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72<br />
Next Media Limited annual report 06 07<br />
Notes to the Consolidated Financial Statements<br />
For the ye<strong>ar</strong> ended 31 M<strong>ar</strong>ch 2007<br />
1. GENERAL<br />
The Company is a public limited <strong>co</strong>mpany in<strong>co</strong>rporated in Hong Kong and its sh<strong>ar</strong>es <strong>ar</strong>e listed on the Stock Exchange of Hong Kong Limited (the “Stock Exchange”). The<br />
addresses of the registered offi ce and principal place of business of the Company <strong>ar</strong>e disclosed in the <strong>co</strong>rporate information to the annual report.<br />
The <strong>co</strong>nsolidated fi nancial statements <strong>ar</strong>e presented in Hong Kong doll<strong>ar</strong>s, which is the same as the functional currency of the Company.<br />
The Company is an investment holding <strong>co</strong>mpany. The principal activities of its subsidi<strong>ar</strong>ies <strong>ar</strong>e set out in note 38.<br />
2. APPLICATION OF NEW AND REVISED HONG KONG FINANCIAL REPORTING STANDARDS (“HKFRSs”)<br />
In the current ye<strong>ar</strong>, the Group and the Company have applied, for the fi rst time, a number of new stand<strong>ar</strong>d, amendments and interpretations (“new HKFRSs”) issued by the<br />
Hong Kong Institute of Certifi ed Public Ac<strong>co</strong>untants (“HKICPA”), which <strong>ar</strong>e effective for the Group’s and Company’s fi nancial ye<strong>ar</strong> beginning 1 April 2006. The ad<strong>op</strong>tion<br />
of the new HKFRSs has had no material impact on the Group’s results or fi nancial position, however the impact for the Company is as follows:<br />
The Company has applied Hong Kong Ac<strong>co</strong>unting Stand<strong>ar</strong>d (“HKAS”) 39 and HKFRS 4 (Amendments) Financial Gu<strong>ar</strong>antee Contracts which is effective for annual periods<br />
beginning on or after 1 Janu<strong>ar</strong>y 2006.<br />
A fi nancial gu<strong>ar</strong>antee <strong>co</strong>ntract is defi ned by HKAS 39 Financial Instruments: Re<strong>co</strong>gnition and Measurement as “a <strong>co</strong>ntract requires the issuer to make specifi ed payments<br />
to reimburse the holder for a loss it incurs because a specifi ed debtor fails to make payment when due in ac<strong>co</strong>rdance with the original or modifi ed terms of a debt<br />
instrument”.<br />
Prior to 1 Janu<strong>ar</strong>y 2006, fi nancial gu<strong>ar</strong>antee <strong>co</strong>ntracts granted by the Company to its subsidi<strong>ar</strong>ies were not re<strong>co</strong>gnised but disclosed as related p<strong>ar</strong>ty transactions and<br />
<strong>co</strong>ntingent liabilities.<br />
Upon the application of these amendments, fi nancial gu<strong>ar</strong>antee <strong>co</strong>ntracts granted by the Company to its subsidi<strong>ar</strong>ies and not designated as at fair value through profi t<br />
or loss <strong>ar</strong>e re<strong>co</strong>gnised initially at its fair value. Subsequent to initial re<strong>co</strong>gnition, the Company measures the fi nancial gu<strong>ar</strong>antee <strong>co</strong>ntracts at the higher of: (i) the amount<br />
determined in ac<strong>co</strong>rdance with HKAS 37 Provision, Contingent Liabilities and Contingent Assets; and (ii) the amount initially re<strong>co</strong>gnised less, when appr<strong>op</strong>riate, cumulative<br />
amortisation re<strong>co</strong>gnised in ac<strong>co</strong>rdance with HKAS 18 Revenue.
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