IRC Limited — Earnings Release 2002

Nov 8, 2002

Listed Company Information

LAI SUN DEV<00488> - Results Announcement (Summary) Lai Sun Development Company Limited announced on 8/11/2002: (stock code: 488) Year end date: 31/7/2002 Currency: HK$ Auditors' Report: Qualified Review of Interim Report by: N/A (Audited) (Audited) Last Current Corresponding Period Period from 1/8/2001 from 1/8/2000 to 31/7/2002 to 31/7/2001 Turnover : 934,720,000 1,899,862,000 Profit/(Loss) from Operations : 10,621,000 (267,910,000) Finance cost : (567,748,000) (638,483,000) Share of Profit/(Loss) of Associates : (1,324,063,000) (249,129,000) Share of Profit/(Loss) of Jointly Controlled Entities : - - Profit/(Loss) after Tax & MI : (1,941,508,000) (1,196,182,000) % Change over Last Period : N/A EPS/(LPS)-Basic : (0.52) (0.32) -Diluted : N/A N/A Extraordinary (ETD) Gain/(Loss) : - - Profit/(Loss) after ETD Items : (1,941,508,000) (1,196,182,000) 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 COMPARATIVE AMOUNTS Due to the adoption of certain new and revised SSAPs and Interpretations during the current year, the accounting treatment and presentation of certain items and balances in the financial statements have been revised to comply with the new requirements. Accordingly, a prior year adjustment has been made and certain comparative amounts have been reclassified to conform with the current year's presentation. 2 BASIS OF PRESENTATION The Group sustained a net loss from ordinary activities attributable to shareholders of HK$1,942 million for the year ended 31st July, 2002 (2001: HK$1,196 million). The loss principally arose from non-recurring transactions in respect of the disposals of certain subsidiaries and associates, and was compounded by impairment provisions in respect of its interests in certain properties under development, unlisted investments, associates and goodwill related thereto. At the balance sheet date, the Group had consolidated net current liabilities of HK$6,193 million (2001: HK$957 million) and consolidated net assets of HK$766 million (2001: HK$3,866 million). Included in such net current liabilities were the outstanding balance of the US$115 million exchangeable bonds (the "Exchangeable Bonds") of HK$740 million, the outstanding balance of the US$150 million convertible guaranteed bonds (the "Convertible Bonds") of HK$965 million, the debt of HK$1,500 million (the "Debt") owed by the Group to Golden Pool Enterprises Limited ("GPEL"), a wholly-owned subsidiary of eSun Holdings Limited ("eSun"), which in turn is an associate of the Group and bank and other borrowings of HK$2,445 million, all of which are scheduled to mature within the next 12 months from the balance sheet date. Over the past two years, the Group has successfully monitored an orderly disposal of assets, including properties and other investments, to generate positive cash flows for the repayment of bank and other borrowings and to provide sufficient working capital for the Group's operations. The Group will continue to implement appropriate asset disposal programmes to further reduce its overall level of indebtedness. During the year, the Group has been working closely with its legal and financial advisors in formulating a plan for the repayment and/or refinancing of its outstanding indebtedness. Recently, the Group initiated discussions with the Exchangeable Bondholders, Convertible Bondholders and eSun to explore the terms of a new debt restructuring plan (the "New Restructuring Plan"). The Group has also initiated negotiations with its principal banks with a view to arranging a rescheduling and/or refinancing of its bank borrowings (the "Refinancing Arrangements"). As of the date of approval of these financial statements, no fixed terms or binding agreements in respect of the New Restructuring Plan or the Refinancing Arrangements had been agreed upon or executed. The directors of the Company believe that the Group will be able to secure the agreement of the Exchangeable Bondholders, Convertible Bondholders, eSun and the banks to the New Restructuring Plan and the Refinancing Arrangements and, at the same time, continue the successful orderly disposal of the necessary Group assets to generate additional positive cash flows. On this basis, the directors 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 SHARE OF PROFIT/(LOSS) OF ASSOCIATES 2002 2001 HK$ HK$ Share of profits and losses of associates (232,507,000) (174,549,000) Amortisation of goodwill on acquisition of associates (6,636,000) (578,000) Impairment in value of goodwill of an associate (228,258,000) - Impairment in value of associates (318,000,000) (74,002,000) Loss on disposal of associates (538,662,000) - ------------ ---------- (1,324,063,000)(249,129,000) ============== ============ 4 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$1,941,508,000 (2001:HK$1,196,182,000) and the weighted average number of 3,746,002,000 (2001: 3,746,002,000) ordinary shares in issue during the year. Diluted loss per share amounts for the years ended 31st July, 2002 and 2001 have not been disclosed, as the potential ordinary shares of the Group outstanding during these years had an anti-dilutive effect on the basic loss per share for these years.