Financial Performance - For the year ended March 31, 2020, the Group recorded a turnover of approximately RMB6,447 million, a decrease of 24.6% compared to RMB8,553 million in 2019[10]. - The Group reported a loss after tax of approximately RMB44 million for the year, compared to a profit of approximately RMB46 million in 2019[10]. - The production of LNG decreased by approximately 17 million cubic meters or 3.6% year-on-year, totaling approximately 453 million cubic meters[12]. - Revenue from LNG sales increased by approximately RMB25 million or 2% year-on-year, amounting to approximately RMB1,265 million, contributing approximately 19.6% of the total turnover[12]. - Gross profit from LNG sales decreased by approximately RMB119 million to approximately RMB61 million, with the gross profit margin dropping from approximately 14.5% to approximately 4.8%[12]. - Gross amounts of oil and gas sales contracts decreased to approximately RMB 4,750 million from approximately RMB 6,976 million, representing a decrease of approximately RMB 2,226 million or 31.9%[22]. - Revenue from sales of piped gas increased to approximately RMB 404 million from approximately RMB 306 million, representing an increase of approximately RMB 98 million or 32%[19]. - Gross profit from piped gas sales increased to approximately RMB 57 million from approximately RMB 21 million, with a gross profit margin rising from approximately 7.2% to 14.5%[19]. - The Group's gross profit for the year ended March 31, 2020, was approximately RMB 135 million, down from approximately RMB 226 million in 2019[28]. Economic and Market Conditions - The Group faced significant challenges due to stiff competition in the oil and gas market and the economic slowdown caused by the COVID-19 outbreak[11]. - The overall economic environment and market conditions will lead the Group to adopt cautionary strategies to mitigate adverse impacts on business[7]. - The Group anticipates healthy and sustainable growth in the energy market as China continues to deepen natural gas market reforms[5]. Cost Management and Business Strategy - The Group aims to optimize cost and business structures while exploring LNG distribution channels through collaborations with industry players and state-owned enterprises[5]. - The management is focused on developing the natural gas sector and exploring new business opportunities to create shareholder value[7]. Financial Position and Assets - As of 31 March 2020, the Group's bank balances and cash were approximately RMB29 million, down from approximately RMB68 million in 2019[30]. - The net current assets of the Group as at 31 March 2020 were approximately RMB636 million, compared to approximately RMB908 million in 2019, with a current ratio of approximately 1.22[30]. - The Group's borrowings as of 31 March 2020 included approximately RMB1,241 million due within one year and approximately RMB37 million repayable after one year, resulting in a gearing ratio of approximately 1.1, up from 0.9 in 2019[30]. - Capital expenditure for property, plant, and equipment amounted to approximately RMB10 million for the year ended 31 March 2020, down from approximately RMB20 million in 2019[30]. - As at 31 March 2020, the Group had pledged assets totaling approximately RMB952 million to banks for banking facilities, an increase from approximately RMB798 million in 2019[30]. Corporate Governance - The Board held a total of four meetings during the year, with attendance rates of 100% for the Chairman and all independent non-executive directors[50]. - The Company plans to consider holding more regular board meetings in the coming year to comply with governance codes[48]. - All independent non-executive directors have confirmed their independence annually as per Rule 3.13 of the Listing Rules[54]. - The Company has assessed the independence of its directors and found them to meet the independence guidelines set out in the Listing Rules[61]. - The Board is responsible for overseeing the Group's business, strategic decisions, and financial performance, ensuring sound internal control and risk management systems are in place[53]. - Each director is subject to retirement by rotation and re-election at the annual general meeting, with a minimum requirement of retirement once every three years[55]. - The Company intends to maintain its existing Bye-laws regarding director appointments despite inconsistencies with the Listing Rules[64]. - The company has maintained its existing company rules despite non-compliance with listing regulations regarding the tenure of independent non-executive directors[66]. - The chairman and CEO, Mr. Wang, has been in his position since January 27, 2011, and is responsible for managing the Board and the Group's business[68]. - The Board believes that the current structure, where the chairman and CEO roles are held by the same individual, is suitable for efficient strategy formulation and implementation[70]. - Directors are required to participate in continuous professional development to ensure their contributions to the Board remain informed and relevant[71]. - The Board has established three committees to ensure proper control of the Group and maintain high standards of corporate governance practices[73]. Audit and Risk Management - The Audit Committee (AC) comprises three independent non-executive directors, ensuring oversight of external auditor appointments and remuneration[86]. - The AC is responsible for reviewing the adequacy of the group's internal controls, risk management systems, and financial reporting integrity[86]. - The AC must meet with the external auditor at least twice a year to discuss audit scope and findings[88]. - The AC reviews significant financial reporting judgments and compliance with accounting standards and Listing Rules[88]. - The company has established a risk management organizational framework, which includes the Board, the audit committee, and the risk management group[115]. - The risk management group will identify risk exposures at least once a year and formulate a risk mitigation plan[116]. - The Directors confirm that they are not aware of any material uncertainties that may cast significant doubt on the Company's ability to continue as a going concern[112]. - The Company has adopted an enterprise risk management system to effectively identify, evaluate, and manage significant risks[116]. - The internal audit function has been established to monitor the risk management and internal control systems of the Group[117]. - The Board conducts an annual review of the effectiveness of the risk management and internal control systems, including significant risks and management's monitoring capabilities[122]. Shareholder Engagement - The Company maintains ongoing communication with shareholders through financial reports and general meetings[125]. - The Company has a website for communication with shareholders and investors, providing contact details for inquiries[126]. - Shareholders holding at least one-tenth of the paid-up capital have the right to requisition a special general meeting[132]. - The attendance of directors at the annual general meeting was recorded, with Mr. Wang Jianqing and Dr. Leung Hoi Ming attending all meetings[128]. - Shareholder engagement initiatives are being strengthened, allowing for more direct communication and feedback mechanisms with the board[138]. Environmental and Social Responsibility - The Group is committed to complying with relevant environmental standards and policies in the PRC and Hong Kong[168]. - The Environmental, Social and Governance Report will be published within three months after the annual report[168]. - The Group recognizes the importance of engaging employees, customers, and suppliers for corporate sustainability[168]. Future Outlook - Future outlook indicates a projected revenue growth of 20% for the next fiscal year, driven by new market expansions and increased demand for natural gas[141]. - The company is investing HKD 200 million in R&D for new technologies aimed at improving energy efficiency and reducing emissions[141]. - Yuan Heng Gas Holdings Limited plans to expand its market presence by entering two new provinces in the upcoming year, targeting a 25% increase in market share[141]. - The management has set a performance guidance of achieving EBITDA margins of 30% in the next fiscal year, up from 28%[141]. - New product offerings include a range of eco-friendly gas appliances, projected to contribute an additional HKD 50 million in revenue[141].
元亨燃气(00332) - 2020 - 年度财报