Corporate Governance and Diversity - The board consists of nine directors, with eight male and one female, reflecting a commitment to diversity[1] - Approximately 50% of senior management and 63% of all employees are female, indicating gender balance at all levels[2] - The company has committed to maintaining a gender representation of no less than 10% for any gender at all three levels: board, senior management, and all employees[2] - The company secretary has complied with the relevant professional training requirements as per listing rules[6] - The company has established a remuneration committee to review the remuneration policies for directors and senior management[117] - The board of directors is responsible for overseeing the group's overall goals and strategies, as well as monitoring financial performance and corporate governance compliance[162] - The company is committed to maintaining high standards of corporate governance to protect shareholder interests and enhance corporate value[160] - The company has adopted the corporate governance code as per the Listing Rules Appendix 14, ensuring compliance throughout the year[161] - The board regularly reviews its delegated functions and powers to ensure appropriateness and effectiveness in governance practices[162] Financial Performance - The company reported a net loss attributable to equity holders of RMB 43,379,000 for the year ended December 31, 2022, compared to a loss of RMB 330,401,000 in 2021[34] - Total revenue for the group in 2022 was RMB 71,784,000, compared to RMB 85,913,000 in 2021, reflecting a decline of approximately 16%[175] - Gross profit for 2022 was RMB 13,301,000, compared to RMB 12,955,000 in 2021, indicating a slight increase of about 2.7%[188] - The total comprehensive loss for the year was RMB 57,018,000, down from RMB 336,484,000 in the previous year, marking a decrease of about 83.1%[190] - Basic loss per share for 2022 was RMB 2.94, a significant improvement from RMB 22.4 in 2021[190] Audit and Internal Control - The financial statements for the year ending December 31, 2022, were audited by an external auditor, with a report including a disclaimer of opinion[7] - The company has adopted a risk management and internal control system, which is reviewed annually for effectiveness[9] - The board is responsible for establishing and maintaining effective risk management and internal control systems[9] - The company has engaged a risk management firm to conduct an internal control review, identifying 15 control deficiencies, which have been addressed[12] - The internal audit function has been outsourced to an independent internal audit firm, which reports directly to the audit committee annually[12] - An independent forensic investigation revealed that the acquisition of two companies was not properly managed, leading to a failure to pay the purchase price[11] - The company has faced challenges in completing the audit procedures for the financial statements due to uncertainties related to the terminated acquisition[10] - The internal control review report and investigation report were completed, with the board believing that identified issues do not affect the group's operations[166] Risk Management - The company has implemented measures to reduce quality-related risks, including strict supplier selection and regular quality assessments[66] - The board report highlights strategic risks associated with acquisitions, including the inability to identify suitable targets and potential undisclosed financial obligations[67] - The company emphasizes the importance of conducting thorough due diligence and feasibility analysis for acquisition projects to mitigate risks[68] - The company faces operational risks due to increased regulatory scrutiny in the pharmaceutical industry, which could impact liquidity and profitability[70] - The company is exposed to bidding risks in drug distribution, which could negatively affect sales and market share if not managed properly[72] - The group assesses credit risk based on both quantitative and qualitative data, considering past experiences and forward-looking information[54] - The expected credit loss model includes both lifetime expected credit losses and 12-month expected credit losses, depending on the increase in credit risk since initial recognition[53] - The group’s expected credit loss model is based on historical loss rates and forward-looking macroeconomic data adjustments[130] - The company has a policy to actively expand its customer base to mitigate risks associated with reliance on major customers[128] Assets and Liabilities - The total value of property, plant, and equipment amounted to RMB 77,141 thousand, a decrease from RMB 78,782 thousand as of January 1, 2021, reflecting a reduction of approximately 2.1%[38] - The accumulated depreciation and impairment as of December 31, 2022, was RMB 41,605 thousand, up from RMB 37,872 thousand on January 1, 2021, indicating an increase of about 9.7%[38] - The carrying value of right-of-use assets as of December 31, 2022, was RMB 2,277 thousand, down from RMB 4,188 thousand at the beginning of 2021, representing a decline of approximately 45.6%[39] - The total carrying amount of property, plant, and equipment, and other non-current assets was RMB 109,280,000 as of December 31, 2022, down from RMB 130,790,000 in 2021, indicating a potential impairment risk[56] - The total liabilities increased from RMB 27,878,000 in 2021 to RMB 33,434,000 in 2022, marking an increase of about 19.8%[80] - The company's other borrowings from third parties increased from RMB 16,189,000 in 2021 to RMB 21,312,000 in 2022, an increase of about 31.5%[91] - The company’s corporate bonds payable increased from RMB 76,583,000 in 2021 to RMB 82,525,000 in 2022, reflecting an increase of approximately 7.7%[89] - The company reported a deferred tax asset of RMB 814, a deferred tax liability of RMB 271, and a total of RMB (1,869) as of December 31, 2022[30] - The total unused tax losses and other deductible temporary differences available to offset future profits were approximately RMB 21,167,000, compared to RMB 22,240,000 in 2021[95] Cash Flow and Financial Position - The company's cash and cash equivalents decreased from RMB 2,272,000 in 2021 to RMB 1,901,000 in 2022, representing a decline of approximately 16.4%[76] - The group’s total cash flow from non-derivative financial liabilities was RMB 227,222,000, with a book value of RMB 227,219,000[140] - The group faces cash flow interest rate risk due to floating interest rates on bank loans and other borrowings[143] - The sensitivity analysis indicated that a 100 basis point increase or decrease in floating interest rates would result in an estimated increase or decrease in after-tax losses of approximately RMB 50,000 for 2022, compared to RMB 14,000 for 2021[146] - As of December 31, 2022, total bank borrowings amounted to RMB 45 million, down from RMB 50 million as of December 31, 2021[148] - Other borrowings increased to RMB 213 million as of December 31, 2022, compared to RMB 162 million in the previous year[148] Business Segments - The group operates primarily in two business segments: pharmaceutical distribution and pharmaceutical manufacturing, with detailed revenue analysis provided in the financial statements[60] - The revenue from the pharmaceutical distribution segment for 2022 was RMB 50,333,000, a decrease of 30% from RMB 61,889,000 in 2021[175] - The revenue from the pharmaceutical manufacturing segment for 2022 was RMB 21,451,000, down 10% from RMB 24,024,000 in 2021[175] - The group has not consolidated its operating segments into reportable segments, maintaining separate reporting for each significant segment[175] Shareholder and Corporate Actions - The company’s major shareholder, Jiabao Limited, has pledged 753,040,000 shares, representing approximately 51.05% of the company's issued share capital, as collateral for certain debts[199] - The company is currently in discussions regarding the repayment of outstanding debts owed by Jiabao to the pledgee, with no potential buyers identified for the pledged shares[200] - The company has adopted a share option scheme effective from May 26, 2015, aimed at rewarding eligible individuals for their contributions to the group[111] - As of December 31, 2022, the total number of stock options granted under the stock option plan is 100,000,000, with an exercise price of HKD 0.67[114] - The company has not issued any new options in 2021 and 2022, with 100 million options still unexercised as of December 31, 2022[148]
百信国际(00574) - 2023 - 年度财报