TIDMACHL
RNS Number : 6578Y
Asian Citrus Holdings Ltd
26 February 2013
Hong Kong Exchanges and Clearing Limited and The Stock Exchange
of Hong Kong Limited take no responsibility for the contents of
this announcement, make no representation as to its accuracy or
completeness and expressly disclaim any liability whatsoever for
any loss howsoever arising from or in reliance upon the whole or
any part of the contents of this announcement.
ASIAN CITRUS HOLDINGS LIMITED
*
(Incorporated in Bermuda with limited liability)
(Stock Code: HKSE: 73; AIM:ACHL)
ANNOUNCEMENT of the interim resultS
for the six months ended 31 December 2012
The board of directors (the "Board") of Asian Citrus Holdings
Limited (the "Company" or "Asian Citrus") is pleased to announce
the unaudited consolidated results of the Company and its
subsidiaries (collectively, the "Group") for the six months ended
31 December 2012.
Key Highlights
For illustration
only
--------------------- ------------ ------------ ---------- ------------------------
Six months ended Six months ended
31 December 31 December
--------------------- -------------------------- ---------- ------------------------
2012 (RMBm) 2011 (RMBm) 2012 2011
(restated) % change (GBPm**) (GBPm**)
(restated)
--------------------- ------------ ------------ ---------- ---------- ------------
Reported financial information
------------------------------------------------- ---------- ---------- ------------
Revenue 892.0 1,043.4 -14.5% 88.8 101.8
--------------------- ------------ ------------ ---------- ---------- ------------
Gross profit 289.5 406.3 -28.7% 28.8 39.6
--------------------- ------------ ------------ ---------- ---------- ------------
EBITDA 272.0 478.0 -43.1% 27.1 46.6
--------------------- ------------ ------------ ---------- ---------- ------------
Profit before
tax 218.1 405.5 -46.2% 21.7 39.6
--------------------- ------------ ------------ ---------- ---------- ------------
Profit attributable
to shareholders 212.4 397.5 -46.6% 21.1 38.8
--------------------- ------------ ------------ ---------- ---------- ------------
Basic EPS RMB 0.17 RMB 0.33 -48.5% 1.7p 3.2p
--------------------- ------------ ------------ ---------- ---------- ------------
Interim dividend RMB 0.03 RMB 0.03 - 0.3p 0.3p
--------------------- ------------ ------------ ---------- ---------- ------------
Special dividend RMB 0.02 RMB 0.02 - 0.2p 0.2p
--------------------- ------------ ------------ ---------- ---------- ------------
Total dividend RMB 0.05 RMB 0.05 - 0.5p 0.5p
--------------------- ------------ ------------ ---------- ---------- ------------
Core net profit #
---------------------------------------------------------------------------------------
EBITDA 309.1 403.2 -23.3% 30.8 39.3
--------------------- ------------ ------------ ---------- ---------- ------------
Profit before
tax 255.1 330.7 -22.9% 25.4 32.3
--------------------- ------------ ------------ ---------- ---------- ------------
Profit attributable
to shareholders 249.5 322.7 -22.7% 24.8 31.5
--------------------- ------------ ------------ ---------- ---------- ------------
Basic EPS RMB 0.20 RMB 0.27 -25.9% 2.0p 2.6p
--------------------- ------------ ------------ ---------- ---------- ------------
# Core net profits refers to profit for the period excluding net
gain/loss on change in fair value of biological assets and
share-based payment.
** Conversion at GBP1 = RMB10.05 and RMB10.25 for the six months
ended 31December 2012 and 2011 respectively for reference only
*For identification purposes only
Key Highlights
-- Total production 161,233 tonnes down 6.0% from 171,607 tonnes
in 2011/2012, primarily reflecting the planned replanting programme
to increase yields
-- Revenue down 14.5% to RMB892.0m (12/2011:RMB1,043.4m)
-- Core net profits down 22.7% to RMB249.5m (12/2011:RMB322.7m)
reflecting higher direct production costs as a results of unstable
weather conditions in 2012 and general wage inflation in the
PRC
-- Strong free cash flow of RMB144.9 million (12/2011: RMB219.3
million) and cash and cash equivalent of RMB2,374.4 million as at
31 December 2012
-- Declared an interim dividend of RMB0.03 (12/2011: RMB0.03) and a special dividend of RMB0.02 (12/2011:RMB0.02) per share
-- Substantially completed the construction of the new
production facility of Beihai Perfuming Juice Company Limited
("Beihai BPG") in Baise city of the Guangxi Region with an annual
capacity of approximately 40,000 tonnes; the formal production will
be started by April 2013
-- Continued the construction of third plantation at Hunan.
129,000 summer orange trees planted during the current period and
another 600,000 summer orange trees to be planted before December
2013
-- Production volume at the Xinfeng Plantation up 1.3% to
128,395 tonnes. Further volume increase expected as trees approach
maturity
-- Second half performance anticipated to benefit from increased
orange and juice concentrate prices and reduced cost impact from
expected normal weather conditions in 2013
-- The Group is well placed for the longer term to deliver improved results
Tony Tong, Chairman, commented:
"Our performance during the six month period was disappointing,
primarily due to the higher costs incurred as a result of unstable
weather in 2012 and general wage inflation in the PRC.
The Group's second half performance will reflect the price
achieved for the Group's summer orange crop, the selling price of
pineapple juice concentrates and the impact of weather on the
volume of fertilisers and pesticides used by the Group. In this
respect we expect that orange prices will rise, albeit slightly,
responding to the inflationary environment and the forecasts for
China's economy, which the World Bank has predicted will expand by
8.4% in 2013 and we are also optimistic that juice prices will
continue to increase throughout the balance of the year. While we
cannot predict the weather, a repeat of the unhelpful conditions in
2012 would be both highly unusual and unexpected.
For the longer term, we are well positioned to deliver much
improved results."
For further enquiries please contact
Asian Citrus
Eric Sung, Finance Director +852 2559 0323
Seymour Pierce (NOMAD and Joint Broker)
Rick Thompson/Tom Sheldon +44 (0) 20 7107 8000
Richard Redmayne, Jacqui Briscoe
(Broking)
Liberum Capital Limited (Joint Broker)
Clayton Bush, Richard Bootle +44 (0) 20 3100 2222
Weber Shandwick Financial
Nick Oborne, Stephanie Badjonat,
John Moriarty +44 (0) 20 7067 0700
Chairman's Statement
In my Chairman's Statement of last year's annual report, I
indicated that our prospects for the remainder of calendar 2012
would continue to be challenging. As expected, our financial
results for the period ended 31 December 2012 were indeed
disappointing.
I am confident, however, that this is a temporary setback. Our
fundamentals remain strong, our oranges continue to be well
received by customers, and our plans for a third juice processing
plant in Guangxi and a third plantation in Hunan are still on track
to commence operation in 2013 and 2014 respectively.
Financial Highlights
For the six-month period ended 31 December 2012, the Group's
total revenues decreased by 14.5% to RMB892.0 million from
RMB1,043.4 million during the same period last year. Core net
profit during the period, before net gains on change in fair value
of biological assets and share based payments, fell by 22.7% to
RMB249.5 million from RMB322.7 million, primarily reflecting higher
direct production costs, which were partially offset by a slight
increase in the market price of winter oranges.
The Group recorded a loss of RMB23.0 million from a net loss on
change in fair value of biological assets for the six months ended
31 December 2012, compared with a gain of RMB100.6 million for the
last six months of 2011. The Board of Directors would like to
emphasise that the loss on change in fair value of biological
assets does not reflect the quality of our biological assets and
has no any effect on the cash flow of the Group for the six months
ended 31 December 2012.
After net change in fair value of biological assets and share
based payments, net profit was 46.6% lower at RMB212.4 million
against RMB397.5 million for the corresponding period last
year.
Operations Review
Plantation Business
Our two operating plantations - Hepu Plantation in Guangxi
Zhuang Autonomous Region and Xinfeng Plantation in Jiangxi Province
- experienced a decrease in total production volume of
approximately 6.0% to 161,233 tonnes during the review period.
Turnover from the sale of oranges also decreased, by 6.8% to
RMB600.2 million.
The decline in production volume was most pronounced at Hepu
Plantation where as expected production dropped by 26.9% to 32,838
tonnes for the six months ended 31 December 2012 as compared with
44,906 tonnes for the same period in the previous year. This was
due to the on-going replanting programme with the removal and
replacement of 66,449 winter orange trees with the same number of
summer orange trees in the last year. There are currently
approximately 48,000 winter trees at the Hepu Plantation which are
due to be replaced by June 2013. By that time, the replanting
programme which started in 2007 will be completed. The first and
second batch of 55,185 and 76,135 orange trees replanted in 2007
and 2008 respectively have begun to produce oranges already. The
third batch of 81,261 orange trees replanted in 2009 is expected to
commence its first crop in the summer of 2013. We expect the later
batches of replanted trees to commence their production in the
coming few years. As a result, the Hepu Plantation will soon be
producing increasing tonnage of summer oranges benefiting from both
the commencement of production from the replanting programme and
increasing maturity of the replanted summer orange trees.
The drop in production volume at the Hepu Plantation was offset
slightly by the rise in production volume of winter oranges at the
Xinfeng Plantation, where the orange trees continue to mature.
During the review period, the Xinfeng Plantation recorded an
increase in production volume of 1.3% to approximately 128,395
tonnes from 126,702 tonnes. Given that the 1.2 million winter
orange trees in Xinfeng Plantation have not reached full maturity,
we anticipate that the production volume from the Xinfeng
Plantation will further increase as these trees approach their full
yield potential.
The gross margin from the sales of oranges was 35.1% at the end
of December 2012, down from 44.8% at the end of December 2011, as a
result of the higher unit cost of production at both the Hepu and
Xinfeng plantations. The unit cost of production was RMB2.31 per
kilogramme at the Hepu Plantation and RMB2.44 per kilogramme at the
Xinfeng Plantation for the six months ended 31 December 2012, as
compared with RMB1.76 per kilogramme and RMB2.18 per kilogramme for
the same period last year.
There were a number of factors contributing to the higher
production costs, most notably the unstable weather and persistent
heavy rainfall from April to August in 2012. During periods of
heavy rain, fertilisers and pesticides - the two main costs
associated with orange production - are washed away and must
therefore be applied in greater quantities to ensure healthy
growth.
Another major factor was the trend of general wage inflation in
China. At both plantations, labour costs rose from RMB32.5 million
to RMB41.9 million for the review period, a rise of 28.9%.
Development of our third plantation in Hunan province, which was
developed in 2007, continued with the planting of more than 129,000
summer orange trees during the period. A total of nearly 1.2
million trees have now been planted at this new location and a
further 600,000 summer orange trees will be planted in 2013. It is
expected that the first harvest from this plantation will take
place in 2014.
Juice processing business
Turnover from the sale of processed fruit by Beihai Perfuming
Garden Juice Company Limited decreased by 26.9% to RMB290.2 million
for the six months ended 31 December 2012. This decline was due
mainly to the lower average selling price of pineapple juice
concentrates, the Group's main juice product. Also, the unstable
weather and persistent heavy rainfall in 2012 limited the supply of
several types of fruit for juice processing during the period.
As highlighted in our last annual report, the price of pineapple
juice concentrate started to decrease in January 2012 driven by
destocking among producers in Thailand and the Philippines, the
world's two largest producers of pineapple concentrate. As I
predicted then, the destocking ended in August and prices began to
rise slightly from September 2012. While the overall average
selling price for 2012 was therefore lower than the corresponding
period in 2011, we have seen the price recovery continue into
2013.
I also mentioned in our annual report that we were building a
third plant in Baise City, Guangxi, to increase our total annual
output capacity by approximately 40,000 tonnes. This facility has
now been substantially completed, and trial production began in
December 2012 as expected. We are still on schedule to commence
formal production by April 2013. The Board intends to increase
utilisation at this new plant prudently and expects it to be fully
utilised in the medium term.
We are also considering diversification into processing other
agriculture products such as corn and red beans to maximise the
utilisation of our plants at times when fruit supply is limited or
adversely affected by weather.
Sales to supermarkets
Our sales to supermarkets in China dropped from 48,447 tonnes to
37,425 tonnes during the review period. This was as expected as we
had renewed our supermarket contracts earlier in the year when the
economic outlook was less optimistic. Sales of graded premium
oranges under our Royal Star brand also fell for the period ended
31 December 2012.
Our contract with an international supermarket chain and a
national supermarket chain has been proceeding as anticipated. We
started by selling our summer oranges to these chains in Guangxi
only, and we are now also selling our branded winter oranges to its
outlets in Guangdong, Zhejiang and Shanghai. This is a tremendous
vote of confidence for our Royal Star brand, and we look forward to
selling our graded oranges in more markets across China in the
future.
Dividend
The Board declared the payment of an interim dividend of RMB0.03
and a special dividend of RMB0.02 per share for the six months
ended 31 December 2012.
The interim and special dividend will be paid in sterling or HK
Dollars on or before 12 April 2013, to shareholders on the register
at the close of business on the record date of 15 March 2013, with
an ex-dividend date of 14 March 2013 and 13 March 2013 on The Stock
Exchange of Hong Kong Limited and London Stock Exchange PLC,
respectively. The actual translation rate for the purpose of
dividend payment in sterling or HK Dollars will be determined by
reference to the exchange rate on 15 March 2013.
Enhancing Shareholder Value
During the six months ended 31 December 2012, the Company
repurchased and cancelled 10,649,000 ordinary shares of HK$0.01 at
an aggregate consideration of HK$38,387,280 before expenses. The
repurchases were effected by the Board for the enhancement of
shareholder value in the long term.
Outlook for 2013
Our performance during the six month period was disappointing,
primarily due to the higher costs incurred as a result of unstable
weather in 2012 and general wage inflation in the PRC.
The Group's second half performance will reflect the price
achieved for the Group's summer orange crop, the selling price of
pineapple juice concentrates and the impact of weather on the
volume of fertilisers and pesticides used by the Group. In this
respect we expect that orange prices will rise, albeit slightly,
responding to the inflationary environment and the forecasts for
China's economy, which the World Bank has predicted will expand by
8.4% in 2013 and we are also optimistic that juice prices will
continue to increase throughout the balance of the year. While we
cannot predict the weather, a repeat of the unhelpful conditions in
2012 would be both highly unusual and unexpected.
For the longer term, we are well positioned to deliver much
improved results. We are exploring markets outside of China and
have been selling oranges to Vietnam from our Hepu Plantation in
neighbouring Guangxi; if successful, we will also consider entering
other ASEAN markets. The volume of oranges we produce will increase
as our trees continue to mature to fruit bearing age, the benefits
of our planting programme come through and as our third plantation
in Hunan province, begins its first harvest in 2014; in addition to
the nearly 1.2 million summer orange trees already there, this
plantation will be planted with another 600,000 summer orange trees
in 2013. Our juicing business is also making good progress with its
third plant and its markets are very attractive.
I would like to thank all the members of our management team and
staff on behalf of the Board. They have demonstrated great
commitment to our Company during this challenging period, and I
remain confident in their ability to enhance our performance in the
months and years ahead.
I would also like to take this opportunity to thank our
shareholders, business partners and investors for their patience
and on-going support.
Tony Tong Wang Chow
Chairman
26 February 2013
Management Discussion and Analysis
OPERATING PERFORMANCE
Turnover
The breakdown of turnover by types is as follows:
For the six months ended 31 December
2012 2011
% of % of
RMB'000 total turnover RMB'000 total turnover
Hepu Plantation 129,441 14.5% 180,405 17.3%
Xinfeng Plantation 470,753 52.8% 463,873 44.5%
-------- --------------- ---------- ------------------
Sales of oranges 600,194 67.3% 644,278 61.8%
Sales of processed
fruits 290,243 32.5% 396,903 38.0%
Sales of self-bred
saplings 1,608 0.2% 2,235 0.2%
-------- --------------- ---------- ------------------
Total turnover 892,045 100.0% 1,043,416 100.0%
======== =============== ========== ==================
The Group's turnover decreased by approximately 14.5% from
RMB1,043.4 million to RMB892.0 million for the six months ended 31
December 2012.
Sale of oranges
Turnover from sale of oranges decreased by 6.8% to RMB600.2
million for the six months ended 31 December 2012. This was mainly
due to a decrease of approximately 6.0% in the Group's production
to 161,233 tonnes.
As anticipated, the production yield from Hepu Plantation
decreased by 26.9% from 44,906 tonnes to 32,838 tonnes for the six
months ended 31 December 2012 due to the ongoing replanting
programme. In the previous year, 66,449 winter orange trees were
removed and replanted with the same number of the summer orange
trees. As the orange trees continue to mature, the production yield
from the Xinfeng Plantation increased by 1.3% to 128,395 tonnes for
the six months ended 31 December 2012 from 126,701 tonnes in the
comparable period last year. The unstable weather and persistent
heavy rainfall in 2012 limited the growth of this year's winter
orange crop in the Xinfeng Plantation.
The following table set out the average selling prices of winter
oranges in different plantations.
For the six months ended 31 December
2012 2011
RMB RMB
(per tonne) (per tonne)
Hepu Plantation 4,013 4,085
Xinfeng Plantation 3,776 3,770
================= ================
The average selling prices of winter oranges were relatively
stable for the six months ended 31 December 2012.
All of the Group's oranges were sold domestically. The Group's
customers from the sales of oranges can be divided into three
categories, namely corporate customers, wholesale customers, and
supermarket chains. The breakdown of types of customers is as
follows:
For the six months ended 31 December
2012 2011
% of sale of
% of sale of oranges oranges
Types of customers
Corporate customers 49.9% 42.9%
Supermarket chains 26.1% 32.0%
Wholesale customers 23.6% 24.6%
Other 0.4% 0.5%
Total 100.0% 100.0%
======================================== ========================
For the six months ended 31 December 2012, the production volume
and turnover to supermarket chains represented approximately 23.2%
and 26.1% respectively of the Group, compared to approximately
28.2% and 32.0% for the six months ended 31 December 2011. As the
Xinfeng Plantation has not yet achieved full maturity, the oranges
were mainly sold to corporate and wholesale customers, thereby
reducing the percentage of sales to supermarket chains.
For the Hepu Plantation and Xinfeng Plantation, the production
volume sold to supermarkets was 10,524 tonnes and 26,901 tonnes for
the six months ended 31 December 2012, compared to 16,100 tonnes
and 32,347 tonnes for the six months ended 31 December 2011
respectively. The decrease in Hepu Plantation was mainly due to the
lower production yield of winter oranges for the six months ended
31 December 2012. Also, starting from this year, the Group has
supplied several major domestic and international supermarket
chains with graded oranges through sizeable distributors instead of
through direct sales.
The Company is selling two types of oranges to customers, namely
ungraded oranges and graded oranges. Ungraded oranges are neither
packaged nor branded and the customers arrange for the
transportation of the oranges at their own cost. Usually, the
ungraded oranges are sold to wholesale and corporate customers.
Graded oranges are oranges that the Company grades, packages and
delivers to the customers at its cost, usually to supermarket
customers. The graded oranges are sold under the "Royal Star" brand
at a premium price compared to the selling price of ungraded
oranges without brand. The breakdown of types of oranges is as
follows:
For the six months ended 31 December
2012 2011
% of sale of oranges
Types of oranges
Ungraded oranges 88.7% 84.7%
Graded oranges 11.3% 15.3%
Total 100.0% 100.0%
================= ================
As the Xinfeng Plantation was still at the early stage, the
oranges were mainly sold to corporate and wholesale customers
without grading, thereby reducing the percentage of sales of graded
oranges.
Sale of processed fruits
The table sets out the volume and turnover from the sale of
processed fruits:
For the six months ended 31 December
2012 2011
Volume Turnover Volume Turnover
(Tonnes) RMB'000 (Tonnes) RMB'000
Pineapple juice concentrates 6,954 73,344 9,421 114,129
Lychee juice concentrates 2,179 30,653 2,957 35,271
Other fruit juice concentrates 2,939 51,173 2,226 44,397
Mango purees 6,401 39,127 7,966 57,187
Other fruit purees 3,125 23,114 7,110 52,536
Frozen and dried fruits
and vegetables 7,626 59,984 8,738 62,970
29,224 277,395 38,418 366,490
Fruit juice trading N/A 12,848 N/A 30,413
--------- --------- --------- ---------
29,224 290,243 38,418 396,903
========= ========= ========= =========
BPG processes over 22 different types of tropical fruits,
including pineapples, passion fruit, lychees, mangoes and papayas.
Only single product accounting for over 10% of the turnover from
the sale of processed fruits is shown separately in the table
above.
Turnover from the sale of processed fruit decreased by 26.9% to
RMB290.2 million for the six months ended 31 December 2012. This is
mainly due to the lower average selling price of pineapple juice
concentrates, the Group's main juice concentrates product, for the
six months ended 31 December 2012 compared to the corresponding
period in 2011 as a result of the previously highlighted destocking
by Thai and Philippine producers. The price of pineapple juice
concentrates started to decrease in January 2012, reached a low in
August 2012 and has since improved. Also, the unstable weather and
persistent heavy rainfall in 2012 limited the supply of several
types of fruit for juice processing during the period.
The utilisation rate of two existing processing plants in Beihai
and Hepu is approximately 80.9% and 90.1% for the six months ended
31 December 2012.
BPG currently generates most of its sales from the PRC market,
with key customers being beverage mixers supplying major beverage
groups.
Sale of self-bred saplings
For the six months ended 31 December 2012, RMB1.6 million was
recognised from the sales of the approximately 134,000 self-bred
saplings developed from the nursery centre at the Hepu Plantation
to local farmers.
Cost of sales
The breakdown of cost of sales is as follows:
For the six months ended 31 December
2012 2011
% of % of
cost of sales cost of sales
of respective of respective
RMB'000 segment RMB'000 segment
Inventories used
Fertilisers 217,164 55.8% 204,504 57.5%
Packaging materials 13,659 3.5% 14,405 4.1%
Pesticides 37,804 9.7% 34,427 9.7%
---------
268,627 69.0% 253,336 71.3%
Production overheads
Direct labour 41,866 10.8% 32,487 9.1%
Depreciation 47,199 12.1% 44,114 12.4%
Others 31,722 8.1% 25,502 7.2%
--------- -------------- --------- --------------
Cost of sales of oranges 389,414 100% 355,439 100%
--------- -------------- --------- --------------
Fruit 141,398 66.7% 217,593 77.4%
Packaging materials 17,447 8.2% 18,870 6.7%
Direct labour 13,196 6.2% 11,115 4.0%
Other production overheads 40,079 18.9% 33,336 11.9%
--------- -------------- --------- --------------
Cost of sales of
processed fruits 212,120 100% 280,914 100%
--------- -------------- --------- --------------
Cost of sales of self-bred
saplings 1,018 789
--------- ---------
Total 602,552 637,142
========= =========
Cost of sales of oranges principally consists of the costs of
raw materials such as fertilisers, packaging materials, pesticides,
and other direct costs such as direct labour, depreciation and
production overheads. The production cost of sales of oranges
increased 9.6% to RMB389.4 million (12/2011: RMB355.4 million). The
increase in production costs was principally due to the increase in
fertilisers and pesticides consumed as a result of the unstable
weather and persistent heavy rainfall in 2012 and higher labour
costs incurred due to general wage inflation in the PRC during the
period. As a results, the unit cost of production in the Hepu
Plantation and Xinfeng Plantation increased to approximately
RMB2.31 per kg and RMB2.44 per kg respectively for the six months
ended 31 December 2012 (12/2011: RMB1.76 per kg and RMB2.18 per kg
respectively).
The combined unit cost of production increased by 16.9% to
RMB2.42 per kg from RMB2.07 per kg in the comparable period due to
higher contribution from Xinfeng Plantation with relatively higher
unit cost.
Cost of sale of processed fruit mainly includes the costs of
fruit and packaging materials and other direct costs such as direct
labour, depreciation and production overheads. For the six months
ended 31 December 2012, the cost of processed fruit decreased by
24.5% from RMB280.9 million to RMB212.1million. The decrease was
mainly due to decrease in the fruit cost by 35.0% from RMB217.6
million toRMB141.4 million.
Gross profit
The Group's overall gross profit decreased by 28.7% to
approximately RMB289.5 million for the six months ended 31 December
2012 (12/2011: RMB406.3 million). The overall gross profit margin
decreased from to 38.9% to 32.5% for the six months ended 31
December 2012.
The following table sets forth a breakdown of the Group's gross
profit margin by plantation:
For the six months ended 31 December
2012 2011
Hepu Plantation 41.5% 56.2%
Xinfeng Plantation 33.4% 40.4%
================== ==================
The gross profit margin of the Hepu Plantation and Xinfeng
Plantation decreased to 41.5% and 33.4%respectively for the six
months ended 31 December 2012 (12/2011: 56.2% and 40.4%
respectively). The decrease was mainly due to the higher volume of
fertilisers and pesticides consumed as a result of the unstable
weather and persistent heavy rainfall in 2012 and higher labour
costs incurred as a result of the general wage inflation in the
PRC.
The following table sets out a breakdown of the Group's gross
profit margin by business:
For the six months ended 31 December
2012 2011
Sales of oranges 35.1% 44.8%
Sales of processed fruits 26.9% 29.2%
Sales of self-bred saplings 36.8% 64.7%
Overall gross profit margin 32.5% 38.9%
================== ==================
Due to higher contribution from Xinfeng Plantation with lower
gross profit margin and the decrease of the gross profit margin in
both Hepu Plantation and Xinfeng Plantation, the overall gross
profit margin from sales of oranges dropped to approximately 35.1%
(12/2011: 44.8%) for the six months ended 31 December 2012.
BPG processes over 22 different types of fruit with different
gross profit margin. The normalised gross profit margin of BPG for
the six months ended 31 December 2012 decreased to 26.9%
(12/2011:29.2%). It was mainly due to the higher direct labour cost
and other production overheads resulted from the general inflation
in the PRC.
Loss on change in fair value of biological assets
The Group recorded a loss of RMB23.0 million from the change in
fair value of biological assets for the six months ended 31
December 2012, compared to a gain of RMB100.6 million for the last
corresponding period in 2011. There is no movement of the orange
trees during the period. The Board wishes to emphasise that the
loss on change in fair value of biological assets is
non-operational and does not have any effect on the cash flow of
the Group for the six months ended 31 December 2012.
Other income
The increase in other income was mainly due to the higher
interest income arising from the bank balance during the period as
more money has been placed in the fixed deposits with higher
interest rate. The effective interest rate for bank deposits during
the six months ended 31 December 2012 is approximately2.53%
(12/2011: 0.56%) per annum.
Selling and distribution expenses
Selling and distribution expenses mainly comprise sales
commissions, advertising, salaries and welfare of sales personnel,
traveling and transportation expenses. The selling and distribution
expenses of the Group decreased from approximately RMB29.0 million
for the six months ended 31 December 2011 to approximately RMB20.8
million for the six months ended 31 December 2012, representing a
decrease of 28.3%, mainly due to there duction of the
transportation costs in Hepu Plantation resulting from less graded
oranges sold during the period.
Selling and distribution expenses represented 2.3% of the
Group's turnover, a decrease of 0.5 percentage points as compared
to 2.8% in last corresponding period, demonstrating the Group's
ability to control costs effectively.
General and administrative expenses
General and administrative expenses comprise mainly salary,
office administration expenses, depreciation, amortization and
research costs. The general and administrative expenses of the
Group were approximately RMB59.0 million for the six months ended
31 December 2012 (12/2011: RMB80.4 million). The decrease was
mainly due to lower share based payment in relation to the employee
share options.
General and administrative expenses represented 6.6% of the
Group's turnover, a decrease of 1.1 percentage points as compared
to 7.7% in last corresponding period, demonstrating the Group was
able to control the cost effectively.
Profit
The profit attributable to shareholders for the six months ended
31 December 2012 decreased to approximately RMB212.4 million,
compared to approximately RMB397.5 million for last corresponding
period, representing a decrease of approximately 46.6%.
The core net profit excluding net change in fair value of
biological assets and share-based payments for the six months ended
31 December 2012 was approximately RMB249.5 million, compared to
approximately RMB322.7 million for last corresponding period,
representing a decrease of approximately 22.7%.
INTERIM AND SPECIAL DIVIDEND
The Directors are pleased to declare an interim dividend of
RMB0.03 (12/2011: RMB0.03) and a special dividend of RMB0.02
(12/2011: RMB0.02) per share.
PRODUCTIVITY
The production volume of winter oranges decreased to 161,233
tonnes for the six months ended 31 December 2012, representing a
decrease of 6.0%.
The production volume of winter oranges in Hepu Plantation
dropped from approximately 44,906 tonnes last year to approximately
32,838 tonnes in the current year, representing a decrease of
approximately 26.9%, which was due to the ongoing replanting
programme. In the year to 30 June 2012, 66,449 winter orange trees
were removed and replanted with the same number of the summer
orange trees.
In addition, the production volume of winter oranges from the
Xinfeng Plantation increased from approximately 126,701 tonnes last
year to approximately 128,395 tonnes in the current year,
representing an increase of approximately 1.3% due to increased
maturity during the period. The unstable weather and persistent
heavy rainfall in 2012 limited the growth of this year's winter
orange crop in the Xinfeng Plantation.
CAPITAL STRUCTURE
As at 31 December 2012, there were 1,227,721,555 shares in
issue. Based on the closing price of HKD3.68, the market
capitalisation of the Company was approximately HKD4,518 million as
at 31 December 2012 (GBP361.4 million).
HUMAN RESOURCES
There were a total of 1,748 employees of the Group as at 31
December 2012. The Group aims to attract, retain and motivate high
calibre individuals with a competitive remuneration package.
Remuneration packages are performance-linked and business
performance, market practices and competitive market conditions are
all taken into consideration. The Group reviews the employees'
remuneration packages on an annual basis. The Group also places
heavy emphasis on staff training and development so that employees
can reach their maximum potential.
FINANCIAL PERFORMANCE
31 December 2012 30 June 2012
Current ratio (x) 30.27 47.49
Quick ratio (x) 29.00 43.49
Net debt to equity (%) Net cash Net cash
For the six months ended
31 December 31 December
2012 2011
Asset turnover (x) 0.11 0.13
Core net profit per share (RMB) 0.20 0.27
Basic earnings per share (RMB) 0.17 0.33
Liquidity
The current ratio and quick ratio was 30.27 and 29.00
respectively. The liquidity of the Group is healthy with sufficient
reserves for both operation and development.
Profitability
The asset turnover of the Group dropped to 0.11 (12/2011: 0.13)
for the six months ended 31 December 2012. The lower of the ratio
was mainly due to decrease of the turnover for the period as
mentioned above.
The basic earnings per share for the six months ended 31
December 2012 was RMB0.17 (12/2011: RMB0.33). This was driven by
the 48.5% decrease in profit attributable to shareholders for the
period.
The core net profit per share for the six months ended 31
December 2012 decreased to RMB0.20 (12/2011: RMB0.27), representing
a decrease of 25.9%.
Debt ratio
The net cash positions of the Group were RMB2,374.4 million and
RMB2,388.1 million at 31 December 2012 and 30 June 2012
respectively.
Internal cash resource
The Group's major internal cash resource is its cash and bank
balances. The Group did not have any outstanding bank borrowings as
at 31 December 2012.
Charge on assets and contingent liabilities
None of the Group's assets were pledged and the Group did not
have any material contingent liabilities as at 31 December
2012.
Capital commitment
As at 31 December 2012, the Group had a capital commitment of
approximately RMB141.4 million mainly in relation to the
construction of the farmland infrastructure in the Hunan Plantation
and the new juicing plant in Basie city.
Foreign exchange risk
The Group is exposed to currency risk primarily through its cash
and cash equivalents that are denominated in a currency other than
the functional currency of the operations to which they relate. The
currencies giving rise to this risk are primarily Hong Kong
dollars, United States dollars and British pounds.
The Group undertakes certain transactions denominated in foreign
currencies, hence exposures to exchange rate fluctuation arise. The
Group currently does not use any derivative contracts to hedge
against its exposure to currency risk. Management manages its
currency risk by closely monitoring the movement of the foreign
currency rate and considers hedging significant foreign currency
exposure should the need arise.
PLANTATIONS
The Group has three orange plantations in the PRC occupying in
total approximately 155,000 mu (equivalent to approximately 103.3
sq.km.) of land, with approximately 46,000 mu (equivalent to
approximately 30.7 sq.km.) located in the Hepu county of the
Guangxi Zhuang Autonomous Region, the Hepu Plantation,
approximately 56,000 mu (equivalent to approximately 37.3 sq.km.)
in the Xinfeng county of the Jiangxi province, the Xinfeng
Plantation and approximately 53,000mu (equivalent to approximately
35.3 sq.km) in the Dao county of the Hunan province, the Hunan
Plantation.
Hepu Plantation
The Hepu Plantation is fully planted and comprises approximately
1.3 million orange trees of which approximately 1.0 million trees
were producing oranges.
Xinfeng Plantation
The Xinfeng Plantation is fully planted and comprises 1.6
million winter orange trees, all of which are now producing
oranges.
Hunan Plantation
The Hunan Plantation is still under development and comprises
approximately 1.2 million summer orange trees as at 31 December
2012. During the period, 129,177 summer orange trees were planted
with a further approximately 600,000 summer orange trees to be
planted in 2013. The construction of Hunan Plantation is expected
to be completed in 2013.
The below table sets out the age profile as at 31 December 2012
and the production volume of the plantations for the six months
ended 31 December 2012:
Summer orange trees
Hepu Plantation Hunan Plantation
Age Hepu Plantation Yield Hunan Plantation Yield Total Total Yield
No. of No. of No. of
trees (tonnes) trees (tonnes) trees (tonnes)
0 - - 129,177 - 129,177 -
1 66,449 - 622,475 - 688,924 -
2 63,584 - 427,400 - 490,984 -
3 64,194 - - - 64,194 -
4 81,261 - - - 81,261 -
5 76,135 - - - 76,135 -
6 55,185 - - - 55,185 -
16 29,996 - - - 29,996 -
17 128,966 - - - 128,966 -
18 186,003 - - - 186,003 -
19 223,741 - - - 223,741 -
975,514 - 1,179,052 - 2,154,566 -
Winter orange trees
Xinfeng
Hepu Plantation Xinfeng Plantation
Age Hepu Plantation Yield Plantation Yield Total Total Yield
No. of No. of No. of
trees (tonnes) trees (tonnes) trees (tonnes)
6 - - 400,000 27,860 400,000 27,860
7 - - 400,000 28,907 400,000 28,907
8 46,077 3,963 400,000 31,052 446,077 35,015
10 180,180 18,341 400,000 40,576 580,180 58,917
11 42,300 4,574 - - 42,300 4,574
16 24,937 3,142 - - 24,937 3,142
17 10,133 1,246 - - 10,133 1,246
18 12,988 1,572 - - 12,988 1,572
316,615 32,838 1,600,000 128,395 1,916,615 161,233
Grand total 4,071,181 161,233
========= ===========
The below table sets out the age profile as at 31 December 2011
and the production volume of the plantations for the six months
ended 31 December 2011:
Summer orange trees
Hepu Plantation Hunan Plantation
Age Hepu Plantation Yield Hunan Plantation Yield Total Total Yield
No. of No. of No. of
trees (tonnes) trees (tonnes) trees (tonnes)
0 - - 280,000 - 280,000 -
1 63,584 - 427,400 - 490,984 -
2 64,194 - - - 64,194 -
3 81,261 - - - 81,261 -
4 76,135 - - - 76,135 -
5 55,185 - - - 55,185 -
15 29,996 - - - 29,996 -
16 128,966 - - - 128,966 -
17 186,003 - - - 186,003 -
18 223,741 - - - 223,741 -
909,065 - 707,400 - 1,616,465 -
Winter orange trees
Xinfeng
Hepu Plantation Xinfeng Plantation
Age Hepu Plantation Yield Plantation Yield Total Total Yield
No. of No. of No. of
trees (tonnes) trees (tonnes) trees (tonnes)
5 - - 400,000 23,243 400,000 23,243
6 - - 400,000 28,023 400,000 28,023
7 46,077 3,364 400,000 33,604 446,077 36,968
9 180,180 19,597 400,000 41,831 580,180 61,428
10 42,300 4,974 - - 42,300 4,974
15 91,386 13,469 - - 91,386 13,469
16 10,133 1,524 - - 10,133 1,524
17 12,988 1,978 - - 12,988 1,978
383,064 44,906 1,600,000 126,701 1,983,064 171,607
Grand total 3,599,529 171,607
========= ===========
VALUATION OF BIOLOGICAL ASSETS
The Group has engaged an independent valuer to perform desktop
valuation on the fair value of the orange trees less costs to sell
as at 31 December 2012.
The valuations of the Group's orange trees were conducted on the
basis of discounted cash flow. The discount rate being applied to
the discounted cash flow model is based on Capital Asset Pricing
Model. The independent valuer begins with the appraised value of
the Group's orange trees by discounting the future income streams
attributable to the Group's orange trees to arrive at a present
value and deducts the tangible assets (including plantation related
machinery and equipment and land improvements) from the appraised
value which are employed in the operation of the Group's
plantations.
Major assumptions
The discounted cash flow method adopted a number of key
assumptions, which include the discount rate, market prices of
oranges, production yield per tree, related production costs, etc.
The values of such variables are determined by the independent
valuer using information supplied by the Group, as well as
proprietary and third-party data, as follows:
1) The discount rate applied for the six months ended 31
December 2012 was 18.0% (12/2011: 20.0%). The discount rate
reflected the expected market return on the asset and can be
affected by the interest rate, market sentiments and risk of the
asset versus the general market risk.
2) The yield per tree variables represent the harvest level of
the orange trees. The yield of orange trees is affected by the age,
species and health of the orange trees, the climate, location, soil
conditions, topography and infrastructure. In general, yield per
tree increases from age 3 to 10, remains stable for about 22 years,
and then decreases until age 35.
3) The market prices variables represent the assumed market
price for the summer oranges and winter oranges produced by the
Group. The independent valuer adopted the market sales prices
prevailing as of the relevant balance sheet date for each type of
orange produced by the Group as the sales price estimate. The
selling prices of winter oranges and summer oranges from the Hepu
Plantation and winter oranges from the Xinfeng Plantation adopted
were RMB3,320 per tonne, RMB5,200 per tonne and RMB3,740 per tonne,
respectively, for the six months ended 31 December 2012 and
RMB3,310 per tonne, RMB5,300 per tonne and RMB3,730 per tonne,
respectively, for the six months ended 31 December 2011.
4) The direct production cost variables represent the direct
costs necessary to bring the oranges to their sales form, which
mainly include raw material costs and direct labour costs. The
direct production cost variables are determined by reference to
actual costs incurred for areas that have been previously harvested
and cost information for comparable areas with regards to areas
that have not been harvested previously.
Sensitive analysis
1) Changes in the discount rate applied result in significant
fluctuations in the Group's loss from changes in fair value of
orange trees less costs to sell. The following table illustrates
the sensitivity of the Group's loss from changes in fair value of
orange tree less costs to sell to increases or decreases by 100
basis points in the discount rate of 18.0% applied for the six
months ended 31 December 2012:
100 basis
100 basis points points
Decrease Base Case Increase
Discount rate 17.0% 18.0% 19.0%
Net gain/(loss) on change
in fair value of biological
assets (RMB'000) 131,000 (23,000) (163,000)
2) Changes in the yield per orange tree can also result in
significant fluctuations in loss from changes in fair value of
orange trees less costs to sell. The following table illustrates
that sensitivity of the Group's loss from changes in fair value of
orange trees less costs to sell to a 5.0% increase or decrease in
the yield per tree applied for the six months ended 31 December
2012:
5.0% Decrease Base Case 5.0% Increase
Net (loss)/gain on change
in fair value of biological
assets (RMB'000) (217,000) (23,000) 172,000
3) Changes in assumed market prices of the oranges can also
result in significant fluctuations in loss from changes in fair
value of orange trees less costs to sell. The following table
illustrates the sensitivity of the Group's loss from changes in
fair value of orange trees less costs to sell to a 5.0% increase or
decrease in the assumed market prices of oranges as at 31 December
2012 used to calculate gain from changes in fair value of orange
trees less costs to sell for the six months ended 31 December
2012:
5.0% Decrease Base Case 5.0% Increase
Net (loss)/gain on change
in fair value of biological
assets (RMB'000) (391,000) (23,000) 346,000
4) Changes in the assumed direct production costs can also
result in significant fluctuations in loss from changes in fair
value of orange trees less costs to sell. The following table
illustrates the sensitivity of the Group's loss from changes in
fair value of orange trees less costs to sell to 5.0% increase or
decrease in the Group's assumed direct production costs used to
calculate gain from changes in fair value of orange trees less
costs to sell for the six months ended 31 December 2012:
5.0% Decrease Base Case 5.0% Increase
Net gain/(loss) on change
in fair value of biological
assets (RMB'000) 165,000 (23,000) (209,000)
The above sensitivity analyses are intended for illustrative
purposes only, and any variation could exceed the amounts shown
above.
Valuation
According to the valuation report of the independent valuer, the
aggregate value of the orange trees in the Hepu Plantation and
Xinfeng Plantation as at 31 December 2012 was estimated to be
approximately RMB2,203 million.
Condensed Consolidated Income Statement
For the six months ended 31 December 2012
Six months ended Year ended
31 December 30 June
2012 2011 2012
Note (unaudited) (unaudited) (audited)
(restated)
RMB'000 RMB'000 RMB'000
Turnover 6 892,045 1,043,416 1,776,144
Cost of sales (602,552) (637,142) (983,743)
----------------- -------------- ------------
Gross profit 289,493 406,274 792,401
Other income 7 31,368 8,008 24,089
Net (loss)/gain on change
in fair value of biological
assets (23,000) 100,608 166,900
Selling and distribution
expenses (20,804) (29,016) (60,579)
General and administrative
expenses (58,981) (80,356) (157,607)
Profit from operations 218,076 405,518 765,204
Finance costs 8(a) (24) (39) (146)
----------------- -------------- ------------
Profit before income tax 8 218,052 405,479 765,058
Income tax expense 9 - - -
----------------- -------------- ------------
Profit for the period/year 218,052 405,479 765,058
================= ============== ============
Attributable to
Equity shareholders of the
Company 212,380 397,542 750,200
Non-controlling interest 5,672 7,937 14,858
----------------- -------------- ------------
218,052 405,479 765,058
================= ============== ============
RMB RMB RMB
Earnings per share 10
- Basic 0.174 0.327 0.615
================= ============== ============
- Diluted 0.173 0.326 0.613
================= ============== ============
Details of dividends payable to equity shareholders of the
Company for the period/year are set out in note 11.
Condensed Consolidated Statement of Comprehensive Income
For the six months ended 31 December 2012
Six months ended Year ended
31 December 30 June
2012 2011 2012
(unaudited) (unaudited) (audited)
(restated)
RMB'000 RMB'000 RMB'000
Profit for the period/year 218,052 405,479 765,058
Other comprehensive expense
for the period/year
Item that may be reclassified
subsequently to profit or
loss:
Exchange differences on translation
of financial statements of
foreign operations, net of
nil tax - (658) (636)
--------------------- ------------- -----------
Total comprehensive income
for the period/year 218,052 404,821 764,422
===================== ============= ===========
Attributable to
Equity shareholders of the
Company 212,380 396,884 749,564
Non-controlling interest 5,672 7,937 14,858
--------------------- ------------- -----------
218,052 404,821 764,422
===================== ============= ===========
Condensed Consolidated Statement of Financial Position
At 31 December 2012
31 December 30 June
2012 2011 2012
Note (unaudited) (unaudited) (audited)
(restated)
RMB'000 RMB'000 RMB'000
ASSETS
Non-current assets
Property, plant and equipment 1,909,966 1,787,784 1,835,518
Land use rights 73,474 69,208 68,527
Construction-in-progress 251,750 59,966 178,302
Biological assets 2,333,193 2,203,307 2,305,224
Intangible assets 70,677 56,102 58,506
Deposits 28,161 18,132 4,251
Goodwill 1,157,261 1,157,261 1,157,261
------------- ------------- -----------
5,824,482 5,351,760 5,607,589
------------- ------------- -----------
Current assets
Biological assets 52,532 33,833 158,636
Properties for sale 5,830 5,830 5,830
Inventories 50,688 67,926 63,094
Trade and other receivable 12 124,365 162,762 86,865
Cash and cash equivalents 2,374,441 2,413,626 2,388,114
------------- ------------- -----------
2,607,856 2,683,977 2,702,539
------------- ------------- -----------
Total assets 8,432,338 8,035,737 8,310,128
============= ============= ===========
Condensed Consolidated Statement of Financial Position
(continued)
At 31 December 2012
31 December 30 June
2012 2011 2012
Note (unaudited) (unaudited) (audited)
(restated)
RMB'000 RMB'000 RMB'000
EQUITY AND LIABILITIES
Equity
Share capital 12,142 12,145 12,083
Reserves 8,225,256 7,857,611 8,138,036
------------ ------------ ------------
Total equity attributable to
equity
shareholders of the Company 8,237,398 7,869,756 8,150,119
Non-controlling interest 107,840 95,247 102,168
------------ ------------ ------------
8,345,238 7,965,003 8,252,287
------------ ------------ ------------
Non-current liability
Obligations under finance lease 937 1,034 937
------------ ------------ ------------
Current liabilities
Trade and other payables 13 86,066 69,610 56,807
Obligations under finance lease 97 90 97
86,163 69,700 56,904
------------ ------------ ------------
Total liabilities 87,100 70,734 57,841
------------ ------------ ------------
Total equity and liabilities 8,432,338 8,035,737 8,310,128
============ ============ ============
Net current assets 2,521,693 2,614,277 2,645,635
============ ============ ============
Total assets less current liabilities 8,346,175 7,966,037 8,253,224
============ ============ ============
Condensed Consolidated Cash Flow Statement
For the six months ended 31 December 2012
Six months ended Year ended
31 December 30 June
2012 2011 2012
(unaudited) (unaudited) (audited)
(restated)
RMB'000 RMB'000 RMB'000
Cash flows from operating activities
Profit before income tax 218,052 405,479 765,058
Adjustments for:
Interest income (30,152) (6,451) (21,559)
Finance costs 24 39 146
Share-based payments 14,072 25,811 45,812
Amortisation of land use rights 587 681 1,362
Amortisation of intangible assets 6,509 4,805 9,781
Depreciation 69,426 61,478 126,044
Loss on disposal of property, plant
and equipment 85 259 4,828
Loss on disposal of land use right 4,902 - -
Net loss/(gain) on change in fair
value of biological assets 23,000 (100,608) (166,900)
------------- ------------- ------------
Operating profit before working
capital changes 306,505 391,493 764,572
Movements in working capital elements:
Inventories 12,406 (21,519) (16,687)
Biological assets 106,104 111,728 (13,075)
Trade and other receivables (37,500) (57,087) 25,150
Trade and other payables 29,259 10,491 (2,290)
Due to a related party - (3,000) (3,000)
------------
Net cash generated from operating
activities 416,774 432,106 754,670
------------- ------------- ------------
Condensed Consolidated Cash Flow Statement (continued)
For the six months ended 31 December 2012
Six months ended Year ended
31 December 30 June
2012 2011 2012
(unaudited) (unaudited) (audited)
(restated)
RMB'000 RMB'000 RMB'000
Cash flows from investing activities
Proceeds from disposal of property,
plant and equipment - 27 6,258
Proceed from disposal of land use 3,565 - -
right
Purchase of property, plant and
equipment (16,373) (6,440) (38,098)
Purchase of land use right (14,001) - -
Additions to construction-in-progress (196,783) (106,928) (305,115)
Deposits paid for acquisition of
property, plant and equipment (28,161) - (4,050)
Net additions to biological assets (50,969) (16,202) (51,827)
Additions to intangible assets (18,680) (7,620) (15,000)
Decrease/(increase) in time deposits
with terms over three months 19,341 (82,094) 103,040
Interest received 30,152 6,451 21,559
------------- ------------- ------------
Net cash used in investing activities (271,909) (212,806) (283,233)
------------- ------------- ------------
Cash flows from financing activities
Proceeds from issue of new shares
upon exercise of share options - 12,457 12,457
Repurchase of shares (34,548) (15,871) (46,859)
Obligations under finance lease - - (90)
Dividends paid (104,625) (116,518) (177,848)
Finance costs paid (24) (39) (146)
------------- ------------- ------------
Net cash used in financing activities (139,197) (119,971) (212,486)
------------- ------------- ------------
Net increase in cash and cash equivalents 5,668 99,329 258,951
Cash and cash equivalents at beginning
of period/year 2,325,154 2,066,203 2,066,203
------------- ------------- ------------
Cash and cash equivalents at end
of period/year 2,330,822 2,165,532 2,325,154
============= ============= ============
Major non-cash transactions
During the six months ended 31 December 2012, purchase of
property, plant and equipment included an amount of RMB4,251,000
(six months ended 31 December 2011: RMB87,196,000, year ended 30
June 2012: RMB98,787,000) transferred from non-current
deposits.
Notes to the Interim Financial Information
1 GENERAL INFORMATION
Asian Citrus Holdings Limited (the "Company") was incorporated
in Bermuda on 4 June 2003 as an exempted company with limited
liability under the Companies Act of Bermuda and its shares are
listed on the Main Board of The Stock Exchange of Hong Kong Limited
(the "HKEx"), AIM of the London Stock Exchange and PLUS Markets
plc.
The address of the registered office of the Company is Clarendon
House, 2 Church Street, Hamilton, HM11, Bermuda. The principal
place of business of the Company is located at Rooms 1109-1112,
Wayson Commercial Building, 28 Connaught Road West, Hong Kong.
The principal activities of the Company and its subsidiaries
(together the "Group") are planting, cultivation and sale of
agricultural produce, manufacture and sale of fruit juice
concentrates, fruit purees, frozen fruits and vegetables, and
developing and sale of property units in an agricultural wholesale
market and orange processing centre.
2 BASIS OF PREPARATION
This interim financial information has been prepared in
accordance with International Accounting Standard ("IAS") 34,
Interim financial reporting, issued by the International Accounting
Standards Board ("IASB"), the applicable disclosure provisions of
the Rules Governing the Listing of Securities on the HKEx and the
AIM Rules issued by the London Stock Exchange. The interim
financial information is presented in Renminbi ("RMB"), rounded to
the nearest thousand, unless otherwise stated.
The interim financial information has been prepared under the
historical cost convention, as modified by the revaluation of
certain biological assets which are carried at their fair values.
The principal accounting policies adopted in the preparation of
this interim financial information are consistent with those
followed in the Group's annual financial statements for the year
ended 30 June 2012, except for the accounting policy changes that
are expected to be reflected in the Group's annual financial
statements for the year ending 30 June 2013. Details of the
applications of new and revised IFRSs are set out in note 3.
The preparation of interim financial information in conformity
with IAS 34 requires management to make judgements, estimates and
assumptions that affect the application of policies and reported
amounts of assets and liabilities, income and expenses on a year to
date basis. Actual results may differ from these estimates.
This interim financial information contains condensed
consolidated financial statements and explanatory notes. The notes
include an explanation of events and transactions that are
significant to an understanding of the changes in financial
position and performance of the Group since the2012 annual
financial statements. The condensed consolidated financial
statements and notes thereon do not include all of the information
required for a full set of financial statements prepared in
accordance with International Financial Reporting Standards
("IFRSs").
The interim financial information is unaudited, but has been
reviewed by the Company's Audit Committee. This interim financial
information has also been reviewed by the Company's auditor in
accordance with International Standard on Review Engagements 2410,
Review of interim financial information performed by the
independent auditor of the entity.
3 APPLICATIONS OF NEW AND REVISED IFRSs
The IASB has issued a number of amendments to IFRSs that are
first effective for the current accounting period of the Group and
the Company. Of these, the following developments are relevant to
the Group's financial statements:
-- IAS 1 (Amendments), Presentation of financial statements -
Presentation of items of other comprehensive income
-- IAS 12 (Amendments), Income taxes - Deferred tax: Recovery of underlying assets
The above amendments to IFRSs have had no material impact on the
Group's results of operations and financial position, or do not
contain any additional disclosure requirements specifically
applicable to the interim financial information.
Up to the date of issue of this interim financial information,
the IASB has issued a number of amendments, new standards and
interpretations which are not yet effective for the year ending 30
June 2013 and which have not been adopted in the interim financial
information. Of these developments, the following relates to
matters that may be relevant to the Group's operations and
financial statements:
Improvements to Annual improvements to IFRSs 2009 - 2011
IFRSs cycle(1)
Amendments to IFRS Mandatory effective date of IFRS 9 and
9 and IFRS 7 transition disclosures(2)
Amendments to IFRS Consolidated financial statements, joint
10, IFRS 11 and arrangements and disclosure of interests
IFRS 12 in other entities: transition guidance(1)
Amendments to IFRS Disclosure - Offsetting financial assets
7 and financial liabilities(1)
Amendments to IAS Offsetting financial assets and financial
32 liabilities(2)
IFRS 9 Financial instruments(3)
IFRS 10 Consolidated financial statements(1)
IFRS 12 Disclosure of interests in other entities(1)
IFRS 13 Fair value measurement(1)
IAS 27 (2011) Separate financial statements(1)
(1) Effective for annual periods beginning on or after 1 January
2013.
(2) Effective for annual periods beginning on or after 1 January
2014.
(3) Effective for annual periods beginning on or after 1 January
2015.
The Group is in the process of making an assessment of what the
potential impact of these amendments is expected to be in the
period of initial application but is not yet in a position to
determine whether their adoption will have a significant impact on
the Group's results of operations and financial position.
4 CHANGE IN ACCOUNTING POLICY
In the year ended 30 June 2012, the Group changed its accounting
policy with respect to the costing of infant trees. Cost of
fertilisers and pesticides, the principal directly attributable
costs incurred during the period of biological growth to the stage
the trees start bearing fruits (i.e. normally from age0 to 3), are
now capitalised as additions to the relevant biological assets. In
prior periods, these costs were expensed as incurred and included
in the general and administrative expenses in profit or loss. The
management believes the new policy is preferable as it more fairly
reflects the financial results of the Group's agricultural
activities.
The change in accounting policy has been applied
retrospectively. The effects of the change in the condensed
consolidated income statement for the six months ended 31 December
2011 and in the condensed consolidated statement of financial
position at 31 December 2011 are set out below.
Condensed consolidated income statement for the six months ended
31 December 2011
As previously
reported Effect of As restated
change in
accounting
policy
RMB'000 RMB'000 RMB'000
Turnover 1,043,416 - 1,043,416
Cost of sales (637,142) - (637,142)
------------- ----------- -----------
Gross profit 406,274 - 406,274
Other income 8,008 - 8,008
Net gain on change in fair value
of biological
assets 100,608 - 100,608
Selling and distribution expenses (29,016) - (29,016)
General and administrative expenses (94,346) 13,990 (80,356)
------------- ----------- -----------
Profit from operations 391,528 13,990 405,518
Finance costs (39) - (39)
------------- ----------- -----------
Profit before income tax 391,489 13,990 405,479
Income tax expense - - -
------------- ----------- -----------
Profit for the period 391,489 13,990 405,479
============= =========== ===========
Attributable to
Equity shareholders of the
Company 383,552 13,990 397,542
Non-controlling interest 7,937 - 7,937
------------- ----------- -----------
391,489 13,990 405,479
============= =========== ===========
RMB RMB RMB
Earnings per share
* Basic 0.316 0.011 0.327
* Diluted 0.314 0.012 0.326
============= =========== ===========
Condensed consolidated statement of financial position at 31
December 2011
As previously
reported Effect of As restated
change in
accounting
policy
RMB'000 RMB'000 RMB'000
ASSETS
Non-current assets
Property, plant and equipment 1,787,784 - 1,787,784
Land use rights 69,208 - 69,208
Construction-in-progress 59,966 - 59,966
Biological assets 2,158,118 45,189 2,203,307
Intangible assets 56,102 - 56,102
Deposits 18,132 - 18,132
Goodwill 1,157,261 - 1,157,261
------------- ----------- -----------
5,306,571 45,189 5,351,760
------------- ----------- -----------
Current assets
Biological assets 33,833 - 33,833
Properties for sale 5,830 - 5,830
Inventories 67,926 - 67,926
Trade and other receivables 162,762 - 162,762
Cash and cash equivalents 2,413,626 - 2,413,626
------------- ----------- -----------
2,683,977 - 2,683,977
------------- ----------- -----------
Total assets 7,990,548 45,189 8,035,737
============= =========== ===========
EQUITY AND LIABILITIES
Equity
Share capital 12,145 - 12,145
Reserves 7,812,422 45,189 7,857,611
------------- ----------- -----------
Total equity attributable to
equity
shareholders of the Company 7,824,567 45,189 7,869,756
Non-controlling interests 95,247 - 95,247
------------- ----------- -----------
7,919,814 45,189 7,965,003
------------- ----------- -----------
Non-current liability
Obligation under finance lease 1,034 - 1,034
------------- ----------- -----------
Current liabilities
Trade and other payables 69,610 - 69,610
Obligation under finance lease 90 - 90
------------- ----------- -----------
69,700 - 69,700
------------- ----------- -----------
Total liabilities 70,734 - 70,734
============= =========== ===========
Total equity and liabilities 7,990,548 45,189 8,035,737
============= =========== ===========
Net current assets 2,614,277 - 2,614,277
============= =========== ===========
Total assets less current liabilities 7,920,848 45,189 7,966,037
============= =========== ===========
5 SEGMENT INFORMATION
The Group manages its businesses by lines of business. In a
manner consistent with the way in which information is reported
internally to the Group's most senior executive management for the
purposes of resources allocation and performance assessment, the
Group has identified three reportable segments. The segments are
managed separately as each business offers different products and
required different business strategies. The following summary
describes the operations in each of the Group's reportable
segments:
-- Agricultural produce - planting, cultivation and sale of agricultural produce
-- Processed fruits - manufacture and sale of fruit juice
concentrates, fruit purees, frozen fruits and vegetables
-- Others - developing and sale of property units in an
agricultural wholesale market and orange processing centre
The directors assess the performance of the operating segments
based on a measure of reportable segment results. This measurement
basis excludes the central other income, expenses and finance
costs.
Segment assets mainly exclude goodwill, certain property, plant
and equipment, land use rights and other assets that are managed on
a central basis. Segment liabilities mainly exclude liabilities
that are managed on a central basis.
Segment results, assets and liabilities
Six months ended 31 December 2012:
Agricultural Processed
produce fruits Others Total
(unaudited) (unaudited) (unaudited) (unaudited)
RMB'000 RMB'000 RMB'000 RMB'000
RESULTS
Reportable segment revenue
and
revenue from external
customers 601,802 290,243 - 892,045
------------ ----------- ----------- -----------
Reportable segment results 167,969 76,582 (2,198) 242,353
------------ ----------- -----------
Unallocated corporate
expenses (27,175)
Unallocated corporate other revenue 2,874
Profit before income tax 218,052
Income tax expense -
-----------
Profit for the period 218,052
===========
ASSETS
Segment assets 5,361,299 1,631,016 77,577 7,069,892
Unallocated corporate
assets 1,362,446
-----------
Total assets 8,432,338
===========
LIABILITIES
Segment liabilities (55,084) (27,592) (2,217) (84,893)
Unallocated corporate
liabilities (2,207)
-----------
Total liabilities (87,100)
===========
OTHER INFORMATION
Additions to segment
non-current assets 130,095 121,553 - 251,648
============ =========== =========== ===========
Six months ended 31 December 2011:
Agricultural Processed
produce fruits Others Total
(unaudited) (unaudited) (unaudited) (unaudited)
(restated) (restated)
RMB'000 RMB'000 RMB'000 RMB'000
RESULTS
Reportable segment revenue
and
revenue from external
customers 646,513 396,903 - 1,043,416
------------ ----------- ----------- -----------
Reportable segment results 336,477 109,326 (1,615) 444,188
------------ ----------- -----------
Unallocated corporate
expenses (41,539)
Unallocated corporate other revenue 2,830
Profit before income tax 405,479
Income tax expense -
-----------
Profit for the period 405,479
===========
ASSETS
Segment assets 4,819,660 1,441,153 156,877 6,417,690
Unallocated corporate
assets 1,618,047
-----------
Total assets 8,035,737
===========
LIABILITIES
Segment liabilities (57,728) (8,719) (2,216) (68,663)
Unallocated corporate
liabilities (2,071)
-----------
Total liabilities (70,734)
===========
OTHER INFORMATION
Additions to segment
non-current assets 97,106 111,000 - 208,106
============ =========== =========== ===========
Year ended 30 June 2012:
Agricultural Processed
produce fruits Others Total
(audited) (audited) (audited) (audited)
RMB'000 RMB'000 RMB'000 RMB'000
RESULTS
Reportable segment revenue
and
revenue from external
customers 1,060,671 715,473 - 1,776,144
------------ --------- --------- ---------
Reportable segment results 621,600 203,714 (3,125) 822,189
------------ --------- ---------
Unallocated corporate
expenses (64,065)
Unallocated corporate other revenue 6,934
Profit before income tax 765,058
Income tax expense -
---------
Profit for the year 765,058
=========
ASSETS
Segment assets 5,173,015 1,544,498 79,164 6,796,677
Unallocated corporate
assets 1,513,451
---------
Total assets 8,310,128
=========
LIABILITIES
Segment liabilities (34,047) (17,655) (2,217) (53,919)
Unallocated corporate
liabilities (3,922)
---------
Total liabilities (57,841)
=========
OTHER INFORMATION
Additions to segment
non-current assets 213,099 149,881 - 362,980
============ ========= ========= =========
6 TURNOVER
Turnover represented the total invoiced value of goods supplied
to customers. The amount of each significant category of revenue
recognised in turnover is as follows:
Six months ended Year ended
31 December 30 June
2012 2011 2012
(unaudited) (unaudited) (audited)
RMB'000 RMB'000 RMB'000
Sales of oranges 600,194 644,278 1,057,327
Sales of self-bred saplings 1,608 2,235 3,344
Sales of processed fruits 290,243 396,903 715,473
892,045 1,043,416 1,776,144
=========== =========== ==========
7 OTHER INCOME
Six months ended Year ended
31 December 30 June
2012 2011 2012
(unaudited) (unaudited) (audited)
RMB'000 RMB'000 RMB'000
Interest income 30,152 6,451 21,559
Government grants 1,209 1,450 2,326
Sundry income 7 107 204
----------- ----------- ----------
31,368 8,008 24,089
=========== =========== ==========
8 PROFIT BEFORE INCOME TAX
Profit before income tax is stated after charging/(crediting)
the following:
Six months ended Year ended
31 December 30 June
2012 2011 2012
(unaudited) (unaudited) (audited)
RMB'000 RMB'000 RMB'000
(a) Finance costs
Bank charges 24 39 56
Finance charges on obligation
under finance lease - - 90
----------- ----------- ----------
24 39 146
----------- ----------- ----------
(b) Staff costs (including director's
emoluments
- Salaries, wages and other
benefits 69,433 56,039 97,880
- Share-based payments 14,072 25,811 45,812
- Contribution to defined contribution
retirement plans 1,214 1,150 2,635
----------- ----------- ----------
84,719 83,000 146,327
----------- ----------- ----------
(c) Other items
Amortisation of land use
rights 587 681 1,362
Amortisation of intangible
assets 6,509 4,805 9,781
Auditor's remuneration 1,217 1,200 2,390
Cost of agricultural produce
sold# 390,432 356,228 488,993
Cost of inventories of processed
fruits recognised as expenses## 212,120 280,914 494,750
Depreciation of property, plant
and
equipment 69,426 61,478 126,044
Add: Realisation of depreciation
previously capitalised
as
biological assets 23,423 21,821 21,822
Less: Amount capitalised
as
biological assets (15,865) (9,879) (25,955)
----------- ----------- ----------
76,984 73,420 121,911
Construction-in-progress written
off 1,560 - 3,351
Exchange (gain)/losses, net (3,548) 6,551 6,435
Operating lease expenses
- plantation base 6,416 6,365 9,394
- properties 610 630 1,115
Research and development costs 2,344 3,888 9,255
Loss on disposal of property,
plant
and equipment 85 259 4,828
Loss on disposal of land use
right 4,902 - -
=========== =========== ==========
# Cost of agricultural produce sold includes RMB96,189,000 (six
months ended 31 December 2011: RMB81,689,000, year ended 30 June
2012: RMB113,974,000) relating to staff costs, depreciation and
operating lease expenses, which amount is also included in the
respective total amount disclosed separately above for each of
these types of expenses.
## Cost of inventories of processed fruits recognised as
expenses includes RMB40,170,000 (six months ended 31 December 2011:
RMB30,097,000, year ended 30 June 2012: RMB67,667,000) relating to
staff costs, amortisation of land use rights, amortisation of
intangible assets and depreciation, which amount is also included
in the respective total amount disclosed separately above for each
of these types of expenses.
9 INCOME TAX EXPENSE
On the basis stated below, no income tax has been provided by
the Group:
(i) Pursuant to the rules and regulations of Bermuda, Cayman
Islands and the BVI, the Group is not subject to any income tax in
respective tax jurisdictions.
(ii) No Hong Kong profits tax has been provided as the Group did
not have assessable profits arising in or derived from Hong
Kong.
(iii) No PRC enterprise income tax has been provided for the
current period as the Group did not have assessable profit in the
PRC during the period. The provision for PRC enterprise income tax
is based on the respective applicable rates on the estimated
assessable income of the Group's subsidiaries in the PRC as
determined in accordance with the relevant income tax laws, rules
and regulations of the PRC.
According to the PRC tax law, its rules and regulations,
enterprises that engage in certain qualifying agricultural business
are eligible for certain tax benefits, including full enterprise
income tax exemption on profits derived from such business. Certain
operating subsidiaries of the Group in the PRC engaged in
qualifying agricultural business are entitled to full exemption of
enterprise income tax.
The applicable enterprise income tax rate of the Group's other
operating subsidiaries in the PRC is 25%.
(iv) PRC withholding income tax
Under the PRC tax law, profits of the Group's subsidiaries in
the PRC derived since 1 January 2008 is subject to withholding
income tax at rates of 5% or 10% upon the distribution of such
profits to foreign investors or companies incorporated in Hong
Kong, or for other foreign investors, respectively. Pursuant to the
grand fathering arrangements of the PRC tax law, dividends
receivable by the Group from its PRC subsidiaries in respect of the
undistributed profits derived prior to 31 December 2007 are exempt
from the withholding income tax. At 31 December 2012, no deferred
tax liabilities have been recognised in respect of the tax that
would be payable on the unremitted profits of the PRC subsidiaries
derived since 1 January 2008 as the Company is in a position to
control the dividend policies of the PRC subsidiaries and no
distribution of such profits is expected to be declared from the
PRC subsidiaries in the foreseeable future.
10 EARNINGS PER SHARE
The calculation of basic and diluted earnings per share is based
on the following:
Six months ended Year ended
31 December 30 June
2012 2011 2012
(unaudited) (unaudited) (audited)
(restated)
RMB'000 RMB'000 RMB'000
Earnings
Profit attributable to equity
shareholders of the Company
used in basic and diluted earnings
per share calculation 212,380 397,542 750,200
============= ============= =============
Weighted average number of '000 '000 '000
shares
Issued ordinary shares at beginning
of period/year 1,221,097 1,215,157 1,215,157
Effect of shares issued to
shareholders participating
in the scrip dividend - 51 4,741
Effect of shares upon exercise
of share options - 1,433 4,182
Effect of shares repurchased
and cancelled (3,393) (1,114) (3,640)
------------- ------------- -------------
Weighted average number of
ordinary shares used in basic
earnings per share calculation 1,217,704 1,215,527 1,220,440
Effect of dilutive potential
shares in respect of share
options 11,490 4,401 4,188
Weighted average number of
ordinary shares used in diluted
earnings per share calculation 1,229,194 1,219,928 1,224,628
============= ============= =============
11 DIVIDENDS
An interim dividend of RMB0.03 (six months ended 31 December
2011: RMB0.03) and a special dividend of RMB0.02 (six months ended
31 December 2011: RMB0.02) per share in respect of the six months
ended 31 December 2012 was declared after the end of the reporting
period. The interim and special dividends have not been recognised
as liabilities at the end of the reporting period.
Final dividend of RMB0.13 per ordinary share in respect of the
year ended 30 June 2012 was approved on 6 November 2012 and paid on
31 December 2012.
12 TRADE AND OTHER RECEIVABLES
Included in trade and other receivables are trade receivables
with the ageing analysis based on invoice date is as follows:
31 December 30 June
2012 2011 2012
(unaudited) (unaudited) (audited)
RMB'000 RMB'000 RMB'000
Less than 1 month 92,883 76,798 28,352
1 to 3 months 6,798 20,309 84
3 to 6 months - 26 291
6 to 12 months 9 18 -
Over 1 year 104 75 104
99,794 97,226 28,831
=========== =========== =========
Trade receivables from sales of goods are normally due for
settlement within 30 to 45 days from the date of billing, while
that from sales of property units are due for settlement in
accordance with the terms of the related sale and purchase
agreements.
The ageing analysis of trade receivables that are neither
individually nor collectively considered to be impaired is as
follows:
31 December 30 June
2012 2011 2012
(unaudited) (unaudited) (audited)
RMB'000 RMB'000 RMB'000
Neither past due nor impaired 97,457 88,022 27,529
----------- ----------- ---------
Less than 1 month past due 2,267 8,451 944
1 to 3 months past due - 645 6
3 to 6 months past due 9 10 291
6 to 12 months past due - 66 -
Over 1 year past due 61 32 61
Amount past due but not
impaired 2,337 9,204 1,302
----------- ----------- ---------
99,794 97,226 28,831
=========== =========== =========
Receivables that were neither past due nor impaired relate to a
wide range of customers for whom there was no recent history of
default.
Receivables that were past due but not impaired relate to a
number of independent customers that have a good track record with
the Group. Based on past experience, management believes that no
impairment allowance is necessary in respect of these balances as
there has not been a significant change in credit quality and the
balances are considered fully recoverable.
13 TRADE AND OTHER PAYABLES
The ageing analysis of trade payables by invoice date is as
follows:
31 December 30 June
2012 2011 2012
(unaudited) (unaudited) (audited)
RMB'000 RMB'000 RMB'000
Due within 3 months or on
demand 32,904 19,815 21,246
Due after 3 months but within
6 months 286 246 93
Due after 6 months but within
1 year 314 423 543
Due over 1 year 95 90 95
----------- ----------- ----------
33,599 20,574 21,977
=========== =========== ==========
14 FINANCIAL INFORMATION
The results announcement was approved by the Board on 26
February 2013. The interim financial information has been prepared
on a going concern basis in accordance with IAS 34, Interim
financial reporting. The accounting policies applied in preparing
the interim financial information are consistent with those adopted
and disclosed in the Group's consolidated financial statements for
the year ended 30 June 2012.
Other Information
DIVIDENDS
The Board declared the payment of an interim dividend of RMB0.03
and a special dividend of RMB0.02 per share for the six months
ended 31 December 2012. We believe that the declaration of the
interim and special dividend is in the interest of the shareholders
and allow our shareholders to share the successful results of the
Group.
The interim and special dividends will be paid in sterling or HK
Dollars on or before 12 April 2013 to shareholders that appear on
the Company's register of members at the close of business on the
record date of 15 March 2013, with an ex-dividend date of 14 March
2013 and 13 March 2013 on the HKEx and London Stock Exchange PLC,
respectively. The actual translation rate for the purpose of
dividend payment in sterling or HK Dollars will be determined by
reference to the exchange rate on 15 March 2013.
In order to qualify for receiving the interim and special
dividends, shareholders registered on the Hong Kong branch register
of the Company are reminded to ensure that all transfers of shares,
accompanied by the relevant share certificates and transfer forms,
must be lodged with the Company's branch share registrar in Hong
Kong, Computershare Hong Kong Investor Services Limited, at Shops
1712-1716, 17th Floor, Hopewell Centre, 183 Queen's Road East,
Wanchai, Hong Kong for registration not later than 4:30p.m. on 15
March 2013.
Purchase, Sale or Redemption of the Company's Listed
Securities
During the six months ended 31 December 2012, the Company
repurchased 10,649,000 ordinary shares of HK$0.01 on the HKEx at an
aggregate consideration of HK$38,387,280 before expenses. The
repurchased shares were subsequently cancelled. The repurchases
were effected by the Board for the enhancement of shareholder value
in the long term. Details of the repurchases are as follows:
Purchase consideration
Month of purchase No. of per share Aggregate
in the six months shares Highest Lowest consideration
ended 31 December 2012 purchased price paid price paid paid
HK$ HK$ HK$
July 1,131,000 4.40 3.99 4,741,450
November 9,518,000 3.67 3.21 33,645,830
---------- -------------
Total 10,649,000 38,387,280
========== =============
On 31 December 2012, 17,768,373 ordinary shares of HK$0.01 were
issued at the price of HK$3.774per share to shareholder
participating in the scrip dividend.
Saved as disclosed above, neither the Company nor any of its
subsidiaries had purchased, sold or redeemed any of the Company's
listed securities during the six months ended 31 December 2012.
Corporate Governance Code
During the six months ended 31 December 2012, the Directors,
where practicable, for an organisation of the Group's size and
nature sought to comply with the Combined Code. The Combined Code
is the key source of corporate governance recommendations for UK
listed companies. It consists of principles of good governance
covering the following areas: (i) Leadership; (ii) Effectiveness;
(iii) Accountability; (iv) Remuneration; and (v) Relations with
shareholders.
On 23 February 2012, the Company also adopted the code
provisions set out in Corporate Governance Code and Corporate
Governance Report ("CG Code") contained in amended Appendix 14 to
the Hong Kong Listing Rules which took effect on 1 April 2012 as
its additional code on corporate governance practices. The Company
has complied with the CG Code during the six months ended 31
December 2012 except the deviations set out below:
Code Provision A.2.1
The roles of Chairman and Chief Executive Officer are performed
by the same individual, Mr. Tong Wang Chow, and are not separated.
The Board meets regularly to consider issues related to corporate
matters affecting operations of the Group. The Board considers the
structure will not impair the balance of power and authority of the
Board and the Company's management and thus, the Board believes
this structure will enable effective planning and implementation of
corporate strategies and decisions.
Code Provision A.5.1
The Companies does not have the Nomination Committee. The
Directors does not consider that, given the size of the Group and
stage of its development, it is necessary to have a Nomination
Committee, however, this will be kept under regular review by the
Board. The Board as a whole regularly reviews the plans for orderly
succession for appointments to the Board and its structure, size
and composition. If the Board considers that it is necessary to
appoint new Director(s), it will set down the relevant appointment
criteria which may include, where applicable, the background,
experience, professional skills, personal qualities, availability
to commit to the affairs of the Company and, in case of Independent
Non-Executive Director, the independence requirements set out in
the Hong Kong Listing Rules from time to time. Nomination of new
Director(s) will normally be made by the Executive Directors and
subject to the Board's approval. External consultants may be
engaged, if necessary, to access a wider range of potential
candidate(s).
Compliance with the Model Code for Securities Transactions by
Directors of Listed Issuers
The Company has adopted a code for Directors' dealings
appropriate for a company whose shares are admitted to trading on
AIM and takes all reasonable steps to ensure compliance by the
Directors and any relevant employees. The Company also adopted the
Model Code for Securities Transactions by Directors of Listed
Issuers ("Model Code") set out in Appendix 10 to the HKEx Listing
Rules. The Directors have confirmed, following a specific enquiry
by the Company, that they have fully complied with the required
standard as set out in the Model Code throughout the period ended
31 December 2012.
Changes in Directorship and Other Changes in Directors'
Information
Changes in directorship during the six months ended 31 December
2012 are as follows:
Mr. Ip Chi Ming retired from the Non-executive Director of the
Company with effect from the conclusion of the annual general
meeting held on 6 November 2012.
Mr. Nicholas Smith will resign as an independent non-executive
director of the Company and will cease to be the Chairman of
remuneration committee and a member of the audit committee of the
Company with effect from 24March 2013.
The Board would like to express its gratitude to Mr. Ip Chi Ming
and Mr. Nicholas Smith for their contributions over the years.
REVIEW OF FINANCIAL STATEMENTS
The Audit Committee comprises three independent non-executive
directors. Mr. Ma Chiu Cheung, Andrew acts as Chairman of the
committee with Mr. Nicholas Smith and Mr. Yang Zhen Han act as
members. The arrangement of Audit Committee is in compliance with
Rule 3.21 of the HKEx Listing Rules.
The Audit Committee has reviewed with management the accounting
principles and practices adopted by the Group, and discussed
auditing, internal control and financial reporting matters
including the review of the Company's unaudited financial
statements for the six months ended 31 December 2012.
PUBLICATION OF INTERIM REPORT
The interim report will be published on the respective websites
of the Company (www.asian-citrus.com) under the investor relations
section and the Hong Kong Exchanges and Clearing Limited
(www.hkex.com.hk).
BY ORDER OF THE BOARD
Asian Citrus Holdings Limited
Tong Wang Chow
Chairman
Hong Kong, 26 February 2013
As at the date of this announcement, the board of directors of
the Company comprises five executive directors, namely Mr. Tong
Wang Chow, Mr. Tong Hung Wai, Tommy, Mr. Cheung Wai Sun, Mr. Pang
Yi and Mr. Sung Chi Keung; one non-executive director, namely Hon
Peregrine Moncreiffe and four independent non-executive directors,
namely Mr. Ma Chiu Cheung, Andrew, Mr. Nicholas Smith, Mr. Yang
Zhenhan and Dr. Lui Ming Wah, SBS JP.
This information is provided by RNS
The company news service from the London Stock Exchange
END
IR GUGDDDBDBGXL
Asian Citrus (LSE:ACHL)
Historical Stock Chart
From Jun 2024 to Jul 2024
Asian Citrus (LSE:ACHL)
Historical Stock Chart
From Jul 2023 to Jul 2024
