UNITED FOOD HOLDINGS LIMITED

ANNUAL REPORT 2000 

UNITED FOOD HOLDINGS LIMITED

Our Core Businesses 

Corporate Information 

Financial Highlights 

Chairman’s Statement 

Review of Operations 

Corporate Structure 

Report of the Directors and Financial Report 

Shareholders’ Information 

Notice of Annual General Meeting 

United Food Holdings Limited is the holding company of Linyi Jiangquan Meat 

Products Co., Ltd., a leading producers and suppliers of processed meat 

products, fresh, chilled and frozen pork products, animal feeds and pigs of 

quality breeds in China. 

We are ISO9002-Certified and we aspire to become a leading global food 

conglomerate offering quality products to our customers. At the same time, we 

aspire to deliver premium returns to our shareholders through innovative 

management practices and stringent quality assurance standards. 

One of our competitive advantages over our competitors is that, through the 

integration of our production processes, we make efficient use of our resources 

resulting in lower overall production cost and better quality control of our products. 

Our corporate strengths and reputation lie in our four principal product categories: 

• Processed meat products 

• Fresh, chilled and frozen pork products 

• Animal feeds 

• Pigs of quality breeds 

CONTENTS 

1 

2 

3 - 4 

5 

6 - 7 

8 

9 - 41 

42 - 43 

44 - 46 

OUR CORE BUSINESSES

2 

UNITED FOOD HOLDINGS LIMITED 

CORPORATE INFORMATION 

BOARD OF DIRECTORS 

Executive: David Yip Wai Sun (Chairman) 

Wang Tingbao (Deputy Chairman) 

Wang Wenguang 

Non-Executive: Ho Wah Onn (Independent) 

Sitoh Yih Pin (Independent) 

AUDIT COMMITTEE Ho Wah Onn (Chairman) 

David Yip Wai Sun 

Sitoh Yih Pin 

SECRETARY Lee Kam Wan 

ASSISTANT SECRETARY Ira Stuart Outerbridge III 

REGISTERED OFFICE Clarendon House 

2 Church Street 

Hamilton HM 11 

Bermuda 

Tel: (441) 295 1422 

BUSINESS OFFICE Shenquan Village, Luozhuang District 

Linyi City, Shandong Province 

The People’s Republic of China 

Postal Code 276017 

Tel: (86) 539-8276 233 / Fax: (86) 539-8276 377 

HONG KONG OFFICE Room 1209, 12/F., Wing On Centre 

111 Connaught Road Central 

Sheung Wan, Hong Kong 

Tel: (852) 2851 6688 / Fax: (852) 2851 6788 

SHARE TRANSFER AGENT Lim Associates (Pte) Ltd 

10 Collyer Quay #19-08 

Ocean Building 

Singapore 049315 

Tel: (65) 536 5355 

SHARE REGISTRAR The Bank of Bermuda Limited 

Bank of Bermuda Building 

6 Front Street 

Hamilton HM 11 

Bermuda 

Tel: (441) 295 4000 

AUDITORS Ernst & Young 

Certified Public Accountants 

15/F., Hutchison House 

10 Harcourt Road, Central 

Hong Kong 

Tel: (852) 2956 1188 

AUDIT PARTNER-IN-CHARGE C T Kwok, Hong Kong

Key Financial Indicators 

UNITED FOOD HOLDINGS LIMITED 3 

FINANCIAL HIGHLIGHTS 

S$million 1996 1997 1998 1999 2000 

Turnover 51 83 138 207 324 

Profit Before Tax 5 13 25 40 66 

Net Profit Attributable to Shareholders 5 13 20 32 54 

Captial and Reserves 12 23 30 45 84 

Total Assests 26 42 52 79 101 

Net Tangible Assets Per Share (cents) 1.40 2.73 3.59 5.38 10.00 

Return on Shareholders’ Equity (%) 41.84 59.08 82.65 88.03 79.27 

Return on Total Assets (%) 18.83 32.33 47.46 49.83 65.61 

Earnings Per Share – Basic (Cents) 0.59 1.61 2.42 3.87 6.48 

Interest Cover (Times) 4 11 38 161 411 

Debt Equity Ratio 1.22 0.83 0.74 0.77 0.21 

Turnover (S$million) 

Net Profit Attributable to Shareholders (S$million)

4 


FINANCIAL HIGHLIGHTS 

Segmental Contribution (S$million) 

Contribution to Turnover (S$million)

CHAIRMAN’S STATEMENT 

Dear Shareholders, 

Financial Review 


I am pleased to present our first annual report since our listing on the mainboard of the 

Singapore Exchange Securities Trading Limited on 26 March, 2001. Our financial results are 

better than the estimates as stated in our Prospectus dated 12 March, 2001. Our net profit rose 

to RMB260.4 million, up 64% from FY1999, on a turnover of RMB1,554.2 million, an increase 

of over 53.5%. This clearly demonstrates the Group’s capabilities and growth potential. Backed 

by strong financials and operating efficiency, we are well poised to further expand in the PRC 

market. 

Future Plans 

As China strives to deepen its economic reform, the quality of livelihood of its people will 

continue to be improved. Demand for meat and processed meat products will be on the rise. 

Nutritious and easy-to-serve food products are becoming a popular trend among urban and 

rural consumers and the market potential for these products will remain promising. 

In order to achieve a larger market share, lower operating costs, maximise of profits and 

improve product quality, we plan to develop and market a variety of chilled processed meat 

products and expand our production capacity for sausages. We will also acquire abattoirs in 

China for the production of fresh, chilled and frozen pork and processed meat products. We 

also plan to import another 1,000 pigs of pure breeds from the United States and Canada to 

increase the rearing capacity of our pig farm. To maintain a forefront position, we will also 

upgrade our research and development facilities and strengthen the marketing of our products 

and brand image through effective advertising and public relations campaigns. 

Acknowledgement 

I would like to thank my fellow directors and all employees of the Group for their support, 

dedication and hardwork throughout the year. I would also like to take this opportunity to 

welcome the new shareholders of United Food — thank you for your confidence in us. 

David Yip Wai Sun 

Chairman 

18 April 2001

6 


REVIEW OF OPERATIONS


REVIEW OF OPERATIONS 

For the year under review, turnover was up 53.5% from RMB1.01 billion to RMB1.55 billion 

while attributable profit posted a growth to RMB260.4 million, a significant increase of 64% 

over that of the same period of 1999. Earnings per share also increased to RMB31 cents. 

The financial results have exceeded management estimates and are an indication of the 

Group’s growth potential, especially opportunities for vertical integration among our four 

principal activities. 

The increase in turnover is primarily due to higher sales volume following an increase in the 

number of our authorized dealers and retailers and the expansion of our sales and distribution 

network. The Group also undertook continual advertising and promotion during the year. The 

improved general economic condition in the PRC also contributed to the increase in turnover. 

The increase in profit attributable to shareholders is a result of the increase in turnover, more 

favourable prices of raw materials and the improvements in operational productivity. The 

Group has also focused on those of its core businesses and products with higher profit 

contribution. 

During the year, we successfully launched new processed meat products such as chicken 

sausages, fish sausages, beef sausages and feeds for weaned piglets to meet consumer and 

market demands. 

In addition, we continued to receive recognition for the high quality of our processed meat 

products and fresh, chilled and frozen pork products. We received the following two awards 

during the year: 

• Certificate of Quality Products award granted by the 2000 National Children’s Products 

Exhibition Organizing Committee 

• Well-known Export Brand award granted by the Animal & Plant Import and Export 

Inspection & Quarantine Bureau, PRC

8 


CORPORATE STRUCTURE 

United Food 

Holdings Limited 

(Bermuda)* 

100% 

Post-Ante 

Trading Limited 

(British Virgin 

Islands)* 

PUBLICLY LISTED ON THE 

SINGAPORE EXCHANGE SECURITIES 

TRADING LIMITED 

100% 100% 

Linyi Jiangquan 

Meat Products 

Co., Ltd. 

(PRC)* 

Globe Bright 

Limited 

(Hong Kong)* 

*Place of Incorporation / Establishment

REPORT OF THE DIRECTORS 

STATEMENT BY DIRECTORS 

REPORT OF THE AUDITORS 

AUDITED FINANCIAL STATEMENTS 

Company: 


AND FINANCIAL REPORT 

for the year ended 31 December 2000 

Balance Sheet 

Supplementary Pro Forma Consolidated 

Financial Information: 

Profit and Loss Account 

Balance Sheet 

Cash Flow Statement 

Notes to Financial Statements 

10 - 14 

15 

16 

17 

18 

19 

20 

21 - 41

10 



The directors herein present their first report and the audited financial statements of the Company for the 

period from 14 August 2000 (date of incorporation) to 31 December 2000 which include supplementary 

pro forma consolidated financial statements of the Group (legally created subsequent to 31 December 

2000) for the year ended 31 December 2000. 

Restructuring Exercise 

The Company was incorporated in the Bermuda as an exempted company with limited liability under the 

Companies Act 1981 of Bermuda on 14 August 2000. Pursuant to a restructuring exercise (the “Restructuring 

Exercise”) to rationalise the Group structure in preparation for the listing of the Company’s shares on the 

Singapore Exchange Securities Trading Limited (the “SGX-ST”), the Company became the holding company of 

the Group on 15 January 2001. Further details of the Restructuring Exercise, together with details of the 

subsidiaries acquired pursuant thereto, are set out in notes 1 and 17 to the financial statements and the 

Company’s prospectus dated 12 March 2001. 

Subsequent to the balance sheet date, on 26 March 2001, the shares of the Company were listed on the SGX-ST. 

Supplementary financial information of the Group comprising a pro forma consolidated profit and loss account, 

balance sheet and cash flow statement has also been presented in order to further apprise the Company’s 

shareholders of the Group’s profit and its state of affairs had the Group been in existence throughout the period 

presented. The information referring to the Group presented in this directors’ report has been presented on a basis 

consistent with that of the preparation of the supplementary pro forma financial information which is further 

explained in note 1 to the financial statements. 

Principal activities 

The principal activity of the Company is investment holding. Details of the principal activities of the subsidiaries 

acquired subsequent to the balance sheet date, are set out in note 1 to the financial statements. There were no 

changes in the nature of the subsidiaries’ principal activities during the year. 

Results and dividends 

The Group’s pro forma consolidated profit for the year ended 31 December 2000 and the Group’s pro forma 

consolidated state of affairs at that date are set out in the accompanying financial statements on pages 18 to 41. 

During the year, dividends of RMB85,000,000 were paid by a wholly-owned subsidiary of the Company to its 

then shareholders prior to the Restructuring Exercise as further explained and described in note 1 to the financial 

statements. 

The directors of the Company do not recommend the payment of any dividend in respect of the period. 

Fixed assets 

Details of movements in the fixed assets of the Group are set out in note 11 to the financial statements.



Subsidiaries 

Pursuant to the Restructuring Exercise on 15 January 2001, the Company acquired certain subsidiaries now 

comprising the Group. Further particulars of the Company’s subsidiaries are set out in note 1 to the financial 

statements. 

Share capital and share options 

Details of movements in the Company’s share capital since 14 August 2000 (date of incorporation), together with 

reasons therefor, are set out in note 17 to the financial statements. 

There is currently no share option scheme relating to the unissued shares of the Company. 

Pre-emptive rights 

There are no provisions for pre-emptive rights under the Company’s bye-laws or the law of Bermuda which would 

oblige the Company to offer new shares on a pro rata basis to existing shareholders. 

Purchase, sale or redemption of listed securities of the Company 

The Company’s shares were listed on the SGX-ST on 26 March 2001. Other than foregoing, neither the 

Company, its holding company, nor any of its subsidiaries purchased, redeemed or sold any of the Company’s 

listed securities during the period up to the date of this report. 

Reserves 

Details of movements in the pro forma reserves of the Group are set out in note 18 to the financial statements. 

Distribution reserves 

At 31 December 2000, the Company had no reserve available for distribution. 

Major customers and suppliers 

During the year, the five largest customers of the Group accounted for less than 5% of the Group’s pro forma 

consolidated turnover. In addition, the five largest suppliers of the Group accounted for less than 5% of the 

Group’s pro forma consolidated purchases for the year. 

Directors 

The directors of the Company during the period and up to the date of this report are as follows: 

Executive directors: 

Mr. David Yip Wai Sun (appointed on 30 August 2000) 

Mr. Wang Tingbao (appointed on 30 August 2000) 

Mr. Wang Wenguang (appointed on 30 August 2000) 

Independent non-executive directors: 

Mr. Ho Wah Onn (appointed on 15 December 2000) 

Mr. Sitoh Yih Pin (appointed on 15 December 2000) 

11

12 



Directors’ interest in share capital 

According to the Register of Directors’ Shareholdings, the only directors who held office at the end of the financial 

year and who had an interest in shares or debentures of the Company or its related corporations either at their 

date of appointment, or on 31 December 2000, or on 15 January 2001 (date of Restructuring Exercise), or on 

18 April, 2001 (date of this report), were as follows: 

At date of appointment and 31 December 2000 

Ordinary shares of HK$0.10 each of the Company (before consolidation and sub-division) 

Name of director Direct Indirect 

interest interest 

Mr. David Yip Wai Sun 210,000 700,000 

Mr. Wang Tingbao 60,000 700,000 

Mr. Wang Wenguang 30,000 – 

At 15 January 2001 and 21 January 2001 

Ordinary shares of HK$0.50 each of the Company (after consolidation and the Restructuring Exercise but before 

sub-division and listing of the Company shares in SGX-ST) 

Name of director Direct Indirect 


Mr. David Yip Wai Sun 87,822,392 292,741,310 

Mr. Wang Tingbao 25,092,112 292,741,310 

Mr. Wang Wenguang 12,546,056 – 

At 18 April, 2001 

Ordinary shares of HK$0.25 each of the Company (after consolidation, the Restructuring Exercise, sub-division 

and listing of the Company shares in SGX-ST) 

Name of director Personal Corporate 


Mr. David Yip Wai Sun 175,644,784 585,482,620 

Mr. Wang Tingbao 50,184,224 585,482,620 

Mr. Wang Wenguang 25,092,112 – 

Other than in connection with the Restructuring Exercise, at no time during the period and up to 15 January 2001 

was the Company, its holding company or any of its subsidiaries a party to any arrangement to enable the 

directors to acquire benefits by means of the acquisition of shares in, or debentures of, the Company or any other 

body corporate.



Directors’ service contracts 

The Company entered into separate service agreements (“Service Agreements”) with Mr. David Yip Wai Sun, 

Mr. Wang Tingbao and Mr. Wang Wenguang for an initial period of three years commencing from 

1 February 2001. The Service Agreements shall be renewable automatically for successive terms of one year each 

unless terminated by not less than three months’ notice in writing served by either party following the expiration 

of the end of the initial term or at any time thereafter. 

Apart from the foregoing, no director proposed for re-election at the forthcoming annual general meeting has a 

service contract with the Company which is not determinable by the Company within one year without payment 

other than statutory compensation. 

Directors’ interests in contracts 

Except for the service contracts detailed above and the transactions disclosed in note 4 to the financial statements, 

no director received or became entitled to receive a benefit by reason of a contract made by the Company or a 

related corporation with the director or with a firm of which he is a member or with a company in which he has 

a substantial financial interest. 

Corporate governance 

1. AUDIT COMMITTEE 

The Audit Committee was established on 15 January 2001. The Audit Committee comprises three members, 

two of whom are non-executive directors and are independent of management. The members of the Audit 

Committee at the date of this report are: 

Non-executive directors: 

Mr. Ho Wah Onn (Chairman) 

Mr. Sitoh Yih Pin 

Executive director: 

Mr. David Yip Wai Sun 

The Audit Committee meets periodically with management and the auditors of the Company to discuss and 

review the following: 

(a) the financial and operating results and accounting policies of the Group; 

(b) the financial statements of the Company and of the Group before their submission to the full board 

of directors and the external auditors’ report on those financial statements; 

(c) the interim and annual announcement of results of the Group before their submission to the full board 

of directors for approval; 

(d) the assistance given by the management of the Group to the auditors; 

(e) the external audit plans and the results of the external auditors’ examination and evaluation of the 

Group’s internal accounting control system; 

(f) the re-appointment of the external auditors; 

(g) the Group’s transactions with related parties; and 

(h) generally undertaken such other functions and duties as may be required by statute or the Listing Manual 

of SGX-ST, and by such amendments made thereto from time to time.

14 



Corporate governance (continued) 

1. AUDIT COMMITTEE (continued) 

In performing its functions, the Committee: 

(a) has had full access to and cooperation by the management and has full discretion to invite any director 

and executive officer to attend its meetings; and 

(b) has been given reasonable resources to enable it to discharge its functions properly. 

The Company adopted the Best Practices Guide issued by the SGX-ST in relation to the roles and 

responsibilities of the Audit Committee. 

The Audit Committee has recommended to the board of directors the nomination of Ernst & Young, Hong 

Kong for re-appointment as auditors of the Company at the forthcoming annual general meeting. 

2. SECURITIES TRANSACTIONS 

The Company has issued a policy on dealing in the Company’s shares to employees of the Company 

pursuant to the Best Practices Guide issued by the SGX-ST. The policy sets out the implications of insider 

dealing in the Company’s shares, and includes guidance to employees on dealing in the Company’s shares, 

which is modelled on the Best Practice Guide with some modifications. 

Auditors 

The auditors, Ernst & Young, Certified Public Accountants, have expressed their willingness to accept reappointment. 

Other information required by the SGX-ST 

No material contracts to which the Company, its holding company, or any of its subsidiaries are a party and which 

involved directors’ interests subsisted at the end of the financial year or have been entered into since the end of 

the previous financial year. 

On behalf of the board of directors 

David Yip Wai Sun Wang Tingbao 

Chairman Director 

Hong Kong 

18 April 2001

In the opinion of the directors:- 


(a) the Company’s balance sheet and profit and loss account, the Group’s pro forma consolidated balance 

sheet, profit and loss account and cash flow statement together with the notes thereto, as set out 

pages 17 to 41 are drawn up so as to give a true and fair view of the state of affairs of the Company 

as at 31 December 2000 and of the pro forma state of affairs of the Group; and its results of the 

Group, and the cash flow of the Group, for the financial year ended on that date as presented on the 

basis further explained in note 1 to the financial statements; and 

(b) at the date of this statement there are reasonable grounds to believe that the Company will be able 

to pay its debts as and when they fall due. 

On behalf of the board of directors, 

David Yip Wai Sun Wang Tingbao 

Chairman Director 

Hong Kong 

18 April 2001 

STATEMENT BY DIRECTORS

16 


REPORT OF THE AUDITORS 

To the members 

United Food Holdings Limited 

(Incorporated in Bermuda with limited liability) 

We have audited the financial statements on pages 17 to 41 which have been prepared in accordance with 

International Accounting Standards issued by the International Accounting Standards Committee. These 

financial statements are the responsibility of the Company’s directors whose opinion thereon is set out on 

page 15. Our responsibility is to express an opinion on these financial statements based on our audit. 

We conducted our audit in accordance with International Standards on Auditing. Those standards require 

that we plan and perform the audit to obtain reasonable assurance about whether the financial statements 

are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the 

amounts and disclosures in the financial statements. An audit also includes assessing the accounting 

principles used and significant estimates made by the Company’s directors, as well as evaluating the overall 

financial statement presentation. We believe that our audit provides a reasonable basis for our opinion. 

In our opinion the financial statements give a true and fair view of the financial position of the Company 

as at 31 December 2000 and of its results for the period from 14 August 2000 (date of incorporation) to 

31 December 2000 in accordance with International Accounting Standards. 

Ernst & Young 

Certified Public Accountants 

Hong Kong 

18 April 2001

31 December 2000 

CURRENT ASSET 

Cash on hand 


Notes RMB$’000 

(Note 1) 

CAPITAL 

Share capital 1, 17 – 

BALANCE SHEET

18 


SUPPLEMENTARY PRO FORMA CONSOLIDATED PROFIT AND LOSS ACCOUNT 

Year ended 31 December 2000 

Notes 2000 

1999 

RMB’000 

RMB’000 

(note 1) 

(note 1) 

TURNOVER 5 1,554,177 

1,012,822 

Cost of sales ( ( 1,149,433 ) 

( 755,940 ) 

Gross profit 404,744 

256,882 

Other revenue 2,168 

1,650 

Selling and distribution costs ( ( 72,596 ) 

( 53,634 ) 

Administrative expenses ( ( 11,397 ) 

( 9,040 ) 

Other operating expenses ( ( 3,831 ) 

( 590 ) 

PROFIT FROM OPERATING ACTIVITIES 6 319,088 

195,268 

Finance costs 7 ( ( 775 ) 

( 1,202 ) 

PROFIT BEFORE TAX 318,313 

194,066 

Tax 8 ( 57,934 ) 

( 35,311 ) 

NET PROFIT ATTRIBUTABLE TO SHAREHOLDERS 260,379 

158,755 

EARNINGS PER SHARE 

- Basic 10 RMB0.31 

RMB0.31 RMB0.19 

Other than the net profit for the year, the Group had no recognised gains or losses. Accordingly, a supplementary 

pro forma consolidated statement of recognised gains and losses is not presented in the financial statements.



SUPPLEMENTARY PRO FORMA CONSOLIDATED BALANCE SHEET 

Notes 2000 

1999 

RMB’000 

RMB’000 

NON-CURRENT ASSETS 

Fixed assets 11 69,486 

89,973 

CURRENT ASSETS 

Inventories 12 136,442 

165,735 

Trade debtors 13 140,328 

95,513 

Prepayments, deposits and other debtors 14 3,448 

2,189 

Cash and bank balances 132,548 

41,850 

412,766 

305,287 

CURRENT LIABILITIES 

Trade creditors 17,172 

18,253 

Other creditors, deposits received and accruals 15 52,070 

46,354 

Loans from a shareholder 16 – 

46,800 

Dividend payable – 

50,000 

Tax payable 13,893 

10,115 

83,135 

171,522 

NET CURRENT ASSETS 329,631 

133,765 

399,117 

223,738 

CAPITAL AND RESERVES 

Share capital 17 223,738 

223,738 

Reserves 18 175,379 

– 

399,117 

223,738

20 


SUPPLEMENTARY PRO FORMA CONSOLIDATED CASH FLOW STATEMENT 


2000 

1999 

RMB’000 

RMB’000 

(note 1) 

(note 1) 

CASH FLOWS FROM OPERATING ACTIVITIES 

Profit before tax 

Adjustments for: 

318,313 

194,066 

Depreciation 21,534 

21,316 

Provision for doubtful debts 3,341 

2,823 

Bad debts written off 357 

– 

Interest expense 775 

1,202 

Interest income ( ( 1,011 ) 

( 447 ) 

Operating profit before working capital changes 343,309 

218,960 

Work capital adjustments: 

Decrease/(increase) in inventories 29,293 

( 74,310 ) 

Increase in trade debtors ( ( 48,513 ) 

( 58,739 ) 

Increase in prepayments, deposits and other debtors ( ( 1,259 ) 

( 268 ) 

Decrease in trade creditors ( ( 1,081 ) 

( 1,806 ) 

Increase in other creditors, deposits received and accruals 5,716 

7,793 

327,465 

91,630 

Interest received 1,011 

447 

Interest paid ( ( 775 ) 

( 1,202 ) 

Tax paid ( ( 54,156 ) 

( 31,049 ) 

Net cash generated from operating activities 273,545 

59,826 

CASH FLOW FROM INVESTING ACTIVITIES 

Purchases of fixed assets ( ( 1,047 ) 

( 4,444 ) 

Net cash used in investing activities ( ( 1,047 ) 

( 4,444 ) 

CASH FLOWS FROM FINANCING ACTIVITIES 

Dividend paid ( ( 135,000 ) 

( 75,000 ) 

Advance from/(repayment to) a shareholder ( ( 46,800 ) 

40,057 

Net cash used in financing activities ( ( 181,800 ) 

( 34,943 ) 

NET INCREASE IN CASH AND CASH EQUIVALENTS 90,698 

20,439 

Cash and cash equivalents at beginning of year 41,850 

21,411 

CASH AND CASH EQUIVALENTS AT END OF YEAR 132,548 

41,850 

ANALYSIS OF BALANCES OF CASH AND CASH 

EQUIVALENTS 

Cash and bank balances 132,548 

41,850


1. RESTRUCTURING EXERCISE AND BASIS OF PRESENTATION 


NOTES TO FINANCIAL STATEMENTS 

THE COMPANY 

The Company was incorporated in Bermuda as an exempted company with limited liability under the 

Companies Act 1981 of Bermuda on 14 August 2000. On incorporation, the Company had an authorised 

share capital of HK$100,000 divided into 1,000,000 ordinary shares of HK$0.10 each. On 30 August 2000, 

1,000,000 ordinary shares of HK$0.10 each were issued nil paid. Apart from the foregoing, no other 

transactions were carried out by the Company during the period from 14 August 2000 (date of 

incorporation) to 31 December 2000. Accordingly, the Company has not recorded any revenue, profits, 

losses or cash flows for the period. 

Pursuant to a group restructuring exercise implemented subsequent to the balance sheet date as further 

described below, the share capital of the Company was increased to its present designation. Commencing 

26 March 2001, the Company’s shares have been listed on the Singapore Exchange Securities Trading 

Limited (“SGX-ST”). 

Comparative amounts have not been presented for the Company’s balance sheet because the Company 

did not exist at 31 December 1999. 

RESTRUCTURING EXERCISE 

Pursuant to a restructuring exercise (the “Restructuring Exercise”) to rationalise the structure of the Group 

in preparation for the listing of the Company’s shares on the SGX-ST in March 2001, the Company became 

the holding company of the subsidiaries now comprising the Group on 15 January 2001. This was 

accomplished by acquiring the entire issued share capital of Post-Ante Trading Limited (“Post-Ante”), 

which is, at the date of this report, the intermediate holding company of the other subsidiaries as set out 

below, for a consideration of RMB223,738,000. The consideration was based on the consolidated net 

tangible asset value of Post-Ante and its subsidiaries as at 31 December 1999. The purchase consideration 

was satisfied by (a) the allotment and issue of 418,001,870 ordinary shares of HK$0.50 each in the 

Company, credited as fully paid and (b) the credited as fully paid of 200,000 ordinary shares of HK$0.50 

each in the Company (which were consolidated from the above-mentioned 1,000,000 ordinary shares of 

HK$0.10 each allotted and issued nil paid on 30 August 2000) to the former shareholders of Post-Ante. 

Further details of the Restructuring Exercise are set out in note 17 to the financial statements and the 

Company’s prospectus dated 12 March 2001. 

Particulars of the subsidiaries, which were acquired by the Company pursuant to the Restructuring Exercise, 

are set out below: 

Paid-up Percentage of 

Place of share/ equity interest 

incorporation/ registered attributable Principal 

Name establishment capital to the Company activities 

Direct Indirect 

Post-Ante Trading British Virgin US$200 100% – Investment 

Limited Islands holding

22 




1. RESTRUCTURING EXERCISE AND BASIS OF PRESENTATION (continued) 

Paid-up Percentage of 

Place of share/ equity interest 

incorporation/ registered attributable Principal 

Name establishment capital to the Company activities 

Direct Indirect 

Linyi Jiangquan The People’s US$4,000,000 – 100% Production 

Meat Products Republic and sale of 

Co., Ltd. (“Jiang Quan”) of China processed meat 

(the “PRC”) products, 

production and 

sale of fresh, 

chilled and 

frozen pork 

products, pig 

rearing and 

animal feed 

production 

Globe Bright Limited Hong Kong HK$100 – 100% Dormant 

BASIS OF PRESENTATION 

The Restructuring Exercise involved companies under common control. Because the Restructuring Exercise 

took place on 15 January 2001, the Company together with its subsidiaries should only be regarded and 

accounted for as a continuing group in the preparation of the Group’s financial statements commencing the 

year ending 31 December 2001. Nevertheless, for the benefit of shareholders, supplementary pro forma 

consolidated financial statements for the current year and the related notes thereto have also been 

presented in these financial statements on the basis that the Company is treated as the holding company 

of its subsidiaries for the financial years presented rather than from the subsequent date of acquisition of 

the subsidiaries on 15 January 2001. The pro forma consolidated results and cash flows of the Group for 

the years ended 31 December 1999 and 2000 include the results and cash flow of the Company and its 

subsidiaries with effect from 1 January 1999 or since their respective dates of incorporation or 

establishment, where this is a shorter period. The pro forma consolidated balance sheets as at 31 December 

1999 and 2000 have been prepared on the basis that the current Group structure was in place at those 

dates. All significant transactions and balances among the companies comprising the Group have been 

eliminated on pro forma consolidation. Such pro forma financial information will form the basis for the 

comparative amounts presented in the preparation of the Group’s consolidated financial statements for the 

year ending 31 December 2001. 

Although the Restructuring Exercise had not been completed and, accordingly, the Group did not legally 

exist until January 2001, in the opinion of the directors, the presentation of such supplementary pro forma 

consolidated financial statements prepared on the aforesaid basis is necessary to apprise the Company’s 

shareholders of the Group’s profit and its state of affairs as a whole.


2. CORPORATE INFORMATION 


The registered office of the Company is located at Clarendon House, 2 Church Street, Hamilton HM 11, 

Bermuda. 

The principal activity of the Company is investment holding. The principal activities of the Company’s 

subsidiaries acquired pursuant to the Group Restructurings are set out in note 1 above. There were no 

changes in the nature of the subsidiaries’ principal activities during the year. 

The operations of the Group were mainly carried out in the PRC through a wholly-owned subsidiary which 

employed 1,663 and 1,729 employees as at 31 December 1999 and 2000, respectively. 

Prior to the Restructuring Exercise, the Company was a subsidiary of Chinese Glory Investments Limited, a 

company incorporated in the British Virgin Islands and considered by the directors to be the Company’s 

ultimate holding company as at the balance sheet date. 

3. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES 


BASIS OF PREPARATION 

The financial statements have been prepared under historical cost convention and in accordance with 

International Accounting Standards, subject to the pro forma basis of presentation as set out in note 1 above. 

The Group’s operations are principally conducted in the PRC. Accordingly, the supplementary pro forma 

consolidated financial statements have been prepared in Renminbi (“RMB”), being the functional currency 

of all principal companies in the Group. 

REVENUE RECOGNITION 

Revenue is recognised when it is probable that the economic benefits will flow to the Group and when the 

revenue can be measured reliably, on the following bases: 

(a) the sale of goods, when the significant risks and rewards of ownership have been transferred to the 

buyer, provided that the Group maintains neither managerial involvement to the degree usually 

associated with ownership, nor effective control over the goods sold; and 

(b) interest income, on a time proportion basis, taking into account the principal outstanding and the 

effective interest rate applicable. 

OPERATING LEASES 

Leases where substantially all the rewards and risks of ownership of assets remain with the lessor are 

accounted for as operating leases. Rentals applicable to such operating leases are charged to the profit and 

loss account on the straight-line basis over the lease terms.

24 




3. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued) 

FIXED ASSETS AND DEPRECIATION 

Fixed assets are stated at cost less accumulated depreciation. The cost of an asset comprises its purchase 

price and any directly attributable costs of bringing the asset to its working condition and location for its 

intended use. Expenditure incurred after fixed assets have been put into operation, such as repairs and 

maintenance, is normally charged to the profit and loss account in the period in which it is incurred. In 

situations where it can be clearly demonstrated that the expenditure has resulted in an increase in the future 

economic benefits expected to be obtained from the use of the fixed asset, the expenditure is capitalised 

as an additional cost of that asset. 

Depreciation is calculated on the straight-line basis to write off the cost of each asset over the following 

estimated useful lives: 

Leasehold buildings 10 years or over the lease terms, 

whichever is shorter 

Leasehold improvements 10 years or over the lease terms, 

whichever is shorter 

Plant and machinery 5 years 

Furniture, fixtures and office equipment 5 years 

Motor vehicles 5 years 

The gain or loss on disposal or retirement of a fixed asset recognised in the profit and loss account is the 

difference between the net sales proceeds and the carrying amount of the relevant asset. 

SUBSIDIARIES 

A subsidiary is a company in which the Company, directly or indirectly, controls more than half of its voting 

power or paid-up capital or controls the composition of its board of directors. 

Interests in subsidiaries are stated at cost unless, in the opinion of the directors, there have been permanent 

impairment in values, when they are written down to values determined by the directors. 

INVENTORIES 

Inventories are stated at the lower of cost and net realisable value after making due allowance for obsolete 

or slow-moving items. Cost is determined on the first-in, first-out basis and, in the case of work in progress 

and finished goods, comprises direct materials, direct labour and an appropriate proportion of 

manufacturing overheads. Net realisable value is based on estimated selling prices less any estimated costs 

expected to be incurred to completion and disposal. 

PROVISIONS 

Provisions are recognised when the Group has a present obligation (legal or constructive) as a result of a 

past event, it is probable that an outflow of resources embodying economic benefits will be required to 

settle the obligation and a reliable estimate can be made of the amount of the obligation.



BORROWING COSTS 

Borrowing costs are expensed in the period in which they are incurred. 



TAX 

PRC corporate income tax is provided at rates applicable to an enterprise in the PRC on the income for 

financial reporting purposes, adjusted for income and expense items which are not assessable or deductible 

for income tax purposes. 

Deferred tax is provided, using the liability method, on all temporary differences at the balance sheet date 

between the tax bases of assets and liabilities and their carrying amounts for financial reporting purposes. 

Deferred tax liabilities are recognised for all taxable temporary differences. Deferred tax assets are 

recognised for all deductible temporary differences, carry-forward of unused tax assets and unused tax 

losses, to the extent that it is probable that taxable profit will be available against which the deductible 

temporary differences, carry-forward of unused tax assets and unused tax losses can be utilised. 

Deferred tax assets and liabilities are measured at the tax rates that are expected to apply to the period 

when the asset is realised or the liability is settled, based on tax rates that have been enacted at the balance 

sheet date or subsequently enacted. 

RETIREMENT BENEFITS 

No pension scheme or retirement plan has been sponsored or operated by the Company or its subsidiaries 

for its permanent employees in Hong Kong and Singapore. 

Pursuant to the relevant regulations of the PRC government, the subsidiary operating in the PRC mainland 

has participated in a local municipal government retirement benefit scheme (the “Scheme”), whereby the 

PRC subsidiary is required to contribute a certain percentage of the basic salaries of its employees to the 

Scheme to fund their retirement benefits. The local municipal government undertakes to assume the 

retirement benefits obligations of all existing and future retired employees of the PRC subsidiary. The only 

obligation of the Group with respect to the Scheme is to pay the ongoing required contributions under the 

Scheme mentioned above. Contributions under the Scheme are charged to the profit and loss account as 

incurred. There are no provisions under the Scheme whereby forfeited contributions may be used to reduce 

future contributions.

26 





FOREIGN CURRENCIES 

The Company maintains its accounting records in RMB and transactions arising in foreign currencies, 

including Singapore dollars, during the year are translated into RMB at the applicable rates of exchange 

ruling at the transaction dates. Monetary assets and liabilities denominated in foreign currencies at the 

balance sheet date are translated at the applicable rates of exchange ruling at that date. Exchange 

differences are dealt with in the profit and loss account. 

On pro forma consolidation, the operating results of non-PRC companies in the Group are translated into 

RMB at the applicable rate of exchange ruling at the dates of the transactions and the assets and liabilities 

of non-PRC companies in the Group are translated into RMB at the applicable rates of exchange ruling at 

the balance sheet dates. The resulting translation differences, if any, are included in the exchange 

fluctuation reserve. 

RESEARCH AND DEVELOPMENT COSTS 

All research costs are charged to the profit and loss account as incurred. 

Expenditure incurred on projects to develop new products is capitalised and deferred only when the projects 

are clearly defined; the expenditure is separately identifiable and can be measured reliably; there is 

reasonable certainty that the projects are technically feasible; and the products have commercial value. 

Product development expenditure which does not meet these criteria is expensed when incurred. 

Deferred development costs are amortised using the straight-line basis over the commercial lives of the 

underlying products of not exceeding five years, commencing from the date when the products are put into 

commercial production. 

During the year ended 31 December 2000, the research and development costs incurred were not 

significant to the Group and were charged to the profit and loss account. 

RELATED PARTIES 

Parties are considered to be related if one party has the ability, directly or indirectly, to control the other 

party, or exercise significant influence over the other party in making financial and operating decisions. 

Parties are also considered to be related if they are subject to common control or common significant 

influence. Related parties may be individuals or corporate entities. 

CASH AND CASH EQUIVALENTS 

Cash on hand and in banks is carried at cost. 

Cash and cash equivalents are defined as cash on hand and in banks, demand deposits and short-term, 

highly liquid investments which are readily convertible into known amounts of cash and subject to 

insignificant risk of changes in value. 

For the purpose of the supplementary pro forma consolidated cash flow statement, cash and cash 

equivalents consist of cash on hand and in banks.


4. RELATED PARTY TRANSACTIONS 

(a) During the year, the Group had the following significant related party transactions: 



Notes 2000 

1999 

RMB’000 

RMB’000 

Catering and accommodation expenses 

paid to a related company (i) 693 

– 

Sales of finished goods to a related 

company (ii) 279 

49 

Interest expense paid to a shareholder (iii) 775 

1,202 

Notes: 

(i) The directors consider that the catering and accommodation expenses paid to Jiang Quan 

Hotel, a related company owned by a nephew of Mr. Wang Tingbao, a shareholder and 

director of the Company, were made according to the prices and conditions similar to those 

offered to other customers of Jiang Quan Hotel. 

(ii) The directors consider that the sales of finished goods to Jiang Quan Hotel were made 

according to the prices and conditions similar to those offered to other customers of the 

Group. 

(iii) The interest expense was paid to Mr. David Yip Wai Sun, a shareholder and director of the 

Company, in respect of the loans advanced to the Group at interest rate of approximately 

5.7%. The loans from a shareholder had been fully repaid by the Group during the year. 

(b) During the year ended 31 December 2000, Mr. David Yip Wai Sun, a director of the Company, 

advanced loans to the Group and the terms of which are set out in note 16 to the financial statements. 

The amount involved were fully repaid during the year. 

In the opinion of the directors, the above transactions were incurred in the ordinary course of business of 

the Group. 

The Company’s holding company was owned by the directors of the Company as to 70% by Mr. David Yip 

Wai Sun, 20% by Mr. Wang Tingbao and 10% by Mr. Wang Wenguang. Particulars of the Company’s 

ultimate holding company are set out in note 2 to the financial statements. Other than the foregoing and 

the subsidiaries of the Company, particulars of which are set out in note 1 to the financial statements, there 

were no other principal related party relations where control over financial and operating policies of the 

subject entity existed as at the balance sheet date.

28 




5. TURNOVER AND REVENUE 

Turnover represents the net invoiced value of goods sold, after allowance for returns and trade discounts, 

and after elimination of all significant intra-Group transactions. 

An analysis of the Group’s turnover and revenue is as follows: 

2000 

1999 

RMB’000 

RMB’000 

Turnover – sales of goods 1,554,177 

1,012,822 

Interest income 1,011 

447 

Others 1,157 

1,203 

Revenue 1,556,345 

1,014,472 

6. PROFIT FROM OPERATING ACTIVITIES 

The Group’s profit from operating activities is arrived at after charging: 

2000 

1999 

RMB’000 

RMB’000 

Directors’ remuneration: 

Fees – 

– 

Other emoluments 720 

720 

Depreciation 21,534 

21,316 

Operating lease rentals on land and buildings 1,567 

1,333 

Staff costs (excluding directors’ remuneration) 42,350 

21,750 

Less: Retirement scheme contributions ( ( 2,053 ) 

( 1,399 ) 

Amount included in research and development costs ( ( 1,085 ) 

( 704 ) 

39,212 

19,647 

Retirement scheme contributions 2,053 

1,399 

Research and development costs 2,077 

1,982 

Auditors’ remuneration 1,712 

1,100 

Provision for doubtful debts 3,341 

2,823 

Bad debts written off 357 

–


7. FINANCE COSTS 

8. TAX 


2000 

1999 

RMB’000 

RMB’000 

Interest expenses on loans 

from a shareholder 775 

1,202 

The tax charge represents PRC income tax provision for the year. 


In accordance with various approval documents issued by the State Tax Bureau and the Local Tax Bureau 

of the PRC, Jiang Quan was exempted from the state and local corporate income tax of the PRC for the 

first two profitable financial years of operation starting from 1996 and thereafter is entitled to a 50% relief 

from the state corporate income tax of the PRC for the following three financial years. Accordingly, Jiang 

Quan is subject to the reduced tax rate of 18% for the three financial years from 1 January 1998 to 31 

December 2000. Upon expiry of the tax relief period, the usual PRC corporate income tax rate of 33%, 

comprising state corporate income tax rate of 30% and local corporate income tax rate of 3%, is applicable 

to Jiang Quan. 

No deferred tax has been provided as the Group did not have any significant timing differences which gave 

rise to a deferred tax asset or liability at the balance sheet date. 

A reconciliation of the expected tax expense with the actual tax expense is presented below: 

2000 

1999 

RMB’000 

RMB’000 

Profit before tax 318,313 

194,066 

Tax at the applicable tax rate of 33% 105,216 

64,042 

Non-deductible expenses 1,785 

1,293 

Tax exemption of Jiang Quan ( ( 49,067 ) 

( 30,024 ) 

Actual PRC corporate income tax 57,934 

35,311

30 




9. DIVIDENDS 

No dividend has been paid or declared by the Company since the date of its incorporation. The dividends 

paid or declared by a subsidiary of the Company during the year ended 31 December 2000 to its then 

shareholders prior to the Restructuring Exercise as set out in note 1 to the financial statements amounted 

to RMB85,000,000 (1999: RMB85,000,000). 

10. EARNINGS PER SHARE 

The calculation of pro forma basic earnings per share is based on the pro forma consolidated net profit 

attributable to shareholders for the year of RMB260,379,000 (1999: RMB158,755,000) and the pro forma 

weighted average of 836,403,740 ordinary shares of HK$0.25 each deemed to be in issue throughout the 

year as set out in further detail in note 17. 

For comparative purposes, the number of ordinary shares for the year ended 31 December 1999 was taken 

as 836,403,740 ordinary shares of HK$0.25 each, which is also the basis used in the pro forma financial 

statements set out in the Company’s prospectus dated 12 March 2001. 

There were no potential dilutive ordinary shares in existence for the two years ended 31 December 2000 

and accordingly, no pro forma diluted earnings per share has been presented.


11. FIXED ASSETS 

Furniture, 

fixtures 

Leasehold Leasehold Plant and and office Motor 

buildings improvements machinery equipment vehicles Total 

2000 1999 2000 1999 2000 1999 2000 1999 2000 1999 2000 1999 

RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 

Cost: 

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 

Additions – 1,039 – 471 1,047 2,212 – – – 722 1,047 4,444 

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 

Accumulated depreciation: 

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 

Provided during the year 9,031 9,085 1,667 1,703 9,966 9,688 184 187 686 653 21,534 21,316 



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 

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 

The Group’s leasehold buildings are situated in PRC and held under medium term leases.

32 




12. INVENTORIES 

Group 

2000 

1999 

RMB’000 RMB’000 RMB’000 

Raw materials 57,100 

79,887 

Work in progress 7,713 

10,167 

Finished goods 71,629 

75,681 

136,442 

165,735 

No inventories included in the above were carried at net realisable value as at 31 December 2000 (1999: 

Nil). 

13. TRADE DEBTORS 

Group 

2000 

1999 

RMB’000 RMB’000 RMB’000 

Trade debtors 150,169 

102,013 

Less: Provision for doubtful debts ( ( 9,841 ) 

( 6,500 ) 

The movements in provision for doubtful debts are set out below: 

140,328 

95,513 

Group 

2000 

1999 

RMB’000 RMB’000 RMB’000 

At 1 January 6,500 

3,677 

Provided during the year 3,341 

2,823 

At 31 December 9,841 

6,500


14. PREPAYMENTS, DEPOSITS AND OTHER DEBTORS 


Group 

2000 

1999 

RMB’000 

RMB’000 

Prepayments and other debtors 2,871 

1,023 

Deposits 577 

1,166 

15. OTHER CREDITORS, DEPOSITS RECEIVED AND ACCRUALS 

3,448 

2,189 

Group 

2000 

1999 

RMB’000 

RMB’000 

Other creditors 13,615 

7,673 

Deposits received 860 

939 

Accruals 37,595 

37,742 

16. LOANS FROM A SHAREHOLDER 


52,070 

46,354 

The amounts were unsecured, bore interest at approximately 5.7% per annum and were fully repaid during 

the year.

34 




17. SHARE CAPITAL 

The following changes in the Company’s authorised and issued share capital took place during the period 

from 14 August 2000 (date of incorporation) to the date of this report: 

(a) On incorporation, the Company had an authorised share capital of HK$100,000 divided into 

1,000,000 shares of HK$0.10 each. 

(b) On 30 August 2000, 1,000,000 ordinary shares of HK$0.10 each were issued at par and nil paid. 

(c) On 15 January 2001, the authorised share capital of the Company was increased from HK$100,000 

to HK$500,000,000 by the creation of an additional 999,800,000 ordinary shares of HK$0.50 each. 

(d) On 15 January 2001, every five ordinary shares of HK$0.10 each in the authorised and issued share 

capital of the Company were consolidated into one ordinary share of HK$0.50 each. 

(e) On 19 January 2001, pursuant to the Restructuring Exercise, an aggregate of 418,001,870 ordinary 

shares of HK$0.50 each in the Company were issued and credited as fully paid; and the 200,000 

ordinary shares of HK$0.50 each then outstanding in the Company (which were consolidated from 

the 1,000,000 ordinary shares of HK$0.10 each, allotted and issued nil paid on 30 August 2000, as 

set out in (b) above) were credited as fully paid, in consideration of and in exchange for the acquisition 

by the Company for the entire issued share capital of Post-Ante. 

(f) On 22 February 2001, the Company’s authorised and issued shares of HK$0.50 each were sub-divided 

into two ordinary shares of HK$0.25 each. 

(g) On 26 March 2001, 130,550,000 shares of HK$0.25 each were issued to the public at S$0.315 

each for a total cash consideration, before issue expenses, of S$41,123,250 (approximately 

RMB196,240,000).


17. SHARE CAPITAL (continued) 



The following is a summary of the above movements in the issued share capital of the Company: 

Number of Number of Number of 

ordinary ordinary ordinary 

shares of shares of shares of 

Notes HK$0.10 each HK$0.50 each HK$0.25 each Par value 

RMB$’000 

Issue and allotment of ordinary shares 

of HK$0.10 each in the Company 

nil paid on 30 August 2000 (b) 1,000,000 – – – 

Consolidation of every five ordinary shares 

into one ordinary share (d) ( 1,000,000 ) 200,000 – – 

Issued and allotment of ordinary shares of 

HK$0.50 each in the Company, 

credited as fully paid, upon completion 

of the Restructuring Exercises (e) – 418,001,870 – 223,631 

Credited as fully paid the 1,000,000 ordinary 

shares of HK$0.10 each that were issued 

nil paid on 30 August 2000 (e) – – – 107 

Subdivision of every one ordinary share into 

two ordinary shares 

Pro forma share capital as at 31 December 

(f) – ( 418,201,870 ) 836,403,740 – 

1999 and 2000 (g) – – 836,403,740 223,738 

New issue on public listing – – 130,550,000 34,922 

– – 966,953,740 258,660

36 




18. RESERVES 

Group 

Retained Statutory Capital 

profits reserve reserve Total 

RMB’000 RMB’000 RMB’000 RMB’000 

Balance at 1 January 1999 – 17,000 ( 90,755 ) ( 73,755 ) 

Net profit for the year 158,755 – – 158,755 

Dividends ( 85,000 ) – – ( 85,000 ) 

Transfer to capital reserve 

Balance at 31 December 1999 and 

( 73,755 ) – 73,755 – 

1 January 2000 – 17,000 ( 17,000 ) – 

Net profit for the year 260,379 – – 260,379 

Dividends ( 85,000 ) – – ( 85,000 ) 

Transfer to capital reserve ( 17,000 ) – 17,000 – 

Balance at 31 December 2000 158,379 17,000 – 175,379 

Notes: 

STATUTORY RESERVE 

In accordance with the relevant PRC regulations, Jiang Quan, being a wholly foreign owned enterprise 

established in the PRC, is required to appropriate not less than 10% of its profit after tax to the 

statutory reserve, until the balance of the fund reaches 50% of the registered capital. Subject to certain 

restrictions as set out in the relevant PRC regulations, the statutory reserve may be used to offset against 

the accumulated losses, if any, of Jiang Quan. As at 31 December 1998, the statutory reserve of Jiang 

Quan reached 50% of its registered capital. Accordingly, the directors of Jiang Quan did not 

recommend any appropriation of profit after tax to this statutory reserve. 

CAPITAL RESERVE 

The capital reserve of the Group arose as a result of the Restructuring Exercise and represented the 

excess of the nominal value of the Company’s shares issued and credited as fully paid as consideration 

for the acquisition of Post-Ante over the nominal value of the share capital of Post-Ante as acquired.


19. DIRECTORS’ REMUNERATION 


The remuneration of the directors of the Company analysed into the following bands is disclosed in 

compliance with paragraph 4 of Appendix 11 of the Listing Manual of the SGX-ST: 

Executive 

Group 

Nonexecutive 

directors directors Total 

S$500,000 and above (RMB2,419,000 and above) – – – 

S$250,000 to S$499,999 (RMB1,210,000 

to RMB2,419,000) – – – 

Below S$250,000 (Below RMB1,210,000) 3 2 5 

20. SEGMENT INFORMATION 

3 2 5 

The Group’s operating businesses are organised and managed separately according to the nature of 

products, with each segment representing a strategic business segment that offers different products in the 

PRC market. The processed meat product segment manufactures and distributes processed meat products 

such as pre-cooked and consumer-ready sausages. 

The frozen pork product segment operates the Group’s abattoir to carry out the business of pig slaughtering 

and the sale of fresh, chilled and frozen pork products. 

The pig rearing segment refers to the rearing of pigs in the Group’s pig farm in the PRC for the sales of pure 

breed and cross breed pigs. 

The feed production segment manufactures and sells animal feeds such as pig feeds and chicken feeds in 

the PRC. 

The Group generally accounts for intersegment transfers at cost. 


All the Group’s revenue, expenses, operating results, assets and liabilities and capital expenditures are 

attributable to a single geographical region, which is the PRC.

38 




20. SEGMENT INFORMATION (continued) 


Processed Frozen 

meat pork Feed 

products products Pig rearing production Elimination Consolidated 

RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 

Segment revenue: 

Net sales to external 

customers 721,342 653,123 67,590 112,122 – 1,554,177 

Intersegment sales – 81,212 13,945 31,863 ( 127,020 ) – 

Other revenue 441 531 149 36 – 1,157 

Total revenue 721,783 734,866 81,684 144,021 ( 127,020 ) 1,555,334 

Segment net profit 145,170 136,637 14,094 27,121 – 323,022 

Unallocated corporate 

expenses ( 4,945 ) 

Interest income 1,011 

Profit from operating 

activities 319,088 

Finance costs ( 775 ) 


Tax ( 57,934 ) 

Net profit attributable to 

shareholders 260,379 

As at 31 December 2000 

Segment assets 


194,499 204,293 38,853 43,556 481,201 

assets 1,051 

Pro forma consolidated 

total assets 482,252 

Segment liabilities 


50,086 10,672 629 4,196 65,583 

liabilities 17,552 


total liabilities 83,135 

Capital expenditures 896 146 5 – 1,047 

Depreciation 10,590 5,489 3,521 1,934 21,534 

Non-cash expenses 2,735 762 – 201 3,698


20. SEGMENT INFORMATION (continued) 




Processed Frozen 

meat pork Feed 

products products Pig rearing production Elimination Consolidated 

RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 

Segment revenue: 

Net sales to external 

customers 484,457 403,902 36,902 87,561 – 1,012,822 

Intersegment sales – 44,333 14,105 12,886 ( 71,324 ) – 

Other revenue 551 529 123 – – 1,203 

Total revenue 485,008 448,764 51,130 100,447 ( 71,324 ) 1,014,025 

Segment net profit 


90,342 79,990 6,305 21,926 – 198,563 

expenses ( 3,742 ) 

Interest income 447 

Profit from operating 

activities 195,268 

Finance costs ( 1,202 ) 


Tax ( 35,311 ) 

Net profit attributable to 

shareholders 158,755 

As at 31 December 1999 

Segment assets 165,558 160,148 36,270 33,284 395,260 

Segment liabilities 42,837 11,810 2,969 4,241 61,857 


liabilities 109,665 


total liabilities 171,522 

Capital expenditures 713 1,081 658 1,992 4,444 

Depreciation 10,531 5,571 3,491 1,723 21,316 

Non-cash expenses 523 2,000 – 300 2,823

40 




21. COMMITMENTS 

The Group leases certain properties under lease agreements. As at 31 December 2000, the Group had the 

following commitments: 

Group 

2000 

1999 

RMB’000 RMB’000 RMB’000 

Within one year 1,698 

1,709 

In the second to fifth years, inclusive 6,383 

5,931 

Over five years 40,236 40,236 41,067 

48,317 

48,317 48,707 

The Company did not have any significant capital commitments as at 31 December 2000. 

22. FINANCIAL INSTRUMENTS 

As 31 December 2000, the Group’s financial instruments mainly consisted of cash and bank balances, trade 

debtors, other debtors, trade creditors and other creditors. 

(i) Interest rate risk 

The Group has no significant exposure to interest rate risk. 

(ii) Credit risk 

All the Group’s cash and cash equivalents are deposited with banks in the PRC. 

The carrying amounts of trade debtors included in the supplementary pro forma consolidated balance 

sheet represent the Group’s maximum exposure to credit risk in relation to the Group’s financial assets. 

No other financial assets carry a significant exposure to credit risk. The Group has no significant 

concentration of credit risk. 

(iii) Fair values 

The fair values of cash and bank balances, trade debtors, other debtors, trade creditors and other 

creditors are not materially different from their carrying amounts because of the immediate or short 

term maturity of these financial instruments.


23. POST BALANCE SHEET EVENTS 

Subsequent to 31 December 2000, the following events occurred: 


(a) The companies now comprising the Group undertook the Restructuring Exercise, further details of 

which are set out in note 1 to the financial statements. 

(b) The Company’s shares were listed on the SGX-ST on 26 March 2001. Further details of the public issue 

of new shares are set out in note 17 to the financial statements and the Company’s prospectus dated 

12 March 2001. 

24. APPROVAL OF THE FINANCIAL STATEMENTS 

The financial statements were approved by the board of directors on 18 Apirl 2001. 

NOTES TO FINANCIAL STATEMENTS

42 


SHAREHOLDERS’ INFORMATION 

AS AT 16 APRIL, 2001 

Authorised Share Capital : HK$500,000,000 

Issued and Fully Paid-up Capital : HK$241,738,435 

Class of Shares : Ordinary Share of HK$0.25 each 

Voting Rights : One Vote per Share 

DISTRIBUTION OF SHAREHOLDINGS 

Size of Shareholding Number of Shareholders % Number of Shares % 

1 - 1,000 179 46.49 179,000 0.02 

1,001 - 10,000 133 34.55 748,000 0.08 

10,0001 - 1,000,000 64 16.62 6,061,000 0.62 

1,000,001 and above 9 2.34 959,965,740 99.28 

Total 385 100.00 966,953,740 100.00 

SUBSTANTIAL SHAREHOLDERS 

as recorded in the Register of Substantial Shareholders as at 16 April 2001 

Direct Interest % Deemed Interest % 

David Yip Wai Sun 175,644,784 18.2 585,482,620 60.5 

Wang Tingbao 50,184,224 5.2 585,482,620 60.5 

Chinese Glory Investments Limited 585,482,620 60.5 – – 

Note: David Yip Wai Sun and Wing Tingbao are deemed to be interested in the shareholding of Chinese 

Glory Investments Limited (“Chinese Glory”) by virture of their interest of 70% and 20% respectively in 

Chinese Glory.

TWENTY LARGEST SHAREHOLDERS 


SHAREHOLDERS’ INFORMATION 

AS AT 16 APRIL, 2001 

No. Name Number of Shares % 

1 Chinese Glory Investments Limited 585,482,620 60.55 

2 David Yip Wai Sun 175,644,784 18.16 

3 OUB Securities Pte Ltd 106,076,000 10.97 

4 Wang TingBao 50,184,224 5.19 

5 Wang WengGuang 25,092,112 2.59 

6 Overseas Union Bank Nominees Pte Ltd 8,724,000 0.90 

7 G K Goh Stockbrokers Pte Ltd 5,318,000 0.55 

8 J M Sassoon & Co (Pte) Ltd 1,764,000 0.18 

9 DMG & Partners Securities Pte Ltd 1,680,000 0.17 

10 Airjet Auto-Care Pte Ltd 1,000,000 0.10 

11 Lim & Tan Securities Pte Ltd 781,000 0.08 

12 HSBC (Singapore) Nominees Pte Ltd 681,000 0.07 

13 Lim Chye Huat @ Bobby Lim Chye Huat 445,000 0.05 

14 Yiu Ho Yin Rosita 439,000 0.05 

15 Song Chai Hong 342,000 0.04 

16 Poh Siam Hong @ Poh Ah Hong 300,000 0.03 

17 Kua Phek Long 100,000 0.01 

18 Phee Chin Yam 100,000 0.01 

19 Yeo Lay Lee 100,000 0.01 

20 Yew Nan Yong 100,000 0.01 

Total 964,353,740 99.72

44 


NOTICE OF ANNUAL GENERAL MEETING 


NOTICE IS HEREBY GIVEN that the Annual General Meeting of United Food Holdings Limited (“the Company”) 

will be held at Malacca Room, Level 3, Hotel Inter-Continental Singapore, 80 Middle Road, Singapore 188966 

on Tuesday, 29 May 2001 at 10.00 a.m. for the following purposes: 

AS ORDINARY BUSINESS 

1. To receive and adopt the Audited Accounts and Reports of the Directors and Auditors for the financial 

period ended 31 December 2000. (Resolution 1) 

2. To re-elect the following Directors pursuant to Bye-law 85 of the Bye-laws of the Company. 

Mr Ho Wah Onn (Resolution 2) 

Mr Sitoh Yih Pin (Resolution 3) 

Messrs Ho Wah Onn and Sitoh Yih Pin will, upon re-election as Directors of the Company, remain as 

members of the Audit Committee and will be considered independent for the purposes of Clause 902(4)(a) 

of Listing Manual of the Singapore Exchange Securities Trading Limited. 

3. To re-appoint Ernst & Young as the Company’s Auditors and to authorise the Directors to fix their 

remuneration. (Resolution 4) 

4. To transact any other ordinary business which may properly be transacted at an Annual General Meeting. 

AS SPECIAL BUSINESS 

To consider, and if thought fit, to pass the following resolutions as Ordinary Resolutions, with or without 

modifications: 

5. Authority to allot and issue shares up to fifty per cent (50%) of issued share capital 

“That pursuant to the provisions of the Companies Act 1981 of Bermuda and the rules of the Singapore 

Exchange Securities Trading Limited, the Directors be and are hereby empowered to allot and issue shares 

in the Company at any time and upon such terms and conditions and for such purposes as the Directors 

may, in their absolute discretion, deem fit provided that the aggregate number of shares to be issued 

pursuant to this resolution shall not exceed fifty per centum (50%) of the issued share capital of the 

Company for the time being, of which the aggregate number of shares issued other than on a pro rata basis 

to existing shareholders shall not exceed twenty per centum (20%) of the issued share capital of the 

Company for the time being and that such authority shall continue in force until the conclusion of the 

Company’s next Annual General Meeting.” (Resolution 5) 

The Ordinary Resolution 5, if passed, will empower the Directors from the date of the above meeting 

until the date of the next Annual General Meeting, to allot and issue shares in the Company. The 

number of shares which the Directors may allot and issue under this Resolution would not exceed fifty 

per centum (50%) of the issued share capital of the Company for the time being. For issues of shares 

other than on a pro rata basis to all shareholders, the aggregate number of shares to be issued shall not 

exceed twenty per centum (20%) of the existing issued share capital of the Company.

6. Approval of Shareholders’ Mandate for Interested Person Transactions 




a. “That approval be and is hereby given for the purposes of Chapter 9A of the Listing Manual of the 

Singapore Exchange Securities Trading Limited, for the Company and its subsidiaries or any of them 

in respect of recurrent revenue transactions falling within the types of Interested Person Transactions, 

particulars of which are set out on page 94 of the Company’s Prospectus dated 12 March 2001 

(“Prospectus”) with the Interested Persons described in the Prospectus.” 

b. “That such approval shall, unless revoked or varied by the Company in general meeting, continue in 

force until the conclusion of the next Annual General Meeting and that authority be given to the 

Directors to complete and do all such acts and things (including executing all such documents as may 

be required) as they may consider necessary, desirable or expedient to give effect to this resolution.” 

(Resolution 6) 

The Ordinary Resolution 6, if passed, will authorise the Interested Person Transactions as described 

in the Prospectus and recurring in the year and will empower the Directors of the Company from 

the date of the above meeting until the next Annual General Meeting of the Company to do all 

acts necessary to give effect to the resolution. This authority will, unless previously revoked or 

varied by the Company at a general meeting, expire at the conclusion of the next Annual General 

Meeting of the Company. 

By Order of the Board 

Lee Kam Wan 

Secretary 

Hong Kong 

4 May 2001

46 




Notes: 

1. A shareholder entitled to attend and vote at the meeting is entitled to appoint a proxy to attend and 

vote instead of him. A proxy need not be a shareholder of the Company. 

2. If the appointor is a corporation, the proxy must be executed under seal or the hand of its duly 

authorised officer or attorney. 

3. If a shareholder being a depositor whose name appears in the Depository Register (as defined in Section 

130A of the Companies Act, Cap. 50 of Singapore) wishes to attend and vote at the meeting, then he/it 

should complete the Proxy Form accompanying this Annual Report in accordance with the instructions 

printed thereon and deposit the duly completed Proxy Form at the office of the Company’s Singapore 

Share Transfer Agent, Lim Associates (Pte) Ltd at 10 Collyer Quay #19-08 Ocean Building, Singapore 

049315, at least 48 hours before the time of the meeting. 

4. If a depositor wishes to appoint a proxy/proxies, then the Proxy Form accompanying this Annual Report 

must be completed in accordance with the instructions printed thereon and deposited at the office of 

the Company’s Singapore Share Transfer Agent, Lim Associates (Pte) Ltd at 10 Collyer Quay #19-08 

Ocean Building, Singapore 049315, at least 48 hours before the time of the meeting.


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48 


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Design: Brand Communications

United Food Holdings Limited 

Shenquan Village, Luozhuang District, Linyi City 

Shandong Province, The People’s Republic of China 

Postal Code 276017 

Tel: (86) 539-8276 233 Fax: (86) 539-8276 377 

Room 1290, 12/F., Wing On Centre 

111 Connaught Road Central, Sheung Wan, Hong Kong 

Tel: (852) 2851 6688 Fax: (852) 2851 6788 

Website: www.jiangquan.com 

email: enquiry@jiangquan.com

UNITED FOOD HOLDINGS LIMITED

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