ASIA COMM HOLD<00104> - Results Announcement
Asia Commercial Holdings Limited announced on 22/12/2005:
(stock code: 00104 )
Year end date: 31/03/2006
Currency: HKD
Auditors' Report: N/A
Interim report reviewed by: Both Audit Committee and Auditors
(Unaudited )
(Unaudited ) Last
Current Corresponding
Period Period
from 01/04/2005 from 01/04/2004
to 30/09/2005 to 30/09/2004
Note ('000 ) ('000 )
Turnover : 145,172 122,714
Profit/(Loss) from Operations : 540 (10,668)
Finance cost : (675) (675)
Share of Profit/(Loss) of
Associates : (21) (69)
Share of Profit/(Loss) of
Jointly Controlled Entities : N/A N/A
Profit/(Loss) after Tax & MI : (556) (11,272)
% Change over Last Period : N/A %
EPS/(LPS)-Basic (in dollars) : (0.0017) (0.0338)
-Diluted (in dollars) : N/A N/A
Extraordinary (ETD) Gain/(Loss) : N/A N/A
Profit/(Loss) after ETD Items : (556) (11,272)
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 condensed financial statements have been prepared in accordance with
the applicable disclosure requirements of Appendix 16 to the Rules
Governing the Listing of Securities on The Stock Exchange of Hong Kong
Limited (the "Stock Exchange") and with Hong Kong Accounting Standard No.
34 "Interim Financial Reporting" issued by the Hong Kong Institute of
Certified Public Accountants (the "HKICPA").
2. PRINCIPAL ACCOUNTING POLICIES
The condensed financial statements have been prepared under the historical
cost convention, as modified for certain properties which are measured at
fair value or revalued amounts, as appropriate.
The accounting policies adopted are consistent with those followed in the
preparation of the Group's annual financial statements for the year ended
31st March, 2005 except as described below.
In the current period, the Group has applied, for the first time, a number
of new Hong Kong Financial Reporting Standards ("HKFRSs"), Hong Kong
Accounting Standards ("HKASs") and Interpretations (hereinafter
collectively referred to as "new HKFRSs") issued by the HKICPA that are
effective for accounting periods beginning on or after 1st January 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 has been changed. The changes in
presentation have been applied retrospectively. The adoption of the new
HKFRSs has also resulted in changes to the Group's accounting policies in
the following areas.
(i) Share-based payment
HKFRS 2 "Share-based Payment" requires an expense to be recognized where
an entity 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 directors'
and employees' share options of the Group determined at the date of grant
of the share options over the vesting period. In accordance with the
transitional provisions of HKFRS 2, share options granted after 7th
November, 2002 and were unvested on 1st April 2005 were expensed
retrospectively in the income statement of the respective periods. As at
1st April, 2005, the Group had no option granted after 7th November, 2002
that had not yet vested on that day. Hence there is no impact on the
Group.
(ii) Business combinations
HKFRS 3 "Business Combinations" is effective for business combinations for
which the agreement date is on or after 1st January 2005. The principal
effects of the application of HKFRS 3 to the Group are summarised below:
Goodwill
In previous periods, goodwill arising on acquisitions prior to 1st April,
2001 was held in reserves, and goodwill arising on acquisitions after 1st
April 2001 was capitalised and amortised over its estimated useful life.
The Group has applied the relevant transitional provisions in HKFRS 3.
Goodwill previously recognized in reserves of HK$95.4 million has been
transferred to the Group's accumulated loss on 1st April, 2005. With
respect to goodwill previously capitalised on the balance sheet, the Group
has discontinued amortising such goodwill from 1st April 2005 onwards and
goodwill will be tested for impairment at least annually or in the
financial year in which the acquisition takes place. Goodwill arising on
acquisitions after 1st April 2005 is measured at cost less accumulated
impairment losses after initial recognition. As a result of this change in
accounting policy, no amortisation of goodwill has been charged in the
current period. Comparative figures are not required to be restated.
Excess of the Group's interest in the net fair value of acquiree's
identifiable assets, liabilities and contingent liabilities over cost (
previously known as "negative goodwill")
In accordance with HKFRS 3, any excess of the Group's interest in the net
fair value of acquiree's identifiable assets, liabilities and contingent
liabilities over the cost of acquisition ("discount on acquisition") is
recognized immediately in profit or loss in the period in which the
acquisition takes place. In previous periods, negative goodwill arising on
acquisitions prior to 1st April 2001 was held in reserves and negative
goodwill arising on acquisitions after 1st April 2001 was presented as a
deduction from assets and released to income based on an analysis of the
circumstances from which the balance was resulted. In accordance with the
relevant transitional provisions in HKFRS 3, the Group derecognized all
negative goodwill on 1st April, 2005 with a corresponding increase to
accumulated loss as at 1st April, 2005.
Contingent liabilities of acquirees
In accordance with HKFRS 3, contingent liabilities of an acquiree are
recognised at the date of the acquisition if the fair value of the
contingent liabilities can be measured reliably. Previously, contingent
liabilities of acquirees were not recognised separately from goodwill. As
no acquisitions took place in the current period, this change in
accounting policy has had no material effect on the goodwill calculation.
In addition, because the revised accounting policy has been applied
prospectively to acquisitions for which the agreement date is on or after
1st January 2005, comparative figures have not been restated.
(iii) Owner-occupied leasehold interest in land
In previous periods, owner-occupied leasehold land and buildings were
included in property, plant and equipment and is stated at cost or
valuation less depreciation and amortisation at the balance sheet date and
any accumulated impairment losses. Under HKAS 17 "Leases", the land and
buildings elements of a lease of land and buildings are considered
separately for the purpose of lease classification, unless the lease
payments cannot be allocated reliably between the land and buildings
elements, in which case, the entire lease is generally treated as a
finance lease. To the extent that the allocation of the lease payments
between the land and buildings elements can be made reliably, the
leasehold interests in land are reclassified to lease premium for land
under operating leases, which are carried at cost and amortised over the
lease term on a straight-line basis. Since the allocation between the land
and buildings elements cannot be made reliably, the leasehold interests in
land continue to be included in the cost of the land and building and
accounted for as property, plant and equipment. Hence, there is no impact
on the Group.
(iv) Investment properties
In previous periods, the Group's investment properties under the
predecessor standard were measured at open market values, with revaluation
surplus or deficits 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. 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.
The Group has applied the relevant transitional provisions in HKAS 40 and
elected to apply HKAS 40 from 1st April 2005 onwards. The amount held in
investment property revaluation reserve at 1st April 2005 has been
transferred to the Group's accumulated loss as at that date and the
financial impact on the Group is set out in note 3.
(v) Financial Instruments
In the current period, the Group has applied HKAS 32 "Financial
Instruments: Disclosure and Presentation" and HKAS 39 "Financial
Instruments: Recognition and Measurement". HKAS 32 requires retrospective
application. The application of HKAS 32 has had no material effect on the
presentation of financial instruments in the financial statements of the
Company. HKAS 39, which is effective for annual periods beginning on or
after 1st January, 2005, generally not permit to recognize, derecognise or
measure financial assets and liabilities on a retrospective basis. The
principle effects resulting from the implementation of HKAS 32 and HKAS 39
are summarized below:
Convertible Notes
HKSA 32 requires an issuer of a compound financial instrument (that
contains both financial liability and equity components) to separate the
compound financial instrument into the 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 convertible notes issued by the Company
that contain both liability and equity components. Given the convertible
notes of the Company contain only liability components and was previously
classified as liabilities on the balance sheet. Comparative figures need
not be restated. As there is no active market and same instrument (i.e.
without modification or repackaging) exist for fair value measurement, the
existing terms and its valuation method of the convertible notes is taken
as the nearest market reference between knowledgeable, willing parties in
an arm's length transaction. Hence, there is no impact on the Group upon
the adoption of HKAS 39.
Potential impact arising on the new accounting standards not yet effective
The Group has not early applied the new HKFRSs that have been issued but
are not yet effective. The Directors anticipate that the applications of
these new HKFRSs will have no material impact on the financial statements
of the Group.
3. SUMMARY OF THE EFFECTS OF THE CHANGES IN ACCOUNTING POLICIES
The effects of the changes in the accounting policies described in note 2
above are as follows:
(i) The adoption of HKAS 40 resulted in a decrease in accumulated loss
at 1st April, 2005 by HK$4,632,000;
(ii) The adoption of HKFRS 3 resulted in an increase in intangible
asset as at 30th September, 2005 by HK$230,000 and decrease in
administrative expense for the period ended 30th September, 2005 by the
same amount; and
(iii) The adoption of HKFRS 3 resulted in an increase in accumulated
loss at 1st April, 2005 by HK$95.4 million.
There was no impact on the balance sheet and income statement upon the
adoption of HKFRS 2,
HKAS 17, HKAS 32 and HKAS 39.
4. TURNOVER AND OTHER REVENUE
Six months ended
30th September,
2005 2004
HK$'000 HK$'000
(unaudited) (unaudited)
Turnover
Sales of watches 144,085 119,692
Rental income
Investment properties 609 1,785
Land and building - 46
Others - 298
609 2,129
Programming service 1,048 893
---------- --------
145,742 122,714
Other revenue
Interest income 1,236 222
Customer services income and others 3,385 3,638
4,621 3,860
---------- ---------
150,363 126,574
========== =========
5. OTHER OPERATING EXPENSES, NET
Six months ended
30th September,
2005 2004
HK$'000 HK$'000
(unaudited) (unaudited)
Allowances for bad and doubtful debts (19) (789)
Allowances for slow-moving inventories (6,372) (4,822)
Written back of trade and other
payables - 68
--------- ----------
(6,391) (5,543)
========= ==========
6. LOSS PER SHARE
The calculation of the basic loss per share attributable to the ordinary
equity holders of the parent for the six months ended 30th September, 2005
and 2004 is based on the following data:
Six months ended
30th September,
2005 2004
HK$ HK$
(unaudited) (unaudited)
Loss for the period attributable to
equity holders of the parent and
loss for the purpose of basic loss
per share 556,000 11,272,000
----------- ------------
Weighted average number of ordinary
share 333,719,516 333,719,516
=========== =============
No disclosure of the diluted loss per share for the period under review
and the corresponding previous period is shown as the issue of potential
ordinary shares during both periods from the exercise of the outstanding
share options will be anti-dilutive.
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