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Share Name | Share Symbol | Market | Type | Share ISIN | Share Description |
---|---|---|---|---|---|
China Med | LSE:CMDS | London | Ordinary Share | SG9999002489 | ORD NPV (DI) |
Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
---|---|---|---|---|---|---|---|---|---|---|
0.00 | 0.00% | 57.00 | 0.00 | 01:00:00 |
Industry Sector | Turnover | Profit | EPS - Basic | PE Ratio | Market Cap |
---|---|---|---|---|---|
0 | 0 | N/A | 0 |
China Medstar Limited Preliminary results for the year to 31 December 2007 China Medstar Limited ("Medstar" or the "Company") is a specialist healthcare provider of radiotherapy and diagnostic equipment for the diagnosis and treatment of cancer to hospitals in China. The Company enables first rate medical care to be provided through the provision of financing, equipment and support services to First Tier hospitals in China. Through their profit sharing operating leases, the Company currently operates 23 medical centres in 14 cities. Highlights * Revenue from the leasing business increased 17.9% to RMB 69.3m (2006: RMB 58.8m) * Profit before Tax increasing 59% to RMB 19,275,068 (2006: RMB 12,115,766) * Of the agreements signed during 2007, Medstar has opened 7 diagnostic centres and 3 more are scheduled to be operational by the first half of 2008 + As a result, Medstar is now concentrating more on MRI and PET-CT centres, where these imaging machines serve as a key cancer diagnostic tool * Offer for the Company at 62 pence per ordinary share 20 June 2008 Dr Cheng Zheng, Chairman and CEO commented: "Whilst overall revenues declined in the year, I believe the business rationale and investment case for Medstar remains strong. There is a huge unmet need in China for cancer diagnosis and treatment and we see ourselves as being central to the solution. "The takeover offer by Ascendium which came at a significant premium to the prevailing shareprice at the time the offer was announced, recognises the true future value of Medstar. I am delighted with the turn of events and look forward to a long term future with the enlarged company." Enquiries: China Medstar Ltd Tel: +86 (10) 5825-6867 Dr Cheng Zheng, Chairman and CEO/ Yap Yaw Kong, CFO Evolution Securities Tel: +44 (0) 20 7071 4300 Tom Price/Bobbie Hilliam Haggie Financial LLP Tel: +44 (0) 20 7417 8989 Nicholas Nelson/Kathy Boate Chairman and Chief Executive Officer's Statement As detailed in the Review of Operations below, there were two key factors which led to the 2007 results being below the expectations we set out at the beginning of the financial year. Firstly, slippage in the sale of two pieces of equipment into 2008 and secondly, ongoing contract discussions with a major hospital meant that these revenues could not be included in today's results. While Group revenues fell slightly to RMB 76,497,110 (2006: RMB 80,153,583), revenue from the leasing business increased 17.9% to RMB 69.3m (2006: RMB 58.8m). The Group maintained good margins, with Profit before Tax increasing 59% to RMB 19,275,068 (2006: RMB 12,115,766), in line with management expectations. This is encouraging for the Company considering the difficulties of the past year. A cost control programme implemented to monitor rising operating and administrative expenses has resulted in maintaining costs at RMB 20,873,344 (2006: RMB 11,274,106), which is still above levels that management would like. Business Summary Medstar provides specialist diagnostic and radiotherapy equipment for the treatment and diagnosis of cancer to medical centres in Chinese hospitals. China's principal health crisis centres on the adequate treatment of the high levels of the population affected by cancer, which accounts for the majority of health-related deaths. It is thought that the pollution effects of rapid urbanisation, together with an unhealthy adoption of western lifestyle and eating habits, a lack of screening and proper equipment are the underlying reasons. In the population, rates of certain cancers such as breast, stomach, lung, liver and cervical cancers, have increased dramatically in the last two decades. Chinese hospitals are struggling to meet this demand and most are unable to purchase specialist technology based on their current government funding and then locate suitably trained staff to operate the equipment. The Company's business model of leasing radiotherapy and diagnostic equipment based on profit-sharing leasing agreements allows hospitals to open state of the art diagnostic and treatment centres with full operational support. Medstar is also actively engaged in equipment sales through its Trading Division and has strategic agreements in place with high end suppliers to sell their products. Considering the number of hospitals in China without the necessary resources to help treat the alarming number of cancer patients across the population, coupled with Medstar's attractive leasing agreements and first rate equipment, the Directors maintain a strong belief in the Company's modus operandi. Review of Operations Cancer Diagnostic and Treatment Centres With the constant struggle to find sufficient funding for large pieces of equipment, hospitals will, in the Directors' belief, continue to turn to Medstar as an economical means to establish fully functioning treatment centres. While the Company does not directly engage in the provision of medical services, it provides training for the hospital staff and maintains a close working relationship with management to ensure that the centre is run efficiently and properly. The leasing and profit sharing agreements are the main source of revenue for the Company, with hospitals keen to take part due to the high costs of equipment - which Medstar can acquire at a discount due to bulk purchases from suppliers. Medstar currently operates 23 diagnostic imaging and cancer treatment centres in China, which include 10 diagnostic centres (including 1 PET-CT and 1 ECT Centre), 10 radiotherapy treatment centres and 3 other centre such as Ophthalmic Centre, High Intensity Focused Ultrasound ("HIFU") and Leksell Knife centre for the treatment of Parkinson's disease. Of the agreements signed during 2007, Medstar has opened 7 diagnostic centres and 3 more are schedule to be operational by the first half of 2008. As a result, Medstar is now concentrating more on MRI and PET-CT centres, where these imaging machines serve as a key cancer diagnostic tool. As previously reported on the 5th February talks remain ongoing with a large existing treatment centre in relation to the terms of a key contract. The Company will be unable to recognise revenue from this contract until an agreement is formalised and shareholders will be updated as appropriate. In November 2007 Medstar was granted a Finance Lease Licence from the Chinese Government, which enables it to provide more funding options to hospitals eager to enter into partnership with the Company. This licence enables the Company to offer both short and long term finance leases and to seek out further business opportunities in the financing market. Equipment Sales The Trading Division, which sells radiotherapy and other equipment to hospitals, had a difficult year, as there was a lengthy delay in a key equipment sale that was to be recognised in the first half of the year. This was eventually completed in November, adding to the second half bias of the year's earnings. The sale of a GE 64CT scanner plus ancillary equipment to a General Hospital in Luoyang, Henan Province, was delayed in light of the hospital obtaining the necessary government permits for the scanner. In addition, two more equipment sales which had been anticipated for the final quarter of 2007 were not completed, with one of them now to be finalised in the 2nd Quarter of 2008. The strategic agreement with General Electric ("GE") Healthcare China allows for distribution of the latest HDe 1.5T MRI scanner through China, and the Company has now become one of the largest buyers of MRIs from GE. The Directors see further benefits from this relationship in terms of an increased profile, collaborations and business opportunities with new centres. In addition to GE agreement, the Company also has one with Toshiba China, signed in 2007 for the distribution and leasing of its various imaging products. Dividend The Company does not intend to pay a dividend for the year ended 31 December 2007. Offer for the Company The Company announced on 4 June 2008 that it had agreed to a recommended offer for the Company by Ascendium Group Limited valuing the Company at £17.1million. This represents a premium of approximately 96.8 per cent. to the Medstar closing price of 31.5 pence on 1 May 2008 (being the last business day immediately prior to the announcement by Medstar that it was in discussions which may or may not lead to a recommended offer for Medstar) and approximately 93.4 per cent. to the average price for one month to the same date of 32.1 pence per Medstar share. The offer is conditional upon valid acceptances being received (and not, where permitted) withdrawn in respect of not less than 75 per cent. (or such lesser percentage as Ascendium Group Limited may decide but being more than 50 per cent) in nominal value of the Medstar shares to which the offer relates. The offer is conditional upon Ascendium Group Limited receiving valid acceptance in respect of not less than 75 per cent. (or such lower percentage as the Offeror may decide) in nominal value of the offer shares and upon the Medstar shareholders approving the relevant resolutions at a Medstar general meeting to cancel the listing on AIM and to re-register the Company as a private limited company. The general meeting is to take place on 27 June 2008 and an announcement will be made updating shareholders on the result of this meeting. Subject to the Ascendium Group Limited receiving valid acceptance in respect of not less than 75 per cent. under the AIM Rules for Companies, the cancellation can take five business days following the general meeting. Assuming that more than 75% of Shareholders accept the offer and the resolutions are passed by not less than 75 per cent. of the Shareholders, it is proposed that the cancellation will take place on or around 7 July 2008. Dr. Cheng Zheng Chairman and CEO 19 June 2008 CHINA MEDSTAR LIMITED AND ITS SUBSIDIARIES CONSOLIDATED INCOME STATEMENT FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2007 Note 2007 2006 RMB RMB Revenue 1 76,497,110 80,153,583 Cost of sales (32,239,397) (37,609,236) ------------ ------------ Gross profit 44,257,713 42,544,347 Other income 2,845,198 3,591,149 Other expenses (413,000) (17,270,684) Selling and distribution expenses (1,374,962) (912,567) General and administrative expenses (20,873,344) (11,274,106) Finance costs 2 (5,166,537) (4,562,373) ------------ ------------ Profit before income tax 19,275,068 12,115,766 Income tax expense (4,553,191) (4,490,566) ------------ ------------ Profit for the financial year 14,721,877 7,625,200 ============ ============ Profit attributable to: 14,892,748 7,625,200 Equity holders of the Company Minority interest (170,871) - ------------ ------------ 14,721,877 7,625,200 ============ ============ Earnings per share (RMB) 3 Basic 0.54 0.57 ============ ============ Diluted 0.54 0.57 ============ ============ CHINA MEDSTAR LIMITED AND ITS SUBSIDIARIES BALANCE SHEETS AS AT 31 DECEMBER 2007 Group Company Note 2007 2006 2007 2006 RMB RMB RMB RMB ASSETS Non-current assets Property, plant and 218,072,072 148,320,470 - 3,559 equipment Intangible asset 124,091 158,721 - - Investments in - - 104,044,169 77,319,635 subsidiaries Deferred tax assets 2,277,259 1,322,238 - - Trade and other 12,988,588 16,271,557 - - receivables ------------ ------------ ------------ ------------ 233,462,010 166,072,986 104,044,169 77,323,194 ------------ ------------ ------------ ------------ Current assets Inventories 2,742,501 310,018 - - Trade and other 29,379,922 19,563,546 10,025 1,070,560 receivables Advances to suppliers 59,504,402 53,883,349 - 533,924 and prepayments Cash and cash 4 30,137,511 62,830,899 388,564 34,327,219 equivalents ------------ ------------ ------------ ------------ 121,764,336 136,587,812 398,589 35,931,703 ------------ ------------ ------------ ------------ Total assets 355,226,346 302,660,798 104,442,758 113,254,897 ============ ============ ============ ============ EQUITY AND LIABILITIES Capital and reserves attributable to equity holders of the Company Share capital 126,477,963 126,477,963 126,477,963 126,477,963 Statutory reserves 8,706,725 6,188,583 - - Other reserve 17,450,811 17,450,811 - - Share options reserve 2,049,702 158,142 2,049,702 158,142 Translation reserve 1,757,728 1,757,728 810,890 810,890 Accumulated profits/ 48,744,456 36,369,850 (29,512,218) (19,542,131) (losses) ------------ ------------ ------------ ------------ Equity attributable 205,187,385 188,403,077 99,826,337 107,904,864 to equity holders of the Company Minority interests 2,179,129 - - - ------------ ------------ ------------ ------------ 207,366,514 188,403,077 99,826,337 107,904,864 ------------ ------------ ------------ ------------ Non-current liabilities Bank loans 5 89,600,000 27,257,500 - - Trade and other 6 1,894,915 1,772,108 - - payables ------------ ------------ ------------ ------------ 91,494,915 29,029,608 - - ------------ ------------ ------------ ------------ Current liabilities Trade and other 16,461,584 20,527,581 4,462,841 5,350,033 payables Provision for staff 97,983 250,176 - - welfare benefit Income tax 4,482,653 3,476,248 - - liabilities Other tax liabilities 1,200,197 2,224,108 153,580 - Bank loans 5 34,122,500 58,750,000 - - ------------ ------------ ------------ ------------ 56,364,917 85,228,113 4,616,421 5,350,033 ------------ ------------ ------------ ------------ Total equity and 355,226,346 302,660,798 104,442,758 113,254,897 liabilities =========== =========== =========== =========== CHINA MEDSTAR LIMITED AND ITS SUBSIDIARIES CONSOLIDATED STATEMENT OF CHANGES IN EQUITY FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2007 Attributable to equity holders of the Company Note Share Statu- Other Share Trans- Accum- Total Minority Total capital tory reserve options lation ulated Interests Equity reserves reserve reserve profits RMB RMB RMB RMB RMB RMB RMB RMB RMB Balance 502,513 3,676,506 17,450,811 - 1,544,133 31,256,727 54,430,690 - 54,430,690 as at 1 January 2006 Trans- - - - - 213,595 - 213,595 - 213,595 lation difference Net - - - - 213,595 - 213,595 - 213,595 income recognised directly in equity Profit - - - - - 7,625,200 7,625,200 - 7,625,200 for the financial year Total - - - - 213,595 7,625,200 7,838,795 - 7,838,795 recognised income and expense Issue of 94,024,467 - - - - - 94,024,467 - 94,024,467 share capital during the financial year Conversion 39,800,932 - - - - - 39,800,932 - 39,800,932 of preference shares to ordinary shares Transfer - 2,512,077 - - - (2,512,077) - - - to statutory reserves Share (7,849,949) - - - - - (7,849,949) - (7,849,949) issue expenses Share - - - 158,142 - - 158,142 - 158,142 options expense Balance 126,477,963 6,188,583 17,450,811 158,142 1,757,728 36,369,850 188,403,077 - 188,403,077 as at 31 December 2006 Balance 126,477,963 6,188,583 17,450,811 158,142 1,757,728 36,369,850 188,403,077 - 188,403,077 as at 1 January 2007 Profit - - - - - 14,892,748 14,892,748 (170,871) 14,721,877 for the financial year Total - - - - - 14,892,748 14,892,748 (170,871) 14,721,877 recognised income and expense Transfer - 2,518,142 - - - (2,518,142) - - - to statutory reserves Acquisition - - - - - - 2,350,000 2,350,000 of subsidiary Share 26 - - - 1,891,560 - - 1,891,560 - 1,891,560 options expense Balance 126,477,963 8,706,725 17,450,811 2,049,702 1,757,728 48,744,456 205,187,385 2,179,129 207,366,514 as at 31 December 2007 CHINA MEDSTAR LIMITED AND ITS SUBSIDIARIES CONSOLIDATED CASH FLOW STATEMENT FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2007 Note 2007 2006 RMB RMB Cash flows from operating activities Profit before income tax 19,275,068 12,115,766 Adjustments for: Depreciation of property, plant and equipment 23,792,845 18,963,275 Exchange loss arising from conversion of - 965,956 Redeemable Convertible Preference Shares Intangible asset amortisation 34,630 14,429 Interest income (1,331,198) (108,718) Interest expense 5,166,537 4,562,373 Loss on disposal of plant and equipment 408,000 - Share options expense 1,891,560 158,142 Provision for staff welfare benefit 125,907 125,604 ------------ ------------ 49,363,349 36,796,827 Inventories (2,432,483) 582,743 Trade and other receivables (6,533,407) (25,801,572) Advances to suppliers and prepayments (5,621,053) (31,355,349) Trade and other payables (4,967,101) 9,192,226 Utilisation of provision of staff welfare (278,100) (302,128) benefit ------------ ------------ Cash generated from/(used in) operating 29,531,205 (10,887,253) activities Interest income 1,331,198 108,718 Income tax paid (4,501,807) (3,687,171) ------------ ------------ Net cash generated from/(used in) operating 26,360,596 (14,465,706) activities ------------ ------------ Cash flows from investing activities Purchase of plant and equipment (94,110,262) (35,592,680) Purchase of intangible asset - (173,150) Cash deposits pledged with a bank 17,524,051 (17,524,051) Proceeds from disposal of plant and equipment 157,815 - ------------ ------------ Net cash used in investing activities (76,428,396) (53,289,881) ------------ ------------ Cash flows from financing activities Proceeds from issue of share capital - 94,024,467 Share issue expenses paid - (7,849,949) Contribution from minority shareholders 2,350,000 - Proceeds from bank loans 165,996,250 44,410,000 Repayment of bank loans (128,281,250) (28,052,500) Interest paid (5,166,537) (4,562,373) ------------ ------------ Net cash generated from financing activities 34,898,463 97,969,645 ------------ ------------ Net change in cash and cash equivalents (15,169,337) 30,214,058 Cash and cash equivalents at beginning of 45,306,848 14,879,195 financial year ------------ ------------ Exchange differences on cash and cash - 213,595 equivalents ------------ ------------ Cash and cash equivalents at end of financial 4 30,137,511 45,306,848 year ============ ============ CHINA MEDSTAR LIMITED AND ITS SUBSIDIARIES NOTES TO THE FINANCIAL STATEMENTS FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2007 1. Revenue Group 2007 2006 RMB RMB Equipment leasing (rendering of service) 69,298,581 58,811,736 Sale of goods 10,681,420. 24,107,349 Sales tax (3,482,891) (2,765,502) --------------- --------------- 76,497,110 80,153,583 ======== ======== 2. Finance costs Group 2007 2006 RMB RMB Interest on bank loans 6,401,269 4,562,373 Less: Amount capitalised in plant and equipment (773,818) - Less: Amount capitalised in advances to suppliers (460,914) - (for acquisition of plant and equipment) --------------- --------------- 5,166,537 4,562,373 ======== ======== The capitalised interest rate range from 6.5% to 7.47% per annum (2006: Nil) 3. Earnings per share Basic earnings per share is calculated by dividing the Group's net profit attributable to equity holders by the weighted average number of ordinary shares in issue during the financial year as follows: Group 2007 2006 RMB RMB Basic earnings per share 0.54 0.57 ======== ======== The calculation of the basic earnings per share is based on: Net profit attributable to equity holders 14,892,748 7,625,200 ======== ======== Weighted average number of fully paid ordinary shares issued during the financial year 27,564,138 13,263,499 ======== ======== For the purpose of calculating diluted earnings per share, the Group's net profit attributable to equity holders and the weighted average number of ordinary shares in issue are adjusted for the effects of all dilutive potential ordinary shares. Diluted earnings per share amounts are calculated by dividing the profit attributable to the equity holders of the Company by the weighted average number of ordinary shares outstanding during the financial year plus the weighted average number of ordinary shares that would be issued on the conversion of all dilutive potential ordinary shares into ordinary shares. All the 872,853 share options did not have a dilutive effect on the Group's earnings per share as the average market price per ordinary share of the Company during the period from the first day of trading on the Alternative Investment Market of the London Stock Exchange in the United Kingdom to 31 December 2007 was below the exercise price of the share option granted. Group 2007 2006 RMB RMB Diluted earnings per share 0.54 0.57 ======== ======== The calculation of the basic earnings per share is based on: Net profit attributable to equity holders 14,892,748 7,625,200 ======== ======== Weighted average number of fully paid ordinary shares issue during the financial year 27,564,138 13,263,499 ======== ======== 4. Cash and cash equivalents Group Company 2007 2006 2007 2006 RMB RMB RMB RMB Cash in hand 17,511 70,271 - - Cash at bank 30,120,000 54,260,628 388,564 34,327,219 Guarantee money for bank - 8,500,000 - - acceptance deposits ------------ ------------ ----------- ------------ Cash and cash equivalents 30,137,511 62,830,899 388,564 34,327,219 ======== ======== ====== ======== Cash at bank earns interest at floating rates based on daily bank deposit rates ranging from 0.72% to 0.81% (2006: 0.72% to 2.61%) per annum. For the purpose of the consolidated cash flow statement, cash and cash equivalents comprise the following at the balance sheet date: Group 2007 2006 RMB RMB Cash and cash equivalents as per consolidated 30,137,511 62,830,899 balance sheet Less: Pledge of cash deposit to secure banking - (17,524,051) facilities for a subsidiary ---------------- ---------------- 30,137,511 45,306,848 ========= ========= Cash and cash equivalents are denominated in the following currencies: Group Company 2007 2006 2007 2006 RMB RMB RMB RMB Singapore dollar 162,065 15,116,287 162,065 15,116,287 United States dollar 316,520 34,780,310 226,499 19,210,932 Chinese Renminbi 29,658,926 12,934,302 - - -------------- -------------- -------------- -------------- 30,137,511 62,830,899 388,564 32,327,219 ======== ======== ======== ======== 5. Bank loans Group 2007 2006 RMB RMB The borrowings are repayable as follows: On demand within one financial year 34,122,500 58,750,000 From second to fifth financial year 89,600,000 27,257,500 ---------------- --------------- 123,722,500 86,007,500 ========= ========= 1. As at the balance sheet date, the bank loans from Waigaoqiao Subbranch, Agricultural Bank of China are as follows: i. Bank loan of RMB 3,250,000 (2006: RMB 9,000,000) was secured by the original investor and Director, Cheng Zheng, and mortgage of a subsidiary's equipment at net book value of RMB 11,535,354 (2006: RMB 13,162,104) and carry an interest rate of 7.227% (2006: 6.93%) per annum. ii. Bank loan of RMB 5,720,000 (2006: RMB 8,800,000) was secured by the original investor and Director, Cheng Zheng, and mortgage of a subsidiary's equipment at net book value of RMB 16,754,694 (2006: RMB 19,192,383) and carried an interest rate of 7.227% (2006: 6.93%) per annum. iii. Bank loans of RMB 56,970,000 (2006: Nil) were secured by the guarantee with total amount up to RMB 150,000,000 by third party, Xie Shengying and the original investor and Director, Cheng Zheng, and carried interest rates ranging from 6.75% to 7.56% (2006: Nil) per annum. iv. Bank loan of RMB 12,630,000 (2006: Nil) was secured by the guarantee with total amount up to RMB 150,000,00 by a third party, Xie Shengying and the original investor and Director, Cheng Zheng, and mortgage of a subsidiary's equipment at net book value of RMB 22,364,912 (2006:Nil) and carried an interest rate of 7.02% (2006: Nil) per annum. v. Bank loan of RMB 20,000,000 (2006: Nil) was secured by the guarantee with total amount up to RMB 150,000,000 by a third party, Xie Shengying and the original investor and Director, Cheng Zheng, and mortgage of a subsidiary's equipment at net book value of RMB 42,685,325 (2006: Nil) and carried an interest rate of 7.47% (2006: Nil) per annum. vi. Bank loan of RMB 21,500,000 (2006: Nil) was secured by the guarantee with total amount up to RMB 150,000,000 by a third party, Xie Shengying and the original investor and Director, Cheng Zheng and mortgage of a subsidiary's equipment at net book value of RMB 45,301,283 (2006: Nil) and carried an interest rate of 7.29% (2006: Nil) per annum. vii. In 2006, bank loan of RMB 26,000,000 which carried an interest rate of 6.03% per annum was guaranteed by related parties, namely, Beijing Medstar Hi-Tech Investment Co., Ltd. and Beijing Tengyuan Tongda Trading Co., Ltd., and a non-related party, Hongneng Century Energy Source Technology Development Co., Ltd., and secured by a charge over certain equipment of Beijing Tengyuan Tongda Trading Co., Ltd., amounting RMB 12,000,000 and the equipment of a subsidiary at net book value amounting RMB 35,545,617. viii. In 2006, bank loan of RMB 4,750,000 was secured by a third party, Shanghai Affiliation of Zhongtou Credit Guaranty Co., Ltd., and mortgage of a subsidiary's equipment at net book value of RMB 14,527,236 and carried an interest rate of 6.93% per annum. ix. In 2006, bank loan of RMB 5,750,000 was secured by a third party, Shanghai Affiliation of Zhongtou Credit Guaranty Co., Ltd., and mortgage of a subsidiary's equipment at net book value of RMB 12,431,286 and carried an interest rate of 6.93% per annum. x. In 2006, bank loan of RMB 7,250,000 was secured by a third party, Xie Shengying and the original investor and Director, Cheng Zheng, and mortgage of a subsidiary's equipment at net book value of RMB 19,616,848 and carried an interest rate of 8.75% per annum. (2) As at the balance sheet date, the bank loans from HSBC are as follows: i. Bank loans of RMB 3,652,500 (2006: RMB 9,457,500) and RMB revolving loan of Nil (2006: RMB 15,000,000) were secured by way of a mortgage over a subsidiary's equipment leased to Beijing Friendship Hospital with total invoice value no less than RMB 10,000,000 (2006: RMB 10,000,000), equipment leased to the First Hospital Affiliated to Fujian Medical University with total invoice value no less than RMB 12,000,000 (2006: RMB 12,000,000), and a Personal Guarantee of RMB 5,600,000 from original investor and Director, Cheng Zheng, supported by the personal net worth statement (2006: cash deposit of USD 2,000,000 from the Company). The RMB revolving loan had a limit of USD 3,300,000 (2006: USD 2,000,000) or equivalent RMB. The bank loans carried interest rates ranging from 6.336% to 7.425% (2006: 5.58% to 6.633%). Bank loans have an average maturity period of 4-24 months (2006: 18-28 months) from the balance sheet date. The management considers the fair value of the Group's borrowings to approximate their carrying amounts. The carrying amounts of all bank loans were denominated in Renminbi. 6. Trade and other payables - non-current Group 2007 2006 RMB RMB Deposit to be refunded after one year 1,894,915 1,772,108 ========= ========= Deposit to be refunded after one year is a deposit received from JiangSu Provincial I.T.W.M Hospital according to the agreement signed by the subsidiary company with the hospital. According to the agreement, this deposit which will be refunded in December 2010, bears interest at a fixed rate of 3.69% (2006: 3.69%) per annum, which are also repayable at the end of the term. The original deposit amount received was RMB 2 million and it had been carried at amortised cost as at balance sheet date. The weighted average effective interest rate of this deposit is 7.56% (2006: 6.93%). Estimated fair value 2007 2006 RMB RMB Non-current deposit payable 1,861,813 1,772,108 ========= ========= END
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