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Cash flows and Liquidity
Cash and Cash EquivalentsThe movement in cash and cash equivalents is set out as follows:
| 2006 RMB'000 |
2005 RMB'000 |
|
| Cash (used in) / from operating activities : | (60,861) | 106,278 |
| Cash used in investing activities | (17,456) | (30,371) |
| Cash from / (used in) financing activities | 66,843 | (74,069) |
| Net (decrease) / increase in cash and cash equivalents | (11,474) | 1,838 |
| Cash and Cash equivalents at the end of the financial year | 5,203 | 16,677 |
The Group’s net cash used in operating activities for the year ended 31 December 2006 was related to the increase in receivables and decrease in payables resulting from the Restructuring Exercise. Net cash used in investing activities was mainly related to the purchase of property, plant and equipment for the upgrading of facilities at one of the subsidiaries. Net cash generated from financing activities was mainly due to the disposal of two subsidiaries and the continuing support from a director and substantial shareholder.
Consolidated Cash Flow Statement
for the financial year ended 31 December 2006
| Note | 2006 RMB'000 |
2005 RMB'000 |
|
| Cash flows from operating activities: | |||
| Profit / (loss) before income tax | 74,712 | (98,016) | |
| Adjustments for : | |||
| - Depreciation of property, plant and equipment | 10,183 | 15,623 | |
| - Goodwill written off | - | 3,468 | |
| - Amortisation of land rights | 296 | 445 | |
| - Gain on disposal of assets classified as held for sale | (9,905) | - | |
| - Gain on disposal of subsidiaries | (86,960) | - | |
| - Gain on disposal of property, plant and equipment to joint venture | (880) | - | |
| - Loss on disposal of property, plant and equipment | 18,721 | 26 | |
| - Finance costs | 11,708 | 21,366 | |
| - Finance income | (1,272) | (1,886) | |
| - Share of results of joint venture | (1,968) | - | |
| Operating profit / (loss) before working capital changes | 14,635 | (58,974) | |
Changes in working capital |
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| - Stocks | 23,508 | 69,101 | |
| - Receivable | (59,279) | 81,687 | |
| - Payable | (39,725) | 14,464 | |
| Net cash (used in) / from operating activities | (60,861) | 106,278 | |
| Cash flows from investing activities : | |||
| Finance income received | 1,272 | 1,886 | |
| Purchase of property, plant and equipment | (68,007) | (32,659) | |
| Proceeds from disposal of assets classified as held for sale | 61,793 | - | |
| Proceeds from disposal of property, plant and equipment | 10,020 | 310 | |
| Net cash outflow from disposal of subsidiaries | 18 | (22,634) | - |
| Proceeds from disposal of financial assets at fair value through profit or loss | 100 | 92 | |
| Net cash used in investing activities | (17,456) | (30,371) | |
| Cash flows from financing activities : | |||
| Repayment of borrowings | (50,930) | (83,579) | |
| Finance costs paid | (11,708) | (21,366) | |
| Net expenses from issue of shares | - | (424) | |
| proceeds from loans | 129,481 | - | |
| Bank deposits pledged | - | 31,300 | |
| Net cash from / (used in) financing activities | 66,843 | (74,069) | |
| Net (decrease) / increase in cash and cash equivalents | (11,474) | 1,838 | |
| Cash and cash equivalents at beginning of the financial year | 16,677 | 14,839 | |
| Cash and cash equivalents at end of the financial year | 5,203 | 16,677 | |
| Cash and cash equivalents comprise : | |||
| Cash and bank balances | 5,203 | 77,877 | |
| Less : Bank deposts pledged | - | (61,200) | |
| 5,203 | 16,677 |