Final Results

 

TIDMAKO 
 
RNS Number : 2580U 
Arko Holdings PLC 
22 June 2009 
 
? 
Arko Holdings plc 
('the Company' or 'Arko') 
Annual Results 
 
 
The Board of Arko announces the results of the Company for the year ended 31 
December 2008, which are set out below. These have today been published and 
despatched to shareholders. 
Copies of these financial statements will be available from the offices of 
Daniel Stewart & Company Plc, Becket House, 36 Old Jewry, London EC2R 8DD. A 
copy will also be available on the Company's website www.arkoholdings.com. 
The AGM will be held at the offices of Baker Tilly LLP at 2 Bloomsbury Street, 
London WC1B 3ST on 7 August 2009 at 12:00 noon. 
For further information: 
Angela Leung                                      Tel:  + 852 2219 9999 
Arko Holdings plc 
www.arkoholdings.com 
 
 
Paul Shackleton 
Daniel Stewart & Company plc    Tel: + 44 (0) 207 776 6550 
www.danielstewart.co.uk 
 
 
cHAIRMAN'S STATEMENT 
 
 
I am pleased to report that 2008 was a year of progress. Despite the global 
recession, I am delighted to report to shareholders a profitable result for the 
financial year ended 31 December 2008. 
 
 
Overall revenues from continuing operations, which are now made up exclusively 
of terminal operations and barging services grew to US$14.3m from US$10.9m in 
2007, a 31.7% increase. Keen Chance Terminal revenues grew by 23.6% to US$12.3m 
(2007: US$9.9m) and Arko Shipping grew its revenues by 75.8% to US$2m 
(2007:US$1m). Keen Chance Terminal maintained its long term average of 
approximately 23% of the revenue generated by the Group in the period.  Our 
gross margin was US$4.5m (2007: US$2.9m), representing a 54.1% increase in spite 
of difficult economic conditions. Depreciation charges of US$0.6m (2007: 
US$0.8m) exclusive of those charged to cost of sales, have decreased as no 
depreciation has been charged in respect of the power plant. Consequently, the 
profit for the year for continuing operations before taxation was US$1m (2007: 
loss of US$11m). 
 
 
During 2008, the Company's net assets increased by US$2.4m to US$30m (2007: 
US$27.6m). The most significant contribution to this increase was the 
acquisition of new plant and equipment with a value of US$3.2m. 
 
 
As of 31 December 2008, the cash position continued to improve at US$0.8m (2007: 
US$0.4m). Net cash generated from operating activities for the period was 
US$2.8m. Net cash of US$0.3m was applied in the repayment on finance leases and 
the interest incurred and this is expected to recur in the next financial year 
 
 
DIVIDENDS 
 
 
The Board does not recommend the payment of a dividend (2007: US$nil). 
 
 
OPERATIONAL REVIEW 
 
 
Despite the global recession, and with a modest level of revenue growth from our 
core businesses, we have now established solid foundations enabling us to 
progress towards our strategic goal of expanding our barge services provision in 
the Pearl River Delta and the diversified operation of the container terminal. 
Since the shutdown of the power plant, the overall performance of the Group has 
improved due to the fact that the loss contributed by the power plant has now 
been eliminated. I believe that we are now benefiting from being able to focus 
solely on the achievement of our strategic goal. 
 
 
Keen Chance Terminal 
 
 
In the early part of the second quarter of 2008, Keen Chance Terminal rented a 
new depot near the container terminal with an area of approximately 13,000m2. 
The new depot has a handling capacity of 3,500TEU which enables the terminal to 
increase its handling efficiency at the main depot and results in the overall 
increase in throughput during 2008, which was 0.34m TEU (2007: 0.27m TEU), 
representing an increase of 26% on 2007. 
 
 
Keen Chance Terminal continues to invest in infrastructure, machinery and 
facilities with the aim of increasing its handling efficiency. In 2008, a new 
rail-mounted gantry, three sets of front loaders and two sets of reach stackers 
commenced operation. In early 2009, the management decided to demolish the oil 
tanks located in the adjacent quay so as to expand the area of the main depot as 
well as to allow the extension of the adjacent quay. As a result of its efforts 
Keen Chance Terminal is now the third busiest terminal of the 
Second Class Harbour (non Deep River Harbour) within Huangpu District. 
 
 
Arko Shipping 
 
 
The barging service business performed well in 2008. The reduction in bunker 
prices as well as the successful pursuit of container cargo agreements with 
worldwide liner companies such as K-Line, NYK and Wan Hai Lines, were the major 
reasons for the growth in turnover and profit margin. As I said in my Chairman's 
Statement for 2007, the Group will continue to invest in the shipping logistics 
business by means of chartering and buying new river trade vessels. In September 
2008, a container vessel with deadweight and carrying capacity of 1,157 MT and 
1,350 MT respectively commenced operation. 
 
 
OUTLOOK 
 
 
The current global economic environment continues to impact import and export 
activity and demand is likely to continue to be weak. Arko is not immune to 
these factors, in particular the export cargo handling in Keen Chance Terminal. 
We anticipate a challenging period ahead in the remainder of 2009 and 2010 for 
all our businesses, but our relative success in 2008 leads us to believe we are 
well placed to meet these challenges. 
 
 
Existing Businesses 
 
 
We face the challenges of the current economic situation with a much better 
balanced business, efficiently managed and with stronger positions in our chosen 
sectors, where long term growth will continue. In response to the downturn in 
the container export trade, we have reduced our reliance on export customers and 
expanded our customer base in domestic trading. In recent months, the Chinese 
government has implemented a number of measures and incentives to stimulate 
domestic demand, from which we expect to benefit. 
 
 
As I have said, we will continue to invest in infrastructure, machinery and 
facilities in the terminal. The extension of the adjacent quay is now underway. 
After completion we will have a quay length of about 500 meters providing berths 
for 8 ships with a capacity of up to 1,000MT, served by existing and new quay 
cranes. Additionally, we expect to continue the procurement of front loaders and 
reach stackers by means of lease finance so as to satisfy the handling capacity 
in the depot. It is anticipated that the existing depot will expand to cover the 
area adjacent to the entrance of the main depot and we hope to conclude 
negotiations with the relevant party by the end of 2009. When completed a total 
area of approximately 50,000 m2 could be used as our backup depot which will 
significantly increase our handling capacity, in particular it will strengthen 
our ability to pursue the empty container handling business with the worldwide 
liner companies. In my interim report for 2007, I told shareholders that a delay 
for the delivery of the new 45 tonne quayside container crane was anticipated. 
We now expect that the crane will be delivered to us by no later than end of 
July 2009. 
 
 
Our past experience has shown that the terminal operation business has brought a 
synergistic effect to the barging service business. In 2010, our focus will be 
on expanding the feeder service to different districts within the Pearl River 
Delta and to reduce reliance on the Huangpu to Hong Kong and return route. To 
achieve this objective, we expect to increase from five container vessels to ten 
by way of chartering. In view of the uncertain economic climate, the Board does 
not intend to invest its capital in building new vessels in the short term. 
 
 
The Board believes Arko's progress in recent years, together with its reputation 
in efficiency in the market, an excellent team, and ongoing tight cost control 
will position the Group well for continuing success. 
 
 
The Quarry Mine in Fujian, China 
 
 
In my Chairman's Statement for 2004, I told shareholders the quarry mine project 
in Fujian could not move ahead due to a shortage of funds. In recent months, 
greatly improved relations between Taiwan and mainland China has provided 
opportunities for increased commercial activities within the Strait. Taking 
advantage of the quarry`s location, the management has decided to resume this 
project and has successfully renewed its business license and its mining rights. 
The board will keep shareholders updated on the progress of the project. 
 
 
Changing the Company and its subsidiaries' name 
 
 
Since the container vessels now in operation were named by numbering as Ying Gao 
301, 302 etc, a resolution will be proposed at the Annual General Meeting to 
change the name of the Company to "Yinggao Holdings plc". Similar name changes 
will be made in subsidiary companies. The Board believes that the change will 
help the Group to build up a brand name and establish a strong image in the 
market. 
 
 
The Board will continue to act in the best interests of our shareholders and 
ensure the Group is positioned to continue to grow. The Board believes the Group 
is well placed to meet the challenges ahead and views the outlook for the 
remainder of 2009 with confidence. 
 
 
APPRECIATION 
 
 
The Board would again like to thank all staff for the commitment, 
professionalism and loyalty they have shown during the last twelve months. 
 
 
Qin Shun Chao 
Chairman 
 
 
 
 
CONSOLIDATED INCOME STATEMENT 
FOR THE YEAR ENDED 31 DECEMBER 2008 
(Expressed in United States dollars) 
 
 
+--------------------------------------------+----------+------------+------------+---+ 
|                                            |          |            |            | 
+--------------------------------------------+----------+------------+------------+ 
|                                            |    Notes |       2008 |       2007 | 
|                                            |          |        US$ |        US$ | 
|                                            |          |       '000 |       '000 | 
+--------------------------------------------+----------+------------+------------+ 
|                                            |          |            |            | 
+--------------------------------------------+----------+------------+------------+ 
| REVENUE                                    |    4     |     14,300 |     10,860 | 
+--------------------------------------------+----------+------------+------------+ 
|                                            |          |            |            | 
+--------------------------------------------+----------+------------+------------+ 
| Cost of sales                              |          |    (9,850) |    (7,972) | 
+--------------------------------------------+----------+------------+------------+ 
|                                            |          |            |            | 
+--------------------------------------------+----------+------------+------------+ 
| GROSS PROFIT                               |          |      4,450 |      2,888 | 
+--------------------------------------------+----------+------------+------------+ 
|                                            |          |            |            | 
+--------------------------------------------+----------+------------+------------+ 
| Other income                               |    5     |        155 |        605 | 
+--------------------------------------------+----------+------------+------------+ 
|                                            |          |            |            | 
+--------------------------------------------+----------+------------+------------+ 
| Administrative expenses                    |          |    (3,114) |    (4,041) | 
+--------------------------------------------+----------+------------+------------+ 
|                                            |          |            |            | 
+--------------------------------------------+----------+------------+------------+ 
| Impairment of property, plant and          |          |          - |    (1,131) | 
| equipment                                  |          |            |            | 
+--------------------------------------------+----------+------------+------------+ 
|                                            |          |            |            | 
+--------------------------------------------+----------+------------+------------+ 
| Impairment of goodwill                     |          |          - |    (9,010) | 
+--------------------------------------------+----------+------------+------------+ 
|                                            |          |            |            | 
+--------------------------------------------+----------+------------+------------+ 
| PROFIT/(LOSS) FROM OPERATIONS              |          |      1,491 |   (10,689) | 
+--------------------------------------------+----------+------------+------------+ 
|                                            |          |            |            | 
+--------------------------------------------+----------+------------+------------+ 
| Finance costs                              |  6(a)    |      (176) |      (120) | 
+--------------------------------------------+----------+------------+------------+ 
|                                            |          |            |            |   | 
+--------------------------------------------+----------+------------+------------+---+ 
| PROFIT/(LOSS) BEFORE TAXATION              |    6     |      1,315 |   (10,809) | 
+--------------------------------------------+----------+------------+------------+ 
|                                            |          |            |            | 
+--------------------------------------------+----------+------------+------------+ 
| Taxation                                   |    7     |      (247) |      (142) | 
+--------------------------------------------+----------+------------+------------+ 
|                                            |          |            |            | 
+--------------------------------------------+----------+------------+------------+ 
| PROFIT/ (LOSS) FOR THE YEAR FROM           |          |      1,068 |   (10,951) | 
| CONTINUING OPERATIONS                      |          |            |            | 
+--------------------------------------------+----------+------------+------------+ 
|                                            |          |            |            | 
+--------------------------------------------+----------+------------+------------+ 
| LOSS  FOR THE YEAR FROM DISCONTINUED       |    4     |          - |   (21,288) | 
| OPERATION                                  |          |            |            | 
+--------------------------------------------+----------+------------+------------+ 
|                                            |          |            |            | 
+--------------------------------------------+----------+------------+------------+ 
| PROFIT/(LOSS) FOR THE YEAR                 |          |      1,068 |   (32,239) |   | 
+--------------------------------------------+----------+------------+------------+---+ 
|                                            |          |            |            | 
+--------------------------------------------+----------+------------+------------+ 
| Attributable to:                           |          |            |            | 
+--------------------------------------------+----------+------------+------------+ 
|                                            |          |            |            | 
+--------------------------------------------+----------+------------+------------+ 
| Equity holders of the parent Company       |          |        360 |   (31,275) | 
+--------------------------------------------+----------+------------+------------+ 
|                                            |          |            |            | 
+--------------------------------------------+----------+------------+------------+ 
| Minority interest                          |          |        708 |      (964) | 
+--------------------------------------------+----------+------------+------------+ 
|                                            |          |            |            | 
+--------------------------------------------+----------+------------+------------+ 
|                                            |          |      1,068 |   (32,239) | 
+--------------------------------------------+----------+------------+------------+ 
|                                            |          |            |            | 
+--------------------------------------------+----------+------------+------------+ 
|                                            |          |            |            | 
+--------------------------------------------+----------+------------+------------+ 
|                                            |          |   US cents |   US cents | 
+--------------------------------------------+----------+------------+------------+ 
| EARNINGS/(LOSS) PER SHARE - Basic and      |    10    |            |            | 
| fully diluted                              |          |            |            | 
+--------------------------------------------+----------+------------+------------+ 
| - From continuing operations               |          |       0.02 |     (0.50) | 
+--------------------------------------------+----------+------------+------------+ 
| - From discontinued operation              |          |     (0.00) |   (1.08)   | 
+--------------------------------------------+----------+------------+------------+ 
|                                            |          |            |            | 
+--------------------------------------------+----------+------------+------------+ 
|                                            |          |       0.02 |     (1.58) | 
+--------------------------------------------+----------+------------+------------+ 
|                                            |          |            |            | 
+--------------------------------------------+----------+------------+------------+---+ 
 
 
 
 
BALANCE SHEETS 
AS AT 31 DECEMBER 2008 
(Expressed in United States dollars) 
 
 
+------------------------+-------+------------+------------+------------+------------+ 
|                        |       |            |            |            |            | 
+------------------------+-------+------------+------------+------------+------------+ 
|                        | Notes |       2008 |      Group |       2008 |    Company | 
|                        |       |    US$'000 |       2007 |    US$'000 |       2007 | 
|                        |       |            |    US$'000 |            |    US$'000 | 
+------------------------+-------+------------+------------+------------+------------+ 
| NON-CURRENT ASSETS     |       |            |            |            |            | 
+------------------------+-------+------------+------------+------------+------------+ 
| Goodwill               |  11   |      1,835 |      1,834 |          - |          - | 
+------------------------+-------+------------+------------+------------+------------+ 
| Property, plant and    |  12   |     27,375 |     24,376 |          - |          - | 
| equipment              |       |            |            |            |            | 
+------------------------+-------+------------+------------+------------+------------+ 
| Investments in         |  13   |          - |          - |     18,756 |     24,218 | 
| subsidiaries           |       |            |            |            |            | 
+------------------------+-------+------------+------------+------------+------------+ 
| Available-for-sale     |  14   |         12 |         12 |          - |          - | 
| investments            |       |            |            |            |            | 
+------------------------+-------+------------+------------+------------+------------+ 
|                        |       |     29,222 |     26,222 |     18,756 |     24,218 | 
+------------------------+-------+------------+------------+------------+------------+ 
| CURRENT ASSETS         |       |            |            |            |            | 
+------------------------+-------+------------+------------+------------+------------+ 
| Inventories            |  15   |        137 |        124 |          - |          - | 
+------------------------+-------+------------+------------+------------+------------+ 
| Trade and other        |  16   |      8,103 |      8,312 |          1 |         63 | 
| receivables            |       |            |            |            |            | 
+------------------------+-------+------------+------------+------------+------------+ 
| Amounts due from       |       |          - |          - |        120 |          - | 
| subsidiaries           |       |            |            |            |            | 
+------------------------+-------+------------+------------+------------+------------+ 
| Cash and cash          |  17   |        780 |        428 |          2 |          1 | 
| equivalents            |       |            |            |            |            | 
+------------------------+-------+------------+------------+------------+------------+ 
|                        |       |      9,020 |      8,864 |        123 |         64 | 
+------------------------+-------+------------+------------+------------+------------+ 
| CURRENT LIABILITIES    |       |            |            |            |            | 
+------------------------+-------+------------+------------+------------+------------+ 
| Trade and other        |  18   |      3,907 |      3,606 |         31 |        200 | 
| payables               |       |            |            |            |            | 
+------------------------+-------+------------+------------+------------+------------+ 
| Amounts due to         |       |          - |          - |      1,916 |      2,299 | 
| subsidiaries           |       |            |            |            |            | 
+------------------------+-------+------------+------------+------------+------------+ 
| Obligations under      |  19   |        599 |          - |          - |          - | 
| finance leases         |       |            |            |            |            | 
+------------------------+-------+------------+------------+------------+------------+ 
| Taxation               |       |       695  |      1,134 |          - |          - | 
+------------------------+-------+------------+------------+------------+------------+ 
|                        |       |      5,201 |      4,740 |      1,947 |      2,499 | 
+------------------------+-------+------------+------------+------------+------------+ 
|                        |       |            |            |            |            | 
+------------------------+-------+------------+------------+------------+------------+ 
| NET CURRENT ASSETS /   |       |     3,819  |      4,124 |    (1,824) |    (2,435) | 
| (LIABILITIES)          |       |            |            |            |            | 
+------------------------+-------+------------+------------+------------+------------+ 
|                        |       |            |            |            |            | 
+------------------------+-------+------------+------------+------------+------------+ 
| TOTAL ASSETS LESS      |       |     33,041 |     30,346 |     16,932 |     21,783 | 
| CURRENT LIABILITIES    |       |            |            |            |            | 
+------------------------+-------+------------+------------+------------+------------+ 
|                        |       |            |            |            |            | 
+------------------------+-------+------------+------------+------------+------------+ 
| NON CURRENT            |       |            |            |            |            | 
| LIABILITIES            |       |            |            |            |            | 
+------------------------+-------+------------+------------+------------+------------+ 
| Bank loan              |  20   |      1,915 |      1,915 |          - |          - | 
+------------------------+-------+------------+------------+------------+------------+ 
| Obligations under      |  19   |        330 |          - |          - |          - | 
| finance leases         |       |            |            |            |            | 
+------------------------+-------+------------+------------+------------+------------+ 
| Loans from fellow      |       |          - |          - |          - |          - | 
+------------------------+-------+------------+------------+------------+------------+ 
| investors in           |  21   |        787 |        787 |          - |          - | 
| subsidiaries           |       |            |            |            |            | 
+------------------------+-------+------------+------------+------------+------------+ 
|                        |       |      3,032 |      2,702 |          - |          - | 
+------------------------+-------+------------+------------+------------+------------+ 
|                        |       |            |            |            |            | 
+------------------------+-------+------------+------------+------------+------------+ 
| NET ASSETS             |       |     30,009 |     27,644 |     16,932 |     21,783 | 
+------------------------+-------+------------+------------+------------+------------+ 
|                        |       |            |            |            |            | 
+------------------------+-------+------------+------------+------------+------------+ 
| EQUITY                 |       |            |            |            |            | 
+------------------------+-------+------------+------------+------------+------------+ 
| Share capital          |  22   |     14,922 |     14,922 |     14,922 |     14,922 | 
+------------------------+-------+------------+------------+------------+------------+ 
| Reserves               |       |      2,010 |        687 |      2,010 |      6,861 | 
+------------------------+-------+------------+------------+------------+------------+ 
| Total equity           |       |     16,932 |     15,609 |     16,932 |     21,783 | 
| attributable to        |       |            |            |            |            | 
|   equity shareholders  |       |            |            |            |            | 
+------------------------+-------+------------+------------+------------+------------+ 
| Minority interest      |       |     13,077 |     12,035 |          - |          - | 
+------------------------+-------+------------+------------+------------+------------+ 
| TOTAL EQUITY           |       |     30,009 |     27,644 |     16,932 |     21,783 | 
+------------------------+-------+------------+------------+------------+------------+ 
|                        |       |            |            |            |            | 
+------------------------+-------+------------+------------+------------+------------+ 
 
 
 
 
STATEMENT OF CHANGES IN EQUITY - CONSOLIDATED 
FOR THE YEAR ENDED 31 DECEMBER 2008 
(Expressed in United States dollars) 
 
 
+--------------+----+----+----+------+----+----+----+-----+----+-----+----+-----+----+----+----+---------+----+-----+----+-----+----+ 
|     Group         |   Share |     (note |   (note | Exchange | Retained |   Total  |   Share |        Total | Minority |    Total | 
|                   | premium |        i) |     ii) |  reserve |  profits |  reserve | capital | attributable | interest |          | 
|                   |         | Statutory |  Merger |          |          |          |         |    to equity |          |          | 
|                   |         |   surplus | reserve |          |          |          |         |      holders |          |          | 
|                   |         |   reserve |         |          |          |          |         |       of the |          |          | 
|                   |         |           |         |          |          |          |         |       parent |          |          | 
+-------------------+---------+-----------+---------+----------+----------+----------+---------+--------------+----------+----------+ 
|                   | US$'000 |   US$'000 | US$'000 |  US$'000 |  US$'000 |  US$'000 |  US$'00 |      US$'000 |  US$'000 |  US$'000 | 
+-------------------+---------+-----------+---------+----------+----------+----------+---------+--------------+----------+----------+ 
|                   |         |           |         |          |          |          |         |              |          |          | 
+-------------------+---------+-----------+---------+----------+----------+----------+---------+--------------+----------+----------+ 
|     Balance       |  15,662 |     1,681 |  26,043 |    (531) | (12,864) |   29,991 |  14,922 |       44,913 |   12,932 |   57,845 | 
|     at 1          |         |           |         |          |          |          |         |              |          |          | 
|     January       |         |           |         |          |          |          |         |              |          |          | 
|     2007          |         |           |         |          |          |          |         |              |          |          | 
+-------------------+---------+-----------+---------+----------+----------+----------+---------+--------------+----------+----------+ 
|                   |         |           |         |          |          |          |         |              |          |          | 
+-------------------+---------+-----------+---------+----------+----------+----------+---------+--------------+----------+----------+ 
|     Loss          |       - |         - |       - |        - | (31,275) | (31,275) |       - |     (31,275) |    (964) | (32,239) | 
|     for           |         |           |         |          |          |          |         |              |          |          | 
|     the           |         |           |         |          |          |          |         |              |          |          | 
|     year          |         |           |         |          |          |          |         |              |          |          | 
+-------------------+---------+-----------+---------+----------+----------+----------+---------+--------------+----------+----------+ 
|                   |         |           |         |          |          |          |         |              |          |          | 
+-------------------+---------+-----------+---------+----------+----------+----------+---------+--------------+----------+----------+ 
|     Exchange      |       - |         - |       - |    1,971 |        - |    1,971 |       - |        1,971 |       67 |    2,038 | 
|     movements     |         |           |         |          |          |          |         |              |          |          | 
+-------------------+---------+-----------+---------+----------+----------+----------+---------+--------------+----------+----------+ 
|                   |         |           |         |          |          |          |         |              |          |          | 
+-------------------+---------+-----------+---------+----------+----------+----------+---------+--------------+----------+----------+ 
|     Total         |       - |         - |       - |    1,971 | (31,275) | (29,304) |       - |     (29,304) |    (897) | (30,201) | 
|     recognised    |         |           |         |          |          |          |         |              |          |          | 
|     income and    |         |           |         |          |          |          |         |              |          |          | 
|     expense       |         |           |         |          |          |          |         |              |          |          | 
+-------------------+---------+-----------+---------+----------+----------+----------+---------+--------------+----------+----------+ 
|                   |         |           |         |          |          |          |         |              |          |          | 
+-------------------+---------+-----------+---------+----------+----------+----------+---------+--------------+----------+----------+ 
|     Balance       |  15,662 |     1,681 |  26,043 |    1,440 | (44,139) |      687 |  14,922 |       15,609 |   12,035 |   27,644 | 
|     at 31         |         |           |         |          |          |          |         |              |          |          | 
|     December      |         |           |         |          |          |          |         |              |          |          | 
|     2007          |         |           |         |          |          |          |         |              |          |          | 
+-------------------+---------+-----------+---------+----------+----------+----------+---------+--------------+----------+----------+ 
|                   |         |           |         |          |          |          |         |              |          |          | 
+-------------------+---------+-----------+---------+----------+----------+----------+---------+--------------+----------+----------+ 
|     Profit        |       - |         - |       - |        - |      360 |      360 |       - |          360 |      708 |    1,068 | 
|     for           |         |           |         |          |          |          |         |              |          |          | 
|     the           |         |           |         |          |          |          |         |              |          |          | 
|     year          |         |           |         |          |          |          |         |              |          |          | 
+-------------------+---------+-----------+---------+----------+----------+----------+---------+--------------+----------+----------+ 
|                   |         |           |         |          |          |          |         |              |          |          | 
+-------------------+---------+-----------+---------+----------+----------+----------+---------+--------------+----------+----------+ 
|     Overprovision |       - |     (158) |       - |        - |      158 |        - |       - |            - |        - |        - | 
|     in surplus    |         |           |         |          |          |          |         |              |          |          | 
|     reserve       |         |           |         |          |          |          |         |              |          |          | 
+-------------------+---------+-----------+---------+----------+----------+----------+---------+--------------+----------+----------+ 
|                   |         |           |         |          |          |          |         |              |          |          | 
+-------------------+---------+-----------+---------+----------+----------+----------+---------+--------------+----------+----------+ 
|     Exchange      |       - |        26 |       - |      937 |        - |      963 |       - |          963 |      334 |    1,297 | 
|     movements     |         |           |         |          |          |          |         |              |          |          | 
+-------------------+---------+-----------+---------+----------+----------+----------+---------+--------------+----------+----------+ 
|                   |         |           |         |          |          |          |         |              |          |          | 
+-------------------+---------+-----------+---------+----------+----------+----------+---------+--------------+----------+----------+ 
|     Total         |       - |     (132) |       - |      937 |      518 |    1,323 |       - |        1,323 |    1,042 |    2,365 | 
|     recognised    |         |           |         |          |          |          |         |              |          |          | 
|     income and    |         |           |         |          |          |          |         |              |          |          | 
|     expense       |         |           |         |          |          |          |         |              |          |          | 
+-------------------+---------+-----------+---------+----------+----------+----------+---------+--------------+----------+----------+ 
|                   |         |           |         |          |          |          |         |              |          |          | 
+-------------------+---------+-----------+---------+----------+----------+----------+---------+--------------+----------+----------+ 
|     Balance       |  15,662 |     1,549 |  26,043 |    2,377 | (43,621) |    2,010 |  14,922 |       16,932 |   13,077 |   30,009 | 
|     at 31         |         |           |         |          |          |          |         |              |          |          | 
|     December      |         |           |         |          |          |          |         |              |          |          | 
|     2008          |         |           |         |          |          |          |         |              |          |          | 
+-------------------+---------+-----------+---------+----------+----------+----------+---------+--------------+----------+----------+ 
|                   |         |           |         |          |          |          |         |              |          |          | 
+--------------+----+----+----+------+----+----+----+-----+----+-----+----+-----+----+----+----+---------+----+-----+----+-----+----+ 
 
 
Notes: 
(i)    Statutory surplus reserve: 
 
 
In accordance with the law of the People's Republic of China (the "PRC") and the 
Articles of Association of certain of the Company's subsidiaries, directors of 
these subsidiaries may at their discretion make appropriations to a statutory 
surplus reserve equivalent to 10% of the subsidiaries' net profits. 
Appropriations may also be made to statutory public welfare reserve equivalent 
to 5 to 10% of the net profits of these operating subsidiaries. Distribution of 
profits to shareholders can only be made after such appropriations. 
 
 
The statutory surplus reserve may be used to reduce any losses incurred or be 
capitalised as paid up capital. The use of the statutory public welfare reserve 
is restricted to capital expenditure incurred for staff welfare facilities. The 
statutory public welfare reserve is not available for distribution. 
 
 
(ii)    The merger reserve represents the difference between the nominal value 
of shares of the subsidiary company acquired, and the nominal value of the 
Company's shares issued in 2002. 
STATEMENT OF CHANGES IN EQUITY - COMPANY 
FOR THE YEAR ENDED 31 DECEMBER 2008 
(Expressed in United States dollars) 
 
 
+----------------------+----------+---------+---------+----------+------------+------------+ 
|                      |          |         |         |          |            |            | 
+----------------------+----------+---------+---------+----------+------------+------------+ 
|                      |          |         |         |          |            |            | 
+----------------------+----------+---------+---------+----------+------------+------------+ 
| Company              |    Share |   Share |  Merger | Exchange |   Retained |      Total | 
|                      |  capital | premium | reserve |  reserve |    profits |            | 
+----------------------+----------+---------+---------+----------+------------+------------+ 
|                      |  US$'000 | US$'000 | US$'000 |  US$'000 |    US$'000 |    US$'000 | 
+----------------------+----------+---------+---------+----------+------------+------------+ 
|                      |          |         |         |          |            |            | 
+----------------------+----------+---------+---------+----------+------------+------------+ 
|                      |          |         |         |          |            |            | 
+----------------------+----------+---------+---------+----------+------------+------------+ 
| Balance at 1 January |   14,922 |  15,662 |  26,043 |        - |    (2,628) |     53,999 | 
| 2007                 |          |         |         |          |            |            | 
+----------------------+----------+---------+---------+----------+------------+------------+ 
|                      |          |         |         |          |            |            | 
+----------------------+----------+---------+---------+----------+------------+------------+ 
| Loss for the year    |        - |       - |       - |        - |   (32,216) |   (32,216) | 
+----------------------+----------+---------+---------+----------+------------+------------+ 
|                      |          |         |         |          |            |            | 
+----------------------+----------+---------+---------+----------+------------+------------+ 
| Total recognised     |        - |       - |       - |        - |   (32,216) |   (32,216) | 
| income and expense   |          |         |         |          |            |            | 
+----------------------+----------+---------+---------+----------+------------+------------+ 
|                      |          |         |         |          |            |            | 
+----------------------+----------+---------+---------+----------+------------+------------+ 
|                      |          |         |         |          |            |            | 
+----------------------+----------+---------+---------+----------+------------+------------+ 
| Balance at 31        |   14,922 |  15,662 |  26,043 |        - |   (34,844) |     21,783 | 
| December 2007        |          |         |         |          |            |            | 
+----------------------+----------+---------+---------+----------+------------+------------+ 
|                      |          |         |         |          |            |            | 
+----------------------+----------+---------+---------+----------+------------+------------+ 
| Loss for the year    |        - |       - |       - |        - |    (5,551) |    (5,551) | 
+----------------------+----------+---------+---------+----------+------------+------------+ 
|                      |          |         |         |          |            |            | 
+----------------------+----------+---------+---------+----------+------------+------------+ 
| Exchange movement    |        - |       - |       - |      700 |          - |        700 | 
+----------------------+----------+---------+---------+----------+------------+------------+ 
|                      |          |         |         |          |            |            | 
+----------------------+----------+---------+---------+----------+------------+------------+ 
| Total recognised     |        - |       - |       - |      700 |    (5,551) |    (4,851) | 
| income and expense   |          |         |         |          |            |            | 
+----------------------+----------+---------+---------+----------+------------+------------+ 
|                      |          |         |         |          |            |            | 
+----------------------+----------+---------+---------+----------+------------+------------+ 
|                      |          |         |         |          |            |            | 
+----------------------+----------+---------+---------+----------+------------+------------+ 
| Balance at 31        |   14,922 |  15,662 |  26,043 |      700 |   (40,395) |     16,932 | 
| December 2008        |          |         |         |          |            |            | 
+----------------------+----------+---------+---------+----------+------------+------------+ 
|                      |          |         |         |          |            |            | 
+----------------------+----------+---------+---------+----------+------------+------------+ 
 
 
 
 
CASH FLOW STATEMENT - CONSOLIDATED 
FOR THE YEAR ENDED 31 DECEMBER 2008 
(Expressed in United States dollars) 
+-----------------------------------------------+------+------------+------------+ 
|                                               |      |       2008 |       2007 | 
|                                               |      |    US$'000 |    US$'000 | 
+-----------------------------------------------+------+------------+------------+ 
|                                               |      |            |            | 
+-----------------------------------------------+------+------------+------------+ 
| Cash flow from operating activities           |      |            |            | 
+-----------------------------------------------+------+------------+------------+ 
|                                               |      |            |            | 
+-----------------------------------------------+------+------------+------------+ 
| Profit/(loss) before taxation                 |      |            |            | 
+-----------------------------------------------+------+------------+------------+ 
|   Continuing operations                       |      |      1,315 |   (10,689) | 
+-----------------------------------------------+------+------------+------------+ 
|   Discontinued operation                      |      |          - |   (21,288) | 
+-----------------------------------------------+------+------------+------------+ 
|                                               |      |            |            | 
+-----------------------------------------------+------+------------+------------+ 
|                                               |      |      1,315 |   (31,977) | 
+-----------------------------------------------+------+------------+------------+ 
| Adjustments for:                              |      |            |            | 
+-----------------------------------------------+------+------------+------------+ 
| - Interest on finance leases                  |      |         43 |        120 | 
+-----------------------------------------------+------+------------+------------+ 
| - Interest on bank loan                       |      |        133 |          - | 
+-----------------------------------------------+------+------------+------------+ 
| - Interest income                             |      |        (1) |       (14) | 
+-----------------------------------------------+------+------------+------------+ 
| - Depreciation                                |      |      1,748 |      1,579 | 
+-----------------------------------------------+------+------------+------------+ 
| - Loss on disposal of property, plant and     |      |          3 |         95 | 
| equipment                                     |      |            |            | 
+-----------------------------------------------+------+------------+------------+ 
| - Impairment loss - goodwill                  |      |          - |     18,977 | 
+-----------------------------------------------+------+------------+------------+ 
| - Impairment loss - property, plant and       |      |          - |     13,194 | 
| equipment                                     |      |            |            | 
+-----------------------------------------------+------+------------+------------+ 
| - Exchange adjustments                        |      |      (291) |        728 | 
+-----------------------------------------------+------+------------+------------+ 
|                                               |      |            |            | 
+-----------------------------------------------+------+------------+------------+ 
| Operating profit before working capital       |      |      2,950 |      2,702 | 
| changes                                       |      |            |            | 
+-----------------------------------------------+------+------------+------------+ 
| Decrease  in trade and other receivables      |      |        209 |      1,836 | 
+-----------------------------------------------+------+------------+------------+ 
| Increase in inventories                       |      |       (13) |       (47) | 
+-----------------------------------------------+------+------------+------------+ 
| Increase in trade and other payables          |      |        301 |        567 | 
+-----------------------------------------------+------+------------+------------+ 
|                                               |      |            |            | 
+-----------------------------------------------+------+------------+------------+ 
| Net cash flow generated from operations       |      |      3,447 |      5,058 | 
+-----------------------------------------------+------+------------+------------+ 
| Interest paid                                 |      |          - |      (120) | 
+-----------------------------------------------+------+------------+------------+ 
| Taxes paid                                    |      |      (686) |      (152) | 
+-----------------------------------------------+------+------------+------------+ 
|                                               |      |            |            | 
+-----------------------------------------------+------+------------+------------+ 
| Net cash generated from operating activities  |      |      2,761 |      4,786 | 
+-----------------------------------------------+------+------------+------------+ 
|                                               |      |            |            | 
+-----------------------------------------------+------+------------+------------+ 
| Cash flows from investing activities          |      |            |            | 
+-----------------------------------------------+------+------------+------------+ 
| Purchase of property, plant and equipment     |      |    (1,959) |    (5,187) | 
+-----------------------------------------------+------+------------+------------+ 
| Proceeds from disposal of property, plant and |      |          - |         97 | 
| equipment                                     |      |            |            | 
+-----------------------------------------------+------+------------+------------+ 
| Interest income                               |      |          1 |         14 | 
+-----------------------------------------------+------+------------+------------+ 
|                                               |      |            |            | 
+-----------------------------------------------+------+------------+------------+ 
| Net cash used in investing activities         |      |    (1,958) |    (5,076) | 
+-----------------------------------------------+------+------------+------------+ 
|                                               |      |            |            | 
+-----------------------------------------------+------+------------+------------+ 
| Cash flows from financing activities          |      |            |            | 
+-----------------------------------------------+------+------------+------------+ 
| Repayment on finance lease obligations        |      |      (275) |          - | 
+-----------------------------------------------+------+------------+------------+ 
| Interest on finance leases                    |      |       (43) |          - | 
+-----------------------------------------------+------+------------+------------+ 
| Interest on bank loan                         |      |      (133) |      (120) | 
+-----------------------------------------------+------+------------+------------+ 
|                                               |      |            |            | 
+-----------------------------------------------+------+------------+------------+ 
| Net cash used in financing activities         |      |      (451) |      (120) | 
+-----------------------------------------------+------+------------+------------+ 
|                                               |      |            |            | 
+-----------------------------------------------+------+------------+------------+ 
|                                               |      |            |            | 
+-----------------------------------------------+------+------------+------------+ 
| Net increase / (decrease)  in cash and cash   |      |        352 |      (410) | 
| equivalents                                   |      |            |            | 
+-----------------------------------------------+------+------------+------------+ 
|                                               |      |            |            | 
+-----------------------------------------------+------+------------+------------+ 
| Cash and cash equivalents at 1 January        |      |        428 |        838 | 
+-----------------------------------------------+------+------------+------------+ 
|                                               |      |            |            | 
+-----------------------------------------------+------+------------+------------+ 
| Cash and cash equivalents at 31 December      |      |        780 |        428 | 
+-----------------------------------------------+------+------------+------------+ 
|                                               |      |            |            | 
+-----------------------------------------------+------+------------+------------+ 
CASH FLOW STATEMENT - COMPANY 
FOR THE YEAR ENDED 31 DECEMBER 2008 
(Expressed in United States dollars) 
+-----------------------------------------------+------+------------+------------+ 
|                                               |      |       2008 |       2007 | 
|                                               |      |    US$'000 |    US$'000 | 
+-----------------------------------------------+------+------------+------------+ 
|                                               |      |            |            | 
+-----------------------------------------------+------+------------+------------+ 
| Cash flow from operating activities           |      |            |            | 
+-----------------------------------------------+------+------------+------------+ 
|                                               |      |            |            | 
+-----------------------------------------------+------+------------+------------+ 
| Loss after taxation and before working        |      |       (89) |   (32,216) | 
| capital changes                               |      |            |            | 
+-----------------------------------------------+------+------------+------------+ 
| Adjustments for:                              |      |            |            | 
+-----------------------------------------------+------+------------+------------+ 
| - Impairment loss on investments in           |      |          - |     31,797 | 
| subsidiaries                                  |      |            |            | 
+-----------------------------------------------+------+------------+------------+ 
| - Exchange difference                         |      |        700 |          - | 
+-----------------------------------------------+------+------------+------------+ 
|                                               |      |            |            | 
+-----------------------------------------------+------+------------+------------+ 
| Operating profit/ (loss) before working       |      |        611 |      (419) | 
| capital changes                               |      |            |            | 
+-----------------------------------------------+------+------------+------------+ 
|                                               |      |            |            | 
+-----------------------------------------------+------+------------+------------+ 
| Decrease / (increase) in trade and other      |      |         62 |       (19) | 
| receivables                                   |      |            |            | 
+-----------------------------------------------+------+------------+------------+ 
| Increase in amount due from subsidiaries      |      |      (120) |          - | 
+-----------------------------------------------+------+------------+------------+ 
| (Decrease) / increase in trade and other      |      |      (169) |         77 | 
| payables                                      |      |            |            | 
+-----------------------------------------------+------+------------+------------+ 
| (Decrease) / increase in amount due to        |      |      (383) |        362 | 
| subsidiaries                                  |      |            |            | 
+-----------------------------------------------+------+------------+------------+ 
|                                               |      |            |            | 
+-----------------------------------------------+------+------------+------------+ 
| Net increase in cash and cash equivalents     |      |          1 |          1 | 
+-----------------------------------------------+------+------------+------------+ 
|                                               |      |            |            | 
+-----------------------------------------------+------+------------+------------+ 
| Cash and cash equivalents at 1 January        |      |          1 |          - | 
+-----------------------------------------------+------+------------+------------+ 
|                                               |      |            |            | 
+-----------------------------------------------+------+------------+------------+ 
|                                               |      |            |            | 
+-----------------------------------------------+------+------------+------------+ 
| Cash and cash equivalents at 31 December      |      |          2 |          1 | 
+-----------------------------------------------+------+------------+------------+ 
|                                               |      |            |            | 
+-----------------------------------------------+------+------------+------------+ 
|                                               |      |            |            | 
+-----------------------------------------------+------+------------+------------+ 
 
 
1.    PRINCIPAL ACCOUNTING POLICIES 
 
 
General information 
 
 
The Company is a public limited company incorporated and domiciled in the United 
Kingdom. The registered office of the Company is located at 2 Bloomsbury Street, 
London WC1B 3ST. Its principal place of business is in Hong Kong and the PRC. 
The principal activities of the Company and its subsidiaries (hereinafter 
collectively referred to as the "Group") are terminal operation and barging 
services provision. 
The Company's shares were admitted to trading on the AIM Market of the London 
Stock Exchange. These consolidated financial statements are presented in United 
States Dollars, unless otherwise stated, and were reviewed by the Audit 
Committee and approved for issue by the Board of Directors on 17 June 2009. 
 
 
2.    SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES 
 
 
(a)    Basis of preparation and statement of compliance 
 
 
The financial statements are presented in United States dollars ("USD"), rounded 
to the nearest thousand, which is the presentation currency of the Group. 
 
 
The financial statements have been prepared in accordance with all applicable 
International Financial Reporting Standards ("IFRSs"), which comprise 
International Financial Reporting Standards, International Accounting Standards 
("IAS") and Interpretations ("IFRIC"), issued by the International Accounting 
Standards Board ("IASB") and the International Financial Reporting 
Interpretations Committee ("IFRIC"), and the AIM Rules issued by the London 
Stock Exchange. 
 
 
Impact of recently issued IFRSs 
 
 
The Group has adopted certain new and revised IFRSs that are relevant to its 
operations and effective for the current accounting year. There have been no 
significant changes to the accounting policies applied in these consolidated 
financial statements for the years presented as a result of these developments. 
 
 
The IASB and the IFRIC have issued certain new and revised IFRSs and 
Interpretations that are first effective or available for early adoption for the 
current accounting period of the Group. The Group has not applied any new 
standard or interpretation that is not yet effective for the current accounting 
year (see note 28). 
 
 
 
 
(b) Significant accounting policies 
 
 
The consolidated financial statements have been prepared under the historical 
cost convention except for certain financial assets and liabilities which are 
stated at fair values. 
 
 
The accounting policies and methods of computation used in the preparation of 
these consolidated financial statements are consistent with those used in the 
annual financial statements for the year ended 31 December 2007 except for the 
adoption of standards, amendments and interpretations issued by the IASB 
mandatory for annual financial year beginning 1 January 2008. 
 
 
The adoption of these standards, amendments and interpretations was not material 
to the Group's results of operations or financial position. 
 
 
(c)Basis of consolidation 
 
 
On the acquisition of a subsidiary, the assets and liabilities of that 
subsidiary are recorded at their fair value, reflecting their condition at the 
date of acquisition. 
 
 
The consolidated income statement and consolidated balance sheet include the 
financial statements of the Company and its subsidiary undertakings up to 31 
December. The results of subsidiaries acquired are included in the consolidated 
income statement from the date on which control passes. Intra-group sales and 
profits are eliminated on consolidation. 
As permitted by Section 230 of the Companies Act 1985, a separate income 
statement is not presented in respect of the Company. 
 
 
(d)Revenue 
 
 
Revenue comprises the value of sales in the year in respect of the operation of 
the terminal and provision of barging services. 
 
 
 
 
(e)Goodwill 
 
 
Goodwill represents the excess of the cost of an acquisition over the fair value 
of the Group's share of the net identifiable assets of the acquired subsidiary 
companies. 
 
 
Goodwill is stated at cost less accumulated impairment losses. Goodwill is 
allocated to cash-generating units and is annually tested for impairment. In 
respect of associated companies, the carrying amount of goodwill is included in 
the carrying amount of the interests in the associated companies. 
 
 
If the cost of acquisition is less than the fair value of net identifiable 
assets of the acquired subsidiary company, associated company, the difference is 
recognised immediately in the consolidated income statement. 
 
 
Any gain or loss on disposal of a subsidiary company and an associated company 
includes the carrying amount of goodwill relating to the entity sold. 
 
 
(f)Property, plant and equipment 
 
 
Expenditure on additions and improvements is capitalised as incurred. 
Non-current assets are included at historical cost less accumulated depreciation 
and any impairment losses. 
 
 
Property, plant and equipment, other than construction in progress, are 
depreciated over their estimated useful lives on a straight line basis. The 
following annual rates of depreciation have been used. 
Land and buildings 
20-30 years 
Plant and machinery 
10-20 years 
Furniture, fixtures and equipment                                  5-10 years 
Motor vehicles 
5-10 years 
Vessels 
     10 years 
 
 
Construction in progress represents a building under construction, which is 
stated at cost less any impairment. Cost comprises the direct cost of 
construction. 
 
 
Both the useful life of an asset and its residual value, if any, are reviewed 
annually. 
 
 
The carrying amounts of other property, plant and equipment are reviewed for 
indications of impairment at each balance sheet date. An impairment loss is 
recognised to the extent that the carrying amount of an asset, or the 
cash-generating unit to which it belongs, is more than its recoverable amount. 
The recoverable amount of an asset, or of the cash generating unit to which it 
belongs, is the greater of its net selling price and value in use. In assessing 
value in use, the estimated future cash flows are discounted to their present 
value using a pre-tax discount rate that reflects current market assessments of 
time value of money and the risks specific to the assets. An impairment loss is 
reversed if there has been a favourable change in estimates used to determine 
the recoverable amount. 
 
 
Gains or losses arising from the retirement or disposal of an item of property, 
plant and equipment are determined as the difference between the net disposal 
proceeds and the carrying amount of the item and are recognised in profit or 
loss on the date of retirement or disposal. 
 
 
(g)Subsidiaries 
 
 
Subsidiaries are entities controlled by the Group. Control exists when the Group 
has the power to govern the financial and operating policies of an entity so as 
to obtain benefits from its activities. In assessing control, potential voting 
rights that presently are exercisable are taken into account. 
 
 
In the Company's balance sheet, investments in subsidiaries are stated at cost 
less impairment losses. 
 
 
(h)Available for sale investments 
 
 
Investments being those held for non-trading purposes are classified as 
available-for-sale investments. At each balance sheet date the fair value is 
remeasured, with any resultant gain or loss being recognised directly in equity 
in the fair value reserve, except foreign exchange gains and losses in respect 
of monetary items such as debt securities which are recognised directly in 
profit or loss. Where these investments are interest-bearing, interest 
calculated using the effective interest method is recognised in profit or loss. 
When these investments are derecognised, the cumulative gain or loss previously 
recognised directly in equity is recognised in profit or loss. 
 
 
 
 
(h)Available for sale investments 
 
 
When there is objective evidence that available-for-sale investments are 
impaired, the cumulative loss that has been recognised directly in equity is 
removed from equity and is recognised in profit or loss. The amount of the 
cumulative loss that is recognised in profit or loss is the difference between 
the acquisition cost (net of any principal repayment and amortisation) and 
current fair value, less any impairment loss on that asset previously recognised 
in profit or loss. 
 
 
Impairment losses recognised in profit or loss in respect of available-for-sale 
investments are not reversed through profit or loss. Any subsequent increase in 
the fair value of such assets is recognised directly in equity. 
 
 
Impairment losses in respect of available-for-sale debt investments are reversed 
if the subsequent increase in fair value can be objectively related to an event 
occurring after the impairment loss was recognised. Reversals of impairment 
losses in such circumstances are recognised in profit or loss. 
 
 
(i)    Inventories 
 
 
Inventories are carried at the lower of cost and net realisable value. 
 
 
Cost is calculated using the weighted average cost formula and comprises all 
costs of purchase, costs of conversion and other costs incurred in bringing the 
inventories to their present location and condition. 
 
 
Net realisable value is the estimated selling price in the ordinary course of 
business less the estimated costs of completion and the estimated costs 
necessary to make the sale. 
 
 
When inventories are sold, the carrying amount of those inventories is 
recognised as an expense in the period in which the related revenue is 
recognised. The amount of any write-down of inventories to net realisable value 
and all losses of inventories are recognised as an expense in the period the 
write-down or loss occurs. The amount of any reversal of any write-down of 
inventories is recognised as a reduction in the amount of inventories recognised 
as an expense in the period in which the reversal occurs. 
 
 
 
(j)    Trade and other receivables 
Trade and other receivables are initially recognised at fair value and 
thereafter stated at amortised cost less impairment losses for bad and doubtful 
receivables, except where the receivables are interest-free loans made to 
related parties without any fixed repayment terms or the effect of discounting 
would be immaterial. In such cases, the receivables are stated at cost less 
impairment losses for bad and doubtful debts. 
 
 
Impairment losses for bad and doubtful debts are measured as the difference 
between the carrying amount of the financial asset and the estimated future cash 
flows, discounted where the effect of discounting is material. 
 
 
(k)    Cash and cash equivalents 
 
 
Cash and cash equivalents comprise cash at bank and on hand, demand deposits 
with banks and other financial institutions, and short-term, highly liquid 
investments that are readily convertible into known amounts of cash and which 
are subject to an insignificant risk of changes in value, having been within 
three months of maturity at acquisition. Bank overdrafts that are repayable on 
demand and form an integral part of the Company's cash management are also 
included as a component of cash and cash equivalents for the purpose of the cash 
flow statement. 
 
 
(l)    Trade and other payables 
 
 
Trade and other payables are initially recognised at fair value. Trade and other 
payables are subsequently stated at amortised cost unless the effect of 
discounting would be immaterial, in which case they are stated at cost. 
 
 
(m)    Interest-bearing borrowings 
 
 
Interest-bearing borrowings are recognised initially at fair value less 
attributable transaction costs. Subsequent to initial recognition, 
interest-bearing borrowings are stated at amortised cost with any difference 
between the amount initially recognised and redemption value being recognised in 
profit or loss over the period of the borrowings, together with any interest and 
fees payable, using the effective interest method. 
 
 
 
(n)    Employee benefits 
 
 
Salaries, annual bonuses, paid annual leave, contributions to defined 
contribution retirement plans and the cost of non-monetary benefits are accrued 
in the year in which the associated services are rendered by employees. Where 
payment or settlement is deferred and the effect would be material, these 
amounts are stated at their present values. 
 
 
(o)    Translation of foreign currencies 
 
                          i)        Functional and presentation currency 
 
Items included in the financial statements of each of the Group's entities are 
measured using the currency of the primary economic environment in which the 
entity operates ('the functional currency'). The consolidated financial 
statements are presented in United States Dollars which is the Company's 
presentation currency. 
 
                         ii)        Transactions and balances 
 
Foreign currency transactions during the year are translated at the foreign 
exchange rates ruling at the transaction dates. Monetary assets and liabilities 
denominated in foreign currencies are translated at the foreign exchange rates 
ruling at the balance sheet date. Exchange gains and losses are recognised in 
profit or loss. 
 
 
Non-monetary assets and liabilities that are measured in terms of historical 
cost in a foreign currency are translated using the foreign exchange rates 
ruling at the transaction dates. Non-monetary assets and liabilities denominated 
in foreign currencies that are stated at fair value are translated using the 
foreign exchange rates ruling at the dates the fair value was determined. 
 
                        iii)       Group companies 
 
The results of the subsidiary company in the PRC are translated into United 
States dollars at the exchange rates approximating the foreign exchange rates 
ruling at the dates of the transactions. Balance sheet items are translated into 
United States dollars at the foreign exchange rates ruling at the balance sheet 
date. The resulting exchange differences are recognised directly in a separate 
component of equity. 
 
 
On disposal of a foreign operation, the cumulative amount of the exchange 
differences recognised in equity which relate to that foreign operation is 
included in the calculation of the profit or loss on disposal. 
 
 
 
 
(p)    Income tax 
 
 
Income tax for the year comprises current tax and movements in deferred tax 
assets and liabilities. Current tax and movements in deferred tax assets and 
liabilities are recognised in profit or loss except to the extent that they 
relate to items recognised directly in equity, in which case they are recognised 
in equity. 
 
 
Current tax is the expected tax payable on the taxable income for the year, 
using tax rates enacted or substantively enacted at the balance sheet date, and 
any adjustment to tax payable in respect of previous years. 
 
 
Deferred tax assets and liabilities arise from deductible and taxable temporary 
differences respectively, being the differences between the carrying amounts of 
assets and liabilities for financial reporting purposes and their tax bases. 
Deferred tax assets also arise from unused tax losses and unused tax credits. 
Apart from differences which arise on initial recognition of assets 
and liabilities, all deferred tax liabilities, and all deferred tax assets to 
the extent that it is probable that future taxable profits will be available 
against which the asset can be utilised, are recognised. 
The amount of deferred tax recognised is measured based on the expected manner 
of realisation or settlement of the carrying amount of the assets and 
liabilities, using tax rates enacted or substantively enacted at the balance 
sheet date. Deferred tax assets and liabilities are not discounted. 
 
 
(q)    Provisions and contingent liabilities 
 
 
Provisions are recognised for other liabilities of uncertain timing or amount 
when the Group has a legal or constructive obligation arising as a result of a 
past event, it is probable that an outflow of economic benefits will be required 
to settle the obligation and a reliable estimate can be made. 
 
 
Where the time value of money is material, provisions are stated at the present 
value of the expenditure expected to settle the obligation. 
 
 
 
 
(q)Provisions and contingent liabilities 
 
 
Where it is not probable that an outflow of economic benefits will be required, 
or the amount cannot be estimated reliably, the obligation is disclosed as a 
contingent liability, unless the probability of outflow of economic benefits is 
remote. Possible obligations, whose existence will only be confirmed by the 
occurrence or non-occurrence of one or more future events are also disclosed as 
contingent liabilities unless the probability of outflow of economic benefits is 
remote. 
 
 
(r)    Related parties 
 
 
For the purposes of these financial statements, a party is considered to be 
related to the Company if: 
 
 
  *  the party has the ability, directly or indirectly through one or more 
  intermediaries, to control the Company or exercise significant influence over 
  the Company in making financial and operating policy decisions, or has joint 
  control over the Company; 
  *  the Company and the party are subject to common control; 
  *  the party is a subsidiary, an associate of the Company or a joint venture in 
  which the Company is a venturer; 
  *  the party is a member of key management personnel of the Company or the 
  Company's parent, or a close family member of such an individual, or is an 
  entity under the control, joint control or significant influence of such 
  individuals; 
  *  the party is a close family member of a party referred to in (i) or is an entity 
  under the control, joint control or significant influence of such individuals; 
  or 
  *  the party is a post-employment benefit plan which is for the benefit of 
  employees of the Company or of any entity that is a related party of the 
  Company. 
 
Close family members of an individual are those family members who may be 
expected to influence, or be influenced by, that individual in their dealings 
with the entity. 
 
3.    CRITICAL ACCOUNTING ESTIMATES AND JUDGEMENTS 
 
 
Estimates and judgements are currently evaluated and are based on historical 
experience and other factors including expectations of future events that are 
believed to be reasonable under the circumstances. Apart from information 
disclosed elsewhere in these financial statements, the following disclosures 
summarise : (1) 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 and (2) significant judgements made in the 
process of applying the Group's accounting policies. 
 
             (i)           Income taxes 
 
The Group is subject to income taxes in the PRC, Hong Kong and the United 
Kingdom. Significant judgement is required in determining the provision for 
income taxes. There are many transactions and calculations for which the 
ultimate tax determination is uncertain during the ordinary course of business. 
The Group recognises liabilities for anticipated tax audit issues based on 
estimates of whether additional taxes will be due. Where the final tax outcome 
of these matters is different from the amounts that were initially recorded, 
such differences will impact the income tax and deferred tax provisions in the 
period in which such determination is made. 
 
             (ii)           Provision for doubtful receivables 
 
The Group provides for doubtful receivables based on an assessment of the 
collectibility of trade receivables. Provisions for doubtful receivables are 
applied to trade and other receivables where events or changes in circumstances 
indicate that the balance may not be collectible. The identification of doubtful 
receivables requires the use of judgments and estimates. Where the expectation 
is different from the original estimates, such difference will impact carrying 
value of receivables and doubtful debt expenses in the period in which such 
estimate has been changed. 
 
 
 
 
4.    REVENUE AND SEGMENT INFORMATION 
 
 
The principal activities of the Group are the provision of logistics and other 
related services including sea freight forwarding and barge hire. 
 
 
Revenue represents income earned from the provision of logistic and other 
related services. Business (primary) segment information is as follows: 
 
 
+---------------------------------------------------------------+----------+-----------+------------+------------+ 
|                                                               |       Revenue        |  Segment profit/(loss)  | 
+---------------------------------------------------------------+----------------------+-------------------------+ 
|                                i)                             |     2008 |      2007 |       2008 |       2007 | 
|                                Segment                        |          |           |            |            | 
|                                revenue                        |          |           |            |            | 
|                                and                            |          |           |            |            | 
|                                result                         |          |           |            |            | 
+---------------------------------------------------------------+----------+-----------+------------+------------+ 
|                                                               |  US$'000 |   US$'000 |    US$'000 |    US$'000 | 
+---------------------------------------------------------------+----------+-----------+------------+------------+ 
|                                                  Continuing   |          |           |            |            | 
|                                                  operations   |          |           |            |            | 
+---------------------------------------------------------------+----------+-----------+------------+------------+ 
|                                                               |          |           |            |            | 
+---------------------------------------------------------------+----------+-----------+------------+------------+ 
|                                                  Terminal     |   14,300 |    10,860 |      1,068 |      (820) | 
|                                                  and          |          |           |            |            | 
|                                                  barging      |          |           |            |            | 
|                                                  services     |          |           |            |            | 
+---------------------------------------------------------------+----------+-----------+------------+------------+ 
|                                                  Trading      |        - |         - |          - |    (8,776) | 
|                                                  and          |          |           |            |            | 
|                                                  others       |          |           |            |            | 
+---------------------------------------------------------------+----------+-----------+------------+------------+ 
|                                                  Mining       |        - |         - |          - |    (1,235) | 
+---------------------------------------------------------------+----------+-----------+------------+------------+ 
|                                                               |   14,300 |    10,860 |      1,068 |   (10,831) | 
+---------------------------------------------------------------+----------+-----------+------------+------------+ 
|                                                  Discontinued |          |           |            |            | 
|                                                  operation    |          |           |            |            | 
+---------------------------------------------------------------+----------+-----------+------------+------------+ 
|                                                               |          |           |            |            | 
+---------------------------------------------------------------+----------+-----------+------------+------------+ 
|                                                  Power        |        - |         - |          - |   (21,408) | 
|                                                  plant        |          |           |            |            | 
+---------------------------------------------------------------+----------+-----------+------------+------------+ 
|                                                               |          |           |            |            | 
+---------------------------------------------------------------+----------+-----------+------------+------------+ 
|                                                               |  14,300  |    10,860 |      1,068 |   (32,239) | 
+---------------------------------------------------------------+----------+-----------+------------+------------+ 
 
 
An analysis of the results of discontinued operation, after elimination of intra 
company transactions, is as follows: 
 
 
+-----------------------------------------------+------+------------+------------+ 
|                                               |      |       2008 |       2007 | 
|                                               |      |    US$'000 |    US$'000 | 
+-----------------------------------------------+------+------------+------------+ 
|                                               |      |            |            | 
+-----------------------------------------------+------+------------+------------+ 
|                            Other income       |      |          - |      1,142 | 
+-----------------------------------------------+------+------------+------------+ 
|                            Administrative     |      |          - |      (401) | 
|                            expenses           |      |            |            | 
+-----------------------------------------------+------+------------+------------+ 
|                            Impairment of      |      |          - |   (12,062) | 
|                            property, plant    |      |            |            | 
|                            and equipment      |      |            |            | 
+-----------------------------------------------+------+------------+------------+ 
|                            Impairment of      |      |          - |    (9,967) | 
|                            goodwill           |      |            |            | 
+-----------------------------------------------+------+------------+------------+ 
|                                               |      |            |            | 
+-----------------------------------------------+------+------------+------------+ 
|                            Loss for the year  |      |          - |   (21,288) | 
+-----------------------------------------------+------+------------+------------+ 
|                                               |      |            |            | 
+-----------------------------------------------+------+------------+------------+ 
 
 
 
 
+---------------------------------------------------------------+----------+-----------+------------+----------+ 
|                                                               |        Assets        |           Liabilities | 
+---------------------------------------------------------------+----------------------+-----------------------+ 
|                                ii)                            |     2008 |      2007 |       2008 |     2007 | 
|                                Segment                        |          |           |            |          | 
|                                assets                         |          |           |            |          | 
|                                and                            |          |           |            |          | 
|                                liabilities                    |          |           |            |          | 
+---------------------------------------------------------------+----------+-----------+------------+----------+ 
|                                                               |  US$'000 |   US$'000 |    US$'000 |  US$'000 | 
+---------------------------------------------------------------+----------+-----------+------------+----------+ 
|                                                  Continuing   |          |           |            |          | 
|                                                  operations   |          |           |            |          | 
+---------------------------------------------------------------+----------+-----------+------------+----------+ 
|                                                               |          |           |            |          | 
+---------------------------------------------------------------+----------+-----------+------------+----------+ 
|                                                  Terminal     |   35,015 |    34,739 |      4,784 |    4,040 | 
|                                                  and          |          |           |            |          | 
|                                                  barging      |          |           |            |          | 
|                                                  services     |          |           |            |          | 
+---------------------------------------------------------------+----------+-----------+------------+----------+ 
|                                                  Trading      |    3,224 |     2,338 |        117 |      271 | 
|                                                  and          |          |           |            |          | 
|                                                  others       |          |           |            |          | 
+---------------------------------------------------------------+----------+-----------+------------+----------+ 
|                                                  Mining       |        - |       (9) |        150 |      137 | 
+---------------------------------------------------------------+----------+-----------+------------+----------+ 
|                                                               |   38,239 |    37,068 |      5,051 |    4,448 | 
+---------------------------------------------------------------+----------+-----------+------------+----------+ 
|                                                               |          |           |            |          | 
+---------------------------------------------------------------+----------+-----------+------------+----------+ 
|                                                  Discontinued |          |           |            |          | 
|                                                  operations   |          |           |            |          | 
+---------------------------------------------------------------+----------+-----------+------------+----------+ 
|                                                  Power        |        3 |   (1,982) |      3,182 |    2,994 | 
|                                                  plant        |          |           |            |          | 
+---------------------------------------------------------------+----------+-----------+------------+----------+ 
|                                                               |          |           |            |          | 
+---------------------------------------------------------------+----------+-----------+------------+----------+ 
|                                                  Total        |   38,242 |    35,086 |      8,233 |    7,442 | 
+---------------------------------------------------------------+----------+-----------+------------+----------+ 
|                                                               |          |           |            |          | 
+---------------------------------------------------------------+----------+-----------+------------+----------+ 
|                                                               |        Assets        |           Liabilities | 
+---------------------------------------------------------------+----------------------+-----------------------+ 
|                                                               |     2008 |      2007 |       2008 |     2007 | 
+---------------------------------------------------------------+----------+-----------+------------+----------+ 
|                                                  Represents   |  US$'000 |   US$'000 |    US$'000 |  US$'000 | 
|                                                  in balance   |          |           |            |          | 
|                                                  sheet        |          |           |            |          | 
+---------------------------------------------------------------+----------+-----------+------------+----------+ 
|                                                               |          |           |            |          | 
+---------------------------------------------------------------+----------+-----------+------------+----------+ 
|                                                  Non-current  |   29,222 |    26,222 |      5,201 |    2,702 | 
+---------------------------------------------------------------+----------+-----------+------------+----------+ 
|                                                  Current      |    9,020 |     8,864 |      3,032 |    4,740 | 
+---------------------------------------------------------------+----------+-----------+------------+----------+ 
|                                                               |          |           |            |          | 
+---------------------------------------------------------------+----------+-----------+------------+----------+ 
|                                                  Total        |   38,242 |    35,086 |      8,233 |    7,442 | 
+---------------------------------------------------------------+----------+-----------+------------+----------+ 
 
 
 
 
+---------------------------------------------------------------+--------------+------------------+--------------------+ 
|                                iii)                           |              |                  |                    | 
|                                Other                          |              |                  |                    | 
|                                information                    |              |                  |                    | 
+---------------------------------------------------------------+--------------+------------------+--------------------+ 
|                                                               |                      Continuing                      | 
|                                                               |                      Operations                      | 
+---------------------------------------------------------------+------------------------------------------------------+ 
|                                                               |     Terminal |          Trading |                    | 
+---------------------------------------------------------------+--------------+------------------+--------------------+ 
|                                                               |          and |              and |                    | 
+---------------------------------------------------------------+--------------+------------------+--------------------+ 
|                                                               |      barging |           others |              Total | 
|                                                               |     services |                  |                    | 
+---------------------------------------------------------------+--------------+------------------+--------------------+ 
|                                                               |      US$'000 |          US$'000 |            US$'000 | 
+---------------------------------------------------------------+--------------+------------------+--------------------+ 
|                                                               |              |                  |                    | 
+---------------------------------------------------------------+--------------+------------------+--------------------+ 
|                                                  Capital      |        2,811 |              352 |              3,163 | 
|                                                  expenditure  |              |                  |                    | 
+---------------------------------------------------------------+--------------+------------------+--------------------+ 
|                                                  Depreciation |        1,431 |              317 |              1,748 | 
+---------------------------------------------------------------+--------------+------------------+--------------------+ 
|                                                  Loss         |            - |                3 |                  3 | 
|                                                  on           |              |                  |                    | 
|                                                  disposal     |              |                  |                    | 
|                                                  of           |              |                  |                    | 
|                                                               |              |                  |                    | 
|                                                  property,    |              |                  |                    | 
|                                                  plant and    |              |                  |                    | 
|                                                               |              |                  |                    | 
|                                                  equipment    |              |                  |                    | 
+---------------------------------------------------------------+--------------+------------------+--------------------+ 
 
 
 
 
+-----------------------------------------------------------+------------+------+--+------+------------+----------+ 
|                                iv)    Geographical                            |  |      |            |          | 
|                                (secondary) segment                            |  |      |            |          | 
|                                information                                    |  |      |            |          | 
+-------------------------------------------------------------------------------+--+------+------------+----------+ 
|                                                           |          Revenue            |        Segment assets | 
+-----------------------------------------------------------+-----------------------------+-----------------------+ 
|                                                           |       2008 |           2007 |       2008 |     2007 | 
+-----------------------------------------------------------+------------+----------------+------------+----------+ 
|                                                           |    US$'000 |        US$'000 |    US$'000 |  US$'000 | 
+-----------------------------------------------------------+------------+----------------+------------+----------+ 
|                                                  Analysis |            |                |            |          | 
|                                                  by       |            |                |            |          | 
|                                                  origin:  |            |                |            |          | 
+-----------------------------------------------------------+------------+----------------+------------+----------+ 
|                                                           |            |                |            |          | 
+-----------------------------------------------------------+------------+----------------+------------+----------+ 
|                                                  Hong     |      2,048 |            944 |      3,242 |   23,872 | 
|                                                  Kong     |            |                |            |          | 
+-----------------------------------------------------------+------------+----------------+------------+----------+ 
|                                                  Mainland |     12,252 |          9,916 |     26,796 |    5,406 | 
|                                                  China    |            |                |            |          | 
+-----------------------------------------------------------+------------+----------------+------------+----------+ 
|                                                  United   |          - |              - |       (29) |  (1,634) | 
|                                                  Kingdom  |            |                |            |          | 
+-----------------------------------------------------------+------------+----------------+------------+----------+ 
|                                                           |            |                |            |          | 
+-----------------------------------------------------------+------------+----------------+------------+----------+ 
|                                                           |     14,300 |         10,860 |     30,009 |   27,644 | 
+-----------------------------------------------------------+------------+----------------+------------+----------+ 
|                                                           |            |                |            |          | 
+-----------------------------------------------------------+------------+------+--+------+------------+----------+ 
 
 
 
 
+----+------------------------------------------------+-------------+----------+ 
| 5. | OTHER INCOME                                   |        2008 |     2007 | 
|    |                                                |     US$'000 |  US$'000 | 
+----+------------------------------------------------+-------------+----------+ 
|    |                                                |             |          | 
+----+------------------------------------------------+-------------+----------+ 
|    | Exchange gains                                 |          44 |      269 | 
+----+------------------------------------------------+-------------+----------+ 
|    | Rental income                                  |           - |      224 | 
+----+------------------------------------------------+-------------+----------+ 
|    | Others                                         |         111 |      112 | 
+----+------------------------------------------------+-------------+----------+ 
|    |                                                |             |          | 
+----+------------------------------------------------+-------------+----------+ 
|    |                                                |         155 |      605 | 
+----+------------------------------------------------+-------------+----------+ 
|    |                                                |             |          | 
+----+------------------------------------------------+-------------+----------+ 
 
 
 
 
+----+------------------------------------------------+--------------+--------------+ 
| 6. | PROFIT/(LOSS) BEFORE TAXATION                  |              |              | 
+----+------------------------------------------------+--------------+--------------+ 
|    |                                                |              |              | 
+----+------------------------------------------------+--------------+--------------+ 
|    | Profit/(loss) before taxation is stated after  |              |              | 
|    | charging:                                      |              |              | 
+----+------------------------------------------------+--------------+--------------+ 
|    |                                                |         2008 |         2007 | 
|    |                                                |      US$'000 |      US$'000 | 
+----+------------------------------------------------+--------------+--------------+ 
| a) | Finance costs                                  |              |              | 
+----+------------------------------------------------+--------------+--------------+ 
|    |   Interest on                                  |              |              | 
+----+------------------------------------------------+--------------+--------------+ 
|    |          - Finance leases                      |           43 |            - | 
+----+------------------------------------------------+--------------+--------------+ 
|    |          - Bank loan                           |          133 |          120 | 
+----+------------------------------------------------+--------------+--------------+ 
|    |                                                |              |              | 
+----+------------------------------------------------+--------------+--------------+ 
|    |                                                |          176 |          120 | 
+----+------------------------------------------------+--------------+--------------+ 
| b) | Staff costs (including directors'              |              |              | 
|    | remuneration)                                  |              |              | 
+----+------------------------------------------------+--------------+--------------+ 
|    |   Wages and salaries                           |        1,681 |          957 | 
|    |     - included in cost of sales                |              |              | 
+----+------------------------------------------------+--------------+--------------+ 
|    |     - included in administrative expenses      |          635 |          610 | 
+----+------------------------------------------------+--------------+--------------+ 
|    |   Other pension costs                          |           19 |           20 | 
+----+------------------------------------------------+--------------+--------------+ 
|    |   Other staff welfare                          |            3 |           23 | 
+----+------------------------------------------------+--------------+--------------+ 
|    |                                                |              |              | 
+----+------------------------------------------------+--------------+--------------+ 
|    |                                                |        2,338 |        1,610 | 
+----+------------------------------------------------+--------------+--------------+ 
|    | Employees                                      |                             | 
+----+------------------------------------------------+-----------------------------+ 
|    |                                                |         2008 |         2007 | 
+----+------------------------------------------------+--------------+--------------+ 
|    |                                                |    Number of |    Number of | 
|    |                                                |        staff |        staff | 
+----+------------------------------------------------+--------------+--------------+ 
|    |                                                |              |              | 
+----+------------------------------------------------+--------------+--------------+ 
|    | The average monthly number of persons          |              |              | 
|    | (including directors) employed by the Group    |              |              | 
|    | during the year was:                           |              |              | 
+----+------------------------------------------------+--------------+--------------+ 
|    |   Management and administration                |           40 |           31 | 
+----+------------------------------------------------+--------------+--------------+ 
|    |   Sales and distribution                       |           17 |            7 | 
+----+------------------------------------------------+--------------+--------------+ 
|    |   Operations                                   |          379 |          282 | 
+----+------------------------------------------------+--------------+--------------+ 
|    |                                                |              |              | 
+----+------------------------------------------------+--------------+--------------+ 
|    |                                                |          436 |          320 | 
+----+------------------------------------------------+--------------+--------------+ 
 
 
Staff costs are included within administrative expenses in the income statement. 
 
 
+----+------------------------------------------------+------------+-----+-----------+ 
|    |                                                |             2008 |      2007 | 
|    |                                                |          US$'000 |   US$'000 | 
+----+------------------------------------------------+------------------+-----------+ 
| c) | Other items                                    |            |                 | 
+----+------------------------------------------------+------------+-----------------+ 
|    |                                                |            |                 | 
+----+------------------------------------------------+------------+-----------------+ 
|    | Fees payable to Baker Tilly UK Audit LLP       |         34 |              36 | 
|    | for the audit of Company's annual financial    |            |                 | 
|    | statements                                     |            |                 | 
+----+------------------------------------------------+------------+-----------------+ 
|    | Fees payable to associates of company's        |            |                 | 
|    | auditors                                       |            |                 | 
+----+------------------------------------------------+------------+-----------------+ 
|    |   for other services:                          |            |                 | 
+----+------------------------------------------------+------------+-----------------+ 
|    |  The audit of the Company's subsidiaries       |         41 |              49 | 
+----+------------------------------------------------+------------+-----------------+ 
|    | Depreciation                                   |      1,748 |           1,178 | 
+----+------------------------------------------------+------------+-----------------+ 
|    | Loss on disposal of property, plant and        |          3 |              95 | 
|    | equipment                                      |            |                 | 
+----+------------------------------------------------+------------+-----------------+ 
|    | Rentals under operating leases                 |        151 |              77 | 
|    | - land and buildings                           |            |                 | 
+----+------------------------------------------------+------------+-----------------+ 
|    | - barges and containers                        |          - |             222 | 
+----+------------------------------------------------+------------+-----------------+ 
|    | - motor vehicles                               |          - |               8 | 
+----+------------------------------------------------+------------+-----------------+ 
|    | Directors' remuneration (note 8)               |            |                 | 
+----+------------------------------------------------+------------+-----------------+ 
|    | - Directors' emoluments - salaries             |        130 |             176 | 
+----+------------------------------------------------+------------+-----------------+ 
|    | - Directors' emoluments - pension costs        |         1  |               6 | 
+----+------------------------------------------------+------------+-----------------+ 
|    |                                                |            |                 | 
+----+------------------------------------------------+------------+-----------------+ 
|    | Exceptional items                              |            |                 | 
+----+------------------------------------------------+------------+-----------------+ 
|    | Impairment of goodwill                         |          - |           9,010 | 
+----+------------------------------------------------+------------+-----------------+ 
|    | Impairment loss on property, plant and         |          - |           1,131 | 
|    | equipment                                      |            |                 | 
+----+------------------------------------------------+------------+-----------------+ 
|    |                                                |            |                 | 
+----+------------------------------------------------+------------+-----------------+ 
|    |                                                |          - |          10,141 | 
+----+------------------------------------------------+------------+-----+-----------+ 
 
 
+----+------------------------------------------------+------------+------------+ 
| 7. | TAXATION                                       |            |            | 
+----+------------------------------------------------+------------+------------+ 
|    |      The amount of income tax expense charged to the consolidated income | 
|    |                                                    statement represents: | 
+----+--------------------------------------------------------------------------+ 
|    |                                                |            |            | 
+----+------------------------------------------------+------------+------------+ 
|    |                                                |       2008 |       2007 | 
|    |                                                |    US$'000 |    US$'000 | 
+----+------------------------------------------------+------------+------------+ 
|    |                                                |            |            | 
+----+------------------------------------------------+------------+------------+ 
|    | Overseas tax:                                  |        247 |        142 | 
|    | current year                                   |            |            | 
+----+------------------------------------------------+------------+------------+ 
 
 
+----+------------------------------------------------+------------+------------+ 
|    |     The actual tax expense can be reconciled to the profit/(loss) before | 
|    |                taxation in the consolidated income statement as follows: | 
+----+--------------------------------------------------------------------------+ 
|    |                                                |       2008 |       2007 | 
|    |                                                |    US$'000 |    US$'000 | 
+----+------------------------------------------------+------------+------------+ 
|    |                                                |            |            | 
+----+------------------------------------------------+------------+------------+ 
|    | Profit/(loss) before tax                       |      1,315 |   (10,809) | 
+----+------------------------------------------------+------------+------------+ 
|    |                                                |            |            | 
+----+------------------------------------------------+------------+------------+ 
|    |                   Notional tax at the standard |        368 |    (3,243) | 
|    |                   rate of corporation tax      |            |            | 
|    |                     in the UK of 28% (2007:    |            |            | 
|    |                   30%)                         |            |            | 
+----+------------------------------------------------+------------+------------+ 
|    | Effects of:                                    |            |            | 
+----+------------------------------------------------+------------+------------+ 
|    |                   Different tax rates on       |      (173) |         93 | 
|    |                   overseas earnings            |            |            | 
+----+------------------------------------------------+------------+------------+ 
|    |                   Expenses not deductible for  |        134 |      4,849 | 
|    |                   tax purposes                 |            |            | 
+----+------------------------------------------------+------------+------------+ 
|    |                   Non-taxable income           |       (31) |    (1,564) | 
+----+------------------------------------------------+------------+------------+ 
|    |                   Temporary differences        |       (14) |          - | 
+----+------------------------------------------------+------------+------------+ 
|    |                   Utilisation of tax losses    |       (43) |          7 | 
|    |                   previously not recognised    |            |            | 
+----+------------------------------------------------+------------+------------+ 
|    |                   Addition to tax losses       |          7 |          - | 
+----+------------------------------------------------+------------+------------+ 
|    |                   Change in tax rate           |        (1) |          - | 
+----+------------------------------------------------+------------+------------+ 
|    |                                                |            |            | 
+----+------------------------------------------------+------------+------------+ 
|    | Tax charge for the year                        |        247 |        142 | 
+----+------------------------------------------------+------------+------------+ 
|    |                                                |            |            | 
+----+------------------------------------------------+------------+------------+ 
 
 
 
 
In respect of subsidiaries operating in Hong Kong, no provision for Hong Kong 
profits tax are provided as there are sufficient tax losses brought forward to 
set off against current year's assessable profit. 
 
 
Subsidiaries operating in the PRC are subject to Enterprise Income Tax ('EIT') 
at a rate of 18%. However, certain subsidiaries are subject to tax holidays from 
the local tax authorities under income tax law. Others had tax losses brought 
forward from previous years. 
 
 
On 16 March 2007, the National People's Congress passed the Corporate Income Tax 
Law of the PRC (the "new tax law"). Under the new tax law, the statutory income 
tax rate applicable to the company's subsidiaries in Shenzhen is changed from 
15% to 25% progressively within five years from 1 January 2008 (2008: 18%; 2009: 
20%; 2010: 22%; 2011: 25%). The new tax law has been applied when measuring the 
group's current tax payable as at 31 December 2008. 
 
 
No deferred tax is recognised on the unremitted earnings of the overseas 
subsidiary companies, as no dividend payments due to UK parent company are 
expected to be made in the foreseeable future. A deferred tax asset of 
approximately US$665,000 (2007: approximately US$879,000) has not been 
recognised in respect of tax losses carried forward due to the uncertainty of 
the timing of future taxable profits against which these losses can be offset. 
 
 
 
 
  8.DIRECTORS' REMUNERATION 
 
 
Apart from US$130,551 (2007: US$181,821), as disclosed in note 6(c), that were 
paid to the directors by Group companies, no additional fees (2007: US$47,494) 
were paid to directors through Winbest Resources Limited, a company which is 
ultimately controlled by Chin Dynasty Foundation Limited. For the purpose of 
this disclosure, the directors are considered to be key management of the Group. 
 
 
9.    DIVIDEND 
 
 
    The directors do not recommend the payment of any dividend. 
 
 
10.    EARNINGS/(LOSS) PER SHARE 
 
 
i)      From continuing operations 
 
 
The calculation of basic earnings per share is based on the profit attributable 
to equity shareholders of the Parent Company of US$0.360 million (2007: loss of 
US$9.987 million) and the weighted average number of shares in issue of 
1,978,895,139 for the two years ended 31 December 2008. 
 
 
ii)      From discontinued operations 
 
 
The calculation of basic earnings per share is based on the loss attributable to 
equity shareholders of the Parent Company of US$ nil (2007: loss of US$21.288 
million) and the weighted average number of shares in issue of 1,978,895,139 for 
the two years ended 31 December 2008. 
 
 
11.GOODWILL 
 
 
+-----------------------------------------------------+------------+------------+ 
|                                                     |          Group          | 
+-----------------------------------------------------+-------------------------+ 
|                                                     |       2008 |       2007 | 
+-----------------------------------------------------+------------+------------+ 
|                                                     |    US$'000 |    US$'000 | 
+-----------------------------------------------------+------------+------------+ 
|                            Cost:                    |     22,806 |     22,807 | 
|                            At 1 January             |            |            | 
+-----------------------------------------------------+------------+------------+ 
|                            Exchange realignment     |          1 |        (1) | 
+-----------------------------------------------------+------------+------------+ 
|                                                     |            |            | 
+-----------------------------------------------------+------------+------------+ 
|                            At 31 December           |     22,807 |     22,806 | 
+-----------------------------------------------------+------------+------------+ 
|                                                     |            |            | 
+-----------------------------------------------------+------------+------------+ 
|                            Provision:               |     20,972 |      1,995 | 
|                            At 1 January             |            |            | 
+-----------------------------------------------------+------------+------------+ 
|                            Impairment charge for    |          - |     18,977 | 
|                            the year                 |            |            | 
+-----------------------------------------------------+------------+------------+ 
|                                                     |            |            | 
+-----------------------------------------------------+------------+------------+ 
|                            At 31 December           |     20,972 |     20,972 | 
+-----------------------------------------------------+------------+------------+ 
|                                                     |            |            | 
+-----------------------------------------------------+------------+------------+ 
|                            Net book value:          |      1,835 |      1,834 | 
|                            At 31 December           |            |            | 
+-----------------------------------------------------+------------+------------+ 
|                                                     |            |            | 
+-----------------------------------------------------+------------+------------+ 
|                            At 1 January             |      1,834 |     20,812 | 
+-----------------------------------------------------+------------+------------+ 
|                                                     |            |            | 
+-----------------------------------------------------+------------+------------+ 
 
 
Commencing from 1 January 2006, no amortisation of goodwill was provided and an 
annual impairment test is made to assess the fair value of goodwill. 
 
 
The impairment charge in the year ended 31 December 2007 was in respect of the 
cessation of the Group's power plant operation and other discontinued activities 
during the prior year. The goodwill balance at 31 December 2008 relates to the 
Group's remaining operations. 
 
 
+---------------------------------------------+-----------+-------+--+--+------------+---------+---------+----------+--------------+---------+---+ 
|                                                                 |  |  |            |         |         |          |              |         | 
+-----------------------------------------------------------------+--+--+------------+---------+---------+----------+--------------+---------+ 
| 12.    PROPERTY, PLANT AND EQUIPMENT                            |  |  |            |         |         |          |              |         | 
+-----------------------------------------------------------------+--+--+------------+---------+---------+----------+--------------+---------+ 
|                                             |      Land |   Plant and | Furniture, |     Oil | Vessels |    Motor | Construction |   Total | 
|                                             |       and |   machinery |   fixtures | storage |         | vehicles |  in progress |         | 
|                                             | buildings |             |        and |   tanks |         |          |              |         | 
|                                             |           |             |  equipment |         |         |          |              |         | 
+---------------------------------------------+-----------+-------------+------------+---------+---------+----------+--------------+---------+ 
|                            GROUP            |   US$'000 |     US$'000 |    US$'000 | US$'000 | US$'000 |  US$'000 |      US$'000 | US$'000 | 
+---------------------------------------------+-----------+-------------+------------+---------+---------+----------+--------------+---------+ 
|                            Cost             |           |             |            |         |         |          |              |         | 
|                                             |           |             |            |         |         |          |              |         | 
+---------------------------------------------+-----------+-------------+------------+---------+---------+----------+--------------+---------+ 
|                            At               |    21,905 |      23,407 |      8,165 |     173 |   1,725 |      715 |          705 |  56,795 | 
|                            1                |           |             |            |         |         |          |              |         | 
|                            January          |           |             |            |         |         |          |              |         | 
|                            2007             |           |             |            |         |         |          |              |         | 
+---------------------------------------------+-----------+-------------+------------+---------+---------+----------+--------------+---------+ 
|                            Exchange         |       787 |       1,239 |        519 |       - |       - |       17 |            - |   2,562 | 
|                            realignment      |           |             |            |         |         |          |              |         | 
+---------------------------------------------+-----------+-------------+------------+---------+---------+----------+--------------+---------+ 
|                            Additions        |       239 |       3,010 |        104 |       - |     831 |      136 |          867 |   5,187 | 
+---------------------------------------------+-----------+-------------+------------+---------+---------+----------+--------------+---------+ 
|                            Transfer         |       693 |           - |          - |       - |       - |        - |        (693) |       - | 
+---------------------------------------------+-----------+-------------+------------+---------+---------+----------+--------------+---------+ 
|                            Disposals        |         - |           - |          - |       - |   (430) |        - |            - |   (430) |   | 
+---------------------------------------------+-----------+-------------+------------+---------+---------+----------+--------------+---------+---+ 
|                                             |           |             |            |         |         |          |              |         | 
+---------------------------------------------+-----------+-------------+------------+---------+---------+----------+--------------+---------+ 
|                            At               |    23,624 |      27,656 |      8,788 |     173 |   2,126 |      868 |          879 |  64,114 | 
|                            1                |           |             |            |         |         |          |              |         | 
|                            January          |           |             |            |         |         |          |              |         | 
|                            2008             |           |             |            |         |         |          |              |         | 
+---------------------------------------------+-----------+-------------+------------+---------+---------+----------+--------------+---------+ 
|                            Reclassification |         9 |         138 |       (65) |       - |       - |     (82) |            - |       - | 
+---------------------------------------------+-----------+-------------+------------+---------+---------+----------+--------------+---------+ 
|                            Additions        |     1,313 |         779 |         39 |       - |     324 |       60 |          648 |   3,163 | 
+---------------------------------------------+-----------+-------------+------------+---------+---------+----------+--------------+---------+ 
|                            Disposals        |      (27) |           - |        (4) |       - |       - |        - |            - |    (31) | 
+---------------------------------------------+-----------+-------------+------------+---------+---------+----------+--------------+---------+ 
|                            Transfer         |         - |         965 |          - |       - |       - |        - |        (965) |       - | 
+---------------------------------------------+-----------+-------------+------------+---------+---------+----------+--------------+---------+ 
|                            Exchange         |     2,705 |         468 |      (109) |       - |       - |       36 |           32 |   3,132 | 
|                            realignment      |           |             |            |         |         |          |              |         | 
+---------------------------------------------+-----------+-------------+------------+---------+---------+----------+--------------+---------+ 
|                                             |           |             |            |         |         |          |              |         | 
+---------------------------------------------+-----------+-------------+------------+---------+---------+----------+--------------+---------+ 
|                            At               |    27,624 |      30,006 |      8,649 |     173 |   2,450 |      882 |          594 |  70,378 | 
|                            31               |           |             |            |         |         |          |              |         | 
|                            December         |           |             |            |         |         |          |              |         | 
|                            2008             |           |             |            |         |         |          |              |         | 
+---------------------------------------------+-----------+-------------+------------+---------+---------+----------+--------------+---------+ 
|                                             |           |             |            |         |         |          |              |         | 
+---------------------------------------------+-----------+-------------+------------+---------+---------+----------+--------------+---------+ 
|                            Depreciation     |           |             |            |         |         |          |              |         | 
+---------------------------------------------+-----------+-------------+------------+---------+---------+----------+--------------+---------+ 
|                            At               |     6,961 |      10,336 |      5,157 |      13 |     912 |      573 |            - |  23,952 | 
|                            1                |           |             |            |         |         |          |              |         | 
|                            January          |           |             |            |         |         |          |              |         | 
|                            2007             |           |             |            |         |         |          |              |         | 
+---------------------------------------------+-----------+-------------+------------+---------+---------+----------+--------------+---------+ 
|                            Exchange         |       292 |         607 |        339 |       - |     (5) |       16 |            - |   1,249 |   | 
|                            realignment      |           |             |            |         |         |          |              |         |   | 
+---------------------------------------------+-----------+-------------+------------+---------+---------+----------+--------------+---------+---+ 
|                            Charge           |       546 |         509 |        272 |       - |     177 |       75 |            - |   1,579 | 
|                            for              |           |             |            |         |         |          |              |         | 
|                            the              |           |             |            |         |         |          |              |         | 
|                            year             |           |             |            |         |         |          |              |         | 
|                            (Note)           |           |             |            |         |         |          |              |         | 
+---------------------------------------------+-----------+-------------+------------+---------+---------+----------+--------------+---------+ 
|                            Disposals        |         - |           - |          - |       - |   (236) |        - |            - |   (236) | 
+---------------------------------------------+-----------+-------------+------------+---------+---------+----------+--------------+---------+ 
|                            Impairment       |     2,999 |       7,891 |      2,257 |       - |       - |       27 |           20 |  13,194 | 
|                            charge           |           |             |            |         |         |          |              |         | 
+---------------------------------------------+-----------+-------------+------------+---------+---------+----------+--------------+---------+ 
|                                             |           |             |            |         |         |          |              |         | 
+---------------------------------------------+-----------+-------------+------------+---------+---------+----------+--------------+---------+ 
|                            At               |    10,798 |      19,343 |      8,025 |      13 |     848 |      691 |           20 |  39,738 | 
|                            1                |           |             |            |         |         |          |              |         | 
|                            January          |           |             |            |         |         |          |              |         | 
|                            2008             |           |             |            |         |         |          |              |         | 
+---------------------------------------------+-----------+-------------+------------+---------+---------+----------+--------------+---------+ 
|                            Reclassification |      (87) |         126 |       (13) |       - |       - |     (26) |            - |       - | 
+---------------------------------------------+-----------+-------------+------------+---------+---------+----------+--------------+---------+ 
|                            Charge           |       631 |         704 |        142 |       - |     213 |       58 |            - |   1,748 | 
|                            for              |           |             |            |         |         |          |              |         | 
|                            the              |           |             |            |         |         |          |              |         | 
|                            year             |           |             |            |         |         |          |              |         | 
|                            (Note)           |           |             |            |         |         |          |              |         | 
+---------------------------------------------+-----------+-------------+------------+---------+---------+----------+--------------+---------+ 
|                            Written-back     |      (27) |           - |        (1) |       - |       - |        - |            - |    (28) | 
|                            on disposal      |           |             |            |         |         |          |              |         | 
+---------------------------------------------+-----------+-------------+------------+---------+---------+----------+--------------+---------+ 
|                            Exchange         |     1,852 |       (106) |      (197) |       - |     (1) |       17 |         (20) |   1,545 | 
|                            realignment      |           |             |            |         |         |          |              |         | 
+---------------------------------------------+-----------+-------------+------------+---------+---------+----------+--------------+---------+ 
|                                             |           |             |            |         |         |          |              |         | 
+---------------------------------------------+-----------+-------------+------------+---------+---------+----------+--------------+---------+ 
|                            At               |    13,167 |      20,067 |      7,956 |      13 |   1,060 |      740 |            - |  43,003 | 
|                            31               |           |             |            |         |         |          |              |         | 
|                            December         |           |             |            |         |         |          |              |         | 
|                            2008             |           |             |            |         |         |          |              |         | 
+---------------------------------------------+-----------+-------------+------------+---------+---------+----------+--------------+---------+ 
|                                             |           |             |            |         |         |          |              |         | 
+---------------------------------------------+-----------+-------------+------------+---------+---------+----------+--------------+---------+ 
|                            Net              |           |             |            |         |         |          |              |         | 
|                            book             |           |             |            |         |         |          |              |         | 
|                            value            |           |             |            |         |         |          |              |         | 
+---------------------------------------------+-----------+-------------+------------+---------+---------+----------+--------------+---------+ 
|                            At               |    14,457 |       9,939 |        693 |     160 |   1,390 |      142 |          594 |  27,375 | 
|                            31               |           |             |            |         |         |          |              |         | 
|                            December         |           |             |            |         |         |          |              |         | 
|                            2008             |           |             |            |         |         |          |              |         | 
+---------------------------------------------+-----------+-------------+------------+---------+---------+----------+--------------+---------+ 
|                            At               |    12,826 |       8,313 |        763 |     160 |   1,278 |      177 |          859 |  24,376 | 
|                            31               |           |             |            |         |         |          |              |         | 
|                            December         |           |             |            |         |         |          |              |         | 
|                            2007             |           |             |            |         |         |          |              |         | 
+---------------------------------------------+-----------+-------------+------------+---------+---------+----------+--------------+---------+ 
|                            At               |    14,944 |      13,071 |      3,008 |     160 |     813 |      142 |          705 |  32,843 | 
|                            31               |           |             |            |         |         |          |              |         | 
|                            December         |           |             |            |         |         |          |              |         | 
|                            2006             |           |             |            |         |         |          |              |         | 
+---------------------------------------------+-----------+-------+--+--+------------+---------+---------+----------+--------------+---------+---+ 
 
 
Note: Of the depreciation charge for the year, US$1,087,000 (2007: US$788,000) 
is included in cost of sales, US$661,000 (2007: US$390,000) is included in 
administrative expenses and US$Nil (2007:US$401,000) is included in exceptional 
item, in the income statement. The impairment charge was made as a result of the 
cessation of the Group's power plant operation during the prior year. 
 
 
At 31 December 2008, the net book values of land and buildings, plant and 
machinery, furniture, fixtures and equipment are further analysed as follows: 
+-------------------------------------------------+--------------+--------------+------------+ 
|                                                 |     Terminal |       Others |      Total | 
|                                                 |      US$'000 |      US$'000 |    US$'000 | 
+-------------------------------------------------+--------------+--------------+------------+ 
|                                     Land        |        2,530 |            - |      2,530 | 
|                                     -           |              |              |            | 
|                                     short       |              |              |            | 
|                                     lease       |              |              |            | 
+-------------------------------------------------+--------------+--------------+------------+ 
|                                     -           |        1,378 |            - |      1,378 | 
|                                     unspecified |              |              |            | 
|                                     leases      |              |              |            | 
+-------------------------------------------------+--------------+--------------+------------+ 
|                                                 |              |              |            | 
+-------------------------------------------------+--------------+--------------+------------+ 
|                                                 |        3,908 |            - |      3,908 | 
+-------------------------------------------------+--------------+--------------+------------+ 
|                                     Buildings   |       10,549 |            - |     10,549 | 
+-------------------------------------------------+--------------+--------------+------------+ 
|                                                 |              |              |            | 
+-------------------------------------------------+--------------+--------------+------------+ 
|                                     Land        |       14,457 |            - |     14,457 | 
|                                     and         |              |              |            | 
|                                     buildings   |              |              |            | 
+-------------------------------------------------+--------------+--------------+------------+ 
|                                                 |              |              |            | 
+-------------------------------------------------+--------------+--------------+------------+ 
|                                     Plant       |        9,939 |            - |      9,939 | 
|                                     and         |              |              |            | 
|                                     machinery   |              |              |            | 
+-------------------------------------------------+--------------+--------------+------------+ 
|                                                 |              |              |            | 
+-------------------------------------------------+--------------+--------------+------------+ 
|                                     Furniture,  |          125 |          568 |        693 | 
|                                     fixtures    |              |              |            | 
|                                     and         |              |              |            | 
|                                     equipment   |              |              |            | 
+-------------------------------------------------+--------------+--------------+------------+ 
|                                                 |              |              |            | 
+-------------------------------------------------+--------------+--------------+------------+ 
 
 
On 31 December 2003, a guarantee was given by the Company's subsidiary, Keen 
Chance Terminal (GZ) Company Limited ("KCT") for banking facilities granted to a 
fellow investor, Miaotou Economic Development Company Limited ("MEDCL"), in KCT 
(see note 27(b)). 
The Group has obtained land use right and real estates certificates on the 
terminal's land under short leases from the local land authority. Land with a 
value of US$ 1,378,309 held under unspecified leases of the terminal is land 
held for industrial use for which the relevant land use right certificate has 
not been obtained and thus the term of the lease has yet to be agreed. 
Included in land and buildings is short lease land on which the power plant, 
related ash storage pools and ancillary facilities are located. In addition, 
they also include land held for industrial use in respect of which the Group has 
not obtained the relevant land use right certificate. 
Under the law of the PRC, land held for industrial use and the buildings without 
building ownership certificates can only be used for identified industrial 
purposes. The Group has not obtained any building ownership certificates in 
respect of the buildings of the Group. The Group cannot legally sell or mortgage 
such properties until the relevant land taxes have been paid to the local land 
authority. However there is no binding agreement for the taxes to be paid. 
 
 
+-----+-------------------------------------------------+-----------+------------+ 
| 13. | INVESTMENTS IN SUBSIDIARIES                     |           |            | 
+-----+-------------------------------------------------+-----------+------------+ 
|     |                                                 |                Company | 
+-----+-------------------------------------------------+------------------------+ 
|     |                                                 |      2008 |       2007 | 
|     |                                                 |   US$'000 |    US$'000 | 
+-----+-------------------------------------------------+-----------+------------+ 
|     | Unlisted shares, at cost:                       |           |            | 
+-----+-------------------------------------------------+-----------+------------+ 
|     | At 1 January 2008 and 31 December 2008          |    56,015 |     56,015 | 
+-----+-------------------------------------------------+-----------+------------+ 
|     |                                                 |           |            | 
+-----+-------------------------------------------------+-----------+------------+ 
|     | Provision for impairment:                       |           |            | 
+-----+-------------------------------------------------+-----------+------------+ 
|     | At 1 January                                    |    31,797 |          - | 
+-----+-------------------------------------------------+-----------+------------+ 
|     | Charge for the year                             |     5,462 |     31,797 | 
+-----+-------------------------------------------------+-----------+------------+ 
|     | At 31 December                                  |    37,259 |     31,797 | 
+-----+-------------------------------------------------+-----------+------------+ 
|     |                                                 |           |            | 
+-----+-------------------------------------------------+-----------+------------+ 
|     | Net book value:                                 |           |            | 
+-----+-------------------------------------------------+-----------+------------+ 
|     | At 31 December                                  |    18,756 |     24,218 | 
+-----+-------------------------------------------------+-----------+------------+ 
|     |                                                 |           |            | 
+-----+-------------------------------------------------+-----------+------------+ 
|     | At 1 January                                    |    24,218 |     56,015 | 
+-----+-------------------------------------------------+-----------+------------+ 
At 31 December 2008, the Company held 100% of the ordinary shares of Arko 
Offshore Holdings Limited #, a company incorporated in the British Virgin Island 
("BVI"), whose principal activity was that of a holding company. Arko Offshore 
Holdings Limited had the following subsidiaries undertakings: 
 
 
+----+------------+------------+------------+------------+------------+-----------------+ 
|                 |    Equity interests     |                         |                 | 
+-----------------+-------------------------+-------------------------+-----------------+ 
|                 |      attributable       |                         | Place of        | 
+-----------------+-------------------------+-------------------------+-----------------+ 
| Name            |      to the group       | Principal activities    | incorporation   | 
+-----------------+-------------------------+-------------------------+-----------------+ 
|                 |                         |                         |                 | 
+-----------------+-------------------------+-------------------------+-----------------+ 
| Arko Energy     |          100%           | Investment holding      | BVI             | 
| Limited.*  #    |                         |                         |                 | 
+-----------------+-------------------------+-------------------------+-----------------+ 
| Arko            |          100%           | Providing management    | BVI             | 
| Consultants     |                         | services                |                 | 
| Limited*  #     |                         |                         |                 | 
+-----------------+-------------------------+-------------------------+-----------------+ 
| Arko Pacific    |          100%           | Investment holding      | BVI             | 
| Limited*  #     |                         |                         |                 | 
+-----------------+-------------------------+-------------------------+-----------------+ 
| Long Prosperity |          100%           | Investment holding      | Republic of     | 
| Industrial      |                         |                         | Seychelles      | 
| Limited.        |                         |                         |                 | 
+-----------------+-------------------------+-------------------------+-----------------+ 
| Arko Silicon    |          100%           | Dormant                 | PRC             | 
| (Hubei)         |                         |                         |                 | 
| Limited 1       |                         |                         |                 | 
|                 |                         |                         |                 | 
+-----------------+-------------------------+-------------------------+-----------------+ 
| Sanko Mineral   |          100%           | Sub-letting of yachts,  | BVI             | 
| Limited         |                         | ships and vessels       |                 | 
+-----------------+-------------------------+-------------------------+-----------------+ 
| Arko Shipping   |          100%           | Providing logistics     | Hong Kong       | 
| Limited. #      |                         | and related services    |                 | 
| (Formerly known |                         |                         |                 | 
| as Arko         |                         |                         |                 | 
| Logistics       |                         |                         |                 | 
| Limited.)       |                         |                         |                 | 
+-----------------+-------------------------+-------------------------+-----------------+ 
| Arko Satellite  |          100%           | Dormant                 | BVI             | 
| Limited .2      |                         |                         |                 | 
|                 |                         |                         |                 | 
+-----------------+-------------------------+-------------------------+-----------------+ 
| Arko Terminal   |          100%           | Investment holding      | Republic of     | 
| Limited ("ATL") |                         |                         | Seychelles      | 
| #               |                         |                         |                 | 
+-----------------+-------------------------+-------------------------+-----------------+ 
| Changzhou Power |          59.2%          | Inactive                | PRC             | 
|                 |                         |                         |                 | 
| Development     |                         |                         |                 | 
| Company Limited |                         |                         |                 | 
+-----------------+-------------------------+-------------------------+-----------------+ 
| Keen Chance     |          40%            | Investing in and        | PRC             | 
| Terminal (GZ)   |                         | operation of a terminal |                 | 
| Company         |                         |                         |                 | 
| Limited ("KCT") |                         | and providing logistics |                 | 
|                 |                         | services                |                 | 
+-----------------+-------------------------+-------------------------+-----------------+ 
| Fujian Sanko    |          70%            | Dormant                 | PRC             | 
| Mining Limited. |                         |                         |                 | 
+-----------------+-------------------------+-------------------------+-----------------+ 
|                                                                                       | 
+---------------------------------------------------------------------------------------+ 
| 1  Subsequently deregistered in March 2009                                            | 
+---------------------------------------------------------------------------------------+ 
|                                                                                       | 
+---------------------------------------------------------------------------------------+ 
| 2   Subsequently disposed on 23 March 2009                                            | 
+---------------------------------------------------------------------------------------+ 
|                                                                                       | 
+---------------------------------------------------------------------------------------+ 
| * Directly held by Arko Offshore Holdings Limited. All other subsidiaries are         | 
| indirectly held.                                                                      | 
+---------------------------------------------------------------------------------------+ 
|                                                                                       | 
+---------------------------------------------------------------------------------------+ 
|                          #Subsequent to the balances sheet date, the management of    | 
|                          the Group recommended a change of name for certain of its    | 
|                          subsidiaries as listed below by passing relevant             | 
|                          board resolutions in each of the group companies to match    | 
|                          their core businesses with present operating activities in   | 
|                          terminal operation and barging service operation in mainland | 
|                          china:                                                       | 
|                                                                                       | 
+---------------------------------------------------------------------------------------+ 
| Present names                | New names               | Board resolution date        | 
+------------------------------+-------------------------+------------------------------+ 
| 1. | Arko Offshore Holdings  | Yinggao Investments     | 18 May 2009                  | 
|    | Limited                 | Limited                 |                              | 
+----+-------------------------+-------------------------+------------------------------+ 
| 2. | Arko Energy Limited     | Yinggao Energy Limited  | 18 May 2009                  | 
+----+-------------------------+-------------------------+------------------------------+ 
| 3. | Arko Consultants        | Yinggao Consultants     | 18 May 2009                  | 
|    | Limited                 | Limited                 |                              | 
+----+-------------------------+-------------------------+------------------------------+ 
| 4. | Arko Pacific Limited    | Yinggao Pacific Limited | 18 May 2009                  | 
+----+-------------------------+-------------------------+------------------------------+ 
| 5. | Arko Terminal Limited   | Yinggao Terminal        | 18 May 2009                  | 
|    |                         | Limited                 |                              | 
+----+-------------------------+-------------------------+------------------------------+ 
| 6. | Arko Shipping Limited   | Yinggao Shipping (H.K.) |   8 June 2009                | 
|    |                         | Limited                 |                              | 
+----+-------------------------+-------------------------+------------------------------+ 
|    |                         |                         |                              | 
+----+------------+------------+------------+------------+------------+-----------------+ 
 
 
The 40% equity interest in Keen Chance Terminal (GZ) Company Limited ("KCT") 
previously held by Keen Lloyd Energy Limited ("KLEL"), a subsidiary of Keen 
Lloyd Holdings Limited ("KLHL"), has been transferred to ATL. The transfer has 
been submitted for registration to the relevant PRC authorities. 
 
 
Pursuant to an agreement dated 5 April 2002 entered into between KLEL and 
Miaotou Economic Development Company Limited ("MEDCL"), (a shareholder of KCT 
who held a 30% equity interest in KCT), MEDCL agreed to vote in accordance with 
the instructions of KLEL at board meetings in view of its indebtedness to KLEL, 
for an approximate sum of RMB78 million (equivalent to US$9.4 million), and KLEL 
intended to convert the outstanding loan into registered capital of KCT. 
 
 
On 22 April 2003, KLEL entered into a shareholder agreement with MEDCL and 
Harbour Economic Development Company Limited ("HEDCL"), another shareholder in 
KCT, whereby all parties agreed that MEDCL has unconditionally transferred the 
authority empowered to its directors representative (including their rights and 
obligations) to KLEL until KLEL transferred the 40% equity interests in KCL to 
ATL to reiterate the aforesaid agreement dated 5 April 2002. 
 
 
On 16 May 2003, a supplemental agreement was entered into between ATL, KLEL, 
MEDCL and HEDCL by which all parties agreed that the above authority transferred 
to KLEL would be vested in ATL after KLEL completed the transfer of equity 
interests in KCT to ATL. 
 
 
 
 
In accordance with the terms and conditions set out in the above agreements, 
KLEL effectively controls the board of KCT and this arrangement has been 
confirmed by the shareholders of KCT. In 2002, a Hong Kong lawyer expressed his 
view that KCT is a subsidiary of KLEL under Hong Kong Company Law. Control of 
KLEL has been transferred to ATL and therefore in the opinion of the directors, 
KCT is a subsidiary of ATL under the Companies Act 1985. 
 
 
KCT will be a legal subsidiary of ATL immediately upon the registration of the 
transfer of the 40% of equity in KCT from KLEL to ATL. 
 
 
During the second half of 2007, pursuant to an agreement signed with the Hubei 
Provincial Economic Committee Bureau, Suizhou City Government and the Hubei 
Provincial Electricity Co., Ltd. on 30 June 2007, the power plant factory of 
Changzhou Power Development Company Limited has been ordered to close down its 
operation from July 2007 onwards owing to the macroeconomic and administrative 
measures imposed by the order of State Council to clear off those ineffective 
coal-fired power plants in Hubei Province. 
 
 
 
 
 
 
+-----------------------------------------+------------+------------+------------+ 
| 14.AVAILABLE-FOR-SALE INVESTMENTS       |            |            |            | 
+-----------------------------------------+------------+------------+------------+ 
|                                         |            |          Group          | 
+-----------------------------------------+------------+-------------------------+ 
|                                         |            |       2008 |       2007 | 
|                                         |            |    US$'000 |    US$'000 | 
+-----------------------------------------+------------+------------+------------+ 
|                                         |            |            |            | 
+-----------------------------------------+------------+------------+------------+ 
|                            Unlisted in  |            |         12 |         12 | 
|                            the PRC      |            |            |            | 
+-----------------------------------------+------------+------------+------------+ 
|                                         |            |            |            | 
+-----------------------------------------+------------+------------+------------+ 
 
 
The above investment represents 20% of the ordinary shares in a company 
incorporated in the PRC of China, Guangzhou Tonglai Shipping Agents Company 
Limited, at consideration of RMB 100,000 (approximately US$12,000). The 
associate is principally engaged in provision of logistics and related services. 
It is not treated as an investment in associate on the ground of its immaterial 
amount. 
 
 
 
 
15.INVENTORIES 
 
 
Inventories represent consumables. There was no significant difference between 
the replacement cost and the value shown in the balance sheet. 
 
 
16.    TRADE AND OTHER RECEIVABLES 
+--------------------------------------+---------------------------------------+----------+----------+----------+---+ 
|                                      |                       Group                      |        Company      | 
+--------------------------------------+--------------------------------------------------+---------------------+ 
|                                      |                                  2008 |     2007 |     2008 |     2007 | 
|                                      |                               US$'000 |  US$'000 |  US$'000 |  US$'000 | 
+--------------------------------------+---------------------------------------+----------+----------+----------+ 
|                                      |                                       |          |          |          | 
+--------------------------------------+---------------------------------------+----------+----------+----------+ 
| Trade receivables                    |                                 2,656 |    1,689 |        - |        - |   | 
+--------------------------------------+---------------------------------------+----------+----------+----------+---+ 
| Deposits                             |                                   811 |      700 |        - |        - |   | 
+--------------------------------------+---------------------------------------+----------+----------+----------+---+ 
| Prepayments                          |                                   585 |        3 |        1 |        - | 
+--------------------------------------+---------------------------------------+----------+----------+----------+ 
| Other receivables                    |                                 1,069 |    2,198 |        - |       63 | 
+--------------------------------------+---------------------------------------+----------+----------+----------+ 
| Amount due from fellow investor of   |                                 2,039 |    1,656 |        - |        - | 
| subsidiary                           |                                       |          |          |          | 
+--------------------------------------+---------------------------------------+----------+----------+----------+ 
| Amount due from related companies    |                                   943 |      394 |        - |        - | 
| (note)                               |                                       |          |          |          | 
+--------------------------------------+---------------------------------------+----------+----------+----------+ 
| Amount due from immediate holding    |                                     - |    1,672 |        - |        - | 
| company                              |                                       |          |          |          | 
+--------------------------------------+---------------------------------------+----------+----------+----------+ 
|                                      |                                       |          |          |          | 
+--------------------------------------+---------------------------------------+----------+----------+----------+ 
|                                      |                                 8,103 |    8,312 |        1 |       63 | 
+--------------------------------------+---------------------------------------+----------+----------+----------+ 
|                                      |                                       |          |          |          | 
+--------------------------------------+---------------------------------------+----------+----------+----------+---+ 
 
 
Trade receivables are due within 30 days from the date of billing. Further 
details on the Company's credit policy are set out in note 23(a). 
 
 
The ageing analysis of trade debtors and that are neither individually nor 
collectively considered to be impaired are as follows: 
 
 
+-----------------------------------------+------------+------------+---+ 
|                                         |       2008 |      2007  | 
+-----------------------------------------+------------+------------+ 
|                                         |    US$'000 |    US$'000 | 
+-----------------------------------------+------------+------------+ 
|                                         |            |            |   | 
+-----------------------------------------+------------+------------+---+ 
|                            Neither past |        990 |        751 | 
|                            due nor      |            |            | 
|                            impaired     |            |            | 
+-----------------------------------------+------------+------------+ 
|                                         |            |            | 
+-----------------------------------------+------------+------------+ 
|                            Less than    |        761 |        443 | 
|                            one month    |            |            | 
|                            past due     |            |            | 
+-----------------------------------------+------------+------------+ 
|                            1 to 3       |        892 |          - | 
|                            months past  |            |            | 
|                            due          |            |            | 
+-----------------------------------------+------------+------------+ 
|                            >3 months    |         13 |        495 | 
|                            past due     |            |            | 
+-----------------------------------------+------------+------------+ 
|                            Total        |      1,666 |        938 | 
|                            amounts past |            |            | 
|                            due          |            |            | 
+-----------------------------------------+------------+------------+ 
|                                         |            |            | 
+-----------------------------------------+------------+------------+ 
|                            Total        |      2,656 |      1,689 | 
+-----------------------------------------+------------+------------+---+ 
 
 
Receivables that were neither past due nor impaired relate to a wide range of 
customers for whom there was no recent history of default. 
 
 
Receivables that were past due but not impaired relate to a number of customers 
that have a good track record with the Group. Based on past experience, 
management believes that no impairment allowance is necessary in respect of 
these balances as there has not been a significant change in credit quality and 
the balances are considered fully recoverable. The Group does not hold any 
collateral over these balances. 
 
 
 
 
 
 
Note 
 
 
The balances with related companies are analysed as follows: 
[*** UNPARSEABLE TABLE ***]
These amounts are interest free, unsecured and repayable on demand. 
 
 
 
 
17.    CASH AND CASH EQUIVALENTS 
 
 
+-------------------------------------+------------+------------+------------+------------+----------+ 
|                                     |          Group          |        Company          | 
+-------------------------------------+-------------------------+-------------------------+ 
|                                     |       2008 |       2007 |       2008 |       2007 | 
+-------------------------------------+------------+------------+------------+------------+ 
|                                     |    US$'000 |    US$'000 |    US$'000 |    US$'000 | 
+-------------------------------------+------------+------------+------------+------------+ 
|                                     |            |            |            |            | 
+-------------------------------------+------------+------------+------------+------------+ 
|                            Cash     |        780 |        428 |          2 |          1 | 
|                            in       |            |            |            |            | 
|                            hand     |            |            |            |            | 
|                            and      |            |            |            |            | 
|                            at       |            |            |            |            | 
|                            bank     |            |            |            |            | 
+-------------------------------------+------------+------------+------------+------------+ 
|                                     |            |            |            |            | 
+-------------------------------------+------------+------------+------------+------------+ 
|                                     |            |            |            |            | 
+-------------------------------------+------------+------------+------------+------------+ 
|                                     |       2008 |       2007 |       2008 |       2007 | 
+-------------------------------------+------------+------------+------------+------------+ 
|                            Currency |    US$'000 |    US$'000 |    US$'000 |    US$'000 | 
+-------------------------------------+------------+------------+------------+------------+ 
|                                     |            |            |            |            | 
+-------------------------------------+------------+------------+------------+------------+ 
|                            Hong     |         38 |        405 |          - |          - |          | 
|                            Kong     |            |            |            |            |          | 
|                            Dollars  |            |            |            |            |          | 
+-------------------------------------+------------+------------+------------+------------+----------+ 
|                            Chinese  |        740 |         22 |          - |          - | 
|                            RMB      |            |            |            |            | 
+-------------------------------------+------------+------------+------------+------------+ 
|                            UK       |          2 |          1 |          2 |          1 | 
|                            Pound    |            |            |            |            | 
|                            Sterling |            |            |            |            | 
+-------------------------------------+------------+------------+------------+------------+ 
|                                     |            |            |            |            | 
+-------------------------------------+------------+------------+------------+------------+ 
|                                     |        780 |        428 |          2 |          1 | 
+-------------------------------------+------------+------------+------------+------------+ 
|                                     |            |            |            |            | 
+-------------------------------------+------------+------------+------------+------------+----------+ 
 
 
18.    TRADE AND OTHER PAYABLES 
+--------------------------------------+------------+------------+------------+------------+ 
|                                      |                   Group |                 Company | 
+--------------------------------------+-------------------------+-------------------------+ 
|                                      |       2008 |       2007 |       2008 |       2007 | 
|                                      |    US$'000 |    US$'000 |    US$'000 |    US$'000 | 
+--------------------------------------+------------+------------+------------+------------+ 
|                                      |            |            |            |            | 
+--------------------------------------+------------+------------+------------+------------+ 
|                                      |        960 |        991 |         28 |        105 | 
|                            Trade     |            |            |            |            | 
|                            payables  |            |            |            |            | 
+--------------------------------------+------------+------------+------------+------------+ 
|                                      |      1,422 |      1,801 |          - |          - | 
|                            Other     |            |            |            |            | 
|                            payables  |            |            |            |            | 
|                            and       |            |            |            |            | 
|                            sundry    |            |            |            |            | 
|                            creditors |            |            |            |            | 
+--------------------------------------+------------+------------+------------+------------+ 
|                                      |        746 |        737 |          3 |         95 | 
|                            Accruals  |            |            |            |            | 
+--------------------------------------+------------+------------+------------+------------+ 
|                                      |        413 |         77 |          - |          - | 
|                            Amount    |            |            |            |            | 
|                            due to    |            |            |            |            | 
|                            related   |            |            |            |            | 
|                            companies |            |            |            |            | 
+--------------------------------------+------------+------------+------------+------------+ 
|                            Amount    |        366 |          - |          - |          - | 
|                            due to    |            |            |            |            | 
|                            immediate |            |            |            |            | 
|                            holding   |            |            |            |            | 
|                            company   |            |            |            |            | 
+--------------------------------------+------------+------------+------------+------------+ 
|                                      |            |            |            |            | 
+--------------------------------------+------------+------------+------------+------------+ 
|                                      |      3,907 |      3,606 |         31 |        200 | 
+--------------------------------------+------------+------------+------------+------------+ 
|                                      |            |            |            |            | 
+--------------------------------------+------------+------------+------------+------------+ 
 
 
 
19.    OBLIGATIONS UNDER FINANCE LEASES 
 
 
+-------------------------------+------------+------------+------------+------------+ 
|                               |                    2008 |                    2007 | 
+-------------------------------+-------------------------+-------------------------+ 
|                               |    Present |      Total |    Present |      Total | 
|                               |   value of |    minimum |   value of |    minimum | 
|                               |        the |      lease |        the |      lease | 
|                               |    minimum |   payments |    minimum |   payments | 
|                               |      lease |    US$'000 |      lease |    US$'000 | 
|                               |   payments |            |   payments |            | 
|                               |    US$'000 |            |    US$'000 |            | 
+-------------------------------+------------+------------+------------+------------+ 
|                               |            |            |            |            | 
+-------------------------------+------------+------------+------------+------------+ 
|                   Within 1    |        599 |        645 |          - |          - | 
|                   year        |            |            |            |            | 
+-------------------------------+------------+------------+------------+------------+ 
|                   After 1     |        330 |        356 |          - |          - | 
|                   year but    |            |            |            |            | 
|                   within 5    |            |            |            |            | 
|                   years       |            |            |            |            | 
+-------------------------------+------------+------------+------------+------------+ 
|                               |        929 |      1,001 |          - |          - | 
+-------------------------------+------------+------------+------------+------------+ 
|                   Less :      |            |       (72) |          - |          - | 
|                   total       |            |            |            |            | 
|                   future      |            |            |            |            | 
|                   interest    |            |            |            |            | 
|                   expenses    |            |            |            |            | 
+-------------------------------+------------+------------+------------+------------+ 
|                   Present     |            |        929 |          - |          - | 
|                   value of    |            |            |            |            | 
|                   lease       |            |            |            |            | 
|                   obligations |            |            |            |            | 
+-------------------------------+------------+------------+------------+------------+ 
|                               |            |            |            |            | 
+-------------------------------+------------+------------+------------+------------+ 
 
 
 
 
+-----+------------------------------------------------+---+-----------+--------------+ 
| 20. | Bank LOAN                                      |               |              | 
+-----+------------------------------------------------+---------------+--------------+ 
|     |                                                |            Group             | 
+-----+------------------------------------------------+------------------------------+ 
|     |                                                |          2008 |         2007 | 
|     |                                                |       US$'000 |      US$'000 | 
+-----+------------------------------------------------+---------------+--------------+ 
|     | Analysis of debt maturity                          |           |              | 
+-----+----------------------------------------------------+-----------+--------------+ 
|     | Amounts payable and due within two to five years   |     1,915 |        1,915 | 
+-----+----------------------------------------------------+-----------+--------------+ 
|     |                                                    |           |              | 
+-----+------------------------------------------------+---+-----------+--------------+ 
 
 
The bank loan is unsecured, with interest accruing at the fixed rate of 5.85% 
per annum. 
 
 
The Group holds financial instruments in order to finance its operations and to 
manage interest rate and currency risks. Group operations are financed by means 
of retained profits and a mixture of both short and medium term debts. The Group 
borrows, through banks and from related parties, in local currencies at fixed 
rates. The Group does not trade in any way in financial instruments. 
 
 
 
 
  21.LOANS FROM FELLOW INVESTORS IN SUBSIDIARIES 
 
 
These amounts are advanced from Miaotou Economic Development Company Limited of 
US$718,004 (2007: US$718,004) and a further amount from Walton Enterprises 
Limited of US$68,673 (2007: US$68,673). These amounts are unsecured, interest 
free and have no fixed term of repayment. 
 
 
+---------------------------------------+----------------+------+------+----------------+------+------+ 
| 22.share capital                      |                       |                              | 
+---------------------------------------+-----------------------+------------------------------+ 
|                                       |                              |                              | 
+---------------------------------------+------------------------------+------------------------------+ 
|                                       |            2008              |                         2007 | 
+---------------------------------------+------------------------------+------------------------------+ 
|                                       |         Number |         GBP |         Number |         GBP | 
+---------------------------------------+----------------+-------------+----------------+-------------+ 
| a)    Authorised:                     | 30,000,000,000 | 150,000,000 | 30,000,000,000 | 150,000,000 | 
| Ordinary shares of 0.5p               |                |             |                |             | 
| each                                  |                |             |                |             | 
+---------------------------------------+----------------+-------------+----------------+-------------+ 
|                                       |                |             |                |             | 
+---------------------------------------+----------------+-------------+----------------+-------------+ 
|                            Equivalent |                |        US$  |                |        US$  | 
|                            to:        |                | 265,395,280 |                | 265,395,280 | 
+---------------------------------------+----------------+-------------+----------------+-------------+ 
|                                       |                |             |                |             | 
+---------------------------------------+----------------+-------------+----------------+-------------+ 
|                            Allotted,  |  1,978,895,139 |        US$  |  1,978,895,139 |        US$  | 
|                            called up  |                |  14,921,520 |                |  14,921,520 | 
|                            and fully  |                |             |                |             | 
|                            paid:      |                |             |                |             | 
|                            Ordinary   |                |             |                |             | 
|                            shares of  |                |             |                |             | 
|                            0.5p each  |                |             |                |             | 
+---------------------------------------+----------------+-------------+----------------+-------------+ 
|                                       |                |             |                |             | 
+---------------------------------------+----------------+------+------+----------------+------+------+ 
 
 
 
 
b)    Capital management 
 
 
The Group's main objective when managing capital is to provide returns to 
shareholders by ensuring the Group will continue to trade in the foreseeable 
future. The Group also aims to maximise its capital structure of debt and equity 
so as to minimise its cost of capital. 
 
 
The Group manages its capital with regard to the risks inherent in the business 
and the sector within which it operates by monitoring its gearing ratio on a 
regular basis. 
 
 
The Group considers its capital to include share capital, share premium, 
translation reserve and retained earnings. 
 
 
Net debt includes short and long-term borrowings net of cash and cash 
equivalents. 
 
 
+----+------------------------------------------------+------------+------------+ 
|    |                                                |            |            | 
+----+------------------------------------------------+------------+------------+ 
|    |                                                |       2008 |       2007 | 
|    |                                                |    US$'000 |    US$'000 | 
+----+------------------------------------------------+------------+------------+ 
|    |                                                |            |            | 
+----+------------------------------------------------+------------+------------+ 
|    | Total debt                                     |      8,233 |      7,442 | 
+----+------------------------------------------------+------------+------------+ 
|    | Less: cash and cash equivalents                |      (780) |      (428) | 
+----+------------------------------------------------+------------+------------+ 
|    | Net debt                                       |      7,453 |      7,014 | 
+----+------------------------------------------------+------------+------------+ 
|    |                                                |            |            | 
+----+------------------------------------------------+------------+------------+ 
|    | Total equity                                   |     30,009 |     27,644 | 
+----+------------------------------------------------+------------+------------+ 
|    |                                                |            |            | 
+----+------------------------------------------------+------------+------------+ 
|    | Debt to capital ratio                          |        25% |        25% | 
+----+------------------------------------------------+------------+------------+ 
|    |                                                |            |            | 
+----+------------------------------------------------+------------+------------+ 
|    |                                                |            |            | 
+----+------------------------------------------------+------------+------------+ 
The Group does not have any externally imposed capital requirements. 
 
 
23.    FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES 
 
 
The principal risks arising from the Group's financial instruments are credit 
risk, interest rate risk, liquidity risk and exchange rate risk. The Group board 
reviews and agrees policies for managing each of these risks and these are 
summarised below. These policies have been developed during the current 
accounting period as a consequence of the Group's expansion. 
 
 
a)Credit risk 
 
 
Credit risk is the potential financial loss resulting from the failure of a 
customer or counterparty in setting their financial and contractual obligations 
to the Group, as and when they fall due. 
 
 
The Group's primary exposure to credit risk arises through its trade 
receivables. The management has a credit policy in place and exposure to credit 
risk is monitored on an ongoing basis. Other financial assets of the Group with 
exposure to credit risk include cash and deposits that are placed with financial 
institutions which are regulated. 
 
 
At the balance sheet date, there was no significant concentration of credit 
risk. 
 
 
 
 
b)Liquidity risk 
 
 
The Group's policy is to regularly monitor current and expected liquidity 
requirements and its compliance with lending covenants, to ensure that it 
maintains sufficient reserves of cash and readily realisable marketable 
securities and adequate committed lines of funding from major financial 
institutions to meet its liquidity requirements in the short and longer term. 
The following table details the remaining contractual maturities at the balance 
sheet date of the Group's financial liabilities, which are based on contractual 
undiscounted cash flows (including interest payments computed using contractual 
rates or, if floating, based on rates current at the balance sheet date) and the 
earliest date the Group can be required to pay: 
 
 
+------------+----------+--------------+---------+---------+---------+--+----------+--------------+---------+---------+---------+ 
|            |                        Group                          |  |                        Group                          | 
+------------+-------------------------------------------------------+--+-------------------------------------------------------+ 
|            |                         2008                          |  |                         2007                          | 
+------------+-------------------------------------------------------+--+-------------------------------------------------------+ 
|            | Carrying |        Total |         |    More |    More |  | Carrying |        Total |  Within |    More |    More | 
|            |   amount |  contractual |  Within |    than |    than |  |   amount |  contractual |       1 |         |    than | 
|            |          | undiscounted |       1 |       1 |       5 |  |          | undiscounted |    year |    than |       5 | 
|            |          |    cash flow |    year |    year |   years |  |          |    cash flow |   or on |       1 |   years | 
|            |          |              |   or on |     but |         |  |          |              |  demand |    year |         | 
|            |          |              |  demand |    less |         |  |          |              |         |     but |         | 
|            |          |              |         |    than |         |  |          |              |         |    less |         | 
|            |          |              |         |       2 |         |  |          |              |         |    than |         | 
|            |          |              |         |   years |         |  |          |              |         |       2 |         | 
|            |          |              |         |         |         |  |          |              |         |   years |         | 
+------------+----------+--------------+---------+---------+---------+--+----------+--------------+---------+---------+---------+ 
|            |  US$'000 |      US$'000 |         | US$'000 | US$'000 |  |  US$'000 |      US$'000 | US$'000 | US$'000 | US$'000 | 
|            |          |              | US$'000 |         |         |  |          |              |         |         |         | 
+------------+----------+--------------+---------+---------+---------+--+----------+--------------+---------+---------+---------+ 
|            |          |              |         |         |         |  |          |              |         |         |         | 
+------------+----------+--------------+---------+---------+---------+--+----------+--------------+---------+---------+---------+ 
| Trade      |      960 |          960 |     960 |       - |       - |  |      991 |          991 |     991 |       - |       - | 
| payables   |          |              |         |         |         |  |          |              |         |         |         | 
+------------+----------+--------------+---------+---------+---------+--+----------+--------------+---------+---------+---------+ 
|            |          |              |         |         |         |  |          |              |         |         |         | 
+------------+----------+--------------+---------+---------+---------+--+----------+--------------+---------+---------+---------+ 
| Other      |    1,422 |        1,422 |   1,422 |       - |       - |  |      529 |          529 |     529 |       - |       - | 
| payables   |          |              |         |         |         |  |          |              |         |         |         | 
+------------+----------+--------------+---------+---------+---------+--+----------+--------------+---------+---------+---------+ 
|            |          |              |         |         |         |  |          |              |         |         |         | 
+------------+----------+--------------+---------+---------+---------+--+----------+--------------+---------+---------+---------+ 
| Accruals   |      746 |          746 |     746 |       - |       - |  |      737 |          737 |     737 |       - |       - | 
+------------+----------+--------------+---------+---------+---------+--+----------+--------------+---------+---------+---------+ 
|            |          |              |         |         |         |  |          |              |         |         |         | 
+------------+----------+--------------+---------+---------+---------+--+----------+--------------+---------+---------+---------+ 
| Finance    |          |              |         |         |         |  |          |              |         |         |         | 
| Lease      |          |              |         |         |         |  |          |              |         |         |         | 
+------------+----------+--------------+---------+---------+---------+--+----------+--------------+---------+---------+---------+ 
| -          |      599 |          599 |     599 |       - |       - |  |        - |            - |       - |       - |       - | 
| within     |          |              |         |         |         |  |          |              |         |         |         | 
| 1 year     |          |              |         |         |         |  |          |              |         |         |         | 
+------------+----------+--------------+---------+---------+---------+--+----------+--------------+---------+---------+---------+ 
| - 2 to     |      330 |          330 |       - |     330 |       - |  |        - |            - |       - |       - |       - | 
| 5          |          |              |         |         |         |  |          |              |         |         |         | 
| years      |          |              |         |         |         |  |          |              |         |         |         | 
+------------+----------+--------------+---------+---------+---------+--+----------+--------------+---------+---------+---------+ 
|            |          |              |         |         |         |  |          |              |         |         |         | 
+------------+----------+--------------+---------+---------+---------+--+----------+--------------+---------+---------+---------+ 
| Bank       |    1,915 |        1,915 |       - |       - |   1,915 |  |    1,915 |        1,915 |       - |       - |   1,915 | 
| loan       |          |              |         |         |         |  |          |              |         |         |         | 
+------------+----------+--------------+---------+---------+---------+--+----------+--------------+---------+---------+---------+ 
|            |          |              |         |         |         |  |          |              |         |         |         | 
+------------+----------+--------------+---------+---------+---------+--+----------+--------------+---------+---------+---------+ 
| Loans      |          |              |         |         |         |  |          |              |         |         |         | 
| from       |          |              |         |         |         |  |          |              |         |         |         | 
| fellow     |          |              |         |         |         |  |          |              |         |         |         | 
| investors  |          |              |         |         |         |  |          |              |         |         |         | 
| in         |          |              |         |         |         |  |          |              |         |         |         | 
+------------+----------+--------------+---------+---------+---------+--+----------+--------------+---------+---------+---------+ 
|            |      787 |          787 |       - |       - |     787 |  |      787 |          787 |       - |       - |     787 | 
| subsidiary |          |              |         |         |         |  |          |              |         |         |         | 
| companies  |          |              |         |         |         |  |          |              |         |         |         | 
+------------+----------+--------------+---------+---------+---------+--+----------+--------------+---------+---------+---------+ 
|            |          |              |         |         |         |  |          |              |         |         |         | 
+------------+----------+--------------+---------+---------+---------+--+----------+--------------+---------+---------+---------+ 
| Amount     |      413 |          413 |     413 |       - |       - |  |       77 |           77 |      77 |       - |       - | 
| due to     |          |              |         |         |         |  |          |              |         |         |         | 
| related    |          |              |         |         |         |  |          |              |         |         |         | 
| companies  |          |              |         |         |         |  |          |              |         |         |         | 
+------------+----------+--------------+---------+---------+---------+--+----------+--------------+---------+---------+---------+ 
| Amount     |      366 |          366 |     366 |       - |       - |  |        - |            - |       - |       - |       - | 
| due to     |          |              |         |         |         |  |          |              |         |         |         | 
| immediate  |          |              |         |         |         |  |          |              |         |         |         | 
| holding    |          |              |         |         |         |  |          |              |         |         |         | 
|   company  |          |              |         |         |         |  |          |              |         |         |         | 
+------------+----------+--------------+---------+---------+---------+--+----------+--------------+---------+---------+---------+ 
|            |          |              |         |         |         |  |          |              |         |         |         | 
+------------+----------+--------------+---------+---------+---------+--+----------+--------------+---------+---------+---------+ 
|            |    7,538 |        7,538 |   4,506 |     330 |   2,702 |  |    5,036 |        5,036 |   2,334 |       - |   2,702 | 
+------------+----------+--------------+---------+---------+---------+--+----------+--------------+---------+---------+---------+ 
|            |          |              |         |         |         |  |          |              |         |         |         | 
+------------+----------+--------------+---------+---------+---------+--+----------+--------------+---------+---------+---------+ 
 
 
 
 
 
 
+------------+-----+----+--------------+---------+---------+---------+--+----------+--------------+---------+---------+---------+ 
|                  |                      Group                      |  |                        Group                          | 
+------------------+-------------------------------------------------+--+-------------------------------------------------------+ 
|                  |                      2008                       |  |                         2007                          | 
+------------------+-------------------------------------------------+--+-------------------------------------------------------+ 
|            | Carrying |        Total |         |    More |    More |  | Carrying |        Total |  Within |    More |    More | 
|            |   amount |  contractual |  Within |    than |    than |  |   amount |  contractual |       1 |         |    than | 
|            |          | undiscounted |      1  |       1 |       5 |  |          | undiscounted |    year |    than |       5 | 
|            |          |    cash flow |    year |    year |   years |  |          |    cash flow |   or on |       1 |   years | 
|            |          |              |   or on |     but |         |  |          |              |  demand |    year |         | 
|            |          |              |  demand |    less |         |  |          |              |         |     but |         | 
|            |          |              |         |    than |         |  |          |              |         |    less |         | 
|            |          |              |         |       2 |         |  |          |              |         |    than |         | 
|            |          |              |         |   years |         |  |          |              |         |       2 |         | 
|            |          |              |         |         |         |  |          |              |         |   years |         | 
+------------+----------+--------------+---------+---------+---------+--+----------+--------------+---------+---------+---------+ 
|            |  US$'000 |      US$'000 | US$'000 | US$'000 | US$'000 |  |  US$'000 |      US$'000 | US$'000 | US$'000 | US$'000 | 
+------------+----------+--------------+---------+---------+---------+--+----------+--------------+---------+---------+---------+ 
|            |          |              |         |         |         |  |          |              |         |         |         | 
+------------+----------+--------------+---------+---------+---------+--+----------+--------------+---------+---------+---------+ 
| Trade      |       31 |           31 |      31 |       - |       - |  |      200 |          200 |     200 |       - |       - | 
| and        |          |              |         |         |         |  |          |              |         |         |         | 
| other      |          |              |         |         |         |  |          |              |         |         |         | 
| payables   |          |              |         |         |         |  |          |              |         |         |         | 
+------------+----------+--------------+---------+---------+---------+--+----------+--------------+---------+---------+---------+ 
|            |          |              |         |         |         |  |          |              |         |         |         | 
+------------+----------+--------------+---------+---------+---------+--+----------+--------------+---------+---------+---------+ 
| Amount     |    1,916 |        1,916 |   1,916 |       - |       - |  |    2,299 |        2,299 |   2,299 |       - |       - | 
| due to     |          |              |         |         |         |  |          |              |         |         |         | 
| subsidiary |          |              |         |         |         |  |          |              |         |         |         | 
+------------+----------+--------------+---------+---------+---------+--+----------+--------------+---------+---------+---------+ 
|            |          |              |         |         |         |  |          |              |         |         |         | 
+------------+----------+--------------+---------+---------+---------+--+----------+--------------+---------+---------+---------+ 
|            |    1,947 |        1,947 |   1,947 |       - |       - |  |    2,499 |        2,499 |   2,499 |       - |       - | 
+------------+----------+--------------+---------+---------+---------+--+----------+--------------+---------+---------+---------+ 
|            |          |              |         |         |         |  |          |              |         |         |         | 
+------------+-----+----+--------------+---------+---------+---------+--+----------+--------------+---------+---------+---------+ 
 
 
c)    Foreign  exchange risk 
The Group's businesses include revenue and the expenses which are principally 
conducted in Chinese Renminbi ("RMB") through its subsidiaries in the PRC. The 
Group is largely exposed to foreign currency risk with respect to United States 
dollars. Foreign exchange risk mainly arises from recognised assets and 
liabilities and net investments in foreign operations. 
 
 
The Group did not use any forward contract or currency borrowing to hedge its 
exposure to foreign currency risk. However, the directors will monitor the 
related foreign currency exposure closely and will consider hedging significant 
foreign currency exposures should the need arise in the future. 
 
 
No entity in the Group has material assets and liabilities denominated in 
currency other than functional currency of that entity, therefore no material 
foreign exchange risk arises. 
 
 
d)    Interest rate risk 
Group borrowings are held in local currencies. Current loans are at fixed rates. 
The Group's policy for future borrowings will be to take floating rates unless 
fixed rate finance is available at particularly attractive rates. 
 
 
 
 
Sensitivity analysis 
 
 
The Group is exposed to fair value interest rate risk as its bank borrowings and 
finance leases are at a fixed rate. Borrowings from fellow investors in 
subsidiaries are on an interest free basis. The Group monitors closely its 
interest rate exposure and will consider hedging significant interest rate 
exposure should the need arise in the future. 
 
 
The interest rate risk profile of the Group's financial liabilities for the two 
years ended 31 December 2008 are as follows: 
 
 
+----------------------------------------------------------------+----------+---------------+------------+------------+------------+ 
|                                                       Group                               |            |            |            | 
+-------------------------------------------------------------------------------------------+------------+------------+------------+ 
|                                                       Currency |    Total | Interest-free | Fixed rate | Fixed rate | Fixed rate | 
|                                                                |          |               |            |   weighted |   weighted | 
|                                                                |          |               |            |    average |    average | 
|                                                                |          |               |            |   interest | period for | 
|                                                                |          |               |            |    rate at | which rate | 
|                                                                |          |               |            |            |   is fixed | 
+----------------------------------------------------------------+----------+---------------+------------+------------+------------+ 
|                                                                |  US$'000 |       US$'000 |    US$'000 |          % |      Years | 
+----------------------------------------------------------------+----------+---------------+------------+------------+------------+ 
|                                                       2008     |          |               |            |            |            | 
+----------------------------------------------------------------+----------+---------------+------------+------------+------------+ 
|                                                       RMB      |    2,702 |           787 |      1,915 |       5.85 |          1 | 
+----------------------------------------------------------------+----------+---------------+------------+------------+------------+ 
|                                                       RMB      |      921 |             - |        921 |          4 |          2 | 
+----------------------------------------------------------------+----------+---------------+------------+------------+------------+ 
|                                                       HKD      |        8 |             8 |          - |          - |          - | 
+----------------------------------------------------------------+----------+---------------+------------+------------+------------+ 
|                                                                |          |               |            |            |            | 
+----------------------------------------------------------------+----------+---------------+------------+------------+------------+ 
|                                                                |    3,631 |           795 |      2,836 |            |            | 
+----------------------------------------------------------------+----------+---------------+------------+------------+------------+ 
|                                                                |          |               |            |            |            | 
+----------------------------------------------------------------+----------+---------------+------------+------------+------------+ 
|                                                       2007     |          |               |            |            |            | 
+----------------------------------------------------------------+----------+---------------+------------+------------+------------+ 
|                                                       RMB      |    2,702 |           787 |      1,915 |       5.85 |          1 | 
+----------------------------------------------------------------+----------+---------------+------------+------------+------------+ 
|                                                                |          |               |            |            |            | 
+----------------------------------------------------------------+----------+---------------+------------+------------+------------+ 
 
 
The Company incurs no interest rate risk as it does not have any liability of 
bank or other borrowings. 
 
 
 
 
Summary of financial instruments by category 
 
 
The carrying amounts of the Group's financial assets are categorised as loans 
and receivables 
+------------------------------------------------+---+----------+----------+----------+------------+---+ 
|                                     Financial      |        Group        |        Company        | 
|                                     assets         |                     |                       | 
+----------------------------------------------------+---------------------+-----------------------+ 
|                                                    |     2008 |     2007 |     2008 |       2007 |   | 
|                                                    |  US$'000 |  US$'000 |  US$'000 |    US$'000 |   | 
+----------------------------------------------------+----------+----------+----------+------------+---+ 
|                                                    |          |          |          |            | 
+----------------------------------------------------+----------+----------+----------+------------+ 
|                                     Trade          |    2,656 |    1,689 |        - |          - | 
|                                     receivables    |          |          |          |            | 
+----------------------------------------------------+----------+----------+----------+------------+ 
|                                     Deposits       |      811 |      700 |        - |          - | 
+----------------------------------------------------+----------+----------+----------+------------+ 
|                                     Other          |    1,069 |    2,198 |        - |         63 |   | 
|                                     receivables    |          |          |          |            |   | 
+----------------------------------------------------+----------+----------+----------+------------+---+ 
|                                     Amount         |        - |        - |      120 |          - | 
|                                     due            |          |          |          |            | 
|                                     from           |          |          |          |            | 
|                                     subsidiary     |          |          |          |            | 
+----------------------------------------------------+----------+----------+----------+------------+ 
|                                     Amount     |        2,039 |    1,656 |        - |          - | 
|                                     due        |              |          |          |            | 
|                                     from       |              |          |          |            | 
|                                     fellow     |              |          |          |            | 
|                                     investor   |              |          |          |            | 
|                                     of         |              |          |          |            | 
|                                     subsidiary |              |          |          |            | 
+------------------------------------------------+--------------+----------+----------+------------+ 
|                                     Amount         |      943 |      394 |        - |          - | 
|                                     due            |          |          |          |            | 
|                                     from           |          |          |          |            | 
|                                     related        |          |          |          |            | 
|                                     companies      |          |          |          |            | 
+----------------------------------------------------+----------+----------+----------+------------+ 
|                                     Amount     |            - |    1,672 |        - |          - | 
|                                     due        |              |          |          |            | 
|                                     from       |              |          |          |            | 
|                                     immediate  |              |          |          |            | 
|                                     holding    |              |          |          |            | 
|                                     company    |              |          |          |            | 
+------------------------------------------------+--------------+----------+----------+------------+ 
|                                     Cash           |      780 |      428 |        2 |          1 | 
|                                     and            |          |          |          |            | 
|                                     cash           |          |          |          |            | 
|                                     equivalents    |          |          |          |            | 
+----------------------------------------------------+----------+----------+----------+------------+ 
|                                     Total          |    8,298 |    8,737 |      122 |         64 | 
+------------------------------------------------+---+----------+----------+----------+------------+---+ 
 
 
 
 
 
 
+----------------------------------------------------+----------------------------------+--------------+ 
|                                     Financial      |                                  |              | 
|                                     liabilities    |                                  |              | 
+----------------------------------------------------+----------------------------------+--------------+ 
|                                     Group          |                                        Other    | 
|                                                    |                                      financial  | 
|                                                    |                                    liabilities  | 
+----------------------------------------------------+-------------------------------------------------+ 
|                                                    |                             2008 |         2007 | 
+----------------------------------------------------+----------------------------------+--------------+ 
|                                                    |                          US$'000 |      US$'000 | 
+----------------------------------------------------+----------------------------------+--------------+ 
|                                                    |                                  |              | 
+----------------------------------------------------+----------------------------------+--------------+ 
|                                     Trade payables |                              960 |          991 | 
+----------------------------------------------------+----------------------------------+--------------+ 
|                                     Other payables |                            1,422 |          529 | 
+----------------------------------------------------+----------------------------------+--------------+ 
|                                     Accruals       |                              746 |          737 | 
+----------------------------------------------------+----------------------------------+--------------+ 
|                                     Amount due to  |                              413 |           77 | 
|                                     related        |                                  |              | 
|                                     companies      |                                  |              | 
+----------------------------------------------------+----------------------------------+--------------+ 
|                                     Amount due to  |                              366 |            - | 
|                                     immediate      |                                  |              | 
|                                     holding        |                                  |              | 
|                                     company        |                                  |              | 
+----------------------------------------------------+----------------------------------+--------------+ 
|                                                    |                                  |              | 
+----------------------------------------------------+----------------------------------+--------------+ 
|                                     Obligation     |                                  |              | 
|                                     under finance  |                                  |              | 
|                                     lease          |                                  |              | 
+----------------------------------------------------+----------------------------------+--------------+ 
|                                     - Within 1     |                              599 |            - | 
|                                     year           |                                  |              | 
+----------------------------------------------------+----------------------------------+--------------+ 
|                                     - 2 to 5 years |                              330 |            - | 
+----------------------------------------------------+----------------------------------+--------------+ 
|                                     Bank loan      |                            1,915 |        1,915 | 
+----------------------------------------------------+----------------------------------+--------------+ 
|                                     Loans from     |                              787 |          787 | 
|                                     fellow         |                                  |              | 
|                                     investors in   |                                  |              | 
|                                     subsidiaries   |                                  |              | 
+----------------------------------------------------+----------------------------------+--------------+ 
|                                     Total          |                            7,538 |        5,036 | 
+----------------------------------------------------+----------------------------------+--------------+ 
 
 
 
+----------------------------------------------------+------------+--------------+ 
|                                     Financial      |            |              | 
|                                     liabilities    |            |              | 
+----------------------------------------------------+------------+--------------+ 
|                                     Company        |           Other Financial | 
|                                                    |               liabilities | 
|                                                    |                           | 
+----------------------------------------------------+---------------------------+ 
|                                                    |       2008 |         2007 | 
+----------------------------------------------------+------------+--------------+ 
|                                                    |    US$'000 |      US$'000 | 
+----------------------------------------------------+------------+--------------+ 
|                                                    |            |              | 
+----------------------------------------------------+------------+--------------+ 
|                                     Trade and      |         28 |          200 | 
|                                     other payables |            |              | 
+----------------------------------------------------+------------+--------------+ 
|                                     Accruals       |          3 |            - | 
+----------------------------------------------------+------------+--------------+ 
|                                     Amount due to  |      1,916 |        2,299 | 
|                                     a subsidiary   |            |              | 
+----------------------------------------------------+------------+--------------+ 
|                                                    |            |              | 
+----------------------------------------------------+------------+--------------+ 
|                                     Total          |      1,947 |        2,499 | 
+----------------------------------------------------+------------+--------------+ 
 
 
 
 
 
 
e)    Fair value estimation 
 
 
The fair value of the Group's trade receivables is estimated by discounting the 
future contractual cash flows at the current market interest rate that is 
available to the Group for similar financial instruments. 
 
 
The carrying amounts of the Group's financial assets, including cash and cash 
equivalents, other receivables and financial liabilities, including trade and 
other payables, obligations under finance leases and bank borrowings approximate 
to their fair values as at 31 December 2008 and 2007. 
 
 
 
 
24.    RELATED PARTY TRANSACTIONS 
Other than transactions otherwise disclosed in the financial statements, the 
Group and the Company had the following material transactions which were carried 
out on an arm's length basis with related parties during the year: 
 
 
+-----------------------------------------------+-------+-------------------------+-----------+----------+ 
|                                     Name      |Notes  |              Nature     |      2008 |     2007 | 
|                                     of        |       |                         |           |          | 
|                                     company   |       |                         |           |          | 
+-----------------------------------------------+-------+-------------------------+-----------+----------+ 
|                                               |       |                         |   US$'000 |  US$'000 | 
+-----------------------------------------------+-------+-------------------------+-----------+----------+ 
|                                               |       |                         |           |          | 
+-----------------------------------------------+-------+-------------------------+-----------+----------+ 
|                                     Guangzhou |  (a)  |              Agency     |        82 |       77 | 
|                                     Tonglai   |       |              charges    |           |          | 
|                                     Shipping  |       |                         |           |          | 
|                                       Agency  |       |                         |           |          | 
|                                     Company   |       |                         |           |          | 
|                                     Limited   |       |                         |           |          | 
+-----------------------------------------------+-------+-------------------------+-----------+----------+ 
|                                     Winko     |  (b)  |              Hiring     |         - |        8 | 
|                                     Metal     |       |              charges    |           |          | 
|                                     Limited   |       |              for motor  |           |          | 
|                                               |       |              vehicle    |           |          | 
+-----------------------------------------------+-------+-------------------------+-----------+----------+ 
 
 
Notes: 
 
(a)    A company in which the Chairman, Mr Qin Shun Chao, is a director. 
 
(b)    Companies which are controlled by Keen Lloyd Holdings Limited. 
 
 
25.OPERATING LEASE COMMITMENTS 
At 31 December 2008, the Group had total commitments in respect of land and 
building under operating leases: 
+------------------------------------------------------+------------+------------+ 
|                                                      |       2008 |       2007 | 
+------------------------------------------------------+------------+------------+ 
|                                                      |    US$'000 |    US$'000 | 
+------------------------------------------------------+------------+------------+ 
|                                     Leases which     |            |            | 
|                                     expire:          |            |            | 
+------------------------------------------------------+------------+------------+ 
|                                     - in the next    |        354 |        171 | 
|                                     year             |            |            | 
+------------------------------------------------------+------------+------------+ 
|                                     - in the second  |      1,089 |        741 | 
|                                     to fifth years   |            |            | 
+------------------------------------------------------+------------+------------+ 
|                                                      |            |            | 
+------------------------------------------------------+------------+------------+ 
|                                                      |      1,443 |        912 | 
+------------------------------------------------------+------------+------------+ 
|                                                      |            |            | 
+------------------------------------------------------+------------+------------+ 
 
 
26.    CAPITAL COMMITMENTS 
Capital commitments outstanding at 31 December 2008 in respect of the 
acquisition of a quayside container crane from a non-related supplier in the 
financial statements were as follows: 
+------------------------------------------------------+------------+------------+ 
|                                                      |            |            | 
+------------------------------------------------------+------------+------------+ 
|                                                      |          Group          | 
+------------------------------------------------------+-------------------------+ 
|                                                      |       2008 |       2007 | 
+------------------------------------------------------+------------+------------+ 
|                                                      |    US$'000 |    US$'000 | 
+------------------------------------------------------+------------+------------+ 
|                                                      |            |            | 
+------------------------------------------------------+------------+------------+ 
|                                     Contracted, but  |        740 |      8,438 | 
|                                     not provided for |            |            | 
+------------------------------------------------------+------------+------------+ 
|                                                      |            |            | 
+------------------------------------------------------+------------+------------+ 
 
 
27.CONTINGENT LIABILITIES 
(a)    On 23 July 1998, a subsidiary of the Company, Keen Chance Terminal (GZ) 
Company Limited ("KCT"), gave a guarantee for RMB50 million (equivalent to 
approximately US$5.9 million) in favour of the Huangpu Branch of the Industry 
and Commercial Bank of China for banking facilities granted to Harbour Economic 
Development Company Limited ("HEDCL"), a fellow investor in KCT and its ultimate 
controlling party, Guangzhou Huangpu Foreign Trade Group Company Limited and 
secured over their equity interests in KCT. HEDCL was unable to repay the loans 
due to the bank. The bank took action against KCT to enforce the guarantee for 
the outstanding loan. 
 
 
(b)    On 9 November 1999, KCT gave a guarantee for RMB18 million (equivalent to 
approximately US$2.1 million) in favour of Nangang Rural Credit Co-operation 
Bank for banking facilities granted to Miaotou Economic Development Company 
Limited ("MEDCL"), a fellow investor in KCT, secured over its equity interests 
in KCT. MEDCL was unable to repay the outstanding loan. 
 
 
 
 
On 27 September 2001, the Guangzhou Law Court delivered an order and notice that 
the guarantees above were invalid and MEDCL's equity interest in KCT was frozen. 
 
 
Based on legal advice, the equity interests had no material impact on the 
operations of KCT and the directors consider that no provision is required. 
 
 
KCT maintains that the guarantee given was invalid on the following grounds: 
 
(1)      such guarantee did not have approval from the board of directors of 
KCT; 
(2)      in accordance with the law of the People's Republic of China, the board 
of directors and the     management 
 

          of KCT cannot give KCT's 
properties for guarantee to its shareholder; and 
(3)      the controlling party of HEDCL has not held a valid business licence 
since 1998 and ceased     operations in 
 

         1999. In accordance with 
the banking regulations of the People's Republic of China, the bank cannot lend 
 
 

         money to enterprises which do not have a valid business licence. 
 
 
The legal proceedings are still in progress. Based on legal advice, the 
directors are of the opinion that, the loan agreement was void because it was 
illegal and accordingly, the guarantee contract was also invalid. 
 
 
Furthermore, Keen Lloyd Holdings Limited, the Company's parent company, has 
indemnified the Group against any loss KCT will suffer should the guarantee be 
enforceable. 
 
 
Accordingly, the directors are of the opinion that no provision should be made 
in the financial statements for any possible claim from the bank in respect of 
the litigation. 
 
 
(c)    Following the closure of the power plant on 30 June 2007, the group may 
be required to incur 
 

       decommissioning costs in respect of the power 
plant site. The Group is unable to estimate such costs since 
 

       the 
power plant can be sold to other larger power plant companies in China before 
the end of 2010 (the date at 
 

       which the plant is required to be 
demolished). If a sale is achieved, no decommissioning costs will be incurred. 
 
 

       Accordingly, no provision is made in respect of these costs in 
these financial statements. 
 
 
28.ADOPTION OF NEW AND REVISED STANDARDS 
 
 
At the date of authorisation of these financial statements, the following 
standards and interpretations, which are issued but not yet effective, have not 
been applied: 
 
 
  *  IFRS 1Revised IFRS 1 First-time adoption of IFRS 
  *  IFRS 2   Share-based payments - Amendment, vesting conditions and cancellations 
  *  IFRS 3   Business combinations - Comprehensive revision on applying the 
  acquisition method 
  *  IFRS 7   Financial Instruments: Disclosures - Amendment; Reclassification of 
  Financial Assets 
  *  IFRS 8   Operating segments 
  *  IAS 1     Presentation of Financial Statements - comprehensive revision 
  including requiring a statement   of comprehensive income 
  *  IAS 23   Borrowing Costs - Comprehensive revision to prohibit immediate 
  expensing 
  *  IAS 27   Consolidated and Separate Financial Statements - Amendments arising 
  from IFRS 3 
  *  IAS 27   Consolidated and Separate Financial Statements - Amendment; Cost of an 
  investment in a subsidiary, jointly controlled entity or associate 
  *  IAS 28   Investment in Associates - Consequential amendments arising from IFRS 3 
  *  IAS 39   Financial Instruments: Recognition and Measurement - Amendment; 
  Reclassification of Financial Assets 
  *  IAS 39   Financial Instruments: Recognition and Measurement - Amendment; 
  Eligible hedged items 
 
 
 
Amendments to IFRSs arising from Annual Improvements Project 
 
 
  *  IFRS 7    Financial Instruments: Disclosures 
  *  IAS 1    Presentation of Financial Statements 
  *  IAS 7    Statement of Cash Flows 
  *  IAS 8    Accounting Policies, Changes in Accounting Estimates and Errors 
  *  IAS 10   Events after the Reporting Period 
  *  IAS 16   Property, Plant and Equipment 
  *  IAS 18   Revenue 
  *  IAS 23   Borrowing Costs 
  *  IAS 27   Consolidated and Separate Financial Statements 
  *  IAS 28   Investment in Associates 
  *  IAS 32   Financial Instruments: Presentation 
  *  IAS 36   Impairment of Assets 
  *  IAS 38   Intangible Assets 
  *  IAS 39   Financial Instruments: Recognition and Measurement 
  *  IFRIC 16 Hedges of a Net Investment in a Foreign Operation 
 
 
 
The directors anticipate that the adoption of these Standards and 
Interpretations as appropriate in future periods will have no material impact on 
the financial statements of the Group when the relevant standards come into 
effect for periods commencing after 1 January 2009. 
 
 
29.EXCHANGE RATE 
 
 
The US Dollar to Pound Sterling exchange rate at 31 December 2008 was 
US$1.44056/GBP (2007: US$1.9994/GBP). 
 
 
 
 
30.    COMPARATIVE FIGURES 
 
 
Certain comparative figures have been reclassified to conform to the current 
year's presentation. The new classification of the accounting items was 
considered to provide a more appropriate presentation of the state of affairs of 
the Group. 
 
 
 
 
31.    ULTIMATE CONTROLLING PARTY 
 
 
The directors consider that Chin Dynasty Foundation Limited ("CDFL"), a company 
incorporated in the British Virgin Islands is the ultimate holding company. CDFL 
is controlled by the Chin Dynasty Fund. No group financial statements for CDFL 
are published. 
 
 
The Chin Dynasty Fund is a discretionary trust where Mr. Qin Shun Chao is the 
settler. Members of Mr. Qin's family are the potential beneficiaries of the 
trust. 
 
 
The Company's immediate parent company is Keen Lloyd Holdings Limited, a company 
incorporated in the British Virgin Islands. 
 
 
 
 
 
 
 
 
 
 
 
 
 
This information is provided by RNS 
            The company news service from the London Stock Exchange 
   END 
 
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