GOLDEN RESOURCES DEVELOPMENT INTERNATIONAL LIMITED 金源米業國際有限公司. Incorporated in Bermuda with Limited Liability 於百慕達註冊成立之有限公司

Transcription

1 一粥一飯 以愛相傳 GOLDEN RESOURCES DEVELOPMENT INTERNATIONAL LIMITED 金源米業國際有限公司 Incorporated in Bermuda with Limited Liability 於百慕達註冊成立之有限公司 2005 ANNUAL REPORT 年報

2 GOLDEN RESOURCES DEVELOPMENT INTERNATIONAL LIMITED 金源米業國際有限公司 一粥一飯以愛相傳

3 CORPORATE INFORMATION 公司資料 > 04 MESSAGE FROM THE CHAIRMAN 主席函件 05 OR TATEMEN T 董事總經理報告書 > Contents 目錄 REPORT OF THE AUDITORS 核數師報告書 > COMPANY BACKGROUND 集團發展 > CONSOLIDATED BALANCE SHEET REPORT OF THE DIRECTORS 董事會報告書 > CONSOLIDATED INCOME STAT MENT 40 CONSOLIDATED STATEMENT OF CHANGES IN EQUITY 綜合權益變動表 > 43 綜合資產負債表 > 41 BALANCE SHEET 資產負債表 > 42 CONSOLIDATED CASH FLOW STAT ATEMENT 綜合現金流量表 > NOTES TO THE FINANCIAL ST TEMENTS 財務報表附註 > SCHEDULE OF INVESTMENT PROPERTIES 投資物業摘要 > 99 GROUP FINANCIAL SUMMARY 集團財政摘要 > 100

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5 Corporate Information 公司資料

6 Corporate Information 公司資料 DIRECTORS LAM TSANG Suk Yee David LAM Kwing Chan (Chairman) Alvin LAM Kwing Wai (Managing Director) Rosita YUEN LAM Kit Woo Laurent LAM Kwing Chee TSANG Siu Hung Andrew LAM Ping Cheung Leo CHAN Fai Yue John WONG Yik Chung 董事林曾淑儀源林潔和林 熾曾兆雄林炳昌陳輝虞黃翼忠 ) ) PRINCIPAL BANKER The Hongkong & Shanghai Banking Corporation Limited 主要往來銀行香港上海 豐銀行有限公司 SOLICITORS Woo Kwan Lee & Lo 律師胡關李羅律師行 AUDITORS KLL Associates CPA Limited 核數師華融會計師事務所有限公司 QUALIFIED ACCOUNTANT AND COMPANY SECRETARY TSANG Siu Hung 合資格會計師及公司秘書曾兆雄 REGISTERED OFFICE Clarendon House, Church Street Hamilton HM11, Bermuda 註冊辦事處 Clarendon House, Church Street Hamilton HM11, Bermuda PRINCIPAL REGISTRARS The Bank of Bermuda Limited 6 Front Street, Hamilton HM11 Bermuda 股票總過戶登記處 T r mited ilton HM11 Bermuda Corporate Information 公司資料 REGISTRARS IN HONG KONG Standard Registrars Limited Ground Floor, Bank of East Asia Harbour View Centre 56 Gloucester Road, Wanchai, Hong Kong HEAD OFFICE AND PRINCIPAL PLACE OF BUSINESS Golden Resources Centre 2 12 Cheung Tat Road Tsing Yi Island, New Territories Hong Kong 香港之過戶登記處標準證券登記有限公司香港灣仔告士打道 56 號 東亞銀行港灣中心地下 總辦事處及主要營業地點香港新界青衣島長達路 號金源中心 04 Golden Resources Annual Report

7 I would like to express my sincere thanks to all the Directors and staff of the Group for their dedication and contribution during the past year. David LAM Kwing Chan 林 燦 Message From The Chairman 主席函件 主席函件 Message from the Chairman

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9 Managing Director s Statement 董事總經理報告書

10 Managing Director s Statement 董事總經理報告書 On behalf of the Board of Directors, I have pleasure in presenting the audited consolidated results of ( ) and its subsidiaries ( the Group ) for the year ended 31st March, BUSINESS REVIEW AND PROSPECTS During the year under review, our rice core business in Hong Kong market has been performing satisfactorily. We continue to secure our market leadership position, while at the same time maintain strict cost controls. We have been implementing effective marketing initiatives and enhancing operational efficiencies so as to strengthen our brands and expand our competitive advantages. We are confident that our Hong Kong rice business will continue to sustain business growth in the years ahead. Managing Director s Statement 董事總經理報告書 The Group is dedicated to pursuing product excellence. We have won numerous awards in recognition of our high quality products and services. During the year, Golden Elephant Brand, our core brand, was awarded the "Hong Kong Top Brand Mark" by The Chinese Manufacturers' Association of Hong Kong and "Superbrand Platinum" by Reader's Digest for consecutive years. In addition, the Group was acknowledged as a "Caring Company" by the Hong Kong Council of Social Service in recognition of our participation in community services. In China, our rice business continues to deepen the market penetration. Brand enhancement, product innovation and aggressive marketing have been implemented to enlarge the established platform and broaden business base. We are optimistic about the performance of this strategic market in the coming years. 本人謹代表董事會提呈金源米業國際有限公司 ( 本公司 ) 及其附屬公司 ( 本集團 ) 截至二零零五年三月三十一 日止年度之經審核綜合業續 業務回顧及前景 本集團旗下於香港之核心食米業務於回顧年度內表現理 想 本集團繼續鞏固我們的市場領導地位, 並貫徹執行 嚴格的成本控制措施 本集團持續採取有效之市場拓展 策略及致力提高營運效率, 從而進一步提升本集團品牌 知名度及加強競爭優勢 董事會深信, 本集團旗下之 香港食米業務將於未來各年度持續保持增長 本集團致力於產品質素之精益求精, 旗下之優質產品及 服務屢獲殊榮 於本年度內, 本集團之核心品牌 金象牌 繼續榮獲香港中華廠商聯合會頒授之 香港 名牌標識 獎項, 並於讀者文摘之超級品牌選舉中榮獲 超級品牌選舉白金獎 之榮譽 此外, 本集團榮獲 香港社會服務聯會嘉許為 商界展關懷 公司, 以表揚 本集團積極參與社會服務 本集團之中國食米業務繼續滲透該市場 本集團致力 加強品牌效應, 創新產品及積極拓展市場, 以擴大目前 之發展平台及開拓業務基礎 董事會對此策略性市場於 未來各年度之表現深感樂觀 08 Golden Resources Annual Report

11 本集團維持雄厚健全之財政狀況, 並於本年結日持有 現金約達 224,000,0000 港元 本集團旗下穩固之食米業務 繼續帶來充裕之現金流量 憑藉此穩健之現金流量, 本集團具備優勢以把握合適之投資機會 本集團採取 審慎周詳之投資管理策略, 冀能於長遠而言為股東帶來 更佳之回報 憑藉本集團旗下核心業務之雄厚實力及充裕財力, 董事 會深信本集團定能把握機遇及克服挑戰, 並繼續取得業 The Group's financial position is strong and healthy, with cash of about HK$224 million on hand as at the year end. The Group's established rice business continues to contribute strong and growing cash flow. With strong cash flow, we are financially better equipped to take advantage of suitable investment opportunities. We are taking prudent and cautious approach in managing our investment portfolio that it will enhance shareholders' value in the long term. Based on the strength of core business complemented by our strong financial background, we are confident that the Group can meet the opportunities and challenges ahead and will continue our business growth. We have full confidence in the future prospects of the Golden Resources Group. 務上之增長 董事會對於金源集團之未來前景充滿信心 Managing Director s Statement 董事總經理報告書 Golden Resources Annual Report 09

12 Managing Director s Statement 董事總經理報告書 FINAL DIVIDEND The Directors have resolved to recommend payment of a final dividend of 1.25 cents per share (2004: 1.25 cents per share) for the year ended 31st March, 2005 to shareholders on the Register of Members of the Company on Tuesday, 30th August, Together with the interim dividend of 1.25 cents per share paid on Friday, 14th January, 2005, the total dividends for the year will be 2.5 cents per share (2004: 2.5 cents per share). Subject to the approval of shareholders at the forthcoming Annual General Meeting, the dividend warrants will be dispatched to shareholders on or about Tuesday, 6th September, CLOSURE OF REGISTER OF MEMBERS The Register of Members of the Company will be closed from Wednesday, 24th August, 2005 to Tuesday, 30th August, 2005, both days inclusive, during which period no transfer of shares will be effected. In order to qualify for the proposed final dividend, all transfers accompanied by the relevant share certificates must be lodged with the Company's Share Registrars in Hong Kong, Standard Registrars Limited, Ground Floor, Bank of East Asia Harbour View Centre, 56 Gloucester Road, Wanchai, Hong Kong not later than 4:00 p.m. on Tuesday, 23rd August, 末期股息 董事會議決建議派發截至二零零五年三月三十一日止年度 之末期股息每股股 1.25 仙 1.25 仙 ) 予 二零零五年八月三十日 ( 星期二 ) 名列本公司股東名冊之 股東 連同於二零零五年一月十四日 ( 星期五 ) 派發每股 1.25 仙之中期股息計算, 本年度之股息共為每股股 2.5 仙 ( 二零零四年 : 每股 2.5 仙 ) 倘於稍後舉行之股東週年大會上獲得股東批准, 股息單將 於二零零五年九月六日 ( 星期二 ) 或該日期前後寄發予 股東 暫停辦理股份過戶登記手續 本公司將於二零零五年八月二十四日 ( 星期三 ) 至二零 Managing Director s Statement 董事總經理報告書 零五年八月三十日 ( 星期二 )( 首尾兩日包括在內 ) 暫停辦理股份過戶登記手續, 在該期間內任何股份之轉讓將不予辦理 如欲獲派發建議之末期股息, 所有過戶文件連同有關股票須於二零零五年八月二十三日 ( 星期二 ) 下午四時正前送達本公司之香港股份過戶登記處標準證券登記有限公司, 地址為香港灣仔告士打道 56 號東亞銀行港灣中心地下 10 Golden Resources Annual Report

13 購買 出售或贖回上市股份 本公司或其任何附屬公司於年內並無購買 出售或贖回 本公司之任何上市股份 代表董事會 董事總經理 PURCHASE, SALE OR REDEMPTION OF LISTED SHARES Neither the Company nor any of its subsidiaries had purchased, sold or redeemed any of the Company s listed shares during the year. 林 偉 香港, 二零零五年七月十二日 On behalf of the Board Alvin LAM Kwing Wai Managing Director Hong Kong, 12th July, 2005 Managing Director s Statement 董事總經理報告書

14 一粥一飯 以愛相傳 Company Background 集團發展

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16 Company Background 集團發展 金源米業集團創辦於 1946 年, 並於 1991年在香港聯合交易所有限公司上市, 本集團不但是本港食米業之先驅, 而且是全港唯一的食米加工廠, 備有最精湛及先進的生產設施 經過逾五十年努力耕耘, 本集團於業內取得領導地位, 屬下產品包括金象 袋鼠及櫻城等廣受消費者歡迎的品牌 踏入新世紀, 本集團將繼續受惠於已建立之龐大物流系統及分銷網絡, 並會向世界市場提供最優質的產品及服務, 從而在零售及機構性市場佔主導地位 歡迎瀏覽 分享本集團之輝煌業績 Established in 1946, the Golden Resources Group was proud to achieve listing on The Stock Exchange of Hong Kong Limited in As an innovative pioneer in the local rice industry, the Group can assert itself as the sole entity to have established a rice mill in Hong Kong, one of the most sophisticated and advanced rice production facilities available. With over 50 years of incessant growth, the Group has claimed a preeminent position, the envy of all in its field. The Group has made its way to the forefront of this industry with a vast spectrum of highly reputable brands including Golden Elephant, Kangaroo and Cherry Blossom, to name but a few. At the inception of this new century, the Group will continue to capitalize on its highly regarded logistics system and distribution network, and endeavor to set the pace in the retail and institutional markets, in offering products and services of uncompromising and unparalleled excellence to diverse markets across the globe. 集團發展 Company Background Visit to share the proud heritage of Golden Resources Group. Company Background 集團發展 14 Golden Resources Annual Report

17 Kangaroo Brand Golden Elephant Brand Kam Heun ng 袋 d 鼠金牌 金象牌 金香 Cherry Blossom Castle Brand Golden Resources Annual Report 15

18 Report Of The Directors 董事會報告書

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20 REPORT OF THE DIRECTORS The Directors present their annual report and the audited financial statements for the year ended 31st March, PRINCIPAL ACTIVITIES The Company acts as an investment holding company and its subsidiaries are engaged in the business of sourcing, importing, wholesaling, processing, packaging, marketing and distribution of rice, securities investment, property investment and investment holding. Analyses of the Group s turnover and segment results by business segment and geographical segment are set out in note 5 to the financial statements. 5 SUBSIDIARIES AND ASSOCIATES Details of the Company s principal subsidiaries and of the Group s principal associates at 31st March, 2005 are set out in notes 14 and 15 to the financial statements RESULTS AND APPROPRIATION The results of the Group for the year ended 31st March, 2005 and the state of affairs of the Company and the Group at that date are set out in the financial statements on pages 40 to An interim dividend of 1.25 cents per share amounting to approximately HK$16,325,000 was paid to the shareholders during the year. The Directors now recommend the payment of a final dividend of 1.25 cents per share to the shareholders on the Register of Members on Tuesday, 30th August, 2005 amounting to approximately HK$16,336, ,325, ,336,000 Report of the Directors SHARE PREMIUM AND RESERVES Details of movements in the reserves of the Company and the Group during the year are set out in note 27 to the financial statements and the consolidated statement of changes in equity respectively. GROUP FINANCIAL SUMMARY A summary of the results and of the assets and liabilities of the Group for the past five financial years is set out on page 100 of the annual report Golden Resources Annual Report

21 INVESTMENT PROPERTIES The Group revalued all of its investment properties at 31st March, The revaluation surplus of HK$3,600,000 has been credited to the income statement. 3,600,000 Details of movements during the year in the investment properties of the Group are set out in note 13 to the financial statements. 13 PROPERTY, PLANT AND EQUIPMENT Details of movements during the year in the property, plant and equipment of the Group are set out in note 12 to the financial statements. 12 SHARE CAPITAL Details of movements during the year in the share capital of the Company are set out in note 25 to the financial statements. 25 PRE-EMPTIVE RIGHTS There are no provisions for pre-emptive rights under the Company s Bye-Laws or the law of Bermuda, which would oblige the Company to offer new shares on a pro-rata basis to existing shareholders. DIRECTORS The Directors of the Company during the year and up to the date of this report were: Madam LAM TSANG Suk Yee* Mr. David LAM Kwing Chan (Chairman) Mr. Alvin LAM Kwing Wai (Managing Director) Madam Rosita YUEN LAM Kit Woo Mr. Laurent LAM Kwing Chee Mr. TSANG Siu Hung Mr. Andrew LAM Ping Cheung# Mr. Leo CHAN Fai Yue# Mr. John WONG Yik Chung# (appointed on 28th September, 2004) Mr. CHIU Ming Hung# (resigned on 15th January, 2005) * Non-Executive Director # Independent Non-Executive Director * # # # # * # 2005 Golden Resources Annual Report 19

22 DIRECTORS (Continued) In accordance with the Company s Bye-Laws, Messrs. Laurent LAM Kwing Chee, Leo CHAN Fai Yue and John WONG Yik Chung shall retire by rotation and, being eligible, offer themselves for re-election. The term of office of each Directors, including the independent non-executive directors, is the period up to his retirement by rotation in accordance with the Company s Bye-Laws. SERVICE CONTRACTS OF DIRECTORS Messrs. David LAM Kwing Chan and Alvin LAM Kwing Wai had entered into service contracts with the Company for an initial term of three years commencing on 1st January, These service contracts remain effective after the expiry date unless terminated by either party with six months notice in writing. As at 31st March, 2005, none of these service contracts had been terminated by either party. Each of the independent non-executive directors confirmed his independence with the Company pursuant to Rule 3.13 of the Rules Governing the Listing of Securities on The Stock Exchange of Hong Kong Limited (the Listing Rules ). The Company considered all the independent non-executive directors are independent No Director being proposed for re-election at the forthcoming annual general meeting has a service contract which is not determinable by the Group within one year without payment of compensation (other than statutory compensation). Report of the Directors BIOGRAPHICAL DETAILS OF DIRECTORS AND SENIOR MANAGEMENT STAFF 1. Directors The biographical details of the Directors of the Company are as follows: LAM TSANG Suk Yee, aged 91, Non-Executive Director of the Company. Madam Lam is the co-founder of the Group and the Honorary Chairman of the Company. She graduated from the University of Canton. Madam Lam is the mother of Mr. David LAM Kwing Chan Golden Resources Annual Report

23 BIOGRAPHICAL DETAILS OF DIRECTORS AND SENIOR MANAGEMENT STAFF (Continued) 1. Directors (Continued) David LAM Kwing Chan, aged 67, Chairman of the Company. He joined the Group in In 1989, he was made as a Member of the Most Exalted Order of the White Elephant of Thailand by his Majesty, the King of Thailand. In 1993, he was further honoured the Companion (Fourth Class) of the Most Noble Order of the Crown of Thailand. He has extensive experience in rice trading and has been appointed as committee member of the Hong Kong Rice Advisory Committee since April Mr. Lam is the son of Madam LAM TSANG Suk Yee Alvin LAM Kwing Wai, aged 60, Managing Director of the Company. Mr. Lam joined the Group in 1970 after he obtained his Master of Business Administration degree from the University of California, Berkerly, U.S.A. He has extensive experience in financial management and investment planning. Mr. Lam is the brother of Mr. David LAM Kwing Chan. 60 Rosita YUEN LAM Kit Woo, aged 59, Executive Director and Treasurer of the Company. She graduated from the University of California, Los Angeles, U.S.A. with a B.A. in Economics and joined the Group in Madam Yuen has extensive experience in banking and trading. Madam Yuen is the sister of Mr. David LAM Kwing Chan. 59 Laurent LAM Kwing Chee, aged 58, Executive Director of the Company. He graduated from the Eastern Illinois University, U.S.A. with a bachelor degree in Economics and joined the Group in Mr. Lam has extensive experience in property development and investment. Mr. Lam is the brother of Mr. David LAM Kwing Chan Golden Resources Annual Report 21

24 BIOGRAPHICAL DETAILS OF DIRECTORS AND SENIOR MANAGEMENT STAFF (Continued) 1. Directors (Continued) TSANG Siu Hung, aged 50, Executive Director and Financial Controller of the Company. He holds a bachelor degree in Accountancy and is a fellow member of the Association of Chartered Certified Accountants and the Hong Kong Institute of Certified Public Accountants. He joined the Group in Mr. Tsang has extensive professional experience in finance, accounting and auditing fields Andrew LAM Ping Cheung, aged 53, was appointed as an Independent Non-Executive Director of the Company in Mr. Lam is a solicitor and a sole proprietor of Andrew Lam & Co., Solicitors and possesses extensive experience in the field of legal practice. 53 Leo CHAN Fai Yue, aged 64, was appointed as an Independent Non-Executive Director of the Company in Mr. Chan has over 20 years of invaluable experience in Hong Kong stock market and manufacturing industry. During his early years in Japan, he was exposed to the trading and finance field. He is an independent non-executive director of Prosperity Investment Holdings Limited (formerly known as GR Investment International Limited ) and Datronix Holdings Limited, the listed Companies in Hong Kong and a director of a paint manufacturing company in Bangkok. Mr. Chan is a member of The Hong Kong Institution of Directors. 64 Report of the Directors John WONG Yik Chung, aged 38, was appointed as an Independent Non-Executive Director of the Company in Mr. Wong is a qualified accountant and has over 14 years of public accounting and financial consulting experience in the People s Republic of the China ( PRC ), Hong Kong, Australia and Southeast Asia. Mr. Wong has been a member of CPA Australia and the Hong Kong Institute of Certified Public Accountants since 1992 and 1997 respectively. Mr. Wong graduated from the Flinders University of South Australia with a master degree in applied finance in He is an independent non-executive director of EcoGreen Fine Chemicals Group Limited, a listed company in Hong Kong. Mr. Wong is currently engaging in a range of financial consulting services stationing in Shanghai, the PRC Flinders University 22 Golden Resources Annual Report

25 BIOGRAPHICAL DETAILS OF DIRECTORS AND SENIOR MANAGEMENT STAFF (Continued) 2. Senior Management The five Directors of the Company holding executive offices above are directly responsible for the various businesses of the Group. They are regarded as the members of the senior management of the Group. 2. DIRECTORS INTERESTS AND SHORT POSITIONS IN THE SHARES AND UNDERLYING SHARES As at 31st March, 2005, the interests and short positions of the directors and their associates in the shares and underlying shares of the Company or any of its associated corporations (within the meaning of Part XV of the Securities and Futures Ordinance ( SFO )) as recorded in the register required to be kept under Section 352 of the SFO or as otherwise notified to the Company and The Stock Exchange of Hong Kong Limited (the Stock Exchange ) pursuant to the Model Code for Securities Transactions by Directors of Listed Issuers (the Model Code ) contained in the Listing Rules, were as follows: XV 352 Long positions (a) Ordinary shares of the Company (a) Number of ordinary shares beneficially held in the Company Percentage of the issued share capital Personal Family Total of the Name of director interests interests interests Company Mr. David LAM Kwing Chan 7,935,000 7,935, % Mr. Alvin LAM Kwing Wai 17,500,000 6,000,000 23,500, % (Note) Note: The family interests of 6,000,000 shares represent the interests of the wife of Mr. Alvin LAM Kwing Wai. 6,000, Golden Resources Annual Report 23

26 DIRECTORS INTERESTS AND SHORT POSITIONS IN THE SHARES AND UNDERLYING SHARES (Continued) Long positions (Continued) (b) Non-voting deferred shares of Golden Resources Development Limited, a whollyowned subsidiary of the Company (b) Number of non-voting deferred shares Name of director Capacity beneficially held Mr. David LAM Kwing Chan Beneficial owner 260,000 Mr. Alvin LAM Kwing Wai Beneficial owner 260,000 (c) Non-voting deferred shares of Yuen Loong & Company Limited, a wholly-owned subsidiary (c) of the Company Number of non-voting deferred shares Name of director Capacity beneficially held Mr. David LAM Kwing Chan Beneficial owner 13,000 Mr. Alvin LAM Kwing Wai Beneficial owner 13,000 Report of the Directors (d) Ordinary shares of Wellight Development Limited, an associate of the Company (d) Wellight Development Limited Number of ordinary shares held through Name of director Capacity corporation Mr. Laurent LAM Kwing Chee Corporate interest 300 (Note ) Note: These shares held by L.K.C. Company Limited, a company wholly owned by Mr. Laurent LAM Kwing Chee. L.K.C. Company Limited 24 Golden Resources Annual Report

27 DIRECTORS INTERESTS AND SHORT POSITIONS IN THE SHARES AND UNDERLYING SHARES (Continued) Long positions (Continued) (e) Share options (e) Number of Number of underlying Name of director Capacity options held shares Mr. Alvin LAM Kwing Wai Beneficial owner 25,000,000 25,000,000 Madam Rosita YUEN LAM Beneficial owner 25,000,000 25,000,000 Kit Woo Mr. Laurent LAM Kwing Chee Beneficial owner 25,000,000 25,000,000 75,000,000 75,000,000 The details of the personal interest of the directors underlying shares in respect of share options granted by the Company are stated in the following section Share Options Granted To Directors And Employees. Save as disclosed above, none of the directors nor their associates of the Company had or was deemed to have any interest or short positions in the shares or underlying shares of the Company or any of its associated corporations that was required to be recorded pursuant to section 352 of the SFO or as otherwise notified to the Company and the Stock Exchange pursuant to the Model Code contained in the Listing Rules. 352 SHARE OPTIONS GRANTED TO DIRECTORS AND EMPLOYEES Particulars of the Company s share option scheme are set out in note 26 to the financial statements Golden Resources Annual Report 25

28 SHARE OPTIONS GRANTED TO DIRECTORS AND EMPLOYEES (Continued) The following table discloses movements in the Company s share options during the year: Balance Balance outstanding at Exercised Lapsed outstanding Exercise beginning of during during at end of Option grant date price the year the year the year the year HK$ Directors Mr. Alvin LAM 12th January, ,000,000 9,000,000 Kwing Wai 28th August, ,000,000 16,000,000 Madam Rosita YUEN 12th January, ,000,000 15,000,000 LAM Kit Woo 28th August, ,000,000 10,000,000 Mr. Laurent LAM 12th January, ,000,000 15,000,000 Kwing Chee 28th August, ,000,000 10,000,000 Mr. TSANG Siu Hung 30th January, ,250,000 (1,250,000 ) Total 76,250,000 (1,250,000 ) 75,000,000 Report of the Directors Employees 12th January, ,000,000 15,000,000 30th January, ,780,000 (5,180,000 ) (600,000 ) 28th August, ,000,000 10,000,000 Total 30,780,000 (5,180,000 ) (600,000 ) 25,000,000 Grand total 107,030,000 (6,430,000 ) (600,000 ) 100,000, Golden Resources Annual Report

29 SHARE OPTIONS GRANTED TO DIRECTORS AND EMPLOYEES (Continued) The weighted average closing price of the Company s shares immediately before the dates on which the options were exercised was HK$ Save as disclosed above, none of the Directors nor their spouses or children under 18 years of age were granted or had exercised any rights to subscribe for any securities of the Company or any of its associated corporations. ARRANGEMENTS TO PURCHASE SHARES OR DEBENTURES Other than as disclosed in the section headed Share Options Granted To Directors And Employees above, at no time during the year was the Company or any of its subsidiaries, a party to any arrangements to enable the Directors of the Company to acquire benefits by means of the acquisition of shares in, or debentures of, the Company or any other body corporate. RELATED PARTY TRANSACTIONS Details of the related party transactions entered into by the Group during the year are set out in note 32 to the financial statements. 32 CONNECTED TRANSACTIONS During the year, the Group rented a property owned by a landlord in which the Director of the Company, Mr. Alvin LAM Kwing Wai, had a beneficial interest. Total rental expenses incurred for the year amounted to HK$960, ,000 Save as disclosed above, in the opinion of the Directors, there were no other transactions which need to be disclosed as connected transactions in accordance with the requirements of the Listing Rules. DIRECTORS INTERESTS IN CONTRACTS OF SIGNIFICANCE No contracts of significance to which the Company or any of its subsidiaries was a party and in which a Director of the Company had a material interest, whether directly or indirectly, subsisted at the end of the year or at any time during the year Golden Resources Annual Report 27

30 SUBSTANTIAL SHAREHOLDERS As at 31st March, 2005, the register of substantial shareholders maintained by the Company pursuant to Section 336 of the SFO showed that, the Company had been notified of the following substantial shareholders interest, being 5% or more of the Company s issued share capital: 336 5% Percentage of the issued share capital Name of shareholder Number of shares held of the Company Yuen Loong International Limited ( Yuen Loong ) 385,052, (Note 1) Chelsey Developments Ltd. ( Chelsey ) 236,940, (Note 1) Prosperity Investment Holdings Limited (formerly known as GR Investment International Limited ) ( Prosperity ) 65,957, (Note 2) Notes: Report of the Directors (1) Mr. David LAM Kwing Chan, a director of the Company, is interested in approximately 24% of the issued share capital of each of Yuen Loong and Chelsey. Mr. Alvin LAM Kwing Wai, a director of the Company, is a beneficiary of a discretionary trust which is interested in approximately 26% of the issued share capital of each of Yuen Loong and Chelsey. Madam LAM TSANG Suk Yee, a director of the Company, is a beneficiary of a discretionary trust which is interested in approximately 10% of the issued share capital of each of Yuen Loong and Chelsey. Mr. Laurent LAM Kwing Chee, a director of the Company, is a beneficiary of a discretionary trust which is interested in approximately 14% of the issued share capital of each of Yuen Loong and Chelsey. Madam Rosita YUEN LAM Kit Woo, a director of the Company, is a beneficiary of a discretionary trust which is interested in approximately 9% of the issued share capital of each of Yuen Loong and Chelsey. (1) Yuen Loong Chelsey24% Yuen Loong Chelsey26% Yuen LoongChelsey10% Yuen LoongChelsey 14% Yuen LoongChelsey 9% 28 Golden Resources Annual Report

31 SUBSTANTIAL SHAREHOLDERS (Continued) Notes: (Continued) (2) The corporate interests of Prosperity were attributable on account through a number of its wholly-owned subsidiaries. Attentive Investments Limited held 65,957,000 shares of the Company and was a wholly-owned subsidiary of Genius Choice Investments Limited which in turn was a whollyowned subsidiary of GR Investment Holdings Limited. GR Investment Holdings Limited was a wholly-owned subsidiary of Accufocus Investments Limited which in turn was a wholly-owned subsidiary of Prosperity. Accordingly, Genius Choice Investments Limited, GR Investment Holdings Limited, Accufocus Investments Limited and Prosperity were all deemed to be interested in the 65,957,000 shares of the Company held by Attentive Investments Limited. (2) Attentive Investments Limited65,957,000 Genius Choice Investments Limited Genius Choice Investments Limited Accufocus Investments Limited Accufocus Investments Limited Genius Choice Investments LimitedAccufocus Investments Limited Attentive Investments Limited 65,957,000 Save as disclosed above, the Company has not been notified by any other person who had an interest or short position in the shares or underlying shares of the Company as recorded in the register required to be kept by the Company pursuant to Section 336 of the SFO as at 31st March, CHARITABLE DONATIONS During the year, the Group made charitable donations amounting to approximately HK$830, ,000 LIQUIDITY AND FINANCIAL RESOURCES The Group had cash balance of HK$224 million and bank loans of HK$22 million as at 31st March, ,000,00022,000,000 Out of the Group s bank loans outstanding at 31st March, 2005, approximately 66% (HK$15 million) was secured whereas approximately 34% (HK$7 million) was unsecured. All bank loans outstanding at 31st March, 2005 were wholly repayable within one year. 66%15,000,000 34%7,000,000 With cash and other current assets of HK$669 million as at 31st March, 2005 as well as available banking facilities, the Group has sufficient financial resources to satisfy its commitments and working capital requirements. MATERIAL ACQUISITION During the year, the Group acquired the entire paidup registered capital of Sun Kai Yip (Shanghai) Industrial Investment Co., Ltd. from Prosperity Investment Holdings Limited (formerly known as GR Investment International Limited) at a cash consideration of approximately HK$65,123,000 (the Purchase ). The terms of the Purchase were determined after arm s length negotiations and were concluded on normal commercial terms. 669,000,000 65,123, Golden Resources Annual Report 29

32 NET ASSET VALUE The net asset value of the Group as at 31st March, 2005 was HK$0.68 per share based on 1,306,906,460 shares in issue as at that date. 1,306,906, EMPLOYEES AND REMUNERATION POLICY The total number of employees for the Group is about Remuneration packages are reviewed by the Group from time to time. In addition to salary payments, other fringe benefits for the staff include retirement benefits schemes and medical insurance scheme, as well as quarters and housing allowances for certain staff. The Group has taken out personal accident insurance for senior staff and the staff who frequently travel overseas on business trips. MAJOR CUSTOMERS AND SUPPLIERS For the financial year ended 31st March, 2005, the five largest customers of the Group accounted for approximately 69% by value of the Group s turnover and the five largest suppliers accounted for approximately 77% by value of the Group s total purchases. Approximately 34% of the Group s turnover and approximately 51% of the Group s total purchases were attributable to the Group s largest customer and supplier respectively. 69% 77% 34%51% Cousins of the Company s Directors (Mr. David LAM Kwing Chan, Mr. Alvin LAM Kwing Wai, Madam Rosita YUEN LAM Kit Woo and Mr. Laurent LAM Kwing Chee) had beneficial interests in the Group s largest supplier. The Group held 40% beneficial interest in this largest supplier. 40% Report of the Directors Save as disclosed above and as far as the Company s Directors are aware, none of the Directors of the Company or any of their other associates, or any shareholders (which, to the best knowledge of the Directors, owned more than 5% of the Company s issued share capital) had any beneficial interest in the Group s five largest customers and five largest suppliers. 5% 30 Golden Resources Annual Report

33 CODE OF BEST PRACTICE In the opinion of the Directors, the Company has complied with the Code of Best Practice as set out in Appendix 14 to the Listing Rules throughout the financial year ended 31st March, 2005 except that the independent non-executive directors of the Company are not appointed for a specific term but are subject to retirement by rotation and re-election at the annual general meeting of the Company in accordance with the provisions of the Company s Bye- Laws. AUDIT COMMITTEE The audit committee, comprising independent nonexecutive directors, Mr. Andrew LAM Ping Cheung, Mr. Leo CHAN Fai Yue and Mr. John WONG Yik Chung, had reviewed with management the accounting principles and practices adopted by the Group and discussed auditing, internal control and financial reporting matters including the review of the audited financial statements of the Group for the year ended 31st March, COMPLIANCE WITH THE MODEL CODE The Company has adopted the Model Code as set out in Appendix 10 to the Listing Rules. All directors have confirmed, following specific enquiry by the Company, that they fully complied with the required standard as set out in the Model Code throughout the financial year ended 31st March, PUBLIC FLOAT As at the date of this report, based on the information publicly available to the Company and within the knowledge of the directors of the Company, over 25% of the issued share capital of the Company was held by the public as required under the Listing Rules. 25% 2005 Golden Resources Annual Report 31

34 DISCLOSURES PURSUANT TO RULES AND OF THE LISTING RULES Advances to entities under Rule Loans advanced, and guarantees given for facilities granted, to entities by the Group which individually exceeded 8% of the relevant percentage ratios under Rule of the Listing Rules as at 31st March, 2005 are as follows: % Extent of Aggregate of Attributable Non-interest guaranteed advances and interest held by bearing Guarantees facilities guarantees Entities the Group advances (A) given (B) utilised given (A + B) Notes (A) (B) (A+B) % HK$ 000 HK$ 000 HK$ 000 HK$ 000 Sirinumma Company Limited ,644 25,185 30,829 a Siripattana Rice Company Limited ,901 26,060 3,963 31,961 b, c Siripattana Rice Company Limited and Golden Resources Export and (Thailand) Company respectively Limited ,500 16,449 19,500 d Sirinumma Company Limited and and Siripattana Rice respectively Company Limited ,300 26,249 27,300 e Report of the Directors Aggregate of Sirinumma Company Limited and its subsidiaries Sirinumma Company Limited 11,545 98,045 46, ,590 f 32 Golden Resources Annual Report

35 DISCLOSURES PURSUANT TO RULES AND OF THE LISTING RULES (Continued) Advances to entities under Rule (Continued) Extent of Aggregate of Attributable Non-interest guaranteed advances and interest held by bearing Guarantees facilities guarantees Entities the Group advances (A) given (B) utilised given (A + B) Notes (A) (B) (A+B) % HK$ 000 HK$ 000 HK$ 000 HK$ 000 Dragon Fortune Limited ,213 25,213 g Fortune Leader Overseas Chinese (Daiyawan) Real Estate Development Company Limited ,539 6,570 7,539 h Fortune Leader Overseas Chinese (Daiyawan) Investment Company Limited ,475 4,380 5,475 i Aggregate of Dragon Fortune Limited and its subsidiaries Dragon Fortune Limited 25,213 13,014 10,950 38,227 f 2005 Golden Resources Annual Report 33

36 DISCLOSURES PURSUANT TO RULES AND OF THE LISTING RULES (Continued) Financial assistance to and guarantees given for facilities granted to the Company s affiliated companies by the Group under Rule Financial assistance, and guarantees given for facilities granted, to the Company s affiliated companies by the Group which in aggregate exceeded 8% of the relevant percentage ratios under Rule of the Listing Rules as at 31st March, 2005 are as follows: % Extent of Aggregate of Attributable Non-interest Guarantees guaranteed advances and interest held by bearing given facilities guarantees Affiliated companies the Group advances (A) (B) utilised given (A + B) Notes (A) (B) (A+B) % HK$ 000 HK$ 000 HK$ 000 HK$ 000 Aggregate of Sirinumma Company Limited and its subsidiaries Sirinumma Company Limited 11,545 98,045 46, ,590 a-f Golden World Enterprises (Wuhan) Limited ,938 5,938 g Clever Time Investments Limited ,756 17,756 g Report of the Directors Supreme Development Company Limited ,459 2,459 g Wellight Development Limited ,787 7,787 g Total 45,485 98,045 46, ,530 j 34 Golden Resources Annual Report

37 DISCLOSURES PURSUANT TO RULES AND OF THE LISTING RULES (Continued) The proforma combined balance sheet of the above affiliated companies as at 31st March, 2005 is as follows: HK$ 000 Non-current assets 66,598 Current assets 82,286 Current liabilities (84,674 ) Net current liabilities (2,388 ) Non-current liabilities (45,409 ) Shareholders funds 18,801 Details of the above affiliated companies are set out in note 15 to the financial statements. 15 Notes: (a) The advance was made pursuant to a loan agreement dated 30th August, 2002 entered into between Cost Logistics Limited, an indirect whollyowned subsidiary of the Company ( Cost Logistics ), as lender and Sirinumma Company Limited ( Sirinumma ) as borrower. The advance was interestfree, repayable on demand and secured by the shares in Siripattana Rice Company Limited (a) Cost Logistics LimitedCost Logistics Sirinumma Company LimitedSirinumma Sirinumma Siripattana Rice Company LimitedSiripattana Sirinumma Siripattana ( Siripattana ) that would be allotted and issued to Sirinumma as a result of Sirinumma s additional capital contribution to Siripattana. (b) The advances included a shareholder s loan pursuant to loan agreement dated 29th March, 2005 entered into between Cost Logistics as lender and Siripattana as borrower, and current account balances for expenses incurred by Siripattana but paid by Cost (b) Cost Logistics Siripattana Cost LogisticsSiripattana (c) (d) Logistics for Siripattana. The advances were interestfree, unsecured and repayable on demand. Siripattana is the Company s associated company and is accounted for using equity accounting method as the entire issued share capital of Siripattana is held as to 51% by Sirinumma (40% of which entire issued share capital is indirectly owned by the Company) and as to 49% by Cost Logistics. The guarantee was given for banking facilities granted to Siripattana and Golden Resources Export (Thailand) Company Limited. Golden Resources Export (Thailand) Company Limited is a direct whollyowned subsidiary of Siripattana. (c) (d) Siripattana Sirinumma51% Sirinumma 40% Cost Logistics49% Siripattana Siripattana Golden Resources Export (Thailand) Company Limited Golden Resources Export (Thailand) Company LimitedSiripattana 2005 Golden Resources Annual Report 35

38 DISCLOSURES PURSUANT TO RULES AND OF THE LISTING RULES (Continued) Notes: (Continued) (e) The guarantee was given for banking facilities granted (e) Sirinumma Siripattana to Sirinumma and Siripattana. (f) Aggregated pursuant to Rule 13.11(2)(c) of the Listing (f) 13.11(2)(c) Rules. (g) The advances were made as shareholder s loans to (g) finance the investments or working capital of respective entity or affiliated company. The advances were interest-free, unsecured and repayable on demand. (h) The guarantee was given for loan facilities granted (h) to Fortune Leader Overseas Chinese (Daiyawan) Real Estate Development Company Limited ( FL Real Dragon Fortune Limited Estate ). FL Real Estate is owned as to 80% by 80% Fortune Leader Investment Limited ( FL Investment ), a direct wholly-owned subsidiary of Dragon Fortune 20% Limited, and as to 20% by an Independent Third Party. (i) The guarantee was given for loan facilities granted (i) to Fortune Leader Overseas Chinese (Daiyawan) Investment Company Limited ( FL Overseas ). FL Dragon Fortune Limited Overseas is owned as to 80% by FL Investment, a 80%20% direct wholly-owned subsidiary of Dragon Fortune Limited, and as to 20% by an Independent Third Party. (j) Aggregated pursuant to Rule of the Listing (j) Rules. Report of the Directors 36 Golden Resources Annual Report

39 AUDITORS The consolidated financial statements of the Group for the years ended 31st March, 2003 and 2004 were audited by Deloitte Touche Tohmatsu. During the year, Messrs. Deloitte Touche Tohmatsu resigned and KLL Associates CPA Limited were appointed as auditors of the Company on 15th April, The consolidated financial statements of the Group for the year ended 31st March, 2005 were audited by KLL Associates CPA Limited. A resolution will be submitted to the forthcoming Annual General Meeting to re-appoint KLL Associates CPA Limited as auditors of the Company. On behalf of the Board Alvin LAM Kwing Wai Managing Director Hong Kong, 12th July, Golden Resources Annual Report 37

40 REPORT OF THE AUDITORS 29th Floor, Wing On Centre, 111 Connaught Road, Central, Hong Kong TO THE MEMBERS OF GOLDEN RESOURCES DEVELOPMENT INTERNATIONAL LIMITED (Incorporated in Bermuda with limited liability) ( We have audited the financial statements on pages 40 to 98 which have been prepared in accordance with accounting principles generally accepted in Hong Kong RESPECTIVE RESPONSIBILITIES OF DIRECTORS AND AUDITORS The Company s Directors are responsible for the preparation of financial statements which give a true and fair view. In preparing financial statements which give a true and fair view it is fundamental that appropriate accounting policies are selected and applied consistently. It is our responsibility to form an independent opinion, based on our audit, on those financial statements and to report our opinion solely to you, as a body, in accordance with Section 90 of the Bermuda Companies Act, and for no other purpose. We do not assume responsibility towards or accept liability to any other person for the contents of this report. 90 Report of the Auditors BASIS OF OPINION We conducted our audit in accordance with Statements of Auditing Standards issued by the Hong Kong Institute of Certified Public Accountants. An audit includes examination, on a test basis, of evidence relevant to the amounts and disclosures in the financial statements. It also includes an assessment of the significant estimates and judgments made by the Directors in the preparation of the financial statements, and of whether the accounting policies are appropriate to the circumstances of the Company and the Group, consistently applied and adequately disclosed. 38 Golden Resources Annual Report

41 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. 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. OPINION In our opinion the financial statements give a true and fair view of the state of affairs of the Company and the Group as at 31st March, 2005 and of the results 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. KLL Associates CPA Limited Certified Public Accountants (Practising) Lee Ka Leung, Daniel Practising Certificate Number P01220 P01220 Hong Kong, 12th July, Golden Resources Annual Report 39

42 CONSOLIDATED INCOME STATEMENT For the year ended 31st March, 2005 Notes HK$ 000 HK$ 000 TURNOVER 4 731, ,578 Cost of sales (522,893) (611,303) GROSS PROFIT 208, ,275 Unrealised (loss)/gain on investments in securities (62,906) 15,931 Surplus/(deficit) on revaluation of investment properties 3,600 (9,130) Other income 6 20,575 13,322 Selling and distribution costs (36,143) (36,026) Administrative expenses (102,044) (119,018) Write-back of provision for receivables 11,772 Gain on disposal of investments in securities 3,551 Impairment loss recognised on investments in securities (5,207) (6,452) PROFIT FROM OPERATIONS 7 41,880 47,902 Finance costs 8 (635) (1,230) Share of results of associates (5,429) 3,327 (Amortisation of goodwill)/release of negative goodwill of an associate (474) 581 Loss on disposal of an associate (2,465) Loss on partial disposal of an associate (19,210) Loss on deemed disposal of an associate (9,465) PROFIT BEFORE TAXATION 13,667 41,115 Taxation 9 (19,334) (9,761) Consolidated Income Statement (LOSS)/PROFIT AFTER TAXATION (5,667) 31,354 Minority interests (2,673) 6,672 NET (LOSS)/PROFIT FOR THE YEAR (8,340) 38,026 DIVIDENDS 10 32,666 32,468 (LOSS)/EARNINGS PER SHARE 11 Basic HK (0.6) cents HK 2.9 cents Diluted N/A HK 2.9 cents 40 Golden Resources Annual Report

43 CONSOLIDATED BALANCE SHEET At 31st March, 2005 Notes HK$ 000 HK$ 000 NON-CURRENT ASSETS Property, plant and equipment , ,823 Investment properties 13 43,630 50,030 Interests in associates 15 93, ,486 Investments in securities 16 12,448 24,053 Advances to investee companies 16 42,812 51,371 Negative goodwill , ,763 CURRENT ASSETS Inventories 18 64,332 65,958 Trade debtors 19 52,262 46,445 Other debtors, deposits and prepayments 133,375 91,182 Investments in securities , ,115 Cash and cash equivalents 224,411 97, , ,423 CURRENT LIABILITIES Trade creditors 20 7,227 6,866 Other creditors and accruals 54,649 21,696 Tax liabilities 24,324 11,170 Bank loans 21 22,226 19, ,426 59,485 NET CURRENT ASSETS 561, ,938 TOTAL ASSETS LESS CURRENT LIABILITIES 915, ,701 NON-CURRENT LIABILITIES Bank loans 21 2,701 Deferred tax liabilities 22 11,725 12,006 Advances from minority shareholders 23 11,858 12,202 23,583 26,909 MINORITY INTERESTS 24 9,230 8, , ,374 CAPITAL AND RESERVES Share capital , ,048 Reserves , ,326 The financial statements on pages 40 to 98 were approved and authorised for issue by the Board of Directors on 12th July, 2005 and are signed on its behalf by: Alvin LAM Kwing Wai Managing Director TSANG Siu Hung Executive Director 883, , Golden Resources Annual Report 41

44 BALANCE SHEET At 31st March, 2005 Notes HK$ 000 HK$ 000 NON-CURRENT ASSET Interests in subsidiaries , ,335 CURRENT ASSETS Other debtors, deposits and prepayments Cash and cash equivalents CURRENT LIABILITY Other creditors and accruals 46 NET CURRENT ASSETS , ,483 CAPITAL AND RESERVES Share capital , ,048 Reserves , , , ,483 Alvin LAM Kwing Wai Managing Director TSANG Siu Hung Executive Director Balance Sheet 42 Golden Resources Annual Report

45 CONSOLIDATED STATEMENT OF CHANGES IN EQUITY For the year ended 31st March, 2005 Land and Capital buildings Share Share Goodwill redemption revaluation Exchange Dividend Retained capital premium reserve reserve reserve reserve* reserve earnings* Total * * HK$ 000 HK$ 000 HK$ 000 HK$ 000 HK$ 000 HK$ 000 HK$ 000 HK$ 000 HK$ 000 At 1st April, , ,463 (22,802 ) ,838 (503 ) 16, , ,075 Exchange adjustments less minority interests 1 1 Share of exchange adjustments of associates 1,319 1,319 Effect of change in tax rate (862 ) (862 ) Exercise of share options 791 1,344 2,135 Eliminated on disposal of subsidiaries 20 (80 ) (60 ) Eliminated on deemed disposal of an associate 3,102 3,102 Net profit for the year 38,026 38,026 Prior year final dividend paid (16,168 ) (16,168 ) Adjustment of final dividend for the year ended 31st March, 2003 (1 ) (1 ) Interim dividend paid (16,193 ) (16,193 ) Final dividend proposed for the year ended 31st March, ,274 (16,274 ) At 31st March, , ,807 (19,680 ) , , , ,374 Exchange adjustments less minority interests Share of exchange adjustments of associates (173 ) (173 ) Exercise of share options 643 1,093 1,736 Eliminated on disposal of a subsidiary (9 ) (9 ) Eliminated on disposal of an associate (229 ) (229 ) Eliminated on partial disposal of an associate 5,182 (93 ) 5,089 Released on reclassification from associates to investments in securities 10,340 (184 ) 10,156 Net loss for the year (8,340 ) (8,340 ) Prior year final dividend paid (16,274 ) (16,274 ) Adjustment of final dividend for the year ended 31st March, 2004 (5 ) (5 ) Interim dividend paid (16,325 ) (16,325 ) Final dividend proposed for the year ended 31st March, ,336 (16,336 ) At 31st March, , ,900 (4,167 ) , , , ,031 *Reserves attributable to * associates At 31st March, (20,633 ) (20,320 ) At 31st March, (40,633 ) (39,641 ) Total equity of the Group represents share capital amounting to approximately HK$130,691,000 (2004: HK$130,048,000) and reserves amounting to approximately HK$752,340,000 (2004: HK$777,326,000). Goodwill reserve of the Group represents goodwill amounting to approximately HK$12,996,000 (2004: HK$28,518,000) and negative goodwill amounting to approximately HK$8,829,000 (2004: HK$8,838,000). 130,691, ,048, ,340,000777,326,000 12,996,000 28,518,000 8,829,0008,838, Golden Resources Annual Report 43

46 CONSOLIDATED CASH FLOW STATEMENT For the year ended 31st March, HK$ 000 HK$ 000 Consolidated Cash Flow Statement OPERATING ACTIVITIES Profit before taxation 13,667 41,115 Adjustments for: Impairment loss recognised on investments in securities 5,207 6,452 Interest income (12,787) (9,844) Finance costs 635 1,230 Dividend income from investments in securities (1,750) (955) Depreciation and amortisation of property, plant and equipment 11,573 13,127 Loss/(gain) on disposal/written off of property, plant and equipment 261 (5) Share of results of associates 5,429 (3,327) Amortisation of goodwill/(release of negative goodwill) of an associate 474 (581) (Surplus)/deficit on revaluation of investment properties (3,600) 9,130 Bad debts written off 1,368 1,447 Gain on disposal of subsidiaries (9) (50) Loss on deemed disposal of an associate 9,465 Loss on disposal of an associate 2,465 Loss on partial disposal of an associate 19,210 Release of negative goodwill arising from acquisition of a subsidiary (579) Gain on disposal of an investment property (890) Gain on disposal of investments in securities (3,551) Operating cash flows before movements in working capital 37,123 67,204 Decrease/(increase) in investments in securities other investments 132,942 (70,389) Decrease/(increase) in inventories 1,626 (4,342) Increase in trade debtors (7,185) (4,506) Increase in other debtors, deposits and prepayments (38,399) (39,409) Increase/(decrease) in trade creditors 361 (3,925) Increase/(decrease) in other creditors and accruals 5,736 (3,350) Effect of foreign exchange rate changes 31 (345) Cash generated from/(used in) operations 132,235 (59,062) Hong Kong Profits Tax paid (6,687) (13,040) Hong Kong Profits Tax refunded Income tax in other jurisdiction paid (270) (275) NET CASH GENERATED FROM/ (USED IN) OPERATING ACTIVITIES 126,193 (72,374) 44 Golden Resources Annual Report

47 Note HK$ 000 HK$ 000 INVESTING ACTIVITIES Interest received 9,462 11,934 Dividend received from investments in securities 1, Advances to associates (5,492) (1,280) Acquisition of a subsidiary 30 2,038 (17,099) Addition to investment in an associate (17,991) (10,383) Purchases of property, plant and equipment (4,511) (8,757) Advances to investee companies (256) (4,260) Purchase of investments in securities investment securities (2,961) Repayments from investee companies 13,016 2,050 Repayments from associates 9,130 46,682 Proceeds from disposal of property, plant and equipment Proceeds from disposal of an investment property 10,890 Proceeds from partial disposal of an associate 5,932 Proceeds from disposal of investments in securities 10,006 NET CASH GENERATED FROM INVESTING ACTIVITIES 34,355 17,302 FINANCING ACTIVITIES Dividends paid (32,604) (32,362) Interest paid (559) (1,305) New bank loans raised 7,547 9,434 Proceeds from issue of new shares 1,736 2,135 Repayments of bank loans (7,775) (17,329) Repayments of advances from minority shareholders (2,205) (3,239) NET CASH USED IN FINANCING ACTIVITIES (33,860) (42,666) NET INCREASE/(DECREASE) IN CASH AND CASH EQUIVALENTS 126,688 (97,738) CASH AND CASH EQUIVALENTS AT BEGINNING OF THE YEAR 97, ,461 CASH AND CASH EQUIVALENTS AT END OF THE YEAR 224,411 97,723 ANALYSIS OF THE BALANCES OF CASH AND CASH EQUIVALENTS Time deposits, bank balances and cash 213,107 97,723 Short-term liquid investments 11, ,411 97, Golden Resources Annual Report 45

48 NOTES TO THE FINANCIAL STATEMENTS For the year ended 31st March, GENERAL The Company is incorporated in Bermuda as an exempted company with limited liability and its shares are listed on The Stock Exchange of Hong Kong Limited (the Stock Exchange ). 1. The Company acts as an investment holding company and its subsidiaries are engaged in the business of sourcing, importing, wholesaling, processing, packaging, marketing and distribution of rice, securities investment, property investment and investment holding. 2. IMPACT OF RECENTLY ISSUED ACCOUNTING STANDARDS The Hong Kong Institute of Certified Public Accountants has issued a number of new and revised Hong Kong Financial Reporting Standards and Hong Kong Accounting Standards which are effective for accounting periods beginning on or after 1st January, 2005 ( new HKFRSs ). 2. Notes to the Financial Statements The Group has not early adopted these new HKFRSs in the financial statements for the year ended 31st March, The Group has already commenced an assessment of the impact of these new HKFRSs but is not yet in a position to state whether these new HKFRSs would have a significant impact on its results of operations and financial position. 3. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES The financial statements have been prepared under the historical cost convention, as modified for the revaluation of land and buildings, investment properties and investments in securities Golden Resources Annual Report

49 3. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued) The financial statements have been prepared in accordance with accounting principles generally accepted in Hong Kong. The principal accounting policies adopted are as follows: 3. Basis of consolidation The consolidated financial statements incorporate the financial statements of the Company and its subsidiaries made up to 31st March each year. The results of subsidiaries acquired or disposed of during the year are included in the consolidated income statement from the effective date of acquisition or up to the effective date of disposal, as appropriate. Goodwill Goodwill arising on consolidation represents the excess of the cost of acquisition over the Group s interest in the fair value of the identifiable assets and liabilities of a subsidiary or an associate at the date of acquisition. Goodwill arising on acquisitions prior to 1st April, 2001 continues to be held in reserves, and will be charged to the income statement at the time of disposal of the relevant subsidiary or associate, or at such time as the goodwill is determined to be impaired. Goodwill arising on acquisitions after 1st April, 2001 is capitalised and amortised on a straight-line basis over its estimated useful economic life. Goodwill arising on the acquisition of an associate is included within the carrying amount of the associate. Goodwill arising on the acquisition of subsidiaries is presented separately in the balance sheet. On disposal of a subsidiary or an associate, the attributable amount of unamortised goodwill or goodwill previously eliminated against or credited to reserves is included in the determination of the profit or loss on disposal Golden Resources Annual Report 47

50 3. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued) Negative goodwill Negative goodwill arising on consolidation represents the excess of the Group s interest in the fair value of the identifiable assets and liabilities of a subsidiary or an associate at the date of acquisition over the cost of acquisition. 3. Negative goodwill arising on acquisitions prior to 1st April, 2001, continues to be held in reserves, and will be credited to income at the time of disposal of the relevant subsidiary or associate. Negative goodwill arising on acquisitions after 1st April, 2001 is presented as a deduction from assets. To the extent that such negative goodwill is attributable to losses or expenses anticipated at the date of acquisition, it is released to income in the period in which those losses or expenses arise. The remaining negative goodwill is recognised as income on a straight-line basis over the remaining average useful life of the identifiable acquired depreciable assets. To the extent that such negative goodwill exceeds the aggregate fair value of the acquired identifiable non-monetary assets, it is recognised in income immediately. Notes to the Financial Statements Negative goodwill arising on the acquisition of an associate is deducted from the carrying value of that associate. Negative goodwill arising on the acquisition of subsidiaries is presented separately in the balance sheet as a deduction from assets. Revenue recognition (i) Sales of goods are recognised as revenue when goods are delivered and title has passed. (ii) Rental income under operating leases is recognised on a straight-line basis over the relevant lease terms. (i) (ii) 48 Golden Resources Annual Report

51 3. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued) Revenue recognition (Continued) (iii) Revenue arising on the sale of investments in securities is recognised on a trade-date basis. 3. (iii) (iv) Dividend income from investments is (iv) recognised when the Group s rights to receive payment have been established. (v) Interest income is accrued on a time (v) basis, by reference to the principal outstanding and at the interest rate applicable. Investments in subsidiaries Investments in subsidiaries are included in the Company s balance sheet at cost less any identified impairment loss. Interests in associates The consolidated income statement includes the Group s share of the post-acquisition results of its associates for the year. In the consolidated balance sheet, interests in associates are stated at the Group s share of the net assets of the associates, plus the goodwill or less the negative goodwill in so far as it has not already been written off/ amortised/released to income, less any identified impairment loss. Borrowing costs Borrowing costs directly attributable to the acquisition, construction or production of qualifying assets, are capitalised as part of the cost of those assets. Capitalisation of such borrowing costs ceases when the assets are substantially ready for their intended use or sale. All other borrowing costs are recognised as expenses in the period in which they are incurred Golden Resources Annual Report 49

52 3. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued) Property, plant and equipment Property, plant and equipment are stated at cost or valuation less accumulated depreciation and amortisation and accumulated impairment loss. 3. Notes to the Financial Statements Certain of the Group s leasehold land and buildings are stated at their revalued amounts at 1990, less subsequent accumulated depreciation and amortisation and any subsequent impairment losses. Advantage has been taken of the transitional relief provided by paragraph 80 of Statement of Standard Accounting Practice No. 17 Property, Plant and Equipment issued by the Hong Kong Institute of Certified Public Accountants from the requirement to make regular revaluations of the Group s leasehold land and buildings which had been carried at revalued amounts prior to 30th September 1995, and accordingly no further revaluation of leasehold land and buildings is carried out. In previous years, the surplus arising on revaluation of these properties was credited to the land and buildings revaluation reserve. Any future decrease in value of these assets will be dealt with as an expense to the extent that they exceed the balance, if any, on the land and buildings revaluation reserve relating to a previous revaluation of the same asset. On the subsequent sale or retirement of a revalued leasehold land and buildings, the attributable revaluation surplus is transferred to retained earnings. 50 Golden Resources Annual Report

53 3. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued) Property, plant and equipment (Continued) Depreciation and amortisation are provided to write off the cost or valuation of items of property, plant and equipment, over their estimated useful lives, using the straight-line method, at the following rates per annum: 3. Freehold land Nil Leasehold land Over the term of the lease Buildings 4% Factory premises in elsewhere in the People s Republic of China (the PRC ) 2% 5% Furniture, fixtures and equipment 5% 20% Plant and machinery 5% 33% Motor vehicles and vessels 12% 33% 4% 2%5% 5%20% 5%33% 12%33% The gain or loss arising on the disposal or retirement of an item of property, plant and equipment is determined as the difference between the sale proceeds and the carrying amount of the asset and is recognised in the income statement. Impairment At each balance sheet date, the Group reviews the carrying amounts of its assets to determine whether there is any indication that those assets have suffered an impairment loss. If the recoverable amount of an asset is estimated to be less than its carrying amount, the carrying amount of the asset is reduced to its recoverable amount. An impairment loss is recognised as an expense immediately, unless the relevant asset is carried at a revalued amount under another accounting standard, in which case the impairment loss is treated as a revaluation decrease under that accounting standard Golden Resources Annual Report 51

54 3. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued) Impairment (Continued) Where an impairment loss subsequently reverses, the carrying amount of the asset is increased to the revised estimate of its recoverable amount, such that the increased carrying amount does not exceed the carrying amount that would have been determined had no impairment loss been recognised for the asset in prior years. A reversal of an impairment loss is recognised as income immediately, unless the relevant asset is carried at a revalued amount under another accounting standard, in which case the reversal of the impairment loss is treated as a revaluation increase under that accounting standard. 3. Investment properties Investment properties are completed properties which are held for their investment potential, any rental income being negotiated at arm s length. Notes to the Financial Statements Investment properties are stated at their open market value based on independent professional valuations at each balance sheet date. Any revaluation increase or decrease arising on the revaluation of investment properties is credited or charged to the investment property revaluation reserve unless the balance on this reserve is insufficient to cover a revaluation decrease, in which case the excess of the revaluation decrease over the balance on the investment property revaluation reserve is charged to the income statement. Where a decrease has previously been charged to the income statement and a revaluation increase subsequently arises, this increase is credited to the income statement to the extent of the decrease previously charged. On disposal of investment properties, the balance on the investment property revaluation reserve attributable to the property is transferred to the income statement. 52 Golden Resources Annual Report

55 3. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued) Investment properties (Continued) No depreciation is provided on investment properties except where the unexpired term of the relevant lease is 20 years or less. 3. Investments in securities Investments in securities are recognised on a trade-date basis and are initially measured at cost. Investment securities, which are securities held for an identified long-term strategic purpose, are measured at subsequent reporting dates at cost, as reduced by any impairment loss that is other than temporary. Other investments are measured at fair value, with unrealised gains or losses included in net profit or loss for the year. Inventories Inventories are stated at the lower of cost and net realisable value. Cost is calculated using the weighted average cost method. Foreign currencies Transactions in foreign currencies are initially recorded at the rates of exchange prevailing on the dates of the transactions. Monetary assets and liabilities denominated in foreign currencies are re-translated at the rates prevailing on the balance sheet date. Profits and losses arising on exchange are included in net profit or loss for the year. On consolidation, the assets and liabilities of the Group s overseas operations are translated at exchange rates prevailing on the balance sheet date. Income and expense items are translated at the average exchange rates for the year. Exchange differences arising, if any, are classified as equity and transferred to the Group s exchange reserve. Such translation differences are recognised as income or as expenses in the period in which the operation is disposed of Golden Resources Annual Report 53

56 3. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued) Taxation Taxation expense represents the sum of the tax currently payable and deferred tax. 3. The tax currently payable is based on taxable profit for the year. Taxable profit differs from net profit as reported in the income statement because it excludes items of income or expense that are taxable or deductible in other years and it further excludes items that are never taxable or deductible. Notes to the Financial Statements Deferred tax is the tax expected to be payable or recoverable on differences between the carrying amounts of assets and liabilities in the financial statements and the corresponding tax bases used in the computation of taxable profit, and is accounted for using the balance sheet liability method. Deferred tax liabilities are generally recognised for all taxable temporary differences, and deferred tax assets are recognised to the extent that it is probable that taxable profits will be available against which deductible temporary differences can be utilised. Such assets and liabilities are not recognised if the temporary difference arises from goodwill (or negative goodwill) or from the initial recognition (other than in a business combination) of other assets and liabilities in a transaction that affects neither the taxable profit nor the accounting profit. Deferred tax liabilities are recognised for taxable temporary differences arising on investments in subsidiaries and associates except where the Group is able to control the reversal of the temporary difference and it is probable that the temporary difference will not reverse in the foreseeable future. The carrying amount of deferred tax assets is reviewed at each balance sheet date and reduced to the extent that it is no longer probable that sufficient taxable profits will be available to allow all or part of the asset to be recovered. 54 Golden Resources Annual Report

57 3. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued) Taxation (Continued) Deferred tax is calculated at the tax rates that are expected to apply in the period when the liability is settled or the asset is realised. Deferred tax is charged or credited to the income statement, except when it relates to items charged or credited directly to equity, in which case the deferred tax is also dealt with in equity. 3. Retirement benefits costs Payments to defined contribution retirement benefit plans are charged as expenses as they fall due. Operating leases Rental expenses payable under operating leases are charged to the income statement on a straight-line basis over the relevant lease terms. Related parties Parties are considered to be related if one party has the ability, directly or indirectly, to control the other party or exercise significant influence over the other party in making financial and operating decisions. Parties are also considered to be related if they are subject to common control or common significant influence. Related parties may be individuals or corporate entities. Cash and cash equivalents Cash and cash equivalents as presented in the balance sheet represent cash on hand, cash and time deposits with banks and other financial institutions, and short-term liquid investments which are readily convertible into known amounts of cash and subject to an insignificant risk of change in value. For the purpose of the consolidated cash flow statement, cash and cash equivalents which have short-term maturity of generally within three months upon acquisition, together with bank overdrafts and bank loans, if any, which are repayable on demand and form an integral part of the Group s cash management, are included as components of cash and cash equivalents as presented in the consolidated cash flow statement Golden Resources Annual Report 55

58 4. TURNOVER Turnover represents the net amounts received and receivable for rice sold to outside customers, less returns and allowances, sales proceeds from trading of securities, and rental income from investment properties for the year, and is analysed as follows: 4. THE GROUP HK$ 000 HK$ 000 Rice sales 683, ,583 Trading of securities 46, ,093 Rental income from investment properties 2,254 1, , , BUSINESS AND GEOGRAPHICAL SEGMENTS Business segments For management purposes, the Group is currently organised into four operating divisions, namely rice operation, securities investment, property investment and corporate and others. These divisions are the basis on which the Group reports its primary segment information. 5. Notes to the Financial Statements The result of warehouse operation, which was presented in prior years financial statements as a separate segment, is consolidated into rice operation for the current year as the provisions of warehouse services are mainly utilized by intra-group rice operation. Principal activities are as follows: Rice operation sourcing, importing, wholesaling, processing, packaging, marketing and distribution of rice Securities investments in shares and investment bonds Property property investment and investment development Corporate and corporate income and others expenses and other investments 56 Golden Resources Annual Report

59 5. BUSINESS AND GEOGRAPHICAL SEGMENTS (Continued) Business segments (Continued) Segment information about these businesses is presented below: 5. Income statement for the year ended 31st March, 2005 Rice Securities Property Corporate operation investment investment and others Consolidated HK$ 000 HK$ 000 HK$ 000 HK$ 000 HK$ 000 TURNOVER External sales 683,301 46,020 2, ,575 RESULT Segment results 84,176 (66,316 ) 19,483 4,537 41,880 Finance costs (635 ) Share of results of associates (4,885 ) (920 ) 376 (5,429 ) Amortisation of goodwill of an associate (474 ) (474 ) Loss on disposal of an associate (2,465 ) (2,465 ) Loss on partial disposal of an associate (19,210 ) (19,210 ) Profit before taxation 13,667 Taxation (19,334 ) Loss after taxation (5,667 ) Minority interests (2,673 ) Net loss for the year (8,340 ) 2005 Golden Resources Annual Report 57

60 5. BUSINESS AND GEOGRAPHICAL SEGMENTS (Continued) Business segments (Continued) Balance sheet at 31st March, Rice Securities Property Corporate operation investment investment and others Consolidated HK$ 000 HK$ 000 HK$ 000 HK$ 000 HK$ 000 ASSETS Segment assets 260, , , , ,894 Interests in associates 17,263 25,024 51,089 93,376 Consolidated total assets 1,024,270 LIABILITIES Segment liabilities 30,871 15,718 27,145 73,734 Unallocated corporate liabilities 58,275 Consolidated total liabilities 132,009 Other information for the year ended 31st March, 2005 Notes to the Financial Statements Rice Securities Property Corporate operation investment investment and others Consolidated HK$ 000 HK$ 000 HK$ 000 HK$ 000 HK$ 000 Additions to property, plant and equipment 4, ,511 Depreciation and amortisation of property, plant and equipment 10, ,573 Release of negative goodwill arising from acquisition of a subsidiary Amortisation of goodwill of an associate Surplus on revaluation of investment properties 3,600 3,600 Unrealised loss on investments in securities 62,906 62,906 Gain on disposal of an investment property Bad debts written off 1,368 1, Golden Resources Annual Report

61 5. BUSINESS AND GEOGRAPHICAL SEGMENTS (Continued) Business segments (Continued) Income statement for the year ended 31st March, Rice Securities Property Corporate operation investment investment and others Consolidated HK$ 000 HK$ 000 HK$ 000 HK$ 000 HK$ 000 TURNOVER External sales 650, ,093 1, ,578 RESULT Segment results 45,576 12,698 (8,319 ) (2,053 ) 47,902 Finance costs (1,230 ) Share of results of associates (1,901 ) 11,194 (3,987 ) (1,979 ) 3,327 Release of negative goodwill of an associate Loss on deemed disposal of an associate (9,465 ) (9,465 ) Profit before taxation 41,115 Taxation (9,761 ) Profit after taxation 31,354 Minority interests 6,672 Net profit for the year 38, Golden Resources Annual Report 59

62 5. BUSINESS AND GEOGRAPHICAL SEGMENTS (Continued) Business segments (Continued) Balance sheet at 31st March, Rice Securities Property Corporate operation investment investment and others Consolidated HK$ 000 HK$ 000 HK$ 000 HK$ 000 HK$ 000 ASSETS Segment assets 261, , , , ,700 Interests in associates 16,828 14,328 99, ,486 Consolidated total assets 1,002,186 LIABILITIES Segment liabilities 25,833 14,931 40,764 Unallocated corporate liabilities 45,630 Consolidated total liabilities 86,394 Other information for the year ended 31st March, 2004 Notes to the Financial Statements Rice Securities Property Corporate operation investment investment and others Consolidated HK$ 000 HK$ 000 HK$ 000 HK$ 000 HK$ 000 Additions to property, plant and equipment 8, ,757 Depreciation and amortisation of property, plant and equipment 12, ,127 Release of negative goodwill of an associate Deficit on revaluation of investment properties 9,130 9,130 Unrealised gain on investments in securities 15,931 15,931 Bad debts written off 1,447 1, Golden Resources Annual Report

63 5. BUSINESS AND GEOGRAPHICAL SEGMENTS (Continued) Geographical segments The Group s operations are located in Hong Kong, elsewhere in the PRC and other regions. 5. The following table provides an analysis of the Group s sales by location of markets, irrespective of the origin of the goods/services: Turnover by geographical markets HK$ 000 HK$ 000 Hong Kong 620, ,363 Elsewhere in the PRC 100, ,325 Others 10,666 46, , ,578 The following is an analysis of the carrying amount of segment assets and additions to property, plant and equipment, analysed by the geographical areas in which the assets are located: Carrying amount of Additions to property, segment assets plant and equipment HK$ 000 HK$ 000 HK$ 000 HK$ 000 Hong Kong 658, ,202 2,657 2,801 Elsewhere in the PRC 215, ,744 1,854 5,956 Others 150, ,240 1,024,270 1,002,186 4,511 8, Golden Resources Annual Report 61

64 6. OTHER INCOME 6. THE GROUP HK$ 000 HK$ 000 Interest income on: Bank deposits 2,284 1,399 Investments in securities 4,931 5,234 Others 5,572 3,211 12,787 9,844 Dividend from investments in securities: Listed investments 1, Gain on disposal of property, plant and equipment 5 Release of negative goodwill arising from acquisition of a subsidiary 579 Gain on disposal of an investment property 890 Gain on disposal of subsidiaries 9 50 Net foreign exchange gains Sundry income 3,919 1,834 20,575 13,322 Notes to the Financial Statements 62 Golden Resources Annual Report

65 7. PROFIT FROM OPERATIONS HK$ 000 HK$ 000 The Group s profit from operations has been arrived at after charging/(crediting): Auditors remuneration Current year Overprovision in prior years (13) (103) Depreciation and amortisation of property, plant and equipment 11,573 13,127 Operating lease rentals in respect of rented premises 2,647 2,658 Bad debts written off 1,368 1,447 Rental income from investment properties, net of outgoings of 161,000 HK$161,000 (2004: HK$231,000) 231,000 (2,093) (1,671) Cost of inventories recognised as expense 419, ,341 Loss on disposal/written off of property, plant and equipment 261 Realised loss on investments in securities 13, Staff costs, including Directors emoluments (note 29) and retirement benefits schemes 29 contributions (note 34) 34 63,903 70, FINANCE COSTS 8. THE GROUP HK$ 000 HK$ 000 Interests on bank loans and overdrafts: Wholly repayable within five years 615 1,087 Not wholly repayable within five years Interests on other loans wholly repayable within five years , Golden Resources Annual Report 63

66 9. TAXATION 9. THE GROUP HK$ 000 HK$ 000 Current tax: Hong Kong 19,131 10,176 Other regions in the PRC ,184 10,458 (Over)/underprovision in prior years: Hong Kong (25) 171 Other regions in the PRC Deferred tax (note 22): 22 Current year (281) (1,186) Attributable to a change in tax rate 269 (281) (917) Taxation attributable to the Company and its subsidiaries 18,915 9,837 Share of taxation charge/(credit) attributable to associates 419 (76) 19,334 9,761 Notes to the Financial Statements Hong Kong Profits Tax is calculated at 17.5% of the estimated assessable profit for the year. Taxation arising in other regions in the PRC is calculated in accordance with the relevant laws of the PRC. 17.5% 64 Golden Resources Annual Report

67 9. TAXATION (Continued) The tax charge for the year can be reconciled to the profit per the consolidated income statement as follows: HK$ 000 HK$ 000 Profit before taxation 13,667 41,115 Tax at the domestic income tax 17.5% rate of 17.5% (Note) 2,392 7,195 Tax effect of expenses not deductible for tax purpose 14,688 7,024 Tax effect of income not taxable for tax purpose (8,253) (4,464) Underprovision in respect of prior years Tax effect of utilisation of tax losses/deferred tax assets previously not recognised (1,183) (1,664) Tax effect of tax losses/deferred tax assets not recognised 10,272 1,747 Effect of tax exemptions granted to PRC subsidiaries (43) (259) Increase in opening deferred tax liability resulting from an increase in applicable tax rate 269 Effect of different tax rates of subsidiaries operating in other jurisdictions Tax effect of share of results of associates 1,369 (658) Others (7) 168 Taxation for the year 19,334 9,761 Note: The domestic tax rate in the jurisdiction where the operation of the Group is substantially based is used Golden Resources Annual Report 65

68 10. DIVIDENDS HK$ 000 HK$ 000 Interim dividend paid of 1.25 cents 1.25 per share on 1,306,026,460 1,306,026,460 shares (2004: 1.25 cents per 1.25 share on 1,295,425,460 shares) 1,295,425,460 16,325 16,193 Final dividend proposed of 1.25 cents 1.25 per share on 1,306,906,460 1,306,906,460 shares (2004: 1.25 cents per 1.25 share on 1,301,901,460 shares) 1,301,901,460 16,336 16,274 Adjustment of final dividend for prior year resulting from exercise of share options ,666 32,468 The final dividend of 1.25 cents per share for the year ended 31st March, 2005 has been proposed by the directors and is subject to approval by the shareholders at the forthcoming Annual General Meeting (LOSS)/EARNINGS PER SHARE The calculation of the basic and diluted (loss)/ earnings per share is based on the following data: HK$ 000 HK$ 000 Notes to the Financial Statements (Loss)/earnings for the purposes of both basic and diluted (loss)/ earnings per share (8,340) 38,026 Number of shares: Weighted average number of shares for the purpose of basic (loss)/ earnings per share 1,303,882,638 1,294,861,635 Effect of dilutive potential shares Options 17,518,799 Weighted average number of shares for the purpose of diluted earnings per share 1,312,380,434 Diluted loss per share for the year has not been presented as the conversion of potential ordinary shares to ordinary shares would have anti-dilutive effect to the basic loss per share. 66 Golden Resources Annual Report

69 12. PROPERTY, PLANT AND EQUIPMENT 12. Factory Furniture, Motor premises in fixtures vehicles Land and elsewhere and Plant and and buildings in the PRC equipment machinery vessels Total HK$ 000 HK$ 000 HK$ 000 HK$ 000 HK$ 000 HK$ 000 THE GROUP COST OR VALUATION At 1st April, ,393 55,038 27, ,153 10, ,092 Acquisition of a subsidiary Additions 909 1,497 2,105 4,511 Disposals/written off (809 ) (764 ) (1,021 ) (2,594 ) At 31st March, ,393 55,038 27, ,886 11, ,534 Comprising: At cost 64,393 55,038 27, ,886 11, ,534 At valuation , , ,393 55,038 27, ,886 11, ,534 DEPRECIATION, AMORTISATION AND IMPAIRMENT At 1st April, ,963 36,329 22, ,830 6, ,269 Acquisition of a subsidiary Provided for the year 5, ,444 2,468 1,594 11,573 Eliminated on disposals/ written off (589 ) (586 ) (777 ) (1,952 ) At 31st March, ,403 36,956 23, ,712 7, ,281 NET BOOK VALUES At 31st March, ,990 18,082 3,856 16,174 4, ,253 At 31st March, ,430 18,709 4,548 17,323 3, , Golden Resources Annual Report 67

70 12. PROPERTY, PLANT AND EQUIPMENT (Continued) The net book value of properties shown above comprises: HK$ 000 HK$ 000 Land and buildings situated in Hong Kong: Held under long lease 11,539 11,890 Held under medium-term lease 104, ,460 Freehold land and building situated outside Hong Kong 3,994 4,080 Factory premises situated outside Hong Kong: Held under medium-term lease 18,082 18, , ,139 Notes to the Financial Statements Certain leasehold land and buildings in Hong Kong were revalued at 30th November, 1990 on an open market value basis by Chesterton Petty Limited, independent Chartered Surveyors. If these land and buildings in Hong Kong with a net book value of approximately HK$92,484,000 (2004: HK$97,072,000) had not been revalued, they would have been 92,484,000 97,072,000 39,698,00041,956,000 included in these financial statements at historical cost less accumulated depreciation and amortisation of approximately HK$39,698,000 (2004: HK$41,956,000). 13. INVESTMENT PROPERTIES 13. THE GROUP HK$ 000 HK$ 000 Balance at beginning of year 50,030 26,830 Transfer from land and buildings 32,330 Disposal (10,000) Surplus/(deficit) on revaluation 3,600 (9,130) Balance at end of year 43,630 50, Golden Resources Annual Report

71 13. INVESTMENT PROPERTIES (Continued) The investment properties were revalued at 31st March, 2005 on an open market value basis by Dudley Surveyors Limited, independent Chartered Surveyors. The revaluation surplus of HK$3,600,000 has been credited to the consolidated income statement (2004: revaluation deficit of HK$9,130,000 has been charged to the consolidated income statement) ,600,000 9,130,000 All of the Group s investment properties are held for renting out under operating leases. The analysis of the Group s investment properties is as follows: HK$ 000 HK$ 000 Situated in Hong Kong: Held under long lease 17,300 25,100 Held under medium-term lease 23,400 22,000 Situated in elsewhere in the PRC: Held under medium-term lease 2,930 2,930 43,630 50, INTERESTS IN SUBSIDIARIES 14. THE COMPANY HK$ 000 HK$ 000 Unlisted shares, at cost 280, ,229 Advances to subsidiaries 659, , , ,335 In the opinion of the Directors, advances to subsidiaries are not repayable in the coming twelve months Golden Resources Annual Report 69

72 14. INTERESTS IN SUBSIDIARIES (Continued) Particulars of the Company s principal subsidiaries as at 31st March, 2005 are as follows: 14. Proportion of nominal value Place of of issued share incorporation/ Issued and fully capital held Name of subsidiary operation paid up share capital by the Group Principal activities Aland Limited Hong Kong/PRC 2 ordinary shares of HK$1 each 100% 100% Property investment 12 Beef Bowl Limited Hong Kong 20,000 ordinary shares 100% 100% Investment holding of HK$10 each 1020,000 Better Choice British Virgin Islands 1 ordinary share of US$1 100% 100% Investment holding Investments Limited 11 Better Star Limited British Virgin Islands/ 1 ordinary share of US$1 100% 100% Property investment Hong Kong 11 Notes to the Financial Statements City Court Properties British Virgin Islands/ 21 ordinary shares of US$1 each 100% 100% Investment holding Limited Hong Kong 121 Citydragon Resources British Virgin Islands 1 ordinary share of US$1 100% Investment holding Limited 11 Cost Logistics British Virgin Islands 1 ordinary share of US$1 100% 100% Investment holding Limited 11 Golden Fidelity Hong Kong 2 ordinary shares of HK$1 each 100% 100% Property holding Holdings Limited Golden Resources Annual Report

73 14. INTERESTS IN SUBSIDIARIES (Continued) 14. Proportion of nominal value Place of of issued share incorporation/ Issued and fully capital held Name of subsidiary operation paid up share capital by the Group Principal activities Golden Resources Samoa 1 ordinary share of US$1 100% 100% Investment holding China (Group) 11 Limited Golden Resources Hong Kong 2,000,000 non-voting deferred 100% 100% Overseas sourcing, Development Limited shares* of HK$1 each and processing, packaging, 2 ordinary shares of HK$1 each marketing, sales and 1 distribution of rice *2,000, Golden Resources British Virgin Islands 21,268 ordinary shares 100% 100% Investment holding Holdings Limited of US$1 each 1 21,268 Golden Resources British Virgin Islands 1,000 ordinary shares of US$1 each 100% 100% Investment holding Rice Industries 11,000 Limited Golden Resources Hong Kong 260,000 ordinary shares of 100% 100% Importing, wholesaling Rice Trading HK$10 each and local purchasing Limited 10 of rice (Registered rice 260,000 stockholder and wholesaler) Golden Resources Hong Kong 1,000 ordinary shares 100% 100% Warehouse operation Warehouse Limited of HK$10 each 10 1,000 Goldsom Development Hong Kong 100 ordinary shares of HK$1 each 100% 100% Investment holding Limited Golden Resources Annual Report 71

74 14. INTERESTS IN SUBSIDIARIES (Continued) 14. Proportion of nominal value Place of of issued share incorporation/ Issued and fully capital held Name of subsidiary operation paid up share capital by the Group Principal activities GR Environmental Hong Kong 3 ordinary shares of HK$1 each 100% 100% Provision of logistics Development 13 services Company Limited Lee Loy Company Hong Kong 160 ordinary shares 100% 100% Property holding Limited of HK$100 each Ng Fung Always Hong Kong 2 ordinary shares 100% 100% Sale and distribution Limited of HK$1 each of rice 12 Paklink International British Virgin Islands 1 ordinary share 100% 100% Investment holding Limited of US$1 11 Notes to the Financial Statements Red Token Investments British Virgin Islands 1,600 ordinary shares 63.75% 63.75% Investment holding Limited of US$1 each 1 1,600 Reo Developments British Virgin Islands/ 21,451 ordinary shares 100% 100% Investment holding Hong Kong of US$1 each 1 21,451 Ringo Resources British Virgin Islands 1 ordinary share of US$1 100% 100% Investment holding Limited Golden Resources Annual Report

75 14. INTERESTS IN SUBSIDIARIES (Continued) 14. Proportion of nominal value Place of of issued share incorporation/ Issued and fully capital held Name of subsidiary operation paid up share capital by the Group Principal activities Shantou SEZ Golden PRC #RMB6,022, % 100% Processing, packaging, Resources Grain #6,022,471 marketing, sales Co., Ltd. and distribution of rice Shantou SEZ Golden PRC #US$4,579,314 65% 65% Processing, packaging, Resources Rice #4,579,314 marketing, sales Company Limited## and distribution of rice ## Sun Kai Yip (Shanghai) PRC #US$10,000, % Investment holding Industrial Investment #10,000,000 Co., Ltd. Treasure Box Hong Kong 4,000,000 non-voting 100% 100% Sale and distribution Investments Limited deferred shares* of rice of HK$1 each and 2 ordinary shares of HK$1 each 1 *4,000, Tresplain Investments British Virgin Islands/ 2 ordinary shares of US$1 each 100% 100% Trade marks holding Limited Hong Kong 12 Unique Gear Limited Hong Kong 1 ordinary share of HK$1 100% Investment holding Golden Resources Annual Report 73

76 14. INTERESTS IN SUBSIDIARIES (Continued) 14. Proportion of nominal value Place of of issued share incorporation/ Issued and fully capital held Name of subsidiary operation paid up share capital by the Group Principal activities Win World Investments Hong Kong 10,000 ordinary shares 55% 55% Property investment Limited of HK$1 each 110,000 Yuen Loong & Hong Kong 50,000 non-voting 100% 100% Importing and Company Limited deferred shares* re-exporting of rice of HK$100 each (Registered rice and 2 ordinary shares stockholder) of HK$100 each 100 *50,000 Other than Reo Developments Limited which is directly held by the Company, all other subsidiaries are indirectly held by the Reo Developments Limited Notes to the Financial Statements * The deferred shares, which are not held by the Group, practically carry no rights to dividends or to receive notice of or to attend or vote at any general meeting of the subsidiary or to participate in any distribution on winding-up. The Group has been granted an option by the holders of the deferred shares to acquire these shares at a nominal amount. # Paid-up registered capital ## Shantou SEZ Golden Resources Rice Company Limited is a Sino-foreign joint venture. The Directors are of the opinion that a complete list of the particulars of all subsidiaries will be of excessive length and therefore the above list only contains the particulars of those subsidiaries which principally affect the results or assets and liabilities of the Group. None of the subsidiaries had issued any debt securities at the end of the year. * # ## 74 Golden Resources Annual Report

77 15. INTERESTS IN ASSOCIATES 15. THE GROUP HK$ 000 HK$ 000 Share of net assets 66, ,445 Goodwill/(negative goodwill) of associates 1,895 (11,049) 68,171 94,396 Advances to associates 25,205 36,090 93, ,486 Market value of listed shares 17,469 Notes: (a) Included in advances to associates is an (a) amount of approximately HK$5,644,000 (2004: HK$5,644,000) which has been secured by certain shares of another 5,644,000 5,644,000 associate. The amount is interest-free and will not be repayable in the coming twelve months. (b) Included in advances to associates in last year 2004 was an amount of approximately (b) 6,566,000 HK$6,566,000 which bore interest at prime rate. The amount was unsecured and was fully repaid during the year ended 31st March, (c) The remaining balance of advances to (c) associates is unsecured, interest-free and will not be repayable in coming twelve months. (d) Investments in certain associates were in the form of equity and loans from the Group and other shareholders in accordance with respective percentages of equity shareholding in these associates. Investments in the form of loans were comparatively more significant than those in the form of equity, so that the entire amounts were treated as quasi-capital. Under these circumstances, losses incurred by these associates were shared by the Group to the extent that the losses did not exceed the aggregate of their equity and loan investments. The relevant amounts of share of losses of associates included in the advances to associates are approximately HK$20,280,000 (2004: HK$23,520,000). (d) 20,280,000 23,520, Golden Resources Annual Report 75

78 15. INTERESTS IN ASSOCIATES (Continued) Particulars of the Group s principal associates at 31st March, 2005 are as follows: 15. Proportion of nominal value of Form of Place of issued share capital business incorporation/ Issued and fully held by the Name of associate structure operation paid up share capital Group Principal activities Clever Time Incorporated British Virgin 1,000 ordinary shares 31.80% 31.80% Investment holding Investments Limited Islands of US$1 each 1 1,000 Shanghai Tian An Incorporated PRC #US$12,616, % Manufacture and Bearing Co., Ltd.## #12,616,180 distribution of small ## scale of bearing products Supreme Development Incorporated Hong Kong/ 15,001,500 ordinary 41.16% 41.16% Manufacturing and Company Limited* Hong Kong shares of HK$1 each sale of plastic bags * and the PRC 1 15,001,500 Notes to the Financial Statements Sirinumma Company Incorporated Thailand 4,600,000 ordinary 40.00% 40.00% Sourcing of rice Limited shares of Baht 10 each 10 4,600,000 Siripattana Rice Co., Incorporated Thailand 20,000,000 ordinary 49.00% 49.00% Processing, packaging, Limited shares of Baht 10 marketing, sales and each (20,000,000 distribution of rice ordinary shares of Baht 6.8 each fully paid) 10 20,000, ,000,000 Wellight Development Incorporated Hong Kong 1,000 ordinary shares 37.50% 12.50% Investment holding Limited of HK$1 each 1 1, Golden Resources Annual Report

79 15. INTERESTS IN ASSOCIATES (Continued) * Supreme Development Company Limited has a wholly-owned subsidiary, Delux Arts Development Limited, which is incorporated in Hong Kong and engaged in manufacturing and sale of plastic bags in Hong Kong and the PRC. 15. * # Paid-up registered capital # ## Sino-foreign joint venture ## The Directors are of the opinion that a complete list of the particulars of all associates would be of excessive length and therefore the above list only contains the particulars of those associates which principally affect the results or assets and liabilities of the Group. 16. INVESTMENTS IN SECURITIES 16. Investment Other securities investments Total HK$ 000 HK$ 000 HK$ 000 HK$ 000 HK$ 000 HK$ 000 THE GROUP Equity securities: Listed 102, , , ,201 Unlisted 12,448 21,023 16,181 11,523 28,629 32,546 12,448 21, , , , ,747 Debt securities: Listed 10,254 10,254 Unlisted 76,346 61,167 76,346 61,167 76,346 71,421 76,346 71,421 Total: Listed Hong Kong 99, ,583 99, ,583 Overseas 3,570 48,872 3,570 48,872 Unlisted 12,448 21,023 92,527 72, ,975 93,713 12,448 21, , , , ,168 Market value of listed securities 102, , , ,455 Quoted value of unlisted debt securities 44,395 53,919 44,395 53,919 Carrying amount analysed for reporting purpose as: Current 195, , , ,115 Non-current 12,448 21,023 3,030 12,448 24,053 12,448 21, , , , , Golden Resources Annual Report 77

80 16. INVESTMENTS IN SECURITIES (Continued) In respect of the above investments in unlisted investment securities, the Group had also made advances to investee companies as follows: HK$ 000 HK$ 000 Advances to investee companies 42,812 51,371 The advances are unsecured, non-interest bearing and will not be repayable in the coming twelve months. During the year, the Group disposed of part of its interest in an associate. Subsequent to this partial disposal, the Group s interest in this associate was reduced to 19.96% and was accounted for as investments in securities. Carrying amount of the Group s remaining interest in this associate had been reclassified to investments in securities and advances to investee companies accordingly % Notes to the Financial Statements 17. NEGATIVE GOODWILL 17. HK$ 000 THE GROUP GROSS AMOUNT Arising on acquisition of a subsidiary during the year and at 31st March, RELEASED TO INCOME Released during the year and at 31st March, CARRYING AMOUNT At 31st March, 2005 At 31st March, 2004 This negative goodwill is released to income on a straight-line basis over one year. 78 Golden Resources Annual Report

81 18. INVENTORIES 18. THE GROUP HK$ 000 HK$ 000 At cost: Raw materials 48,452 46,310 Finished goods 10,956 14,440 Consumable stores 4,924 5,208 64,332 65,958 At the balance sheet date, none of the inventories was stated at net realisable value (2004: None). 19. TRADE DEBTORS The Group allows an average credit period of days to its trade customers. The following is an aged analysis of trade debtors at the balance sheet date: THE GROUP HK$ 000 HK$ 000 Within 30 days 30 28,696 31, days ,253 10, days , Over 90 days 90 3,380 4,278 52,262 46, TRADE CREDITORS The following is an aged analysis of trade creditors at the balance sheet date: 20. THE GROUP HK$ 000 HK$ 000 Within 30 days 30 2,435 2, days , days Over 90 days 90 3,113 3,892 7,227 6, Golden Resources Annual Report 79

82 21. BANK LOANS 21. THE GROUP HK$ 000 HK$ 000 The maturity of the bank loans is as follows: Within one year 22,226 19,753 More than one year but not exceeding two years 367 More than two years but not exceeding five years 1,157 More than five years 1,177 22,226 22,454 Less: Amount due within one year shown under current liabilities (22,226) (19,753) Amount due after one year 2,701 Analysed as: Secured 14,679 22,454 Unsecured 7,547 22,226 22,454 Notes to the Financial Statements 80 Golden Resources Annual Report

83 22. DEFERRED TAX LIABILITIES The following are the major deferred tax liabilities recognised and movements thereon during the current and prior reporting periods. 22. THE GROUP Accelerated Revaluation tax of depreciation properties Total HK$ 000 HK$ 000 HK$ 000 At 1st April, ,870 9,191 12,061 Credit to income for the year (778) (408) (1,186) Effect of change in tax rate charge to the income statement charge to equity At 31st March, ,361 9,645 12,006 Charge/(credit) to income for the year 127 (408) (281) At 31st March, ,488 9,237 11,725 At the balance sheet date, the Group has unused tax losses of approximately HK$13,442,000 (2004: HK$50,463,000) available for offset against future profits. No deferred tax asset has been recognised in respect of such losses due to the unpredictability of future profit streams. 13,442,000 50,463, ADVANCES FROM MINORITY SHAREHOLDERS The advances are unsecured, non-interest bearing and will not be repayable in the coming twelve months Golden Resources Annual Report 81

84 24. MINORITY INTERESTS Investments in certain subsidiaries were in the form of equity and loans from the Group and other shareholders in accordance with respective percentages of equity shareholding in these subsidiaries. Investments in the form of loans were comparatively more significant than those in the form of equity, so that the entire amounts were treated as quasi-capital. Under these circumstances, the aggregate of minority shareholders equity and loan investments were taken into account in sharing the losses incurred by these subsidiaries. The relevant amounts of minority shareholders shares of losses of subsidiaries included in the advances from minority shareholders are approximately HK$20,378,000 (2004: HK$22,239,000) ,378,000 22,239, SHARE CAPITAL 25. Number of shares of HK$0.10 each 0.10 HK$ 000 Authorised At 1st April, 2003, 31st March, 2004 and 31st March, ,000,000, ,000 Notes to the Financial Statements Issued and fully paid At 1st April, ,292,570, ,257 Exercise of share options 7,906, At 31st March, ,300,476, ,048 Exercise of share options 6,430, At 31st March, ,306,906, ,691 During the year, 6,430,000 shares of HK$0.10 each were issued at HK$0.27 per share as a result of the exercise of certain share options of the Company. The proceeds from the issue 6,430, ,736,000 of shares of HK$1,736,000 were used as general working capital. All the new shares issued during the year rank pari passu in all respects with the existing shares. 82 Golden Resources Annual Report

85 26. SHARE OPTIONS The Company s share option scheme (the Scheme ) was adopted pursuant to a resolution passed on 5th January 2001 for the primary purpose of providing incentives to directors and eligible employees and will expire on 4th January, Under the Scheme, the Board of Directors of the Company may at their discretion grant options to eligible full or part-time employees, including executive directors of the Company and its subsidiaries, to subscribe for shares in the Company. At 31st March, 2005, the number of shares in respect of which options had been granted but not exercised under the Scheme was 100,000,000, representing 7.65% of the shares of the Company in issue at that date. The total number of shares in respect of which options may be granted under the Scheme is not permitted to exceed 10% of the issued share capital of the Company at any point in time but excluding shares issued pursuant to the Scheme. No employee shall be granted a share option which, if exercised in full, would result in such employee becoming entitled to subscribe for more than 25% of the aggregate number of shares for the time being issued and issuable under the Scheme ,000, % 10% 25% Options granted must be taken up within 21 days of the date of grant upon payment of HK$1 per each grant of share options. The exercise period of the share options granted under the Scheme shall be determined by the Board of Directors when such options are granted, provided that such period shall not end later than 4th January 2007, being the expiry date of the Scheme. The exercise price is determined by the Board of Directors of the Company, and will not be less than the higher of the nominal value of the shares of the Company and 80% of the average closing price of the Company s shares for the five business days immediately preceding the date of grant. Pursuant to the amendments to Chapter 17 of the Rules Governing the Listing of Securities on the Stock Exchange which became effective from 1st September, 2001, any share options granted after 1st September, 2001 must comply with the provisions of the revised Chapter 17. However, all share options granted prior to 1st September, 2001 will remain in full force and effect. Save as disclosed above, the Company had not adopted any share option schemes nor granted any share options to its employees after 1st September, %,, 2005 Golden Resources Annual Report 83

86 26. SHARE OPTIONS (Continued) The following tables disclose details of the Company s share options held by employees (including Directors) and movements in such holdings during both years: 26. Balance Balance outstanding at Exercised Lapsed outstanding Option Exercise 1st April, during during at 31st grant date price 2004 the year the year March, 2005 HK$ Directors 12th January, ,000,000 39,000,000 30th January, ,250,000 (1,250,000 ) 28th August, ,000,000 36,000,000 Total 76,250,000 (1,250,000 ) 75,000,000 Employees 12th January, ,000,000 15,000,000 30th January, ,780,000 (5,180,000 ) (600,000 ) 28th August, ,000,000 10,000,000 Total 30,780,000 (5,180,000 ) (600,000 ) 25,000,000 Grand total 107,030,000 (6,430,000 ) (600,000 ) 100,000,000 Notes to the Financial Statements Balance Balance outstanding at Exercised Lapsed outstanding Option Exercise 1st April, during during at 31st grant date price 2003 the year the year March, 2004 HK$ Directors 12th January, ,000,000 39,000,000 30th January, ,876,000 (626,000 ) 1,250,000 28th August, ,000,000 36,000,000 Total 76,876,000 (626,000 ) 76,250,000 Employees 12th January, ,000,000 15,000,000 30th January, ,185,000 (7,280,000 ) (1,125,000 ) 5,780,000 28th August, ,000,000 10,000,000 Total 39,185,000 (7,280,000 ) (1,125,000 ) 30,780,000 Grand total 116,061,000 (7,906,000 ) (1,125,000 ) 107,030, Golden Resources Annual Report

87 26. SHARE OPTIONS (Continued) Details of specific categories of options are as follows: 26. Date of grant Vesting period Exercise period Exercise price HK$ 12th January, th January, th January th January, th January, th January, (Note) 29th January, th January, th August, th August, th January, 2007 Note: The exercise period is divided into 3 trenches, as detailed below: Maximum percentage of share option can be exercised in aggregate within the Exercise period exercise period months after acceptance 25% or partial exercise % of option (during the period from 30th January, 2002 to 29th January, 2003) months after acceptance 50% or partial exercise % of option (during the period from 30th January, 2003 to 29th January, 2004) months after acceptance 100% or partial exercise % of option (during the period from 30th January, 2004 to 29th January, 2005) 2005 Golden Resources Annual Report 85

88 26. SHARE OPTIONS (Continued) The financial impact of share options granted is not recorded in the Company s or the Group s balance sheet until such time as the options are exercised, and no charge is recognised in the income statement in respect of the value of options granted. Upon the exercise of the share options, the resulting shares issued are recorded by the Company as additional share capital at the nominal value of the shares, and the excess of the exercise price per share over the nominal value of the shares is recorded by the Company in the share premium account. Options which lapse or are cancelled prior to their exercise date are deleted from the register of outstanding options. 26. The fair value of the Company s shares from 6th April, 2004 to 26th January, 2005 (2004: 11th June, 2003 to 2nd March, 2004) when options were exercised ranged from HK$0.295 to HK$0.375 (2004: HK$0.3 to HK$0.425) Notes to the Financial Statements 86 Golden Resources Annual Report

89 27. RESERVES THE GROUP The amount of the Group s reserves and the movement therein for the current and prior years are presented in the consolidated statement of changes in equity on page 43 of the financial statements THE COMPANY Capital Share Contributed redemption Dividend Retained premium surplus reserve reserve earnings Total HK$ 000 HK$ 000 HK$ 000 HK$ 000 HK$ 000 HK$ 000 At 1st April, , , , , ,370 Exercise of share options 1,344 1,344 Net profit for the year 69,083 69,083 Prior year final dividend paid (16,168 ) (16,168 ) Adjustment of final dividend for the year ended 31st March, 2003 (1) (1) Interim dividend paid (16,193 ) (16,193 ) Final dividend proposed for the year ended 31st March, ,274 (16,274 ) At 31st March, , , , , ,435 Exercise of share options 1,093 1,093 Net profit for the year 8,462 8,462 Prior year final dividend paid (16,274 ) (16,274 ) Adjustment of final dividend for the year ended 31st March, 2004 (5) (5) Interim dividend paid (16,325 ) (16,325 ) Final dividend proposed for the year ended 31st March, ,336 (16,336 ) At 31st March, , , , , , Golden Resources Annual Report 87

90 27. RESERVES (Continued) Notes: 27. (i) Under the Companies Act 1981 of Bermuda (i) (as amended) and Bye-Laws of the Company, the contributed surplus account of the Company is available for distribution. However, the Company cannot declare or pay a dividend, or make a distribution out of contributed surplus if (a) it is, or would after the payment be, unable to pay its liabilities as they (a) become due; (b) the realisable value of its assets (b) would thereby be less than the aggregate of its liabilities and its issued share capital and share premium accounts. In the opinion of the Directors, the Company s reserves available for distribution to shareholders were as follows: HK$ 000 HK$ 000 Contributed surplus 244, ,734 Dividend reserve 16,336 16,274 Retained earnings 160, , , ,113 Notes to the Financial Statements (ii) The contributed surplus of the Company represented the difference between the nominal value of the Company s shares issued in exchange for the value of net assets of the underlying subsidiaries acquired. 28. PLEDGE OF ASSETS Certain of the Group s property, plant and equipment with an aggregate net book value of approximately HK$14 million (2004: HK$31 million) were pledged to secure general banking facilities granted to the Group. (ii) ,000,000 31,000, Golden Resources Annual Report

91 29. DIRECTORS AND EMPLOYEES EMOLUMENTS 29. THE GROUP HK$ 000 HK$ 000 Directors emoluments: Fees Other emoluments Executive Directors Salaries and other benefits 12,790 15,565 Retirement benefits scheme contributions Non-executive Directors Salaries and other benefits 1,464 1,655 Total emoluments 14,421 17,387 The emoluments of the directors were within the following bands: Number of Directors HK$ Nil 1,000, ,000,001 1,500, ,500,001 2,000, ,000,001 2,500, ,500,001 3,000, ,000,001 3,500, ,500,001 4,000, ,000,001 4,500, ,500,001 6,000, Golden Resources Annual Report 89

92 29. DIRECTORS AND EMPLOYEES EMOLUMENTS (Continued) Employees emoluments: 29. During the year, the emoluments of the five highest paid individuals, including four Directors (2004: four Directors), are as follows: THE GROUP HK$ 000 HK$ 000 Salaries and other benefits 14,096 16,994 Retirement benefits scheme contributions Total emoluments 14,286 17,184 The emoluments of the five highest paid individuals were within the following bands: Number of Individuals HK$ Notes to the Financial Statements 1,500,001 2,000, ,000,001 2,500, ,500,001 3,000, ,000,001 3,500, ,500,001 4,000, ,000,001 4,500, ,500,001 6,000, During the year, no emoluments were paid by the Group to the Directors of the Company as an inducement to join or upon joining the Group or as compensation for loss of office. None of the Directors has waived any emoluments during the year. 90 Golden Resources Annual Report

93 30. ACQUISITION OF A SUBSIDIARY During the year, the Group acquired the entire paid-up registered capital of Sun Kai Yip (Shanghai) Industrial Investment Co., Ltd. for a consideration of approximately HK$65,123,000. This acquisition has been accounted for by the acquisition method of accounting. The amount of negative goodwill arising as a result of the acquisition is approximately HK$579, ,123, ,000 During last year, the Group acquired 100% of the issued share capital of Dynamic Lead Limited for a consideration of HK$17,099,000. This acquisition had been accounted for by the acquisition method of accounting. Dynamic Lead Limited 100%17,099, HK$ 000 HK$ 000 NET ASSETS ACQUIRED Property, plant and equipment 134 Interests in associates 25,079 Investments in securities 17,099 Other debtors, deposits and prepayments 469 Cash and cash equivalents 42,038 Other creditors and accruals (2,018) 65,702 17,099 Negative goodwill (579) Total consideration 65,123 17,099 Satisfied by: Cash 40,000 17,099 Other creditors and accruals 25,123 65,123 17,099 Net cash inflow/(outflow) arising on acquisition: Cash consideration (40,000) (17,099) Cash and cash equivalents acquired 42,038 2,038 (17,099) The subsidiaries acquired during the year and last year did not have any significant impact on the Group s turnover, operating results and cashflows for the year ended 31st March, 2005 and 31st March, 2004 respectively Golden Resources Annual Report 91

94 31. DISPOSAL OF SUBSIDIARIES During the year, the Group disposed of its entire interest in Kwok Cheung Oil Company Limited. 31. During last year, the Group disposed of its entire interests in Win Square Warehouse Company Limited, Purus Pty Limited and Vietnam Resources Agriproduct Corporation Limited. Purus Pty Limited Vietnam Resources Agriproduct Corporation Limited The net assets of these subsidiaries at the dates of disposals are as follows: HK$ 000 HK$ 000 NET ASSETS DISPOSED OF Other debtors 18 Advances to minority shareholders 1,472 Minority interests (1,480) 10 (Negative goodwill)/goodwill released (9) 20 Exchange gain released (80) Gain on disposal 9 50 Total consideration Notes to the Financial Statements The subsidiaries disposed of during the year and last year did not have any significant impact on the Group s turnover, operating results and cashflows for the year ended 31st March, 2005 and 31st March, 2004 respectively. 92 Golden Resources Annual Report

95 32. RELATED PARTY TRANSACTIONS During the year, the Group entered into the following transactions with the associates: HK$ 000 HK$ 000 Trade purchases 229, ,277 Purchase of other investments listed equity securities 24,350 The trade purchases were carried out in the ordinary course of business and at prices determined by reference to prevailing market price. The purchase of listed equity securities for prior year ended 31st March, 2004 was carried out in the ordinary course of business and transacted at the closing price of securities on date of transfer. Details of balances with associates at the balance sheet date are set out in notes During the year, the Group rented a property owned by a landlord in which the Director of the Company, Mr. Alvin LAM Kwing Wai, had a beneficial interest. Total rental expenses incurred for the year amounted to HK$960,000 (2004: HK$840,000). 960, ,000 In addition to the above, the Group also provided guarantees to banks in respect of banking facilities granted to associates and investee companies as set out in note 33(c). 33(c) 2005 Golden Resources Annual Report 93

96 33. COMMITMENTS AND CONTINGENT LIABILITIES At the balance sheet date, the commitments and contingent liabilities not provided for in the financial statements are as follows: 33. (a) Contracted capital commitments (a) THE GROUP THE COMPANY HK$ 000 HK$ 000 HK$ 000 HK$ 000 Acquisition of property, plant and equipment Capital contribution to an investee company 20,400 20,400 20,707 21,386 (b) Operating lease commitments (b) The Group as lessee At the balance sheet date, the Group had commitments for future minimum lease payments under non-cancellable operating leases which fall due as follows: Notes to the Financial Statements THE GROUP HK$ 000 HK$ 000 Within one year 810 1,996 In the second to fifth years inclusive 431 1,080 1,241 3,076 Operating lease payments represent rentals payable by the Group in respect of rented premises. Leases are negotiated for an average term of 3 years with fixed rentals. 94 Golden Resources Annual Report

97 33. COMMITMENTS AND CONTINGENT LIABILITIES (Continued) (b) Operating lease commitments (Continued) 33. (b) The Group as lessor Property rental income earned during the year was HK$2,254,000 (2004: HK$1,902,000). The properties rented out have committed tenants for the next 2 years. 2,254,000 1,902,000 At the balance sheet date, the Group had contracted with tenants under the non-cancellable leases for the following future minimum lease payments: THE GROUP HK$ 000 HK$ 000 Within one year 2,245 2,437 In the second to fifth years inclusive 725 2,711 2,970 5,148 The Company did not have any lease commitments at the balance sheet date Golden Resources Annual Report 95

98 33. COMMITMENTS AND CONTINGENT LIABILITIES (Continued) (c) Contingent liabilities 33. (c) THE GROUP THE COMPANY HK$ 000 HK$ 000 HK$ 000 HK$ 000 Guarantees given in respect of banking facilities made available to: subsidiaries 181, ,487 associates 98,045 90,103 78,545 90,103 investee companies 13,014 13,014 13,014 13, , , , ,604 The extent of guaranteed banking facilities utilised by the subsidiaries, associates and investee companies as at 31st March, 2005 amounted to approximately HK$7,547,000 (2004: HK$22,454,000), HK$46,661,000 (2004: HK$51,365,000) and HK$10,950,000 (2004: HK$13,014,000) respectively. 7,547,000 22,454,00046,661,000 51,365,000 10,950,000 13,014,000 Notes to the Financial Statements 96 Golden Resources Annual Report

99 34. RETIREMENT BENEFITS SCHEMES 34. THE GROUP HK$ 000 HK$ 000 Retirement benefits schemes contributions 1,716 1,733 Less: Forfeited contributions (22) (124) 1,694 1,609 The Group operates a defined contribution retirement benefits scheme (the Defined Contribution Scheme ) which is registered under the Occupational Retirement Scheme Ordinance ( the ORSO Scheme ) and a Mandatory Provident Fund Scheme ( the MPF Scheme ) established under the Mandatory Provident Fund Scheme Ordinance in December, The assets of these schemes are held separately from those of the Group in funds under the control of an independent trustee. Employees who are members of the ORSO Scheme prior to the establishment of the MPF Scheme were offered a choice of staying within the ORSO Scheme or switching to the MPF Scheme, whereas, all new employees joining the Group on or after 1st December, 2000 are required to join the MPF Scheme. Under the ORSO Scheme, the Group and its employees participating in the scheme are each required to make contributions to the scheme at rates specified in the rules. Where there are employees who leave the ORSO scheme prior to vesting fully in the contributions, the contributions payable by the Group are reduced by the amount of forfeited contributions Golden Resources Annual Report 97

100 34. RETIREMENT BENEFITS SCHEMES (Continued) Under the MPF Scheme, the employer and its employees are each required to make contributions to the MPF Scheme at rates specified in the rules. The only obligation of the Group with respect to the MPF Scheme is to make the required contributions under the scheme. Except for voluntary contribution, no forfeited contribution under this scheme is available to reduce the contribution payable in future years. 34. The retirement benefits schemes contributions arising from the ORSO Scheme and the MPF Scheme charged to the income statement represent contributions payable to the schemes by the Group at rates specified in the rules of the schemes. At the balance sheet date, there are no significant forfeited contributions, which arose upon employees leaving the retirement benefits scheme and which are available to reduce the contributions payable by the Group in future years. Notes to the Financial Statements 35. POST BALANCE SHEET EVENT On 13th June, 2005, the Group entered into an agreement to dispose of its 30% equity interests in an associate with carrying amount of approximately HK$25.08 million to an independent third party at a consideration of RMB50 million (equivalent to approximately HK$47.17 million) % 25,080,000 50,000,000 47,170, Golden Resources Annual Report

101 SCHEDULE OF INVESTMENT PROPERTIES Particulars of investment properties are as follows: Percentage held by the Location Term Usage Group Rooms 1431, 1432, 1822, 1823, 1922 Long lease Commercial 100% and Store Room No. 1 on 18/F Star House, No. 3 Salisbury Road Tsimshatsui, Kowloon, Hong Kong Unit B, 9/F Medium-term lease Commercial 100% Gitic Plaza Office Tower A No. 339 Huanshi Road East Guangzhou, Guangdong Province, PRC 339 A9B Nos , Wing Kin Road, Kwai Chung Medium-term lease Industrial 55% Kwai Chung Town Lot No. 383 New Territories, Hong Kong Golden Resources Annual Report 99

102 GROUP FINANCIAL SUMMARY Year ended 31st March, HK$ 000 HK$ 000 HK$ 000 HK$ 000 HK$ 000 (As restated) (As restated) (As restated) RESULTS Turnover 1,018, , , , ,575 Profit before taxation 128,458 59,100 59,454 41,115 13,667 Taxation (26,400) (32,370) (10,745) (9,761) (19,334) Profit/(loss) after taxation 102,058 26,730 48,709 31,354 (5,667) Minority interests 8,653 44, ,672 (2,673) Net profit/(loss) for the year 110,711 71,098 49,687 38,026 (8,340) Dividends 45,581 45,157 35,569 32,468 32,666 As at 31st March, HK$ 000 HK$ 000 HK$ 000 HK$ 000 HK$ 000 (As restated) (As restated) (As restated) ASSETS AND LIABILITIES Total assets 1,055,633 1,057,524 1,018,665 1,002,186 1,024,270 Total liabilities (190,291) (161,683) (105,815) (86,394) (132,009) Group Financial Summary Minority interests (7,288) (10,637) (16,775) (8,418) (9,230) Shareholders funds 858, , , , ,031 Note: In prior years, certain comparative figures had been restated to reflect the retrospective changes in accounting policies for the adoptions of Statement of Standard Accounting Practice ("SSAPs") issued by the Hong Kong Institute of Certified Public Accountants. Comparative figures for the year ended 2001 had been restated under SSAP 9 (Revised) "Events After The Balance Sheet Date" and SSAP 29 "Intangible Assets" and comparative figures for the years ended 2001 to 2003 had been restated under SSAP 12 (Revised) "Income Taxes" Golden Resources Annual Report

103

104 Company Background 集團發展 Corporate Information 公司資料 Managing Director s Statement 董事總經理報告書 Report Of The Directors 董事會報告書 Golden Resources Centre, 2-12 Cheung Tat Road, Tsing Yi Island, New Territories, Hong Kong. 香港新界青衣島長達路 2-12 號金源中心