Employee Costs and Remuneration - Total employee costs for the reporting period were approximately HKD 69.8 million, compared to HKD 63.9 million in 2021[17] - The company employed 142 employees in Hong Kong, 8 in China, and 10 in Taiwan as of December 31, 2022[17] - The company's remuneration policy is based on operational performance, individual employee performance, and market standards[17] - Gender ratio of employees as of December 31, 2022: 90% male to 100% female, with plans to provide more training to attract male employees in service industries[75] Corporate Governance and Board Structure - The company's board of directors consists of 3 executive directors and 3 independent non-executive directors[26] - The company's board consists of 5 male directors (83%) and 1 female director (17%), maintaining gender diversity[33] - The company has established a corporate governance framework and policies in accordance with the GEM Listing Rules Appendix 15 Corporate Governance Code[30] - The board is responsible for the company's leadership, control, and management, overseeing business strategy, performance, and major transactions[31] - The company has appointed a female director in 2021, meeting the GEM Listing Rules' gender diversity requirement effective from January 1, 2022[33] - The board chairman is responsible for overall financial and strategic planning, while the CEO focuses on business management and operational decisions[35] - The board includes at least three independent non-executive directors, with one having appropriate professional qualifications or accounting/financial management expertise[36] - Directors are appointed for fixed terms, with executive directors having initial three-year service contracts and independent non-executive directors having initial three-year appointments[37] - One-third of directors will retire by rotation at each annual general meeting, with retiring directors eligible for re-election[39] - Directors receive formal induction upon appointment and ongoing professional development to stay updated on regulatory and business changes[40] - All directors have complied with the continuous professional training requirements as per the Corporate Governance Code, with details provided in the training records[42] - Attendance records for board and committee meetings show full attendance by all directors during the reporting period[43] - The Chairman and independent non-executive directors held one meeting without the presence of executive directors during the reporting period[45] Audit and Financial Reporting - The company's audit committee reviewed the group's accounting principles, internal controls, and financial reporting matters[24] - The company's auditor, KPMG, will retire at the upcoming annual general meeting and is eligible for re-appointment[28] - The Audit Committee reviewed the consolidated financial statements for the periods ending December 31, 2021, March 31, 2022, June 30, 2022, and September 30, 2022[53] - The Audit Committee met with the external auditor once without the presence of executive directors during the reporting period[57] - The company's external auditors have provided a statement regarding their responsibility for the consolidated financial statements, as detailed in the "Independent Auditor's Report" section of the annual report[73] - There are no disagreements between the Board of Directors and the Audit Committee regarding the selection, appointment, resignation, or dismissal of external auditors[74] - The independent auditor's report confirms that the consolidated financial statements for 2022 were prepared in accordance with Hong Kong Financial Reporting Standards and present a true and fair view of the company's financial position[92] - The company's directors are responsible for ensuring the financial statements are prepared in accordance with Hong Kong Financial Reporting Standards and the Hong Kong Companies Ordinance[101] - The company's audit committee assists the board in overseeing the financial reporting process[102] - The company's auditors conducted procedures to assess the accuracy of cost data and the reasonableness of judgments and estimates related to budgeted costs and expected gross margins[97] - The company's auditors reviewed the accuracy of the aging analysis of trade receivables as of December 31, 2022, by comparing relevant invoices and supporting documents[98] - The company's auditors evaluated the appropriateness of the accounting policies and the reasonableness of accounting estimates and related disclosures made by the directors[105] - The company's auditors assessed the overall presentation, structure, and content of the financial statements, including disclosures, to ensure they fairly reflect the transactions and events[107] Risk Management and Internal Controls - The company's risk management and internal control systems are designed to manage risks in accordance with the COSO Integrated Framework 2013 principles, ensuring effective monitoring across different business units[67][69] - The company has established a risk management policy to identify, assess, and manage major risks affecting the business[68] - The company conducts quarterly risk assessments at the departmental level, with management overseeing risk management and internal control activities to ensure proper management of identified risks[70] - The Board of Directors is responsible for reviewing and confirming the effectiveness and adequacy of the company's risk management and internal control systems[70] - The company has adopted a disclosure policy to handle confidential information, monitor information disclosure, and respond to inquiries, with strict procedures to prevent unauthorized access and use of insider information[69] - The company's internal control consultant has evaluated the internal control systems, including reviewing operational processes and policies, to provide assessment conclusions and improvement recommendations to the Audit Committee[69] Financial Performance and Key Metrics - Revenue for 2022 increased to 190,286 thousand HKD, up from 172,804 thousand HKD in 2021, representing a growth of approximately 10.1%[131] - Gross profit for 2022 was 68,537 thousand HKD, compared to 63,862 thousand HKD in 2021, reflecting a 7.3% increase[131] - Net profit for 2022 rose to 7,138 thousand HKD, up from 3,920 thousand HKD in 2021, marking an 82.1% increase[131] - Earnings per share (basic and diluted) for 2022 were 1.78 HKD, compared to 0.97 HKD in 2021[131] - Total assets increased to 133,196 thousand HKD in 2022 from 127,399 thousand HKD in 2021, reflecting growth in both non-current and current assets[132] - Net profit attributable to the company's owners rose to 7,103 thousand HKD in 2022, up from 3,884 thousand HKD in 2021, indicating a significant improvement in profitability[134] - Cash and bank balances remained stable at 58,585 thousand HKD in 2022 compared to 58,935 thousand HKD in 2021, showing consistent liquidity[132] - The company's equity value increased to 89,248 thousand HKD in 2022 from 85,246 thousand HKD in 2021, driven by higher retained earnings[133] - Operating cash flow from business activities decreased to 17,379 thousand HKD in 2022 from 20,634 thousand HKD in 2021, reflecting changes in working capital[136] - The company paid dividends of 3,000 thousand HKD in 2022, compared to no dividends paid in 2021[134] - Lease liabilities increased significantly to 15,256 thousand HKD in 2022 from 6,940 thousand HKD in 2021, indicating higher commitments under lease agreements[132] - Intangible assets decreased to 4,933 thousand HKD in 2022 from 7,275 thousand HKD in 2021, reflecting amortization and potential impairments[132] - The company raised new bank loans of 2,617 thousand HKD in 2022, compared to no new loans in 2021, to support its financing activities[138] - Net cash used in financing activities increased to 15,497 thousand HKD in 2022 from 13,415 thousand HKD in 2021, primarily due to higher lease liability repayments[138] Shareholder and Investor Relations - The company has established a website (www.hetermedia.com) as a communication platform for shareholders and investors, providing updates on business development and operations[80] - Shareholders can request an extraordinary general meeting (EGM) by submitting a written request, and the EGM must be held within two months of the request[86] - The company has adopted a dividend policy, but there is no predetermined payout ratio, with dividends subject to approval by shareholders[90] - The company maintained sufficient public float in accordance with GEM Listing Rules[116] Revenue and Customer Concentration - Revenue from comprehensive printing services for the year ended December 31, 2022, was approximately HKD 190,286,000[96] - The company's revenue recognition is based on the percentage of completion method, measured by the value of work performed to date as a proportion of the total transaction price[97] - The top five customers accounted for approximately 24.7% of the company's total revenue in 2022, up from 21.0% in 2021[122] - The largest customer contributed approximately 13.9% of the company's total revenue in 2022, compared to 8.0% in 2021[122] Supplier and Procurement Information - The top five suppliers accounted for 36.8% of the company's total purchases in 2022, down from 42.2% in 2021[122] - The largest supplier accounted for 9.5% of the company's total purchases in 2022, down from 12.2% in 2021[122] Share Options and Awards - The company plans to issue 40,000,000 shares under the share option plan, representing 10% of the total issued shares as of the report date[141] - The share option plan allows each participant to receive no more than 1% of the total issued shares within any 12-month period[141] - As of December 31, 2022, the total number of unexercised share options was 900,000, with 75,000 options expiring during the year[143] - The company adopted a share award plan on July 4, 2022, which will remain effective for ten years, with the total number of shares granted not exceeding 10% of the issued shares as of the adoption date[145][147] - The maximum number of shares that can be granted to any selected participant under the share award plan is 1% of the issued share capital as of the adoption date, which was 400,000,000 shares[147] Ownership and Shareholding Structure - As of December 31, 2022, Yu Zhiming and Chen William jointly held 222,760,000 shares, representing 55.69% of the company's issued shares[55] - Yu Zhiming holds a 70.2% beneficial interest in HM Ultimate Holdings Limited, while Chen William holds a 29.8% interest[56] - HM Ultimate holds 222,760,000 shares, representing 55.69% of the company's shares, with Yu and Chen jointly controlling all shares held by HM Ultimate[150] Legal and Compliance - No significant contracts or arrangements involving directors' interests were entered into during the reporting period[10] - The company's controlling shareholders confirmed compliance with non-compete commitments during the reporting period[13] - No shares were pledged by controlling shareholders during the reporting period[14] - No significant events requiring disclosure occurred between December 31, 2022, and the date of the annual report[27] - No employees were found to have violated the written guidelines for trading the company's securities during the reporting period[47] - The company has implemented an anti-bribery and corruption policy, along with a whistleblowing system to ensure high standards of professional conduct[83] Accounting Policies and Financial Reporting Standards - The company was incorporated in the Cayman Islands on January 13, 2016, and its shares were initially listed on the GEM of the Hong Kong Stock Exchange[153] - The company's functional currency is Hong Kong dollars (HKD), and all values are rounded to the nearest thousand HKD unless otherwise stated[153] - The company applied several amendments to Hong Kong Financial Reporting Standards (HKFRS) effective from January 1, 2022, which did not have a significant impact on the financial statements[154] - The company has not early adopted certain new and amended HKFRS that have been issued but are not yet effective, with no expected significant impact on future financial statements[156] - The consolidated financial statements are prepared on a historical cost basis, except for certain financial instruments measured at fair value[159] - Fair value measurements are categorized into Level 1, Level 2, and Level 3 based on the observability of inputs[160] - The company consolidates entities it controls, and control is reassessed if there are changes in the factors indicating control[162] - Control is determined based on the ability to exercise power over an investee, exposure to variable returns, and the ability to influence those returns through power[163] - The company considers various factors when assessing control, including the size and dispersion of voting rights, potential voting rights, and contractual arrangements[164] - Subsidiaries' financial statements are adjusted to align with the group's accounting policies, and all intra-group transactions are fully eliminated in consolidation[166] - Non-controlling interests in subsidiaries are presented separately from the group's equity, representing the proportionate share of net assets in liquidation[166] - Business combinations are accounted for using the acquisition method, with consideration transferred measured at fair value[167] - Goodwill is measured as the excess of the sum of consideration transferred, non-controlling interests, and previously held equity interests over the net identifiable assets acquired[170] - Contingent consideration in business combinations is measured at fair value at the acquisition date and included as part of the consideration transferred[172] - If a business combination is achieved in stages, previously held equity interests are remeasured to fair value at the acquisition date, with any gain or loss recognized in profit or loss or other comprehensive income[173] - Investments in associates and joint ventures are accounted for using the equity method, with any excess of cost over the fair value of identifiable net assets recognized as goodwill[174] - Goodwill is allocated to cash-generating units and tested for impairment annually or more frequently if there are indications of impairment[176] - Impairment losses are first allocated to reduce the carrying amount of goodwill, and then to other assets in the cash-generating unit on a pro-rata basis[176] - The company recognizes revenue when control of goods or services is transferred to the customer, based on the progress of fulfilling performance obligations[185][188][191] - Revenue from comprehensive printing services, including financial printing and marketing-related product printing, is recognized over time using the input method[193] - Contract assets arise when the company has a right to consideration that is not yet unconditional, while contract liabilities arise when the company has an obligation to transfer goods or services after receiving consideration[188][189] - The company uses the equity method to account for investments in associates and joint ventures, recognizing its share of profits, losses, and other comprehensive income[179][181] - When the company disposes of an associate or joint venture, any difference between the carrying amount and the fair value of retained interests is recognized in profit or loss[183] - Goodwill is allocated to cash-generating units and is considered in determining the gain or loss on disposal of a cash-generating unit[177] - A lease is defined as a contract that conveys the right to control the use of an identified asset for a period of time in exchange for consideration[194] - The company assesses whether a contract contains a lease based on the definition in HKFRS 16 at the inception, modification, or acquisition date[194] - The company ceases to recognize its share of further losses in an associate or joint venture when its share of losses exceeds its interest in the entity[181] - The company reclassifies gains or losses previously recognized in other comprehensive income to profit or loss upon disposal of an associate or joint venture[183] - The company allocates contract consideration to lease and non-lease components based on their relative standalone prices[195] - Short-term leases with a duration of 12 months or less and low-value asset leases are exempt from recognition requirements[196] - Lease payments for short-term and low-value asset leases are recognized as expenses on a straight-line or systematic basis over the lease term[196] - Right-of-use assets are measured at cost less accumulated depreciation and impairment losses, adjusted for any remeasurement of lease liabilities[199] - Right-of-use assets are depreciated over the shorter of their useful life or lease term, unless ownership is reasonably certain at lease end[199] - Right-of-use assets are presented as a separate line item in the consolidated financial position statement[200] Charitable Contributions - Charitable donations in 2022 totaled approximately 62,000 HKD, up from 53,000 HKD in 2020[117] Auditor Fees - Total fees paid to external auditor for audit services: HKD 800,000, and for non-audit services: HKD 150,000, totaling HKD 950,000[77] Credit and Receivables Management - The company assessed the recoverability of trade receivables by reviewing credit history, settlement records, and aging analysis of individual customers[98] - The company evaluated the expected credit losses for trade receivables and contract assets, considering the potential impact of COVID-19 on historical and forward-looking data[98]
HM INTL HLDGS(08416) - 2022 - 年度财报