Financial Performance - For the three months ended March 31, 2020, the company reported revenue of HKD 19,721,000, a decrease of 25.9% compared to HKD 26,568,000 for the same period in 2019[4] - The gross profit for the same period was HKD 5,213,000, down 54.4% from HKD 11,407,000 in the previous year[4] - The company recorded a loss before tax of HKD 7,734,000, compared to a loss of HKD 2,222,000 in the prior year, representing a significant increase in losses[4] - The net loss for the period was HKD 7,740,000, compared to a net loss of HKD 2,317,000 in the same quarter of 2019, indicating a year-over-year increase of 233.5%[4] - Basic and diluted loss per share for the period was HKD 1.94, compared to HKD 0.57 for the same period last year[4] - The company reported total comprehensive loss of HKD 7,735,000 for the period, compared to a total comprehensive loss of HKD 2,324,000 in the previous year[4] - The company's revenue for the three months ended March 31, 2020, was approximately HKD 19.7 million, a decrease of about 25.8% compared to HKD 26.6 million for the same period in 2019[22] - The gross profit decreased from approximately HKD 11.4 million for the three months ended March 31, 2019, to approximately HKD 5.2 million for the same period in 2020, representing a decline of about 54.3%[26] - The company reported a loss attributable to owners of approximately HKD 7.8 million for the three months ended March 31, 2020, compared to a loss of HKD 2.3 million for the same period in 2019[20] - The group's loss increased from approximately HKD 2.3 million for the three months ended March 31, 2019, to approximately HKD 7.7 million for the three months ended March 31, 2020, representing an increase of approximately 234.1% or about HKD 5.4 million, primarily due to a decrease in gross profit[31] Expenses and Costs - The company’s financing costs increased to HKD 801,000 from HKD 11,000 in the previous year, indicating a significant rise in financial expenses[4] - The company's sales expenses decreased by approximately 31.0% from HKD 3.3 million for the three months ended March 31, 2019, to HKD 2.3 million for the same period in 2020[27] - Administrative expenses decreased from approximately HKD 10.3 million for the three months ended March 31, 2019, to HKD 9.7 million for the same period in 2020, a reduction of about 6.0%[28] - The income tax expense decreased by approximately 93.7% from HKD 95,000 for the three months ended March 31, 2019, to HKD 6,000 for the same period in 2020[30] Shareholder Information - As of March 31, 2020, major shareholders HM Ultimate held 297,045,000 shares, representing approximately 74.26% of the company's total issued shares[38] - The company had no share options granted, exercised, lapsed, or cancelled during the three months ended March 31, 2020, with a total of 1,200,000 share options remaining unexercised[40] - There were no purchases, sales, or redemptions of the company's listed securities by the company or any of its subsidiaries during the three months ended March 31, 2020[41] Corporate Governance - The company confirmed compliance with all corporate governance codes applicable during the three months ended March 31, 2020[42] - No directors, management, or controlling shareholders participated in any competing businesses or had any conflicts of interest during the three months ended March 31, 2020[43] - The company adopted the GEM Listing Rules for securities trading standards, and all directors confirmed compliance during the three months ended March 31, 2020[44] - The Audit Committee was established on December 15, 2016, to oversee financial reporting processes and risk management[46] - The Audit Committee consists of three independent non-executive directors, including Mr. Wu Haoyun as the chairman[46] - The committee reviewed the accounting principles adopted by the group and discussed audit, risk management, and internal control matters[46] - The group reviewed its unaudited condensed consolidated financial statements for the three months ended March 31, 2020[46] Business Outlook - The company has not disclosed any new product developments or market expansion strategies during this reporting period[4] - The company continues to operate in the integrated printing services sector, focusing on financial printing and marketing-related products[7] - The company is optimistic about maintaining its core business despite economic uncertainties and is actively seeking business development opportunities through mergers and existing customer bases[23] Dividends - The company did not propose any dividend for the three months ended March 31, 2020, consistent with the previous year[19] - The board did not propose any dividend for the three months ended March 31, 2020, consistent with the previous year[32]

Business Strategy and Operations - The company reported a focus on maintaining a robust core business despite challenges, emphasizing technology development and customer service [10] - The company has diversified its client base, including listed companies, multinational financial institutions, and private companies from various sectors [11] - The technology division is rapidly expanding, with increasing demand for services such as website redesign, video editing, app development, and interactive marketing [11] - The company aims to simplify and automate workflows while enhancing IT development to create digital innovation opportunities [12] - The operational platform has been enhanced to allow flexible remote work, attracting talent and simplifying existing workflows [10] - The company has opened a subsidiary in Taiwan to support its operations and accelerate business development [11] - The company continues to invest resources in technology research and development to provide more flexibility in its operations [10] - The company aims to maintain a diversified business model and leverage its existing customer base for future growth opportunities amid economic uncertainties [32] - The company is focused on expanding its service offerings in financial printing and IT solutions [62] Financial Performance - The company's revenue for the year ended December 31, 2019, was approximately HKD 130.5 million, a slight decrease from HKD 130.8 million in 2018, primarily due to a 20.2% drop in revenue from marketing peripheral printing projects [21] - Financial printing project revenue increased from approximately HKD 114.0 million in 2018 to approximately HKD 116.7 million in 2019, offsetting some losses from other segments [21] - The gross profit decreased from approximately HKD 60.9 million in 2018 to approximately HKD 58.5 million in 2019, a decline of about 4.0% [24] - The net profit after tax fell significantly from approximately HKD 7.2 million in 2018 to approximately HKD 2.5 million in 2019, a decrease of about 64.7% [30] - The company's total assets increased to approximately HKD 132.8 million in 2019 from HKD 107.3 million in 2018, while total equity rose to approximately HKD 87.6 million from HKD 84.9 million [33] - The current ratio decreased to approximately 3.3 times in 2019 from 4.4 times in 2018, indicating a decline in liquidity [33] - The company reported a significant increase in overall financial performance, with a year-on-year revenue growth of 15% in the last fiscal year [48] Investments and Acquisitions - The company has agreed to acquire a 22.85% stake in Wordbee S.A., a Luxembourg-based software company, to enhance translation processes and develop computer-assisted translation tools [11] - The company acquired a 22.85% stake in Wordbee S.A. for a total cash consideration of EUR 1 million (approximately HKD 8.7 million), with EUR 0.5 million (approximately HKD 4.4 million) paid as of December 31, 2019, representing 12.9% of the equity [41] - The company is considering strategic acquisitions to bolster its service offerings, with a budget of $10 million earmarked for potential targets [51] Employee and Workforce Management - As of December 31, 2019, the total employee cost, including directors' remuneration, was approximately HKD 46.8 million, an increase from approximately HKD 43.1 million in 2018 [37] - The company employed a total of 145 employees as of December 31, 2019, compared to 119 in 2018, indicating a growth in workforce [37] - The company recognizes employees as valuable assets and provides competitive compensation to attract and retain talent [87] Corporate Governance - The company has a strong management team with extensive experience in accounting, finance, and corporate governance [59] - The independent non-executive directors have significant backgrounds in auditing and legal fields, enhancing the company's oversight capabilities [55] - The management team is committed to maintaining high standards of corporate governance and financial reporting [59] - The board consists of three executive directors and three independent non-executive directors, meeting the GEM Listing Rules requirements [139] - The board of directors is committed to maintaining high standards of corporate governance, which is crucial for protecting shareholder interests and enhancing company value [136] Risk Management and Compliance - The company has established a risk management policy to identify and assess key business risks, with departments responsible for quarterly risk evaluations [171] - The board is responsible for reviewing the effectiveness of the risk management and internal control systems, ensuring they align with the company's risk tolerance [173] - The audit committee's responsibilities include reviewing financial reporting processes and risk management systems [155] Shareholder Relations - The company emphasizes effective communication with shareholders to strengthen investor relations and enhance understanding of business performance and strategies [181] - The company has established a website as a communication platform for shareholders, providing information on business development and operations [181] - The company is committed to maintaining shareholder privacy and will not disclose personal information without consent unless legally required [182] Sustainability Initiatives - The management team emphasized the importance of sustainability initiatives, aiming to reduce operational costs by 15% through eco-friendly practices [48] - The group has integrated sustainability into its daily operations, including investments in technology to support remote work and reduce paper usage through electronic document management [67] - The group has implemented various environmental impact mitigation measures, including obtaining FSC certification for most office paper used [67]

Financial Performance - For the three months ended September 30, 2019, the company reported revenue of HKD 28,551,000, a decrease of 8.7% compared to HKD 31,275,000 for the same period in 2018[5] - Gross profit for the three months ended September 30, 2019, was HKD 11,843,000, down 15.8% from HKD 14,075,000 in the previous year[5] - The company recorded a loss before tax of HKD 2,337,000 for the three months ended September 30, 2019, compared to a profit of HKD 1,172,000 in the same period of 2018[5] - The net loss attributable to owners of the company for the three months ended September 30, 2019, was HKD 2,213,000, compared to a profit of HKD 827,000 in the prior year[6] - For the nine months ended September 30, 2019, total revenue increased to HKD 104,314,000, up 2.7% from HKD 101,634,000 in 2018[5] - The gross profit for the nine months ended September 30, 2019, was HKD 46,731,000, slightly down from HKD 46,949,000 in the same period of 2018[5] - The company reported a profit for the nine months ended September 30, 2019, of HKD 4,269,000, a decrease of 36.2% from HKD 6,687,000 in the previous year[6] - The company’s total comprehensive income for the nine months ended September 30, 2019, was HKD 4,262,000, down from HKD 6,687,000 in the previous year[6] Earnings Per Share - Basic and diluted loss per share for the three months ended September 30, 2019, was HKD (0.55), compared to earnings of HKD 0.21 per share in the same period of 2018[6] - The basic and diluted loss per share for the three months ended September 30, 2019, was HKD (0.55), compared to HKD 0.21 for the same period in 2018[21] Expenses - Total employee benefit expenses for the nine months ended September 30, 2019, amounted to HKD 35.132 million, an increase from HKD 31.518 million in the same period of 2018[18] - Selling expenses increased by approximately HKD 79,000, or 0.9%, to approximately HKD 8.9 million for the nine months ended September 30, 2019[30] - Administrative expenses increased by approximately HKD 1.4 million, or 4.7%, to approximately HKD 31.1 million for the nine months ended September 30, 2019[31] Dividends - The company did not propose any dividend for the nine months ended September 30, 2019, compared to zero in the same period of 2018[19] - The group did not propose any dividend for the nine months ended September 30, 2019, compared to a dividend of HKD 10 million for the six months ended June 30, 2018[35] Tax and Compliance - The company’s income tax expense for the nine months ended September 30, 2019, was HKD 1.704 million, a decrease from HKD 1.933 million in the same period of 2018[16] - The company has complied with all applicable codes of the corporate governance code as of September 30, 2019[47] - The company has adopted the GEM Listing Rules regarding securities trading standards for its directors[49] Business Operations - The company continues to focus on expanding its integrated printing services, including financial printing and marketing collateral printing[11] - Revenue from financial printing projects increased by approximately HKD 5.3 million during the same period[24] - The company acquired a 22.85% stake in Luxembourg-based software technology company Wordbee S.A. in August 2019, which is expected to enhance the development of translation processes and computer-assisted translation tools[24] Stock Options - As of September 30, 2019, a total of 1,200,000 stock options remain unexercised, consisting of 25,000 from Group A and 1,175,000 from Group B[44] - No stock options were granted under the plan during the nine months ended September 30, 2019, and no options were exercised during this period[44] - No stock options were exercised in 2018, and the same was true for the nine months ended September 30, 2019[44] Financial Position - The company’s total assets and liabilities are primarily located in Hong Kong, with no independent segment reporting[15] - The implementation of new Hong Kong Financial Reporting Standards did not have a significant impact on the financial performance and position of the company during the reporting period[14] - The group has no significant contingent liabilities as of September 30, 2019[34] Outlook and Risks - The group maintains an optimistic outlook despite economic uncertainties in 2019, focusing on core business and seeking development opportunities[25] - The group will continue to review and monitor foreign exchange risks as needed, although it currently does not have significant exposure[36] Audit and Governance - The audit committee, consisting of three independent non-executive directors, reviewed the unaudited condensed consolidated financial statements for the nine months ended September 30, 2019[51] - The company has not identified any violations of the employee written guidelines regarding securities trading during the nine months ended September 30, 2019[49] - There were no interests in competing businesses held by directors or controlling shareholders as of September 30, 2019[48]

Financial Performance - For the three months ended June 30, 2019, the revenue was HKD 49,195,000, representing an increase of 6.3% compared to HKD 46,235,000 for the same period in 2018[6]. - The gross profit for the six months ended June 30, 2019, was HKD 34,888,000, up 6.1% from HKD 32,874,000 in the previous year[6]. - The profit for the period attributable to owners of the company for the six months ended June 30, 2019, was HKD 6,554,000, an increase of 11.8% from HKD 5,860,000 in 2018[6]. - The total revenue for the six months ended June 30, 2019, was HKD 75,763,000, up from HKD 70,359,000 in 2018, marking an increase of approximately 7.1%[24]. - Revenue from financial printing services rose to HKD 70,688,000 in 2019, compared to HKD 64,182,000 in 2018, representing an increase of about 10.5%[24]. - The total comprehensive income for the six months ended June 30, 2019, was HKD 6,471,000, compared to HKD 5,860,000 for the same period in 2018, marking an increase of 10.4%[7]. - Basic and diluted earnings per share for the six months ended June 30, 2019, were HKD 1.64, up from HKD 1.47 in the same period of 2018[34]. - The company reported a basic and diluted earnings per share of HKD 2.21 for the three months ended June 30, 2019, compared to HKD 2.15 for the same period in 2018[7]. - Net profit after tax increased by approximately HKD 0.6 million, or 10.5%, from approximately HKD 5.9 million for the six months ended June 30, 2018, to approximately HKD 6.5 million for the six months ended June 30, 2019[52]. Assets and Liabilities - The total assets as of June 30, 2019, amounted to HKD 125,529,000, compared to HKD 107,312,000 as of December 31, 2018, reflecting a growth of 16.9%[9]. - The net asset value attributable to owners of the company increased to HKD 91,479,000 as of June 30, 2019, from HKD 84,936,000 at the end of 2018, representing a rise of 7.2%[10]. - Trade receivables as of June 30, 2019, were HKD 32.0 million, compared to HKD 25.5 million as of December 31, 2018[37]. - Trade payables as of June 30, 2019, were HKD 16.9 million, an increase from HKD 11.5 million as of December 31, 2018[39]. - Current assets rose to approximately HKD 115.1 million as of June 30, 2019, from approximately HKD 98.7 million as of December 31, 2018[56]. - The group’s debt-to-equity ratio was approximately 3.0% as of June 30, 2019[61]. Cash Flow - For the six months ended June 30, 2019, the net cash used in operating activities was HKD (991,000), compared to HKD 172,000 for the same period in 2018, representing a significant decline[15]. - The net cash generated from investing activities increased to HKD 2,853,000 in 2019 from HKD 2,698,000 in 2018, indicating a positive trend in investment returns[15]. - The net cash used in financing activities was HKD (398,000) for the first half of 2019, compared to HKD (212,000) in the same period of 2018, reflecting increased financing costs[15]. - The total cash and cash equivalents at the end of the period increased to HKD 60,225,000 from HKD 64,941,000 year-over-year, showing a decrease of approximately 7.5%[15]. - The company’s cash and bank balances stood at HKD 60,225,000 as of June 30, 2019, compared to HKD 58,761,000 at the end of 2018, showing a slight increase of 2.5%[9]. Expenses - The company’s administrative expenses for the six months ended June 30, 2019, were HKD 20,441,000, up from HKD 19,772,000 in the previous year, reflecting a rise of 3.4%[6]. - Total employee benefits expenses for the six months ended June 30, 2019, amounted to HKD 23.2 million, an increase from HKD 21.1 million in 2018[30]. - Selling expenses increased by approximately HKD 0.7 million, or 11.4%, from approximately HKD 5.8 million for the six months ended June 30, 2018, to approximately HKD 6.4 million for the six months ended June 30, 2019[48]. - Administrative expenses rose by approximately HKD 0.7 million, or 3.4%, from approximately HKD 19.8 million for the six months ended June 30, 2018, to approximately HKD 20.4 million for the six months ended June 30, 2019[50]. Corporate Governance and Compliance - The company has complied with all corporate governance codes as per GEM Listing Rules during the six months ending June 30, 2019[72]. - The audit committee, consisting of three independent non-executive directors, reviewed the unaudited condensed consolidated financial statements for the six months ending June 30, 2019[78]. - No directors or major shareholders participated in any competing business during the six months ending June 30, 2019[74]. - The company did not purchase, sell, or redeem any of its listed securities in the six months ending June 30, 2019[71]. Future Outlook and Strategy - The company continues to focus on enhancing its financial printing services and expanding its market presence in Hong Kong[24]. - The company plans to continue seeking business development opportunities and explore potential acquisitions to strengthen its revenue base[42]. - The company maintains a positive outlook despite economic uncertainties, focusing on core business and potential growth opportunities[42]. Shareholder Information - As of June 30, 2019, HM Ultimate holds 297,000,000 shares, representing 74.25% of the company's issued voting shares[68]. - Mr. Yu, Mr. Xie, and Mr. Chen beneficially own 53.0%, 24.5%, and 22.5% of HM Ultimate, respectively[69]. - No share options were granted in the six months ending June 30, 2019, and 50,000 options expired during this period[70]. - The total amount of share-based payments recognized for the six months ended June 30, 2019, was approximately HKD 72,000, up from HKD 54,000 in the same period of 2018[32].

Financial Performance - Revenue for the three months ended March 31, 2019, was HKD 26,568,000, representing an increase of 10.1% compared to HKD 24,124,000 for the same period in 2018[4] - Gross profit for the same period was HKD 11,407,000, up 16.8% from HKD 9,760,000 year-on-year[4] - The company reported a loss before tax of HKD 2,222,000, an improvement from a loss of HKD 2,676,000 in the previous year, indicating a reduction in losses by 17%[4] - The net loss attributable to owners of the company for the period was HKD 2,273,000, compared to HKD 2,736,000 in the prior year, reflecting a decrease in loss of 16.9%[4] - Basic and diluted loss per share for the period was HKD 0.57, an improvement from HKD 0.68 in the same quarter of 2018[4] - The company recorded revenue of approximately HKD 26.6 million for the three months ended March 31, 2019, representing a 10.1% increase compared to HKD 24.1 million in the same period last year[26] - Revenue from financial printing services increased by approximately HKD 2.6 million, contributing significantly to the overall revenue growth[26] - The company reported a loss attributable to owners of approximately HKD 2.3 million for the three months ended March 31, 2019, compared to a loss of HKD 2.7 million in the same period last year[24] - The group's revenue increased by approximately HKD 2.4 million, or 10.1%, from approximately HKD 24.1 million for the three months ended March 31, 2018, to approximately HKD 26.6 million for the three months ended March 31, 2019[29] - Gross profit rose from approximately HKD 9.8 million to approximately HKD 11.4 million, an increase of about HKD 1.6 million or 16.9%, primarily due to increased revenue from financial printing projects[30] - The gross profit margin improved from approximately 40.5% to 42.9% for the respective periods[30] - The group's loss decreased by approximately HKD 0.4 million, or 15.3%, from approximately HKD 2.7 million to approximately HKD 2.3 million, primarily due to increased gross profit[35] Expenses and Costs - Employee benefits expenses totaled HKD 11.3 million for the period, an increase from HKD 10.5 million in the previous year[20] - Selling expenses increased by approximately HKD 0.8 million, or 30.0%, from approximately HKD 2.6 million to approximately HKD 3.3 million, mainly due to higher employee costs[31] - Administrative expenses rose by approximately HKD 0.3 million, or 2.7%, from approximately HKD 10.0 million to approximately HKD 10.3 million, primarily due to increased salaries and wages[33] - Income tax expense increased by approximately HKD 35,000, or 58.3%, from approximately HKD 60,000 to approximately HKD 95,000, mainly due to an increase in profit before tax[34] Shareholder Information - As of March 31, 2019, major shareholders collectively held 74.25% of the company's shares, with Mr. Yu, Mr. Xie, and Mr. Chen each holding significant interests[38] - The company did not grant any share options during the three months ended March 31, 2019, and no options were exercised or cancelled during the same period[45] Corporate Governance - The company has complied with all provisions of the corporate governance code as of March 31, 2019[47] - No directors, management, or controlling shareholders participated in any competing business during the three months ending March 31, 2019[49] - The company has adopted trading standards for securities transactions as per GEM Listing Rules, with no violations reported by employees during the three months ending March 31, 2019[50] - The Audit Committee, established on December 15, 2016, reviews the financial reporting process and risk management, and has discussed the unaudited consolidated financial statements for the three months ending March 31, 2019[53] Strategic Focus and Operations - The company continues to focus on providing integrated printing services, including financial printing and marketing collateral[7] - The company is registered in the Cayman Islands and primarily operates in Hong Kong, indicating a strategic focus on the Asian market[7] - The company remains optimistic about maintaining its core business despite economic uncertainties in 2019, focusing on leveraging existing client relationships and expanding business collaborations[27] - The company has implemented a review of internal workflows and procedures to enhance its core structure in response to increasing competition and information security concerns[27] Compliance and Accounting Standards - The financial statements have been prepared in accordance with the Hong Kong Financial Reporting Standards, ensuring compliance with applicable regulations[8] - The company has adopted new accounting standards, which did not have a significant impact on the financial performance for the period[10] - The company adopted HKFRS 16 for leases, which impacts the measurement of lease liabilities and right-of-use assets[12] - The effective tax rate for Hong Kong profits tax was calculated at 16.5%, with a two-tiered system applied for qualifying group entities[17] - The company did not propose any dividends for the three months ended March 31, 2019[22] - No dividends were proposed for the three months ended March 31, 2019, and 2018[36]

[Company Information](index=4&type=section&id=Company%20Information) HM International Holdings Limited's board composition, key officers, committee structures, and essential corporate details are presented - The Board comprises **3 executive directors** (Yu Chi Ming, Tse Kam Wing, Chan Wai Lim) and **3 independent non-executive directors** (Ng Ho Wan, Choi Hon Ting, Wan Chi Wai)[6](index=6&type=chunk) - The Audit Committee is chaired by Ng Ho Wan, the Remuneration Committee by Choi Hon Ting, and the Nomination Committee by Wan Chi Wai[6](index=6&type=chunk) - The company's stock code is **8416**[7](index=7&type=chunk) [Chairman's Statement](index=5&type=section&id=Chairman's%20Statement) The Chairman's Statement highlights 2018 as a challenging year, yet core business remained stable with continued focus on technology, customer service, and talent management - Despite challenges in 2018, core business remained stable, and the company successfully obtained **ISO 27001 certification** to enhance information security[8](index=8&type=chunk) - The company provides financial printing, marketing collateral printing, and new media value-added services (e.g., website design, video production, e-books, and app development)[9](index=9&type=chunk) - For 2019, the company plans to maintain core business, focus on IT development, explore new opportunities, and integrate traditional printing with new media services[12](index=12&type=chunk) [Management Discussion and Analysis](index=7&type=section&id=Management%20Discussion%20and%20Analysis) This section reviews HM International Holdings Limited's 2018 business and financial performance, noting a 12.0% revenue decrease to HK$130.8 million due to reduced marketing collateral printing, despite a slight increase in gross profit margin - The company primarily provides integrated printing services for Hong Kong's financial and capital markets, including financial printing and marketing collateral printing[15](index=15&type=chunk) - Approximately **73.5% of customers were recurring clients** in 2018, contributing about **85.3% of total revenue**[15](index=15&type=chunk) - The company obtained **ISO 27001 certification** in 2018, enhancing client confidence[32](index=32&type=chunk) [Business Review](index=7&type=section&id=Business%20Review) The business review indicates stable financial printing revenue in 2018, but a significant 56.9% decline in marketing collateral printing revenue led to a 12.0% overall revenue decrease - In 2018, approximately **73.5% of customers were recurring clients**, contributing about **85.3% of total revenue**[15](index=15&type=chunk) Revenue by Product Line | Product Line | 2018 Revenue (HK$ thousand) | 2017 Revenue (HK$ thousand) | YoY Change | | :--- | :--- | :--- | :--- | | Financial Printing Projects | 113,981 | 112,675 | +1.2% | | Marketing Collateral Printing Projects | 14,017 | 32,531 | -56.9% | | Other Projects | 2,794 | 3,405 | -17.9% | | **Total Revenue** | **130,792** | **148,611** | **-12.0%** | [Financial Review](index=9&type=section&id=Financial%20Review) The financial review shows a 12.0% revenue decrease to HK$130.8 million in 2018, primarily due to reduced marketing collateral printing, while gross profit margin slightly increased to 46.6% and profit for the year decreased by 27.8% - Total revenue in 2018 was **HK$130.8 million**, a **12.0% decrease** from HK$148.6 million in 2017, mainly due to fewer marketing collateral printing projects[23](index=23&type=chunk)[24](index=24&type=chunk) - Gross profit in 2018 was **HK$60.9 million**, a **9.1% decrease** year-on-year, with a gross profit margin of **46.6%**, up from 45.1% in 2017[26](index=26&type=chunk) Key Financial Indicators | Indicator | 2018 (HK$ thousand) | 2017 (HK$ thousand) | YoY Change | | :--- | :--- | :--- | :--- | | Selling Expenses | 11,979 | 11,152 | +7.4% | | Administrative Expenses | 40,793 | 43,600 | -6.4% | | Income Tax Expense | 985 | 2,517 | -60.9% | | Profit for the Year | 7,162 | 9,922 | -27.8% | [Financial Resources, Liquidity, and Gearing Ratio](index=11&type=section&id=Financial%20Resources,%20Liquidity,%20and%20Gearing%20Ratio) As of December 31, 2018, total assets decreased to HK$107.3 million and total equity to HK$84.9 million, while the current ratio improved to 4.4 times, indicating enhanced liquidity with zero gearing - In 2018, total assets were approximately **HK$107.3 million** (2017: HK$115.4 million), and total equity was approximately **HK$84.9 million** (2017: HK$87.9 million)[33](index=33&type=chunk) - Current assets were approximately **HK$98.7 million** and current liabilities approximately **HK$22.2 million** in 2018, resulting in a current ratio of approximately **4.4 times** (2017: 3.8 times)[33](index=33&type=chunk) - The gearing ratio was **zero** in 2018 (2017: 0.3%)[33](index=33&type=chunk) [Capital Expenditure, Material Investments, and Contingent Liabilities](index=12&type=section&id=Capital%20Expenditure,%20Material%20Investments,%20and%20Contingent%20Liabilities) Capital expenditure significantly decreased to approximately HK$1.2 million in 2018, and the Group held no material investments or contingent liabilities as of December 31, 2018 - Capital expenditure in 2018 was approximately **HK$1.2 million**, a significant decrease from HK$12.1 million in 2017[34](index=34&type=chunk) - As of December 31, 2018, the Group held **no material investments**[35](index=35&type=chunk) - As of December 31, 2018, the Group had **no material contingent liabilities**[36](index=36&type=chunk) [Employees and Remuneration Policy](index=12&type=section&id=Employees%20and%20Remuneration%20Policy) As of December 31, 2018, the Group employed 119 staff with total staff costs of HK$43.1 million, and remuneration policies are based on performance and market factors, with 1,560,000 share options granted in 2018 - As of December 31, 2018, **116 employees were in Hong Kong** and **3 in China**, totaling **119 employees**[37](index=37&type=chunk) - Total staff costs (including directors' emoluments) were approximately **HK$43.1 million** in 2018, slightly lower than HK$43.4 million in 2017[37](index=37&type=chunk) - On March 16, 2018, **1,560,000 share options** were granted to employees under the share option scheme[37](index=37&type=chunk) [Indebtedness and Pledge of Group Assets](index=12&type=section&id=Indebtedness%20and%20Pledge%20of%20Group%20Assets) As of December 31, 2018, assets with a carrying amount of approximately HK$4.0 million were pledged to secure general banking facilities, a reduction from HK$7.6 million in 2017 - As of December 31, 2018, approximately **HK$4.0 million of assets were pledged** for banking facilities, down from HK$7.6 million in 2017[38](index=38&type=chunk) [Foreign Exchange Risk](index=13&type=section&id=Foreign%20Exchange%20Risk) The Group's operations are primarily Hong Kong-based with transactions denominated in HKD, leading directors to believe there is no significant foreign exchange risk, thus no hedging arrangements were made in 2018 - Operations are primarily in Hong Kong, with transactions denominated in HKD, and only a small portion of bank deposits are in USD and RMB[41](index=41&type=chunk) - Directors believe the Group is not exposed to significant foreign exchange risk, and no hedging arrangements were made in 2018[41](index=41&type=chunk) [Use of Proceeds from Placing](index=13&type=section&id=Use%20of%20Proceeds%20from%20Placing) Net proceeds from the January 11, 2017 placing amounted to approximately HK$40.0 million, with HK$25.2 million utilized by December 31, 2018, mainly for new offices, facility improvements, IT systems, and staff expansion - Net proceeds from the placing were approximately **HK$40.0 million**[42](index=42&type=chunk) Use of Placing Proceeds | Purpose | Intended Use (HK$ thousand) | Actual Use (HK$ thousand) | | :--- | :--- | :--- | | Establishment of new office and improvement of facilities | 17,487 | 15,297 | | Enhancement of IT systems and infrastructure | 14,962 | 6,106 | | Expansion of staff team | 3,817 | 3,794 | | **Total** | **36,266** | **25,197** | [Comparison of Business Objectives with Actual Business Progress](index=14&type=section&id=Comparison%20of%20Business%20Objectives%20with%20Actual%20Business%20Progress) The Group will continue to invest in information technology systems and infrastructure to achieve the business objectives outlined in the prospectus - The Group will continue to invest in information technology systems and infrastructure[45](index=45&type=chunk) [Directors and Senior Management](index=15&type=section&id=Directors%20and%20Senior%20Management) This section details the biographies of HM International Holdings Limited's executive directors, independent non-executive directors, and senior management, highlighting their extensive industry experience and professional backgrounds - Executive Directors include Yu Chi Ming (Chairman, over 30 years of printing experience), Tse Kam Wing (Vice Chairman, over 30 years of printing experience), and Chan Wai Lim (Chief Executive Officer, over 14 years of financial printing experience)[47](index=47&type=chunk)[49](index=49&type=chunk) - Independent Non-Executive Directors include Choi Hon Ting (engineering machinery trade), Ng Ho Wan (accounting, auditing, asset management), and Wan Chi Wai (accounting, legal)[51](index=51&type=chunk)[53](index=53&type=chunk)[55](index=55&type=chunk) - Senior management includes Chan Wai Chung (Chief Operating Officer), Cheng Shuk Wah (Director of Outsourcing Management), and Yung Shuk Man (Financial Controller)[57](index=57&type=chunk)[59](index=59&type=chunk) [Report of the Directors](index=22&type=section&id=Report%20of%20the%20Directors) The Directors' Report outlines the Group's principal activities, business review, key risks, environmental policies, compliance, results, and dividend distribution for the 2018 financial year, along with details on share capital, share option scheme, stakeholder relations, and related party transactions - The Company is an investment holding company, with subsidiaries primarily providing financial printing, conceptual and graphic design, IT, and language services[62](index=62&type=chunk) - Key risks include fluctuating performance due to non-long-term contracts and potential service quality issues from outsourced production work[64](index=64&type=chunk)[66](index=66&type=chunk) - The Board does not recommend a final dividend for 2018 but paid an interim dividend of **HK2.5 cents per share**, totaling **HK$10 million**, on August 31, 2018[70](index=70&type=chunk) [Principal Activities and Business Review](index=22&type=section&id=Principal%20Activities%20and%20Business%20Review) The Company operates as an investment holding entity, with its subsidiaries primarily engaged in financial printing, design, IT, and language services, as detailed in the Management Discussion and Analysis - The Company is an investment holding company[62](index=62&type=chunk) - Subsidiaries are primarily engaged in providing financial printing services, conceptual and graphic design, information technology, and language services[62](index=62&type=chunk) [Key Risks and Uncertainties](index=22&type=section&id=Key%20Risks%20and%20Uncertainties) The Group faces key risks from the inability to secure long-term client contracts, leading to performance volatility, and potential impacts on service quality from outsourcing production work - Failure to secure long-term contracts, with projects often non-recurring, means performance is affected by financial market conditions, potentially hindering client retention or acquisition[64](index=64&type=chunk) - Outsourcing printing and binding/packaging work to third parties may affect overall service quality[66](index=66&type=chunk) [Environmental Policies and Compliance with Laws and Regulations](index=23&type=section&id=Environmental%20Policies%20and%20Compliance%20with%20Laws%20and%20Regulations) The Group is committed to sustainability, holding FSC Chain of Custody certification and promoting electronic documents, and has complied with all applicable Hong Kong laws and regulations in 2018 - The Group has obtained **FSC Chain of Custody certification** and encourages the use of electronic documents to reduce paper consumption[67](index=67&type=chunk) - For the year ended December 31, 2018, the Group complied with all material applicable Hong Kong laws and regulations concerning its business and operations[69](index=69&type=chunk) [Results and Appropriations](index=23&type=section&id=Results%20and%20Appropriations) The Group's 2018 financial results are presented in the consolidated statement of profit or loss and other comprehensive income, with no final dividend recommended, but an interim dividend of HK2.5 cents per share, totaling HK$10 million, was paid - The Board does not recommend a final dividend for 2018[70](index=70&type=chunk) - An interim dividend of **HK2.5 cents per share**, totaling **HK$10 million**, was paid in 2018[70](index=70&type=chunk) [Financial Summary and Reserves](index=24&type=section&id=Financial%20Summary%20and%20Reserves) The Group's five-year financial summary is on page 120, and as of December 31, 2018, distributable reserves were approximately HK$62.4 million, a decrease from HK$72.3 million in 2017 - As of December 31, 2018, distributable reserves were approximately **HK$62.4 million** (2017: HK$72.3 million)[74](index=74&type=chunk) [Share Capital and Share Option Scheme](index=24&type=section&id=Share%20Capital%20and%20Share%20Option%20Scheme) The Company's share capital remained stable in 2018, and the share option scheme, designed to reward contributors and attract talent, allows for up to 40,000,000 shares, with 1,560,000 options granted in 2018 at HK$0.70, of which 210,000 have lapsed - As of December 31, 2018, **400,000,000 issued and fully paid shares** amounted to **HK$4,000,000**[105](index=105&type=chunk) - The share option scheme aims to reward eligible participants and attract and retain high-caliber talent[79](index=79&type=chunk) - On March 16, 2018, **1,560,000 share options** were granted to employees at an exercise price of **HK$0.70**, with **210,000 options having lapsed**[81](index=81&type=chunk) [Relationship with Stakeholders](index=26&type=section&id=Relationship%20with%20Stakeholders) The Group values employees as key assets, offering competitive remuneration and development, maintains strong client relationships for project acquisition, and collaborates with suppliers to meet client demands, with the top five clients and suppliers contributing 22.1% and 49.5% of total revenue and purchases, respectively - The Group considers employees a vital asset, offering competitive remuneration and long-term career development[85](index=85&type=chunk)[89](index=89&type=chunk) - Most clients are listed companies and financial institutions, and the Group strives to meet their service needs to secure more large-scale projects[90](index=90&type=chunk) Key Stakeholder Contributions | Type | 2018 Percentage | 2017 Percentage | | :--- | :--- | :--- | | Top five clients' contribution to total revenue | 22.1% | 36.6% | | Largest client's contribution to total revenue | 6.9% | 13.3% | | Top five suppliers' contribution to total purchases | 49.5% | 71.6% | | Largest supplier's contribution to total purchases | 17.3% | 30.7% | [Connected Transactions and Exempt Continuing Connected Transactions](index=27&type=section&id=Connected%20Transactions%20and%20Exempt%20Continuing%20Connected%20Transactions) In 2018, the Group entered into a director's residence rental expense transaction with Tong Nian Development Limited, totaling HK$100,000, which constituted an exempt continuing connected transaction - In 2018, a director's residence rental expense of **HK$100,000** occurred with Tong Nian Development Limited (controlled by Mr. Yu)[95](index=95&type=chunk)[116](index=116&type=chunk) - This tenancy agreement constitutes an exempt continuing connected transaction under the GEM Listing Rules[95](index=95&type=chunk) [Directors' and Chief Executive's Interests](index=29&type=section&id=Directors'%20and%20Chief%20Executive's%20Interests) As of December 31, 2018, executive directors Yu Chi Ming, Tse Kam Wing, and Chan Wai Lim collectively held 74.25% of the Company's shares through HM Ultimate Holdings Limited - Yu Chi Ming, Tse Kam Wing, and Chan Wai Lim collectively held **297,000,000 shares**, representing **74.25% of the issued shares**, through HM Ultimate Holdings Limited[99](index=99&type=chunk) - Yu Chi Ming, Tse Kam Wing, and Chan Wai Lim beneficially owned **53%**, **24.5%**, and **22.5%** interests in HM Ultimate, respectively[100](index=100&type=chunk) [Substantial Shareholders' and Other Persons' Interests](index=30&type=section&id=Substantial%20Shareholders'%20and%20Other%20Persons'%20Interests) As of December 31, 2018, HM Ultimate Holdings Limited held 74.25% of the Company's shares, controlled by Yu Chi Ming, Tse Kam Wing, and Chan Wai Lim, whose spouses are also deemed to have interests in the same shares - HM Ultimate Holdings Limited held **297,000,000 shares**, representing **74.25%** of the Company[102](index=102&type=chunk) - The spouses of Yu Chi Ming, Tse Kam Wing, and Chan Wai Lim are deemed to have interests in the same shares by virtue of spousal interests[103](index=103&type=chunk)[104](index=104&type=chunk)[105](index=105&type=chunk) [Directors' Remuneration and Service Agreements](index=30&type=section&id=Directors'%20Remuneration%20and%20Service%20Agreements) Details of directors' remuneration and the five highest-paid individuals are disclosed in the notes to the consolidated financial statements, with independent non-executive directors serving three-year terms and executive directors having automatically renewable three-year service contracts - Details of directors' remuneration and the five highest-paid individuals are disclosed in Notes 10 and 11 to the consolidated financial statements[106](index=106&type=chunk) - Independent non-executive directors serve for a term of **three years**[108](index=108&type=chunk) - Executive directors' service contracts are for a term of **three years** from January 13, 2016, automatically renewable for successive one-year terms thereafter[143](index=143&type=chunk) [Non-Competition Undertaking from Controlling Shareholders](index=32&type=section&id=Non-Competition%20Undertaking%20from%20Controlling%20Shareholders) The controlling shareholders (HM Ultimate, Yu Chi Ming, Tse Kam Wing, Chan Wai Lim) entered into a non-competition undertaking on December 15, 2016, which independent non-executive directors confirmed was complied with during the 2018 financial year - Controlling shareholders entered into a non-competition undertaking, which independent non-executive directors confirmed was complied with during the 2018 financial year[114](index=114&type=chunk) [Employees and Remuneration Policy](index=32&type=section&id=Employees%20and%20Remuneration%20Policy) As of December 31, 2018, the Group employed 116 staff in Hong Kong and 3 in China, with total staff costs of approximately HK$43.1 million, and remuneration policies are based on operational results and individual performance - As of December 31, 2018, **116 employees were in Hong Kong** and **3 in China**[117](index=117&type=chunk) - Total staff costs in 2018 were approximately **HK$43.1 million**[117](index=117&type=chunk) [Auditor](index=34&type=section&id=Auditor) The consolidated financial statements were audited by National Accountants (HK) CPA Limited, and the Board, adopting the Audit Committee's recommendation, will propose their re-appointment at the upcoming Annual General Meeting - The auditor is National Accountants (HK) CPA Limited[127](index=127&type=chunk) - The Board has adopted the Audit Committee's recommendation to propose the re-appointment of the existing auditor[127](index=127&type=chunk) [Corporate Governance Report](index=35&type=section&id=Corporate%20Governance%20Report) This report details HM International Holdings Limited's 2018 corporate governance practices, covering board composition, director responsibilities, committee functions, risk management, and shareholder communication - The Board is committed to high corporate governance standards and has complied with all code provisions of the GEM Listing Rules Appendix 15 Corporate Governance Code[129](index=129&type=chunk)[131](index=131&type=chunk) - The Board comprises **3 executive directors** and **3 independent non-executive directors**, meeting GEM Listing Rules requirements[135](index=135&type=chunk)[142](index=142&type=chunk) - The Board is responsible for establishing, maintaining, and reviewing the Group's risk management and internal control systems, adhering to the **COSO Integrated Framework 2013 principles**[175](index=175&type=chunk) [Corporate Governance Practices](index=35&type=section&id=Corporate%20Governance%20Practices) The Company is committed to high corporate governance standards, having established a framework and policies to ensure compliance with all code provisions of the GEM Listing Rules Appendix 15 Corporate Governance Code, with directors confirming adherence to securities dealing standards - For the year ended December 31, 2018, the Company complied with all code provisions of the Corporate Governance Code[131](index=131&type=chunk) - Directors confirmed compliance with the required standard for securities dealings, and the company established written guidelines for employees who may possess price-sensitive information[132](index=132&type=chunk)[133](index=133&type=chunk) [Board of Directors](index=36&type=section&id=Board%20of%20Directors) The Board consists of 3 executive and 3 independent non-executive directors, with distinct roles for the Chairman and CEO, meeting at least quarterly to lead, monitor, and ensure sound internal controls and risk management - The Board comprises **3 executive directors** (Yu Chi Ming, Tse Kam Wing, Chan Wai Lim) and **3 independent non-executive directors** (Choi Hon Ting, Ng Ho Wan, Wan Chi Wai)[135](index=135&type=chunk) - Chairman Yu Chi Ming is responsible for overall financial and strategic planning, while CEO Chan Wai Lim handles overall business management and operational decisions, ensuring segregation of duties[140](index=140&type=chunk) - Independent non-executive directors meet GEM Listing Rules requirements, with at least three members constituting one-third of the Board, possessing professional qualifications or financial management knowledge[142](index=142&type=chunk) - The Board is responsible for leading and overseeing the Company, supervising business matters, strategic decisions, and overall performance, and ensuring robust internal control and risk management systems[145](index=145&type=chunk) [Directors' Continuous Professional Development](index=38&type=section&id=Directors'%20Continuous%20Professional%20Development) Board members actively engage in continuous professional development through training, seminars, and relevant publications to update their knowledge and skills for effective duty performance - Directors engage in professional development through training courses (e.g., briefings, seminars) and by reviewing relevant news and journals[150](index=150&type=chunk) [Board Committees](index=39&type=section&id=Board%20Committees) The Board has established Audit, Remuneration, and Nomination Committees with defined written terms of reference; the Audit Committee reviews financial information and controls, the Remuneration Committee reviews director and senior management compensation, and the Nomination Committee reviews board structure and director nominations - The company has an Audit Committee, Remuneration Committee, and Nomination Committee, all with clear written terms of reference[151](index=151&type=chunk) - The Audit Committee, comprising three independent non-executive directors with Ng Ho Wan as Chairman, is responsible for reviewing financial information, risk management, and internal controls[154](index=154&type=chunk) - The Remuneration Committee, comprising Choi Hon Ting (Chairman), Wan Chi Wai (Independent Non-Executive Director), and Yu Chi Ming (Executive Director), is responsible for reviewing the remuneration of directors and senior management[158](index=158&type=chunk) - The Nomination Committee, comprising Wan Chi Wai (Chairman), Ng Ho Wan (Independent Non-Executive Director), and Chan Wai Lim (Executive Director), is responsible for reviewing board structure, nominating directors, and assessing independence[163](index=163&type=chunk) - In 2018, **3 senior management personnel** had remuneration between **HK$500,000 and HK$1,000,000**[162](index=162&type=chunk) [Board Diversity Policy and Nomination Policy](index=42&type=section&id=Board%20Diversity%20Policy%20and%20Nomination%20Policy) The Company has adopted Board Diversity and Nomination Policies to ensure a diverse range of perspectives, skills, and experiences on the Board, and to establish transparent procedures for director nomination and appointment, considering factors like gender, age, and professional background - A Board Diversity Policy has been adopted to support the company's strategic objectives and sustainable development, considering factors such as gender, age, cultural and educational background, ethnicity, professional experience, skills, knowledge, and length of service[166](index=166&type=chunk)[169](index=169&type=chunk) - A Director Nomination Policy has been adopted, outlining selection criteria and procedures to ensure a balanced board in terms of skills, experience, and diverse perspectives[168](index=168&type=chunk)[169](index=169&type=chunk) [Corporate Governance Functions and Directors' Attendance Records](index=43&type=section&id=Corporate%20Governance%20Functions%20and%20Directors'%20Attendance%20Records) The Board performs corporate governance functions, reviewing company policies, director training, legal compliance, and corporate governance report disclosures, with attendance records for Board and committee meetings in 2018 provided - The Board reviews corporate governance policies and practices, director training, legal compliance, and adherence to securities dealing standards[172](index=172&type=chunk) Directors' Attendance at Meetings (2018) | Director Name | Board | Audit Committee | Remuneration Committee | Nomination Committee | Annual General Meeting | | :--- | :--- | :--- | :--- | :--- | :--- | | Mr. Yu Chi Ming | 4/4 | – | 1/1 | – | 1/1 | | Mr. Tse Kam Wing | 4/4 | – | – | – | 1/1 | | Mr. Chan Wai Lim | 4/4 | – | – | 1/1 | 1/1 | | Mr. Choi Hon Ting | 4/4 | 4/4 | 1/1 | – | 1/1 | | Mr. Ng Ho Wan | 4/4 | 4/4 | – | 1/1 | 0/1 | | Mr. Wan Chi Wai | 3/4 | 3/4 | 0/1 | 0/1 | 0/1 | [Risk Management and Internal Control](index=44&type=section&id=Risk%20Management%20and%20Internal%20Control) The Board is responsible for establishing, maintaining, and reviewing the Group's risk management and internal control systems, adhering to the COSO Integrated Framework 2013 principles, which aim to manage rather than eliminate risk, providing reasonable assurance - The Board is responsible for establishing, maintaining, and reviewing risk management and internal control systems to safeguard shareholders' interests and company assets[175](index=175&type=chunk) - Risk management and internal control systems adhere to the **COSO Integrated Framework 2013 principles**, aiming to manage rather than eliminate risk, providing reasonable rather than absolute assurance[175](index=175&type=chunk) - Each department is responsible for identifying, assessing, and managing risks, with management oversight and Board review and approval of system effectiveness[178](index=178&type=chunk) [Directors' Responsibilities for the Consolidated Financial Statements and Auditor's Remuneration](index=45&type=section&id=Directors'%20Responsibilities%20for%20the%20Consolidated%20Financial%20Statements%20and%20Auditor's%20Remuneration) Directors confirm responsibility for preparing the 2018 consolidated financial statements, finding no material uncertainties regarding the Company's going concern, and the auditor's remuneration for 2018 was HK$860,000 for audit services - Directors confirm responsibility for preparing the consolidated financial statements and found no material uncertainties casting significant doubt on the company's ability to continue as a going concern[179](index=179&type=chunk)[180](index=180&type=chunk) - Remuneration paid to the external auditor for audit services in 2018 was **HK$860,000**[183](index=183&type=chunk) [Company Secretary and Shareholders' Rights and Communication](index=45&type=section&id=Company%20Secretary%20and%20Shareholders'%20Rights%20and%20Communication) Ms. Chan Sau Ling serves as Company Secretary, having completed the required professional training, and the Company effectively communicates with shareholders through various channels, including dividend policy, general meetings, and its website, ensuring their rights are protected - Ms. Chan Sau Ling serves as Company Secretary and has completed no less than **15 hours of professional training** as required by the GEM Listing Rules[184](index=184&type=chunk)[185](index=185&type=chunk) - Shareholders can exercise their rights by requesting extraordinary general meetings and submitting written inquiries[188](index=188&type=chunk)[189](index=189&type=chunk) - The company communicates with shareholders through its website and general meetings, and has established a dividend policy[192](index=192&type=chunk)[193](index=193&type=chunk) [Independent Auditor's Report](index=48&type=section&id=Independent%20Auditor's%20Report) National Accountants (HK) CPA Limited issued an unmodified opinion on HM International Holdings Limited's consolidated financial statements for the year ended December 31, 2018, confirming a true and fair view in accordance with HKFRS and the Hong Kong Companies Ordinance, with key audit matters focusing on revenue recognition - National Accountants (HK) CPA Limited issued an **unmodified opinion** on the consolidated financial statements, deeming them to present a true and fair view of the Group's financial position, performance, and cash flows[196](index=196&type=chunk) - The audit was conducted in accordance with Hong Kong Standards on Auditing issued by the Hong Kong Institute of Certified Public Accountants[197](index=197&type=chunk) - Key audit matters primarily focused on **revenue recognition**, involving significant management judgment and estimates regarding performance progress and budgeted costs[200](index=200&type=chunk) [Consolidated Statement of Profit or Loss and Other Comprehensive Income](index=53&type=section&id=Consolidated%20Statement%20of%20Profit%20or%20Loss%20and%20Other%20Comprehensive%20Income) For the year ended December 31, 2018, the Group reported revenue of HK$130,792 thousand, a decrease from 2017, with gross profit of HK$60,944 thousand and profit for the year of HK$7,162 thousand, representing a 27.8% decline, and basic and diluted earnings per share of HK1.79 cents Consolidated Statement of Profit or Loss and Other Comprehensive Income | Indicator | 2018 (HK$ thousand) | 2017 (HK$ thousand) | | :--- | :--- | :--- | | Revenue | 130,792 | 148,611 | | Cost of Sales | (69,848) | (81,548) | | Gross Profit | 60,944 | 67,063 | | Profit Before Tax | 8,147 | 12,439 | | Income Tax Expense | (985) | (2,517) | | Profit for the Year | 7,162 | 9,922 | | Total Comprehensive Income for the Year | 7,127 | 9,922 | | Basic and Diluted Earnings Per Share | HK1.79 cents | HK2.50 cents | [Consolidated Statement of Financial Position](index=54&type=section&id=Consolidated%20Statement%20of%20Financial%20Position) As of December 31, 2018, the Group's total assets decreased to HK$107,312 thousand, with non-current assets primarily comprising property, plant, and equipment, while net current assets stood at HK$76,512 thousand and total equity at HK$84,936 thousand Consolidated Statement of Financial Position | Indicator | 2018 (HK$ thousand) | 2017 (HK$ thousand) | | :--- | :--- | :--- | | Non-current Assets | 8,590 | 12,117 | | Current Assets | 98,722 | 103,287 | | **Total Assets** | **107,312** | **115,404** | | Current Liabilities | 22,210 | 26,856 | | Non-current Liabilities | 166 | 693 | | **Net Assets** | **84,936** | **87,855** | | Total Equity | 84,936 | 87,855 | [Consolidated Statement of Changes in Equity](index=56&type=section&id=Consolidated%20Statement%20of%20Changes%20in%20Equity) For the year ended December 31, 2018, equity attributable to owners of the Company decreased from HK$87,855 thousand to HK$84,931 thousand, primarily due to profit for the year, share option scheme recognition, lapsed options, and dividend payments - Total equity as of December 31, 2018, was **HK$84,936 thousand**, compared to HK$87,855 thousand as of December 31, 2017[217](index=217&type=chunk) Changes in Equity (2018) | Change Item | 2018 (HK$ thousand) | | :--- | :--- | | Profit and Total Comprehensive Income for the Year | 7,127 | | Equity-settled share-based payments recognised | 149 | | Lapsed share options | (21) | | Dividends paid | (10,000) | [Consolidated Statement of Cash Flows](index=57&type=section&id=Consolidated%20Statement%20of%20Cash%20Flows) For the year ended December 31, 2018, net cash from operating activities was HK$4,284 thousand, net cash from investing activities was HK$2,363 thousand, and net cash used in financing activities was HK$10,264 thousand, mainly due to dividend payments, resulting in a net decrease in cash and cash equivalents of HK$3,617 thousand, with an ending balance of HK$58,761 thousand Consolidated Statement of Cash Flows | Activity Type | 2018 (HK$ thousand) | 2017 (HK$ thousand) | | :--- | :--- | :--- | | Net cash from operating activities | 4,284 | 8,625 | | Net cash from/(used in) investing activities | 2,363 | (13,073) | | Net cash (used in)/from financing activities | (10,264) | 52,430 | | **Net (decrease)/increase in cash and cash equivalents** | **(3,617)** | **47,982** | | Cash and cash equivalents at end of year | 58,761 | 62,283 | - Net cash outflow from financing activities in 2018 was primarily due to **dividend payments of HK$10,000 thousand**[222](index=222&type=chunk) [Notes to the Consolidated Financial Statements](index=59&type=section&id=Notes%20to%20the%20Consolidated%20Financial%20Statements) The notes provide detailed accounting information for HM International Holdings Limited's 2018 financial year, including general information, the impact of new HKFRS standards, significant accounting policies, key estimation uncertainties, revenue and segment data, and various financial statement line item breakdowns - The Company is an investment holding company, primarily engaged in providing integrated printing services[225](index=225&type=chunk) - In 2018, the company first applied **HKFRS 9 (Financial Instruments)** and **HKFRS 15 (Revenue from Contracts with Customers)**, leading to adjustments in the opening consolidated statement of financial position[226](index=226&type=chunk)[228](index=228&type=chunk)[236](index=236&type=chunk) - From 2018, revenue is recognized under **HKFRS 15**, measuring progress towards satisfying performance obligations using the input method[272](index=272&type=chunk)[277](index=277&type=chunk) [General Information](index=59&type=section&id=General%20Information) HM International Holdings Limited, incorporated in the Cayman Islands on January 13, 2016, is an investment holding company primarily offering integrated printing services, with its ultimate holding company being HM Ultimate Holdings Limited, and its consolidated financial statements are presented in HKD - The Company was incorporated in the Cayman Islands on **January 13, 2016**[225](index=225&type=chunk) - The Company is an investment holding company, primarily engaged in providing integrated printing services[225](index=225&type=chunk) [Application of New and Revised Hong Kong Financial Reporting Standards](index=59&type=section&id=Application%20of%20New%20and%20Revised%20Hong%20Kong%20Financial%20Reporting%20Standards) In 2018, HKFRS 9 (Financial Instruments) and HKFRS 15 (Revenue from Contracts with Customers) were first applied retrospectively, leading to the recognition of contract assets and liabilities under HKFRS 15 and the introduction of an expected credit loss model under HKFRS 9, which impacted the opening consolidated statement of financial position - In 2018, **HKFRS 9 (Financial Instruments)** and **HKFRS 15 (Revenue from Contracts with Customers)** were first applied[226](index=226&type=chunk) - **HKFRS 15** introduced contract assets and contract liabilities, reclassifying previous advances from customers to contract liabilities[230](index=230&type=chunk)[231](index=231&type=chunk)[235](index=235&type=chunk) - **HKFRS 9** introduced an expected credit loss model, leading to the remeasurement of impairment provisions for trade receivables[236](index=236&type=chunk)[241](index=241&type=chunk)[242](index=242&type=chunk) Impact of New HKFRS on Opening Consolidated Statement of Financial Position | Item | December 31, 2017 (HK$ thousand) | HKFRS 15 Impact (HK$ thousand) | HKFRS 9 Impact (HK$ thousand) | January 1, 2018 (HK$ thousand) | | :--- | :--- | :--- | :--- | :--- | | Deferred tax assets | – | – | 1 | 1 | | Trade and other receivables | 29,650 | – | (180) | 29,470 | | Amounts due from customers for service contracts | 1,849 | (1,849) | – | – | | Contract assets | – | 765 | – | 765 | | Trade and other payables | 26,257 | (5,494) | – | 20,763 | | Contract liabilities | – | 4,410 | – | 4,410 | | Retained earnings | 34,708 | – | (179) | 34,529 | - **HKFRS 16 (Leases)**, effective January 1, 2019, will eliminate the distinction between operating and finance leases for lessees, requiring recognition of right-of-use assets and corresponding liabilities[250](index=250&type=chunk)[251](index=251&type=chunk) [Significant Accounting Policies](index=66&type=section&id=Significant%20Accounting%20Policies) This section details the Group's significant accounting policies for preparing consolidated financial statements, covering consolidation, revenue recognition (pre and post-HKFRS 15), leases, foreign currency, borrowing costs, retirement benefits, share-based payments, taxation, property, plant and equipment, intangible assets, impairment, provisions, financial instruments (pre and post-HKFRS 9), and related party definitions - Under **HKFRS 15**, revenue is recognized when performance obligations are satisfied, meaning when "control" of the goods or services is transferred to the customer[272](index=272&type=chunk) - Under **HKFRS 9**, loss allowances for expected credit losses are recognized, with lifetime expected credit losses applied to trade receivables and contract assets[331](index=331&type=chunk) - The definition of related parties details situations involving control, joint control, significant influence, and key management personnel[351](index=351&type=chunk) [Key Sources of Estimation Uncertainty](index=87&type=section&id=Key%20Sources%20of%20Estimation%20Uncertainty) The Group faces significant estimation uncertainties in revenue recognition, trade and other receivables, and contract asset impairment, involving judgments on performance progress, contract revenue, costs, and credit risk assessment - Revenue recognition involves significant judgment and estimation regarding the progress of service contracts, contract revenue, and costs[356](index=356&type=chunk) - Financial asset impairment involves assessing credit risk and expected credit losses for trade and other receivables and contract assets, potentially leading to significant impairment losses or reversals[358](index=358&type=chunk) [Revenue and Segment Information](index=88&type=section&id=Revenue%20and%20Segment%20Information) The Group's revenue primarily stems from integrated printing services, totaling HK$130,792 thousand in 2018, operating as a single segment with most revenue, assets, and liabilities located in Hong Kong - Revenue primarily derives from providing financial printing services, marketing collateral printing services, and other services[359](index=359&type=chunk)[360](index=360&type=chunk) - The Group operates in a **single operating segment**, providing integrated printing services[364](index=364&type=chunk) - In 2018, **no single customer contributed more than 10% of total revenue**[365](index=365&type=chunk) [Other Income and (Losses)/Gains](index=90&type=section&id=Other%20Income%20and%20(Losses)%2FGains) In 2018, net other income and losses amounted to (HK$23) thousand, primarily comprising bank interest income, sundry income, net gains from disposal of property, plant and equipment, and net foreign exchange losses Other Income and (Losses)/Gains | Item | 2018 (HK$ thousand) | 2017 (HK$ thousand) | | :--- | :--- | :--- | | Bank interest income | 25 | 18 | | Sundry income | 8 | 58 | | Net gains/(losses) on disposal of property, plant and equipment | 138 | (91) | | Net foreign exchange (losses)/gains | (194) | 180 | | **Total** | **(23)** | **165** | [Finance Costs](index=90&type=section&id=Finance%20Costs) Finance costs in 2018 were HK$2 thousand, a significant reduction from HK$37 thousand in 2017, primarily consisting of finance lease charges Finance Costs | Item | 2018 (HK$ thousand) | 2017 (HK$ thousand) | | :--- | :--- | :--- | | Interest on bank overdrafts | – | 4 | | Interest on bank borrowings | – | 14 | | Finance lease charges | 2 | 19 | | **Total** | **2** | **37** | [Income Tax Expense](index=90&type=section&id=Income%20Tax%20Expense) Income tax expense in 2018 was HK$985 thousand, a 60.9% decrease from 2017, mainly due to lower profit before tax, with Hong Kong introducing a two-tiered profits tax rate and the PRC subsidiary taxed at 25% - Income tax expense in 2018 was **HK$985 thousand**, a **60.9% decrease** year-on-year[29](index=29&type=chunk)[369](index=369&type=chunk) - Hong Kong introduced a two-tiered profits tax rate from 2018, with the first **HK$2 million of assessable profits taxed at 8.25%** and the remainder at 16.5%[371](index=371&type=chunk) - The PRC subsidiary's corporate income tax rate is **25%**[372](index=372&type=chunk) [Profit for the Year](index=92&type=section&id=Profit%20for%20the%20Year) The 2018 profit for the year is stated after deducting employee benefit expenses (HK$43,070 thousand), auditor's remuneration (HK$860 thousand), depreciation and amortization (HK$4,355 thousand), donations (HK$86 thousand), and operating lease rental expenses (HK$10,799 thousand) Profit for the Year Deductions | Item | 2018 (HK$ thousand) | 2017 (HK$ thousand) | | :--- | :--- | :--- | | Total employee benefit expenses | 43,070 | 43,384 | | Auditor's remuneration | 860 | 860 | | Amortisation of intangible assets | 209 | 307 | | Depreciation of property, plant and equipment | 4,146 | 2,854 | | Donations | 86 | 49 | | Operating lease rental expenses | 10,799 | 11,181 | [Directors' and Chief Executive's Emoluments](index=93&type=section&id=Directors'%20and%20Chief%20Executive's%20Emoluments) Total emoluments for directors and the chief executive in 2018 amounted to HK$3,961 thousand, a decrease from HK$5,487 thousand in 2017, with Executive Director Chan Wai Lim receiving the highest remuneration of HK$1,485 thousand - Total emoluments for directors and the chief executive in 2018 were **HK$3,961 thousand**, compared to HK$5,487 thousand in 2017[378](index=378&type=chunk) - Executive Director Chan Wai Lim's 2018 remuneration was **HK$1,485 thousand**, including salary, allowances, and other benefits in kind of HK$1,120 thousand and discretionary bonus of HK$347 thousand[378](index=378&type=chunk) [Employees' Emoluments](index=94&type=section&id=Employees'%20Emoluments) Excluding the three directors, the remaining two highest-paid employees of the Group received total emoluments of HK$2,514 thousand - Non-director highest-paid employees' total emoluments in 2018 were **HK$2,514 thousand**, compared to HK$2,444 thousand in 2017[381](index=381&type=chunk) - In 2018, **1 employee's remuneration was between HK$0 and HK$1,000,000**, and **1 employee's remuneration was between HK$1,000,001 and HK$1,500,000**[381](index=381&type=chunk) [Dividends](index=95&type=section&id=Dividends) An interim dividend of HK2.50 cents per share, totaling HK$10,000 thousand, was declared and paid in 2018, with no final dividend proposed for the year - An interim dividend of **HK$10,000 thousand** (HK2.50 cents per share) was paid in 2018[384](index=384&type=chunk) - No final dividend was proposed for 2018[384](index=384&type=chunk) [Earnings Per Share](index=95&type=section&id=Earnings%20Per%20Share) Basic and diluted earnings per share for 2018 were HK1.79 cents, a decrease from HK2.50 cents in 2017 Earnings Per Share | Indicator | 2018 | 2017 | | :--- | :--- | :--- | | Profit attributable to owners of the Company (HK$ thousand) | 7,162 | 9,922 | | Weighted average number of ordinary shares (thousand shares) | 400,000 | 397,260 | | Basic earnings per share (HK cents) | 1.79 | 2.50 | [Property, Plant and Equipment](index=96&type=section&id=Property,%20Plant%20and%20Equipment) As of December 31, 2018, the carrying amount of property, plant and equipment was HK$8,471 thousand, a decrease from HK$11,825 thousand in 2017, with depreciation expense of HK$4,146 thousand - As of December 31, 2018, the carrying amount of property, plant and equipment was **HK$8,471 thousand**[387](index=387&type=chunk) - Depreciation expense in 2018 was **HK$4,146 thousand**[387](index=387&type=chunk) - As of December 31, 2018, property, plant and equipment with a total carrying amount of **HK$nil** were pledged to banks[387](index=387&type=chunk) [Intangible Assets](index=97&type=section&id=Intangible%20Assets) As of December 31, 2018, intangible assets, primarily computer software, had a carrying amount of HK$83 thousand, a decrease from HK$292 thousand in 2017, with amortization expense of HK$209 thousand - As of December 31, 2018, the carrying amount of intangible assets was **HK$83 thousand**[389](index=389&type=chunk) - Amortization expense in 2018 was **HK$209 thousand**[389](index=389&type=chunk) [Contract Assets and Contract Liabilities](index=98&type=section&id=Contract%20Assets%20and%20Contract%20Liabilities) As of December 31, 2018, net contract assets were HK$2,554 thousand and contract liabilities were HK$3,961 thousand, with contract assets primarily related to completed but unbilled printing services and contract liabilities to customer prepayments - As of December 31, 2018, net contract assets were **HK$2,554 thousand**[390](index=390&type=chunk) - As of December 31, 2018, contract liabilities were **HK$3,961 thousand**[390](index=390&type=chunk) - Of the revenue recognized in 2018, **HK$4,346 thousand** was included in the opening balance of contract liabilities, and **HK$765 thousand** was recognized from performance obligations satisfied in prior periods[396](index=396&type=chunk) [Amounts Due from Customers for Service Contracts](index=99&type=section&id=Amounts%20Due%20from%20Customers%20for%20Service%20Contracts) As of December 31, 2017, amounts due from customers for service contracts totaled HK$1,849 thousand, which were reclassified in 2018 due to the application of HKFRS 15 - As of December 31, 2017, amounts due from customers for service contracts were **HK$1,849 thousand**[397](index=397&type=chunk) - This item was reclassified in 2018 due to the application of **HKFRS 15**[245](index=245&type=chunk) [Trade and Other Receivables](index=100&type=section&id=Trade%20and%20Other%20Receivables) As of December 31, 2018, total trade and other receivables amounted to HK$32,307 thousand, including trade receivables of HK$25,421 thousand (net of impairment allowance of HK$35 thousand), with credit terms generally ranging from 30 to 90 days - As of December 31, 2018, total trade and other receivables amounted to **HK$32,307 thousand**[399](index=399&type=chunk) Trade Receivables by Ageing | Ageing | 2018 (HK$ thousand) | 2017 (HK$ thousand) | | :--- | :--- | :--- | | 0 to 30 days | 12,030 | 11,041 | | 31 to 60 days | 4,161 | 3,094 | | 61 to 90 days | 756 | 3,220 | | 91 to 365 days | 6,517 | 5,370 | | Over 365 days | 1,992 | 888 | | **Total** | **25,456** | **23,613** | - Impairment loss allowance for trade receivables in 2018 was **HK$35 thousand**[403](index=403&type=chunk) [Cash and Bank Balances/Pledged Bank Deposits](index=102&type=section&id=Cash%20and%20Bank%20Balances%2FPledged%20Bank%20Deposits) As of December 31, 2018, cash and bank balances totaled HK$58,761 thousand, with pledged bank deposits of HK$4,008 thousand, and a portion of bank balances denominated in RMB are not freely convertible - As of December 31, 2018, cash and bank balances were **HK$58,761 thousand**[407](index=407&type=chunk) - As of December 31, 2018, pledged bank deposits were **HK$4,008 thousand**, used to secure banking facilities[407](index=407&type=chunk) - Approximately **HK$1,596 thousand** of bank balances are denominated in RMB and are not freely convertible[407](index=407&type=chunk) [Trade and Other Payables](index=102&type=section&id=Trade%20and%20Other%20Payables) As of December 31, 2018, total trade and other payables amounted to HK$18,035 thousand, a decrease from 2017, with advances from customers reclassified to contract liabilities - As of December 31, 2018, total trade and other payables amounted to **HK$18,035 thousand**[408](index=408&type=chunk) Trade Payables by Ageing | Ageing | 2018 (HK$ thousand) | 2017 (HK$ thousand) | | :--- | :--- | :--- | | 0 to 30 days | 5,729 | 6,531 | | 31 to 60 days | 3,665 | 3,970 | | 61 to 90 days | 1,727 | 2,938 | | 91 to 365 days | 345 | 1,004 | | **Total** | **11,466** | **14,443** | - As of January 1, 2018, approximately **HK$5,494 thousand** of advances from customers were reclassified as contract liabilities[410](index=410&type=chunk) [Finance Lease Commitments](index=103&type=section&id=Finance%20Lease%20Commitments) As of December 31, 2018, the Group had no finance lease commitments, as all outstanding finance leases were fully settled - As of December 31, 2018, finance lease commitments were **zero**[413](index=413&type=chunk) - All outstanding finance leases have been fully settled, and no new finance lease borrowings have been drawn thereafter[415](index=415&type=chunk) [Deferred Taxation](index=104&type=section&id=Deferred%20Taxation) As of December 31, 2018, net deferred tax liabilities amounted to HK$130 thousand, primarily arising from accelerated tax depreciation and loss allowances for trade receivables - As of December 31, 2018, net deferred tax liabilities were **(HK$130) thousand** (2017: (HK$693) thousand)[417](index=417&type=chunk) - Deferred taxation primarily consists of loss allowances for trade receivables and accelerated tax depreciation[417](index=417&type=chunk) [Share Capital](index=105&type=section&id=Share%20Capital) As of December 31, 2018, the Company's authorized share capital was HK$50,000,000, with issued and fully paid share capital of HK$4,000,000, comprising 400,000,000 ordinary shares - As of December 31, 2018, **400,000,000 ordinary shares** were issued and fully paid, amounting to **HK$4,000,000**[420](index=420&type=chunk) [Reserves](index=106&type=section&id=Reserves) The Group's reserve amounts and their movements are presented in the consolidated statement of changes in equity - Details of reserve amounts and their movements can be found in the consolidated statement of changes in equity[422](index=422&type=chunk) [Share-based Payment Transactions](index=106&type=section&id=Share-based%20Payment%20Transactions) The Company adopted a share option scheme on December 15, 2016, to reward employees; on March 16, 2018, 1,560,000 share options were granted at an exercise price of HK$0.70, of which 210,000 lapsed due to employee resignations, and a total expense of approximately HK$128 thousand was recognized in 2018 - On March 16, 2018, **1,560,000 share options** were granted to employees at an exercise price of **HK$0.70**[425](index=425&type=chunk)[427](index=427&type=chunk) - In 2018, **210,000 share options lapsed** due to employee resignations[427](index=427&type=chunk) - A total share option expense of approximately **HK$128 thousand** was recognized in 2018[429](index=429&type=chunk) [Retirement Benefit Schemes](index=108&type=section&id=Retirement%20Benefit%20Schemes) The Group provides a Mandatory Provident Fund Scheme for Hong Kong employees and a state-managed retirement benefit scheme for PRC subsidiary employees, with total expenses of approximately HK$1,593 thousand recognized in 2018 - Hong Kong employees are members of the Mandatory Provident Fund Scheme, while PRC subsidiary employees are members of a state-managed retirement benefit scheme[430](index=430&type=chunk) - Total expenses recognized for retirement benefit schemes in 2018 were approximately **HK$1,593 thousand**[430](index=430&type=chunk) [Capital Management](index=108&type=section&id=Capital%20Management) The Group manages capital to ensure continuous operation and maximize shareholder returns by optimizing the balance between debt and equity, with its capital structure comprising net debt and equity attributable to owners of the Company - Capital management aims to ensure continuous operation and maximize shareholder returns by optimizing the balance between debt and equity[431](index=431&type=chunk) - The capital structure comprises net debt (including cash and cash equivalents) and equity attributable to owners of the Company[431](index=431&type=chunk) [Financial Instruments](index=109&type=section&id=Financial%20Instruments) This section details the Group's financial instrument classification, financial risk management objectives, and policies, including foreign exchange, interest rate, price, and credit risks, with key instruments comprising trade and other receivables, pledged bank deposits, cash and bank balances, trade and other payables, and finance lease commitments - In 2018, financial assets were measured at amortized cost, and financial liabilities were measured at amortized cost[435](index=435&type=chunk) - The Group continuously monitors market risks (foreign exchange, interest rate, price), credit risk, and liquidity risk[436](index=436&type=chunk) - Lifetime loss allowances are applied to trade receivables and contract assets, assessed by grouping based on credit risk characteristics[451](index=451&type=chunk) - Liquidity risk management involves maintaining sufficient cash and bank financing levels, with approximately **HK$14,000,000** in bank facilities obtained in 2018[457](index=457&type=chunk) [Operating Lease Commitments](index=115&type=section&id=Operating%20Lease%20Commitments) As of December 31, 2018, the Group's future minimum operating lease payments amounted to HK$6,124 thousand, primarily for office property leases with terms of two to three years - As of December 31, 2018, operating lease commitments were **HK$6,124 thousand**[461](index=461&type=chunk) - Office property lease terms are for **two to three years**[461](index=461&type=chunk) [Reconciliation of Liabilities Arising from Financing Activities](index=115&type=section&id=Reconciliation%20of%20Liabilities%20Arising%20from%20Financing%20Activities) This section details the changes in the Group's liabilities arising from financing activities, including accrued interest and cash outflows for finance lease commitments - As of January 1, 2018, finance lease commitments were **HK$262 thousand**, with accrued interest of HK$2 thousand and cash outflow from financing of HK$264 thousand, resulting in a year-end balance of zero[463](index=463&type=chunk) [Related Party Transactions](index=116&type=section&id=Related%20Party%20Transactions) In 2018, the Group engaged in a director's residence rental expense transaction with Tong Nian Development Limited (controlled by Mr. Yu), totaling HK$100 thousand - In 2018, a director's residence rental expense of **HK$100 thousand** occurred with Tong Nian Development Limited[465](index=465&type=chunk) - Directors' emoluments are disclosed in Note 10[465](index=465&type=chunk) [Pledge of Assets](index=116&type=section&id=Pledge%20of%20Assets) As of December 31, 2018, the carrying amount of pledged assets was HK$4,008 thousand, primarily consisting of pledged bank deposits Pledged Assets | Item | 2018 (HK$ thousand) | 2017 (HK$ thousand) | | :--- | :--- | :--- | | Pledged bank deposits | 4,008 | 7,000 | | Property, plant and equipment | – | 556 | | **Total** | **4,008** | **7,556** | [List of Subsidiaries](index=117&type=section&id=List%20of%20Subsidiaries) This section lists all of the Company's subsidiaries as of December 31, 2018, including their place of incorporation, share capital, percentage of equity attributable to the Company's owners, and principal activities and places of business - Key subsidiaries include HM Immediate Holdings Limited (investment holding), Honesty Information Services (integrated printing services), Honesty Information Technology Limited (IT services), Honesty Corporate Information Solutions Limited (commercial printing services), Honesty (Asia) Limited (procurement services), Honesty Language Services Limited (translation services), Honesty Information Services (Beijing) Co., Ltd. (integrated printing services), HM Investment Limited (investment holding), WordFlow Limited (inactive), and Talesis Limited (inactive)[468](index=468&type=chunk) - Most subsidiaries are indirectly wholly-owned by the Company, with Talesis Limited being **51% indirectly owned**[468](index=468&type=chunk) [Litigation](index=118&type=section&id=Litigation) Honesty Information Services is involved in a client lawsuit alleging unauthorized publication of false announcements and seeking damages, which Honesty Information Services firmly denies, counter-claiming for service fees, with directors believing no material adverse impact will arise - Honesty Information Services is involved in a client lawsuit where the plaintiff alleges unauthorized publication of false announcements and seeks damages[470](index=470&type=chunk) - Honesty Information Services denies the allegations and counter-claims for approximately **HK$163 thousand in service fees** and **HK$33 thousand in interest**[470](index=470&type=chunk) - Directors believe the event will not have a material adverse impact, and no provision has been made[470](index=470&type=chunk) [Approval of Financial Statements](index=118&type=section&id=Approval%20of%20Financial%20Statements) The consolidated financial statements for the year ended December 31, 2018, were approved for issue by the Board of Directors on March 11, 2019 - The consolidated financial statements for the year ended December 31, 2018, were approved for issue by the Board of Directors on **March 11, 2019**[471](index=471&type=chunk) [Statement of Financial Position and Reserves of the Company](index=119&type=section&id=Statement%20of%20Financial%20Position%20and%20Reserves%20of%20the%20Company) As of December 31, 2018, the Company's total assets and total equity both amounted to HK$66,446 thousand, with total reserves of HK$62,446 thousand - As of December 31, 2018, the Company's total assets were **HK$66,446 thousand**[473](index=473&type=chunk) - As of December 31, 2018, the Company's total reserves were **HK$62,446 thousand**[473](index=473&type=chunk)[475](index=475&type=chunk) [Financial Summary](index=121&type=section&id=Financial%20Summary) The financial summary presents the Group's performance, assets, and liabilities over the past five financial years, with 2018 revenue at HK$130,792 thousand, profit for the year at HK$7,162 thousand, total assets at HK$107,312 thousand, total liabilities at HK$22,376 thousand, and total capital and reserves at HK$84,936 thousand Five-Year Summary of Results | Indicator | 2018 (HK$ thousand) | 2017 (HK$ thousand) | 2016 (HK$ thousand) | 2015 (HK$ thousand) | 2014 (HK$ thousand) | | :--- | :--- | :--- | :--- | :--- | :--- | | Revenue | 130,792 | 148,611 | 160,036 | 160,369 | 125,343 | | Gross Profit | 60,944 | 67,063 | 68,133 | 64,470 | 47,248 | | Profit Before Tax | 8,147 | 12,439 | 18,747 | 18,965 | 13,074 | | Profit for the Year | 7,162 | 9,922 | 14,969 | 14,998 | 11,283 | Five-Year Summary of Assets and Liabilities | Indicator | 2018 (HK$ thousand) | 2017 (HK$ thousand) | 2016 (HK$ thousand) | 2015 (HK$ thousand) | 2014 (HK$ thousand) | | :--- | :--- | :--- | :--- | :--- | :--- | | Total Assets | 107,312 | 115,404 | 59,888 | 83,194 | 90,000 | | Total Liabilities | 22,376 | 27,549 | 34,964 | 64,739 | 62,211 | | Total Capital and Reserves | 84,936 | 87,855 | 24,924 | 18,455 | 27,789 |