WANG ON GROUP<01222> - Results Announcement
Wang On Group Limited announced on 06/07/2005:
(stock code: 01222 )
Year end date: 31/03/2005
Currency: HKD
Auditors' Report: Unqualified
(Audited )
(Audited ) Last
Current Corresponding
Period Period
from 01/04/2004 from 01/04/2003
to 31/03/2005 to 31/03/2004
Note ('000 ) ('000 )
Turnover : 364,123 296,565
Profit/(Loss) from Operations : 95,397 53,712
Finance cost : (4,326) (2,041)
Share of Profit/(Loss) of
Associates : (15,000) (10,307)
Share of Profit/(Loss) of
Jointly Controlled Entities : N/A N/A
Profit/(Loss) after Tax & MI : 70,127 29,285
% Change over Last Period : +139 %
EPS/(LPS)-Basic (in dollars) : 0.489 0.241
-Diluted (in dollars) : 0.470 0.228
Extraordinary (ETD) Gain/(Loss) : N/A N/A
Profit/(Loss) after ETD Items : 70,127 29,285
Final Dividend : 12.0 cents 7.0 cents
per Share
(Specify if with other : N/A N/A
options)
B/C Dates for
Final Dividend : 09/08/2005 to 12/08/2005 bdi.
Payable Date : 19/08/2005
B/C Dates for Annual
General Meeting : 09/08/2005 to 12/08/2005 bdi.
Other Distribution for : One bonus share for every five shares
Current Period
B/C Dates for Other
Distribution : 09/08/2005 to 12/08/2005 bdi.
Remarks:
1. IMPACT OF RECENTLY ISSUED HONG KONG FINANCIAL REPORTING STANDARDS
("HKFRSs") AND EARLY ADOPTION OF HKFRSs
The Hong Kong Institute of Certified Public Accountants has issued a
number of new Hong Kong Financial Reporting Standards, Hong Kong
Accounting Standards ("HKASs") and Interpretations, herein collectively
referred to as the new HKFRSs, which are generally effective for
accounting periods beginning on or after 1 January 2005.
The Group has early adopted the following new HKFRSs in the financial
statements for the year ended 31 March 2005:
"HKFRS 3"Business Combinations"
"HKAS 36"Impairment of Assets"
"HKAS 38"Intangible Assets"
"HKAS 40"Investment Property"
"Interpretation 24"Revenue - Pre-completion Contracts for the Sale of
Development Properties"
The major effect of the adoption of these HKFRSs are summarised as
follows:
(a) The adoption of HKFRS 3, HKAS 36 and HKAS 38 has resulted in a
change in the accounting policy for goodwill and negative goodwill. Prior
to this:
" goodwill arising from acquisitions after 1 April 2001 was amortised on
the straight-line basis over a period of not exceeding 20 years;
" goodwill was assessed for impairment at each balance sheet date;
" to the extent that negative goodwill did not relate to identifiable
expected future losses and expenses as at the date of acquisition,
negative goodwill arising from acquisitions after 1 April 2001 was
recognised in the consolidated profit and loss account on a systematic
basis over the remaining average useful life of the acquired depreciable/
amortisable assets; and
" on disposal of subsidiaries or associates, any attributable goodwill or
negative goodwill previously eliminated against or credited to the
consolidated reserves at the time of acquisition was written back and
included in the calculation of the gain or loss on disposal.
In accordance with the provisions of HKFRS 3:
"the Group ceased amortisation of goodwill from 1 April 2004;
"accumulated amortisation of goodwill arising on the acquisition of
subsidiaries and associates as at 1 April 2004 has been eliminated with a
corresponding decrease in the respective cost of goodwill at that date;
"from the year ended 31 March 2005 onwards, goodwill is tested annually
for impairment, as well as when there are indications of impairment;
"any excess of the Group's interest in the net fair value of the
identifiable assets, liabilities and contingent liabilities acquired as at
the date of acquisition over the cost of the business combination is
recognised immediately in the consolidated profit and loss account; and
"on disposal of subsidiaries or associates, any attributable goodwill
previously eliminated against the consolidated reserves at the time of
acquisition is transferred to consolidated retained profits as a movement
in reserves and not included in the calculation of the gain or loss on
disposal.
HKFRS 3 is early adopted and the effect of its adoption on these financial
statements in respect of the year ended 31 March 2005 is summarised as
follows:
"accumulated amortisation of goodwill arising on the acquisition of
subsidiaries and associates as at 1 April 2004 of HK$1,637,000 and HK$23,
999,000, respectively, have been eliminated with a corresponding decrease
in the respective cost of goodwill at that date;
"the excess of the Group's interest in the net fair value of identifiable
assets, liabilities and contingent liabilities of those companies acquired
by the Group during the year over cost of acquisitions in an aggregate
amount of HK$35,024,000 was fully recognised as income for the year
ended 31 March 2005; and
"in respect of disposal of a subsidiary during the year, the attributable
goodwill previously eliminated against the consolidated reserves at the
respective time of its acquisition of HK$926,000 is not included in the
calculation of the gain or loss on disposal.
(b) The adoption of HKAS 40 has resulted in a change in accounting
policy for the Group's investment properties.
Changes in valuation of the investment property were previously dealt with
in the investment property revaluation reserve, on a portfolio basis.
Following the adoption of HKAS 40, all changes in valuation of the
investment property would be recognised in the profit and loss account.
As permitted by the transitional requirements in HKAS 40, the comparative
statements for the year ended 31 March 2004 have not been restated to
conform to the new policy. The effect of the change in this accounting
policy on the consolidated financial statements in respect of the year
ended 31 March 2005 is to adjust the opening retained profits as at 1
April 2004 by reclassifying HK$4,696,000 held in the investment property
revaluation reserve.
(c) The adoption of Interpretation 24 has resulted in a change in
accounting policy for the recognition of revenue arising from pre-
completion contracts for the sale of development properties.
Prior to the adoption of Interpretation 24, the estimated profit on pre-
sold properties under development was recognised over the course of
development of the properties after execution of the formal sale and
purchase agreement. The amount of estimated profit was calculated based
on the proportion of construction costs incurred over the total estimated
construction costs to completion, after making due allowances for
contingencies, and limited to non-refundable cash deposits received. In
addition, properties under development which have been pre-sold were
stated at cost plus estimated attributable profits less foreseeable losses
and sales deposits received.
In accordance with the provisions of Interpretation 24, revenue arising
from pre-completion contracts for the sale of development properties that
do not fall within the scope of HKAS 11 "Construction Contracts" is
recognised when the significant risks and rewards of ownership have been
transferred to the buyer, provided that the Group maintains neither
managerial involvement to the degree usually associated with ownership,
nor effective control over the properties under development sold. Such
properties are stated at cost.
There is no impact on these financial statements on the adoption of this
interpretation as the Group did not have any pre-sold properties under
development during the years ended 31 March 2005 and 2004.
The Group has not early adopted other new HKFRSs except for those
mentioned above in the financial statements for
the year ended 31 March 2005. The Group has already commenced an
assessment of the impact of other new
HKFRSs but is not yet in a position to state whether other new HKFRSs
would have a significant impact on its results
of operations and financial position.
2. TAX
Hong Kong profits tax has been provided at the rate of 17.5% (2004: 17.5%)
on the estimated assessable profits arising in Hong Kong during the year.
2005 2004
HK$'000 HK$'000
Group:
Current - Hong Kong
Charge for the year 2,284 2,796
Underprovision/(overprovision) in prior years (141) 213
Deferred 2,112 809
------- -------
4,255 3,818
Share of tax attributable to associates 1,655 516
------- -------
Total tax charge for the year 5,910 4,334
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3. EARNINGS PER SHARE
The calculation of basic earnings per share is based on the net
profit attributable to shareholders for the year of HK$70,127,000 (2004:
HK$29,285,000), and the weighted average of 143,320,366 (2004: 121,746,
522) ordinary shares in issue during the year.
The calculation of diluted earnings per share is based on the net
profit attributable to shareholders for the year of HK$70,234,000 (2004:
HK$29,285,000) after adjustment for interest saved upon deemed exercise of
all convertible notes during the year. The weighted average number of
ordinary shares used in the calculation is the 143,320,366 (2004:121,746,
522) ordinary shares in issue during the year, as used in the basic
earnings per share calculation and the weighted average of 6,260,100 (
2004: 6,807,774) ordinary shares assumed to have been issued at no
consideration on the deemed exercise of all the share options and
convertible notes during the year.
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