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| Share Name | Share Symbol | Market | Type | Share ISIN | Share Description |
|---|---|---|---|---|---|
| Qihang Equip | LSE:QIH | London | Ordinary Share | GB00B030LW50 | ORD 2.5P |
| Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
|---|---|---|---|---|---|---|---|---|---|---|
| 0.00 | 0.00% | 5.50 | 0.00 | 01:00:00 |
| Industry Sector | Turnover | Profit | EPS - Basic | PE Ratio | Market Cap |
|---|---|---|---|---|---|
| 0 | 0 | N/A | 0 |
From May 2019 to May 2024
TIDMQIH
RNS Number : 3893G
Qihang Equipment Company Limited
06 June 2013
Qihang Equipment Company Limited
Results for the year ended 31 December 2012
2012 was a very disappointing year for Qihang. The Board and Management were too slow in recognising the exaggerated effect that the slowdown in China would have on your Company. The Board did take significant costs out of the business. In addition we appointed a new CEO to run the operating subsidiary.
The new CEO is restructuring the business as part of our cost cutting measure. We hope to see the results reflected in the figures for the second half of the year.
We remain optimistic that growth in sales is resuming. However, as expected margins still remain disappointing. Notwithstanding this we expect to return to profit in the second half of the year.
The Board is aware that borrowings remain too large and consume too much of our operating cash flow. We believe that our return to profit will allow us to manage this better.
The Board is not complacent. We know that we must continue to improve both our production and financial performance constantly.
I would like to thank all the staff for their hard work in what has been a difficult year.
Mark E. Chapman
Chairman
For further information:
Qihang Equipment Company Limited
Li Yuanqing Tel: 0086 139 2159 4638 Mark Chapman Tel: 01483 892130/07449 842717
Northland Capital Partners Limited
William Vandyk Tel: 020 7796 8800
CONSOLIDATED AND COMPANY STATEMENT OF COMPREHENSIVE INCOME
for the year ended 31 December 2012
Hot Features
Premium
Note Group Group Company Company
2012 2011 2012 2011
Continuing operations RMB'000 RMB'000 RMB'000 RMB'000
Revenue 4 151,503 262,107 - -
Cost of sales (111,268) (189,903) - -
----------- ---------- ---------- ---------
Gross profit 40,235 72,204 - -
Other operating income 797 1,597 - -
Distribution expenses (9,458) (18,024) - -
Administrative expenses (33,471) (30,161) (3,344) (980)
Listing costs 7 - (6,747) - (3,763)
(Loss)/profit from
operation (1,897) 18,869 (3,344) (4,743)
Non-operating income
net of expenses 206 5 - -
Other gains/(losses) 8 1,283 - 1,289 -
Profit/(loss) on disposal
of subsidiaries 31.3 5 (63) - 21,556
Fair value loss on
financial instrument 18 - (461) - (1,962)
Income from subsidies 225 50 - -
Investment income 9 1,091 2,799 2 92
Finance costs 10 (15,940) (12,331) - (103)
----------- ---------- ---------- ---------
(Loss)/profit before
taxation (15,027) 8,868 (2,053) 14,840
Income tax credit/(expense) 11 1,006 (754) - -
----------- ---------- ---------- ---------
(Loss)/profit for the
year from continuing
operations (14,021) 8,114 (2,053) 14,840
----------- ========== ---------- ---------
Discontinued operations
Profit for the year 12 - -
from discontinued operation
=========== ==========
Other comprehensive
income
Exchange difference - (380) - (378)
Revaluation of available-for-sale
investment 17 - (1,241) - (2,141)
Total comprehensive
income for the year (14,021) 6,493 (2,053) 12,321
=========== ========== ========== =========
Profit attributable
to equity holders of
the company (14,021) 6,493
==========
(Loss)/earnings per
share 13
From continuing and
discontinued operations:
Basic and diluted (RMB) (0.24) 0.17
=========== ==========
Basic and diluted (pence) (2.40) 1.73
=========== ==========
All amounts are derived from continuing operations
CONSOLIDATED AND COMPANY STATEMENT OF FINANCIAL POSITION
At 31 December 2012
Note 2012 2011 2012 2011
RMB'000 RMB'000 RMB'000 RMB'000
Group Group Company Company
Non-current assets
Property, plant and equipment 14 192,287 201,454 6 8
Intangible assets 15 41,591 42,920 - -
Investments 16 - - 130,000 130,000
Available-for-sale financial
asset 17 - 657 - 657
Derivative financial instrument 18 - - - -
Deferred tax asset 26 1,448 456 - -
---------- ----------
235,326 245,487 130,006 130,665
---------- ---------- --------- ---------
Current assets
Inventories 19 97,836 92,264 - -
Trade and other receivables 20 63,489 55,129 260 6
Available-for-sale-financial
asset 8 - 100 - -
Cash and cash equivalents 21 26,460 47,160 2,528 4,235
---------- ---------- --------- ---------
187,785 194,653 2,788 4,241
---------- ---------- --------- ---------
Total assets 423,111 440,140 132,794 134,906
========== ========== ========= =========
Equity and reserves
Share capital 22 15,196 15,196 15,196 15,196
Share premium 22 86,711 86,711 86,711 86,711
Other reserves 23 (13,635) (15,344) - (1,622)
Retained earnings 3,034 18,764 25,086 28,761
---------- ---------- --------- ---------
91,306 105,327 126,993 129,046
---------- ---------- --------- ---------
Current liabilities
Bank borrowings 24 163,000 186,350 - -
Income tax liabilities 1,070 2,399 1,028 1,028
Trade and other payables 25 114,080 90,964 4,773 2,387
---------- ---------- --------- ---------
278,150 279,713 5,801 3,415
---------- ---------- --------- ---------
Non-current liabilities
Other borrowings 24 44,000 45,445 - 2,445
Deferred tax liabilities 26 9,655 9,655 - -
---------- ---------- --------- ---------
53,655 55,100 - 2,445
---------- ---------- --------- ---------
Total liabilities 331,805 334,813 5,801 5,860
========== ========== ========= =========
Total equity and liabilities 423,111 440,140 132,794 134,906
========== ========== ========= =========
The financial statements were approved by the Board of Directors and authorised for issue on 6 June 2013
Li Yuanqing Hao Qiang Chief ExecutiveDirector Executive Finance Director
CONSOLIDATED AND COMPANY STATEMENT OF CASH FLOWS
for the year ended 31 December 2012
2012 2011 2012 2011
Note RMB'000 RMB'000 RMB'000 RMB000
Group Group Company Company
Net cash used in operating
activities 27 (28,314) (6,808) (1,709) (7,110)
----------- ----------- ---------- -----------
Investing activities
Purchase of property, plant
and equipment (24,463) (49,561) - (8)
Refund on cancellation of plant 19,500 - - -
ordered
Proceeds from sale of plant 358 - - -
and equipment
Purchase of intangible assets (85) (3,548) - -
Purchase of investments - (2,484) - -
Investment in subsidiaries - - - (53,000)
Proceeds from sale of investment 94 - - -
Proceeds from disposal of subsidiary - - - 33,000
Net cash inflow from business - 10,805 - -
combination
Net cash inflow from disposal
of subsidiary 31.2/3 16,573 5,893 - -
Net cash inflow from acquisition
of subsidiary 31.1 8,396 - - -
Interest received 1,091 2,799 2 92
----------- -----------
Net cash generated from/(used
in) investing activities 21,464 (36,096) 2 (19,916)
----------- ----------- ---------- -----------
Financing activities
Proceeds from bank borrowings 235,100 191,350 - -
Repayment of bank borrowings (249,950) (138,400) - -
Proceeds from other borrowings 1,000 3,555 - 304
Shares issued - 3,437 - 3,437
Share Issue Costs - (2,984) - (2,984)
----------- -----------
Net cash (used in)/generated
from financing activities (13,850) 56,958 - 757
----------- ----------- ---------- -----------
Net (decrease)/increase in
cash and cash equivalents (20,700) 14,054 (1,707) (26,269)
Cash and cash equivalents at
beginning of period 47,160 32,632 4,235 30,611
Exchange difference - 474 - (107)
Cash and cash equivalents at
end of period 21 26,460 47,160 2,528 4,235
=========== =========== ========== ===========
CONSOLIDATED AND COMPANY STATEMENT OF CHANGES IN EQUITY
for the year ended 31 December 2012
Group Share Share Other Retained Total
capital premium reserves earnings
RMB'000 RMB'000 RMB'000 RMB'000 RMB'000
Balance at 1 January 2011 4,612 19,842 59,776 2,507 86,737
========= ========= =========== ========== ==========
Comprehensive income
Profit for the year - - - 8,114 8,114
Exchange difference - - (380) - (380)
Revaluation of available-for-sale financial assets - - (1,241) - (1,241)
--------- --------- ----------- ---------- ----------
Total comprehensive income for the year - - (1,621) 8,114 6,493
--------- --------- ----------- ---------- ----------
Transaction with owner
Issue of shares 10,584 69,853 - - 80,437
Transfer statutory reserves - - 2,106 (2,106) -
Disposal of subsidiary - - (8) 8 -
Capital structuring after merger - (2,984) (75,597) 10,241 (68,340)
--------- --------- ----------- ---------- ----------
Total transaction with owner 10,584 66,869 (73,499) 8,143 12,097
--------- --------- ----------- ---------- ----------
Balance at 31 December 2011 15,196 86,711 (15,344) 18,764 105,327
========= ========= =========== ========== ==========
Comprehensive income
Loss for the year - - - (14,021) (14,021)
Total comprehensive income for the year - - - (14,021) (14,021)
--------- --------- ----------- ---------- ----------
Transaction with owner
Transfer statutory reserves - - 88 (88) -
Transfer exchange difference - - 380 (380) -
Settlement of available-for-sale financial assets - - 1,241 (1,241) -
--------- ----------- ---------- ----------
Total transaction with owner - - 1,709 (1,709) -
--------- --------- ----------- ---------- ----------
Balance at 31 December 2012 15,196 86,711 (13,635) 3,034 91,306
========= ========= =========== ========== ==========
Company Share Share Other Retained Total
capital premium reserves earnings
RMB'000 RMB'000 RMB'000 RMB'000 RMB'000
Balance at 1 January 2011 4,612 19,842 897 13,921 39,272
========= ========= ========== ========== ==========
Comprehensive income
Profit for the year - - - 14,840 14,840
Exchange difference - - (378) - (378)
Revaluation of available-for-sale financial asset - - (2,141) - (2,141)
--------- --------- ---------- ---------- ----------
Total comprehensive income for the year - - (2,519) 14,840 12,321
--------- --------- ---------- ---------- ----------
Transaction with owner
Issue of shares 10,584 69,853 - - 80,437
Share issue cost - (2,984) - - (2,984)
--------- --------- ---------- ---------- ----------
Total transaction with owner 10,584 66,869 - - 77,453
--------- --------- ---------- ---------- ----------
Balance at 31 December 2011 15,196 86,711 (1,622) 28,761 129,046
========= ========= ========== ========== ==========
Comprehensive income
Loss for the year - - - (2,053) (2,053)
--------- --------- ---------- ---------- ----------
Total comprehensive income for the year - - - (2,053) (2,053)
--------- --------- ---------- ---------- ----------
Transaction with owner
Transfer exchange difference - - 378 (378) -
Settlement of available-for-sale financial assets - - 1,244 (1,244) -
--------- --------- ---------- ---------- ----------
Total transaction with owner - - 1,622 (1,622) -
--------- --------- ---------- ---------- ----------
Balance at 31 December 2012 15,196 86,711 - 25,086 126,993
========= ========= ========== ========== ==========
NOTES TO THE FINANCIAL STATEMENTS
For the year ended 31 December 2012
1 GENERAL INFORMATION
Qihang Equipment Company Limited is a company incorporated in Jersey under the Companies (Jersey) Law 1991.The address of the registered office is given on page 1. The nature of the Group's operation and its principal activities are set out in the Directors' Report. The principal place of business of the Group's operation is Zhenjiang New Development Area, Dingmao Nanwei Road 2, Zhenjiang Province, P. R. China ("PRC").
The principal activity of the Company is that of an investment holding company. The principal activities of its subsidiaries are set out in note 16.
On 1 July 2011, by special resolution, the name of the Company changed to Qihang Equipment Company Limited to reflect the new business; and the Company changed its presentational currency to produce its annual report to shareholders in Renminbi ("RMB") of the PRC for the year ended 31 December 2011 and subsequent periods.
As of result of the above, these financial statements present information about the Company on a stand-alone basis and as a consolidated group of companies, and are set out in RMB, which is the functional currency of the Group's operating subsidiaries in PRC.
These financial statements are rounded to the nearest thousand ('000).
2 ACCOUNTING POLICIES 2.1 Statement of compliance
These financial statements have been prepared in accordance with International Financial Reporting Standards and Interpretation in force ("IFRSs"), as adopted by European Union, in accordance with the provision of the Companies (Jersey) Law 1991, and the AIM Rules.
The Group has adopted all relevant standards effective for accounting periods beginning on or after 1 January 2012.
At the date of authorisation of these financial statements, the Group has not adopted the following standardas it is either not effective of not applicable to the Group's business.
Standards, interpretations and amendments
IAS 27 Separate Financial Statements (2011) - effective 1 January 2013
Amended version of IAS 27 which now only deals with the requirements for separate financial statements, which have been carried over largely unchanged from IAS 27 Consolidated and Separate Financial Statements; Requirements for consolidated financial statements are now contained in IFRS 10 Consolidated Financial Statements.
The Standard requires that when an entity prepares separate financial statements, investments in subsidiaries, associates, and jointly controlled entitles are accounted for either at cost, or in accordance with IFRS 9 Financial Instruments.
The Standard also deals with the recognition of dividends, certain group reorganisations and includes a number of disclosure requirements.
IFRS 10 Consolidated Financial Statements - effective 1 January 2013
This requires a parent to present consolidated financial statements as those of a single economic entity, replacing the requirement previously contained in IAS27 and SIC12.
IFRS 10 uses control as a single basis for consolidation, irrespective of the nature of the investee, thus elimination the risks and rewards approach included in SIC-12.
An investor must possess all the three elements to conclude it controls an investee.
-- power over the investee; -- exposure, or rights, to variable returns from involvement with the investee; and -- the ability to use power over the investee to affect the amount of the investor's returns
IFRS 13 Fair Value Measurement - effective 1 January 2013
Establishes a single framework for measuring fair value and is applicable for both financial and non-financial items. The Standard does not include requirements on when fair value measurement is required; it prescribes how fair value is to be measured if required by another standard.
Presentation of Items of Other Comprehensive Income (Amendments to IAS 1) - effective 1 July 2012
The amendment revises the way other comprehensive income ("OCI") is presented.
-- It preserves the amendments made to IAS 1 in 2007 to require profit and loss and OCI to be presented together;
-- require entitles to group items presented in OCI based on whether they are potentially reclassifiable to profit or loss subsequently; and
-- require tax associated with items presented before tax to be shown separately for each of the two groups of OCI items (without changing the option to present items of OCI either before tax or net of tax).
Standards, interpretations and amendments (not yet endorsed by EU at 5 April 2013)
IFRS 9 Financial Instrument - Classification and Measurement of Financial Assets - effective 1 January 2015
IFRS 9 introduces new requirements for classifying and measuring financial assets as follow:
-- debt instruments meeting both a 'business model' test and a 'cash flow characteristics' test are measured at amortised cost (the use of fair value is optional in some limited circumstances';
-- investments in equity instruments can be designed as 'fair value through other comprehensive income' with only dividends being recognised in profit or loss; and
-- all other instruments (including all derivatives) are measured at fair value with changes recognised in the profit and loss.
The concept of 'embedded derivatives' does not apply to financial assets within the scope of the Standard and the entire instrument must be classified and measured in accordance with the above guidelines.
IFRS 9 - Incorporation of requirements on the accounting for financial liabilities- effective 1 January 2015
The guidance in IFRS 9 retains the classification criteria for financial liabilities currently contained in IAS 39. However, there are two key differences, relating to presentation and measurement:
-- the presentation of the effects of changes in fair value attributable to a liability's credit risk; and
-- the elimination of the cost exemption for derivative liabilities to be settled by delivery of unquoted equity instruments.
Investment Entities (Amendments to IFRS 10, IFRS 12 and IAS 27) - effective date 1 January 2014
-- to provide "investment entities" an exemption from the consolidation of particular subsidiaries and instead require that an investment entity measure the investment in each eligible subsidiary at fair value through profit or loss in accordance with IFRS 9 or IAS 39;
-- require additional disclosure about why the entity is considered an investment entity, details of the entity's unconsolidated subsidiaries, and the nature of relationship and certain transactions between the investment entity and its subsidiaries; and
-- require an investment entity to account for its investment in a relevant subsidiary in the same way in its consolidated and separate financial statements (or to only provide separate financial statements if all subsidiaries are unconsolidated).
There are no other standards, interpretations and amendments in issue but not yet adopted that the directors anticipate will have material effect on the reported income or net assets of the Group.
2.2 Basis of preparation
These consolidated financial statements have been prepared on the historical cost basis except for certain properties and financial instruments that are measure at revalued amounts or fair values, as explained in the accounting policies below. Historical cost is generally based on the fair value of the consideration given in exchange for assets.
Win Yu Group financial information is presented separately on note 33 to these financial statements.
2.3 Basis of consolidation
(a) Subsidiaries
The consolidated financial statements incorporate the financial statements of the company and entities controlled by the Company (its subsidiaries). Control is achieved where the company has the power to govern the financial and operating policies of an investee entity so as to obtain benefits from its activities.
The results of subsidiaries acquired or disposed of during the period are included in the consolidated income statement from the effective date of acquisition or up to the effective date of disposal, as appropriate. Where necessary, adjustments are made to the financial statements of subsidiaries to bring the accounting policies used into linewith those used by the Group.
All intra-group transactions, balances, income and expenses are eliminated on consolidation.
(b) Non-controlling interests
Non-controlling interests in the net assets of consolidated subsidiaries are identified separately from the Group's equity therein. Non-controlling interests consist of the amount of those interests at the date of the original business combination and the minority's share of changes in equity since the date of the combination. Losses applicable to the minority in excess of the minority's interest in the subsidiary's equity are allocated against the interests of the Group except to the extent that the minority has a binding obligation and is able to make an additional investment to cover the losses.
(c) Associates
Associates are all entitles over which the Group has significant influence but not control, generally accompanying by a shareholding of between 20% - 50% of the voting rights. Investments in associates are accounted for using the equity method of accounting and are initially recognised at cost.
2.4 Business combinations
The acquisition of subsidiaries is accounted for using the acquisition method of accounting. The consideration transferred in a business combination is measured at the aggregate of the fair values, at the date of exchange, of assets given, liabilities incurred or assumed, and equity instruments issued by the Group in exchange for control of the acquire. Acquisition related costs are generally recognised in profit or loss. The acquiree's identifiable assets, liabilities and contingent liabilities that meet the conditions for recognition under IFRS 3: Business Combinations are recognised at their fair value at the acquisition date, except for non-current assets (or disposal groups) that are classified as held for sale in accordance with IFRS 5: Non-Current Assets Held for Sale and Discontinued Operations, which are recognised and measured at fair value less costs to sell.
Goodwill arising on acquisition is recognised as an asset and initially measured as the excess of the consideration transferred over the Group's interest in the net fair value of the identifiable assets, liabilities and contingent liabilities recognised. If, after reassessment, the Group's interest in the net fair value of the acquiree's identifiable assets, liabilities and contingent liabilities exceed the consideration transferred, the excess is recognised immediately in the profit and loss as a bargain purchase.
Non-controlling interests that are present ownership interest and entitle their holders to a proportionate share of the entity's net assets in the event of liquidation may be initially measured either at fair value or at the non- controlling interests' proportionate share of the recognised amounts of the acquiree's identifiable net assets. The choice of measurement basis is made on a transaction-by-transaction basis. Other types of non-controlling interests are measured at fair value, when applicable, on the basis specified in another IFRS.
2.5 Reverse acquisitions
A reverse acquisition occurs when the entity that issues securities (the legal acquirer) is identified as the acquiree for accounting purposes under business combination. The entity whose equity interests are acquired (the legal acquiree) must be the acquirer for accounting purposes for the transaction to be considered a reverse acquisition.
The merger of a private operating entity into a non-operating public shell corporation with nominal net assets typically results in the owners of the private entity gaining control over the combined entity after the transaction and the shareholders of the former public shell corporation continuing only as passive investors. IRFS 3 clarifies that this transaction is usually not considered a business combination, instead this transactions are considered to be a capital transactions of the legal acquiree. However, the accounting result is similar to reverse acquisition accounting.
The Group's financial statements have been prepared in the name of Qihang on the basis of continuing business of Win Yu ("acquirer accounting") and business combination with Qihang, the parent company ("acquiree accounting") occurs on date of business combination.
The standalone financial statements of the parent company have been prepared of on the basis of continuing operation of Qihang.
2.6 Going concern
The Group had net current liabilities of RMB90 million at 31 December 2012. The Group has been monitored its cash flow and constantly negotiated with its sales agents and creditors for acceptable trading terms and payment arrangements for its liabilities to ensure continuity in its operations.
The directors are required to report that the business is a going concern, with supporting assumptions or qualifications as necessary. After making enquiries, the directors consider that the Group has adequate resources and committed borrowing facilities to continue in operational existence for the foreseeable future. The directors are confident that the short term bank borrowings facilities are renewable in the normal course of business when they fall due. In addition, the directors have obtained confirmation from the majority shareholder that he will continue to support the Group for the foreseeable future. Consequently, they have adopted the going concern basis in preparing these financial statements.
2.7 Foreign currency
Transactions entered into by Group entities in a currency other than the currency of the primary economic environment in which it operates (the "functional currency") are recorded at the rates ruling when the transactions occur. Foreign currency monetary assets and liabilities are translated at the rates ruling at the balance sheet date and the gains and losses on translation are included in the income statement.
2.8 Borrowing costs
All borrowings costs are recognised in the income statement in the period in which they are incurred except for borrowing costs attributable to qualifying assets. Borrowing costs that are directly attributable to the acquisition, construction or production of a qualifying asset is to be capitalised as a cost of that asset. A qualifying asset is an asset that necessarily takes a substantial period of time to get ready for its intended use or sale.
2.9 Income tax
Income tax for the financial year comprises current and deferred tax. Income tax is recognised in the income statement except to the extent that it relates to items recognised directly in other comprehensive income or directly in equity. In this case the tax is recognised in other comprehensive income or directly in equity, respectively.
Current tax is the expected tax payable on the taxable income for the financial year, using tax rates enacted or substantively enacted at the statement of financial position date, and any adjustment to tax payable in respect of previous financial years.
Deferred tax is provided using the liability method, providing for temporary differences as at the statement of financial position date between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for taxation purposes except for differences arising on:
- the initial recognition of goodwill;
- the initial recognition of an asset or liability in a transaction which is not a business combination and,
at the time of the transaction, affects neither accounting or taxable profit; and
- investment in subsidiaries and jointly controlled entities where the group is able to control the timing of the reversal of the difference and it is probable that the difference will not reverse in the foreseeable future.
The amount of deferred tax provided is based on the expected manner of realisation or settlement of the carrying amount of assets and liabilities, using tax rates enacted or substantively enacted at the statement of financial position date.
A deferred tax asset is recognised only to the extent that it is probable that future taxable profits will be available against which the asset can be utilised. Deferred tax assets are reduced to the extent that it is no longer probable that the related tax benefit will be realised.
2.10 Property, plant and equipment
Land use rights (note 2.11a) and buildings are stated at their revalued amounts, being the fair value at the date of revaluation, less any subsequent accumulated depreciation and subsequent accumulated impairment losses. Revaluations are performed with sufficient regularity such that the carrying amounts do not differ materially from those that would be determined using fair values at the end of the reporting period. Any revaluation increase arising is recognised in other comprehensive income and accumulated in equity, except to the extent that it reverses a revaluation decrease for the same asset previously recognised in profit and loss, in which case the increase is credited to profit and loss to the extent of the decrease previously expensed. A decrease in the carrying amount arising on the revaluation is recognised in profit or loss to the extent that it exceeds the balance, if any, held in the revaluation reserve relating to a previous revaluation of that asset.
Plant and equipment are stated at cost less accumulated depreciation and impairment. The cost of an asset comprises its purchase price and any directly attributable costs of bringing the asset to its working condition and location for its intended use. Depreciation is calculated so as to write off the cost of an asset, less its estimated residual value, over its useful economic life, using the straight-line method. The estimated useful lives are as follows:
Buildings 20 years Plant and machinery 5-10 years Motor vehicles 5 years
Fixtures, fittings and equipment 5 years
Other assets 5 years over cost
An asset's carrying amount is written down immediately to its recoverable amount if the asset's carrying amount is greater than its estimated recoverable amount (refer note 2.12).
Gains and losses on disposals are determined by comparing the disposal proceeds with the carrying amount and are included in the profit and loss.
Asset in the course of construction is stated at cost less impairment losses. Cost comprises direct costs of construction capitalised during the periods of construction. Capitalisation of these costs ceases and construction-in-progress is transferred to property, plant and equipment when substantially all the activities necessary to prepare the assets for their intended use are completed. No depreciation is provided for in respect of construction-in-progress until it is completed and ready for its intended use.
2.11 Intangible assets
(a) Land use rights
Land use rights are amortised through administrative expenses over the period to which the rights relate. The estimated useful lives are 50 years.
(b) Software Licences
Software licences are stated at cost less accumulated amortisation and accumulated impairment losses. Amortisation is calculated using the straight-line method to allocate the cost of the licence over 5 years.
(c) Internally generated intangible assets - research and development expenditure
Research expenditure is recognised as an expense as incurred.
Costs incurred on development projects are recognised as internally generated intangible assets only if all of the following conditions are met by the Group:
- the technical feasibility of completing the intangible assets so that it will be available for use or sales;
- its intention to complete the intangible asset and use or sell it; - its ability to use or sell the intangible assets; - it is probable that the intangible asset created will generate future economic benefits;
- the availability of adequate technical financial and other resources to complete the development and use or sell the intangible assets; and
- its ability to measure reliably the expenditure attributable to the intangible assets during its development.
Internally generated intangible assets are amortised on a straight-line basis over their estimated useful lives, from the date the intangible is ready for use. Amortisation charge is recognised in the income statement within administrative expenses.
2.12 Impairment of non-current assets
The carrying amounts of assets are reviewed at each statement of financial position date to determine whether there is any indication of impairment. If any such indication exists, the asset's recoverable amount is estimated. For goodwill, the recoverable amount is estimated at each statement of financial position date. An impairment loss is recognised whenever the carrying amount of the asset or its cash-generating unit exceeds its recoverable amount. Impairment losses are recognised through administrative expenses in the income statement.
The recoverable amount is the higher of an asset's net selling price and value in use. The net selling price is the amount obtainable from the sale of an asset in an arm's length transaction. Value in use is the present value of estimated future cash flows expected to arise from the continuing use of an asset and from its disposal at the end of its useful life.
Recoverable amounts are estimated for individual assets or, if it is not possible, for the cash generating unit. An impairment loss is reversed if there has been a change in the estimates used to determine the recoverable amount. An impairment loss is reversed only to the extent that the asset's carrying amount does not exceed the carrying amount that would have been determined, net of depreciation, if no impairment loss had been recognised. Reversals of impairment losses are recognised in the income statement. Impairment losses in respect of goodwill are not reversed.
2.13 Investment in subsidiary undertakings
Investments in subsidiaries are stated at cost less provision for any impairment in value.
2.14 Inventories
Inventories are stated at the lower of cost and net realisable value. Cost is determined using the weighted average cost method. The cost of finished goods comprises raw materials, direct labour, other direct costs and related production overheads but excludes borrowing costs. Net realisable value is the estimated selling price in the ordinary course of business, less the costs of completion and selling expenses.
2.15 Financial instruments
Financial assets and financial liabilities are recognised when a group entity becomes a party to the contractual provisions of the instrument.
Financial assets and financial liabilities are initially measured at fair value. Transaction costs that are directly attributable to the acquisition or issue of financial assets and financial liabilities (other than financial assets and financial liabilities at fair value through profit or loss) are added to or deducted from the fair value of the financial assets or financial liabilities, as appropriate, on initial recognition. Transaction costs directly attributable to the acquisition of financial assets or financial liabilities at fair value through profit or loss are recognised immediately in profit or loss.
2.16 Financial assets
Financial assets within the scope of IAS 39 are classified as either financial asset at 'fair value through profit and loss' (FVTPL), loans and receivables, held to maturity investments, or available-for-sale financial assets, as appropriate.
The Group determines the classification of its financial assets after initial recognition and, where allowed and appropriate, re-evaluates this designation or convention in the market place concerned.
All arm's length purchases and sales of financial assets are recognised on the trade date i.e. the date that the Group commits to purchase the asset. Such purchases or sales are purchases or sales of financial assets that require delivery of assets within the period generally established by regulation or convention in the market place concerned.
2.16.1 Effective interest method
This is a method of calculating the amortised cost of a debt instrument and of allocating interest income over the relevant period. The effective interest rate is the rate that exactly discounts estimated future cash receipts (including all fees and points paid or received that form an integral part of the effective interest rate, transaction costs and other premiums or discounts) through the expected life of debt instrument, or where appropriate, a shorter period, to the net carrying amount on initial recognition.
Income is recognised on an effective interest basis for debt instruments other than those financial assets classified at FVTPL.
2.16.2 Financial assets at FVTPL
Financial assets classified as held for trading are included in the category financial assets at fair value through profit or loss. Financial assets are classified as held for trading if they are acquired for the purpose of sale in the short term. Derivative financial instruments are also classified as held for trading unless they are designated and effective as a hedging instrument. Financial assets at FVTPL are stated at fair value with any gains or losses arising on re-measurement recognised in profit or loss.
2.16.3 Loans and receivables
Loans and receivables are non-derivative financial assets with fixed or determinable payments that are not quoted in an active market. They are measured at amortised cost using the effective interest method less any impairment and are included in current assets, except for maturities greater than twelve months after the statement of financial position date. These are classified as non-current assets. The Group's loans and receivables comprise "trade and other receivables" and "cash and cash equivalents" in the statement of financial position.
Interest income is recognised by applying the effective interest rate except for short-term receivables when the recognition of interest would be immaterial.
2.16.4 Held-to-maturity investments
Non-derivative financial assets with fixed or determinable payments and fixed maturity are classified as held-to-maturity when the Group has the positive intent and ability to hold the assets to maturity. Investments intended to be held for an undefined period are not included in this classification. Other long-term investments that are intended to be held-to-maturity, such as bonds, are subsequently measured at amortised cost using the effective interest method less any impairment.
2.16.5 Available-for-sale financial assets
Available-for-sale financial assets are non-derivative financial assets that are designated as available-for-sale or are not classified in any of the three preceding categories. After initial recognition, available-for-sale assets are measured at fair value with gains or losses being recognised in other comprehensive income and accumulated under fair value adjustment reserve until the investment is derecognised or until the investment is determined to be impaired at which time the accumulate gain or loss previously reported in equity is included in the profit or loss. The fair value of investments that are traded in active market at the end of each reporting period is determined by reference to the relevant stock exchange's quoted market bid prices at the close of business on the reporting period date. For investments where there is no active market, fair value is determined using valuation techniques. Such techniques include using recent arm's length market transactions; reference to the current market value of another instrument, which is substantially the same; discounted cash flow analysis and option pricing models.
2.17 Cash and cash equivalents
Cash comprises cash in hand and demand deposits. Cash equivalents are short-term, highly liquid investments that are readily convertible to known amounts of cash and which are subject to an insignificant risk of changes in value. For the purpose of the cash flow statement, cash equivalents would include advances from banks repayable within 3 months from the date of the advance.
2.18 Financial liabilities and equity
Financial liabilities and equity instruments are classified according to the substance of the contractual arrangements entered into. Financial liabilities include trade and other payables, amounts due to related parties and shareholders, bank borrowings and notes payable.
Trade and other payables are carried at cost which is the fair value of the consideration to be paid in the future for goods and services received, whether or not billed to the Group.
All borrowings and overdrafts are recorded at the amount of the proceeds received, net of direct issue costs. Finance charges are charged to the income statement on an accruals basis using the effective interest rate method.
Equity instruments are recorded at the fair value of the consideration received, net of direct issue costs.
2.19 Impairment of financial assets
Financial assets, other than those at FVTPL, are assessed for indicators of impairment at the end of each reporting date. Financial assets are considered to be impaired when there is objective evidence that, as a result of one or more events that occurred after the initial recognition of the financial assets, the estimated future cash flows of the investment have been affected.
An impairment loss in respect of a financial asset measured at amortised cost is calculated as the difference between its carrying amount, and present value of the estimated future cash flows discounted at the original effective interest rate. An impairment loss in respect of an available-for-sale financial asset is calculated by reference to its fair value.
For certain categories of financial assets, such as trade receivables, assets that are assessed not to be impaired individually are, in addition, assessed for impairment on a collective basis that share similar credit risk characteristics.
For financial assets carried at cost, the amount of the impairment loss is measured as the difference between the asset's carrying amount and the present value of the estimated future cash flows discounted at the current market rate of return for a similar financial asset. Such impairment loss will not be reversed in subsequent periods.
The carrying amount of the financial assets is reduced by the impairment loss directly for all financial assets with the exception of trade receivables, where the carrying amount is reduced through the use of an allowance account. Changes in the carrying amount of the allowance account are recognised in profit or loss.
When available-for-sale financial asset is considered to be impaired, cumulative gains or losses previously recognised in other comprehensive income are reclassified to profit or loss in the period.
For financial assets measured at amortised cost, if, in a subsequent period, the amount of the impairment loss decreases which can be related objectively to an event occurring after the impairment was recognised, the previously recognised impairment loss is reversed through profit or loss to the extent that the carrying amount of the investment at the date the impairment is reversed does not exceed what the amortised cost would have been had the impairment not been recognised.
In respect of available-for-sale equity securities, impairment losses previously recognised in profit or loss are not reversed through profit or loss. Any increase in fair value subsequent to an impairment loss is recognised in other comprehensive income and accumulated under fair value adjustment reserve. In respect of available-for-sale debt securities, impairment losses are subsequently reversed through profit or loss if an increase in the fair value of the investment can be objectively related to an event occurring after the recognition.
2.20 Revenue recognition
Revenue is measured at the fair value of the consideration received or receivable and represents amounts receivable for goods and services provided in the normal course of business, net of discounts, VAT and other sales related taxes.
Universal lathes and CNC machinery tools sales
Sales of goods are recognised when goods are delivered and title has passed and all revenue recognised is in respect of the sale of goods.
2.21 Segment reporting
Operating segments are reported in a manner consistent with the internal reporting provided to the chief operating decision-maker. The chief operating decision-maker is responsible for allocating resources and assessing performance of the operating segments.
2.22 Government grants
Government grants received on capital expenditure are deducted in arriving at the carrying amount of the asset purchased.
Grants for revenue expenditure are presented separately on the face of the consolidated income statement.
Where retention of the government grant is dependent on the Group satisfying certain criteria it is initially recognised as deferred income. When the criteria for retention have been satisfied, the deferred income balance is released to the income statement or netted against the asset purchased as appropriate.
2.23 Related parties
Parties are considered to be related if one party has the ability, directly or indirectly, to control the other party, or exercise significant influence over the other party in making financial and operating decisions. Parties are also considered to be related if they are subject to common control or common significant influence. Related parties may be individuals or corporate entities.
2.24 Leases
Leases in which a significant portion of the risks and rewards of ownership are retained by the lessor are classified as operating leases. Payments made under operating leases (net of any incentives received from the lessor) are charged to the profit and loss on a straight-line basis over the period of the lease.)
2.25 Contingent liabilities and contingent assets
A contingent liability is a possible obligation that arises from past events and whose existence will only be confirmed by the occurrence or non-occurrence of one or more uncertain future events not wholly within the control of the Group. It can also be a present obligation arising from past events that is not recognised because it is not probable that outflow of economic resources will be required or the amount of obligation cannot be measured reliably.
A contingent liability is not recognised but is disclosed in the notes to the accounts. When a change in the probability of an outflow occurs so that the outflow is probable, it will then be recognised as a provision. A contingent asset is a possible asset that arises from past events and whose existence will be confirmed only by the occurrence or non-occurrence of one or more uncertain events not wholly within the control of the Group. Contingent assets are not recognised but are disclosed in the notes to the accounts when an inflow of economic benefits is probable. When inflow is virtually certain, an asset is recognised.
2.26 Provisions
Provisions are recognised when the Group has a present legal or constructive obligation as a result of a past event, it is probable that an outflow of economic benefit will be required to settle the obligation, and a reliable estimate of the amount can be made.
3. CRITICAL ACCOUNTING ESTIMATES AND JUDGEMENTS
The preparation of financial statements in conformity with IFRSs requires management to make assumptions that affects the application of accounting policies and the amounts of assets, liabilities, income and expenditure. The estimates and associated assumptions are based on historical experience and other relevant factors, the results of which form the basis for the judgements that underlie the carrying value of the assets and liabilities. Actual results may differ from these estimates. The most significant areas in which judgements are required relate to the estimate of useful economic lives and residual values of non-current assets and the recoverable amount of current and non-current assets (in particular inventories and trade receivables). The 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 if the revision affects only that period or in the period of revision and future periods if the revision affects both the current and future periods.
The Group makes estimates and assumptions concerning the future. The estimates and assumptions that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year are discussed below.
(a) Provisions for doubtful debts
The Group makes sales on credit. A proportion of the outstanding credit sales may prove uncollectible in due course. An estimate is made of the uncollectible portion of accounts receivables using a calculation based on prior experience and an evaluation of the amounts outstanding. In aggregate, RMB380,896 (2011: RMB183,282) is considered to be at risk in respect of amounts due from trade customers. There is a degree of uncertainty as to actions the Group is able to undertake to enforce collection of these debts, which may impact the eventual recoverable amounts. Accordingly, the Directors have assessed their best estimate of the recoverability of these debts. More details of the allowance for doubtful trade and other receivables are provided in note 20.
(b) Provisions for inventories
The Group reviews the net realisable value of, and demand for, its inventory on a regular basis to provide assurance that recorded inventory is stated at the lower of cost and net realisable value. Factors that could impact estimated demand and selling prices include the timing and success of future technological innovations, competitor actions, supplier prices and economic trends. Changes of the expected net realisable value of inventory could potentially result in the reduction of the profit for the year. The Group has made provision of RMB3,258,694 (2011: RMB312,820) for slow moving and obsolete stock.
(c) Revaluation of land and buildings
The Group has used a valuation from an independent valuer to estimate the fair value of land and property and to calculate the deferred income tax liabilities accordingly based on management's best judgement. The fair value of land and property relies upon open market transactions. If the operating subsidiary in China fails to maintain its high technology enterprise status the actual outcome on deferred income tax liabilities would differ by 10 per cent. from management's estimate and the Group would need to increase the deferred tax liabilities by RMB6.44 million.
(d) Impairment of investment in subsidiary
Determining whether the investment in subsidiary is impaired requires an estimation of the value in use of the cash-generating unit ("CGU"). The value in use calculation requires the directors to estimate the future cash flows expected to arise from the CGU and a suitablediscount rate in order to calculate present value.
The recoverable amount of this CGU is determined based on VIU calculation which uses cash flow projections based on financial budgets approved by the directors covering a two-year period and a discount rate of 10.5% per annum.
Cash flows projections during the budget period are based on the same expected gross margins and raw materials price inflation throughout the budgeted period. The cash flows beyond that two-year period have been extrapolated using a steady 15% per annum growth rate which is half the projected long term average growth rate for PRC market. The directors believe that any reasonable possible change in the key assumptions on which recoverable amount is based would not cause the carrying amount to exceed the recoverable amount of the CGU. Therefore no impairment is provided.
4 SEGMENT INFORMATION
The sales revenue arises from the sale of universal lathes, CNC machinery, large-scale machinery, and relevant spare parts which forms the Group's main business.
All the activities are within the PRC. Therefore management considers no detail of operating and geographical segments information is to be reported.
10.66% (2011: 8.86%) of sales made via PRC agents to customers overseas.
Analysis of revenue from the sale of goods and services are as follows:
Group Group
2012 2011
RMB'000 RMB'000
Universal 60,656 142,540
CNC 58,172 74,892
Large-scale 32,156 44,245
Others 1,483 1,830
Sales related taxes (964) (1,400)
151,503 262,107
========= ===========
5 EXPENSES BY NATURE
Group Group
2012 2011
RMB'000 RMB'000
Changes in inventories of finished goods and
work in progress (5,572) (13,459)
Raw materials, consumables used, direct costs,
and overheads 97,626 183,998
Employee benefit expense (note 6) 32,649 33,030
Research and development costs 6,070 3,236
Exchange difference (14) (832)
Sales agents' commissions 860 5,074
Warranty costs 790 2,249
Depreciation, amortisation and impairment charges 14,486 12,060
Operating lease payments 622 446
Transportation costs 1,399 2,146
Travel and entertaining 2,780 4,606
Other expenses 2,501 5,534
---------- ----------
Total cost of sales, distribution costs and administrative
expenses 154,197 238,088
========== ==========
6 EMPLOYEE BENEFIT EXPENSE
Group Group
2012 2011
RMB'000 RMB'000
Wages and salaries - normal 22,808 20,284
Wages and salaries - annual bonus 2,848 6,538
Social security costs and welfare 8,469 9,780
--------- ---------
34,125 36,602
Included in inventories (1,476) (3,572)
32,649 33,030
========= =========
2012 2011
Number Number
The average monthly number of
people employed 707 760
======== ========
7 LISTING COSTS
Win Yu reversing into Qihang was to obtain the listing status. The substance of this transaction is Qihang received approximate RMB3.4 million in placing and incurred approximate RMB6.7 million listing costs. This is an equity-settled share-based payment transaction. Qihang received RMB3.4 million and obtained listing status which does not quality for recognition as an asset. Therefore it has recognised as an expense.
In the parent company standalone financial statements, the listing costs which is incremental costs directly attributable to the placement have been offset against the proceeds arising from the issuance of shares by the company according to IAS 32 - "Financial Instruments". The excess of the incremental cost was charge to income statement.
8 OTHER GAINS/(LOSSES)
Other gains/(losses) include amount of RMB1,289,031 related to the gain arising from the transfer of 25,000,000 ordinary shares and 50,000,000 options to subscribe for ordinary shares in Metroelectric plc to Wonder Employee Capital Limited ("WECL") in full and final settlement of GBP200,000 loan.
Also included in the balance amount of RMB5,824 related to loss arising from sale of investment in mutual fund under the Bank of Communications in PRC.
9 INVESTMENT INCOME
Group Group Company Company
2012 2011 2012 2011
RMB'000 RMB'000 RMB'000 RMB'000
Interest income on short-term
bank deposits 1,091 799 2 92
Interest income on loans to related - 1,133 - -
parties
Interest income on other loans - 867 - -
1,091 2799 2 92
========= ======== ======== ========
10 FINANCE COSTS
Group Group Company Company
2012 2011 2012 2011
RMB'000 RMB'000 RMB'000 RMB'000
Interest on bank borrowings 14,198 11,793 - -
Bank charges 699 1,605 - -
Reversal of interest capitalised 1,043 - - -
Less: amount capitalised for qualifying - (1,119) - -
assets
Interest on other borrowings - 52 - 103
15,940 12,331 - 103
========= ========= ======== ========
11 INCOME TAX (CREDIT)/EXPENSE
2012 2011
RMB'000 RMB'000
Current income tax 155 3,417
Adjustment in respect of prior year (169) (2,761)
--------- ---------
Total tax (credit)/charge (14) 656
--------- ---------
Deferred tax assets (note 26)
Origination and reversal of timing
difference (244) 98
Deferred tax income and expense in (748) -
the current year
--------- ---------
Total deferred tax (992) 98
--------- ---------
Income tax (credit)/expense (1,006) 754
========= =========
Reconciliation at effective tax rates
Profit before tax (15,027) 8,868
========= =========
Tax on profit at the prevailing rate
applicable (3,757) 2,217
Zero tax rate 370 2,859
Preferential tax rate 1,042 (2,278)
Expenses not deductible for tax 1,616 638
Allowance for research and development (232) -
cost
On timing differences (244) 98
Adjustment in respect of prior years (169) (2,761)
Unrelieved tax losses c/f 226 65
Others 142 (84)
(1,006) 754
========= =========
The Company is regarded as resident for tax purposes in Jersey and on the basis that the Company is neither a financial services company nor a utility company for the purposes of the Income Tax (Jersey) Law 1961, as amended; the company is subject to income tax in Jersey at a rate of zero per cent.
Win Yu International Investments Company Limited is regarded as resident for the tax purposes in Hong Kong. There is no tax liability due to losses during the year.
The Group's operating subsidiaries in PRC are subject to income tax rate at 25% (2011: 25%) except certain operating subsidiaries which are entitled to a reduction in tax rate at 15% (2011: 15%) and due to its high technology enterprise status.
12 DISCONTINUED OPERATION
On 6 January 2012, the Group acquired the entire share capital of Zhenjiang Anda Coal Mine Special Equipment Co Ltd ("ZACM"), a manufacturer of coal mining equipment such as drilling machines, pumps, dust catchers, drill pipe and accessories for a cash consideration up to RMB35 million. RMB30 million of the consideration was payable immediately and the balance RMB5 million is payable by 31 March 2013 conditional upon ZACM reporting profit after tax of at least RMB9 million for the year ended 31 December 2012.
ZACM is not capable of meeting its profit target for the year ended 31 December 2012. As a result, the directors have reached agreement with the original vendors to sell ZACM back to them for a consideration of RMB30 million in cash, representing the consideration paid originally. The disposal was completed on 29 November 2012 on which date control of the company passed to the original vendors.
Details of asset and liabilities acquired and disposed of, and the calculation of the profit or loss on acquisition and disposal, are disclosed in note 31.1 and 31.2.
Analysis of loss for the year from discontinued
operation
The results of ZACM included in the consolidated
income statement are set out below:
RMB'000
Profit for the year from discontinued operation
Revenue 35,103
Other income 100
---------
35,203
Expenses (40,818)
---------
Loss before tax (5,615)
Income tax expense (88)
(5,703)
=========
Bargain purchase (note 31.1) 2,324
Gain on disposal (note 31.2) 3,379
---------
5,703
=========
Profit for the year from discontinued operation -
=========
Cash flows from discontinued operation
Net cash inflows from operating activities (33,472)
Net cash inflows from investing activities -
Net cash inflows from financing activities 8,500
---------
Net cash outflows (24,972)
=========
13 EARNINGS PER SHARE
Basic loss per share is calculated by dividing the loss attributable to equity shareholders of the Company by the weighted average number of ordinary shares in issue during the year. There is no dilutive potential ordinary sharein the Company.
For comparative, earnings per share are calculated by dividing the profit attributable to equity shareholders of the Company by the weighted average pre-combination ordinary shares multiplied by exchange ratio established in the acquisition, and the weighted average total actual shares of the parent in issue after the date of acquisition.
2012 2011
(Loss)/earnings RMB RMB
Earnings for the purposes of basic and
diluted earnings per share being net
profit attributable to equity holders
of the parent (14,021,110) 8,113,560
Number of shares
Weighted average number of ordinary shares
for the purposes of basic earnings per
share 58,036,263 48,099,998
=============== =============
14 PROPERTY, PLANT AND EQUIPMENT - Group
Asset Building Plant and Fixtures Motor vehicles Other Total
under construction machinery fittings assets
&
equipment
Cost or valuation RMB'000 RMB'000 RMB'000 RMB'000 RMB'000 RMB'000 RMB'000
At 1 January 2011 153 127,994 70,916 2,890 2,641 1,480 206,074
Adjustment - 3,236 - - - - 3,236
Additions 41,068 1,418 6,370 382 323 - 49,561
Transfers (2,059) 224 1,835 - - - -
Disposal of
subsidiary - - - (125) - - (125)
Disposals - - (264) (1) - - (265)
At 31 December 2011 39,162 132,872 78,857 3,146 2,964 1,480 258,481
Acquisition of
subsidiary - - 2,285 67 903 - 3,255
Additions 19,311 776 1,789 2,587 - - 24,463
Transfers (1,391) - 1,391 - - - -
Refunded on contract
cancelled (19,500) - - - - - (19,500)
Adjustment (1,344) 601 (1) - - - (744)
Disposal of
subsidiary - - (2,472) (76) (903) - (3,451)
Disposal - - (816) - - - (816)
-------------------- --------- ----------- ----------- --------------- -------- ---------
At 31 December 2012 36,238 134,249 81,033 5,724 2,964 1,480 261,688
==================== ========= =========== =========== =============== ======== =========
Accumulated
depreciation
At 1 January 2011 - 7,434 30,776 1,453 1,364 712 41,739
Adjustment - 3,236 - - - - 3,236
Charge for the year - 4,242 5,124 342 380 340 10,428
Charge for the
period -
on revaluation - 1,925 - - - - 1,925
On disposal of
subsidiary - - - (63) - - (63)
Disposals - - (237) (1) - - (238)
-------------------- --------- ----------- ----------- --------------- -------- ---------
At 31 December 2011 - 16,837 35,663 1,731 1,744 1,052 57,027
Charge for the
period - 4,699 5,659 406 534 237 11,535
Charge for the
period -
on revaluation - 1,925 - - - - 1,925
On disposal of
subsidiary - - (215) (14) (169) - (398)
On disposal - - (688) - - - (688)
-------------------- --------- ----------- ----------- --------------- -------- ---------
At 31 December 2012 - 23,461 40,419 2,123 2,109 1,289 69,401
==================== ========= =========== =========== =============== ======== =========
Carrying value
At 31 December 2012 36,238 110,788 40,614 3,601 855 191 192,287
==================== ========= =========== =========== =============== ======== =========
At 31 December 2011 39,162 116,035 43,194 1,415 1,220 428 201,454
==================== ========= =========== =========== =============== ======== =========
PROPERTY, PLANT AND EQUIPMENT - continue
a) Asset under construction
Asset under construction represent the construction of new production line to increase the production capacity.
b) Revaluation of asset
The Group's land use right and buildings were revalued on 15 March 2013 by independent valuers. The revaluation amount are RMB41 million and RMB119 million respectively. The valuation was made on the basis of recent market transactions on arm's length terms and depreciated replacement cost for land and buildings respectively. The Directors considered that the carrying value of the land use right and buildings do not differ materially from that which would be determined using revaluation amount at the end of the reporting period. Therefore carrying amounts are at their approximate fair value.
c) Assets pledged as security
Land use right and buildings with carrying amounts of approximate RMB150 million and certain plant and machinery of the company (value pledged at RMB9 million) have been pledged to secure the borrowings of the Company (see note 24).
Had the Group's land use right and building been measured on a historical cost basis, their carrying amount would have been as follow:
2012 2011
RMB'000 RMB'000
Land use right 12,209 12,494
Buildings 78,069 81,391
========= ========
PROPERTY, PLANT AND EQUIPMENT - Company
Fixtures
fittings
&
equipment
RMB'000
Cost
At 1 January 2011 -
Additions 8
At 31 December 2011 8
Additions -
-----------
At 31 December 2012 8
===========
Accumulated depreciation
At 1 January 2011 -
Charge for the year -
At 31 December 2011 -
Charge for the year 2
-----------
At 31 December 2012 2
===========
Carrying value
At 31 December 2012 6
===========
At 31 December 2011 8
===========
15 INTANGIBLE ASSETS
Land use Purchased Patent Total
right software / know-how
Cost or valuation RMB'000 RMB'000 RMB'000 RMB'000
At 1 January 2011 42,037 258 - 42,295
Adjustment (1,447) - - (1,447)
Additions - 364 3,184 3,548
At 31 December 2011 40,590 622 3,184 44,396
Acquisition of subsidiary - - 9,833 9,833
Additions - 85 - 85
Disposal of subsidiary - - (9,833) (9,833)
--------- ---------- ------------ ---------
At 31 December 2012 40,590 707 3,184 44,481
========= ========== ============ =========
Amortisation
At 1 January 2011 1,460 117 - 1,577
Adjustment (1,447) - - (1,447)
Charge for the year 285 218 212 715
Charge for the year - on revaluation 631 - - 631
--------- ---------- ------------ ---------
At 31 December 2011 929 335 212 1,476
Charge for the year 285 178 819 1,282
Charge for the year - on revaluation 632 - - 632
Disposal of subsidiary - - (500) (500)
--------- ---------- ------------ ---------
At 31 December 2012 1,846 513 531 2,890
========= ========== ============ =========
Carrying value
At 31 December 2012 38,744 194 2,653 41,591
========= ========== ============ =========
At 31 December 2011 39,661 287 2,972 42,920
========= ========== ============ =========
The Company obtained the right to occupy the land at Zhenjiang New Development Area, Dingmao Nanwei Road 2, Zhenjiang Province, PRC for a period of 50 year from June 2005. The remaining period of amortisation is approximate 44.5 years.
Refer to note 14(b) and 14(c) for revaluation of asset and assets pledged as security.
16 INVESTMENTS
Company
2012 2011
RMB'000 RMB'000
At 1 January 130,000 11,577
Additions - 130,000
Disposals - (11,577)
At 31 December 130,000 130,000
========== ==========
In April 2011, the Company disposed of Wonder Packaging Machinery Co. for a total cash consideration of RMB33 million.
RMB'000
Proceeds of disposal 33,000
Less: cost of investment (11,577)
Exchange difference 133
Gains recognised 21,556
=========
On 1 July 2011, The Company acquired the entire issued share capital of Win Yu International Investments Company Limited ("Win Yu"), a company incorporated in Hong Kong with operating subsidiaries in PRC. The total consideration for the acquisition is RMB130 million satisfied by a cash payment of RMB53 million and the issue of 38,325,737 shares in the Company.
Details of the Company's investment in subsidiaries at 31 December 2012 are as follows:
Name of Place of Proportion Principal activities
subsidiary incorporation of ownership
(or registration) interest
and operation %
Win Yu International Investments Hong Kong 100% Holding company
Company Limited
Jiangsu Qihang CNC Machine PRC 100% Manufacture of
Tool Co., Limited** lathes and machinery
tools
** Held by subsidiary company
On 28 October 2011, Heng Tai Feng International Holdings Limited transferred its 30% holding in Jiangsu Qihang CNC Machine Tool Co., Limited to Win Yu International Investments Company for cash consideration of RMB19 million. As a result of this Win Yu International Investments Company Limited owned entire share capital of Jiangsu Qihang CNC Machine Tool Co., Limited.
On 30 October 2011, Win Yu disposed of the entire share capital of Heng Tai Feng International Holdings Limited for a total cash consideration of USD100. This transaction was omitted in previous year's account. The effect on income statement is immaterial (note 31.3) and the earnings per share reported are not affected. Therefore no prior year adjustment is considered necessary.
17 AVAILABLE FOR SALE FINANCIAL ASSET
Group Group Company Company
2012 2011 2012 2011
RMB'000 RMB'000 RMB'000 RMB'000
At 1 January 657 - 657 2,947
On business combination - 2,023 - -
Fair value adjustment - (1,241) - (2,141)
Exchange difference - (125) - (149)
On disposal (657) - (657) -
-------- --------
At 31 December - 657 - 657
======== ======== ========= ========
The above available-for-sale investment was settled by the loan from Wonder Employee Capital Limited ("WECL") on 23 February 2012.
18 DERIVATIVE FINANCIAL INSTRUMENTS
Group Group Company Company
2012 2011 2012 2011
RMB'000 RMB'000 RMB'000 RMB'000
At 1 January - - - 1,963
On business combination - 461 - -
Fair value adjustment - (461) - (1,963)
At 31 December - - - -
========= ======== ========= ========
On 23 February 2012, the company has transferred 50,000,000 options to subscribe for ordinary shares, exercisable at 0.8 pence per share, in Metroelectric plc to WECL in part settlement of the loan of GBP200,000 received by the company from WECL in 2009, see note 24.
19 INVENTORIES
2012 2011
RMB'000 RMB'000
Raw materials and consumables 23,169 33,000
Work in progress 63,211 57,403
Finished goods 11,456 1,861
97,836 92,264
========= =========
The cost of inventories recognised as an expense includes RMB2,945,875 (2011: RMB51,103 write back) in respect of write down of inventories to net realisable value.
20 TRADE AND OTHER RECEIVABLES
Group Group Company Company
2012 2011 2012 2011
RMB'000 RMB'000 RMB'000 RMB'000
Trade receivables - net 13,570 11,652 - -
Notes receivables 27,195 17,435 - -
Other receivables - net 17,775 24,875 260 6
Prepayments and accrued income 4,949 1,167 - -
63,489 55,129 260 6
========= ========= ========= ========
Provision for impairment has been made for estimated irrecoverable amount from the sale of goods and other loans which has been determined by reference to past default experience. It is the Group's policy to made general allowance for doubtful debts on outstanding balances of more than 180 days as at period end.
Movements on the Group provision for impairment of trade receivables are as follows:
2012 2011
RMB'000 RMB'000
At 1 January 183 180
Allowance for the year 198 3
At 31 December 381 183
========= ========
Movements on the Group provision for impairment of other receivables are as follows:
2012 2011
RMB'000 RMB'000
At 1 January 400 2,779
Allowance for the year 1,181 (2,379)
At 31 December 1,581 400
========= ========
At 31 December 2012, the aging analysis of trade receivables is as follows:
2012 2011
RMB'000 RMB'000
Up to 6 months 9,089 11,229
6 - 12 months 4,364 41
1 - 2 years 49 382
Over 2 years 68 -
At 31 December 13,570 11,652
========= =========
Included in other receivables are:
2012 2011
RMB'000 RMB'000
Payments on account to suppliers 8,058 10,116
Payment to be refunded on cancellation of
contract on plant ordered - 10,800
Deposit for guarantee on bank borrowings 6,778 3,571
VAT 1,364 -
Staffs advances and others 1,575 388
17,775 24,875
========= =========
The directors consider that the carrying amount of trade and other receivables approximate their fair value.
21 CASH AND CASH EQUIVALENTS
Group Group Company Company
2012 2011 2012 RMB'000 2011
RMB'000 RMB'000 RMB'000
Cash at bank and on hand 10,841 16,440 2,528 4,235
Short-term bank deposits 15,619 30,720 - -
26,460 47,160 2,528 4,235
========= ========= ============== =========
Bank balances and cash comprise cash held by the Group and short-term bank deposits with an original maturity of six months or less. The carrying amount of these assets approximates their fair value.
22 SHARE CAPITALAND SHARE PREMIUM
2012 2011 2012 2011
GBP'000 GBP'000 RMB'000 RMB'000
Authorised:
200,000,000 ordinary shares of
2.5p each 5,000 5,000 52,343 52,343
======== ======== ======== ========
Pursuant to a special resolution of the company on 1 July 2011 the authorised share capital of theCompany was increased from 65,000,000 shares to 200,000,000 shares.
Issued and fully paid: Number Share Share
of Capital Premium
shares
GBP GBP
At 1 January and 31 December
2010 18,000,000 450,000 1,935,980
Placing on 4 July 2011 1,710,526 42,763 282,237
On 4 July 2011 38,325,737 958,143 6,323,747
Less share issue costs (note
7) - - (282,237)
------------- --------------- ------------
At 31 December 2011 58,036,263 1,450,906 8,259,727
============= =============== ============
RMB'000 RMB'000
At 31 December 2011 and 31 December
2012 15,196 86,711
=============== ============
On 4 July 2011, the Company's shares were re-admitted to AIM market and received GBP325,000 in placing through the issue of 1,710,526 shares at 19p each.
On the same day, the Company issued 38,325,737 shares at 19p each to the vendor of Win Yu as part of the consideration paid for the acquisition of Win Yu Group.
23 OTHER RESERVES
Group Group Company Company
2012 2011 2012 2011
RMB'000 RMB'000 RMB'000 RMB'000
Revaluation reserves 54,712 54,712 - -
Available-for-sale financial
assets - (1,241) - (1,244)
Other reserves 26,318 26,318 - -
Translation reserves - (380) - (378)
Statutory reserves 5,378 5,290 - -
Merger reserves (100,043) (100,043) - -
---------- ---------- -------- --------
(13,635) (15,344) - (1,622)
========== ========== ======== ========
Other reserves
Other reserves represent loans waived by Mr Li Yuanqing, a shareholder and a director of the Company.
Statutory reserves
In accordance with the relevant regulations applicable in the PRC, companies now comprising the Group established in the PRC are required to transfer at least 10% of their statutory annual profits after tax to the statutory reserve until the balance of the reserve reaches 50% of their respective registered share capital. Subject to certain restrictions as set out in the relevant PRC regulations, the statutory reserve may be used to offset against accumulated losses of the respective PRC companies. The amount of the transfer is subject to the approval of the board of directors of the respective companies.
Merger reserves
Merger reserves arose due to capital restructuring of the Group whereby Win Yu Group reversing into Qihang, cash shell as at date of business combination.
24 BORROWINGS
Non-current Group Group Company Company
2012 2011 2012 2011
RMB'000 RMB'000 RMB'000 RMB'000
Loan from a director 42,000 42,000 - -
Loan from WECL - 2,445 - 2,445
Other 2,000 1,000 - -
44,000 45,445 - 2,445
======== ======== ========== ==========
Current Group Group Company Company
2012 2011 2011 2010
RMB'000 RMB'000 RMB'000 RMB'000
Bank borrowings 163,000 186,350 - -
163,000 186,350 - -
======== ======== ========== ==========
Loan from a director represents interest free loan from Mr Li Yuanqing. The loan is repayable after 12 months subject to the Company having sufficient funds to meet the repayments.
The loan from WECL was settled in full on 23 February 2012 by transferring 25,000,000 ordinary shares and 50,000,000 options to subscribe for ordinary shares in Metroelectric plc to WECL.
The bank borrowings are secured by:
- land use right and property of the Group (note 14 and 15);
- land use right and property owned by Zhenjiang Anda Machinery Co Ltd;
- Zhenjiang SME Investments Security Co., Limited;
- Zhenjiang Investments Security Co;
- certain plant and machinery of the company; and
- personal guarantee from Mr Li Yuanqing
Zhenjiang Anda Machinery Co Ltd is the parent company of Zhenjiang Anda Coal Mine Special Equipment Co Ltd (see note 31).
The average interest rate paid is 7.5% (2011: 7.5%) annually. The borrowings are arranged at fixed interest rates and the directors consider that the carrying amount of the borrowings approximate to their fair value.
25 TRADE AND OTHER PAYABLES
Group Group Company Company
2012 2011 2012 2011
RMB'000 RMB'000 RMB'000 RMB'000
Trade payables 53,143 56,913 - -
Notes payables 28,739 21,038 - -
Customer advances 10,001 5,710 - -
Social security and other taxes 279 1,217 - -
Other creditors 21,918 6,086 4,773 2,387
114,080 90,964 4,773 2,387
======== ======== ========== ==========
The directors consider that the carrying amount of trade and other payables approximate to their fair value.
26 DEFERRED INCOME TAX
2012 2011
RMB'000 RMB'000
The analysis of deferred tax assets and deferred
tax liabilities is as follows:
Deferred tax assets
- -
* Deferred tax assets to be recovered after more than
12 months
* Deferred tax assets to be recovered within 12 months (1,448) (456)
-------- --------
(1,448) (456)
-------- --------
Deferred tax liabilities
* Deferred tax liabilities due after more than 12
months 9,655 9,655
- -
* Deferred tax liabilities due within 12 months
-------- --------
9,655 9,655
-------- --------
Deferred tax liabilities (net) 8,207 9,199
======== ========
The movement in deferred income tax assets and liabilities during the year, without taking into consideration the offsetting of balances within the same jurisdiction, is as follow:
Deferred Accelerated Fair Total
income tax depreciation value
and expenses gains
RMB'000 RMB'000 RMB'000 RMB'000
At 1 January 2011 - (554) 9,655 9,101
Credit to income statement - 98 - 98
--------------
At 31 December 2011 - (456) 9,655 9,199
Charge to income statement (748) (244) - (992)
--------------
At 31 December 2012 (748) (700) 9,655 8,207
============== ================== ======== ========
27 NOTES TO THE CASH FLOW STATEMENT
Group Group Company Company
2012 2011 2012 2011
RMB'000 RMB'000 RMB'000 RMB'000
(Loss)/profit before interest
and tax (178) 18,400 (2,053) 14,851
Adjustments for:
Depreciation of property, plant
and equipment 13,460 12,353 2 -
Amortisation of intangibles 1,914 1,346 - -
(Gain)/loss on disposal of plant
and equipment (486) 27 - -
(Gain)/loss on business combination (5,701) 63 - (21,556)
Gain on disposal of financial
instrument (1,289) - (1,289) -
Fair value loss on derivative
financial instrument - 461 - 1,962
Bad debts provisions 1,379 (2,376) - -
Impairment of inventory 2,946 (51) - -
Operating cash flows before movements
in working capital 12,045 30,223 (3,340) (4,743)
Increase in inventory (8,325) (14,006) - -
(Increase)/decrease in trade and
other receivables (19,549) (8,067) (254) 577
Increase/(decrease) in trade and
other payables 3,727 (2,911) 1,885 (2,841)
--------- --------- -------- ---------
Net cash (used in)/generated from
operations (12,102) 5,239 (1,709) (7,007)
Finance costs paid (14,897) (12,331) - (103)
Income tax refunded - 2,761 - -
Income taxes paid (1,315) (2,477) - -
Net cash used in operating activities (28,314) (6,808) (1,709) (7,110)
========= ========= ======== =========
28 CAPITAL COMMITMENTS
2012 2011
RMB'000 RMB'000
Commitments for the construction
of additional production line
(note 14) 50,000 50,000
========= =========
29 GUARANTEE
The Group provided cash guarantees to bank borrowings of RMB12.5 million and RMB27.5 million taken out by Zhenjiang Anda Machine Co Ltd and Zhenjiang Anda Coal Mine Special Equipment Co Ltd respectively. The guarantees on borrowings of RMB12.5 million, RMB4 million , RMB5 million , RMB8.5 million and RMB10 million are expiring on 23 April 2014, 14 November 2013, 20 November 2013, 10 February 2014, and 10 March 2014 respectively.
30 RELATED PARTY TRANSACTIONS
Transactions within the Group have been eliminated in the preparation of the financial information set out in this report and are not disclosed in this note. Balance with other related parties have been disclosed under the relevant notes.
The Group is controlled by Proud Style Limited by virtue of its shareholding, a company owned by Mr Li Yuanqing, a director of the Group.
Key management compensation
Key management includes directors of the company and its subsidiaries. The compensation paid or payable to key management for the employee services is shown on page 5 of the Report of the Directors.
31 BUSINESS COMBINATION 31.1 Acquisition of subsidiary
On 6 January 2012, the Group acquired the entire share capital of Zhenjiang Anda Coal Mine Special Equipment Co Ltd ("ZACM"), a manufacturer of coal mining equipment such as drilling machines, pumps, dust catchers, drill pipe and accessories for a cash consideration up to RMB35 million. RMB30 million of the consideration was payable immediately and the balance RMB5 million is payable by 31 March 2013 conditional upon ZACM reporting profit after tax of at least RMB9 million for the year ended 31 December 2012. In the event that ZACM does not achieve this profit target then the deferred consideration will be reduced proportionally. Details of the acquisition are as follows:
Fair value of assets and liabilities acquired
Book value Fair value Fair
adjustment value
RMB'000 RMB'000 RMB'000
Non-current assets
Property, plant and equipment 2,977 278 3,255
Intangible assets 9,833 - 9,833
Deferred taxation 2,960 - 2,960
Current assets
Inventories 25,869 9,952 35,821
Trade and other receivables 35,252 - 35,252
Cash and cash equivalents 29,849 - 29,849
Current liabilities
Bank borrowings (19,000) - (19,000)
Trade and other payables (65,646) - (65,646)
22,094 10,230 32,324
Bargain purchase 2,324
---------
Fair value of consideration transferred 30,000
=========
Satisfied by:
Cash - paid 21,453
Cash - deferred 8,547
---------
30,000
=========
Net cash inflow arising on acquisition
Cash consideration paid 21,453
Cash and cash equivalent balances acquired 29,849
8,396
=======
31.2 Disposal of subsidiary
ZACM is not capable of meeting its profit target for the year ended 31 December 2012. As a result, the directors have reached agreement with the original vendors to sell ZACM back to them for a consideration of RMB30 million in cash, representing the consideration paid originally. The disposal was completed on 29 November 2012 on which date control of the company passed to the original vendors.
Book value of net assets sold
RMB'000
Non-current assets
Property, plant and equipment 3,053
Intangible assets 9,333
Deferred taxation 2,960
Current assets
Inventories 35,627
Trade and other receivables 45,063
Cash and cash equivalents 4,877
Current liabilities
Bank borrowings (27,500)
Trade and other payables (46,792)
Net assets disposed of 26,621
Cash consideration 30,000
---------
Gain on disposal 3,379
=========
Net cash inflow on disposal
Consideration received 21,452
Cash and cash equivalent balances disposed off 4,877
---------
16,575
=========
31.3 Disposal of subsidiary
On 30 October 2011, Win Yu disposed of the entire share capital of Tai Feng International Holdings Limited for a cash consideration of USD100.
Book value of net assets sold
RMB'000
Current assets
Cash and cash equivalents 3
Current liabilities
Trade and other payables (7)
Net liabilities disposed of 4
Cash consideration 1
--------
Gain on disposal 5
========
Net cash outflow on disposal
Consideration received 1
Cash and cash equivalent balances disposed off 3
--------
2
========
32 FINANCIAL INSTRUMENTS
In common with all other businesses, the Group is exposed to risks that arise from its use of financial instruments. This note describes the Group's objectives, policies and processes for managing those risks and the methods used to measure them.
There have been no substantive changes in the Group's exposure to financial instrument risks, its objectives, policies and processes for managing those risks or the methods used to measure them from previous periods, unless otherwise stated in this note.
Principal financial instruments
The principal financial instruments used by the Group, from which financial instrument risk arises, are as follows:
- Trade and other receivables - Cash and cash equivalents - Trade and other payables - Borrowings
The above are designated as receivables and financial liabilities which are measured at amortised cost.
- Available-for-sale financial assets - Derivative financial instruments
The above are designated as investments and measured at fair value.
General objective, policies and procedures
The Board has overall responsibility for the determination of the Group's risk management objectives and policies and, whilst retaining ultimate responsibility for them, it has delegated the authority for designing and operating processes to executive management.
The overall objective of the Board is to set policies that seek to reduce risk as far as possible without unduly affecting the Group's competitiveness and flexibility. Further details regarding these policies are set out below:
(a) Credit risk
Credit risk arises principally from the Group's trade and other receivables. Cash is placed with creditworthy financial institutions.
The Group controls the credit risk from customers through deposit payments prior to delivery of goods. Trade and other receivables presented in the balance sheet are net of an allowance for doubtful receivables, estimated by management based on current economic conditions. Receivables net of this allowance for doubtful receivables is the Group's maximum exposure to credit risk, being RMB63 million (2011: RMB55 million).
Quantitative disclosures of the credit risk in relation to trade and other receivables are disclosed in note 20.
(b) Liquidity risk
Liquidity risk arises from the Group's management of working capital. It is the risk that the Group will encounter difficulty in meeting its financial obligations as they fall due.
The Group's policy as regards liquidity is to ensure sufficient cash resources are maintained to meet short-term liabilities. The Group has no defaults or breaches on its financial liabilities.
(c) Currency risk
Foreign exchange risk refers to the risk that movement in foreign currency exchange rates against the Group's functional or reporting currency will affect the Group's financial results and cash flows. The Group has transaction currency exposures. Such exposure arises from sales by an operating unit in currencies other than its functional currency.
During the period under review the Group has no export sales, therefore, no foreign currency sales. The Group's policy, as it relates to currency risk, is to limit payment terms to immediate letters of credit or prepayment before transporting goods to customers.
If the exchange rate on uncovered exposures were to move significantly between the year end and date of payment or receipt, there could be an impact on the Group's net income. As such, financial assets and liabilities are short term in nature; this risk is not considered to be substantial.
Foreign exchange risk has not been considered to be material in either the current or preceding period.
(d) Interest rate risk
Interest rate risk arises from the potential changes in interest rates that may have an adverse effect on the Group in the current reporting period and in future years.
The Group is exposed to interest rate risk because entities in the Group borrow fund at both fixed and floating interest rates. The risk is managed by the Group by maintaining as appropriate mix between fixed and floating rate borrowings.
Interest rate sensitivity analysis
The sensitivity analyses below have been determined based on the exposure to interest rate for bank borrowings at the end of the reporting period. The analysis is prepared assuming the amount of the liability outstanding at the end of the reporting period was outstanding for the whole year. A 50 basis point increase or decrease is used when reporting interest rate risk internally to key management personnel and represents management's assessment of the reasonable possible change in interest rates.
If interest rate had been 50 basis points higher/lower and all other variables were held constant, the Group's loss for the year ended 31 December 2012 would increase/decrease by RMB968,000.
(e) Capital
The Group considers its capital to comprise its ordinary share capital, share premium and retained earnings. In managing its capital, the Group's primary objective is to ensure its continued ability to provide a consistent return for its equity shareholders through a combination of capital growth and distributions. The Group has historically considered a mix of debt and equity funding as the most appropriate form of capital for the Group.
33 ADDITIONAL FINANCIAL INFORMATION
Details of the financial information of Win Yu Group are as follow:
Income statement
2012 2011
RMB'000 RMB'000
Revenue 151,503 262,107
Cost of sales (111,268) (189,903)
---------- ----------
Gross profit 40,235 72,204
Other operating income 797 1,597
Distribution expenses (9,458) (18,024)
Administrative expenses (30,127) (25,893)
----------
Profit from operation 1,447 29,884
Non-operating income net
of expenses 206 5
Other gains and losses (6) -
Profit/(loss) on disposal
of subsidiaries 5 (63)
Income from subsidies 224 50
Investment income 1,090 2,707
Finance costs (15,940) (12,279)
---------- ----------
(Loss)/profit before taxation (12,974) 20,304
Income tax credit/(expense) 1,006 (754)
---------- ----------
(Loss)/profit for the year (11,968) 19,550
========== ==========
Statement of financial position
2012 2011
RMB'000 RMB'000
Non-current assets
Property, plant and equipment 192,281 201,446
Intangible assets 41,591 42,920
Deferred tax asset 1,448 456
--------- --------
235,320 244,822
--------- --------
Current assets
Inventories 97,836 92,264
Trade and other receivables 65,360 55,728
Available-for-sale-financial asset - 100
Cash and cash equivalents 23,933 42,925
--------- --------
187,129 191,017
--------- --------
Total assets 422,449 435,839
========= ========
Equity and reserves
Share capital 8 8
Revaluation reserves 54,712 54,712
Other reserves 26,318 26,318
Statutory reserves 5,378 5,290
Retained earnings 7,896 19,952
--------- --------
94,312 106,280
--------- --------
Current liabilities
Bank borrowings 163,000 186,350
Income tax liabilities 42 1,371
Trade and other payables 111,440 89,183
--------- --------
274,482 276,904
--------- --------
Non-current liabilities
Other borrowings 44,000 43,000
Deferred tax liabilities 9,655 9,655
--------- --------
53,655 52,655
--------- --------
Total liabilities 328,137 329,559
========= ========
Total equity and liabilities 422,449 435,839
========= ========
Profit reconciliation
RMB'000 RMB'000
Win Yu Group (loss)/profit (11,968) 19,550
Qihang loss for the period from date of business
combination (2,053) (5,111)
Adjustment to listing cost due to capital restructuring - (6,325)
--------- --------
Qihang Group (loss)/profit (14,021) 8,114
========= ========
This information is provided by RNS
The company news service from the London Stock Exchange
END
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