ANNOUNCEMENT OF RESULTS
FOR THE YEAR ENDED 31 DECEMBER 1999
HIGHLIGHTS
PROSPECTS |
1999 RESULTS
Year ended 31 December
1999 1998
HK$'000 HK$'000
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Turnover 16,297,501 14,312,618
Cost of sales (14,585,881) (12,891,709)
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Gross profit 1,711,620 1,420,909
Other revenues 98,836 104,743
Other income 48,225 35,191
Selling expenses (354,124) (287,524)
Administrative expenses (867,842) (747,725)
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Operating profit 636,715 525,594
Finance costs (32,243) (61,346)
Share of profits less losses of
associated companies 9,389 6,850
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Profit before taxation 613,861 471,098
Taxation (note 1)
Company and subsidiary companies (35,783) (13,958)
Associated companies (855) (2,467)
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Profit after taxation 577,223 454,673
Interests of minority shareholders (2,585) 495
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Profit attributable to shareholders 574,638 455,168
Dividends (441,005) (363,018)
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Retained profit for the year 133,633 92,150
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Basic earnings per share (note 2(a)) 44.7 cents 36.0 cents
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Notes:
1. Hong Kong profits tax is calculated at the rate of 16% (1998: 16%) 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.
2. Earnings per share
(a) The calculation of basic earnings per share is based on the profit after taxation and minority interests of HK$574,638,000 (1998: HK$455,168,000) and on the weighted average number of 1,284,448,000 (1998: 1,263,486,000) shares in issue during the year, as adjusted for the effect of share subdivision (the "Share Subdivision") on 13 October 1999, under which each of the existing issued and unissued shares of HK$0.1 each were subdivided into two shares of HK$0.05 each.
(b) In the event that share options outstanding at 31 December 1999 were exercised in full, the diluted earnings per share would not be significantly different from the earnings per share as disclosed in the results above.
3. Movement of reserves
Share Capital Exchange Revaluation Retained
premium reserve reserve reserve profits
HK$'000 HK$'000 HK$'000 HK$'000 HK$'000
Balance at 1 January 1999 652,902 2,695 (40,809) 119,990 295,517
Share premium arising from
the issue of new shares
pursuant to the exercise
of share options 78,054 - - - -
Transfer from
retained profits - 2,264 - - (2,264)
Transfer to retained profits - - 1,371 - (1,371)
Exchange adjustment on
translation of the accounts
of overseas subsidiaries
and associated companies - - 1,919 - -
Goodwill on acquisition of
subsidiaries/associated
company/ business written off - - - (119,990) (373,798)
Profit for the year - - - - 574,638
Dividends for the year - - - - (441,005)
Additional final dividend
for previous year - - - - (767)
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Balance at 31 December 1999 730,956 4,959 (37,519) - 50,950
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FINAL DIVIDEND
The Board of Directors recommended to pay to the shareholders a final dividend of 25 cents (1998: 21 cents) per share for the year ended 31 December 1999 absorbing a total of HK$324,650,000 (1998: HK$268,024,000). An interim dividend of 9 cents (1998: 7.5 cents) per share, as adjusted for the effect of the Share Subdivision, were paid by the Company on 10 September 1999.
CLOSURE OF REGISTER OF MEMBERS
The Register of Members will be closed from 12 May 2000 to 18 May 2000, 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 2401 Prince's Building, Central, Hong Kong not later than 4:00 p.m. on 10 May 2000. Dividend warrants will be despatched immediately after the holding of the Annual General Meeting on 18 May 2000 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. The Group's Corporate Governance Division, under the supervision of the Chief Compliance Officer, systematically reviews these controls, evaluates their adequacy and compliance and reports thereon.
AUDIT COMMITTEE
An Audit Committee has been established since 1998 to act in an advisory capacity and make recommendations to the Board. Its members currently include:
Dr Victor Fung Kwok King - Chairman
Mr Paul Edward Selway-Swift
Mr Allan Wong Chi Yun
Professor Franklin Warren McFarlan
Mr Leslie Boyd
Mr James Siu Kai Lau (Chief Compliance Officer) - Secretary
The Audit Committee met four times during the past 12 months to review with management the accounting principles and practices adopted by the Group and to discuss auditing, internal control and financial reporting matters in conjunction with the Company's auditors.
COMPENSATION COMMITTEE
A Compensation Committee has been formed since 1993 to approve senior executive remuneration including annual allocation of share options to employees under the Company's Employee Share Option Scheme. Its current members include Mr Allan Wong Chi Yun, an independent non-executive Director, Dr Victor Fung Kwok King, the Group's non-executive Chairman and Mr William Fung Kwok Lun, the Group's Managing Director.
YEAR 2000 COMPLIANCE
Details of the Group's assessment of the Year 2000 problem and progress of the compliance project team have been disclosed in the interim report dated 18 August 1999. The total costs of the Year 2000 project amounted to approximately HK$5 million. The Group has no further commitments in respect of the Year 2000 project. To date, the Group has not experienced any Year 2000 non-compliance issue.
PURCHASE, SALE OR REDEMPTION OF THE COMPANY'S LISTED SECURITIES
The Company has not redeemed any of its listed securities during the year. Neither the Company nor any of its subsidiaries has purchased or sold any of the Company's listed securities during the year.
By Order of the Board
Victor Fung Kwok King
Chairman
Hong Kong, 27 March 2000
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