Company: GLXG
Filing Date: 2025-10-24
Form Type: 20-F
Source: 0001213900-25-102144
Chunk: 90

Company: Galaxy Payroll Group Ltd
Filing Date: 2025-10-24
Form: 20-F
Item: Item 4
Chunk 90
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 when providing such services directly to our customers was
relatively low. Therefore, our Directors plan to provide payroll outsourcing services to new customers in the PRC directly without engaging
in-country partners in the future, which is expected to increase our staff costs.

When providing our payroll
outsourcing services and employment services in the PRC through our in-country partners, our Directors understood that our end-users were
required to enter into separate service agreements with our in-country partners as required by local authorities and banks to establish
contractual relationship between the in-country partners and the end-users so as to enable our in-country partners to complete the transactions
for payment of salary, social security and housing provident funds on behalf of the end-users. To the best of our Directors’ knowledge,
save for the above, our customers have no other business relationship with our in-country partners.

IMPACT OF THE OUTBREAK OF COVID-19 ON OUR BUSINESS

In view of the outbreak of
COVID-19 around the world, our Directors have considered its impact in so far as it relates to our business operation and our financial
condition.

Impact on our business operation

Since 2013, our Group’s
operations are mainly carried out by our client account managers in Hong Kong and our employees in the PRC. We assigned our employees
to work on a rotation basis. However, our Group’s services do not require face-to-face meetings with our customers on a day to day
basis given that the nature of our Group’s business mainly involves online communications and to a lesser extent, telephone conversations
among our channel customers, end-users and in-country partners, therefore, our internal employees managed to maintain our business operation
while working from home. Our Directors confirmed that there was no material disruption to the transfer of payroll funds from our channel
customers and/or end-users to our Group and the transfer from our Group or our in-country partners to end-users’ employees.

In light of the above, our
Directors confirmed that our Group is able to discharge the obligations under all existing agreements with our customers, and therefore,
there is no impact on our long-term relationship with our customers.

Impact on our financial condition

Despite the impact of COVID-19
on the economy in general, our end-users are still required to maintain the payroll of their employees. The outbreak of COVID-19 did not
have material impact on the number of payroll transactions we made. As advised by our Directors, the travel restrictions imposed by the
governments of the PRC, Hong Kong