TIDMGWIN
RNS Number : 7150A
Gowin New Energy Group Limited
30 September 2015
30 September 2015
Gowin New Energy Group Limited
("GNE" or the "Group")
(ISDX: GWIN)
Interim Results for the Six Months Ended 30 June 2015
Gowin New Energy Group Limited, the China-based group engaged in
the research and development, manufacturing and sales of LED
lighting products, today announces its unaudited financial results
for the six months ended 30 June 2015.
Chairman's Statement
2015 Year to Date Overview
The year began with the Group continuing its search for
strategic investors to facilitate business growth and ensure
sustainable relief from the working capital issues experienced in
2014.
On 28 January 2015, the Group announced a fund raising of GBP1.2
million, conditional upon the passing of resolutions at an
extraordinary general meeting (EGM).
On 16 February 2015, the Group announced the passing of several
resolutions at an EGM including the application of 60 million new
shares at 2p per share to be admitted to AIM on 17 February, 2015.
On 15 April 2015, a further GBP400,000 was raised through the
issuance of 40 million new ordinary shares at 1p per share.
Collectively, these proceeds provided short term working capital
that would allow the Group to embark upon its planned
transformation.
The Group announced on 26 February 2015 that its ordinary shares
commenced trading on the ISDX Growth Market. On 27 March 2015 the
Company announced that trading in its ordinary shares on AIM would
be cancelled with effect from 30 March 2015.
On 29 May 2015, the Group announced the appointments of Mr. Chen
Chih Lung as Chief Executive Officer (CEO) and Mr. Chou Huan Nan as
Non-executive Director. Chen and Chou are key representatives of
Choice Only International Ent Co Limited. On 10 June 2015, the
Group announced the resignation of Executive Director Chinsen Hsieh
from the Board.
Mr. Chen and Choice Only International Ent Co Limited were
investors in the aggregate GBP1.6 million fund raising in early
2015. The Choice investment is strategic because it offers the
Group a new sales channel for LED technologies within Choice's
already successful and innovative consumer electronic products
portfolio.
Financial Results
During the six months ended 30 June 2015, the Group recorded
turnover of RMB 24.7 million (for six months ended 30 June 2014:
RMB 51.4 million). This decline in revenue was due to the Group's
overall focus on change management for a sustainable future,
continuing preparation for its consumer products channel through
strategic partner Choice and the decision not to pursue
construction projects with long payment terms. The Group continues
to implement better credit policies and tougher qualification
criteria for government street lighting projects in relation to the
Chinese market as well as investments and preparation for export
growth in the near future. The Group's top customers for the first
half of the year were primarily street lighting in Henan province
(China) together with a domestic motor vehicles lighting project
and indoor lighting solutions in domestic and overseas commercial
properties.
The Group continues to prepare the way to address a trend
internationally to indoor and home lighting products and has
engaged selected international 'big name / high volume' retailers.
Because of the Group's serious working capital constraints up until
February 2015, penetration into prominent international retailers
has been minimal to date. The Group remains optimistic about its
development of these markets over the next six to twelve
months.
The loss after tax for the six months ended 30 June 2015
amounted to RMB 12.6 million (for six months ended 30 June 2014:
Profit of RMB 2.0 million). Gross margins have been partly affected
by price cutting from competitors as well as payments to
subcontractors in lieu of manufacturing in-house.
The Group's major operating expenses, comprising research and
development and administration, amounted to RMB 13.3 million (for
six months ended 30 June 2014: RMB 5.2 million). Such expenses
mainly comprised (i) research and development expenses to the sum
of RMB 0.4 million (for six months ended 30 June 2014: RMB 1.1
million) and (ii) total staff costs to the sum of RMB 4.2 million
(for six months ended 30 June 2014: RMB 3.3 million).
The Group's Accounts Receivable ('AR') value in the first half
of 2015 is RMB 101.6 million (31 December 2014: RMB 92.2 million).
The 6-monthly increase is because of continuing slower than desired
aged AR collections.
Progress has being slow due to the challenging Chinese economy.
Key Developments
As previously communicated, the Group's future sales and
marketing emphasis will be on export business growth, including
sales to global retail stores requiring indoor lighting solutions,
jointly developing and selling all types of household and
commercial lighting. Additionally, the Group will continue to
pursue selective Chinese government and commercial outdoor lighting
solutions, where they meets the Group's recently adopted tighter
customer qualification guidelines.
The Group continues its commitment to research and development;
a critical success factor for sustainable business success. The
R&D team is experienced and working on a number of indoor and
outdoor lighting innovations across the value chain including power
supply, integrated chips, energy efficiency and WIFI control
solutions. A number of special purpose lighting solutions are also
in development, where competition is limited and value creation
broad.
Corporate Governance
There have been a number of changes to the Board including the
appointment of a new CEO, departure of one Executive Director and
the replacement of a Non-executive Director. The Board is
considering the addition of another independent Non-Executive
Director and expects to make an announcement in due course.
In the Group's 2013 and 2014 Annual Reports, the Board committed
itself to a strong agenda on Business Strategy, aimed at ensuring
the Group genuinely creates differentiation in the market place,
enhancing export sales and increasing the quality and scale of its
clients and eco-system of partners along with its products and
service delivery. The goals and planned focus areas remain the same
albeit working capital constraints prior to February 2015 have
delayed implementation.
The Board continues to focus on enhancing corporate governance
in line with the UK Quoted Companies Alliance (QCA) code.
Furthermore, all directors attended a special training session on
ISDX Listing Rules on 29 June 2015.
Current Trading and Outlook
The Group has previously communicated its transformation agenda
for 2015. It affects all parts of the business under the leadership
of new CEO Mr Chen. With the recent alleviation of working capital
constraints, this agenda can be accelerated. A new permanent Chief
Financial Officer (CFO), whose role will be to drive financial
reforms in the Group as well as give oversight to new strategic
developments, should be appointed in 4(th) quarter 2015.
Accounts Receivable management will continue to be a very key
focus of the Group. Initiatives previously announced remain
relevant.
The Group will continue to leverage its inherent strength in
exploiting its own R&D and innovation advantages, which reflect
the heritage of the Group since its inception.
The Group has emerged from its near-death experience and looks
forward to the future. New market development and business
strategies take time to implement. The Board is evaluating various
options for growth and looks forward to announcing specific
initiatives when they materialise. Repetition of restrictive
working capital constraints is not envisaged. ISDX remains a
suitable platform for GNE shares.
Notes of Appreciation
I wish to once again thank our shareholders, customers and
business partners for their support of the Group in 2015. During
the restructuring process revenue growth may be relatively slow.
However, the Board is confident about the future prospects of the
Group's business and believes shareholder patience will be
rewarded. Finally, on behalf of the Board and senior management, I
would like to extend our sincere appreciation to all our
indispensable staff for their ongoing hard work and business
contribution in 2015.
Garry Willinge
Non-Executive Chairman
30 September 2015
The directors of Gowin New Energy Group Limited accept
responsibility for this announcement.
For further information please visit www.gowinyichia.com or
contact the following:
Garry Willinge Gowin New Energy Group Limited +852 9100 9972
David Scott / James Dewhurst Alexander David Securities Limited +44 20 7448 9820
Gowin New Energy Group Limited
Condensed consolidated statement of comprehensive income
For the six months ended 30 June 2015
Six months Six months
ended ended
30 June 30 June
2015 2014
RMB'000 RMB'000
Continuing Operations Note (Unaudited) (Unaudited)
Revenue 7 24,677 51,403
Cost of sales (24,297) (39,941)
----------- -----------
Gross profit 380 11,462
Operating expenses
Research and development expense (351) (1,120)
Provision for doubtful debts (3,800) -
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September 30, 2015 05:54 ET (09:54 GMT)
Administrative expenses (9,132) (4,097)
Other income 8 784 70
----------- -----------
Operating (loss)/profit (12,119) 6,315
Finance income 9 - 346
Finance costs 9 (444) (442)
----------- -----------
(Loss)/profit before tax 10 (12,563) 6,219
Tax 11 - (4,219)
----------- -----------
(Loss)/profit for the period (12,563) 2,000
Other comprehensive income - -
----------- -----------
Total comprehensive (loss)/income for the
period (12,563) 2,000
=========== ===========
Attributable to:
Owners of the parent (12,563) 2,000
Non-controlling interest - -
----------- -----------
Total comprehensive income for the period (12,563) 2,000
=========== ===========
(Loss)/earnings per share attributable to
owners of the parent during the period expressed
in RMB cents per share
Basic and diluted (loss)/earnings per share 12 (0.03) 0.85
=========== ===========
Gowin New Energy Group Limited
Condensed consolidated statement of financial position
As at 30 June 2015
As at As at As at
Note 30 June 30 June 31 December
2015 2014 2014
RMB'000 RMB'000 RMB'000
(Unaudited) (Unaudited) (Audited)
Assets
Non-current assets
Property, plant and equipment 14,748 17,655 16,126
Deferred tax assets 194 194 194
------------ ----------- ------------
Total non-current assets 14,942 17,849 16,320
------------ ----------- ------------
Current assets
Inventories 5,085 18,086 13,780
Trade and other receivables 14 120,288 146,189 114,118
Cash and cash equivalents 15 6,596 292 89
------------ ----------- ------------
Total current assets 131,969 164,567 127,987
------------ ----------- ------------
Total assets 146,911 182,416 144,307
============ =========== ============
Equity and liabilities
Equity attributable to
owners of the Company
Share capital 18 44,571 34,571 34,571
Share premium 19,988 14,677 14,677
Reverse acquisition reserve (10,049 ) (10,049 ) (10,049 )
(Accumulated losses)/retained
earnings (22,785 ) 25,325 (10,222 )
------------ ----------- ------------
Total equity 31,725 64,524 28,977
------------ ----------- ------------
Liabilities
Current liabilities
Trade and other payables 16 107,497 110,203 95,182
Bank borrowings 17 7,689 7,689 7,689
------------ ----------- ------------
Total current liabilities 115,186 117,892 102,871
------------ ----------- ------------
Non-current liabilities
Non-current trade payables - - 12,459
Total liabilities 115,186 117,892 115,330
------------ ----------- ------------
Total equity and liabilities 146,911 182,416 144,307
============ =========== ============
Net current assets 16,783 46,675 25,116
============ =========== ============
Total assets less current
liabilities 31,725 64,524 41,436
============ =========== ============
Gowin New Energy Group Limited
Condensed consolidated statement of changes in equity
For the six months ended 30 June 2015
Attributable to owners of the Company
------------------------------------------------------------------------------
Reverse acquisition Retained earnings/
Share capital Share premium reserve (accumulated losses) Total
RMB'000 RMB'000 RMB'000 RMB'000 RMB'000
For the six months
ended 30 June 2014
(Unaudited)
Balance at 1 January
2014 (Audited) 34,571 14,677 (10,049) 23,325 62,524
Profit for the period - - - 2,000 2,000
Other comprehensive
income for the period - - - - -
-------------- -------------- ---------------------- ---------------------- --------------
Total comprehensive
income for the
period - - - 2,000 2,000
Balance as at 30 June
2014 34,571 14,677 (10,049) 25,325 64,524
-------------- -------------- ---------------------- ---------------------- --------------
For the six months
ended 30 June 2015
(Unaudited)
Balance as at 1
January 2015
(Audited) 34,571 14,677 (10,049) (10,222) 28,977
Loss for the period - - - (12,563) (12,563)
Other comprehensive
income for the period - - - - -
-------------- -------------- ---------------------- ---------------------- --------------
Total comprehensive
income for the
period - - - (12,563) (12,563)
Total transactions
with owners,
recognised directly
in equity
Issue of shares 10,000 5,311 - - 15,311
-------------- -------------- ---------------------- ---------------------- --------------
Balance as at 30 June
2015 44,571 19,988 (10,049) (22,785) 31,725
============== ============== ====================== ====================== ==============
Gowin New Energy Group Limited
Condensed consolidated statement of cash flows
For the six months ended 30 June 2015
Six months Six months
ended ended
30 June 30 June
2015 2014
RMB'000 RMB'000
(Unaudited) (Unaudited)
Cash Flows from Operating Activities
(Loss)/profit before tax (12,563) 6,219
Depreciation 1,378 1,299
Finance costs 435 435
Finance income - (346)
Decrease in inventories 8,695 15,312
Increase in trade and other receivables (6,170) (38,823)
(Decrease)/increase in trade and other payables (144) 15,866
----------- -----------
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September 30, 2015 05:54 ET (09:54 GMT)
Net cash used in operating activities (8,369) (384)
Cash Flows from Investing Activities
Purchase of property, plant and equipment - (2,550)
Deposit paid in respect of leasehold improvement - 2,231
Net cash used in investing activities - (319)
----------- -----------
Cash Flows from Financing Activities
Issue of shares 15,311 -
Finance costs (435) (435)
Net cash generated from/(used in) financing
activities 14,876 (435)
Net increase/(decrease) in cash and cash equivalents 6,507 (792)
Cash and cash equivalents at beginning of
period 89 1,084
----------- -----------
Cash and cash equivalents at end of period 6,596 292
=========== ===========
Gowin New Energy Group Limited
Notes to the condensed consolidated interim financial
information
For the six months ended 30 June 2015
1. General information
Gowin New Energy Group Limited ("Gowin") was incorporated in the
Cayman Islands. The registered office of the Company is located at
Cricket Square, Hutchins Drive, PO Box 2681, Grand Cayman,
KY1-1111, Cayman Islands and the principal place business is
located at Xiakeng Village, Tangjiano Management Zone, ChaShan
Town, DongGuan, GuangDong, China
The principal activity of the Company is investment holding. The
principal activity of the Company's subsidiaries (together with the
Company referred as to the "Group") is engaged in the research and
development (R&D), manufacturing and sales of LED lighting
products in the People's Republic of China (the "PRC"). There is no
seasonality or cyclicality of the Group's operations.
The Company's shares are listed on the ICAP Securities &
Derivatives Exchange (ISDX) Growth Market.
The condensed consolidated interim financial information are
presented in Renminbi ("RMB"), which is the functional currency of
the Group, and all values are rounded to the nearest thousand
except when indicated otherwise.
2. Basis of preparation
The condensed consolidated interim financial information have
been prepared using accounting policies consistent with
International Financial Reporting Standards and in accordance with
International Accounting Standard 34 Interim Financial Reporting.
The condensed consolidated interim financial information should be
read in conjunction with the annual financial statements for the
year ended 31 December 2014, which have been prepared in accordance
with International Financial Reporting Standards (IFRS) as adopted
by the European Union.
The condensed interim financial information set out above do not
constitute statutory accounts. They have been prepared on a going
concern basis in accordance with the recognition and measurement
criteria of International Financial Reporting Standards (IFRS).
Statutory financial statements for the year ended 31 December 2014
were approved by the Board of Directors on 27 June 2015. The report
of the auditors on those financial statements was unqualified.
The condensed consolidated interim financial information of the
Company have not been audited but have been reviewed by the
Company's auditor, PKF Littlejohn LLP.
3. Going Concern
The Group meets its day-to-day working capital requirements
through its bank facilities and operational cash flows. The current
economic conditions continue to create uncertainty, particularly
over (a) the delays in receiving payments from its trading
counter-parties; (b) the availability of existing or new bank
finance on acceptable terms; (c) whether the expired bank loan will
be called for re-payment by the lending institution; and (d)
whether the Group's suppliers will continue to provide extended
payment terms.
Note 14 details the amounts due from trade receivables and the
ageing of those trade receivables. Cash collections from these
counter-parties have not been in accordance with the agreed terms
of trade although significant progress has been made in the last
six months in obtaining payments from customers. A number of the
trade receivables are related to government building projects, and
there have been significant delays in contractors receiving payment
for such projects from the government, which has in turn led to
delays in the Group receiving payments. However, Management remains
confident, after discussions with the counter-parties, that payment
will eventually be received by the counter-parties who will then be
able to meet their obligations to the Group.
Note 17 details the bank borrowings of the Group. Certain loans
are past their agreed redemption date, but the lender has not
formally sought repayment of these sums and a higher rate of
interest continues to be charged. General conditions in the PRC
banking sector have been constrained over recent months.
3. Going Concern (continued)
The PRC government has made it harder for banks to lend to SMEs
which has had an impact on both competitors and customers, has led
to the above-mentioned increase in accounts receivable and the
availability of new or additional borrowing to the Group. These
factors may have a bearing on whether existing borrowings will be
renewed or renewed on terms acceptable to the Group. Partly to
counter the lack of bank finance the Company has raised RMB 15m in
new equity during the period. The directors are in discussion with
shareholders that may result in additional equity being issued.
The Directors have prepared cash flow forecasts for the Group
which reflect reasonably possible changes in trading performance.
These show that the Group should be able to operate within its
current cash balances and prudent assumptions as to future changes
in working capital.
The Directors therefore have a reasonable expectation that the
Group has adequate resources to continue in operational existence
for the foreseeable future. The Group therefore continues to adopt
the going concern basis in preparing its condensed consolidated
interim financial information.
4. Risks and uncertainties
The Board continuously assesses and monitors the key risks of
the business. The key risks that could affect the Group's medium
term performance and the factors that mitigate those risks have not
substantially changed from those set out in the Group's 2014 Annual
Report and Financial Statements, a copy of which is available on
the Group's website: www.gowinyichia.com. The key financial risks
are credit risk; interest rate risk; liquidity risk and foreign
exchange risk.
5. Critical accounting estimates and judgements
The preparation of condensed consolidated interim financial
information requires Management to make estimates and assumptions
that affect the reported amounts of assets and liabilities and
disclosure of contingent assets and liabilities at the end of the
reporting period. Significant items subject to such estimates are
set out in Note 5 of the Group's 2014 Annual Report and Financial
Statements. The nature and amounts of such estimates have not
changed significantly during the interim period.
6. Significant accounting policies
The condensed consolidated interim financial information have
been prepared under the historical cost convention.
The accounting policies and methods of computation used in the
preparation of these condensed consolidated interim financial
information are consistent with those used in the 2014 annual
accounts, except for the adoption of the amendments and
interpretations issued by the International Accounting Standards
Board that are mandatory for accounting periods beginning 1 January
2015.
The effect of the adoption of these amendments and
interpretations was not material to the Group's results or
financial position.
7. Revenue and segment information
Revenue represents the invoiced value of goods sold and is net
of value-added tax and sales return. There is no seasonality or
cyclicality of the Group's operations.
For the periods presented, the Group as a whole is an operating
segment since the Group is only engaged in optoelectronic products
and related business. No Group's geographical information has been
disclosed as the majority of the Group's operating activities are
carried out in the PRC (for the purpose of preparing the financial
statements, the PRC refers to the Mainland China and Hong Kong) and
the Group's assets are all located in the PRC.
8. Other income Six months Six months
ended ended
30 June 2015 30 June
2014
RMB'000 RMB'000
(Unaudited) (Unaudited)
Government grant - 70
Gain on miscellaneous sales 784 -
------------ -----------
784 70
============ ===========
9. Finance income and finance costs Six months Six months
ended ended
30 June 2015 30 June
2014
RMB'000 RMB'000
(Unaudited) (Unaudited)
Interest income on loan to third party - 346
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September 30, 2015 05:54 ET (09:54 GMT)
------------ -----------
Finance income - 346
============ ===========
Bank charges (9) (7)
Bank borrowing interest expenses (435) (435)
------------ -----------
Finance costs (444) (442)
============ ===========
Net finance costs (444) (96)
============ ===========
10. Expense by nature Six months Six months
ended ended
30 June 2015 30 June
2014
RMB'000 RMB'000
(Unaudited) (Unaudited)
Depreciation 1,378 1,299
Provision for impairment on receivables - -
Cost of materials consumed
-Research and development expenses 110 561
-Cost of sales 21,360 37,427
------------ -----------
21,470 37,988
Minimum lease payments for leases
-Total lease payments 515 484
-Portion paid by an equity holder - (124)
------------ -----------
515 360
Staff costs 4,231 3,395
Other operating expenses 6,186 2,116
------------ -----------
Total cost of sales, research and development
expenses and administrative expenses 33,780 45,158
============ ===========
11. Income tax Six months Six months
ended ended
30 June 30 June
2015 2014
RMB'000 RMB'000
(Unaudited) (Unaudited)
Current income tax for the period - 1,888
Under provision for prior year - 2,331
----------- -----------
- 4,219
=========== ===========
The Group is not subject to taxation in the Cayman Islands and
British Virgin Islands.
No provision for Hong Kong profits tax has been made as the
Group did not generate any assessable profits arising in Hong Kong
during the six months ended 30 June 2015 (six months ended 30 June
2014: nil).
Under the law of the PRC on Enterprise Income Tax (the "EIT
Law") and Implementation Regulation of the EIT Law, the tax rate of
the PRC subsidiaries is 25% from 1 January 2008 onwards.
No provision of PRC Enterprise Income Tax was provided as the
Group incurred losses in current period.
12. (Loss)/earnings per share
(a) Basic (loss)/earnings per share
Loss per share for the period ended 30 June 2015 is calculated
by dividing RMB12,563,000 loss for the period attributable to the
equity holders of the Company by the weighted number of shares of
413,778,474 of 2015 for the purpose of comparison. Earnings per
share for the period ended 30 June 2014 is calculated by dividing
RMB 2,000,000 profit for the period attributable to the equity
holders of the Company by the weighted number of shares of
233,346,681 of 2014 for the purpose of comparison.
Six months Six months
ended ended
30 June 2015 30 June
2014
RMB'000 RMB'000
(Unaudited) (Unaudited)
Basic (loss)/earnings per share (RMB
cents) (0.03) 0.85
============ ===========
(b) Diluted (loss)/earnings per share
No diluted (loss)/earnings per share are presented as there are
no potential ordinary shares outstanding for the six months ended
30 June 2015 and 2014.
13. DIVIDEND
No dividends were proposed during the reporting period and the
Directors do not recommend the payment of an interim dividend for
the six months ended 30 June 2015.
14. Trade and other receivables As at As at
30 June 31 December
2015 2014
RMB'000 RMB'000
(Unaudited) (Audited)
Trade receivables 101,603 92,230
Prepayment 11,142 13,733
Deposits and other receivables 7,543 7,544
Amounts due from related parties - 611
------------ ---------------
120,288 114,118
============ ===============
The aging analysis of the Group's trade receivables after
impairment based on delivery date is as follows:-
As at As at
30 June 31 December
2015 2014
RMB'000 RMB'000
(Unaudited) (Audited)
Current trade receivables
0 to 180 days 31,096 54,560
181 to 365 days 51,945 37,670
Over 365 days 18,562 -
----------- -----------
101,603 92,230
=========== ===========
As at As at
30 June 31 December
2015 2014
RMB'000 RMB'000
(Unaudited) (Audited)
Trade receivables 130,130 116,957
Less: Provision for doubtful debts (28,527 ) (24,727 )
----------- -----------
101,603 92,230
=========== ===========
The amounts due from related parties were unsecured,
interest-free and repayable on demand. The related parties are
controlled by a Director of the Group.
15. Cash and cash equivalents As at As at
30 June 31 December
2015 2014
RMB'000 RMB'000
(Unaudited) (Audited)
Cash at bank and in hand 6,596 89
=========== ===========
16. T Trade and other payables As at As at
30 June 31 December
2015 2014
RMB'000 RMB'000
(Unaudited) (Audited)
Trade payables 34,348 43,329
Accruals and other payables 40,887 34,139
Income tax payable 6,675 6,675
Amounts due to equity holders 25,587 23,498
----------- -----------
107,497 107,641
=========== ===========
(MORE TO FOLLOW) Dow Jones Newswires
September 30, 2015 05:54 ET (09:54 GMT)
An ageing analysis of the Group's trade payables based on the
invoice date is as follows:-
As at As at
30 June 31 December
2015 2014
RMB'000 RMB'000
(Unaudited) (Audited)
Current trade payables
0 to 30 days 15,214 17,993
31 to 60 days 10,283 12,877
Over 365 days 8,851 12,459
----------- -----------
34,348 43,329
=========== ===========
The amounts due to equity holders were unsecured, interest-free
and repayable on demand.
17. Bank borrowings
The short term bank borrowings are denominated in RMB and are
repayable within one year. The ranges of annual interest rates are
as follows:
As at As at
30 June 31 December
2015 2014
RMB'000 RMB'000
(Unaudited) (Audited)
Fixed-rate borrowings 6.372% -11.316% 6.372% -11.316%
=============== ===============
As at 31 December 2014 and 30 June 2015, the Group's bank
borrowings were supported by: (i) the personal guarantees put up by
an equity holder and a key management personnel of the Group; and
(ii) properties owned by an equity holder of the Group.
The bank borrowings as at 30 June 2015 represent a one-year loan
of RMB 12,000,000 from China Construction Bank ("CCB") advanced on
5 January 2012 which was supported by the guarantee issued by a
guarantee company, Dongguan Yin Tong Financial Guarantee Limited.
The Group then sub-lent RMB 6,200,000 to Dongguan Hehe Shizheng
Construction Co., Limited related to the guarantee company with
terms including maturity date, interest and overdue interest which
mirrored the terms between the Group and CCB.
The loan from CCB was due for repayment on 5 January 2013. The
Group did not fully repay the loan and the outstanding amount was
RMB 7,689,000 as at 30 June 2015. The Group was charged overdue
interest at the annual rate of 11.316% instead of the original rate
of 7.54%. The outstanding interest was approximately RMB 1,435,000
up to 30 June 2015. The Group did not obtain any renewal agreement
from CCB at the approval date of these condensed consolidated
interim financial information.
17. Bank borrowings (continued)
The loan to the Dongguan Hehe Shizheng Construction Co., Limited
was also due to be repaid on 5 January 2013 but neither the
Dongguan Hehe Shizheng Construction Co., Limited nor the guarantee
company repaid the principal, interest and overdue interest. The
principal and interest outstanding at 30 June 2015 were RMB
6,100,000 and RMB 1,068,000 respectively.
CCB is aware of these sub-lending arrangements such that CCB
would seek repayment of its debt directly from the guarantee
company and the Group would only be liable for RMB 1,600,000 of the
total RMB 7,689,000. The Directors have no reason to believe that
the Group will become liable for the results of the
sub-lending.
Bank borrowings at approximately RMB 7,689,000 carried loan
covenant which required the borrowing company to maintain a
liability to assets ratio determined under local accounting
standards of below 60% at all times. Management continually
evaluates compliance with the loan covenant and has concluded that
there has been no breach to such covenant.
18. Share capital
No. of 1p
ordinary
shares RMB'000
-------------- ---------
At 1 January 2014 and 31
December 2014 345,712,176 34,571
Shares issued on 28 January
2015 (note (i)) 60,000,000 6,000
Shares issued on 15 April
2015 (note (ii)) 40,000,000 4,000
-------------- ---------
At 30 June 2015 445,712,176 44,571
============== =========
(i) On 28 January 2015, 60,000,000 new ordinary shares were
issued at a placing price of GBP 0.02 per ordinary share for cash
to increase the working capital of the Group.
(ii) On 15 April 2015, 40,000,000 new ordinary shares were
issued at a placing price of GBP 0.01 per ordinary share for cash
to increase the working capital of the Group.
19. Operating leases
At the end of each financial period/year, the Group's future
aggregate minimum lease payments under non-cancellable operating
leases in respect of its factory premises are as following:
As at As at
30 June 31 December
2015 2014
RMB'000 RMB'000
(Unaudited) (Audited)
Within 1 year 967 967
Over 1 year and within 5 years 1,934 2,418
2,901 3,385
=========== ===========
20. Related party transactions
The ultimate controlling party of the Group is Mr Chen Chih
Lung.
(a) Apart from the balances with related parties disclosed in
the condensed consolidated statement of financial position and the
transactions disclosed in notes 14 and 16 to the condensed
consolidated interim financial information, the Group had no other
material transactions with its related parties during the six
months ended 30 June 2015 and 2014.
(b) Key management compensation
Key management includes directors and other key management
personnel of the Company.
The compensation paid or payable to key management for employee
services is shown below:-
Six months Six months
ended ended
30 June 30 June
2015 2014
RMB'000 RMB'000
(Unaudited) (Unaudited)
Salaries and other short-term employee
benefits 1,521 261
Contributions to defined contribution - -
retirement plan
----------- -----------
21. Contingent liabilities
Pursuant to judgment in two actions brought by China Guangfa
Bank ("CGB") against Dongguan Yichia Optoelectronics Technology
Co., Limited ("Yichia") and others for liability under guarantees
provided by Yichia and others in connection with loans made by CGB
to third parties. The third parties and/or guarantors (including
Yichia) are required to pay CGB the sum of RMB 4.3m plus interest,
default interest and compound interest.
No provision in respect of the liability under the guarantee
provided by Group has been recognized in the condensed consolidated
financial information as Management considers the borrowers and
guarantors are jointly and severally liable and the amount of the
Yichia's part of the obligation cannot be reliably estimated.
Pursuant to a deed of indemnity dated 1 November 2013, Juping
Cao, the sole shareholder of Yichia, has agreed to indemnify the
Group for all liability incurred in connection with this judgment.
In the event that Juping Cao defaults on her indemnity, Yichia will
be liable to pay the entire amount of its obligation.
A third party has brought an action against a subsidiary of the
Group in the Jiangxi Province Yingtan City People's Court, alleging
the subsidiary was a guarantor to a loan of RMB13,910,000 advanced
to a shareholder of the Company. The matter was brought to Qingyuan
Arbitration Commission on 3 December 2014 and the Commission issued
the Conciliation Agreement directing the parties come to an
agreement out of court. Since then the lender and borrower have
agreed terms which place no liability on the subsidiary or the
Company. However, this agreement is yet to be formally recorded by
the parties.
22. Approval of interim financial information
The condensed consolidated interim financial information was
approved by the Board of Directors on 30 September 2015.
INDEPENDENT REVIEW REPORT TO GOWIN NEW ENERGY GROUP LIMITED
Introduction
We have been engaged by the Company to review the condensed
consolidated interim financial information for the six months ended
30 June 2015 which comprise the condensed consolidated statement of
comprehensive income, condensed consolidated statement of financial
position, condensed statement of changes in shareholders' equity,
consolidated statement of cash flows and related notes. We have
read the other information contained in the interim financial
information and considered whether it contains any apparent
misstatements or material inconsistencies with the information in
the condensed consolidated interim financial information.
Directors' Responsibilities
The interim financial information is the responsibility of, and
has been approved by, the Directors. The Directors are responsible
for preparing the interim financial information in accordance with
International Accounting Standard 34 "Interim Financial Reporting"
("IAS 34") and the ISDX Rules for Issuers.
Our Responsibility
(MORE TO FOLLOW) Dow Jones Newswires
September 30, 2015 05:54 ET (09:54 GMT)
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