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HONG KONG APPAREL MANUFACTURER
Wednesday 23 April 2014
Tuesday 15 April 2014
Tuesday 8 April 2014
China Ting Group Restated Statements of Movements in Equity
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Above you will find a copy of my restated Statements of Movements in Equity for The China Ting Group. I am hoping this is the correct format we are meant to use for this assessment.
If you have any feedback on this restated statement, please don't hesitate to let me know.
Wednesday 19 March 2014
The China Ting Group KCQs...
Key Concepts:
- Revenue increased. This is due to the increase in OEM/ODM business; the Group recorded an increase to HK$2,109.8 million from HK$1,970.3 million in 2012.
- Cost of sales increased due to increased costs in administration expenses, and marketing and distribution costs.
- The gross profit for the year ended 31 December 2012 was HK$773.2 million, representing an increase of 0.5% as compared with HK$769.7 million in 2011.
- Total comprehensive income has decreased due to increased administration expenses, marketing and distribution costs, finance costs, and income tax expenses.
- Total assets have increased. This is most likely due to the purchasing of new international brands, such as, “Calvin Klein – Performance”.
- Total liabilities increased due to an increase in operating costs.
- Total equity increased. This is due to an increase in share capitals, reserves and proposed dividends in the year ended 31 December 2012.
- Currency translation differences have decreased due to a stronger Hong Kong dollar in 2012.
- The Group deregistered a subsidiary company in 2012, costing them $5.4 million dollars.
- A negative goodwill arising on the acquisition occurred in 2009.
China Ting Groups’ export business represents the Group’s major source
of income. Original equipment manufacturer [OEM] and original design
manufacturer [ODM] refers to the manufacturing of designs and products that are
purchased by another company and retailed under the purchasing company’s brand
name. In 2012, the China Ting Group’s OEM/ODM business saw an increase of 2.0%
since 2011, generating a total of HK$2,109.8 million, which in turn represents
81.7% of the Group’s total revenue for the year. The segment profit before
income tax from the Group’s OEM/ODM business was HK$202.4 million.
Brand
Retail Business:
In the year ended 31 December 2012, the China Ting Group experienced a
6.0% decrease in retail sales from HK$502.2 million to HK$472.2 million. Sales
from concessions proved to be the strongest sales channel, amounting to HK$346.5
million (2011: HK$352.9 million), accounting for 73.4% of total retail
turnover. Whereas, sales from freestanding store and franchisees amounted to
HK$38.5 million (2011: HK$39.8 million) and HK$87.2 million (2011: HK$109.5
million). Management claims this decrease in overall retail sales was a result
of increased operating costs, strong competition, and a difficult market place.
Key
Questions:
- What is meant by Non-controlling Interests?
Non-controlling
interests, also known as minority interests, are shareholders who own less than
half of the shares in a corporation. The China Ting Group treats transactions
with non-controlling interests as transactions with equity owners of the Group
(China Ting Group 2012, p. 68 of 156). Gains and losses on disposals to
non-controlling interests are also recorded in equity (China Ting Group 2012,
p. 68 of 156).
- What are Contingent Liabilities and what is an example?
A
contingent liability refers to a potential liability and is subject to a future
event occurring or not occurring (Accounting Coach 2014). It can also be a
present obligation emerging from past event that is not acknowledged because it
is not probable that outflow of economic resources will be required or the
amount of obligation cannot be measured reliably (China Ting Group 2012, p. 84
of 156). The China Ting Group states that a contingent liability is not
recognised but is disclosed in the notes section of their financial statement.
Only once an outflow is probable is it then recognised as a provision (China
Ting Group 2012, p. 84 of 156).
Examples of a contingent liability
includes, acts of employees, credit guaranties, incomplete contracts, pending
court cases, third party indemnities, unfilled purchase orders, unsettled
disputes, etc.
- What is a Concentration Risk?
Concentration
risk is the uncertainty that a shareholder will experience from lack of
heterogeneity; for example, investing too heavily in one industry, one
geographic or one type of security (QFinance 2009). In the year ended 31
December 2012, China Ting Group sales to top five customers, who are
international well-known brand retailers, accounted for approximately 34.3% of
the total revenue (China Ting Group 2012, p. 90 of 156). The total revenue
contributions from the top five retailers were down by 0.5% since 2011 (China
Ting Group 2012, p. 90 of 156).
- What is an Impairment of Goodwill?
An
impairment of goodwill, otherwise known as an impairment of assets, occurs when
the carrying value of the asset exceeds its fair value (Investing Answers
2014). Typically, goodwill impairment usually occurs as a consequence of
decreased brand value, negative market information about the company, or the
need to adjust the accounting value of an overpaid asset acquired in the past
(Investing Answers 2014). The China Ting Group reports amortization expenses of
approximately HK$4,799,000 (2011: HK$4,799,000) and HK$4,571,000 (2011:
HK$4,571,000) have been
charged in selling, marketing and distribution costs and administrative
expenses respectively (China Ting Group 2012, p. 114 of 156).
- What is a Pre-IPO Share Option Deed? And do any other companies offer it?
Pre-IPO Share Option Deed represents pre-initial
public offering share option deed.
Tuesday 18 March 2014
YouTube Video: Sustainable China Textile Industry | DuPont "Fashion Forward"
DuPont has partnered with a leading fashion brand, K-Boxing, to promote environmentally-friendly fashion in the China textile industry. DuPont™ Sorona®, a renewably sourced fiber, uses fewer fossil fuels to produce, helping create better-performing sustainable textiles that are more gentle on the planet.
Visit Website:
https://www.youtube.com/watch?v=q0i_EPNSXbs
YouTube Video: Greenpeace Warns of Environmental Toll of China's Textile Industry
In a Beijing gallery exhibiting bikini clad mannequins smothered in dirt, Greenpeace Toxic campaigner Zhao Yan delivered findings of an investigation into water pollution from two textile towns in China's Guangdong province.
Visit Website:
https://www.youtube.com/watch?v=baTDqgwPVQc
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