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Naibu Global Intl Co (NBU)

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Tuesday 21 May, 2013

Naibu Global Intl Co

Unaudited Preliminary Results

RNS Number : 1604F
Naibu Global International Co PLC
21 May 2013
 



 

 

Press Release

21 May 2013

 

Naibu Global International Company Plc

 

("Naibu" or the "Group")

 

Unaudited Preliminary Results

 

Naibu Global International Company Plc(AIM:NBU), a leading Chinese manufacturer and supplier of branded sportswear, today announces its unaudited preliminary results for the year ended 31 December 2012.

 

Highlights

 

-

Revenues increased by 12.4% to RMB 1,677 million (approximately £177 million) (2011: RMB 1,492 million)

-

Profit before tax rose by 4.3% to RMB 360 million (approximately £38 million) (2011: RMB 345 million)

-

Earnings per share for the year of RMB 4.94 (2011: RMB 5.67)

-

Maiden proposed final dividend of 4 pence per share declared (2011: Nil). Scrip dividend alternative to shareholders who wish to reinvest

-

Operating margin reduced from 23.1% to 21.5% due to one off IPO costs (excluding costs the operating margin was 22.1%)

-

Strong Group balance sheet with cash position of RMB 453 million (2011: 286.8 million).  The Group has no outstanding bank loans or overdue debt

-

Increased its Naibu-branded product range to 414 items in 2012 (2011: 325)

-

170 new Naibu-branded stores opened during 2012, an increase of 5.9%, totalling 3,040 stores (2011: 2,870 stores)

-

Investment in R&D programme increased by 39.3% to RMB 27.3million in 2012 (2011: RMB 19.6 million).  R&D expenditure accounts for 1.6% of turnover (2011: 1.3%)

 

The illustrative exchange rate as at 17 May 2013 is 1 GBP : 9.47 RMB.

 

Commenting on the preliminary results, Huoyan Lin, Executive Chairman of Naibu, said: "The Board is pleased to have successfully joined AIM in April 2012 and to have achieved positive growth in terms of both revenue and profits before tax.  Naibu's investment during the period in R&D, as well as advertising, sales and distribution, will support the ongoing focus on driving sales and building the brand as an affordable leading fashion sportswear brand.  The Board also continues to strive to maintain the solid margins that have been achieved to date.  The Group's focus remains on second and third tier cities, and Naibu has benefited from the ongoing urbanisation that is occurring in China.

 

"The Group is pleased to be announcing its maiden final dividend of 4 pence per share, a strong indication of the Board's confidence in the future growth potential for Naibu given its robust position in this growing market." 

 

- Ends -

 


Huoyan Lin, Executive Chairman

Tel: +44 (0) 20 7398 7702

Li Zhen, Chief Financial Officer

www.naibu.com

 

Tel: +44 (0) 20 7776 6550

Paul Shackleton / Martin Lampshire

www.danielstewart.co.uk

 


Henry Harrison-Topham / Joanne Shears

Tel: +44 (0) 20 7398 7702

[email protected]

www.abchurch-group.com

 



 

2012 was a very successful and exciting year for Naibu.  Against the background of a year of slowing domestic and international economic growth and a challenging industry environment, Naibu continued to pursue its strategy achieving excellent sales growth and above average profitability.  In the period Group revenues increased by 12.4% to RMB 1,677 million, whilst operating profit grew by 4.3 % to a record high of RMB 360 million, and the Group realised a net profit margin of 15.8 %. Naibu's continued investment programme in R&D and a sharpened focus on advertising, sales and distribution, together with the costs related to the Group's IPO, had a slight impact on the operating margin for the year.

 

The successful Admission to AIM in April 2012 was a historical milestone for Naibu raising awareness of the Group's brand internationally and the standing and attractiveness of the Naibu in China.  Despite intense competition among sportswear industry players in 2012, Naibu has continued to reinforce its unique brand positioning strategy and to differentiate the Group from it peers by positioning Naibu as an affordable leading fashion sportswear brand.  The Group has continued to focus its sales and marketing efforts on China's second and third-tier cities and has benefited from China's continued drive towards urbanisation, which is the fundamental driver of growth for Naibu's industry.

 

The Board plans to continue to pursue the Group's growth strategy in 2013 to create brand value.  Naibu has had a good start to 2013, and the Board is confident that this will be another productive year.  Based on the market's recovery, the increased strength of the Group's brand and its powerful distribution network, the Board aims to increase sales in 2013 and to maintain the solid margins achieved in 2012.

 

For Naibu's distribution network, the Group will continue to focus on the development of retail outlets in second and third-tier cities, while optimising and adjusting the Group's distribution resources.

 

With regards to Naibu's manufacturing and production, the Group will continue to expand its own production capacity as a percentage of total production through the building of new production plants and facilities, in order to respond more flexibly to market changes and to be able to control its production process more effectively. At the moment, the Group leases a total of eight production lines, four each in Jinjiang and Shishi, both in Fujian Province.  As the production lines in Jinjiang are relatively old, and the lease for the Shishi plant is due to expire in late 2013, in order to ensure continued smooth production, the Group is negotiating to acquire a plant in Quangang this year where it will establish eight production lines: this will comprise six new lines with the other two being transferred from Shishi.  The existing four lines in Jinjiang will be retired and the remaining two production lines in Shishi will be transferred to Jinjiang.  The new production facility in Quangang is expected to commence operations in Q4 2013, and therefore the Group anticipates it will be operating ten production lines in total by the end of the current financial year.  The withdrawal of the Shishi plant and the commencement of operations at the Quangang plant will be concurrent and the Group does not anticipate any negative impact on its manufacturing capability in 2013.The plants in Jinjiang and Quangang are approximately 50km apart and both form part of Quanzhou city.

 

In addition, Naibu is continuing with its growth strategy of investing in the central and western areas of China, which has taken longer than the Board anticipated owing to the recent change of political leadership in China. Preliminary negotiations with local government officials in Sichuan Province have now completed. The directors expect that the Company will purchase the land to build a new factory with twelve production lines, which they anticipate will be in operation by the end of 2014.

 

Naibu is determined to strengthen its design and product development capacity and capability, as stronger brand identity and innovation capabilities will make the Group's products more desirable to consumers, which will in turn generate higher sales revenue for Naibu's retailers and boost their confidence in the Group.

 

The Group continues to improve management systems and develop a strong corporate culture to attract talented staff.  Naibu plans to offer additional staff training beyond the programmes the Group already operates and promotion opportunities that will help Naibu's employees develop professionally as the business expands.

 

I would like to thank my fellow Board members and all of our staff for their dedication, commitment and for making valuable contributions to Naibu.

 

On behalf of the Board, I would like to express my heartfelt gratitude to our shareholders for their continued support and trust they place in us.  Given the continued strength and performance of our business, I am delighted to announce that the Group proposes to pay a maiden final dividend of 4 pence per share to our shareholders.  This dividend reflects the Board's positive outlook for the future of the Group and it is intended that it will mark the start of a progressive dividend policy going forward.  The dividend is subject to shareholder approval and the appropriate approvals of the Chinese authorities. The final dividend of 4 pence per share is expected be paid on 19 September 2013 to shareholders on the register at the close of business on Friday 7 August 2013.  The shares will trade ex-dividend on 7 August 2013 following approval at the AGM.  The Company is proposing to operate a Scrip Dividend Alternative. The Scrip Dividend Alternative provides shareholders with an opportunity to invest the whole of, or part of, the cash dividend they receive to buy further shares in the Company without incurring stamp duty or dealing expenses.

 

The Scrip reference price is calculated by taking the average of the middle market quotations for the Company's Ordinary shares for the day on which they are quoted ex-dividend and the four subsequent business days. The Scrip Dividend Alternative will be subject to shareholder approval at the AGM.

 

The Board continues to strive to take effective actions and measures to ensure the steady development of the Group's business, working closely with our supply chain partners and distributors in order to create value for our stakeholders.  Naibu is in a strong position in the market and the Board remains confident of future growth and positive about the prospects for Naibu.

 

Huoyan Lin

21 May 2013



Operational Review

 

Financials

 

2012 produced another set of solidresults for Naibu, with pre-tax profits rising 4.3% to RMB 360 million on sales up 12.4% to RMB 1,677 million.

 

The strong increase reflected growing popularity and rising demand forbranded leisurewear, sportswear and equipment in Naibu's target Chinese market.  This consumer demand was met by the Group over the course of the year with a broadening of its product range through its continued investment programme in research and development ("R&D") and a sharpened focus on advertising, sales and distribution, partly in new locations.  This investment together with costs related to the Group's AIM IPO had a slight impact on the operating margin for the year which fell from 23.1% to 21.5%.  Excluding IPO costs, the margin would have been 22.1%.  Earnings per share for the year wereRMB 4.94 (2011: RMB 5.42) and the Group's cash position at the year-end was robust standing at RMB 453 million (2011: RMB 286.8 million).

 

Product range and sales

 

During the year, Naibu made significant progress in terms of brand positioning, product design and marketing.

 

Throughout the year, the Group continued with the manufacture of Naibu-branded leisure and sports shoes, which were sold through its nationwide Naibu outlets alongside Naibu-branded leisurewear, sportswear, sports accessories and equipment sourced from original equipment manufacturer ("OEM") suppliers.  In all, the Group offered a total of 414 Naibu-branded products in 2012 (2011: 325) including 150 types of shoes, 212 types of clothing, as well as 52 types of accessories and sports equipment.  Salesand marketing of these items remained focused on mass-market buyers, especially those young, innovative consumers aged between 12 and 35, targeted by three separate product lines labeled "Vital Campus", "Urban Business" and "Holiday Leisure".

 

Shoes continued to account for most of the Group's sales, representing 54.8% of total revenue.  Sales of shoes amounted to RMB 919 million, up 10.8% from the previous year.  Increased sales price per unit, rather than sales volume, accounted for over two thirds of the total sales increase.

 

Strong revenue growth was also achieved from the sale of clothes and accessories, which together accounted for the remaining 45.2% of total revenues, up 0.8% from 44.4% during 2011.  This was achieved primarily through increasing the number of Naibu-branded stores during the year from 2,870 stores to 3,040 stores in 2012, an increase of 5.9%, increasing display area, and focusing on higher-margin products. Sales also benefited from the introduction of higher-quality in-store sales teams.  The Group, has continued to provide training to staff at Naibu branded stores on how to constantly improve services, and to exhibit different series of accessories and has also continued to provide rigorous guidance to in-store sales teams.  In addition, the increase in unit price for each category contributed significantly to revenue growth for the Group.

 

Research and development

 

The Group maintains a product research and development ("R&D") team of 93 employees at its Shishiand Jinjiang factory, who are responsible for the design of all shoes and clothing and are supervised by Naibu's founder and Executive Chairman, Mr. Huoyan Lin.  The R&D team comprises three divisions respectively covering product design, product development and technology development.  It creates two seasonal collections each year ("Spring and Summer" and "Autumn and Winter") which during 2012 included 414 new product designs successfully launched at two seasonal fairs.  Naibu's distributors remained crucial to the R&D process during the year, providing market feedback and opinions on forward sales potential.  The department plans to launch over 530 new Naibu products in 2013.

 

Naibu is determined to strengthen its design and product development capabilities in order to develop new products and improve quality, which the Group believes is essential to adapt to changing consumer preferences.

 

Manufacturing

 

Naibu's production centers are located in Jinjiang and Shishi, both in Fujian Province, where the Group continues to lease two purpose-built production facilities operating a total of eight shoe production lines - four at each plant and where workers are engaged in stamping, sewing and stitching, and moulding.  Both plants ran without interruptionthroughout the year to meet strong demand for the Group's products. This was achieved through the optimisation of production support systems, the improvement of equipment, and enhancing production efficiencies.

 

At the year-end, the Group employed 1,949 production staff, similar to the level for 2011 Approximately two thirds of the shoes sold and distributed by the Group during the year wereproduced at the manufacturing plants.  The remaining one third of shoes delivered, and all the Group's clothes and accessories were sourced from OEM suppliers.

 

In order to meet the increased production needs of the Group, Naibu is planning to make changes to its production facilities.  This will allow it to respond with greater flexibility to market changes whilst providing the Group with enhanced control over the production process.

 

At the moment, Naibu leases a total of eight production lines at two sites, four each at Jinjiang and Shishi. These facilities have served the Group well, but the production lines in Jinjiang are relatively old, and the lease for the Shishi plant will expire in late 2013.  In order to consolidate and improve production, the Group is in the process of acquiring a plant in Quangang where it will establish eight production lines later this year.  Six new production lines will be set up, and two production lines will be transferred from Shishi.  The other two production lines in Shishi will be transferred to Jinjiang, and the existing four lines in Jinjiang will be retired.  The new production facility in Quangang is expected to commence operation by the end of 2013, and accordingly, the Group anticipates it will be operating ten production lines in total by the end of the year.  The closure of the Shishi plant and the commencement of operations at the Quangang plant are expected to be concurrent and the Group does not anticipate any negative impact on its manufacturing capabilities in 2013.

 

The plants in Jinjiang and Quangang are approximately 50 km apart.  Both are part of Quanzhou city.  Both the workforce and the R&D team are aware of the planned changes and many of them are willing to relocate to the new facility in Quangang.  The Group does not anticipate any difficulty in recruiting additional staff required for Quanzhou due to the availability of skilled labour in Quangang.

 

Naibu will also continue with its growth strategy of investing in the central and western areas of China.  Whilst this has taken slightly longer than anticipated due to the recent change in political leadership in China, preliminary negotiations with local government officials in Sichuan Province have now been completed and the Group plans to purchase the land to build a new factory with 12 production lines before the end of the year, and which the Board anticipates will be fully operational by the end of 2014.  Sichuan province itself is a large and growing market, with Chongqing and Chengdu being two of the largest and fastest growing cities in China.  It is also the geographical and economic centre for the distribution of products through western China.

 

Sales and distribution

 

The Group continues to operate its Marketing and Sales Centre in Fuzhou, with more than 60 staff responsible for product promotion and sales.  Six Regional Sales Managers were in charge of individual geographic areas across Naibu's established Chinese distribution network, communicating regularly with key customers, and monitoring consumer trends and competitor performance.

 

In 2012, Northern, Eastern and Southern China remained Naibu's key markets with total revenues from the three regions accounting for 66.7% and 67.0% during the years 2011 and 2012 respectively.  However, the Group will continue to strengthen its sales in Central and Western China, as the rapid growth in disposable income in these regions will provide Naibu with strong sales potential in the near future.

 

All of the Group's sales were made through distribution agreements with 25 independent corporate and individual retail distributors across China who, at 31 December 2012, operated 3,040 Naibu-branded stores and sales outlets, in 21 provinces and three municipalities.  This represented an increase of 170 outlets over the number at the end of 2011, most of them in third tier cities in China.  Some stores were directly owned by the distributors, with most of the others owned by their sub-distributors some of whom also operated sales outlets in department stores and supermarkets.

 

To protect Naibu's brand image and maintain high standards of service quality, the Group continues to provide retail distributors with guidance on how products should be best presented and marketed.  New store locations continued to be selected jointly by distributors and the Group, and the selections are based on market research, estimated costs and local sales potential.

 



Marketing

 

Naibu continued to invest significantly in brand marketing and product promotion during the year, with a heavy emphasis on advertising, spending RMB 29.5 million.  In addition, the marketing function was supported by "front-line" information on consumer and competitor trends supplied by the Group's team of regional sales managers.

 

In 2012, to commemorate the Group's Admission to AIM, the Group's R&D team launched five new styles of footwear inspired by British design.  Though production levels are still relatively low, the new products have been well received by Naibu's customers.  In addition to increasing sales and enhancing Naibu's brand image, these products will help create favorable conditions for the future international expansion of Naibu's brand.

 

Management and staff

 

As at 31 December 2012, Naibu employed a total of 2,310 staff, of these about 2,220were employed at the Group's production facilities in Jinjiang and Shishi, with the remainder employed at the Group's headquarters in Fuzhou.  With the closure of Shishi and the opening of Quangang, the Group anticipates that the vast majority of its staff will transfer to the new site.  Any additional staffing needs will be sourced locally where there is a good supply of skilled labour.

 

Staff turnover remained low, reflecting relatively high salary and welfare levels, a good Group culture and progressive working conditions.  As a listed company, the Group also recruited more experienced management and skilled personnel, to improve management.



Financial review

 

Key financials

 


2012 (RMB)

2011 (RMB)

Revenue

1.677 billion

1.492 billion

Profit before tax

360 million

345 million

Earnings per share (basic)

4.94

5.67

Cash generated from operations

147 million

153 million

Proposed final dividend per share

4 pence

Nil

 

Revenue

 

Naibu's revenue increased by 12.4% during the year, rising to a record RMB 1.677 billion (approximately £177 million) thanks to increases in unit prices, a successful broadening of Naibu's product range and a steady expansion of the Group's distribution network.

 

In 2012, revenue derived from Naibu's higher margin branded clothing and accessories linescontinued to increase as a proportion of total sales.

 

While Sales in the Group's principal markets of North, East and South China accounted for 67.0% of total revenues in 2012, a slight increased from 66.7% in 2011, the Group continues to strengthen and build its distribution channels in North West and Central China.

 

Category

Year to

31 December

2012

(RMB, 000)

% of

turnover

Year to

31 December

2011

(RMB, 000)

% of

turnover

%

increase

Shoes

919,271

54.8%

829,546

55.6%

10.8%

Clothing

706,457

42.1%

622,811

41.8%

13.4%

Accessories

50,885

3.1%

39,288

2.6%

29.5%

Total

1,676,613

100.0%

1,491,645

100.00%

12.4%

 



 

Area

Year to 31 December 2012

Year to 31 December

2011

% change

RMB,000 

% of turnover

RMB,000  

% of turnover

North China

447,534

26.7%

396,412

26.6%

12.9%

East China

390,076

23.3%

343,235

23.0%

13.6%

South

China

285,298

17.0%

254,825

17.1%

12.0%

Central China

195,537

11.7%

176,809

11.9%

10.6%

North-West China

151,890

9.0%

136,127

9.1%

11.6%

South-West China

206,278

12.3%

184,237

12.4%

12.0%

Total

1,676,613

100%

1,491,645

100.0%

12.4%

 

Costs and expenses

 

Operating costs and expenses increased by 14.9% during the year andas a percentage of turnover rose by 1.7%.  This is in line with increased levels of manufacturing, distribution and sales and includesvarious expenses incurred during the IPO.  The IPO and post-IPO related expenses recorded for the year wereabout RMB 9.6 million. Excluding these IPO related expenses, operating costs and expenses increased by 14.1%, or 1.1% as a percentage of turnover.

 

Advertising and marketing expenses as a percentage of turnover increased by 0.5% during the year as the Group continuedto build brand and market awareness.

 

Labour as a percentage of turnover increased by 0.3% in the year, primarily as a result of the appointment of experienced directors and management to the Board following the Company's IPO.

 

The Group continued with its programme of investment in R&D, spending RMB 27.3 million in the year, an increase of 39.3% from RMB 19.6 million in 2011, with R&D expenditure accounting for 1.6% of Group turnover (2011: 1.3%).



 


Year to 31 December 2012

Year to 31 December 2011

% change

Operating Cost (RMB,000)

% sales cost

Operating Cost (RMB,000)

% sales cost

Group Manufacturing (Shoes)

Raw material

304,096

25.2%

278,007

26.0%

9.4%

Direct Wages

97,483

8.1%

82,951

7.8%

17.5%

Indirect costs

45,943

3.8%

33,256

3.0%

38.2%

Subtotal

447,522

37.1%

394,214

36.9%

13.5%

OEM Supplies

Shoes

230,400

19.0%

211,568

19.8%

8.9%

Clothing

494,800

41.0%

437,407

40.9%

13.1%

Accessories

34,502

2.9%

26,912

2.5%

28.2%

Subtotal

759,702

62.9%

675,887

63.2%

12.4%

Total

1,207,224

100.0%

1,070,101

100.0%

12.8%

 

Year ended 31 December


2012 (%)

2011 (%)

Change (%)

Advertising expenditures as proportion of turnover

 

1.8%

 

1.3%

 

0.5%

Labor cost as proportion of turnover

 

6.2%

 

5.9%

 

0.3%

R&D expenditure as proportion of turnover

 

1.6%

 

1.3%

 

0.3%

 

Results for the year

 

While the overall gross profit margin fell slightly from 28.3% to 28.0% during 2012, the gross profit margin for clothing and accessories increased from 29.8% to 30.0% and 31.5% to32.2%, respectively compared with the previous year.  The gross profit margin for shoes fellslightly by 0.7% during the year, mainly as a result of the increasedcost of raw materials and the R&D costs invested in shoes development.



 

Category

2012

2011

gross profit

 

gross profit

margin

gross profit

 

gross

profit

margin

RMB ,000

%

RMB ,000

%

Shoes

241,350

26.3%

223,765

27.0%

Clothing

211,657

30.0%

185,405

29.8%

Accessories

16,382

32.2%

12,375

31.5%

Total

469,389

28.0%

421,545

28.3%

 

Operating profit rose to RMB 360 million, up 4.3% year-on-year, while the profit before tax margin fell to 21.5% from the previous year's 23.1%, partly due to the increased expenses from being a listed company.  Excluding these expenses,the profit before tax margin would be 22.1%.  Additionally, advertising campaign costs and the renovation allowance granted to distributors during the year contributed to the increase in operating expenses in 2012.

 

Net profit after tax reduced by 6.4% to RMB 265 million, compared to RMB 283 million in 2011.  This reduction was mainly due to increased income tax expenses of RMB 95 million compared with RMB 62 million in the previous year and is the result of changes in deferred tax liabilities.  In 2011, there was a reversal of deferred tax of RMB 25 million which contrasts with an increase in deferred tax provision in 2012 of RMB 2.5 million.

 

Deferred tax for the Group is a result of the tax treatment for dividend payments.  Pursuant to prevailing PRC tax laws and regulations, dividends distributed to a foreign investor by Foreign Invested Enterprises ("FIE") in the PRC aresubject to a withholding tax of 5% to 10%.   Deferred tax liabilities arising from such tax rules are recognised to the extent that the management intends to distribute dividends from retained earnings.  The PRC corporate rules stipulates that FIE should provide 10% of the current year profit for the reserve fund, and the remaining 90% can be used for distribution to investors.  In 2011 and 2012, the deferred tax calculation of Group is based on 10% of the retained earnings which can be distributed to investors.  Considering the profit before tax margin is about 22%, the normalised income tax expense level (including current tax and deferred tax) is around 6% of turnover, or about 35% of net profits.

 

Balance sheet and cash flow

 

As at 31 December 2012, the total assets of the Group stood at RMB 1,171 million, with current assets amounting to RMB 1,127 million.  With total liabilities of RMB 199 million, total shareholders' equity rose to RMB 972 million.  The Group had no outstanding bank loans or overdue debt.

 

The Group's year-end cash and cash equivalents amounted to RMB 453 million increasing by RMB 166 million from RMB 287 million as at 31 December 2011.  The increase reflected a net cash inflow of RMB 166 million resulting from improved operating performance and strengthened capital management, and partly from the cash received from the IPO.

 

Year-ended 31 December

Category

2012

RMB'000

2011

RMB'000

Change

RMB'000

Net cash inflow from operations

 

146,958

 

153,192

 

(6,234)

Net cash outflow from investments

 

(36,208)

 

(20)

 

(36,188)

-In which: 1)Acquisition of property, plant and equipment

(17)

(20)

3

 2) Renovation prepayments for distributions

 

(36,191)

 

-

 

(36,191)

Net cash inflow from financing

 

55,355

 

19

 

55,336

In which: 1) Share issue proceeds, net of issue costs

 

 

54,314

 

 

-

 

 

54,314

2) Advances from a director / shareholder

 

 

1,041

 

 

19

 

 

1,022

 

166,105

 

153,191

 

12,914

 



With the increase of both sales and the scale in operations during the year, the Group further consolidated its working capital management. The Group continued to monitor inventory levels and maintain a high turnover rate. Although average debtor days increased from 103 to 121 days during the year, which was a result of continuing to support and strengthen Company's partnership with its distributors, this was partly offset by an increase in account payables days.  As at the year end, there were no overdue accounts receivable.

 

Year ended 31 December


2012

2011

Change

Accounts receivable (average debtor days)

121

 

103

(18)

Inventory (days)

21

19

(2)

Accounts payable (days)

47

 

44

3

 

Year ended 31 December

Category

2012

2011

Change

Asset-liability ratio

17.0%

27.4%

-10.4%

Current ratio

589.8%

367.1%

222.7%

Proportion of current assets

96.3%

98.5%

-2.2%

Proportion of shareholders' equity

83.0%

72.6%

10.4%

 

Tax

 

During the year, the Group paid income tax at a standard rate of 25%, being the same as2011.

 


Year ended

31 December


Item

2012

2011

Change

Profit margin before tax

21.5%

23.1%

-1.6%

Impact of income tax expense on net profit margins

-5.5%

-5.8%

0.3%

Impact of deferred tax on net profit margins

-0.15%

1.7%

-1.8%

Net profit margins

15.8%

19.0%

-3.2%

 

The net profit margin for the year was 15.8%, down 3.2% from 19.0% the previous year which was primarily due to the impact of deferred income tax.

 

Commitments and contingencies

 

As at 31 December 2012, the Group and its subsidiaries had no external guarantees outstanding nor any form of external supply.  The Group is currently not involved in any litigation matters and is not aware of any current or pending litigation issues relating to the Group.

 

Financial management policy

 

The Group continues to maintain a prudent approach to financial risk. The directors recognise the value of the UK Corporate Governance Code ("the Code"), and whilst under AIM rules full compliance is not required, the directors believe that the company applies the recommendations insofar as is practicable and appropriate for a public company of its size. Group business is principally conducted in RMB, so the impact of exchange rate risk on Group activities is limited.  The Group does not take positions with financial instruments for hedging purposes.  The Board does, however, continue to monitor foreign exchange risk, and is prepared to implement prudent risk-reduction measures such as hedging as and when necessary.

 

Significant investments and acquisitions

 

During the year, the Group made no major investments and did not dispose of or acquire any significant subsidiaries or businesses.  The Group continues to consider opportunities for the acquisition of other brands and to review potential opportunities for cooperation in line with its strategy of expanding the Naibu brand portfolio to realise improved returns for shareholders.

 

Dividend

 

To reward Naibu's shareholders for their long term support, the Board has decided to announce a final dividend payment of 4 pence per share to our shareholders.  This initial dividend reflects the Board's positive outlook for the future of the Group and it is intended that it will mark the start of a progressive dividend policy going forward. In future years, the board expects to distribute approximately one third of the total dividends expected for the year as an interim dividend, and two thirds of the expected total dividends for the year as a final dividend. This dividend is subject to shareholder approval and the appropriate approvals of the Chinese authorities. The final dividend of 4 pence per share is expected to be paid on 19 September 2013 to shareholders on the register at the close of business on Friday 7 August 2013.  The shares will go ex-dividend on 7 August 2013.

 

21 May 2013



CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

FOR THEFINANCIAL YEAR ENDED 31 DECEMBER 2012

 




Proforma                     

Proforma




Year ended 31 December




2012

2011



Notes

RMB'000

RMB'000






Revenue



1,676,613

1,491,645






Cost of sales



(1,207,224)

(1,070,100)






Gross profit



469,389

421,545






Other income



1,976

825

Selling and distribution expenses



(79,044)

(58,858)

Administrative expenses



(31,868)

(18,311)






Profit before taxation



360,453

345,201

Income tax expense


4

(95,323)

(61,933)






Profit after taxation



265,130

283,268






Other comprehensive gain, net of tax

 





Translation differences arising from foreign currency financial statements recognised directly in equity



                       480

-






Total comprehensive income attributable to equity holders of the parent



 

                  265,610

 

283,268

 

Earnings per share - Basic (RMB)


6

             4.94

5.67

 

Earnings per share - Diluted (RMB)


 

6

 

             4.94

 

5.67

 



CONSOLIDATED STATEMENTS OF FINANCIAL POSITION

FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2012

 



                            Proforma




As at 31 December




2012

2011



Notes

RMB'000

RMB'000

ASSETS










Non-current assets





Property, plant and equipment



10,568

13,150

Long-term prepayment


7

33,275

-




43,843

13,150






Current assets





Inventories



64,829

78,974

Trade and other receivables



609,475

519,858

Cash and bank balances



452,906

286,801




1,127,210

885,633

Total assets



1,171,053

898,783






LIABILITIES AND EQUITY










Non-current liabilities





Deferred income tax liabilities



7,861

5,367




7,861

5,367

Current liabilities





Trade payables



134,595

182,339

Other payables and accruals



35,009

34,397

Amount due to a director/shareholder



1,059

19

Income tax payable



20,446

24,491




191,109

241,246

Total liabilities



198,970

246,613






Capital and Reserves










Stated capital account


8

54,314

-

Reserves



150,621

122,439

Retained earnings



767,148

529,731

Total equity attributable to equity holders of the parent



 

972,083

 

652,170

Total liabilities and equity



1,171,053

898,783






 



CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY

FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2012



Attributable to the Company's equity holders

 


Stated

Capital

Account

 

Re-

Construction

Reserve

 

Currency Translation Reserve

 

 

Statutory

Reserve

 

Retained Profits

Total

Proforma

RMB'000

RMB'000

RMB'000

RMB'000

RMB'000

RMB'000

Balance at 1 January 2011

-

31,426

2,178

62,841

272,457

368,902

Profit for the year

-

-

-

-

283,268

283,268

Other comprehensive income - Foreign currency translation differences

 

-

 

 

-

 

 

 

 

-

 

 

-

 

 

 

Total comprehensive income  for the year

-

-


-

 283,268

283,268

Transfer to statutory reserve

-

-

-

25,994

(25,994)

-

Dividends (Note 5)

-

-

-

-



 

-

 

31,426

 

2,178

 

88,835

 

529,731

 

652,170

Issue of ordinary shares, net of share issue costs

 

54,314

 

(11)

 

 

 

 

 

 

 

54,303

Profit for the year

-

-

-

-

265,130

265,129

Other comprehensive income - Foreign currency translation differences

 

 

 

 

 

 

 

 

480

 

 

 

 

 

 

 

 

480

Total comprehensive income for the year

 

-

 

-

 

480

 

-

 

265,130

 

265,610

Transfer to statutory reserve

-

-

-

27,712

(27,712)

-

Balance at 31 December 2012

 

54,314

 

31,415

 

2,658

 

116,547

 

767,149

 

972,083

 

 



CONSOLIDATED STATEMENTS OF CASH FLOWS 

FOR THE FINANCIALYEAR ENDED 31 DECEMBER 2012

 



Proforma      

Proforma



Year ended 31 December


Notes

2012

2011



RMB'000

RMB'000

Cash flows from operating activities




Profit before taxation


360,453

345,201

Adjustments for :




Depreciation and amortisation


5,515

2,669

Interest income


(1,281)

(535)





Operating profit before working capital changes


364,687

347,335

Decrease / (increase) in inventories


14,145

(44,972)

(Increase) in trade and other receivables


(89,149)

(188,226)

(Decrease) / increase in trade payables


(47,743)

102,132

Increase in accruals and other payables


612

4,713





Net cash generated by operating activities


242,552

220,982

Interest received


1,281

535

Income tax paid


(96,875)

(68,325)





Net cash generated by operating activities


146,958

153,192





Cash flows from investing activities




Acquisition of property, plant and equipment


(17)

(20)

Refurbishment of property, plant and equipment 


(36,191)

-





Net cash used in investing activities


(36,208)

(20)





Cash flows from financing activities




Share issue proceeds, net of issue costs


54,314

-

Advances from a director/shareholder


1,041

19





Net cash generated from/(used in) financing activities


55,355

19





Net increase in cash and cash equivalent


166,105

153,191

Cash and cash equivalent at beginning of the financial year


286,801

133,610









Cash and cash equivalent at end of the financial year


452,906

286,801

 



 

1.         GENERAL INFORMATION

 

The Company was incorporated in Jersey, the Channel Islands, on 15 December 2011. The Company's registered office is at 26 New Street, St Helier, Jersey JE4 9WG, Channel Islands. The nature of the Company's operations and its principal activities are to act as the holding company of a group engaged in the design, manufacture and supply of Naibu branded sports shoes and the design and supply of Naibu branded clothing and accessories.

 

Naibu products target the mass-market, focussing primarily on students and young adults aged between 12 and 35, offering them branded sports fashion at a reasonable price.  The Group has a strong research and development ("R&D") team, which in the Directors' opinion, is vital to the success of the brand.  The Group leases two factories comprising of eight production lines.  It has nearly 3,040 Naibu stores in cities across 21 of China's provinces and three of its municipalities.  The company completed its listing on London AIM on 5 April 2012.

 

 

2.         BASIS OF PREPARATION

 

 

The consolidated financial information has been prepared in accordance with International Financial Reporting Standards as adopted by the European Union ("IFRS") issued by the International Accounting Standards Board ("IASB") including related interpretations issued by the International Financial Reporting Interpretations Committee ("IFRIC") and using the accounting policies which are consistent with those adopted in the admission document as well as applying the following accounting policy.

The principal accounting policies are consistent with those and are unchanged from those disclosed in the financial statements of Naibu HK Investment International Ltd for the year ended 31 December 2011 except for the following additional accounting policies:

"The company was incorporated on 15 December 2011 and entered into an agreement to acquire the entire issued and to be issued share capital of Naibu HK Investment International Ltd on 13 February 2012.  The acquisition was effected by way of issue of shares.

In determining the appropriate accounting treatment for this transaction, the Directors considered IFRS 3 "Business Combinations" (Revised 2008). However, they concluded that this transaction fell outside the scope of IFRS 3 (revised 2008) since the transaction described above represents a combination of entities under common control.

In accordance with IAS 8 "Accounting Policies, changes in accounting estimates and errors", in developing an appropriate accounting policy, the Directors have considered the pronouncements of other standard setting bodies and specifically looked to accounting principles generally accepted in the United Kingdom ("UK GAAP") for guidance (FRS 6 - Acquisitions and mergers) which does not conflict with IFRS and reflects the economic substance of the transaction.

Under UK GAAP, the assets and liabilities of both entities are recorded at book value, not fair value (although adjustments are made to achieve uniform accounting policies), intangible assets and contingent liabilities are recognised only to the extent that they were recognised by the legal acquirer in accordance within applicable IFRS, no goodwill is recognised, any expenses of the combination are written off immediately to the income statement and comparative amounts, if applicable, are restated as if the combination had taken place at the beginning of the earliest accounting period presented.

Therefore, although the Group reconstruction did not become unconditional until 13 February 2012, these consolidated financial statements are presented as if the Group structure has always been in place, including the activity from incorporation of the group's principal subsidiary.  Both entities had the same management as well as majority shareholders.

Furthermore, as the Company was incorporated on 15 December 2011, while the enlarged group had been trading for years previously, the comparative information for the statement of comprehensive income, the consolidated statement of changes in equity and consolidated cash flow statements are proforma.  On this basis, the Directors have decided that it is appropriate to reflect the combination using merger accounting principles as a group reconstruction under FRS 6 - Acquisitions and mergers in order to give a true and fair view.  No fair value adjustments have been made as a result of the combination."

The financial information set out in this preliminary announcement does not constitute audited financial statements for the year ended 31 December 2012. The financial information for the year ended 31 December 2012 is derived from draft financial statements.  The audit of the statutory accounts for the year ended 31 December 2012 is not yet complete.  These accounts are expected to be finalised on the basis of the financial information presented by the directors in this preliminary announcement and will be delivered to the Jersey Companies Registry following the company's annual general meeting.

 

The financial information for the year ended 31 December 2011 set out in this interim financial information does not comprise the Group's statutory financial statements. They have been prepared by consolidating the Company and the consolidated financial statements of Naibu HK Investment International Ltd, the subsidiary of the Company, which were both prepared under IFRS and IFRIC interpretations as adopted by the European Union. Both the Company only and the consolidated financial statements of Naibu HK Investment International Ltd have been audited for the period ended 31 December 2011, both audit reports were unqualified. On this basis, the consolidated results of the Company for the year ended 31 December 2011 have been described as audited.

The financial information set out in this announcement was approved and authorised for issue by the board of directors on 20 May 2013.

Copies of this financial information will be available on the Company's website.

 

 

3.         Significant accounting estimates and judgements

 

The preparation of the financial statements in conformity with IFRS requires the Directors to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the financial year.  In addition, the Directors are also required to exercise their judgement in the process of applying the accounting policies.  Although these estimates are based on the Directors' best knowledge of current events and actions, actual results may differ from those estimates.

 

Estimates and judgements are continually evaluated and are based on historical experiences and other factors, including expectations of future events that are believed to be reasonable under the circumstances.

 

In the process of applying the Group's accounting policies as described below, except for the critical judgements mentioned below, the Directors are of the opinion that there are no other instances of application of judgements which are expected to have a significant effect on the amounts recognised in the financial statements.

 

Depreciation of property, plant and equipment

 

Property, plant and equipment are depreciated on a straight-line basis over their estimated useful lives.  Management estimates the useful lives of property, plant and equipment to be within 5 to 10 years. The carrying amounts of the Group's property, plant and equipment as at 31 December 2012 and 31 December 2011 were RMB 43,843,000 and RMB 13,150,000 respectively.  Changes in the expected level of usage and technological developments could impact the economic useful lives and the residual values of these assets, therefore future depreciation charges could be revised.

 

Withholding tax on dividends - deferred tax

 

The Group is subject to income taxes in the tax jurisdiction in the PRC. According to the New Corporate Income Tax Law ("CIT") and the Detailed Implementation Regulations ("DIR"), dividends distributed to a foreign investor by Foreign Invested Enterprises ("FIE") in the PRC would be subject to a withholding tax of 5% to 10%.  The Chinese tax authorities have granted a special tax concession which states that dividends distributed out of the earnings from 1 January 2008 of a FIE's profit, arising in year 2008 and beyond, to be distributed to the foreign investors as dividends shall be subject to withholding tax.  Deferred tax liabilities arising from such temporary differences as a result of the new CIT are recognised to the extent that the management intends to distribute dividends from the retained earnings.

 

Key sources of estimation uncertainty

 

The Group makes estimates and assumptions concerning the future. The resulting accounting estimates and assumptions that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the financial year are discussed below:

 

Income tax

 

The Group has exposure to income taxes in the PRC.  Significant judgement is required in determining the provision for income taxes.  There are also claims for which the ultimate tax determination is uncertain during the ordinary course of business. The Group recognises liabilities for expected tax issues based on estimates of whether additional taxes will be due. When the final tax outcome of these matters is different from the amounts that were initially recognised, such differences will impact the income tax and deferred tax provisions in the period in which such determination is made.   The carrying amounts of the Group's income tax payables as at 31 December 2011 and 2012 were RMB 24.5 million and RMB 24.4 million, respectively.

 

Impairment of trade receivables

 

The Group's management assesses the collectability of trade receivables. This estimate is based on the credit history of the Group's customers and the current market condition. Management assesses the collectability of trade receivables at the balance sheet date and recognises an impairment if appropriate Once debtors have been identified as having evidence of impairment, it is regularly reviewed and appropriate impairment position applied. The carrying amounts of the Group's trade and other receivables as at 31 December 2011 and 2012 were RMB 498.2million and RMB 515.1 million, respectively. No provisions to any of these debts have been provided for during any of these periods.

 

Net realisable value of inventories

 

The Group reviews the ageing analysis of inventories at each reporting date, and makes provision for obsolete and slow moving inventory items identified that are no longer suitable for sale, if any.  The net realisable value for such inventories are estimated based primarily on the latest invoice prices and current market conditions.  Possible changes in these estimates could result in revisions to the valuation of inventories.  The carrying amount of the Group's inventories as at 31 December 2011 and 2012 were RMB 79.0 million and RMB 64.8 million, respectively.

 

Commercial and business environment in the PRC

 

The Chinese system operates within a political framework of communist control. Although the Directors believe that political conditions in the PRC are generally stable, changes may occur in its political, fiscal and legal systems which might affect the ownership or operation of the Group's interests, including, inter alia, changes in exchange control regulations, changes in government and in legislative and regulatory regimes.

 

Activities, assets and entities based in the PRC within the group may be impacted by these evolving structures as well as other China related considerations, which could impact on the control of individual assets or the control of whole entities.

 

 

 

4.         INCOME TAX EXPENSE

 


Year ended 31 December


2012

2011


RMB'000

RMB'000




PRC income tax

92,829

86,839

PRC withholding tax

-

-

Total current tax

92,829

86,839

Deferred tax

2,494

(24,906)

Total tax charge

95,323

61,933

 



The reconciliation between tax expense and accounting profit at applicable tax rates is as follows:

 


Year ended 31 December


2012

2011


RMB'000

RMB'000

Profit before taxation

360,453

345,201

Tax at the applicable tax rate of 25%

90,113

86,300

Tax effect of non-deductible expenses

567

405

Tax effect of non-taxable income

-

-

Tax effect of exempt income

-

-

Different tax rate in different jurisdictions

2,149

134

Effect of deferred tax on undistributed PRC earnings

2,494

(24,906)

Withholding tax expense

-

-


95,323

61,933

 

            Naibu HK:

Naibu HK incurred losses for the financial years ended 31 December 2012 and 31 December 2011 respectively.  The statutory income tax rate applicable to the Company is 16.5%.

 

Naibu China:

On 16 March 2007, the National People's Congress promulgated the PRC Enterprise Income Tax Law (the "New Tax Law"), which became effective from 1 January 2008.

 

Based on the "Income Tax Law of the PRC for Enterprises with Foreign Investments and Foreign Enterprises", Naibu China is entitled to full exemption from income tax for the first two years and a 50% reduction in income tax for the next three years starting from its first profitable year of operations. The first profit-making year of Naibu China commenced in 2006. Naibu China has obtained written confirmation from the relevant PRC tax authorities confirming that its 5 year tax holiday period commenced from 1 January 2006. Naibu China was entitled to full exemption of income tax for two years from 1 January 2006 to 31 December 2007, followed by a three year 50% relief from 1 January 2008 to 31 December 2010.  Effective from 1 January 2011, Naibu China will be subject to Enterprise Income Tax ("EIT") at a standard rate of 25%.

 

5.         DIVIDENDS

 

Dividends disclosed represent dividends on ordinary shares declared and paid by the Company to its equity holders.  

 

There are no dividends declared and paid by the Company during the year ended 31 December 2012 and 2011.

 

The Company has resolved to pay a final dividend in respect of the year ended 31 December 2012 of 4 pence per share, subject to shareholder approval and the appropriate approval of the Chinese authorities. .

 



6.         EARNINGS PER SHARE

 

(a)        Basic

 

Basic earnings per share is calculated by dividing the profit attributable to equity holders of the Company by the weighted average number of ordinary shares in issue during the period:

 



Year ended 31 December



2012

2011



Proforma

Proforma

Profit attributable to equity holders of the Company (RMB'000)


265,130

283,268

Weighted average number of ordinary shares in issue ('000)


53,629

50,000

Profit per share (RMB)


4.94

5.67

 

(b)        Diluted

 

Diluted earnings per share is calculated by adjusting the weighted number of ordinary shares in issue to assume conversion of all potential dilutive ordinary shares during the period.

 



Year ended 31 December



2012

2011



Proforma

Proforma

Profit attributable to equity holders of the Company (RMB'000)


265,130

283,268

Weighted average number of ordinary shares in issue ('000)


53,629

50,000

Profit per share (RMB)


4.94

5.67

 

 

 

7.         LONG-TERM PREPAYMENT

 

Long-term prepayment refers to the prepayment of store renovation for distributors, which is amortised for a period of three years.

 

The renovation prepayment of exclusive stores for distributors during the year has a total amount of RMB 54,287,000, in which RMB 25,348,000 was incurred in September 2012, and RMB 28,939,000 was incurred in November 2012.

 

The amortisation amount of the renovation prepayment for the year was RMB 2,916,000. Therefore, the carrying amount of the prepayment at the end of the year was RMB 51,371,000. In which, the prepayment for current period (less than one year) is RMB 18,096,000, and the long-term prepayment (more than one year) is RMB 33,275,000.

 



 

8.         STATED CAPITAL ACCOUNT

 

Ordinary shares of no par value

 

Issued and fully paid

Year ended 31 December 2012

 

As at 1 January 2012

Number

RMB'000

Issue of shares on incorporation

2

-

Share issue (9 February 2012)

990,000

801

Share issue (13 February 2012)

9,998

8

Share split (27 February 2012)

49,000,000

-

Share issued on admission to trading on AIM, net of issue costs

 

4,838,716

 

53,505




As at 31 December 2012

54,838,716

54,314

 

On incorporation, the company issued 2 Ordinary shares of no par value.  On 8 February 2012, the Company issued 990,000 Ordinary share of no par value.  On 13 February 2012, the Company issued 9,998 Ordinary shares of no par value.  On 27 February 2012, the Company subdivided each issued Ordinary share of no par value into 50 Ordinary shares of no par value at HKD0.02 per share.

 

The admission of the enlarged Share Capital to trading was effective on 5 April 2012 with a placing of 4,838,716 Ordinary shares of no par value at 124 pence per share (RMB 60,131,478).  The share issue costs associated with this transaction of RMB 6,626,818 (GBP 661,234) have been deducted from the Company's stated capital.

 

Under the Memorandum of Association, the Company is authorised to issue an unlimited number of Ordinary shares of no par value.

 



9.         SEGMENT INFORMATION

 

Business segment

 

The Group's primary format for reporting segment information is business segments, with each segment representing a product category. The Group's business segments are organised as follows:

 

(i)         Design, manufacture and sale of sports and leisure footwear

 

Design, manufacture and sale of sports and leisure footwear which comprise athletic footwear designed for specific sporting activities such as running, tennis, basketball and skate board as well as leisure footwear, marketed under the "Naibu" brand.

 

(ii)        Design and sale of sports apparels and accessories

 

Sports apparels and accessories comprise apparels for specific sporting activities such as running, tennis, basketball and leisure; functional apparels such as t-shirts, polo shirts and windbreakers; and accessories such as sport bags, caps, socks, protective guards and basketballs, marketed under the "Naibu" brand.

 

Geographical segment

 

As the business of the Group is principally engaged in the PRC, no reporting by geographical location of operation is presented.

 

The segment information provided to the management for the reportable segments for the financial year from 1 January 2012 to 31 December 2012is as follows:

 

(A)       Financial Period from 1 January 2012 to 31 December 2012

 


Shoes

Apparels and Accessories

Unallocated

Total


RMB'000

RMB'000

RMB'000

RMB'000

Revenue:





Revenues from external customers (1)

919,271

757,342

-

1,676,613






Results:





Interest income

703

579

208

1,490

Depreciation

3,744

1,771

-

5,515

Segment profit

186,982

182,971

(9,500)

360,453






Assets:





Addition to non-current assets (2)

19,853

16,355

-

36,208

Reportable segment assets

377,472

330,506

463,075

1,171,053






Liabilities:





Reportable segment liabilities

85,801

100,172

12,997

198,970

 



 

(1)        Revenues from the Group's top two customers amounted to approximately RMB 356,127,551, which contributed 11% and 10% of the Group's total revenue. These revenue are attributable for both the shoes and apparels and accessories segments.

 

(2)        Additions to non-current assets relate to additions to property, plant and equipment.

 

(B)       Reconciliation of reportable segment revenue, profit and loss, assets and liabilities

 


For the financial year ended 31 December 2012


RMB'000

Profit or loss


Total profit for reportable segments

369,953

Unallocated other income and expenses


Administrative expenses

(9,500)

Profit before taxation

360,453



 


RMB'000

Assets


Total assets for reportable segments

707,978

Unallocated


Cash and cash equivalents

452,906

Amount due from a related party

10,169


1,171,053

Liabilities


Total liabilities for reportable segments

185,973

Unallocated


Deferred income tax liabilities

7,860

Other payables and accruals

4,076

Amount due to a director/shareholder

1,059


198,970

 



 

The segment information provided to the management for the reportable segments for the financial year from 1 January 2011 to 31 December 2011is as follows:

 

(A)       Financial Year from 1 January 2011 to 31 December 2011 

 


 

 

Shoes

Apparels and

Accessories

 

 

Unallocated

 

 

Total


RMB'000

RMB'000

RMB'000

RMB'000

Revenue:





Revenues from external customers (1)

829,546

662,099

-

1,491,645






Results:





Interest income

297

238

-

535

Depreciation

2,440

229

-

2,669

Segment profit

182,662

164,121

(1,582)

345,201






Assets:





Additions to non-current assets (2)

20

-

-

20

Reportable segment assets

357,806

254,075

286,901

898,782






Liabilities:





Reportable segment liabilities

151,089

86,182

9,341

246,612

 

(1)  Revenues from the Group's top two customers amounted to approximately RMB 317,642,033, which contributed 11% and 10% of the Group's total revenue. These revenues are attributable to both the shoes and apparels and accessories segments.

(2)  Additions to non-current assets relate to additions to property, plant and equipment.

 

 

(B) Reconciliation of reportable segment revenue, profit and loss, assets and liabilities


For the financial

year

ended 31

December

2011


RMB'000

Profit or loss


Total profit for reportable segments

346,783

Unallocated other income and expenses


     Administrative expenses

(1,582)

Profit before taxation

345,201

 



 


For the financial year ended 31 December 2011


RMB'000

Assets


Total assets for reportable segments

611,882

Unallocated


   Cash and cash equivalents

286,801

   Amount due from a related party

100


898,783

Liabilities


Total liabilities for reportable segments

237,271

Unallocated


     Deferred income tax liabilities

5,367

     Other payables and accruals

3,956

     Amount due to a director/shareholder

19


246,613

 

In addition to the transactions and balances detailed elsewhere in this report, the Group had the following transactions with related parties at agreed rates:

 


Year ended 31

December


2012

2011


RMB'000

RMB'000




Rental paid to a related party(1)

960

960

Deposit paid to related party(1) for acquisition of factory premise

-

10,000

Other receivable from a related party (deposit payment)

10,100

-

Other payable to shareholders

1,059

-

Directors' remuneration (inclusive of retirement scheme contribution)



-       Mr. Lin Huoyan

1,414

263

-       Mr. Lin Congdeng

1,239

165

-       Ms. Lin Zhenzhi

149

133

      -      Mr. Chi Keung (Kenny) Law

980

-

      -      Mr. Giles Elliott

459

-

      -      Mr. David Thomas

306

-

      -      Mr. Stephen Cheung

306

-

 

(1)        Related party relates to Fujian Jun Xiang (formerly known as Quanzhou Naibu Sports Co., Ltd) in which a director, Mr Lin Huoyan was the shareholder in 2008 and 2009. Mr Lin Huoyan transferred his shareholding to his mother in 2010.

 

The ultimate controlling shareholder of the Group is Mr Lin Huoyan.

 

- Ends -


This information is provided by RNS
The company news service from the London Stock Exchange
 
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