Listed Company Information
V.S. INT'L<01002> - Results Announcement
V.S. International Group Limited announced on 18/03/2006:
(stock code: 01002 )
Year end date: 31/07/2006
Currency: HKD
Auditors' Report: N/A
Interim report reviewed by: Both Audit Committee and Auditors
Note
Turnover
:
Profit/(Loss) from Operations
:
Finance cost
:
Share of Profit/(Loss) of
Associates
:
Share of Profit/(Loss) of
Jointly Controlled Entities
:
Profit/(Loss) after Tax & MI
:
% Change over Last Period
:
EPS/(LPS)-Basic (in dollars)
:
-Diluted (in dollars)
:
Extraordinary (ETD) Gain/(Loss)
:
Profit/(Loss) after ETD Items
:
Interim Dividend
:
per Share
(Specify if with other
:
options)
B/C Dates for
Interim Dividend
Payable Date
B/C Dates for (-)
General Meeting
Other Distribution for
Current Period
B/C Dates for Other
(Unaudited )
Current
Period
from 01/08/2005
to 31/01/2006
('000
)
715,532
63,313
(24,475)
(Unaudited )
Last
Corresponding
Period
from 01/08/2004
to 31/01/2005
('000
)
619,721
40,219
(24,554)
(2,973)
(403)
N/A
35,464
+178
0.0426
0.0420
N/A
35,464
NIL
N/A
12,741
N/A
: N/A
: N/A
: N/A
: N/A
%
0.0146
N/A
N/A
12,741
NIL
N/A
Distribution
: N/A
Remarks:
Note 1 :
Basis of preparation
This interim financial report has been prepared in accordance with the
applicable disclosure provisions of the Rules Governing the Listing of
Securities ("Listing Rules") on The Stock Exchange of Hong Kong Limited
("Stock Exchange"), including compliance with Hong Kong Accounting
Standard ("HKAS") 34 "Interim financing reporting" issued by the Hong Kong
Institute of Certified Public Accountants ("HKICPA").
This interim financial report has been prepared in accordance with the
same accounting policies adopted in the annual financial statements for
the year ended 31 July 2005, except for accounting policy changes that are
expected to be reflected in the annual financial statements for the year
ending 31 July 2006. Details of these changes in accounting policies are
set out in note 2.
The preparation of an interim financial report in conformity with
requires management to make judgements, estimates and assumptions
affect the application of policies and reported amounts of assets
liabilities, income and expenses on a year to date basis. Actual
may differ from these estimates.
HKAS 34
that
and
results
This interim financial report is unaudited, but has been reviewed by KPMG
in accordance with Statement of Auditing Standards 700, "Engagements to
review interim financial reports", issued by the HKICPA.
The financial information relating to the financial year ended 31 July
2005 that is included in the interim financial report as being previously
reported information does not constitute the Company's statutory financial
statements for that financial year but is derived from those financial
statements. Statutory financial statements for the year ended 31 July
2005 are available from the Company's registered office. The auditors
have expressed an unqualified opinion on those financial statements in
their report dated 23 September 2005.
Note 2 :
Changes in accounting policies
The HKICPA has issued a number of new and revised Hong Kong Financial
Reporting Standards ("HKFRS", which terms collectively includes HKASs and
Interpretations) that are effective or available for early adoption for
accounting periods beginning on or after 1 August 2005. The Board has
determined the accounting policies to be adopted in the preparation of the
Group's annual financial statements for the year ending 31 July 2006, on
the basis of HKFRSs currently in issue.
The following sets out further information on the changes in accounting
policies for the annual accounting period beginning on 1 August 2005 which
have been reflected in this interim financial report.
(a)
Summary of the effect of changes in the accounting policies
(i)
Effect on opening balance of total equity at 1 August 2005 (as
adjusted)
The following table sets out the adjustments that have been made to the
opening balances at 1 August 2005. These are the aggregate effect of
retrospective adjustments to the net assets as at 31 July 2005.
Effect of new policy (increase/(decrease))
Retained Capital and
Minority
Note
profits other reserves Total
interests
Total
equity
Prior period adjustments:
HKFRS 2
Equity settled share-based
transactions
2(d) (689)
689
-
-
-
HKAS 17
Leasehold land and buildings
held for own use
2(b) (1,082) (110,179)
(111,261) (111,261)
------------------------------------------------------------------Total effect at 1 August 2005
(1,771) (109,490)
(111,261) (111,261)
===================================================================
(ii)
Effect on profit after taxation for the six months ended 31
January 2006 (estimated) and 31 January 2005 (as adjusted)
In respect of the six month - period ended 31 January 2006, the following
table provides estimates of the extent to which the profits for that
period are higher or lower than they would have been had the previous
policies still been applied in the interim period, where it is practicable
to make such estimates.
In respect of the six month - period ended 31 January 2005, the table
discloses the adjustments that have been made to the profits as previously
reported for that period, in accordance with the transitional provisions
of the respective HKFRSs.
Effect of new policy (increase/ (decrease))
Note
For the six months ended
31 January 2006
Equity holders Minority
of the Company interests Total
For the six months ended
31 January 2005
Equity holders Minority
of the Company interests Total
HKFRS 2
Equity settled share-based
transactions
2(d)
(1,114)
-
(1,114) -
-
-
HKFRS 3
Amortisation of goodwill
2(e)
137
-
137
-
-
-
HKAS 17
Leasehold land and buildings
held for own use
2(b)
966
966
------------------------------------------------------------------------Total effect for the period
(977)
(977)
966
966
==========================================================================
Effect on earnings per share:
- basic (cents)
(0.12)
0.12
- diluted (cents)
(0.12)
0.12
Effect on amounts recognised as capital transactions with owners for the
six months ended 31 January 2006 (estimated) and 31 January 2005 (as
adjusted)
In respect of the six month - period ended 31 January 2006, the following
table provides estimates of the extent to which the amounts recorded as
capital transactions with owners are higher or lower than they would have
been had the previous policies still been applied in the interim period,
where it is practicable to make such estimates.
In respect of the six month - period ended 31 January 2005, the table
discloses the adjustments that have been made to the amounts recorded as
capital transactions with owners as previously reported for that period,
in accordance with the transitional provisions of the respective HKFRSs.
Effect of new policy (increase/ (decrease))
For the six months ended
For the six months ended
31 January 2006
31 January 2005
Equity holders Minority
Equity holders Minority
Note
of the Company interests Total of the Company interests Total
HKFRS 2
Equity settled share-based
transactions
2(d)
2,364
2,364 -------------------------------------------------------------------------Total effect for the period
2,364
2,364 ==========================================================================
(b)
Leasehold land and buildings held for own use (HKAS 17, Leases)
In prior years, leasehold land and buildings held for own use were stated
at revalued amounts less accumulated depreciation and accumulated
impairment losses. Revaluation surpluses or deficits were normally taken
to the land and buildings revaluation reserve.
With the adoption of HKAS 17 with effect from 1 August 2005, the leasehold
interest in land held for own use is accounted for as being held under an
operating lease where the fair value of the interest in any buildings
situated on the leasehold land could be separately identified from the
fair value of the leasehold interest in the land at the time the lease was
first entered into by the Group, or taken over from the previous lessee,
or at the date of construction of those buildings, if later.
Such leasehold land will no longer be revalued. Instead, any pre-paid
land premiums for acquiring the land leases, or other lease payments, are
amortised on a straight line basis over the lease term. If the property
is in the course of development or re-development, or the property is
otherwise being used in the production of inventory, the amortisation
charge is included as part of the costs of the property under development
or other inventory. In all other cases the amortisation charge for the
period is recognised in the income statement immediately.
Any buildings held for own use which are situated on such land leases
continue to be presented as part of property, plant and equipment.
However, with effect from 1 August 2005 the buildings are also stated at
cost less accumulated depreciation, rather than at fair value, to be
consistent with the new policy required to be adopted for the land
element.
(b)
Leasehold land and buildings held for own use (HKAS 17, Leases)
The new accounting policies have been adopted retrospectively, with the
opening balances of retained profits and the land and buildings
revaluation reserve and the comparative information adjusted for the
amounts relating to prior periods as disclosed in note 2(a) and the
consolidated statement of changes in equity. In respect of the six months
ended 31 January 2006 it is not practicable to estimate the extent to
which the profits for that period, or the income or expenses taken
directly to equity, are higher or lower than they would have been had the
previous policy still been applied in the interim period.
(c)
Financial instruments (HKAS 39, Recognition and measurement of
financial instruments)
In prior years, bills receivable were derecognised in the financial
statements upon settlement or when discounted with financial institutions.
Upon the adoption of HKAS 39 with effect from 1 August 2005, discounted
bills receivable should not be derecognised where the Group retains
substantially all risks and rewards relating thereto and the corresponding
proceeds should be recognised as a liability.
The new accounting policy has been applied prospectively in accordance
with the transitional arrangement under HKAS 39. As a result, comparative
amounts have not been restated.
(d)
Employee share option scheme (HKFRS 2, Share-based payment)
In prior years, no amounts were recognised when employees (which term
includes directors) were granted share options to subscribe for shares in
the Company. If the employees chose to exercise the options, the nominal
amount of share capital and share premium were credited only to the extent
of the option's exercise price receivable.
With effect from 1 August 2005, in order to comply with HKFRS 2, the Group
recognises the fair value of such share options as an expense in the
income statement or as an asset, if the cost qualifies for recognition as
an asset under the Group's accounting policies. A corresponding increase
is recognised in a capital reserve within equity.
Where the employees are required to meet vesting conditions before they
become entitled to the options, the Group recognises the fair value of the
options granted over the vesting period. Otherwise, the Group recognises
the fair value in the period in which the options are granted.
If an employee chooses to exercise options, the related capital reserve is
transferred to share capital and share premium, together with the exercise
price. If the options lapse unexercised, the related capital reserve is
transferred directly to retained earnings.
The new accounting policy has been applied retrospectively with
comparatives restated in accordance with HKFRS 2.
(e)
Amortisation of positive goodwill (HKFRS 3, Business combinations)
In prior periods, positive goodwill which was amortised on a straight line
basis over its useful life and was subject to impairment testing when
there were indications of impairment.
With effect from 1 August 2005, in accordance with HKFRS 3 and HKAS 36 "
Impairment of assets" 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 has been allocated exceeds
its recoverable amount.
The new policy in respect of positive goodwill has been applied
prospectively in accordance with the transitional arrangement under HKFRS
3. As a result, comparative amounts have not been restated.
(f)
Minority interests (HKAS 1, Presentation of financial statements
and HKAS 27, Consolidated and separate financial statements)
In prior years, minority interests at the balance sheet date were
presented in the consolidated balance sheet separately from liabilities
and as a deduction from net assets. Minority interests in the results of
the Group for the period were also separately presented in the income
statement as a deduction before arriving at the profit attributable to
shareholders.
With effect from 1 August 2005, in order to comply with HKAS 1 and HKAS
27, minority interests at the balance sheet are presented in the
consolidated balance sheet within equity, separately from the equity
attributable to the equity holders of the Company, and minority interests
in the results of the Group for the period are presented on the face of
the consolidated income statement as an allocation of the total profit or
loss for the period between the minority interests and the equity holders
of the parent.
The presentation of minority interests in the consolidated balance sheet
for the comparative period has been restated accordingly.
Note 3 :
Segment reporting
Segment information is presented in respect of the Group's business and
geographical segments. Business segment information is chosen as the
primary reporting format because this is more relevant to the Group in
making operating and financial decisions.
(i)
Business segments
The Group comprises the following main business segments:
Plastic injection moulding
: manufacture and sales of plastic
moulded products and parts
Assembling of electronic products: assembling and sales of electronic
products, including processing fees generated from assembling of
electronics products
Mould design and fabrication
: manufacture and sales of plastic
injection moulds
Turnover from
external customers
Plastic injection
moulding
For the six months
ended 31 January
2006
2005
(restated)
$'000 $'000
Assembling of
electronic products
For the six months
ended 31 January
2006
2005
(restated)
$'000 $'000
568,897 489,713
======= =======
97,819 89,081
======= =======
Segment results
79,872
Depreciation and amortisation
for the period
23,942
Turnover from
external customers
Segment results
Unallocated
operating income
and expenses
Profit from operations
Finance costs
Share of losses
of associates
Income tax
59,417
7,825
7,416
23,981
8,843
7,365
Mould design
and fabrication
For the six months
ended 31 January
2006
2005
(restated)
$'000 $'000
Consolidated
For the six months
ended 31 January
2006
2005
(restated)
$'000 $'000
48,816 40,927
======= =======
715,532 619,721
======= =======
10,478
98,175 77,355
10,522
(34,862)(37,136)
---------------63,313 40,219
(24,475)(24,554)
(2,973) (403)
(401) (2,521)
----------------
Profit after taxation
Depreciation and amortisation
for the period
3,995
Unallocated
Depreciation
and amortisation
35,464 12,741
======= =======
2,867
36,780 34,213
3,651 5,080
--------------40,431 39,293
======= =======
Note 4 :
Profit before taxation
Profit before taxation is arrived at after charging/(crediting):
For the six months ended
31 January
2006
2005
$'000 $'000
(a)
Finance costs:
Interest on bank advances repayable within five years
Interest on bank advances repayable over
five years
Interest on loan from a substantial shareholder
Finance charges on obligations under finance leases
Total borrowing costs
Less: Borrowing costs capitalised as
construction in progress *
22,879 16,075
415
857
978
791
1,067
--------------24,527 18,535
(679) (523)
--------------23,848 18,012
Exchange (gains)/losses
(575) 5,299
Other charges
1,202 1,243
--------------24,475 24,554
===============
* The borrowing costs have been capitalised at an average cost of
borrowings to the Group of 5.70% (2005: 4.95%) per annum for construction
in progress.
For the six months ended
31 January
2006
2005
(restated)
$'000 $'000
(b)
Other items:
Processing fees
Amortisation of interest in leasehold land
held for own use under an operating lease
Depreciation
- owned assets
- assets held under finance leases
Operating lease charges in respect of properties
Amortisation of goodwill
Impairment losses for doubtful debts (reversed)/charged
Provision for slow moving inventories
Loss on disposal of fixed assets
Interest Income
Rental Income
8,546
7,930
211
211
37,891 36,467
2,329 2,615
4,324 6,187
137
(214) 1,080
1,675 1,700
4,585 9,536
(2,922) (1,213)
(1,353) (728)
===============
Note 4 :
Earnings per share
(a)
Basic earnings per share
The calculation of basic earnings per share is based on the profit
attributable to shareholders of $35,041,000 (2005 (restated): $11,933,000)
and the weighted average number of 822,323,000 (2005: 820,000,000) shares
in issue during the six months ended 31 January 2006.
(b)
Diluted earnings per share
The calculation of diluted earnings per share is based on the profit
attributable to equity holders of the parent of $35,041,000 and the
weighted average number of ordinary shares of 833,459,000 after adjusting
for the effects of all dilutive potential ordinary shares under the
Company's share option scheme.
There were no potential dilutive ordinary shares in existence during the
six months ended 31 January 2005.