Annual Report 2011 - QuamIR

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Notes to the Consolidated Financial StatementsFor the year ended 31 March 201136. Financial Instruments (continued)36.3 Fair value of financial instrumentsThe fair value of financial assets and financial liabilities are determined as follows:• The fair values of financial assets and financial liabilities with standard terms and conditionsand traded in active markets are determined with reference to quoted market bid pricesand ask prices respectively; and• The fair values of other financial assets and financial liabilities are determined in accordancewith generally accepted pricing models based on discounted cash flow analysis.The directors consider that the carrying amounts of financial assets and financial liabilitiesrecorded in the consolidated financial statements approximate to their fair values.36.3.1 Fair value measurements recognized in the consolidated statement of financialpositionThe following table provides an analysis of financial instruments that are measuredsubsequent to initial recognition at fair value, grouped into Levels 1 to 3 based on thedegree to which the fair value is observable:• Level 1 fair value measurements are those derived from quoted prices (unadjusted)in active markets for identical assets or liabilities;• Level 2 fair value measurements are those derived from inputs other than quotedprices included within Level 1 that are observable for the asset or liability, eitherdirectly (i.e. as prices) or indirectly (i.e. derived from prices); and• Level 3 fair value measurements are those derived from valuation techniques thatinclude inputs for the asset or liability that are not based on observable marketdata (unobservable inputs).There were no transfers between Levels 1 and 2 in both years.At the end of each reporting period, the Group did not have any assets and liabilities thatwere measured at the above fair value measurements hierarchy.Sino Prosper State Gold Resources Holdings Limited110
Notes to the Consolidated Financial StatementsFor the year ended 31 March 201137. Acquisition of Subsidiaries(a)Acquisition of Favour South LimitedOn 23 January 2010, Sino Prosper Mineral Products Limited, a wholly-owned subsidiary of theCompany entered into an acquisition agreement (“Inner Mongolia Agreement”) with Mr. HongGuang, an independent third party (“Mr. Hong”) for the acquisition of (i) entire issued share capitalof Favour South Limited (“Favour South”); and (ii) all the obligation, liabilities and debts owingor incurred by Favour South to Mr. Hong, at a total consideration of RMB147,000,000 (equivalentto approximately HK$167,045,000), subject to adjustment (the “Inner Mongolia Acquisition”).Favour South is a company incorporated in the BVI and principally engaged in investment holding.The sole asset of Favour South is the entire issued capital of Great Surplus Investment Limited,which was to contribute and own 70% of the registered and paid up capital of Aohanqi XinruiEn Industry Co., Ltd (“Aohan Qi”).Aohan Qi is the holder of a permit for the mining of gold at a mine located at Gouliang Town,Aohan Qi, Inner Mongolia Autonomous Region, the PRC.All conditions precedent to the completion of the Inner Mongolia Acquisition were fulfilled andthe acquisition was completed on 29 June 2010.Consideration transferredHK$’000Deposit paid in prior year (Note 22) 4,136Cash 155,000Acquisition of shareholder’s loan (3,123 )Total consideration transferred (net of deductions set asidein accordance with the terms of the Inner Mongolia Agreement) 156,013Acquisition-related costs amounting to HK$3,206,000 have been excluded from the considerationtransferred and have been recognized as an expense in the period, within the administrativeexpenses in the consolidated statement of comprehensive income.Annual Report 2011111
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Sino Prosper State Gold Resources H
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Year in Review2010-2011April 2010HK
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Chairman’s MessageOver the course
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Chairman’s MessageFor its part, A
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Management Discussion & AnalysisAft
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Management Discussion & AnalysisInv
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Management Discussion & AnalysisTar
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Management Discussion & AnalysisDur
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Directors’ and Management Profile
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Directors’ and Management Profile
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Corporate Governance ReportDIRECTOR
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Corporate Governance ReportREMUNERA
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Directors’ ReportThe directors (t
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Directors’ ReportMr. Cai Wei Lun
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Directors’ ReportNotes:1. This pe
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Directors’ ReportThe emolument of
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Independent Auditors’ ReportWe be
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Consolidated Statement of Financial
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Consolidated Statement of Cash Flow
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Annual Report 2011 - QuamIR

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