Guoco Group Limited — Annual Report 2002

Jul 22, 2002

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FAR EAST HOTELS AND ENTERTAINMENT LIMITED

(Incorporated in Hong Kong with limited liability)

ANNOUNCEMENT OF FINAL RESULTS FOR THE YEAR ENDED 31 MARCH 2002

RESULTS

The Board of Directors of Far East Hotels And Entertainment Limited (the “Company”) announces the audited consolidated financial results of the Company and its subsidiaries (the “Group”) for the year ended 31 March 2002 as follows:

CONSOLIDATED INCOME STATEMENT

For the year ended 31 March 2002

Notes Turnover 1 Cost of sales Other revenue Administrative expenses Other operating expenses Provision for recoverability of deposit paid Revaluation decrease on investment properties Revaluation (decrease) increase on hotel property Loss from operations Finance costs Share of results of associates Loss before taxation Taxation 2 Loss before minority interests Minority interests Net loss for the year Loss per share – Basic 3	Year endeded 2002 HK$ 23,688,888 (22,595,449) 1,093,439 79,530 (13,992,688) (1,582,972) (3,500,000) (460,000) (2,571,183) (20,933,874) (4,910,179) (957,278) (26,801,331) – (26,801,331) 1,457,134 (25,344,197) Cents (5.18)	31 March 2001 HK$ 27,703,290 (25,591,960) 2,111,330 – (11,658,393) (1,582,972) – (1,000,000) 157,781 (11,972,254) (3,998,746) (3,400,613) (19,371,613) – (19,371,613) 1,030,769 (18,340,844) Cents (3.75)

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Notes:

1. Segmental Information Business segments

2002 Turnover Other revenue Total revenue Segment result Finance costs Share of results of associates Loss before taxation Taxation Loss before minority interests Minority interests Loss for the year 2001 Turnover Segment result Finance costs Share of results of associates Loss before taxation Taxation Loss before minority interests Minority interests Loss for the year Geographical segments	Hotel operation HK$ 10,792,289 – 10,792,289 (1,277,345) – 9,637,584 1,770,137 –	Property rental HK$ 7,631,131 – 7,631,131 (5,616,907) – 9,761,790 (4,984,609) –	Securities trading HK$ 1,216,688 – 1,216,688 (148,541) – 2,697,888 (2,172,271) –	Loan Investment financing holding & others HK$ HK$ 3,491,991 556,789 79,530 – 3,571,521 556,789 2,154,390 (16,045,471) 2,022,435 (2,979,713) 5,272,247 333,781 3,894,281 (10,479,792) (16,703) (3,383,910)	Consolidation HK$ 23,688,888 79,530
					23,768,418
					(20,933,874) (4,910,179) (957,278)
					(26,801,331) –
					(26,801,331) 1,457,134
					(25,344,197)
					27,703,290
					(11,972,254) (3,998,746) (3,400,613)
					(19,371,613) –
					(19,371,613) 1,030,769
					(18,340,844)

	Sales revenue by	Sales revenue by	Contribution to	Contribution to
	geographical market		loss from	operations
	2002	2001	2002	2001
	HK$	HK$	HK$	HK$
Hong Kong	16,057,757	17,941,500	(15,867,120)	(8,077,728)
People’s Republic of China	7,631,131	9,761,790	(5,066,754)	(3,894,526)
	23,688,888	27,703,290	(20,933,874)	(11,972,254)

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2. Taxation

No provision for Hong Kong Profits Tax has been made in the financial statements as the Company and its subsidiaries incurred tax losses for the year.

3. Loss per share

• (a) Basic loss per share The calculation of basic loss per share is based on the Group’s loss attributable to shareholders of HK$25,344,197 (2001: HK$18,340,844) and on the 488,842,675 (2001: 488,842,675) shares in issue during the year.

• (b) Diluted loss per share

  • No diluted loss per share has been presented because the exercise prices of the outstanding share options of the Company were greater than the average market price of shares for each of the two years ended 31 March 2001 and 2002.

4. Depreciation

During the year, depreciation of HK$5,705,198 (2001: HK$5,832,812) was charged in respect of the Group’s property, plant and equipment.

DIVIDENDS

The Board does not recommend the payment of any dividend for the year (2001: Nil).

BOOK CLOSURE

The register of members of the Company will be closed from 21 August 2002 to 23 August 2002 (both days inclusive), during which period no transfer of shares will be effected. In order to qualify for attending the Annual General Meeting, all transfers accompanied by the relevant share certificates must be lodged with Standard Registrars Limited, the Registrars of the Company, at 5th Floor, Wing On Centre, 111 Connaught Road Central, Hong Kong not later than 4:00 p.m. on 20 August 2002.

REVIEW OF OPERATIONS AND PROSPECTS

The directors are pleased to advise that our Company’s joint venture development project with Cheung Kong (Holdings) Limited, the Nob Hill development, is anticipated to be completed in late August 2002. The occupation permit of Nob Hill has already been issued and the certificate of compliance is expected to be issued in midAugust 2002. As at the report date, a majority portion of residential units is sold and a majority portion of the commercial area has been successfully leased out.

Cheung Chau Warwick Hotel (“CCWH”) has successfully captured more local business with turnover on food and beverage section increased by 40% compared with last year but such increase could not compensate the decrease in the lodging sector due to the low occupancy room rate. As a result, CCWH recorded a decrease in profit of approximately HK$0.3 million compared with last year.

Beijing Warwick International Apartments continues facing recession in its business, turnover has decreased by approximately HK$2.1 million compared with last year. Due to increase in supply of hotel rooms in Beijing in recent years, the management of our Company is exploring the possibility of redeveloping the apartment property.

Our overseas associated company, which owns and operates the Old Sydney Town Theme Park in Australia, continues operating at a loss of which the Group shared a loss of approximately HK$3 million.

In anticipation of the revenue from the sale of residential units of Nob Hill, our Company is actively consider to expand our core business in the near future in Hong Kong and the Far East region.

The Group has approximately 130 employees. Employees are remunerated according to nature of the job and market trend, with build-in merit component incorporated in the annual increment to reward and motivate individual performance.

FINANCE ACTIVITIES

At the balance sheet date, the Group had bank loans and overdraft facilities amounted to HK$199,265,883 (2001: HK$71,468,852), of which HK$192,265,883 (2001: HK$53,569,961) were utilised. These facilities were secured by legal mortgages over the Group’s properties and deposits with an aggregate net book value of HK$57,449,788 (2001: HK$58,362,430) and HK$2,136,010 (2001: HK$2,283,911) respectively.

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At 31 March 2002, the Group had no material exposure under foreign exchange contracts, interest or currency swaps or other financial derivatives.

Shareholders’ funds at 31 March 2002 amounted to approximately HK$584 million (2001: approximately HK$607 million). Accordingly, the Group’s gearing ratio (total bank loans and overdraft facilities utilized to shareholders’ funds) at 31 March 2002 is 33% (2001: 9%).

PURCHASE, SALE OR REDEMPTION OF THE COMPANY’S LISTED SECURITIES

During the year ended 31 March 2002, neither the Company nor any of its subsidiaries purchased, sold or redeemed any of the Company’s listed securities.

CODE OF BEST PRACTICE

The Company has complied throughout the year ended 31 March 2002 with the Code of Best Practice as set out in Appendix 14 of the Rules Governing the Listing of Securities (“Listing Rules”) on The Stock Exchange of Hong Kong Limited (“Stock Exchange”).

DISCLOSURE UNDER PRACTICE NOTE 19 TO THE LISTING RULES

As at 31 March 2002, the Group advanced a total of approximately HK$197 million to an associate, Central More Limited. The balance due includes land transferred of approximately HK$136 million and accumulated accrued interest charged thereon of approximately HK$61 million. The balance is interest bearing at the Hong Kong Prime Rate, unsecured and has no fixed repayment term.

PUBLICATION OF THE ANNUAL RESULTS ON THE INTERNET WEBSITE OF THE STOCK EXCHANGE

The financial and other information required by Paragraphs 45(1) to 45(3) of Appendix 16 of the Listing Rules will be published on the website of the Stock Exchange in due course.

On behalf of the Board Derek Chiu Managing Director & Chief Executive

Hong Kong, 19 July 2002

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NOTICE OF ANNUAL GENERAL MEETING

NOTICE IS HEREBY GIVEN that the Annual General Meeting of the Company will be held at Penthouse, Far East Consortium Building, 121 Des Voeux Road Central, Hong Kong on Friday, 23 August 2002 at 3:00 p.m. for the following purposes:

1. To receive and consider the audited financial statements and the reports of the directors and auditors for the year ended 31 March 2002.

2. To elect directors and to fix their fees.

3. To appoint auditors and to authorise the directors to fix their remuneration.

4. To transact any other ordinary business.

By Order of the Board Sung-Ki Tang Secretary

Hong Kong, 19 July 2002

Notes:

1. Any member entitled to attend and vote at the meeting is entitled to appoint a proxy to attend and, on a poll, vote instead of him. A proxy need not be a member of the Company.

2. In order to be valid, the form of proxy, together with any power of attorney or other authority (if any) under which it is signed, or a notarially certified copy of that power of authority, must be lodged with the registered office of the Company at Suite 2806, 28th Floor, Great Eagle Centre, 23 Harbour Road, Wanchai, Hong Kong not less than 48 hours before the time appointed for holding the meeting.

Please also refer to the published version of this announcement in The Standard.

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