Final Results

 

TIDMCBI 
 
RNS Number : 7844Q 
China Biodiesel International Hold 
20 April 2009 
 

China Biodiesel International Holding Co., Ltd. 
('China Biodiesel', 'CBI' or 'the Company') 
 
 
Preliminary Results 
 
 
China Biodiesel International Holding Co., Ltd (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 2008. 
 
 
Key financials 
 
 
+----------------------------+---------------+---------------+---------------+ 
|                            |  2006 (RMB)   |  2007 (RMB)   |  2008 (RMB)   | 
+----------------------------+---------------+---------------+---------------+ 
| Revenue                    |    101.1m     |    124.6m     |    164.2m     | 
+----------------------------+---------------+---------------+---------------+ 
| Profit before tax          |    38.84m     |    16.79m     |    4.31m      | 
+----------------------------+---------------+---------------+---------------+ 
| Earning per share (basic)  |    0.910      |    0.365      |    0.091      | 
+----------------------------+---------------+---------------+---------------+ 
| Cash generated from        |    30.2m      |    33.2m      |    2.81m      | 
| operation                  |               |               |               | 
+----------------------------+---------------+---------------+---------------+ 
| Proposed final dividend    |    0.0816     |    0.0365     |      -        | 
| per share                  |               |               |               | 
+----------------------------+---------------+---------------+---------------+ 
 
 
 
 
Highlights 
 
 
  *  Turnover from biodiesel up 31.8 per cent to RMB 164.2 million (2007: RMB 
  124.6 million); 
  *  Increase in higher margin B1 and B2 biodiesel sales volume to 89.87% (2007: 
  41.36%); 
  *  Xiamen plant finished trial production in June 2008, doubling the annual 
  capacity of the Company to 100,000 tonnes; 
  *  Annual Government grants and subsidies of RMB19.66 million; 
  *  CBI's branded biodiesel of "Zhuoneng" officially named as a "Provincial Famous 
  Brand Product" 
 
 
 
Commenting on the final results, Executive Chairman Huodong Ye said: "2008 was a 
difficult year across the world. The financial crisis impacted the Chinese and 
global economy leading to increased volatility within commodity markets. Despite 
this volatility and the tough challenges experienced by the management of the 
Company during 2008, we believe that CBI is well placed to recover quickly in 
the period ahead, especially as the Chinese economy continues to develop in 
2009. 
 
 
Enquiries: 
Gloria He, CFO: [phone] 
 James Wang, Company Secretary: +86 (592) 
7191109 
Tom Price or Bobbie Hilliam 
 Evolution Securities: [phone] 
 
 
Chairman's Statement 
 
 
2008 was a difficult year for the biodiesel industry. CBI experienced a number 
of difficulties caused by the international financial crisis, turbulence in the 
oil market and continued governmental control on fossil fuel prices. Despite 
these difficulties and the associated depreciation loss incurred on inventory in 
the second half, management took a number of decisive actions to maintain a 
positive net profit (including government grants and subsidies) for the year and 
to further consolidate the Company's position in the biodiesel industry. 
 
 
The Company has continued to focus on a higher margin sales product mix during 
2008. This focus has led to higher sales volumes in B1 and B2, helping increase 
CBI's competitiveness within the biodiesel industry. Since the beginning of 
2009, management has been undertaking a new project in CBI's Xiamen plant to 
produce a kind of surfactant, which is a by-product of B1 and commonly used in 
detergent products. This will allow the Company to exploit a new sales 
opportunity and achieve a higher overall sales margin in the future. 
 
 
Strict inventory risk control has been a key focus for CBI in 2008. The prices 
of raw materials used by the Company have continued to be closely correlated to 
the price of fossil fuels. These fossil fuel prices have proved to be extremely 
volatile in 2008. Management continued to analyse the market in order to keep 
inventory volumes at a rational level. This approach led the management to cut 
down the procurement of inventory quickly in the summer of 2008 as the market 
began to deteriorate so as to match inventory to sales. This action meant that 
in the second half of 2008 the level of inventory and final product were 
strictly controlled so as to reduce the potential loss. 
 
 
Management has worked hard to raise the operational efficiency of the Company 
and to maintain stability. In 2008, the Company hired more loyal and skilled 
persons and management now believes CBI is well positioned to operate the Xiamen 
plant at a high capacity. 
 
 
In December 2008, regulations released by the Chinese government announced that 
biodiesel companies which utilise waste animal and vegetable oils as feedstock 
can apply for refund of value-added tax for selling biodiesel. As announced in 
our trading statement in February 2009, both CBI's Longyan and Xiamen 
subsidiaries have qualified for this refund and therefore the Company expects to 
realise a lower tax rate going forward. 
 
 
The global financial crisis has impacted the economy greatly. For the period 
ahead, with the experience of the past year behind us, we believe that CBI is 
well placed to make a profitable recovery, especially as the Chinese economy 
continues to develop in 2009. 
 
 
Operational Review 
 
 
In 2008, CBI has been able to strengthen its position for growth. 
 
 
During the year, the Company focused on the preparation of the Xiamen plant for 
production, with an annual capacity of 50,000 tonnes, and on growing the 
procurement and sales networks. With the successful trial production of  Xiamen 
plant in June, the Company's annual capacity has now doubled to 100,000 tonnes. 
To secure more supply of raw materials following the completion of Xiamen, CBI 
has also built relationships with a number of new suppliers both domestically 
and internationally. CBI has done trade with companies in South Korea, the 
Philippines, Malaysia,  Indonesia, Chile, Thailand, and Norway. 
 
 
The international fossil fuel price touched $147 per barrel in July, followed by 
a collapse in its price to around $40 per barrel over the following 4 months. 
This sharp drop accompanied the global financial crisis. The prices of CBI's 
feedstock and products followed this volatility, making the demand on biodiesel 
reduced sharply in the second half of the year. Management was able to partially 
foresee this decline and took appropriate action to cut down the procurement 
volume of feedstock and successfully kept the trade receivables at a low level, 
so as to avoid increased inventory write downs. 
 
 
With the selling price peaking in the summer, sales volume increased in the 
first half but dropped sharply in the second half of the year. Nevertheless, the 
product mix became more efficient. The sales volume of the higher value B1 and 
B2 biodiesels achieved a higher percentage of sales with 89.87% from 41.36% in 
2007. B1 and B2 are used as substitutes for petrochemical products in the 
manufacturing industries, and are free of the pricing cap imposed by government 
controls on diesel. 
 
 
As announced in the last trading statement, falling selling prices impacted the 
cost of raw materials in the second half of 2008, leading the Company to incur 
an inventory loss of around RMB7 million. We expect the global financial crisis 
to continue to affect economies in the future and therefore raw material prices 
to stay at a relatively low level. At this price we would hope to see an 
improvement in gross margins during 2009. 
 
 
The advanced technology and well-positioned strategy of CBI has helped the 
Company receive increased governmental support and strengthen its status in 
leading the industry in China. The financial grants and subsidies received by 
the Company during 2008 amounted to RMB19.66 million, an increase of 129.1% from 
RMB8.58 million in 2007. According to the latest law, government subsidy is 
expected to continue and also, another grant of RMB8.44 million has been 
received during the first quarter of 2009. In December 2008, CBI's branded 
biodiesel of "Zhuoneng" was officially named by the government as a "Provincial 
Famous Brand Product", with the reputation strengthened again, following a name 
of "Provincial Famous Trademark" won in November 2007. 
 
 
CBI has maintained its competitive advantage with its proprietary technology, 
which enables it to utilise lower-grade waste animal or vegetable oils as 
feedstock. Also for this reason, CBI's two subsidiaries have started to enjoy 
the preferential policy of getting refunds of value-added tax. With the recovery 
of market demand, we are as confident as before that the Company will achieve 
financial and operational growth in the period ahead. 
 
 
Financial Review 
 
 
Revenues 
 
 
Company revenues increased by 31.8 per cent to RMB 164.2 million (2007: RMB 
124.6 million). Due to a weak market in the fourth quarter of the year, the 
total sales volume came in at 25,273 tons, a decline of 3.2 percent (2007: 
26,095 tons). The sharp fall in selling price in the fourth quarter helped 
counter the effect of high prices in the first three quarters of the year and 
resulted in an average selling price of RMB 6,497 per ton (2007: RMB 4,774 per 
ton). However the new technology employed by the Company helped increase the 
output of B1 and B2 products, with higher value and non-capped price, which now 
account for 89.87 per cent of the total sales. This improved sales mix meant 
gross margins were prevented from falling sharper and allow management to 
believe margins will rebound in 2009 if the cost of raw materials remains low. 
 
 
Costs and expenses 
 
 
The cost of raw materials had been running at high levels for the first three 
quarters of the year. As a result production cost increased by 47.9 per cent to 
RMB 6,283 per ton (2007: RMB 4,248 per ton). 
 
 
Distribution cost was 0.7 per cent of revenue (2007: 0.82 per cent). As the 
Xiamen plant was put into use in August 2008, while had to suspend for three 
months, administrative expenses increased by 79 per cent to RMB 14.48 million 
(2007: RMB 8.09 million). Meanwhile, with market price of inventory falling 
dramatically in the fourth quarter, the Company made an impairment provision of 
RMB 7.04 million for the inventory on hand at the end of the year. 
 
 
Results for the year 
 
 
As a result of global economic downturn and sharp fall in oil related 
commodities, profit before tax fell 74.33 per cent to RMB 4.31 million (2007: 
RMB 16.79 million). 
 
 
Income from sales of package barrels, which comprised part of other income, 
contributed RMB 3.73 million (2007: RMB 3.95 million). 
 
 
The Company received RMB 15.35 million (2007: RMB 8.58 million) in government 
grants relating to China Biodiesel's achievements in development of renewable 
energy and energy saving. Also, the Company recognised  RMB 4.31 million 
government subsidies in the form of value added tax rebate, based on the latest 
tax regulation. 
 
 
Finance expenses of RMB 1.73 million in 2008 (2007: RMB 0.52 million) were 
related to bank debts. 
 
 
Taxation 
 
 
According to latest income tax law, the two producing units of the company in 
PRC are entitled to enjoy a preferential policy of deducting 10% of biodiesel 
sales income from 2008 taxable profit. This reduction means the Company is 
expected to incur a reduced practical tax rate in the future. 
 
 
Meanwhile, a deferred tax asset of RMB 0.26 million, out of total deferred tax 
assets of RMB0.7 million, was recognized in 2008 mainly arising from deductible 
temporary differences of inventory impairment provisions made by LZNE. 
 
 
Cash flow 
 
 
During the year, the Company successfully established good relationship with a 
local bank and acquired a bank loan of RMB 30 million which increased the 
resource available to the Company. This greater cash position has been used to 
help manage inventory. 
 
 
Capital expenditure 
 
 
With the completion of construction of Xiamen plant in the first half year of 
2008, capital expenditure fell to RMB 18.52 million (2007: RMB 90.71 million). 
 
 
Balance sheet 
 
 
With the XM plant being put into use in August 2008, the Company's 
value-generating property, plant and equipment increased to RMB 164.94 million 
at the end of 2008 (2007: RMB 157.36 million). 
 
 
Meanwhile, the inventory increased by 72.5% to RMB 14.56 million (2007: RMB 8.44 
million), to meet the needs of two plants instead of one plant in 2007. 
 
 
As a result of strict controls over credit to clients, the outstanding balance 
of third-party trading accounts receivable reduced to RMB 8.83 million (2007: 
RMB 12.03 million). 
 
 
Bank loans increased by RMB 29.80 million to RMB 38.35 million (2007: RMB 8.55 
million). Other liabilities decreased by RMB 9.09 million, as a result of the 
clearance of liabilities to the contractors for construction and acquisition of 
property, plant and equipment. 
 
 
Dividend 
The directors propose no dividend for 2008. 
 
 CONSOLIDATED INCOME STATEMENT 
FOR THE YEAR ENDED 31 DECEMBER 2008 
 
+----------------------------------------------------+--------+----+---------------+-----+---------------+ 
|                                                    | Notes  |    | 2008          |     | 2007          | 
+----------------------------------------------------+--------+----+---------------+-----+---------------+ 
|                                                    |        |    | RMB           |     | RMB           | 
+----------------------------------------------------+--------+----+---------------+-----+---------------+ 
|                                                    |        |    |               |     |               | 
+----------------------------------------------------+--------+----+---------------+-----+---------------+ 
| Revenue                                            | 1      |    |   164,199,041 |     |   124,590,090 | 
+----------------------------------------------------+--------+----+---------------+-----+---------------+ 
| Cost of sales                                      |        |    | (158,782,804) |     | (110,841,077) | 
+----------------------------------------------------+--------+----+---------------+-----+---------------+ 
|                                                    |        |    |               |     |               | 
+----------------------------------------------------+--------+----+---------------+-----+---------------+ 
| Gross profit                                       |        |    |     5,416,237 |     |    13,749,013 | 
+----------------------------------------------------+--------+----+---------------+-----+---------------+ 
| Other income                                       | 2      |    |    23,387,735 |     |    12,529,106 | 
+----------------------------------------------------+--------+----+---------------+-----+---------------+ 
| Distribution costs                                 |        |    |   (1,145,390) |     |   (1,015,597) | 
+----------------------------------------------------+--------+----+---------------+-----+---------------+ 
| Write-down of inventories                          |        |    |   (7,036,340) |     | -             | 
+----------------------------------------------------+--------+----+---------------+-----+---------------+ 
| Administrative expenses                            |        |    |  (14,486,471) |     |   (8,087,065) | 
+----------------------------------------------------+--------+----+---------------+-----+---------------+ 
| Other operating expenses                           |        |    |     (244,917) |     |     (144,882) | 
+----------------------------------------------------+--------+----+---------------+-----+---------------+ 
|                                                    |        |    |               |     |               | 
+----------------------------------------------------+--------+----+---------------+-----+---------------+ 
| Profit from operations                             |        |    |     5,890,854 |     |    17,030,575 | 
+----------------------------------------------------+--------+----+---------------+-----+---------------+ 
| Finance income                                     |        |    |       140,156 |     |       282,217 | 
+----------------------------------------------------+--------+----+---------------+-----+---------------+ 
| Finance costs                                      |        |    |   (1,725,228) |     |     (520,705) | 
+----------------------------------------------------+--------+----+---------------+-----+---------------+ 
|                                                    |        |    |               |     |               | 
+----------------------------------------------------+--------+----+---------------+-----+---------------+ 
| Profit before income tax expense                   |        |    |     4,305,782 |     |    16,792,087 | 
+----------------------------------------------------+--------+----+---------------+-----+---------------+ 
| Income tax expense                                 |        |    |     (202,076) |     |     (237,825) | 
+----------------------------------------------------+--------+----+---------------+-----+---------------+ 
|                                                    |        |    |               |     |               | 
+----------------------------------------------------+--------+----+---------------+-----+---------------+ 
| Profit for the year                                |        |    |     4,103,706 |     |    16,554,262 | 
+----------------------------------------------------+--------+----+---------------+-----+---------------+ 
|                                                    |        |    |               |     |               | 
+----------------------------------------------------+--------+----+---------------+-----+---------------+ 
| Attributable to:                                   |        |    |               |     |               | 
+----------------------------------------------------+--------+----+---------------+-----+---------------+ 
| - Equity holders of the Company                    |        |    |     4,127,722 |     |    16,569,774 | 
+----------------------------------------------------+--------+----+---------------+-----+---------------+ 
| - Minority interests                               |        |    |      (24,016) |     |      (15,512) | 
+----------------------------------------------------+--------+----+---------------+-----+---------------+ 
|                                                    |        |    |               |     |               | 
+----------------------------------------------------+--------+----+---------------+-----+---------------+ 
|                                                    |        |    |     4,103,706 |     |    16,554,262 | 
+----------------------------------------------------+--------+----+---------------+-----+---------------+ 
|                                                    |        |    |               |     |               | 
+----------------------------------------------------+--------+----+---------------+-----+---------------+ 
| Dividends                                          | 4      |    | -             |     |       456,089 | 
+----------------------------------------------------+--------+----+---------------+-----+---------------+ 
|                                                    |        |    |               |     |               | 
+----------------------------------------------------+--------+----+---------------+-----+---------------+ 
| Earnings per share                                 | 3      |    |               |     |               | 
+----------------------------------------------------+--------+----+---------------+-----+---------------+ 
|    Basic                                           |        |    |         0.091 |     |         0.365 | 
+----------------------------------------------------+--------+----+---------------+-----+---------------+ 
|                                                    |        |    |               |     |               | 
+----------------------------------------------------+--------+----+---------------+-----+---------------+ 
|    Diluted                                         |        |    |         0.091 |     |         0.365 | 
+----------------------------------------------------+--------+----+---------------+-----+---------------+ 
|                                                    |        |    |               |     |               | 
+----------------------------------------------------+--------+----+---------------+-----+---------------+ 
 
 
 
 
  CONSOLIDATED BALANCE SHEET 
AT 31 DECEMBER 2008 
 
+--------------------------------------------------------+-------+--+---------------+--+----------------+ 
|                                                        |       |  | 2008          |  | 2007           | 
+--------------------------------------------------------+-------+--+---------------+--+----------------+ 
|                                                        |       |  | RMB           |  | RMB            | 
+--------------------------------------------------------+-------+--+---------------+--+----------------+ 
|                                                        |       |  |               |  |                | 
+--------------------------------------------------------+-------+--+---------------+--+----------------+ 
| Assets                                                 |       |  |               |  |                | 
+--------------------------------------------------------+-------+--+---------------+--+----------------+ 
|                                                        |       |  |               |  |                | 
+--------------------------------------------------------+-------+--+---------------+--+----------------+ 
| Non-current assets                                     |       |  |               |  |                | 
+--------------------------------------------------------+-------+--+---------------+--+----------------+ 
|  Property, plant and equipment                         |       |  |   164,944,419 |  |    157,359,553 | 
+--------------------------------------------------------+-------+--+---------------+--+----------------+ 
| Deposits for acquisition of property, plant and        |       |  |  -            |  |      4,649,915 | 
| equipment                                              |       |  |               |  |                | 
+--------------------------------------------------------+-------+--+---------------+--+----------------+ 
|  Payments for leasehold land held for own use under    |       |  |               |  |                | 
|  operating leases                                      |       |  |     8,743,363 |  |      8,853,858 | 
+--------------------------------------------------------+-------+--+---------------+--+----------------+ 
|  Other intangible assets                               |       |  |         2,341 |  |          2,787 | 
+--------------------------------------------------------+-------+--+---------------+--+----------------+ 
|  Deferred tax assets                                   |       |  |       711,518 |  |        162,500 | 
+--------------------------------------------------------+-------+--+---------------+--+----------------+ 
|                                                        |       |  |               |  |                | 
+--------------------------------------------------------+-------+--+---------------+--+----------------+ 
| Total non-current assets                               |       |  |   174,401,641 |  |    171,028,613 | 
+--------------------------------------------------------+-------+--+---------------+--+----------------+ 
|                                                        |       |  |               |  |                | 
+--------------------------------------------------------+-------+--+---------------+--+----------------+ 
|                                                        |       |  |               |  |                | 
+--------------------------------------------------------+-------+--+---------------+--+----------------+ 
| Current assets                                         |       |  |               |  |                | 
+--------------------------------------------------------+-------+--+---------------+--+----------------+ 
|  Inventories                                           |       |  |    14,558,258 |  |      8,443,232 | 
+--------------------------------------------------------+-------+--+---------------+--+----------------+ 
|  Trade and other receivables                           |       |  |    23,252,801 |  |     14,469,918 | 
+--------------------------------------------------------+-------+--+---------------+--+----------------+ 
|  Income tax recoverable                                |       |  |       940,405 |  | -              | 
+--------------------------------------------------------+-------+--+---------------+--+----------------+ 
|  Cash and cash equivalents                             |       |  |    17,492,467 |  |     12,462,094 | 
+--------------------------------------------------------+-------+--+---------------+--+----------------+ 
|                                                        |       |  |               |  |                | 
+--------------------------------------------------------+-------+--+---------------+--+----------------+ 
| Total current assets                                   |       |  |    56,243,931 |  |     35,375,244 | 
+--------------------------------------------------------+-------+--+---------------+--+----------------+ 
|                                                        |       |  |               |  |                | 
+--------------------------------------------------------+-------+--+---------------+--+----------------+ 
|                                                        |       |  |               |  |                | 
+--------------------------------------------------------+-------+--+---------------+--+----------------+ 
| Total assets                                           |       |  |   230,645,572 |  |    206,403,857 | 
+--------------------------------------------------------+-------+--+---------------+--+----------------+ 
|                                                        |       |  |               |  |                | 
+--------------------------------------------------------+-------+--+---------------+--+----------------+ 
|                                                        |       |  |               |  |                | 
+--------------------------------------------------------+-------+--+---------------+--+----------------+ 
| Liabilities                                            |       |  |               |  |                | 
+--------------------------------------------------------+-------+--+---------------+--+----------------+ 
|                                                        |       |  |               |  |                | 
+--------------------------------------------------------+-------+--+---------------+--+----------------+ 
| Current liabilities                                    |       |  |               |  |                | 
+--------------------------------------------------------+-------+--+---------------+--+----------------+ 
|  Trade and other payables                              |       |  |     9,540,460 |  |     17,067,159 | 
+--------------------------------------------------------+-------+--+---------------+--+----------------+ 
|  Current tax liabilities                               |       |  | -             |  |      1,567,078 | 
+--------------------------------------------------------+-------+--+---------------+--+----------------+ 
|  Other financial liabilities                           |       |  |    38,350,000 |  |      8,115,859 | 
+--------------------------------------------------------+-------+--+---------------+--+----------------+ 
|                                                        |       |  |               |  |                | 
+--------------------------------------------------------+-------+--+---------------+--+----------------+ 
| Total current liabilities                              |       |  |    47,890,460 |  |     26,750,096 | 
+--------------------------------------------------------+-------+--+---------------+--+----------------+ 
|                                                        |       |  |               |  |                | 
+--------------------------------------------------------+-------+--+---------------+--+----------------+ 
| Non-current liabilities                                |       |  |               |  |                | 
+--------------------------------------------------------+-------+--+---------------+--+----------------+ 
|  Other financial liabilities                           |       |  | -             |  |        500,000 | 
+--------------------------------------------------------+-------+--+---------------+--+----------------+ 
|                                                        |       |  |               |  |                | 
+--------------------------------------------------------+-------+--+---------------+--+----------------+ 
|                                                        |       |  |               |  |                | 
+--------------------------------------------------------+-------+--+---------------+--+----------------+ 
| Total liabilities                                      |       |  |    47,890,460 |  |     27,250,096 | 
+--------------------------------------------------------+-------+--+---------------+--+----------------+ 
|                                                        |       |  |               |  |                | 
+--------------------------------------------------------+-------+--+---------------+--+----------------+ 
|                                                        |       |  |               |  |                | 
+--------------------------------------------------------+-------+--+---------------+--+----------------+ 
| NET ASSETS                                             |       |  |   182,755,112 |  |    179,153,761 | 
+--------------------------------------------------------+-------+--+---------------+--+----------------+ 
|                                                        |       |  |               |  |                | 
+--------------------------------------------------------+-------+--+---------------+--+----------------+ 
| Capital and reserves attributable to                   |       |  |               |  |                | 
| equity holders of the Company                          |       |  |               |  |                | 
+--------------------------------------------------------+-------+--+---------------+--+----------------+ 
|  Share capital                                         |       |  |     3,632,941 |  |      3,632,941 | 
+--------------------------------------------------------+-------+--+---------------+--+----------------+ 
|  Reserves                                              |       |  |   178,841,667 |  |    175,216,300 | 
+--------------------------------------------------------+-------+--+---------------+--+----------------+ 
|                                                        |       |  |               |  |                | 
+--------------------------------------------------------+-------+--+---------------+--+----------------+ 
|  Equity attributable to equity holders of the Company  |       |  |   182,474,608 |  |    178,849,241 | 
+--------------------------------------------------------+-------+--+---------------+--+----------------+ 
|                                                        |       |  |               |  |                | 
+--------------------------------------------------------+-------+--+---------------+--+----------------+ 
| Minority interests                                     |       |  |       280,504 |  |        304,520 | 
+--------------------------------------------------------+-------+--+---------------+--+----------------+ 
|                                                        |       |  |               |  |                | 
+--------------------------------------------------------+-------+--+---------------+--+----------------+ 
| TOTAL EQUITY                                           |       |  |   182,755,112 |  |    179,153,761 | 
+--------------------------------------------------------+-------+--+---------------+--+----------------+ 
 
 
 
 
 
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY 
FOR THE YEAR ENDED 31 DECEMBER 2008 
 
 
+---------------------------------+--+-----------+-+------------+-+-------------+-+-------------+-+-----------+-+-----------+-+------------+-+-------------+-+--------------+-+-------------+-+------------+-+-------------+ 
|                                 |  | Equity attributable to equity holders of the Company                                                                                                 |  |            |  |             | 
+---------------------------------+--+------------------------------------------------------------------------------------------------------------------------------------------------------+-+------------+-+-------------+ 
|                                 |  | Share     |  | Share      |  | Contributed |  | Foreign     |  | Share     |  |           |  |            |  |             |  |              |  |             |  |            |  | Total       | 
|                                 |  | capital   | | Premium    | | surplus     | | exchange    | | option    | | Merger    | | General    | | Proposed    | | Retained     | | Sub-total   | | Minority   | |             | 
|                                 |  |           | |            | |             | | reserve     | | reserve   | | reserve   | | reserve    | | dividend    | | earnings     | |             | | interests  | |             | 
+---------------------------------+--+-----------+-+------------+-+-------------+-+-------------+-+-----------+-+-----------+-+------------+-+-------------+-+--------------+-+-------------+-+------------+-+-------------+ 
|                                 |  | RMB       |  | RMB        |  | RMB         |  | RMB         |  | RMB       |  | RMB       |  | RMB        |  | RMB         |  | RMB          |  | RMB         |  | RMB        |  | RMB         | 
+---------------------------------+--+-----------+-+------------+-+-------------+-+-------------+-+-----------+-+-----------+-+------------+-+-------------+-+--------------+-+-------------+-+------------+-+-------------+ 
|                                 |  |           |  |            |  |             |  |             |  |           |  |           |  |            |  |             |  |              |  |             |  |            |  |             | 
+---------------------------------+--+-----------+-+------------+-+-------------+-+-------------+-+-----------+-+-----------+-+------------+-+-------------+-+--------------+-+-------------+-+------------+-+-------------+ 
|                                 |  |           |  |            |  |             |  |             |  |           |  |           |  |            |  |             |  |              |  |             |  |            |  |             | 
+---------------------------------+--+-----------+-+------------+-+-------------+-+-------------+-+-----------+-+-----------+-+------------+-+-------------+-+--------------+-+-------------+-+------------+-+-------------+ 
| At 1 January 2007               |  | 3,632,941 |  | 90,572,623 |  |   5,047,816 |  | (1,307,048) |  | 2,229,427 |  | (121,330) |  |  6,273,540 |  |             |  |   56,462,536 |  | 163,810,524 |  |    320,032 |  | 164,130,556 | 
|                                 |  |           | |            | |             | |             | |           | |           | |            | |   1,020,019 | |              | |             | |            | |             | 
+---------------------------------+--+-----------+-+------------+-+-------------+-+-------------+-+-----------+-+-----------+-+------------+-+-------------+-+--------------+-+-------------+-+------------+-+-------------+ 
|                                 |  |           |  |            |  |             |  |             |  |           |  |           |  |            |  |             |  |              |  |             |  |            |  |             | 
+---------------------------------+--+-----------+-+------------+-+-------------+-+-------------+-+-----------+-+-----------+-+------------+-+-------------+-+--------------+-+-------------+-+------------+-+-------------+ 
| Effect from translation of      |  | -         |  | -          |  | -           |  |   (511,038) |  | -         |  | -         |  | -          |  |             |  | -            |  |   (511,038) |  | -          |  |   (511,038) | 
| functional currency to          |  |           | |            | |             | |             | |           | |           | |            | | -           | |              | |             | |            | |             | 
| presentation currency           |  |           | |            | |             | |             | |           | |           | |            | |             | |              | |             | |            | |             | 
+---------------------------------+--+-----------+-+------------+-+-------------+-+-------------+-+-----------+-+-----------+-+------------+-+-------------+-+--------------+-+-------------+-+------------+-+-------------+ 
|                                 |  |           |  |            |  |             |  |             |  |           |  |           |  |            |  |             |  |              |  |             |  |            |  |             | 
+---------------------------------+--+-----------+-+------------+-+-------------+-+-------------+-+-----------+-+-----------+-+------------+-+-------------+-+--------------+-+-------------+-+------------+-+-------------+ 
| Net loss recognised directly in |  | -         |  | -          |  | -           |  |   (511,038) |  | -         |  | -         |  | -          |  | -           |  | -            |  |   (511,038) |  | -          |  |   (511,038) | 
| equity                          |  |           | |            | |             | |             | |           | |           | |            | |             | |              | |             | |            | |             | 
+---------------------------------+--+-----------+-+------------+-+-------------+-+-------------+-+-----------+-+-----------+-+------------+-+-------------+-+--------------+-+-------------+-+------------+-+-------------+ 
| Profit/(loss) for the year      |  | -         |  | -          |  | -           |  | -           |  | -         |  | -         |  | -          |  | -           |  |   16,569,774 |  |  16,569,774 |  |   (15,512) |  |  16,554,262 | 
+---------------------------------+--+-----------+-+------------+-+-------------+-+-------------+-+-----------+-+-----------+-+------------+-+-------------+-+--------------+-+-------------+-+------------+-+-------------+ 
|                                 |  |           |  |            |  |             |  |             |  |           |  |           |  |            |  |             |  |              |  |             |  |            |  |             | 
+---------------------------------+--+-----------+-+------------+-+-------------+-+-------------+-+-----------+-+-----------+-+------------+-+-------------+-+--------------+-+-------------+-+------------+-+-------------+ 
| Total recognised income and     |  | -         |  | -          |  | -           |  |   (511,038) |  | -         |  | -         |  | -          |  | -           |  |   16,569,774 |  |  16,058,736 |  |   (15,512) |  |  16,043,224 | 
| expense                         |  |           | |            | |             | |             | |           | |           | |            | |             | |              | |             | |            | |             | 
+---------------------------------+--+-----------+-+------------+-+-------------+-+-------------+-+-----------+-+-----------+-+------------+-+-------------+-+--------------+-+-------------+-+------------+-+-------------+ 
|                                 |  |           |  |            |  |             |  |             |  |           |  |           |  |            |  |             |  |              |  |             |  |            |  |             | 
+---------------------------------+--+-----------+-+------------+-+-------------+-+-------------+-+-----------+-+-----------+-+------------+-+-------------+-+--------------+-+-------------+-+------------+-+-------------+ 
| Dividends paid                  |  |           |  |            |  |             |  |             |  |           |  |           |  |            |  | (1,020,019) |  | -            |  | (1,020,019) |  | -          |  | (1,020,019) | 
+---------------------------------+--+-----------+-+------------+-+-------------+-+-------------+-+-----------+-+-----------+-+------------+-+-------------+-+--------------+-+-------------+-+------------+-+-------------+ 
| Provision for general reserve   |  | -         |  | -          |  | -           |  | -           |  | -         |  | -         |  |  2,245,169 |  | -           |  |  (2,245,169) |  | -           |  | -          |  | -           | 
+---------------------------------+--+-----------+-+------------+-+-------------+-+-------------+-+-----------+-+-----------+-+------------+-+-------------+-+--------------+-+-------------+-+------------+-+-------------+ 
| 2007 proposed dividends         |  | -         |  | -          |  | -           |  | -           |  | -         |  | -         |  | -          |  |     456,089 |  |    (456,089) |  | -           |  | -          |  | -           | 
+---------------------------------+--+-----------+-+------------+-+-------------+-+-------------+-+-----------+-+-----------+-+------------+-+-------------+-+--------------+-+-------------+-+------------+-+-------------+ 
|                                 |  |           |  |            |  |             |  |             |  |           |  |           |  |            |  |             |  |              |  |             |  |            |  |             | 
+---------------------------------+--+-----------+-+------------+-+-------------+-+-------------+-+-----------+-+-----------+-+------------+-+-------------+-+--------------+-+-------------+-+------------+-+-------------+ 
| At 31 December 2007 and         |  | 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 | 
| 1 January 2008                  |  |           | |            | |             | |             | |           | |           | |            | |     456,089 | |              | |             | |            | |             | 
+---------------------------------+--+-----------+-+------------+-+-------------+-+-------------+-+-----------+-+-----------+-+------------+-+-------------+-+--------------+-+-------------+-+------------+-+-------------+ 
|                                 |  |           |  |            |  |             |  |             |  |           |  |           |  |            |  |             |  |              |  |             |  |            |  |             | 
+---------------------------------+--+-----------+-+------------+-+-------------+-+-------------+-+-----------+-+-----------+-+------------+-+-------------+-+--------------+-+-------------+-+------------+-+-------------+ 
| Effect from translation of      |  | -         |  | -          |  | -           |  |    (46,266) |  | -         |  | -         |  | -          |  |             |  | -            |  |    (46,266) |  | -          |  |    (46,266) | 
| functional currency to          |  |           | |            | |             | |             | |           | |           | |            | | -           | |              | |             | |            | |             | 
| presentation currency           |  |           | |            | |             | |             | |           | |           | |            | |             | |              | |             | |            | |             | 
+---------------------------------+--+-----------+-+------------+-+-------------+-+-------------+-+-----------+-+-----------+-+------------+-+-------------+-+--------------+-+-------------+-+------------+-+-------------+ 
|                                 |  |           |  |            |  |             |  |             |  |           |  |           |  |            |  |             |  |              |  |             |  |            |  |             | 
+---------------------------------+--+-----------+-+------------+-+-------------+-+-------------+-+-----------+-+-----------+-+------------+-+-------------+-+--------------+-+-------------+-+------------+-+-------------+ 
| Net loss recognised directly in |  | -         |  | -          |  | -           |  |    (46,266) |  | -         |  | -         |  | -          |  | -           |  | -            |  |    (46,266) |  | -          |  |    (46,266) | 
| equity                          |  |           | |            | |             | |             | |           | |           | |            | |             | |              | |             | |            | |             | 
+---------------------------------+--+-----------+-+------------+-+-------------+-+-------------+-+-----------+-+-----------+-+------------+-+-------------+-+--------------+-+-------------+-+------------+-+-------------+ 
| Profit/(loss) for the year      |  | -         |  | -          |  | -           |  |           - |  | -         |  | -         |  | -          |  | -           |  |    4,127,722 |  |   4,127,722 |  |   (24,016) |  |   4,103,706 | 
+---------------------------------+--+-----------+-+------------+-+-------------+-+-------------+-+-----------+-+-----------+-+------------+-+-------------+-+--------------+-+-------------+-+------------+-+-------------+ 
|                                 |  |           |  |            |  |             |  |             |  |           |  |           |  |            |  |             |  |              |  |             |  |            |  |             | 
+---------------------------------+--+-----------+-+------------+-+-------------+-+-------------+-+-----------+-+-----------+-+------------+-+-------------+-+--------------+-+-------------+-+------------+-+-------------+ 
| Total recognised income and     |  | -         |  | -          |  | -           |  |    (46,266) |  | -         |  | -         |  | -          |  | -           |  |    4,127,722 |  |   4,081,456 |  |   (24,016) |  |   4,057,440 | 
| expense                         |  |           | |            | |             | |             | |           | |           | |            | |             | |              | |             | |            | |             | 
+---------------------------------+--+-----------+-+------------+-+-------------+-+-------------+-+-----------+-+-----------+-+------------+-+-------------+-+--------------+-+-------------+-+------------+-+-------------+ 
|                                 |  |           |  |            |  |             |  |             |  |           |  |           |  |            |  |             |  |              |  |             |  |            |  |             | 
+---------------------------------+--+-----------+-+------------+-+-------------+-+-------------+-+-----------+-+-----------+-+------------+-+-------------+-+--------------+-+-------------+-+------------+-+-------------+ 
| Dividends paid                  |  | -         |  | -          |  | -           |  | -           |  | -         |  | -         |  | -          |  |   (456,089) |  | -            |  |   (456,089) |  | -          |  |   (456,089) | 
+---------------------------------+--+-----------+-+------------+-+-------------+-+-------------+-+-----------+-+-----------+-+------------+-+-------------+-+--------------+-+-------------+-+------------+-+-------------+ 
| Provision for general reserve   |  | -         |  | -          |  | -           |  | -           |  | -         |  | -         |  |  1,634,568 |  | -           |  |  (1,634,568) |  | -           |  | -          |  | -           | 
+---------------------------------+--+-----------+-+------------+-+-------------+-+-------------+-+-----------+-+-----------+-+------------+-+-------------+-+--------------+-+-------------+-+------------+-+-------------+ 
|                                 |  |           |  |            |  |             |  |             |  |           |  |           |  |            |  |             |  |              |  |             |  |            |  |             | 
+---------------------------------+--+-----------+-+------------+-+-------------+-+-------------+-+-----------+-+-----------+-+------------+-+-------------+-+--------------+-+-------------+-+------------+-+-------------+ 
| At 31 December 2008             |  | 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 | 
+---------------------------------+--+-----------+-+------------+-+-------------+-+-------------+-+-----------+-+-----------+-+------------+-+-------------+-+--------------+-+-------------+-+------------+-+-------------+ 
 
 
 
 
CONSOLIDATED CASH FLOW STATEMENT 
FOR THE YEAR ENDED 31 DECEMBER 2008 
 
 
+--------------------------------------------------------+-+---------+-+--------------+-+---------------+ 
|                                                        |  |         |  | 2008         |  | 2007          | 
+--------------------------------------------------------+-+---------+-+--------------+-+---------------+ 
|                                                        |  |         |  | RMB          |  | RMB           | 
+--------------------------------------------------------+-+---------+-+--------------+-+---------------+ 
|                                                        |  |         |  |              |  |               | 
+--------------------------------------------------------+-+---------+-+--------------+-+---------------+ 
| Cash flows from operating activities                   |  |         |  |              |  |               | 
+--------------------------------------------------------+-+---------+-+--------------+-+---------------+ 
| Profit before income tax expense                       |  |         |  |    4,305,782 |  |    16,792,087 | 
+--------------------------------------------------------+-+---------+-+--------------+-+---------------+ 
| Adjustments for:                                       |  |         |  |              |  |               | 
+--------------------------------------------------------+-+---------+-+--------------+-+---------------+ 
| Interest income                                        |  |         |  |    (140,156) |  |     (282,217) | 
+--------------------------------------------------------+-+---------+-+--------------+-+---------------+ 
| Depreciation of property, plant and equipment          |  |         |  |    8,424,420 |  |     4,230,968 | 
+--------------------------------------------------------+-+---------+-+--------------+-+---------------+ 
| Amortisation of land lease payments                    |  |         |  |      198,046 |  |       167,717 | 
+--------------------------------------------------------+-+---------+-+--------------+-+---------------+ 
| Amortisation of other intangible assets                |  |         |  |          446 |  |           446 | 
+--------------------------------------------------------+-+---------+-+--------------+-+---------------+ 
| Write-down of inventories                              |  |         |  |    7,036,340 |  | -             | 
+--------------------------------------------------------+-+---------+-+--------------+-+---------------+ 
| Interest expense                                       |  |         |  |    1,725,228 |  |       520,705 | 
+--------------------------------------------------------+-+---------+-+--------------+-+---------------+ 
|                                                        |  |         |  |              |  |               | 
+--------------------------------------------------------+-+---------+-+--------------+-+---------------+ 
| Operating profit before working capital changes        |  |         |  |   21,550,106 |  |    21,429,706 | 
+--------------------------------------------------------+-+---------+-+--------------+-+---------------+ 
| Increase in inventories                                |  |         |  | (13,151,366) |  |   (2,272,665) | 
+--------------------------------------------------------+-+---------+-+--------------+-+---------------+ 
| (Increase)/decrease in trade and other receivables     |  |         |  |  (5,126,654) |  |    11,866,395 | 
+--------------------------------------------------------+-+---------+-+--------------+-+---------------+ 
| (Decrease)/increase in trade and other payables        |  |         |  |    (458,056) |  |     2,189,828 | 
+--------------------------------------------------------+-+---------+-+--------------+-+---------------+ 
|                                                        |  |         |  |              |  |               | 
+--------------------------------------------------------+-+---------+-+--------------+-+---------------+ 
| Cash generated from operations                         |  |         |  |    2,814,030 |  |    33,213,264 | 
+--------------------------------------------------------+-+---------+-+--------------+-+---------------+ 
| Income tax paid                                        |  |         |  |  (3,258,577) |  |     (216,569) | 
+--------------------------------------------------------+-+---------+-+--------------+-+---------------+ 
|                                                        |  |         |  |              |  |               | 
+--------------------------------------------------------+-+---------+-+--------------+-+---------------+ 
| Net cash (used in)/from operating activities           |  |         |  |    (444,547) |  |    32,996,695 | 
+--------------------------------------------------------+-+---------+-+--------------+-+---------------+ 
|                                                        |  |         |  |              |  |               | 
+--------------------------------------------------------+-+---------+-+--------------+-+---------------+ 
| Cash flows from investing activities                   |  |         |  |              |  |               | 
+--------------------------------------------------------+-+---------+-+--------------+-+---------------+ 
| Acquisition of property, plant and equipment           |  |         |  | (18,428,014) |  |  (90,521,186) | 
+--------------------------------------------------------+-+---------+-+--------------+-+---------------+ 
| Land lease payments                                    |  |         |  |     (87,551) |  |     (184,860) | 
+--------------------------------------------------------+-+---------+-+--------------+-+---------------+ 
| Advances to a shareholder                              |  |         |  |    (156,229) |  | -             | 
+--------------------------------------------------------+-+---------+-+--------------+-+---------------+ 
| (Advances to)/repayments from related companies        |  |         |  |  (3,500,000) |  |       940,000 | 
+--------------------------------------------------------+-+---------+-+--------------+-+---------------+ 
| Interest received                                      |  |         |  |      140,156 |  |       282,217 | 
+--------------------------------------------------------+-+---------+-+--------------+-+---------------+ 
|                                                        |  |         |  |              |  |               | 
+--------------------------------------------------------+-+---------+-+--------------+-+---------------+ 
| Net cash used in investing activities                  |  |         |  | (22,031,638) |  |  (89,483,829) | 
+--------------------------------------------------------+-+---------+-+--------------+-+---------------+ 

+--------------------------------------------------------+-+---------+-+------ 
=------+-+---------------+ 
| Cash flows from financing activities 
     |  |         |  |              |  | 
| 
+--------------------------------------------------------+-+---------+-+--- 
=---------+-+---------------+ 
| Repayment of bank loans 
        |  |         |  |  (7,850,000) |  |   (6,300,000) 
| 
+--------------------------------------------------------+-+---------+-+--- 
=---------+-+---------------+ 
| Proceeds from bank loans 
        |  |         |  |   37,650,000 |  |     7,850,000 
| 
+--------------------------------------------------------+-+---------+-+--- 
=---------+-+---------------+ 
| Repayment to an equity holder 
        |  |         |  |      (5,859) |  |      (23,347) 
| 
+--------------------------------------------------------+-+---------+-+--- 
=---------+-+---------------+ 
| Interest paid 
        |  |         |  |  (1,725,228) |  |     (432,747) 
| 
+--------------------------------------------------------+-+---------+-+--- 
=---------+-+---------------+ 
| Dividend paid to an equity shareholder 
        |  |         |  |    (456,089) |  |   (1,020,019) 
| 
+--------------------------------------------------------+-+---------+-+--- 
=---------+-+---------------+ 
| (Repayment to)/advance from a related company 
        |  |         |  |     (60,000) |  |        60,000 
| 
+--------------------------------------------------------+-+---------+-+--- 
=---------+-+---------------+ 
| 
        |  |         |  |              |  | 
| 
+--------------------------------------------------------+-+---------+-+--- 
=---------+-+---------------+ 
| Netcash flows from financing activities 
        |  |         |  |   27,552,824 |  |       133,887 
| 
+--------------------------------------------------------+-+---------+-+--- 
=---------+-+---------------+ 
| 
        |  |         |  |              |  | 
| 
+--------------------------------------------------------+-+---------+-+--- 
=---------+-+---------------+ 
| Net increase/(decrease) in cash and cash 
equivalents   |  |         |  |    5,076,639 |  |  (56,353,247) 
| 
+--------------------------------------------------------+-+---------+-+--- 
=---------+-+---------------+ 
| 
        |  |         |  |              |  | 
| 
+--------------------------------------------------------+-+---------+-+--- 
=---------+-+---------------+ 
| Cash and cash equivalents at beginning of year 
        |  |         |  |   12,462,094 |  |    69,326,379 
| 
+--------------------------------------------------------+-+---------+-+--- 
=---------+-+---------------+ 
| 
        |  |         |  |              |  | 
| 
+--------------------------------------------------------+-+---------+-+--- 
=---------+-+---------------+ 
| Effect of foreign exchange rate changes 
        |  |         |  |     (46,266) |  |     (511,038) 
| 
+--------------------------------------------------------+-+---------+-+--- 
=---------+-+---------------+ 
| 
        |  |         |  |              |  | 
| 
+--------------------------------------------------------+-+---------+-+--- 
=---------+-+---------------+ 
| Cash and cash equivalents at end of year 
        |  |         |  |   17,492,467 |  |    12,462,094 
| 
+--------------------------------------------------------+-+---------+-+--- 
=---------+-+---------------+ 
| 
        |  |         |  |              |  | 
| 
+--------------------------------------------------------+-+---------+-+--- 
=---------+-+---------------+ 
| Cash and cash equivalents comprises 
        |  |         |  |              |  | 
| 
+--------------------------------------------------------+-+---------+-+--- 
=---------+-+---------------+ 
| Cash and bank balances 
        |  |         |  |   17,492,467 |  |    12,462,094 
| 
+--------------------------------------------------------+-+---------+-+--- 
=---------+-+---------------+ 
 
 
 
 
NOTES TO THE FINANCIAL STATEMENTS 
31 DECEMBER 2008 
 
1.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: 
+-----------------------------------------------+--+-------------+--+-------------+ 
|                                               |  |    2008     |  |    2007     | 
+-----------------------------------------------+--+-------------+--+-------------+ 
|                                               |  |    RMB      |  |    RMB      | 
+-----------------------------------------------+--+-------------+--+-------------+ 
|                                               |  |             |  |             | 
+-----------------------------------------------+--+-------------+--+-------------+ 
| Revenue arises from:                          |  |             |  |             | 
+-----------------------------------------------+--+-------------+--+-------------+ 
| Sale of biodiesel products                    |  | 164,099,041 |  | 124,490,090 | 
+-----------------------------------------------+--+-------------+--+-------------+ 
| Provision of technology services and others   |  |     100,000 |  |     100,000 | 
+-----------------------------------------------+--+-------------+--+-------------+ 
|                                               |  |             |  |             | 
+-----------------------------------------------+--+-------------+--+-------------+ 
|                                               |  | 164,199,041 |  | 124,590,090 | 
+-----------------------------------------------+--+-------------+--+-------------+ 
 
2.GOVERNMENT GRANTS AND SUBSIDIES 
 
Included in other income are government grants and subsidies, which represented 
the financial support from relevant government authorities for the encouragement 
of the Group's engagement in energy-saving industry and research and development 
of biodiesel products. Pursuant to relevant notices issued by the Finance Bureau 
of the PRC for energy saving biodiesel producers, the Group engaged in the 
production and sale of biofuel and biodiesel is entitled to financial rewards of 
which amount is determined by government authorities by reference either to 
production capacity the Group has or to the volume of biodiesel produced and 
sold. There are no unfulfilled conditions or contingencies relating to these 
grants and subsidies. 
 
 
+----------------------------------------------+--+------------+--+-----------+ 
|                                              |  |    2008    |  |   2007    | 
+----------------------------------------------+--+------------+--+-----------+ 
|                                              |  |    RMB     |  |    RMB    | 
+----------------------------------------------+--+------------+--+-----------+ 
|                                              |  |            |  |           | 
+----------------------------------------------+--+------------+--+-----------+ 
| Grants rewarded for the usage of non-grain   |  |  8,020,000 |  |    -      | 
| materials in the production of biodiesel     |  |            |  |           | 
| products                                     |  |            |  |           | 
+----------------------------------------------+--+------------+--+-----------+ 
| Grants rewarded for engagement in            |  |  6,000,000 |  |    -      | 
| energy-saving industry                       |  |            |  |           | 
+----------------------------------------------+--+------------+--+-----------+ 
| Grants rewarded for research of biodiesel    |  |  1,330,000 |  | 8,580,000 | 
| products                                     |  |            |  |           | 
+----------------------------------------------+--+------------+--+-----------+ 
| Refunded value-added tax ("VAT") paid for    |  |  4,305,092 |  |    -      | 
| sale of biodiesel products (i)               |  |            |  |           | 
+----------------------------------------------+--+------------+--+-----------+ 
|                                              |  |            |  |           | 
+----------------------------------------------+--+------------+--+-----------+ 
|                                              |  | 19,655,092 |  | 8,580,000 | 
+----------------------------------------------+--+------------+--+-----------+ 
 
(i) Pursuant to a new VAT regulation circular which was issued by the Ministry 
of Finance in the PRC on 9 December 2008, both Xiamen Zhuoyue Biomass Energy 
Co., Ltd. ("XZBM") and Longyan Zhuoyue New Energy Development Co., Ltd. 
("LZNE"), being producers of biodiesel products by using waste oil, are eligible 
to claim for refund of VAT paid from sale of biodiesel products since 1 July 
2008. 
 
 
3.  EARNINGS PER SHARE 
 
The calculation of the basic and diluted earnings per share attributable to the 
ordinary equity holders of the Company is based on the following data: 
+----------------------------------------------------------------+-------------+---+------------+ 
|                                                                | 2008        |   | 2007       | 
+----------------------------------------------------------------+-------------+---+------------+ 
|                                                                | RMB         |   | RMB        | 
+----------------------------------------------------------------+-------------+---+------------+ 
| Earnings                                                       |             |   |            | 
+----------------------------------------------------------------+-------------+---+------------+ 
|                                                                |             |   |            | 
+----------------------------------------------------------------+-------------+---+------------+ 
| Earnings for the purpose of basic earnings per share           |   4,127,722 |   | 16,569,774 | 
+----------------------------------------------------------------+-------------+---+------------+ 
| Effect of dilutive potential ordinary shares                   | -           |   | -          | 
+----------------------------------------------------------------+-------------+---+------------+ 
|                                                                |             |   |            | 
+----------------------------------------------------------------+-------------+---+------------+ 
| Earnings for the purpose of diluted earnings per share         |   4,127,722 |   | 16,569,774 | 
+----------------------------------------------------------------+-------------+---+------------+ 
|                                                                |             |   |            | 
+----------------------------------------------------------------+-------------+---+------------+ 
| Number of shares                                               |             |   |            | 
|                                                                |             |   |            | 
+----------------------------------------------------------------+-------------+---+------------+ 
| Weighted average number of ordinary shares for the             |             |   |            | 
|  purpose of basic earnings per share                           |  45,411,765 |   | 45,411,765 | 
+----------------------------------------------------------------+-------------+---+------------+ 
| Effect of dilutive potential ordinary shares:                  |             |   |            | 
+----------------------------------------------------------------+-------------+---+------------+ 
| - share options                                                | -           |   | -          | 
+----------------------------------------------------------------+-------------+---+------------+ 
|                                                                |             |   |            | 
+----------------------------------------------------------------+-------------+---+------------+ 
| Weighted average number of ordinary shares for the             |  45,411,765 |   | 45,411,765 | 
| purpose of diluted earnings per share                          |             |   |            | 
+----------------------------------------------------------------+-------------+---+------------+ 
|                                                                |             |   |            | 
+----------------------------------------------------------------+-------------+---+------------+ 
| Earnings per share                                             |             |   |            | 
+----------------------------------------------------------------+-------------+---+------------+ 
|                                                                | RMB         |   | RMB        | 
+----------------------------------------------------------------+-------------+---+------------+ 
| Basic                                                          |       0.091 |   |      0.365 | 
+----------------------------------------------------------------+-------------+---+------------+ 
|                                                                |             |   |            | 
+----------------------------------------------------------------+-------------+---+------------+ 
| Diluted                                                        |       0.091 |   |      0.365 | 
+----------------------------------------------------------------+-------------+---+------------+ 
 
 
The computation of diluted earnings per share for 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 for 2008. 
 
 
 
4. DIVIDENDS 
 
 
+-------------------------------------------------------------+---+--------------+--+--------------+ 
|                                                             |   | 2008         |  | 2007         | 
+-------------------------------------------------------------+---+--------------+--+--------------+ 
|                                                             |   | RMB          |  | RMB          | 
+-------------------------------------------------------------+---+--------------+--+--------------+ 
|                                                             |   |              |  |              | 
+-------------------------------------------------------------+---+--------------+--+--------------+ 
| Final, proposed - nil (2007: RMB0.0365) per share           |   | -            |  |    1,656,977 | 
+-------------------------------------------------------------+---+--------------+--+--------------+ 
| Less: waived by the Chairman, Mr. Ye Huodong                |   | -            |  |  (1,200,888) | 
+-------------------------------------------------------------+---+--------------+--+--------------+ 
|                                                             |   | -            |  |      456,089 | 
+-------------------------------------------------------------+---+--------------+--+--------------+ 
 
At a Board of Directors' meeting held on 9 April 2009, the directors did not 
recommend any final dividend for 2008. 
 
At a Board of Directors' meeting held on 11 April 2008, the directors 
recommended a final dividend of 10% of the net profit for 2007. Meanwhile, the 
Chairman, Mr. Ye Huodong, holding 32,912,000 shares representing 72.47% of the 
issued capital, has confirmed to waive his dividend entitlement. The proposed 
dividend is reflected as an appropriation of retained earnings for the year 
ended 31 December 2007. 
 
The financial information set out above does not constitute the company's 
statutory accounts for the years ended 31 December 2008 or 2007 but it is 
derived from those accounts. The auditors have reported on those accounts; their 
reports were unqualified, did not include references to any matters to which the 
auditors drew attention by way of emphasis without qualifying their reports. 
 
 
 
This information is provided by RNS 
            The company news service from the London Stock Exchange 
   END 
 
 FR GUUUGCUPBGAM