2008 Annual Report - Kenford Group Holdings Limited

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Notes to the Financial Statements For the year ended 31 March 2008 26. DEFERRED TAX The movement of the Group’s deferred tax assets and liabilities during the year is as follows: Deferred tax assets/(liabilities) Accelerated depreciation Properties allowance Provisions revaluation Total HK$’000 HK$’000 HK$’000 HK$’000 At 1 April 2007 (3,342) – (3,092) (6,434) Credit to income 401 965 158 1,524 Charge to equity – – (4,721) (4,721) Effect of change in tax rate (charged)/credited to income 168 (55) – 113 Effect of change in tax rate credited to equity – – 234 234 Currency realignment – – (343) (343) At 31 March 2008 (2,773) 910 (7,764) (9,627) Accelerated depreciation Properties allowance Tax losses revaluation Total HK$’000 HK$’000 HK$’000 HK$’000 At 1 April 2006 (3,137) 17 (2,980) (6,100) (Charge)/credit to income (205) (17) 4 (218) Currency realignment – – (116) (116) At 31 March 2007 (3,342) – (3,092) (6,434) 27. SHARE CAPITAL Company 2008 2008 2007 2007 Number ’000 HK$ Number ’000 HK$ Authorised share capital Ordinary shares of HK$0.001 each At beginning of the year and end of the year 1,000,000 1,000,000 1,000,000 1,000,000 Issued share capital Ordinary shares of HK$0.001 each At beginning of the year 400,000 400,000 400,000 400,000 Exercise of share options (Note (i)) 2,200 2,200 – – Exercise of warrant subscription rights (Note (ii)) 1,136 1,136 – – Placing allotment (Note (iii)) 30,000 30,000 – – At end of the year 433,336 433,336 400,000 400,000 Notes: (i) (ii) (iii) During the year, the options holders exercised 2,200,000 share options to subscribe for 2,200,000 ordinary shares in the Company at HK$0.183 per share. During the year, the warrants holders exercised 2,272,000 warrants to subscribe for 1,136,000 ordinary shares in the Company at HK$0.6 per share. On 13 December 2007, arrangements were made for private placement to independent private investors of 30,000,000 shares of HK$0.6 each in the Company, representing a discount of approximately 9.09% to the closing market price of the Company’s shares on 13 December 2007. Annual Report 2008 71
Notes to the Financial Statements For the year ended 31 March 2008 27. SHARE CAPITAL (Continued) Share option scheme On 27 May 2005, the Company adopted a share option scheme (“Share Option Scheme”) and a pre-IPO share option scheme (“Pre-IPO Share Option Scheme”). Under the Share Option Scheme and the Pre-IPO Share Option Scheme, the directors may, at their discretion, grant to any eligible person as defi ned under the respective scheme to take up options to subscribe for fully vested shares of the Company at a subscription price to be determined by the directors pursuant to the relevant listing rules. The total number of shares in respect of which options may be granted under the Share Option Scheme and the Pre-IPO Share Option Scheme of the Company shall not exceed (i) 40,000,000 shares (being 10% of the total number of shares in issue as at the listing date (i.e. 16 June 2005), or (ii) 30% of the Company’s issued share capital from time to time as approved by the shareholders. As at date of this report, no options have been granted by the Company under the Share Option Scheme. On 28 May 2005, options to subscribe for 4,000,000 shares in aggregate at an exercise price equivalent to one third of the Offer Price (i.e. HK$0.55), have been conditionally granted by the Company to certain of the key senior management staff under the Pre-IPO Share Option Scheme. The options may be exercised at any time between 16 December 2005 and 13 June 2008 provided that the closing price of the shares as stated in the Stock Exchange’s daily quotations sheet on that date shall not be less than 1.25 times of the Offer Price. Warrants A total of 100,000,000 warrants were issued by the way of bonus issue to all shareholders whose name appeared on the register of members of the Company as at completion of the Share Offer and the Capitalisation Issue (as defi ned in the Prospectus dated 31 May 2005) in proportion of one warrant for every four shares, in unit(s) of HK$0.30 of the subscription rights to the warrant holders. The subscription price of the warrants is HK$0.60 per share with a subscription period from 16 June 2005 to 13 June 2008. During the year, 2,272,000 warrants were exercised to subscribe for 1,136,000 ordinary shares of the Company at HK$0.6 per share. At 31 March 2008, 97,728,000 warrants were outstanding and lapsed on 13 June 2008. Group Capital management policy The Group’s objectives when managing capital are to safeguard the entity’s ability to continue as a going concern, so that it can continue to provide returns for shareholders and benefits for other stakeholders, and to provide an adequate return to shareholders by pricing products and services commensurate with the level of risk. In order to maintain or adjust the capital structure, the Group may adjust the amount of dividends paid to shareholders, return capital to shareholders, issue new shares or sell assets to reduce debts. No changes were made in the objectives, policies or processes during the year ended 31 March 2008 and 2007. 72 KENFORD GROUP HOLDINGS LIMITED
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Contents Page 1. Corporate Informat
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Chairman’s Statement On behalf of
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Management Discussion and Analysis
Page 8 and 9:
Management Discussion and Analysis
Page 10 and 11:
Report of the Directors PROPERTY, P
Page 12 and 13:
Report of the Directors DIRECTORS
Page 14 and 15:
Report of the Directors SUBSTANTIAL
Page 16 and 17:
Report of the Directors SHARE OPTIO
Page 18 and 19:
Report of the Directors SHARE OPTIO
Page 20 and 21:
Report of the Directors TAXATION OF
Page 22 and 23: Directors' and Senior Management's
Page 24 and 25: Directors' and Senior Management's
Page 26 and 27: Corporate Governance Report BOARD O
Page 28 and 29: Corporate Governance Report CHAIRMA
Page 30 and 31: Corporate Governance Report NOMINAT
Page 32 and 33: Corporate Governance Report INVESTO
Page 34 and 35: Corporate Structure CORPORATE STRUC
Page 36 and 37: Independent Auditor’s Report OPIN
Page 38 and 39: Consolidated Balance Sheet As at 31
Page 40 and 41: Consolidated Statement of Changes i
Page 42 and 43: Notes to the Financial Statements F
Page 84 and 85: Five Years Financial Summary CONSOL
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2008 Annual Report - Kenford Group Holdings Limited

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