CTF Services Limited — Earnings Release 2003

Oct 16, 2003

Listed Company Information

NWS HOLDINGS<00659> - Results Announcement NWS Holdings Limited announced on 16/10/2003: (stock code: 00659 ) Year end date: 30/6/2003 Currency: HKD Auditors' Report: Unqualified (Audited ) (Audited ) Last Current Corresponding Period Period from 1/7/2002 from 1/7/2001 to 30/6/2003 to 30/6/2002 Note ('Million ) ('Million ) Turnover : 5,770 125.1 Profit/(Loss) from Operations : 659 209.7 Finance cost : (194.1) (2.9) Share of Profit/(Loss) of Associates : 317.3 260.7 Share of Profit/(Loss) of Jointly Controlled Entities : 596.4 165.3 Profit/(Loss) after Tax & MI : 1,213.4 143.9 % Change over Last Period : +743 % EPS/(LPS)-Basic (in dollars) : 1.39 0.05 -Diluted (in dollars) : N/A N/A Extraordinary (ETD) Gain/(Loss) : N/A N/A Profit/(Loss) after ETD Items : 1,213.4 143.9 Final Dividend : $0.2 NIL per Share (Specify if with other : N/A N/A options) B/C Dates for Final Dividend : 25/11/2003 to 28/11/2003bdi. Payable Date : 16/12/2003 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. Group Reorganization On 21st October 2002, the Company (formerly known as Pacific Ports Company Limited) and New World Development Company Limited ("NWD"), New World Infrastructure Limited ("NWI") and the shareholders of NWS Service Management Limited (formerly known as New World Services Limited, ("NWSS")) entered into two share purchase agreements, which after completion, resulted into reorganization of various group companies (the "Group Reorganization"). The Group Reorganization involved: (i) the acquisition of the entire interests in subsidiaries and jointly controlled entities of NWI holding the infrastructure investments (the "Infrastructure Companies") together with the assignment of certain shareholders' loans to the Infrastructure Companies to the Company from NWI at a consideration of approximately HK$9.6 billion, comprising cash consideration of approximately HK$8.5 billion, undertaking to repay certain liabilities of NWI in the aggregate amount of approximately HK$0.9 billion, and 853 million consideration shares to be issued by the Company; (ii) the acquisition of the entire share capital of NWSS by the Company from the shareholders of NWSS by issue of approximately 11,701 million consideration shares to be issued by the Company; and (iii) the distribution of the entire holding of approximately 5,592 million ordinary shares in the Company held by NWI to its shareholders, which included the issue of approximately 3,194 million new shares by the Company to NWI upon conversion of all the preference shares of the Company into ordinary shares of the Company. The Group Reorganization was completed on 29th January 2003 (the "Completion Date") and on that date, the Company changed its name to NWS Holdings Limited. Further details of the Group Reorganization are set out in the Circular to the Company's shareholders dated 18th November 2002. Under the Group Reorganization, the aforesaid consideration shares amounting to approximately 12,554 million new ordinary shares were issued ("Consideration Shares"), as agreed, at approximately HK$0.9327 per share, based on the business valuations of the Infrastructure Companies and Service Companies being acquired. On the Completion Date, the fair value of the Consideration Shares, which represented the actual market value of Company's shares at that date, was HK$0.29 per share. Statement of Standard Accounting Practice No. 30 "Business Combinations" requires the fair value of the Consideration Shares for accounting purposes to be determined at the Completion Date. Accordingly, the total cost of the acquisition, based on fair values of the purchase consideration and the acquired assets and liabilities at the Completion Date, resulted in a net negative goodwill of HK$994.6 million. The post-acquisition results subsequent to the Completion Date of the acquired Infrastructure Companies and NWSS are consolidated into the accounts of the Group. 2. Basis of preparation The accounts have been prepared under the historical cost convention as modified by the revaluation of investment properties and investment securities, and in accordance with accounting principles generally accepted in Hong Kong and comply with accounting standards issued by the Hong Kong Society of Accountants ("HKSA"). In the current year, the Group adopted the following Statements of Standard Accounting Practice ("SSAPs") issued by the HKSA, which are effective for accounting periods commencing on or after 1st January 2002: SSAP 1 (revised): Presentation of financial statements SSAP 11 (revised): Foreign currency translation SSAP 15 (revised): Cash flow statements SSAP 34 (revised): Employee benefits Certain changes have been made upon the adoption of the above SSAPs. 3. Operating profit/(loss) Operating profit/(loss) of the Group is arrived at after crediting and charging the following: 2003 2002 HK$'m HK$'m Crediting:- Profit on disposal of a subsidiary 27.1 21.7 Interest income 11.3 5.1 Machinery hire income 14.2 - =================== Charging:- Cost of inventories sold 176.3 - Depreciation 241.0 38.9 Other charges Loss on disposal of a subsidiary and partial disposal of jointly controlled entities - 90.0 Impairment loss on fixed assets 74.8 119.5 Impairment loss on non-trading securities - 5.8 74.8 215.3 ===================== 4. Earnings per ordinary share The calculation of basic earnings per ordinary share is based on profit of HK$1,213.4 million (2002: HK$143.9 million) less preference share dividend of HK$11.4 million (2002: HK$133.9 million) and the weighted average of 866.1 million (2002 restated: 206.0 million) ordinary shares in issue during the year. The comparatives have been restated due to consolidation of 10 shares into 1 share during the year. The diluted earnings per ordinary share for the year ended 30th June 2003 is not presented as the share options would not have a dilutive effect. The diluted earnings per ordinary share for the year ended 30th June 2002 was not presented as the conversion of preference shares and share options granted by the Company would not have dilutive effect.