DJ HK Bourse: Results Announcement From Yangtzekiang Garment Ltd.
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https://www1.hkexnews.hk/listedco/listconews/sehk/2020/0629/2020062902617.pdf ANNOUNCEMENT OF ANNUAL RESULTS FOR THE YEAR ENDED 31 MARCH 2020
The Board of Directors of Yangtzekiang Garment Limited ("the Company") hereby announces the consolidated results
of the Company and its subsidiaries (together referred to as "the Group") and the Group's interests in joint ventures for
the year ended 31 March 2020 together with comparative figures for the corresponding period and selected explanatory
information as follows:
CONSOLIDATED STATEMENT OF PROFIT OR LOSS
For the year ended 31 March 2020
(Expressed in Hong Kong dollars) 2020 2019 (Note) Note $'000 $'000 3&4
Revenue 656,212 717,614 (545,142)
Cost of sales (585,030)
Gross profit 111,070 132,584 5 10,994
Other income 8,733 (43,823)
Selling and distribution expenses (49,777) (57,721)
Administrative expenses (61,168) (17,154)
Other operating expenses (14,113)
Profit from operations 3,366 16,259 6(a) (4,248)
Finance costs (3,506) (24,295)
Share of (losses)/profits of joint ventures 12,007 7 (14,627)
Impairment losses on other property, plant and equipment (5,170) 11 (10,616)
Net valuation (losses)/gains on investment properties 3,361 6
(Loss)/profit before taxation (50,420) 22,951 8 (366)
Income tax (2,650)
(Loss)/profit for the year (50,786) 20,301
Attributable to: (51,009)
Equity shareholders of the Company 22,062 223
Non-controlling interests (1,761)
(Loss)/profit for the year (50,786) 20,301
(Loss)/earnings per share 10 ($0.25)
Basic and diluted $0.11
Note: The Group has initially applied HKFRS 16 at 1 April 2019 using the modified retrospective approach. Under this approach, the comparative information is not restated. See note 2.
Details of dividends payable to equity shareholders of the Company attributable to the year are set out in note 9(a). -1-
CONSOLIDATED STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME
For the year ended 31 March 2020
(Expressed in Hong Kong dollars) 2020 2019 (Note) $'000 $'000
(Loss)/profit for the year (50,786) 20,301
Other comprehensive income for the year (after tax and reclassification adjustments)
Items that will not be reclassified subsequently to profit or loss:
Equity investments at fair value through other comprehensive income: net movement in the (44) investment revaluation reserve (non-recycling) 1,037
Items that are or may be reclassified subsequently to profit or loss:
Exchange differences on translation of: (5,034)
- financial statements of subsidiaries outside Hong Kong (6,884) (32,673)
- share of joint ventures' net assets (36,896) (37,707) (43,780)
Release of exchange reserve upon deregistration of (1,052)
subsidiaries -
Release of exchange reserve upon disposal of interest - in an associate (55) -
Cash flow hedges: net movement in the hedging reserve 2,255 (38,803)
Other comprehensive income for the year (40,543)
Total comprehensive income for the year (89,589) (20,242)
Attributable to: (90,270)
Equity shareholders of the Company (18,438) 681
Non-controlling interests (1,804)
Total comprehensive income for the year (89,589) (20,242)
Note: The Group has initially applied HKFRS 16 at 1 April 2019 using the modified retrospective approach. Under this approach, the comparative information is not restated. See note 2. -2-
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
At 31 March 2020
(Expressed in Hong Kong dollars) 2020 2019
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(Note) Note $'000 $'000
Non-current assets 11 229,989
Investment properties 242,239 58,487
Other property, plant and equipment 54,761 1,154
Interest in leasehold land held for own use 1,292 289,630 298,292 2,890
Intangible assets 2,985 488,657
Interests in joint ventures 546,154 19,878
Other financial assets 20,011 801,055 867,442
Current assets 51,245
Inventories 69,177 12 119,181
Trade and other receivables 98,375 378
Current tax recoverable 347 272,451
Cash at bank and in hand 323,769 443,255 491,668
Current liabilities 13 73,150
Trade and other payables 84,690 4,745
Contract liabilities 4,952 4,099
Lease liabilities - 7,340
Current tax payable 14,709 89,334 104,351
Net current assets 353,921 387,317
Total assets less current liabilities 1,154,976 1,254,759
Non-current liabilities 24,339
Provision for long service payments 23,498 13,864
Lease liabilities - 16,035
Deferred tax liabilities 16,516 54,238 40,014
NET ASSETS 1,100,738 1,214,745
CAPITAL AND RESERVES 208,418
Share capital 208,418 893,148
Reserves 1,008,228
Total equity attributable to equity shareholders of the Company 1,101,566 1,216,646
Non-controlling interests (828) (1,901)
TOTAL EQUITY 1,100,738 1,214,745
Note: The Group has initially applied HKFRS 16 at 1 April 2019 using the modified retrospective approach. Under this approach, the comparative information is not restated. See note 2. -3-
NOTES:
(Expressed in Hong Kong dollars)
1. BASIS OF PREPARATION The financial information relating to the years ended 31 March 2020 and 2019 included in this preliminary announcement of annual results does not constitute the Company's statutory annual consolidated financial statements for those years but, in respect of the year ended 31 March 2019, is derived from those financial statements. Further information relating to these statutory financial statements required to be disclosed in accordance with section 436 of the Hong Kong Companies Ordinance (Cap. 622) ("Companies Ordinance") is as follows: The financial statements for the year ended 31 March 2020 have yet to be reported on by the Company's auditor and will be delivered to the Registrar of Companies in due course. The Company has delivered the financial statements for the year ended 31 March 2019 to the Registrar of Companies as required by section 662(3) of, and Part 3 of Schedule 6 to, the Companies Ordinance. The Company's auditor has reported on these financial statements for the year ended 31 March 2019. The auditor's report was unqualified; did not include a reference to any matters to which the auditor drew attention by way of emphasis without qualifying its report; and did not contain a statement under sections 406(2), 407(2) or (3) of the Companies Ordinance. The consolidated financial statements of the Group for the year ended 31 March 2020 have been prepared in accordance with all applicable Hong Kong Financial Reporting Standards ("HKFRSs"), which collective term includes all applicable individual Hong Kong Financial Reporting Standards, Hong Kong Accounting Standards ("HKASs") and Interpretations issued by the Hong Kong Institute of Certified Public Accountants ("HKICPA"), accounting principles generally accepted in Hong Kong and the requirements of the Companies Ordinance. These financial statements also comply with the applicable disclosure provisions of the Rules Governing the Listing of Securities on The Stock Exchange of Hong Kong Limited ("the Listing Rules"). In addition, this announcement has been reviewed by the Company's audit committee. The measurement basis used in the preparation of the financial statements is the historical cost basis except that investment properties, investments in equity securities and derivative financial instruments are stated at their fair value. The figures in respect of the preliminary announcement of the Group's results for the year ended 31 March 2020 have been compared by the Company's auditors, KPMG, Certified Public Accountants, to the amounts set out in the Group's draft financial statements for the year and the amounts were found to be in agreement. The work performed by KPMG in this respect was limited and did not constitute an audit, review or other assurance engagement and consequently no assurance has been expressed by the auditors on this announcement.
2. CHANGES IN ACCOUNTING POLICIES The HKICPA has issued a new HKFRS, HKFRS 16, Leases, and a number of amendments to HKFRSs that are first effective for the current accounting period of the Group.
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Except for HKFRS 16, Leases, none of the developments have had a material effect on how the Group's results and financial position for the current or prior periods have been prepared or presented. The Group has not applied any new standard or interpretation that is not yet effective for the current accounting period. HKFRS 16, Leases HKFRS 16 replaces HKAS 17, Leases, and the related interpretations, HK(IFRIC) 4, Determining whether an arrangement contains a lease, HK(SIC) 15, Operating leases - incentives, and HK(SIC) 27, Evaluating the substance of transactions involving the legal form of a lease. It introduces a single accounting model for lessees, which requires a lessee to recognise a right-of-use asset and a lease liability for all leases, except for leases that have a lease term of 12 months or less ("short-term leases") and leases of low value assets. The lessor accounting requirements are brought forward from HKAS 17 substantially unchanged. HKFRS 16 also introduces additional qualitative and quantitative disclosure requirements which aim to enable users of the financial statements to assess the effect that leases have on the financial position, financial performance and cash flows of an entity. The Group has initially applied HKFRS 16 as from 1 April 2019. The Group has elected to use the modified retrospective approach. Comparative information has not been restated and continues to be reported under HKAS 17. Further details of the nature and effect of the changes to previous accounting policies and the transition options applied are set out below: -4-
(a) New definition of a lease The change in the definition of a lease mainly relates to the concept of control. HKFRS 16 defines a lease on the basis of whether a customer controls the use of an identified asset for a period of time, which may be determined by a defined amount of use. Control is conveyed where the customer has both the right to direct the use of the identified asset and to obtain substantially all of the economic benefits from that use. The Group applies the new definition of a lease in HKFRS 16 only to contracts that were entered into or changed on or after 1 April 2019. For contracts entered into before 1 April 2019, the Group has used the transitional practical expedient to grandfather the previous assessment of which existing arrangements are or contain leases. Accordingly, contracts that were previously assessed as leases under HKAS 17 continue to be accounted for as leases under HKFRS 16 and contracts previously assessed as non-lease service arrangements continue to be accounted for as executory contracts.
(b) Lessee accounting and transitional impact HKFRS 16 eliminates the requirement for a lessee to classify leases as either operating leases or finance leases, as was previously required by HKAS 17. Instead, the Group is required to capitalise all leases when it is the lessee, including leases previously classified as operating leases under HKAS 17, other than those short-term leases and leases of low-value assets which are exempt. As far as the Group is concerned, these newly capitalised leases are primarily in relation to other property, plant and equipment. At the date of transition to HKFRS 16 (i.e. 1 April 2019), the Group determined the length of the remaining lease terms and measured the lease liabilities for the leases previously classified as operating leases at the present value of the remaining lease payments, discounted using the relevant incremental borrowing rates at 1 April 2019. The weighted average of the incremental borrowing rates used for determination of the present value of the remaining lease payments was 8.1%. To ease the transition to HKFRS 16, the Group applied the following recognition exemption and practical expedients at the date of initial application of HKFRS 16: (i) the Group elected not to apply the requirements of HKFRS 16 in respect of the recognition of lease liabilities and right-of-use assets to leases for which the remaining lease term ends within 12 months from the date of initial application of HKFRS 16, i.e. where the lease term ends on or before 31 March 2020; and (ii) when measuring the lease liabilities at the date of initial application of HKFRS 16, the Group applied a single discount rate to a portfolio of leases with reasonably similar characteristics (such as leases with a similar remaining lease term for a similar class of underlying asset in a similar economic environment). The following table reconciles the operating lease commitments as at 31 March 2019 to the opening balance for lease liabilities recognised as at 1 April 2019: $'000 Operating lease commitments at 31 March 2019 2,400 Less: commitments relating to leases exempt from capitalisation: short-term leases and other leases with remaining lease term ending on or before 31 March 2020 (51) - leases of low-value assets (17) Add: lease payments for the additional periods where the Group considers it reasonably certain that it will not exercise the termination options 25,215 27,547 Less: total future interest expenses (5,059) Present value of remaining lease payments, discounted using the incremental borrowing rates and total lease liabilities recognised at 1 April 2019 22,488 The right-of-use assets in relation to leases previously classified as operating leases have been recognised at an amount equal to the amount recognised for the remaining lease liabilities, adjusted by the amount of any prepaid lease payments relating to that lease recognised in the consolidated statement of financial position at 31 March 2019. As such, there is no adjustment to the opening balance of equity at 1 April 2019. The Group presents right-of-use assets that do not meet the definition of investment property in "interest in leasehold land held for own use" and "other property, plant and equipment" and presents lease liabilities separately in the consolidated statement of financial position. -5- The following table summarises the impacts of the adoption of HKFRS 16 on the Group's consolidated statement of financial position: Carrying Capitalisation Carrying amount at of operating amount at 31 March 2019 lease contracts 1 April 2019 $'000 $'000 $'000 Line items in the consolidated statement of financial position impacted by the adoption of HKFRS 16: Other property, plant and equipment 54,761 23,657 78,418 Total non-current assets 867,442 23,657 891,099 Trade and other receivables 98,375 (1,169) 97,206 Total current assets 491,668 (1,169) 490,499 Lease liabilities (current) - 4,383 4,383 Total current liabilities 104,351 4,383 108,734 Net current assets 387,317 (5,552) 381,765 Total assets less current liabilities 1,254,759 18,105 1,272,864 Lease liabilities (non-current) - 18,105 18,105 Total non-current liabilities 40,014 18,105 58,119 Net assets 1,214,745 - 1,214,745
(c) Impact on the financial result, segment results and cash flows of the Group After the initial recognition of right-of-use assets and lease liabilities as at 1 April 2019, the Group as a lessee is
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