China Medstar Limited
Preliminary results for the year to 31 December 2007
China Medstar Limited ("Medstar" or the "Company") is a specialist healthcare
provider of radiotherapy and diagnostic equipment for the diagnosis and
treatment of cancer to hospitals in China. The Company enables first rate
medical care to be provided through the provision of financing, equipment and
support services to First Tier hospitals in China. Through their profit sharing
operating leases, the Company currently operates 23 medical centres in 14
cities.
Highlights
* Revenue from the leasing business increased 17.9% to RMB 69.3m (2006: RMB
58.8m)
* Profit before Tax increasing 59% to RMB 19,275,068 (2006: RMB 12,115,766)
* Of the agreements signed during 2007, Medstar has opened 7 diagnostic
centres and 3 more are scheduled to be operational by the first half of 2008
+ As a result, Medstar is now concentrating more on MRI and PET-CT
centres, where these imaging machines serve as a key cancer diagnostic
tool
* Offer for the Company at 62 pence per ordinary share
20 June 2008
Dr Cheng Zheng, Chairman and CEO commented:
"Whilst overall revenues declined in the year, I believe the business rationale
and investment case for Medstar remains strong. There is a huge unmet need in
China for cancer diagnosis and treatment and we see ourselves as being central
to the solution.
"The takeover offer by Ascendium which came at a significant premium to the
prevailing shareprice at the time the offer was announced, recognises the true
future value of Medstar. I am delighted with the turn of events and look
forward to a long term future with the enlarged company."
Enquiries:
China Medstar Ltd Tel: +86 (10) 5825-6867
Dr Cheng Zheng, Chairman and CEO/ Yap
Yaw Kong, CFO
Evolution Securities Tel: +44 (0) 20 7071 4300
Tom Price/Bobbie Hilliam
Haggie Financial LLP Tel: +44 (0) 20 7417 8989
Nicholas Nelson/Kathy Boate
Chairman and Chief Executive Officer's Statement
As detailed in the Review of Operations below, there were two key factors which
led to the 2007 results being below the expectations we set out at the
beginning of the financial year. Firstly, slippage in the sale of two pieces of
equipment into 2008 and secondly, ongoing contract discussions with a major
hospital meant that these revenues could not be included in today's results.
While Group revenues fell slightly to RMB 76,497,110 (2006: RMB 80,153,583),
revenue from the leasing business increased 17.9% to RMB 69.3m (2006: RMB
58.8m).
The Group maintained good margins, with Profit before Tax increasing 59% to RMB
19,275,068 (2006: RMB 12,115,766), in line with management expectations. This
is encouraging for the Company considering the difficulties of the past year.
A cost control programme implemented to monitor rising operating and
administrative expenses has resulted in maintaining costs at RMB 20,873,344
(2006: RMB 11,274,106), which is still above levels that management would like.
Business Summary
Medstar provides specialist diagnostic and radiotherapy equipment for the
treatment and diagnosis of cancer to medical centres in Chinese hospitals.
China's principal health crisis centres on the adequate treatment of the high
levels of the population affected by cancer, which accounts for the majority of
health-related deaths.
It is thought that the pollution effects of rapid urbanisation, together with
an unhealthy adoption of western lifestyle and eating habits, a lack of
screening and proper equipment are the underlying reasons. In the population,
rates of certain cancers such as breast, stomach, lung, liver and cervical
cancers, have increased dramatically in the last two decades. Chinese hospitals
are struggling to meet this demand and most are unable to purchase specialist
technology based on their current government funding and then locate suitably
trained staff to operate the equipment.
The Company's business model of leasing radiotherapy and diagnostic equipment
based on profit-sharing leasing agreements allows hospitals to open state of
the art diagnostic and treatment centres with full operational support.
Medstar is also actively engaged in equipment sales through its Trading
Division and has strategic agreements in place with high end suppliers to sell
their products.
Considering the number of hospitals in China without the necessary resources to
help treat the alarming number of cancer patients across the population,
coupled with Medstar's attractive leasing agreements and first rate equipment,
the Directors maintain a strong belief in the Company's modus operandi.
Review of Operations
Cancer Diagnostic and Treatment Centres
With the constant struggle to find sufficient funding for large pieces of
equipment, hospitals will, in the Directors' belief, continue to turn to Medstar
as an economical means to establish fully functioning treatment centres. While
the Company does not directly engage in the provision of medical services, it
provides training for the hospital staff and maintains a close working
relationship with management to ensure that the centre is run efficiently and
properly. The leasing and profit sharing agreements are the main source of
revenue for the Company, with hospitals keen to take part due to the high costs
of equipment - which Medstar can acquire at a discount due to bulk purchases
from suppliers.
Medstar currently operates 23 diagnostic imaging and cancer treatment centres
in China, which include 10 diagnostic centres (including 1 PET-CT and 1 ECT
Centre), 10 radiotherapy treatment centres and 3 other centre such as
Ophthalmic Centre, High Intensity Focused Ultrasound ("HIFU") and Leksell Knife
centre for the treatment of Parkinson's disease. Of the agreements signed
during 2007, Medstar has opened 7 diagnostic centres and 3 more are schedule to
be operational by the first half of 2008.
As a result, Medstar is now concentrating more on MRI and PET-CT centres, where
these imaging machines serve as a key cancer diagnostic tool.
As previously reported on the 5th February talks remain ongoing with a large
existing treatment centre in relation to the terms of a key contract. The
Company will be unable to recognise revenue from this contract until an
agreement is formalised and shareholders will be updated as appropriate.
In November 2007 Medstar was granted a Finance Lease Licence from the Chinese
Government, which enables it to provide more funding options to hospitals eager
to enter into partnership with the Company. This licence enables the Company to
offer both short and long term finance leases and to seek out further business
opportunities in the financing market.
Equipment Sales
The Trading Division, which sells radiotherapy and other equipment to
hospitals, had a difficult year, as there was a lengthy delay in a key
equipment sale that was to be recognised in the first half of the year. This
was eventually completed in November, adding to the second half bias of the
year's earnings. The sale of a GE 64CT scanner plus ancillary equipment to a
General Hospital in Luoyang, Henan Province, was delayed in light of the
hospital obtaining the necessary government permits for the scanner.
In addition, two more equipment sales which had been anticipated for the final
quarter of 2007 were not completed, with one of them now to be finalised in the
2nd Quarter of 2008.
The strategic agreement with General Electric ("GE") Healthcare China allows
for distribution of the latest HDe 1.5T MRI scanner through China, and the
Company has now become one of the largest buyers of MRIs from GE. The Directors
see further benefits from this relationship in terms of an increased profile,
collaborations and business opportunities with new centres.
In addition to GE agreement, the Company also has one with Toshiba China,
signed in 2007 for the distribution and leasing of its various imaging
products.
Dividend
The Company does not intend to pay a dividend for the year ended 31 December
2007.
Offer for the Company
The Company announced on 4 June 2008 that it had agreed to a recommended offer
for the Company by Ascendium Group Limited valuing the Company at �17.1million.
This represents a premium of approximately 96.8 per cent. to the Medstar
closing price of 31.5 pence on 1 May 2008 (being the last business day
immediately prior to the announcement by Medstar that it was in discussions
which may or may not lead to a recommended offer for Medstar) and approximately
93.4 per cent. to the average price for one month to the same date of 32.1
pence per Medstar share.
The offer is conditional upon valid acceptances being received (and not, where
permitted) withdrawn in respect of not less than 75 per cent. (or such lesser
percentage as Ascendium Group Limited may decide but being more than 50 per
cent) in nominal value of the Medstar shares to which the offer relates.
The offer is conditional upon Ascendium Group Limited receiving valid
acceptance in respect of not less than 75 per cent. (or such lower percentage
as the Offeror may decide) in nominal value of the offer shares and upon the
Medstar shareholders approving the relevant resolutions at a Medstar general
meeting to cancel the listing on AIM and to re-register the Company as a
private limited company. The general meeting is to take place on 27 June 2008
and an announcement will be made updating shareholders on the result of this
meeting.
Subject to the Ascendium Group Limited receiving valid acceptance in respect of
not less than 75 per cent. under the AIM Rules for Companies, the cancellation
can take five business days following the general meeting. Assuming that more
than 75% of Shareholders accept the offer and the resolutions are passed by not
less than 75 per cent. of the Shareholders, it is proposed that the
cancellation will take place on or around 7 July 2008.
Dr. Cheng Zheng
Chairman and CEO
19 June 2008
CHINA MEDSTAR LIMITED
AND ITS SUBSIDIARIES
CONSOLIDATED INCOME STATEMENT
FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2007
Note 2007 2006
RMB RMB
Revenue 1 76,497,110 80,153,583
Cost of sales (32,239,397) (37,609,236)
------------ ------------
Gross profit 44,257,713 42,544,347
Other income 2,845,198 3,591,149
Other expenses (413,000) (17,270,684)
Selling and distribution expenses (1,374,962) (912,567)
General and administrative expenses (20,873,344) (11,274,106)
Finance costs 2 (5,166,537) (4,562,373)
------------ ------------
Profit before income tax 19,275,068 12,115,766
Income tax expense (4,553,191) (4,490,566)
------------ ------------
Profit for the financial year 14,721,877 7,625,200
============ ============
Profit attributable to: 14,892,748 7,625,200
Equity holders of the Company
Minority interest (170,871) -
------------ ------------
14,721,877 7,625,200
============ ============
Earnings per share (RMB) 3
Basic 0.54 0.57
============ ============
Diluted 0.54 0.57
============ ============
CHINA MEDSTAR LIMITED
AND ITS SUBSIDIARIES
BALANCE SHEETS AS AT 31 DECEMBER 2007
Group Company
Note 2007 2006 2007 2006
RMB RMB RMB RMB
ASSETS
Non-current assets
Property, plant and 218,072,072 148,320,470 - 3,559
equipment
Intangible asset 124,091 158,721 - -
Investments in - - 104,044,169 77,319,635
subsidiaries
Deferred tax assets 2,277,259 1,322,238 - -
Trade and other 12,988,588 16,271,557 - -
receivables
------------ ------------ ------------ ------------
233,462,010 166,072,986 104,044,169 77,323,194
------------ ------------ ------------ ------------
Current assets
Inventories 2,742,501 310,018 - -
Trade and other 29,379,922 19,563,546 10,025 1,070,560
receivables
Advances to suppliers 59,504,402 53,883,349 - 533,924
and prepayments
Cash and cash 4 30,137,511 62,830,899 388,564 34,327,219
equivalents
------------ ------------ ------------ ------------
121,764,336 136,587,812 398,589 35,931,703
------------ ------------ ------------ ------------
Total assets 355,226,346 302,660,798 104,442,758 113,254,897
============ ============ ============ ============
EQUITY AND
LIABILITIES
Capital and reserves
attributable to
equity holders of the
Company
Share capital 126,477,963 126,477,963 126,477,963 126,477,963
Statutory reserves 8,706,725 6,188,583 - -
Other reserve 17,450,811 17,450,811 - -
Share options reserve 2,049,702 158,142 2,049,702 158,142
Translation reserve 1,757,728 1,757,728 810,890 810,890
Accumulated profits/ 48,744,456 36,369,850 (29,512,218) (19,542,131)
(losses)
------------ ------------ ------------ ------------
Equity attributable 205,187,385 188,403,077 99,826,337 107,904,864
to equity holders
of the Company
Minority interests 2,179,129 - - -
------------ ------------ ------------ ------------
207,366,514 188,403,077 99,826,337 107,904,864
------------ ------------ ------------ ------------
Non-current
liabilities
Bank loans 5 89,600,000 27,257,500 - -
Trade and other 6 1,894,915 1,772,108 - -
payables
------------ ------------ ------------ ------------
91,494,915 29,029,608 - -
------------ ------------ ------------ ------------
Current liabilities
Trade and other 16,461,584 20,527,581 4,462,841 5,350,033
payables
Provision for staff 97,983 250,176 - -
welfare benefit
Income tax 4,482,653 3,476,248 - -
liabilities
Other tax liabilities 1,200,197 2,224,108 153,580 -
Bank loans 5 34,122,500 58,750,000 - -
------------ ------------ ------------ ------------
56,364,917 85,228,113 4,616,421 5,350,033
------------ ------------ ------------ ------------
Total equity and 355,226,346 302,660,798 104,442,758 113,254,897
liabilities
=========== =========== =========== ===========
CHINA MEDSTAR LIMITED
AND ITS SUBSIDIARIES
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2007
Attributable to equity holders of the Company
Note Share Statu- Other Share Trans- Accum- Total Minority Total
capital tory reserve options lation ulated Interests Equity
reserves reserve reserve profits
RMB RMB RMB RMB RMB RMB RMB RMB RMB
Balance 502,513 3,676,506 17,450,811 - 1,544,133 31,256,727 54,430,690 - 54,430,690
as at 1
January
2006
Trans- - - - - 213,595 - 213,595 - 213,595
lation
difference
Net - - - - 213,595 - 213,595 - 213,595
income
recognised
directly in
equity
Profit - - - - - 7,625,200 7,625,200 - 7,625,200
for the
financial
year
Total - - - - 213,595 7,625,200 7,838,795 - 7,838,795
recognised
income and
expense
Issue of 94,024,467 - - - - - 94,024,467 - 94,024,467
share
capital
during the
financial
year
Conversion 39,800,932 - - - - - 39,800,932 - 39,800,932
of
preference
shares to
ordinary
shares
Transfer - 2,512,077 - - - (2,512,077) - - -
to
statutory
reserves
Share (7,849,949) - - - - - (7,849,949) - (7,849,949)
issue
expenses
Share - - - 158,142 - - 158,142 - 158,142
options
expense
Balance 126,477,963 6,188,583 17,450,811 158,142 1,757,728 36,369,850 188,403,077 - 188,403,077
as at 31
December
2006
Balance 126,477,963 6,188,583 17,450,811 158,142 1,757,728 36,369,850 188,403,077 - 188,403,077
as at 1
January
2007
Profit - - - - - 14,892,748 14,892,748 (170,871) 14,721,877
for the
financial
year
Total - - - - - 14,892,748 14,892,748 (170,871) 14,721,877
recognised
income
and
expense
Transfer - 2,518,142 - - - (2,518,142) - - -
to
statutory
reserves
Acquisition - - - - - - 2,350,000 2,350,000
of
subsidiary
Share 26 - - - 1,891,560 - - 1,891,560 - 1,891,560
options
expense
Balance 126,477,963 8,706,725 17,450,811 2,049,702 1,757,728 48,744,456 205,187,385 2,179,129 207,366,514
as at 31
December
2007
CHINA MEDSTAR LIMITED
AND ITS SUBSIDIARIES
CONSOLIDATED CASH FLOW STATEMENT
FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2007
Note 2007 2006
RMB RMB
Cash flows from operating activities
Profit before income tax 19,275,068 12,115,766
Adjustments for:
Depreciation of property, plant and equipment 23,792,845 18,963,275
Exchange loss arising from conversion of - 965,956
Redeemable Convertible Preference Shares
Intangible asset amortisation 34,630 14,429
Interest income (1,331,198) (108,718)
Interest expense 5,166,537 4,562,373
Loss on disposal of plant and equipment 408,000 -
Share options expense 1,891,560 158,142
Provision for staff welfare benefit 125,907 125,604
------------ ------------
49,363,349 36,796,827
Inventories (2,432,483) 582,743
Trade and other receivables (6,533,407) (25,801,572)
Advances to suppliers and prepayments (5,621,053) (31,355,349)
Trade and other payables (4,967,101) 9,192,226
Utilisation of provision of staff welfare (278,100) (302,128)
benefit
------------ ------------
Cash generated from/(used in) operating 29,531,205 (10,887,253)
activities
Interest income 1,331,198 108,718
Income tax paid (4,501,807) (3,687,171)
------------ ------------
Net cash generated from/(used in) operating 26,360,596 (14,465,706)
activities
------------ ------------
Cash flows from investing activities
Purchase of plant and equipment (94,110,262) (35,592,680)
Purchase of intangible asset - (173,150)
Cash deposits pledged with a bank 17,524,051 (17,524,051)
Proceeds from disposal of plant and equipment 157,815 -
------------ ------------
Net cash used in investing activities (76,428,396) (53,289,881)
------------ ------------
Cash flows from financing activities
Proceeds from issue of share capital - 94,024,467
Share issue expenses paid - (7,849,949)
Contribution from minority shareholders 2,350,000 -
Proceeds from bank loans 165,996,250 44,410,000
Repayment of bank loans (128,281,250) (28,052,500)
Interest paid (5,166,537) (4,562,373)
------------ ------------
Net cash generated from financing activities 34,898,463 97,969,645
------------ ------------
Net change in cash and cash equivalents (15,169,337) 30,214,058
Cash and cash equivalents at beginning of 45,306,848 14,879,195
financial year
------------ ------------
Exchange differences on cash and cash - 213,595
equivalents
------------ ------------
Cash and cash equivalents at end of financial 4 30,137,511 45,306,848
year
============ ============
CHINA MEDSTAR LIMITED
AND ITS SUBSIDIARIES
NOTES TO THE FINANCIAL STATEMENTS
FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2007
1. Revenue
Group
2007 2006
RMB RMB
Equipment leasing (rendering of service) 69,298,581 58,811,736
Sale of goods 10,681,420. 24,107,349
Sales tax (3,482,891) (2,765,502)
--------------- ---------------
76,497,110 80,153,583
======== ========
2. Finance costs
Group
2007 2006
RMB RMB
Interest on bank loans 6,401,269 4,562,373
Less: Amount capitalised in plant and equipment (773,818) -
Less: Amount capitalised in advances to suppliers (460,914) -
(for acquisition of plant and equipment)
--------------- ---------------
5,166,537 4,562,373
======== ========
The capitalised interest rate range from 6.5% to 7.47% per annum (2006: Nil)
3. Earnings per share
Basic earnings per share is calculated by dividing the Group's net profit
attributable to equity holders by the weighted average number of ordinary
shares in issue during the financial year as follows:
Group
2007 2006
RMB RMB
Basic earnings per share 0.54 0.57
======== ========
The calculation of the basic earnings per share is
based on:
Net profit attributable to equity holders 14,892,748 7,625,200
======== ========
Weighted average number of fully paid
ordinary shares issued during the financial year 27,564,138 13,263,499
======== ========
For the purpose of calculating diluted earnings per share, the Group's net
profit attributable to equity holders and the weighted average number of
ordinary shares in issue are adjusted for the effects of all dilutive potential
ordinary shares.
Diluted earnings per share amounts are calculated by dividing the profit
attributable to the equity holders of the Company by the weighted average
number of ordinary shares outstanding during the financial year plus the
weighted average number of ordinary shares that would be issued on the
conversion of all dilutive potential ordinary shares into ordinary shares.
All the 872,853 share options did not have a dilutive effect on the Group's
earnings per share as the average market price per ordinary share of the
Company during the period from the first day of trading on the Alternative
Investment Market of the London Stock Exchange in the United Kingdom to 31
December 2007 was below the exercise price of the share option granted.
Group
2007 2006
RMB RMB
Diluted earnings per share 0.54 0.57
======== ========
The calculation of the basic earnings per share is
based on:
Net profit attributable to equity holders 14,892,748 7,625,200
======== ========
Weighted average number of fully paid
ordinary shares issue during the financial year 27,564,138 13,263,499
======== ========
4. Cash and cash equivalents
Group Company
2007 2006 2007 2006
RMB RMB RMB RMB
Cash in hand 17,511 70,271 - -
Cash at bank 30,120,000 54,260,628 388,564 34,327,219
Guarantee money for bank - 8,500,000 - -
acceptance deposits
------------ ------------ ----------- ------------
Cash and cash equivalents 30,137,511 62,830,899 388,564 34,327,219
======== ======== ====== ========
Cash at bank earns interest at floating rates based on daily bank deposit rates
ranging from 0.72% to 0.81% (2006: 0.72% to 2.61%) per annum.
For the purpose of the consolidated cash flow statement, cash and cash
equivalents comprise the following at the balance sheet date:
Group
2007 2006
RMB RMB
Cash and cash equivalents as per consolidated 30,137,511 62,830,899
balance sheet
Less: Pledge of cash deposit to secure banking - (17,524,051)
facilities for a subsidiary
---------------- ----------------
30,137,511 45,306,848
========= =========
Cash and cash equivalents are denominated in the following currencies:
Group Company
2007 2006 2007 2006
RMB RMB RMB RMB
Singapore dollar 162,065 15,116,287 162,065 15,116,287
United States dollar 316,520 34,780,310 226,499 19,210,932
Chinese Renminbi 29,658,926 12,934,302 - -
-------------- -------------- -------------- --------------
30,137,511 62,830,899 388,564 32,327,219
======== ======== ======== ========
5. Bank loans
Group
2007 2006
RMB RMB
The borrowings are repayable as
follows:
On demand within one financial year 34,122,500 58,750,000
From second to fifth financial year 89,600,000 27,257,500
---------------- ---------------
123,722,500 86,007,500
========= =========
1. As at the balance sheet date, the bank loans from Waigaoqiao Subbranch,
Agricultural Bank of China are as follows:
i. Bank loan of RMB 3,250,000 (2006: RMB 9,000,000) was secured by the
original investor and Director, Cheng Zheng, and mortgage of a subsidiary's
equipment at net book value of RMB 11,535,354 (2006: RMB 13,162,104) and
carry an interest rate of 7.227% (2006: 6.93%) per annum.
ii. Bank loan of RMB 5,720,000 (2006: RMB 8,800,000) was secured by the
original investor and Director, Cheng Zheng, and mortgage of a subsidiary's
equipment at net book value of RMB 16,754,694 (2006: RMB 19,192,383) and
carried an interest rate of 7.227% (2006: 6.93%) per annum.
iii. Bank loans of RMB 56,970,000 (2006: Nil) were secured by the guarantee
with total amount up to RMB 150,000,000 by third party, Xie Shengying and
the original investor and Director, Cheng Zheng, and carried interest rates
ranging from 6.75% to 7.56% (2006: Nil) per annum.
iv. Bank loan of RMB 12,630,000 (2006: Nil) was secured by the guarantee with
total amount up to RMB 150,000,00 by a third party, Xie Shengying and the
original investor and Director, Cheng Zheng, and mortgage of a subsidiary's
equipment at net book value of RMB 22,364,912 (2006:Nil) and carried an
interest rate of 7.02% (2006: Nil) per annum.
v. Bank loan of RMB 20,000,000 (2006: Nil) was secured by the guarantee with
total amount up to RMB 150,000,000 by a third party, Xie Shengying and the
original investor and Director, Cheng Zheng, and mortgage of a subsidiary's
equipment at net book value of RMB 42,685,325 (2006: Nil) and carried an
interest rate of 7.47% (2006: Nil) per annum.
vi. Bank loan of RMB 21,500,000 (2006: Nil) was secured by the guarantee with
total amount up to RMB 150,000,000 by a third party, Xie Shengying and the
original investor and Director, Cheng Zheng and mortgage of a subsidiary's
equipment at net book value of RMB 45,301,283 (2006: Nil) and carried an
interest rate of 7.29% (2006: Nil) per annum.
vii. In 2006, bank loan of RMB 26,000,000 which carried an interest rate of
6.03% per annum was guaranteed by related parties, namely, Beijing Medstar
Hi-Tech Investment Co., Ltd. and Beijing Tengyuan Tongda Trading Co., Ltd.,
and a non-related party, Hongneng Century Energy Source Technology
Development Co., Ltd., and secured by a charge over certain equipment of
Beijing Tengyuan Tongda Trading Co., Ltd., amounting RMB 12,000,000 and the
equipment of a subsidiary at net book value amounting RMB 35,545,617.
viii. In 2006, bank loan of RMB 4,750,000 was secured by a third party,
Shanghai Affiliation of Zhongtou Credit Guaranty Co., Ltd., and mortgage of
a subsidiary's equipment at net book value of RMB 14,527,236 and carried an
interest rate of 6.93% per annum.
ix. In 2006, bank loan of RMB 5,750,000 was secured by a third party, Shanghai
Affiliation of Zhongtou Credit Guaranty Co., Ltd., and mortgage of a
subsidiary's equipment at net book value of RMB 12,431,286 and carried an
interest rate of 6.93% per annum.
x. In 2006, bank loan of RMB 7,250,000 was secured by a third party, Xie
Shengying and the original investor and Director, Cheng Zheng, and mortgage
of a subsidiary's equipment at net book value of RMB 19,616,848 and carried
an interest rate of 8.75% per annum.
(2) As at the balance sheet date, the bank loans from HSBC are as follows:
i. Bank loans of RMB 3,652,500 (2006: RMB 9,457,500) and RMB revolving loan of
Nil (2006: RMB 15,000,000) were secured by way of a mortgage over a
subsidiary's equipment leased to Beijing Friendship Hospital with total
invoice value no less than RMB 10,000,000 (2006: RMB 10,000,000), equipment
leased to the First Hospital Affiliated to Fujian Medical University with
total invoice value no less than RMB 12,000,000 (2006: RMB 12,000,000), and
a Personal Guarantee of RMB 5,600,000 from original investor and Director,
Cheng Zheng, supported by the personal net worth statement (2006: cash
deposit of USD 2,000,000 from the Company). The RMB revolving loan had a
limit of USD 3,300,000 (2006: USD 2,000,000) or equivalent RMB. The bank
loans carried interest rates ranging from 6.336% to 7.425% (2006: 5.58% to
6.633%).
Bank loans have an average maturity period of 4-24 months (2006: 18-28 months)
from the balance sheet date.
The management considers the fair value of the Group's borrowings to
approximate their carrying amounts.
The carrying amounts of all bank loans were denominated in Renminbi.
6. Trade and other payables - non-current
Group
2007 2006
RMB RMB
Deposit to be refunded after one year 1,894,915 1,772,108
========= =========
Deposit to be refunded after one year is a deposit received from JiangSu
Provincial I.T.W.M Hospital according to the agreement signed by the subsidiary
company with the hospital. According to the agreement, this deposit which will
be refunded in December 2010, bears interest at a fixed rate of 3.69% (2006:
3.69%) per annum, which are also repayable at the end of the term.
The original deposit amount received was RMB 2 million and it had been carried
at amortised cost as at balance sheet date. The weighted average effective
interest rate of this deposit is 7.56% (2006: 6.93%).
Estimated fair value
2007 2006
RMB RMB
Non-current deposit payable 1,861,813 1,772,108
========= =========
END
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De Jun 2023 até Jun 2024
