QUAYPOINT CORP(02330) - Results Announcement (Summary)The Quaypoint Corporation Limited announced on 24/10/2006:(stock code: 02330 )Year end date: 30/06/2006Currency: RMBAuditors' Report: Modified (Audited ) (Audited ) Last Current Corresponding Period Period from 01/07/2005 from 01/07/2004 to 30/06/2006 to 30/06/2005 Note ('000 ) ('000 )Turnover : 115,581 187,965 Profit/(Loss) from Operations : (237,824) (8,067) Finance cost : (9,690) (7,940) Share of Profit/(Loss) of Associates : N/A N/A Share of Profit/(Loss) of Jointly Controlled Entities : N/A N/A Profit/(Loss) after Tax & MI : (247,520) (19,105) % Change over Last Period : N/A %EPS/(LPS)-Basic (in dollars) : (0.707) (0.055) -Diluted (in dollars) : N/A N/A Extraordinary (ETD) Gain/(Loss) : N/A N/A Profit/(Loss) after ETD Items : (247,520) (19,105) Final Dividend : N/A N/A per Share (Specify if with other : N/A N/A options) B/C Dates for Final Dividend : N/A Payable Date : N/AB/C Dates for (-) General Meeting : N/A Other Distribution for : N/A Current Period B/C Dates for Other Distribution : N/A Remarks:1. Basis of preparation These financial statements have been prepared in accordance with all applicable Hong Kong Financial Reporting Standards ("HKFRSs"), which collective term includes all applicable individual Hong Kong Financial Reporting Standards, Hong Kong Accounting Standards ("HKASs") and Interpretation issued by the Hong Kong Institute of Certified Public Accountants ("HKICPA"), accounting principles generally accepted in Hong Kong and the disclosure requirements of the Hong Kong Companies Ordinance. These financial statements also comply with the applicable disclosure provisions of the Rules Governing the Listing of Securities on The Stock Exchange of Hong Kong Limited. The measurement basis used in the preparation of the financial statements is the historical cost basis except that available-for-sale investment is stated at fair value. At the balance sheet date, the Group's current liabilities exceeded its current assets by RMB43,104,000, as the Group has made significant provisions on its short term assets, including a provision of RMB150,704,000 on the trust fund investments. In addition, certain of its subsidiaries in the PRC are also involved in claims by PRC banks for guarantees which were allegedly given by these subsidiaries to third parties without formal approval of the Group management. The sustainability of the Group as a going concern is dependent on its ability to successfully obtain adequate medium to long term financing to fund its operations before sufficient cash flows are generated from profitable operations and to favourably resolve the claims. After evaluating all the relevant facts available to them, the Directors are of the opinion that the Group should be able to maintain itself as a going concern by raising adequate additional finance and by debt restructuring; details are set out below:(i) Prior to the balance sheet date, the Company has successfully raised significant amount of cash by issuing convertible redeemable preference shares ("Preference Shares") for working capital purposes and has the option of requiring the subscriber to subscribe more Preference Shares if the need arises;(ii) The Directors are in the process of negotiation for a restructuring of the short term bank loan of RMB98 million with the Bank of China, Shenzhen Branch; and(iii) The Directors are liaising closely with lawyers in the PRC and the third parties concerned to actively address the claims raised by the PRC banks and will be actively defending questionable claims.2. TURNOVER 2006 2005 RMB'000 RMB'000Income from - Sales of automation products 111,538 185,670 - Fees for project and technical services 4,043 2,295 _______ _________ Total turnover 115,581 187,965 ======= ======== 3. LOSS PER SHARE The calculation of loss per share for the year ended 30 June 2006 is based on the consolidated loss attributable to shareholders of RMB247,520,000 (2005: RMB19,105,000) and the weight average number of 350,000,000 shares (2005: 350,000,000 shares) in issue during the year. No diluted loss per share is presented as there were no dilutive potential ordinary shares in issue during the year ended 30 June 2006 and 2005.4. Change in accounting policies The HKICPA has issued a number of new and revised HKFRSs that are effective for accounting periods beginning on or after 1 January 2005. The following sets out information on the significant changes in accounting policies for the current and prior accounting periods reflected in these financial statements.(a) Financial instruments (HKAS 32, Financial instruments: Disclosure and presentation and HKAS 39, Financial instruments: Recognition and measurement) The adoption of HKAS 32 and HKAS 39 has resulted in a change in accounting policy for recognition, measurement, derecognition of financial instruments and disclosure of financial statements. Prior to 1 July, 2005, the Group classified investments into investment securities and trust fund investments. Investment securities were stated at cost less provision for impairment losses that was expected to be other than temporary. Trust fund investments were stated at their fair value and changes in fair value were recognised in income statements as they arose. Upon the adoption of HKAS 32 and HKAS 39, the Group and the Company's investment in securities and trust fund investments were re-designated as available-for-sale securities and held-to-maturities securities respectively. They have been re-measured in accordance with HKAS 39 as appropriate. The adoption of HKAS 32 and HKAS 39 had no significant impact on the results and financial positions of the current and prior accounting periods. No prior period adjustments were required.(b) Lease (HKAS 17, Lease) In prior years, leasehold land held for development was stated at cost less any identified impairment loss. With the adoption of HKAS 17 as from 1 July 2005, the Group adopted a new policy for such land. Under the new policy, the leasehold interest in the land is accounted for as being held under an operating lease and classified as prepaid lease payment. The cost of acquiring such land is amortised on a straight-line basis over the period of the lease term.(c) Definition of related parties (HKAS 24, related party disclosure) As a result of the adoption of HKAS 24, Related party disclosures, the definition of related parties as disclosed in note 2(r) has been expanded to clarify that related parties include entities that are under the significant influence of a related party that is an individual (i.e. key management personnel, significant shareholders and/or their close family members) and post-employment benefit plans which are for the benefit of employees of the Group or of any entity that is a related party of the Group. The clarification of the definition of related parties has not resulted in any material changes to the previously reported disclosures of related party transactions nor has it had any material effect on the disclosures made in the current period, as compared to those that would have been reported had SSAP 20, Related party disclosures, still been in effect.