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| Share Name | Share Symbol | Market | Type | Share ISIN | Share Description |
|---|---|---|---|---|---|
| Yinggao Hldgs | LSE:YGH | London | Ordinary Share | GB0003754743 | ORD 0.5P |
| Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
|---|---|---|---|---|---|---|---|---|---|---|
| 0.00 | 0.00% | 1.75 | 0.00 | 01:00:00 |
| Industry Sector | Turnover | Profit | EPS - Basic | PE Ratio | Market Cap |
|---|---|---|---|---|---|
| 0 | 0 | N/A | 0 |
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TIDMYGH
RNS Number : 0545N
Yinggao Holdings PLC
03 June 2010
Yinggao Holdings plc
('the Company' or 'Yinggao')
Annual Results
The Board of Yinggao announces the results of the Company for the year ended 31
December 2009, which are set out below. These will be despatched to shareholders
shortly.
Copies of these financial statements will be available from the offices of
Daniel Stewart & Company Plc, Becket House, 36 Old Jewry, London EC2R 8DD. A
copy will also be available on the Company's website www.yinggaoholdings.com.
The AGM will be held at the offices of Baker Tilly LLP at 2 Bloomsbury Street,
London WC1B 3ST on 30 June 2010 at 12:00 noon.
For further information:
Angela Leung
Tel: + 852 2219 9999
Yinggao Holdings plc
www.yinggaoholdings.com
Paul Shackleton
Tel: + 44 (0) 207 776 6550
Daniel Stewart & Company plc
www.danielstewart.co.uk
CHAIRMAN'S STATEMENT
I am pleased to present the financial statements for the year ended 31 December
2009. I took the position of Chairman following the retirement of Qin Shun
Chao in September 2009. I would like to take this opportunity to express my
sincere gratitude on behalf of the board to Mr. Qin for his five years of
service in the Company. Mr. Qin sadly passed away in March 2010.
Financial Results
Group turnover for the year ended 31 December 2009 increased by 65% to US$23.6
million (2008:US$14.3 million). Earnings before interest, tax, depreciation and
amortisation (EBITDA) rose to US$12.0 million (2008: US$3.2 million). The
profit before taxation was US$10.0 million (2008: US$1.3 million) after an
exceptional item on the gain on disposals of subsidiaries of US$6.6 million is
taken into account (2008: US$ nil). The profit after taxation was US$9.6
million (2008: US$1.1 million). The resulting basic profit per share was US$
cents 0.44 (2008: US$ 0.02).
Our gross margin, which is calculated by deducting the variable cost of sales
and the relatively fixed costs of operating the barges and container terminal
from revenue, was US$7.1 million (2008: US$4.5 million). This substantial
increase was as a direct result of higher revenues from both Keen Chance
Terminal and Yinggao Shipping. Although in percentage terms the gross margin
was maintained at 29.9% of revenue (2008: 31.1%).
As of 31 December 2009, the net cash position continued to improve at US$1.4
million (2008: US$0.4 million). Net cash generated from operating activities
for the period was US$7.7 million (2008: US$2.8 million). Trade receivables
increased to US$2.8 million (2008: US$2.7 million) for the period, in which the
trade debtors increased 5% and the obligation under finance leases increased
37.6%. The net cash outflow for the period of US$5.4 million (2008: US$2
million) was impacted by the purchase of property, plant and equipment.
Revenues have grown from both segments of our continuing operations resulting in
a 65% overall increase. We disposed of badly performing subsidiaries in
September 2009, resulting in a gain from disposals of US$6.6 million. As we
indicated at the time of that disposal this had the double benefit of removing a
non-profit generating business whilst setting aside liabilities that sit in the
disposed group.
A combination of increased revenues, continued high gross margin and strong
control of costs resulted in a profit after tax of US$3.0 million excluding the
exceptional items of US$6.6 million, an increase of 200% compared to the prior
year (2008: US$1.1 million).
The Board does not recommend the payment of a dividend (2008:US$ nil).
Operational Review
Despite a reduction in market activity in the last quarter of year 2009,
container terminal revenues of US$14.6 million increased by 18.7% compared to
the previous year (2008 - US$12.3 million). Overall there was a reasonable
increase in throughput of14.7%, which was 0.39 million TEU (2008: 0.34 million
TEU). Underlying operating profits increased by 3.3% to US$2.3 million (2008:
US$2.2 million), due principally to the impact of stable growth in turnover and
a reduction in general and administrative expenses. Operating margins were
similar to last year at 16%, although throughput in bulk cargos has dropped by
28% which was offset by the increase in throughput in containers by 16.8%
Turnover in barging services has substantially increased by 340% to US$9 million
(2008: US$2.1 million) reflecting the higher average number of vessels in our
fleet, and our increasingly effective utilisation of that fleet. The vessel
operating expenses increased to a total of US$7.7 millioncompared to US$2.9
million in 2008 mainly as the result of the larger fleet size and the overall
increase in the number of voyages made as well as the increased handling
capacity of each vessel. The profit margin has grown by 133.9% to 13.7% (2008:
loss 40.4%).
Outlook
During the year there were two main elements to the progress. Firstly, the
excellent developments we have made in growing our core business. Secondly, the
rapid growth in carrying capacity of our vessels in our fleet accelerated the
increase in turnover of our barging service. The '32' series vessels each with
a capacity of 228TEU represented the largest size of similar form of vessel
running the corridor between Huangpu and Hong Kong. The high carrying capacity
of our fleet, coupled with the strength of our specialist team managing the
fleet, means we are well placed to trade through the challenging market
conditions still being experienced.
As our market share in the industry is relatively low, we believe there is
considerable room for growth in this sector. The Group will benefit from the
plan of its majority shareholder to construct around 10 vessels each with a
capacity of 228TEU each year. These vessels will then be leased to the Group.
With the benefit of this arrangement, we are now in a much stronger position
when pursuing Connecting Carrier Agreements ("CCA") with the worldwide container
liner companies.
Although the recent recovery in global markets remains uncertain, the
performance of our container terminal business in the first quarter of year 2010
leads us to believe that steady growth for the whole year can be anticipated.
Taking advantage on the lease finance provided by the machinery and equipment
supplier, Sany Group Co. Ltd., we have now established a strong and long term
partnership with them and most of the profits generated from the terminal
operation itself will be used for the future procurement of machinery and
equipment to expand our facilities. During 2010, we expect to complete
the extension of the adjacent quay, as well as the commencement of operation of
the new 45 tonnes quayside container crane. This will provide a robust platform
for the expansion of throughput. Orders for the procurement of three sets of
quayside container cranesand four sets of rail-mounted container cranes have
been placed and delivery is expected progressively by the end of this year.
With the permission granted by the relevant authorities for the extension of the
main quay, the number of berths at the terminal will be significantly
increased.
Appreciation
The board would again like to thank all staff for the commitment,
professionalism and loyalty they have shown during the last twelve months.
Leung Suk Ching, Angela
Chairman
2 June 2010
DIRECTORS' REPORT
The directors submit their report and the financial statements of Yinggao
Holdings plc for the year ended 31 December 2009.
The principal activities of the Group during the year were terminal operation
and barging service provision.
Pursuant to a written resolution of the shareholders of the company in writing
signed on 24 August 2009, the company's name was changed from Arko Holdings plc
to Yinggao Holdings plc.
A review of the business and future developments is given in the Chairman's
statement.
RISKS AND UNCERTAINITIES
The management of the business and the execution of the Group's strategy are
subject to a number of risks.
The key business risks affecting the Group are considered to relate to
competition from other shipping agents and employee retention.
Competition
The Group operates in a highly competitive market particularly around price and
service availability/quality. This results not only in downward pressure on our
margins but also in the risk that we will not meet our customers' expectations.
In order to mitigate this risk, management monitors market prices on an ongoing
basis so as to keep prices competitive.
Employees
The Group's performance depends largely on regional managers and local staff.
The resignation of key individuals and the inability to recruit people with the
right experience and skills could adversely impact the Group's results. To
mitigate these issues, the Group has implemented schemes linked to the Group's
results that are designed to retain key individuals.
KEY PERFORMANCE INDICATORS (KPIS)
There has been significant progress in the year on the Group's overriding
objective of revenue growth. The board monitors progress with respect to the
Group's strategy by reference to five KPIs.
Performance during the year, together with historical trend data is set out in
the following table:
+---------------------------+------------+----------+
| | 2009 | 2008 |
+---------------------------+------------+----------+
| Growth in sales (%) | 64.78% | 31.68% |
+---------------------------+------------+----------+
| Gross margin (%) | 29.92% | 31.11% |
+---------------------------+------------+----------+
| Net profit margin (%) | 40.66% | 7.46% |
+---------------------------+------------+----------+
| Net current ratio |1.48 times | 1.73 |
| | | times |
+---------------------------+------------+----------+
| Return on invested | 26.50% | 3.56% |
| capital (%) | | |
+---------------------------+------------+----------+
The following directors have held office since 1 January 2009:
+--------------------------------------------------------------------------------+
| LEUNG Suk Ching, Angela |
+--------------------------------------------------------------------------------+
| LIU Sheng Rong |
+--------------------------------------------------------------------------------+
| FENG Yue Ying (Appointed on 26 March 2009) |
+--------------------------------------------------------------------------------+
| CHAN Ping Kwan (Appointed on 18 September 2009) |
+--------------------------------------------------------------------------------+
| David THOMAS |
+--------------------------------------------------------------------------------+
| QIN Shun Chao (Resigned on 18 September 2009) |
+--------------------------------------------------------------------------------+
| ZHANG Jing (Resigned on 26 March 2009) |
+--------------------------------------------------------------------------------+
DIRECTORS' INTERESTS IN THE SHARES OF THE COMPANY
The directors who served the Company during the year together with their
beneficial interests, including family holdings, in the shares of the Company
were as follows:
+-----------------------------------+---------------+-------------------+
| | Ordinary shares |
+-----------------------------------+-----------------------------------+
| | At 31 | At 1 January |
| | December 2009 | 2009 |
+-----------------------------------+---------------+-------------------+
| | | |
+-----------------------------------+---------------+-------------------+
| LEUNG Suk Ching, Angela | 870,000 | 870,000 |
+-----------------------------------+---------------+-------------------+
| LIU Sheng Rong | - | - |
+-----------------------------------+---------------+-------------------+
| QIN Shun Chao | - | - |
+-----------------------------------+---------------+-------------------+
| CHAN Ping Kwan | - | - |
+-----------------------------------+---------------+-------------------+
| David THOMAS | - | - |
+-----------------------------------+---------------+-------------------+
| FENG Yue Ying | - | - |
+-----------------------------------+---------------+-------------------+
CORPORATE GOVERNANCE
In recognising the need for the highest standards of corporate behaviour and
accountability, the directors of Yinggao Holdings plc support the principles of
good corporate governance. The Company has appointed an audit committee, which
comprises the two independent non-executive directors, Mr David Thomas and Mr
Liu Sheng Rong. The primary duties of the audit committee are to review and
supervise the financial reporting and internal control procedures of the
Group.Due to the size of the staff of the Group, it has been decided unanimously
by the board that the remuneration committee will be dispensed with for the time
being and matters involving any changes to the remuneration to the directors or
senior employees will be determined by the board as a whole (with no director
being involved in the consideration of his own remuneration).
Employees
Group management are committed to training and motivating staff, and offering
promotional prospects where possible. Where appropriate, company information is
shared with staff, and employees are encouraged to work towards a continual
improvement in the Group's performance.
ENVIRONMENT POLICY
The Group is committed to operating in an environmentally responsible manner and
endeavours to adopt the best practicable means to reduce or eliminate polluting
releases to the environment, or in the disposal of waste products. The Group is
committed to complying with environmental legislative requirements.
DIRECTORS' INDEMNITY INSURANCE
The directors have not taken out an insurance policy to cover directors' and
officers' liabilities. The Articles of Association of the Company permit the
Company to indemnify directors to the extent permitted by the Companies Act.
SUBSTANTIAL INTERESTS
At the date of this report, the Company had been notified of the following
substantial interest in the shares of the Company:
Chin Dynasty Foundation - 1,821,776,422 shares in the Company (92.06%) through
Keen Lloyd Holdings Limited, a company incorporated in the British Virgin
Islands.
CREDITOR PAYMENT POLICY
In order to maintain good relationships with major suppliers, it is the Group's
policy to settle payment to creditors within the negotiated credit terms. The
Group's creditor payment days in 2009 have been shortened to approximately 12
days (2008: 36 days).
FINANCIAL INSTRUMENTS
Disclosures in respect of the Group's financial risk objectives and policies are
set out in note 25 to the financial statements.
STATEMENT AS TO DISCLOSURE INFORMATION TO THE AUDITOR
The directors who were in office on the date of approval of these financial
statements have confirmed that, as far as they are aware, there is no relevant
audit information of which the auditor is unaware. Each of the directors have
confirmed that they have taken all the steps that they ought to have taken as
directors in order to make themselves aware of any relevant audit information
and to establish that it has been communicated to the auditor.
By order of the board
Leung Suk Ching, Angela
Chairman
2 June 2010
STATEMENT OF DIRECTORS' RESPONSIBILITIES
The directors are responsible for preparing the Directors' Report and the
financial statements in accordance with applicable law and regulations.
Company law requires the directors to prepare group and company Financial
Statements for each financial year. The directors are required by the AIM Rules
of the London Stock Exchange to prepare group financial statements in accordance
with International Financial Reporting Standards ("IFRS") as adopted by the
European Union ("EU") and have elected under Company law to prepare the company
financial statements in accordance with IFRS as adopted by the EU.
The financial statements are required by law and IFRS adopted by the EU to
present fairly the financial position of the group and the company and the
financial performance of the group. The Companies Act 2006 provides in relation
to such financial statements that references in the relevant part of that Act to
financial statements giving a true and fair view are references to their
achieving a fair presentation.
Under company law the directors must not approve the financial statements unless
they are satisfied that they give a true and fair view of the state of affairs
of the group and the company and of the profit or loss of the group for that
period.
In preparing the group and company financial statements, the directors are
required to:
a. select suitable accounting policies and then apply them consistently;
b. make judgements and estimates that are reasonable and prudent;
c. state whether they have been prepared in accordance with IFRSs adopted by
the EU;
d. prepare the financial statements on the going concern basis unless it is
inappropriate to presume that the group and the company will continue in
business.
The directors are responsible for keeping adequate accounting records that are
sufficient to show and explain the group's and the company's transactions and
disclose with reasonable accuracy at any time the financial position of the
group and the company and enable them to ensure that the financial statements
comply with the Companies Act 2006. They are also responsible for safeguarding
the assets of the group and the company and hence for taking reasonable steps
for the prevention and detection of fraud and other irregularities.
CONSOLIDATED INCOME STATEMENT
FOR THE YEAR ENDED 31 DECEMBER 2009
(Expressed in United States dollars)
+----------------------------------+---------+----------+--+----------+----------+
| | | 2009 | | 2008 | |
+----------------------------------+---------+----------+--+----------+----------+
| | Notes | US$'000 | | US$'000 | |
+----------------------------------+---------+----------+--+----------+----------+
| | | | | | |
+----------------------------------+---------+----------+--+----------+----------+
| Revenue | 4 | 23,563 | | 14,300 | |
+----------------------------------+---------+----------+--+----------+----------+
| Cost of sales | | (16,513 | )| (9,850 | ) |
+----------------------------------+---------+----------+--+----------+----------+
| | | | | | |
+----------------------------------+---------+----------+--+----------+----------+
| Gross profit | | 7,050 | | 4,450 | |
+----------------------------------+---------+----------+--+----------+----------+
| Other income | 5 | 398 | | 155 | |
+----------------------------------+---------+----------+--+----------+----------+
| Gain on disposals of | 14 | 6,598 | | - | |
| subsidiaries | | | | | |
+----------------------------------+---------+----------+--+----------+----------+
| Administrative expenses | | (3,970 | )| (3,114 | ) |
+----------------------------------+---------+----------+--+----------+----------+
| | | | | | |
+----------------------------------+---------+----------+--+----------+----------+
| Profit from operations | | 10,076 | | 1,491 | |
+----------------------------------+---------+----------+--+----------+----------+
| Finance costs | 6(a) | (80 | )| (176 | ) |
+----------------------------------+---------+----------+--+----------+----------+
| | | | | | |
+----------------------------------+---------+----------+--+----------+----------+
| Profit before taxation | 6 | 9,996 | | 1,315 | |
+----------------------------------+---------+----------+--+----------+----------+
| Taxation | 7 | (416 | )| (247 | ) |
+----------------------------------+---------+----------+--+----------+----------+
| | | | | | |
+----------------------------------+---------+----------+--+----------+----------+
| Profit for the year | | 9,580 | | 1,068 | |
+----------------------------------+---------+----------+--+----------+----------+
| | | | | | |
+----------------------------------+---------+----------+--+----------+----------+
| | | | | | |
+----------------------------------+---------+----------+--+----------+----------+
| Attributable to : | | | | | |
+----------------------------------+---------+----------+--+----------+----------+
| Owners of the parent | | 8,751 | | 360 | |
+----------------------------------+---------+----------+--+----------+----------+
| Non-controlling interests | | 829 | | 708 | |
+----------------------------------+---------+----------+--+----------+----------+
| | | | | | |
+----------------------------------+---------+----------+--+----------+----------+
| | | 9,580 | | 1,068 | |
+----------------------------------+---------+----------+--+----------+----------+
| | | | | | |
+----------------------------------+---------+----------+--+----------+----------+
| | | | | | |
+----------------------------------+---------+----------+--+----------+----------+
| | | US cents | | US cents | |
+----------------------------------+---------+----------+--+----------+----------+
| | | | | | |
+----------------------------------+---------+----------+--+----------+----------+
| Earnings per share | | | | | |
+----------------------------------+---------+----------+--+----------+----------+
| - Basic and diluted | 10 | 0.44 | | 0.02 | |
+----------------------------------+---------+----------+--+----------+----------+
| | | | | | |
+----------------------------------+---------+----------+--+----------+----------+
| | | | | | |
+----------------------------------+---------+----------+--+----------+----------+
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEAR ENDED 31 DECEMBER 2009
(Expressed in United States dollars)
+--------------------------------------------+-+---------+--+---------+----------+
| | | 2009 | | 2008 | |
+--------------------------------------------+-+---------+--+---------+----------+
| | | US$'000 | | US$'000 | |
+--------------------------------------------+-+---------+--+---------+----------+
| | | | | | |
+--------------------------------------------+-+---------+--+---------+----------+
| Profit for the year | | 9,580 | | 1,068 | |
+--------------------------------------------+-+---------+--+---------+----------+
| | | | | | |
+--------------------------------------------+-+---------+--+---------+----------+
| Other comprehensive income for the year | | | | | |
+--------------------------------------------+-+---------+--+---------+----------+
| Exchange differences arising on | | (3 | )| 1,297 | |
| translation of foreign operations | | | | | |
+--------------------------------------------+-+---------+--+---------+----------+
| | | | | | |
+--------------------------------------------+-+---------+--+---------+----------+
| Total comprehensive income for the year | | 9,577 | | 2,365 | |
+--------------------------------------------+-+---------+--+---------+----------+
| | | | | | |
+--------------------------------------------+-+---------+--+---------+----------+
| | | | | | |
+--------------------------------------------+-+---------+--+---------+----------+
| Total comprehensive income attributable | | | | | |
| to: | | | | | |
+--------------------------------------------+-+---------+--+---------+----------+
| Owners of the parent | | 8,748 | | 1,323 | |
+--------------------------------------------+-+---------+--+---------+----------+
| Non-controlling interests | | 829 | | 1,042 | |
+--------------------------------------------+-+---------+--+---------+----------+
| | | | | | |
+--------------------------------------------+-+---------+--+---------+----------+
| | | 9,577 | | 2,365 | |
+--------------------------------------------+-+---------+--+---------+----------+
| | | | | | |
+--------------------------------------------+-+---------+--+---------+----------+
| | | | | | |
+--------------------------------------------+-+---------+--+---------+----------+
BALANCE SHEETS
AS AT 31 DECEMBER 2009
(Expressed in United States dollars)
+----------------------------+-----+--+----------+-----------+---------+---------+
| | | Group | Company |
+----------------------------+--------+----------------------+-------------------+
| | Notes | 2009 | 2008 | 2009 | 2008 |
| | | US$'000 | US$'000 | US$'000 | US$'000 |
+----------------------------+--------+----------+-----------+---------+---------+
| NON-CURRENT ASSETS | | | | | |
+----------------------------+--------+----------+-----------+---------+---------+
| Goodwill | 11 | 1,835 | 1,835 | - | - |
+----------------------------+--------+----------+-----------+---------+---------+
| Property, plant and | 12 | 32,086 | 27,375 | - | - |
| equipment | | | | | |
+----------------------------+--------+----------+-----------+---------+---------+
| Investments in | 13 | - | - | 29,435 | 18,756 |
| subsidiaries | | | | | |
+----------------------------+--------+----------+-----------+---------+---------+
| Available-for-sale | 15 | - | 12 | - | - |
| investment | | | | | |
+----------------------------+--------+----------+-----------+---------+---------+
| | | | | | |
+----------------------------+--------+----------+-----------+---------+---------+
| | | 33,921 | 29,222 | 29,435 | 18,756 |
+----------------------------+--------+----------+-----------+---------+---------+
| CURRENT ASSETS | | | | | |
+----------------------------+--------+----------+-----------+---------+---------+
| Inventories | 16 | 156 | 137 | - | - |
+----------------------------+--------+----------+-----------+---------+---------+
| Trade and other | 17 | 8,203 | 8,103 | 1 | 1 |
| receivables | | | | | |
+----------------------------+--------+----------+-----------+---------+---------+
| Amounts due from | | - | - | 294 | 120 |
| subsidiaries | | | | | |
+----------------------------+--------+----------+-----------+---------+---------+
| Cash and cash equivalents | 18 | 2,165 | 780 | 11 | 2 |
+----------------------------+--------+----------+-----------+---------+---------+
| | | | | | |
+----------------------------+--------+----------+-----------+---------+---------+
| | | 10,524 | 9,020 | 306 | 123 |
+----------------------------+--------+----------+-----------+---------+---------+
| CURRENT LIABILITIES | | | | | |
+----------------------------+--------+----------+-----------+---------+---------+
| Trade and other payables | 19 | 5,318 | 3,907 | 93 | 31 |
+----------------------------+--------+----------+-----------+---------+---------+
| Amounts due to | | - | - | 2,520 | 1,916 |
| subsidiaries | | | | | |
+----------------------------+--------+----------+-----------+---------+---------+
| Obligations under finance | 20 | 870 | 599 | - | - |
| leases | | | | | |
+----------------------------+--------+----------+-----------+---------+---------+
| Taxation | | 916 | 695 | - | - |
+----------------------------+--------+----------+-----------+---------+---------+
| | | | | | |
+----------------------------+--------+----------+-----------+---------+---------+
| | | 7,104 | 5,201 | 2,613 | 1,947 |
+----------------------------+--------+----------+-----------+---------+---------+
| | | | | | |
+----------------------------+--------+----------+-----------+---------+---------+
| NET CURRENT | | 3,420 | 3,819 | (2,307) | (1,824) |
| ASSETS/(LIABILITIES) | | | | | |
+----------------------------------+--+----------+-----------+---------+---------+
| | | | | | |
+----------------------------+--------+----------+-----------+---------+---------+
| TOTAL ASSETS LESS CURRENT | | | | | |
+----------------------------+--------+----------+-----------+---------+---------+
| LIABILITIES | | 37,341 | 33,041 | 27,128 | 16,932 |
+----------------------------+--------+----------+-----------+---------+---------+
| | | | | | |
+----------------------------+--------+----------+-----------+---------+---------+
| NON CURRENT LIABILITIES | | | | | |
+----------------------------+--------+----------+-----------+---------+---------+
| Bank loan | 21 | - | 1,915 | - | - |
+----------------------------+--------+----------+-----------+---------+---------+
| Obligations under finance | 20 | 408 | 330 | - | - |
| leases | | | | | |
+----------------------------+--------+----------+-----------+---------+---------+
| Loans from fellow | | | | | |
| investors in | | | | | |
+----------------------------+--------+----------+-----------+---------+---------+
| subsidiaries | 22 | 718 | 787 | - | - |
+----------------------------+--------+----------+-----------+---------+---------+
| Deferred tax liabilities | 23 | 68 | - | - | - |
+----------------------------+--------+----------+-----------+---------+---------+
| | | | | | |
+----------------------------+--------+----------+-----------+---------+---------+
| | | 1,194 | 3,032 | - | - |
+----------------------------+--------+----------+-----------+---------+---------+
| | | | | | |
+----------------------------+--------+----------+-----------+---------+---------+
| NET ASSETS | | 36,147 | 30,009 | 27,128 | 16,932 |
+----------------------------+--------+----------+-----------+---------+---------+
| | | | | | |
+----------------------------+--------+----------+-----------+---------+---------+
| EQUITY | | | | | |
+----------------------------+--------+----------+-----------+---------+---------+
| Share capital | 24(a) | 14,922 | 14,922 | 14,922 | 14,922 |
+----------------------------+--------+----------+-----------+---------+---------+
| Reserves | | 11,152 | 2,010 | 12,206 | 2,010 |
+----------------------------+--------+----------+-----------+---------+---------+
| Total equity attributable | | | | | |
| to | | | | | |
+----------------------------+--------+----------+-----------+---------+---------+
| owners of the parent | | 26,074 | 16,932 | 27,128 | 16,932 |
+----------------------------+--------+----------+-----------+---------+---------+
| | | | | | |
+----------------------------+--------+----------+-----------+---------+---------+
| Non-controlling interests | | 10,073 | 13,077 | - | - |
+----------------------------+--------+----------+-----------+---------+---------+
| | | | | | |
+----------------------------+--------+----------+-----------+---------+---------+
| TOTAL EQUITY | | 36,147 | 30,009 | 27,128 | 16,932 |
+----------------------------+--------+----------+-----------+---------+---------+
| | | | | | | |
+----------------------------+-----+--+----------+-----------+---------+---------+
STATEMENTS OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 DECEMBER 2009
(Expressed in United States Dollars)
+-----------------------+---------+---------+-----------+---------+----------+-------------+---------+-----------------+---------+
| | Attributable to owners of the Parent | | |
+-----------------------+----------------------------------------------------------------------------+-----------------+---------+
| | | | (Note | | | | Total | | |
| | | | i) | (Note | | | | Non-controlling | |
| | Share | Share | Statutory | ii) | Exchange | Accumulated | | interest | Total |
| | capital | premium | surplus | Merger | reserve | losses | | | equity |
| | | | reserve | reserve | | | | | |
+-----------------------+---------+---------+-----------+---------+----------+-------------+---------+-----------------+---------+
| Group | US$'000 | US$'000 | US$'000 | US$'000 | US$'000 | US$'000 | US$'000 | US$'000 | US$'000 |
+-----------------------+---------+---------+-----------+---------+----------+-------------+---------+-----------------+---------+
| Balance at 1 January | 14,922 | 15,662 | 1,681 | 26,043 | 1,440 | (44,139) | 15,609 | 12,035 | 27,644 |
| 2008 | | | | | | | | | |
+-----------------------+---------+---------+-----------+---------+----------+-------------+---------+-----------------+---------+
| | | | | | | | | | |
+-----------------------+---------+---------+-----------+---------+----------+-------------+---------+-----------------+---------+
| Comprehensive income: | | | | | | | | | |
+-----------------------+---------+---------+-----------+---------+----------+-------------+---------+-----------------+---------+
| Profit for the year | - | - | - | - | - | 360 | 360 | 708 | 1,068 |
+-----------------------+---------+---------+-----------+---------+----------+-------------+---------+-----------------+---------+
| Other comprehensive | | | | | | | | | |
| income | | | | | | | | | |
+-----------------------+---------+---------+-----------+---------+----------+-------------+---------+-----------------+---------+
| Exchange differences | | | | | | | | | |
| arising on | | | | | | | | | |
+-----------------------+---------+---------+-----------+---------+----------+-------------+---------+-----------------+---------+
| translation of | - | - | 26 | - | 937 | - | 963 | 334 | 1,297 |
| foreign operations | | | | | | | | | |
+-----------------------+---------+---------+-----------+---------+----------+-------------+---------+-----------------+---------+
| Total comprehensive | - | - | 26 | - | 937 | 360 | 1,323 | 1,042 | 2,365 |
| income for the year | | | | | | | | | |
+-----------------------+---------+---------+-----------+---------+----------+-------------+---------+-----------------+---------+
| | | | | | | | | | |
+-----------------------+---------+---------+-----------+---------+----------+-------------+---------+-----------------+---------+
| Transactions with | | | | | | | | | |
| owners | | | | | | | | | |
+-----------------------+---------+---------+-----------+---------+----------+-------------+---------+-----------------+---------+
| Overprovision in | - | - | (158) | - | - | 158 | - | - | - |
| statutory surplus | | | | | | | | | |
| reserve | | | | | | | | | |
+-----------------------+---------+---------+-----------+---------+----------+-------------+---------+-----------------+---------+
| Balance at 31 | | | | | | | | | |
| December 2008 and | | | | | | | | | |
+-----------------------+---------+---------+-----------+---------+----------+-------------+---------+-----------------+---------+
| 1 January 2009 | 14,922 | 15,662 | 1,549 | 26,043 | 2,377 | (43,621) | 16,932 | 13,077 | 30,009 |
+-----------------------+---------+---------+-----------+---------+----------+-------------+---------+-----------------+---------+
| Comprehensive income: | | | | | | | | | |
+-----------------------+---------+---------+-----------+---------+----------+-------------+---------+-----------------+---------+
| Profit for the year | - | - | - | - | - | 8,751 | 8,751 | 829 | 9,580 |
+-----------------------+---------+---------+-----------+---------+----------+-------------+---------+-----------------+---------+
| Other comprehensive | | | | | | | | | |
| income | | | | | | | | | |
+-----------------------+---------+---------+-----------+---------+----------+-------------+---------+-----------------+---------+
| Exchange differences | | | | | | | | | |
| arising on | | | | | | | | | |
+-----------------------+---------+---------+-----------+---------+----------+-------------+---------+-----------------+---------+
| translation of | - | - | - | - | (3) | - | (3) | - | (3) |
| foreign operations | | | | | | | | | |
+-----------------------+---------+---------+-----------+---------+----------+-------------+---------+-----------------+---------+
| Disposals of | - | - | (1,102) | - | 394 | 1,102 | 394 | (3,833) | (3,439) |
| subsidiaries | | | | | | | | | |
+-----------------------+---------+---------+-----------+---------+----------+-------------+---------+-----------------+---------+
| | | | | | | | | | |
+-----------------------+---------+---------+-----------+---------+----------+-------------+---------+-----------------+---------+
| Total other | - | - | (1,102) | - | 391 | 1,102 | 391 | (3,833) | (3,442) |
| comprehensive income | | | | | | | | | |
+-----------------------+---------+---------+-----------+---------+----------+-------------+---------+-----------------+---------+
| for the year | | | | | | | | | |
+-----------------------+---------+---------+-----------+---------+----------+-------------+---------+-----------------+---------+
| | | | | | | | | | |
+-----------------------+---------+---------+-----------+---------+----------+-------------+---------+-----------------+---------+
| Total comprehensive | - | - | (1,102)- | - | 391 | 9,583 | 9,142 | (3,004) | 6,138 |
| income for the year | | | | | | | | | |
+-----------------------+---------+---------+-----------+---------+----------+-------------+---------+-----------------+---------+
| Transaction with | | | | | | | | | |
| owners | | | | | | | | | |
+-----------------------+---------+---------+-----------+---------+----------+-------------+---------+-----------------+---------+
| Transfer of statutory | - | - | 117 | - | - | (117) | - | - | - |
| surplus reserve | | | | | | | | | |
+-----------------------+---------+---------+-----------+---------+----------+-------------+---------+-----------------+---------+
| Balance at 31 | 14,922 | 15,662 | 564 | 26,043 | 2,768 | (33,885) | 26,074 | 10,073 | 36,147 |
| December 2009 | | | | | | | | | |
+-----------------------+---------+---------+-----------+---------+----------+-------------+---------+-----------------+---------+
STATEMENTS OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 DECEMBER 2009
(Expressed in United States Dollars)
+------------------------------------------+---------+----------+---------+----------+-------------+---------+
| | | | (Note | | | |
| | | | ii) | | | |
+------------------------------------------+---------+----------+---------+----------+-------------+---------+
| | Share | Share | Merger | Exchange | Accumulated | |
| | capital | premium | reserve | reserve | losses | Total |
+------------------------------------------+---------+----------+---------+----------+-------------+---------+
| Company | US$'000 | US$'000 | US$'000 | US$'000 | US$'000 | US$'000 |
+------------------------------------------+---------+----------+---------+----------+-------------+---------+
| | | | | | | |
+------------------------------------------+---------+----------+---------+----------+-------------+---------+
| Balance at 1 January 2008 | 14,922 | 15,662 | 26,043 | - | (34,844) | 21,783 |
+------------------------------------------+---------+----------+---------+----------+-------------+---------+
| | | | | | | |
+------------------------------------------+---------+----------+---------+----------+-------------+---------+
| Comprehensive income : | | | | | | |
+------------------------------------------+---------+----------+---------+----------+-------------+---------+
| Loss for the year | - | - | - | - | (5,551) | (5,551) |
+------------------------------------------+---------+----------+---------+----------+-------------+---------+
| Other comprehensive income | | | | | | |
+------------------------------------------+---------+----------+---------+----------+-------------+---------+
| Exchange differences arising on | - | - | - | 700 | - | 700 |
| translation | | | | | | |
+------------------------------------------+---------+----------+---------+----------+-------------+---------+
| | | | | | | |
+------------------------------------------+---------+----------+---------+----------+-------------+---------+
| Total comprehensive income for the year | - | - | - | 700 | (5,551) | (4,851) |
+------------------------------------------+---------+----------+---------+----------+-------------+---------+
| | | | | | | |
+------------------------------------------+---------+----------+---------+----------+-------------+---------+
| Balance at 31 December 2008 and 1 | 14,922 | 15,662 | 26,043 | 700 | (40,395) | 16,932 |
| January 2009 | | | | | | |
+------------------------------------------+---------+----------+---------+----------+-------------+---------+
| | | | | | | |
+------------------------------------------+---------+----------+---------+----------+-------------+---------+
| Comprehensive income : | | | | | | |
+------------------------------------------+---------+----------+---------+----------+-------------+---------+
| Profit for the year | - | - | - | - | (8,751) | (8,751) |
+------------------------------------------+---------+----------+---------+----------+-------------+---------+
| Other comprehensive income | | | | | | |
+------------------------------------------+---------+----------+---------+----------+-------------+---------+
| Exchange differences arising on | - | - | - | 1,445 | - | 1,445 |
| translation | | | | | | |
+------------------------------------------+---------+----------+---------+----------+-------------+---------+
| | | | | | | |
+------------------------------------------+---------+----------+---------+----------+-------------+---------+
| Total comprehensive income for the year | - | - | - | 1,445 | (8751) | 10,196 |
+------------------------------------------+---------+----------+---------+----------+-------------+---------+
| | | | | | | |
+------------------------------------------+---------+----------+---------+----------+-------------+---------+
| Balance at 31 December 2009 | 14,922 | 15,662 | 26,043 | 2,145 | (31,664) | 27,128 |
+------------------------------------------+---------+----------+---------+----------+-------------+---------+
| | | | | | | |
+------------------------------------------+---------+----------+---------+----------+-------------+---------+
Notes:
(i) Statutory surplus reserve:
In accordance with the law of the People's Republic of China (the "PRC") and the
articles of association of certain of the Company's subsidiaries, directors of
these subsidiaries may at their discretion make appropriations to a statutory
surplus reserve equivalent to 10% of the subsidiaries' net profits.
Appropriations may also be made to statutory public welfare reserve equivalent
to 5 to 10% of the net profits of these operating subsidiaries. Distribution of
profits to shareholders can only be made after such appropriations.
The statutory surplus reserve may be used to reduce any losses incurred or be
capitalised as paid up capital. The use of the statutory public welfare reserve
is restricted to capital expenditure incurred for staff welfare facilities. The
statutory public welfare reserve is not available for distribution
.(ii) The merger reserve represents the difference between the nominal
value of shares of the subsidiary company acquired, and the nominal value of the
Company's shares issued in 2002.
STATEMENTS OF CASH FLOWS
FOR THE YEAR ENDED 31 DECEMBER 2009
(Expressed in United States dollars)
+---------------------------------------+-------+-----------+--+-----------+----------+
| | | 2009 | | 2008 | |
+---------------------------------------+-------+-----------+--+-----------+----------+
| Group | Notes | US$'000 | | US$'000 | |
+---------------------------------------+-------+-----------+--+-----------+----------+
| | | | | | |
+---------------------------------------+-------+-----------+--+-----------+----------+
| Cash flow from operating activities | | | | | |
+---------------------------------------+-------+-----------+--+-----------+----------+
| Profit before taxation | | 9,996 | | 1,315 | |
+---------------------------------------+-------+-----------+--+-----------+----------+
| | | | | | |
+---------------------------------------+-------+-----------+--+-----------+----------+
| Adjustments for: | | | | | |
+---------------------------------------+-------+-----------+--+-----------+----------+
| - Interest income | 5 | (1 | )| (1 | ) |
+---------------------------------------+-------+-----------+--+-----------+----------+
| - Gain on disposals of | 14 | (6,598 | )| - | |
| subsidiaries | | | | | |
+---------------------------------------+-------+-----------+--+-----------+----------+
| - Depreciation | 6(c) | 1,732 | | 1,748 | |
+---------------------------------------+-------+-----------+--+-----------+----------+
| - Finance costs | 6(a) | 80 | | 176 | |
+---------------------------------------+-------+-----------+--+-----------+----------+
| - Loss on disposals of property, | 6(c) | 144 | | 3 | |
| plant and equipment | | | | | |
+---------------------------------------+-------+-----------+--+-----------+----------+
| - Exchange difference | | 337 | | (44 | ) |
+---------------------------------------+-------+-----------+--+-----------+----------+
| | | | | | |
+---------------------------------------+-------+-----------+--+-----------+----------+
| Operating cash flow before working | | 5,690 | | 3,197 | |
| capital changes | | | | | |
+---------------------------------------+-------+-----------+--+-----------+----------+
| Increase in inventories | | (19 | )| (13 | ) |
+---------------------------------------+-------+-----------+--+-----------+----------+
| (Increase)/decrease in trade and | | (344 | )| 44 | |
| other receivables | | | | | |
+---------------------------------------+-------+-----------+--+-----------+----------+
| Increase in trade and other payables | | 2,495 | | 218 | |
+---------------------------------------+-------+-----------+--+-----------+----------+
| | | | | | |
+---------------------------------------+-------+-----------+--+-----------+----------+
| Net cash flow generated from | | 7,822 | | 3,446 | |
| operations | | | | | |
+---------------------------------------+-------+-----------+--+-----------+----------+
| Income tax paid | | (127 | )| (686 | ) |
+---------------------------------------+-------+-----------+--+-----------+----------+
| | | | | | |
+---------------------------------------+-------+-----------+--+-----------+----------+
| Net cash generated from operating | | 7,695 | | 2,760 | |
| activities | | | | | |
+---------------------------------------+-------+-----------+--+-----------+----------+
| | | | | | |
+---------------------------------------+-------+-----------+--+-----------+----------+
| Cash flows from investing activities | | | | | |
+---------------------------------------+-------+-----------+--+-----------+----------+
| Purchases of property, plant and | | (5,730 | )| (1,959 | ) |
| equipment | | | | | |
+---------------------------------------+-------+-----------+--+-----------+----------+
| Proceeds from disposals of property, | | 325 | | - | |
| plant and equipment | | | | | |
+---------------------------------------+-------+-----------+--+-----------+----------+
| Proceeds from disposal of | | 12 | | - | |
| available-for-sale investment | | | | | |
+---------------------------------------+-------+-----------+--+-----------+----------+
| Disposals of subsidiaries | 14 | (2 | )| - | |
+---------------------------------------+-------+-----------+--+-----------+----------+
| Interest received | | 1 | | 1 | |
+---------------------------------------+-------+-----------+--+-----------+----------+
| | | | | | |
+---------------------------------------+-------+-----------+--+-----------+----------+
| Net cash used in investing activities | | (5,394 | )| (1,958 | ) |
+---------------------------------------+-------+-----------+--+-----------+----------+
| | | | | | |
+---------------------------------------+-------+-----------+--+-----------+----------+
| Cash flows from financing activities | | | | | |
+---------------------------------------+-------+-----------+--+-----------+----------+
| Repayments on obligations under | | (837 | )| (275 | ) |
| finance leases | | | | | |
+---------------------------------------+-------+-----------+--+-----------+----------+
| Interests paid | | (80 | )| (176 | ) |
+---------------------------------------+-------+-----------+--+-----------+----------+
| | | | | | |
+---------------------------------------+-------+-----------+--+-----------+----------+
| Net cash used in financing activities | | (917 | )| (451) | |
+---------------------------------------+-------+-----------+--+-----------+----------+
| | | | | | |
+---------------------------------------+-------+-----------+--+-----------+----------+
| Net increase in cash and cash | | 1,384 | | 351 | |
| equivalents | | | | | |
+---------------------------------------+-------+-----------+--+-----------+----------+
| | | | | | |
+---------------------------------------+-------+-----------+--+-----------+----------+
| Cash and cash equivalents at 1 | | 780 | | 428 | |
| January | | | | | |
+---------------------------------------+-------+-----------+--+-----------+----------+
| | | | | | |
+---------------------------------------+-------+-----------+--+-----------+----------+
| Effect of foreign exchange rate | | 1 | | 1 | |
| changes | | | | | |
+---------------------------------------+-------+-----------+--+-----------+----------+
| | | | | | |
+---------------------------------------+-------+-----------+--+-----------+----------+
| Cash and cash equivalents at 31 | | 2,165 | | 780 | |
| December | | | | | |
+---------------------------------------+-------+-----------+--+-----------+----------+
| | | | | | |
+---------------------------------------+-------+-----------+--+-----------+----------+
STATEMENTS OF CASH FLOWS
FOR THE YEAR ENDED 31 DECEMBER 2009
(Expressed in United States Dollars)
+-------------------------------------------+-+-+----------+---------+--+-----------+----------+
| | | 2009 | | 2008 | |
+-------------------------------------------+-+----------------------+--+-----------+----------+
| Company | | US$'000 | | US$'000 | |
+-------------------------------------------+-+----------------------+--+-----------+----------+
| | | | | | |
+-------------------------------------------+-+----------------------+--+-----------+----------+
| Cash flow from operating activities | | | | | |
+-------------------------------------------+-+----------------------+--+-----------+----------+
| | | | | | |
+-------------------------------------------+-+----------------------+--+-----------+----------+
| Profit/(loss) for the year | | 8,751 | | (5,551) | |
+-------------------------------------------+-+----------------------+--+-----------+----------+
| Adjustments for: | | | | | |
+-------------------------------------------+-+----------------------+--+-----------+----------+
| - Impairment on investments in | | - | | 5,462 | |
| subsidiaries | | | | | |
+-------------------------------------------+-+----------------------+--+-----------+----------+
| - Reversal of impairment on | | 9,020 | | - | |
| investments in subsidiaries | | | | | |
+-------------------------------------------+-+----------------------+--+-----------+----------+
| - Exchange difference | | 21 | | (11) | |
+-------------------------------------------+-+----------------------+--+-----------+----------+
| | | | | | |
+-----------------------------------------------+----------+---------+--+-----------+----------+
| Operating cash outflow before working capital | | (248) | | (100) | |
| changes | | | | | |
+-----------------------------------------------+----------+---------+--+-----------+----------+
| Decrease in trade and other receivables | | - | | 79 | |
+-------------------------------------------+-+----------------------+--+-----------+----------+
| Increase in amounts due from subsidiaries | | (187) | | (120) | |
+-------------------------------------------+-+----------------------+--+-----------+----------+
| Increase/(decrease) in trade and other | | 58 | | (113) | |
| payables | | | | | |
+-------------------------------------------+-+----------------------+--+-----------+----------+
| Increase in amounts due to subsidiaries | | 386 | | 255 | |
+-------------------------------------------+-+----------------------+--+-----------+----------+
| | | | | | |
+-------------------------------------------+-+----------------------+--+-----------+----------+
| Net increase in cash and cash equivalents | | 9 | | 1 | |
+-------------------------------------------+-+----------------------+--+-----------+----------+
| | | | | | |
+-------------------------------------------+-+----------------------+--+-----------+----------+
| Cash and cash equivalents at 1 January | | 2 | | 1 | |
+-------------------------------------------+-+----------------------+--+-----------+----------+
| | | | | | |
+-------------------------------------------+-+----------------------+--+-----------+----------+
| Cash and cash equivalents at 31 December | | 11 | | 2 | |
+-------------------------------------------+-+----------------------+--+-----------+----------+
| | | | | | |
+-------------------------------------------+-+----------------------+--+-----------+----------+
| | | | | | |
+-------------------------------------------+-+----------------------+--+-----------+----------+
| | | | | | |
+-------------------------------------------+-+----------------------+--+-----------+----------+
| | | | | | |
+-------------------------------------------+-+----------------------+--+-----------+----------+
| | | | | | | | |
+-------------------------------------------+-+-+----------+---------+--+-----------+----------+
NOTES TO THE FINANCIAL STATEMENTS
for the year ended 31 December 2009
(Expressed in United States dollars)
1. General information
The Company is a public limited company incorporated and domiciled in the United
Kingdom. The registered office of the Company is located at 2 Bloomsbury Street,
London WC1B 3ST. Its principal place of business is in Hong Kong and the Peoples
Republic of China ("PRC").
Following the annual general meeting of the Company held on 7 August 2009, the
Company's name was changed to Yinggao Holdings plc.
The principal activities of the Company and its subsidiaries (hereinafter
collectively referred to as the "Group") are terminal operation and barging
services provision.
The Company's shares were admitted to trading on the AIM Market of the London
Stock Exchange. These consolidated financial statements are presented in United
States Dollars, unless otherwise stated, and were reviewed by the Audit
Committee and approved for issue by the board of directors on 2 June 2010..
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
(a) Basis of preparation and statement of compliance
The consolidated financial statements have been prepared under the historical
cost convention.
The consolidated financial statements are presented in United States dollars
("USD"), rounded to the nearest thousand, which is the presentation currency of
the Group.
The consolidated financial statements have been prepared in accordance with
International Financial Reporting Standards as adopted by the European Union
("IFRSs"), Interpretations ("IFRICs") and the Companies Act 2006 applicable to
Companies Reporting under IFRSs.
(b) Impact of recently issued IFRSs
The IASB have issued certain new and revised IFRSs and new IFRICs that are first
effective or available for early adoption for the current accounting period of
the Group.
Except as disclosed below, the adoption of the new and revised IFRSs had no
material effect on the consolidated financial statements of the Group for the
current or prior accounting periods.
IAS 1 (revised 2007) "Presentation of financial statements" has introduced a
number of terminology changes (including revised titles for the consolidated
financial statements) and has resulted in a number of changes in presentation
and disclosure. However, IAS 1 (revised 2007) has had no impact on the reported
results or financial position of the group.
IFRS 8 "Operating Segments" is a disclosure standard that has resulted in a
redesignation of the Group's reportable segments (see note 4) and changes in the
basis of measurement of segment profit or loss, segment assets and segment
liabilities.
Amendments to IFRS 7 "Financial Instruments: Disclosures - improving disclosures
about financial statements" expand the disclosures required in relation to fair
value measurements in respect of financial instruments which are measured at
fair value. However, the amendments to IFRS 7 do not contain any additional
disclosure requirements specifically applicable to the Group's consolidated
financial statements.
The "Improvements to IFRSs (2008)" comprise a number of minor and non-urgent
amendments to a range for IFRSs which the IASB has issued as an omnibus batch of
amendments. There have been no significant changes to the Group's accounting
policies as a result of these amendments.
The Group has not early applied the following new and revised standards,
amendments or interpretations that have been issued but are not yet effective.
+------------------------+-----------------------------------------+
| | |
+------------------------+-----------------------------------------+
| IFRSs (Amendments) | Amendments to IFRS 5 as part of |
| | Improvements to IFRSs 20081 |
+------------------------+-----------------------------------------+
| IFRSs (Amendments) | Improvements to IFRSs 20092 |
+------------------------+-----------------------------------------+
| IAS 24 (Revised) | Related Party Disclosures5 |
+------------------------+-----------------------------------------+
| IAS 27 (Revised) | Consolidated and Separate Financial |
| | Statements1 |
+------------------------+-----------------------------------------+
| IAS 32 (Amendment) | Classification of Rights Issues4 |
+------------------------+-----------------------------------------+
| IAS 39 (Amendment) | Eligible Hedged Items1 |
+------------------------+-----------------------------------------+
| IFRS 1 (Amendment) | Additional Exemptions for First-time |
| | Adopters3 |
+------------------------+-----------------------------------------+
| IFRS 2 (Amendment) | Group Cash-settled Share-based Payment |
| | Transactions3 |
+------------------------+-----------------------------------------+
| IFRS 3 (Revised) | Business Combinations1 |
+------------------------+-----------------------------------------+
| IFRS 9 | Financial Instruments7 |
+------------------------+-----------------------------------------+
| IFRIC 14 (Amendment) | Prepayments of a Minimum Funding |
| | Requirement5 |
+------------------------+-----------------------------------------+
| IFRIC 17 | Distributions Non-cash Assets to |
| | Owners1 |
+------------------------+-----------------------------------------+
| IFRIC 19 | Extinguishing Financial Liabilities |
| | with Equity Instruments6 |
+------------------------+-----------------------------------------+
1 Effective for annual periods beginning on or after 1 July 2009.
2 Effective for annual periods beginning on or after 1 July 2009 and 1
January 2010, as
appropriate.
3 Effective for annual periods beginning on or after 1 January 2010.
4 Effective for annual periods beginning on or after 1 February 2010.
5 Effective for annual periods beginning on or after 1 January 2011.
6 Effective for annual periods beginning on or after 1 July 2010.
7 Effective for annual periods beginning on or after 1 January 2013.
The application of IFRS 3 (Revised) may affect the accounting for business
combination for which the acquisition date is on or after the beginning of the
first annual reporting period beginning on or after 1 July 2009. IAS 27
(Revised) will affect the accounting treatment for changes in a parent's
ownership interest in a subsidiary.
The directors of the Company anticipate that the application of the other new
and revised standards, amendments or interpretations will have no material
impact on the consolidated financial statements.
(c) 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 the power to govern the financial and
operating policies of an entity so as to obtain benefits from its activities.
The results of subsidiaries acquired or disposed of during the year are included
in the consolidated income statement from the effective date of acquisition or
up to the effective date of disposal, as appropriate.
Where necessary adjustments are made to the 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 on
consolidation.
Minority interests in the net assets of consolidated subsidiaries are presented
separately from the Group's equity therein. Minority interests in the net
assets consist of the amount of those interests at the date of the original
business combination and the minority's share of changes in equity since the
date of the combination. Losses applicable to the minority in excess of the
minority's interest in the subsidiary's equity are allocated against the
interests of the Group except to the extent that the minority has a binding
obligation and is able to make an additional investment to cover the losses.
As permitted by Section 408 of the Companies Act 2006, a separate income
statement is not presented in respect of the Company. The profit of the Company
for the year is US$8,751,000 (2008: loss of US$5,551,000).
(d) Business combinations
The acquisition of subsidiaries and businesses are accounted for using the
purchase method. The consideration or cost of the acquisition is measured at
the aggregate of the fair values, at the date of exchange, of assets given,
liabilities incurred or assumed, and equity instruments issued by the Group in
exchange for control of the acquiree, plus any costs directly attributable to
the business combination. The acquiree's identifiable assets, liabilities and
contingent liabilities that meet the conditions for recognition under IFRS 3
"Business Combinations" are recognised at their fair values at the acquisition
date.
Goodwill arising on acquisition is recognised as an asset and initially measured
at cost, being the excess of the cost of the business combination over the
Group's interest in the net fair value of the identifiable assets, liabilities
and contingent liabilities recognised. If, after reassessment, the Group's
interest in the net fair value of the acquiree's identifiable assets,
liabilities and contingent liabilities exceeds the cost of the business
combination, the excess is recognised immediately in profit or loss.
The interest of minority shareholders in the acquiree is initially measured at
the minority's proportion of the net fair value of the assets, liabilities and
contingent liabilities recognised.
(e) Goodwill
Goodwill arising on an acquisition of a business is carried at cost less any
accumulated impairment losses.
For the purposes of impairment testing, goodwill arising from an acquisition is
allocated to each of the relevant cash-generating units, that are expected to
benefit from the synergies of the acquisition. A cash-generating unit to which
goodwill has been allocated is tested for impairment annually, and whenever
there is an indication that the unit may be impaired. For goodwill arising on
an acquisition in a financial year, the cash-generating unit to which goodwill
has been allocated is tested for impairment before the end of that financial
year. When the recoverable amount of the cash-generating unit is less than the
carrying amount of the unit, the impairment loss is allocated to reduce the
carrying amount of any goodwill allocated to the unit first, and then to the
other assets of the unit pro rata on the basis of the carrying amount of each
asset in the unit. Any impairment loss for goodwill is recognised directly in
profit or loss. An impairment loss for goodwill is not reversed in subsequent
periods.
On disposal of the relevant cash-generating unit, the attributable amount of
goodwill capitalised is included in the determination of the amount of profit or
loss on disposal.
(f) Property, plant and equipment
Expenditure on additions and improvements is capitalised as incurred.
Non-current assets are included at historical cost less accumulated depreciation
and any impairment losses.
Property, plant and equipment, other than construction in progress, are
depreciated over their estimated useful lives on a straight line basis. The
following annual rates of depreciation have been used.
Land and buildings 20-30
years
Plant and machinery 10-20 years
Furniture, fixtures and equipment 5-10 years
Motor vehicles 5-10
years
Vessels 10
years
Construction in progress represents a building under construction, which is
stated at cost less any impairment. Cost comprises the direct cost of
construction.
Both the useful life of an asset and its residual value, if any, are reviewed
annually.
The carrying amounts of other property, plant and equipment are reviewed for
indications of impairment at each balance sheet date. An impairment loss is
recognised to the extent that the carrying amount of an asset, or the
cash-generating unit to which it belongs, is more than its recoverable amount.
The recoverable amount of an asset, or of the cash generating unit to which it
belongs, is the greater of its net selling price and value in use. In assessing
value in use, the estimated future cash flows are discounted to their present
value using a pre-tax discount rate that reflects current market assessments of
time value of money and the risks specific to the assets. An impairment loss is
reversed if there has been a favourable change in estimates used to determine
the recoverable amount.
Gains or losses arising from the retirement or disposal of an item of property,
plant and equipment are determined as the difference between the net disposal
proceeds and the carrying amount of the item and are recognised in profit or
loss on the date of retirement or disposal.
(g) Leased assets
An arrangement, comprising a transaction or a series of transactions, is or
contains a lease if the Group determines that the arrangement conveys a right to
use a specific asset or assets for an agreed period of time in return for a
payment or a series of payments. Such a determination is made based on an
evaluation of the substance of the arrangement and is regardless of whether the
arrangement takes the legal form of a lease.
(i) Classification of assets leased to the Group
Assets that are held by the Group under leases which transfer to the
Group substantially all the risks and rewards of ownership are classified as
being held under finance leases. Leases which do not transfer substantially all
the risks and rewards of ownership to the Group are classified as operating
leases, with the exception that land held for own use under an operating lease,
the fair value of which cannot be measured separately from the fair value of a
building situated thereon at the inception of the lease, is accounted for as
being held under a finance lease, unless the building is also clearly held under
an operating lease. For these purposes, the inception of the lease is the time
that the lease was first entered into by the Group, or taken over from the
previous lessee.
(ii) Assets acquired under finance leases
Where the Group acquires the use of assets under finance leases, the amounts
representing the fair value of the leased asset, or, if lower, the present value
of the minimum lease payments, of such assets are included in property, plant
and equipment and the corresponding liabilities, net of finance charges, are
recorded as obligations under finance leases. Depreciation is provided at rates
which write off the cost of the assets over the term of the relevant lease or,
where it is likely the Group will obtain ownership of the asset, the life of the
asset, as set out in note 2(f). Impairment losses are accounted for in
accordance with the accounting policy as set out in note 2(f). Finance charges
implicit in the lease payments are charged to profit or loss over the period of
the leases so as to produce an approximately constant periodic rate of charge on
the remaining balance of the obligations for each accounting period. Contingent
rentals are charged to profit or loss in the accounting period in which they are
incurred.
(iii) Operating lease charges
Where the Group has the use of assets held under operating leases, payments made
under the leases are charged to profit or loss in equal instalments over the
accounting periods covered by the lease term, except where an alternative basis
is more representative of the pattern of benefits to be derived from the leased
asset. Lease incentives received are recognised in profit or loss as an
integral part of the aggregate net lease payments made. Contingent rentals are
charged to profit or loss in the accounting period in which they are incurred.
(h) Subsidiaries
Subsidiaries are entities controlled by the Group. Control exists when the
Group has the power to govern the financial and operating policies of an entity
so as to obtain benefits from its activities. In assessing control, potential
voting rights that presently are exercisable are taken into account.
In the Company's balance sheet, investments in subsidiaries are stated at cost
less impairment losses.
(i) Available-for-sale investments
Investments held for non-trading purposes are classified as available-for-sale
investments. At each balance sheet date the fair value is remeasured, with
resultant gain or loss being recognised directly in equity, except foreign
exchange gains and losses in respect of monetary items such as debt securities
which are recognised directly in profit or loss. Where these investments are
interest-bearing, interest calculated using the effective interest method is
recognised in profit or loss. When these investments are derecognised, the
cumulative gain or loss previously recognised directly in equity is recognised
in profit or loss.
When there is objective evidence that available-for-sale investments are
impaired, the cumulative loss that has been recognised directly in equity is
removed from equity and is recognised in profit or loss. The amount of the
cumulative loss that is recognised in profit or loss is the difference between
the acquisition cost (net of any principal repayment and amortisation) and
current fair value, less any impairment loss on that asset previously recognised
in profit or loss.
Impairment losses recognised in profit or loss in respect of available-for-sale
investments are not reversed through profit or loss. Any subsequent increase in
the fair value of such assets is recognised directly in equity.
Impairment losses in respect of available-for-sale debt investments are reversed
if the subsequent increase in fair value can be objectively related to an event
occurring after the impairment loss was recognised. Reversals of impairment
losses in such circumstances are recognised in profit or loss.
(j) Inventories
Inventories are carried at the lower of cost and net realisable value.
Cost is calculated using the weighted average cost formula and comprises all
costs of purchase, costs of conversion and other costs incurred in bringing the
inventories to their present location and condition.
Net realisable value is the estimated selling price in the ordinary course of
business less the estimated costs of completion and the estimated costs
necessary to make the sale.
When inventories are sold, the carrying amount of those inventories is
recognised as an expense in the period in which the related revenue is
recognised. The amount of any write-down of inventories to net realisable value
and all losses of inventories are recognised as an expense in the period the
write-down or loss occurs. The amount of any reversal of any write-down of
inventories is recognised as a reduction in the amount of inventories recognised
as an expense in the period in which the reversal occurs.
(k) Trade and other receivables
Trade and other receivables are initially recognised at fair value and
thereafter stated at amortised cost less impairment losses for bad and doubtful
receivables, except where the receivables are interest-free loans made to
related parties without any fixed repayment terms or the effect of discounting
would be immaterial. In such cases, the receivables are stated at cost less
impairment losses for bad and doubtful debts.
Impairment losses for bad and doubtful debts are measured as the difference
between the carrying amount of the financial asset and the estimated future cash
flows, discounted where the effect of discounting is material.
(l) Cash and cash equivalents
Cash and cash equivalents comprise cash at bank and on hand, demand deposits
with banks and other financial institutions, and short-term, highly liquid
investments that are readily convertible into known amounts of cash and which
are subject to an insignificant risk of changes in value, having been within
three months of maturity at acquisition.
(m) Trade and other payables
Trade and other payables are initially recognised at fair value. Trade and
other payables are subsequently stated at amortised cost unless the effect of
discounting would be immaterial, in which case they are stated at cost.
(n) Interest-bearing borrowings
Interest-bearing borrowings are recognised initially at fair value less
attributable transaction costs. Subsequent to initial recognition,
interest-bearing borrowings are stated at amortised cost with any difference
between the amount initially recognised and redemption value being recognised in
profit or loss over the period of the borrowings, together with any interest and
fees payable, using the effective interest method.
(o) Revenue
Revenue is measured at the fair value of the consideration received or
receivable. Provided it is probable that the economic benefits will flow to the
Group and the revenue and costs, if applicable, can be measured reliably,
revenue is recognised in profit or loss as follows:
Service income comprises the value of sales in the year in respect of the
operation of the terminal and provision of barging services rendered to the
customers which is taken to be the point in time when the customer has accepted
the services and the related risks and rewards been transferred.
(p) Employee benefits
(i) Salaries, annual bonuses, paid annual leave, contributions to defined
contribution retirement plans and the cost of non-monetary benefits are accrued
in the year in which the associated services are rendered by employees. Where
payment or settlement is deferred and the effect would be material, these
amounts are stated at their present values.
(ii) The employees of the subsidiaries in the PRC are members of the
state-sponsored central retirement benefit scheme operated by the local
municipal government in the PRC. The subsidiaries are required to contribute,
based on a certain percentage of the payroll costs, to the central retirement
benefit scheme to fund the benefits. The only obligation of the group with
respect to the retirement benefit scheme is to make the required contributions
under the scheme and such contributions are charged to the consolidated income
statement as they become payable in accordance with the rules of the pension
scheme.
(q) Translation of foreign currencies
(i) Functional and presentation currency
Items included in the financial statements of each of the Group's entities are
measured using the currency of the primary economic environment in which the
entity operates (the "functional currency"). The consolidated financial
statements are presented in USD for the convenience of the readers, which is
different from the functional currency of the Company which is British Pound.
(ii) Transactions and balances
Foreign currency transactions during the year are translated at the foreign
exchange rates ruling at the transaction dates. Monetary assets and liabilities
denominated in foreign currencies are translated at the foreign exchange rates
ruling at the balance sheet date. Exchange gains and losses are recognised in
profit or loss.
Non-monetary assets and liabilities that are measured in terms of historical
cost in a foreign currency are translated using the foreign exchange rates
ruling at the transaction dates. Non-monetary assets and liabilities
denominated in foreign currencies that are stated at fair value are translated
using the foreign exchange rates ruling at the dates the fair value was
determined.
(iii) Group companies
The results of the subsidiary company in the PRC are translated into United
States dollars at the exchange rates approximating the foreign exchange rates
ruling at the dates of the transactions. Balance sheet items are translated
into United States dollars at the foreign exchange rates ruling at the balance
sheet date. The resulting exchange differences are recognised directly in a
separate component of equity.
On disposal of a foreign operation, the cumulative amount of the exchange
differences recognised in equity which relate to that foreign operation is
included in the calculation of the profit or loss on disposal.
(r) Income tax
Income tax for the year comprises current tax and movements in deferred tax
assets and liabilities. Current tax and movements in deferred tax assets and
liabilities are recognised in profit or loss except to the extent that they
relate to items recognised in other comprehensive income or directly in equity,
in which case the relevant amounts of tax are recognised in other comprehensive
income or directly recognised in equity respectively.
Current tax is the expected tax payable on the taxable income for the year,
using tax rates enacted or substantively enacted at the balance sheet date, and
any adjustment to tax payable in respect of previous years.
Deferred tax assets and liabilities arise from deductible and taxable temporary
differences respectively, being the differences between the carrying amounts of
assets and liabilities for financial reporting purposes and their tax bases.
Deferred tax assets also arise from unused tax losses and unused tax credits.
Apart from differences which arise on initial recognition of assets and
liabilities, all deferred tax liabilities, and all deferred tax assets to the
extent that it is probable that future taxable profits will be available against
which the asset can be utilised, are recognised.
The amount of deferred tax recognised is measured based on the expected manner
of realisation or settlement of the carrying amount of the assets and
liabilities, using tax rates enacted or substantively enacted at the balance
sheet date. Deferred tax assets and liabilities are not discounted.
(s) Provisions and contingent liabilities
Provisions are recognised for other liabilities of uncertain timing or amount
when the Group has a legal or constructive obligation arising as a result of a
past event, it is probable that an outflow of economic benefits will be required
to settle the obligation and a reliable estimate can be made.
Where the time value of money is material, provisions are stated at the present
value of the expenditure expected to settle the obligation.
Where it is not probable that an outflow of economic benefits will be required,
or the amount cannot be estimated reliably, the obligation is disclosed as a
contingent liability, unless the probability of outflow of economic benefits is
remote. Possible obligations, whose existence will only be confirmed by the
occurrence or non-occurrence of one or more future events are also disclosed as
contingent liabilities unless the probability of outflow of economic benefits is
remote.
(t) Related parties
For the purposes of these consolidated financial statements, a party is
considered to be related to the Group if:
(i) the party has the ability, directly or indirectly through one or more
intermediaries, to control the Group or exercise significant influence over the
Group in making financial and operating policy decisions, or has joint control
over the Group;
(ii) the Group and the party are subject to common control;
(iii) the party is an associate of the Group or a joint venture in which the
Group is a venturer;
(iv) the party is a member of key management personnel of the Group or the
Group's parent, or a close family member of such an individual, or is an entity
under the control, joint control or significant influence of such individuals;
(v) the party is a close family member of a party referred to in (i) or is
an entity under the control, joint control or significant influence of such
individuals; or
(vi) the party is a post-employment benefit plan which is for the benefit of
employees of the Group or of any entity that is a related party of the Group.
Close family members of an individual are those family members who may be
expected to influence, or be influenced by, that individual in their dealings
with the entity.
(u) Going concern
The Group's business activities, together with the factors likely to affect its
future performance and position are set out in the Chairman's statement. Note
25 to the financial statements sets out the Group's financial risk management
policies, and its exposure to credit risk and liquidity risk.
The Directors have assessed the financial risks facing the business, and
compared this risk assessment to the net current assets position. The Directors
have also reviewed relationships with key customers and are satisfied that the
appropriate contracts and contingency plans are in place. The directors have
prepared income statement and cash flow forecasts to assess whether the Group
has adequate resources for the foreseeable future.
The directors consider that the Group has adequate resources to continue in
operational existence for the foreseeable future. For this reason, they
continue to adopt the going concern basis in preparing the consolidated
financial statements.
3. CRITICAL ACCOUNTING ESTIMATES AND JUDGEMENTS
Estimates and judgements are currently evaluated and are based on historical
experience and other factors including expectations of future events that are
believed to be reasonable under the circumstances. Apart from information
disclosed elsewhere in these financial statements, the following disclosures
summarise : (1) estimates and assumptions that have a significant risk of
causing a material adjustment to the carrying amounts of assets and liabilities
within the next financial year and (2) significant judgements made in the
process of applying the Group's accounting policies.
(i) Income taxes
The Group is subject to income taxes in the PRC, Hong Kong and the United
Kingdom. Significant judgement is required in determining the provision for
income taxes. There are many transactions and calculations for which the
ultimate tax determination is uncertain during the ordinary course of business.
The Group 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 deferred tax provisions in the
period in which such determination is made.
(ii) Provision for doubtful receivables
The Group provides for doubtful receivables based on an assessment of the
collectibility of trade receivables. Provisions for doubtful receivables are
applied to trade and other receivables where events or changes in circumstances
indicate that the balance may not be collectible. The identification of
doubtful receivables requires the use of judgments and estimates. Where the
expectation is different from the original estimates, such difference will
impact carrying value of receivables and doubtful debt expenses in the period in
which such estimate has been changed.
4. REVENUE AND SEGMENT REPORTING
The principal activities of the Group are the provision of logistics and
terminal operation together with other related services including sea freight
forwarding and barge hire.
(a) Segment results, assets and liabilities
The Group has adopted IFRS 8 "Operating Segments" with effect from 1 January
2009. IFRS 8 is a disclosure standard that requires operating segments to be
identified on the basis of internal reports about components of the Group that
are regularly reviewed by the chief operating decision maker for the purpose of
allocating resources to segments and assessing their performance. In contrast,
the predecessor Standard (IAS 14 "Segment Reporting") required an entity to
identify two sets of segments (business and geographical) using a risks and
returns approach. In the past, the Group's primary reporting format was
business segments. The application of IFRS 8 has resulted in a redesignation of
the Group's reportable segments as compared with the primary reportable segments
determined in accordance with IAS 14.
Specifically, in prior years, segment information reported externally was
analysed on the basis of the types of goods supplied and services provided by
the Group's operating divisions (i.e. terminal and barging services, trading and
others and mining). However, information reported to the chief operating
decision maker is more specifically focused on the category of customer for each
type of goods and services. The principal categories of customers for these
goods and services are terminal services, barging services, trading and others
and mining.
Information regarding the above segments is reported below. Amounts reported
for the prior year have been restated to conform to the requirements of IFRS 8.
+-----------------+---------+---------+---------+---------+---------+---------+---------+---------+----------+---------+---------+
| | | | |
+-----------------+-------------------------------------------------------------------------------+----------+-------------------+
| | Terminal | Barging | Trading and | Mining | | Total |
| | services | services | others | | | |
+-----------------+-------------------+-------------------+-------------------+-------------------+----------+-------------------+
| | 2009 | 2008 | 2009 | 2008 | 2009 | 2008 | 2009 | 2008 | | 2009 | 2008 |
+-----------------+---------+---------+---------+---------+---------+---------+---------+---------+----------+---------+---------+
| Group | US$'000 | US$'000 | US$'000 | US$'000 | US$'000 | US$'000 | US$'000 | US$'000 | | US$'000 | US$'000 |
+-----------------+---------+---------+---------+---------+---------+---------+---------+---------+----------+---------+---------+
| | | | | | | | | | | | |
+-----------------+---------+---------+---------+---------+---------+---------+---------+---------+----------+---------+---------+
| Revenue from | | | | | | | | | | | |
| external | | | | | | | | | | | |
+-----------------+---------+---------+---------+---------+---------+---------+---------+---------+----------+---------+---------+
| customers | 14,546 | 12,252 | 9,017 | 2,048 | - | - | - | - | | 23,563 | 14,300 |
+-----------------+---------+---------+---------+---------+---------+---------+---------+---------+----------+---------+---------+
| | | | | | | | | | | | |
+-----------------+---------+---------+---------+---------+---------+---------+---------+---------+----------+---------+---------+
| Reportable | | | | | | | | | | | |
| segment | | | | | | | | | | | |
+-----------------+---------+---------+---------+---------+---------+---------+---------+---------+----------+---------+---------+
| revenue | 14,546 | 12,252 | 9,017 | 2,048 | - | - | - | - | | 23,563 | 14,300 |
+-----------------+---------+---------+---------+---------+---------+---------+---------+---------+----------+---------+---------+
| Reportable | | | | | | | | | | | |
| segment | | | | | | | | | | | |
+-----------------+---------+---------+---------+---------+---------+---------+---------+---------+----------+---------+---------+
| | 2,689 | 2,481 | 1,301 | (827) | (432) | (163) | (80) | - | | 3,478 | 1,491 |
| profit/(loss) | | | | | | | | | | | |
+-----------------+---------+---------+---------+---------+---------+---------+---------+---------+----------+---------+---------+
| | | | | | | | | | | | |
+-----------------+---------+---------+---------+---------+---------+---------+---------+---------+----------+---------+---------+
| Finance costs | (78) | (43) | (2) | - | - | (133) | - | - | | (80) | (176) |
+-----------------+---------+---------+---------+---------+---------+---------+---------+---------+----------+---------+---------+
| Taxation | (348) | (247) | (68) | - | - | - | - | - | | (416) | (247) |
+-----------------+---------+---------+---------+---------+---------+---------+---------+---------+----------+---------+---------+
| | 2,263 | 2,191 | 1,231 | (827) | (432) | (296) | (80) | - | | 2,982 | 1,068 |
+-----------------+---------+---------+---------+---------+---------+---------+---------+---------+----------+---------+---------+
| Gain on | | | | | | | | | | | |
| disposals of | | | | | | | | | | | |
+-----------------+---------+---------+---------+---------+---------+---------+---------+---------+----------+---------+---------+
| subsidiaries | | | | | | | | | | 6,598 | - |
| (note 14) | | | | | | | | | | | |
+-----------------+---------+---------+---------+---------+---------+---------+---------+---------+----------+---------+---------+
| Profit for the | | | | | | | | | | 9,580 | 1,068 |
| year | | | | | | | | | | | |
+-----------------+---------+---------+---------+---------+---------+---------+---------+---------+----------+---------+---------+
| | | | | | | | | | | | |
+-----------------+---------+---------+---------+---------+---------+---------+---------+---------+----------+---------+---------+
| Reportable | 37,501 | 34,154 | 3,901 | 947 | 3,012 | 3,141 | 31 | - | | 44,445 | 38,242 |
| segment assets | | | | | | | | | | | |
+-----------------+---------+---------+---------+---------+---------+---------+---------+---------+----------+---------+---------+
| | | | | | | | | | | | |
+-----------------+---------+---------+---------+---------+---------+---------+---------+---------+----------+---------+---------+
| Reportable | | | | | | | | | | | |
| segment | | | | | | | | | | | |
+-----------------+---------+---------+---------+---------+---------+---------+---------+---------+----------+---------+---------+
| liabilities | 6,028 | 4,023 | 1,272 | 438 | 769 | 3,622 | 229 | 150 | | 8,298 | 8,233 |
+-----------------+---------+---------+---------+---------+---------+---------+---------+---------+----------+---------+---------+
| | | | | | | | | | | | |
+-----------------+---------+---------+---------+---------+---------+---------+---------+---------+----------+---------+---------+
| | | | | | | | | | | | |
+-----------------+---------+---------+---------+---------+---------+---------+---------+---------+----------+---------+---------+
For the purposes of monitoring segment performance and allocating resources
between segments:
· all assets are allocated to reportable segments. Assets used jointly by
reportable segments are allocated on the basis of the revenues earned by
individual reportable segments; and.
· all liabilities are allocated to reportable segments. Liabilities for
which reportable segments are jointly liable are allocated in proportion to
segment assets
(b) Other information
+----------------------+---------+---------+-+---------+---------+-+---------+---------+-+---------+---------+-+---------+---------+
| | | | | | | | | | | | | | | |
+----------------------+---------+---------+-+---------+---------+-+---------+---------+-+---------+---------+-+---------+---------+
| | Terminal | | Barging | | Trading and | | Mining | | Total |
| | services | | services | | others | | | | |
+----------------------+-------------------+-+-------------------+-+-------------------+-+-------------------+-+-------------------+
| | 2009 | 2008 | | 2009 | 2008 | | 2009 | 2008 | | 2009 | 2008 | | 2009 | 2008 |
+----------------------+---------+---------+-+---------+---------+-+---------+---------+-+---------+---------+-+---------+---------+
| | US$'000 | US$'000 | | US$'000 | US$'000 | | US$'000 | US$'000 | | US$'000 | US$'000 | | US$'000 | US$'000 |
+----------------------+---------+---------+-+---------+---------+-+---------+---------+-+---------+---------+-+---------+---------+
| | | | | | | | | | | | | | | |
+----------------------+---------+---------+-+---------+---------+-+---------+---------+-+---------+---------+-+---------+---------+
| Capital expenditure | 5,475 | 2,811 | | 1,436 | 27 | | - | 325 | | 1 | - | | 6,912 | 3,163 |
+----------------------+---------+---------+-+---------+---------+-+---------+---------+-+---------+---------+-+---------+---------+
| Depreciation | 1,363 | 1,431 | | 65 | 12 | | 304 | 305 | | - | - | | 1,732 | 1,748 |
+----------------------+---------+---------+-+---------+---------+-+---------+---------+-+---------+---------+-+---------+---------+
| Loss on disposals of | | | | | | | | | | | | | | |
| property, | | | | | | | | | | | | | | |
+----------------------+---------+---------+-+---------+---------+-+---------+---------+-+---------+---------+-+---------+---------+
| plant and | 144 | - | | - | 3 | | - | - | | - | - | | 144 | 3 |
| equipment | | | | | | | | | | | | | | |
+----------------------+---------+---------+-+---------+---------+-+---------+---------+-+---------+---------+-+---------+---------+
| | | | | | | | | | | | | | | |
+----------------------+---------+---------+-+---------+---------+-+---------+---------+-+---------+---------+-+---------+---------+
(c) Geographic information
The following table sets out information about the geographical location of (i)
the Group's revenue from external customers and (ii) the Group's properties,
plants and equipment and goodwill ("specified non-current assets") . The
geographical locations of customers are based on the locations at which the
services are provided or the goods delivered. The geographical locations of the
specified non-current assets are based on the physical locations of the assets,
in the case of property, plant and equipment and the locations of the operations
to which they are allocated, in the case of goodwill.
+--------------------------------------------------------------+----------+---------+-+---------+---------+
| | Revenue from | | Specified |
| | external | | non-current |
| | customers | | assets |
+--------------------------------------------------------------+--------------------+-+-------------------+
| | 2009 | 2008 | | 2009 | 2008 |
+--------------------------------------------------------------+----------+---------+-+---------+---------+
| | US$'000 | US$'000 | | US$'000 | US$'000 |
+--------------------------------------------------------------+----------+---------+-+---------+---------+
| Hong Kong | 9,017 | 2,048 | | 3,071 | 2,477 |
+--------------------------------------------------------------+----------+---------+-+---------+---------+
| Mainland China | 14,546 | 12,252 | | 30,850 | 26,733 |
+--------------------------------------------------------------+----------+---------+-+---------+---------+
| | | | | | |
+--------------------------------------------------------------+----------+---------+-+---------+---------+
| | 23,563 | 14,300 | | 33,921 | 29,210 |
+--------------------------------------------------------------+----------+---------+-+---------+---------+
(d) Information about major customers
For the year ended 31 December 2009, there was one customer who accounted for
over 10% of total revenue with revenue of US$5,573,000 related to barging
services segment.
For the year ended 31 December 2008, there was one customer who accounted for
over 10% of total revenue with revenue of US$2,045,000 related to terminal
services segment.
5. OTHER INCOME
+----------------------------------+---------+-------------+--+-------------+----------+
| | | 2009 | | 2008 | |
+----------------------------------+---------+-------------+--+-------------+----------+
| | | US$'000 | | US$'000 | |
+----------------------------------+---------+-------------+--+-------------+----------+
| | | | | | |
+----------------------------------+---------+-------------+--+-------------+----------+
| Exchange gains | | - | | 44 | |
+----------------------------------+---------+-------------+--+-------------+----------+
| Bad debts recovery - on other | | 391 | | - | |
| receivables | | | | | |
+----------------------------------+---------+-------------+--+-------------+----------+
| Bank interest income | | 1 | | 1 | |
+----------------------------------+---------+-------------+--+-------------+----------+
| Others | | 6 | | 110 | |
+----------------------------------+---------+-------------+--+-------------+----------+
| | | | | | |
+----------------------------------+---------+-------------+--+-------------+----------+
| | | 398 | | 155 | |
+----------------------------------+---------+-------------+--+-------------+----------+
| | | | | | |
+----------------------------------+---------+-------------+--+-------------+----------+
6. PROFIT BEFORE TAXATION
Profit before taxation is stated after charging:
+------------------------------------------+-+-------------+--+-------------+----------+
| | | 2009 | | 2008 | |
+------------------------------------------+-+-------------+--+-------------+----------+
| | | US$'000 | | US$'000 | |
+------------------------------------------+-+-------------+--+-------------+----------+
| (a) Finance costs | | | | | |
+------------------------------------------+-+-------------+--+-------------+----------+
| | | | | | |
+------------------------------------------+-+-------------+--+-------------+----------+
| Interests on | | | | | |
+------------------------------------------+-+-------------+--+-------------+----------+
| - Finance leases | | 80 | | 43 | |
+------------------------------------------+-+-------------+--+-------------+----------+
| - Bank loan | | - | | 133 | |
+------------------------------------------+-+-------------+--+-------------+----------+
| | | | | | |
+------------------------------------------+-+-------------+--+-------------+----------+
| | | 80 | | 176 | |
+------------------------------------------+-+-------------+--+-------------+----------+
| | | | | | |
+------------------------------------------+-+-------------+--+-------------+----------+
+------------------------------------------+-+-------------+--+-------------+----------+
| (b) Staff costs (including | | | | | |
| directors' remuneration) | | | | | |
+------------------------------------------+-+-------------+--+-------------+----------+
| | | 2009 | | 2008 | |
+------------------------------------------+-+-------------+--+-------------+----------+
| | | US$'000 | | US$'000 | |
+------------------------------------------+-+-------------+--+-------------+----------+
| | | | | | |
+------------------------------------------+-+-------------+--+-------------+----------+
| Wages and salaries | | | | | |
| - included in cost of sales | | 1,872 | | 1,681 | |
+------------------------------------------+-+-------------+--+-------------+----------+
| - included in administrative expenses | | 764 | | 635 | |
+------------------------------------------+-+-------------+--+-------------+----------+
| Other pension costs | | 36 | | 18 | |
+------------------------------------------+-+-------------+--+-------------+----------+
| Other staff welfare | | 14 | | 3 | |
+------------------------------------------+-+-------------+--+-------------+----------+
| Social security costs | | 3 | | 1 | |
+------------------------------------------+-+-------------+--+-------------+----------+
| | | | | | |
+------------------------------------------+-+-------------+--+-------------+----------+
| | | 2,689 | | 2,338 | |
+------------------------------------------+-+-------------+--+-------------+----------+
| | | | | | |
+------------------------------------------+-+-------------+--+-------------+----------+
Other than specified, staff costs are included in administrative expenses in the
consolidated income statement.
+------------------------------------------+-+-------------+--+-------------+----------+
| | | 2009 | | 2008 | |
+------------------------------------------+-+-------------+--+-------------+----------+
| | | Number | | Number | |
| | | of | | of | |
| | | staff | | staff | |
+------------------------------------------+-+-------------+--+-------------+----------+
| The average monthly number of persons | | | | | |
| (including | | | | | |
| directors) employed by the Group | | | | | |
| during the year was: | | | | | |
+------------------------------------------+-+-------------+--+-------------+----------+
| | | | | | |
+------------------------------------------+-+-------------+--+-------------+----------+
| Management and administration | | 42 | | 40 | |
+------------------------------------------+-+-------------+--+-------------+----------+
| Sales and distribution | | 15 | | 17 | |
+------------------------------------------+-+-------------+--+-------------+----------+
| Operations | | 421 | | 379 | |
+------------------------------------------+-+-------------+--+-------------+----------+
| | | | | | |
+------------------------------------------+-+-------------+--+-------------+----------+
| | | 478 | | 436 | |
+------------------------------------------+-+-------------+--+-------------+----------+
| | | | | | |
+------------------------------------------+-+-------------+--+-------------+----------+
| | | 2009 | | 2008 | |
+------------------------------------------+-+-------------+--+-------------+----------+
| | | US$'000 | | US$'000 | |
+------------------------------------------+-+-------------+--+-------------+----------+
| (c) Other items | | | | | |
+------------------------------------------+-+-------------+--+-------------+----------+
| | | | | | |
+------------------------------------------+-+-------------+--+-------------+----------+
| Fees payable to Baker Tilly UK Audit LLP | | | | | |
| for the | | | | | |
+------------------------------------------+-+-------------+--+-------------+----------+
| statutory audit of the parent and | | | | | |
| consolidated annual | | | | | |
+------------------------------------------+-+-------------+--+-------------+----------+
| financial statements | | 35 | | 34 | |
+------------------------------------------+-+-------------+--+-------------+----------+
| Fees payable to associates of the | | | | | |
| Company's auditors | | | | | |
+------------------------------------------+-+-------------+--+-------------+----------+
| for the statutory audit of the | | 43 | | 41 | |
| Company's subsidiaries | | | | | |
+------------------------------------------+-+-------------+--+-------------+----------+
| Depreciation | | 1,732 | | 1,748 | |
+------------------------------------------+-+-------------+--+-------------+----------+
| Loss on disposal of property, plant and | | 144 | | 3 | |
| equipment | | | | | |
+------------------------------------------+-+-------------+--+-------------+----------+
| Exchange losses | | 337 | | - | |
+------------------------------------------+-+-------------+--+-------------+----------+
| Rentals under operating leases | | | | | |
+------------------------------------------+-+-------------+--+-------------+----------+
| - land and buildings | | 186 | | 151 | |
+------------------------------------------+-+-------------+--+-------------+----------+
| - barges and containers | | 727 | | - | |
+------------------------------------------+-+-------------+--+-------------+----------+
| | | | | | |
+------------------------------------------+-+-------------+--+-------------+----------+
7. TAXATION
The amount of income tax expense charged to the consolidated income statement
represents:
+------------------------------------------+-+-------------+--+-------------+----------+
| | | | | | |
+------------------------------------------+-+-------------+--+-------------+----------+
| | | 2009 | | 2008 | |
+------------------------------------------+-+-------------+--+-------------+----------+
| | | US$'000 | | US$'000 | |
+------------------------------------------+-+-------------+--+-------------+----------+
| | | | | | |
+------------------------------------------+-+-------------+--+-------------+----------+
| Current tax: | | | | | |
+------------------------------------------+-+-------------+--+-------------+----------+
| - overseas tax for the year | | 348 | | 247 | |
+------------------------------------------+-+-------------+--+-------------+----------+
| | | | | | |
+------------------------------------------+-+-------------+--+-------------+----------+
| Deferred tax (note 23): | | | | | |
+------------------------------------------+-+-------------+--+-------------+----------+
| - current year | | 68 | | - | |
+------------------------------------------+-+-------------+--+-------------+----------+
| | | | | | |
+------------------------------------------+-+-------------+--+-------------+----------+
| | | 416 | | 247 | |
+------------------------------------------+-+-------------+--+-------------+----------+
| | | | | | |
+------------------------------------------+-+-------------+--+-------------+----------+
The actual tax expense can be reconciled to the profit before taxation in the
consolidated income statement as follows:
+------------------------------------------+-+-------------+--+-------------+----------+
| | | | | | |
+------------------------------------------+-+-------------+--+-------------+----------+
| | | 2009 | | 2008 | |
+------------------------------------------+-+-------------+--+-------------+----------+
| | | US$'000 | | US$'000 | |
+------------------------------------------+-+-------------+--+-------------+----------+
| | | | | | |
+------------------------------------------+-+-------------+--+-------------+----------+
| Profit before taxation | | 9,996 | | 1,315 | |
+------------------------------------------+-+-------------+--+-------------+----------+
| | | | | | |
+------------------------------------------+-+-------------+--+-------------+----------+
| Notional tax at the standard rate of | | | | | |
| corporation tax | | | | | |
+------------------------------------------+-+-------------+--+-------------+----------+
| in the UK of 28% (2008: 28%) | | 2,799 | | 368 | |
+------------------------------------------+-+-------------+--+-------------+----------+
| Effects of: | | | | | |
+------------------------------------------+-+-------------+--+-------------+----------+
| Different tax rates on overseas | | (447 | )| (173 | ) |
| earnings | | | | | |
+------------------------------------------+-+-------------+--+-------------+----------+
| Expenses not deductible for tax | | 233 | | 134 | |
| purposes | | | | | |
+------------------------------------------+-+-------------+--+-------------+----------+
| Non-taxable income | | (2,092 | )| (31 | ) |
+------------------------------------------+-+-------------+--+-------------+----------+
| Temporary differences not recognised | | (1 | )| (14 | ) |
+------------------------------------------+-+-------------+--+-------------+----------+
| Utilisation of tax losses previously | | (76 | )| (43 | ) |
| not recognised | | | | | |
+------------------------------------------+-+-------------+--+-------------+----------+
| Addition to tax losses | | - | | 7 | |
+------------------------------------------+-+-------------+--+-------------+----------+
| Change in tax rate | | - | | (1 | ) |
+------------------------------------------+-+-------------+--+-------------+----------+
| | | | | | |
+------------------------------------------+-+-------------+--+-------------+----------+
| Tax charge for the year | | 416 | | 247 | |
+------------------------------------------+-+-------------+--+-------------+----------+
| | | | | | |
+------------------------------------------+-+-------------+--+-------------+----------+
In respect of subsidiaries operating in Hong Kong, no provision for Hong Kong
profits tax are provided as there are sufficient tax losses brought forward to
set off against current year's assessable profit.
Subsidiaries operating in the PRC are subject to Enterprise Income Tax ('EIT')
at a rate of 25%. However, the Company's subsidiary in Guangzhou is now subject
to a preferential tax rate of 20% as described below. Others had tax losses
brought forward from previous years.
On 16 March 2007, the National People's Congress passed the Corporate Income Tax
Law of the PRC (the "Tax Law"). Under the Tax Law, the EIT tax rate applicable
to the Company's subsidiary in Guangzhou is increased from 15% to 25%
progressively within five years from 1 January 2008 (2008: 18%; 2009: 20%; 2010:
22%; 2011: 24%; 2012:25%). The Tax Law has been applied when measuring the
Group's current tax payable as at 31 December 2009 and 2008.
8. DIRECTORS' REMUNERATION
Included in staff costs are amounts paid to directors for services during the
year:
+------------------------------------------+-+-------------+--+-------------+----------+
| | | | | | |
+------------------------------------------+-+-------------+--+-------------+----------+
| | | 2009 | | 2008 | |
+------------------------------------------+-+-------------+--+-------------+----------+
| | | US$'000 | | US$'000 | |
+------------------------------------------+-+-------------+--+-------------+----------+
| | | | | | |
+------------------------------------------+-+-------------+--+-------------+----------+
| Directors' remuneration | | | | | |
+------------------------------------------+-+-------------+--+-------------+----------+
| - Directors' emoluments - salaries | | 123 | | 130 | |
+------------------------------------------+-+-------------+--+-------------+----------+
| - Directors' emoluments - pension | | 4 | | 1 | |
| costs | | | | | |
+------------------------------------------+-+-------------+--+-------------+----------+
| | | | | | |
+------------------------------------------+-+-------------+--+-------------+----------+
| | | 127 | | 131 | |
+------------------------------------------+-+-------------+--+-------------+----------+
9. DIVIDEND
The directors do not recommend the payment of any dividend.
10. EARNINGS PER SHARE
Basic and diluted earnings per share are calculated by dividing the earnings
attributable to equity holders of the Parent by the weighted average number of
ordinary shares in issue during the years ended 31 December 2009 and 2008
respectively.
+------------------------------------------+-+---------------+--+---------------+----------+
| | | | | | |
+------------------------------------------+-+---------------+--+---------------+----------+
| | | 2009 | | 2008 | |
+------------------------------------------+-+---------------+--+---------------+----------+
| | | | | | |
+------------------------------------------+-+---------------+--+---------------+----------+
| Profit attributable to owners of the | | | | | |
| Parent | | | | | |
+------------------------------------------+-+---------------+--+---------------+----------+
| (US$'000) | | 8,751 | | 360 | |
+------------------------------------------+-+---------------+--+---------------+----------+
| | | | | | |
+------------------------------------------+-+---------------+--+---------------+----------+
| Weighted average number of shares in | | 1,978,895,139 | | 1,978,895,139 | |
| issue | | | | | |
+------------------------------------------+-+---------------+--+---------------+----------+
| | | | | | |
+------------------------------------------+-+---------------+--+---------------+----------+
| Basic and diluted earnings per share (US | | 0.44 | | 0.02 | |
| cents) | | | | | |
+------------------------------------------+-+---------------+--+---------------+----------+
| | | | | | |
+------------------------------------------+-+---------------+--+---------------+----------+
11. GOODWILL
+------------------------------------------+-+-------------+--+-------------+----------+
| | | 2009 | | 2008 | |
+------------------------------------------+-+-------------+--+-------------+----------+
| Group | | US$'000 | | US$'000 | |
+------------------------------------------+-+-------------+--+-------------+----------+
| | | | | | |
+------------------------------------------+-+-------------+--+-------------+----------+
| Cost | | | | | |
+------------------------------------------+-+-------------+--+-------------+----------+
| At 1 January | | 22,807 | | 22,806 | |
+------------------------------------------+-+-------------+--+-------------+----------+
| Disposal of subsidiaries | | (11,967) | | - | |
+------------------------------------------+-+-------------+--+-------------+----------+
| Exchange realignment | | - | | 1 | |
+------------------------------------------+-+-------------+--+-------------+----------+
| At 31 December | | 10,840 | | 22,807 | |
+------------------------------------------+-+-------------+--+-------------+----------+
| | | | | | |
+------------------------------------------+-+-------------+--+-------------+----------+
| Impairment | | | | | |
+------------------------------------------+-+-------------+--+-------------+----------+
| At 1 January | | 20,972 | | 20,972 | |
+------------------------------------------+-+-------------+--+-------------+----------+
| Disposal of subsidiaries | | (11,967) | | - | |
+------------------------------------------+-+-------------+--+-------------+----------+
| At 31 December | | 9,005 | | 20,972 | |
+------------------------------------------+-+-------------+--+-------------+----------+
| | | | | | |
+------------------------------------------+-+-------------+--+-------------+----------+
| Carrying values | | | | | |
+------------------------------------------+-+-------------+--+-------------+----------+
| At 31 December | | 1,835 | | 1,835 | |
+------------------------------------------+-+-------------+--+-------------+----------+
| | | | | | |
+------------------------------------------+-+-------------+--+-------------+----------+
| At 1 January | | 1,835 | | 1,834 | |
+------------------------------------------+-+-------------+--+-------------+----------+
| | | | | | |
+------------------------------------------+-+-------------+--+-------------+----------+
For the purpose of impairment testing, goodwill arising from an acquisition is
allocated to individual cash generating units ("CGUs") that are expected to
benefit from the business combination. At the balance sheet date, the carrying
value of goodwill (net of accumulated impairment losses) is allocated to the
following CGUs.
+------------------------------------------+-+-------------+--+-------------+----------+
| | | | | | |
+------------------------------------------+-+-------------+--+-------------+----------+
| | | 2009 | | 2008 | |
+------------------------------------------+-+-------------+--+-------------+----------+
| | | US$'000 | | US$'000 | |
+------------------------------------------+-+-------------+--+-------------+----------+
| | | | | | |
+------------------------------------------+-+-------------+--+-------------+----------+
| Terminal services | | 1,835 | | 1,835 | |
+------------------------------------------+-+-------------+--+-------------+----------+
| | | | | | |
+------------------------------------------+-+-------------+--+-------------+----------+
During the year ended 31 December 2009, management of the Group determines that
there is no impairment (2008: US$nil) of any goodwill of its CGUs.
The recoverable amount of the terminal services CGU has been determined based on
a value in use calculation. That calculation uses cash flow projections based
on financial budgets approved by management covering a five-year period, and a
discount rate of 10% (2008: 10%). The key assumptions for the value in use
calculations relate to the estimation of cash inflows/outflows which include
budgeted sales and gross margin, such estimation is based on the unit's past
performance and management's expectations for the market development.
Management believes that any reasonably possible change in any of these
assumptions would not cause the aggregate carrying amount of the terminal
services unit to exceed the aggregate recoverable amount of that unit.
12. PROPERTY, PLANT AND EQUIPMENT
+-------------------------+------------------+----------------+----------------+---------------+------------------+------------------+-----------------+--------------+
| | Land and | Plant | Furniture, | Oil | Vessels | Motor | Construction | Total |
| | buildings | and | fixtures | storage | | vehicles | | |
| | | machinery | and | tanks | | | in progress | |
| | | | equipment | | | | | |
+-------------------------+------------------+----------------+----------------+---------------+------------------+------------------+-----------------+--------------+
| Group | US$'000 | US$'000 | US$'000 | US$'000 | US$'000 | US$'000 | US$'000 | US$'000 |
+-------------------------+------------------+----------------+----------------+---------------+------------------+------------------+-----------------+--------------+
| | | | | | | | | |
+-------------------------+------------------+----------------+----------------+---------------+------------------+------------------+-----------------+--------------+
| Cost | | | | | | | | |
+-------------------------+------------------+----------------+----------------+---------------+------------------+------------------+-----------------+--------------+
| At 1 January 2008 | 23,624 | 27,656 | 8,788 | 173 | 2,126 | 868 | 879 | 64,114 |
+-------------------------+------------------+----------------+----------------+---------------+------------------+------------------+-----------------+--------------+
| Reclassification | 9 | 138 | (65) | - | - | (82) | - | - |
+-------------------------+------------------+----------------+----------------+---------------+------------------+------------------+-----------------+--------------+
| Additions | 1,313 | 779 | 39 | - | 324 | 60 | 648 | 3,163 |
+-------------------------+------------------+----------------+----------------+---------------+------------------+------------------+-----------------+--------------+
| Disposals | (27) | - | (4) | - | - | - | - | (31) |
+-------------------------+------------------+----------------+----------------+---------------+------------------+------------------+-----------------+--------------+
| Transfer | - | 965 | - | - | - | - | (965) | - |
+-------------------------+------------------+----------------+----------------+---------------+------------------+------------------+-----------------+--------------+
| Exchange realignment | 2,705 | 468 | (109) | | | 36 | 32 | 3,132 |
| | | | | - | - | | | |
+-------------------------+------------------+----------------+----------------+---------------+------------------+------------------+-----------------+--------------+
| At 31 December 2008 | 27,624 | 30,006 | 8,649 | 173 | 2,450 | 882 | 594 | 70,378 |
+-------------------------+------------------+----------------+----------------+---------------+------------------+------------------+-----------------+--------------+
| Additions | 11 | 4,145 | 65 | - | 1,231 | 114 | 1,346 | 6,912 |
+-------------------------+------------------+----------------+----------------+---------------+------------------+------------------+-----------------+--------------+
| Disposals | - | - | (9) | (173) | (324) | (3) | - | (509) |
+-------------------------+------------------+----------------+----------------+---------------+------------------+------------------+-----------------+--------------+
| Disposals of | (6,238) | (16,205) | (6,785) | - | - | (223) | - | (29,451) |
| subsidiaries | | | | | | | | |
+-------------------------+------------------+----------------+----------------+---------------+------------------+------------------+-----------------+--------------+
| Transfer | 2 | - | - | - | - | - | (2) | - |
+-------------------------+------------------+----------------+----------------+---------------+------------------+------------------+-----------------+--------------+
| Exchange realignment | 1 | 2 | - | | 1 | (1) | | 3 |
| | | | | - | | | - | |
+-------------------------+------------------+----------------+----------------+---------------+------------------+------------------+-----------------+--------------+
| At 31 December 2009 | 21,400 | 17,948 | 1,920 | | 3,358 | 769 | 1,938 | 47,333 |
| | | | | - | | | | |
+-------------------------+------------------+----------------+----------------+---------------+------------------+------------------+-----------------+--------------+
| | | | | | | | | |
+-------------------------+------------------+----------------+----------------+---------------+------------------+------------------+-----------------+--------------+
| Depreciation | | | | | | | | |
+-------------------------+------------------+----------------+----------------+---------------+------------------+------------------+-----------------+--------------+
| At 1 January 2008 | 10,798 | 19,343 | 8,025 | 13 | 848 | 691 | 20 | 39,738 |
+-------------------------+------------------+----------------+----------------+---------------+------------------+------------------+-----------------+--------------+
| Reclassification | (87) | 126 | (13) | - | - | (26) | - | - |
+-------------------------+------------------+----------------+----------------+---------------+------------------+------------------+-----------------+--------------+
| Charge for the year | 631 | 704 | 142 | - | 213 | 58 | - | 1,748 |
| (Note) | | | | | | | | |
+-------------------------+------------------+----------------+----------------+---------------+------------------+------------------+-----------------+--------------+
| Written-back on | (27) | - | (1) | - | - | - | - | (28) |
| disposal | | | | | | | | |
+-------------------------+------------------+----------------+----------------+---------------+------------------+------------------+-----------------+--------------+
| Exchange realignment | 1,852 | (106) | (197) | | (1) | 17 | (20) | 1,545 |
| | | | | - | | | | |
+-------------------------+------------------+----------------+----------------+---------------+------------------+------------------+-----------------+--------------+
| | | | | | | | | |
+-------------------------+------------------+----------------+----------------+---------------+------------------+------------------+-----------------+--------------+
| At 31 December 2008 | 13,167 | 20,067 | 7,956 | 13 | 1,060 | 740 | - | 43,003 |
+-------------------------+------------------+----------------+----------------+---------------+------------------+------------------+-----------------+--------------+
| Charge for the year | 600 | 712 | 136 | - | 243 | 41 | - | 1,732 |
| (Note) | | | | | | | | |
+-------------------------+------------------+----------------+----------------+---------------+------------------+------------------+-----------------+--------------+
| Written-back on | - | - | (2) | (13) | (22) | (3) | - | (40) |
| disposal | | | | | | | | |
+-------------------------+------------------+----------------+----------------+---------------+------------------+------------------+-----------------+--------------+
| Disposals of | (6,238) | (16,205) | (6,784) | - | - | (223) | - | (29,450) |
| subsidiaries | | | | | | | | |
+-------------------------+------------------+----------------+----------------+---------------+------------------+------------------+-----------------+--------------+
| Exchange realignment | 1 | 1 | - | | | | | 2 |
| | | | | - | - | - | - | |
+-------------------------+------------------+----------------+----------------+---------------+------------------+------------------+-----------------+--------------+
| At 31 December 2009 | 7,530 | 4,575 | 1,306 | | 1,281 | 555 | | 15,247 |
| | | | | - | | | - | |
+-------------------------+------------------+----------------+----------------+---------------+------------------+------------------+-----------------+--------------+
| | | | | | | | | |
+-------------------------+------------------+----------------+----------------+---------------+------------------+------------------+-----------------+--------------+
| Carrying values | | | | | | | | |
+-------------------------+------------------+----------------+----------------+---------------+------------------+------------------+-----------------+--------------+
| At 31 December 2009 | 13,870 | 13,373 | 614 | | 2,077 | 214 | 1,938 | 32,086 |
| | | | | - | | | | |
+-------------------------+------------------+----------------+----------------+---------------+------------------+------------------+-----------------+--------------+
| At 31 December 2008 | 14,457 | 9,939 | 693 | 160 | 1,390 | 142 | 594 | 27,375 |
+-------------------------+------------------+----------------+----------------+---------------+------------------+------------------+-----------------+--------------+
| At 31 December 2007 | 12,826 | 8,313 | 763 | 160 | 1,278 | 177 | 859 | 24,376 |
+-------------------------+------------------+----------------+----------------+---------------+------------------+------------------+-----------------+--------------+
Note: Of the depreciation charge for the year, US$1,057,000 (2008:
US$1,087,000) is included in cost of sales and US$675,000 (2008: US$661,000) is
included in administrative expenses in the consolidated income statement.
The net book values of property, plant and equipment held under finance leases
are as follows:
+------------------------------------------+-+-------------+--+-------------+----------+
| | | 2009 | | 2008 | |
+------------------------------------------+-+-------------+--+-------------+----------+
| | | US$'000 | | US$'000 | |
+------------------------------------------+-+-------------+--+-------------+----------+
| | | | | | |
+------------------------------------------+-+-------------+--+-------------+----------+
| Land and buildings | | 13,870 | | 14,457 | |
+------------------------------------------+-+-------------+--+-------------+----------+
| Plant and machinery | | 3,175 | | 1,854 | |
+------------------------------------------+-+-------------+--+-------------+----------+
| Motor vehicles | | 161 | | 65 | |
+------------------------------------------+-+-------------+--+-------------+----------+
| | | | | | |
+------------------------------------------+-+-------------+--+-------------+----------+
| | | 17,206 | | 16,376 | |
+------------------------------------------+-+-------------+--+-------------+----------+
| | | | | | |
+------------------------------------------+-+-------------+--+-------------+----------+
At 31 December 2009, the carrying values of land and buildings, plant and
machinery and furniture, fixtures and equipment are further analysed as follows:
+-----------------------------------+-------------+------------+-------------+
| | Terminal | Others | Total |
| | US$'000 | US$'000 | US$'000 |
+-----------------------------------+-------------+------------+-------------+
| Land | 1,828 | - | 1,828 |
| - short lease | | | |
+-----------------------------------+-------------+------------+-------------+
| - unspecified leases | 1,378 | | 1,378 |
| | | - | |
+-----------------------------------+-------------+------------+-------------+
| | | | |
+-----------------------------------+-------------+------------+-------------+
| | 3,206 | - | 3,206 |
+-----------------------------------+-------------+------------+-------------+
| Buildings | 10,664 | | 10,664 |
| | | - | |
+-----------------------------------+-------------+------------+-------------+
| | | | |
+-----------------------------------+-------------+------------+-------------+
| Land and buildings | 13,870 | | 13,870 |
| | | - | |
+-----------------------------------+-------------+------------+-------------+
| | | | |
+-----------------------------------+-------------+------------+-------------+
| Plant and machinery | 13,287 | | 13,287 |
| | | - | |
+-----------------------------------+-------------+------------+-------------+
| | | | |
+-----------------------------------+-------------+------------+-------------+
| Furniture, fixtures and equipment | 125 | 575 | 700 |
+-----------------------------------+-------------+------------+-------------+
The Group has obtained land use right and real estates certificates on the
terminal's land under short leases from the local land authority. Land with a
value of approximately US$1,378,000 held under unspecified leases of the
terminal is land held for industrial use for which the relevant land use right
certificate has not been obtained and thus the term of the lease has yet to be
agreed.
Under the law of the PRC, land held for industrial use and the buildings without
building ownership certificates can only be used for identified industrial
purposes. The Group has not obtained any building ownership certificates in
respect of the buildings of the Group. The Group cannot legally sell or
mortgage such properties until the relevant land taxes have been paid to the
local land authority. However there is no binding agreement for the taxes to be
paid.
13. INVESTMENTS IN SUBSIDIARIES
+------------------------------------------+-+--------------------------+--+-------------+----------+
| | | | | | |
+------------------------------------------+-+--------------------------+--+-------------+----------+
| | | 2009 | | 2008 | |
+------------------------------------------+-+--------------------------+--+-------------+----------+
| Company | | US$'000 | | US$'000 | |
+------------------------------------------+-+--------------------------+--+-------------+----------+
| | | | | | |
+------------------------------------------+-+--------------------------+--+-------------+----------+
| Unlisted shares, at cost | | | | | |
+------------------------------------------+-+--------------------------+--+-------------+----------+
| At 1 January | | 56,015 | | 56,015 | |
+------------------------------------------+-+--------------------------+--+-------------+----------+
| Exchange realignment | | 4,956 | | - | |
+------------------------------------------+-+--------------------------+--+-------------+----------+
| | | | | | |
+------------------------------------------+-+--------------------------+--+-------------+----------+
| At 31 December | | 60,971 | | 56,015 | |
+------------------------------------------+-+--------------------------+--+-------------+----------+
| | | | | | |
+------------------------------------------+-+--------------------------+--+-------------+----------+
| Impairment | | | | | |
+------------------------------------------+-+--------------------------+--+-------------+----------+
| At 1 January | | 37,259 | | 31,797 | |
+------------------------------------------+-+--------------------------+--+-------------+----------+
| Charge for the year | | - | | 5,462 | |
+------------------------------------------+-+--------------------------+--+-------------+----------+
| Impairment loss reversed in profit and | | 9,020 | | - | |
| loss | | | | | |
+------------------------------------------+-+--------------------------+--+-------------+----------+
| Exchange realignment | | 3,297 | | - | |
+------------------------------------------+-+--------------------------+--+-------------+----------+
| | | | | | |
+------------------------------------------+-+--------------------------+--+-------------+----------+
| At 31 December | | 31,536 | | 37,259 | |
+------------------------------------------+-+--------------------------+--+-------------+----------+
| | | | | | |
+------------------------------------------+-+--------------------------+--+-------------+----------+
| Carrying values | | | | | |
+------------------------------------------+-+--------------------------+--+-------------+----------+
| At 31 December | | 29,435 | | 18,756 | |
+------------------------------------------+-+--------------------------+--+-------------+----------+
| | | | | | |
+------------------------------------------+-+--------------------------+--+-------------+----------+
| At 1 January | | 18,756 | | 24,218 | |
+------------------------------------------+-+--------------------------+--+-------------+----------+
| | | | | | |
+------------------------------------------+-+--------------------------+--+-------------+----------+
At 31 December 2009, the Company held 100% of the ordinary shares of Yinggao
Investments Limited (formerly known as Arko Offshore Holdings Limited), a
company incorporated in the British Virgin Islands ("BVI"), whose principal
activity was that of an investment holding company. Yinggao Investments Limited
had the following subsidiary undertakings:
+--------------------------+-------+-------+----------------+---------------+
| | Equity | | |
| | interests | | Place of |
| Name | attributable | Principal | incorporation |
| | to the Group | activities | |
+--------------------------+---------------+----------------+---------------+
| | 2009 | 2008 | | |
+--------------------------+-------+-------+----------------+---------------+
| | | | | |
+--------------------------+-------+-------+----------------+---------------+
| Yinggao Energy Limited * | 100% | 100% | Investment | BVI |
| # | | | holding | |
+--------------------------+-------+-------+----------------+---------------+
| Yinggao Consultants | 100% | 100% | Providing | BVI |
| Limited * # | | | management | |
| | | | services | |
+--------------------------+-------+-------+----------------+---------------+
| Yinggao Pacific Limited | 100% | 100% | Investment | BVI |
| * # | | | holding | |
+--------------------------+-------+-------+----------------+---------------+
| Sanko Mineral Limited | 100% | 100% | Sub-letting of | BVI |
| | | | yachts, | |
| | | | ships and | |
| | | | vessels | |
+--------------------------+-------+-------+----------------+---------------+
| Yinggao Shipping (H.K.) | 100% | 100% | Providing | Hong Kong |
| Limited # | | | logistics | |
| | | | and related | |
| | | | services | |
+--------------------------+-------+-------+----------------+---------------+
| Yinggao Shipping Limited | 100% | - | Providing | Hong Kong |
| ("YSL") | | | logistics | |
| | | | and related | |
| | | | services | |
+--------------------------+-------+-------+----------------+---------------+
| Yinggao Ship Chartering | 100% | - | Barge hiring | Hong Kong |
| Limited | | | and | |
| | | | agency | |
| | | | services | |
+--------------------------+-------+-------+----------------+---------------+
| Arko Terminal Limited | 100% | 100% | Investment | Republic of |
| ("ATL") * | | | holding | Seychelles |
+--------------------------+-------+-------+----------------+---------------+
| Keen Chance Terminal | 40% | 40% | Investing in | PRC |
| | | | and operation | |
| Limited("KCT") | | | of a terminal | |
| | | | and providing | |
| | | | logistics | |
| | | | services | |
+--------------------------+-------+-------+----------------+---------------+
| Fujian Sanko Mining | 70% | 70% | Dormant | PRC |
| Limited | | | | |
+--------------------------+-------+-------+----------------+---------------+
Details of subsidiaries disposed of in the year are set out in note 14.
* Directly held by Yinggao Investments Limited. All other subsidiaries are
indirectly held.
# During the year, the group has changed the name of certain of its
subsidiaries as listed below by passing relevant board resolutions in each of
the group companies to match their core businesses with present operating
activities in terminal operation and barging service operation in the PRC:
+-+--+--------------------------+------------------------+-----------------+
| | | Present names | Previous names | Effective Date |
+-+--+--------------------------+------------------------+-----------------+
| | | Yinggao Investments | Arko Offshore Holdings | 09 June 2009 |
| | | Limited | Limited | |
+-+--+--------------------------+------------------------+-----------------+
| | | Yinggao Energy Limited | Arko Energy Limited | 11 June 2009 |
+-+--+--------------------------+------------------------+-----------------+
| | | Yinggao Consultants | Arko Consultants | 09 June 2009 |
| | | Limited | Limited | |
+-+--+--------------------------+------------------------+-----------------+
| | | Yinggao Pacific Limited | Arko Pacific Limited | 09 June 2009 |
+-+--+--------------------------+------------------------+-----------------+
| | | Yinggao Shipping (H.K.) | Arko Shipping Limited | 12 June 2009 |
| | | Limited | | |
+-+--+--------------------------+------------------------+-----------------+
The 40% equity interest in KCT previously held by Keen Lloyd Energy Limited
("KLEL"), a subsidiary of Keen Lloyd Holdings Limited ("KLHL"), has been
transferred to ATL. The transfer had been submitted for registration to the
relevant PRC authorities.
Pursuant to an agreement dated 5 April 2002 entered into between KLEL and
Miaotou Economic Development(GZ) Company Limited ("MEDCL"), (a shareholder of
KCT who held a 30% equity interest in KCT), MEDCL agreed to vote in accordance
with the instructions of KLEL at board meetings in view of its indebtedness to
KLEL, for an approximate sum of RMB78 million (equivalent to US$9.4 million),
and KLEL intended to convert the outstanding loan into registered capital of
KCT.
On 22 April 2003, KLEL entered into a shareholder agreement with MEDCL and
Harbour Economic Development Company Limited ("HEDCL"), another shareholder in
KCT, whereby all parties agreed that MEDCL has unconditionally transferred the
authority empowered to its directors representative (including their rights and
obligations) to KLEL until KLEL transferred the 40% equity interests in KCL to
ATL to reiterate the aforesaid agreement dated 5 April 2002.
On 16 May 2003, a supplemental agreement was entered into between ATL, KLEL,
MEDCL and HEDCL by which all parties agreed that the above authority transferred
to KLEL would be vested in ATL after KLEL completed the transfer of equity
interests in KCT to ATL.
In accordance with the terms and conditions set out in the above agreements,
KLEL effectively controls the board of KCT and this arrangement has been
confirmed by the shareholders of KCT. In 2002, a Hong Kong lawyer expressed his
view that KCT is a subsidiary of KLEL under Hong Kong Company Law. Control of
KLEL has been transferred to ATL and therefore in the opinion of the directors,
KCT is a subsidiary of ATL under the Companies Act 2006.
KCT will be a legal subsidiary of ATL immediately upon the registration of the
transfer of the 40% of equity in KCT from KLEL to ATL.
14. DISPOSALS of subsidiarIES
On 4 September 2009, the Group disposed of its 100% equity interest in Long
Prosperity Industrial Limited ("LPIL") to Winko Foundation Limited ("WFL"), a
wholly owned subsidiary of KLHL, at a consideration of US$1.
On 23 March 2009, the Group disposed of its 100% equity interest in Arko
Satellite Limited ("ASL") to a third party at a consideration of US$1,000.
In March 2009, the business licence of Arko Silicon (Hubei) Limited ("ASHL") was
de-registered by the PRC Business Bureau. The Group has therefore written-off
its 100% interests in ASHL.
The consolidated net liabilities of LPIL and its subsidiary (i.e. Changzhou
Power Development Company Limited ("CPDCL")), net assets of ASL and net assets
of ASHL disposed of were as follows:
+---------------------+-------------+--------------+---------------+-------------+
| | LPIL | | | |
| | and its | | | |
+---------------------+-------------+--------------+---------------+-------------+
| | subsidiary | ASL | ASHL | Total |
+---------------------+-------------+--------------+---------------+-------------+
| | US$'000 | US$'000 | US$'000 | US$'000 |
+---------------------+-------------+--------------+---------------+-------------+
| | | | | |
+---------------------+-------------+--------------+---------------+-------------+
| Property, plant and | - | - | 1 | 1 |
| equipment | | | | |
+---------------------+-------------+--------------+---------------+-------------+
| Other receivables | 22 | - | - | 22 |
+---------------------+-------------+--------------+---------------+-------------+
| Cash and cash | 2 | - | 1 | 3 |
| equivalents | | | | |
+---------------------+-------------+--------------+---------------+-------------+
| Trade and other | (1,200) | - | - | (1,200) |
| payables | | | | |
+---------------------+-------------+--------------+---------------+-------------+
| Bank loan | (1,915) | - | - | (1,915) |
+---------------------+-------------+--------------+---------------+-------------+
| Loans from fellow | (69) | | | (69) |
| investors | | - | - | |
+---------------------+-------------+--------------+---------------+-------------+
| | | | | |
+---------------------+-------------+--------------+---------------+-------------+
| | (3,160) | - | 2 | (3,158) |
+---------------------+-------------+--------------+---------------+-------------+
| Minority interest | (3,833) | | | (3,833) |
| | | - | - | |
+---------------------+-------------+--------------+---------------+-------------+
| Exchange loss | 394 | | | 394 |
| realised | | - | - | |
+---------------------+-------------+--------------+---------------+-------------+
| | | | | |
+---------------------+-------------+--------------+---------------+-------------+
| | (6,599) | - | 2 | (6,597) |
+---------------------+-------------+--------------+---------------+-------------+
| Gain/(loss) on | 6,599 | 1 | (2) | 6,598 |
| disposals | | | | |
+---------------------+-------------+--------------+---------------+-------------+
| | | | | |
+---------------------+-------------+--------------+---------------+-------------+
| Total consideration | | 1 | | 1 |
| | - | | - | |
+---------------------+-------------+--------------+---------------+-------------+
+---------------------+--------------+--------------+--------------+--------------+
| | LPIL | | | |
| | and its | | | |
+---------------------+--------------+--------------+--------------+--------------+
| | subsidiary | ASL | ASHL | Total |
+---------------------+--------------+--------------+--------------+--------------+
| | US$'000 | US$'000 | US$'000 | US$'000 |
+---------------------+--------------+--------------+--------------+--------------+
| Net cash | | | | |
| inflow/(outflow) | | | | |
+---------------------+--------------+--------------+--------------+--------------+
| arising on | | | | |
| disposals: | | | | |
+---------------------+--------------+--------------+--------------+--------------+
| | | | | |
+---------------------+--------------+--------------+--------------+--------------+
| Cash consideration | - | 1 | - | 1 |
| received | | | | |
+---------------------+--------------+--------------+--------------+--------------+
| Cash and cash | | | | |
| equivalents | | | | |
+---------------------+--------------+--------------+--------------+--------------+
| disposed of | (2) | | (1) | (3) |
| | | - | | |
+---------------------+--------------+--------------+--------------+--------------+
| | | | | |
+---------------------+--------------+--------------+--------------+--------------+
| | (2) | 1 | (1) | (2) |
+---------------------+--------------+--------------+--------------+--------------+
| | | | | |
+---------------------+--------------+--------------+--------------+--------------+
15. AVAILABLE-FOR-SALE INVESTMENT
+------------------------------------------+-+-------------+--+-------------+----------+
| | | | | | |
+------------------------------------------+-+-------------+--+-------------+----------+
| | | 2009 | | 2008 | |
+------------------------------------------+-+-------------+--+-------------+----------+
| Group | | US$'000 | | US$'000 | |
+------------------------------------------+-+-------------+--+-------------+----------+
| | | | | | |
+------------------------------------------+-+-------------+--+-------------+----------+
| Unlisted in the PRC | | - | | 12 | |
+------------------------------------------+-+-------------+--+-------------+----------+
| | | | | | |
+------------------------------------------+-+-------------+--+-------------+----------+
The above investment represents 20% of the ordinary shares in a company
incorporated in the PRC of China, Guangzhou Tonglai Shipping Agents Company
Limited, at consideration of RMB100,000 (approximately US$12,000). The associate
is principally engaged in provision of logistics and related services. It is
not treated as an investment in associate on the ground of its immaterial
amount. The investment was disposed of at book value during the year.
16. INVENTORIES
Inventories represent consumables. There was no significant difference between
the replacement cost and the value shown in the balance sheet.
17. TRADE AND OTHER RECEIVABLES
+--------------------------+---------+---------+----------+---------+---------+
| | | | |
+--------------------------+-------------------+----------+-------------------+
| | Group | | Company |
+--------------------------+-------------------+----------+-------------------+
| | 2009 | 2008 | | 2009 | 2008 |
+--------------------------+---------+---------+----------+---------+---------+
| | US$'000 | US$'000 | | US$'000 | US$'000 |
+--------------------------+---------+---------+----------+---------+---------+
| | | | | | |
+--------------------------+---------+---------+----------+---------+---------+
| Trade receivables | 2,875 | 2,721 | | - | - |
+--------------------------+---------+---------+----------+---------+---------+
| Less: allowance for | (86) | (65) | | - | - |
| doubtful debts | | | | | |
+--------------------------+---------+---------+----------+---------+---------+
| | | | | | |
+--------------------------+---------+---------+----------+---------+---------+
| | 2,789 | 2,656 | | - | - |
+--------------------------+---------+---------+----------+---------+---------+
| Deposits | 852 | 811 | | 1 | - |
+--------------------------+---------+---------+----------+---------+---------+
| Prepayments | 275 | 585 | | - | 1 |
+--------------------------+---------+---------+----------+---------+---------+
| Other receivables | 1,352 | 193 | | - | - |
+--------------------------+---------+---------+----------+---------+---------+
| Amounts due from fellow | | | | | |
| investors | | | | | |
+--------------------------+---------+---------+----------+---------+---------+
| of a subsidiary | 2,935 | 2915 | | - | - |
+--------------------------+---------+---------+----------+---------+---------+
| Amounts due from related | | | | | |
| | | | | | |
+--------------------------+---------+---------+----------+---------+---------+
| companies (Note 26) | - | 943 | | - | - |
+--------------------------+---------+---------+----------+---------+---------+
| | | | | | |
+--------------------------+---------+---------+----------+---------+---------+
| | 8,203 | 8,103 | | 1 | 1 |
+--------------------------+---------+---------+----------+---------+---------+
| | | | | | |
+--------------------------+---------+---------+----------+---------+---------+
Trade receivables are due within 30 days from the date of billing. Further
details on the Group's credit policy are set out in note 25(a).
The maximum amount outstanding from related companies during the year was US$
943,000.
These amounts are interest free, unsecured and repayable on demand.
(a) Ageing analysis
The ageing analysis of the Group's trade receivables, net of allowance for
doubtful debts, that are neither individually nor collectively considered to be
impaired are as follows:
+------------------------------------------+-+-------------+--+----------------------+----------+
| | | | | | |
+------------------------------------------+-+-------------+--+----------------------+----------+
| | | 2009 | | 2008 | |
+------------------------------------------+-+-------------+--+----------------------+----------+
| | | US$'000 | | US$'000 | |
+------------------------------------------+-+-------------+--+----------------------+----------+
| | | | | | |
+------------------------------------------+-+-------------+--+----------------------+----------+
| Neither past due nor impaired | | 1,324 | | 990 | |
+------------------------------------------+-+-------------+--+----------------------+----------+
| | | | | | |
+------------------------------------------+-+-------------+--+----------------------+----------+
| Less than one month past due | | 646 | | 761 | |
+------------------------------------------+-+-------------+--+----------------------+----------+
| 1 to 3 months past due | | 729 | | 892 | |
+------------------------------------------+-+-------------+--+----------------------+----------+
| >3 months past due | | 90 | | 13 | |
+------------------------------------------+-+-------------+--+----------------------+----------+
| | | | | | |
+------------------------------------------+-+-------------+--+----------------------+----------+
| Total amounts past due | | 1,465 | | 1,666 | |
+------------------------------------------+-+-------------+--+----------------------+----------+
| | | | | | |
+------------------------------------------+-+-------------+--+----------------------+----------+
| Total | | 2,789 | | 2,656 | |
+------------------------------------------+-+-------------+--+----------------------+----------+
| | | | | | |
+------------------------------------------+-+-------------+--+----------------------+----------+
Receivables that were neither past due nor impaired relate to a wide range of
customers for whom there was no recent history of default.
Receivables that were past due but not impaired relate to a number of
independent customers that have a good track record with the Group. Based on
past experience, management believes that no impairment allowance is necessary
in respect of these balances as there has not been a significant change in
credit quality and the balances are considered fully recoverable. The Group
does not hold any collateral over these balances.
(b) Impairment of trade receivables
Impairment losses in respect of trade receivables are recorded using an
allowance account unless the Group is satisfied that recovery of the amount is
remote, in which case the impairment loss is written off against trade
receivables directly (see note 2(k)).
The movement in the allowance for doubtful debts during the year is as follows:
+------------------------------------------+-+-------------+--+-------------+----------+
| | | | | | |
+------------------------------------------+-+-------------+--+-------------+----------+
| | | 2009 | | 2008 | |
+------------------------------------------+-+-------------+--+-------------+----------+
| | | US$'000 | | US$'000 | |
+------------------------------------------+-+-------------+--+-------------+----------+
| | | | | | |
+------------------------------------------+-+-------------+--+-------------+----------+
| At 1 January | | 65 | | 5 | |
+------------------------------------------+-+-------------+--+-------------+----------+
| Impairment loss recognised | | 21 | | 60 | |
+------------------------------------------+-+-------------+--+-------------+----------+
| | | | | | |
+------------------------------------------+-+-------------+--+-------------+----------+
| At 31 December | | 86 | | 65 | |
+------------------------------------------+-+-------------+--+-------------+----------+
| | | | | | |
+------------------------------------------+-+-------------+--+-------------+----------+
Included in the allowance for doubtful debts are individually impaired trade
debtors with an aggregate balance of US$86,000 (2008: US$65,000) that are in
financial difficulties. The Group does not hold any collateral over these
balances.
18. CASH AND CASH EQUIVALENTS
+--------------------------+---------+---------+----------+---------+---------+
| | | | |
+--------------------------+-------------------+----------+-------------------+
| | Group | | Company |
+--------------------------+-------------------+----------+-------------------+
| | 2009 | 2008 | | 2009 | 2008 |
+--------------------------+---------+---------+----------+---------+---------+
| | US$'000 | US$'000 | | US$'000 | US$'000 |
+--------------------------+---------+---------+----------+---------+---------+
| | | | | | |
+--------------------------+---------+---------+----------+---------+---------+
| Cash in hand and at bank | 2,165 | 780 | | 11 | 2 |
+--------------------------+---------+---------+----------+---------+---------+
| | | | | | |
+--------------------------+---------+---------+----------+---------+---------+
| | 2009 | 2008 | | 2009 | 2008 |
+--------------------------+---------+---------+----------+---------+---------+
| Currency | US$'000 | US$'000 | | US$'000 | US$'000 |
+--------------------------+---------+---------+----------+---------+---------+
| | | | | | |
+--------------------------+---------+---------+----------+---------+---------+
| Hong Kong Dollars | 1,344 | 38 | | 2 | - |
+--------------------------+---------+---------+----------+---------+---------+
| Chinese Renminbi | 812 | 740 | | - | - |
+--------------------------+---------+---------+----------+---------+---------+
| British Pound | 9 | 2 | | 9 | 2 |
+--------------------------+---------+---------+----------+---------+---------+
| | | | | | |
+--------------------------+---------+---------+----------+---------+---------+
| | 2,165 | 780 | | 11 | 2 |
+--------------------------+---------+---------+----------+---------+---------+
| | | | | | |
+--------------------------+---------+---------+----------+---------+---------+
19. TRADE AND OTHER PAYABLES
+--------------------------+---------+---------+----------+---------+---------+
| | | | |
+--------------------------+-------------------+----------+-------------------+
| | Group | | Company |
+--------------------------+-------------------+----------+-------------------+
| | 2009 | 2008 | | 2009 | 2008 |
+--------------------------+---------+---------+----------+---------+---------+
| | US$'000 | US$'000 | | US$'000 | US$'000 |
+--------------------------+---------+---------+----------+---------+---------+
| | | | | | |
+--------------------------+---------+---------+----------+---------+---------+
| Trade payables | 541 | 960 | | 15 | 28 |
+--------------------------+---------+---------+----------+---------+---------+
| Other payables and | 2,810 | 1,422 | | - | - |
| sundry creditors | | | | | |
+--------------------------+---------+---------+----------+---------+---------+
| Accruals | 606 | 746 | | 78 | 3 |
+--------------------------+---------+---------+----------+---------+---------+
| Amounts due to related | 688 | 413 | | - | - |
| companies | | | | | |
+--------------------------+---------+---------+----------+---------+---------+
| (Note 26) | | | | | |
+--------------------------+---------+---------+----------+---------+---------+
| Amount due to immediate | 673 | 366 | | - | - |
| holding | | | | | |
+--------------------------+---------+---------+----------+---------+---------+
| company | | | | | |
+--------------------------+---------+---------+----------+---------+---------+
| | | | | | |
+--------------------------+---------+---------+----------+---------+---------+
| | 5,318 | 3,907 | | 93 | 31 |
+--------------------------+---------+---------+----------+---------+---------+
| | | | | | |
+--------------------------+---------+---------+----------+---------+---------+
The average credit period on purchases of goods is 60 days. The Group has
financial risk management policies in place to ensure that all payables are
settled within the credit timeframe.
20. OBLIGATIONS UNDER FINANCE LEASES
+--------------------------+----------+----------+----------+---------------+----------+
| | | | |
+--------------------------+---------------------+----------+--------------------------+
| | 2009 | | 2008 |
+--------------------------+---------------------+----------+--------------------------+
| | Present | Total | | Present | Total |
| | value | minimum | | value | minimum |
| | of the | lease | | of the | lease |
| | minimum | payments | | minimum | payments |
| | lease | | | lease | |
| | payments | | | payments | |
+--------------------------+----------+----------+----------+---------------+----------+
| Group | US$'000 | US$'000 | | US$'000 | US$'000 |
+--------------------------+----------+----------+----------+---------------+----------+
| | | | | | |
+--------------------------+----------+----------+----------+---------------+----------+
| Within 1 year | 870 | 906 | | 599 | 645 |
+--------------------------+----------+----------+----------+---------------+----------+
| After 1 year but within | 408 | 433 | | 330 | 356 |
| 5 years | | | | | |
+--------------------------+----------+----------+----------+---------------+----------+
| | | | | | |
+--------------------------+----------+----------+----------+---------------+----------+
| | 1,278 | 1,339 | | 929 | 1,001 |
+--------------------------+----------+----------+----------+---------------+----------+
| Less : total future | | (61) | | | (72) |
| interest expenses | | | | | |
+--------------------------+----------+----------+----------+---------------+----------+
| | | | | | |
+--------------------------+----------+----------+----------+---------------+----------+
| Present value of lease | | 1,278 | | | 929 |
| obligations | | | | | |
+--------------------------+----------+----------+----------+---------------+----------+
| | | | | | |
+--------------------------+----------+----------+----------+---------------+----------+
It is the Group's policy to lease certain of its motor vehicles and fixtures and
equipment under finance leases. The average lease term is 2 years (2008: 2
years). Interest rate underlying all obligations under finance leases are fixed
at respective contract dates ranging from 2.60% to 6.15% (2008: 2.56% to 4.73%).
21. BANK LOAN
+------------------------------------------+-+-------------+--+-------------+----------+
| | | | | | |
+------------------------------------------+-+-------------+--+-------------+----------+
| | | 2009 | | 2008 | |
+------------------------------------------+-+-------------+--+-------------+----------+
| Group | | US$'000 | | US$'000 | |
+------------------------------------------+-+-------------+--+-------------+----------+
| | | | | | |
+------------------------------------------+-+-------------+--+-------------+----------+
| Analysis of debt maturity: | | | | | |
+------------------------------------------+-+-------------+--+-------------+----------+
| Amounts payable and due within two to | | - | | 1,915 | |
| five years | | | | | |
+------------------------------------------+-+-------------+--+-------------+----------+
| | | | | | |
+------------------------------------------+-+-------------+--+-------------+----------+
The bank loan last year was unsecured, with interest accruing at the fixed rate
of 5.85% per annum. During the year, the Group disposed of its subsidiary
holding this bank loan to a related party as detailed in note 14.
22. LOANS FROM FELLOW INVESTORS IN SUBSIDIARIES
The amount represents advances from MEDCL of approximately US$718,000 (2008:
US$718,000). The amount advanced from MEDCL is unsecured, interest free and is
not repayable within next year. Last year another amount advanced from Walton
Enterprise Limited of approximately US$69,000 was assigned to a related party
this year upon disposal of subsidiaries of the Group as mentioned in note 14.
23. deferred taxation
The components of the Group's deferred tax (assets)/liabilities recognised in
the consolidated balance sheet and the movements during the year are as follows:
+--------------------------------+--------------+----------+-+----------+-+
| | | | | | |
+--------------------------------+--------------+----------+-+----------+-+
| | Accumulated | | | | |
+--------------------------------+--------------+----------+-+----------+-+
| | temporary | | | | |
+--------------------------------+--------------+----------+-+----------+-+
| | difference | | | | |
+--------------------------------+--------------+----------+-+----------+-+
| | on tax | Tax | | | |
+--------------------------------+--------------+----------+-+----------+-+
| | depreciation | losses | | Total | |
+--------------------------------+--------------+----------+-+----------+-+
| | US$'000 | US$'000 | | US$'000 | |
+--------------------------------+--------------+----------+-+----------+-+
| | | | | | |
+--------------------------------+--------------+----------+-+----------+-+
| At 1 January 2008, 31 December | | | | | |
| 2008 | | | | | |
+--------------------------------+--------------+----------+-+----------+-+
| and 1 January 2009 | - | - | | - | |
+--------------------------------+--------------+----------+-+----------+-+
| Charged/(credited) to profit | 149 | | )| 68 | |
| or loss | | (81 | | | |
+--------------------------------+--------------+----------+-+----------+-+
| | | | | | |
+--------------------------------+--------------+----------+-+----------+-+
| At 31 December 2009 | 149 | | )| 68 | |
| | | (81 | | | |
+--------------------------------+--------------+----------+-+----------+-+
No deferred tax is recognised on the unremitted earnings of the overseas
subsidiaries, as no dividend payments to the UK parent company are expected to
be made in the foreseeable future.
At 31 December 2009, the Group has unused tax losses of US$692,000 (2008:
US$665,000) available for offset against future profits. A deferred tax asset
has been recognised in respect of US$492,000 (2008: US$nil) of such losses. No
deferred tax assets has been recognised in respect of the remaining US$200,000
(2008: US$665,000) due to the unpredictability of future profit streams. The
unrecognised tax losses may be carried forward indefinitely.
24. SHARE CAPITAL and capital management
(a) Share capital
+--------------------------+-------+--------+----------+----------------+----------+
| | 2009 | 2008 |
+--------------------------+---------------------------+---------------------------+
| | Number | GBP'000 | Number | GBP'000 |
+--------------------------+----------------+----------+----------------+----------+
| | | | | |
+--------------------------+----------------+----------+----------------+----------+
| Authorised: | | | | |
+--------------------------+----------------+----------+----------------+----------+
| Ordinary shares of | 30,000,000,000 | 150,000 | 30,000,000,000 | 150,000 |
| 0.5p each | | | | |
+--------------------------+----------------+----------+----------------+----------+
| | | | | |
+--------------------------+----------------+----------+----------------+----------+
| | | US$'000 | | US$ '000 |
+--------------------------+----------------+----------+----------------+----------+
| | | | | |
+--------------------------+----------------+----------+----------------+----------+
| Equivalent to: | | 265,395 | | 265,395 |
+--------------------------+----------------+----------+----------------+----------+
| | | | | |
+--------------------------+----------------+----------+----------------+----------+
| | | US$'000 | | US$ '000 |
+----------------------------------+--------+----------+----------------+----------+
| Allotted, called up and | | | | |
| fully paid: | | | | |
+----------------------------------+--------+----------+----------------+----------+
| Ordinary shares of 0.5p | 1,978,895,139 | 14,922 | 1,978,895,139 | 14,922 |
| each | | | | |
+--------------------------+----------------+----------+----------------+----------+
| | | | | | |
+--------------------------+-------+--------+----------+----------------+----------+
(b) Capital management
The Group's main objective when managing capital is to provide returns to
shareholders by ensuring the Group will continue to trade in the foreseeable
future. The Group also aims to maximise its capital structure of debt and
equity so as to minimise its cost of capital.
The Group manages its capital with regard to the risks inherent in the business
and the sector within which it operates by monitoring its gearing ratio on a
regular basis.
The Group considers its capital to include share capital, share premium, merger
reserve, exchange reserve and accumulated losses.
Net debt includes short and long-term borrowings net of cash and cash
equivalents.
+------------------------------------------+-+-------------+--+-------------+----------+
| | | | | | |
+------------------------------------------+-+-------------+--+-------------+----------+
| | | 2009 | | 2008 | |
+------------------------------------------+-+-------------+--+-------------+----------+
| Group | | US$'000 | | US$'000 | |
+------------------------------------------+-+-------------+--+-------------+----------+
| | | | | | |
+------------------------------------------+-+-------------+--+-------------+----------+
| Total debt | | 8,298 | | 8,233 | |
+------------------------------------------+-+-------------+--+-------------+----------+
| Less: Cash and cash equivalents | | (2,165 | )| (780 | ) |
+------------------------------------------+-+-------------+--+-------------+----------+
| | | | | | |
+------------------------------------------+-+-------------+--+-------------+----------+
| Net debt | | 6,133 | | 7,453 | |
+------------------------------------------+-+-------------+--+-------------+----------+
| | | | | | |
+------------------------------------------+-+-------------+--+-------------+----------+
| Total equity | | 36,147 | | 30,009 | |
+------------------------------------------+-+-------------+--+-------------+----------+
| | | | | | |
+------------------------------------------+-+-------------+--+-------------+----------+
| Debt to capital ratio | | 17% | | 25% | |
+------------------------------------------+-+-------------+--+-------------+----------+
| | | | | | |
+------------------------------------------+-+-------------+--+-------------+----------+
The Group does not have any externally imposed capital requirements.
25. FINANCIAL RISK MANAGEMENT AND FAIR VALUES
The principal risks arising from the Group's financial instruments are credit
risk, liquidity risk, foreign currency risk and interest rate risk. The
directors reviews and agrees policies for managing each of these risks and these
are summarised below. These policies have been developed during the current
accounting period as a consequence of the Group's expansion.
(a) Credit risk
Credit risk is the potential financial loss resulting from the failure of a
customer or counterparty in setting their financial and contractual obligations
to the Group, as and when they fall due.
The Group's primary exposure to credit risk arises through its trade
receivables. The management has a credit policy in place and exposure to credit
risk is monitored on an ongoing basis. Other financial assets of the Group with
exposure to credit risk include cash and deposits that are placed with financial
institutions which are regulated.
At the balance sheet date, there was no significant concentration of credit
risk.
(b) Liquidity risk
The Group's policy is to regularly monitor current and expected liquidity
requirements to ensure that it maintains sufficient reserves of cash and readily
realisable marketable securities and adequate committed lines of funding from
major financial institutions to meet its liquidity requirements in the short and
longer term.
The following table details the remaining contractual maturities at the balance
sheet date of the Group's financial liabilities, which are based on contractual
undiscounted cash flows (including interest payments computed using contractual
rates) and the earliest date the Group can be required to pay:
+-------+--------+---------+---------+---------+---------+---------+-+-----+--------+---------+---------+---------+---------+
| | 2009 | | 2008 |
+-------+----------------------------------------------------------+-+------------------------------------------------------+
| | | Contractual undiscounted | | | Contractual undiscounted |
| | | cash outflow | | | cash outflow |
+-------+------------------+---------------------------------------+-+--------------+---------------------------------------+
| | Consolidated | Total | Within | More | More | | Consolidated | Total | Within | More | More |
| | balance | | 1 year | than | than | | balance | | 1 year | than | than |
| | sheet | | or on | 1 | 5 | | sheet | | or on | 1 | 5 |
| | carrying | | demand | year | years | | carrying | | demand | year | years |
| | amount | | | but | | | amount | | | but | |
| | | | | less | | | | | | less | |
| | | | | than | | | | | | than | |
| | | | | 2 | | | | | | 2 | |
| | | | | years | | | | | | years | |
+-------+------------------+---------+---------+---------+---------+-+--------------+---------+---------+---------+---------+
| Group | US$'000 | US$'000 | US$'000 | US$'000 | US$'000 | | US$'000 | US$'000 | US$'000 | US$'000 | US$'000 |
+----------------+---------+---------+---------+---------+---------+-+--------------+---------+---------+---------+---------+
| | | | | | | | | | | | |
+----------------+---------+---------+---------+---------+---------+-+--------------+---------+---------+---------+---------+
| Trade and | | | | | | | | | | | |
| other | | | | | | | | | | | |
+----------------+---------+---------+---------+---------+---------+-+--------------+---------+---------+---------+---------+
| | 5,318 | 5,318 | 5,318 | - | - | | 3,907 | 3,907 | 3,907 | - | - |
| payables | | | | | | | | | | | |
+----------------+---------+---------+---------+---------+---------+-------+--------+---------+---------+---------+---------+
| | | | | | | | | | | | |
+----------------+---------+---------+---------+---------+---------+-------+--------+---------+---------+---------+---------+
| Obligations | | | | | | | | | | | |
| under | | | | | | | | | | | |
+----------------+---------+---------+---------+---------+---------+-------+--------+---------+---------+---------+---------+
| | 1,278 | 1,339 | 906 | 433 | - | | 929 | 1,001 | 645 | 356 | - |
| finance | | | | | | | | | | | |
| lease | | | | | | | | | | | |
+----------------+---------+---------+---------+---------+---------+-------+--------+---------+---------+---------+---------+
| | | | | | | | | | | | |
+----------------+---------+---------+---------+---------+---------+-------+--------+---------+---------+---------+---------+
| Bank loan | - | - | - | - | - | | 1,915 | 1,915 | - | - | 1,915 |
+----------------+---------+---------+---------+---------+---------+-------+--------+---------+---------+---------+---------+
| | | | | | | | | | | | |
+----------------+---------+---------+---------+---------+---------+-------+--------+---------+---------+---------+---------+
| Loans | | | | | | | | | | | |
| from | | | | | | | | | | | |
| fellow | | | | | | | | | | | |
| | | | | | | | | | | | |
| investors | | | | | | | | | | | |
| in | | | | | | | | | | | |
+----------------+---------+---------+---------+---------+---------+-------+--------+---------+---------+---------+---------+
| | 718 | 718 | - | - | 718 | | 787 | 787 | - | - | 787 |
| subsidiaries | | | | | | | | | | | |
+----------------+---------+---------+---------+---------+---------+-------+--------+---------+---------+---------+---------+
| | | | | | | | | | | | |
+----------------+---------+---------+---------+---------+---------+-------+--------+---------+---------+---------+---------+
| | 7,314 | 7,375 | 6,224 | 433 | 718 | | 7,538 | 7,610 | 4,552 | 356 | 2,702 |
+----------------+---------+---------+---------+---------+---------+-------+--------+---------+---------+---------+---------+
| | | | | | | | | | | | |
+----------------+---------+---------+---------+---------+---------+-------+--------+---------+---------+---------+---------+
| | | | | | | | | | | | | | |
+-------+--------+---------+---------+---------+---------+---------+-+-----+--------+---------+---------+---------+---------+
+--------------+----------+---------+---------+---------+---------+--+----------+---------+---------+---------+---------+
| | 2009 | | 2008 |
+--------------+--------------------------------------------------+--+--------------------------------------------------+
| | | Contractual | | | Contractual |
| | | undiscounted cash | | | undiscounted cash |
| | | outflow | | | outflow |
+--------------+----------+---------------------------------------+--+----------+---------------------------------------+
| | Balance | Total | Within | More | More | | Balance | Total | Within | More | More |
| | sheet | | 1 year | than | than | | sheet | | 1 year | than | than |
| | carrying | | or on | 1 | 5 | | carrying | | or on | 1 | 5 |
| | amount | | demand | year | years | | amount | | demand | year | years |
| | | | | but | | | | | | but | |
| | | | | less | | | | | | less | |
| | | | | than | | | | | | than | |
| | | | | 2 | | | | | | 2 | |
| | | | | years | | | | | | years | |
+--------------+----------+---------+---------+---------+---------+--+----------+---------+---------+---------+---------+
| Company | US$'000 | US$'000 | US$'000 | US$'000 | US$'000 | | US$'000 | US$'000 | US$'000 | US$'000 | US$'000 |
+--------------+----------+---------+---------+---------+---------+--+----------+---------+---------+---------+---------+
| | | | | | | | | | | | |
+--------------+----------+---------+---------+---------+---------+--+----------+---------+---------+---------+---------+
| Trade | | | | | | | | | | | |
| and | | | | | | | | | | | |
| other | | | | | | | | | | | |
+--------------+----------+---------+---------+---------+---------+--+----------+---------+---------+---------+---------+
| | 93 | 93 | 93 | - | - | | 31 | 31 | 31 | - | - |
| payables | | | | | | | | | | | |
+--------------+----------+---------+---------+---------+---------+--+----------+---------+---------+---------+---------+
| | | | | | | | | | | | |
+--------------+----------+---------+---------+---------+---------+--+----------+---------+---------+---------+---------+
| Amounts | | | | | | | | | | | |
| due to | | | | | | | | | | | |
+--------------+----------+---------+---------+---------+---------+--+----------+---------+---------+---------+---------+
| | 2,520 | 2,520 | 2,520 | - | - | | 1,916 | 1,916 | 1,916 | - | - |
| subsidiaries | | | | | | | | | | | |
+--------------+----------+---------+---------+---------+---------+--+----------+---------+---------+---------+---------+
| | | | | | | | | | | | |
+--------------+----------+---------+---------+---------+---------+--+----------+---------+---------+---------+---------+
| | 2,613 | 2,613 | 2,613 | - | - | | 1,947 | 1,947 | 1,947 | - | - |
+--------------+----------+---------+---------+---------+---------+--+----------+---------+---------+---------+---------+
| | | | | | | | | | | | |
+--------------+----------+---------+---------+---------+---------+--+----------+---------+---------+---------+---------+
(c) Foreign currency risk
The Group's businesses include revenue and the expenses which are principally
conducted in Chinese Renminbi ("RMB") through its subsidiaries in the PRC.
Foreign currency risk mainly arises from recognised assets and liabilities and
net investments in foreign operations.
The Group did not use any forward contract or currency borrowing to hedge its
exposure to foreign currency risk. However, the directors will monitor the
related foreign currency exposure closely and will consider hedging significant
foreign currency exposures should the need arise in the future.
No entity in the Group has material assets and liabilities denominated in
currency other than the functional currency of that entity, therefore no
material foreign exchange risk arises.
(d) Interest rate risk
Group borrowings are held in local currencies. Current interest-bearing loans
are at fixed rates. The Group's policy for future borrowings will be to take
floating rates unless fixed rate finance is available at particularly attractive
rates.
The Group is exposed to fair value interest rate risk as its loan borrowings and
obligations under finance leases are at a fixed rate. Borrowings from fellow
investors in subsidiaries are on an interest free basis. The Group monitors
closely its interest rate exposure and will consider hedging significant
interest rate exposure should the need arise in the future.
The Company incurs no significant interest rate risk as it does not have any
liability to bank or other borrowings alike.
(i) Interest rate profile
The interest rate risk profile of the Group's financial liabilities for the
years ended 31 December 2009 and 2008 are as follows:
+--------------------------+----------+---------------+---------+----------+----------+
| | | Interest-free | Fixed | Fixed | Fixed |
| | | | rate | rate | rate |
| | | | | weighted | weighted |
| | Total | | | average | average |
| | | | | interest | period |
| | | | | rate at | for |
| | | | | | which |
| | | | | | rate is |
| | | | | | fixed |
+--------------------------+----------+---------------+---------+----------+----------+
| | US$'000 | US$'000 | US$'000 | % | Years |
+--------------------------+----------+---------------+---------+----------+----------+
| 2009 | | | | | |
+--------------------------+----------+---------------+---------+----------+----------+
| Obligations under | | | | | |
+--------------------------+----------+---------------+---------+----------+----------+
| finance leases | 1,278 | 16 | 1,262 | 4 | 2 |
+--------------------------+----------+---------------+---------+----------+----------+
| Loans from fellow | | | | | |
+--------------------------+----------+---------------+---------+----------+----------+
| investors in | | | | | |
+--------------------------+----------+---------------+---------+----------+----------+
| subsidiaries | 718 | 718 | | - | N/A |
| | | | - | | |
+--------------------------+----------+---------------+---------+----------+----------+
| | | | | | |
+--------------------------+----------+---------------+---------+----------+----------+
| | 1,996 | 734 | 1,262 | | |
+--------------------------+----------+---------------+---------+----------+----------+
| | | | | | |
+--------------------------+----------+---------------+---------+----------+----------+
| 2008 | | | | | |
+--------------------------+----------+---------------+---------+----------+----------+
| Bank loan | 1,915 | - | 1,915 | 5.85 | 1 |
+--------------------------+----------+---------------+---------+----------+----------+
| Obligations under | | | | | |
+--------------------------+----------+---------------+---------+----------+----------+
| finance leases | 929 | 8 | 921 | 4 | 2 |
+--------------------------+----------+---------------+---------+----------+----------+
| Loans from fellow | | | | | |
+--------------------------+----------+---------------+---------+----------+----------+
| investors in | | | | | |
+--------------------------+----------+---------------+---------+----------+----------+
| subsidiaries | 787 | 787 | | - | N/A |
| | | | - | | |
+--------------------------+----------+---------------+---------+----------+----------+
| | | | | | |
+--------------------------+----------+---------------+---------+----------+----------+
| | 3,631 | 795 | 2,836 | | |
+--------------------------+----------+---------------+---------+----------+----------+
| | | | | | |
+--------------------------+----------+---------------+---------+----------+----------+
(ii) Sensitivity analysis
At 31 December 2009, it is estimated that a general increase/decrease of 100
basis points in interest rates, with all other variables held constant, would
decrease/increase the Group's profit and equity by approximately US$13,000
(2008: US$28,000).
(e) Categories of financial instruments
+--------------------------+---------+---------+----------+---------+---------+
| | Group | | Company |
+--------------------------+-------------------+----------+-------------------+
| | 2009 | 2008 | | 2009 | 2008 |
+--------------------------+---------+---------+----------+---------+---------+
| | US$'000 | US$'000 | | US$'000 | US$'000 |
+--------------------------+---------+---------+----------+---------+---------+
| Financial assets | | | | | |
+--------------------------+---------+---------+----------+---------+---------+
| Available-for-sale | - | 12 | | - | - |
| investments | | | | | |
+--------------------------+---------+---------+----------+---------+---------+
| Loan and receivable | | 7,518 | | | 120 |
| -Trade receivables and | 7,928 | | | 295 | |
| other | | | | | |
| receivables(exclude | | | | | |
| prepyments) | | | | | |
+--------------------------+---------+---------+----------+---------+---------+
| -Cash and cash | 2,165 | 780 | | 11 | 2 |
| equivalents | | | | | |
+--------------------------+---------+---------+----------+---------+---------+
| | | | | | |
+--------------------------+---------+---------+----------+---------+---------+
| | 10,093 | 8,310 | | 306 | 122 |
+--------------------------+---------+---------+----------+---------+---------+
| | | | | | |
+--------------------------+---------+---------+----------+---------+---------+
| Financial liabilities | | | | | |
+--------------------------+---------+---------+----------+---------+---------+
| Financial liabilities | 5,318 | 3,907 | | 93 | 31 |
| at amortised cost | | | | | |
| -Trade and other | | | | | |
| payables | | | | | |
+--------------------------+---------+---------+----------+---------+---------+
| -Amounts due to | - | - | | 2,520 | 1,916 |
| subsidiaries | | | | | |
+--------------------------+---------+---------+----------+---------+---------+
| -Borrowings | 1996 | 3,631 | | - | - |
+--------------------------+---------+---------+----------+---------+---------+
| | | | | | |
+--------------------------+---------+---------+----------+---------+---------+
| | 7,314 | 7,538 | | 2,613 | 1,947 |
+--------------------------+---------+---------+----------+---------+---------+
| | | | | | |
+--------------------------+---------+---------+----------+---------+---------+
(f) Fair values
The carrying amounts of the Group's financial instruments carried at cost or
amortised cost are not materially different from their fair values as at 31
December 2009 and 2008.
26. RELATED PARTY TRANSACTIONS
(a) Transactions with key management personnel
All members of key management personnel are the directors of the Company, and
their remuneration is disclosed in note 8.
(b) Transactions with other related parties
Group
The Group had the following material transactions which were carried out on an
arm's length basis with related parties during the year:
+--------------------+-----+----------------------------+----------+---------+
| Notes | | Nature | 2009 | 2008 |
+--------------------+-----+----------------------------+----------+---------+
| | | | US$'000 | US$'000 |
+--------------------+-----+----------------------------+----------+---------+
| | | | | |
+--------------------+-----+----------------------------+----------+---------+
| (i) | | Agency charge paid by the | 66 | 77 |
| | | Group | | |
+--------------------+-----+----------------------------+----------+---------+
| | | Barging services cost paid | 3,137 | - |
| | | by the Group | | |
+--------------------+-----+----------------------------+----------+---------+
| | | Barging services income | | |
| | | received | | |
+--------------------+-----+----------------------------+----------+---------+
| | | by the Group | 3,722 | - |
+--------------------+-----+----------------------------+----------+---------+
| | | Disposals of Property, | 323 | - |
| | | plant and equipment | | |
+--------------------+-----+----------------------------+----------+---------+
| (ii) | | Gain on disposal of | 6,598 | |
| | | subsidiaries | | - |
+--------------------+-----+----------------------------+----------+---------+
Notes:
(i) Service provided by companies with significant influence. These ceased
to be related parties of the Group on 18 September 2009.
(ii) Details of the disposal of subsidiaries to WFL during the year are set
out in note 14.
Balances with related parties are disclosed in the balance sheet and in notes 17
and 19.
Company
The company had the following material transactions which were carried out on an
arms length basis with related parties during the year:
+----------------------------------+------------+------------+
| | 2009 | 2008 |
| | US$'000 | US$'000 |
+----------------------------------+------------+------------+
| Management fee income received | 157 | 154 |
| form a subsidiary | | |
+----------------------------------+------------+------------+
| Management fee paind to a | 78 | 72 |
| subsidiary | | |
+----------------------------------+------------+------------+
27. OPERATING LEASE COMMITMENTS
At 31 December 2009, the Group's total future minimum lease payments under
non-cancellable operating leases are payable as follows:
+------------------------------------------+-+-------------+--+-------------+----------+
| | | | | | |
+------------------------------------------+-+-------------+--+-------------+----------+
| | | 2009 | | 2008 | |
+------------------------------------------+-+-------------+--+-------------+----------+
| | | US$'000 | | US$'000 | |
+------------------------------------------+-+-------------+--+-------------+----------+
| | | | | | |
+------------------------------------------+-+-------------+--+-------------+----------+
| Leases which expire: | | | | | |
+------------------------------------------+-+-------------+--+-------------+----------+
| - in the next year | | 181 | | 354 | |
+------------------------------------------+-+-------------+--+-------------+----------+
| - in the second to fifth years | | 782 | | 1,089 | |
+------------------------------------------+-+-------------+--+-------------+----------+
| | | | | | |
+------------------------------------------+-+-------------+--+-------------+----------+
| | | 963 | | 1,443 | |
+------------------------------------------+-+-------------+--+-------------+----------+
| | | | | | |
+------------------------------------------+-+-------------+--+-------------+----------+
The Group is the lessee in respect of a number of properties held under
operating leases. The leases typically run for an initial period of 1 to 5
years, at the end of which period all terms are renegotiated. None of the
leases includes contingent rentals.
28. CAPITAL COMMITMENTS
The Group's capital commitments outstanding at 31 December 2009 in respect of
the acquisition of property, plant and equipment in the financial statements are
as follows:
+------------------------------------------+-+-------------+--+-------------+----------+
| | | | | | |
+------------------------------------------+-+-------------+--+-------------+----------+
| | | 2009 | | 2008 | |
+------------------------------------------+-+-------------+--+-------------+----------+
| | | US$'000 | | US$'000 | |
+------------------------------------------+-+-------------+--+-------------+----------+
| | | | | | |
+------------------------------------------+-+-------------+--+-------------+----------+
| Contracted, but not provided for | | 803 | | 740 | |
+------------------------------------------+-+-------------+--+-------------+----------+
| | | | | | |
+------------------------------------------+-+-------------+--+-------------+----------+
29. CONTINGENT LIABILITIES
On 23 July 1998, a subsidiary of the Company, KCT, gave a guarantee for RMB50
million (equivalent to approximately US$5.9 million) in favour of the Huangpu
Branch of the Industry and Commercial Bank of China for banking facilities
granted to HEDCL, a fellow investor in KCT and its ultimate controlling party,
Guangzhou Huangpu Foreign Trade Group Company Limited and secured over their
equity interests in KCT. HEDCL was unable to repay the loans due to the bank.
The bank took action against KCT to enforce the guarantee for the outstanding
loan.
On 9 November 1999, KCT gave a guarantee for RMB18 million (equivalent to
approximately US$2.1 million) in favour of Nangang Rural Credit Co-operation
Bank for banking facilities granted to MEDCL, a fellow investor in KCT, secured
over its equity interests in KCT. MEDCL was unable to repay the outstanding
loan.
On 27 September 2001, the Guangzhou Law Court delivered an order and notice that
the guarantees above were invalid and MEDCL's equity interest in KCT was frozen.
Based on legal advice, the equity interests had no material impact on the
operations of KCT and the directors consider that no provision is required.
KCT maintains that the guarantees given were invalid on the following grounds:
(i) such guarantees did not have approval from the board of directors of
KCT;
(ii) in accordance with the law of the People's Republic of China, the
board of directors and the management of KCT cannot give KCT's properties for
guarantees to its shareholder; and
(iii) the controlling party of HEDCL has not held a valid business licence
since 1998 and ceased operations in 1999. In accordance with the banking
regulations of the People's Republic of China, the bank cannot lend money to
enterprises which do not have a valid business licence.
The legal proceedings are finalised on Nov 2009. The jurisdiction said that the
loan agreement was void because it was illegal and accordingly, the guarantees
contract were also invalid.
Furthermore, KLHL, the Company's parent company, has indemnified the Group
against any loss KCT will suffer should the guarantees be enforceable.
Accordingly, the directors are of the opinion that no provision should be made
in the financial statements for any possible claim from the bank in respect of
the litigation.
Save as disclosed above, the Group does not have any material contingent
liabilities as at balance sheet date.
30. ULTIMATE CONTROLLING PARTY
The directors consider that Chin Dynasty Foundation Limited ("CDFL"), a company
incorporated in the British Virgin Islands is the ultimate holding company.
CDFL is controlled by the Chin Dynasty Fund. No group financial statements for
CDFL are published.
The Chin Dynasty Fund is a discretionary trust where Mr. Qin Shun Chao is the
settler. Members of Mr. Qin's family are the potential beneficiaries of the
trust.
The Company's immediate parent company is KLHL, a company incorporated in the
British Virgin Islands.
This information is provided by RNS
The company news service from the London Stock Exchange
END
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