China TopReach Inc.

CIK:0001363614|SEC Filings

EARNINGS PER SHARE

12 Months Ended

Dec. 31, 2011

EARNINGS PER SHARE

Basic earnings per share is computed on the basis of the weighted average number of shares of common stocks outstanding during the period. Diluted earnings per share is computed on the basis of weighted average number of shares of common stocks plus the effect of dilutive potential common shares outstanding during the period. The components of basic and diluted earnings per share are as follows:

	For The Year Ended
	December 31, 2011		December 31, 2010		December 31, 2009

Net income attributable to common shareholders	$	2,409,785	$	11,749,166	$	17,437,983

Basic weighted average outstanding shares of common shares		14,912,847		15,321,170		16,285,126
Dilutive effect of warrants		-		-		1,465,539
Dilutive weighted average outstanding shares		14,912,847		15,321,170		17,750,665

Earnings per share
Basic	$	0.16	$	0.77		1.07

Diluted	$	0.16	$	0.77		0.98

During the reporting period, the purchase options granted to the underwriters were not included in the computation of diluted earnings per shares because they were anti-dilutive.

A total of 7,500,000 Earn-out shares issued to OMH’s shareholders in 2010 have been included in the computation of the basic and diluted earnings per share to retroactively reflect the effect of the recapitalization.

CONSOLIDATED STATEMENTS OF CASH FLOWS (USD $)	12 Months Ended
CONSOLIDATED STATEMENTS OF CASH FLOWS (USD $)	Dec. 31, 2011	Dec. 31, 2010	Dec. 31, 2009
Cash flows from operating activities:
Net income	$ 2,409,785	$ 11,749,166	$ 17,437,983
Adjustments to reconcile net income to net cash provided by /(used in) operating activities:
Depreciation	1,335,805	897,154	840,636
Amortization	1,484,623	88,668	134,384
Non-controlling interests	5,520,633	9,672,681	3,587
Share-based payment expenses	842,106	1,845,977	2,654,179
Provision for uncollectible trade receivables	10,698,576	802,290	125,422
(Gain)/loss on disposal of property, plant and equipment	(5,871)	8,852	0
Share of loss of an associate	47,431	0	0
Deferred income tax	(269,757)	0	0
Changes in assets and liabilities:
Trade receivables	(11,410,026)	(21,450,628)	(4,838,031)
Other receivables	2,624,248	2,041,267	1,226,342
Prepaid expenses	(13,384,560)	(7,258,626)	(9,872,952)
Inventories	(464,737)	(201,470)	(289,710)
Deposits to newspapers	909,468	6,942,102	1,153,026
Trade payables	(2,638)	(201,441)	(3,039,512)
Income tax payable	987,991	940,945	2,490,473
Advances from customers	307,444	(1,954,822)	2,267,458
Accrued expenses and other payables	(8,882,392)	570,313	(564,647)
Net cash (used in)/provided by operating activities	(7,251,871)	4,492,428	9,728,638
Cash flows from investing activities
Purchase of property, plant and equipment	(2,905,523)	(2,391,979)	(326,512)
Prepayment for long term investment	(11,587,503)	(14,821,520)	0
Proceeds from disposal of property, plant and equipment	23,793	0	0
Deposits paid in connection with leasehold improvement	0	0	(1,104,576)
Deposits to marketing and promotion projects	(31,408,022)	0	0
Equity investment	(6,393,137)	0	0
Acquisition of a business	(6,187,162)	0	0
Expenditures for intangible assets	(1,324,836)	(155,777)	(115,999)
Net cash used in investing activities	(59,782,390)	(17,369,276)	(1,547,087)
Cash flows from financing activities:
Proceeds from private placement	0	35,000,000	0
Offering proceeds of ShiFang shares	0	71,563,517	0
Payment of listing and offering expenses incurred	0	(11,103,251)	(1,910,953)
Proceeds from reverse merger	0	0	491,234
Proceeds from borrowings	7,261,491	8,258,693	9,436,611
Repurchase and cancellation of ShiFang shares	(1,622,700)	0	0
Capital contributions from non-controlling interests	4,710,699	0	0
Repayment of short-term borrowings	(8,046,195)	(6,511,437)	(8,263,617)
Proceeds from/(repayment) to related parties	12,803,214	(5,366,201)	(429,710)
Repayment to shareholders	0	(3,103,098)	(2,703,701)
Repayment to non-controlling interests	0	(521,779)	(87,755)
Net cash provided by/(used in) financing activities	15,106,509	88,216,444	(3,467,891)
Effect of foreign currency conversion on cash	3,029,089	1,013,652	(65,591)
Net (decrease)/increase in cash and cash equivalents	(48,898,663)	76,353,248	4,648,069
Cash and equivalents, beginning	82,577,185	6,223,937	1,575,868
Cash and equivalents, ending	33,678,522	82,577,185	6,223,937
Supplemental disclosures of cash flow information:
Interest paid	260,641	215,694	645,208
Income tax paid	$ 2,928,544	$ 2,617,548	$ 1,179,083

CONSOLIDATED BALANCE SHEETS (USD $)	Dec. 31, 2011	Dec. 31, 2010
ASSETS
Cash and cash equivalents	$ 33,678,522	$ 82,577,185
Trade receivables, net	45,402,557	43,024,316
Other receivables	4,303,070	6,668,958
Prepaid expenses	32,962,062	18,847,343
Due from related parties	1,994,870	3,652,407
Inventories	1,295,213	799,503
Deposits to newspapers	2,134,613	2,930,550
Deposits for marketing and promotion projects	2,749,238	0
Total current assets	124,520,145	158,500,262
Non-current assets
Property, plant and equipment, net	9,776,757	7,896,583
Equity investment	6,345,706	0
Deposits to newspapers	14,453,137	13,914,080
Deposits for marketing and promotion projects	28,670,626	0
Prepayment for long term investment	27,178,183	14,821,520
Goodwill	1,975,131	0
Intangible assets, net	6,242,297	634,922
Total non-current assets	94,641,837	37,267,105
Total assets	219,161,982	195,767,367
LIABILITIES AND SHAREHOLDERS' EQUITY
Short-term borrowings	7,622,702	7,836,930
Trade payables	651,457	629,700
Income tax payable	6,435,928	5,244,752
Advances from customers	1,762,183	1,400,483
Accrued expenses and other payables	12,372,583	20,462,255
Due to related parties	3,931,161	3,565,850
Total current liabilities	32,776,014	39,139,970
Non-current liabilities
Long-term borrowings	158,127	421,763
Amount due to a related party	10,777,013	0
Deferred income tax liabilities	1,161,974	0
Total non-current liabilities	12,097,114	421,763
Total liabilities	44,873,128	39,561,733
Commitments and contingencies
Shareholders' equity
Preferred shares - $0.001 par value, 3,000,000 shares authorized; no shares issued and outstanding at December 31, 2011 and 2010	0	0
Ordinary shares - $0.001 par value, 60,000,000 shares authorized; 14,912,847 shares issued and outstanding at December 31, 2011 and 2010	14,913	14,913
Additional paid-in capital	49,433,214	48,542,261
Statutory reserve	1,997,176	1,558,282
Retained earnings	15,160,143	13,189,252
Accumulated other comprehensive income	4,292,577	1,714,247
Total China TopReach Inc.'s equity	70,898,023	65,018,955
Non-controlling interests	103,390,831	91,186,679
Total shareholders' equity	174,288,854	156,205,634
Total liabilities and shareholders' equity	$ 219,161,982	$ 195,767,367