![](/cdn/assets/images/search/clock.png)
We could not find any results for:
Make sure your spelling is correct or try broadening your search.
Share Name | Share Symbol | Market | Type | Share ISIN | Share Description |
---|---|---|---|---|---|
China Rerun | LSE:CHRR | London | Ordinary Share | KYG216261092 | ORD USD0.000007874 (DI) |
Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
---|---|---|---|---|---|---|---|---|---|---|
0.00 | 0.00% | 6.00 | 0.00 | 01:00:00 |
Industry Sector | Turnover | Profit | EPS - Basic | PE Ratio | Market Cap |
---|---|---|---|---|---|
0 | 0 | N/A | 0 |
TIDMCHRR
RNS Number : 0299G
China Rerun Chemical Group Ltd
27 February 2015
CHINA RERUN CHEMICAL GROUP LTD
("China Rerun" or the "Group")
Final results for the year ended 31 August 2014
China Rerun Chemical Group Ltd (CHRR.L), the producer of lubricant products for the domestic automotive, industrial and agricultural markets in the People's Republic of China ("PRC"), today announces its audited consolidated results for the year ended 31 August 2014.
As part of the Group's restructuring in anticipation of its Admission to AIM in October 2013, a new operating subsidiary was incorporated in May 2012 which took over and commenced trading activities in March 2013. The accounts of the last financial year were therefore six months' results from 1 March 2013 to 31 August 2013. For the purposes of comparison, financial results from FY2013 have been combined with the six months' audited results of the private Company from 1 September 2012 to 28 February 2013, as detailed in the Admission Document.
Financial Highlights
Audited FY 2014 Pro forma FY Growth (FY2014 and 2013 FY2013) ---------------- ---------------- ------------- ------------------- Revenue RMB 319.3m RMB 273.3m + 16.8% ---------------- ---------------- ------------- ------------------- Gross profit RMB 86.9m RMB 72.8m + 19.4% ---------------- ---------------- ------------- ------------------- Gross margin 27.2% 26.6% 60bps ---------------- ---------------- ------------- ------------------- Pre-tax profit RMB 48.9 RMB 45.02m + 8.6% ---------------- ---------------- ------------- -------------------
Indicative exchange rates as at 26 February 2015: GBP1: RMB 9.52
Source:www.oanda.com
Operational Highlights
-- Like for like sales volume increased by 9.4% to 15.9 million litres (FY2013: 14.5 million litres)
-- Gross margins increased by 60bps to 27.2% (FY2013: 26.6%) as a result of selling higher quality products at higher prices whilst benefitting from economies of scale
-- Average selling price increased to RMB20 per litre
-- Increased demand for our products across all major customer segments, including automotive, construction and agricultural industries
-- Maturing automotive market enables the Group to benefit from customers switching to China Rerun's products as dealer warranties expire
-- Developed 14 new products in our dedicated R&D facility
Commenting on the results, Mr Xinghe Wu, Executive Chairman of China Rerun said:
"The Group has a clear and focused strategy which has delivered a positive performance in the period with strong growth in both revenue and profit. A rigorous focus on high quality products, high quality distributors and brand building has enabled China Rerun to take full advantage of strong demand. We are well positioned to take advantage of market developments and commercial opportunities in the year ahead and we will continue to focus on creating shareholder value."
For further enquiries, please visit www.chinarerun.com or contact:
China Rerun Xinghe Wu +86 459 666 9777 Yan Liu www.chinarerun.com/ Nick Lyth +44 776 990 6686 -------------------------- ----------------------- ----------------------------- Cairn Financial Advisers LLP Jo Turner (Nominated Adviser) Liam Murray +44 20 7148 7900 -------------------------- ----------------------- ----------------------------- Beaufort Securities Limited (Broker) Chris Rourke +44 20 7382 8300 -------------------------- ----------------------- ----------------------------- Cardew Group Shan Shan Willenbrock +44 20 7930 0777 (Financial PR) Georgina Hall Tom Horsman chinarerun@cardewgroup.com. -------------------------- ----------------------- -----------------------------
Notes to Editors
China Rerun Chemical Group Ltd is an established producer of lubricant products for the PRC's domestic automotive, industrial and agricultural markets. Based in Daqing, northeastern China, it operates principally under the "Runyuan" and "Black E" brands. The Group's products are sold through a network of third party distributors to end users, some of whom operate branded automotive garages.
Chairman's Statement
We have made good progress in growing the business and I am pleased to report a positive set of results for the year ended 31 August 2014. In addition to sustained demand for lubricant oils in the domestic market, we have benefitted from our focus on high quality branded products, maintaining our high quality distribution network and broadening our geographic representation in China. As a result, the Group delivered revenues of RMB 319.3m, up 17% (FY2013: RMB 273.3m) compared to the previous year. Gross profit rose by 19.4% to RMB 86.9m (FY2013: RMB 72.8m).
Like-for like sales volumes were 15.9 million litres, up 9.4% compared with FY2013. Gross margin grew slightly to 27.2% (FY2013: 26.6%). The Group's pricing strategy, improved branding and product quality have enabled us to maintain our margins. In the period under review, average selling prices increased to RMB 20 per litre (FY 2013: RMB 18.9).
Demand for high quality lubricants oils
The Group currently manufactures 29 types of lubricant oils for the automotive, industrial and construction industries, as well as one antifreeze product. More than 70% of our lubricant oils are sold to the automotive industry. According to the China Association of Automobile Manufacturers sales reached 23.5 million units in 2014 (2013: 21.9 million units) and the growth in vehicle numbers is expected to continue into 2015 and beyond. The automotive market in China is maturing and the expansion of the primary market is expected to result in the growth of the secondary market which is not underpinned by dealer warranties. The Group has benefitted from customers switching to China Rerun's products as their main dealer restrictions expire. Strong demand for lubricant oils from the construction and agricultural industries continued in the period under review and we developed a new mix of oils in response to this demand.
Branding
We continue to place strong emphasis on the quality of our products by upgrading the quality and specification of oil types to achieve higher average selling prices. Our focus on building brand awareness for our flagship brands: Runyuan, Black E, Panther, Tiger, Deer and Horse, is driving our sales growth and this has allowed us to integrate more distributors across a larger number of provinces into our network and therefore protect our gross margins.
We now have one of the best-selling lubricant oils in Heilongjiang province and have won several industry awards along the way, including the "Well-known Brand of China".
In March 2014, the Group was accredited as a training centre by the Economic and Management College of China University of Petroleum. The training centre will offer an Executive Master of Business Administration programme for delegates in the oil and gas sectors. The management believes this important accreditation will enhance the Company's reputation and raise brand awareness.
Distribution network
We commenced FY2014 with 36 distributors. We have since appointed six new distributors, bringing the total number of distributors to 42 at the end of FY2014. The Group has a strict policy of engaging only with high quality distributors who are able to meet our sales targets. China Rerun's brand awareness has strengthened in recent years and as a result we have benefitted from selling a higher volume of high-grade products to our distributors. This rigorous approach has enabled us to grow sales volume, maintain our profits and achieve economies of scale. For the full year 2014, average revenues per distributor was RMB 7.6m (FY2013: RM B7.6m). We will continue to look to expand our distribution network and increase our presence in the market place.
People
Our people are our most valuable asset in sustaining our growth and profitability and on, behalf of the Board, I would like to take this opportunity to express my appreciation to all of them for their hard work and dedication. Lastly, I would like to express my deepest gratitude to our shareholders, customers and business partners for their support of China Rerun.
Financial Review
As part of the Group's restructuring in anticipation of its Admission to AIM in October 2013, a new operating subsidiary was incorporated in May 2012 which took over and commenced trading activities in March 2013. The accounts of the last financial year were therefore six months' results from 1 March 2013 to 31 August 2013. For the purposes of comparison, financial results from FY2013 have been combined with the six months' audited results of the private Company from 1 September 2012 to 28 February 2013, as detailed in the Admission Document.
In the period under review the Group generated revenue of RMB 319.3 million, representing a growth of 16.8% (FY2013: RMB 273.3 million). The Group achieved gross profit of RMB 86.9 million (FY2013: RMB 72.8 million) and average gross profit margins increased to 27.2% (FY2013: 26.6%). The improvement in gross profit was driven mainly by product upgrades as well as benefits from economies of scale as volumes increased by 9.4%.
Profit after tax was up by 7% to RMB 35.1 million (FY2013: RMB 32.9 million). At 31 August 2014, the Company's cash and cash equivalents were RMB 51.9 million (2013: RMB 46.8 million).
Sales and distribution costs were RMB 25.2 million (FY2013: RMB 14.9 million). The increase in costs was mainly driven by increased sales commission, distributors' rebates to attract higher quality distributors. Advertising costs accounted for 1.2% of revenue as the Group continues to focus on brand building through marketing initiatives, in line with its strategy.
Administrative costs rose to RMB 8.3 million (FY2013: RMB 6.2 million) as a result of increased direct overheads and staff costs. Research and Development expenses increased to RMB 2.2 million (FY2013: RMB 1.08 million) as the Group continues to focus on upgrading and introducing new products to the market to meet demand.
Inventories at the year end were RMB 2.6 million (FY2013: RMB 2.66 million), to meet demand. This has led to shorter delivery lead times and therefore improved customer satisfaction.
There was an increase to RMB 34.4 million (FY2013: RMB 16.02 million) of advance payments to raw materials suppliers to prevent our costs being affected by base oil price fluctuations.
Total liabilities of RMB 146.6 million include RMB 117.1 million of taxation liability and will be paid when required. The Group has made the appropriate accrual to recognise the liability as a precautionary measure.
Net cash generated from operating activities was RMB 114 million for the year (2013: RMB 40.6 million).
Outlook
We are pleased with the progress we have made in the period under review and our focused strategy has enabled the Group to deliver a positive performance.
The Group has made an encouraging start to the new financial year. In Q1 2015, we have delivered growth in revenue and sales volumes and gross margin is broadly in line with FY2014 at 27%. We have also appointed two new distributors since the period end. Like many other lubricant oil producers, the fall in the crude oil Brent Price has impacted our business, however domestic price controls on oil products have ensured that price movements are less volatile. Nevertheless, the prices of our raw materials have fallen recently and our distributors are coming under pressure to reduce selling prices to reflect this. As a result, we have entered into promotional activities and discounting, such as "buy 5 and get 1 free", which we can withdraw as and when the crude oil price increases. In doing so, we are able to protect gross margins within 5% which we expect will be affected in Q2 while the crude oil price remains low. Importantly, this strategy protects our average selling prices as it is difficult to increase prices once discounts are introduced and it also provides our distributors with stability under the current circumstances.
Global economic conditions remain uncertain and we can see both challenges and opportunities for the business in the year ahead. The lubricant oil industry is highly fragmented, comprising more than 4,000 participants, many of which are small or have a narrow product offering. Industry consolidation will provide excellent future expansion opportunities. We will actively seek acquisition opportunities and joint distribution partnerships to complement our existing business and we remain confident and optimistic about our business.
CHINA RERUN CHEMICAL GROUP LIMITED
CONSOLIDATED AND COMPANY STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEAR ENDED 31 AUGUST 2014
Group Group Company Company Period Period from from 30 May 30 May Year ended 2012 to Year ended 2012 to 31 August 31 August 31 August 31 August 2014 2013 2014 2013 RMB'000 RMB'000 RMB'000 RMB'000 Revenue 319,332 150,714 - - Cost of sales (232,353) (111,359) - - ----------- ------------ ------------- ------------ Gross profit 86,979 39,355 - - Distribution costs (25,231) (7,420) - - Administrative expenses (8,296) (1,823) (3,390) (227) Listing costs (4,735) (4,543) (4,728) (3,424) ----------- ------------ ------------- ------------ Operating profit/(loss) 48,717 25,569 (8,118) (3,651) Net finance income /(costs) 266 12 (4) - ----------- ------------ ------------- ------------ Profit / (loss) before tax 48,983 25,581 (8,122) (3,651) Income tax expense (13,855) (7,308) - - ----------- ------------ ------------- ------------ Profit/(loss) for the period 35,128 18,273 (8,122) (3,651) Other comprehensive income - - - - Currency translation difference 4 108 - 61 ----------- ------------ ------------- ------------ Total comprehensive income for the period 35,132 18,381 (8,122) (3,590) =========== ============ ============= ============ Profit/(loss) for the year attributable to: Owners of the company 35,128 18,543 (8,122) (3,651) Non-controlling interest - (270) - - ----------- ------------ ------------- ------------ 35,128 18,273 (8,122) (3,651) =========== ============ ============= ============ Total comprehensive income/(loss) attributable to: Owners of the company 35,132 18,651 Non-controlling interest - (270) ----------- ------------ 35,132 18,381 =========== ============ Earnings per share Basic (in RMB 1.00) 0.137 9,272 =========== ============ Diluted (in RMB 1.00) 0.136 9,272 =========== ============
CHINA RERUN CHEMICAL GROUP LIMITED
CONSOLIDATED AND COMPANY STATEMENT OF FINANCIAL POSITION
AT 31 AUGUST 2014
Group Group Company Company 2014 2013 2014 2013 RMB'000 RMB'000 RMB'000 RMB'000 Non-current assets Property, plant and equipment 3,087 3,701 - - Intangible assets -* -* - - Investment in subsidiaries - - 632 632 -------- -------- --------- -------- 3,087 3,701 632 632 -------- -------- --------- -------- Current assets Inventories 2,596 2,655 - - Trade and other receivables 145,471 16,602 - - Cash and cash equivalents 51,960 46,836 2 - -------- -------- --------- -------- 200,027 66,093 2 - -------- -------- --------- -------- Total assets 203,114 69,794 634 632 ======== ======== ========= ======== Equity attributable to owners of the parent Share capital 12 12 12 12 Share premium 2,414 620 2,414 620 Statutory reserve 2,287 2,287 - - Warrant reserve 496 - 496 - Translation reserve 112 108 61 61 Retained earnings 51,194 16,066 (11,773) (3,651) -------- -------- --------- -------- 56,515 19,093 (8,790) (2,958) Non-controlling interest - - - - -------- -------- --------- Total equity 56,515 19,093 (8,790) (2,958) -------- -------- --------- Non-current liabilities Borrowings 3,891 - - - -------- -------- --------- -------- 3,891 - - - -------- -------- --------- -------- Current liabilities Trade and other payables 121,545 43,393 9,424 3,590 Income tax liabilities 21,163 7,308 - - -------- -------- --------- -------- 142,708 50,701 9,424 3,590 -------- -------- --------- -------- Total current liabilities 146,599 50,701 9,424 3,590 -------- -------- -------- Total equity and liabilities 203,114 69,794 634 632 ======== ======== ========= ========
*amount is less than RMB1,000
CHINA RERUN CHEMICAL GROUP LIMITED
CONSOLIDATED AND COMPANY STATEMENTS OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 AUGUST 2014
The Group
Share Share Statutory Warrant Translation Retained Non-controlling capital premium reserve reserve reserve earnings Total interest Total RMB'000 RMB'000 RMB'000 RMB'000 RMB'000 RMB'000 RMB'000 RMB'000 RMB'000 Balance at 30 May 2012 - - - - - - - - - ======== ======== ========== ======== ============ ========= ======== ================ ======== Profit for the period - - - - - 18,543 18,543 (270) 18,273 Transfer to statutory reserve - - 2,287 - - (2,287) - - - Exchange difference - - - - 108 - 108 - 108 -------- -------- ---------- -------- ------------ --------- -------- ---------------- -------- Total comprehensive income for the period - - 2,287 - 108 16,256 18,651 (270) 18,381 -------- -------- ---------- -------- ------------ --------- -------- ---------------- -------- Issue of shares 12 620 - - - - 632 - 632 Acquisition of non-controlling interest without a change in control - - - - - (190) (190) 270 80 ---------- Balance at 31 August 2013 12 620 2,287 - 108 16,066 19,093 - 19,093 ======== ======== ---------- ======== ============ ========= ======== ================ ======== Profit for the year - - - - - 35,128 35,128 - 35,128 Exchange difference - - - - 4 - 4 - 4 -------- -------- ---------- -------- ------------ --------- -------- ---------------- -------- Total comprehensive income for the year - - - - 4 35,128 35,132 - 35,132 -------- -------- ---------- -------- ------------ --------- -------- ---------------- -------- Issue of shares -* 1,794 - - - - 1,794 - 1,794 Warrant reserve - - - 496 - - 496 - 496 Balance at 31 August 2014 12 2,414 2,287 496 112 51,194 56,515 - 56,515 ======== ======== ========== ======== ============ ========= ======== ================ ========
*amount is less than RMB1,000
Statutory reserve: The statutory reserve represents the amount set aside in accordance with the legislation in the People's Republic of China.
CHINA RERUN CHEMICAL GROUP LIMITED
CONSOLIDATED AND COMPANY STATEMENTS OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 AUGUST 2014
The Company
Share Warrant Translation Retained capital Share premium reserve reserve earnings Total RMB'000 RMB'000 RMB'000 RMB'000 RMB'000 RMB'000 Balance at 30 May 2012 - - - - - - ========= ============== ========= ============ ========== ======== Loss for the period - - - - (3,651) (3,651) Exchange difference - - - 61 - 61 --------- -------------- --------- ------------ ---------- -------- Total comprehensive income for the period - - - 61 (3,651) (3,590) --------- -------------- --------- ------------ ---------- -------- Issue of shares 12 620 - - - 632 --------- Balance at 31 August 2013 12 620 - 61 (3,651) (2,958) ========= ============== ========= ============ ========== ======== Loss for the year - - - - (8,122) (8,122) Exchange difference - - - - - - --------- -------------- --------- ------------ ---------- -------- Total comprehensive income for the year - - - - (8,122) (8,122) --------- -------------- --------- ------------ ---------- -------- Issue of shares -* 1,794 - - - 1,794 Warrant reserve - - 496 - - 496 --------- Balance at 31 August 2014 12 2,414 496 61 (11,773) (8,790) ========= ============== ========= ============ ========== ========
*amount is less than RMB1,000
CHINA RERUN CHEMICAL GROUP LIMITED
CONSOLIDATED AND COMPANY STATEMENT OF CASH FLOW
FOR THE YEAR ENDED 31 AUGUST 2014
Group Group Company Company Period Period from from 30 May 30 May Year ended 2012 to Year ended 2012 to 31 August 31 August 31 August 31 August 2014 2013 2014 2013 RMB'000 RMB'000 RMB'000 RMB'000 Cash flow from operating activities Profit /(loss) before tax 48,983 25,581 (8,122) (3,651) Interest expense 8 - - - Interest income (274) (12) - - Depreciation 639 368 - - Warrant costs 496 - - - ----------- ----------- ----------- Operating cash inflows before movements in working capital 49,852 25,937 (8,122) (3,651) Decrease/(Increase) in inventories 59 (2,655) - - Increase in receivables (17,885) (16,602) - - Increase in payables 82,047 33,950 5,834 3,651 ----------- ----------- ----------- ----------- Net cash generated from operations 114,073 40,630 (2,288) - Income tax paid - - - - ----------- ----------- ----------- ----------- Net cash generated from operating activities 114,073 40,630 (2,288) - =========== =========== =========== =========== Investing activities Interest received 274 12 - - Purchase of property, plant and equipment (25) (112) - - Acquisition of subsidiary - - - (632) ----------- ----------- ----------- ----------- Net cash used in investing activities 249 (100) - (632) =========== =========== =========== =========== Financing activities Interest paid (8) - - - Loan (to)/from the director (110,984) 5,674 - - Proceed from issue of shares 1,794 632 1,794 632 ----------- ----------- Net cash from financing activities (109,198) 6,306 2,290 632 =========== =========== =========== =========== Net increase in cash and cash equivalents 5,124 46,836 2 - Cash and cash equivalents at beginning of period 46,836 - - - ----------- ----------- ----------- ----------- Cash and cash equivalents at end of period 51,960 46,836 2 - =========== =========== =========== ===========
ABBREVIATED NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 AUGUST 2014
The following notes are in abbreviated form. A full version of the notes accompanying the final results, which should be read in full, can be found on the Company's website.
1 GENERAL INFORMATION
China Rerun Chemical Group Limited ("China Rerun" or the "Company") was incorporated in Cayman Islands. The registered office of the Company is located at 89 Nexus Way, Camana Bay, Grand Cayman KY1-9007 Cayman Islands.
The principal activity of the Company continued to be that of an investment holding company and the principal activities of the Group are production and distribution of lubricating oil for the automotive, agricultural and certain industrial markets in P.R. China. The principal place of business is at Room 407, Block B-11, Service Outsourcing Industrial Park, High-tech Industrial Development Zone, Daqing, Heilongjiang, P. R. China 163316.
The company was set up as part of the group restructuring for admission to AIM, the group has taken over the business and trade of Daqing Economic Development Zone Runyuan Chemical Co., Limited ("Daqing Runyuan") before admission to AIM.
2 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES 2.1 Statement of compliance
The financial statements have been prepared in accordance with International Financial Reporting Standards as adopted by the EU ("IFRS") issued by the International Accounting Standard Board (IASB) and interpretations of the International Financial Reporting Interpretations Committee (IFRIC).
The group has adopted all relevant standards effective for accounting periods beginning on or after 1 January 2014 from the beginning of the reporting period.
As at end of the reporting period, the group has not adopted the following standard as it is either not effective or not applicable to the group's business.
2.2 Basis of preparation
The consolidated and company financial statements have been prepared on the historical cost basis except for certain financial instruments, which are measured at fair values as explained in the accounting policies set out below.
Historical cost is generally based on the fair value of the consideration given in exchange for assets.
Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date, regardless of whether that price is directly observable or estimate using another valuation technique.
The consolidated financial statements are rounded to the nearest thousand ('000) and they are presented in Chinese Renminbi (RMB), the official currency of the People's Republic of China. RMB is the functional currency of the company.
2.3 Basis of consolidation
The consolidated financial statements incorporate the financial statements of the Company and entities controlled by the Company (its subsidiaries). Control is achieved where the company: has power over the investee; is exposed, or has rights, to variable returns from its involvement with the investee; and has the ability to use its power to affect its return.
The results of subsidiaries acquired or disposed of during the year are included in the consolidated statement of comprehensive income from the effective date of acquisition and up to the effective date of disposal, as appropriate. Total comprehensive income of subsidiaries is attributed to the owners of the Company and to the non-controlling interest even if this result in the non-controlling interest having a deficit balance.
Where necessary, adjustments are made to the consolidated and company financial statements of subsidiaries to bring their accounting policies into line with those used by other members of the Group.
All intra-group transactions, balances, income and expenses are eliminated in full on consolidation.
Non-controlling interests in subsidiaries are presented separately from the Group's equity therein.
2.4 Going concern
The financial statements have been prepared assuming the Group will continue as a going concern.
After making enquiries, the Directors consider that the Group has adequate resources and committed borrowing facilities to continue in operational existence for the foreseeable future. Consequently, they have adopted the going concern basis in preparing the Financial Statements.
2.5 Significant accounting estimates and judgements
Overview
The preparation of financial information requires management to make judgement estimates and assumptions that effect the application of accounting policies together with the reported amounts of assets, liabilities, income and expenses.
Estimates and judgements are continually evaluated and are based on historical experience and other factors, including expectations of future events that are believed to be reasonable under the circumstances.
The Group makes estimates and assumptions concerning the future. The resulting accounting estimates may differ from the related actual results.
The estimates and assumptions that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within future financial years are addressed below.
a) Impairment of property, plant and equipment
The carrying value of the property, plant and equipment is reviewed for impairment when events or changes in circumstances indicate the carrying value may not be recoverable in accordance with the accounting policies as disclosed in the relevant parts of note 2.12. If such indication exists, the recoverable amounts of the property, plant and equipment are determined on value-in-use calculations, which require the use of judgment and estimates.
b) Depreciation
The Group's management determines the estimated residual value, useful lives and related depreciation charges for the property, plant and equipment with reference to the estimated periods that the Company intends to derive future economic benefits from the use of these assets. Management will revise the depreciation and amortisation charge where useful lives are different to previously estimated.
c) Operating lease
The Group follows the guidance of IAS17 to specify the appropriate accounting policies and disclosure applicable to leases. In considering whether the leases agreements as described in note 22 are operating leases which require significant judgment and the directors apply those judgments. The directors are of the opinion that there is no commercial benefit to exercise the right to purchase where there is no lease payment obligation. The leases therefore do not transfer substantially all risk and rewards incidental to ownership and it does not meet the definition of assets and liabilities in accordance to the Conceptual Framework for Financial Reporting.
d) Net realisable value of inventories
Net realisable value of inventories is the estimated selling price in the ordinary course of business, less estimated costs of completion and selling expenses. These estimates are based on the current market condition and the historical experience of manufacturing and selling products of similar nature. It could change significantly as a result of changes in customer demand and competitor actions in response to severe industry cycle. Management reassesses these estimates at each balance sheet date. The carrying amount of the Group's inventories as at 31 August 2014 was RMB 2.6million.
e) Income tax and other taxes
The Company's subsidiaries that operate in the People's Republic of China are subject to corporate income tax in the People's Republic of China. Significant judgement is required in determining the provision for income taxes and other taxes. There are some transactions and calculations for which the ultimate tax determination is uncertain during the ordinary course of business. The Company recognises liabilities for anticipated tax audit issues based on estimates of whether additional taxes will be due. Where the final tax outcome of these matters is different from the amounts that were initially recorded, such differences will impact the income tax and Value-added tax in the period in which such determination is made. Accordingly, reversal or additional tax provision might be made. As at 31 August 2014, the Group's income tax, VAT and other tax liabilities were RMB 21.2million (2013: RMB 7.3million), RMB 84.1million (2013: RMB 26.0million), and RMB 33.0million (2013: 26.0million), respectively. No provision has been made for possible penalties or interest.
f) Measurement of fair values
A number of the group's accounting policies and disclosures require the measurement of fair values, for both financial and non-financial assets and liabilities.
The group currently does not have a control framework with respect to the measurement of fair values. The significant unobservable inputs were provided by the management to their best knowledge.
When measuring the fair value of an asset or a liability, the management uses market observable data as far possible. Fair values are categorised into different levels in a fair value hierarchy based on the inputs used in the valuation techniques as follows.
-- Level 1: quoted prices (unadjusted) in active markets or identical assets or liabilities;
-- Level 2: inputs other than quoted prices included in Level 1 that are observable for the asset or liability, either directly (i.e. prices) or indirectly (i.e. derived from prices);
-- Level 3: inputs for the asset or liability that are not based on observable market data (unobservable inputs).
The information account the assumptions made in measuring fair values is included in the relevant notes.
3 EARNINGS PER SHARE
Basic earnings per share are calculated by dividing the profit attributable to equity shareholders of the Company by the weighted average number of ordinary shares in issue during the year.
Group Group 2014 2013 RMB RMB Net profit attributable to owners of parent (RMB'000) 35,128 18,543 ======== ======= Number of ordinary shares ('000) 255,810 2 ======== ======= Basic earnings per share (RMB) 0.137 9,272 ======== ======= Diluted earnings per share (RMB) 0.136 9,272 ======== ======= 4 POSTING OF ACCOUNTS
The Company will post a copy of the final report and accounts to all shareholders on Friday 27 February which will include a Notice of Annual General Meeting.
5 ANNUAL GENERAL MEETING
The Group's Annual General Meeting will be held at Room 2004, Building C, Zhongke Pioneer Park, 88 Zhongbao Road, Saertu District, Daqing City, Heilongjiang Province, P.R. China 163312 on 31 March 2015 at 16:30hrs (China Time).
This information is provided by RNS
The company news service from the London Stock Exchange
END
FR SEDFAMFISEDE
1 Year China Rerun Chart |
1 Month China Rerun Chart |
Support: +44 (0) 203 8794 460 | support@advfn.com
By accessing the services available at ADVFN you are agreeing to be bound by ADVFN's Terms & Conditions