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2. Application of new and revised Hong Kong Financial Reporting Standards (HKFRSs)/changes in accounting policies (continued)

Hong Kong Interpretation 5 Presentation of Financial Statements Classification by the Borrower of a Term Loan that Contains a Repayment on Demand Clause

Hong Kong Interpretation 5 Presentation of Financial Statements Classification by the Borrower of a Term Loan that Contains a Repayment on Demand Clause(HK-Int 5) clarifies that term loans that include a clause that gives the lender the unconditional right to call the loans at any time (repayment on demand clause) should be classified by the borrower as current liabilities. The Group has applied HK-Int 5 for the first time in the current year. Hong Kong Interpretation 5 requires retrospective application.

In order to comply with the requirements set out in HK-Int 5, the Group has changed its accounting policy on classification of term loans with a repayment on demand clause. In the past, the classification of such term loans were determined based on the agreed scheduled repayment dates set out in the loan agreements. Under HK-Int 5, term loans with a repayment on demand clause are classified as current liabilities.

As a result, bank loans that contain a repayment on demand clause with the aggregate carrying amounts of HK$220,000,000 and HK$260,000,000 have been reclassified from non-current liabilities to current liabilities as at 31 December 2009 and 1 January 2009 respectively. The application of HK-Int 5 has had no impact on the reported profit or loss for the current and prior years and the financial position at 31 December 2010.

Borrowings due within one year Borrowings due after one year

Total effects on net assets

Borrowings due within one year Borrowings due after one year

Total effects on net assets

Originally stated HK$000

Adjustments HK$000

Restated HK$000

247,040 4,257,328

220,000 (220,000)

467,040 4,037,328

4,504,368

4,504,368

Originally stated HK$000

1 January 2009

Adjustments HK$000

Restated HK$000

1,668,963 2,754,127

260,000 (260,000)

1,928,963 2,494,127

4,423,090

4,423,090

31 December 2009

The application of other new and revised HKFRSs had no material effect on the consolidated financial statements of the Group for the current or prior accounting periods.

Annual Report 2010

77

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