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Share Name | Share Symbol | Market | Type | Share ISIN | Share Description |
---|---|---|---|---|---|
Guangdong Dev. | LSE:GDF | London | Ordinary Share | GB0003933917 | US$0.01 |
Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
---|---|---|---|---|---|---|---|---|---|---|
0.00 | 0.00% | 0.03 | 0.00 | 01:00:00 |
Industry Sector | Turnover | Profit | EPS - Basic | PE Ratio | Market Cap |
---|---|---|---|---|---|
0 | 0 | N/A | 0 |
RNS Number:5904K Guangdong Development Fund Ld 30 April 2003 30 April 2003 GUANGDONG DEVELOPMENT FUND LIMITED ANNOUNCES 2002 ANNUAL RESULTS The Board of directors of Guangdong Development Fund Limited (the "Fund" or the "Company") announced that the audited consolidated net return attributable to shareholders for the year ended 31 December 2002 was US$0.50 million. As of 31 December 2002, the Fund's consolidated net asset value was US$41.64 million, or US$0.43 per share. The directors recommend the payment of a final dividend of US$0.03 per ordinary share, amounting to US$2,907,000, out of the Company's special distributable reserve account in respect of the year ended 31 December 2002, payable on 26 June 2003, to shareholders on the register of members on 13 June 2003. CHINA'S ECONOMY In 2002, China's economy continued its robust growth and new records were achieved both in GDP growth and in total retail sales of consumer goods. The GDP for the year reached RMB10.24 trillion (US$1.24 trillion), up 8% over the previous year, whilst total retail sales of consumer goods reached RMB4.09 trillion (US$0.49 trillion), up 8.8% over the previous year. China's foreign trade also achieved rapid growth in 2002. The total value of import and export during the year reached US$620.80 billion, up 21.8% over the previous year. Trade surplus for 2002 was US$30.40 billion. Foreign direct investments scored another record in 2002 at US$52.70 billion, an increase of 12.5% over the previous year. At year end of 2002, the foreign exchange reserves of China reached US$286.40 billion, an increase of US$74.20 billion from the end of 2001. Exchange rate of RMB remained stable at RMB8.2773 to US$1.00. A number of commentators are of the view that the RMB is under-valued at this level of exchange rates. PROJECTS OVERVIEW Our infrastructure projects contributed a major part of the Fund's recurrent income. The current portfolio of Qingyuan Beijiang Bridges and National Highway No.205 (Heyuan Section) registered stable traffic flows and continued to produce a quality, recurrent income for the Fund. The Fund has yet to receive the 2002 payment of income guaranteed by the Chinese joint venture partner of the Huizhang Highway (Huizhou Section) project due to changes in the guideline issued by the Guangdong Provincial Government. The Investment Manager has been in discussion with the Chinese joint venture partner to resolve the issue, and may take further actions if necessary. Turnover at Foshan Tongbao Company Limited ("Tongbao") was comparable to 2001, although profit contribution from Hualu Company Limited ("Hualu"), of which Tongbao holds a 50% interest, has slowed significantly. This was mainly due to the decrease in the demand for Hualu's main product during the second half of the year. The new project invested by Hualu in 2002 is still in trial production stage. When launched, it is expected that this new product will be a major contribution to Hualu's operating results in 2003. The Fund regrettably discovered that Tongbao had provided guarantees to subsidiaries of the major shareholder, Foshan Industry Investment Management Ltd. ("FIIML"), beneficially owned by the Foshan Municipality Government, which were not previously known to the Fund. One of the guarantees has been called and a judgement for approximately RMB37.00 million (US$4.47 million) has been awarded against Tongbao. The management of Tongbao has been exploring various alternatives to mitigate the exposure, including the negotiation with FIIML to indemnify Tongbao for this amount. The Investment Manager has commenced discussions with the management of Tongbao to speed up such negotiations while at the same time, had initiated a process to assess the impact of this guarantee on the operation, cash flow and profitability of Tongbao. In addition to the RMB37.00 million (US$4.47 million) referred to above, to the best of the Fund's knowledge, outstanding guarantees as at 31 December 2002 provided by Tongbao amounted to approximately RMB310 million (US$37.44 million). These guarantees were also not previously known to the Fund. The Fund's directors have been advised that none of these guarantees have been called as at the date of approval of the financial statements. The Fund is in the process of discussing these guarantees with Tongbao in order to minimize the exposure should the guarantees become crystallized. Turnover at Guangzhou Malting Co., Ltd. and Guangzhou Yangcheng Malting Plant (jointly known as "Guangmai") has been stable and comparable to last year. After the completion of the debt restructuring in the second half of 2001, and the write-back of several over-provisions during the year, the results of Guangmai have improved significantly. Both sales volume and profits at Ningbo Malting Company Limited continued to improve during the year. However, no write-back of the full provision made for this investment in 1999 is proposed at this stage. For Guangdong (Zhanjiang) Medium Density Fiberboard Limited, both turnover and sales volume increased slightly. However, as the tax exemption period expired last year, the company increased its provisions previously understated, resulting in a negative impact on the company's performance in 2002. Turnover at GD Decorative Material (Zhongshan) Company Limited declined due to tough competition in the industry. However, with its strong sales network and PACO's prominent brand name, the company continued to be a leading player in the market. During the year, the company has planned for the purchase of a new domestic production line, which can double the production capacity and lower the overall production costs. Xinhui Xingwei Building Material Company Limited, Gaoyao Gaolu Cement Limited and Guangdong Zhanhai Instrument and Meter Company Limited still incurred losses in 2002. The Fund's real estate project - Guangdong Nan Fang (Holdings) Company Limited ("Nanfang") - registered a stable occupancy rate, and the rental income received has been stable. However, the burden of high interest costs and payment for a settled lawsuit continues to affect the performance of the project. Nanfang incurred a loss in 2002. The Fund had fully provided for EBS Bridge International Limited in 2001 and the company is being liquidated. The total market value of the Fund's listed investments increased by US$0.06 million as of 31 December 2002 to US$2.50 million. OUTLOOK While global economy continues to struggle, China's economic growth remains impressive. The recent outbreak of SARS virus will inevitably impact on China's domestic economy in the short to medium term, although the extent of such impact will depend on the effectiveness of Chinese Government's containment programme in the next few months. Looking ahead, the Board will seek early opportunities to dispose of the Fund's investments at the best prices reasonably obtainable, and return realisation proceeds to shareholders. VICTOR LAP-LIK CHU Chairman 30 April 2003 Enquiries Guangdong Development Fund Limited Victor Chu / Amy Cho +852 2956 1818 GUANGDONG DEVELOPMENT FUND LIMITED CONSOLIDATED STATEMENT OF TOTAL RETURN Year ended 31 December 2002 2002 2001 Notes Revenue Capital Total Revenue Capital Total US$ US$ US$ US$ US$ US$ Investment income: Listed investments 62,965 - 62,965 87,997 - 87,997 Unlisted investments 2,449,936 - 2,449,936 2,736,593 - 2,736,593 Provision for impairment loss on a long term investment - - - - -538,332 -538,332 Write-back of provision for impairment loss on a long term investment - - - - 2,416 2,416 Write-back of provision/(provision) against an amount due from an investee -204,663 - -204,663 2,385 - 2,385 entity Amortisation of interests in long term -682,526 - -682,526 -682,526 - -682,526 investments Net realised gain on disposal of interests in long term investments - 244,465 244,465 - 49,372 49,372 Net realised gain on sale of listed investments - - - - 1,390,893 1,390,893 Unrealised appreciation of listed investments - 66,820 66,820 - 971,213 971,213 Interest income from: Bank deposits 29,533 - 29,533 521,045 - 521,045 Other sources 251,589 - 251,589 303,858 - 303,858 __________ _________ __________ __________ __________ __________ Gross revenue 1,906,834 311,285 2,218,119 2,969,352 1,875,562 4,844,914 Investment management -1,037,214 - -1,037,214 -1,124,912 - -1,124,912 fee Other administrative -443,003 - -443,003 -667,647 - -667,647 expenses __________ _________ __________ __________ __________ __________ Return on ordinary activities for the year before 426,617 311,285 737,902 1,176,793 1,875,562 3,052,355 taxation Taxation -241,590 - -241,590 29,100 - 29,100 __________ _________ __________ __________ __________ __________ Return on ordinary activities for the year after 185,027 311,285 496,312 1,205,893 1,875,562 3,081,455 taxation Equity minority 240 - 240 113 -363 -250 interest ________ _________ __________ __________ __________ __________ Return attributable to equity shareholders 185,267 311,285 496,552 1,206,006 1,875,199 3,081,205 __________ ________ __________ __________ __________ __________ Dividends 2 - 2,907,000 2,907,000 - 30,039,000 30,039,000 __________ ________ __________ __________ __________ __________ Return per ordinary share (US cents) - Basic 3 0.19 0.32 0.51 1.24 1.94 3.18 _____ _____ _____ _____ _____ _____ All revenue and capital items in the above statement are derived from continuing operations. No operations were discontinued during the year. GUANGDONG DEVELOPMENT FUND LIMITED CONSOLIDATED BALANCE SHEET 31 December 2002 2002 2001 Notes US$ US$ INTERESTS IN LONG TERM INVESTMENTS 37,067,021 41,228,465 CURRENT ASSETS Cash and bank balances 1,549,950 835,851 Time deposits 3,465,780 2,379,350 Listed investments 2,502,971 2,436,151 Prepayments, deposits and other receivables 8,457 22,468 Due from investee entities 778,047 2,669,080 Due from a related company 848,428 101,104 __________ __________ 9,153,633 8,444,004 __________ __________ CURRENT LIABILITIES Creditors and accrued liabilities 862,840 630,514 Due to an investee entity 568,099 1,818,712 Due to a related company 244,669 267,509 Proposed final dividend 2 2,907,000 2,907,000 __________ __________ 4,582,608 5,623,735 __________ __________ NET CURRENT ASSETS 4,571,025 2,820,269 __________ __________ TOTAL ASSETS LESS CURRENT LIABILITIES 41,638,046 44,048,734 EQUITY MINORITY INTEREST 3,400 3,160 __________ __________ 41,641,446 44,051,894 __________ __________ CAPITAL AND RESERVES Share capital 969,000 969,000 Share premium 4,977,239 4,977,239 Special distributable reserve 47,054,000 49,961,000 Capital reserve - realised 10,736,390 10,491,925 - unrealised -31,429,347 -31,496,167 Revenue reserve 9,334,164 9,148,897 __________ __________ TOTAL SHAREHOLDERS' FUNDS 41,641,446 44,051,894 __________ __________ NET ASSET VALUE PER ORDINARY SHARE 4 0.43 0.45 __________ __________ GUANGDONG DEVELOPMENT FUND LIMITED CONSOLIDATED CASH FLOW STATEMENT Year ended 31 December 2002 Notes Notes 2002 2001 US$ US$ NET CASH INFLOW FROM OPERATING ACTIVITIES 5 (a) 984,146 5,644,011 ACQUISITIONS AND DISPOSALS Proceeds from disposal of interests in long term investments 3,285,177 375,579 __________ __________ Cash inflow from acquisitions and disposals 3,285,177 375,579 __________ __________ CAPITAL EXPENDITURE AND FINANCIAL INVESTMENT Repayment of shareholders' loans 438,206 531,983 __________ __________ Cash inflow from capital expenditure and financial investment 438,206 531,983 __________ __________ EQUITY DIVIDENDS PAID -2,907,000 -27,132,000 __________ __________ NET CASH INFLOW/(OUTFLOW) BEFORE USE OF LIQUID RESOURCES 1,800,529 -20,580,427 __________ __________ MANAGEMENT OF LIQUID RESOURCES Proceeds from sale of listed investments 5 (b) - 2,691,215 Net decrease/(increase) in time deposits 5 (c) -1,086,430 17,856,390 __________ __________ Cash inflow/(outflow) from management of liquid resources -1,086,430 20,547,605 __________ __________ INCREASE/(DECREASE) IN CASH 714,099 -32,822 __________ __________ RECONCILIATION OF NET CASH FLOW TO MOVEMENT IN NET FUNDS 2002 2001 US$ US$ INCREASE/(DECREASE) IN CASH 714,099 -32,822 INCREASE/(DECREASE) IN LIQUID RESOURCES 1,086,430 -20,547,605 __________ __________ CHANGE IN NET FUNDS RESULTING FROM CASH FLOWS 1,800,529 -20,580,427 NON-CASH CHANGE IN NET FUNDS 5 (c) 66,820 2,362,106 __________ __________ CHANGE IN NET FUNDS 1,867,349 -18,218,321 NET FUNDS AT BEGINNING OF YEAR 5 (c) 5,651,352 23,869,673 __________ __________ NET FUNDS AT 31 DECEMBER 5 (c) 7,518,701 5,651,352 __________ __________ NOTES TO FINANCIAL STATEMENTS 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES A summary of the principal accounting policies, all of which have been applied consistently throughout the current and preceding years, is set out below. Basis of preparation and presentation The financial statements have been prepared in US dollars under the historical cost convention, as modified by the revaluation of investments, and in accordance with accounting principles generally accepted in the Island of Jersey, incorporating United Kingdom accounting standards. The presentation of the statement of total return and the balance sheet have been prepared in accordance with the Statement of Recommended Practice "Financial Statements of Investment Trust Companies" issued by the Association of Investment Trust Companies in the United Kingdom. Basis of consolidation The consolidated financial statements include the financial statements of the Company and its subsidiaries for the year ended 31 December 2002. All significant intra-group transactions and balances within the Group are eliminated on consolidation. Subsidiaries A subsidiary is a company in which the Company, directly or indirectly, controls more than half of its voting power or issued share capital or controls the composition of its board of directors. Interests in subsidiaries are stated at cost unless, in the opinion of the directors, there have been impairment losses, when they are written down to values determined by the directors. Interests in long term investments Interests in unlisted investments are classified as long term where, in the opinion of the directors, they are made with the expectation that realisation will not be in the near future or where there are restrictions on their immediate realisation. All unlisted investments are initially recorded at cost. Thereafter they are recorded to reflect the periodic revaluations of the directors. The directors' valuation takes into account the investee's historical or projected earnings or asset value or the price at which transactions in the investee company's equity have taken place or an offer has been made, as appropriate. Such valuations also take into account any adverse factors which indicate that an impairment loss has taken place and a provision should be made. In the opinion of the directors, the carrying value of the investments equates to the fair value. Unlisted investments operating in the form of joint ventures, whereby the residual interests in the joint venture projects are to be transferred to the various PRC joint venture parties at the end of the contractual periods in accordance with the terms of the contract, are stated at cost less accumulated amortisation, computed to write off the cost less any residual value of the joint ventures over the underlying joint venture contract terms. The amortisation of interests in long term investments is dealt with in the revenue section of the statement of total return. Capital gains and losses on the investments, whether realised or unrealised, are dealt with in the capital section of the statement of total return. Associates An associate is a company, not being a subsidiary or a jointly-controlled entity, in which the Group has a long term interest of generally not less than 20% of the equity voting rights and over which it is in a position to exercise significant influence. In accordance with the provisions of Financial Reporting Standard No. 9 "Associates and Joint Ventures" relating to investment funds, the Group includes all investments at cost less any provisions for impairment losses, where appropriate, and accumulated amortisation, even where the Group has significant influence over the investees, because these investments are held as part of the Group's investment portfolio. The directors consider that, because these investments are held with a view to the ultimate realisation of capital gains, equity accounting would not give a true and fair view of the Group's interests in these investments, which is better measured by dividends and interest. Listed investments Listed investments are classified as short term and are stated at the mid-market price ruling on the balance sheet date as taken from the relevant stock exchange. Capital gains and losses on the investments, whether realised or unrealised, are dealt with in the capital section of the statement of total return. Foreign currency transactions Foreign currency transactions during the year are translated into United States dollars at the applicable exchange rates ruling at the transaction dates. Monetary assets and liabilities denominated in foreign currencies at the balance sheet date are translated into United States dollars at the applicable exchange rates ruling at that date. Exchange differences are dealt with in the revenue section of the statement of total return. Revenue recognition Interest income is recognised on an accrual basis. Investment income is recognised when the right to receive payment is established. Investment management fee The investment management fee represents amounts paid/payable to Guangdong Investment Management Limited ("Investment Manager") in connection with investment, administrative and accounting services provided to the Company and is charged to the revenue return account. The investment management fee is charged by the Investment Manager for those services and is calculated quarterly based on an annual rate of 2.5% of the Group's assets invested in unlisted companies and of 0.75% of the Group's remaining assets. Related parties Parties are considered to be related if one party has the ability, directly or indirectly, to control the other party, or exercise significant influence over the other party in making financial and operating decisions. Parties are also considered to be related if they are subject to common control or common significant influence. Related parties may be individuals or corporate entities. 2. DIVIDENDS 2002 2001 US$ US$ First special dividend - Nil (2001: US18 cents) per ordinary share - 17,442,000 Second special dividend - Nil (2001: US10 cents) per ordinary share - 9,690,000 __________ __________ - 27,132,000 Proposed final dividend - US3 cents (2001: US3 cents) per ordinary share 2,907,000 2,907,000 __________ __________ 2,907,000 30,039,000 __________ __________ 3. RETURN PER ORDINARY SHARE The revenue return per ordinary share is based on the revenue return attributable to equity shareholders of US$185,267 (2001: US$1,206,006) and on the 96,900,000 (2001: 96,900,000) ordinary shares in issue during the year. The capital return per ordinary share is based on the net realised and unrealised capital return of US$311,285 (2001: US$1,875,199) and on the 96,900,000 (2001: 96,900,000) ordinary shares in issue during the year. No diluted return per ordinary share has been shown as no diluting events existed during the year. 4. NET ASSET VALUE PER ORDINARY SHARE The Group's net asset value per fully paid ordinary share of US$0.43 (2001: US$0.45) has been calculated in accordance with the articles of association. The calculation is based on 96,900,000 shares (2001: 96,900,000 shares) in issue at the year end and the net assets of the Group of US$41,641,446 (2001: US$44,051,894) at the year end. 5. NOTES TO THE CONSOLIDATED CASH FLOW STATEMENT (a) Reconciliation of the Group's revenue return on ordinary activities to net cash inflow from operating activities 2002 2001 US$ US$ Revenue return on ordinary activities for the year before taxation 426,617 1,176,793 Provision/(write-back of provision) against an amount due from an investee entity 204,663 -2,385 Amortisation of interests in long term 682,526 682,526 investments Decrease in prepayments, deposits and other receivables 14,011 3,272,014 Increase in an amount due from a related -747,324 -55,692 company Decrease in amounts due from investee 1,686,370 1,958,866 entities Decrease in creditors and accrued liabilities -9,264 -450,746 Decrease in an amount due to an investee -1,250,613 - entity Decrease in an amount due to a related -22,840 -937,365 company ______ ______ Net cash inflow from operating activities 984,146 5,644,011 (b) Analysis of sale of listed investments 2002 2001 US$ US$ Proceeds from sale of listed investments - 2,691,215 (c) Analysis of changes in net funds At Net cash flows Non-cash At 31 December 2002 Beginning change of year US$ US$ US$ US$ Cash 835,851 714,099 - 1,549,950 Time deposits 2,379,350 1,086,430 - 3,465,780 Listed investments 2,436,151 - 66,820 2,502,971 5,651,352 1,800,529 66,820 7,518,701 Copies of the Annual Report and Consolidated Audited Accounts will shortly be sent to the London Stock Exchange and are available to the public, free of charge, at the following address: Bridgewell Securities Limited, Old Change House, 128 Queen Victoria Street, London EC4V 4BJ, England and will shortly be available for inspection at the UK Listing Authority's Document Viewing Facility, which is situated at Financial Services Authority, 25 The North Colonnade, Canary Wharf, London E14 5HS. END This information is provided by RNS The company news service from the London Stock Exchange END FR NKKKDABKDAQN
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