NWS HOLDINGS<00659> - Results Announcement
NWS Holdings Limited announced on 09/10/2006:
(stock code: 00659 )
Year end date: 30/06/2006
Currency: HKD
Auditors' Report: Unqualified
(Audited )
(Audited ) Last
Current Corresponding
Period Period
from 01/07/2005 from 01/07/2004
to 30/06/2006 to 30/06/2005
Note ('Million ) ('Million )
(Restated)
Turnover : 12,543.9 10,286.1
Profit/(Loss) from Operations : 649.7 1,954.2
Finance cost : (253.8) (227.1)
Share of Profit/(Loss) of
Associates : 476.6 360.7
Share of Profit/(Loss) of
Jointly Controlled Entities : 909.4 862.2
Profit/(Loss) after Tax & MI : 1,656.6 2,886.1
% Change over Last Period : -43 %
EPS/(LPS)-Basic (in dollars) : 0.89 1.60
-Diluted (in dollars) : 0.85 1.52
Extraordinary (ETD) Gain/(Loss) : 0 0
Profit/(Loss) after ETD Items : 1,656.6 2,886.1
Final Dividend : $0.20 $0.62
per Share
(Specify if with other : in scrip form with in scrip form with
options) cash option cash option
B/C Dates for
Final Dividend : 16/11/2006 to 21/11/2006 bdi.
Payable Date : 29/12/2006
B/C Dates for (-)
General Meeting : N/A
Other Distribution for : N/A
Current Period
B/C Dates for Other
Distribution : N/A
Remarks:
1. Basis of preparation and accounting policies
(a) Basis of preparation
The consolidated financial statements have been prepared in accordance
with accounting standards issued by the Hong Kong Institute of Certified
Public Accountants ("HKICPA"), including Hong Kong Financial Reporting
Standards ("HKFRS"), Hong Kong Accounting Standards ("HKAS") and
Interpretations ("HK(SIC) - Int") (collectively the "HKFRSs") as described
further below. They have been prepared under the historical cost
convention, as modified by the revaluation of investment properties,
financial assets and financial liabilities at fair value through profit or
loss and available-for-sale financial assets, which are carried at fair
value.
(b) The adoption of new / revised HKFRSs
For the year ended 30 June 2005, the Company and its subsidiaries (the "
Group") early adopted HKFRS 3 "Business combinations", HKAS 36 "Impairment
of assets" and HKAS 38 "Intangible assets". With effect from 1 July 2005,
the Group has adopted the remaining HKFRSs that are currently in issue and
effective for the accounting periods commencing on or after 1 January 2005
as below, which are relevant to its operation, and also early adopted the
amendment to HKAS 21 "The effects of changes in foreign exchange rates -
Net investment in a foreign operation" which is effective for the
accounting periods commencing on or after 1 January 2006. The 2005
comparatives have been restated as required, in accordance with the
relevant requirements.
HKAS 1 Presentation of Financial Statements
HKAS 2 Inventories
HKAS 7 Cash Flow Statements
HKAS 8 Accounting Policies, Changes in Accounting Estimates and Errors
HKAS 10 Events after the Balance Sheet Date
HKAS 16 Property, Plant and Equipment
HKAS 17 Leases
HKAS 21 The Effects of Changes in Foreign Exchange Rates
HKAS 23 Borrowing Costs
HKAS 24 Related Party Disclosures
HKAS 27 Consolidated and Separate Financial Statements
HKAS 28 Investments in Associates
HKAS 31 Investments in Joint Ventures
HKAS 32 Financial Instruments: Disclosures and Presentation
HKAS 33 Earnings per Share
HKAS 39 Financial Instruments: Recognition and Measurement
HKAS 40 Investment Property
HK(SIC) - Int 15 Operating Leases - Incentives
HK(SIC) - Int 21 Income Taxes - Recovery of Revalued Non-
Depreciable Assets
HKFRS 2 Share-based Payment
The adoption of the above HKFRSs has the following impact on the Group's
accounting policies:
(i) HKAS 17 Leases
The adoption of HKAS 17 has resulted in a change in the accounting policy
relating to the reclassification of leasehold land and land use rights
from property, plant and equipment to operating leases. The up-front
prepayments made for the leasehold land and land use rights are expensed
in the income statement on a straight-line basis over the period of the
lease or when there is impairment, the impairment is expensed in the
income statement. In prior years, the leasehold land and land use rights
were accounted for at cost less accumulated depreciation and accumulated
impairment. This change in accounting policy has been applied
retrospectively.
(ii) HKAS 32 Financial instruments: Disclosures and Presentation
HKAS 39 Financial instruments: Recognition and Measurement
The adoption of HKAS 32 and HKAS 39 has resulted in a change in the
accounting policy relating to the classification of financial assets at
fair value through profit or loss and available-for-sale financial assets.
It has also resulted in the recognition of derivative financial
instruments at fair value and the change in the recognition and
measurement of hedging activities. This change in accounting policy has
been applied on a prospective basis.
The Group is required to split the carrying value of its convertible bonds
into equity and liability components in accordance with HKAS 32. The
liability component is initially recognized at its fair value which is
determined by using a market interest rate for an equivalent non-
convertible bond and subsequently carried at amortized cost until
extinguished on conversion or maturity of the bonds. The remainder of the
proceeds is allocated to the conversion option which is recognized and
included in shareholders' equity as special reserves, net of income tax
effects. The notional interest expense calculated is charged to the
income statement. This change in accounting policy has been applied
retrospectively.
(iii) HKAS 40 Investment Property
The adoption of HKAS 40 has resulted in a change in the accounting policy
of which the changes in fair value of investment properties are recorded
in the income statement. In prior years, increases in fair value of
investment properties were credited to the investment properties
revaluation reserve. Decreases in fair value were first set off against
increases on earlier valuations on a portfolio basis and thereafter
expensed in the income statement.
The Group has applied the relevant transitional provisions under HKAS 40
and elected to apply HKAS 40 from 1 July 2005 onwards. As a result,
investment properties revaluation reserve of HK$39.3 million as at 1 July
2005 has been transferred to the opening retained profits. Comparative
information has not been restated.
(iv) HK(SIC) - Int 21 Income Taxes - Recovery of Revalued Non-
Depreciable Assets
The adoption of HK(SIC) - Int 21 has resulted in a change in the
accounting policy relating to the measurement of deferred tax liabilities
arising from the revaluation of investment properties. Such deferred tax
liabilities are measured on the basis of tax consequences that would
follow from recovery of the carrying amount of that asset through use. In
prior years, the carrying amount of that asset was expected to be
recovered through sale.
(v) HKFRS 2 Share-based Payment
The adoption of HKFRS 2 has resulted in a change in the accounting policy
for share-based payments. Until 30 June 2005, the provision of share
options to employees did not result in an expense in the income statement.
Effective on 1 July 2005, the Group expenses the fair value of share
options in the income statement. As a transitional provision, the fair
value of share options granted after 7 November 2002 and not vested on 1
July 2005 was expensed retrospectively in the income statement of the
respective periods.
(vi) Other standards
The adoption of new / revised HKASs 1, 2, 7, 8, 10, 16, 21, 23, 24, 27,
28, 31, 33 and HK(SIC)
- Int 15 did not result in substantial changes to
the Group's accounting policies. In summary:
- HKAS 1 has affected the presentation of minority interest, share
of net after-tax results of jointly controlled entities and associated
companies and other disclosures.
- HKAS 21 had no material effect on the Group's policy. The
functional currency of each of the consolidated entities has been re-
evaluated based on the guidance of the revised standard.
- HKAS 24 has affected the disclosure of related-party transactions.
2. Operating profit
Operating profit of the Group is arrived at after crediting and charging
the following:
For the year ended
30 June
2006 2005
HK$'m HK$'m
(restated)
Crediting
Gross rental income from investment properties
42.2 40.9
Less: Outgoings (12.5) (10.1)
-----------------------
29.7 30.8
========================
Other income
Profit on disposal of subsidiary companies 65.7 749.3
Profit on disposal of a jointly controlled entity
68.7 1,092.3
Profit on disposal of an investment - 190.7
Profit on disposal of land use rights and properties
22.7 -
Interest income 76.6 33.5
Management fee 44.8 31.4
Machinery hire income 14.2 20.2
Fair value gains on investment properties 3.0 -
Gain on redemption of convertible bonds 48.0 -
Dividend and other income 11.4 -
-----------------------
355.1 2,117.4
=======================
Charging
Other charges
Loss on disposal of a jointly controlled entity
- 2.1
Assets impairment loss 30.0 57.8
----------------------
30.0 59.9
======================
Cost of inventories sold 827.3 905.6
Write-down of inventories 7.2 2.2
Depreciation 198.4 197.3
Amortization of leasehold land and land use rights
3.0 2.6
3. Earnings per share
The calculation of basic and diluted earnings per share for the
year is based on the following:
2006 2005
HK$'m HK$'m
(restated)
Profit attributable to shareholders of the
Company 1,656.6 2,886.1
Effect of dilutive potential ordinary shares:
Interest on convertible bonds, net of tax 19.7 21.7
_________ _________
Profit for calculation of diluted earnings
per share 1,676.3 2,907.8
======= ========
Number of shares
2006 2005
Weighted average number of shares
for calculating basic earnings per share 1,869,586,707 1,803,667,218
Effect of dilutive potential ordinary shares:
Share options 1,800,667 9,465,762
Convertible bonds 89,225,798 99,046,222
_____________ _______________
Weighted average number of shares for
calculating diluted earnings per share 1,960,613,172 1,912,179,202
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