Tradelink Electronic Commerce Limited — Earnings Release 2005

Mar 23, 2006

Listed Company Information

Listed Company Information
TRADELINK<00536> - Results Announcement Tradelink Electronic Commerce Limited announced on 23/03/2006: (stock code: 00536 ) 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 : 249,101 279,706 Profit/(Loss) from Operations : 110,293 83,637 Finance cost : N/A (3) Share of Profit/(Loss) of Associates : (787) N/A Share of Profit/(Loss) of Jointly Controlled Entities : N/A N/A Profit/(Loss) after Tax & MI : 91,397 62,993 % Change over Last Period : +45 % EPS/(LPS)-Basic (in dollars) : 0.125 0.088 -Diluted (in dollars) : 0.124 N/A Extraordinary (ETD) Gain/(Loss) : N/A N/A Profit/(Loss) after ETD Items : 91,397 62,993 Final Dividend : $0.03 N/A per Share (Specify if with other : N/A N/A options) B/C Dates for Final Dividend : 20/04/2006 to 25/04/2006 bdi. Payable Date : 03/05/2006 B/C Dates for Annual General Meeting : 20/04/2006 to 25/04/2006 bdi. Other Distribution for : N/A Current Period B/C Dates for Other Distribution : N/A Remarks: 1. The Listing Date and Basis of preparation The listing date was 28 October 2005. The consolidated financial statements have been prepared in accordance with all applicable Hong Kong Financial Reporting Standards ("HKFRSs"), which collective term includes all applicable individual Hong Kong Financial Reporting Standards, Hong Kong Accounting Standards ("HKASs") and Interpretations issued by the Hong Kong Institute of Certified Public Accountants ("HKICPA"), accounting principles generally accepted in Hong Kong and the requirements of the Hong Kong Companies Ordinance. 2. Turnover The principal business of the Company is the provision of front-end Government Electronic Trading Services for processing certain official trade-related documents. Turnover represents the value of services provided and goods supplied to customers. The amount of each significant category of revenue recognised in turnover is as follows: 2005 2004 (HK$'000) (HK$'000) Transaction and handling fees 225,724 253,042 Annual subscription and registration fees 19,120 19,799 Training income 170 329 Sales of software and related installation 42 182 Others 4,045 6,354 --------- --------- 249,101 279,706 ========= ========= 3. Consolidated Profit and Loss Account for the year ended 31 December 2005 2005 2004 (HK$'000) (HK$'000) Turnover 249,101 279,706 Interest income 8,064 5,093 Other net loss (1,170) (4,266) Staff costs (80,084) (82,964) Depreciation (15,559) (25,501) Impairment losses of investment in unlisted equity securities - (40,000) Other operating expenses (50,059) (48,431) ---------- --------- Profit from operations 110,293 83,637 Finance costs - (3) Share of losses of associates (787) - Gain/(loss) on disposal of subsidiary 347 (55) ---------- --------- Profit before taxation 109,853 83,579 Taxation (18,456) (20,586) ---------- --------- Profit attributable to equity shareholders of the Company 91,397 62,993 ========== ========= Profit before taxation is arrived at after charging: 2005 2004 (HK$'000) (HK$'000) Staff costs, including directors' remunerations - Salaries, wages and other benefits 76,981 80,706 - Contributions to defined contribution retirement plan 2,323 2,258 - Equity-settled share-based payment expenses 780 - Finance costs - Finance charges on obligations under finance leases - 3 Other items - Auditors' remunerations 401 111 - Depreciation - assets held for use under operating 107 - lease - other assets 15,452 25,501 - Operating lease charges in respect of properties 2,561 2,943 4. Earnings per share The calculation of the basic earnings per share is based on the profit attributable to ordinary equity shareholders of the Company of HK$91,397, 000 (2004: HK$62,993,000), and the weighted average number of 729,698,000 ordinary shares (2004 (restated): 719,313,000) in issue during the year. The calculation of the diluted earnings per share is based on the profit attributable to ordinary equity shareholders of the Company of HK$91,397, 000 (2004 (restated): HK$62,993,000), and the weighted average number of 734,107,000 ordinary shares. There were no dilutive shares in 2004. The weighted average number of ordinary shares in issue during 2004 has been restated giving effect to the share consolidation as if the event had occurred at 1 January 2004. 5. Changes in accounting policies The HKICPA has issued a number of new and revised HKFRSs that are effective or available for early adoption for accounting periods beginning on or after 1 January 2005. The adoption of these new HKFRSs did not result in substantial changes to the Group's accounting policies. The following sets out information on the changes in accounting policies for the current and prior accounting periods reflected in the financial statements. Changes in presentation (HKAS 1, Presentation of financial statements) Presentation of shares of associates' and jointly controlled entities' taxation (HKAS 1, Presentation of financial statements) In accordance with the implementation guidance in HKAS 1, the Group has changed the presentation and includes the share of taxation of associates and jointly controlled entities accounted for using the equity method in the respective shares of profit or loss reported in the consolidated income statement before arriving at the Group's profit or loss before tax. These changes have not resulted in any material changes to the previously reported presentation of shares of associates' and jointly controlled entities taxation. Employee share options scheme (HKFRS 2, Share-based payment) In order to comply with HKFRS 2, the Group has adopted a new policy for employee share options. The new accounting policy has been applied retrospectively with comparatives restated, except that the Group has taken advantage of the transitional provisions set out in HKFRS 2 under which the new recognition and measurement policies have not been applied. Details of the employee share option scheme can be found in the Group's annual report for the year ended 31 December 2005. Leasehold land and buildings (HKAS 17, Leases) Under the new policy, the leasehold interest in the land held for own use is accounted for as being held under an operating lease where the fair value of the interest in any buildings situated on the leasehold land could be measured separately from the fair value of the leasehold interest in the land at the time the lease was first entered into by the Group, or taken over from the previous lease, if later. Buildings held for own use which are situated on such land leases continue to be presented as part of property, plant and equipment. However, as from 1 January 2005 the buildings are also stated at cost less accumulated depreciation, rather than at fair value, to be consistent with the new policy required to be adopted for the land element. Financial instruments (HKAS 32, Financial instruments: Disclosure and presentation and HKAS 39, Financial instruments: Recognition and measurement) In prior years, equity investments held on a continuing basis for an identifiable long-term purpose were classified as investment securities and stated at cost less provision. With effect from 1 January 2005, and in accordance with HKAS 39, all investments, with the exception of securities held for trading purposes, dated debt securities being held to maturity and certain unquoted equity investments, are classified as available-for-sale securities and carried at fair value. Changes in the fair value of available-for-sale securities are recognised in equity, unless there is objective evidence that an individual investment has been impaired. There are no material adjustments arising from the adoption of the new policies for securities held for trading purposes, debt securities being held to maturity and unquoted equity investments not carried at fair value. Definition of related parties (HKAS 24, Related party disclosures) As a result of the adoption of HKAS 24, Related party disclosures, the definition of related parties has been expanded to clarify that related parties include entities that are under the significant influence of a related party that is an individual (i.e. key management personnel, significant shareholders and/or their close family members) and post- employment benefit plans which are for the benefit of employees of the Group or of any entity that is a related party to the Group. The clarification of the definition of related parties has not resulted in any material changes to the previously reported disclosures of related party transactions nor has it had any material effect on the disclosures made in the current period, as compared to those that would have been reported had SSAP 20, Related party disclosures, still been in effect.