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| Share Name | Share Symbol | Market | Type | Share ISIN | Share Description |
|---|---|---|---|---|---|
| Prince Catering | LSE:PRNC | London | Ordinary Share | VGG7248H1029 | ORD USD0.04 (DI) |
| Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
|---|---|---|---|---|---|---|---|---|---|---|
| 0.00 | 0.00% | 1.80 | 0.00 | 00:00:00 |
| Industry Sector | Turnover | Profit | EPS - Basic | PE Ratio | Market Cap |
|---|---|---|---|---|---|
| 0 | 0 | N/A | 0 |
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RNS Number:3633Z
Prince Catering & Mgmnt (Overseas)
29 June 2007
Prince Catering and Management (Overseas) Limited
("Prince Catering" or the "Company)
Preliminary Statement of Final Results
for the year ended 31 December 2006
Chairman's Statement
Following our admission to AIM, a market operated by the London Stock Exchange,
in August 2006, Prince Catering & Management (Overseas) Limited ("Prince
Catering") has continued to pursue its strategy of expansion throughout mainland
China and in Hong Kong. At the year end we were operating a total of 14
restaurants in 11 Chinese cities, two of them owned by the Group and 12 operated
under management contracts. The Group also managed one hotel during the year,
the Xi'an Prince International Hotel, as well as the Xi'an Prince Health Club,
and we continue, during 2007, to work towards further restaurant openings.
It is disappointing to report that revenue for the year fell 12% to #6.4million
despite the opening of a new restaurant during the year in Xi'an. We believe
the decline in sales was due in part to the fact that we did not open as many
restaurants in 2006 as we had in 2005. Our management contracts carry initial
signing fees of up to RMB 1.5 million (#99,000 approx.) which during 2005,
significantly enhanced our revenues. The same level of new openings was not
matched in 2006. As anticipated in the restaurant business, we also faced
pressure from competitors and additionally felt the expiration of tax
concessions at our Xi'an restaurant with taxes imposed at a rate of 5% on
turnover in addition to a 33% charge on operating profit. We also saw a decline
in business spending as a result of a cutback in government expenditure.
Alongside the fall in revenue, pre-tax profits also slipped to #185,000 (2005:
#1,685,000), partly due to the exceptional costs of the AIM flotation
(#546,000), but we remain confident that we are addressing the issues and look
forward to further new openings during the course of this year.
As shareholders will be aware, we believe our key strengths continue to be
underpinned by our strong team of experienced management and chefs, backed by a
commitment to quality control across our brand as a whole, and our strong
programme of recruitment and training. As part of our continued efforts to
attract an increasing customer base we are continuing to work on the creation of
new dishes, paying attention among other things to an increasing awareness of
environmental concerns surrounding existing luxury favourites such as shark fin
soup and abalone.
During the first half of 2007 we have opened one further restaurant under
management contract, the Yulin Prince Hotpot Restaurant in Shaanxi Province. We
are, of course, continuing to work on further openings. Longer term, as we
advised to shareholders during our admission to AIM, we are also planning new
Group-owned restaurants in Shanghai and Beijing, where we hope to position
ourselves to take advantage of the positive economic impact expected from the
Beijing 2008 Olympic Games and the Shanghai 2010 World Expo.
In summary, while 2006 has provided some challenges, particularly during our
initial period as a quoted company, we believe we remain well positioned to put
ourselves back on course during 2007.
Mr. Guangfan Mai
Chief Executive
29 June 2007
For further information please contact:
David Youngman, WH Ireland Limited +44 (0) 161 832 2174
Allan Piper, First City Financial +44 (0) 20 7242 2666
CONSOLIDATED INCOME STATEMENT
For the year ended 31 December 2006
Note 2006 2005
#'000 #'000
Revenue 6,410 7,296
Cost of sales (2,398) (2,502)
Gross profit 4,012 4,794
Other operating income - 1
Selling and distribution expenses (2,588) (2,793)
Administrative expenses (712) (319)
Operating Profit 3 712 1,683
Exceptional costs of AIM listing 3 (546) -
Investment income 19 2
Profit before income taxes 185 1,685
Income Taxes 9 (176) (182)
Profit for the financial year 9 1,503
Attributable to Equity holders of the parent company (112) 1,353
Minority Interest 121 150
Earnings (loss) per share 23
-Basic (pence) (0.1p) 1.7p
-Fully diluted (pence) (0.1p) 1.7p
All income and expenses relate to continuing and existing operations
CONSOLIDATED BALANCE SHEET Note 2006 2005
For the year ended 31 December 2006 #'000 #'000
Non-current assets
Intangible fixed assets 11 16 44
Tangible assets 10 1,428 1,908
Deferred tax asset 65 14
Total non-current assets 1,509 1,966
Current assets
Inventories 13 214 289
Trade and other receivables 14 1,967 1,922
Cash and cash equivalents 15 841 592
Total current assets 3,022 2,803
Total assets 4,531 4,769
Current Liabilities:
Trade and other payables 16 (2,209) (1,799)
Total assets less current liabilities 2,322 2,970
Net assets 2,322 2,970
Equity
Share capital 18 1,756 1,846
Foreign currency translation reserve 19 13 287
Statutory reserves 19 343 276
Pooling Reserve 19 176 48
Warrant reserve 19 29 -
Retained Earnings 19 (713) (162)
Equity attributable to the equity holders of the parent company 1,604 2,295
Minority Interest 718 675
Total Equity 2,322 2,970
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
For the year ended 31 December 2006
Share Retained Share Pooling Minority Statutory Warrants Foreign Total
Capital Earnings Premium Reserve interest Reserves Reserve Currency Equity
Translation
Reserve
#'000 #'000 #'000 #'000 #'000 #'000 #'000 #'000 #'000
At 1 January 1,687 184 - 265 459 93 - -106 2,582
2005
Profit for - 1,353 - - 150 - - - 1,503
year
Dividends - -1,516 - - - - - - -1,516
paid
Exchange rate 159 - - -217 66 - - 393 401
adjustments
Statutory - -183 - - - 183 - - -
Transfer
At 31 1,846 -162 - 48 675 276 - 287 2,970
December 2005
Share Retained Share Pooling Minority Statutory Warrants Foreign Total
Capital Earnings Premium Reserve interest Surplus Reserve Currency Equity
Reserve Translation
Reserve
#'000 #'000 #'000 #'000 #'000 #'000 #'000 #'000 #'000
At 1 January 1,846 (162) - 48 675 276 - 287 2,970
2006
Profit for year - (112) - - 121 - - - 9
Dividends paid - (469) - - - - - - (469)
pre IPO and to
minorities
Exchange rate (184) 115 - 128 (78) (18) - (274) (311)
adjustments
Increase in 94 - - - - - - - 94
share capital
Premium on - - 331 - - - - - 331
shares issued
-
Issue cost of - - (331) - - - - - (331)
shares issued
Statutory - (85) - - - 85 - - -
Transfer
Warrants issued - - - - - - 29 - 29
in the year
At 31 December 1,756 (713) - 176 718 343 29 13 2,322
2006
CONSOLIDATED CASH FLOW STATEMENT
For the year ended 31 December 2006
2006 2005
#'000 #'000
Profit (loss) attributable to equity holders of the parent company (112) 1,353
Adjustments for:
Depreciation of property, plant and equipment 336 323
Amortisation 24 24
Loss on disposal of fixed assets - 5
Interest Income (2)
Income Tax 85 182
Minority Interest 121 150
Operating cash flow before movements in working capital 454 2,035
Change in inventories 75 (68)
Change in receivables (46) (1,840)
Change in payables 454 273
Cash generated by operations 937 400
Income taxes paid - (149)
Change in deferred tax (56) -
Share based payment 29 -
Net cash generated from operating activities 910 251
Investing activities
Purchase of fixed assets (20) (187)
Net cash used in investing activities (20) (187)
Financing activities
Proceeds of issue of new shares 94 -
Dividends paid to minority shareholders (593) -
Interest received - 2
Foreign exchange differences (144) 122
Net cash (used in)/ from financing activities (643) 124
Net increase in cash and cash equivalents 247 188
Cash and cash equivalents at 1 January 591 403
Cash and cash equivalents at 31 December 838 591
Cash and bank balances 838 591
NOTES TO THE FINANCIAL STATEMENTS
For the year ended 31 December 2006
1. General Information
Prince Catering and Management (Overseas) Limited was incorporated on 6 June
2005 in the British Virgin Islands. The address of the registered office is at
OMC Chambers, PO Box 3152 Road Town, Tortola, British Virgin Islands.
The company is domiciled in the British Virgin Islands.
The Company is an investment holding company. The principal activity of its
subsidiaries is the operation of luxury Cantonese restaurants in the People's
Republic of China.
These consolidated financial statements are the Group's first financial
statements. The consolidated financial statements are presented in sterling.
2. Accounting Policies
1. Basis of Preparation
The consolidated financial statements of Prince Catering and Management
(Overseas) Limited and its subsidiary undertakings (the''Group'') have been
prepared in accordance with those International Financial Reporting Standards
and Interpretations in force (''IFRS''), as adopted by the European Union.
2. Basis of Consolidation
The Group financial statements consolidate the financial statements of Prince
Catering and Management (Overseas) Limited and all its subsidiary undertakings
drawn up to 31 December 2006. Subsidiary undertakings comprise Xi'an Prince
Restaurant Co Ltd, Hong Kong Prince Restaurant Co Ltd and Shenzhen Prince
Catering Management Co Ltd.
Subsidiary undertakings have been consolidated using the pooling of interests
method. The assets and liabilities of the combining entities are reflected at
their carrying amounts. No adjustments have been made to reflect fair values.
This enables presentation of the results and comparatives to reflect the ongoing
business.
The income statement reflects the results of the combining entities for the full
year irrespective of when the combination took place.
All intra-group transactions, balances income and expenses are eliminated on
consolidation.
Comparative figures are presented as if the entities had always been combined.
3. Foreign Exchange
The functional currency of the Group is the Renminbi (RMB). The presentational
currency is pounds sterling (#) for the benefit of investors.
Transactions denominated in foreign currencies are translated into sterling and
recorded at the rate of exchange ruling at the date of the transactions.
Monetary assets and liabilities denominated in foreign currencies at the Balance
Sheet date are retranslated at the rates ruling at that date. These translation
differences are dealt with in the Group Income Statement.
The financial statements of foreign subsidiaries are translated into sterling at
the closing rate of exchange and the differences arising from the translation of
the opening net investment in the subsidiary are taken to reserves .
For the year ended 31 December 2006 the foreign operations financial statements
have been translated from RMB or HKD to Sterling at the following exchange
rates:
Year end rate Average rate
RMB: GB # 15.316 14.706
RMB: HK$ 1.00467 1.00591
4. Revenue Recognition
Revenue is measured at the fair value of the consideration received or
receivable and represents amounts receivable for goods or services provided in
the normal course of business, net of discounts and other sales related charges.
Revenue from the restaurant business is recognised when goods or services are
delivered.
Revenue from the restaurant management business is recognised when the service
is fully provided.
5. Operating Leases
Leases where substantially all the rewards and risks of ownership of assets
remain with the lessor are accounted for as operating leases. Where the
companies within the Group are lessees, rentals payable under the operating
leases are charged to the income statement on the straight-line basis over the
lease terms.
6. Income Tax
Income tax for the financial year comprises current and deferred tax. Income
tax is recognised in the income statement except to the extent that it relates
to items recognised directly in equity, in which case such tax is recognised in
equity.
Current tax is the expected tax payable on the taxable income for the financial
year, using tax rates enacted or substantially enacted at the balance sheet
date, and any adjustment to tax payable in respect of previous financial years.
Deferred tax is provided using the balance sheet liability method, providing for
temporary differences as at the balance sheet date between the carrying amounts
of assets and liabilities for financial reporting purposes and the corresponding
tax bases used in the computation of taxable profit. The amount of deferred tax
provided is based on the expected manner of realisation or settlement of the
carrying amount of assets and liabilities, using tax rates enacted or
substantially enacted at the balance sheet date.
Deferred tax liabilities are generally recognised for all taxable temporary
differences and deferred tax assets are recognised only to the extent that it is
probable that future taxable profits will be available against which the asset
can be utilised.
7. Dividends
Equity dividends are recognised when paid or when they become legal obligations
of the company.
8. Property, Plant and Equipment
Property, plant and equipment are stated at cost less accumulated depreciation
and impairment losses.
Depreciation is calculated on the straight-line method so as to write off the
cost of property, plant and equipment reduced by the estimated residual value of
the assets over their estimated useful lives. The annual depreciation rates
used for this purpose are as follows:
Item Annual
Depreciation
Rates
Leasehold premises refurbishment 10-20%
Motor vehicles 20%
Office equipment 20%
9. Intangible assets
Intangible assets are stated at cost less any impairment losses. Intangible
assets are amortised on the straight-line basis.
Software 20%
Franchise 20%
The carrying values of intangible assets are reviewed for impairment when events
or changes in circumstances indicate that the carrying value may not be
recoverable. Amortisation charges are included within administrative expenses.
10. Impairment of Assets
The carrying amounts of non-current assets are reviewed at each balance sheet
date to determine whether there is any indication of impairment. If any such
indication exists, the asset's recoverable amount is estimated. An impairment
loss is recognised whenever the carrying amount of the asset or cash generating
unit exceeds its recoverable amount. Impairment losses are recognised in the
income statements. The recoverable amount is the higher of an asset's net
selling price and its value in use. The net selling price is the amount
obtainable from the sale of an asset in an arm's length transaction. Value in
use is the present value of estimated future cash flows expected to arise from
the continuing use of an asset and from its disposal at the end of its useful
life. Recoverable amounts are estimated for individual assets or, if it is not
possible, for the cash generating unit.
An impairment loss is reversed if there has been a change in the estimates used
to determine the recoverable amount. An impairment loss is reversed only to the
extent that the asset's carrying amount does not exceed the carrying amount that
would have been determined net of depreciation, if no impairment loss had been
recognised. Reversals of impairment losses are recognised in the income
statement.
11. Share Based Payments
The cost of granting share options and other share-based remuneration to
employees and Directors is recognized through the income statement on a
straight-line basis over the vesting period, based on the Group's estimate of
shares that will eventually vest. These share-based payments are measured at
fair value at the date of grant by use of the option pricing model known as the
Black - Scholes formula using assumptions deemed to be consistent with the price
which the incentive might have been worth if it were traded in the open market.
For equity-settled transactions with non-employees, the costs are recognised
through the income statement (or where they relate to issue costs, taken against
the share premium account if appropriate) with measurement normally based on the
fair value of goods or services received.
12. Inventories
Inventories are stated at the lower of cost and net realisable value.
13. Financial Instruments
(a) Trade and other Receivables
Trade receivables do not carry any interest and are stated at their nominal
value as reduced by appropriate allowances for estimated irrecoverable amounts.
Other receivables are initially recognised at fair value and thereafter stated
at amortised cost less provision for impairment. When the effect of discounting
would be immaterial, the receivables are stated at cost less provision for
impairment.
(b) Cash and cash Equivalents
Cash equivalents are short-term, highly liquid investments which are readily
convertible into known amounts of cash and which are subject to an insignificant
risk of changes in value.
(c) Trade and other Payables
Trade payables are not interest bearing and are stated at their nominal value.
Other payables which are normally settled on credit terms are stated at
amortised cost unless the effect of discounting would be immaterial, in which
case they are stated at cost which is the fair value of the consideration to be
paid in the future for goods and services received, whether or not billed to the
Group.
(d) Borrowings
All loans and borrowings which are interest-bearing are initially recognised at
cost, being the fair value of the consideration received net of issue costs
associated with borrowing, and are subsequently measured at amortised cost using
the effective interest rate method. Amortised cost is calculated by taking into
account any issue costs, and any discount or premium on settlement.
Gain and losses are recognised in net profit or loss when liabilities are
derecognised or impaired, as well as through the amortisation process.
(e) Equity instruments
Equity instruments issued by the Company are recorded at the proceeds received,
net of direct issue costs.
14. Critical Accounting Estimates and Judgements
In the process of applying the Group's accounting policies, management makes
various estimates and judgements based on past experience, expectations of the
future and other information. The key sources of estimation uncertainty and the
critical judgements that can significantly affect the amounts recognised in the
financial information are:
(a) Depreciation of property, plant and equipment
Property, plant and equipment are depreciated on a straight-line basis over
their estimated useful lives, after taking account of their estimated residual
values. The determination of the useful lives and residual values involve
management's estimation.
(b) Provision for bad and doubtful debts
The Group continuously monitors collections and payments from its customers and
maintains a provision for estimated credit losses based upon its historical
experience and any specific customer collection issues that it has been
identified.
(c) Income tax
There are certain transactions and calculations for which the ultimate tax
determination is uncertain during the ordinary course of business. Where the
final tax outcome of these matters is different from the amounts that were
initially recorded, such differences will impact the current income tax and
deferred income tax provisions in the year in which such determination is made.
3. Operating Profit
2006 2005
#'000 #'000
This is stated after charging:
Cost of inventories recognised as expenses 2,398 2,502
Share based payments recognised as expenses 29 -
Remuneration of auditors (see note 4) 52 34
Amortisation of intangible assets 24 24
Depreciation of property, plant and equipment 336 323
Staff costs (see note 5) 1,165 1,228
Operating lease expense 582 596
During the year, the Company was admitted to trading on AIM, a market operated
by the London Stock Exchange plc. Costs were incurred relating to this listing.
To the extent that these costs could not be written off against the share
premium account, they have been taken to the income statement as an expense.
4. Analysis of Auditor's Remuneration
2006 2005
#'000 #'000
Audit of these financial statements 18 -
Amounts receivable by associates of the principal auditors in respect
of:
Audit of financial statements of subsidiaries pursuant to legislation 17 -
All other services - receivable by principal auditors 17 -
52 -
5. Staff Costs (including directors)
2006 2005
#'000 #'000
Wages and salaries 1,102 1,033
Social security costs 33 12
Defined contribution pension cost 13 27
Other staff benefits 17 156
Total 1,165 1,228
6. Directors' and Key Management Remuneration
The remuneration of directors and key management personnel is analysed as
follows:
Salary #'000 Benefits #'000 Total #'000 2005 Total #'000
Guangfan Mai 64 - 64 61
Honkeung Shum 21 - 21 21
Xingeng Dong - - - -
Jinbi He - - - -
Yuktong Yip - - - -
Richard Tanner 5 - 5 -
Lauren Lau 5 - 5 -
Hon Yin Cheung 26 - 26 20
Can Hui He 20 - 20 20
Wade Huang 7 - 7 6
Wenlu Xu 10 - 10 10
Wang Chan - - - -
7. Average Number of Employees During the Year
2006 2005
Number Number
Restaurant 272 306
Restaurant Management 56 57
Total 328 363
8. Segment Information
The Group can be divided into two business segments: the restaurants segment and
the restaurant management segment.
2006 2005
#'000 #'000
Revenue Restaurant Segment 5,820 6,247
Restaurant Management Segment 590 1,049
Total 6,410 7,296
Net profit Restaurant Segment 365 818
Restaurant Management Segment (356) 685
Total 9 1,503
Assets Restaurant Segment 4,126 4,437
Restaurant Management Segment 405 332
Total 4,531 4,769
Liabilities Restaurant Segment 1,738 1,612
Restaurant Management Segment 471 187
Total 2,209 1,799
Capital Restaurant Segment 18 147
expenditure
Restaurant Management Segment 2 -
Total 20 147
Depreciation Restaurant Segment 169 346
and
amortisation Restaurant Management Segment 191 1
Total 360 347
2006 2005
Financial ratio - Segmental analysis for the year ended 31 December: % %
Gross profit Restaurant Segment 60% 58%
margin
Restaurant Management Segment 94% 95%
The Group's operations are entirely within the People's Republic of China.
9. Income Tax
Income tax expense is as follows: 2006 2005
#'000 #'000
Current income tax 235 166
Deferred income tax (59) 16
Total 176 182
Deferred tax assets
At beginning of the financial period 14 28
Transfer to/from income statement 52 (16)
Exchange adjustments (1) 2
At end of the financial period 65 14
Deferred tax liabilities
At beginning of the financial period 5 5
Transfer to/from income statement (5) -
Exchange adjustment - -
At end of the financial period - 5
The Group's deferred tax assets arise from the deferral of income and the
deferred tax liabilities arise from temporary differences.
2006 2005
#'000 #'000
Profit before tax 185 1,685
Tax charges at the average rate for the Group (2005 - 12%, 2006- 20%) 37 202
Expenses not deductible for tax purposes 4 9
Assets that can be fully deducted for tax purposes 4 (23)
Expenditure not allowable for tax 112 (6)
Tax on previous years' profits 19 -
Taxation charge 176 182
The companies within the Group are subject to different rates of tax, as set out
below:
The income tax holiday expired at the end of 2005 for Xi'an Prince Restaurant
Co. Limited. Through Management considered that this could be extended to 2008
as long as the Company still satisfies the criteria, this has not been confirmed
by the local tax authority.
The taxation charge for each Group company has been calculated by reference to
the expected effective income tax and deferred tax rates for the full financial
year to end on 31 December 2006 applied against the profit before tax for the
year. The underlying effective full year tax charge for the year including
deferred tax is estimated to be 17.5% for Hong Kong Prince Restaurant Ltd, 15%
for Shenzhen Prince Catering Management Co Ltd, and 33% for Xi'an Prince
Restaurant Co Ltd.
10. Property Plant and Equipment
Cost Leasehold Office Motor Vehicle Total
premises equipment
refurbishment
#'000 #'000 #'000 #'000
At 1 January 2005 2,008 214 8 2,230
Additions 112 35 - 147
Disposals - - (8) (8)
Exchange adjustments 279 31 - 310
At 31 December 2005 2,399 280 - 2,679
Accumulated Depreciation
At 1 January 2005 (334) (41) (3) (378)
Charge for the year (274) (49) - (323)
Disposals - - 3 3
Exchange adjustments (63) (10) - (73)
At 31 December 2005 (671) (100) - (771)
Net book value
At 31 December 2005 1,728 180 - 1,908
Cost Leasehold Office Total
premises equipment
refurbishment
#'000 #'000 #'000
At 1 January 2006 2,399 280 2,679
Additions - 20 20
Disposals - (1) (1)
Exchange adjustments (236) (24) (260)
At 31 December 2006 2,163 275 2,438
Accumulated Depreciation
At 1 January 2006 (671) (100) (771)
Charge for the year (232) (104) (336)
Exchange adjustments 50 47 97
At 31 December 2006 (853) (157) (1,010)
Net book value
At 31 December 2006 1,310 118 1,428
11. Intangible Assets
2006 2005
#'000 #'000
Cost
At 1 January 126 112
Exchange adjustments (12) 14
At 31 December 114 126
Accumulated Amortisation
At 1 January (82) (50)
Charge for the year (24) (24)
Exchange adjustments 8 (8)
At 31 December (98) (82)
Net book value
At 31 December 16 44
Intangible assets comprise software and franchises.
12. Group Companies
The holding company holds 20% or more of the share capital of the following
companies, all of which are included in the consolidation:
Company Place and date of Nature of Business Class Shares Held
incorporation %
Hong Kong Prince Restaurant Incorporated 9 June 2000 in Restaurant operator Ordinary 51%
Co Ltd Hong Kong
Shenzhen Prince Catering Incorporated 26 July 2004 in Restaurant Ordinary 100%
Management Ltd the Peoples Republic of China management
Xi'an Prince Restaurant Co Ltd Incorporated 20 November 2002 Restaurant operator Ordinary 100%
in the Peoples Republic of
China
All of the subsidiaries are located in the People's Republic of China and all
shareholdings are held directly.
On 16 December 2005, the holding company acquired Xian Prince Restaurant Co
Limited for RMB23 million.
On 19 December 2005, the holding company acquired Shenzhen Prince Catering
Management Co Limited for RMB2.88 million.
On 26 July 2006, the holding company acquired a 51% stake in Hong Kong Prince
Restaurant Co Limited for HK$1.
These three acquisitions have been accounted for using the pooling method (see
note 2).
13. Inventories
2006 2005
#'000 #'000
At cost
Raw materials 214 289
14. Trade and other Receivables
2006 2005
#'000 #'000
Trade receivables 120 249
Other receivables 1,794 1,647
Advances to suppliers 38 5
Other advances 15 21
Total 1,967 1,922
During the year #120,000 was written off against balances owing.
15. Cash and Cash Equivalents
2006 2005
#'000 #'000
Cash at bank and in hand 841 592
16. Trade and other Payables
2006 2005
#'000 #'000
Trade payables 620 619
Payments received in advance 394 528
Staff costs payable 117 126
Other tax payable 155 7
Accrued expenses 114 104
Other payables 635 178
Dividends Payable - 124
Income tax payable 147 62
Deferred Tax Liability - 5
Deferred income 27 46
Total 2,209 1,799
17. Related Parties
Amounts due from and to related parties are as follows:
Trade and other receivables 2006 2005
#'000 #'000
Xi'an Prince Restaurant Investment
Management Co Ltd - 833
Prince Overseas Investment Ltd - 211
Xi'an Mai Ke Metal International Group Co Ltd 164 -
Xi'an Mai Ke Investment Holding Group 1 2
Xi'an Prince Health Co Ltd - 2
Shenzhen Prince Restaurant Co Ltd 51 47
Zhong Shan Prince Restaurant Co Ltd - 7
Xi'an Prince Seafood Co Ltd - -
Mai Guangfan 4 4
Prince Hotel 27 -
Xian Platinum Prince Restaurant Co Ltd 98 -
Prince Bar 4 -
Xian Prince Catering Investment Management Group Co Ltd 1,115 -
Dong Zingen 3 -
Shenzhen Mai Guangfan Catering Management Co Ltd 9 -
Shenzhen Prince State Banquet Restaurant Co Ltd 10 -
Feng Deming 1 -
Ye Xutang 1 -
Hua Kai Group Co Ltd 1 -
Shenzehn Jiyue Investment Co Ltd 1 -
1,490 1,106
Trade and other payables 2006 2005
#'000 #'000
Xi'an Mai Ke Metal International
Group Co Ltd 117 40
Prince Bar 4 -
Prince Hotel 13 -
134 40
In addition to the related party information disclosed elsewhere in the
financial information, significant transactions during the financial years with
related parties, at rates and terms agreed between the parties were as follows:
Provision of goods and services to: 2006 2005
#'000 #'000
Xi'an Prince Restaurant Investment
Management Group Co Ltd 59 212
Xi'an Mai Ke Metal International
Group Co Ltd - 4
Xi'an Mai Ke Enterprise Co Ltd - 22
Xi'an Prince Health Co Ltd - 146
Shenzhen Prince Restaurant Co Ltd 73 110
Xian Platinum Prince Restaurant Co Ltd 102 -
Shenzhen Prince State Banquet Restaurant Co Ltd 89 -
Zhong Shan Prince Restaurant Co Ltd - 172
323 666
Rental expense paid to: 2006 2005
#'000 #'000
Xi'an Mai Ke Metal International
Group Co Ltd 340 336
Purchases of goods from: 2006 2005
#'000 #'000
Xi'an Prince Restaurant Investment
Management Group Co Ltd 30 -
Loan to: 2006 2005
#'000 #'000
Xian Prince Catering Investment
Management Group Co Ltd 88 -
During the year #51,000 was written off against balances owing from Shenzhen
Prince Restaurant Co Limited
None of the balances with related parties are secured and none of them is
interest bearing.
18. Share Capital
Authorised
156,250,000 ordinary shares of US$0.04 each (2005: 50,000 ordinary shares of US$1 each)
Issued and fully paid
85,875,497 ordinary shares of US$0.04 each (2005: 50,000 ordinary shares of US$1 each)
On incorporation, 6 June 2005, 50,000 ordinary shares of US$1 each were issued
for cash at US$1 per share.
On 29 June 2006 the Company's authorised share capital was increased to
US$3,250,000 divided into 3,250,000 ordinary shares by the creation of an
additional 3,200,000 shares of US$1 each.
On 30 June 2006, a further 3,200,000 shares were allotted.
On 15 August 2006, each of the ordinary shares of par value US$1 was subdivided
into 25 shares of par value US$0.04 each.
On 31 August 2006, 4,625,497 new ordinary shares of US$0.04 each were issued at
9.25p per share when the Company was admitted to the Alternative Investment
Market.
The changes in issued share capital are as follows:
Number of Nominal Value
Shares
(000's) #'000
6 June 2005: Share issue on incorporation 50 26
30 June 2006: Allotment of shares 3,200 1,636
15 August 2006: Shares sub divided into US$0.04 shares 81,250 -
31 August 2006: Share issue on admission to AIM 4,626 94
Ordinary shares in issue at 31 December 2006 85,876 1,756
The share capital at 31 December 2005 has been calculated using the pooling of
interest method and translated into sterling at the exchange rate at that date.
Warrants
On 31 August 2006 the Company executed a warrant instrument in favour of WH
Ireland which gives WH Ireland the right to subscribe 3,435,037 ordinary shares
at 9.25p for a period of three years from 31 August 2006. The estimated value of
services provided was #29,000 which has been charged within the issue costs for
the flotation.
19. Reserves
The movements in reserves are shown in the Statement of Changes in Equity.
The following describes the nature and purpose of each reserve within equity.
Included in other reserves is a statutory surplus reserve and statutory public
welfare fund.
Statutory Surplus Reserve
According to the relevant PRC regulations and the Articles of Association,
certain companies within the Group are required to transfer 10% of their profit
after income tax, as determined under PRC GAAP, to the statutory surplus reserve
until the reserve balance reaches 50% of a company's registered capital. The
transfer to this reserve must be made before the distribution of dividends to
equity owners. Statutory surplus reserve can be used to make up previous years'
losses, if any, and may be converted into paid up capital in proportion to the
existing interests of equity owners, provided that the balance after such
conversion is not less than 25% of the registered capital.
Statutory Public Welfare Fund
According to the relevant PRC regulations and the Articles of Association,
certain companies within the Group are required to transfer 5% of their profit
after income tax, as determined under PRC GAAP, to the statutory public welfare
fund. The statutory public welfare fund is incorporated for the purpose of
providing employee facilities and other collective benefits to employees.
Foreign Currency Translation Reserve
Foreign exchange differences arising on translation of the net assets of foreign
operations into RMB and Sterling are transferred to the foreign currency
translation reserve.
Retained Earnings
Cumulative net gains and losses recognised in the combined income statement are
transferred to retained earnings.
Pooling reserve
The Pooling Reserve arose as a result of the consolidation of the Group using
the pooling of interests method.
Warrants Reserve
Warrants Reserve represents the fair value of the warrants in issue at the date
of grant.
20. Financial Instruments
The Group is exposed to interest rate, foreign exchange and other market risk in
the ordinary course of business. The Group does not hold or issue derivative
financial instruments for trading purposes or to hedge against fluctuations.
Liquidity risk
The Group maintains sufficient cash and liquid assets and the availability of
funding through an adequate amount of committed credit facilities, so the
Group's liquidity risk is minimal.
Credit risk
The Group's credit risk is primarily attributable to its trade and other
receivables. The credit risk on trade receivables is low because from past
experience, customers seldom default
Interest rate risk
The interest rate risk is very low as the Group has no significant bank
borrowings
21. Controlling Party
The Controlling party and ultimate controlling party, is Mr Jinbi He and Ms
Zhang Chunling.
22. Operating Lease Arrangements
At the balance sheet date, the Group had outstanding commitments for future
minimum lease payments under non-cancellable operating leases, which fall due as
follows:
2006 2005
#'000 #'000
Within one year 5 568
In the second to fifth year inclusive 577 1,054
582 1,622
23. Earnings Per Share
Basic Earnings per Share
Basic earnings per share is calculated by dividing the profit attributable to
equity holders of the Company by the weighted average number of ordinary shares
in issue during the year.
2006 2005
#'000 #'000
Profit (loss) attributable to the equity holders of the company (#'000) (112) 1353
Weighted average number of ordinary shares in issue (number '000) 82,791 81,250
Earnings (loss) per share (p/share) (0.1p) 1.7p
Diluted Earnings per Share
Company has one category of dilutive potential ordinary shares - warrants.
Calculation is done to determine the number of shares that could have been
acquired at fair value.
2006 2005
#'000 #'000
Profit (loss) attributable to the equity holders of the company (#'000) (112) 1,353
Weighted average number of ordinary shares in issue (number '000) 82,791 81,250
Adjustment for warrants (number '000) 158 -
Weighted average number of ordinary shares for diluted earnings 82,949 81,250
(number '000)
Diluted Earnings (loss) per share (p/share) (0.1p) 1.7p
Annual Report and Accounts
Copies of the Annual Report and Accounts for the year ended 31 December 2006
will be posted to shareholders by 30 June 2007 and will be available, free of
charge, from the offices of the Company's Nominated Adviser, WH Ireland Limited,
11 St James's Square, Manchester, M2 6WH for a period of 14 days from the date
of their posting. The Company's Annual General Meeting will be convened in due
course and notified to shareholders separately.
This information is provided by RNS
The company news service from the London Stock Exchange
END
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