ASIA COMM HOLD<00104> - Results Announcement
Asia Commercial Holdings Limited announced on 15/07/2005:
(stock code: 00104 )
Year end date: 31/03/2005
Currency: HKD
Auditors' Report: Unqualified
(Audited )
(Audited ) Last
Current Corresponding
Period Period
from 01/04/2004 from 01/04/2003
to 31/03/2005 to 31/03/2004
Note ('000 ) ('000 )
Turnover : 255,650 261,477
Profit/(Loss) from Operations : 6,544 34,377
Finance cost : (1,349) (1,362)
Share of Profit/(Loss) of
Associates : (167) (606)
Share of Profit/(Loss) of
Jointly Controlled Entities : N/A N/A
Profit/(Loss) after Tax & MI : 4,386 32,743
% Change over Last Period : -86.6 %
EPS/(LPS)-Basic (in dollars) : 0.0131 0.0981
-Diluted (in dollars) : N/A N/A
Extraordinary (ETD) Gain/(Loss) : N/A N/A
Profit/(Loss) after ETD Items : 4,386 32,743
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. POTENTIAL IMPACT ARISING FROM THE RECENTLY ISSUED ACCOUNTING
STANDARDS
The Hong Kong Institute of Certified Public Accountants ("HKICPA")
formerly named as Hong Kong Society of Accountants has issued a number of
new and revised Hong Kong Financial Reporting Standards ("new HKFRSs") and
Hong Kong Accounting Standards ("HKAS") which are effective for accounting
periods beginning on or after 1st January, 2005.
The Group has not early adopted these new HKFRSs in the financial
statements for the year ended 31st March, 2005. The Group has already
commenced an assessment of the impact of these new HKFRSs and has so far
concluded that the adoption of the new HKFRS3 "Business combinations"
would have impact on the financial statements as set out below:-
At present, positive goodwill is amortised in the consolidated income
statement on a straight-line basis over its estimated useful life.
Following the adoption of the new HKFRS3 for the financial year beginning
1st April, 2005, in respect of previously recognized positive goodwill,
amortization shall be discontinued and the goodwill shall be tested for
impairment in accordance with Hong Kong Accounting Standard 36 "Impairment
of assets".
Also, HKAS 40 requires all revaluation gains or losses of investment
properties to be taken directly to the income statement. Currently, such
changes are generally taken to the investment property revaluation reserve
by the Group.
The Group will be continuing with the assessment of the impact of the
other new HKFRSs and other significant changes may be identified as a
result.
2. TURNOVER AND OTHER REVENUE
Turnover represents the gross proceeds received and receivable
derived from the sales of watches, investment securities, property rental
and provision of programming service and is summarized as follows:
2005 2004
HK$'000 HK$'000
Turnover
Sales of watches 249,378 245,489
Rental income
Investment properties 3,633 3,835
Others 83 772
-------- --------
3,716 4,607
Investment securities - 7,960
Programming service 2,556 3,421
--------- --------
255,650 261,477
--------- --------
Other revenue
Interest income from other than short-term bank deposits
104 93
Interest income from short-term bank deposits
802 533
Customers service income and others
8,163 8,036
Profit on disposal of property held for resale
- 853
--------- --------
9,069 9,515
--------- --------
264,719 270,992
========= ========
3. OTHER OPERATING EXPENSES, NET
2005 2004
HK$'000 HK$'000
Provision for bad and doubtful debts
1,169 1,337
Provision for diminution in value of properties held for resale
10 297
Provision for slow-moving inventories
10,280 19,702
Written back of provision for bad and doubtful debts
(1,086) -
Written back of trade and other payables
(347) (208)
--------- ---------
10,026 21,128
========= =========
4. OTHER INCOME, NET
2005 2004
HK$'000 HK$'000
Impairment loss recognized in respect of goodwill
- (7,449)
Write off of fixed assets (212) (108)
Amortization of goodwill (461) (849)
Management fee (Note ) (6,013) -
Provision for impairment loss on leasehold property
(747) -
Deficit arising from valuation of an investment property
(3,006) -
Loss on disposal of property interests in Dongguan (Note)
(170) -
Profit on disposal of leasehold property
283 -
Profit on liquidation of a subsidiary
- 14
Final receipt of consideration from disposal of the Lakeview Project
21,107 47,361
--------- --------
10,781 38,969
======== =======
Note: On 13th January, 2005, a wholly owned subsidiary of the Group
entered into a sale and purchase agreement (the "Agreement") with an
independent third party (the "Purchaser") to dispose (the "Disposal") of
its entire interests (i.e. all the rights and obligations) derived from an
agreement dated 8th June, 1992 (the "Old Agreement") entered into with
Dongguan Houjie Town Economic Development Head Company(the "Chinese
Partner") in relation to the grant of the land use right of industrial
buildings in Dongguan, the PRC (the "Properties") for a term of 50 years.
The total cash consideration for the disposal was RMB19.9 million (or
approximately HK$18.8 million) and was paid by the Purchaser upon signing
of the Agreement.
The Properties comprises three blocks of industrial buildings and four
blocks of dormitory buildings and two buildings accommodating a staff
canteen and a power generator with a total gross floor area of
approximately 48,900 square meters within an industrial complex located at
No. 5, Industrial Zone, Houjie Town, Dongguan, the PRC. Pursuant to the
Old Agreement, the subsidiary had to pay monthly management fee to the
Chinese Partner for the grant of the land use right of the Properties.
Details of the disposal of Property Interests were set out in the press
announcement and the Company's Circular dated 19th January, 2005 and 7th
February, 2005 respectively.
As set out in the interim report for the period ended 30th September,
2004, the Chinese Partner requested the Group
to reactive its OEM manufacturing activities in the joint venture in
Dongguan, which had been dormant subsequent to the business restructuring
in 1997. Such request was considered by the Group as inconsistent with
the Group's corporate strategy since 1997. The Chinese Partner later
issued a written notice dated 15th September, 2004 demanding for
management fee for prior years amounting to RMB6,374,200 (approximately
HK$6.0 million) (the "Claim"). The Group did not admit the validity of
the Claim, however would consider any appropriate settlement proposals if
deemed to be in the best interest to the Group. The Disposal served as an
opportunity for the Group to settle the Claim because pursuant to the
Agreement, the Purchaser would assume the responsibility of settling the
Claim.
The assumption of responsibility for settling the Claim by the Purchaser
gave rise to approximately HK$6 million of gain on disposal of the
Properties, which thereby reduced the overall loss on disposal of property
interests in Dongguan to approximately HK$170,000.
Moreover, the Board is of the view that the Disposal represents an
opportunity to the Group to realise its non-core investments and the
proceeds thereof could strengthen the working capital position for the
operations of the core business of the Group.
5. PROFIT BEFORE TAXATION
Profit before taxation has been arrived at after crediting and charging
the following:
2005 2004
HK$'000 HK$'000
Crediting:
Gross gain on sale of investments in securities - other investments
- 2,166
Profit on disposal of property held for resale
- 853
Profit on disposal of fixed assets
79 -
Profit on disposal of leasehold property
283 -
Dividend from listed securities
- 48
--------------------------
Charging:
Depreciation on owned fixed assets
5,371 4,096
Amortization on Goodwill 461 849
Impairment loss recognized in respect of goodwill
- 7,449
Loss on disposal of Property Interests in Dongguan
170 -
Provision for impairment loss on leasehold property
747 -
Deficit arising from valuation of an investment property
3,006 -
-----------------------
6. EARNINGS (LOSS) PER SHARE
(a) Including the final receipt of consideration from the
disposal of Lakeview Project:
The calculation of the basic earnings per share for the year ended
31st March, 2005 and 2004 is computed based on the following data:
2005 2004
Earnings
Earnings for the
purpose of basic earnings per share HK$4,386,000 HK$32,743,000
-------------- ---------------
Number of shares
Weighted average number of ordinary shares for the
purpose of basic earnings per share 333,719,516 333,719,516
------------ ------------
(b) Excluding the final receipt of consideration from the
disposal of the Lakeview Project:
The calculation of the additional basic loss per
share for the year ended 31st March, 2005 and 2004 is computed based on
following data:
2005 2004
HK$ HK$
Earnings
Net profit for the year 4,386,000 32,743,000
Adjustment for:
Final receipt of consideration from the disposal of
the Lakeview Project (21,107,000) (47,361,000)
----------- ------------
Loss for the purpose of basic loss per share excluding
the final receipt of consideration from the disposal of the Lakeview
Project (16,721,000) (14,618,000)
------------ -------------
Number of shares
Same as those details above for basic earnings per share.
The additional basic loss per share figure is disclosed to give a clearer
indication of the underlying performance of the Group.
(c) No disclosure of the diluted earnings per share and additional
diluted loss per share for the year under review with comparative diluted
earnings per share and additional diluted loss per share for the previous
year is shown as the issue of potential ordinary shares during both years
from the exercise of the outstanding share options will be anti-dilutive.
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