China XLX Fertiliser Ltd

NOTES TO THE FINANCIAL STATEMENTS31 December 200825. Statutory reserve fundIn accordance with the Foreign Enterprise Law applicable to the subsidiary in the People’s Republic of China(“PRC”), the subsidiary is required to make appropriation to a Statutory Reserve Fund (“SRF”). At least 10%of the statutory after tax profits as determined in accordance with the applicable PRC accounting standardsand regulations must be allocated to the SRF until the cumulative total of the SRF reaches 50% of thesubsidiary’s registered capital. Subject to approval from the relevant PRC authorities, the SRF may be used tooffset any accumulated losses or increase the registered capital of the subsidiary. The SRF is not available fordividend distribution to shareholders.26. DividendsGroup2008 2007Rmb’000 Rmb’000Declared and paid during the year:- Final exempt (one-tier) dividend for 2007: SGD 1.4 cents per share 71,468* –* Equivalent to SGD 14,000,000.Group2008 2007Rmb’000 Rmb’000Proposed but not recognised as a liability as at 31 December:Dividends on ordinary shares, subject to shareholders’ approval at the AGM:- Final exempt (one-tier) dividend for 2008: SGD 1.6 cents (2007: SGD 1.4cents) per share 16,000 14,00027. Segment informationReporting formatThe primary segment reporting format is determined to be business segments as the Group’s risks and ratesof return are affected predominantly by differences in the products produced. The operating businesses areorganised and managed separately according to the nature of the products provided, with each segmentrepresenting a strategic business segment that offers different products and serves different markets.Business segmentsThe Group’s primary format for reporting segment information is business segments, with each segmentrepresenting a product category. The Group’s business segment is organised into three main businesssegments, namely:(i)UreaUrea is an effective, neutral nitrogen-based fertiliser which is suitable for various crops and land. Itwill not leave any residue in the soil, and provides nitrogen to crops and serves as raw material forindustries such as agricultural fertilisers, plastic, resin, coating materials and pharmaceuticals.Annual Report 200878