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SINO CONSTRUCTION LIMITED

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					SINO CONSTRUCTION LIMITED
(Incorporated in the Republic of Singapore)
(Registration No: 200613299H)

UNAUDITED FINANCIAL STATEMENT FOR THE SECOND QUARTER AND FIRST HALF YEAR
ENDED 30 JUNE 2010
PART I – INFORMATION REQUIRED FOR ANNOUNCEMENTS OF QUARTERLY (Q1, Q2 & Q3), HALF YEAR
AND FULL YEAR RESULTS


1(a)      An income statement (for the group) together with a comparative statement for the corresponding
          periods of the immediately preceding year.


Unaudited Consolidated Statement of Comprehensive Income

                                                    nd                                    st
                                                2        Quarter Ended                   1 Half Year Ended
                                              30/6/2010         30/6/2009        (+/-)   30/6/2010       30/6/2009       (+/-)
                                              Rmb’000           Rmb’000          %       Rmb’000         Rmb’000          %


Revenue                                         151,499           185,167       (18.2)     151,499         185,167       (18.2)
Cost of sales                                  (124,953)        (148,545)       (15.9)    (124,953)      (148,545)       (15.9)
Gross profit                                        26,546         36,622       (27.5)         26,546       36,622       (27.5)

Other items of income
  Financial income                                       497          408        21.8             995          849        17.2
  Other income                                              -         300        N.M                 -          78         N.M
Other items of expense
  Selling and distribution expenses                  (256)                  -    N.M            (256)                -     N.M
  Administrative expenses                        (7,987)           (8,302)       (3.8)     (17,823)        (17,457)         2.1
  Financial costs                                        (75)            (1)    >100            (166)           (1)       >100
  Other expense                                          (45)               -    N.M              (10)        (186)      (94.6)
Profit before tax                                   18,680         29,027       (35.6)          9,286       19,905       (53.3)
  Income tax expense                             (5,877)           (8,452)      (30.5)         (3,925)      (7,237)      (45.8)
Profit net of tax                                   12,803         20,575       (37.8)          5,361       12,668       (57.7)
  Foreign currency translation                            72          517       (86.1)             25         (355)      (>100)
Total comprehensive income for the period
 attributable to equity holders                     12,875         21,092       (39.0)          5,386       12,313       (56.3)




                                               Page 1 of 18
1.   Profit before tax

     Profit before tax is arrived at after charging and (crediting) :

                                                                   nd                                    st
                                                               2        Quarter Ended                  1 Half Year Ended
                                                             30/6/2010                 30/6/2009       30/6/2010       30/6/2009
                                                             Rmb’000                   Rmb’000         Rmb’000         Rmb’000
     Interest income                                                    (497)               (408)              (995)        (849)
     Interest expense on finance lease                                       75                    -            166                -
     Depreciation of property, plant &
      equipment                                                         4,529              4,224               9,234       8,681
     Property, plant and equipment written off                          1,922                      -           1,922               -
     Amortisation of land use rights                                        304              367                608          641




2.      Other income
                                                                       nd                                 st
                                                                   2        Quarter Ended               1 Half Year Ended
                                                                30/6/2010              30/6/2009       30/6/2010       30/6/2009
                                                                   Rmb’000              Rmb’000        Rmb’000         Rmb’000
     Unrealised exchange gain                                                      -         222                   -               -
     Gain on disposal of property, plant & equipment                               -          78                   -          78
                                                                                   -         300                   -          78

3.      Other expense
                                                                       nd                                 st
                                                                   2        Quarter Ended               1 Half Year Ended
                                                                30/6/2010               30/6/2009      30/6/2010       30/6/2009
                                                                   Rmb’000              Rmb’000        Rmb’000         Rmb’000
     Unrealised exchange loss                                               (45)                   -            (10)        (186)




                                                    Page 2 of 18
              1(b)(i)      Unaudited Balance Sheet as at:

                                                            GROUP                                  COMPANY
                                                  30/6/2010              31/12/2009         30/6/2010            31/12/2009
                                                  Unaudited               Audited           Unaudited             Audited
                                                     Rmb’000              Rmb’000           Rmb’000              Rmb’000
NON-CURRENT ASSETS
Property, plant and equipment                            120,450              131,595              479                  511
Land use rights                                           47,781               48,389                    -                    -
Investment in subsidiaries                                        -                     -       239,156             239,348
Trade and other receivables                                 6,074               6,074           184,222             184,370
                                                         174,305              186,058           423,857             424,229
CURRENT ASSETS
Inventories                                               15,805                7,031                    -                    -
Trade and other receivables                              219,443              152,312                   2                   10
Prepaid operating expenses                                      13                187                   10                  55
Cash and bank balances                                   519,736              573,962                   25             1,216
                                                         754,997              733,492                   37             1,281
CURRENT LIABILITIES
Trade and other payables                                  99,426              69,223                     -                    -
Due to a subsidiary                                               -                 -            11,054               8,340
Due to related parties                                         296               356                     -                    -
Due to a director                                           3,429              6,874                     -                    -
Other liabilities                                           7,675              5,578              2,448               3,353
Obligations under finance lease                             6,396              4,899                     -                    -
Provision for maintenance warranties                        4,667              4,667                     -                    -
Tax payables                                              25,920              51,148                     -                    -
                                                         147,809              142,745            13,502                11,693
NET CURRENT ASSETS (LIABILITIES)                         607,188              590,747           (13,465)              (10,412)
NON-CURRENT LIABILITIES
Provision for maintenance warranties                      1,873                 1,213                        -                    -
Obligations under finance lease                                684              2,696                        -                    -
Deferred tax liabilities                                 14,440                13,786                        -                    -
                                                         16,997                17,695                        -                    -
NET ASSETS                                               764,496              759,110           410,392               413,817


Equity Attributable to Equity Holders of the Group
Share capital                                            426,832              426,832           426,832             426,832
Reserve funds                                            63,286                63,286                        -              -
Merger reserve                                          (92,568)              (92,568)                       -              -
Translation reserve                                       (2,868)              (2,893)           (9,404)             (9,090)
Accumulated profits/(losses)                             369,814              364,453            (7,036)             (3,925)
                                                         764,496              759,110           410,392             413,817




                                                               Page 3 of 18
1(b)(ii)   Aggregate amount of group’s borrowings and debt securities.


           Amount repayable in one year or less, or on demand


                           As at 30/6/2010                                  As at 31/12/2009
                 Secured                 Unsecured                Secured                Unsecured
                 Rmb’000                  Rmb’000                 Rmb’000                  Rmb’000
                      6,396                             -                 4,899                          -


           Amount repayable after one year


                            As at 30/6/2010                                  As at 31/12/2009
                   Secured                Unsecured                Secured                Unsecured
                  Rmb’000                    Rmb’000               Rmb’000                 Rmb’000
                        684                                 -              2,696                             -


           Details of any collateral


           The above finance lease is secured by the underlying assets under the finance lease with a net carrying
           value of Rmb9.4 million and guaranteed by a director and his spouse.




                                                  Page 4 of 18
1(c) A cash flow statement (for the group), together with a comparative statement for the corresponding
period of the immediately preceding financial year.


 Unaudited Consolidated Cash Flow Statement
                                                                         nd                            st
                                                                     2        Quarter Ended           1 Half Year Ended
                                                                    30/6/2010           30/6/2009     30/6/2010          30/6/2009
                                                                     Rmb’000            Rmb’000       Rmb’000            Rmb’000
Cash flows from operating activities
Profit before tax                                                         18,680          29,027             9,286          19,905
Adjustments for:
  Depreciation of property, plant and equipment                               4,529           4,224          9,234           8,681
  Amortisation of land use rights                                              304             367             608             641
  Gain on disposal of property, plant and equipment                               -               -                  -         (78)
  Property, plant and equipment written off                                   1,922               -          1,922                   -
  Finance costs                                                                 75                1            166                  1
  Interest income                                                             (497)           (407)          (995)            (849)
  Increase in provision                                                        660                -            660                   -
  Translation difference                                                        75             517              25            (355)

Operating profit before working capital changes                           25,748           33,729           20,906          27,946
Changes in working capital:
  Decrease in gross amount due from customers for contract
    work-in-progress, net                                                         -            418                   -          35
  Decrease (Increase) in inventories                                            49        (1,396)           (8,774)         (3,811)
  Increase in trade and other receivables                                (70,731)       (122,122)       (67,131)          (117,951)
  Decrease in prepayments                                                       64             108             174             217
  Increase in trade and other payables                                    30,439           17,891           26,698          17,182
  Increase in other liabilities                                               2,251        11,726            2,097          11,726

Cash used in operations                                                  (12,180)        (59,646)       (26,030)           (64,656)
Interest received                                                              497             408             995             849
Finance costs paid                                                            (165)             (1)          (166)              (1)
Income tax paid                                                               (112)            (16)     (28,499)            (2,336)

Net cash flows used in operating activities                              (11,960)        (59,255)       (53,700)           (66,144)


Cash flows from investing activities
Purchase of property, plant and equipment                                         -            (13)           (11)           (51)
Proceeds from disposal of property, plant and equipment                           -               -             -          4,058

Net cash flows (used in)/generated from investing activities                      -            (13)           (11)         4,007


Cash flows used in financing activities
Dividend paid                                                                     -      (34,394)               -        (34,394)
Repayment of finance lease                                                     (515)              -         (515)               -

Net cash flows used in financing activities                                    (515)     (34,394)            (515)        (34,394)


Net decrease in cash and bank balances                                   (12,475)        (93,662)       (54,226)          (96,531)
Cash and bank balances at beginning of period                            532,211         473,742       573,962            476,611

Cash and bank balances at end of period                                  519,736         380,080       519,736            380,080



                                                          Page 5 of 18
1(d) (i)   A statement (for the issuer and group) showing either (i) all changes in equity or (ii) changes in
           equity other than those arising from capitalization issues and distributions to shareholders,
           together with a comparative statement for the corresponding period of the immediately preceding
           financial year.


           UNAUDITED STATEMENT OF CHANGES IN EQUITY – GROUP


                                   Share        Reserve       Merger         Translation       Accumulated
            2010 – Group          Capital       Funds         Reserve         Reserve            Profits      Total Equity
                                  Rmb’000       Rmb’000       Rmb’000         Rmb’000           Rmb’000        Rmb’000
            At 1 January 2010      426,832        63,286          (92,568)        (2,893)          364,453        759,110

            Total comprehensive
            income for the
            period                          -             -              -           (47)           (7,442)        (7,489)

            At 31 March 2010       426,832        63,286          (92,568)        (2,940)          357,011        751,621

            Total comprehensive
            income for the
            period                          -             -              -              72          12,803         12,875

            At 30 June 2010        426,832        63,286          (92,568)        (2,868)          369,814        764,496



                                   Share        Reserve       Merger         Translation       Accumulated
            2009 – Group          Capital       Funds         Reserve         Reserve            Profits         Total
                                  Rmb’000       Rmb’000       Rmb’000         Rmb’000           Rmb’000        Rmb’000
            At 1 January 2009      426,832        63,108          (92,568)        (3,191)          318,966        713,147

            Total comprehensive
            income for the
            period                          -             -              -          (871)           (7,909)        (8,780)

            At 31 March 2009       426,832        63,108          (92,568)        (4,062)          311,057        704,367

            Total comprehensive
            income for the
            period                          -             -              -           517            20,575         21,092

            Dividend paid                   -             -              -                 -       (34,394)       (34,394)
            At 30 June 2009        426,832        63,108          (92,568)        (3,545)          297,238        691,065




                                                   Page 6 of 18
            UNAUDITED STATEMENT OF CHANGES IN EQUITY – Company


                                                                           Translation          Accumulated
             2010 – Company                          Share Capital          Reserve               Losses               Total Equity
                                                          Rmb’000           Rmb’000               Rmb’000               Rmb’000
             At 1 January 2010                             426,832            (9,090)                (3,925)                 413,817

             Total comprehensive income for the
             period                                              -               962                 (1,528)                    (566)
             At 31 March 2010                              426,832            (8,128)                (5,453)                 413,251

             Total comprehensive income for the
             period                                              -            (1,276)                (1,583)                  (2,859)

             At 30 June 2010                               426,832            (9,404)                (7,036)                 410,392



                                                                            Translation           Accumulated
             2009 – Company                          Share Capital           Reserve             (Losses)/Profits          Total Equity
                                                          Rmb’000            Rmb’000                Rmb’000                 Rmb’000
             At 1 January 2009                               426,832           (15,422)                    (9,213)              402,197

             Total comprehensive income for the
             period                                                  -         (12,822)                    45,586                32,764

             At 31 March 2009                                426,832           (28,244)                    36,373               434,961

             Total comprehensive income for the
             period                                                  -           11,671                    (1,717)                9,954
             Dividend paid                                           -                   -             (34,395)                 (34,395)
             At 30 June 2009                                 426,832           (16,573)                       261               410,520



1(d) (ii)   Details of any changes in the company's share capital arising from rights issue, bonus issue, share
            buy-backs, exercise of share options or warrants, conversion of other issues of equity securities,
            issue of shares for cash or as consideration for acquisition or for any other purpose since the end
            of the previous period reported on. State also the number of shares that may be issued on
            conversion of all the outstanding convertibles, as well as the number of shares held as treasury
            shares, if any, against the total number of issued shares excluding treasury shares of the issuer, as
            at the end of the current financial period reported on and as at the end of the corresponding period
            of the immediately preceding financial year.


            Details of ordinary share capital movements are as shown below:
                                                       2010                                                2009
                                           No of shares              Rmb                  No of shares               Rmb


            At 1 January and 31
            March                           600,000,000        426,832,025                   600,000,000          426,832,025
            At 30 June                      600,000,000        426,832,025                   600,000,000          426,832,025




                                                     Page 7 of 18
1(d) (iii) Total number of issued shares excluding treasury shares as at the end of the current financial
           period and as at the end of the immediately preceding year.


         Company                                                           30/6/2010        31/12/2009
         Total number of issued shares                                     600,000,000      600,000,000


         There are no treasury shares as at the end of the current financial period and as at the end of the
         immediately preceding year.


1(d) (iv) A statement showing all sales, transfers, disposal, cancellation and/or use of treasury shares as at
          the end of the current financial period reported on.


         Not applicable.


2        Whether the figures have been audited or reviewed and in accordance with which auditing
         standard or practice.


          The figures have not been audited or reviewed by the auditors.


3        Where the figures have been audited or reviewed, the auditors’ report (including any qualifications
         or emphasis of matter).


         Not applicable.


4         Whether the same accounting policies and methods of computation as in the issuer’s most
         recently audited annual financial statements have been applied.


         The same accounting policies and methods of computation adopted in the most recently audited financial
         statements for the financial year ended 31 December 2009 have been applied in the preparation for the
         financial statements for six months ended 30 June 2010 except that the Group has adopted the
         revised/amended Financial Reporting Standards (FRS) which became effective on 1 July 2009 and 1
         January 2010.


5       If there are any changes in the accounting policies and methods of computation, including any
        required by an accounting standard, what has changed, as well as the reasons for, and the effect of,
        the change.


         The adoption of the new and revised FRS and INT FRS does not have any material financial impact on the
         Group‟s and Company‟s financial statements for the current period.




                                                 Page 8 of 18
6   Earnings per ordinary share of the group for the current period reported on and the corresponding
    period of the immediately preceding financial year, after deducting any provision for preference
    dividends.


                                                nd                                       st
                                            2        Quarter Ended                      1 Half Year Ended 2010
                                      30/6/2010                   30/6/2009           30/6/2010            30/6/2009
                                    Rmb (cents)               Rmb (cents)            Rmb (cents)          Rmb (cents)
     Profit per share - Basic            2.13                       3.43                 0.89                 2.11
                    - Diluted            2.13                       3.42                 0.89                 2.11
     The basic and diluted EPS is computed using profit attributable to shareholders in the relevant periods over the
     weighted average number of shares as shown below:
                                   No. of shares             No. of shares           No. of shares        No. of shares
     Basic                          600,000,000               600,000,000            600,000,000          600,000,000
     Diluted                        600,000,000               600,000,000            600,000,000          600,000,000


7    Net asset value (for the issuer and group) per ordinary share based on the total number of issued
     shares excluding treasury shares of the issuer at the end of the (a) current financial period
     reported on and (b) immediately preceding financial year.


                                                            Group                               Company
                                                30/6/2010            31/12/2009           30/6/2010        31/12/2009
                                                     Rmb                Rmb                   Rmb             Rmb
     Net asset value per ordinary
                                                           1.27               1.27                 0.68              0.69
     share


    Net assets value per ordinary share of the Group was calculated based on the share capital of 600,000,000
    shares.


8   A review of the performance of the group, to the extent necessary for a reasonable understanding of
    the group’s business. The review must discuss any significant factors that affected the turnover,
    costs, and earnings of the group for the current financial period reported on, including (where
    applicable) seasonal or cyclical factors.          It must also discuss any material factors that affected the
    cash flow, working capital, assets or liabilities of the group during the current financial period
    reported on.


    STATEMENT OF COMPREHENSIVE INCOME


    Revenue


    The operating entities of the Group based in Daqing City, Heilongjiang Province, the PRC, resumed
    operations in 2Q2010, after an annual recess brought about by the harsh winter conditions in that area.
    As there are no revenues recorded for 1Q2010 and 1Q2009, the revenues recorded for 2Q2010 and
    2Q2009 are the same as that for 1H2010 and 1H2009 respectively.




                                                     Page 9 of 18
A breakdown of the Group revenue by business segments is as follows:


                                                    2Q2010 &        %                 2Q2009 &       %
                                                      1H2010                            1H2009
                                                    Rmb ‟000                          Rmb „000
 Construction                                         132,094      87.2                 178,164     96.2
 Concrete products                                     19,405      12.8                    7,003     3.8
                                                      151,499     100.0                 185,167     100.0


Revenue decreased by Rmb33.7 million or 18.2% from Rmb185.2 million for 2Q2009 and 1H2009 to
Rmb151.5 million for 2Q2010 and 1H2010. The decrease was attributable to a decrease in revenue derived
from construction works by Rmb46.1 million from Rmb178.2 million for 2Q2009 and 1H2009 to Rmb132.1
million for 2Q2010 and 1H2010, partially offset by an increase in revenue derived from concrete products
by Rmb12.4 million from Rmb7.0 million for 2Q2009 and 1H2009 to Rmb19.4 million for 2Q2010 and
1H2010.


Construction revenue declined during 2Q2010 and 1H2010 due to the increased competition in Daqing
area that resulted in the Group securing less number of contracts than the previous period and also with
projects with lesser contract value. With the Group securing work from 2Q2010 with contract value
amounting in aggregate to Rmb611.2 million, these are expected to contribute positively to the profits of the
Group over the relevant periods.


Concrete products‟ revenues has increased by Rmb12.4 million from Rmb7.0 million in 1H2009 to Rmb19.4
million in 1H2010 as a result of the Group having expanded its business and securing more customers in
1H2010 (144 customers) as compared to 1H2009 (86 customers).              During 1H2009, the concrete business
was still in the start-up stage and the plant has yet to achieve its full operating capacity.


Costs of sales and gross margins


Cost of sales declined by Rmb23.6 million or 15.9% from Rmb148.5 million in 2Q2009 and 1H2009 to
Rmb124.9 million in 2Q2010 and 1H2010, which is in line with the decline in revenues.


Gross margin has decreased to 17.5% in 2Q2010 and 1H2010 as compared to 19.8% in 2Q2009 and
1H2009. The declines are mainly due to increased competition and pricing pressure in response to the
change in the tender award criteria of government contracts. Prior to 2009, government tenders are
awarded based on several criteria like past track record, financial strength, pricing etc. Since the beginning
of 2009, tenders are awarded to the lowest priced bidder.           The higher gross margin in 2Q2009 and
1H2009 is mainly due to certain contracts secured in 2008 before the change in the government tender
criteria, are carried forward to 1H2009.


Selling and distribution expenses


Selling and distribution expenses relate to selling and distribution expenses of the Concrete business.
There is no selling and distribution expenses in 1H2009 as the sales volume for the Concrete plant is low.




                                            Page 10 of 18
Administrative expenses


Administrative expenses mainly consist of administrative salary and staff benefits, travelling expenses,
entertainment expenses and other office expenses.       Administrative expenses in 2Q2010 and 1H2010
remained comparable with 2Q2009 and 1H2009.


Financial income


Financial income comprises mainly interest income on bank deposits. Financial income has increased by
21.8% and 17.2% from Rmb408,000 and Rmb849,000 in 2Q2009 and 1H2009 to Rmb497,000 and
Rmb995,000 in 2Q2010 and 1H2010 respectively, mainly due to higher interest rates earned on bank
balances and higher average bank balances during 1H2010.


Financial expenses


There are no significant financial expenses incurred in 1Q2009 and 1H2009.       The financial expenses in
1Q2010 and 1H2010 mainly consists of finance lease interest incurred on a finance lease arrangement
used to purchase concrete mixer trucks and ancillary assets with a principal sum of Rmb7.8 million in
3Q2009. 2009 年第二季度及前半年没有重大的财务费用。 2010 年第二季度及前半年的财务开支主要包括
用于购买混凝土搅拌车及附属资产的融资租赁,本金为 Rmb7.8 百万元,支出的利息。


Other income and expenses


Due to the fluctuation of exchange rate between SGD and RMB, the Group recorded unrealized exchange
loss of approximately Rmb45,000, Rmb10,000 and Rmb186,000 and is reflected accordingly as other
expenses in 2Q2010, 1H2010 and 1H2009 respectively.


As at 2Q2009, due to the currency appreciation of RMB against SGD, the Group recorded an unrealized
exchange gain of approximately Rmb222,000 and this is presented in the financial statements as other
income.


Besides, other income also included a Rmb78,000 gain from disposal of property, plant and equipment in
2Q2009 and 1H2009, whereas, there was no disposal of property, plant and equipment in 2Q2010 and
1H2010.


Tax


Tax expenses relate to the provision for corporate income tax for the Group‟s operating entities in Daqing
using an effective tax rate of 25% as well as the provision for deferred tax on current year‟s undistributed
profits of PRC subsidiaries at 5%. The decrease in tax expenses recorded in 2Q2010 and 1H2010 as
compared with 2Q2009 and 1H2009 is in line with the decrease in profits during the period under review.




                                          Page 11 of 18
  CONSOLIDATED BALANCE SHEET


  Non-Current Assets


  The non-current assets as at 30 June 2010 comprises long term retention sum receivable for construction
  projects, property, plant and equipment (“PPE”) and land use rights over a piece of land occupied by the
  Group‟s Concrete Mixing Plant. Non-current assets amounted to Rmb174.3 million (FY2009: Rmb186.0
  million). The decrease was due mainly to depreciation of property, plant and equipment and amortization of
  land use rights provided for 1H2010 amounting to approximately Rmb9.2 million and Rmb0.6 million
  respectively.   The decrease in non-current assets is also due to the write off of property, plant and
  equipment amounting to Rmb1.9 million in 1H2010.       Those write off are in relation to the wear and tear of
  equipment during construction activities, which cannot continue to be utilized due to its potential safety
  hazard and in compliance with Government safety regulations.


  Current Assets


  Current assets as at 30 June 2010 amounted to Rmb755.0 million (FY2009: Rmb733.5 million). The
  increase in current assets is mainly due to increase in inventories, trade and other receivables of Rmb75.9
  million, partially offset by the decrease in prepaid operating expenses and cash and bank balances
  amounting in aggregate to Rmb54.4 million.


  The increase in inventories of Rmb8.8 million is mainly due to the gearing up of operations at the Concrete
  Plant at the end of 2Q2010 for delivery in 3Q2010 as compared to end 4Q2009 when the plant was largely
  dormant due to the cessation of construction activities in the Daqing area because of winter frost
  conditions.


  A breakdown of trade and other receivables is as follows:


Rmb’000                     As at 30 June 2010       As at 31 December                  Variance
                                                              2009              Rmb‟000             %

Trade receivables                        131,458                     77,708         53,750         69.2
Retention monies                          46,667                     40,594           6,073        15.0
Performance deposits                      40,032                     33,066           6,966        21.1
Other receivables                          1,286                       944              342        36.2
Total                                    219,443                 152,312            67,131         44.1


  Trade receivables represents account receivables from the sale of concrete products and amount owing for
  contract works performed and billed.    Retention monies refer to monies (typically between 3.0% to 10.0%
  of the project values) withheld by our customers for completed construction projects for up to two years.


  Trade receivables and retention sum has increased by aggregate of Rmb59.8 million as at 30 June 2010 as
  compared to FY2009.     The lower trade receivable and retention monies balances in FY2009 is because
  there were no addition to the trade receivables balance due to the subsidiaries having temporarily ceased
  operation during 4Q2009 attributed to the frost condition caused by the harsh winter at the northern parts of
  China.   As the Group commences construction activities during 2Q2010 after the winter recess, trade



                                             Page 12 of 18
receivable balances will increase in tandem.         The trade receivables and retention sum of the Group
amounted to Rmb178.1 million. An amount of Rmb169.3 million (or 95.1%) is current and not yet due for
collection and this comprises Rmb122.6 million which is not yet due for collection according to contractual
agreements entered with customers and Rmb46.7 million which are unexpired retention sums.


Performance deposits relate to deposits placed with property and infrastructure developers for ongoing
projects.    These will be refunded when the projects are completed.             The increase in performance
deposits of Rmb7.0 million is mainly due to performance deposits placed with property and
infrastructure developers for a project secured in 2Q2010.


Other receivables consist mainly of advance to suppliers, rental receivable for rental of machinery, finance
lease deposits and insurance deposits.         The increase in other receivables of Rmb0.3 million is mainly due
to advances paid to suppliers to secure the purchase of raw materials for our specialty concrete business.


Please refer to the following for trade receivables turnover days:
                                                                    As at 30 June         As at 31 December
                                                                        2010                       2009
Trade receivables turnover days                                          63.5                      56.9
 Note: Trade receivables turnover days is computed based on (average receivables net of retention monies/ total revenue)X365

 days (92 days for 2Q2010). Average receivables net of retention monies refer to the simple average between the opening trade

 debts as at 1 January and closing trade debts as at 31 December.



The higher turnover days for 30 June 2010 as compared to FY2009 is mainly due to longer credit period
granted to the customers of the Group‟s concrete business and also the longer time taken by the operations
department of certain customers to verify the percentage of work completed and thus leading to a longer
repayment period. However, the trade receivable turnover days are still within the credit period granted to
the customers.


Since the collection of retention monies and other receivables does not have a direct relationship with
revenue earned during the relevant periods, an analysis of their turnover is not meaningful.


The decrease in cash and bank balances of Rmb54.2 million is mainly due to the purchase of inventory,
repayment of finance lease installments, increase in trade and other receivables amounting to Rmb105.0
million.    However, the decrease in cash and bank balances is partially offset by the increase in trade and
other payables, other liabilities and interest received in aggregate of Rmb29.9 million and profit earned
during 1H2010 amounting to Rmb20.9 million.


The decrease in prepaid operating expenses of Rmb0.2 million is mainly due to the amortization of
operating expenses during 1H2010.


Current liabilities


Current liabilities as at 30 June 2010 amounted to Rmb147.8 million (FY2009: Rmb142.7 million). The
increase in current liabilities is mainly due to the increase in trade and other payables, other liabilities and
current portion of obligations under finance lease by Rmb30.2 million, Rmb2.1 million and Rmb1.5 million
respectively . The increase in current liabilities is partially offset by the decrease in amount due to a director



                                                Page 13 of 18
and tax payable by Rmb3.4 million and Rmb25.2 million respectively.


The decrease in amount due to a director and tax payables is mainly due to the repayment made during
1H2010.


The increase in trade and other payable of Rmb30.2 million as at 30 June 2010 is mainly due to the credit
extended by the suppliers as construction activities kicks into full swing in the second quarter.     As
mentioned above, the subsidiaries have commenced its purchasing activities during the period under
review in for its operation in 2Q2010.   There is an increase in inventory level as at 2Q2010 because the
concrete plant has made necessary purchase of materials during the period under review, which the
purchase was made on a credit basis.      Hence, as compared to FY2009, there is an increase in trade and
other payables of Rmb30.2 million as at 30 June 2010.


The increase in other liabilities of Rmb2.1 million as at 2Q2010 is mainly due to the increase in accrual for
operating taxes for 2Q2010. As there was no operation during 4Q2009, there was no such accrual of tax
as at FY2009.


The increase in current portion of obligations under finance lease is also due to the reclassification of
installments which is due within the next 12 months. As the Group is using sum-of-digit method for
computing interest for finance lease, the interest sum for each installment decreases according to number
of installments.   Hence, as compared to FY2009, with the same number of installments outstanding for the
next 12 months, the Group has higher principal sum owing as at 2Q2010.


Non-current liabilities

Non-current liabilities as at 30 June 2010 amounted to Rmb17.0 million (FY2009: Rmb17.7 million) and
comprise provision for maintenance warranties (non-current), finance lease (non-current) and deferred tax
liabilities.


The decrease in non-current liabilities as at 2Q2010 is mainly due to the decrease in non-current portion of
obligations under finance lease by Rmb2.0 million arising from the reclassification of short term installments
to current portion of obligations under finance lease under current liabilities as at 2Q2010.       However, the
decrease in non-current liabilities is partially offset by the increase in deferred tax liabilities by Rmb0.6
million as at 2Q2010 as a result of the 5% provision on distributable profits for 1H2010 in the event that
such profits are declared and remitted offshore at some future date.     Besides, the decrease in non-current
liabilities is also partially offset by the increase in long-term provision for maintenance warranties of Rmb0.7
million as a result of provision made on construction work completed during 1H2010.


SHAREHOLDERS’ EQUITY


Shareholders‟ equity of the Group increased by Rmb5.4 million or 0.7% from Rmb759.1 million as at 31
December 2009 to Rmb764.5 million as at 30 June 2010 due to the comprehensive income earned
amounting to Rmb5.4 million during 1H2010.




                                           Page 14 of 18
     CONSOLIDATED CASH FLOW STATEMENT


     In 1H2010, the Group experienced a net cash outflow from operating activities of approximately Rmb53.7
     million. This was attributed mainly to the cash outflow of Rmb46.9 million in working capital changes before
     adjusting for net interest received of Rmb1.0 million, finance costs paid of Rmb0.2 million and income tax
     paid of Rmb28.5 million. The operating cash outflow is partially offset by the cash inflow generated from the
     operating profit from operations during 1H2010 of Rmb20.9 million.


     Besides, the Group also experienced a net cash outflow from financing activities of repaying its finance
     lease of Rmb0.5 million.


9    Where a forecast, or a prospect statement, has been previously disclosed to shareholders, any
     variance between it and the actual results.


     Not applicable.


10   A commentary at the date of the announcement of the significant trends and competitive conditions
     of the industry in which the group operates and any known factors or events that may affect the
     group in the next reporting period and the next 12 months.


     The construction industry in Daqing City, is expected to remain competitive. The Group is currently
     preparing to tender for several building construction and civil engineering work and will make appropriate
     announcements at a later date should we receive any tender awards.            In 2Q2010, the Group has been
     awarded a new project with contract value of Rmb70.0 million, and is awaiting formal signing of the
     contract.


     As at 30 June 2010, the Group has an outstanding secured confirmed order book of approximately
     Rmb611.2 million, of which Rmb374.7 million has been recognised as revenue. These secured confirmed
     orders are, however, subject to cancellation, deferral or rescheduling by our customers. As such, the state of
     our order books at any point in time is not reflective or indicative of our Group’s overall financial results and
     performance at the relevant point in time. The Group will continue to complete outstanding projects in
     FY2010.


     Management intends to continue to seek out business opportunities so as to achieve sustainable income
     through diversification of its revenue streams.


11   Dividend


     (a) Current Financial Period Reported On


     Any dividend recommended for the current financial period reported on?


     None.




                                                 Page 15 of 18
         (b) Corresponding Period of the Immediately Preceding Financial Year


         Any dividend declared for the corresponding period of the immediately preceding financial year?


         None.


         (c) Date payable


         Not applicable.


         (d) Books closure date


         Not applicable.


12       If no dividend has been declared/recommended, a statement to that effect.


         No dividend has been declared or recommended for the second quarter ended 30 June 2010.


PART II - ADDITIONAL INFORMATION REQUIRED FOR FULL YEAR ANNOUNCEMENT
(This part is not applicable to Q1, Q2, Q3 or Half-Year Results)
13       Segmented revenue and results for business or geographical segments (of the group) in the form
         presented in the issuer’s most recently audited annual financial statements, with comparative
         information for the immediately preceding year.


         Not applicable.


14      In the review of performance, the factors leading to any material changes in contributions to
        turnover and earnings by the business or geographical segments.


        Not applicable.


15       A breakdown of sales.


        Not applicable.


16       A breakdown of the total annual dividend (in dollar value) for the issuer’s latest full year and its
         previous full year.


         Not applicable.




                                                   Page 16 of 18
17         Interested person transactions


Name of interested      Aggregate   value   of   all   interested   person   Aggregate value of all interested person
person                  transactions during the financial period ended 30    transactions conducted under shareholders‟
                        June 2010   under review (excluding transactions     mandate pursuant to Rule 920 (excluding
                        less than $100,000 and transactions conducted        transactions less than $100,000)
                        under shareholders‟ mandate pursuant to Rule
                        920)
Daqing      Dazheng     Use of the services and facilities at Lido Spa –     Nil
Property                Rmb1,225,604
Development      Co.,
Ltd.




BY ORDER OF THE BOARD




ZHAO CHUAN WEN
EXECUTIVE CHAIRMAN
11 August 2010




                                                   Page 17 of 18
                   CONFIRMATION BY THE BOARD PURSUANT TO RULE 705(5)
                                 OF THE SGX-ST LISTING MANUAL


We, Zhao Chuan Wen and Zou Cun Yu, being Directors of the Company, do hereby confirm for and on
behalf of the Board of Directors of the Company, that to the best of our knowledge, nothing has come to
the attention of the Board of Directors of the Company which may render the unaudited financial results
for the 6 months ended 30 June 2010 to be false or misleading in any material respect.




On behalf of the Board of Directors
Sino Construction Limited



______________________                              ______________________
Zhao Chuan Wen                                      Zou Cun Yu
Executive Chairman                                  Executive Director and Chief Executive Officer




                                             Page 18 of 18

				
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