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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 : 3520Z
China Biodiesel International Hold
21 September 2009
China Biodiesel International Holding Co., Ltd. ("CBI" or "the Company")
Interim results for the six months ended 30 June 2009
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, announces its interim
results for the six months ended 30 June 2009.
Highlights
* Sales volumes up 12 per cent. to 15,018 tons (2008: 13,418 tons) while turnover
down 34 per cent. to RMB 59.19 million (2008: RMB 89.51million).
* Gross profit down 45 per cent. to RMB 3.92 million (2008: RMB 7.18 million);
* A "Postdoctoral R&D Working Station" was set up in Longyan plant;
* The Xiamen subsidiary was named as "an Advanced Unit with Recycling Economy";
* Government grants and subsidies amounted to RMB 15.96 million.
CBI Chairman, Huodong Ye, commented: "The Company has quickly recovered from the
difficulties incurred in 2008 and is pleased to report a positive operating
profit for the first half of 2009. Shortly after the turbulence of 2008, caused
by the international financial crisis, the Company has benefited from recovering
opportunities in China in the first half of 2009. With the rebound of China's
economy, oil prices and the implementation of the new preferential VAT policy on
the biodiesel industry, CBI's sales have increased steadily after bottoming out
in February. A strong promotion campaign and the restart of the Xiamen plant
have also brought higher sales volume in recent months. Efficient cost control
systems and an improved product mix continued to benefit profitability in the
first six months of 2009. Against a background of uncertainty in the global
economy and the business environment the management believes it is well prepared
to lead the Company through the tough period ahead."
For further information:
Gloria He, CFO: +86 (592) 7191103
James Wang, Company Secretary: +86 (592) 7191109
Bobbie Hilliam or Chris Clarke
Evolution Securities: +44 (0) 20 7071 4300
Chairman's statement
The Company has quickly recovered from the difficulties of last year and is
pleased to report an operating profit for the first half of 2009. The slump in
fuel prices in the fourth quarter of 2008 and the consequential shrinking market
demand in the energy sector dramatically affected CBI's operation, causing an
operating loss in the second half of 2008. The first quarter of 2009 was also
difficult for CBI, with facilities running at a low level. However, with the
rebound in demand, the Xiamen plant sales volumes increased steadily from March
and achieved 15,018 tons for the half year, compared with 13,418 tons in the
same period of 2008. Sales volumes were 10,347 tons in the second quarter,
compared with 7,767 tons in the second quarter of 2008. By the end of the June
2009, the Longyan plant had returned to its average level of 2008 and the Xiamen
plant's operating loss has greatly reduced due to increasing shipping volumes.
Production flexibility has improved our product mix. BI and BII, substitutes for
petrochemical materials, are still the main products of the Company, accounting
for nearly 97 per cent. of the total sales volume. This helps reduce the impact
on the Company of the government's cap on the fuel price.
Support from the government was received during the period. During the first six
months of the year, two subsidiaries of the Company successfully obtained
"Comprehensive Utilization of Resources Verification" certificates, which means
that they can be refunded the VAT paid on biodiesel products made from waste oil
and also enjoy a deduction of 10% of biodiesel sales income from taxable profit.
Both preferential taxation policies are of a recurring nature. The deduction
will reduce our income taxation expense in the future. Further, government
grants which meet certain criteria are also exempted from income tax. All of
these preferential tax policies, applicable from 2009, ensure the Company will
be more competitive in the future.
Opportunities exist even in difficult times. As most biodiesel companies have
been greatly affected by the global financial crisis, CBI, with its highly
regarded and good quality products, is well positioned to increase its market
share in the domestic market. During the second quarter of 2009, both sales and
sourcing of feedstock returned to normal levels and new suppliers and customers
were acquired, which has further consolidated the Company's position.
Looking to the future, China's GDP is expected to grow at more than 7 per cent.
in the year 2009 and beyond, despite the current global recession. Further,
China has embarked on price reforms on fossil fuel, which means that the
domestic fuel price will become more sensitive to international markets.
Meanwhile, the central government has attached greater importance to stimulating
domestic consumption and to supporting clean energy industries. All of these
initiatives should benefit the Company's operations in the future.
Operational Review
In the first half of 2009, many biodiesel companies suffered under the impact of
the international financial crisis, but CBI has continued to work at
consolidating its relationships with customers and improve our technical
capabilities.
In the first six months, the shipping volume was 15,018 tons, 12 per cent.
higher than in the same period of 2008. After a low level of 4,671 tons in the
first quarter, sales volumes were 10,347 tons in the second quarter, even better
than the 7,767 tons in the second quarter of 2008. B1 and B2 accounted for
97 per cent. of the total sales volumes, compared with 88 per cent. in the first
half of 2008.
With the turn in the market, the average selling price has improved materially
from the lowest point in December 2008. Meanwhile, the price of waste oils in
China increased at nearly the same pace. Excitingly, the Company has expanded
its procurement network to meet the increasing feedstock demand of two growing
plants, finding more suppliers and purchasing from more areas around the
country, and signing import contracts again from Southeast Asian countries.
Technology is always the key to success. In the first half, the Xiamen company
utilized the quiet period to develop a technology for a downstream product.
Also, the Longyan company set up a Postdoctoral R&D Working Station, which will
be supported by the government and should become a platform to foster a good
group of high-tech personnel and promote market competitiveness by achieving
more scientific progress.
During this period, CBI continued to receive government grants and VAT rebate,
totaling RMB 15.85 million. Additionally, as a government supported project, the
Xiamen plant was honorably named by the municipal government as "an Advanced
Unit with Recycling Economy".
Financial Review
Total sales volumes for the six months ended 30 June 2009 increased by 12 per
cent. to 15,018 tons (2008: 13,418 tons). As the selling price fell by 41 per
cent. to RMB 3,942 per ton (2008: RMB 6,671 per ton), revenue fell to RMB 59.19
million (2008: RMB 89.5 million).
Meanwhile average feedstock price fell to RMB 2,918 per ton (2008: RMB 5,197 per
ton). As a result, the average production cost fell 41 per cent. to RMB 3,628
per ton (2008: RMB 6,136 per ton).
The Company's gross margin for the period was 6.61 per cent. with gross profits
of RMB 3.92 million (2008: RMB 7.18 million).
During the period, RMB 8.44 million in Government grants and RMB 7.41 million in
VAT rebate were received by the Company (2008: RMB 9.78million in government
grants).
Selling expenses increased by 815 per cent. to RMB 3.78 million in the first
half of 2009 (2008: RMB 0.41 million). Most of these were transportation
expenses, caused by the fact that the Company adapted a new pricing policy and
chose to take care of logistics to provide better customer service.
As a result of the Xiamen plant's suspension in the first four months, a
depreciation expense of RMB 2.64 million had to be provided as an administrative
expense; that led to a 23 per cent increase in administration expenses to RMB
7.69 million (2008: RMB 6.23 million).
Borrowing from bank increased by RMB 30 million in the second half of 2008,
which made the interest increased by 272.39% to RMB 1.227 million (2008: RMB
0.33 million).
During the half year, cash generated from operating activities increased by 62.6
per cent. to RMB 11.68 million (2008: RMB 7.18 million). Meanwhile, with the
ending of construction of Xiamen plant, the cash used in investing activities
shrank by 66.14 per cent to RMB 3.94 million (2008: RMB 11.645 million). As a
combine result, the net increase of cash and cash equivalents was RMB 6.0
million (2008: RMB -4.76 million)
Outlook
The recovery of the world economy is expected be a long journey, and it is still
too early to forecast that CBI's recovery will be sustained. There is still a
lot of uncertainty about the future as the industry is open to the effects of
turbulence in the international oil market. However, the management will
continue to do its best to consummate the jobs of cost control, feedstock
procurement and sales promotion. We expect that production volume will increase
in the coming months, although it might take some time for the Xiamen plant to
reach full production.
In the near future, before compulsory mixture of biodiesel is adopted in China,
CBI will continue focusing on the B1 and B2 products, to avoid the diesel price
cap and to maintain better margins. With the assistance of preferential
government policies, our better known brand and broader market network, CBI will
retain its confidence and continue to work hard to achieve further growth in the
period ahead.
Financial statements
CHINA BIODIESEL INTERNATIONAL HOLDING CO., LTD.
CONDENSED CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
FOR THE SIX MONTHS ENDED 30 JUNE 2009
+----------------------------------------------------------+--------+--+------
=-------+--+---------------+
|
| | | | | 6 months |
|
| | | 6 months | | ended 30
|
| | | |
ended 30 | | June 2008 |
|
| Notes | | June 2009 | |
|
+----------------------------------------------------------+--------+--+---
=----------+--+---------------+
|
| | | (unaudited) | | (unaudited)
|
+----------------------------------------------------------+--------+--+---
=----------+--+---------------+
|
| | | RMB | | RMB
|
+----------------------------------------------------------+--------+--+---
=----------+--+---------------+
|
| | | | |
|
+----------------------------------------------------------+--------+--+---
=----------+--+---------------+
| Revenue
| 6 | | 59,187,986 | | 89,512,293
|
+----------------------------------------------------------+--------+--+---
=----------+--+---------------+
| Cost of sales
| | | (55,272,984) | | (82,330,709)
|
+----------------------------------------------------------+--------+--+---
=----------+--+---------------+
|
| | | | |
|
+----------------------------------------------------------+--------+--+---
=----------+--+---------------+
| Gross profit
| | | 3,915,002 | | 7,181,584
|
+----------------------------------------------------------+--------+--+---
=----------+--+---------------+
| Other income
| 7 | | 15,955,544 | | 9,780,073
|
+----------------------------------------------------------+--------+--+---
=----------+--+---------------+
| Distribution costs
| | | (3,787,638) | | (413,973)
|
+----------------------------------------------------------+--------+--+---
=----------+--+---------------+
| Administrative expenses
| | | (7,687,121) | | (6,231,311)
|
+----------------------------------------------------------+--------+--+---
=----------+--+---------------+
| Other operating expenses
| | | (11,306) | | (86,747)
|
+----------------------------------------------------------+--------+--+---
=----------+--+---------------+
|
| | | | |
|
+----------------------------------------------------------+--------+--+---
=----------+--+---------------+
| Profit from operations
| | | 8,384,481 | | 10,229,626
|
+----------------------------------------------------------+--------+--+---
=----------+--+---------------+
| Finance income
| | | 112,398 | | 30,375
|
+----------------------------------------------------------+--------+--+---
=----------+--+---------------+
| Finance costs
| | | (1,227,643) | | (329,665)
|
+----------------------------------------------------------+--------+--+---
=----------+--+---------------+
|
| | | | |
|
+----------------------------------------------------------+--------+--+---
=----------+--+---------------+
| Profit before income tax expense
| | | 7,269,236 | | 9,930,336
|
+----------------------------------------------------------+--------+--+---
=----------+--+---------------+
|
| | | | |
|
+----------------------------------------------------------+--------+--+---
=----------+--+---------------+
| Income tax expense
| 9 | | (1,294,848) | | (1,605,402)
|
+----------------------------------------------------------+--------+--+---
=----------+--+---------------+
|
| | | | |
|
+----------------------------------------------------------+--------+--+---
=----------+--+---------------+
| Profit for the period
| | | 5,974,388 | | 8,324,934
|
+----------------------------------------------------------+--------+--+---
=----------+--+---------------+
|
| | | | |
|
+----------------------------------------------------------+--------+--+---
=----------+--+---------------+
| Other comprehensive income
| | | | |
|
+----------------------------------------------------------+--------+--+---
=----------+--+---------------+
|
| | | | |
|
+----------------------------------------------------------+--------+--+---
=----------+--+---------------+
| Exchange difference on translation of
foreign operations | | | (22,766) | | 22,260
|
+----------------------------------------------------------+--------+--+---
=----------+--+---------------+
|
| | | | |
|
+----------------------------------------------------------+--------+--+---
=----------+--+---------------+
| Total comprehensive income for the period
| | | 5,951,622 | | 8,347,194
|
+----------------------------------------------------------+--------+--+---
=----------+--+---------------+
|
| | | | |
|
+----------------------------------------------------------+--------+--+---
=----------+--+---------------+
| Profit/(loss) for the period attributable
to: | | | | |
|
+----------------------------------------------------------+--------+--+---
=----------+--+---------------+
| - Owners of the parent
| | | 5,981,655 | | 8,340,213
|
+----------------------------------------------------------+--------+--+---
=----------+--+---------------+
| - Minority interests
| | | (7,267) | | (15,279)
|
+----------------------------------------------------------+--------+--+---
=----------+--+---------------+
|
| | | | |
|
+----------------------------------------------------------+--------+--+---
=----------+--+---------------+
|
| | | 5,974,388 | | 8,324,934
|
+----------------------------------------------------------+--------+--+---
=----------+--+---------------+
|
| | | | |
|
+----------------------------------------------------------+--------+--+---
=----------+--+---------------+
| Total comprehensive income/(loss) for the
period | | | | | |
| attributable
to: | | | | |
|
+----------------------------------------------------------+--------+--+---
=----------+--+---------------+
| - Owners of the parent
| | | 5,958,889 | | 8,362,473
|
+----------------------------------------------------------+--------+--+---
=----------+--+---------------+
| - Minority interests
| | | (7,267) | | (15,279)
|
+----------------------------------------------------------+--------+--+---
=----------+--+---------------+
|
| | | | |
|
+----------------------------------------------------------+--------+--+---
=----------+--+---------------+
|
| | | 5,951,622 | | 8,347,194
|
+----------------------------------------------------------+--------+--+---
=----------+--+---------------+
|
| | | | |
|
+----------------------------------------------------------+--------+--+---
=----------+--+---------------+
| Dividends
| 18 | | - | | -
|
+----------------------------------------------------------+--------+--+---
=----------+--+---------------+
|
| | | | |
|
+----------------------------------------------------------+--------+--+---
=----------+--+---------------+
| Earnings per share
| 10 | | | |
|
+----------------------------------------------------------+--------+--+---
=----------+--+---------------+
| Basic
| | | 0.132 | | 0.183
|
+----------------------------------------------------------+--------+--+---
=----------+--+---------------+
|
| | | | |
|
+----------------------------------------------------------+--------+--+---
=----------+--+---------------+
| Diluted
| | | 0.132 | | 0.183
|
+----------------------------------------------------------+--------+--+---
=----------+--+---------------+
CHINA BIODIESEL INTERNATIONAL HOLDING CO., LTD.
CONDENSED CONSOLIDATED STATEMENT OF FINANCIAL POSITION
AS AT 30 JUNE 2009
+--------------------------------------------------------------+--------+--+--------------+--+----------------+
| | | | 30 June | | 31 December |
| | Notes | | 2009 | | 2008 |
+--------------------------------------------------------------+--------+--+--------------+--+----------------+
| | | | (unaudited) | | (audited) |
+--------------------------------------------------------------+--------+--+--------------+--+----------------+
| | | | RMB | | RMB |
+--------------------------------------------------------------+--------+--+--------------+--+----------------+
| | | | | | |
+--------------------------------------------------------------+--------+--+--------------+--+----------------+
| Assets | | | | | |
+--------------------------------------------------------------+--------+--+--------------+--+----------------+
| | | | | | |
+--------------------------------------------------------------+--------+--+--------------+--+----------------+
| Non-current assets | | | | | |
+--------------------------------------------------------------+--------+--+--------------+--+----------------+
| Property, plant and equipment | 11 | | 163,730,595 | | 164,944,419 |
+--------------------------------------------------------------+--------+--+--------------+--+----------------+
| Deposits for acquisition of property, plant and equipment | | | 2,273,438 | | - |
+--------------------------------------------------------------+--------+--+--------------+--+----------------+
| Payments for leasehold land held for own use under | | | | | |
| operating leases | 11 | | 8,633,353 | | 8,743,363 |
+--------------------------------------------------------------+--------+--+--------------+--+----------------+
| Other intangible assets | | | 2,118 | | 2,341 |
+--------------------------------------------------------------+--------+--+--------------+--+----------------+
| Deferred tax assets | | | 244,415 | | 711,518 |
+--------------------------------------------------------------+--------+--+--------------+--+----------------+
| | | | | | |
+--------------------------------------------------------------+--------+--+--------------+--+----------------+
| Total non-current assets | | | 174,883,919 | | 174,401,641 |
+--------------------------------------------------------------+--------+--+--------------+--+----------------+
| | | | | | |
+--------------------------------------------------------------+--------+--+--------------+--+----------------+
| Current assets | | | | | |
+--------------------------------------------------------------+--------+--+--------------+--+----------------+
| Inventories | 12 | | 19,355,678 | | 14,558,258 |
+--------------------------------------------------------------+--------+--+--------------+--+----------------+
| Trade and other receivables | 13 | | 17,092,646 | | 23,252,801 |
+--------------------------------------------------------------+--------+--+--------------+--+----------------+
| Income tax recoverable | | | 563,780 | | 940,405 |
+--------------------------------------------------------------+--------+--+--------------+--+----------------+
| Cash and cash equivalents | | | 23,470,989 | | 17,492,467 |
+--------------------------------------------------------------+--------+--+--------------+--+----------------+
| | | | | | |
+--------------------------------------------------------------+--------+--+--------------+--+----------------+
| Total current assets | | | 60,483,093 | | 56,243,931 |
+--------------------------------------------------------------+--------+--+--------------+--+----------------+
| Total assets | | | 235,367,012 | | 230,645,572 |
+--------------------------------------------------------------+--------+--+--------------+--+----------------+
| | | | | | |
+--------------------------------------------------------------+--------+--+--------------+--+----------------+
| Liabilities | | | | | |
+--------------------------------------------------------------+--------+--+--------------+--+----------------+
| | | | | | |
+--------------------------------------------------------------+--------+--+--------------+--+----------------+
| Current liabilities | | | | | |
+--------------------------------------------------------------+--------+--+--------------+--+----------------+
| Trade and other payables | 14 | | 8,810,278 | | 9,540,460 |
+--------------------------------------------------------------+--------+--+--------------+--+----------------+
| Bank loans | 15 | | 37,850,000 | | 38,350,000 |
+--------------------------------------------------------------+--------+--+--------------+--+----------------+
| | | | | | |
+--------------------------------------------------------------+--------+--+--------------+--+----------------+
| Total current liabilities | | | 46,660,278 | | 47,890,460 |
+--------------------------------------------------------------+--------+--+--------------+--+----------------+
| | | | | | |
+--------------------------------------------------------------+--------+--+--------------+--+----------------+
| Total liabilities | | | 46,660,278 | | 47,890,460 |
+--------------------------------------------------------------+--------+--+--------------+--+----------------+
| NET ASSETS | | | 188,706,734 | | 182,755,112 |
+--------------------------------------------------------------+--------+--+--------------+--+----------------+
| | | | | | |
+--------------------------------------------------------------+--------+--+--------------+--+----------------+
| | | | | | |
+--------------------------------------------------------------+--------+--+--------------+--+----------------+
| | | | | | |
+--------------------------------------------------------------+--------+--+--------------+--+----------------+
CHINA BIODIESEL INTERNATIONAL HOLDING CO., LTD.
CONDENSED CONSOLIDATED STATEMENT OF FINANCIAL POSITION (CONTINUED)
AS AT 30 JUNE 2009
+--------------------------------------------------------+--------+--+--------------+--+----------------+
| | | | 30 June | | 31 December |
| | Notes | | 2009 | | 2008 |
+--------------------------------------------------------+--------+--+--------------+--+----------------+
| | | | (unaudited) | | (audited) |
+--------------------------------------------------------+--------+--+--------------+--+----------------+
| | | | RMB | | RMB |
+--------------------------------------------------------+--------+--+--------------+--+----------------+
| | | | | | |
+--------------------------------------------------------+--------+--+--------------+--+----------------+
| Capital and reserves attributable to | | | | | |
| owners of the parent | | | | | |
+--------------------------------------------------------+--------+--+--------------+--+----------------+
| Share capital | | | 3,632,941 | | 3,632,941 |
+--------------------------------------------------------+--------+--+--------------+--+----------------+
| Reserves | | | 184,800,556 | | 178,841,667 |
+--------------------------------------------------------+--------+--+--------------+--+----------------+
| Equity attributable to owners of the parent | | | 188,433,497 | | 182,474,608 |
+--------------------------------------------------------+--------+--+--------------+--+----------------+
| | | | | | |
+--------------------------------------------------------+--------+--+--------------+--+----------------+
| Minority interests | | | 273,237 | | 280,504 |
+--------------------------------------------------------+--------+--+--------------+--+----------------+
| | | | | | |
+--------------------------------------------------------+--------+--+--------------+--+----------------+
| TOTAL EQUITY | | | 188,706,734 | | 182,755,112 |
+--------------------------------------------------------+--------+--+--------------+--+----------------+
CHINA BIODIESEL INTERNATIONAL HOLDING CO., LTD.
CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
FOR THE SIX MONTHS ENDED 30 JUNE 2009
+------------------------------+---+-------------+-+-------------+-+-------------+-+-------------+-+-------------+-+-------------+-+-------------+-+-------------+--+-------------+-+--------------+-+-------------+-+-------------+
| | | Equity attributable to owners of the parent | | | | |
+------------------------------+---+---------------------------------------------------------------------------------------------------------------------------------------------------------------+-+-------------+-+-------------+
| | | Share | | Share | | Contributed | | Foreign | | Share | | | | | | | | | | | | | | Total |
| | | capital | | premium | | surplus | | exchange | | option | | Merger | | General | | Proposed | | Retained | | Sub-total | | Minority | | (unaudited) |
| | | (unaudited) | | (unaudited) | | (unaudited) | | reserve | | reserve | | reserve | | reserve | | dividends | | earnings | | (unaudited) | | interests | | |
| | | | | | | | | (unaudited) | | (unaudited) | | (unaudited) | | (unaudited) | | (unaudited) | | (unaudited) | | | | (unaudited) | | |
+------------------------------+---+-------------+-+-------------+-+-------------+-+-------------+-+-------------+-+-------------+-+-------------+-+-------------+--+-------------+-+--------------+-+-------------+-+-------------+
| | | RMB | | RMB | | RMB | | RMB | | RMB | | RMB | | RMB | | RMB | | RMB | | RMB | | RMB | | RMB |
+------------------------------+---+-------------+-+-------------+-+-------------+-+-------------+-+-------------+-+-------------+-+-------------+-+-------------+--+-------------+-+--------------+-+-------------+-+-------------+
| | | | | | | | | | | | | | | | | | | | | | | | | |
+------------------------------+---+-------------+-+-------------+-+-------------+-+-------------+-+-------------+-+-------------+-+-------------+-+-------------+--+-------------+-+--------------+-+-------------+-+-------------+
| | | | | | | | | | | | | | | | | | | | | | | | | |
+------------------------------+---+-------------+-+-------------+-+-------------+-+-------------+-+-------------+-+-------------+-+-------------+-+-------------+--+-------------+-+--------------+-+-------------+-+-------------+
| At 1 January 2009 | | 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 |
+------------------------------+---+-------------+-+-------------+-+-------------+-+-------------+-+-------------+-+-------------+-+-------------+-+-------------+--+-------------+-+--------------+-+-------------+-+-------------+
| | | | | | | | | | | | | | | | | | | | | | | | | |
+------------------------------+---+-------------+-+-------------+-+-------------+-+-------------+-+-------------+-+-------------+-+-------------+-+-------------+--+-------------+-+--------------+-+-------------+-+-------------+
| Total comprehensive | | - | | - | | - | | (22,766) | | - | | - | | - | | - | | 5,981,655 | | 5,958,889 | | (7,267) | | 5,951,622 |
| income/(loss) | | | | | | | | | | | | | | | | | | | | | | | | |
+------------------------------+---+-------------+-+-------------+-+-------------+-+-------------+-+-------------+-+-------------+-+-------------+-+-------------+--+-------------+-+--------------+-+-------------+-+-------------+
| Provision for general | | - | | - | | - | | - | | - | | - | | 1,307,869 | | - | | (1,307,869) | | - | | - | | - |
| reserve | | | | | | | | | | | | | | | | | | | | | | | | |
+------------------------------+---+-------------+-+-------------+-+-------------+-+-------------+-+-------------+-+-------------+-+-------------+-+-------------+--+-------------+-+--------------+-+-------------+-+-------------+
| | | - | | - | | - | | (22,766) | | - | | - | | 1,307,869 | | - | | 4,673,786 | | 5,958,889 | | (7,267) | | 5,951,622 |
+------------------------------+---+-------------+-+-------------+-+-------------+-+-------------+-+-------------+-+-------------+-+-------------+-+-------------+--+-------------+-+--------------+-+-------------+-+-------------+
| | | | | | | | | | | | | | | | | | | | | | | | | |
+------------------------------+---+-------------+-+-------------+-+-------------+-+-------------+-+-------------+-+-------------+-+-------------+-+-------------+--+-------------+-+--------------+-+-------------+-+-------------+
| At 30 June 2009 | | 3,632,941 | | 90,572,623 | | 5,047,816 | | (1,887,118) | | 2,229,427 | | (121,330) | | 11,461,146 | | - | | 77,497,992 | | 188,433,497 | | 273,237 | | 188,706,734 |
+------------------------------+---+-------------+-+-------------+-+-------------+-+-------------+-+-------------+-+-------------+-+-------------+-+-------------+--+-------------+-+--------------+-+-------------+-+-------------+
| | | | | | | | | | | | | | | | | | | | | | | | | |
+------------------------------+---+-------------+-+-------------+-+-------------+-+-------------+-+-------------+-+-------------+-+-------------+-+-------------+--+-------------+-+--------------+-+-------------+-+-------------+
| At 1 January 2008 | | 3,632,941 | | 90,572,623 | | 5,047,816 | | (1,818,086) | | 2,229,427 | | (121,330) | | 8,518,709 | | 456,089 | | 70,331,052 | | 178,849,241 | | 304,520 | | 179,153,761 |
+------------------------------+---+-------------+-+-------------+-+-------------+-+-------------+-+-------------+-+-------------+-+-------------+-+-------------+--+-------------+-+--------------+-+-------------+-+-------------+
| | | | | | | | | | | | | | | | | | | | | | | | | |
+------------------------------+---+-------------+-+-------------+-+-------------+-+-------------+-+-------------+-+-------------+-+-------------+-+-------------+--+-------------+-+--------------+-+-------------+-+-------------+
| Total comprehensive | | - | | - | | - | | 22,260 | | - | | - | | - | | - | | 8,340,213 | | 8,362,473 | | (15,279) | | 8,347,194 |
| income/(loss) | | | | | | | | | | | | | | | | | | | | | | | | |
+------------------------------+---+-------------+-+-------------+-+-------------+-+-------------+-+-------------+-+-------------+-+-------------+-+-------------+--+-------------+-+--------------+-+-------------+-+-------------+
| Provision for general | | - | | - | | - | | - | | - | | - | | 1,231,917 | | - | | (1,231,917) | | - | | - | | - |
| reserve | | | | | | | | | | | | | | | | | | | | | | | | |
+------------------------------+---+-------------+-+-------------+-+-------------+-+-------------+-+-------------+-+-------------+-+-------------+-+-------------+--+-------------+-+--------------+-+-------------+-+-------------+
| Dividend distribution | | - | | - | | - | | - | | - | | - | | - | | (456,089) | | - | | (456,089) | | - | | (456,089) |
+------------------------------+---+-------------+-+-------------+-+-------------+-+-------------+-+-------------+-+-------------+-+-------------+-+-------------+--+-------------+-+--------------+-+-------------+-+-------------+
| | | - | | - | | - | | 22,260 | | - | | - | | 1,231,917 | | (456,089) | | 7,108,296 | | 7,906,384 | | (15,279) | | 7,891,105 |
+------------------------------+---+-------------+-+-------------+-+-------------+-+-------------+-+-------------+-+-------------+-+-------------+-+-------------+--+-------------+-+--------------+-+-------------+-+-------------+
| | | | | | | | | | | | | | | | | | | | | | | | | |
+------------------------------+---+-------------+-+-------------+-+-------------+-+-------------+-+-------------+-+-------------+-+-------------+-+-------------+--+-------------+-+--------------+-+-------------+-+-------------+
| At 30 June 2008 | | 3,632,941 | | 90,572,623 | | 5,047,816 | | (1,795,826) | | 2,229,427 | | (121,330) | | 9,750,626 | | - | | 77,439,348 | | 186,755,625 | | 289,241 | | 187,044,866 |
+------------------------------+---+-------------+-+-------------+-+-------------+-+-------------+-+-------------+-+-------------+-+-------------+-+-------------+--+-------------+-+--------------+-+-------------+-+-------------+
| | | | | | | | | | | | | | | | | | | | | | | | | |
+------------------------------+---+-------------+-+-------------+-+-------------+-+-------------+-+-------------+-+-------------+-+-------------+-+-------------+--+-------------+-+--------------+-+-------------+-+-------------+
CHINA BIODIESEL INTERNATIONAL HOLDING CO., LTD.
CONDENSED CONSOLIDATED STATEMENT OF CASH FLOW
FOR THE SIX MONTHS ENDED 30 JUNE 2009
+----------------------------------------------------+-+-------+-+---------------+--+--------------+--+
| | | | | | | | |
| | | | | 6 months | | 6 months | |
| | | | | ended 30 June | | ended 30 | |
| | | Notes | | 2009 | | June 2008 | |
+----------------------------------------------------+-+-------+-+---------------+--+--------------+--+
| | | | | (unaudited) | | (unaudited) | |
+----------------------------------------------------+-+-------+-+---------------+--+--------------+--+
| | | | | RMB | | RMB | |
+----------------------------------------------------+-+-------+-+---------------+--+--------------+--+
| | | | | | | | |
+----------------------------------------------------+-+-------+-+---------------+--+--------------+--+
| Net cash flows from operating activities | | | | 11,675,783 | | 7,181,928 | |
+----------------------------------------------------+-+-------+-+---------------+--+--------------+--+
| | | | | | | | |
+----------------------------------------------------+-+-------+-+---------------+--+--------------+--+
| Net cash flows used in investing activities | | | | (3,946,852) | | (11,654,874) | |
+----------------------------------------------------+-+-------+-+---------------+--+--------------+--+
| | | | | | | | |
+----------------------------------------------------+-+-------+-+---------------+--+--------------+--+
| Net cash flows used in financing activities | | | | (1,727,643) | | (288,517) | |
+----------------------------------------------------+-+-------+-+---------------+--+--------------+--+
| | | | | | | | |
+----------------------------------------------------+-+-------+-+---------------+--+--------------+--+
| Net increase/(decrease) in cash and cash | | | | 6,001,288 | | (4,761,463) | |
| equivalents | | | | | | | |
+----------------------------------------------------+-+-------+-+---------------+--+--------------+--+
| | | | | | | | |
+----------------------------------------------------+-+-------+-+---------------+--+--------------+--+
| Cash and cash equivalents at beginning of period | | | | 17,492,467 | | 12,462,094 | |
+----------------------------------------------------+-+-------+-+---------------+--+--------------+--+
| | | | | | | | |
+----------------------------------------------------+-+-------+-+---------------+--+--------------+--+
| Effect of foreign exchange rate changes | | | | (22,766) | | 22,260 | |
+----------------------------------------------------+-+-------+-+---------------+--+--------------+--+
| | | | | | | | |
+----------------------------------------------------+-+-------+-+---------------+--+--------------+--+
| Cash and cash equivalents at end of period | | | | 23,470,989 | | 7,722,891 | |
+----------------------------------------------------+-+-------+-+---------------+--+--------------+--+
NOTES TO THE CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS
China Biodiesel International Holding Co., Limited (the "Company") was
incorporated in the British Virgin Islands ("BVI") 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 engaged in the manufacturing and
sale of biodiesel products and the provision of services in connection with
biodiesel distillation technologies in the Peoples Republic of China (the
"PRC"). The Groups principal places of business are at Longyan and Xiamen,
both cities are located in the Fujian Province, the PRC.
The condensed consolidated financial statements are presented in Renminbi
("RMB"), which is the functional currency of the Company and its subsidiaries.
The unaudited condensed consolidated financial statements (the "Interim
Financial Statements") are prepared in accordance with International Accounting
Standards ("IAS") 34 "Interim Financial Reporting" issued by the International
Accounting Standards Board ("IASB").
The accounting policies and the methods of computation used in the Interim
Financial Statements are consistent with those followed in the preparation of
the annual financial statements for the year ended 31 December 2008 except as
described below.
In the current period, the Group has applied, for the first time,
the following new standards, amendments and interpretations ("new IFRSs")
issued by the IASB that are effective for the Groups financial year beginning
on 1 January 2009.
+---------------------------------------+-+--------------------------------------------------------+
| IFRSs (Amendments) | | Improvements to IFRSs May 2008 |
+---------------------------------------+-+--------------------------------------------------------+
| IFRSs (Amendments) | | Improvements to IFRSs April 2009 |
+---------------------------------------+-+--------------------------------------------------------+
| Amendments to IFRS 1 and IAS 27 | | Cost of an Investment in a Subsidiary, Jointly |
| | | Controlled Entity or Associate |
+---------------------------------------+-+--------------------------------------------------------+
| Amendments to IFRS 2 | | Share-based Payment - Vesting Conditions and |
| | | Cancellations |
+---------------------------------------+-+--------------------------------------------------------+
| Amendments to IFRS 7 | | Financial Instruments: Disclosure - Improving |
| | | Disclosures about Financial Instruments |
+---------------------------------------+-+--------------------------------------------------------+
| IFRS 8 | | Operating Segments |
+---------------------------------------+-+--------------------------------------------------------+
| IAS 1 (Revised) | | Presentation of Financial Statements |
+---------------------------------------+-+--------------------------------------------------------+
| IAS 23 (Revised) | | Borrowing Costs |
+---------------------------------------+-+--------------------------------------------------------+
| Amendments to IAS 32 and IAS1 | | Puttable Financial Instruments and Obligations Arising |
| | | on Liquidation |
+---------------------------------------+-+--------------------------------------------------------+
| IFRIC - Interpretation 13 | | Customer Loyalty Programmes |
+---------------------------------------+-+--------------------------------------------------------+
| IFRIC - Interpretation 15 | | Agreements for the Construction of Real Estate |
+---------------------------------------+-+--------------------------------------------------------+
| IFRIC -Interpretation 16 | | Hedges of a Net Investment in a Foreign Operation |
+---------------------------------------+-+--------------------------------------------------------+
The adoption of the new IFRSs, except for changes in presentation according to
IAS 1 (Revised) as described below, had no material effect on the results or
financial position of the Group for current or prior accounting periods and
therefore no prior period adjustment has been recognised.
IAS 1 (Revised) separates owner and non-owner changes in equity. The statement
of changes in equity includes only details of transactions with owners, with
non-owner changes in equity presented as a single line. In addition, the
standard introduces the statement of comprehensive income which presents all
items of recognised income and expense, either in one single statement, or in
two linked statements. The Group has elected to present one single statement.
Comparative figures have been restated or included in order to achieve a
consistent presentation. The change in presentation has no effect on reported
financial performance and financial position of the Group for any period
presented.
The Group has not yet applied the following IFRSs that have been issued but not
been effective. The directors of the Company anticipated that the application of
these IFRSs will have no material impact on the Interim Financial Statements of
the Group.
+--------------------------------------------------+-----------------------------------------+
| IFRSs (Amendments) | Improvements to IFRSs May 2008 1 |
+--------------------------------------------------+-----------------------------------------+
| IFRSs (Amendments) | Improvements to IFRSs April 2009 2 |
+--------------------------------------------------+-----------------------------------------+
| IFRS 1 (Revised) | First-time Adoption of International |
| | Financial Reporting Standards 3 |
+--------------------------------------------------+-----------------------------------------+
| Amendments to IFRS 1 | Additional Exemptions for First-time |
| | Adopters 4 |
+--------------------------------------------------+-----------------------------------------+
| Amendments to IFRS 2 | Share-based Payment - Group |
| | Cash-settled Share-based Payment |
| | Transactions 4 |
+--------------------------------------------------+-----------------------------------------+
| IFRS 3 (Revised) | Business Combinations 3 |
+--------------------------------------------------+-----------------------------------------+
| IAS 27 (Revised) | Consolidated and Separate Financial |
| | Statements 3 |
+--------------------------------------------------+-----------------------------------------+
| Amendment to IAS 39 | Eligible Hedged Items 3 |
+--------------------------------------------------+-----------------------------------------+
| Amendments to IFRIC - Interpretation 9 and IAS | Embedded Derivatives 5 |
| 39 | |
+--------------------------------------------------+-----------------------------------------+
| IFRIC - Interpretation 17 | Distributions of Non-cash Assets to |
| | Owners 3 |
+--------------------------------------------------+-----------------------------------------+
| IFRIC - Interpretation 18 | Transfers of Assets from Customers 6 |
+--------------------------------------------------+-----------------------------------------+
| | |
+--------------------------------------------------+-----------------------------------------+
+-+--------------------------------------+-----------------------------------------+
| | 1 Amendments to IFRS 5 effective for annual periods beginning on or after 1 |
| | July 2009 |
| | 2Effective for annual periods beginning on or after 1 July 2009 and 1 January |
| | 2010, as appropriate |
| | 3Effective for annual periods beginning on or after 1 July 2009 |
| | 4 Effective for annual periods beginning on or after 1 January 2010 |
| | 5Effective for annual periods ending on or after 30 June 2009 |
| | 6 Effective for transfers of assets from customers received on or after 1 July |
| | 2009 |
+-+--------------------------------------------------------------------------------+
| | |
+-+--------------------------------------+-----------------------------------------+
The subsidiaries of the Company, which have been included in the Interim
Financial Statements, are as follows:
+------------------+--+------------------+--+---------------+--+-------------------------+--+--------------+
| | | Place of | | Date of | | | | Proportion |
| Name | | incorporation | | incorporation | | Principal activities | | of ownership |
| | | and operations | | | | | | interest |
+------------------+--+------------------+--+---------------+--+-------------------------+--+--------------+
| | | | | | | | | |
+------------------+--+------------------+--+---------------+--+-------------------------+--+--------------+
| Longyan Zhuoyue | | Longyan, | | 1 November | | Manufacturing and sale | | 100% |
| New Energy | | Fujian Province, | | 2001 | | of biodiesel products | | |
| Development Co., | | the PRC | | | | | | |
| Limited ("LZNE") | | | | | | | | |
+------------------+--+------------------+--+---------------+--+-------------------------+--+--------------+
| | | | | | | | | |
+------------------+--+------------------+--+---------------+--+-------------------------+--+--------------+
| Longyan Zhuoyue | | Longyan, | | 21 April | | Development of | | 90% |
| Biodiesel | | Fujian Province, | | 2005 | | biodiesel technology, | | |
| Technology | | the PRC | | | | provision of technology | | |
| Development Co., | | | | | | consultancy and | | |
| Limited ("ZBTD") | | | | | | transfer of technology | | |
| | | | | | | in respect of | | |
| | | | | | | production of biodiesel | | |
| | | | | | | products | | |
+------------------+--+------------------+--+---------------+--+-------------------------+--+--------------+
| | | | | | | | | |
+------------------+--+------------------+--+---------------+--+-------------------------+--+--------------+
| Xiamen Zhuoyue | | Xiamen, | | 17 August | | Manufacturing and sale | | 100% |
| Bio-mass Energy | | Fujian Province, | | 2006 | | of biodiesel products | | |
| Co., Limited | | the PRC | | | | | | |
| ("XZBM") | | | | | | | | |
+------------------+--+------------------+--+---------------+--+-------------------------+--+--------------+
| | | | | | | | | |
+------------------+--+------------------+--+---------------+--+-------------------------+--+--------------+
| Longyan Zhuoyue | | Longyan, | | 28 February | | Construction of | | 100% |
| Bio-mass Energy | | Fujian Province, | | 2007 | | production site in | | |
| Co., Limited | | the PRC | | | | progress | | |
| ("LYBM") | | | | | | | | |
+------------------+--+------------------+--+---------------+--+-------------------------+--+--------------+
| | | | | | | | | |
+------------------+--+------------------+--+---------------+--+-------------------------+--+--------------+
| Xiamen Huoda | | Xiamen, | | 22 April 2009 | | Construction of | | 100% |
| Industry and | | Fujian Province, | | | | production facilities | | |
| Trade Co., | | the PRC | | | | in progress | | |
| limited ("XHIT") | | | | | | | | |
| (i) | | | | | | | | |
+------------------+--+------------------+--+---------------+--+-------------------------+--+--------------+
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 engaged in producing and marketing of biodiesel products in
the PRC. In addition, the Groups turnover and operating profit are almost
entirely derived from its operations in the PRC. As a result, no segment
analysis has been presented.
Turnover represents the net invoiced value of goods sold and service income
earned by the Group. The amounts of each significant category of revenue
recognised in turnover during the period are as follows:
+--------------------------------------------------------------+---+---------------+--+---------------+
| | | 6 months | | 6 months |
| | | ended 30 | | ended 30 |
| | | June 2009 | | June 2008 |
+--------------------------------------------------------------+---+---------------+--+---------------+
| | | (unaudited) | | (unaudited) |
+--------------------------------------------------------------+---+---------------+--+---------------+
| | | RMB | | RMB |
+--------------------------------------------------------------+---+---------------+--+---------------+
| | | | | |
+--------------------------------------------------------------+---+---------------+--+---------------+
| Revenue arises from: | | | | |
+--------------------------------------------------------------+---+---------------+--+---------------+
| Sale of biodiesel products | | 59,137,986 | | 89,462,293 |
+--------------------------------------------------------------+---+---------------+--+---------------+
| Provision of technology services and others | | 50,000 | | 50,000 |
+--------------------------------------------------------------+---+---------------+--+---------------+
| | | | | |
+--------------------------------------------------------------+---+---------------+--+---------------+
| | | 59,187,986 | | 89,512,293 |
+--------------------------------------------------------------+---+---------------+--+---------------+
Government grants and subsidies represented the financial support from relevant
government authorities for the encouragement of the Groups engagement in
energy-saving industry and research and development of biodiesel products.
Pursuant to relevant notices issued by the Ministry of Finance 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. Also pursuant to
a VAT regulation circular which was issued by the Ministry of Finance in the PRC
on 9 December 2008, both XZBM and 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. There are no unfulfilled conditions or
contingencies relating to these grants and subsidies.
+--------------------------------------------------------------+--+----------------+--+-------------+
| | | 6 months ended | | 6 months |
| | | 30 | | ended 30 |
| | | June 2009 | | June 2008 |
+--------------------------------------------------------------+--+----------------+--+-------------+
| | | (unaudited) | | (unaudited) |
+--------------------------------------------------------------+--+----------------+--+-------------+
| | | RMB | | RMB |
+--------------------------------------------------------------+--+----------------+--+-------------+
| Grants rewarded for the usage of non-grain materials in the | | | | |
| production of biodiesel products | | 8,440,000 | | 8,020,000 |
+--------------------------------------------------------------+--+----------------+--+-------------+
| Refunded value-added tax ("VAT") paid for sale of biodiesel | | | | |
| products | | 7,405,355 | | - |
+--------------------------------------------------------------+--+----------------+--+-------------+
| | | | | |
+--------------------------------------------------------------+--+----------------+--+-------------+
| | | 15,845,355 | | 8,020,000 |
+--------------------------------------------------------------+--+----------------+--+-------------+
The Company itself did not generate any taxable profit during the period. In the
opinion of the directors, the Company is not subject to income tax in the PRC or
the British Virgin Islands.
According to the PRC tax rules and regulations effective on 1 January 2008, LZNE
and its own subsidiaries, ZBTD and XHIT, as well as LZBM, the Companys another
subsidiary, are subject to PRC Enterprise Income Tax ("EIT") at the standard
rate of 25% in the period (2008: 25%). XZBM, the Companys another subsidiary,
is established in the Xiamen Special Economic Zone and is subject to EIT at a
rate of 20%, which is the standard tax rate in the special economic zone in
fiscal year 2009 (2008: 18%).
The standard EIT rate applicable to XZBM will be gradually increased from 20% to
25% during the next 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 ("WOFEs") with their
principal activities in production and over 10-year operating period, are
eligible to enjoy tax exemption and tax reductions given to a WOFE. In
particular, LZNE is eligible to 50% reduction of EIT standard rate for the three
fiscal years 2008, 2009 and 2010 while XZBM is eligible to full exemption from
EIT for two fiscal years 2008 and 2009 and 50% reduction of EIT standard rate
for the following 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 engaging in resources comprehensive utilisation, both entities
are qualified to be further eligible for another preferential tax policy under
which 10% reduction is applied to their revenue generated from sale of products
by utilising waste or recycled materials in the calculation of the assessable
income since 1 January 2009.
Previously, management considered that both LZNE and XZBM shall be eligible for
either of the above tax preferential policies in 2008 and opted for the latter
option (i.e., the one related to these subsidiaries being engaged in resources
comprehensive utilisation). However, accordingly to further verification from
the local tax authorities on 30 August 2009, these Groups subsidiaries could
only enjoy the former tax preferential policies (i.e., the one related to these
subsidiaries being qualified 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 years tax provision.
LZBM, being WOFE with its principal activities in production and over 10-year
operating period, is eligible to a preferential tax policy of full exemption
from EIT for two fiscal years 2008 and 2009 and 50% reduction of EIT standard
rate for the following three fiscal years.
Besides, 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 are qualified for EIT exemption if the following criteria
are met: (1) the entities receiving the grants can provide approval
documentation issued by relevant government authorities in which usage of the
grants are 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. However, 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 EIT calculation.
The grant in the amount of RMB8.44 million (2008: RMB8.02 million) granted for
usage of non-grain materials in the production of biodiesel products meets the
above criteria and local tax authority has approved the EIT exemption related to
such grant received by the Group since 1 January 2008.
Income tax expense of the Group for the period represents the EIT calculated at
the applicable income tax rate on the assessable income.
+-------------------------------------------------------------+---+--------------+--+--------------+
| | | 6 months | | 6 months |
| | | ended 30 | | ended 30 |
| | | June 2009 | | June 2008 |
+-------------------------------------------------------------+---+--------------+--+--------------+
| | | (unaudited) | | (unaudited) |
+-------------------------------------------------------------+---+--------------+--+--------------+
| | | RMB | | RMB |
+-------------------------------------------------------------+---+--------------+--+--------------+
| Current tax | | | | |
+-------------------------------------------------------------+---+--------------+--+--------------+
| - tax for the period | | 322,945 | | 1,592,902 |
+-------------------------------------------------------------+---+--------------+--+--------------+
| - under provision in respect of prior years | | 504,799 | | - |
+-------------------------------------------------------------+---+--------------+--+--------------+
| | | 827,744 | | 1,592,902 |
+-------------------------------------------------------------+---+--------------+--+--------------+
| Deferred tax | | | | |
+-------------------------------------------------------------+---+--------------+--+--------------+
| - current period | | 189,802 | | 12,500 |
+-------------------------------------------------------------+---+--------------+--+--------------+
| - attributable to decrease in tax rate | | 277,302 | | - |
+-------------------------------------------------------------+---+--------------+--+--------------+
| | | 467,104 | | 12,500 |
+-------------------------------------------------------------+---+--------------+--+--------------+
| | | | | |
+-------------------------------------------------------------+---+--------------+--+--------------+
| Income tax expense | | 1,294,848 | | 1,605,402 |
+-------------------------------------------------------------+---+--------------+--+--------------+
The income tax expense during the period can be reconciled to profit per
condensed consolidated statement of comprehensive income as follows:
+----------------------------------------------------------+---+--------------+--+---------------+
| | | 6 months | | 6 months |
| | | ended 30 | | ended 30 |
| | | June 2009 | | June 2008 |
+----------------------------------------------------------+---+--------------+--+---------------+
| | | (unaudited) | | (unaudited) |
+----------------------------------------------------------+---+--------------+--+---------------+
| | | RMB | | RMB |
+----------------------------------------------------------+---+--------------+--+---------------+
| | | | | |
+----------------------------------------------------------+---+--------------+--+---------------+
| Profit before income tax expense | | 7,269,236 | | 9,930,336 |
+----------------------------------------------------------+---+--------------+--+---------------+
| | | | | |
+----------------------------------------------------------+---+--------------+--+---------------+
| Expected tax charged based on the standard rate of | | | | |
| enterprise income tax in the PRC of 25% (2008: 25%) | | 1,817,309 | | 2,482,584 |
+----------------------------------------------------------+---+--------------+--+---------------+
| Tax exemption and concession | | (2,873,166) | | (1,710,358) |
+----------------------------------------------------------+---+--------------+--+---------------+
| Tax effect of tax losses not recognised | | 1,332,615 | | - |
+----------------------------------------------------------+---+--------------+--+---------------+
| Tax effect of non-deductible expenses | | 235,989 | | 833,176 |
+----------------------------------------------------------+---+--------------+--+---------------+
| Effect on opening deferred tax balances resulting from | | | | |
| an decrease in applicable tax rate | | 277,302 | | - |
+----------------------------------------------------------+---+--------------+--+---------------+
| Under provision in respect of prior years | | 504,799 | | - |
+----------------------------------------------------------+---+--------------+--+---------------+
| | | | | |
+----------------------------------------------------------+---+--------------+--+---------------+
| Income tax expense | | 1,294,848 | | 1,605,402 |
+----------------------------------------------------------+---+--------------+--+---------------+
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:
+----------------------------------------------------------------+--------------+--+---------------+
| | 6 months | | 6 months |
| | ended 30 | | ended 30 |
| | June 2009 | | June 2008 |
+----------------------------------------------------------------+--------------+--+---------------+
| | (unaudited) | | (unaudited) |
+----------------------------------------------------------------+--------------+--+---------------+
| Earnings | RMB | | RMB |
+----------------------------------------------------------------+--------------+--+---------------+
| | | | |
+----------------------------------------------------------------+--------------+--+---------------+
| Earnings for the purpose of basic earnings per share | | | |
| | 5,981,655 | | 8,340,213 |
+----------------------------------------------------------------+--------------+--+---------------+
| Effect of dilutive potential ordinary shares | | | |
| | - | | - |
+----------------------------------------------------------------+--------------+--+---------------+
| | | | |
+----------------------------------------------------------------+--------------+--+---------------+
| Earnings for the purpose of diluted earnings per share | 5,981,655 | | 8,340,213 |
+----------------------------------------------------------------+--------------+--+---------------+
| | | | |
+----------------------------------------------------------------+--------------+--+---------------+
| 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 purpose of | 45,411,765 | | 45,411,765 |
| diluted earnings per share | | | |
+----------------------------------------------------------------+--------------+--+---------------+
| | | | |
+----------------------------------------------------------------+--------------+--+---------------+
| Earnings per share | | | |
+----------------------------------------------------------------+--------------+--+---------------+
| | RMB | | RMB |
+----------------------------------------------------------------+--------------+--+---------------+
| Basic | 0.132 | | 0.183 |
+----------------------------------------------------------------+--------------+--+---------------+
| | | | |
+----------------------------------------------------------------+--------------+--+---------------+
| Diluted | 0.132 | | 0.183 |
+----------------------------------------------------------------+--------------+--+---------------+
The computation of diluted earnings per share for the six months ended 30 June
2009 does not assume the exercise of the Companys outstanding share options as
the exercise price of those options is higher than the average market price of
shares for the six months ended 30 June 2009.
11. PROPERTY, PLANT AND EQUIPMENT AND PAYMENTS FOR LEASEHOLD LAND HELD FOR
OWN USE UNDER OPERATING LEASES
+--------------------------------------------------------------+-+--------------+-+-----------------+
| | | 30 June | | 31 December |
| | | 2009 | | 2008 |
+--------------------------------------------------------------+-+--------------+-+-----------------+
| | | (unaudited) | | (audited) |
+--------------------------------------------------------------+-+--------------+-+-----------------+
| | | RMB | | RMB |
+--------------------------------------------------------------+-+--------------+-+-----------------+
| | | | | |
+--------------------------------------------------------------+-+--------------+-+-----------------+
| Cost | | | | |
+--------------------------------------------------------------+-+--------------+-+-----------------+
| Buildings | | 45,607,995 | | 45,607,995 |
+--------------------------------------------------------------+-+--------------+-+-----------------+
| Machineries | | 123,113,687 | | 122,396,235 |
+--------------------------------------------------------------+-+--------------+-+-----------------+
| Motor vehicles | | 1,742,546 | | 1,742,546 |
+--------------------------------------------------------------+-+--------------+-+-----------------+
| Furniture, fixtures and equipment | | 843,946 | | 827,022 |
+--------------------------------------------------------------+-+--------------+-+-----------------+
| Construction in progress | | 14,765,575 | | 11,326,524 |
+--------------------------------------------------------------+-+--------------+-+-----------------+
| | | | | |
+--------------------------------------------------------------+-+--------------+-+-----------------+
| | | 186,073,749 | | 181,900,322 |
+--------------------------------------------------------------+-+--------------+-+-----------------+
| | | | | |
+--------------------------------------------------------------+-+--------------+-+-----------------+
| Accumulated depreciation | | (22,343,154) | | (16,955,903) |
+--------------------------------------------------------------+-+--------------+-+-----------------+
| | | | | |
+--------------------------------------------------------------+-+--------------+-+-----------------+
| Net book value | | 163,730,595 | | 164,944,419 |
+--------------------------------------------------------------+-+--------------+-+-----------------+
The Group has pledged leasehold land, buildings and certain machineries having
net book values of RMB5,861,712, RMB17,928,060 and RMB57,810,642 (2008:
RMB5,933,824, RMB18,285,118 and RMB59,815,503) respectively to secure loans
granted to the Group.
+----------------------------------------------------------+-+--------------+-+-----------------+
| | | 30 June | | 31 December |
| | | 2009 | | 2008 |
+----------------------------------------------------------+-+--------------+-+-----------------+
| | | (unaudited) | | (audited) |
+----------------------------------------------------------+-+--------------+-+-----------------+
| | | RMB | | RMB |
+----------------------------------------------------------+-+--------------+-+-----------------+
| | | | | |
+----------------------------------------------------------+-+--------------+-+-----------------+
| Raw materials and consumables | | 8,558,147 | | 6,404,014 |
+----------------------------------------------------------+-+--------------+-+-----------------+
| Work-in-progress | | 3,383,226 | | 2,278,504 |
+----------------------------------------------------------+-+--------------+-+-----------------+
| Finished goods | | 7,414,305 | | 5,875,740 |
+----------------------------------------------------------+-+--------------+-+-----------------+
| | | | | |
+----------------------------------------------------------+-+--------------+-+-----------------+
| | | 19,355,678 | | 14,558,258 |
+----------------------------------------------------------+-+--------------+-+-----------------+
During the period, there was a significant increase in the net realisable value
of inventories due to recovery in economy. As a result, a reversal of write-down
of inventories of RMB3,777,013 (2008: nil) has been recognised and included in
the cost of sales in current period.
13. TRADE AND OTHER RECEIVABLES
+------------------------------------------------------------+-+--------------+-+----------------+
| | | 30 June | | 31 December |
| | | 2009 | | 2008 |
+------------------------------------------------------------+-+--------------+-+----------------+
| | | (unaudited) | | (audited) |
+------------------------------------------------------------+-+--------------+-+----------------+
| | | RMB | | RMB |
+------------------------------------------------------------+-+--------------+-+----------------+
| | | | | |
+------------------------------------------------------------+-+--------------+-+----------------+
| Trade debtors - third parties | | 2,283,951 | | 8,828,971 |
+------------------------------------------------------------+-+--------------+-+----------------+
| Trade debtors - related companies | | 1,070,879 | | 872,434 |
+------------------------------------------------------------+-+--------------+-+----------------+
| | | 3,354,830 | | 9,701,405 |
+------------------------------------------------------------+-+--------------+-+----------------+
| | | | | |
+------------------------------------------------------------+-+--------------+-+----------------+
| Notes receivable - third parties | | 2,460,657 | | 2,150,000 |
+------------------------------------------------------------+-+--------------+-+----------------+
| Deposits paid | | 485,099 | | 477,342 |
+------------------------------------------------------------+-+--------------+-+----------------+
| Prepayments | | 23,888 | | 71,810 |
+------------------------------------------------------------+-+--------------+-+----------------+
| Other receivables | | 289,216 | | 945,163 |
+------------------------------------------------------------+-+--------------+-+----------------+
| VAT receivable and refundable | | 6,321,616 | | 6,190,852 |
+------------------------------------------------------------+-+--------------+-+----------------+
| Amounts due from related companies | | 3,560,000 | | 3,560,000 |
+------------------------------------------------------------+-+--------------+-+----------------+
| Amount due from a shareholder | | 597,340 | | 156,229 |
+------------------------------------------------------------+-+--------------+-+----------------+
| | | | | |
+------------------------------------------------------------+-+--------------+-+----------------+
| | | 17,092,646 | | 23,252,801 |
+------------------------------------------------------------+-+--------------+-+----------------+
Amounts due from third parties are unsecured, interest-free and with no specific
credit terms granted.
Related company is a company in which the director has an interest. The amounts
due from related companies with non-trading nature are unsecured, interest-free
and repayable on demand. Amounts due from related companies with trading nature
are unsecured, interest-free and with no specific credit terms granted (2008: no
specific credit terms).
As at 30 June 2009, all items in trade and other receivables were denominated in
RMB (2008: RMB). The directors consider that the carrying amount of trade and
other receivables approximates their fair value.
+--------------------------------------------------------------+-+---------------+-+-----------------+
| | | 30 June | | 31 December |
| | | 2009 | | 2008 |
+--------------------------------------------------------------+-+---------------+-+-----------------+
| | | (unaudited) | | (audited) |
+--------------------------------------------------------------+-+---------------+-+-----------------+
| | | RMB | | RMB |
+--------------------------------------------------------------+-+---------------+-+-----------------+
| | | | | |
+--------------------------------------------------------------+-+---------------+-+-----------------+
| Trade creditors | | 1,106,056 | | 1,905,779 |
+--------------------------------------------------------------+-+---------------+-+-----------------+
| Deferred income | | 500,000 | | 550,000 |
+--------------------------------------------------------------+-+---------------+-+-----------------+
| Deposits received | | 2,966,810 | | 198,128 |
+--------------------------------------------------------------+-+---------------+-+-----------------+
| Payroll payable | | 502,231 | | 580,562 |
+--------------------------------------------------------------+-+---------------+-+-----------------+
| Other payables | | 1,264,717 | | 1,132,065 |
+--------------------------------------------------------------+-+---------------+-+-----------------+
| Payable to contractors for acquisition of property, plant | | 2,061,106 | | 4,899,833 |
| and equipment | | | | |
+--------------------------------------------------------------+-+---------------+-+-----------------+
| VAT payable | | 409,358 | | 274,093 |
+--------------------------------------------------------------+-+---------------+-+-----------------+
| | | | | |
+--------------------------------------------------------------+-+---------------+-+-----------------+
| | | 8,810,278 | | 9,540,460 |
+--------------------------------------------------------------+-+---------------+-+-----------------+
As at 30 June 2009, substantively all trade and other payables were denominated
in RMB (2008: RMB). The directors consider that the carrying amount of trade and
other payables approximates their fair value.
+------------------------------------------------------------+-+--------------+--+-----------------+
| | | 30 June | | 31 December |
| | | 2009 | | 2008 |
+------------------------------------------------------------+-+--------------+--+-----------------+
| | | (unaudited) | | (audited) |
+------------------------------------------------------------+-+--------------+--+-----------------+
| | | RMB | | RMB |
+------------------------------------------------------------+-+--------------+--+-----------------+
| | | | | |
+------------------------------------------------------------+-+--------------+--+-----------------+
| Bank loans | | | | |
+------------------------------------------------------------+-+--------------+--+-----------------+
| - Secured by the Groups own machineries | | 4,850,000 | | 4,850,000 |
+------------------------------------------------------------+-+--------------+--+-----------------+
| - Secured by the Groups buildings and leasehold land | | 30,000,000 | | 30,000,000 |
+------------------------------------------------------------+-+--------------+--+-----------------+
| - Guaranteed by a related company | | 3,000,000 | | 3,000,000 |
+------------------------------------------------------------+-+--------------+--+-----------------+
| - Unsecured | | - | | 500,000 |
+------------------------------------------------------------+-+--------------+--+-----------------+
| | | | | |
+------------------------------------------------------------+-+--------------+--+-----------------+
| | | 37,850,000 | | 38,350,000 |
+------------------------------------------------------------+-+--------------+--+-----------------+
| | | | | |
+------------------------------------------------------------+-+--------------+--+-----------------+
As at 30 June 2009, other financial liabilities were denominated in RMB
(2008: RMB).
During the six months ended 30 June 2009, the Group entered into the following
transactions with related parties who are not members of the Group.
+----------------------------+--------------------------+----------------+----------------+----------------+----------------+
| | Type of transactions | | |
| Entities | | | Transaction amounts |
+----------------------------+--------------------------+----------------+--------------------------------------------------+
| | | | 6 months ended | | 6 months ended |
| | | | 30 June 2009 | | 30 June 2008 |
+----------------------------+--------------------------+----------------+----------------+----------------+----------------+
| | | | (unaudited) | | (unaudited) |
+----------------------------+--------------------------+----------------+----------------+----------------+----------------+
| | | | RMB | | RMB |
+----------------------------+--------------------------+----------------+----------------+----------------+----------------+
| | | | | | |
+----------------------------+--------------------------+----------------+----------------+----------------+----------------+
| Companies in which | Purchase from the Group | | 878,900 | | 1,986,951 |
| directors or their close | | | | | |
| family members have an | | | | | |
| interest | | | | | |
+ +--------------------------+----------------+----------------+----------------+----------------+
| | | | | | |
+ +----------------------------+--------------------------+----------------+----------------+----------------+
| | Sale to the Group | | 297,111 | | 707,271 |
+----------------------------+--------------------------+----------------+----------------+----------------+----------------+
The transactions mentioned above were conducted on an arms length basis and
were at standard market prices. The Group has not made any impairment loss for
bad debts in respect of related party debts nor has any guarantee been given or
received during the current interim period regarding related party transactions.
In addition, the Groups bank loans in the amount of RMB3,000,000 as at 30 June
2009 (2008: RMB3,000,000) were guaranteed by a related company, which is
controlled by close family members of the Companys directors.
The remuneration of key management personnel, being the directors of the
Group, for the six months ended 30 June 2009 amounted to RMB650,854 (2008:
RMB1,111,215).
17. CAPITAL COMMITMENTS
As at 30 June 2009, the Groups commitments for the acquisition of property,
plant and equipment are listed as follows:
+----------------------------------------------------------+-+--------------+--+-----------------+
| | | 30 June | | 31 December |
| | | 2009 | | 2008 |
+----------------------------------------------------------+-+--------------+--+-----------------+
| | | (unaudited) | | (audited) |
+----------------------------------------------------------+-+--------------+--+-----------------+
| | | RMB | | RMB |
+----------------------------------------------------------+-+--------------+--+-----------------+
| | | | | |
+----------------------------------------------------------+-+--------------+--+-----------------+
| Contracted for but not provided | | | | |
+----------------------------------------------------------+-+--------------+--+-----------------+
| - Property, plant and equipment | | 1,345,000 | | 4,745,000 |
+----------------------------------------------------------+-+--------------+--+-----------------+
The directors do not recommend payment of dividend in respect of the first half
of 2009 (2008: RMB nil).
19. SUBSEQUENT EVENTS
In July 2009, the Group repaid the original bank borrowing of RMB30 million and
obtained a new bank borrowing of RMB16 million with a term of one year
commencing from 17 July 2009.
This information is provided by RNS
The company news service from the London Stock Exchange
END
IR SFDFWASUSESU
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