Financial Instruments and Debt Management - The company issued a total of RMB 120 million (approximately HKD 138 million) in convertible bonds with a 5% interest rate, completed in two tranches on May 3, 2024, and July 19, 2024[7]. - The company plans to issue a total of 41,000,000 new shares at a subscription price of HKD 0.1 per share[15]. - The company plans to leverage its financial instruments, such as convertible bonds, to support future growth initiatives[7]. - The net proceeds from the convertible bonds issuance are intended for repaying loans and preparing for the resumption of production facilities[46]. - The company aims to restructure debts with Jinzhou Bank to improve financial conditions and restore debt financing capabilities[62]. - The total principal amount owed by Jinzhou Yuancheng to Jinzhou Bank is RMB 212,500,000, including unpaid interest[15]. - The company is currently facilitating a debt restructuring related to the loan with Jinzhou Bank to alleviate financial pressure[195]. - The company completed the sale of the Empire Sugar and Empire Food subsidiaries to a related group on December 21, 2023[9]. - The company achieved a one-time gain of over HKD 200 million from the sale of its retail group and debt restructuring agreements[19]. Procurement and Supply Chain Management - The company has entered into a major procurement agreement for coal, corn granules, corn starch, and syrup, effective from January 1, 2025, to December 31, 2027[6]. - The strategic procurement agreement with Ruihao (Guangzhou) for the supply of corn starch and syrup is effective from January 1, 2023, to December 31, 2024[13]. - The company aims to strengthen its supply chain through agreements with various suppliers, enhancing operational efficiency[6]. - The company has ongoing procurement agreements for 240,000 tons of corn starch and 50,000 tons of syrup, effective from January 1, 2023, to December 31, 2024, with pricing based on current market rates[187]. - The company has entered into a new procurement agreement effective from January 1, 2025, to December 31, 2027, for the continuous supply of raw materials including coal, corn granules, corn starch, and syrup[192]. Corporate Governance and Management Structure - The company is committed to improving corporate governance practices as outlined in its corporate governance report[4]. - The company has established a continuous related transaction supervision committee to oversee ongoing transactions with related parties[7]. - The company emphasizes high standards of corporate governance to enhance confidence among shareholders, investors, employees, and business partners[72]. - The board confirmed compliance with all provisions of the corporate governance code for the year, ensuring adherence to the required standards[73]. - The company has established various departments and teams to promote and maintain high standards of corporate governance, including an Environmental, Social, and Governance (ESG) working group[72]. - The company has appointed new executive directors in January 2024, indicating a shift in management structure[104]. - The board consists of seven directors, including three executive directors, one non-executive director, and three independent non-executive directors[76]. - The independent non-executive directors bring diverse expertise, including accounting, law, and corporate governance, enhancing the board's oversight capabilities[68][69]. - The company has mechanisms in place for directors to seek external independent professional advice[81]. Financial Performance and Market Position - In 2024, the company's sales volume recorded a growth of approximately 60.3%, with total revenue increasing by over 40.0% year-on-year[18]. - The average selling price of sweetener products significantly adjusted downwards due to intense competition in the domestic market, leading to a gross profit margin decrease to 5.0%[18]. - The group’s sales volume and total revenue increased by approximately 60.3% and 41.4% to about 186,000 tons and HKD 623,500,000, respectively[29]. - The revenue from corn syrup increased by approximately 30.1% to about HKD 498,300,000, with sales volume rising by about 46.5% to approximately 145,000 tons[31]. - The group recognized a one-time gain of approximately HKD 42,200,000 from the sale of a retail group, leading to a significant increase in other income by about 549.6% to approximately HKD 74,700,000[34]. Risk Management and Internal Controls - The company has established a risk management framework based on the COSO model to identify and analyze key risks[135]. - The internal audit department plays a key role in monitoring governance and ensures effective implementation of internal control systems[140]. - The board of directors has reviewed the effectiveness of the company's risk management and internal control systems and found them to be sufficient[141]. - The company has adopted a culture of compliance with the highest ethical standards and relevant laws and regulations[165]. - The company monitors compliance with legal and regulatory requirements as part of its corporate governance practices[128]. Shareholder Engagement and Dividends - The company aims to pay at least 15% of the annual profit attributable to shareholders as dividends, subject to various factors[133]. - The company has a policy to maintain a progressive dividend policy to provide stable and sustainable returns to shareholders[133]. - The company encourages active communication with shareholders through various channels, including annual meetings and investor dialogues[130]. - The 2024 Annual General Meeting was held on June 28, 2024, where all proposed resolutions were passed by vote[132]. - No dividends were recommended for the year, consistent with the company's dividend policy[155].
大成糖业(03889) - 2024 - 年度财报