TIDMCWO
RNS Number : 6824S
China Wonder Limited
21 May 2009
CHINA WONDER LIMITED
("China Wonder" or the "Company")
Results for the twelve months ended 31 December 2008
CHAIRMAN'S STATEMENT
On behalf of the board of China Wonder and it subsidiaries (the "Group"), I am
pleased to present the Group's Report and Financial Statements for the year
ended 31 December 2008.
For the year ended 31 December 2008 the Group recorded a profit before tax of
?128,667 (2007:?306,951) on sales revenue of ?2,611,329 (2007:?2,336,967). Basic
earnings per ordinary share amounted to 0.95p (2007: 1.65p). At the year end,
Group cash and cash equivalents amounted to ?334,666 (2007:?609,391) and
borrowings amounted to?150,394 (2007:?138,172).
The slowdown in the world economy had an extremely adverse affect on China
Wonder in the second half of the year, resulting in the Group's order
book suffering a substantial decline. Both Wonder Packaging Limited ("Wonder
Packaging") and Wonder Equipment Limited ("Wonder Equipment") struggled to
gain new business during this period. Despite prompt actions taken to reduce
costs, the Group was not able to achieve profitability in the second half of the
year.
Since the year end, there has been a significant improvement in trading. Wonder
Packaging has a solid order book through to the end of June 2009, with one
customer placing orders for three new production lines for delivery before the
end of June. The Board remains hopeful that this improvement will continue.
Your Board continues to explore ways of building China Wonder and has looked at
a number of businesses in the UK with a view to transferring their production to
China. The Group remains focused on building the business both organically and
through diversification.
I would like to take this opportunity to thank all our staff for their hard work
during what has been a difficult period. Meanwhile I would like to thank Mr.
Dellar, former Chairman, and Mr. Zhao, former CEO, for their work in starting
and growing China Wonder.
The Board remains confident that with a recovery in the general Chinese economy,
the Group can once again enjoy a sustained period of growth.
Mark E Chapman
Chairman
For more information please contact:
+----------------------------------+------------------------+
| Mark E Chapman, China Wonder | 01483 892 130 / 07918 |
| Limited | 733111 |
+----------------------------------+------------------------+
| Daniel Bate, WH Ireland Limited | 0161 832 2174 |
+----------------------------------+------------------------+
Consolidated Income Statement
Year ended 31 December 2008
+----+--+--+--------+--------+-------------+------+--+--+--+-------------+------+----------------------------------------------------------+
| | | | | | | | | | | | | |
+----+--+--+--------+--------+-------------+------+--+--+--+-------------+------+----------------------------------------------------------+
| | | | | | | | | | | 2008 | | 2007 |
+----+--+--+--------+--------+-------------+------+--+--+--+-------------+------+----------------------------------------------------------+
| | | | | | | Note | | | | GBP | | GBP |
+----+--+--+--------+--------+-------------+------+--+--+--+-------------+------+----------------------------------------------------------+
| | | | | | | | | | | | | |
+----+--+--+--------+--------+-------------+------+--+--+--+-------------+------+----------------------------------------------------------+
| REVENUE | | | 3 | | | | 2,611,329 | | 2,336,967 |
+-------------------+--------+-------------+------+--+--+--+-------------+------+----------------------------------------------------------+
| Cost of sales | | | | | | | (1,542,349) | | (1,496,917) |
+-------------------+--------+-------------+------+--+--+--+-------------+------+----------------------------------------------------------+
| Tax of sales | | | | | | | (901) | | - |
+-------------------+--------+-------------+------+--+--+--+-------------+------+----------------------------------------------------------+
| GROSS PROFIT | | | | | | | 1,068,079 | | 840,050 |
+-------------------+--------+-------------+------+--+--+--+-------------+------+----------------------------------------------------------+
| OTHER OPERATING INCOME | 3 | | | | 5,359 | | 10,718 |
+------------------------------------------+------+--+--+--+-------------+------+----------------------------------------------------------+
| OPERATING EXPENSES | | | | | | | | |
+----------------------------+-------------+------+--+--+--+-------------+------+----------------------------------------------------------+
| Distribution expenses | | | | | | (196,297) | | (152,818) |
+----------------------------+-------------+------+--+--+--+-------------+------+----------------------------------------------------------+
| Administrative expenses | | | | | | (831,505) | | (385,720) |
+----------------------------+-------------+------+--+--+--+-------------+------+----------------------------------------------------------+
| | | | | | | | | | | (1,027,802) | | (538,538) |
+----+--+--+--------+--------+-------------+------+--+--+--+-------------+------+----------------------------------------------------------+
| PROFIT FROM OPERATIONS | | | | | 45,636 | | 312,230 |
+------------------------------------------+------+--+--+--+-------------+------+----------------------------------------------------------+
| Income from subsidies | | 3 | | | | 94,423 | | |
| | | | | | | | | - |
+----------------------------+-------------+------+--+--+--+-------------+------+----------------------------------------------------------+
| Finance income | | | 3 | | | | 3,510 | | 3,336 |
+-------------------+--------+-------------+------+--+--+--+-------------+------+----------------------------------------------------------+
| Finance costs | | | 7 | | | | (14,902) | | (8,615) |
+-------------------+--------+-------------+------+--+--+--+-------------+------+----------------------------------------------------------+
| PROFIT BEFORE TAX | | | | | | 128,667 | | 306,951 |
+----------------------------+-------------+------+--+--+--+-------------+------+----------------------------------------------------------+
| TAXATION | | | 8 | | | | 45,365 | | (40,579) |
+-------------------+--------+-------------+------+--+--+--+-------------+------+----------------------------------------------------------+
| Minority shareholder's | | | | | | (2,658) | | |
| profit | | | | | | | | - |
+----------------------------+-------------+------+--+--+--+-------------+------+----------------------------------------------------------+
| PROFIT FOR THE YEAR ATTRIBUTABLE | | | | | | | |
+------------------------------------------+------+--+--+--+-------------+------+----------------------------------------------------------+
| | TO EQUITY HOLDERS OF THE PARENT | 22 | | | | 171,374 | | 266,372 |
+----+-------------------------------------+------+--+--+--+-------------+------+----------------------------------------------------------+
| | | | | | | | | | | | | |
+----+--+--+--------+--------+-------------+------+--+--+--+-------------+------+----------------------------------------------------------+
| EARNINGS PER SHARE | | 9 | | | | | | |
+----------------------------+-------------+------+--+--+--+-------------+------+----------------------------------------------------------+
| Basic | | | | | | | | | 0.95 p | | 1.65 p |
+-------+--+--------+--------+-------------+------+--+--+--+-------------+------+----------------------------------------------------------+
| Diluted | | | | | | | | 0.95 p | | 1.65 p |
+----------+--------+--------+-------------+------+--+--+--+-------------+------+----------------------------------------------------------+
| | | | | | | | | | | | | |
+----+--+--+--------+--------+-------------+------+--+--+--+-------------+------+----------------------------------------------------------+
| All amounts relate to continuing operations. |
+----+--+--+--------+--------+-------------+------+--+--+--+-------------+------+----------------------------------------------------------+
Consolidated Balance Sheet
At 31 December 2008
+----+--+--+--------+--------+---------+----+-------------+--+-------------+----+--+----------------------------------------+--+--+---+----------+--+
| | | | | | | | 2008 | | | | 2007 |
+----+--+--+--------+--------+---------+----+------------------------------+----+-------------------------------------------+-----+--------------+
| | | | | | Note | | GBP | | GBP | | GBP | | GBP |
+----+--+--+--------+--------+---------+----+-------------+--+-------------+-------+-------------------------------------------+------+-------------+
| ASSETS | | | | | | | | | | | |
+----------+--------+--------+---------+----+-------------+--+-------------+-------+-------------------------------------------+------+-------------+
| Non-current assets | | | | | | | | | |
+----------------------------+---------+----+-------------+--+-------------+-------+-------------------------------------------+------+-------------+
| Property, plant and | 13 | | 999,786 | | | | 695,756 | | |
| equipment | | | | | | | | | |
+----------------------------+---------+----+-------------+--+-------------+-------+-------------------------------------------+------+-------------+
| Long term prepaid | | | 6,415 | | | | | | |
| expenses | | | | | | | - | | |
+----------------------------+---------+----+-------------+--+-------------+-------+-------------------------------------------+------+-------------+
| Intangible | | 14 | | 1,449,153 | | | | 1,422,375 | | |
| assets | | | | | | | | | | |
+-------------------+--------+---------+----+-------------+--+-------------+-------+-------------------------------------------+------+-------------+
| Deferred tax | | 8 | | 65,547 | | | | 13,823 | | |
| asset | | | | | | | | | | |
+-------------------+--------+---------+----+-------------+--+-------------+-------+-------------------------------------------+------+-------------+
| | | | | | | | | | | | | | |
+----+--+--+--------+--------+---------+----+-------------+--+-------------+-------+-------------------------------------------+------+-------------+
| | | | | | | | | | 2,520,901 | | | | 2,131,954 |
+----+--+--+--------+--------+---------+----+-------------+--+-------------+-------+-------------------------------------------+------+-------------+
| Current assets | | | | | | | | | | |
+-------------------+--------+---------+----+-------------+--+-------------+-------+-------------------------------------------+------+-------------+
| Inventories | | 15 | | 1,642,290 | | | | 684,062 | | |
+-------------------+--------+---------+----+-------------+--+-------------+-------+-------------------------------------------+------+-------------+
| Trade and other | 16 | | 1,676,716 | | | | 991,519 | | |
| receivables | | | | | | | | | |
+----------------------------+---------+----+-------------+--+-------------+-------+-------------------------------------------+------+-------------+
| Tax assets | | | | 29,854 | | | | - | | |
+-------------------+--------+---------+----+-------------+--+-------------+-------+-------------------------------------------+------+-------------+
| Cash and cash equivalents | | | 334,666 | | | | 609,391 | | |
+----------------------------+---------+----+-------------+--+-------------+-------+-------------------------------------------+------+-------------+
| | | | | | | | | | | | | | |
+----+--+--+--------+--------+---------+----+-------------+--+-------------+-------+-------------------------------------------+------+-------------+
| | | | | | | | | | 3,683,526 | | | | 2,284,972 |
+----+--+--+--------+--------+---------+----+-------------+--+-------------+-------+-------------------------------------------+------+-------------+
| TOTAL ASSETS | | | | | | 6,204,427 | | | | 4,416,926 |
+-------------------+--------+---------+----+-------------+--+-------------+-------+-------------------------------------------+------+-------------+
| LIABILITIES | | | | | | | | | | |
+-------------------+--------+---------+----+-------------+--+-------------+-------+-------------------------------------------+------+-------------+
| Current | | | | | | | | | | |
| liabilities | | | | | | | | | | |
+-------------------+--------+---------+----+-------------+--+-------------+-------+-------------------------------------------+------+-------------+
| Short-term loan | | 17 | | (150,394) | | | | (69,086) | | |
+-------------------+--------+---------+----+-------------+--+-------------+-------+-------------------------------------------+------+-------------+
| Trade and other payables | 18 | | (2,122,771) | | | | (1,074,389) | | |
+----------------------------+---------+----+-------------+--+-------------+-------+-------------------------------------------+------+-------------+
| Tax liabilities | | | | - | | | | (55,789) | | |
+-------------------+--------+---------+----+-------------+--+-------------+-------+-------------------------------------------+------+-------------+
| | | | | | | | | | | | | | |
+----+--+--+--------+--------+---------+----+-------------+--+-------------+-------+-------------------------------------------+------+-------------+
| | | | | | | | | | (2,273,165) | | | | (1,199,264) |
+----+--+--+--------+--------+---------+----+-------------+--+-------------+-------+-------------------------------------------+------+-------------+
| | | | | | | | | | | | | | |
+----+--+--+--------+--------+---------+----+-------------+--+-------------+-------+-------------------------------------------+------+-------------+
| TOTAL ASSETS LESS CURRENT LIABILITIES | | 3,931,262 | | | | 3,217,662 |
+---------------------------------------------------------+--+-------------+----+-------------------------------------------+-----+--------------+
| | | | | | | | | | | | | | |
+----+--+--+--------+--------+---------+----+-------------+--+-------------+-------+-------------------------------------------+------+-------------+
| LONG TERM LOAN | 19 | | | | - | | | | (69,086) |
+----------------------------+---------+----+-------------+--+-------------+-------+-------------------------------------------+------+-------------+
| | | | | | | | | | | | | | |
+----+--+--+--------+--------+---------+----+-------------+--+-------------+-------+-------------------------------------------+------+-------------+
| NET ASSETS | | | | | | 3,931,262 | | | | 3,148,576 |
+-------------------+--------+---------+----+-------------+--+-------------+-------+-------------------------------------------+------+-------------+
| | | | | | | | | | | | | | |
+----+--+--+--------+--------+---------+----+-------------+--+-------------+-------+-------------------------------------------+------+-------------+
| EQUITY ATTRIBUTABLE TO EQUITY HOLDERS | | | | | | |
+---------------------------------------------------------+--+-------------+----+-------------------------------------------+-----+--------------+
| | OF THE PARENT | | | | | | | | | |
+----+-----------------------+---------+----+-------------+--+-------------+-------+-------------------------------------------+------+-------------+
| Share capital | | 20 | | | | 450,000 | | | | 450,000 |
+-------------------+--------+---------+----+-------------+--+-------------+-------+-------------------------------------------+------+-------------+
| Share premium | | 21 | | | | 1,935,980 | | | | 1,935,980 |
+-------------------+--------+---------+----+-------------+--+-------------+-------+-------------------------------------------+------+-------------+
| Statutory | | 21 | | | | 160,995 | | | | 139,615 |
| reserves | | | | | | | | | | |
+-------------------+--------+---------+----+-------------+--+-------------+-------+-------------------------------------------+------+-------------+
| Translation | | 21 | | | | 665,720 | | | | 79,661 |
| reserve | | | | | | | | | | |
+-------------------+--------+---------+----+-------------+--+-------------+-------+-------------------------------------------+------+-------------+
| Retained | | 21 | | | | 644,954 | | | | 494,960 |
| earnings | | | | | | | | | | |
+-------------------+--------+---------+----+-------------+--+-------------+-------+-------------------------------------------+------+-------------+
| | | | | | | | | | | | | | |
+----+--+--+--------+--------+---------+----+-------------+--+-------------+-------+-------------------------------------------+------+-------------+
| Minority | | 21 | | | | 73,613 | | | | 48,360 |
| interests | | | | | | | | | | |
+-------------------+--------+---------+----+-------------+--+-------------+-------+-------------------------------------------+------+-------------+
| | | | | | | | | | | | | | |
+----+--+--+--------+--------+---------+----+-------------+--+-------------+-------+-------------------------------------------+------+-------------+
| TOTAL EQUITY | | | | | | 3,931,262 | | | | 3,148,576 |
+-------------------+--------+---------+----+-------------+--+-------------+-------+-------------------------------------------+------+-------------+
| | | | | | | | | | | | | | |
+----+--+--+--------+--------+---------+----+-------------+--+-------------+-------+-------------------------------------------+------+-------------+
| | | | | | | | | | | | | | |
+----+--+--+--------+--------+---------+----+-------------+--+-------------+-------+-------------------------------------------+------+-------------+
| Approved and authorised for issue by the Board on 18 | | | | | | |
| May 2009 and signed on its behalf by: | | | | | | |
+---------------------------------------------------------+--+-------------+----+-------------------------------------------+-----+--------------+
| | | | | | | | | | | | | | |
+----+--+--+--------+--------+---------+----+-------------+--+-------------+-------+-------------------------------------------+------+-------------+
| | | | | | | | | | | | | | |
+----+--+--+--------+--------+---------+----+-------------+--+-------------+-------+-------------------------------------------+------+-------------+
| ZENG QINGDONG | | | | | MIAO GUOJUN | | | |
+----------------------------+---------+----+-------------+--+---------------------+-------------------------------------------+------+-------------+
| Director | | | | | | | Director | | | | |
+----+--+--+--------+--------+---------+----+-------------+--+-------------+----+--+----------------------------------------+--+--+---+----------+--+
Consolidated Cash Flow Statement
Year ended 31 December 2008
+---+--+--+--------+-----------+---------+--+-----------+--+------------+----+----------+----+-----------+
| | | | | | | | | | 2008 | | | | 2007 |
+---+--+--+--------+-----------+---------+--+-----------+--+------------+----+----------+----+-----------+
| | | | | | | | GBP | | GBP | | GBP | | GBP |
+---+--+--+--------+-----------+---------+--+-----------+--+------------+----+----------+----+-----------+
| | | | | | | | | | | | | | |
+---+--+--+--------+-----------+---------+--+-----------+--+------------+----+----------+----+-----------+
| PROFIT BEFORE TAX | | | | | 128,667 | | | | 306,951 |
+------------------------------+---------+--+-----------+--+------------+----+----------+----+-----------+
| Depreciation of property, plant and | | | | 99,316 | | | | 56,978 |
| equipment | | | | | | | | |
+----------------------------------------+--+-----------+--+------------+----+----------+----+-----------+
| Amortisation of intangibles | | | | | 2,857 | | | | 1,979 |
+------------------------------+---------+--+-----------+--+------------+----+----------+----+-----------+
| Provision for warranty | | | | | (13,791) | | | | 8,191 |
+------------------------------+---------+--+-----------+--+------------+----+----------+----+-----------+
| Adjustments for: | | | | | | | | | | |
+------------------+-----------+---------+--+-----------+--+------------+----+----------+----+-----------+
| | | interest | | | | | | 14,902 | | | | 8,615 |
| | | paid | | | | | | | | | | |
+---+--+-----------+-----------+---------+--+-----------+--+------------+----+----------+----+-----------+
| | | interest received | | | | | (3,510) | | | | (3,336) |
+---+--+-----------------------+---------+--+-----------+--+------------+----+----------+----+-----------+
| Loss on disposal of property, plant and equipment | | 787 | | | | - |
+-------------------------------------------------------+--+------------+----+----------+----+-----------+
| OPERATING CASH FLOW BEFORE WORKING CAPITAL | 229,228 | | | | 379,378 |
+----------------------------------------------------------+------------+----+----------+----+-----------+
| Increase in inventories | | | | | (958,228) | | | | (391,280) |
+------------------------------+---------+--+-----------+--+------------+----+----------+----+-----------+
| Increase in receivables | | | | | (685,197) | | | | (353,903) |
+------------------------------+---------+--+-----------+--+------------+----+----------+----+-----------+
| Increase in payables | | | | | 1,062,172 | | | | 444,738 |
+------------------------------+---------+--+-----------+--+------------+----+----------+----+-----------+
| Tax | | | | | | (73,255) | | | | 52,188 |
| (paid)/repaid | | | | | | | | | | |
+------------------+-----------+---------+--+-----------+--+------------+----+----------+----+-----------+
| | | | | | | | | | | | | | |
+---+--+--+--------+-----------+---------+--+-----------+--+------------+----+----------+----+-----------+
| NET CASH GENERATED/(ABSORBED) BY | | | | | | |
+-------------------------------------------------------+--+------------+----+----------+----+-----------+
| | OPERATING ACTIVITIES | | | | | (425,280) | | | | 131,121 |
+---+--------------------------+---------+--+-----------+--+------------+----+----------+----+-----------+
| | | | | | | | | | | | | | |
+---+--+--+--------+-----------+---------+--+-----------+--+------------+----+----------+----+-----------+
| INVESTING ACTIVITIES | | | | | | | | | |
+------------------------------+---------+--+-----------+--+------------+----+----------+----+-----------+
| Additions of property, plant and | | (123,136) | | | | (60,247) | | |
| equipment | | | | | | | | |
+----------------------------------------+--+-----------+--+------------+----+----------+----+-----------+
| Additions of long term prepaid | | (6,415) | | | | - | | |
| expenses | | | | | | | | |
+----------------------------------------+--+-----------+--+------------+----+----------+----+-----------+
| Additions to intangibles | | | - | | | | (88,209) | | |
+------------------------------+---------+--+-----------+--+------------+----+----------+----+-----------+
| Interest received | | | 3,510 | | | | 3,336 | | |
+------------------------------+---------+--+-----------+--+------------+----+----------+----+-----------+
| Proceeds on sale of property, plant | | 2,593 | | | | - | | |
| and equipment | | | | | | | | |
+----------------------------------------+--+-----------+--+------------+----+----------+----+-----------+
| Net cash used in investing activities | | | | (123,448) | | | | (145,120) |
+----------------------------------------+--+-----------+--+------------+----+----------+----+-----------+
| | | | | | | | | | | | | | |
+---+--+--+--------+-----------+---------+--+-----------+--+------------+----+----------+----+-----------+
| FINANCING ACTIVITIES | | | | | | | | | |
+------------------------------+---------+--+-----------+--+------------+----+----------+----+-----------+
| Issue of ordinary share | | | - | | | | 202,500 | | |
| capital | | | | | | | | | |
+------------------------------+---------+--+-----------+--+------------+----+----------+----+-----------+
| Costs of issue | | | | - | | | | (13,750) | | |
+------------------+-----------+---------+--+-----------+--+------------+----+----------+----+-----------+
| Investment from minority interests | | - | | | | 48,360 | | |
+----------------------------------------+--+-----------+--+------------+----+----------+----+-----------+
| Interest paid | | | | (14,902) | | | | (8,615) | | |
+------------------+-----------+---------+--+-----------+--+------------+----+----------+----+-----------+
| Proceeds from bank | | | 73,435 | | | | 138,172 | | |
| borrowings | | | | | | | | | |
+------------------------------+---------+--+-----------+--+------------+----+----------+----+-----------+
| Repayment of bank borrowings | | | (116,875) | | | | - | | |
+------------------------------+---------+--+-----------+--+------------+----+----------+----+-----------+
| | | | | | | | | | | | | | |
+---+--+--+--------+-----------+---------+--+-----------+--+------------+----+----------+----+-----------+
| Net cash (used in)/from financing | | | | (58,342) | | | | 366,667 |
| activities | | | | | | | | |
+----------------------------------------+--+-----------+--+------------+----+----------+----+-----------+
| | | | | | | | | | | | | | |
+---+--+--+--------+-----------+---------+--+-----------+--+------------+----+----------+----+-----------+
| NET (DECREASE)/INCREASE IN CASH | | | | | | | | |
+----------------------------------------+--+-----------+--+------------+----+----------+----+-----------+
| | AND CASH EQUIVALENTS | | | | (607,070) | | | | 352,668 |
+---+------------------------------------+--+-----------+--+------------+----+----------+----+-----------+
| | | | | | | | | | | | | | |
+---+--+--+--------+-----------+---------+--+-----------+--+------------+----+----------+----+-----------+
| Cash and cash equivalents | | | | | | | | | |
+------------------------------+---------+--+-----------+--+------------+----+----------+----+-----------+
| | at the beginning of the | | | | | 609,391 | | | | 262,080 |
| | year | | | | | | | | | |
+---+--------------------------+---------+--+-----------+--+------------+----+----------+----+-----------+
| | | | | | | | | | | | | | |
+---+--+--+--------+-----------+---------+--+-----------+--+------------+----+----------+----+-----------+
| Effect of foreign exchange differences | | | | 332,345 | | | | (5,357) |
+----------------------------------------+--+-----------+--+------------+----+----------+----+-----------+
| | | | | | | | | | | | | | |
+---+--+--+--------+-----------+---------+--+-----------+--+------------+----+----------+----+-----------+
| CASH AND CASH EQUIVALENTS | | | | | | | | |
+----------------------------------------+--+-----------+--+------------+----+----------+----+-----------+
| | AT THE END OF THE YEAR | | | | 334,666 | | | | 609,391 |
+---+------------------------------------+--+-----------+--+------------+----+----------+----+-----------+
| | | | | | | | | | | | | | |
+---+--+--+--------+-----------+---------+--+-----------+--+------------+----+----------+----+-----------+
| | | | | | | | | | | | | | |
+---+--+--+--------+-----------+---------+--+-----------+--+------------+----+----------+----+-----------+
Notes to the financial statements
Year ended 31 December 2008
+----+--+--+--+--+--------+--------+--+--+--+--+--+--+--+--+--+--+--+--+--+--+--+--+--+--+--+--+--+--+--+--+--+--+--+--+--+
| 1. | | GENERAL INFORMATION | | | | | | | | | |
+----+--+--------------------------+--------------+--------+--------+--------+--------------+--+--------------+--+--------+
| | | The Company is a public limited company incorporated in Jersey under Companies (Jersey) Law 1991. The address |
| | | of the registered office is PO Box 398, 11 Bath Street, St Helier, Jersey JE4 8UT. The nature of the Group's |
| | | operations and its principal activities are set out in the Directors' Report. The principal place of business |
| | | of the Group's operations is Qilihe Village Economic Development District, Jinzhou City, Liaoning Province, |
| | | People's Republic of China. |
+----+--+-----------------------------------------------------------------------------------------------------------------+
| | | These financial statements present information about the Company and as a consolidated group of companies, and |
| | | are set out in pounds sterling reflecting the company's quotation on the UK Alternative Investment Market. The |
| | | functional currency of the Company's subsidiaries is the Renminbi of the People's Republic of China. |
+----+--+-----------------------------------------------------------------------------------------------------------------+
| | | | | | | | | | | | | | |
+----+--+--------+--------+--------+--------------+--------+--------+--------+--------------+--+--------------+--+--------+
| 2. | | ACCOUNTING POLICIES | | | | | | | | | |
+----+--+--------------------------+--------------+--------+--------+--------+--------------+--+--------------+--+--------+
| | | Statement of compliance | | | | | | | | | |
+----+--+--------------------------+--------------+--------+--------+--------+--------------+--+--------------+--+--------+
| | | The financial statements have been prepared in accordance with those International Financial Reporting |
| | | Standards and Interpretations in force ('IFRSs'), as adopted by the European Union, and in accordance with the |
| | | provisions of the Companies (Jersey) Law 1991. |
| | | |
+----+--+-----------------------------------------------------------------------------------------------------------------+
| | | In accordance with the transitional arrangements provided in IFRS 2 Share-based payments, IFRS 2 has not been |
| | | applied to the Company's share options as they had fully vested prior to 1 January 2005. |
| | | |
+----+--+-----------------------------------------------------------------------------------------------------------------+
| | | At the date of authorisation of these financial statements, the following standards and interpretations were in |
| | | issue but not yet effective: |
| | | |
+----+--+-----------------------------------------------------------------------------------------------------------------+
| | | Standards, amendments and interpretations to published standards not yet effective |
+----+--+-----------------------------------------------------------------------------------------------------------------+
| | | Certain new standards, amendments and interpretations to existing standards have been published that are |
| | | mandatory for the group's accounting periods beginning on or after 1 January 2008 or later periods and which |
| | | the Group has decided not to adopt early. These are: |
| | | |
+----+--+-----------------------------------------------------------------------------------------------------------------+
| | | - IAS 23, Borrowing Costs (revised) (effective for accounting periods beginning on or after 1 January 2009). |
| | | The revised IAS 23 is still to be endorsed by the EU. The main change from the previous version is the removal |
| | | of the option of immediately recognising as an expense borrowing costs that relate to qualifying assets, |
| | | broadly being assets that take a substantial period of time to get ready for use or sale. The Group is |
| | | currently assessing its impact on the financial statements. |
| | | |
+----+--+-----------------------------------------------------------------------------------------------------------------+
| | | - IFRS 8, Operating Segments (effective for accounting periods beginning on or after 1 January 2009). This |
| | | standard sets out requirements for the disclosure of information about an entity's operating segments and also |
| | | about the entity's products and services, the geographical areas in which it operates, and its major customers. |
| | | It replaces IAS 14, Segmental Reporting. The group expects to apply this standard in the accounting period |
| | | beginning on 1 January 2009. As this is a disclosure standard it will not have any impact on the results or net |
| | | assets of the Group. |
| | | |
+----+--+-----------------------------------------------------------------------------------------------------------------+
| | | - Revised IFRS 3, Business Combinations and complementary Amendments to IAS 27, 'Consolidated and separate |
| | | financial statements' (both effective for accounting periods beginning on or after 1 July 2009). This revised |
| | | standard and amendments to is still to be endorsed by the EU. The revised IFRS 3 and amendments to IAS 27 arise |
| | | from a joint project with the Financial Accounting Standards Board (FASB), the US standards setter, and result |
| | | in IFRS being largely converged with the related, recently issued, US requirements. There are certain very |
| | | significant changes to the requirements of IFRS, and options available, if accounting for business |
| | | combinations. Management is currently assessing the impact of revised IFRS 3 and amendments to IAS 27 on the |
| | | accounts. |
| | | |
+----+--+-----------------------------------------------------------------------------------------------------------------+
| | | - Amendment to IFRS 2, Share-based payments: vesting conditions and cancellations (effective for accounting |
| | | periods beginning on or after 1 January 2009). This amendment is still to be endorsed by the EU. The Amendment |
| | | to IFRS 2 is of particular relevance to companies that operate employee shares save schemes. This is because it |
| | | results in an immediate acceleration of the IFRS 2 expense that would otherwise have been recognised in future |
| | | periods should an employee decide to stop contributing to the savings plan, as well as a potential revision to |
| | | the fair value of the awards granted to factor in the probability of employees withdrawing from such a plan. |
| | | Management is currently assessing the impact of the Amendment on the accounts. |
| | | |
+----+--+-----------------------------------------------------------------------------------------------------------------+
| | | - Amendments to IAS 1, Presentation of Financial Statements (effective for annual periods beginning on or after |
| | | 1 January 2009). The revised IAS 1 introduces a single "statement of comprehensive income" incorporating both |
| | | the profits and losses that have traditionally been reported in the income statement and other gains and losses |
| | | that are currently reported in the Statement of Changes in Equity. As a result, the "statement of comprehensive |
| | | income" reports all non-owner changes in equity. Other non-owner changes in equity include revaluations, |
| | | actuarial gains and losses, translation gains and losses on foreign subsidiaries, remeasuring available for |
| | | sale financial assets, and the effective portion of gains and losses on cash flow hedges. |
| | | |
+----+--+-----------------------------------------------------------------------------------------------------------------+
| | | The revised statement of changes in equity only reports transactions with owners (e.g. capital raised and |
| | | dividends paid) and prior period restatements. It will not report non-owner income and expenses. In addition, |
| | | the balance sheet will be renamed the statement of financial position and the cash flow statement will become |
| | | the statement of cash flows. The Group expects to apply this standard in the accounting period beginning on 1 |
| | | January 2009. |
| | | |
+----+--+-----------------------------------------------------------------------------------------------------------------+
| | | - IFRIC 16 Hedge of a net investment in a foreign operation (effective for annual periods beginning on or after |
| | | 1 October 2008). The IFRIC clarifies certain aspects of IAS39 with respect to hedge accounting. The impact of |
| | | this interpretation on the Group's financial statements is not expected to be material. |
| | | |
+----+--+-----------------------------------------------------------------------------------------------------------------+
| | | Critical accounting estimates and judgments |
+----+--+-----------------------------------------------------------------------------------------------------------------+
| | | The preparation of financial statements in conformity with IFRSs requires management to make assumptions that |
| | | affects the application of accounting policies and the amounts of assets, liabilities, income and expenditure. |
| | | The estimates and associated assumptions are based on historical experience and other relevant factors, the |
| | | results of which form the basis for the judgements that underlie the carrying value of the assets and |
| | | liabilities. Actual results may differ from these estimates. The most significant areas in which judgements are |
| | | required relate to the estimate of useful economic lives and residual values of non-current assets and the |
| | | recoverable amount of current and non-current assets (in particular inventories and trade receivables). The |
| | | estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are |
| | | recognised in the period in which the estimates are revised if the revision affects only that period, or in the |
| | | period of revision and future periods if the revision affects both the current and future periods. |
+----+--+-----------------------------------------------------------------------------------------------------------------+
| | | Judgments |
+----+--+-----------------------------------------------------------------------------------------------------------------+
| | | In the process of applying the Group's accounting policies, management has made the following judgment, apart |
| | | from those involving estimations, which has the most significant effect on the amounts recognised in the |
| | | financial statements. |
+----+--+-----------------------------------------------------------------------------------------------------------------+
| | | The acquisition of Jinzhou Wonder Machinery Equipment co Ltd has been accounted for using the principles of |
| | | acquisition accounting, which involve the estimation of fair values for separable assets and liabilities |
| | | acquired. |
| | | |
+----+--+-----------------------------------------------------------------------------------------------------------------+
| | | Having considered that produce of the acquired subsidiary is bespoke, and that the business of the subsidiary |
| | | is ever changing and with no repeat business being expected from customers, customer contracts are assessed to |
| | | be generally short-lived as they generally extend for less than six months. |
| | | |
+----+--+-----------------------------------------------------------------------------------------------------------------+
| | | There is considered to be no history or evidence of exchange transactions for the same potential intangible |
| | | assets and the directors therefore consider that there is no significant value to any such intangible assets. |
| | | Due to these reasons the fair value of customer lists are not considered to be significant. |
| | | Resulting from this estimation, goodwill is recognized as arising from the acquisition in the absence of other |
| | | separable intangible assets. Review of the potential impairment of such goodwill involves judgements relating |
| | | to future economic events. |
| | | |
+----+--+-----------------------------------------------------------------------------------------------------------------+
| | | Estimates and assumptions |
+----+--+-----------------------------------------------------------------------------------------------------------------+
| | | Allowance for doubtful trade receivables |
| | | The Group makes sales on credit. A proportion of the outstanding credit sales may prove uncollectible in due |
| | | course. An estimate is made of the uncollectible portion of accounts receivables using a calculation based on |
| | | prior experience and an evaluation of the amounts outstanding. In aggregate, GBP233,576 (2007: GBP92,555) is |
| | | considered to be at risk in respect of amounts due from trade customers. There is a degree of uncertainty as to |
| | | actions the Group is able to undertake to enforce collection of these debts, which may impact the eventual |
| | | recoverable amounts. Accordingly, the Directors have assessed their best estimate of the recoverability of |
| | | these debts as nil. More details of the allowance for doubtful trade and other receivables is provided in Note |
| | | 16. |
| | | |
+----+--+-----------------------------------------------------------------------------------------------------------------+
| | | The company reviews the net realisable value of, and demand for, its inventory on a regular basis to provide |
| | | assurance that recorded inventory is stated at the lower of cost or net realisable value. Factors that could |
| | | impact estimated demand and selling prices include the timing and success of future technological innovations, |
| | | competitor actions, supplier prices and economic trends. Changes of the expected net realizable value of |
| | | inventory could potentially result in the reduction of the profit for the year. The Group has not made |
| | | significant provision for slow moving and obsolete stock as its amount was negligible. |
+----+--+-----------------------------------------------------------------------------------------------------------------+
| | | Basis of consolidation | | | | | | | | | |
+----+--+-----------------------------+-----+--------+--------+--------+--------+-----+-----------+-----+-----------------+
| | | Where the company has the power, either directly or indirectly, to govern the financial and operating policies |
| | | of another entity or business so as to obtain benefits from its activities, it is classified as a subsidiary. |
| | | The consolidated financial statements present the results of the Company and its subsidiaries ("the Group") as |
| | | if they formed a single entity. Inter-company transactions and balances between group companies are therefore |
| | | eliminated in full. |
+----+--+-----------------------------------------------------------------------------------------------------------------+
| | | Goodwill | | | | | | | | | |
+----+--+-----------------------------+-----+--------+--------+--------+--------+-----+-----------+-----+-----------------+
| | | Goodwill represents the excess of the cost of a business combination over the interest in the fair value of |
| | | identifiable assets, liabilities and contingent liabilities acquired. Cost comprises the fair values of assets |
| | | given, liabilities assumed and equity instruments issued, plus any direct costs of acquisition. |
| | | |
+----+--+-----------------------------------------------------------------------------------------------------------------+
| | | Goodwill is capitalised as an intangible asset with any impairment in carrying value being charged to the |
| | | income statement, through administrative expenses, and is not subsequently reversed. |
| | | |
+----+--+-----------------------------------------------------------------------------------------------------------------+
| | | Where the fair value of identifiable assets, liabilities and contingent liabilities exceed the fair value of |
| | | consideration paid, the excess is credited in full to the income statement. |
+----+--+-----------------------------------------------------------------------------------------------------------------+
| | | Foreign currency | | | | | | | | | |
+----+--+-----------------------------+-----+--------+--------+--------+--------+-----+-----------+-----+-----------------+
| | | Transactions entered into by Group entities in a currency other than the currency of the primary economic |
| | | environment in which it operates (the "functional currency") are recorded at the rates ruling when the |
| | | transactions occur. Foreign currency monetary assets and liabilities are translated at the rates ruling at the |
| | | balance sheet date. |
| | | |
+----+--+-----------------------------------------------------------------------------------------------------------------+
| | | The presentation currency of the Group is pounds sterling and therefore the financial statements have been |
| | | translated from RMB to pounds sterling at the following exchange rates: |
| | | |
+----+--+-----------------------------------------------------------------------------------------------------------------+
| | | | | | Year-end rates | | | | Average rates |
+----+--+--+--+--------------------------+-----------------------+--------+--------+-----+-----------------------------+
| | | | | 31 December 2007 | ?1=RMB14.4747 | | | | ?1=RMB15.2451 |
+----+--+--+--+--------------------------+-----------------------+--------+--------+-----+-----------------------------+
| | | | | 31 December 2008 | ?1=RMB9.9738 | | | | ?1=RMB12.9626 |
+----+--+--+--+--------------------------+-----------------------+--------+--------+-----+-----------------------------+
| | | On consolidation, the results of overseas operations are translated into sterling at rates approximating |
| | | to those ruling when the transactions took place. All assets and liabilities of overseas operations, |
| | | including goodwill arising on the acquisition of those operations, are translated at the rate ruling at |
| | | the balance sheet date. Exchange differences arising on translating the opening net assets at opening |
| | | rate and the results of overseas operations at actual rate are recognised directly in equity (the |
| | | "Translation reserve"). Exchange differences recognised in the income statement of Group entities' |
| | | separate financial statements on the translation of long-term monetary items forming part of the Group's |
| | | net investment in the overseas operation concerned are reclassified to the Translation reserve. |
| | | |
+----+--+-----------------------------------------------------------------------------------------------------------+
| | | On disposal of a foreign operation, the cumulative exchange differences recognised in the foreign |
| | | exchange reserve relating to that operation up to the date of disposal are transferred to the income |
| | | statement as part of the profit or loss on disposal. |
+----+--+-----------------------------------------------------------------------------------------------------------+
| | | Borrowing costs | | | | | | | | | |
+----+--+-----------------------------+-----+--------+--------+--------+--------+-----+-----------+-----+-----------+
| | | All borrowings costs are recognised in the income statement in the period in which they are incurred. |
+----+--+-----------------------------------------------------------------------------------------------------------+
| | | Income tax | | | | | | | | | |
+----+--+-----------------------------+-----+--------+--------+--------+--------+-----+-----------+-----+-----------+
| | | Income tax for the financial year comprises current and deferred tax. Income tax is recognised in the |
| | | income statement except to the extent that it relates to items recognised directly in equity, in which |
| | | case such tax is recognised in equity. |
| | | |
+----+--+-----------------------------------------------------------------------------------------------------------+
| | | Current tax is the expected tax payable on the taxable income for the financial year, using tax rates |
| | | enacted or substantively enacted at the balance sheet date, and any adjustment to tax payable in respect |
| | | of previous financial years. |
| | | |
+----+--+-----------------------------------------------------------------------------------------------------------+
| | | Deferred tax is provided using the liability method, providing for temporary differences as at the |
| | | balance sheet date between the carrying amounts of assets and liabilities for financial reporting |
| | | purposes and the amounts used for taxation purposes except for differences arising on: |
+----+--+-----------------------------------------------------------------------------------------------------------+
| | | -| the initial recognition of goodwill, |
+----+--+--+-----------------------------------------------------------------------------------------------------------+
| | | -| the initial recognition of an asset or liability in a transaction which is not a business combination |
| | | | and, at the time of the transaction, affects neither accounting or taxable profit, and |
+----+--+--+-----------------------------------------------------------------------------------------------------------+
| | | -| investments in subsidiaries and jointly controlled entities where the group is able to control the timing |
| | | | of the reversal of the difference and it is probable that the difference will not reverse in the |
| | | | foreseeable future. |
+----+--+--+-----------------------------------------------------------------------------------------------------------+
| | | The amount of deferred tax provided is based on the expected manner of realisation or settlement of the |
| | | carrying amount of assets and liabilities, using tax rates enacted or substantively enacted at the |
| | | balance sheet date. |
| | | |
+----+--+-----------------------------------------------------------------------------------------------------------+
| | | A deferred tax asset is recognised only to the extent that it is probable that future taxable profits |
| | | will be available against which the asset can be utilised. Deferred tax assets are reduced to the extent |
| | | that it is no longer probable that the related tax benefit will be realised. |
+----+--+-----------------------------------------------------------------------------------------------------------+
| | | Dividends | | | | | | | | | |
+----+--+-----------------------------+-----+--------+--------+--------+--------+-----+-----------+-----+-----------+
| | | Equity dividends are recognised when they become legally payable. In respect of interim dividends to |
| | | equity shareholders, this is when they are declared and paid. In respect of final dividends to equity |
| | | shareholders, this is when they are approved by the members at the Annual General Meeting. |
+----+--+-----------------------------------------------------------------------------------------------------------+
| | | Property, plant and | | | | | | | | | |
| | | equipment | | | | | | | | | |
+----+--+-----------------------------+-----+--------+--------+--------+--------+-----+-----------+-----+-----------+
| | | Property, plant and equipment are stated at cost less accumulated depreciation and impairment losses. The |
| | | cost of an asset comprises its purchase price and any directly attributable costs of bringing the asset |
| | | to its working condition and location for its intended use. Depreciation is calculated so as to write off |
| | | the cost of an asset, less its estimated residual value, over its useful economic life, using the |
| | | straight-line method. The estimated useful lives are as follows: |
+----+--+-----------------------------------------------------------------------------------------------------------+
| | | | | Buildings | | | | | 20 years | | |
+----+--+--+--+--------------------------+-----+--------+--------+--------+--------------------------+-----+-----------+
| | | | | Plant, machinery, furniture and | | | 5-10 years | | |
| | | | | fixtures | | | | | |
+----+--+--+--+-----------------------------------------+--------+--------+--------------------------+-----+-----------+
| | | | | Motor vehicles | | | | | 5 years | | |
+----+--+--+--+--------------------------+-----+--------+--------+--------+--------------------------+-----+-----------+
| | | | | Office equipment | | | | | 5 years | | |
+----+--+--+--+--------------------------+-----+--------+--------+--------+--------------------------+-----+-----------+
| | | Land use rights and patent rights | | | | | | | | |
+----+--+-----------------------------------+--------+--------+--------+--------+-----+-----------+-----+-----------+
| | | Expenditure on land use rights and patents rights are capitalised and treated as an intangible fixed |
| | | asset. |
+----+--+-----------------------------------------------------------------------------------------------------------+
| | | Land use rights and patents are amortised through administrative expenses over the period to which the |
| | | rights or patent relate. |
+----+--+-----------------------------------------------------------------------------------------------------------+
| | | The estimated useful lives are as follows: | | |
+----+--+-----------------------------------------------------------------------------------------+-----+-----------+
| | | | | Land use right | | | | | 41-43 years | | |
+----+--+--+--+--------------------------+-----+--------+--------+--------+--------------------------+-----+-----------+
| | | | | Patent rights | | | | | 10 years | | |
+----+--+--+--+--------------------------+-----+--------+--------+--------+--------------------------+-----+-----------+
| | | Impairment of assets | | | | | | | | | |
+----+--+-----------------------------+-----+--------+--------+--------+--------+-----+-----------+-----+-----------+
| | | The carrying amounts of assets are reviewed at each balance sheet date to determine whether there is any |
| | | indication of impairment. If any such indication exists, the asset's recoverable amount is estimated. For |
| | | goodwill, the recoverable amount is estimated at each balance sheet date. An impairment loss is |
| | | recognised whenever the carrying amount of the asset or its cash-generating unit exceeds its recoverable |
| | | amount. Impairment losses are recognised through administrative expenses in the income statement. |
| | | |
+----+--+-----------------------------------------------------------------------------------------------------------+
| | | The recoverable amount is the higher of an asset's net selling price and value in use. The net selling |
| | | price is the amount obtainable from the sale of an asset in an arm's length transaction. Value in use is |
| | | the present value of estimated future cash flows expected to arise from the continuing use of an asset |
| | | and from its disposal at the end of its useful life. Recoverable amounts are estimated for individual |
| | | assets or, if it is not possible, for the cash generating unit. |
| | | |
+----+--+-----------------------------------------------------------------------------------------------------------+
| | | An impairment loss is reversed if there has been a change in the estimates used to determine the |
| | | recoverable amount. An impairment loss is reversed only to the extent that the asset's carrying amount |
| | | does not exceed the carrying amount that would have been determined, net of depreciation, if no |
| | | impairment loss had been recognised. Reversals of impairment losses are recognised in the income |
| | | statement. Impairment losses in respect of goodwill are not reversed. |
+----+--+-----------------------------------------------------------------------------------------------------------+
| | | Investment in subsidiary | | | | | | | | |
| | | undertakings | | | | | | | | |
+----+--+-----------------------------------+--------+--------+--------+--------+-----+-----------+-----+-----------+
| | | Investments in subsidiaries are stated at cost less provision for any impairment in value. |
+----+--+-----------------------------------------------------------------------------------------------------------+
| | | Inventories | | | | | | | | | |
+----+--+-----------------------------+-----+--------+--------+--------+--------+-----+-----------+-----+-----------+
| | | Inventories are stated at the lower of cost and net realisable value. Cost is determined using the |
| | | weighted average cost method. The cost of finished goods comprises raw materials, direct labour, other |
| | | direct costs and related production overheads but excludes borrowing costs. Net realisable value is the |
| | | estimated selling price in the ordinary course of business, less the costs of completion and selling |
| | | expenses. |
+----+--+-----------------------------------------------------------------------------------------------------------+
| | | Financial assets | | | | | | | | | |
+----+--+-----------------------------+-----+--------+--------+--------+--------+-----+-----------+-----+-----------+
| | | Financial assets are cash and bank balances and trade and other receivables. |
| | | |
+----+--+-----------------------------------------------------------------------------------------------------------+
| | | Trade and other receivables are stated at cost as reduced by appropriate allowances for estimated |
| | | irrecoverable amounts. |
| | | |
+----+--+-----------------------------------------------------------------------------------------------------------+
| | | Known bad receivables are written off as incurred when collection for the full amount is no longer |
| | | probable, and an estimate for doubtful debts made based on past experience. |
+----+--+-----------------------------------------------------------------------------------------------------------+
| | | Cash and cash equivalents | | | | | | | | | |
+----+--+-----------------------------+-----+--------+--------+--------+--------+-----+-----------+-----+-----------+
| | | Cash comprises cash in hand and demand deposits. Cash equivalents are short-term, highly liquid |
| | | investments that are readily convertible to known amounts of cash and which are subject to an |
| | | insignificant risk of changes in value. For the purpose of the cashflow statement, cash equivalents would |
| | | include advances from banks repayable within 3 months from the date of the advance. |
+----+--+-----------------------------------------------------------------------------------------------------------+
| | | Financial liabilities and | | | | | | | | | |
| | | equity | | | | | | | | | |
+----+--+-----------------------------+-----+--------+--------+--------+--------+-----+-----------+-----+-----------+
| | | Financial liabilities and equity instruments are classified according to the substance of the contractual |
| | | arrangements entered into. Financial liabilities include trade and other payables, amounts due to related |
| | | parties and shareholders, bank borrowings and notes payable. |
| | | |
+----+--+-----------------------------------------------------------------------------------------------------------+
| | | Trade and other payables are carried at cost which is the fair value of the consideration to be paid in |
| | | the future for goods and services received, whether or not billed to the Group. |
| | | |
+----+--+-----------------------------------------------------------------------------------------------------------+
| | | All borrowings and overdrafts are recorded at fair value, being the proceeds received, net of direct |
| | | issue costs. Finance charges are charged to the income statement on an accruals basis using the effective |
| | | interest rate method. |
| | | |
+----+--+-----------------------------------------------------------------------------------------------------------+
| | | Equity instruments are recorded at the fair value of the consideration received, net of direct issue |
| | | costs. |
+----+--+-----------------------------------------------------------------------------------------------------------+
| | | Sales revenue recognition | | | | | | | | | |
+----+--+-----------------------------+-----+--------+--------+--------+--------+-----+-----------+-----+-----------+
| | | Sales revenue is recognised when goods are delivered and commissioned at the customers' premises which is |
| | | taken to be the point in time when the customer has accepted the goods and the related risks and rewards |
| | | of ownership. Sales revenue excludes value added or other sales taxes and is after deduction of any trade |
| | | discounts. |
+----+--+-----------------------------------------------------------------------------------------------------------+
| | | Government grants | | | | | | | | | |
+----+--+-----------------------------+-----+--------+--------+--------+--------+-----+-----------+-----+-----------+
| | | Government grants received on capital expenditure are deducted in arriving at the carrying amount of the |
| | | asset purchased. Grants for revenue expenditure are presented separately on the face of the consolidated |
| | | income statement. |
| | | |
+----+--+-----------------------------------------------------------------------------------------------------------+
| | | Where retention of the government grant is dependent on the Group satisfying certain criteria it is |
| | | initially recognised as deferred income. When the criteria for retention have been satisfied, the |
| | | deferred income balance is released to the income statement or netted against the asset purchased as |
| | | appropriate. |
+----+--+-----------------------------------------------------------------------------------------------------------+
| | | Related parties | | | | | | | | | |
+----+--+-----------------------------+-----+--------+--------+--------+--------+-----+-----------+-----+-----------+
| | | Parties are considered to be related if one party has the ability, directly or indirectly, to control the |
| | | other party, or exercise significant influence over the other party in making financial and operating |
| | | decisions. Parties are also considered to be related if they are subject to common control or common |
| | | significant influence. Related parties may be individuals or corporate entities. |
+----+--+--+--+--+--------+--------+--+--+--+--+--+--+--+--+--+--+--+--+--+--+--+--+--+--+--+--+--+--+--+--+--+--+--+--+--+
+----+--+--------+--------+--------+------------+--+-----------+--+-------------+--+-------------+--+------------+
| 3. | | INCOME | | | | | | | | | |
+----+--+--------------------------+------------+--+-----------+--+-------------+--+-------------+--+------------+
| | | Income is analysed as follows: |
+----+--+--------------------------------------------------------------------------------------------------------+
| | | | | | | | | | | | 2008 | | 2007 |
+----+--+--------+--------+--------+------------+--+-----------+--+-------------+--+-------------+--+------------+
| | | | | | | | | | | | GBP | | GBP |
+----+--+--------+--------+--------+------------+--+-----------+--+-------------+--+-------------+--+------------+
| | | | | | | | | | | | | | |
+----+--+--------+--------+--------+------------+--+-----------+--+-------------+--+-------------+--+------------+
| | | Revenue from the sale of | | | | | | | 2,611,329 | | 2,336,967 |
| | | goods | | | | | | | | | |
+----+--+--------------------------+------------+--+-----------+--+-------------+--+-------------+--+------------+
| | | Other operating income - government | | | | | 94,423 | | - |
| | | subsidy | | | | | | | |
+----+--+------------------------------------------+-----------+--+-------------+--+-------------+--+------------+
| | | Non-operating income | | | | | | | 5,359 | | 10,718 |
+----+--+--------------------------+------------+--+-----------+--+-------------+--+-------------+--+------------+
| | | Interest received on | | | | | | | 3,510 | | 3,336 |
| | | cash deposits | | | | | | | | | |
+----+--+--------------------------+------------+--+-----------+--+-------------+--+-------------+--+------------+
| | | | | | | | | | | | 2,714,621 | | 2,351,021 |
+----+--+--------+--------+--------+------------+--+-----------+--+-------------+--+-------------+--+------------+
| | | | | | | | | | | | | | |
+----+--+--------+--------+--------+------------+--+-----------+--+-------------+--+-------------+--+------------+
| | | SEGMENT INFORMATION | | | | | | | | | |
+----+--+--------------------------+------------+--+-----------+--+-------------+--+-------------+--+------------+
| | | | | | Packaging | | Moulding | | Bespoke | | Unallocated | | Total |
| | | | | | machinery | | Equipment | | engineering | | | | |
+----+--+--------+--------+--------+------------+--+-----------+--+-------------+--+-------------+--+------------+
| | | | | | GBP | | GBP | | GBP | | GBP | | GBP |
+----+--+--------+--------+--------+------------+--+-----------+--+-------------+--+-------------+--+------------+
| | | Revenue from sale of | 1,186,063 | | 75,824 | | 1,349,442 | | | | 2,611,329 |
| | | goods | | | | | | | | | |
+----+--+--------------------------+------------+--+-----------+--+-------------+--+-------------+--+------------+
| | | Segment result | 32,023 | | 14,509 | | 100,887 | | (7,360) | | 140,059 |
+----+--+--------------------------+------------+--+-----------+--+-------------+--+-------------+--+------------+
| | | Finance income | 1,973 | | 1,176 | | 280 | | 81 | | 3,510 |
+----+--+--------------------------+------------+--+-----------+--+-------------+--+-------------+--+------------+
| | | Finance costs | (1,171) | | (29) | | (13,702) | | - | | (14,902) |
+----+--+--------------------------+------------+--+-----------+--+-------------+--+-------------+--+------------+
| | | | | | | | | | | | | | |
+----+--+--------+--------+--------+------------+--+-----------+--+-------------+--+-------------+--+------------+
| | | Profit before income tax | 32,825 | | 15,656 | | 87,465 | | (7,279) | | 128,667 |
+----+--+--------------------------+------------+--+-----------+--+-------------+--+-------------+--+------------+
| | | Tax expense | 29,147 | | (5,023) | | 7,048 | | | | 31,172 |
+----+--+--------------------------+------------+--+-----------+--+-------------+--+-------------+--+------------+
| | | Profit from continuing | 61,972 | | 10,633 | | 94,513 | | (7,279) | | 159,839 |
| | | operations | | | | | | | | | |
+----+--+--------------------------+------------+--+-----------+--+-------------+--+-------------+--+------------+
| | | Minority interest | | | (2,658) | | | | | | (2,658) |
+----+--+--------------------------+------------+--+-----------+--+-------------+--+-------------+--+------------+
| | | Profit attributable to | 61,972 | | 7,975 | | 94,513 | | (7,279) | | 157,181 |
| | | the equity holders of | | | | | | | | | |
| | | the parent | | | | | | | | | |
+----+--+--------------------------+------------+--+-----------+--+-------------+--+-------------+--+------------+
| | | | | | | | | | | | | | |
+----+--+--------+--------+--------+------------+--+-----------+--+-------------+--+-------------+--+------------+
| | | Other segment items included in the income statement are as | | | | |
| | | follows: | | | | |
+----+--+-----------------------------------------------------------------------+--+-------------+--+------------+
| | | Depreciation | 61,468 | | 14,105 | | 23,743 | | - | | 99,316 |
+----+--+--------------------------+------------+--+-----------+--+-------------+--+-------------+--+------------+
| | | Amortisation | 2,857 | | - | | - | | - | | 2,857 |
+----+--+--------------------------+------------+--+-----------+--+-------------+--+-------------+--+------------+
| | | Provisions for doubtful | 159,039 | | 4,538 | | 69,999 | | - | | 233,576 |
| | | debts | | | | | | | | | |
+----+--+--------------------------+------------+--+-----------+--+-------------+--+-------------+--+------------+
| | | | | | | | | | | | | | |
+----+--+--------+--------+--------+------------+--+-----------+--+-------------+--+-------------+--+------------+
| | | Segmental assets and liabilities at 31 December 2008 and capital expenditure for the |
| | | year ended are as follows: |
+----+--+--------------------------------------------------------------------------------------------------------+
| | | Total assets (excluding | 2,421,243 | | 286,224 | | 2,037,195 | | 1,359,503 | | 6,104,165 |
| | | technology) | | | | | | | | | |
+----+--+--------------------------+------------+--+-----------+--+-------------+--+-------------+--+------------+
| | | Technology Segment | | | | | | | | | 100,262 |
| | | Assets | | | | | | | | | |
+----+--+--------------------------+------------+--+-----------+--+-------------+--+-------------+--+------------+
| | | Total assets | | | | | | | | | 6,204,427 |
+----+--+--------------------------+------------+--+-----------+--+-------------+--+-------------+--+------------+
| | | Total liabilities | 635,939 | | (3,689) | | 1,391,647 | | 249,268 | | 2,273,165 |
+----+--+--------------------------+------------+--+-----------+--+-------------+--+-------------+--+------------+
| | | | | | | | | | | | | | |
+----+--+--------+--------+--------+------------+--+-----------+--+-------------+--+-------------+--+------------+
| | | The technology segment of the group has not traded during the current year under |
| | | review. This segment has no liabilites and only consists of an asset base as disclosed |
| | | above. |
+----+--+--------------------------------------------------------------------------------------------------------+
| | | The sales revenue arises from the sale of packaging machinery, machinery equipments, |
| | | moulds, and relevant spare parts which forms the Group's main business. |
+----+--+--------------------------------------------------------------------------------------------------------+
| | | All operations and assets are based in Jinzhou Province, People's Republic of China. |
| | | Revenue from the sale of goods is analysed as follows: |
+----+--+--------------------------------------------------------------------------------------------------------+
| | | | | | | | | | | | 2008 | | 2007 |
+----+--+--------+--------+--------+------------+--+-----------+--+-------------+--+-------------+--+------------+
| | | | | | | | | | | | GBP | | GBP |
+----+--+--------+--------+--------+------------+--+-----------+--+-------------+--+-------------+--+------------+
| | | | | | | | | | | | | | |
+----+--+--------+--------+--------+------------+--+-----------+--+-------------+--+-------------+--+------------+
| | | China | | | | | | | 2,507,724 | | 2,261,000 |
+----+--+--------------------------+------------+--+-----------+--+-------------+--+-------------+--+------------+
| | | Export sales | | | | | | | | | |
+----+--+--------------------------+------------+--+-----------+--+-------------+--+-------------+--+------------+
| | | | Belgium | | | | | | | 12,729 | | 38,801 |
+----+--+--------+-----------------+------------+--+-----------+--+-------------+--+-------------+--+------------+
| | | | Greece | | | | | | | - | | 15,900 |
+----+--+--------+-----------------+------------+--+-----------+--+-------------+--+-------------+--+------------+
| | | | HongKong | | | | | | | - | | 9,095 |
+----+--+--------+-----------------+------------+--+-----------+--+-------------+--+-------------+--+------------+
| | | | Thailand | | | | | | | - | | 6,151 |
+----+--+--------+-----------------+------------+--+-----------+--+-------------+--+-------------+--+------------+
| | | | Indonesia | | | | | | | 20,829 | | 6,020 |
+----+--+--------+-----------------+------------+--+-----------+--+-------------+--+-------------+--+------------+
| | | | Viet Nam | | | | | | | 12,960 | | - |
+----+--+--------+-----------------+------------+--+-----------+--+-------------+--+-------------+--+------------+
| | | | Philippines | | | | | | | 9,103 | | - |
+----+--+--------+-----------------+------------+--+-----------+--+-------------+--+-------------+--+------------+
| | | | Russia | | | | | | | 26,461 | | - |
+----+--+--------+-----------------+------------+--+-----------+--+-------------+--+-------------+--+------------+
| | | | Argentina | | | | | | | 21,523 | | - |
+----+--+--------+-----------------+------------+--+-----------+--+-------------+--+-------------+--+------------+
| | | | | | | | | | | | 2,611,329 | | 2,336,967 |
+----+--+--------+--------+--------+------------+--+-----------+--+-------------+--+-------------+--+------------+
| | | The Group receives a subsidy in accordance with local tax regulations in |
| | | Jinzhou Province due to the reinvestment of profits in its subsidiary companies. |
+----+--+--------+--------+--------+------------+--+-----------+--+-------------+--+-------------+--+------------+
+---+-+-+-+-+-+-+-+-+-+-+-+-+-+-+-------+-+-+-+-+-+-+-+-+--+--+-+-+-+-+-+-+-+-+---+-+--+-+-+-+-+-+-+-+-+-+--+-+--+-+-+-+-+-+-+-+--+-+-+-+--+-+-+-+-+-+-+-+-+--+-+-+-+-+-+-+-+-+-+
| 4. | | PROFIT FROM OPERATIONS | | | | | | | | |
+-----+---+-----------------------------------------------------------------+-----+----------------------+--+--------+-----+-----------------+---------+----------------+
| | | | | | | | | | | | 2008 | | 2007 |
+-----+---+---------+---------+---------------------+-----------------------+-----+----------------------+--+--------+-----+-----------------+---------+----------------+
| | | | | | | | | | | | GBP | | GBP |
+-----+---+---------+---------+---------------------+-----------------------+-----+----------------------+--+--------+-----+-----------------+---------+----------------+
| | | Profit from operations has been arrived at after charging/(crediting): | | | | |
+-----+---+----------------------------------------------------------------------------------------------------------+-----+-----------------+---------+----------------+
| | | Staff costs (note 5) | | | | | | | 388,340 | | 106,098 |
+-----+---+-----------------------------------------+-----------------------+-----+----------------------+--+--------+-----+-----------------+---------+----------------+
| | | Depreciation on property, plant and machinery | | | | | 99,316 | | 56,978 |
+-----+---+-----------------------------------------------------------------------+----------------------+--+--------+-----+-----------------+---------+----------------+
| | | Amortisation of intangible assets | | | | | | | 2,857 | | 1,979 |
+-----+---+-----------------------------------------+-----------------------+-----+----------------------+--+--------+-----+-----------------+---------+----------------+
| | | Provision for bad debts | | | | | | | 233,576 | | 39,395 |
+-----+---+-----------------------------------------+-----------------------+-----+----------------------+--+--------+-----+-----------------+---------+----------------+
| | | Auditors' fees | | | | | | | 39,046 | | 23,350 |
+-----+---+-----------------------------------------+-----------------------+-----+----------------------+--+--------+-----+-----------------+---------+----------------+
| | | Loss on disposal of property, plant & equipment | | | | 787 | | - |
+-----+---+----------------------------------------------------------------------------------------------+--+--------+-----+-----------------+---------+----------------+
| | | | | | | | | | | | | | |
+-----+---+---------+---------+---------------------+-----------------------+-----+----------------------+--+--------+-----+-----------------+---------+----------------+
| 5. | | STAFF COSTS | | | | | | | | | |
+-----+---+-----------------------------------------+-----------------------+-----+----------------------+--+--------+-----+-----------------+---------+----------------+
| | | | | | | | | | | | 2008 | | 2007 |
+-----+---+---------+---------+---------------------+-----------------------+-----+----------------------+--+--------+-----+-----------------+---------+----------------+
| | | | | | | | | | | | GBP | | GBP |
+-----+---+---------+---------+---------------------+-----------------------+-----+----------------------+--+--------+-----+-----------------+---------+----------------+
| | | | | | | | | | | | | | |
+-----+---+---------+---------+---------------------+-----------------------+-----+----------------------+--+--------+-----+-----------------+---------+----------------+
| | | Short-term employee benefits | | | | | | | 366,068 | | 95,913 |
+-----+---+-----------------------------------------+-----------------------+-----+----------------------+--+--------+-----+-----------------+---------+----------------+
| | | Social security costs | | | | | | | 22,272 | | 10,185 |
+-----+---+-----------------------------------------+-----------------------+-----+----------------------+--+--------+-----+-----------------+---------+----------------+
| | | | | | | | | | | | 388,340 | | 106,098 |
+-----+---+---------+---------+---------------------+-----------------------+-----+----------------------+--+--------+-----+-----------------+---------+----------------+
| | | | | | | | | | | | | | |
+-----+---+---------+---------+---------------------+-----------------------+-----+----------------------+--+--------+-----+-----------------+---------+----------------+
| | | The average number of persons, including directors, employed by the Group during the year was: |
+-----+---+-----------------------------------------------------------------------------------------------------------------------------------------------------------+
| | | | | | | | | | | | 2008 | | 2007 |
+-----+---+---------+---------+---------------------+-----------------------+-----+----------------------+--+--------+-----+-----------------+---------+----------------+
| | | | | | | | | | | | Number | | Number |
+-----+---+---------+---------+---------------------+-----------------------+-----+----------------------+--+--------+-----+-----------------+---------+----------------+
| | | | | | | | | | | | | | |
+-----+---+---------+---------+---------------------+-----------------------+-----+----------------------+--+--------+-----+-----------------+---------+----------------+
| | | Management | | | | | | | 81 | | 29 |
+-----+---+-----------------------------------------+-----------------------+-----+----------------------+--+--------+-----+-----------------+---------+----------------+
| | | Other | | | | | | | 149 | | 65 |
+-----+---+-----------------------------------------+-----------------------+-----+----------------------+--+--------+-----+-----------------+---------+----------------+
| | | | | | | | | | | | 230 | | 94 |
+-----+---+---------+---------+---------------------+-----------------------+-----+----------------------+--+--------+-----+-----------------+---------+----------------+
| | | | | | | | | | | | | | |
+-----+---+---------+---------+---------------------+-----------------------+-----+----------------------+--+--------+-----+-----------------+---------+----------------+
| 6. | | DIRECTORS | | | | | | | | | |
+-----+---+-----------------------------------------+-----------------------+-----+----------------------+--+--------+-----+-----------------+---------+----------------+
| | | | | | | | | | | | 2008 | | 2007 |
+-----+---+---------+---------+---------------------+-----------------------+-----+----------------------+--+--------+-----+-----------------+---------+----------------+
| | | | | | | | | | | | GBP | | GBP |
+-----+---+---------+---------+---------------------+-----------------------+-----+----------------------+--+--------+-----+-----------------+---------+----------------+
| | | | | | | | | | | | | | |
+-----+---+---------+---------+---------------------+-----------------------+-----+----------------------+--+--------+-----+-----------------+---------+----------------+
| | | Emoluments - executive | | | | | | | 10,000 | | 10,000 |
+-----+---+-----------------------------------------+-----------------------+-----+----------------------+--+--------+-----+-----------------+---------+----------------+
| | | Emoluments - non-executive | | | | | | | 13,100 | | 15,000 |
+-----+---+-----------------------------------------+-----------------------+-----+----------------------+--+--------+-----+-----------------+---------+----------------+
| | | | | | | | | | | | 23,100 | | 25,000 |
+-----+---+---------+---------+---------------------+-----------------------+-----+----------------------+--+--------+-----+-----------------+---------+----------------+
| | | | | | | | | | | | | | |
+-----+---+---------+---------+---------------------+-----------------------+-----+----------------------+--+--------+-----+-----------------+---------+----------------+
| | | All directors' emoluments are payable to the individual directors. In the prior year, the above total included |
+-----+---+-----------------------------------------------------------------------------------------------------------------------------------------------------------+
| | | emoluments earned by J Michael Spittal/James Wolfson, which were chargeable by their employers, Trident |
+-----+---+-----------------------------------------------------------------------------------------------------------------------------------------------------------+
| | | Trust Company Limited, in the sums of GBP 3,500. | | | | | | | |
+-----+---+-----------------------------------------------------------------------+----------------------+--+--------+-----+-----------------+---------+----------------+
| | | | | | | | | | | | | | |
+-----+---+---------+---------+---------------------+-----------------------+-----+----------------------+--+--------+-----+-----------------+---------+----------------+
| 7. | | FINANCE COSTS | | | | | | | | | |
+-----+---+-----------------------------------------+-----------------------+-----+----------------------+--+--------+-----+-----------------+---------+----------------+
| | | | | | | | | | | | 2008 | | 2007 |
+-----+---+---------+---------+---------------------+-----------------------+-----+----------------------+--+--------+-----+-----------------+---------+----------------+
| | | | | | | | | | | | GBP | | GBP |
+-----+---+---------+---------+---------------------+-----------------------+-----+----------------------+--+--------+-----+-----------------+---------+----------------+
| | | | | | | | | | | | | | |
+-----+---+---------+---------+---------------------+-----------------------+-----+----------------------+--+--------+-----+-----------------+---------+----------------+
| | | Interest on bank loans | | | | | | | 14,902 | | 8,615 |
+-----+---+-----------------------------------------+-----------------------+-----+----------------------+--+--------+-----+-----------------+---------+----------------+
| | | | | | | | | | | | | | |
+-----+---+---------+---------+---------------------+-----------------------+-----+----------------------+--+--------+-----+-----------------+---------+----------------+
| 8. | | TAXATION | | | | | | | | | |
+-----+---+-----------------------------------------+-----------------------+-----+----------------------+--+--------+-----+-----------------+---------+----------------+
| | | The taxation credit of GBP45,365 (2007: charge GBP40,579) represents an exempt taxation charge of GBP600 (2007: GBP600) arising in Jersey and |
| | | a credit of GBP44,765 (2007: charge GBP39,979) income tax arising in the People's Republic of China ('PRC'). The Group's subsidiary companies |
| | | qualify as foreign investment production enterprises and are established in a technological economic development zone. Accordingly the |
| | | applicable tax rates are Enterprises Income tax of 24% (reduced by 50%) and a local tax of 3% (reduced by 50%). The newly revised Enterprises |
| | | Income Tax Law of the People's Republic of China became effective on 1 January 2008. For Jinzhou Wonder Packing Machinery Co., Ltd the income |
| | | tax rate changes to 25% with effect from 1 January 2008. For Jinzhou Wonder Equipment Machinery Co., Ltd the effective rate of tax for 2008 is |
| | | 12.5% until 1 January 2009 when its rate will also become 25%. For Jinzhou Wonder Mould Manufacturing Co., Ltd the income tax rate is 25% with |
| | | effect from 1 January 2008. |
+-----+---+-----------------------------------------------------------------------------------------------------------------------------------------------------------+
| | | | | | | | | | | | 2008 | | 2007 |
+-----+---+---------+---------+---------------------+-----------------------+-----+----------------------+--+--------+-----+-----------------+---------+----------------+
| | | | | | | | | | | | GBP | | GBP |
+-----+---+---------+---------+---------------------+-----------------------+-----+----------------------+--+--------+-----+-----------------+---------+----------------+
| | | Income tax expense is as follows: | | | | | | | | |
+-----+---+-----------------------------------------------------------------+-----+----------------------+--+--------+-----+-----------------+---------+----------------+
| | | | | | | | | | | | | | |
+-----+---+---------+---------+---------------------+-----------------------+-----+----------------------+--+--------+-----+-----------------+---------+----------------+
| | | Current income tax | | | | | | | (10,367) | | 46,947 |
+-----+---+-----------------------------------------+-----------------------+-----+----------------------+--+--------+-----+-----------------+---------+----------------+
| | | Deferred income tax - accelerated capital allowances | | | | (34,998) | | (6,368) |
+-----+---+----------------------------------------------------------------------------------------------+--+--------+-----+-----------------+---------+----------------+
| | | | | | | | | | | | (45,365) | | 40,579 |
+-----+---+---------+---------+---------------------+-----------------------+-----+----------------------+--+--------+-----+-----------------+---------+----------------+
| | | Deferred tax assets | | | | | | | | |
+-----+---+-----------------------------------------------------------------+-----+----------------------+--+--------+-----+-----------------+---------+----------------+
| | | At 1 January 2008 | | | | | | 13,823 | | 6,738 |
+-----+---+-----------------------------------------------------------------+-----+----------------------+--+--------+-----+-----------------+---------+----------------+
| | | Transfer to income statement | | | | | | | 34,998 | | 6,368 |
+-----+---+-----------------------------------------+-----------------------+-----+----------------------+--+--------+-----+-----------------+---------+----------------+
| | | Exchange differences | | | | | | | 16,726 | | 717 |
+-----+---+-----------------------------------------+-----------------------+-----+----------------------+--+--------+-----+-----------------+---------+----------------+
| | | At 31 December 2008 | | | | | | | 65,547 | | 13,823 |
+-----+---+-----------------------------------------+-----------------------+-----+----------------------+--+--------+-----+-----------------+---------+----------------+
| | | | | | | | | | | |
+-----+---+-----------------------------------------------------------------+-----+----------------------+--+--------+-----+-----------------+---------+----------------+
| | | Tax effect of temporary difference arising from the different treatment | | | | |
+-----+---+----------------------------------------------------------------------------------------------------------+-----+-----------------+---------+----------------+
| | | of certain expenditure for tax and financial reporting purposes | | 65,547 | | 13,823 |
+-----+---+----------------------------------------------------------------------------------------------------------+-----+-----------------+---------+----------------+
| | | | | | | | | | | | | | |
+-----+---+---------+---------+---------------------+-----------------------+-----+----------------------+--+--------+-----+-----------------+---------+----------------+
| | | Reconciliation of effective tax rates | | | | | | | | |
+-----+---+-----------------------------------------------------------------+-----+----------------------+--+--------+-----+-----------------+---------+----------------+
| | | Profit before tax | | | | | | | 128,667 | | 306,951 |
+-----+---+-----------------------------------------+-----------------------+-----+----------------------+--+--------+-----+-----------------+---------+----------------+
| | | | | | | | | | | | | | |
+-----+---+---------+---------+---------------------+-----------------------+-----+----------------------+--+--------+-----+-----------------+---------+----------------+
| | | Tax on profits at the prevailing rate applicable | | | | | | 22,059 | | 41,438 |
+-----+---+-----------------------------------------------------------------+-----+----------------------+--+--------+-----+-----------------+---------+----------------+
| | | Charge for exempt company status | | | | | | 600 | | 600 |
+-----+---+-----------------------------------------------------------------+-----+----------------------+--+--------+-----+-----------------+---------+----------------+
| | | Expenses not deductible for tax | | | | | | | 5,865 | | 10,511 |
+-----+---+-----------------------------------------+-----------------------+-----+----------------------+--+--------+-----+-----------------+---------+----------------+
| | | Income exempted from tax | | | | | | | (15,757) | | (12,400) |
+-----+---+-----------------------------------------+-----------------------+-----+----------------------+--+--------+-----+-----------------+---------+----------------+
| | | Effect of different tax rates of subsidiaries | | | | | | (34,998) | | - |
+-----+---+-----------------------------------------------------------------+-----+----------------------+--+--------+-----+-----------------+---------+----------------+
| | | Others | | | | | | | (23,134) | | 430 |
+-----+---+-----------------------------------------+-----------------------+-----+----------------------+--+--------+-----+-----------------+---------+----------------+
| | | Tax (credit)/expense for the year | | | | | | (45,365) | | 40,579 |
+-----+---+-----------------------------------------------------------------+-----+----------------------+--+--------+-----+-----------------+---------+----------------+
| | | | | | | | | | | | | | |
+-----+---+---------+---------+---------------------+-----------------------+-----+----------------------+--+--------+-----+-----------------+---------+----------------+
| 9. | | EARNINGS PER SHARE | | | | | | | | | |
+-----+---+-----------------------------------------+-----------------------+-----+----------------------+--+--------+-----+-----------------+---------+----------------+
| | | The earnings per share is based on the profit for the year of GBP171,374 (2007: GBP266,372) and on the weighted average number of ordinary |
| | | shares of 18,000,000 (2007: 16,164,384) in issue for the year. |
+-----+---+-----------------------------------------------------------------------------------------------------------------------------------------------------------+
| | | The weighted average number of ordinary shares used in the calculation of earnings per share has been derived as follows: |
+-----+---+-----------------------------------------------------------------------------------------------------------------------------------------------------------+
| | | | | | | | | | | | 2008 | | 2007 |
+-----+---+---------+---------+---------------------+-----------------------+-----+----------------------+--+--------+-----+-----------------+---------+----------------+
| | | | | | | | | | | | | | |
+-----+---+---------+---------+---------------------+-----------------------+-----+----------------------+--+--------+-----+-----------------+---------+----------------+
| | | Weighted average number of ordinary shares - basic | | | | 18,000,000 | | 16,164,384 |
+-----+---+----------------------------------------------------------------------------------------------+--+--------+-----+-----------------+---------+----------------+
| | | Dilutive effect of warrants | | | | | | | - | | - |
+-----+---+-----------------------------------------+-----------------------+-----+----------------------+--+--------+-----+-----------------+---------+----------------+
| | | | | | | | | | | | | | |
+-----+---+---------+---------+---------------------+-----------------------+-----+----------------------+--+--------+-----+-----------------+---------+----------------+
| | | Weighted average number of ordinary shares - diluted | | | | 18,000,000 | | 16,164,384 |
+-----+---+----------------------------------------------------------------------------------------------+--+--------+-----+-----------------+---------+----------------+
| | | The Company's share price at 31 December 2008 was GBP0.07 (2007:GBP0.11), whereas warrants are excercisable at GBP0.24. Therefore the warrants |
| | | have no dilutive effect at 31 December 2008. |
+-----+---+-----------------------------------------------------------------------------------------------------------------------------------------------------------+
| | | | | | | | | | | | | | |
+-----+---+---------+---------+---------------------+-----------------------+-----+----------------------+--+--------+-----+-----------------+---------+----------------+
| 10 | | DIVIDENDS | | | | | | | | | |
+-----+---+-----------------------------------------+-----------------------+-----+----------------------+--+--------+-----+-----------------+---------+----------------+
| | | The Directors do not propose a dividend in respect of the year ended 31 December 2008 (2007: nil). |
+-----+---+-----------------------------------------------------------------------------------------------------------------------------------------------------------+
| | | | | | | | | | | | | | |
+-----+---+---------+---------+---------------------+-----------------------+-----+----------------------+--+--------+-----+-----------------+---------+----------------+
| 11. | | RESULTS FOR THE FINANCIAL YEAR | | | | | | | |
+-------+-----+-----------------------------------------------+---------------------+--+----------------------+--+----------------------+--+----------------------+
| | | In accordance with Jersey practice the Company has not presented its own income statement in these financial statements. The Company |
| | | acts as a holding company and generated a profit of GBP66,434 (2007: profit of GBP 439,374 as restated) after taxation for the year. |
+-------+-----+---------------------------------------------------------------------------------------------------------------------------------------------------+
| | | | | | | | | | | | | | |
+-------+-----+---------+---------------+-------+----------+--+---------------------+--+----------------------+--+----------------------+--+----------------------+
| 12. | | INVESTMENTS | | | | | | | | | |
+-------+-----+---------------------------------+----------+--+---------------------+--+----------------------+--+----------------------+--+----------------------+
| | | COMPANY | | | | | Shares in Jinzhou | | Shares in Jinzhou | | Total |
| | | | | | | | Wonder Packing | | Wonder Machinery | | |
| | | | | | | | Machinery Co Ltd | | Equipment Co Ltd | | |
+-------+-----+---------------------------------+----------+--+---------------------+--+----------------------+--+----------------------+--+----------------------+
| | | | | | | | | | 'as restated' | | | | |
+-------+-----+---------+---------------+-------+----------+--+---------------------+--+----------------------+--+----------------------+--+----------------------+
| | | | | | | | | | GBP | | GBP | | GBP |
+-------+-----+---------+---------------+-------+----------+--+---------------------+--+----------------------+--+----------------------+--+----------------------+
| | | COST | | | | | | | | | |
+-------+-----+---------------------------------+----------+--+---------------------+--+----------------------+--+----------------------+--+----------------------+
| | | At 1 January 2008 | | | | | 1,129,537 | | 1,502,500 | | 2,632,037 |
+-------+-----+---------------------------------+----------+--+---------------------+--+----------------------+--+----------------------+--+----------------------+
| | | Additions | | | | | - | | 152,633 | | 152,633 |
+-------+-----+---------------------------------+----------+--+---------------------+--+----------------------+--+----------------------+--+----------------------+
| | | At 31 December 2008 | | | | | 1,129,537 | | 1,655,133 | | 2,784,670 |
+-------+-----+---------------------------------+----------+--+---------------------+--+----------------------+--+----------------------+--+----------------------+
| | | | | | | | | | | | | | |
+-------+-----+---------+---------------+-------+----------+--+---------------------+--+----------------------+--+----------------------+--+----------------------+
| | | At 1 January 2007 | | | | | 639,942 | | - | | 639,942 |
+-------+-----+---------------------------------+----------+--+---------------------+--+----------------------+--+----------------------+--+----------------------+
| | | | | | | | | | | | | | |
+-------+-----+---------+---------------+-------+----------+--+---------------------+--+----------------------+--+----------------------+--+----------------------+
| | | Additions - as previously reported | | | | - | | 1,502,500 | | 1,502,500 |
+-------+-----+--------------------------------------------+--+---------------------+--+----------------------+--+----------------------+--+----------------------+
| | | Correction of error | | | | | 489,595 | | | | 489,595 |
+-------+-----+---------------------------------+----------+--+---------------------+--+----------------------+--+----------------------+--+----------------------+
| | | At 31 December 2007 | | | | | 1,129,537 | | 1,502,500 | | 2,632,037 |
+-------+-----+---------------------------------+----------+--+---------------------+--+----------------------+--+----------------------+--+----------------------+
| | | | | | | | | | | | | | |
+-------+-----+---------+---------------+-------+----------+--+---------------------+--+----------------------+--+----------------------+--+----------------------+
| | | At 1 January 2006 | | | | | 639,942 | | - | | 639,942 |
+-------+-----+---------------------------------+----------+--+---------------------+--+----------------------+--+----------------------+--+----------------------+
| | | Additions | | | | | - | | - | | - |
+-------+-----+---------------------------------+----------+--+---------------------+--+----------------------+--+----------------------+--+----------------------+
| | | At 31 December 2006 | | | | | 639,942 | | - | | 639,942 |
+-------+-----+---------------------------------+----------+--+---------------------+--+----------------------+--+----------------------+--+----------------------+
| | | | | | | | | | | | | | |
+-------+-----+---------+---------------+-------+----------+--+---------------------+--+----------------------+--+----------------------+--+----------------------+
| | | On 27 February 2007 the Company acquired 100% of the registered capital of Jinzhou Wonder Machinery Equipment Co. Ltd ("WE") for a |
| | | consideration of 5,500,000 Ordinary shares in the Company and GBP100,000 in cash. WE is incorporated in the People's Republic of |
| | | China. The nature of its business is the manufacture and sale of bespoke machinery and associated spare parts. The registered capital |
| | | of WE was in 2008 increased by the reinvestment of a dividend amounting to RMB 2,096,610 (GBP152,633). |
+-------+-----+---------------------------------------------------------------------------------------------------------------------------------------------------+
| | | Jinzhou Wonder Packing Machinery Co. Ltd ("WP") is a wholly owned subsidiary of the Company and is incorporated in the People's |
| | | Republic of China. The nature of its business is the manufacture and sale of packaging machines and associated spare parts. The |
| | | registered capital of WP was in 2007 increased by the reinvestment of a dividend amounting to RMB 7,516,600(GBP489,595). |
+-------+-----+---------------------------------------------------------------------------------------------------------------------------------------------------+
| | | In 2007 amounts standing to the credit of reserves amounting to GBP489,595 were converted into share capital in the Company's |
| | | subsidiary, Jinzhou Wonder Packing Machinery Co Ltd. No movement in funds was involved. |
+-------+-----+---------------------------------------------------------------------------------------------------------------------------------------------------+
| | | Error in Prior Period |
+-------+-----+---------------------------------------------------------------------------------------------------------------------------------------------------+
| | | The capitalisation issue received from Jinzhou Wonder Packing Machinery Co Ltd took place during the 2007 financial year. This |
| | | transaction was however not accounted for in the parent company. Retained loss and Investments held by the parent company have thus |
| | | been restated to correct this error. There is no effect from this error on consolidation and no effect on the earnings per share |
| | | previously reported. |
+-------+-----+---------------------------------------------------------------------------------------------------------------------------------------------------+
| | | The effect of this correction is as follows: (only the 2007 financial year is affected) |
+-------+-----+---------------------------------------------------------------------------------------------------------------------------------------------------+
| | | | | | | | | | | | | | 2007 |
+-------+-----+---------+---------------+-------+----------+--+---------------------+--+----------------------+--+----------------------+--+----------------------+
| | | | | | | | | | | | | | GBP |
+-------+-----+---------+---------------+-------+----------+--+---------------------+--+----------------------+--+----------------------+--+----------------------+
| | | Increase in carrying | | | | | | | | | 489,595 |
| | | amount of Investments | | | | | | | | | |
+-------+-----+---------------------------------+----------+--+---------------------+--+----------------------+--+----------------------+--+----------------------+
| | | Increase in profit before | | | | | | | | | 489,595 |
| | | taxation | | | | | | | | | |
+-------+-----+---------------------------------+----------+--+---------------------+--+----------------------+--+----------------------+--+----------------------+
| | | | | | | | | | | | | | |
+-------+-----+---------+---------------+-------+----------+--+---------------------+--+----------------------+--+----------------------+--+----------------------+
| 13. | | PROPERTY, PLANT AND EQUIPMENT | | | | | | | |
+-------+-----+---------------------------------------------------------------+------------+-----+---------------------+----------+--------------+-------+----------------+
| | | GROUP | | | | | | | | | |
+-------+-----+-----------------------------------------+-----------+---------+------------+-----+---------------------+----------+--------------+-------+----------------+
| | | | | | Buildings | | Machinery | | Motor vehicles | | Office | | Total |
| | | | | | and plant | | | | | | equipment | | |
+-------+-----+-----------+---------------+-------------+-----------+---------+------------+-----+---------------------+----------+--------------+-------+----------------+
| | | | | | GBP | | GBP | | GBP | | GBP | | GBP |
+-------+-----+-----------+---------------+-------------+-----------+---------+------------+-----+---------------------+----------+--------------+-------+----------------+
| | | 2008 | | | | | | | | | | |
+-------+-----+---------------------------+-------------+-----------+---------+------------+-----+---------------------+----------+--------------+-------+----------------+
| | | COST | | | | | | | | | |
+-------+-----+-----------------------------------------+-----------+---------+------------+-----+---------------------+----------+--------------+-------+----------------+
| | | At 1 January 2008 | 491,162 | | 306,361 | | 84,002 | | 41,639 | | 923,164 |
+-------+-----+-----------------------------------------+-----------+---------+------------+-----+---------------------+----------+--------------+-------+----------------+
| | | Exchange adjustment | 223,194 | | 142,954 | | 51,526 | | 26,459 | | 444,133 |
+-------+-----+-----------------------------------------+-----------+---------+------------+-----+---------------------+----------+--------------+-------+----------------+
| | | Additions | 2,665 | | 96,912 | | 14,955 | | 8,604 | | 123,136 |
+-------+-----+-----------------------------------------+-----------+---------+------------+-----+---------------------+----------+--------------+-------+----------------+
| | | Disposals | - | | (32,715) | | (8,264) | | (1,341) | | (42,320) |
+-------+-----+-----------------------------------------+-----------+---------+------------+-----+---------------------+----------+--------------+-------+----------------+
| | | At 31 December 2008 | 717,021 | | 513,512 | | 142,219 | | 75,361 | | 1,448,113 |
+-------+-----+-----------------------------------------+-----------+---------+------------+-----+---------------------+----------+--------------+-------+----------------+
| | | DEPRECIATION | | | | | | | | | |
+-------+-----+-----------------------------------------+-----------+---------+------------+-----+---------------------+----------+--------------+-------+----------------+
| | | At 1 January 2008 | (92,329) | | (80,304) | | (33,634) | | (21,141) | | (227,408) |
+-------+-----+-----------------------------------------+-----------+---------+------------+-----+---------------------+----------+--------------+-------+----------------+
| | | Exchange adjustment | (41,876) | | (50,738) | | (25,915) | | (15,235) | | (133,764) |
+-------+-----+-----------------------------------------+-----------+---------+------------+-----+---------------------+----------+--------------+-------+----------------+
| | | Charge for the year | (27,529) | | (45,445) | | (16,181) | | (10,161) | | (99,316) |
+-------+-----+-----------------------------------------+-----------+---------+------------+-----+---------------------+----------+--------------+-------+----------------+
| | | Disposals | - | | 5,655 | | 4,780 | | 1,726 | | 12,161 |
+-------+-----+-----------------------------------------+-----------+---------+------------+-----+---------------------+----------+--------------+-------+----------------+
| | | At 31 December 2008 | (161,734) | | (170,832) | | (70,950) | | (44,811) | | (448,327) |
+-------+-----+-----------------------------------------+-----------+---------+------------+-----+---------------------+----------+--------------+-------+----------------+
| | | | | | | | | | | | | | |
+-------+-----+-----------+---------------+-------------+-----------+---------+------------+-----+---------------------+----------+--------------+-------+----------------+
| | | NET BOOK VALUE | | | | | | | | | |
+-------+-----+-----------------------------------------+-----------+---------+------------+-----+---------------------+----------+--------------+-------+----------------+
| | | At 31 December 2008 | 555,287 | | 342,680 | | 71,269 | | 30,550 | | 999,786 |
+-------+-----+-----------------------------------------+-----------+---------+------------+-----+---------------------+----------+--------------+-------+----------------+
| | | 2007 | | | | | | | | | | |
+-------+-----+---------------------------+-------------+-----------+---------+------------+-----+---------------------+----------+--------------+-------+----------------+
| | | COST | | | | | | | | | |
+-------+-----+-----------------------------------------+-----------+---------+------------+-----+---------------------+----------+--------------+-------+----------------+
| | | At 1 January 2007 | 465,121 | | 167,154 | | 65,393 | | 26,082 | | 723,750 |
+-------+-----+-----------------------------------------+-----------+---------+------------+-----+---------------------+----------+--------------+-------+----------------+
| | | Acquisition of subsidiary | - | | 74,459 | | 13,936 | | 7,280 | | 95,675 |
+-------+-----+-----------------------------------------+-----------+---------+------------+-----+---------------------+----------+--------------+-------+----------------+
| | | Exchange adjustment | 26,041 | | 14,020 | | 4,673 | | 2,338 | | 47,072 |
+-------+-----+-----------------------------------------+-----------+---------+------------+-----+---------------------+----------+--------------+-------+----------------+
| | | Additions | - | | 54,065 | | - | | 6,182 | | 60,247 |
+-------+-----+-----------------------------------------+-----------+---------+------------+-----+---------------------+----------+--------------+-------+----------------+
| | | Disposals | - | | (3,337) | | - | | (243) | | (3,580) |
+-------+-----+-----------------------------------------+-----------+---------+------------+-----+---------------------+----------+--------------+-------+----------------+
| | | At 31 December 2007 | 491,162 | | 306,361 | | 84,002 | | 41,639 | | 923,164 |
+-------+-----+-----------------------------------------+-----------+---------+------------+-----+---------------------+----------+--------------+-------+----------------+
| | | DEPRECIATION | | | | | | | | | |
+-------+-----+-----------------------------------------+-----------+---------+------------+-----+---------------------+----------+--------------+-------+----------------+
| | | At 1 January 2007 | (69,719) | | (56,034) | | (22,561) | | (15,325) | | (163,639) |
+-------+-----+-----------------------------------------+-----------+---------+------------+-----+---------------------+----------+--------------+-------+----------------+
| | | Exchange adjustment | (3,903) | | (3,610) | | (1,613) | | (1,052) | | (10,178) |
+-------+-----+-----------------------------------------+-----------+---------+------------+-----+---------------------+----------+--------------+-------+----------------+
| | | Charge for the period | (18,707) | | (23,362) | | (9,460) | | (5,449) | | (56,978) |
+-------+-----+-----------------------------------------+-----------+---------+------------+-----+---------------------+----------+--------------+-------+----------------+
| | | Disposals | - | | 2,702 | | - | | 685 | | 3,387 |
+-------+-----+-----------------------------------------+-----------+---------+------------+-----+---------------------+----------+--------------+-------+----------------+
| | | At 31 December 2007 | (92,329) | | (80,304) | | (33,634) | | (21,141) | | (227,408) |
+-------+-----+-----------------------------------------+-----------+---------+------------+-----+---------------------+----------+--------------+-------+----------------+
| | | | | | | | | | | | | | |
+-------+-----+-----------+---------------+-------------+-----------+---------+------------+-----+---------------------+----------+--------------+-------+----------------+
| | | NET BOOK VALUE | | | | | | | | | |
+-------+-----+-----------------------------------------+-----------+---------+------------+-----+---------------------+----------+--------------+-------+----------------+
| | | At 31 December 2007 | 398,833 | | 226,057 | | 50,368 | | 20,498 | | 695,756 |
+-------+-----+-----------------------------------------+-----------+---------+------------+-----+---------------------+----------+--------------+-------+----------------+
| | | | | | | | | | | | | | |
+-------+-----+-----------+---------------+-------------+-----------+---------+------------+-----+---------------------+----------+--------------+-------+----------------+
| 14. | | INTANGIBLE ASSETS | | | | | | | | | |
+-------+-----+-----------------------------------------+-----------+---------+------------+-----+---------------------+----------+--------------+-------+----------------+
| | | GROUP | | | | | | | | | |
+-------+-----+-----------------------------------------+-----------+---------+------------+-----+---------------------+----------+--------------+-------+----------------+
| | | | | | | | Goodwill | | Land use right | | Patent | | Total |
| | | | | | | | | | | | rights | | |
+-------+-----+-----------+---------------+-------------+-----------+---------+------------+-----+---------------------+----------+--------------+-------+----------------+
| | | | | | | | GBP | | GBP | | GBP | | GBP |
+-------+-----+-----------+---------------+-------------+-----------+---------+------------+-----+---------------------+----------+--------------+-------+----------------+
| | | 2008 | | | | | | | | | | |
+-------+-----+---------------------------+-------------+-----------+---------+------------+-----+---------------------+----------+--------------+-------+----------------+
| | | COST | | | | | | | | | |
+-------+-----+-----------------------------------------+-----------+---------+------------+-----+---------------------+----------+--------------+-------+----------------+
| | | At 1 January 2008 | | | 1,356,705 | | 74,479 | | 1,036 | | 1,432,220 |
+-------+-----+-----------------------------------------+-----------+---------+------------+-----+---------------------+----------+--------------+-------+----------------+
| | | Exchange adjustment | | | - | | 20,540 | | (750) | | 19,790 |
+-------+-----+-----------------------------------------+-----------+---------+------------+-----+---------------------+----------+--------------+-------+----------------+
| | | At 31 December 2008 | | | 1,356,705 | | 95,019 | | 286 | | 1,452,010 |
+-------+-----+-----------------------------------------+-----------+---------+------------+-----+---------------------+----------+--------------+-------+----------------+
| | | AMORTISATION | | | | | | | | | |
+-------+-----+-----------------------------------------+-----------+---------+------------+-----+---------------------+----------+--------------+-------+----------------+
| | | At 1 January 2008 | | | - | | (9,006) | | (839) | | (9,845) |
+-------+-----+-----------------------------------------+-----------+---------+------------+-----+---------------------+----------+--------------+-------+----------------+
| | | Exchange adjustment | | | - | | 9,006 | | 839 | | 9,845 |
+-------+-----+-----------------------------------------+-----------+---------+------------+-----+---------------------+----------+--------------+-------+----------------+
| | | Charge for the year | | | - | | (2,571) | | (286) | | (2,857) |
+-------+-----+-----------------------------------------+-----------+---------+------------+-----+---------------------+----------+--------------+-------+----------------+
| | | At 31 December 2008 | | | - | | (2,571) | | (286) | | (2,857) |
+-------+-----+-----------------------------------------+-----------+---------+------------+-----+---------------------+----------+--------------+-------+----------------+
| | | | | | | | | | | | | | |
+-------+-----+-----------+---------------+-------------+-----------+---------+------------+-----+---------------------+----------+--------------+-------+----------------+
| | | NET BOOK VALUE | | | | | | | | | |
+-------+-----+-----------------------------------------+-----------+---------+------------+-----+---------------------+----------+--------------+-------+----------------+
| | | At 31 December 2008 | | | 1,356,705 | | 92,448 | | - | | 1,449,153 |
+-------+-----+-----------------------------------------+-----------+---------+------------+-----+---------------------+----------+--------------+-------+----------------+
| | | 2007 | | | | | | | | | | |
+-------+-----+---------------------------+-------------+-----------+---------+------------+-----+---------------------+----------+--------------+-------+----------------+
| | | COST | | | | | | | | | |
+-------+-----+-----------------------------------------+-----------+---------+------------+-----+---------------------+----------+--------------+-------+----------------+
| | | At 1 January 2007 | | | - | | 70,530 | | 982 | | 71,512 |
+-------+-----+-----------------------------------------+-----------+---------+------------+-----+---------------------+----------+--------------+-------+----------------+
| | | Arising on acquisition of Jinzhou Wonder | | | | | | | | |
+-------+-----+-----------------------------------------------------+---------+------------+-----+---------------------+----------+--------------+-------+----------------+
| | | | Machinery Equipment | | | 1,356,705 | | - | | - | | 1,356,705 |
| | | | Co Ltd | | | | | | | | | |
+-------+-----+-----------+-----------------------------+-----------+---------+------------+-----+---------------------+----------+--------------+-------+----------------+
| | | Exchange adjustment | | | - | | 3,949 | | 54 | | 4,003 |
+-------+-----+-----------------------------------------+-----------+---------+------------+-----+---------------------+----------+--------------+-------+----------------+
| | | At 31 December 2007 | | | 1,356,705 | | 74,479 | | 1,036 | | 1,432,220 |
+-------+-----+-----------------------------------------+-----------+---------+------------+-----+---------------------+----------+--------------+-------+----------------+
| | | AMORTISATION | | | | | | | | | |
+-------+-----+-----------------------------------------+-----------+---------+------------+-----+---------------------+----------+--------------+-------+----------------+
| | | At 1 January 2007 | | | - | | (6,851) | | (599) | | (7,450) |
+-------+-----+-----------------------------------------+-----------+---------+------------+-----+---------------------+----------+--------------+-------+----------------+
| | | Exchange adjustment | | | - | | (383) | | (33) | | (416) |
+-------+-----+-----------------------------------------+-----------+---------+------------+-----+---------------------+----------+--------------+-------+----------------+
| | | Charge for the year | | | - | | (1,772) | | (207) | | (1,979) |
+-------+-----+-----------------------------------------+-----------+---------+------------+-----+---------------------+----------+--------------+-------+----------------+
| | | At 31 December 2007 | | | - | | (9,006) | | (839) | | (9,845) |
+-------+-----+-----------------------------------------+-----------+---------+------------+-----+---------------------+----------+--------------+-------+----------------+
| | | | | | | | | | | | | | |
+-------+-----+-----------+---------------+-------------+-----------+---------+------------+-----+---------------------+----------+--------------+-------+----------------+
| | | NET BOOK VALUE | | | | | | | | | |
+-------+-----+-----------------------------------------+-----------+---------+------------+-----+---------------------+----------+--------------+-------+----------------+
| | | At 31 December 2007 | | | 1,356,705 | | 65,473 | | 197 | | 1,422,375 |
+-------+-----+-----------------------------------------+-----------+---------+------------+-----+---------------------+----------+--------------+-------+----------------+
| | | The recoverable amount of the bespoke engineering segment has been determined based on the value in use calculation using cash flow |
| | | projections based on financial budgets approved by senior management covering a two year period. The pre-tax discount rate applied to cash |
| | | flow projections is 12.0% and cash flows beyond the two year period are extrapolated using a 6.10% growth rate, and gross margins based on |
| | | previously achieved levels. |
+-------+-----+-----------------------------------------------------------------------------------------------------------------------------------------------------------+
| | | | | | | | | | | | | | |
+-------+-----+-----------+---------------+-------------+-----------+---------+------------+-----+---------------------+----------+--------------+-------+----------------+
| 15. | | INVENTORIES | | | | | | | | | |
+-------+-----+-----------------------------------------+-----------+---------+------------+-----+---------------------+----------+--------------+-------+----------------+
| | | GROUP | | | | | | | | | |
+-------+-----+-----------------------------------------+-----------+---------+------------+-----+---------------------+----------+--------------+-------+----------------+
| | | | | | | | | | | | 2008 | | 2007 |
+-------+-----+-----------+---------------+-------------+-----------+---------+------------+-----+---------------------+----------+--------------+-------+----------------+
| | | | | | | | | | | | GBP | | GBP |
+-------+-----+-----------+---------------+-------------+-----------+---------+------------+-----+---------------------+----------+--------------+-------+----------------+
| | | Raw materials | | | | | | | 266,046 | | 206,999 |
+-------+-----+-----------------------------------------+-----------+---------+------------+-----+---------------------+----------+--------------+-------+----------------+
| | | Work in progress | | | | | | | 1,197,725 | | 454,110 |
+-------+-----+-----------------------------------------+-----------+---------+------------+-----+---------------------+----------+--------------+-------+----------------+
| | | Finished goods | | | | | | | 178,519 | | 22,953 |
+-------+-----+-----------------------------------------+-----------+---------+------------+-----+---------------------+----------+--------------+-------+----------------+
| | | | | | | | | | | | | | |
+-------+-----+-----------+---------------+-------------+-----------+---------+------------+-----+---------------------+----------+--------------+-------+----------------+
| | | | | | | | | | | | 1,642,290 | | 684,062 |
+-------+-----+-----------+---------------+-------------+-----------+---------+------------+-----+---------------------+----------+--------------+-------+----------------+
| | | | | | | | | | | | | | |
+-------+-----+-----------+---------------+-------------+-----------+---------+------------+-----+---------------------+----------+--------------+-------+----------------+
| | | All inventories are in a good condition and can be sold in the normal business operating process. No finished goods in the current year have |
| | | been carried at fair value less costs to sell (2007: GBP 22,953) |
+-------+-----+-----------------------------------------------------------------------------------------------------------------------------------------------------------+
| 16. | | TRADE AND OTHER RECEIVABLES | | | | | | | | |
+-----------+---------+-----------------------------------------+-------+----------------------+-------+-----------------------+------+--------------------+----+---------------+
| | | | | | | | | | | | | | |
+-----------+---------+---------+-------------+---+-------------+-------+----------------------+-------+-----------------------+------+--------------------+----+---------------+
| | | | | | | | The Group | | The Company |
+-----------+---------+---------+-------------+---+-------------+-------+------------------------------------------------------+------+-----------------------------------------+
| | | | | | | | 2008 | | 2007 | | 2008 | | 2007 |
+-----------+---------+---------+-------------+---+-------------+-------+----------------------+-------+-----------------------+------+--------------------+----+---------------+
| | | | | | | | GBP | | GBP | | GBP | | GBP |
+-----------+---------+---------+-------------+---+-------------+-------+----------------------+-------+-----------------------+------+--------------------+----+---------------+
| | | | Trade | | | 1,632,340 | | 832,148 | | - | | - |
| | | | receivables | | | | | | | | | |
+-----------+---------+---------+-----------------+-------------+-------+----------------------+-------+-----------------------+------+--------------------+----+---------------+
| | | | Allowance for doubtful | | (233,576) | | (92,555) | | - | | - |
| | | | receivables | | | | | | | | |
+-----------+---------+---------+-------------------------------+-------+----------------------+-------+-----------------------+------+--------------------+----+---------------+
| | | | Trade | | | 1,398,764 | | 739,593 | | - | | - |
| | | | receivables-net | | | | | | | | | |
+-----------+---------+---------+-----------------+-------------+-------+----------------------+-------+-----------------------+------+--------------------+----+---------------+
| | | | Receivable from | | - | | 158,132 | | | | |
| | | | related parties | | | | | | | | |
+-----------+---------+---------+-------------------------------+-------+----------------------+-------+-----------------------+------+--------------------+----+---------------+
| | | | Other | | | 156,642 | | 77,071 | | - | | |
| | | | receivables | | | | | | | | | |
+-----------+---------+---------+-----------------+-------------+-------+----------------------+-------+-----------------------+------+--------------------+----+---------------+
| | | | Prepayments and | | 121,310 | | 16,723 | | 1,188 | | 1,134 |
| | | | accrued income | | | | | | | | |
+-----------+---------+---------+-------------------------------+-------+----------------------+-------+-----------------------+------+--------------------+----+---------------+
| | | | Total financial assets | | 1,676,716 | | 991,519 | | 1,188 | | 1,134 |
| | | | other than cash and | | | | | | | | |
| | | | cash equivalents | | | | | | | | |
| | | | classified as loans | | | | | | | | |
| | | | and other receivables | | | | | | | | |
+-----------+---------+---------+-------------------------------+-------+----------------------+-------+-----------------------+------+--------------------+----+---------------+
| | | | Cash and cash | | 334,666 | | 609,391 | | 1,610 | | 10,873 |
| | | | equivalents | | | | | | | | |
+-----------+---------+---------+-------------------------------+-------+----------------------+-------+-----------------------+------+--------------------+----+---------------+
| | | | Total financial assets | | 2,011,382 | | 1,600,910 | | 2,798 | | 12,007 |
| | | | classified as loans | | | | | | | | |
| | | | and receivables | | | | | | | | |
+-----------+---------+---------+-------------------------------+-------+----------------------+-------+-----------------------+------+--------------------+----+---------------+
| | | | | | | | | | | | | | |
+-----------+---------+---------+-------------+---+-------------+-------+----------------------+-------+-----------------------+------+--------------------+----+---------------+
| | | | The average credit period taken on the sale of goods is 218 days (2007: 136 days). A provision has been made for estimated |
| | | | irrecoverable amounts from the sales of goods and other receivables of GBP 233,576 (2007: GBP92,555). This provision has been |
| | | | determined by reference to past default experience. |
+-----------+---------+---------+-----------------------------------------------------------------------------------------------------------------------------------------------+
| | | | | | | | | | | | | | |
+-----------+---------+---------+-------------+---+-------------+-------+----------------------+-------+-----------------------+------+--------------------+----+---------------+
| | | | The fair values of trade and other receivables classified as loans and receivables are as follows: |
+-----------+---------+---------+-----------------------------------------------------------------------------------------------------------------------------------------------+
| | | | | | | | | | | | | | |
+-----------+---------+---------+-------------+---+-------------+-------+----------------------+-------+-----------------------+------+--------------------+----+---------------+
| | | | | | | | The Group | | The Company |
+-----------+---------+---------+-------------+---+-------------+-------+------------------------------------------------------+------+-----------------------------------------+
| | | | | | | | 2008 | | 2007 | | 2008 | | 2007 |
+-----------+---------+---------+-------------+---+-------------+-------+----------------------+-------+-----------------------+------+--------------------+----+---------------+
| | | | | | | | GBP | | GBP | | GBP | | GBP |
+-----------+---------+---------+-------------+---+-------------+-------+----------------------+-------+-----------------------+------+--------------------+----+---------------+
| | | | Trade receivables | | 1,398,764 | | 739,593 | | - | | - |
+-----------+---------+---------+-------------------------------+-------+----------------------+-------+-----------------------+------+--------------------+----+---------------+
| | | | Receivables from | | - | | 158,132 | | - | | - |
| | | | related parties | | | | | | | | |
+-----------+---------+---------+-------------------------------+-------+----------------------+-------+-----------------------+------+--------------------+----+---------------+
| | | | Other receivables and | | 277,952 | | 93,794 | | 1,188 | | 1,134 |
| | | | prepayments | | | | | | | | |
+-----------+---------+---------+-------------------------------+-------+----------------------+-------+-----------------------+------+--------------------+----+---------------+
| | | | | | | | 1,676,716 | | 991,519 | | 1,188 | | 1,134 |
+-----------+---------+---------+-------------+---+-------------+-------+----------------------+-------+-----------------------+------+--------------------+----+---------------+
| | | | | | | | | | | | | | |
+-----------+---------+---------+-------------+---+-------------+-------+----------------------+-------+-----------------------+------+--------------------+----+---------------+
| | | | The movement of the allowances for doubtful receivables is summarised below: |
+-----------+---------+---------+-----------------------------------------------------------------------------------------------------------------------------------------------+
| | | | | | | | 2008 | | 2007 | | | | |
+-----------+---------+---------+-------------+---+-------------+-------+----------------------+-------+-----------------------+------+--------------------+----+---------------+
| | | | | | | | GBP | | GBP | | | | |
+-----------+---------+---------+-------------+---+-------------+-------+----------------------+-------+-----------------------+------+--------------------+----+---------------+
| | | | Balance at 1 January | | 92,555 | | 50,733 | | | | |
+-----------+---------+---------+-------------------------------+-------+----------------------+-------+-----------------------+------+--------------------+----+---------------+
| | | | Release of allowances | | - | | - | | | | |
+-----------+---------+---------+-------------------------------+-------+----------------------+-------+-----------------------+------+--------------------+----+---------------+
| | | | On acquisition of | | - | | 2,427 | | | | |
| | | | subsidiary | | | | | | | | |
+-----------+---------+---------+-------------------------------+-------+----------------------+-------+-----------------------+------+--------------------+----+---------------+
| | | | Allowance for the year | | 141,021 | | 39,395 | | | | |
+-----------+---------+---------+-------------------------------+-------+----------------------+-------+-----------------------+------+--------------------+----+---------------+
| | | | Balance at 31 December | | 233,576 | | 92,555 | | | | |
+-----------+---------+---------+-------------------------------+-------+----------------------+-------+-----------------------+------+--------------------+----+---------------+
| | | | | | | | | | | | | | |
+-----------+---------+---------+-------------+---+-------------+-------+----------------------+-------+-----------------------+------+--------------------+----+---------------+
| | | | At 31 December 2008 the ageing analysis of trade receivables is as follows: | | |
+-----------+---------+---------+--------------------------------------------------------------------------------------------------------------------------+----+---------------+
| | | | | | | | 2008 | | 2007 | | | | |
+-----------+---------+---------+-------------+---+-------------+-------+----------------------+-------+-----------------------+------+--------------------+----+---------------+
| | | | | | | | GBP | | GBP | | | | |
+-----------+---------+---------+-------------+---+-------------+-------+----------------------+-------+-----------------------+------+--------------------+----+---------------+
| | | | Within 360 days | | 1,393,246 | | 757,059 | | | | |
+-----------+---------+---------+-------------------------------+-------+----------------------+-------+-----------------------+------+--------------------+----+---------------+
| | | | 360 - 720 days | | 174,108 | | 25,941 | | | | |
+-----------+---------+---------+-------------------------------+-------+----------------------+-------+-----------------------+------+--------------------+----+---------------+
| | | | Over 720 days | | 64,986 | | 49,148 | | | | |
+-----------+---------+---------+-------------------------------+-------+----------------------+-------+-----------------------+------+--------------------+----+---------------+
| | | | Balance at 31 December | | 1,632,340 | | 832,148 | | | | |
| | | | 2008 | | | | | | | | |
+-----------+---------+---------+-------------------------------+-------+----------------------+-------+-----------------------+------+--------------------+----+---------------+
| | | | | | | | | | | | | | |
+-----------+---------+---------+-------------+---+-------------+-------+----------------------+-------+-----------------------+------+--------------------+----+---------------+
| | | | | | | | | | | | | |
+-----------+---------+---------+-----------------+-------------+-------+----------------------+-------+-----------------------+------+--------------------+----+---------------+
| 17. | | SHORT-TERM LOAN | | | | | | | | | |
+-----------+---------+---------------------------+-------------+-------+----------------------+-------+-----------------------+------+--------------------+----+---------------+
| | | GROUP | | | | | | 2008 | | 2007 |
+-----------+---------+---------------------------+ +------------------------+-------+-----------------------+------+--------------------+----+---------------+
| | | | | | | | | | | GBP | | GBP |
+-----------+---------+---------+-----------------------+---------+---+------------------------+-------+-----------------------+------+--------------------+----+---------------+
| | | Bank loan | | | | | | | 150,394 | | 69,086 |
+-----------+---------+---------------------------+-------------+-------+----------------------+-------+-----------------------+------+--------------------+----+---------------+
| | | Short term bank loans consist of two separate loans as detailed below: |
| | | |
+-----------+---------+---------------------------------------------------------------------------------------------------------------------------------------------------------+
| | | Bank loan of RMB 1,000,000 is guaranteed by a third party and bears interest at the rate of 8.093% per annum and is repayable by 16 July |
| | | 2009. The book value of the loan approximates to its fair value. |
| | | |
+-----------+---------+---------------------------------------------------------------------------------------------------------------------------------------------------------+
| | | Bank loan of RMB 500,000 from long-term bank loan is guaranteed by a third party and bears interest at the rate of 9.71% per annum and is |
| | | repayable by 6 November 2009. The book value of the loan approximates to its fair value. |
| | | |
+-----------+---------+---------------------------------------------------------------------------------------------------------------------------------------------------------+
| | | | | | | | | | | | | | |
+-----------+---------+---------+-------------+---+-------------+-------+----------------------+-------+-----------------------+------+--------------------+----+---------------+
| 18. | | TRADE AND OTHER PAYABLES | | | | | | | | |
+-----------+---------+-----------------------------------------+-------+----------------------+-------+-----------------------+------+--------------------+----+---------------+
| | | | | | | | The Group | | The Company |
+-----------+---------+---------+-------------+---+-------------+-------+------------------------------------------------------+------+-----------------------------------------+
| | | | | | | | 2008 | | 2007 | | 2008 | | 2007 |
+-----------+---------+---------+-------------+---+-------------+-------+----------------------+-------+-----------------------+------+--------------------+----+---------------+
| | | | | | | | GBP | | GBP | | GBP | | GBP |
+-----------+---------+---------+-------------+---+-------------+-------+----------------------+-------+-----------------------+------+--------------------+----+---------------+
| | | Trade payables | | | 753,594 | | 439,612 | | 9,849 | | 8,842 |
+-----------+---------+---------------------------+-------------+-------+----------------------+-------+-----------------------+------+--------------------+----+---------------+
| | | Customer advances | | | 731,661 | | 217,593 | | - | | - |
+-----------+---------+---------------------------+-------------+-------+----------------------+-------+-----------------------+------+--------------------+----+---------------+
| | | Provisions for | | | 28,612 | | 42,403 | | - | | - |
| | | warranty | | | | | | | | | |
+-----------+---------+---------------------------+-------------+-------+----------------------+-------+-----------------------+------+--------------------+----+---------------+
| | | Other payables | | | 506,404 | | 294,552 | | 241,608 | | 191,375 |
+-----------+---------+---------------------------+-------------+-------+----------------------+-------+-----------------------+------+--------------------+----+---------------+
| | | Accruals and | | | 102,500 | | 80,229 | | 102,500 | | 76,750 |
| | | deferred income | | | | | | | | | |
+-----------+---------+---------------------------+-------------+-------+----------------------+-------+-----------------------+------+--------------------+----+---------------+
| | | Total financial liabilities | | 2,122,771 | | 1,074,389 | | 353,957 | | 276,967 |
| | | excluding loans and borrowings | | | | | | | | |
| | | classified as financial | | | | | | | | |
| | | liabilities measured at | | | | | | | | |
| | | amortised cost | | | | | | | | |
+-----------+---------+-----------------------------------------+-------+----------------------+-------+-----------------------+------+--------------------+----+---------------+
| | | | | | | | | | | | | | |
+-----------+---------+---------+-------------+---+-------------+-------+----------------------+-------+-----------------------+------+--------------------+----+---------------+
| | | The average credit period taken for trade purchases is 179 days (2007: 134days) |
+-----------+---------+---------------------------------------------------------------------------------------------------------------------------------------------------------+
| | | The book value approximates to fair value at 31 December 2008 and 2007. |
+-----------+---------+---------------------------------------------------------------------------------------------------------------------------------------------------------+
| | | | | | | | | | | | | | |
+-----------+---------+---------+-------------+---+-------------+-------+----------------------+-------+-----------------------+------+--------------------+----+---------------+
| 19. | | LONG-TERM LOAN | | | | | | | | | |
+-----------+---------+---------------------------+-------------+-------+----------------------+-------+-----------------------+------+--------------------+----+---------------+
| | | GROUP | | | | | | | 2008 | | 2007 |
+-----------+---------+---------------------------+-------------+-------+----------------------+-------+-----------------------+------+--------------------+----+---------------+
| | | | | | | | | | | | GBP | | GBP |
+-----------+---------+---------+-------------+---+-------------+-------+----------------------+-------+-----------------------+------+--------------------+----+---------------+
| | | Bank loan | | | | | | | - | | 69,086 |
+-----------+---------+---------------------------+-------------+-------+----------------------+-------+-----------------------+------+--------------------+----+---------------+
| | | | | | | | | | | | | | |
+-----------+---------+---------+-------------+---+-------------+-------+----------------------+-------+-----------------------+------+--------------------+----+---------------+
| | | The long-term bank loan of RMB 500,000 was repaid on 5 April 2008 and the remainder of the balance moved to short term loans as this amount |
| | | is repayable within one year from the year end date. |
+-----------+---------+---------------------------------------------------------------------------------------------------------------------------------------------------------+
| | | | | | | | | | | | | | |
+-----------+---------+---------+-------------+---+-------------+-------+----------------------+-------+-----------------------+------+--------------------+----+---------------+
| 20. | | SHARE CAPITAL | | | | | | | | | |
+-----------+---------+---------------------------+-------------+-------+----------------------+-------+-----------------------+------+--------------------+----+---------------+
| | | | | | | | | | | | 2008 | | 2007 |
+-----------+---------+---------+-------------+---+-------------+-------+----------------------+-------+-----------------------+------+--------------------+----+---------------+
| | | Authorised share capital: | | | | GBP | | GBP |
+-----------+---------+------------------------------------------------------------------------+-------+-----------------------+------+--------------------+----+---------------+
| | | 65,000,000 ordinary shares of 2.5p each | | | | 1,625,000 | | 1,625,000 |
+-----------+---------+------------------------------------------------------------------------+-------+-----------------------+------+--------------------+----+---------------+
| | | Allotted and fully paid: | | | | | | |
+-----------+---------+------------------------------------------------------------------------+-------+-----------------------+------+--------------------+----+---------------+
| | | At 1 January 2008 | | | | 450,000 | | 275,000 |
+-----------+---------+------------------------------------------------------------------------+-------+-----------------------+------+--------------------+----+---------------+
| | | Additions: | | | | | | |
+-----------+---------+------------------------------------------------------------------------+-------+-----------------------+------+--------------------+----+---------------+
| | | | 1,500,000 shares issued for cash at 13.5p | | | | - | | 37,500 |
+-----------+---------+---------+--------------------------------------------------------------+-------+-----------------------+------+--------------------+----+---------------+
| | | | 5,500,000 shares issued to the vendors of Jinzhou Wonder | | | | | |
+-----------+---------+---------+--------------------------------------------------------------------+-----------------------+------+----------------------+----+---------------+
| | | | Machinery Equipment Co Ltd | | | | - | | 137,500 |
+-----------+---------+---------+--------------------------------------------------------------+-------+-----------------------+------+--------------------+----+---------------+
| | | At 31 December 2008 | | | | 450,000 | | 450,000 |
+-----------+---------+------------------------------------------------------------------------+-------+-----------------------+------+--------------------+----+---------------+
| | | | | | | | | | | | | | |
+-----------+---------+---------+-------------+---+-------------+-------+----------------------+-------+-----------------------+------+--------------------+----+---------------+
| | | By way of a written resolution dated 28 September 2004 the Company granted 'sine die' an unencumbered authority and power to the directors |
| | | to deal with the authorised share capital of the Company. Such authority places the shares at the disposal of the directors who may allot, |
| | | grant options over or otherwise deal with or dispose of the shares to such persons at such times and generally on such terms and conditions |
| | | as they think proper. |
| | | |
+-----------+---------+---------------------------------------------------------------------------------------------------------------------------------------------------------+
| | | Warrants of the Company's shares outstanding at 31 December 2008 were as follows: |
+-----------+---------+---------------------------------------------------------------------------------------------------------------------------------------------------------+
| | | | Grantee | | Exercise period | | | | Exercise price per | | Number |
| | | | | | | | | | share | | |
+-----------+---------+---------+-------------------------------+-------+----------------------+-------+-----------------------+------+--------------------+----+---------------+
| | | | CYC Holdings Plc | | 01.10.04 - 30.09.09 | | 24.00 p | | 250,000 |
+-----------+---------+---------+-------------------------------+-------+------------------------------------------------------+------+--------------------+----+---------------+
| | | | Oakhill Enterprises | | 01.10.04 - 30.09.09 | | 24.00 p | | 250,000 |
| | | | plc | | | | | | |
+-----------+---------+---------+-------------------------------+-------+------------------------------------------------------+------+--------------------+----+---------------+
| | | | | | | | | | | | | | 500,000 |
+-----------+---------+---------+-------------+---+-------------+-------+----------------------+-------+-----------------------+------+--------------------+----+---------------+
| | | Under an instrument dated 29 September 2004, CYC Holdings Plc and Oakhill Enterprises Plc are entitled to subscribe in whole or in part for |
| | | up to 500,000 ordinary shares of the Company at 24p per share until 30 September 2009. |
+-----------+---------+---------------------------------------------------------------------------------------------------------------------------------------------------------+
| 21. | | RESERVES | | | | | | | | | |
+-------+---------+-------------------------------------+-----------+---------+------------+-------+-------------------+----------+----------------+----------+---------------+
| (a) | | GROUP | | | | | | | | | |
+-------+---------+-------------------------------------+-----------+---------+------------+-------+-------------------+----------+----------------+----------+---------------+
| | | | | | Minority | | Share | | Statutory reserve | | Translation | | Retained earnings |
| | | | | | interests | | premium | | | | reserve | | |
| | | | | | | | reserve | | | | | | |
+-----+-----------+-----------+---------------+---------+-----------+-------+--------------+---+---------------------+-----+---------------------+-----+----------------------+
| | | | | | GBP | | GBP | | GBP | | GBP | | GBP |
+-----+-----------+-----------+---------------+---------+-----------+-------+--------------+---+---------------------+-----+---------------------+-----+----------------------+
| | | 2008 | | | | | | | | | | |
+-----+-----------+---------------------------+---------+-----------+-------+--------------+---+---------------------+-----+---------------------+-----+----------------------+
| | | At 1 January 2008 | 48,360 | | 1,935,980 | | 139,615 | | 79,661 | | 494,960 |
+-----+-----------+-------------------------------------+-----------+-------+--------------+---+---------------------+-----+---------------------+-----+----------------------+
| | | Transfers | - | | - | | 21,380 | | - | | (21,380) |
+-----+-----------+-------------------------------------+-----------+-------+--------------+---+---------------------+-----+---------------------+-----+----------------------+
| | | Profit for the year | 2,658 | | - | | - | | - | | 171,374 |
+-----+-----------+-------------------------------------+-----------+-------+--------------+---+---------------------+-----+---------------------+-----+----------------------+
| | | Foreign exchange differences | 22,595 | | - | | - | | 586,059 | | - |
+-----+-----------+-------------------------------------+-----------+-------+--------------+---+---------------------+-----+---------------------+-----+----------------------+
| | | At 31 December 2008 | 73,613 | | 1,935,980 | | 160,995 | | 665,720 | | 644,954 |
+-----+-----------+-------------------------------------+-----------+-------+--------------+---+---------------------+-----+---------------------+-----+----------------------+
| | | | | | | | | | | | | | |
+-----+-----------+-----------+---------------+---------+-----------+-------+--------------+---+---------------------+-----+---------------------+-----+----------------------+
| | | 2007 | | | | | | | | | | |
+-----+-----------+---------------------------+---------+-----------+-------+--------------+---+---------------------+-----+---------------------+-----+----------------------+
| | | At 1 January 2007 | - | | 519,730 | | 97,848 | | (28,967) | | 270,355 |
+-----+-----------+-------------------------------------+-----------+-------+--------------+---+---------------------+-----+---------------------+-----+----------------------+
| | | Transfers | - | | - | | 41,767 | | - | | (41,767) |
+-----+-----------+-------------------------------------+-----------+-------+--------------+---+---------------------+-----+---------------------+-----+----------------------+
| | | Premium on new share capital subscribed | | | | | | | | |
+-----+-----------+-------------------------------------------------+-------+--------------+---+---------------------+-----+---------------------+-----+----------------------+
| | | | 27 February 2007 | - | | 1,416,250 | | - | | - | | - |
+-----+-----------+-----------+-------------------------+-----------+-------+--------------+---+---------------------+-----+---------------------+-----+----------------------+
| | | Acquisition of Wonder | 48,360 | | - | | - | | - | | - |
| | | Moulding | | | | | | | | | |
+-----+-----------+-------------------------------------+-----------+-------+--------------+---+---------------------+-----+---------------------+-----+----------------------+
| | | Profit for the year | - | | - | | - | | - | | 266,372 |
+-----+-----------+-------------------------------------+-----------+-------+--------------+---+---------------------+-----+---------------------+-----+----------------------+
| | | Foreign exchange differences | - | | - | | - | | 108,628 | | - |
+-----+-----------+-------------------------------------+-----------+-------+--------------+---+---------------------+-----+---------------------+-----+----------------------+
| | | At 31 December 2007 | 48,360 | | 1,935,980 | | 139,615 | | 79,661 | | 494,960 |
+-----+-----------+-------------------------------------+-----------+-------+--------------+---+---------------------+-----+---------------------+-----+----------------------+
| | | | | | | | | | | | | | |
+-----+-----------+-----------+---------------+---------+-----------+-------+--------------+---+---------------------+-----+---------------------+-----+----------------------+
| | | | | | | | | | | | |
+-----+-----------+-------------------------------------+-----------+-------+--------------+---+---------------------+-----+---------------------+-----+----------------------+
| (b) | | COMPANY | | | | | | | | | |
+-----+-----------+-------------------------------------+-----------+-------+--------------+---+---------------------+-----+---------------------+-----+----------------------+
| | | | | | | | | | | | Share premium | | Retained earnings |
+-----+-----------+-----------+---------------+---------+-----------+-------+--------------+---+---------------------+-----+---------------------+-----+----------------------+
| | | | | | | | | | | | | | 'as restated' |
+-----+-----------+-----------+---------------+---------+-----------+-------+--------------+---+---------------------+-----+---------------------+-----+----------------------+
| | | | | | | | | | | | GBP | | GBP |
+-----+-----------+-----------+---------------+---------+-----------+-------+--------------+---+---------------------+-----+---------------------+-----+----------------------+
| | | At 1 January 2008 | | | | | | | 1,935,980 | | (18,903) |
+-----+-----------+-------------------------------------+-----------+-------+--------------+---+---------------------+-----+---------------------+-----+----------------------+
| | | Profit for the year | | | | | | | - | | 66,434 |
+-----+-----------+-------------------------------------+-----------+-------+--------------+---+---------------------+-----+---------------------+-----+----------------------+
| | | At 31 December 2008 | | | | | | | 1,935,980 | | 47,531 |
+-----+-----------+-------------------------------------+-----------+-------+--------------+---+---------------------+-----+---------------------+-----+----------------------+
| | | | | | | | | | | | | | |
+-----+-----------+-----------+---------------+---------+-----------+-------+--------------+---+---------------------+-----+---------------------+-----+----------------------+
| | | 2007 | | | | | | | | | | |
+-----+-----------+---------------------------+---------+-----------+-------+--------------+---+---------------------+-----+---------------------+-----+----------------------+
| | | At 1 January 2007 | | | | | | | 519,730 | | (458,277) |
+-----+-----------+-------------------------------------+-----------+-------+--------------+---+---------------------+-----+---------------------+-----+----------------------+
| | | 28 February 2007 | | | | | | | | | |
+-----+-----------+-------------------------------------+-----------+-------+--------------+---+---------------------+-----+---------------------+-----+----------------------+
| | | | Issue of share capital | | | | | | | | |
| | | | 1,430,000 | | | | | | | | |
+-----+-----------+-----------+-------------------------------------+-------+--------------+---+---------------------+-----+---------------------+-----+----------------------+
| | | | less: Costs of | | | | | | | 1,416,250 | | - |
| | | | issue (13,750) | | | | | | | | | |
+-----+-----------+-----------+-------------------------+-----------+-------+--------------+---+---------------------+-----+---------------------+-----+----------------------+
| | | Loss for the year - as previously | | | | | | - | | (50,221) |
| | | reported | | | | | | | | |
+-----+-----------+-------------------------------------------------+-------+--------------+---+---------------------+-----+---------------------+-----+----------------------+
| | | Correction of error | | | | | | | - | | 489,595 |
+-----+-----------+-------------------------------------+-----------+-------+--------------+---+---------------------+-----+---------------------+-----+----------------------+
| | | At 31 December 2007 | | | | | | | 1,935,980 | | (18,903) |
+-----+-----------+-------------------------------------+-----------+-------+--------------+---+---------------------+-----+---------------------+-----+----------------------+
| | | | | | | | | | | | | | |
+-----+-----------+-----------+---------------+---------+-----------+-------+--------------+---+---------------------+-----+---------------------+-----+----------------------+
| (c) | | Description of the nature and purpose of reserves |
+-----+-----------+---------------------------------------------------------------------------------------------------------------------------------------------------+
| | | Share premium reserve | | | | | | | | | |
+-----+-----------+-------------------------------------+-----------+-------+--------------+---+---------------------+-----+---------------------+-----+----------------------+
| | | The share premium represents the amount subscribed for share capital in excess of the nominal value, less allowable share issue |
| | | expenses. |
+-----+-----------+---------------------------------------------------------------------------------------------------------------------------------------------------+
| | | Statutory reserve | | | | | | | | | |
+-----+-----------+-------------------------------------+-----------+-------+--------------+---+---------------------+-----+---------------------+-----+----------------------+
| | | The statutory reserve represents appropriations from the retained earnings reserve in accordance with the People's Republic of China |
| | | law, to be used for certain restricted purposes. |
+-----+-----------+---------------------------------------------------------------------------------------------------------------------------------------------------+
| | | Translation reserve | | | | | | | | | |
+-----+-----------+-------------------------------------+-----------+-------+--------------+---+---------------------+-----+---------------------+-----+----------------------+
| | | The foreign currency translation reserve comprises the gains and losses arising on translating the net assets of overseas operations |
| | | into pounds sterling. |
+-----+-----------+---------------------------------------------------------------------------------------------------------------------------------------------------+
| | | Retained earnings | | | | | | | | | |
+-----+-----------+-------------------------------------+-----------+-------+--------------+---+---------------------+-----+---------------------+-----+----------------------+
| | | The retained earnings reserve comprises the cumulative net gains and losses recognised in the consolidated income statement. |
+-----+-----------+---------------------------------------------------------------------------------------------------------------------------------------------------+
| | | | | | | | | | | | | | |
+-----+-----------+-----------+---------------+---------+-----------+-------+--------------+---+---------------------+-----+---------------------+-----+----------------------+
| (d) | | Minority interest |
+-----+-----------+---------------------------------------------------------------------------------------------------------------------------------------------------+
| | | The minority shareholder owns 25% equity of Jinzhou Wonder Moulding Machinery Co. Ltd ("WM") amount to 734,199 RMB (2007: 700,000RMB). |
+-----+-----------+---------------------------------------------------------------------------------------------------------------------------------------------------+
| | | | | | | | | | | | | | |
+-----+-----------+-----------+---------------+---------+-----------+-------+--------------+---+---------------------+-----+---------------------+-----+----------------------+
| 22. | | RECONCILIATION OF EQUITY | | | | | | | | |
+-----+-----------+-------------------------------------------------+-------+--------------+---+---------------------+-----+---------------------+-----+----------------------+
| | | | | | | | The Group | | The Company |
+-----+-----------+-----------+---------------+---------+-----------+-------+----------------------------------------+-----+--------------------------------------------------+
| | | | | | | | 2008 | | 2007 | | 2008 | | 2007 |
+-----+-----------+-----------+---------------+---------+-----------+-------+--------------+---+---------------------+-----+---------------------+-----+----------------------+
| | | | | | | | GBP | | GBP | | GBP | | GBP |
+-----+-----------+-----------+---------------+---------+-----------+-------+--------------+---+---------------------+-----+---------------------+-----+----------------------+
| | | | | | | | | | | | | | 'as restated' |
+-----+-----------+-----------+---------------+---------+-----------+-------+--------------+---+---------------------+-----+---------------------+-----+----------------------+
| | | At 1 January | | | 3,148,576 | | 1,133,966 | | 2,367,077 | | 336,453 |
+-----+-----------+-------------------------------------+-----------+-------+--------------+---+---------------------+-----+---------------------+-----+----------------------+
| | | Profit for the year | | | 171,374 | | 266,372 | | 66,434 | | 439,374 |
+-----+-----------+-------------------------------------+-----------+-------+--------------+---+---------------------+-----+---------------------+-----+----------------------+
| | | Foreign exchange differences | | | 586,059 | | 108,628 | | - | | - |
+-----+-----------+-------------------------------------+-----------+-------+--------------+---+---------------------+-----+---------------------+-----+----------------------+
| | | Total income and expenses | | | 3,906,009 | | 1,508,966 | | 2,433,511 | | 775,827 |
+-----+-----------+-------------------------------------+-----------+-------+--------------+---+---------------------+-----+---------------------+-----+----------------------+
| | | Share capital issued | | | - | | 175,000 | | - | | 175,000 |
+-----+-----------+-------------------------------------+-----------+-------+--------------+---+---------------------+-----+---------------------+-----+----------------------+
| | | Premium on issue of shares (net of | | - | | 1,416,250 | | - | | 1,416,250 |
| | | expenses) | | | | | | | | |
+-----+-----------+-------------------------------------------------+-------+--------------+---+---------------------+-----+---------------------+-----+----------------------+
| | | Minority interest acquired | | - | | 48,360 | | - | | - |
+-----+-----------+-------------------------------------------------+-------+--------------+---+---------------------+-----+---------------------+-----+----------------------+
| | | Minority interest profit | | 2,658 | | - | | - | | - |
+-----+-----------+-------------------------------------------------+-------+--------------+---+---------------------+-----+---------------------+-----+----------------------+
| | | Minority interest - foreign exchange | | 22,595 | | - | | - | | - |
| | | difference | | | | | | | | |
+-----+-----------+-------------------------------------------------+-------+--------------+---+---------------------+-----+---------------------+-----+----------------------+
| | | | | | | | | | | | | | |
+-----+-----------+-----------+---------------+---------+-----------+-------+--------------+---+---------------------+-----+---------------------+-----+----------------------+
| | | | | | | | 3,931,262 | | 3,148,576 | | 2,433,511 | | 2,367,077 |
+-----+-----------+-----------+---------------+---------+-----------+-------+--------------+---+---------------------+-----+---------------------+-----+----------------------+
| | | | | | | | | | | | | | |
+-----+-----------+-----------+---------------+---------+-----------+-------+--------------+---+---------------------+-----+---------------------+-----+----------------------+
| 23. | | RELATED PARTIES | | | | | | | | | |
+-----+-----------+-------------------------------------+-----------+-------+--------------+---+---------------------+-----+---------------------+-----+----------------------+
| | | In addition to directors' remuneration set out in Note 6 the following transactions which occurred during the financial period under |
| | | review are relevant: |
+-----+-----------+---------------------------------------------------------------------------------------------------------------------------------------------------+
| | - | In 2005 the Group made a loan of RMB 3,181,315 to Jinzhou Laifu Technical Development Co Ltd, a company of which Mr Qingjie Zhao is a |
| | | director. In 2008 the sum of GBP158,132 was repaid and the balance owed at 31 December 2008 amounting to nil (2007: GBP158,132) is |
| | | included in Note 16 "Other receivables". |
+-----+-----------+---------------------------------------------------------------------------------------------------------------------------------------------------+
| | - | The Company owed at 31 December 2008 an amount of GBP58,688 (2007: GBP88,688) to CYC Holdings Plc, a company in which Mark Chapman's |
| | | family is a significant investor. |
+-----+-----------+---------------------------------------------------------------------------------------------------------------------------------------------------+
| | - | The Company owed at 31 December 2008 an amount of GBP49,683 (2007: GBP49,683) to Zhao Qingjie, a former director which is included in |
| | | "Other payables". |
+-----+-----------+---------------------------------------------------------------------------------------------------------------------------------------------------+
| | | | | | | | | | | | | | |
+-----+-----------+-----------+---------------+---------+-----------+-------+--------------+---+---------------------+-----+---------------------+-----+----------------------+
| 24. | | FINANCIAL INSTRUMENTS | | | | | | | | |
+-----+-----------+-------------------------------------------------+-------+--------------+---+---------------------+-----+---------------------+-----+----------------------+
| | | In common with all other businesses, the Group is exposed to risks that arise from its use of financial instruments. This note |
| | | describes the Group's objectives, policies and processes for managing those risks and the methods used to measure them. |
| | | There have been no substantive changes in the Group's exposure to financial instrument risks, its objectives, policies and processes |
| | | for managing those risks or the methods used to measure them from previous periods unless otherwise stated in this note. |
+-----+-----------+---------------------------------------------------------------------------------------------------------------------------------------------------+
| | | Principal financial instruments |
+-----+-----------+---------------------------------------------------------------------------------------------------------------------------------------------------+
| | | The principal financial instruments used by the Group, from which financial instrument risk arises, are as follows: |
+-----+-----------+---------------------------------------------------------------------------------------------------------------------------------------------------+
| | | - Trade and other receivables |
+-----+-----------+---------------------------------------------------------------------------------------------------------------------------------------------------+
| | | - Cash and cash equivalents |
+-----+-----------+---------------------------------------------------------------------------------------------------------------------------------------------------+
| | | - Trade and other payables |
+-----+-----------+---------------------------------------------------------------------------------------------------------------------------------------------------+
| | | - Bank borrowings |
+-----+-----------+---------------------------------------------------------------------------------------------------------------------------------------------------+
| | | All financial assets are designated as receivables and financial liabilities are measured at amortised cost. |
+-----+-----------+---------------------------------------------------------------------------------------------------------------------------------------------------+
| | | General objectives, politices and procedures |
+-----+-----------+---------------------------------------------------------------------------------------------------------------------------------------------------+
| | | The Board has overall responsibility for the determination of the Group's risk management objectives and policies and, whilst |
| | | retaining ultimate responsibility for them, it has delegated the authority for designing and operating processes to executive |
| | | management. |
+-----+-----------+---------------------------------------------------------------------------------------------------------------------------------------------------+
| | | The overall objective of the Board is to set policies that seek to reduce risk as far as possible without unduly affecting the Group's |
| | | competitiveness and flexibility. Further details regarding these policies are set out below: |
+-----+-----------+---------------------------------------------------------------------------------------------------------------------------------------------------+
| | a) | Credit risk | | | | | | | | | |
+-----+-----------+-------------------------------------+-----------+-------+--------------+---+---------------------+-----+---------------------+-----+----------------------+
| | | Credit risk arises principally from the Group's trade and other receivables. |
+-----+-----------+---------------------------------------------------------------------------------------------------------------------------------------------------+
| | | The Group controls the credit risk from customers through deposit payments prior to delivery of goods. |
+-----+-----------+---------------------------------------------------------------------------------------------------------------------------------------------------+
| | | Trade and other receivables presented in the balance sheet are net of an allowance for doubtful receivables, estimated by management |
| | | based on current economic conditions. Receivables net of this allowance for doubtful receivables is the Group's maximum exposure to |
| | | credit risk, being GBP2,011,382 (2007: GBP1,600,910). |
+-----+-----------+---------------------------------------------------------------------------------------------------------------------------------------------------+
| | | The Group's credit risk is primarily attributable to its trade and other receivables. Cash is placed with creditworthy financial |
| | | institutions. The trade and other receivables presented in the balance sheet are net of an allowance for doubtful receivables, |
| | | estimated by management based on current economic conditions. |
+-----+-----------+---------------------------------------------------------------------------------------------------------------------------------------------------+
| | | Quantitative disclosures of the credit risk in relation to trade and other receivables are disclosed in Note 16. |
+-----+-----------+---------------------------------------------------------------------------------------------------------------------------------------------------+
| | | The majority of cash and cash equivalents are kept with reputable state-owned Chinese banks. |
+-----+-----------+---------------------------------------------------------------------------------------------------------------------------------------------------+
| | b) | Liquidity Risk |
+-----+-----------+---------------------------------------------------------------------------------------------------------------------------------------------------+
| | | Liquidity risk arises from the Group's management of working capital. It is the risk that the Group will encounter difficulty in |
| | | meeting its financial obligations as they fall due. |
+-----+-----------+---------------------------------------------------------------------------------------------------------------------------------------------------+
| | | The Group's policy as regards liquidity is to ensure sufficient cash resources are maintained to meet short-term liabilities. The |
| | | Group has no defaults or breaches on its financial liabilities. |
+-----+-----------+---------------------------------------------------------------------------------------------------------------------------------------------------+
| | c) | Currency Risk |
+-----+-----------+---------------------------------------------------------------------------------------------------------------------------------------------------+
| | | Foreign exchange risk refers to the risk that movement in foreign currency exchange rates against the Group's functional or reporting |
| | | currency will affect the Group's financial results and cash flows. The Group has transaction currency exposures. Such exposure arises |
| | | from sales by an operating unit in currencies other than its functional currency. Approximately 4% of the Group's sales are |
| | | denominated in USD. The Group's policy as it relates to currency risks to limit payment terms to immediate letters of credit or |
| | | prepayment before transporting goods to clients. |
+-----+-----------+---------------------------------------------------------------------------------------------------------------------------------------------------+
| | | If the exchange rate on uncovered exposures were to move significantly between the year end and date of payment or receipt there could |
| | | be an impact on the Group's net income. As all financial assets and liabilities are short term in nature, this risk is not considered |
| | | to be substantial. |
+-----+-----------+---------------------------------------------------------------------------------------------------------------------------------------------------+
| | | Foreign exchange risk has not been considered to be material in either the current or preceding period. |
+-----+-----------+---------------------------------------------------------------------------------------------------------------------------------------------------+
| | d) | Interest rate risk |
+-----+-----------+---------------------------------------------------------------------------------------------------------------------------------------------------+
| | | Interest rate risk arises from the potential changes in interest rates that may have an adverse effect on the Group in the current |
| | | reporting period and in future years. |
+-----+-----------+---------------------------------------------------------------------------------------------------------------------------------------------------+
| | | The Group is exposed to interest rate risk through the impact of change in interest rates on interest bearing debts and |
| | | interest bearing cash. Other than the bank deposits and borrowings, the Group has no other significant interest bearing assets and |
| | | liabilities. The Group's policy is to secure all its borrowings at fixed borrowing rates. |
+-----+-----------+---------------------------------------------------------------------------------------------------------------------------------------------------+
| | | Interest rate risk has not been considered to be material in either the current or preceding period. |
+-----+-----------+---------------------------------------------------------------------------------------------------------------------------------------------------+
| | e) | Capital |
+-----+-----------+---------------------------------------------------------------------------------------------------------------------------------------------------+
| | | The Group considers its capital to comprise its ordinary share capital, share premium and retained earnings. In managing its capital, |
| | | the Group's primary objective is to ensure its continued ability to provide a consistent return for its equity shareholders through a |
| | | combination of capital growth and distributions. The Group has historically considered a mix of debt and equity funding as the most |
| | | appropriate form of capital for the Group. |
+---+-+-+-+-+-+-+-+-+-+-+-+-+-+-+-------+-+-+-+-+-+-+-+-+--+--+-+-+-+-+-+-+-+-+---+-+--+-+-+-+-+-+-+-+-+-+--+-+--+-+-+-+-+-+-+-+--+-+-+-+--+-+-+-+-+-+-+-+-+--+-+-+-+-+-+-+-+-+-+
25. Annual Report
The Annual Report will be sent to shareholders on or around 22 May 2009.
Additional copies will be available to the public, free of charge, from the
Company's website
26. Annual General Meeting
The Company's Annual General Meeting will be held on 21 June 2009 at 11:00 am at
the conference room of Jinzhou Jinsha International Hotel in No. 91, Jiefang
Road, Jinzhou City, Liaoning Province, People's Republic of China.
This information is provided by RNS
The company news service from the London Stock Exchange
END
FR EAKSFAEFNEFE
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