Listed Company Information
 

SOUNDWILL HOLD<00878> - Results Announcement

Soundwill Holdings Limited announced on 16/09/2005:
(stock code: 00878 )
Year end date: 31/12/2005
Currency: HKD
Auditors' Report: N/A
Interim report reviewed by: Audit Committee

                                                        (Unaudited )
                                     (Unaudited )       Last
                                     Current            Corresponding
                                     Period             Period
                                     from 01/01/2005    from 01/01/2004
                                     to 30/06/2005      to 30/06/2004
                               Note  ('000      )       ('000      )
                                                        (Restated)
Turnover                           : 74,425             63,214            
Profit/(Loss) from Operations      : 241,140            41,837            
Finance cost                       : (17,966)           (19,607)          
Share of Profit/(Loss) of 
  Associates                       : (61)               (19)              
Share of Profit/(Loss) of
  Jointly Controlled Entities      : N/A                N/A               
Profit/(Loss) after Tax & MI       : 183,065            15,832            
% Change over Last Period          : +1,056    %
EPS/(LPS)-Basic (in dollars)       : 1.21               0.15              
         -Diluted (in dollars)     : 0.99               0.15              
Extraordinary (ETD) Gain/(Loss)    : N/A                N/A               
Profit/(Loss) after ETD Items      : 183,065            15,832            
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 

The unaudited condensed consolidated financial statements have been 
prepared in accordance with Hong Kong Accounting Standard 34 "Interim 
Financial Reporting" issued by the Hong Kong Institute of Certified Public 
Accountants ("HKICPA") and with the applicable disclosure requirements of 
Appendix 16 to the Rules Governing the Listing of Securities (the "Listing 
Rules") on The Stock Exchange of Hong Kong Limited (the "Stock Exchange").

2.      PRINCIPAL ACCOUNTING POLICIES
The accounting policies and methods of computation used in the preparation 
of these condensed consolidated financial statements are consistent with 
those used in the annual financial statements for the year ended 31 
December 2004 except that the Group has changed certain of its accounting 
policies following its adoption of new / revised Hong Kong Financial 
Reporting Standards, Hong Kong Accounting Standards and Interpretations 
("new HKFRS") which are effective for accounting period commencing on or 
after 1 January 2005.

These interim financial statements have been prepared in accordance with 
those HKFRS issued and effective as at the time of preparing these 
information. The new HKFRS that will be applicable at 31 December 2005, 
including those that will be applicable on an optional basis, are not 
known with certainty at the time of preparing these interim financial 
statements.

The changes to the Group's accounting policies and the effect of adopting 
these new policies are set out below: -

Presentational changes

The adoption of HKAS 1 "Presentation of Financial Statements" has affected 
the presentation of minority interests and share of after-tax results of 
associates. In the consolidated balance sheet, minority interests are now 
shown within total equity. In the consolidated income statement, minority 
interests are presented as an allocation of the total profit for the 
period.

Share-based Payments

The adoption of HKFRS 2 "Share-based Payment" has resulted in a change in 
accounting policy for share-based payments. The principal impact of HKFRS 
2 on the Group is in relation to the expensing of the fair value of 
directors' and employees' share options of the Company determined at the 
date of grant of the share options over the vesting period. Prior to the 
adoption of HKFRS 2, the Group did not recognize the financial effect of 
these share options until they were exercised. According to the 
transitional provision of HKFRS 2, the share options granted after 7 
November 2002 that had not yet vested at the first application of this 
standard are required to be recognised retrospectively in the Group's 
financial statements.

Investment Properties

In the current period, the Group has, for the first time, applied HKAS 40 
"Investment Property".  The Group has elected to use the fair value model 
to account for its investment properties which requires gains or losses 
arising from changes in the fair value of investment properties to be 
recognised directly in the profit or loss for the period in which they 
arise.  In previous periods, investment properties under the SSAP 13 were 
measured at open market values, with revaluation surplus or deficit 
credited or charged to investment property revaluation reserve unless the 
balance on this reserve was insufficient to cover a revaluation decrease, 
in which case the excess of the revaluation decrease over the balance on 
the investment property revaluation reserve was charged to the income 
statement.  Where a decrease had previously been charged to the income 
statement and revaluation subsequently arose, that increase was credited 
to the income statement to the extent of the decrease previously charged.  
The Group has applied the relevant transitional provisions in HKAS 40 as a 
result of which, the amount held in investment property revaluation 
reserve at 1 January 2005 has been transferred to the Group's accumulated 
losses.

The adoption of HKAS 40 has resulted in a change of classification of 
certain properties which were previously classified as investment 
properties according to SSAP 13.  In previous periods, property with 15% 
or less by area of value that was occupied by the Company or another 
company in the Group would normally be regarded as an investment property 
in its entirety even though part of it was not held for investment 
purposes.  According to HKAS 40, if a portion of the properties could be 
sold separately (or leased out separately under a finance lease), an 
entity accounts for the portion separately.  If the portion could not be 
sold separately, the property is investment property only if an 
insignificant portion is held for use in the production or supply of goods 
or services or for administrative purposes.  In the current period, the 
Group applied HKAS 40 and has reclassified certain such owner-occupied 
properties that could be sold separately (or leased out separately under a 
finance lease) from investment properties to property, plant and equipment 
retrospectively.  Comparative figures for 2004 have been restated.

Accordingly, the amount previously held in investment property revaluation 
reserve relating to these owner-occupied properties has been reclassified 
to the Group's asset revaluation reserve.  Any difference resulting 
between the carrying amount and the fair value of these properties is 
recognised in equity as a revaluation of property, plant and equipment 
under HKAS 16.  

Deferred taxes related to investment properties 

In previous period, deferred tax consequences in respect of revalued 
investment properties were assessed on the basis of the tax consequence 
that would follow from recovery of the carrying amount of the properties 
through sale in accordance with the predecessor interpretation (SSAP-
Interpretation 20).  In the current period, the Group has applied HKAS-
Interpretation 21 ("INT-21") "Income Taxes - Recovery of Revalued Non-
Depreciable Assets" which removes the presumption that the carrying amount 
of investment properties are to be recovered through sale.  Therefore, the 
deferred tax consequences of the investment properties are now assessed on 
the basis that reflect the consequences that would follow from the manner 
in which the Group expects to recover the property at each balance sheet 
date.  In the absence of any specific transitional provisions in INT-21, 
this change in accounting policy has been applied retrospectively.  
Comparative figures for 2004 have been restated.

Owner-occupied leasehold interest in land

Upon adoption of HKAS 17, the Group's leasehold interest in land and 
buildings (excepting leasehold interests in investment properties) is 
separated into leasehold land and leasehold buildings. The Group's 
leasehold land is classified as an operating lease, because the title of 
the land is not expected to pass to the Group by the end of the lease 
term, and is reclassified as prepaid land premium, while any buildings 
held for own use is presented as part of property, plant and equipment and 
stated at fair value. The separation of the leasehold interest in land and 
in building is determined by the Directors of the Company according to 
their best estimation. Prepaid land premiums for land lease payments under 
operating leases are initially stated at cost and subsequently amortised 
on the straight line basis over lease term. 

Convertible Bonds

The adoption of HKAS 32 "Financial Instruments: Disclosure and 
Presentation" and HKAS 39 "Financial Instruments: Recognition and 
Measurement" has resulted in a change in the accounting policy for 
recognition, measurement, derecognition and disclosure of convertible 
bonds

Under HKAS 32, convertible bonds issued are split into their liability and 
equity components at initial recognition by recognizing the liability 
component at its fair value which is determined using a market interest 
rate for equivalent non-convertible bonds 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 recognized in the 
capital reserve until the bond is either converted (in which case it is 
transferred to share premium) or the bond is redeemed (in which case it is 
released directly to retained profits). In prior year, convertible bonds 
were stated at face value. Retrospective application is required on 
adoption of HKAS 32.

Under HKAS 39, equity investments held on a continuing basis for an 
identifiable long-term purpose are classified as available-for-sale 
financial assets and are carried at fair value, with changes in fair 
values recognised in the equity. Prospective application is required on 
adoption of HKAS 39. Comparative amounts have not been restated.

Goodwill and Intangible Assets

The adoption of HKFRS 3 "Business Combinations", HKAS 36 "Impairment of 
Assets" and HKAS 38 "Intangible Assets" results in changes in the 
accounting policy for goodwill and prospective application is required. 
Until 31 December 2004, goodwill was amortised on a straight line basis 
over its useful life of 20 years and was subject to impairment testing 
when there were indication of impairment. In accordance with the 
provisions of HKFRS 3, the Group ceased amortisation of goodwill from 1 
January 2005; whilst the accumulated amortisation as at 31 December 2004 
has been deducted from the cost of goodwill and, from the year ending 31 
December 2005 onwards, goodwill will be tested annually for impairment. 
This results in a decrease of amortisation of goodwill of approximately 
HK$37,000 as compared to last period.

The Group has reassessed the useful lives of its intangible assets in 
accordance with the provision of HKAS 38. No adjustment resulted from this 
reassessment.

The Group has not early applied the following new Standards or 
Interpretation that has been issued but are not yet effective. The 
Directors of the Company anticipate that the application of these 
Standards or Interpretation will have no material impact on the financial 
statements of the Group:

HKAS 19 (Amendment)             Actuarial Gains and Losses, Group Plans 
and Disclosures
HKAS 39 (Amendment)             Transition and Initial Recognition of 
Financial Assets and Financial Liabilities
HKAS 39 (Amendment)             Cash Flow Hedge Accounting of Forecast 
Intragroup Transactions
HKAS 39 (Amendment)             The Fair Value Option
HKFRS-Interpretation 4          Determining whether an Arrangement 
Contains a Lease

3.      EARNINGS PER SHARE

The calculation of basic earnings per share is based on the unaudited 
consolidated profit attributable to equity holders of the Company of HK$
183,065,000 (30 June 2004: approximately HK$15,832,000 (restated)) and the 
weighted average of 151,479,017 shares (30 June 2004: 106,005,071 shares) 
in issue during the six months ended 30 June 2005.

The calculation of diluted earnings per share is based on the adjusted net 
profit attributable to equity holders of the Company of HK$184,094,000 and 
the weighted average of 186,867,570 shares (30 June 2004: 106,005,071 
shares) outstanding during the period adjusted for the effect of all 
dilutive shares. 

The adjusted net profit attributable to equity holders of the Company is 
calculated on the net profit for the period of HK$183,065,000 plus the 
reduction in interest payable of HK$1,029,000 as a result of the deemed 
conversion of convertible bonds.

The weighted average number of shares used in calculation of diluted 
earnings per share is calculated based on the weighted average of 151,479
,017 shares in issue during the period plus the weighted average of 35,
388,553 shares deemed to be issued at no consideration as if all the 
dilutive potential shares been issued.