RNS Number:9484Y
Arko Holdings PLC
25 June 2007



For Immediate Release

25 June 2007

                  Arko Holdings plc ("the Company" or "Arko")

                             Results of the Company
                      for the year ended 31 December 2006



The Board of Arko announces the results of the Company for the year ended 31
December 2006, which are set out below. These have today been published and will
be despatched to shareholders.

Copies of these financial statements will be available from the offices of
Nabarro Wells & Co. Limited, Saddlers House, Cheapside, London EC2V 6HS.


RESULTS

I am pleased to make my report to you for the financial year ended 31 December
2006.

During the 12 months to 31 December 2006, turnover increased by 14.8% to US$9.3
million (2005: US$8.1 million). The terminal operating subsidiary, Keen Chance
Terminal Limited remained the principal contributor, providing 86% of Revenue
(2005:84.8%). The balance of turnover was provided mostly from the shipping
logistics business. The gross profit amounted to US$4.2 million (2005: US$3.3
million), representing a growth of 27.3%.

Excluding the amortisation and impairment loss of goodwill as well as
depreciation totaling US$5.7 million (2005:US$3.7 million), the Group generated
a profit of US$2.2 million which was 200% ahead of comparable results in 2006.
The reduction of operating loss by 51.3% comparing to 2005 is driven by a
write-off of US$4.9 million last year. After tax and minority interests, the
Group reduced its losses by 40% to US$3,521,202 for the year ended 31 December,
2006 (2005: US$5,907,500).

As at 31 December 2006 equity shareholders' funds were US$43,513,173.


DIVIDENDS

The Board does not recommend the payment of a dividend (2005: nil).


OPERATIONAL REVIEW

The Group's terminal operating business remains profitable. Both in throughput
and in turnover the terminal has recorded growth up by 28.3% and 17.4%
respectively compared to 2005. With success in reducing operating and
administrative costs in 2006, the operating profit in Keen Chance Terminal
Limited grew by 31.4%.

In contrast, the power plant company suffered a loss of US$3,193,992 in 2006 due
to the rental income received being less than the operating expenses, of which
the depreciation charge accounted for US$1,117,039.


OUTLOOK

The Board believes with continuing growth in the terminal operating business,
the Group will maintain steady growth in the year to come. In order to increase
the efficiency of operation of the terminal, a new 45t/45m rail-mounted gantry
crane had been ordered and a new rail has just started construction. It is
foreseen that another two brand new rail-mounted gantries will be ordered to
coincide with the completion of construction of the rail. Overall, the Board is
optimistic about the prospect of the Group business.


APPRECIATION

The Board would again like to thank all staff for the commitment,
professionalism and loyalty they have shown during the last twelve months.



Qin Shun Chao
Chairman


CONSOLIDATED PROFIT AND LOSS ACCOUNT
Year ended 31 December 2006


                                                                          Notes 2006       2005
                                                                          US$              US$

TURNOVER
  Continuing operations                                             1     9,323,102        8,093,986

Cost of sales                                                             (5,138,756)      (4,783,470)


GROSS PROFIT                                                              4,184,346        3,310,516

Other operating income                                              2     759,992          809,137

Net operating expenses                                                    (2,000,000)      (4,858,465)

-     exceptional                                                   3
-     other                                                               (5,538,399)      (4,586,887)


OPERATING LOSS                                                      3     (2,594,061)      (5,325,699)
Continuing operations                                                     (2,594,061)      (467,234)
Discontinued operations                                                   -                (4,858,465)


                                                                          (2,594,061)      (5,325,699)

Interest payable                                                    5     (210,470)        (240,451)


LOSS ON ORDINARY ACTIVITIES BEFORE TAXATION                               (2,804,531)      (5,566,150)

Taxation                                                            6     (320,731)        (183,757)


LOSS ON ORDINARY ACTIVITIES AFTER TAXATION                                (3,125,262)      (5,749,907)

Minority interests                                                        (395,940)        (157,593)


LOSS FOR THE YEAR TRANSFERRED TO RESERVES                           21    (3,521,202)      (5,907,500)



                                                                          US cents         US cents

LOSS PER SHARE
Basic                                                               7     (0.1779)         (0.2985)
Diluted                                                             7     (0.1779)         (0.2985)





There were no material differences between the reported result and the
historical cost result on ordinary activities before taxation in either of the
above financial years.


CONSOLIDATED STATEMENT OF TOTAL RECOGNISED GAINS AND LOSSES
Year ended 31 December 2006


                                                                                       2006             2005
                                                                                       US$              US$

LOSS FOR THE FINANCIAL YEAR                                               (3,521,202)      (5,907,500)
Currency translation losses on foreign currency net investment            (531,364)        (247,768)


TOTAL RECOGNISED LOSSES FOR THE YEAR                                      (4,052,566)      (6,155,268)






BALANCE SHEETS
Year ended 31 December 2006


                                   Notes                  Group                             Company
                                         2006             2005             2006             2005
                                         US$              US$              US$              US$
FIXED ASSETS
Intangible asset                   8     19,412,653       22,807,051       -                -
Tangible assets                    9     32,842,279       33,878,745       -                -
Investments in subsidiaries        10    -                -                56,014,662       56,014,662
Investments in associate           11    12,082           12,082           -                -


                                         52,267,014       56,697,878       56,014,662       56,014,662


CURRENT ASSETS
Stocks and work in progress        12    77,070           144,686          -                -
Debtors                            13    10,148,114       8,809,812        43,937           26,111
Cash at bank and in hand                 838,332          653,062          510              147,978


                                         11,063,516       9,607,560        44,447           174,089
CREDITORS: amounts falling due     14    (3,933,809)      (3,494,156)      (2,059,895)      (1,590,462)
within one year                    


NET CURRENT ASSETS/                      7,129,707        6,113,404        (2,015,448)      (1,416,373)
(LIABILITIES)


TOTAL ASSETS LESS CURRENT                59,396,721       62,811,282       53,999,214       54,598,289
LIABILITIES
CREDITORS: amounts falling due     15    (2,951,389)      (2,701,923)      -                -
after more than one year           


NET ASSETS                               56,445,332       60,109,359       53,999,214       54,598,289



CAPITAL AND RESERVES
Called up share capital            19    14,921,520       14,921,520       14,921,520       14,921,520
Share premium                      20    15,662,031       15,662,031       15,662,031       15,662,031
Merger reserve                     20    26,042,970       26,042,970       26,042,970       26,042,970
Other reserve                      20    1,681,573        1,681,573        -                -
Profit and loss account            20    (14,794,921)     (10,742,355)     (2,627,307)      (2,028,232)


EQUITY SHAREHOLDERS' FUNDS         21    43,513,173       47,565,739       53,999,214       54,598,289

MINORITY INTERESTS                       12,932,159       12,543,620       -                -


                                         56,445,332       60,109,359       53,999,214       54,598,289




Approved and authorised for issue by the board on 21st June, 2007 and signed on its behalf by:





QIN Shun Chao                                          Zhang Jing
Director                                               Director



CONSOLIDATED CASH FLOW STATEMENT
Year ended 31 December 2006


                                                                    Notes 2006             2005
                                                                          US$              US$

Net cash inflow from operating activities                           16    1,814,769        1,548,244

Returns on investments and servicing of finance                     17    (210,470)        (240,451)

Taxation                                                                  (382,836)        (163,011)

Capital expenditure                                                 17    (1,285,659)      176,062
                                                                          __________       _________
CASH (OUTFLOW)/INFLOW BEFORE FINANCING                                    (64,196)         1,320,844

Financing                                                           17    249,466          (1,088,985)

INCREASE IN CASH IN THE YEAR                                              185,270          231,859






RECONCILIATION OF NET CASH FLOW TO MOVEMENT IN NET DEBT

                                                                          2006             2005
                                                                          US$              US$

Increase in cash in the period                                            185,270          231,859
Cash (inflow)/outflow from increase in lease financing                    (249,466)        1,735
Net cash outflow from net repayment of loan                               -                1,089,311
Cash (inflow) from (increase in) advances from investors                  -                (2,061)

Change in net debt resulting from cash flows                              (64,196)         1,320,844

NET DEBT AT 1 JANUARY 2006                                                (2,048,861)      (3,369,705)

NET DEBT AT 31 DECEMBER 2006                                        18    (2,113,057)      (2,048,861)



ACCOUNTING POLICIES

BASIS OF ACCOUNTING
The financial information has been prepared under the historical cost convention
and in accordance with applicable United Kingdom accounting standards.


BASIS OF CONSOLIDATION
On the acquisition of a subsidiary, the assets and liabilities of that
subsidiary are recorded at their fair value, reflecting their condition at the
date of acquisition.

The consolidated profit and loss account and consolidated balance sheet include
the financial statements of the Company and its subsidiary undertakings up to 31
December. The results of subsidiaries acquired are included in the consolidated
profit and loss account from the date on which control passes. Intra-group sales
and profits are eliminated on consolidation.

As permitted by Section 230 of the Companies Act 1985, a separate profit and
loss account is not presented in respect of the Company.


TURNOVER
Turnover comprises the value on delivery of sales relating to the period in
respect of operation of a terminal and provision of shipping logistic services.


GOODWILL
Goodwill arising on consolidation represents the excess of the fair value of the
consideration paid over the fair value of the identifiable net assets acquired
and will be amortised through the profit and loss account over its estimated
useful economic life of 20 years on a straight line basis.

Provision is made for any impairment in the carrying value of the goodwill to
the extent that the asset's recoverable value in use is reduced below its
carrying value.


TANGIBLE ASSETS
Expenditure on additions and improvements is capitalized as incurred. Fixed
assets are included at historical cost less accumulated depreciation and any
impairment losses.

Tangible fixed assets, other than construction in progress, are depreciated over
their estimated useful lives on a straight line basis. The following annual
rates of depreciation have been used.

Land and buildings                     20-30 years
Plant and machinery                    10-20 years
Equipment, furniture and fixtures       5-10 years
Motor vehicles                          5-10 years
Oil storage tanks                      15 years
Vessels                                10 years


Construction in progress represents a building under construction, which is
stated at cost less any impairment. Cost comprises the direct cost of
construction. Construction in progress is reclassified to the appropriate
category of tangible fixed assets when completed and ready for use.


STOCK
Stock is valued at the lower of cost and estimated net realisable value.


FOREIGN CURRENCIES
Monetary assets and liabilities expressed in foreign currencies are translated
at the rate of exchange ruling at the balance sheet date. Revenues, costs and
non-monetary assets are translated at the exchange rates ruling at the
transaction date.

Profit and losses arising from currency transactions and on settlement of
amounts receivable and payable in foreign currencies are dealt with through the
profit and loss account.

Differences on exchange arising from the translation of the assets, liabilities
and results from subsidiaries are taken directly to profit and loss reserve.


DEFERRED TAXATION
Deferred tax is recognised in respect of all timing differences that have
originated but not reversed at the balance sheet date where transactions or
events that result in an obligation to pay more tax in the future or a right to
pay less tax in the future have occurred at the balance sheet date.  Timing
differences are differences between the group's taxable profits and its results
as stated in the financial statements that arise from the inclusion of gains and
losses in tax assessments in periods different from those in which they are
recognised in the financial statements.

Deferred tax is measured at the average tax rates that are expected to apply in
the periods in which timing differences are expected to reverse, based on tax
rates and laws that have been enacted or substantially enacted by the balance
sheet date.  Deferred tax is measured on a non-discounted basis.


LIQUID RESOURCES
In accordance with FRS 1 Cash flow statements, for cash flow purposes, cash
includes net cash in hand and bank deposits payable on demand within one working
day, and liquid resources include all of the Group's other bank deposits.


PENSION COSTS
The Group contributes to defined contribution pension schemes including the Hong
Kong Mandatory Provident Fund Scheme and the People's Republic of China Central
Pension Scheme. Contributions are charged to the profit and loss account in the
period as incurred.


LEASED ASSETS AND OBLIGATIONS
Where assets are financed by leasing agreements that give rights approximating
to ownership ("finance leases"), the assets are treated as if they had been
purchased outright.  The amount capitalised is the present value of the minimum
lease payments payable during the lease term.  The corresponding leasing
commitments are shown as obligations to the lessor.

Lease payments are treated as consisting of capital and interest elements, and
the interest is charged to the profit and loss account in proportion to the
remaining balance outstanding.

All other leases are "operating leases" and the annual rentals are charged to
profit and loss on a straight line basis over the lease term.


SHARE-BASED PAYMENTS

The Company has taken advantage of the exemption in FRS20 Share-based payment
from recognising a charge in respect of share options which were fully vested
before 31 December 2005.



NOTES TO THE FINANCIAL STATEMENTS

For the Year ended 31 December 2006



1      SEGMENTAL ANALYSIS
                                     Turnover          Operating (loss)/profit  Net assets/(liabilities)
                              2006        2005        2006         2005         2006         2005
                              US$         US$         US$          US$          US$          US$
Continuing operations:
Terminal and shipping         9,298,586   8,076,571   3,693,482    2,463,348    28,721,773   27,702,720
logistics
Power plant                   -           -           (3,193,992)  (1,228,426)  24,390,776   27,694,570
Trading and others            24,516      17,415      (3,093,551)  (1,702,156)  7,102,335    8,481,621
Mining                        -           -           -            -            1,088,913    1,088,913


                              9,323,102   8,093,986   (2,594,061)  (467,234)    61,303,797   64,967,824

Discontinued operations:
Trading and others            -           -           -            (4,858,465)  (4,858,465)  (4,858,465)


Group                         9,323,102   8,093,986   (2,594,061)  (5,325,699)  56,445,332   60,109,359


Analysis by origin:
Hong Kong                     1,327,032   1,227,130   (1,408,225)  (1,245,673)  23,083,252   24,221,058
People's Republic of China,   7,996,070   6,866,856   (894,464)    (3,918,817)  34,743,404   36,925,369
excluding Hong Kong
United Kingdom                -           -           (291,372)    (161,209)    (1,381,324)  (1,037,068)


Group                         9,323,102   8,093,986   (2,594,061)  (5,325,699)  56,445,332   60,109,359





The analysis of turnover by destination is not materially different from the
analysis of turnover by origin.


2        OTHER OPERATING INCOME                                           2006             2005
                                                                          US$              US$

         Rental income                                                    759,992          809,137

                                                                          759,992          809,137


3        OPERATING LOSS                                                   2006             2005
                                                                          US$              US$
         Operating loss is stated after charging/(crediting):
         Fees payable to Baker Tilly UK Audit LLP                         38,610           27,027
         for the audit of Company's annual financial statements
         Fees payable to associates of company's auditors
           For other services:
           The audit of the Company's subsidiaries                        36,036           49,551
           Taxation services                                              31,833           -
         Depreciation of tangible fixed assets                            2,127,323        2,130,181
         - owned assets
         - leased assets                                                  -                1,014
         Amortisation of goodwill                                         1,593,165        1,591,334
         Loss/(gain) on disposal of fixed assets                          11,198           (4,290)
         Rentals under operating leases                                   74,862           83,254

         - land and buildings
         - barges and containers                                          262,548          275,541
         - motor vehicles                                                 26,696           28,846
         Directors' remuneration                                          89,360           54,009
         Provision for doubtful debts                                     411,452          -
         Staff costs (including directors' remuneration) - note 4         1,188,787        1,078,886

         Exceptional items
         Provision against debtor                                         -                4,858,465
         Impairment of goodwill                                           2,000,000        _______-
                                                                          2,000,000        4,858,465
                                                                          _                __


4        EMPLOYEES                                                        2006             2005
                                                                          No.              No.
         The average monthly number of persons (including directors)
         employed by the Group during the year was:
            Management and administration                                 58               32
            Sales and distribution                                        7                -
            Operations                                                    503              518

                                                                          568              550



                                                                          2006             2005
                                                                          US$              US$
         Staff costs for above persons:
            Wages and salaries

            - included in costs of sales                                  738,715          581,471
            - included in operating expenses                              407,309          474,582
            Other pension costs                                           13,175           16,978
            Other staff welfare                                           29,588           5,855

                                                                          1,188,787        1,078,886



DIRECTORS' REMUNERATION

Fees of US$47,876 (2005: US$55,598) were paid to certain directors through
Winbest Resources Limited, a company which is ultimately controlled by Chin
Dynasty Foundation Limited (see note 26).  These fees are in addition to fees of
US$89,360 (2005: US$54,009) that were paid to the directors by Group companies,
as disclosed in note 3.



5        INTEREST PAYABLE                                                 2006             2005
                                                                          US$              US$

         Bank loans                                                       114,176          113,093
         Other loans                                                      -                127,276
         Finance charges payable under finance lease                      96,294           82

                                                                          210,470          240,451


6        TAXATION                                                         2006             2005
                                                                          US$              US$
         Foreign tax
           Current year                                                   320,731          183,757

         Tax on profit on ordinary activities                             320,731          183,757


                                                                          2006             2005
         Factors affecting tax charge for the year:                       US$              US$
         The tax assessed differs from the standard rate of
         corporation tax in the UK (30%).  The differences are explained
         below:
         Loss on ordinary activities before tax                           (2,804,531)      (5,566,150)

         Loss on ordinary activities multiplied by standard rate of       (841,359)        (1,669,845)
         corporation tax in the UK of 30% (2005: 30%)
         Effects of:
         Addition to tax losses                                           648,032          55,075
         Expenses not deductible for tax purposes                         1,835,239        2,397,109
         Different tax rates on overseas earnings                         (282,037)        (184,295)
         Non-taxable income                                               (1,029,899)      (414,287)
         Utilisation of tax losses previously not recognised              (9,245)          -

         Tax charge for the year                                          320,731          183,757



In respect of subsidiary companies operating in Hong Kong, provisions for Hong
Kong profits tax are calculated at 17.5% (2005: 17.5%) of the estimated
assessable profits for the year.

Subsidiary companies operating in the People's Republic of China are subject to
Enterprise Income Tax ('EIT') at rates ranging from 15% to 33%. However, certain
subsidiaries are subject to tax holidays from the local tax authorities under
income tax law.  Others had tax losses brought forward from previous years.
Accordingly, no provision for EIT has been made for the year.

No deferred tax is recognised on the unremitted earnings of the overseas
subsidiary companies, as no dividend payments due to UK parent company are
expected to be made in the foreseeable future.  A deferred tax asset of
US$108,986 (2005: US$71,939) has not been recognised in respect of tax losses
carried forward due to the uncertainty of the timing of future taxable profits
against which these losses can be offset.




7        LOSS PER SHARE

Basic loss per share for the year is based on a loss of US$3,521,202 (2005:
US$5,907,500) and the weighted average number of shares in issue of
1,978,895,097 (2005: 1,978,895,097).

Dilutive loss per share for 2006 and 2005 is equivalent to basic loss per share
as the effect of dilutive potential ordinary shares would decrease the net loss
per share and so the potential ordinary shares are not treated as dilutive in
accordance with FRS22 Earnings per share.




8                     INTANGIBLE FIXED ASSET - GROUP                                            Goodwill on
                                                                                             acquisition of
                                                                                               subsidiaries
                                                                                                        US$


Cost                                                                                       27,890,148

At 1 January 2006 and 31 December 2006

Amortisation                                                                               5,083,097
At 1 January 2006
Exchange difference                                                                        (198,767)
Charge for the year                                                                        1,593,165
Impairment loss for the year                                                               2,000,000

At 31 December 2006                                                                        8,477,495

Net book value                                                                             19,412,653
At 31 December 2006

At 31 December 2005                                                                        22,807,051




9           TANGIBLE FIXED       Land and   Plant and  Furniture, Oil                 Motor     Construction Total
            ASSETS               buildings  machinery  fixtures   storage    Vessels  vehicles  in progress
                                                                  and        tanks
                                                                  equipment
GROUP                            US$        US$        US$        US$        US$      US$       US$          US$
Cost
At 1 January 2006                22,065,109 21,039,354 7,947,377  173,053   2,446,319 686,941   1,763,903    56,122,056
Exchange differences             (300,411)  1,029,229  174,501    -         149,898   16,257    (1,298,269)  (228,795)
Transfers                        -          88,285     -          -         -         -         (88,285)     -
Additions                        140,057    1,249,997  47,111     -         -         11,725    327,695      1,776,585
Disposals                        -          -          (3,832)    -         (871,299) -         -            (875,131)

At 31 December 2006              21,904,755 23,406,865 8,165,157  173,053   1,724,918 714,923   705,044      56,794,715

Depreciation
At 1 January 2006                6,584,126  9,470,807  4,581,278  13,460    1,078,988 514,652   -            22,243,311
Exchange differences             (39,442)   (64,657)   33,163     -         19,625    6,120     -            (45,191)
Charge for the year              416,271    930,283    545,524    -         183,391   51,854    -            2,127,323
Disposals                        -          -          (2,705)    -         (370,302) -         -            (373,007)


At 31 December 2006              6,960,955  10,336,433 5,157,260  13,460    911,702   572,626   -            23,952,436

Net book value
At 31 December 2006              14,943,800 13,070,432 3,007,897  159,593   813,216   142,297   705,044      32,842,279


At 31 December 2005              15,480,983 11,568,547 3,366,099  159,593   1,367,331 172,289   1,763,903    33,878,745




9        TANGIBLE FIXED ASSETS (continued)

At 31 December 2006, the net book values of land and buildings, plant and
machinery, fixtures and equipment are further analysed as follows:


                            Terminal        Power plant     Mining zone     Others          Total
                            US$             US$             US$             US$             US$

Land                        2,756,615       -               -               -               2,756,615
- short lease
- unspecified leases        1,378,309       -               -               -               1,378,309

                            4,134,924       -               -               -               4,134,924
Buildings                   8,179,494       1,744,954       884,428         -               10,808,876

Land and buildings          12,314,418      1,744,954       884,428         -               14,943,800

Plant and machinery         6,725,987       6,344,445       -               -               13,070,432

Furniture, fixtures and     104,188         1,819,517       10,544          1,073,648       3,007,897
equipment



At 31 December 2003, a guarantee was given by the Company's subsidiary, Keen
Chance Terminal (GZ) Company Limited ("KCT") for banking facilities granted to a
fellow investor, Miaotou Economic Development Company Limited ("MEDCL"), in KCT
(see note 25(b)).

The Group obtained land use right and real estates certificates on the
terminal's land under short leases from the local land authority. Land with a
value of US$ 1,378,309 held under unspecified leases of the terminal is land
held for industrial use for which the relevant land use right certificate was
not obtained and thus the term of the lease has yet to be agreed.

Included in the land and buildings of the power plant are short lease land on
which the power plant, related ash storage pools and ancillary facilities are
located. In addition, they also include land held for industrial use in respect
of which the Group has not obtained the relevant land use right certificate.

Under the law of the People's Republic of China, the land held for industrial
use and the buildings without building ownership certificates can only be used
for identified industrial purposes. The Group did not obtain any building
ownership certificates in respect of the buildings of the Group.  The Group
cannot legally sell or mortgage such properties until the relevant land taxes
have been paid to the local land authority.  However there is no binding
agreement for the taxes to be paid.

At 31 December 2006, the net book value of fixed assets held under finance
leases amounted to US$1,067,981 (2005:Nil).



10       INVESTMENTS                                                                 Investment in
                                                                                     subsidiaries
         COMPANY                                                                     US$
         Cost
         At 1 January 2006 and 31 December 2006                                      56,014,662



At 31 December 2006, the Company held 100% of the ordinary shares of Arko
Offshore Holdings Limited, a company incorporated in the British Virgin Island
("BVI"), whose principal activity was that of a holding company. Arko Offshore
Holdings Limited had the following subsidiaries undertakings:


Name                                 Holding ordinary Business activities         Country of
                                     shares/                                      incorporation
                                     registered
                                     capital

Arko Energy Limited                  100%             Investment holding          British Virgin Islands
Arko Consultants Limited             100%             Providing management        British Virgin
                                                      services                    Islands
Arko Pacific Limited                 100%             Investment holding          British Virgin
                                                                                  Islands
Long Prosperity Industrial Limited*  100%             Investment holding          Republic of Seychelles
Arko Silicon (Hubei) Limited*        100%             Dormant                     People's Republic of China
Sanko Mineral Limited*               100%             Sub-letting of yachts,      British Virgin
                                                      ships                       Islands
                                                      and vessels
Arko Logistics Limited*              100%             Providing logistics         Hong Kong
                                                      and related services
Arko Satellite Limited*              100%             Dormant                     British Virgin Islands
Arko Terminal Limited ("ATL")*       100%             Investment holding          Republic of Seychelles
Changzhou Power  Development Company 59.2%            Operating a coal-fired      People's Republic
Limited*                                              thermal power plant         of China
Keen Chance Terminal (GZ) Company    40%              Investing in and operation  People's Republic
Limited*                                              of a terminal and providing of China
                                                      logistics services
Fujian Sanko Mining Limited*         70%              Dormant                     People's Republic
                                                                                  of China


                * held by a subsidiary of Arko Offshore Holdings Limited



The 40% equity interest in Keen Chance Terminal (GZ) Company Limited "KCT"
previously held by Keen Lloyd Energy Limited ("KLEL"), a subsidiary of Keen
Lloyd Holdings Limited ("KLHL"), has been transferred to ATL.  The transfer has
been submitted for registration to the relevant PRC authorities.

Pursuant to an agreement dated 5 April 2002 entered into between KLEL and
Miaotou Economic Development Company Limited "MEDCL", a shareholder of KCT who
held a 30% equity interest in KCT, MEDCL agreed to vote in accordance with the
instructions of KLEL at board meetings in view of its indebtedness to KLEL, for
an approximate sum of RMB78 million (equivalent to US$9.4 million), and KLEL
intended to convert the outstanding loan into the registered capital of KCT.

On 22 April 2003, KLEL entered into a shareholder agreement with MEDCL and
Harbour Economic Development Company Limited ("HEDCL"), another shareholder of
KCT, whereby all parties agreed that MEDCL has unconditionally transferred the
authority empowered to its directors representative (including their rights and
obligations) to KLEL until KLEL transferred the 40% equity interests in KCL to
ATL to reiterate the aforesaid agreement dated 5 April 2002.



10       INVESTMENTS (continued)

On 16 May 2003, a supplemental agreement was entered into between ATL, KLEL,
MEDCL and HEDCL by which all parties agreed that the above authority transferred
to KLEL would be vested in ATL after KLEL completed the transfer of equity
interests in KCT to ATL.

In accordance with the terms and conditions set out in the above agreements,
KLEL effectively controls the board of KCT and this arrangement has been
confirmed by the shareholders of KCT. In 2002, a Hong Kong lawyer expressed his
view that KCT is a subsidiary of KLEL under Hong Kong Company Law. Control of
KLEL has been transferred to ATL and therefore in the opinion of the directors,
KCT is a subsidiary of ATL under UK Companies Act 1985.

In addition, KCT will be a legal subsidiary of ATL immediately upon the
registration of the transfer of the 40% of equity in KCT from KLEL to ATL.



11       INVESTMENT IN ASSOCIATE                                          2006             2005
                                                                          US$              US$

Share of net assets                                                       12,082           12,082



The investment in associate represents 20% of the ordinary shares in a company
incorporated in the People's Republic of China, Guangzhou Keen Lloyd Shipping
Agents Limited, at consideration of RMB 100,000 (US$12,082). The associate is
principally engaged in provision of logistics and related services.



12       STOCKS
      
Stocks represent coal and consumables. There was no significant difference
between the replacement cost and the value shown in the balance sheet.



13       DEBTORS                                         Group                             Company
                                        2006             2005             2006             2005
                                        US$              US$              US$              US$
Amounts falling due within one year:
Trade debtors                           1,572,751        4,511,313        -                -
Other debtors (note i)                  8,575,363        4,298,499        43,937           26,111


                                        10,148,114       8,809,812        43,937           26,111




13         DEBTORS (continued)



Notes:

(i)       Included in other debtors at 31 December 2006 are amounts due from (non-group) related companies as follows:

  -      Tanko Electronics Limited - US$38,687 (2005: US$14,114)

  -      Guangzhou Tung Lloyd Shipping Agency Company Limited - US$328,723 (2005:  US$170,172)

  -      Guangzhou Winko Investment Limited - US$91,680 (2005: US$91,776)

  -      Guangzhou Keen Lloyd Copper Industry Company Limited - US$81,126 (2005:              US$130,351)

  -      Keen Lloyd Holdings Limited  - US$165,166 (2005: Nil)



The amounts are interest free, unsecured and repayable on demand.



14     CREDITORS                                         Group                             Company
                                        2006             2005             2006             2005
                                        US$              US$              US$              US$
(a)    Amounts falling due
       within one year:

Trade creditors                         492,262          739,070          64,933           -
Amount due to subsidiary                -                -                1,937,052        1,493,649
Corporation taxes                       648,578          710,683          -                -
Other creditors and accruals            2,543,503        2,044,403        57,910           96,813
Obligations under finance lease (note   249,466          -                -                -
iii)

                                        3,933,809        3,494,156        2,059,895        1,590,462

(b)    Amounts falling due after
       one year:


Bank loan (note i)                      1,915,246        1,915,246        -                -
Advances from fellow investors in       786,677          786,677          -                -
subsidiary companies (note ii)
Obligations under finance lease (note   249,466          -                -                -
iii)

                                        2,951,389        2,701,923        -                -




Notes

(i)   The bank loan is unsecured.  Interest accrues at the rate of 5.85% per annum.


(ii)  An amount was advanced from Miaotou Economic Development Company
Limited of US$718,004 (2005: US$718,004) and a further amount from Walton
Enterprises Limited of US$68,673 (2005: US$68,673).

(iii) Obligations under finance lease are secured on the underlying
assets and repayable between one to three years.



15       Bank LOANS, other loans and financial instruments                2006             2005
                                                                          US$              US$
         Analysis of debt maturity
         Amounts payable
         Two to five years                                                2,951,389        2,701,923

                                                                          2,951,389        2,701,923


         Bank, overdrafts, loans and finance leases analysis by origin:
         People's Republic of China                                       2,951,389        2,701,923

                                                                          2,951,389        2,701,923


The Company had no other financial liabilities.

The Group holds financial instruments in order to finance its operations and to
manage interest rate and currency risks.  Group operations are financed by means
of retained profits and a mixture of both short and medium term debts.  The
Group borrows, through banks and from related parties, in local currencies at
fixed rates.  The Group does not trade in any way in financial instruments.

The principal risks arising from the Group's financial instruments are interest
rate risk, liquidity risk and exchange rate risk.  The Group board reviews and
agrees policies for managing each of these risks and these are summarised below.
These policies have been developed during the current accounting period as a
consequence of the Group's expansion.

Financial instruments such as investments in and advances to subsidiary
undertakings and short term debtors and creditors have been excluded from the
disclosures below.



Details of security are given in note 14.


15       Bank LOANS, other loans and financial instruments (continued)

Interest rate risk

Group borrowings are held in local currencies.  Current loans are at fixed
rates.  The Group's policy for future borrowings will be to take floating rates
unless fixed rate finance is available at particularly attractive rates.

The interest rate risk profile of the Group's financial liabilities and assets
are as follows:


Financial liabilities
                                                                                          Fixed rate
                                                                         Fixed rate       weighted average
                                                                         weighted         period for which
                                                                         average          rate is 
                      Total            Interest-free    Fixed rate       interest rate    fixed
Currency                                                                 at
                      US$              US$              US$              %                Years

2006
RMB                   2,951,389        1,036,143        1,915,246        5.85             1

                      2,951,389        1,036,143        1,915,246

2005
RMB                   2,701,923        786,677          1,915,246        5.85             1

                      2,701,923        786,677          1,915,246


Financial assets


Currency                                                                  Floating rate    Floating rate
                                                                          2006             2005
                                                                          US$              US$

Hong Kong dollars                                                         517,214          396,712
RMB                                                                       321,062          256,350
GBP                                                                       56               -

                                                                          838,332          653,062



Financial assets represent cash at bank and in hand.  There were no fixed rate
financial assets.

The directors consider that the fair value of the Group's financial assets and
liabilities was the same as their carrying value.


Liquidity risk

The Group's policy is to ensure that sufficient facilities would be available to
satisfy its peak borrowing requirements.  As at 31 December 2006, the Group was
within its bank borrowing facilities.  The Group had drawn down all committed
borrowing facilities at the year end.


Foreign currency risk

All trading is undertaken in local currencies.  Funding is also in local
currencies other than inter- company investments and loans and it is not the
Group's policy to cover these amounts as the date of repayment is uncertain.


16    RECONCILIATION OF OPERATING LOSS TO NET CASH FLOW FROM OPERATING ACTIVITIES


                                                                                      2006             2005
                                                                                       US$              US$

Operating loss                                                            (2,594,061)      (5,325,699)
Depreciation of tangible fixed assets                                     2,127,323        2,131,195
Amortisation of goodwill                                                  1,593,165        1,591,334
Impairment loss of goodwill                                               2,000,000        -
(Gain)/loss on disposal of tangible fixed assets                          11,198           (4,290)
Decrease in stocks                                                        67,616           119,285
(Increase)/decrease in debtors                                            (1,338,302)      3,957,598
Increase/(decrease) in creditors                                          439,653          (427,667)
Exchange adjustments                                                      (491,823)        (493,512)


Net cash flow from operating activities                                   1,814,769        1,548,244




17    ANALYSIS OF CASH FLOWS FOR HEADINGS NETTED IN THE                               2006             2005
CASH FLOW STATEMENT                                                                    US$              US$

Returns on investment and servicing of finance
Interest paid                                                             (210,470)        (240,451)


Net cash outflow from returns on investment and servicing of finance

                                                                          (210,470)        (240,451)


Capital expenditure and financial investment
Payments to acquire tangible fixed assets                                 (1,776,585)      (389,736)
Sale of tangible fixed assets                                             490,926          565,798


Net cash (outflow)/inflow from capital expenditure                        (1,285,659)      176,062

Financing
Capital element of finance lease rental payments                          249,466          (1,735)
Net decrease in bank and other borrowings                                 -                (1,089,311)
Increase in advances from investors                                       -                2,061


Net cash inflow from financing                                            249,466          (1,088,985)



18    ANALYSIS OF CHANGES IN NET DEBT

                                                         At               Cash             At
                                                         1 January        Flows            31 December 
                                                         2006                              2006
                                                         US$              US$              US$

Cash in hand and at bank                                 653,062          185,270          838,332
Advances from investors                                  (786,677)        -                (786,677)
Other loans                                              (1,915,246)      -                (1,915,246)
Obligations under finance lease                          -                (249,466)        (249,466)


Total                                                    (2,048,861)      (64,196)         (2,113,057)



9     SHARE CAPITAL                                      2006                             2005
                                       Number            #                Number          #
Authorised:                               30,000,000,000      150,000,000  30,000,000,000      150,000,000

Ordinary shares of  0.5p each


Equivalent to:                                                        US$                              US$ 
                                                              265,395,280                      265,395,280


Allotted, called up and fully paid:        1,978,895,097              US$   1,978,895,097   US$ 14,921,520
Ordinary shares of 0.5p each                                   14,921,520




Share options

The Company operates a share option scheme. During the year ended 31 December
2002, the Company granted share options to its advisors as part of the
remuneration for the services provided. Details of share options transactions
during the year ended 31 December 2006 are set out below:


                                                    Number of       Number of        Number of
Date              Exercisable         Exercise      shares          shares           shares
granted      From       To            price         At 1 January    granted/lapsed   At 31 December
                                                    2006                             2006

10.5.2002    27.6.2002  10.5.2007     2p            300,000          -               300,000





20     RESERVES                                                                 
                                                                                  
                                       Share Premium                    Statutory  
                                       account                          surplus           Profit
                                                        Merger          Reserve           and loss
                                                        reserve         (note i)          account
                                                                 
                                       US$              US$              US$              US$
Group
At 1 January 2006                      15,662,031       26,042,970       1,681,573        (10,742,355)
Loss for the year                      -                -                -                (3,521,202)
Exchange movements                     -                -                -                (531,364)

At 31 December 2006                    15,662,031       26,042,970       1,681,573        (14,794,921)

Company
At 1 January 2006                      15,662,031       26,042,970       -                (2,028,232)
Loss for the year                      -                -                -                (599,075)

At 31 December 2006                    15,662,031       26,042,970       -                (2,627,307)




Note:

(i)            Statutory surplus reserve:

In accordance with the law of the People's Republic of China and the articles of
association of certain of the Company's subsidiaries, directors of these
subsidiaries may at their discretion make appropriations to a statutory surplus
reserve equivalent to 10% of the subsidiaries' net profits. Appropriations may
also be made to statutory public welfare reserve equivalent to 5 to 10% of the
net profits of these operating subsidiaries. Distribution of profits to
shareholders can only be made after such appropriations.

The statutory surplus reserve may be used to reduce any losses incurred or be
capitalised as paid up capital. The use of the statutory public welfare reserve
is restricted to capital expenditure incurred for staff welfare facilities. The
statutory public welfare reserve is not available for distribution.



21      RECONCILIATION OF MOVEMENT IN EQUITY SHAREHOLDERS' FUNDS          2006             2005
                                                                          US$              US$


Loss for the financial year                                               (3,521,202)      (5,907,500)
Other recognised gains and losses                                         (531,364)        (247,768)


Net reduction in shareholders' funds                                      (4,052,566)      (6,155,268)
Opening shareholders' funds                                               47,565,739       53,721,007


Closing shareholders' funds                                               43,513,173       47,565,739





22      RELATED PARTY TRANSACTIONS

Other than transactions otherwise disclosed in the financial statements, the
Group had the following material transactions which were carried out on an arm's
length basis with related parties during the year:

                                                                       Year ended       Year ended
Name of company                      Note  Nature                      31 December 2006 31 December 2005
                                                                       US$              US$

Guangzhou Tung Lloyd Shipping Agency  (a)  Agency charges              73,543           72,587
Limited
Winko Metal Limited                   (b)  Hiring charges for Motor    23,144           23,144
                                           Vehicle
Tanko Electronics Limited             (b)  Management fee received     24,516           17,414



The Company has taken advantage of the exemption conferred in FRS8 Related
parties from disclosing transactions with Group companies.


22       RELATED PARTY TRANSACTIONS (continued)

Notes:

(a)      A company in which the Chairman, Mr Qin Shun Chao, is a director.

(b)      A company controlled by Keen Lloyd Holdings Limited (see note 26).




23       OPERATING LEASE COMMITMENTS

At 31 December 2006, the Group was committed to make the following payments
during the next year in respect of land and building under operating leases:

                                                                          2006             2005
                                                                          US$              US$
Leases which expire:
in the next year                                                          116,098          58,896
in the second to fifth years                                              56,955           -

                                                                          173,053          58,896



24      CAPITAL COMMITMENTS

At 31 December 2006, the Group had capital commitments contracted for as
follows:

    -   in respect of the acquisition of a gantry from a non-related supplier
in the sum of RMB 4,000,000 intended for use by a subsidiary company, Keen
Chance Terminal (GZ) Company Limited. At 31 December, 2006, the group has
settled RMB1,200,000.

The Company had no capital commitments.



25      CONTINGENT LIABILITIES

(a)   On 23 July 1998, a subsidiary of the Company, Keen Chance Terminal (GZ)
Company Limited ("KCT"), gave a guarantee for RMB50 million (equivalent to
approximately US$5.9 million) in favour of the Huangpu Branch of the Industry
and Commercial Bank of China for banking facilities granted to Harbour Economic
Development Company Limited ("HEDCL"), a fellow investor in KCT and its ultimate
controlling party, Guangzhou Huangpu Foreign Trade Group Company Limited and
secured over their equity interests in KCT.  HEDCL was unable to repay the loans
due to the bank. The bank took action against KCT to enforce the guarantee for
the outstanding loan.

(b)  On 9 November 1999, KCT gave a guarantee for RMB18 million (equivalent to
approximately US$2.1 million) in favour of Nangang Rural Credit Co-operation
Bank for banking facilities granted to Miaotou Economic Development Company
Limited ("MEDCL"), a fellow investor in KCT, secured over its equity interests
in KCT. MEDCL was unable to repay the outstanding loan.


25      CONTINGENT LIABILITIES (continued)

On 27 September 2001, the Guangzhou Law Court delivered an order and notice that
the guarantees above were invalid and MEDCL's equity interest in KCT was frozen.

Based on legal advice, the equity interests had no material impact on the
operations of KCT and the directors consider that no provision is required.

KCT maintains that the guarantee given was invalid on the following grounds:

(1)    such guarantee did not have approval from the board of directors of KCT;

(2)    in accordance with the law of the People's Republic of China, the board
of directors and the management of KCT cannot give KCT's properties for
guarantee to its shareholder; and

(3)    the controlling party of HEDCL has not held a valid business licence
since 1998 and ceased operations in 1999. In accordance with the banking
regulations of the People's Republic of China, the bank cannot lend money to
enterprises which do not have a valid business licence.

The legal proceedings are still in progress.  Based on legal advice, the
directors are of the opinion that, the loan agreement was void because it was
illegal and accordingly, the guarantee contract was also invalid.

Furthermore, Keen Lloyd Holdings Limited, the Company's parent company, has
indemnified the Group against any loss KCT will suffer should the guarantee be
enforceable.

Accordingly, the directors are of the opinion that no provision should be made
in the financial statements for any possible claim from the bank in respect of
the litigation.



26      ULTIMATE CONTROLLING PARTY

The directors consider that Chin Dynasty Foundation Limited ("CDFL"), a company
incorporated in the British Virgin Islands is the ultimate holding company.
CDFL is controlled by the Chin Dynasty Fund.

The Chin Dynasty Fund is a discretionary trust where Mr Qin Shun Chao is the
settlor.  Members of Mr Qin's family are the potential beneficiaries of the
trust.

No group financial statements for CDFL are published.

The company's immediate parent company is Keen Lloyd Holdings Limited, a company
incorporated in the British Virgin Islands.


27      EXCHANGE RATE

The US dollar to sterling exchange rate at 31 December 2006 was US$1.9585/#
(2005: US$1.7168/#).


The announcement set out above does not constitute a full financial statement of
the Company's affairs for the year ended 31 December 2006. The Company's
auditors have reported on the full accounts for the said year and have
accompanied them with an unqualified report. The accounts have yet to be
delivered to the Registrar of Companies. The annual report and accounts will be
available from the Company's nominated adviser, Nabarro Wells & Co. Limited,
Saddlers House, Cheapside, London EC2V 6HS.



Enquiries:

Angela Leung - Arko Holdings plc
Tel: 00 852 2219 9999. Email: angelal@arkoholdings.com

Robert Lo / Marc Cramsie - Nabarro Wells & Co. Limited
Tel: 020 7710 7400. Email: robertlo@nabarro-wells.co.uk /
marccramsie@nabarro-wells.co.uk




                      This information is provided by RNS
            The company news service from the London Stock Exchange
END

FR FAMBTMMATBBR

Arko (LSE:AKO)
Gráfico Histórico do Ativo
De Nov 2024 até Dez 2024 Click aqui para mais gráficos Arko.
Arko (LSE:AKO)
Gráfico Histórico do Ativo
De Dez 2023 até Dez 2024 Click aqui para mais gráficos Arko.