SANYUAN GROUP<00140> - Results Announcement
Sanyuan Group Limited announced on 21/04/2006:
(stock code: 00140 )
Year end date: 31/12/2005
Currency: HKD
Auditors' Report: Modified
(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 : 11,207 1,169
Profit/(Loss) from Operations : 12,544 225,898
Finance cost : (266) (9,641)
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 : 12,278 217,547
% Change over Last Period : -94.4 %
EPS/(LPS)-Basic (in dollars) : 0.013 0.459
-Diluted (in dollars) : 0.012 0.459
Extraordinary (ETD) Gain/(Loss) : N/A N/A
Profit/(Loss) after ETD Items : 12,278 217,547
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 OF FINANCIAL STATEMENTS
The Group had net current liabilities and capital deficiency of
HK$26,162,000 and HK$25,562,000 respectively at 31 December 2005. The
financial statements have been prepared on a going concern basis, the
validity of which depends upon the continuous financial support by the
Group's ultimate holding company at a level sufficient to finance the
Group's current activities. The Group's ultimate holding company has
confirmed its willingness to finance the Group's current activities.
Moreover, the Group's ultimate holding company has extended the maturity
date of the HK$30,000,000 convertible note from 7 December 2006 to 7
December 2007.
Should the Group fail to prepare the financial statements on a going
concern basis, adjustments would have to be made to the financial
statements to adjust the value of the Group's assets to their recoverable
amounts, to provide for any liabilities which might arise and to
reclassify non-current assets and liabilities as current assets and
liabilities respectively.
2. ADOPTION OF NEW AND REVISED HONG KONG FINANCIAL REPORTING
STANDARDS
In the current year, the Group has adopted all of the new and revised
Standards and Interpretations (hereinafter collectively referred to as new
HKFRSs) issued by the Hong Kong Institute of Certified Public Accountants
that are relevant to its operations and effective for accounting periods
beginning on or after 1 January 2005. The adoption of these new HKFRSs has
resulted in changes to the Group's accounting policies in the following
areas that have affected the amounts reported for the current or prior
year:
- presentation of financial statements (HKAS 1); and
- financial instruments (HKAS 32 and HKAS 39);
The impact of these changes in accounting policies is discussed below. The
adoption of the new HKFRSs has no impact on basic and diluted earnings per
share.
HKAS 1 Presentation of financial statements
HKAS 1 affects the presentation of minority interest and other disclosures
in the financial statements.
HKAS 32 Financial Instruments: Disclosure and Presentation &
HKAS 39 Financial Instruments: Recognition and Measurement
HKAS 32 Financial Instruments: Disclosure and Presentation requires
retrospective application and primarily addresses the classification of a
financial instrument issued by an entity and prescribes disclosure
requirements of financial instruments. HKAS 39 Financial Instruments:
Recognition and Measurement deals with recognition, measurement,
derecognition of financial instruments and also prescribes requirements
for hedge accounting. HKAS 39 generally does not permit the recognition,
derecognition or measurement of financial assets and liabilities on a
retrospective basis. The principal effects of the adoption of the
requirements of HKAS 32 and HKAS 39 are summarised below:
Investment securities
In 2004, the Group classified its equity securities in accordance with the
alternative treatment of Statement of Standard Accounting Practice 24
Accounting for Investments in Securities (SSAP 24). Under the alternative
treatment, investments in equity securities are classified as "trading
securities" or as "non-trading securities". Both "trading securities" and
"non-trading securities" are measured at fair value. Unrealised gains or
losses of "trading securities" are reported in profit or loss for the
period in which gains or losses arise while unrealised gains or losses of
"non-trading securities" are reported in equity until the securities are
sold or determined to be impaired, at which time the cumulative gain or
loss previously recognised in equity is included in profit or loss for
that period. In accordance with HKAS 39, investments in equity securities
are classified as either financial assets at fair value through profit or
loss or as available-for-sale, and are measured at subsequent reporting
dates at fair value. Changes in fair values of financial assets at fair
value through profit or loss are recognised in profit or loss as they
arise while changes in fair values of available-for-sale investments are
generally recognised in equity. The Group has applied the transitional
rules in HKAS 39. At 1 January 2005, the Group reclassified its trading
securities (other investments) with a carrying amount of HK$581,000 to
financial assets at fair value through profit or loss. Apart from this,
the adoption of the requirements of HKAS 39 in respect of equity
investments has had no other impact on the amounts reported for the
current or prior year.
At the date of authorisation of these financial statements, the following
Standards and Interpretations were in issue but not yet effective:
HKAS 1 (Amendment) Capital Disclosures
HKAS 19 (Amendment) Actuarial Gains and Losses, Group Plans
and Disclosures
HKAS 39 (Amendment) Cash Flow Hedge Accounting of Forecast
Intragroup Transactions
HKAS 39 (Amendment) The Fair Value Option
HKAS 39 and
HKFRS 4 (Amendments) Financial Guarantee Contracts
HKFRS 6 Exploration for and Evaluation of Mineral Resources
HKFRS 7 Financial Instruments: Disclosures
HKFRS - Int 4 Determining whether an Arrangement contains a Lease
HKFRS - Int 5 Rights to Interests Arising from Decommissioning,
Restoration and Environmental Rehabilitation Funds
HK(IFRIC) - Int 6 Liabilities arising from Participating in a
Specific Market - Waste Electrical and Electronic
Equipment
The directors anticipate that the adoption of these Standards and
Interpretations in future periods will have no material impact on the
financial statements of the Group.
3. PRINCIPAL ACCOUNTING POLICIES
The financial statements have been prepared in accordance with Hong Kong
Financial Reporting Standards issued by the Hong Kong Institute of
Certified Public Accountants. In addition, the financial statements are
prepared in accordance with the Companies Ordinance and include applicable
disclosures required by the Rules Governing the Listing of Securities on
the Stock Exchange of Hong Kong Limited.
4. TURNOVER AND REVENUE
(a) Turnover and revenue
2005 2004
HK$'000 HK$'000
Turnover
Sale and distribution of pharmaceutical
products 10,232 -
Laboratory testing service income 975 1,169
----------------------
11,207 1,169
Other revenue (note 4(b)) 442 -
----------------------
Total revenue 11,649 1,169
======================
(b) Other income
Interest income 99 -
Guarantee income earned 343 -
----------------------
Total other revenue 442 -
Holding gain on other investments - 217
Profit on disposal of other investments - 53
Gain on disposal of property, plant and
equipment - 7
Others 117 383
----------------------
559 660
======================
5. PROFIT BEFORE TAXATION
This is stated after charging (crediting):
2005 2004
HK$'000 HK$'000
(a) Finance costs
Interest on bank overdrafts and borrowings - 9,332
Interest on other borrowings wholly repayable within five years
266 309
----------------------
266 9,641
======================
2005 2004
HK$'000 HK$'000
(b) Other items
Guarantee income paid 36 -
Changes in fair value of financial
assets at fair value through profit or
loss 65 -
Realised loss on disposal of financial
assets at fair value through profit
or loss 26 -
Bad debt recovery (16) -
Contributions to defined contribution
plans 119 108
Exchange gain (19) -
Auditors' remuneration 550 390
Operating lease charges on premises 797 581
======================
6. TAXATION
No provision for Hong Kong Profits Tax is required since the Group has no
assessable profit for the year (2004: HK$Nil). Taxation for other
jurisdictions is calculated at the rates prevailing in the relevant
jurisdictions.
7. EARNINGS PER SHARE
The calculation of basic earnings per share for the year ended 31 December
2005 was based on the consolidated profit for the year attributable to
equity holders of the Company of HK$12,278,000 (2004: HK$217,547,000) and
the weighted average of 953,906,963 shares (2004: 473,668,922 shares) in
issue during the year.
The calculation of diluted earnings per share for the year ended 31
December 2005 was based on the consolidated profit for the year
attributable to equity holders of the Company of HK$12,278,000 (2004: HK$
217,547,000). The weighted average number of shares used in the
calculation was 953,906,963 shares (2004: 473,668,922 shares) in issue
during the year and the weighted average number of 45,930,701 shares
(2004: Nil) assumed to have been issued at no consideration on the deem
exercise or conversion of all the dilutive potential ordinary shares into
ordinary shares.
Number of shares
2005 2004
Shares
Weighted average number of ordinary share in
issue 953,906,963 473,668,922
Effect of dilution - weighted average number of ordinary shares to be
issued upon full conversion of convertible note
45,930,701 -
----------------------------
999,837,664 473,668,922
============================
AUDITORS' OPINION EXTRACTED FROM AUDITORS' REPORT
"Fundamental uncertainty
In forming our opinion, we have considered the adequacy of the disclosures
made in the financial statements concerning the basis of preparation of
financial statements adopted by the directors. As explained in note 2 to
the financial statements, the Group had net current liabilities and
capital deficiency of HK$26,162,000 and HK$25,562,000 respectively at 31
December 2005.
The financial statements have been prepared on a going concern basis, the
validity of which depends upon the continuous financial support by the
Group's ultimate holding company at a level sufficient to finance the
Group's current activities. The Group's ultimate holding company has
confirmed its willingness to finance the Group's current activities.
Moreover, as stated in note 20 to the financial statements, the Group's
ultimate holding company has extended the maturity date of the HK$30,000,
000 convertible note from 7 December 2006 to 7 December 2007. The
circumstances relating to this fundamental uncertainty are described in
note 2 to the financial statements. We consider that the fundamental
uncertainty has been adequately disclosed in the financial statements and
our opinion is not qualified in this respect.
Opinion
In our opinion, the financial statements give a true and fair view of the
state of the Company's and the Group's affairs as at 31 December 2005 and
of the Group's results and cash flows for the year then ended and have
been properly prepared in accordance with the Companies Ordinance."
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