BEIDA JADE BIRD<08095> - Results Announcement (Final, 2005, Summary)
Beijing Beida Jade Bird Universal Sci-Tech Company Limited announced on 11/5/2006:
(stock code: 08095 )
Year end date :31/12/2005
Currency :RMB
Auditors' report :Qualified
Important Note :
This result announcement form only contains extracted information from
and should be read in conjunction with the detailed results announcement
of the issuer, which can be viewed on the GEM website at
http://www.hkgem.com
(Audited) (Audited)
Current Last Corresponding
Period Period
from 01/01/2005 from 01/01/2004
to 31/12/2005 to 31/12/2004
$'000 '000
Turnover : 143,733 130,503
Profit/(Loss) from Operations : (42,129) 243,179
Finance cost : (14,482) (8,233)
Share of Profit/(Loss) of Associates : (816) N/A
Share of Profit/(Loss) of Jointly
Controlled Entites : N/A N/A
Profit/(Loss) after Taxation & MI : (59,843) 234,185
% Change Over the Last Period : N/A
EPS / (LPS)
Basic (in dollar) : (RMB 0.051) RMB 0.204
Diluted (in dollar) : N/A N/A
Extraordinary (ETD) Gain/(Loss) : N/A N/A
Profit (Loss) after ETD Items : (59,843) 234,185
Final Dividends per Share : NIL NIL
(specify if with other options) : N/A N/A
B/C Dates for Final Dividends : N/A
Payable Date : N/A
B/C Dates for (-) General Meeting : N/A
Other Distribution for Current Period : NIL
B/C Dates for Other Distribution : N/A
(bdi: both days inclusive)
For and on behalf of
Beijing Beida Jade Bird Universal Sci-Tech Company Limited
Signature :
Name : Wong Tak Chuen
Title : Company Secretary
Responsibility statement
The directors of the Company (the "Directors") as at the date hereof
hereby collectively and individually accept full responsibility for the
accuracy of the information contained in this results announcement form
(the "Information") and confirm, having made all reasonable inquiries,
that to the best of their knowledge and belief the Information are
accurate and complete in all material respects and not misleading and
that there are no other matters the omission of which would make the
Information herein inaccurate or misleading.The Directors acknowledge
that the Stock Exchange has no responsibility whatsoever with regard to
the Information and undertake to indemnify the Exchange against all
liability incurred and all losses suffered by the Exchange in connection
with or relating to the Information.
Remarks:
The directors of the Company (the "Directors") as at the date hereof
hereby collectively and individually accept full responsibility for the
accuracy of the information contained in this results announcement form
(the "Information") and confirm, having made all reasonable inquiries,
that to the best of their knowledge and belief the Information are accurate
and complete in all material respects and not misleading and
that there are no other matters the omission of which would make
the Information herein inaccurate or misleading.The Directors acknowledge
that the Stock Exchange has no responsibility whatsoever with regard
to the Information and undertake to indemnify the Exchange against all
liability incurred and all losses suffered by the Exchange in connection
with or relating to the Information.
1. Principal Activities and Basis of Presentation
The Group is principally engaged in the research, development,
manufacturing, marketing and sale of embedded systems, including
network security products ("NET"), wireless fire alarm systems
("WFAS"), application specific integrated circuits ("ASIC"), global
positioning system application systems ("GPS"), smart card application
systems ("IC"), remote automatic meter-reading systems ("RMR") and
related products.
The Group is also engaged in the sale of computer products
("Computer") and the provision of total solution services through
the application of its existing embedded system products. In addition,
the Group was also engaged in the properties development activities
during the year.
The principal accounting policies adopted by the Group conform to Hong
Kong Financial Reporting Standards (which also include Hong Kong
Accounting Standards and Interpretations) issued by the Hong Kong
Institute of Certified Public Accountants, accounting principles
generally accepted in Hong Kong.
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
Hong Kong Financial Reporting Standards ("HKFRSs") and Hong Kong
Accounting Standards ("HKASs") (collectively "HKFRSs") issued by the
Hong Kong Institute of Certified Public Accountants which are relevant
to its operations and effective for accounting periods beginning on or
after 1 January 2005 for the preparation of these financial statements.
3. Summary of the Impact of Changes in Accounting Policies
(a) Effect on the consolidated balance sheet
Effect of adopting
At 1 January 2005 HKASs 32 and 39 HKAS 39
Change in Revaluation of
Effect of new policies classification of available-for-sale
(Increase/(decrease)) equity investments equity investments Total
RMB'000 RMB'000 RMB'000
Assets
Available-for-sale equity investments 362,581 323,818 686,399
Long term investments (362,581) - (362,581)
Held for trading equity investments 2,000 - 2,000
Short term investments (2,000) - (2,000)
323,818
Equity
Available-for-sale investments
revaluation reserve - 323,818 323,818
Effect of adopting
At 31 December 2005 HKASs 32 and 39 HKAS 39
Change in Revaluation of
Effect of new policies classification of available-for-sale
(Increase/(decrease)) equity investments equity investments Total
RMB'000 RMB'000 RMB'000
Assets
Available-for-sale equity investments 349,824 68,711 418,535
Long term investments (349,824) - (349,824)
68,711
Equity
Available-for-sale investments
revaluation reserve - 68,711 68,711
(b) Effect on the consolidated income statement for the years ended 31
December 2005 and 2004
Effect of adopting
HKFRS 3
Effect of new policy Discontinuation of
amortisation of goodwill Total
RMB'000 RMB'000
Year ended 31 December 2005
Decrease in amortisation of goodwill
and increase in profit 6,014 6,014
Increase in basic earnings per share 0.5 cents 0.5 cents
Effect of adopting
HKFRS 3
Effect of new policy Discontinuation of
amortisation of goodwill Total
RMB'000 RMB'000
Year ended 31 December 2004
Decrease in amortisation of goodwill
and increase in profit - -
Increase in basic earnings per share - -
4. Earnings/(loss) Per Share Attributable to Ordinary Equity Holders
of the Parent
The calculation of basic loss per share for the year ended 31 December
2005 is based on the net loss attributable to equity holders of the
parent for the year ended 31 December 2005 of approximately
RMB59,843,000, and the 1,184,800,000 ordinary shares in issue during
the year.
The calculation of basic earnings per share for the year ended 31
December 2004 is based on the net profit attributable to equity holders
of the parent for the year ended 31 December 2004 of approximately
RMB234,185,000, and the weighted average of 1,146,828,415 ordinary
shares in issue during 2004 as adjusted to reflect the new placement of
H shares during 2004.
Diluted earnings per share amounts for the year ended 31 December 2005
and 31 December 2004 have not been calculated because no diluting
events existed during the years.
5. Extract of the report of auditors
Basis of opinion (extracts)
We planned and performed our audit so as to obtain all the information
and explanations which we considered necessary in order to provide us
with sufficient evidence to give reasonable assurance as to whether the
financial statements are free from material misstatement. However, the
evidence made available to us by the Group was limited because
sufficient information and explanations necessary to enable us to
understand and assess the recoverability of the Group's interest in its
associate, Beijing Chengjian Donghua Real Estate Development Company
Limited ("Chengjian Donghua"), of RMB313 million, details of which are
set out in note 16 to the financial statements, have not been made
available. We have not been provided with sufficient documentation and
information as to the adequacy of the profitability and funding of the
property development project (the "Project") currently being undertaken
by Chengjian Donghua, the circumstances giving arise to which are
as follows:
(i) The estimated selling price of the hotel within the Project is
critical to the assessment of the overall profitability of the Project.
As of the date of this report, the verifiable evidential information
made available to us by the Group as to the estimation of the average
selling price of the hotel within the Project was limited.
(ii) One of the critical assumptions underlying the cash flow projection
of the Project made available to us by the directors is that Chengjian
Donghua will obtain the pre-sale property approval document from the
authorities in the third quarter of 2006. One of the crucial
documents needed to apply for the pre-sale property approval document
is a formal property development company qualification grading
certificate under the name of Chengjian Donghua. As of the date of this
report, Chengjian Donghua has only obtained a temporary property
development company qualification grading certificate, which is valid
for two years and will expire in mid-2006. This temporary property
development company qualification grading certificate has to be upgraded
to a formal property development company qualification grading certificate.
However, as of the date of issuing this report, the formal property
development company qualification grading certificate has yet to be
obtained by Chengjian Donghua.
There are no other satisfactory audit procedures that we could adopt to
understand and assess the recoverability of the Group's interest in its
associate.
In addition, the information and explanations necessary to enable us to
understand and assess the appropriateness of the classification of
Beijing Yanyuan JinFeng International Trading Ltd.,
Beijing Anfu Property Development Ltd.,
and Beijing Runze Huiheng Commerce Ltd., as unrelated parties were
insufficient. Further details are set out in note 22 to the financial
statements. There are no other satisfactory audit procedures that
we could adopt to understand and assess if the classification of
Beijing Yanyuan JinFeng International Trading Ltd., Beijing Anfu
Property Development Ltd., and Beijing Runze Huiheng Commerce Ltd.,
as unrelated parties is appropriate.
In forming our opinion we also evaluated the overall adequacy of the
presentation of information in the financial statements. We believe
that our audit provides a reasonable basis for our opinion.
Fundamental uncertainty - litigation against the Group's key
associate
In forming our opinion, we have considered the adequacy of the
disclosures made in the financial statements concerning the possible
outcome of the litigation filed by Shenzhen Development Bank against
Chengjian Donghua, details of which are set out in note 32
to the financial statements. The outcome of this litigation could result
in additional liabilities to Chengjian Donghua and/or the cessation
of the development right of the Project thereby causing uncertainty in
the recoverability of the Group's interest in associate. The Group's
interests in Chengjian Donghua included in the consolidated balance
sheet at 31 December 2005 amounted to RMB313.4 million and the Group's
share of loss of Chengjian Donghua for the year ended 31 December 2005
was RMB0.8 million, details of which are set out in note 16 to the
financial statements. Details of the circumstances relating to this
fundamental uncertainty are described in note 32 to these financial
statements. We consider that the fundamental uncertainty has been
adequately accounted for and disclosed in the financial statements and
our opinion is not qualified in this respect alone.
Qualified opinion arising from limitation of audit scope
Except for any adjustments to both amounts and disclosures in the
financial statements that might have been found to be necessary had we
been able to obtain sufficient evidence concerning the recoverability
of the Group's interest in an associate, Chengjian Donghua, of RMB313
million and the appropriateness of the classification of Beijing Yanyuan
JinFeng International Trading Ltd., Beijing Anfu Property Development Ltd.,
and Beijing Runze Huiheng Commerce Ltd., as unrelated parties, in our
opinion the financial statements give a true and fair view of the state
of affairs of the Company and of the Group as at 31 December 2005 and
of the loss and cash flows of the Group for the year then ended and
have been properly prepared in accordance with the disclosure
requirements of the Hong Kong Companies Ordinance.
In respect alone of the limitation of our work relating to the
recoverability of the Group's interest in its associate and the
appropriate classification of Beijing Yanyuan JinFeng International Trading Ltd.,
Beijing Anfu Property Development Ltd.,
and Beijing Runze Huiheng Commerce Ltd., as unrelated parties, we
have not obtained all the information and explanations that we considered
necessary for the purpose of our audit.
6. Extracts of note 16 to the financial statements
Interest in an Associate
The Company entered into a share transfer agreement (the "Agreement")
with Beijing Beida Jade Bird Limited ("Beida Jade Bird", one of the
shareholders of the Company) on 24 March 2005 (note 21) to acquire a
44% equity interest in Beijing Chengjian Donghua Real Estate
Development Company Limited ("Chengjian Donghua"). Based on the legal
opinion provided by the Company's external PRC legal counsel, all the
pre-completion conditions of the Agreement have been fulfilled and as
such, the acquisition has been duly completed during the year.
Chengjian Donghua's articles of association have been amended to
reflect the Company as an investor of Chengjian Donghua holding a 44%
equity interest in Chengjian Donghua. In addition, the Company has
obtained a shareholder certificate from Chengjian Donghua on 19 August
2005 indicating that the Company holds a 44% equity interest in
Chengjian Donghua. As of the date of issuing these financial
statements, the approval documents from the Beijing Municipal Bureau of
Commerce and Beijing Municipal Commission of Development and Reform
have yet to be obtained by the Company in connection with the aforesaid
acquisition of the 44% equity interest in Chengjian Donghua.
In addition, pursuant to the Agreement, a loan receivable from
Chengjian Donghua of RMB61,600,000 has been transferred from Beida Jade
Bird to the Company upon the completion of the acquisition.
Group Company
2005 2004 2005 2004
RMB'000 RMB'000 RMB'000 RMB'000
Equity interests, at cost - - 252,591 -
Share of net assets 251,775 - -
251,775 - 252,591
Due from an associate
(note 33(h)) 61,600 - 61,600
313,375 - 314,191
The amount due from an associate is unsecured, interest-free and has no
fixed terms of repayment.
Particulars of the Company's associate as at 31 December 2005 are as
follows:
Place of
incorporation/ Percentage of
establishment and Nominal value of equity attributable
Name operations Legal status registered capital to the Company
Chengjian Beijing, the PRC Limited liability RMB50,000,000 44
Donghua company
Principal
activity
Property
development
Summarised financial information of the Group's associate as at and for
the year ended 31 December 2005 is as follows:
RMB'000
Total assets 1,787,758 (a)
Total liabilities 1,793,799 (b)
Revenue -
Loss for the year 3,139
(a) Consisting mainly of the following:
RMB'000
Property development costs 1,631,689
Other receivables 155,691 *
* Subsequent to 31 December 2005 and prior to the date of issuing these
financial statements, Chengjian Donghua transferred the legal title to
certain of its receivables from three unrelated companies aggregating
RMB113.1 million as at 31 December 2005 to Beida Jade Bird. Chengjian
Donghua and Beida Jade Bird signed a tri-partite agreement with each of
the three companies above respectively whereby Beida Jade Bird agreed
to take up these receivables and recognised them as partial settlement
made by Chengjian Donghua of its payable to Beida Jade Bird.
(b) Consisting mainly of the following:
RMB'000
Amount due to Beida Jade Bird 1,614,847 #
Amount due to the Company 61,600
Amount due to Beijing Donghua Company, a fellow subsidiary of the
Company 42,491Payable to contractors 70,483
# This amount arose, in part, from the repayment of an amount due to
Beijing Donghua Company of RMB700 million that Chengjian Donghua
received from Beijing Donghua Company in 2003 being the first phase
payment made by Beijing Donghua Company to Chengjian Donghua in
relation to certain property development business cooperation. The
property development business cooperation was cancelled by a
cancellation agreement dated 12 December 2004. Further details of the
above are set out in note 32 to these financial statements.
Since the property development project of Chengjian Donghua was still
in the construction phase in 2005 and Chengjian Donghua has not
obtained banking facilities, Chengjian Donghua has to rely on certain
of the related parties/fellow subsidiaries of the Company, including
Beida Jade Bird, Beijing Teli Investment Management Ltd. and Beijing
Donghua Company, to fund its construction and working capital requirements
and to settle construction costs on its behalf.
7. Extracts of note 22 to the financial statements
Prepayments, Deposits and Other Receivables
Group Company
2005 2004 2005 2004
RMB'000 RMB'000 RMB'000 RMB'000
Advances to suppliers 8,207 2,168 32 303
Prepayments 21,010 234 20,970 159
Advances to staff 2,827 1,786 426 443
Deposits 494 558 306 309
Other receivables * 58,268 3,895 56,966 1,050
90,806 8,641 78,700 2,264
* Subsequent to 31 December 2005 and prior to the date of
issuing these financial statements, an aggregate amount of RMB53,415,000
and RMB52,320,000 has been recovered by the Group and Company, respectively.
On 2 April 2005, the Company entered into a purchase agreement with each of
the three domestic companies: Beijing Huoju investment Limited, Beijing Yanyuan
JinFeng International Trading Ltd. and Beijing Runze Huiheng Commerce Ltd.
for the purchase of computer equipment, details of which are as follows:
(i) According to the computer purchase agreement signed by
the Company with Beijing Huoju investment Limited, an unrelated independent
third party, on 2 April 2005 for a total purchase consideration of
RMB16 million, the Company was required to make an advance payment
of 50% of the purchase consideration to Beijing Huoju investment Limited
amounting to RMB8 million on 13 April 2005. This computer purchase
transaction was subsequently terminated by the Company and Beijing Huoju
investment Limited. Cash advances totalling RMB16 million were
subsequently made to Beijing Huoju investment Limited by the Company.
Prior to the date of issuing these financial statements, Beijing Huoju
investment Limited settled an aggregate amount of RMB9.4 million due
to the Company. For the remaining RMB6.6 million, a provision for
doubtful debts of RMB3.3 million was made as at 31 December 2005.
(ii) According to the computer purchase agreement signed by
the Company with Beijing Yanyuan JinFeng International Trading Ltd.,
an unrelated independent third party, on 2 April 2005 for a total
purchase consideration of RMB33 million, the Company made an advance
payment of 50% of the purchase consideration to Beijing Yanyuan JinFeng
International Trading Ltd. amounting to RMB16.5 million on 8 April 2005.
This computer purchase transaction was subsequently terminated by the
Company and Beijing Yanyuan JinFeng International Trading Ltd. Prior
to the date of issuing these financial statements, Beijing Yanyuan
JinFeng International Trading Ltd. fully settled the amount of
RMB16.5 million due to the Company.
(iii) According to the computer purchase agreement signed by the
Company with Beijing Runze Huiheng Commerce Ltd., an unrelated independent
third party, on 2 April 2005 for a total purchase consideration of
RMB11.2 million, the Company made an advance payment of 50% of the purchase
consideration to Beijing Runze Huiheng Commerce Ltd. amounting to
RMB5.6 million on 4 April 2005. This computer purchase transaction was
subsequently terminated by the Company and Beijing Runze Huiheng Commerce Ltd.
Prior to the date of issuing these financial statements, Beijing Runze Huiheng
Commerce Ltd. fully settled the amount of RMB5.6 million due to the Company.
In addition, on 21 March 2005, the Company made an advance to
Beijing Anfu Property Development Ltd., an unrelated independent
third party, amounting to RMB28 million. During 2005, Beijing Anfu Property
Development Ltd. has repaid an amount of RMB7.5 million to the Company.
Prior to the date of issuing these financial statements, Beijing Anfu Property
Development Ltd. fully settled the remaining balance of RMB20.5 million
to the Company.
Included in the Group's and the Company's prepayments, deposits and
other receivable is the following amount due to a related party:
Group Company
2005 2004 2005 2004
RMB'000 RMB'000 RMB'000 RMB'000
Amount due to a related party
- 200 - 200
Extracts of note 32 to the financial statements
Contingent Liabilities
Chengjian Donghua, the sole associate of the Company which was acquired
from Beida Jade Bird in August 2005, is currently a defendant in a
civil litigation in Beijing. On 17 November 2005, Shenzhen Development
Bank ("SDB"), as the plaintiff, obtained an order from the People's
High Court of Beijing to freeze the assets of Beijing Donghua Company
and Chengjian Donghua for a value equivalent to RMB1,530 million. The
assets frozen by the order included the land use rights of a parcel of
land (the "Land") located at Dongzhimen Wai, Dongcheng District,
Beijing, currently registrated under the name of Chengjian Donghua.
The Land is for the development of a transportation terminal
and a large-scale commercial and residential complex (the "Dongzhimen
Project").
Beijing Donghua Company is a Sino-foreign cooperative joint venture
established by Chengjian Donghua and Strong Ground Investment Limited
("Strong Ground", a Company incorporated in the British Virgin Islands)
in 2002 for the purpose of undertaking the Dongzhimen Project.
Cooperation between Chengjian Donghua and Strong Ground for the
development of the Dongzhimen Project was evidenced by a cooperation
agreement (the "Cooperation Agreement") signed by Chengjian Donghua
and Strong Ground on 19 November 2001 and a supplementary agreement
(the "Supplementary Agreement") signed by both parties on 16 September
2003. By a cancellation agreement (the "Cancellation Agreement") signed
by Chengjian Donghua and Strong Ground on 12 December 2004, Chengjian
Donghua and Strong Ground agreed to cancel the Cooperation Agreement
and the Supplementary Agreement, and to release each other from the
obligations and liabilities under the Cooperation Agreement and the
Supplementary Agreement. As designated by Strong Ground pursuant
to the Cancellation Agreement, Chengjian Donghua repaid Beijing
Donghua Company a sum of RMB700 million (note 16) previously received
by Chengjian Donghua pursuant to the Cooperation Agreement,
as amended by the Supplementary Agreement.
Based on the documents filed with the People's High Court of Beijing,
SDB's claim is for, among other things, an order for the transfer of
the Land to Beijing Donghua Company and that Beijing Donghua Company be
adjudged to be liable a guarantor for a principal sum of RMB1,500
million lent by SDB to Zhongcai State-owned Enterprise Investment
Company Limited ("Zhongcai Enterprise") and Shouchuang Network Company
Limited ("Shouchuang Network") together with interest accrued thereon
of RMB30.74 million up to 31 October 2005. The directors of the
Company are not aware of any relationship between Zhongcai Enterprise
and Shouchuang Network, and the Company and connected persons (as
defined in the Growth Enterprise Market Listing Rules) of the Company.
On 24 February 2006, upon the application by Chengjian Donghua for
discharge of the freeze order and upon the provision of a guarantee by
Sino Investment Credit Guarantee Ltd., a limited liability company
established in the PRC principally engaged in the provision of guarantees
and related advisory services, for the performance of the obligations
of Chengjian Donghua, the People's High Court of Beijing ordered the
discharge of the freeze order. The directors of the Company understand
that, upon the discharge of the freeze order, the Land is released as
a security from the claim by SDB. However, the claim by SDB against
Beijing Donghua Company and Chengjian Donghua for repayment of the
principal sum of RMB1,500 million lent to Zhongcai Enterprise and
Shouchuang Network together with the interest accrued thereon is still
pending adjudication by the People's High Court of Beijing.
Based on the legal opinion provided by the external legal advisors of
Chengjian Donghua, the directors of the Company are of the view that
Chengjian Donghua has a valid defence against the aforesaid litigation
filed by SDB against Chengjian Donghua and therefore, no provision for
such claim was required in the financial statements of Chengjian
Donghua.
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