ASIA ALLIANCE<00616> - Results Announcement
Asia Alliance Holdings Limited announced on 23/06/2006:
(stock code: 00616 )
Year end date: 31/03/2006
Currency: HKD
Auditors' Report: Unqualified
(Audited )
(Audited ) Last
Current Corresponding
Period Period
from 01/04/2005 from 01/04/2004
to 31/03/2006 to 31/03/2005
Note ('000 ) ('000 )
Turnover 3 : 58,039 53,662
Profit/(Loss) from Operations : (31,582) (2,514)
Finance cost : (1,275) (424)
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 4 : (32,857) 6,104
% Change over Last Period : N/A %
EPS/(LPS)-Basic (in dollars) 5 : (0.15) 0.17
-Diluted (in dollars) 5 : N/A N/A
Extraordinary (ETD) Gain/(Loss) : N/A N/A
Profit/(Loss) after ETD Items : (32,857) 6,104
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. SIGNIFICANT ACCOUNTING POLICIES
The consolidated financial statements have been prepared on the
historical cost basis.
The consolidated financial statements have been prepared in
accordance with Hong Kong Financial Reporting Standards ("HKFRS(s)")
issued by the Hong Kong Institute of Certified Public Accountants (the "
HKICPA"). In addition, the consolidated financial statements include
applicable disclosures required by the Rules Governing the Listing of
Securities on The Stock Exchange of Hong Kong Limited and by the Hong Kong
Companies Ordinance.
2. APPLICATION OF HONG KONG FINANCIAL REPORTING STANDARDS/CHANGES IN
ACCOUNTING POLICIES
In the current year, the Group has applied, for the first time, a
number of new HKFRSs, Hong Kong Accounting Standards ("HKAS(s)") and
Interpretations (hereinafter collectively referred to as "new HKFRSs")
issued by the HKICPA that are effective for accounting periods beginning
on or after 1 January 2005 except for HKFRS 3 "Business Combinations",
which is applicable for business combinations for which the agreement date
is on or after 1 January 2005. The adoption of the new HKFRSs has
resulted in changes to the Group's accounting policies in the following
areas that have an effect on how the results for the current accounting
period are prepared and presented.
Business combinations
In the current year, the Group has applied the transitional provisions of
HKFRS 3 "Business Combinations" to goodwill arising on business
combinations for which the agreement date was before 1 January 2005. The
principal effects of the application of the transitional provisions of
HKFRS 3 to the Group are summarised below:
Goodwill
In previous years, goodwill arising on business combinations for which the
agreement date was before 1 January 2005 was capitalised and amortised
over its estimated useful life. With respect to goodwill arising on
business combinations for which the agreement date was before
1 January 2005 and previously capitalised on the balance sheet on 1 April
2005, the Group eliminated the carrying amount of the related accumulated
amortisation of HK$1,920,000 with a corresponding decrease in the cost of
goodwill. The Group has discontinued amortising such goodwill from 1
April 2005 and goodwill will be tested for impairment at least annually.
As a result of this change in accounting policy, no amortisation of
goodwill has been charged in the current year. This change in accounting
policy has resulted in a decrease in loss for the current year of
approximately HK$2,304,000. Comparative figures for 2005 have not been
restated.
Share-based payments
In the current year, the Group has applied HKFRS 2 "Share-based Payment",
which requires an expense to be recognised where the Group 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 share options granted to
directors and employees of the Company, determined at the date of grant of
the share options, over the vesting period. Prior to the application of
HKFRS 2, the Group did not recognise the financial effect of these share
options until they were exercised. As all share options of the Group were
granted before 7 November 2002 and the Group did not have share options
granted after 7 November 2002, there is no financial effect on the loss or
profit for the current or prior accounting periods.
Owner-occupied leasehold interests in land
In the current year, the Group has applied HKAS 17 "Leases".
Under HKAS 17, the leasehold interests in land are reclassified to prepaid
lease payments under operating leases, which are carried at cost and
amortised over the lease term on a straight-line basis. As a result of
this change in accounting policy, prepaid lease payments of HK$8,814,000
and HK$183,000 have been recognised as non-current assets and current
assets respectively on the consolidated balance sheet at 31 March 2006,
there is no significant financial effect on the loss or profit for the
current or prior accounting periods.
The Group has not early applied the following new HKFRSs and HKFRS
interpretations ("HK(IFRIC) - INT") that have been issued but are not yet
effective. The directors of the Company have commenced considering the
potential impact of these new HKFRSs and HKFRS interpretations and
anticipate that the adoption of these new HKFRSs and HKFRS interpretations
should not result in any significant changes in the future as to how the
results and financial position are prepared and presented.
HKAS 1 (Amendment) Capital disclosures 1
HKAS 19 (Amendment) Actuarial gains and losses, group plans and
disclosures 2
HKAS 21 (Amendment) Net investment in a foreign operation 2
HKAS 39 (Amendment) Cash flow hedge accounting of forecast intragroup
transactions 2
HKAS 39 (Amendment) The fair value option 2
HKAS 39 and HKFRS 4 Financial guarantee contracts 2
(Amendments)
HKFRS 6 Exploration for and evaluation of mineral resources 2
HKFRS 7 Financial instruments: Disclosures 1
HK(IFRIC) - INT 4 Determining whether an arrangement contains a
lease 2
HK(IFRIC) - INT 5 Rights to interests arising from decommissioning,
restoration and environmental rehabilitation
funds 2
HK(IFRIC) - INT 6 Liabilities arising from participating in a
specific market - waste electrical and electronic
equipment 3
HK(IFRIC) - INT 7 Applying the restatement approach under HKAS 29
Financial Reporting in Hyperinflationary
Economies 4
HK(IFRIC) - INT 8 Scope of HKFRS 2 5
HK(IFRIC) - INT 9 Reassessment of embedded derivatives 6
1 Effective for annual periods beginning on or after 1 January 2007.
2 Effective for annual periods beginning on or after 1 January 2006.
3 Effective for annual periods beginning on or after 1 December
2005.
4 Effective for annual periods beginning on or after 1 March 2006.
5 Effective for annual periods beginning on or after 1 May 2006.
6 Effective for annual periods beginning on or after 1 June 2006.
3. BUSINESS AND GEOGRAPHICAL SEGMENTS
Business segments
The Group's primary format for reporting segment information is
business segments. For management purposes, the Group is currently
organised into three main operating divisions - bleaching and dyeing,
knitting and garment manufacturing. These divisions are the bases on
which the Group reports its primary segment information. During the year,
the Group established a new business of garment manufacturing. However,
there is no turnover contribution from this business as the production
plants are yet to be constructed. The divisions of wireless communication
business and communication solutions consultancy services were
discontinued by the management in view of the inactiveness of the relevant
businesses during the year. The discontinued operations during the year
did not have any significant impact on the results of the Group for the
current and prior accounting periods.
Segment information about these businesses is presented below:
For the year ended 31 March 2006
Income statement
Bleaching
and Garment
dyeing Knitting manufacturing Eliminations Consolidated
HK$'000 HK$'000 HK$'000 HK$'000 HK$'000
Turnover
External
57,936 103 - - 58,039
Inter-segment (note)
4 5,465 - (5,469) -
----------------------------------------------------------------------
Total
57,940 5,568 - (5,469) 58,039
=======================================================================
Segment result
(25,366)(1,434) (1,119) - (27,919)
=================================================
Interest income 1,291
Unallocated corporate expenses (4,954)
Finance costs (1,275)
--------
Loss for the year (32,857)
========
Note: Inter-segment sales are charged at prevailing market prices.
For the year ended 31 March 2005
Income statement
Continuing operations Discontinued operations
----------------------- -------------------------------
Communication
Bleaching Wireless solutions
and communication consultancy Elimi- Consol
dyeing Knitting business services nations idated
HK$'000 HK$'000 HK$'000 HK$'000 HK$'000 HK$'000
-------------------------------------------------------------------------
Turnover
External
53,218 444 - - - 53,662
Inter-segment (note)
- 2,945 - - (2,945) -
-------------------------------------------------------------------------
Total
53,218 3,389 - - (2,945) 53,662
========================================================================
Segment result
4,095 (2,370) 56 (11) - 1,770
==========================================================
Interest income 45
Unallocated corporate expenses (4,329)
Gain on disposal of subsidiaries 9,042
Finance costs (424)
-------
Profit for the year 6,104
=======
Note: Inter-segment sales are charged at prevailing market prices.
Geographical segments
An analysis of the Group's turnover by geographical market for the year is
as follows:
2006 2005
HK$'000 HK$'000
United States of America 366 -
The PRC 57,673 53,662
-----------------------
58,039 53,662
======================
4. PROFIT/(LOSS) AFTER TAXATION & MI include the following items:
2006 2005
HK$'000 HK$'000
Impairment loss recognised in respect of goodwill
(21,122) -
(Allowance) write back of allowance for doubtful debts
(3,882) 17
Impairment for a loan to Acme Landis
Operations Holdings Limited, a former
subsidiary - (403)
Gain on disposal of subsidiaries
- 9,042
----------------------
5. BASIC (LOSS) EARNINGS PER SHARE
The calculation of the basic (loss) earnings per share is based on the
following data:
2006 2005
HK$'000 HK$'000
(Loss) profit for the purposes of basic (loss)
earnings per share (32,857) 6,104
=======================
2006 2005
Number of shares
Weighted average number of shares for the purposes
of basic (loss) earnings per share
221,149,599 34,886,708
===========================
The number of shares for the purposes of calculating basic earnings per
share for the year ended 31 March 2005 has been adjusted to reflect the
consolidation of shares on the basis that ten shares were consolidated
into one share and the rights issue of shares in September 2005.
No diluted loss per share has been presented for the year ended 31
March 2006 as the exercise of the Company's outstanding share options
would reduce the loss per share for the year.
No diluted earnings per share was presented for the year ended 31
March 2005 as the exercise prices of the Company's outstanding share
options were higher than the average market price for that period.
The following table summarises the impact on basic (loss) earnings
per share as a result of:
Impact on basic
(loss) earnings per share
2006 2005
HK$ HK$
Reported figures before adjustment (0.16) 0.17
Adjustment arising from changes in accounting
policies (see note 2) 0.01 -
----------------------
Restated (0.15) 0.17
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