RNS Number : 3918C
Guangdong Development Fund Ld
31 August 2008
GUANGDONG DEVELOPMENT FUND LIMITED
2008 INTERIM REPORT
INTERIM MANAGEMENT REPORT
The Board of Directors (the "Board") of Guangdong Development Fund Limited presents the unaudited interim condensed consolidated
financial statements of the Company and its subsidiaries (collectively the "Fund") for the six months ended 30 June 2008. The unaudited
profit attributable to shareholders for the current period was US$0.38 million, compared to US$2.43 million for the corresponding period in
2007. The decrease was primarily attributable to the fall in investment income of US$2.69 million from the financial assets at fair value
through profit or loss. As at 30 June 2008, total net asset value was US$12.40 million, or US$0.13 per ordinary share.
The Board does not recommend any payment of interim dividend.
Economic Environment
China's gross domestic product ("GDP") grew 10.4% to 13.06 trillion yuan (1.9 trillion U.S. dollars) in the first half over the same
period last year. The growth rate was 1.8 percentage points lower than the first half of last year, and 0.2 percentage points lower than the
first quarter of this year. The double-digit GDP growth indicated the economy of China was still growing at a steady and relatively fast
pace. The cooling of GDP growth indicated the government's macro-economic policy to prevent the economy from overheating has paid off. Last
year, GDP grew 11.4 percent year-on-year with the risks of spiraling inflation and economic overheating rising. To cool the breakneck
growth, China fixed its GDP growth target at 8 percent for 2008. The slowing world economy and weaker demand on international markets also
adversely affected the economy. With on-going industrialisation and urbanisation, China's economy is set to remain robust and vigorous, as
the need to narrow regional disparities would continue providing opportunity for growth.
The continuous favourable economic environment of China and strengthening of Renminbi increased the value of the Fund's investments in
United States dollars. Updated progresses of the various investment projects since the beginning of this year are set out as follows:
Infrastructure Projects
The overall performance of Yuehui Highways and Bridges Development Company Limited (the "Huizhang Highway Project") for the interim
period was satisfactory. Its average daily traffic flow for the current period increased by 2% to 12,229. Turnover increased by 2% to
RMB19.36 million (approximately US$2.82 million) and profit before tax increased by 29% to RMB10.25 million (approximately US$1.49 million).
However, the opening of the Dongguan-Huizhou Expressway at the end of 2008 may cause diversion of traffic away from the Huizhang Highway
Project.
In August 2008, the Fund received the dividend of US$0.58 million (RMB4.0 million) from this project for year 2007, which had already
been recognised last year. During the interim period of last year, the Fund recognised the dividend income from the Huizhang Highway Project
for years 2002, 2003, 2005, 2006 and 2007 aggregating US$2.67 million. However, the Huizhang Highway Project has not yet declared an interim
dividend for 2008 and the dividend income for the interim period from this project fell substantially when compared with last period.
With reference to the independent valuation report of Vigers Appraisal & Consulting Limited ("Vigers") as at 30 June 2008, a fair value
loss of US$0.24 million was recorded in respect of this project for the current period.
Industrial Projects
During the period, the turnover and profit before tax of Foshan Tongbao Company Limited ("Tongbao") increased by 7% to RMB391.28 million
(approximately US$57.03 million) and 24% to RMB17.61 million (approximately US$2.57 million), respectively, when compared with the same
period last year. This was mainly attributable to the increase in market demand and the capture of market share as a result of the exit of
other competitors from the market.
In July 2008, the Fund received the dividend from Tongbao for year 2007 of US$0.44 million.
With reference to the independent valuation report of Vigers as at 30 June 2008, a fair value gain of US$0.18 million was recorded in
respect of this project for the current period.
Guangdong Zhanhai Instrument & Meter Co. Ltd. ("Zhanhai") still incurred a net loss in the first half of 2008. The Fund sought an
interested potential buyer to buy out all foreign parties' interests in Zhanhai. In order to obtain a higher price, the Fund is currently in
the process of arranging an auction sale of its interests in Zhanhai together with the other foreign party, which has obtained its internal
approval to dispose of its interest in this project. The Fund will closely liaise with the other foreign shareholder to try and ensure the
auction will proceed as soon as possible.
With reference to the independent valuation report of Vigers as at 30 June 2008, a fair value loss of US$0.059 million was recorded in
respect of this project for the current period.
Gaoyao Gaolu Cement Company Limited continued to operate at a loss. On 19 February 2008, the Intermediate People's Court of Zhaoqing,
Guangdong ruled that Gaoyao Gaolu Cement Company Limited transfer some of its buildings and production equipment to settle a debt of RMB24.8
million due to a creditor. The Fund had made full provision for this project in 1999.
On 20 May 2008, the Fund entered into a sale and purchase agreement with a buyer to dispose of all its equity interests in a subsidiary
which hold the interests in Xin Hui Xing Wei Building Material Co. Ltd at a consideration of HK$480,000 (approximately US$61,500). The
Fund has received 50% of the consideration, and is expected to receive the remaining balance in the fourth quarter of the current year.
Real Estate Project
For the period under review, the occupancy rate of shopping mall held by Guangdong Nan Fang (Holdings) Co. Ltd ("Nanfang") is 85%,
representing an increase by 13% when compared with last year. Rental income of the shopping mall for the first half of 2008 amounted to
US$0.37 million. However, after deduction of loan interest expenses and tax, Nanfang recorded a net loss of US$0.26 million for the interim
period.
Principal Risk and Uncertainty
The Fund has a number of financial assets denominated in Renminbi, which amounted to US$9.7 million as at 30 June 2008. The Renminbi has
been appreciating recently; however, if this trend reverses, the Fund's financial assets would be subject to exchange rate risk exposure.
In addition there remains a risk in relation to the convertibility of the Renminbi as set out in note 7 to the interim condensed
consolidated financial statements.
Change of Administrator
As mentioned in the 2007 Annual Report, on 23 November 2007, Dominion Fund Administrators Limited ("Dominion") tendered its resignation
as the Administrator of the Fund with effect from 23 May 2008. As requested by the Fund, Dominion extended its resignation date to 17 July
2008. On that date, Moore Management Limited was appointed as the Administrator of the Fund, which was duly approved by the Jersey Financial
Services Commission.
Management Fee
The Fund continued to pay management fee to GDF Management (Cayman) Limited ("GDFM") in accordance with the Management Agreement dated
29 May 2006. The Fund paid management fee to Springridge Company Limited ("Springridge") in accordance with the Investment Management
Agreement dated 29 May 2006, till 30 May 2008. In view of the significant appreciation of Renminbi against United States dollars, on 1 June
2008, the Fund entered into a Supplemental Investment Management Agreement with Springridge to increase its management fee, such that the
Fund shall pay to Springridge an annual management fee of RMB1.2 million (approximately US$175,000) with settlement in the United States
dollars. The management fee charged by GDFM and Springridge amounted to US$75,000 and US$77,036, respectively, for the six months ended 30
June 2008. The current management arrangements with GDFM and Springridge will expire on 30 November 2009.
Related Parties
Details of the related party transactions are set out in note 11 to the interim condensed consolidated financial statements.
Purchase, Sale or Redemption of Shares
During the six months ended 30 June 2008, neither the Fund nor any of its subsidiaries purchased, sold or redeemed any of the Fund's
listed shares.
Audit Committee
The role of the Audit Committee is to advise the Board of the Fund by providing independent and objective reviews of the Fund's
financial reporting procedure, internal control and audit function. The Audit Committee has reviewed this report and presented a report
thereon to the Board.
Corporate Governance
None of the directors of the Fund is aware of any evidence that would reasonably indicate that the Fund failed to comply with the
Combined Code of Principles of Good Governance of the London Stock Exchange at present or for any part of the six months ended 30 June
2008.
Outlook
The Board will continue to make the greatest effort to realise the Fund's investments at the best prices reasonably obtainable in order
to maximise returns to shareholders of the Fund.
Li Wai Keung
Chairman
29 August 2008
For further information, please contact:
Guangdong Development Fund Limited
Tel: (852) 2106 0888
Fax: (852) 2868 3082
DIRECTORS' RESPONSIBILITY STATEMENT
The Directors confirm that, to the best of their knowledge:
(a) the condensed set of financial statements has been prepared in accordance with IAS 34;
(b) the interim management report includes a fair review of the information required by Disclosure and Transparency Rule 4.2.7R
(indication of important events during the first six months and description of principal risks and uncertainties for the remaining six
months of the year); and
(c) the interim management report includes a fair review of the information required by Disclosure and Transparency Rule 4.2.8R
(disclosure of related party transactions and changes therein).
On behalf of the Board
Li Wai Keung
Chairman
29 August 2008
GUANGDONG DEVELOPMENT FUND LIMITED
INTERIM CONDENSED CONSOLIDATED INCOME STATEMENT
For six months ended 30 June 2008
For the six months ended For the six months ended
30 June 2008 30 June 2007
(unaudited) (unaudited)
Notes Revenue Capital Total Revenue Capital Total
US$'000 US$'000 US$'000 US$'000 US$'000 US$'000
(Restated) (Restated) (Restated)
Investment income 3 434.5 - 434.5 3,128.5 - 3,128.5
Loss on financial assets at
fair
value through profit or loss - (46.0) (46.0) - (712.6) (712.6)
Interest income from
bank deposits 58.2 - 58.2 187.4 - 187.4
------------ ------------ ------------ ------------ ------------ ------------
Gross profit/(loss) 492.7 (46.0) 446.7 3,315.9 (712.6) 2,603.3
Management fees 4 (152.0) - (152.0) (150.0) - (150.0)
Other administrative expenses (162.8) - (162.8) (230.0) - (230.0)
Foreign currency differences, 252.9 - 252.9 204.9 - 204.9
net
------------ ------------ ------------ ------------ ------------ ------------
Profit/(loss) for the period
attributable
to equity holders of the 430.8 (46.0) 384.8 3,140.8 (712.6) 2,428.2
parent
======= ======= ======= ======= ======= =======
Earnings per ordinary
share (US cents) 5 0.45 (0.05) 0.40 3.24 (0.73) 2.51
======= ======= ======= ======= ======= =======
The "Total" columns of this statement represent the Group's income statement, prepared in accordance with International Financial
Reporting Standards ("IFRS"). The revenue and capital columns are supplementary to this and are prepared under guidance published by the
Investment Management Association in the United Kingdom.
All items in the above statement are derived from continuing operations.
GUANGDONG DEVELOPMENT FUND LIMITED
INTERIM CONDENSED CONSOLIDATED BALANCE SHEET
At 30 June 2008
30 June 31 December
Notes 2008 2007
US$'000 US$'000
(Unaudited) (Restated)
ASSETS
Non-current assets
Financial assets at fair value through 5,062.6 5,182.4
profit or loss
Other receivable 7 3,598.8 3,358.5
------------ ------------
8,661.4 8,540.9
------------ ------------
Current assets
Due from investee entities 6 1,017.4 547.6
Prepayments, deposits and other receivables 7 178.2 189.6
Cash and cash equivalents 3,379.9 3,991.0
------------ ------------
4,575.5 4,728.2
------------ ------------
Total assets 13,236.9 13,269.1
------------ ------------
Current liabilities
Creditors and accrued liabilities 836.6 1,253.6
------------ ------------
Net assets 12,400.3 12,015.5
======= =======
EQUITY
Equity attributable to equity holders of the
parent
Issued capital 969.0 969.0
Share premium 4,977.2 4,977.2
Special distributable reserve 30,581.0 30,581.0
Capital reserve
- realised (8,434.6) (3,738.4)
- unrealised (29,143.1) (33,793.3)
Revenue reserve 13,450.8 13,020.0
------------ ------------
Total equity 12,400.3 12,015.5
======= =======
Net asset value per ordinary share (US$) 8 0.13 0.12
======= =======
GUANGDONG DEVELOPMENT FUND LIMITED
INTERIM CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
For six months ended 30 June 2008
Special Investment Capital Capital
Share Share distributable revaluation reserve reserve Revenue
Minority Total
Note capital premium reserve reserve -realised -unrealised reserve
Total interest equity
US$'000 US$'000 US$'000 US$'000 US$'000 US$'000 US$'000
US$'000 US$'000 US$'000
(Unaudited) (Unaudited) (Unaudited) (Unaudited) (Unaudited) (Unaudited) (Unaudited)
(Unaudited) (Unaudited) (Unaudited)
(Restated) (Restated) (Restated)
(Restated)
At 1 January 2008
As previously reported 969.0 4,977.2 30,581.0 740.6 (3,738.4) (34,533.9) 13,021.0
12,016.5 (1.0) 12,015.5
Prior year adjustments 12 - - - (740.6) 740.6 (1.0)
(1.0) 1.0 -
---------- ---------- ------------ ---------- ------------ -------------- ------------
------------ ------------ -----------
As restated 969.0 4,977.2 30,581.0 - (3,738.4) (33,793.3) 13,020.0
12,015.5 - 12,015.5
Capital reserve realised
on disposal of - (4,696.2) 4,696.2 -
-
financial assets at fair - - -
- -
value through profit
or loss
Profit/(loss) for the period - - - - - (46.0) 430.8
384.8 - 384.8
---------- ---------- ------------ ---------- ------------ -------------- ------------
------------ ------------ -----------
At 30 June 2008 969.0 4,977.2 30,581.0 - (8,434.6) (29,143.1) 13,450.8
12,400.3 - 12,400.3
====== ====== ======= ====== ======= ======== =======
======= ======= ======
At 1 January 2007
As previously reported 969.0 4,977.2 43,178.0 426.3 (1,932.2) (35,817.7) 9,617.8
21,418.4 (1.0) 21,417.4
Prior year adjustments 12 - - - (426.3) - 426.3 (1.0)
(1.0) 1.0 -
---------- ---------- ------------ ---------- ------------ -------------- ------------
------------ ------------ -----------
As restated 969.0 4,977.2 43,178.0 - (1,932.2) (35,391.4) 9,616.8
21,417.4 - 21,417.4
Profit/(loss) for the period - - - - - (712.6) 3,140.8
2,428.2 - 2,428.2
Dividend paid - - (5,814.0) - - - -
(5,814.0) - (5,814.0)
---------- ---------- ------------ ---------- ------------ -------------- ------------
------------ ------------ -----------
At 30 June 2007 969.0 4,977.2 37,364.0 - (1,932.2) (36,104.0) 12,757.6
18,031.6 - 18,031.6
====== ====== ======= ====== ======= ======== =======
======= ======= ======
GUANGDONG DEVELOPMENT FUND LIMITED
INTERIM CONDENSED CONSOLIDATED CASH FLOW STATEMENT
For six months ended 30 June 2008
For the six For the six
months ended months ended
30 June 2008 30 June 2007
US$'000 US$'000
(Unaudited) (Unaudited)
(Restated)
Operating activities
Profit for the period 384.8 2,428.2
Adjustments to reconcile profit for the period to
net cash flows
Loss on financial assets at fair value through 46.0 712.6
profit or loss
Interest income from bank deposits (58.2) (187.4)
Increase in prepayments, deposits and other (198.2) (905.1)
receivables
Increase in amounts due from related companies - (84.5)
Increase in amounts due from investee entities (469.8) (3,073.7)
Increase in amount due to an investee entity - 525.2
Decrease in creditors and accrued liabilities (404.7) (71.3)
------------ ------------
Net cash outflow from operating activities before (700.1) (656.0)
interest
Interest income from bank deposits 58.2 187.4
------------ ------------
Net cash outflow from operating activities (641.9) (468.6)
------------ ------------
Investing activity
Proceeds from disposal of a subsidiary 30.8 -
------------ ------------
Financing activity
Dividend paid - (5,814.0)
------------ ------------
Decrease in cash and cash equivalents (611.1) (6,282.6)
Cash and cash equivalents at beginning of period 3,991.0 8,350.1
------------ ------------
Cash and cash equivalents at end of period 3,379.9 2,067.5
======= =======
NOTES TO THE INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
1. Corporate information
The interim condensed consolidated financial statements of the Group for the six months ended 30 June 2008 were authorised for issue
in accordance with a resolution of the directors on 29 August 2008.
The Company was incorporated with limited liability in Jersey under the Companies (Jersey) Law 1991 whose shares are publicly traded.
These interim condensed consolidated financial statements were neither audited nor reviewed by independent auditors.
2. Basis of preparation and accounting policies
These interim condensed consolidated financial statements for the six months ended 30 June 2008 have been prepared using the
accounting policies expected to be used in the Group's annual consolidated financial statements for the year ending 31 December 2008. These
accounting policies will be based on International Financial Reporting Standards ("IFRS").
The interim condensed consolidated financial statements have also been prepared in accordance with the Disclosure and Transparency
Rules ("DTR") of the Financial Services Authority and with International Accounting Standard ("IAS") 34 Interim Financial Reporting.
These interim condensed consolidated financial statements have been prepared on the historical cost basis, except for the
revaluation of certain financial instruments. Where presentation guidance set out in the Statement of Recommended Practice ("SORP")
"Financial Statements of Authorised Funds" issued in December 2005 by the Investment Management Association in the United Kingdom is
consistent with the requirements of IFRS, the directors have sought to prepare the financial statements on a basis compliant with the
recommendations of the SORP.
The IFRS accounting policies have been applied retrospectively to the opening balance sheet as at 1 January 2007 and all subsequent
periods. The summary of changes in accounting policies and the disclosures required by IFRS 1 First-time Adoption of International Financial
Reporting Standards ("IFRS 1") concerning the transition to IFRS are given in note 12 to the interim condensed consolidated financial
statements.
.
3. Investment income
The investment income earned from the Group's unlisted investments classified as financial assets at fair value through profit or
loss for the period is as follows:
Six months Six months
ended ended
30 June 30 June
2008 2007
US$'000 US$'000
(Unaudited) (Unaudited)
Foshan Tongbao Co., Ltd. ("Tongbao") 434.5 393.4
Pak Kong Transco Limited - 63.9
Yuehui Highways and Bridges Development
Company Limited ("Yuehui") - 2,667.2
Other investments - 4.0
---------- ----------
434.5 3,128.5
====== ======
4. Management fees
The management fees are paid or payable to GDF Management (Cayman) Limited ("GDFM") and Springridge Company Limited ("Springridge")
at an annual fixed amount of US$150,000 each prior to 1 June 2008. Pursuant to a revised management agreement dated 1 June 2008, the annual
management fee payable to Springridge is revised to RMB1.2 million (approximately US$175,000) with settlement in the United States dollars
commencing from 1 June 2008.
GDFM is a related party to the Group because a director of the Company holds an indirect interest in GDFM. The total management fee
charged by GDFM for the period amounted to US$75,000 (2007: US$75,000).
5. Earnings per ordinary share
The earnings per ordinary share is based on the profit for the period attributable to equity holders of the parent of US$384,800
(six months ended 30 June 2007: US$2,428,200) and on 96,900,000 (six months ended 30 June 2007: 96,900,000) ordinary shares, being the
weighted average number of ordinary shares in issue during the period.
The earnings per ordinary share detailed above is further analysed between revenue and capital. Revenue earnings per ordinary
shares is based on the revenue profit for the period attributable to equity holders of the parent of US$430,800 (six months ended 30 June
2007: US$3,140,800) and on 96,900,000 (six months ended 30 June 2007: 96,900,000) ordinary shares, being the weighted average number of
ordinary shares in issue during the period.
Capital loss per ordinary share is based on capital loss for the period attributable to equity holders of the parent of
US$46,000 (six months ended 30 June 2007: US$712,600) and on 96,900,000 (six months ended 30 June 2007: 96,900,000) ordinary shares, being
the weighted average number of ordinary shares in issue during the period.
No diluted earnings per ordinary share have been shown as no diluting events existed during the period or the prior period.
6. Due from investee entities
This represents the investment income receivables from the following investee entities:
30 June 31 December
2008 2007
US$'000 US$'000
(Unaudited) (Audited)
Tongbao 434.5 -
Yuehui 582.9 547.6
---------- ---------
1,017.4 547.6
====== =====
Subsequent to the balance sheet date, the Group duly received the investment income receivables from Tongbao and Yuehui in United
States dollars in July and August 2008, respectively.
7. Prepayments, deposits and other receivables
30 June 31 December
2008 2007
US$'000 US$'000
(Unaudited) (Audited)
Non- current assets:
Other receivable* 3,598.8 3,358.5
Current assets:
Prepayments, deposits and other receivables 178.2 189.6
---------- ----------
3,777.0 3,548.1
====== ======
* This represents a receivable from an authorised financial institution (the "Trustee") registered in the People's Republic
of China (the "PRC") who, in turn, deposited the amount in a trust bank account jointly operated by the Trustee and the Group. The amount
maintained in this trust bank account is denominated in Renminbi, which is not freely convertible into foreign currencies under the existing
PRC foreign exchange regulations. The Group is currently exploring ways to have this amount remitted to the Group in United States dollars.
In the opinion of the directors, this amount may not be realised and distributed to the shareholders in United States dollars within the
next twelve months from the balance sheet date and, accordingly, the receivable is classified as a non-current asset.
8. Net asset value per ordinary share
The Group's net asset value per ordinary share of US$0.13 (31 December 2007: US$0.12) is based on the net assets attributable to the
equity holders of the parent of US$12,400,300 (31 December 2007: US$12,015,500) and on 96,900,000 (2007: 96,900,000) ordinary shares in
issue at the period end.
9. Disposal of a subsidiary
During the period, the Group entered into a sale and purchase agreement with a buyer to dispose of all its equity interests in a
subsidiary which hold the interests in Xin Hui Xing Wei Building Material Co. Ltd, a financial asset at fair value through profit or loss,
at a consideration of HK$480,000 (approximately US$61,500). The Fund has received 50% of the consideration, and is expected to receive the
remaining balance in the fourth quarter of the current year.
10. Segment information
An analysis of the Group's revenue and loss and net assets by principal activity and geographical area of operations for the six
months ended 30 June 2008 is as follows:
Mainland PRC Hong Kong Total
Six months Six months Six months Six months Six months Six months
ended ended ended ended ended ended
30 June 30 June 30 June 30 June 30 June 30 June
2008 2007 2008 2007 2008 2007
US$'000 US$'000 US$'000 US$'000 US$'000 US$'000
(Unaudited) (Unaudited) (Unaudited) (Unaudited) (Unaudited) (Unaudited)
(Restated) (Restated)
Revenue:
Investment income 434.5 3,124.5 - 4.0 434.5 3,128.5
Interest income 37.8 55.6 20.4 131.8 58.2 187.4
------------- ------------- ------------- ------------- ------------- -------------
472.3 3,180.1 20.4 135.8 492.7 3,315.9
Loss on financial assets
at fair value through
profit or loss (46.0) (712.6) - - (46.0) (712.6)
------------- ------------- ------------- ------------- ------------- -------------
426.3 2,467.5 20.4 135.8 446.7 2,603.3
Expenses:
Management fees (152.0) (150.0)
Other administrative (162.8) (230.0)
expenses
Foreign currency 252.9 204.9
differences, net ------------- -------------
Profit attributable to equity
holders of the parent 384.8 2,428.2
======== ========
Mainland PRC Hong Kong Total
30 June 31 December 30 June 31 December 30 June 31 December
2008 2007 2008 2007 2008 2007
US$'000 US$'000 US$'000 US$'000 US$'000 US$'000
(Unaudited) (Restated) (Unaudited) (Audited) (Unaudited) (Restated)
Financial assets at fair
value through profit
or loss 5,062.6 5,182.4 - - 5,062.6 5,182.4
Other receivable 3,598.8 3,358.5 - - 3,598.8 3,358.5
Due from investee
entities 1,017.4 547.6 - - 1,017.4 547.6
Cash and cash equivalents - - 3,379.9 3,991.0 3,379.9 3,991.0
------------ ------------ ----------- ----------- ------------ ------------
9,678.8 9,088.5 3,379.9 3,991.0 13,058.7 13,079.5
Unallocated assets 178.2 189.6
------------ ------------
Total assets 13,236.9 13,269.1
======= =======
Unallocated and total
liabilities 836.6 1,253.6
======= =======
11. Related party transactions
Details of related party transactions are set out in notes 4 and 6 to the interim condensed consolidated financial statements.
12. First-time adoption of IFRS
As described in note 2, these interim condensed consolidated financial statements have been prepared for the first time using IFRS.
This is different from the basis of preparation and accounting policies adopted in the 2007 Annual Report which was prepared in accordance
with United Kingdom Accounting Standards. In preparing these interim condensed consolidated financial statements in accordance with IFRS 1,
the Group has elected to apply the exemption in relation to the designation of a financial asset and designated previously recognised
financial assets from available-for-sale investments to financial assets at fair value through profit or loss.
(a) As a result of the first time adoption of IFRS, the key change in the previously adopted accounting policies, as set out in the
2007 Annual Report, is the replacement of the accounting policy for available-for-sale investments with the accounting policy for financial
assets at fair value through profit or loss. The new accounting policy is as follow:
Financial assets at fair value through profit or loss
All investments are designated upon initial recognition as held at fair value through profit or loss. Assets are de-recognised at the
trade date of the disposal. Proceeds will be measured at fair value, which will be regarded as the proceeds of sale less any transaction
costs. The fair value of the financial instruments is based on their quoted bid price at the balance sheet date, without deduction of the
estimated future selling costs. Unlisted investments are valued using valuation techniques. Such techniques include using recent arm's
length market transactions; reference to the current market value of another instrument, which is substantially the same; a discounted cash
flow analysis or other valuation models. Where fair value cannot reliably be measured the investment will be carried at the previous
reporting date value unless there is evidence that the investment has since been impaired, in which case the value will be reduced.
Changes in fair value of financial assets at fair value through profit or loss and gains and losses on disposal are recognised in the
Income Statement as "Gain or loss on financial assets at fair value through profit or loss". Also included within this caption are
transaction costs in relation to the purchase or sale of investments, including the difference between the purchase price of an investment
and its bid price at the date of purchase.
All purchases and sales of financial assets that require delivery within the timeframe established by regulation or market convention
("regular way" purchases and sales) are recognised at trade date.
(b) Restatement of balances as at 31 December 2006
As at 1 January 2007, the Group adopted IFRS. In accordance with IFRS 1 the following is a reconciliation of the results as at 31
December 2006, previously reported under United Kingdom Accounting Standards, to the restated IFRS results.
Previously reported Effect of transition Restated 31 December
31 December 2006 to IFRS 2006
Notes US$'000 US$'000 US$'000
Available-for-sale
investments 1 5,915.8 (5,915.8) -
Financial assets at fair value
through profit or loss 1 - 5,915.8 5,915.8
Other receivable 2,602.6 2,602.6
Due from related companies 3,490.2 3,490.2
Due from investee entities 512.2 512.2
Prepayments, deposits and
other receivables 1,428.7 1,428.7
Time deposits 2 1,025.2 (1,025.2) -
Cash and bank balances 2 7,324.9 (7,324.9) -
Cash and cash equivalents 2 - 8,350.1 8,350.1
Other payables and
accrued liabilities (882.2) (882.2)
------------ ------------ ------------
Net assets 21,417.4 - 21,417.4
======= ======= =======
Issued capital 969.0 969.0
Share premium 4,977.2 4,977.2
Special distributable
reserve 43,178.0 43,178.0
Investment revaluation
reserve 3 426.3 (426.3) -
Capital reserve - realised (1,932.2) (1,932.2)
Capital reserve - unrealised 3 (35,817.7) 426.3 (35,391.4)
Revenue reserve 4 9,617.8 (1.0) 9,616.8
------------ ------------ ------------
21,418.4 (1.0) 21,417.4
Minority interest 4 (1.0) 1.0 -
------------ ------------ ------------
Total equity 21,417.4 - 21,417.4
======= ======= =======
1. Investments previously recorded as available-for-sale investments have been redesignated as financial assets at fair value through
profit or loss.
2. Time deposits and cash and bank balances have been reclassified as cash and cash equivalents.
3. The investment revaluation reserve has been transferred to the capital reserve - unrealised due to the investments
redesignated.
4. Losses on minority interest previously recognised under UK Accounting Standards are not recognised under IFRS.
(c) Restatement as at and for the period ended 30 June 2007
As at 1 January 2007, the Group adopted IFRS. In accordance with IFRS 1 the following is a reconciliation of the results as at and for
the period ended 30 June 2007, previously reported under United Kingdom Accounting Standards, to the restated IFRS results.
(i) Balance Sheet Previously reported Effect of transition Restated 30 June 2007
30 June 2007 to IFRS
Notes US$'000 US$'000 US$'000
Available-for-sale
investments 1 5,203.2 (5,203.2) -
Financial assets at
fair value
through profit or 1 - 5,203.2 5,203.2
loss
Other receivable 3,297.8 3,297.8
Due from related 3,574.7 3,574.7
companies
Due from investee 3,585.9 3,585.9
entities
Prepayments,
deposits and
other receivables 1,638.6 1,638.6
Time deposits 2 1,039.9 (1,039.9) -
Cash and bank 2 1,027.6 (1,027.6) -
balances
Cash and cash 2 - 2,067.5 2,067.5
equivalents
Other payables and
accrued (1,336.1) (1,336.1)
liabilities
------------ ------------ ------------
Net assets 18,031.6 - 18,031.6
======= ======= =======
Issued capital 969.0 969.0
Share premium 4,977.2 4,977.2
Special
distributable
reserve 37,364.0 37,364.0
Investment
revaluation
reserve 3 505.3 (505.3) -
Capital reserve - (1,932.2) (1,932.2)
realised
Capital reserve -
unrealised 3 (36,609.3) 505.3 (36,104.0)
Revenue reserve 4 12,758.6 (1.0) 12,757.6
------------ ------------ ------------
18,032.6 (1.0) 18,031.6
Minority interest 4 (1.0) 1.0 -
------------ ------------ ------------
Total equity 18,031.6 - 18,031.6
======= ======= =======
1. Investments previously recorded as available-for-sale investments have been redesignated as financial assets at fair value
through profit or loss.
2. Time deposits and cash and bank balances have been reclassified as cash and cash equivalents.
3. The investment revaluation reserve has been transferred to the capital reserve - unrealised due to the investments
redesignated.
4. Losses on minority interest previously recognised under UK Accounting Standards are not recognised under IFRS.
Under IFRS the Income Statement is the equivalent of the Statement of Total Return as reported previously.
(ii) Income Statement Previously reported Effect of transition Restated 30 June 2007
30 June 2007 to IFRS
Notes US$'000 US$'000 US$'000
Investment income 3,128.5 3,128.5
Impairment loss of
available-for-sale
investments 1 (791.6) 791.6 -
Loss on financial
assets
at fair value
through
profit or loss 2 - (712.6) (712.6)
Interest income from 187.4 187.4
bank deposits
Management fees (150.0) (150.0)
Other administrative
expenses (230.0) (230.0)
Foreign currency
differences, net 204.9 204.9
------------ ------------ ------------
2,349.2 79.0 2,428.2
======= ======= =======
1. Impairment losses on available-for-sale investments reversed due to redesignation of investments to financial assets at fair
value through profit or loss.
2. Fair value adjustment previously reflected in equity now reflected in the Income Statement due to redesignation of investments
to financial assets at fair value through profit or loss.
(iii) Cash Flow Statement Previously reported Effect of transition Restated 30 June 2007
30 June 2007 to IFRS
Notes US$'000 US$'000 US$'000
Operating activities (468.6) (468.6)
Equity dividend paid 1 (5,814.0) 5,814.0 -
Management of liquid
resources 2 (14.7) 14.7 -
Financing activity 1 - (5,814.0) (5,814.0)
------------ ------------ ------------
Decrease in cash (6,297.3) 14.7 (6,282.6)
Opening cash 2 7,324.9 1,025.2 8,350.1
balances
------------ ------------ ------------
Decrease in cash 1,027.6 1,039.9 2,067.5
======= ======= =======
1. Equity dividend paid is now included within financing activity.
2. Time deposits have been reclassified as cash and cash equivalents.
(d) Restatement as at and for the year ended 31 December 2007
As at 1 January 2007, the Group adopted IFRS. In accordance with IFRS 1 the following is a reconciliation of the results as at and for
the year ended 31 December 2007, previously reported under United Kingdom Accounting Standards, to the restated IFRS results.
(i) Balance Sheet Previously reported Effect of transition Restated 31 December 2007
31 December 2007 to IFRS
Notes US$'000 US$'000 US$'000
Available-for-sale
investments 1 5,182.4 (5,182.4) -
Financial assets at
fair
value through
profit or loss 1 - 5,182.4 5,182.4
Other receivable 3,358.5 3,358.5
Due from investee 547.6 547.6
entities
Prepayments,
deposits and
other receivables 189.6 189.6
Time deposits 2 2,559.3 (2,559.3) -
Cash and bank 2 1,431.7 (1,431.7) -
balances
Cash and cash 2 - 3,991.0 3,991.0
equivalents
Other payables and
accrued (1,253.6) (1,253.6)
liabilities
------------ ------------ ------------
Net assets 12,015.5 - 12,015.5
======= ======= =======
Issued capital 969.0 969.0
Share premium 4,977.2 4,977.2
Special
distributable
reserve 30,581.0 30,581.0
Investment
revaluation
reserve 3 740.6 (740.6) -
Capital reserve - (3,738.4) (3,738.4)
realised
Capital reserve -
unrealised 3 (34,533.9) 740.6 (33,793.3)
Revenue reserve 4 13,021.0 (1.0) 13,020.0
------------ ------------ ------------
12,016.5 (1.0) 12,015.5
Minority interest 4 (1.0) 1.0 -
------------ ------------ ------------
Total equity 12,015.5 - 12,015.5
======= ======= =======
1. Investments previously recorded as available-for-sale investments have been redesignated as financial assets at fair value
through profit or loss.
2. Time deposits and cash and bank balances have been reclassified as cash and cash equivalents.
3. The investment revaluation reserve has been transferred to the capital reserve - unrealised due to the investments
redesignated.
4. Losses on minority interest previously recognised under UK Accounting Standards are not recognised under IFRS.
Under IFRS the Income Statement is the equivalent of the Statement of Total Return as reported previously.
(ii) Income Statement Previously reported Effect of transition Restated for the
for the year ended to IFRS year ended 31
31 December 2007 December 2007
Notes US$'000 US$'000 US$'000
Investment income 3,418.7 3,418.7
Impairment loss of
available-for-sale
investments 1 (791.6) 791.6 -
Net realised gain on
disposal of
available-
for-sale 2 269.1 (269.1) -
investments
Loss on financial
assets
at fair value
through
profit or loss 2 - (208.1) (208.1)
Interest income 315.7 315.7
Management fees (300.0) (300.0)
Other administrative
expenses (411.0) (411.0)
Foreign currency
differences, net 379.8 379.8
------------ ------------ ------------
2,880.7 314.4 3,195.1
======= ======= =======
1. Impairment losses on available-for-sale investments reversed due to redesignation of investments to financial assets at fair
value through profit or loss.
2. Fair value adjustment previously reflected in equity now reflected in the Income Statement due to redesignation of investments
to financial assets at fair value through profit or loss.
(iii) Cash Flow Statement Previously reported Effect of transition Restated for the
for the year ended to IFRS year ended 31
31 December 2007 December 2007
Notes US$'000 US$'000 US$'000
Operating activities 7,712.6 7,712.6
Acquisitions and
disposals 1 525.3 (525.3) -
Equity dividend paid 2 (12,597.0) 12,597.0 -
Management of liquid
resources 3 (1,534.1) 1,534.1 -
Investing activity 1 - 525.3 525.3
Financing activity 2 - (12,597.0) (12,597.0)
------------ ------------ ------------
Decrease in cash (5,893.2) 1,534.1 (4,359.1)
Opening cash 3 7,324.9 1,025.2 8,350.1
balances
------------ ------------ ------------
Decrease in cash 1,431.7 2,559.3 3,991.0
======= ======= =======
1. Proceeds from disposal of available-for-sale investments now included within investing activity.
2. Equity dividend paid is now included within financing activity.
3. Time deposits have been reclassified as cash and cash equivalents.
SUPPLEMENTARY INFORMATION
CONSOLIDATED PORTFOLIO STATEMENT
As at 30 June 2008
Percentage
Effective Carrying of total
holding value net assets
% US$'000 %
FOSHAN TONGBAO CO., LTD. 29.9 1,427.0 11.5%
Production and sale of thermostats and
other temperature control devices
GUANGDONG ZHANHAI INSTRUMENT & METER CO. 36.0 21.2 0.2%
LTD.
Production and sale of flow meters
GAOYAO GAOLU CEMENT COMPANY LIMITED 30.6 - -
Production and sale of cement
GUANGDONG NAN FANG (HOLDINGS) CO. LTD 43.7 - -
Property holding
YUEHUI HIGHWAYS AND BRIDGES DEVELOPMENT 20.0 3,614.4 29.1%
COMPANY LIMITED
Operation of a section of Provincial
Highway No.1918, 1919
----------- ----------
Portfolio of investments 5,062.6 40.8%
Long term other receivable 3,598.8 29.0%
Net current assets 3,738.9 30.2%
----------- ----------
Net assets 12,400.3 100.0
======= ======
Except for the disposal of the Group's investment in Xin Hui Xing Wei Building Material Co. Ltd., there was neither acquisition nor
disposal of the Group's investment portfolio during the period.
This information is provided by RNS
The company news service from the London Stock Exchange
END
IR ILFISTTILVIT
Guangdong Development Fund (LSE:GDF)
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Guangdong Development Fund (LSE:GDF)
過去 株価チャート
から 11 2023 まで 11 2024
