MAGNUM INT'L<00305> - Results Announcement
Magnum International Holdings Limited announced on 25/04/2006:
(stock code: 00305 )
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 ($ ) ($ )
Turnover : 12,310,910 21,913,149
Profit/(Loss) from Operations : (1,924,501) 196,057
Finance cost : (6,506,291) (6,426,706)
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 : (8,756,390) (6,343,576)
% Change over Last Period : N/A %
EPS/(LPS)-Basic (in dollars) : (0.0142) (0.0103)
-Diluted (in dollars) : N/A N/A
Extraordinary (ETD) Gain/(Loss) : N/A N/A
Profit/(Loss) after ETD Items : (8,756,390) (6,343,576)
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 Annual
General Meeting : 18/05/2006 to 23/05/2006 bdi.
Other Distribution for : N/A
Current Period
B/C Dates for Other
Distribution : N/A
Remarks:
1. IMPACT OF NEW AND REVISED HONG KONG FINANCIAL REPORTING STANDARDS
The following new and revised HKFRSs affect the Group and are
adopted for the first time for the current year's financial statements:
HKAS 1 Presentation of Financial Statements
HKAS 7 Cash Flow Statements
HKAS 8 Accounting Policies, Changes in Accounting Estimates and
Errors
HKAS 10 Events after the Balance Sheet Date
HKAS 12 Income Taxes
HKAS 14 Segment Reporting
HKAS 16 Property, Plant and Equipment
HKAS 17 Leases
HKAS 18 Revenue
HKAS 19 Employee Benefits
HKAS 21 The Effects of Changes in Foreign Exchange Rates
HKAS 23 Borrowing Costs
HKAS 24 Related Party Disclosures
HKAS 27 Consolidated and Separate Financial Statements
HKAS 32 Financial Instruments: Disclosure and Presentation
HKAS 33 Earnings per Share
HKAS 36 Impairment of Assets
HKAS 37 Provisions, Contingent Liabilities and Contingent Assets
HKAS 38 Intangible Assets
HKAS 39 Financial Instruments: Recognition and Measurement
HKAS 39 Transition and Initial Recognition of Financial Assets and
Amendment Financial Liabilities
HKAS 40 Investment Property
HKFRS 2 Share-based Payment
HKFRS 3 Business Combinations
HK(SIC)-Int 21 Income Taxes - Recovery of Revalued Non-
depreciable Assets
HK-Int 4 Leases - Determination of the Length of Lease Term
in respect of Hong Kong Land Leases
Except for HKASs 24, 32, 38, 39 and 40, HKFRS 2 and HK(SIC)-Int 21
as stated below, the adoption of the above standards has had no material
impact on the accounting policies of the Group and the Company and the
methods of computation in the Group's and the Company's financial
statements.
(a) HKAS 24 - Related Party Disclosures
HKAS 24 has expanded the definition of related parties and affected the
Group's related party disclosures.
(b) HKAS 32 and HKAS 39 - Financial Instruments
In prior years, the Group classified its investments in listed
equity securities for trading purposes as short term investments, which
were stated at their fair values on an individual basis with gains and
losses recognised in the income statement. Upon the adoption of HKAS 39,
these securities held by the Group at 1st January 2005 in the amount of
HK$1,420,287 are designated as equity investments at fair value through
profit or loss under the transitional provisions of HKAS 39 and
accordingly are stated at fair value with gains or losses being recognised
in the income statement.
The adoption of HKAS 39 has not resulted in any change in the measurement
of these equity securities. Comparative amounts have been reclassified
for presentation purpose.
(c) HKAS 38 - Intangible Assets
In prior years, the Group's intangible assets were amortised on
the straight-line basis over their estimated useful lives of 10 years,
less any impairment losses
Upon the adoption of HKAS 38, the Group's eligibility rights to
trade on or through The Stock Exchange of Hong Kong Limited (the "Stock
Exchange") and The Philippines Stock Exchange, Inc. are permitted to be
regarded as having indefinite lives, which should not be amortised and are
subject to annual impairment tests. Under the transitional provision of
HKAS 38, this change in accounting policy has been applied prospectively
and therefore comparative amounts have not been restated.
(d) HKAS 40 - Investment Property
In prior years, changes in the fair values of investment
properties were dealt with as movements in the asset revaluation reserve.
If the total of this reserve was insufficient to cover a deficit, on a
portfolio basis, the excess of the deficit was charged to the income
statement. Any subsequent revaluation surplus was credited to the income
statement to the extent of the deficit previously charged.
Upon the adoption of HKAS 40, gains or losses arising from changes
in the fair values of investment properties are included in the income
statement in the year in which they arise.
The adoption of HKAS 40 has had no impact on the amounts disclosed
in the financial statements.
(e) HKFRS 2 - Share-based Payment
In prior years, no recognition and measurement of share-based payment
transactions in which employees (including directors) were granted share
options over shares in the Company were required until such options were
exercised by employees, at which time the share capital and share premium
were credited with the proceeds received.
Upon the adoption of HKFRS 2, when employees (including directors) render
services as consideration for equity instruments ("equity-settled
transactions"), the cost of the equity-settled transactions with employees
is measured by reference to the fair value at the date at which the
instruments are granted.
The main impact of HKFRS 2 on the Group is the recognition
of the cost of these transactions and a corresponding entry to equity for
employee share options. The revised accounting policy for share-based
payment transactions is described in more detail in note 3.5 "Summary of
significant accounting policies" below.
The Group has adopted the transitional provisions of HKFRS 2 under which
the new measurement policies have not been applied to (i) options granted
to employees on or before 7th November 2002; and (ii) options granted to
employees after 7th November 2002 but which had vested before 1st January
2005.
As the Group did not have any employee share options which were granted
during the period from 7th November 2002 to 31st December 2004 but had not
yet vested as at 1st January 2005, the adoption of HKFRS 2 has had no
impact on the accumulated losses as at 31st December 2003 and at 31st
December 2004.
(f) HK(SIC)-Int 21 - Income Taxes - Recovery of Revalued Non-
depreciable Assets
In prior periods, deferred tax arising on the revaluation of investment
properties was recognised based on the tax rate that would be applicable
upon the sale of the investment properties.
Upon the adoption of HK(SIC)-Int 21, deferred tax arising on the
revaluation of the Group's investment properties is determined depending
on whether the properties will be recovered through use or through sale.
The Group has determined that its investment properties will be recovered
through use, and accordingly the profits tax rate has been applied to the
calculation of deferred tax.
The effects of the above changes are summarised in note 3.4 to the
financial statements. The change has been adopted retrospectively from
the earliest period presented and comparative amounts have been restated.
2. SUMMARY OF THE IMPACT OF CHANGES IN ACCOUNTING POLCIES
(a) Effect on the consolidated balance sheet
At Effect of adopting
1st January -----------------------------------------
2005 HKASs 32*&39# HK(SIC)-Int 21#
Effect of Change in Deferred tax on
new policies classification of revaluation of
(Increase/ equity investments investment properties Total
(decrease)) HK$ HK$ HK$
Assets
-------
Equity investments at fair
value through profit or loss
1,420,287 - 1,420,287
Short term investments
(1,420,287) - (1,420,287)
-----------
-
=========
Liabilities
--------------
Deferred tax liabilities
- (265,598) (265,598)
=========
* Adjustments taken effect prospectively from 1st January 2005
# Adjustments/presentation taken effect retrospectively
At
31st December
2005 Effect of adopting
-------------------------------------------
Effect of HKASs 32&39 HK(SIC)-Int 21
new policies Change in Deferred tax on
(Increase/ classification of revaluation of
(decrease)) equity investments investment properties Total
HK$ HK$ HK$
Assets
---------
Equity investments at fair
value through profit or loss
1,910,949 - 1,910,949
Short term investments
(1,910,949) - (1,910,949)
----------
-
==========
Liabilities
Deferred tax liabilities
- 60,000 60,000
=========
(b) Effect on the balances of equity at 1st January 2004 and at 1st
January 2005
Effect of adopting
HK(SIC)-Int 21
Deferred tax on
revaluation of
Effect of new policies investment properties
HK$
1st January 2004
Decrease in accumulated losses 351,507
_______
_______
1st January 2005
Decrease in accumulated losses 265,598
_______
_______
(c) Effect on the consolidated income statement for the years ended
31st December 2005 and 2004
Effect of adopting
HK(SIC)-Int 21
Deferred tax on
revaluation of
Effect of new policies investment properties
HK$
Year ended 31st December 2005
Increase in tax and loss for the year 325,598
_________
_________
Increase in basic loss per share 0.05cents
_________
_________
Year ended 31st December 2004
Increase in tax and loss for the year 85,909
_________
_________
Increase in basic loss per share 0.01cents
_________
_________
3. REVENUE
The current year's revenue represents commission and interest income from
securities dealing and margin finance, interest income from consumer
finance, property rental income and proceeds from the sale of equity
investment at fair value through profit or loss.
An analysis of revenue is as follows:
Group
2005 2004
HK$ HK$
(Restated)
Revenue
Commission and interest income from securities
dealing and margin finance 4,224,393 5,218,636
Interest income from consumer finance 825,753 703,493
Property rental income 2,156,084 2,092,770
Proceeds from the sale of equity investments at
fair value through profit or loss/
short term investments 5,104,680 13,898,250**
__________ __________
12,310,910 21,913,149
__________ __________
__________ __________
** In 2004, the trading in securities was shown as the gain on disposal of
listed equity investment which recorded as the other revenue.
4. LOSS PER SHARE
Diluted loss per share amounts for the years ended 31st December 2005 and
2004 have not been disclosed, as the share options outstanding during
these years had anti-dilutive effects on the basic loss per share amounts
for these years.
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