标准发展集团(01867) - 2024 - 年度财报

Company Information This section provides essential company information, including contact details for the board, committees, company secretary, auditor, legal advisors, share registrar, registered office, principal place of business, and principal bankers - This section provides essential company information, including contact details for the board, committees, company secretary, auditor, legal advisors, share registrar, registered office, principal place of business, and principal bankers[6][7] Chairman's Statement The Chairman's Statement reviews the Group's annual performance amidst macroeconomic challenges, noting a decline in total revenue and expanded losses primarily due to reduced oil business income and the nascent stage of new bio-energy projects. It highlights the strategic transformation towards organic waste utilization, aligning with national policies and expected to contribute revenue by Q4 2024, while emphasizing future resource optimization and diversified business development for long-term sustainable returns - Facing a challenging business environment with unsatisfactory post-pandemic recovery and international tensions, the Group flexibly adjusted its strategy, investing in organic waste comprehensive utilization projects to align with China's national development strategy[8][9] Key Financial Performance | Metric | FY2024 | FY2023 | Y-o-Y Change | | :--- | :--- | :--- | :--- | | Total Revenue | Approx. HKD 489.8 million | Approx. HKD 661.2 million | -25.9% | | Loss Attributable to Shareholders | Approx. HKD 24.1 million | Approx. HKD 10.1 million | +138.6% | - The decline in performance is primarily attributed to significant internal capital deployment for organic waste project construction, leading to reduced investment in the oil business and a substantial drop in revenue, while the new project is still under construction and not yet generating income[10] - Looking ahead, despite challenging operating conditions, the Board will continue to optimize resource allocation, stabilize existing businesses, and actively expand into new ventures, particularly those aligned with China's strategic development, to achieve business diversification and broaden revenue streams[13] Management Discussion and Analysis This section provides a comprehensive review of the Group's business operations, financial performance, liquidity, and future outlook, alongside an analysis of key risks and significant events Business Review and Outlook This year, the Group's total revenue decreased to HKD 489.8 million, primarily due to reduced revenue from the mainland China oil trading business, partially offset by growth in construction and agriculture. The Group actively invested in a Shandong bio-energy project, aligning with national rural revitalization policies, which processes organic waste into green natural gas and has entered trial production, with future plans to prudently evaluate opportunities and expand revenue streams amidst economic slowdown and rising costs - The Group primarily engages in construction and engineering, oil, agriculture, and bio-energy businesses, with annual revenue decreasing from HKD 661.2 million to HKD 489.8 million, mainly due to a decline in oil trading revenue[15] - In February 2023, the Group approved investment in a rural biomass comprehensive development and utilization project in Shandong, aligning with China's '14th Five-Year Plan' and now in the land acquisition and facility construction phases[16] Key Risks and Uncertainties The Group faces key risks including the non-recurring nature of business contracts, potential legal disputes, challenges in project cost control, reliance on stable labor supply, and macroeconomic, energy price volatility, and agriculture-related natural disaster and price cyclical risks - The Group's risks include the non-recurring nature of contracts, legal dispute risks, sub-contracting and material cost fluctuation risks, and labor supply stability risks[17][18] - Industry-specific risks include the oil business being affected by macroeconomic conditions and energy prices, such as oil price volatility due to geopolitical influences, and the agriculture business facing extreme weather, natural disasters, pests, and fluctuations in product selling and procurement prices[22] Financial Review This fiscal year, the Group's total revenue decreased by 25.9% year-on-year to HKD 489.8 million, with gross profit significantly declining by 82.7% to HKD 3.8 million, primarily dragged by the oil trading business. Despite recording a HKD 5.1 million impairment credit reversal, increased selling expenses and finance costs ultimately led to an expanded annual loss of HKD 20.1 million Key Financial Indicators | Financial Metric | FY2024 (HKD million) | FY2023 (HKD million) | Y-o-Y Change | | :--- | :--- | :--- | :--- | | Revenue | 489.8 | 661.2 | -25.9% | | Direct Costs | 486.0 | 639.1 | -24.0% | | Gross Profit | 3.8 | 22.1 | -82.7% | | Impairment Loss (Net of Reversal) | (5.1) | 6.2 | N/A | | Selling Expenses | 2.9 | 1.0 | +190% | | Finance Costs | 1.3 | 0.6 | +116.7% | | Loss for the Year | 20.1 | 8.8 | +128.4% | Liquidity and Financial Resources As of March 31, 2024, the Group's financial position indicates tightening liquidity, with total assets slightly increasing to HKD 291.7 million, but cash and bank balances sharply declining from HKD 153.3 million to HKD 23.9 million. Total interest-bearing borrowings significantly increased to HKD 75.3 million, causing the gearing ratio to surge from 9.8% to 48.8%, and the current ratio to drop from 2.5 times to 1.2 times Key Liquidity and Financial Resources Indicators | Metric | March 31, 2024 | March 31, 2023 | | :--- | :--- | :--- | | Total Assets | HKD 291.7 million | HKD 274.0 million | | Total Liabilities | HKD 137.3 million | HKD 104.7 million | | Shareholders' Equity | HKD 154.4 million | HKD 169.3 million | | Interest-bearing Borrowings and Lease Liabilities | HKD 75.3 million | HKD 16.6 million | | Bank Balances and Cash | HKD 23.9 million | HKD 153.3 million | | Current Ratio | 1.2 times | 2.5 times | | Gearing Ratio | 48.8% | 9.8% | - The increase in gearing ratio is primarily due to the rise in total borrowings during the year[40] Significant Investments and Litigation During the year, the Group increased its stake in Biaofa Eco (Juye) from 60% to 90% through a RMB 30 million capital injection, while its equity in Biaofa Eco (Juancheng) increased to 66.7% due to other shareholders' withdrawal. Additionally, the Group is involved in four ongoing civil lawsuits, with provisions made for two, one expected to be won, and another for which no liability is anticipated - The Group increased its equity interest in Biaofa Eco (Juye), an indirect wholly-owned subsidiary, from 60% to 90% through a capital injection of RMB 30 million[53] - The Group is involved in four civil lawsuits, with provisions made for two, amounting to HKD 0.267 million and HKD 0.409 million respectively[50] Events After Reporting Period Subsequent to the reporting period, on May 21, 2024, the Group's subsidiary, Biaofa Eco (Juancheng) Co., Ltd., entered into a RMB 50 million loan agreement with Industrial Bank, guaranteed by the Company and a director - On May 21, 2024, subsidiary Biaofa Eco (Juancheng) entered into a loan agreement with a principal amount of RMB 50 million[60] Biographies of Directors and Senior Management This section details the personal biographies of the Company's executive directors, independent non-executive directors, and company secretary, including their age, academic background, professional qualifications, industry experience, and their roles and committee memberships within the Company - Executive Directors include Mr. Liu Zhan Cheng, Chairman and Chief Executive Officer, Ms. Qin Mingyue, and Mr. Xu Jing, Chief Financial Officer, all possessing extensive experience in management, investment, finance, and corporate finance[63][64][65] - Independent Non-executive Directors include Dr. Su Lixin, Mr. Leung Wing Chun, and Dr. Yan Bing, who possess profound professional backgrounds in accounting academia, engineering consulting, and international economic research, respectively[68][69][72] Directors' Report The Directors' Report outlines the Group's principal activities, financial performance, dividend policy, share capital structure, and significant transactions. During the reporting period, the Group primarily engaged in construction, oil, agriculture, and bio-energy businesses, experiencing decreased total revenue and expanded losses, with no final dividend recommended. The report discloses connected transactions and capital injections into bio-energy subsidiaries, details directors' and major shareholders' equity interests, and confirms compliance with public float requirements Results and Dividends The Group recorded a loss for the current fiscal year, and the Board does not recommend the payment of a final dividend for the year ended March 31, 2024 - The Directors do not recommend the payment of a final dividend for the year ended March 31, 2024[85] Discloseable and Connected Transactions During the reporting period, the Group undertook two significant discloseable transactions: a joint capital injection with connected persons into Biaofa Eco (Juancheng), approved by independent shareholders, and a RMB 30 million capital injection into another subsidiary, Biaofa Eco (Juye), to support its biomass clean energy business development - The Group, together with connected persons including Shandong Caijin Energy, made a capital injection into Biaofa Eco (Juancheng) Co., Ltd., constituting a discloseable and connected transaction, which was approved by shareholders at an EGM on February 13, 2023[110][111] - On December 6, 2023, the Group injected RMB 30 million into Biaofa Eco (Juye) Co., Ltd., a discloseable transaction aimed at developing the biomass clean energy market[115] Major Customers and Suppliers This fiscal year, the Group experienced high customer and supplier concentration, with the largest customer contributing 21.3% of total turnover and the top five customers accounting for 62.5%. On the supply side, the largest supplier represented 11.7% of total direct costs, and the top five suppliers collectively accounted for 30.9% Customer and Supplier Concentration | Concentration Metric | Percentage | | :--- | :--- | | Largest Customer as % of Total Turnover | 21.3% | | Top Five Customers as % of Total Turnover | 62.5% | | Largest Supplier as % of Total Direct Costs | 11.7% | | Top Five Suppliers as % of Total Direct Costs | 30.9% | Directors' and Chief Executives' Interests and Short Positions in Shares, Underlying Shares and Debentures As of March 31, 2024, Chairman Mr. Liu Zhan Cheng beneficially owned 74.86% of the Company's shares through his controlled corporation, making him the controlling shareholder. Executive Director Mr. Xu beneficially owned 10,000 shares. No other directors or chief executives held interests in the Company's shares Directors' and Chief Executives' Interests in Shares | Name | Capacity/Nature of Interest | Number of Shares Held | Approximate Percentage of Shareholding | | :--- | :--- | :--- | :--- | | Mr. Liu Zhan Cheng | Interest in controlled corporation | 1,118,460,000 | 74.86% | | Mr. Xu | Beneficial owner | 10,000 | <0.01% | Corporate Governance Report This report outlines the Company's corporate governance structure and practices, noting adherence to the Corporate Governance Code with three deviations during the reporting period: non-separation of Chairman and CEO roles, Chairman's absence from the AGM, and insufficient board meeting frequency. It details the Board's responsibilities, the functions of its Audit, Remuneration, and Nomination Committees, and the Company's policies on risk management, internal control, information disclosure, and shareholder communication Corporate Governance Practices The Company has applied the principles and provisions of the Corporate Governance Code, but during the reporting period, there were three deviations: the Chairman and Chief Executive roles are held by the same person (deviation from Code Provision C.2.1), the Chairman did not attend the AGM (deviation from Code Provision F.2.2), and the Board held insufficient regular meetings (deviation from Code Provision C.5.1). Additionally, the Company has not arranged legal liability insurance for directors (deviation from Code Provision C.1.8) - The Company has complied with the Corporate Governance Code, but with three main deviations: - Overlap of Chairman and CEO roles: Mr. Liu Zhan Cheng holds both Chairman and CEO positions, deviating from Code Provision C.2.1 - Chairman's absence from AGM: Chairman Mr. Liu Zhan Cheng was unable to attend the 2023 Annual General Meeting, deviating from Code Provision F.2.2 - Insufficient Board meeting frequency: Only two regular Board meetings were held during the year, instead of the required minimum of four, deviating from Code Provision C.5.1[152][193][194] - The Company has not arranged appropriate legal liability insurance for its directors, deviating from Code Provision C.1.8, as the Company assessed the related risk to be minimal[154] Board Committees The Board has three committees: Remuneration, Nomination, and Audit. The Remuneration Committee reviews directors' and senior management's remuneration. The Nomination Committee reviews Board composition and nominates new directors. The Audit Committee, comprising three independent non-executive directors, oversees financial reporting, internal control, and risk management. All committees held meetings during the year to fulfill their duties - Remuneration Committee: Chaired by Mr. Leung Wing Chun, with members Dr. Su Lixin and Mr. Liu Zhan Cheng. One meeting was held during the year to review directors' and senior management's remuneration[185] - Nomination Committee: Chaired by Mr. Liu Zhan Cheng, with members Dr. Su Lixin and Mr. Leung Wing Chun. One meeting was held during the year to review and recommend matters related to the re-election of directors[187][188] - Audit Committee: Chaired by Dr. Su Lixin, with members Mr. Leung Wing Chun and Dr. Yan Bing. Two meetings were held during the year to review annual and interim results, internal control, and risk management systems[189] Risk Management and Internal Control The Board bears overall responsibility for the Group's risk management and internal control systems, reviewing them at least annually. The Group has established risk identification, assessment, and mitigation procedures. An independent consultant reviewed the internal control system, which the Audit Committee deemed effective and adequate. Although the Corporate Governance Code suggests an internal audit function, the Company currently does not have one and will review its necessity annually - The Board is responsible for overseeing the internal control and risk management systems, reviewing their effectiveness at least annually[202] - The Group engaged an independent consultant to review the internal control system, which the Audit Committee and the Board deemed effective and adequate[203] - The Company has not established an internal audit function but will review the necessity of doing so annually[204] Independent Auditor's Report Huarong (Hong Kong) CPA Limited, the independent auditor, issued an unqualified opinion on the Group's consolidated financial statements as of March 31, 2024, affirming that they present a true and fair view of the Group's financial position, performance, and cash flows. The report highlighted two key audit matters: revenue recognition for construction contracts and the valuation of trade receivables and contract assets, both involving significant management judgment and estimation - The auditor issued an unqualified opinion on the consolidated financial statements, deeming them to present a true and fair view of the Group's financial position and operating results[218] - Key Audit Matter One: Revenue recognition for construction contracts. This is considered a key audit matter due to its material amount and the significant judgment and estimation involved in assessing project progress[223] - Key Audit Matter Two: Valuation of trade receivables and contract assets. This is considered a key audit matter because their balances are material to the financial statements as a whole, and the estimation of expected credit losses involves significant management judgment[225] Consolidated Financial Statements This section presents the Group's consolidated financial statements, including the statement of profit or loss and other comprehensive income, statement of financial position, statement of changes in equity, and statement of cash flows, providing a comprehensive overview of the Group's financial performance and position Consolidated Statement of Profit or Loss and Other Comprehensive Income For the year ended March 31, 2024, the Group's revenue significantly decreased to HKD 489.8 million from HKD 661.2 million last year, with gross profit falling from HKD 22.1 million to HKD 3.8 million. Due to reduced revenue and various expenses, the annual loss expanded from HKD 8.8 million to HKD 20.1 million, resulting in a total comprehensive expense of HKD 24.4 million after accounting for exchange differences Consolidated Statement of Profit or Loss and Other Comprehensive Income | Item (HKD thousand) | 2024 | 2023 | | :--- | :--- | :--- | | Revenue | 489,794 | 661,230 | | Gross Profit | 3,816 | 22,116 | | Loss Before Tax | (20,353) | (7,351) | | Loss for the Year | (20,133) | (8,829) | | Loss Attributable to Owners of the Company | (19,940) | (8,829) | | Total Comprehensive Expense for the Year | (24,368) | (10,101) | | Basic Loss Per Share (HK cents) | (1.33) | (0.63) | Consolidated Statement of Financial Position As of March 31, 2024, the Group's total assets were HKD 291.7 million, slightly up from HKD 274.0 million last year, primarily driven by an increase in non-current assets from HKD 15 million to HKD 146 million. Total liabilities rose from HKD 104.7 million to HKD 137.3 million, while total shareholders' equity decreased from HKD 169.3 million to HKD 154.4 million, with a significant reduction in cash and cash equivalents Consolidated Statement of Financial Position | Item (HKD thousand) | March 31, 2024 | March 31, 2023 | | :--- | :--- | :--- | | Non-current Assets | 145,973 | 14,992 | | Current Assets | 145,737 | 258,983 | | Total Assets | 291,710 | 273,975 | | Current Liabilities | 124,278 | 103,930 | | Non-current Liabilities | 13,042 | 727 | | Total Liabilities | 137,320 | 104,657 | | Net Assets | 154,390 | 169,318 | | Equity Attributable to Owners of the Company | 144,815 | 169,318 | | Non-controlling Interests | 9,575 | – | Consolidated Statement of Changes in Equity As of March 31, 2024, equity attributable to owners of the Company decreased from HKD 169.3 million at the beginning of the year to HKD 144.8 million, primarily due to a HKD 19.9 million loss for the year and a HKD 4.1 million decrease in translation reserve. Additionally, HKD 9.6 million in non-controlling interests was recognized due to subsidiary acquisitions and changes in non-controlling interests - Equity attributable to owners of the Company decreased from HKD 169.3 million to HKD 144.8 million, primarily due to a total comprehensive expense of HKD 24.1 million for the year[244] - Non-controlling interests were first recognized during the year due to the acquisition of subsidiaries and equity changes, with an ending balance of HKD 9.575 million[244] Consolidated Statement of Cash Flows This year, the Group's net cash and cash equivalents decreased by HKD 122.6 million. Net cash outflow from operating activities was HKD 56.7 million, primarily impacted by working capital changes. Net cash outflow from investing activities amounted to HKD 90.5 million, mainly for purchasing property, plant, and equipment and acquiring associates. Net cash inflow from financing activities was HKD 24.6 million, derived from new borrowings Consolidated Statement of Cash Flows | Item (HKD thousand) | 2024 | 2023 | | :--- | :--- | :--- | | Net Cash Used in Operating Activities | (56,690) | (17,535) | | Net Cash Used in Investing Activities | (90,478) | (907) | | Net Cash Generated from Financing Activities | 24,616 | 33,615 | | Net (Decrease) Increase in Cash and Cash Equivalents | (122,552) | 15,173 | | Cash and Cash Equivalents at Beginning of Year | 153,344 | 139,538 | | Cash and Cash Equivalents at End of Year | 23,921 | 153,344 | Notes to the Consolidated Financial Statements This section provides detailed explanations and supplementary information for the financial statements, covering accounting policies, detailed segment results, composition of significant assets and liabilities, related party transactions, contingent liabilities, capital commitments, and post-reporting period events. Key highlights include a significant decline in oil business revenue as the primary driver of overall revenue decrease, substantial capital expenditure and losses in the bio-energy business during its large-scale investment and construction phase, the Group's phased acquisition of associate 'Biaofa Eco (Juancheng)' into a controlled subsidiary, and increased borrowings from related parties to support new business development - Segment Information (Note 6): The Group is divided into four segments: construction and engineering, oil, agriculture, and bio-energy. The oil business segment's performance shifted from profit to loss, while the newly invested bio-energy business segment recorded a HKD 4.55 million loss[426][428] - Trade Receivables (Note 22): Net trade receivables decreased from HKD 44.7 million to HKD 13.9 million. Receivables aged over 180 days constitute a higher proportion of the total, amounting to HKD 23.23 million[483][486] - Borrowings (Note 28): Total borrowings significantly increased from HKD 14.87 million to HKD 61.08 million, with new borrowings primarily from company directors and related parties to support business development[507][509][510] - Step Acquisition (Note 43): During the year, the Group's investment in 'Biaofa Eco (Juancheng)' transitioned from an associate to a controlled subsidiary, with the transaction treated as an acquisition of a group of assets and liabilities rather than a business combination[602][603] - Capital Commitments (Note 42): As of the reporting period end, the Group had capital commitments of approximately HKD 186 million, primarily for unpaid registered capital of subsidiaries (HKD 108 million) and construction costs for property, plant, and equipment (HKD 77.75 million)[599] - Events After Reporting Period (Note 44): In May 2024, subsidiary Biaofa Eco (Juancheng) entered into a loan agreement with a principal amount of RMB 50 million to support its development[604] Financial Summary This section provides a summary of the Group's performance, assets, and liabilities over the past five fiscal years. Data indicates significant fluctuations in the Group's revenue over the past five years, peaking in FY2023 before declining in FY2024. In terms of profitability, the Group has recorded losses for the past three consecutive years. Asset size has continuously grown over the past five years, while total liabilities have significantly increased in the last two years Five-Year Financial Performance Summary | Year Ended March 31 (HKD thousand) | 2024 | 2023 | 2022 | 2021 | 2020 | | :--- | :--- | :--- | :--- | :--- | :--- | | Revenue | 489,794 | 661,230 | 306,558 | 221,894 | 295,885 | | Profit (Loss) for the Year | (20,133) | (8,829) | (21,010) | 1,006 | 1,043 | Five-Year Financial Position Summary | As of March 31 (HKD thousand) | 2024 | 2023 | 2022 | 2021 | 2020 | | :--- | :--- | :--- | :--- | :--- | :--- | | Total Assets | 291,710 | 273,975 | 253,754 | 149,411 | 159,164 | | Total Liabilities | (137,320) | (104,657) | (108,430) | (31,706) | (42,465) | | Total Equity | 154,390 | 169,318 | 145,324 | 117,705 | 116,699 |