Silkwave Inc — Earnings Release 2005

Apr 20, 2006

Listed Company Information

Listed Company Information
SOUTH CHINA H<00265> - Results Announcement South China Holdings Limited announced on 19/04/2006: (stock code: 00265 ) Year end date: 31/12/2005 Currency: HKD Auditors' Report: Unqualified (Audited ) (Audited ) Last Current Corresponding Period Period from 01/01/2005 from 01/01/2004 to 31/12/2005 to 31/12/2004 Note ('000 ) ('000 ) Turnover : 4,305,120 3,785,632 Profit/(Loss) from Operations : 187,174 213,831 Finance cost : (20,622) (10,408) Share of Profit/(Loss) of Associates : 46,099 (10,056) Share of Profit/(Loss) of Jointly Controlled Entities : N/A N/A Profit/(Loss) after Tax & MI : 96,574 124,201 % Change over Last Period : -22.2 % EPS/(LPS)-Basic (in dollars) : 0.053 0.068 -Diluted (in dollars) : N/A N/A Extraordinary (ETD) Gain/(Loss) : N/A N/A Profit/(Loss) after ETD Items : 96,574 124,201 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. EARNINGS PER SHARE ATTRIBUTABLE TO EQUITY HOLDERS OF THE COMPANY The calculation of the basic earnings per share amount is based on the profit for the year attributable to equity holders of the Company of approximately HK$96,574,000 (2004: HK$124,201,000) and 1,823,401,000 ( 2004: 1,823,401,000) ordinary shares in issue during the year. Diluted earnings per share amount for the two years ended 31 December 2004 and 2005 has not been disclosed as no diluting events existed during those years. 2. IMPACT OF NEW AND REVISED HONG KONG FINANCIAL REPORTING STANDARDS The Group early adopted HKASs 17, 36, 40 and HKFRS 3 in the financial statements for the year ended 31 December 2004. The following new and revised HKFRSs affect the Group and are adopted for the first time for the current year's financial statements: HKAS 1 Presentation of Financial Statements HKAS 2 Inventories HKAS 7 Cash Flow Statements HKAS 8 Accounting Policies, Changes in Accounting Estimates and Errors HKAS 10 Events after the Balance Sheet Date HKAS 12 Income Taxes HKAS 14 Segment Reporting HKAS 16 Property, Plant and Equipment HKAS 18 Revenue HKAS 19 Employee Benefits HKAS 21 The Effects of Changes in Foreign Exchange Rates HKAS 23 Borrowing Costs HKAS 24 Related Party Disclosures HKAS 27 Consolidated and Separate Financial Statements HKAS 28 Investments in Associates HKAS 31 Interests in Joint Ventures HKAS 32 Financial Instruments: Disclosure and Presentation HKAS 33 Earnings per Share HKAS 37 Provisions, Contingent Liabilities and Contingent Assets HKAS 39 Financial Instruments: Recognition and Measurement HKAS 39 Transition and Initial Recognition of Financial Assets and Amendment Financial Liabilities HKFRS 2 Share-based Payment HKFRS 5 Non-current Assets Held for Sale and Discontinued Operations HK(SIC)-Int 21 Income Taxes - Recovery of Revalued Non-depreciable Assets HK-Int 4 Leases - Determination of the Length of Lease Term in respect of Hong Kong Land Leases The adoption of HKASs 2, 7, 8, 10, 12, 14, 16, 18, 19, 23, 27, 28, 31, 33, 37, HKFRS 2, 5 and HK-Int 4 has had no material impact on the accounting policies of the Group and the Company and the methods of computation in the Group's and the Company's financial statements. HKAS 1 has affected the presentation of minority interests on the face of the consolidated balance sheet, consolidated income statement, consolidated statement of changes in equity and other disclosures. In addition, in prior periods, the Group's share of tax attributable to associates was presented as a component of the Group's total tax charge/( credit) in the consolidated income statement. Upon the adoption of HKAS 1, the Group's share of the post-acquisition results of associates is presented net of the Group's share of tax attributable to associates. HKAS 21 had no material impact on the Group. As permitted by the transitional provisions of HKAS 21, goodwill arising in a business combination prior to 1 January 2005 and fair value adjustments arising on that acquisition are deemed to be in the currency of the Company. In respect of acquisitions subsequent to 1 January 2005, any goodwill arising on the acquisition of a foreign operation and any fair value adjustments to the carrying amounts of the assets and liabilities are treated as assets and liabilities of the foreign operation and are translated at the closing rate in accordance with HKAS 21. HKAS 24 has expanded the definition of related parties and affected the Group's related party disclosures. The impact of adopting the other HKFRSs is summarised as follows: (a) HKAS 32 and HKAS 39 - Financial Instruments Equity securities In prior years, the Group classified its investments in equity securities as non-trading securities, which were held for non-trading purposes and were stated at their fair values on an individual basis with gains and losses recognised as movements in the investment revaluation reserve. Upon the adoption of HKAS 39, these securities and club debentures held by the Group at 1 January 2005 in the amount of HK$43,817 ,000 and HK$19,219,000, respectively are designated as available-for-sale financial assets under the transitional provisions of HKAS 39 and accordingly are stated at fair value with gains or losses being recognised as a separate component of equity until subsequent derecognition or impairment. In prior years, the Group classified its investments in equity securities for trading purposes as trading securities, and were stated at their fair values on an individual basis with gains and losses recognised in the income statement. Upon the adoption of HKAS 39, these securities held by the Group at 1 January 2005 in the amount of HK$68,775,000 are designated as financial assets at fair value through profit or loss under the transitional provisions of HKAS 39 and accordingly are stated at fair value with gains or losses being recognised in the income statement. The adoption of HKAS 39 has not resulted in any change in the measurement of these equity securities. Comparative amounts have been reclassified for presentation purposes. The effects of the above are summarised in note 2.4 to the financial statements. In accordance with the transitional provisions of HKAS 39, comparative amounts have not been restated. (b) HK(SIC)-Int 21 - Income Taxes - Recovery of Revalued Non- depreciable Assets In prior periods, deferred tax arising on the revaluation of investment properties was recognised based on the tax rate that would be applicable upon the sale of the investment properties. Upon the adoption of HK(SIC)-Int 21, deferred tax arising on the revaluation of the Group's investment properties is determined depending on whether the properties will be recovered through use or through sale. The Group has determined that its investment properties will be recovered through use, and accordingly the profits tax rate has been applied to the calculation of deferred tax. The effect of the above changes are summarised in note 2.4 to the financial statements. The changes has not resulted in any prior year adjustment. 3. SUMMARY OF THE IMPACT OF CHANGES IN ACCOUNTING POLICIES (a) Effect on the consolidated balance sheet Effect of adopting ------------------ At 1 January 2005 HKASs 32 and 39 * Change in classification Effect of new policies of equity (Increase/(decrease)) investments HK$'000 Assets Available-for-sale financial assets 63,036 Non-trading securities ( 43,817) Financial assets at fair 68,775 value through profit or loss Trading securities ( 68,775) Non current assets ( 19,219) _______ - ======= Liabilities/ equity Investment revaluation reserve 15,826 Available-for-sale financial assets revaluation reserve ( 15,826) _______ - ======= * Adjustments taken effect prospectively from 1 January 2005 The changes in accounting policies has had no impact to the balance of equity at 1 January 2004. Effect of adopting ----------------------------------------------- At 31 December 2005 HKASs 32 HKAS 39 HKAS 39 HK(SIC)-Int 21 and 39 Individual Deferred tax impairment/ on collective revaluation Change in impairment of classification Amortisation assessment investment Effect of of equity on loans on loans properties new policies investments receivable receivable Total (Increase/(decrease)) HK$'000 HK$'000 HK$'000 HK$'000 HK$'000 Assets Available-for-sale financial assets investments 41,328 - - - 41,328 Non-trading securities ( 22,662) - - - ( 22,662) Loans receivable - ( 1,427) 2,553 - 1,126 Financial assets at fair value through profit or loss 59,925 - - - 59,925 Trading securities ( 59,925) - - - (59,925) Non current assets ( 18,666) - - - (18,666) ______ 1,126 ======= Liabilities/equity Deferred tax liabilities - - - 19,795 19,795 Investment revaluation reserve (15,826) - - - (15,826) Available-for-sale financial assets revaluation reserve 15,826 - - - 15,826 Minority interest - (390) 698 - 308 Retained profits - (1,037) 1,855 (19,795) (18,977) ______ 1,126 ====== (b) Effect on the balances of equity at 1 January 2005 and 2004. Effect of adopting HKAS 39 Designation of available- Effect of new policies for-sale (Increase/(decrease)) financial assets HK$'000 1 January 2005 Investment revaluation reserve (15,826) Available-for-sale financial assets revaluation reserve 15,826 ______ - ====== The changes in accounting policies has had no impact to the balance of equity at 1 January 2004. (c) Effect on the consolidated income statement for the years ended 31 December 2005 and 2004 Effect of adopting -------------------------------------------------- HKAS 1 HKAS 39 HKAS 39 HK(SIC)- Individual Int 21 impairment/ Deferred collective tax on Share of post- impairment revaluation tax profits and Amortisation assessment of Effect of losses of on loans and on loans investment new policies associates receivables receivable properties Total HK$'000 HK$'000 HK$'000 HK$'000 Year ended 31 December 2005 --------------------------- Decrease/(increase) in other operating expenses - (1,427) 2,553 - 1,126 Increase in share of profits and losses of associates (28,060) - - - ( 28,060) Decrease/(increase) in tax 28,060 - - (19,795) 8,265 _________ _____ _____ ______ ______ Total increase/(decrease) in profit - (1,427) 2,553 (19,795) (18,669) ========= ===== ===== ====== ====== Increase/(decrease) in basic earnings per share - (0.08)cents 0.14cents (1.09)cents (1.02)cents ========== ========== ========== ========== ========== Increase/(decrease) in diluted earnings per share N/A N/A N/A N/A N/A ===== ====== ====== ===== ==== Year ended 31 December 2004 --------------------------- Increase in share of profits and losses of associates ( 553) - - - (553) Decrease/(increase) in tax 553 - - - 553 _________ _____ _____ ______ ______ Total increase/(decrease) in profit - - - - - ========= ===== ===== ====== ====== Increase/(decrease) in basic earnings per share - - - - - ========= ===== ===== ====== ====== Increase/(decrease) in diluted earnings per share N/A N/A N/A N/A N/A ========= ===== ===== ====== ======