Financial Performance - The total revenue for the year ended December 31, 2023, was RMB 1.294 billion, an increase of approximately 80.3% compared to RMB 718 million in 2022[12]. - The cost of sales increased by approximately 71.0% to RMB 1.000 billion in 2023, up from RMB 585 million in 2022, aligning with the revenue growth[13]. - Gross profit rose by approximately 121.3% to RMB 294 million in 2023, compared to RMB 133 million in 2022, with the gross margin increasing from 18.5% to 22.7%[13]. - Selling and distribution expenses increased by approximately 19.8% to RMB 72 million in 2023, up from RMB 60 million in 2022, due to increased sales activities following the control of the COVID-19 pandemic[14]. - Administrative expenses rose by approximately 83.9% to RMB 236 million in 2023, compared to RMB 128 million in 2022, driven by increased business volume and legal costs related to debt restructuring[15]. - The net profit for the year was RMB 2.35 million, a significant improvement from a loss of RMB 43.38 million in 2022[10]. - The company reported a basic earnings per share of RMB 0.16 for 2023, compared to a loss per share of RMB 2.94 in 2022[10]. - The group's profit for the year ended December 31, 2023, was approximately RMB 2.4 million, a significant improvement from a loss of RMB 43.4 million for the year ended December 31, 2022[19]. - Other income increased to RMB 28 million in 2023 from RMB 5 million in 2022, primarily due to short-term lease income and the waiver of certain corporate bonds[16]. Cash and Liabilities - As of December 31, 2023, the total cash and cash equivalents amounted to RMB 16.5 million, up from RMB 1.9 million as of December 31, 2022[26]. - The group's current liabilities net amount was RMB 123.5 million as of December 31, 2023, compared to RMB 186.0 million as of December 31, 2022[26]. - The current ratio (current assets divided by current liabilities) improved to 0.50 as of December 31, 2023, from 0.18 as of December 31, 2022[26]. - The total amount of bank borrowings was RMB 7.2 million as of December 31, 2023, compared to RMB 4.5 million as of December 31, 2022[26]. - The company's accumulated losses were approximately RMB 766.9 million as of December 31, 2023[150]. Corporate Governance - The company has adopted the corporate governance code effective during the year, ensuring compliance with high standards of corporate governance[38]. - The company is currently seeking suitable candidates to fill vacancies in its board of independent non-executive directors, as it fell below the minimum required number[40]. - The board of directors is responsible for setting the overall goals and strategies of the group, as well as monitoring and evaluating its operational and financial performance[43]. - The audit committee held two meetings during the year ending December 31, 2023, reviewing the audited consolidated financial statements for the years ending December 31, 2022, and December 31, 2021[53]. - The remuneration committee held one meeting during the year ending December 31, 2023, to review the remuneration policies and structures for directors and senior management[55]. - All independent non-executive directors confirmed their independence in accordance with Listing Rule 3.13, and the company considers them to be independent[47]. - The company provided necessary onboarding materials to newly appointed directors to ensure they understand their responsibilities and the company's operations[45]. - The board members are encouraged to participate in continuous professional development programs to enhance their knowledge and skills[45]. - The company has established clear written terms of reference for its four committees, including the audit committee, nomination committee, remuneration committee, and corporate governance committee[51]. Risk Management - The board is responsible for establishing and maintaining effective risk management and internal control systems[77]. - The company faces various risks, including compliance risks related to product quality, which could lead to significant financial and reputational damage[123]. - Strategic risks associated with acquisitions include the inability to identify suitable targets and potential undisclosed financial liabilities[125]. - The company has implemented measures to mitigate risks, such as thorough due diligence and background checks on acquisition targets[125]. - The audit committee and board will review risk management and internal control systems annually, confirming their effectiveness as of December 31, 2023[81]. Shareholder Communication - The company encourages shareholder participation in annual general meetings to facilitate direct communication with the board[90]. - The independent non-executive directors will review compliance with non-competition commitments annually and disclose findings in the annual report[91]. - The company believes its shareholder communication policy is effective and sufficient for the year ending December 31, 2023[99]. - Voting at the annual general meeting is conducted on a poll basis to ensure each share has one vote[95]. - Shareholders can request a special general meeting if they hold at least 10% of the paid-up capital[94]. Debt Restructuring - The company is undergoing a debt restructuring plan due to multiple winding-up petitions since 2020, with a total principal and interest payment of HKD 2,573,424.66 owed[193]. - The debt repayment arrangement plan was approved by the Hong Kong High Court on November 1, 2023, and is set to take effect on March 12, 2024[194]. Employee and Board Composition - The company has been actively investing in employee training and development to retain talent and enhance its human resources[37]. - The company has experienced changes in its board composition, with several directors resigning and new appointments planned for the upcoming annual general meeting[39]. - The board consists of seven members, with six male and one female, achieving gender balance at approximately 14.3% female representation[69]. - Approximately 50% of the senior management and 63% of the total employees are female, indicating a commitment to gender diversity[69]. Business Strategy - The company aims to become a leading pharmaceutical company in China, guided by its vision and values to avoid unnecessary risks[82]. - The company has a history of expanding its business through acquisitions and alliances, indicating a strategic focus on growth[125]. - The management discussion and analysis section of the annual report outlines potential future developments for the business[116]. Compliance and Legal Matters - The company has confirmed compliance with non-competition commitments made by its major shareholders during the year ended December 31, 2023[184]. - The company has established policies and procedures for investment management, including analysis and approval processes, as well as conflict of interest declarations[81]. - The independent investigation committee was established to conduct a forensic investigation into acquisition matters and internal control reviews, with findings indicating no impact on business operations[84].
百信国际(00574) - 2023 - 年度财报