- 2009.11 UDL HOLDINGS
Company Name: UDL Holdings LimitedStock Code: 620Year end: July 31, 2009
Basis for qualified opinion arising from limitation of scope
As at 31 July 2009, the Group has intangible assets with a total carrying value of approximately HK$30,912,000 which represents two licences on the approved list of the port work for the Hong Kong Government and one licence for structural steel engineering work in Mainland China (“Licences”), which were acquired through the acquisition of 100% equity interests in each of Lead Ocean Assets Management Limited and Net Excel Management Limited as referred to in note 35 to the financial statements. The management has estimated the value-in-use for these Licences as cash-generating-units based on the discounted cash flow projections taking into account of certain key assumptions as further detailed in note 18 to the financial statements. Up to the date of approval of these financial statements, the Group is still in the stage of tendering for certain work for which the contracts are not yet awarded. No impairment is considered necessary by the directors of the Company at 31 July 2009. However, we have been unable to ascertain the reasonableness of the key assumptions adopted and data used by the management in the discounted cash flow projections. In consequence, we are unable to determine whether these Licences are fairly stated at 31 July 2009. Any adjustment to the carrying value of the Licences may have a significant impact on the net assets of the Group as at 31 July 2009 and the results of the Group for the year then ended.
- 2009.11 QUAM
Company Name: Quam LimitedStock Code: 952Year end: September 30, 2009
Basis for qualified conclusion
Included in the available-for-sale financial assets in the condensed consolidated balance sheet as at 30 September 2009 is the Group’s investment in Seamico Securities Public Company Limited (‘‘Seamico’’) of HK$45,160,000 which represents the fair value of the Group’s Seamico shares at that date, based on the last bid price. Under paragraph 61 of Hong Kong Accounting Standard 39 ‘‘Financial Instruments: Recognition and Measurement’’ (‘‘HKAS 39’’), a significant or prolonged decline in fair value of an investment in an equity instrument below its cost is objective evidence of impairment, the amount of which should be reflected as a charge to the profit or loss. The Seamico shares have been trading below their carrying cost for over 16 months, and in our opinion have been impaired as they satisfy the condition of a prolonged decline. Had the Group made the impairment provision required under HKAS 39, the Group’s profit for the year would have been reduced by HK$17,358,000 with a corresponding increase in the available-for-sale financial assets revaluation reserve of the same amount, with no impact to the total comprehensive income attributable to the equity holders of the Company.
Except for the effect of the matter described in the preceding paragraph, based on our review, nothing has come to our attention that causes us to believe that the interim financial report is not prepared, in all material respects, in accordance with Hong Kong Accounting Standard 34.