CHINA DATACAST<08016> - Results Announcement (Final, 2005, Summary)
China Data Broadcasting Holdings Limited announced on 31/8/2006:
(stock code: 08016 )
Year end date :31/12/2005
Currency :HKD
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 : 28,927 578,032
Profit/(Loss) from Operations : (9,012) (316)
Finance cost : (354) N/A
Share of Profit/(Loss) of Associates : N/A N/A
Share of Profit/(Loss) of Jointly
Controlled Entites : N/A N/A
Profit/(Loss) after Taxation & MI : (9,350) 363
% Change Over the Last Period : N/A
EPS / (LPS)
Basic (in dollar) : (HKD 0.0294) HKD 0.0011
Diluted (in dollar) : N/A HKD 0.0011
Extraordinary (ETD) Gain/(Loss) : N/A 6,612
Profit (Loss) after ETD Items : (9,350) 6,975
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
China Data Broadcasting Holdings Limited
Signature :
Name : Shum Shing Kei
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:
( 1 ) Disclaimer of opinion
The auditors stated that they planned their audit so as to
obtain all the information and explanations which they
considered necessary in order to provide them with sufficient
evidence to give reasonable assurance as to whether the
financial statements are free from material misstatement.
The auditors stated that the evidence available to them was
limited as explained below.
( a ) Inventories
Included in the inventories of HKD22,180,000 are defective
goods at cost of HKD22,071,000. These defective goods were
shipped to the supplier of these goods and are repaired
by the supplier free of charge.
The auditors atated that they were unable to obtain
sufficient evidence to justify whether the defective goods
can be sold at amounts higher than their cost. Accordingly,
they were unable to determine whether any write down to net
realizable value should be made against these defective
inventories.
( b ) Professional fee and service deposits paid
( i ) The Group had paid a deposit of HKD3,900,000 to Ms. Fei
Liqiong ("Ms. Fei") pursuant to an agreement. Ms. Fei
had utilized part of the deposit to set off against a
professional fee of HKD1,404,000 paid by her on behalf
of the Company. The outstanding balance of the deposit
was HKD2,496,000 as at 31 December 2005.
The auditors stated that they were unable to obtain
sufficient evidence to justify its validity of the
professional fee and the deposit. As a result, they
were unable to satisfy its properly recognition and
disclosure.
In addition, the balance of HKD2,496,000 has not been
used for any service fee and has not been refunded to
the Group up to the date of this report. The auditors
stated that they were unable to obtain sufficient
evidence to determine the recoverability of the balance
of deposit.
( ii ) The Group had a service deposit paid to Naturestar
Bio-Tech Inc. of HKD3,120,000 as at 31 December 2005.
The auditors stated that they were unable to obtain
sufficient evidence to justify its validity of the
deposit paid. As a result, they were unable to satisfy
its properly recognition and disclosure.
( c ) Amount due from, and administrative and product development
expenses charged by a fellow subsidiary
During the year ended 31 December 2005, the Group advanced a
total amount of HKD2,341,000 to a fellow subsidiary, Apex
Digital (Shanghai) Co., Ltd. ("Apex (Shanghai)"). Part of the
advance was utilized by Apex (Shanghai) to offset against the
administrative and product development expenses of HKD717,000
charged by Apex (Shanghai) to the Group. The amount due from
the fellow subsidiary was HKD1,624,000 as at 31 December 2005.
In relation to the expenses of HKD717,000 charged by Apex
(Shanghai), the auditors stated that they were unable to
obtain sufficient evidence to substantiate its validity. As a
result, they were unable to satisfy its properly recognition
and disclosure.
In addition, the outstanding balance of HKD1,624,000 due from
the fellow subsidiary has not been settled up to the date of
this report. The auditors stated that they were unable to
obtain sufficient evidence to determine the recoverability of
the balance.
( d ) Contingent liabilities
( i ) The Group has contingent liabilities of HKD23.5 million
as at 31 December 2005 relating to a claim by the
holding company of the Group, Apex Digital Inc. ("ADI"),
for certain freight charges paid by ADI on behalf of
the Group to a customer. As the Group has dispute over
this freight charges, the auditors were unable to
obtain sufficient evidence to ascertain whether the
contingent liabilities of freight charge should be
recognized as an expense for the year ended 31 December
2005. Consequently, they were unable to satisfy the
proper disclosure of these liabilities and the
completeness of expenses for the year ended 31 December
2005 and the amount due to the holding company as at 31
December 2005.
( ii ) The Group and the Company have contingent liabilities
relating to a claim for patent infringement. As the
amount of damages claimed was not stated in the writ,
the auditors were unable to obtain sufficient
evidence to determine the extent and possibility of
the claim aganinst the Group and the Company. As a
result, the auditors were unable to satisfy the proper
disclosure of the contingent liabilities and the
completeness of expenses for the year ended 31
December 2005 and related liabilities as at 31
December 2005.
( e ) Amount due from a subsidiary
The Company has an amount due from a subsidiary with net
carrying amount of HKD16,205,000 as at 31 December 2005. Due
to the limitation of scope in respect of the matters, the
auditors were unable to satisfy whether any further
impairment should be made against the carrying amount of the
amount due from a subsidiary for the year ended 31 December
2005, and consequently whether the carrying amount as at 31
December 2005 is fairly stated.
( f ) Going concern
The financial statements have been prepared on a going
concern basis. The Group and the Company have net current
assets and shareholders' funds as at the balance sheet date.
However, as a result of the limitations as set out above,
adjustment might be required to reduce the value of assets to
their recoverable amounts and to provide for any further
liabilities.
In addition, ADI and Mr. David Ji Long Fen pledged their
entire shareholdings in the Company which represented 70.08%
of the issued shares of the Company ("Controlling Shares") to
an independent third party, as a security to secure certain
trade receivables due from ADI to that party. Any changes in
the registered holders of the Controlling Shares may result
in a change in the composition of the board of the directors
of the Company and the future direction of the business and
financial operations of the Group and the Company.
Any adjustment or changes relating to the above matters may
affect the Group's and the Company's ability to continue to
operate as going concern. The auditors were unable to carry
out alternative procedures to satisfy themselves as to the
matters set out above.
Any adjustments that might have been found to be necessary in
respect of the matters set out in points ( a ) to ( d )
above, would have a significant consequential effect on the
net assets of the Group as at 31 December 2005, the Group's
net results and cash flows for the year then ended and the
related disclosures in the financial statements.
Any adjustments that might have been found to be necessary in
respect of professional fee, contingent liabilities and an
amount due from a subsidiary as set out in points ( b(i) ),
( d(ii) ) and ( e ) above, would have a significant
consequential effect on the net assets of the Company as at
31 December 2005, the Company's net results for the year then
ended and the related disclosures in the financial
statements.
In respect alone of the limitations on their work as stated above,
the auditors expressed an opinion that they are unable to form an
opinion as to whether 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 Group's results and cash flows for the
year then ended and as to whether the financial statements have
been properly prepared in accordance with the disclosure
requirements of the Hong Kong Companies Ordinance.
( 2 ) Basis of preparation
The financial statements have been prepared in accordance
with Hong Kong Financial Reporting Standards ( which also
include Statements of Standards Accounting Practice and
Interpretations ( " SSAP " ) ) issued by the Hong Kong
Institute of Certified Public Accountants ( " HKICPA " ),
accounting principles generally accepted in Hong Kong and the
disclosure requirements of the Hong Kong Companies Ordinance.
They have been prepared under the historical cost convention.
( 3 ) Turnover
Turnover represents the invoiced value of goods sold and
services rendered, net of value-added tax, business tax, and
after allowance for goods returned and trade discount.
( 4 ) Taxation
Taxes on profits assessable elsewhere have been calculated at
the rates of tax prevailing in the countries in which the
Group operates, based on existing legislation,
interpretations and practices in respect thereof.
No provision for Hong Kong profits tax is required since the
Group has no assessable profit for the year ( 2004 : Nil ).
( 5 ) (Loss)/Earnings per share
The calculation of basic (loss)/ earnings per share is based
on the net loss attributable to shareholders for the year of
approximately HKD9,350,000 ( 2004 : net profit of HKD363,000
), and the weighted average of 318,000,000 ( 2004 :
318,000,000 ) ordinary shares in issue during the year.
For the year under review, no diluted earnings per share was
presented as there was no potential dilutive ordinary shares
in issue.
The calculation of diluted earnings per share for the year
2004 is based on the net profit attributable to shareholders
of approximately HKD363,000. The weighted average number of
ordinary shares used in the calculation is the 318,000,000
ordinary shares in issue during the year, as used in the
basic earnings per share calculation; and the weighted
average of 1,020,619 ordinary shares assumed to have been
issued at no consideration on the deemed exercise of all
share options during the year.
( 6 ) Audit committee
As at the date of this announcement, there is no independent
non-executive director appointed .
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