Financial Performance - The Group recorded a turnover of approximately HK$869 million for the year ended March 31, 2022, an increase of approximately HK$218 million compared to the previous year[10]. - The Group recorded a turnover of approximately HK$869 million for the year ended 31 March 2022, representing an increase of approximately 33% compared to HK$651 million in the previous financial year[49][51]. - Gross profit for the year was approximately HK$456 million, an increase of approximately 30% from HK$352 million in the previous year[49][51]. - Segment result increased to approximately HK$304 million, up approximately 32% from HK$230 million in the previous financial year[49][51]. - The gross profit margin to turnover was 52% for the year, compared to 54% in the previous year[50]. - Other revenue and net income decreased to approximately HK$27 million from approximately HK$41 million in the previous year, primarily due to a reduction in government grants and subsidies[52]. - The Group recorded a gain on litigation judgment of approximately HK$49 million for the year, significantly lower than the HK$661 million recorded in the previous financial year[54]. - The profit attributable to owners of the Company was approximately HK$6 million, a sharp decline from HK$490 million in the last financial year, mainly due to reduced gains from litigation judgments[60]. Market Operations - The Group managed a total of 11 agricultural produce exchange markets in mainland China, covering various provinces including Hubei, Henan, Guangxi, Jiangsu, and Liaoning[14]. - The agricultural wholesale markets are crucial for ensuring the supply of essential food items, closely linked to the livelihoods of many households[25]. - The operation turnover of Huangshi Market increased by approximately 16% due to improved market operations, creating synergy with Wuhan Baisazhou Market[85]. - Huangshi Market's turnover increased by approximately 16% due to improved marketing efforts[86]. - Suizhou Market's turnover increased by approximately 65% compared to the last financial year[87]. - Luoyang Market's turnover increased by approximately 375% due to increased property sale recognition[89]. - Puyang Market's turnover decreased by approximately 44% due to decreased property sale recognition[91]. - Kaifeng Market's turnover increased by approximately 117% due to increased property sale recognition[93]. - Yulin Market's turnover decreased by approximately 22% due to decreased property sale recognition[107]. - Qinzhou Market's turnover decreased by approximately 9% due to decreased property sale recognition[109]. - Xuzhou Market's turnover increased by approximately 9% compared to the last financial year[111]. - Panjin Market's turnover increased by approximately 6% compared to the last financial year[114]. Strategic Initiatives - The Group's strategy includes optimizing the digital operation model to enhance efficiency and reduce costs in the agricultural wholesale industry[30]. - The Group has fully introduced a new electronic transaction settlement model across all agricultural produce exchange markets, aiming to reduce communication, approval, and operating costs[22]. - The Group plans to continue upgrading its electronic systems and market management models to diversify profit sources and revenue streams[31]. - The Group is exploring opportunities to establish new electronic trading platforms to enhance market efficiency[124]. - The Group is actively studying and evaluating various business opportunities to diversify income streams and deliver long-term benefits to shareholders[62]. - The Group aims to diversify its revenue streams and enhance its electronic systems and market management models in the future[33]. Regulatory and Economic Environment - The proposal to formulate a law on agricultural wholesale markets aims to strengthen planning, establish entry and exit mechanisms, and enhance supervision of the agricultural product market[18]. - The establishment of a legal framework for agricultural wholesale markets is expected to standardize operations and enhance healthy competition in the industry[18]. - The Central Government's No.1 Central Document for 2022 emphasizes the importance of stabilizing agricultural fundamentals and promoting rural revitalization amidst ongoing pandemic challenges[26]. - The PRC central government prioritizes agricultural development, promising investments in agricultural produce markets and infrastructure improvements[191]. - The Ministry of Commerce issued an opinion to strengthen county-level commercial systems and promote rural consumption[194]. - The State Council published a plan to promote agricultural digitalization as part of the 14th Five Year Development Plan[196]. Community and Social Responsibility - The Group is committed to food safety and aims to achieve high-quality and stable business performance through smart agricultural wholesale practices[31]. - The Group continues to prioritize food safety management and regularly conducts training to improve overall food safety awareness[40]. - The Group is committed to community support, donating RMB1 million for flood relief efforts and contributing essential goods for poverty alleviation[39][40]. Financial Position and Risks - As of March 31, 2022, the Group had total cash and cash equivalents of approximately HK$440 million, an increase from approximately HK$425 million as of March 31, 2021[132]. - Total assets were approximately HK$5,491 million, down from approximately HK$5,584 million in the previous year, while net assets increased to approximately HK$2,352 million from HK$2,206 million[132]. - The Group's gearing ratio remained stable at approximately 0.4 as of March 31, 2022, with total bank and other borrowings amounting to approximately HK$1,492 million[132]. - The ratio of total interest-bearing debts to total assets was approximately 27% as of March 31, 2022, compared to approximately 25% in the previous year[132]. - Outstanding capital commitments as of March 31, 2022, amounted to approximately HK$272 million, up from approximately HK$241 million in the previous year[134]. - The Group's operations are exposed to foreign currency risks primarily due to operations in mainland China and certain bank deposits denominated in RMB[134]. - The Group does not currently have a foreign currency hedging policy but is considering risk hedging tools to mitigate RMB exchange risks[134]. - The Group's treasury policy emphasizes diversifying funding sources, relying on internally generated cash flow and interest-bearing loans for operational financing[145]. - The Group regularly reviews its funding positions to ensure adequate financial resources for meeting financial obligations and considers various financing alternatives[145]. Legal Matters - The Company faced legal proceedings initiated by Ms. Wang and Tian Jiu regarding the alleged forgery of share transfer agreements related to a 90% interest acquisition in Baisazhou Agricultural[172]. - The Hubei Court dismissed the claims of Ms. Wang and Tian Jiu in June 2014, ordering them to bear the legal costs[174]. - The Supreme Court revoked the Hubei Court Judgment and declared the Contended Agreements void, affirming a sale and purchase agreement valued at HK$1,156 million[174]. - The Company continues to be the legal and beneficial owner of Baisazhou Agricultural under PRC Laws, as confirmed by multiple court judgments[180]. - The counterclaim made by Ms. Wang and Tian Jiu for the return of the Company's 90% interest in Baisazhou Agricultural was dismissed by the Hubei Court on 23 December 2019[181]. - The Supreme Court dismissed the appeal of Ms. Wang and Tian Jiu against the 23 December Judgment, upholding the ruling on 29 March 2021[181]. - The company was awarded damages totaling RMB 510,000,001 as per the HK Judgment[183]. Employment and Workforce - As of 31 March 2022, the group employed 1,115 employees, a decrease from 1,151 employees as of 31 March 2021[188]. - During the year, 226,000,000 share options were granted at an exercise price of HK$0.118 per share, with no options vested, exercised, cancelled, or lapsed[188].
中国农产品交易(00149) - 2022 - 年度财报