CAI Corp — Earnings Release 2005

Aug 10, 2005

Listed Company Information

Listed Company Information
HARBOUR CENTRE<00051> - Results Announcement Harbour Centre Development Limited announced on 10/08/2005: (stock code: 00051 ) Year end date: 31/12/2005 Currency: HKD Auditors' Report: N/A Interim report reviewed by: Audit Committee (Unaudited ) (Unaudited ) Last Current Corresponding Period Period from 01/01/2005 from 01/01/2004 to 30/06/2005 to 30/06/2004 Note ('Million ) ('Million ) Turnover 2 : 232.0 209.9 Profit/(Loss) from Operations 2 : 109.2 99.7 (restated) Finance cost : N/A N/A Share of Profit/(Loss) of Associates : 14.5 47.1 Share of Profit/(Loss) of Jointly Controlled Entities : N/A N/A Profit/(Loss) after Tax & MI : 197.9 132.7 (restated) % Change over Last Period : +49.1 % EPS/(LPS)-Basic (in dollars) 3 : 0.63 0.42 -Diluted (in dollars) : N/A N/A Extraordinary (ETD) Gain/(Loss) : N/A N/A Profit/(Loss) after ETD Items : 197.9 132.7 (restated) Interim Dividend : 5.0 cents 5.0 cents per Share (Specify if with other : N/A N/A options) B/C Dates for Interim Dividend : 28/09/2005 to 04/10/2005 bdi. Payable Date : 12/10/2005 B/C Dates for (-) General Meeting : N/A Other Distribution for : N/A Current Period B/C Dates for Other Distribution : N/A Remarks: (1) Change in accounting policies The accounting policies used in preparation of the interim financial report under review are consistent with those adopted in the annual report and financial statements for the year ended 31st December, 2004, except those changes following the Group's adoption of the new and revised Hong Kong Financial Reporting Standards, including The Hong Kong Accounting Standards ("HKASs") and relevant Interpretations ("HKAS-INTs" and "HK- INTs") which took effect on 1st January, 2005. The changes in accounting policies that with significant impacts on the account are summarised as follows: Hong Kong Accounting Standard ("HKAS") 40 "Investment property" In prior years, investment property was stated at fair value and its surpluses on revaluation were credited to the investment property revaluation reserve. Deficits arising on revaluation were set off against previous revaluation surpluses and thereafter charged to profit and loss account. Revaluation was only done as at the financial year-end date. With effect from 1st January, 2005, on adoption of HKAS 40, the Group's investment property is stated at fair value with all the changes in fair value reported in the consolidated profit and loss account. This new accounting policy has been applied retrospectively. Revenue reserve as at 1st January, 2005 and 1st January, 2004 were restated and increased by HK$823.3 million and HK$674.6 million, respectively, which represented the transfer from investment property revaluation reserve. Such transfer has no effect on the Group's shareholders' equity. The effect of the change in revaluation surplus credited to the consolidated profit and loss account for the period ended 30th June, 2005 is HK$104.8 million. HKAS - INT 21 "Income taxes - recovery of revalued non-depreciable assets" In previous years, no deferred taxation was recognised on revaluation changes of the Group's investment property on the basis that the recovery of the carrying amount of the investment property would be through sales and such deferred taxation should be calculated at the tax rate applicable on eventual sale, which is nil in Hong Kong. With effect from 1st January, 2005, HKAS-INT 21 requires deferred taxation to be recognised on any revaluation changes on investment property on the basis that the recovery of the carrying amount of the investment property would be through use and be calculated at the applicable profits tax rate and charged to profit and loss account. This new accounting policy has been applied retrospectively. The shareholders' equity as at 1st January, 2005 and 1st January, 2004 were restated and decreased by HK$144.1 million and HK$118.1 million respectively. The adjustments represent deferred tax liabilities on the revaluation on the Group's investment property. The change has increased deferred tax charge of HK$18.3 million for the period ended 30th June, 2005. HK - INT 2 "The appropriate accounting policies for hotel properties" and HKAS 17 "Leases" In prior years, the Group's hotel property was stated at fair value based on an annual professional valuation. No depreciation was provided on the hotel property on the basis that it was maintained in a continuous state of sound repair such that, given the estimated life of the hotel property and its residual value, any depreciation was immaterial. With effect from 1st January, 2005, on adoption of HK-INT 2 and HKAS17, the Group's leasehold land and building of the hotel property is split into a lease of land and a lease of building in proportion to the relative fair values of the interest in the land and the building elements at the inception of the lease. The leasehold land is stated at cost and is amortised over the period of the lease on a straight-line basis whereas the building is stated at cost less accumulated depreciation and impairment. These new accounting policies have been applied retrospectively. The shareholders' equity as at 1st January, 2005 and 1st January, 2004 were restated and decreased by HK$1,813 million, which comprised hotel property revaluation reserve of HK$1,756.9 million and revenue reserve of HK$56.1 million, and HK$1,644.3 million, which comprised hotel property revaluation reserve of HK$1,589.9 million and revenue reserve of HK$54.4 million, respectively. The change has increased depreciation charge to the consolidated profit and loss account for the period ended 30th June, 2005 by HK$1.3 million (six months ended 30th June, 2004 as restated: HK$0.9 million). (2) The turnover and profit from operations of HK$232.0 million and HK$109.2 million for the half-year period ended 30th June, 2005 respectively and HK$209.9 million and HK$99.7 million for the last corresponding period respectively were all generated from continuing operations. (3) The calculation of earnings per share is based on the profit for the period of HK$197.9 million (2004 restated: HK$132.7 million) and on 315.0 million (2004: 315.0 million) ordinary shares in issue during the period. For the period under review and the preceding comparative period, there is no difference between the basic and diluted earnings per share.