1. SIGNIFICANT ACCOUNTING POLICIES
(a) Basis of preparation of accounts
The company was incorporated in Bermuda on 17 August 1992 as an exempt company under The Companies Act, 1981 of Bermuda (as amended).
Although not required to do so under the bye-laws of the company, the accounts are prepared in accordance with the Statements of Standard Accounting Practice issued by the Hong Kong Society of Accountants and the disclosure requirements of the Hong Kong Companies Ordinance. The accounts also comply with the disclosure provisions of the Rules Governing the Listing of Securities on The Stock Exchange of Hong Kong Limited.
(b) Basis of consolidation
The consolidated balance sheet and profit and loss account incorporate the accounts of the company and its subsidiaries made up to 31 March each year, except for Motivasia Hong Kong Limited and P.T. Herald Tristate Plastic which have an accounting date of 30 April and 31 December respectively and were dormant during the year.
The results of subsidiaries acquired during the year are included in the consolidated profit and loss account from the date of their acquisition. All material intercompany transactions and balances are eliminated on consolidation.
(c) Interest in subsidiaries
A subsidiary is a company in which more than 50 per cent of its issued capital is held long term by the group. Interest in subsidiaries in the company's balance sheet is stated at cost less any provisions for permanent diminution in value as determined by the directors.
(d) Associated companies
An associated company is a company, not being a subsidiary of the group, in which the group's interest is for the long term and, having regard to the disposition of the other shareholdings, the group is in a position to exercise significant influence over that company's management. The consolidated profit and loss account includes the group's share of the results of its associated companies for the year. In the consolidated balance sheet, the investment in associated companies is stated at the group's share of their net assets or liabilities.
(e) Goodwill and capital reserve on consolidation
Goodwill arising on consolidation represents the excess of the cost of investment in subsidiaries and associated companies over the fair value of their separable net assets at the respective dates of acquisition and is written off against reserves in the year of acquisition.
The excess of the fair value of the net assets of subsidiaries and associated companies acquired over the cost of investments in these companies is credited to capital reserve.
(f) Fixed assets and accumulated depreciation
(ii) Depreciation is calculated to write off the cost of fixed assets over their anticipated useful lives on a straight line basis at the following annual rates:
(g) Long term investments
Long term investments are stated at cost less any provision for diminution in value which, in the opinion of the directors, is of a permanent nature.
(h) Stock
Stocks are valued at the lower of cost and net realisable value. Cost includes the cost of materials purchased and, in the case of work in progress and finished goods, includes direct labour and an appropriate proportion of production overheads. Net realisable value is determined by reference to the sale proceeds of items sold in the ordinary course of business subsequent to the balance sheet date or to management estimates based on prevailing market conditions.
(i) Revenue recognition
Revenue is recognised when goods are delivered at the customers' premises which is taken to be the point in time when the customer has accepted the goods and the related risks and rewards of ownership. Revenue excludes value added or other sales taxes and is after deduction of any trade discounts.
(ii) Interest income
Interest income from bank deposits is accrued on a time proportion basis on the principal outstanding and at the rate applicable.
(j) Operating leases
Receipts or payments under operating leases are credited or charged to the profit and loss account on a straight line basis over the periods of the respective leases.
(k) Research and development costs
Research and development costs comprise all costs that are directly attributable to research and development activities or that can be allocated on a reasonable basis to such activities. Because of the nature of the group's research and development activities, no development costs satisfy the criteria for the recognition of such costs as an asset. Both research and development costs are therefore recognised as an expense in the period in which they are incurred.
(l) Deferred taxation
Deferred taxation is provided using the liability method in respect of the taxation effect arising from all material timing differences between the accounting and tax treatment of income and expenditure, which are expected with reasonable probability to crystallise in the foreseeable future. Future deferred tax benefits are not recognised unless their realisation is assured beyond reasonable doubt.
(m) Translation of foreign currencies
Foreign currency transactions during the year are translated into Hong Kong dollars at the exchange rates ruling at the transaction dates. Monetary assets and liabilities denominated in foreign currencies are translated into Hong Kong dollars at the exchange rates ruling at the balance sheet date. Exchange gains and losses are dealt with in the profit and loss account.
The accounts of overseas subsidiaries expressed in foreign currencies are translated into Hong Kong dollars at the rates of exchange ruling at the balance sheet date. Exchange gains and losses arising are dealt with as a movement in reserves.
Turnover represents:
Exceptional items comprise:
(Loss)/profit from ordinary activities is arrived at
(a) Directors' remuneration
Directors' remuneration disclosed pursuant to section 161 of the Hong Kong Companies Ordinance is as follows:
The remuneration of the directors is within the following bands:
(b) Employees' emoluments
During the year ended 31 March 1998, the five highest paid individuals comprised five directors (1997: four directors), details of whose emoluments are set out in note 5(a). The aggregate of the emoluments in respect of the remaining individual in 1997 were as follows:
The emoluments of the individual in 1997 were within the band of $2,500,001 to $3,000,000.
(i) Fixed assets are stated in the balance sheet at cost less accumulated depreciation.
Leasehold land Over the remaining terms of the leases Buildings 4 - 5% Plant, machinery, furniture, fixtures
and office equipment9 - 20% Moulds 20 - 50% Motor vehicles 10 - 25% (i) Sales of goods
2. TURNOVER
3. EXCEPTIONAL ITEMS
4. (LOSS)/PROFIT FROM ORDINARY ACTIVITIES
5. DIRECTORS' AND EMPLOYEES' EMOLUMENTS
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