Texwinca Holdings Limited
(Incorporated in Bermuda with limited liability)




The Board of Directors of Texwinca Holdings Limited (the "Company") has pleasure in presenting the unaudited consolidated results of the Company and its subsidiaries (the "Group") for the six months ended 30th September, 2000 as follows:

Financial Highlights

TurnoverHK$2,089,975,000 increased by 44%
Net profit from ordinary activities attributable to shareholdersHK$232,261,000 increased by 41%
Earnings per share --- basic (cents)18.2 increased by 41%
Dividend per share (cents)6.0 increased by 100%


                                                        Six months ended 
                                                         30th September,
                                                       2000           1999
                                                (Unaudited)    (Unaudited)
                                    Notes           HK$'000        HK$'000

TURNOVER                              2           2,089,975      1,455,402 
Cost of sales                                    (1,523,390)    (1,042,063)
                                               ------------   ------------
Gross profit                                        566,585        413,339

Other revenue                                         9,910         15,355 
Selling & distribution costs                       (203,110)      (142,979)
Administrative expenses                            (130,048)      (107,631)
Other operating expenses                            (10,047)        (4,553)
                                               ------------   ------------
  ACTIVITIES                                        233,290        173,531

Share of profit of an associate                      25,648         16,885 
Finance costs                                        (3,693)       (12,634)
                                               ------------   ------------
PROFIT BEFORE TAX                                   255,245        177,782

Tax                                   3             (22,984)       (13,017)
                                               ------------   ------------
  INTERESTS                                         232,261        164,765
Minority interests                                      ---            ---
                                               ------------   ------------
  SHAREHOLDERS                                      232,261        164,765

Dividends                                           (76,531)       (38,419)
                                               ------------   ------------
  PERIOD                                            155,730        126,346
                                               ============   ============
Earnings per share (cents)            4               
  Basic                                                18.2           12.9
                                               ============   ============
  Diluted                                              17.9           12.7
                                               ============   ============
Interim dividend per share (cents)                      6.0            3.0
                                               ============   ============


                                                    At 30th             At
                                                 September,    31st March,
                                                       2000           2000
                                                (Unaudited)      (Audited)
                                    Notes           HK$'000        HK$'000
Fixed assets                                        730,066        699,132
Investment properties                                29,750         29,750
Construction in progress                                ---          4,615
Trademarks                                           44,999         45,810
Interest in an associate                             75,742         67,359
Rental deposits                                      45,688         20,206
                                               ------------   ------------
                                                    926,245        866,872
                                               ------------   ------------
Due from an associate                                24,416         31,074
Inventories                                         551,958        445,648
Trade and bills receivables           5             481,655        362,273
Prepayments, deposits and 
  other receivables                                 159,589        100,254
Cash and cash equivalents                           250,555        228,070
                                               ------------   ------------
                                                  1,468,173      1,167,319
                                               ------------   ------------
Trade payables and accrued 
  liabilities                         6             659,106        467,112
Tax payable                                          68,158         52,427
Dividends                                           153,146         76,615
Interest-bearing bank and other 
  borrowings                                         15,386        102,968
                                               ------------   ------------
                                                    895,796        699,122
                                               ------------   ------------
NET CURRENT ASSETS                                  572,377        468,197
                                               ------------   ------------
  CURRENT LIABILITIES                             1,498,622      1,335,069
Interest-bearing bank loans                          17,953          7,393
Deferred tax                                         18,119         16,769
                                               ------------   ------------
                                                     36,072         24,162
MINORITY INTERESTS                                      478            478
                                               ------------   ------------
                                                  1,462,072      1,310,429
                                               ============   ============
Issued capital                                       63,811         64,031
Reserves                              7           1,398,261      1,246,398
                                               ------------   ------------
                                                  1,462,072      1,310,429
                                               ============   ============


1. Basis of preparation

This unaudited interim financial report has been prepared in accordance with the requirements of the Listing Rules of The Stock Exchange of Hong Kong Limited ("SEHK") and is in compliance with Statement of Standard Accounting Practice ("SSAP") 25 "Interim Financial Reporting" issued by the Hong Kong Society of Accountants, except that comparative figures of the condensed consolidated cash flow statement have not been shown as the Company has taken advantage of the transitional provision set out in the Listing Rules. In preparation of this interim financial report, the same principal accounting policies and methods of computations adopted in the most recent published annual financial statements have been followed.

2. Segmental information

As the Group's turnover and profits are mainly derived from activities carried out in the People's Republic of China, including Hong Kong, therefore no analysis by territory is provided.

An analysis of the Group's turnover and contribution to profit from operating activities by principal activity during the period is shown as follows:

                                                   Contribution to profit
                                Turnover         from operating activities 
                            Six months ended          Six months ended
                             30th September,           30th September, 
                               2000         1999         2000         1999
                        (Unaudited)  (Unaudited)  (Unaudited)  (Unaudited) 
                            HK$'000      HK$'000      HK$'000      HK$'000
Production, dyeing and 
  sale of knitted 
  fabric                    991,144      773,167      150,852      145,737 
Production, dyeing and 
  sale of yarn              362,610      230,419       42,360       22,278 
Retailing and 
  distribution of 
  casual apparel and 
  accessories               704,170      432,068       29,469        5,764
Repair and maintenance 
  services for motors 
  and generators, and 
  trading of 
  generators                 15,928       14,413        1,062       (1,731)
Franchise income             16,123        5,335        9,547        1,483
                         ----------   ----------   ----------   ----------
                          2,089,975    1,455,402      233,290      173,531
                         ==========   ==========   ==========   ==========

3. Tax

Hong Kong profits tax is provided at the rate of 16.0% (1999: 16.0%) on the estimated assessable profits arising in Hong Kong for the period.

Taxes on profits in respect of subsidiaries operating overseas have been calculated at the rates of tax prevailing in the respective tax jurisdictions in which they operate based on existing legislation, interpretations and practices in respect thereof.

                                                        Six months ended 
                                                         30th September,
                                                       2000           1999
                                                (Unaudited)    (Unaudited)
                                                    HK$'000        HK$'000
   Hong Kong and PRC 
     profits tax: 
     Current period 
       provision                                     19,369         10,680
Deferred tax                                          1,350            786
                                               ------------   ------------
                                                     20,719         11,466

Associate                                             2,265          1,551
                                               ------------   ------------
                                                     22,984         13,017
                                               ============   ============

4. Earnings per share

(a) Basic earnings per share

The calculation of the basic earnings per share is based on the net profit from ordinary activities attributable to shareholders of HK$232,261,000 (1999: HK$164,765,000 restated) and the weighted average number of 1,277,676,716 (1999: 1,278,720,104) shares in issue during the period.

(b) Diluted earnings per share

The calculation of the diluted earnings per share is based on the followings:

                                                        Six months ended 
                                                         30th September,
                                                       2000           1999
                                                (Unaudited)    (Unaudited)
                                                    HK$'000        HK$'000

Net profit from ordinary 
  activities attributable to 
  shareholders                                      232,261        164,765
                                              =============  =============
Weighted average number of 
  ordinary shares used in 
  calculation of basic 
  earnings per share                          1,277,676,716  1,278,720,104
Deemed issue of ordinary 
  shares for no 
  consideration arising 
  from share options                             17,770,423     14,393,465
                                              -------------  -------------
Weighted average number of 
  ordinary shares used in 
  calculation of diluted 
  earnings per share                          1,295,447,139  1,293,113,569
                                              =============  =============

Therefore, the diluted earnings per share for the six months ended 30th September, 2000 was 17.9 cents (1999: 12.7 cents restated).

5. Trade and bills receivables

The Group has a clear and tight monitoring system on credit control and it normally trades with its customers under the following credit terms:

(a) cash before or upon delivery;

(b) letter of credit at sight or usance; and

(c) open credit of 30 - 90 days.

Generally, it is only those with good reputation and well-established financial background will be granted with open account credit terms.

The ageing of trade and bills receivables as at 30th September, 2000 is as follows:

                                       At 30th September,   At 31st March,
                                                     2000             2000 
                                              (Unaudited)      (Unaudited)
                                                  HK$'000          HK$'000

0 - 90 days                                       465,396          350,816
91 - 180 days                                       7,129            6,606
Over 180 days                                       9,130            4,851
                                            -------------    -------------
                                                  481,655          362,273
                                            =============    =============

6. Trade payables and accrued liabilities

The ageing of trade payables and accrued liabilities as at 30th September, 2000 is as follows:

                                       At 30th September,   At 31st March,
                                                     2000             2000
                                              (Unaudited)      (Unaudited)
                                                  HK$'000          HK$'000

0-90 days                                         625,558          448,964
91-180 days                                        33,548           18,040
Over 180 days                                         ---              108
                                            -------------    -------------
                                                  659,106          467,112
                                            =============    =============

7. Reserves

                           Transfer on
                        At  repurchase     Foreign    Retained     At 30th
               31st March,      of own    exchange  profit for  September,
                      2000      shares  adjustment      period        2000
                 (Audited) (Unaudited) (Unaudited) (Unaudited) (Unaudited)
                   HK$'000     HK$'000     HK$'000     HK$'000     HK$'000

Share premium 
  account          316,772      (3,815)        ---         ---     312,957 
Capital redemption 
  reserve              722         220         ---         ---         942
  surplus            3,986         ---         ---         ---       3,986 
Goodwill on 
  acquisition     (110,603)        ---         ---         ---    (110,603)
  reserve           (9,904)        ---         (52)        ---      (9,956)
  reserve            7,238         ---         ---         ---       7,238
Asset revaluation
  reserve            7,840         ---         ---         ---       7,840
Retained profit  1,030,347        (220)        ---     155,730   1,185,857
                 ---------   ---------   ---------   ---------   ---------
Total            1,246,398      (3,815)        (52)    155,730   1,398,261
                 =========   =========   =========   =========   =========

8. Contingent liabilities

Contingent liabilities not provided for in the financial statements were:

                                       At 30th September,   At 31st March,
                                                     2000             2000
                                              (Unaudited)        (Audited)
                                                  HK$'000          HK$'000
Guarantees of banking 
  facilities granted to 
  an associate                                     12,500           12,500
Export bills discounted 
  with recourse                                    13,930           49,441
                                            -------------    -------------
                                                   26,430           61,941
                                            =============    =============

At 30th September, 2000, irrevocable and unconditional guarantees aggregating HK$874 million (31st March, 2000: HK$750 million) have been given by the Company in respect of an associate's and certain subsidiaries' banking facilities and borrowings aggregating HK$46,978,000 (31st March, 2000: HK$43,847,000).

9. Capital commitments

The aggregate commitments for capital expenditure not being provided in the financial statements were:

                                       At 30th September,   At 31st March, 
                                                     2000             2000
                                              (Unaudited)        (Audited)
                                                  HK$'000          HK$'000
In respect of fixed assets, 
  contracted for                                   10,550              ---
In respect of investment in 
  subsidiaries in the 
  PRC, contracted for                              81,089            9,915
                                            -------------    -------------
                                                   91,639            9,915
                                            =============    =============

10. Operating lease commitments

                                       At 30th September,   At 31st March,
                                                     2000             2000
                                              (Unaudited)        (Audited)
                                                  HK$'000          HK$'000
Annual commitments 
  under non-
  cancellable operating 
  leases for land and 
  buildings expiring: 
  Within one year                                  19,862           48,508
  In the second to fifth 
    years, inclusive                              135,259           87,918
  After five years                                  4,099            1,314
                                            -------------    -------------
                                                  159,220          137,740
                                            =============    =============
Annual commitment 
  under a non-
  cancellable operating 
  lease for plant and 
  machinery expiring 
  after five years                                  9,406            9,406
                                            =============    =============

11. Prior period adjustment

The Group's deferred pre-operating expenses represented expenses incurred by certain subsidiaries of the Company prior to the commencement of these subsidiaries' operations. Before the adoption of the SSAP Interpretation 9 "Accounting for Pre-operating Costs" issued by the Hong Kong Society of Accountants, these expenses were capitalised up to the date of commencement of operations of these subsidiaries and were amortised on a straight-line basis over a period of five years.

The policy of accounting for deferred pre-operating expenses was changed during the period as a result of the adoption of the revised SSAP 1, which was subsequently clarified by Interpretation No. 9 "Accounting for Pre-operating Costs". Under the new accounting policy, the Group's deferred pre-operating expenses are charged to the profit and loss account in the period in which they arise.

In restating the consolidated profit and loss account for the period ended 30 September 1999 on the basis of the new policy, the Group's net profit from ordinary activities attributable to shareholders for the period ended 30th September 1999 have been increased by HK$3,030,000 and the retained profit as at 1 April 1999 have been decreased by HK$12,085,000. There is no tax attributable to this prior period adjustment. Accordingly, the comparative amounts including earnings per share and opening retained profits have been restated.

12. Comparative figures

Certain comparative figures have been reclassified to conform to the current period's presentation. In particular, the comparative figures have been reclassified or expanded to conform with Statement of Standard Accounting Practice 1 "Presentation of Financial Statements" issued by the Hong Kong Society of Accountants which became effective during the year ended 31st March, 2000.


The Board has declared an interim dividend of 6.0 cents per share (1999: 3.0 cents) for the six months ended 30th September, 2000. The interim dividend will be payable on Monday, 12th February, 2001 to shareholders registered on the Register of Members at the close of business on Tuesday, 23rd January, 2001.


The Register of Members will be closed from Wednesday, 17th January, 2001 to Tuesday, 23th January, 2001 (both days inclusive), during which period no transfer of shares can be registered. In order to qualify for the interim dividend, all transfers accompanied by the relevant share certificates must be lodged with the Company's Registrar in Hong Kong, Tengis Limited at 4/F., Hutchison House, 10 Harcourt Road, Central, Hong Kong for registration not later than 4:00 p.m. on Tuesday, 16th January, 2001.


For this interim period, the Group's turnover and net profit from ordinary activities attributable to shareholders rose remarkably by 44% and 41% respectively. The Board has recommended an interim dividend of 6.0 cents per share, an increase of 100% over last year's 3.0 cents.

Turnover of the textile business amounted to HK$1,354 million, up 35% compared with 1999 interim period. The robust growth was mainly due to an increase in productivity and strong orders from Asian buyers. As rise in prices was still not feasible during the period, the management had exercised stringent cost control measures to improve profit margins.

Retail sales recorded an amazing surge of 63%, at HK$704 million. Sales growth of our three major markets, China, Hong Kong and Taiwan was at 58%, 85% and 67% respectively. As at 30th September, 2000, there were 545 outlets in China, 28 in Hong Kong and 62 in Taiwan. Licensed outlets were also operated in Macau, South Korea, Malaysia, Kuwait, Jordan and Iran.


During the period, the Group had been in healthy financial status. At the end of this interim period, cash and cash equivalents amounted to HK$251 million and total bank borrowings was HK$33 million. Total bank borrowings to equity ratio was further reduced to 0.02. Inventory turnover on sales was 48 days while receivables turnover on sales was 42 days.


As market conditions have been favourable, the Group will continue its expansions as planned. For the textile business, productivity would be further expanded in our China factories. As to the retail business, more shops will be opened in our three major markets and the total number of shops will be over 700 in the second half year. The interim results have met our expectation, and the management is confident about the results for the whole financial year.


During the six months ended 30th September, 2000, the Company repurchased a total of 4,398,000 of its listed shares on The Stock Exchange of Hong Kong Limited as follows:

                   Number of
                      shares          Price per share            Aggregate 
Month/Year       repurchased        Highest       Lowest     consideration
                                        HK$          HK$           HK$'000

April 2000         1,574,000           0.88         0.78             1,290
May 2000           1,420,000           0.88         0.82             1,218
June 2000            702,000           1.19         0.84               715
August 2000          140,000           1.28         1.25               177
September 2000       562,000           1.11         1.05               610
                 -----------                                   -----------
                   4,398,000                                         4,010
Add: Brokerage & commission charges                                     25
Total cash paid                                                      4,035

The above repurchased shares have been duly cancelled and the issued share capital of the Company has been reduced according to the par value of the cancelled shares.

Save as disclosed above, neither the Company nor any of its subsidiaries purchased, redeemed, or sold any of the Company's securities during the six months ended 30th September, 2000.


Members of the Audit Committee (the "Committee") comprise the two independent non-executive directors of the Group, namely Mr. Au Son Yiu and Mr. Cheng Shu Wing. The principal duties of the Committee include the review and supervision of the financial reporting process and internal controls of the Group.

For the interim period, the Committee has reviewed and discussed with management the interim report and the internal controls of the Group.


In the opinion of the directors, the Company has complied with the Code of Best Practice as set out in Appendix 14 of the Listing Rules of SEHK throughout the accounting period covered by the interim report except that the independent non-executive directors of the Company are not appointed for specific terms. Independent non-executive directors are subject to retirement and re-election at the Annual General Meeting of the Company in accordance with the provisions of the Company's Bye-laws.

By order of the Board
Poon Bun Chak

Hong Kong, 18th December, 2000

Source: Texwinca Holdings Limited
  • Interim Reports
  • Company's Index

  • © Copyright 1996-2024 Ltd. All rights reserved.
    DISCLAIMER: Ltd makes no guarantee as to the accuracy or completeness of any information provided on this website. Under no circumstances shall 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 Ltd or have been lawfully licensed to 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 Ltd is strictly prohibited.
    TERMS OF USE: Please read the Terms of Use governing the use of our website.