Financial Performance - The Group recorded total revenue of approximately RMB5,073 million, an increase from RMB4,695 million in 2017, representing a growth of 8.1%[58]. - Gross profit decreased significantly by 28.5% to approximately RMB443 million, down from RMB620 million in 2017[58]. - Profit after taxation decreased to RMB238 million, compared to RMB394 million in 2017, reflecting a decline of 39.6%[59]. - Revenue from upstream products increased by 12.0% to RMB3,558.9 million, with a sales volume of cornstarch rising to approximately 1,153,848 tonnes[60][62]. - Revenue from fermented and downstream products slightly decreased to RMB1,514.6 million, down from RMB1,517.2 million in 2017[66]. - Revenue from starch-based sweetener increased by 18.7% to approximately RMB322.7 million, with an average selling price of RMB2,105 per tonne[68][70]. - Revenue from modified starch increased by 17.4% to RMB323.5 million, with export sales percentage rising to about 33.3%[68][71]. Business Operations - The Group's revenue is derived from two business segments: upstream products and fermented and downstream products, with production activities conducted in the People's Republic of China[6]. - The Company’s principal activity is investment holding, with subsidiaries engaged in manufacturing and selling cornstarch, lysine, and starch-based products[8]. - The Group's production activities are primarily located in the PRC, highlighting its operational focus in this region[8]. - The production capacity of cornstarch and lysine is expected to increase to 2,400,000 tonnes and 300,000 tonnes per annum respectively upon the completion of the Golden Corn Biotech production base by the end of 2019[45]. - The construction of the production base for Golden Corn Biotech is slightly behind schedule but is still targeted for operation by the end of 2019[45]. Environmental and Sustainability Practices - The Group is committed to complying with all environmental policies and relevant laws, and has an internal laboratory to ensure product quality meets national standards[6]. - The Group's environmental and sustainability report reviews compliance with laws and regulations impacting the business and relationships with stakeholders[6]. - The environmental and sustainability report complies with the "Environmental, Social and Governance Reporting Guide" of the Hong Kong Stock Exchange[105][114]. - The company has implemented a perpetual monitoring system for sewage disposal, which is reported to local environmental protection authorities[165]. - The company did not produce any hazardous waste in its production plants during the review year, and most non-hazardous waste is sold to third parties[165]. - There were no significant incidents of non-compliance with environmental laws during the review year, reflecting the company's commitment to environmental standards[165]. Corporate Governance and Compliance - The Board recommends a final dividend of HK1.20 cents per share for the year ended 31 December 2018, pending approval at the upcoming annual general meeting[9]. - The related party transactions for the year ended 31 December 2018 did not constitute connected transactions as defined under the Listing Rules[6]. - The company has complied with the Corporate Governance Code during the year under review, except for the absence of the chairman at the annual general meeting[194]. - The company has adopted a Securities Dealing Code that applies to all directors and relevant employees, ensuring compliance throughout the year[195]. - The board considers the internal control system effective and adequate for financial reporting and compliance with listing rules as of December 31, 2018[191]. Risk Management - The Group has implemented a strong balance sheet and sufficient banking facilities to mitigate domestic market risks[186]. - The Group utilizes a risk scorecard to rank and compare identified risks and their impacts, presenting this information to the Board effectively[184]. - The board evaluates the effectiveness of the company's internal control and risk management systems[197]. - The frequency of production output limitations may increase in the future due to regional gas pollutant benchmarks set by local government[186]. Employee and Stakeholder Relations - The Company recognizes the importance of employee health and safety as a priority[116]. - The company provided major training events including fire prevention drills and hazardous chemical leaking drills to enhance employee safety[126]. - The company strictly complies with PRC Labour Law and prohibits child and forced labor, promoting fair treatment in recruitment, compensation, and working conditions[127]. - The Group's sustainability is dependent on relationships with stakeholders, balancing financial performance with social and environmental responsibilities[115][117]. - The company has developed trust with suppliers, utilizing mobile technology for transparent corn kernel pricing and efficient procurement processes[155]. Shareholder Information - As of December 31, 2018, the Company's distributable reserves amounted to approximately RMB 156,291,000, including a share premium of approximately RMB 39,369,000[98][102]. - The Board intends to balance dividend distribution with adequate cash flow and reserves, with no assurance of specific dividend payments in any given period[99][103]. - The Group's public float is maintained at not less than 25% of the total issued shares as required under the Listing Rules[43].
中国淀粉(03838) - 2018 - 年度财报