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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:8101P Guangdong Development Fund Ld 16 September 2003 GUANGDONG DEVELOPMENT FUND LIMITED INTERIM RESULTS The Board of Directors of Guangdong Development Fund Limited (the "Fund" or the "Company") announces the unaudited return attributable to equity shareholders for the six months ended 30 June 2003 was US$1.16 million. As of 30 June 2003, the Fund's total net asset value was US$42.80 million, or US$0.442 per share. The Board of Directors does not recommend the payment of an interim dividend. ECONOMIC ENVIRONMENT For the first half of 2003, the overall economic performance of China was better than expected. Despite the negative impact on the economy due to the outbreak of severe acute respiratory syndrome ("SARS") virus in late March of this year, the Gross Domestic Product ("GDP") grew to US$605 billion, up 8.2 per cent over the corresponding period of last year - China still enjoyed one of the fastest first half growth period in recent years. The industries hardest hit by SARS were passenger transportation, hospitality services and tourism. However, three major contributors (investment, consumption and export) to China's economic growth remained robust. Total foreign direct investment utilized in first half of 2003 was US$30.3 billion, up 34.3 per cent from last year. Total export and import grew 33.9 per cent to US$190.3 billion and 44.5 per cent to US$185.8 billion respectively over the first half of last year. Domestic retail sales in the first six months of 2003 grew a year on year 8 per cent to 2.16 trillion yuan, and the Consumer Price Index ("CPI") increased 0.6 per cent. INFRASTRUCTURE PROJECTS The infrastructure projects remained the most stable source of income for the Fund. Current portfolio of Qingyuan Beijiang Bridges and National Highway No.205 (Heyuan Section) continued to register stable traffic pattern and contribute a stable, recurrent income for the Fund. The investment manager has continued discussions with the Chinese partner of Huizhang Highway (Huizhou Section) project to resolve the problem relating to the income due to the Company in 2002 but not yet paid resulting from changes in the guidelines issued by the Guangdong Provincial Government. INDUSTRIAL PROJECTS Turnover at Foshan Tongbao Company Limited ("Tongbao") for the first half of 2003 is comparable to last year's, but profits after taxation declined due to increase in costs of sales. Operating results of Hualu Company Limited, of which Foshan Tongbao Company Limited holds a 50% interest, has been stable and remained a major contributor to Tongbao's income. Management of Tongbao is continuing its negotiation with its major shareholder, Foshan Industry Investment Management Ltd. ("FIIML"), to indemnify a judgement for approximately RMB37 million (US$4.47 million) against Tongbao due to a guarantee provided by Tongbao to one of FIIML's subsidiaries. As at 30 June 2003, to the best of the Fund's knowledge, outstanding guarantees provided by Tongbao amounted to approximately RMB310 million (US$37.44 million), and the Fund has been advised that none of the remaining guarantees made by Tongbao have been called to date. Turnover and profit after taxation at Guangzhou Malting Co., Ltd. and Guangzhou Yangcheng Malting Plant (jointly known as "Guangmai") decreased compared to the corresponding period of last year, principally due to the outbreak of SARS. Ningbo Malting Company Limited's interim result has likewise worsened due to the outbreak of SARS. For Guangdong (Zhanjiang) Medium Density Fiberboard Limited, both turnover and profit margin was comparable to the corresponding period of last year. The company continued to enjoy a VAT refund granted by the PRC Tax Authority to the industry during the year. For the first six months of 2003, both turnover and profit margin for GD Decorative Material (Zhongshan) Company Limited remained stable, and profit after taxation increased due to the success in continuing cost cutting policies. Xinhui Xingwei Building Material Company Limited, Guangdong Zhanhai Instrument and Meter Company Limited and Gaoyao Gaolu Cement Company Limited showed no improvement in their performances compared to the corresponding period of last year. All three projects still incurred losses in the first half of 2003. REAL ESTATE PROJECT Guangdong Nan Fang (Holdings) Company Limited 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 impact on the performance of the project. The company still incurred a loss for the first half of 2003. IT PROJECT The Fund had fully provided for EBSBridge International Limited in 2001 and the company is being liquidated. LISTED INVESTMENTS As of June 2003, the Fund's listed investments amounted to US$2.72 million, representing approximately 6.4 per cent of its net assets. Though the global stock market remains bearish during the period, the total market value of the Fund's listed investments as at 30 June 2003 was 32.5 per cent higher than the original cost. The increase resulted from the improved valuation of both B shares in China and H shares in Hong Kong. PURCHASE, SALE OR REDEMPTION OF SHARES During the six months ended 30 June 2003, neither the fund nor any of its subsidiaries purchased, sold or redeemed any of the Fund's Listed shares. AUDIT COMMITTEE On 10 May 1999, the Fund established an Audit Committee comprising two independent non-executive directors and one non-executive director. The role of the Committee is to advise the Board of Directors of the Fund by providing independent and objective reviews of the Fund's financial reporting procedure, internal control and audit function. The Committee has reviewed this report and presented a report thereon to the Board. CORPORATE GOVERNANCE None of the Directors of the Fund is aware of any evidence that would reasonably indicate that the Fund failed to comply with the Combined Code of Principles of Good Governance of the London Stock Exchange at present or for any part of the six months ended 30 June 2003. OUTLOOK Despite the outbreak of SARS in China, the Chinese government has implemented an effective containment programme and has successfully control the virus within a short period of time. The effect on the economy has been kept to a minimum and China's domestic economy remained robust. Looking ahead, the directors will continue to seek opportunities to dispose of the Fund's investments at the best prices reasonably obtainable, and return liquidity to shareholders. VICTOR LAP-LIK CHU Chairman Enquiries Guangdong Development Fund Limited Victor Chu / Amy Cho Tel: (852) 2956 1818 Fax: (852) 2956 1161 INDEPENDENT REVIEW REPORT TO GUANGDONG DEVELOPMENT FUND LIMITED INTRODUCTION We have been instructed by the company to review the financial information for the six months ended 30 June 2003 which comprises Consolidated Statement of Total Return, Consolidated Balance Sheet, Consolidated Cash Flow Statement, and the related notes 1 to 10. We have read the other information contained in the interim report and considered whether it contains any apparent misstatements or material inconsistencies with the financial information. This report is made solely to the company in accordance with guidance contained in Bulletin 1999/4 'Review of interim financial information' issued by the Auditing Practices Board. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the company, for our work, for this report, or for the conclusions we have formed. DIRECTORS' RESPONSIBILITES The interim report, including the financial information contained therein, is the responsibility of, and has been approved by, the directors. The directors are responsible for preparing the interim report in accordance with the Listing Rules of the Financial Services Authority which require that the accounting policies and presentation applied to the interim figures should be consistent with those applied in preparing the preceding annual accounts except where any changes, and the reasons for them, are disclosed. REVIEW WORK PERFORMED We conducted our review in accordance with guidance contained in Bulletin 1999/4 'Review of interim financial information' issued by the Auditing Practices Board for use in the United Kingdom. A review consists principally of making enquiries of group management and applying analytical procedures to the financial information and underlying financial data, and based thereon, assessing whether the accounting policies and presentation have been consistently applied, unless otherwise disclosed. A review excludes audit procedures such as tests of controls and verification of assets, liabilities and transactions. It is substantially less in scope than an audit performed in accordance with United Kingdom Auditing Standards and therefore provides a lower level of assurance than an audit. Accordingly we do not express an audit opinion on the financial information. REVIEW CONCLUSION On the basis of our review we are not aware of any material modifications that should be made to the financial information as presented for the six months ended 30 June 2003. Ernst & Young LLP Jersey, Channel Islands 16 September 2003 UNAUDITED CONSOLIDATED STATEMENT OF TOTAL RETURN For the period from 1 January 2003 to 30 June 2003 Six months ended 30 June 2003 Six months ended 30 June 2002 Notes Revenue Capital Total Revenue Capital Total US$'000 US$'000 US$'000 US$'000 US$'000 US$'000 Investment income: Listed investments 31.1 - 31.1 29.6 - 29.6 Unlisted investments 2 1,279.5 - 1,279.5 1,800.6 - 1,800.6 Provision against an amount due from an investee entity - - - (204.7) - (204.7) Amortisation of interests in long term investments 3 (341.2) - (341.2) (341.2) - (341.2) Net realised gain on disposal of interests in long term investments - - - - 94.3 94.3 Net realised gain on sale of listed investments - 162.8 162.8 - - - Unrealised appreciation of listed investments - 630.0 630.0 - 136.2 136.2 Interest income from: Bank deposits 26.1 - 26.1 18.4 - 18.4 Other sources - - - 15.8 - 15.8 Gross revenue 995.5 792.8 1,788.3 1,318.5 230.5 1,549.0 Investment management fee 4 (486.7) - (486.7) (530.9) - (530.9) Other administrative (145.4) - (145.4) (107.0) - (107.0) expenses Return attributable to equity shareholders 363.4 792.8 1,156.2 680.6 230.5 911.1 Reserves at the beginning of period 9,334.2 (20,693.0) (11,358.8) 9,148.9 (21,004.2) (11,855.3) Reserves at the end of period 9,697.6 (19,900.2) (10,202.6) 9,829.5 (20,773.7) (10,944.2) Return per ordinary share (US cents) - Basic 5 0.375 0.818 1.193 0.702 0.238 0.940 All revenue and capital items in the above statement are derived from continuing operations. No operations were discontinued during the period. UNAUDITED CONSOLIDATED BALANCE SHEET As at 30 June 2003 Notes 30 June 2003 31 December 2002 US$'000 US$'000 INTERESTS IN LONG TERM INVESTMENTS 6 36,725.8 37,067.0 CURRENT ASSETS Cash and bank balances 184.1 1,549.9 Time deposits 1,796.4 3,465.8 Listed investments 7 2,722.5 2,503.0 Prepayments, deposits and other receivables 13.3 8.5 Due from investee entities 1,748.8 778.0 Due from a related company 881.3 848.4 7,346.4 9,153.6 CURRENT LIABILITIES Creditors and accrued liabilities 473.1 862.8 Due to an investee entity 568.1 568.1 Due to a related company 236.8 244.7 Proposed final dividend - 2,907.0 1,278.0 4,582.6 NET CURRENT ASSETS 6,068.4 4,571.0 TOTAL ASSETS LESS CURRENT LIABILITIES 42,794.2 41,638.0 EQUITY MINORITY INTEREST 3.4 3.4 42,797.6 41,641.4 CAPITAL AND RESERVES Share capital 969.0 969.0 Share premium 4,977.2 4,977.2 Special distributable reserve 8 47,054.0 47,054.0 Capital reserve - realised 10,899.1 10,736.4 - unrealised (30,799.3) (31,429.3) Revenue reserve 9,697.6 9,334.1 TOTAL EQUITY SHAREHOLDERS' FUNDS 42,797.6 41,641.4 NET ASSET VALUE PER ORDINARY SHARE (US$) 0.442 .430 UNAUDITED CONSOLIDATED CASH FLOW STATEMENT Period ended 30 June 2003 Six months ended Six months ended Notes 30 June 2003 30 June 2002 US$'000 US$'000 NET CASH INFLOW/(OUTFLOW) FROM OPERATING ACTIVITIES 9(a) (701.5) 1,171.0 ACQUISITIONS AND DISPOSALS Proceeds from disposal of interests in long term investments - 206.9 Cash inflow from acquisitions and - 206.9 disposals CAPITAL EXPENDITURE AND FINANCIAL INVESTMENT Repayment of shareholders' loans - 255.7 Cash inflow from capital expenditure and financial investment - 255.7 EQUITY DIVIDENDS PAID (2,907.0) (2,907.0) NET CASH OUTFLOW BEFORE USE OF LIQUID RESOURCES (3,608.5) (1,273.4) MANAGEMENT OF LIQUID RESOURCES Proceeds from sale of listed 9(b) 573.3 - investments Net decrease in time deposits 9(c) 1,669.4 991.0 Cash inflow from management of 2,242.7 991.0 liquid resources DECREASE IN CASH (1,365.8) (282.4) RECONCILIATION OF NET CASH FLOW TO MOVEMENT IN NET FUNDS Six months ended Six months ended Notes 30 June 2003 30 June 2002 US$'000 US$'000 DECREASE IN CASH (1,365.8) (282.4) DECREASE IN LIQUID RESOURCES (2,242.7) (991.0) CHANGE IN NET FUNDS RESULTING FROM CASH FLOWS (3,608.5) (1,273.4) NON-CASH CHANGE IN NET FUNDS 9(c) 792.8 136.2 (2,815.7) (1,137.2) NET FUNDS AT BEGINNING OF YEAR 9(c) 7,518.7 5,651.4 NET FUNDS AT 30 JUNE 9(c) 4,703.0 4,514.2 Notes to the unaudited interim report 30 June 2003: 1. Basis of preparation and accounting policies The unaudited interim 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 accounting policies and basis of presentation used in the preparation of these interim financial statements are the same as those used in the Group's audited financial statements for the year ended 31 December 2002. 2. Investment income - unlisted investments For the six months ended 30 June 2003, no interim dividend was declared by the investee companies. Investment income of US$1,279,500 shown is for the six months received and receivable for the year 2003 from different projects (Corresponding period 2002: US$1,800,600). 3. Amortisation of interests in long term investments Amortisation of interests in long term investments is computed to write off the cost of investments over the underlying contract terms of those investments where the Fund is not entitled to the residual interests at the end of the contract term. 4. Investment management fee An investment management fee is payable to the Investment Manager on a quarterly basis in arrears at an amount equal to the aggregate of 2.5 percent of the Fund's assets invested in unlisted companies and 0.75 percent of the Fund's remaining assets. 5. Return per ordinary share The revenue return per ordinary share is based on the revenue return attributable to equity shareholders of US$363,400 (Corresponding period 2002: US$680,600) and on the 96,900,000 (Corresponding period 2002: 96,900,000) ordinary shares in issue during the period. The capital return per ordinary share is based on the net realised and unrealised capital return of S$792,800 (Corresponding period 2002: gain of US$230,500) and on the 96,900,000 (Corresponding period 2002: 96,900,000) ordinary shares in issue during the period. No figure for the diluted return per ordinary share has been shown as no diluting events existed during the period. 6. Interests in long term investments Effective Cost of Holding Investment % Funded US$ million XIN HUI XINGWEI BUILDING MATERIAL COMPANY LIMITED 30.0 4.73 Ceramic tiles manufacturer FOSHAN TONGBAO COMPANY LIMITED 29.9 7.94 Thermostat manufacturer PAK KONG TRANSCO LIMITED 14.0 4.70 Toll bridge operator in Qingyuan GUANGDONG ZHANHAI INSTRUMENT AND METER COMPANY LIMITED 36.0 3.74 Manufacturer of flow meters under license of Brooks Instrument GAOYAO GAOLU CEMENT COMPANY LIMITED 30.6 7.18 Cement producer GUANGDONG NAN FANG (HOLDINGS) COMPANY LIMITED 43.7 10.61 Investment in 11,083 sq.m. shopping arcade in Guangzhou GUANGDONG (ZHANJIANG) MEDIUM DENSITY FIBERBOARD LIMITED 11.2 3.87 Production of medium density fiberboard NINGBO MALTING COMPANY LIMITED 10.0 3.93 Operation of malting plant GUANGDONG HEYUAN TONG HUA INVESTMENT LIMITED 24.2 4.82 Investment in National Highway No. 205 GUANGZHOU MALTING COMPANY LIMITED 29.5 7.29 Operation of malting plant GUANGDONG YANGCHENG MALTING PLANT 29.5 6.24 Operation of malting plant YUEHUI HIGHWAY AND BRIDGES DEVELOPMENT COMPANY LIMITED 20.0 4.82 Investment in Huizhang Highway (Huizhou section) GD DECORATIVE MATERIAL (ZHONGSHAN) CO. LIMITED 18.0 1.99 Production of decorative materials EBSBRIDGE INTERNATIONAL LIMITED 10.0 1.00 Technology services OTHER INVESTMENT PORTFOLIO 0.24 Unaudited long term investments at original cost 73.10 Add: Acquisition cost capitalised 0.38 Less: Amortisation of interests in long term investments (5.35) Less: Provisions for impairment losses on long term investments (31.40) Total unaudited long term investments as at 30 June 2003 36.73 7. Listed investments 30 June 2003 31 December 2002 US$'000 US$'000 Listed investments, at cost PRC 293.6 582.4 Hong Kong 1,761.7 1,761.7 2,055.3 2,344.1 Unrealised appreciation 667.2 158.9 2,722.5 2,503.0 Listed investments at market value at period/year end 2,722.5 2,503.0 8. Special distributable reserve 30 June 2003 31 December 2002 US$'000 US$'000 At beginning of year and end of period 47,054.0 47,054.0 9. Notes to the unaudited consolidated cash flow statement (a) Reconciliation of the Group's revenue return on ordinary activities to net cash inflow/(outflow) from operating activities Six months ended Six months 30 June 2003 ended US$'000 30 June 2002 US$'000 Revenue return on ordinary activities for the period before taxation 363.4 680.6 Provision against an amount due from an investee entity - 204.7 Amortisation of interests in long term investments 341.2 341.2 Decrease/(increase) in prepayments, deposits and other receivables (4.8) 10.5 Decrease/(increase) in amounts due from investee entities (970.8) 1,918.8 Increase in an amount due from a related company (32.9) (481.3) Decrease in creditors and accrued liabilities (389.7) (246.3) Decrease in an amount due to an investee entity - (1,250.6) Decrease in an amount due to a related company (7.9) (6.6) Net cash inflow/(outflow) from operating activities (701.5) 1,171.0 (b) Analysis of sale of listed investments Six months ended Six months ended 30 June 2003 30 June 2002 US$'000 US$'000 Proceeds from sale of listed 573.3 - investments (c) Analysis of changes in net funds At Net At beginning of cash Non-cash 30 June year flows change 2003 US$'000 US$'000 US$'000 US$'000 Cash 1,549.9 (1,365.8) - 184.1 Time deposits 3,465.8 (1,669.4) - 1,796.4 Listed investments 2,503.0 (573.3) 792.8 2,722.5 7,518.7 (3,608.5) 792.8 4,703.0 10. Segment information Mainland PRC Hong Kong Total US$'000 US$'000 US$'000 Revenue: Investment income 1,245.6 65.0 1,310.6 Interest income 3.5 22.6 26.1 1,249.1 87.6 1,336.7 Net realised gain on sale of listed investments 162.8 - 162.8 Unrealised appreciation of listed investments 173.9 456.1 630.0 1,585.8 543.7 2,129.5 Less: Amortisation of interests in long term investments (341.2) - (341.2) 1,244.6 543.7 1,788.3 Expenses: Investment management fee (486.7) Other administrative expenses (145.4) Return attributable to equity shareholders 1,156.2 This information is provided by RNS The company news service from the London Stock Exchange END IR ILFSLADIRLIV
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