TIDMCHNS 
 
RNS Number : 9258K 
China Shoto plc 
28 April 2010 
 

                                China Shoto plc 
                        ("China Shoto" or "the Group") 
 
                         Final Results & Notice of AGM 
 
China Shoto plc (AIM: CHNS), a leading Chinese producer of industrial batteries 
and power supply systems, announces its final results for the year ended 31 
December 2009. 
 
Highlights 
 
+--+----------+--------------------------------------------------------------------+ 
| -| Revenue up 16.1% to GBP 212.57 million (2008: GBP183.08 million)              | 
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| -| Pre-tax profit up 117.1% to GBP25.07 million (2008: GBP11.55 million)         | 
|  |                                                                               | 
+--+-------------------------------------------------------------------------------+ 
| -| Net profit up 131.4% to GBP 23.30 million(excluding minority interests)       | 
|  | (2008: GBP10.07 million)                                                      | 
|  |                                                                               | 
+--+-------------------------------------------------------------------------------+ 
| -           | Diluted earnings per share up 128% to 98.34p (2008: 43.14p)        | 
|             |                                                                    | 
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| -           | Granted 11 patents, bringing the total number of patents held to   | 
|             | 126 as at the period                                               | 
|             |                                                                    | 
+-------------+--------------------------------------------------------------------+ 
| -| Successful GBP1.82 million acquisition of battery recycling plant at January  | 
|  | 2010                                                                          | 
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| -| Full-year dividend of 5 pence per share recommended by the Board              | 
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|  |          |                                                                    | 
+--+----------+--------------------------------------------------------------------+ 
 
Notice of AGM 
 
Notice is hereby given that the Annual General Meeting of China Shoto plc will 
be held at 8th Floor, 131 Finsbury Pavement, London EC2A 1NT at 10.00 a.m. on 22 
June 2010. 
 
A full version of the Annual Report and Accounts, including Notice of Annual 
General Meeting, is set out below and is also available for download from the 
Company's web site at www.chinashoto.com. 
 
Yang Shanji, Chairman, commented: 
 
"With the recovery of the global economy, we are confident the development of 
overseas markets, especially in developing countries, will create and drive new 
demand for products from Chinese equipment suppliers. In 2010, the Group will 
accelerate the development of its overseas distribution networks and strengthen 
its sales push into international markets to maintain its growth momentum whilst 
continuing to deliver value to our shareholders." 
 
+----------------------------------+----------------------------------+ 
| For further information:         |                                  | 
+----------------------------------+----------------------------------+ 
| China Shoto plc                  | Tel: +44 (0) 20 7242 2666 / +86  | 
| Yang Shanji, Executive Chairman  | 159 6108 0515                    | 
|                                  | www.chinashoto.com               | 
|                                  |                                  | 
+----------------------------------+----------------------------------+ 
| Seymour Pierce Limited           | Tel: +44 (0) 20 7107 8000        | 
| Stewart Dickson                  | www.seymourpierce.com            | 
|                                  |                                  | 
+----------------------------------+----------------------------------+ 
| Media enquiries:                 |                                  | 
| Allan Piper/ Jiang Lei           | Tel: +44 (0) 20 7242 2666 / +852 | 
| lei@firstcitypr.com              | 2854 2666                        | 
|                                  | www.firstcitypr.cn               | 
+----------------------------------+----------------------------------+ 
 
 
 
China Shoto plc    To be A Green Energy Solution Provider 
Company Number: 05448599 
2009 Annual Report and Accounts 
 
Contents 
 
Directors, Secretary and Advisers 
Highlights 
Company Overview 
Chairman's Statement 
Finance Director's Report 
Board of Directors 
Directors' Report 
Corporate Governance 
Directors' Responsibility Statement 
Remuneration Report 
Independent Auditors' Report 
Consolidated Income Statement 
Consolidated Balance Sheet 
Consolidated Statement of Changes in Equity 
Consolidated Cash Flow Statements 
Notes to the Financial Statements 
Notice of Annual General Meeting 
Form of Proxy 
 
Directors, Secretary and Advisers 
 
Directors 
Yang Shanji (Executive Director) 
Qian Shan'gao (Executive Director) 
Zhou Yuezhang (Executive Director) 
Zhou Ping (Executive Director) 
Zhou Weigang (Executive Director) 
Bernard Harry Asher (Non-Executive Director) 
Peter Maurice Crystal (Non-Executive Director) 
Li Shuang (Non-Executive Director) 
 
Company Secretary 
Peter Maurice Crystal 
 
Registered Office 
The Broadgate Tower, 
20 Primrose Street, 
London EC2A 2RS 
 
Registered Number 
05448599 
 
Auditor 
BDO LLP 
2 City Place 
Beehive Ring Road 
Gatwick 
West Sussex 
RH6 0PA 
 
Nominated Adviser and Broker 
Seymour Pierce Limited 
20 Old Bailey 
 London EC4M 7EN 
 
Registrars 
Capita Registrars 
The Registry 
34 Beckenham Road 
Beckenham 
Kent BR3 4TU 
 
Solicitors 
Reed Smith LLP 
The Broadgate Tower, 
20 Primrose Street, 
London EC2A 2RS 
 
 
Company Overview 
 
Business Introduction 
China Shoto plc (the "Company") and its subsidiaries (referred to as the 
"Group") is mainly engaged in the production of back up batteries and power type 
batteries, the back up batteries used primarily by telecommunications operators, 
but also by customers in the power, railway, and power type batteries mainly 
used by electric bicycle manufacturer and retailing sectors. During the year 
ended 31 December, 2009, the Group remained the largest single supplier of 
batteries to China Unicom, China Mobile and China Telecom (China's three major 
telecom operators), and is the largest back up battery manufacturer in China. 
 
Total revenue increased by 16.1% to GBP212.57 million in 2009 (2008: GBP183.08 
million). Revenue from back up battery business in 2009 increased by 19.3% to 
GBP196.53 million (2008: GBP164.79 million). 
 
Acquisition 
In January 2010, the Group acquired a controlling equity interest in Rugao 
Tianpeng Metallurgy Co., Ltd ("Rugao Tianpeng") for a total consideration of 
GBP1.82 million. Rugao Tianpeng is mainly engaged in battery recycling business 
and is located in Rugao City, Jiangsu Province, China; within easy reach of the 
Group's production facilities in Jiangyan. 
 
Strategic Objective 
The Company has become the largest back up battery producer in China. As a China 
Environment Friendly Enterprise, the Company intends to become a green energy 
solution provider through enhancing R&D and progressive development of its 
existing and new green energy storage products. 
 
Products 
?AGM VRLA Battery ("AGM Battery") 
?GEL VRLA Battery ("GEL Battery") 
?Flooded Lead Acid Battery ("Flooded Battery") 
?Power Type Battery("PTB") 
 
Manufacturing 
The Group's factories are conveniently located in Jiangyan, Jiangsu Province, 
two hours from Shanghai, giving convenient access to well-developed 
transportation networks. 
 
The Group has 10 back up battery production lines and two power type battery 
production lines which are utilised according to market demand. The annual 
production capacity of the back up battery production lines is 3 million KVAH 
(1.0 KVAH is equivalent to one back up battery of 2V500AH). The annual 
production capacity of the power type battery production lines is 500,000 KVAH 
(0.12 KVAH is equivalent to one power type battery of 12V10AH). 
Products are manufactured according to international and domestic industrial 
standards and comply with the network license requirements of major countries in 
Europe, America and South Asia. The Group has also met the international 
authentication standards of other countries such as Indonesia, Russia and 
Nigeria, and of the International Electrotechnical Commission. 
 
Research and Development 
The Company's R&D Centre is mainly responsible for developing new types of GEL 
and AGM Battery, 12V 13AH Spiral Wound Battery and Super Capacitor, and for 
updating the technical development of existing products in all of those 
categories. 
 
Meanwhile, the Group's facilities have been inspected by the China Intellectual 
Property Bureau and approved as a National Class Intellectual Property Trial 
Unit, which will enhance market recognition of its independent research and 
innovation capability. It will also strongly support the Group's future 
application for status such as a High-New Technology Enterprise. 
 
Sales and Market 
Market sectors served include telecommunications, electric power, railways and 
electric bicycles sectors. 
 
Key Customers 
 
Back up battery business: 
China's three major telecoms operators remain our primary customers for back up 
batteries. Other major clients in this sector include ZTE Corporation and Huawei 
Technologies. 
 
Power type battery business: 
During 2009, demand for power type batteries shifted away from the primary 
market (where customers includes e-bike manufacturers) to the secondary market 
(where the customers were e-bike accessory distributors, repair shops, and 
retailers). The Group achieved new breakthroughs in provinces of Jiangsu, 
Shandong, Henan, Hebei, and Anhui, among others. 
 
Sales and Service Network 
The Group now has eighty nine domestic sales offices and five overseas offices 
in Duesseldorf, Dubai, Moscow, Singapore and New Delhi. 
 
 
Chairman's Statement 
 
During 2009, with a slow-moving global economy, the Company focused on its 
existing objectives, to improve the quality of its products and services and 
reduce cost. Additionally, we have strengthened market exploration, increased 
operational effectiveness, continued integration processes and maintained cost 
control. The efforts of our staff and the loyalty of our customers have enabled 
us to achieve a pleasing set of results. 
 
The dedication of the Company's senior management team has again been reflected 
in our strong performance and results. I would like to express my thanks to all 
of our customers and suppliers and commit to a continued effort to meet their 
needs and requirements. 
 
The Company will continue to improve its social responsibility, recycling, 
energy-saving and emission-reduction programmes for the wider economic benefit 
of the community. The Company has acquired Rugao Tianpeng, augmenting the 
battery recycling qualifications required by the telecom operators. The Company 
remains fully committed to supporting environmental programs within China and 
elsewhere and to being a green energy provider. 
 
In China, the Group remains the major supplier to nationwide units to the three 
biggest Chinese telecoms operators as well as to ZTE Corporation and Huawei 
Technologies. Overseas, the Group is continuing to implement its export strategy 
and is pleased to have signed framework agreements with Nokia Siemens Telecom 
and Emerson Network Energy Co., Ltd amongst others. A strong relationship with 
leading telecom operators worldwide should increase our brand recognition and 
enable the Company to be well-placed for the future in a changing market 
environment. 
 
Results and Dividend 
Revenue increased by 16.1% in 2009 to GBP 212.57 million (2008: GBP183.08 
million). 
 
Operating profit increased by 85.9% to GBP26.34 million (2008: GBP14.17 
million). 
 
Net profit for the financial year attributable to equity holders of the parent 
increased by 131.4% to GBP23.30 million (2008: GBP10.07 million). 
 
In our Interim Report published in September 2009, the Company undertook to 
carefully consider the distribution of a year-end dividend. I am delighted to 
announce that the Board recommends a full-year dividend of 5 pence per share. If 
approved by shareholders at the Annual General Meeting on 22 June 2010, the 
dividend will be paid on 30 June 2010 to shareholders on the register at the 
close of business on 18 June 2010, with the shares going ex-dividend on 16 June 
2010. The Company continues to put shareholders interests among the key 
considerations in its continued strategic development. 
 
Operating Overview 
 
Market Overview 
Business segments 
Back up batteries 
Sales revenue from the back up battery business in 2009 increased 19.3% to 
GBP196.53 million accounting for 92.5% of the Company revenue (2008: GBP164.79 
million and 90%). 
 
Power type batteries 
Sales from the power type battery business in 2009 reached at GBP16.04 million, 
accounting for 7.5% of the Company's revenues (2008: GBP18.29 million and 10%). 
 
Geographical segments 
Domestic sales 
Domestic sales in 2009 rose to GBP202.93 million and accounted for 95.5% of the 
Company's total revenues (2008: GBP153.37 million and 84%). 
 
Foreign sales 
Foreign sales in 2009 were GBP9.64 million, and accounted for 4.5% of the total 
(2008: GBP29.71 million and 16%). 
 
Key customers 
Back up batteries 
The year of 2009 was the third consecutive year in which the Group was the 
largest single supplier to China's three largest telecom operators and to ZTE 
Corporation and Huawei Technology. Sales to these customers accounted for 87% of 
total back up battery revenues. In December 2009, the Group signed a framework 
agreement with Nokia Siemens Networks, and during the year also has entered into 
business relationships with other overseas companies such as Indus Tower, 
Emerson, and General Electric. 
 
We are also pleased that our back up batteries will be used to provide power in 
many pavilions at the forthcoming Shanghai EXPO 2010 China. The use in China 
Mobile Pavilion, the Pacific United Nations Pavilion, and the International 
Organization United Pavilion, underscores the increasing brand recognition and 
popularity of our products. 
 
Power type batteries 
In 2009, the Company expanded and extended its distribution network for 
secondary market and bolstered its sales teams. Revenues from the secondary 
market of power type batteries accounted for 61.2% of the total power type 
battery revenue (2008: 31.1%). 
 
The Group strengthened its communications with customers through continued 
improvements to its technical support and after-sale services. 
In 2009, the Group strengthened its presence at key international telecom fairs, 
such as the Singapore Asia Telecom Fair, the Mobile World Congress 2009 (Spain), 
the Brazil International Telecommunications Exhibition, the Middle East (Abu 
Dhabi) International Communications Exhibition, the Moscow International Telecom 
Equipment Exhibition, the Switzerland ITU World Telecom Fair, the Beijing 
International Telecom Fair and the 7th International Lead Acid Battery 
Fair/Technical Communication held in China in 2009. 
 
Research and Development 
The R&D Centre is mainly responsible for developing products of new type GEL 
Batteries and new type AGM Batteries, Spiral Wound Batteries and Super 
Capacitors, and for updating the technical development of existing GEL 
Batteries, AGM Batteries, Power Type Batteries and Spiral Wound Batteries and 
Super Capacitors. 
 
Patents Granted 
During the reporting period, the Group was granted 11 patents, bringing the 
total number of patents awarded by the China Intellectual Property Bureau to 126 
in total, including 13 invention patents. 
 
Directorate Changes 
On 15 September 2009, Mr Cao Guifa resigned from the Board as Chairman, to be 
replaced by Mr Yang Shanji. Mr Qian Shangao was appointed as executive director 
on 15 October 2009. 
 
Social Responsibility 
As a National Environmentally Friendly Enterprise, we remain committed to 
commercial development in parallel with the Company's wider social 
responsibilities. Whilst balancing the requirements of our shareholders, staff, 
customers, suppliers, and social and environmental demands, we are committed to 
pursuing value for the benefit of the whole community. 
 
The Group has attained ISO14001 environment management system certification and 
GB/T18001 vocation health and safety management certification, and the Group's 
products have passed CE Verification, UL Verification and EU RoHS tests. 
 
Outlook 
China's major telecom operators invested heavily in 3G infrastructure 
construction during 2009 which fuelled a steady increase in demand for back up 
battery products. During 2010, they are expected to shift their investment 
priorities from infrastructure construction to product marketing and 
development. With less investment in domestic network construction, the total 
demand for back up battery products will reduce accordingly and this will bring 
new challenges as well as opportunities to the Group's business. However, with 
the recovery of the global economy, we are confident that the development of 
overseas markets, especially in developing countries, will create and drive new 
demand for products from Chinese equipment suppliers. In 2010, the Group will 
accelerate the development of its overseas distribution networks and strengthen 
its sales push into international markets to maintain its growth momentum whilst 
continuing to deliver value to our shareholders. 
 
Finally I take this opportunity to express my appreciation to Mr Cao Guifa who 
contributed to the development of the Company while he was a Chairman of the 
Company. Also I would like to thank our Directors, management and staff for 
their dedication in achieving our established objectives, and all of our 
investors and customers for their continued support and trust in the Company. 
 
 
Yang Shanji 
Chairman 
 
28 April 2010 
 
 
Finance Director's Report 
 
Results 
The Board regards the following measures as key performance indicators: 
 
Sales revenue increased by 16.1% to GBP 212.57 million (2008: GBP183.08 
million). 
 
Operating profit increased by 85.9% to GBP 26.34 million (2008: GBP14.17 
million). 
 
Pre-tax profit increased by 117.1% to GBP 25.07 million (2008: GBP11.55 
million). 
 
Net profit attributable to equity holders of the parent increased by 131.4% to 
GBP23.30 million (2008: GBP10.07 million). 
 
Diluted earnings per share from continuing operations in 2009 increased by 128% 
to 98.34p (2008: 43.14 p). 
 
Income Tax 
China Shoto plc 
China Shoto plc is a non-resident company registered in England and Wales and 
only subject to UK corporation tax for any activities undertaken in the UK. 
 
The latest taxation laws of the People's Republic of China, which came into 
effect on 1 January 2008, uniformly adjust the applicable income tax rate for 
both domestic capital and foreign capital enterprise to a rate of 25%. The Group 
and its significant subsidiary undertakings are subject to income tax at the 
following tax rates: 
 
Jiangsu Shuangdeng Group Co., Ltd ("JSG Co") 
As a foreign enterprise, JSG Co enjoys a preferential policy of a five-year 
transition period between new and old enterprise income tax laws. No tax was 
payable in 2009 and a half-relief tax rate of 12.5% will be applied from 2010 to 
2012, the full applicable income tax rate will be 25% from 2013. 
 
Jiangsu Fuste Power Supply Co., Ltd 
From 2009 tax year, the full income tax rate of 25% has been applied. 
 
Jiangsu Best Power Supply Co., Ltd 
The applicable income tax rate is 12.5% for the tax years 2009 and 2010. From 
the January of 2011, its applicable income tax rate will be 25%. 
 
Jiangsu Shuangdeng Power Supply Co., Ltd ("JS Power") 
The Company enjoys tax transitional preference for the years 2009 to 2010. Its 
applicable income tax rate is 20% for these years. 
 
Nanjing Shuangdeng Science and Technology Development Academy Co., Ltd 
Since 2008 is the first profit-making year for the Academy, it is entitled to 
income tax exemption in 2008 and 2009 and a half relief of 12.5% tax rate will 
be imposed in 2010, 2011 and 2012. After the preferential period, the applicable 
income tax rate will be 25%. 
 
Yangzhou Zhenghe Power Supply Co., Ltd 
The Company is entitled to a half relief of 12.5% for the years 2009 to 2011. 
Its applicable income tax will be 25% from 2012. 
 
Earnings and Dividends 
Diluted earnings per share increased 128% to 98.34p (2008: 43.14p). The Board 
recommends a full year dividend for 2009 of 5 pence per share. 
 
Shareholders' Equity 
The share of equity of the Company attributable to shareholders of the parent 
increased by 37.5% to GBP72.22 million in 2009 (2008: GBP52.52 million). 
Retained earnings in the Company increased by 108.8% to GBP33.03 million (2008: 
GBP15.82 million). 
 
Cash Flow 
The Company focused on improving cash flow management, enabled the net cash 
flows from operating activities to be GBP27.02 million (2008: GBP38.57 million) 
against the background of the global economic crisis. Net cash flow for the year 
was equivalent to 115.2% of net profit. 
 
Borrowing 
In 2009 the Group entered into credit agreements with the Jiangyan branch of 
China Construction Bank, the Jiangyan branch of Agricultural Bank of China, the 
Jiangyan branch of Industrial and Commercial Bank of China, the Nanjing branch 
of China Minsheng Banking Corp. Ltd, the Jiangyan branch of Bank of China, the 
Jiangyan branch of Bank of Communications, and the Nanjing branch of China 
Merchants Bank. On 31 December 2009, the Company's short term bank borrowing 
stood at GBP28.3 million compared with GBP32.8 million as at 31 December 2008. 
 
Cost management 
The Group reduced manufacturing wastages through product technological 
innovation, enhanced cost estimates and control, and more precise cost audits 
and management. 
 
Liquidity Risk 
Liquidity risk arises from the Group's management of working capital. The 
Company has financed its operations primarily through a mix of short-term and 
long-term borrowings. The Liquidity risk was significantly reduced by increasing 
facilities from the banks. 
 
Foreign Exchange Risk 
Foreign sales in 2009 were GBP9.64 million, accounting for 4.5% of total 
revenue. These sales were all settled in US Dollars currency which showed only 
small fluctuations against the RMB currency during 2009. 
The Company effectively reduced and controlled risks regarding export payment 
through the application of export credit insurance, letters of credit and 
advance payments, among other measures, alongside the application of effective 
financial instruments to reduce foreign exchange risks. 
 
Interest Rate Risk 
There is no significant interest rate risk for the Company and the main interest 
rate risk is the rate of return on short term cash deposit and bank 
borrowings. 
 
 
Zhou Weigang 
Finance Director 
28 April 2010 
 
 
Board of Directors 
 
Yang Shanji, Executive Chairman 
Yang Shanji has a Master's Degree in Administration and the title of Senior 
Economist. He is the main founder and the largest shareholder of the Company. He 
is Chairman of the Board and CEO of the Company. Mr. Yang is one of the pioneers 
in the China battery industry, and is the Vice Director of both the China 
Battery Industry Association and China Industrial Association of Power Sources. 
He has more than 29 years of senior enterprise management experience and has a 
strong reputation in the battery industry. Mr. Yang is regularly recognised for 
his work in the industry, receiving titles such as the National Model Labor in 
Light Industry and Top Ten Outstanding Men in the China Telecommunications Power 
Supply Industry on several occasions. 
 
Qian Shangao, Executive Director 
Mr. Qian Shangao has a Master's Degree. He is a senior engineer, the title of 
Senior Economist, and is one of the founders of JSG Co. He worked as a plant 
supervisor in Jiangsu Taixian Electric Cooking Utensils Factory from February 
1975 to March 1990. And from 1990 to 1995, he was the Deputy Director of the 
Jiangyan Sealed Storage Battery Factory (Jiangyan factory). He joined JS Power 
as Deputy General Manager when it was set up in 1995. Since September 2003 he 
has been Vice President of JSG Co. 
 
Zhou Yuezhang, Executive Director 
Zhou Yuezhang holds a Master's Degree and he is one of the founders of the JSG 
Co. From 1990 to 1995, he was the deputy Director of the Jiangyan Factory. He 
joined as deputy general manager when it was set up in 1995. He has been the 
Vice President of JSG Co since September 2003. Mr. Zhou has 20 years management 
experience in the lead acid battery industry. 
 
Zhou Ping, Executive Director 
Zhou Ping holds a Master's Degree, the title of Senior Economist, and has been 
appointed as Chief Marketing Officer of the Company. He is an economist with 16 
years' experience in the battery and industrial power supply sector, and works 
for the Group during this period. He is responsible for market planning and 
sales management for the Group. 
 
Zhou Weigang, Executive Director 
Zhou Weigang, holds a Master's Degree, the title of Senior Economist and is an 
accountant. He has been appointed as Chief Finance Officer of the Company. In 
2009, he was awarded with the title of "Provincial Advance Chief Financial 
Officer" by the Finance Office of Jiangsu Province, China. He has 29 years 
experience in senior accounting and corporate finance for Chinese industrial 
companies. He has served the Group for 12 years, most recently as the Group's 
financial controller in accounts, financial management and risk control for 10 
years. He was part of the team which assisted in the listing of the Company on 
the AIM market in December 2005. 
 
Bernard Harry Asher, Non-Executive Director 
Mr. Asher, who resides in London, was an Executive Director of HSBC Holdings 
from 1986 to 1998 and Chairman of HSBC Investment Bank. In 1998 Mr. Asher became 
Non-Executive Vice Chairman of the Legal & General Group, Chairman of Lonrho 
Africa, and a Non-Executive Director of Morgan Sindall, IMH (formerly Seymour 
Pierce Group plc) and TIR Capital Protection Fund. Mr. Asher is the Chairman of 
Liontrust, a UK based equity investment fund. Currently, Mr. Asher is a Director 
of Debts U.K. and Medicap. 
 
Li Shuang, Non-Executive Director 
Li Shuang is a Professor in the Central University of Finance and Economics. 
Professor Li acted as the Deputy Secretary-General of the Chinese Institute of 
Certified Public Accountants (CICPA) from 1999 to 2002, and then an advisor to 
CICPA from 2002-2004. Now he is the member of Accounting Society of China (ASC), 
and Director and member of CICPA and China Audit Society, a member of Academic 
Committee of Audit Society. He is also a Non-Executive Director of two companies 
listed in China and an Exterior Supervisor of a listed company. 
 
Peter Maurice Crystal, Non-Executive Director 
Mr. Crystal is a Non-Executive Director. He is a Solicitor and has over 30 
years' experience advising Directors and Companies whose shares are listed on 
the London Stock Exchange and AIM. Founder of law firm Memery Crystal, he 
specializes in matters relating to listed companies and advising on flotations, 
takeovers, mergers and all corporate finance activities. He is a graduate of 
Oxford and McGill Universities, a former Law Society Examiner, Director of 
several companies and a speaker on corporate finance and corporate governance. 
 
 
Directors' Report 
 
The Directors are pleased to submit the annual report and financial statements 
for the year ended 31 December 2009. 
 
Principal Activities 
The principal activity of China Shoto plc is acting as a holding company. Its 
subsidiaries mainly devote themselves to the design, development, manufacture 
and sale of back up or power type batteries. 
 
Business Review 
The Company has performed satisfactorily during the year and the trading 
performance materially exceeded expectations at the beginning of the year. 
 
The Income Statement of the Company shows revenue of GBP212.57 million for the 
year and profit attributable to equity holders of the parent of GBP23.30 million 
for the year. 
 
Revenue has increased by 16.1%. Back up battery revenue was GBP196.53 million in 
2009, which increased by 19.3% from GBP164.79 million in 2008. Further details 
of revenue by product segment are set out in note 26 to the accounts. 
 
Given the similarity of the business and customers of JS Power and JSG Co, in 
order to improve the comprehensive power of the Company, the Group merged the 
assets and business into JSG Co in November 2009. 
 
The Group successfully signed a share transfer agreement in January 2010 for a 
total consideration of GBP1.82 million for the entire share capital of Rugao 
Tianpeng. 
 
Further details of the Group's operations, performance and key performance 
indicators are set out in the Chairman's Statement and the Finance Director's 
Report. 
 
Principal Risks and Uncertainties 
Turbulence in global financial markets and economies may adversely affect the 
battery industry, the demand for our products operating results, financial 
condition and liquidity. 
 
Market Risks 
With the reduction of infrastructure investment by the major Chinese telecom 
operators in 2010, the domestic telecom market may experience increased levels 
of competition. This may generate some pressure on pricing and cost. 
Specifically it may result in a decrease of the sales price of the Company's 
products which may in turn bring down sales margins. 
 
Acquisition Risk 
In January 2010, we acquired the company Rugao Tianpeng. However, the 
acquisition could expose us to potential risks, including risks associated with 
the management of new operations, technologies and personnel. 
 
Foreign Exchange Rate Risk 
The Company's exports markets are exposed to fluctuating foreign exchange rate 
which may influence the Company's sales and profitability overseas. Other forms 
of financial risk are discussed further in note 23 to the financial statements. 
 
Dividend 
The Board recommends a full year dividend of 5 pence per share. If approved by 
shareholders at the Annual General Meeting on 22 June 2010, the dividend will be 
paid on 30 June 2010 to shareholders on the register at the close of business on 
18 June 2010, with the shares going ex-dividend on 16 June 2010. 
 
Substantial Shareholders 
The Company has not been notified of any beneficial interests, other than those 
of the Directors, in 3% or more of the issued share capital of the Company. 
 
Directorate Changes 
On 15 September 2009, Mr Cao Guifa resigned from the Board as Chairman to be 
replaced by Mr Yang Shanji. Mr Qian Shangao was appointed as Executive Director 
of the Company on 15 October 2009. 
 
Employee Policy 
As a China Environment Friendly Enterprise, we work to identify and minimise all 
health and safety risks in daily operations and in the production process. We 
also provide regular physical examination and occupational health and safety 
training for all employees. The Group also pays for endowment insurance, medical 
insurance, and unemployment insurance, as well as providing a housing fund for 
all employees in line with relevant national regulations. 
 
The Group is committed to equal opportunities for its employees regardless of 
gender, age and religion and it rejects other forms of discrimination. Personnel 
are selected on the basis of merit and capability. 
 
Environmental Policy 
The Group passed the certification of ISO14001 and GB/T18001 vocation health and 
safety management and its products passed the CE Verification, UL Verification 
and EU RoHS test. Its subsidiary, JS Power, successfully signed a strategic 
cooperation agreement, the "Green Action Program", with China Mobile. As a China 
Environment Friendly Enterprise, environment protection is always integrated 
into planning by the Group which is demonstrated in our purchasing policies for 
equipment and raw materials, recycling of waste residue and purification of 
waste water. 
 
Creditor Payment Policy 
The Group pays for the main raw material (lead ingot) by cash on delivery. The 
payment for other raw materials is by bank acceptance with six months' 
maturity. 
 
Financing 
The Group currently uses bank borrowings of one year's maturity to provide 
finance for working capital requirements. Given the trading performance, the 
Company will continue to operate as a going concern in the foreseeable future. 
 
Financial Instrument 
The Company has its own cash resource and foreign exchange account which is 
managed to reduce exchange rate risk from transactions not denominated in RMB. 
The Company has not undertaken any transactions in financial derivatives. For 
further information on financial instruments please see note 23 to the financial 
statements. 
 
Communication with Shareholders and the Market 
The annual report and financial statements and interim statements are the 
primary vehicles for communication with shareholders. Meetings with significant 
shareholders are arranged through our Nominated Advisor Seymour Pierce Limited, 
and take place after the Final and Interim Financial Statements are published. 
Such meetings may also take place after other significant announcements, if any, 
are made to the market. 
 
Reports published by the Group's broker are another means of communication with 
shareholders and the market.  General information about the business is also 
available on the Company's website: www.chinashoto.com. 
 
Annual General Meeting 
The Annual General Meeting ("AGM") will be held on 22nd June, 2010 in London. 
Full details of the AGM and the resolutions to be put to the meeting are given 
in the notice of the AGM of this Annual Report. 
 
Auditors 
In accordance with Section 485 of the Companies Act 2006, a resolution for the 
re-appointment of BDO LLP as auditor of the Company is to be proposed at the 
AGM. 
 
All of the current directors have taken all the steps that they ought to have 
taken to make themselves aware of any information needed by the auditors for the 
purposes of their audit and to establish that the auditors are aware of the 
information. The directors are not aware of any relevant audit information of 
which the auditors are unaware. 
 
 
 
By order of the board 
Peter Maurice Crystal 
Company Secretary 
 
 
Corporate Governance 
 
Introduction 
The Board of Directors is accountable to the Company's shareholders for good 
corporate governance. Although the Company's shares are traded on AIM, the 
Directors plan to comply with the Combined Code where practicable and 
appropriate. 
 
Below is a brief description of the role of the Board and its committees, 
followed by a statement regarding the Group's system of internal financial 
control. 
 
The Board and its Committees 
The Board 
The Board comprises eight Directors, five of whom are Executive Directors and 
three of whom are Non-Executive directors. The Board believes this balance to be 
appropriate. The Board is responsible to shareholders for the proper management 
of the Group and it meets not less than four times a year, sometimes by 
telephone, in order to review trading performance, ensure adequate funding, set 
and monitor strategy, examine acquisition opportunities and capital expenditure 
projects, report to shareholders and to consider any major issues that arise. 
 
Audit Committee 
The Audit Committee, which is chaired by Li Shuang, comprises the three 
Non-Executive Directors only. It meets at least once a year. 
 
The Audit Committee receives and reviews reports from management and the Group's 
auditors relating to the Interim and Annual Financial Statements and the 
accounting and internal control systems in use throughout the Group. The Audit 
Committee has unrestricted access to the Group's auditors. 
 
The Audit Committee advises the Board on the appointment of external auditors 
and their remuneration and discusses the nature and scope of the audit with the 
external auditors. 
 
A formal statement of independence is received from the external auditors each 
year. 
 
Remuneration Committee 
The Remuneration Committee is chaired by Peter Maurice Crystal and includes 
Bernard Asher and Qian Shangao. It meets at least once a year. 
 
It is responsible for reviewing the scale and structure of the Executive 
Directors' and senior employees' remuneration and the terms of their service or 
employment contracts including share option schemes and bonus arrangement. The 
remuneration and terms and conditions of the employment contracts of the 
Non-Executive Directors are set by the entire Board. 
 
Internal Control and Risk Management 
The Board is responsible for establishing and maintaining the Group's system of 
internal control. The key procedures, which the Directors have established with 
a view to providing effective internal controls, are as follows: 
 
l Management structure 
The Board has overall responsibility for the Company. Executive Directors 
together with key senior executives at the Company's level meet monthly to 
discuss sales and day to day operational matters. The subsidiary undertakings of 
the Group also hold monthly management meetings to summarize operating 
activities, as well as additional meetings on matters such as quality analysis 
and control, and financial cost analysis. 
 
l Identification of business risks 
The Board is responsible for identifying the major business risks faced by the 
Group and for determining the appropriate course of action to manage those 
risks. 
 
The Board has established a sound risk evaluation and control system and ensures 
that directed measures be taken to manage such risks after identifying and 
evaluating them. In addition, the directors take responsibility for monitoring 
changes in economic activity and the external environment, and communicate with 
members of the Company internal and external auditors. 
 
The Board and the Audit Committee have reviewed the effectiveness of the 
internal control system. 
 
l Budgetary process 
Each year the Board approves the annual budget, and key risk areas are 
identified.  Performance is monitored and relevant action is taken throughout 
the year through the quarterly reporting to the Board of variances from the 
budget, updated forecasts for the year and information on the key risk areas. 
 
 
Directors' Responsibilities Statement 
 
The directors are responsible for preparing the annual report and the financial 
statements in accordance with applicable law and regulations. 
 
Company law requires the directors to prepare financial statements for each 
financial year. Under that law the directors have elected to prepare the group 
and company financial statements in accordance with International Financial 
Reporting Standards ("IFRS"s) as adopted by the European Union. Under company 
law the directors must not approve the financial statements unless they are 
satisfied that they give a true and fair view of the state of affairs of the 
group and company and of the profit or loss of the group for that period. The 
directors are also required to prepare financial statements in accordance with 
the rules of the London Stock Exchange for companies trading securities on the 
Alternative Investment Market. 
 
In preparing these financial statements, the directors are required to: 
 
·       select suitable accounting policies and then apply them consistently; 
 
·       make judgments and accounting estimates that are reasonable and 
prudent; 
 
·       state whether they have been prepared in accordance with IFRSs as 
adopted by the European Union, subject to any material departures disclosed and 
explained in the financial statements; 
 
·       prepare the financial statements on the going concern basis unless it is 
inappropriate to presume that the company will continue in business. 
 
The Directors are responsible for keeping adequate accounting records that are 
sufficient to show and explain the company's transactions and disclose with 
reasonable accuracy at any time the financial position of the company and enable 
them to ensure that the financial statements comply with the requirements of the 
Companies Act 2006. They are also responsible for safeguarding the assets of the 
company and hence for taking reasonable steps for the prevention and detection 
of fraud and other irregularities. 
 
Website publication 
 
The directors are responsible for ensuring the annual report and the financial 
statements are made available on a website. Financial statements are published 
on the company's website in accordance with legislation in the United Kingdom 
governing the preparation and dissemination of financial statements, which may 
vary from legislation in other jurisdictions. The maintenance and integrity of 
the company's website is the responsibility of the directors. The Directors' 
responsibility also extends to the ongoing integrity of the financial statements 
contained therein. 
 
Remuneration Report 
 
Remuneration Policy 
The aim of the Company's remuneration policy is to reward the performance of the 
employees and thereby enhance shareholder value. Remuneration of the Executives 
of the Company is designed to provide rewards that will attract and retain high 
quality executives capable of achieving the Group's performance targets on both 
an annual and a long term basis. 
 
At the time of the listing of the Company, it was decided that the remuneration 
policy then in operation would remain in place, and that adjustments to that 
policy would be made at the appropriate time. 
 
The Remuneration Committee 
The principal functions of the Remuneration Committee are to review the 
remuneration packages of Directors and senior employees of the Group and its 
subsidiaries. The Remuneration Committee can modify and draft the remuneration 
terms or, if appropriate, suggest changes and reports to the Board for 
approval. 
 
The Committee also reviews all service contracts for senior staff. 
 
The Board (excluding the Non-Executive Directors) determines the remuneration of 
Non-Executive Directors. 
 
Directors' Remuneration 
Executive Directors 
The main components of Executive Directors' remuneration are: 
Salary 
The basic salary of each Director is determined by taking into account the 
Director's experience, responsibility and value to the Company. 
 
Bonus awards 
In addition to the salary, all Executive Directors were eligible for a 
performance-related bonus. The bonus was based on the annual budget and linked 
to achieving specified executive tasks during the year ended 31 December 2009. 
The targets were designed to ensure that the total remuneration varies in line 
with company performance. 
 
Benefits 
Benefits for the Executive Directors include medical insurance and contribution 
by the Company to the State Pension Scheme (which is subject to stipulations of 
the State). 
 
Non-Executive Directors 
The fees of the Non-Executive Directors reflect the time that they are required 
to commit to their duties. 
 
Remuneration 
The remuneration of the Directors for the year ended 31 December 2009 is set out 
in note 5 to Financial Statements. 
 
Share Options 
The share options of the following Directors that had interests in options to 
subscribe for ordinary shares are set out below: 
 
+----------+---------+---------+----------+--------+----------+ 
| Name     |   As at |    % of | Exercise |   Date | Exercise | 
|          |  31 Dec |  Issued |    price |     of |   period | 
|          |    2009 | Capital |          |  grant |          | 
|          |  and 31 |         |          |        |          | 
|          |     Dec |         |          |        |          | 
|          |    2008 |         |          |        |          | 
+----------+---------+---------+----------+--------+----------+ 
| Yang     | 500,000 |   2.14% |  GBP1.30 | 30 Nov |      Dec | 
| Shanji   |         |         |          |   2005 | 2008-Dec | 
|          |         |         |          |        |     2015 | 
+----------+---------+---------+----------+--------+----------+ 
| Qian     | 100,000 |    0.5% |  GBP1.30 | 30 Nov |      Dec | 
| Shangao  |         |         |          |   2005 | 2008-Dec | 
|          |         |         |          |        |     2015 | 
+----------+---------+---------+----------+--------+----------+ 
| Zhou     | 200,000 |   0.86% |  GBP1.30 | 30 Nov |      Dec | 
| Yuezhang |         |         |          |   2005 | 2008-Dec | 
|          |         |         |          |        |     2015 | 
+----------+---------+---------+----------+--------+----------+ 
| Zhou     | 100,000 |    0.5% |  GBP1.30 | 30 Nov |      Dec | 
| Ping     |         |         |          |   2005 | 2008-Dec | 
|          |         |         |          |        |     2015 | 
+----------+---------+---------+----------+--------+----------+ 
| Zhou     | 100,000 |    0.5% |  GBP1.30 | 30 Nov |      Dec | 
| Weigang  |         |         |          |   2005 | 2008-Dec | 
|          |         |         |          |        |     2015 | 
+----------+---------+---------+----------+--------+----------+ 
 
Mr. Cao Guifa cancelled his right to exercise his 300,000 options during the 
year ended 31 December 2009. 
 
Contracts of Service 
The service agreements with each of the Executive Directors are terminable on 12 
months' notice by either party. 
 
The Non-Executive directors all have letters of appointment with an initial 
fixed term of 12 months. The appointment may be terminated at any time 
thereafter by six months' written notice. 
 
 
Independent Auditor'sReport 
 
TO THE MEMBERS OF CHINA SHOTO PLC 
 
We have audited the financial statements of China Shoto plc for the year ended 
31 December 2009 which comprise the consolidated income statement, the 
consolidated and company balance sheets, the consolidated and company statements 
of changes in equity and the consolidated and company cash flow statements and 
the related notes.The financial reporting framework that has been applied in 
their preparation is applicable law and International Financial Reporting 
Standards (IFRSs) as adopted by the European Union and, as regards the parent 
company financial statements, as applied in accordance with the provisions of 
the Companies Act 2006. 
 
This report is made solely to the company's members, as a body, in accordance 
with Chapter 3 of Part 16 of the Companies Act 2006. Our audit work has been 
undertaken so that we might state to the company's members those matters we are 
required to state to them in an auditor's report and for no other purpose. To 
the fullest extent permitted by law, we do not accept or assume responsibility 
to anyone other than the company and the company's members as a body, for our 
audit work, for this report, or for the opinions we have formed. 
 
Respective responsibilities of directors and auditors 
 
As explained more fully in the statement of directors' responsibilities, the 
directors are responsible for the preparation of the financial statements and 
for being satisfied that they give a true and fair view. Our responsibility is 
to audit the financial statements in accordance with applicable law and 
International Standards on Auditing (UK and Ireland). Those standards require us 
to comply with the Auditing Practices Board's (APB's) Ethical Standards for 
Auditors. 
 
Scope of the audit of the financial statements 
 
An audit involves obtaining evidence about the amounts and disclosures in the 
financial statements sufficient to give reasonable assurance that the financial 
statements are free from material misstatement, whether caused by fraud or 
error. This includes an assessment of: whether the accounting policies are 
appropriate to the group's and the parent company's circumstances and have been 
consistently applied and adequately disclosed; the reasonableness of significant 
accounting estimates made by the directors; and the overall presentation of the 
financial statements. 
 
Opinion on financial statements 
 
In our opinion: 
 
·      the financial statements give a true and fair view of the state of the 
group's and the parent company's affairs as at 31 December 2009 and of the 
group's profit for the year then ended; 
 
·      the group financial statements have been properly prepared in accordance 
with IFRSs as adopted by the European Union; 
 
·      the parent company financial statements have been properly prepared in 
accordance with IFRSs as adopted by the European Union and as applied in 
accordance with the provisions of the Companies Act 2006; and 
 
·      the financial statements have been prepared in accordance with the 
requirements of the Companies Act 2006. 
 
Opinion on other matters prescribed by the Companies Act 2006 
 
In our opinion the information given in the highlights summary, company 
overview, chairman's statement, finance director's report, board of director's 
profile, directors' report, corporate governance statement and remuneration 
report for the financial year for which the financial statements are prepared is 
consistent with the financial statements. 
 
Matters on which we are required to report by exception 
 
We have nothing to report in respect of the following matters where the 
Companies Act 2006 requires us to report to you if, in our opinion: 
 
·      adequate accounting records have not been kept by the parent company, or 
returns adequate for our audit have not been received from branches not visited 
by us; or 
·      the parent company financial statements are not in agreement with the 
accounting records and returns; or 
·      certain disclosures of directors' remuneration specified by law are not 
made; or 
·      we have not received all the information and explanations we require for 
our audit. 
 
James Roberts (senior statutory auditor) 
For and on behalf of BDO LLP, statutory auditor 
Gatwick 
United Kingdom 
28 April 2010 
BDO LLP is a limited liability partnership registered in England and Wales (with 
registered number OC305127). 
 
 
Consolidated Income Statement 
+---------------------------------------------------------+----------------+----------------+----------------+----------------+ 
|                                                         |                |           2009 |                |           2008 | 
+---------------------------------------------------------+----------------+----------------+----------------+----------------+ 
| For the year ended 31 December 2009                     |     Notes      |        GBP000  |                |         GBP000 | 
+---------------------------------------------------------+----------------+----------------+----------------+----------------+ 
|                                                         |                |                |                |                | 
+---------------------------------------------------------+----------------+----------------+----------------+----------------+ 
| Revenue                                                 |       3        |       212,569  |                |       183,083  | 
+---------------------------------------------------------+----------------+----------------+----------------+----------------+ 
| Cost of sales                                           |                |      (144,547) |                |      (134,794) | 
+---------------------------------------------------------+----------------+----------------+----------------+----------------+ 
| Gross profit                                            |                |        68,022  |                |        48,289  | 
+---------------------------------------------------------+----------------+----------------+----------------+----------------+ 
| Other operating income                                  |       3        |         4,540  |                |           382  | 
+---------------------------------------------------------+----------------+----------------+----------------+----------------+ 
| Distribution expenses                                   |                |       (31,653) |                |       (23,259) | 
+---------------------------------------------------------+----------------+----------------+----------------+----------------+ 
| Administrative expenses                                 |                |       (11,766) |                |       (10,866) | 
+---------------------------------------------------------+----------------+----------------+----------------+----------------+ 
| Other operating expenses                                |                |        (2,804) |                |          (377) | 
+---------------------------------------------------------+----------------+----------------+----------------+----------------+ 
| Profit from operations                                  |       4        |        26,339  |                |        14,169  | 
+---------------------------------------------------------+----------------+----------------+----------------+----------------+ 
| Finance income                                          |       3        |           440  |                |           194  | 
+---------------------------------------------------------+----------------+----------------+----------------+----------------+ 
| Finance costs                                           |       6        |        (1,705) |                |        (2,811) | 
+---------------------------------------------------------+----------------+----------------+----------------+----------------+ 
| Profit before tax                                       |                |        25,074  |                |        11,552  | 
+---------------------------------------------------------+----------------+----------------+----------------+----------------+ 
| Tax expense                                             |       7        |        (1,610) |                |        (1,258) | 
+---------------------------------------------------------+----------------+----------------+----------------+----------------+ 
| Profit after tax                                        |                |        23,464  |                |        10,294  | 
+---------------------------------------------------------+----------------+----------------+----------------+----------------+ 
| Attributable to :                                       |                |                |                |                | 
+---------------------------------------------------------+----------------+----------------+----------------+----------------+ 
| Owners of the parent                                    |                |        23,304  |                |        10,070  | 
+---------------------------------------------------------+----------------+----------------+----------------+----------------+ 
| Non-controlling interests                               |                |           160  |                |           224  | 
+---------------------------------------------------------+----------------+----------------+----------------+----------------+ 
|                                                         |                |        23,464  |                |        10,294  | 
+---------------------------------------------------------+----------------+----------------+----------------+----------------+ 
| Earnings per share for profit attributable to the       |                |                |                |                | 
+---------------------------------------------------------+----------------+----------------+----------------+----------------+ 
| equity shareholders of the parent during the year       |                |                |                |                | 
+---------------------------------------------------------+----------------+----------------+----------------+----------------+ 
| -Basic                                                  |       9        |         99.83p |                |         43.14p | 
+---------------------------------------------------------+----------------+----------------+----------------+----------------+ 
| -Diluted                                                |       9        |         98.34p |                |         43.14p | 
+---------------------------------------------------------+----------------+----------------+----------------+----------------+ 
|                                                         |                |                |                |                | 
+---------------------------------------------------------+----------------+----------------+----------------+----------------+ 
|                                                         |                |                |                |                | 
+---------------------------------------------------------+----------------+----------------+----------------+----------------+ 
|                                                         |                |           2009 |                |           2008 | 
+---------------------------------------------------------+----------------+----------------+----------------+----------------+ 
|                                                         |                |         GBP000 |                |         GBP000 | 
+---------------------------------------------------------+----------------+----------------+----------------+----------------+ 
|                                                         |                |                |                |                | 
+---------------------------------------------------------+----------------+----------------+----------------+----------------+ 
| Profit for the year                                     |                |        23,464  |                |        10,294  | 
+---------------------------------------------------------+----------------+----------------+----------------+----------------+ 
| Other comprehensive income                              |                |                |                |                | 
+---------------------------------------------------------+----------------+----------------+----------------+----------------+ 
| Exchange differences on translating foreign operations  |                |        (2,855) |                |       13,740   | 
+---------------------------------------------------------+----------------+----------------+----------------+----------------+ 
| Total comprehensive income for the year                 |                |        20,609  |                |        24,034  | 
+---------------------------------------------------------+----------------+----------------+----------------+----------------+ 
|                                                         |                |                |                |                | 
+---------------------------------------------------------+----------------+----------------+----------------+----------------+ 
| Total comprehensive income attributable to:             |                |                |                |                | 
+---------------------------------------------------------+----------------+----------------+----------------+----------------+ 
| Owners of the parent                                    |                |        20,521  |                |        23,529  | 
+---------------------------------------------------------+----------------+----------------+----------------+----------------+ 
| Non-controlling interest                                |                |            88  |                |           505  | 
+---------------------------------------------------------+----------------+----------------+----------------+----------------+ 
|                                                         |                |        20,609  |                |        24,034  | 
+---------------------------------------------------------+----------------+----------------+----------------+----------------+ 
|                                                         |                |                |                |                | 
+---------------------------------------------------------+----------------+----------------+----------------+----------------+ 
 
The accompanying notes form an integral part of the consolidated financial 
statement. 
 
 
Consolidated Balance Sheet 
As at 31 December 2009 
Company Number: 05448599 
 
 
 
+-----------------------+---+-------+------------+----------+-----------+----------+ 
|                       |   |       |      Group |  Company |     Group |  Company | 
+-----------------------+---+-------+------------+----------+-----------+----------+ 
|                       |   | Notes |       2009 |     2009 |      2008 |     2008 | 
+-----------------------+---+-------+------------+----------+-----------+----------+ 
| Assets                |   |       |    GBP000  |   GBP000 |    GBP000 |   GBP000 | 
|                       |   |       |            |          |           |          | 
+-----------------------+---+-------+------------+----------+-----------+----------+ 
| Non-current assets    |   |       |            |          |           |          | 
+-----------------------+---+-------+------------+----------+-----------+----------+ 
| Property, plant and   |   | 10    |    26,791  |       -  |   25,249  |       -  | 
| equipment             |   |       |            |          |           |          | 
+-----------------------+---+-------+------------+----------+-----------+----------+ 
| Intangible assets     |   | 12    |     2,565  |       -  |    3,123  |       -  | 
+-----------------------+---+-------+------------+----------+-----------+----------+ 
| Deferred tax assets   |   | 20    |       198  |       -  |       43  |       -  | 
+-----------------------+---+-------+------------+----------+-----------+----------+ 
| Investment in         |   |       |         -  |  20,977  |        -  |  20,977  | 
| subsidiary            |   |       |            |          |           |          | 
| undertaking           |   |       |            |          |           |          | 
+-----------------------+---+-------+------------+----------+-----------+----------+ 
| Due from related      |   | 19    |         -  |  11,238  |        -  |  12,620  | 
| parties               |   |       |            |          |           |          | 
+-----------------------+---+-------+------------+----------+-----------+----------+ 
|                       |   |       |    29,554  |  32,215  |   28,415  |  33,597  | 
+-----------------------+---+-------+------------+----------+-----------+----------+ 
| Current assets        |   |       |            |          |           |          | 
+-----------------------+---+-------+------------+----------+-----------+----------+ 
| Inventories           |   | 13    |    36,875  |       -  |   28,410  |       -  | 
+-----------------------+---+-------+------------+----------+-----------+----------+ 
| Trade and other       |   | 14    |    47,079  |       -  |   36,056  |       -  | 
| receivables           |   |       |            |          |           |          | 
+-----------------------+---+-------+------------+----------+-----------+----------+ 
| Short-term            |   | 15    |     5,685  |       -  |    3,946  |       -  | 
| investments           |   |       |            |          |           |          | 
+-----------------------+---+-------+------------+----------+-----------+----------+ 
| Cash and cash         |   | 16    |    63,995  |     254  |   50,797  |     197  | 
| equivalents           |   |       |            |          |           |          | 
+-----------------------+---+-------+------------+----------+-----------+----------+ 
|                       |   |       |   153,634  |     254  |  119,209  |     197  | 
+-----------------------+---+-------+------------+----------+-----------+----------+ 
| Total assets          |   |       |   183,188  |  32,469  |  147,624  |  33,794  | 
+-----------------------+---+-------+------------+----------+-----------+----------+ 
| Liabilities           |   |       |            |          |           |          | 
+-----------------------+---+-------+------------+----------+-----------+----------+ 
| Current liabilities   |   |       |            |          |           |          | 
+-----------------------+---+-------+------------+----------+-----------+----------+ 
| Bank borrowings       |   | 17    |    28,329  |       -  |   32,845  |       -  | 
+-----------------------+---+-------+------------+----------+-----------+----------+ 
| Trade and other       |   | 18    |    72,173  |      52  |   61,122  |      52  | 
| payables              |   |       |            |          |           |          | 
+-----------------------+---+-------+------------+----------+-----------+----------+ 
| Income tax payable    |   |       |        60  |       -  |      164  |       -  | 
+-----------------------+---+-------+------------+----------+-----------+----------+ 
|                       |   |       |   100,562  |      52  |   94,131  |      52  | 
+-----------------------+---+-------+------------+----------+-----------+----------+ 
| Non-current           |   |       |            |          |           |          | 
| liabilities           |   |       |            |          |           |          | 
+-----------------------+---+-------+------------+----------+-----------+----------+ 
| Bank borrowings       |   | 17    |     1,366  |       -  |        -  |       -  | 
+-----------------------+---+-------+------------+----------+-----------+----------+ 
| Long term             |   |       |     7,775  |       -  |        -  |       -  | 
| payable-Payroll       |   |       |            |          |           |          | 
+-----------------------+---+-------+------------+----------+-----------+----------+ 
| Deferred income       |   |       |       455  |       -  |        -  |       -  | 
+-----------------------+---+-------+------------+----------+-----------+----------+ 
| Due to related        |   | 19    |         -  |     369  |        -  |   2,945  | 
| parties               |   |       |            |          |           |          | 
+-----------------------+---+-------+------------+----------+-----------+----------+ 
|                       |   |       |     9,596  |     369  |        -  |   2,945  | 
+-----------------------+---+-------+------------+----------+-----------+----------+ 
| Total liabilities     |   |       |   110,158  |     421  |   94,131  |   2,997  | 
+-----------------------+---+-------+------------+----------+-----------+----------+ 
|                       |   |       |            |          |           |          | 
+-----------------------+---+-------+------------+----------+-----------+----------+ 
| Capital and reserves  |   |       |            |          |           |          | 
+-----------------------+---+-------+------------+----------+-----------+----------+ 
| Share capital         |   | 21    |     2,334  |   2,334  |    2,334  |   2,334  | 
+-----------------------+---+-------+------------+----------+-----------+----------+ 
| Share premium         |   | 22    |     8,630  |   8,630  |    8,630  |   8,630  | 
+-----------------------+---+-------+------------+----------+-----------+----------+ 
| Other reserves        |   | 22    |     2,916  |  18,462  |    2,916  |  18,462  | 
+-----------------------+---+-------+------------+----------+-----------+----------+ 
| Share option reserve  |   | 22    |       977  |     977  |      977  |     977  | 
+-----------------------+---+-------+------------+----------+-----------+----------+ 
| Statutory reserves    |   | 22    |    14,529  |       -  |    9,252  |       -  | 
+-----------------------+---+-------+------------+----------+-----------+----------+ 
| Retained earnings     |   | 22    |    33,033  |   1,645  |   15,823  |     394  | 
+-----------------------+---+-------+------------+----------+-----------+----------+ 
| Foreign currency      |   | 22    |     9,805  |       -  |   12,588  |       -  | 
| translation reserve   |   |       |            |          |           |          | 
+-----------------------+---+-------+------------+----------+-----------+----------+ 
| Total equity          |   |       |    72,224  |  32,048  |   52,520  |  30,797  | 
| attributable to       |   |       |            |          |           |          | 
| equity holders        |   |       |            |          |           |          | 
+-----------------------+---+-------+------------+----------+-----------+----------+ 
| Non-controlling       |   |       |       806  |       -  |      973  |       -  | 
| interests             |   |       |            |          |           |          | 
+-----------------------+---+-------+------------+----------+-----------+----------+ 
| Total equity and      |   |       |   183,188  |  32,469  |  147,624  |  33,794  | 
| liabilities           |   |       |            |          |           |          | 
+-----------------------+---+-------+------------+----------+-----------+----------+ 
|                       |   |       |            |          |           |          | 
+-----------------------+---+-------+------------+----------+-----------+----------+ 
 
 
The financial statements were approved and authorised for issue by the Board of 
Directors on 28 April 2010 and signed on its behalf by: 
 
 
Shanji Yang 
Chief Executive 
 
The accompanying notes form an integral part of the consolidated financial 
statements. 
 
 
Consolidated statement of changes in equity 
For the year ended 31 December 2009 
+-----------------+---------+---------+----------+---------+-----------+----------+-------------+---------+-----------------+---------+ 
|                 |                                                                                       |                 |         | 
| Group           |                            Attributable to equity holders                             |                 |         | 
+-----------------+---------------------------------------------------------------------------------------+-----------------+---------+ 
|                 |   Share |   Share |   Other  |   Share | Statutory | Retained |     Foreign |   Total | Non-controlling |   Total | 
|                 | Capital | Premium | Reserves |  option |  Reserves | Earnings |    currency |         |       interests |         | 
|                 |         |         |          | Reserve |           |          | translation |         |                 |         | 
|                 |         |         |          |         |           |          |     Reserve |         |                 |         | 
|                 |         |         |          |         |           |          |             |         |                 |         | 
+-----------------+         +         +          +         +           +          +             +         +                 +         + 
|                 |         |         |          |         |           |          |             |         |                 |         | 
+-----------------+         +         +          +         +           +          +             +         +                 +         + 
|                 |         |         |          |         |           |          |             |         |                 |         | 
+-----------------+---------+---------+----------+---------+-----------+----------+-------------+---------+-----------------+---------+ 
|                 |    Note |    Note |     Note |    Note |      Note |     Note |     Note 22 |         |                 |         | 
|                 |      21 |      22 |       22 |      22 |        22 |       22 |             |         |                 |         | 
+-----------------+---------+---------+----------+---------+-----------+----------+-------------+---------+-----------------+---------+ 
|                 |  GBP000 |  GBP000 |   GBP000 |  GBP000 |    GBP000 |   GBP000 |      GBP000 |  GBP000 |          GBP000 |  GBP000 | 
+-----------------+---------+---------+----------+---------+-----------+----------+-------------+---------+-----------------+---------+ 
|                 |         |         |          |         |           |          |             |         |                 |         | 
+-----------------+---------+---------+----------+---------+-----------+----------+-------------+---------+-----------------+---------+ 
| Balance as at 1 |   2,334 |   8,630 |    2,916 |     679 |     6,678 |    9,727 |       (871) | 30,093  |            468  | 30,561  | 
| January 2008    |         |         |          |         |           |          |             |         |                 |         | 
+-----------------+---------+---------+----------+---------+-----------+----------+-------------+---------+-----------------+---------+ 
| Total           |       - |    -    |     -    |    -    |         - |   10,070 |      13,459 | 23,529  |            505  | 24,034  | 
| comprehensive   |         |         |          |         |           |          |             |         |                 |         | 
| income          |         |         |          |         |           |          |             |         |                 |         | 
+-----------------+---------+---------+----------+---------+-----------+----------+-------------+---------+-----------------+---------+ 
| Transfer to     |       - |    -    |     -    |       - |     2,574 |  (2,574) |             |         |                 |         | 
| statutory       |         |         |          |         |           |          | -           | -       | -               | -       | 
| reserve         |         |         |          |         |           |          |             |         |                 |         | 
+-----------------+---------+---------+----------+---------+-----------+----------+-------------+---------+-----------------+---------+ 
| Employee share  |       - |    -    |     -    |     298 |         - |          |             |    298  |                 |    298  | 
| options         |         |         |          |         |           | -        | -           |         | -               |         | 
+-----------------+---------+---------+----------+---------+-----------+----------+-------------+---------+-----------------+---------+ 
| Dividends paid  |       - |    -    |     -    |    -    |         - |  (1,400) |             | (1,400) |                 | (1,400) | 
| (note 8)        |         |         |          |         |           |          | -           |         | -               |         | 
+-----------------+---------+---------+----------+---------+-----------+----------+-------------+---------+-----------------+---------+ 
|                 |         |         |          |         |           |          |             |         |                 |         | 
+-----------------+---------+---------+----------+---------+-----------+----------+-------------+---------+-----------------+---------+ 
| Balance as at 1 |   2,334 |   8,630 |    2,916 |     977 |     9,252 |   15,823 |      12,588 | 52,520  |            973  | 53,493  | 
| January 2009    |         |         |          |         |           |          |             |         |                 |         | 
+-----------------+---------+---------+----------+---------+-----------+----------+-------------+---------+-----------------+---------+ 
| Total           |       - |    -    |     -    |       - |         - |   23,305 |     (2,784) | 20,521  |             88  | 20,609  | 
| comprehensive   |         |         |          |         |           |          |             |         |                 |         | 
| income          |         |         |          |         |           |          |             |         |                 |         | 
+-----------------+---------+---------+----------+---------+-----------+----------+-------------+---------+-----------------+---------+ 
| Transfer to     |       - |    -    |     -    |       - |     5,277 |  (5,277) |             |         |                 |         | 
| statutory       |         |         |          |         |           |          | -           | -       | -               | -       | 
| reserves        |         |         |          |         |           |          |             |         |                 |         | 
+-----------------+---------+---------+----------+---------+-----------+----------+-------------+---------+-----------------+---------+ 
| Dividends paid  |       - |    -    |     -    |       - |         - |    (817) |             |   (817) |           (255) | (1,072) | 
| (note 8)        |         |         |          |         |           |          | -           |         |                 |         | 
+-----------------+---------+---------+----------+---------+-----------+----------+-------------+---------+-----------------+---------+ 
|                 |         |         |          |         |           |          |             |         |                 |         | 
+-----------------+---------+---------+----------+---------+-----------+----------+-------------+---------+-----------------+---------+ 
| Balance as at   |   2,334 |   8,630 |    2,916 |     977 |    14,529 |   33,034 |       9,804 |  72,224 |            806  | 73,030  | 
| 31 December     |         |         |          |         |           |          |             |         |                 |         | 
| 2009            |         |         |          |         |           |          |             |         |                 |         | 
+-----------------+---------+---------+----------+---------+-----------+----------+-------------+---------+-----------------+---------+ 
|                 |         |         |          |         |           |          |             |         |                 |         | 
+-----------------+---------+---------+----------+---------+-----------+----------+-------------+---------+-----------------+---------+ 
|                 |         |         |          |         |           |          |             |         |                 |         | 
+-----------------+---------+---------+----------+---------+-----------+----------+-------------+---------+-----------------+---------+ 
 
The accompanying notes form an integral part of the consolidated financial 
statements. 
 
 
Statement of changes in equity 
For the year ended 31 December 2009 
 
+--------------------------------+---------+---------+----------+----------+----------+---------+ 
| Company                        |   Share |   Share |   Other  |    Share | Retained |   Total | 
|                                | Capital | Premium | Reserves |   option |          |         | 
|                                |         |         |          |  Reserve | Earnings |         | 
|                                |         |         |          |          |          |         | 
+--------------------------------+         +         +          +          +          +         + 
|                                |         |         |          |          |          |         | 
+--------------------------------+         +         +          +          +          +         + 
|                                |         |         |          |          |          |         | 
+--------------------------------+---------+---------+----------+----------+----------+---------+ 
|                                |  GBP000 |  GBP000 |   GBP000 |   GBP000 |   GBP000 |  GBP000 | 
+--------------------------------+---------+---------+----------+----------+----------+---------+ 
|                                |         |         |          |          |          |         | 
+--------------------------------+---------+---------+----------+----------+----------+---------+ 
| Balance as at 1 January 2008   |   2,334 |   8,630 |   18,462 |      679 |      34  | 30,139  | 
+--------------------------------+---------+---------+----------+----------+----------+---------+ 
| Total comprehensive income for |    -    |    -    |     -    |          |   1,760  |  1,760  | 
| the year                       |         |         |          | -        |          |         | 
+--------------------------------+---------+---------+----------+----------+----------+---------+ 
| Employee share options         |    -    |    -    |     -    |      298 |          |    298  | 
|                                |         |         |          |          | -        |         | 
+--------------------------------+---------+---------+----------+----------+----------+---------+ 
| Dividends paid                 |    -    |    -    |     -    |          |  (1,400) | (1,400) | 
|                                |         |         |          | -        |          |         | 
+--------------------------------+---------+---------+----------+----------+----------+---------+ 
|                                |         |         |          |          |          |         | 
+--------------------------------+---------+---------+----------+----------+----------+---------+ 
| Balance as at 1 January 2009   |   2,334 |   8,630 |   18,462 |      977 |     394  | 30,797  | 
+--------------------------------+---------+---------+----------+----------+----------+---------+ 
| Total comprehensive income     |    -    |    -    |     -    |          |   2,068  |  2,068  | 
|                                |         |         |          | -        |          |         | 
+--------------------------------+---------+---------+----------+----------+----------+---------+ 
| Dividends paid                 |    -    |    -    |     -    |          |    (817) |   (817) | 
|                                |         |         |          | -        |          |         | 
+--------------------------------+---------+---------+----------+----------+----------+---------+ 
|                                |         |         |          |          |          |         | 
+--------------------------------+---------+---------+----------+----------+----------+---------+ 
| Balance as at 31 December 2009 |   2,334 |   8,630 |   18,462 |      977 |   1,645  | 32,048  | 
|                                |         |         |          |          |          |         | 
+--------------------------------+---------+---------+----------+----------+----------+---------+ 
|                                |         |         |          |          |          |         | 
+--------------------------------+---------+---------+----------+----------+----------+---------+ 
|                                |         |         |          |          |          |         | 
+--------------------------------+---------+---------+----------+----------+----------+---------+ 
 
The accompanying notes form an integral part of the consolidated financial 
statements. 
 
 
 
 
Consolidated cash flow statements 
For the year ended 31 December 2009 
+------------------------------------------------------------+--------+---------------------------+----------+---------------------------+ 
|                                                            |  Notes |                      2009 |          |                      2008 | 
+------------------------------------------------------------+--------+---------------------------+----------+---------------------------+ 
|                                                            |        |                    GBP000 |          |                    GBP000 | 
|                                                            |        |                           |          |                           | 
+------------------------------------------------------------+--------+---------------------------+----------+---------------------------+ 
| Cash flows from operating activities                       |        |                           |          |                           | 
+------------------------------------------------------------+--------+---------------------------+----------+---------------------------+ 
| Profit before tax from continuing operations               |        |                   25,074  |          |                   11,552  | 
+------------------------------------------------------------+--------+---------------------------+----------+---------------------------+ 
| Adjustments for:                                           |        |                           |          |                           | 
+------------------------------------------------------------+--------+---------------------------+----------+---------------------------+ 
| Amortisation of intangible assets                          |     12 |                       79  |          |                       53  | 
+------------------------------------------------------------+--------+---------------------------+----------+---------------------------+ 
| Depreciation of property, plant and equipment              |     10 |                    1,947  |          |                    1,557  | 
+------------------------------------------------------------+--------+---------------------------+----------+---------------------------+ 
| Losses on disposal of property, plant and equipment        |        |                      558  |          |                       36  | 
+------------------------------------------------------------+--------+---------------------------+----------+---------------------------+ 
| Gain on disposal of available-for-sale investments         |        |                           |          |                      (10) | 
|                                                            |        |                         - |          |                           | 
+------------------------------------------------------------+--------+---------------------------+----------+---------------------------+ 
| Impairment loss on loans and receivables                   |      4 |                      763  |          |                      224  | 
+------------------------------------------------------------+--------+---------------------------+----------+---------------------------+ 
| Impairment on inventory                                    |        |                       93  |          |                           | 
|                                                            |        |                           |          |                         - | 
+------------------------------------------------------------+--------+---------------------------+----------+---------------------------+ 
| Share based payment expense                                |     25 |                           |          |                      298  | 
|                                                            |        |                         - |          |                           | 
+------------------------------------------------------------+--------+---------------------------+----------+---------------------------+ 
| Financial income                                           |      3 |                     (440) |          |                     (194) | 
+------------------------------------------------------------+--------+---------------------------+----------+---------------------------+ 
| Financial expense                                          |      6 |                    1,705  |          |                    2,811  | 
+------------------------------------------------------------+--------+---------------------------+----------+---------------------------+ 
| Cash flow from operating activities before changes of      |        |                   29,779  |          |                   16,327  | 
| working capital and provisions                             |        |                           |          |                           | 
+------------------------------------------------------------+--------+---------------------------+----------+---------------------------+ 
|                                                            |        |                           |          |                           | 
+------------------------------------------------------------+--------+---------------------------+----------+---------------------------+ 
| Working capital changes:                                   |        |                           |          |                           | 
+------------------------------------------------------------+--------+---------------------------+----------+---------------------------+ 
| Decrease/(Increase) in:                                    |        |                           |          |                           | 
+------------------------------------------------------------+--------+---------------------------+----------+---------------------------+ 
| Inventories                                                |        |                   (8,559) |          |                      208  | 
+------------------------------------------------------------+--------+---------------------------+----------+---------------------------+ 
| Trade and other receivables                                |        |                  (12,831) |          |                    8,848  | 
+------------------------------------------------------------+--------+---------------------------+----------+---------------------------+ 
| Trade and other payables                                   |        |                   20,530  |          |                   14,845  | 
+------------------------------------------------------------+--------+---------------------------+----------+---------------------------+ 
| Cash generated from operations                             |        |                   28,919  |          |                   40,228  | 
+------------------------------------------------------------+--------+---------------------------+----------+---------------------------+ 
| Income tax paid                                            |        |                   (1,895) |          |                   (1,661) | 
+------------------------------------------------------------+--------+---------------------------+----------+---------------------------+ 
| Net cash flows from operating activities                   |        |                   27,024  |          |                   38,567  | 
+------------------------------------------------------------+--------+---------------------------+----------+---------------------------+ 
|                                                            |        |                           |          |                           | 
+------------------------------------------------------------+--------+---------------------------+----------+---------------------------+ 
| Cash flows from investing activities                       |        |                           |          |                           | 
+------------------------------------------------------------+--------+---------------------------+----------+---------------------------+ 
| Financial income                                           |      3 |                      440  |          |                      194  | 
+------------------------------------------------------------+--------+---------------------------+----------+---------------------------+ 
| Purchase of land use right                                 |        |                           |          |                     (450) | 
|                                                            |        |                         - |          |                           | 
+------------------------------------------------------------+--------+---------------------------+----------+---------------------------+ 
| Purchase of property, plant and equipment                  |        |                   (7,461) |          |                   (3,971) | 
+------------------------------------------------------------+--------+---------------------------+----------+---------------------------+ 
| Funds placed on deposit                                    |        |                   (1,739) |          |                   (1,622) | 
+------------------------------------------------------------+--------+---------------------------+----------+---------------------------+ 
| Disposal of available-for-sale                             |        |                           |          |                      170  | 
|                                                            |        |                         - |          |                           | 
+------------------------------------------------------------+--------+---------------------------+----------+---------------------------+ 
| Proceeds from disposal of property, plant and equipment    |        |                    1,490  |          |                      126  | 
| and land use right                                         |        |                           |          |                           | 
+------------------------------------------------------------+--------+---------------------------+----------+---------------------------+ 
| Cash flows used in investing activities                    |        |                   (7,270) |          |                   (5,553) | 
+------------------------------------------------------------+--------+---------------------------+----------+---------------------------+ 
|                                                            |        |                           |          |                           | 
+------------------------------------------------------------+--------+---------------------------+----------+---------------------------+ 
| Cash flows from financing activities                       |        |                           |          |                           | 
+------------------------------------------------------------+--------+---------------------------+----------+---------------------------+ 
| Increase in bank borrowings                                |        |                   49,875  |          |                   50,354  | 
+------------------------------------------------------------+--------+---------------------------+----------+---------------------------+ 
| Decrease in bank borrowings                                |        |                  (49,768) |          |                  (51,560) | 
+------------------------------------------------------------+--------+---------------------------+----------+---------------------------+ 
| Interest paid                                              |      6 |                   (1,705) |          |                   (2,811) | 
+------------------------------------------------------------+--------+---------------------------+----------+---------------------------+ 
| Dividends paid                                             |      8 |                   (1,072) |          |                   (1,400) | 
+------------------------------------------------------------+--------+---------------------------+----------+---------------------------+ 
| Cash flows from financing activities                       |        |                   (2,670) |          |                   (5,417) | 
+------------------------------------------------------------+--------+---------------------------+----------+---------------------------+ 
|                                                            |        |                           |          |                           | 
+------------------------------------------------------------+--------+---------------------------+----------+---------------------------+ 
| Net increase in cash and cash equivalents                  |        |                   17,084  |          |                   27,597  | 
+------------------------------------------------------------+--------+---------------------------+----------+---------------------------+ 
| Cash and cash equivalents at beginning of year             |        |                   50,797  |          |                   11,087  | 
+------------------------------------------------------------+--------+---------------------------+----------+---------------------------+ 
| Foreign exchange differences                               |        |                   (3,886) |          |                   12,113  | 
+------------------------------------------------------------+--------+---------------------------+----------+---------------------------+ 
| Cash and cash equivalents at end of year                   |     16 |                   63,995  |          |                   50,797  | 
+------------------------------------------------------------+--------+---------------------------+----------+---------------------------+ 
 
The accompanying notes form an integral part of the consolidated financial 
statements. 
 
 
Company cash flow statement 
For the year ended 31 December 2009 
+-------------------------------------+-------+----------+----------+---------+ 
|                                     |Notes  |     2009 |          |    2008 | 
+-------------------------------------+-------+----------+----------+---------+ 
|                                     |       |   GBP000 |          |  GBP000 | 
+-------------------------------------+-------+----------+----------+---------+ 
| Cash flows from operating           |       |          |          |         | 
| activities                          |       |          |          |         | 
+-------------------------------------+-------+----------+----------+---------+ 
| Profit before income tax            |       |    2,068 |          |   1,760 | 
+-------------------------------------+-------+----------+----------+---------+ 
| Investment income from subsidiary   |       |  (2,332) |          | (2,000) | 
+-------------------------------------+-------+----------+----------+---------+ 
| Financial income                    |       |        - |          |     (6) | 
+-------------------------------------+-------+----------+----------+---------+ 
|                                     |       |          |          |         | 
+-------------------------------------+-------+----------+----------+---------+ 
| Cash used by operations loss before |       |    (266) |          |   (246) | 
| working capital changes             |       |          |          |         | 
+-------------------------------------+-------+----------+----------+---------+ 
| Working capital changes:            |       |          |          |         | 
+-------------------------------------+-------+----------+----------+---------+ 
| Increase in:                        |       |          |          |         | 
+-------------------------------------+-------+----------+----------+---------+ 
| Other payable                       |  18   |        - |          |      31 | 
+-------------------------------------+-------+----------+----------+---------+ 
| Amounts due to subsidiary           |  19   |    1,140 |          |   1,621 | 
| undertakings                        |       |          |          |         | 
+-------------------------------------+-------+----------+----------+---------+ 
|                                     |       |          |          |         | 
+-------------------------------------+-------+----------+----------+---------+ 
| Net cash from operating activities  |       |      874 |          |   1,406 | 
|                                     |       |          |          |         | 
+-------------------------------------+-------+----------+----------+---------+ 
|                                     |       |          |          |         | 
+-------------------------------------+-------+----------+----------+---------+ 
|                                     |       |          |          |         | 
+-------------------------------------+-------+----------+----------+---------+ 
| Cash flows from investing           |       |          |          |         | 
| activities                          |       |          |          |         | 
+-------------------------------------+-------+----------+----------+---------+ 
| Financial income                    |       |        - |          |       6 | 
+-------------------------------------+-------+----------+----------+---------+ 
|                                     |       |          |          |         | 
+-------------------------------------+-------+----------+----------+---------+ 
| Net cash flows from investing       |       |        - |          |       6 | 
| activities                          |       |          |          |         | 
+-------------------------------------+-------+----------+----------+---------+ 
|                                     |       |          |          |         | 
+-------------------------------------+-------+----------+----------+---------+ 
|                                     |       |          |          |         | 
+-------------------------------------+-------+----------+----------+---------+ 
| Cash flows from financing           |       |          |          |         | 
| activities                          |       |          |          |         | 
+-------------------------------------+-------+----------+----------+---------+ 
| Dividends paid to external          |  8    |    (817) |          | (1,400) | 
| shareholders                        |       |          |          |         | 
+-------------------------------------+-------+----------+----------+---------+ 
|                                     |       |          |          |         | 
+-------------------------------------+-------+----------+----------+---------+ 
| Cash flow from financing activities |       |    (817) |          | (1,400) | 
|                                     |       |          |          |         | 
+-------------------------------------+-------+----------+----------+---------+ 
|                                     |       |          |          |         | 
+-------------------------------------+-------+----------+----------+---------+ 
|                                     |       |          |          |         | 
+-------------------------------------+-------+----------+----------+---------+ 
| Net increase in cash and cash       |       |       57 |          |      12 | 
| equivalents                         |       |          |          |         | 
+-------------------------------------+-------+----------+----------+---------+ 
| Cash and cash equivalents at        |       |      197 |          |     185 | 
| beginning of year                   |       |          |          |         | 
+-------------------------------------+-------+----------+----------+---------+ 
|                                     |       |          |          |         | 
+-------------------------------------+-------+----------+----------+---------+ 
| Cash and cash equivalents at end of |  16   |      254 |          |     197 | 
| year                                |       |          |          |         | 
+-------------------------------------+-------+----------+----------+---------+ 
|                                     |       |          |          |         | 
+-------------------------------------+-------+----------+----------+---------+ 
|                                     |       |          |          |         | 
+-------------------------------------+-------+----------+----------+---------+ 
 
 
The accompanying notes form an integral part of the consolidated financial 
statements. 
 
 
 
 
 
 
Notes to the Financial Statements 
For the year ended 31 December 2009 
1      General information 
China Shoto plc is a company incorporated in the United Kingdom on 10 May 2005. 
The address of the registered office is given on the front page, and the 
principal place of business is Shuangdeng Science and Industrial Zone, Liangxu 
Town, Jiangyan City, Jiangsu Province, China. Details of the Group's reporting 
and functional currencies are disclosed in note 2 below. 
The Group financial statements consolidate those of the company and its 
subsidiaries (together referred to as the Group). The parent company financial 
statements present information about the company as a separate entity and not 
about its group. The nature of the Group's operations and its principal 
activities are set out in the directors' report. 
2      Accounting policies 
The consolidated financial statements of China Shoto plc and its subsidiary 
undertakings (the 'Group') and the individual financial statements of China 
Shoto plc (the 'Company') have been prepared in accordance with those 
International Financial Reporting Standards and Interpretations in force 
('IFRS'), as adopted by the European Union, and those parts of the Companies Act 
2006 applicable to companies preparing financial statements under IFRS. 
The Company has taken advantage of the exemption allowed under section 408 of 
the Companies Act 2006 and has not presented its income statement in these 
financial statements. The Group profit for the year includes profit after tax 
GBP2,068,000 (2008: GBP1,760,000), which is dealt with in the financial 
statements of the Company. 
Standards effective but not yet adopted 
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 2010 or later periods and which the group has decided not 
to adopt early and are not expected to have a material impact on the group's 
accounts. These are: 
+--------------------------------------------------------+------------+ 
| Name                                                   | Date of    | 
|                                                        | issue      | 
+--------------------------------------------------------+------------+ 
| Improvements to IFRSs (2009)                           | 16 April   | 
|                                                        | 2009       | 
+--------------------------------------------------------+------------+ 
| Group Cash-settled Share-based Payment Transactions    | 18 June    | 
| (Amendments to IFRS 2)                                 | 2009       | 
+--------------------------------------------------------+------------+ 
| Additional Exemptions for First-time Adopters          | 23 July    | 
| (Amendments to IFRS 1)                                 | 2009       | 
+--------------------------------------------------------+------------+ 
| Classification of Rights Issues (Amendment to IAS 32)  | 8 October  | 
|                                                        | 2009       | 
+--------------------------------------------------------+------------+ 
| IFRIC 19 Extinguishing Financial Liabilities with      | 26         | 
| Equity Instruments                                     | November   | 
|                                                        | 2009       | 
+--------------------------------------------------------+------------+ 
| Amendment to IFRS 1 First-time Adoption of             | 28 January | 
| International Financial Reporting Standards            | 2010       | 
+--------------------------------------------------------+------------+ 
| Revised IAS 24 Related Party Disclosures               | 4 November | 
|                                                        | 2009       | 
+--------------------------------------------------------+------------+ 
| Amendments to IFRIC 14 IAS 19 - Limit on a Defined     | 26         | 
| Benefit Asset, Minimum Funding Requirements and their  | November   | 
| Interaction                                            | 2009       | 
+--------------------------------------------------------+------------+ 
| IFRS 9 Financial Instruments                           | 12         | 
|                                                        | November   | 
|                                                        | 2009       | 
+--------------------------------------------------------+------------+ 
 
Estimates and assumptions 
The Group makes certain estimates and assumptions regarding the future. 
Estimates and judgements are continually evaluated based on historical 
experience and other factors, including expectations of future events that are 
believed to be reasonable under the circumstances. In the future, actual 
experience may differ from these estimates and assumptions. The estimate and 
assumptions that have a significant risk of causing a material adjustment to the 
carrying amounts of assets and liabilities within the next financial year are 
discussed below. 
 
a) Useful lives and depreciation of intangible assets and property, plant and 
equipment 
Intangible assets and property, plant and equipment are amortised or depreciated 
over their useful lives. Useful lives are based on the management's estimates of 
the period that the assets will generate revenue, which are periodically 
reviewed for continued appropriateness. Changes to estimates can result in 
significant variations in the carrying value and amounts charged to the 
consolidated income statement in specific periods. Details of the estimated 
useful lives are shown in the policy note for depreciation. While the estimated 
useful life of an asset is determined on acquisition, using best estimates, both 
residual values and estimated useful lives are monitored on an annual basis. 
More details including carrying values are included in Note 11. 
 
b) Inventory 
The company reviews the net realisable value of, and demand for, its inventory 
on a quarterly 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. 
 
c) Allowance for doubtful trade receivables 
The Group makes sales on credit. A proportion of the outstanding credit sales 
may prove uncollectable in due course. An estimate is made of the uncollectible 
portion of accounts receivables using a percentage based on the ageing profile 
of the amounts outstanding, and also individually confirmed according to the 
customers' accrual credit conditions. Historically the Group has not born losses 
exceeding 1% of gross book value of trade and other receivables but has 
increased its allowance for doubtful trade receivables during this period to 
reflect tightening monetary policy in China, in particular. 
There is a degree of uncertainty as to actions the Group is able to undertake to 
enforce collection of doubtful debts, which may impact the eventual recoverable 
amounts. Accordingly, the Directors have assessed their best estimate of the 
recoverability of such debts as nil. More details of the allowance for doubtful 
trade and other receivables is provided in Note15. 
 
d) Income taxes 
The group is subject to income tax in several jurisdictions within the People's 
Republic of China and significant judgment is required in determining the 
provision for income taxes. The carrying amount of the group's income tax 
payable at 31 December 2009 was GBP60,000 (2008: GBP164,000). The company 
believes that its tax liabilities are adequate for all of its years of 
operations based on the assessment of many factors including past experience and 
interpretations of tax law. This assessment relies on estimates and assumptions 
and may involve a series of complex judgments about future events. 
 
During the ordinary course of business, there are transactions and calculations 
for which the ultimate tax determination is uncertain. As a result, the company 
recognises tax liabilities based on best estimates of whether additional taxes 
and interest may be due. 
 
Subsidiaries 
A subsidiary is an entity over which the Group has the power to govern the 
financial and operating policies so as to obtain benefits from its activities. 
The Group generally has such power when it directly or indirectly, holds more 
than 50% of the issued share capital, or controls more than half of the voting 
power, or controls the composition of the board of directors. 
In the Company's separate financial statements, investments in subsidiaries are 
accounted for at cost less any impairment losses. 
 
Principles of consolidation 
The consolidated financial statements comprise the financial statements of the 
China Shoto plc and its subsidiaries as at the balance sheet date. The financial 
statements of the subsidiaries are prepared for the same reporting date as the 
parent company. Consistent accounting policies are applied for like transactions 
and events in similar circumstances. 
 
All inter-group balances, transactions, income, expenses, profits and losses 
resulting from inter-group transactions that are recognized as assets, are 
eliminated in full. 
 
Subsidiaries are fully consolidated from the date of acquisition, being the date 
on which the Group obtains control, and continue to be consolidated until the 
date such control ceases. 
 
Acquisitions of subsidiaries are accounted for using the purchase method. The 
cost of an acquisition is measured as the fair value of the assets given, equity 
instruments issued and liabilities incurred or assumed at the date of exchange, 
plus cost directly attributable to the acquisition. Identified assets acquired 
and liabilities and contingent liabilities assumed in a business combination are 
measured initially at their fair value at the acquisition date. 
 
Any excess of the cost of the business combination over the Group's interest in 
the net fair value of the identified assets, liabilities and contingent 
liabilities represents goodwill. The goodwill is accounted for in accordance 
with the accounting policy for goodwill stated below. 
 
Minority interests represent the portion of profit or loss and net assets in 
subsidiaries not held by the Group. These are presented in the consolidated 
balance sheet within equity, separately from the parent shareholder's equity, 
and are separately disclosed in the consolidated income statement. 
 
The acquisition of Leadstar Enterprises Limited by China Shoto plc on 30 
November 2005 has been accounted for using the principles of reverse acquisition 
accounting, in accordance with IFRS 3 'Business Combinations', on the basis that 
the management, who are the former majority shareholders of Leadstar Enterprises 
Limited, retained effective control of the Group.  The fair value of the assets 
of China Shoto plc at the date of the business combination were equivalent to 
the fair value of the company and the fair value of the notional number of 
equity instruments which would have been issued by Leadstar Enterprises Limited 
to acquire China Shoto plc, and therefore no goodwill arose in respect of this 
transaction. 
 
Foreign currencies 
The functional currency of the subsidiary undertakings is Renminbi ("RMB"), and 
the financial statements of the subsidiary undertakings have been drawn up in 
RMB. As sales and purchases are denominated primarily in RMB and receipts from 
operations are usually retained in RMB, the directors are of the opinion that 
RMB reflects the economic substance of the underlying events and circumstances 
relevant to the Group. Monetary assets and liabilities maintained in currencies 
other than RMB are translated into the RMB at the rates of exchange ruling at 
the balance sheet date. Transactions in currencies other than RMB are translated 
at rates ruling on the transaction dates. All resulting exchange differences are 
dealt with in the income statements. 
 
The consolidated results are presented in Sterling reflecting the Company's UK 
quotation and investor base. Assets and liabilities are translated into Sterling 
at the closing rate, and all income and expenses are translated at the average 
rate during the financial period, being an approximation for the actual rates at 
the date of the transactions.  All resulting exchange differences are taken to 
the foreign currency translation reserve within equity. 
 
Revenue recognition 
Revenue from the sale of goods is recognised upon significant risks and rewards 
of ownership of the goods being transferred to the customer, which coincides 
with acceptance of the goods sold and the quality inspection by clients, being a 
contractual requirement of the Group's customers. 
 
Government grants 
Government grants are recognised at their fair value where there is reasonable 
assurance that the grant will be received and all attaching conditions will be 
complied with. When a grant relates to an expense item, it is recognised in the 
consolidated income statement over the period necessary to match it on a 
systematic basis to the costs that it is intended to compensate. Where a grant 
relates to an asset, it is included in deferred income and amortized to the 
consolidated income statement in equal annual installments over the expected 
useful life of the relevant asset. 
 
Employee benefits 
Obligations for contributions to defined contribution pension plans are 
recognised as an expense in the income statements as incurred. 
 
Borrowings costs 
Borrowing costs are expensed as incurred. The Group does not incur any interest 
costs that qualify for capitalization under IAS 23 'Borrowing costs'. 
 
Share-based payments 
Where equity settled share options are awarded to employees for services 
provided in respect of the flotation, the fair value of the options at the date 
of grant is charged to the consolidated income statement over the vesting 
period. Market vesting conditions are factored into the fair value of the 
options granted. As long as all other vesting conditions are satisfied, a charge 
is made irrespective of whether the market vesting conditions are satisfied. The 
fair value of the award is recognised over the vesting period as an increase in 
the cost of investment in the subsidiary in the company balance sheet. The 
cumulative expense is not adjusted for failure to achieve a market vesting 
condition. 
 
Where equity instruments are granted to persons other than employees, the 
consolidated income statement is charged with the fair value of goods and 
services received. 
 
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 balance sheet liability method, providing for 
temporary differences as at the balance sheet date between the carrying amounts 
of assets and liabilities for financial reporting purposes and the amounts used 
for taxation purposes, except for differences arising on the initial recognition 
of goodwill and goodwill for which amortisation is not deductible. 
 
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 paid. In respect 
of final dividends to equity shareholders, this is when they are approved at the 
annual shareholders' meeting. The Company will recognise investment income when 
the subsidiaries' dividend is approved by their shareholders' meetings. 
 
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 using the straight-line method so as to write off the 
cost of property, plant and equipment reduced by the estimated residual value of 
the assets over their estimated useful lives. The estimated residual value and 
annual depreciation rates used for this purpose are as follows: 
 
+-----------+----------------+--------+-----------------+ 
| Item      |      Estimated | Useful |          Annual | 
|           | residual value |   life |    depreciation | 
|           |                |        |           rates | 
+-----------+----------------+--------+-----------------+ 
| Building  |            10% |     40 |           2.25% | 
|           |                |        |                 | 
+-----------+----------------+--------+-----------------+ 
| Machinery |            10% |     10 |              9% | 
|           |                |        |                 | 
+-----------+----------------+--------+-----------------+ 
| Motor     |            10% |      5 |             18% | 
| vehicles  |                |        |                 | 
+-----------+----------------+--------+-----------------+ 
| Office    |            10% |      5 |             18% | 
| equipment |                |        |                 | 
+-----------+----------------+--------+-----------------+ 
Fully depreciated plant and equipment are retained in the financial statements 
until such time that they are no longer in use. Construction in progress 
represents property, plant and equipment under construction and is stated at 
cost.  No provision for depreciation is made on construction in progress until 
such time as the relevant assets are completed and ready for use. 
 
Intangible assets 
a) Land use rights 
Land use rights arise when the Bureau of the Land and Resources of People's 
Republic of China grants the group rights to develop, use and operate land 
during a limited period of time. Land use rights are measured initially at cost 
and subsequently amortised on a straight-line basis over the life of the asset. 
The life of the land use right is taken to the length of time for which the 
right has been granted (42 to 50 years). The carrying values of land use rights 
are reviewed for impairment when events or changes in circumstances indicate 
that the carrying value may not be recoverable. 
 
b) Goodwill 
Goodwill arising on consolidation represents the excess of the cost of 
acquisition over the Group's interest in the fair value of the identifiable 
assets and liabilities of a subsidiary or associated undertaking at the date of 
acquisition. Goodwill is recognised as an asset and reviewed for impairment at 
least annually. Any impairment is recognised immediately in the income 
statement, through administrative expenses, and is not subsequently reversed. 
 
c) Other intangible assets 
The cost of intangible assets acquired in a business combination is their value 
at the date of acquisition. Following initial recognition, intangible assets are 
carried at cost less any accumulated amortisation and any accumulated impairment 
losses. 
 
Intangible assets are amortised through administrative expenses on a 
straight-line basis over their estimated useful economic lives and assessed for 
impairment whenever there is an indication that the intangible assets may be 
impaired. The amortisation period and amortisation method for intangible assets 
are reviewed at least at each financial year-end. 
 
The estimated useful economic lives for the Group's intangible assets are as 
follows: 
 
Trademark & Patents      10 years 
 
Investment in subsidiary undertakings 
Investments in subsidiaries are stated at cost less provision for impairment. 
 
Impairment of assets 
The carrying amounts of non-current assets are reviewed at each balance sheet 
date to determine whether there is any indication of impairment. If any such 
indication exists, the asset's recoverable amount is estimated.  An impairment 
loss is recognised whenever the carrying amount of the asset or 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 fair value less costs to sell 
and value in use. The fair value less costs to sell is the amount obtainable 
from the sale of an asset in an arm's length transaction less costs to sell. 
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. 
 
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. Net realisable value is the estimated selling price in the 
ordinary course of business, less the costs of completion and selling expenses. 
 
Financial assets 
The Group classifies its financial assets into one of the categories discussed 
below, depending on the purpose for which the asset was acquired. The Group has 
not classified any of its financial assets as held to maturity. Unless otherwise 
stated, book value of financial assets is not materially different from their 
fair values. 
 
a) Loans and receivables 
These assets are non-derivative financial assets with fixed or determinable 
payments that are not quoted in an active market. They arise principally through 
the provision of goods and services to customers (e.g. trade receivables), but 
also incorporate other types of contractual monetary asset. They are initially 
recognised at fair value plus transaction costs that are directly attributable 
to their acquisition or issue, and are subsequently carried at amortised cost 
using the effective interest rate method, less provision for impairment. 
 
Impairment provision is recognised when there is objective evidence (such as 
significant financial difficulties on the part of the counterparty or default or 
significant delay in payment) that the group will be unable to collect all of 
the amounts due under the terms receivable, the amount of such a provision being 
made based on past experience after analysis of the ageing of receivable. 
 
For trade receivables such provisions are recorded in a separate allowance 
account with the loss being recognised within administrative expenses in the 
income statement. On confirmation that trade receivables will not be 
collectable, the gross carrying value of the assets is written off against the 
associated provision. 
 
The Group's loans and receivables comprise trade and other receivables, amounts 
due from related parties, short-term investment and cash and cash equivalents in 
the balance sheet. 
 
The short-term investments are bank deposits with original maturities of more 
than three months but within a financial year. The short-term investments are 
security for export sales or notes payables with an initial maturity of more 
than three months. The short-term investments are readily convertible to known 
amounts of cash and which are subject to an insignificant risk of changes in 
value. 
 
Cash and cash equivalents comprise 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. 
 
b) Available-for-sale investment 
Non-derivative financial assets not included in the above categories are 
classified as available-for-sale and comprise principally the group's strategic 
investments in entities not qualifying as subsidiaries, associates or jointly 
controlled entities as well as corporate bonds. They are carried at fair value 
with changes in fair value recognised directly in a separate component of equity 
(available-for-sale reserve) other than exchange differences, which are 
recognised in profit or loss. Where there is a significant or prolonged decline 
in the fair value of an available-for-sale financial asset (which constitutes 
objective evidence of impairment), the full amount of the impairment, including 
any amount previously charged to equity, is recognised in the income statement. 
Purchases and sales of available-for-sale financial assets are recognised on 
settlement date with any change in fair value between trade date and settlement 
date being recognised in the available-for-sale reserve. On sale, the amount 
held in the available-for-sale reserve associated with that asset is removed 
from equity and recognised in the income statement. Interest on corporate bonds 
classified as available-for-sale is calculated using the effective interest 
method and is recognised in finance income in the income statement. 
 
Financial liabilities and equity 
The Group classifies its financial liabilities into one of the categories 
discussed below, depending on the purpose for which the asset was acquired. 
Financial liabilities of the Group include trade and other payables, amounts due 
to related parties and bank borrowings. 
Trade and other payables are initially recognised at fair value and subsequently 
carried at amortised cost using the effective interest method. 
Bank borrowings are initially recognised at fair value net of any transaction 
costs directly attributable to the issue of the instrument. Such interest 
bearing liabilities are subsequently measured at amortised cost using the 
effective interest rate method, which ensures that any interest expense over the 
period to repayment is at a constant rate on the balance of the liability 
carried in the balance sheet. Interest expense in this context includes initial 
transaction costs and repayable on redemption, as well as any interest or coupon 
payable while the liability is outstanding. 
Equity instruments are recorded net of direct issue costs. 
 
Research and development expenditure 
Research costs are expensed as incurred. Development expenditure on an 
individual project is recognised as an asset when the Group can demonstrate the 
technical feasibility of completing the intangible asset so that it will be 
available for use or sale, its intention and availability of resource to 
complete the asset, the ability to measure reliably the expenditure during 
development, and whether the asset will generate future economic benefits. 
If development expenditure cannot be distinguished from the research phase of an 
internal project to create an intangible asset, the research and development 
expenditure of internal projects is recognised in the income statement as 
incurred. 
Following initial recognition, the asset is carried at cost less any accumulated 
amortization and accumulated impairment losses. Amortisation of the asset begins 
when development is complete and the asset is available for use. It is amortised 
over the period of expected future benefit. During the period of development, 
the asset is tested for impairment annually. 
No costs in the current or prior period meet the criteria required for 
capitalisation. 
 
3  Revenue 
+------------------------------------------+------------+----------+---------+ 
|                                          |      Group |          |   Group | 
+------------------------------------------+------------+----------+---------+ 
|                                          |       2009 |          |    2008 | 
+------------------------------------------+------------+----------+---------+ 
|                                          |     GBP000 |          |  GBP000 | 
+------------------------------------------+------------+----------+---------+ 
| Revenue                                  |            |          |         | 
+------------------------------------------+------------+----------+---------+ 
| Sale of goods                            |    212,569 |          | 183,083 | 
|                                          |            |          |         | 
+------------------------------------------+------------+----------+---------+ 
|                                          |            |          |         | 
+------------------------------------------+------------+----------+---------+ 
| Other operating income                   |            |          |         | 
+------------------------------------------+------------+----------+---------+ 
| Waste disposal and sale of by-products   |      1,403 |          |       - | 
|                                          |            |          |         | 
|                                          |          - |          |         | 
+------------------------------------------+------------+----------+---------+ 
| Government grant income                  |      1,879 |          |     244 | 
+------------------------------------------+------------+----------+---------+ 
| Rental Income                            |        160 |          |       - | 
+------------------------------------------+------------+----------+---------+ 
| Material sale                            |        143 |          |       - | 
+------------------------------------------+------------+----------+---------+ 
| Penalty income                           |        360 |          |       - | 
+------------------------------------------+------------+----------+---------+ 
| Electricity income from third parties    |        402 |          |       - | 
+------------------------------------------+------------+----------+---------+ 
| Other                                    |        193 |          |     138 | 
+------------------------------------------+------------+----------+---------+ 
|                                          |            |          |         | 
+------------------------------------------+------------+----------+---------+ 
|                                          |      4,540 |          |     382 | 
+------------------------------------------+------------+----------+---------+ 
|                                          |            |          |         | 
+------------------------------------------+------------+----------+---------+ 
| Finance income                           |            |          |         | 
+------------------------------------------+------------+----------+---------+ 
| Interest income                          |        440 |          |     194 | 
|                                          |            |          |         | 
+------------------------------------------+------------+----------+---------+ 
|                                          |            |          |         | 
+------------------------------------------+------------+----------+---------+ 
|                                          |            |          |         | 
+------------------------------------------+------------+----------+---------+ 
| Total income                             |    217,549 |          | 183,659 | 
+------------------------------------------+------------+----------+---------+ 
|                                          |            |          |         | 
+------------------------------------------+------------+----------+---------+ 
|                                          |            |          |         | 
+------------------------------------------+------------+----------+---------+ 
 
Government grant income is a direct subsidy which is received by the Group from 
the finance bureau and other government departments. 
 
4  Profit from operations 
+-----------------------------------------+------------+----------+----------+ 
|                                         |      Group |          |    Group | 
+-----------------------------------------+------------+----------+----------+ 
|                                         |       2009 |          |     2008 | 
+-----------------------------------------+------------+----------+----------+ 
|                                         |     GBP000 |          |   GBP000 | 
+-----------------------------------------+------------+----------+----------+ 
| After charging / (crediting):           |            |          |          | 
+-----------------------------------------+------------+----------+----------+ 
| Cost of inventories recognized as an    |   144,547  |          | 134,794  | 
| expense                                 |            |          |          | 
+-----------------------------------------+------------+----------+----------+ 
| Auditors' remuneration                  |            |          |          | 
+-----------------------------------------+------------+----------+----------+ 
| - audit of Group accounts               |        33  |          |      39  | 
+-----------------------------------------+------------+----------+----------+ 
| - audit of individual accounts of       |        51  |          |      52  | 
| subsidiary undertakings                 |            |          |          | 
+-----------------------------------------+------------+----------+----------+ 
| - non-audit services - Tax              |        11  |          |      22  | 
+-----------------------------------------+------------+----------+----------+ 
|                 - General advice        |        47  |          |       6  | 
+-----------------------------------------+------------+----------+----------+ 
| Amortisation of intangible assets       |        79  |          |      53  | 
+-----------------------------------------+------------+----------+----------+ 
| Depreciation of property, plant and     |     1,947  |          |   1,557  | 
| equipment                               |            |          |          | 
+-----------------------------------------+------------+----------+----------+ 
| Loss on disposal of property, plant and |       558  |          |      36  | 
| equipment                               |            |          |          | 
+-----------------------------------------+------------+----------+----------+ 
| Impairment loss on loans and            |       763  |          |     224  | 
| receivables                             |            |          |          | 
+-----------------------------------------+------------+----------+----------+ 
| Research and development expenditure    |       717  |          |   1,305  | 
+-----------------------------------------+------------+----------+----------+ 
| Foreign exchange gains                  |        (9) |          |     (96) | 
+-----------------------------------------+------------+----------+----------+ 
| Inventory written down to net           |        93  |          |        - | 
| realizable value                        |            |          |          | 
+-----------------------------------------+------------+----------+----------+ 
| Employee share options                  |          - |          |     298  | 
+-----------------------------------------+------------+----------+----------+ 
|                                         |            |          |          | 
+-----------------------------------------+------------+----------+----------+ 
 
5  Information regarding directors and employees 
+-----------------------------------------+------------+----------+---------+ 
|                                         |       2009 |          |    2008 | 
+-----------------------------------------+------------+----------+---------+ 
| Average number of employees of the      |     Number |          |  Number | 
| Group                                   |            |          |         | 
+-----------------------------------------+------------+----------+---------+ 
| Management and administration           |        171 |          |     211 | 
+-----------------------------------------+------------+----------+---------+ 
| Sales                                   |        311 |          |     321 | 
+-----------------------------------------+------------+----------+---------+ 
| Manufacturing                           |      2,069 |          |   2,087 | 
+-----------------------------------------+------------+----------+---------+ 
|                                         |            |          |         | 
+-----------------------------------------+------------+----------+---------+ 
|                                         |      2,551 |          |   2,619 | 
+-----------------------------------------+------------+----------+---------+ 
|                                         |            |          |         | 
+-----------------------------------------+------------+----------+---------+ 
 
+-----------------------------------------+------------+----------+---------+ 
|                                         |       2009 |          |    2008 | 
+-----------------------------------------+------------+----------+---------+ 
|                                         |     GBP000 |          |  GBP000 | 
+-----------------------------------------+------------+----------+---------+ 
| The aggregate payroll costs of these    |            |          |         | 
| employees were as follows:              |            |          |         | 
+-----------------------------------------+------------+----------+---------+ 
| Wages and salaries                      |     20,700 |          |  19,216 | 
+-----------------------------------------+------------+----------+---------+ 
| Social security costs                   |        940 |          |     934 | 
+-----------------------------------------+------------+----------+---------+ 
|                                         |            |          |         | 
+-----------------------------------------+------------+----------+---------+ 
|                                         |            |          |         | 
+-----------------------------------------+------------+----------+---------+ 
|                                         |     21,640 |          |  20,150 | 
+-----------------------------------------+------------+----------+---------+ 
| Share-based payment expense (see note   |          - |          |     298 | 
| 25)                                     |            |          |         | 
+-----------------------------------------+------------+----------+---------+ 
|                                         |            |          |         | 
+-----------------------------------------+------------+----------+---------+ 
|                                         |     21,640 |          |  20,448 | 
+-----------------------------------------+------------+----------+---------+ 
|                                         |            |          |         | 
+-----------------------------------------+------------+----------+---------+ 
 
Directors' remuneration were as follows: 
+--------------+--------+--+-+--------+--------+----+----------------+--------------+ 
|              |   2009    |  2009    |    2009     |      2009      |    2008      | 
+--------------+-----------+----------+-------------+----------------+--------------+ 
|              |    Salary | Benefits |       Bonus |          Total |        Total | 
|              |           |          |             |     emoluments |   emoluments | 
+--------------+-----------+----------+-------------+----------------+--------------+ 
|              |    GBP000 |   GBP000 |      GBP000 |         GBP000 |       GBP000 | 
+--------------+-----------+----------+-------------+----------------+--------------+ 
| Yang Shanji  |       30  |        - |         619 |           649  |          429 | 
+--------------+-----------+----------+-------------+----------------+--------------+ 
| Zhou         |       20  |       1  |        173  |           194  |          153 | 
| Yuezhang     |           |          |             |                |              | 
+--------------+-----------+----------+-------------+----------------+--------------+ 
| Zhou Weigang |       20  |       1  |         173 |           194  |          153 | 
+--------------+-----------+----------+-------------+----------------+--------------+ 
| Zhou Ping    |       20  |       1  |        154  |           175  |          153 | 
+--------------+-----------+----------+-------------+----------------+--------------+ 
| Qian Shangao |       20  |       1  |        175  |           196  |            - | 
+--------------+-----------+----------+-------------+----------------+--------------+ 
| Li Shuang    |       15  |        - |           - |            15  |           10 | 
+--------------+-----------+----------+-------------+----------------+--------------+ 
| Bernard      |       15  |        - |           - |            15  |           10 | 
| Asher        |           |          |             |                |              | 
+--------------+-----------+----------+-------------+----------------+--------------+ 
| Peter        |        15 |        - |           - |            15  |           10 | 
| Maurice      |           |          |             |                |              | 
| Crystal      |           |          |             |                |              | 
+--------------+-----------+----------+-------------+----------------+--------------+ 
| Cao Guifa    |        30 |        - |          47 |            77  |           84 | 
+--------------+-----------+----------+-------------+----------------+--------------+ 
|              |           |          |             |                |              | 
+--------------+-----------+----------+-------------+----------------+--------------+ 
| Total        |       185 |        4 |       1,341 |          1,530 |        1,002 | 
+--------------+-----------+----------+-------------+----------------+--------------+ 
|              |        |    |        |        |                                    | 
+--------------+--------+----+--------+--------+------------------------------------+ 
|              |        |  | |        |        |    |                |              | 
+--------------+--------+--+-+--------+--------+----+----------------+--------------+ 
 
 
+----------------------------------------+------------+----------+-----------+ 
|                                        |       2009 |          |      2008 | 
+----------------------------------------+------------+----------+-----------+ 
|                                        |     GBP000 |          |    GBP000 | 
+----------------------------------------+------------+----------+-----------+ 
|                                        |            |          |           | 
+----------------------------------------+------------+----------+-----------+ 
| Emoluments                             |      1,530 |          |     1,002 | 
+----------------------------------------+------------+----------+-----------+ 
| Share-based payment expense (see note  |          - |          |       242 | 
| 25)                                    |            |          |           | 
+----------------------------------------+------------+----------+-----------+ 
|                                        |            |          |           | 
+----------------------------------------+------------+----------+-----------+ 
|                                        |      1,530 |          |     1,244 | 
+----------------------------------------+------------+----------+-----------+ 
|                                        |            |          |           | 
+----------------------------------------+------------+----------+-----------+ 
|                                        |            |          |           | 
+----------------------------------------+------------+----------+-----------+ 
There were no payments for post-employment benefits, other long-term benefits 
and termination benefits in respect of directors. 
6       Finance costs 
+----------------------------------------+------------+----------+-----------+ 
|                                        |      Group |          |     Group | 
+----------------------------------------+------------+----------+-----------+ 
|                                        |       2009 |          |      2008 | 
+----------------------------------------+------------+----------+-----------+ 
|                                        |     GBP000 |          |    GBP000 | 
+----------------------------------------+------------+----------+-----------+ 
| Interest expense on bank and other     |      1,705 |          |     2,811 | 
| loans                                  |            |          |           | 
+----------------------------------------+------------+----------+-----------+ 
|                                        |            |          |           | 
+----------------------------------------+------------+----------+-----------+ 
7       Income tax 
+----------------------------------------+------------+----------+-----------+ 
|                                        |      Group |          |     Group | 
+----------------------------------------+------------+----------+-----------+ 
|                                        |       2009 |          |      2008 | 
+----------------------------------------+------------+----------+-----------+ 
|                                        |     GBP000 |          |    GBP000 | 
+----------------------------------------+------------+----------+-----------+ 
| Income tax expense is as follows:      |            |          |           | 
+----------------------------------------+------------+----------+-----------+ 
| Prior year under provision             |       299  |          |         - | 
+----------------------------------------+------------+----------+-----------+ 
| Current income tax                     |     1,492  |          |    1,335  | 
+----------------------------------------+------------+----------+-----------+ 
| Total current tax                      |     1,791  |          |    1,335  | 
+----------------------------------------+------------+----------+-----------+ 
|                                        |            |          |           | 
+----------------------------------------+------------+----------+-----------+ 
| Deferred income tax:                   |            |          |           | 
+----------------------------------------+------------+----------+-----------+ 
| Origination and reversal of temporary  |      (181) |          |      (77) | 
| differences                            |            |          |           | 
+----------------------------------------+------------+----------+-----------+ 
|                                        |            |          |           | 
+----------------------------------------+------------+----------+-----------+ 
|                                        |            |          |           | 
+----------------------------------------+------------+----------+-----------+ 
|                                        |     1,610  |          |    1,258  | 
+----------------------------------------+------------+----------+-----------+ 
|                                        |            |          |           | 
+----------------------------------------+------------+----------+-----------+ 
The reasons for the difference between the actual tax charge for the year and 
the standard rate of corporation tax applied to profits for the year are as 
follows: 
+----------------------------------------+------------+----------+-----------+ 
|                                        |      Group |          |     Group | 
+----------------------------------------+------------+----------+-----------+ 
|                                        |       2009 |          |      2008 | 
+----------------------------------------+------------+----------+-----------+ 
|                                        |     GBP000 |          |    GBP000 | 
+----------------------------------------+------------+----------+-----------+ 
|                                        |            |          |           | 
+----------------------------------------+------------+----------+-----------+ 
| Profit before tax                      |    25,074  |          |   11,552  | 
+----------------------------------------+------------+----------+-----------+ 
|                                        |            |          |           | 
+----------------------------------------+------------+----------+-----------+ 
| Expected tax charge based on the       |     6,763  |          |    3,752  | 
| standard tax rate of individual group  |            |          |           | 
| companies                              |            |          |           | 
+----------------------------------------+------------+----------+-----------+ 
| Effect of reduction in tax rate        |    (5,189) |          |   (2,927) | 
+----------------------------------------+------------+----------+-----------+ 
| Tax effect of non-deductible expenses  |      (263) |          |      438  | 
| and non-taxable revenue                |            |          |           | 
+----------------------------------------+------------+----------+-----------+ 
| Difference in tax rate of tax rate     |          - |          |       (5) | 
| relief                                 |            |          |           | 
+----------------------------------------+------------+----------+-----------+ 
| Adjustment for under provision in      |       299  |          |         - | 
| prior year                             |            |          |           | 
+----------------------------------------+------------+----------+-----------+ 
|                                        |     1,610  |          |     1,258 | 
+----------------------------------------+------------+----------+-----------+ 
|                                        |            |          |           | 
+----------------------------------------+------------+----------+-----------+ 
The Company and significant subsidiary undertakings are subject to income tax on 
the following basis and at the following rates: 
 
China Shoto plc 
The Company is a non-resident UK company, subject to UK corporation tax at the 
standard rate of 28% (2008: 28%) on UK profits. 
 
Jiangsu Shuangdeng Group Co. Ltd 
In 2005 the company reregistered as a foreign enterprise and is entitled to 
exemptions from PRC income tax for the two years commencing from its first 
profit-making year of operation and to a 50% relief from PRC income tax for 
another three years thereafter. 
In accordance with the latest PRC taxation laws which came into effect on 1 
January 2008, its standard applicable tax rate is 25%. Enterprises who once 
enjoyed a preference on taxation exemption or relief on certain periods such as 
"exemption from tax in the first two years and half of the tax in the next three 
years" or "exemption from tax in the first five years and half of the tax in the 
next five years", will apply the original taxation law and administration law 
regulation as well as the preferential system and preferential term till the end 
of the period regulated in the relevant regulation after the implementation of 
the new taxation. However, those who haven't enjoyed the taxation preferential 
because of no profit-making will account for it from 2008. Since 2008 is the 
company's first profit-making year, it is free from income tax in 2008 and 2009, 
and a half tax rate of 12.5% will be imposed in 2010, 2011 and 2012. So the 
actual tax rate is nil in 2009. 
 
Jiangsu Fuste Power Supply Co. Ltd and Jiangsu Best Power Supply Co. Ltd 
The companies are located in an area designated as an Economic Development 
Coastal Region in accordance with PRC tax regulations. In accordance with the 
PRC tax legislation applicable to foreign investment enterprises each company is 
entitled to exemptions from PRC income tax for the two years commencing from 
their first profit-making year of operation (2004 for Jiangsu Fuste Power Supply 
Co. Ltd and 2006 for Jiangsu Best Power Supply Co. Ltd) and for another three 
years thereafter they are entitled to a 50% relief from PRC income tax. Its 
applicable tax rate is 25% according to the latest taxation laws which came into 
effect on 1 January 2008. So the actual tax rate of Jiangsu Fuste Power Supply 
Co. Ltd is 25% and Jiangsu Best Power Supply Co. Ltd is 12.5% in 2009. 
 
Jiangsu Shuangdeng Power Supply Co. Ltd 
According to the latest PRC taxation laws which came into effect on 1 January 
2008, the actual income tax rate is 20% in 2009. 
 
Nanjing Shuangdeng Science and Technology Development Academy Co. Ltd 
In 2005 the company re-registered as a foreign investment enterprise and 
meanwhile it is a production enterprise located in a development zone in 
accordance with the PRC income tax legislation so it is entitled to exemptions 
from PRC income tax for the two years commencing from its first profit-making 
year of operation and thereafter it is entitled to a 50% relief from PRC income 
tax for the next three years. 
In accordance with the latest PRC taxation laws which came into effect on 1 
January 2008, its standard applicable tax rate is 25%. Enterprises who once 
enjoyed a preference on taxation exemption or relief on certain periods such as 
"exemption from tax in the first two years and half of the tax in the next three 
years" or "exemption from tax in the first five years and half of the tax in the 
next five years", will apply the original taxation law and administration law 
regulation as well as the preferential system and preferential term till the end 
of the period regulated in the relevant regulation after the implementation of 
the new taxation. However, those who haven't enjoyed the taxation preferential 
because of no profit-making will account for it from 2008. Since 2008 is the 
company's first profit-making year, it is free from income tax in 2008 and 2009, 
and a half tax rate of 12.5% will be imposed in 2010, 2011 and 2012. So the 
actual tax rate is nil in 2009. 
 
Yangzhou Zhenghe Power Supply Co. Ltd 
The company is a production enterprise and in accordance with the PRC tax 
legislation applicable to foreign investment enterprises the company is entitled 
to exemptions from PRC income tax for the two years commencing from its first 
profit-making year of operation (2007 for Yangzhou Zhenghe Power Supply Co., 
Ltd) and for another three years thereafter they are entitled to a 50% relief 
from PRC income tax. Its applicable tax rate is 25% according to the latest 
taxation laws which came into effect on 1 January 2008. The period from 2009 to 
2011 is for half-relief, so its applicable tax rate is 12.5%. From 2012, its 
applicable tax rate is 25%. 
 
8       Dividends 
+-----------------+----------+--------+----------+--------+----+---------+----------+---------+ 
|                 |          |  Group |          |  Group |    | Company |          | Company | 
+-----------------+----------+--------+----------+--------+----+---------+----------+---------+ 
|                 |          |   2009 |          |   2008 |    |    2009 |          |    2008 | 
+-----------------+----------+--------+----------+--------+----+---------+----------+---------+ 
|                 |          | GBP000 |          | GBP000 |    |  GBP000 |          |  GBP000 | 
+-----------------+----------+--------+----------+--------+----+---------+----------+---------+ 
| Dividends paid  |          |    817 |          |  1,400 |    |     817 |          |   1,400 | 
+-----------------+----------+--------+----------+--------+----+---------+----------+---------+ 
|                 |          |        |          |        |    |         |          |         | 
+-----------------+----------+--------+----------+--------+----+---------+----------+---------+ 
|                 |          |        |          |        |    |         |          |         | 
+-----------------+----------+--------+----------+--------+----+---------+----------+---------+ 
China Shoto plc declared an annual dividend of 3.5p per ordinary share amounting 
to GBP817,031 on 28 April 2009 which was approved by the shareholders on 16 Jun 
2009. 
China Shoto plc declared an annual dividend of 4.5p per ordinary share amounting 
to GBP1,050,000 on 22 April 2008 which was approved by the shareholders on 22 
May 2008 and declared an interim dividend of 1.5p per ordinary share amounting 
to GBP350,000 on 18 September 2008. 
 
9       Earnings per share from continuing operations 
Earnings for the purpose of basic and diluted earnings per share are the net 
profit for the financial year attributable to equity holders of the parent of 
GBP23,304,000 (2008: GBP10,070,000). 
The profit from continuing operations for the financial year attributable to 
equity holders of the parent is as follows: 
 
+----------------------------------------+----------+---+---------+ 
|                                        |    Group |   |   Group | 
+----------------------------------------+----------+---+---------+ 
|                                        |     2009 |   |    2008 | 
+----------------------------------------+----------+---+---------+ 
|                                        |   GBP000 |   |  GBP000 | 
+----------------------------------------+----------+---+---------+ 
| Profit attributable to equity holders  |   23,304 |   |  10,070 | 
| of the parent                          |          |   |         | 
+----------------------------------------+----------+---+---------+ 
|                                        |          |   |         | 
+----------------------------------------+----------+---+---------+ 
The weighted average number of ordinary shares used in the calculation of 
earnings per share from continuing operations has been derived as follows: 
+----------------------------------------+------------+---+------------+ 
|                                        |      Group |   |      Group | 
+----------------------------------------+------------+---+------------+ 
| Number of ordinary shares              |       2009 |   |       2008 | 
+----------------------------------------+------------+---+------------+ 
| Weighted average number of ordinary    | 23,343,770 |   | 23,343,770 | 
| shares - basic                         |            |   |            | 
+----------------------------------------+------------+---+------------+ 
| Dilutive effect of share options       |    353,832 |   |          - | 
+----------------------------------------+------------+---+------------+ 
|                                        |            |   |            | 
+----------------------------------------+------------+---+------------+ 
| Weighted average number of ordinary    | 23,697,602 |   | 23,343,770 | 
| shares - diluted                       |            |   |            | 
+----------------------------------------+------------+---+------------+ 
|                                        |            |   |            | 
+----------------------------------------+------------+---+------------+ 
10     Property, plant and equipment 
+------------------------+-----------+-----------+---------+-----------+--------------+---------+ 
| Group                  |Buildings  |Machinery  |  Motor  |  Office   |Construction  |  Total  | 
|                        |           |           |Vehicle  |Equipment  | in progress  |         | 
|                        |           |           |         |           |              |         | 
+------------------------+-----------+-----------+---------+-----------+--------------+---------+ 
|                        |           |           |         |           |              |         | 
+------------------------+-----------+-----------+---------+-----------+--------------+---------+ 
| Cost                   |    GBP000 |    GBP000 |  GBP000 |    GBP000 |       GBP000 |  GBP000 | 
+------------------------+-----------+-----------+---------+-----------+--------------+---------+ 
| At 1 January 2008      |    9,111  |    9,709  |    365  |    1,526  |            1 | 20,712  | 
+------------------------+-----------+-----------+---------+-----------+--------------+---------+ 
| Additions              |      353  |      676  |     27  |      361  |       2,119  |  3,536  | 
+------------------------+-----------+-----------+---------+-----------+--------------+---------+ 
| Reclassifications      |      589  |      295  |    (15) |     (264) |        (605) |       - | 
+------------------------+-----------+-----------+---------+-----------+--------------+---------+ 
| Disposals              |      (21) |     (165) |    (14) |      (83) |         (46) |   (329) | 
+------------------------+-----------+-----------+---------+-----------+--------------+---------+ 
| Exchange adjustment    |    4,594  |    5,107  |    180  |      712  |         381  | 10,974  | 
+------------------------+-----------+-----------+---------+-----------+--------------+---------+ 
|                        |           |           |         |           |              |         | 
+------------------------+-----------+-----------+---------+-----------+--------------+---------+ 
| At 31 December 2008    |   14,626  |   15,622  |    543  |     2,252 |       1,850  | 34,893  | 
+------------------------+-----------+-----------+---------+-----------+--------------+---------+ 
| Additions              |    1,763  |      441  |    119  |    1,327  |       3,805  |  7,455  | 
+------------------------+-----------+-----------+---------+-----------+--------------+---------+ 
| Transferred in         |    3,565  |    1,269  |      -  |        -  |      (4,834) |      -  | 
+------------------------+-----------+-----------+---------+-----------+--------------+---------+ 
| Disposals              |     (741) |   (1,395) |    (51) |     (133) |          (2) | (2,322) | 
+------------------------+-----------+-----------+---------+-----------+--------------+---------+ 
| Exchange adjustments   |   (1,393) |   (1,150) |    (52) |     (148) |        (192) | (2,935) | 
+------------------------+-----------+-----------+---------+-----------+--------------+---------+ 
|                        |           |           |         |           |              |         | 
+------------------------+-----------+-----------+---------+-----------+--------------+---------+ 
| At 31 December 2009    |   17,820  |   14,787  |    559  |    3,298  |         627  | 37,091  | 
+------------------------+-----------+-----------+---------+-----------+--------------+---------+ 
| Accumulated            |           |           |         |           |              |         | 
| depreciation           |           |           |         |           |              |         | 
+------------------------+-----------+-----------+---------+-----------+--------------+---------+ 
| At 1 January 2008      |    1,014  |    3,135  |    118  |      855  |            - |  5,122  | 
+------------------------+-----------+-----------+---------+-----------+--------------+---------+ 
| Reclassifications      |         - |      113  |     (8) |     (105) |            - |      -  | 
+------------------------+-----------+-----------+---------+-----------+--------------+---------+ 
| Charge for the period  |      240  |    1,103  |     69  |      145  |            - |   1,557 | 
|                        |           |           |         |           |              |         | 
+------------------------+-----------+-----------+---------+-----------+--------------+---------+ 
| Disposals              |         - |      (73) |     (9) |      (48) |            - |   (130) | 
+------------------------+-----------+-----------+---------+-----------+--------------+---------+ 
| Exchange adjustments   |      567  |    2,031  |     78  |      419  |            - |  3,095  | 
+------------------------+-----------+-----------+---------+-----------+--------------+---------+ 
|                        |           |           |         |           |              |         | 
+------------------------+-----------+-----------+---------+-----------+--------------+---------+ 
| At 31 December 2008    |    1,821  |     6,309 |    248  |    1,266  |            - |  9,644  | 
+------------------------+-----------+-----------+---------+-----------+--------------+---------+ 
| Charge for the period  |      328  |    1,133  |     82  |      404  |            - |  1,947  | 
+------------------------+-----------+-----------+---------+-----------+--------------+---------+ 
| Disposals              |     (197) |     (695) |    (33) |      (45) |            - |   (970) | 
+------------------------+-----------+-----------+---------+-----------+--------------+---------+ 
| Exchange adjustments   |      (82) |      (98) |    (22) |     (119) |            - |   (321) | 
+------------------------+-----------+-----------+---------+-----------+--------------+---------+ 
|                        |           |           |         |           |              |         | 
+------------------------+-----------+-----------+---------+-----------+--------------+---------+ 
| At 31 December 2009    |    1,870  |    6,649  |    275  |    1,506  |         -    | 10,300  | 
+------------------------+-----------+-----------+---------+-----------+--------------+---------+ 
| Net book value         |           |           |         |           |              |         | 
+------------------------+-----------+-----------+---------+-----------+--------------+---------+ 
| At 1 January 2008      |    8,097  |    6,574  |    247  |      671  |           1  | 15,590  | 
+------------------------+-----------+-----------+---------+-----------+--------------+---------+ 
|                        |           |           |         |           |              |         | 
+------------------------+-----------+-----------+---------+-----------+--------------+---------+ 
| At 31 December 2008    |   12,805  |    9,313  |    295  |      986  |       1,850  | 25,249  | 
+------------------------+-----------+-----------+---------+-----------+--------------+---------+ 
|                        |           |           |         |           |              |         | 
+------------------------+-----------+-----------+---------+-----------+--------------+---------+ 
| At 31 December 2009    |   15,950  |    8,138  |    284  |    1,792  |         627  | 26,791  | 
+------------------------+-----------+-----------+---------+-----------+--------------+---------+ 
|                        |           |           |         |           |              |         | 
+------------------------+-----------+-----------+---------+-----------+--------------+---------+ 
 
Assets pledged as security 
At as 31 December 2009, building and machinery with carrying amount of 
GBP4,283,413 (2008: GBP8,758,000) are subjected to a first charge to secure the 
Group's bank borrowings. 
According to Government Document Number 304(2007) of Nanjing Jiangnin District, 
the company signed with Nanjing Jiangnin Economic & Technological Development 
Company. The property with net value of GBP380,560.00 and an area of 4,498.36 
square meters was exchanged. The area of the property after exchange is 4,994 
square meters. The surplus area is measured at GBP3000 per square meter. Due to 
the Government's procedures, the company did not get land use right certificate 
and property ownership certificate in time as the agreement confirmed. It is 
estimated that the company can get them in June 2010. 
 
11     Investment in subsidiary undertakings 
+--------------------------------------------+---------+----+---------+ 
|                                            | Company |    | Company | 
+--------------------------------------------+---------+----+---------+ 
|                                            |   2009  |    |    2008 | 
+--------------------------------------------+---------+----+---------+ 
|                                            |  GBP000 |    |  GBP000 | 
+--------------------------------------------+---------+----+---------+ 
| Cost:                                      |         |    |         | 
+--------------------------------------------+---------+----+---------+ 
| At the beginning of the financial year     |  20,977 |    |  20,679 | 
+--------------------------------------------+---------+----+---------+ 
| Addition from share-based payment to       |       - |    |     298 | 
| employees of subsidiaries                  |         |    |         | 
+--------------------------------------------+---------+----+---------+ 
|                                            |         |    |         | 
+--------------------------------------------+---------+----+---------+ 
| At the end of the financial year           |  20,977 |    |  20,977 | 
+--------------------------------------------+---------+----+---------+ 
|                                            |         |    |         | 
+--------------------------------------------+---------+----+---------+ 
 
12     Intangible assets 
+----------------------------------+----------+-----------+--------+ 
|                                  |    Group |     Group |  Group | 
+----------------------------------+----------+-----------+--------+ 
|                                  | Land use | Trademark |  Total | 
|                                  |   rights |           |        | 
|                                  |          |           |        | 
+----------------------------------+----------+-----------+--------+ 
| Cost:                            |   GBP000 |    GBP000 | GBP000 | 
+----------------------------------+----------+-----------+--------+ 
|                                  |          |           |        | 
+----------------------------------+----------+-----------+--------+ 
| At 1 January 2008                |   1,894  |       20  | 1,914  | 
+----------------------------------+----------+-----------+--------+ 
| Additions                        |     450  |         - |   450  | 
+----------------------------------+----------+-----------+--------+ 
| Exchange adjustments             |   1,018  |       10  | 1,028  | 
+----------------------------------+----------+-----------+--------+ 
| At 1 January 2009                |   3,362  |       30  | 3,392  | 
+----------------------------------+----------+-----------+--------+ 
| Additions                        |       6  |         - |     6  | 
+----------------------------------+----------+-----------+--------+ 
| Disposal                         |    (240) |      (28) |  (268) | 
+----------------------------------+----------+-----------+--------+ 
| Exchange adjustments             |    (302) |       (2) |  (304) | 
+----------------------------------+----------+-----------+--------+ 
| At 31 December 2009              |   2,826  |         - | 2,826  | 
+----------------------------------+----------+-----------+--------+ 
| Accumulated amortization:        |          |           |        | 
+----------------------------------+----------+-----------+--------+ 
|                                  |          |           |        | 
+----------------------------------+----------+-----------+--------+ 
| At 1 January 2008                |     131  |        5  |   136  | 
+----------------------------------+----------+-----------+--------+ 
| Amortisation for the financial   |      51  |        2  |    53  | 
| year                             |          |           |        | 
+----------------------------------+----------+-----------+--------+ 
| Exchange adjustments             |      76  |        4  |    80  | 
+----------------------------------+----------+-----------+--------+ 
| At 1 January 2009                |     258  |       11  |   269  | 
+----------------------------------+----------+-----------+--------+ 
| Amortisation for the financial   |      76  |        3  |    79  | 
| year                             |          |           |        | 
+----------------------------------+----------+-----------+--------+ 
| Disposal                         |     (46) |      (13) |   (59) | 
+----------------------------------+----------+-----------+--------+ 
| Exchange adjustments             |     (27) |       (1) |   (28) | 
+----------------------------------+----------+-----------+--------+ 
| At 31 December 2009              |     261  |         - |   261  | 
+----------------------------------+----------+-----------+--------+ 
| Net book value:                  |          |           |        | 
+----------------------------------+----------+-----------+--------+ 
| At 31 December 2008              |   3,104  |       19  | 3,123  | 
+----------------------------------+----------+-----------+--------+ 
| At 31 December 2009              |   2,565  |    2,564  | 2,565  | 
+----------------------------------+----------+-----------+--------+ 
The Group's land use rights have a remaining amortization period of between 36 
and 48 years. 
Because of the construction of Naning South Railway Station, the company signed 
an agreement with Nanjing Jiangnin Economic & Technological Development Company 
according to Government Document Number 304(2007) of Nanjing Jiangnin District. 
The land with net value of GBP203,994 and an area of 12374.28 square meterter 
was transferred at GBP43.77 per square meter. The Company achieved land transfer 
income of GBP337,597. 
 
Assets pledged as security 
As at 31 December 2009, land use rights with a carrying amount of GBP1,242,879 
(2008: GBP2,371,000) are subject to a first charge to secure the Group's bank 
borrowings. 
 
13     Inventories 
+-------------------------------------+---------+--------+---------+ 
|                                     |   Group |        |   Group | 
+-------------------------------------+---------+--------+---------+ 
|                                     |    2009 |        |    2008 | 
+-------------------------------------+---------+--------+---------+ 
|                                     |  GBP000 |        |  GBP000 | 
+-------------------------------------+---------+--------+---------+ 
| Raw materials                       |   7,211 |        |   3,939 | 
+-------------------------------------+---------+--------+---------+ 
| Work in progress                    |   5,635 |        |   4,376 | 
+-------------------------------------+---------+--------+---------+ 
| Finished goods                      |  24,029 |        |  20,095 | 
+-------------------------------------+---------+--------+---------+ 
|                                     |         |        |         | 
+-------------------------------------+---------+--------+---------+ 
|                                     |  36,875 |        |  28,410 | 
+-------------------------------------+---------+--------+---------+ 
|                                     |         |        |         | 
+-------------------------------------+---------+--------+---------+ 
14     Trade and other receivables 
+-------------------------------------+---------+--------+---------+ 
|                                     |   Group |        |   Group | 
+-------------------------------------+---------+--------+---------+ 
|                                     |    2009 |        |    2008 | 
+-------------------------------------+---------+--------+---------+ 
|                                     |  GBP000 |        |  GBP000 | 
+-------------------------------------+---------+--------+---------+ 
| Trade receivables                   |  40,880 |        |  32,010 | 
+-------------------------------------+---------+--------+---------+ 
| Notes receivable                    |   3,978 |        |   1,015 | 
+-------------------------------------+---------+--------+---------+ 
| Other receivables                   |   1,006 |        |     837 | 
+-------------------------------------+---------+--------+---------+ 
| Total financial assets other than   |  45,864 |        |  33,862 | 
| short term investments and cash and |         |        |         | 
| cash equivalents classified as      |         |        |         | 
| loans and receivables               |         |        |         | 
+-------------------------------------+---------+--------+---------+ 
| Advances to suppliers               |     964 |        |   2,191 | 
+-------------------------------------+---------+--------+---------+ 
| Prepayments                         |     251 |        |       3 | 
+-------------------------------------+---------+--------+---------+ 
|                                     |         |        |         | 
+-------------------------------------+---------+--------+---------+ 
|                                     |  47,079 |        |  36,056 | 
+-------------------------------------+---------+--------+---------+ 
|                                     |         |        |         | 
+-------------------------------------+---------+--------+---------+ 
|                                     |         |        |         | 
+-------------------------------------+---------+--------+---------+ 
 
Loans and receivables shown above are stated net of an allowance for doubtful 
receivables, the movements on this account being summarized below: 
+-------------------------------------+---------+--------+---------+ 
|                                     |   Group |        |   Group | 
+-------------------------------------+---------+--------+---------+ 
|                                     |    2009 |        |    2008 | 
+-------------------------------------+---------+--------+---------+ 
|                                     |  GBP000 |        |  GBP000 | 
+-------------------------------------+---------+--------+---------+ 
| Balance at beginning of financial   |    948  |        |     452 | 
| year                                |         |        |         | 
+-------------------------------------+---------+--------+---------+ 
| Disposal of subsidiary undertaking  |       - |        |       - | 
+-------------------------------------+---------+--------+---------+ 
| Allowance for the financial year    |    763  |        |     224 | 
+-------------------------------------+---------+--------+---------+ 
| Receivable written off during the   |       - |        |       - | 
| year as uncollectable               |         |        |         | 
+-------------------------------------+---------+--------+---------+ 
| Exchange adjustments                |   (113) |        |     272 | 
+-------------------------------------+---------+--------+---------+ 
|                                     |         |        |         | 
+-------------------------------------+---------+--------+---------+ 
|                                     |  1,598  |        |     948 | 
+-------------------------------------+---------+--------+---------+ 
|                                     |         |        |         | 
+-------------------------------------+---------+--------+---------+ 
 
The allowance account for doubtful receivables includes an amount of GBPnil 
(2008: nil) in respect of related parties. 
Trade receivables are generally on 90 day terms. The ageing analysis of loans 
and other receivables which are past due, but not impaired is as follows: 
+------------------------------------+---------+--------+---------+ 
|                                    |   Group |        |   Group | 
+------------------------------------+---------+--------+---------+ 
|                                    |    2009 |        |    2008 | 
+------------------------------------+---------+--------+---------+ 
|                                    |  GBP000 |        |  GBP000 | 
+------------------------------------+---------+--------+---------+ 
| 1-90  days overdue                 |   9,108 |        |   5,992 | 
+------------------------------------+---------+--------+---------+ 
| 91-270 days overdue                |  10,902 |        |   7,781 | 
+------------------------------------+---------+--------+---------+ 
| 271-630 days overdue               |   2,523 |        |   1,623 | 
+------------------------------------+---------+--------+---------+ 
| 631-990 days overdue               |     130 |        |      47 | 
+------------------------------------+---------+--------+---------+ 
|                                    |  22,663 |        |  15,443 | 
+------------------------------------+---------+--------+---------+ 
|                                    |         |        |         | 
+------------------------------------+---------+--------+---------+ 
|                                    |         |        |         | 
+------------------------------------+---------+--------+---------+ 
Loans and receivables that are neither past due nor impaired amount to 
GBP23,201,000 (2008: GBP18,419,000). The credit quality of these receivables is 
considered to be satisfactory. Included in 91 - 270 days overdue are debtors 
retentions of GBP2.7 million. 
 
15 Short term investments 
+------------------------------------+---------+--------+---------+ 
|                                    |   Group |        |   Group | 
+------------------------------------+---------+--------+---------+ 
|                                    |    2009 |        |    2008 | 
+------------------------------------+---------+--------+---------+ 
| Cost:                              |  GBP000 |        |  GBP000 | 
+------------------------------------+---------+--------+---------+ 
| Deposits with an initial maturity  |     285 |        |       - | 
| of more than 3 months              |         |        |         | 
+------------------------------------+---------+--------+---------+ 
| -Deposits secured for notes        |   5,400 |        |   3,834 | 
| payable                            |         |        |         | 
+------------------------------------+---------+--------+---------+ 
| -Deposits for export sale          |       - |        |     112 | 
+------------------------------------+---------+--------+---------+ 
|                                    |         |        |         | 
+------------------------------------+---------+--------+---------+ 
|                                    |   5,685 |        |   3,946 | 
+------------------------------------+---------+--------+---------+ 
16 Cash and cash equivalents 
+-------------------------+--------+----------+--------+----------+---------+----------+---------+ 
|                         |  Group |          |  Group |          | Company |          | Company | 
|                         |        |          |        |          |         |          |         | 
+-------------------------+--------+----------+--------+----------+---------+----------+---------+ 
|                         |   2009 |          |   2008 |          |    2009 |          |    2008 | 
+-------------------------+--------+----------+--------+----------+---------+----------+---------+ 
|                         | GBP000 |          | GBP000 |          |  GBP000 |          |  GBP000 | 
+-------------------------+--------+----------+--------+----------+---------+----------+---------+ 
| Cash                    | 41,508 |          | 36,085 |          |     254 |          |     197 | 
+-------------------------+--------+----------+--------+----------+---------+----------+---------+ 
| Deposits-secured for    | 22,487 |          | 14,712 |          |       - |          |       - | 
| Notes Payables with an  |        |          |        |          |         |          |         | 
| initial maturity of 3   |        |          |        |          |         |          |         | 
| months or less          |        |          |        |          |         |          |         | 
+-------------------------+--------+----------+--------+----------+---------+----------+---------+ 
|                         |        |          |        |          |         |          |         | 
+-------------------------+--------+----------+--------+----------+---------+----------+---------+ 
|                         | 63,995 |          | 50,797 |          |     254 |          |     197 | 
+-------------------------+--------+----------+--------+----------+---------+----------+---------+ 
|                         |        |          |        |          |         |          |         | 
+-------------------------+--------+----------+--------+----------+---------+----------+---------+ 
 
Cash earns interest at a fixed rate of between 0.15% and 1.17% in 2009 (2008: 
0.36% and 0.72%). 
17   Bank borrowings 
+------------------------------------+---------+--------+---------+ 
|                                    |   Group |        |   Group | 
+------------------------------------+---------+--------+---------+ 
|                                    |    2009 |        |    2008 | 
+------------------------------------+---------+--------+---------+ 
|                                    |  GBP000 |        |  GBP000 | 
+------------------------------------+---------+--------+---------+ 
| Short-term bank borrowings         |  28,329 |        |  32,845 | 
+------------------------------------+---------+--------+---------+ 
| Long-term  borrowings              |   1,366 |        |       - | 
+------------------------------------+---------+--------+---------+ 
|                                    |  29,695 |        |  32,845 | 
+------------------------------------+---------+--------+---------+ 
|                                    |         |        |         | 
+------------------------------------+---------+--------+---------+ 
Bank borrowings are all at fixed rates and are secured by a first mortgage over 
the Group's main property, plant and equipment and land use right (notes 11 and 
13), guaranteed by the Group company internally. The Group has no defaults and 
breaches of principal or interest on bank borrowings. 
Bank borrowings have an average maturity of 6 months from the end of the 
financial year (2008: 7 months) and an interest rate ranging from 0.3% to 4.86% 
(2008: 4.86% to 7.84%). The weighted average interest rate is 2.58% (2008: 
7.07%). 
The Group did not breach any of its covenants and did not default on payments of 
interest and principal on its bank borrowings. 
 
18   Trade and other payables 
+----------------------------+--------+----------+--------+----------+---------+----------+---------+ 
|                            |  Group |          |  Group |          | Company |          | Company | 
|                            |        |          |        |          |         |          |         | 
+----------------------------+--------+----------+--------+----------+---------+----------+---------+ 
|                            |   2009 |          |   2008 |          |    2009 |          |    2008 | 
+----------------------------+--------+----------+--------+----------+---------+----------+---------+ 
|                            | GBP000 |          | GBP000 |          |  GBP000 |          |  GBP000 | 
+----------------------------+--------+----------+--------+----------+---------+----------+---------+ 
| Trade payables             | 17,640 |          | 15,777 |          |       - |          |       - | 
+----------------------------+--------+----------+--------+----------+---------+----------+---------+ 
| Notes payable              | 27,413 |          | 15,157 |          |       - |          |       - | 
+----------------------------+--------+----------+--------+----------+---------+----------+---------+ 
| Staff costs payable        |  9,692 |          |  6,796 |          |       - |          |    -    | 
+----------------------------+--------+----------+--------+----------+---------+----------+---------+ 
| Amount due to employees    |  5,250 |          |  3,318 |          |       - |          |    -    | 
+----------------------------+--------+----------+--------+----------+---------+----------+---------+ 
| Due to related parties     |    100 |          |     38 |          |         |          |         | 
+----------------------------+--------+----------+--------+----------+---------+----------+---------+ 
| Other payables             | 10,544 |          | 14,817 |          |      52 |          |      52 | 
+----------------------------+--------+----------+--------+----------+---------+----------+---------+ 
|                            |        |          |        |          |         |          |         | 
+----------------------------+--------+----------+--------+----------+---------+----------+---------+ 
| Total other financial      | 70,639 |          | 55,903 |          |      52 |          |      52 | 
| liabilities excluding bank |        |          |        |          |         |          |         | 
| borrowings                 |        |          |        |          |         |          |         | 
+----------------------------+--------+----------+--------+----------+---------+----------+---------+ 
| Advances from customers    |  1,181 |          |  1,643 |          |       - |          |    -    | 
+----------------------------+--------+----------+--------+----------+---------+----------+---------+ 
| Other tax payable          |    353 |          |  3,576 |          |       - |          |    -    | 
+----------------------------+--------+----------+--------+----------+---------+----------+---------+ 
|                            |        |          |        |          |         |          |         | 
+----------------------------+--------+----------+--------+----------+---------+----------+---------+ 
|                            | 72,173 |          | 61,122 |          |      52 |          |      52 | 
+----------------------------+--------+----------+--------+----------+---------+----------+---------+ 
|                            |        |          |        |          |         |          |         | 
+----------------------------+--------+----------+--------+----------+---------+----------+---------+ 
 
Including bank borrowings, the Group's total other financial liabilities amounts 
to GBP108,774,000 (2008:GBP88,748,000). 
 
19   Related parties 
The group companies set out in note 24, the directors and the following related 
parties have been identified: 
+---------------------------------------+--+----------------------------+ 
| Related parties                       |  | Relationship               | 
+---------------------------------------+--+----------------------------+ 
|                                       |  |                            | 
+---------------------------------------+--+----------------------------+ 
| Jiangsu Shuangdeng Electric Appliance |  | Significant influence by   | 
| and Cable Co. Ltd                     |  | the Chief Executive        | 
|                                       |  |                            | 
+---------------------------------------+--+----------------------------+ 
Directors' remuneration is disclosed in note 5. Amounts due from and to related 
parties are as follows: 
+----------------------------+--------+-+--------+--+---------+----------+---------+ 
|                            |  Group | |  Group |  | Company |          | Company | 
+----------------------------+--------+-+--------+--+---------+----------+---------+ 
|                            |   2009 | |   2008 |  |    2009 |          |    2008 | 
+----------------------------+--------+-+--------+--+---------+----------+---------+ 
|                            | GBP000 | | GBP000 |  |  GBP000 |          |  GBP000 | 
+----------------------------+--------+-+--------+--+---------+----------+---------+ 
|                            |        | |        |  |         |          |         | 
+----------------------------+--------+-+--------+--+---------+----------+---------+ 
| Due from subsidiary        |      - | |      - |  |  11,238 |          |  12,620 | 
| undertakings - Non-trade   |        | |        |  |         |          |         | 
+----------------------------+--------+-+--------+--+---------+----------+---------+ 
|                            |        | |        |  |         |          |         | 
+----------------------------+--------+-+--------+--+---------+----------+---------+ 
|                            |        | |        |  |         |          |         | 
+----------------------------+--------+-+--------+--+---------+----------+---------+ 
| Due to related parties     |        | |        |  |         |          |         | 
+----------------------------+--------+-+--------+--+---------+----------+---------+ 
| -due to Chief Executive    |     41 | |      2 |  |       - |          |       - | 
| Shanji Yang                |        | |        |  |         |          |         | 
+----------------------------+--------+-+--------+--+---------+----------+---------+ 
|   -due to the directors    |     59 | |     12 |  |       - |          |       - | 
+----------------------------+--------+-+--------+--+---------+----------+---------+ 
| -due to other              |      - | |     24 |  |       - |          |       - | 
| shareholders               |        | |        |  |         |          |         | 
+----------------------------+--------+-+--------+--+---------+----------+---------+ 
| Due to subsidiary          |      - | |      - |  |     369 |          |   2,945 | 
| undertakings - Non-trade   |        | |        |  |         |          |         | 
+----------------------------+--------+-+--------+--+---------+----------+---------+ 
|                            |        | |        |  |         |          |         | 
+----------------------------+--------+-+--------+--+---------+----------+---------+ 
|                            |    100 | |     38 |  |     369 |          |   2,945 | 
+----------------------------+--------+-+--------+--+---------+----------+---------+ 
|                            |        | |        |  |         |          |         | 
+----------------------------+--------+-+--------+--+---------+----------+---------+ 
|                            |        | |        |  |         |          |         | 
+----------------------------+--------+-+--------+--+---------+----------+---------+ 
Significant transactions during the financial years with related parties, all of 
which were negotiated at arms' length, were as follows: 
 
+----------------------------------+--------+----------+--------+----------+---------+----------+---------+ 
|                                  |  Group |          |  Group |          | Company |          | Company | 
+----------------------------------+--------+----------+--------+----------+---------+----------+---------+ 
|                                  |   2009 |          |   2008 |          |    2009 |          |    2008 | 
+----------------------------------+--------+----------+--------+----------+---------+----------+---------+ 
|                                  | GBP000 |          | GBP000 |          |  GBP000 |          |  GBP000 | 
+----------------------------------+--------+----------+--------+----------+---------+----------+---------+ 
| Sale of goods:                   |        |          |        |          |         |          |         | 
+----------------------------------+--------+----------+--------+----------+---------+----------+---------+ 
| Shenyang Shuangdeng Sci-tech     |      - |          |  2,288 |          |       - |          |       - | 
| Development Co. Ltd.             |        |          |        |          |         |          |         | 
+----------------------------------+--------+----------+--------+----------+---------+----------+---------+ 
| Jiangsu Shuangdeng Electric      |    118 |          |     73 |          |       - |          |       - | 
| Appliance and Cable Co. Ltd      |        |          |        |          |         |          |         | 
+----------------------------------+--------+----------+--------+----------+---------+----------+---------+ 
|                                  |        |          |        |          |         |          |         | 
+----------------------------------+--------+----------+--------+----------+---------+----------+---------+ 
|                                  |    118 |          |  2,361 |          |       - |          |       - | 
+----------------------------------+--------+----------+--------+----------+---------+----------+---------+ 
|                                  |        |          |        |          |         |          |         | 
+----------------------------------+--------+----------+--------+----------+---------+----------+---------+ 
| Other operating income:          |        |          |        |          |         |          |         | 
+----------------------------------+--------+----------+--------+----------+---------+----------+---------+ 
| Jiangsu Shuangdeng Electric      |    237 |          |    147 |          |       - |          |       - | 
| Appliance and Cable Co. Ltd      |        |          |        |          |         |          |         | 
+----------------------------------+--------+----------+--------+----------+---------+----------+---------+ 
|                                  |        |          |        |          |         |          |         | 
+----------------------------------+--------+----------+--------+----------+---------+----------+---------+ 
|                                  |    237 |          |    147 |          |       - |          |       - | 
+----------------------------------+--------+----------+--------+----------+---------+----------+---------+ 
|                                  |        |          |        |          |         |          |         | 
+----------------------------------+--------+----------+--------+----------+---------+----------+---------+ 
| Purchases:                       |        |          |        |          |         |          |         | 
+----------------------------------+--------+----------+--------+----------+---------+----------+---------+ 
| Jiangsu Shuangdeng Electric      |     83 |          |    192 |          |       - |          |       - | 
| Appliance and Cable Co. Ltd      |        |          |        |          |         |          |         | 
+----------------------------------+--------+----------+--------+----------+---------+----------+---------+ 
|                                  |        |          |        |          |         |          |         | 
+----------------------------------+--------+----------+--------+----------+---------+----------+---------+ 
|                                  |     83 |          |    192 |          |       - |          |       - | 
+----------------------------------+--------+----------+--------+----------+---------+----------+---------+ 
|                                  |        |          |        |          |         |          |         | 
+----------------------------------+--------+----------+--------+----------+---------+----------+---------+ 
| Declared dividend                |        |          |        |          |         |          |         | 
+----------------------------------+--------+----------+--------+----------+---------+----------+---------+ 
| Leadstar Enterprises Limited     |      - |          |      - |          |   2,334 |          |   2,000 | 
+----------------------------------+--------+----------+--------+----------+---------+----------+---------+ 
|                                  |        |          |        |          |         |          |         | 
+----------------------------------+--------+----------+--------+----------+---------+----------+---------+ 
|                                  |      - |          |      - |          |   2,334 |          |   2,000 | 
+----------------------------------+--------+----------+--------+----------+---------+----------+---------+ 
|                                  |        |          |        |          |         |          |         | 
+----------------------------------+--------+----------+--------+----------+---------+----------+---------+ 
|                                  |        |          |        |          |         |          |         | 
+----------------------------------+--------+----------+--------+----------+---------+----------+---------+ 
Amounts due to the Company from subsidiary undertakings represent net proceeds 
from the listing on AIM, which have been advanced to the trading subsidiaries to 
invest in new plant and working capital. Amounts due to subsidiary undertakings 
represent costs paid on the Company's behalf by its subsidiary undertakings. In 
the opinion of the directors, the Group is controlled by Mr. Shanji Yang, 
General Manager and Director, who owned 55.36% of the issued share capital of 
China Shoto plc at 31 December 2009 (2008: 47.06%). 
 
20   Deferred tax 
Deferred tax is calculated in full on temporary differences under the liability 
method using a respective companies' tax rate. The movements in deferred tax 
assets and liabilities during the period are shown below: 
+-------------------------------------+---------+-----+----------+ 
|                                     |  Group  |     |   Group  | 
+-------------------------------------+---------+-----+----------+ 
|                                     |    2009 |     |     2008 | 
+-------------------------------------+---------+-----+----------+ 
|                                     |  GBP000 |     |   GBP000 | 
+-------------------------------------+---------+-----+----------+ 
| Deferred tax assets                 |         |     |          | 
+-------------------------------------+---------+-----+----------+ 
| At beginning of the financial year  |     43  |     |      92  | 
|                                     |         |     |          | 
+-------------------------------------+---------+-----+----------+ 
| Transfer to/(from) income statement |    181  |     |     (77) | 
|                                     |         |     |          | 
+-------------------------------------+---------+-----+----------+ 
| Difference in tax rate of tax rate  |       - |     |       5  | 
| relief                              |         |     |          | 
+-------------------------------------+---------+-----+----------+ 
| Exchange differences                |    (26) |     |      23  | 
+-------------------------------------+---------+-----+----------+ 
|                                     |         |     |          | 
+-------------------------------------+---------+-----+----------+ 
| At end of the financial year        |    198  |     |      43  | 
+-------------------------------------+---------+-----+----------+ 
|                                     |         |     |          | 
+-------------------------------------+---------+-----+----------+ 
21   Share capital 
+-------------------------------------+---------+-----+----------+ 
|                                     |    2009 |     |     2008 | 
+-------------------------------------+---------+-----+----------+ 
|                                     |  GBP000 |     |   GBP000 | 
+-------------------------------------+---------+-----+----------+ 
| Authorised                          |         |     |          | 
+-------------------------------------+---------+-----+----------+ 
| 100,000,000 Ordinary shares of 10p  |  10,000 |     |   10,000 | 
| each                                |         |     |          | 
+-------------------------------------+---------+-----+----------+ 
|                                     |         |     |          | 
+-------------------------------------+---------+-----+----------+ 
| Allotted, called up and fully paid: |         |     |          | 
|                                     |         |     |          | 
+-------------------------------------+---------+-----+----------+ 
| 23,343,770 Ordinary shares of 10p   |   2,334 |     |    2,334 | 
| each                                |         |     |          | 
+-------------------------------------+---------+-----+----------+ 
|                                     |         |     |          | 
+-------------------------------------+---------+-----+----------+ 
|                                     |         |     |          | 
+-------------------------------------+---------+-----+----------+ 
22   Reserves 
Share premium account 
Share premium represents the amount subscribed for shares in excess of the 
nominal value less expenses incurred on the issue of shares. 
 
Other reserves 
In accordance with IFRS 3, the principles of reverse acquisition accounting have 
been applied in the consolidated financial statements in respect of the business 
combination of the Company and Leadstar Enterprises Limited. The fair value of 
the Company's net assets and business were assessed at GBP2, being the book 
value of its assets, and therefore no goodwill arose on this transaction. In 
accordance with companies legislations, the difference between the fair value of 
Leadstar Enterprises Limited's net assets on acquisition and the nominal value 
of the ordinary shares issued by the Company on consolidation also has been 
credited to other reserves. 
In the Company's financial statements, the difference between the fair value of 
the consideration paid and the nominal value of the 10p ordinary shares issued 
to the vendors of Leadstar Enterprises Limited have been credited to other 
reserves. 
 
Share option reserve 
The share option reserve represents the cumulative share based payment charge 
for options issued by the Group. 
 
Statutory reserves 
Statutory reserves comprise the following: 
Statutory surplus reserve 
Under People's Republic of China ("PRC") regulations 
and the Articles of Association of the relevant companies, companies within the 
Group registered in the PRC are required to transfer 10% of their profit after 
income tax, as determined under PRC GAAP, to the statutory surplus reserve until 
the reserve balance reaches 50% of its registered capital. The transfer to this 
reserve must be made before the distribution of dividends to equity owners. The 
statutory surplus reserve can be used to make up previous years' losses, if any, 
and may be converted into paid-in capital in proportion to the existing 
interests of equity owners, provided that the balance after such conversion is 
not less than 25% of the registered capital. 
Statutory public welfare fund 
According to the relevant PRC regulations and the Articles of Association of the 
relevant companies, companies within the Group registered in PRC are required to 
transfer 10% of their profit after income tax, as determined under PRC GAAP, to 
the statutory public welfare fund. The statutory public welfare fund is 
incorporated for the purpose of providing employee facilities and other 
collective benefits to its employees. 
 
Retained earnings 
The retained earnings reserve comprises the cumulative net gains and losses 
recognised in the consolidated income statement. 
 
Foreign currency translation reserve 
The foreign currency translation reserve comprises the gains and losses arising 
on translating the net assets and the results of overseas operations into pounds 
Sterling. 
 
23   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. The parent company has neither significant financial 
instruments nor significant exposure to such risks. 
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 
·  Short term investment 
·  Cash and cash equivalents 
·  Trade and other payables 
·  Bank borrowings 
 
All financial assets are designated as loans and receivables (note 14). 
Available-for-sale asset, all financial assets and liabilities are carried at 
amortised cost. 
General objective, policies 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 
that ensure the effective implementation of the objectives and policies to the 
Group's Finance Director. 
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 carrying amount of financial assets represents the group's maximum exposure 
to credit risk.  A significant proportion of the group's credit risk relates to 
trade and receivables.  The Group distinguishes its clients by two kinds of 
credit line. One is 100% credit and the other is nil credit. The Group controls 
the credit risk from the clients of nil credit through prepayment before goods 
are transferred to them. The Group also receives a monthly sale and gathering 
report detailing all customers. In this report if the debt is collected outside 
the credit period interest is charged. 
Management review all debtors for impairment and are comfortable that all 
un-provided debts are fully recoverable. 
Quantitative disclosures of the credit risk in relation to trade and other 
receivables are disclosed in note 14. 
 
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. To achieve this aim, the group 
improved receivables turnover ratios by requiring the customer to pay interest 
on overdue balances. The Group also seeks to reduce liquidity risk by obtaining 
high credit ratings from banks in order to get ease of access to finance when 
required. The Group has no defaults or breaches on its financial liabilities. 
A maturity analysis of liabilities, including bank borrowings and interest is 
given below: 
+------------------------------------+---------+--------+---------+ 
|                                    |   Group |        |   Group | 
+------------------------------------+---------+--------+---------+ 
|                                    |    2009 |        |    2008 | 
+------------------------------------+---------+--------+---------+ 
|                                    |  GBP000 |        |  GBP000 | 
+------------------------------------+---------+--------+---------+ 
| Repayable within 1 month           |  22,104 |        |  19,992 | 
+------------------------------------+---------+--------+---------+ 
| Repayable within 2-3 months        |  50,864 |        |  19,183 | 
+------------------------------------+---------+--------+---------+ 
| Repayable within 4- 6months        |  16,511 |        |  32,674 | 
+------------------------------------+---------+--------+---------+ 
| Repayable 7-12 months              |   8,821 |        |  12,691 | 
+------------------------------------+---------+--------+---------+ 
| Repayable over 1 year              |   9,810 |        |   4,208 | 
+------------------------------------+---------+--------+---------+ 
| Total                              | 108,110 |        |  88,748 | 
+------------------------------------+---------+--------+---------+ 
 
c) Market risk 
Market risk arises from the Group's use of interest bearing, tradable and 
foreign currency financial instruments. It is the risk that the fair value or 
future cash flows of a financial instrument will fluctuate because of changes in 
interest rates (interest rate risk), foreign exchange rates (currency risk) and 
price of lead ingot (price risk). The policy for each of these risks is 
discussed below: 
 
d) Currency Risk 
The Group's policy is, where possible, to allow group entities to settle 
liabilities denominated in their functional currency with cash generated from 
their own operations in that currency. 
The Group has transaction currency exposures. Such exposure arises from sales by 
an operating unit in currencies other than its functional currency. 
Approximately 5% of the Group's sales are denominated in USD. 
If the exchange rate 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. 
An analysis by currency of the group's financial assets is below: 
+------------------------------------+---------+--------+---------+ 
|                                    |   Group |        |   Group | 
+------------------------------------+---------+--------+---------+ 
|                                    |    2009 |        |    2008 | 
+------------------------------------+---------+--------+---------+ 
|                                    |  GBP000 |        |  GBP000 | 
+------------------------------------+---------+--------+---------+ 
| Financial assets                   |         |        |         | 
+------------------------------------+---------+--------+---------+ 
| Renminbi                           |  45,392 |        |  35,303 | 
+------------------------------------+---------+--------+---------+ 
| US Dollar                          |   1,654 |        |     593 | 
+------------------------------------+---------+--------+---------+ 
| Other                              |      33 |        |     160 | 
+------------------------------------+---------+--------+---------+ 
|                                    |  47,079 |        |  36,056 | 
+------------------------------------+---------+--------+---------+ 
|                                    |         |        |         | 
+------------------------------------+---------+--------+---------+ 
A 10% strengthening of the RMB against the USD would result in reported group 
profit being GBP853,000 lower.  Conversely, a 10% weakening of the RMB against 
the USD would result in reported group profit being GBP853,000 higher. 
The group prepares its consolidated financial statements in sterling and 
therefore the group's net asset position are exposed to retranslation risk as a 
result of movements in the RMB and Sterling exchange rate. 
 
e) 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 and is therefore only exposed to fair value 
interest rate risk. Similarly all deposits earn interest at a fixed rate. 
 
f) Price risk 
The Group's balance sheet and income statement is exposed to the price of lead 
ingot, the main raw material used by the Group in its production process. In 
2009, the price of the main raw material, lead ingot, changed between a month 
average price RMB 11,985 and RMB 15,938. The Group initiated negotiations with 
the telecommunications operators and its OEM customers, resulting in a linkage 
to the price of lead, which effectively alleviated pressure arising from the 
increase in the raw material price by passing it on to the customer, by 
agreement. The Group does not hedge the price of lead ingot. 
 
Capital management 
The Group considers its capital to comprise its ordinary share capital, share 
premium and accumulated 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. 
Fair values 
The book value and fair value of all the Group's and companies financial assets 
and liabilities are the same. 
 
 
24   Group companies 
The companies comprising the Group are as follows: 
+---------------------+---------------+----------------+------------+ 
|                     |               |                | Proportion | 
|                     |               |                |     (%) of | 
|                     |     Place and |                |  ownership | 
| Name of the         |       date of |      Principal |   interest | 
| companies           | incorporation |     activities |      at 31 | 
|                     |               |                |   December | 
|                     |               |                |       2009 | 
+---------------------+---------------+----------------+------------+ 
|                     |               |                |       100% | 
| Leadstar            |       British |     Investment |            | 
| Enterprises Limited |        Virgin |        holding |            | 
|                     |       Islands |                |            | 
|                     |      18 March |                |            | 
|                     |          2005 |                |            | 
+---------------------+---------------+----------------+------------+ 
| Jiangsu Shuangdeng  |        China, |     Investment |       100% | 
| Group Co. Ltd       |            16 |        holding |            | 
|                     |     September |                |            | 
|                     |          2003 |                |            | 
+---------------------+---------------+----------------+------------+ 
| Hong Kong Wealth    |    Hong Kong, |     Investment |       100% | 
| Source Development  |        China, |        holding |            | 
| Co. Ltd             |            24 |                |            | 
|                     |     September |                |            | 
|                     |          1997 |                |            | 
+---------------------+---------------+----------------+------------+ 
| Jiangsu Shuangdeng  |        China, | Manufacturing, |       100% | 
| Power Supply Co.    |    9 December |      sales and |            | 
| Ltd                 |          1995 | development of |            | 
|                     |               |  AGM batteries |            | 
+---------------------+---------------+----------------+------------+ 
| Jiangsu Fuste Power |        China, |  Manufacturing |       100% | 
| Supply Co. Ltd      |    23 October |   and sales of |            | 
|                     |          2001 |    GEL and GFX |            | 
|                     |               |      batteries |            | 
+---------------------+---------------+----------------+------------+ 
| Nanjing Shuangdeng  |        China, |     Technology |       100% | 
| Science and         |       18 June |   research and |            | 
| Technology          |          2001 |   development, |            | 
| Development Academy |               |    manufacture |            | 
| Co. Ltd             |               |   and sales of |            | 
|                     |               |            UPS |            | 
+---------------------+---------------+----------------+------------+ 
| Jiangsu Best Power  |        China, |  Manufacturing |       100% | 
| Supply Co. Ltd      |    13 January |      and sales |            | 
|                     |          2006 |    power-aided |            | 
|                     |               |        bicycle |            | 
|                     |               |      batteries |            | 
+---------------------+---------------+----------------+------------+ 
| Glory Trinity       |    Hong Kong, |     Investment |       100% | 
| Engineering Ltd     |        China, |        holding |            | 
|                     |   26 February |                |            | 
|                     |          2003 |                |            | 
+---------------------+---------------+----------------+------------+ 
| Yangzhou Zhenghe    |        China, | Manufacturing, |        59% | 
| Power Supply Co.,   |    2 November |      sales and |            | 
| Ltd                 |          2001 | development of |            | 
|                     |               |  GFM batteries |            | 
+---------------------+---------------+----------------+------------+ 
The only direct subsidiary of the Company is Leadstar Enterprises Limited. All 
other investments in subsidiaries are held indirectly. 
 
25   Share-based payments 
Equity-settled share options 
1,480,000 share options were granted to certain directors and employees on 
flotation of the Company, and a total of 320,000 share options were granted to 
Seymour Pierce Limited and FT International Corporate Advisory Limited for 
services provided in respect of the flotation.  The options granted to the 
directors and employees are exercisable in the period December 2008 to December 
2015 and lapse thereafter or if the employee leaves the Group.  The options 
granted to Seymour Pierce Limited and FT International Corporate Advisory 
Limited are exercisable at any time up to 2 years from the date of listing on 
AIM; 200,000 of the options were exercised in 2006 and the remaining 120,000 
options lapsed in December 2007. 
All the options were granted at the placing price of GBP1.30 per share. 
+----------------------------+-----------+-+-----------+-+----------------+ 
|                            |      2009 | |      2008 | |       Exercise | 
|                            |           | |           | |                | 
+----------------------------+-----------+-+-----------+-+----------------+ 
|                            | Number of | | Number of | |     price(GBP) | 
+----------------------------+-----------+-+-----------+-+----------------+ 
|                            |   Options | |  Options  | |                | 
+----------------------------+-----------+-+-----------+-+----------------+ 
| Outstanding at the         | 1,480,000 | | 1,480,000 | |          1.30  | 
| beginning of the period    |           | |           | |                | 
+----------------------------+-----------+-+-----------+-+----------------+ 
| Lapsed during the period   |   300,000 | |         - | |          1.30  | 
+----------------------------+-----------+-+-----------+-+----------------+ 
|                            |           | |           | |                | 
+----------------------------+-----------+-+-----------+-+----------------+ 
| Outstanding at the end of  | 1,180,000 | | 1,480,000 | |          1.30  | 
| the period                 |           | |           | |                | 
+----------------------------+-----------+-+-----------+-+----------------+ 
|                            |           | |           | |                | 
+----------------------------+-----------+-+-----------+-+----------------+ 
| Exercisable at the end of  | 1,180,000 | | 1,480,000 | |          1.30  | 
| the period                 |           | |           | |                | 
+----------------------------+-----------+-+-----------+-+----------------+ 
 
The Group recognised total expenses of GBPnil (2008: GBP298,000) related to 
equity-settled share-based payment transaction during the year. All options had 
vested at 31 December 2008. 
 
26   Segmental information 
The Group's report segments reflect the internal reporting format provided to 
the Chief Operating Decision maker and are as follows: 
 
l The Power Type Batteries segment is comprised of power-aided bicycle 
batteries. This segment contributes 8% (2008: 10%) to Group turnover. 
l The Back Up Batteries segment includes Valve Regulated, Flooded and Gel 
batteries. This segment contributes 92% (2008: 90%) to Group turnover. 
 
Measurement of operating segment profit or loss, assets and liabilities. 
The accounting policies of the operating segments are the same as those 
described in the summary of significant policies. 
The Group evaluates performance on operating segment profit or loss from 
operations before tax not including non-recurring losses, such as restructuring 
costs and goodwill impairment, and also excluding the effects of share based 
payments. 
 
Inter-segment sales are priced along the same lines as sales to external 
customers, with an appropriate discount being applied to encourage use of group 
resources at a rate acceptable to local tax authorities. This policy was applied 
consistently throughout the current and prior period. 
 
Segment assets exclude tax assets and assets used primarily for corporate 
purposes. Segment liabilities exclude tax liabilities and defined benefit 
liabilities. Even though loans and borrowings arise from finance activities 
rather than operating activities, they are allocated to the segments based on 
relevant factors (e.g. funding requirements). Details are provided in the 
reconciliation from segment assets and liabilities to the group position. 
 
+---------------+--------------------+------------------+-------------------+-------------------+---------+----------+------------------+---------------------+ 
|               |                Back up                |                  PTB                  |    Eliminations    |              Continuing                | 
|               |              batteries                |                                       |                    |              operations                | 
+---------------+---------------------------------------+---------------------------------------+--------------------+----------------------------------------+ 
|               |              2009  |            2008  |             2009  |             2008  |   2009  |    2008  |            2009  |               2008  | 
+---------------+--------------------+------------------+-------------------+-------------------+---------+----------+------------------+---------------------+ 
|               |             GBP000 |           GBP000 |            GBP000 |            GBP000 |  GBP000 |   GBP000 |           GBP000 |              GBP000 | 
+---------------+--------------------+------------------+-------------------+-------------------+---------+----------+------------------+---------------------+ 
| Revenue:      |                    |                  |                   |                   |         |          |                  |                     | 
+---------------+--------------------+------------------+-------------------+-------------------+---------+----------+------------------+---------------------+ 
| Sales to      |           196,531  |         164,794  |           16,038  |           18,289  |         |          |         212,569  |            183,083  | 
| external      |                    |                  |                   |                   |       - |        - |                  |                     | 
| customers     |                    |                  |                   |                   |         |          |                  |                     | 
+---------------+--------------------+------------------+-------------------+-------------------+---------+----------+------------------+---------------------+ 
| Inter-segment |                  - |                - |            9,676  |           22,718  | (9,676) | (22,718) |                - |                   - | 
| sales         |                    |                  |                   |                   |         |          |                  |                     | 
+---------------+--------------------+------------------+-------------------+-------------------+---------+----------+------------------+---------------------+ 
|               |                    |                  |                   |                   |         |          |                  |                     | 
+---------------+--------------------+------------------+-------------------+-------------------+---------+----------+------------------+---------------------+ 
| Total revenue |           196,531  |         164,794  |           25,714  |           41,007  | (9,676) | (22,718) |         212,569  |            183,083  | 
|               |                    |                  |                   |                   |         |          |                  |                     | 
+---------------+--------------------+------------------+-------------------+-------------------+---------+----------+------------------+---------------------+ 
|               |                    |                  |                   |                   |         |          |                  |                     | 
+---------------+--------------------+------------------+-------------------+-------------------+---------+----------+------------------+---------------------+ 
|               |                    |                  |                   |                   |         |          |                  |                     | 
+---------------+--------------------+------------------+-------------------+-------------------+---------+----------+------------------+---------------------+ 
| Results:      |                    |                  |                   |                   |         |          |                  |                     | 
+---------------+--------------------+------------------+-------------------+-------------------+---------+----------+------------------+---------------------+ 
| Segment       |            26,011  |          11,499  |             (669) |              337  |       - |        - |          25,342  |             11,836  | 
| profit        |                    |                  |                   |                   |         |          |                  |                     | 
+---------------+--------------------+------------------+-------------------+-------------------+---------+----------+------------------+---------------------+ 
|               |                    |                  |                   |                   |         |          |                  |                     | 
+---------------+--------------------+------------------+-------------------+-------------------+---------+----------+------------------+---------------------+ 
| Unallocated   |                    |                  |                   |                   |         |          |            (268) |               (284) | 
| corporate     |                    |                  |                   |                   |         |          |                  |                     | 
| expenses      |                    |                  |                   |                   |         |          |                  |                     | 
+---------------+--------------------+------------------+-------------------+-------------------+---------+----------+------------------+---------------------+ 
|               |                    |                  |                   |                   |         |          |                  |                     | 
+---------------+--------------------+------------------+-------------------+-------------------+---------+----------+------------------+---------------------+ 
| Profit from   |                    |                  |                   |                   |         |          |          25,074  |             11,552  | 
| operations    |                    |                  |                   |                   |         |          |                  |                     | 
| before        |                    |                  |                   |                   |         |          |                  |                     | 
| taxation      |                    |                  |                   |                   |         |          |                  |                     | 
+---------------+--------------------+------------------+-------------------+-------------------+---------+----------+------------------+---------------------+ 
| Income        |                    |                  |                   |                   |         |          |          (1,610) |             (1,258) | 
| taxation      |                    |                  |                   |                   |         |          |                  |                     | 
+---------------+--------------------+------------------+-------------------+-------------------+---------+----------+------------------+---------------------+ 
|               |                    |                  |                   |                   |         |          |                  |                     | 
+---------------+--------------------+------------------+-------------------+-------------------+---------+----------+------------------+---------------------+ 
| Profit for    |                    |                  |                   |                   |         |          |          23,464  |             10,294  | 
| the year      |                    |                  |                   |                   |         |          |                  |                     | 
+---------------+--------------------+------------------+-------------------+-------------------+---------+----------+------------------+---------------------+ 
|               |                    |                  |                   |                   |         |          |                  |                     | 
+---------------+--------------------+------------------+-------------------+-------------------+---------+----------+------------------+---------------------+ 
|               |                    |                  |                   |                   |         |          |                  |                     | 
+---------------+--------------------+------------------+-------------------+-------------------+---------+----------+------------------+---------------------+ 
 
+--------------+-------------------+----------------+---------------+----------------+--------+----------+----------------+----------------+ 
|              |              Back up               |              PTB               |   Eliminations    |          Consolidated           | 
|              |             batteries              |                                |                   |                                 | 
+--------------+------------------------------------+--------------------------------+-------------------+---------------------------------+ 
|              |              2009 |           2008 |          2009 |           2008 |   2009 |     2008 |           2009 |           2008 | 
+--------------+-------------------+----------------+---------------+----------------+--------+----------+----------------+----------------+ 
|              |            GBP000 |         GBP000 |        GBP000 |         GBP000 | GBP000 |   GBP000 |         GBP000 |         GBP000 | 
+--------------+-------------------+----------------+---------------+----------------+--------+----------+----------------+----------------+ 
| Assets       |                   |                |               |                |        |          |                |                | 
| and          |                   |                |               |                |        |          |                |                | 
| liabilites:  |                   |                |               |                |        |          |                |                | 
+--------------+-------------------+----------------+---------------+----------------+--------+----------+----------------+----------------+ 
| Segment      |          169,119  |       161,319  |       10,835  |         3,837  |     -  | (22,646) |       179,954  |       142,510  | 
| assets       |                   |                |               |                |        |          |                |                | 
+--------------+-------------------+----------------+---------------+----------------+--------+----------+----------------+----------------+ 
| Unallocated  |                   |                |               |                |        |          |         3,234  |         5,114  | 
| assets       |                   |                |               |                |        |          |                |                | 
+--------------+-------------------+----------------+---------------+----------------+--------+----------+----------------+----------------+ 
|              |                   |                |               |                |        |          |                |                | 
+--------------+-------------------+----------------+---------------+----------------+--------+----------+----------------+----------------+ 
| Total        |                   |                |               |                |        |          |       183,188  |       147,624  | 
| assets       |                   |                |               |                |        |          |                |                | 
+--------------+-------------------+----------------+---------------+----------------+--------+----------+----------------+----------------+ 
|              |                   |                |               |                |        |          |                |                | 
+--------------+-------------------+----------------+---------------+----------------+--------+----------+----------------+----------------+ 
| Segment      |          104,141  |       103,617  |        5,454  |              - |     -  | (19,746) |       109,595  |        83,871  | 
| liabilities  |                   |                |               |                |        |          |                |                | 
+--------------+-------------------+----------------+---------------+----------------+--------+----------+----------------+----------------+ 
| Unallocated  |                   |                |               |                |        |          |           563  |        10,260  | 
| liabilities  |                   |                |               |                |        |          |                |                | 
+--------------+-------------------+----------------+---------------+----------------+--------+----------+----------------+----------------+ 
| Total        |                   |                |               |                |        |          |       110,158  |        94,131  | 
| liabilites   |                   |                |               |                |        |          |                |                | 
+--------------+-------------------+----------------+---------------+----------------+--------+----------+----------------+----------------+ 
|              |                   |                |               |                |        |          |                |                | 
+--------------+-------------------+----------------+---------------+----------------+--------+----------+----------------+----------------+ 
| Other        |                   |                |               |                |        |          |                |                | 
| segment      |                   |                |               |                |        |          |                |                | 
| information: |                   |                |               |                |        |          |                |                | 
+--------------+-------------------+----------------+---------------+----------------+--------+----------+----------------+----------------+ 
| Finance      |              440  |           194  |             - |              - |      - |        - |           440  |           194  | 
| income       |                   |                |               |                |        |          |                |                | 
+--------------+-------------------+----------------+---------------+----------------+--------+----------+----------------+----------------+ 
| Finance      |            1,705  |         2,811  |             - |              - |      - |        - |         1,705  |         2,811  | 
| costs        |                   |                |               |                |        |          |                |                | 
+--------------+-------------------+----------------+---------------+----------------+--------+----------+----------------+----------------+ 
| Capital      |                   |                |               |                |        |          |                |                | 
| expenditure: |                   |                |               |                |        |          |                |                | 
+--------------+-------------------+----------------+---------------+----------------+--------+----------+----------------+----------------+ 
| Property,    |            7,417  |         3,434  |           38  |            102 |        |     -    |         7,455  |         3,536  | 
| plant and    |                   |                |               |                |      - |          |                |                | 
| equipment    |                   |                |               |                |        |          |                |                | 
+--------------+-------------------+----------------+---------------+----------------+--------+----------+----------------+----------------+ 
| Intangible   |                6  |           450  |             - |              - |      - |     -    |             6  |           450  | 
| assets       |                   |                |               |                |        |          |                |                | 
+--------------+-------------------+----------------+---------------+----------------+--------+----------+----------------+----------------+ 
| Depreciation |            1,782  |         1,432  |          244  |            178 |        |     -    |         2,026  |         1,610  | 
| and          |                   |                |               |                |      - |          |                |                | 
| amortization |                   |                |               |                |        |          |                |                | 
+--------------+-------------------+----------------+---------------+----------------+--------+----------+----------------+----------------+ 
 
Geographical segments 
+----------+--------+--------+--------+--------+--------+--------+--------+--------+ 
|          |      India      |    Singapore    |     Others      |      Total      | 
+----------+-----------------+-----------------+-----------------+-----------------+ 
|          |   2009 |   2008 |   2009 |   2008 |   2009 |   2008 |   2009 |   2008 | 
+----------+--------+--------+--------+--------+--------+--------+--------+--------+ 
|          | GBP000 | GBP000 | GBP000 | GBP000 | GBP000 | GBP000 | GBP000 | GBP000 | 
+----------+--------+--------+--------+--------+--------+--------+--------+--------+ 
| Export   | 5,704  | 25,969 | 1,032  |      - | 2,908  | 3,745  | 9,644  | 29,714 | 
| sales to |        |        |        |        |        |        |        |        | 
+----------+--------+--------+--------+--------+--------+--------+--------+--------+ 
All export sales originate from the Back up batteries segment. 
 
27   Construction commitments 
Construction commitments as at 31 December 2009 but not recognized in the 
financial statements is GBP3,422,068 (2008: GBP1,850,000). 
 
28   Post balance sheet event 
The Company signed a share ownership acquisition contract with Jiangsu Tianpeng 
Lead Oxide Co., Ltd and Jiangsu Tianpeng Chemical Industry Co., Ltd regarding 
acquisition of Rugao Tianpeng Metallurgy Co, Ltd (hereafter referred to as 
"Tianpeng Metallurgy") on 19 December 2009. The total consideration is 
GBP1,820,000.  The company has paid GBP182,000 on 28 December, 2009 and 
GBP1,275,300 in January 2010, and the balance GBP362,700 will be paid during 
July 2010. The Company had acquired substantial control of Tianpeng Metallurgy 
on the 22 January 2010. The total assets and liabilities as at 31December 2009 
were GBP1,973,278 and GBP1,252,700, respectively. 
 
 
Notice of Annual General Meeting 
NOTICE IS HEREBY GIVEN that the fifth Annual General Meeting of China Shoto plc 
will be held on 8th Floor, 131 Finsbury Pavement London EC2A 1NT at 10am on 22nd 
June 2010 to transact the following resolutions. Resolutions 1-5 will be 
proposed as ordinary resolutions and resolutions 6-7 will be proposed as special 
resolutions: 
 
Ordinary Business 
1.  To receive and adopt the Group's Annual Report and Financial Statements for 
the financial year ended 31 December 2009, together with the Directors' Report 
and the Auditors' Report on those financial statements. 
2.  To re-appoint BDO LLP as Auditors to hold office from the conclusion of this 
Meeting until the conclusion of the next Annual General Meeting of the Company 
at which financial statements are laid and to authorise the Directors to fix 
their remuneration. 
3.  To declare a full year dividend of 5 pence per ordinary share. 
4.  To reappoint Peter Maurice Crystal who retires by rotation as a 
Non-Executive Director. 
5.  To reappoint Zhou Yuezhang who retires by rotation as an Executive Director. 
 
 
Special business 
6.  That for the purposes of Section 551 of the Companies Act 2006 (the "Act") 
the Directors be and they are generally and unconditionally authorised to 
exercise all the powers of the Company to allot shares, grant rights to 
subscribe for or to convert any securities into shares in the Company, in 
substitution of all previous authorities conferred on the Directors in 
accordance with Section 80 of the Companies Act 1985 up to a maximum number of 5 
million shares having an aggregate nominal value of GBP500,000 to such persons 
and at such times and on such terms as the Directors think proper, provided that 
this authority shall expire on the day falling 15 months after the date of the 
passing of this resolution or, if earlier, at the conclusion of the annual 
general meeting of the Company to be held in 2011 unless and to the extent that 
such authority is renewed or extended prior to such date, save that the Company 
may make an offer or agreement before the expiry of this authority which would 
or might require shares to be allotted after such expiry and the Directors may 
allot shares pursuant to such an offer or agreement as if the authority 
conferred hereby had not expired. 
7.  That, subject to the passing of resolution 6 above, the Directors are 
empowered, in substitution for all existing authorities and pursuant to Sections 
570 and 573 of the Act to allot shares, grant rights to subscribe for or to 
convert any securities into shares in the Company for cash as if Section 561(1) 
of the Act did not apply to any such allotment of shares, grant rights to 
subscribe for or to convert any securities into shares in the Company provided 
that this power shall be limited to the allotment of equity securities as 
follows: 
 
(a)   the allotment of equity securities in connection with any issue by way of 
rights issue or other offering where the number of equity securities to be 
allotted to holders of ordinary shares of the Company on a fixed record date is 
proportionate (as nearly as may be) to the number of ordinary shares then held 
by such shareholders, subject to such exclusions or other arrangements as the 
Directors may deem necessary or expedient to deal with legal or practical 
problems under the laws of, or the requirements of, any regulatory or stock 
exchange authority in any jurisdiction or in relation to fractional 
entitlements; and 
 
(b)   otherwise than pursuant to sub-paragraph (a) above, up to a maximum number 
of 5 million shares having an aggregate nominal value of GBP500,000, 
 
provided that this power shall, unless it is (prior to its expiry) duly revoked 
or varied or renewed by the Company in general meeting, expire on the day 
falling 15 months after the date of the passing of this resolution or, if 
earlier, at the conclusion of the annual general meeting of the Company to be 
held in 2011, save that the Company may make an offer or agreement before the 
expiry of this power which would or might require equity securities to be 
allotted after such expiry and the Directors may allot equity securities 
pursuant to such an offer or agreement. 
 
 
By Order of the Board 
Peter Maurice Crystal 
Company Secretary 
 
28 April 2010 
 
Registered Office: 
The Broadgate Tower, 
20 Primrose Street, 
London EC2A 2RS 
 
 
Notice of Annual General Meeting 
 
NOTES 
In addition to the noted set out below explanation of certain of the resolutions 
is set out in Appendix 1. 
1.      A member entitled to attend and vote at the Meeting may appoint one or 
more proxies to attend and on a poll vote instead of him. A proxy need not be a 
member of the Company. 
 
2.      To be effective, the instrument appointing a proxy and any authority 
under which it is executed (or a notarially certified copy of such authority) 
must be deposited with the Company's registrars, Capita Registrars, not less 
than 48 hours before the time of the holding of the Meeting or any adjournment 
thereof. Completion and return of the form of proxy will not preclude 
shareholders from attending and voting in person at the meetings. 
 
3.      In accordance with Regulation 41 of the Uncertificated Securities 
Regulations 2001, only those members entered on the register of members of the 
Company as at 10.00 am on 20th June 2010 shall be entitled to attend or vote at 
the meeting in respect of the number of shares registered in their name at that 
time. Or if the meeting is adjourned, such time being not more than 48 hours 
prior to the time fixed for the adjourned meeting. Changes to entries on the 
register of members after 10.00 am on 20th June 2010 shall be disregarded in 
determining the rights of any person to attend or vote at the meeting. 
 
4.      The register of interests of directors and their families in the 
Company's shares and copies of all Directors' service contracts and copies of 
any letter of appointments, as appropriate as well as the Company's Articles of 
Association will be available for inspection at the registered office of the 
Company during usual business hours on any weekday (Saturdays, Sundays and 
public holidays excepted) from the date of this Notice until the conclusion of 
the Meeting and will be available for inspection at the place of the AGM and at 
least 15 minutes prior to and during the meeting. 
Appendix 1 - Explanation of certain resolutions 
Resolutions 4 and 5: Election of Directors 
Both Zhou Yuezhang and Peter Crystal, who retire by rotation in accordance with 
Article 80 of the Company's articles of association, being eligible to do so, 
have confirmed their intention to seek re-election by the shareholders at the 
meeting as an Executive Director and Non-Executive Director respectively. 
 
Resolution 6: Allotment of Shares 
Under Section 551 of the Companies Act 2006 (the "Act"), the Directors of the 
Company may only allot shares if authorised to do so. The articles of 
association give a general authority to allot shares, but that authority is 
subject to renewal by shareholders each year. This resolution proposes that the 
directors' authority be renewed, giving the power to allot shares up to an 
aggregate nominal value of GBP500,000, which is equal to approximately [21]% of 
the issued share capital of the Company as at the date of this Notice.  This 
authority shall expire (unless previously renewed or revoked by the Company in 
general meeting) on the day falling 15 months after the date of the passing of 
the resolution or, if earlier at the conclusion of the annual general meeting of 
the Company to be held in 2011. 
 
Resolution 7: Waiver of Pre-emption Rights 
In the case of a new allotment of shares or convertible securities for cash, 
Section 561 of the Act grants pre-emption rights to existing shareholders. 
However, the directors may be given the power under Sections 570 and 573 of the 
Act to disapply generally the provisions of Section 561, Accordingly, the 
Directors consider that it is in the best interests of the Company for the 
existing authority granted by shareholders at the 2009 annual general meeting of 
the Company to be renewed for a period expiring (unless previously renewed or 
revoked by the Company in general meeting) on the day falling 15 months after 
the date of the passing of the resolution or, if earlier at the conclusion of 
the annual general meeting of the Company to be held in 2011. 
 
Recommendation 
The Directors recommend that you vote in favour of all of these resolutions, as 
they intend to do in respect of their own shares. The Directors consider that 
the resolutions are in the best interests of the Company and its shareholders as 
a whole. 
Form of Proxy 
I/We (name in full)                           of 
                                being (a) shareholder/(s) of China Shoto plc 
hereby appoint the Chairman of the Meeting 
or 
                        as my/our proxy to vote for me/us on my/our behalf at 
the Annual General Meeting of the Company to be held at 8th Floor, 131 Finsbury 
Pavement, London, EC2A 1NT on 22nd June 2010 at 10am and at any adjournment of 
the Meeting. 
 
Please indicate with an 'X' in the space below how you wish your vote to be 
cast. In the absence of any specific direction, and on any other resolution or 
motion put to the Meeting, the proxy will, vote or abstain as the proxy thinks 
fit. 
 
 
+-----------------------------------------------+---------+---------+ 
|                  RESOLUTION                   |  FOR    |AGAINST  | 
+-----------------------------------------------+---------+---------+ 
| 1. To receive and adopt the Company's Annual  |         |         | 
| Report and Financial Statements for the       |         |         | 
| financial year ended 31 December 2009,        |         |         | 
| together with the Directors' Report and the   |         |         | 
| Auditors' Report on those Financial           |         |         | 
| Statements.                                   |         |         | 
+-----------------------------------------------+---------+---------+ 
| 2. To re-appoint BDO LLP as Auditors.         |         |         | 
+-----------------------------------------------+---------+---------+ 
| 3. To declare a full year dividend of 5 pence |         |         | 
| per ordinary share.                           |         |         | 
+-----------------------------------------------+---------+---------+ 
| 4. To reappoint Peter Maurice Crystal who     |         |         | 
| retires by rotation as a Non-Executive        |         |         | 
| Director.                                     |         |         | 
+-----------------------------------------------+---------+---------+ 
| 5. To reappoint Zhou Yuezhang who retires by  |         |         | 
| rotation as an Executive Director.            |         |         | 
+-----------------------------------------------+---------+---------+ 
| 6. To authorise the Directors to allot        |         |         | 
| relevant securities in the Company pursuant   |         |         | 
| to section 551 of the Companies Act 2006.     |         |         | 
+-----------------------------------------------+---------+---------+ 
| 7. To disapply the provisions of section 561  |         |         | 
| of the Companies Act 2006 in respect of the   |         |         | 
| allotment of equity securities in the         |         |         | 
| Company.                                      |         |         | 
+-----------------------------------------------+---------+---------+ 
 
Signature(s)                                                    Date 
  2010 
 
NOTES: 
1 To be valid, this Form of Proxy, duly completed, must be deposited with the 
Company's Registrars at, Capita Registras, The Registry, 34 Beckenham Road, 
Beckenham, Kent BR3 4TU, not less than 48 hours before the time appointed for 
the Meeting. 
 
2 In the case of joint holders, only one signature is required. 
 
3 In the case of a corporation, this Form of Proxy must be executed under its 
common seal or signed on its behalf by an officer or duly authorized agent. 
 
4 Any alteration made to this Form or Proxy must be initialed. 
 
5 Completion and return of a Form of Proxy will not preclude shareholders from 
attending and voting in person should they subsequently decide to do so. However 
the shareholder's proxy appointment will be terminated. 
 
6 Any shareholder entitled to attend and vote at the above Meeting may appoint 
one or more proxies of his/her own choice to attend and, on a poll, to vote 
instead of him/her. If a shareholder appoints more than one proxy, he/she shall 
specify the number of shares in respect of which each proxy is entitled to 
exercise the relevant votes and shall ensure that no proxy is appointed to 
exercise the votes which any other proxy has been appointed by that shareholder 
to exercise. A proxy need not be a shareholder of the Company. A shareholder 
completing a Form of Proxy will not thereby be precluded from attending in 
person instead of by proxy. However the shareholder's proxy appointment will be 
terminated. 
 
7. The appointment of a proxy shall be deemed to have the right to demand or 
join in demanding a poll but shall not confer any further right to speak at the 
meeting, except with the permission of the Chairman of the meeting. 
 
 
This information is provided by RNS 
            The company news service from the London Stock Exchange 
   END 
 
 FR LIFIRSVITFII 
 

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