THIS IS A PIMSWIRE TEST MESSAGE
6th August, 2010
TEST COMPANY HOLDINGS LIMITED
PRELIMINARY RESULTS FOR THE YEAR ENDED 31 DECEMBER 2010
Chairman's Statement
Although the Chinese economy experienced positive growth in 2010 and remained one of the bright spots in Asia, the
Group's hotel operations were adversely impacted by the slow down in travel experienced worldwide in the fourth quarter
and by increasing market competition. The intensified competition of other hotels and restaurants, particularly in
????????, caused a decline in operating results. In addition, the Group's property interests in Beijing continued to
be adversely impacted by difficult market conditions and a continuing oversupply of commercial buildings. A write down
in the value of the ?????? Hotel and property was deemed prudent.
As reported in our interim statement for June 2010, the Group made a significant change in its structure as a result of
which the parent company of the Group, Test Company Holdings Limited (the "Company"), is now a company domiciled in
?????????. The new corporate structure should provide the Group with an international profile and a platform for
expanding the shareholder base to a wider range and larger number of international investors. It should also allow
greater flexibility for future business development and growth and international tax planning. The Company also
purchased all of the preference shares of Test Company Holdings plc resulting in a simpler capital structure within the
Group.
In addition, since the US dollar and currencies closely linked to it form the main currency bloc in which the Group's
business is transacted, the Group has adopted the US dollar as its reporting currency with effect from 1 January 2010.
Gross turnover for the year ended 31 December 2010 of USD12,015,000 was higher than the USD33,737 achieved in 2000.
The operating loss for 2010 was USD91,464,000 (2000: operating loss of USD8,710,000). This includes an exceptional
charge from the write-down in the carrying value of fixed assets, mainly attributable to the ??????? Hotel and ???????
development project, of USD30,480,000 (2000: USD30,931,000) which is partly offset by amortisation of negative goodwill
of USD18,288,000 (2000: USD18,558,000). The pre-tax loss before minority interests was USD10,316,000 (2000:
USD9,537,000). The loss after tax and minority interests for the year was USD539,000 compared with a profit after tax
and minority interests of USD405,000 for the year ended 31 December 2000. Net assets per share were USD0.491 (2000:
USD0.484). Gearing slightly reduced to 26.5% (2000: 26.7%).
On behalf of the Board, I would like to thank our management and staff for their continued commitment.
Chairman
Operational Review
??????? HOTEL AND SITE (��)
Test Company Holdings Limited owns a 60% equity interest in the Beijing ??????? Landmark Limited ("???????"), a joint
venture company with the Municipal Government, to operate the ??????? Hotel and to develop the site of some 10,000
sq.m. in the District.
During the year, ??????? continued to make significant investments in the facilities of the hotel. The Health Centre
was upgraded to include a new sauna, jacuzzi, extra massage facilities as well as new exercise equipment. The
guestrooms from floors 12 to 16 were totally refurbished while the guestrooms from floors 5 to 7 benefited from minor
soft refurbishment. All six guest elevators were refurbished. The Revolving Restaurant also underwent soft
refurbishment. Management also introduced stringent measures to reduce costs particularly those associated with the
conservation of energy and other utility costs.
In a very competitive market, ??????? managed to maintain its occupancy rate at 75% in 2010, the same level as in 2000.
Room rates were 3.5% higher than those achieved in 2000. Food and beverage result increased by 8.4% from 2000 to
2010.
Because of the growing oversupply of commercial buildings, and the delay in pursuing the development of the site, there
was a decrease in the value of the hotel and development properties at the end of the year. We have kept the ???????
development on hold but will continue to review the scope and timing of this project.
Note:
The Directors believe that it is advantageous for the Company to be able to buy its own common shares in the market and
accordingly will propose at its forthcoming annual general meeting a general authority to do so.
GROUP PROFIT AND LOSS ACCOUNT
Year ended Year ended
31 December 31
December
2010 2010
USD'000 USD'000
TURNOVER 2 34,015 33,737
COST OF SALES (27,620) (27,930)
___________ __________
GROSS PROFIT 6,395 5,807
ADMINISTRATIVE EXPENSES
Administrative expenses (1,667) (2,144)
(excluding impairment of fixed assets)
Deficit on revaluation of fixed assets (30,480) (30,931)
Amortisation of negative goodwill 18,288 18,558
___________ __________
(13,859) (14,517)
___________ __________
OPERATING LOSS (7,464) (8,710)
EXCEPTIONAL ITEMS
Reorganisation costs of continuing operations (782) -
OTHER INCOME - 1,512
___________ __________
LOSS ON ORDINARY ACTIVITIES BEFORE INTEREST AND (8,246) (7,198)
TAXATION
INTEREST (2,070) (2,339)
___________ __________
LOSS ON ORDINARY ACTIVITIES BEFORE TAXATION 2 (10,316) (9,537)
TAXATION 4 (1,028) (1,101)
___________ __________
LOSS ON ORDINARY ACTIVITES AFTER TAXATION (11,344) (10,638)
MINORITY INTERESTS 10,805 11,043
___________ __________
(ACCUMULATED LOSS) RETAINED PROFIT ATTRIBUTABLE
TO SHAREHOLDERS (539) 405
___________ __________
(LOSS) PROFIT PER SHARE
BASIC 4 (0.19) 0.14
cents cents
GROUP BALANCE SHEET
(Restated)
As at As at
31 December 31 December
2010 2010
USD'000 USD'000
FIXED ASSETS
Tangible assets 369,121 395,295
Negative goodwill (102,544) (120,832)
___________ ___________
266,577 274,463
___________ ___________
CURRENT ASSETS
Stocks 1,140 1,297
Debtors 1,788 1,602
Cash at bank and in hand 39,865 36,929
___________ ___________
42,793 39,828
CREDITORS: amounts falling due within one year (28,682) (42,061)
___________ ___________
NET CURRENT ASSETS (LIABILITIES) 14,111 (2,233)
___________ ___________
TOTAL ASSETS LESS CURRENT LIABILITES 280,688 272,230
CREDITORS: amounts falling due after one year (33,870) (16,600)
___________ ___________
246,818 255,630
MINORITY INTEREST (108,882) (119,723)
___________ ___________
NET ASSETS 137,936 135,907
========== ==========
CAPITAL AND RESERVES
Called up share capital 14,042 14,042
Revaluation reserve 76,213 71,838
Capital and special reserve 3,206 3,282
Statutory reserve 2,463 2,086
Merger reserve 58,433 58,433
Exchange equalisation reserve 1,029 2,793
Profit and loss account (17,450) (16,567)
___________ ___________
SHAREHOLDERS' FUNDS 137,936 135,907
========== ==========
GROUP STATEMENT OF TOTAL RECOGNISED GAINS AND LOSSES
(Restated)
Year ended Year ended
31 December 31 December
2010 2010
USD'000 USD'000
(LOSS) PROFIT FOR THE YEAR (539) 405
Unrealised gain on revaluation of hotel properties 2,546 4,894
___________ ___________
Total gains for the year before currency adjustments 2,007 5,299
Exchange adjustments 22 735
___________ ___________
TOTAL GAINS RECOGNISED FOR THE YEAR 2,029 6,034
Prior year adjustments (see note below) 1,524 ==========
___________
TOTAL GAINS RECOGNISED SINCE LAST FINANCIAL 3,553
STATEMENTS
==========
RECONCILIATION OF SHAREHOLDERS' FUNDS
Total recognised gains 2,029 6,034
Shareholders' funds at beginning of year (originally
USD134,383,000 before
135,907 129,873
addition of prior year adjustment of USD1,524,000)
___________ ___________
Shareholders' funds at end of year 137,936 135,907
========== ==========
The deferred tax liability was previously provided as a result of the upward revaluation of properties held for
development. On acquisition the intention was to redevelop and then sell these properties and a deferred tax liability
of USD40,480,000 was provided to cover the tax charge arising on the expected gain on disposal. The Group's share of
the deferred tax liability was included in the calculation of negative goodwill which arose on the acquisition of the
company which held these properties. The balance was borne by the minority interest.
THIS IS A PIMSWIRE TEST MESSAGE