Annual Report 2011 - QuamIR

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Notes to the Consolidated Financial StatementsFor the year ended 31 March 201127. Convertible Bonds (continued)The movement of the liability component of the convertible bonds for the year is set out below:HK$’000Initial recognition 65,559Interest expense (Note 8) 3,526Conversion during the year (Note 31(iii)) (22,013 )Liability component at 31 March 2010 47,072Interest expense (Note 8) 886Conversion during the year (Note 31(v)) (47,958 )Liability component at 31 March 2011 –The fair value of the equity component of the convertible bonds was determined by using Trinomial modelby reference to an independent professional valuation. The inputs into the model were as follows:Share priceHK$0.247Expected volatility (Note (i)) 92.63%Risk-free rate (Note (ii)) 1.73%Expected dividend yield 0%Notes:(i)The expected volatility was determined by using the historical volatility of the Company’s share price over the previous260 days.(ii)The risk-free interest rate was determined by reference to the yield of Hong Kong Exchange Fund Note.Sino Prosper State Gold Resources Holdings Limited96
Notes to the Consolidated Financial StatementsFor the year ended 31 March 201128. Promissory NoteUnder the terms of the promissory note, the promissory note with principal amount of RMB240,000,000(equivalent to approximately HK$272,728,000) is unsecured, interest bearing at 1.5% per annum and hasa maturity period of 2 years from the date of issue but can be repaid in whole or in part before maturityat the discretion of the Company at its principal amount and accrued interest up to the redemptiondate. The promissory note was issued as part of the consideration to acquire exploration and evaluationassets, as detailed in note 37(b), and was fair valued at initial recognition with an effective interestrate of 14.41% per annum.During the year ended 31 March 2010, the Company early redeemed part of the promissory notewith a principal amount of approximately HK$147,728,000 and incurred an early redemption loss ofapproximately HK$30,218,000.During the year ended 31 March 2011, the Company early redeemed the remaining promissory note witha principal amount of approximately HK$125,000,000, accrued interest of approximately HK$1,460,000and incurred an early redemption loss of approximately HK$18,414,000.29. Provision for Restoration CostsIn accordance with relevant PRC rules and regulations, the Group is obliged to accrue the cost for landreclamation and mine closures for the Group’s existing mines. The provision for restoration cost hasbeen determined by the directors based on their best estimates by reference to relevant PRC rules andregulations.30. Deferred TaxationThe following are the major deferred tax liabilities recognized and movements thereon during theyear:GroupMining rightsHK$’000Balance at 1 April 2009, 31 March 2010 and 1 April 2010 –Acquisition of subsidiaries (Note 37(a)) 34,816Credit to profit or loss (198)Effect of foreign currency exchange differences 1,280Balance at 31 March 2011 35,898Under the Enterprise Income Tax Law of the PRC, withholding tax is imposed on dividends declared inrespect of profits earned by the PRC subsidiaries from 1 January 2008 onwards. Deferred taxation has notbeen provided for in the consolidated financial statements in respect of temporary differences attributableto the profits earned by the PRC subsidiaries amounting to approximately HK$53,000 (2010: approximatelyHK$1,115,000) as the Group is able to control the timing of the reversal of the temporary differencesand it is probable that the temporary differences will not reverse in the foreseeable future.Annual Report 201197
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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 Changes i
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Consolidated Statement of Cash Flow
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Notes to the Consolidated Financial
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Page 125 and 126: Financial SummaryFor the year ended
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Annual Report 2011 - QuamIR

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