F8企业(08347) - 2020 - 年度财报

Chairman's Statement The Group achieved significant performance growth this year, with revenue up 91.3% to HKD 439.3 million and net profit reaching HKD 4.5 million Key Financial Performance for FY2020 | Metric | FY2020 (Million HKD) | FY2019 (Million HKD) | YoY Growth | | :--- | :--- | :--- | :--- | | Revenue | 439.3 | 229.7 | +91.3% | | Net Profit | 4.5 | 0.8 | +462.5% | - Net profit growth was primarily due to increased diesel business sales and transportation, and a fair value change in contingent consideration payable of approximately HKD 3.6 million[18][21] - To enhance capacity and fulfill environmental responsibilities, the Group acquired two new diesel tank trucks to replace existing vehicles and owns one marine diesel barge[19][20] - Despite the impact of the COVID-19 pandemic, continuous investment in Hong Kong's public infrastructure and the recovery of the logistics sector provide an optimistic outlook for the diesel sales market[24] Management Discussion and Analysis Business Review The Group expanded its core business to include steel product manufacturing and sales in China, complementing its Hong Kong diesel operations, which saw revenue growth Revenue by Business Segment for FY2020 | Business Segment | Revenue (Million HKD) | % of Total Revenue | | :--- | :--- | :--- | | Diesel and Related Products Sales & Transportation | 328.1 | 74.7% | | Steel Products Sales | 111.2 | 25.3% | | Total | 439.3 | 100.0% | - Diesel business revenue increased by 42.8% year-on-year, primarily due to increased demand from existing client projects and contributions from three new marine diesel clients[31][34] - The Group established a joint venture in China with a 55% equity stake, primarily engaged in steel product processing, motor accessories, and finished product manufacturing, with a registered capital of RMB 30 million[30] - The Group disposed of 90% equity in China Forest Food during the year, and its financial results are no longer consolidated into the Group's statements[29] Financial Review Total revenue grew 91.3% to HKD 439.3 million, with net profit increasing to HKD 4.5 million despite a gross margin decline to 5.4% FY2020 vs FY2019 Financial Performance Comparison | Financial Metric | FY2020 (Million HKD) | FY2019 (Million HKD) | Change | | :--- | :--- | :--- | :--- | | Revenue | 439.3 | 229.7 | +91.3% | | Cost of Sales | 415.5 | 208.0 | +99.8% | | Gross Profit | 23.8 | 21.7 | +9.7% | | Gross Profit Margin | 5.4% | 9.5% | -4.1 percentage points | | Profit for the Year | 4.5 | 0.8 | +462.5% | | Net Profit Margin | 1.0% | 0.4% | +0.6 percentage points | - Revenue growth primarily stemmed from increased diesel sales, particularly due to higher demand from construction and logistics clients, and the newly added steel product sales business[46][47] - The decline in gross profit margin was mainly due to bulk purchase discounts offered to a major client[52] - The increase in net profit and net profit margin was primarily attributable to higher diesel business sales and transportation, and a fair value change in contingent consideration payable of approximately HKD 3.6 million arising from the disposal of a subsidiary[54][57] Liquidity and Capital Resources The Group maintained sound net current assets of HKD 82 million, with current ratio at 3.2x and gearing ratio increasing to 23.6% due to higher bank borrowings Liquidity and Capital Structure Metrics (As of March 31) | Metric | 2020 | 2019 | | :--- | :--- | :--- | | Current Assets (Million HKD) | 118.7 | 109.0 | | Current Liabilities (Million HKD) | 36.8 | 26.1 | | Current Ratio | 3.2 | 4.2 | | Gearing Ratio | 23.6% | 3.4% | - Bank financing facilities increased to HKD 65 million, with HKD 16.1 million utilized, secured by corporate guarantees, time deposits, and life insurance policies[61][62] Significant Investments, Material Acquisitions and Disposals The Group made two strategic moves: establishing a 55% owned joint venture in China for steel processing and acquiring a 51% stake in Mega Shell to expand its lubricant business - On June 27, 2019, the Group established a joint venture with partners in China to engage in steel product processing, motor accessories, and finished product manufacturing, holding a 55% equity interest with a registered capital of RMB 30 million[74] - On March 23, 2020, the Group agreed to acquire a 51% equity interest in Mega Shell (Global) Lubricant Technology Co., Ltd. for approximately HKD 16.38 million, paid by issuing 78 million consideration shares, with the acquisition completed on April 21, 2020[75][107] Use of Proceeds As of March 31, 2020, HKD 25.8 million of the HKD 45.1 million net proceeds from the 2017 listing were used, with HKD 19.3 million remaining for future use by March 31, 2022 Use of Net Proceeds from Listing (As of March 31, 2020) | Purpose | Planned Use (Million HKD) | Actual Use (Million HKD) | Unused (Million HKD) | Estimated Completion | | :--- | :--- | :--- | :--- | :--- | | Purchase of diesel tank trucks | 7.8 | 3.9 | 3.9 | Before March 31, 2022 | | Purchase of marine diesel barge | 14.0 | 8.5 | 5.5 | Before March 31, 2022 | | Further strengthening of workforce | 6.1 | 2.1 | 4.0 | Before March 31, 2022 | | Enhancement of IT and systems | 3.6 | 0.1 | 3.5 | Before March 31, 2022 | | Working capital for new businesses | 9.1 | 6.7 | 2.4 | Before March 31, 2022 | | General working capital | 4.5 | 4.5 | 0.0 | - | | Total | 45.1 | 25.8 | 19.3 | | Corporate Governance Report This report details the Company's compliance with the GEM Listing Rules' Corporate Governance Code, demonstrating its commitment to high governance standards through board structure, committee operations, and internal controls Board of Directors The Board comprises three executive and three independent non-executive directors, fulfilling listing requirements with separate Chairman and CEO roles, holding seven meetings and engaging in professional development - The Board comprises 6 members: Mr. Fong Chun Man (Chairman), Mr. Chan Chi Fai, and Ms. Lo Pui Yee as Executive Directors; Mr. Chui Chi Yan, Mr. Kwong Yuk Lap, and Mr. Wong On Yuen as Independent Non-executive Directors[119] - During the reporting period, the Board held 7 meetings, and the Chairman and Independent Non-executive Directors also held 1 meeting without Executive Directors present, demonstrating high overall attendance[131] - All Directors participated in continuous professional development activities, including attending training courses or reading relevant regulations and industry materials[140][145] Board Committees The Company established Audit, Remuneration, and Nomination Committees, all chaired by independent non-executive directors, to oversee financial reporting, internal controls, and remuneration policies - The Audit Committee comprises three Independent Non-executive Directors, chaired by Mr. Chui Chi Yan, primarily responsible for overseeing the effectiveness of financial reporting, internal control, and risk management systems[158][159] - The Remuneration Committee consists of two Independent Non-executive Directors and one Executive Director, chaired by Mr. Wong On Yuen, responsible for advising the Board on remuneration policies for Directors and senior management[165][166] - The Nomination Committee comprises two Independent Non-executive Directors and one Executive Director, chaired by Mr. Kwong Yuk Lap, responsible for reviewing the Board's structure, size, composition, and diversity policy[176][177] Risk Management and Internal Control The Board is responsible for effective risk management and internal control systems, categorizing key risks into strategic, operational, financial, and compliance, relying on cost-effective external annual reviews deemed adequate by the Audit Committee Key Risk Areas | Risk Area | Key Risk Content | | :--- | :--- | | Strategic Risk | Government policy sensitivity, market competition, reputational risk, etc | | Operational Risk | Labor supply, industrial accidents, information system disruption, etc | | Financial Risk | Liquidity, credit, interest rate, foreign exchange, inflation risk, etc | | Compliance Risk | Occupational safety and health, employment regulations, changes in listing rules, etc | - The Board, through the Audit Committee, conducted an annual review of the Group's risk management and internal control systems, covering financial, operational, and compliance controls, and deemed the systems adequate and effective[233][240] - The Group currently does not have an internal audit function, as the Board believes engaging external independent professionals for annual reviews is more cost-effective and will continue to review the need for establishing an internal audit function[238] Environmental, Social and Governance Report This report outlines the Group's ESG initiatives and performance, including an ESG task force, environmental data and reduction measures, and social aspects like employment, health and safety, and anti-corruption A. Environmental The Group is committed to environmental protection, managing emissions and resource consumption through policies, implementing energy-saving measures and promoting paperless operations despite increased emissions due to business growth Key Environmental Performance Indicators | Indicator | Unit | 2019/2020 | 2018/2019 | YoY Change | | :--- | :--- | :--- | :--- | :--- | | Total Air Pollutant Emissions | kg | 2,954.66 | 2,749.41 | +7.47% | | Total Greenhouse Gas Emissions | tonnes | 432.78 | 404.32 | +7.04% | | - Scope 1 (Direct Emissions) | tonnes | 415.02 | 386.19 | +7.47% | | - Scope 2 (Indirect Emissions) | tonnes | 16.24 | 16.57 | -2.01% | | Total Electricity Consumption | MWh | 31.84 | 32.49 | -2.00% | | Waste Paper Generated | kg | 318 | 325 | -2.15% | - Increased emissions were primarily attributed to higher demand for diesel and related products, leading to increased use of transport vehicles[293] - The Group has implemented energy-saving and emission reduction measures, including setting office air conditioning temperatures, encouraging employees to turn off unnecessary lights and appliances, and promoting paperless operations[300][311][325] B. Social The Group prioritizes employee well-being and social responsibility, ensuring equal employment opportunities, adhering to health and safety regulations, providing staff development, prohibiting child and forced labor, and implementing anti-corruption policies - As of March 31, 2020, the Group employed a total of 53 staff members, comprising 44 males and 9 females, all of whom are full-time employees[336] - The Group strictly adheres to occupational health and safety regulations, with no fatal cases reported during the period, successfully achieving a 0% fatality rate[350] - The Group strictly prohibits child and forced labor, ensuring compliance by verifying identity documents during the recruitment process[360][361] - The Group has implemented an effective whistleblowing policy to prevent unethical behaviors such as fraud, corruption, and bribery, with no concluded corruption litigation cases reported during the period[381][382] Report of the Board of Directors This report outlines the Board's work and decisions, including business expansion to steel manufacturing, no dividend recommendation, disclosure of shareholder interests, non-compete compliance, and details of continuing connected transactions Principal Activities and Results The Company primarily engages in investment holding, with core businesses in Hong Kong diesel sales and China steel product manufacturing, and the Board does not recommend any dividend for the year - The Group's principal activities are diesel sales and transportation in Hong Kong, and steel product manufacturing and sales in China[402] - The Board does not recommend the payment of any dividend for the year ended March 31, 2020[403] Directors' and Controlling Shareholders' Interests As of March 31, 2020, Chairman Mr. Fong Chun Man held 50.1% of the Company's shares as the controlling shareholder, with his spouse deemed to have the same interest, and all controlling shareholders confirmed non-compete compliance Major Shareholders' Shareholding (As of March 31, 2020) | Shareholder Name | Capacity/Nature of Interest | Number of Shares Held | Percentage of Shareholding | | :--- | :--- | :--- | :--- | | Mr. Fong Chun Man | Interest in controlled corporation | 440,000,000 | 50.1% | | Ms. Lo Pui Yee | Spouse's interest | 440,000,000 | 50.1% | | Grand Tycoon Limited | Beneficial owner | 440,000,000 | 50.1% | | Mr. Li Hok Yin | Beneficial owner | 49,456,000 | 5.6% | - Controlling shareholders Mr. Fong Chun Man and Grand Tycoon Limited confirmed compliance with non-compete undertakings during the reporting period, which was reviewed and confirmed by the Independent Non-executive Directors[461] Connected Transactions Jiangxi Xinji, a non-wholly owned subsidiary, engaged in continuing connected transactions for steel material procurement totaling approximately RMB 15.991 million, which the Board subsequently ratified as fair, reasonable, and compliant with GEM Listing Rules - The Group's subsidiary, Jiangxi Xinji, engaged in steel material procurement transactions with associates of its non-controlling shareholder, constituting continuing connected transactions[488][494] - For the year ended March 31, 2020, the total value of these procurement transactions was approximately RMB 15.991 million (approximately HKD 17.923 million)[489] - The Board, including the Independent Non-executive Directors, confirmed that these transactions were conducted in the ordinary course of the Group's business on normal commercial terms, were fair and reasonable, in the overall interest of shareholders, and were confirmed by the auditor[502][507] Independent Auditors' Report Grant Thornton Hong Kong Limited issued an unmodified opinion on the Group's consolidated financial statements for FY2020, affirming their fair presentation, with a key audit matter being the expected credit loss provision for trade and other receivables - The auditor issued an unmodified opinion on the consolidated financial statements for the year, deeming them to present fairly, in all material respects, the Group's financial position and performance[594] - A key audit matter was the 'Expected Credit Loss (ECL) provision for trade and other receivables,' where the auditor performed procedures to assess management's judgments and estimates regarding recoverability, finding sufficient evidence to support them[601][605] Consolidated Financial Statements Consolidated Statement of Profit or Loss and Other Comprehensive Income For the year ended March 31, 2020, the Group's revenue from continuing operations increased by 91.3% to HKD 439.3 million, with profit for the year significantly rising to HKD 4.506 million Consolidated Statement of Profit or Loss Summary (For the year ended March 31) | Item (Thousand HKD) | 2020 | 2019 | | :--- | :--- | :--- | | Continuing Operations | | | | Revenue | 439,338 | 229,718 | | Gross Profit | 23,817 | 21,723 | | Operating Profit | 7,291 | 6,950 | | Profit Before Tax | 5,928 | 6,813 | | Profit for the year from continuing operations | 4,506 | 5,336 | | Discontinued Operations | | | | Loss for the year | - | (4,532) | | Total Profit for the year | 4,506 | 804 | | Profit attributable to owners of the Company | 4,664 | 804 | | Basic Earnings Per Share (HK Cents) | 0.58 | 0.10 | Consolidated Statement of Financial Position As of March 31, 2020, the Group's total assets were HKD 152.8 million, total liabilities HKD 46.3 million, and total equity HKD 106.5 million, with non-current assets significantly increasing to HKD 34.1 million Consolidated Statement of Financial Position Summary (As of March 31) | Item (Thousand HKD) | 2020 | 2019 | | :--- | :--- | :--- | | Assets | | | | Non-current Assets | 34,103 | 10,166 | | Current Assets | 118,704 | 108,992 | | Total Assets | 152,807 | 119,158 | | Liabilities and Equity | | | | Current Liabilities | 36,775 | 26,085 | | Non-current Liabilities | 9,498 | 4,522 | | Total Liabilities | 46,273 | 30,607 | | Total Equity | 106,534 | 88,551 | | - Equity attributable to owners of the Company | 91,772 | 88,551 | | - Non-controlling interests | 14,762 | - | Consolidated Statement of Cash Flows The Group reported net cash outflows from operating and investing activities of HKD 4.011 million and HKD 29.407 million respectively, offset by a net cash inflow from financing activities of HKD 34.245 million, resulting in a year-end cash balance of HKD 6.661 million Consolidated Statement of Cash Flows Summary (For the year ended March 31) | Item (Thousand HKD) | 2020 | 2019 | | :--- | :--- | :--- | | Net cash used in operating activities | (4,011) | (2,415) | | Net cash used in investing activities | (29,407) | (8,304) | | Net cash from financing activities | 34,245 | 3,816 | | Net increase/(decrease) in cash and cash equivalents | 827 | (6,903) | | Cash and cash equivalents at beginning of year | 6,041 | 13,179 | | Cash and cash equivalents at end of year | 6,661 | 6,041 | Financial Summary This section provides a five-year financial summary, showing the Group's revenue consistently grew in FY2019 and FY2020 to a new high, with profitability significantly recovering in FY2020, and total assets and net assets steadily expanding Five-Year Results Summary (For the year ended March 31) | Item (Thousand HKD) | 2016 | 2017 | 2018 | 2019 | 2020 | | :--- | :--- | :--- | :--- | :--- | :--- | | Revenue | 146,920 | 180,616 | 164,491 | 229,718 | 439,338 | | Gross Profit | 20,956 | 24,843 | 24,821 | 21,723 | 23,817 | | Profit for the Year | 12,303 | 7,282 | 1,241 | 804 | 4,506 | Five-Year Assets and Liabilities Summary (As of March 31) | Item (Thousand HKD) | 2016 | 2017 | 2018 | 2019 | 2020 | | :--- | :--- | :--- | :--- | :--- | :--- | | Total Assets (Current + Non-current) | 36,122 | 50,898 | 100,619 | 119,158 | 152,807 | | Total Liabilities (Current + Non-current) | 14,092 | 21,586 | 12,845 | 30,607 | 46,273 | | Net Assets | 22,030 | 29,312 | 87,774 | 88,551 | 106,534 |