Financial Performance - The Group recorded a turnover of approximately HK$596 million for the year ended March 31, 2023, a decrease of approximately HK$273 million compared to the previous year[15]. - The Group recorded a turnover of approximately HK$596 million for the year ended 31 March 2023, representing a decrease of approximately 31% compared to HK$869 million for the previous financial year[37]. - Gross profit for the year was approximately HK$331 million, a decrease of approximately 27% from HK$456 million in the previous year[37]. - The segment result was approximately HK$200 million, reflecting a decrease of approximately 34% compared to HK$304 million in the last financial year[37]. - The decrease in turnover, gross profit, and segment result was primarily due to a reduction in property sales recognition during the year[37]. - Other revenue and net income decreased to approximately HK$25 million from approximately HK$27 million, mainly due to a decline in bank and other interest income[42]. - General and administrative expenses increased to approximately HK$164 million from approximately HK$149 million, primarily due to new business preparation costs[44]. - Selling expenses decreased to approximately HK$47 million from approximately HK$61 million, attributed to reduced sales recognition and related promotional activities[44]. - Profit attributable to owners of the Company was approximately HK$7 million, compared to approximately HK$6 million in the last financial year, despite a decrease in operational profit[55]. - Income tax decreased significantly to approximately HK$9 million from approximately HK$69 million, mainly due to lower assessable profits and over-provision recognized during the Year[54]. Market Operations - The Group managed a total of eleven agricultural produce exchange markets in mainland China, covering regions such as Wuhan, Huangshi, and Suizhou[18]. - The business operations span across multiple provinces, including Hubei, Henan, Guangxi, Jiangsu, and Liaoning[18]. - The Group's logistics network connects southern and northern regions, enhancing the efficiency of agricultural produce distribution[18]. - The Group's market expansion strategy includes establishing a nationwide chain of wholesale markets and modern agricultural logistics centers[18]. - The Group plans to expand new business sales channels by leveraging its eleven agricultural produce exchange markets across the country, targeting food supply to restaurants and supermarkets in Hong Kong[24]. - The turnover of Suizhou Market increased by approximately 11% compared to the last financial year[71]. - The turnover of Puyang Market increased by approximately 33% due to improved agricultural products transaction commission[73]. - The turnover of Luoyang Market decreased by approximately 52% due to reduced property sale recognition[72]. - The turnover of Yulin Market decreased by approximately 46% due to decreased property sale recognition[80]. - The turnover of Xuzhou Market decreased by approximately 3% compared to the last financial year[82]. - The turnover of Panjin Market decreased by approximately 4% compared to the last financial year[84]. Strategic Objectives - The year 2023 marks the beginning of the PRC's comprehensive implementation of the 20th National Congress's spirit, focusing on agricultural development and food security[19]. - The Group aims to ensure stable and secure supply of food and key agricultural products, aligning with national policies for rural revitalization and agricultural modernization[19]. - The company is committed to promoting high-quality development in agriculture and rural areas as part of its strategic objectives[19]. - The Group aims to enhance cold chain logistics, as the comprehensive cold chain circulation rate of fresh agricultural products in China is only 19%, significantly lower than the over 90% in developed countries[23]. - The Group is committed to implementing a comprehensive agricultural produce exchange market information system to drive business development and achieve sustained profit growth[28]. - The Group aims to build a nationwide agricultural produce exchange network, leveraging its industry position and advanced management systems[166]. - The Group is expanding operations in China through an "asset light" strategy and exploring electronic platform development to leverage advancements in the data economy promoted by the PRC government[169]. - The Group aims to build a national agricultural produce trading market network, leveraging its leading industry position and replicable business model[170]. Corporate Governance - The Company has maintained a high standard of corporate governance, emphasizing transparency, accountability, integrity, and independence to enhance competitiveness and operating efficiency[195]. - The Board comprises three executive Directors and three independent non-executive Directors as of the date of the annual report[199]. - The Company has complied with the Corporate Governance Code throughout the financial year ended March 31, 2023[196]. - The Company adopted the Model Code for Securities Transactions by Directors, ensuring compliance by all Directors throughout the financial year[197]. - The Company has a written code of conduct regarding securities transactions for relevant employees likely to possess inside information[198]. Legal and Compliance - The company has complied with all relevant laws and regulations impacting its business operations during the year[133]. - The Group has engaged independent environmental consultants to conduct environmental impact assessments for all construction projects, ensuring compliance with PRC environmental laws[129]. - The company has adhered to the "Three Simultaneities" principle in all construction projects, ensuring compliance with environmental standards[132]. - The Group regularly reviews its liquidity levels to ensure adequate financing for its capital-intensive agri-products exchange markets[124]. - The Group faces risks including fluctuations in the RMB exchange rate against Hong Kong dollars, which could impact financial reporting[124]. - The Group does not have a foreign currency hedging policy and is exposed to foreign currency risks primarily from operations in mainland China[111]. Human Resources - As of March 31, 2023, the Group employed 1,116 employees, a slight increase from 1,115 employees on March 31, 2022, with approximately 98% located in the PRC[160]. - The remuneration policy for employees is reviewed periodically, focusing on market conditions, company performance, and individual qualifications[160]. - The Company adopted a new share option scheme on August 26, 2022, to reward eligible participants and enhance company value[160]. Environmental and Social Responsibility - The Group donated approximately HK$6.29 million worth of supplies to charitable organizations in China and the local community during the year[29]. - The Group has been actively promoting the informatization of agricultural produce exchange markets to transform traditional markets into modern digital wholesale cities[22]. - The Group's leadership team has extensive experience in business operations, corporate governance, and mergers and acquisitions, enhancing its strategic capabilities[177][178]. Risk Management - The Group's treasury policy includes diversifying funding sources, primarily relying on internally generated cash flow and interest-bearing loans from banks and non-financial institutions[116]. - The Group's interest-bearing debts totaled approximately HK$1,402 million as of March 31, 2023, down from HK$1,492 million as of March 31, 2022[108]. - The effective interest rate for Listed Notes was 12% for both years, while financial institution borrowings had an effective interest rate of 5% as of March 31, 2023[115]. Legal Proceedings - The Company continues to seek legal advice for the recovery of damages against Ms. Wang and Tian Jiu[158]. - The Company was awarded damages totaling HK$567,037,325.74 from Ms. Wang and Tian Jiu, along with interest from January 18, 2021, until payment[157]. - The Supreme Court dismissed the application for retrial regarding the previous judgments, confirming the rulings in favor of the Company[151]. - The company has faced ongoing legal proceedings related to the acquisition of a 90% interest in Baisazhou Agricultural, with claims of forged agreements[138]. - The Ministry of Commerce of the PRC was ordered to handle an application regarding the revocation of approval related to the contested agreements within 30 days[142].
中国农产品交易(00149) - 2023 - 年度财报