CTF Services Limited — Earnings Release 2006

Oct 9, 2006

Listed Company Information

Listed Company Information
NWS HOLDINGS<00659> - Results Announcement NWS Holdings Limited announced on 09/10/2006: (stock code: 00659 ) Year end date: 30/06/2006 Currency: HKD Auditors' Report: Unqualified (Audited ) (Audited ) Last Current Corresponding Period Period from 01/07/2005 from 01/07/2004 to 30/06/2006 to 30/06/2005 Note ('Million ) ('Million ) (Restated) Turnover : 12,543.9 10,286.1 Profit/(Loss) from Operations : 649.7 1,954.2 Finance cost : (253.8) (227.1) Share of Profit/(Loss) of Associates : 476.6 360.7 Share of Profit/(Loss) of Jointly Controlled Entities : 909.4 862.2 Profit/(Loss) after Tax & MI : 1,656.6 2,886.1 % Change over Last Period : -43 % EPS/(LPS)-Basic (in dollars) : 0.89 1.60 -Diluted (in dollars) : 0.85 1.52 Extraordinary (ETD) Gain/(Loss) : 0 0 Profit/(Loss) after ETD Items : 1,656.6 2,886.1 Final Dividend : $0.20 $0.62 per Share (Specify if with other : in scrip form with in scrip form with options) cash option cash option B/C Dates for Final Dividend : 16/11/2006 to 21/11/2006 bdi. Payable Date : 29/12/2006 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. Basis of preparation and accounting policies (a) Basis of preparation The consolidated financial statements have been prepared in accordance with accounting standards issued by the Hong Kong Institute of Certified Public Accountants ("HKICPA"), including Hong Kong Financial Reporting Standards ("HKFRS"), Hong Kong Accounting Standards ("HKAS") and Interpretations ("HK(SIC) - Int") (collectively the "HKFRSs") as described further below. They have been prepared under the historical cost convention, as modified by the revaluation of investment properties, financial assets and financial liabilities at fair value through profit or loss and available-for-sale financial assets, which are carried at fair value. (b) The adoption of new / revised HKFRSs For the year ended 30 June 2005, the Company and its subsidiaries (the " Group") early adopted HKFRS 3 "Business combinations", HKAS 36 "Impairment of assets" and HKAS 38 "Intangible assets". With effect from 1 July 2005, the Group has adopted the remaining HKFRSs that are currently in issue and effective for the accounting periods commencing on or after 1 January 2005 as below, which are relevant to its operation, and also early adopted the amendment to HKAS 21 "The effects of changes in foreign exchange rates - Net investment in a foreign operation" which is effective for the accounting periods commencing on or after 1 January 2006. The 2005 comparatives have been restated as required, in accordance with the relevant requirements. HKAS 1 Presentation of Financial Statements HKAS 2 Inventories HKAS 7 Cash Flow Statements HKAS 8 Accounting Policies, Changes in Accounting Estimates and Errors HKAS 10 Events after the Balance Sheet Date HKAS 16 Property, Plant and Equipment HKAS 17 Leases HKAS 21 The Effects of Changes in Foreign Exchange Rates HKAS 23 Borrowing Costs HKAS 24 Related Party Disclosures HKAS 27 Consolidated and Separate Financial Statements HKAS 28 Investments in Associates HKAS 31 Investments in Joint Ventures HKAS 32 Financial Instruments: Disclosures and Presentation HKAS 33 Earnings per Share HKAS 39 Financial Instruments: Recognition and Measurement HKAS 40 Investment Property HK(SIC) - Int 15 Operating Leases - Incentives HK(SIC) - Int 21 Income Taxes - Recovery of Revalued Non- Depreciable Assets HKFRS 2 Share-based Payment The adoption of the above HKFRSs has the following impact on the Group's accounting policies: (i) HKAS 17 Leases The adoption of HKAS 17 has resulted in a change in the accounting policy relating to the reclassification of leasehold land and land use rights from property, plant and equipment to operating leases. The up-front prepayments made for the leasehold land and land use rights are expensed in the income statement on a straight-line basis over the period of the lease or when there is impairment, the impairment is expensed in the income statement. In prior years, the leasehold land and land use rights were accounted for at cost less accumulated depreciation and accumulated impairment. This change in accounting policy has been applied retrospectively. (ii) HKAS 32 Financial instruments: Disclosures and Presentation HKAS 39 Financial instruments: Recognition and Measurement The adoption of HKAS 32 and HKAS 39 has resulted in a change in the accounting policy relating to the classification of financial assets at fair value through profit or loss and available-for-sale financial assets. It has also resulted in the recognition of derivative financial instruments at fair value and the change in the recognition and measurement of hedging activities. This change in accounting policy has been applied on a prospective basis. The Group is required to split the carrying value of its convertible bonds into equity and liability components in accordance with HKAS 32. The liability component is initially recognized at its fair value which is determined by using a market interest rate for an equivalent non- convertible bond and subsequently carried at amortized cost until extinguished on conversion or maturity of the bonds. The remainder of the proceeds is allocated to the conversion option which is recognized and included in shareholders' equity as special reserves, net of income tax effects. The notional interest expense calculated is charged to the income statement. This change in accounting policy has been applied retrospectively. (iii) HKAS 40 Investment Property The adoption of HKAS 40 has resulted in a change in the accounting policy of which the changes in fair value of investment properties are recorded in the income statement. In prior years, increases in fair value of investment properties were credited to the investment properties revaluation reserve. Decreases in fair value were first set off against increases on earlier valuations on a portfolio basis and thereafter expensed in the income statement. The Group has applied the relevant transitional provisions under HKAS 40 and elected to apply HKAS 40 from 1 July 2005 onwards. As a result, investment properties revaluation reserve of HK$39.3 million as at 1 July 2005 has been transferred to the opening retained profits. Comparative information has not been restated. (iv) HK(SIC) - Int 21 Income Taxes - Recovery of Revalued Non- Depreciable Assets The adoption of HK(SIC) - Int 21 has resulted in a change in the accounting policy relating to the measurement of deferred tax liabilities arising from the revaluation of investment properties. Such deferred tax liabilities are measured on the basis of tax consequences that would follow from recovery of the carrying amount of that asset through use. In prior years, the carrying amount of that asset was expected to be recovered through sale. (v) HKFRS 2 Share-based Payment The adoption of HKFRS 2 has resulted in a change in the accounting policy for share-based payments. Until 30 June 2005, the provision of share options to employees did not result in an expense in the income statement. Effective on 1 July 2005, the Group expenses the fair value of share options in the income statement. As a transitional provision, the fair value of share options granted after 7 November 2002 and not vested on 1 July 2005 was expensed retrospectively in the income statement of the respective periods. (vi) Other standards The adoption of new / revised HKASs 1, 2, 7, 8, 10, 16, 21, 23, 24, 27, 28, 31, 33 and HK(SIC) - Int 15 did not result in substantial changes to the Group's accounting policies. In summary: - HKAS 1 has affected the presentation of minority interest, share of net after-tax results of jointly controlled entities and associated companies and other disclosures. - HKAS 21 had no material effect on the Group's policy. The functional currency of each of the consolidated entities has been re- evaluated based on the guidance of the revised standard. - HKAS 24 has affected the disclosure of related-party transactions. 2. Operating profit Operating profit of the Group is arrived at after crediting and charging the following: For the year ended 30 June 2006 2005 HK$'m HK$'m (restated) Crediting Gross rental income from investment properties 42.2 40.9 Less: Outgoings (12.5) (10.1) ----------------------- 29.7 30.8 ======================== Other income Profit on disposal of subsidiary companies 65.7 749.3 Profit on disposal of a jointly controlled entity 68.7 1,092.3 Profit on disposal of an investment - 190.7 Profit on disposal of land use rights and properties 22.7 - Interest income 76.6 33.5 Management fee 44.8 31.4 Machinery hire income 14.2 20.2 Fair value gains on investment properties 3.0 - Gain on redemption of convertible bonds 48.0 - Dividend and other income 11.4 - ----------------------- 355.1 2,117.4 ======================= Charging Other charges Loss on disposal of a jointly controlled entity - 2.1 Assets impairment loss 30.0 57.8 ---------------------- 30.0 59.9 ====================== Cost of inventories sold 827.3 905.6 Write-down of inventories 7.2 2.2 Depreciation 198.4 197.3 Amortization of leasehold land and land use rights 3.0 2.6 3. Earnings per share The calculation of basic and diluted earnings per share for the year is based on the following: 2006 2005 HK$'m HK$'m (restated) Profit attributable to shareholders of the Company 1,656.6 2,886.1 Effect of dilutive potential ordinary shares: Interest on convertible bonds, net of tax 19.7 21.7 _________ _________ Profit for calculation of diluted earnings per share 1,676.3 2,907.8 ======= ======== Number of shares 2006 2005 Weighted average number of shares for calculating basic earnings per share 1,869,586,707 1,803,667,218 Effect of dilutive potential ordinary shares: Share options 1,800,667 9,465,762 Convertible bonds 89,225,798 99,046,222 _____________ _______________ Weighted average number of shares for calculating diluted earnings per share 1,960,613,172 1,912,179,202 ============== ==============