GOLDBOND GROUP<00172> - Results Announcement
Goldbond Group Holdings Limited announced on 15/12/2005:
(stock code: 00172 )
Year end date: 31/03/2006
Currency: HKD
Auditors' Report: N/A
Interim report reviewed by: Both Audit Committee and Auditors
(Unaudited )
(Unaudited ) Last
Current Corresponding
Period Period
from 01/04/2005 from 01/04/2004
to 30/09/2005 to 30/09/2004
Note ('000 ) ('000 )
Turnover : 16,439 11,914
Profit/(Loss) from Operations : 11,523 5,727
Finance cost : (7,461) (1,150)
Share of Profit/(Loss) of
Associates : (1,601) N/A
Share of Profit/(Loss) of
Jointly Controlled Entities : 3,316 (2,427)
Profit/(Loss) after Tax & MI : 1,486 1,670
% Change over Last Period : -11 %
EPS/(LPS)-Basic (in dollars) : 0.001 0.001
-Diluted (in dollars) : N/A 0.001
Extraordinary (ETD) Gain/(Loss) : N/A N/A
Profit/(Loss) after ETD Items : 1,486 1,670
Interim Dividend : Nil Nil
per Share
(Specify if with other : N/A N/A
options)
B/C Dates for
Interim Dividend : N/A
Payable Date : N/A
B/C Dates for (-)
General Meeting : N/A
Other Distribution for : N/A
Current Period
B/C Dates for Other
Distribution : N/A
Remarks:
1 Basis of preparation
This interim results announcement has been prepared in accordance with the
applicable disclosure provisions of the Rules Governing the Listing of
Securities on The Stock Exchange of Hong Kong Limited ("Stock Exchange"),
including compliance with Hong Kong Accounting Standard ('HKAS") 34,
Interim Financial Reporting, issued by the Hong Kong Institute of
Certified Public Accountants ('HKICPA").
The interim results announcement has been prepared in accordance with the
same accounting policies adopted in the 2005 annual financial statements,
except for the accounting policy changes that are expected to be reflected
in the 2006 annual financial statements. Details of these changes in
accounting policies are set out in note 2.
2 Changes in accounting policies
The HKICPA has issued a number of new and revised HKFRSs that are
effective or available for early adoption for accounting periods beginning
on or after 1 January 2005. The Board of Directors has determined the
accounting policies to be adopted in the preparation of the Group's annual
financial statements for the year ending 31 March 2006, on the basis of
HKFRSs currently in issue.
The HKFRSs that will be effective or are available for voluntary early
adoption in the annual financial statements for the year ending 31 March
2006 may be affected by the issue of additional interpretation(s) or other
changes announced by the HKICPA subsequent to the date of issuance of this
interim results announcement. Therefore the policies that will be applied
in the Group's financial statements for that period cannot be determined
with certainty at the date of issuance of this interim results
announcement.
The following sets out further information on the changes in accounting
policies for the annual accounting period beginning on 1 April 2005 which
have been reflected in this interim results announcement.
(a) Summary of the effect of changes in the accounting policies
(i) Effect on opening balance of total equity at 1 April 2005 (as
adjusted)
The following table sets out the adjustments that have been made to the
opening balances at 1 April 2005. These are the aggregate effect of
retrospective adjustments to the net assets as at 31 March 2005 and the
opening balance adjustments made as at 1 April 2005.
Effect of new policy
(increase/(decrease))
Capital
Retained and other Minority Total
Note profits reserves Total interests equity
$'000 $'000 $'000 $'000 $'000
Prior period adjustments:
HKAS 32
Redeemable convertible preference shares issued
2(c) - (6,840) (6,840) - (6,840)
HKFRS 2
Equity settled share-based
transactions
2(b) (852) 852 - - -
---------------------------------------------------------------
Total increase/(decrease) in
equity before opening
balance adjustments
(852) (5,988) (6,840) - (6,840)
---------------------------------------------------------------
Opening balance adjustments:
HKAS 39
Convertible notes
2(c) (3,750) 22,297 18,547 - 18,547
Redeemable convertible
preference shares issued
2(c) 5,801 - 5,801 - 5,801
HKFRS 3
Negative goodwill
2(d) 10,360 (5,000) 5,360 - 5,360
---------------------------------------------------------------
12,411 17,297 29,708 - 29,708
===============================================================
Total effect at 1 April 2005
11,559 11,309 22,868 - 22,868
===============================================================
(ii) Effect on opening balance of total equity at 1 April 2004 (as
adjusted)
The following table sets out only those adjustments that have been made to
the opening balances at 1 April 2004. As explained in notes 2(c) and (d),
certain of the changes in policy did not result in retrospective
adjustments being made to the opening balances as at 1 April 2004 as this
was prohibited by the relevant transitional provisions of the respective
HKFRSs.
Effect of new policy
(increase/(decrease))
Capital
Retained and other Minority Total
Note profits reserves Total interests equity
$'000 $'000 $'000 $'000 $'000
HKAS 32
Redeemable convertible
preference shares issued
2(c) - (6,840) (6,840) - (6,840)
===============================================================
(iii) Effect on profit after taxation for the six months ended 30
September 2005 (estimated) and 30 September 2004 (as adjusted)
In respect of the six months ended 30 September 2005, the following table
provides estimates of the extent to which the profits for that period are
higher or lower than they would have been had the previous policies still
been applied in the interim period, where it is practicable to make such
estimates.
In respect of the six months ended 30 September 2004, the table discloses
the adjustments that have been made to the profits as previously reported
for that period, in accordance with the transitional provisions of the
respective HKFRSs. As retrospective adjustments have not been made for
all changes in policies, as explained in notes 2(c) and (d), the amounts
shown for the six months ended 30 September 2004 may not be comparable to
the amounts shown for the current interim period.
Six months ended Six months ended
30 September 2005 30 September 2004
Effect of new policy
(increase/(decrease))
Shareholders Shareholders
of the Minority of the Minority
Note Company interests Total Company interests Total
$'000 $'000 $'000 $'000 $'000 $'000
HKFRS 2
Equity settled share-based
transactions
2(b) (1,014) - (1,014) - - -
------------------------------------------------------------------
HKAS 39
Redeemable convertible
preference shares issued
(75) - (75) - - -
Convertible notes
(3,644) - (3,644) - - -
-----------------------------------------------------------------
2(c) (3,719) - (3,719) - - -
=================================================================
Total effect for the period
(4,733) - (4,733) - - -
=================================================================
Effect on earnings per share:
- basic (cents)
(0.3) - (0.3) - - -
- diluted (cents)
- - - - - -
=================================================================
(iv) Effect on amounts recognised as capital transactions with owners
for the six months ended 30 September 2005 (estimated) and 30 September
2004 (as adjusted)
In respect of the six months ended 30 September 2005, the following table
provides estimates of the extent to which the amounts recorded as capital
transactions with owners are higher or lower than they would have been had
the previous policies still been applied in the interim period, where it
is practicable to make such estimates.
In respect of the six months ended 30 September 2004, the table discloses
the adjustments that have been made to the amounts recorded as capital
transactions with owners as previously reported for that period, in
accordance with the transitional provisions of the respective HKFRSs. As
retrospective adjustments have not been made for all changes in policies,
as explained in notes 2(c) and (d), the amounts shown for the six months
ended 30 September 2004 may not be comparable to the amounts shown for the
current interim period.
Six months ended Six months ended
30 September 2005 30 September 2004
Effect of new policy
(increase/(decrease))
Shareholders Shareholders
of the Minority of the Minority
Note Company interests Total Company interests Total
$'000 $'000 $'000 $'000 $'000 $'000
HKFRS 2
Equity settled share-based
transactions
- effect recognised in
capital reserve
2(b) 1,014 - 1,014 - - -
==================================================================
2 Changes in accounting policies (continued)
(b) Employee share option scheme (HKFRS 2, Share-based payment)
In prior years, no amounts were recognised when employees (which term
includes directors) were granted options to subscribe for shares in the
Company. If the employees chose to exercise the options, the nominal
amount of share capital and share premium were credited only to the extent
of the option's exercise price receivable.
With effect from 1 April 2005, in order to comply with HKFRS 2, the Group
recognises the fair value of such share options as an expense in the
profit and loss account, or as an asset, if the cost qualifies for
recognition as an asset under the Group's accounting policies. A
corresponding increase is recognised in the capital reserve within equity.
Where the employees are required to meet vesting conditions before they
become entitled to the options, the Group recognises the fair value of the
options granted over the vesting period. Otherwise, the Group recognises
the fair value in the period in which the options are granted.
If an employee chooses to exercise options, the related capital reserve is
transferred to share capital and share premium, together with the exercise
price. If the options lapse unexercised the related capital reserve is
transferred directly to retained profits.
The new accounting policy has been applied retrospectively with
comparatives restated in accordance with HKFRS 2, except that the Group
has taken advantage of the transitional provisions set out in paragraph 53
of HKFRS 2 under which the new recognition and measurement policies have
not been applied to the following grants of options:
(a) all options granted to employees on or before 7 November 2002; and
(b) all options granted to employees after 7 November 2002 but which
had vested before 1 April 2005.
The effects of the adoption of this new accounting policy are set out in
note 2(a). No adjustments to opening balances as at 1 April 2004 are
required as no options existed at that date.
(c) Financial instruments (HKAS 32, Financial instruments: Disclosure
and presentation and HKAS 39, Financial instruments: Recognition and
measurement)
Changes in accounting policies relating to financial instruments are as
follows:
(i) Changes in measurement of financial instruments
In prior years, the accounting policies for certain financial instruments
were as follows:
- trading securities were stated at fair value with changes in fair
value recognised in the profit and loss account.
- non-trading other investments were stated in the balance sheet at
fair value. Changes in fair value were recognised in the investment
revaluation reserve.
- convertible notes issued were stated at amortised cost (including
transaction costs).
With effect from 1 April 2005, and in accordance with HKAS 39, the
following new accounting policies have been adopted for financial
instruments:
- all trading securities are classified as financial assets at fair
value through profit and loss and carried at fair value. Changes in fair
value are recognised in the profit and loss account.
This new accounting policy has no impact on the financial
statements for the six months ended 30 September 2005 and the comparative
information.
- all non-trading investments are classified as available-for-sale
securities and carried at fair value. Changes in fair value are
recognised in equity, unless there is objective evidence that an
individual investment has been impaired. If there is objective evidence
that an individual investment has been impaired, any amount held in the
fair value reserve in respect of the investment is transferred to the
profit and loss account for period in which the impairment is identified.
Any subsequent increase in the fair value of available-for-sale equity
securities is recognised directly in equity.
This new accounting policy has no impact on the financial
statements for the six months ended 30 September 2005 and the comparative
information.
- convertible notes issued are split into their liability and equity
components at initial recognition by recognising the liability component
at its fair value and attributing to the equity component the difference
between the proceeds from the issue and the fair value of the liability
component. The liability component is subsequently carried at amortised
cost. The equity component is recognised in the capital reserve until the
note is either converted (in which case it is transferred to share
premium) or the note is redeemed (in which case it is released directly to
retained profits).
(i) Changes in measurement of financial instruments (continued)
This change was adopted by way of an adjustment to opening balances as at
1 April 2005 as set out in note 2(a). Comparative amounts have not been
restated as this is prohibited by the transitional arrangements set out in
HKAS 39.
(ii) Reclassification of redeemable convertible preference shares as
financial liabilities
In prior years, redeemable convertible preference shares were classified
as equity based on their legal form. Dividends paid to the preference
shareholders were presented as a distribution to equity participants.
With effect from 1 April 2005, in accordance with HKAS 32, the
classification of redeemable convertible preference shares is based on the
substance of the contractual arrangement. Consequently, the shares have
been classified as liabilities and dividends on the shares are recognised
as an expense in the profit and loss account.
The change in accounting policy has been adopted retrospectively and the
effects of which are set out in note 2(a).
With effect from 1 April 2005, and in accordance with HKAS 39, redeemable
convertible preference shares are split into their liability and equity
components at initial recognition which is similar to convertible notes as
explained in note 2(c)(i). This change was adopted by way of an
adjustment to opening balances as at 1 April 2005 as set out in note 2(a).
Comparative amounts have not been restated as this is prohibited by the
transitional arrangements in HKAS 39.
(d) Amortisation of positive and negative goodwill (HKFRS 3, Business
combinations and HKAS 36, Impairment of assets)
In prior years:
- positive goodwill was amortised on a straight line basis over its
useful life and was subject to impairment testing when there were
indications of impairment; and
- negative goodwill in respect of acquisitions made prior to 1 April
2001 was credited directly to the capital reserve. Negative goodwill
which arose on or after 1 April 2001 was amortised over the weighted
average useful life of the depreciable/amortisable non-monetary assets
acquired, except to the extent it related to identified expected future
losses at the date of acquisition. In such cases it was recognised in the
profit and loss account as those expected losses were incurred.
With effect from 1 April 2005, in accordance with HKFRS 3 and HKAS 36, the
Group no longer amortises positive goodwill. Such goodwill is tested
annually for impairment, including in the year of its initial recognition,
as well as when there are indications of impairment. Impairment losses
are recognised when the carrying amount of the cash generating unit to
which the goodwill has been allocated exceeds its recoverable amount.
Also with effect from 1 April 2005 and in accordance with HKFRS 3, if the
fair value of the net assets acquired in a business combination exceeds
the consideration paid (i.e. an amount arises which would have been known
as negative goodwill under the previous accounting policy), the excess is
recognised immediately in the profit and loss account as it arises.
The change in policy relating to positive goodwill had no effect on the
interim results announcement as there was no positive goodwill subject to
amortisation as at 31 March 2005.
The new policy in respect of negative goodwill was adopted by way of an
adjustment to the opening balances as at 1 April 2005 as set out in note
2(a).
(e) Minority interests (HKAS 1, Presentation of financial statements
and HKAS 27, Consolidated and separate financial statements)
In prior years, minority interests at the balance sheet date were
presented in the consolidated balance sheet separately from liabilities
and as a deduction from net assets. Minority interests in the results of
the Group for the year were also separately presented in the consolidated
profit and loss account as a deduction before arriving at the profit
attributable to shareholders of the Company.
With effect from 1 April 2005, in order to comply with HKAS 1 and HKAS 27,
minority interests at the balance sheet date are presented in the
consolidated balance sheet within equity, separately from the equity
attributable to the shareholders of the Company, and minority interests in
the results of the Group for the period are presented on the face of the
consolidated profit and loss account as an allocation of the total profit
or loss for the period between the minority interests and the shareholders
of the Company.
No restatement of comparative figures are necessary since there are no
minority interests.
(f) Share of profits or losses of associate and jointly controlled
entities (HKAS 1, Presentation of financial statements)
In prior years, the Group's share of taxation of associate and jointly
controlled entities accounted for using the equity method was included as
part of the Group's income tax in the consolidated profit and loss
account. With effect from 1 April 2005, in accordance with the
implementation guidance in HKAS 1, the Group has changed the presentation
and includes the share of taxation of associates and jointly controlled
entities accounted for using the equity method in the respective shares of
profit or loss in the consolidated profit and loss account. These changes
in presentation have been applied retrospectively with comparatives
restated.
As a result of this new presentation, the Group's share of profits of
jointly controlled entities has decreased by $1,085,000 (six months ended
30 September 2004: $Nil). The Group's income tax has decreased by the
same amount accordingly and there is no net effect on net assets in either
period. There is no impact on the share of loss of associate as there is
no income tax attributable to the associate during the period (six months
ended 30 September 2004: $Nil).
3. Profit before taxation
Profit before taxation is arrived at after charging/(crediting):
Six months ended 30 September
2005 2004
$'000 $'000
(unaudited) (unaudited)
Staff costs (including directors' remuneration):
Wages, salaries and allowances 7,521 5,092
Equity-settled share-based transactions 1,014 -
Retirement costs 314 93
----------------------------
8,849 5,185
======= =======
Other operating expenses
Impairment of goodwill 7,954 -
Provision for amount due from jointly controlled entity
2,888 -
---------------------------
10,842 -
======= =======
Other items:
Change in fair value of investment properties
(21,606) -
======= =======
4 Earnings per share
(a) Basic earnings per share
The calculation of basic earnings per share is based on the profit
attributable to shareholders of $1,486,000 (six months ended 30 September
2004: $1,670,000) and the weighted average of 1,662,440,000 (six months
ended 30 September 2004: 1,662,440,000) ordinary shares in issue during
the period.
(b) Diluted earnings per share
The diluted earnings per share for the six months ended 30 September 2005
are not presented as there are no dilutive potential ordinary shares at
the period end.
The calculation of diluted earnings per share for the period ended 30
September 2004 is based on the profit attributable to ordinary
shareholders of $1,670,000 and the weighted average number of ordinary
shares of 1,790,695,000 ordinary shares after adjusting for the effects of
all potential ordinary shares.
Six months ended 30 September
2004
Number of
shares
Weighted average number of ordinary shares
for the purpose of basic earnings per share 1,662,440,000
Deemed issue of shares for no consideration
arising from convertible notes 128,255,000
---------------
1,790,695,000
==============
5 Possible impact of amendments, new standards and interpretations
issued but not yet effective for the annual accounting year ending 31
March 2006
Up to the date of issue of this interim results announcement, the HKICPA
has issued the following amendment which is not effective for the
accounting year ending 31 March 2006.
Effective for accounting
periods beginning on or
after
Amendments to HKAS 39, Financial instruments: recognition
and measurement 1 April 2006
The above amendment has not been applied in this interim results
announcement because the Directors expect that the Group will not adopt it
when preparing the Group's annual financial statements for the year ending
31 March 2006.
The Group is in process of making an assessment of the impact of this
amendment in the period of initial application but is not yet in a
position to state whether this amendment will have a significant impact on
its results of operations and financial position.
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