Financial Performance - The Group recorded total revenue of approximately RMB8,892 million for the year, a 31.7% increase from RMB6,750 million in 2019 [76]. - Gross profit increased significantly by 58.6% to approximately RMB560 million, up from RMB353 million in 2019 [76]. - Profit after taxation rose to RMB207 million, compared to RMB98 million in 2019 [76]. - Basic earnings per share increased to RMB0.0317 based on a weighted average of 5,995,591,000 ordinary shares [76]. - Revenue of upstream products increased significantly by 26.7% to RMB6,739 million (2019: RMB5,317 million) with a gross profit margin of 6.2% [78]. - Revenue of lysine products surged by 92.8% to approximately RMB1,443 million (2019: RMB749 million), with sales volume increasing by 115.2% in overseas markets and 74.9% in domestic markets [87]. - Revenue of starch-based sweetener was approximately RMB358 million (2019: RMB340 million) [87]. - Revenue of modified starch was RMB312 million (2019: RMB305 million) [87]. - The percentage of corn kernel cost to total cost of sales increased to about 87.3% (2019: 83.9%) due to significant market price increases [87]. - Distribution expenses increased to RMB160,786,000 in 2020 from RMB134,098,000 in 2019, representing a growth of approximately 19.9% [89]. - Administrative staff costs rose to RMB93,835,000 in 2020, up from RMB73,729,000 in 2019, an increase of about 27.3% [89]. - The Group's total staff costs, including Directors' emoluments, were approximately RMB190,000,000 in 2020, down from RMB208,000,000 in 2019, a decrease of about 8.7% [99]. - The gearing ratio improved to 2.8% in 2020 from 3.4% in 2019, indicating a stronger capital structure [103]. - The total shareholder return was 13.3% in 2020, a significant recovery from -8.3% in 2019 [103]. Dividends and Shareholding - The Board recommended a final dividend of HK0.90 cents per share for the year ended 31 December 2020, pending approval at the upcoming annual general meeting [12]. - As of December 31, 2020, Mr. Tian Qixiang holds 3,705,385,194 ordinary shares of the Company, representing 61.81% of the total shareholding [19]. - Merry Boom Group Limited holds 3,705,385,194 shares, representing 61.81% of the issued share capital [40]. - The total number of shares issued by the Company as of December 31, 2020, is 5,994,132,043 [19]. - The Company has adopted a Share Option Scheme to incentivize and retain key employees and management [27]. - The maximum number of shares that may be issued upon the exercise of all outstanding options under the Share Option Scheme must not exceed 30% of the number of issued Shares [33]. - The total number of Shares that may be allotted and issued upon the exercise of all options under the Share Option Scheme must not exceed 10% of the issued Shares as at the date of approval of the Share Option Scheme [33]. - The total number of Shares issued to each grantee in any 12-month period shall not exceed 1% of the issued Shares [33]. - Any grant of options to a substantial shareholder or an independent non-executive director in excess of 0.1% of the issued Shares or with an aggregate value exceeding HK$5 million requires shareholders' approval [33]. - As of December 31, 2020, no share options had been granted under the Share Option Scheme [37]. Environmental and Sustainability Practices - The Group is committed to complying with all environmental policies and relevant laws, and has established an internal laboratory to ensure product quality meets national standards, including food safety standards [10]. - The Group's environmental and sustainability report reviews compliance with laws and regulations that significantly impact the Group and its relationships with major stakeholders [9]. - The company maintains a commitment to meet all environmental standards set by the PRC government, with no material incidents of noncompliance reported during the year [145]. - The company utilizes methane generated from sewage treatment to produce steam for internal use, contributing to cost reduction and environmental protection [145]. - The Group's fresh water consumption increased to 2,095,597 m³ in 2020, up from 1,194,022 m³ in 2019, with an intensity index of 156 compared to 106 in 2019 [167]. - Total GHG emissions for 2020 were 1,238,861 tonnes of CO2e, an increase from 813,454 tonnes in 2019, with a GHG emission intensity index of 100 [167]. - The Group produced no hazardous waste in its production plants during the year under review [160]. - Non-hazardous waste produced increased to 70,717 tonnes in 2020, compared to 40,778 tonnes in 2019 [167]. - The Group's packaging material usage was 7,893 tonnes in 2020, with 20% of total packaging materials being reused, down from 23% in 2019 [167]. Corporate Governance - The Directors confirmed their independence in accordance with the Listing Rules, ensuring governance standards are upheld [12]. - The Group has established a corporate governance framework that complies with the applicable code provisions, ensuring accountability and integrity to stakeholders [197]. - The Board is composed of four executive Directors and three independent non-executive Directors, ensuring accountability to Shareholders [199]. - The Board formulated long-term and short-term strategic and business plans during the year [200]. - Corporate governance policies and practices were reviewed and monitored by the Board to ensure compliance with the CG Code [200]. - The effectiveness of the Group's internal control and risk management systems was evaluated by the Board [200]. - Integrity of financial information was ensured by the Board, highlighting a commitment to transparency [200]. Risk Management - The executive management team is responsible for managing risks and ensuring appropriate control procedures are in place [184]. - The Board reviews identified risks and mitigation tools annually, ensuring effective risk management [184]. - Monthly management reports on operations, market, and safety issues are circulated to keep management alert to potential risks [184]. - The company faces a lack of growth dynamics in the PRC, with challenges of oversupply and weak demand for cornstarch and related products intensifying over the year [189]. - The company has observed significant price volatility in cornstarch and corn kernel, which may lead to substantial losses if increased costs cannot be passed to customers promptly [191]. - The company is required to maintain a strong balance sheet and sufficient banking facilities to mitigate risks associated with external financing and economic conditions [191]. - The company emphasizes strict quality control and product testing to ensure compliance with customer and national standards, minimizing the risk of negative impacts on brand reputation [191]. Employee Relations and Training - The Group recognizes the health and safety of its employees as a core aspect of long-term success, implementing appropriate controls and training to minimize occupational injuries [116]. - The number of employees increased to 2,313 in 2020 from 2,300 in 2019, with a turnover ratio of 5.2% for males and 0.7% for females [131]. - The average training hours per employee increased to 14.8 hours per month in 2020 from 11.9 hours in 2019 [131]. - On-the-job training is provided to enhance employees' skills and capabilities, ensuring compliance with health and safety regulations [116]. - Training events and drills are mandatory, with results included in staff appraisal records, covering topics such as fire prevention, hazardous chemical handling, and occupational disease prevention [124]. - The Group encourages communication at all levels to achieve positive workplace relations, which are deemed mutually beneficial for both the Group and its employees [116]. Strategic Initiatives - The Group aims to improve production efficiency to maintain minimal production costs and increase profitability despite industry competition [70]. - The Group plans to deploy more resources in the development of different biobased materials in the long run [76]. - The Group aims to become a market leader in the corn refinery industry in China, focusing on cost control and strengthening the balance sheet [113]. - The Group is committed to enhancing its research and development capabilities to support sustainable growth [111]. - The Group's marketing force and market coverage are being enhanced to capture increasing market share [111]. - The company plans to conduct market research and feasibility studies for potential new product projects to enhance its product offerings [193].
中国淀粉(03838) - 2020 - 年度财报