We could not find any results for:
Make sure your spelling is correct or try broadening your search.
Register for streaming realtime charts, analysis tools, and prices.
| Name | Symbol | Market | Type |
|---|---|---|---|
| Gx Cleantech | LSE:CTEK | London | Exchange Traded Fund |
| Price Change | % Change | Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Traded | Last Trade | |
|---|---|---|---|---|---|---|---|---|---|---|
| -0.0665 | -1.03% | 6.379 | 6.375 | 6.399 | 0 | 16:35:06 |
From May 2019 to May 2024
TIDMCTEK
RNS Number : 4692H
China Chaintek United Co., Ltd
16 March 2015
Press Release 16 March 2015
China Chaintek United Co., Ltd
("Chaintek", the "Company" or the "Group")
Final Results
Chaintek (AIM:CTEK), the provider of logistics services to manufacturers of consumer goods in China, today announces its final results for the year ended 31 December 2014 (the "period").
Financial Highlights
Hot Features
Premium
-- Revenue up 3.7% to RMB 363.7 million (2013: RMB 350.6 million)
-- Profit before tax up 1.0% to RMB 287.4 million (2013: RMB 284.9
million)
-- EBITDA up 0.9% to RMB 292.9 million (2013: RMB 290.5 million)
-- Pre-tax profit margin of 79.0% (2013: 81.3%)
-- Cash position of RMB 472.2 million (2013: RMB 319.3 million)
-- A maintained final dividend of 4 pence per share is now proposed,
which will be offered by way of scrip dividend only, giving
a total dividend of 6 pence per share for this financial year
-- Purchase of a transit warehouse for the logistics services
division for a total cost of RMB 75.8 million
Commenting on the final results, Shufang Zhuang, Executive Director and the Group's founder, said: "During the past financial year, China Chaintek has retained its leading position in logistics services. Group revenues and profit before tax were slightly ahead of last year. This was achieved against a background of slower economic growth in China. In view of this, I am pleased with the continued progress that China Chaintek has made in 2014, and the Group remains focused on expanding capacity and growing its customer base.
"Despite the slowdown in the growth of the China economy and the changes being implemented by our manufacturing customers, the Company remains focused on expanding capacity. The new transit warehouse facility will maintain the high standards of service that our customers expect. In the short term, changes to shoe and apparel manufacturers business model and reduced transport charges will have a significant negative impact on 2015 results and the Board considers that revenues for the current year are likely to be approximately 35% down on 2014 and profit before tax approximately 50% lower than that for 2014.
"Our strategy for growth in logistic and inventory solutions, coupled with e-commerce opportunities, remains unchanged. The delay in the new logistics park is frustrating for all shareholders. But China Chaintek is meeting the challenges caused by the delay. I remain confident that the Company is building a solid foundation to continue the strong growth desired by management and shareholders. We are a profitable cash generative company with very substantial cash reserves."
- Ends -
For further information:
China Chaintek United Co., Ltd www.chaintek-united-ir.com
Derrick Wong (Finance Director) Tel: +65 9227 8485
Tel: +86 159 8597 3034
Nominated Advisor and Broker
ZAI Corporate Finance Limited
Peter Trevelyan-Clark / Wei Wang Tel: +44 (0) 20 7060 2220
(Nomad)
Steven Baird (Broker)
Abchurch Communications Limited
Henry Harrison-Topham / Quincy Tel: +44 (0) 20 7398 7702
Allan
chaintek@abchurch-group.com www.abchurch-group.com
Dividend Timetable
Ex-dividend date 23 April 2015 Dividend record date 24 April 2015 Annual General Meeting 8 May 2015 Dividend payment date 20 May 2015 ----------------------- --------------
The financial statements for the year ended 31 December 2014 will shortly be available on the Company's website at www.chaintek-united-ir.com
Chairman's Statement
It is with pleasure that I present to you the report and consolidated financial statements of China Chaintek United Co., Ltd for the year ended 31 December 2014, the third since the Group was admitted to trading on the AIM market in August 2012.
Performance
Revenues increased from RMB 350.7 million to RMB 363.6 million and profit before tax from RMB 284.9 million to RMB 287.4 million. As a highly cash generative business, the Company retained a strong year end cash position of RMB 472.1 million after payments in respect of the new transit warehouse facility of RMB 60 million.
Strategy
The Strategic Report, set out after the Chief Executive's Review, is designed to assess and inform you about your Company's approach to its business, business risks, and strategy for the development of the business and management style. In addition to what is in the Report, your Board wishes to emphasise its belief in the logistics sector in China in which the Company is serving. Consumerism and the accelerating use of e-commerce in China are key to the future growth of the Company. Investing now in greater logistical supply capacity and, over time, in the information technology systems that support it is crucial.
Outlook
E-commerce in China proliferates throughout many supply sectors and during 2014 statistical evidence pointed to the activity surpassing that of the United States by volume. This trend is good for your Company. The far-reaching economic and systemic reforms announced following the 2014 third plenum of the General Committee of the Party are enhancing the growth of consumerism generated by the increasing use of mobile telephony by an aspirational generation for ordering goods and services online. It is these trends that are driving the growth of the historically fragmented logistics sector which is a good omen for the growth of Chaintek's business. However, the macro economic slowdown in the economy is resulting in structural changes which are impacting both manufacturers and, in the near term, Chaintek as noted in the Chief Executive's Review.
Revenue and Dividends
On 22 September 2014, the Group announced an interim scrip dividend of 2 pence net per share with a 1 pence per share cash alternative, in respect of the six month period ended 30 June 2014, paid on 17 November 2014 to shareholders.
A maintained final dividend of 4 pence per share is now proposed, which will be by way of scrip dividend only, giving a total dividend of 6 pence per share for this financial year.
Board Governance
The Board meets quarterly with up to two meetings per annum in China. It has also met on an ad-hoc basis on three occasions during the period. Through its Nomination Committee the Board carries out evaluations of each of its Directors, Chairman, the Board itself and its committees. The Board also reviews on an ongoing basis each of its service providers, their scope, cost and quality of service. Regular liaison is maintained between the Board's Audit Committee and the Company's Auditors.
Annual General Meeting
This year's Annual General Meeting will be held at the Company's Head Office at 16.00 hours Beijing time (09.00 hours BST) on 8 May 2015. If you have any detailed questions, you may wish to raise these in advance with the Company Secretary. Shareholders who cannot attend the Annual General Meeting in person are encouraged to use their proxy votes. Shareholders who hold their shares through CREST are able to lodge their votes electronically.
William Knight
Non-Executive Chairman
16 March 2015
Chief Executive's Review
During the past financial year, China Chaintek has retained its leading position in logistics services. Group revenues of RMB 363.6 million and profit before tax of RMB 287.3 million were slightly ahead of last year. This was achieved against a background of slower economic growth in China. In view of this, I am pleased with the continued progress that China Chaintek has made in 2014, and the Group remains focused on expanding capacity and growing its customer base. The Group remains highly cash-generative with a year-end cash position of RMB 472.1 million (2013: RMB 319.3 million) after payments in respect of the new transit warehouse facility of RMB 60 million.
Logistics Services Division
This Division achieved a 3% increase in revenues. The Division added six new customers, including Joeone, a Shanghai Stock Exchange listed men's business and casual wear manufacturer, which contributed approximately 2% to the Division's total revenues. The Group has diversified the Division's customer base, notably into the food and building materials industries which now comprise 23% of the Division's revenues (22% in 2013). Shoes and apparel are an unchanged 69% and other categories 8% of divisional revenue.
As announced on 9 December 2014, the Company has purchased another transit warehouse for the logistics services division, located near the Chaintek head office in Fujian Province and close to a number of factories belonging to Chaintek's major customers. This facility is expected over time to reduce the impact of increasingly stringent daytime travel restrictions on larger lorries used by the Company's third party transport carriers. Operations at the new facility have commenced. In the longer term, the facility should allow the Group to capture an anticipated increase in demand from the market. It is also important in ensuring the Company maintains the high service levels expected by its clients.
Fuel costs in China during 2014 reduced by some 20%. This impacts on the delivery costs charged to the manufacturing customers, which during the current financial year will reduce by 10%, thereby reducing the revenue of the logistics division by the same amount. In addition, the Group will incur some additional costs in addressing such problems as more stringent traffic controls.
Many of the major shoe and apparel manufacturers in Fujian Province have traditionally operated on a business model of producing large volumes sold over a lengthy period with promotions and discounting as appropriate. This traditional model is unsuited to a changing market requiring greater and more timely choice. Accordingly, manufacturers are adapting their business model to one which produces more innovative designs to meet customer demand and capable of shorter production runs requiring timely and efficient delivery. This process is being encouraged by Central Government. During the period while manufacturers implement these changes, they expect their volumes to fall significantly. This reduction in volumes will directly impact the Division and we anticipate revenue in 2015 from such customers will, taken with the affect of reduced delivery costs, decline by approximately 35%. However, these changes will ultimately result in an increased demand for efficient, modern and cost effective logistical services. China Chaintek already has the ability to meet such criteria and intends to increase its capacity to cope with accelerated demand.
Inventory Solutions Business
This Division achieved a 7.3% increase in revenues, despite no new distribution centre being added in the year. The Division accounts for approximately 14% of Group revenues.
Inventory solutions customers are undertaking the same changes as our logistics customers and we are anticipating a reduction of approximately 20% in the Division's revenues in 2015.
New Logistics Park
The Board is most disappointed not to be able to report progress in relation to the planned new Logistics Park over a parcel of land in Cizao Town, Jinjiang City, Fujian Province, China. Prospective development is based on the purchase of certain Land Use Rights ("LUR"), fully paid for during 2013 at a cost of RMB 273 million. Payments were made to Fujian Jinjiang Industrial Park Development and Construction Co., Ltd. ("LDC"), a land development company established and owned by Local Government ("LDC"). The formal LUR Certificate that is required before the Group is able to use the land has still to be issued. Consequent to the delay in the issue of the formal LUR Certificate, the Group has signed a supplementary agreement with the LDC dated 6 March 2015. This agreement confirms inter alia, that the LUR in respect of the parcel of land specified in the initial purchase agreement is not now able to be obtained from the LDC, that the LDC is seeking to locate an acceptable alternate parcel of land for the Group and that the Group has the right to request full payment of RMB 273 million from the LDC at any time up to the date that a formal LUR Certificate is issued by the LDC.
The Company is taking all practicable steps to progress a new logistics park. In the interim, initiatives such as the recent purchase of the additional transit warehouse help to maintain the Company's position.
Outlook
Despite the slowdown in the growth of the China economy and the changes being implemented by our manufacturing customers, the Company remains focused on expanding capacity. The new transit warehouse facility will maintain the high standards of service that our customers expect.
In the light of the factors I have referred to above, the Board considers that revenues for the current year are likely to be approximately 35% down on 2014 and profits before tax approximately 50% lower than those for 2014.
Our strategy for growth in logistic and inventory solutions, coupled with e-commerce opportunities, remains unchanged. The delay in the new logistics park is frustrating for all shareholders. But China Chaintek is meeting the challenges caused by the delay. I remain confident that the Company is building a solid foundation to continue the strong growth desired by management and shareholders. We are a profitable cash generative company with very substantial cash reserves. Finally, my thanks to the Company's management and employees for their hard work.
Meijin Xu
Chief Executive Officer
16 March 2015
Strategic Report
The Strategic Report is used to inform shareholders and to help them to assess how the Directors have performed their duty to promote the success of the Company during the year under review.
Strategy Objective and Operations of the Company
The Company was formed by Shufang Zhuang and Meijin Xu when they created its operational subsidiary, Xingtai Logistics in 2000, principally to provide domestic logistics services to fast moving consumer goods manufacturers in Jinjiang City, Fujian Province, where the Company's main business operations are headquartered. Jinjiang City is a fast-growing and important light manufacturing centre where approximately 70% of the entire production volume of sports shoes and apparel in China is produced.
The Company operates through its two business divisions; its Logistics Services and its Inventory Solutions Services Division. The Logistics Services Division provides logistics connections between the Group's manufacturer customer base and their retail markets in the PRC using a network of eight independent transport agents. Efficiencies are achieved for both the transport agents and the manufacturers by consolidating the goods of several manufacturers to be delivered to similar destinations at the same time, thereby increasing the loading rate on the transport agents' trucks and reducing the per unit transportation cost.
The Inventory Solutions Services Division provides inventory storage and management services including sorting, packaging, labelling and short term storage; an activity that began in 2010 in response to customer needs. It should be noted that manufacturers in China acknowledge that managing logistics and warehousing is not only a complex but relatively costly element of the manufacturing process and by providing these services to its customer base, your Company is assisting them to reduce warehousing costs.
All the Group's logistics' customers are based in Fujian Province, emphasising the importance of operating close to its customer base and seven of the Group's top ten customers are now listed in one or other of the stock exchanges of Hong Kong, Singapore, the PRC and United States. The rapidly expanding requirement for logistics, their supply and related inventory services in China is being enhanced by Central Government initiatives to promote a more efficient manufacturing sector.
Fair Review of the Business
Key Performance Indicators
Indicator 2011 2012 2013 2014 ------------------------------- ----- ----- ----- ----- Revenue (RMB in million) 263 341 351 364 Gross Profit (RMB in million) 218 284 306 312 Profit before taxation (RMB in million) 200 254 285 287 Net cash and cash equivalents (RMB in million) 98 343 319 472
A comprehensive review of the Group's performance during the year is given in the Chief Executive's Review and referred to in the Chairman's Statement.
Principal Risks and Uncertainties
The Board of Directors has overall responsibility for the establishment and oversight of the Group's risk management framework. The Group's risk management policies are established to set out its overall business strategies, tolerance of risk and general risk management philosophy. Risk management policies and systems are reviewed regularly to reflect changes in market conditions and the Group's activities.
Risks which the Group faces are given in Note 24 to the consolidated financial statements.
The Board is disappointed not to be able to report any progress in relation to its planned new Logistics Park over a parcel of land in Cizao Town, Jinjiang City, Fujian Province, China. Prospective development is based on the purchase of certain Land Use Rights ("LUR"), fully paid for during 2013 at a cost of RMB 273 million. Payments were made to Fujian Jinjiang Industrial Park Development and Construction Co., Ltd. ("LDC"), a land development company established and owned by Local Government ("LDC"). The formal LUR Certificate that is required before the Group is able to use the land has still to be issued. Consequent to the delay in the issue of the formal LUR Certificate, the Group has signed a supplementary agreement with the LDC dated 6 March 2015. This agreement confirms inter alia, that the LUR in respect of the parcel of land specified in the initial purchase agreement is not now able to be obtained from the LDC, that the LDC is seeking to locate an acceptable alternate parcel of land for the Group and that the Group has the right to request full payment of RMB 273 million from the LDC at any time up to the date that a formal LUR Certificate is issued by the LDC. The Board is of the view that the LDC will have the funds available to make such repayment if requested. The Board is unable to say when the formal LUR Certification process will be completed.
People
People are a very important part of China Chaintek and its ability to maintain the shared values that will enable the Company to deliver shareholder value and excellent customer service.
To retain and develop its people, emphasis is placed on greater employee involvement in delivering its vision through continual training, employee feedbacks and dissemination of information through regular employee update meetings.
Gender Representation
As at 16 March 2015, there were five male Directors and one female Director on the Board. The Company's policy on gender is detailed under the Nomination and Remuneration Committee section in the Annual Report.
Social and Environmental Policies
Chaintek United believes that companies should act in a socially responsible manner. Although the Company's priority at all times is to act in the best interests of its customers, it recognises that, increasingly, non-financial issues such as social environmental factors have the potential to impact the share price as well as the reputation of companies. Good practice, honesty and integrity at all times are our stated aims and objectives.
Future Developments
The development of a new logistics park remains important to the Company. Pending that development, the Group has purchased an additional transit warehouse for the logistics services division.
This additional facility, which is located near the China Chaintek Head Office and within proximity of a number of factories belonging to China Chaintek's major customers, became operational in January 2015. The cost of this warehouse is RMB 75.8 million of which RMB 60 million has already been paid to secure the facility.
The Group remains focused on the planned strategy for growth and construction of a new Logistics Park and the delay in land use rights connected to this development is considered in more detail in the section above.
Despite the delays, the Group believes that with its healthy cash-generating financial position, capital expenditure can continue to be financed from within internal financial resources.
William Knight
Chairman
16 March 2015
Consolidated statement of financial position
As at 31 December 2014
(All amounts in RMB unless otherwise stated)
31 December 31 December
2014 2013
Note RMB RMB
Assets
Non-Current
Land use right prepayments 5 360,337,726 302,436,208
Property, plant and equipment 6 75,965,619 80,407,090
------------------------------- ----- -------------- ------------
436,303,345 382,843,298
Current
Land use right prepayments 5 2,098,482 669,911
Trade and other receivables 7 95,098,771 97,188,052
Cash and cash equivalents 8 472,166,608 319,283,433
------------------------------- ----- -------------- ------------
569,363,861 417,141,396
Total assets 1,005,667,206 799,984,694
=============================== ===== ============== ============
Equity and Liabilities
Capital and reserves
Share capital 9 382,249 357,254
Share premium 12 105,291,900 66,838,371
Merger reserve 10 (204,100) (204,100)
Statutory common reserve 11 5,000,000 5,000,000
Capital reserve 12 9,821,903 9,821,903
Warrant reserve 13 13,184,433 13,184,433
Retained earnings 847,400,679 678,183,830
------------------------------- ----- -------------- ------------
980,877,064 773,181,691
Liabilities
Current
Trade and other payables 14 11,477,171 11,733,085
Current tax payable 13,312,971 15,069,918
------------------------------- ----- -------------- ------------
Total liabilities 24,790,142 26,803,003
Total equity and liabilities 1,005,667,206 799,984,694
=============================== ===== ============== ============
Consolidated statement of comprehensive income
for the financial year ended 31 December 2014
(All amounts in RMB unless otherwise stated)
Year ended Year ended
31 December 31 December
2014 2013
Note RMB RMB
Revenue 15 363,665,980 350,625,538
Cost of sales (51,861,544) (44,702,868)
-------------------------------- ----- ------------- -------------
Gross profit 311,804,436 305,922,670
Other income 16 1,333,460 955,929
Distribution expenses (1,133,985) (642,892)
Administrative expenses (24,629,064) (21,327,814)
-------------------------------- ----- ------------- -------------
Profit before taxation 17 287,374,847 284,907,893
Income tax expense 18 (73,299,898) (72,518,637)
-------------------------------- ----- ------------- -------------
Profit for the year 214,074,949 212,389,256
Other comprehensive income:
Other comprehensive income (at
nil tax) - -
-------------------------------- ----- ------------- -------------
Total comprehensive income for
the year 214,074,949 212,389,256
================================ ===== ============= =============
Earnings per share (RMB)
- Basic 22 3.79 3.88
- Diluted 22 3.68 3.77
================================ ===== ============= =============
Consolidated statement of changes in equity
for the financial year ended 31 December 2014
(All amounts in RMB unless otherwise stated)
Statutory
Share Share Merger common Capital Warrant Retained
capital Premium reserve reserve reserve reserve earnings Total
RMB RMB RMB RMB RMB RMB RMB RMB
Balance as at 1
January 2013 357,254 66,838,371 (204,100) 5,000,000 9,821,903 13,184,433 465,794,574 560,792,435
Total
comprehensive
income for
the year
- Profit for
the year - - - - - - 212,389,256 212,398,256
---------------- -------- ------------ ---------- ---------- ---------- ----------- ------------- ------------
Balance as at
31 December
2014 357,254 66,838,371 (204,100) 5,000,000 9,821,903 13,184,433 678,183,830 773,181,691
Total
comprehensive
income for
the year
- Profit for
the year - - - - - 214,074,949 214,074,949
Transactions
with owners
recognised
directly in
equity
contributions
by and
distributions
to owners
- Dividends
(Note 23) 24,995 38,453,529 - - - - (44,858,100) (6,379,576)
Balance as at
31 December
2013 382,249 105,291,900 (204,100) 5,000,000 9,821,903 13,184,433 847,400,679 980,877,064
================ ======== ============ ========== ========== ========== =========== ============= ============
Consolidated statement of cash flows
for the financial year ended 31 December 2014
(All amounts in RMB unless otherwise stated)
Year ended Year ended
Note 31 December 31 December
2014 2013
RMB RMB
Cash Flows from Operating Activities
Profit before taxation 287,374,847 284,907,893
Adjustments for:
Amortisation of land use rights
prepayments 5 669,911 669,911
Depreciation of property, plant
and equipment 6 6,203,360 5,785,860
Loss (Gain) on disposal of property,
plant and equipment 17 84,223 (68,975)
Interest income 16 (1,333,460) (886,954)
Operating profit before working
capital changes 292,998,881 290,407,735
Changes in trade and other receivables 2,089,281 (4,727,362)
Changes in trade and other payables (255,914) 44,451
---------------------------------------- ----- -------------- ---------------
Cash generated from operations 294,832,248 285,724,824
Income tax paid (75,056,845) (71,735,071)
---------------------------------------- ----- -------------- ---------------
Net cash generated from operating
activities 219,775,403 213,989,753
Cash Flows from Investing Activities
Acquisition of property, plant
and equipment (1,870,612) (10,435,248)
Acquisition of land use rights (60,000,000) (221,000,000)
Proceeds from disposal of property,
plant and equipment 24,500 105,000
Interest received 1,333,460 886,954
---------------------------------------- ----- -------------- ---------------
Net cash used in investing activities (60,512,652) (230,443,294)
Cash Flows from Financing Activities
Repayment of advance from a
Shareholder - (6,975,275)
Dividends paid 23 (6,379,576) -
---------------------------------------- ----- -------------- ---------------
Net cash (used in) generated
from financing activities (6,379,576) (6,975,275)
Net (decrease) increase in cash
and cash equivalents 152,883,175 (23,428,816)
Cash and cash equivalents at
beginning of year 319,283,433 342,712,249
---------------------------------------- ----- -------------- ---------------
Cash and cash equivalents at
end of year 8 472,166,608 319,283,433
======================================== ===== ============== ===============
Notes to the final results announcement
for the financial year ended 31 December 2014
1 General information
The financial information for the years ended 31 December 2014 and 31 December 2013 contained in this announcement do not constitute the Group's audited financial statements. The comparative financial information is based on the audited Group financial statements for the financial year ended 31 December 2013. Those financial statements, upon which the auditors issued an unqualified audit opinion, are available on the Company's website. The financial information for the year ended 31 December 2014 has been extracted from the Group's audited financial statements which will be available on the Company's website in due course and which are expected to be posted to shareholders on or around 23 March 2015. The auditors have issued an audit report on the Group's financial statements for the year ended 31 December 2014 which contains an unqualified audit opinion but includes an emphasis of matter paragraph relating to the significant uncertainty (which is explained in the Chief Executives Review and Note 5 to this financial information) whether or not a land use rights contract and supplementary agreement will be completed by the certification by Local Government of an acceptable alternative parcel of land that will available for use by the Group or the Group will request a full refund of the land use rights prepayment made.
China Chaintek United Co., Ltd. ("China Chaintek" or the "Company") was incorporated as an exempted limited liability company in the Cayman Islands on 13 April 2011. The Company's registered office is at Floor 4, Willow House, PO Box 2804, Grand Cayman, KY1-1112, Cayman Islands. The Company's shares were admitted to trading on the AIM market of the London Stock Exchange on 20 August 2012.
The principal activities of the Company are those related to investment holding. The principal activities of the subsidiaries are logistics services and inventory solutions as indicated in Note 4.
2(a) Restructuring exercise and historical information
On 3 March 2000, Fujian Xingtai Logistics Co., Ltd. ("Fujian Xingtai") was incorporated as a limited liability company in the People's Republic of China (the "PRC") controlled by Mr Shufang Zhuang(Mr Zhuang). The registered office is located at Mei Ling Industrial Park, Jinjiang City, Fujian Province, PRC.
On 5 March 2010, Fujian Xingtai became a wholly owned entity of Mr Zhuang and his wife Mrs Meijin Xu (Mrs Xu).
On 7 December 2010, Chaintek United Holdings Ltd ("ChaintekUnited") was incorporated as a limited liability company in Hong Kong SAR. ChaintekUnited, an investment holding company, has its registered office at Room 1613, 16F, Tai Yau Building, 181 Johnson Road, Wan Chai, Hong Kong SAR. ChaintekUnited is wholly owned by Mr Zhuang and Mrs Xu.
On 29 January 2011, ChaintekUnited acquired 100% of the equity interest of Fujian Xingtai for a purchase consideration of RMB 10,204,100, fully paid in cash with an advance from Mrs Xu.
On 13 April 2011, the Company was incorporated in the Cayman Islands for the proposed listing of the Company's shares on the AIM market of the London Stock Exchange. The Company is majority owned and controlled by Mr Zhuang and Mrs Xu.
On 27 June 2011, the Company acquired 100% of the equity interest of ChaintekUnited for a purchase consideration of HK$ 10,000 based on the nominal issued share capital of ChaintekUnited.
The acquisitions of Fujian Xingtai by ChaintekUnited and ChaintekUnited by the Company were a combination of businesses under common control by Mr Zhuang and Mrs Xu. As a result, the Company accounted for the acquisitions in a manner similar to a pooling of interests.
2(b) Basis of preparation
(a) Statement of compliance
The consolidated financial statements have been prepared in accordance with International Financial Reporting Standardsas adopted by the European Union.
(b) Basis of measurement
The financial statements have been prepared on the historical cost basis.
(c) Functional and presentation currency
The consolidated financial statements are presented in Renminbi (RMB), which is the presentation currency of the Group and the functional currency of the principal operating subsidiaries of the Group. All financial information has been presented in RMB, unless otherwise stated.
The accounting policies set out below have been applied consistently to all periods presented in these consolidated financial statements, and have been applied consistently by Group entities.
(d) Use of estimates and judgements
The preparation of the financial information in accordance with this basis of preparation requires the use of judgements, estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial information and the reported amounts of revenues and expenses during the financial year. Although these estimates are based on management's best knowledge of current events and actions, actual results may differ from those estimates.
Estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimates are revised and in any future periods affected.
Critical judgements
Impairment of land use rights and property, plant and equipment
The use of estimates is required in the area of asset impairment, particularly in assessing: (1) whether an event has occurred that may indicate that the related asset values may not be recoverable; (2) whether the carrying value of an asset can be supported by the net present value of future cash flows which are estimated based upon the value-in-use calculation; (3) the appropriate key assumptions to be applied in preparing cash flow projections including whether these cash flow projections are discounted using an appropriate rate. Changing the assumptions selected by management to determine the level, if any, of impairment, including the discount rates or the growth rate assumptions in the cash flow projections could materially affect the net present value used in the impairment test and as a result affects the Group's results. Land use rights and property, plant and equipment are reviewed to determine whether there is any indication that the carrying value of these assets may not be recoverable and have suffered impairment loss. If any such indication exists, the assets are tested for impairment. The recoverable amounts of the assets are estimated in order to determine the extent of the impairment loss, if any. The recoverable amount is the higher of an asset's fair value less costs to sell and value in use. Such impairment loss is recognised in profit or loss. The Directors do not consider that any impairment of land use rights is required to be made for 2014.
Further information on the delay in the granting of land use rights related to a specific parcel of land in Jinjiang City is included at note 5.
Classification of land use right prepayments as operating leases
Within the PRC it is the practice for the State to issue land use rights to individuals or entities. Such rights are evidenced through the granting of a land use rights certificate, which gives the holder the right to use the land (including the construction of buildings thereon) for a given length of time. An upfront payment is made for these rights. The Directors judge that the substance of these arrangements is an operating lease over the land, and that the upfront payment represents prepaid lease rentals. As such, a prepayment is recognised in the statement of financial position, analysed between current and non-current assets. The prepayment is amortised to spread the lease cost over the duration of the term of the land use rights, as specified in the lease certificate.
Critical accounting estimates and assumptions
Useful lives of property, plant and equipment
Property, plant and equipment are depreciated on a straight-line basis over their estimated useful lives. The Group performs annual reviews on whether the assumptions made on useful lives continue to be valid. As changes in the expected level of usage, competitors' actions and technological obsolescence arising from changes in the market demands or service output of the assets could impact the economic useful lives and the residual values of these assets, this could lead to potential changes in future depreciation charges, impairment losses and/or write-offs. A 5% difference in the expected useful lives of these assets from management's estimates would result in approximately 0.1% (2013: 0.1%) variance in the Group's profit for the financial year ended 31 December 2014.
Income tax
Judgement is involved in determining the provision for income taxes. There are certain transactions and computations for which the ultimate tax determination is uncertain during the ordinary course of business. The Group recognises liabilities for expected tax issues based on estimates of whether additional taxes will be due.
Where the final tax outcome of these matters is different from the amounts that were initially recognised, such differences will impact the income tax and deferred tax provisions in the period in which such determination is made.
2(c) New accounting standards and interpretations
a) Standards, amendments and interpretations effective in 2014:
The following new standards and amendments to standards are mandatory for the first time for the Group for the financial year beginning 1 January 2014. The implementation of these standards did not have a material effect on the Group:
IAS 32 (Amendment 2011) Offsetting financial assets and financial liabilities
IFRS 11 Joint arrangements
IFRS 10 Consolidated financial statements
IFRS 12 Disclosure of interest in other entities
IAS 27 (Amendment 2011) Separate financial statements
IAS 28 (Amendment 2011) Investments in associates and joint ventures
IAS 36 (Amendment 2013) Recoverable amount disclosures for non-financial assets
IFRIC 21 Levies
b) Standards, amendments and interpretations that are not yet effective and have not been early adopted:
Standard Impact on initial application Effective date ------------------------------------------------------- ---------------- Annual Improvements to IFRSs 2010-2012 Cycle 1 January 2015** Annual Improvements to IFRSs 2011-2013 Cycle 1 January 2015** Annual Improvements to IFRSs 2012-2014 Cycle 1 January 2016* Amendments to IAS 38 and IAS 36: Clarification of acceptable methods of depreciation and amortisation 1 January 2016* Disclosure initiative: Amendments to IAS 1 1 January 2016* IFRS 9 Financial instruments 1 January 2018* IFRS 15 Revenue from contracts with customers 1 January 2017 * Not yet endorsed in the EU. ** Effective date in EU
The Group does not expect the pronouncements to have a material impact on the Group's earnings or shareholders' funds.
3 Summary of significant accounting policies
Basis of Consolidation
Business combinations
The consolidated financial statements relate to the Company and its subsidiaries (together referred to as the "Group"). As explained in note 1 the acquisitions of Fujian Xingtai by Chaintek United and Chaintek United by the Company were a combination of businesses under common control by Mr Zhuang and Mrs Xu and were therefore accounted for in a manner similar to a pooling of interests.
Subsidiaries
Where the Company has control over an investee, it is classified as a subsidiary. The Company controls an investee if all three of the following elements are present: power over the investee, exposure to variable returns from the investee, and the ability of the investor to use its power to affect those variable returns. Control is reassessed whenever facts and circumstances indicate that there may be a change in any of these elements of control. The results of acquired operations are included in the consolidated statement of comprehensive income from the date on which control is obtained. Subsidiaries are deconsolidated from the date on which control ceases.
Transactions eliminated on consolidation
All inter-company balances and significant inter-company transactions and resulting unrealised profits or losses are eliminated on consolidation and the consolidated financial statements reflect external transactions and balances only.
Foreign currency
Foreign currency transactions
Transactions in foreign currencies are translated to the respective functional currencies of the Group entities at the exchange rate at the date of the transaction. Monetary assets and liabilities denominated in foreign currencies at the reporting date are translated to the functional currency at the exchange rate at the reporting date. Non-monetary items that are measured in terms of historical cost in a foreign currency are translated using the exchange rate at the date of the transaction.
Foreign currency differences arising on translation are recognised in profit or loss as incurred.
Property, plant and equipment and depreciation
Property, plant and equipment are stated at cost less accumulated depreciation and impairment losses, if any.
The cost of property, plant and equipment includes expenditure that is directly attributable to the acquisition of the items. Dismantlement, removal or restoration costs are included as part of the cost of property, plant and equipment if the obligation for dismantlement, removal or restoration is incurred as a consequence of acquiring or using the asset.
Depreciation is computed utilising the straight-line method to write off the cost of these assets over their estimated useful lives as follows:
Buildings 30 years Plant and machinery 10 years Computers and office equipment 2 - 10years Motor vehicles 5 - 10 years
No depreciation is provided on construction work-in-progress. Depreciation will commence when the asset is completed and ready for its intended use.
The residual values, depreciation methods and useful lives of property, plant and equipment are reviewed and adjusted as appropriate at the reporting date.
Subsequent expenditure relating to property, plant and equipment that has already been recognised is added to the carrying amount of the asset when it is probable that future economic benefits, in excess of the standard of performance of the asset before that expenditure was made, will flow to the Group and the cost can be reliably measured. Other subsequent expenditure is recognised as an expense during the financial year in which it is incurred.
For acquisitions and disposals during the financial year, depreciation is provided from the month of acquisition and to the month before disposal respectively. Fully depreciated property, plant and equipment are retained in the books of accounts until they are no longer in use.
The gain or loss arising on disposal or retirement of an item of plant and equipment is determined as the difference between the sales proceeds and the carrying amounts of the asset and is recognised in profit or loss.
Land use rights
The land use rights are stated at cost less accumulated amortisation and any impairment losses. Amortisation is calculated on a straight-line basis to write off the cost of the land use rights over the period for which the rights have been granted.
Financial assets
The Group's financial assets include loans and receivables.
The Group initially recognises loans and receivables and deposits on the date they are originated.
Derecognition of financial instruments occurs when the rights to receive cash flows from the investments expire or are transferred and substantially all of the risks and rewards of ownership have been transferred. An assessment for impairment is undertaken at least at each reporting date whether or not there is objective evidence that a financial asset or a groupof financial assets is impaired.
Receivables
Receivables are non-derivative financial assets with fixed or determinable payments that are not quoted in an active market. They arise when the Group provides money, goods or services directly to a debtor with no intention of trading the receivables. They are included in current assets, except for maturities greater than 12 months after the reporting date which are classified as non-current assets.
Receivables are recognised initially at fair value plus any directly attributable transaction costs. Subsequent to initial recognition, loans and receivables are measured at amortised cost using the effective interest method, less provision for impairment.
The Group considers evidence of impairment for receivables at both a specific asset and collective level. All individually significant receivables are assessed for specific impairment. All individually significant receivables found not to be specifically impaired are then collectively assessed for any impairment that has been incurred but not yet identified. Receivables that are not individually significant are collectively assessed for impairment by grouping together receivables with similar risk characteristics.
In assessing collective impairment, the Group uses historical trends of the probability of default, the timing of recoveries and the amount of loss incurred, adjusted for management's judgement as to whether current economic and credit conditions are such that the actual losses are likely to be greater or less than suggested by historical trends.
An impairment loss in respect of a financial asset measured at amortised cost is calculated as the difference between its carrying amount and the present value of the estimated future cash flows, discounted at the asset's original effective interest rate. Losses are recognised in profit or loss and reflected in an allowance account against loans and receivables. Interest on the impaired asset continues to be recognised. When a subsequent event (e.g. repayment by a debtor) causes the amount of impairment loss to decrease, the decrease in impairment loss is reversed through profit or loss.
Receivables comprise trade receivables, other receivables, deposits and prepayments, other than land use right prepayments.
Cash and cash equivalents
Cash and cash equivalents include cash and bank balancesthat have maturities of three months or less from inception.
Impairment of non-financial assets
The carrying amounts of non-financial assets subject to impairment are reviewed at the end of each reporting period to determine whether there is any indication of impairment. If any such indication exists, the asset's recoverable amount is estimated.
Dividends
Final dividends proposed by the Directors are not accounted for in Shareholders' equity as an appropriation of retained earnings, until they have been approved by the Shareholders in a general meeting. When these dividends have been approved by the Shareholders and declared, they are recognised as a liability.
Interim dividends are simultaneously proposed and declared, because the Articles of Association of the Company grant the Directors the authority to declare interim dividends. However, interim dividends are not charged to reserves until the relevant date of payment to shareholders.
Where the Company pays its dividends in the form of shares or gives the shareholder the right to receive a dividend in either cash or shares (scrip dividend) the dividend paid is calculated as the value of the cash paid and the value of shares issued with the value of shares issued being calculated at the market value of shares at the date of payment of the dividend.
Statutory common reserve
The subsidiary incorporated in the PRC is required to transfer between 5% and 10% of its profit after taxation to the statutory common reserve until the common reserve balance reaches 50% of the registered capital. For the purpose of calculating the transfer to this reserve, the profit after taxation shall be the amount determined under the PRC accounting standards. The transfer to this reserve must be made before the distribution of dividends to Shareholders. The statutory common reserve can only be used to set off against accumulated losses or to increase the registered capital of the subsidiary, subject to approval from the PRC authorities.
The statutory common reserve is not available for dividend appropriation to the Shareholders.
Share capital
Ordinary Shares are classified as equity.
Incremental costs directly attributable to the issue of Ordinary Shares and share options are recognised as a deduction from equity.
Warrants
The fair value of Warrants issued to vendors and Shareholders is measured using the Black-Scholes option pricing model. Measurement inputs include the share price on the measurement date, the exercise price of the instrument, expected volatility, expected term of the instrument, expected dividend, and the risk-free interest rate.
Financial liabilities
The Group's financial liabilities include trade and other payables.
Trade and other payables are initially recognised at fair value, and subsequently carried at amortised cost using the effective interest method.
Financial liabilities are recognised when the Group becomes a party to the contractual agreements of the instrument. All interest-related charges are recognised as an expense in "finance costs" in profit or loss. Financial liabilities are derecognised if the Group's obligations specified in the contract expire or are discharged or cancelled.
Gains and losses are recognised in profit or loss when the liabilities are derecognised.
Related parties
For the purposes of this consolidated historical financial information, parties are considered to be related to the Group if the Group has the ability, directly or indirectly, to control the party or exercise significant influence over the party in making financial and operating decisions, or vice versa, or where the Group and the party are subject to common control or common significant influence. Related parties may be individuals or other entities.
Leases
Leases of assets in which a significant portion of the risks and rewards of ownership are retained by the lessor are classified as operating leases.
Rentals on operating leases are recognised in profit or loss on a straight-line basis over the lease term unless another systematic basis is more representative of the time pattern in which economic benefits from the leased asset are consumed. Lease incentives received are recognised as an integral part of the total lease expense, over the term of the lease. Penalty payments on early termination, if any, are recognised in profit or loss when incurred.
The land use rights held by the Group are regarded as operating leases. The amounts paid for these rights are treated as lease prepayments and are amortised over the period for which the rights have been granted in accordance with the land use rights certificate.
Government grants
Grants that compensate the Group for expenses incurred are recognised in profit or loss as other income on a systematic basis in the same periods in which the expenses are recognised.
Employee benefits
Short-term employee benefits
Short-term benefit obligations are measured on an undiscounted basis and are expensed as the related service is provided.
Defined contribution plans
Payments made to state-managed retirement benefit schemes, such as the social security plans in the PRC, are dealt with as contributions to defined contribution plans. The contributions were recognized when the payment obligation existed.
The PRC subsidiary is required to contribute a certain percentage of its employees' payroll costs to the state-managed retirement benefit scheme operated by the municipal government.
The local municipal government undertakes to assume the retirement benefit obligations of all existing and future retired employees of the PRC subsidiary. The PRC subsidiary has no further payment obligations once the contributions have been paid.
Key management personnel
Key management personnel are those persons having the authority and responsibility for planning, directing and controlling the activities of the entity. Directors and certain key executive officers are considered key management personnel.
Income taxes
Income tax expense comprises current and deferred tax. Income tax expense is recognised in the income statement except to the extent that it relates to items recognised directly in equity, in which case it is recognised in equity or other comprehensive income.
Current tax is the expected tax payable on the taxable income for the year, using tax rates enacted or substantively enacted at the reporting date, and any adjustment to tax payable in respect of previous years.
Deferred tax is recognised in respect of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for taxation purposes. Deferred tax is not recognised for the following temporary differences: the initial recognition of goodwill, the initial recognition of an asset or liability in a transaction that is not a business combination and that affects neither accounting nor taxable profit, and differences relating to investments in subsidiaries to the extent that the timing of the reversal of the temporary difference can be controlled and it is probable that the temporary difference will not reverse in the foreseeable future.
Deferred tax is measured at the tax rates that are expected to be applied to the temporary differences when they reverse, based on the laws that have been enacted or substantively enacted at the reporting date.
A deferred tax asset is recognised for unused tax losses, tax credits and deductible temporary differences, to the extent that it is probable that future taxable profits will be available against which they can be utilised. Deferred tax assets are reviewed at each reporting date and are reduced to the extent that it is no longer probable that the related tax benefit will be realised.
Deferred tax assets and liabilities are offset if there is a legally enforceable right to offset current tax liabilities and assets and they relate to income taxes levied by the same tax authorities on the same taxable entity, or on different tax entities, provided they intend to settle current tax liabilities and assets on a net basis or their tax assets and liabilities will be realised simultaneously.
Earnings per share
The Group presents basic and diluted earnings per share ("EPS") data for its Ordinary Shares. Basic EPS is calculated by dividing the profit or loss attributable to Ordinary Shareholders of the Company by the weighted average number of Ordinary Shares outstanding during the period. Diluted EPS is determined by adjusting the profit or loss attributable to Ordinary Shareholders and the weighted average number of Ordinary Shares outstanding, adjusted for the effects of all dilutive potential Ordinary Shares, which comprise Warrants.
Operating segments
An operating segment is a component of the Group that engages in business activities from which it may earn revenues and incur expenses, including revenues and expenses that relate to transactions with any of the Group's other components. Operating segments are reported in a manner consistent with the internal reporting provided to the chief operating decision-maker. The chief operating decision-maker has been identified as the Chief Executive Officer who makes strategic resources allocation decisions.
Revenue recognition
The Group derives its revenues from two principal sources: 1) logistics services; and 2) inventory solutions.
Logistics services
Logistics services involving land transportation are provided with the use of independent transportation contractors (carriers). The Group bills the carrier its logistics arrangement fee after the goods have been delivered by the carrier but recognises revenue at the date that the logistics arrangement has been completed which is regarded as the date the goods are transferred to the responsibility of the carrier. The carrier bills the receiver directly andbears the risk of loss of the goods during transit to the receiver.
Inventory solutions
Inventory solutions relate to the provision of inventory storage and custody, goods receipts and issues, packaging, changing product labels and related services. The customer is billed a fixed fee per unit of goods managed by the Group for all of these services. The Group bills the customer directly for these services as the goods are delivered to the Group but only recognises revenue over the period that the service is provided.
Interest income
Interest income is recognised on a time proportion basis using the effective interest method.
4 Subsidiaries
Country
of
incorporation
Name of subsidiary and operations Percentage of equity Principal activities
held
31 December 31 December
2014 2013
Held by Company
Chaintek United Holdings
Ltd Hong Kong 100% 100% Investment holding
Held by Chaintek
United
Holdings Ltd
Fujian Xingtai Logistics Provision of
Co., PRC 100% 100% logistics
Ltd. services and
inventory solutions
5 Land use rights prepayments
31 December 31 December
2014 2013
RMB RMB
Cost
At 1 January 306,495,525 33,495,525
Additions 60,000,000 273,000,000
-------------------------------- ------------ ------------
At 31 December 366,495,525 306,495,525
Accumulated amortisation
At 1 January 3,389,406 2,719,495
Amortisation for the year 669,911 669,911
-------------------------------- ------------ ------------
At 31 December 4,059,317 3,389,406
================================ ============ ============
Carrying amount at 31 December 362,436,208 303,106,119
================================ ============ ============
Presented as:
Current assets 2,098,482 669,911
Non-current assets 360,337,726 302,436,208
-------------------------------- ------------ ------------
362,436,208 303,106,119
================================ ============ ============
During the year, the Group purchased a transit warehouse for the logistics services division from a third party. The warehouse will cost RMB 75.8 million of which RMB 60 million has already been paid to secure the facility. Based on the agreement, the Group had the right to commence the operations on this warehouse from the date the deposit was paid (before the year-end). The outstanding balance of RMB 15.8 million will be paid once the land use rights ("LUR") confirmation and other administrative procedures have been completed (Note 19).
The Company requested an independent market valuation for the newly acquired premises to analyse the total cost of RMB75.8 million between land use rights and property and this valuation shows that the LUR element within total cost paid is in excess of the RMB60 million value shown above. For these accounts the directors have therefore allocated all of the RMB 60 million deposit to land use rights and the final analysis between land use rights and property will be completed in next year's accounts when the residual payment is made. As the warehouse was not in operational use until just before the year end no amortisation has been charged on the allocated land use rights and in the event that some element of the deposit had been allocated to property no depreciation would have been charged on the property and therefore the current method of allocation has no impact on recorded net assets or results.
Included in the above figures is Land Use Rights ("LUR") at a cost and net book value of RMB 273 million which cost was fully paid during 2013 for a parcel of land in Cizao Town, Jinjiang City, Fujian Province, China. The payments were made to Fujian Jinjiang Industrial Park Development and Construction Co., Ltd. ("LDC"), a land development company established and owned by Local Government ("LDC"). The formal LUR Certificate that is required before the Group is able to use the land has still to be issued. Consequent to the delay in the issue of the formal LUR Certificate, the Group has signed a supplementary agreement with the LDC dated 6 March 2015. This agreement confirms, inter alia, that the LUR in respect of the parcel of land specified in the initial purchase agreement is not now able to be obtained from the LDC, that the LDC is seeking to locate an acceptable alternate parcel of land for the Group and that the Group has the right to request full payment of RMB 273 million from the LDC at any time up to the date that a formal LUR Certificate is issued by the LDC. The Board is of the view that the LDC will have the funds available to make such repayment if requested. The Board is unable to say when the formal LUR Certification process will be completed.
6 Property, plant and equipment
Computers
Plant and and office Motor
Buildings machinery equipment vehicles Total
----------- ---------- ----------- ------------ ------------
RMB RMB RMB RMB RMB
Cost
At 1 January 2013 73,356,423 1,465,900 6,536,385 5,871,437 87,230,145
Additions 1,795,799 356,606 6,500,000 1,782,843 10,435,248
Disposals - - - (1,355,000) (1,410,000)
-------------------------- ----------- ---------- ----------- ------------ ------------
At 31 December 2013 75,152,222 1,767,506 13,036,385 6,299,280 96,255,393
Additions 936,522 477,734 - 456,356 1,870,612
Disposals - - - (498,815) (498,815)
-------------------------- ----------- ---------- ----------- ------------ ------------
At 31 December 2014 76,088,744 2,245,240 13,036,385 6,256,821 97,627,190
========================== =========== ========== =========== ============ ============
Accumulated depreciation
At 1 January 2013 4,902,864 481,480 2,436,640 3,615,434 11,436,418
Depreciation charge for
the year 3,580,153 261,156 588,663 1,355,888 5,785,860
Disposals - (49,041) - (1,324,934) (1,373,975)
-------------------------- ----------- ---------- ----------- ------------ ------------
At 31 December 2013 8,483,017 693,595 3,025,303 3,646,388 15,848,303
Depreciation charge for
the year 3,613,795 267,802 842,046 1,479,717 6,203,360
Disposals - - - (390,092) (390,092)
-------------------------- ----------- ---------- ----------- ------------ ------------
At 31 December 2014 12,096,812 961,397 3,867,349 4,736,013 21,661,571
========================== =========== ========== =========== ============ ============
Net book value
At 31 December 2013 66,669,205 1,073,911 10,011,082 2,652,892 80,407,090
========================== =========== ========== =========== ============ ============
At 31 December 2014 63,991,932 1,283,843 9,169,036 1,520,808 75,965,619
========================== =========== ========== =========== ============ ============
Please also refer to Note 5 above in respect of the transit warehouse purchased during the year.
7 Trade and other receivables
31 December 31 December
2014 2013
RMB RMB
Trade receivables 85,359,797 86,394,975
Rental deposits* 9,281,006 9,009,030
Insurance prepayments 457,968 465,466
Prepayment of interim dividend to
share registrar
(Note 23) - 1,318,581
9,738,974 10,793,077
Total 95,098,771 97,188,052
=================================== ============ ============
The Group allows an average credit period of 90 days to its trade customers.
Trade and other receivables are denominated in RMB,except prepayment of the interim dividend to the share registrar which is denominated in GBP.
Rental deposits relate to refundable security deposits placed with lessors for operating leases of warehousing facilities and fall due for repayment within 12 months.
8 Cash and cash equivalents
31 December 31 December
2014 2013
RMB RMB
Cash and bank balances 472,166,608 319,283,433
======================== ============ ============
As at 31 December 2013 and 2014, bank balances of approximately RMB 319,214,000 and RMB 472,122,000 are interest earning. The weighted average effective interest rate of these interest-earning bank balances as at 31 December 2013 and 2014 was 0.38% and 0.35% per annum, respectively. In both periods the bank balances were available on demand.
Cash and bank balances are denominated in the following currencies:
31 December 31 December
2014 2013
RMB RMB
Chinese Renminbi 468,141,375 258,479,068
British Pound 3,990,077 60,768,983
United States Dollar 16,082 16,169
Singapore Dollar 1,178 1,478
Hong Kong Dollar 17,896 17,735
---------------------- ------------ ------------
472,166,608 319,283,433
====================== ============ ============
9 Share capital
31 December 31 December
2014 2013
No. of Ordinary No. of Ordinary
Shares Shares
Authorised:
Balance at beginning and end of year
* Ordinary Shares of US$0.001 each 200,000,000 200,000,000
========================================= ================ ================
Issued and fully paid:
Balance at beginning of year 54,696,875 54,696,875
Issue of shares pursuant to scrip
dividends paid to shareholders (Note
23) 4,028,730 -
----------------------------------------- ---------------- ----------------
Balance at end of year 58,725,605 54,696,875
========================================= ================ ================
RMB RMB
Value in RMB
Authorised:
Balance at beginning and end of year 1,272,067 1,272,067
========================================= ================ ================
31 December 31 December
2014 2013
RMB RMB
Issued and fully paid:
Balance at beginning of year 357,254 357,254
Issue of shares pursuant to scrip
dividends paid to shareholders (Note
23) 24,995 -
--------------------------------------- ------------ ------------
Balance at end of year 382,249 357,254
======================================= ============ ============
In August 2012, the Company issued 4,696,875 shares at GBP1.60 per share pursuant to its initial public offer of shares on the AIM market of the London Stock Exchange which raised GBP7,515,000 (equivalent to RMB 75,075,459).
In connection with the IPO, the Company issued 586,913 free Warrants to certain vendors for their services rendered and 1,098,437 free Warrants attached to 2,196,875 Ordinary Shares issued to three new Shareholders. Each Warrant carries the right to subscribe for one new Ordinary Share in the capital of the Company at an exercise price of GBP1.60. The IPO proceeds of RMB 75,075,459 were allocated to Ordinary Shares and Warrants issued to Shareholders using the fair value of the two instruments on a pro-rata basis on the IPO date. As a result, RMB 66,868,186 was recorded within share capital and share premium and RMB 8,207,273 in the Warrant reserve (Note 13).
The holders of Ordinary Shares are entitled to receive dividends as declared from time to time and are entitled to one vote per share at meetings of the Company. All shares rank equally with regard to the Company's residual assets.
10 Merger reserve
The merger reserve represented the excess of the purchase consideration for the acquisition of the subsidiaries under common control in the Restructuring Exercise described in Note 2(a) over the combined paid-up registered capital of those subsidiaries.
11 Statutory common reserve
31 December 31 December
2014 2013
RMB RMB
Statutory common reserve
- Balance at beginning and end of
year 5,000,000 5,000,000
============ ============
According to PRC Company Law, Fujian Xingtai is required to transfer between 5% and 10% of its profit after taxation to the statutory common reserve until the statutory common reserve balance reaches 50% of its registered capital. The amount of net profit after taxation transferred to the statutory common reserve reached 50% of the registered capital during the year ended 31 December 2009.
12 Other reserves
(i) Capital reserve
31 December 31 December
2014 2013
RMB RMB
Advance from a Shareholder waived* 9,813,688 9,813,688
Amounts owing to Shareholders waived** 8,215 8,215
9,821,903 9,821,903
======================================== ============ ============
*At 31 December 2012, the advance from a Shareholder related to an advance from Mrs Xu to provide working capital for Chaintek United. The advance from a Shareholder was unsecured, interest-free and repayable in cash on demand. Pursuant to an agreement entered into with Mrs Xu, the Shareholder waived a portion of the advance amounting to RMB 9,813,688 during the financial year ended 31 December 2012. The advance amount waived was considered as a capital contribution from the Shareholder and recognised directly in equity under capital reserve. The remaining amount of RMB 6,975,275 has been fully repaid in 2013.
**On 27 June 2011, in connection with the restructuring exercise described in Note 2(a), the Company acquired 100% of the equity interest of Chaintek United for a purchase consideration of HK$10,000 (RMB 8,215) based on the nominal issued share capital of Chaintek United. The purchase consideration was outstanding at 31 December 2011. During the financial year ended 31 December 2012, the former Shareholders of Chaintek United, Mr Zhuang and Mrs Xu, waived the amount which was unsecured and interest free. Mr Zhuang and Mrs Xu are Shareholders of the Company after the restructuring exercise. The amount waived was considered as capital contributions from the Shareholders and recognised directly in equity under capital reserve.
(ii) Share premium
31 December 31 December
2014 2013
RMB RMB
Issue of shares at a premium to
par value:
Balance at beginning of year 66,838,371 66,838,371
Scrip dividends paid to the shareholder 38,453,529 -
(Note 23)
------------ ------------
105,291,900 66,838,371
============ ============
13 Warrant reserve
The Warrant reserve comprises the cumulative value of the portion of IPO proceeds ascribed to the attached Warrants, as described in share capital above. When a Warrant is exercised, the related balance in the Warrant reserve will be transferred to share capital. A number of warrants were granted to certain service providers as part of the listing process in 2012. The Directors consider that these warrants primarily related to services in support of the listing process rather than in supporting the main fund raising process and therefore have recorded the costs as a share based payment expense of RMB 4,977,160 for the year ended 31 December 2012.
Each Warrant carries the right to subscribe for one new Ordinary Share in the capital of the Company at an exercise price of GBP1.60.
The 1,500 Warrants issued to the vendors are exercisable at any time for a period of three years from 20 August 2012. The fair value of the Warrants was determined using the Black-Scholes option pricing formula with the following assumptions: volatility of 55.71%; risk free interest rate of 0.23%; and expected life of three years.
The 1,683,850 Warrants issued to the Shareholders and vendors are exercisable at any time for a period of five years from 20 August 2012. The share price at date of grant was 160p per share. The fair value of the Warrants was determined using the Black-Scholes option pricing formula with the following assumptions: volatility of 62.80%; risk free interest rate of 0.62%; and expected life of five years.
14 Trade and other payables
31 December 31 December
2014 2013
RMB RMB
Other payables
Deposits from transportation agents 4,000,000 4,000,000
Accrued payroll costs 3,469,673 3,029,986
Accrued professional fees 700,000 700,000
Accrued social insurance 948,074 931,552
Other tax payables 2,216,251 2,715,454
Others 143,143 356,093
------------------------------------- ------------ ------------
11,477,171 11,733,085
===================================== ============ ============
15 Revenue
Year ended Year ended
31 December 31 December
2014 2013
RMB RMB
Logistics services 313,277,490 303,685,617
Inventory solutions 50,388,490 46,939,921
--------------------- ------------- -------------
363,665,980 350,625,538
===================== ============= =============
16 Other income
Year ended Year ended
31 December 31 December
2014 2013
RMB RMB
Interest income 1,333,460 886,954
Gain on disposal of property, plant
and equipment - 68,975
1,333,460 955,929
===================================== ============= =============
17 Profit before taxation
(a) The following items have been included in arriving at profit before taxation:
Year ended Year ended
31 December 31 December
2014 2013
RMB RMB
Amortisation of land use rights 669,911 669,911
Loss (Gain) on disposal of property,
plant and equipment 84,223 (68,975)
Depreciation of property, plant and
equipment 6,203,360 5,785,860
Operating lease expense 6,951,731 7,008,002
Exchange loss (gain) 2,720,980 662,004
Staff costs
Key management personnel:
- Directors
------------- -------------
- Directors' remuneration 2,729,985 2,064,080
- Contributions to defined contribution
plans 2,772 2,750
- Other than Directors
- Salaries, wages and other related
costs 1,449,500 1,224,500
- Contributions to defined contribution
plans 7,410 7,355
Other than key management personnel:
- Salaries, wages and other related
costs 24,180,992 19,933,753
- Contributions to defined contribution
plans 2,958,763 2,538,777
------------- -------------
31,329,422 25,771,215
------------- -------------
Key management personnel include: Xu LiangYi, Group Chief Operating Officer, who is a brother of Mrs Xu. Key management personnel compensation for Chief Operating Officer is as follows:
Included in:
Year ended Year ended
31 December 31 December
2014 2013
RMB RMB
Salaries, wages and other related
costs 480,000 324,000
Contributions to defined contribution
plans 1,866 1,855
------------------------- ------------------------
481,866 325,855
------------------------- ------------------------
(b) Amortisation of land use rights, depreciation of property, plant and equipment, operating lease expense and staff costs included in cost of sales, distribution expenses and administrative expenses are as follows:
Included in:
Cost of Administrative
sales expenses Total
RMB RMB RMB
Year ended 31 December 2014
Amortisation of land use rights 588,617 81,294 669,911
Depreciation of property, plant
and equipment 4,619,017 1,584,343 6,203,360
Operating lease expense 6,951,731 - 6,951,731
Staff costs
Key management personnel:
- Directors
------------------ ----------------------- -----------------
- Directors' remuneration - 2,729,985 2,729,985
- Contributions to defined contribution
plans - 2,772 2,772
* Other than Directors
- Salaries, wages and other
related costs - 1,449,500 1,449,500
- Contributions to defined contribution
plans - 7,410 7,410
------------------ ----------------------- -----------------
Subtotal - 4,189,667 4,189,667
Other than key management personnel:
- Salaries, wages and other
related costs 20,520,354 3,660,638 24,180,992
- Contributions to defined contribution
plans 2,632,298 326,465 2,958,763
------------------ ----------------------- -----------------
23,152,652 8,176,770 31,329,422
------------------ ----------------------- -----------------
Included in:
Cost of Administrative
sales expenses Total
RMB RMB RMB
Year ended 31 December 2013
Amortisation of land use rights 588,617 81,294 669,911
Depreciation of property, plant
and equipment 4,353,612 1,432,248 5,785,860
Operating lease expense 7,008,002 - 7,008,002
Staff costs
Key management personnel:
* Directors
----------- --------------- -----------
- Directors' remuneration - 2,064,080 2,064,080
- Contributions to defined contribution
plans - 2,750 2,750
* Other than Directors
- Salaries, wages and other
related costs - 1,224,500 1,224,500
- Contributions to defined contribution
plans - 7,355 7,355
----------- --------------- -----------
Subtotal - 3,298,685 3,298,685
Other than key management personnel:
- Salaries, wages and other
related costs 18,328,450 1,605,303 19,933,753
- Contributions to defined contribution
plans 2,255,558 283,219 2,538,777
----------- --------------- -----------
20,584,008 5,187,207 25,771,215
----------- --------------- -----------
18 Income tax expense
Year ended Year ended
31 December 31 December
2014 2013
RMB RMB
Current taxation 73,299,898 72,518,637
====================================== ============= =============
Reconciliation of effective tax rate
Profit before taxation 287,374,847 284,907,893
====================================== ============= =============
Tax at the PRC statutory rate of
25% (2013: 25%) 71,843,712 71,226,973
Non-deductible expenses 135,427 -
Deferred tax assets on losses not
recognised 1,320,759 1,291,664
-------------------------------------- ------------- -------------
73,299,898 72,518,637
====================================== ============= =============
No deferred tax asset or liability is recognised, principally as a result of the Group's taxable profit equating to its accounting profit, and there being no differences between the tax basis of assets and liabilities and the carrying values in the statement of financial position.
At the reporting date, the Group has unabsorbed tax losses of approximately RMB 19,233,000 (2013: RMB 13,950,000) attributable to a subsidiary. The Group has not recognised a deferred tax asset in respect of the tax losses because the companies have not generated and are not expected to generate taxable profits that would absorb these losses.
19 Commitments
Capital commitment
At the reporting date, the Group was committed to making the following capital commitment in respect of property, plant and equipment.
31 December 31 December
2014 2013
RMB RMB
Capital expenditure contracted but not
provided for
in the financial statements:
- Acquisition of a logistics warehouse 15,800,000- -
(Note 5 and 6)
========================================== ============ ============
Operating lease commitments
At the reporting date, the Group was committed to making the following rental payments in respect of operating leases of warehouses.
Year ended Year ended
31 December 31 December
2014 2013
RMB RMB
Not later than one year 5,050,813 4,942,268
Later than one year and not later - -
than five years
Later than five years - -
----------------------------------- ------------- -------------
5,050,813 4,942,268
=================================== ============= =============
These leases expire between September 2015 and December 2015, with renewal options at prevailing market rents.
20 Significant related party transactions
Other than as disclosed in the Directors' Report (Directors' Remuneration) and in Note 17, there were no transactions with related parties during the financial years ended 31 December 2013 and 2014.
21 Operating segments
For management reporting purposes, the Group is organised into the following reportable operating segments:
(a) Logistics services - includes the provision of land transportation services. (b) Inventory solutions - includes the provision of warehousing services.
(c) Corporate - includes investment holdings and Corporate Office which incurs general corporate expenses.
Segment accounting policies are the same as the policies described in Note 3. Intra and inter-segment transactions were carried out at terms agreed between the parties during the financial year. Intra and inter-segment transactions were eliminated in preparing the consolidated financial statements.
Segment revenue and expense:
Segment revenues and expenses are the operating revenues and expenses reported in the Group's statement of comprehensive income that are directly attributable to a segment and the relevant portion of such revenue and expense that can be allocated on a reasonable basis to a segment.
Segment assets and liabilities:
Segment assets and liabilities include items directly attributable to a segment as well as those that can be allocated on a reasonable basis. Capital expenditure includes the total cost incurred to acquire plant and equipment directly attributable to the segment.
Group cash resources, financing activities and income taxes are managed on a Group basis and are not allocated to operating segments. Unallocated assets comprise cash and cash equivalents. Unallocated liabilities comprise income tax payable.
The Group Chief Executive Officer ("Group CEO") monitors the operating results of its operating segments for the purpose of making decisions about resource allocation and performance assessment.
Information regarding the results of each reportable segment is included below. Performance is measured based on segment profit before income tax, as included in the internal management reports that are reviewed by the Group CEO.
Logistics Inventory solutions Consolidated
services
Year Year Year Year Year Year
ended ended ended ended ended ended
31 31 31 31 31 31
December December December December December December
2014 2013 2014 2013 2014 2013
RMB'000 RMB'000 RMB'000 RMB'000 RMB'000 RMB'000
Sales to external
customers 313,278 303,686 50,388 46,940 363,666 350,626
------------- ---------------- ------------- --------------- ---------- ----------
Segment revenue 313,278 303,686 50,388 46,940 363,666 350,626
Segment results 286,427 284,387 26,624 22,483 313,051 306,870
Reconciling items (25,676) (21,962)
Profit before
taxation 287,375 284,908
Income tax expense (73,300) (72,519)
---------- ----------
Profit for the year 214,075 212,389
---------- ----------
Assets and
liabilities:
Segment assets 149,889 91,538 367,910 369,294 517,799 460,832
Unallocated assets
(cash and cash
equivalents) 472,167 319,283
Reconciling items 15,701 19,870
Total assets 1,005,667 799,985
---------- ----------
Segment liabilities 5,473 8,629 1,537 1,794 7,010 10,423
Unallocated
liabilities
(income tax payable) 13,313 15,070
Reconciling items 4,467 1,310
---------- ----------
Total liabilities 24,790 26,803
---------- ----------
Other segment
information:
Non-current assets 72,724 14,631 346,205 349,696 418,929 364,327
Reconciling items 17,374 18,516
---------- ----------
436,303 382,843
Acquisition of land
use right 60,000 - - 221,000 60,000 221,000
Acquisition of
property,
plant and equipment 589 258 930 8,314 1,519 8,572
Reconciling items 352 1,863
---------- ----------
1,871 10,435
Depreciation 525 566 4,094 3,787 4,619 4,353
Reconciling items 1,584 1,433
---------- ----------
6,203 5,786
Amortization of
land use rights
prepayments 140 140 449 449 589 589
Reconciling items 81 81
---------- ----------
670 670
====================== ============= ================ ============= =============== ========== =========
Reconciling items shown above include: administrative expenses and other income in profit for the year, rental deposits and partial fixed assets in total assets, and other tax payable and partial employee benefits payable in total liabilities.
Geographical information
The Group's operations are located in the PRC and all of the Group's revenue is derived from services provided to customers in the PRC. Hence, no analysis by geographical area of operations is provided.
Major customers
None of the manufacturing companies (that the Company regards as its customers) for its logistics services business accounted for 10% or more of the Group's total revenues for the years ended 31 December 2013 and 2014. However, the Company receives all its logistics services revenue from the transport companies that are used to transport goods on behalf of the Company rather than from its manufacturing customers. Whilst the Company has flexibility in its choice of transport company it is noted that five of these transport companies account individually for more than 10% of total revenue in both the current and prior year. None of the manufacturing companies that use the inventory solutions service accounted for 10% or more of the Group's total revenues for the years ended 31 December 2013 and 2014.
22 Earnings per share
Year ended Year ended
31 December 31 December
2014 2013
Net profit after taxation (RMB) 214,074,949 212,389,256
======================================== ============= =============
Weighted average number of Ordinary
Shares used in calculation of basic
earnings per share 56,526,046 54,696,875
Effect of dilutive potential Ordinary
Shares from weighted average number
of Warrants 1,683,850 1,683,850
---------------------------------------- ------------- -------------
Weighted average number of Ordinary
Shares used in calculation of diluted
earnings per share 58,209,896 56,380,725
======================================== ============= =============
Earnings per share -
Basic (RMB) 3.79 3.88
Diluted (RMB) 3.68 3.77
======================================== ============= =============
23 Dividends
(i) On 13 November 2013, the Group announced an interim maiden dividend of 2 pence net per share, in respect of the six month period ended 30 June 2013, paid on 3 January 2014 to shareholders on the register on 13 December 2013, offered as a scrip dividend with a cash alternative. Inconsequence, a total cash dividend payment of GBP 131,412 (approximately RMB 1,318,581) was made on 3 January 2014 to shareholders so electing, and a total of 681,675 new ordinary shares was issued on 3 January 2014 in respect of the scrip dividend.
(ii) On 7 April 2014, the Group announced a final dividend of 4 pence net per share, in respect of the year ended 31 December 2013, paid on 9 June 2014 to shareholders, offered as a scrip dividend with a cash alternative. Inconsequence, a total cash dividend payment of GBP 440,159 (approximately RMB 4,258,092) was made on 9 June 2014 to shareholders so electing, and a total of 1,674,441 new ordinary shares was issued on 9 June 2014 in respect of the scrip dividend.
(iii) On 22 September 2014, the Group announced an interim scrip dividend of 2 pence net per share or 1 pence cash alternative, in respect of the six month period ended 30 June 2014, paid on 17 November 2014 to shareholders. Inconsequence, a total cash dividend payment of GBP 82,996 (approximately RMB 802,903) was made on 17 November 2014 to shareholders so electing, and a total of 1,672,543 new ordinary shares was issued on 17 November 2014 in respect of the scrip dividend.
24 Financial risk management
Financial risk management objectives and policies
The Board of Directors has overall responsibility for the establishment and oversight of the Group's risk management framework. The Group's risk management policies are established to set out its overall business strategies, tolerance of risk and general risk management philosophy. Risk management policies and systems are reviewed regularly to reflect changes in market conditions and the Group's activities.
(a) Market risk
Interest rate risk
Interest rate risk is the risk that the fair value or future cash flows of the Group's financial instruments will fluctuate because of changes in market interest rates.
The Group is exposed to interest rate risk, in respect of interest-bearing cash balances at variable rates, which is not material.
Sensitivity analysis - Interest rate risk
A 30 basis points increase/decrease in interest rates on interest-bearing cash balances at the reporting date would increase/decrease profit before tax and equity by approximately RMB 958,000 and RMB 1,416,000 for the financial years ended 31 December 2013 and 2014, respectively. This analysis has not taken into account the associated tax effects and assumes that all other variables, in particular foreign currency rates, remain constant.
Foreign currency risk
The Group carries on its business operations in the PRC through Fujian Xingtai with sales and purchases, capital expenditure and operating expenses denominated in RMB, which is the currency of all Group entities.
At 31 December 2013 and 2014, the Group is exposed to foreign currency risk in respect of transactions, primarily proceeds from the initial public offer of shares and professional fees that are denominated in a currency other than RMB. The currencies in which these transactions primarily are denominated are the United States Dollar (USD) and British Pound (GBP). Transactions denominated in Singapore Dollar (SGD) and Hong Kong Dollar (HKD) is immaterial to the Group. The Group does not hold or issue derivative financial instruments to hedge against fluctuations in foreign exchange.
Sensitivity analysis for foreign currency risk
A 5% strengthening/weakening of the above currencies against RMB at the reporting date would have increased/decreased equity and profit before tax by the amounts shown below. This analysis is based on foreign currency exchange rate variances that the Group considered to be reasonably possible at the end of the reporting period. This analysis has not taken into account the associated tax effects and assumes that all other variables, in particular interest rates, remain constant.
Profit before tax Equity
increase/(decrease) increase/(decrease)
RMB RMB
31 December 2014
USD against RMB
- strengthened (804) (804)
- weakened 804 804
GBP against RMB
- strengthened (199,504) (199,504)
- weakened 199,504 199,504
31 December 2013
USD against RMB
- strengthened (808) (808)
- weakened 808 808
GBP against RMB
- strengthened (3,104,378) (3,104,378)
- weakened 3,104,378) 3,104,378
================== ==================== ====================
Market price risk
Market price risk is the risk that the value of a financial instrument will fluctuate due to changes in market prices.
The Group is not exposed to any movement inmarket price risk as it does not hold any quoted or marketable financial instruments.
(b) Credit risk
Credit risk refers to the risk that counterparties may default on their contractual obligations resulting in financial loss to the Group. The Group's exposure to credit risk arises primarily from trade and other receivables.
The Group's objective is to seek continual growth while minimising losses arising from credit risk exposure. For trade receivables, the Group adopts the policy of dealing only with customers of appropriate credit history, and obtaining sufficient security where appropriate to mitigate credit risk. The Group closely monitors and avoids any significant concentration of credit risk. In addition, receivable balances and payment profile of the debtors are monitored on an ongoing basis with the result that the Group's exposure to bad debts is not significant. For other financial assets, the Group adopts the policy of dealing only with high credit quality counterparties.
The Group establishes an allowance for impairment that represents its estimate of incurred losses in respect of trade and other receivables. The allowance account in respect of trade and other receivables is used to record impairment losses unless the Group is satisfied that no recovery of the amount owing is possible. When the asset becomes uncollectible, it is written off against the allowance account.
The maximum exposure to credit risk at the reporting date is the carrying value of each class of financial assets as follows:
31 December 31 December
2014 2013
RMB RMB
Financial assets
Financial assets measured at amortised
cost:
Trade and other receivables* 94,640,803 95,404,005
Cash and cash equivalents 472,166,608 319,283,433
---------------------------------------- ------------ ------------
566,807,411 414,687,438
======================================== ============ ============
* excluded insurance prepayments and prepayment of interim dividend to share registrar.
The aging analysis of trade receivables not impaired is as follows:
31 December 31 December
2014 2013
RMB RMB
Financial assets
Not past due 85,359,797 86,394,975
Past due one month or less - -
---------------------------- ------------ ------------
Trade receivables (Note 7) 85,359,797 86,394,975
============================ ============ ============
At the reporting date, no allowance for impairment is required in respect of trade and other receivables based on the creditworthiness of the counterparties and credit quality and past collection history of the customers.
At the reporting date, five customers accounted for approximately 73% (2013: 72%) of trade receivables. Other than this, there is no concentration of credit risk.
Cash and cash equivalents are placed with financial institutions which are regulated.
(c) Liquidity risk
Liquidity or funding risk is the risk that an enterprise will encounter difficulty in raising funds to meet commitments associated with financial instruments. Liquidity risk may result from an inability to sell a financial asset quickly at close to its fair value.
The Group's exposure to liquidity risk arises primarily from mismatches of the maturities of financial assets and liabilities. As part of its overall prudent liquidity management, the Group maintains a sufficient level of cash to meet its working capital requirement.
The table below analyses the maturity profile of the Group's financial liabilities based on contractual undiscounted cash flows.
Contractual cash flows
Carrying Less than Between Over 5
2
amount Total 1 year and 5 years
years
RMB RMB RMB RMB RMB
At 31 December 2014
Trade and other
payables 11,477,171 11,477,171 11,477,171 - -
===================== =========== =================== =================== ============== ===========
At 31 December 2013
Trade and other
payables 11,733,085 11,733,085 11,733,085 - -
===================== =========== =================== =================== ============== ===========
It is not expected that the cash flows included in the maturity analysis could occur significantly earlier, or at significantly different amounts.
(d) Financial instruments by category
31 December 31 December
2014 2013
RMB RMB
Financial assets
Financial assets measured at amortised
cost:
Trade and other receivables* 94,640,803 95,404,005
Cash and cash equivalents 472,166,608 319,283,433
---------------------------------------- ------------ ------------
566,807,411 414,687,438
======================================== ============ ============
* excludes insurance prepayments and prepayment of interim dividend to share registrar.
31 December 31 December
2014 2013
RMB RMB
Financial liabilities
Financial liabilities measured at
amortised cost 9,260,920 9,017,631
=================================== ============ ============
(e) Fair values of financial instruments
The carrying amounts of other financial assets and liabilities with a maturity of less than one year (including trade and other receivables, cash and cash equivalents, and trade and other payables) approximate their fair values because of the short period to maturity.
24 Capital management
The Group's objectives when managing capital are:
(a) To safeguard the Group's ability to continue as a going concern; (b) To support the Group's stability and growth; and
(c) To provide capital for the purpose of strengthening the Group's risk management capability.
The Group actively and regularly reviews and manages its equity capital structure to ensure optimal capital management and Shareholder returns, taking into consideration the future capital requirements of the Group and capital efficiency, prevailing and projected profitability, projected operating cash flows, projected capital expenditures and projected strategic investment opportunities.
The Group manages its equity capital structure and makes adjustments to it, whenever necessary, in the light of changes in economic conditions. No changes were made in the objectives, policies or processes during the financial years ended 31 December 2013 and 2014. The Group may consider debt financing options from time to time to bolster its capital structure.
In 2013, the Group recognised the importance of a cash dividend and had therefore decided to commence a modest dividend policy. In the future, the Board intends to declare dividends, subject to it being prudent to do so, with the financial results twice a year.
The Group monitors capital using the Gearing Ratio, which is net debt divided by total equity. Net debt represents borrowings less cash and cash equivalents.
The Company and its subsidiaries are not subject to externally imposed capital requirements.
31 December 31 December
2014 2013
RMB RMB
Total borrowings - -
Less: Cash and cash equivalents (472,166,608) (319,283,433)
---------------------------------------- -------------- --------------
Net cash (472,166,608) (319,283,433)
Total equity 980,877,064 773,181,691
---------------------------------------- -------------- --------------
Net-debt-to-total-equity ratio (times) # #
======================================== ============== ==============
# Not applicable. The Group had a net cash position.
- Ends -
This information is provided by RNS
The company news service from the London Stock Exchange
END
FR UVUBRVAAOAAR
1 Year Gx Cleantech Chart |
1 Month Gx Cleantech Chart |
It looks like you are not logged in. Click the button below to log in and keep track of your recent history.
Support: +44 (0) 203 8794 460 | support@advfn.com
By accessing the services available at ADVFN you are agreeing to be bound by ADVFN's Terms & Conditions
