The Group's interest rate risk arises from interest-bearing
financial liabilities that mainly are short-term borrowings
arrangement. Borrowings issued at variable rates expose the Group
to cash flow interest rate risk. Borrowings issued at fixed rates
expose the Group to fair value interest rate risk.
21.3.1 Interest rate sensitivity analysis
The sensitivity analysis below has been determined based on the
exposure to variable interest rate for non-derivative instruments
at the balance sheet date. For variable-rate borrowings, the
analysis is prepared assuming the amount of liability outstanding
at the balance sheet date was outstanding for the whole year.
A 100 basis point increase or decrease is used when reporting
interest rate risk internally to key management personnel and
represents management's assessment of the reasonably possible
change in interest rate.
Group As at 31 December 2013 As at 31 December 2012
Change in interest rate Change in interest rate
+1 % -1 % +1 % -1 %
RMB RMB RMB RMB
Cash and banks 427,904 (30,821) 318,098 (42,949)
Bank loan 144,500 (144,500) 135,000 (135,000)
572,404 (175,321) 453,098 (177,949)
=========== ============= =========== =============
As at 31 December 2013, if interest rate had been 100 basis
points higher/lower and all other variables were held constant,
this would increase/decrease the group's profit after tax and
retained earnings by approximately RMB 572,404 / (RMB 175,321).
The 100 basis point increase/(decrease) represents management's
assessment of a reasonably possible change in interest rates over
the period until the next annual balance sheet date.
21.4 Foreign currency risk management
The Group's ultimate holding company is located in Jersey,
Channel Island and its monetary assets, liabilities and
transactions are principally denominated in the functional currency
of respective group entities. However, most of the transactions of
the Group are carried out in the PRC where Auhua Holdings Group
operates. The Group's sales transactions, all related purchases and
loan borrowings transactions are denominated in Renminbi
("RMB").
The Group has no significant exposure to foreign exchange risk
as its cash flows and financial assets and liabilities are mainly
denominated in Renminbi. The amount to be paid and received in RMB
are expected to offset one another, no hedging activity is
undertaken. For the financial year, the Group's expenses incurred
were in combination of RMB and Singapore Dollar ("SGD").
21.5 Foreign currency sensitivity
The Group is facing the following foreign currency exposure:
As at 31 December 2013
Financial assets RMB(000's) S$(000's)
Accounts receivables 73,577 -
Other receivables 1,322 -
Prepayments 19,385 -
Cash and bank balance 48,666 -
Financial liabilities
Accounts payables (11,138) -
Other payables (2,866) (346)
Short term borrowings (5,450) -
Accruals (233) (102)
Accrued salaries (735) -
Tax liabilities (7,905) -
Due to shareholders/
director (4,870) (277)
Due to related company - (279)
------------------------ ----------- ----------
Short term exposure 109,753 (1,004)
------------------------ ----------- ----------
As at 31 December 2012
Financial assets RMB(000's) S$(000's)
Accounts receivables 43,707 -
Other receivables 13,882 -
Prepayments 1,010 -
Cash and bank balance 40,054 -
Due from related
company - -
Financial liabilities - -
Accounts payables (8,834) -
Other payables (1,612) (587)
Short term borrowings (13,500) -
Accruals - (803)
Accrued salaries (672) -
Tax liabilities (6,449) -
Due to shareholders/
director (4,870) (261)
Due to related company - (233)
------------------------ ----------- ----------
Short term exposure 62,716 (1,884)
------------------------ ----------- ----------
21.6 Credit risk
Credit risk refers to the risk that a counterparty will default
on its contractual obligations resulting in financial loss to the
Group. The Group has adopted a policy of only dealing with
creditworthy counterparties. The Group's exposure and the credit
ratings of its trading counterparties are monitored by the board of
directors to ensure that the aggregate value of transactions is
spread amongst approved counterparties.
The Group's principal financial assets are cash and cash
equivalents, trade debtors and other accounts receivables. Cash
equivalents include amounts held on deposit with financial
institutions.
The Group has no significant concentrations of credit risk. Cash
is placed with established financial institutions. The maximum
exposure to credit risk is represented by the carrying amount of
each financial asset in the balance sheet.
The group is exposed to credit risk on its trade receivables
balances. The board reviews these balances on a regular basis and
ensures that appropriate action is taken to maximise cash
flows.
22. Contingencies
The Group had no material contingent liabilities as at 31
December 2013 and 31 December 2012.
23. Earnings per share
The calculation of earnings per share is based on the following
earnings and number of shares.
Group Year ended Year ended
31 December 2013 31 December 2012
RMB'000 RMB'000
Profit for the year from continuing
operations 47,877 44,633
Weighted average number of
ordinary shares in issued (number)
- basic 65,417,552 62,618,565
Weighted average number of
ordinary shares in issued (number)
- diluted 66,053,202 63,094,435
Basic earnings per share (RMB) 0.73 0.71
================== ==================
Diluted earnings per share
(RMB) 0.73 0.71
===== =====
Diluted earnings per share is calculated by adjusting the
weighted average number of ordinary shares outstanding to assume
conversion of all dilutive potential shares. The Company has one
category of dilutive potential ordinary shares: share options.
24. Post Balance Sheet Events
On 30 April the Company signed a letter of offer for a standby
facility of up to GBP10 million with Sunmax Global Capital Private
Limited.
This information is provided by RNS
The company news service from the London Stock Exchange
END
FR EASSNESNLEFF
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