NOTES TO THE FINANCIAL STATEMENTS
9. (LOSS)/EARNINGS PER SHARE
10. PROPERTY, PLANT AND EQUIPMENT (CONTINUED)
Leasehold
$’000 $’000 $’000 $’000 $’000 $’000
Group
Cost or valuation
Balance at 1 January 2013 11,208 10,282 433 341 282 22,546
Additions 99 32 – 19 – 150
Revaluation surplus/(deficit) 28 (114) – – – (86)
Elimination of accumulated
depreciation on revaluation (2,100) (3,424) – – – (5,524)
Disposal (114) – – – – (114)
Written off (362) – – (9) – (371)
Currency translation realignment 583 404 7 9 17 1,020
Balance at 31 December 2013 9,342 7,180 440 360 299 17,621
Representing:
At cost 6,038 5,664 440 360 299 12,801
At valuation 3,304 1,516 – – – 4,820
9,342 7,180 440 360 299 17,621
Accumulated depreciation and impairment loss
Balance at 1 January 2013 7,810 8,283 211 244 282 16,830
Depreciation for the financial year 404 491 24 21 – 940
Elimination of accumulated
depreciation on revaluation (2,100) (3,424) – – – (5,524)
Disposal (50) – – – – (50)
Written off (362) – – (1) – (363)
Currency translation realignment 336 314 6 26 17 699
Balance at 31 December 2013 6,038 5,664 241 290 299 12,532
Carrying amount
Balance at 31 December 2013 3,304 1,516 199 70 – 5,089
Representing:
At cost – – 199 70 – 269
At valuation 3,304 1,516 – – – 4,820
3,304 1,516 199 70 – 5,089
FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2014
NOTES TO THE FINANCIAL STATEMENTS
10. PROPERTY, PLANT AND EQUIPMENT (CONTINUED)
Leasehold properties
Furniture, fixtures and
fittings Total
$’000 $’000 $’000
Company Cost
Balance at 1 January 2014 and 31 December 2014 – 129 129
Accumulated depreciation and impairment losses
Balance at 1 January 2014 – 105 105
Depreciation for the financial year – 18 18
Balance at 31 December 2014 – 123 123
Carrying amount
Balance at 31 December 2014 – 6 6
Company Cost
Balance at 1 January 2013 141 129 270
Written off (141) – (141)
Balance at 31 December 2013 – 129 129
Accumulated depreciation and impairment losses
Balance at 1 January 2013 141 83 224
Depreciation for the financial year – 22 22
Written off (141) – (141)
Balance at 31 December 2013 – 105 105
Carrying amount
Balance at 31 December 2013 – 24 24
As at the end of the reporting period, the leasehold properties of the Group with carrying amount of approximately
$2,143,000 (2013: $2,650,000) has been pledged to secure bank borrowings as referred to Note 19 to the financial statements.
The leasehold properties as at 31 December 2014 comprise leasehold land and building located in Taian, Shandong Province, People’s Republic of China of 161,933 square meters for lease periods ranging from 10 to 50 years from 1998, 1999 and 2009.
FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2014
NOTES TO THE FINANCIAL STATEMENTS
10. PROPERTY, PLANT AND EQUIPMENT (CONTINUED)
Leasehold properties and plant and machinery of the Group were valued as at 31 December 2013 by Taian Tian Cheng, an independent professional valuation firm using the cost replacement approach. The valuation conforms to International Valuation Standards and is based on the assets’ highest and best use, which is in line with their actual use. The resulting fair values of leasehold properties and plant and machinery are considered as level 3 recurring fair value measurements. A description of the valuation technique and the valuation process of the Group are provided in Note 25.5. Had the assets being carried at cost, the carrying amount of these assets would be $1,769,000 (2013: $2,310,000) as at 31 December 2014.
Cost of registering land use right
The Group has a land with a carrying amount of $211,000 as at 31 December 2014 (2013: $213,000) located in the People’s Republic of China for which the land use right to the land has not yet been transferred from the Sub-group. The Group estimates that the cost necessary to register the land use right with the Group is approximately $639,000 as at 31 December 2014 (2013: $627,000).
11. SUBSIDIARIES
Company
2014 2013
$’000 $’000
Unquoted equity shares, at cost 258,000 258,000
Allowance for impairment loss (255,314) (255,314)
2,686 2,686
Amount due from subsidiaries (non-trade) 138,117 137,276
Allowance for impairment loss on receivables (121,873) (122,131)
16,244 15,145 18,930 17,831
There was no movement in allowance for impairment loss of investments in subsidiaries during the financial year. During the financial year, the Company carried out a review of the investments in subsidiaries, having regards for indications of impairment on investments in subsidiaries based on the existing performance of the relevant subsidiaries. No additional impairment loss resulted from the review. The recoverable amount of the investment has been determined on the basis of its value in use. The discount rate used in measuring value in use was 8% (2013: 8%).
FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2014
NOTES TO THE FINANCIAL STATEMENTS
11. SUBSIDIARIES (CONTINUED)
The amount due from subsidiaries represents management fee income and advances made which are unsecured and non-interest bearing. It has no fixed term of repayment and is repayable only when cash flows of the subsidiaries permit. Accordingly, the fair value of these amount is not determinable as the timing of the future cash flows arising from these amount cannot be estimated reliably.
Movements in allowance for impairment loss on receivables were as follows:
Company
2014 2013
$’000 $’000
Balance at beginning of financial year 122,131 122,475
Allowance made during the financial year – 93
Allowance written back during the financial year (294) (375)
Currency translation differences 36 (62)
Balance at end of financial year 121,873 122,131
Write-back of allowance for impairment loss on receivables of approximately $294,000 (2013: $375,000) was due to the recovery of the related receivables.
The currency profiles of amount due from subsidiaries as at end of the reporting period are as follows:
Company
2014 2013
$’000 $’000
Singapore Dollar 5,033 4,712
Chinese Renminbi 473 464
United States Dollar 10,738 9,969
16,244 15,145
FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2014
NOTES TO THE FINANCIAL STATEMENTS
11. SUBSIDIARIES (CONTINUED)
The particulars of the subsidiaries are as follows:
Name of subsidiaries
(Country of incorporation and
principal place of business) Principal activities
Effective equity interest held
2014 2013
% %
Held by the Company Fook Huat Tong Kee Pte Ltd(5) (Singapore)
Investment holding 100 100
United Fruit Company Limited(4) (Hong Kong)
Importer, exporter, wholesaler, retailer and commission agent of fruits
100 100
Weifang Xinan FHTK Fruits Co., Ltd(6) (People’s Republic of China)
Dormant 100 100
To own, operate and manage as principal franchisor and/or agent of all kinds of fruits
100 100
SunMoon Distribution & Trading Pte Ltd(1) (Singapore)
Importer, exporter, wholesaler, retailer and commission agent of fruits
100 100
United Agro Produce Pte Ltd(5) (Singapore)
Distributor of dehydrated garlic and onion
100 100
FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2014
NOTES TO THE FINANCIAL STATEMENTS
11. SUBSIDIARIES (CONTINUED)
Name of subsidiaries
(Country of incorporation and
principal place of business) Principal activities
Effective equity interest held
2014 2013
% %
Held by the Company (Continued) Taian FHTK Foodstuffs Co., Ltd(3) (People’s Republic of China)
To process, market and sell dehydrated garlic and onion
100 100
Held by Fook Huat Tong Kee Pte Ltd
Fook Huat Tong Kee (Xiamen) Foodstuffs Co., Ltd(6) (People’s Republic of China)
Dormant 100 100
Shanghai Fook Huat Tong Kee Cold Storage Co., Ltd(6)
(People’s Republic of China)
Dormant 100 100
Held by Fook Yong Pte Ltd Taian Fook Huat Tong Kee Foodstuffs Co., Ltd(3) (People’s Republic of China)
To market and sell dehydrated garlic and onion
100 100
Held by SunMoon Distribution &
Trading Pte Ltd
SunMoon Food (Shanghai) Co., Ltd(3) (People’s Republic of China)
Headquarter for China operations, sales and other marketing and distribution
100 100
Held by UGC 2003, Inc.
SunMoon USA, LLC(2) (USA) To trade, distribute and market branded processed consumer food in USA
100 100
(1) Audited by BDO LLP, Singapore.
(2) Audited by BDO LLP, Singapore for consolidation purposes.
(3) Audited by BDO China Shu Lun Pan, Shanghai for consolidation purposes.
(4) Audited by Dominic K.F. Chan & Co., Hong Kong.
(5) Audited by YWL & Co., Singapore.
(6) The Company’s business license has not been renewed and remained dormant.
FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2014
NOTES TO THE FINANCIAL STATEMENTS
11. SUBSIDIARIES (CONTINUED)
Significant restrictions
Cash and bank balances of $208,020 (2013: $351,303) held in People’s Republic of China are subject to local exchange control regulations. These regulations place restrictions on exporting capital out of the country other than through dividends.