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| Share Name | Share Symbol | Market | Type | Share ISIN | Share Description |
|---|---|---|---|---|---|
| Natsun | LSE:NTS | London | Ordinary Share | HK0000042116 | ORD 62.5P (DI) |
| Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
|---|---|---|---|---|---|---|---|---|---|---|
| 0.00 | 0.00% | 76.00 | 0.00 | 01:00:00 |
| Industry Sector | Turnover | Profit | EPS - Basic | PE Ratio | Market Cap |
|---|---|---|---|---|---|
| 0 | 0 | N/A | 0 |
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RNS Number : 4755E
Natsun Holdings Limited
29 September 2008
For Immediate Release 29 September 2008
NATSUN HOLDINGS LIMITED
("Natsun" or "the Company")
INTERIM RESULTS ANNOUNCEMENT
RESULTS FOR THE SIX MONTHS ENDED 30 JUNE 2008
Natsun Holdings Limited (AIM: NTS), the integrated worsted fabric and garment producer, is pleased to announce its unaudited financial
results for the six months ended 30 June 2008 ("H1 2008").
Financial Highlights
* Revenues up 181% to RMB 314.0 million (H1 2007: RMB 173.6 million*)
* Gross profit of RMB 55.5 million (H1 2007: RMB 60.6 million*)
* Gross profit margin of 17.7% (H12007: 34.9%*)
* Operating profit of RMB 20.5 million (H1 2007: RMB46.7 million*)
* Cash & cash equivalents at 30 June 2008 of RMB 81.3 million (31 December 2007: RMB 116.5 million)
* Drawdown of RMB180 million loan from Nanshan Group commenced in June 2008
* H1 2007 figures presented on a proforma basis
Operational Highlights
Fabrics
* Accounts for 70% of total revenues
* New production line established - targeting high-end market place
Garments
* 376,101 suits sold in H1 2008 (307% increase from comparable proforma period in 2007)
* Majority of exports continued from JV partner Berwin
* 3rd production line at Berwin JV completed
* Suit production line commenced for new customer, Aoyama of Japan
Natsun Own Brand
* Betenly own branded garment division launched in March
* Focus on higher price points with greater emphasis on design and style trends targeting growing and influential young professional
market in China
International
* Milan office fully operational and successfully attracting new European clients
* US subsidiary established in January to capitalise on the anticipated lifting of quota restrictions at the end of 2008
Commenting on outlook, Song Jianbo, Chairman, said:
"The reputation Natsun has both in China with local customers and internationally through our partner and distributor network is
extremely high. Equally the scalability of our business and our attention to high quality service provision and quality of designs are
creating greater awareness throughout our industry. A good illustration of this is the influx of customers being drawn to the Natsun brand
who historically had been with our competitors.
"For the remaining part of 2008 we will focus on continued productivity with no compromise on quality but with a focus on pricing which
will assist our development for the full year."
For further information please contact:
EVOLUTION SECURITIES LIMITED(Nominated adviser) Tel No: +44 (0) 20 7071 4300
Bobbie Hilliam
EVOLUTION SECURITIES CHINA LIMITED(Financial Tel No: +44 (0)20 7220 4850
adviser and broker)
Barry SaintEsther Lee
BUCHANAN COMMUNICATIONS Tel No: +44 (0)20 7466 5000
Lisa BaderoonMary-Jane Johnson
CHAIRMAN'S STATEMENT
I am pleased to report our interim results for the six months ended 30 June 2008.
As communicated to our shareholders over the last few months, trading in the first half of the year has continued to be challenging but
also full of opportunities which as a management team we are now beginning to exploit.
Trading has been impacted primarily due to continued cost pressures arising from wool costs, the increase of domestic labour costs and
the appreciation of the Renminbi (RMB) against the US dollar together with wider economic uncertainty.
However due to the scalability of our business, our carefully planned expansion programme and our attention to service provision, we are
starting to absorb much of the continued cost pressure unlike a number of our smaller competitors. To this end many of their customers are
moving to Natsun.
We continue to market our fabric brand internationally and have gained good traction in Europe and we are confident that North America
will follow post the opening of the New York office earlier this year.
Financial Review
Turnover for the first six months of the year was RMB 314.0 million, an increase of 181% (2007 H1 proforma: RMB173.6 million) with net
profits of RMB 5.2 million, a decrease of 67% compared with the proforma net profit of RMB 14.5 million for the period ended 30 June 2007.
Fabric sales increased to RMB 221.1 million for this period, from proforma revenue RMB 152.1 million in the same period of 2007. The
average selling price of fabric in 2008 increased by about 6.2% compared with the same period for the prior year. However, the gross profit
margin decreased by approximately 14% due predominantly to increased wool prices.
Garment sales increased to RMB 92.9 million from proforma revenue RMB 21.6 million in the same period of 2007 and nearly 52% of the
sales were produced for Berwin Holdings Limited ("Berwin"). Gross margin for these sales for this period was 14.1%, representing an increase
of 30.6 percentage points from the same period of 2007 (H1 2007 proforma loss of 16.5%).
The inventory level as at 30 June 2008 increased sharply to RMB310.7 million (30 June 2007 proforma: RMB152.1 million) to cater for the
increased production and sales of both garments and fabric.
The Group has drawn down RMB180.0 million from Nanshan Group in June 2008 to finance the capital expenditure requirement planned at the
point of Admission. The loan is unsecured and bears interest at a rate of 7.2% per annum and will be due for repayment starting on 16 June
2011 with three annual equal instalments.
By 30 June 2008, the total non-current loans from a related party, primarily Nanshan Group, amounted to RMB521.9 million. This increased
gearing will lead to higher interest costs, which in turn will impact the Group's profitability and cash flow.
In line with our stated policy, no interim dividend has been declared or paid in relation to this financial period.
OPERATIONAL REVIEW
Natsun's business consists of two major segments:
1. Worsted Wool Fabric Production (Fabric)
- Natsun is a leading fabric manufacturer in China with a focus on high grade materials
2. Suit Production (Garments)
- Natsun is a leading suit producer in China and has experienced strong growth in conjunction with its joint venture ("JV")
partner, Berwin. In 2008, it expanded these activities and has implemented its own branded suit production line ("Betenly") in China
Production Capacity: Overview
Fabric
Natsun produced approximately 5,292km (2007: 4,816km) and sold 5,320km (2007: 3,945km) worsted wool fabric in H1 2008. This represented
100% of our full production capacity and a 10% increase for the comparable period. In the period ended 30 June 2008, fabric revenues
amounted to RMB 221.1 million, accounting for 70% of the total group revenue. The top 10 customers contributed approximately 72.5% of the
Group's fabric revenues and continue to work on annually renewed contacts with Natsun.
In order to cope with increasing orders, the installation of a new production line commenced in May 2007. We are delighted that this
third production line for fabric is now fully operational on time and on budget. This new line will be focused on the high quality
marketplace. Our in-house Italian design technicians and experts in charge of the key steps of fabric production such as dyeing, spinning,
weaving and finishing are working diligently with our local workforce on producing fabrics which meet the highest standards.
Garments
Natsun produced approximately 398,593 suits (proforma H1 2007: 97,949 suits) and sold 376,101 suits (proforma H1 2007: 87,827 suits) in
the first half of 2008. This represented 36% of our full year production capacity and was a 307% increase in production from the comparable
period in 2007. Natsun continued to export the majority of its suits, accounting for almost 64% of total garments revenues of RMB 92.9
million for the half year period. The majority of our export orders continued to come from our JV partner Berwin.
The installation of the third line at our Berwin JV was completed in the first half of this year and the Betenly line (formerly referred
as the second Italian line) has also been completed and leased from Nanshan Group.
The Group established a new production line for Berwin JV at the beginning of 2008 to increase its annual capacity by an additional
150,000 suits. Additionally the Group has leased a further three production lines from Nanshan Group focusing on high quality suits
including its own branded suits. The Group is in ongoing discussions with existing and new customers to secure additional production orders.
One such customer, that we have now commenced production for, is Aoyama, one of the largest suit distributors in Japan, under its "Hilton"
brand.
Since we have successfully executed and completed our expansion programme both in our Fabrics and Garments divisions, we envisage no
further major expansion programmes being started in the short to medium term.
International Development
Our Italian designers, technicians and marketing staff, based in our Milan Office, are now fully integrated into Natsun's management
style and culture. Importantly, their knowledge and skill base are now creating new patterns and designs which favour the European market. A
new Polish client has recently placed orders with Natsun and has expressed a willingness to work with the Company on a long-term basis for
both fabric and garment production.
On plan, our US subsidiary was established in New York and opened in January 2008. This is expected to enable us to capitalise on the
anticipated lifting of the quota restrictions on China's textiles and clothing exports to the US from the end of 2008. Similarly the US
office will facilitate the expansion of our sales network across the North American market and enhance our credibility amongst our client
base. Being in the heart of one of the fashion capitals, we can more closely monitor the latest fashion changes and develop designs which
can compete with the best designers with the added impetus on attracting and recruiting local designers into Natsun. We are delighted with
the initial responses from prospective clients and envisage firm orders to be placed by the end of this year or early in 2009.
Natsun Own Brand
Betenly, our own branded garment division targeted for the upper-middle market in China was launched on plan, in March 2008. Leading
designers and patternmakers were recruited to modify the overall image of our suits, with greater emphasis on style and design and a focus
on providing a higher price point targeted at the growing and influential young professional market in China. To accelerate traction in our
domestic market we established in August 2008 our wholly-owned subsidiary, Beijing Betenly Fashion Co., Ltd ("Beijing Betenly"). Beijing
Betenly has a large pool of local talent and is focused on design, brand management and marketing of the Betenly brand throughout China.
Current Trading and Outlook
We continue to see challenges faced in the first half of the year. However we are determined to take every measure to alleviate these
pressures and achieve further progress for 2008 and beyond.
Operationally our expansion plans have been successfully completed, ready for the anticipated increase in international and domestic
sales. Our new worsted fabric factory is producing at full capacity making Natsun one of the leading compact spinning fabric manufacturers
in China.
The reputation Natsun has both in China with local customers and internationally through our partner and distributor network is
extremely high. Equally the scalability of our business and our attention to high quality service provision and quality of designs are
creating greater awareness throughout our industry. A good illustration of this is the influx of customers being drawn to the Natsun brand
who historically had been with our competitors.
For the remaining part of 2008 we will focus on continued productivity with no compromise on quality but with a focus on pricing which
will assist our development for the full year.
In the longer term we see further growth in Europe together with the US's performance coming on stream next year.
Finally, on behalf of the Board, I would like to thank our senior management and employees for their dedication, commitment and efforts.
I would also like to thank you, our shareholders, customers and suppliers for your continued support since the admission.
Condensed Consolidated Income Statement
for the six months ended 30 June 2008
Unaudited six
months ended
Note 30 June 2008
RMB'000
Revenue 3 313,981
Cost of sales (258,496)
Gross profit 55,485
Other income 4 491
Distribution and marketing costs (14,786)
Administrative expenses (20,666)
Profit from operations 5 20,524
Finance costs 6 (14,412)
Profit before taxation 6,112
Taxation 7 (884)
Profit for the period 5,228
Attributable to:
Equity shareholders of the Company 5,037
Minority interests 191
5,228
Earnings per share
Basic 8 RMB0.17
Diluted 8 RMB0.17
The notes form an integral part of these condensed consolidated interim financial statements.
Proforma results for H1 2007 are set out on page 10.
Condensed Consolidated Balance Sheet
as at 30 June 2008
Unaudited Audited
Note 30 June 2008 31 December 2007
RMB'000 RMB'000
Non-current assets
Property, plant and equipment 9 618,979 390,283
Goodwill 16 16
Development expenditure 10 3,812 -
622,807 390,299
Current assets
Inventories 310,650 235,739
Trade and other receivables 157,813 151,327
Amount due from related companies 11(b) 31,147 150
Cash and bank balances 81,283 116,469
580,893 503,685
Current liabilities
Trade and other payables 230,732 115,764
Amount due to related companies 11(b) 67,419 60,065
Loan from a related party 11(c) 5,419 5,948
Bank overdrafts - 117
Provision for taxation 884 -
304,454 181,894
Net current assets 276,439 321,791
Total assets less current 899,246 712,090
liabilities
Non-current liabilities
Loans from a related company 11(d) 521,910 341,910
NET ASSETS 377,336 370,180
Capital and reserves
Share capital 12 284,152 284,152
Reserves 79,509 72,544
Total equity attributable to 363,661 356,696
equity shareholders
of the Company
Minority interests 13,675 13,484
TOTAL EQUITY 377,336 370,180
Condensed Consolidated Statement of Changes in Equity
for the six months ended 30 June 2008
Unaudited
Attributable to equity holders of the Company
Share
Share Share option Capital Exchange Retained Minority Total
capital premium reserve reserve reserve earnings interests equity
RMB'000 RMB'000 RMB'000 RMB'000 RMB'000 RMB'000 RMB'000 RMB'000
At 1 January 2008 284,152 28,390 2,577 - 2 41,575 13,484 370,180
Equity-settled share based - - 2,069 - - - - 2,069
payment
Exchange adjustment on - - - - (141) - - (141)
translation of overseas
subsidiaries
Transfer during the period - - - 6,035 - (6,035) - -
Profit for the period - - - - - 5,037 191 5,228
At 30 June 2008 284,152 28,390 4,646 6,035 (139) 40,577 13,675 377,336
The notes form an integral part of these condensed consolidated interim financial statements.
Condensed Consolidated Cash Flow Statement
for the six months ended 30 June 2008
Unaudited
six months
ended
30 June 2008
RMB'000
Operating activities
Profit before taxation 6,112
Adjustments for
- Loss on disposal of property, plant and equipment 349
- Depreciation 26,583
- Interest income (160)
- Interest expense 11,539
- Equity-settled share based payment 2,069
- Exchange adjustment on translation of overseas (141)
subsidiaries
- Written back of provision of impairment on inventories (1,703)
Operating profit before changes in working capital 44,648
Increase in inventories (73,208)
Increase in trade and other receivables (6,486)
Increase in amounts due from related companies (30,997)
Increase in trade and other payables 114,968
Decrease in amounts due to related companies 7,354
Cash generated from operations 56,279
Interest paid (11,539)
Net cash generated from operating activities 44,740
Investing activities
Purchases of property, plant and equipment (256,140)
Proceed from disposal of property, plant and equipment 512
Interest received 160
Additions of development expenditure (3,812)
Net cash used in investing activities (259,280)
Financing activities
Repayment of loan from a related party (529)
Loan from a related company 180,000
Net cash generated from financing activities 179,471
Net decrease in cash and cash equivalents at end of period (35,069)
Cash and cash equivalents at the beginning of the period 116,352
Cash and cash equivalents at the end of the period 81,283
Analysis of the balances of cash and cash equivalents
Cash and bank balances 81,283
The notes form an integral part of these condensed consolidated interim financial statements.
Unaudited Proforma Consolidated Income Statement
for the six months ended 30 June 2008
Unaudited
Unaudited six Proforma six
months ended months ended
30 June 2008 30 June 2007
RMB'000 RMB'000
Revenue 313,981 173,632
Cost of sales (258,496) (113,073)
Gross profit 55,485 60,559
Other income 491 127
Distribution and marketing costs (14,786) (5,661)
Administrative expenses (20,666) (8,316)
Profit from operations 20,524 46,709
Finance costs (14,412) (23,351)
Profit before taxation 6,112 23,358
Taxation (884) (8,890)
Profit for the period 5,228 14,468
Attributable to:
Equity shareholders of the Company 5,037 15,289
Minority interests 191 (821)
5,228 14,468
Note: The unaudited proforma consolidated income statement for the six months ended 30 June 2007 has been prepared in accordance with
the International Financial Reporting Standards and under the historical cost convention as if the Group had existed since 1 January 2005.
Unaudited Proforma Consolidated Balance Sheet
as at 30 June 2008
Unaudited
Unaudited Proforma
30 June 2008 30 June 2007
RMB'000 RMB'000
Non-current assets
Property, plant and equipment 618,979 396,598
Goodwill 16 -
Development expenditure 3,812 -
622,807 396,598
Current assets
Inventories 310,650 152,073
Trade and other receivables 157,813 307,674
Amount due from related companies 31,147 -
Cash and bank balances 81,283 9,486
580,893 469,233
Current liabilities
Trade and other payables 230,732 148,107
Amount due to related companies 67,419 -
Loan from a related party 5,419 -
Bank overdrafts - -
Provision for taxation 884 -
304,454 148,107
Net current assets 276,439 321,126
Total assets less current liabilities 899,246 717,724
Non-current liabilities
Loans from a related company 521,910 585,416
NET ASSETS 377,336 132,308
Capital and reserves
Share capital 284,152 -
Combination reserve (5,860)
Reserves 79,509 134,152
Equity attributable to equity shareholders of the 363,661 128,292
Company
Minority interests 13,675 4,016
TOTAL EQUITY 377,336 132,308
Note: The unaudited proforma consolidated balance sheet as at 30 June 2007 has been prepared in accordance with the International
Financial Reporting Standards and under the historical cost convention as if the Group had existed since 1 January 2005.
Notes to the Condensed Consolidated Interim Financial Statements
for the six months ended 30 June 2008
1. GENERAL INFORMATION
Natsun Holdings Limited (the "Company") is a limited liability company incorporated and domiciled in Hong Kong. The Company's principal
place of business is at Nanshan Industrial Park, Longkou City, Shandong, People's Republic of China ("PRC") and its registered office is at
Flat B, 6/F., Wing Wong Commercial Building, No. 557-559 Nathan Road, Kowloon, Hong Kong.
The principal activity of the Company is investment holding. The principal activities of the subsidiaries (together the "Group") are the
manufacturing and sale of garments and worsted fabrics.
On 24 December 2007, the Company was admitted to trading on the Alternative Investment Market ("AIM") of the London Stock Exchange.
These condensed consolidated interim financial statements are presented in thousand of Renminbi ("RMB'000"), unless otherwise stated, and
were approved for issue by the Board of Directors on 28 September 2008.
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
2.1 Basis of preparation of financial statements
The Company has a financial year end date of 31 December. These condensed consolidated interim financial statements for the six
months ended 30 June 2008 have been prepared in accordance with International Accounting Standard 34, "Interim Financial Reporting". These
condensed consolidated interim financial statements should be read in conjunction with the annual financial statements of the Group for the
year ended 31 December 2007.
2.2 Significant accounting policies
The condensed consolidated interim financial statements have been prepared under the historical cost convention except for certain
financial instruments which are stated at fair values.
The accounting policies and methods of computation used in the preparation of these condensed consolidated interim financial
statements are consistent with those used in the 2007 annual accounts except as stated below
(a) The adoption of the standards, amendments and interpretations issued by the International Accounting Standards Board mandatory
for annual financial periods beginning 1 January 2008 were not material to the Group's results of operations or financial position.
Notes to the Condensed Consolidated Interim Financial Statements (continued)
for the six months ended 30 June 2008
2.2 Significant accounting policies (continued)
(b) Research and development
Development expenditure is capitalised as an intangible asset only if development costs can be measured reliably, the product or process
is technically and commercially feasible, future economic benefits are probable and the Group intends to complete the development and to use
and sell the asset developed. The expenditure capitalised includes the cost of materials, direct labour and overhead costs directly
attributable to preparing the asset for its intended use. Other development expenditure, as well as expenditure on research, is recognised
in the income statement when incurred.
Capitalised development expenditure is measured at cost less accumulated amortisation and accumulated impairment losses.
Amortisation is recognised in the income statement on a straight line basis over the estimated useful lives of the relevant product.
3. SEGMENT REPORTING
The Group is organised into and reports its performance between two business segments: fabric and garment. The fabric segment comprises
the production and selling of worsted woollen fabrics and the garment business comprises the production and selling of garments.
The segment results for the six months ended 30 June, 2008 are:
Fabric Garment Eliminations Total
RMB'000 RMB'000 RMB'000 RMB'000
Sales to external customers 221,104 92,877 - 313,981
Sales to other segments 102,557 3,115 (105,672) -
323,661 95,992 (105,672) 313,981
Gross profit 41,196 13,155 1,134 55,485
Operating profit 23,179 183 1,134 24,496
Other income 491
Unallocated corporate expenses (4,463)
Finance costs (14,412)
Profit before taxation 6,112
Taxation (884)
Profit for the period 5,228
Notes to the Condensed Consolidated Interim Financial Statements (continued)
for the six months ended 30 June 2008
4. OTHER INCOME
Six months ended
30 June 2008
RMB'000
Interest income - bank deposits 160
Other income 314
Foreign exchange gain 17
491
5. PROFIT FROM OPERATIONS
Profit from operations is arrived at after charging/(crediting):
Six months ended
30 June 2008
RMB'000
Cost of inventories recognised as expense 195,453
Depreciation of property, plant and equipment 26,583
Staff costs (including directors' emoluments)
Wages and salaries 47,701
Share-based payments 2,069
Employee retirement benefits 394
Other employee benefits 1,938
52,102
Operating lease expense 5,507
Loss on disposal of property, plant and equipment 349
Research costs (132)
Written back of provision of impairment on inventory (1,703)
6. FINANCE COSTS
Six months ended
30 June 2008
RMB'000
Interest expense on loan from a related company 11,539
Bank charges 1
Exchange loss 2,872
14,412
Notes to the Condensed Consolidated Interim Financial Statements (continued)
for the six months ended 30 June 2008
7. TAXATION
(a) Hong Kong profits tax
No Hong Kong profits tax has been provided as the Group had no assessable profit arising in or derived from Hong Kong during the
period.
(b) PRC enterprise income tax
The main operating subsidiaries of the Group, which have been registered as Foreign Investment Enterprises, are operating in specific
developing zone in the PRC. Under the current tax legislation in the PRC, certain subsidiaries are subject to income tax at a rate of nil
per cent for a period of two years, commencing in the year of acquisition by the Company. Thereafter, tax will be levied at the rate of 12%,
half of the current full rate 24% for the following three years and thereafter at the full rate of 25%
(c) Deferred taxation
No provision for deferred tax has been made in the financial statements as the tax effect of temporary differences is immaterial to the
Group.
A deferred tax asset has not been recognised in respect of tax losses available to carry forward against suitable future trading
profits. The Directors believe the tax losses will be utilised during the period in which it is subject to income tax at a rate of nil per
cent and consequently no deferred tax asset has been recognised in respect of these tax losses.
(d) Reconciliation between tax expense and accounting profit
Six months ended
30 June 2008
RMB'000
Profit on ordinary activities before taxation 6,112
Profit before taxation multiplied by the standard rate
of corporation tax in Hong Kong of 16.5 per cent 1,008
Tax effects of:
Rate adjustment relating to overseas profits due to tax (124)
holiday
884
Notes to the Condensed Consolidated Interim Financial Statements (continued)
for the six months ended 30 June 2008
* Unrecognised deferred tax asset
Six months ended
30 June 2008
RMB'000
The Group's unrecognised deferred tax asset
can be analysed as follows:
Tax losses 9,597
8. EARNINGS PER SHARE
(a) Basic earnings per share
The calculation of basic earnings per share is based on the profit attributable to ordinary equity shareholders of the Company of
RMB5,037,000 and the weighted average of 30,143,442 ordinary shares issued during the period.
(b) Diluted earnings per share
The calculation of diluted earnings per share is based on the profit attributable to ordinary equity shareholders of the Company of
RMB5,037,000 and the weighted average number of ordinary shares of 30,181,615 calculated as follows:
Weighted average number of ordinary shares (diluted)
30 June 2008
Weighted average number of ordinary shares at 30 June 2008 30,143,442
Effect of deemed issue of shares under the Company's share
option
scheme for nil consideration 38,173
Weighted average number of ordinary shares (diluted) at 30 June 30,181,615
2008
Notes to the Condensed Consolidated Interim Financial Statements (continued)
for the six months ended 30 June 2008
9. PROPERTY, PLANT AND EQUIPMENT
Computers
Plant and and office Motor Construction
The Group Buildings equipment equipment vehicles in-progress Total
RMB'000 RMB'000 RMB'000 RMB'000 RMB'000 RMB'000
Cost
Acquisition of subsidiaries 83,444 292,016 6,488 264 751 382,963
Additions 941 21,497 261 49 11,660 34,408
Disposals - (591) - - - (591)
At 31 December 2007 84,385 312,922 6,749 313 12,411 416,780
and 1 January 2008
Additions 4,278 38,711 232 12 212,907 256,140
Transfer - 6,566 - - (6,566) -
Disposals - (1,259) (35) - - (1,294)
At 30 June 2008 88,663 356,940 6,946 325 218,752 671,626
- - - - - -
Accumulated depreciation and
impairment
Depreciation charge 1,797 24,049 685 30 - 26,561
Disposals - (64) - - - (64)
At 31 December 2007 and 1 1,797 23,985 685 30 - 26,497
January 2008
Depreciation charge 1,452 24,386 713 32 - 26,583
Disposal - (425) (8) - - (433)
At 30 June 2008 3,249 47,946 1,390 62 - 52,647
Net book value
At 30 June 2008 85,414 308,994 5,556 263 218,752 618,979
At 31 December 2007 82,588 288,937 6,064 283 12,411 390,283
Notes to the Condensed Consolidated Interim Financial Statements (continued)
for the six months ended 30 June 2008
10. DEVELOPMENT EXPENDITURE
The development expenditure represented the costs on the third production line of a subsidiary. As the production line is not yet
available for use, no amortisation has been made for the period.
11. MATERIAL RELATED PARTY TRANSACTIONS
(a) Sales and purchases of goods and services
Six months
ended
30 June 2008
RMB'000
Sales of goods 37,534
Rendering of services 31,838
69,372
Expenses charged by related parties
- Rental 6,611
- Others 39,692
46,303
Purchase of materials 42,629
Certain export sales, purchase of plant and machinery and purchase of materials to/from third parties are conducted through various
related companies at cost basis:
Sales of goods 69,338
Purchase of materials 41,660
(b) Amount due from/(to) related companies
The amount due from/(to) related companies is unsecured, interest-free and repayable on demand.
The Directors consider that their carrying amounts approximate to their fair value.
Notes to the Condensed Consolidated Interim Financial Statements (continued)
for the six months ended 30 June 2008
11. MATERIAL RELATED PARTY TRANSACTIONS (CONTINUED)
(c) Current loan from a related party
The loan is unsecured, interest-free and has no fixed repayment terms.
The Directors consider that the carrying amount of the loan from a related party approximates to its fair value.
(d) Non-current loans from a related party
The loan of RMB341,909,705 is unsecured and bears interest at a rate of 6.75% per annum. On 9 November 2007, Nanshan Group gave an
undertaking that the loan will not be due for repayment before 31 March 2010.
The loan of RMB180,000,000 is unsecured and bears interest at a rate of 7.2% per annum and is payable quarterly. On 17 June 2008,
Nanshan Group gave an undertaking that the loan will only be due for repayment, in 3 equal annual instalments, starting on 16 June 2011.
The Directors consider that the carrying amount of the loans from a related company approximate to their fair value.
12. CAPITAL
Number of
shares RMB'000
Authorised:
Ordinary shares of GBP0.625 each at 30 June 2008 80,000,000 800,000
Issued and fully paid:
Ordinary shares of GBP0.625 each at 30 June 2008 30,143,442 284,152
13. POST BALANCE SHEET EVENTS
The Group has set up two wholly owned subsidiaries in Shandong and Beijing for designing and distributing garments on 7 July 2008
and 11 August 2008 respectively.
14. COMPARATIVE FIGURES
The Company was incorporated on 14 May 2007 and accordingly, there are no comparative figures presented. A proforma consolidated
income statement and consolidated balance sheet has been included to show the results for the six months ended 30 June 2007 and the affairs
of the Group as at 30 June 2007 as if the Group had been in existence at that time.
This information is provided by RNS
The company news service from the London Stock Exchange
END
IR ILFLEATIRFIT
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