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What are Asian Citrus’ business and its main products?

Asian Citrus has two major business segments. The Group plants, cultivates and sells oranges, grapefruits and bananas, which is our upstream agricultural business. The Group also manufactures and sells fruit juice concentrates, fruit purees, dried fruit, frozen fruits and vegetables, which is what we call our midstream fruit processing business.

Where is the Group’s main plantation business?

The Group has two plantations in China, Hepu County, Guangxi Zhuang Autonomous Region, and Dao County, Hunan Province, one is operational and in production. and another is in development stage.

Which type of oranges does the Group cultivate in the plantations?
The information about number of trees, production volume and types of oranges has been disclosed in the Company’s annual and interim reports.
What is the size of the plantations?
The two plantations occupy approximately 99,000 mu (66 sq. km) of land in total. Hepu Plantation, and Hunan Plantation have approximately 46,000 mu (30.7 sq.km) and 53,000 mu (35.3 sq.km) of land respectively.
What is the main brand of orange that the Group sells?

The Group is selling two types of oranges to customers, namely ungraded oranges (統果) and graded oranges (成品果).

Ungraded oranges are packaged and the customers have to arrange for the transportation of the oranges at their own cost. Usually, the ungraded oranges are sold to wholesale customers.

Graded oranges are oranges that the Group grades, packages and delivers to the customers, usually supermarket customers. The graded oranges under the “Royal Star” brand are usually sold to supermarket customers at a premium price compared to the selling price of ungraded oranges without brand.

How does Asian Citrus position its products in the market? What are the major sales channels for the oranges? Why did the Group start marketing its oranges under the “Royal Star” brand?

The Group cultivates high quality organic oranges that are mostly originated from the US. Our oranges are mid-range products in term of prices in the PRC market, which are of comparable quality while less expensive than imported oranges of comparable species and quality. In comparison our oranges are more expensive and of higher quality than other domestic oranges.

The Group started the marketing of oranges under the ““Royal Star” brand to supermarket chains in 2005 with only two supermarket customers in Guangxi region.

Through direct sales to supermarket chains, the Group enjoys a better margin by cutting out third party distribution costs. Furthermore, the use of our own brand of Royal Star helps to build up the customer’s awareness of our oranges. By gradually expanding the sales networks, the Group will be able to widen the exposure and recognition of the brand to customers across the PRC. The Group believes that a recognized brand is likely to enhance the ability to compete in the nationwide market and build a national reputation for quality.

Implementing sound corporate governance principles by listed companies is important to protect shareholder’s interests. How does Asian Citrus harmonize corporate governance standards throughout the Group? How many independent directors are there in the board? How many years have they been serving the board?

The Board is comprised of two Executive Directors and three Independent Non-Executive Directors. Each of the Executive Directors has a wealth of managerial experience and the Independent Non-Executive Directors have a wealth of experience in finance and corporate development. The Directors are satisfied that the composition of the Board meets the objective of ensuring checks and balances in the Company’s management. The composition of the Board ensures that no one individual or group dominates the decision market process.

Monthly consolidated management accounts with financial highlights and narrative explanations are circulated to the Directors, which enable the Directors to conduct timely assessment of the performance, financial position and prospects of the Group.

The Board also delegates certain of its responsibilities to the Audit Committee and the Remuneration Committee which have clearly defined terms of reference.

The Group has effective internal controls to ensure good corporate governance. An independent internal control consultant has conducted independent review on specific areas of the internal control system of the Group annaually and submitted their reports to the Audit Committee and the Board. No significant weaknesses in internal controls have been found during their reviews.

How does the Group ensure the transparency of operations?
The Group has always been very transparent by regularly updating the market and has been working on enhancing our information disclosure in our public reports.
Does the Company have a corporate governance code and/or policies? What are the procedures for monitoring compliance with these? Who does the monitoring?
The Group has adopted two corporate governance codes: (i) The Group complies with the UK Corporate Governance Code which is the key source of corporate governance recommendations for a UK listed company; (ii) The Group also adopted the Corporate Governance Code contained in Appendix 14 to the Rules Governing the Listing of Securities on The Stock Exchange of Hong Kong Limited (the “HKEx”) (the “Hong Kong Listing Rules”) as its code as on corporate governance practices. In connection with the listing of the Company on the HKEx in November 2009, the Group adopted the Model Code as set out in Appendix 10 to the Hong Kong Listing Rules as its own code of conduct regarding securities transactions by the Directors.

The Group has internal controls to ensure its compliance with these codes. An internal control consultant has conducted independent review on specific areas of the internal control system of the Group since 2009 and submitted their reports to the Audit Committee and the Board. No significant weaknesses in internal controls have been found during the reviews.

Is there any regular communication channels for investors?
The Board is committed to maintaining good communications with its shareholders and potential investors. The Group maintains a regularly updated website, which enables shareholders and potential investors to understand the Group better and to communicate with the senior management of the Group in a user-friendly platform.


This web-site was last updated on 05-04-2016