Guoco Group Limited — Audit Report / Information 2000

Aug 16, 2000

Listed Company Information

FE HOTELS<0037> - Further Results Announcement Further to the final results announcement of Far East Hotels & Entertainment Limited (the "Company") released on Teletext today (16/8/2000), the Company subsequently notified the Exchange the additional remark as follows:- "Remark (3) In prior years, pre-operating expenditure was capitalised and amortised on a straight line basis, over a period of five years from the date of commencement of commercial operations of the subsidiaries. The adoption of SSAP 1 has led to a re-assessment of this accounting policy. In particular, pre-operating expenditure is not considered to give rise to an identifiable resource from which economic benefits are expected to flow to the Group. Accordingly, such expenditure is now recognised as an expense in the period in which it is incurred. This change in accounting policy has been adopted retrospectively - resulting in a deduction of retained profits at 1st April, 1998 of HK$3,210,326 and a decrease in Group's loss in the prior year of HK$743,528 after the share of HK$410,044 by minority interest. Comparative amounts have been restated to reflect this change in accounting policy. Under SSAP 24, investments in securities are now classified as held-to-maturity (carried at amortised cost less provision for irrecoverable amounts), investment securities (carried at cost less impairment) and other investments (carried at fair value, with valuation movements dealt with in the income statement). In prior years, the Group's investments were classified either as long-term (carried at cost less provision for permanent diminution in value) or short-term (carried at the lower of cost and market value or at the lower of cost and net realisable value). The accounting treatment specified by SSAP 24 has been applied retrospectively - resulting in reduction of retained profits at 1st April, 1998 of HK$1,723,800, an increase in loss in the prior year of HK$236,600 and an increase in loss in the current year of HK$101,400. Comparative amounts have been restated to reflect this change in accounting policy."