Annual Report 2011 - Goodbaby International Holdings Limited

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NOTES TO FINANCIAL STATEMENTS 31 December 2011 34.RESERVES (a) GROUP The changes in the reserves of the Group during the year have been disclosed in the consolidated statement of changes in equity of the Group. Statutory reserve funds Statutory reserve funds comprise: (i) Reserve fund gb international PRC laws and regulations require wholly-owned foreign enterprises (“WOFE”) to provide for the reserve fund by appropriating a part of the net profit (based on the entity’s statutory accounts) before dividend distribution. Each subsidiary being WOFE is required to appropriate at least 10% of its net profit after tax to the reserve fund until the balance of this fund has reached 50% of its registered capital. The reserve fund can only be used, upon approval by the relevant authority, to offset accumulated losses or increase capital. (ii) Enterprise expansion fund In accordance with relevant regulations and the articles of association of the Group’s PRC subsidiaries, appropriations from net profit should be made to the enterprise expansion fund, after offsetting accumulated losses from prior years, and before profit distributions to the investors for the subsidiaries registered in the PRC as a foreign invested company. The percentages to be appropriated to the enterprise expansion fund are determined by the board of directors of the subsidiaries. (iii) Statutory surplus reserve In accordance with the PRC Company Law and the articles of association of the Group’s PRC subsidiaries, a subsidiary registered in the PRC as a domestic company is required to appropriate 10% of its annual statutory net profit (after offsetting any prior years’ losses) to the statutory surplus reserve. When the balance of this reserve fund reaches 50% of the entity’s capital, any further appropriation is optional. The statutory surplus reserve can be utilised to offset prior years’ losses or to increase capital. However, the balance of the statutory surplus reserve must be maintained at a minimum of 25% of the capital after these usages.
NOTES TO FINANCIAL STATEMENTS 31 December 2011 34.RESERVES (Continued) (a) GROUP (Continued) Merger reserve As at 31 December 2011, the merger reserve represents: i) In 2001, the Group acquired GCPC from GCPC’s then shareholders through the issuance of the Company’s shares to GCPC’s then shareholders. The difference between the nominal value of the Company’s share of the paid-up capital of GCPC and the par value of the Company’s shares issued amounted to HK$108,281,000 was recognised as merger reserve; ii) In 2007, Geoby Electric Vehicle Co., Ltd. (“GPCL”) was established to take over certain operations from the Group and the net asset value of the discontinued operation over the consideration received amounting to HK$1,362,000 was recognised as a deemed distribution in the merger reserve account; iii) As mentioned in note 2 above, the Group acquired the Wooden Products and E-car Businesses through acquiring a 100% equity interest in PCPC in June 2010 and this acquisition was accounted for using the pooling of interests method. Prior to the establishment of PCPC on 5 November 2008, the Wooden Products and E-car Businesses were carried out by a fellow subsidiary, GPCL. Upon establishment, PCPC acquired all the assets and liabilities related to the Wooden Products and E-car Businesses from GPCL at their respective book values and continued the Wooden Products and E-car Businesses afterwards. Accordingly, the retained earnings of HK$11,357,000 in respect of the Wooden Products and E-car Businesses generated prior to the establishment of PCPC were capitalised as merger reserve in 2008; and iv) In 2010, the Group disposed of its equity interests in GCCL, SHFS, SGOL, RCBL, MGCR and MGRL to GBHL (note 14) for a consideration of HK$287,936,000 in aggregate. The consideration over the net asset value of the discontinued operation amounting to HK$35,699,000 was recognised as a deemed contribution in the merger reserve account (note 32). / 137
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gbinternational.com.hk
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CORPORATE INFORMATION gb internatio
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CORPORATE INFORMATION DIRECTORS Exe
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7 Chairman’s Statement
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Dear Shareholders, I wish to presen
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Looking forward, the Group will con
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OVERVIEW For the financial year end
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) Our OBM model was systematically
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FINANCIAL REVIEW — CONTINUING OPE
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Cost of Sales, Gross Profit and Gro
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Income Tax Expense Our income tax e
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Pledge of Assets As at 31 December
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gb international
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The Board is pleased to present thi
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development efforts of the Company
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Specific enquiry has been made of a
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The key elements of the Group’s i
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gb international
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The Directors are pleased to presen
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pursuant to which each of the Coven
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Directors’ Interest in the Shares
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During the year under review, the t
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DISCLOSURE UNDER RULE 13.20 OF THE
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INDEPENDENT AUDITORS’ REPORT We b
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CONSOLIDATED STATEMENT OF COMPREHEN
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CONSOLIDATED STATEMENT OF FINANCIAL
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CONSOLIDATED STATEMENT OF CASH FLOW
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STATEMENT OF FINANCIAL POSITION 31
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NOTES TO FINANCIAL STATEMENTS 31 De
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Annual Report 2011 - Goodbaby International Holdings Limited

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