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Swire Pacific Limited

NOTES TO THE ACCOUNTS
Notes: [11] [12] [13] [14] [15] [16] [17] [18] [19] [20]

12. Earnings per share

Earnings per share are calculated by dividing the profit attributable to shareholders of HK$7,654 million (1995: HK$6,454 million) by the weighted average number of 970,009,385 'A' shares and 3,076,706,271 'B' shares in issue during the year (1995: 970,070,240 'A' shares and 3,078,069,476 'B' shares). Earnings per share excluding exceptional items of associated companies are calculated in the same way, except that the profit attributable to shareholders has been adjusted for exceptional items of associated companies as follows:

(a) Investment properties, whether completed or in the course of development, were valued on the basis of open market value at 31st December 1996 by professionally qualified executives of Swire Properties Limited who are members of the Royal Institute of Chartered Surveyors. This valuation has been incorporated in the account as stated in principal accounting policy note 4.

The Company's properties, with a total net book value of HK$610 million (1995: HK$507 million), include long-term leasehold land in Hong Kong held at a cost of HK$355 million (1995: HK$106 million).

(d) Under the terms of the Sino-British Joint Declaration on the future of Hong Kong, holders of leases, other than leases for special purposes, have the right to extend their leases up to 2047 without payment of an additional premium and it is expected that the Company and its subsidiary companies will exercise those rights. Accordingly, in relation to non-investment properties, land held on such leases is included in land held on long-term leases. Long-term leasehold land, which was previously not depreciated, has been depreciated over the remaining period of the relevant lease term on a straight-line basis with effect from 1st January 1996 to comply with the requirements of HK SSAP17. The effect of this revision on the result for the year was to increase depreciation charge by HK$11 million.

(a) The market value of the shares in the listed associated companies at 31st December 1996 was HK$19,582 million.

(b) As set out in principal accounting policy no. 3 (v), natural currency hedges have been established within Cathay Pacific and unrealised exchange differences are deferred in an exchange fluctuation account in Cathay Pacific's balance sheet. When such exchange differences are realised they will be matched with the Hong Kong dollar equivalent of foreign currency net operating surpluses. Had HK SSAP11 been adopted, the profit attributable to shareholders of the Swire Pacific Group for 1996 would have been increased by HK$511 million (1995: HK$458 million) and Group reserves at 31st December 1996 would have been reduced by HK$352 million (1995: HK$962 million).

(c) The principal associated companies of Swire Pacific Limited, which materially affected the results or assets of the Group, are shown on pages 93 to 104 of the accounts.

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