Cocoon Holdings Limited — Earnings Release 2005

Jul 4, 2005

Listed Company Information

Listed Company Information
CITIC 21CN<00241> - Results Announcement CITIC 21CN Company Limited announced on 04/07/2005: (stock code: 00241 ) 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 : 249,058 163,947 Profit/(Loss) from Operations : 34,711 (800) Finance cost : (1,221) (578) Share of Profit/(Loss) of Associates : N/A N/A Share of Profit/(Loss) of Jointly Controlled Entities : N/A N/A Profit/(Loss) after Tax & MI : 25,420 (2,035) % Change over Last Period : N/A % EPS/(LPS)-Basic (in dollars) : 0.0077 (0.0006) -Diluted (in dollars) : 0.0076 N/A Extraordinary (ETD) Gain/(Loss) : N/A N/A Profit/(Loss) after ETD Items : 25,420 (2,035) 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) Basis of preparation The accounts have been prepared under the historical cost convention in conforming with Hong Kong Financial Reporting Standards issued by the Hong Kong Institute of Certified Public Accounts (the "HKICPA") . The HKICPA has issued a number of new and revised Hong Kong Financial Reporting Standards and Accounting Standards ("new HKFRSs") which are effective for accounting periods beginning on or after 1st January 2005. The Group has early adopted in advance of the effective date the following new HKFRSs that are believe to have the most material effect on the Group's accounts for the year ended 31st March 2005: Hong Kong Financial Reporting Standard 3 (new "HKFRS 3") Business Combinations Hong Kong Accounting Standard 31 (revised "HKAS 31") Interests in Joint Ventures Hong Kong Accounting Standard 36 (revised "HKAS 36") Impairment of Assets Hong Kong Accounting Standard 38 (revised "HKAS 38") Intangible Assets The key impact to the accounts of the Group on adopting these new HKFRSs is as follows: (i) proportionate consolidation method under HKAS 31 was applied for accounting the Group's investment in jointly controlled entities; (ii) amortisation of negative goodwill ceased from 1st April 2004; and (iii) negative goodwill as at 1st April 2004 has been derecognised and credited to equity. HKAS 31 has been adopted retrospectively, as required under the standard. As a result, the comparative figures for the consolidated balance sheet as at 31st March 2004 and the consolidation profit and loss account and consolidated cash flow statement for the year ended 31st March 2004 have been restated but the change has no effect on the reserves of the Group as at 31st March 2004. HKFRS 3, HKAS 36 and HKAS 38 have been applied prospectively in accordance with the transitional provisions in the respective standards. In particular, negative goodwill arising on acquisition as at 1st April 2004 has been derecognised in accordance with the transitional provision of HKFRS 3, resulting in an increase in reserves of HK$4,854,000 and a decrease in negative goodwill of the same amount. HKFRS 3 permits to apply the requirements of the HKFRS from any date before the effective date, provided: (i) the valuations and other information needed to apply the HKFRS to past business combinations were obtained at the time those combinations were initially accounted for; and (ii) the entity also applies the revised versions of HKAS 36 and HKAS 38 prospectively from that same date, and the valuations and other information needed to apply those Standards from that date were previously obtained by the entity so that there would be no need to determine estimates that would need to have been made at prior date. However, HKAS 36 and HKAS 38 do not have impact to the Group. The Group has not early adopted the other new HKFRSs except for those mentioned above in the accounts for the year ended 31 March 2005. The Group has already commenced an assessment of the impact of the other new HKFRSs and considered that the following new HKFRSs may have an impact to the Group's results of operations and financial position: HKFRS 2 Share - based payment HKAS 16 Property, plant and equipment HKAS 17 Leases HKAS 32 Financial Instruments: Disclosure and Presentation HKAS 39 Financial Instruments: Recognition and Measurement The Directors however consider that, apart from HKFRS 2, the impact of those new HKFRSs would not be significant. (2) Analysis of turnover and profit from continuing and discontinuing operations Turnover Profit / (Loss) from Operations As restated As restated 2005 2004 2005 2004 HK$'000 HK$'000 HK$'000 HK$'000 Continuing operations 249,058 161,721 45,724 5,652 Discontinuing operations (Note (3)) - 2,226 - 918 ------- ------- ------ ------ 249,058 163,947 45,724 6,570 ======= ======= Net profit/(loss) on disposal of discontinuing operations (Note (3)) - 903 Unallocated corporate income and expenses (11,013)(8,273) ------- ------- 34,711 (800) ======= ======= (3) Discontinuing operations Gain/(Loss) on disposal of Profit / (Loss) discountinuing Turnover from Operations operations 2005 2004 2005 2004 2005 2004 HK$'000 HK$'000 HK$'000 HK$'000 HK$'000 HK$'000 Net profit/(loss) on discontinuing operations: Telecommunication (note (a)) - - - - - 1,436 Property investment (note (b)) - 2,226 - 918 - (533) ------- ------ ------- ------ ------- -------- - 2,226 - 918 - 903 ======= ====== ======= ====== ======= ======== (a) The telecommunication business was carried out by Wanbao Telecom (H.K.) Company, Limited ("Wanbao"), in which the Group had a 36% equity interest. The Group entered into agreements with the other shareholders of Wanbao in 2004, under which the Group terminated its commitment in respect of Wanbao and dispose of all its interest in Wanbao. (b) In 2004, the Group transferred all its investment properties and leasehold land and buildings in Mainland China to a wholly-owned subsidiary, which was then disposed of to two subsidiaries of CITIC Group, a substantial shareholder of the Company. (4) Profit/(Loss) from operations included:- 2005 2004 HK$'000 HK$'000 Negative goodwill Acquisition of an associated company 19,215 - Acquisition of additional interest in a jointly controlled entity 1,188 - Gain on disposal of subsidiaries 13,103 - Bad debts recovered 10,000 7,000 Write back of long outstanding payables 6,775 - Provision for litigation written back - 6,868 ======= ====== (5) Earnings/(loss) per share The calculation of earnings per share is based on the profit attributable to shareholders of HK$25,420,000 (2004: loss of HK$2,035,000) and on the weighted average of 3,287,423,186 (2004: 3,139,568,795) shares in issue during the year. The calculation of diluted earnings per share for the year ended 31st March 2005 is based on the following: Number of shares Weighted average number of shares for calculating basic earnings per share 3,287,423,186 Effect of dilutive potential shares Share options 54,010,629 Warrants - ---------------- Weighted average number of shares for calculating diluted earnings per share 3,341,433,815 ================ The diluted loss per share for the year ended 31st March 2004 was not presented as the exercise of the share options outstanding as at 31st March 2004 would not have a dilutive effect on the loss per share.