Grand China Energy Group Ltd - FORM 8-K/A - EX-99.5 - PRO FORMA FINANCIAL STATEMENTS - August 9, 2011

Attached files

file filename
8-K/A - FORM 8-K/A - Grand China Energy Group Ltdform8ka.htm
EX-99.1 - AUDITED FINANCIAL STATEMENTS - Grand China Energy Group Ltdexhibit99-1.htm
EX-99.2 - AUDITED FINANCIAL STATEMENTS - Grand China Energy Group Ltdexhibit99-2.htm
EX-99.3 - AUDITED FINANCIAL STATEMENTS - Grand China Energy Group Ltdexhibit99-3.htm
EX-99.4 - UNAUDITED FINANCIAL STATEMENTS - Grand China Energy Group Ltdexhibit99-4.htm

The pro forma consolidated financial statements on the companies comprised of SGB International Holdings Inc (“SGB”), Dragon International Resources Group Co., Ltd (“HK Dragon”) and Yongding Shangzhai Coal Mine Ltd (“Yonding Shangzhai”) (collectively, the “Companies”), based on the audited financial statements of the Companies for the financial year ended March 31, 2011, are based on the following principal assumptions:

(a)

The SGB Acquisition on HK Dragon and its subsidiary occurred on March 31, 2010 for the purpose of the pro forma consolidation;

   
(b)

Transaction costs incurred for the acquisition are assumed to be insignificant and have been ignored for the purpose of computing the financial effects.


- 2 -

BALANCE SHEET
As at 31 March 2011



Yongding
Shangzhai
US$
HK Dragon
US$
SGB
US$
TOTAL
US$
Consolidation
Adjustment 1
Consolidation
Adjustment 2
TOTAL
US$
ASSETS              
               
Current assets:              
     Cash and cash equivalents 199,000 19,538 6,309 224,847     224,847
     Due from a Director - 983,516 - 983,516     983,516
     Other receivables, net 284,343 - 4,647 288,990     288,990
     Prepaid expenses 2,093,349 - 5,000 2,098,349     2,098,349
     Total current assets 2,576,692 1,003,054 15,956 3,595,702     3,595,702
               
Non-current assets:              
     Plant and equipment, net 15,959,461 - - 15,959,461     15,959,461
     Intangible assets 345,645 - - 345,645     345,645
     Investment costs   278,013 - 278,013 (278,013)   -
     Total non-current assets 16,305,106 278,013 - 16,583,119     16,305,106
Total assets 18,881,798 1,281,067 15,956 20,178,821     19,900,808
               
               
LIABILITIES AND EQUITY              
               
Current liabilities:              
     Other payables and accrued liabilities 2,216,934 15,058 6,084 2,238,076     2,238,076
     Due to related parties - - 145,053 145,053     145,053
     Total current liabilities 2,216,934 15,058 151,137 2,383,129     2,383,129
               
Non-current liabilities:              
     Long term borrowings 12,567,877 - - 12,567,877     12,567,877
     Total non-current liabilities 12,567,877 - - 12,567,877     12,567,877
Capital and reserves:              
     Paid-in capital 123,913 1,291,934 483,711 1,899,558 (123,913) (1,291,934) 483,711
     Additional paid-in capital - - - -   1,291,934 1,291,934
     Reserves 73,191 - - 73,191     73,191
     Retained earnings/(accumulated losses) 3,798,005 (21,696) (618,892) 3,157,417 (154,100)   3,003,317
     Effect of foreign currency translation 101,878 (4,229) - 97,649     97,649
     Total equity 4,096,987 1,266,009 (135,181) 5,227,815     4,949,802
               
Total liabilities and stock holders' equity 18,881,798 1,281,067 15,956 20,178,821     19,900,808

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PRO FORMA CONSOLIDATED INCOME STATEMENT
3 months period ended 31 March 2011



Yongding
Shangzhai
US$
HK Dragon
US$
SGB
US$
TOTAL
US$
         
Sales 1,937,335 - - 1,937,335
Sales Tax (5,938) - - (5,938)
Net sales 1,931,397 - - 1,931,397
Cost of sales (1,292,095) - - (1,292,095)
Gross profit 639,302 - - 639,302
Selling expenses - - - -
Administrative expenses (397,346) (14,362) (43,628) (455,336)
Depreciation and amortization (46,056) - - (46,056)
Other operating expense (2,671) - - (2,671)
Profit from operations 193,229 (14,362) (43,628) 135,239
Other income and expense - - - -
Interest expense (580,086) - - (580,086)
         
Profit before income tax (386,857) (14,362) (43,628) (444,847)
Income tax expense / credit (15,477) - - (15,477)
Non controlling interest        
Profit after income tax before extraordinary items (402,334) (14,362) (43,628) (460,324)
Extraordinary items - - - -
Net profit for the year (402,334) (14,362) (43,628) (460,324)

Consolidation Adjustments

1) To eliminate the HK Dragon’s investment costs in Yongding Shangzhai                  
                   
Dr Paid-in capital $ 123,913              
Dr Other comprehensive expenses   154,100              
Cr Investment costs         278,013        

2) To eliminate the SGB investment costs in HK Dragon                  
                     
Dr Paid-in capital   1,291,934              
Cr Additional paid in capital         1,291,934        

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