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.
|