
| Effect of Hong Kong preferential tax rate | ( | )% | ( | )% | ||||
| Effect of different tax jurisdiction | - | % | ||||||
| Effective tax rate | % | % | ||||||
NOTE 13 — PROFIT FOR THE PERIOD
Profit for the period has been arrived at after charging:
| Six Months ended September 30, 2025 | Six Months ended September 30, 2024 | |||||||
| Depreciation of property, plant and equipment | $ | $ | ||||||
| Amortization of intangible assets | ||||||||
| Amortization of ROU assets | $ | $ | ||||||
F-24
NOTE 14 — DIRECTORS’ EMOLUMENTS
The emoluments paid or payable to the directors of the Company were as follows:
| Six Months ended September 30, 2025 |
Six Months ended September 30, 2024 |
|||||||
| Salaries | ||||||||
| Lap Sun Wong | $ | $ | ||||||
| Ms. Zou Yue | - | |||||||
| Mr. Chan Kam Leung | - | |||||||
| Mr. Lai King Yin | - | |||||||
| Zhifang Zhang | ||||||||
| Total | $ | $ | ||||||
NOTE 15 — EARNINGS PER SHARE
| Six Months ended September 30, 2025 | Six Months ended September 30, 2024 | |||||||
| Basic Earnings Per Share Numerator | ||||||||
| Profit for the period attributable to owners of the Company | $ | $ | ||||||
| Diluted Earnings Per Share Numerator | ||||||||
| Profit for the period attributable to owners of the Company | $ | $ | ||||||
| Basic Earnings Per Share Denominator | ||||||||
| Ordinary shares : | ||||||||
| Additions from actual events: | ||||||||
| – Issuance of ordinary shares, weighted | — | — | ||||||
| Basic weighted average shares outstanding | ||||||||
| Diluted Earnings Per Share Denominator | ||||||||
| Basic weighted average shares outstanding | ||||||||
| Dilutive shares: Potential additions from dilutive events: | ||||||||
— | — | |||||||
| Diluted Weighted Average Shares Outstanding: | ||||||||
| Earnings Per Share | ||||||||
| – Basic* | $ | $ | ||||||
| – Diluted* | $ | $ | ||||||
| Weighted Average Shares Outstanding | ||||||||
| – Basic* | ||||||||
| – Diluted* | ||||||||
| * |
F-25
NOTE 16 — PROPERTY, PLANT AND EQUIPMENT
| Leasehold improvements | Warehouse equipment | Furniture and fixtures | Office equipment | Electronic equipment | Total | |||||||||||||||||||
| COST | ||||||||||||||||||||||||
| At March 31, 2025 | $ | $ | $ | $ | $ | $ | ||||||||||||||||||
| Additions | - | - | - | |||||||||||||||||||||
| Written-off | - | - | - | - | - | - | ||||||||||||||||||
| Translation adjustment | $ | $ | $ | ( | ) | $ | - | $ | ( | ) | $ | |||||||||||||
| At September 30, 2025 | $ | $ | $ | $ | $ | $ | ||||||||||||||||||
| DEPRECIATION AND IMPAIRMENT | ||||||||||||||||||||||||
| At March 31, 2025 | $ | ( | ) | $ | ( | ) | $ | ( | ) | $ | ( | ) | $ | ( | ) | $ | ( | ) | ||||||
| Additions | ( | ) | ( | ) | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||||||
| Written-off | - | - | - | - | - | - | ||||||||||||||||||
| Translation adjustment | $ | ( | ) | $ | ( | ) | $ | ( | ) | $ | ( | ) | $ | ( | ) | $ | ( | ) | ||||||
| At September 30, 2025 | $ | ( | ) | $ | ( | ) | $ | ( | ) | $ | ( | ) | $ | ( | ) | $ | ( | ) | ||||||
| CARRYING AMOUNT | ||||||||||||||||||||||||
| At March 31, 2025 | $ | $ | $ | $ | $ | $ | ||||||||||||||||||
| At September 30, 2025 | $ | $ | $ | $ | $ | $ | ||||||||||||||||||
| * |
Depreciation is provided on straight-line basis for all property, plant and equipment over their estimated useful lives of the assets as follows:
| Useful life | Residual Value | |||
| Leasehold improvements-warehouse and offices | Nil | |||
| Warehouse equipment | Nil | |||
| Furniture and fixtures | Nil | |||
| Office equipment | Nil | |||
| Motor vehicles | Nil | |||
| Electronic equipment | Nil |
NOTE 17 — INTANGIBLE ASSETS
| Amount | ||||
| COST | ||||
| At March 31, 2025 | $ | |||
| additions during the period | ||||
| translation adjustment | $ | |||
| At September 30, 2025 | $ | |||
| AMORTIZATION | ||||
| At March 31, 2025 | $ | ( | ) | |
| charge for the year | ( | ) | ||
| translation adjustment | $ | ( | ) | |
| At September 30, 2025 | $ | ( | ) | |
| CARRYING AMOUNTS | ||||
| At March 31, 2025 | $ | |||
| At September 30, 2025 | $ | |||
F-26
NOTE 18 — INVENTORIES
| As at September 30, 2025 | As at March 31, 2025 | |||||||
| Low value consumables | $ | $ | ||||||
| Merchandised goods | ||||||||
| Consignment inventories | - | - | ||||||
| Provision for obsolete inventories | $ | - | $ | - | ||||
| Total | $ | $ | ||||||
None of the inventory were expired. There was no inventory provision or written-off during the six months ended September 30, 2025 and 2024.
NOTE 19 — TRADE RECEIVABLES, OTHER RECEIVABLES AND PREPAYMENTS
| As at September 30, 2025 | As at March 31, 2025 | |||||||
| Trade receivables | $ | $ | ||||||
| Allowance for expected credit losses | - | - | ||||||
| Total | $ | $ | ||||||
The aging analysis of trade receivables is as follows:
| As at September 30, 2025 | As at March 31, 2025 | |||||||
| Less than 90 days | $ | $ | ||||||
| 90-180 days | ||||||||
| 180-365 days | ||||||||
| >365 days | - | |||||||
| Total | $ | $ | ||||||
As disclosed in Note 5, the Company estimated the expected credit loss for accounts receivable based on certain assumptions and historical bad debt identified. As of September 30, 2025 and March 31, 2025, the Company has not identified any receivables that need to be written off. As such, no allowance on expected credit loss is considered as of September 30, 2025 and March 31, 2025.
The breakdown of other receivable and prepayments is as follows:
| As at September 30, 2025 | As at March 31, 2025 | |||||||
| Prepayments | $ | $ | ||||||
| Deposits | ||||||||
| Total | $ | $ | ||||||
F-27
Prepayments include advances to suppliers and prepaid expenses.
Deposits represent the deposit for rentals or utilities.
The fair value of trade and other receivables have not been disclosed as, due to their short duration, management considers the carrying amounts recognized in the consolidated statements of financial position to be reasonable approximation of their fair values.
NOTE 20 — CASH AND CASH EQUIVALENTS
| As at September 30, 2025 | As at March 31, 2025 | |||||||
| Cash on hand | $ | $ | ||||||
| Cash at bank | ||||||||
| Total | $ | $ | ||||||
Cash and cash equivalents comprise cash held by
the Group and cash at bank. Cash at bank as at September 30, 2025 and March 31, 2025 carry interest at market rates which ranged
from
NOTE 21 — INVESTMENT FOR FUNDS at fair value through profit or loss
| 2025 | 2024 | |||||||
| Beginning balance as of March 31, | $ | $ | - | |||||
| Revaluation gain | $ | $ | - | |||||
| Fair value of investment for funds as at September 30, | $ | $ | - | |||||
On February 12, 2025, the Group made an investment
into an open-end fund at cost of $
NOTE 22 — TRADE AND OTHER PAYABLES
| As at September 30, 2025 | As at March 31, 2025 | |||||||
| Trade payables | $ | $ | ||||||
| Employee benefits payable | ||||||||
| Accrual and other payables | $ | $ | ||||||
| Total | $ | $ | ||||||
The fair value of trade and other payables have not been disclosed as, due to their short duration, management considers the carrying amounts recognized in the consolidated statements of financial position to be reasonable approximation of their fair values.
F-28
Trade payables comprise amounts outstanding for trade purchase. The aging analysis of trade payables is as follows:
| As at September 30, 2025 | As at March 31, 2025 | |||||||
| <90 days | $ | $ | ||||||
| 90-180 days | ||||||||
| 180-365 days | ||||||||
| >365 days | $ | $ | ||||||
| Total | $ | $ | ||||||
NOTE 23 — RELATED PARTIES
| (1) |
| Name | Relationship with the Group | |
| Mr. Lap Sun Wong | ||
| Mr. Zhifang Zhang | ||
| LS International Holdings Limited | ||
| Wing Hong Pharmaceutical Limited | ||
| HongKong Hao Le Ku Limited | ||
| HongKong Profit Fields Group Limited | ||
| Hangzhou Liku Electronic Commercial Co., Ltd. | ||
| My Brand Management Limited | ||
| Billion Built International Limited | ||
| Fame overseas Supply Chain Limited |
| * |
| (2) |
| Name | As at September 30, 2025 | As at March 31, 2025 | ||||||
| Wing Hong Pharmaceutical Limited | $ | $ | ||||||
| Billion Built International Limited | - | |||||||
| Fame overseas Supply Chain Limited | - | |||||||
| Total of Amount due from related parties | $ | $ | ||||||
F-29
|
Name |
As at September 30, 2025 |
As at March 31, 2025 |
||||||
| Mr. Lap Sun Wong | $ | ( |
) | $ | ( |
) | ||
| Mr. Zhifang Zhang | ( |
) | ( |
) | ||||
| Total of Amount due to related parties | $ | ( |
) | $ | ( |
) | ||
Related parties receivables/(payables) were unsecured, non-interest bearing and repayment on demand.
| (3) |
| Name | Sales to | Purchase from | Loan to | Loan from | ||||||||||||
| Mr. Lap Sun Wong | $ | — | $ | — | $ | $ | ||||||||||
| Billion Built International Limited | — | — | — | |||||||||||||
| Wing Hong Pharmaceutical Limited | — | — | — | |||||||||||||
| (4) |
| Name | Sales to | Purchase from | Loan to | Loan from | ||||||||||||
| Mr. Lap Sun Wong | $ | — | $ | — | $ | — | $ | |||||||||
| Mr. Zhifang Zhang | — | — | — | |||||||||||||
| Wing Hong Pharmaceutical Limited | — | — | — | |||||||||||||
| HongKong Profit Fields Group Limited | — | — | — | |||||||||||||
NOTE 24 — SHORT-TERM AND LONG-TERM BANK LOAN
| As at September 30, 2025 | As at March 31, 2025 | |||||||
| Instalment bank loan – current portion | $ | $ | ||||||
| Instalment bank loan – noncurrent portion | ||||||||
| Total loan | $ | $ | ||||||
Bank loans represent the amounts due to various banks. As of September 30, 2025 and March 31, 2025, long-term bank loans consisted of the following:
Summary of Current portion of long-term bank loans
| Annual Interest | Last payment | As of September 30, | As of March 31 | |||||||||||
| Rate | date | 2025 | 2025 | |||||||||||
| Current portion of long-term bank loans: | ||||||||||||||
| Bank of China Ltd. (1) | | |||||||||||||
| Bank of China Ltd. (1) | | |||||||||||||
| Livi Bank (1) | % | | ||||||||||||
| Standard Chartered Bank (2) | % | $ | | $ | ||||||||||
| Total | $ | $ | ||||||||||||
F-30
Summary of non-current portion of long-term bank loans
| Annual Interest | Last payment | As of September 30, | As of March 31 | |||||||||
| Rate | date | 2025 | 2025 | |||||||||
| Non-current portion of long-term bank loans: | ||||||||||||
| Bank of China Ltd. (1) | $ | - | $ | - | ||||||||
| Bank of China Ltd. (1) | ||||||||||||
| Livi Bank (1) | ||||||||||||
| Standard Chartered Bank (2) | $ | $ | ||||||||||
| Total | $ | $ | ||||||||||
| (1) |
| (2) |
| * |
NOTE 25 — LEASE
The Company primarily has operating leases for
warehouse, administrative offices and dormitories, through third-parties.
| As of September 30, 2025 | As of March 31, 2025 | |||||||
| Lease right-of-use assets, net | $ | $ | ||||||
| Lease liabilities, current | ||||||||
| Lease liabilities, non-current | ||||||||
| Total lease liabilities | $ | $ | ||||||
| Weighted average remaining lease term | ||||||||
| Weighted average discount rate* | % | % | ||||||
| * |
| Movement of right-of-use assets | 2025 | |||
| Lease right-of-use assets, net as of March 31, 2025 | $ | |||
| Addition during the six months ended September 30, 2025 | ||||
| Right-of-use assets modification | - | |||
| Right-of-use assets amortization | ( | ) | ||
| Foreign currency translation adjustments | $ | |||
| Lease right-of-use assets, net as of September 30, 2025 | $ | |||
| Movement of lease liability | 2025 | |||
| Total lease liabilities as of March 31, 2025 | $ | |||
| Addition during the six months ended September 30, 2025 | ||||
| Total lease liabilities modification | - | |||
| Repayment | ( | ) | ||
| Foreign currency translation adjustments | $ | |||
| Total lease liabilities as of September 30, 2025 | $ | |||
F-31
A summary of lease expenses recognized in the consolidated statement of income and comprehensive income(loss) for the six months ended September 30, 2025 and 2024 and supplemental cash flow information related to operating leases were as follows:
| For the six months ended September 30, 2025 | For the six months ended September 30, 2024 | |||||||
| Operating lease expenses – short-term lease | $ | $ | ||||||
| Interest for lease liability | ||||||||
| Right-of-use assets amortization | $ | $ | ||||||
Minimum future lease payments under non-cancellable operating leases described above as of September 30, 2024 were as follows:
| As of September 30, 2025 | ||||
| By September 30, 2025 | $ | |||
| By September 30, 2026 | ||||
| By September 30, 2027 | - | |||
| By September 30, 2028 | $ | - | ||
| Total future lease payments | ||||
| Less: present value discount | ( | ) | ||
| Total operating lease liabilities | $ | |||
NOTE 26 — SHARE CAPITAL AND SHARE PREMIUM
The details of the Group’s share capital are as follows:
| Number of shares * (Class A) | Amount (Class A) | Number of shares * (Class B) | Amount (Class B) | Subscription receivable | Additional Paid-in Capital | |||||||||||||||||||
| Shares outstanding as March 31, 2025 | — | — | — | |||||||||||||||||||||
| Shares outstanding as September 30, 2025 | — | — | — | |||||||||||||||||||||
| Number of shares | Amount | Additional Paid-in Capital | ||||||||||
| Authorized Class A Ordinary shares of US$ | $ | $ | — | |||||||||
| Authorized Class B Ordinary shares of US$ | $ | — | ||||||||||
| Issued Class A Ordinary shares of US$ | $ | |||||||||||
| Issued Class B Ordinary shares of US$ | — | — | $ | — | ||||||||
| Issued Class A Ordinary shares of US$ | $ | |||||||||||
| Issued Class B Ordinary shares of US$ | — | — | $ | — | ||||||||
| * |
F-32
Class A Ordinary Shares
On December 1, 2023, the Company issued to two
shareholders,
On December 1, 2023, the Company issued to three
shareholders
On January 14, 2025, the Company completed its
initial public offering ("IPO"), pursuant to which it issued
On December 12, 2025, the Company held a shareholders’
meeting to amend the Company’s authorized share capital, such that the authorized share capital remains US$
Class B Ordinary Shares
On December 12, 2025, the Company held a shareholders’
meeting to amend the Company’s authorized share capital, such that the authorized share capital remains US$
As of September 30, 2025, no Class B ordinary shares were issued and outstanding.
NOTE 27 — RETAINED EARNINGS AND ACCUMULATED OTHER COMPREHENSIVE (LOSS) INCOME
Retained earnings
The retained earnings comprise the cumulative net gains and losses recognized in the Company’s consolidated profit or loss and other comprehensive income.
Accumulated other comprehensive income
Accumulated other comprehensive income represents the foreign currency translation difference arising from the translation of the financial statements of companies within the Group from their functional currency to the Group’s presentation currency.
F-33
NOTE 28 — RISK MANAGEMENT AND FAIR VALUES
| 1. | Capital risk |
The Group manages its capital to ensure that entities in the Group will be able to continue as a going concern while maximizing the return to owners through the optimization of the debt and equity balance. The Group’s overall strategy remains unchanged during the year.
The capital structure of the Group consisted of borrowings net of bank balances and cash, and equity attributable to owners of the Company comprising issued share capital and various reserves.
The directors of the Company review the capital structure regularly. As part of this review, the Group considers the cost of capital and the risks associated with each class of capital, and will balance its overall capital through the payment of dividends, new share issues as well as the issue of new debt or the redemption of existing debt.
The Group monitors capital using the Gearing Ratio, which is net debt divided by total equity. Net debt represents borrowings less cash and cash equivalents. The Company met its objective by monitoring borrowing activities.
The Company and its subsidiaries are not subject to externally imposed capital requirements.
| September 30, 2025 | March 31, 2025 | |||||||
| Total loans and long-term related party payable | $ | $ | ||||||
| Less: cash and cash equivalents | ( | ) | ( | ) | ||||
| Net debt | ||||||||
| Total equity | $ | $ | ||||||
| Gearing ratio | % | % | ||||||
| 2. | Financial risk |
Financial risk management objectives and policies
The Group’s major financial instruments include trade and other receivables, related parties receivables, cash and cash equivalents, trade and other payables, related parties payables and short-term loans. Details of these financial instruments are disclosed in the respective notes. The risks associated with these financial instruments include credit risk, market risk (interest rate risk and currency risk) and liquidity risk. The policies on how to mitigate these risks are set out below. The management manages and monitors these exposures to ensure appropriate measures are implemented on a timely and effective manner.
F-34
| 3. | Market risk |
| (i) | Foreign currency risk |
While our reporting currency is the U.S. dollar,
substantially all of our consolidated revenues and consolidated costs and expenses are denominated in HK$. Substantially all of our assets
are denominated in HK$. As a result, we are exposed to foreign exchange risk as our revenues and results of operations may be affected
by fluctuations in the exchange rate between the U.S. dollar and the HK$. If the HK$ depreciates against the U.S. dollar, the
value of our HK$ revenues, earnings and assets as expressed in our U.S. dollar financial statements will decline. Assets and liabilities
are translated at exchange rates at the balance sheet dates and revenue and expenses are translated at the average exchange rates and
equity is translated at historical exchange rates. Any resulting translation adjustments are not included in determining net income but
are included in determining other comprehensive income, a component of equity. As of September 30, 2025 and March 31, 2025, our accumulated
other comprehensive income was $
| (ii) | Interest rate risk |
We deposit surplus funds with Hong Kong banks earning daily interest. We do not invest in any instruments for trading purposes. Most of our outstanding debt instruments carry fixed rates of interest. Our operations generally are not directly sensitive to fluctuations in interest rates. Management monitors the banks’ prime rates in conjunction with our cash requirements to determine the appropriate level of debt balances relative to other sources of funds. We have not entered into any hedging transactions in an effort to reduce our exposure to interest rate risk.
| 4. | Credit risk |
As at September 30, 2025, the Group’s maximum exposure to credit risk which will cause a financial loss to the Group due to failure to perform an obligation by the counterparties is arising from the carrying amount of the respective recognized financial assets as stated in the consolidated balance sheet.
In order to minimize the credit risk, the management of the Group has delegated a team responsible for determination of credit limits, credit approvals and other monitoring procedures to ensure that follow-up action is taken to recover overdue debts. In addition, the Group reviews the recoverable amount of each individual trade debt at the end of each reporting period to ensure that adequate impairment losses are made for irrecoverable amounts. In this regard, the directors of the Group consider that the Group’s credit risk is significantly reduced.
The Group’s exposure to credit risk on receivables are influenced mainly by the individual characteristics of each customer therefore concentrations of credit risk primarily arise when the Group has significant exposure to individual customers. In order to minimize the credit risk, management continuously monitors the level of exposure to ensure that follow-up actions and/or corrective actions are taken promptly to lower the risk exposure or to recover overdue balances.
F-35
| 5. | Liquidity risk |
In the management of the liquidity risk, the Group monitors and maintains a level of cash and bank balances deemed adequate by the management to finance the Group’s operations and mitigate the effects of fluctuations in cash flows. The management monitors the utilization of bank borrowings and ensures compliance with loan covenants.
Liquidity tables
The following tables detail the Group’s remaining contractual maturity for its non-derivative financial liabilities as at September 30, 2025 based on agreed repayment terms. The tables have been drawn up based on undiscounted cash flows of financial liabilities based on the earliest date on which the Group can be required to pay. The tables include both interest and principal cash flows.
As at September 30, 2025
| Within 1 year | Over 1 year | Total | ||||||||||
| Bank loans and long-term related party payable | $ | $ | $ | |||||||||
| Lease liability | ||||||||||||
| Trade and other payables | - | |||||||||||
| Income tax payable | - | |||||||||||
| Related parties payables | $ | $ | - | $ | ||||||||
| Total | $ | $ | $ | |||||||||
| 6. | Fair value |
The fair value of financial assets and financial liabilities is determined in accordance with generally accepted pricing models based on discounted cash flow analysis.
The following table presents the fair value of the Group’s financial instruments measured at the end of the reporting period on a recurring basis, categorized into the three-level fair value hierarchy as defined in IFRS 13, Fair Value Measurement. The level into which a fair value measurement is classified is determined with reference to the observability and significance of the inputs used in the valuation technique as follows:
| — | Level 1 valuations: Fair value measured using only Level 1 inputs i.e. unadjusted quoted prices in active markets for identical assets or liabilities at the measurement date. | |
| — | Level 2 valuations: Fair value measured using Level 2 inputs i.e. observable inputs which fail to meet Level 1, and not using significant unobservable inputs. Unobservable inputs are inputs for which market data are not available. | |
| — | Level 3 valuations: Fair value measured using significant unobservable inputs. |
During the six months ended September 30, 2025 and 2024, there were no transfers between Level 1 and Level 2, or transfers into or out of Level 3. The Group’s policy is to recognize transfers between levels of fair value hierarchy as at the end of the reporting period in which they occur.
Valuation techniques and inputs used in Level 3 fair value measurements
Financial assets reported in fair value hierarchy
| September 30, 2025 | ||||||||||||||||||||
| Financial Assets | Fair value | Book value | ||||||||||||||||||
| Level 1 | Level 2 | Level 3 | Total | Total | ||||||||||||||||
| Fund investments at fair value through profit or loss | — | — | $ | $ | $ | |||||||||||||||
| Total financial assets in fair value hierarchy | — | — | $ | $ | $ | |||||||||||||||
The directors of the Company consider that the carrying amounts of financial assets and financial liabilities recorded at amortized cost approximate their fair values.
F-36
NOTE 29 — COMMITMENTS AND CONTINGENCIES
| (1) | Apart from the bank loans and lease liability as disclosed in Note 24 and Note 25, no other commitment was identified by the Company. |
| (2) | Please see Note 24 and Note 25 for the obligation of future payment. |
No contingency is identified by the Company as of September 30, 2025.
NOTE 30 — EVENTS AFTER THE BALANCE SHEET
On October 6, 2025, the Board of Directors (the “Board”) of the Company received and accepted the resignation of Mr. Wong Lap Sun (“Mr. Wong”) from his position as Chief Executive Officer, the resignation of Mr. Zhifang Zhang (“Mr. Zhang”) from his position as Executive Director, and the resignation of Mr. Kwok Man Bun (“Mr. Kwok”) from his position as Chief Financial Officer effective immediately. Each of Mr. Wong, Mr. Zhang and Mr. Kwok resigned for personal reasons and not due to any disagreement with the Company or the Board on any matter relating to the Company’s operations, policies, or practices. Effective on October 6, 2025, the Board appointed Mr. Chenyu Liang (“Mr. Liang”) as Director and Chief Executive Officer, Ms. Shu Liu (“Ms. Liu”) as Chief Financial Officer and Mr. Zifeng Wang (“Mr. Wang”) as Chief Strategy Officer of the Company.
On November 6, 2025, the Board of Directors (the “Board”) of the Company received and accepted the resignation of Ms. Raina Zou (“Ms. Zou”) from her position as Independent Director, chairperson of the audit committee of the Board, member of the compensation committee of the Board and member of the nominating and corporate governance committee of the Board. On the same date, the Board also received and accepted the resignation of Dr. King Yin Lai (“Mr. Lai”) from his position as Independent Director, member of the audit committee of the Board, chairperson of the compensation committee of the Board and member of the nominating and corporate governance committee of the Board. Both Ms. Zou and Mr. Lai resigned for personal reasons and not due to any disagreement with the Company or the Board on any matter relating to the Company’s operations, policies, or practices. To fill the vacancy created by Ms. Zou’s resignation until the Company’s next annual general meeting called for the election of directors, the Board appointed Ms. Jingyan Wu (“Ms. Wu”) to serve as an independent director, chairperson of the audit committee of the Board, member of the compensation committee of the Board and member of the nominating and corporate governance committee of the Board, effective on November 6, 2025.
On November 10, 2025, the Company submitted an
early redemption application in respect of its investment in an open-ended fund, with the total redemption amounting to US$
F-37
On December 12, 2025, the Company held a shareholders’
meeting, at which the following resolutions were adopted: (a) to amend the Company’s authorized share capital, such that the authorized
share capital remains US$
On December 31, 2025, the English name of the Company was changed from “Hong Kong Pharma Digital Technology Holdings Limited” to “Cellyan Biotechnology Co., Ltd”, and the Chinese name of “生研生物公司” be adopted as the dual foreign name of the Company to replace its existing Chinese name of “港药数字科技控股有限公司” with effect from the date on which the Registrar of Companies in the Cayman Islands issues a Certificate of Incorporation on Change of Name confirming that the new name has been registered.
On January 12, 2026, the Company received a letter
from the Listings Qualifications Department of The Nasdaq Capital Market (“Nasdaq”) notifying the Company that the minimum
closing bid price per share for its class A ordinary shares of par value of US$
F-38
Exhibit 99.2
ITEM 5. OPERATING AND FINANCIAL REVIEW AND PROSPECTS
You should read the following discussion and analysis of our financial condition and results of operations in conjunction with our condensed consolidated financial statements and the related notes included elsewhere in this filing. This discussion contains forward-looking statements that involve risks and uncertainties. Actual results and the timing of selected events could differ materially from those anticipated in these forward-looking statements as a result of various factors.
Overview
Our business offering consists of two main categories: (i) OTC pharmaceutical cross-border e-commerce supply chain services, primarily conducted through our Hong Kong subsidiary, Joint Cross Border, which we refer to as the “Supply Chain Services” and (ii) OTC pharmaceutical cross-border procurement and distribution, primarily conducted through our Hong Kong subsidiary, V-Alliance, which we refer to as the “Procurement and Distribution”. Based in Hong Kong, Joint Cross Border has established itself as a leading provider of third-party supply chain services in Mainland China’s OTC pharmaceutical cross-border e-commerce market. As cited in our previously submitted 20-F, we ranked first in this sector by revenue in 2022, according to industry research conducted by Frost & Sullivan.
Through our engagement with OTC pharmaceutical suppliers, logistics companies, and merchants who operate stores on Chinese e-commerce platforms, Joint Cross Border offers a convenient one-stop solution for Mainland Chinese customers who wish to access OTC pharmaceutical products outside Mainland China. Joint Cross Border’s offering includes a comprehensive array of services, such as pre-consultation, product information review, procuring overseas OTC pharmaceutical products, enlisting OTC pharmaceutical products to the HKDOH, obtaining import and export permits and clearances, storing products at warehouses, packaging, and arranging for logistics and end-to-end delivery services for consumers. In addition to providing supply chain services, leveraging our expertise in overseas OTC pharmaceutical products, V-Alliance procures these products and sells them directly to merchants on established Chinese e-commerce platforms as well as pharmaceutical distributors.
Principal Factors Affecting Our Financial Performance
Our operating results are primarily affected by the following factors:
| ● | Our ability to maintain a competitive value proposal for our products and services. |
| ● | Our ability to maintain our key customer. |
| ● | Our ability to launch successful marketing and sales activities to sell our products. |
| ● | Our ability to adapt our supply chain at any time to improve our competitiveness. |
| ● | Our ability to obtain maximum financial resources at the best possible price. |
| ● | The evolution of economic and political factors in global markets that may affect the demand for our products as well as financial costs. |
| ● | Alteration of the supply chain that may result in a variance in product purchasing and transportation costs. |
5.A. Operating Results
Comparison of Six Months Ended September 30, 2025 and 2024
| For the six months ended September 30 | ||||||||||||||||
| 2025 | 2024 | Increase/(decrease) | ||||||||||||||
| $ | $ | $ | % | |||||||||||||
| Revenues | ||||||||||||||||
| Supply Chain Services | 4,524,866 | 6,329,678 | (1,804,812 | ) | (29 | ) | ||||||||||
| Procurement and Distribution | 2,609,787 | 4,759,301 | (2,149,514 | ) | (45 | ) | ||||||||||
| Consignment sales and other revenue | 2,487 | 2,210 | 277 | 13 | ||||||||||||
| Total Revenue | 7,137,140 | 11,091,189 | (3,954,049 | ) | (36 | ) | ||||||||||
| Cost of revenues | (6,206,376 | ) | (9,185,586 | ) | 2,979,210 | (32 | ) | |||||||||
| Gross Profit | 930,764 | 1,905,603 | (974,839 | ) | (51 | ) | ||||||||||
| Selling, general and administrative expenses | (724,617 | ) | (881,120 | ) | 156,503 | (18 | ) | |||||||||
| Other income and other gain/(losses), net | 28,172 | 2,555 | 25,617 | 1,003 | ||||||||||||
| Finance cost – net | (62,517 | ) | (48,176 | ) | (14,341 | ) | 30 | |||||||||
| Profit before income taxes | 171,802 | 978,862 | (807,060 | ) | (82 | ) | ||||||||||
| Income tax expense | (18,067 | ) | (150,303 | ) | 132,236 | (88 | ) | |||||||||
| Net Profit for the period | 153,735 | 828,559 | (674,824 | ) | (81 | ) | ||||||||||
Revenue. The principal activities of the Company for the six months ended September 30, 2025 and 2024 were Supply Chain Services and Procurement and Distribution. Our total revenues for the six months ended September 30, 2025 and 2024 was $7,137,140 and $11,091,189, respectively, representing a decrease of 36%. The decrease was mainly due to decreases in revenue from Supply Chain Services and Procurement and Distribution of $1,804,812 and $2,149,514, respectively.
Revenue from Supply Chain Services decreased by $1,804,812, or 29%, to $4,524,866 for the six months ended September 30, 2025 from $6,329,678 for the six months ended September 30, 2024. This decrease was primarily attributable to increased market competition, as more competitors entered the market and captured a portion of our market share compared with the six months ended September 30, 2024. Revenue from Supply Chain Services accounted for 63% of our total revenues for the six months ended September 30, 2025, as compared to 57% for the six months ended September 30, 2024.
Revenue from Procurement and Distribution decreased by $2,149,514, or 45%, to $2,609,787 for the six months ended September 30, 2025 from $4,759,301 for the six months ended September 30, 2024. This decrease was primarily attributable to increased market competition, as more competitors entered the market and captured a portion of our market share compared with the six months ended September 30, 2024. Revenue from Procurement and Distribution accounted for 37% of our total revenues for the six months ended September 30, 2025, as compared to 43% for the six months ended September 30, 2024.
Consignment sales and other revenues represent the revenue from consignment sales and sales of packing materials and sample products. For the six months ended September 30, 2025 and 2024, the revenue of this segment represent sales of packing materials and sample products.
Cost of revenues. Cost of revenue mainly comprise the cost of products purchased, cost of packing material, transportation cost, warehouse leasing cost, employee compensation, compensation cost for loss of goods, outsourcing packing cost, and other direct costs.
Our cost of revenues decreased by $2,979,210, or 32%, to $6,206,376 for the six months ended September 30, 2025 from $9,185,586 for the six months ended September 30, 2024. Such decrease was mainly due to decrease of cost of product, cost of packing materials and storage cost which are generally in line with the decrease of revenue by 36% in the six months ended September 30, 2025. However, most fixed costs, including storage and labor expenses, did not decline proportionately with revenue, which caused the gross profit margin to decrease from 17% for the six months ended September 30, 2024 to 13% for the six months ended September 30, 2025.
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Selling, general and administrative expenses Our selling, general and administrative expenses comprise primarily employee compensation, depreciation and amortization, outsourcing service fees, professional expenses, utility expenses and other office expenses.
Our selling, general and administrative expenses decreased by $156,503, or 18% to $724,617 for the six months ended September 30, 2025 from $881,120 for the six months ended September 30, 2024. The decrease was mainly attributable to reduced expenses corresponding to the decline in revenue during the six months ended September 30, 2025.
Other income and other gains (losses), net Our other income primarily consists of government grants. Other gains primarily consist of foreign currency exchange loss, penalties, revaluation gain (loss) on financial instruments and gain on disposal of subsidiaries or property and equipment. Other income and other gains, net increased by $25,617 to $28,172 for the six months ended September 30, 2025 from $2,555 for the six months ended September 30, 2024. The other income and other gains during the six months ended September 30, 2025 mainly included the revaluation gain on investment funds of $33,592, government grant of $1,468, gain on disposal of scraps and others of $3,838, offset by foreign currency exchange loss of $10,726. The other income and other gains during the six months ended September 30, 2024 mainly included foreign currency exchange gain of $1,751 and gain on disposal of scraps and others of $804.
Finance cost, net. Finance cost, net represent the interest expenses for operating lease liability and interest for short-term loans, long-term bank loans and payable, offset by interest income from bank deposit. Our finance cost, net increased by $14,341, or 30% to $62,517 for the six months ended September 30, 2025 from $48,176 for the six months ended September 30, 2024. Such increase was primarily due to the increase of average balance of short-term bank loans and long-term bank loans.
Income tax expense. We recorded income tax expenses of $18,067 for the six months ended September 30, 2025, as compared to $150,303 for the six months ended September 30, 2024, representing a decrease of $132,236 or 88%. The decrease in the income tax expense was mainly resulted from decrease of profit before tax.
Net profit. Net profit for the six months ended September 30, 2025 and 2024 was $153,735 and $828,559, respectively, a decrease of $674,824, or 81%. The decrease of net profit was primary due to decrease of gross profit of $974,839 offset by decrease of selling and administrative expenses of $156,503, increase of other income and other gains (losses) net of $25,617, and decrease of income tax expense of $132,236 as explained above.
5.B. Liquidity and Capital Resources
As of September 30, 2025, we had cash and cash equivalents of $190,912. To date, we have financed our operations primarily through capital contributions from our shareholders, cash generated from operations and bank borrowings, and funds received from our initial public offering.
While the Company recorded an operating cash outflow of $244,017 for the six months ended September 30, 2025, it generated a net profit of $153,735 during the same period, with working capital amounting to $5,831,411 as of September 30, 2025. Given the Company’s profitability and solid working capital position, management believes that its existing cash and cash flows from operations will be sufficient to fund its anticipated operating and expansion requirements for at least the next 12 months. We may, however, in the future require additional cash resources due to changing business conditions, implementation of our strategy to expand our business, or other investments or acquisitions we may decide to pursue. If our own financial resources are insufficient to satisfy our capital requirements, we may seek to sell additional equity or debt securities or obtain additional credit facilities. The sale of additional equity securities could result in dilution to our shareholders. The incurrence of indebtedness would result in increased debt service obligations and could require us to agree to operating and financial covenants that would restrict our operations. Financing may not be available in amounts or on terms acceptable to us, if at all. Any failure by us to raise additional funds on terms favorable to us, or at all, could limit our ability to expand our business operations and could harm our overall business prospects.
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Summary of Cash Flow
The following table sets forth a summary of our cash flows for the periods presented:
For the six months ended September 30, | ||||||||
| 2025 | 2024 | |||||||
| Cash Flows (used in) provided by operating activities | $ | (244,017 | ) | $ | 753,119 | |||
| Cash Flows used in investing activities | (42,499 | ) | (106,343 | ) | ||||
| Cash Flows used in financing activities | (269,554 | ) | (912,023 | ) | ||||
| Effect of exchange rates changes on cash | (1,680 | ) | 3,381 | |||||
| Net change in cash during the period | $ | (557,750 | ) | $ | (261,866 | ) | ||
Operating Activities
For the six months ended September 30, 2025, the Company recorded a net cash used in operating activities of $244,017, a significant reversal from the net cash provided by operating activities of $753,119 for the six months ended September 30, 2024. This shift was primarily driven by a confluence of operating asset and liability movements, partially offset by non-cash charges, net profit during the period and modest positive working capital adjustments. The net profit supported the cash inflow decreased from $828,559 for the six months ended September 30, 2024 to $153,735 in the six months ended September 30, 2025. The non-cash items that supported cash flow in 2025 included depreciation and amortization of $47,392, amortization of right-of-use (ROU) assets of $412,272, and an unrealized fair value gain on investment funds of $33,592 (a non-cash item that reduced the cash flow adjustment compared to 2024’s nil). Partially offsetting these non-cash inflows were unfavorable changes in core operating assets: trade receivables increased by $435,868, inventories rose by $33,330, and other receivables and prepayments expanded by $227,595, trade and other payables also decreased by $592,085, all of which tied up operating cash in 2025. Positive working capital adjustments in 2025 included a $402,913 increase in contract liabilities, an $18,067 rise in taxes payable, and a net $44,074 favorable change in amounts due from/to related parties, which partially mitigated the negative cash flow impacts. In the six months ended September 30, 2024, apart from the aforementioned net profit effect, the Company’s positive operating cash flow was further supported by favorable inventory movement (a $382,651 decrease), a $372,673 increase in trade and other payables, a $124,689 rise in taxes payable, and non-cash charges including depreciation and amortization of $34,052 and ROU asset amortization of $407,886, partially offset by a $1,148,824 increase in trade receivables and a $94,476 rise in other receivables and prepayments.
Investing Activities
Net cash used in investing activities totaled $42,499 for the six months ended September 30, 2025, compared to $106,343 for the same period in 2024, a reduction in cash outflows driven by lower capital expenditures across all long-term asset categories. In 2025, the Company incurred $35,433 in additions to property, plant and equipment and $7,066 in additions to intangible assets, while 2024 saw higher outlays of $41,035 for property, plant and equipment and $65,308 for intangible assets, reflecting a slowdown in the Company’s capital investment activity in the six months ended September 30, 2025.
Financing Activities
For the six months ended September 30, 2025, net cash used in financing activities was $269,554, compared to $912,023 in net cash used in financing activities for the six months ended September 30, 2024, a meaningful reduction in cash outflows due to the absence of significant deferred IPO cost payments and a net inflow from related party loans in 2025 (offset by continued debt and lease liability repayments). In 2025, the Company repaid $184,350 in bank loans and $420,166 in lease liabilities (net), and repaid $12,506 in loans to related parties, partially offset by a $347,468 inflow from loans obtained from related parties; there were no shareholder capital contributions or deferred IPO cost payments in 2025. In 2024, the Company’s financing cash outflows were amplified by a $443,992 payment for deferred IPO costs, $106,408 in bank loan repayments, $392,395 in net lease liability repayments, and $226,679 in loan repayments to related parties, partially offset by a $250,000 capital contribution from shareholders and a modest $7,451 inflow from related party loans.
4
The effect of foreign exchange rate changes on cash was a $1,680 outflow in 2025, compared to a $3,381 inflow in 2024, reflecting unfavorable movements in the Hong Kong dollar against the U.S. dollar (the Company’s reporting currency) in the 2025 period. Combined with the cash flows from operating, investing and financing activities, the Company recorded a net decrease in cash of $557,750 for the six months ended September 30, 2025, versus a net decrease of $261,866 in 2024. Cash and restricted cash at the end of the period declined to $191,371 as of September 30, 2025, from $365,391 as of September 30, 2024, primarily driven by the negative operating cash flow in the 2025 period and ongoing debt and lease liability repayments.
Capital Expenditures
We made capital expenditures of $42,499 and $106,343 in the six months ended September 30, 2025 and 2024, respectively. In these periods, our capital expenditures were mainly used for purchase of equipment and intangible assets. We plan to continue to make capital expenditures to meet the needs that result from the expected growth of our business.
Off-Balance Sheet Commitments and Arrangements
We have not entered into any off-balance sheet financial guarantees or other off-balance sheet commitments to guarantee the payment obligations of any third parties. We have not entered into any derivative contracts that are indexed to our shares and classified as shareholder’s equity or that are not reflected in our consolidated financial statements. Furthermore, we do not have any retained or contingent interest in assets transferred to an unconsolidated entity that serves as credit, liquidity or market risk support to such entity. We do not have any variable interest in any unconsolidated entity that provides financing, liquidity, market risk or credit support to us or engages in leasing, hedging or product development services with us.
Contingencies
From time to time, we may become involved in litigation relating to claims arising in the ordinary course of the business. There are no claims or actions pending or threatened against us that, if adversely determined, would in our judgment have a material adverse effect on us.
Holding Company Structure
Cellyan Biotechnology Co., Ltd is a holding company with no material operations of its own. We conduct our operations primarily through our subsidiaries in Hong Kong. As a result, Cellyan Biotechnology Co., Ltd’s ability to pay dividends depends upon dividends paid by our Hong Kong Subsidiaries. If our existing Hong Kong Subsidiaries or any newly formed ones incur debt on their own behalf in the future, the instruments governing their debt may restrict their ability to pay dividends to us.
5.C. Research and Development, Patents and Licenses, etc.
See “Item 4. Information on the Company—B. Business Overview” in our previously filed 20-F.
5.D. Trend Information
Other than as disclosed elsewhere in our previously filed 20-F, we are not aware of any trends, uncertainties, demand, commitments or events that are reasonably likely to have a material effect on our net revenues and income from operations, profitability, liquidity, capital resources, or would cause reported financial information not to be indicative of future operation results or financial condition.
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5.E. Critical Accounting Estimates
The preparation of our financial information requires management to make estimates, judgments and assumptions concerning the future. Estimates, judgments and assumptions are continually evaluated and are based on historical experience and other factors, including expectations of future events that are believed to be reasonable under the circumstances. The resulting accounting estimates will, by definition, seldom equal the related actual results.
For a summary of all of our material accounting policies information, see Note 3, Note 4 and Note 5 to our audited consolidated financial statements as of March 31, 2025 and 2024 and for the years ended March 31, 2025, 2024 included elsewhere in our previously filed 20-F.
Impairment Losses
Impairment losses are based on an assessment of the investment or long-lived assets’ ability to generate future cash flows when there is evidence that these assets may be impaired. The calculation of the amount of impairment loss are based on estimates made by management when applying broad accounting principles governing the accounting for these assets. The determination of these estimates requires judgment by management. The final outcome may differ from the original estimates made by management, which may impact the carrying value of the assets which management has determined to be impaired and charged to the Company’s profit loss during the period.
Provisions
Provisions for legal claims, service warranties and make good obligations are recognized when the Company has a present legal or constructive obligation as a result of past events, it is probable that an outflow of resources will be required to settle the obligation, and the amount can be reliably estimated. Provisions are not recognized for future operating losses. Where there are a number of similar obligations, the likelihood that an outflow will be required in settlement is determined by considering the class of obligations as a whole. A provision is recognized even if the likelihood of an outflow with respect to any one item included in the same class of obligations may be small.
Provisions are measured at the present value of management’s best estimate of the expenditure required to settle the present obligation at the end of the reporting period. The discount rate used to determine the present value is a pre-tax rate that reflects current market assessments of the time value of money and the risks specific to the liability. The increase in the provision due to the passage of time is recognized as interest expense.
Income Tax
The Company has exposure to income taxes in two jurisdictions. Significant judgment is involved in determining the Company’s provision for income taxes. There are certain transactions and computations for which the ultimate tax determination is uncertain during the ordinary course of business. The Company recognizes liabilities for expected tax issues based on estimates of whether additional taxes will be due. Where the final tax outcome of these matters is different from the amounts that were initially recognized, such differences will impact the income tax and differed tax provisions in the period in which such determination is made. The carrying amount of the Company’s income tax payable as at September 30, 2025 amounted to $123,184.
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Fair Value Measurements
Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. To increase the comparability of fair value measures, the following hierarchy prioritizes the inputs to valuation methodologies used to measure fair value:
| Level 1: | Unadjusted quoted prices in active markets for identical assets or liabilities. | |
| Level 2: | Other than quoted prices that are observable in the market for the asset or liability, either directly or indirectly, such as quoted prices for similar assets or liabilities; quoted prices in markets that are not active; or model-derived valuations or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities. | |
| Level 3: | Inputs are unobservable and reflect management’s estimates of assumptions that market participants would use in pricing the asset or liability. |
The categorization of a financial instrument within the valuation hierarchy is based upon the lowest level of input that is significant to the fair value measurement. Our financial instruments consist of Level 2 and Level 3 assets.
Depreciation of property, plant and equipment and amortization of intangible assets
As described in Note 5 of the condensed consolidated financial statements, the costs of property, plant and equipment and intangible assets are depreciated or amortized on a straight-line basis over the assets’ estimated useful lives. Management estimates the useful lives of these property, plant and equipment, and intangible assets to be within 5 years. These are the common life expectancies applied in the same industry. Changes in the expected level of usage and technological developments could impact the economic useful lives and the residual values of these assets, therefore future depreciation or amortization charges could be revised.
Impairment of non-financial assets
Property, plant and equipment are tested for impairment whenever there is any objective evidence or indication that these assets may be impaired.
For the purpose of impairment testing, the recoverable amount (i.e. the higher of the fair value less cost to sell and the value-in-use) is determined on an individual asset basis unless the asset does not generate cash flows that are largely independent of those from other assets. If this is the case, the recoverable amount is determined for the cash-generating-unit (“CGU”) to which the asset belongs.
If the recoverable amount of the asset (or CGU) is estimated to be less than its carrying amount, the carrying amount of the asset (or CGU) is reduced to its recoverable amount.
The difference between the carrying amount and recoverable amount is recognized as an impairment loss in the income statement, unless the asset is carried at revalued amount, in which case, such impairment loss is treated as a revaluation decrease.
An impairment loss for an asset other than goodwill is reversed if, and only if, there has been a change in the estimates used to determine the asset’s recoverable amount since the last impairment loss was recognized. The carrying amount of this asset is increased to its revised recoverable amount, provided that this amount does not exceed the carrying amount that would have been determined (net of any accumulated amortization or depreciation) had no impairment loss been recognized for the asset in prior years.
A reversal of impairment loss for an asset other than goodwill is recognized in the income statement, unless the asset is carried at revalued amount, in which case, such reversal is treated as a revaluation increase.
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Lease
We utilize operating leases to finance our warehouse, administrative offices and employees’ dormitories. Such arrangements typically shift the risk of loss on the residual value of the assets at the end of the lease period to the lessor. In accordance with the IFRS 16, we had $0.6 million in operating lease liabilities and $0.6 million in related right-of-use assets on the balance sheet as of September 30, 2025; we had $0.5 million in operating lease liabilities and $0.5 million in related right-of-use assets on the balance sheet as of March 31, 2025. The weighted-average remaining lease term of all operating leases outstanding at September 30, 2025 and March 31, 2025 was 14.0 months and 10.7 months, respectively.
Our leases generally contain options to extend or terminate the lease. We reevaluate our leases on a regular basis to consider the economic and strategic incentives of exercising the renewal options, and how they align with our operating strategy. Therefore, substantially all the renewal option periods are not included within the lease term and the associated payments are not included in the measurement of the right-of-use asset and lease liability as the options to extend are not reasonably certain at lease commencement. Short-term leases with an initial term of 12 months or less are not recognized in the right-to-use asset and lease liability on the consolidated statements of financial position.
The lease liabilities are measured at the lease commencement date and determined using the present value of the minimum lease payments not yet paid and our incremental borrowing rate, which approximates the rate at which we would borrow, on a collateralized basis, over the term of a lease in the applicable currency environment. The interest rate implicit in the lease is generally not determinable in transactions where we are the lessee.
Allowance for expected credit losses
The calculation of the Company’s expected credit loss allowances and provisions against trade receivables, under IFRS 9 requires the Company to make a number of judgements, assumptions and estimates. The expected outcome may be different from the original estimate, and such difference will impact carrying value of trade receivables and doubtful debt expenses in the period in which such estimate has been charged.
Critical judgements include:
| ● | Determining an appropriate definition of default against which a probability of default, exposure at default and loss given default parameter can be evaluated |
| ● | Establishing the criteria for a significant increase in credit risk (SICR) |
| ● | The individual assessment of material cases and the use of judgmental adjustments made to impairment modelling processes that adjust inputs, parameters and outputs to reflect risks not captured by models |
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Key source of estimation uncertainty includes:
| ● | Base case and multiple economic scenarios (MES) assumptions, including the rate of unemployment and the rate of change of house prices, required for creation of MES scenarios and forward-looking credit parameters |
In accordance with the contracts, when the goods or services are delivered, the customers are due to pay the full amount of revenue. However, most customers may postpone paying the outstanding balance in one or two months after acceptance of the goods or services. In general, if a receivable’s ageing is more than 1 year, it is very possible to be uncollectable or with certain disputes. As such, the management will examine all balances longer than 1 year and distinguish which are in special events to be not collectable. The Company determines that any receivables with ageing longer than 2 year or any receivables identified by the management with special events to be uncollectable are deemed to be uncollectable and need to be written off.
As of September 30, 2025 and March 31, 2025, the Company has not identified any receivables that need to be written-off. As such, no allowance on expected credit loss is considered as of September 30, 2025 and March 31, 2025.
Share-based payments
The Company measures the share-based payments value, by reference to the fair value of the equity instruments granted. As no active market for the Company’s equity value, the Company used discounted cash flow analyses for valuing the fair value and made estimates about expected future cash flows and credit spreads. Interest rate spreads, credit spreads, earnings multiples and interest rate volatility are the key sources of estimation, which may takes significant impact on the value of the share-based payments.
Lease liability
The Company uses estimation in determining the incremental borrowing rate used to measure the lease liability, specific to the asset, underlying currency, and geographic location. Where the rate implicit in the lease is not readily determinable, the discount rate of the lease obligations are estimated using a discount rate similar to the Company’s specific borrowing rate. This rate represents the rate that the Company would incur to obtain the funds necessary to purchase the asset of a similar value, with similar payment terms and security in a similar environment. The Company applies judgement in determining whether the contract contains an identified asset, whether they have the right to control the asset, and the lease term.
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FAQ
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