GOLDBOND GROUP<00172> - Results Announcement
Goldbond Group Holdings Limited announced on 06/07/2006:
(stock code: 00172 )
Year end date: 31/03/2006
Currency: HKD
Auditors' Report: Unqualified
(Audited )
(Audited ) Last
Current Corresponding
Period Period
from 01/04/2005 from 01/04/2004
to 31/03/2006 to 31/03/2005
Note ('000 ) ('000 )
Turnover : 39,962 24,735
Profit/(Loss) from Operations : 24,185 41,875
Finance cost : (17,705) (2,495)
Share of Profit/(Loss) of
Associates : 5,784 (1,351)
Share of Profit/(Loss) of
Jointly Controlled Entities : 704 (3,198)
Profit/(Loss) after Tax & MI : 3,861 27,083
% Change over Last Period : -85.74 %
EPS/(LPS)-Basic (in dollars) : 0.0023 0.0163
-Diluted (in dollars) : N/A 0.0136
Extraordinary (ETD) Gain/(Loss) : N/A N/A
Profit/(Loss) after ETD Items : 3,861 27,083
Final Dividend : NIL NIL
per Share
(Specify if with other : N/A N/A
options)
B/C Dates for
Final 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 Statement of compliance
These financial statements have been prepared in accordance with all
applicable Hong Kong Financial Reporting Standards ("HKFRSs"), which
collective term includes all applicable individual Hong Kong Financial
Reporting Standards, Hong Kong Accounting Standards ("HKASs") and
Interpretations issued by the Hong Kong Institute of Certified Public
Accountants ("HKICPA"), accounting principles generally accepted in Hong
Kong and the disclosure requirements of the Hong Kong Companies Ordinance.
These financial statements also comply with the applicable disclosure
provisions of the Rules Governing the Listing of Securities on The Stock
Exchange of Hong Kong Limited ("Listing Rules").
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. Information on the changes in accounting
policies resulting from initial application of these new and revised
HKFRSs for the current and prior accounting periods reflected in these
financial statements is provided in note 2.
2 Changes in accounting policies
The following sets out information on the significant changes in
accounting policies for the current and prior accounting periods reflected
in these financial statements.
The group has not applied any new standard or interpretation that is not
yet effective for the current accounting period.
(a) Restatement of prior periods and opening balances
The following tables disclose the adjustments that have been made in
accordance with the transitional provisions of the respective HKFRSs to
each of the line items in the consolidated income statement and balance
sheet and the company's balance sheet and other significant related
disclosure items as previously reported for the year ended 31 March 2005.
Effect on the consolidated financial statements
Consolidated income statement for the year ended 31 March 2005
Effect of new policy
(increase/(decrease) in
2005 (as profit for the year)
previously HKAS 1 HKFRS 2 2005 (as
reported) (note 2(e)) (note 2(c)) Sub-total restated)
$'000 $'000 $'000 $'000 $'000
Turnover
24,735 - - - 24,735
Direct outgoings
(3,893) - - - (3,893)
---------- ---------- ---------- -------- ----------
Gross profit
20,842 - - - 20,842
Other revenue
3,905 - - - 3,905
Other net loss
(136) - - - (136)
Administrative expenses
(19,948) - (852) (852) (20,800)
Other operating expenses
(2,400) - - - (2,400)
Change in fair value of
investment properties
40,464 - - - 40,464
---------- ---------- ---------- -------- ----------
Profit from operations
42,727 - (852) (852) 41,875
Finance costs
(2,495) - - - (2,495)
Share of loss of associate
(1,351) - - - (1,351)
Share of losses of jointly
controlled entities
(4,654) 1,456 - 1,456 (3,198)
---------- ---------- ---------- -------- ----------
Profit before taxation
34,227 1,456 (852) 604 34,831
Income tax
(6,292) (1,456) - (1,456) (7,748)
---------- ---------- ---------- -------- ----------
Profit for the year
27,935 - (852) (852) 27,083
========== =========== =========== ======== ==========
Effect of new policy
(increase/(decrease) in
2005 (as profit for the year)
previously HKAS 1 HKFRS 2 2005 (as
reported) (note 2(e)) (note 2(c)) Sub-total restated)
$'000 $'000 $'000 $'000 $'000
Attributable to:
Equity shareholders of the
company
27,935 - (852) (852) 27,083
========== =========== =========== ======== ==========
Earnings per share
Basic (cents)
1.68 - (0.05) (0.05) 1.63
========== =========== =========== ======== ==========
Diluted (cents)
1.40 - (0.04) (0.04) 1.36
========== =========== =========== ======== ==========
Other significant
disclosure item:
Staff costs
(9,812) - (852) (852) (10,664)
Consolidated balance sheet at 31 March 2005
Effect of new policy
2005 (as (increase/(decrease) in net assets)
previously HKFRS 2 HKAS 32 2005 (as
reported) (note 2(c)) (note 2(f)) Sub-total restated)
$'000 $'000 $'000 $'000 $'000
Total assets less current
liabilities
601,143 - - - 601,143
---------- ---------- ---------- -------- ----------
Non-current liabilities
Interest-bearing bank loans
(164,580) - - - (164,580)
Convertible notes
(100,000) - - - (100,000)
Redeemable convertible
preference shares
- - (6,840) (6,840) (6,840)
Deferred taxation
(9,583) - - - (9,583)
---------- ---------- ---------- -------- ----------
(274,163) - (6,840) (6,840) (281,003)
---------- ---------- ---------- -------- ----------
NET ASSETS
326,980 - (6,840) (6,840) 320,140
========== =========== =========== ======== ==========
CAPITAL AND
RESERVES
Attributable to equity
shareholders of the
company
Share capital
173,084 - (6,840) (6,840) 166,244
Share premium
97,713 - - - 97,713
Capital reserve
5,000 852 - 852 5,852
Revaluation reserve
3,000 - - - 3,000
General reserve
6,000 - - - 6,000
Retained profits
42,183 (852) - (852) 41,331
---------- ---------- ---------- -------- ----------
326,980 - (6,840) (6,840) 320,140
========== =========== =========== ======== ==========
(b) Estimated effect of changes in accounting policies on the current
period
The following tables provide estimates of the extent to which each of the
line items in the consolidated income statement and balance sheet and the
company's balance sheet and other significant related disclosure items for
the year ended 31 March 2006 is higher or lower than it would have been
had the previous policies still been applied in the year, where is it
practicable to make such estimates.
Effect on the consolidated financial statements
Estimated effect on the consolidated income statement for the year ended
31 March 2006
Estimated effect of new policy
(increase/(decrease) in profit for the year)
HKAS 32
HKFRS 2 HKAS 1 & 39
(note 2(c)) (note 2(e)) (note 2(f)) Total
$'000 $'000 $'000 $'000
Selling and
administrative
expenses (2,109) - - (2,109)
------------ ----------- ----------- ----------
Profit from
operations (2,109) - - (2,109)
Finance costs - - (7,606) (7,606)
Share of
profit/(loss)
of associate - (983) - (983)
Share of
profits/(losses)
of jointly
controlled
entities - (1,213) - (1,213)
------------ ----------- ----------- ----------
Profit before
taxation (2,109) (2,196) (7,606) (11,911)
Income tax - 2,196 - 2,196
------------ ----------- ----------- ----------
Profit for the
year (2,109) - (7,606) (9,715)
============ =========== =========== ==========
Attributable to:
Equity
shareholders
of the company (2,109) - (7,606) (9,715)
Minority
interests - - - -
------------ ----------- ----------- ----------
Profit for the
year (2,109) - (7,606) (9,715)
============ =========== =========== ==========
Earnings per
share
Basic (cents) (0.13) - (0.46) (0.59)
============ =========== =========== ==========
Diluted (cents) - - - -
============ =========== =========== ==========
Other significant disclosure item:
Staff costs (2,109) - - (2,109)
Estimated effect on the consolidated balance sheet at 31 March 2006
Estimated effect of new policy
(increase/(decrease) in net assets)
HKAS 32
HKFRS 2 HKFRS 3 & 39
(note 2(c)) (note 2(d)) (note 2(f)) Total
$'000 $'000 $'000 $'000
Non-current
assets
Interest in
associate - 474 - 474
Interest in
jointly
controlled
entities - 4,886 - 4,886
------------ ----------- ----------- ----------
- 5,360 - 5,360
------------ ----------- ----------- ----------
Non-current liabilities
Convertible
notes - - 11,096 11,096
Redeemable
convertible
preference
shares - - (1,194) (1,194)
------------ ----------- ----------- ----------
- - 9,902 9,902
------------ ----------- ----------- ----------
NET ASSETS - 5,360 9,902 15,262
============ =========== =========== ==========
Effect
attributable
to equity
shareholders
of the company
Share capital - - (6,840) (6,840)
Capital reserve 2,961 (5,000) 22,297 20,258
Retained
profits (2,961) 10,360 (5,555) 1,844
------------ ----------- ----------- ----------
- 5,360 9,902 15,262
Effect
attributable
to
minority
interests - - - -
------------ ----------- ----------- ----------
- 5,360 9,902 15,262
============ =========== =========== ==========
(c) 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 over ordinary shares of 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
has adopted a new policy for employee share options. Under the new
policy, the group recognises the fair value of such options as an expense
with a corresponding increase recognised in a capital reserve within
equity.
The new accounting policy has been applied retrospectively with
comparatives restated, except that the group has taken advantage of the
transitional provisions set out in 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 January 2005.
The adjustments for each financial statement line affected for the years
ended 31 March 2005 and 2006 are set out in notes 2(a) and (b). No
adjustments to the opening balances as at 1 April 2004 are required as no
options existed at that date.
(d) Amortisation of positive and negative goodwill (HKFRS 3, Business
combinations and HKAS 36, Impairment of assets)
Amortisation of goodwill
In prior years:
- positive or negative goodwill which arose prior to 1 January 2001
was taken directly to reserves at the time it arose, and was not
recognised in the income statement until disposal or impairment of the
acquired business;
- positive goodwill which arose on or after 1 January 2001 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 which arose on or after 1 January 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 as at the date of acquisition. In
such cases it was recognised in the income statement as those expected
losses were incurred.
With effect from 1 April 2005, in order to comply with HKFRS 3 and HKAS
36, the group has changed its accounting policies relating to goodwill.
Under the new policy, the group no longer amortises positive goodwill but
tests it at least annually for impairment. 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
income statement as it arises.
The new policy in respect of the amortisation of positive goodwill had no
effect on the financial statements as there was no positive goodwill
subject to amortisation as at 31 March 2005.
The new policy in respect of negative goodwill has been adopted
prospectively in accordance with the transitional arrangements under HKFRS
3. The adjustments for each consolidated financial statement line affected
for the year ended 31 March 2006 are set out in note 2(b).
(e) Changes in presentation (HKAS 1, Presentation of financial
statements)
(i) Presentation of shares of associate's and jointly controlled
entities' taxation (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 income statement. 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 associate and jointly controlled entities accounted for
using the equity method in the respective shares of profit or loss
reported in the consolidated income statement before arriving at the
group's profit or loss before tax. These changes in presentation have
been applied retrospectively with comparatives restated as shown in note
2(a).
(ii) 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 income
statement as a deduction before arriving at the profit attributable to
shareholders (the equity shareholders of the company).
With effect from 1 April 2005, in order to comply with HKAS 1 and HKAS 27,
the group has changed its accounting policy relating to presentation of
minority interests. Under the new policy, minority interests are
presented as part of equity, separately from interests attributable to the
equity shareholders of the company.
No restatement of comparative figures are necessary since there were no
minority interests in the prior year.
(f) Financial instruments (HKAS 32, Financial instruments: Disclosure
and presentation and HKAS 39, Financial instruments: Recognition and
measurement)
(i) Investments in equity securities
In prior years, trading securities were stated at fair value with changes
in fair value recognised in the income statement
With effect from 1 April 2005, and in accordance with HKAS 39, all trading
securities are classified as financial assets at fair value through the
income statement and carried at fair value. Changes in fair value are
recognised in the income statement. This new accounting policy has no
impact on the financial statements for the year and the comparative
information.
(ii) Convertible notes
In prior years, convertible notes issued were stated at amortised cost (
including transaction costs).
With effect from 1 April 2005, and in accordance with HKAS 32 and HKAS 39,
convertible notes issued are split into their liability and equity
components at initial recognition. 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).
The changes in accounting policy were adopted and the adjustments for each
financial statement line affected for the year ended 31 March 2006 are set
out in note 2(b). Comparative amounts have not been restated as this is
prohibited by the transitional arrangements in HKAS 39.
(iii) Redeemable convertible preference shares
In prior years, redeemable convertible preference shares were classified
as equity based on their legal form. Dividends paid to the preference
were presented as a distribution to shareholders.
With effect from 1 April 2005, and 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 income statement.
The change in accounting policy has been adopted retrospectively and the
effects of which are set out in note 2(a).
Also, 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(f)(ii). This change has been
adopted by way of an adjustment to opening balances as at 1 April 2005 and
the adjustments for each financial statement line affected for the year
ended 31 March 2006 are set out in note 2(b). Comparative amounts have
not been restated as this is prohibited by the transitional arrangements
in HKAS 39.
(g) Retranslation of goodwill on consolidation of a foreign operation
(HKAS 21, The effects of changes in foreign exchange rates)
In prior years, goodwill arising on the acquisition of a foreign operation
was translated at the exchange rates ruling at the transaction dates.
With effect from 1 April 2005, in order to comply with HKAS 21, the group
has changed its accounting policy relating to retranslation of goodwill.
Under the new policy, any goodwill arising on the acquisition of a foreign
operation is treated as an asset of the foreign operation and is
retranslated at exchange rates ruling at the balance sheet date, together
with the retranslation of the net assets of the foreign operation.
In accordance with the transitional provisions in HKAS 21, this new policy
has not been adopted retrospectively and is only applied to acquisitions
occurring on or after 1 January 2005. As the goodwill arising on the
acquisition of the new foreign operations during the year was fully
impaired as at 31 March 2006, the change in policy has had no impact on
the financial statements for the year ended 31 March 2006.
(h) Definition of related parties (HKAS 24, Related party disclosures)
As a result of the adoption of HKAS 24, Related party disclosures, the
definition of related parties has been expanded to clarify that related
parties include entities that are under the significant influence of a
related party that is an individual (i.e. key management personnel,
significant shareholders and/or their close family members) and post-
employment benefit plans which are for the benefit of employees of the
group or of any entity that is a related party of the group. The
clarification of the definition of related parties has not resulted in any
material changes to the previously reported disclosures of related party
transactions nor has it had any material effect on the disclosures made in
the current period, as compared to those that would have been reported had
SSAP 20, "Related party disclosures", still been in effect.
(i) Club debentures (HKAS 38, Intangible assets)
In prior years, club debentures were stated at fair value with changes in
fair value recognised in equity.
With effect from 1 April 2005, the group has adopted a new policy for club
debentures. Under the new policy, club debentures are stated at carrying
amount less accumulated impairment losses and are tested annually for
impairment.
This change in accounting policy has no impact on the financial statements
for the years presented.
3. Profit before taxation
Profit before taxation is arrived at after charging/(crediting):
2006 2005
(restated)
$'000 $'000
(a) Finance costs:
Interest on bank loans and other borrowings
wholly repayable within five years 2,939 107
Interest on bank loans repayable beyond
five years 7,160 2,388
Interest on convertible notes 7,451 -
Interest on redeemable convertible
preference shares 155 -
--------- ----------
17,705 2,495
========= ==========
(b) Staff costs (including directors'
remuneration) 25,216 10,664
========= ==========
(c) Other operating expenses:
Impairment loss on amount due from
jointly controlled entity 2,888 2,400
Impairment of goodwill 11,411 -
---------- ---------
14,299 2,400
========== =========
(d) Other items:
Repairs and maintenance expenses of
investment properties 667 3,888
Change in fair value of investment properties (39,838) (40,464)
Share of profit/(loss) of associate 5,784 (1,351)
Rental receivable from investment
properties less direct outgoings of $6,040,000
(2005:$3,893,000) (25,831) (20,842)
========= =========
4 Earnings per share
(a) Basic earnings per share
The calculation of basic earnings per share is based on the profit
attributable to ordinary equity shareholders of the company of $3,861,000
(2005 (restated): $27,083,000), and 1,662,440,000 (2005: 1,662,440,000)
ordinary shares in issue during the year.
(b) Diluted earnings per share
The diluted earnings per share for the year ended 31 March 2006 are not
presented as there was no dilutive potential ordinary share at the year
end.
The calculation of diluted earnings per share for the year ended 31 March
2005 is based on the restated profit attributable to ordinary equity
shareholders of the company of $27,083,000 and the weighted average number
of ordinary shares of 1,994,695,000, calculated as follows:
Weighed average number of ordinary shares (diluted)
2005
'000
Weighted average number of ordinary shares at 31 March 1,662,440
Effect of conversion of convertible notes 326,473
Effect of conversion of redeemable convertible
preference shares 5,782
----------
Weighted average number of ordinary shares (diluted)
at 31 March 1,994,695
==========
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