Melbourne Enterprises Limited — Earnings Release 2007

Dec 19, 2007

MELBOURNE ENTERPRISES LIMITED

(Incorporated in Hong Kong with limited liability) (Stock Code: 158)

ANNUAL RESULTS ANNOUNCEMENT 2006/2007

The Board of Directors is pleased to announce the consolidated results of the Group for the year ended 30 September 2007 as follows:

CONSOLIDATED INCOME STATEMENT

For the year ended 30 September 2007

CONSOLIDATED BALANCE SHEET

At 30 September 2007

						2007		2006
				Note		HK$'000		HK$'000

1. PRINCIPAL ACCOUNTING POLICIES

The financial statements have been prepared in accordance with Hong Kong Financial Reporting Standards (“HKFRSs”) issued by the Hong Kong Institute of Certified Public Accountants (“HKICPA”), and accounting principles generally accepted in Hong Kong. They have been prepared under the historical cost convention, as modified by the revaluation of investment properties.

The HKICPA has issued a number of amendments to HKFRSs that are effective for accounting periods beginning on or after 1 January 2006. The adoption of the revised HKFRSs has no material impact on these financial statements.

The Group has not applied the new HKFRSs that have been issued but are not yet effective for the accounting period of these financial statements. The Group has already commenced an assessment of the impact of these new HKFRSs but is not yet in a position to state whether these new HKFRSs would have a significant impact on its results of operations and financial position.

2. SEGMENT INFORMATION

Revenue (representing turnover) represents gross rental and service income from investment properties.

As the Group's principal business is property investment in Hong Kong, an analysis of the Group's revenue and profit by business and geographical segments has not been presented.

3. OPERATING PROFIT

4. TAXATION

Hong Kong profits tax has been provided at the rate of 17.5% (2006: 17.5%) on the estimated assessable profits for the year.

5. DIVIDENDS

At a meeting held on 19 December 2007, the Directors recommended a final dividend of HK$1.70 per share. This proposed dividend will be accounted for as an appropriation of the retained profits for the year ending 30 September 2008.

EARNINGS PER SHARE

The calculation of basic earnings per share is based on the profit attributable to equity holders of HK$433,119,000 (2006: HK$292,952,000) and the 25,000,000 shares in issue throughout the two years ended 30 September 2007 and 2006.

Diluted earnings per share equal basic earnings per share because there were no potential dilutive shares outstanding during the year.

INVESTMENT PROPERTIES, PROPERTY, PLANT AND EQUIPMENT

The investment properties are held under long leases (over 50 years) in Hong Kong and were revalued on 30 September 2007 on an open market value basis by CS Surveyors Limited.

1. DEBTORS, DEPOSITS AND PREPAYMENTS

Trade debtors represent rental income which is due one month in advance.

9. CREDITORS, ACCRUALS AND DEPOSITS

10. Comparative figures

Certain comparative figures have been reclassified to conform with current year's presentation.

BUSINESS REVIEW

Group Results

Net profit for the year amounted to HK$433.1 million (2006: HK$293.0 million). Turnover for the year amounted to HK$104.5 million, representing an increase of 19% as compared to last year. The increase in net profit in 2007 as a result of the fair value uplift of investment properties amounted to HK$442.5 million, which was partially offset by its related deferred tax effect of HK$77.4 million. The net profit for the year was also positively impacted by the HK$5.6 million write-back of provision against the Group's advances to Billion Park Investment Limited, an investee company.

Significant Investments

The Group's investment properties at Melbourne Plaza and Kimley Commercial Building in Central were approximately 95% and 91% let respectively.

Liquidity and Financial Resources

Basically, the Group's working capital requirement was financed by its rental income. As at 30 September 2007, the Group had cash and bank balances totalling HK$84.5 million (2006: HK$61.8 million). During the year, the Group did not need any borrowing or overdraft facilities.

Employees and Remuneration Policies

The Group employs a total of 18 employees. The Group recognises the importance of the strength of its human resources for its success. Remuneration for employees are maintained at competitive levels and promotion and salary increments are assessed on a performance basis.

Material Acquisitions, Disposals and Future Developments

There were no acquisitions or disposals of subsidiaries and associated companies during the year. Currently, there are no plans for material capital investments or future developments.

CLOSURE OF REGISTER OF MEMBERS

The register of members will be closed from 25 January to 30 January 2008, both days inclusive, during which period no transfer of shares will be registered. To ensure their entitlement to the final dividend, shareholders are reminded to lodge their transfers not later than 4:00 p.m. on Thursday, 24 January 2008 with Computershare Hong Kong Investor Services Limited, Rooms 1712-6, 17/F., Hopewell Centre, 183 Queen’s Road East, Hong Kong.

PURCHASE, SALE OR REDEMPTION OF SHARES

The Company has not redeemed any of its shares during the year. Neither the Company nor its subsidiary company has purchased or sold any of the Company's shares during the year.

AUDIT COMMITTEE

The Audit Committee was established in accordance with the requirements of the Rules Governing the Listing of Securities on The Stock Exchange of Hong Kong Limited (the "Listing Rules") for the purposes of reviewing and providing supervision over the Group's financial reporting process and internal controls. The Audit Committee consists of 3 independent non-executive directors of the Company.

The Audit Committee has reviewed the annual results for the year ended 30 September 2007 and has discussed the financial related matters with management. The figures in respect of this preliminary announcement of the Group’s results for the year ended 30 September 2007 have been agreed by the Company's joint auditors, PricewaterhouseCoopers and H. C. Watt & Company Limited, to the amounts set out in the Group's draft consolidated financial statements for the year. The work performed by PricewaterhouseCoopers and H. C. Watt & Company Limited in this respect did not constitute an assurance engagement in accordance with Hong Kong Standards on Auditing, Hong Kong Standards on Review Engagements or Hong Kong Standards on Assurance Engagements issued by the Hong Kong Institute of Certified Public Accountants and consequently no assurance has been expressed by PricewaterhouseCoopers and H. C. Watt & Company Limited on the preliminary announcement.

CODE OF CORPORATE GOVERNANCE PRACTICES

The Company has complied with the Code of Corporate Governance Practices as set out in Appendix 14 of the Listing Rules throughout the year except that non-executive directors are not appointed for a specific term as they are subject to retirement by rotation and re-election at annual general meeting in accordance with the Articles of Association of the Company.

PUBLICATION OF ANNUAL REPORT ON THE INTERNET

This annual results announcement is published on the Group's website at www.irasia.com and the Stock Exchange’s website at www.hkex.com.hk and the annual report will be available from both websites on or before 31 January 2008.

Dato' Dr. Cheng Yu Tung

Chairman

Hong Kong, 19 December 2007

As at the date of this announcement, the Board comprises Dato' Dr. CHENG Yu Tung, Mr. CHUNG Ming Fai, Mr. CHUNG Yin Shu, Frederick who are Executive Directors; Mr. CHUNG Wai Shu, Robert who is a Non-executive Director; and Mr. YUEN Pak Yiu, Philip, Dr. FONG Yun Wah, SBS, JP, Mr. LO Pak Shiu and Mr. YUEN Sik Ming, Patrick who are Independent Non-executive Directors.