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| Share Name | Share Symbol | Market | Type | Share ISIN | Share Description |
|---|---|---|---|---|---|
| China Bio | LSE:CBI | London | Ordinary Share | VGG211791097 | ORD USD0.01 (DI) |
| Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
|---|---|---|---|---|---|---|---|---|---|---|
| 0.00 | 0.00% | 13.50 | 0.00 | 01:00:00 |
| Industry Sector | Turnover | Profit | EPS - Basic | PE Ratio | Market Cap |
|---|---|---|---|---|---|
| 0 | 0 | N/A | 0 |
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TIDMCBI
RNS Number : 3620K
China Biodiesel International Hold
19 April 2010
China Biodiesel International Holding Co., Ltd.
('China Biodiesel', 'CBI' or the 'Company')
Preliminary results for the year ended 31 December 2009
China Biodiesel (AIM:CBI), one of China's leading renewable energy companies,
focused on research and development, production, and marketing of biodiesel as a
substitute for diesel or petrochemical materials, announces its preliminary
results for the year ended 31 December 2009.
Key financials
+----------------------------+------------+------------+------------+
| | 2007 | 2008 | 2009 |
+----------------------------+------------+------------+------------+
| Sales volume (Tons) | 26,095 | 25,273 | 39,308 |
+----------------------------+------------+------------+------------+
| Revenue (RMB) | 124.6m | 164.2m | 167.95m |
+----------------------------+------------+------------+------------+
| Net profit (RMB) | 16.55m | 4.10m | 11.46m |
+----------------------------+------------+------------+------------+
| Earning per share (basic) | 0.365 | 0.091 | 0.253 |
| (RMB) | | | |
+----------------------------+------------+------------+------------+
| Cash generated from | 33.2m | 2.81m | 30.45m |
| operations (RMB) | | | |
+----------------------------+------------+------------+------------+
| Proposed final dividend | 0.0365 | 0 | 0.0253 |
| per share (RMB) | | | |
+----------------------------+------------+------------+------------+
Highlights
l Sales volume up 55.53 per cent to 39,308 tons (2008: 25,273 tons);
l Net profit increased by 180 per cent to RMB11.50 million (2008: RMB4.10
million);
l Cash generated from operations increased by 982 per cent to RMB30.45 million
(2008: RMB2.81 million);
l Increase in higher margin B1 and B2 biodiesel sales volumes, accounting for
97.16 per cent of revenue (2008: 89.87 per cent);
l A "Postdoctoral R&D Working Station" was set up in the Longyan biodiesel
plant;
l Xiamen Zhuoyue Biomass Energy Co., Ltd (the "Xiamen Subsidiary") was named by
the municipal government as "an Advanced Unit with Recycling Economy"; and
l Expansion of international trade.
Commenting on the final results, Executive Chairman Huodong Ye said: "2009 was a
milestone year for CBI. During a period of challenging global economic
conditions, CBI not only experienced a recovery in revenue and profits but was
also able to greatly improve its working capital. With the invaluable experience
the board has gained through this period, I believe CBI is well placed to
achieve further growth in the period ahead."
Enquiries:
+------------------------+--------------------------------------------+
| China Biodiesel International Holdings Co., Ltd |
| |
+---------------------------------------------------------------------+
| Gloria He, CFO | +86 (592) 719 1103 |
+------------------------+--------------------------------------------+
| James Wang, Company | +86 (592) 719 1109 |
| Secretary | |
+------------------------+--------------------------------------------+
| | |
+------------------------+--------------------------------------------+
| Evolution Securities | |
| Ltd | |
+------------------------+--------------------------------------------+
| Bobbie Hilliam or | + 44 (0) 207 071 4300 |
| Chris Clarke | |
+------------------------+--------------------------------------------+
Chairman's Statement
2009 was a milestone year for CBI, with the Company recovering from the effects
of the sharp global economic downturn experienced in 2008 and early 2009 to
report record sales volumes. This growth in volume was achieved via an expansion
in the number of sales channels used by the Company and an increase in number of
customers. The board is pleased to report that this growth in volume was
achieved while maintaining the quality of CBI's products. As a result of the
increased sales volume the Xiamen plant became profitable during the fourth
quarter of 2009.
Continuously improved technology has helped the Company further optimise its
product mixture, under which the percentage of higher value-added products
increased and margins were improved despite a fall in selling price. Moreover,
the Company was granted awards during the year in respect of such technology
innovation.
The working capital of the Company was strengthened during 2009. A strict credit
policy kept the Company away from financial risk and dramatically reduced
trading accounts receivable. Operating cash inflow also increased by 982 per
cent to RMB30.45 million due to working capital efficiencies. The gearing of the
Company was also significantly reduced through debt repayment.
The Company continued to receive support from the Chinese government with direct
grants being received due to CBI's energy-saving and renewable energy production
and technology innovation. Furthermore, as a qualified biodiesel company
utilising waste oil as feedstock, the Company benefited from a preferential
policy whereby it continued to receive VAT refunds. The board believes that the
Chinese government will continue its commitment to promote the renewable
industry and therefore provide further grants and assistance to help CBI's
future development. The impact of government support in the renewable industry
is evidenced within Hainan Province, which has, since 1 January 2010, become the
first Chinese province to have a mandate of 5 per cent of diesel sales via a
biodiesel blend.
Overall, while the world economy is still relatively stagnant, compared to a
year ago the Company is far stronger, better positioned and more experienced.
With production facilities capable of a higher output, well developed and
flexible technology, and an increasing share of the biomaterial market in which
the Company operates, the board remains confident that the Company will continue
to grow in the future.
Operational Review
In 2009, CBI successfully expanded its sales volume by 55.53 per cent to 39,308
tons for the year, with 15,018 tons in the first half and 24,290 tons in the
second half of the year. This growth has been fueled by an expansion in the
number of sales channels used by the Company and an expansion of customers in
both domestic and international markets.
During the year, 44,630 tons of feedstock oil was collected, compared with
30,028 tons in 2008. This increased procurement was achieved through an expanded
network of national suppliers, specifically in North China and West China and
internationally in Southeast Asian countries.
An improved product mix combined with strict cost control resulted in higher
year-on-year margins of 14.0 per cent (2008: 5.92 per cent). This increased
margin was achieved through a focus on selling higher margin products. As a
result of this focus, higher margin products (i.e. B1 and B2) accounted for
97.16 per cent of total revenue (2008: 89.87 per cent). Higher output scale also
led to decreased unit costs. The Xiamen plant, which restarted its production in
the second quarter, became profitable from the fourth quarter of the year.
Efficient working capital management and strict credit control led to a
healthier financial structure and reduced costs within the Company. Due to its
market leading position the Company was able to implement a strict credit
control policy during the second half of the year under which no credit on sales
was given to customers. As a result trading receivables were dramatically
reduced, which contributed to an increased operating cash inflow. The bank loans
of the Company were also reduced which resulted in a better debt-to-asset rate
and a lower interest cost. The two biodiesel subsidiaries of the Company
continue to get the highest credit rating from the Agricultural Bank of China.
During the year, the Company kept working hard to improve technology. A
"Postdoctoral R&D Working Station" was set up at the Longyan biodiesel plant and
Longyan Zhuoyue New Energy Development Co., Ltd. was named by the provincial
government as a "Provincial Creative Enterprise". The Xiamen subsidiary was
named by the municipal government as "an Advanced Unit with Recycling Economy".
The quality of CBI's biodiesel for burning fully passed tests and complied with
the national criterion (BD100 used in diesel engines). Consequently, the Company
continues to receive governmental financial support in the form of grants and
VAT refunds.
Financial Review
Revenues
The Company's sales volumes grew by 55.46 per cent to 39,308 tons in 2009 (2008:
25,273 tons). As a result of falling commodity prices worldwide in 2009, the
average selling price of our biodiesel products fell by 34.16 per cent to
RMB4,270 per ton (2008: RMB6,497 per ton). The annual revenue of RMB167.95
million, represented an increase of 2.28 per cent over the prior year (2008:
RMB164.2 million).
Gross margin was lifted to 14 per cent of the revenue (2008: 5.92 per cent) as a
combined result of increasing VAT refunds and improved product mix. The Company
received a VAT refund of RMB20.7 million in 2009 (2008: RMB 4.31 million), as a
result of increased sales of biodiesel products made of waste oils. Improvements
in the product mix meant that sale of B1 and B2, with higher value and
non-capped pricing, accounted for 97.16 per cent of the total sales (2008: 89.87
per cent).
During the year, the Company received government grants amounting to RMB11.49
million (2008: RMB15.35 million). These grants were related to the Company's
contribution to both producing energy from non-corn resource and technology
innovation.
Costs and expenses
Due to the low price of feedstock in late 2008 and early 2009, costs of goods
fell 33.05 per cent year on year to RMB4,201 per ton (2008: RMB6,283 per ton).
As a result of an increased client service offering, particularly for
transportation, distribution costs increased to RMB6.55 million (2008: RMB1.15
million), being 3.9 per cent of revenue (2008: 0.7 per cent).
The increase in distribution costs however was more than offset by strict
controls over costs and timing with administrative expenses reduced by 11.06 per
cent to RMB12.88 million (2008: RMB14.49 million).
Results for the year
As a result of the higher margin mentioned above, gross profit for the year grew
by 142 per cent to RMB23.51 million (2008: RMB9.72 million). Net profit for the
year grew by 180 per cent to RMB11.46 million (2008: RMB4.1 million). Return on
net assets also increased to 5.9 per cent (2008: 2.25 per cent).
Working capital management
Because of higher net profit, net cash inflow from operations was greatly
improved in 2009 to RMB30.45 million (2008: RMB2.81 million). Cash in hand also
grew to RMB29.73 million (2008: RMB17.49 million).
A strict credit policy also helped improve cash inflow. Trade receivables were
cut to RMB1 million (2008: RMB9.7 million) due to a policy of zero credit being
given to customers from the second half of the year. Some trade credit to
customers was replaced by bank drafts, which are deemed by management to be of
low risk.
Short-term liabilities were reduced by 7.55 per cent to RMB44.31 million (2008:
RMB47.89 million). Net current assets increased by 180 per cent to RMB23.40
million (2008: RMB8.35 million). The financing structure of the Company was also
improved, as the debt-to-asset ratio fell to 0.186 at the end of 2009 from 0.208
at the end of 2008.
Bank facility
The outstanding bank loans of the Company were reduced by 22.95 per cent during
2009 to RMB29.55 million (2008: RMB38.35 million).
Dividend
The directors propose a final dividend for 2009 of RMB0.0253 per share which, if
approved by shareholders at the Company's annual general meeting on 2 June 2010,
will be paid on 5 July 2010 to shareholders on the register at 18 June 2010
(2009: no dividend).
CONSOLIDATED INCOME STATEMENT
FOR THE YEAR ENDED 31 DECEMBER 2009
+-------------------------------------+--------+----------+---------------+----------+---------------+
| | Notes | | 2009 | | 2008 |
+-------------------------------------+--------+----------+---------------+----------+---------------+
| | | | RMB | | RMB |
+-------------------------------------+--------+----------+---------------+----------+---------------+
| | | | | | |
+-------------------------------------+--------+----------+---------------+----------+---------------+
| | | | | | |
+-------------------------------------+--------+----------+---------------+----------+---------------+
| Revenue | 3 | | 167,948,509 | | 164,199,041 |
+-------------------------------------+--------+----------+---------------+----------+---------------+
| Government subsidy | 4 | | 20,699,210 | | 4,305,092 |
+-------------------------------------+--------+----------+---------------+----------+---------------+
| Cost of sales | | | (165,139,338) | | (158,782,804) |
+-------------------------------------+--------+----------+---------------+----------+---------------+
| | | | | | |
+-------------------------------------+--------+----------+---------------+----------+---------------+
| Gross profit | | | 23,508,381 | | 9,721,329 |
+-------------------------------------+--------+----------+---------------+----------+---------------+
| Other income | 5 | | 11,616,615 | | 19,082,643 |
+-------------------------------------+--------+----------+---------------+----------+---------------+
| Distribution costs | | | (6,550,814) | | (1,145,390) |
+-------------------------------------+--------+----------+---------------+----------+---------------+
| Write-down of inventories | | | (438,190) | | (7,036,340) |
+-------------------------------------+--------+----------+---------------+----------+---------------+
| Administrative expenses | | | (12,884,989) | | (14,486,471) |
+-------------------------------------+--------+----------+---------------+----------+---------------+
| Other operating expenses | | | (357,933) | | (244,917) |
+-------------------------------------+--------+----------+---------------+----------+---------------+
| Finance income | 8 | | 89,509 | | 140,156 |
+-------------------------------------+--------+----------+---------------+----------+---------------+
| Finance costs | 8 | | (1,971,839) | | (1,725,228) |
+-------------------------------------+--------+----------+---------------+----------+---------------+
| | | | | | |
+-------------------------------------+--------+----------+---------------+----------+---------------+
| Profit before income tax expense | 7 | | 13,010,740 | | 4,305,782 |
+-------------------------------------+--------+----------+---------------+----------+---------------+
| Income tax expense | 10 | | (1,551,014) | | (202,076) |
+-------------------------------------+--------+----------+---------------+----------+---------------+
| | | | | | |
+-------------------------------------+--------+----------+---------------+----------+---------------+
| Profit for the year | | | 11,459,726 | | 4,103,706 |
+-------------------------------------+--------+----------+---------------+----------+---------------+
| | | | | | |
+-------------------------------------+--------+----------+---------------+----------+---------------+
| Other comprehensive income | | | | | |
+-------------------------------------+--------+----------+---------------+----------+---------------+
| | | | | | |
+-------------------------------------+--------+----------+---------------+----------+---------------+
| Exchange difference on translation | | | (57,236) | | (46,266) |
| of foreign operations | | | | | |
+-------------------------------------+--------+----------+---------------+----------+---------------+
| Total comprehensive income for the | | | 11,402,490 | | 4,057,440 |
| year | | | | | |
+-------------------------------------+--------+----------+---------------+----------+---------------+
| | | | | | |
+-------------------------------------+--------+----------+---------------+----------+---------------+
| Profit for the year attributable | | | | | |
| to: | | | | | |
+-------------------------------------+--------+----------+---------------+----------+---------------+
| - Owners of the Company | | | 11,478,455 | | 4,127,722 |
+-------------------------------------+--------+----------+---------------+----------+---------------+
| - Minority interests | | | (18,729) | | (24,016) |
+-------------------------------------+--------+----------+---------------+----------+---------------+
| | | | | | |
+-------------------------------------+--------+----------+---------------+----------+---------------+
| | | | 11,459,726 | | 4,103,706 |
+-------------------------------------+--------+----------+---------------+----------+---------------+
| | | | | | |
+-------------------------------------+--------+----------+---------------+----------+---------------+
| Total comprehensive income for the | | | | | |
| year attributable to: | | | | | |
+-------------------------------------+--------+----------+---------------+----------+---------------+
| - Owners of the Company | | | 11,421,219 | | 4,081,456 |
+-------------------------------------+--------+----------+---------------+----------+---------------+
| - Minority interests | | | (18,729) | | (24,016) |
+-------------------------------------+--------+----------+---------------+----------+---------------+
| | | | | | |
+-------------------------------------+--------+----------+---------------+----------+---------------+
| | | | 11,402,490 | | 4,057,440 |
+-------------------------------------+--------+----------+---------------+----------+---------------+
| | | | | | |
+-------------------------------------+--------+----------+---------------+----------+---------------+
| | | | | | |
+-------------------------------------+--------+----------+---------------+----------+---------------+
| Earnings per share | | | | | |
+-------------------------------------+--------+----------+---------------+----------+---------------+
| Basic | 11 | | 0.253 | | 0.091 |
+-------------------------------------+--------+----------+---------------+----------+---------------+
| | | | | | |
+-------------------------------------+--------+----------+---------------+----------+---------------+
| Diluted | 11 | | 0.253 | | 0.091 |
+-------------------------------------+--------+----------+---------------+----------+---------------+
| | | | | | |
+-------------------------------------+--------+----------+---------------+----------+---------------+
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
AS AT 31 DECEMBER 2009
+---------------------------+-------+-+--------------+-+-------------+
| | Notes | | 2009 | | 2008 |
+---------------------------+-------+-+--------------+-+-------------+
| | | | RMB | | RMB |
+---------------------------+-------+-+--------------+-+-------------+
| | | | | | |
+---------------------------+-------+-+--------------+-+-------------+
| Assets | | | | | |
+---------------------------+-------+-+--------------+-+-------------+
| | | | | | |
+---------------------------+-------+-+--------------+-+-------------+
| Non-current assets | | | | | |
+---------------------------+-------+-+--------------+-+-------------+
| Property, plant and | 12 | | 160,889,296 | | 164,944,419 |
| equipment | | | | | |
+---------------------------+-------+-+--------------+-+-------------+
| Deposits for acquisition | | | 1,393,959 | | - |
| of property, plant and | | | | | |
| equipment | | | | | |
+---------------------------+-------+-+--------------+-+-------------+
| Payments for leasehold | | | | | |
| land held for own use | 13 | | 8,474,431 | | 8,743,363 |
| under operating leases | | | | | |
+---------------------------+-------+-+--------------+-+-------------+
| Other intangible assets | | | 1,895 | | 2,341 |
+---------------------------+-------+-+--------------+-+-------------+
| Deferred tax assets | | | - | | 711,518 |
+---------------------------+-------+-+--------------+-+-------------+
| | | | | | |
+---------------------------+-------+-+--------------+-+-------------+
| Total non-current assets | | | 170,759,581 | | 174,401,641 |
+---------------------------+-------+-+--------------+-+-------------+
| | | | | | |
+---------------------------+-------+-+--------------+-+-------------+
| | | | | | |
+---------------------------+-------+-+--------------+-+-------------+
| Current assets | | | | | |
+---------------------------+-------+-+--------------+-+-------------+
| Inventories | 14 | | 17,070,115 | | 14,558,258 |
+---------------------------+-------+-+--------------+-+-------------+
| Trade and other | 15 | | 20,908,686 | | 23,252,801 |
| receivables | | | | | |
+---------------------------+-------+-+--------------+-+-------------+
| Income tax recoverable | | | - | | 940,405 |
+---------------------------+-------+-+--------------+-+-------------+
| Cash and cash | | | 29,725,910 | | 17,492,467 |
| equivalents | | | | | |
+---------------------------+-------+-+--------------+-+-------------+
| | | | | | |
+---------------------------+-------+-+--------------+-+-------------+
| Total current assets | | | 67,704,711 | | 56,243,931 |
+---------------------------+-------+-+--------------+-+-------------+
| | | | | | |
+---------------------------+-------+-+--------------+-+-------------+
| | | | | | |
+---------------------------+-------+-+--------------+-+-------------+
| Total assets | | | 238,464,292 | | 230,645,572 |
+---------------------------+-------+-+--------------+-+-------------+
| | | | | | |
+---------------------------+-------+-+--------------+-+-------------+
| | | | | | |
+---------------------------+-------+-+--------------+-+-------------+
| Liabilities | | | | | |
+---------------------------+-------+-+--------------+-+-------------+
| | | | | | |
+---------------------------+-------+-+--------------+-+-------------+
| Current liabilities | | | | | |
+---------------------------+-------+-+--------------+-+-------------+
| Trade and other payables | 16 | | 13,193,731 | | 9,540,460 |
+---------------------------+-------+-+--------------+-+-------------+
| Current tax liabilities | | | 1,567,738 | | |
| | | | | | - |
+---------------------------+-------+-+--------------+-+-------------+
| Other financial | 17 | | 29,545,221 | | 38,350,000 |
| liabilities | | | | | |
+---------------------------+-------+-+--------------+-+-------------+
| | | | | | |
+---------------------------+-------+-+--------------+-+-------------+
| Total current liabilities | | | 44,306,690 | | 47,890,460 |
+---------------------------+-------+-+--------------+-+-------------+
| | | | | | |
+---------------------------+-------+-+--------------+-+-------------+
| | | | | | |
+---------------------------+-------+-+--------------+-+-------------+
| NET ASSETS | | | 194,157,602 | | 182,755,112 |
+---------------------------+-------+-+--------------+-+-------------+
| | | | | | |
+---------------------------+-------+-+--------------+-+-------------+
CONSOLIDATED STATEMENT OF FINANCIAL POSITION (CONTINUED)
AS AT 31 DECEMBER 2009
+------------------------------------+-------+----------+-------------+----------+-------------+
| |Notes | | 2009 | | 2008 |
+------------------------------------+-------+----------+-------------+----------+-------------+
| | | | RMB | | RMB |
+------------------------------------+-------+----------+-------------+----------+-------------+
| | | | | | |
+------------------------------------+-------+----------+-------------+----------+-------------+
| Capital and reserves attributable | | | | | |
| to | | | | | |
| owners of the Company | | | | | |
+------------------------------------+-------+----------+-------------+----------+-------------+
| Share capital | | | 3,632,941 | | 3,632,941 |
+------------------------------------+-------+----------+-------------+----------+-------------+
| Reserves | | | 190,262,886 | | 178,841,667 |
+------------------------------------+-------+----------+-------------+----------+-------------+
| | | | | | |
+------------------------------------+-------+----------+-------------+----------+-------------+
| Equity attributable to owners of | | | 193,895,827 | | 182,474,608 |
| the Company | | | | | |
+------------------------------------+-------+----------+-------------+----------+-------------+
| | | | | | |
+------------------------------------+-------+----------+-------------+----------+-------------+
| Minority interests | | | 261,775 | | 280,504 |
+------------------------------------+-------+----------+-------------+----------+-------------+
| | | | | | |
+------------------------------------+-------+----------+-------------+----------+-------------+
| TOTAL EQUITY | | | 194,157,602 | | 182,755,112 |
+------------------------------------+-------+----------+-------------+----------+-------------+
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 DECEMBER 2009
+------------------+----------+-----------+----------+------------+----------+-------------+----------+-------------+----------+-----------+----------+-----------+----------+------------+----------+-----------+----------+--------------+----------+-------------+----------+-----------+----------+-------------+
| | | Equity attributable to owners of the Company | | | | |
+------------------+----------+-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------+----------+-----------+----------+-------------+
| | | Share | | Share | | Contributed | | Foreign | | Share | | | | | | | | | | | | | | Total |
| | | | | | | surplus | | exchange | | option | | Merger | | General | | Proposed | | Retained | | Sub-total | | Minority | | |
| | | capital | | Premium | | | | reserve | | reserve | | reserve | | reserve | | dividend | | earnings | | | | interests | | |
+------------------+----------+-----------+----------+------------+----------+-------------+----------+-------------+----------+-----------+----------+-----------+----------+------------+----------+-----------+----------+--------------+----------+-------------+----------+-----------+----------+-------------+
| | | RMB | | RMB | | RMB | | RMB | | RMB | | RMB | | RMB | | RMB | | RMB | | RMB | | RMB | | RMB |
+------------------+----------+-----------+----------+------------+----------+-------------+----------+-------------+----------+-----------+----------+-----------+----------+------------+----------+-----------+----------+--------------+----------+-------------+----------+-----------+----------+-------------+
| | | | | | | | | | | | | | | | | (note | | | | | | | | |
| | | | | | | | | | | | | | | | | 20) | | | | | | | | |
+------------------+----------+-----------+----------+------------+----------+-------------+----------+-------------+----------+-----------+----------+-----------+----------+------------+----------+-----------+----------+--------------+----------+-------------+----------+-----------+----------+-------------+
| | | | | | | | | | | | | | | | | | | | | | | | | |
+------------------+----------+-----------+----------+------------+----------+-------------+----------+-------------+----------+-----------+----------+-----------+----------+------------+----------+-----------+----------+--------------+----------+-------------+----------+-----------+----------+-------------+
| At 1 January | | 3,632,941 | | 90,572,623 | | 5,047,816 | | (1,818,086) | | 2,229,427 | | (121,330) | | 8,518,709 | | | | 70,331,052 | | 178,849,241 | | 304,520 | | 179,153,761 |
| 2008 | | | | | | | | | | | | | | | | 456,089 | | | | | | | | |
+------------------+----------+-----------+----------+------------+----------+-------------+----------+-------------+----------+-----------+----------+-----------+----------+------------+----------+-----------+----------+--------------+----------+-------------+----------+-----------+----------+-------------+
| | | | | | | | | | | | | | | | | | | | | | | | | |
+------------------+----------+-----------+----------+------------+----------+-------------+----------+-------------+----------+-----------+----------+-----------+----------+------------+----------+-----------+----------+--------------+----------+-------------+----------+-----------+----------+-------------+
| Total | | - | | - | | - | | (46,266) | | - | | - | | - | | | | 4,127,722 | | 4,081,456 | | (24,016) | | 4,057,440 |
| comprehensive | | | | | | | | | | | | | | | | - | | | | | | | | |
| income for the | | | | | | | | | | | | | | | | | | | | | | | | |
| year | | | | | | | | | | | | | | | | | | | | | | | | |
+------------------+----------+-----------+----------+------------+----------+-------------+----------+-------------+----------+-----------+----------+-----------+----------+------------+----------+-----------+----------+--------------+----------+-------------+----------+-----------+----------+-------------+
| Provision for | | - | | - | | - | | - | | - | | - | | 1,634,568 | | - | | (1,634,568) | | - | | - | | - |
| general reserve | | | | | | | | | | | | | | | | | | | | | | | | |
+------------------+----------+-----------+----------+------------+----------+-------------+----------+-------------+----------+-----------+----------+-----------+----------+------------+----------+-----------+----------+--------------+----------+-------------+----------+-----------+----------+-------------+
| 2007 dividends | | - | | - | | - | | - | | - | | - | | - | | (456,089) | | - | | (456,089) | | - | | (456,089) |
| paid | | | | | | | | | | | | | | | | | | | | | | | | |
+------------------+----------+-----------+----------+------------+----------+-------------+----------+-------------+----------+-----------+----------+-----------+----------+------------+----------+-----------+----------+--------------+----------+-------------+----------+-----------+----------+-------------+
| | | | | | | | | | | | | | | | | | | | | | | | | |
+------------------+----------+-----------+----------+------------+----------+-------------+----------+-------------+----------+-----------+----------+-----------+----------+------------+----------+-----------+----------+--------------+----------+-------------+----------+-----------+----------+-------------+
| At 31 December | | 3,632,941 | | 90,572,623 | | 5,047,816 | | (1,864,352) | | 2,229,427 | | (121,330) | | 10,153,277 | | | | 72,824,206 | | 182,474,608 | | 280,504 | | 182,755,112 |
| 2008 and | | | | | | | | | | | | | | | | - | | | | | | | | |
| 1 January 2009 | | | | | | | | | | | | | | | | | | | | | | | | |
+------------------+----------+-----------+----------+------------+----------+-------------+----------+-------------+----------+-----------+----------+-----------+----------+------------+----------+-----------+----------+--------------+----------+-------------+----------+-----------+----------+-------------+
| | | | | | | | | | | | | | | | | | | | | | | | | |
+------------------+----------+-----------+----------+------------+----------+-------------+----------+-------------+----------+-----------+----------+-----------+----------+------------+----------+-----------+----------+--------------+----------+-------------+----------+-----------+----------+-------------+
| Total | | - | | - | | - | | (57,236) | | - | | - | | - | | | | 11,478,455 | | 11,421,219 | | (18,729) | | 11,402,490 |
| comprehensive | | | | | | | | | | | | | | | | - | | | | | | | | |
| income for the | | | | | | | | | | | | | | | | | | | | | | | | |
| year | | | | | | | | | | | | | | | | | | | | | | | | |
+------------------+----------+-----------+----------+------------+----------+-------------+----------+-------------+----------+-----------+----------+-----------+----------+------------+----------+-----------+----------+--------------+----------+-------------+----------+-----------+----------+-------------+
| Provision for | | - | | - | | - | | - | | - | | - | | 1,732,893 | | - | | (1,732,893) | | - | | - | | - |
| general reserve | | | | | | | | | | | | | | | | | | | | | | | | |
+------------------+----------+-----------+----------+------------+----------+-------------+----------+-------------+----------+-----------+----------+-----------+----------+------------+----------+-----------+----------+--------------+----------+-------------+----------+-----------+----------+-------------+
| 2009 proposed | | - | | - | | - | | - | | - | | - | | - | | 1,147,846 | | (1,147,846) | | - | | - | | |
| dividends | | | | | | | | | | | | | | | | | | | | | | | | - |
+------------------+----------+-----------+----------+------------+----------+-------------+----------+-------------+----------+-----------+----------+-----------+----------+------------+----------+-----------+----------+--------------+----------+-------------+----------+-----------+----------+-------------+
| | | | | | | | | | | | | | | | | | | | | | | | | |
+------------------+----------+-----------+----------+------------+----------+-------------+----------+-------------+----------+-----------+----------+-----------+----------+------------+----------+-----------+----------+--------------+----------+-------------+----------+-----------+----------+-------------+
| At 31 December | | 3,632,941 | | 90,572,623 | | 5,047,816 | | (1,921,588) | | 2,229,427 | | (121,330) | | 11,886,170 | | 1,147,846 | | 81,421,922 | | 193,895,827 | | 261,775 | | 194,157,602 |
| 2009 | | | | | | | | | | | | | | | | | | | | | | | | |
+------------------+----------+-----------+----------+------------+----------+-------------+----------+-------------+----------+-----------+----------+-----------+----------+------------+----------+-----------+----------+--------------+----------+-------------+----------+-----------+----------+-------------+
CONSOLIDATED STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED 31 DECEMBER 2009
+---------------------------------------+----------+-------+----------+--------------+----------+--------------+
| | | Notes | | 2009 | | 2008 |
+---------------------------------------+----------+-------+----------+--------------+----------+--------------+
| | | | | RMB | | RMB |
+---------------------------------------+----------+-------+----------+--------------+----------+--------------+
| | | | | | | |
+---------------------------------------+----------+-------+----------+--------------+----------+--------------+
| Operating activities | | | | | | |
+---------------------------------------+----------+-------+----------+--------------+----------+--------------+
| Profit before income tax expense | | | | 13,010,740 | | 4,305,782 |
+---------------------------------------+----------+-------+----------+--------------+----------+--------------+
| Adjustments for: | | | | | | |
+---------------------------------------+----------+-------+----------+--------------+----------+--------------+
| Interest income | | | | (89,509) | | (140,156) |
+---------------------------------------+----------+-------+----------+--------------+----------+--------------+
| Loss on disposal of property, plant | | | | 171,560 | | - |
| and equipment | | | | | | |
+---------------------------------------+----------+-------+----------+--------------+----------+--------------+
| Depreciation of property, plant and | | | | 10,772,059 | | 8,424,420 |
| equipment | | | | | | |
+---------------------------------------+----------+-------+----------+--------------+----------+--------------+
| Amortisation of land lease payments | | | | 278,932 | | 198,046 |
+---------------------------------------+----------+-------+----------+--------------+----------+--------------+
| Amortisation of other intangible | | | | 446 | | 446 |
| assets | | | | | | |
+---------------------------------------+----------+-------+----------+--------------+----------+--------------+
| Write-down of inventories | | | | 438,190 | | 7,036,340 |
+---------------------------------------+----------+-------+----------+--------------+----------+--------------+
| Interest expense | | | | 1,971,839 | | 1,725,228 |
+---------------------------------------+----------+-------+----------+--------------+----------+--------------+
| | | | | | | |
+---------------------------------------+----------+-------+----------+--------------+----------+--------------+
| Operating profit before working | | | | 26,554,257 | | 21,550,106 |
| capital changes | | | | | | |
+---------------------------------------+----------+-------+----------+--------------+----------+--------------+
| Increase in inventories | | | | (2,950,047) | | (13,151,366) |
+---------------------------------------+----------+-------+----------+--------------+----------+--------------+
| Decrease/(increase) in trade and | | | | 775,618 | | (5,126,654) |
| other receivables | | | | | | |
+---------------------------------------+----------+-------+----------+--------------+----------+--------------+
| Increase/(decrease)/ in trade and | | | | 6,019,712 | | (458,056) |
| other payables | | | | | | |
+---------------------------------------+----------+-------+----------+--------------+----------+--------------+
| | | | | | | |
+---------------------------------------+----------+-------+----------+--------------+----------+--------------+
| Cash generated from operations | | | | 30,399,540 | | 2,814,030 |
+---------------------------------------+----------+-------+----------+--------------+----------+--------------+
| Income tax paid | | | | (767,409) | | (3,258,577) |
+---------------------------------------+----------+-------+----------+--------------+----------+--------------+
| Income tax refunded | | | | 2,436,056 | | - |
+---------------------------------------+----------+-------+----------+--------------+----------+--------------+
| | | | | | | |
+---------------------------------------+----------+-------+----------+--------------+----------+--------------+
| Net cash from/(used in) operating | | | | 32,068,187 | | (444,547) |
| activities | | | | | | |
+---------------------------------------+----------+-------+----------+--------------+----------+--------------+
| | | | | | | |
+---------------------------------------+----------+-------+----------+--------------+----------+--------------+
| Investing activities | | | | | | |
+---------------------------------------+----------+-------+----------+--------------+----------+--------------+
| Acquisition of property, plant and | | | | (9,838,896) | | (18,428,014) |
| equipment | | | | | | |
+---------------------------------------+----------+-------+----------+--------------+----------+--------------+
| Deposit for acquisition of | | | | (1,393,959) | | - |
| property, plant and equipment | | | | | | |
+---------------------------------------+----------+-------+----------+--------------+----------+--------------+
| Land lease payments | | | | (10,000) | | (87,551) |
+---------------------------------------+----------+-------+----------+--------------+----------+--------------+
| Repayment from/(advances to) a | | | | 8,497 | | (156,229) |
| shareholder | | | | | | |
+---------------------------------------+----------+-------+----------+--------------+----------+--------------+
| Repayment from/(advances to) related | | | | 1,560,000 | | (3,500,000) |
| companies | | | | | | |
+---------------------------------------+----------+-------+----------+--------------+----------+--------------+
| Proceeds from disposal of property, | | | | 29,395 | | - |
| plant and equipment | | | | | | |
+---------------------------------------+----------+-------+----------+--------------+----------+--------------+
| Interest received | | | | 89,509 | | 140,156 |
+---------------------------------------+----------+-------+----------+--------------+----------+--------------+
| | | | | | | |
+---------------------------------------+----------+-------+----------+--------------+----------+--------------+
| Net cash used in investing activities | | | | (9,555,454) | | (22,031,638) |
+---------------------------------------+----------+-------+----------+--------------+----------+--------------+
CONSOLIDATED STATEMENTOF CASH FLOWS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2009
+-------------------------------------+----------+--------+----------+--------------+----------+-------------+
| | | Notes | | 2009 | | 2008 |
+-------------------------------------+----------+--------+----------+--------------+----------+-------------+
| | | | | RMB | | RMB |
+-------------------------------------+----------+--------+----------+--------------+----------+-------------+
| | | | | | | |
+-------------------------------------+----------+--------+----------+--------------+----------+-------------+
| Financing activities | | | | | | |
+-------------------------------------+----------+--------+----------+--------------+----------+-------------+
| Repayment of bank loans | | | | (46,350,000) | | (7,850,000) |
+-------------------------------------+----------+--------+----------+--------------+----------+-------------+
| New bank loans | | | | 37,545,221 | | 37,650,000 |
+-------------------------------------+----------+--------+----------+--------------+----------+-------------+
| Advance from/(repayment to) an | | | | 554,564 | | (5,859) |
| equity holder | | | | | | |
+-------------------------------------+----------+--------+----------+--------------+----------+-------------+
| Interest paid | | | | (1,971,839) | | (1,725,228) |
+-------------------------------------+----------+--------+----------+--------------+----------+-------------+
| Dividend paid to an equity | | | | | | (456,089) |
| shareholder | | | | - | | |
+-------------------------------------+----------+--------+----------+--------------+----------+-------------+
| Repayment to a related company | | | | | | (60,000) |
| | | | | - | | |
+-------------------------------------+----------+--------+----------+--------------+----------+-------------+
| | | | | | | |
+-------------------------------------+----------+--------+----------+--------------+----------+-------------+
| Net cash (used in)/from financing | | | | (10,222,054) | | 27,552,824 |
| activities | | | | | | |
+-------------------------------------+----------+--------+----------+--------------+----------+-------------+
| | | | | | | |
+-------------------------------------+----------+--------+----------+--------------+----------+-------------+
| Net increase in cash and cash | | | | 12,290,679 | | 5,076,639 |
| equivalents | | | | | | |
+-------------------------------------+----------+--------+----------+--------------+----------+-------------+
| | | | | | | |
+-------------------------------------+----------+--------+----------+--------------+----------+-------------+
| Cash and cash equivalents at | | | | 17,492,467 | | 12,462,094 |
| beginning of year | | | | | | |
+-------------------------------------+----------+--------+----------+--------------+----------+-------------+
| | | | | | | |
+-------------------------------------+----------+--------+----------+--------------+----------+-------------+
| Effect of foreign exchange rate | | | | (57,236) | | (46,266) |
| changes | | | | | | |
+-------------------------------------+----------+--------+----------+--------------+----------+-------------+
| | | | | | | |
+-------------------------------------+----------+--------+----------+--------------+----------+-------------+
| Cash and cash equivalents at end of | | | | 29,725,910 | | 17,492,467 |
| year | | | | | | |
+-------------------------------------+----------+--------+----------+--------------+----------+-------------+
| | | | | | | |
+-------------------------------------+----------+--------+----------+--------------+----------+-------------+
| Cash and cash equivalents comprises | | | | | | |
+-------------------------------------+----------+--------+----------+--------------+----------+-------------+
| Cash and bank balances | | | | 29,725,910 | | 17,492,467 |
+-------------------------------------+----------+--------+----------+--------------+----------+-------------+
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS 31 DECEMBER 2009
1. GENERAL
China Biodiesel International Holding Co., Limited (the "Company")
was incorporated in the British Virgin Islands on 18 October 2005. Its
registered office is at Nerine Chamber, PO Box 905, Road Town, Tortola, the
British Virgin Islands. The shares of the Company were admitted to trading on
the Alternative Investment Market ("AIM") of the London Stock Exchange plc (the
"Stock Exchange") on 30 June 2006.
The principal activities of the Company and its subsidiaries
(hereinafter collectively referred to as the "Group") are the manufacturingand
sale of biodiesel products and the provision of services in connection with
biodiesel distillation technologies in the People's Republic of China (the
"PRC"). The Group's principal places of business are at Longyan and Xiamen, both
cities are located in the Fujian Province, the PRC.
2. SEGMENT INFORMATION
On first-time adoption of IFRS 8 "Operating segments" which requires an entity
to report operating segments in a manner consistent with the internal reporting
provided to the chief operating decision-maker, there was no additional
reportable segment identified for the Group as the Group as a whole forms an
operating segment engaging in producing and marketing of biodiesel products in
the PRC. In addition, the Group's turnover and operating profit are almost
entirely derived from its operations in the PRC. As a result, no segment
analysis has been presented.
Revenue from a customer of the corresponding years contributing over 10% of the
total sales of the Group is as follows:
+-----------------------------------------+--+-------------+----------+-------------+
| | | 2009 | | 2008 |
+-----------------------------------------+--+-------------+----------+-------------+
| | | RMB | | RMB |
+-----------------------------------------+--+-------------+----------+-------------+
| | | | | |
+-----------------------------------------+--+-------------+----------+-------------+
| Customer A | | 22,010,997 | | 53,983,476 |
+-----------------------------------------+--+-------------+----------+-------------+
3. REVENUE
Revenue represents the net invoiced value of goods sold and service income
earned by the Group. The amount of each significant category of revenue
recognised during the year is as follows:
+-----------------------------------------+--+-------------+----------+-------------+
| | | 2009 | | 2008 |
+-----------------------------------------+--+-------------+----------+-------------+
| | | RMB | | RMB |
+-----------------------------------------+--+-------------+----------+-------------+
| | | | | |
+-----------------------------------------+--+-------------+----------+-------------+
| Revenue arises from: | | | | |
+-----------------------------------------+--+-------------+----------+-------------+
| Sale of biodiesel products | | 167,848,509 | | 164,099,041 |
+-----------------------------------------+--+-------------+----------+-------------+
| Provision of technology services and | | 100,000 | | 100,000 |
| others | | | | |
+-----------------------------------------+--+-------------+----------+-------------+
| | | | | |
+-----------------------------------------+--+-------------+----------+-------------+
| | | 167,948,509 | | 164,199,041 |
+-----------------------------------------+--+-------------+----------+-------------+
4. GOVERNMENT SUBSIDY
Government subsidy represents value-added tax ("VAT") refunded or refundable
from the government which is paid for the sale of biodiesel products made of
waste oil. Pursuant to a VAT regulation circular which was issued by the
Ministry of Finance in the PRC on 9 December 2008, both Longyan Zhuoyue New
Energy Development Co., Ltd. ("LZNE") and Xiamen Zhuoyue Biomass Energy Co.,
Ltd. ("XZBM"), being the subsidiaries of the Company producing biodiesel
products by using waste oil with "Comprehensive Utilisation of Resources"
verification issued by the relevant government authority, are eligible to claim
for the refund of VAT paid for the sale of biodiesel products since 1 July 2008.
There are no unfulfilled conditions or contingencies relating to this subsidy.
In order to provide the readers of the financial statements with more accurate
and relevant information relating to the gross profit earned by the Group from
the sale of its biodiesel products, such VAT refunds are presented as a separate
line item above the gross profit in the consolidated statement of comprehensive
income as management concluded that it is directly related to the sale of
biodiesel products made out of wasted oils. VAT refunds which were presented as
other income for the year ended 31 December 2008 have been restated.
5. OTHER INCOME
+----------------------------------------+-+-------------+-+---------------+
| | | 2009 | | 2008 |
+----------------------------------------+-+-------------+-+---------------+
| | | | | |
| | | RMB | | RMB |
+----------------------------------------+-+-------------+-+---------------+
| | | | | |
+----------------------------------------+-+-------------+-+---------------+
| Income from sale of used packaging | | | | |
| materials and semi-finished products | | 126,615 | | 3,732,643 |
+----------------------------------------+-+-------------+-+---------------+
| Government grants (note 6) | | 11,490,000 | | 15,350,000 |
+----------------------------------------+-+-------------+-+---------------+
| | | | | |
+----------------------------------------+-+-------------+-+---------------+
| | | 11,616,615 | | 19,082,643 |
+----------------------------------------+-+-------------+-+---------------+
As a result of re-utilising wasted oil barrel, the income from sale of used
packaging materials substantially decreased as compared with that in 2008.
6. GOVERNMENT GRANTS
Government grants represent the financial support from relevant government
authorities for the encouragement of the Group's engagement in energy-saving
industry andresearch and development of biodiesel products.Pursuant to relevant
notices issued by the Finance Bureau of the PRC for energy saving biodiesel
producers, as a result of the Group engaging in the production and sale of
biofuel and biodiesel, it is entitled to financial rewards the amount of which
is determined by government authorities by reference either to production
capacity of the Group or to the volume of biodiesel products produced and sold.
There are no unfulfilled conditions or contingencies relating to these grants.
+-----------------------------------------+-+------------+-+------------+
| | | 2009 | | 2008 |
+-----------------------------------------+-+------------+-+------------+
| | | RMB | | RMB |
+-----------------------------------------+-+------------+-+------------+
| | | | | |
+-----------------------------------------+-+------------+-+------------+
| Grants rewarded for the usage of | | | | |
| non-grain materials in the | | 8,440,000 | | 8,020,000 |
| production of biodiesel products | | | | |
+-----------------------------------------+-+------------+-+------------+
| Grants rewarded for engagement in | | | | 6,000,000 |
| energy-saving industry | | - | | |
+-----------------------------------------+-+------------+-+------------+
| Grants rewarded for research of | | 3,050,000 | | 1,330,000 |
| biodiesel products | | | | |
+-----------------------------------------+-+------------+-+------------+
| | | | | |
+-----------------------------------------+-+------------+-+------------+
| | | 11,490,000 | | 15,350,000 |
+-----------------------------------------+-+------------+-+------------+
7. PROFIT BEFORE INCOME TAX EXPENSE
Profit before income tax expense is arrived at after charging:
+----------------------------------------+-+-------------+-+-------------+
| | | 2009 | | 2008 |
+----------------------------------------+-+-------------+-+-------------+
| | | RMB | | RMB |
+----------------------------------------+-+-------------+-+-------------+
| | | | | |
+----------------------------------------+-+-------------+-+-------------+
| Cost of inventories recognised as | | 165,139,338 | | 158,782,804 |
| expense | | | | |
+----------------------------------------+-+-------------+-+-------------+
| Auditor's remuneration | | 536,513 | | 590,347 |
+----------------------------------------+-+-------------+-+-------------+
| Staff costs (note 9) | | 7,828,075 | | 6,847,000 |
+----------------------------------------+-+-------------+-+-------------+
| Depreciation of property, plant and | | 10,772,059 | | 8,424,420 |
| equipment | | | | |
+----------------------------------------+-+-------------+-+-------------+
| Amortisation of land lease payments | | 278,932 | | 198,046 |
+----------------------------------------+-+-------------+-+-------------+
| Write-down of inventories | | 438,190 | | 7,036,340 |
+----------------------------------------+-+-------------+-+-------------+
| Amortisation of other intangible | | 446 | | 446 |
| assets | | | | |
+----------------------------------------+-+-------------+-+-------------+
| Operating lease expense | | | | 31,200 |
| | | - | | |
+----------------------------------------+-+-------------+-+-------------+
| Exchange loss, net | | 150,166 | | 155,743 |
+----------------------------------------+-+-------------+-+-------------+
8. FINANCE INCOME AND COSTS
+----------------------------------------+-+------------+--+-----------+
| | | 2009 | | 2008 |
+----------------------------------------+-+------------+--+-----------+
| | | RMB | | RMB |
+----------------------------------------+-+------------+--+-----------+
| | | | | |
+----------------------------------------+-+------------+--+-----------+
| Finance income | | | | |
+----------------------------------------+-+------------+--+-----------+
| Bank interest income | | 89,509 | | 140,156 |
+----------------------------------------+-+------------+--+-----------+
| | | | | |
+----------------------------------------+-+------------+--+-----------+
| Finance costs | | | | |
+----------------------------------------+-+------------+--+-----------+
| Bank interest expense | | 1,971,839 | | 1,725,228 |
+----------------------------------------+-+------------+--+-----------+
9. STAFF COSTS
Staff costs (including directors) comprise:
+----------------------------------------+-+-----------+-+-----------+
| | | 2009 | | 2008 |
+----------------------------------------+-+-----------+-+-----------+
| | | RMB | | RMB |
+----------------------------------------+-+-----------+-+-----------+
| | | | | |
+----------------------------------------+-+-----------+-+-----------+
| Wages and salaries | | 6,839,935 | | 5,995,805 |
+----------------------------------------+-+-----------+-+-----------+
| Employers' national insurance | | 432,756 | | 372,392 |
| contributions | | | | |
+----------------------------------------+-+-----------+-+-----------+
| Staff welfare | | 555,384 | | 478,803 |
+----------------------------------------+-+-----------+-+-----------+
| | | | | |
+----------------------------------------+-+-----------+-+-----------+
| | | 7,828,075 | | 6,847,000 |
+----------------------------------------+-+-----------+-+-----------+
Included in staff costs are directors' emoluments analysed as follows:
+----------------------------------------+-+-----------+-+-----------+
| | | 2009 | | 2008 |
+----------------------------------------+-+-----------+-+-----------+
| | | RMB | | RMB |
+----------------------------------------+-+-----------+-+-----------+
| | | | | |
+----------------------------------------+-+-----------+-+-----------+
| Salaries | | 1,331,362 | | 1,689,820 |
+----------------------------------------+-+-----------+-+-----------+
| Employers' national insurance | | 10,015 | | 12,089 |
| contributions | | | | |
+----------------------------------------+-+-----------+-+-----------+
| | | | | |
+----------------------------------------+-+-----------+-+-----------+
| | | 1,341,377 | | 1,701,909 |
+----------------------------------------+-+-----------+-+-----------+
The key management personnel are those persons having authority and
responsibility for planning, directing and controlling the activities of the
Group. All key management personnel are the directors of the Company.
10. INCOME TAX EXPENSE
The Company itself did not generate any taxable profit for the year ended 31
December 2009, (2008: nil).
According to the new PRC tax rules and regulations effective on 1
January2008, LZNE and its subsidiaries, Longyan Zhuoyue Biodiesel Technology
Development Co., Ltd. and Xiamen Horda Industry & Trade Co., Ltd. as well as
Longyan Zhuoyue Biomass Co., Ltd. ("LZBM"), a subsidiary of the Company, are
subject to PRC Enterprise Income Tax ("EIT") at the standard rate of 25% in the
fiscal year 2009 (2008: 25%). XZBM was established in the Xiamen Special
Economic Zone prior to 16 March 2007 and is subject to EIT at a rate of 20%
(2008: 18%), which is the standard tax rate in the special economic zone in the
fiscal year 2009.
The standard EIT rate applicable to XZBM will be gradually increased from 20% to
25% during a three-year transitional period as follows:
+--------------------+-----------------+
| Year | Applicable EIT |
| | rate |
+--------------------+-----------------+
| 2010 | 22% |
+--------------------+-----------------+
| 2011 | 24% |
+--------------------+-----------------+
| 2012 | 25% |
+--------------------+-----------------+
Both LZNE and XZBM, being wholly owned foreign enterprises ("WOFE"), are
eligible to enjoy tax exemptions and tax reductions available to a WOFE. In
particular, LZNE has been eligible for a 50% reduction in the EIT standard rate
for the fiscal years 2008 and 2009 and will be eligible for such a reduction in
2010, while XZBM has been eligible for a full exemption from EIT for the two
fiscal years 2008 and 2009 and will be eligible for a 50% reduction in the EIT
standard rate for the next three fiscal years. In addition, according to the
tax circular issued by the State Administration of Taxation in the PRC ("SAT")
dated 10 April 2009, being approved as "Comprehensive Utilisation of Resources"
entities, both entities are also eligible to a preferential tax policy under
which a 10% reduction is applied to their revenue generated from the sale of
biodiesel products by utilising waste or recycled materials in the calculation
of the assessable income since 1 January 2009.
In 2008, management considered that both LZNE and XZBM would be eligible for
either of the above tax preferential policies and opted for the latter option
(i.e., the one related to the subsidiaries being approved as "Comprehensive
Utilisation of Resources" entities). However, according to further
clarification from the local tax authorities on 30 August 2009, the subsidiaries
could only enjoy the former tax preferential policy (i.e., the one related to
the subsidiaries being qualified as WOFEs) in 2008. The under-provision of EIT
arising from the above, together with the impact on exemption of EIT relating to
government grants granted in 2008 as described below, has been reflected in the
current year's tax provision.
LZBM, being a WOFE, has been eligible for a preferential tax policy of a full
exemption from EIT for the two fiscal years 2008 and 2009 and is eligible for a
50% reduction of EIT standard rate for the next three fiscal years.
Pursuant to a circular jointly issued by the Ministry of Finance in the PRC and
the SAT dated 16 June 2009, government grants that were granted on or after 1
January 2008 qualify for an EIT exemption if the following criteria are met: (1)
the entities receiving the grants must be able to provide approval documentation
issued by relevant government authorities in which usage of the grants is
specified; (2) there are detailed promulgations issued by relevant government
authorities to manage the use of the grants and (3) the grants, together with
the expenditures associated with the grants, are accounted for separately in the
books of the entities receiving the grants. The circular also states that the
expenses associated with the grants, and the depreciation and amortisation
charges in connection with the non-current assets acquired by the entities by
utilising the grants, are not deductible for the purpose of an EIT calculation.
Out of the total government grants shown in note 6, government grants in the
amount of RMB10.14 million (2008: RMB15.1 million) met the above criteria and
the local tax authority has approved the EIT exemption related to such
government grants received by the Group since 1 January 2008.
Income tax expense of the Group for the fiscal year 2009 represents the EIT
calculated at the applicable income tax rate on the assessable income.
+----------------------------------------+-+-----------+---+-----------+
| | | 2009 | | 2008 |
+----------------------------------------+-+-----------+---+-----------+
| | | RMB | | RMB |
+----------------------------------------+-+-----------+---+-----------+
| | | | | |
+----------------------------------------+-+-----------+---+-----------+
| Current tax | | | | |
+----------------------------------------+-+-----------+---+-----------+
| - tax for the year | | 383,534 | | 751,094 |
+----------------------------------------+-+-----------+---+-----------+
| - under-provision in respect of prior | | 455,962 | | - |
| years | | | | |
+----------------------------------------+-+-----------+---+-----------+
| | | | | |
+----------------------------------------+-+-----------+---+-----------+
| Deferred tax | | | | |
+----------------------------------------+-+-----------+---+-----------+
| - current year | | - | | (549,018) |
+----------------------------------------+-+-----------+---+-----------+
| - write off of deferred tax assets | | 711,518 | | - |
+----------------------------------------+-+-----------+---+-----------+
| | | | | |
+----------------------------------------+-+-----------+---+-----------+
| Income tax expense | | 1,551,014 | | 202,076 |
+----------------------------------------+-+-----------+---+-----------+
The income tax expense for the year can be reconciled to profit per consolidated
statement of comprehensive income as follows:
+----------------------------------------+-+-------------+---+-------------+
| | | 2009 | | 2008 |
+----------------------------------------+-+-------------+---+-------------+
| | | RMB | | RMB |
+----------------------------------------+-+-------------+---+-------------+
| | | | | |
+----------------------------------------+-+-------------+---+-------------+
| Profit before income tax expense | | 13,010,740 | | 4,305,782 |
+----------------------------------------+-+-------------+---+-------------+
| | |
+----------------------------------------+---------------------------------+
| Tax calculated based on the standard | | 3,252,685 | | 1,076,445 |
| rate of EIT in the PRC of 25% (2008: | | | | |
| 25%) | | | | |
+----------------------------------------+-+-------------+---+-------------+
| Tax exemption and concession | | (4,088,596) | | (4,027,105) |
+----------------------------------------+-+-------------+---+-------------+
| Tax effect of tax losses not | | 524,101 | | 494,267 |
| recognised | | | | |
+----------------------------------------+-+-------------+---+-------------+
| Tax effect of deductible temporary | | - | | 1,857,011 |
| differences not recognised | | | | |
+----------------------------------------+-+-------------+---+-------------+
| Tax effect of non-deductible expenses | | 695,344 | | 973,584 |
+----------------------------------------+-+-------------+---+-------------+
| Effect of difference between standard | | | | |
| rate and expected rate | | - | | (172,126) |
| at realisation of temporary | | | | |
| differences | | | | |
+----------------------------------------+-+-------------+---+-------------+
| Under-provision in respect of prior | | 455,962 | | - |
| years | | | | |
+----------------------------------------+-+-------------+---+-------------+
| Write off of deferred tax assets | | 711,518 | | - |
| previously recognised | | | | |
+----------------------------------------+-+-------------+---+-------------+
| | | | | |
+----------------------------------------+-+-------------+---+-------------+
| Income tax expense | | 1,551,014 | | 202,076 |
+----------------------------------------+-+-------------+---+-------------+
11. EARNINGS PER SHARE
The calculation of the basic and diluted earnings per share attributable to the
owners of the Company is based on the following data:
+------------------------------------------+------------+---+------------+
| | 2009 | | 2008 |
+------------------------------------------+------------+---+------------+
| | RMB | | RMB |
+------------------------------------------+------------+---+------------+
| Earnings | | | |
+------------------------------------------+------------+---+------------+
| | | | |
+------------------------------------------+------------+---+------------+
| Earnings for the purpose of basic | 11,478,455 | | 4,127,722 |
| earnings per share | | | |
+------------------------------------------+------------+---+------------+
| Effect of dilutive potential ordinary | - | | - |
| shares | | | |
+------------------------------------------+------------+---+------------+
| | | | |
+------------------------------------------+------------+---+------------+
| Earnings for the purpose of diluted | 11,478,455 | | 4,127,722 |
| earnings per share | | | |
+------------------------------------------+------------+---+------------+
| | | | |
+------------------------------------------+------------+---+------------+
| Number of shares | | | |
| | | | |
+------------------------------------------+------------+---+------------+
| Weighted average number of ordinary | | | |
| shares for the | 45,411,765 | | 45,411,765 |
| purpose of basic earnings per share | | | |
+------------------------------------------+------------+---+------------+
| Effect of dilutive potential ordinary | | | |
| shares: | | | |
+------------------------------------------+------------+---+------------+
| - share options | - | | - |
+------------------------------------------+------------+---+------------+
| | | | |
+------------------------------------------+------------+---+------------+
| Weighted average number of ordinary | 45,411,765 | | 45,411,765 |
| shares for the | | | |
| purpose of diluted earnings per share | | | |
+------------------------------------------+------------+---+------------+
| | | | |
+------------------------------------------+------------+---+------------+
| Earnings per share | | | |
+------------------------------------------+------------+---+------------+
| | RMB | | RMB |
+------------------------------------------+------------+---+------------+
| Basic | 0.253 | | 0.091 |
+------------------------------------------+------------+---+------------+
| | | | |
+------------------------------------------+------------+---+------------+
| Diluted | 0.253 | | 0.091 |
+------------------------------------------+------------+---+------------+
The computation of diluted earnings per share for 2009 and 2008 does not assume
the exercise of the Company's outstanding share options as the exercise price of
those options is higher than the average market price for shares in both 2009
and 2008.
12. PROPERTY, PLANT AND EQUIPMENT
+--------------------+----------+---------------+----------+-------------+----------+-----------+----------+------------+----------+--------------+----------+-------------+
| | | | | | | | | | | | | |
| | | Buildings | | | | | |Furniture, | | | | |
| | | and | | | | Motor | | fixtures | |Construction | | |
| | | structures | | Machinery | | vehicles | | and | | in progress | | Total |
| | | | | | | | | equipment | | | | |
+--------------------+----------+---------------+----------+-------------+----------+-----------+----------+------------+----------+--------------+----------+-------------+
| | | RMB | | RMB | | RMB | | RMB | | RMB | | RMB |
+--------------------+----------+---------------+----------+-------------+----------+-----------+----------+------------+----------+--------------+----------+-------------+
| 2009 | | | | | | | | | | | | |
+--------------------+----------+---------------+----------+-------------+----------+-----------+----------+------------+----------+--------------+----------+-------------+
| Cost | | | | | | | | | | | | |
+--------------------+----------+---------------+----------+-------------+----------+-----------+----------+------------+----------+--------------+----------+-------------+
| At 1 January 2009 | | 45,607,995 | | 122,396,235 | | 1,742,546 | | 827,022 | | 11,326,524 | | 181,900,322 |
+--------------------+----------+---------------+----------+-------------+----------+-----------+----------+------------+----------+--------------+----------+-------------+
| Additions | | - | | 1,919,583 | | 265,723 | | 74,678 | | 4,657,907 | | 6,917,891 |
+--------------------+----------+---------------+----------+-------------+----------+-----------+----------+------------+----------+--------------+----------+-------------+
| Transfer to | | 10,400,298 | | | | | | | | | | |
| property, plant | | | | - | | - | | - | | (10,400,298) | | - |
| and | | | | | | | | | | | | |
| equipment | | | | | | | | | | | | |
+--------------------+----------+---------------+----------+-------------+----------+-----------+----------+------------+----------+--------------+----------+-------------+
| Disposals | | - | | (423,000) | | - | | - | | - | | (423,000) |
+--------------------+----------+---------------+----------+-------------+----------+-----------+----------+------------+----------+--------------+----------+-------------+
| Reclassification | | - | | (62,545) | | - | | 62,545 | | - | | - |
+--------------------+----------+---------------+----------+-------------+----------+-----------+----------+------------+----------+--------------+----------+-------------+
| | | | | | | | | | | | | |
+--------------------+----------+---------------+----------+-------------+----------+-----------+----------+------------+----------+--------------+----------+-------------+
| At 31 December | | 56,008,293 | | 123,830,273 | | 2,008,269 | | 964,245 | | 5,584,133 | | 188,395,213 |
| 2009 | | | | | | | | | | | | |
+--------------------+----------+---------------+----------+-------------+----------+-----------+----------+------------+----------+--------------+----------+-------------+
| | | | | | | | | | | | | |
+--------------------+----------+---------------+----------+-------------+----------+-----------+----------+------------+----------+--------------+----------+-------------+
| Accumulated | | | | | | | | | | | | |
| depreciation and | | | | | | | | | | | | |
| impairment | | | | | | | | | | | | |
+--------------------+----------+---------------+----------+-------------+----------+-----------+----------+------------+----------+--------------+----------+-------------+
| At 1 January 2009 | | 1,971,478 | | 13,982,022 | | 756,227 | | 246,176 | | - | | 16,955,903 |
+--------------------+----------+---------------+----------+-------------+----------+-----------+----------+------------+----------+--------------+----------+-------------+
| Depreciation | | 1,312,029 | | 8,990,395 | | 322,305 | | 147,330 | | - | | 10,772,059 |
+--------------------+----------+---------------+----------+-------------+----------+-----------+----------+------------+----------+--------------+----------+-------------+
| Written back on | | - | | (222,045) | | - | | - | | - | | (222,045) |
| disposals | | | | | | | | | | | | |
+--------------------+----------+---------------+----------+-------------+----------+-----------+----------+------------+----------+--------------+----------+-------------+
| Reclassification | | - | | (5,629) | | - | | 5,629 | | - | | - |
+--------------------+----------+---------------+----------+-------------+----------+-----------+----------+------------+----------+--------------+----------+-------------+
| | | | | | | | | | | | | |
+--------------------+----------+---------------+----------+-------------+----------+-----------+----------+------------+----------+--------------+----------+-------------+
| At 31 December | | 3,283,507 | | 22,744,743 | | 1,078,532 | | 399,135 | | - | | 27,505,917 |
| 2009 | | | | | | | | | | | | |
+--------------------+----------+---------------+----------+-------------+----------+-----------+----------+------------+----------+--------------+----------+-------------+
| | | | | | | | | | | | | |
+--------------------+----------+---------------+----------+-------------+----------+-----------+----------+------------+----------+--------------+----------+-------------+
+--------------------+----------+------------+----------+-------------+----------+-----------+----------+---------+----------+-------------+----------+-------------+
| 2008 | | | | | | | | | | | | |
+--------------------+----------+------------+----------+-------------+----------+-----------+----------+---------+----------+-------------+----------+-------------+
| Cost | | | | | | | | | | | | |
+--------------------+----------+------------+----------+-------------+----------+-----------+----------+---------+----------+-------------+----------+-------------+
| At 1 January 2008 | | 42,797,284 | | 114,645,582 | | 1,742,546 | | 361,783 | | 6,343,841 | | 165,891,036 |
+--------------------+----------+------------+----------+-------------+----------+-----------+----------+---------+----------+-------------+----------+-------------+
| Additions | | - | | 4,642,578 | | - | | 465,239 | | 10,901,469 | | 16,009,286 |
+--------------------+----------+------------+----------+-------------+----------+-----------+----------+---------+----------+-------------+----------+-------------+
| Transfer from | | | | | | | | | | | | |
| construction in | | 2,810,711 | | 3,108,075 | | - | | - | | (5,918,786) | | - |
| progress | | | | | | | | | | | | |
+--------------------+----------+------------+----------+-------------+----------+-----------+----------+---------+----------+-------------+----------+-------------+
| | | | | | | | | | | | | |
+--------------------+----------+------------+----------+-------------+----------+-----------+----------+---------+----------+-------------+----------+-------------+
| At 31 December | | 45,607,995 | | 122,396,235 | | 1,742,546 | | 827,022 | | 11,326,524 | | 181,900,322 |
| 2008 | | | | | | | | | | | | |
+--------------------+----------+------------+----------+-------------+----------+-----------+----------+---------+----------+-------------+----------+-------------+
| | | | | | | | | | | | | |
+--------------------+----------+------------+----------+-------------+----------+-----------+----------+---------+----------+-------------+----------+-------------+
| Accumulated | | | | | | | | | | | | |
| depreciation and | | | | | | | | | | | | |
| impairment | | | | | | | | | | | | |
+--------------------+----------+------------+----------+-------------+----------+-----------+----------+---------+----------+-------------+----------+-------------+
| At 1 January 2008 | | 868,964 | | 7,069,992 | | 453,851 | | 138,676 | | - | | 8,531,483 |
+--------------------+----------+------------+----------+-------------+----------+-----------+----------+---------+----------+-------------+----------+-------------+
| Depreciation | | 1,102,514 | | 6,912,030 | | 302,376 | | 107,500 | | - | | 8,424,420 |
+--------------------+----------+------------+----------+-------------+----------+-----------+----------+---------+----------+-------------+----------+-------------+
| | | | | | | | | | | | | |
+--------------------+----------+------------+----------+-------------+----------+-----------+----------+---------+----------+-------------+----------+-------------+
| At 31 December | | 1,971,478 | | 13,982,022 | | 756,227 | | 246,176 | | - | | 16,955,903 |
| 2008 | | | | | | | | | | | | |
+--------------------+----------+------------+----------+-------------+----------+-----------+----------+---------+----------+-------------+----------+-------------+
| | | | | | | | | | | | | |
+--------------------+----------+------------+----------+-------------+----------+-----------+----------+---------+----------+-------------+----------+-------------+
+--------------------+----------+------------+----------+-------------+----------+---------+----------+---------+----------+------------+----------+-------------+
| Net book value | | | | | | | | | | | | |
+--------------------+----------+------------+----------+-------------+----------+---------+----------+---------+----------+------------+----------+-------------+
| At 31 December | | 52,724,786 | | 101,085,530 | | 929,737 | | 565,110 | | 5,584,133 | | 160,889,296 |
| 2009 | | | | | | | | | | | | |
+--------------------+----------+------------+----------+-------------+----------+---------+----------+---------+----------+------------+----------+-------------+
| | | | | | | | | | | | | |
+--------------------+----------+------------+----------+-------------+----------+---------+----------+---------+----------+------------+----------+-------------+
| At 31 December | | 43,636,517 | | 108,414,213 | | 986,319 | | 580,846 | | 11,326,524 | | 164,944,419 |
| 2008 | | | | | | | | | | | | |
+--------------------+----------+------------+----------+-------------+----------+---------+----------+---------+----------+------------+----------+-------------+
The Group has pledged leasehold land (note 13), buildings and certain machinery
having a net book value ("NBV") of RMB5,799,901, RMB11,023,285 and RMB10,183,337
(2008: RMB5,933,824, RMB18,285,118 and RMB59,815,503) respectively to secure
loans and other banking facilities granted to the Group.
Items of machinery with NBV of RMB200,955 were disposed of during the year
(2008: nil), resulting in a loss on disposal of RMB171,560 (2008: nil).
13. PAYMENTS FOR LEASEHOLD LAND HELD FOR OWN USE UNDER OPERATING LEASES
The Group's payments for leasehold land held for own use under operating leases
comprise:
+----------------------------------------+----------+-----------+-+-----------+
| | | 2009 | | 2008 |
+----------------------------------------+----------+-----------+-+-----------+
| | | RMB | | RMB |
+----------------------------------------+----------+-----------+-+-----------+
| | | | | |
+----------------------------------------+----------+-----------+-+-----------+
| Leasehold land in the PRC | | | | |
+----------------------------------------+----------+-----------+-+-----------+
| - Long lease | | 8,474,431 | | 8,743,363 |
+----------------------------------------+----------+-----------+-+-----------+
As at 31 December 2009, the Group leased the following four(2008: four) pieces
of land with total consideration of RMB9,154,024 (2008: RMB9,144,024). The
application for a certificate of land use right in respect of the third piece of
land located in Longyan with an area of 58,999 sq. m. is currently in progress.
+--------------------------+----------+----------+----------+----------+----------+----------------+
| Location | | Area | | Lease | | Lease expiry |
| | |(sq. m.) | | term | | date |
| | | | | (years) | | |
+--------------------------+----------+----------+----------+----------+----------+----------------+
| | | | | | | |
+--------------------------+----------+----------+----------+----------+----------+----------------+
| Longyan, Fujian | | 8,149 | |50 years | | 26 March 2053 |
| Province, the PRC | | | | | | |
+--------------------------+----------+----------+----------+----------+----------+----------------+
| Longyan, Fujian | | 11,000 | |50 years | | 15 November |
| Province, the PRC | | | | | | 2055 |
+--------------------------+----------+----------+----------+----------+----------+----------------+
| Xiamen, Fujian Province, | | 30,005 | |50 years | | 6 December |
| the PRC | | | | | | 2056 |
+--------------------------+----------+----------+----------+----------+----------+----------------+
| Longyan, Fujian | | 58,999 | |50 years | | 18 |
| Province, the PRC | | | | | | December 2056 |
+--------------------------+----------+----------+----------+----------+----------+----------------+
14. INVENTORIES
+----------------------------------+-----+------------+---+------------+
| | | 2009 | | 2008 |
+----------------------------------+-----+------------+---+------------+
| | | RMB | | RMB |
+----------------------------------+-----+------------+---+------------+
| | | | | |
+----------------------------------+-----+------------+---+------------+
| Raw materials and consumables | | 10,926,174 | | 6,404,014 |
+----------------------------------+-----+------------+---+------------+
| Work-in-progress | | 1,556,893 | | 2,278,504 |
+----------------------------------+-----+------------+---+------------+
| Finished goods | | 4,587,048 | | 5,875,740 |
+----------------------------------+-----+------------+---+------------+
| | | | | |
+----------------------------------+-----+------------+---+------------+
| | | 17,070,115 | | 14,558,258 |
+----------------------------------+-----+------------+---+------------+
15. TRADE AND OTHER RECEIVABLES
+----------------------------------+-----+------------+--+------------+
| | | 2009 | | 2008 |
+----------------------------------+-----+------------+--+------------+
| | | RMB | | RMB |
+----------------------------------+-----+------------+--+------------+
| | | | | |
+----------------------------------+-----+------------+--+------------+
| Trade debtors - third parties | | 1,001,381 | | 8,828,971 |
+----------------------------------+-----+------------+--+------------+
| Trade debtors - related | | - | | 872,434 |
| companies | | | | |
+----------------------------------+-----+------------+--+------------+
| | | | | |
+----------------------------------+-----+------------+--+------------+
| | | 1,001,381 | | 9,701,405 |
+----------------------------------+-----+------------+--+------------+
| | | | | |
+----------------------------------+-----+------------+--+------------+
| Notes receivable - third parties | | 5,605,620 | | 2,150,000 |
+----------------------------------+-----+------------+--+------------+
| Deposits paid | | 2,186,047 | | 477,342 |
+----------------------------------+-----+------------+--+------------+
| Prepayments | | 82,401 | | 71,810 |
+----------------------------------+-----+------------+--+------------+
| Other receivables | | 249,161 | | 945,163 |
+----------------------------------+-----+------------+--+------------+
| VAT refundable | | 9,636,344 | | 6,190,852 |
+----------------------------------+-----+------------+--+------------+
| Amount due from a shareholder | | 147,732 | | 156,229 |
+----------------------------------+-----+------------+--+------------+
| Amounts due from related | | 2,000,000 | | 3,560,000 |
| companies | | | | |
+----------------------------------+-----+------------+--+------------+
| | | | | |
+----------------------------------+-----+------------+--+------------+
| | | 20,908,686 | | 23,252,801 |
+----------------------------------+-----+------------+--+------------+
Third party trade debtors are with no specific credit terms granted.
Related companies are companies in which the director has an interest. Amounts
due from related trading companies are unsecured, interest-free and with no
specific credit terms granted. The amounts due from related non-trading
companies are unsecured, interest-free and repayable on demand.
As at 31 December 2009, all items in trade and other receivables were
denominated in RMB. The directors consider that the carrying amount of trade
and other receivables classified as loans and receivables approximates their
fair value.
The aging of trade debtors which are past due but not impaired are as follows:
+------------------------------------+------+-----------+-+-----------+
| | | 2009 | | 2008 |
+------------------------------------+------+-----------+-+-----------+
| | | RMB | | RMB |
+------------------------------------+------+-----------+-+-----------+
| | | | | |
+------------------------------------+------+-----------+-+-----------+
| Less than 1 month past due | | 1,001,381 | | 533,454 |
+------------------------------------+------+-----------+-+-----------+
| 1 to 3 months past due | | - | | 1,070,374 |
+------------------------------------+------+-----------+-+-----------+
| More than 3 months but less than | | - | | 8,097,577 |
| 12 months past due | | | | |
+------------------------------------+------+-----------+-+-----------+
| | | 1,001,381 | | 9,701,405 |
+------------------------------------+------+-----------+-+-----------+
The balances that werepast due but not impairedrelated to a wide range of
customers with no recent history of default.
The ageing of amounts due from related non-trading companies which are past due
but not impaired are as follows:
+-------------------------------------+------+-----------+-+------------+
| | | 2009 | | 2008 |
+-------------------------------------+------+-----------+-+------------+
| | | RMB | | |
| | | | | RMB |
+-------------------------------------+------+-----------+-+------------+
| | | | | |
+-------------------------------------+------+-----------+-+------------+
| Less than 1 month past due | | - | | 1,360,000 |
+-------------------------------------+------+-----------+-+------------+
| 1 to 3 months past due | | - | | 60,000 |
+-------------------------------------+------+-----------+-+------------+
| More than 3 months but less than 12 | | - | | 2,140,000 |
| months past due | | | | |
+-------------------------------------+------+-----------+-+------------+
| More than 1 year but less than 2 | | 2,000,000 | | - |
| years past due | | | | |
+-------------------------------------+------+-----------+-+------------+
| | | 2,000,000 | | 3,560,000 |
+-------------------------------------+------+-----------+-+------------+
16. TRADE AND OTHER PAYABLES
+-------------------------------------+-------+------------+-+-----------+
| | | 2009 | | 2008 |
+-------------------------------------+-------+------------+-+-----------+
| | | RMB | | RMB |
+-------------------------------------+-------+------------+-+-----------+
| | | | | |
+-------------------------------------+-------+------------+-+-----------+
| Trade creditors - third parties | | 556,059 | | 1,905,779 |
+-------------------------------------+-------+------------+-+-----------+
| Trade creditors - related parties | | 161,626 | | - |
+-------------------------------------+-------+------------+-+-----------+
| | | | | |
+-------------------------------------+-------+------------+-+-----------+
| | | 717,685 | | 1,905,779 |
+-------------------------------------+-------+------------+-+-----------+
| | | | | |
+-------------------------------------+-------+------------+-+-----------+
| Notes payable | | 500,000 | | - |
+-------------------------------------+-------+------------+-+-----------+
| Deferred income | | 450,000 | | 550,000 |
+-------------------------------------+-------+------------+-+-----------+
| Deposits received | | 1,460,561 | | 198,128 |
+-------------------------------------+-------+------------+-+-----------+
| Payroll payable | | 1,020,513 | | 580,562 |
+-------------------------------------+-------+------------+-+-----------+
| Other payables | | 2,054,135 | | 1,132,065 |
+-------------------------------------+-------+------------+-+-----------+
| Payable to contractors for | | | | |
| acquisition of property, plant and | | 1,978,828 | | 4,899,833 |
| equipment | | | | |
+-------------------------------------+-------+------------+-+-----------+
| VAT payable | | 4,457,445 | | 274,093 |
+-------------------------------------+-------+------------+-+-----------+
| Amount due to a shareholder | | 554,564 | | - |
+-------------------------------------+-------+------------+-+-----------+
| | | | | |
+-------------------------------------+-------+------------+-+-----------+
| | | 13,193,731 | | 9,540,460 |
+-------------------------------------+-------+------------+-+-----------+
Deferred income represents the unamortised revenue from the granting of
exclusive catalyst purchase rights to customers. The directors consider that the
carrying amount of trade and other payables approximates their fair value.
Notes payable represents a bank acceptance issued by XZBM to a related party who
is not a member of the Group with 20% of the face value of the issued bank
acceptance deposited to the accepting bank as collateral. The notes will be due
on 17 February 2010.
17. OTHER FINANCIAL LIABILITIES
+-------------------------------------+-------+------------+-+------------+
| | | 2009 | | 2008 |
+-------------------------------------+-------+------------+-+------------+
| | | RMB | | RMB |
+-------------------------------------+-------+------------+-+------------+
| Bank loans due within one year | | | | |
+-------------------------------------+-------+------------+-+------------+
| - Secured by the Group's machinery | | 4,850,000 | | 4,850,000 |
| (note 12) (i) | | | | |
+-------------------------------------+-------+------------+-+------------+
| - Secured by the Group's buildings | | | | |
| and leasehold land (note 12, 13) | | 13,695,221 | | 30,000,000 |
| (ii) | | | | |
+-------------------------------------+-------+------------+-+------------+
| - Guaranteed by a related company | | 3,000,000 | | 3,000,000 |
| (note 19) (ii) | | | | |
+-------------------------------------+-------+------------+-+------------+
| - Guaranteed by a fellow subsidiary | | 8,000,000 | | - |
| (i) | | | | |
+-------------------------------------+-------+------------+-+------------+
| - Unsecured with non-interest | | - | | 500,000 |
| bearing | | | | |
+-------------------------------------+-------+------------+-+------------+
| | | | | |
+-------------------------------------+-------+------------+-+------------+
| | | 29,545,221 | | 38,350,000 |
+-------------------------------------+-------+------------+-+------------+
(i) Interest is charged at fixed rates ranging from 5.841% to 8.217%
(2008: from 6.138% to 8.217%).
(ii) Interest is charged at fixed rates ranging from 2% to 5.346% (2008:
1.2 times of benchmark interest rate stipulated by the People's Bank of China).
18. OTHER FINANCIAL LIABILITIES -CARRYING AMOUNT AND FAIR VALUE
The book value and fair value of other financial liabilities are as follows:
+--------------------------+----------+------------+----------+------------+----------+------------+----------+------------+
| | | 2009 | | 2008 |
+--------------------------+----------+------------------------------------+----------+------------------------------------+
| | | Book | | Fair | | Book | | Fair |
| | | value | | value | | value | | value |
+--------------------------+----------+------------+----------+------------+----------+------------+----------+------------+
| | | RMB | | RMB | | RMB | | RMB |
+--------------------------+----------+------------+----------+------------+----------+------------+----------+------------+
| | | | | | | | | |
+--------------------------+----------+------------+----------+------------+----------+------------+----------+------------+
| Other financial | | 29,545,221 | | 29,545,221 | | 38,350,000 | | 38,350,000 |
| liabilities | | | | | | | | |
+--------------------------+----------+------------+----------+------------+----------+------------+----------+------------+
Fair value of financial liabilities has been determined by discounting cash
payments at prevailing market rates of interest having regard to the specific
risks attaching to them.
19. RELATED PARTY TRANSACTIONS
During the year ended 31 December 2009, the Group entered into the following
transactions with related parties who are not members of the Group.
+-------------------------+----------------+-+-----------+-+-----------+
| Entities | Type of | | Transaction |
| | transactions | | amounts |
+-------------------------+----------------+-+-------------------------+
| | | | 2009 | | 2008 |
+-------------------------+----------------+-+-----------+-+-----------+
| | | | RMB | | RMB |
+-------------------------+----------------+-+-----------+-+-----------+
| | | | | | |
+-------------------------+----------------+-+-----------+-+-----------+
| Companies in which | Purchase from | | | | |
| directors or their | the Group | | | | |
| close family members | | | 2,679,754 | | 4,099,483 |
| have an interest | | | | | |
+-------------------------+----------------+-+-----------+-+-----------+
| | | | | | |
+-------------------------+----------------+-+-----------+-+-----------+
| Companies in which | Sale to the | | | | |
| directors or their | Group | | | | |
| close family members | | | 297,111 | | 1,811,030 |
| have an interest | | | | | |
+-------------------------+----------------+-+-----------+-+-----------+
The Group's bank loans in the amount of RMB3,000,000 as at 31 December 2009
(2008: RMB3,000,000) were guaranteed by a related company, which is controlled
by close family members of the Company's directors.
Management considers that the directors of the Company are the "key management"
of the Group. Details of directors' emolumentshave been disclosed in note 9.
20. DIVIDENDS
At a Board of Directors' meeting held on 12 April 2010, the directors
recommended a final dividend of 10% of the net profit for 2009.
At a Board of Directors' meeting held on 9 April 2009, the directors did not
recommend any final dividend for 2008.
21. SUBSEQUENT EVENTS
A government grant of RMB4 million was received by the Group during the first
quarter of 2010.
The Company has been informed that on 11 February 2010, Mr. Huodong Ye, Chairman
of the Company, purchased 860,875 ordinary shares of 0.01 pence each at a price
of 10 pence per ordinary share, from China Strategy Investment Management Co.,
Ltd. Following this purchase, Mr. Huodong Ye has a total beneficial and
non-beneficial holding of 33,772,875 ordinary shares, representing 74.37% of the
current issued share capital of the Company.
This information is provided by RNS
The company news service from the London Stock Exchange
END
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