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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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RNS Number : 7196D
China Biodiesel International Hold
18 September 2008
China Biodiesel International Holding Co., Ltd. ("CBI" or "the Company")
Interim results for the period ended 30 June 2008
China Biodiesel International Holding Co., Ltd. (AIM: CBI), a leading producer of biodiesel focused on the Chinese market, announces its
interim results for the six months ended 30 June 2008.
Highlights
* Turnover up 70 per cent. to RMB 89.6 million (2007: RMB 52.7million) (RMB 1=£0.07324)
* Xiamen plant started trial production in June 2008, doubling annual capacity to 100,000 tonnes
* High-value B1 and B2 products account for 88.5 per cent. of total sales (2007: 29.4 per cent.)
* Average selling prices up 48.1 per cent. to RMB6,670.8 per ton
CBI Chairman, Huodong Ye, commented: "Although the price of feedstock in the biodiesel industry continued to rise during the first half
of 2008, the Company remained profitable thanks to strict cost controls and the shift towards a higher-value product mix. Continuing market
pressures mean the Company will face further challenges through the second half of the year, but we remain confident that following our
successes during the first six months, we are well placed to continue maintaining our profit margins as well as to deliver further
production increases. However we are aware of global financial events and the heightened volatility of the energy markets that could affect
our short term activity and results.
For further information:
Gloria He, CFO: +86 (592) 7191103
James Wang, Company Secretary: +86 (592) 7191109
Allan Piper or Lei Jiang
First City (China) Ltd: +44 (0) 207 242 2666/ +852 2854 2666
Tom Price or Bobbie Hilliam
Evolution Securities: +44 (0) 20 7071 4300
Chairman's statement
Throughout the first half of 2008, prices of vegetable oil feedstocks increased steadily, peaking in June, before falling dramatically
in July. CBI remained committed to maintaining margins in the face of challenging market conditions, primarily by sourcing cheaper feedstock
and adapting its product mix to exploit the higher value of B1 and B2 biodiesels. These are used as a substitute for petrochemical products
in the manufacturing industries, and are free of the pricing pressures imposed by government price controls on diesel fuel.
Against a background of rising fossil fuel prices, the Chinese Government acted to raise the retail price-cap imposed on diesel fuel by
RMB1,000 per ton to RMB 7,040 per ton, effective from 20 June 2008. While this has had a positive impact on China Biodiesel's revenues to a
certain extent, the shift in the product mix means that the benefits have been limited - while B3 fuel oil now represents a very small
proportion of production, the raising of the price cap has increased our transportation costs.
We are pleased to announce that the new plant in Xiamen, with an annual capacity of 50,000 tonnes, started its trial production in early
June and is now on the way to commercial production, thereby doubling the Company's annual capacity to 100,000 tonnes.
Operational Review
Our average selling prices continued their upward trend as the sales volume of B1 and B2 increased to 88.5 per cent. of our total
production, up from 34.1 per cent. in the same period of 2007. As a result, we partially offset the rising cost of feedstock and maintained
our profit margin at 8.02 per cent.
Since the end of 2007, the Company has taken several measures to cope with the higher general demand for raw material and the continuing
rise in prices. Firstly, the Company has secured more purchase volume from domestic suppliers, and secondly, many persons have been
dispatched to overseas countries, such as Indonesia, Philippines, and Malaysia, to exploit supply opportunities in those markets. Therefore,
more contracts have been signed with foreign vegetable oils refineries. The quantity of waste vegetable oils that have been purchased or
secured by overseas contracts since this June has been over 3500 metric tonnes, which will mostly serve the new Xiamen plant.
Recently, we have completed commissioning of the Xiamen plant and have already started our sales promotion programme. Although
production is still running at low levels, it is expected to increase steadily in the coming months.
Financial Review
Revenue for the six months ended 30 June 2008 increased by 70 per cent. to RMB89.5 million (2007: RMB52.7million); on sales volume up
14.78 per cent. to 13,418 tons (2007: 11,690 tons). Average selling prices rose 48.1 per cent. to RMB6,670.8 per ton (2007: RMB4,504.0 per
ton) thanks to our successful shift towards greatly increased output of B1 and B2 products.
Average feedstock prices also increased significantly, rising 59.61 per cent. to RMB5,197 per ton, (2007: RMB 3,256 per ton). Other cost
increases contributed to an overall 64.64 per cent. of the rise in our average production cost to RMB6,136 per ton (2007: RMB3,727 per
ton).
The Company's gross margin for the period was 8.02 per cent. on gross profits of RMB 7.2 million (2007: RMB 9.1million).
Capital expenditure fell dramatically during the period, following the earlier completion of the main project work on the new Xiamen
plant. Working capital efficiency improved, with trading accounts receivable down 18.25 per cent. to RMB10.3 million (2007: RMB12.60
million).
During the period, RMB14.0 million in Government grant was received by the Company (2007: RMB1.35million), of which 8.0 million was
recognized in the income statement at this stage.
The completion of the Xiamen plant led to an increase in staff levels, which together with preparatory operations ahead of the trial
production, helped contribute to a 74.5 per cent. increase in administration expenses to RMB 6.23million (2007:RMB3.57 million).
From 2008, the Longyan plant ceased to enjoy income tax exemptions and started to attract a corporate income tax rate of 12.5% (half of
the statutory rate) under Chinese tax law, resulting in RMB1.61million of income tax in this period (2007:RMB0.15 million). The Xiamen plant
is still in its income tax exemption period which will end by end of 2009.
Outlook
The challenges faced by China Biodiesel during the first half of the year have presented challenges to all of our competitors in the
industry, however we have responded and continue to respond well to these challenges and remain well placed for continued growth. With
Government price controls expected to remain in place for fuel oils, the Company will maintain its focus on the successful marketing of
higher-value B1 and B2 products used as raw material for the chemical industry, recognising the need to maximise operational efficiencies to
offset price fluctuations for those products.
Although vegetable oil feedstock prices fell dramatically in late July, carried inventories and previously contracted but still
undelivered supplies will continue to keep price pressures on the Company during the second half, even though the management still expect a
positive gross margin.
The Xiamen plant doubles the Company's annual design production capacity to 100,000 tonnes, but also brings a high depreciation cost so
that we anticipate it will be several months before the plant becomes profitable in its own right.
The company's working capital was greatly reinforced by a bank loan of RMB 30 million in July. The one-year loan at the rate of 8.96 per
cent. was provided by Chinese Industry Bank and is secured by the land-use right, building and equipment of the Xiamen plant. Accordingly,
interest costs will increase by around RM 220,000 per month from August on.
In summary, despite strong competition and demanding market conditions, we believe the Company has successfully consolidated its
position during the first half of the year, and positioned itself well to deal with future challenges. We remain confident of continued
growth. Financial statements
CHINA BIODIESEL INTERNATIONAL HOLDING CO., LTD.
CONDENSED CONSOLIDATED INCOME STATEMENT
FOR THE SIX MONTHS ENDED 30 JUNE 2008
Notes 6 months ended 6 months ended Yearended 31 December 2007
30June 2008 30June 2007
(unaudited) (unaudited) (audited)
RMB RMB RMB
Revenue 6 89,512,293 52,659,596 124,590,090
Cost of sales (82,330,709) (43,572,193) (110,841,077)
Gross profit 7,181,584 9,087,403 13,749,013
Other income 7 9,780,073 2,941,753 12,529,106
Distribution costs (413,973) (403,870) (1,015,597)
Administrative expenses (6,231,311) (3,570,573) (8,087,065)
Other operating expenses (86,747) (98,162) (144,882)
Profit from operations 10,229,626 7,956,551 17,030,575
Finance income 30,375 199,031 282,217
Finance costs (329,665) (235,846) (520,705)
Profit before income tax 9,930,336 7,919,736 16,792,087
expense
Income tax expense 9 (1,605,402) (153,078) (237,825)
Profit for the period/year 8,324,934 7,766,658 16,554,262
Attributable to:
- Equity holders of the 8,340,213 7,772,678 16,569,774
Company
- Minority interests (15,279) (6,020) (15,512)
8,324,934 7,766,658 16,554,262
Dividends 18 - - 456,089
Earnings per share 10
Basic 0.183 0.170 0.365
Diluted 0.183 0.170 0.365
CHINA BIODIESEL INTERNATIONAL HOLDING CO., LTD.
CONDENSED CONSOLIDATED BALANCE SHEET
AS AT 30 JUNE 2008
Notes 30 June2008 30 June2007 31 December 2007
(unaudited) (unaudited) (audited)
RMB RMB RMB
Assets
Non-current assets
Property, plant and equipment 11 154,412,595 114,331,603 157,359,553
Deposits for acquisition of 6,405,361 - 4,649,915
property, plant and equipment
Payments for leasehold land 14,050,531 9,100,557 8,853,858
held for own use under
operating leases
Other intangible assets 2,564 3,010 2,787
Deferred tax assets 150,000 190,649 162,500
Total non-current assets 175,021,051 123,625,819 171,028,613
Current assets
Inventories 12 23,021,737 7,476,855 8,443,232
Trade and other receivables 13 17,252,889 29,273,686 14,469,918
Cash and cash equivalents 7,722,891 37,906,325 12,462,094
Total current assets 47,997,517 74,656,866 35,375,244
Total assets 223,018,568 198,282,685 206,403,857
Liabilities
Current liabilities
Trade and other payables 14 24,822,914 18,020,521 17,067,159
Current tax liabilities 2,493,781 1,600,730 1,567,078
Other financial liabilities 15 8,657,007 7,510,091 8,115,859
Total current liabilities 35,973,702 27,131,342 26,750,096
Non-current liabilities
Other financial liabilities 15 - 447,019 500,000
Total liabilities 35,973,702 27,578,361 27,250,096
35
NET ASSETS 187,044,866 170,704,324 179,153,761
CHINA BIODIESEL INTERNATIONAL HOLDING CO., LTD.
CONDENSED CONSOLIDATED BALANCE SHEET (CONTINUED)
AS AT 30 JUNE 2008
Notes 30 June2008 30 June2007 31 December 2007
(unaudited) (unaudited) (audited)
RMB RMB RMB
Capital and reserves
attributable toequity holders
of the Company
Share capital 3,632,941 3,632,941 3,632,941
Reserves 183,122,684 166,757,371 175,216,300
Equity attributable to equity 186,755,625 170,390,312 178,849,241
holders of the Company
Minority interests 289,241 314,012 304,520
TOTAL EQUITY 187,044,866 170,704,324 179,153,761
CHINA BIODIESEL INTERNATIONAL HOLDING CO., LTD.
CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
FOR THE SIX MONTHS ENDED 30 JUNE 2008
Equity attributable to equity holders of the Company
Sharecapital Sharepremium Contributed surplus Foreign exchange Share option reserve
Merger reserve Generalreserve Dividends Retained earnings Sub-total Minority interests Total
reserve
RMB RMB RMB RMB RMB
RMB RMB RMB RMB RMB RMB RMB
At 1 January 2008 (Audited) 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
Effect from translation of - - - 22,260 -
- - - - 22,260 - 22,260
functional currency to
presentation currency
Net income recognised directly - - - 22,260 -
- - - - 22,260 - 22,260
in equity
Profit/(loss) for the period - - - - -
- - - 8,340,213 8,340,213 (15,279) 8,324,934
Total recognised income and - - - 22,260 -
- - - 8,340,213 8,362,473 (15,279) 8,347,194
expenses
Provision for general reserve - - - - -
- 1,231,917 - (1,231,917) - - -
Dividend declared - - - - -
- - (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 (Unaudited) 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
At 1 January 2007 (Audited) 3,632,941 90,572,623 5,047,816 (1,307,048) 2,229,427
(121,330) 6,273,540 1,020,019 56,462,536 163,810,524 320,032 164,130,556
Effect from translation of - - - (172,871) -
- - - - (172,871) - (172,871)
functional currency to
presentation currency
Net income recognised directly - - - (172,871) -
- - - - (172,871) - (172,871)
in equity
Profit/(loss) for the period - - - - -
- - - 7,772,678 7,772,678 (6,020) 7,766,658
Total recognised income and - - - (172,871) -
- - - 7,772,678 7,599,807 (6,020) 7,593,787
expenses
Provision for general reserve - - - - -
- 1,034,504 - (1,034,504) - - -
Dividend distribution - - - - -
- - (1,020,019) - (1,020,019) - (1,020,019)
- - - (172,871) -
- 1,034,504 (1,020,019) 6,738,174 6,579,788 (6,020) 6,573,768
At 30 June 2007 (Unaudited) 3,632,941 90,572,623 5,047,816 (1,479,919) 2,229,427
(121,330) 7,308,044 - 63,200,710 170,390,312 314,012 170,704,324
CHINA BIODIESEL INTERNATIONAL HOLDING CO., LTD.
CONDENSED CONSOLIDATED CASH FLOW STATEMENT
FOR THE SIX MONTHS ENDED 30 JUNE 2008
Notes 6 months ended 30 6 months ended Yearended 31
June 2008 30June 2007 December 2007
(unaudited) (unaudited) (audited)
RMB RMB RMB
Net cash flows from operating 7,181,928 8,171,268 32,996,695
activities
Net cash flows used in (11,654,874) (39,178,448) (89,483,829)
investing activities
Netcash flows from/(used in) (288,517) (240,003) 133,887
financing activities
Net decrease in cash and cash (4,761,463) (31,247,183) (56,353,247)
equivalents
Cash and cash equivalents at 12,462,094 69,326,379 69,326,379
beginning of period/year
Effect of foreign exchange 22,260 (172,871) (511,038)
rate changes
Cash and cash equivalents at 7,722,891 37,906,325 12,462,094
end of period/year
NOTES TO THE CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS
1 GENERAL
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 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
People's Republic of China (the "PRC"). The Group's principal places of business are at Longyan and Xiamen, both cities are located in the
Fujian Province, the PRC.
The condensed consolidated financial statements are presented in Renminbi ("RMB") instead of Hong Kong dollars, which is the functional
currency of the Company. The adoption of RMB as presentation currency of the Group is due to the fact that most of the Group's business
transactions are conducted in RMB.
2. BASIS OF PREPARATION AND ACCOUNTING POLICIES
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").
These Interim Financial Statements should be read in conjunction with the consolidated financial statements for the year ended 31 December
2007 (hereafter the "Annual Financial Statements"), as they provide an update of previously reported information.
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. During the period, the Group revised the estimated useful lives of certain property,
plant and equipment, the details and effect of the change are disclosed in note 11.
In the current period, the Group has also applied, for the first time, the following new interpretations issued by the IASB that are
effective for the current accounting period.
IFRIC-Int 11 IFRS 2 - Group and Treasury Share Transactions
IFRIC-Int 12 Service Concession Arrangements
IFRIC-Int 14 IAS 19 - The Limit on a Defined Benefit Asset, Minimum Funding Requirements and their Interaction
The adoption of these new interpretations has had no material effect on the Group's condensed consolidated financial statements for the
six months ended 30 June 2008.
3. POTENTIAL IMPACT ARISING ON THE NEW ACCOUNTING STANDARDS NOT YET EFFECTIVE
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.
IAS 23 Revised * Borrowing Effective for annual
costs periods beginning on
or after 1 January
2009
Amendments to IAS 32 and IAS 1 Effective for annual
* Puttable Financial periods beginning on
Instruments and Obligations or after 1 January
Arising on Liquidation 2009
IAS 1 Revised * Presentation Effective for annual
of Financial Statements periods beginning on
or after 1 January
2009
IAS 27 Revised * Consolidated Effective for annual
and Separate Financial periods beginning on
Statements or after 1 July 2009
IAS 39 Amendment * Eligible Effective for annual
Hedged Items periods beginning on
or after 1 July 2009
Amendments to IFRS 1 and IAS Effective for annual
27 * Cost of an Investment in periods beginning on
a Subsidiary, Jointly or after 1 January
Controlled Entity or Associate 2009
IFRS 2 Amendment * Share-based Effective for annual
Payments * Vesting Conditions periods beginning on
and Cancellations or after 1 January
2009
IFRS 3 Revised * Business Effective for annual
Combination periods beginning on
or after 1 July 2009
IFRS 8 * Operating segments Effective for annual
periods beginning on
or after 1 January
2009
IFRIC Interpretation 13 * Effective for annual
Customer Loyalty Arrangements periods beginning on
or after 1 July 2008
IFRIC Interpretation 15 * Effective for annual
Agreements for the periods beginning on
Construction of Real Estate or after 1 January
2009
IFRIC Interpretation 16 * Effective for annual
Hedges of a Net Investment in periods beginning on
a Foreign Operation or after 1 October
2008
4. SUBSIDIARIES
The subsidiaries of the Company, which have been included in the Interim Financial Statements, are as follows:
Name Place Date of Principal Proportion of
ofincorporationand incorporation activities ownership interest
operations
Longyan Zhuoyue New Energy Longyan, 1 November 2001 Manufacturing and 100%
Development Co., Limited FujianProvince,the sale of biodiesel
(*LZNE*) PRC products
Longyan Zhuoyue Biodiesel Longyan, 21 April2005 Development of 90%
Technology Development Co., FujianProvince,the biodiesel
Limited (*ZBTD*) PRC technology,
provision of
technology
consultancy and
transfer of
technology in
respect of
production of
biodiesel products
Xiamen Zhuoyue Bio-mass Energy Xiamen, 17 August 2006 Manufacturing and 100%
Co., Limited (*XZBM*) FujianProvince,the sale of biodiesel
PRC products
Longyan Zhuoyue Bio-mass Longyan, 28 February 2007 Manufacturing and 100%
Energy Co., Limited (*LYBM*) FujianProvince,the sale of biodiesel
PRC products
5. SEGMENT INFORMATION
No primary reporting format for reporting segment information is shown as significant portion of the business is related to the sale of
biodiesel products. All revenues were generated from continuing operation.
No secondary reporting format for reporting segment information is shown as significant portion of products are sold and services are
rendered to customers in the PRC.
6. TURNOVER
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/year are as follows:
6 months ended 6 months ended Yearended 31 December 2007
30June 2008 30June 2007
(unaudited) (unaudited) (audited)
RMB RMB RMB
Revenue arises from:
Saleof biodiesel products 89,462,293 52,609,596 124,490,090
Provision of technology 50,000 50,000 100,000
services and others
89,512,293 52,659,596 124,590,090
7. OTHER INCOME
6 months ended 6 months ended Yearended 31 December 2007
30June 2008 30June 2007
(unaudited) (unaudited) (audited)
RMB RMB RMB
Income from sale of used 1,760,073 1,591,753 3,949,106
packaging materials
Government grants (note 8) 8,020,000 1,350,000 8,580,000
9,780,073 2,941,753 12,529,106
8. GOVERNMENT GRANTS
Government grants represented the financial support and rewards received from relevant government authorities in connection with the
Group's production of biodiesel products.
9. INCOME TAX EXPENSE
The Company itself did not generate any taxable profit during the period. In the opinion of the management, the Company is not subject
to income tax in the PRC or the BVI.
Current tax expense of the Group represented the PRC Income Tax Expense calculated at the standard income tax rate or preferential
income tax rate on the assessable income. From 1 January 2008, the statutory income tax rate in the PRC changed from 33% to 25%.
The income tax expense during the period/year can be reconciled to profit per condensed consolidated income statement as follows:
6 months ended 6 months ended Yearended 31
30June 2008 30June 2007 December 2007
(unaudited) (unaudited) (audited)
RMB RMB RMB
Profit before income tax 9,930,336 7,919,736 16,792,087
expense
Expected tax charged based on 2,482,584 2,613,513 5,541,389
the standard rate of
enterprise income tax in the
PRC of 25% (2007: 33%)
Tax exemption and concession (1,710,358) (3,322,357) (5,847,468)
Tax effect of non-deductible 833,176 730,392 532,255
expenses
Effect of difference between - 131,530 11,649
standard rate and expected
rate at realisation of
temporary differences
Income tax expense 1,605,402 153,078 237,825
10. 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:
6 months ended 6 months ended Yearended 31
30June 2008 30June 2007 December 2007
(unaudited) (unaudited) (audited)
Earnings RMB RMB RMB
Earnings for the purpose of 8,340,213 7,772,678 16,569,774
basic earnings per share
Effect of dilutive potential - - -
ordinary shares
Earnings for the purpose of 8,340,213 7,772,678 16,569,774
diluted earnings per share
Number of shares
Weighted average number of 45,411,765 45,411,765 45,411,765
ordinary shares for the
purpose of basic earnings per
share
Effect of dilutive potential
ordinary shares:
- share options - 74,665 -
Weighted average number of 45,411,765 45,486,430 45,411,765
ordinary shares for thepurpose
of diluted earnings per share
Earnings per share
RMB RMB RMB
Basic 0.183 0.170 0.365
Diluted 0.183 0.170 0.365
The computation of diluted earnings per share for the six months ended 30 June 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 of shares for the six months ended
30 June 2008.
11. PROPERTY, PLANT AND EQUIPMENT
30 June2008 30 June2007 31 December 2007
(unaudited) (unaudited) (audited)
RMB RMB RMB
Cost
Buildings 44,176,400 3,057,216 42,797,284
Machineries 117,543,708 25,991,000 114,645,582
Motor vehicles 1,742,546 1,486,609 1,742,546
Furniture, fixtures and 837,270 332,025 361,783
equipment
Construction in progress 1,747,252 89,150,921 6,343,841
166,047,176 120,017,771 165,891,036
Accumulated depreciation (11,634,581) (5,686,168) (8,531,483)
Net book value 154,412,595 114,331,603 157,359,553
The cost of construction in progress as at 30 June 2008 represented the accumulative expenditures incurred on the construction of the
new plants and production facilities located at Longyan and Xiamen, which were still under construction at the balance sheet date.
As at 30 June 2008, the net carrying amount of machineries pledged as security for bank loan of RMB4,850,000 (31 December 2007:
RMB4,850,000) amounted to RMB12,558,824 (31 December 2007: RMB13,278,087).
During the six months ended 30 June 2008, the Group reviewed the current condition of certain property, plant and equipment, as a
result, revised the estimated useful lives of (a) buildings with steel frame structure from 20 years to 30 years; (b) dynamic machineries
acquired for the newly established production lines from 10 years to 5 years; and (c) machineries of static ones from 10 years to 15 years.
The effect of the change in the estimated useful lives has been recognised prospectively with the effect of reducing depreciation charge of
RMB425,701 in the current period.
12. INVENTORIES
30 June2008 30 June2007 31 December 2007
(unaudited) (unaudited) (audited)
RMB RMB RMB
Raw materials and consumables 15,478,705 5,944,002 4,474,668
Work-in-progress 2,982,005 735,142 2,177,817
Finished goods 4,561,027 797,711 1,790,747
23,021,737 7,476,855 8,443,232
13. TRADE AND OTHER RECEIVABLES
30 June2008 30 June2007 31 December 2007
(unaudited) (unaudited) (audited)
RMB RMB RMB
Trade debtors - third parties 9,242,506 25,720,161 12,030,154
Notes receivables - third 500,000 - -
parties
Trade debtors - related 562,324 1,296,827 565,099
companies
Deposit paid 4,905,277 402,254 1,097,626
Prepayments 52,736 14,410 137,177
Other receivables 590,046 320,014 579,862
Amount due from related 1,400,000 1,500,000 60,000
companies
Amount due from an equity - 20,020 -
holder
17,252,889 29,273,686 14,469,918
Amounts due from related companies with non-trading nature and equity holder are unsecured, interest free and repayable on demand.
Amounts due from related companies with trading nature are unsecured, interest free and with credit term of 60 days.
As at 30 June 2008, all items in trade and other receivables were denominated in RMB (31 December 2007: RMB). The directors consider
that the carrying amount of trade and other receivables approximates their fair value.
14. TRADE AND OTHER PAYABLES
30 June2008 30 June2007 31 December 2007
(unaudited) (unaudited) (audited)
RMB RMB RMB
Trade creditors 3,897,631 2,049,821 1,932,710
Deferred income 6,600,000 700,000 650,000
Deposit received 2,231,853 413,177 680,666
Payroll payable 416,443 172,505 277,154
Other payables 1,548,607 566,958 786,482
Payable to contractors for 8,736,225 13,379,023 11,968,476
acquisition of equipment
Dividend payable 456,089 - -
Value-added tax payable 936,066 739,037 771,671
24,822,914 18,020,521 17,067,159
As at 30 June 2008, substantively all trade and other payables were denominated in RMB (31 December 2007: RMB). The directors consider
that the carrying amount of trade and other payables approximates their fair value.
Included in deferred income is an amount of RMB6,000,000, which represented part of government rewards received by XZBM during the
period for the energy XZBM planned to save through the production of biodiesel, a substitution of fossil diesel, within 1 year since
commencement of formal production.
15. OTHER FINANCIAL LIABILITIES
30 June2008 30 June2007 31 December 2007
(unaudited) (unaudited) (audited)
RMB RMB RMB
Other financial liabilities -
current
Bank loans due within one year
- Secured by the Group*s own 4,850,000 3,000,000 4,850,000
machineries
- Guaranteed by a related 3,000,000 3,000,000 3,000,000
company
- Unsecured 700,000 490,072 200,000
8,550,000 6,490,072 8,050,000
Amount due to a related party - - 60,000
Amount due to an equity holder 107,007 - 5,859
Dividend payable - 1,020,019 -
8,657,007 7,510,091 8,115,859
Other financial liabilities -
non-current
Bank loans due over one year - 447,019 500,000
(unsecured)
As at 30 June 2008, other financial liabilities were denominated in RMB (31 December 2007: RMB).
16. RELATED PARTIES TRANSACTIONS
During the six months ended 30 June 2008, the Group entered into the following transactions with related parties who are not members of
the Group.
Entities Type of transactions Transaction amounts
6 months ended 30 6 months ended 30 Yearended 31
June 2008 June 2007 December 2007
(unaudited) (unaudited) (audited)
RMB RMB RMB
Companies in which directors Purchase from the 1,986,951 1,755,428 3,385,225
or their close family members Group
have an interest
Sales to the Group 707,271 124,480 508,038
16. RELATED PARTIES TRANSACTIONS - Continued
The transactions mentioned above were conducted on an arm's 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 Group's bank loans in the amount of RMB3,000,000 as at 30 June 2008 (31 December 2007: RMB3,000,000) were guaranteed by
a related company, which is controlled by close family members of the Company's directors.
Management considers that the directors of the Company are key management of the Group. The directors' emoluments for the six months
ended 30 June 2008 were RMB1,111,215 (2007: RMB1,230,720)
17. CAPITAL COMMITMENTS
As at 30 June 2008, the Group's commitments for the acquisition of property, plant and equipment are listed as follows:
30 June2008 30 June2007 31 December 2007
(unaudited) (unaudited) (audited)
RMB RMB RMB
Contracted for but not
provided
- Purchase of equipment 4,745,000 18,902,861 4,946,027
18. DIVIDENDS
The Annual General Meeting of the Company held on 4 June 2008 has resolved to declare a final dividend of RMB0.0365 per ordinary share
for the year ended 31 December 2007 with the waive of the dividend entitlements by Mr. Yehuodong, the major shareholder and the Chairman of
the Board of Directors of the Company.
The directors do not recommend payment of a dividend in respect of the first half of 2008.
19. SUBSEQUENT EVENT
Pursuant to the circular No. 117 Caishui [2008] dated on 28 August 2008 issued by the State Administration of Taxation and the
Enterprise Income Tax Law effective 1 January 2008, the PRC subsidiaries of the Company are qualified to a preferential enterprise income
tax policy under which 10% of revenue generated from sale of biodiesel produced from waste oils will be exempted from enterprise income tax,
subject to the approval from designated tax authority.
This information is provided by RNS
The company news service from the London Stock Exchange
END
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