Weichai Power Co., Ltd. — Earnings Release 2002

Sep 27, 2002

Listed Company Information

V.S. INT'L<01002> - Results Announcement (Summary) V.S. International Group Limited announced on 27/9/2002: (stock code: 1002) Year end date: 31/7/2002 Currency: HKD Auditors' Report: Unqualified 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 ('000) ('000) Turnover : 932,630 639,182 Profit/(Loss) from Operations : 77,677 53,268 Finance cost : (12,993) (11,626) Share of Profit/(Loss) of Associates : N/A N/A Share of Profit/(Loss) of Jointly Controlled Entities : (1,107) N/A Profit/(Loss) after Tax & MI : 65,791 41,642 % Change over Last Period : +58% EPS/(LPS)-Basic : 9.21 cents 6.72 cents -Diluted : N/A N/A Extraordinary (ETD) Gain/(Loss) : N/A N/A Profit/(Loss) after ETD Items : 65,791 41,642 Final Dividend per Share : 0.5 cent N/A (Specify if with other options) : N/A N/A B/C Dates for Final Dividend : To be announced Payable Date : To be announced B/C Dates for Annual General Meeting : To be announced Other Distribution for Current Period : N/A B/C Dates for Other Distribution : N/A Remarks: (1) Date of Listing The Company is listed in the Main Board of Hong Kong Stock Exchange on 8 February, 2002. (2) Basis of presentation The Company was incorporated in the Cayman Islands on 9 July, 2001 as an exempted company with limited liability under the Companies Law, Cap 22 (Law 3 of 1961, as consolidated and revised) of the Cayman Islands. Pursuant to a reorganisation (the "Reorganisation") to rationalise the group structure in preparation for the listing of the Company's shares on the Main Board of The Stock Exchange of Hong Kong Limited (the "Stock Exchange"), the Company became the holding company of the subsidiaries now comprising the Group on 20 January, 2002. Further details of the Reorganisation are set forth in the Company's prospectus dated 28 January, 2002 (the "Prospectus"). The Group resulting from the Reorganisation has been regarded as a continuing group. Accordingly the consolidated financial results have been prepared on the basis of merger accounting in accordance with Statement of Standard Accounting Practice ("SSAP") No. 2.127 "Accounting for Group Reconstructions", under which the Company was the holding company of the Group for both periods presented, rather than from 20 January, 2002. Under these circumstances, the results of the Group for the year ended 31 July, 2002 and 2001 include the results of the Group with effect from 1 August, 2000 or since their respective dates of incorporation/establishment, whichever is a shorter period. In the opinion of the Directors, the resulting consolidated financial results give a more meaningful view of the Group as a whole. These financial results have been prepared in accordance with all applicable Statements of Standard Accounting Practice and Interpretations issued by the Hong Kong Society of Accountants, accounting principles generally accepted in Hong Kong and the disclosure requirements of the Hong Kong Companies Ordinance. (3) Analysis of Turnover and Profit from Continuing Operations The Group is principally engaged in the manufacturing and sales of plastic moulded products and parts, assembling of electronic products and mould design and fabrication. The Group comprises the following main business segments:- Plastic injection and moulding : manufacture and sales of plastic moulded products and parts Mould design and fabrication : manufacture and sales of plastic injection moulds Assembling of electronic products : assembling and sales of electronic products 2002 Plastic Mould design Assembling Unallocated Combined injection and of electronic and fabrication products moulding HK$'000 HK$'000 HK$'000 HK$'000 HK$'000 Turnover from external customers 352,151 35,269 545,210 - 932,630 ================================================================ Segment result 76,613 8,222 35,499 (42,657) 77,677 Net finance costs (12,993) Minority interests 1,107 -------- Profit attributable to shareholders 65,791 ======== Depreciation for the year 19,946 2,874 2,635 6,088 31,543 Significant non-cash expenses (other than depreciation) 327 - 179 - 506 2001 Plastic Mould design Assembling Unallocated Combined injection and of electronic and fabrication products moulding HK$'000 HK$'000 HK$'000 HK$'000 HK$'000 Turnover from external customers 310,590 38,278 290,314 - 639,182 ================================================================ Segment result 68,532 5,546 15,342 (36,152) 53,268 Net finance costs (11,626) Minority interests - -------- Profit attributable to shareholders 41,642 ======== Depreciation for the year 13,764 2,793 2,650 2,774 21,981 Significant non-cash expenses (other than depreciation) 3,461 534 519 - 4,514 (4) Profit from Ordinary Activities before Taxation Profit from ordinary activities before taxation is arrived at after charging/(crediting):- 2002 2001 HK$'000 HK$'000 (a) Net finance costs: Interest on bank advances and other borrowings repayable within five years 11,007 10,546 Interest on other loan 2,502 3,452 Finance charges on obligations under finance leases 503 444 -------- -------- Total borrowing costs 14,012 14,442 Less: Borrowing costs capitalised as construction in progress* (1,196) - -------- -------- 12,816 14,442 Interest income (2,977) (3,125) Exchange losses/(gains) 119 (826) Other charges 3,035 1,135 ------- ------- 12,993 11,626 ========= ========= * The borrowing costs have been capitalised at an average rate of 5.1 per cent. per annum for construction in progress 2002 2001 HK$'000 HK$'000 (b) Other items: Cost of inventories# 787,380 530,889 Auditors' remuneration 1,433 200 Provision for doubtful debts 506 4,514 Processing fees# 26,158 30,486 Depreciation# - owned assets 30,794 21,564 - assets held under finance leases 749 417 Operating lease charges# 10,923 8,404 ========= ========= # Cost of inventories includes HK$74,970,000 (2001: HK$59,778,000) relating to staff costs, depreciation expenses, processing fee and operating lease charges which amount is also included in the respective total amounts disclosed separately above for each of these types of expenses. (5) Personnel Expenses 2002 2001 HK$'000 HK$'000 Salaries, wages and allowances 38,115 26,032 Contributions to retirement benefit schemes 1,436 103 -------- ------- 39,551 26,135 ======== ======== Average number of employees during the year 2,039 906 ======== ======== Personnel expenses include directors' remuneration totalling HK7,969,000 (2001: HK$8,800,000). A subsidiary of the Group has entered into processing arrangements with independent third parties (the "Providers") in respect of certain production facilities in Shenzhen, the PRC. Pursuant to the relevant processing agreements, labour required for production would be provided by the Providers, who are responsible for the labour's participation in retirement benefit schemes pursuant to the relevant rules and regulations in the PRC. In return, a processing charge calculated based on the number of labour engaged in the production is payable to the Providers. The Group has no obligations to pay any retirement benefits of existing and retired labour provided by the Providers. Other subsidiaries of the Group operating in the PRC participate in a government pension scheme whereby the subsidiaries are required to pay annual contributions at the rates of 8% to 25% of the standard wages determined by the relevant authorities in the PRC. Under the scheme, retirement benefits of existing and retired employees are payable by the relevant authorities and the Group has no further obligations beyond the annual contributions. Contributions to Mandatory Provident Funds are required under the Hong Kong Mandatory Provident Fund Schemes Ordinance. The Group and its employees in Hong Kong make monthly mandatory contributions to the Mandatory Provident Fund Scheme at 5 per cent. of the employees' relevant income as defined under the Mandatory Provident Fund legislation. The Contributions from employees and employer are subject to a cap of monthly relevant income of HK$20,000. The Group does not operate or participate in any other scheme for retirement benefits provided to the Group's employees during the year. (6) Earnings per share (a) Basic earnings per share The calculation of basic earnings per share is based on the profit attributable to shareholders of HK$65,791,000 (2001: HK$41,642,000) and the weighted average number of the 714,301,370 (2001: 620,000,000) shares in issue during the year, being the shares that would have been in issue throughout the year on the assumption that the Reorganisation as set forth in Appendix V to the Prospectus was complete on 1 August, 2000. (b) Diluted earnings per share There were no potential dilutive ordinary shares in existence during the years ended 31 July, 2001 and 2002. (7) Changes in accounting policy (a) Land and buildings held for own use In prior years, land and buildings held for own use were stated at cost less accumulated depreciation. With effect from 8 February, 2002, the Group adopted an accounting policy of stating all land and buildings held for own use at revalued amounts, following the listing requirement in respect of property valuation upon the listing the shares of the Company on the Stock Exchange. As a result of the new accounting policy, the Group's profit for the year has been decreased by HK$328,000. The new accounting policy has been adopted prospectively as the financial impact on the financial results for the pervious year is not material. (b) Dividends In prior years, dividends proposed or declared were recognised as a liability in the accounting period to which they related. With effect from 1 January, 2001, in order to comply with SSAP 9 (revised) issued by the Hong Kong Society of Accountants, the Group recognises dividends proposed or declared as a liability in the accounting period in which they are declared by the Directors (in the case of interim dividends) or approved by the shareholders (in the case of final dividends). There is no impact on the Group's profit attributable to shareholders for the periods presented. The new accounting policy has been adopted retrospectively, with the opening balance of retained profits and the comparative information adjusted for the amounts relating to prior periods. (8) Comparative figures Certain comparative figures have been adjusted as a result of changes in accounting policies for land and buildings held for own use and dividends.