Grand China Energy Group Ltd - FORM 8-K/A - EX-99.5 - PRO FORMA FINANCIAL STATEMENTS - September 13, 2011

Attached files

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8-K/A - AMENDMENT TO CURRENT REPORT - 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-99.4 - UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS - Grand China Energy Group Ltdexhibit99-4.htm
EX-99.3 - AUDITED FINANCIAL STATEMENTS - Grand China Energy Group Ltdexhibit99-3.htm
EX-10.1 - LOAN AGREEMENTS BETWEEN YONGDING SHANGZHAI COAL MINE CO., LTD. AND MR. LONGWEN LIN - Grand China Energy Group Ltdexhibit10-1.htm
EX-10.2 - LOAN AGREEMENTS BETWEEN YONGDING SHANGZHAI COAL MINE CO., LTD. AND MR. YONGLE CHEN - Grand China Energy Group Ltdexhibit10-2.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 December 31, 2010, are based on the following principal assumptions:

(a)

The SGB Acquisition on HK Dragon and its subsidiary occurred on December 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 December 2010



 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 526,564 1,530 6,526 534,620     534,620
     Due from a Director - 1,287,858 - 1,287,858     1,287,858
     Other receivables, net 232,802 - 4,633 237,435     237,435
     Prepaid expenses 2,065,542 - 5,001 2,070,543     2,070,543
     Total current assets 2,824,908 1,289,388 16,160 4,130,456     4,130,456
               
Non-current assets:              
     Plant and equipment, net 15,056,286 - - 15,056,286     15,056,286
     Intangible assets 358,742 - - 358,742     358,742
     Investment costs   - - -     -
     Total non-current assets 15,415,028 - - 15,415,028     15,415,028
Total assets 18,239,936 1,287,858 16,160 19,545,484     19,545,484
               
               
LIABILITIES AND EQUITY              
               
Current liabilities:              
     Other payables and accrued liabilities 2,290,552 8,853 1,479 2,300,884     2,300,884
     Due to related parties - - 275,625 275,625     275,625
     Total current liabilities 2,290,552 8,853 277,104 2,576,509     2,576,509
               
Non-current liabilities:              
     Long term borrowings 11,495,312 - - 11,495,312     11,495,312
     Total non-current liabilities 11,495,312 - - 11,495,312     11,495,312
Capital and reserves:              
     Paid-in capital 123,913 1,291,934 197,797 1,613,644 (123,913) (1,291,934) 197,797
     Additional paid-in capital     - -   1,291,934 1,291,934
     Reserves 73,191 - - 73,191     73,191
     Retained earnings/(accumulated losses) 4,200,339 (7,334) (458,741) 3,734,264 123,913   3,858,177
     Effect of foreign currency translation 56,629 (4,065)   52,564     52,564
     Total equity 4,454,072 1,280,535 (260,944) 5,473,663     5,473,663
               
Total liabilities and stock holders' equity 18,239,936 1,289,388 16,160 19,545,484     19,545,484

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Consolidation Adjustments

1)   To eliminate Yongding Shangzhai’s paid-in capital              
                                                                                                                                                                                                
Dr   Paid-in capital   $  123,913        
Cr   Retained Earnings                                                             123,913  

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  

PRO FORMA CONSOLIDATED INCOME STATEMENT
Year ended 31 December 2010


 Yongding Shangzhai
US$ 		HK Dragon
US$ 		SGB
US$ 		TOTAL
US$
         
Sales 13,666,807 - - 13,666,807
Sales Tax (49,037) - - (49,037)
Net sales 13,617,770 - - 13,617,770
Cost of sales (6,702,426) - - (6,702,426)
Gross profit 6,915,344 - - 6,915,344
Selling expenses (570) - - (570)
Administrative expenses (1,912,758) (7,334) (164,421) (2,084,513)
Depreciation and amortization (120,889) - - (120,889)
Other operating expense (343,427) - - (343,427)
Profit from operations 4,537,700 (7,334) (164,421) 4,365,945
Other income and expense 42,196 - - 42,196
Interest expense (1,434,697) - - (1,434,697)
         
Profit before income tax 3,145,199 (7,334) (164,421) 2,973,444
Income tax expense / credit (127,822)     (127,822)
Non controlling interest        
Profit after income tax before extraordinary items 3,017,377 (7,334) (164,421) 2,845,622
Extraordinary items - - - -
Net profit for the year 3,017,377 (7,334) (164,421) 2,845,622
         
Other comprehensive income        
- Effects of foreign currency conversion 92,929 (4,065) - 88,864
         
         
Comprehensive income 3,110,306 (11,399) (164,421) 2,934,486

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