NEO-CHINA GROUP<00563> - Results Announcement
Neo-China Group (Holdings) Limited announced on 19/08/2006:
(stock code: 00563 )
Year end date: 30/04/2006
Currency: HKD
Auditors' Report: Unqualified
(Audited )
(Audited ) Last
Current Corresponding
Period Period
from 01/05/2005 from 01/05/2004
to 30/04/2006 to 30/04/2005
Note ('000 ) ('000 )
Turnover : 671,140 476,472
Profit/(Loss) from Operations : 3,315 227,624
Finance cost : (10,774) (3,146)
Share of Profit/(Loss) of
Associates : (8,579) 7,901
Share of Profit/(Loss) of
Jointly Controlled Entities : N/A N/A
Profit/(Loss) after Tax & MI : 104,663 177,817
% Change over Last Period : -41 %
EPS/(LPS)-Basic (in dollars) : 0.0378 0.0926
-Diluted (in dollars) : 0.0350 0.0855
Extraordinary (ETD) Gain/(Loss) : N/A N/A
Profit/(Loss) after ETD Items : 104,663 177,817
Final Dividend : 0 2.2 cents
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. BASIS OF PREPARATION AND ACCOUNTING POLICIES AND ADOPTION OF NEW
AND REVISED HONG KONG FINANCIAL REPORTING STANDARDS
The consolidated financial statements have been prepared under the
historical cost basis except for certain financial instruments, which are
measured at fair values at initial recognition, as explained in the
accounting policies set out below:
The consolidated financial statements have been prepared in
accordance with HKFRSs issued by the HKICPA. In addition, the
consolidated financial statements include applicable disclosures required
by the Rules Governing the Listing of Securities on the Stock Exchange and
by the Hong Kong Companies Ordinance.
In the current year, the Group has applied, for the first time, a number
of new and revised Hong Kong Financial Reporting Standards ("HKFRSs"),
Hong Kong Accounting Standards ("HKASs") and Interpretations (hereinafter
collectively referred to as "new HKFRSs") issued by the Hong Kong
Institute of Certified Public Accountants (the "HKICPA") that are
effective for accounting periods beginning on or after 1 January 2005
except for HKAS 36 Impairment of Assets, HKAS 38 Intangible Assets and
HKFRS 3 Business Combination, which the Group had early adopted for the
year ended 30 April 2005. The application of the new HKFRSs has resulted
in a change in the presentation of the consolidated income statement,
consolidated balance sheet and consolidated statement of changes in
equity.
In particular, the presentation of minority interests and share of
tax of associates have been changed. The changes in presentation have
been applied retrospectively. The adoption of the new HKFRSs has resulted
in changes to the Group's accounting policies in the following areas that
have an effect on how the results for the current and prior accounting
years are prepared and presented:
(a) Share-based Payments
In the current year, the Group has applied HKFRS 2 Share-based
Payment, which requires an expense to be recognised where the Group buys
goods or obtains services in exchange for shares or rights over shares (
'equity-settled transactions'), or in exchange for other assets equivalent
in value to a given number of shares or rights over shares ('cash-settled
transactions'). The principal impact of HKFRS 2 on the Group is in
relation to the expensing of the fair value of share options granted to
directors and employees of the Company, determined at the date of grant of
the share options, over the vesting period. Prior to the application of
HKFRS 2, the Group did not recognise the financial effect of these share
options until they were exercised. The Group has applied HKFRS 2 to share
options granted on or after 1 May 2005. Profit for the year has been
decreased by HK$4,287,000 due to recognition of share based payments. No
prior year adjustment was required as the Group has no share option
outstanding before 30 April 2005 (see note 2A for the financial impact).
(b) Financial Instruments
In the current year, the Group has applied HKAS 32 "Financial
Instruments: Disclosure and Presentation" and HKAS 39 "Financial
Instruments: Recognition and Measurement". HKAS 32 requires retrospective
application. HKAS 39, which is effective for accounting periods beginning
on or after 1 January 2005, generally does not permit to recognise,
derecognise or measure financial assets and liabilities on a retrospective
basis. The principal effects resulting from the implementation of HKAS 32
and HKAS 39 are summarised below:
Convertible note
HKAS 32 requires an issuer of a compound financial instrument (
that contains both financial liability and equity components) to separate
the compound financial instrument into its liability and equity components
on its initial recognition and to account for these components separately.
In subsequent periods, the liability component is carried at amortised
cost using the effective interest method. The principal impact of HKAS 32
on the Group is in relation to a convertible note issued by the Group that
contains both liability and equity components. Previously, the
convertible note was classified as a liability on the balance sheet. HKAS
32 requires retrospective application, comparative figures for 2005 have
been restated. (see note 2A for the financial impact).
Classification and measurement of financial assets and financial
liabilities
The Group has applied the relevant transitional provisions in HKAS
39 with respect to the classification and measurement of financial assets
and financial liabilities that are within the scope of HKAS 39.
The Group has no debt or equity securities as at 30 April 2005.
Financial assets and financial liabilities other than debt and
equity securities
From 1 May 2005 onwards, the Group has classified and measured its
financial assets and financial liabilities other than debt and equity
securities (which were previously outside the scope of Statement of
Standard Accounting Practice 24 "Accounting for investments in securities
") in accordance with the requirements of HKAS 39. Under HKAS 39,
financial assets are classified as "financial assets at fair value through
profit or loss", "available-for-sale financial assets", "loans and
receivables", or "held-to-maturity financial assets". "Financial assets
at fair value through profit or loss" and "available-for-sale financial
assets" are carried at fair value, with changes in fair values recognised
in profit or loss and equity respectively. Available-for-sale equity
investments that do not have quoted market prices in an active market and
whose fair value cannot be reliably measured and derivatives that are
linked to and must be settled by delivery of such unquoted equity
instruments are measured at cost less impairment after initial
recognition. "Loans and receivables" and "held-to-maturity financial
assets" are measured at amortised cost using the effective interest method
after initial recognition. Financial liabilities are generally classified
as "financial liabilities at fair value through profit or loss" or "other
financial liabilities". Financial liabilities at fair value through
profit or loss are measured at fair value, with changes in fair value
being recognised in profit or loss directly. Other financial liabilities
are carried at amortised cost using the effective interest method after
initial recognition. The adoption of HKAS 39 by the Group has had no
material effect on the Group's results for the current year.
Interest-free non-current loans
Prior to the application of HKAS 39, interest-free non-current
loan payable were stated at the nominal amount. HKAS 39 requires all
financial assets and financial liabilities to be measured at fair value on
initial recognition. Such interest-free loan payable are measured at
amortised cost determined using the effective interest method at
subsequent balance sheet dates. The Group has applied the relevant
transitional provisions in HKAS 39. As a result of this change in the
accounting policy, the carrying amount of the non-current loan payable as
1 May 2005 has been decreased in order to state the loan payable at
amortised costs in accordance with HKAS 39 (see note 2A for the financial
impact).
The effects of the changes in the accounting policies described
above on the results for the current and prior years are as follows:
The following is an analysis in profit for the year ended 30 April
2006 and 30 April 2005 by line items presented according to their
function:
HKAS 32
and Total
HKAS 1 HKAS 39 HKFRS 2 effect
HK$'000 HK$'000 HK$'000 HK$'000
For the year ended 30 April 2006
Increase in administrative expenses - - 4,287 4,287
Increase in finance costs - 9,735 - 9,735
_______ _______ _______ _______
Decrease in profit for the year - 9,735 4,287 14,022
_______ _______ _______ _______
_______ _______ _______ _______
For the year ended 30 April 2005
Increase in finance costs - 2,634 - 2,634
Decrease in share of profits
of associates 3,663 - - 3,663
Decrease in income tax expense (3,663) - - (3,663)
_______ _______ _______ _______
Decrease in profit for the year - 2,634 - 2,634
_______ _______ _______ _______
_______ _______ _______ _______
The Group has not early applied the following new Standards,
amendments and Interpretations that have been issued but are not yet
effective. Except for the financial impact on adoption of HKAS 39 & HKFRS
4 (Amendments) "Financial guarantee contracts" which requires financial
guarantee contracts within the scope of HKAS 39 to be measured at fair
value on initial recognition, the directors of the Company anticipate that
these Standards, amendments or Interpretations will have no material
impact on the financial statements of the Group. The Group is not yet in
a position to reasonably estimate the impact on adoption of HKAS 39 &
HKFRS 4 (Amendments).
HKAS 1 (Amendment) Capital disclosures1
HKAS 19 (Amendment) Actuarial gains and losses, group plans and
disclosures2
HKAS 21 (Amendment) Net investment in a foreign operation2
HKAS 39 (Amendment) Cash flow hedge accounting of forecast intragroup
transactions2
HKAS 39 (Amendment) The fair value option2
HKAS 39 & HKFRS 4 (Amendments) Financial guarantee contracts2
HKFRS 6 Exploration for and evaluation of mineral resources2
HKFRS 7 Financial instruments: Disclosures1
HK(IFRIC) - INT 4 Determining whether an arrangement contains a
lease2
HK(IFRIC) - INT 5 Rights to interests arising from decommissioning,
restoration and environmental rehabilitation funds2
HK(IFRIC) - INT 6 Liabilities arising from participating in a
specific market - waste electrical and electronic
equipment3
HK(IFRIC) - INT 7 Applying the restatement approach under HKAS 29
Financial Reporting in Hyperinflationary
Economies4
HK(IFRIC) - INT 8 Scope of HKFRS 25
HK(IFRIC) - INT 9 Reassessment of embedded derivatives6
1 Effective for annual periods beginning on or after 1 January 2007.
2 Effective for annual periods beginning on or after 1 January 2006.
3 Effective for annual periods beginning on or after 1 December 2005.
4 Effective for annual periods beginning on or after 1 March 2006.
5 Effective for annual periods beginning on or after 1 May 2006.
6 Effective for annual periods beginning on or after 1 June 2006.
2. REVENUE
Revenue represents amounts received and receivable for properties
sold by the Group to outside customers and services rendered is summarised
as follows:
2006 2005
HK$'000 HK$'000
Sales of properties 669,404 475,935
Provision of property management
consultancy services 1,736 537
_______ _______
671,140 476,472
_______ _______
_______ _______
3. Profit after taxation and MI included gain on disposal of
subsidiaries of HK$125,018,000 (30 April 2005: HK$100,011,000).
4. EARNINGS PER SHARE
The calculation of the basic and diluted earnings per share
attributable to the equity holders of the Company for the year is based on
the following data:
2006 2005
HK$'000 HK$'000
(restated)
Earnings:
Earnings for the purposes of basic
earnings per share 104,663 177,817
Effect of dilutive potential ordinary shares in respect
of interest on convertible note 6,393 3,146
____________ ____________
Earnings for the purposes of diluted
earnings per share 111,056 180,963
____________ ____________
____________ ____________
Number of shares:
Weighted average number of ordinary shares for the
purposes of basic earnings per share
2,770,710,769 1,920,041,595
Effect of dilutive potential ordinary shares on:
Convertible note 400,000,000 196,775,553
Options 989,714 -
____________ ____________
Weighted average number of ordinary shares for the
purposes of diluted earnings per share
3,171,700,483 2,116,817,148
____________ ____________
____________ ____________
The following table summarised the impact of both basic and
diluted earnings per share as a result of:
Impact on basic Impact on diluted
earnings per share earnings per share
2006 2005 2006 2005
cents cents cents cents
Figure before adjustments 4.29 9.40 3.74 8.55
Adjustments arising from changes
in accounting policies (0.51) (0.14) (0.24) -
_______ _______ _______ _______
Reported/restated 3.78 9.26 3.50 8.55
_______ _______ _______ _______
_______ _______ _______ _______
|