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| Share Name | Share Symbol | Market | Type | Share ISIN | Share Description |
|---|---|---|---|---|---|
| Rare Earth | LSE:REG | London | Ordinary Share | KYG7386L1059 | ORD USD0.001 (DI) |
| Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
|---|---|---|---|---|---|---|---|---|---|---|
| 0.00 | 0.00% | 38.00 | 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
TIDMREG
RNS Number : 9222O
Rare Earths Global Limited
26 September 2013
26 September 2013
Rare Earths Global Limited
("REG" or the "Company")
Interim Results
For the period ended 30 June 2013
Rare Earths Global Limited (AIM: REG), a leading mining services group focused on the extraction, separation, refinement and trading of rare earth elements, oxides and other related products, is pleased to announce its interim results for the period ended 30 June 2013.
Highlights
- Production on hold with revenue limited to RMB0.24million (H1 2012: RMB52.8million ); - Net loss RMB3.4million (H1 2012: 29.4million) - Significant slowdown in the Chinese rare earth market due to the impact of new legislation; - No production / export quota granted for 2013 but expected in late 2013/early 2014.
Commenting on the results, Simon Ong, Chief Executive of REG said, "Trading for H1 2013 was exceptionally difficult as increased regulation by the Chinese Government has restricted production and created much uncertainty among all market participants. The Board's prime focus is now to consider a number of options to help secure the appropriate production licences and quotas as soon as possible so we might return to normal trading."
* All amounts are in RMB unless otherwise stated
- Ends -
For further information:
Hot Features
Premium
Rare Earths Global Limited
Simon Ong, Chief Executive Tel: +86 755 8633
Officer 6388
Brian Ho, Finance Director www.rareearthsglobal.com
Charles Stanley Securities
Nominated Adviser & Broker
Dugald J. Carlean / Carl Tel: +44 (0) 20
Holmes 7149 6000
www.csysecurities.com
Business Review
Trading in the rare earth industry in China continues to be extremely difficult. As set out in the statement of our Annual Results announced on 1 July 2013, the Board appointed consultants to work with local and national government in order to secure ongoing production quota's and provide guidance on the Ministry of Industry and Information Technology ("MIIT") requirements. We further announced that this would result in a material reduction in revenues as the Sanxie plant would cease production. As expected, our revenues are materially down as the rare earth industry in China has slowed considerably whilst the Chinese Government begins to implement its White Paper on Rare Earth and follow up on statements made by MIIT. Furthermore, as previously announced, in August 2012 the MIIT released a statement which recommended that mixed rare earth mines in China will have to produce a minimum of 20,000 metric tonnes a year and smelters will have to ensure annual output of 2,000 tonnes. In doing this the Chinese Government is seeking to limit the number of market participants, prevent illegal smuggling and help underpin falling rare earth prices.The Companies rare earth smelting and separation plant has a maximum production capacity of circa 800 tonnes and therefore does not met these new criteria. In addition to the above, the new Chinese Government took office in April creating even more uncertainty among market participants as they await the appointment of the officials responsible for the rare earth industry and ultimately what their policy will entail.
The Board continues to focus on securing compliance with the White Paper (i.e. increase production capacity at Sanxie to 3,000 tonnes+). In achieving this, as mentioned above, we have employed third party consultants to assist expedite securing production and export quotas for the separation plant at Sanxie In addition the Board continue their dialogue with state owned businesses and Chinese nationals who are well placed within the mining and resources industry to assist the Board in achieving this strategy. The Board also continues to monitor the international landscape as aggressive pricing presents corporate opportunities in the global rare earth market. We hope to update shareholders on our progress with these discussions in due course.
Separation & Smelting
As further explained in our Annual Results and above, it has become increasingly difficult to secure meaningful production quotas in the rare earth industry in China. There continue to be delays from the Government in providing production quotas for a number of separation and smelting plants including REG despite our plant at Sanxie being fully operational and all relevant documentation having been filed with the authorities. As the production quota has still yet to be granted for 2013 this has meant that although the plant is operational no production is taking place as we await the regulatory approval which is expected in late 2013/early 2014.
Mining Services and Trading Divisions
As a result of the above many of the operating rare earth mines in China have ceased production until official quota's have been released. This has meant that although the Company's mining services division retains its agreements with its ongoing partners these have been put on hold as many asset owners are experiencing similar issues to the Company in achieving production quota's. In addition, as no export quota has been granted in 2013 the Company has been unable to make use of its trading licence during the period under review.
Outlook
In the short term the Company has no option but to continue to aggressively pursue its objectives in the methods as set out above and whilst managing its cost base as prudently as possible. The second half of 2013 will see trading on the same level as the first half until production quotas and licences are secured. The Board remain optimistic for the long term outlook for the rare earth industry, especially for heavy rare earths, as demand continues to rise both in China and internationally. We look forward to updating shareholders on our progress in securing the relevant licences and quota's and any third party agreements in due course.
Financial Review
Revenues for the six months ended 30 June 2013 were RMB0.24 million, as compared to RMB52.8 million for the six months ended 30 June 2012, reflecting a decrease of 99.5%. Gross losses amounted to RMB1.02 million (H1 2012: gross profit of RMB11.3 million). The decrease reflected the deteriorating operating environment in the rare earth industry as outlined above. Net loss for the six months ended 30 June 2013 improved 88.3% to RMB3.4 million (H1 2012: Net loss of RMB29.4 million).
Total operating expenses for the six months ended 30 June 2013 decreased to RMB8.7 million (H1 2012: RMB36 million). Administrative expenses decreased to RMB3.9 million as compared to RMB12.1million for the period ended 30 June 2012. Share based payment expenses were RMB4.7million for current period as compared to RMB23.1 million for the same comparative period last year.
In period under review, Mr. Tong Man Tak, a shareholder of the Company granted an extension to the interest- free amount due to him to 31 March 2015. As a result of the modification of the agreement, RMB7.2million was recoginsed as interest income for the period ended 30 June 2013.
Decrease in the Company's net basic and diluted losses per share for the six months ended 30 June 2013 of RMB5.1 cents as compared to RMB49 cents basic and diluted losses per share for the six months ended 30 June 2012.
On behalf of the Board of Directors
Simon Ong, Chief Executive Officer
26 September 2013
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
FOR THE SIX MONTHS ENDED 30 JUNE 2013
Six months Six months
ended ended
NOTES 30-Jun-13 30-Jun-12
RMB RMB
(unaudited) (unaudited)
Revenue 4 247,573 52,883,571
Cost of sales (1,277,121) (41,520,165)
------------- --------------
Gross (loss)/profit (1,029,548) 11,363,406
Other operating income 10,115,718 332,044
Selling and distribution
costs - (735,614)
Administrative expenses (3,966,580) (12,173,136)
Share based payment
expenses (4,767,408) (23,117,745)
Finance costs (4,101,109) (3,383,487)
------------- --------------
Loss before tax (3,748,927) (27,698,787)
Income tax credit/(expense) 5 311,482 (1,724,541)
------------- --------------
Loss for the period (3,437,445) (29,423,328)
------------- --------------
Other comprehensive
expense
Exchange differences
arising on translation (1,016,750) -
------------- --------------
Total comprehensive
expense for the period (4,454,195) (29,423,328)
Loss for the period
attributable to:
Equity holders of the
Company (3,428,101) (30,524,207)
Non-controlling interests (9,344) 1,100,879
------------- --------------
(3,437,445) (29,423,328)
------------- --------------
Loss and total comprehensive
expenses
for the period attributable
to:
Equity holders of the
Company (4,444,851) (30,524,207)
Non-controlling interests (9,344) 1,100,879
(4,454,195) (29,423,328)
------------- --------------
LOSSES PER SHARE
RMB 5.1
- BASIC AND DILUTED 7 cents RMB 49 cents
------------- --------------
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
AT 30 JUNE 2013
As at 30 As at 31
NOTES Jun-13 Dec-12
RMB RMB
(unaudited) (audited)
Non-current Assets
Property, plant and
equipment 9 19,781,439 21,438,148
Prepaid lease payments 3,416,610 3,456,770
Deposit paid for acquisition
of
property, plant and
equipment 11,200,000 11,000,000
------------- -------------
Total non-current assets 34,398,049 35,894,918
Current Assets
Inventories 50,247,109 47,477,468
Prepaid lease payments 80,320 80,320
Trade and other receivables
and prepayments 8 65,932,154 73,504,836
Bank balances and cash 931,292 8,400,314
------------- -------------
Total current assets 117,190,875 129,462,938
Total assets 151,588,924 165,357,856
------------- -------------
Capital and Reserves
Share capital 12 426,985 426,985
Reserves (39,522,390) (39,844,947)
------------- -------------
Equity attributable
to owners of the Company (39,095,405) (39,417,962)
Non-controlling interests 703,600 712,944
------------- -------------
Total Deficit (38,391,805) (38,705,018)
Non-current Liabilities
Deferred taxation liabilities 2,576,810 2,888,292
Amount due to related
parties 11 158,607,747 100,074,846
------------- -------------
Total non-current liabilities 161,184,557 102,963,138
Current Liabilities
Trade and other payables
and accruals 10 13,785,850 22,231,758
Amounts due to related
parties 11 6,875,747 68,071,568
Bank borrowing 7,000,000 8,450,000
Taxation payable 1,134,575 2,346,410
------------- -------------
28,796,172 101,099,736
Total Equity and liabilities 151,588,924 165,357,856
------------- -------------
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
FOR THE SIX MONTHS ENDED 30 JUNE 2013
Attributable to equity holders of the Company
Share Non-
Share options Other Accumulated Translation controlling
Share
capital premium reserves reserves losses reserves Sub-total interests Total
RMB RMB RMB RMB RMB RMB RMB RMB RMB
At 1
January
2013
(audited) 426,985 134,513,713 27,824,313 (60,727,845) (141,365,470) (89,658) (39,417,962) 712,944 (38,705,018)
-------- ------------ ----------- ------------- -------------- ------------ -------------- ------------ -------------
Loss
for
the
period - - 4,767,408 - (3,428,101) - 1,339,307 (9,344) 1,329,963
Other
comprehensive
expense - - - - - (1,016,750) (1,016,750) - (1,016,750)
-------- ------------ ----------- ------------- -------------- ------------ -------------- ------------ -------------
Total
comprehensive
expense
for
the
period - - 4,767,408 - (3,428,101) (1,016,750) 322,557 (9,344) 313,213
-------- ------------ ----------- ------------- -------------- ------------ -------------- ------------ -------------
At 30
June
2013
(unaudited) 426,985 134,513,713 32,591,721 (60,727,845) (144,793,571) (1,106,408) (39,095,405) 703,600 (38,391,805)
-------- ------------ ----------- ------------- -------------- ------------ -------------- ------------ -------------
Attributable to equity holders of the Company
Share
Share Share options Other Retained Non-controlling
profits
capital Premium reserves reserves (loss) Sub-total interests Total
RMB RMB RMB RMB RMB RMB RMB RMB
At 1 January
2012 (audited) 29,500,430 - - 12,399,000 26,854,111 68,753,541 35,089,922 103,843,463
------------- ----------- ----------- ----------- ------------- ------------- ---------------- -------------
Issuance
of shares 401,517 63,362,134 - - - 63,763,651 - 63,763,651
Arising
on the
Reorganization (29,500,430) - - 29,115,296 - (385,134) - (385,134)
Recognition
of
equity-settled
share based
payments - - 23,117,745 - - 23,117,745 - 23,117,745
Profit and
total
comprehensive
income for
the period - - - - (30,524,207) (30,524,207) 1,110,879 (29,423,328)
------------- ----------- ----------- ----------- ------------- ------------- ---------------- -------------
At 30 June,
2012
(unaudited) 401,517 63,362,134 23,117,745 41,514,296 (3,670,096) 124,725,596 36,190,801 160,916,397
------------- ----------- ----------- ----------- ------------- ------------- ---------------- -------------
CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE SIX MONTHS ENDED 30 JUNE 2013
Six months Six months
ended ended
30-Jun-13 30-Jun-12
RMB RMB
(unaudited) (unaudited)
OPERATING ACTIVITIES
Losses before tax (3,748,927) (27,698,787)
Adjustments for:
Depreciation of property,
plant and equipment 1,898,432 2,059,504
Amortisation of prepaid
lease payments 40,160 40,160
Amortisation of other intangible
assets - 717,078
Share based payment expenses 4,767,408 23,117,745
Finance costs recognised
in profit and loss 4,101,109 3,383,487
Interest income (7,272,306) (24,068)
Loss on disposal of property,
plant and equipment - 410,580
------------ -------------
Operating cash flows before
movements in working capital (214,124) 2,005,699
Increase in inventories (2,769,641) (1,937,396)
Decrease/(increase) in trade
and other receivables and
prepayments 7,472,283 (34,806,982)
Decrease in trade and other
payables and accruals (8,445,908) (10,033,271)
------------ -------------
Cash used in operations (3,957,390) (44,771,950)
Interest received 591 24,068
Income tax paid (1,211,835) (3,398,382)
------------ -------------
NET CASH USED IN OPERATING
ACTIVITIES (5,168,634) (48,416,264)
INVESTING ACTIVITIES
Purchase of property, plant
and equipment (241,723) (167,656)
Deposit paid for acquisition
of property, plant and equipment (200,000) -
------------ -------------
NET CASH USED IN INVESTING
ACTIVITIES (441,723) (167,656)
FINANCING ACTIVITY
Repayment of bank borrowing (1,500,000) (375,000)
Interest paid (274,603) (1,722,088)
Advance from (repayment to)
related parties 78,004 (30,405,423)
------------ -------------
NET CASH USED IN FINANCING
ACTIVITY 1,696,599 30,876,006
NET DECREASE IN CASH AND
CASH EQUIVALENTS (7,306,956) (17,473,914)
CASH AND CASH EQUIVALENTS
AT 1 JANUARY 8,400,314 23,892,468
Effect of foreign exchange
rate changes (162,066) -
------------ -------------
CASH AND CASH EQUIVALENTS
AT 30 JUNE
represented by bank balances
and cash 931,292 6,454,554
------------ -------------
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
For the SIX months ended 30 JUNE 2013
1. GENERAL INFORMATION
Rare Earths Global Limited (the "Company") is an exempted company incorporated in the Cayman Islands with limited liability on 8 February 2012. The Company's registered address is Cricket Square, Hutchins Drive, P.O. Box 2681, Grand Cayman KY1-1111, Cayman Island. The Company's shares were traded on the AIM Market of the London Stock Exchange Plc.
The Company together with its subsidiaries (collectively referred to as the "Group") is principally engaged in the production, separation and refining of rare earth products and provisions of mining management services.
This condensed consolidated interim financial information has not been audited.
2. THE REORGANISATION AND BASIS OF PREPARATION
The reorganisation
Rare Earths Global Limited (the "Company") was incorporated in the Cayman Islands on 8 February 2012. In preparation for the listing of the Company's shares on the London Stock Exchange's market for smaller and growing companies ("AIM") in March 2012, the Group executed the following restructuring transaction (the "Restructuring"). The Company became the holding company of Dressport Limited ("Dressport") and its subsidiaries pursuant to a share exchange agreement relating to the sale and purchase of shares in Dressport dated 7 March 2012 (the "Share Exchange Agreement"). The Company acquired the entire equity interest in Dressport from its shareholders by means of share exchange whereby 60,994,790 ordinary shares of the Company were issued to the shareholders of Dressport, at par credited as fully paid, in exchange for all the outstanding ordinary shares (50,829) of Dressport. The share exchange was conducted with a ratio of 1,200 shares of the Company to one share of Dressport on a pro-rata basis. Thereafter, the Company has become the holding company of Dressport and its subsidiaries.
The consolidated financial statements of the Group have been prepared using the principles of the merger accounting involving Dressport and its subsidiaries, as if the group structure under the Restructuring have been in existence since their respective dates of incorporation.
The shares of the Company were listed on AIM with effect from 30 March 2012.
Basis of Preparation
This interim report, which incorporates the financial information of the Company has been prepared on the historical cost basis except for certain financial instruments that are measured at fair values, as appropriate; using accounting policies which are consistent with those set out in the Company's consolidated financial statement for the year ended 31 December 2012 except for adoption of new standards and interpretations effective 1 January 2013 as described in note 3 below
The unaudited condensed consolidated financial statements are presented on a condensed basis as permitted by IAS 34 'Interim Financial Reporting' and therefore do not include all disclosures that would otherwise be required in a full set of financial statements and should be read in conjunction with the 2012 annual consolidated financial statements .
This interim financial information for the six months ended 30 June 2013, was prepared in accordance with IAS 34 and thereby International Financial Reporting Standards ("IFRS"), as issued by the International Accounting Standards Board ("IASB"); and was approved by the Board of Directors on 25 September 2013.
3. IMPACT OF NEW AND REVISED INTERNATIONAL FINANCIAL REPORTING STANDARDS
IFRS 1 Amendments Amendments to IFRS 1 First-time
adoption of International
Financial Reporting Standards
- Government Loans
IFRS 7 Amendments Amendments to IFRS 7 Financial
Instruments: Disclosures
- Offsetting Financial
Assets and Financial Liabilities
IFRS 10 Consolidated Financial
Statements
IFRS 11 Joint Arrangements
IFRS 12 Disclosure of Interests
in Other Entities
IFRS 10, IFRS 11 and Amendments to IFRS 10,
IFRS 12 Amendments IFRS 11 and IFRS 12 - Transition
Guidance
IFRS 13 Fair Value Measurement
IAS 1 Amendments Amendments to IAS 1 Presentation
of Financial Statements
- Presentation of Items
of Other Comprehensive
Income
IAS 19 (2011) Employee Benefits
IAS 27 (2011) Separate Financial Statements
IAS 28 (2011) Investments in Associates
and Joint Ventures
IFRIC-Int 20 Stripping Costs in the
Production Phase of a Surface
Mine
Improvements to IFRSs Amendments to a number
2009-2011 Cycle of IFRSs issued in June
2012
The adoption of these new and revised IFRSs had no significant financial effect on the interim result of the Group.
4. REVENUE AND SEGMENT INFORMATION
IFRS 8 requires operating segments to be identified on the basis of internal reports about components of the Group that are regularly reviewed by the Chief Operating Decision Maker ("CODM") of the Group to allocate resources to the segments to assess their performance.
The Group determines its operating segments based on the report reviewed by the directors of the Group, who are also the CODM, to make strategic decisions.
Information reported to the Group's CODM for the purposes of resource allocation and performance assessment focuses specifically on the separation and sales rare earth products, the mining management services, and the trading of rare earth products. Accordingly, the Group categorizes its business into three operating segments, namely (i) separation and sales of rare earth products; (ii) mining management services; and (iii) trading of rare earth product
Separation of rare earth products - production and sales of rare earth products .
Mining management services - provides mining management servicesand technical supportto PRC rare earth mining companies and factories in the PRC.
Trading of rare earths products - trading of rare earth products in the PRC and overseas.
The Group's CODM make decisions according to the operating results of each segment.
Information of segment assets and liabilities is not part of the regular reports provided to the Group's CODM for the purpose of resources allocation and performance assessment. Accordingly, only segment results are presented.
Segment result represents the gross profit earned by each segment based on internal management reports prepared in accordance with accounting policies similar to the accounting rules and financial regulations applicable to enterprises in the PRC, without allocation of other income, changes in fair values of financial assets at fair value through profit or loss, selling and distribution costs, administrative expenses and finance costs. This is the measure reported to the chief operating decision makers for the purposes of resource allocation and assessment of segment performance.
For the six months ended 30 June 2013
Separation Mining
and Management
Sales service Trading Aggregated
RMB RMB RMB RMB
(Unaudited) (Unaudited) (Unaudited) (Unaudited)
Segment
revenue - 247,573 - 247,573
Segment
result - 206,272 - 206,272
------------- ------------ ------------ ------------
For the six months ended 30 June 2012
Separation Mining
and Management
Sales service Trading Aggregated
RMB RMB RMB RMB
(Unaudited) (Unaudited) (Unaudited) (Unaudited)
Segment
revenue 36,745,468 4,962,500 11,175,603 52,883,571
Segment
result 8,594,256 2,300,217 1,704,753 12,599,226
------------ ------------ ------------ ------------
For the six months ended 30 June 2013
Reconciliation of segment revenue and segment results of the Group
Consolidated
RMB
(unaudited)
Total segment and
group revenue 247,573
Total segment results: 206,272
Reconciliation:
Adjustment for
depreciation (1,235,820)
-------------
Total Group gross
losses (1,029,548)
Other operating
income 10,115,718
Administrative expenses (3,966,580)
Share based payment
expenses (4,767,408)
Finance cost (4,101,109)
-------------
Loss before taxation (3,748,927)
-------------
Other segment information
Separation Mining
and Management Segment Group
Sales service Trading total Unallocated total
RMB RMB RMB RMB RMB RMB
(Unaudited) (Unaudited) (Unaudited) (Unaudited) (Unaudited) (Unaudited)
Amount included
in the measure
of segment
result
Depreciation
of property,
plant and
equipment 570,040 92,572 - 662,612 1,235,820 1,898,432
For the six months ended 30 June 2012
Consolidated
RMB
(unaudited)
Total segment and
group revenue 52,883,571
Total segment results: 12,599,226
Reconciliation:
Adjustment for
depreciation (1,235,820)
-------------
Total Group gross
profit 11,363,406
Other operating
income 332,044
Selling and distribution
costs (717,079)
Administrative expenses (12,173,136)
Share based payment
expenses (23,117,745)
Finance cost (3,383,487)
-------------
Profit before taxation 27,698,787
-------------
Other segment information
Mining
Separation
and Management Segment Group
Sales service Trading total Unallocated total
RMB RMB RMB RMB RMB RMB
(Unaudited) (Unaudited) (Unaudited) (Unaudited) (Unaudited) (Unaudited)
Amount included
in the measure of
segment result
Depreciation of
property, plant
and equipment 772,211 43,947 - 816,158 1,243,346 2,059,504
5. INCOME TAX EXPENSE
Six months Six months
ended ended
30-Jun-13 30-Jun-12
RMB RMB
(unaudited) (unaudited)
Current tax:
PRC Enterprise Income
Tax ("EIT") - (1,965,346)
Deferred tax 311,482 240,805
311,482 (1,724,541)
------------ ------------
The provision for PRC current income tax is based on a statutory rate of 25% (six months ended 30 June 2012: 25%) of the assessable profit of the entities comprising the Group as determined in accordance with the relevant income tax rules and regulations of the PRC.
6. DIVIDENDS
No dividend was paid or proposed during the period presented, nor has any dividend has been proposed since the end of the reporting period.
7. EARNINGS PER SHARE
The calculation of the basic and diluted earnings per share attributable to the owners of the Company is based on the following data:
Six months Six months
ended ended
30-Jun-13 30-Jun-12
RMB RMB
(unaudited) (unaudited)
Earnings
Losses for the period attributable
to
owners of the Company (4,337,066) (30,524,207)
Number of shares
Weighted average number
of ordinary shares for the
purpose
of calculating losses per
share 67,587,681 62,291,236
At the end of the period, the Company had in issue 2,861,442 (2012: 2,861,442) share options which have not been included in the calculation of the diluted loss per share because their effects are anti-dilutive although these share options could be dilutive in the future.
8. TRADE AND OTHER RECEIVABLES AND PREPAYMENTS
At 30 June
2013 At 31 Dec-12
RMB RMB
(unaudited) (audited)
Trade receivables 7,203,095 19,617,631
------------ -------------
Prepayments to suppliers 54,840,719 52,281,522
Other receivables (note) 3,888,340 605,683
------------ -------------
58,729,059 53,887,205
------------ -------------
65,932,154 73,504,836
------------ -------------
Note: In April 2012, Huangshan (Quansheng) Mineral Products Sales Co., Ltd ("Quansheng"), a subsidiary of the Company, entered into a contract with an inventory supplier to purchase mineral products with a fixed quantities, prices and types of goods for an aggregated amount of RMB 40,000,000, of which prepayment with the gross amount of RMB 20,000,000 was paid. On 25 April 2013, Quansheng and the supplier entered into a supplemental agreement, under which the quantities and units of mineral products were re-negotiated for lower fixed prices and the total purchase amount was changed to RMB 17,000,000. As of the date of this report, the supplier returned RMB 1,000,000 to Quansheng. Another RMB 2,000,000 is past due. The Group management is closely monitoring the situation and considers the past due amounts are collectable. The Company made no provision on the contract (2012: RMB3,895,000) in current period.
The Group allows an average credit period of 60 days to its trade customers. The following is an aged analysis of trade receivables presented based on the invoice dates at the end of the reporting period, which approximated the respective revenue recognition dates:
At 30 June
2013 At 31 Dec-12
RMB RMB
(unaudited) (audited)
0 - 60 days - 5,244,816
61-120 days - 11,169,797
Over 120 days 7,203,095 3,203,018
7,203,095 19,617,631
------------ -------------
9. MOVEMENTS IN PROPERTY, PLANT AND EQUIPMENT
During the six months ended 30 June 2013, the Group spent approximately RMB241,723 on acquisition of property, plant and equipment in order to upgrade its operating capacities.
10. TRADE AND OTHER PAYABLES AND ACCRUALS
At 30 June
2013 At 31 Dec-12
RMB RMB
(unaudited) (audited)
Trade payables 8,227,722 14,487,951
Advance from customers - -
Other payable and accruals 5,558,128 7,743,807
13,785,850 22,231,758
------------ -------------
In general, the Group is required to make full advance payments to suppliers for the purchases of its major raw materials, rare earth. Suppliers of raw materials other than rare earth generally allow the Group a credit period of 60 to 90 days.
11. AMOUNTS DUE FROM/TO RELATED PARTIES
At 30 June
2013 At 31 Dec-12
RMB RMB
(unaudited) (audited)
Purchase consideration
of Sanxie due to a non-controlling
shareholder of Long Era,
Mr. Tong:
- within one year - 66,104,358
- within the second to
fifth years 55,699,256 -
-------------- --------------
55,699,256 66,104,358
Other amounts due to:
- a director and controlling
shareholder of the Company,
Mr.Ong 109,784,238 102,042,056
-------------- --------------
Total 165,483,494 168,146,414
Less: amount due within
the second to fifth years (158,607,747) (100,074,846)
-------------- --------------
Amount due within one year 6,875,747 68,071,568
-------------- --------------
12. SHARE CAPITAL OF THE COMPANY
The balance at 1 January 2012 represented the amount of share capital of Dressport contributed by its equity holders. The share capital of Dressport does not have any par value.
The balance at 30 June 2013 represented the issued and fully paid capital of the Company.
Number of Share
shares capital
US$
Authorised:
Ordinary shares of US$0.01
each at date of incorporation 10,000,000 100,000
Shares subdivision in the period
(note (b)) 990,000,000 -
-------------- --------
Ordinary shares of US$0.001
each as at
30 June 2012, 31 December 2012
and 30 June 2013 1,000,000,000 100,000
-------------- --------
Issued and fully paid:
Ordinary shares of US$0.01
each at date of incorporation
(note (a)) 1 0.01
Repurchase of share (note (c)) (1) (0.01)
Issue of shares on 7 March
2012 (note (d)) 60,994,790 60,995
Issue of shares on by placing
(note (e)) 2,592,891 2,593
-------------- --------
Ordinary shares of US$0.001
each at 30 June 2012 63,587,681 63,588
Issue of shares on 14 July
2012 (note (f)) 4,000,000 4,000
-------------- --------
Ordinary shares of US$0.001
each as at 31 December 2012
and 30 June 2013 67,587,681 67,588
============== ========
RMB
Presented as RMB
Ordinary shares of US$0.001
each as at 30 June 2012 63,587,681 401,517
Ordinary shares of US$0.001
each as at 31 December 2012
And 30 June 2013 67,587,681 426,985
============== ========
Notes:
(a) Upon incorporation, the authorised capital of the Company was US$100,000 divided into 10,000,000 ordinary shares of US$0.01 each, of which one subscriber share was allotted and issued at par to Citywell Group Limited, a company wholly owned by Mr. Ong.
(b) Pursuant to an ordinary resolution passed by the sole member of the Company on 20 February 2012, each of the authorised and issued shares of the Company were subdivided into 10 shares of US$0.001 each.
(c) On 7 March 2012, the Company repurchased all issued share capital for a consideration of US$0.01.
(d) Pursuant to a share exchange agreement dated 7 March 2012, the Company acquired the entire equity interest in Dressport from its shareholders by means of share exchange whereby 60,994,790 ordinary shares of the Company were issued to the shareholders of Dressport at par credited as fully paid, in exchange for all the outstanding ordinary shares of Dressport.
(e) On 29 March 2012, 2,592,891 ordinary shares of US$0.001 each were issued at a price of GBP247 pence per share under the placement on AIM, 2,541,448 of these shares were issued to three individual investors and the rest to other public investors. The proceeds of GBP1,625 (equivalent to US$2,587 and RMB16,372) representing the par value, were credited to the Company's share capital. The remaining proceeds of GBP6,278,650 (equivalent to RMB63,420,959), after the issuing expenses, were credited to the share premium account. The new shares rank pari passu with the existing shares in all respect.
(f) On 14 July 2012, 4,000,000 ordinary shares of US$0.001 each were issued as part of the consideration for the acquisition of the remaining 39% equity interest in Sanxie. The par value of US$4,000 (equivalent to RMB25,480) was credited to the Company's share capital. The new shares rank pari passu with the existing shares in all respect.
There were no movements in share capital during the six months period ended 30 June 2013.
13. RELATED PARTY DISCLOSURES
(a) Except for transactions and balances disclosed elsewhere in the condensed consolidated financial statements, the Group has no other significant transactions and balances with its related parties during the six months ended 30 June 2013.
(b) During the period, the Group granted share options of nil (30 June 2012: 2,861,462) to Directors and advisors of the Group with exercise price of GBP 247 pence.
(c) Compensation of key management personnel of the Group
Six months Six months
ended ended
30-Jun-13 30-Jun-12
RMB RMB
(unaudited) (unaudited)
Salaries and fee (include
retirement benefit scheme
contributions) 769,027 372,230
Equity settled share option
expense 4,767,408 1,587,397
------------ ------------
5,536,435 1,959,627
------------ ------------
14. CAPITAL COMMITMENTS
At 30 June
2013 At 31 Dec-12
RMB RMB
(unaudited) (unaudited)
Capital expenditure in respect
of property, Plant and equipment
contracted for but not provided
in the consolidated financial
statements 3,558,400 3,758,400
------------ -------------
15. EVENTS AFTER THE REPORTING PERIOD
There were no significant events after the reporting period.
This information is provided by RNS
The company news service from the London Stock Exchange
END
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