99 Loyalty : Annual Financial Statements for year ended 31 December 2021

(FORMERLY KNOWN AS 99 TECHNOLOGY LIMITED)

(incorporated in Hong Kong with limited liability)

Directors' Report and

Financial Statements

For the year ended 31 December 2021

DIRECTORS' REPORT AND FINANCIAL STATEMENTS

FOR THE YEAR ENDED 31 DECEMBER 2021

CONTENTS

The directors of 99 Loyalty Limited ("the Company") present their annual report together with the audited consolidated financial statements for the year ended 31 December 2021.

PRINCIPAL ACTIVITIES

The Company is an investment holding company. The principal activities and other particulars of the Company's subsidiaries are set out in note 32 to the financial statements.

FINANCIAL STATEMENTS AND APPROPRIATIONS

The financial performance of the Group for the year ended 31 December 2021 and the financial position of the Group as at that date are set out in the consolidated financial statements on pages 17 to 88.

The directors do not recommend the payment of any dividend in respect of the year ended 31

December 2021.

DIRECTORS

The directors of the Company during the year and up to the date of this report were:-

Ms. Amalisia Zhang ("Ms. Zhang")

Mr. Christopher Ryan

Mr. Haoming Yu

Mr. Ross Benson Mr. Simon Woodfull Mr. Wen Tao

Mr. Henry Chen

(appointed on 27 January 2022)In accordance with the Company's articles of association, the directors retire and, being eligible, offer themselves for re-election.

DIRECTORS - Continued

The directors of the Company's subsidiaries included in the consolidated financial statements during the year and up to the date of this report were as follows:

Ms. Cheng Xiao Ling

Mr. Ding Zhi Wei

Mr. Jiang Chuan Wen Ms. Liu Pan Pan

Ms. Liu Yan

Mr. Ma Jian Guo Ms. Qian Jing Wen Mr. Sheng Yun Dong Mr. Tang Jian Bin Mr. Tong Nan

Mr. Wang Hao Qi Mr. Wen Tao Ms. Xu Yi Sha Ms. Zhang Ms. Zhang Qi

Mr. Zhang Ying Jin Mr. Zhou Hong Lin

MATERIAL INTERESTS IN TRANSACTIONS, ARRANGEMENTS OR CONTRACTS

Ms. Zhang, a beneficial shareholder in Jiangsu Ofpay E-commerce Limited, held an interest in contracts for the provision of mobile recharge services of Renminbi ("RMB") 71,181,151 with Shanghai Handpal Information Technology Co., Ltd ("Shanghai Handpal"), a subsidiary of the Company. The directors are of the opinion that these services are based on standard commercial terms, published prices and conditions similar to those offered to the major customers of the service provider.

Save as disclosed above and elsewhere in the financial statements, no contracts of significance to which the Company's holding companies or subsidiaries was a party and in which a director of the Company or an entity connected with a director had a material interest, whether directly or indirectly, subsisted during or at the end of the financial year.

EQUITY-LINKED AGREEMENTS

In November 2017, the Group obtained three equity-linked loans with principal amounts of Australian dollar ("A$") 950,000 (equivalent to RMB4,974,105), RMB6,250,000 and RMB5,000,000 (collectively "Equity-linked Loans I") respectively for general working capital purpose. Equity-linked Loans I carry a coupon rate of 10% per annum, which are paid quarterly in arrears on 17 February 2018, 17 May 2018, 17 August 2018 and 17 November 2018. The lenders of Equity-linked Loans I are entitled to unlisted call options which would provide the lenders the right to acquire a maximum of total 31,429,825 CDIs of the Company at a fixed price of A$0.1 per option at any time prior to 17 November 2020.

In November 2018, the Company and a subsidiary redeemed part of the Equity-linked Loans I at a price equal to the sum of principal amount of RMB4,056,026 upon maturity. The terms and conditions of the principal amount of outstanding Equity-linked Loans I of RMB12,168,079 ("the Modified Equity-linked Loans I") were amended and modified. The Maturity Date of Modified Equity-linked Loans I was extended by four months, from 17 November 2018 to 17 March 2019.

The coupon rate is adjusted from 10% to 13% per annum. The Call Options I were extended by six months and convertible at any time prior to 17 May 2021. Except for the above, all other terms and conditions of the Modified Equity-linked Loans I remain unchanged from the original terms.

In January 2018, the Group obtained an equity-linked loan with principal amount of A$250,000 (equivalent to RMB1,271,050) ("Equity-linked Loan II") for general working capital purpose. Equity-linked Loan II carries a coupon rate of 10% per annum, which is paid quarterly in arrears on 22 April 2018, 22 July 2018, 22 October 2018 and 22 January 2019. The lender of Equity-linked Loan II is entitled to unlisted call options which would provide the lender the right to acquire a maximum of total 3,000,000 CDIs of the Company at a fixed price of A$0.1 per option at any time prior to 22 January 2021.

In February 2018, the Group obtained an equity-linked loan with principal amount of RMB1,500,000 ("Equity-linked Loan III") for general working capital purpose. Equity-linked Loan III carries a coupon rate of 10% per annum, which is paid quarterly in arrears on 20 May 2018, 20 August 2018, 20 November 2018 and 20 February 2019. The lender of Equity-linked Loan III is entitled to unlisted call options which would provide the lender the right to acquire a maximum of total 3,000,000 CDIs of the Company at a fixed price of A$0.1 per option at any time prior to 20 February 2021.

During the year ended 31 December 2019, the Group has redeemed the entire outstanding balances of Modified Equity-linked Loans I, Equity-linked Loan II and Equity-linked Loan III at a price equal to the sum of principal amounts upon their maturity. During the year ended 31 December 2021, all unlisted call options were not exercised and were lapsed.

This is an excerpt of the original content. To continue reading it, access the original document here.