UNITED FOOD HOLDINGS LIMITED
UNITED FOOD HOLDINGS LIMITED
UNITED FOOD HOLDINGS LIMITED
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ANNUAL REPORT 2000<br />
<strong>UNITED</strong> <strong>FOOD</strong> <strong>HOLDINGS</strong> <strong>LIMITED</strong>
Our Core Businesses<br />
Corporate Information<br />
Financial Highlights<br />
Chairman’s Statement<br />
Review of Operations<br />
Corporate Structure<br />
Report of the Directors and Financial Report<br />
Shareholders’ Information<br />
Notice of Annual General Meeting<br />
United Food Holdings Limited is the holding company of Linyi Jiangquan Meat<br />
Products Co., Ltd., a leading producers and suppliers of processed meat<br />
products, fresh, chilled and frozen pork products, animal feeds and pigs of<br />
quality breeds in China.<br />
We are ISO9002-Certified and we aspire to become a leading global food<br />
conglomerate offering quality products to our customers. At the same time, we<br />
aspire to deliver premium returns to our shareholders through innovative<br />
management practices and stringent quality assurance standards.<br />
One of our competitive advantages over our competitors is that, through the<br />
integration of our production processes, we make efficient use of our resources<br />
resulting in lower overall production cost and better quality control of our products.<br />
Our corporate strengths and reputation lie in our four principal product categories:<br />
• Processed meat products<br />
• Fresh, chilled and frozen pork products<br />
• Animal feeds<br />
• Pigs of quality breeds<br />
CONTENTS<br />
1<br />
2<br />
3 - 4<br />
5<br />
6 - 7<br />
8<br />
9 - 41<br />
42 - 43<br />
44 - 46<br />
OUR CORE BUSINESSES
2<br />
<strong>UNITED</strong> <strong>FOOD</strong> <strong>HOLDINGS</strong> <strong>LIMITED</strong><br />
CORPORATE INFORMATION<br />
BOARD OF DIRECTORS<br />
Executive: David Yip Wai Sun (Chairman)<br />
Wang Tingbao (Deputy Chairman)<br />
Wang Wenguang<br />
Non-Executive: Ho Wah Onn (Independent)<br />
Sitoh Yih Pin (Independent)<br />
AUDIT COMMITTEE Ho Wah Onn (Chairman)<br />
David Yip Wai Sun<br />
Sitoh Yih Pin<br />
SECRETARY Lee Kam Wan<br />
ASSISTANT SECRETARY Ira Stuart Outerbridge III<br />
REGISTERED OFFICE Clarendon House<br />
2 Church Street<br />
Hamilton HM 11<br />
Bermuda<br />
Tel: (441) 295 1422<br />
BUSINESS OFFICE Shenquan Village, Luozhuang District<br />
Linyi City, Shandong Province<br />
The People’s Republic of China<br />
Postal Code 276017<br />
Tel: (86) 539-8276 233 / Fax: (86) 539-8276 377<br />
HONG KONG OFFICE Room 1209, 12/F., Wing On Centre<br />
111 Connaught Road Central<br />
Sheung Wan, Hong Kong<br />
Tel: (852) 2851 6688 / Fax: (852) 2851 6788<br />
SHARE TRANSFER AGENT Lim Associates (Pte) Ltd<br />
10 Collyer Quay #19-08<br />
Ocean Building<br />
Singapore 049315<br />
Tel: (65) 536 5355<br />
SHARE REGISTRAR The Bank of Bermuda Limited<br />
Bank of Bermuda Building<br />
6 Front Street<br />
Hamilton HM 11<br />
Bermuda<br />
Tel: (441) 295 4000<br />
AUDITORS Ernst & Young<br />
Certified Public Accountants<br />
15/F., Hutchison House<br />
10 Harcourt Road, Central<br />
Hong Kong<br />
Tel: (852) 2956 1188<br />
AUDIT PARTNER-IN-CHARGE C T Kwok, Hong Kong
Key Financial Indicators<br />
<strong>UNITED</strong> <strong>FOOD</strong> <strong>HOLDINGS</strong> <strong>LIMITED</strong> 3<br />
FINANCIAL HIGHLIGHTS<br />
S$million 1996 1997 1998 1999 2000<br />
Turnover 51 83 138 207 324<br />
Profit Before Tax 5 13 25 40 66<br />
Net Profit Attributable to Shareholders 5 13 20 32 54<br />
Captial and Reserves 12 23 30 45 84<br />
Total Assests 26 42 52 79 101<br />
Net Tangible Assets Per Share (cents) 1.40 2.73 3.59 5.38 10.00<br />
Return on Shareholders’ Equity (%) 41.84 59.08 82.65 88.03 79.27<br />
Return on Total Assets (%) 18.83 32.33 47.46 49.83 65.61<br />
Earnings Per Share – Basic (Cents) 0.59 1.61 2.42 3.87 6.48<br />
Interest Cover (Times) 4 11 38 161 411<br />
Debt Equity Ratio 1.22 0.83 0.74 0.77 0.21<br />
Turnover (S$million)<br />
Net Profit Attributable to Shareholders (S$million)
4<br />
<strong>UNITED</strong> <strong>FOOD</strong> <strong>HOLDINGS</strong> <strong>LIMITED</strong><br />
FINANCIAL HIGHLIGHTS<br />
Segmental Contribution (S$million)<br />
Contribution to Turnover (S$million)
CHAIRMAN’S STATEMENT<br />
Dear Shareholders,<br />
Financial Review<br />
<strong>UNITED</strong> <strong>FOOD</strong> <strong>HOLDINGS</strong> <strong>LIMITED</strong> 5<br />
I am pleased to present our first annual report since our listing on the mainboard of the<br />
Singapore Exchange Securities Trading Limited on 26 March, 2001. Our financial results are<br />
better than the estimates as stated in our Prospectus dated 12 March, 2001. Our net profit rose<br />
to RMB260.4 million, up 64% from FY1999, on a turnover of RMB1,554.2 million, an increase<br />
of over 53.5%. This clearly demonstrates the Group’s capabilities and growth potential. Backed<br />
by strong financials and operating efficiency, we are well poised to further expand in the PRC<br />
market.<br />
Future Plans<br />
As China strives to deepen its economic reform, the quality of livelihood of its people will<br />
continue to be improved. Demand for meat and processed meat products will be on the rise.<br />
Nutritious and easy-to-serve food products are becoming a popular trend among urban and<br />
rural consumers and the market potential for these products will remain promising.<br />
In order to achieve a larger market share, lower operating costs, maximise of profits and<br />
improve product quality, we plan to develop and market a variety of chilled processed meat<br />
products and expand our production capacity for sausages. We will also acquire abattoirs in<br />
China for the production of fresh, chilled and frozen pork and processed meat products. We<br />
also plan to import another 1,000 pigs of pure breeds from the United States and Canada to<br />
increase the rearing capacity of our pig farm. To maintain a forefront position, we will also<br />
upgrade our research and development facilities and strengthen the marketing of our products<br />
and brand image through effective advertising and public relations campaigns.<br />
Acknowledgement<br />
I would like to thank my fellow directors and all employees of the Group for their support,<br />
dedication and hardwork throughout the year. I would also like to take this opportunity to<br />
welcome the new shareholders of United Food — thank you for your confidence in us.<br />
David Yip Wai Sun<br />
Chairman<br />
18 April 2001
6<br />
<strong>UNITED</strong> <strong>FOOD</strong> <strong>HOLDINGS</strong> <strong>LIMITED</strong><br />
REVIEW OF OPERATIONS
<strong>UNITED</strong> <strong>FOOD</strong> <strong>HOLDINGS</strong> <strong>LIMITED</strong> 7<br />
REVIEW OF OPERATIONS<br />
For the year under review, turnover was up 53.5% from RMB1.01 billion to RMB1.55 billion<br />
while attributable profit posted a growth to RMB260.4 million, a significant increase of 64%<br />
over that of the same period of 1999. Earnings per share also increased to RMB31 cents.<br />
The financial results have exceeded management estimates and are an indication of the<br />
Group’s growth potential, especially opportunities for vertical integration among our four<br />
principal activities.<br />
The increase in turnover is primarily due to higher sales volume following an increase in the<br />
number of our authorized dealers and retailers and the expansion of our sales and distribution<br />
network. The Group also undertook continual advertising and promotion during the year. The<br />
improved general economic condition in the PRC also contributed to the increase in turnover.<br />
The increase in profit attributable to shareholders is a result of the increase in turnover, more<br />
favourable prices of raw materials and the improvements in operational productivity. The<br />
Group has also focused on those of its core businesses and products with higher profit<br />
contribution.<br />
During the year, we successfully launched new processed meat products such as chicken<br />
sausages, fish sausages, beef sausages and feeds for weaned piglets to meet consumer and<br />
market demands.<br />
In addition, we continued to receive recognition for the high quality of our processed meat<br />
products and fresh, chilled and frozen pork products. We received the following two awards<br />
during the year:<br />
• Certificate of Quality Products award granted by the 2000 National Children’s Products<br />
Exhibition Organizing Committee<br />
• Well-known Export Brand award granted by the Animal & Plant Import and Export<br />
Inspection & Quarantine Bureau, PRC
8<br />
<strong>UNITED</strong> <strong>FOOD</strong> <strong>HOLDINGS</strong> <strong>LIMITED</strong><br />
CORPORATE STRUCTURE<br />
United Food<br />
Holdings Limited<br />
(Bermuda)*<br />
100%<br />
Post-Ante<br />
Trading Limited<br />
(British Virgin<br />
Islands)*<br />
PUBLICLY LISTED ON THE<br />
SINGAPORE EXCHANGE SECURITIES<br />
TRADING <strong>LIMITED</strong><br />
100% 100%<br />
Linyi Jiangquan<br />
Meat Products<br />
Co., Ltd.<br />
(PRC)*<br />
Globe Bright<br />
Limited<br />
(Hong Kong)*<br />
*Place of Incorporation / Establishment
REPORT OF THE DIRECTORS<br />
STATEMENT BY DIRECTORS<br />
REPORT OF THE AUDITORS<br />
AUDITED FINANCIAL STATEMENTS<br />
Company:<br />
REPORT OF THE DIRECTORS<br />
AND FINANCIAL REPORT<br />
for the year ended 31 December 2000<br />
Balance Sheet<br />
Supplementary Pro Forma Consolidated<br />
Financial Information:<br />
Profit and Loss Account<br />
Balance Sheet<br />
Cash Flow Statement<br />
Notes to Financial Statements<br />
10 - 14<br />
15<br />
16<br />
17<br />
18<br />
19<br />
20<br />
21 - 41
10<br />
<strong>UNITED</strong> <strong>FOOD</strong> <strong>HOLDINGS</strong> <strong>LIMITED</strong><br />
REPORT OF THE DIRECTORS<br />
The directors herein present their first report and the audited financial statements of the Company for the<br />
period from 14 August 2000 (date of incorporation) to 31 December 2000 which include supplementary<br />
pro forma consolidated financial statements of the Group (legally created subsequent to 31 December<br />
2000) for the year ended 31 December 2000.<br />
Restructuring Exercise<br />
The Company was incorporated in the Bermuda as an exempted company with limited liability under the<br />
Companies Act 1981 of Bermuda on 14 August 2000. Pursuant to a restructuring exercise (the “Restructuring<br />
Exercise”) to rationalise the Group structure in preparation for the listing of the Company’s shares on the<br />
Singapore Exchange Securities Trading Limited (the “SGX-ST”), the Company became the holding company of<br />
the Group on 15 January 2001. Further details of the Restructuring Exercise, together with details of the<br />
subsidiaries acquired pursuant thereto, are set out in notes 1 and 17 to the financial statements and the<br />
Company’s prospectus dated 12 March 2001.<br />
Subsequent to the balance sheet date, on 26 March 2001, the shares of the Company were listed on the SGX-ST.<br />
Supplementary financial information of the Group comprising a pro forma consolidated profit and loss account,<br />
balance sheet and cash flow statement has also been presented in order to further apprise the Company’s<br />
shareholders of the Group’s profit and its state of affairs had the Group been in existence throughout the period<br />
presented. The information referring to the Group presented in this directors’ report has been presented on a basis<br />
consistent with that of the preparation of the supplementary pro forma financial information which is further<br />
explained in note 1 to the financial statements.<br />
Principal activities<br />
The principal activity of the Company is investment holding. Details of the principal activities of the subsidiaries<br />
acquired subsequent to the balance sheet date, are set out in note 1 to the financial statements. There were no<br />
changes in the nature of the subsidiaries’ principal activities during the year.<br />
Results and dividends<br />
The Group’s pro forma consolidated profit for the year ended 31 December 2000 and the Group’s pro forma<br />
consolidated state of affairs at that date are set out in the accompanying financial statements on pages 18 to 41.<br />
During the year, dividends of RMB85,000,000 were paid by a wholly-owned subsidiary of the Company to its<br />
then shareholders prior to the Restructuring Exercise as further explained and described in note 1 to the financial<br />
statements.<br />
The directors of the Company do not recommend the payment of any dividend in respect of the period.<br />
Fixed assets<br />
Details of movements in the fixed assets of the Group are set out in note 11 to the financial statements.
<strong>UNITED</strong> <strong>FOOD</strong> <strong>HOLDINGS</strong> <strong>LIMITED</strong><br />
REPORT OF THE DIRECTORS<br />
Subsidiaries<br />
Pursuant to the Restructuring Exercise on 15 January 2001, the Company acquired certain subsidiaries now<br />
comprising the Group. Further particulars of the Company’s subsidiaries are set out in note 1 to the financial<br />
statements.<br />
Share capital and share options<br />
Details of movements in the Company’s share capital since 14 August 2000 (date of incorporation), together with<br />
reasons therefor, are set out in note 17 to the financial statements.<br />
There is currently no share option scheme relating to the unissued shares of the Company.<br />
Pre-emptive rights<br />
There are no provisions for pre-emptive rights under the Company’s bye-laws or the law of Bermuda which would<br />
oblige the Company to offer new shares on a pro rata basis to existing shareholders.<br />
Purchase, sale or redemption of listed securities of the Company<br />
The Company’s shares were listed on the SGX-ST on 26 March 2001. Other than foregoing, neither the<br />
Company, its holding company, nor any of its subsidiaries purchased, redeemed or sold any of the Company’s<br />
listed securities during the period up to the date of this report.<br />
Reserves<br />
Details of movements in the pro forma reserves of the Group are set out in note 18 to the financial statements.<br />
Distribution reserves<br />
At 31 December 2000, the Company had no reserve available for distribution.<br />
Major customers and suppliers<br />
During the year, the five largest customers of the Group accounted for less than 5% of the Group’s pro forma<br />
consolidated turnover. In addition, the five largest suppliers of the Group accounted for less than 5% of the<br />
Group’s pro forma consolidated purchases for the year.<br />
Directors<br />
The directors of the Company during the period and up to the date of this report are as follows:<br />
Executive directors:<br />
Mr. David Yip Wai Sun (appointed on 30 August 2000)<br />
Mr. Wang Tingbao (appointed on 30 August 2000)<br />
Mr. Wang Wenguang (appointed on 30 August 2000)<br />
Independent non-executive directors:<br />
Mr. Ho Wah Onn (appointed on 15 December 2000)<br />
Mr. Sitoh Yih Pin (appointed on 15 December 2000)<br />
11
12<br />
<strong>UNITED</strong> <strong>FOOD</strong> <strong>HOLDINGS</strong> <strong>LIMITED</strong><br />
REPORT OF THE DIRECTORS<br />
Directors’ interest in share capital<br />
According to the Register of Directors’ Shareholdings, the only directors who held office at the end of the financial<br />
year and who had an interest in shares or debentures of the Company or its related corporations either at their<br />
date of appointment, or on 31 December 2000, or on 15 January 2001 (date of Restructuring Exercise), or on<br />
18 April, 2001 (date of this report), were as follows:<br />
At date of appointment and 31 December 2000<br />
Ordinary shares of HK$0.10 each of the Company (before consolidation and sub-division)<br />
Name of director Direct Indirect<br />
interest interest<br />
Mr. David Yip Wai Sun 210,000 700,000<br />
Mr. Wang Tingbao 60,000 700,000<br />
Mr. Wang Wenguang 30,000 –<br />
At 15 January 2001 and 21 January 2001<br />
Ordinary shares of HK$0.50 each of the Company (after consolidation and the Restructuring Exercise but before<br />
sub-division and listing of the Company shares in SGX-ST)<br />
Name of director Direct Indirect<br />
interest interest<br />
Mr. David Yip Wai Sun 87,822,392 292,741,310<br />
Mr. Wang Tingbao 25,092,112 292,741,310<br />
Mr. Wang Wenguang 12,546,056 –<br />
At 18 April, 2001<br />
Ordinary shares of HK$0.25 each of the Company (after consolidation, the Restructuring Exercise, sub-division<br />
and listing of the Company shares in SGX-ST)<br />
Name of director Personal Corporate<br />
interest interest<br />
Mr. David Yip Wai Sun 175,644,784 585,482,620<br />
Mr. Wang Tingbao 50,184,224 585,482,620<br />
Mr. Wang Wenguang 25,092,112 –<br />
Other than in connection with the Restructuring Exercise, at no time during the period and up to 15 January 2001<br />
was the Company, its holding company or any of its subsidiaries a party to any arrangement to enable the<br />
directors to acquire benefits by means of the acquisition of shares in, or debentures of, the Company or any other<br />
body corporate.
<strong>UNITED</strong> <strong>FOOD</strong> <strong>HOLDINGS</strong> <strong>LIMITED</strong> 13<br />
REPORT OF THE DIRECTORS<br />
Directors’ service contracts<br />
The Company entered into separate service agreements (“Service Agreements”) with Mr. David Yip Wai Sun,<br />
Mr. Wang Tingbao and Mr. Wang Wenguang for an initial period of three years commencing from<br />
1 February 2001. The Service Agreements shall be renewable automatically for successive terms of one year each<br />
unless terminated by not less than three months’ notice in writing served by either party following the expiration<br />
of the end of the initial term or at any time thereafter.<br />
Apart from the foregoing, no director proposed for re-election at the forthcoming annual general meeting has a<br />
service contract with the Company which is not determinable by the Company within one year without payment<br />
other than statutory compensation.<br />
Directors’ interests in contracts<br />
Except for the service contracts detailed above and the transactions disclosed in note 4 to the financial statements,<br />
no director received or became entitled to receive a benefit by reason of a contract made by the Company or a<br />
related corporation with the director or with a firm of which he is a member or with a company in which he has<br />
a substantial financial interest.<br />
Corporate governance<br />
1. AUDIT COMMITTEE<br />
The Audit Committee was established on 15 January 2001. The Audit Committee comprises three members,<br />
two of whom are non-executive directors and are independent of management. The members of the Audit<br />
Committee at the date of this report are:<br />
Non-executive directors:<br />
Mr. Ho Wah Onn (Chairman)<br />
Mr. Sitoh Yih Pin<br />
Executive director:<br />
Mr. David Yip Wai Sun<br />
The Audit Committee meets periodically with management and the auditors of the Company to discuss and<br />
review the following:<br />
(a) the financial and operating results and accounting policies of the Group;<br />
(b) the financial statements of the Company and of the Group before their submission to the full board<br />
of directors and the external auditors’ report on those financial statements;<br />
(c) the interim and annual announcement of results of the Group before their submission to the full board<br />
of directors for approval;<br />
(d) the assistance given by the management of the Group to the auditors;<br />
(e) the external audit plans and the results of the external auditors’ examination and evaluation of the<br />
Group’s internal accounting control system;<br />
(f) the re-appointment of the external auditors;<br />
(g) the Group’s transactions with related parties; and<br />
(h) generally undertaken such other functions and duties as may be required by statute or the Listing Manual<br />
of SGX-ST, and by such amendments made thereto from time to time.
14<br />
<strong>UNITED</strong> <strong>FOOD</strong> <strong>HOLDINGS</strong> <strong>LIMITED</strong><br />
REPORT OF THE DIRECTORS<br />
Corporate governance (continued)<br />
1. AUDIT COMMITTEE (continued)<br />
In performing its functions, the Committee:<br />
(a) has had full access to and cooperation by the management and has full discretion to invite any director<br />
and executive officer to attend its meetings; and<br />
(b) has been given reasonable resources to enable it to discharge its functions properly.<br />
The Company adopted the Best Practices Guide issued by the SGX-ST in relation to the roles and<br />
responsibilities of the Audit Committee.<br />
The Audit Committee has recommended to the board of directors the nomination of Ernst & Young, Hong<br />
Kong for re-appointment as auditors of the Company at the forthcoming annual general meeting.<br />
2. SECURITIES TRANSACTIONS<br />
The Company has issued a policy on dealing in the Company’s shares to employees of the Company<br />
pursuant to the Best Practices Guide issued by the SGX-ST. The policy sets out the implications of insider<br />
dealing in the Company’s shares, and includes guidance to employees on dealing in the Company’s shares,<br />
which is modelled on the Best Practice Guide with some modifications.<br />
Auditors<br />
The auditors, Ernst & Young, Certified Public Accountants, have expressed their willingness to accept reappointment.<br />
Other information required by the SGX-ST<br />
No material contracts to which the Company, its holding company, or any of its subsidiaries are a party and which<br />
involved directors’ interests subsisted at the end of the financial year or have been entered into since the end of<br />
the previous financial year.<br />
On behalf of the board of directors<br />
David Yip Wai Sun Wang Tingbao<br />
Chairman Director<br />
Hong Kong<br />
18 April 2001
In the opinion of the directors:-<br />
<strong>UNITED</strong> <strong>FOOD</strong> <strong>HOLDINGS</strong> <strong>LIMITED</strong> 15<br />
(a) the Company’s balance sheet and profit and loss account, the Group’s pro forma consolidated balance<br />
sheet, profit and loss account and cash flow statement together with the notes thereto, as set out<br />
pages 17 to 41 are drawn up so as to give a true and fair view of the state of affairs of the Company<br />
as at 31 December 2000 and of the pro forma state of affairs of the Group; and its results of the<br />
Group, and the cash flow of the Group, for the financial year ended on that date as presented on the<br />
basis further explained in note 1 to the financial statements; and<br />
(b) at the date of this statement there are reasonable grounds to believe that the Company will be able<br />
to pay its debts as and when they fall due.<br />
On behalf of the board of directors,<br />
David Yip Wai Sun Wang Tingbao<br />
Chairman Director<br />
Hong Kong<br />
18 April 2001<br />
STATEMENT BY DIRECTORS
16<br />
<strong>UNITED</strong> <strong>FOOD</strong> <strong>HOLDINGS</strong> <strong>LIMITED</strong><br />
REPORT OF THE AUDITORS<br />
To the members<br />
United Food Holdings Limited<br />
(Incorporated in Bermuda with limited liability)<br />
We have audited the financial statements on pages 17 to 41 which have been prepared in accordance with<br />
International Accounting Standards issued by the International Accounting Standards Committee. These<br />
financial statements are the responsibility of the Company’s directors whose opinion thereon is set out on<br />
page 15. Our responsibility is to express an opinion on these financial statements based on our audit.<br />
We conducted our audit in accordance with International Standards on Auditing. Those standards require<br />
that we plan and perform the audit to obtain reasonable assurance about whether the financial statements<br />
are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the<br />
amounts and disclosures in the financial statements. An audit also includes assessing the accounting<br />
principles used and significant estimates made by the Company’s directors, as well as evaluating the overall<br />
financial statement presentation. We believe that our audit provides a reasonable basis for our opinion.<br />
In our opinion the financial statements give a true and fair view of the financial position of the Company<br />
as at 31 December 2000 and of its results for the period from 14 August 2000 (date of incorporation) to<br />
31 December 2000 in accordance with International Accounting Standards.<br />
Ernst & Young<br />
Certified Public Accountants<br />
Hong Kong<br />
18 April 2001
31 December 2000<br />
CURRENT ASSET<br />
Cash on hand<br />
<strong>UNITED</strong> <strong>FOOD</strong> <strong>HOLDINGS</strong> <strong>LIMITED</strong> 17<br />
Notes RMB$’000<br />
(Note 1)<br />
CAPITAL<br />
Share capital 1, 17 –<br />
BALANCE SHEET
18<br />
<strong>UNITED</strong> <strong>FOOD</strong> <strong>HOLDINGS</strong> <strong>LIMITED</strong><br />
SUPPLEMENTARY PRO FORMA CONSOLIDATED PROFIT AND LOSS ACCOUNT<br />
Year ended 31 December 2000<br />
Notes 2000<br />
1999<br />
RMB’000<br />
RMB’000<br />
(note 1)<br />
(note 1)<br />
TURNOVER 5 1,554,177<br />
1,012,822<br />
Cost of sales ( ( 1,149,433 )<br />
( 755,940 )<br />
Gross profit 404,744<br />
256,882<br />
Other revenue 2,168<br />
1,650<br />
Selling and distribution costs ( ( 72,596 )<br />
( 53,634 )<br />
Administrative expenses ( ( 11,397 )<br />
( 9,040 )<br />
Other operating expenses ( ( 3,831 )<br />
( 590 )<br />
PROFIT FROM OPERATING ACTIVITIES 6 319,088<br />
195,268<br />
Finance costs 7 ( ( 775 )<br />
( 1,202 )<br />
PROFIT BEFORE TAX 318,313<br />
194,066<br />
Tax 8 ( 57,934 )<br />
( 35,311 )<br />
NET PROFIT ATTRIBUTABLE TO SHAREHOLDERS 260,379<br />
158,755<br />
EARNINGS PER SHARE<br />
- Basic 10 RMB0.31<br />
RMB0.31 RMB0.19<br />
Other than the net profit for the year, the Group had no recognised gains or losses. Accordingly, a supplementary<br />
pro forma consolidated statement of recognised gains and losses is not presented in the financial statements.
31 December 2000<br />
<strong>UNITED</strong> <strong>FOOD</strong> <strong>HOLDINGS</strong> <strong>LIMITED</strong> 19<br />
SUPPLEMENTARY PRO FORMA CONSOLIDATED BALANCE SHEET<br />
Notes 2000<br />
1999<br />
RMB’000<br />
RMB’000<br />
NON-CURRENT ASSETS<br />
Fixed assets 11 69,486<br />
89,973<br />
CURRENT ASSETS<br />
Inventories 12 136,442<br />
165,735<br />
Trade debtors 13 140,328<br />
95,513<br />
Prepayments, deposits and other debtors 14 3,448<br />
2,189<br />
Cash and bank balances 132,548<br />
41,850<br />
412,766<br />
305,287<br />
CURRENT LIABILITIES<br />
Trade creditors 17,172<br />
18,253<br />
Other creditors, deposits received and accruals 15 52,070<br />
46,354<br />
Loans from a shareholder 16 –<br />
46,800<br />
Dividend payable –<br />
50,000<br />
Tax payable 13,893<br />
10,115<br />
83,135<br />
171,522<br />
NET CURRENT ASSETS 329,631<br />
133,765<br />
399,117<br />
223,738<br />
CAPITAL AND RESERVES<br />
Share capital 17 223,738<br />
223,738<br />
Reserves 18 175,379<br />
–<br />
399,117<br />
223,738
20<br />
<strong>UNITED</strong> <strong>FOOD</strong> <strong>HOLDINGS</strong> <strong>LIMITED</strong><br />
SUPPLEMENTARY PRO FORMA CONSOLIDATED CASH FLOW STATEMENT<br />
Year ended 31 December 2000<br />
2000<br />
1999<br />
RMB’000<br />
RMB’000<br />
(note 1)<br />
(note 1)<br />
CASH FLOWS FROM OPERATING ACTIVITIES<br />
Profit before tax<br />
Adjustments for:<br />
318,313<br />
194,066<br />
Depreciation 21,534<br />
21,316<br />
Provision for doubtful debts 3,341<br />
2,823<br />
Bad debts written off 357<br />
–<br />
Interest expense 775<br />
1,202<br />
Interest income ( ( 1,011 )<br />
( 447 )<br />
Operating profit before working capital changes 343,309<br />
218,960<br />
Work capital adjustments:<br />
Decrease/(increase) in inventories 29,293<br />
( 74,310 )<br />
Increase in trade debtors ( ( 48,513 )<br />
( 58,739 )<br />
Increase in prepayments, deposits and other debtors ( ( 1,259 )<br />
( 268 )<br />
Decrease in trade creditors ( ( 1,081 )<br />
( 1,806 )<br />
Increase in other creditors, deposits received and accruals 5,716<br />
7,793<br />
327,465<br />
91,630<br />
Interest received 1,011<br />
447<br />
Interest paid ( ( 775 )<br />
( 1,202 )<br />
Tax paid ( ( 54,156 )<br />
( 31,049 )<br />
Net cash generated from operating activities 273,545<br />
59,826<br />
CASH FLOW FROM INVESTING ACTIVITIES<br />
Purchases of fixed assets ( ( 1,047 )<br />
( 4,444 )<br />
Net cash used in investing activities ( ( 1,047 )<br />
( 4,444 )<br />
CASH FLOWS FROM FINANCING ACTIVITIES<br />
Dividend paid ( ( 135,000 )<br />
( 75,000 )<br />
Advance from/(repayment to) a shareholder ( ( 46,800 )<br />
40,057<br />
Net cash used in financing activities ( ( 181,800 )<br />
( 34,943 )<br />
NET INCREASE IN CASH AND CASH EQUIVALENTS 90,698<br />
20,439<br />
Cash and cash equivalents at beginning of year 41,850<br />
21,411<br />
CASH AND CASH EQUIVALENTS AT END OF YEAR 132,548<br />
41,850<br />
ANALYSIS OF BALANCES OF CASH AND CASH<br />
EQUIVALENTS<br />
Cash and bank balances 132,548<br />
41,850
31 December 2000<br />
1. RESTRUCTURING EXERCISE AND BASIS OF PRESENTATION<br />
<strong>UNITED</strong> <strong>FOOD</strong> <strong>HOLDINGS</strong> <strong>LIMITED</strong> 21<br />
NOTES TO FINANCIAL STATEMENTS<br />
THE COMPANY<br />
The Company was incorporated in Bermuda as an exempted company with limited liability under the<br />
Companies Act 1981 of Bermuda on 14 August 2000. On incorporation, the Company had an authorised<br />
share capital of HK$100,000 divided into 1,000,000 ordinary shares of HK$0.10 each. On 30 August 2000,<br />
1,000,000 ordinary shares of HK$0.10 each were issued nil paid. Apart from the foregoing, no other<br />
transactions were carried out by the Company during the period from 14 August 2000 (date of<br />
incorporation) to 31 December 2000. Accordingly, the Company has not recorded any revenue, profits,<br />
losses or cash flows for the period.<br />
Pursuant to a group restructuring exercise implemented subsequent to the balance sheet date as further<br />
described below, the share capital of the Company was increased to its present designation. Commencing<br />
26 March 2001, the Company’s shares have been listed on the Singapore Exchange Securities Trading<br />
Limited (“SGX-ST”).<br />
Comparative amounts have not been presented for the Company’s balance sheet because the Company<br />
did not exist at 31 December 1999.<br />
RESTRUCTURING EXERCISE<br />
Pursuant to a restructuring exercise (the “Restructuring Exercise”) to rationalise the structure of the Group<br />
in preparation for the listing of the Company’s shares on the SGX-ST in March 2001, the Company became<br />
the holding company of the subsidiaries now comprising the Group on 15 January 2001. This was<br />
accomplished by acquiring the entire issued share capital of Post-Ante Trading Limited (“Post-Ante”),<br />
which is, at the date of this report, the intermediate holding company of the other subsidiaries as set out<br />
below, for a consideration of RMB223,738,000. The consideration was based on the consolidated net<br />
tangible asset value of Post-Ante and its subsidiaries as at 31 December 1999. The purchase consideration<br />
was satisfied by (a) the allotment and issue of 418,001,870 ordinary shares of HK$0.50 each in the<br />
Company, credited as fully paid and (b) the credited as fully paid of 200,000 ordinary shares of HK$0.50<br />
each in the Company (which were consolidated from the above-mentioned 1,000,000 ordinary shares of<br />
HK$0.10 each allotted and issued nil paid on 30 August 2000) to the former shareholders of Post-Ante.<br />
Further details of the Restructuring Exercise are set out in note 17 to the financial statements and the<br />
Company’s prospectus dated 12 March 2001.<br />
Particulars of the subsidiaries, which were acquired by the Company pursuant to the Restructuring Exercise,<br />
are set out below:<br />
Paid-up Percentage of<br />
Place of share/ equity interest<br />
incorporation/ registered attributable Principal<br />
Name establishment capital to the Company activities<br />
Direct Indirect<br />
Post-Ante Trading British Virgin US$200 100% – Investment<br />
Limited Islands holding
22<br />
<strong>UNITED</strong> <strong>FOOD</strong> <strong>HOLDINGS</strong> <strong>LIMITED</strong><br />
NOTES TO FINANCIAL STATEMENTS<br />
31 December 2000<br />
1. RESTRUCTURING EXERCISE AND BASIS OF PRESENTATION (continued)<br />
Paid-up Percentage of<br />
Place of share/ equity interest<br />
incorporation/ registered attributable Principal<br />
Name establishment capital to the Company activities<br />
Direct Indirect<br />
Linyi Jiangquan The People’s US$4,000,000 – 100% Production<br />
Meat Products Republic and sale of<br />
Co., Ltd. (“Jiang Quan”) of China processed meat<br />
(the “PRC”) products,<br />
production and<br />
sale of fresh,<br />
chilled and<br />
frozen pork<br />
products, pig<br />
rearing and<br />
animal feed<br />
production<br />
Globe Bright Limited Hong Kong HK$100 – 100% Dormant<br />
BASIS OF PRESENTATION<br />
The Restructuring Exercise involved companies under common control. Because the Restructuring Exercise<br />
took place on 15 January 2001, the Company together with its subsidiaries should only be regarded and<br />
accounted for as a continuing group in the preparation of the Group’s financial statements commencing the<br />
year ending 31 December 2001. Nevertheless, for the benefit of shareholders, supplementary pro forma<br />
consolidated financial statements for the current year and the related notes thereto have also been<br />
presented in these financial statements on the basis that the Company is treated as the holding company<br />
of its subsidiaries for the financial years presented rather than from the subsequent date of acquisition of<br />
the subsidiaries on 15 January 2001. The pro forma consolidated results and cash flows of the Group for<br />
the years ended 31 December 1999 and 2000 include the results and cash flow of the Company and its<br />
subsidiaries with effect from 1 January 1999 or since their respective dates of incorporation or<br />
establishment, where this is a shorter period. The pro forma consolidated balance sheets as at 31 December<br />
1999 and 2000 have been prepared on the basis that the current Group structure was in place at those<br />
dates. All significant transactions and balances among the companies comprising the Group have been<br />
eliminated on pro forma consolidation. Such pro forma financial information will form the basis for the<br />
comparative amounts presented in the preparation of the Group’s consolidated financial statements for the<br />
year ending 31 December 2001.<br />
Although the Restructuring Exercise had not been completed and, accordingly, the Group did not legally<br />
exist until January 2001, in the opinion of the directors, the presentation of such supplementary pro forma<br />
consolidated financial statements prepared on the aforesaid basis is necessary to apprise the Company’s<br />
shareholders of the Group’s profit and its state of affairs as a whole.
31 December 2000<br />
2. CORPORATE INFORMATION<br />
<strong>UNITED</strong> <strong>FOOD</strong> <strong>HOLDINGS</strong> <strong>LIMITED</strong> 23<br />
The registered office of the Company is located at Clarendon House, 2 Church Street, Hamilton HM 11,<br />
Bermuda.<br />
The principal activity of the Company is investment holding. The principal activities of the Company’s<br />
subsidiaries acquired pursuant to the Group Restructurings are set out in note 1 above. There were no<br />
changes in the nature of the subsidiaries’ principal activities during the year.<br />
The operations of the Group were mainly carried out in the PRC through a wholly-owned subsidiary which<br />
employed 1,663 and 1,729 employees as at 31 December 1999 and 2000, respectively.<br />
Prior to the Restructuring Exercise, the Company was a subsidiary of Chinese Glory Investments Limited, a<br />
company incorporated in the British Virgin Islands and considered by the directors to be the Company’s<br />
ultimate holding company as at the balance sheet date.<br />
3. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES<br />
NOTES TO FINANCIAL STATEMENTS<br />
BASIS OF PREPARATION<br />
The financial statements have been prepared under historical cost convention and in accordance with<br />
International Accounting Standards, subject to the pro forma basis of presentation as set out in note 1 above.<br />
The Group’s operations are principally conducted in the PRC. Accordingly, the supplementary pro forma<br />
consolidated financial statements have been prepared in Renminbi (“RMB”), being the functional currency<br />
of all principal companies in the Group.<br />
REVENUE RECOGNITION<br />
Revenue is recognised when it is probable that the economic benefits will flow to the Group and when the<br />
revenue can be measured reliably, on the following bases:<br />
(a) the sale of goods, when the significant risks and rewards of ownership have been transferred to the<br />
buyer, provided that the Group maintains neither managerial involvement to the degree usually<br />
associated with ownership, nor effective control over the goods sold; and<br />
(b) interest income, on a time proportion basis, taking into account the principal outstanding and the<br />
effective interest rate applicable.<br />
OPERATING LEASES<br />
Leases where substantially all the rewards and risks of ownership of assets remain with the lessor are<br />
accounted for as operating leases. Rentals applicable to such operating leases are charged to the profit and<br />
loss account on the straight-line basis over the lease terms.
24<br />
<strong>UNITED</strong> <strong>FOOD</strong> <strong>HOLDINGS</strong> <strong>LIMITED</strong><br />
NOTES TO FINANCIAL STATEMENTS<br />
31 December 2000<br />
3. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)<br />
FIXED ASSETS AND DEPRECIATION<br />
Fixed assets are stated at cost less accumulated depreciation. The cost of an asset comprises its purchase<br />
price and any directly attributable costs of bringing the asset to its working condition and location for its<br />
intended use. Expenditure incurred after fixed assets have been put into operation, such as repairs and<br />
maintenance, is normally charged to the profit and loss account in the period in which it is incurred. In<br />
situations where it can be clearly demonstrated that the expenditure has resulted in an increase in the future<br />
economic benefits expected to be obtained from the use of the fixed asset, the expenditure is capitalised<br />
as an additional cost of that asset.<br />
Depreciation is calculated on the straight-line basis to write off the cost of each asset over the following<br />
estimated useful lives:<br />
Leasehold buildings 10 years or over the lease terms,<br />
whichever is shorter<br />
Leasehold improvements 10 years or over the lease terms,<br />
whichever is shorter<br />
Plant and machinery 5 years<br />
Furniture, fixtures and office equipment 5 years<br />
Motor vehicles 5 years<br />
The gain or loss on disposal or retirement of a fixed asset recognised in the profit and loss account is the<br />
difference between the net sales proceeds and the carrying amount of the relevant asset.<br />
SUBSIDIARIES<br />
A subsidiary is a company in which the Company, directly or indirectly, controls more than half of its voting<br />
power or paid-up capital or controls the composition of its board of directors.<br />
Interests in subsidiaries are stated at cost unless, in the opinion of the directors, there have been permanent<br />
impairment in values, when they are written down to values determined by the directors.<br />
INVENTORIES<br />
Inventories are stated at the lower of cost and net realisable value after making due allowance for obsolete<br />
or slow-moving items. Cost is determined on the first-in, first-out basis and, in the case of work in progress<br />
and finished goods, comprises direct materials, direct labour and an appropriate proportion of<br />
manufacturing overheads. Net realisable value is based on estimated selling prices less any estimated costs<br />
expected to be incurred to completion and disposal.<br />
PROVISIONS<br />
Provisions are recognised when the Group has a present obligation (legal or constructive) as a result of a<br />
past event, it is probable that an outflow of resources embodying economic benefits will be required to<br />
settle the obligation and a reliable estimate can be made of the amount of the obligation.
31 December 2000<br />
3. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)<br />
BORROWING COSTS<br />
Borrowing costs are expensed in the period in which they are incurred.<br />
<strong>UNITED</strong> <strong>FOOD</strong> <strong>HOLDINGS</strong> <strong>LIMITED</strong> 25<br />
NOTES TO FINANCIAL STATEMENTS<br />
TAX<br />
PRC corporate income tax is provided at rates applicable to an enterprise in the PRC on the income for<br />
financial reporting purposes, adjusted for income and expense items which are not assessable or deductible<br />
for income tax purposes.<br />
Deferred tax is provided, using the liability method, on all temporary differences at the balance sheet date<br />
between the tax bases of assets and liabilities and their carrying amounts for financial reporting purposes.<br />
Deferred tax liabilities are recognised for all taxable temporary differences. Deferred tax assets are<br />
recognised for all deductible temporary differences, carry-forward of unused tax assets and unused tax<br />
losses, to the extent that it is probable that taxable profit will be available against which the deductible<br />
temporary differences, carry-forward of unused tax assets and unused tax losses can be utilised.<br />
Deferred tax assets and liabilities are measured at the tax rates that are expected to apply to the period<br />
when the asset is realised or the liability is settled, based on tax rates that have been enacted at the balance<br />
sheet date or subsequently enacted.<br />
RETIREMENT BENEFITS<br />
No pension scheme or retirement plan has been sponsored or operated by the Company or its subsidiaries<br />
for its permanent employees in Hong Kong and Singapore.<br />
Pursuant to the relevant regulations of the PRC government, the subsidiary operating in the PRC mainland<br />
has participated in a local municipal government retirement benefit scheme (the “Scheme”), whereby the<br />
PRC subsidiary is required to contribute a certain percentage of the basic salaries of its employees to the<br />
Scheme to fund their retirement benefits. The local municipal government undertakes to assume the<br />
retirement benefits obligations of all existing and future retired employees of the PRC subsidiary. The only<br />
obligation of the Group with respect to the Scheme is to pay the ongoing required contributions under the<br />
Scheme mentioned above. Contributions under the Scheme are charged to the profit and loss account as<br />
incurred. There are no provisions under the Scheme whereby forfeited contributions may be used to reduce<br />
future contributions.
26<br />
<strong>UNITED</strong> <strong>FOOD</strong> <strong>HOLDINGS</strong> <strong>LIMITED</strong><br />
NOTES TO FINANCIAL STATEMENTS<br />
31 December 2000<br />
3. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)<br />
FOREIGN CURRENCIES<br />
The Company maintains its accounting records in RMB and transactions arising in foreign currencies,<br />
including Singapore dollars, during the year are translated into RMB at the applicable rates of exchange<br />
ruling at the transaction dates. Monetary assets and liabilities denominated in foreign currencies at the<br />
balance sheet date are translated at the applicable rates of exchange ruling at that date. Exchange<br />
differences are dealt with in the profit and loss account.<br />
On pro forma consolidation, the operating results of non-PRC companies in the Group are translated into<br />
RMB at the applicable rate of exchange ruling at the dates of the transactions and the assets and liabilities<br />
of non-PRC companies in the Group are translated into RMB at the applicable rates of exchange ruling at<br />
the balance sheet dates. The resulting translation differences, if any, are included in the exchange<br />
fluctuation reserve.<br />
RESEARCH AND DEVELOPMENT COSTS<br />
All research costs are charged to the profit and loss account as incurred.<br />
Expenditure incurred on projects to develop new products is capitalised and deferred only when the projects<br />
are clearly defined; the expenditure is separately identifiable and can be measured reliably; there is<br />
reasonable certainty that the projects are technically feasible; and the products have commercial value.<br />
Product development expenditure which does not meet these criteria is expensed when incurred.<br />
Deferred development costs are amortised using the straight-line basis over the commercial lives of the<br />
underlying products of not exceeding five years, commencing from the date when the products are put into<br />
commercial production.<br />
During the year ended 31 December 2000, the research and development costs incurred were not<br />
significant to the Group and were charged to the profit and loss account.<br />
RELATED PARTIES<br />
Parties are considered to be related if one party has the ability, directly or indirectly, to control the other<br />
party, or exercise significant influence over the other party in making financial and operating decisions.<br />
Parties are also considered to be related if they are subject to common control or common significant<br />
influence. Related parties may be individuals or corporate entities.<br />
CASH AND CASH EQUIVALENTS<br />
Cash on hand and in banks is carried at cost.<br />
Cash and cash equivalents are defined as cash on hand and in banks, demand deposits and short-term,<br />
highly liquid investments which are readily convertible into known amounts of cash and subject to<br />
insignificant risk of changes in value.<br />
For the purpose of the supplementary pro forma consolidated cash flow statement, cash and cash<br />
equivalents consist of cash on hand and in banks.
31 December 2000<br />
4. RELATED PARTY TRANSACTIONS<br />
(a) During the year, the Group had the following significant related party transactions:<br />
<strong>UNITED</strong> <strong>FOOD</strong> <strong>HOLDINGS</strong> <strong>LIMITED</strong> 27<br />
NOTES TO FINANCIAL STATEMENTS<br />
Notes 2000<br />
1999<br />
RMB’000<br />
RMB’000<br />
Catering and accommodation expenses<br />
paid to a related company (i) 693<br />
–<br />
Sales of finished goods to a related<br />
company (ii) 279<br />
49<br />
Interest expense paid to a shareholder (iii) 775<br />
1,202<br />
Notes:<br />
(i) The directors consider that the catering and accommodation expenses paid to Jiang Quan<br />
Hotel, a related company owned by a nephew of Mr. Wang Tingbao, a shareholder and<br />
director of the Company, were made according to the prices and conditions similar to those<br />
offered to other customers of Jiang Quan Hotel.<br />
(ii) The directors consider that the sales of finished goods to Jiang Quan Hotel were made<br />
according to the prices and conditions similar to those offered to other customers of the<br />
Group.<br />
(iii) The interest expense was paid to Mr. David Yip Wai Sun, a shareholder and director of the<br />
Company, in respect of the loans advanced to the Group at interest rate of approximately<br />
5.7%. The loans from a shareholder had been fully repaid by the Group during the year.<br />
(b) During the year ended 31 December 2000, Mr. David Yip Wai Sun, a director of the Company,<br />
advanced loans to the Group and the terms of which are set out in note 16 to the financial statements.<br />
The amount involved were fully repaid during the year.<br />
In the opinion of the directors, the above transactions were incurred in the ordinary course of business of<br />
the Group.<br />
The Company’s holding company was owned by the directors of the Company as to 70% by Mr. David Yip<br />
Wai Sun, 20% by Mr. Wang Tingbao and 10% by Mr. Wang Wenguang. Particulars of the Company’s<br />
ultimate holding company are set out in note 2 to the financial statements. Other than the foregoing and<br />
the subsidiaries of the Company, particulars of which are set out in note 1 to the financial statements, there<br />
were no other principal related party relations where control over financial and operating policies of the<br />
subject entity existed as at the balance sheet date.
28<br />
<strong>UNITED</strong> <strong>FOOD</strong> <strong>HOLDINGS</strong> <strong>LIMITED</strong><br />
NOTES TO FINANCIAL STATEMENTS<br />
31 December 2000<br />
5. TURNOVER AND REVENUE<br />
Turnover represents the net invoiced value of goods sold, after allowance for returns and trade discounts,<br />
and after elimination of all significant intra-Group transactions.<br />
An analysis of the Group’s turnover and revenue is as follows:<br />
2000<br />
1999<br />
RMB’000<br />
RMB’000<br />
Turnover – sales of goods 1,554,177<br />
1,012,822<br />
Interest income 1,011<br />
447<br />
Others 1,157<br />
1,203<br />
Revenue 1,556,345<br />
1,014,472<br />
6. PROFIT FROM OPERATING ACTIVITIES<br />
The Group’s profit from operating activities is arrived at after charging:<br />
2000<br />
1999<br />
RMB’000<br />
RMB’000<br />
Directors’ remuneration:<br />
Fees –<br />
–<br />
Other emoluments 720<br />
720<br />
Depreciation 21,534<br />
21,316<br />
Operating lease rentals on land and buildings 1,567<br />
1,333<br />
Staff costs (excluding directors’ remuneration) 42,350<br />
21,750<br />
Less: Retirement scheme contributions ( ( 2,053 )<br />
( 1,399 )<br />
Amount included in research and development costs ( ( 1,085 )<br />
( 704 )<br />
39,212<br />
19,647<br />
Retirement scheme contributions 2,053<br />
1,399<br />
Research and development costs 2,077<br />
1,982<br />
Auditors’ remuneration 1,712<br />
1,100<br />
Provision for doubtful debts 3,341<br />
2,823<br />
Bad debts written off 357<br />
–
31 December 2000<br />
7. FINANCE COSTS<br />
8. TAX<br />
<strong>UNITED</strong> <strong>FOOD</strong> <strong>HOLDINGS</strong> <strong>LIMITED</strong> 29<br />
2000<br />
1999<br />
RMB’000<br />
RMB’000<br />
Interest expenses on loans<br />
from a shareholder 775<br />
1,202<br />
The tax charge represents PRC income tax provision for the year.<br />
NOTES TO FINANCIAL STATEMENTS<br />
In accordance with various approval documents issued by the State Tax Bureau and the Local Tax Bureau<br />
of the PRC, Jiang Quan was exempted from the state and local corporate income tax of the PRC for the<br />
first two profitable financial years of operation starting from 1996 and thereafter is entitled to a 50% relief<br />
from the state corporate income tax of the PRC for the following three financial years. Accordingly, Jiang<br />
Quan is subject to the reduced tax rate of 18% for the three financial years from 1 January 1998 to 31<br />
December 2000. Upon expiry of the tax relief period, the usual PRC corporate income tax rate of 33%,<br />
comprising state corporate income tax rate of 30% and local corporate income tax rate of 3%, is applicable<br />
to Jiang Quan.<br />
No deferred tax has been provided as the Group did not have any significant timing differences which gave<br />
rise to a deferred tax asset or liability at the balance sheet date.<br />
A reconciliation of the expected tax expense with the actual tax expense is presented below:<br />
2000<br />
1999<br />
RMB’000<br />
RMB’000<br />
Profit before tax 318,313<br />
194,066<br />
Tax at the applicable tax rate of 33% 105,216<br />
64,042<br />
Non-deductible expenses 1,785<br />
1,293<br />
Tax exemption of Jiang Quan ( ( 49,067 )<br />
( 30,024 )<br />
Actual PRC corporate income tax 57,934<br />
35,311
30<br />
<strong>UNITED</strong> <strong>FOOD</strong> <strong>HOLDINGS</strong> <strong>LIMITED</strong><br />
NOTES TO FINANCIAL STATEMENTS<br />
31 December 2000<br />
9. DIVIDENDS<br />
No dividend has been paid or declared by the Company since the date of its incorporation. The dividends<br />
paid or declared by a subsidiary of the Company during the year ended 31 December 2000 to its then<br />
shareholders prior to the Restructuring Exercise as set out in note 1 to the financial statements amounted<br />
to RMB85,000,000 (1999: RMB85,000,000).<br />
10. EARNINGS PER SHARE<br />
The calculation of pro forma basic earnings per share is based on the pro forma consolidated net profit<br />
attributable to shareholders for the year of RMB260,379,000 (1999: RMB158,755,000) and the pro forma<br />
weighted average of 836,403,740 ordinary shares of HK$0.25 each deemed to be in issue throughout the<br />
year as set out in further detail in note 17.<br />
For comparative purposes, the number of ordinary shares for the year ended 31 December 1999 was taken<br />
as 836,403,740 ordinary shares of HK$0.25 each, which is also the basis used in the pro forma financial<br />
statements set out in the Company’s prospectus dated 12 March 2001.<br />
There were no potential dilutive ordinary shares in existence for the two years ended 31 December 2000<br />
and accordingly, no pro forma diluted earnings per share has been presented.
31 December 2000<br />
11. FIXED ASSETS<br />
Furniture,<br />
fixtures<br />
Leasehold Leasehold Plant and and office Motor<br />
buildings improvements machinery equipment vehicles Total<br />
2000 1999 2000 1999 2000 1999 2000 1999 2000 1999 2000 1999<br />
RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000<br />
Cost:<br />
At beginning of year 90,801 89,762 16,596 16,125 51,347 49,135 1,243 1,243 3,366 2,644 163,353 158,909<br />
Additions – 1,039 – 471 1,047 2,212 – – – 722 1,047 4,444<br />
At end of year 90,801 90,801 16,596 16,596 52,394 51,347 1,243 1,243 3,366 3,366 164,400 163,353<br />
Accumulated depreciation:<br />
At beginning of year 31,088 22,003 5,570 3,867 34,430 24,742 1,046 859 1,246 593 73,380 52,064<br />
Provided during the year 9,031 9,085 1,667 1,703 9,966 9,688 184 187 686 653 21,534 21,316<br />
<strong>UNITED</strong> <strong>FOOD</strong> <strong>HOLDINGS</strong> <strong>LIMITED</strong> 31<br />
NOTES TO FINANCIAL STATEMENTS<br />
At end of year 40,119 31,088 7,237 5,570 44,396 34,430 1,230 1,046 1,932 1,246 94,914 73,380<br />
Net book value 50,682 59,713 9,359 11,026 7,998 16,917 13 197 1,434 2,120 69,486 89,973<br />
The Group’s leasehold buildings are situated in PRC and held under medium term leases.
32<br />
<strong>UNITED</strong> <strong>FOOD</strong> <strong>HOLDINGS</strong> <strong>LIMITED</strong><br />
NOTES TO FINANCIAL STATEMENTS<br />
31 December 2000<br />
12. INVENTORIES<br />
Group<br />
2000<br />
1999<br />
RMB’000 RMB’000 RMB’000<br />
Raw materials 57,100<br />
79,887<br />
Work in progress 7,713<br />
10,167<br />
Finished goods 71,629<br />
75,681<br />
136,442<br />
165,735<br />
No inventories included in the above were carried at net realisable value as at 31 December 2000 (1999:<br />
Nil).<br />
13. TRADE DEBTORS<br />
Group<br />
2000<br />
1999<br />
RMB’000 RMB’000 RMB’000<br />
Trade debtors 150,169<br />
102,013<br />
Less: Provision for doubtful debts ( ( 9,841 )<br />
( 6,500 )<br />
The movements in provision for doubtful debts are set out below:<br />
140,328<br />
95,513<br />
Group<br />
2000<br />
1999<br />
RMB’000 RMB’000 RMB’000<br />
At 1 January 6,500<br />
3,677<br />
Provided during the year 3,341<br />
2,823<br />
At 31 December 9,841<br />
6,500
31 December 2000<br />
14. PREPAYMENTS, DEPOSITS AND OTHER DEBTORS<br />
<strong>UNITED</strong> <strong>FOOD</strong> <strong>HOLDINGS</strong> <strong>LIMITED</strong> 33<br />
Group<br />
2000<br />
1999<br />
RMB’000<br />
RMB’000<br />
Prepayments and other debtors 2,871<br />
1,023<br />
Deposits 577<br />
1,166<br />
15. OTHER CREDITORS, DEPOSITS RECEIVED AND ACCRUALS<br />
3,448<br />
2,189<br />
Group<br />
2000<br />
1999<br />
RMB’000<br />
RMB’000<br />
Other creditors 13,615<br />
7,673<br />
Deposits received 860<br />
939<br />
Accruals 37,595<br />
37,742<br />
16. LOANS FROM A SHAREHOLDER<br />
NOTES TO FINANCIAL STATEMENTS<br />
52,070<br />
46,354<br />
The amounts were unsecured, bore interest at approximately 5.7% per annum and were fully repaid during<br />
the year.
34<br />
<strong>UNITED</strong> <strong>FOOD</strong> <strong>HOLDINGS</strong> <strong>LIMITED</strong><br />
NOTES TO FINANCIAL STATEMENTS<br />
31 December 2000<br />
17. SHARE CAPITAL<br />
The following changes in the Company’s authorised and issued share capital took place during the period<br />
from 14 August 2000 (date of incorporation) to the date of this report:<br />
(a) On incorporation, the Company had an authorised share capital of HK$100,000 divided into<br />
1,000,000 shares of HK$0.10 each.<br />
(b) On 30 August 2000, 1,000,000 ordinary shares of HK$0.10 each were issued at par and nil paid.<br />
(c) On 15 January 2001, the authorised share capital of the Company was increased from HK$100,000<br />
to HK$500,000,000 by the creation of an additional 999,800,000 ordinary shares of HK$0.50 each.<br />
(d) On 15 January 2001, every five ordinary shares of HK$0.10 each in the authorised and issued share<br />
capital of the Company were consolidated into one ordinary share of HK$0.50 each.<br />
(e) On 19 January 2001, pursuant to the Restructuring Exercise, an aggregate of 418,001,870 ordinary<br />
shares of HK$0.50 each in the Company were issued and credited as fully paid; and the 200,000<br />
ordinary shares of HK$0.50 each then outstanding in the Company (which were consolidated from<br />
the 1,000,000 ordinary shares of HK$0.10 each, allotted and issued nil paid on 30 August 2000, as<br />
set out in (b) above) were credited as fully paid, in consideration of and in exchange for the acquisition<br />
by the Company for the entire issued share capital of Post-Ante.<br />
(f) On 22 February 2001, the Company’s authorised and issued shares of HK$0.50 each were sub-divided<br />
into two ordinary shares of HK$0.25 each.<br />
(g) On 26 March 2001, 130,550,000 shares of HK$0.25 each were issued to the public at S$0.315<br />
each for a total cash consideration, before issue expenses, of S$41,123,250 (approximately<br />
RMB196,240,000).
31 December 2000<br />
17. SHARE CAPITAL (continued)<br />
<strong>UNITED</strong> <strong>FOOD</strong> <strong>HOLDINGS</strong> <strong>LIMITED</strong> 35<br />
NOTES TO FINANCIAL STATEMENTS<br />
The following is a summary of the above movements in the issued share capital of the Company:<br />
Number of Number of Number of<br />
ordinary ordinary ordinary<br />
shares of shares of shares of<br />
Notes HK$0.10 each HK$0.50 each HK$0.25 each Par value<br />
RMB$’000<br />
Issue and allotment of ordinary shares<br />
of HK$0.10 each in the Company<br />
nil paid on 30 August 2000 (b) 1,000,000 – – –<br />
Consolidation of every five ordinary shares<br />
into one ordinary share (d) ( 1,000,000 ) 200,000 – –<br />
Issued and allotment of ordinary shares of<br />
HK$0.50 each in the Company,<br />
credited as fully paid, upon completion<br />
of the Restructuring Exercises (e) – 418,001,870 – 223,631<br />
Credited as fully paid the 1,000,000 ordinary<br />
shares of HK$0.10 each that were issued<br />
nil paid on 30 August 2000 (e) – – – 107<br />
Subdivision of every one ordinary share into<br />
two ordinary shares<br />
Pro forma share capital as at 31 December<br />
(f) – ( 418,201,870 ) 836,403,740 –<br />
1999 and 2000 (g) – – 836,403,740 223,738<br />
New issue on public listing – – 130,550,000 34,922<br />
– – 966,953,740 258,660
36<br />
<strong>UNITED</strong> <strong>FOOD</strong> <strong>HOLDINGS</strong> <strong>LIMITED</strong><br />
NOTES TO FINANCIAL STATEMENTS<br />
31 December 2000<br />
18. RESERVES<br />
Group<br />
Retained Statutory Capital<br />
profits reserve reserve Total<br />
RMB’000 RMB’000 RMB’000 RMB’000<br />
Balance at 1 January 1999 – 17,000 ( 90,755 ) ( 73,755 )<br />
Net profit for the year 158,755 – – 158,755<br />
Dividends ( 85,000 ) – – ( 85,000 )<br />
Transfer to capital reserve<br />
Balance at 31 December 1999 and<br />
( 73,755 ) – 73,755 –<br />
1 January 2000 – 17,000 ( 17,000 ) –<br />
Net profit for the year 260,379 – – 260,379<br />
Dividends ( 85,000 ) – – ( 85,000 )<br />
Transfer to capital reserve ( 17,000 ) – 17,000 –<br />
Balance at 31 December 2000 158,379 17,000 – 175,379<br />
Notes:<br />
STATUTORY RESERVE<br />
In accordance with the relevant PRC regulations, Jiang Quan, being a wholly foreign owned enterprise<br />
established in the PRC, is required to appropriate not less than 10% of its profit after tax to the<br />
statutory reserve, until the balance of the fund reaches 50% of the registered capital. Subject to certain<br />
restrictions as set out in the relevant PRC regulations, the statutory reserve may be used to offset against<br />
the accumulated losses, if any, of Jiang Quan. As at 31 December 1998, the statutory reserve of Jiang<br />
Quan reached 50% of its registered capital. Accordingly, the directors of Jiang Quan did not<br />
recommend any appropriation of profit after tax to this statutory reserve.<br />
CAPITAL RESERVE<br />
The capital reserve of the Group arose as a result of the Restructuring Exercise and represented the<br />
excess of the nominal value of the Company’s shares issued and credited as fully paid as consideration<br />
for the acquisition of Post-Ante over the nominal value of the share capital of Post-Ante as acquired.
31 December 2000<br />
19. DIRECTORS’ REMUNERATION<br />
<strong>UNITED</strong> <strong>FOOD</strong> <strong>HOLDINGS</strong> <strong>LIMITED</strong> 37<br />
The remuneration of the directors of the Company analysed into the following bands is disclosed in<br />
compliance with paragraph 4 of Appendix 11 of the Listing Manual of the SGX-ST:<br />
Executive<br />
Group<br />
Nonexecutive<br />
directors directors Total<br />
S$500,000 and above (RMB2,419,000 and above) – – –<br />
S$250,000 to S$499,999 (RMB1,210,000<br />
to RMB2,419,000) – – –<br />
Below S$250,000 (Below RMB1,210,000) 3 2 5<br />
20. SEGMENT INFORMATION<br />
3 2 5<br />
The Group’s operating businesses are organised and managed separately according to the nature of<br />
products, with each segment representing a strategic business segment that offers different products in the<br />
PRC market. The processed meat product segment manufactures and distributes processed meat products<br />
such as pre-cooked and consumer-ready sausages.<br />
The frozen pork product segment operates the Group’s abattoir to carry out the business of pig slaughtering<br />
and the sale of fresh, chilled and frozen pork products.<br />
The pig rearing segment refers to the rearing of pigs in the Group’s pig farm in the PRC for the sales of pure<br />
breed and cross breed pigs.<br />
The feed production segment manufactures and sells animal feeds such as pig feeds and chicken feeds in<br />
the PRC.<br />
The Group generally accounts for intersegment transfers at cost.<br />
NOTES TO FINANCIAL STATEMENTS<br />
All the Group’s revenue, expenses, operating results, assets and liabilities and capital expenditures are<br />
attributable to a single geographical region, which is the PRC.
38<br />
<strong>UNITED</strong> <strong>FOOD</strong> <strong>HOLDINGS</strong> <strong>LIMITED</strong><br />
NOTES TO FINANCIAL STATEMENTS<br />
31 December 2000<br />
20. SEGMENT INFORMATION (continued)<br />
Year ended 31 December 2000<br />
Processed Frozen<br />
meat pork Feed<br />
products products Pig rearing production Elimination Consolidated<br />
RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000<br />
Segment revenue:<br />
Net sales to external<br />
customers 721,342 653,123 67,590 112,122 – 1,554,177<br />
Intersegment sales – 81,212 13,945 31,863 ( 127,020 ) –<br />
Other revenue 441 531 149 36 – 1,157<br />
Total revenue 721,783 734,866 81,684 144,021 ( 127,020 ) 1,555,334<br />
Segment net profit 145,170 136,637 14,094 27,121 – 323,022<br />
Unallocated corporate<br />
expenses ( 4,945 )<br />
Interest income 1,011<br />
Profit from operating<br />
activities 319,088<br />
Finance costs ( 775 )<br />
Profit before tax 318,313<br />
Tax ( 57,934 )<br />
Net profit attributable to<br />
shareholders 260,379<br />
As at 31 December 2000<br />
Segment assets<br />
Unallocated corporate<br />
194,499 204,293 38,853 43,556 481,201<br />
assets 1,051<br />
Pro forma consolidated<br />
total assets 482,252<br />
Segment liabilities<br />
Unallocated corporate<br />
50,086 10,672 629 4,196 65,583<br />
liabilities 17,552<br />
Pro forma consolidated<br />
total liabilities 83,135<br />
Capital expenditures 896 146 5 – 1,047<br />
Depreciation 10,590 5,489 3,521 1,934 21,534<br />
Non-cash expenses 2,735 762 – 201 3,698
31 December 2000<br />
20. SEGMENT INFORMATION (continued)<br />
Year ended 31 December 1999<br />
<strong>UNITED</strong> <strong>FOOD</strong> <strong>HOLDINGS</strong> <strong>LIMITED</strong> 39<br />
NOTES TO FINANCIAL STATEMENTS<br />
Processed Frozen<br />
meat pork Feed<br />
products products Pig rearing production Elimination Consolidated<br />
RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000<br />
Segment revenue:<br />
Net sales to external<br />
customers 484,457 403,902 36,902 87,561 – 1,012,822<br />
Intersegment sales – 44,333 14,105 12,886 ( 71,324 ) –<br />
Other revenue 551 529 123 – – 1,203<br />
Total revenue 485,008 448,764 51,130 100,447 ( 71,324 ) 1,014,025<br />
Segment net profit<br />
Unallocated corporate<br />
90,342 79,990 6,305 21,926 – 198,563<br />
expenses ( 3,742 )<br />
Interest income 447<br />
Profit from operating<br />
activities 195,268<br />
Finance costs ( 1,202 )<br />
Profit before tax 194,066<br />
Tax ( 35,311 )<br />
Net profit attributable to<br />
shareholders 158,755<br />
As at 31 December 1999<br />
Segment assets 165,558 160,148 36,270 33,284 395,260<br />
Segment liabilities 42,837 11,810 2,969 4,241 61,857<br />
Unallocated corporate<br />
liabilities 109,665<br />
Pro forma consolidated<br />
total liabilities 171,522<br />
Capital expenditures 713 1,081 658 1,992 4,444<br />
Depreciation 10,531 5,571 3,491 1,723 21,316<br />
Non-cash expenses 523 2,000 – 300 2,823
40<br />
<strong>UNITED</strong> <strong>FOOD</strong> <strong>HOLDINGS</strong> <strong>LIMITED</strong><br />
NOTES TO FINANCIAL STATEMENTS<br />
31 December 2000<br />
21. COMMITMENTS<br />
The Group leases certain properties under lease agreements. As at 31 December 2000, the Group had the<br />
following commitments:<br />
Group<br />
2000<br />
1999<br />
RMB’000 RMB’000 RMB’000<br />
Within one year 1,698<br />
1,709<br />
In the second to fifth years, inclusive 6,383<br />
5,931<br />
Over five years 40,236 40,236 41,067<br />
48,317<br />
48,317 48,707<br />
The Company did not have any significant capital commitments as at 31 December 2000.<br />
22. FINANCIAL INSTRUMENTS<br />
As 31 December 2000, the Group’s financial instruments mainly consisted of cash and bank balances, trade<br />
debtors, other debtors, trade creditors and other creditors.<br />
(i) Interest rate risk<br />
The Group has no significant exposure to interest rate risk.<br />
(ii) Credit risk<br />
All the Group’s cash and cash equivalents are deposited with banks in the PRC.<br />
The carrying amounts of trade debtors included in the supplementary pro forma consolidated balance<br />
sheet represent the Group’s maximum exposure to credit risk in relation to the Group’s financial assets.<br />
No other financial assets carry a significant exposure to credit risk. The Group has no significant<br />
concentration of credit risk.<br />
(iii) Fair values<br />
The fair values of cash and bank balances, trade debtors, other debtors, trade creditors and other<br />
creditors are not materially different from their carrying amounts because of the immediate or short<br />
term maturity of these financial instruments.
31 December 2000<br />
23. POST BALANCE SHEET EVENTS<br />
Subsequent to 31 December 2000, the following events occurred:<br />
<strong>UNITED</strong> <strong>FOOD</strong> <strong>HOLDINGS</strong> <strong>LIMITED</strong> 41<br />
(a) The companies now comprising the Group undertook the Restructuring Exercise, further details of<br />
which are set out in note 1 to the financial statements.<br />
(b) The Company’s shares were listed on the SGX-ST on 26 March 2001. Further details of the public issue<br />
of new shares are set out in note 17 to the financial statements and the Company’s prospectus dated<br />
12 March 2001.<br />
24. APPROVAL OF THE FINANCIAL STATEMENTS<br />
The financial statements were approved by the board of directors on 18 Apirl 2001.<br />
NOTES TO FINANCIAL STATEMENTS
42<br />
<strong>UNITED</strong> <strong>FOOD</strong> <strong>HOLDINGS</strong> <strong>LIMITED</strong><br />
SHAREHOLDERS’ INFORMATION<br />
AS AT 16 APRIL, 2001<br />
Authorised Share Capital : HK$500,000,000<br />
Issued and Fully Paid-up Capital : HK$241,738,435<br />
Class of Shares : Ordinary Share of HK$0.25 each<br />
Voting Rights : One Vote per Share<br />
DISTRIBUTION OF SHARE<strong>HOLDINGS</strong><br />
Size of Shareholding Number of Shareholders % Number of Shares %<br />
1 - 1,000 179 46.49 179,000 0.02<br />
1,001 - 10,000 133 34.55 748,000 0.08<br />
10,0001 - 1,000,000 64 16.62 6,061,000 0.62<br />
1,000,001 and above 9 2.34 959,965,740 99.28<br />
Total 385 100.00 966,953,740 100.00<br />
SUBSTANTIAL SHAREHOLDERS<br />
as recorded in the Register of Substantial Shareholders as at 16 April 2001<br />
Direct Interest % Deemed Interest %<br />
David Yip Wai Sun 175,644,784 18.2 585,482,620 60.5<br />
Wang Tingbao 50,184,224 5.2 585,482,620 60.5<br />
Chinese Glory Investments Limited 585,482,620 60.5 – –<br />
Note: David Yip Wai Sun and Wing Tingbao are deemed to be interested in the shareholding of Chinese<br />
Glory Investments Limited (“Chinese Glory”) by virture of their interest of 70% and 20% respectively in<br />
Chinese Glory.
TWENTY LARGEST SHAREHOLDERS<br />
<strong>UNITED</strong> <strong>FOOD</strong> <strong>HOLDINGS</strong> <strong>LIMITED</strong> 43<br />
SHAREHOLDERS’ INFORMATION<br />
AS AT 16 APRIL, 2001<br />
No. Name Number of Shares %<br />
1 Chinese Glory Investments Limited 585,482,620 60.55<br />
2 David Yip Wai Sun 175,644,784 18.16<br />
3 OUB Securities Pte Ltd 106,076,000 10.97<br />
4 Wang TingBao 50,184,224 5.19<br />
5 Wang WengGuang 25,092,112 2.59<br />
6 Overseas Union Bank Nominees Pte Ltd 8,724,000 0.90<br />
7 G K Goh Stockbrokers Pte Ltd 5,318,000 0.55<br />
8 J M Sassoon & Co (Pte) Ltd 1,764,000 0.18<br />
9 DMG & Partners Securities Pte Ltd 1,680,000 0.17<br />
10 Airjet Auto-Care Pte Ltd 1,000,000 0.10<br />
11 Lim & Tan Securities Pte Ltd 781,000 0.08<br />
12 HSBC (Singapore) Nominees Pte Ltd 681,000 0.07<br />
13 Lim Chye Huat @ Bobby Lim Chye Huat 445,000 0.05<br />
14 Yiu Ho Yin Rosita 439,000 0.05<br />
15 Song Chai Hong 342,000 0.04<br />
16 Poh Siam Hong @ Poh Ah Hong 300,000 0.03<br />
17 Kua Phek Long 100,000 0.01<br />
18 Phee Chin Yam 100,000 0.01<br />
19 Yeo Lay Lee 100,000 0.01<br />
20 Yew Nan Yong 100,000 0.01<br />
Total 964,353,740 99.72
44<br />
<strong>UNITED</strong> <strong>FOOD</strong> <strong>HOLDINGS</strong> <strong>LIMITED</strong><br />
NOTICE OF ANNUAL GENERAL MEETING<br />
(Incorporated in Bermuda with limited liability)<br />
NOTICE IS HEREBY GIVEN that the Annual General Meeting of United Food Holdings Limited (“the Company”)<br />
will be held at Malacca Room, Level 3, Hotel Inter-Continental Singapore, 80 Middle Road, Singapore 188966<br />
on Tuesday, 29 May 2001 at 10.00 a.m. for the following purposes:<br />
AS ORDINARY BUSINESS<br />
1. To receive and adopt the Audited Accounts and Reports of the Directors and Auditors for the financial<br />
period ended 31 December 2000. (Resolution 1)<br />
2. To re-elect the following Directors pursuant to Bye-law 85 of the Bye-laws of the Company.<br />
Mr Ho Wah Onn (Resolution 2)<br />
Mr Sitoh Yih Pin (Resolution 3)<br />
Messrs Ho Wah Onn and Sitoh Yih Pin will, upon re-election as Directors of the Company, remain as<br />
members of the Audit Committee and will be considered independent for the purposes of Clause 902(4)(a)<br />
of Listing Manual of the Singapore Exchange Securities Trading Limited.<br />
3. To re-appoint Ernst & Young as the Company’s Auditors and to authorise the Directors to fix their<br />
remuneration. (Resolution 4)<br />
4. To transact any other ordinary business which may properly be transacted at an Annual General Meeting.<br />
AS SPECIAL BUSINESS<br />
To consider, and if thought fit, to pass the following resolutions as Ordinary Resolutions, with or without<br />
modifications:<br />
5. Authority to allot and issue shares up to fifty per cent (50%) of issued share capital<br />
“That pursuant to the provisions of the Companies Act 1981 of Bermuda and the rules of the Singapore<br />
Exchange Securities Trading Limited, the Directors be and are hereby empowered to allot and issue shares<br />
in the Company at any time and upon such terms and conditions and for such purposes as the Directors<br />
may, in their absolute discretion, deem fit provided that the aggregate number of shares to be issued<br />
pursuant to this resolution shall not exceed fifty per centum (50%) of the issued share capital of the<br />
Company for the time being, of which the aggregate number of shares issued other than on a pro rata basis<br />
to existing shareholders shall not exceed twenty per centum (20%) of the issued share capital of the<br />
Company for the time being and that such authority shall continue in force until the conclusion of the<br />
Company’s next Annual General Meeting.” (Resolution 5)<br />
The Ordinary Resolution 5, if passed, will empower the Directors from the date of the above meeting<br />
until the date of the next Annual General Meeting, to allot and issue shares in the Company. The<br />
number of shares which the Directors may allot and issue under this Resolution would not exceed fifty<br />
per centum (50%) of the issued share capital of the Company for the time being. For issues of shares<br />
other than on a pro rata basis to all shareholders, the aggregate number of shares to be issued shall not<br />
exceed twenty per centum (20%) of the existing issued share capital of the Company.
6. Approval of Shareholders’ Mandate for Interested Person Transactions<br />
<strong>UNITED</strong> <strong>FOOD</strong> <strong>HOLDINGS</strong> <strong>LIMITED</strong> 45<br />
NOTICE OF ANNUAL GENERAL MEETING<br />
(Incorporated in Bermuda with limited liability)<br />
a. “That approval be and is hereby given for the purposes of Chapter 9A of the Listing Manual of the<br />
Singapore Exchange Securities Trading Limited, for the Company and its subsidiaries or any of them<br />
in respect of recurrent revenue transactions falling within the types of Interested Person Transactions,<br />
particulars of which are set out on page 94 of the Company’s Prospectus dated 12 March 2001<br />
(“Prospectus”) with the Interested Persons described in the Prospectus.”<br />
b. “That such approval shall, unless revoked or varied by the Company in general meeting, continue in<br />
force until the conclusion of the next Annual General Meeting and that authority be given to the<br />
Directors to complete and do all such acts and things (including executing all such documents as may<br />
be required) as they may consider necessary, desirable or expedient to give effect to this resolution.”<br />
(Resolution 6)<br />
The Ordinary Resolution 6, if passed, will authorise the Interested Person Transactions as described<br />
in the Prospectus and recurring in the year and will empower the Directors of the Company from<br />
the date of the above meeting until the next Annual General Meeting of the Company to do all<br />
acts necessary to give effect to the resolution. This authority will, unless previously revoked or<br />
varied by the Company at a general meeting, expire at the conclusion of the next Annual General<br />
Meeting of the Company.<br />
By Order of the Board<br />
Lee Kam Wan<br />
Secretary<br />
Hong Kong<br />
4 May 2001
46<br />
<strong>UNITED</strong> <strong>FOOD</strong> <strong>HOLDINGS</strong> <strong>LIMITED</strong><br />
NOTICE OF ANNUAL GENERAL MEETING<br />
(Incorporated in Bermuda with limited liability)<br />
Notes:<br />
1. A shareholder entitled to attend and vote at the meeting is entitled to appoint a proxy to attend and<br />
vote instead of him. A proxy need not be a shareholder of the Company.<br />
2. If the appointor is a corporation, the proxy must be executed under seal or the hand of its duly<br />
authorised officer or attorney.<br />
3. If a shareholder being a depositor whose name appears in the Depository Register (as defined in Section<br />
130A of the Companies Act, Cap. 50 of Singapore) wishes to attend and vote at the meeting, then he/it<br />
should complete the Proxy Form accompanying this Annual Report in accordance with the instructions<br />
printed thereon and deposit the duly completed Proxy Form at the office of the Company’s Singapore<br />
Share Transfer Agent, Lim Associates (Pte) Ltd at 10 Collyer Quay #19-08 Ocean Building, Singapore<br />
049315, at least 48 hours before the time of the meeting.<br />
4. If a depositor wishes to appoint a proxy/proxies, then the Proxy Form accompanying this Annual Report<br />
must be completed in accordance with the instructions printed thereon and deposited at the office of<br />
the Company’s Singapore Share Transfer Agent, Lim Associates (Pte) Ltd at 10 Collyer Quay #19-08<br />
Ocean Building, Singapore 049315, at least 48 hours before the time of the meeting.
<strong>UNITED</strong> <strong>FOOD</strong> <strong>HOLDINGS</strong> <strong>LIMITED</strong> 47<br />
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48<br />
<strong>UNITED</strong> <strong>FOOD</strong> <strong>HOLDINGS</strong> <strong>LIMITED</strong><br />
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Design: Brand Communications
United Food Holdings Limited<br />
Shenquan Village, Luozhuang District, Linyi City<br />
Shandong Province, The People’s Republic of China<br />
Postal Code 276017<br />
Tel: (86) 539-8276 233 Fax: (86) 539-8276 377<br />
Room 1290, 12/F., Wing On Centre<br />
111 Connaught Road Central, Sheung Wan, Hong Kong<br />
Tel: (852) 2851 6688 Fax: (852) 2851 6788<br />
Website: www.jiangquan.com<br />
email: enquiry@jiangquan.com