Financial Performance - Revenue for 2023 reached 10,385,807 thousand, an increase of 25.1% compared to 8,311,752 thousand in 2022[30]. - Gross profit for 2023 was 568,992 thousand, slightly up from 558,379 thousand in 2022, indicating a stable gross margin[30]. - Operating profit for 2023 was 278,222 thousand, compared to 277,034 thousand in 2022, showing a marginal increase[30]. - Net profit for the year was 92,777 thousand, down 39.3% from 153,036 thousand in 2022[31]. - Basic earnings per share decreased to 7.3 cents from 14.9 cents in the previous year[30]. - Total comprehensive income for the year was 47,097 thousand, a significant recovery from a loss of 94,906 thousand in 2022[31]. - Pre-tax profit for 2023 was 145,087 thousand HKD, a decrease of 28.5% compared to 203,078 thousand HKD in 2022[65]. - Financing costs increased to 26,324 thousand HKD in 2023 from 19,195 thousand HKD in 2022, representing a rise of 37.5%[65]. - Depreciation expenses rose to 111,333 thousand HKD in 2023, up from 83,650 thousand HKD in 2022, an increase of 33.2%[65]. - The company reported a foreign exchange loss of 15,520 thousand HKD in 2023, compared to a gain of 48,202 thousand HKD in 2022[65]. - The total loss from joint ventures was 127,053 thousand HKD in 2023, compared to 56,436 thousand HKD in 2022, indicating a significant increase of 125.0%[65]. Assets and Liabilities - Non-current assets increased to 2,219,337 thousand from 2,200,745 thousand in 2022, reflecting growth in property, plant, and equipment[32]. - Current assets decreased to 2,569,664 thousand from 2,683,261 thousand in 2022, primarily due to a reduction in cash and cash equivalents[32]. - Total liabilities increased to 1,993,356 thousand from 1,721,256 thousand in 2022, driven by higher bank borrowings[33]. - Total equity remained stable at 2,795,645 thousand, slightly up from 2,783,913 thousand in 2022[33]. - As of December 31, 2023, total assets amounted to HKD 2,795,645,000, with liabilities of HKD 459,651,000[64]. Inventory Management - The total inventory value as of December 31, 2023, was recorded at HKD 486.3 million, accounted for at the lower of cost and net realizable value[23]. - A reversal of inventory impairment amounting to HKD 6.7 million was recognized in the consolidated income statement for the year ended December 31, 2023[23]. - The company experienced a decrease in inventory by 34,303 thousand HKD in 2023, contrasting with an increase of 75,277 thousand HKD in 2022[65]. - Inventory is recorded at the lower of cost and net realizable value, with costs calculated using the weighted average cost method[186][187]. - The net realizable value is estimated as the selling price in the ordinary course of business minus the estimated costs to complete production and sale[188]. - Any impairment losses on inventory are recognized as expenses in the period they occur, and reversals of impairment losses are recognized in the period they are reversed[188]. Internal Control and Governance - The board is committed to maintaining an effective internal control and risk management system to protect shareholder investments and achieve corporate objectives[10]. - The company has implemented procedures to prevent insider trading and ensure compliance with securities trading regulations[13]. - The company aims to enhance corporate governance and compliance management levels, establishing relevant systems and supervision mechanisms[14]. - The audit committee held four meetings during the year to review the group's full-year performance for 2022, mid-year performance for 2023, and quarterly results[8]. - The audit committee focused on the impact of changes in accounting policies and practices, ensuring compliance with accounting standards, listing rules, and legal requirements[8]. - The company has established an audit department to enhance internal controls and risk management, which will review the effectiveness of these systems annually[137]. - The audit committee will report any significant internal control deficiencies or fraud directly to the board or the audit committee[137]. - The company will assess the effectiveness of its internal control and risk management systems covering the fiscal year ending December 31, 2023[137]. - The board expressed satisfaction with the effectiveness and adequacy of the internal control and risk management systems in place[168]. - The company has arranged appropriate and effective directors' and officers' liability insurance for its directors and senior management[158]. Compliance and Reporting - The independent auditor's report covers the consolidated financial statements for the year ended December 31, 2023[20]. - The financial statements were prepared in accordance with the Hong Kong Financial Reporting Standards and the Hong Kong Companies Ordinance[39]. - The company has adopted new and revised Hong Kong Financial Reporting Standards, which do not have a significant impact on the financial statements[42]. - The company has not adopted any new standards or interpretations that were not yet effective during the reporting period[42]. - The company confirmed that it adheres to appropriate accounting policies and has made prudent and reasonable judgments in preparing the financial statements[167]. - The group must prepare interim financial reports in accordance with Hong Kong Accounting Standard No. 34 for the first six months of the fiscal year[185]. Revenue Recognition - Revenue is recognized when control of the product or service is transferred to the customer, excluding VAT or other sales taxes[177]. - The company applies the practical expedient under HKFRS 15, recognizing revenue when the customer obtains and accepts the product, typically within six months of acceptance[179]. - Revenue is classified as income generated from the sale of goods, provision of services, or leasing of the group's assets[199]. Accounting Policies and Estimates - The company has reviewed its accounting policies and estimates, ensuring compliance with the latest standards and guidelines[40]. - The company confirmed that the expected credit loss is measured as the present value of all expected cash shortfalls, with significant deterioration in debtor performance being a key factor[154]. - The current income tax is calculated based on the taxable income for the year, adjusted for any prior year tax liabilities[192]. - The group recognizes provisions when there is a legal or constructive obligation that is expected to result in an outflow of economic benefits[197]. - Impairment losses are recognized when the carrying amount of an asset exceeds its recoverable amount, with specific allocation methods for cash-generating units[183]. - The company has a policy for recognizing interest income using the effective interest method, which reflects the rate that discounts expected future cash flows to the asset's carrying amount[182]. Lease and Rental Income - The group capitalizes lease liabilities at the present value of lease payments discounted at the internal rate of return or incremental borrowing rate[95]. - The fair value of refundable rental deposits is recorded separately from the right-of-use assets, with any difference recognized as additional lease payments[96]. - The group does not separate lease and non-lease components in contracts but accounts for them as a single lease component[94]. - The group recognizes rental income from operating leases based on the relevant accounting policies[99]. - Investment properties are defined as land and/or buildings held to earn rental income and/or for capital appreciation[111]. - The cost of right-of-use assets includes the initial amount of lease liabilities, lease payments made before or at the lease commencement date, and initial direct costs incurred[119].
广南(集团)(01203) - 2023 - 年度财报