TIDMACHL
RNS Number : 8244M
Asian Citrus Holdings Ltd
21 September 2012
Friday 21 September 2012
Under embargo 7.00am
ANNOUNCEMENT OF THE ANNUAL RESULTS
FoR THE YEAR ENDED 30 JUNE 2012
The board of directors (the "Board") of Asian Citrus Holdings
Limited (the "Company" or "Asian Citrus") is pleased to announce
the consolidated results of the Company and its subsidiaries
(collectively, the "Group") for the year ended 30 June 2012.
Results Highlights
For illustration
Year ended 30 June only
Year ended 30 June
2012 2011 % change 2012 2011
(RMB m) (RMB m) (GBP m**) (GBP m**)
(restated) (restated)
Reported financial information
Revenue 1,776.1 1,412.6 +25.7 178.7 136.4
Gross profit 792.4 738.6 +7.3 79.7 71.3
EBITDA 876.7 1,134.8 -22.7 88.2 109.5
Profit attributable to
shareholders 750.2 1,039.0 -27.8 75.5 100.3
Basic EPS RMB0.62 RMB0.99 -37.4 6.2p 9.6p
Final Dividend RMB0.13 RMB0.10 +30.0 1.3p 1.0p
Special Dividend - RMB0.03 -100.0 - 0.3p
Interim and Special Dividends RMB0.05 RMB0.02 +150.0 0.5p 0.2p
Total Dividend RMB0.18 RMB0.15 +20.0 1.8p 1.4p
Core net profit#
EBITDA 755.6 674.8 +12.0 76.0 65.1
Net profit 629.1 579.0 +8.7 63.3 55.9
Basic EPS RMB0.52 RMB0.55 -5.5 5.2p 5.3p
** Conversion at GBP1 = RMB9.94 and RMB10.36 for the years ended
30 June 2012 and 2011 respectively for reference only
# Core net profits refers to profit for the year excluding net
gain on change in fair value of biological assets and share-based
payment. The Group's management considers this revised presentation
more appropriately reflects the performance of the core operations.
In order to conform to the current period's presentation, certain
comparative figures for prior reporting period have been
reclassified
-- Recommended final dividend of RMB0.13 (2011: RMB0.10) which
together with the interim and special dividends of RMB0.05 per
share, will make a total dividend of RMB0.18 (2011: RMB0.15) per
share for the full year ended 30 June 2012. This equates to
approximately 35.0% of the core net profit.
-- Increased core net profit by 8.7% to RMB629.1 million (2011:
RMB579.0 million) despitechallenges of heavier than usual rainfall
in South China and depressed prices for oranges and juice
concentrate.
-- Strong free cash flow of RMB471.4 million (2011: RMB50.7
million) and cash and cash equivalent of RMB2,388.1 million as at
30 June 2012.
-- Total orange production increased by 12.2% to 243,421 tonnes
due to increasing maturity of the orange trees.
-- Continued expansion of direct orange sales, now sold to 24
supermarket chains including one new international chain and a
national chain based in Guangxi.
-- Invested RMB458.3 million in Hunan Plantation and planted
approximately 1.0 million summer orange trees. Planting of an
additional 750,000 trees is scheduled for completion before end
of2013.
-- The two existing fruit processing plants are operating at
close to full capacity, a third 40,000 tonnes capacity plant is
expected to become operational in first quarter of 2013 with trial
production in December 2012.
-- Confident in ability to deliver business growth and shareholder value.
Tony Tong, Chairman, commented:
"Although China's economy is predicted to grow at a slower pace,
the market for oranges should remain generally stable as they are
regarded as a consumer product rather than a luxury good. Our main
challenge will be whether we can increase orange prices in a
slower-growth economy. I believe this will be possible starting in
the fourth quarter of 2012, due to the expected decrease in supply
of winter oranges resulting from this year's unstable weather as
well as the consistently high quality of our oranges.
For our fruit concentrates business, we will continue leveraging
on our experience and expertise developed in our plantation
business to achieve greater vertical integration and economies of
scale. We see excellent potential for this market, given the
growing demand for healthy food, rising household incomes and
increasing awareness of health issues amongst Chinese consumers. We
are always alert to expansion opportunities in the fruit processing
business, if the price is reasonable, and will consider adding
other fruit juice concentrates to our existing product lines in
order to capitalise on this market.
Our sound foundations augur well for our long-term success. We
are one of the world's very few listed plantation companies with
orange plantation assets and fruit processing facilities, operating
in a highly fragmented market with strong barriers to entry.
Despite the challenging circumstances we faced during the year, I
am as enthusiastic and confident as ever in our ability to deliver
business growth and shareholder value".
Asian Citrus
Eric Sung, Finance Director +852 2559 0323
Seymour Pierce Limited (NOMAD and
Joint Broker)
Jonathan Wright, Tom Sheldon +44 (0) 20 7107 8000
Richard Redmayne. Jackie 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
I am pleased to present the annual results of Asian Citrus
Holdings Limited (the "Company" or "Asian Citrus") and its
subsidiaries (collectively referred to as the "Group") for the year
ended 30 June 2012.
The past year was a challenging one for both our core plantation
business and our juice processing business, owing to heavier than
usual rainfall in South China and depressed prices for oranges and
juice concentrates. Although our performance was less than optimal,
I remain confident about our Company's ability to grow our business
and deliver exceptional shareholder value.
Financial Highlights
For the year ended 30 June 2012, the Group's total revenues
increased by approximately 25.7% from RMB1,412.6 million to
RMB1,776.1 million, while core net profit for the year increased by
approximately 8.7% from RMB579.0 million to RMB629.1 million.
Our two operating plantations contributed to a volume increase
of 12.2% in our plantation business. This was offset by a decrease
of 1.9% in the average selling prices of oranges, the first time we
have experienced a drop in orange prices. Reflecting the need to
apply additional fertiliser and pesticides for our summer oranges
during the heavy rains this year, operating profit from the
plantation business decreased by 1.9% from RMB463.4 million to
RMB454.7 million.
The year was also a challenging one for our fruit juice
concentrates business, Beihai Perfuming Garden Juice Co., Ltd.
("BPG"). Although BPG showed a 54.6% rise in operating profit from
RMB131.8 million to RMB203.7 million over the previous year, we
expected better contribution from this business as its operating
results were consolidated for a full 12 months in FY2012 compared
with only 7 months in FY2011. The reason for this unexpected
shortfall was primarily caused by a squeeze on margins in pineapple
juice concentrate, BPG's main product. During the year, average
selling prices for pineapple concentrate fell as a result of
destocking by Thai and Philippine producers - the world's two
largest producers of pineapple concentrate - and lower demand
amongst European consumers because of the financial crisis. We
anticipate that prices for pineapple concentrate will rise again by
the end of 2012 once the destocking has finished, although they are
unlikely to bounce back quickly to the high levels that prevailed
in 2011.
Operational Review
Asian Citrus currently owns three orange plantations occupying a
total area of around 103 square kilometres with 3.9 million planted
trees. Of these three plantations, two are in operation: the Hepu
Plantation in Guangxi Zhuang Autonomous Region ("Guangxi"), which
is essentially now operating at full maturity; and the Xinfeng
Plantation in Jiangxi Province, which is gradually approaching full
maturity and is expected to contribute towards a substantial and
steady increase in our overall orange supply over the coming few
years.
The Xinfeng Planation is planted with winter oranges trees,
whilst the Hepu Plantation is planted with both winter and summer
orange trees. We are continuing to replant certain existing winter
orange trees with new species of summer orange trees at the Hepu
Plantation.
The total winter orange crop yield from our operational
plantations was approximately 171,607 tonnes during the year,
representing an increase of approximately 19.4% over our total
winter orange crop yield of approximately 143,698 tonnes the year
before. As I previously mentioned, we are continuing to replace
certain existing winter orange trees with new species of summer
orange trees at the Hepu Plantation and thus there was less winter
orange production from the Hepu Plantation compared with the
previous year. The summer orange crop at our Hepu Plantation was
71,814 tonnes compared with 73,194 tonnes for the harvest at the
same time last year, representing a decrease of 1.9%. This small
decline was principally due to the unexpectedly heavy rainfall
during the harvest season which increased the wastage of the summer
crop. This is not indicative, however, of any downward trend in
production. The annual production volume from our two operating
plantations increased approximately 12.2% from 216,892 tonnes to
about 243,421 tonnes.
The first harvest from our third plantation in Hunan province,
which we started to develop in 2007, is expected to be in 2014.
This plantation will specialise in summer oranges with an extended
harvesting season. As at 30 June 2012, we had invested
approximately RMB458.3 million in this plantation and planted 1.0
million summer orange trees. Planting of an additional 750,000
trees at the Hunan plantation is scheduled for completion before
end of 2013.
In 2010, we acquired a 92.94% equity interest in BPG, which has
enabled us to diversify our revenue sources and potentially achieve
greater synergies through vertical integration. The existing plants
in Beihai city and Hepu county in Guangxi are currently operating
close to full capacity with an annual output of approximately
60,000 tonnes. To increase our overall production capacity, we are
building a third plant in Baise City, Guangxi, with an annual
output capacity of approximately 40,000 tonnes. Originally
scheduled to begin operating in the third quarter of 2012, trial
production is now planned in December 2012 and the plant is
expected to become operational in the first quarter of 2013.
Building our Brand
Since 2005, we have been selling our graded oranges under our
Royal Star brand directly to supermarket chains in China. These
branded oranges, because of their higher quality, are able to
command a premium price in the market.
I am proud to say that our Royal Star brand has been very well
received by our supermarket chain customers, whose number has
increased to 24 from the original 2 we began with in 2005. This is
up from 20 last year. We are continuing an aggressive expansion of
our distribution network in China for our Royal Star branded
oranges by seeking direct contracts with different supermarket
chains or, where more appropriate, gaining access to major domestic
and international supermarket chains through sizeable distributors.
I would like to highlight that recently we began selling our
branded summer oranges to a major international supermarket chain
and a national supermarket chain in Guangxi. As of this writing, we
are currently in negotiations to sell our branded winter oranges to
these customers' outlets in Guangdong and Zhejiang province as well
as in Shanghai. If successful, this will mark a tremendous
milestone in the development of Asian Citrus and the continuing
growth of our orange business as well as recognition for our Royal
Star brand in China.
Customers recognise the quality of our graded oranges, which
since 2008 have been certified under China's Organic Food Standard.
To achieve this standard, which is much more rigorous than other
food certifications, we must use pesticides and fertilisers
approved by the COFCC (China Organic Food Certification Center).
Both of our operating plantations have had their certifications
successfully renewed every year since we began receiving them four
years ago.
Corporate Governance
We are strongly committed to good corporate governance and seek
to be as transparent as possible with investors about our
operations. In addition to regular updates on sales orders and
harvest figures, we continue to provide new information on our
biological assets so that investors can better understand our
business.
During the year, we addressed a common concern that investors
have about forestry and plantation companies - how we account
accurately for our biological assets. To provide independent
confirmation to the market, we commissioned an independent third
party, with Nationwide Grade A Mapping and Surveying Qualification
and is officially qualified to undertake mapping and surveying
assignments in the PRC, to carry out an aerial survey of our
plantations. Using GPS and digital photography, the surveyor took
more than 50,000 digital photos of each operational plantation and
processed them with a sophisticated software programme to provide a
precise measurement of the land area occupied by our respective
plantations and an exact count of the number of orange trees in our
plantations.
I am pleased to confirm that the survey shows that the land area
occupied by our plantations and the number of trees in our
plantations are consistent with our records.
Enhancing Shareholder Value
We are in the fortunate position of being a cash rich company -
as of June 2012 we had RMB2.3 billion on hand - with no debt. In an
economic environment where credit continues to be very tight, this
gives us great flexibility in terms of how we grow and add value
for our shareholders.
We instituted a share repurchase programme in February of this
year where the repurchased shares are for cancellation. To date, we
have spent close to HK$60 million in share buybacks and have
repurchased about 1% of our outstanding share capital.
Consideration is being given as to how the execution of this
programme can be improved. After the close period ends on the
publication of the annual report, we will continue with the share
repurchase programme if the valuation on our shares continues to be
low. Under the Repurchasing Mandate from our Board, we may buy up
to a total of HK$250 million in outstanding shares, which will be
entirely funded from the internal resources of the Company.
Dividend
The Board recommends the payment of a final dividend of RMB0.13
for the financial year ended 30 June 2012. Together with the
interim and special dividends of RMB0.05 paid previously, this
equates to approximately 35.0% of the core net profit for the year
ended 30 June 2012 (2011: 31.5%). This represents an increase of
20% over last year's RMB0.15. The Board is committed to maintaining
a dividend payout ratio of at least 30% of core net profit.
The final dividend, if approved at the Annual General Meeting on
6 November 2012, will be paid in sterling or HK Dollars on or
before 31 December 2012, to shareholders on the register at the
close of business of 9 November 2012, with an ex-dividend date of 8
November 2012 and 7November 2012 on The Stock Exchange of Hong Kong
Limited ("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 13 November 2012.
The Company has decided to institute a Scrip Dividend Scheme
whereby shareholders will be offered the opportunity to elect to
receive the final dividend for the year ended 30 June 2012 in the
form of shares. A document providing further details of this Scrip
Dividend Scheme will be sent to shareholders in due course.
The Year Ahead
Although China's economy is predicted to grow at a slower pace,
the market for oranges should remain generally stable as they are
regarded as a consumer product rather than a luxury good. Our main
challenge will be whether we can increase orange prices in a
slower-growth economy. I believe this will be possible starting in
the fourth quarter of 2012, due to the expected decrease in supply
of winter oranges resulting from this year's unstable weather as
well as the consistently high quality of our oranges.
Our sound foundations augur well for our long-term success. We
are one of the world's very few listed plantation companies with
orange plantation assets and fruit processing facilities, operating
in a highly fragmented market dominated by small farmers. The
barriers to growth for these farmers are prohibitively high. In
addition to the cost of land and biological assets, the capital
expenditures required to operate a large, profitable plantation are
out of reach for most of our competitors - at our Hunan plantation
alone, the total investment is expected to be RMB585 million.
Our shareholders recognise that plantations do not offer an
immediate return. When trees are first planted, they do not begin
producing until the fourth year. A typical orange tree in year 4
yields only 8 kilogrammes of oranges; when it reaches maturity in
year 10, it will begin producing an average of 130 kilogrammes of
oranges for the next 15 years and decline slightly afterwards for
the remainder of its 35-year lifespan. As more orange trees come
on-stream at our three plantations, we can look forward to many
years of high productivity, high margins and high
profitability.
For our fruit concentrates business, we will continue leveraging
on our experience and expertise developed in our plantation
business to achieve greater vertical integration and economies of
scale. We see excellent potential for this market, given the
growing demand for healthy food, rising household incomes and
increasing awareness of health issues amongst Chinese consumers. We
are always alert to expansion opportunities in the fruit processing
business. If the price is reasonable, and will consider adding
other fruit juice concentrates to our existing product lines in
order to capitalise on this market.
Finally, on behalf of the Board, I would like to express my
heartfelt appreciation of our management team and employees for
their dedication and hard work which have contributed so much to
our growth at Asian Citrus. I would also like to take this
opportunity to thank all our shareholders, business partners and
investors for their continuing support. Despite the challenging
circumstances we faced during the year, I am as enthusiastic and
confident as ever in our ability to deliver business growth and
shareholder value.
Tony Tong
Chairman
21 September 2012
Management Discussion and Analysis
OPERATING PERFORMANCE
Revenue
The breakdown of revenue by types is as follows:
For the year ended 30 June
2012 2011
% of % of
RMB'000 total revenue RMB'000 total revenue
Hepu Plantation 593,454 33.4% 631,139 44.7%
Xinfeng Plantation 463,873 26.1% 330,988 23.4%
--------- ------------- --------- -------------
Sale of oranges 1,057,327 59.5% 962,127 68.1%
Sale of processed fruit 715,473 40.3% 417,393 29.5%
Sale of self-bred saplings 3,344 0.2% 6,903 0.5%
Sale of properties - - 26,198 1.9%
--------- ------------- --------- -------------
Total revenue 1,776,144 100.0% 1,412,621 100.0%
========= ============= ========= =============
The Group's revenue increased by 25.7% from RMB1,412.6 million
to RMB1,776.1 million for the year ended 30 June 2012.
Sale of oranges
Revenue from sale of oranges grew by 9.9% to RMB1,057.3 million
for the year ended 30 June 2012. This was achieved by an increase
of approximately 12.2% in the Group's production to 243,421 tonnes
but offset by 1.9% decrease in average selling price of the
Group.
The production yield from Hepu Plantation decreased by 5.7% to
116,720 tonnes for the year ended 30 June 2012 mainly due to the
ongoing replanting programme. During the year, 66,449 (2011: 63,584
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
significantly by 36.0% to 126,701 tonnes for the year ended 30 June
2012 from 93,181 tonnes in the comparable year.
The following table sets out the average selling prices of
oranges in different plantations:
Year ended 30 June
2008 2009 2010 2011 2012
(RMB/tonne) (RMB/tonne) (RMB/tonne) (RMB/tonne) (RMB/tonne)
Hepu Plantation
- Winter Oranges 3,089 3,470 3,567 3,922 4,085
- Summer Oranges 4,868 5,057 5,516 6,061 5,856
Xinfeng Plantation
- Winter Oranges 2,900 3,260 3,330 3,660 3,770
Unseasonably warm weather in winter time of 2011 resulted in an
unusually strong winter orange crop in China, and consequently a
short-term over supply of winter oranges to the market and direct
competition to the Group's summer oranges. As a result, the average
selling price of summer orange in Hepu Plantation was 3.4% lower
respectively year on year.
All of the Group's oranges were sold domestically. The Group's
customers from the sale 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 year ended 30 June
2012 2011
% of sale of oranges
Types of customers
Supermarket chains 34.8% 39.0%
Corporate customers 36.6% 30.5%
Wholesale customers 28.0% 30.0%
Other 0.6% 0.5%
------------- -------------
Total 100.0% 100.0%
============= =============
For the year ended 30 June 2012, the production volume and
revenue to supermarket chains represented approximately 29.5% and
34.8% respectively of the Group, compared to approximately 31.6%
and 39.0%respectively for the year ended 30 June 2011. As the
Xinfeng Plantation was still at the early stage, the oranges were
mainly sold to corporate and wholesale customers, thereby
negatively impacting the percentage of sale to supermarket
chains.
For the Hepu Plantation and Xinfeng Plantation, the production
volume sold to supermarkets was 39,423 tonnes and 32,347 tonnes for
the year ended 30 June 2012, compared to 46,156 tonnes and 22,324
tonnes for the year ended 30 June 2011 respectively. The decrease
of the production volume sold to supermarket in Hepu Planation was
mainly due to the short-term over supply of winter oranges to the
market and direct competition to the Group's summer oranges in Hepu
Plantation.
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 have to 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 our 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 year ended 30 June
2012 2011
% of sale of oranges
Types of oranges
Graded oranges 25.7% 30.7%
Ungraded oranges 74.3% 69.3%
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 negatively impacting the percentage of
sale of graded oranges.
Sale of processed fruits
The table sets out the volume and revenue from the sale of
processed fruits:
For the year ended 30 June
2012 2011
Volume Revenue Volume Revenue
(Tonnes) RMB'000 (Tonnes) RMB'000
Pineapple juice concentrates 24,348 271,650 16,636 222,283
Other fruit juice concentrates 10,017 162,239 4,017 87,340
Other Fruit purees 17,472 125,555 3,616 25,783
Frozen and dried fruits
and vegetables 18,170 119,087 9,634 81,987
70,007 678,531 33,903 417,393
Fruit juice trading N/A 36,942 - -
-------- ------- -------- -------
Total 70,007 715,473 33,903 417,393
======== ======= ======== =======
Beihai BPG processes over 22 different types of tropical fruits,
including pineapples, passion fruit, lychees, mangoes and papayas.
Only single products accounting for over 10% of the revenue from
the sale of processed fruits are shown separately in the table
above.
Revenue from the sale of processed fruits increased by 71.4% to
RMB715.5 million for the year ended 30 June 2012. It is mainly
attributable by the full year results of Beihai BPG which are
consolidated into the Group for the year ended 30 June 2012
compared to seven month results being consolidated into the Group
in last year follow by the completion of acquisition as of 30
November 2010.
The utilisation rate of two existing processing plants in Beihai
and Hepu is approximately 91.8% and 93.6% for the year ended 30
June 2012.
Beihai BPG currently generates most of its sales from the
People's Republic of China ("PRC") market, with key customers being
beverage mixers supplying major beverage groups.
Sale of self-bred saplings
For the year ended 30 June 2012, RMB3.3 million was recognised
from the sale of approximately 284,000 self-bred saplings to local
farmers.
Cost of sales
The breakdown of cost of sales of the Group is as follows:
For the year ended 30 June
2012 2011
% of % of
cost of sales cost of sales
of respective of respective
RMB'000 segment RMB'000 segment
Inventories used
Fertilisers 252,868 51.8% 193,713 50.8%
Packaging materials 40,420 8.3% 42,907 11.2%
Pesticides 54,844 11.2% 32,010 8.4%
------- -------------- ------- --------------
348,132 71.3% 268,630 70.4%
Production overheads
Direct labour 45,123 9.3% 37,140 9.7%
Depreciation 61,638 12.6% 50,498 13.2%
Others 33,250 6.8% 25,481 6.7%
------- -------------- ------- --------------
Cost of sales of oranges 488,143 100.0% 381,749 100.0%
------- ============== ------- ==============
Fruit 308,783 62.4% 205,920 74.8%
Packaging materials 34,103 6.9% 18,136 6.6%
Direct labour 26,169 5.3% 15,041 5.5%
Other production overheads 125,695 25.4% 36,196 13.1%
------- -------------- ------- --------------
Cost of sales of processed
fruits 494,750 100.0% 275,293 100.0%
------- ============== ------- ==============
Cost of sales of self-bred
saplings 850 3,235
Cost of sales of properties - 13,742
------- -------
Total 983,743 674,019
======= =======
The 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 sale
of oranges increased by 27.9% from RMB381.7 million to RMB488.1
million. The increase in production costs was mainly due to the
increase in raw materials utilised for 12.2% increase in the
production volume, slight increase in the average price of
fertiliser and higher consumption of pesticides and fertilisers due
to adverse weather conditions during the year.
The unit cost of production in the Hepu Plantation increased by
21.5% to approximately RMB1.81 per kg for the year ended 30 June
2012 (2011: RMB1.49 per kg) as a result of the decrease in
production volume of winter oranges due to ongoing replanting
programme and higher amount of fertilisers used as a result of the
heavy rainfall in the second quarter of 2012.
The unit cost of production in the Xinfeng Plantation slightly
increased by 2.8% to RMB2.18 per kg for the year ended 30 June 2012
(2011: RMB2.12 per kg) as a result of higher amount of pesticides
used andrelated expenses due to generally warmer weather in winter
time of 2011.
The combined unit cost of production increased by 14.2% to
RMB2.01 per kg from RMB1.76 per kg in the comparable period due to
higher contribution from Xinfeng Plantation with relatively higher
unit cost and increase in unit cost in Hepu Plantation.
Cost of sales of processed fruit mainly includes the costs of
fruit and packaging materials and other direct costs such as direct
labour and production overheads. For the six months ended 30 June
2012, the cost of processed fruits increased by 79.7% from RMB275.3
million to RMB494.8 million. The increase was mainly due to full
year results of Beihai BPG which are consolidated into the Group
for the year ended 30 June 2012 compared to seven month results of
Beihai BPG being consolidated into the Group in last year following
the completion of the acquisition as of 30 November 2010.
Gross profit
The Group's overall gross profit increased by 7.3% to
approximately RMB792.4 million for the year ended 30 June 2012
(2011: RMB738.6 million). The improvement in gross profit was due
to an increase in the production yield of the orange trees of 12.2%
and inclusion of the full year gross profit of Beihai BPG of
RMB220.7 million.
The overall gross profit margin decreased from 52.3% to 44.6%
for the year ended 30 June 2012 due to higher contribution from
processed fruits segment and Xinfeng Plantation which has a
relatively lower margin, decrease of gross profit margin of the
Hepu Plantation and decrease of gross profit margin of the
processed fruits segment.
The following table sets out a breakdown of the Group's gross
profit margin by plantation:
For the year ended 30 June
2012 2011
Hepu Plantation 64.3% 70.1%
Xinfeng Plantation 40.4% 40.2%
============= =============
The following table sets out a breakdown of the Group's gross
profit margin by business:
For the year ended 30 June
2012 2011
Sale of oranges 53.8% 60.3%
Sale of processed fruits 30.8% 34.0%
Sale of self-bred saplings 75.0% 53.1%
Sale of properties - 47.5%
------------- -------------
Overall gross profit margin 44.6% 52.3%
============= =============
The gross profit margin of the Hepu Plantation decreased to
approximately 64.3% (2011: 70.1%) due to the decrease of the
production volume of winter oranges from the ongoing replanting
programme, lower average selling price of summer oranges and higher
amount of fertilisers used as a result of the heavy rainfall in the
second quarter of 2012.
Despite better economies of scale being achieved, the gross
profit margin of Xinfeng Plantation only grew to 40.4% (2011:
40.2%) due to a higher amount of pesticides used and related
expenses as a result of generally warmer weather in winter time of
2011. Over the medium term, as the continuous growth in production
volume and better economies of scale, we expect the margin of the
Xinefeng Plantation to continue to improve.
Due to higher contribution from Xinfeng Plantation with a
relatively lower margin and the decrease in gross profit margin of
the Hepu Plantation, the overall gross profit margin from sales of
oranges dropped to approximately 53.8% (2011: 60.3%) for the year
ended 30 June 2012.
Beihai BPG processes over 22 different types of fruit with
different gross profit margins. The normalised gross profit margin
of Beihai BPG for the year ended 30 June 2012 decreased to 30.8%
compared to 34.0% in last year. This was mainly due to the
inclusion of the trading of fruit juice with minimal gross margin
at special request by customers during the year and lower selling
price of the pineapple juice concentrates as a result of the
decrease in prices in the international market.
Gain on change in fair value of biological assets
The Group recorded a gain of RMB166.9 million from net gain on
change in fair value of biological assets for the year ended 30
June 2012, compared to a gain of RMB507.7 million in last year. The
lower increase was mainly due to the fact that all the orange trees
in the Xinfeng Plantation became fruit bearing in the previous year
and there was substantially less infant trees becoming fruit
bearingin current year.
The net gain on change in fair value of biological assets does
not have any effect on the cash flow of the Group for the year
ended 30 June 2012.
Selling and distribution expenses
Selling and distribution expenses mainly comprise sales
commissions, advertising, salaries and welfare of sales personnel,
travelling and transportation expenses. The selling and
distribution expenses of the Group decreased from approximately
RMB63.3 million for the year ended 30 June 2011 to approximately
RMB60.6 million for the year ended 30 June 2012, representing an
decrease of 4.3%, mainly resulting from the decrease of the
production volume sold to supermarket from Hepu Plantation.
As a result, selling and distribution expenses represented 3.4%
of the Group's revenue, a decrease of 1.1 percentage points as
compared to 4.5% in last year.
General and administrative expenses
General and administrative expenses comprise mainly salary,
office administration expenses, depreciation, amortization, raw
material utilised for infant trees and research costs. The general
and administrative expenses of the Group were approximately
RMB157.6 million for the year ended 30 June 2012 (2011: RMB142.4
million), representing an increase of 10.7%. The increase was
mainly due to more expenses for the continued development of Hunan
Plantation and inclusion of the administrative expenses amounting
to RMB11.6 million of Beihai BPG.
General and administrative expenses represented 8.9% of the
Group's revenue, a decrease of 1.2 percentage points as compared to
10.1% in last year, demonstrating the Group's ability to control
the costs effectively during rapid business expansion.
Profit
The profit attributable to shareholders for the year ended 30
June 2012 decreased to approximately RMB750.2 million, compared to
approximately RMB1,039.0 million in last year, representing a
decrease of approximately 27.8%. The decrease in profit is mainly
due to lower increase in the net gain on change in fair value of
biological assets as all the orange trees in the Xinfeng Plantation
becoming fruit bearing in the previous year and there was
substantially less infant trees becoming fruit bearing in current
year.
The core net profit, which refers to profit for the year
excluding net gain on change in fair value of biological assets and
share-based payments, for the year ended 30 June 2012 was
approximately RMB629.1 million, compared to approximately RMB579.0
million in last year, representing an increase of approximately
8.7%. The increase was mainly attributable to the increase in
production volume of oranges and a full year results of Beihai BPG
consolidated into the Group during the year compared to seven month
results in corresponding period last year.
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. from age 0 to 3), are now
capitalised as additions to the relevant biological assets. In
prior years, these costs were expensed as incurred and included in
general and administrative expenses in profit or loss. The
management believes the new policy is preferable as it will provide
relevant and reliable information and more fairly reflects the
financial results of the Group's agricultural activities.
This change in accounting policy has been applied
retrospectively. The effects of the change in the consolidated
income statement for the year ended 30 June 2011 and in the
consolidated statements of financial position at 30 June 2011 and 1
July 2010 are set out in Note 4 to the Consolidated Financial
Statements.
FINAL AND SPECIAL DIVIDENDS
The Directors are pleased to recommend a final dividend of
RMB0.13 (2011: final dividend of RMB0.10 and special dividend of
RMB0.03) per share. The final dividend, together with the interim
and special dividend of RMB0.03 (2011:RMB0.02) and RMB0.02 (2011:
RMBNil) per share respectively, will make a total of RMB0.18 (2011:
RMB0.15) per share for the whole year ended 30 June 2012.
PRODUCTIVITY
The increasing maturity of the oranges trees together with
effective managerial planning and production supervision, have led
to productivity gains.
For the year ended 30 June
2012 2011
% of % of
Types of produce Tonnes Total output Tonnes total output
Winter oranges 171,607 70.5% 143,698 66.3%
Summer oranges 71,814 29.5% 73,194 33.7%
------- -------
Total 243,421 216,892
======= =======
The production volume of winter oranges increased to 171,607
tonnes for the year ended 30 June 2012, representing an increase of
19.4%. The production volume of winter oranges in Hepu Plantation
dropped from approximately 50,517 tonnes last year to approximately
44,906 tonnes in the current year, representing a decrease of
approximately 11.1%, which was due to the ongoing replanting
programme. In the year to 30 June 2011, 63,584 winter orange trees
were removed and replanted with the same number of the summer
orange trees.
In addition, the production volume of winter orange from the
Xinfeng Plantation increased from approximately 93,181 tonnes last
year to approximately 126,701 tonnes in the current year,
representing an increase of approximately 36.0% due to increased
maturity during the year.
The production volume of summer oranges decreased slightly to
71,814 tonnes for the year ended 30 June 2012 (2011: 73,194 tonnes)
due to the unusual heavy rainfall at the time of the harvesting
season.
CAPITAL STRUCTURE
As at 30 June 2012 there were 1,221,097,182 shares in issue.
Based on the closing price of HK$4.35 as at 30 June 2012, the
market capitalisation of the Company was approximately HK$5,311.8
million (GBP437.6 million).
HUMAN RESOURCES
There were a total of 1,692 employees of the Group as at 30 June
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
30 June 2012 30 June 2011
(restated)
Current ratio (x) 47.49 41.05
Quick ratio (x) 43.49 37.83
Asset turnover (x) 0.21 0.18
Core net profit per share (RMB) 0.52 0.55
Basic earnings per share (RMB) 0.62 0.99
Net debt to equity (%) Net cash Net cash
Liquidity
The current ratio and quick ratio was 47.49 and 43.49
respectively. The liquidity of the Group continues to be healthy
with sufficient reserves for both current operation and future
development.
Profitability
The asset turnover of the Group improved to 0.21 (2011: 0.18)
for the year ended 30 June 2012. The higher asset turnover was
mainly due to full year results of Beihai BPG being consolidated
into Group in current period compared to seven month results in
last corresponding period.
The basic earnings per share for the year ended 30 June 2012 was
RMB0.62 (2011: RMB0.99). This was because of the 35.5% decrease in
profit attributable to shareholders for the year and the dilution
effect from the issuance of new ordinary shares in FY2011. However,
the decrease in profit attributable to shareholders is mainly due
to a substantial decrease in the net gain on change in fair value
of biological assets as all the orange trees in the Xinfeng
Plantation became fruit bearing in the previous year and there was
substantially less infant trees becoming fruit bearing in current
year.
The core net profit per share for the six months ended 30 June
2012 was RMB0.52 (2011: RMB0.55).
Debt ratio
The net cash positions of the Group were RMB2,388.1 million and
RMB2,232.2 million at 30 June 2012 and 2011 respectively.
Internal cash resource
The Group's major internal cash resource is its cash and cash
equivalents. The effective interest rate for bank deposits during
the year ended 30 June 2012 is approximately 0.93% (2011: 0.35%)
per annum.
The Group did not have any outstanding bank borrowings as at 30
June 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 30 June 2012.
Capital commitments
As at 30 June 2012, the Group had capital commitments of
approximately RMB87.7 million mainly in relation to the
construction of the farmland infrastructure in the Hunan Plantation
and the new juicing plant in Baise 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 operation to which they related. 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.) at the Hepu Plantation in the Hepu
county of the Guangxi Zhuang Autonomous Region, approximately
56,000 mu (equivalent to approximately 37.3 sq.km.) at the Xinfeng
Plantation in the Xinfeng county of the Jiangxi province and
approximately 53,000 mu (equivalent to approximately 35.3 sq.km) at
the Hunan Plantation in the Dao county of the Hunan province.
Hepu Plantation
The Hepu Plantation is fully planted and comprises approximately
1.3 million orange trees of which approximately 1.1 million trees
were producing oranges during the current year. During the year,
66,449 winter orange trees were removed and the same number of
summer orange trees were replanted as part of the ongoing
replanting programme.
Xinfeng Plantation
The Xinfeng Plantation is fully planted and comprises 1.6
million winter orange trees and all of which are producing oranges
during the current year.
Hunan Plantation
The Hunan Plantation is still under development and comprises
approximately 1.0 million summer orange trees planted as at 30 June
2012. During the year ended 30 June 2012, approximately 622,000
summer orange trees were planted with approximately 750,000 summer
orange trees to be planted in the financial year ending 30 June
2013. By that time, the construction of Hunan Plantation is
expected to be completed.
The first batch of the 427,400 summer orange trees is expected
to begin trial production in the summer of 2014.
The below table sets out the age profile as at 30 June 2012 and
the production volume of the plantations for the year ended 30 June
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 66,449 - 622,475 - 688,924 -
1 63,584 - 427,400 - 490,984 -
2 64,194 - - - 64,194 -
3 81,261 - - - 81,261 -
4 76,135 877 - - 76,135 877
5 55,185 2,818 - - 55,185 2,818
15 29,996 2,955 - - 29,996 2,955
16 128,966 15,161 - - 128,966 15,161
17 186,003 21,133 - - 186,003 21,133
18 223,741 28,870 - - 223,741 28,870
975,514 71,814 1,049,875 - 2,025,389 71,814
Winner 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(*) 24,937 13,469 - - 24,937 13,469
16 10,133 1,524 - - 10,133 1,524
17 12,988 1,978 - - 12,988 1,978
316,615 44,906 1,600,000 126,701 1,916,615 171,607
Grand total 3,942,004 243,421
========= ===========
(*) Note: 66,449 winter orange trees (age: 15) were removed and
replanted with the same number of summer orange trees (age: 0)
during the year ended 30 June 2012.
The below table sets out the age profile as at 30 June 2011 and
the production volume of the plantations for the year ended 30 June
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 63,584 - 427,400 - 490,984 -
1 64,194 - - - 64,194 -
2 81,261 - - - 81,261 -
3 76,135 - - - 76,135 -
4 55,185 646 - - 55,185 646
14 29,996 2,775 - - 29,996 2,775
15 128,966 15,552 - - 128,966 15,552
16 186,003 23,676 - - 186,003 23,676
17 223,741 30,545 - - 223,741 30,545
909,065 73,194 427,400 - 1,336,465 73,194
Winner 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)
4 - - 400,000 3,600 400,000 3,600
5 - - 400,000 23,200 400,000 23,200
6 46,077 1,935 400,000 28,800 446,077 30,735
8 180,180 17,742 400,000 37,581 580,180 55,323
9 42,300 4,221 - - 42,300 4,221
14(*) 91,386 23,107 - - 91,386 23,107
15 10,133 1,536 - - 10,133 1,536
16 12,988 1,976 - - 12,988 1,976
383,064 50,517 1,600,000 93,181 1,983,064 143,698
Grand total 3,319,529 216,892
========= ===========
(*) Note: 63,584 winter orange trees (age: 14) were removed and
replanted with the same number of summer orange trees (age: 0)
during the year ended 30 June 2011.
VALUATION OF BIOLOGICAL ASSETS
The Group has engaged an independent valuer to determine the
fair value of the orange trees less costs to sell as at 30 June
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 assets (including plantation related
machinery and equipment and land improvements) from theappraised
value which are employed in the operation of the Group's
plantations. The independent valuer conducted inspections of the
plantations in connection with the valuation exercise of the
Group's orange trees.
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 year ended 30 June 2012 was
18.0% (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, the yield
per tree increases from age 3 to 10, remains stable for about 22
years, and then decreases until age 32. An agricultural consultant
of the independent valuer estimates that the yield per tree based
on field inspection of general growth conditions of orange trees
and average yield data of typical orange plantations in the
PRC.
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 RMB3,310 per tonne, RMB5,200 per tonne and RMB3,730 per tonne,
respectively, for the year ended 30 June 2012 and RMB3,230 per
tonne, RMB5,300 per tonne and RMB3,660 per tonne, respectively, for
the year ended 30 June 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 gain from changes in fair value of
orange trees less estimated point-of-sale costs. The following
table illustrates the sensitivity of the Group's gain from changes
in fair value of orange tree less estimated point-of-sale costs to
increases or decreases by 100 basis points in the discount rate of
18.0% applied by the independent valuer for the year ended 30 June
2012:
100 basis points 100 basis points
Decrease Base Case Increase
Discount rate 17.0% 18.0% 19.0%
Net gain on change in fair
value of biological assets
(RMB'000) 339,900 166,900 7,900
2) Changes in the yield per orange tree can also result in
significant fluctuations in gain from changes in fair value of
orange trees less estimated point-of-sale costs. The following
table illustrates the sensitivity of the Group's gain from changes
in fair value of orange trees less estimated point-of-sale costs to
a 5.0% increase or decrease in the yield per tree applied for the
year ended 30 June 2012:
5.0% Decrease Base Case 5.0% Increase
Net (loss)/gain on change
in fair value of biological
assets (RMB'000) (10,100) 166,900 344,900
3) Changes in assumed market prices of the oranges can also
result in significant fluctuations in gain from changes in fair
value of orange trees less estimated point-of-sale costs. The
following table illustrates the sensitivity of the Group's gain
from changes in fair value of orange trees less estimated
point-of-sale costs to a 5.0% increase or decrease in the assumed
market prices of oranges as at 30 June 2012 used to calculate gain
from changes in fair value of orange trees less estimated
point-of-sale costs for the year ended 30 June 2012:
5.0% Decrease Base Case 5.0% Increase
Net (loss)/gain on change
in fair value of biological
assets (RMB'000) (188,100) 166,900 522,900
4) Changes in the assumed direct production costs can also
result in significant fluctuations in gain from changes in fair
value of orange trees less estimated point-of-sale costs. The
following table illustrates the sensitivity of the Group's gain
from changes in fair value of orange trees less estimated
point-of-sale costs to a 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 estimated point-of-sale costs
for the year ended 30 June 2012:
5.0% Decrease Base Case 5.0% Increase
Net gain/(loss) on change
in fair value of biological
assets (RMB'000) 355,900 166,900 (34,100)
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 30 June 2012 was estimated to be
approximately RMB2,226 million (2011: RMB2,045 million).
Consolidated Income Statement
For the year ended 30 June 2012
2012 2011
Note RMB'000 RMB'000
(restated)
Turnover 5 1,776,144 1,412,621
Cost of sales (983,743) (674,019)
--------- ----------
Gross profit 792,401 738,602
Other income 24,089 9,787
Net gain on change in fair value of biological
assets 166,900 507,712
Selling and distribution expenses (60,579) (63,314)
General and administrative expenses (157,607) (142,372)
--------- ----------
Profit from operations 765,204 1,050,415
Finance costs (146) (177)
--------- ----------
Profit before income tax 7 765,058 1,050,238
Income tax expense 8 - (1,785)
--------- ----------
Profit for the year 765,058 1,048,453
========= ==========
Attributable to
Equity shareholders of the Company 750,200 1,038,953
Non-controlling interest 14,858 9,500
--------- ----------
765,058 1,048,453
========= ==========
RMB RMB
(restated)
Earnings per share 9
- Basic 0.615 0.988
========= ==========
- Diluted 0.613 0.983
========= ==========
Consolidated Statement of Comprehensive Income
For the year ended 30 June 2012
2012 2011
RMB'000 RMB'000
(restated)
Profit for the year 765,058 1,048,453
Other comprehensive (expense)/income for the
year
Exchange differences on translation of financial
statements of foreign operations, net of nil
tax (636) 901
Total comprehensive income for the year 764,422 1,049,354
======= ==========
Attributable to
Equity shareholders of the Company 749,564 1,039,854
Non-controlling interest 14,858 9,500
764,422 1,049,354
======= ==========
Consolidated Statement of Financial Position
At 30 June 2012
30 June 30 June 1 July
2012 2011 2010
RMB'000 RMB'000 RMB'000
Note (restated) (restated)
ASSETS
Non-current assets
Property, plant and equipment 1,835,518 1,638,339 1,161,437
Land use rights 68,527 69,889 54,841
Construction-in-progress 178,302 70,611 64,328
Biological assets 2,305,224 2,086,497 1,551,803
Intangible assets 58,506 53,287 36,800
Deposits 4,251 114,500 -
Goodwill 1,157,261 1,157,261 -
---------- ----------- -----------
5,607,589 5,190,384 2,869,209
---------- ----------- -----------
Current assets
Biological assets 158,636 145,561 90,221
Properties for sale 5,830 5,830 18,497
Inventories 63,094 46,407 841
Trade and other receivables 11 86,865 96,503 19,629
Cash and cash equivalents 2,388,114 2,232,203 975,074
---------- ----------- -----------
2,702,539 2,526,504 1,104,262
---------- ----------- -----------
Total assets 8,310,128 7,716,888 3,973,471
========== =========== ===========
30 June 30 June 1 July
2012 2011 2010
RMB'000 RMB'000 RMB'000
Note (restated) (restated)
EQUITY AND LIABILITIES
Equity
Share capital 12,083 12,030 8,767
Reserves 8,138,036 7,554,963 3,912,925
------------ ------------ ------------
Total equity attributable to
equity
shareholders of the Company 8,150,119 7,566,993 3,921,692
Non-controlling interest 102,168 87,310 -
------------ ------------ ------------
8,252,287 7,654,303 3,921,692
------------ ------------ ------------
Non-current liabilities
Obligation under finance lease 937 1,034 -
------------ ------------ ------------
Current liabilities
Trade and other payables 12 56,807 58,461 44,391
Due to a related party - 3,000 7,110
Obligation under finance lease 97 90 -
Income tax payable - - 278
------------ ------------ ------------
56,904 61,551 51,779
------------ ------------ ------------
Total liabilities 57,841 62,585 51,779
------------ ------------ ------------
Total equity and liabilities 8,310,128 7,716,888 3,973,471
============ ============ ============
Net current assets 2,645,635 2,464,953 1,052,483
============ ============ ============
Total assets less current liabilities 8,253,224 7,655,337 3,921,692
============ ============ ============
Consolidated Cash Flow Statement
For the year ended 30 June 2012
2012 2011
RMB'000 RMB'000
(restated)
Cash flows from operating activities
Profit before income tax 765,058 1,050,238
Adjustments for:
Interest income (21,559) (7,308)
Finance costs 146 177
Depreciation 126,044 94,830
Share-based payments 45,812 47,715
Amortisation of land use rights 1,362 1,312
Amortisation of intangible assets 9,781 5,562
Loss on disposal of property, plant and equipment 4,828 148
Net gain on change in fair value of biological
assets (166,900) (507,712)
-------- ----------
Operating profit before working capital changes 764,572 684,962
Movements in working capital elements:
Properties for sale - 12,667
Inventories (16,687) (23,979)
Biological assets (13,075) (55,340)
Trade and other receivables 25,150 34,885
Trade and other payables (2,290) (10,623)
Due to a related party (3,000) (4,110)
-------- ----------
Cash generated from operations 754,670 638,462
Income tax paid - (2,063)
-------- ----------
Net cash generated from operating activities 754,670 636,399
-------- ----------
Cash flows from investing activities
Proceeds from disposal of property, plant and
equipment 6,258 46
Purchase of property, plant and equipment (38,098) (8,832)
Additions to construction-in-progress (305,115) (201,976)
Deposits paid for acquisition of property,
plant and equipment (4,050) (21,538)
Net addition to biological assets (51,827) (26,982)
Additions to intangible assets (15,000) (6,600)
Decrease/(increase) in time deposits with terms
over three months 103,040 (166,000)
Interest received 21,559 7,308
Acquisition of subsidiaries - (161,083)
-------- ----------
Net cash used in investing activities (283,233) (585,657)
2012 2011
RMB'000 RMB'000
(restated)
Cash flows from financing activities
Proceeds from issue of new shares from placement,
net of shares issuance costs - 1,284,621
Proceeds from issue of new shares upon exercise
of share options 12,457 30,893
Obligation under finance lease (90) 1,124
Repayment of amount due to a shareholder - (213,788)
Dividends paid (177,848) (62,286)
Repurchase of shares (46,859) -
Finance costs paid (146) (177)
--------- ----------
Net cash (used in)/generated from financing
activities (212,486) 1,040,387
--------- ----------
Net increase in cash and cash equivalents 258,951 1,091,129
Cash and cash equivalents at beginning of year 2,066,203 975,074
--------- ----------
Cash and cash equivalents at end of year 2,325,154 2,066,203
========= ==========
Major non-cash transactions
During the year, purchase of property, plant and equipment
included an amount of RMB98,787,000 (2011: RMBNil) transferred from
non-current deposits, and additions to construction-in-progress
included an amount of RMBNil (2011: RMB47,388,000) transferred from
non-current deposits.
Notes To The Consolidated Financial Statements
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 HKEx, AIM of the London Stock Exchange
and PLUS Markets plc.
The address of the Company's registered office 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 SIGNIFICANT ACCOUNTING POLICIES
a) Statement of compliance
These consolidated financial statements have been prepared in
accordance with all applicable International Financial Reporting
Standards ("IFRSs"), which comprise International Financial
Reporting Standards, International Accounting Standards ("IAS") and
Interpretations, issued by the International Accounting Standards
Board ("IASB") and the International Financial Reporting
Interpretations Committee, and the disclosure requirements of the
Hong Kong Companies Ordinance. The consolidated financial
statements also comply with the applicable disclosure provisions of
the Rules Governing the Listing of Securities on the HKEx and the
AIM Rules.
The IASB has issued certain new and revised IFRSs that are first
effective or available for early adoption for the current
accounting period of the Group. Note 3 provides information on any
changes in accounting policies resulting from initial application
of these developments to the extent that they are relevant to the
Group for the current and prior accounting periods reflected in
these consolidated financial statements.
b) Basis of preparation of the consolidated financial statements
These consolidated financial statements are presented in
Renminbi ("RMB"), the functional currency of the Group, rounded to
the nearest thousand, unless otherwise stated. They have been
prepared under the historical cost convention, as modified by the
revaluation of certain biological assets which are carried at their
fair values.
The preparation of consolidated financial statements in
conformity with IFRSs requires management to make judgements,
estimates and assumptions that affect the application of policies
and reported amounts of assets, liabilities, income and expenses.
The estimates and associated assumptions are based on historical
experience and various other factors that are believed to be
reasonable under the circumstances, the results of which form the
basis of making the judgements about carrying values of assets and
liabilities that are not readily apparent from other sources.
Actual results may differ from these estimates.
The estimates and underlying assumptions are reviewed on an
ongoing basis. Revisions to accounting estimates are recognised in
the period in which the estimate is revised if the revision affects
only that period, or in the period of the revision and future
periods if the revision affects both current and future
periods.
3 APPLICATIONs OF NEW AND REVISED IFRSs
The IASB has issued one new IFRS, a number of amendments to
IFRSs and new Interpretations 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 consolidated
financial statements:
-- Amendments to IFRSs contained in improvements to IFRS
(2010)
-- Amendments to IFRS 7, Disclosures - Transfers of financial
assets
-- IAS 24 (Revised 2009), Related party disclosures
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 consolidated financial statements.
Up to the date of issue of the consolidated financial
statements, the IASB has issued a number of amendments, new
standards and interpretations which are not yet effective for the
year ended 30 June 2012 and which have not been adopted in the
consolidated financial statements. Of these developments, the
following relate to matters that may be relevant to the Group's
operations and consolidated financial statements:
Improvements to Annual improvements to IFRSs 2009 - 2011
IFRSs cycle(3)
IFRS 7 (Amendments) Disclosures - Offsetting financial assets
and financial liabilities(3)
Disclosures - Mandatory effective date
of IFRS 9 and transition disclosures(5)
IFRS 9 Financial instruments(5)
IFRS 10 Consolidated financial statements(3)
IFRS 12 Disclosure of interests in other entities(3)
IFRS 13 Fair value measurement(3)
IAS 1 (Amendments) Presentation of financial statements -
Presentation of items of other comprehensive
income(2)
IAS 12 (Amendments) Income taxes - Deferred tax: Recovery
of underlying assets(1)
IAS 27 (2011) Separate financial statements(3)
IAS 32 (Amendments) Presentation offsetting financial assets
and financial liabilities(4)
(1) Effective for annual periods beginning on or after 1 January
2012.
(2) Effective for annual periods beginning on or after 1 July
2012.
(3) Effective for annual periods beginning on or after 1 January
2013.
(4) Effective for annual periods beginning on or after 1 January
2014.
(5) Effective for annual periods beginning on or after 1 January
2015.
The Group is in the process of making an assessment of what the
impact of these amendments and new standards is expected to be in
the period of initial application. So far it has concluded that
their adoption is unlikely to have a significant impact on the
Group's results or 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. from age 0 to 3), are now
capitalised as additions to the relevant biological assets. In
prior years, these costs were expensed as incurred and included in
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.
This change in accounting policy has been applied
retrospectively. The effects of the change in the consolidated
income statement for the year ended 30 June 2011 and in the
consolidated statements of financial position at 30 June 2011 and 1
July 2010 are set out below.
Consolidated income statement for the year ended 30 June
2011
Effect of
2011 change in
accounting
policy
(as previously 2011
reported)
(as restated)
RMB'000 RMB'000 RMB'000
Turnover 1,412,621 - 1,412,621
Cost of sales (674,019) - (674,019)
---------------- ------------ ---------------
Gross profit 738,602 - 738,602
Other income 9,787 - 9,787
Net gain on change in fair value
of biological assets 598,000 (90,288) 507,712
Selling and distribution expenses (63,314) - (63,314)
General and administrative expenses (161,621) 19,249 (142,372)
---------------- ------------ ---------------
Profit from operations 1,121,454 (71,039) 1,050,415
Finance costs (177) - (177)
---------------- ------------ ---------------
Profit before income tax 1,121,277 (71,039) 1,050,238
Income tax expense (1,785) - (1,785)
---------------- ------------ ---------------
Profit for the year 1,119,492 (71,039) 1,048,453
================ ============ ===============
Attributable to
Equity shareholders of the Company 1,109,992 (71,039) 1,038,953
Non-controlling interest 9,500 - 9,500
---------------- ------------ ---------------
1,119,492 (71,039) 1,048,453
================ ============ ===============
Earnings per share RMB RMB RMB
- Basic 1.056 (0.068) 0.988
================ ============ ===============
- Diluted 1.050 (0.067) 0.983
================ ============ ===============
Consolidated statement of financial
position as at 30 June 2011
Effect of
30 June change in
2011 accounting
policy
(as previously 30 June
reported) 2011
(as restated)
RMB'000 RMB'000 RMB'000
ASSETS
Non-current assets
Property, plant and equipment 1,638,339 - 1,638,339
Land use rights 69,889 - 69,889
Construction-in-progress 70,611 - 70,611
Biological assets 2,055,298 31,199 2,086,497
Intangible assets 53,287 - 53,287
Deposits 114,500 - 114,500
Goodwill 1,157,261 - 1,157,261
------------------ ------------ ---------------
5,159,185 31,199 5,190,384
------------------ ------------ ---------------
Current assets
Biological assets 145,561 - 145,561
Properties for sale 5,830 - 5,830
Inventories 46,407 - 46,407
Trade and other receivables 96,503 - 96,503
Cash and cash equivalents 2,232,203 - 2,232,203
------------------ ------------ ---------------
2,526,504 - 2,526,504
------------------ ------------ ---------------
Total assets 7,685,689 31,199 7,716,888
================== ============ ===============
EQUITY AND LIABILITIES
Equity
Share capital 12,030 - 12,030
Reserves 7,523,764 31,199 7,554,963
------------------ ------------ ---------------
Total equity attributable to
equity shareholders of the Company 7,535,794 31,199 7,566,993
Non-controlling interest 87,310 - 87,310
------------------ ------------ ---------------
7,623,104 31,199 7,654,303
------------------ ------------ ---------------
Non-current liability
Obligation under finance lease 1,034 - 1,034
------------------ ------------ ---------------
Current liabilities
Trade and other payables 58,461 - 58,461
Due to a related party 3,000 - 3,000
Obligation under finance lease 90 - 90
------------------ ------------ ---------------
61,551 - 61,551
------------------ ------------ ---------------
Total liabilities 62,585 - 62,585
================== ============ ===============
Total equity and liabilities 7,685,689 31,199 7,716,888
================== ============ ===============
Net current assets 2,464,953 - 2,464,953
================== ============ ===============
Total assets less current liabilities 7,624,138 31,199 7,655,337
================== ============ ===============
Consolidated statement of financial
position as at 1 July 2010
Effect of
1 July 2010 change in
accounting
policy
(as previously 1 July 2010
reported)
(as restated)
RMB'000 RMB'000 RMB'000
ASSETS
Non-current assets
Property, plant and equipment 1,161,437 - 1,161,437
Land use rights 54,841 - 54,841
Construction-in-progress 64,328 - 64,328
Biological assets 1,449,565 102,238 1,551,803
Intangible assets 36,800 - 36,800
------------------ ------------ ---------------
2,766,971 102,238 2,869,209
------------------ ------------ ---------------
Current assets
Biological assets 90,221 - 90,221
Properties for sale 18,497 - 18,497
Inventories 841 - 841
Trade and other receivables 19,629 - 19,629
Cash and cash equivalents 975,074 - 975,074
------------------ ------------ ---------------
1,104,262 - 1,104,262
------------------ ------------ ---------------
Total assets 3,871,233 102,238 3,973,471
================== ============ ===============
EQUITY AND LIABILITIES
Equity
Share capital 8,767 - 8,767
Reserves 3,810,687 102,238 3,912,925
------------------ ------------ ---------------
Total equity attributable to
equity shareholders of the Company 3,819,454 102,238 3,921,692
------------------ ------------ ---------------
Current liabilities
Trade and other payables 44,391 - 44,391
Due to a related party 7,110 - 7,110
Income tax payable 278 - 278
------------------ ------------ ---------------
51,779 - 51,779
------------------ ------------ ---------------
Total equity and liabilities 3,871,233 102,238 3,973,471
================== ============ ===============
Net current assets 1,052,483 - 1,052,483
================== ============ ===============
Total assets less current liabilities 3,819,454 102,238 3,921,692
================== ============ ===============
5 TURNOVER
Turnover represented the total invoiced value of goods supplied
to customers and completed property units delivered to buyers. The
amount of each significant category of revenue recognised in
turnover is as follows:
2012 2011
RMB'000 RMB'000
Sales of oranges 1,057,327 962,127
Sales of self-bred saplings 3,344 6,903
Sales of processed fruits 715,473 417,393
Sales of property units - 26,198
1,776,144 1,412,621
========= =========
6 SEGMENT INFORMATION
The Group manages its business 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
three reportable segments. The segments are managed separately as
each business offers different products and requires different
business strategies. The following summary describes the operations
in each of the Group's reportable segment:
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
No inter-segment transactions incurred within the Group
companies.
No customer accounted for 10% or more of the total revenue for
the both years.
As majority of the Group's non-current assets and revenue are
located in/derived from the PRC, geographical information is not
presented.
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.
Agricultural
produce Processed fruits Others Total
2012 2011 2012 2011 2012 2011 2012 2011
RMB'000 RMB'000 RMB'000 RMB'000 RMB'000 RMB'000 RMB'000 RMB'000
(restated) (restated)
RESULTS
Reportable segment
revenue and revenue
from external customers 1,060,671 969,030 715,473 417,393 - 26,198 1,776,144 1,412,621
Reportable segment
results 621,600 971,153 203,714 131,845 (3,125) 6,035 822,189 1,109,033
--------- ---------- --------- --------- ------- -------
Unallocated corporate
expenses (64,065) (63,073)
Unallocated corporate
other revenue 6,934 4,278
Profit before income
tax 765,058 1,050,238
Income tax expense - (1,785)
Profit for the year 765,058 1,048,453
========= ==========
ASSETS
Segment assets 5,173,015 4,339,682 1,544,498 1,341,034 79,164 158,962 6,796,677 5,839,678
Unallocated corporate
assets 1,513,451 1,877,210
Total assets 8,310,128 7,716,888
--------- ----------
LIABILITIES
Segment liabilities (34,047) (40,244) (17,655) (17,268) (2,217) (2,687) (53,919) (60,199)
Unallocated corporate
liabilities (3,922) (2,386)
Total liabilities (57,841) (62,585)
========= ==========
OTHER INFORMATION
Additions to segment
non-current assets 213,099 236,521 149,881 28,197 - - 362,980 264,718
Amortisation of
land use rights - - 120 70 1,054 1,054 1,174 1,124
Amortisation of
intangible assets 7,760 4,383 2,021 1,179 - - 9,781 5,562
Depreciation 78,252 62,468 42,683 21,320 701 702 121,636 84,490
Loss/(gain) on disposal
of property, plant
and equipment 7 (46) 4,819 152 - - 4,826 106
Construction-in-progress
written off - - 3,351 - - - 3.351 -
Interest income 8,618 2,740 - 1,694 329 300 8,947 4,734
Finance charges
on obligation under
finance lease 90 96 - - - - 90 96
Net gain on change
in fair value of
biological assets 166,900 507,712 - - - - 166,900 507,712
Share-based payments 9,952 19,569 27,400 11,172 - - 37,352 30,741
========= ========== ========= ========= ======= ======= ========= ==========
7 PROFIT BEFORE INCOME TAX
Profit before income tax is stated after charging/(crediting)
the following:
2012 2011
RMB'000 RMB'000
(a) Finance costs
Bank charges 56 81
Finance charges on obligation under
finance lease 90 96
------- -------
146 177
======= =======
(b) Staff costs (including directors'
emoluments)
- salaries, wages and other benefits 97,880 73,498
- share-based payments 45,812 47,715
- contributions to defined contribution
retirement plans 2,635 1,561
------- -------
146,327 122,774
======= =======
(c) Other items
Amortisation of land use rights 1,362 1,312
Amortisation of intangible assets 9,781 5,562
Auditor's remuneration 2,390 1,755
Cost of agricultural produce sold(#) 488,993 384,984
Cost of property units sold - 13,742
Cost of inventories of processed
fruits
recognised as expenses(##) 494,750 275,293
Depreciation of property, plant and
equipment 126,044 94,830
Add: Realisation of depreciation
previously capitalised as biological
assets 21,822 12,746
Less: Amount capitalised as biological
assets (25,955) (22,796)
------- -------
121,911 84,780
Construction-in-progress written
off 3,351 -
Exchange losses, net 6,435 10,475
Operating lease expenses
- plantation base 9,394 8,641
- properties 1,115 941
Research and development costs 9,255 8,164
Loss on disposal of property, plant
and equipment 4,828 148
======= =======
(#) Cost of agricultural produce sold includes RMB113,974,000
(2011: RMB96,330,000) 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 RMB67,667,000 (2011: RMB35,615,000) 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.
8 INCOME TAX EXPENSE
Income tax expense in the consolidated income statement
represents:
2012 2011
RMB'000 RMB'000
Current tax
PRC enterprise income tax
- Provision for the year - 983
PRC land appreciation tax
- Provision for the year - 802
------- -------
- 1,785
======= =======
i) Pursuant to the rules and regulations of Bermuda, Cayman
Islands and the British Virgin Islands ("BVI"), the Group is not
subject to any income tax in Bermuda, Cayman Islands and the
BVI.
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 2012 as
the Group did not have assessable profit in the PRC during the
year. The provision for PRC enterprise income tax for 2011 was
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 land appreciation tax is levied at progressive rates
ranging from 30% to 60% on the appreciation of land value, being
the proceeds of sales of properties less deductible expenses
including costs for land use rights and all property development
expenses.
v) 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
grandfathering 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 30 June 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.
9 EARNINGS PER SHARE
The calculation of the basic and diluted earnings per share is
based on the following:
2012 2011
RMB'000 RMB'000
Earnings
Profit attributable to equity shareholders
of the Company used in basic and diluted earnings
per share calculation 750,200 1,038,953
========= =========
Weighted average number of shares '000 '000
Issued ordinary shares at beginning of year 1,215,157 852,650
Effect of shares issued to shareholders participating
in the scrip dividend 4,741 3,650
Effect of shares issued upon exercise of share
options 4,182 11,352
Effect of shares issued as part of the consideration
for acquisition of subsidiaries - 95,344
Effect of shares issued upon placement - 88,219
Effect of shares repurchased and cancelled (3,640) -
Weighted average number of ordinary shares
used in basic earnings per share calculation 1,220,440 1,051,215
Effect of dilutive potential shares in respect
of share options 4,188 6,044
Weighted average number of ordinary shares
used in diluted earnings per share calculation 1,224,628 1,057,259
========= =========
10 Dividends
(i) Dividends payable to equity shareholders of the Company attributable to the year
2012 2011
RMB'000 RMB'000
Interim dividend of RMB0.03 and special
dividend of RMB0.02 per ordinary share
declared and paid during the year (2011:
interim dividend of RMB0.02 per ordinary
share) 61,330 24,267
Final dividend of RMB0.13 per ordinary
share proposed after the end of the reporting
period (2011: final dividend of RMB0.10
and special dividend of RMB0.03 per ordinary
share) 158,531 157,970
219,861 182,237
======= =======
The final and special dividends proposed after the end of the
reporting period have not been recognised as liabilities at the end
of reporting period.
(ii) Dividends payable to equity shareholders of the Company
attributable to the previous financial year, approved and paid
during the year
2012 2011
RMB'000 RMB'000
Interim dividend of RMB0.03 and special
dividend of RMB0.02 per ordinary share
for the year, approved and paid during
the year (2011: RMB interim dividend of
RMB0.02 per ordinary share) 61,330 24,267
Final dividend of RMB0.10 and special dividend
of RMB0.03 per ordinary share in respect
of the previous financial year, approved
and paid during the year (2011: final dividend
of RMB0.10 and special dividend of RMB0.02
per ordinary share) 157,710 104,055
219,040 128,322
======= =======
11 TRADE AND OTHER RECEIVABLES
Included in trade and other receivables are trade receivables
with the ageing analysis of trade receivables based on invoice date
is as follows:
2012 2011
RMB'000 RMB'000
Less than 1 month 28,352 22,262
1 to 3 months 84 4,894
3 to 6 months 291 79
6 to 12 months - 1,240
Over 1 year 104 186
------- -------
28,831 28,661
======= =======
Trade receivables from sales of goods are normally due for
settlement within 30 to 45 days from the date of billing, while
that from the sale 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:
2012 2011
RMB'000 RMB'000
Neither past due nor impaired 27,529 22,191
------- -------
Less than 1 month past due 944 5,064
1 to 3 months past due 6 220
3 to 6 months past due 291 87
6 to 12 months past due - 1,024
Over 1 year past due 61 75
------- -------
Amounts past due but not impaired 1,302 6,470
------- -------
28,831 28,661
======= =======
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.
12 TRADE AND OTHER PAYABLES
Included in trade and other payables are trade payables with the
ageing analysis of trade payables including amount due to a related
party, by invoice date is as follows:
2012 2011
RMB'000 RMB'000
Due within 3 months or on demand 21,246 28,456
Due after 3 months but within 6 months 93 93
Due after 6 months but within 1 year 543 126
Due over 1 year 95 136
------- -------
21,977 28,811
======= =======
Represented by:
Trade payables 21,977 25,811
Amount due to a related party - 3,000
------- -------
21,977 28,811
======= =======
13 Financial Information
The results announcement was approved by the board on 21
September 2012. The financial information has been prepared on a
going concern basis in accordance with International Financial
Reporting Standards. The accounting policies applied in preparing
the financial information are consistent with those adopted and
disclosed in the Group's consolidated financial statements for the
year ended 30 June 2011, except for the accounting policies changes
as detailed in Notes 3 and 4.
The consolidated financial statements for the year ended 30 June
2012will be delivered to the Registrar of Companies following the
Company's annual general meeting. The auditors have reported on the
consolidated financial statements for the year ended 30 June 2012
and their report was unqualified and did not contain a statement
under section 237 (2) or (3) of the Companies Act 1985.
Other information
DIVIDENDS
The Directors are pleased to recommend the payment of a final
dividend of RMB0.13 (2011: final dividend of RMB0.10 and special
dividend of RMB0.03) per share on or before 31 December 2012,
subject to the approval of the forthcoming annual general meeting
("AGM") on 6 November 2012. The final dividend, together with the
interim and special dividends of RMB0.03 (2011: RMB0.02) and
RMB0.02 (2011: Nil) per share, will make a total of RMB0.18 (2011:
RMB0.15) per share for the whole year ended 30 June 2012. The
actual translation rate for the purpose of dividend payment in
sterling and HK Dollar will be referenced to exchange rate on 13
November 2012.
Only shareholders thatappear on the Company's register of
members at the close of business on the record date of 9 November
2012 will be qualified for the proposed dividend, with an
ex-dividend date of 8 November 2012 and 7November 2012 on HKEx and
London Stock Exchange PLC respectively.
In order to qualify for receiving the final dividend,
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 9
November 2012.
The shareholders will receive their cash dividends in sterling
or HK Dollar. It is also intended that the scrip dividend
alternative to the cash dividend will be offered during 2012. A
document providing further details of the Scrip Dividend Scheme
will be sent to shareholders in due course.
PURCHASE, SALE OR REDEMPTIONS OF THE COMPANY'S LISTED
SECURITIES
During the year ended 30 June 2012, the Company repurchased
10,950,000 ordinary shares of HK$0.01 on the HKEx at an aggregate
consideration of HK$52,065,380 before expenses. Out of the
10,950,000 repurchased shares, 10,455,000 repurchased shares were
cancelled during the year, and the remaining 495,000 repurchased
shares were cancelled subsequent to the year end date. The
repurchases were effected by the Board for the enhancement of
shareholder value in the long term. Details of the repurchases are
as follows:
Purchase consideration
No. of per share Aggregate
shares Highest Lowest Consideration
Month of purchase purchased price paid price paid paid
HK$ HK$ HK$
October 2011 2,000,000 5.20 5.09 10,362,420
November 2011 1,500,000 5.00 4.69 7,271,270
February 2012 1,161,000 4.60 4.43 5,272,830
March 2012 1,452,000 5.65 4.65 7,768,190
April 2012 1,301,000 5.49 4.64 6,488,420
May 2012 1,963,000 4.76 3.82 8,294,330
June 2012 1,573,000 4.38 3.91 6,607,920
---------- -------------
Total 10,950,000 52,065,380
========== =============
On 23 November 2011, 885,000, 1,502,000, 660,000 and 3,892,000
ordinary shares of HK$0.01 were issued at the exercise price of
GBP0.112, GBP0.2045, GBP0.2425 and GBP0.139 respectively upon
exercise of a total of 6,939,000 share options under the Share
Option Scheme.
On 30 December 2011, 9,456,219 ordinary shares of HK$0.01 were
issued at the price of HK$5.358 per 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 year ended 30 June 2012.
Code on corporate governance practices
The Company is committed to the principles of corporate
governance and corporate responsibility consistent with prudent
management. It is the belief of the Board that such commitment will
in the long term serve to enhance shareholders' value.
During the year ended 30 June 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.
In connection with the listing of the Company on the HKEx in
November 2009, the Company adopted the code provisions set out in
the Code on Corporate Governance Practices ("Old Code") contained
in Appendix 14 to the Rules Governing the Listing of Securities on
the HKEx ("Hong Kong Listing Rules") as its code on corporate
governance practices on 17 November 2009. On 23 February 2012, the
Company also adopted the code provisions set out in Corporate
Governance Code and Corporate Governance Report ("New 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
applicable Code Provisions as set out in the Old Code (for the
period from 1 July 2011 to 31 March 2012) and the New Code (for the
period from 1 April 2012 to 30 June 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).
DIRECTORS' SECURITIES TRANSACTIONS
In connection with the listing of the Company on the HKEx in
November 2009, the Company adopted the Model Code for Securities
Transactions by Directors of Listed Issuers (the "Model Code") as
set out in Appendix 10 of the Hong Kong Listing Rules as its own
code of conduct regarding securities transactions by the Directors
on 17 November 2009. Having made specific enquiry, the Company
confirmed that all Directors have complied with the required
standard set out in the Model Code for the year under review.
AUDIT COMMITTEE
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 Hong Kong 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 audited consolidated
financial statements for the year ended 30 June 2012.
PUBLICATION OF ANNUAL REPORT
The annual report will be published on the respective websites
of the Company (www.asian-citrus.com) under the investor relations
section and the HKEx (www.hkex.com.hk) in due course.
BY ORDER OF THE BOARD
Asian Citrus Holdings Limited
Tong Wang Chow
Chairman
Hong Kong, 21 September 2012
As at the date of this announcement, the Board 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; two
Non-Executive Directors, namely Mr. Ip Chi Ming and 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.
* For identification purpose only
This information is provided by RNS
The company news service from the London Stock Exchange
END
FR UAUSRUNAKURR
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