ANNUAL REPORT 2014 - Greka Engineering · ANNUAL REPORT 2014. Highlights Chairman’s Statement. Business Review Financial Review. Board of Directors Directors’ Report. ... Additionally,

ANNUAL REPORT 2014

AN

NU

AL R

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T 2014G

reka Engineering

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CONTENTS

ANNUAL REPORT 2014

Highlights

Chairman’s Statement

Business Review

Financial Review

Board of Directors

Directors’ Report

Statement of Directors’ Responsibilities

Independent Auditors’ Report

Consolidated Statement of Comprehensive Income

Consolidated Statement of Financial Position

Consolidated Statement of Changes in Equity

Consolidated Statement of Cash Flows

Notes to the financial information

Directors, Company Secretary and Advisers

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04

06

08

09

10

13

14

15

16

17

18

19

52

02 GREKA ENGINEERING & TECHNOLOGY LIMITED

HIGHLIGHTS

CORPORATE HIGHLIGHTS• The Group’s customer base increased by 43

(2013:30newcustomers) to150customers inChina at year end (2013: 107 customers). Thisrepresenteda40%increaseinthecustomerbase.

• Three-year power sales contract with JiaqinAgriculture, the Company’s first unaffiliated powerclient.

• Power Line Construction Agreement withCUCBM,aCNOOCsubsidiary.

• Nolosttimeduetoinjuryoraccidentin2014.

03ANNUAL REPORT 2014

OPERATIONAL HIGHLIGHTS• Salesof123gasstationdispensersin2014,a9.6%

decreaseonthe136soldin2013.• Nosalesofwellheadcompressorsin2014(2013:3

sold).• NosalesofSCADAin2014(2013:2sold).• 977,965MCF (27.7MCM) of gas for sale were

processed in 2014, (2013: 1,038,263 MCF)processed(29.4MCM),a5.8%decrease.

• Salesof10,915,738kwhofpowerin2014,(2013:10,714,823kwh),a2%increase.

• 4.9 km of gas gathering pipeline constructed in2014resultingin41.9kmoftotalpipelineattheendof2014.

• 3.8kmofpowerlineconstructedin2014,atotalof71.8kmofpowerlinesattheendof2014.

FINANCIAL HIGHLIGHTS• Revenue increased by 41% to US$5.2m (2013:

US$3.7m).• Cash and bank deposits of US$2.6m at 31

December2014(2013:$3.5m).


CHAIRMAN’S STATEMENT

In 2014, Greka Engineering completed its first full-yearof operation as an independent quoted company on AIM followingitsdemergerfromGreenDragonGas.TheCompany’sperformance improved from enhanced equipment utilization and customer expansion. Revenue increased 41% to US$5.2m andlossesdecreasedtoUS$1.7m,a12%reductioncomparedtotheprioryear.

High quality infrastructure assets (including coal bed methane field compressors, pipeline gathering systems and an Integrated ProductionFacility(IPF)whichformthecoreassetsoftheGroup)provided reliable and increasing revenue for the Company. Ashighlighted in the interim report, the Company successfully renegotiated its gas gathering system usage, power sales and compression fees with its key client Green Dragon Gas. Therenegotiated gas processing fee and power price provided for a 274%increasetogasprocessrevenueoverthepreviousyearandpowersalesrevenueincreasedby185%.

The Company signed a three-year power sales contract withJiaqinAgriculturewhichbecameour thirdclient forpowerandthefirstunaffiliatedclient.Furthermore,wesignedaPowerLineConstruction Agreement with CUCBM, a CNOOC subsidiary, under which we successfully built power lines connecting one of itsvalvegroups tosupplyninewells toourpowergrid.Thisinitial valve group is to serve as a pilot to CUCBM on the benefits of connecting its remaining fourteen valve groups into our infrastructure.Thepricingforpowersalesisconsistentacrossallfourclients.

Randeep S. GrewalFounder & Chairman


In accordance with our strategy to be a technology leader within the unconventional gas market, product developmentcontinued.TheCompanymadesignificantadvancesinthepipenetwork and power grid technology through the research anddevelopmentofamicrocasingpressureproductionpump.Thispump can potentially increase gas production of a single gas wellbyover20%comparedtoconventionaltechnologyandhasbeensuccessfullydeployedonthreewellsonatrialbasis.Wewillevaluate launching the product on the basis of the performance duringthecomingyear.Additionally,leveragingonthesuccessfuldevelopmentoftheLNGdispensers,theCompanyembarkedonthe development of C/LNG pump skidswhich providemobilitytoanenduseronitsC/LNGdispensingcapability.Weexpecttoconcludeonthemarketpotentialofthisnewproductduringthecourseofthisyear.

Looking forward to the coming year,we expect our continuedgrowth to be diversified with increasing IPF utilization, rising power sales to all four clients, expanding power grid to CUCBM, reinitiated SCADA sales and stable dispenser sales within our existingChinamarket.

Finally, I would like to thank the diligent management teamthat leads our hundred employees across a diversified business encompassing 24/7 infrastructure operations within the IPF,manufacturing products for gas distribution as well as continued technology development maintaining a leading edge within our nicheunconventionalgasmarket.

Randeep S. GrewalChairman8April,2015


BUSINESS REVIEW

Greka Engineering & Technology Ltd., (AIM; GEL) is anunconventional gas sector engineering and technology business with pipeline, gas compression and power generation assets in China.

OVERVIEWOur2014financialandoperatingresultsinclude:

• RevenueofUS$5.2million(2013:US$3.7million).

• LosstoequityholdersofUS$1.7million(2013:US$1.93million).

• AlosspershareofUS$0.42cents(FY13:US$0.47cents).

• Dispensersalesdecreasedby9.6%from136for2013to123for2014.

• Gas processed for sale decreased by 5.8% from 1,038,263thousandcubicfeetin2013to977,965thousandcubicfeetin2014.

• Powersalesincreasedby2%from10,714,823kwhin2013to10,915,738kwhin2014.

PERSONNEL• During2014,theGrouprecruited5newtechnicalemployees

inconnectionwiththeimprovementofthebusiness.

• Held30technicalandbusinesstrainingcourses,withatotaltrainingtimebeing517hoursattendedby233attendees,ofwhich 47 attendees received external professional training,withthetotaltrainingtimebeing461hours.

• Implemented a performance evaluations and incentivemechanisms which encouraged innovation, efficiency enhancementandenergysavingbehaviour.

MANUFACTURING• During 2014, the Group produced 115 sets of gas station

refuelling equipment items, including 75 CNG dispensers,3 LNG dispensers, 6 cylinders, 17 un-loading cylinders andreformingworkon14dispensers.

• Theaveragepowergeneratedpercubicmeterwas3.53kwh,which increased by 3% compared to 2013. The maximumpowergeneratedpercubicmeterwas4kwh.

• Carriedoutmultipleoverallinspectionsforthegasgatheringsystemtoensurenopipelineleakagethroughaddingodorantandbuildingpressure.

• Carried out maintenance for equipment at wellheads andinsidethestation.

• Conductedmaintenanceforcompressors.

ENGINEERING• Completed4.9kmofgasgatheringsub-pipelineconstruction

in2014.

• Completed3.8kmofpowerlineconstructionin2014.

• Completeddrawingdesignfor3gasstations.

• BuiltpowerlineforCUCBM9wells.

TECHNOLOGY• Installed cooling fan for control cabinets of 20 wellhead

boosters, which ensures their stable operation under high temperatures in the summer and reduces accidental shutdown frequency.


• Inspectedandrenewedpowerlinesandchanged430Mlow-tensioncablestohigh-tensioncables.

• Successfully developed the micro-pressure CBM productiontechnology, as a result of which the single well production of Grekaisover20%higherthanconventionaltechnology.

• LedandcompletedthecompilationoflocalLiquefiedNaturalGas(LNG)dispenserstandardsforHenanProvince.

BUSINESS DEVELOPMENT• Attended2014(CentralRegion)InternationalGastechnology

and Equipment Exhibition, 2014 15th China InternationalNaturalGasAutomobileandGasStationEquipmentExhibition& Summit Forumaswell as 20145thChina PetroleumandPetrochemical Refuelling Station Construction TechnologyExchangeConferenceandpromotedourbrand.

• Successfullysecured63dispensersalescontracts,withthetotalcontractvalueofUS$1.95m,andsecured43newcustomers.

• Carried out commissioning of 48 new gas stations forcustomers.

• Securedalandmarkpowersalescontracttoathirdparty,JiaqinAgricultureCo.Ltdforaperiodofthreeyears.

• Signed a Power Supply Construction Contract with ChinaUnited Coalbed Methane Corporation Ltd (CUCBM), whichwill see Greka Engineering being to provide engineeringconstruction and management services as well as power supply servicestoCUCBMintheShizhuangBlock.


FINANCIAL REVIEW

RESULTS FOR THE YEARThe Group recorded revenue of US$5.2million (2013: US$3.7million)andalossofUS$1.7million(2013:US$1.9million)fortheyearended31December2014.Thegeneralandadministrativeexpenses amounted to US$3.1 million (2013: US$2.2 million).LosspersharetotalledUS$0.42(2013:US$0.47).

LIQUIDITY AND CAPITAL RESOURCESAsat31December2014,theGrouphastotalassetsofUS$38.7million (2013:US$42.7million) and liabilities and shareholders’equityofUS$9.0millionandUS$29.7millionrespectively(2013:US$11.2millionandUS$31.5millionrespectively).

Asat31December2014,theGroup’scashandbankbalancewasUS$2.6million (2013:US$3.5million)with totalborrowingsofUS$4.7million(2013:US$4.7million).

09

BOARD OF DIRECTORS

ANNUAL REPORT 2014

EXECUTIVE DIRECTORRandeep S. Grewal, Chairman & CeoRandeep Grewal is theChairman of GrekaEngineering. He also actsas Chairman and Chief ExecutiveOfficer ofGreenDragon, having founded thisbusiness in1997,andof Greka Drilling sinceits demerger from GreenDragonin2011.MrGrewalalso fills the same roles at private family companies includingGrekaIntegratedInc., a US-based heavy oiland gas production, oil transportation, oil refining and real estate business.From April 1997 toSeptember 1997, Mr.GrewalservedasChairmanand Chief Executive Officer for Horizontal Ventures, Inc., an oil and gas horizontal drillingtechnologycompanythatbecameasubsidiaryofGrekaEnergyCorporationinSeptember1997.From1993to1996,Mr.GrewalwasCorporateVicePresidentfortheRadaGroupwithprincipalresponsibilityforglobalexpansionanddiversification.Mr.GrewalhasaBScinMechanicalEngineeringfromNorthropUniversity.

NON-EXECUTIVE DIRECTORSSanjay Saxena (aged 50), Non-Executive DirectorSanjayhasmorethan30years’experienceinbusinessleadershipand entrepreneurial roles in business management, sales, marketing, business development and strategic investmentsacross a number of regions including Europe, Russia, the Middle East,AfricaandAsiaPacific.

Sanjayhasspent25yearswith IBM, initiallywithin itsSoftwareDivision, and rose tohis currentposition as a Leader inGlobalTechnology Services, Central East West Africa – part of IBM’sServices Division in 2011. Prior to joining IBM, Sanjay was

co-founder and director of a number of emerging marketsfocussedbusinesses.SanjayisamemberoftheCharteredInstituteofMarketingandholdsbothaBAfromAllahabadUniversityandanMAinPoliticalSciencefromGorakhpurUniversity.

Bryan Smart (aged 61), Non-Executive DirectorBryan Smart is a Chartered Accountant with over 40 years ofexperienceinfinancebothinprofessionalandcommercialroles.

Until1981,heworkedforDeloitteasacharteredaccountantinboth external auditor and management consultancy roles for six years.

He joinedDaimlerChrysler (UK)Ltd in1981rising from internalauditor tofinancial controller in 1985andwas appointedCFOin 1996. During this period, he completed the acquisition andassimilation of Chrysler Jeep in the UK, Lex Autosales and allMercedes Benz dealers in metropolitan areas and also served on theboardofBrunelUniversity.HeremainsatrusteedirectoroftheDaimlerChryslerPensionFund.

Since leaving Daimler in 1996, Mr. Smart’s non executivedirectorships have included Chairman of the Supervisory Board of CarboTechAG,acompanybasedinSalzburgwhichmanufacturescarbon fibre components for the automotive industry. He hasbeen a non-executive director of AIM-listed ScottyGroup PLC,which supplies satcom solutions for military applications. Hehas also served on the board of Rangers International Football Clubplc.HewasanexecutivedirectorofTradelinensLtd,ajointventure established with a Chinese importer until its successful salein2014.

His current responsibilities include non-executive director rolesin AB Dynamics plc, a company that designs and manufactures robotic test equipment for the automotive industry, and also in Greka Drilling plc and Greka Engineering plc, both AIM listedcompanies which are engaged in coal bed methane drilling in ChinaandIndia.HealsoactsasaconsultantforGreenoaksLtd,aMercedesdealergroupandisatrusteeofBrooklandsMuseum.

His main passion in life aside from family, focuses on classic cars whichhecollectsandrestores,competingoccasionally.


DIRECTORS’ REPORT

PRINCIPAL ACTIVITIESGreka Engineering & Technology Ltd, is the ultimate holdingcompany and the indirect parent company of Gongyi GrekaTransportation, Zhengzhou Greka Technology and ZhengzhouGrekaPetro-Equipment,thecompaniesincorporatedinthePRCandtheoperatingcompanythroughwhichtheGroupholdsgaspipeline,gascompressionandpowergenerationassetsinChina.Theprincipal activities of theGroup are providing engineering,procurement, construction and management services for infrastructureprojectsintheunconventionalgassectorinChina.The Company is also involved in the research, developmentand delivery of technologies specific to the unconventional gas sector and incorporating such technologies into industry-specific hardware manufactured in-house. Greka Engineering& Technology Ltd was incorporated in the Cayman Islands on18March2013andwasregisteredasaPublicCompanyon30September 2013. It acts as a holding company and providesfinancing and management services to its subsidiaries. ThecompanyisdomiciledintheCaymanIslands.

BUSINESS REVIEW & FUTURE DEVELOPMENTSAsummaryoftheGroup’smainbusinessdevelopmentsfortheyearended31December2014andpotentialfuturedevelopmentsis contained within the Chairman’s Statement, Business Review andFinancialReview.

ACCOUNTING POLICIESThefinancialstatementshavebeenpreparedinaccordancewithInternational Financial Reporting Standards (as adopted by the EU).Refertonote2inthenotestothefinancialstatements.

SHARE CAPITAL AND RESERVESDetails of theGroup’s authorised and issued share capital andreservesasat31December2014and2013arecontainedinnote19andtheconsolidatedstatementofchanges inequityof thefinancialstatementsrespectively.

RESULTS AND DIVIDENDSAnoverviewoftheGroup’sresults,coveringtheyearsended31December2014and2013,isprovidedintheFinancialReviewonpage8.Detailedfinancialinformationisincludedfrompage15topage51ofthereport.TheDirectorsdonotproposethepaymentofdividendsuntiltheGroupisgeneratingsufficientprofits.

DIRECTORS REMUNERATIONSeenote8tothefinancialstatements.

DIRECTORS AND THEIR INTERESTSThetablebelowsetsoutthe interestsoftheDirectors inGrekaEngineering&TechnologyLtd.asat31December2014.

No. of % age Ordinary of Ordinary Shares Shares

RandeepGrewal 264,935,883 64.68%SanjaySaxena 0 0%BryanSmart 0 0%


SUBSTANTIAL SHAREHOLDINGSThe Group is aware of the following beneficial shareholdings,representing 10 per cent or more of the issued ordinary share capitaloftheGroup,asat31December2014.

Number of % of issued ordinary shares share capital

GDGHLTD 262,205,082 64.01%RichardchandlerCorporation 74,495,331 18.19%

THE BOARDThe Board of Directors is composed of three members, oneExecutive Directors, who is also the Executive Chairman and two Non-Executive Directors. The Board has established Auditand Remuneration Committees with formally delegated duties, responsibilitiesandwrittentermsofreference.Fromtimetotime,separate committees may be set up by the Board to consider specificissuesasandwhentheneedarises.

AUDIT COMMITTEETheAuditCommitteehelpstheBoarddischargeitsresponsibilitiesregarding financial reporting, external and internal audits, and controls, aswell as reviewing theGroup’s annual financialstatements.Italsoassistsbyreviewingandmonitoringtheextentofnonauditworkundertakenbyexternalauditors,advisingontheappointment of external auditors and reviewing the effectiveness oftheGroup’sinternalauditactivities,internalcontrolsandriskmanagement systems. The ultimate responsibility for reviewingand approving the annual report and financial statements and the half-yearlyreportsremainswiththeBoard.TheAuditCommitteecomprisesalltwoNon-ExecutiveDirectors.

REMUNERATION COMMITTEEThe Remuneration Committee’s remit is to review the scaleand structure of the executive Directors’ and senior employees’ remuneration and the terms of their service or employment contracts, including share option schemes and other bonus arrangements.Theremunerationandtermsandconditionsofthenon-executivedirectorswillbesetbytheentireBoard.Nodirectoror manager of the Company may participate in any meeting at which discussion or any decision regarding his or her own remunerationtakesplace.TheRemunerationCommitteewillalsoadminister any share option schemes or other employee incentive schemesadoptedbytheCompanyfromtimetotime.

RELATIONS WITH SHAREHOLDERSThe Directors attach importance to the provision of clear andtimely information to shareholders and the broader investment community. Information about the company is available on itswebsite (www.grekaengineering.com).TheGroup’sannual,andinterim, reports will also be sent to shareholders and be made availablethroughtheGroup’swebsite.

DIRECTORS AND OFFICERS LIABILITY INSURANCETheGrouphasinplaceaDirectorsandOfficersinsurancepolicyto cover relevant individuals against claims arising from their workonbehalfofthecompany.TheBoardintendstokeepthelevel of cover provided under annual or more frequent review, as appropriate.


DIRECTORS’ REPORT

GOING CONCERNBasedontheGroup’sbudgetsandcashflowprojectionsfor2015,theDirectorsaresatisfiedthattheGrouphasadequateresourcesto continue its operations and meet its commitments for the foreseeablefuture.

ANNUAL GENERAL MEETINGThe2015AnnualGeneralMeetingwill beheldat9:00amon24July2015,attheofficeofSmith&Williamsonlocatedat25Moorgate,LondonEC2R6AY.TheNoticeofMeeting, togetherwith an explanation of the items of special business, is provided separatelytoshareholderswiththisreport.

AUDITORSBDO LLP has expressed its willingness to continue in office asauditors and a resolution for their reappointment will be proposed attheAnnualGeneralMeeting.

On behalf of the Board

Randeep S. GrewalChairman and CEO8April2015

13

STATEMENT OF DIRECTORS’ RESPONSIBILITIES

ANNUAL REPORT 2014

TheDirectorsareresponsibleforpreparingtheDirectors’reportand thefinancial statements for theGroup.TheDirectorshaveprepared the financial statements for each financial year which giveatrueandfairviewofthestateofaffairsoftheGroupandoftheprofitorlossoftheGroupforthatyear.

The Directors have chosen to use the International FinancialReportingStandards(“IFRS”)asadoptedbytheEuropeanUnioninpreparingtheGroup’sfinancialstatements.

International Accounting Standard 1 requires that financial statements present fairly for each financial year the company’s financial position, financial performance and cash flows. Thisrequires the faithful representation of the effects of transactions, other events and conditions in accordance with the definitions and recognition criteria for assets, liabilities, income and expenses set outintheInternationalAccountingStandardsBoard’s‘Frameworkforthepreparationandpresentationoffinancialstatements’.Invirtually all circumstances, a fair presentation will be achieved by compliance with all applicable International Financial Reporting Standards.AfairpresentationalsorequirestheDirectorsto:

• consistentlyselectandapplyappropriateaccountingpolicies;

• present information, including accounting policies, in amanner that provides relevant, reliable, comparable and understandableinformation;

• provide additional disclosures when compliance with thespecific requirements in IFRS is insufficient to enable users to understand the impact of particular transactions, other events and conditions on the entity’s financial position and financial performance;and

• state that thegrouphas compliedwith IFRS, subject to anymaterial departures disclosed and explained in the financial statements.

The Directors are also required to prepare financial statementsin accordance with the rules of the London Stock Exchangefor companies trading securities on the Alternative Investment Market.

The Directors are responsible for keeping proper accountingrecords which disclose with reasonable accuracy at any time the financial position of the group, for safeguarding the assets, for takingreasonablestepsfor thepreventionanddetectionoffraud and other irregularities and for the preparation of financial statements.

Financial information is published on the Company’s website.ThemaintenanceandintegrityofthiswebsiteistheresponsibilityoftheDirectors;theworkcarriedoutbytheAuditorsdoesnotinvolve consideration of these matters and, accordingly, the Auditors accept no responsibility for any changes that may occur to the financial statements after they are initially presented on thewebsite.

LegislationintheCaymanIslandsgoverningthepreparationanddissemination of financial statements may differ from legislation inotherjurisdictions.


INDEPENDENT AUDITORS’ REPORT

INDEPENDENT AUDITORS’ REPORT TO THE DIRECTORS OF GREKA ENGINEERING & TECHNOLOGY LIMITED

WehaveauditedthegroupfinancialstatementsofGrekaEngineering&TechnologyLimitedfortheyearended31December2014whichcomprise the Consolidated Statement of Comprehensive Income, the Consolidated Statement of Financial Position, the Consolidated StatementofChangesinEquity,theConsolidatedStatementofCashFlowsandtherelatednotes.ThefinancialreportingframeworkthathasbeenappliedintheirpreparationisInternationalFinancialReportingStandards(IFRSs)asadoptedbytheEuropeanUnion.

Thisreportismadesolelytothecompany’sdirectors,asabodyinaccordancewithourengagementletter.Ourauditworkhasbeenundertakensothatwemightstatetothecompany’sdirectorsthosematterswearerequiredtostatetotheminanauditor’sreportandfornootherpurpose.Tothefullestextentpermittedbylaw,wedonotacceptorassumeresponsibilitytoanyoneotherthanthecompanyandthecompany’sdirectorsasabody,forourauditwork,forthisreport,orfortheopinionswehaveformed.

RESPECTIVE RESPONSIBILITIES OF DIRECTORS AND AUDITORSAs explained more fully in the statement of Directors’ responsibilities, the directors are responsible for the preparation of the financial statementsinaccordancewithIFRSsasadoptedbytheEuropeanUnionandforbeingsatisfiedthattheygiveatrueandfairview.Our responsibility is to audit and express an opinion on the group financial statements in accordance with International Standards on Auditing(InternationalFederationofAccountants).ThosestandardsrequireustocomplywiththeFinancialReportingCouncil’sEthicalStandardsforAuditors.

SCOPE OF THE AUDIT OF THE FINANCIAL STATEMENTSAdescriptionofthescopeofanauditoffinancialstatementsisprovidedontheFRC’swebsiteatwww.frc.org.uk/auditscopeukprivate.

OPINION ON FINANCIAL STATEMENTSInouropinionthegroupfinancialstatementsgiveatrueandfairviewofthestateoftheGroup’saffairsasat31December2014andofitslossfortheyearthenendedandhavebeenproperlypreparedinaccordancewithIFRSsasadoptedbytheEuropeanUnion.

BDO LLPChartered AccountantsLondon

8April2015

BDOLLPisalimitedliabilitypartnershipregisteredinEnglandandWales(withregisterednumberOC305127).

15

CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME

ANNUAL REPORT 2014

Year ended Yearended 31 December 31December 2014 2013 Notes US$’000 US$’000

Revenue 5,233 3,701Cost of sales (4,083) (3,349)

Gross profit 1,150 352

Selling and distribution (294) (224)Administrative expenses (2,831) (1,975)Otheroperatingcredit/(charge) 9 (24)

Totaladministrativeexpenses (3,116) (2,223)

Loss from operations 5 (1,966) (1,871)Financeincome 6 2 1Financecosts 6 (58) (3)

Loss before income tax (2,022) (1,873)

Income tax credit 10 78 71

Loss for the year from continuing operations (1,944) (1,802)

Profit/(loss)fromdiscontinuedoperations 11 241 (133)

Loss for the year (1,703) (1,935)

Other comprehensive (expense)income that may be reclassified subsequently to profit or loss:Exchange differences on translation foreign operations (95) 606

Total comprehensive expense for the year (1,798) (1,329)

Lossattributableto:–Ownersofthecompany (1,703) (1,935)

Total comprehensive income attributable to:–Ownersofthecompany (1,798) (1,329)

Basic and diluted loss per share attributable to ownersofthecompanyarisingfrom:–Continuingoperations(cents) 9 (0.47) (0.44)–Discontinuedoperations(cents) 9 0.05 (0.03)Total (0.42) (0.47)


CONSOLIDATED STATEMENT OF FINANCIAL POSITION

As at As at 31 December 31December 2014 2013 Notes US$’000 US$’000

ASSETSNon-current AssetsProperty, Plant and Equipment 12 20,738 25,407Intangibleassets 13 1,901 2,399

22,639 27,806

Current assetsInventories 14 1,978 2,009Tradeandotherreceivables 15 9,731 7,623Cash and cash equivalents 2,626 3,494

14,335 13,126

Assets held for sale 11 1,753 1,753

Total assets 38,727 42,685

LIABILITIESCurrent liabilitiesTradeandotherpayables 16 3,830 5,915Loansandborrowings 17 4,706 4,656Current tax liabilities 12 13

8,548 10,584Non current liabilitiesDeferredtaxationliabilities 18 475 599

475 599

Total liabilities 9,023 11,183

Total net assets 29,704 31,502

Capital and reservesShare capital 4 4Share premium account 35,949 35,949Foreign exchange reserve 540 635Accumulated losses (6,789) (5,086)

Total equity attributable to owners of the Company 29,704 31,502

ThesefinancialstatementswereauthorisedandapprovedforissuebytheBoardon8April2015.

17

CONSOLIDATED STATEMENT OF CHANGES IN EQUITY

ANNUAL REPORT 2014

Foreign Share Share exchange Accumulated capital premium reserve losses Total US$’000 US$’000 US$’000 US$’000 US$’000

At1January2013 – – 29 (3,151) (3,122)

Lossfortheyear – – – (1,935) (1,935)Othercomprehensiveincome:Itemsthatmaybereclassifiedsubsequentlytoprofitorloss:–Exchangedifferenceontranslationofforeignoperations – – 606 – 606

Totalcomprehensiveincome/(expense)fortheyear – – 606 (1,935) (1,329)

Capital contribution–waiverofamountsowedtoGreenDragonGasLtd. 4 35,949 – – 35,953At31December2013 4 35,949 635 (5,086) 31,502

Lossfortheyear – – – (1,703) (1,703)Othercomprehensiveincome:Itemsthatmaybereclassifiedsubsequentlytoprofitorloss:–Exchangedifferenceontranslationofforeignoperations – – (95) – (95)

Totalcomprehensiveexpensefortheyear – – (95) (1,703) (1,798)At31December2014 4 35,949 540 (6,789) 29,704

Thefollowingdescribesthenatureandpurposeofeachreservewithinowners’equity.• Sharecapital:Amountsubscribedforsharecapitalatnominalvalue.• Sharepremium:Amountsubscribedforsharecapitalinexcessofnominalvalue,includingcapitalcontributions.• Foreign exchange reserve: Foreign exchange differences arising on translating the results, assets and liabilities of foreign

operationsintothereportingcurrency.• Retaineddeficit:Cumulativenetgainsandlossesrecognizedinprofitorloss.


CONSOLIDATED STATEMENT OF CASH FLOWS

Year ended Yearended 31 December 31December 2014 2013 US$’000 US$’000

Operating activitiesLossbeforeincometax (2,022) (1,873)Profit/(loss)beforetaxfromdiscontinuingoperations 241 (133)

(1,781) (2,006)Adjustmentsfor:Depreciation 1,022 1,120Amortisation of other intangible assets 495 494Finance income (2) (1)Finance costs 58 3

Operatingcashflowsbeforechangesinworkingcapital (208) (390)

Movement in inventories (93) 114Movement in trade and other receivables 208 847Movement in trade and other payables (549) 260

Cash utilized by/generated from operations (642) 831Income tax 78 (83)

Net cash (utilized by)/generated from operating activities (564) 748

Investing activitiesPayments for purchase of property, plant and equipment (206) (1,827)Interest received 2 1

Net cash used in investing activities (204) (1,826)

Financing activitiesProceeds of short term loan 654 656Repayment of short term loan (654) –Finance costs paid (58) (3)

Net cash (used in)/from financing activities (58) 653

Net decrease in cash and cash equivalents (826) (425)Cash and cash equivalents at the beginning of the year 3,494 3,882

2,668 3,457Effect of foreign exchange rate changes (42) 37

Cash and cash equivalents at end of year 2,626 3,494

19

NOTES TO THE FINANCIAL INFORMATIONFortheyearended31December2014

ANNUAL REPORT 2014

1. GENERALGrekaEngineering&TechnologyLimited(the“Company”)wasincorporatedinCaymanIslandson18March2013undertheCompaniesLaw(2010Revision)oftheCaymanIslands.TheregisteredofficeandprincipalplaceofbusinessoftheCompanyarelocatedatPOBox472,2ndfloor,HarbourPlace,103SouthChurchStreet,GeorgeTown,GrandCaymanKY1-1106,CaymanIslands and 12/F., No. 5 Building,HuaMeilong Plaza, JingWuNan Road, Economy and TechnologyDevelopmentDistrict,Zhengzhou,PRCrespectively.

TheCompanywasestablishedasaninvestmentholdingcompanyforagroupofcompanieswhoseprincipalactivitiesconsistoftheprovisionofengineering,procurement,constructionandmanagementforinfrastructureprojectsinthePRC.Thesebusinessarehereinaftercollectivelyreferredtoasthe“Group”.

Thefinancial statements arepresented inUnited Statesdollarswhich is also the functional currencyof theCompany. ThefunctionalcurrencyofthesignificantsubsidiariesisRMB.

2. PRINCIPAL ACCOUNTING POLICIESBasis of preparationThefinancialstatementshavebeenpreparedinaccordancewithIFRSsasadoptedbytheEuropeanUnion,thatareeffectiveforaccountingperiodsbeginningonorafter1January2014.Theprincipalaccountingpoliciesadoptedinthepreparationofthefinancialstatementsaresetoutbelow.Thepolicieshavebeenconsistentlyappliedtoalltheyearspresented,unlessotherwisestated.

Thefinancialstatementshavebeenpreparedunderthehistoricalcostbasis.

On18March2013,theCompanywasincorporatedasawholly-ownedsubsidiaryofGreenDragonGasLtdOn18April2013,aspartofagroupreorganisation,theCompanyacquiredtheentiresharecapitaloffellowwholly-ownedsubsidiariesofGreenDragonGasLtd,GrekaIntegratedProductsLtd(formerlyknownasGrekaTransportandInfrastructureLtd),GrekaManufacturingLtd(formerlyknownasGrekaTechnologyandManufacturingLtd)andGrekaInformationTechnologyLtd(formerlyknownasGrekaJXULtd).

TheCompany’scontrollinginterestinGrekaIntegratedProductLtd,GrekaManufacturingLtd,andGrekaInformationTechnologyLtdwereacquiredthroughatransactionundercommoncontrol.Thecontrollingpartyofeachcompanyat18April2013wasGreenDragonGasLtd.

TheCompanyanditssubsidiariesweresubsequentlydemergedfromGreenDragonGasLtdthroughadividendinspecie.On30September2013,theCompanywasadmittedfortradingontheAlternativeInvestmentMarketoftheLondonStockExchange.



2. PRINCIPAL ACCOUNTING POLICIES (continued)

Basis of preparation (continued)

TheDirectorsnote that transactionsundercommoncontrolareoutside the scopeof IFRS3and that there isnoguidanceelsewhereinIFRScoveringsuchtransactions.

IFRSdoesnotcontainspecificguidanceontheaccountingforcommoncontroltransactions.However,FRS6(andUSGAAP)doesincludeguidanceforaccountingforgroupreconstructionsofthisnature.HavingconsideredtherequirementsofIAS8andtherelatedUKandUSguidancethetransactionbywhichtheCompanyacquireditscontrollinginterestinGrekaIntegratedProductsLtd.,GrekamanufacturingLtdandGrekaInformationTechnologyLtdwasaccountedforonamergerorpoolingofinterestbasisasifbothentitieshadalwaysbeencombined.Thecombinationwasaccountedforusingbookvalues,withnofairvalueadjustmentsmadenorgoodwillcreated.

The subsidiaries of Greka Integrated Products Ltd, GrekaManufacturing Ltd and Greka Information Technology Ltd wereconsolidatedusingtheacquisitionmethod.

ThepreparationoffinancialstatementsinconformitywithIFRSsrequirestheuseofcertaincriticalaccountingestimates.ItalsorequiresmanagementtoexerciseitsjudgmentintheprocessofapplyingtheGroup’saccountingpolicies.Theareasinvolvingahigherdegreeofjudgmentorcomplexityorareaswhereassumptionsandestimatesaresignificanttothefinancialstatementsaredisclosedinnote3tothefinancialstatements.Actualresultsmaydifferfromtheseestimates.

Theestimatesandunderlyingassumptionsarereviewedonanongoingbasis.Revisionstoaccountingestimatesarerecognisedin the period in which the estimate is revised if the revision only affects that period or in the period of revision and future periods iftherevisionaffectsbothcurrentandfutureperiods.



New and amended standards adopted by the GroupThefollowingnewstandardsandamendmentstostandardsweremandatoryforthefirsttimefortheGroupforthefinancialyearbeginning1January2014.TheimplementationofthesestandardsdidnothaveamaterialeffectontheGroup.

Impact on Standard Effective date initial application

IFRS10–ConsolidatedFinancialStatements 1January2014 NoimpactIFRS11–JointArrangements 1January2014 NoimpactIFRS12–DisclosureofInterestsinOtherEntities 1January2014 NoimpactIAS27–Amendment–SeparateFinancialStatements 1January2014 NoimpactIAS28–Amendment–InvestmentsinAssociatesandJointVentures 1January2014 NoimpactIAS32–OffsettingFinancialAssetsandFinancialLiabilities 1January2014 NoimpactIAS36–Recoverableamountsdisclosuresfornon-financialassets 1January2014 NoimpactIAS39–NovationofDerivativesandContinuationofHedgeAccounting 1January2014 Noimpact

NootherIFRSissuedandadopted,butnotyeteffective,areexpectedtohaveanimpactontheGroup’sfinancialstatements.

Thefollowingstandards,amendmentsandinterpretations,whichareeffectiveforreportingperiodsbeginningafterthedateofthesefinancialstatements,havenotbeenadoptedearly:

Standard Description Effective date

IFRIC21 Levies 17June2014IAS19 DefinedBenefitPlans(Amendments) 1February2015IFRS 111 JointArrangements(Amendments) 1January2016IAS16andIAS381 AcceptableMethodsofDepreciation 1January2016 andAmortisation(Amendments)IAS271 SeparateFinancialStatements 1January2016IFRS10andIAS281 InvestmentsinAssociatesandJointVentures(Amendments) 1January2016IFRS151 RevenuefromContractwithCustomers 1January2017IFRS91 FinancialInstruments 1January2018IAS 11 PresentationofFinancialStatements(Amendments) 1January2016IFRS10,12andIAS28 InvestmentEntities(Amendments) 1January2016AnnualImprovementstoIFRSs (2010-2012Cycle) 1February2015AnnualImprovementstoIFRSs (2011-2013Cycle) 1January2015Annual Improvements to IFRSs1 (2012-2014Cycle) 1January2016

1 Not yet endorsed by the EU




New and amended standards adopted by the Group (continued)

TheDirectorshavenotfullyassessedtheimpactofallstandardsbutdonotexpectthemtohaveamaterialimpact.

Foreign currency translationTransactionsenteredintobyanyofthegroupentitiesinacurrencyotherthanthecurrencyoftheprimaryeconomicenvironmentinwhichitoperates(the“functionalcurrency”)arerecordedattheexchangeratesrulingwhenthetransactionsoccur.Foreigncurrencymonetaryassetsandliabilitiesaretranslatedattheratesrulingatthebalancesheetdate.Non-monetaryitemscarriedat fair value that are denominated in foreign currencies are retranslated at the rates prevailing on the date when the fair value wasdetermined.Non-monetaryitemsthataremeasuredintermsofhistoricalcostinaforeigncurrencyarenotretranslated.Exchange differences arising on the retranslation of unsettled monetary assets and liabilities are recognised immediately in the consolidatedstatementofcomprehensiveincome.

Exchange differences arising on the settlement of monetary items, and on the translation of monetary items, are recognised in theconsolidatedstatementofcomprehensiveincomeintheperiodinwhichtheyarise.Inrespectofintercompanytransactions,exchange differences arising on such items are recorded in the consolidated statement of comprehensive income unless the loansaredeemedtobeaspermanentasequityandnotsubjecttorepaymentintheforeseeablefuture.

Onconsolidation, the resultsofoverseasoperationsare translated into thepresentationcurrencyof theGroup (i.e.UnitedStatesdollars)attheaverageexchangeratesfortheperiod,unlessexchangeratesfluctuatesignificantlyduringtheyear, inwhichcase,therateapproximatingtothoserulingwhenthetransactionstookplaceisused.Allassetsandliabilitiesofoverseasoperationsaretranslatedattheraterulingattheendofthereportingdate.Exchangedifferencesarisingontranslatingtheopening net assets at opening rate and the results of overseas operations at actual rate are recognised directly in equity (the “foreignexchangereserve”).

Property, plant and equipmentProperty,plantandequipmentarestatedatcostlessaccumulateddepreciationandanyaccumulatedimpairmentlosses.Property,plant and equipment are depreciated so as to write off their costs net of expected residual value over their estimated useful lives onastraight-linebasis.Theusefullivesandresidualvaluearereviewed,andadjustedifappropriate,ateachreportingdate.Theusefullivesofproperty,plantandequipmentareasfollows:

Buildingsandstructures: 20yearsMotorvehicles: 5yearsFixtures,fittingsandequipment: 5yearsPlantandmachinery 5-15yearsandUnitsofProductionLeaseholdimprovements 2-5years



Property, plant and equipment (continued)

Theunitofproductioncalculationmultipliestheassetnetbookvaluebytheratiooftheactivityrelativetotheestimatetotallifeoftheassetbasedondesigncapacityandempiricalnorms.

An asset is written down immediately to its recoverable amount if its carrying amount is higher than the asset’s estimated recoverableamount.Thecostofreplacingpartofanitemofproperty,plantandequipmentisrecognisedinthecarryingamountoftheitemifitisprobablethatthefutureeconomicbenefitsembodiedwithinthepartwillflowtotheGroupanditscostcanbemeasuredreliably.Thecostsoftheday-to-dayservicingofproperty,plantandequipmentarerecognisedinprofitorlossasincurred.

Assets under construction are transferred to property, plant and equipment when they are available for use and depreciation begins.

Thegainorlossondisposalofproperty,plantandequipmentisthedifferencebetweenthenetsaleproceedsanditscarryingamount,andisrecognisedintheprofitorlossstatementondisposal.

Impairment of property plant and equipmentAttheendofthereportingperiod,theGroupreviewsthecarryingamountsofproperty,plantandequipmenttodeterminewhether there is any indication that these assets have suffered an impairment loss or an impairment loss previously recognised nolongerexistsormayhavedecreased.

Iftherecoverableamount(i.e.thegreaterofthefairvaluelesscoststosellandvalueinuse)ofanassetisestimatedtobelessthanitscarryingamount,thecarryingamountoftheasset isreducedto itsrecoverableamount.Animpairment loss isrecognisedasanexpenseimmediately.

Whereanimpairmentlosssubsequentlyreverses,thecarryingamountoftheassetisincreasedtotherevisedestimateofitsrecoverable amount, but so that the increased carrying amount does not exceed the carrying amount that would have been determinedhadnoimpairmentlossbeenrecognisedfortheassetinprioryears.Areversalofanimpairmentlossisrecognisedasincomeimmediately.




Intangible assetsIntangible assets that are acquired by the Group are measured at cost less accumulated amortisation and accumulatedimpairment losses. Subsequent expenditure on capitalised intangible assets is capitalised onlywhen it increases the futureeconomicbenefitsembodiedinthespecificassettowhichitrelates.Allotherexpenditureisrecognisedintheconsolidatedstatementofcomprehensiveincomeasincurredandincludedinadministrativeexpenses.

Amortisation is recognised in the consolidated statement of comprehensive income on a straight line basis over the estimated usefullivesofintangibleassets.Intangibleassetsareamortisedfromthedatetheyareavailableforuse.Theestimatedusefullivesareasfollows:

Patents 10 years

Research and developmentResearchcostsareexpensedasincurred.DevelopmentexpendituresonanindividualprojectarerecognisedasanintangibleassetwhentheGroupcandemonstrate:thetechnicalfeasibilityofcompletingtheintangibleassetsothatitwillbeavailableforuseorsale;itsintentiontocompleteanditsabilitytouseorselltheasset;howtheassetwillgeneratefutureeconomicbenefits;theavailabilityofresourcestocompletetheasset;andtheabilitytomeasurereliablytheexpenditureduringdevelopment.Followinginitial recognition of the development expenditure as an asset, the cost model is applied requiring the asset to be carried at cost lessanyaccumulatedamortisationandaccumulatedimpairmentlosses.Amortisationoftheassetbeginswhendevelopmentiscompleteandtheassetisavailableforuse.Itisamortisedovertheperiodofexpectedfuturebenefit.Amortisationisrecordedincostofsales.Duringtheperiodofdevelopment,theassetistestedforimpairmentannually.

InventoriesInventoriesareinitiallyrecognisedatcost,andsubsequentlyatthelowerofcostandnetrealisablevalue.Costcomprisesallcostsofpurchase,costofconversionandothercostsincurredinbringingtheinventoriestotheirpresentlocationandcondition.Costiscalculatedusingtheweightedaveragemethod.Netrealisablevaluerepresentstheestimatedsellingpriceintheordinarycourseofbusinesslesstheestimatedcostsnecessarytomakethesale.

Segment reportingOperatingsegmentsarereportedinamannerconsistentwiththeinternalreportingprovidedtothechiefoperatingdecision-maker.ThechiefoperatingdecisionmakerhasbeenidentifiedastheBoard.



TaxationTaxontheprofitorlossfortheperiodcomprisescurrentanddeferredtax.Taxisrecognisedintheconsolidatedprofitorlossexcepttotheextentthatitrelatestoitemsrecogniseddirectlyinequity,inwhichcaseitisrecognisedinequity.

Current tax is the expected tax payable on the taxable income for the period, using tax rates enacted or substantively enacted attheendofeachreportingperiod,andanyadjustmenttotaxpayableinrespectofpreviousyears.

Deferred tax assets and liabilities are recognised where the carrying amount of an asset or liability in the consolidated statement of financial position differs to its tax base, except for differences arising on the initial recognition of an asset or liability in a transactionwhichisnotabusinesscombinationandatthetimeofthetransactionaffectsneitheraccountingortaxableprofit;and investments in subsidiaries where the group are able to control the timing of the reversal of the difference and it is probable thatthedifferencewillnotreverseintheforeseeablefuture.

Recognition of deferred tax assets is restricted to those instances where it is probable that taxable profit will be available against whichthedifferencecanbeutilised.

The amountof the asset or liability is determinedusing tax rates that havebeen enactedor substantively enactedby thereportingdateandareexpectedtoapplywhenthedeferredtaxliabilities/assetsaresettled/recovered.Deferredtaxbalancesarenotdiscounted.

Deferred tax assets and liabilities are offset when the group has a legally enforceable right to offset current tax assets and liabilitiesandthedeferredtaxassetsandliabilitiesrelatetotaxesleviedbythesametaxauthorityoneither:

• thesametaxablegroupcompany;or

• differentgroupentitieswhichintendeithertosettlecurrenttaxassetsandliabilitiesonanetbasis,or

• to realise the assets and settle the liabilities simultaneously, in each future period inwhich significant amounts ofdeferredtaxassetsorliabilitiesareexpectedtobesettledorrecovered.




Non-current assets held for sale and discontinued operationsNon-current assets and disposal groups classified as held for sale aremeasured at the lower of carrying amount and fairvaluelesscoststosell.Non-currentassetsanddisposalgroupsareclassifiedasheldforsaleiftheircarryingamountswillberecoveredthroughasaletransactionratherthanthroughcontinuinguse.Thisconditionisregardedasmetonlywhenthesaleishighlyprobableandtheassetordisposalgroupisavailableforimmediatesaleinitspresentcondition.Managementmustbecommitted to the sale, which should typically be expected to qualify for recognition as a completed sale within one year from thedateofclassification.

In the consolidated income statement of the reporting period, and of the comparable period of the previous year, income and expenses from discontinued operations are reported separate from income and expenses from continuing activities, down to the levelofprofitaftertaxes.Theresultingprofitorloss(aftertaxes)isreportedseparatelyintheincomestatement.

Property,plantandequipmentandintangibleassetsonceclassifiedasheldforsalearenotdepreciatedoramortised.

Revenue recognitionRevenue is recognised when services are provided and the amount of the revenue and associated costs incurred in respect of the relevanttransactioncanbereliablymeasured.

Revenuegeneratedfromthesaleofgasequipmentisrecognisedontransferofthesignificantrisksandrewardsofownershiphavepassed.Therisksandrewardspasstothecustomerswhenthegasequipmentisdeliveredandacceptedbythecustomer.Certaincontractsprovidethat5-10%ofthecontractpriceiswithheldforuptooneyearafterinstallationandacceptancebythecustomerasaqualityguaranteeperiod.Revenueisrecognisedinrespectofthisamountastherearenoongoinggoodsorservicestoperformandthereisnohistoryofclaimsundertheguaranteeperiod.

Revenue generated from the provision of infrastructure services is recognised based on the measured amount of gas processed andpowersuppliedandcontractualprices.Measuredamountsarebasedonphysicalquantitiesofgasprocessedandpowersupplied.

Interestincomeisaccruedonatimebasisontheprincipaloutstandingattheapplicableinterestrate.



Financial instruments(i) Financial assets

Loans and receivables

TheGroup’sreceivablescomprisetradeandotherreceivables.

Theseassetsarenon-derivativefinancialassetswithfixedordeterminablepaymentsthatarenotquotedinanactivemarket.Theyareprincipallytradeandotherreceivablesandalsoincorporateothertypesofcontractualmonetaryasset.Loans and receivables are recognised initially at fair value and subsequentlymeasured at amortised cost using theeffectiveinterestmethod,lessprovisionforimpairment.

Aprovisionforimpairmentisestablishedwhenthereisobjectiveevidencethattheassetwillnotbecollectibleinfullaccordingto theoriginal termsof the instruments.Significantfinancialdifficultiesof thecustomers,probability thatthecustomerswillenterbankruptcyorfinancialreorganisation,anddefaultordelinquencyinpaymentsareconsideredindicatorsthattheloansandreceivablesareimpaired.Theamountoftheprovisionisthedifferencebetweentheasset’scarryingamountandthepresentvalueoftheestimatedfuturecashflowsdiscountedattheoriginaleffectiveinterestrate.Thecarryingamountoftheassetisreducedthroughtheuseofanallowanceaccount,andtheamountofthelossisrecognisedintheconsolidatedstatementofcomprehensiveincome.

Whenloansandreceivablesareuncollectible,theyarewrittenoffagainsttheallowanceaccountforloansandreceivables.Subsequent recoveries of amounts previously written off are credited to the consolidated statement of comprehensive income,subjecttoarestrictionthatthecarryingamountoftheassetatthedatetheimpairmentisreverseddoesnotexceedwhattheamortisedcostwouldhavebeenhadtheimpairmentnotbeenrecognised.

Cash and cash equivalents

Cash includescashonhandanddemanddepositswithanybankorotherfinancial institution.Cashequivalentsareshort-term,highly liquid investmentsthatarereadilyconvertibletoknownamountsofcashwhicharesubjecttoaninsignificantriskofchangesinvalue.




Financial instruments (continued)

(ii) Financial liabilitiesFinancial liabilities held at amortised cost

Tradepayablesandothershort-termmonetaryliabilitiesarerecognisedinitiallyatfairvalueandsubsequentlycarriedatamortisedcostusingtheeffectiveinterestratemethod.

Loanandborrowingsareinitiallyrecognisedattheamountadvancednetofanytransactioncostsdirectlyattributabletotheissueoftheinstrument.Suchinterestbearingliabilitiesaresubsequentlymeasuredatamortisedcostusingtheeffective interest method, which ensures that any interest expense over the period to repayment is at a constant rate on thebalanceoftheliabilitycarriedintheconsolidatedstatementoffinancialposition.“Interestexpense”inthiscontextincludes initial transaction costs and premium payable on redemption, as well as any interest or coupon payable while theliabilityisoutstanding.

Employee benefits(i) Defined contribution pension plan

Contributions to defined contribution pension plan are recognised as an expense in the consolidated statement of comprehensiveincomeastheservicesgivingrisetothecompany’sobligationsarerenderedbytheemployees.

TheemployeesoftheoperationsinthePeople’sRepublicofChina(the“PRC”)arerequiredtoparticipateinacentralpensionschemeoperatedbythelocalmunicipalgovernment.TheGroupisrequiredtocontributeacertainpercentageofitspayrollcoststothecentralpensionscheme.Thecontributionspayablearechargedtotheconsolidatedstatementof comprehensive income when they become payable in accordance with the rules of the central pension scheme and aredisclosedunderEmployer’snationalsocialsecuritycontributionsinnote7.

(ii) Other benefitsOtherbenefits,beingbenefitsinkind,arechargedtotheconsolidatedstatementofcomprehensiveincomeintheperiodtowhichtheyrelate.

LeasesWheresubstantiallyalloftherisksandrewardsincidentaltoownershipareretainedbythelessor(an“operatinglease”),thetotalrentalspayableundertheleasearechargedtotheprofitorlossonastraight-linebasisovertheleaseterm.

Thelandandbuildingselementsofpropertyleasesareconsideredseparatelyforthepurposeofleaseclassification.


3. CRITICAL ACCOUNTING ESTIMATESTheGroupmakesestimatesandassumptionsregardingthefuture.Estimatesandjudgmentsarecontinuallyevaluatedbasedon historical experiences and other factors, including expectations of future events that are believed to be reasonable under the circumstances. In the future, actual experiencemaydeviate from these estimates and assumptions. The estimates andassumptionsthathaveasignificantriskorcauseamaterialadjustmenttothecarryingamountsofassetsandliabilitiesduringtheyearsareasfollows:

Impairment of property plant and equipmentIn performing an impairment evaluation, management estimate the value in use of assets using future discounted net cash flowsfromtheuseandeventualdispositionofpropertyplantandequipment,groupedatthelowestlevelthatcashflowscanbe identified.Thereareconsideredtobetwocashgeneratingunits inthebusiness,gasequipmentsalesand infrastructureservices.Ifthesumoftheestimatedfuturediscountednetcashflowsislessthanthecarryingamountofthepropertyplantandequipmentfortheseassetgroupinglevels,thenanimpairmentchargeisrecognised.Theamountofanimpairmentchargewouldbemeasuredasthedifferencebetweenthecarryingamountandthevalueinuseoftheseassets.Wedidnotrecordanimpairmentchargeonanypropertyplantandequipmentforanyoftheyearsended31December2014or2013.

Thevalue-in-usecalculationsinvolveestimatesregardingcustomerdemand,assetusefullife,pricing,expenditures,PRCgrowthrates anddiscount rates. The recoverable amount of the integratedproduction facility indicates headroomof 10%and isdependentonestimatedvolumegrowth in thenear term.TheBoardconsider thesegrowthratesachievablebasedonthesecuredcontractsandtheexpectedexpenditureplansofkeycustomers,includingrelatedparties.Inaddition,thelongtermgrowthratesof10%areconsideredappropriateforthePRCCBMindustry.

Therecoverableamountofthegassalesequipmentcashgeneratingunitindicatesheadroomof5%Thisisdependentuponanticipated growth in equipment sales which the Board considers achievable based on factors including order pipelines from relatedparties.

Carrying value of trade receivablesManagementreviewedthecarryingamountoftradereceivablesatyearendtodeterminewhetherthereareobjectiveindicatorsof impairment.Judgment is involved inassessingtheappropriate levelofpotentialprovisioning.Managementreviewedthereceivables and assessed the need for a provision based on the circumstances of each individual balance. Circumstancesconsidered included the age of the debt adherence to contractual payment terms, the credit worthiness and financial condition ofthecounterpartyandthepaymenthistoryofthecustomer.Asat31December2014,wehaverecognisedaprovisionof$353,000againsttradereceivables.



3. CRITICAL ACCOUNTING ESTIMATES (continued)

DepreciationIntegrated production facility equipment is depreciated on a unit of production basis, which requires estimates of total throughput capacitytoassesseconomicusefullife.

4. REVENUE AND SEGMENT INFORMATIONTheGroupdeterminesitsoperatingsegmentsbasedonreports,reviewedbythechiefoperatingdecision-makers(“CODMs”),whicharealsousedtomakestrategicdecisions.

TheGroupreportsitsoperationsastworeportablesegments:gasequipmentsalesandtheprovisionofcontractinfrastructureservicesinthePRC.ThedivisionoftheengineeringandtechnologyoperationsintotworeportablesegmentsisreflectiveofhowtheCODMsmanagethebusiness.

Theaccountingpoliciesofthereportablesegmentsarethesameasthosedescribedinthesummaryofprincipalaccountingpolicies(seeNote2).Weevaluatetheperformanceofouroperatingsegmentsbasedonrevenuesfromexternalcustomersandsegmentalprofits.

Year ended 31 December 2014

Gas Consolidated equipment Infrastructure from continuing sales services Intercompany operations US$’000 US$’000 US$’000 US$’000

Revenue 1,973 3,734 (474) 5,233Cost of sales (1,488) (3,069) 474 (4,083)Grossprofit 485 665 – 1,150Lossbeforetax (1,628) (394) – (2,022)


4. REVENUE AND SEGMENT INFORMATION (continued)

As at 31 December 2014

Transportation Gas Services equipment Infrastructure (Discontinued sales services Operations) Intercompany Consolidated US$’000 US$’000 US$’000 US$’000 US$’000

Segment assets 5,773 32,632 1,753 (1,431) 38,727Segment liabilities 11,024 35,321 – (37,322) 9,023

YearEnded31December2013

Gas Consolidated equipment Infrastructure from continuing sales services Intercompany operations US$’000 US$’000 US$’000 US$’000

Revenue 2,423 1,400 (122) 3,701Costofsales (1,818) (1,649) 118 (3,349)Grossprofit/(loss) 605 (249) (4) 352Lossbeforetax (1,378) (495) – (1,873)

Asat31December2013

Transportation Gas Services equipment Infrastructure (Discontinued sales services Operations) Intercompany Consolidated US$’000 US$’000 US$’000 US$’000 US$’000

Segmentassets 7,702 33,685 1,753 (455) 42,685Segmentliabilities 10,033 37,471 – (36,321) 11,183

Gasequipmentsalesrepresentthenetinvoicedvalueofgasequipmentsalesprovidedto73(2013:63)customersfortheyear.Infrastructure services represent sales towhollyowned subsidiariesof theGreenDragonGasgroupand theGrekaDrillingLimitedgroup.



5. LOSS FROM OPERATIONSLossfromcontinuingoperationsisstatedaftercharging:

2014 2013 US$’000 US$’000

Auditor’s remuneration 34 58Staffcosts(note7) 1,454 1,486Depreciation of property, plant and equipment 1,022 1,120Amortisation of intangible assets 495 494Operatingleaseexpense(property) 126 150Lossondisposalofproperty,plantandequipment – –Foreignexchangegains/(losses) (1) –

6. FINANCE INCOME/EXPENSES 2014 2013 US$’000 US$’000

Bankinterestincome 2 1

Bankinterestexpenses 58 3

7. STAFF COSTS 2014 2013 US$’000 US$’000

Staffcosts(includingdirectors’remuneration(note8)comprise:Wagesandsalaries 1,050 1,133Employer’s national social security contributions 327 329Other benefits 77 24

1,454 1,486


8. DIRECTORS’ REMUNERATION 2014 2013 US$’000 US$’000

Executive Directors:RandeepGrewal 250 63

Independent Non-executive Directors:SanjayKrishnaSaxena 40 10FrederickBryanSmart 40 10

330 83

No share options or similar equity based share awards have been granted to directors or employees during the current or prior year.

9. LOSS PER SHAREThecalculationofthebasicanddilutedearningspershareattributabletotheownersoftheCompanyisbasedonthefollowingdata:

2014 2013 US$’000 US$’000

Lossfortheyear–Continuingoperations (1,944) (1,802)–Discontinuingoperations 241 (133)

Lossforthepurposeofbasicanddilutedlosspershare (1,703) (1,935)

DenominatorsNumber of shares used in basic and diluted loss calculations 409,622,133 409,622,133

Basicanddilutedlosspershare(cents)–Continuingoperations (0.47) (0.44)–Discontinuedoperations 0.05 (0.03)

Totalused (0.42) (0.47)



9. LOSS PER SHARE (continued)

Therewerenopotentiallydilutiveinstrumentsin2014and2013.ThebasicanddilutedlosspershareareequalastheCompanyhasnodilutiveinstruments.Therehavebeennosharesorpotentiallydilutiveinstrumentsissuedbetweenyear-endandthedatethesefinancialstatementswereapproved.The2013comparativeiscalculatedasiftheshareslegallyissuedduring2013hadbeeninissuesincethestartofthatyear.

10. TAXATION 2014 2013 US$’000 US$’000

Current taxCharges for current year 46 53

Deferred tax liabilitiesReversal of temporary difference (124) (124)

Income tax credit (78) (71)

ThereasonsforthedifferencebetweentheactualtaxchargefortheyearspresentedandthestandardrateofcorporationtaxinthePRC,astheprimaryoperatingenvironment,appliedtothelossfortheyearspresentedareasfollows:

2014 2013 US$’000 US$’000

Lossbeforeincometax–continuingoperations (2,022) (1,873)Profit/(loss)beforeincometax–discontinuedoperations 241 (133)Lossbeforeincometax (1,781) (2,006)

Expected tax credit based on the standard rate ofcorporationtaxinthePRCof25%(2013:25%) (445) (502)

Effectof:

Taxeffectofrevenuenottaxablefortaxpurposes 22 –Movement in unrecognized tax losses and other temporary differences 345 431

Income tax credit on continuing operations (78) (71)Income tax charge/credit on discontinued operations – –


10. TAXATION (continued)

TheCompanyisincorporatedintheCaymanIslandsandisnotsubjecttoincometax.TheprimaryoperatingcompaniesareincorporatedinthePRCandaresubjectto25%taxrates.Thegrouphasunrecognisedlossesof$1,274,075(2013:$763,393)whicharenotrecognisedgivenuncertaintiesinfuturetaxableprofits.

11. ASSETS HELD FOR SALE/DISCONTINUED OPERATIONSThe strategy of theGreka Engineering is to develop its engineering and technology operations. In order to focus on thedeliveryofthisstrategy,priortothedemergerfromGreenDragonGasLtd,during2012oneoftheCompany’ssubsidiariesagreedaproposaltosellitsnon-coretransportationoperationstosubsidiariesbeingretainedwithintheGreenDragonGasLtdgroupfollowingthedemerger.Subsequently,itenteredalegalagreementwithGreenDragonGasLimitedon1July2013todisposeofmotorvehiclesandequipmentfor$1,753,357ofcashconsiderationinlinewiththepreviouslyagreedproposals.Notwithstanding the period that has elapsed between meeting the requirements for classification as assets held for sale, the Groupremainscommittedtothedisposalandexpectsitcompletioninduecourse.Thecompletionofthetransactionissubjecttoobtainingnecessarylegislativeapprovalsandthoseapprovalsareprogressing.

ThefollowingarethetotalsforthemajorclassesofassetsrelatingtotheGrekaEngineering’s’stransportationoperationattheendofthereportingperiod:

2014 2013 US$’000 US$’000

Motor vehicles 1,733 1,733Fixtures, fittings and equipment 17 17Plant and machinery 3 3

1,753 1,753



11. ASSETS HELD FOR SALE/DISCONTINUED OPERATIONS (continued)

TheprofitondiscontinuedoperationsintheConsolidatedStatementofComprehensiveIncomecanbeanalysed,asfollows:

2014 2013 US$’000 US$’000

Transportationservicerevenue 387 589Cost of sales (146) (553)Administrative expenses – (169)

Profit/(Loss)beforeandaftertaxation 241 (133)

TheConsolidatedStatementofCashFlowscontainsthefollowingelementsrelatedtodiscontinuingoperations:

2014 2013 US$’000 US$’000

Netcashflowsattributabletooperatingactivities 241 (133)Netcashflowsattributabletoinvestingactivities – (482)Netcashflowsattributabletofinancingactivities – –

TheassetsheldforsaleareclassifiedwithinthetransportationservicessegmentinNote4.


12. PROPERTY, PLANT AND EQUIPMENT Buildings Fixtures, and Motor fittings and Plant and Leasehold Construction structures vehicles equipment machinery improvements in process Total US$’000 US$’000 US$’000 US$’000 US$’000 US$’000 US$’000

CostAt1January2013 1,335 128 221 5,005 234 18,761 25,684Additions 21 498 13 601 73 621 1,827Transfers – – – 15,245 – (15,245) –Exchangemovement 42 39 7 412 8 121 629Transferstoassetsheldforsale – (369) – – – – (369)

At31December2013 1,398 296 241 21,263 315 4,258 27,771Additions 10 – 23 173 – 124 330Disposals – – (16) – – (2,651) (2,667)VATadjustment – – – (1,650) (18) – (1,668)Exchangemovement (5) (1) (8) (76) (1) (26) (116)

At31December2014 1,403 295 240 19,710 296 1,706 23,650

DepreciationAt1January2013 70 75 88 869 79 – 1,181Chargefortheyear 65 119 136 701 99 – 1,120Exchangemovement 3 13 5 38 4 – 63

At31December2013 138 207 229 1,608 182 – 2,364Chargefortheyear 67 26 (38) 950 17 – 1,022Eliminatedondisposals – – (14) – – – (14)VATadjustment – – – (457) – – (457)Exchangemovement – 1 – (4) – – (3)

At31December2014 205 234 177 2,097 199 – 2,912

Net book valueAt31December2014 1,198 61 63 17,613 97 1,706 20,738

At31December2013 1,260 89 12 19,655 133 4,258 25,407



12. PROPERTY, PLANT AND EQUIPMENT (continued)

Loans and borrowings of US$653,702 (2013: $656,000) (note 17) are secured by buildings and structures of theGroup.Constructioninprocessinbothyearsrelatestotheon-goingworkbeingundertakenontheGroup’sinfrastructurefacilitiesandpipelines.Thedisposalof$2,651,063referstoassetsacquiredfromrelatedpartiesin2013whichhavebeenreturnedatcostfollowingtheidentificationoffaultsintheassets.Theoriginalassetswereprocuredforthegroupbytherelatedpartyfromthirdpartysuppliersandfullreimbursementofcostshasbeenagreed.TheVATadjustmentof$1,649,716referstoirrecoverableVATpreviouslycapitalised.FurthertochangestoPRClegislation,theVATbecauserecoverableandanadjustmenthasbeenrecordedaccordingly.

13. INTANGIBLE ASSETS US$’000

CostAt1January2014 4,949Exchangealignment (3)

At31December2014 4,946

Accumulated amortisationAt1January2013 2,056Chargefortheyear 494

At31December2013 2,550Chargefortheyear 495


Net book valueAt31December2014 1,901


IntangibleassetsrelatetopatentsacquiredbytheGroup.Theyareamortisedoveralifeof10years.


14. INVENTORIES 2014 2013 US$’000 US$’000

Raw materials and consumables 719 1,243Work-in-progress 1,037 27Finished goods 222 739

1,978 2,009

The amount of cost of sales recognised in respect of inventories utilised totalled $2,217,000 (2013: $1,695,000)which isrecognisedincostofsales.Therehasbeennosignificantimpairmentofinventoriesineitheryear.

15. TRADE AND OTHER RECEIVABLES 2014 2013 US$’000 US$’000

Tradereceivables 1,236 1,318Prepayments 525 575Other receivables 4,028 4,024Amountsduefromrelatedparties(note21) 3,942 1,706

9,731 7,623

Thefairvaluesoftradeandotherreceivablesapproximatetheirrespectivecarryingamountsattheendofeachreportingperiodsduetotheirshortmaturities.Theaveragetermsoftradeare1yearbutcertaincustomershaveextendedcreditterms.Tradereceivablesof$1,029,000arepastdueandnotimpaired(2013:$1,318,000).Aprovisionof$350,909hasbeenraisedagainsttradereceivablesconsideredtobepastdueandimpaired(2013:$103,000).

TheGrouphasenteredintoasingleagreementwithAoweiInternational(H.K)Co.,Limited(AwoeiHK)HenanBoaoTradingCo.,Ltd.(“HenanBoao”)in2012wherebyGrekaIntegratedProductsLtd(awhollyownedsubsidiaryofGrekaEngineeringandTechnologyLimited)hasprovidedUS$4,000,000toAwoeiHKwithHenanBoaoprovidingaRMBloanfacilityofequalvaluetoGongyiGrekaTransportCompanyLimited,anotherwhollyownedsubsidiaryoftheGroup,aspartofaforeigncurrencyarrangement.Theloanshavethesamesettlementdateandareunsecuredandrepayableondemand.Amarginbasedfeewaspayableaspartofthetransaction.AwoeiHKandHenanBoaoareunrelatedtotheGroup.



16. TRADE AND OTHER PAYABLES 2014 2013 US$’000 US$’000

Tradepayables 1,817 1,238Other current liabilities 260 4,609Amountsduetorelatedparties(note21) 1,753 68

3,830 5,915

Tradeandotherpayablesareexpectedtobesettledwithinoneyear.Their fairvaluesapproximatetheir respectivecarryingamountsattheendofeachreportingperiodsduetotheirshortmaturities.

17. LOANS AND BORROWINGS 2014 2013 US$’000 US$’000

Loansandborrowing–secured 4,706 4,656

On11April2012,GTIG,GrekaIntegratedProducts,HenanBoaoTradingCoLimitedandAoweiInternational(H.K.)Co.,Limited(AoweiHK)enteredintoaloanagreement,pursuanttowhichHenanBoaoTradingCoLimitedmadeavailablealoanfacilityintheamountoftheRMBequivalentofUS$4,000,000.ThefacilityisfullydrawnandisrepayableondemandbutismatchedbyaUS$4,000,000receivable.Furtherdetailsareinprovidedinnote15.

Includedwithin loans andborrowings is a bank loanofUS$653,702 (2013: $656,000)which is securedby buildings andstructures(note12)withabookvalueofUS$1,197,330(2013:US$1,265,000).


18. DEFERRED TAXATION 2014 2013 US$’000 US$’000

Deferred tax liabilitiesAt the beginning of the year 599 723Reversal of temporary differences (124) (124)

At the end of the year 475 599

RecogniseddeferredtaxliabilitiesatPRCrateof25%Deferredtaxassetsandliabilitiesareattributabletothefollowing:Accelerated depreciation 475 599

475 599

TaxlossesinthePRCexpireafter5years.TheGrouphasnotoffsetdeferredtaxassetsandliabilitiesacrossdifferentjurisdictions.

19. SHARE CAPITAL Authorised Issued and fully paid No.ofshares US$’000 No.ofshares US$’000

At1January2013 – – – –Issue of an ordinary share as subscriber share upon incorporation oftheCompanyofUS$0.00001each 5,000,000,000 50 1 –Placementofsharesof409,622,132 on18April2013 – – 409,622,132 4

Issueofanordinaryshare– waiverofliabilities – – 1 –

Surrender of an ordinary share fornilconsideration – – (1) –

At31December2013and2014 5,000,000,000 50 409,622,133 4



19. SHARE CAPITAL (continued)

TheauthorisedsharecapitaloftheCompanyonincorporationwasUS$50,000dividedinto5,000,000,000ordinarysharesofUS$0.00001each,ofwhichonesharewasissuedtothesubscriberofthememorandumofassociation.

Uponincorporation,theCompanyissuedonesubscribershareatpar.On18April2013thesoledirectoratthattime,RandeepGrewal,approvedthetransferoftheonesubscribersharefromInternationalCorporationServicesLtd.toGreenDragonGasLtd.On18April2013,theCompanyacquiredtheentireissuedsharecapitalofGrekaIntegratedProducts,GrekaInformationTechnologyandGrekaManufacturingfromGrekaChinaLtd.aspartofagrouprestructuring, inconsiderationforwhich itissuedandallottedasfullypaidanadditional409,622,132sharestoGreenDragonGasLtd.On19September2013GrekaGasChinaLtd.subscribedforoneadditionalshareinthecapitaloftheCompanyinsatisfactionofcertaininter-companydebtsoutstandingintheamountofUS$35,953,235.31.Followingissue,thisonesharewassoldandtransferredtoGreenDragonGasLtd.ToensurethattheexactandcorrectnumberofsharesareinissueinthecapitaloftheCompany,GreenDragonGassurrenderedoneshareinthecapitaloftheCompanyfornoconsiderationon19September2013.

Subsequently,thesharesoftheCompanyweredistributedtotheshareholdersofGreenDragonGasLtd.,bywayofadividendinspecie.

20. SUBSIDIARIES Country of Name incorporation Ownership% Principal activities Direct Indirect

GrekaTechnologyandManufacturingLtd. BritishVirginIslands 100% – Investmentholding

ZhengzhouGrekaTechnology People’sRepublicofChina – 100% Supplyanddistribution DevelopmentLtd. ofgascontrolsystems

ZhengzhouGrekaPetro-EquipmentLtd. People’sRepublicofChina – 100% Supplyanddistribution of gas equipment

GrekaTransportandInfrastructureLtd. BritishVirginIslands 100% – Investmentholding

HenanGongyiGrekaTransportation People’sRepublicofChina – 100% Provisionofinfrastructure Co.,Ltd. services

ShanxiGrekaIntegratedProduction People’sRepublicofChina – 100% Provisionofinfrastructure FacilitiesCo.,Ltd services


21. RELATED PARTY TRANSACTIONSGreenDragonGasLtd(“GDG”)isarelatedpartyastheCompany’sshareholderduringpartoftheyearandbyvirtueofcommondirectorshipandcontrol.TheultimatecontrollingpartyisRandeepGrewal.

a) Demerger from Green Dragon GasTheCompanywas incorporated as a new subsidiary ofGDG inMarch 2013. In 2013, theCompany acquired theentiresharecapitaloffellowwholly-ownedsubsidiariesofGDGasdetailedinnote2andissuedanordinaryshareasconsiderationfor liabilities totheGDGgroupasdetailed innote19.Subsequently,GDGdemergedtheengineeringdivision(i.e.thenewconsolidatedgroupofGrekaEngineeringandTechnology)bymeansofadividendinspecieofitssharesintheCompany.

b) Agreement to sell transportation businessTheGrouphasenteredintoanagreementtosellitstransportationbusinesstoGDG.Furtherdetailsareincludedinnote11.

c) Amounts due from/to related parties and corresponding transactions:TherelatedpartiesoftheGroup,whicharenotedbelow,arecompaniesthatareallfellowsubsidiariesofGreenDragonGasLimitedwhichareundercommonmanagementandcontrol.

Amountsduefrom/torelatedpartiescomprise:

2014 2013 US$’000 US$’000

Amountsduefromrelatedcompanies:–ZhengzhouGrekaGasCo.,Ltd 1,904 2–Greka(Zhengzhou)TechnicalServicesCo.,Ltd 53 33–GrekaEnergy(International)B.V. 1,518 1,405–PindingshanSinoenergyLtd 467 266

Totaloftheabovewhichisincludedinotherreceivables(note15) 3,942 1,706

Amountsduetorelatedcompanies(note(i)):–GrekaGasChinaLtd – 62–GrekaEnergy(International)B.V. – 6–GrekaGasDistributionLtd 1,753 –

Totaloftheabovewhichisincludedintradeandotherpayables(note16) 1,753 68



21. RELATED PARTY TRANSACTIONS (continued)

c) Amounts due from/to related parties and corresponding transactions: (continued)

Notes:(i) Thesebalancesareunsecured,interest-freeandarerepayableondemand.

Relatedpartytransactionscomprise:

2014 2013 US$’000 US$’000

Equipmentsalestorelatedcompanies:–ZhengzhouGrekaGasCo.,Ltd 104 123–Greka(Zhengzhou)TechnicalServicesCo.,Ltd 14 125–GrekaEnergy(International)B.V. – 90–PindingshanSinoenergyLtd 1 16

Provisionofinfrastructureservicestorelatedcompanies: ––ZhengzhouGrekaGasCo.,Ltd – 337–Greka(Zhengzhou)TechnicalServicesCo.,Ltd 123 115–GrekaEnergy(International)B.V. 2,933 1,324–PindingshanSinoenergyLtd – 268

Vehiclerentalexpensefromrelatedcompanies:–ZhengzhouGrekaGasCo.,Ltd 13 4–Greka(Zhengzhou)TechnicalServicesCo.,Ltd 38 31

Purchasesfromrelatedcompanies:–GrekaEnergy(International)B.V. 724 934

d) Subsidiary companiesTransactionsbetweentheGrouphavebeeneliminatedonconsolidationandarenotdisclosedinthisnote.DetailsoftransactionsbetweentheGroupandotherrelatedpartiesaredescribedabove.

e) Key management personnelKeymanagementpersonneloftheGrouparethedirectors.Directors’remunerationisdisclosedinnote8.


22. OPERATING LEASE COMMITMENTSAttheendofthereportingperiod,theGrouphadcommitments,aslessee,forfutureminimumleasepaymentsundernon-cancellableoperatingleaseinrespectoflandandbuildingswhichfalldueasfollows:

2014 2013 US$’000 US$’000

Withinoneyear 46 60

23. CAPITAL COMMITMENTS 2014 2013 US$’000 US$’000

Capitalexpenditurecontractedbutnotprovidedforinrespectof:acquisition of property, plant and equipment 2,223 3,395

24. FINANCIAL INSTRUMENTSTheGroup’sfinancialinstrumentswereasfollows:

2014 2013 US$’000 US$’000

Financial assetsLoansandreceivables:Cash and cash equivalents 2,626 3,494Tradeandotherreceivables 9,206 7,048

11,832 10,542

Financial liabilitiesAtamortisedcost:Tradeandotherpayables 3,830 5,915Bankloans 4,706 4,656

8,536 10,571



24. FINANCIAL INSTRUMENTS (continued)

a) Interest rate riskTheGroup’sincomeandoperatingcashflowsaresubstantially independentofchangesinmarketinterestrates.TheGroup’sexposuretointerestrateriskrelatedprimarilytothevariableinterestbearingbankloans.TheGrouphasnotentered intoanycashflow interest ratehedgingcontractsoranyotherderivativefinancial instruments forhedgingpurposes.However,managementcloselymonitors itsexposureto futurecashflowasa resultofchanges inmarketinterestrates,andwillconsiderhedgingshouldtheneedarise.

TheinterestrateprofileoftheGroup’sfinancialassetsattheendofeachreportingperiodswasasfollows:

2014 2013 US$’000 US$’000

Cash and cash equivalentsUSdollars(Floatingrate) 1,876 2,795RMB(Floatingrate) 750 699

Other financial assetsUSdollars(Non-interestbearing) 4,000 4,000RMB(Non-interestbearing) 5,206 3,048

11,832 10,542

Theweightedaverage interestrateearnedduringtheyearwas0.02%onfloatingrateUSdollarcashbalancesand0.14%fortheyearsended31December2014and2013onfloatingrateRMBbalances.Attheendofthereportingperiod,theGrouphadcashonshort-termdepositforperiodsofbetweenover-nightandoneweek.



a) Interest rate risk (continued)

TheinterestrateprofileoftheGroup’sfinancialliabilitiesattheendofthereportingperiodwasasfollows:

2014 2013 US$’000 US$’000

LoansRMB(Non-interestbearing) 4,052 4,000–RMB(Fixedrate) 654 656Other financial liabilitiesRMB(Non-interestbearing) 3,830 5,915

8,536 10,571

b) Foreign currency riskTheGroupundertakestransactionsprincipallyinRMB.WhiletheGroupcontinuallymonitorsitsexposuretomovementsincurrencyrates, itdoesnotutilisehedginginstrumentstoprotectagainstcurrencyrisks.Thedirectorsconsidertheforeigncurrencyexposuretobelimited.Detailsofthecurrencyprofileofassetsandliabilitiesareshownbelow:


In RMB US$’000

Financial assetsTradeandotherreceivables 5,206Cash and cash equivalents 750

5,956

Financial liabilitiesTradeandotherpayables 3,830Loansandborrowings 4,706

8,536




b) Foreign currency risk (continued)


In RMB US$’000

Financial assetsTradeandotherreceivables 3,048Cashandcashequivalents 699

3,747

Financial liabilitiesTradeandotherpayables 5,915Loansandborrowings 4,656

10,571

Some of the above RMB cash and cash equivalents, trade and other receivables and trade and other payables balances aredenominatedinacurrencyotherthanUSdollars.A5%increaseordecreaseintheUSdollar/RMBexchangeratewouldresultinreportedlossesfortheyearbeingUS$141,000higherorlower.

c) Liquidity riskTheliquidityriskofeachgroupentityismanagedcentrallybytheGroup’streasuryfunction.TheinvestmentbudgetsandworkplansaresetbytheoperatingteamsinthePRCandagreedbytheboardannuallyinadvance,enablingtheGroup’scashrequirementstobeanticipated.Wherefacilitiesofgroupentitiesneedtobeincreased,approvalmustbesoughtfromtheboard.

All surplus cash is held centrally to maximise the returns on deposits through economies of scale while required cash will beremittedtothePRCbasedonmonthlycash-callbasis.



c) Liquidity risk (continued)

The maturity profile of the Group’s financial liabilities at the end of each reporting periods based on contractualundiscountedpaymentsaresummarisedbelow:

Six months or Six months to Within one Undiscounted Carrying less one year to five years payments Adjustments value US$’000 US$’000 US$’000 US$’000 US$’000 US$’000 (notei) (noteii)

At 31 December 2013Tradeandotherpayables 5,915 – – 5,915 – 5,915Loansandborrowings 4,656 – – 4,656 – 4,656

10,571 – – 10,571 – 10,571

At 31 December 2014Tradeandotherpayables 2,213 72 1,545 3,830 – 3,830Loansandborrowings 654 – 4,052 4,706 – 4,706

2,867 72 5,597 8,536 – 8,536

Notes:(i) UndiscountedpaymentsaredrawnupbasedontheearliestdateonwhichtheGroupcanberequiredtopay.Theyincludeboth

principalandinterestcashoutflows.

(ii) Carryingvaluerepresentsthebalanceperconsolidatedstatementoffinancialpositionsattheendofeachreportingperiod.




d) Credit riskTheGroup’smaximumexposuretocreditriskbyclassofindividualfinancialinstrumentisshowninthetablebelow:

2014 2013 Carrying Maximum Carrying Maximum value exposure value exposure US$’000 US$’000 US$’000 US$’000

Current assetsCash and cash equivalents 2,626 2,626 3,494 3,494Tradeandotherreceivables 9,206 9,206 7,048 7,048

11,832 11,832 10,542 10,542

Inrelationtoitscashandcashequivalents,theGrouphastomanageitscurrencyexposuresandthecreditriskassociatedwiththecreditqualityofthefinancial institutionsinwhichtheGroupmaintains itscashresources.TheGroupholdsapproximately100%(2013:100%)ofitsUSdollardepositswithBaa2orhigher(Moody’s)ratedinstitutionsfortheyearsended31December2014and2013.CashbalancesareprimarilyheldinUSdollarstomanageRMBrelatedcreditrisk.TheGroupcontinuestomonitoritstreasurymanagementtoensureanappropriatebalanceofthesafetyoffundsandmaximisationofyield.

Receivablesarepredominantlynon-interestbearing.TheGroupdoesnotholdanycollateralassecurityandtheGroupdo not hold any significant provision in the impairment account for other receivables as they mainly relate to receivables withnodefaulthistory.TheGroupmaintainsacreditcontrolteamwhoareresponsibleforchasingdebts.

e) Capital risk managementTheGroup’sobjectiveswhenmanagingcapitalaretoensuretheabilityoftheentitiesintheGrouptocontinueasagoingconcerninordertoprovidereturnsforownersandbenefitsforotherstakeholdersandtomaintainanoptimalcapitalstructuretoreducethecostofcapital.Inordertomaintainthecapitalstructure,theGroupconsiderthemacroeconomicconditions,prevailingborrowingratesinthemarketandadequacyofcashflowsgeneratedfromoperationsandmayadjusttheamountofdividendspaidorpayabletoowners,adjusttheamountspayabletoothergroupentities,raisefundingthroughcapitalmarkets,adjusttheamountofotherborrowingsasnecessary.Nochangesweremadetotheobjectivesorpoliciesduringtheyearsended31December2014and2013.



f) Fair valueThecarryingvalueofsignificantfinancialassetsandliabilitiesapproximatetheirrespectivefairvaluesasat31December2014and2013.

Thecarryingvaluesofcashandcashequivalents,otherreceivables,tradeandotherpayablesandbankloansapproximatetheirrespectivefairvaluesbecauseoftheirshortmaturities.

25. SIGNIFICANT NON CASH TRANSACTIONSThetablebelowsummarizesthesignificantnoncashtransactionsfortheGroup:

2014 2013 US$’000 US$’000

Operating activitiesDepreciation of property, plant and equipment 1,022 1,120Amortisation of intangibles 495 494Movementsinamountsdue(to)/fromrelatedparties – (36,008)Disposal of fixed assets to related parties 2,651 –VATadjustment 1,649 –

5,817 (34,394)

Financing activitiesNon-cashissueofshares – 35,953

– 35,953

26. ULTIMATE CONTROLLING PARTYTheultimatecontrollingpartyoftheGroupisMrRandeepGrewal,whoholds64.68%oftheissuedsharecapitaloftheGroup.

27. APPROVAL OF FINANCIAL STATEMENTSThefinancialstatementswereapprovedandauthorisedforissuebytheBoardofDirectorson8April2015.

28. POST REPORTING DATE EVENTSInMarch2015,thecompanysuccessfullysignedapowercontractwithCUCBM.


DIRECTORS, COMPANY SECRETARY AND ADVISERS

DIRECTORSRandeepS.GrewalExecutive Director, Chairman and CEO

SanjayKrishnaSaxenaNon-Executive Director

FrederickBryanSmartNon-Executive Director

REGISTERED OFFICEPOBox4722nd Floor, Harbour Place103SouthChurchStreetGeorgeTownGrandCaymanKY1-1106Cayman Islands

Principal Corporate Office12/F,NO.5Building,HuaMeilongplazaJingNanWuroadETDZDist.,ZhengzhouBusiness District, Henan ProvinceZhengzhou,450000,PRC

Share RegistrarCapita RegistrarsTheRegistryMont Crevelt HouseBulwer AvenueSt.Sampson

COMPANY SECRETARYInternationalCorporationServicesLtd.

NOMINATED ADVISERSmith&WilliamsonCorporateFinanceLimited25MoorgateLondonEC2R6AY

AUDITORSBDOLLP55BakerStreetLondonW1U7EU

LEGAL ADVISERSAs to Chinese LawGuantaoLawFirm17/F,Tower2,YingtaiCenter,No.28FinanceStreetXichengDistrictBeijing100140,PRC

As to Cayman Islands & BVI LawTraversThorpAlberga1205ATheCentrium60WyndhamStreetCentralHongKong

ANNUAL REPORT 2014

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ANNUAL REPORT 2014 - Greka Engineering · ANNUAL REPORT 2014. Highlights Chairman’s Statement. Business Review Financial Review. Board of Directors Directors’ Report. ... Additionally,