中国农业生态(08166) - 2024 - 年度财报

Corporate Information This section provides an overview of the company's board, committee structures, and other essential corporate details Board of Directors The Board of Directors experienced changes in executive and independent non-executive members due to new appointments and resignations - Executive Directors include Mr. Liao Chun Fai (Chairman), Mr. Tian Jiabai (Chief Executive Officer), Mr. Su Dawen, Mr. Li Aiming (appointed on May 10, 2023), and Mr. Wu Zhuofan (resigned on March 13, 2024)[12] - Independent Non-executive Directors include Mr. Yi Tinghui, Mr. Zhang Min, Ms. Yuan Huimin (resigned on July 19, 2023), and Ms. Shao Yuming (appointed on March 26, 2024)[12] Committee Composition The company's committees adjusted membership due to director changes during the reporting period - The Chairman of the Audit Committee changed from Ms. Yuan Huimin (resigned) to Ms. Shao Yuming (appointed)[13][14] - Members of the Nomination Committee and Remuneration Committee were also adjusted due to Ms. Yuan Huimin's resignation and Ms. Shao Yuming's appointment[13][14][15] Other Corporate Information The company discloses essential information such as its auditor, offices, share registrar, and GEM stock code - The auditor is Huarong (Hong Kong) Certified Public Accountants Limited[16] - The company's GEM stock code is 8166, and its website is www.chinaeco-farming.com[17](index=17&type=chunk)[18] Profile of the Directors This section outlines the professional backgrounds, education, and experience of the company's directors Executive Directors This section details the backgrounds, experience, and tenure of the company's executive directors - Mr. Liao Chun Fai (Chairman), 36 years old, possesses over 10 years of legal, financial, and management experience, joining the Group in February 2022[20][22] - Mr. Tian Jiabai (Chief Executive Officer), 47 years old, holds a Bachelor of Business Administration from Oxford Brookes University, UK, with over 10 years of management experience in Hong Kong listed companies, joining the Group in February 2022[21][23] - Mr. Su Dawen, 39 years old, holds a Bachelor of Science in Surveying from The Hong Kong Polytechnic University, with extensive experience in China and Hong Kong investments, joining the Group in January 2014[25][29] - Mr. Li Aiming, 51 years old, has over 21 years of experience in corporate strategic planning, sales planning, and business management, joining the Group in May 2023[26][27][29] Independent Non-executive Directors This section introduces independent non-executive directors, highlighting their professional backgrounds and committee roles - Mr. Yi Tinghui, 40 years old, is a practicing solicitor in Hong Kong specializing in corporate finance, joining the Group in September 2014[28][30] - Mr. Zhang Min, 66 years old, holds a Bachelor of Philosophy from Beijing Normal University and a Master of Laws from Renmin University of China, with over 20 years of banking experience, joining the Group in March 2015[33][34][35][38][39] - Ms. Shao Yuming, 30 years old, is a Certified Information Systems Auditor and practicing accountant with over five years of audit experience, appointed on March 26, 2024[36][37][39][40] Management Discussion and Analysis This section provides an in-depth review of the Group's business operations, financial performance, and future outlook Business Overview The Group's 2023 fiscal year saw significant revenue growth and a substantial reduction in loss, driven by its diverse business segments | Indicator | 2023 (HKD thousands) | 2022 (HKD thousands) | Year-on-year Change | Reference Chunk | | :--- | :--- | :--- | :--- | :--- | | Revenue | 48,952 | 26,134 | Increased by 87.3% | [42, 46] | | Loss attributable to owners of the Company | (20,560) | (62,359) | Loss narrowed | [42, 46] | | Basic loss per share | 15.82 HK cents | 51.52 HK cents | Loss narrowed | [42, 46] | Property Investment The property investment business generated no revenue in fiscal year 2023, as the Group no longer holds investment properties in Hong Kong and China | Indicator | 2023 (HKD thousands) | 2022 (HKD thousands) | Year-on-year Change | Reference Chunk | | :--- | :--- | :--- | :--- | :--- | | Revenue | 0 | 0 | No change | [43, 47] | | Value of investment properties held | 0 | 9,780 | Decreased by 100% | [43, 47] | One-stop Value Chain Services One-stop value chain services generated zero revenue in fiscal year 2023, representing a 100% decrease from the previous year | Indicator | 2023 (HKD thousands) | 2022 (HKD thousands) | Year-on-year Change | Reference Chunk | | :--- | :--- | :--- | :--- | :--- | | Revenue | 0 | 2,198 | Decreased by 100% | [44, 48] | Distribution Business The distribution business achieved significant growth in fiscal year 2023, with revenue increasing by 96.3%, driven by increased eco-bag orders and an expanded food and beverage customer base | Indicator | 2023 (HKD thousands) | 2022 (HKD thousands) | Year-on-year Change | Reference Chunk | | :--- | :--- | :--- | :--- | :--- | | Revenue | 46,350 | 23,613 | Increased by 96.3% | [45, 49] | - Revenue from the eco-bag business increased due to higher customer order volumes[53][58] - Revenue from the food and beverage business increased, primarily due to the directors' continuous efforts to expand the customer base and secure more orders from food and catering suppliers[53][58] Provision of Money Lending Services Revenue from money lending services surged by 705.6%, primarily due to the commencement of loan business in China, with the Group implementing strict controls and impairment assessments | Indicator | 2023 (HKD thousands) | 2022 (HKD thousands) | Year-on-year Change | Reference Chunk | | :--- | :--- | :--- | :--- | :--- | | Revenue | 2,602 | 323 | Increased by 705.6% | [54, 59] | - In 2023, unsecured loans totaling RMB 12.4 million were granted to three individuals in China, with an annual interest rate of 5% and a 12-month term[56][60] China Loan Details (December 31, 2023) | Borrower | Principal (RMB) | Credit Loss Provision (RMB) | Net Amount (RMB) | | :--- | :--- | :--- | :--- | | Individual 1 | 3,900,000 | 1,371,000 | 2,529,000 | | Individual 2 | 3,000,000 | 1,055,000 | 1,945,000 | | Individual 3 | 5,510,000 | 1,933,000 | 3,577,000 | | Total | 12,410,000 | 4,359,000 | 8,051,000 | - Impairment losses on loans receivable in Hong Kong and China of approximately HKD 7.0 million were recognized in 2023, a decrease from HKD 16.9 million in 2022, mainly due to a reduction in outstanding principal[67][68] - The Group conducts credit assessments before granting loans, considering potential clients' backgrounds, credit history, and bank records, and plans to only grant secured/guaranteed loans to independent third parties in the future[70][71][72][74][75] Provision of Financial Services Financial advisory services generated no revenue in fiscal year 2023 due to unfavorable market conditions - Financial advisory services generated zero revenue in fiscal year 2023[81][85] Securities Investments As of December 31, 2023, the Group's total securities investments significantly decreased, reducing their proportion of total assets, with the company's investment strategy focused on capital appreciation and risk diversification Securities Investment Status | Indicator | 2023 (HKD thousands) | 2022 (HKD thousands) | % of Total Assets (2023) | % of Total Assets (2022) | Reference Chunk | | :--- | :--- | :--- | :--- | :--- | :--- | | Total securities investments | 473 | 6,240 | 0.38% | 3.85% | [82, 86] | - The investment strategy aims to invest in securities with growth potential to achieve capital appreciation and diversify portfolio risk[83][86] Environmental Policies and Performance The Group is committed to environmental protection by reducing waste and pollution, efficiently utilizing resources, and regularly reminding employees of environmental policies - The Board acknowledges environmental responsibilities, and the Group is committed to reducing waste and pollution and efficiently utilizing office resources[88][91] Compliance with Relevant Laws and Regulations The Group strives to comply with all legal and regulatory requirements, including human resources, anti-bribery, GEM Listing Rules, and Securities and Futures Ordinance, with no significant violations found during the reporting period - The Group complies with labor regulations such as the Employment Ordinance, Personal Data (Privacy) Ordinance, and Minimum Wage Ordinance, and has established anti-bribery guidelines[89][92] - The Group continuously complies with the disclosure requirements and corporate governance provisions of the GEM Listing Rules and the Securities and Futures Ordinance[89][92] - No significant breaches or non-compliance with applicable laws and rules occurred in fiscal year 2023[89][92] Financial Review In fiscal year 2023, the Group achieved substantial revenue growth and significantly narrowed its loss, though the gearing ratio slightly increased, as it pursued asset disposals, business optimization, and financing to improve its financial position Key Financial Data for Fiscal Year 2023 | Indicator | 2023 (HKD thousands) | 2022 (HKD thousands) | Year-on-year Change | Reference Chunk | | :--- | :--- | :--- | :--- | :--- | | Revenue | 48,952 | 26,134 | Increased by 87.3% | [96, 101] | | Cost of sales | 40,999 | 30,328 | Increased by 35.2% | [96, 101] | | Administrative expenses | 17,770 | 47,516 | Decreased by 62.6% | [97, 101] | | Finance costs | 2,962 | 4,272 | Decreased by 30.7% | [98, 101] | | Loss attributable to owners of the Company | 20,560 | 62,359 | Loss narrowed | [99, 101] | | Basic loss per share | 15.82 HK cents | 51.52 HK cents | Loss narrowed | [99, 101] | Liquidity and Financial Resources The Group primarily funds its operations through internal resources and borrowings, with increased bank balances and cash as of December 31, 2023, despite a high net current liability Liquidity Position | Indicator | 2023 (HKD thousands) | 2022 (HKD thousands) | Year-on-year Change | Reference Chunk | | :--- | :--- | :--- | :--- | :--- | | Bank balances and cash | 1,616 | 1,161 | Increased by 39.2% | [100, 102] | | Net assets | 50,318 | 71,934 | Decreased by 30.1% | [100, 102] | | Net current liabilities | 33,367 | 63,788 | Decreased by 47.7% | [100, 102] | Gearing Ratio As of December 31, 2023, the Group's total liabilities and total assets decreased, resulting in a slight increase in the gearing ratio Gearing Ratio | Indicator | 2023 (HKD thousands) | 2022 (HKD thousands) | Year-on-year Change | Reference Chunk | | :--- | :--- | :--- | :--- | :--- | | Total liabilities | 73,464 | 90,161 | Decreased by 18.5% | [103, 108] | | Total assets | 123,782 | 162,095 | Decreased by 23.6% | [104, 108] | | Gearing ratio | 0.59 | 0.56 | Increased by 0.03 | [104, 108] | Employees and Remuneration Policies As of December 31, 2023, the Group's full-time employee count increased, while total staff costs decreased, with remuneration policies based on individual performance and expertise, potentially including share options Employees and Remuneration | Indicator | 2023 | 2022 | Year-on-year Change | Reference Chunk | | :--- | :--- | :--- | :--- | :--- | | Total full-time employees | 34 | 21 | Increased by 61.9% | [106, 110] | | Total staff costs | HKD 7,688 thousands | HKD 12,798 thousands | Decreased by 39.9% | [106, 110] | Capital Structure As of December 31, 2023, the company's issued ordinary share capital remained unchanged - The issued ordinary share capital is HKD 1,300,017.31, divided into 130,001,731 shares of HKD 0.01 par value each[107][111] Significant Investments, Acquisitions and Disposal of Investment Properties In fiscal year 2023, the Group completed an additional acquisition of property interests in Shenzhen and disposed of several subsidiaries and an investment property to optimize its asset structure - Completed the acquisition of 50% equity interest in Delightful Hope Limited, making it an indirect wholly-owned subsidiary[113][116] - Disposed of the entire equity interest in China Eco-Farming Financial Group Limited, King Health International Holdings Limited, Ming Pang Limited, and King Noble Holdings Limited[114][115][118][119][117][123] - An investment property in Hong Kong was compulsorily sold due to mortgage repayment default, with proceeds used to offset the adjudicated amount[120][121][122][124] - Disposed of certain properties in Fuyu Zhonghe Xin Nong Market Property Co., Ltd. in China for a total consideration of RMB 7,750,000[128][131] Litigation Shenzhen Shengshi Fuqiang Technology Co., Ltd., a non-wholly owned subsidiary, is involved in an asset loss claim and counterclaim lawsuit, with the appellate court upholding the liability of both the plaintiff and Shengshi Fuqiang - Shengshi Fuqiang was claimed for approximately RMB 1,964,000 in asset losses and counterclaimed for approximately RMB 980,000 in unpaid rent and delayed vacant possession[129][132] - The appellate court dismissed the appeal, upholding the judgment that the plaintiff must pay Shengshi Fuqiang RMB 596,000, and Shengshi Fuqiang must pay the plaintiff RMB 594,000[129][132] Charges on Group's Assets As of December 31, 2023, both the Group's listed equity investments and unlisted investments were pledged to secure loans - Approximately HKD 137,000 of Hong Kong listed equity investments were pledged to a financial institution to secure margin loans of approximately HKD 2,065,000[134][140] - Unlisted investments classified as at fair value through other comprehensive income were pledged to a Chinese company to secure a three-year loan of RMB 4,550,000 granted to a private company[135][140] Contingent Liabilities and Guarantee As of December 31, 2023, the Group's financial guarantee for King Health Group Limited was released due to the full repayment of the related term loan - In fiscal year 2023, the Group's financial guarantee for King Health Group Limited was released due to the full repayment of the term loan[136][141] Capital Commitments As of December 31, 2023, the Group's capital commitments amounted to approximately HKD 55,966,000, an increase from 2022 Capital Commitments | Indicator | 2023 (HKD thousands) | 2022 (HKD thousands) | Year-on-year Change | Reference Chunk | | :--- | :--- | :--- | :--- | :--- | | Capital commitments | 55,966 | 43,202 | Increased by 29.5% | [137, 142] | Exposure to Fluctuation in Exchange Rates The Group's assets and liabilities are primarily denominated in HKD, RMB, USD, or NTD, and the directors believe the Group is not exposed to significant foreign exchange risk, thus no hedging measures have been implemented - The Group's assets, liabilities, and transactions are primarily denominated in HKD, RMB, USD, or NTD[138][143] - The directors believe the Group is not exposed to significant foreign exchange risk and has not implemented hedging measures[138][143] Events after the Reporting Period As of the report date, no other significant events occurred after the year ended December 31, 2023 - As of the report date, no other significant events occurred after the year ended December 31, 2023[139][144] Outlook and Prospects The Group anticipates an improved Hong Kong economy in 2024 and will continue to prudently allocate resources to optimize investment returns, focusing on existing businesses while maintaining caution towards property investment and financial services - The Hong Kong economy is expected to improve in 2024, with inbound tourism and domestic demand as key growth drivers[146][149] - The Group will continue to prudently allocate resources across different segments to optimize investment returns[146][149] One-stop Value Chain Services Outlook Given the impact of the Hong Kong economy on IT-related service budgets, the Group will focus on and deepen its involvement in other existing businesses, rather than the gaming industry - Due to the impact of the Hong Kong economy on IT-related service budgets, the Group will focus on and deepen its involvement in other existing businesses[147][150] Property Investment Outlook The Group maintains a cautious stance on US-China tensions and global pessimism, with no plans for acquisitions in the short term after selling its investment portfolio in 2023 - The Group maintains a cautious stance on US-China tensions and global pessimism[148][151] - After selling its investment portfolio in 2023, there are no plans for acquisitions in the short term[148][151] Distribution Business Outlook The Group will continue to seek local and overseas suppliers to expand its distribution of food and beverages, agricultural products, and consumables, and grow its customer base through online platforms - The Group will seek local and overseas suppliers to distribute food and beverages, agricultural products, and consumables[153][157] - Food and beverage products will be distributed and marketed through corporate clients and online sales platforms such as HKTVmall and Facebook online stores[154][157] - For agricultural products, the Group will continue to distribute sunflower meal to Chinese state-owned enterprises and negotiate corn procurement and supply[155][157] - For consumables, the Group primarily provides eco-bags to government agencies, listed companies, educational institutions, and non-governmental organizations[156][158] Provision of Money Lending Services Outlook While demand for money lending is expected to increase in the current economic climate, default risks may also rise, prompting management to enhance loan approval processes, carefully screen high-risk clients, and maintain robust credit monitoring policies - Demand for money lending from individuals or corporate clients is expected to increase, but default risks may also rise[160][162] - Management will further enhance loan approval procedures, carefully filtering and screening high-risk clients to protect the Group's interests[160][162] Provision of Financial Services Outlook The financial services business has underperformed, leading the directors to scale it down and reallocate resources to other promising business segments - The financial services business has underperformed for several years, leading the directors to scale down its operations[161][163] - Resources have been reallocated to other businesses within the Group that are expected to have brighter prospects[161][163] Directors' Report This report provides an overview of the company's principal activities, financial results, and corporate governance matters for the fiscal year Principal Activities The company is an investment holding company, with its subsidiaries primarily engaged in one-stop value chain services, property investment, distribution, money lending, and financial services - The company is an investment holding company, and its subsidiaries' principal activities include one-stop value chain services, property investment, distribution business, provision of money lending services, and provision of financial services[166][173] Results and Dividends The Group's fiscal year 2023 results are disclosed in the consolidated statement of profit or loss and other comprehensive income, and the directors do not recommend a final dividend - The directors do not recommend the payment of a final dividend for the year ended December 31, 2023 (2022: nil)[167][174] Business Review The discussion and analysis of the Group's principal businesses are detailed in the Management Discussion and Analysis section and form part of this Directors' Report - The discussion and analysis of the Group's principal businesses are contained in the Management Discussion and Analysis on pages 8 to 23 of this annual report, forming part of this Directors' Report[168][175] Financial Summary A summary of the Group's published results and assets and liabilities for the most recent five financial years is presented on page 284 of this annual report - A summary of the Group's published results and assets and liabilities for the most recent five financial years is contained on page 284 of this annual report[169][176] Plant and Equipment Details of changes in the Group's plant and equipment for the year ended December 31, 2023, are provided in note 16 to the consolidated financial statements - Details of changes in the Group's plant and equipment for the year ended December 31, 2023, are contained in note 16 to the consolidated financial statements[170][177] Major Customers and Suppliers In fiscal year 2023, the Group's five largest customers accounted for 71.4% of turnover, and the five largest suppliers accounted for 90.0% of purchases, with no interest relationships between directors, their associates, or substantial shareholders and these parties Major Customers and Suppliers Percentage | Indicator | 2023 | 2022 | Reference Chunk | | :--- | :--- | :--- | :--- | | Top five customers' share of turnover | 71.4% | 54.3% | [171, 178] | | Top five suppliers' share of purchases | 90.0% | 60.9% | [171, 178] | - As at and for the year ended December 31, 2023, none of the directors, their associates, or any shareholder owning more than 5% of the company's issued share capital had any interest in the aforementioned customers or suppliers[171][178] Share Capital Details of changes in the company's share capital during fiscal year 2023 are provided in note 37 to the consolidated financial statements - Details of changes in the company's share capital for the year ended December 31, 2023, are contained in note 37 to the consolidated financial statements[181][187] Reserves Details of changes in the Group's reserves are presented in the consolidated statement of changes in equity - Details of changes in the Group's reserves are presented in the consolidated statement of changes in equity on pages 93 to 94 of this annual report[182][188] Distributable Reserves As of December 31, 2023, the company had no reserves available for distribution as dividends to shareholders in cash or in kind - As of December 31, 2023, the company had no reserves available for distribution as dividends to its shareholders in cash or in kind[183][189] Annual General Meeting and Closure of Register of Members The date of the company's 2023 fiscal year Annual General Meeting will be determined by the Board, and notice will be published and dispatched to shareholders in due course - The date of the company's 2023 fiscal year Annual General Meeting will be determined by the Board, and notice will be published on the company's website and the HKEX website[184][190] Share Option Scheme The company adopted a share option scheme on May 6, 2011, to incentivize and reward eligible participants for their contributions to the Group, with 5,614,428 outstanding share options as of December 31, 2023 - The share option scheme aims to grant share options to eligible participants, as determined by the directors, as a reward or return for their contributions to the Group[186][191] - As of December 31, 2023, the number of shares involved in outstanding share options granted and accepted under the scheme was 5,614,428, representing approximately 4.32% of the company's issued share capital[205][207] - The share option scheme expired on May 5, 2021, and the total number of share options available for issue is zero[204][207] Directors and Directors' Service Contracts During the reporting period, there were changes in the company's Board members; independent non-executive directors serve two-year terms, and executive directors serve two-year terms (Mr. Li Aiming for one year), all terminable with prior notice - Independent non-executive directors serve a two-year term, terminable with not less than three months' written notice[209][214] - Executive directors' service agreements have an initial fixed term of two years, with Mr. Li Aiming's term being one year, terminable with not less than six months' (Mr. Li's one month) written notice[210][214] - No director proposed for re-election has entered into a service contract with the company that is not terminable by the company within one year without payment of compensation (other than statutory compensation)[211][215] Independence Confirmation The company has received annual independence confirmations from all independent non-executive directors and considers them all to be independent - The company has received annual independence confirmations from each independent non-executive director and considers all independent non-executive directors to be independent[212][216] Directors' Interests in Contracts As of and for the year ended December 31, 2023, neither the company nor any of its subsidiaries entered into any significant contracts in which a director had a material direct or indirect interest - As of and for the year ended December 31, 2023, neither the company nor any of its subsidiaries entered into any significant contracts in which a director had a material direct or indirect interest[213][217] Emoluments of Directors, Chief Executive and Five Highest Paid Individuals Details of the emoluments of the Group's directors, chief executive, and five highest paid individuals are provided in notes 12 and 13 to the consolidated financial statements - Details of the emoluments of the Group's directors, chief executive, and five highest paid individuals are provided in notes 12 and 13 to the consolidated financial statements, respectively[218][220] Directors' and Chief Executive's Interests or Short Positions in the Shares, Underlying Shares and Debentures of the Company or Any Associated Corporations As of December 31, 2023, Executive Director Mr. Su Dawen held 935,738 share options with an exercise price of HKD 0.5506 Directors' Long Positions in Underlying Shares of Share Options (December 31, 2023) | Name | Grant Date | Exercise Price (HKD) | Exercise Period | Outstanding (options) | | :--- | :--- | :--- | :--- | :--- | | Su Dawen | December 7, 2020 | 0.5506 | December 7, 2020 – December 6, 2025 | 935,738 | Directors' and Chief Executive's Rights to Acquire Shares or Debt Securities Except for the disclosed share options, no arrangements were entered into by the company or its subsidiaries during the reporting period that would enable directors or the chief executive to acquire benefits by purchasing shares or debt securities of the company or any other body corporate - Except for the disclosed share options, no arrangements were entered into by the company or its subsidiaries during the reporting period, the purpose of which was (or one of the purposes of which was) to enable any director or chief executive of the company to acquire benefits by purchasing shares or debt securities of the company or any other body corporate[225][227] Substantial Shareholders As of December 31, 2023, the company's substantial shareholders included A S Investment Holdings Ltd, Ever Better Holdings Ltd, Ms. Yang Xiuxian, Mr. Su Zhiming, Convoy Investments Limited, Convoy Financial Group Limited, and Convoy Holdings Limited Substantial Shareholders' Long Positions in the Company's Shares and Underlying Shares (December 31, 2023) | Shareholder | Capacity | Number of Shares | Percentage of Issued Share Capital | | :--- | :--- | :--- | :--- | | A S Investment Holdings Ltd | Beneficial owner | 14,135,200 | 10.87% | | Ever Better Holdings Ltd | Interest in controlled corporation | 14,135,200 | 10.87% | | Ms. Yang Xiuxian | Beneficial owner, spouse's interest and interest in controlled corporation | 16,167,600 | 12.44% | | Mr. Su Zhiming | Beneficial owner, spouse's interest and interest in controlled corporation | 16,167,600 | 12.44% | | Convoy Investments Limited | Beneficial owner | 11,300,000 | 8.69% | | Convoy Financial Group Limited | Interest in controlled corporation | 11,300,000 | 8.69% | | Convoy Holdings Limited | Beneficial owner and interest in controlled corporation | 12,161,600 | 9.35% | Repurchase, Redemption or Sale of Listed Securities For the year ended December 31, 2023, neither the company nor any of its subsidiaries purchased, redeemed, or sold any of the company's listed securities - For the year ended December 31, 2023, neither the company nor any of its subsidiaries purchased, redeemed, or sold any of the company's listed securities[234][239] Related Party Transactions Details of related party transactions for the year ended December 31, 2023, are provided in note 45 to the consolidated financial statements - Details of related party transactions for the year ended December 31, 2023, are contained in note 45 to the consolidated financial statements[235][240] Competing Interests As of and for the year ended December 31, 2023, none of the company's directors, controlling shareholders, or their respective associates had any business or interest that competed or might compete with the Group's business or had any other conflict of interest - As of and for the year ended December 31, 2023, none of the company's directors, controlling shareholders, or their respective associates had any business or interest that competed or might compete with the Group's business or had any other conflict of interest[236][241] Retirement Benefits Schemes Details of the retirement benefits schemes are provided in note 41 to the consolidated financial statements - Details of the retirement benefits schemes are contained in note 41 to the consolidated financial statements[242][249] Pre-emptive Rights The company's bye-laws do not contain pre-emptive rights provisions, despite no such restrictions under Bermuda law - Although Bermuda law does not impose restrictions on pre-emptive rights, the company's bye-laws do not contain any pre-emptive rights provisions[243][250] Corporate Governance Details of the company's corporate governance practices are provided in the "Corporate Governance Report" section of this report - Details of the company's corporate governance practices are contained in the "Corporate Governance Report" section of this report[244][251] Environmental, Social and Governance Details of the company's environmental, social, and governance practices are provided in the "Environmental, Social and Governance Report" section of this report - Details of the company's environmental, social, and governance practices are contained in the "Environmental, Social and Governance Report" section of this report[245][252] Emolument Policy The Group's remuneration policy for employees and senior management is set by the Remuneration Committee based on merit, qualifications, and abilities, while directors' remuneration considers market competitiveness and individual performance - The Group's remuneration policy for employees and senior management is set by the Remuneration Committee based on their merits, qualifications, and abilities[246][253] - Directors' remuneration is determined by the Remuneration Committee after considering market competitiveness, individual performance, and achievements[254] - The company has adopted a share option scheme as an incentive for directors and eligible employees[247][255] Sufficiency of Public Float As of the report date, the company has maintained the sufficient public float required by the GEM Listing Rules for fiscal year 2023 and prior periods - As of the report date, the company has maintained the sufficient public float required by the GEM Listing Rules for fiscal year 2023 and prior periods[248][256] Audit Committee The company's Audit Committee, established on July 31, 2001, is primarily responsible for reviewing and overseeing the Group's financial reporting process and internal control and risk management systems, and has reviewed the 2023 fiscal year audited financial results - The Audit Committee's primary responsibilities include reviewing and overseeing the Group's financial reporting process and internal control and risk management systems[258][261] - The Audit Committee has reviewed the Group's audited financial results for the year ended December 31, 2023[259][262] Auditor Huarong (Hong Kong) Certified Public Accountants Limited has served as the company's auditor since November 30, 2018, and has audited the 2023 fiscal year consolidated financial statements, with a resolution for re-appointment to be proposed at the upcoming Annual General Meeting - Huarong (Hong Kong) Certified Public Accountants Limited has been appointed as the company's auditor since November 30, 2018[260][263] - Huarong has audited the consolidated financial statements for the year ended December 31, 2023[260][263] - The company will propose a resolution for the re-appointment of Huarong as auditor at the upcoming Annual General Meeting[260][263] Corporate Governance Report This report details the company's corporate governance practices, including board structure, director training, and risk management Introduction The company is committed to maintaining good corporate governance practices, and after a temporary non-compliance with GEM Listing Rules due to director resignations, it has since regained compliance through new appointments - The company is committed to maintaining high standards of corporate governance practices and procedures, emphasizing a high-quality board, sound internal controls, transparency, and accountability[265][266] - Following Ms. Yuan Huimin's resignation, the total number of independent non-executive directors fell below three, and the Board remained single-gender, failing to comply with GEM Listing Rules[267] - After Ms. Shao Yuming's appointment as an independent non-executive director on March 26, 2024, the company has regained compliance with the relevant GEM Listing Rules[269][272] Directors' Securities Transactions The company has adopted the GEM Listing Rules as the code of conduct for directors' securities transactions and confirmed compliance by all directors in fiscal year 2023 - The company has adopted Rules 5.48 to 5.67 of the GEM Listing Rules as the code of conduct for directors' securities transactions[270][273] - After inquiry with all directors, the company found no non-compliance with this code of conduct in fiscal year 2023[270][273] Board of Directors The Board comprises seven directors, including four executive and three independent non-executive members, committed to diversity and responsible for approving and overseeing the Group's overall strategy and policies - The Board currently comprises seven directors: four executive directors and three independent non-executive directors[271][274] - The company is committed to promoting diversity among Board members, considering factors such as gender, age, cultural and educational background, and professional experience[276][280] - The Board is responsible for approving and monitoring the Group's overall strategy and policies and overseeing management[279][281] Board Meetings and Directors' Attendance The Board holds at least four regular meetings annually to review the Group's financial and operational performance, with seven meetings held and good attendance in fiscal year 2023 - The Board holds at least four regular meetings annually to review the Group's financial and operational performance[286][287] Board Meeting Attendance Record (Fiscal Year 2023) | Director Name | Board Meeting Attendance | | :--- | :--- | | Mr. Liao Chun Fai | 7/7 | | Mr. Tian Jiabai | 6/7 | | Mr. Li Aiming | 3/5 | | Mr. Su Dawen | 7/7 | | Mr. Wu Zhuofan | 7/7 | | Mr. Yi Tinghui | 6/7 | | Mr. Zhang Min | 7/7 | | Ms. Yuan Huimin | 2/2 | Board Practices Detailed agendas and documents are provided to directors before Board meetings to ensure informed decision-making, and the company has purchased liability insurance for directors and officers - Directors receive detailed agendas and information documents before Board meetings to ensure informed decision-making[290][294] - The company has purchased liability insurance for directors and officers to protect them against litigation liabilities that may arise from their duties[285][286] Training for Directors The company provides induction training for new directors and regular updates on business, legislative, and regulatory environments, with all directors participating in continuous professional development to ensure high corporate governance standards - All newly appointed directors receive necessary induction training and information[292][295] - The company regularly provides directors with updates on changes and developments in the business, legislative, and regulatory environments[293][295] - All directors have participated in continuous professional development to develop and update their knowledge and skills, and training records are provided[297][301] Chairman and Chief Executive The roles of Chairman and Chief Executive Officer are held by two separate individuals to ensure their respective independence, accountability, and responsibility - The positions of Chairman of the Board and Chief Executive Officer of the company are held by two separate individuals, ensuring their respective independence, accountability, and responsibility[299][302] Remuneration of Directors The Remuneration Committee advises the Board on the remuneration policy and structure for directors and senior management, determining remuneration based on factors such as market competitiveness and individual performance - The Remuneration Committee advises the Board on the policy and structure for all remuneration of the company's directors and senior management[305][306] - The Remuneration Committee determines the remuneration packages for individual executive directors by considering factors such as salaries paid by comparable companies, time commitment and responsibilities of directors, other employment conditions within the Group, and the effectiveness of performance-linked remuneration[305][306] Remuneration Committee Meeting Attendance Details (Fiscal Year 2023) | Member Name | Attendance | | :--- | :--- | | Mr. Yi Tinghui (Chairman) | 1/1 | | Mr. Zhang Min | 1/1 | | Ms. Yuan Huimin | 1/1 | Nomination of Directors The Nomination Committee reviews board structure, identifies qualified director candidates, assesses independence, and recommends appointments or re-elections to the Board, which has adopted a board diversity policy - The Nomination Committee's functions include reviewing and overseeing the Board's structure, size, and composition; identifying qualified individuals for Board membership; assessing the independence of independent non-executive directors; and making recommendations to the Board regarding the appointment or re-appointment of directors and senior management[311][314] - The Board has adopted a Board Diversity Policy, considering factors such as gender, age, cultural and educational background, and professional experience when selecting candidates[313][315] Nomination Committee Meeting Attendance Details (Fiscal Year 2023) | Member Name | Attendance | | :--- | :--- | | Mr. Zhang Min (Chairman) | 1/1 | | Mr. Yi Tinghui | 1/1 | | Ms. Yuan Huimin | 1/1 | Audit Committee (in Corporate Governance Report) The Audit Committee is responsible for reviewing and overseeing the Group's financial reporting process and risk management and internal control systems, but did not hold any meetings in fiscal year 2023 due to delayed results announcement and trading suspension - The Audit Committee's primary responsibilities include reviewing and overseeing the Group's financial reporting process and risk management and internal control systems[319][321] - In fiscal year 2023, due to the delayed publication of the 2022 fiscal year results announcement and the suspension of company trading, the Audit Committee did not hold any meetings[324][326] Corporate Governance Function The Board is responsible for fulfilling corporate governance duties, including formulating and reviewing policies, overseeing director training, compliance, codes of conduct, and reviewing adherence to the Corporate Governance Code - The Board is responsible for formulating and reviewing the company's corporate governance policies and practices[327] - The Board is responsible for reviewing and monitoring the training and continuous professional development of directors and senior management[327] - The Board is responsible for reviewing the company's compliance with the Corporate Governance Code and disclosures in the Corporate Governance Report[327] Auditors' Remuneration In fiscal year 2023, the Group paid HKD 1,200,000 in remuneration to its auditor, Huarong (Hong Kong) Certified Public Accountants Limited, a decrease from 2022 Auditors' Remuneration | Indicator | 2023 (HKD thousands) | 2022 (HKD thousands) | Year-on-year Change | Reference Chunk | | :--- | :--- | :--- | :--- | :--- | | Auditors' remuneration | 1,200 | 1,337 | Decreased by 10.3% | [328, 331] | Directors' and Auditors' Responsibilities for the Consolidated Financial Statements Directors confirm their responsibility for preparing the consolidated financial statements and acknowledge significant uncertainties regarding the Group's going concern, while auditors issued a disclaimer of opinion due to scope limitations and going concern uncertainties - Directors confirm their responsibility for preparing the consolidated financial statements and presenting a balanced, clear, and complete assessment[329][332] - As of December 31, 2023, the Group recorded a loss of approximately HKD 20,560,000, net cash used in operating activities of approximately HKD 10,795,000, and current liabilities exceeding current assets by approximately HKD 33,367,000, indicating significant uncertainty regarding its ability to continue as a going concern[329][332][333] Management's and Audit Committee's Views on the Independent Auditor's Report Management and the Audit Committee have carefully considered the Group's future liquidity and performance, implementing measures to improve its financial position, including business development, director loans, potential fundraising, debt repayment, and exploring new opportunities - Management and the Audit Committee are taking measures to improve the financial position, including developing existing distribution businesses, seeking additional distribution rights, and exploring new business opportunities[335][339] - The company has entered into revolving loan agreements totaling HKD 20 million with two executive directors for working capital purposes[336][340] - The company is actively exploring additional financing, such as rights issues, placings of new shares, issuance of new shares, and/or convertible bonds[337][340] - The company is actively negotiating with relevant parties to repay debts and recover receivables, and discussing potential debt capitalization with creditors[338][341][343][348] - Directors will continue to explore business opportunities and implement stronger measures, including introducing high-margin products, closely monitoring operating expenses, and streamlining unnecessary expenditures[344][349] Company Secretary In fiscal year 2023, Mr. Chan Kui Ming served as the company secretary and completed the required minimum of 15 hours of relevant professional training under the GEM Listing Rules - In fiscal year 2023, Mr. Chan Kui Ming served as the company secretary and completed at least 15 hours of relevant professional training[346][350] Shareholders' Rights Shareholders have the right to requisition an extraordinary general meeting, make inquiries to the Board, and propose resolutions at general meetings, with clear procedures and requirements outlined - Shareholders holding not less than one-tenth of the paid-up share capital have the right to requisition the Board or company secretary in writing to convene an extraordinary general meeting[347][351] - Shareholders have the right to make inquiries to the Board in writing, sent to the company's principal place of business or registered office, or via email[355][359] - Shareholders holding not less than one-twentieth of the total voting rights or not less than 100 shareholders have the right to requisition the company in writing to propose a resolution at a general meeting[356][360] Investors and Shareholders Relations The Board values clear, timely, and effective communication with shareholders and investors, disclosing information through regular reports, general meetings, and the company website - The Board recognizes the importance of maintaining clear, timely, and effective communication with shareholders and investors[363][368] - The company communicates with shareholders and investors through annual, interim, and quarterly reports, notices, announcements, circulars, general meetings, and the company website[363][368] Policy on Payment of Dividends The company adopted a dividend payment policy on November 30, 2018, to balance shareholder expectations with prudent capital management, though future dividend payments are not guaranteed - The company adopted a dividend payment policy on November 30, 2018, effective from January 1, 2019[365][370] - The Board is committed to maintaining a balance between shareholder expectations and prudent capital management, but no specific amount of dividend payment is guaranteed for any given period[366][370][373][376] Risk Management and Internal Control The Board is responsible for risk management and internal control systems, continuously reviewing their effectiveness, and the Group has established risk management policies and engaged independent professional consultants for annual reviews to ensure system adequacy - The Board confirms its responsibility for risk management and internal control systems and continuously reviews their effectiveness[374][377] - The Group has established a risk management policy to standardize risk management, build a standard and effective risk management system, and improve risk prevention capabilities[375][377] - The Group has engaged independent professional consultants to conduct annual reviews covering revenue and collection cycles, expenditure cycles, cash management and treasury cycles, and financial reporting cycles[395][397] - The Group believes its risk management and internal control processes are sufficient to meet the company's needs in its current operating environment[395][397] Process Used to Identify, Evaluate and Manage Significant Risks The Group systematically manages significant risks through monthly meetings, risk identification, assessment, response, and monitoring reports, with regular reviews and updates to its risk management strategy - Executive directors and management meet monthly to review the financial and operational performance of each department[385][389] - Risk management procedures include identifying risks that may affect the business, assessing their impact and likelihood, prioritizing and developing response strategies, and continuous monitoring and regular reporting[386][387][388][390][391][392][393][394] Inside Information Disclosure Policy The company has established an inside information disclosure policy to ensure the capture, confidentiality, and timely disclosure of potential inside information in accordance with GEM Listing Rules - An inside information disclosure policy has been established to ensure that potential inside information is preserved and kept confidential until it has been disclosed consistently and timely in accordance with the GEM Listing Rules[396][398] Environmental, Social and Governance Report This report outlines the Group's efforts and achievements in corporate social responsibility and sustainable development for the 2023 fiscal year, covering its Hong Kong operations and adhering to GEM Listing Rules reporting guidelines About This Report This ESG report covers the Group's Hong Kong operations from January 1 to December 31, 2023, including various business segments, and is prepared in accordance with GEM Listing Rules reporting guidelines - This ESG report covers the Hong Kong operations from January 1 to December 31, 2023, including grain and oil food trading, consumables and agricultural product trading, property investment, money lending services, one-stop value chain services, and financial services[403][406] - This report is prepared in accordance with the Environmental, Social and Governance Reporting Guide set out in Appendix C2 of the GEM Listing Rules, following the principles of materiality, quantification, balance, and consistency[408][411][414] - The Board is fully responsible for the Group's sustainability strategy and reporting, assessing and determining ESG-related risks[416][420] Stakeholder Engagement The Group values communication with stakeholders, gathering their views and opinions through various channels to continuously improve its operations, with key stakeholders including employees, customers, suppliers, shareholders, the public, and government/regulatory bodies - The Group believes that understanding stakeholders' views and opinions is crucial for its long-term success and growth[418][422] - The Group communicates with stakeholders through internal meetings, performance appraisals, company events, training, business communications, customer service hotlines, emails, general meetings, regular reports, official website, and charitable activities[424][425][426][429] Materiality Assessment Through a materiality assessment survey, the Group identified and prioritized 24 ESG issues, with working environment quality and product and service responsibility deemed most important to stakeholders and the Group - The Group identified and analyzed material ESG issues through a materiality assessment survey, which serve as the focus of this report[432][433] - Working environment quality and product and service responsibility were identified as the most material issues for both stakeholders and the Group[437][438] Caring for Environment The Group is committed to environmental protection, complying with relevant laws and regulations, and implementing measures to reduce emissions, conserve energy and water, and manage waste, with both total greenhouse gas emissions and total energy consumption decreasing in fiscal year 2023 - The Group strives to comply with environmental protection laws and regulations and implements effective measures for resource utilization, energy conservation, and waste reduction[440][443] Emission Management The Group's greenhouse gas emissions primarily stem from vehicle gasoline consumption and purchased electricity for offices, with total emissions decreasing to 4.5 tonnes of CO2 equivalent in fiscal year 2023 - The Group's greenhouse gas emissions primarily originate from gasoline consumption by vehicles (Scope 1) and purchased electricity for offices (Scope 2)[441][444] Greenhouse Gas Emissions (tonnes of CO2 equivalent) | Indicator | 2023 | 2022 | Year-on-year Change | Reference Chunk | | :--- | :--- | :--- | :--- | :--- | | Total GHG emissions (Scope 1, 2, 3) | 4.5 | 7.9 | Decreased by 43.0% | [448] | | Direct emissions (Scope 1) | 0.0 | 4.2 | Decreased by 100% | [448] | | Indirect emissions (Scope 2) | 0.5 | 0.5 | No change | [448] | | Other indirect emissions (Scope 3) | 4.0 | 3.2 | Increased by 25.0% | [448] | - The Group aims to achieve a 15% reduction in emissions per production unit by 2025 (with 2020 as the base year)[442][444] Energy Management The Group reduces energy consumption through measures such as using energy-efficient light bulbs, adjusting air conditioning temperatures, selecting high-efficiency electronic equipment, encouraging employees to turn