Financial Performance - The Group recorded a revenue of approximately HK$332,034,000 for the year ended December 31, 2023, representing an increase of approximately HK$9,006,000 or 2.8% year-on-year from HK$323,028,000 in 2022[13]. - EBITDA increased from approximately HK$216,958,000 in 2022 to approximately HK$219,443,000 in 2023, reflecting an increase of approximately HK$2,485,000 or 1.1%[16]. - The Group's revenue growth was driven by higher market demand during the cooler winter season in the second half of 2023 and improved gas production from the Kashi project[15]. - Profit attributable to owners of the Company decreased by approximately HK$13,736,000 or 16.5% to approximately HK$69,529,000 for the year ended 31 December 2023[28]. - Decrease in EBITDA margin by 1.1% year-on-year to 66.1% and net profit margin decreased by 4.9% year-on-year to 20.7% for the year ended 31 December 2023[29]. - Revenue for the year ended December 31, 2023, increased by approximately HK$8,103,000 or 2.6% year-on-year to approximately HK$316,370,000, driven by higher demand recovery in the domestic gas market and improved gas production from the Kashi project[70]. - Revenue from the Karamay project increased by approximately HK$903,000 or 6.1% to approximately HK$15,664,000 for the year ended December 31, 2023[88]. Impairment and Provisions - The impairment provision for property, plant, and equipment was approximately HK$1,803,000 for the year ended December 31, 2023, compared to a reversal of impairment of approximately HK$2,686,000 in 2022[21]. - The carrying amount of the cash-generating unit (CGU) of the Kashi Project as of December 31, 2023, was approximately HK$2,152,847,000, exceeding the recoverable amount of approximately HK$2,148,652,000, leading to an impairment provision of approximately HK$3,330,000 for intangible assets[22]. - The fair value of properties in Hong Kong fell below the carrying value as of December 31, 2023, resulting in a provision for impairment of approximately HK$938,000[24]. - Provision for impairment of property, plant, and equipment was approximately HK$865,000, while the provision for impairment of intangible assets was approximately HK$3,330,000, reflecting a narrowing difference between recoverable and carrying amounts[73]. Financial Position - The Group's cash and cash equivalents were approximately HK$45,203,000 as of 31 December 2023, a decrease from approximately HK$131,296,000 in 2022[99][103]. - The Group's outstanding secured other borrowings decreased to approximately HK$353,160,000 as of 31 December 2023, down from approximately HK$486,080,000 in 2022[99][103]. - As of 31 December 2023, the Group's current liabilities exceeded its current assets by approximately HK$158,851,000, indicating material uncertainty regarding its ability to continue as a going concern[114]. - The current liabilities primarily stemmed from payables related to property, plant, and equipment, totaling approximately HK$77,256,000, down from HK$142,966,000 in 2022[117]. - The Group had capital commitments of approximately HK$1,945,000 as of 31 December 2023, significantly lower than approximately HK$35,477,000 in 2022[106][110]. Management and Governance - The management is actively seeking additional debt and/or equity funding to finance further development of the Kashi Project, with announcements to be made upon significant progress[129]. - The management has adopted a cautious approach in the food and beverages segment, continuously assessing its value and performance in light of the economic environment[130]. - The management is also focusing on high-quality borrowers in the money lending business to minimize default risk, given the Group's current financial position[131]. - The audit committee concurred with management's judgments regarding the going concern basis of the financial statements after reviewing key audit matters[119]. - The Company acknowledges its responsibility for maintaining effective risk management and internal control systems to safeguard shareholder investments and company assets[160]. Board Composition and Diversity - The position of chairman is currently vacant, and the Board intends to identify a suitable candidate to fill the vacancy[153]. - The company is required to appoint at least one director of a different gender by December 31, 2024, to comply with the new diversity policy[160]. - The Company adopted a Board diversity policy to enhance sustainable development, considering various aspects such as skills, knowledge, gender, and professional experience[172]. - The board currently consists of four members, including one executive director and three independent non-executive directors, with independent directors representing not less than one-third of the board[162]. - The nomination committee is chaired by Mr. Cheng Chun Ying, with a majority of independent non-executive directors[190]. Audit and Compliance - The Company’s auditor, ZHONGHUI ANDA CPA Limited, received HK$1,000,000 for audit services provided during the financial year[194]. - The audit committee comprises three independent non-executive directors, ensuring sufficient financial management expertise[198]. - The audit committee is responsible for monitoring the integrity of the Company's financial statements and annual reports[200]. - The Company’s audit committee has the authority to recommend the appointment and removal of external auditors[200]. - The audit committee ensures the effectiveness of the audit process and the independence of external auditors[200].
中能控股(00228) - 2023 - 年度财报