PEARLRIVER TYRE<01187> - Results Announcement
Pearl River Tyre (Holdings) Limited announced on 06/04/2006:
(stock code: 01187 )
Year end date: 31/12/2005
Currency: HKD
Auditors' Report: Unqualified
(Restated)
(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 : 554,701 432,901
Profit/(Loss) from Operations : 12,165 (6,396)
Finance cost : (5,142) (5,527)
Share of Profit/(Loss) of
Associates : N/A 4,440
Share of Profit/(Loss) of
Jointly Controlled Entities : N/A N/A
Profit/(Loss) after Tax & MI : 7,023 (7,483)
% Change over Last Period : N/A %
EPS/(LPS)-Basic (in dollars) : 0.067 (0.071)
-Diluted (in dollars) : N/A N/A
Extraordinary (ETD) Gain/(Loss) : N/A N/A
Profit/(Loss) after ETD Items : 7,023 (7,483)
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) The above results are the audited consolidated results of Pearl
River Tyre (Holdings) Limited (the "Company") and its subsidiaries (the "
Group") for the financial year ended 31 December 2005 (the "financial
year") together with the comparative figures for the financial year ended
31 December 2004 (the "previous financial year").
The Hong Kong Institute of Certified Public Accountants ("HKICPA")
has issued a number of new and revised Hong Kong Financial Reporting
Standards which also include all Hong Kong Accounting Standards ("HKAS")
and Interpretations (HK(SIC)-Int") ("collectively HKFRSs") which are
effective for accounting periods beginning on or after 1 January 2005.
The financial statements have been prepared in accordance with the
applicable disclosure requirements issued by the HKICPA and relevant
provisions thereof.
The accounting policies and basis of preparation used in the
preparation of the financial statements are the same as those used in the
annual financial statements for the financial year ended 31 December 2004
except for the new adoption of HKAS 17 - Lease, HKFRS 3 - Business
Combinations and HKAS 31 - Interest in Joint Ventures issued by the HKICPA
which became effective during the financial year.
The major effects on the new adoption of the accounting standards
are summarised as follows:
(a) HKAS 17 - Lease
The adoption of HKAS 17 requires the Group to classify the land
under a long-term lease as an operating lease if the risks and rewards
incidental to ownership will not be transferred to the lessee. The
comparative in respect of the property, plant and equipment has been
restated whereby the land held under operating lease is now presented as
operating lease prepayments. The effect of the reclassification of the
comparative is as follows:-
As
Restated And
As After Prior Effect Of
Previously Year Adoption Of As
Reported Adjustments HKFRS Restated
THE GROUP HK$'000 HK$'000 HK$'000 HK$'000
BALANCE SHEET (EXTRACT):-
Property, plant and equipment
546 200,689 (13,631) 187,058
Operating lease prepayments
- - 13,631 13,631
-----------------------------------------------------------
(b) HKFRS 3 - Business Combinations and HKAS 36 - Impairment of Assets
In prior periods:-
(i) positive or negative goodwill which arose prior to 1 January 2001
was taken directly to reserves at the time it arose, and was not
recognised in the income statement until disposal or impairment of the
acquired business;
(ii) positive goodwill which arose on or after 1 January 2001 was
amortised on straight-line basis over its useful life and was subject to
impairment testing when there were indications of impairment; and
(iii) negative goodwill which arose on or after 1 January 2001 was
amortised over the weighted average useful life of the depreciable/
amortisable non-monetary assets acquired, except to the extent it related
to identified expected future losses as at the date of acquisition. In
such cases it was recognised in the income statement as those expected
losses were incurred.
With effective from 1 January 2005, in order to comply with HKFRS
3 and HKAS 36, the Group has changed its accounting policies relating to
goodwill. Under the new policy, the Group no longer amortises positive
goodwill. Such goodwill is tested annually for impairment, including in
the year of its initial recognition, as well as when there are indications
of impairment. Impairment losses are recognised when the carrying amount
of the cash generating unit to which the goodwill had been allocated
exceeds its recoverable amount. Also with effect from 1 January 2005 and
in accordance with HKFRS 3, if the fair value of the net assets acquired
in a business combination exceeds the consideration paid (i.e. an amount
arises which would have been known as negative goodwill under the previous
accounting policy), the excess is recognised immediately in the income
statement as it arises.
In accordance with the transitional arrangements under HKFRS 3
negative goodwill which had previously been taken directly to reserve (i.
e. negative goodwill which arose before 1 January 2001) has been
derecognised as at 1 January 2005 with a corresponding adjustment to the
opening accumulated losses. The effect of the reclassification of the
comparative is as follows:-
As
Restated And
As After Prior Effect Of
Previously Year Adoption Of As
Reported Adjustments HKFRS Restated
THE GROUP HK$'000 HK$'000 HK$'000 HK$'000
BALANCE SHEET (EXTRACT):-
Capital reserves
41,866 41,866 (4,522) 37,344
Accumulated losses
(18,760) (18,946) 4,522 (14,424)
-------------------------------------------------------------
(c) HKAS 31 - Interest in Joint Ventures
Previously, the Joint Venture had been accounted for in the consolidated
financial statements using the equity method. During the financial year,
the Group changed the accounting policy from the equity method to the
proportionate consolidation method, in accordance with the HKFRS. The
proportionate consolidation method is used as the Directors are of the
opinion that it provides a better reflection of the economic substance of
the Group.
The proportionate consolidation method has been allowed as the alternative
method to account for the interest in Joint Venture for financial periods
beginning on or after 1 January 2005. Under the proportionate
consolidation method, the Group's share of the Joint Venture's assets,
liabilities, income and expenses are consolidated line by line with
similar items in the Group's financial statements.
The adoption of these new HKFRSs has no material effect on the
results and financial position of the Group.
The Group has not applied the following new standards and
interpretations that have been issued but are not yet effective. The
Directors of the Company anticipate that the application of these
standards or interpretations will have no or any material impact on the
financial statements of the Group.
HKAS 1 (Amendment) Capital disclosure1
HKAS 19 (Amendment) Actuarial gains and losses, group plans
and disclosures2
HKAS 21 (Amendment) Net investment in a foreign operation2
HKAS 39 (Amendment) Cash flow hedge accounting of forecast
intragroup transactions2
HKAS 39 (Amendment) The fair value option2
HKAS 39 and HKFRS 4 Financial guarantee contracts2
(Amendment)
HKFRS 6 Exploration for and evaluation of mineral
resources2
HKFRS 7 Financial instruments: disclosures1
HK (IFRIC) - INT 4 Determining whether an arrangement
contains a lease2
HK (IFRIC) - INT 5 Rights to interests arising from
decommissioning, restoration and
environmental rehabilitation funds2
HK (IFRIC) - INT 6 Liabilities arising from participating in
a specific market, waste electrical and
electronic eqquipment3
HK (IFRIC) - INT 7 Applying the restatement approach under
HKAS 29 financial reporting in
hyperinflationary economies4
1 Effective for financial periods beginning on or after 1 January
2007.
2 Effective for financial periods beginning on or after 1 January
2006.
3 Effective for financial periods beginning on or after 1 December
2005.
4 Effective for financial periods beginning on or after 1 March
2006.
(2) Previously, the Joint Venture had been accounted for in the
consolidated financial statements using the equity method. During the
financial year, the Group changed the accounting policy from the equity
method to the proportionate consolidation method, in accordance with the
HKFRS.
The Joint Venture, a Sino-foreign joint venture established in The
People's Republic of China (the "PRC") is 70% owned by a wholly-owned
subsidiary of the Company and 30% owned by a state-owned enterprise
established in Guangzhou, the PRC. The Group's interest in the Joint
Venture is 70% (2004 - 70%).
(3) Prior Year Adjustments
The prior year adjustments arose from the change in the functional
currency in the preparation of the accounts. Previously, the financial
statements of the Company and its subsidiaries were translated from A$
into HK$ using the exchange rate prevailing at the balance sheet date for
the assets and liabilities whilst the average rate was used to translate
revenues and expenses. Any exchange difference arising from the
translation was taken as a movement in the foreign currency translation
reserve.
On 10 May 2004, the Company was voluntarily de-listed from the Australian
Stock Exchange and subsequently de-registered from the Australian
Securities and Investments Commission. The Group and the Company have no
requirement to prepare the financial statements in A$. As a result, the
foreign currency translation differences classified as reserve previously
have been taken to the income statements as unrealised foreign exchange
gain or loss.
The effects of the change in functional currency in the preparation of the
accounts have been taken up as prior year adjustments in the Group and the
Company financial statements. Accordingly, the following comparative
figures have been restated to reflect the effect of the change:-
As Previously
Effect Of Reported And
As The Change After Prior
Previously In Functional Year
Reported Currency Adjustments
THE GROUP HK$'000 HK$'000 HK$'000
BALANCE SHEET (EXTRACT):-
Other financial assets
139,729 (186) 139,543
Accumulated losses
(18,760) (186) (18,946)
---------------------------------------------
INCOME STATEMENTS (EXTRACT):-
Other operating expenses
(7,518) (186) (7,704)
Loss before taxation/
Net loss for the financial year
(7,297) (186) (7,483)
----------------------------------------------
(4) The calculation of the basic earnings/(loss) per share is based on
the consolidated profit after taxation of HK$7,023,000 (2004 - Net loss of
HK$7,483,000) for the financial year and on 105,116,280 (2004 - 105,116,
280) ordinary shares of A$0.20 each in issue during the financial year.
There is no dilutive effect on the basic earnings/(loss) per share for the
financial year and the previous financial year.
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