Financial Performance - Total revenue for the year ended December 31, 2023, was HKD 408,572,000, an increase from HKD 235,116,000 in 2022[3] - Gross profit for the year was HKD 173,456,000, compared to HKD 162,553,000 in the previous year, reflecting a gross margin improvement[3] - The net profit attributable to the owners of the company for the year was HKD 12,558,000, a significant recovery from a loss of HKD 25,676,000 in 2022[3] - Basic and diluted earnings per share for the year were HKD 0.63, compared to a loss per share of HKD 1.28 in the previous year[3] - Total comprehensive loss for the year amounted to HKD 40,236,000, compared to a loss of HKD 5,413,000 in 2022, primarily due to foreign exchange losses[4] - The company's total equity increased to HKD 239,260,000 from HKD 195,032,000, reflecting a stronger financial position[7] - The group reported a net loss attributable to shareholders of HKD 25,676,000 for the year, compared to a profit of HKD 12,558,000 in the previous year, indicating a significant decline in profitability[42] Revenue Breakdown - Total revenue for 2023 reached HKD 408,572,000, an increase of 9.7% compared to HKD 372,310,000 in 2022[22] - Revenue from Mainland China was HKD 128,401,000, a decrease of 6.9% from HKD 137,517,000 in 2022[22] - Revenue from Hong Kong decreased by 30.2% to HKD 54,721,000 from HKD 78,373,000 in 2022[22] - Revenue from Bangladesh was HKD 50,696,000, down 16.2% from HKD 60,481,000 in 2022[22] - The company reported no revenue from any major customer contributing over 10% of total revenue in 2023, compared to HKD 43,501,000 from a major customer in 2022[25] Assets and Liabilities - Non-current assets totaled HKD 189,170,000 as of December 31, 2023, slightly up from HKD 187,668,000 in 2022[6] - Current assets increased to HKD 205,897,000 from HKD 181,757,000 in the previous year, indicating improved liquidity[6] - Current liabilities decreased to HKD 135,521,000 from HKD 153,159,000, enhancing the company's net current asset position[6] - Trade receivables net value increased from HKD 42,923,000 in 2022 to HKD 44,912,000 in 2023, an increase of approximately 5%[43] - Trade payables decreased from HKD 57,323,000 in 2022 to HKD 53,572,000 in 2023, a reduction of about 6%[46] Costs and Expenses - The cost of sales increased from HKD 209,757,000 in 2022 to HKD 235,116,000 in 2023, reflecting an increase of about 12%[34] - Total other income and gains decreased from HKD 9,516,000 in 2022 to HKD 1,901,000 in 2023, representing a decline of approximately 80%[32] - The total tax expense for the year was HKD 6,218,000, slightly up from HKD 6,026,000 in 2022, marking an increase of about 3%[38] - Employee benefits expenses for the fiscal year 2023 were approximately HKD 153.7 million, compared to HKD 156.7 million in the fiscal year 2022[85] Strategic Focus and Future Plans - The company continues to focus on the production and sales of printed products, with plans for market expansion and potential new product development[10] - The group plans to enhance its competitive advantage by increasing the use and development of sustainable materials and products, with a solar power system set to be operational in its China factory by 2024[1] - The company has adopted new and revised Hong Kong Financial Reporting Standards, which did not significantly impact the financial statements[18] - The group focused on optimizing its global sales network, successfully attracting new customers in Spain and Italy during challenging market conditions[55] - The group invested more resources in developing RFID products, which saw significant sales growth and increased their share of overall business[56] Acquisitions and Investments - The group acquired 100% of the shares of Card King Limited for HKD 5,000,000 to expand its business scope[47] - The company made a significant acquisition of shares in Primway S.A.R.L for a total consideration of EUR 1,095,000 on February 24, 2023[88] - Card King Limited generated revenue of HKD 8,510,000 but incurred a loss of HKD 2,330,000 for the year ended December 31, 2022[50] Shareholder Information - The board of directors did not recommend a final dividend for the fiscal year 2023, whereas a dividend of HKD 0.20 per share was paid in the fiscal year 2022[86] - The annual general meeting for shareholders is scheduled for June 21, 2024, with eligible shareholders entitled to attend and vote[107] - Share transfer registration will be suspended from June 18 to June 21, 2024, to facilitate the annual general meeting[108] Audit and Compliance - The preliminary announcement of the group's performance for the fiscal year 2023 has been verified by Ernst & Young, aligning with the consolidated financial statements[105] - The audit committee consists of three independent non-executive directors, including Ms. Lu Meien (Chair), Mr. Li Dechang, and Mr. Lin Chuqing[104]

Financial Performance - The Group recorded revenue of approximately HK$160.3 million for the first half of 2023, a decrease of 24.7% compared to approximately HK$212.8 million in the same period last year[11]. - The loss attributable to owners of the Company was approximately HK$18.8 million in the first half of 2023, compared to a profit of approximately HK$9.3 million in the same period last year[11]. - The overall performance of the apparel industry was unsatisfactory due to reduced consumer spending on non-essential goods, particularly in North America[10]. - Other income decreased by approximately 20.5% from approximately HK$7.3 million in the first half of 2022 to HK$5.8 million for the six months ended 30 June 2023[25][33]. - Selling and distribution expenses increased by approximately 6.7% from approximately HK$27.7 million in the first half of 2022 to approximately HK$29.6 million in the same period of 2023[27][34]. - Administrative expenses rose by approximately 7.8% from approximately HK$51.1 million in the first half of 2022 to approximately HK$55.0 million in the same period of 2023[28][35]. - Reported net loss for the first half of 2023 was approximately HK$18.8 million, compared to a net profit of approximately HK$9.3 million in the first half of 2022[41][50]. - The company incurred a loss before tax of HK$18,067,000, compared to a profit of HK$13,319,000 in the prior year[129]. - The net loss for the period was HK$18,761,000, contrasting with a profit of HK$9,273,000 in the previous year[131]. - Total comprehensive loss attributable to owners of the company for the period was HK$28,615,000, compared to HK$3,025,000 in the prior year[131]. Cost and Profitability - The gross profit margin decreased to 39.3% in the first half of 2023, down from 40.5% in the first half of 2022, due to high labor costs despite a decrease in raw material and transportation costs[11]. - Gross profit for the same period was HK$62,926,000, down 26.9% from HK$86,165,000 year-over-year[129]. - The cost of sales for the six months ended June 30, 2023, was HK$97,329,000, down 23.2% from HK$126,688,000 in 2022[177]. Assets and Liabilities - As of 30 June 2023, the Group had net current assets of approximately HK$31.4 million, down from approximately HK$70.4 million as of 31 December 2022[43][51]. - Cash and cash equivalents for the Group accounted for approximately HK$32.8 million as of 30 June 2023, compared to approximately HK$62.3 million as of 31 December 2022[52]. - Interest-bearing bank borrowings amounted to approximately HK$25.2 million as of 30 June 2023, an increase from approximately HK$20.9 million as of 31 December 2022[53]. - The current ratio was approximately 1.23, down from 1.52 as of December 31, 2022[54]. - The gearing ratio increased to approximately 23.6% as of June 30, 2023, compared to 21.3% as of December 31, 2022[54]. - Total non-current assets increased to HK$192,094,000 as of June 30, 2023, up from HK$189,170,000 at December 31, 2022, reflecting a growth of 1.5%[133]. - Current assets decreased to HK$169,048,000, down 18% from HK$205,897,000 at December 31, 2022, primarily due to a reduction in cash and cash equivalents[133]. - Total equity decreased to HK$206,648,000 as of June 30, 2023, down 13.6% from HK$239,260,000 at December 31, 2022[134]. Strategic Initiatives - The Group is establishing strategic factories in China, Vietnam, and Bangladesh, with the new factory in Bangladesh nearing completion and production gradually moving there[17]. - The Group launched RFID products during the Review Period, receiving numerous inquiries from existing and potential customers, indicating a resilient sales performance amid challenging conditions[18]. - The Group is actively investing in research and development to explore new RFID products and enhance related technologies and productivity[18]. - The Group acquired a portion of the equity of Primway S.A.R.L, a French packaging company, to create synergies and expand into the international market[19]. - The Group's new factory for fast printing, Yinyibai, launched in December 2022, has enhanced its online retail channel[19]. - The Group is actively expanding its production capabilities with new factories in Bangladesh and Mexico to enhance efficiency and meet growing market demand[20][21]. - The Group plans to invest resources to expand its RFID product market, which is experiencing increasing demand[72]. - The Group plans to expand its fast printing business to the B2B level through Yinyibai, responding to increasing market demand driven by international exhibitions and conferences[77][81]. Market Conditions - The global economy is projected to grow by 2.7% in real terms in 2023, with the Group cautiously optimistic about the apparel label and trim product industries[70]. - Retail sales in Hong Kong grew by 19.6% year-on-year in June 2023, indicating signs of improvement in the retail industry[71]. - The Group's order volume shows signs of stabilization, with some customer projects delayed from early to late 2023, potentially enhancing sales performance[74]. - The Group's factory relocation in Bangladesh is nearing completion, and the Sri Lanka facility is expected to commence production within the year, positioning the Group to capitalize on market improvements[74]. Corporate Governance - The company established an Audit Committee comprising three independent non-executive Directors to oversee financial reporting and internal controls[116]. - The company has maintained compliance with corporate governance standards as outlined in the CG Code[116]. - There were no competing interests reported by the Directors or substantial shareholders for the six months ended June 30, 2023[115]. - The company has not issued any new stock options during the reporting period[103]. - The interests of directors and chief executives in shares are disclosed in accordance with the Securities and Futures Ordinance[108]. Shareholder Information - No interim dividend is recommended for the six months ended June 30, 2023[85]. - Directors and chief executives hold a total of 1,308,000,000 shares, representing approximately 65.4% of the company's total issued share capital[109]. - Charming International, a controlled corporation, holds 1,308,000,000 shares, with Mr. Barry Chan and Ms. Candy Law owning 51% and 49% respectively[112].

香港交易及結算所有限公司及香港聯合交易所有限公司對本公告的內容概不負 責，對其準確性或完整性亦不發表任何聲明，並明確表示，概不對因本公告全部 或任何部分內容而產生或因倚賴該等內容而引致的任何損失承擔任何責任。 CIRTEK HOLDINGS LIMITED 常達控股有限公司 （於開曼群島註冊成立之有限公司） （股份代號：1433） 截至2023年6月30日止六個月之 中期業績公告 常達控股有限公司（「本公司」）董事（「董事」）會（「董事會」）欣然提呈本公司及其附 屬公司（下文統稱為「本集團」）截至2023年6月30日止六個月之未經審核中期簡明 綜合業績（已由本公司審核委員會（「審核委員會」）審閱），連同2022年同期的比較 數字如下： 中期簡明綜合損益表 截至2023年6月30日止六個月 截至6月30日止六個月 2023年 2022年 （未經審核） （未經審核） 附註 千港元 千港元 收益 4 160,255 212,853 銷售成本 (97,329) (126,688) ...

Financial Performance - For the year ended December 31, 2022, the company reported revenue of approximately HK$408.6 million, representing a year-on-year increase of over 12.7%[10] - The profit for the year amounted to HK$12.6 million, despite facing significant cost pressures throughout the year[14] - The Group's revenue for FY2022 increased by approximately 12.7% year-on-year, amounting to HK$408.6 million, compared to HK$362.5 million in 2021[33] - The gross profit margin was maintained at 42.5% despite rising raw material costs and supply chain disruptions[33] - Gross profit increased by approximately HK$15.5 million or 9.8%, from approximately HK$158.0 million in FY2021 to approximately HK$173.5 million in FY2022, with the gross profit margin decreasing from 43.6% to 42.5%[54][59] - Other income and gains rose by approximately HK$2.9 million, from approximately HK$6.6 million in FY2021 to approximately HK$9.5 million in FY2022, mainly due to government subsidies received[55][60] - Selling and distribution expenses increased by approximately HK$7.6 million or 16.6%, from approximately HK$45.8 million in FY2021 to approximately HK$53.4 million in FY2022, primarily due to higher marketing and promotion expenses[56][61] - Administrative expenses increased by approximately HK$18.3 million or 19.2%, from approximately HK$95.1 million in FY2021 to HK$113.4 million in FY2022, due to an increase in headcount and operational expansion[62][67] Assets and Liabilities - Total assets as of December 31, 2022, were HK$395.1 million, while total liabilities stood at HK$155.8 million[10] - Equity attributable to owners of the company decreased to HK$239.3 million from HK$249.7 million in 2021[10] - As of December 31, 2022, the Group had net assets of approximately HK$239.3 million, down from approximately HK$249.7 million as of December 31, 2021[73] - The Group maintained cash and bank balances of approximately HK$62.3 million as of December 31, 2022, compared to approximately HK$102.1 million as of December 31, 2021[74] - Interest-bearing bank borrowings increased to approximately HK$20.9 million as of December 31, 2022, from approximately HK$13.6 million as of December 31, 2021[75] - The Group's net current assets decreased to approximately HK$70.4 million as of December 31, 2022, down by approximately HK$37.4 million from approximately HK$107.8 million as of December 31, 2021, resulting in a current ratio of 1.5 times, down from 1.8 times[77][81] - The gearing ratio increased from approximately 18.5% as of December 31, 2021, to approximately 21.3% as of December 31, 2022, mainly due to an increase in interest-bearing bank borrowings during the reporting period[78][82] Market and Operational Strategy - The company has established production factories in major apparel manufacturing countries, including China, Vietnam, and Bangladesh, and developed a sales network in over 40 major fashion markets globally[18] - New sales bases have been set up in Southern and Western Europe and Central America, with production bases launched in Turkey and India to support sales[18] - The company has successfully diversified its supply chain by shifting production activities to different countries, attracting more brands to cooperate and expanding its customer base[18] - The global market faced challenges due to geopolitical tensions, inflation, and disrupted supply chains, impacting consumer sentiment and market needs[13] - The company remains resilient and flexible amidst these challenges, leveraging its effective business strategies to navigate the difficult market conditions[14] - The apparel market and manufacturing industries globally faced downward pressure, but the company recorded a year-on-year growth in revenue[14] - The Group's strategic global arrangements include setting up factories in major apparel manufacturing countries, enhancing productivity in Bangladesh, and expanding into regions with development potential[38] Investments and Acquisitions - The Group strategically acquired 25% equity of Primway S.A.R.L in February 2023 to strengthen its market share in Europe[20] - The acquisition of Print100 Limited was completed on May 6, 2022, and the new factory in Kwai Chung was launched in December 2022, focusing on the fast printing business[43] - On January 27, 2022, the Company entered into a provisional sale and purchase agreement to acquire 100% of Print100 Limited, which was completed on May 6, 2022[102] - On February 24, 2023, the Group entered into an investment agreement to acquire shares in Primway S.A.R.L for a total consideration of EUR1,095,000[91][97] Corporate Governance - The company is committed to high standards of corporate governance, emphasizing accountability and transparency[126] - The Board consists of six Directors, including three executive Directors and three independent non-executive Directors, ensuring a balanced composition for effective management[131] - Independent non-executive Directors are appointed for a term of three years, subject to retirement by rotation as per the company's Articles of Association[134] - The Nomination Committee, primarily composed of independent non-executive Directors, is responsible for recommending candidates for directorship[135] - The Board is responsible for formulating the Group's strategy, overseeing management, and ensuring sound internal control and risk management systems are in place[138] - Key decisions are fully discussed at board meetings, with all directors encouraged to contribute actively and express differing views[139] - The Company emphasizes the importance of internal control and risk management to safeguard assets and shareholder interests[158] Shareholder Communication and Dividends - The Company has adopted a Dividend Policy allowing the declaration and distribution of dividends at the Board's discretion, with interim dividends determined as appropriate[198] - The Company recognizes the importance of communication with Shareholders and has adopted a Shareholders Communication Policy to provide timely information and enable active engagement[199] - The AGM serves as a platform for communication between the Board and Shareholders, with key figures present to address questions raised by Shareholders[200] - The final dividend recommended by the Board is HK$0.20 per ordinary share, down from HK$0.25 in 2021[33]

香港交易及結算所有限公司及香港聯合交易所有限公司對本公告的內容概不負 責，對其準確性或完整性亦不發表任何聲明，並明確表示，概不對因本公告全部 或任何部份內容而產生或因倚賴該等內容而引致的任何損失承擔任何責任。 CIRTEK HOLDINGS LIMITED 常達控股有限公司 （於開曼群島註冊成立之有限公司） （股份代號：1433） 截至2022年12月31日止年度之末期業績 以及預期動用所得款項的最新時間表 常達控股有限公司（「本公司」）董事（「董事」）會（「董事會」）謹此宣佈本公司及其附屬 公司（統稱為「本集團」）截至2022年12月31日止年度（「報告期」）之綜合業績如下： 綜合損益表 截至2022年12月31日止年度 附註 2022年 2021年 千港元 千港元 收益 3 408,572 362,513 銷售成本 (235,11 6) (204,503) 毛利 173,456 158,010 其他收入及收益 3 9,516 6,550 銷售及分銷開支 (53,435) (45,790) 行政開支 (113,424) (95,143) 其他經營收入╱（開支）淨額 4,866 (120) 融資成本 5 (2 ...

Financial Performance - For the six months ended June 30, 2022, the Group recorded revenue of approximately HK$212.8 million, an increase of 36.1% compared to HK$156.4 million in the same period last year[9]. - Profit attributable to the owners of the Company increased approximately four times to about HK$9.3 million, with a profit margin of 4.4%, compared to HK$2.1 million and 1.4% in the first half of 2021[9]. - Reported net profit for the first half of 2022 was approximately HK$9.3 million, an increase from approximately HK$2.1 million in the first half of 2021, reflecting improved financial performance due to stable business development across multiple countries[28]. - Profit before tax increased significantly to HK$13,319,000, compared to HK$3,804,000 in the previous year, marking a growth of 250%[96]. - Basic earnings per share for the period were HK$0.46, compared to HK$0.11 for the same period in 2021, indicating a significant improvement in profitability[96]. - The Group's profit before tax for the six months ended June 30, 2022, was HK$9,273,000, compared to HK$2,136,000 for the same period in 2021, representing a significant increase[162]. Revenue Growth - The Group's unaudited consolidated revenue for the six months ended June 30, 2022, was approximately HK$212.8 million, representing a 36.1% increase compared to approximately HK$156.4 million in the same period of 2021[20][23]. - Revenue from Mainland China was HK$73,164,000, up 32% from HK$55,410,000 in the previous year[125]. - The Group's revenue from the sale of printing products was HK$212,853,000, with all revenue derived from this segment[135]. - The Group's geographical revenue distribution included HK$40,945,000 from Hong Kong, up from HK$30,158,000 in the previous year[125]. - The total revenue from Bangladesh, Vietnam, the United States, and other countries was HK$34,603,000, compared to HK$31,533,000 in the prior year[125]. Cost and Expenses Management - The Group implemented stringent cost control measures and optimized production capacity to mitigate the impact of rising raw material prices and labor costs[9]. - Selling and distribution expenses rose by approximately 24.5%, from approximately HK$22.2 million in the first half of 2021 to approximately HK$27.7 million in the first half of 2022, driven by increased marketing consultancy fees and salaries[26]. - Administrative expenses increased by approximately 13.8%, from approximately HK$44.8 million in the first half of 2021 to approximately HK$51.1 million in the same period of 2022, mainly due to rising labor costs and operational costs of expanding new subsidiaries[26]. - The total tax charge for the period was HK$4,046,000, compared to HK$1,668,000 in the prior period, representing an increase of approximately 142%[154]. Market Expansion and Client Acquisition - The Group successfully expanded its sales network, with Vietnam showing the highest growth rate in sales compared to other markets during the Review Period[10]. - The Group acquired two new clients in the Chinese market and secured numerous domestic brand clients, actively expanding its local market presence[10]. - Sales offices in emerging markets such as Mexico and Spain have commenced operations, with plans to establish new production bases in these regions in the second half of the year[10]. - In May 2022, the Group completed the acquisition of Print100 Limited, which is expected to enhance brand reputation and diversify income sources[16][18]. Sustainability and Innovation - The Group's strategic focus on green consumerism aligns with the increasing awareness among international apparel brands, driving new development momentum in the industry[8]. - The Group launched more environmentally friendly products made from recyclable materials to meet market demands and support ESG initiatives[15][17]. - The Group is committed to sustainability by using environmentally friendly materials and inks, including 100% water-based ink for heat transfer labels[45]. Financial Position and Assets - As of 30 June 2022, the Group had net current assets of approximately HK$98.7 million, down from approximately HK$107.8 million as of 31 December 2021[28]. - Cash and cash equivalents as of 30 June 2022 were approximately HK$95.5 million, a decrease from approximately HK$102.1 million as of 31 December 2021[30]. - Interest-bearing bank borrowings were approximately HK$11.5 million as of 30 June 2022, down from approximately HK$13.6 million as of 31 December 2021[30]. - The gearing ratio was approximately 2.9% as of 30 June 2022, down from approximately 3.4% as of 31 December 2021, indicating a solid financial position[30]. - Non-current assets totaled HK$170,584,000 as of June 30, 2022, up from HK$164,658,000 at the end of 2021, indicating a growth of 3.7%[100]. Corporate Governance - The Company has complied with all provisions of the Corporate Governance Code during the review period[47]. - The Company confirmed compliance with the corporate governance code as per the Listing Rules throughout the reporting period[56]. - The Group maintained high standards of corporate governance practices and procedures[56]. Employee and Management - Employee benefit expenses for the Reporting Period amounted to approximately HK$73.6 million, an increase from approximately HK$63.6 million in the same period of 2021[32]. - The Group had a total of 1,146 employees as of 30 June 2022, compared to 1,000 employees as of 30 June 2021[32]. - The compensation for key management personnel for the six months ended June 30, 2022, was HK$2,850,000, a decrease from HK$3,547,000 in the same period of 2021[190].

Financial Performance - Revenue for FY2021 reached HK$362.5 million, a 39.8% increase from HK$259.3 million in FY2020[9] - Profit for the year attributable to owners of the Company soared to HK$15.0 million, representing an increase of over 809% compared to HK$1.6 million in FY2020[9] - The Group's revenue for FY2021 exceeded pre-COVID-19 levels, with a year-on-year increase of over 50% in key markets such as China, Vietnam, and Bangladesh[15] - Net profit for FY2021 surged over 809% to approximately HKD 15 million compared to the same period in 2020[15] - The gross profit margin decreased from approximately 50.2% in FY2020 to approximately 43.6% in FY2021, attributed to a 58.4% increase in cost of sales[30] - The cost of sales rose by approximately HK$75.4 million, representing an increase of 58.4%, from approximately HK$129.1 million in FY2020 to approximately HK$204.5 million in FY2021, driven by increased sales volume and procurement prices[48] - The Group's gross profit increased by approximately HK$27.8 million or 21.4%, from approximately HK$130.2 million in FY2020 to approximately HK$158.0 million in FY2021, with the gross profit margin decreasing from approximately 50.2% to 43.6%[48] Assets and Liabilities - Total assets increased to HK$401.0 million, up from HK$361.7 million in FY2020, reflecting a growth of 10.5%[9] - The total liabilities rose to HK$151.4 million, compared to HK$125.6 million in the previous year, indicating a 20.6% increase[9] - The equity attributable to owners of the Company was HK$249.7 million, up from HK$236.1 million in FY2020, marking a growth of 5.1%[9] - As at 31 December 2021, the Group had net assets amounted to approximately HK$249.7 million, an increase from approximately HK$236.1 million as at 31 December 2020[53] - The Group's cash and bank balances decreased to approximately HK$102.1 million as at 31 December 2021 from approximately HK$114.7 million as at 31 December 2020[53] - The Group's interest-bearing bank borrowings decreased from approximately HK$21.2 million as at 31 December 2020 to approximately HK$13.6 million as at 31 December 2021[53] Market Expansion and Strategy - The Group expanded its market presence across over 40 major fashion markets globally, enhancing its sales network[12] - New sales offices were established in Turkey, Guatemala, and Mexico in the second half of 2021 to capture emerging market opportunities[18] - The Group launched its own RFID supply chain solution in 2021, receiving positive market feedback[20] - A new factory was opened in India in the second half of 2021, alongside the operational commencement of a factory in Turkey, enhancing global business expansion[19] - The Group aims to diversify its income sources and mitigate market risks through new business sites and collaborations[21] - The Group's production bases are strategically located in China, Vietnam, and Bangladesh to meet the demand for express delivery from apparel clients[19] Corporate Governance - The Company has complied with all applicable code provisions of the Code of Corporate Governance during the reporting period, except for certain deviations related to the composition of the Nomination Committee[68] - The Board is composed of six Directors, with three executive Directors and three independent non-executive Directors, ensuring a balanced composition for effective management[70] - The Company has adopted the Model Code for Securities Transactions by Directors, ensuring compliance with required standards since the Listing Date (March 12, 2020) with no incidents of non-compliance reported[91] - The Company emphasizes internal control and risk management, with the Board responsible for the effectiveness of the internal control system[99] - The Audit Committee reviews the Group's control environment and risk assessment processes, ensuring effective management of business and control risks[93] Employee and Management - As of December 31, 2021, the Company had a total of 1,050 employees, an increase from 990 employees in 2020[57] - The employee benefit expense for FY2021 was approximately HK$136.9 million, up from approximately HK$98.9 million in FY2020[57] - The management team is committed to driving the Group's growth and operational efficiency through strategic initiatives[131] - The company has a strong management team with members holding significant experience in finance and operations, including Mr. Chew Yong Hock as Sales and Marketing Director since July 2012[145] Shareholder Information - The Board recommended a final dividend of HK$0.25 per ordinary share for FY2021, subject to approval at the 2022 AGM[122] - The Company has adopted a dividend policy allowing for the declaration and distribution of dividends at the Board's discretion, subject to shareholder approval for final dividends[116] - Shareholders can requisition an Extraordinary General Meeting (EGM) if they hold at least 10% of the paid-up capital, and the meeting must be held within two months of the requisition[118] - The Company ensures timely communication with shareholders, providing information through its website and during the Annual General Meeting (AGM)[116] Audit and Financial Reporting - The consolidated financial statements provide a true and fair view of the Group's financial position as of December 31, 2021, in accordance with HKFRSs[179] - The audit included procedures designed to respond to the risks of material misstatement of the consolidated financial statements[180] - The Audit Committee reviewed the financial statements for the year ended December 31, 2021, focusing on business highlights and compliance with accounting standards and Listing Rules requirements[110] - The Group accounted for the impairment on trade receivables using an expected credit loss (ECL) approach, which involved significant judgement and subjective assumptions[182] Sustainability and Innovation - The Group has launched more eco-products made from recyclable materials to align with sustainability goals[35] - The Group's RFID products continued to be the fastest-growing segment, driven by increased retail and inventory management needs[35] - The management team is dedicated to fostering innovation and exploring new technologies to improve operational efficiency and service delivery[145]

Financial Performance - For the six months ended June 30, 2021, the Group's revenue increased by approximately 37.2% to approximately HK$156.4 million compared to HK$114.0 million in the first half of 2020[9]. - Gross profit rose by approximately 14.5% to approximately HK$67.1 million, with a gross profit margin of approximately 42.9%, down from 51.4% in the first half of 2020[9]. - The Group recorded a profit attributable to owners of approximately HK$2.1 million, a turnaround from a loss of approximately HK$11.8 million in the first half of 2020[9]. - Reported net profit for the first half of 2021 was approximately HK$2.1 million, a significant improvement from a net loss of approximately HK$11.8 million in the first half of 2020, attributed to improved demand as the COVID-19 pandemic came under control[36]. - The net profit for the period was HK$2,136,000, compared to a net loss of HK$11,838,000 in the same period last year[110]. - Profit before tax for the period was HK$3,804,000, a significant recovery from a loss of HK$10,602,000 in the prior year[108]. - Earnings per share for the period was HK$0.11, compared to a loss per share of HK$0.66 in the same period last year[108]. Revenue Breakdown - Revenue for the six months ended June 30, 2021, was HK$156,419,000, an increase of 37.2% compared to HK$114,008,000 for the same period in 2020[108]. - Revenue from external customers for the six months ended June 30, 2021, was HK$156,419,000, an increase of 37.2% compared to HK$114,008,000 for the same period in 2020[197]. - Revenue from Mainland China was HK$55,410,000, up 79.8% from HK$30,879,000 in 2020[197]. - Revenue from Bangladesh increased by 47.5% to HK$17,093,000 from HK$11,579,000 in 2020[197]. - The geographical revenue breakdown indicates a decline in revenue from Hong Kong, which was HK$30,158,000 compared to HK$33,284,000 in 2020, a decrease of 9.5%[197]. - Other regions contributed HK$31,533,000 in revenue, an increase from HK$21,978,000 in 2020, reflecting a growth of 43.3%[197]. Cost and Expenses - Selling and distribution expenses increased by approximately 28.0% from approximately HK$17.4 million in the first half of 2020 to approximately HK$22.2 million in the first half of 2021, primarily due to higher marketing consultancy fees and salaries related to sales personnel[24][30]. - Administrative expenses rose by approximately 7.4% from approximately HK$41.7 million in the first half of 2020 to approximately HK$44.8 million in the same period of 2021, mainly due to increased labor costs and operating costs for new subsidiaries[25][31]. - Taxation expenses for the first half of 2021 amounted to approximately HK$1.7 million, representing an increase of approximately 35.0% from approximately HK$1.2 million in the first half of 2020[28][34]. - Finance costs decreased by approximately 5.0% from approximately HK$1.3 million in the first half of 2020 to approximately HK$1.2 million in the first half of 2021, as no new bank borrowings occurred since December 31, 2020[27][33]. Assets and Liabilities - As of June 30, 2021, the Group had net current assets of approximately HK$118.1 million, an increase from approximately HK$111.7 million as of December 31, 2020[37]. - The current ratio remained stable at approximately 2.18 times as of June 30, 2021, compared to approximately 2.10 times as of December 31, 2020[40]. - The gearing ratio decreased to approximately 4.9% as of June 30, 2021, down from approximately 5.9% as of December 31, 2020, reflecting a solid financial position[40]. - Cash and cash equivalents amounted to approximately HK$99.4 million as of June 30, 2021, down from approximately HK$114.7 million as of December 31, 2020[37]. - Total current assets as of June 30, 2021, amounted to HK$218,270,000, an increase from HK$213,436,000 at the end of 2020[116]. - Total non-current assets were HK$140,331,000, down from HK$148,256,000 at the end of 2020[116]. - The company reported total assets less current liabilities of HK$258,425,000, slightly down from HK$259,973,000 in the previous period[116]. - Net current assets increased to HK$118,094,000 from HK$111,717,000 at the end of 2020[116]. Operational Developments - The Group established a sales office in Italy in March 2021, successfully developing a new local customer base[10]. - The Group is constructing a new three-storey factory in Bangladesh with a gross floor area of approximately 10,600 square meters, expected to commence operations in early 2022[14]. - The Group plans to expand its global business presence by establishing sales offices and production bases in regions with development potential, including Eastern Europe and Central and South America[53]. - A new factory in Bangladesh is expected to commence operations in early 2022, providing greater flexibility in resource deployment to meet customer needs[53]. - The Group has increased investment in RFID technology and expanded its business into RFID product solutions, targeting small to medium-sized customers across over 40 markets[54]. Market and Strategic Focus - The Group is focused on expanding its global sales network to capture market recovery opportunities post-pandemic[10]. - The ongoing COVID-19 pandemic has significantly altered consumer habits, prompting apparel brands to adopt digital transformation strategies[8]. - The Group's proactive approach in leveraging global business resources contributed to a slight turnaround in results for the second quarter of 2021[9]. - Despite rising raw material prices and labor costs, effective cost control measures helped maintain a respectable gross profit margin[9]. - New orders for the first half of 2021 increased compared to the same period last year, demonstrating the Group's strength in maintaining production efficiency and product quality amid ongoing pandemic challenges[52]. Corporate Governance - The company complied with all corporate governance codes as per the Hong Kong Stock Exchange regulations[72]. - The Company maintained high standards of corporate governance practices throughout the reporting period[71]. - The Audit Committee reviewed the unaudited interim condensed consolidated financial information for the six months ended June 30, 2021, ensuring compliance with applicable accounting standards[101]. - There were no competing interests reported for the Directors or substantial shareholders for the six months ended June 30, 2021[99]. Shareholder Information - The Board of Directors does not recommend the payment of an interim dividend for the six months ended June 30, 2021[69]. - The company had 2,000,000 share options outstanding under the Share Option Scheme, with an exercise price of HK$0.057, valid until September 14, 2025[80]. - Charming International holds 1,404,000,000 shares, representing approximately 70.2% of the total issued share capital of the Company[94]. - Mr. Barry Chan and Ms. Candy Law own 51% and 49% of Charming International, respectively, which holds the aforementioned shares[95]. - The Company maintained a public float of no less than 25% as required under the Listing Rules as of the report date[98].

[Corporate Information](index=2&type=section&id=Corporate%20Information) [Corporate Information](index=2&type=section&id=2%20Corporate%20Information) This section lists the basic corporate information of Cirtek Holdings Limited and its subsidiaries - The Board of Directors consists of six members, including three executive directors (Mr Chan Sze Ming, Ms Lo Miu Lan, Mr Chan Tsz Fung) and three independent non-executive directors (Mr Lam Chor Ki, Mr Li Tak Cheong, Dr Wong Chi Wing)[17](index=17&type=chunk) - The principal bankers include The Hongkong and Shanghai Banking Corporation Limited and Dah Sing Bank, Limited, and the auditor is Ernst & Young[19](index=19&type=chunk) - The company's stock code is **1433**, and its website is http://www.cirtek.com[19](index=19&type=chunk) [Financial Highlights](index=2&type=section&id=Financial%20Highlights) [Financial Highlights](index=4&type=section&id=4%20Financial%20Highlights) This section outlines the consolidated performance and financial position of Cirtek Holdings Limited over the past five years Consolidated Results (HK$'000) | Indicator | 2020 | 2019 | 2018 | 2017 | 2016 | | :--- | :--- | :--- | :--- | :--- | :--- | | Revenue | 259,314 | 352,937 | 371,883 | 305,021 | 241,628 | | Profit for the year | 1,647 | 26,482 | 33,735 | 25,748 | 19,556 | | Profit for the year attributable to owners of the Company | 1,647 | 25,331 | 31,940 | 24,208 | 19,229 | Financial Position (HK$'000) | Indicator | 2020 | 2019 | 2018 | 2017 | 2016 | | :--- | :--- | :--- | :--- | :--- | :--- | | Total assets | 361,692 | 286,400 | 270,846 | 235,683 | 172,639 | | Total liabilities | 125,566 | 142,430 | 154,130 | 151,770 | 99,509 | | Equity attributable to owners of the Company | 236,126 | 143,970 | 116,716 | 83,913 | 73,130 | [Chairman's Statement](index=2&type=section&id=Chairman's%20Statement) [Chairman's Statement](index=6&type=section&id=5%20Chairman's%20Statement) The Chairman's statement reviews the severe impact of the 2020 global pandemic on the Group's business and outlines future strategies - The 2020 global pandemic severely impacted the supply chain and consumer market, leading to delays in some customer orders and product shipments[24](index=24&type=chunk)[27](index=27&type=chunk) - The Group successfully **turned a first-half loss into a full-year profit** through strategic plant layout, flexible capacity allocation, and strict cost control[25](index=25&type=chunk)[28](index=28&type=chunk) - New high-margin products drove up the gross profit margin, and **RFID product sales soared 1.3 times**, indicating successful product development[25](index=25&type=chunk)[26](index=26&type=chunk)[28](index=28&type=chunk) - The Board of Directors recommended a **final dividend of HK0.075 cents per ordinary share** to reward shareholder support[25](index=25&type=chunk)[28](index=28&type=chunk) - Looking ahead, the Group plans to expand its sales markets, construct a new plant in Bangladesh (expected to commence production by the end of 2021), and explore opportunities in other regions[31](index=31&type=chunk)[32](index=32&type=chunk)[35](index=35&type=chunk)[36](index=36&type=chunk) - The Group will increase investment in the development of eco-friendly products and RFID/NFC technology to diversify its product portfolio and revenue streams[33](index=33&type=chunk)[36](index=36&type=chunk) [Management Discussion and Analysis](index=2&type=section&id=Management%20Discussion%20and%20Analysis) [Management Discussion and Analysis](index=8&type=section&id=7%20Management%20Discussion%20and%20Analysis) This section details the Group's 2020 operating results, strategic responses to the pandemic, and outlook for 2021 Key Financial Indicators for 2020 | Indicator | 2020 (HK$'000) | 2019 (HK$'000) | Y-o-Y Change | | :--- | :--- | :--- | :--- | | Revenue | 259,300 | 352,900 | -26.5% | | Gross Profit | 130,200 | 174,800 | -25.5% | | Gross Profit Margin | 50.2% | 49.5% | +0.7 p.p. | | Profit attributable to owners of the Company | 1,600 | 25,300 | -93.5% | - The COVID-19 pandemic led to reduced global market demand, particularly for apparel labels and decorative products in the first half, but orders began to rebound in the second half[39](index=39&type=chunk)[40](index=40&type=chunk)[42](index=42&type=chunk)[43](index=43&type=chunk) - The Group implemented strict epidemic prevention measures, rapidly resumed work, and adopted cost control measures such as a job rotation system[41](index=41&type=chunk)[44](index=44&type=chunk) - Construction of the new Bangladesh plant began in October 2020, with a total GFA of approximately 10,600 sq.m., expected to commence production by the end of 2021[46](index=46&type=chunk)[49](index=49&type=chunk) - **RFID product sales volume reached 15.7 million pieces, a year-on-year increase of 130%**, contributing HK$8.2 million in revenue, and Cirtek Link (Shenzhen) Limited was established to focus on RFID technology R&D[47](index=47&type=chunk)[50](index=50&type=chunk) - In early 2021, the Group won top honors in the "Most Popular RFID Enterprise Award" and the "Excellent Solution Award," affirming its capabilities in RFID technology R&D and innovation[54](index=54&type=chunk)[56](index=56&type=chunk) - Future plans include consolidating relationships with international apparel brands, adding sales offices in potential customer locations (especially Europe), and exploring manufacturing possibilities in other parts of Asia, Eastern Europe, and South America[53](index=53&type=chunk)[56](index=56&type=chunk) - The Group will continue to invest in the R&D and production of eco-friendly products to enrich its product portfolio and support environmental protection[54](index=54&type=chunk)[56](index=56&type=chunk) [Financial Review](index=11&type=section&id=Financial%20Review) This section provides a detailed analysis of the Group's financial performance in 2020 and key financial indicators Comparison of Key Financial Data for 2020 (HK$'000) | Indicator | 2020 | 2019 | Change Amount | Change Percentage | | :--- | :--- | :--- | :--- | :--- | | Revenue | 259,300 | 352,900 | (93,600) | -26.5% | | Cost of Sales as % of Total Revenue | 49.8% | 50.5% | -0.7 p.p. | - | | Gross Profit Margin | 50.2% | 49.5% | +0.7 p.p. | - | | Gross Profit | 130,200 | 174,800 | (44,600) | -25.5% | | Other Income and Gains | 9,700 | 5,700 | 4,000 | +70.2% | | Selling and Distribution Expenses | 36,500 | 44,100 | (7,600) | -17.3% | | Administrative Expenses | 78,200 | 83,800 | (5,600) | -6.6% | | Other Expenses | 7,400 | 900 | 6,500 | +722.2% | | Finance Costs | 2,400 | 2,700 | (300) | -12.9% | | Listing Expenses | 10,600 | 11,000 | (400) | -3.6% | | Tax Expense | 3,100 | 11,400 | (8,300) | -72.5% | | Profit for the year | 1,600 | 26,500 | (24,900) | -93.8% | - The increase in other income and gains was mainly due to a government grant of approximately **HK$3.7 million** from the Hong Kong government's COVID-19-related "Employment Support Scheme"[60](index=60&type=chunk) - The significant increase in other expenses was primarily due to increased impairment of trade receivables, exchange losses, and fair value losses on financial assets at FVTPL[62](index=62&type=chunk) Liquidity and Capital Resources for 2020 (HK$'000) | Indicator | 2020 | 2019 | Change Amount | Change Percentage | | :--- | :--- | :--- | :--- | :--- | | Net Assets | 236,100 | 144,000 | 92,100 | +63.9% | | Cash and Bank Balances | 114,700 | 43,800 | 70,900 | +161.9% | | Interest-bearing Bank Borrowings | 21,200 | 20,700 | 500 | +2.4% | | Total Banking Facilities | 67,900 | - | - | - | | Utilised Banking Facilities | 23,900 | - | - | - | | Unutilised Banking Facilities | 44,000 | - | - | - | | Property, Plant and Equipment | 91,000 | 76,600 | 14,400 | +18.8% | | Net Current Assets | 111,700 | 41,500 | 70,200 | +169.2% | | Current Ratio | 2.1 times | 1.4 times | +0.7 times | - | | Gearing Ratio | 23.1% | 43.5% | -20.4 p.p. | - | | Goodwill | 1,500 | - | - | - | | Intangible Assets | 300 | - | - | - | - Cash and bank balances were mainly denominated in HKD (approx **HK$85.9 million**), USD (approx **HK$20.5 million**), and RMB (approx **HK$4.9 million**) to support core operational needs[64](index=64&type=chunk) - The increase in property, plant and equipment was mainly due to the acquisition of plant and machinery of approximately **HK$29 million** in 2020 to strengthen market position and increase market share[64](index=64&type=chunk) - The Group recognised goodwill of approximately **HK$1.5 million** and intangible assets of approximately **HK$0.3 million** from a business combination in December 2020[64](index=64&type=chunk) - The treasury policy adopts a prudent financial management approach, maintaining a healthy liquidity position and centralising treasury activities, with cash primarily held in major licensed banks in Hong Kong and denominated in HKD[67](index=67&type=chunk)[68](index=68&type=chunk)[71](index=71&type=chunk)[75](index=75&type=chunk) - The Group currently does not use derivative financial instruments to hedge against foreign exchange risk, and the Board will closely monitor exchange rate and government policy changes[69](index=69&type=chunk)[72](index=72&type=chunk)[73](index=73&type=chunk) - As of December 31, 2020, the Group had **no significant contingent liabilities**[74](index=74&type=chunk) - There were no significant events after the reporting period that require disclosure[74](index=74&type=chunk) [Employees and Remuneration Policies](index=15&type=section&id=Employees%20and%20Remuneration%20Policies) This section outlines the Group's employee numbers and remuneration policies Employee and Remuneration Data (HK$'000) | Indicator | 2020 | 2019 | | :--- | :--- | :--- | | Total Employees | 990 | 1,075 | | Employee Benefit Expenses (excluding directors' remuneration) | 98,900 | 116,500 | - Remuneration packages are generally determined by reference to market terms and individual qualifications, with salaries and wages reviewed annually based on performance appraisals and other relevant factors[78](index=78&type=chunk) [Final Dividend and Date of Annual General Meeting](index=15&type=section&id=Final%20Dividend%20and%20Date%20of%20Annual%20General%20Meeting) The Board recommends a final dividend of HK0.075 cents per ordinary share for the year ended December 31, 2020, subject to approval at the AGM - The Board recommends the payment of a final dividend of **HK0.075 cents per ordinary share** for the financial year ended December 31, 2020 (2019: Nil)[78](index=78&type=chunk) - The final dividend is subject to approval at the upcoming Annual General Meeting on Friday, June 18, 2021[78](index=78&type=chunk) - The proposed final dividend, if approved, is expected to be paid on Friday, July 9, 2021, to shareholders on the register of members on Friday, June 25, 2021[78](index=78&type=chunk) [Significant Investments and Future Plans for Material Investments and Capital Assets](index=15&type=section&id=Significant%20Investments%20and%20Future%20Plans%20for%20Material%20Investments%20and%20Capital%20Assets) The Group held no significant investments during the year and has no definite future plans for material investments or capital assets - Other than as disclosed in the Prospectus and this annual report, the Group did not hold any significant investments in the equity of any other company during the year[78](index=78&type=chunk) - The Group also had no definite future plans for material investments and capital assets during the year[78](index=78&type=chunk) [Pledge of Assets](index=15&type=section&id=Pledge%20of%20Assets) Details of the Group's assets pledged for bank loans are set out in Note 27 to the financial statements in this annual report - Details of the Group's assets pledged for bank loans are set out in Note 27 to the financial statements in this annual report[78](index=78&type=chunk) [Material Acquisitions and Disposals of Subsidiaries, Associates and Joint Ventures](index=15&type=section&id=Material%20Acquisitions%20and%20Disposals%20of%20Subsidiaries,%20Associates%20and%20Joint%20Ventures) The Group had no material acquisitions or disposals of subsidiaries, associates, or joint ventures during the year ended December 31, 2020 - Other than as disclosed in this annual report, the Group had no material acquisitions or disposals of subsidiaries, associates or joint ventures during the year ended December 31, 2020[78](index=78&type=chunk) [Corporate Governance Report](index=2&type=section&id=Corporate%20Governance%20Report) [Corporate Governance Report](index=16&type=section&id=15%20Corporate%20Governance%20Report) This section describes the company's commitment to maintaining high standards of corporate governance practices and procedures - The company has complied with all applicable code provisions of the Corporate Governance Code as set out in Appendix 14 to the Listing Rules of The Stock Exchange of Hong Kong Limited since its listing date on March 12, 2020[81](index=81&type=chunk)[87](index=87&type=chunk) - The Board consists of six directors, including three executive directors and three independent non-executive directors, all of whom possess appropriate professional qualifications and have confirmed their independence[82](index=82&type=chunk)[84](index=84&type=chunk)[88](index=88&type=chunk) - The Board is responsible for formulating the Group's strategy, overseeing business management, monitoring operational and financial performance, and ensuring the effectiveness of internal control and risk management systems[92](index=92&type=chunk)[95](index=95&type=chunk) - All directors are covered by directors' and officers' liability insurance and are encouraged to participate in continuous professional development training[95](index=95&type=chunk)[101](index=101&type=chunk)[104](index=104&type=chunk) - The Remuneration Committee and Nomination Committee are both composed of a majority of independent non-executive directors and are responsible for reviewing and recommending remuneration policies and director selection[123](index=123&type=chunk)[125](index=125&type=chunk)[127](index=127&type=chunk)[128](index=128&type=chunk)[130](index=130&type=chunk)[133](index=133&type=chunk) - The Audit Committee, comprising three independent non-executive directors, is responsible for reviewing the effectiveness of internal controls, risk management systems, financial information, and compliance[142](index=142&type=chunk) Auditor's Remuneration (HK$'000) | Service Type | 2020 | 2019 | | :--- | :--- | :--- | | Audit services | 2,152 | 1,611 | | Non-audit services (Tax services) | 226 | 608 | - The company has adopted a dividend policy and a shareholder communication policy to ensure timely information dissemination and encourage shareholder participation[146](index=146&type=chunk)[147](index=147&type=chunk)[151](index=151&type=chunk)[152](index=152&type=chunk) - The company's website features an investor relations section providing corporate information, press releases, and financial highlights to facilitate communication with shareholders and investors[160](index=160&type=chunk)[163](index=163&type=chunk) [Report of the Directors](index=2&type=section&id=Report%20of%20the%20Directors) [Report of the Directors](index=27&type=section&id=26%20Report%20of%20the%20Directors) This section reports the company's principal business as investment holding and the Group's activities in the production and sale of apparel labels and decorative products - The company's principal business is investment holding, and the Group is principally engaged in the production and sale of apparel labels and decorative products[166](index=166&type=chunk)[169](index=169&type=chunk) - The Group's financial risk management objectives and policies are set out in Note 39 to the financial statements[168](index=168&type=chunk) - During the year ended December 31, 2020, the company declared a special dividend of **HK$10 million**, which was paid to the then shareholders in February 2020 prior to listing[168](index=168&type=chunk) - The directors have recommended a final dividend of **HK0.075 cents per ordinary share**, or approximately HK$1.5 million, for 2020, subject to shareholder approval at the 2021 AGM[168](index=168&type=chunk) [Use of Proceeds from the Company's Initial Public Offering](index=28&type=section&id=Use%20of%20Proceeds%20from%20the%20Company's%20Initial%20Public%20Offering) This section discloses the net proceeds from the IPO were approximately HK$69.9 million, with HK$4.315 million utilized as of December 31, 2020 Use of Net Proceeds from Initial Public Offering (HK$'000) | Use | % of Net Proceeds | Net Proceeds | Amount Utilised | Remaining Amount | Expected Utilisation Time | | :--- | :--- | :--- | :--- | :--- | :--- | | Construction of new Bangladesh plant and purchase of machinery | 98.4% | 68,800 | 3,215 | 65,585 | On or before December 31, 2022 | | General working capital | 1.6% | 1,100 | 1,100 | 0.0 | N/A | | **Total** | **100%** | **69,900** | **4,315** | **65,585** | | - The net proceeds from the listing were approximately **HK$69.9 million**[172](index=172&type=chunk) - The construction of the new Bangladesh plant was delayed until October 2020 due to the COVID-19 outbreak and is expected to be completed within 365 calendar days from the commencement date[174](index=174&type=chunk)[178](index=178&type=chunk) [Summary Financial Information](index=28&type=section&id=Summary%20Financial%20Information) A summary of the Group's financial information for the past five financial years is set out on page 4 of this annual report - A summary of the Group's financial information for the past five financial years is set out on page 4 of this annual report[176](index=176&type=chunk)[180](index=180&type=chunk) [Property, Plant and Equipment](index=28&type=section&id=Property,%20Plant%20and%20Equipment) Details of movements in the Group's property, plant and equipment during the year are set out in Note 14 to the financial statements - Details of movements in the Group's property, plant and equipment during the year are set out in Note 14 to the financial statements[177](index=177&type=chunk)[181](index=181&type=chunk) [Share Capital](index=29&type=section&id=Share%20Capital) Details of movements in the company's share capital during the year are set out in Note 29 to the financial statements - Details of movements in the company's share capital during the year are set out in Note 29 to the financial statements[183](index=183&type=chunk) [Directors' Interests in Competing Businesses](index=29&type=section&id=Directors'%20Interests%20in%20Competing%20Businesses) No director had an interest in any business which competes or is likely to compete, either directly or indirectly, with the business of the Group - During the year, other than the business of the Group, no director had an interest in any business which competes or is likely to compete, either directly or indirectly, with the business of the Group pursuant to Rule 8.10 of the Listing Rules[183](index=183&type=chunk) [Connected Transactions](index=29&type=section&id=Connected%20Transactions) The company had no connected transactions subject to the requirements under Chapter 14A of the Listing Rules during the year - During the year, the company had no connected transactions subject to the requirements under Chapter 14A of the Listing Rules[183](index=183&type=chunk) - Related party transactions are disclosed in Note 31 to the consolidated financial statements[183](index=183&type=chunk) [Management Contracts](index=29&type=section&id=Management%20Contracts) No contracts concerning the management and administration of the whole or any substantial part of the business of the company were entered into or existed during the year - No contracts concerning the management and administration of the whole or any substantial part of the business of the company were entered into or existed during the year[183](index=183&type=chunk) [Purchase, Redemption or Sale of Listed Securities of the Company](index=29&type=section&id=Purchase,%20Redemption%20or%20Sale%20of%20Listed%20Securities%20of%20the%20Company) Neither the company nor any of its subsidiaries purchased, redeemed or sold any of the company's securities during the year - Neither the company nor any of its subsidiaries purchased, redeemed or sold any of the company's securities during the year[183](index=183&type=chunk) [Pre-emptive Rights](index=29&type=section&id=Pre-emptive%20Rights) There are no provisions for pre-emptive rights under the Articles of Association or the laws of the Cayman Islands - There are no provisions for pre-emptive rights under the Articles of Association or the laws of the Cayman Islands which would oblige the company to offer new shares on a pro-rata basis to existing shareholders[183](index=183&type=chunk) [Reserves](index=29&type=section&id=Reserves) Details of movements in the reserves of the Group and the company during the year are set out in the consolidated statement of changes in equity and Note 31 to the financial statements - Details of movements in the reserves of the Group and the company during the year are set out in the consolidated statement of changes in equity and Note 31 to the financial statements, respectively[183](index=183&type=chunk) [Distributable Reserves](index=29&type=section&id=Distributable%20Reserves) As of December 31, 2020, the company had no reserves available for distribution to shareholders - As at December 31, 2020, the company had no reserves available for distribution to shareholders as calculated under the provisions of the Companies Law of the Cayman Islands (December 31, 2019: Nil)[183](index=183&type=chunk) - The company's share premium account of approximately **HK$0.3 million** may be distributed in the form of fully paid bonus shares[183](index=183&type=chunk) [Directors](index=30&type=section&id=Directors) This section lists the members of the Board of Directors as of the report date and notes their eligibility for re-election - The executive directors are Mr Chan Sze Ming, Ms Lo Miu Lan, and Mr Chan Tsz Fung[185](index=185&type=chunk) - The independent non-executive directors are Mr Lam Chor Ki, Mr Li Tak Cheong, and Dr Wong Chi Wing[186](index=186&type=chunk) - Mr Lam Chor Ki and Dr Wong Chi Wing will retire at the 2021 AGM and, being eligible, offer themselves for re-election[194](index=194&type=chunk) [Closure of Register of Members](index=30&type=section&id=Closure%20of%20Register%20of%20Members) The register of members will be closed on two separate occasions to determine eligibility for attending the 2021 AGM and receiving the proposed final dividend - To be eligible to attend and vote at the 2021 AGM, the register of members will be closed from June 15 to June 18, 2021, with a deadline of 4:30 p.m. on June 11, 2021[187](index=187&type=chunk)[191](index=191&type=chunk) - To qualify for the proposed final dividend, the register of members will be closed from June 24 to June 25, 2021, with a deadline of 4:30 p.m. on June 23, 2021[188](index=188&type=chunk)[191](index=191&type=chunk) [Major Customers and Suppliers](index=30&type=section&id=Major%20Customers%20and%20Suppliers) This section discloses the sales and purchase concentration of the Group's top five customers and suppliers during the review year Major Customer and Supplier Concentration | Indicator | 2020 (%) | 2019 (%) | | :--- | :--- | :--- | | Sales to top five customers as % of total sales | 18.6% | 21.6% | | Sales to largest customer as % of total sales | 12.0% | 11.0% | | Purchases from top five suppliers as % of total purchases | 10.7% | 9.8% | | Purchases from largest supplier as % of total purchases | 3.7% | 3.0% | - None of the directors of the company, their associates, or any shareholder (who to the knowledge of the directors owns more than 5% of the company's issued share capital) had any beneficial interest in the Group's five largest customers and suppliers[190](index=190&type=chunk)[192](index=192&type=chunk) [Directors' and Senior Management's Profiles](index=31&type=section&id=Directors'%20and%20Senior%20Management's%20Profiles) This section provides detailed biographies of the executive directors, independent non-executive directors, and senior management members - Executive directors Mr Chan Sze Ming (Chairman), Ms Lo Miu Lan (CEO), and Mr Chan Tsz Fung are responsible for the Group's overall management, corporate development, strategic planning, operations, product development, marketing, and European sales activities[194](index=194&type=chunk)[196](index=196&type=chunk) - Mr Chan Sze Ming and Ms Lo Miu Lan are spouses, and Mr Chan Tsz Fung is their son; all three executive directors have extensive experience in the apparel label and decorative product manufacturing industry[194](index=194&type=chunk)[196](index=196&type=chunk) - Independent non-executive directors Mr Lam Chor Ki, Mr Li Tak Cheong, and Dr Wong Chi Wing possess rich professional backgrounds and industry experience and serve as members or chairmen of the audit, remuneration, and nomination committees[196](index=196&type=chunk)[198](index=198&type=chunk) - Senior management members include Mr Chow Wing Fook, Mr Lau Kwok Shing, Mr Fung Hong Keung, Mr Richard Phillip Ringeisen, and Mr Liu Man Wai, who have many years of experience in their respective fields[200](index=200&type=chunk)[203](index=203&type=chunk)[204](index=204&type=chunk)[205](index=205&type=chunk)[206](index=206&type=chunk) - The Company Secretary, Mr Chan Wai Shing, has experience in accounting and company secretarial functions and meets the requirements of the Listing Rules[207](index=207&type=chunk)[210](index=210&type=chunk)[211](index=211&type=chunk) [Directors' Service Contracts](index=35&type=section&id=Directors'%20Service%20Contracts) No director proposed for re-election at the 2021 AGM has a service contract with the company which is not determinable by the company within one year without payment of compensation - No director proposed for re-election at the 2021 AGM has a service contract with the company which is not determinable by the company within one year without payment of compensation (other than statutory compensation)[209](index=209&type=chunk)[212](index=212&type=chunk) [Directors' Remuneration](index=36&type=section&id=Directors'%20Remuneration) Directors' fees are subject to shareholders' approval at general meetings, while other emoluments are determined by the Board with reference to their duties and performance - Directors' fees are subject to shareholders' approval at general meetings[214](index=214&type=chunk)[219](index=219&type=chunk) - Other emoluments are determined by the Board with reference to the directors' duties, responsibilities, and performance, as well as the Group's results[214](index=214&type=chunk)[219](index=219&type=chunk) [Permitted Indemnity Provision](index=36&type=section&id=Permitted%20Indemnity%20Provision) The company has taken out appropriate directors' and officers' liability insurance to provide cover for the directors and officers of the Group - Pursuant to the Articles of Association and the Companies Law of the Cayman Islands, every director or other officer of the company shall be entitled to be indemnified out of the assets of the company against any loss or liability incurred or sustained by him in or about the execution of his duties[215](index=215&type=chunk)[220](index=220&type=chunk) - The company has taken out appropriate directors' and officers' liability insurance to provide cover for the directors and officers of the Group[215](index=215&type=chunk)[220](index=220&type=chunk) [Directors' Interests in Transactions, Arrangements or Contracts](index=36&type=section&id=Directors'%20Interests%20in%20Transactions,%20Arrangements%20or%20Contracts) No director or a connected entity of a director had a material interest, either directly or indirectly, in any transaction, arrangement or contract of significance to the business of the Group - No director or a connected entity of a director had a material interest, either directly or indirectly, in any transaction, arrangement or contract of significance to the business of the Group to which the company or any of its subsidiaries was a party during the year[216](index=216&type=chunk)[218](index=218&type=chunk) [Disclosure of Interests](index=36&type=section&id=Disclosure%20of%20Interests) This section discloses the interests and/or short positions of directors, chief executives, substantial shareholders, and other persons in the shares and underlying shares of the company Directors' Long Positions in Shares of the Company (as at December 31, 2020) | Director's Name | Company/Associated Corporation | Nature of Interest & Capacity | Number and Class of Securities | Approximate % of Total Issued Share Capital | | :--- | :--- | :--- | :--- | :--- | | Mr Chan Sze Ming | The Company | Interest of controlled corporation | 1,404,000,000 Shares | 70.2% | | Mr Chan Sze Ming | Charming International Limited | Beneficial owner | 51 shares of US$1.00 each | 51.0% | | Ms Lo Miu Lan | The Company | Interest of controlled corporation | 1,404,000,000 Shares | 70.2% | | Ms Lo Miu Lan | Charming International Limited | Beneficial owner | 49 shares of US$1.00 each | 49.0% | | Mr Chan Tsz Fung | – | Beneficial owner | 12,000,000 Shares | 0.6% | - Mr Chan Sze Ming and Ms Lo Miu Lan own 51% and 49% of the issued share capital of Charming International, respectively, which in turn holds 1,404,000,000 Shares; therefore, they are deemed to be interested in the Shares held by Charming International[227](index=227&type=chunk)[228](index=228&type=chunk) - Mr Chan Sze Ming is the spouse of Ms Lo Miu Lan, and therefore they are deemed to be interested in the Shares held by each other[228](index=228&type=chunk) Substantial Shareholders' Long Positions in Ordinary Shares of the Company (as at the date of this report) | Shareholder's Name | Capacity/Nature of Interest | Number of Shares | Approximate % of the Company's Total Issued Share Capital | | :--- | :--- | :--- | :--- | | Charming International | Beneficial interest | 1,404,000,000 | 70.2% | - As at the date of this report, other than the directors and chief executive, no other person had an interest or short position in the shares or underlying shares of the company recorded in the register required to be kept by the company under section 336 of the SFO[235](index=235&type=chunk)[238](index=238&type=chunk) [Share Option Scheme](index=38&type=section&id=Share%20Option%20Scheme) This section introduces the Share Option Scheme approved and adopted by the company on February 21, 2020, to provide incentives to eligible participants - The company approved and adopted a Share Option Scheme on February 21, 2020, to provide incentives or rewards to selected participants[236](index=236&type=chunk)[239](index=239&type=chunk) - Options may be granted to eligible participants, including employees, directors, consultants, suppliers, customers, and shareholders[241](index=241&type=chunk)[245](index=245&type=chunk) - The maximum number of shares to be issued upon exercise of all outstanding options granted under the Scheme shall not in aggregate exceed **30% of the issued share capital** of the company from time to time[242](index=242&type=chunk)[246](index=246&type=chunk) - The total number of shares issued and to be issued upon exercise of options granted to each participant in any 12-month period shall not exceed **1% of the then issued shares**[243](index=243&type=chunk)[247](index=247&type=chunk) - The exercise price of an option shall not be less than the highest of the average closing price for the five business days immediately preceding the date of grant, the closing price on the date of grant, and the nominal value of a share[249](index=249&type=chunk)[250](index=250&type=chunk) - The Scheme shall be valid and effective for a period of **10 years** from the Listing Date[251](index=251&type=chunk)[255](index=255&type=chunk) - On September 15, 2020, the company granted **2,000,000 share options** to a senior management member at an exercise price of HK$0.057 per share[251](index=251&type=chunk)[255](index=255&type=chunk)[714](index=714&type=chunk) - As of December 31, 2020, the company had **2,000,000 outstanding share options**, representing approximately 0.1% of the issued shares[719](index=719&type=chunk)[723](index=723&type=chunk) [Equity-Linked Agreements](index=40&type=section&id=Equity-Linked%20Agreements) No equity-linked agreements were entered into or existed during the year, other than as disclosed in this annual report - During the year, other than as disclosed in this annual report, the company did not enter into, nor did there exist, any equity-linked agreements, nor were there any provisions for entering into any agreement that would or might result in the company issuing shares[252](index=252&type=chunk)[256](index=256&type=chunk) [Director's Rights to Acquire Shares or Debentures](index=40&type=section&id=Director's%20Rights%20to%20Acquire%20Shares%20or%20Debentures) No arrangements were entered into by the company or its subsidiaries to enable directors or chief executives to acquire benefits by means of the acquisition of shares in or debentures of the company - Other than as disclosed under the section "Share Option Scheme" above, at no time during the year was the company or any of its subsidiaries a party to any arrangement to enable the directors or chief executive of the company or any of their spouses or children under 18 years of age to acquire benefits by means of the acquisition of shares in or debentures of the company or any other body corporate[253](index=253&type=chunk)[257](index=257&type=chunk) [Interest of the Compliance Adviser](index=40&type=section&id=Interest%20of%20the%20Compliance%20Adviser) The company has appointed Innovax Capital Limited as its compliance adviser, and Innovax holds no interest in the share capital of the company - The company has appointed Innovax Capital Limited ("Innovax") as its compliance adviser[254](index=254&type=chunk)[258](index=258&type=chunk) - As at the date of this report, neither Innovax nor any of its close associates, directors or employees had any interest in the share capital of the company or any member of the Group which is required to be notified to the company under the Listing Rules[254](index=254&type=chunk)[258](index=258&type=chunk) [Sufficiency of Public Float](index=41&type=section&id=Sufficiency%20of%20Public%20Float) At least 25% of the company's total issued share capital was held by the public as at the date of this report - Based on information that is publicly available to the company and within the knowledge of the directors, at least 25% of the company's total issued share capital was held by the public as at the date of this report[260](index=260&type=chunk)[262](index=262&type=chunk) [Auditors](index=41&type=section&id=Auditors) Ernst & Young has been appointed as the auditor of the company for the year ended December 31, 2020, and a resolution for their reappointment will be proposed at the 2021 AGM - The company has appointed Ernst & Young as the auditor of the company for the year ended December 31, 2020[261](index=261&type=chunk)[263](index=263&type=chunk) - A resolution for their reappointment as the company's auditor will be proposed at the 2021 AGM[261](index=261&type=chunk)[263](index=263&type=chunk) [Independent Auditor's Report](index=2&type=section&id=Independent%20Auditor's%20Report) [Independent Auditor's Report](index=42&type=section&id=41%20Independent%20Auditor's%20Report) Ernst & Young issued a true and fair opinion on the consolidated financial statements of Cirtek Holdings Limited for the year ended December 31, 2020 - The auditor is of the opinion that the consolidated financial statements give a true and fair view of the consolidated financial position of the Group as at December 31, 2020, and of its consolidated financial performance and its consolidated cash flows for the year then ended in accordance with Hong Kong Financial Reporting Standards and have been properly prepared in compliance with the disclosure requirements of the Hong Kong Companies Ordinance[265](index=265&type=chunk) - Key audit matters included the **impairment assessment of trade receivables** and **provision for inventories**, as they involve significant judgement and estimation[267](index=267&type=chunk)[271](index=271&type=chunk)[273](index=273&type=chunk) - For the impairment assessment of trade receivables, audit procedures included assessing monitoring controls, evaluating the expected credit loss (ECL) calculation methodology, inputs, and assumptions, and reviewing post-year-end settlements and economic indicators[270](index=270&type=chunk) - For the provision for inventories, audit procedures included understanding management's controls for identifying and valuing obsolete, damaged, and slow-moving inventories, assessing the provision calculation methodology, inputs, and assumptions, and reviewing post-year-end sales and usage and performing physical inventory checks[274](index=274&type=chunk) - The Board of Directors is responsible for preparing consolidated financial statements that comply with HKFRSs and for ensuring effective internal controls, with the Audit Committee assisting in overseeing the financial reporting process[280](index=280&type=chunk)[283](index=283&type=chunk)[284](index=284&type=chunk) [Consolidated Statement of Profit or Loss](index=2&type=section&id=Consolidated%20Statement%20of%20Profit%20or%20Loss) [Consolidated Statement of Profit or Loss](index=48&type=section&id=47%20Consolidated%20Statement%20of%20Profit%20or%20Loss) This section presents the consolidated statement of profit or loss for Cirtek Holdings Limited for the year ended December 31, 2020 Key Data from Consolidated Statement of Profit or Loss for 2020 (HK$'000) | Indicator | 2020 | 2019 | | :--- | :--- | :--- | | Revenue | 259,314 | 352,937 | | Cost of sales | (129,117) | (178,168) | | Gross profit | 130,197 | 174,769 | | Other income and gains | 9,694 | 5,701 | | Selling and distribution expenses | (36,451) | (44,053) | | Administrative expenses | (78,247) | (83,808) | | Other expenses | (7,413) | (928) | | Finance costs | (2,381) | (2,735) | | Listing expenses | (10,607) | (11,030) | | Profit before tax | 4,792 | 37,916 | | Income tax expense | (3,145) | (11,434) | | Profit for the year | 1,647 | 26,482 | | Profit for the year attributable to owners of the Company | 1,647 | 25,331 | | Non-controlling interests | – | 1,151 | | Basic earnings per share (HK cents) | 0.09 | 1.69 | | Diluted earnings per share (HK cents) | 0.09 | 1.69 | [Consolidated Statement of Comprehensive Income](index=2&type=section&id=Consolidated%20Statement%20of%20Comprehensive%20Income) [Consolidated Statement of Comprehensive Income](index=49&type=section&id=48%20Consolidated%20Statement%20of%20Comprehensive%20Income) This section presents the consolidated statement of comprehensive income for Cirtek Holdings Limited for the year ended December 31, 2020 Key Data from Consolidated Statement of Comprehensive Income for 2020 (HK$'000) | Indicator | 2020 | 2019 | | :--- | :--- | :--- | | Profit for the year | 1,647 | 26,482 | | Other comprehensive income: Net exchange differences on translation of foreign operations | 4,938 | 772 | | Total comprehensive income for the year | 6,585 | 27,254 | | Attributable to owners of the Company | 6,585 | 26,178 | | Non-controlling interests | – | 1,076 | [Consolidated Statement of Financial Position](index=2&type=section&id=Consolidated%20Statement%20of%20Financial%20Position) [Consolidated Statement of Financial Position](index=50&type=section&id=49%20Consolidated%20Statement%20of%20Financial%20Position) This section presents the consolidated statement of financial position for Cirtek Holdings Limited as at December 31, 2020 Key Data from Consolidated Statement of Financial Position as at December 31, 2020 (HK$'000) | Indicator | 2020 | 2019 | | :--- | :--- | :--- | | **Non-current assets** | | | | Property, plant and equipment | 90,980 | 76,559 | | Right-of-use assets | 43,117 | 58,486 | | Prepayments and deposits | 6,560 | 1,307 | | Goodwill | 1,523 | – | | Other intangible assets | 270 | – | | Financial asset at fair value through profit or loss | 5,404 | – | | Deferred tax assets | 402 | – | | **Total non-current assets** | **148,256** | **136,352** | | **Current assets** | | | | Inventories | 52,943 | 44,565 | | Trade receivables | 36,724 | 48,327 | | Prepayments, deposits and other receivables | 8,143 | 12,972 | | Cash and cash equivalents | 114,743 | 43,807 | | Tax recoverable | 883 | 65 | | **Total current assets** | **213,436** | **150,048** | | **Current liabilities** | | | | Trade payables | 34,651 | 35,381 | | Other payables and accruals | 30,665 | 32,557 | | Interest-bearing bank borrowings | 20,530 | 18,257 | | Lease liabilities | 12,107 | 11,626 | | Tax payable | 3,766 | 10,353 | | **Total current liabilities** | **101,719** | **108,577** | | **Net current assets** | **111,717** | **41,471** | | **Total assets less current liabilities** | **259,973** | **177,823** | | **Non-current liabilities** | | | | Other payables | 750 | 841 | | Interest-bearing bank borrowings | 633 | 2,469 | | Lease liabilities | 21,340 | 30,209 | | Deferred tax liabilities | 1,124 | 334 | | **Total non-current liabilities** | **23,847** | **33,853** | | **Net assets** | **236,126** | **143,970** | | **Equity** | | | | Share capital | 20,000 | –* | | Reserves | 216,126 | 143,970 | | **Total equity** | **236,126** | **143,970** | [Consolidated Statement of Changes in Equity](index=2&type=section&id=Consolidated%20Statement%20of%20Changes%20in%20Equity) [Consolidated Statement of Changes in Equity](index=51&type=section&id=50%20Consolidated%20Statement%20of%20Changes%20in%20Equity) This section presents the consolidated statement of changes in equity for Cirtek Holdings Limited for the year ended December 31, 2020 Consolidated Statement of Changes in Equity for 2020 (HK$'000) | Indicator | Share Capital | Share Premium | Merger Reserve | Share Option Reserve | Exchange Fluctuation Reserve | Retained Profits | Total (Attributable to owners of the Company) | Non-controlling Interests | Total Equity | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | At 1 January 2019 | – | – | 2,920 | – | (6,373) | 116,215 | 112,762 | 3,564 | 116,716 | | Profit for the year | – | – | – | – | – | 25,331 | 25,331 | 1,151 | 26,482 | | Other comprehensive income | – | – | – | – | 847 | – | 847 | (75) | 772 | | Total comprehensive income for 2019 | – | – | – | – | 847 | 25,331 | 26,178 | 1,076 | 27,254 | | At 31 December 2019 and 1 January 2020 | – | 201,488 | (193,538) | – | (5,526) | 141,546 | 143,970 | – | 143,970 | | Profit for 2020 | – | – | – | – | – | 1,647 | 1,647 | – | 1,647 | | Other comprehensive income for 2020 | – | – | – | – | 4,938 | – | 4,938 | – | 4,938 | | Total comprehensive income for 2020 | – | – | – | – | 4,938 | 1,647 | 6,585 | – | 6,585 | | Issue of new shares by capitalisation | 15,000 | (15,000) | – | – | – | – | – | – | – | | Issue of new shares under Share Offer | 5,000 | 120,000 | – | – | – | – | 125,000 | – | 125,000 | | Share issue costs | – | (29,437) | – | – | – | – | (29,437) | – | (29,437) | | Equity-settled share option arrangements | – | – | – | 8 | – | – | 8 | – | 8 | | Special dividend | – | – | – | – | – | (10,000) | (10,000) | – | (10,000) | | At 31 December 2020 | 20,000 | 277,051 | (193,538) | 8 | (588) | 133,193 | 236,126 | – | 236,126 | [Consolidated Statement of Cash Flows](index=2&type=section&id=Consolidated%20Statement%20of%20Cash%20Flows) [Consolidated Statement of Cash Flows](index=52&type=section&id=51%20Consolidated%20Statement%20of%20Cash%20Flows) This section presents the consolidated statement of cash flows for Cirtek Holdings Limited for the year ended December 31, 2020 Key Data from Consolidated Statement of Cash Flows for 2020 (HK$'000) | Indicator | 2020 | 2019 | | :--- | :--- | :--- | | Net cash flows from operating activities | 20,379 | 59,594 | | Net cash flows used in investing activities | (21,794) | (10,110) | | Net cash flows from/(used in) financing activities | 71,919 | (28,549) | | Net increase in cash and cash equivalents | 70,504 | 20,935 | | Cash and cash equivalents at beginning of year | 43,807 | 22,958 | | Effect of foreign exchange rate changes, net | 432 | (86) | | Cash and cash equivalents at end of year | 114,743 | 43,807 | | Cash and bank balances | 55,510 | 43,807 | | Time deposits | 59,233 | – | [Notes to Financial Statements](index=2&type=section&id=Notes%20to%20Financial%20Statements) [Notes to Financial Statements](index=54&type=section&id=53%20Notes%20to%20Financial%20Statements) This section provides detailed information on Cirtek Holdings Limited and its subsidiaries, including their principal activities and corporate structure - The company was incorporated in the Cayman Islands, with its principal place of business located in Lai Chi Kok, Kowloon, Hong Kong[314](index=314&type=chunk) - The company's shares were listed on the Main Board of The Stock Exchange of Hong Kong Limited on March 12, 2020[314](index=314&type=chunk) - The company is an investment holding company, and its subsidiaries are principally engaged in the production and sale of printed products[314](index=314&type=chunk) - Charming International Limited is the immediate and ultimate holding company of the company[314](index=314&type=chunk) Principal Subsidiaries Information | Company Name | Place of incorporation/registration and business | Issued ordinary shares/registered capital | Percentage of equity attributable to the Company (indirect) | Principal Activities | | :--- | :--- | :--- | :--- | :--- | | Charming Printing Limited | Hong Kong | HK$10,000 | 100 | Sale of printed products | | Charming Printing (Boluo) Ltd. | China | US$6,234,178 | 100 | Production of printed products | | Charming Trim & Packaging (VN) Co., Ltd | Vietnam | US$3,100,000 | 100 | Production of printed products | | Charming Trim & Packaging (BD) Ltd | Bangladesh | BDT50,000,000 | 100 | Production of printed products | | Charming Trim (BD) Co. Ltd | Bangladesh | BDT5,000,000 | 100 | Sale of printed products | | Charming Trim India Private Limited | India | INR100,000 | 100 | Sale of printed products | | Charming Trim & Packaging (PVT.) Limited | Pakistan | PKR100,000 | 100 | Sale of printed products | | Charming Trim & Packaging, Inc | USA | US$10,000 | 100 | Sale of printed products and provision of customer services | | Charming Europe BVBA | Belgium | EUR50,000 | 100 | Provision of customer services | | Cirtek Link (Shenzhen) Limited | China | US$1,000,000 | 100 | Provision of customer services | [Basis of Presentation and Changes in Accounting Policies](index=57&type=section&id=Basis%20of%20Presentation%20and%20Changes%20in%20Accounting%20Policies) This section explains the basis of presentation for the financial statements and the adoption of revised Hong Kong Financial Reporting Standards in 2020 - The financial statements have been prepared using the principles of merger accounting as if the Group Reorganisation had been completed on January 1, 2019, to reflect the performance and cash flows of the companies under the common control of the controlling shareholders[322](index=322&type=chunk)[325](index=325&type=chunk) - The amendments adopted for the first time in 2020 include the Conceptual Framework for Financial Reporting 2018, amendments to HKFRS 3 (Definition of a Business), HKFRS 9, HKAS 39 and HKFRS 7 (Interest Rate Benchmark Reform), HKFRS 16 (COVID-19-Related Rent Concessions), and HKAS 1 and HKAS 8 (Definition of Material)[334](index=334&type=chunk)[335](index=335&type=chunk) - The amendments to the Conceptual Framework, Definition of a Business, Interest Rate Benchmark Reform, and Definition of Material did not have a significant impact on the Group's financial position and performance[337](index=337&type=chunk)[338](index=338&type=chunk)[340](index=340&type=chunk)[341](index=341&type=chunk)[343](index=343&type=chunk) - The amendment to HKFRS 16 provides a practical expedient for lessees to elect not to apply lease modification accounting for rent concessions arising directly from the COVID-19 pandemic, which did not have a significant impact on the Group's financial position and performance[343](index=343&type=chunk) - Issued but not yet effective HKFRSs, including amendments to HKFRS 3, 9, 10, 17, and HKAS 1, 16, 37, are not expected to have a significant impact on the Group's financial statements[346](index=346&type=chunk)[349](index=349&type=chunk)[352](index=352&type=chunk)[353](index=353&type=chunk)[355](index=355&type=chunk)[356](index=356&type=chunk)[358](index=358&type=chunk)[359](index=359&type=chunk)[360](index=360&type=chunk)[361](index=361&type=chunk)[364](index=364&type=chunk) [Summary of Significant Accounting Policies](index=65&type=section&id=Summary%20of%20Significant%20Accounting%20Policies) This section outlines the Group's significant accounting policies across various areas, including business combinations, fair value measurement, and revenue recognition - Business combinations are accounted for using the acquisition method, with goodwill initially measured at cost and tested for impairment annually[364](index=364&type=chunk)[367](index=367&type=chunk) - Fair value measurement is based on an orderly transaction between market participants and uses relevant observable inputs and valuation techniques[370](index=370&type=chunk)[371](index=371&type=chunk)[376](index=376&type=chunk)[380](index=380&type=chunk) - Impairment of non-financial assets is assessed when there are indications of impairment, with the recoverable amount calculated as the higher of value in use and fair value less costs of disposal[387](index=387&type=chunk)[388](index=388&type=chunk)[389](index=389&type=chunk) - Property, plant and equipment are stated at cost less accumulated depreciation and any impairment losses, with depreciation calculated using the straight-line method at annual rates of 10% to 20%[394](index=394&type=chunk)[397](index=397&type=chunk)[399](index=399&type=chunk) - Intangible assets (other than goodwill) are recognised at cost, with finite-lived assets like software amortised on a straight-line basis over 10 years[402](index=402&type=chunk)[403](index=403&type=chunk) - As a lessee, the Group applies a single recognition and measurement approach for all leases (except short-term leases), recognising lease liabilities and right-of-use assets[403](index=403&type=chunk)[407](index=407&type=chunk)[410](index=410&type=chunk)[411](index=411&type=chunk)[417](index=417&type=chunk)[419](index=419&type=chunk) - Financial assets are classified at initial recognition as measured at amortised cost, fair value through other comprehensive income, or fair value through profit or loss, based on contractual cash flow characteristics and business model[414](index=414&type=chunk)[416](index=416&type=chunk)[420](index=420&type=chunk)[422](index=422&type=chunk)[423](index=423&type=chunk)[424](index=424&type=chunk)[425](index=425&type=chunk)[426](index=426&type=chunk) - Financial liabilities are classified at initial recognition as financial liabilities at FVTPL, loans and borrowings, payables, or as derivatives designated as hedging instruments in an effective hedge, and are subsequently measured at amortised cost[448](index=448&type=chunk) - Inventories are stated at the lower of cost and net realisable value, with cost determined on a weighted average basis[451](index=451&type=chunk) - Cash and cash equivalents include cash on hand, demand deposits, and short-term, highly liquid investments[451](index=451&type=chunk) - Income tax comprises current and deferred tax, with deferred tax assets and liabilities measured at the tax rates that are enacted or substantively enacted by the end of the reporting period[454](index=454&type=chunk)[456](index=456&type=chunk)[459](index=459&type=chunk)[461](index=461&type=chunk) - Government grants are recognised at their fair value and are systematically recognised as income or amortised based on their relation to expenses or assets[463](index=463&type=chunk)[464](index=464&type=chunk)[465](index=465&type=chunk) - Revenue from contracts with customers is recognised when control of the goods or services is transferred to the customer, with variable consideration (such as rights of return) estimated using the most likely amount method[466](index=466&type=chunk)[467](index=467&type=chunk)[469](index=469&type=chunk)[471](index=471&type=chunk)[473](index=473&type=chunk)[475](index=475&type=chunk)[476](index=476&type=chunk) - The cost of share-based payments is measured by reference to the fair value at the date of grant and is recognised as an employee benefit expense over the period when performance and/or service conditions are fulfilled[481](index=481&type=chunk)[482](index=482&type=chunk)[483](index=483&type=chunk)[486](index=486&type=chunk) - Borrowing costs directly attributable to the acquisition, construction or production of qualifying assets are capitalised[494](index=494&type=chunk)[497](index=497&type=chunk) - The financial statements are presented in Hong Kong dollars, and the functional currencies of foreign subsidiaries are translated at the exchange rates prevailing at the end of the reporting period[501](index=501&type=chunk)[508](index=508&type=chunk)[510](index=510&type=chunk) [Significant Accounting Judgements and Estimates](index=91&type=section&id=Significant%20Accounting%20Judgements%20and%20Estimates) This section describes the significant judgements and estimates made by management in preparing the financial statements - Management uses the most likely amount method to estimate variable consideration (such as rights of return for sales of printed products), considering historical experience, business forecasts, and current economic conditions[512](index=512&type=chunk)[513](index=513&type=chunk) - The useful lives and impairment assessment of property, plant and equipment are based on historical experience and may change due to technological innovations and competitor actions[515](index=515&type=chunk)[518](index=518&type=chunk) - The provision for expected credit losses on trade receivables is calculated using a provision matrix based on days past due and forward-looking macroeconomic data, and its amount is sensitive to changes in economic conditions[516](index=516&type=chunk)[519](index=519&type=chunk)[522](index=522&type=chunk) - Inventory write-downs are based on management's review of obsolete and slow-moving inventories, with net realisable value estimated based on the latest invoice prices and market conditions[523](index=523&type=chunk)[524](index=524&type=chunk)[527](index=527&type=chunk) - Goodwill impairment testing is performed at least annually and involves estimating the value in use of cash-generating units, including future cash flow forecasts and the selection of a discount rate[525](index=525&type=chunk)[529](index=529&type=chunk) - The purchase price allocation for business combinations requires determining the fair values of identifiable assets acquired and liabilities assumed, which depends on a series of estimates such as future cash flows, discount rates, and interest rates[525](index=525&type=chunk) [Operating Segment Information](index=94&type=section&id=Operating%20Segment%20Information) This section discloses the Group's operating segment information, which consists of a single reportable segment: the production and sale of printed products - The Group has only one reportable operating segment, which is the production and sale of printed products[530](index=530&type=chunk) Revenue by Customer Location (HK$'000) | Region | 2020 | 2019 | | :--- | :--- | :--- | | Hong Kong | 60,364 | 97,895 | | Mainland China | 76,026 | 88,362 | | Bangladesh | 28,660 | 34,264 | | Vietnam | 13,109 | 20,688 | | USA | 16,249 | 17,429 | | Others | 64,906 | 94,299 | | **Total** | **259,314** | **352,937** | Non-current Assets by Asset Location (HK$'000) | Region | 2020 | 2019 | | :--- | :--- | :--- | | Hong Kong | 4,709 | 8,437 | | Mainland China | 99,246 | 93,355 | | Bangladesh | 13,452 | 15,823 | | Other countries | 23,376 | 17,868 | | **Total** | **140,783** | **135,483** | Major Customer Revenue (HK$'000) | Customer | 2020 | 2019 | | :--- | :--- | :--- | | Customer A | 31,150 | 38,908 | - Revenue from major customers was generated from the sale of printed products[543](index=543&type=chunk) [Revenue and Other Income and Gains](index=95&type=section&id=Revenue%20and%20Other%20Income%20and%20Gains) This section provides a detailed analysis of the Group's revenue composition and other income and gains - Revenue represents the net invoiced value of goods sold, after allowances for returns and trade discounts and rebates[544](index=544&type=chunk) Analysis of Revenue and Other Income and Gains (HK$'000) | Indicator | 2020 | 2019 | | :--- | :--- | :--- | | Sale of printed products | 259,314 | 352,937 | | Freight and transportation income | 462 | 536 | | Interest income | 1,419 | 7 | | Sale of scrap materials | 1,410 | 2,011 | | Government grants | 4,332 | 532 | | Net exchange differences | – | 1,446 | | Net gain on disposal of property, plant and equipment | 687 | – | | Net gain on derecognition of right-of-use assets | 63 | – | | Others | 1,321 | 1,169 | | **Total** | **9,694** | **5,701** | - Performance obligations are satisfied upon delivery of the printed products, and payment is generally due within 30 to 90 days from delivery[548](index=548&type=chunk)[553](index=553&type=chunk) - The increase in contract liabilities in 2020 was mainly due to an increase in short-term advances received from customers for the sale of printed products at the end of the year[681](index=681&type=chunk) [Profit Before Tax](index=97&type=section&id=Profit%20Before%20Tax) This section presents the components of the Group's profit before tax Components of Profit Before Tax (HK$'000) | Item | 2020 | 2019 | | :--- | :--- | :--- | | Cost of sales | 129,117 | 178,168 | | Depreciation of property, plant and equipment | 14,902 | 17,326 | | Depreciation of right-of-use assets | 10,510 | 11,224 | | Short-term lease expenses | 821 | 43 | | Employee benefit expenses (excluding directors' remuneration) | 98,861 | 116,538 | | Government grants | (4,332) | (532) | | Auditor's remuneration | 2,152 | 1,611 | | Listing expenses | 10,607 | 11,030 | | Net exchange differences | 4,683 | (1,446) | | Impairment of trade receivables | 1,397 | 833 | | Net gain on disposal of property, plant and equipment | (687) | (87) | | Net gain on derecognition of right-of-use assets | (63) | – | | Fair value loss on financial asset at FVTPL | 1,333 | – | - Cost of inventories sold includes employee benefit expenses of **HK$52,485,000** (2019: HK$64,003,000) and depreciation of property, plant and equipment and right-of-use assets[557](index=557&type=chunk) - Government grants were mainly from local governments, including unemployment insurance compensation and new machinery acquisition, as well as grants from the Hong Kong government's COVID-19-related "Employment Support Scheme"[556](index=556&type=chunk) [Finance Costs](index=98&type=section&id=Finance%20Costs) This section analyses the Group's finance costs, which primarily consist of interest on bank loans and lease liabilities Analysis of Finance Costs (HK$'000) | Item | 2020 | 2019 | | :--- | :--- | :--- | | Interest on bank loans | 854 | 601 | | Interest on lease liabilities | 1,527 | 2,134 | | **Total** | **2,381** | **2,735** | [Directors' and Chief Executive's Remuneration](index=98&type=section&id=Directors'%20and%20Chief%20Executive's%20Remuneration) This section discloses the remuneration details of the directors and chief executive Directors' and Chief Executive's Remuneration (HK$'000) | Item | 2020 | 2019 | | :--- | :--- | :--- | | Fees | – | – | | Salaries, allowances and benefits in kind | 2,635 | 2,402 | | Performance-related bonuses | 1,800 | 1,496 | | Pension scheme contributions | 49 | 46 | | **Total** | **4,484** | **3,944** | Independent Non-executive Directors' Fees (HK$'000) | Director's Name | 2020 | 2019 | | :--- | :--- | :--- | | Dr Wong Chi Wing | 206 | – | | Mr Li Tak Cheong | 155 | – | | Mr Lam Chor Ki | 155 | – | | **Total** | **516** | **–** | Executive Directors' Remuneration (HK$'000) | Director's Name | Salaries, allowances and benefits in kind | Performance-related bonuses | Pension scheme contributions | Total | | :--- | :--- | :--- | :--- | :--- | | Mr Chan Sze Ming | 1,042 | 900 | 18 | 1,960 | | Ms Lo Miu Lan | 838 | 900 | 18 | 1,756 | | Mr Chan Tsz Fung | 239 | – | 13 | 252 | | **Total** | **2,119** | **1,800** | **49** | **3,968** | - During the year, no director entered into any arrangement to waive or agree to waive any remuneration, and the Group did not pay any remuneration to directors as an inducement to join or as compensation for loss of office[587](index=587&type=chunk) [Five Highest Paid Employees](index=100&type=section&id=Five%20Highest%20Paid%20Employees) This section discloses the remuneration details of the Group's five highest-paid employees - During the year, the five highest-paid employees included two directors and three non-director employees[590](index=590&type=chunk) Remuneration of Non-Director Highest-Paid Employees (HK$'000) | Item | 2020 | 2019 | | :--- | :--- | :--- | | Salaries, allowances and benefits in kind | 5,344 | 6,993 | | Pension scheme contributions | 289 | 301 | | **Total** | **5,633** | **7,294** | Remuneration Bands of Non-Director Highest-Paid Employees (Number of individuals) | Remuneration Band | 2020 | 2019 | | :--- | :--- | :--- | | HK$1,000,001 to HK$1,500,000 | 1 | – | | HK$1,500,001 to HK$2,000,000 | 1 | 1 | | HK$2,000,001 to HK$2,500,000 | – | 1 | | HK$2,500,001 to HK$3,000,000 | 1 | – | | HK$3,000,001 to HK$3,500,000 | – | 1 | | **Total** | **3** | **3** | - During the year, the Group did not pay any remuneration to any non-director highest-paid employee as an inducement to join or as compensation for loss of office[593](index=593&type=chunk) [Income Tax](index=101&type=section&id=Income%20Tax) This section discloses the Group's income tax expense for 2020, which amounted to HK$3.145 million, a significant decrease of 72.5% from 2019 Income Tax Expense (HK$'000) | Item | 2020 | 2019 | | :--- | :--- | :--- | | Current - Hong Kong (Charge for the year) | 1,233 | 7,842 | | Current - Hong Kong (Over-provision in prior years) | (770) | – | | Current - Elsewhere (Charge for the year) | 2,294 | 3,584 | | Deferred | 388 | 8 | | **Total tax charge for the year** | **3,145** | **11,434** | - Hong Kong profits tax is provided at a rate of 16.5% (with some entities at 8.25% on the first HK$2 million), China tax at 25%, and US federal income tax at 21%[595](index=595&type=chunk)[596](index=596&type=chunk) Reconciliation of Tax Expense to Profit Before Tax (HK$'000) | Item | 2020 | 2019 | | :--- | :--- | :--- | | Profit before tax | 4,792 | 37,916 | | Tax at the statutory tax rate of 16.5% | 791 | 6,256 | | Effect of lower tax rate of 8.25% enacted by local authorities | (165) | (165) | | Effect of different tax rates in different jurisdictions | 778 | 989 | | Adjustments in respect of current tax of previous periods | (770) | – | | Income not subject to tax | (1,726) | (106) | | Expenses not deductible for tax | 3,246 | 3,224 | | Tax losses utilised from previous periods | – | (100) | | Tax losses not recognised | 954 | 963 | | Others | 37 | 373 | | **Tax charge at the Group's effective rate** | **3,145** | **11,434** | [Dividends](index=102&type=section&id=Dividends) This section discloses the company's proposed final dividend for 2020 and the special dividend declared and paid in February 2020 Dividends (HK$'000) | Item | 2020 | 2019 | | :--- | :--- | :--- | | Proposed final dividend | 1,500 | – | | Special dividend | – | 10,000 | | **Total** | **1,500** | **10,000** | - In February 2020, the company declared and paid a special dividend of **HK$10 million** to its then shareholders[608](index=608&type=chunk) - The proposed final dividend for the year is subject to

[Management Discussion and Analysis](index=5&type=section&id=Management%20Discussion%20and%20Analysis) This section provides an overview of the company's operational performance, financial position, and future outlook, highlighting key factors influencing its results [Review of Operations and Operating Environment](index=5&type=section&id=Review%20of%20Operations) In H1 2020, the company faced severe challenges from the COVID-19 pandemic, leading to delayed orders and a decline in volume, yet gross margin improved by 0.5 percentage points despite a net loss due to one-off listing expenses Key Financial Indicators for H1 2020 | Indicator | H1 2020 | H1 2019 | YoY Change | | :--- | :--- | :--- | :--- | | Revenue | approx. HK$114 million | approx. HK$171 million | -33.3% | | Gross Profit | approx. HK$58.6 million | approx. HK$87 million | -32.6% | | Gross Margin | 51.4% | 50.9% | +0.5pp | | Loss/Profit Attributable to Owners of the Company | Loss approx. HK$11.8 million | Profit approx. HK$10.1 million | Turned from profit to loss | - The COVID-19 pandemic caused order delays and a decline in volume from Q2, with the company responding by adjusting capacity and implementing strict cost controls[10](index=10&type=chunk)[13](index=13&type=chunk) - The company actively sought new revenue streams, with **RFID tag products** becoming the largest growth category in H1 due to its technological expertise[15](index=15&type=chunk)[17](index=17&type=chunk) - The company successfully listed on the HKEX Main Board in March 2020, enhancing its corporate image and capital strength to better address current challenges[16](index=16&type=chunk)[17](index=17&type=chunk) [Business and Financial Review](index=6&type=section&id=Business%20and%20Financial%20Review) During the period, total revenue decreased by 33.3% due to the pandemic, yet gross margin slightly increased to 51.4% through product optimization and cost control, resulting in a net loss of HK$11.8 million primarily due to one-off listing expenses [Revenue](index=6&type=section&id=Revenue) For the six months ended June 30, 2020, unaudited consolidated revenue was approximately HK$114 million, a 33.3% decrease from HK$171 million in the prior year, primarily due to COVID-19 related operational delays Revenue Performance | Period | Revenue (HK$) | YoY Change | | :--- | :--- | :--- | | H1 2020 | approx. 114 million | -33.3% | | H1 2019 | approx. 171 million | - | [Gross Profit](index=6&type=section&id=Gross%20Profit) The group's overall gross margin slightly increased to 51.4% from 50.9% in the prior year, driven by optimized product sales mix and effective internal cost controls Gross Profit and Gross Margin | Period | Gross Margin | YoY Change | | :--- | :--- | :--- | | H1 2020 | 51.4% | +0.5pp | | H1 2019 | 50.9% | - | [Expenses and Costs](index=7&type=section&id=Expenses%20and%20Costs) Sales and distribution expenses decreased by 27.4% to HK$17.4 million due to the pandemic, while administrative expenses slightly rose by 2.5% to HK$41.7 million due to post-listing professional fees, and other expenses significantly increased to HK$2.1 million Key Expense Changes (H1 2020 vs H1 2019) | Expense Item | H1 2020 (HK$) | H1 2019 (HK$) | YoY Change | | :--- | :--- | :--- | | Sales and distribution expenses | approx. HK$17.4 million | approx. HK$23.9 million | -27.4% | | Administrative expenses | approx. HK$41.7 million | approx. HK$40.7 million | +2.5% | | Other expenses | approx. HK$2.1 million | approx. HK$0.1 million | +2000% | | Finance costs | approx. HK$1.3 million | approx. HK$1.2 million | +8.7% | [Loss/Profit for the period](index=8&type=section&id=Loss%2FProfit%20for%20the%20period) In H1 2020, the company reported a net loss of approximately HK$11.8 million, a reversal from a net profit of HK$11.3 million in H1 2019, primarily due to non-recurring listing expenses and reduced revenue from the COVID-19 pandemic - The company turned from profit to loss, reporting a **net loss of HK$11.8 million in H1 2020**, primarily due to **HK$10.6 million in one-off listing expenses** and the negative impact of the pandemic on revenue[27](index=27&type=chunk)[30](index=30&type=chunk)[110](index=110&type=chunk) [Capital Structure, Liquidity and Financial Resources](index=8&type=section&id=Capital%20Structure%2C%20Liquidity%20and%20Financial%20Resources) As of June 30, 2020, the group's financial position was robust, with cash and cash equivalents significantly increasing to HK$123.8 million and net current assets to HK$117.7 million due to listing proceeds, improving the current ratio to 2.31 times while maintaining a low gearing ratio of 6.7% Key Financial Position Indicators (As of June 30, 2020) | Indicator | June 30, 2020 | December 31, 2019 | | :--- | :--- | :--- | | Net current assets | approx. HK$117.7 million | approx. HK$41.5 million | | Cash and cash equivalents | approx. HK$123.8 million | approx. HK$43.8 million | | Bank borrowings | approx. HK$23 million | approx. HK$20.7 million | | Current ratio | approx. 2.31 times | approx. 1.38 times | | Gearing ratio | approx. 6.7% | approx. 7.2% | [Prospects](index=9&type=section&id=Prospects) The company anticipates ongoing challenges from COVID-19 and trade tensions but plans to capitalize on the "stay-at-home economy" by focusing on RFID/NFC technologies, expanding into mainland China, and leveraging industry consolidation, with a new Bangladesh factory expected by late 2021 - Strategic focus will be on **RFID and NFC technology applications** to meet the growing demands of the apparel retail industry for supply chain monitoring, product anti-counterfeiting, and brand interaction[37](index=37&type=chunk)[40](index=40&type=chunk) - For market expansion, the company plans to allocate more resources to **develop the domestic Chinese market**, while strengthening relationships with existing international apparel brands in Europe and the US, and seeking new clients[43](index=43&type=chunk)[46](index=46&type=chunk) - Production expansion for the new Bangladesh factory is expected to be delayed until **late 2021** due to the pandemic, aiming to meet post-pandemic demand for Bangladesh capacity, with exploration of other Southeast Asian business locations underway[44](index=44&type=chunk) [Use of Proceeds from Listing](index=11&type=section&id=USE%20OF%20PROCEEDS%20FROM%20LISTING) The company received net proceeds of approximately HK$69.9 million from its IPO, which remained unutilized as of June 30, 2020, and are earmarked for constructing a new Bangladesh factory, purchasing machinery, and supplementing general working capital Use of Proceeds from Listing and Utilization (As of June 30, 2020) | Intended Use | Estimated Allocation of Proceeds (HK$ thousand) | Net Proceeds Utilized (HK$ thousand) | Net Proceeds Unutilized (HK$ thousand) | | :--- | :--- | :--- | :--- | | Construction of new Bangladesh factory and purchase of machinery | 68,800 | – | 68,800 | | General working capital | 1,100 | – | 1,100 | | **Total** | **69,900** | **–** | **69,900** | [Corporate Governance and Other Information](index=12&type=section&id=Corporate%20Governance%20and%20Other%20Information) This section details the company's adherence to corporate governance standards, dividend policy, shareholder interests, and the review process for its financial information [Corporate Governance](index=12&type=section&id=CORPORATE%20GOVERNANCE) Since its listing, the company has fully complied with all code provisions of the Corporate Governance Code in Appendix 14 of the HKEX Listing Rules, and all directors and senior management have confirmed adherence to the Model Code for Securities Transactions by Directors - The company confirms full compliance with the **Corporate Governance Code** since its listing date[55](index=55&type=chunk)[58](index=58&type=chunk) [Interim Dividend and Investments](index=12&type=section&id=INTERIM%20DIVIDEND) The Board does not recommend an interim dividend for the six months ended June 30, 2020, and the company made no significant acquisitions, disposals, or held any material investments during the reporting period - The Board decided **not to declare an interim dividend for 2020**[57](index=57&type=chunk) [Disclosure of Interests](index=13&type=section&id=DISCLOSURE%20OF%20INTERESTS) As of June 30, 2020, Mr. Chan Sing Ming Barry and Ms. Law Miu Lan, through Charming International Limited, jointly held 1,404,000,000 shares, representing 70.2% of the issued share capital, while Mr. Chan Tsz Fung beneficially owned 12,000,000 shares, or 0.6% Shareholdings of Directors and Major Shareholders | Shareholder Name | Capacity/Nature of Interest | Number of Shares Held | Approximate Percentage of Total Share Capital | | :--- | :--- | :--- | :--- | | Mr. Chan Sing Ming Barry | Interest in controlled corporation | 1,404,000,000 | 70.2% | | Ms. Law Miu Lan | Interest in controlled corporation | 1,404,000,000 | 70.2% | | Charming International | Beneficial interest | 1,404,000,000 | 70.2% | [Audit Committee and Financial Information Review](index=16&type=section&id=AUDIT%20COMMITTEE%20AND%20REVIEW) The Audit Committee and independent auditor Ernst & Young have reviewed the unaudited interim condensed consolidated financial information for the six months ended June 30, 2020, confirming its compliance with applicable accounting standards and adequate disclosure - Both the **Audit Committee and independent auditor Ernst & Young** have reviewed the financial report for the period, deeming it compliant with applicable accounting standards and adequately disclosed[86](index=86&type=chunk)[87](index=87&type=chunk)[91](index=91&type=chunk) [Independent Review Report](index=18&type=section&id=Independent%20Review%20Report) This section presents the independent auditor's findings and conclusion regarding the interim condensed consolidated financial information [Auditor's Conclusion](index=18&type=section&id=Auditor%27s%20Conclusion) Independent auditor Ernst & Young reviewed the interim condensed consolidated financial information in accordance with Hong Kong Review Engagements Standards, concluding that nothing came to their attention suggesting the financial information was not prepared in all material respects in accordance with HKAS 34 - Independent auditor **Ernst & Young** issued an **unmodified review conclusion**, finding no material non-compliance issues in the financial information[107](index=107&type=chunk)[109](index=109&type=chunk) [Interim Condensed Consolidated Financial Statements](index=19&type=section&id=Interim%20Condensed%20Consolidated%20Financial%20Statements) This section presents the company's key financial statements, including the profit or loss, financial position, and cash flow statements for the interim period [Interim Condensed Consolidated Statement of Profit or Loss](index=19&type=section&id=Interim%20Condensed%20Consolidated%20Statement%20of%20Profit%20or%20Loss) For the six months ended June 30, 2020, revenue was HK$114 million, down 33.3%, with gross profit at HK$58.58 million and a slight gross margin increase, but a pre-tax loss of HK$10.6 million and a net loss of HK$11.84 million resulted from HK$10.61 million in one-off listing expenses Condensed Statement of Profit or Loss (For the six months ended June 30) | Item (HK$ thousand) | 2020 (Unaudited) | 2019 (Unaudited) | | :--- | :--- | :--- | | Revenue | 114,008 | 171,005 | | Gross Profit | 58,578 | 86,967 | | Profit/(Loss) before tax | (10,602) | 15,245 | | Profit/(Loss) for the period | (11,838) | 11,265 | | Attributable to owners of the Company | (11,838) | 10,114 | | Basic loss/earnings per share (HK cents) | (0.66) | 0.67 | [Interim Condensed Consolidated Statement of Financial Position](index=21&type=section&id=Interim%20Condensed%20Consolidated%20Statement%20of%20Financial%20Position) As of June 30, 2020, total assets were HK$340.5 million, total liabilities HK$123.8 million, and net assets HK$216.8 million, with significant increases in total and net assets primarily due to IPO proceeds boosting cash and cash equivalents to HK$123.8 million, improving the current ratio and strengthening the financial structure Condensed Statement of Financial Position (HK$ thousand) | Item | June 30, 2020 (Unaudited) | December 31, 2019 (Audited) | | :--- | :--- | :--- | | Total non-current assets | 133,031 | 136,352 | | Total current assets | 207,498 | 150,048 | | Total current liabilities | 89,772 | 108,577 | | Net current assets | 117,726 | 41,471 | | Net assets | 216,770 | 143,970 | | Total equity | 216,770 | 143,970 | [Interim Condensed Consolidated Statement of Cash Flows](index=24&type=section&id=Interim%20Condensed%20Consolidated%20Statement%20of%20Cash%20Flows) In H1 2020, operating activities generated a net cash inflow of HK$3.38 million, investing activities a net outflow of HK$3.28 million, and financing activities a net inflow of HK$80.11 million, primarily from IPO proceeds of HK$95.56 million, resulting in a significant increase in period-end cash and cash equivalents to HK$123.8 million Condensed Statement of Cash Flows (For the six months ended June 30, HK$ thousand) | Item | 2020 (Unaudited) | 2019 (Unaudited) | | :--- | :--- | :--- | | Net cash generated from operating activities | 3,379 | 26,647 | | Net cash flows used in investing activities | (3,278) | (8,985) | | Net cash flows from/(used in) financing activities | 80,112 | (11,828) | | Net increase in cash and cash equivalents | 80,213 | 5,834 | | Cash and cash equivalents at beginning of period | 43,807 | 22,958 | | Cash and cash equivalents at end of period | 123,831 | 28,753 | [Notes to Interim Condensed Consolidated Financial Information](index=26&type=section&id=Notes%20to%20Interim%20Condensed%20Consolidated%20Financial%20Information) This section provides detailed explanatory notes supporting the interim condensed consolidated financial statements, covering segment information and share capital changes [Operating Segment and Geographical Information](index=28&type=section&id=3.%20OPERATING%20SEGMENT%20INFORMATION) The group operates a single reportable segment: the production and sale of printed products; geographically, Hong Kong and Mainland China were the largest markets in H1 2020, contributing HK$33.28 million and HK$30.88 million in revenue, respectively, with 67% of non-current assets located in Mainland China Revenue from External Customers by Geographical Location (For the six months ended June 30) | Region | 2020 (HK$ thousand) | 2019 (HK$ thousand) | | :--- | :--- | :--- | | Hong Kong | 33,284 | 45,726 | | Mainland China | 30,879 | 47,797 | | Bangladesh | 11,579 | 17,155 | | Vietnam | 7,497 | 10,716 | | United States | 8,791 | 8,908 | | Others | 21,978 | 40,703 | | **Total** | **114,008** | **171,005** | [Share Capital Changes](index=36&type=section&id=12.%20SHARE%20CAPITAL) During the period, the company's share capital underwent significant changes, including an increase in authorized share capital and a capitalization issue on February 21, 2020, followed by the issuance of 500,000,000 new ordinary shares at HK$0.25 each upon listing on March 12, resulting in 2,000,000,000 issued and fully paid shares totaling HK$20 million as of June 30, 2020 - The company listed on the **HKEX Main Board on March 12, 2020**, issuing **500 million ordinary shares at HK$0.25 per share**[217](index=217&type=chunk)[219](index=219&type=chunk) Summary of Share Capital Changes | Date | Event | Number of Shares Issued | Share Capital (HK$ thousand) | | :--- | :--- | :--- | :--- | | December 31, 2019 | Beginning of period | 250 | ~0 | | February 21, 2020 | Capitalization issue | 1,500,000,000 | 15,000 | | March 12, 2020 | Share offer | 2,000,000,000 | 20,000 |