RNS Number:4568K
China Western Investments PLC
21 December 2007
China Western Investments PLC
INTERIM ACCOUNTS
for the six months ended
30 September 2007
The report for the period to 30 September 2007 has been prepared, for the first
time, under International Financial Reporting Standards (IFRS). Where necessary
the comparatives have been reclassified or extended from the previous statements
to take into account presentational changes.
The principle change is the removal of negative goodwill from the balance sheet
and crediting the income statement. The prior year retained earnings has been
restated with a credit of �1.584 million at 1st April 2006, the date of
transition to IFRS in respect of the negative goodwill.
A charge of �5,247million has been made in respect of deferred tax on the
investment properties including the property under construction. The loss for
the year ended 31 March 2007 has been restated by bringing to account a deferred
tax charge of �0.353million in respect of the gain on revaluation of investment
properties of �1.177million.
The Group has continued to reduce the trading losses with all investment now
centred in China.
The loss for the six months to September 2007 was �0.489 million compared with
�0.955 million in the same period last year. Income from the China operations
continues to improve and it is hoped that both LITBC and Tien Shui hospital will
break even before interest costs in the immediate future. Future profitability
depends upon investment to develop the property in Lanzhou and the Board is
keenly aware of the need for an injection of investments funds
The sale of Oakridge Ventures, which occurred in mid-late 2006, enabled funds to
be used to improve working capital although the Group relies on the shareholder
loans as an important source of investment funds. Discussions have been
maintained with various investors to identify the funds needed to develop the
Western China operations and the Board will continue to monitor all sources of
capital to enhance the investment potential.
Michael A Shields
Chairman
19th December 2007.
Enquiries to
Harry Jeffs China Western Investments PLC 01539 723 233
Alex Borrelli Shore Capital & Corporate Limited 0207 408 4090
CONSOLIDATED INCOME STATEMENT
30 September 2007
Notes Period ended Period ended Year ended
30 September 30 September 31 March
2007 2006 2007
(Unaudited) (Unaudited) (Audited)
(Restated) (Restated)
�'000 �'000 �'000
Revenue
Continuing operations 351 270 458
Discontinued operations - 184 182
351 454 640
Cost of sales
Continuing operations (71) (151) (240)
Discontinued operations - (22) (54)
Gross profit
Continuing operations 280 119 218
Discontinued operations - 162 128
280 281 346
Administrative expenses
Continuing operations (411) (301) (452)
Discontinued operations - (3) 187
(411) (304) (265)
Finance income
Continuing operations (341) (518) (508)
Discontinued operations - (396) (515)
Loss / profit before taxation
Continuing operations (472) (700) (742)
Discontinued operations - (237) (200)
(472) (937) (942)
Income tax expense (19) (20) (38)
(Loss) profit from continuing operations (491) (720) (780)
(Loss) profit from discontinued operations - (237) (200)
Attributable to parent company's equity (489) (955) (980)
shareholders
Attributable to minority interests (2) (2) (2)
(Loss) for the financial period (491) (957) (982)
Earnings per share (pence) 3
Total activities (0.07) (0.13) (0.13)
Continuing activities (0.10) (0.11)
Statement of recognised Income and expense
for the period ended 30th September 2007
Notes Period ended Period ended Year ended
30 September 30 September 31 March
2007 2006 2007
(Unaudited) (Unaudited) (Audited)
(Restated) (Restated)
�'000 �'000 �'000
Loss for the financial period (491) (957) (982)
Exchange differences on translating foreign operations 341 (1,175) (1,723)
Valuation gain on investment properties - - 1,177
Deferred tax charge on valuation gain - - (353)
Change in accounting policy to comply with IAS 38 - 1,584 1,584
Change in accounting policy to comply with IAS 12 (5,247) (5,247)
Total recognised income and expense in the period (150) (5,795) (5,544)
CONSOLIDATED BALANCE SHEET
30 September 2007
Notes 30 September 30 September 31 March
2007 2006 2007
(Unaudited) (Unaudited) (Audited)
(Restated) (Restated)
�'000 �'000 �'000
ASSETS
Non-Current Assets
Investment properties 29,308 28,891 29,117
Property, plant and equipment 636 635 638
29,944 29,526 29,755
Current assets
Trade and other receivables 154 247 220
Property under construction 18,760 18,669 18,752
Inventories 18 21 17
Cash and cash equivalents 5 68 727 47
19,000 19,664 19,036
TOTAL ASSETS 48,944 49,190 48,791
Equity attributable to shareholders of
the parent
Share capital 7,283 7,183 7,283
Share premium 32,919 32,919 32,919
Other reserves 19,442 18,265 19,442
Retained earnings (30,498) (29,422) (30,348)
Minority interest 214 199 212
Total equity 4 29,360 29,144 29,508
Non Current liabilities
Financial liabilities 270 270 270
Long term borrowings 34 285 68
Deferred tax liability 5,600 5,247 5,600
Total non current liabilities 5,904 5,802 5,938
Current liabilities
Trade and other payables 9,746 9,899 9,292
Short term borrowings 3,758 4,191 3,890
Current tax payable 176 154 163
Total current liabilities 13,680 14,244 13,345
Total liabilities 19,584 20,046 19,283
TOTAL EQUITY and LIABILITIES 48,944 49,190 48,791
CONSOLIDATED CASH FLOW
For the period ended 30 September 2007
Notes Period ended Period ended Year ended
30 September 30 September 31 March
2007 2006 2007
(Unaudited) (Unaudited) (Audited)
(Restated) (Restated)
�'000 �'000 �'000
Cash flows from operating activities
Net loss before tax (472) (937) (942)
Adjustments for
Depreciation 2 10 104
Commissions paid by shares - - 100
Exchange gain / (loss) 341 (1,186) (1,723)
Surplus on revaluation - - 1,177
Increase/decrease in Inventories (9) 62 (17)
Increase/decrease in trade and other 66 (89) (62)
receivables
Increase/decrease in trade and other 421 1,981 1,157
payables
Cash generated from operations 349 (159) (206)
Income taxes paid (4) (16) (25)
Net cash from operating activities 345 (175) (231)
Cash flows from investing activities
Purchase of property, plant and equipment (191) (438) (522)
Proceeds from sale of property, plant and
equipment - 11,598 11,359
Net cash used in investing activities (191) 11,160 10,837
Cash flows from financing activities
Repayment of loans (132) (10,373) (10,674)
Capital element of hire purchase (1) - -
Net cash used in financing activities (133) (10,373) (10,674)
Net increase/decrease in cash 21 612 (68)
Cash and cash equivalents at beginning of
period 47 115 115
Cash and cash equivalents at end of period 68 727 47
NOTES TO THE INTERIM ACCOUNTS
For the period ended 30 September 2007
1 BASIS OF PREPARATION
This interim report, which is unaudited, was approved by the directors on 19th
December 2007 and has been prepared under International Financial Reporting
Standards (IFRS) for the first time. The accounting policies are consistent
with those used in the Annual Financial Statements, except where noted below.
The presentation of the Interim Financial Statements is consistent with the
Annual Financial Statements, except where noted below. Where necessary, the
comparatives have been reclassified or extended from the previously reported
Interim Financial Statements to take into account any presentational changes
made in the Annual Financial Statements or in these Interim Financial
Statements.
The principle change in the basis of accounting has been the removal of the
negative Goodwill, previously carried on the consolidated balance sheet. IAS 38
does not permit negative goodwill and states that this should be credited to the
income statement on transition to IFRS. The prior year profit and loss account
has therefore been restated, with a credit of �1,584,000 at 1 April 2006, the
date of transition to IFRS.
The prior year profit and loss account has also been restated for the �5.247m
deferred tax charge on the difference between cost and carrying value of the
investment properties including property under construction. The consequent
decrease in the opening shareholders' equity as at 1 April 2006 is shown in note
4. The statutory accounts for the year ended 31 March 2007 upon which the
auditors issued an unqualified report have been filed with the Registrar of
Companies.
GOING CONCERN
United Kingdom law requires the Company's directors to consider
whether it is appropriate to prepare financial statements on the basis that the
Group is a going concern. In considering this matter the directors have
reviewed the Groups' budget and its plan for 2007 and 2008. This involved
consideration of the cashflow implications of the budget and the plan. The
directors see no reason why the Group and Company should not continue in
operational existence for the foreseeable future, given the subordinated loan
and shareholder loans secured. For this reason they have adopted the going
concern basis in preparing the Group's financial statements.
2 TAXATION
Taxation for the period ended 30 September 2007 is based on the effective rate
of tax which is estimated to apply to the year ended 31 March 2008.
3 EARNINGS PER SHARE
The calculation of total earnings per ordinary share is based on the loss after
taxation of �0.491m (31 March 2007: �0.980m (Restated)) and on the weighted
average number of ordinary shares in issue during the period of 728,375,495 (31
March 2007: 723,375,495).
The calculation of earnings per ordinary share on continuing activities, is
based on the restated loss after taxation of �0.780m for the year ended 31 March
2007 (30 September 2006: �0.720m) and on the weighted average number of ordinary
shares in issue during the period of 723,375,495 (30 September 2006:
718,375,495).
All activities in the period to 30 September 2007 were classed as continuing.
As the Company has made a loss for the period ended 30 September 2007 no option
is potentially dilutive and hence both the basic and diluted loss per share are
the same.
4 STATEMENT OF CHANGES IN EQUITY 30 September 30 September 31 March
2007 2006 2007
(Unaudited) (Unaudited) (Audited)
(Restated) (Restated)
�'000 �'000 �'000
Share capital
Opening balance 7,283 7,183 7,183
Share issue - - 100
Closing balance 7,283 7,183 7,283
Share premium: 32,919 32,919 32,919
Revaluation reserve 18,262 18,262 18,262
Investment revaluation reserve
Opening balance 1,177 - -
Valuation gain on investment - 1,177 1,177
properties
Net income recognised directly in - 1,177 1,177
equity
Closing balance 1,177 1,177 1,177
Merger reserve 3 3 3
Retained earnings
Opening balance (30,348) (23,627) (23,627)
Changes in accounting policy to - 1,584 1,584
comply with IAS 38
Changes in accounting policy to - (5,247) (5,247)
comply with IAS 12
Restated balance (30,348) (27,290) (27,290)
Exchange differences on translating
foreign operations 341 (1,177) (1,723)
Deferred tax charge on valuation - - (353)
gain
Net income recognised directly in 341 (1,177) (2,076)
equity
Profit (Loss) for the period (491) (955) (982)
Total recognised income and expense (150) (2,132) (3,058)
Closing balance (30,498) (29,422) (30,348)
Minority interests
Opening balance 212 210 210
Profit (Loss) for the period (2) (11) 2
Closing balance 210 199 212
4 STATEMENT OF CHANGES IN EQUITY 30 September 30 September 31 March
CONTINUED 2007 2006 2007
(Unaudited) (Unaudited) (Audited)
(Restated) (Restated)
�'000 �'000 �'000
Total Equity
Opening balance 29,508 34,950 34,950
Changes in accounting policy to comply with IAS 38 - 1,584 1,584
Changes in accounting policy to comply with IAS 12 - (5,247) (5,247)
Restated balances 29,508 31,287 31,287
Exchange differences on translating foreign operations 341 (1,177) (1,723)
Valuation gain on investment property - - 1,177
Deferred tax charge on valuation gain - - (353)
Net income recognised directly in equity 341 (1,177) (899)
Profit (Loss) for the period (489) (966) (980)
Total recognised income and expense (148) (2,143) (1,879)
Share issue - - 100
Closing balances 29,360 29,144 29,508
5 IMPACT OF CHANGES IN ACCOUNTING PRINCIPLES
In adopting IFRS as its accounting policies, China Western Investment plc has
prepared these financial statements as if IFRS has been historically applied.
In each case, balance sheet items are restated by adjusting the opening value at
1 April 2006 and taking the difference in the corresponding item to equity.
Consolidated equity as at 1 April 2006, 30 September 2006 and 31 March 2007
changed as follows as a result of adopting IFRS, which is shown in the statement
of changes in equity (Note 4).
Profit after tax changed as follows as a result of adopting IFRS:
31/03/2007 30/09/2006
�000 �000
Consolidated loss for the period as stated in the Annual Report prepared
in accordance with United Kingdom GAAP (980) (937)
Adjusted (restated) items: - -
Deferred tax - -
Consolidated loss (restated) in accordance with IFRS (980) (937)
Copies of the interim accounts will be sent to the AIM team and shareholders
shortly and will be available on the company's website www.chwi.co.uk
This information is provided by RNS
The company news service from the London Stock Exchange
END
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