HIGHLIGHTS * Group Turnover +7.2% to HK$14.3 billion * Group Profit +21.3% to HK$455 million * Earnings Per Share +19.8% to 72 cents * Dividend Per Share (full year)      (Final 42 cents and      Interim 15 cents) +29.5% to 57 cents PROSPECTS * The Group has achieved its target of doubling profits from HK$225 million in 1995 to     HK$450 million in 1998 over the course of its last 3 year plan (1996-1998) * The next 3 year plan spans the millennium (1999-2001) * Economic conditions in our major markets of North America and Western Europe and     in our major sourcing base of Asia favour a continuation of our growth record * The Group has emerged from the current economic crisis in Asia stronger than at any     time in its history

1998 RESULTS Year ended 31 December 1998 1997 HK$'000 HK$'000 ---------- ---------- Turnover 14,312,618 13,345,722 ========== ========== Operating profit 464,248 412,889 Exceptional item (note 1) - (20,098) ---------- ---------- 464,248 392,791 Share of profits less losses of associated companies 6,850 6,666 ---------- ---------- Profit before taxation 471,098 399,457 Taxation (note 2) Company and subsidiary companies (13,958) (22,209) Associated companies (2,467) (3,117) ---------- ---------- Profit after taxation 454,673 374,131 Interests of minority shareholders 495 974 ---------- ---------- Profit attributable to shareholders 455,168 375,105 Dividends (363,018) (276,412) ---------- ---------- Retained profit for the year 92,150 98,693 ========== ========== Earnings per share Basic (note 3(a)) 72.0 cents 60.1 cents Excluding exceptional item (note 3(b)) 72.0 cents 63.3 cents

Notes:

1. Exceptional item

                                                   Year ended 31 December
                                                       1998          1997
                                                    HK$'000       HK$'000

Provision in respect of a pending litigation              -       (20,098)
                                                  =========     =========

2. Hong Kong profits tax is calculated at the rate of 16% (1997: 16.5%) on the estimated assessable profit for the year. Overseas taxation is calculated on the estimated assessable profit for the year at the rates of taxation prevailing in the countries in which the Group operates.

3. Earnings per share

(a) The calculation of basic earnings per share is based on the profit after taxation and minority interests of HK$455,168,000 (1997: HK$375,105,000) and on the weighted average number of 631,743,000 (1997: 624,247,000) shares in issue during the year.

(b) The calculation of earnings (excluding exceptional item) per share is based on the profit after taxation and minority interests of HK$455,168,000 (1997: HK$375,105,000) less exceptional loss of HK$Nil (1997: HK$20,098,000), amounting to HK$455,168,000 (1997: HK$395,203,000), and on the weighted average number of 631,743,000 (1997: 624,247,000) shares in issue during the year.

The Directors consider that the additional disclosure of earnings (excluding exceptional item) per share allows the operating results of the Group to be more comparable.

(c) In the event that share options outstanding at 31 December 1998 were exercised in full, the diluted earnings per share calculated on the bases in notes (a) and (b) above would not be significantly different from the earnings per share as disclosed respectively in the results above.

FINAL DIVIDEND

The Board of Directors recommended to pay to the shareholders a final dividend of 42 cents (1997: 31 cents) per share for the year ended 31 December 1998 absorbing a total of HK$268,024,000 (1997: HK$195,028,000). An interim dividend of 15 cents (1997: 13 cents) per share were paid by the Company on 24 September 1998.

CLOSURE OF REGISTER OF MEMBERS

The Register of Members will be closed from 12 May 1999 to 18 May 1999, both days inclusive, during which period no transfer of shares will be effected. In order to qualify for the final dividend, all transfers accompanied by the relevant share certificates must be lodged with the Company's Hong Kong branch registrars, Abacus Share Registrars Limited at Caroline Centre, 10th Floor, 28 Yun Ping Road, Causeway Bay, Hong Kong not later than 4:00 p.m. on 11 May 1999. Dividend warrants will be despatched immediately after the holding of the Annual General Meeting on 18 May 1999 subject to shareholders' approval of payment of the final dividend.

CORPORATE GOVERNANCE

The Board of Directors is committed to principles of corporate governance consistent with prudent enhancement and management of shareholder value. The accounting systems and internal controls of the Group are designed to provide reasonable assurance that assets are safeguarded against losses from unauthorized use or disposition, that transactions are executed in accordance with management's authorization and that the financial records are reliable for preparing financial statements and maintaining accountability for assets. Qualified personnel throughout the Group maintain and monitor these internal accounting controls on an ongoing basis, and the Group's Corporate Governance Division systematically reviews these controls, evaluates their adequacy and compliance and reports thereon.

In addition, the Board has established an Audit Committee during the year to review regularly with management the accounting principles and practices adopted by the Group and to discuss auditing, internal control and financial reporting matters. The Audit Committee is chaired by the Group's non-executive Chairman and includes two independent non-executive directors and one non-executive director.

YEAR 2000 COMPLIANCE

A task force has been formed to deal with the Year 2000 problem and to ensure Year 2000 compliance. The Group has been installing or replacing with Year 2000 compliant software and hardware elements within its systems. To date 95% of the Group's critical systems are Year 2000 compliant. The Group expects full compliance by mid-1999 within its budget of HK$5 million. As at 31 December 1998, the actual capital investment with respect to Year 2000 compliance was about HK$4 million.

The Group has also developed contingency plans including the provision of back-up systems and equipment which are Year 2000 compliant.

The Group has sent out questionnaires to all the suppliers to promote the Year 2000 awareness and compliance. The Group and its overseas customers may adopt a policy of discrimination against non Year 2000 compliant suppliers.

PURCHASE, SALE AND REDEMPTION OF THE COMPANY'S LISTED SECURITIES

During the year, neither the Company nor any of its subsidiaries has purchased, sold or redeemed any of the Company's listed securities.

By Order of the Board
Victor Fung Kwok King
Chairman

Hong Kong, 29 March 1999

© Copyright 1996-2008 irasia.com Ltd. All rights reserved. Tel: (852) 2831-9792.

DISCLAIMER: irasia.com Ltd makes no guarantee as to the accuracy or completeness of any information provided on this website. Under no circumstances shall irasia.com Ltd be liable for damages resulting from the use of the information provided on this website. TRADEMARK & COPYRIGHT: All intellectual property rights subsisting in the contents of this website belong to irasia.com Ltd or have been lawfully licensed to irasia.com Ltd for use on this website. All rights under applicable laws are hereby reserved. Reproduction of this website in whole or in part without the express written permission of irasia.com Ltd is strictly prohibited. TERMS OF USE: Please read the Terms of Use governing the use of our website.