RNS Number:3272Q
Pokphand (C.P.) Co Ltd
30 September 2003
Contents
Consolidated Results 2
Condensed Consolidated Profit and Loss Account 2
Condensed Consolidated Statement of Changes in Equity 3
Condensed Consolidated Balance Sheet 4
Condensed Consolidated Cash Flow Statement 5
Notes to Condensed Consolidated Financial Statements 6
Interim Dividend 12
Financial Review 12
Business Review 13
Management's Discussion and Analysis 14
Restructuring 15
Outlook 15
Practice Note 19 16
Directors' and Chief Executives' Interests and Short Positions in Shares, 18
Underlying Shares or Debentures
Persons who have an Interest or Short Position which is Discloseable under 20
the Securities and Futures Ordinance and Substantial Shareholders
Share Option Scheme 21
Purchase, Sale or Redemption of Listed Securities 22
Code of Best Practice 22
Audit Committee 22
CONSOLIDATED RESULTS
The board of directors (the "Directors") announces the unaudited consolidated
results of C.P. Pokphand Co. Ltd. and its subsidiaries (the "Group") for the
six months ended 30th June, 2003, together with the comparative figures for the
corresponding period in 2002 and (for information purpose) the audited
comparative figures for the year ended 31st December, 2002, as follows:
Condensed Consolidated Profit and Loss Account
Six months Year ended
ended 30th June, 31st December,
---------------- ---------
2003 2002 2002
(Unaudited) (Unaudited) (Audited)
Notes US$'000 US$'000 US$'000
---------------------- ----- --------- ---- --------- ---- --------- ---
Turnover 2 759,000 704,971 1,542,196
Cost of sales (692,036 ) (611,980 ) (1,363,107 )
--------- --------- ---------
Gross profit 66,964 92,991 179,089
Selling expenses (30,230 ) (25,719 ) (56,335 )
General and (46,899 ) (45,490 ) (92,496 )
administrative expenses
Other income, net 3 4,242 49,040 102,294
--------- --------- ---------
Profit/(Loss) from 4 (5,923 ) 70,822 132,552
operating activities
Finance costs (16,866 ) (20,891 ) (37,103 )
Share of profits less
losses of
jointly controlled
entities 1,628 8,351 19,048
Share of profits less (1,060 ) 1,387 1,204
losses of associates --------- --------- ---------
Profit/(Loss) before (22,221 ) 59,669 115,701
tax
Tax 5 (7,446 ) (6,500 ) (15,105 )
--------- --------- ---------
Profit/(Loss) after tax (29,667 ) 53,169 100,596
Minority interests'
share of
profits less losses (1,442 ) (5,596 ) (7,994 )
--------- --------- ---------
Net profit/(loss) from
ordinary activities
attributable to
shareholders (31,109 ) 47,573 92,602
Accumulated losses at
beginning of period (49,650 ) (140,483 ) (140,483 )
--------- --------- ---------
Accumulated losses (80,759 ) (92,910 ) (47,881 )
Transfer to statutory 9 (1,369 ) (1,286 ) (1,769 )
reserves --------- --------- ---------
Accumulated losses at (82,128 ) (94,196 ) (49,650 )
end of period --------- --------- ---------
US cents US cents US cents
Earnings/(Loss) per 6
share:
Basic (1.441 ) 2.204 4.290
Diluted N/A N/A N/A
Dividend per share - - -
Condensed Consolidated Statement of Changes in Equity
Six months Year ended
ended 30th June, 31st December,
---------------- ---------
2003 2002 2002
(Unaudited) (Unaudited) (Audited)
Notes US$'000 US$'000 US$'000
---------------------- ----- --------- ---- --------- ---- --------- ---
Surplus/(Deficit) on
revaluation of
fixed assets 9 (3,753 ) 2,595 3,672
Movements arising from
restructuring of a
subsidiary - 2,755 875
Release upon
reclassification from
associate to short term
investment - - (3,192 )
Exchange differences on
translation
of foreign currency
financial
statements and exchange
realignment 9 2,826 (756 ) (681 )
--------- --------- ---------
Net profit/(loss) not
recognised
in the profit and loss
account (927 ) 4,594 674
Deficit on revaluation
of land and
buildings - - (153 )
Release upon disposal - (5,463 ) (10,144 )
of associates
Net profit/(loss) for
the year/period
attributable to
shareholders 9 (31,109 ) 47,573 92,602
--------- --------- ---------
Total changes in equity (32,036 ) 46,704 82,979
--------- --------- ---------
Condensed Consolidated Balance Sheet
30th June, 31st December,
2003 2002
(Unaudited) (Audited)
Notes US$'000 US$'000
----------------------- ------ ------------ ----- ------------
Non-current assets
Fixed assets 571,238 579,201
Investment properties 1,527 1,527
Interests in jointly controlled 91,143 87,236
entities
Interests in associates 24,766 25,907
Long term investments 2,054 1,574
Goodwill (8,528 ) 3,690
Deferred tax assets 951 862
------------ ------------
683,151 699,997
------------ ------------
Current assets
Short term investments 10,913 32,883
Inventories 165,643 167,248
Accounts receivable, other 7 93,830 94,539
receivables and deposits
Bills receivable 676 239
Tax recoverable 82 1,014
Amounts due from related 11,732 4,748
companies
Cash held in escrow account 11,624 11,085
Fixed and pledged deposits - 1,690
Cash and cash equivalents 86,365 95,633
------------ ------------
380,865 409,079
------------ ------------
Current liabilities
Accounts payable, other payables
and accrued expenses 8 212,803 195,690
Bills payable 9,964 5,583
Tax payable 7,678 4,378
Provisions for staff bonuses
and welfare benefits 8,844 5,736
Amounts due to related companies 3,577 4,717
Interest-bearing bank loans and 452,281 487,355
other loans ------------ ------------
695,147 703,459
------------ ------------
Net current liabilities (314,282 ) (294,380 )
------------ ------------
368,869 405,617
Non-current liabilities
Interest-bearing bank loans and (177,754 ) (172,521 )
other loans ------------ ------------
191,115 233,096
------------ ------------
Capital and reserves
Issued capital 107,924 107,924
Share premium 51,210 51,210
Reserves 9 (39,571 ) (7,535 )
------------ ------------
119,563 151,599
Minority interests 71,552 81,497
------------ ------------
191,115 233,096
------------ ------------
Condensed Consolidated Cash Flow Statement
Six months ended 30th June
2003 2002
(Unaudited) (Unaudited)
US$'000 US$'000
-------------------------- ------------ ------ ------------
Net cash inflow from operating activities
before tax paid 18,011 38,815
Tax paid (2,392 ) (4,370 )
------------ ------------
Net cash inflow from operating activities 15,619 34,445
Net cash inflow from investing activities 14,651 36,359
------------ ------------
Net cash inflow before financing 30,270 70,804
activities
Net cash outflow from financing activities (39,538 ) (72,598 )
------------ ------------
Decrease in cash and cash equivalents (9,268 ) (1,794 )
Cash and cash equivalents at beginning of 95,633 88,649
period ------------ ------------
Cash and cash equivalents at end of period 86,365 86,855
------------ ------------
Notes to Condensed Consolidated Financial Statements
1. Accounting policies
The condensed consolidated interim financial statements are unaudited and have
been prepared in accordance with the Rules (the "Listing Rules") Governing the
Listing of Securities on The Stock Exchange of Hong Kong Limited (the "Stock
Exchange") and International Accounting Standard 34 "Interim Financial
Reporting".
The accounting policies adopted are consistent with those followed in the
Group's annual financial statements for the year ended 31st December, 2002.
2. Segmental information
Turnover represents rental income, dividend income and the net invoiced value of
sales after allowances for goods returned and trade discounts, and after the
elimination of intra-group transactions.
An analysis of turnover by activity and geographical location is as follows:
Turnover:
Six months Year ended
ended 30th June, 31st December,
------------------ ---------
2003 2002 2002
(Unaudited) (Unaudited) (Audited)
US$'000 US$'000 US$'000
----------------------- --------- ---- --------- ---- ---------
By activity:
Feedmill and poultry 758,980 704,889 1,542,090
operations
Investment properties 20 82 106
--------- --------- ---------
759,000 704,971 1,542,196
--------- --------- ---------
By geographical location:
People's Republic of
China ("PRC"):
Hong Kong 20 82 106
Elsewhere 669,791 647,062 1,415,510
--------- --------- ---------
669,811 647,144 1,415,616
Turkey 89,189 57,827 126,580
--------- --------- ---------
759,000 704,971 1,542,196
--------- --------- ---------
The above analysis does not include the turnover of the Group''s jointly
controlled entities and associates.
3. Other income, net
Six months Year ended
ended 30th June, 31st December,
------------------ ---------
2003 2002 2002
(Unaudited) (Unaudited) (Audited)
US$'000 US$'000 US$'000
----------------------- --------- ---- --------- ---- --------- ---
Amortisation of deferred - (931 ) (1,862 )
restructuring expenses
Gain on disposal of 3,754 44,505 579
short term investments
Unrealised gain/(loss) (604 ) 3,829 21,358
of short term
investments
Tax refund in respect of 46 - 1,013
re-investments
Interest income 1,046 1,637 3,016
Gain on disposal of - - 87,556
interests in associates
Gain on disposal of
interests in jointly
controlled entities - - 1,918
Revaluation deficit on - - (153 )
land and buildings
Revaluation deficit on - - (258 )
investment properties
Impairment loss in - - (8,320 )
respect of fixed assets
Impairment loss in
respect of investments
in jointly controlled
entities - - (901 )
Impairment loss in - - (1,652 )
respect of goodwill --------- --------- ---------
4,242 49,040 102,294
--------- --------- ---------
4. Profit/(Loss) from operating activities
Six months Year ended
ended 30th June, 31st December,
------------------ ---------
2003 2002 2002
(Unaudited) (Unaudited) (Audited)
US$'000 US$'000 US$'000
---------------------- --------- ---- --------- ---- --------- ---
The Group's profit/
(loss) from operating
activities is arrived
at after
charging/(crediting):
Foreign exchange loss/ (1,129 ) 1,008 2,161
(gain), net
Depreciation 29,651 24,459 68,972
Staff costs 45,346 42,882 90,111
Loss/(Gain) on disposal (527 ) 153 652
of fixed assets, net
Amortisation of 121 123 242
goodwill
5. Tax
Six months Year ended
ended 30th June, 31st December,
------------------ ---------
2003 2002 2002
(Unaudited) (Unaudited) (Audited)
US$'000 US$'000 US$'000
---------------------- --------- ---- --------- ---- --------- ---
The Company and
subsidiaries:
Provision for taxation
in respect of
profit for the period:
PRC:
Hong Kong - - -
Elsewhere 2,545 4,239 6,870
Overseas 3,058 - 2,684
Deferred tax credit - - (81 )
--------- --------- ---------
5,603 4,239 9,473
--------- --------- ---------
Underprovision in the
prior year:
PRC:
Hong Kong - - -
Elsewhere - - 345
--------- --------- ---------
- - 345
--------- --------- ---------
Jointly controlled
entities:
PRC:
Hong Kong - - -
Elsewhere 1,827 2,129 4,983
--------- --------- ---------
1,827 2,129 4,983
--------- --------- ---------
Associates:
PRC:
Hong Kong - - -
Elsewhere 16 132 304
--------- --------- ---------
16 132 304
--------- --------- ---------
Tax charged for the 7,446 6,500 15,105
period --------- --------- ---------
No provision for Hong Kong taxation has been made as the Group earned no
assessable income in Hong Kong during the period (2002: nil).
The overseas tax represents corporation tax payable in Turkey in respect of
income earned during the period (2002: nil).
6. Loss per share is calculated based on the net loss from ordinary
activities attributable to shareholders of US$31,109,000 (net profit for the six
months ended 30th June, 2002: US$47,573,000) and the weighted average of
2,158,480,786 shares (2002: 2,158,480,786 shares) of the Company in issue during
the period.
As the exercise price of options outstanding during the period is higher than
the average market price of the Company's shares during the respective periods,
the diluted earnings/loss per share for the periods ended 30th June, 2003 and
2002 are not presented because the impact of the options is anti-dilutive.
7. Accounts receivable, other receivables and deposits
The Group normally grants a credit policy of 0 to 30 days. An aging analysis of
the accounts receivable, other receivables and deposits of the Group are as
follows:
30th June, 31st December,
2003 2002
(Unaudited) (Audited)
US$'000 US$'000
---------------------------- ----------- ---- ----------- ---
Accounts receivable:
Less than 90 days 30,994 33,591
91 to 180 days 940 1,711
181 to 365 days 1,806 431
Over 365 days 8,482 7,813
----------- -----------
42,222 43,546
Other receivables and deposits 66,030 65,450
----------- -----------
108,252 108,996
Less: Provision for bad and doubtful (14,422 ) (14,457 )
debts ----------- -----------
93,830 94,539
----------- -----------
8. Accounts payable, other payables and accrued expenses
An aging analysis of the accounts payable, other payables and accrued expenses
of the Group are as follows:
30th June, 31st December,
2003 2002
(Unaudited) (Audited)
US$'000 US$'000
---------------------------- ----------- -----------
Accounts payable:
Less than 90 days 97,031 97,708
91 to 180 days 11,101 6,151
181 to 365 days 2,727 2,146
Over 365 days 1,900 1,768
----------- -----------
112,759 107,773
Other payables and accrued expenses 100,044 87,917
----------- -----------
212,803 195,690
----------- -----------
9. Reserves
Fixed
asset Exchange
Contributed revaluation General Capital Reserve Expansion equalization Accumulated
surplus reserve reserve reserve fund fund reserve losses Total
US$'000 US$'000 US$'000 US$'000 US$'000 US$'000 US$'000 US$'000 US$'000
--------- ------ ------ ------ ------ ------ ------ ------ ----------- -------
1st January, 6,093 9,347 (1,783) 36,912 22,766 13,727 (44,947) (49,650) (7,535)
2003
Exchange - 2,078 - 27 - - - - 2,105
realignments
Deficit on - (3,753) - - - - - - (3,753)
revaluation
Exchange
gain arising
from
translation
of foreign
currency
financial
statements - - - - - - 721 - 721
Transfer
from/(to)
profit and
loss account - - - 217 1,604 (452) - (1,369) -
Loss for the - - - - - - - (31,109) (31,109)
period ------- ------- ------- ------- ------- ------- ------- ------- -------
30th June, 6,093 7,672 (1,783) 37,156 24,370 13,275 (44,226) (82,128) (39,571)
2003 ------- ------- ------- ------- ------- ------- ------- ------- -------
10. Related party transactions
(a)A portion of the Group's sales and purchases transactions, together
with certain less significant commercial transactions, are with companies in
which Mr. Jaran Chiaravanont, Mr. Montri Jiaravanont, Mr. Dhanin Chearavanont,
Mr. Sumet Jiaravanon, Mr. Prasert Poongkumarn, Mr. Min Tieanworn, Mr. Thirayut
Phitya-Isarakul, Mr. Thanakorn Seriburi and Mr. Veeravat Kanchanadul, directors
of the Company, have beneficial interests. Details of major related party
transactions are set out as follows:
Six months Year ended
ended 30th June, 31st December,
2003 2002 2002
(Unaudited) (Unaudited) (Audited)
Notes US$'000 US$'000 US$'000
------------------ ----- --------- ---------- ---- --------- ---
Sales of goods to jointly
controlled
entities and associates (i) 10,787 8,040 15,752
Sales of goods to related (i) 21,631 1,097 12,513
companies
Purchases of raw
materials from
Jointly controlled
entities
and associates (ii) 10,395 20,245 38,826
Purchases of raw
materials from
related companies (ii) 8,075 12,671 23,753
Notes:
(i) The sales of goods were made according to the published prices and
conditions offered to the major customers of the Group, except that a longer
credit period was normally granted.
(ii) The purchases of raw materials were made according to the published prices
and conditions offered to the major customers of the supplier, except that a
longer credit period was normally granted.
(b) During the period, the Company paid an advisory fee of US$50,000 (six
months ended 30th June, 2002: US$50,000) to Charoen Pokphand Group Company
Limited for the provision of technical and management support services to the
Group.
Mr. Jaran Chiaravanont, Mr. Montri Jiaravanont, Mr. Dhanin Chearavanont and Mr.
Sumet Jiaravanon, directors of the Company, have beneficial interests in the
share capital of Charoen Pokphand Group Company Limited.
INTERIM DIVIDEND
The Directors do not recommend an interim dividend for the year ending 31st
December, 2003 (2002: nil).
FINANCIAL REVIEW
The following analyses are the Group's total and attributable turnover under
management (including turnover of our jointly controlled entities and
associates) and net profit/(loss) attributable to shareholders by activity and
geographical location:
Analysis of the Group's total and attributable turnover under management
Six months ended 30th June, 2003
Total Group Attributable
turnover ownership turnover
---------------- ---------------
US$ million % % US$ million %
-------------- --------- -- --------- -------- --- --------- -- --------
PRC 988.2 75.9 25-100 755.2 83.3
agri-business
Turkey 89.2 6.9 85 75.4 8.3
agri-business
PRC industrial 224.4 17.2 19-38 76.3 8.4
business --------- --------- --------- --------
1,301.8 100.0 906.9 100.0
--------- --------- --------- --------
Analysis of the Group's net profit/(loss) attributable to shareholders by
activity and geographical location
Six months
ended 30th June,
----------------------
2003 2002
(Unaudited) (Unaudited)
US$'000 US$'000
------------------------------ ----------- ---- ----------- ---
By activity:
Feedmill and poultry operations (29,193 ) 52,738
Industrial operations 3,488 1,526
Investment properties (484 ) (370 )
Investment holding* (4,920 ) (6,321 )
----------- -----------
(31,109 ) 47,573
----------- -----------
By geographical location:
PRC:
Hong Kong (5,645 ) (11,064 )
Elsewhere (31,252 ) 48,168
----------- -----------
(36,897 ) 37,104
Turkey 5,547 6,096
Indonesia 241 3,829
Thailand - 544
----------- -----------
(31,109 ) 47,573
----------- -----------
* including Hong Kong headquarters' general expenses
BUSINESS REVIEW
The first half of 2003 was a period of challenges for our core business and our
operations sustained a loss during the period. Consolidated turnover was
US$759.0 million (2002: US$705.0 million). Consolidated loss from operating
activities was US$5.9 million (2002: profit of US$70.8 million). Net loss from
ordinary activities attributable to shareholders was US$31.1 million (2002: net
profit of US$47.6 million).
PRC
Agri-business
Our agri-business operations in the PRC faced an unfavourable operating
environment during the period under review. Turnover under management was
US$988.2 million (2002: US$1,082.0 million). Turnover on a consolidated basis
was US$669.8 million (2002: US$647.1 million), a slight increase by 3.5%.
Consolidated loss attributable to shareholders of this division during the
period was US$34.7 million (2002: profit of US$46.6 million). Unit sales of our
two main products, complete feed and day-old chicks, were 2.3 million tonnes
(2002: 2.4 million tonnes) and 167.8 million units (2002: 189.4 million units)
respectively.
The outbreak of severe acute respiratory syndrome (SARS) in part of the PRC in
the first half of 2003 had an adverse impact on the Group's agri-businesses
operating across the country. The business-related travelling of our purchasing
and sales staffs, the movement of raw materials required for production and the
delivery of our finished products suffered interruptions at some locations and
sales were retarded due to lowered consumption. These adverse factors had
complicated an already challenging operating environment due to the increased
costs of the raw materials required for feed production since December 2002. As
a result, gross profit margin declined significantly.
In addition, the outburst of a fire in our Qingdao operation in April 2003 and
the re-introduction of an import ban by Japan on poultry products from the PRC
since 12th May, 2003 have adversely affected the Group's chicken meat export as
Japan is our primary market for export.
During the period under review, the Group disposed of 49,562,783 shares (2002:
100,935,116 shares) in Shanghai Dajiang (Group) Stock Co. Ltd. ("Shanghai
Dajiang") and recorded a gain of US$3.4 million (2002: US$44.0 million). As at
30th June, 2003, the Group's interest in Shanghai Dajiang was 1.4% (31st
December, 2002: 8.7%).
Industrial business
Ek Chor China Motorcycle Co. Ltd. ("EKC"), our subsidiary, previously listed
on the New York Stock Exchange, registered improved results. Net income
attributable to the Group was US$3.5 million as compared to US$1.5 million in
the same period of 2002.
On 16th April, 2003, EKC announced its privatization by way of a scheme of
arrangement under Bermuda law. The privatization was duly approved at the Court
Meeting and Special General Meeting both held on 12th June, 2003. With the
satisfaction of all requirements prescribed by the relevant authority, EKC was
privatized and became a wholly-owned subsidiary of the Company on 23rd June,
2003. The listing status of EKC's shares was then withdrawn from the New York
Stock Exchange. The gain from privatization was recognized as negative goodwill
in the Condensed Consolidated Balance Sheet.
Turkey
Our Turkish operation continued to perform satisfactorily and recorded a profit
attributable to shareholders of US$5.5 million (2002: US$6.1 million).
Indonesia
The Group maintains a 19.75% interest in P.T. Surya Hidup Satwa and a 7.09%
interest in P.T. Central Proteinaprima.
MANAGEMENT'S DISCUSSION AND ANALYSIS
Liquidity and financial resources
As at 30th June, 2003, the Group had total assets of US$1,064.0 million, down
4.1% from US$1,109.1 million at the year end of 2002. Total debt and debt to
equity ratio (debt to equity ratio is calculated by dividing the total debt by
the net asset value) were US$630.0 million and 329.7% respectively, as compared
to US$659.9 million and 283.1% as at 31st December, 2002.
Most of the borrowings by the Group are in U.S. dollars and Renminbi and the
interest rates ranged from 2.22% to 6.90% per annum for the period.
The Group had not engaged in any derivative for hedging against both the
interest and exchange rate.
Capital structure
The Group finances its working capital requirements through a combination of
funds generated from operations, short term and long term bank loans, floating
rate notes and from the disposal of certain assets and investments. The Group
had cash and cash equivalents of US$86.4 million as at 30th June, 2003 (31st
December, 2002: US$95.6 million), a decrease of US$9.2 million.
Charges on group assets
As at 30th June, 2003, out of the total borrowings of US$630.0 million (31st
December, 2002: US$659.9 million) obtained by the Group, only US$146.1 million
(31st December, 2002: US$123.5 million) were secured and accounted for 23.2%
(31st December, 2002: 18.7%) of the total. Certain of the Group's fixed assets
located in the PRC with net book value of US$255.3 million (31st December, 2002:
US$195.4 million) have been pledged as security for various short and long term
bank loans.
Contingent liabilities
As at 30th June, 2003, the guarantees provided by the Group was US$27.2 million
(31st December, 2002: US$27.2 million).
Employee and remuneration policies
As at 30th June, 2003, the Group employed around 53,000 staff (including 21,000
staff from the jointly controlled entities and associates) in the PRC, Hong Kong
and Turkey. The Group remunerates its employees based on their performance,
experience and prevailing market rate while performance bonuses are granted on a
discretionary basis. Other employee benefits include insurance and medical
cover, subsidized training programme as well as share option scheme.
RESTRUCTURING
The Company has made a distribution of US$28.0 million during the period,
amounting to an aggregate distribution of US$333.4 million. Moreover, the
Company's creditors have agreed to an amended debt reduction schedule and an
extension of the period of the restructuring by 12 months to 31st December, 2004
subject to the completion of relevant documentation.
OUTLOOK
The business conditions in the second half of 2003 is expected to remain
challenging. We will endeavour to streamline our business and improve our
operating efficiency.
PRACTICE NOTE 19
As at 30th June, 2003, the financial assistance and guarantees given to and for
affiliated companies in aggregate amounted to approximately 24.6% of the audited
consolidated net tangible assets of the Company as at 31st December, 2002, after
adjusting for the net loss of US$31.11 million for the six months ended 30th
June, 2003. Furthermore, there were covenants in certain loan agreements of the
Group relating to specific performance obligations of the Company's controlling
shareholders.
Pursuant to Practice Note 19 of the Listing Rules, the following information is
hereby disclosed:
(i) Information extracted from the balance sheets as at 30th June, 2003
of the affiliated companies which the Company has provided financial assistance:
Equity Net Asset
Interest Value/
Owned by Total Total (Asset
Name of Affiliated Companies the Group Assets Liabilities Deficiency)
US$'000 US$'000 US$'000
------------------------ ------ ------ ------ ------- ---
Beijing Chia Tai Feedmill 33% 14,867 10,179 4,688
Limited
Hunan Chia Tai Animal 50% 2,940 133 2,807
Husbandry Co., Ltd.
Jilin Chia Tai Enterprises 50% 15,767 5,480 10,287
Co., Ltd.
Kaifeng Chia Tai Company 50% 33,997 30,597 3,400
Limited
Nantong River Mouth Bio-tech
Co., Ltd. 33% 7,644 5,842 1,802
Tangshan Chia Tai Feedmill 38% 2,817 4,177 (1,360 )
Co., Ltd. ------- ------- -------
Total 78,032 56,408 21,624
------- ------- -------
(ii) Information extracted from the balance sheets as at 30th June, 2003
of the affiliated companies which the Company has provided guarantees for
facilities/loans offered to them:
Equity Net Asset
Interest Value/
Owned by Total Total (Asset
Name of Affiliated Companies the Group Assets Liabilities Deficiency)
US$'000 US$'000 US$'000
------------------------ ------ ------ ------ ------- ---
Beijing Chia Tai Feedmill 33% 14,867 10,179 4,688
Limited
Han Dan Chia Tai Feed Co., 50% 3,058 2,617 441
Ltd.
Jilin Chia Tai Company 45% 7,497 10,885 (3,388 )
Limited
Jilin Da He Feedmill Co., 29% 761 491 270
Ltd.
Kaifeng Chia Tai Company 50% 33,997 30,597 3,400
Limited
P.T. Centralpertiwi Bahari 16% 173,557 176,298 (2,741 )
------- ------- -------
Total 233,737 231,067 2,670
-------- -------- -------
(iii)Loan agreements with covenants relating to special performance
obligations of the Company's controlling shareholders:
Certain banking facilities of the Group imposed a requirement for a specified
minimum shareholding level in the Company (being, in one of such facilities,
50%, and, in another two of such facilities, 51%) to be maintained by the
Company's controlling shareholders, which hold approximately 49.4% interest in
the issued share capital of the Company. As at 30th June, 2003, the outstanding
amount owing by the Group under these facilities aggregated approximately
US$7.76 million.
As announced by the Company in 1998, the Company was unable to redeem certain of
its floating rate notes upon their early redemption which, as a result of
cross-default provisions, constituted an event of default under its other
floating rate notes and the credit facilities provided by certain of its bank
creditors. Such facilities include those referred to above with minimum
shareholding covenants.
DIRECTORS' AND CHIEF EXECUTIVES' INTERESTS AND SHORT POSITIONS IN SHARES,
UNDERLYING SHARES OR DEBENTURES
As at 30th June, 2003, the interests and short positions of the Directors and
chief executives of the Company in shares, underlying shares or debentures of
the Company or any associated corporation (within the meaning of the Securities
and Futures Ordinance ("SFO")) as recorded in the register required to be kept
by the Company under Section 352 of the SFO or as otherwise notified to the
Company and the Stock Exchange pursuant to the Model Code for Securities
Transactions by Directors of Listed Companies were as follows:
Long position in shares of the Company
Capacity/Nature of Interest Approximate
------------------ percentage of
Interest of Total number of issued share
Beneficial Controlled Shares in the capital of
Name of Owner Corporations Company the Company
Director --------- ---- --------- --------- ----- --------- ---
---------------
Mr. Jaran 843,750 - 843,750 0.04
Chiaravanont
Mr. Dhanin - 1,066,662,834 1,066,662,834 (1) 49.42
Chearavanont
Mr. Sumet - 1,066,662,834 1,066,662,834 (1)& 49.42
Jiaravanon (2)
Notes:
(1) 428,441,073 shares were held by Perfect Investment Limited,
539,988,444 shares were held by Pakeman Co. Inc. and 98,233,317 shares were held
by CPI Holding Co., Ltd. Mr. Dhanin Chearavanont and Mr. Sumet Jiaravanon have
indirect beneficial interests in these three companies.
(2) 1,066,662,834 shares are duplicated in the corporate interests
attributable to Mr. Dhanin Chearavanont.
Long position in shares of an associated corporation
Name of associated corporation Number of
shares
Name of Director in which notifiable interest is held held
------------------ ------------------ ------------------
Mr. Thanakorn Seriburi Chia Tai Quanzhou Company Limited 20,000
Long position in underlying shares of the Company
Pursuant to the old share option scheme (the "Old Scheme") adopted on 10th
April, 1992 which expired on 10th April, 2002 and the existing share option
scheme (the "Existing Scheme") adopted by the Company on 26th November, 2002,
certain Directors were granted share options. As at 30th June, 2003, the
interests of the Directors of the Company in options to subscribe for shares in
the capital of the Company under the Old Scheme and the Existing Scheme were as
follows:
Number of Price per
shares
issuable upon share to be
exercise of paid on
options
held as at Period during exercise of
which
Name of Director Date of Grant 30th June, 2003 options are options
exercisable
HK$
------------ ------------- ----------- -------------- ---------
Mr. Dhanin 26th February, 12,800,000 26th February, 0.39
Chearavanont 2003 2003
to 25th
February, 2013
Mr. Sumet 26th February, 12,800,000 26th February, 0.39
Jiaravanon 2003 2003
to 25th
February, 2013
Mr. Prasert 20th May, 1994 18,479,248 20th May, 1994 1.752
Poongkumarn
to 20th May,
2004
26th February, 21,584,807 26th February, 0.39
2003 2003
to 25th
February, 2013
Mr. Min Tieanworn 26th February, 21,584,807 26th February, 0.39
2003 2003
to 25th
February, 2013
Mr. Thirayut 10th August, 25,000,000 10th August, 0.3875
Phitya-Isarakul 1998 1998
to 10th August,
2008
26th February, 21,584,807 26th February, 0.39
2003 2003
to 25th
February, 2013
Mr. Thanakorn 10th August, 17,500,000 10th August, 0.3875
Seriburi 1998 1998
to 10th August,
2008
26th February, 21,584,807 26th February, 0.39
2003 2003
to 25th
February, 2013
Mr. Veeravat 26th February, 21,584,807 26th February, 0.39
Kanchanadul 2003 2003
to 25th
February, 2013
As at 30th June, 2003, none of the above share options had been exercised.
Save as disclosed above, as at 30th June, 2003, none of the Directors and chief
executives of the Company had any interest or short position in shares,
underlying shares or debentures of the Company or any associated corporation
(within the meaning of the SFO) as recorded in the register required to be kept
by the Company under Section 352 of the SFO or as otherwise notified to the
Company and the Stock Exchange pursuant to the Model Code for Securities
Transactions by Directors of Listed Companies.
PERSONS WHO HAVE AN INTEREST OR SHORT POSITION WHICH IS DISCLOSEABLE UNDER THE
SECURITIES AND FUTURES ORDINANCE AND SUBSTANTIAL SHAREHOLDERS
As at 30th June, 2003, the following persons had the following interests or
short positions in shares or underlying shares of the Company as recorded in the
register required to be kept by the Company pursuant to Section 336 of the SFO:
Long position in shares
Approximate
Capacity/ Number of percentage of
Nature of shares of issued share
Name of Shareholder Interest Notes the Company capital
------------------ ------------ --------- -------- -----------
Citigroup Inc. Security 1 181,886,124 8.43
interest,
investment
manager
and beneficial
owner
Charoen Pokphand Overseas Beneficial 2 195,834,452 9.07
Investment Company owner
Limited
Charoen Pokphand (Hong Interest of a 2 195,834,452 9.07
Kong)
Company Limited controlled
corporation
Chia Tai International Beneficial 3 232,606,621 10.78
Investment Company owner
Limited
Charoen Pokphand (China) Interest of a 3 232,606,621 10.78
Company Limited controlled
corporation
Charoen Pokphand Holding Interest of 4 428,441,073 19.85
Company Limited controlled
corporations
Perfect Investment Interest of 5 428,441,073 19.85
Limited controlled
corporations
Pakeman Co. Inc. Beneficial 6 539,988,444 25.02
owner
CPI Holding Co., Ltd. Beneficial 7 98,233,317 4.55
owner
C.P. Intertrade Co., Interest of a 7 98,233,317 4.55
Ltd. controlled
corporation
Mr. Dhanin Chearavanont Beneficial 8 1,066,662,834 49.42
owner
Mr. Sumet Jiaravanon Beneficial 8 1,066,662,834 49.42
owner
Notes:
1. Of the 181,886,124 shares held by Citigroup Inc., 181,503,699 shares
were held as security, 364,625 shares were held as investment manager and the
balance of 17,800 shares were held beneficially.
2. Charoen Pokphand Overseas Investment Company Limited (CP Overseas)
beneficially owned 195,834,452 shares. Charoen Pokphand (Hong Kong) Company
Limited ("CP Hong Kong") has declared an interest in these same 195,834,452
shares by virtue of its shareholding in CP Overseas.
3. Chia Tai International Investment Company Limited ("CTII")
beneficially owned 232,606,621 shares. Charoen Pokphand (China) Company Limited
("CP China") has declared an interest in these same 232,606,621 shares by
virtue of its shareholding in CTII.
4. Charoen Pokphand Holding Company Limited ("CP Holding") has
declared an interest in an aggregate of 428,441,073 shares which comprised the
195,834,452 shares referred to in Note 2 above by virtue of its shareholding in
CP Hong Kong and the 232,606,621 shares referred to in Note 3 above by virtue of
its shareholding in CP China.
5. Perfect Investment Limited has declared an interest in the same
428,441,073 shares in which CP Holding has declared an interest (see Note 4), by
virtue of its shareholding in CP Holding.
6.Pakeman Co. Inc. beneficially owned a total of 539,988,444 shares.
7. CPI Holding Co., Ltd. beneficially owned 98,233,317 shares. C.P.
Intertrade Co., Ltd. has declared an interest in these same 98,233,317 shares by
virtue of its shareholding in CPI Holding Co., Ltd.
8. Each of Mr. Dhanin Chearavanont and Mr. Sumet Jiaravanon has declared
an interest in an aggregate of 1,066,662,834 shares, comprising the 428,441,073
shares in which Perfect Investment Limited has declared an interest (see Note 5
above), the 539,988,444 shares in which Pakeman Co. Inc. has declared an
interest (see Note 6 above) and the 98,233,317 shares in which C.P. Intertrade
Co., Ltd. has declared an interest (see Note 7 above), by virtue of their
respective beneficial shareholding interests in these three companies.
Save as disclosed above, as at 30th June, 2003, no other person had an interest
or a short position in shares or underlying shares of the Company as recorded in
the register required to be kept by the Company pursuant to section 336 of the
SFO.
SHARE OPTION SCHEME
Details of the Directors' interest in the Old Scheme and the Existing Scheme
are set out in the sub-section headed "Long position in underlying shares of
the Company" under section headed "Directors" and chief executives'
interests and short positions in shares, underlying shares or debentures"
above.
Outstanding share options
As at 30th June, 2003, options to subscribe for an aggregate of 284,527,326
shares (which include the options granted to certain Directors as disclosed
above) of the Company granted pursuant to the Old Scheme and the Existing Scheme
were outstanding. Details are as follows:
Subscription
price
Number of share options per share Option period
HK$
18,479,248 1.752 20th May, 1994
to 20th May,
2004
50,200,000 0.3875 10th August,
1998
to 10th August,
2008
215,848,078 0.39 26th February,
2003
to 25th
February, 2013
PURCHASE, SALE OR REDEMPTION OF LISTED SECURITIES
There was no purchase, sale or redemption of the Company's listed securities by
the Company or any of its subsidiaries during the period under review.
CODE OF BEST PRACTICE
In the opinion of the Directors, the Company complied with the Code of Best
Practice as set out in Appendix 14 of the Listing Rules throughout the
accounting period covered by the interim report.
AUDIT COMMITTEE
The Audit Committee comprises the two independent non-executive directors of the
Company. The Audit Committee has reviewed with management the accounting
principles and practices adopted by the Group and discussed internal control and
financial reporting matters including the review of the unaudited interim
financial statements.
By Order of the Board
Dhanin Chearavanont
Chairman and Chief Executive Officer
Hong Kong, 22nd September, 2003
This information is provided by RNS
The company news service from the London Stock Exchange
END
IR SDESESSDSELU