IRC Limited — Earnings Release 2001

Nov 12, 2001

Listed Company Information

LAI SUN DEV<00488> - Results Announcement (Summary) (Revised) Lai Sun Development Company Limited announced on 9/11/2001: (stock codes: 488) The auditors' report on the financial statements which contain the following result is modified by the Company's auditors. For more details, please refer to the press announcement issued by the Company on 12/11/2001. Year end date: 31/7/2001 Currency: HKD (Audited) (Audited) Last Current Corresponding Period Period from 1/8/2000 from 1/8/1999 31/7/2001 to 31/7/2000 Turnover : 1,899,862,000 4,659,663,000 Profit/(Loss) from Operations : (342,490,000) (2,386,771,000) Finance cost : (638,483,000) (911,077,000) Share of Profit/(Loss) of Associates : (174,549,000) (189,561,000) Share of Profit/(Loss) of Jointly Controlled Entities : Nil (36,790,000) Profit/(Loss) after Tax & MI : (1,196,182,000) (2,757,982,000) % Change over Last Period : N/A EPS/(LPS)-Basic : (0.32) (0.77) -Diluted : N/A N/A Extraordinary (ETD) Gain/(Loss) : Nil Nil Profit/(Loss) after ETD Items : (1,196,182,000) (2,757,982,000) Final Dividend per Share : Nil Nil (Specify if with other options) : N/A N/A B/C Dates for Final Dividend : N/A Payable Date : N/A B/C Dates for (-) General Meeting : N/A Other Distribution for Current Period : N/A B/C Dates for Other Distribution : N/A Remarks: 1. Following the release of the final results announcement of Lai Sun Development Company Limited (the "Company") on Teletext on 9/11/2001, the Company subsequently notified the Exchange that due to a typo error made by the Company in the remark (4), the figure in respect of the number of shares allotted by Lai Fung is mistakenly typed as 2,037,713,337. The actual figure should be 2,023,713,337. 2. BASIS OF PRESENTATION The Group sustained a net loss from ordinary activities attributable to shareholders of HK$1,196 million for the year ended 31st July, 2001 (2000: HK$2,758 million). The loss was mainly resulted from the effects of the non-recurring transactions in respect of deemed disposal of its interests in Lai Fung Holdings Limited ("Lai Fung") and eSun Holdings Limited ("eSun"). As at the balance sheet date, the Group had consolidated net current liabilities of HK$975 million (2000: HK$1,589 million), an improvement of HK$614 million, and consolidated net assets of HK$3,866 million (2000: HK$6,382 million). As reported in the Group's last annual report, in the meeting of the holders of the US$115 million Exchangeable Bonds due in 2004 (the "Exchangeable Bondholders") and the holders of the US$150 million Convertible Bonds due in 2002 (the "Convertible Bondholders") held on 4th August, 2000, the Group successfully obtained the agreement of the Exchangeable Bondholders and the Convertible Bondholders to the restructuring proposal put forward by the Group which included the deferral of the repayment of the bonds' principal to 31st December, 2002. In addition, during the prior year, the Group successfully rescheduled the principal repayments of the borrowings from its principal lending banks under their bilateral facilities. The Group's bond payables and other borrowings have been classified in accordance with the terms in the respective loan agreements and trust deeds prevailing as at 31st July, 2001. During the year, the Group continued to implement an asset disposal programme (the "Disposal Programme"). The Group disposed of certain properties and equity interests in certain associates which generated a total cash inflow of HK$586 million which was used for the repayment of bank borrowings and as working capital of the Group. The Group will continue to implement the Disposal Programme, as appropriate, in the coming year. On the basis that the Disposal Programme continues to be successfully implemented, the directors of the Company consider that the Group will have sufficient working capital to finance its operations in the foreseeable future. Accordingly, the directors of the Company are satisfied that it is appropriate to prepare the financial statements on a going concern basis. If the going concern basis is not appropriate, adjustments would have to be made to restate the values of the assets to their recoverable amounts, to provide for any further liabilities which might arise and to reclassify non-current assets and liabilities as current assets and liabilities, respectively. 3. LOSS PER SHARE The calculation of basic loss per share is based on the net loss from ordinary activities attributable to shareholders for the year of HK$1,196,182,000 (2000: HK$2,757,982,000) and the weighted average number of 3,746,002,000 (2000: 3,588,502,000) ordinary shares in issue during the year. The diluted loss per share for the current and prior years has not been presented because any potential ordinary shares of the Group outstanding during these years had an anti-dilutive effect on the basic loss per share for these years. 4. LOSS ON DEEMED DISPOSAL OF SUBSIDIARIES On 28th November, 2000, Lai Fung Overseas Finance Limited ("LFO"), a wholly-owned subsidiary of Lai Fung, elected to mandatorily convert all the outstanding Lai Fung convertible bonds (the "Lai Fung Convertible Bonds") of US$120,385,000 into ordinary shares of Lai Fung Holdings Company (the "Lai Fung Shares") at a conversion price of HK$0.464 per share. On 10th January, 2001, a total of 2,023,713,337 new Lai Fung Shares were allotted and issued pursuant to the mandatory conversion. As a result of the allotment and issue of such new Lai Fung Shares to the bondholders, the Company's equity interest in Lai Fung fell, by way of dilution, from 74.49% of the issued share capital of Lai Fung before the mandatory conversion to 25.40% of the issued share capital of Lai Fung as enlarged by the issue of the new Lai Fung Shares. On 9th February, 2001, a conditional sale and purchase agreement (the "Agreement") was entered into between Autumn Gold Limited ("Autumn Gold"), a wholly-owned subsidiary of eSun, and Mr. Chan Chee Kheong ("Mr. Chan"). Pursuant to the Agreement, Autumn Gold acquired from Mr. Chan 5 existing shares of HK$1.00 each of The Artiste Campus International Limited (formerly known as Union Holding Limited), a company incorporated in Hong Kong with limited liability, for a total consideration of HK$7,600,005, comprising (i) HK$2,000,005 in cash, and (ii) the balance of HK$5,600,000 by the allotment and issue of 5,600,000 new shares of HK$0.50 each in the share capital of eSun (the "Consideration Shares") at an issue price of HK$1.00 per share. The allotment of the Consideration Shares to Mr. Chan was completed on 4th April, 2001. Immediately prior to the allotment and issue of the Consideration Shares, the Company held 285,512,791 shares in eSun out of a total of 565,584,927 shares in issue, which represented approximately 50.48% of the then existing issued share capital of eSun. As a result of this transaction, the Company's shareholding percentage in eSun was reduced, by way of dilution, to 49.99%. As a result of the above transactions, Lai Fung and eSun ceased to be subsidiaries of the Company, and their results ceased to be consolidated in the group's financial statements of the Company immediately following the respective allotment and issue of the new shares of Lai Fung and eSun. A loss on deemed disposals of interests in Lai Fung and eSun of approximately HK$1,044,781,000 was charged to the profit and loss account. In addition, a sum of approximately HK$1,200,542,000 was released from various reserves upon the deemed disposals of interests in Lai Fung and eSun. For more details, please refer to the press announcement today.