新世界newworld

InterimReport2004/2005NewWorldDevelopmentCompanyLimitedCover:fivelistedunitsservingcommunityneeds1.
NWD-ownedNewWorldCentreoffersuniqueshoppingexperiencetolocalandoverseascustomers.
2.
NWCL'sBeijingNewWorldCentrehasdevelopedintoahotspotforshopping,dinningandleisureservicesinChongwenDistrict,Beijing.
3.
NWMHLbringspeopleclosertogetherwithitsinnovativemobileservices.
4.
NWSHmanagesHKCEC,afacilitythathelpstakeHongKong'stradeforward.
5.
NWTMToperatescallcentreservicesinMainlandChinatorealizeforindividualsandbusinessesthetruepotentialofaninterconnectedworld.
13542FinancialHighlights1Sixmonthsended31December20042003ChangeHK$mHK$m%Turnover11,519.
711,381.
11.
2OperatingProfitbeforeInterestandTaxation1,140.
0568.
5100.
5ShareofResultsofAssociatedCompaniesandJointlyControlledEntities1,095.
5617.
277.
5ProfitAttributabletoShareholders1,128.
9236.
4377.
5NetCashgeneratedfrom/(usedin)OperatingActivities3,208.
2(784.
9)N/A31December30June20042004ChangeHK$mHK$m%Grossdebt25,530.
228,243.
4(9.
6)Netdebt18,295.
621,613.
4(15.
4)Cashandcashequivalents7,234.
66,630.
09.
1Netgearing(%)32.
839.
7(17.
4)Chairman'sStatement2ToOurShareholders,On26December2004,thelargesttsunamidisasterindecadesstruckseveralSouthAsiancountries,takinghundredsofthousandsofhumanlives,leavingcountlesspeoplehomelessandcausingtremendouslossofproperties.
Whilewearegratefulforthesafetyandwellnessweenjoyinthiscityofours,ourheartsarewiththosewhoselivesaredevastatedbythiscatastrope.
Theworstofnaturaldisastershasbroughtoutthebestofhumanity.
Theinternationalcommunityrespondedwithmassivehumanitarianreliefeffortsnotseeninrecentmemory.
Ascitizensoftheglobalvillage,theGroupanditsemployeesdemonstratedexemplarykind-heartednessandunitybyraisingdonationsinsupportofreliefoperationsforthevictims.
Thesametechnologicalwondersthatbroughtusliveimagesofdisastervictimsandenabledswiftdeploymentofreliefprogrammes,areshrinkingourworldinamultitudeofways.
Withincreasingglobalizationcomesgreatereconomicinterdependenceamongeconomies.
NowherearethebenefitsofclosereconomictiesmorepronouncedthaninMainlandChinaandHongKong.
Thetwoplaceshavetheirownadvantages.
Onehasthemanpower,naturalresourcesandmanufacturingmight,whiletheotherhasthemanagementskillsandmarketingknow-how.
Increasingeconomiclinksbetweenthetwoplaces,asevidencedinthegrowingflowsofpeople,goodsandinformationacrosstheborder,havebenefitedbotheconomiesenormouslyinrecentyears.
Overtheyears,HongKonghasbeenconfrontedwithvariouschallenges.
Oneveryoccasion,wewereabletorelyonouruniquequalities-resourcefulness,perseverance,diligenceandpassionforexcellence-toriseaboveourdifficulties.
Afteraprotractedperiodofeconomicslowdown,oureconomyhasregaineditsgrowthmomentum,thankstoourpeople'shardworkandsupportivegovernmentpolicies.
Openinglaterthisyear,HongKongDisneylandissettoturnHongKongintoapreferredfamilytouristdestinationintheregion.
AHongKongeconomythatplacesgreateremphasisontourismwillbringdirectbenefittotheGroup'stourism-linkedbusinesses,suchasshoppingmalls,hotelsandtransport.
WiththesupportoftheCentralGovernment,policieslikeCEPAandIndividualVisitSchemearegoingfullstreamahead,givingmuchneededstimulustoourtrade,professionalserviceandretailsectorsinparticularandoureconomyingeneral,andsettingapositivetonefortheGroup'sbusinessdevelopmentgoingforward.
Withitswell-establishedbusinessnetworkinbothHongKongandMainlandChina,theGroupwillbeabletocaptureopportunitiesarisingfromthegrowthandintegrationofthetwoeconomies,andscalenewheightsintheyearsahead.
DrChengYu-TungChairmanHongKong,15March2005ManagingDirector'sReport3ToOurShareholders,Overthepastfewyears,theGrouphasdonealottostreamlinecorporatestructureandimprovecorporatetransparency.
TheGroupnowhasfivelistedvehicles,eachfocusingonitsareaofstrength.
Eachlistedcompanyhasitsmanagementteamworkingforthebestinterestoftheirshareholders.
TheGroupalsoendeavourstoimprovethecorporatetransparency.
Wehaveorganizedanumberofsitevisits,meetingswithmediaandinvestmentcommunityandparticipatedininvestmentforumsandoverseasroadshows.
TheseactivitieshelpedkeepinvestorsontheforefrontoftheGroup'sstrategiesanddevelopmentplans.
Forthesixmonthsended31December2004,theGrouprecordedaturnoverofHK$11.
5billion.
Contributionsfrompropertysalesandrental,serviceandinfrastructure,departmentstoresandhotelsachievedsatisfactorygrowth.
Totalsegmentresultsincludingshareofresultsofassociatedcompaniesandjointlycontrolledentitiesgrew49%toHK$2.
2billion.
ThestrongcashflowfromcoreoperationsreducedthenetdebtbyHK$3.
3billiontoHK$18.
3billion.
Netgearingratiowasloweredto33%from40%asattheendof2004.
WiththeexpectedcashcontributionsfromthesalesofTheMertonandtheGroup'sinterestsinHongKongcontainerports,thenetgearingratiowillbepossiblybelow20%bytheendof2005.
In2005,theGrouphas6projectsinHongKongwitharound2,000unitsforsales.
InMainlandChina,theGroupwillhaveanaggregateGFAofapproximately1.
3millionsq.
m.
,inventoryandnewcompletions,forsaleinFY2005.
InfrastructureoperationisoneofthekeycontributorstotheGroup.
NWSHoldingsdisposedofallitsinterestsinCT3andCT8WestforHK$3.
0billion.
TheGrouphasacquiredstakesinthreeexpresswaysinPearlRiverDeltaandoneportinvestmentinTianjin.
OurcoreoperationshavebenefitedandwillcontinuetobenefitgreatlyfromtherevivalofHongKongeconomyandprosperityinMainlandChina.
Strategically,weareactivelylookingforgrowthopportunitiesinMainlandChinawhileenhancingandexpandingourHongKongbusinesses.
China'seconomyisprojectedtogrowat8%in2005,agrowthratethatwillgivethecountryanotheryearofenviableeconomicachievements.
Launchedinearly2004,theCentralGovernment'sausteritymeasuresarepavingthewayforthehealthylong-termeconomicdevelopment.
AstheeconomypreparesforitsfullintegrationintoWTO,China'sindustriesquicklygearupthemselvesforoverseascompetition,andinsodoing,createopportunitiesforproductivityenhancementandeconomicgrowth.
AsabusinessconglomeratewithstrongpresenceinkeysectorsinMainlandChina,includingproperty,infrastructureanddepartmentstore,weareuniquelypositionedtocapitalizeonthecountry'sgrowthtrend.
DrChengKar-Shun,HenryManagingDirectorHongKong,15March2005CondensedConsolidatedProfitandLossAccount4UnauditedSixmonthsended31December20042003NoteHK$mHK$mTurnover211,519.
711,381.
1Costofsales(8,945.
7)(8,983.
1)Grossprofit2,574.
02,398.
0Otherrevenues15.
52.
0Otherincome/(charge)3291.
7(49.
3)Sellingandmarketingexpenses(248.
4)(241.
5)Administrativeexpenses(505.
2)(504.
7)Otheroperatingexpenses(987.
6)(1,036.
0)Operatingprofitbeforefinancingcostsandincome21,140.
0568.
5Financingcosts(231.
7)(522.
0)Financingincome157.
1134.
4Operatingprofit41,065.
4180.
9ShareofresultsofAssociatedcompanies250.
090.
5Jointlycontrolledentities845.
5526.
7Profitbeforetaxation2,160.
9798.
1Taxation5(453.
0)(255.
8)Profitaftertaxation1,707.
9542.
3Minorityinterests(579.
0)(305.
9)Profitattributabletoshareholders1,128.
9236.
4Interimdividend346.
769.
1Earningspershare6BasicHK$0.
33HK$0.
10FullydilutedN/AN/AInterimdividendpershareHK$0.
10HK$0.
02CondensedConsolidatedBalanceSheet5Unaudited31December30June20042004NoteHK$mHK$mAssetsandliabilitiesNon-currentassetsIntangibleassets7212.
279.
3Fixedassets833,770.
933,897.
6Associatedcompanies6,452.
35,835.
9Jointlycontrolledentities24,580.
124,027.
1Otherinvestments3,504.
23,429.
5Otherassets92,693.
42,824.
2Deferredtaxassets282.
7286.
871,495.
870,380.
4CurrentassetsPropertiesheldforsale23,189.
223,184.
1Stocks278.
6281.
7Currentportionoflongtermreceivables874.
3827.
7Otherloansreceivable454.
6338.
0Debtorsandprepayments108,462.
99,500.
3CashandbankbalancesRestricted1,479.
91,188.
0Unrestricted5,754.
75,442.
040,494.
240,761.
8CurrentliabilitiesCreditorsandaccruedcharges1111,700.
010,199.
7Contractsinprogress142.
4231.
0Depositsreceivedonsaleofproperties330.
8153.
9BankloansandoverdraftsSecured686.
0649.
0Unsecured1,701.
12,238.
7Otherunsecuredloans48.
348.
2Currentportionoflongtermliabilities125,871.
76,046.
0Taxation824.
5581.
721,304.
820,148.
2Netcurrentassets19,189.
420,613.
6Totalassetslesscurrentliabilities90,685.
290,994.
0Non-currentliabilitiesLongtermliabilities1219,610.
821,869.
0Deferredtaxliabilities880.
8922.
6Minorityinterests14,395.
213,797.
4Netassets55,798.
454,405.
0CapitalandreservesSharecapital133,457.
33,457.
3Reserves51,856.
150,809.
42004finaldividend138.
3138.
32005interimdividend346.
7—Shareholders'funds55,798.
454,405.
0CondensedConsolidatedCashFlowStatement6UnauditedSixmonthsended31December20042003HK$mHK$mNetcashgeneratedfrom/(usedin)operatingactivities3,208.
2(784.
9)Netcashusedininvestingactivities(635.
9)(1,823.
0)Netcash(usedin)/generatedfromfinancingactivities(3,023.
9)373.
3Decreaseincashandcashequivalents(451.
6)(2,234.
6)Cashandcashequivalentsatbeginningoftheperiod5,416.
94,134.
2Effectofforeignexchangeratechanges(7.
6)(8.
7)Cashandcashequivalentsatendoftheperiod4,957.
71,890.
9Analysisofbalancesofcashandcashequivalents:Cashandbankbalances5,754.
73,311.
0Bankoverdrafts(797.
0)(1,420.
1)4,957.
71,890.
9CondensedConsolidatedStatementofChangesinEquity7UnauditedCapitalredemptionAssetSharereserveSharerevaluationCapitalGeneralRetainedcapitalaccountpremiumreservereservereserveprofitsTotalHK$mHK$mHK$mHK$mHK$mHK$mHK$mHK$mBalanceat1July20043,457.
337.
724,596.
115,542.
9484.
0567.
49,581.
354,266.
7Releaseofgoodwillupondisposalofproperties———1.
1———1.
1Shareofreserveofjointlycontrolledentities————0.
3——0.
3Investmentsecuritiesimpairmentlosschargedtoprofitandlossaccount———(0.
5)0.
5)Negativegoodwillderecognised168.
5168.
5Investmentsecuritiesrevaluationsurplusfortheperiod———100.
6———100.
6Investmentsecuritiesrevaluationdeficitrealisedupondisposal———(5.
5)5.
5)Retainedprofitfortheperiod1,128.
91,128.
9Transferfromretainedprofits11.
7(11.
7)—3,457.
337.
724,596.
115,638.
6484.
3579.
110,867.
055,660.
1Representing:Balanceat31December20043,457.
337.
724,596.
115,638.
6484.
3579.
110,520.
355,313.
42005interimdividend346.
7346.
73,457.
337.
724,596.
115,638.
6484.
3579.
110,867.
055,660.
1CondensedConsolidatedStatementofChangesinEquity8UnauditedCapitalredemptionAssetSharereserveSharerevaluationCapitalGeneralRetainedcapitalaccountpremiumreservereservereserveprofitsTotalHK$mHK$mHK$mHK$mHK$mHK$mHK$mHK$mBalanceat1July2003,aspreviouslyreported2,219.
537.
719,347.
612,675.
5582.
5566.
610,706.
846,136.
2EffectofadoptionofSSAP12———(121.
8)(82.
1)—(138.
3)(342.
2)Balanceat1July2003,asrestated2,219.
537.
719,347.
612,553.
7500.
4566.
610,568.
545,794.
0Placementofshares250.
0—975.
7————1,225.
7Releaseofgoodwilluponpartialdisposalofasubsidiary————0.
5—6.
67.
1Investmentsecuritiesrevaluationsurplusduringtheperiod———76.
3———76.
3Investmentsecuritiesrevaluationdeficitrealisedupondisposal———29.
7———29.
7Releaseofreserveupondisposalofasubsidiary———(1.
3)1.
3)Releaseofreserveupondisposalofanassociatedcompany———(1.
2)1.
2)Retainedprofitfortheperiod236.
4236.
4Transfertoretainedprofits28.
2)28.
2—Translationdifference0.
5)(0.
5)2,469.
537.
720,323.
312,657.
2500.
9538.
410,839.
247,366.
2Representing:Balanceat31December20032,469.
537.
720,323.
312,657.
2500.
9538.
410,770.
147,297.
12004interimdividend69.
169.
12,469.
537.
720,323.
312,657.
2500.
9538.
410,839.
247,366.
2NotestoCondensedAccount91.
BasisofpreparationandaccountingpoliciesTheunauditedconsolidatedcondensedinterimaccountsforthecurrentperiod(the"InterimAccounts")arepreparedinaccordancewithStatementofStandardAccountingPractice2.
125,"InterimFinancialReporting",issuedbytheHongKongInstituteofCertifiedPublicAccountantsandAppendix16oftheRulesGoverningtheListingofSecuritiesonTheStockExchangeofHongKongLimited(the"ListingRules").
TheInterimAccountsshouldbereadinconjunctionwiththe2004annualaccounts.
TheprincipalaccountingpoliciesandmethodsofcomputationusedinthepreparationoftheInterimAccountsareconsistentwiththoseusedintheannualaccountsfortheyearended30June2004,exceptthattheGroupearlyadoptedtheaccountingstandardsbelowwitheffectfrom1July2004:HongKongFinancialReportingStandard3("HKFRS3")BusinessCombinationHongKongAccountingStandard36("HKAS36")ImpairmentofAssetsHongKongAccountingStandard38("HKAS38")IntangibleAssetsTheadoptionofthesestandardsresultedinchangestocertainaccountingpoliciesoftheGroup.
Therevisedpoliciesare:(a)Assetsthathaveanindefiniteusefullifearenotsubjecttoamortisationandaretestedannuallyforimpairment.
Assetsthataresubjecttoamortisationarereviewedforimpairmentwhenevereventsorchangesincircumstancesindicatethatthecarryingamountmaynotberecoverable.
Animpairmentlossisrecognisedfortheamountbywhichtheasset'scarryingamountexceedsitsrecoverableamount.
Therecoverableamountisthehigherofanasset'sfairvaluelesscoststosellandvalueinuse.
(b)GoodwillrepresentstheexcessofthecostofanacquisitionoverthefairvalueoftheGroup'sshareofthenetidentifiableassetsoftheacquiredsubsidiary/associatedcompany/jointlycontrolledentityatthedateofacquisition.
Goodwillonacquisitionsofsubsidiariesisincludedinintangibleassets.
Goodwillonacquisitionsofassociatedcompanies/jointlycontrolledentitiesisincludedininvestmentsinassociatedcompanies/jointlycontrolledentities.
Goodwillistestedannuallyforimpairmentandcarriedatcostlessaccumulatedimpairmentlosses.
Gainsandlossesonthedisposalofanentityincludethecarryingamountofgoodwillrelatingtotheentitysold.
NotestoCondensedAccount101.
Basisofpreparationandaccountingpolicies(continued)ThekeyimpactstotheGroupareasfollows:—TheGroupceasedamortisationofgoodwillandnegativegoodwillfrom1July2004;—Accumulatedamortisationasat30June2004hasbeeneliminatedwithacorrespondingdecreaseinthecostofgoodwill;—Negativegoodwillhasbeenderecognisedandcreditedtotheequity;—Goodwillistestedannuallyforimpairment,aswellaswhenthereareindicationsofimpairment;and—Forgoodwillwhicharosebefore1January2001andwhichhasbeentakenintoreserves,itwouldnotberecognisedintheprofitandlossaccountwhentheGroupdisposesofallorpartofthebusinesstowhichthatgoodwillrelatesorwhenacash-generatingunittowhichthegoodwillrelatesbecomesimpaired.
Allchangesintheaccountingpolicieshavebeenmadeinaccordancewiththetransitionalprovisionsintherespectivestandardsandhavebeenappliedprospectively.
TheearlyadoptionoftheseaccountingstandardswouldnothaveasignificantimpactontheInterimAccounts.
NotestoCondensedAccount112.
SegmentinformationTheGroupisprincipallyengagedinpropertyinvestmentanddevelopment,contracting,provisionofserviceincludingpropertyandfacilitiesmanagement;transportandotherservices,infrastructureoperationsincludingroadsandbridgesoperations;containerhandling,logisticsandwarehousingservices,telecommunicationservices,departmentstoreoperations,hotelandrestaurantoperationsandtelecommunications,mediaandtechnologybusinesses.
AnanalysisoftheGroup'srevenueandresultsfortheperiodbybusinessandgeographicalsegmentsisasfollows:(a)BusinesssegmentsSixmonthsended31December2004PropertyinvestmentandInfra-Telecom-DepartmentElimin-Con-developmentServicestructuremunicationsstoresOthersationssolidatedHK$mHK$mHK$mHK$mHK$mHK$mHK$mHK$mExternalsales2,310.
24,617.
9113.
91,324.
11,919.
81,233.
8—11,519.
7Inter-segmentsales57.
3414.
7—40.
7——(512.
7)—Totalturnover2,367.
55,032.
6113.
91,364.
81,919.
81,233.
8(512.
7)11,519.
7Segmentresults675.
643.
222.
382.
449.
1198.
11,070.
7Otherincome/(charge)291.
7Unallocatedcorporateexpenses(222.
4)Operatingprofitbeforefinancingcostsandincome1,140.
0Financingcosts(231.
7)Financingincome157.
1Operatingprofit1,065.
4ShareofresultsofAssociatedcompanies37.
242.
0167.
3——3.
5250.
0Jointlycontrolledentities203.
462.
0579.
0——1.
1845.
5Profitbeforetaxation2,160.
9Taxation(453.
0)Profitaftertaxation1,707.
9Minorityinterests(579.
0)Profitattributabletoshareholders1,128.
9NotestoCondensedAccount122.
Segmentinformation(continued)(a)Businesssegments(continued)Sixmonthsended31December2003PropertyinvestmentandInfra-Telecom-DepartmentElimin-Con-developmentServicestructuremunicationsstoresOthersationssolidatedHK$mHK$mHK$mHK$mHK$mHK$mHK$mHK$mExternalsales1,655.
05,724.
9244.
71,356.
71,571.
5828.
3—11,381.
1Inter-segmentsales53.
3661.
2—3.
8——(718.
3)—Totalturnover1,708.
36,386.
1244.
71,360.
51,571.
5828.
3(718.
3)11,381.
1Segmentresults301.
9346.
9108.
737.
814.
324.
7834.
3Otherincome/(charge)(49.
3)Unallocatedcorporateexpenses(216.
5)Operatingprofitbeforefinancingcostsandincome568.
5Financingcosts(522.
0)Financingincome134.
4Operatingprofit180.
9ShareofresultsofAssociatedcompanies28.
227.
3136.
7——(101.
7)90.
5Jointlycontrolledentities(30.
4)62.
2490.
9——4.
0526.
7Profitbeforetaxation798.
1Taxation(255.
8)Profitaftertaxation542.
3Minorityinterests(305.
9)Profitattributabletoshareholders236.
4(b)GeographicalsegmentsOperatingprofitbeforefinancingcostsTurnoverandincomeHK$mHK$mSixmonthsended31December2004HongKongandSoutheastAsia7,680.
3858.
4MainlandChina3,839.
4281.
611,519.
71,140.
0Sixmonthsended31December2003HongKongandSoutheastAsia8,149.
6577.
0MainlandChina3,231.
5(8.
5)11,381.
1568.
5Salesarebasedonthecountriesinwhichthecustomersarelocated.
TheturnoverandoperatingprofitbeforefinancingcostsandincomederivedfromtheGroup'sactivitiesinSoutheastAsiaconstitutedlessthan10.
0%oftheGroup'sturnoverandoperatingprofitbeforefinancingcostsandincome.
NotestoCondensedAccount133.
Otherincome/(charge)Sixmonthsended31December20042003HK$mHK$mAmortisationofgoodwillofsubsidiaries—(4.
9)Lossondilutionofinterestsinsubsidiaries(76.
5)(6.
1)Deficitonliquidationofsubsidiaries(4.
0)—Impairmentlosson:Fixedassets(8.
8)—Intangibleassets(59.
0)—Lossondisposalof:Associatedcompanies(2.
1)(2.
5)Fixedassets—(26.
7)Otherinvestments—(29.
6)Subsidiaries—(5.
4)Profitondisposalof:Associatedcompanies—0.
2Fixedassets—8.
3Jointlycontrolledentities6.
46.
8Otherinvestments361.
3—Subsidiaries—3.
5Provisionfor:Amountduefromjointventure—(2.
5)Amountduefromassociatedcompanies(33.
9)—Amountduefromjointlycontrolledentities(6.
7)—Doubtfuldebts(55.
8)(4.
7)Depositsforproposedinvestments(35.
6)—Otherinvestments(5.
9)—Provisionforinvestmentinjointlycontrolledentities(2.
0)—Shareofresultsofotherinvestments—(10.
3)Writedownofstockstonetrealisablevalue(10.
3)(41.
5)Writebackprovisionfordiminutioninvalueof:Jointlycontrolledentities38.
0—Propertiesheldforsale176.
344.
1Writebackprovisionfor:Amountduefromjointventures10.
315.
1Doubtfuldebts—4.
2Otherinvestments—2.
7291.
7(49.
3)NotestoCondensedAccount143.
Otherincome/(charge)(continued)AsubsidiaryoftheGroupenteredintoanagreementinprinciple(the"AIP")on12December2003withWuhanCityConstructionFundManagementOffice("WuhanFundOffice")forthedisposalofitsapproximately48.
86%effectiveinterestinWuhanBridgeConstructionCo.
,Ltd.
("WBC"),asino-foreignjointstockcompanyincorporatedinMainlandChinawhichoperatedtheYangtzeRiverBridgeNo.
2inWuhan.
TheconsiderationisRMB1.
18billion(equivalenttoapproximatelyHK$1.
1billion).
Asat31December2004,theGrouphasreceivedmorethan95%oftheagreedconsiderationandallthemajortermsandconditionsoftheAIPhavebeenfulfilled.
Thegainarisingfromthedisposalhasbeenincludedinprofitondisposalofotherinvestments.
4.
OperatingprofitSixMonthsended31December20042003HK$mHK$mOperatingprofitisstatedafterchargingthefollowing:Costofinventoriessold3,432.
61,818.
8DepreciationLeasedfixedassets44.
352.
1Ownedfixedassets371.
2584.
6NotestoCondensedAccount155.
TaxationSixMonthsended31December20042003HK$mHK$mCompanyandsubsidiariesHongKongprofitstax179.
888.
4Overseastaxation37.
97.
7Overprovisioninpriorperiods9.
8—Deferredtaxationrelatingtotheoriginationandreversaloftemporarydifferences20.
871.
5248.
3167.
6AssociatedcompaniesHongKongprofitstax72.
734.
0Overseastaxation5.
6—Deferredtaxation0.
91.
379.
235.
3JointlycontrolledentitiesHongKongprofitstax59.
018.
3Overseastaxation53.
535.
1Deferredtaxation13.
0(0.
5)125.
552.
9453.
0255.
8HongKongprofitstaxisprovidedattherateof17.
5%(2003:17.
5%)ontheestimatedassessableprofitsfortheperiod.
TaxonoverseasprofitshasbeencalculatedontheestimatedtaxableprofitsfortheperiodattherateoftaxationprevailinginthecountriesinwhichtheGroupoperates.
NotestoCondensedAccount166.
EarningspershareThecalculationofbasicearningspershareisbasedontheprofitattributabletoshareholdersofHK$1,128.
9million(2003:HK$236.
4million)and3,457.
4million(2003:theweightedaverageof2,288.
8million)sharesinissueduringtheperiod.
Nodilutiveeffectivewasresultedontheearningspershareforthecurrentandpreviousperiodaftertakingintoaccountthedilutiveeffectoftheconvertiblebonds.
7.
IntangibleassetsLicencesNegativeandDevelopmentGoodwillgoodwillsoftwareCostsTotalHK$mHK$mHK$mHK$mHK$mNetbookvalueat1July2004127.
4(53.
5)—5.
479.
3Derecognition—53.
5——53.
5Acquisitionofinterestsinsubsidiaries79.
7———79.
7Impairmentcharge(0.
3)0.
3)Netbookvalueat31December2004206.
8——5.
4212.
2LicencesandsoftwarerepresentpaymentsmadetoPrediWaveCorporation("PrediWave"),aformerassociatedcompany,forpurchaseofsoftwareandlicensesrelatingtobillingsystemforPrediWave'sinteractivetelevision,video-on-demandandotherdigitalbroadcastingandrelatedtechnology(the"Technology"),whicharethesubjectoftheNWTMTComplaint(Note17).
AsaresultoftheNWTMTComplaint,theDirectorsdecidedtodiscontinuetheuseoftheTechnologyinlaunchingtheinteractivetelevisionservicesinthePRC,andaccordingly,afullimpairmentchargeofHK$401.
2millionhasbeenmadeagainsttheseassetsin2004.
8.
FixedassetsTelecom-Tollroads,municationAssetsbridgesequipmentunderInvestmentHotelLandandandportandOthercon-propertiespropertiesbuildingfacilitiessystemsassetsstructionTotalHK$mHK$mHK$mHK$mHK$mHK$mHK$mHK$mNetbookvalueat1July200417,492.
78,192.
02,566.
82,005.
71,664.
61,225.
4750.
433,897.
6Translationdifference7.
6)—(7.
6)Acquisitionofsubsidiaries0.
3—0.
3Additions36.
82.
64.
1—130.
8139.
810.
7324.
8Disposals(26.
4)—(11.
7)—(6.
1)(11.
3)(7.
7)(63.
2)Reclassification——9.
1———(9.
1)—Depreciation,amortisation,andimpairmentcharge——(37.
7)(36.
5)(154.
7)(150.
8)(1.
3)(381.
0)Netbookvalueat31December200417,503.
18,194.
62,530.
61,969.
21,634.
61,195.
8743.
033,770.
9NotestoCondensedAccount179.
OtherassetsIn2002,NewWorldTMTLimited("NWTMT")enteredintoanoptionagreement(the"OptionAgreement")withaPRCentityfortheacquisition(the"Acquisition")ofaninterestinafibreopticbackbonenetwork("Network")inthePRC,andsubjecttocertainconditionsasstipulatedintheOptionAgreement,NWTMTisentitledtoacquireupto70%interestintheNetworkwithin2yearsfromthedateoftheOptionAgreementataconsiderationofapproximatelyHK$2,563.
0million.
Asat31December2004,approximatelyHK$1,531.
2million(30June2004:HK$1,531.
2million)waspaid,whichhasbeenincludedinotherassets,asadepositfortheAcquisitionandthecounterpartiesagreedon3September2004thatdepositspaidforproposedinvestments,loansandotheramountsowingtoNWTMTtotallingHK$2.
16billiontogetherwithinterestwouldbefullyrepaidtoNWTMTby30November2004.
Thetransactionhasnotbeencompletedbythecounterpartiesuptothedateofthisinterimreport.
ThevalueoftheNWTMTinvestmentcostwassubstantiatedinOctober2004,whentheNetworkassetswereappraisedbyanindependentvaluationfirm.
TheassessedvalueoftheNetwork,onapro-ratabasis,isslightlyhigherthantheNWTMTinvestmentcost.
However,NWTMTretainsitsoptiontore-entertheprojectifthenetworkinvestmentisnotconcluded.
10.
DebtorsandprepaymentsDebtorsandprepaymentsincludetradedebtors,amountsadvancedtoinvesteecompanies,depositsandprepayments.
TheGrouphasvariouscreditpoliciesfordifferentbusinessoperationsdependingontherequirementsofthemarketsandbusinessinwhichthesubsidiariesoperate.
Salesproceedsreceivablesfromsaleofpropertiesandretentionmoneyreceivablesinrespectofconstructionandengineeringservicesaresettledinaccordancewiththetermsofrespectivecontracts.
Ageinganalysisoftradedebtorsisasfollows:AsatAsat31December30June20042004HK$mHK$mCurrentto30days4,359.
05,019.
431to60days300.
1283.
5Over60days979.
71,509.
25,638.
86,812.
1NotestoCondensedAccount1811.
CreditorsandaccruedchargesIncludedincreditorsandaccruedchargesaretradecreditorswiththeirageinganalysisasfollows:AsatAsat31December30June20042004HK$mHK$mCurrentto30days4,934.
13,418.
531to60days377.
7280.
7Over60days1,429.
21,657.
56,741.
05,356.
712.
LongtermliabilitiesAsatAsat31December30June20042004HK$mHK$mBankloansSecured7,473.
59,861.
8Unsecured14,159.
313,986.
5Obligationsunderfinanceleaseswhollyrepayablewithinfiveyears112.
1109.
121,744.
923,957.
4Convertiblebonds1,350.
01,350.
0Loansfromminorityshareholders1,826.
91,955.
2Deferredincome485.
7478.
7Provisionforlongservicepayments75.
087.
7Longtermaccountspayable—86.
025,482.
527,915.
0Amountsrepayablewithinoneyearincludedincurrentliabilities(5,871.
7)(6,046.
0)19,610.
821,869.
0NotestoCondensedAccount1912.
Longtermliabilities(continued)ObligationsSecuredUnsecuredunderbankbankfinanceloansloansleasesTotalHK$mHK$mHK$mHK$mThematurityoflongtermborrowingsat31December2004isasfollows:Oflessthanoneyear3,620.
12,199.
751.
95,871.
7Ofmorethanoneyear,butnotexceedingtwoyears1,611.
04,722.
818.
76,352.
5Ofmorethantwoyears,butnotexceedingfiveyears2,061.
57,199.
510.
69,271.
6Ofmorethanfiveyears180.
937.
330.
9249.
17,473.
514,159.
3112.
121,744.
9Thematurityoflongtermborrowingsat30June2004isasfollows:Oflessthanoneyear3,941.
21,950.
867.
95,959.
9Ofmorethanoneyear,butnotexceedingtwoyears3,443.
73,524.
837.
97,006.
4Ofmorethantwoyears,butnotexceedingfiveyears2,226.
08,501.
53.
310,730.
8Ofmorethanfiveyears250.
99.
4—260.
39,861.
813,986.
5109.
123,957.
4NotestoCondensedAccount2013.
SharecapitalAsatAsatAsatAsat31December31December30June30June2004200420042004No.
ofsharesNo.
ofshares(million)HK$m(million)HK$mAuthorised:SharesofHK$1.
00eachBalanceatbeginningoftheperiod(Notea)10,000.
010,000.
02,500.
02,500.
0Increasedduringtheperiod——7,500.
07,500.
0Balanceatendoftheperiod10,000.
010,000.
010,000.
010,000.
0Issuedandfullypaid:SharesofHK$1.
00eachBalanceatbeginningoftheperiod3,457.
33,457.
32,219.
52,219.
5Placementofshares(Noteb)——250.
0250.
0RightsIssue(Notec)——987.
8987.
8Balanceatendoftheperiod3,457.
33,457.
33,457.
33,457.
3(a)Bytwoordinaryresolutionspassedon2December2003and22March2004,theauthorisedsharecapitaloftheCompanywasincreasedfromHK$2,500.
0milliontoHK$10,000.
0millionbythecreationofanadditional7,500.
0millionsharesofHK$1.
00each.
(b)In2004,250.
0millionshareswereissuedatHK$4.
9044persharetoprovidefundsforgeneralworkingcapitaloftheGroup.
(c)In2004,987,817,877sharesofHK$1.
00eachwereissuedatHK$5.
40persharebywayofrightsissueonthebasisoftworightssharesforeveryfiveshares.
Theproceedsoftherightsissueweretorepaytheoutstandingconvertiblebond,topaylandconversionpremiumforexistingagriculturallandbankandpartlyusedtoprovideforgeneralworkingcapitaloftheGroup.
NotestoCondensedAccount2114.
CommitmentsAsatAsat31December30June20042004HK$mHK$m(a)Capitalcommitments(i)ContractedbutnotprovidedforFixedassets348.
2566.
1Anassociatedcompany—12.
2Jointlycontrolledentities467.
5326.
4Otherinvestments70.
370.
3886.
0975.
0(ii)AuthorisedbutnotcontractedforFixedassets73.
115.
7(b)TheGroup'sshareofcapitalcommitmentscommittedbythejointlycontrolledentitiesnotincludedaboveareasfollows:Contractedbutnotprovidedfor296.
9205.
1Authorisedbutnotcontractedfor93.
7268.
4390.
6473.
5(c)Asat31December2004,theGrouphadissuedperformanceguaranteesamountingtoapproximatelyHK$534.
3million(30June2004:HK$889.
5million),inrespectofmortgagefacilitiesgrantedbycertainbanksrelatingtothemortgageloansarrangedforcertainpurchasersofpropertyprojectsdevelopedbyasubsidiaryandcertainjointlycontrolledentitiesoftheGroup.
Pursuanttothetermsoftheperformanceguarantees,upondefaultinmortgagepaymentsbythesepurchasers,theGroupisresponsibletorepaytheoutstandingmortgageprincipalstogetherwithaccruedinterestowedbythedefaultedpurchaserstothebanksandtheGroupisentitledtotakeoverthelegaltitleandpossessionoftherelatedproperties.
NotestoCondensedAccount2214.
Commitments(continued)(d)AsubsidiaryandcertainjointlycontrolledentitiesarepartiestoagreementswiththirdpartiesinrespectofthejointdevelopmentofContainerTerminal9("CT9")inHongKong,therelatedberthswaparrangementandthefundingthereof.
TheGroup'sshareofcapitalcommitmentsasat31December2004wasHK$112.
2million(30June2004:HK$101.
4million)hasbeendisclosedin(b)above.
(e)TheGrouphascommittedtoprovidesufficientfundsintheformsofcapitalandloancontributionstocertainjointlycontrolledentitiesundervariousjointventurecontractstofinancerelevantinfrastructureprojects.
TheDirectorsestimatethattheGroup'sshareofprojectedfundsrequirementsoftheseprojectswouldbeapproximatelyHK$173.
0million(30June2004:HK$33.
0million)whichrepresentstheattributableportionofthecapitalandloancontributionstobemadetothejointlycontrolledentities.
(f)TheabovecapitalcommitmentdidnotincludecommitmentforpurchaseoffixedassetsandintangibleassetswhicharesubjectofthePrediWaveComplaint(Note17).
15.
ContingentliabilitiesAsatAsat31December30June20042004HK$mHK$mGuaranteesforperformancebondsinrespectof:ConstructioncontractsundertakenbytheGroup1,781.
11,488.
4Others77.
4332.
3Guaranteesforcreditfacilitiesgrantedto:Associatedcompanies427.
3418.
9Investeecompaniesincludedunderotherinvestments4.
24.
2Jointlycontrolledentities5,398.
85,142.
1Indemnitytonon-whollyownedsubsidiariesforPRCtaxliabilities1,916.
71,925.
29,605.
59,311.
1Includedintheabove,acorporateguaranteehasbeengivenbyasubsidiaryinfavourofcertainbanksforbankingfacilitiesgrantedtoAsiaContainerTerminalsLimited("ACT"),ajointlycontrolledentityofCSXWorldTerminalsHongKongLimited("CSXWTHK"),anassociatedcompanyoftheGrouptotheextentofapproximatelyHK$1,323.
4millionasat31December2004(30June2004:HK$858.
0million),inproportiontotheGroup'sinterestinACT.
Theproportionateamountutilisedagainstsuchfacilitiesat31December2004whichwassecuredbytheguaranteeamountedtoapproximatelyHK$643.
9million(30June2004:HK$351.
4million).
NotestoCondensedAccount2315.
Contingentliabilities(continued)CSXWTHKhasagreedtocounter-indemnifytheGroupthecorporateguaranteeasat31December2004ofapproximatelyHK$507.
0million(30June2004:HK$507.
0million)asincludedabovegiveninrelationtoACT.
ExceptforpendinglitigationsasreferredtoinNote17tothecondensedaccount,theGrouphasdisputeswithcertainjointventurepartnersinrespectofcertainpropertydevelopmentprojectsinthePRCandahotelprojectinMalaysia.
ForthePRCpropertydevelopmentprojects,nostatementofclaimssettingoutdetailsoftheclaimshadbeenservedbythePRCjointventurepartnertotheGroupasat15March2005.
TheGroup,however,hadmadeaclaimagainstsuchjointventurepartner.
ForthehotelprojectinMalaysia,thetrialwasheardandadjournedon14July2003andajudgmentinfavouroftheGroupwasmadeon1April2004.
Thejointventurepartnerlodgedanappealagainstthejudge'sjudgmentwhichisscheduledtobeheardinJune2005.
TheDirectorsoftheCompanyhaveobtainedlegaladviceontheaforementionedmattersandareoftheopinionthatthematterswillnothaveanymaterialadverseimpactonthefinancialpositionoftheGroup.
16.
RelatedpartytransactionsThefollowingisasummaryofsignificantrelatedpartytransactionsduringtheperiodcarriedoutinthenormalcourseoftheGroup'sbusiness:Sixmonthsended31December20042003HK$mHK$mTransactionswithaffiliatedcompaniesInterestincome37.
648.
4Managementfeeincome12.
252.
8Provisionofcontractingworkservice305.
1416.
7TransactionswithotherrelatedpartiesRentalincome10.
812.
9Theserelatedpartytransactionswereconductedinaccordancewiththetermsasdisclosedinthelastannualaccounts.
NotestoCondensedAccount2417.
Pendinglitigations(a)InMay2004,NWTMTfiledcomplaintstotheSuperiorCourtoftheStateofCaliforniafortheCountyofSantaClaraintheUnitedStatesofAmerica("US")("NWTMTComplaint")againstthePrediWaveCompaniesandMrTonyQu,thepresidentandfounderofthePrediWaveCompanies.
UndertheNWTMTComplaint,NWTMTallegedthat,inrelianceoftherepresentationsgivenbyMrTonyQuandPrediWave,NWTMTenteredintovariousagreementswiththePrediWaveCompaniesunderwhichtheGroupinvestedinthePrediWaveCompaniesandplacedvariouspurchaseordersforgoodsandservicesrelatingtothetechnology(the"Technology")ofvideo-on-demandandotherdigitalbroadcastingandrelatedtechnologyandaddedvalueservices.
TheGrouphadpaidapproximatelyHK$5billiontothePrediWaveCompaniesforinvestmentsinandloanstothePrediWaveCompanies,andpurchasesofgoodsandservicesfromPrediWave.
NWTMTcomplainedofvariousbreaches,inrelationtogoodsandservicesrelatingtotheTechnology,byMrTonyQuandthePrediWaveCompaniesrelatingtotheparties'agreements.
Accordingly,NWTMTclaimeddamagesforanamounttobedeterminedattrialtogetherwithinterest,rescissionofallagreements,restitutionofallmoniesobtainedfromtheGroup,punitiveandexemplarydamages,costsoflegalproceedingsandotherdeclaratoryreliefandequitablerelief.
ThetotalmonetaryamountsoughtbyNWTMTinthelawsuitexceedsUS$700.
0million(equivalenttoapproximatelyHK$5,460.
0million).
ThedirectorsofNWTMThavebeenadvisedbytheirexternallegalcounselthattheNWTMTComplaintwillnotbeconcludedinashortperiodoftimeandtheoutcomeoftheNWTMTComplaintisuncertain.
BasedontheunauditedmanagementaccountsofthePrediWaveCompaniesasat31December2003whichwereobtainedpriortothecommencementoftheNWTMTComplaint,therewasabalanceofapproximatelyUS$344.
0million(equivalenttoapproximatelyHK$2,683.
0million)intheirbankaccounts.
InJune2004,withtheobjectiveofpreventingimproperwithdrawalsoffunds,MrJimmyLi,thedirectornominatedbyNWTMTtocertainPrediWaveCompaniessoughttoexercisetheco-signingrightsinrelationtowithdrawalsoffundsinexcessofUS$0.
5millionfromthebankaccountsofcertainPrediWaveCompaniesbyrequestingatemporaryrestrainingorderfromthecourt.
However,suchrequestwasdeniedbytheSuperiorCourtoftheStateofCaliforniafortheCountyofSantaClaraintheUS.
InAugust2004,theSuperiorCourtoftheStateofCaliforniafortheCountyofSantaClaraintheUSmadeanorderinfavourofMrJimmyLipermittinghimtoinspectallcorporatebooksandrecordsofcertainPrediWaveCompanies.
MrJimmyLiisassistedbyanaccountingfirmintheUStoinspectthebooksandrecordsbutnomeaningfulfinancialinformationhasbeenextractedasat31December2004.
NotestoCondensedAccount2517.
Pendinglitigations(continued)AsthedirectorsofNWTMTwereunabletofreezethebankaccountsorenforcetheco-signingrights,thedirectorsofNWTMTconsiderthattheycannoteffectivelymonitortheutilisationoffundsbythePrediWaveCompanies.
NotwithstandingthatthebankbalancesofthePrediWaveCompanieswereapproximatelyUS$344.
0millionasatDecember2003basedontheirunauditedmanagementaccounts,theDirectorsexpectthattheutilisationoffundsforlegalcostsandothercausesbeyondtheircontrolwillbesignificantthroughouttheperioduptothedatewhentheNWTMTComplaintisconcluded.
Inaddition,intheabsenceoftheavailabilityofmeaningfulandupdatedfinancialinformationonthePrediWaveCompaniesandgiventheuncertaintyofthetimingandtheoutcomeofthelitigationwhichwouldhaveaconsequentialeffectontheamountofassetsrecoverable,intheyearended30June2004,theDirectorsoftheCompanyhaveconcludedthatafullprovisionofHK$3,082.
0millionhasbeenmadeagainsttheGroup'sinvestmentsinthePrediWaveCompanies,loanstothePrediWaveCompaniesanddepositspaidtoPrediWaveismostappropriate.
(b)InMay2004,PrediWavefiledcomplaintstotheSuperiorCourtoftheStateofCaliforniafortheCountyofLosAngelesintheUSagainstNWTMT(the"PrediWaveComplaint").
UnderthePrediWaveComplaint,PrediWaveallegedthatNWTMThadfailedtomakefullpaymentsunderthreepurchaseordersandoneagreementforgoodsandservicesdeliveredorlicensesgrantedbyPrediWavetotheGrouprelatingtotheTechnologywithanoutstandingamountofapproximatelyUS$58.
9million(equivalenttoapproximatelyHK$459.
0million).
PrediWaveclaimeddamagesagainstNWTMTinanamounttobeprovedattrial,butnotlessthanUS$58.
0million(equivalenttoapproximatelyHK$452.
0million)togetherwithinterestandcostsoflegalproceedings,andadeclarationthatNWTMTshouldpayPrediWavetheprofitsPrediWavewouldhavereceivedhadNWTMTperformeditsobligationsundervariouspurchaseorderandagreementsandthatPrediWaveshouldbeentitledtoretainthedepositsmadebyNWTMTthereunder.
TheDirectorsareoftheviewthattheGrouphasproperandvaliddefencestothePrediWaveComplaint,andaccordingly,noprovisionforcommitment/losshasbeenaccountedforintheaccounts.
(c)Uptothedateofthisreport,PrediWavedroppeditscomplaintsagainstNWTMTtotheSuperiorCourtoftheStateofCaliforniafortheCountyofLosAngeles.
ItthenfiledacounterclaimagainstNWTMTtotheSuperiorCourtoftheStateofCaliforniafortheCountyofSantaClara.
Asatthedateofthisinterimreport,theDirectorsareoftheviewthatthecurrentprovisionrelatingtoPrediWaveshouldbeadequatewithoutmakinganyprovisionforPrediWave'scounterclaimagainstNWTMTanditisalsoappropriatenottowritebackanyprovision.
NotestoCondensedAccount2618.
Postbalancesheetdateevents(a)On4February2005,asubsidiaryofNWSHoldingsLimited("NWSH")enteredintoasharesaleagreementwithPSAInternationalPteLtd("PSA")todisposeofits31.
4%interestinAsiaContainerTerminalsHoldingsLimited("ACTH"),aninvestmentholdingcompanywithAsiaContainerTerminalsLimited("ACT")asitswhollyownedsubsidiarycompany,andtheshareholderloansowingfromACTHataconsiderationofHK$1.
9billion.
ACTisengagedintheoperationofContainerTerminalNo.
8WestinKwaiChung,HongKong("CT8W").
ThecompletionofthedisposalisexpectedinMarch2005.
Onthesameday,anothersubsidiaryofNWSHenteredintoanothersharesaleagreementwithPSAtodisposeofitsentireinterestsinKeenSalesLimited,awhollyownedsubsidiarycompanyoftheGroup,whichindirectlyholds33.
34%inCSXWorldTerminalsHongKongLimited("CSXWTHK"),currentlytheoperatorofContainerTerminalNo.
3("CT3"),ataconsiderationofHK$1.
1billion.
Thedisposalwascompletedon21February2005.
Uponcompletion,NWSHenteredintoatrustdeed,pursuanttowhichPSAwouldholdthebeneficialtitleandinterestinandtotheindirect16.
67%shareholdinginterestinATLLogisticsCentreHongKongLimited("ATL")forthebenefitofNWSHasifsuchinterestshadbeenretainedintheirentiretybyNWSH.
Theaforesaiddisposalswouldgiverisetoagainondisposal,netofminorityinterests,ofapproximatelyHK$0.
97billion.
(b)On18February2005,theCompanyenteredintoanunderwritingagreementwithNewWorldChinaLandLimited("NWCL")tounderwriteinfulltheproposedrightsissueofNWCL.
ThemaximumamountpayablebytheCompanyfortheunderwrittenshareswillbeHK$2,163.
7million.
19.
ComparativefiguresCertaincomparativefigureshavebeenreclassifiedtoconformwiththecurrentperiod'spresentation.
NotestoCondensedAccount27DisclosurePursuanttoRule13.
22oftheListingRulesInaccordancewiththerequirementsunderRule13.
22oftheListingRules,theDirectorsoftheCompanyreportedbelowthedetailsofadvancesto,andguaranteesgivenforthebenefitof,itsassociatedcompaniesandjointlycontrolledentities(collectivelyas"affiliatedcompanies")asat31December2004.
Thefinancialassistance,inaggregate,exceeds8%oftheCompany'smarketcapitalisationasat31December2004.
InaggregatetheGrouphadadvancedanamountofHK$18,131.
1million(30June2004:HK$18,457.
7million)toaffiliatedcompanies,guaranteedbankloansandothercreditfacilitiesforthebenefitoftheaffiliatedcompaniesintheamountofHK$5,826.
1million(30June2004:HK$5,561.
0million)andcontractedtofurtherprovideanaggregatedamountofHK$1,609.
1million(30June2004:HK$1,570.
6million)incapitalandloanstoaffiliatedcompanies.
TheadvancesareunsecuredandareinterestfreeexceptforanaggregateamountofHK$8,374.
7million(30June2004:HK$8,417.
2million)whichcarryinterestrangingfrom0.
6%above3-monthHIBORto14.
0%perannum.
OtherthanamountsofHK$299.
1million(30June2004:HK$311.
5million),HK$762.
6millionandHK$287.
8millionwhicharerepayablebyinstalmentsuptoDecember2016,2010and2008respectively,theotheradvanceshavenofixedrepaymentterms.
Inaddition,inaccordancewiththerequirementsunderRule13.
22theListingRules,theCompanyisrequiredtoincludeinitsinterimreportaproformacombinedbalancesheetofitsaffiliatedcompanieswhichwouldincludesignificantbalancesheetclassificationsandstatetheattributableinterestoftheCompanyintheaffiliatedcompanies.
TheCompanyhasnumerousaffiliatedcompaniesandtheDirectorsareoftheopinionthatitisnotpracticalnormeaningfultoprepareaproformacombinedbalancesheetandsuchinformationmaybemisleading.
PursuanttoRule13.
22oftheListingRules,theCompanymadeanapplicationto,andreceivedawaiverfrom,theStockExchangeasanalternativetoprovidethefollowingstatement.
Asat31December2004,thecombinedindebtedness,capitalcommitmentsandcontingentliabilitiesasreportedbysuchaffiliatedcompanies(includingamountsowingtotheGroup)amountedtoapproximatelyHK$56,373.
7million(30June2004:HK$59,198.
5million),HK$4,486.
9million(30June2004:HK$3,406.
9million)andHK$1,519.
3million(30June2004:HK$3,654.
9million)respectively.
28InterimDividendThedirectorshavedeclaredaninterimdividendforthefinancialyearending30June2005inscripformequivalenttoHK$0.
10persharewithacashoptiontoshareholdersregisteredon8April2005.
SubjecttotheListingCommitteeofTheStockExchangeofHongKongLimited("theStockExchange")grantinglistingofandpermissiontodealinthenewshares,eachshareholderwillbeallottedfullypaidshareshavinganaggregatemarketvalueequaltothetotalamountwhichsuchshareholderscouldelecttoreceiveincashandthattheybegiventheoptiontoelecttoreceivepaymentincashofHK$0.
10pershareinsteadoftheallotmentofshares.
Fulldetailsoftheinterimscripdividendwillbesetoutinalettertobesenttoshareholderstogetherwithaformofelectionforcashonorabout13May2005.
BookCloseDateBookclosedates(Bothdaysinclusive):1April2005to8April2005LatesttimetolodgetransferwithShareRegistrar:4:00p.
m.
on31March2005AddressofShareRegistrar:TengisLimited,GroundFloor,BankofEastAsiaHarbourViewCentre,56GloucesterRoad,Wanchai,HongKongPurchase,SaleorRedemptionofListedSecuritiesTheCompanyhasnotredeemedanyofitslistedsecuritiesduringthesixmonthsended31December2004.
NeithertheCompanynoranyofitssubsidiarycompanieshaspurchasedorsoldanyoftheCompany'slistedsecuritiesduringthesixmonthsended31December2004.
CodeofBestPracticeTheCompanycompliedwiththeCodeofBestPracticeassetoutinAppendix14oftheListingRulesduringthesixmonthsended31December2004,exceptthatthenon-executivedirectorsoftheCompanyarenotappointedforspecifictermsbutaresubjecttoretirementbyrotationandre-electionattheannualgeneralmeetinginaccordancewiththearticlesofassociationoftheCompany.
ModelCodeforSecuritiesTransactionsbyDirectorsTheCompanyhasadoptedacodeofconductregardingdirectors'securitiestransactionsontermsnolessexactingthantheModelCodeforSecuritiesTransactionsbyDirectorsassetoutinAppendix10oftheListingRules.
BasedonspecificenquiryofthedirectorsoftheCompany,allthedirectorsconfirmedthattheyhadcompliedwiththerequiredstandardsofthesaidcodeduringthesixmonthsended31December2004.
29DetailsofChargesonGroupAssetsAsat31December2004,theGroup'sfixedassets,propertiesheldforsaleandjointpropertydevelopmentprojectsofHK$13,118.
7million(30June2004:HK$13,122.
1million),HK$1,910.
8million(30June2004:HK$3,055.
1million)andHK$1,053.
8million(30June2004:HK$1,053.
8million)respectivelyhavebeenpledgedassecuritiesforcreditfacilitiesgrantedtotheGroup.
TheGroup'sinterestsincertainco-operativejointventureshavebeenpledgedassecurityforaloangrantedtotheGroup.
Restrictedbankbalancesarefundswhicharepledgedtosecurecertainshorttermloansandlongtermloans.
AuditCommitteeTheAuditCommitteehasreviewedwithmanagementtheaccountingprinciplesandpracticesadoptedbytheGroupanddiscussedinternalcontrolsandfinancialreportingmattersincludingareviewoftheunauditedInterimAccountsforthesixmonthsended31December2004withtheDirectors.
BusinessReview30BusinessReviewHongKongPropertyDevelopmentThepropertymarketinHongKongwasonanupwardtrendin2004.
Duringtheperiodunderreview,theGroup'sshareofpropertysalesrevenuesamountedtoapproximatelyHK$1.
2billion,mainlyfromBon-Point,ParcPalaisandSkyTower.
InJanuary2005,TheMertonatKennedyTownwaslaunchedwithoverwhelmingresponseandwillhaveHK$3.
8billioncashcontributiontotheGroup.
TheGroupnowhasalandbankof5.
7millionsq.
ft.
readyforimmediatedevelopmentandatotal20millionsq.
ft.
ofagriculturallandreserve.
ThelandbankexcludingTheMertonandthesixprojectsforsalein2005,standsat4millionsq.
ft.
,whichissufficientfordevelopmentneedsinthenextthreeyears.
AttributableGFADevelopmentprojects(sq.
ft.
)HongKongIsland748,650Kowloon1,895,623NTexcludingareaspendingagriculturallandconversion3,011,221Total5,655,494TotallandareaAttri.
landareaAgriculturallandbankbylocation(sq.
ft.
)(sq.
ft.
)YuenLong14,560,00013,077,000Shatin/TaiPo3,414,0002,528,000Fanling2,310,0002,310,000SaiKung1,905,0001,668,000TuenMun120,000120,000Total22,309,00019,703,000TheGroupisactivelyliaisingwiththegovernmentonagriculturallandconversionandisseekingvarioussourcestoreplenishitslandbank,suchaspublicauctionsandtenderingfordevelopmentprojectsofferedbyUrbanRenewalAuthorityandthetworailcompanies.
In2005,theGrouphas6projectswitharound2,000unitsforsale.
ProjectstobelaunchedinthecomingmonthsincludeIslandRoad,Black'sLink,TheGrandioseinTseungKwanO,LauFauShanandFuTeiprojects.
BusinessReview31TotalGFANumberGroup'sProjectsforsalein2005(sq.
ft.
)ofunitsInterest(%)CaldecottHill(郝德傑山)77,2103833.
3333&35IslandRoad(香島道33及35號)43,067843.
006–10Black'sLink(布力徑6-10號)34,763980.
00TheGrandiose,TseungKwanO(將軍澳君傲灣)1,041,9231,47245.
00LotNo.
3569inDD129,LauFauShan(流浮山項目)66,520120100.
003TuenKwaiRoad,FuTei(虎地屯貴路3號)204,63232096.
46Total1,468,1151,967HongKongPropertyInvestmentTheopeningofAvenueofStarsandKCREastTsimshatsuiStationinAprilandOctober2004respectivelyhasboostedpedestriantrafficatNewWorldCentre.
Bothoccupancyandaveragerentalraterecordedstablegrowth.
TheGroupenteredintoatenancyagreementwithananchortenanttoleasethe115,000-sq.
ft.
AmazonshoppingmallinNewWorldCentrefromSeptember2005.
Subjecttothetenant'sEGMapprovingthetenancyagreement,thefirstSogoDepartmentStoreinKowloonwillbeopened.
ThiswillfurtherenhancepedestriantrafficforNewWorldCentreandposeopportunityforpositiverentalrevision.
HotelsHoteloperationsbenefitedfromtherevivingtouristindustryandeconomicgrowthinHongKong.
GrandHyattHongKong,RenaissanceHarbourViewHotelandNewWorldRenaissanceHotelhaveimprovedsignificantlyinboththeoccupancyrateandroomrate.
Meanwhile,ourfourhotelsinSoutheastAsiamaintainedmoderategrowth.
WiththeopeningofHongKongDisneylandinfall2005,thehotelsectorisexpectedtobenefitfromasurgeinvisitorarrivalsfromMainlandandoverseas.
BusinessReview32NWSHoldingsLimited("NWSH")ServiceTheHongKongeconomyhasexhibitedastrongandbroad-basedupturn.
ThegeneralperformanceofServiceoperations,withtheexceptionofconstructionandengineering,wassatisfactory.
HKCECattainedexcellentresult,hosting777eventsattractingoverthreemillionguests,thesecondhighestattendanceinitshistory.
HKCEChasjustbeennamedAsia'sLeadingConferenceCentreforthethirdconsecutiveyearforitsworldstandardservice.
SkyConnectionLimited,whichhasexclusiverightstoretaildutyfreeliquorandtobaccoinHongKongInternationalAirportandferryterminals,deliveredsatisfactoryresults.
UrbanPropertyManagementcontinuedtocontributeastableprofittotheGroup.
KiuLokPropertyManagementcontinuestofocusontheMainlandChinamarketandwasawardedapre-openingconsultancycontracttomarketandmanagethelandmark"MerchandiseCity"inTianjin.
Constructionoperationshavebeenoperatedinaseverecompetitionenvironment.
Itwasevidencedthatthedropinprofitmarginandthesurgeofthecontractriskshadresultedinsubstantialexposureswithsomeprojectsmakinglossesorrequiringprovision.
Transportbusinessescontinuetofacethetoughchallengeofsurgingfuelcosts,increasingoperatingcostandintensifyingcompetition.
AfterthereorganizationoftheGroup'stransportbusinesses,NewWorldFirstBusandCitybushaveachievedsynergiesbymeansofsharingresources,coordinatingpurchasingeffortsandstrengtheningservicecompetitiveness.
InfrastructureTheInfrastructureoperationisoneofthekeycontributorstotheGroupandachievedexcellentresultsinthereportingperiod.
TheWaterTreatmentandWasteManagementoperationsattainedsatisfactorygrowthasthenewinvestmentsinMainlandChinastartedtocontribute.
TheGroupcurrentlyhas18waterprojectsandisexploringnewinvestmentopportunitiesinseveralcities.
ThecombinedelectricitysalesofZhujiangPowerPhaseIandII(珠江電廠第一及第二期)increasedby3%.
Despitetheincreaseinelectricitydemand,thehighcoalpricehashindereditsprofitability.
CapitalizingontherobusteconomicgrowthinPearlRiverDeltaregion,theGroupacquiredstakesinthreeroadprojects,namelyBeijing-ZhuhaiExpressway(Guangzhou-ZhuhaiNorthernSection)(京珠高速公路廣珠北段),Guangzhou-ZhaoqingExpressway(廣肇高速公路)andPearlRiverDeltaRingRoad(South-WesternSection)(珠江三角洲環形公路西環南段).
BusinessReview33PortsTheGrouphasdisposedallitsinterestsinContainerTerminalNo.
8WestandContainerTerminalNo.
3inHongKongforHK$3billionwithagain,netofminorityinterests,ofapproximatelyHK$0.
97billion.
TheGroupwillmaintaintheinterestsinATLLogisticsCentrewhichachieved93%occupancy.
OurTianjinandXiamenports,beingtheshippinghubinnorthernandsoutheasternChinarespectively,continuedtoperformwellamidsolidexpansionintradeflows.
NewWorldChinaLandLimited("NWCL")NWCL,theGroup's70%-ownedMainlandChinapropertyarm,hasaportfolioof36majordevelopmentpropertyprojectsacross17citieswithatotalGFAofapproximately16millionsq.
m.
.
Fortheperiodunderreview,NWCLhascompleted297,883sq.
m.
and,togetherwithitsinventoryinhandon30June2004,sold331,712sq.
m.
duringtheperiodunderreview.
TotalGFANWCL'sProjectscompletedduring1HFY2005Usage(sq.
m.
)Interest(%)BeijingNewWorldGardenPhaseII(北京新世界家園二期)R,P87,59070GuangzhouParkParadisePhaseIIB(廣州嶺南新世界家園二期B)R,C,P55,93560GuangzhouNewWorldOrientalGardenPhaseI(廣州東方新世界花園一期)C2,560100GuangzhouCoventGardenPhaseII(廣州逸彩庭園二期)P8,19060GuangzhouCentralPark-viewPhaseI(廣州凱旋新世界廣場一期)R62,70491GuangzhouXintangNewWorldGardenPhaseII(廣州新塘新世界花園二期)R37,27360ShenzhenNewWorldYiShanGardenPhaseII(深圳新世界倚山花園二期)R,P43,63190Total297,883R:ResidentialC:CommercialP:CarparkBusinessReview34TheGroupisoptimisticabouttheoutlookofMainlandChina'spropertymarket.
TheproposedrightsissueofNWCLonthebasisofthreerightsshares,atHK$2.
8pershareforeverytwoshares,subjecttotheapprovalofNWCLindependentshareholders,willraiseHK$6.
3billiontostrengthenitscapitalbaseandfinancialposition.
NWCLintendstousetheproceedsfromtherightsissuetofundtheresettlementanddevelopmentcostsofitsexistingprojects,reduceitsdebtsandincreaseitsgeneralworkingcapitalforfuturedevelopment.
TherightsissuewillenableNWCLtospeeduptheresettlementworksforitsprojectsandlaythefoundationforfuturedevelopment.
ItwillalsohelptoreduceNWCL'sexposurefromtheexpectedrisinginterestcostsandapossiblecurrencyrevaluation.
InthesecondhalfofFY2005,NWCLexpectstocomplete10developmentprojectsin7citieswith492,296sq.
m.
GFAandtwoinvestmentpropertiesinWuhanandGuangzhouwith66,201sq.
m.
GFA.
TotalGFANWCL'sDevelopmentprojectstobecompletedin2HFY2005Usage(sq.
m.
)Interest(%)BeijingXinYangCommercialBuilding(北京新陽商務樓)C1,56170JinanSunshineGardenPhaseI(濟南陽光花園一期)R31,75465WuhanMenghuGardenPhaseI(武漢夢湖香郡一期)R13,22370WuhanXinHuaGardenPhaseII(武漢新華家園二期)R39,07360WuhanChangqingGardenPhaseV(武漢常青花園五期)R142,93660NanjingNewWorldCentre(南京新世界中心)R,C113,70992GuangzhouCoventGardenPhaseII(廣州逸彩庭園二期)R26,61860GuangzhouParkParadisePhaseIIC(廣州嶺南新世界家園二期C)R,C32,61860HuizhouChanghuyuanPhaseII(惠州長湖苑二期)R,C61,38263ZhuhaiNewWorldRivieraGardenPhaseII(珠海新世界海濱花園二期)R,C29,422100Total492,296TotalGFANWCL'sInvestmentpropertiestobecompletedin2HFY2005Usage(sq.
m.
)Interest(%)WuhanInt'lTrade&CommerceCentreTowerI(武漢國貿大廈一座)O,P59,998100GuangzhouParkParadisePhaseIIC(廣州嶺南新世界二期C)P6,20360Total66,201O:OfficeBusinessReview35NewWorldMobileHoldingsLimited("NWMHL")NWMHL,theGroup's71%-ownedHongKongmobileservicesarm,recordedanetprofitofHK$55.
5millionfortheperiodunderreview,a28%decreasecomparedwiththesameperiodlastyear.
Thereductionwasduetofiercecompetitioninthemobiletelecommunicationsmarket.
ThesubscriberbaseofNewWorldMobility("NWM")grewfrom1.
25millioninJune2004to1.
3millioninDecember2004.
ThedropinsubscribernumbercausedbytheterminationofanMVNOcontractinOctober2004,wasmorethanmadeupforbythesubstantialgrowthintheprepaidsubscribers.
InordertoenhanceARPUandrevenue,NWMcontinuestointroducenewvalueaddedservicessuchas"Press'nTalk"and"Video-on-the-move"newsandentertainmentvideoservices.
NewWorldTelecommunicationsLimited("NWT")NWTwillfocusitsbusinessonIDD,broadbandandIPbasedvalueaddedservices.
NewserviceslaunchedduringtheperiodunderreviewincludeYahoo!
HongKong—NWTBizNet,Biz@nywherePDAbasedwirelessdatasolutions,NWTbbandNWTmusic.
com.
ThewithdrawalofTypeIIinterconnectionwillhaveminimalimpactonNWT'sfixedlinebusinessasNWTcontinuestoextenditsself-builtnetworkandexplorenewtechnologiestoovercomethelastmileconnectionissue.
NewWorldTMTLimited("NWTMT")NWTMT'smanagementhavestrengthenedprojectcontrolandimprovedthecashflowandoperatingreturnofitsprojects.
Anumberofprojectshasmadeencouragingprogress.
BeijingXintong(北京信通),ShanghaiMtone(上海美通)andShenzhenSunlong(深圳翔龍)attainedgoodturnoverandoperatingprofits.
Duringtheperiod,NWTMTmadeprogressonlegalproceedingstorecoupitsinvestmentsinPrediWaveCorporation("PrediWave")andcertainassociatedcompaniesofPrediWaveGroup(collectivelythe"PrediWaveCompanies").
NWTMThasreliableinformationthatUS$310millionremainedinthePrediWavebankaccountsinDecember2004.
Uptothedateofthisreport,thefollowingprogresswasachievedinthelitigation:NWTMTwonawritofmandatetogainaccesstoPrediWavefinancialdocuments;andPrediWavedroppeditscounterclaiminFederalCourtagainstMrJimmyLi,adirectorofNWTMTassociatedcompaniesandanappointeetothePrediWaveboard,andMrFuSzeShing,aNon-executiveDirectorofNWTMTandanappointeetothePrediWaveboard.
NWTMTenteredintoanoptionagreementwithaPRCentityfortheacquisitionofaninterestinafibreopticbackbonenetwork("Network").
SomeHK$1.
531billionwaspaidasadepositfortheNetwork.
Itwasagreedamongstthecounterpartiesduringtheperiodthatinvestments,loansandotheramountsowingtoNWTMTamountingtoHK$2.
16billionwouldberepaidinNovember2004.
Thetransactionhasnotbeencompletedbythecounterpartiesuptothepublishingdateoftheinterimaccounts.
ThevalueoftheNWTMTinvestmentcostwassubstantiatedinOctober2004,whentheNetworkassetswereappraisedbyanindependentvaluationfirm.
TheassessedvalueoftheNetworkisslightlyhigherthantheNWTMTinvestmentcostonapro-ratabasis.
Presently,itisthepriorityofNWTMTtofinalizethetransferofthefibrenetworkinvestmenttoathirdparty.
ShouldthetransactioncannotbecompletedforBusinessReview36anyreason,NWTMTmanagementwillassistthecounterpartiestoseekforanotherpotentialbuyer.
However,NWTMTretainsitsoptiontore-entertheprojectifthenetworkinvestmentisnotconcluded.
NewWorldDepartmentStoresLimited("NWDS")NWDSbenefitedfromthegrowingconsumermarketinMainlandChina.
Duringtheperiodunderreview,totalsalesofNWDSamountedtoHK$1.
9billion,up22%year-on-year.
ThefourthstoreinShanghaiandthesecondstoreinNingbo(寧波)wereopenedinSeptemberandNovember2004respectively.
AsatDecember2004,NWDSoperationsexpandedto17storesacross10citiesinMainlandChinaandHongKongwithatotalGFAof460,000sq.
m.
.
TheGroupplanstoopenthreemorestoresinLanzhou(蘭州),Nanjing(南京)andXiamen(廈門)by2006withatotalGFA72,000sq.
m.
.
NewWorldChinaEnterprisesProjectsLimited("NWCEP")NWCEPmanagesover20projectsinMainlandChina.
Amongstthem,KunmingFulintangPharmaceuticalCompanyLimited,YunnanPhytopharmaceuticalCompanyLimited,TheWatermanCo.
Ltd.
(Shanghai),XiamenTopstarCoLimitedandHXNWAutoServiceLimitedhaveachievedsatisfactoryprofitscontributiontoNWCEP.
NWCEPhasrecentlycompletedastrategicinvestmentinTiannengInternationalLimited,oneofthelargestbatterymanufacturersforelectricbicyclesinChina.
Duringthesameperiod,NWCEPhasdivesteditsinvestmentinVisionGrandeGroupHoldingsLimitedatasatisfactoryreturn.
LIQUIDITYANDCAPITALRESOURCESAsatAsat31December30JuneNetDebt(HK$million)20042004Consolidatednetdebt18,295.
621,613.
4NWSH(stockcode:0659)4,884.
54,618.
1NWCL(stockcode:0917)4,806.
84,878.
3NWMHL(stockcode:0862)122.
1N/ANWTMT(stockcode:0301)2,745.
82,703.
3Consolidatednetdebt(excludinglistedsubsidiaries)5,736.
49,413.
7Asat31December2004,theGroup'scashandbankbalancesamountedtoHK$7,234.
7million(30June2004:HK$6,630.
0million).
ItsconsolidatednetborrowingamountedtoHK$18,295.
6million,adecreaseofHK$3,317.
8millionascomparedwith30June2004.
Gearingratiodecreasedfrom39.
7%asat30June2004to32.
8%asat31December2004.
Cashgeneratedfromoperationsmainlyfromthesalesofresidentialpropertiesandservicesactivities.
SourceofBorrowingsAsat31December2004,around32%ofthetotaloutstandingloansweresecuredbytheGroup'sassets.
BusinessReview37InterestRateandMaturityProfileAsat31December2004,$8,307.
0millionofdebtwillbeduewithinthenexttwelvemonths.
Thiscombinationofcashonhand,togetherwithcashinflowfromoperationsandourremainingundrawnbankingfacilities,shouldenabletheGrouptosatisfyitsdebtrepaymentcommitmentsandworkingcapitalrequirements.
Approximately77%(78%inFY2004)oftheGroup'stotaldebtisonafloatingratebasis,whilstfixedrateborrowingsaremainlyrelatedtotheGroup'sRMBloanfacilitiesandconvertiblebonds.
EMPLOYEESTheGrouphasover31,000employeesat31December2004andstaffcostsofHK$1,725millionfortheperiodunderreview.
Remunerationpoliciesarereviewedannually.
Remunerationandbonusesareawardedtoemployeesbasedonindividualperformancesandmarketpractices.
Educationsubsidieswillbegrantedtoemployeeswhoaretakingjob-relatedcourses.
Periodicin-housetrainingprogramsarealsooffered.
UndertheshareoptionschemesofNWTMT,NWCLandNWSH,optionsmaybegrantedtocertainDirectorsoftheCompanyandcertainemployeesoftheGrouptosubscribeforsharesinNWTMTand/orNWCLand/orNWSH.
OUTLOOKTheGDPinMainlandChinagrewby9.
5%in2004,thefastestpaceinlasteightyears.
Nationaleconomicdevelopmentwillmaintainthegrowthmomentumwithmildincreaseinprices.
PearlRiverDeltaregionalco-operationwillfurtherdrivetheHongKongeconomy.
ThepropertyprojectsinHongKongandMainlandChinaareexpectedtobenefitfromthesolidgrowthindemandforproperties.
Othercorebusinesses,includinghotels,serviceandinfrastructureanddepartmentstores,willcontinuetoperformwellandgeneratestrongcashflow.
TheGroupisoptimisticabouttheMainlandChinapropertymarket.
Urbanizationandgrowingeconomyaredrivinghousingdemand.
Risingaveragehouseholdincomeandmiddleclasshaveimprovedaffordability.
Furthermore,theclearandtransparentcentralgovernmentpoliciessupportlong-termhealthygrowth.
Inaddition,landsupplythroughpublicauctionsenablesaclosermatchbetweensupplyanddemand.
Developerswithgoodreputationandqualityprojects,likeNWCL,arebetterpositionedtotakeadvantagesofthesedevelopments.
InfrastructureisakeygrowthdriverfortheGroup.
Whileexistingprojectscontinuetoimprovetheiroperations,NWSHisactivelylookingfornewinvestmentopportunities,especiallyinexpresswaysandwaterprojects.
WiththeopeningofHongKongDisneylandthisyear,theexpectedstronggrowthinHongKongtouristindustrywillbenefitourhotelsbusinesses.
NWDSwilltaptheboomingconsumermarketinMainlandChinabyextendingitsfootprintsacrossMainlandChina.
DisclosureofInterests38Directors'InterestsinShares,UnderlyingSharesandDebenturesAsat31December2004,theinterestsoftheDirectorsandtheirassociatesinshares,underlyingsharesanddebenturesoftheCompanyoranyofitsassociatedcorporationswhichwererecordedintheregisterrequiredtobekeptbytheCompanypursuanttoSection352ofSecuritiesandFuturesOrdinance("SFO")wereasfollows:(A)LongpositioninsharesNumberofsharesApproximatePersonalSpouseCorporate%ofinterestsinterestsinterestsTotalshareholdingNewWorldDevelopmentCompanyLimited(OrdinarysharesofHK$1.
00each)Dr.
SinWai-Kin,David4,708,70847,098—4,755,8060.
14Mr.
LeungChi-Kin,Stewart32,553——32,553—Mr.
ChowKwai-Cheung43,000——43,000—Mr.
HoHau-Hay,Hamilton——438,905(1)438,9050.
01Mr.
LiangCheung-Biu,Thomas5,215——5,215—DragonFortuneLimited(OrdinarysharesofUS$1.
00each)Mr.
ChengKar-Shing,Peter——15,869(2)15,86927.
41HHHoldingsCorporation(OrdinarysharesofHK$1.
00each)Dr.
SinWai-Kin,David42,000——42,0007.
00MasterServicesLimited(OrdinarysharesofUS$0.
01each)Mr.
LeungChi-Kin,Stewart16,335——16,3351.
63Mr.
ChowKwai-Cheung16,335——16,3351.
63NewWorldChinaLandLimited(OrdinarysharesofHK$0.
10each)Mr.
ChengKar-Shing,Peter396,800——396,8000.
03Mr.
ChowKwai-Cheung126——126—DisclosureofInterests39NumberofsharesApproximatePersonalSpouseCorporate%ofinterestsinterestsinterestsTotalshareholdingNewWorldTMTLimited(OrdinarysharesofHK$1.
00each)Dr.
ChengKar-Shun,Henry—1,000,000—1,000,0000.
11Dr.
SinWai-Kin,David5,59453—5,647—Mr.
LiangChong-Hou,David262——262—NWSHoldingsLimited(OrdinarysharesofHK$1.
00each)Dr.
ChengKar-Shun,Henry2,000,000587,000—2,587,0000.
14Dr.
SinWai-Kin,David——32,224,060(3)32,224,0601.
78Mr.
ChengKar-Shing,Peter333,333—2,659,700(4)2,993,0330.
17Mr.
LiangChong-Hou,David153——153—Mr.
LeungChi-Kin,Stewart3,526,630—84,607(5)3,611,2370.
20Mr.
ChowKwai-Cheung2,264,652——2,264,6520.
13SunCityHoldingsLimited(OrdinarysharesofHK$1.
00each)Mr.
ChengKar-Shing,Peter—80,0003,570,000(6)3,650,00045.
63SunLegendInvestmentsLimited(OrdinarysharesofHK$1.
00each)Mr.
ChengKar-Shing,Peter——500(7)50050.
00YEHoldingsCorporation(OrdinarysharesofHK$1.
00each)Mr.
LeungChi-Kin,Stewart37,500——37,5001.
50Notes:(1)ThesesharesarebeneficiallyownedbyacompanyofwhichMr.
HoHau-Hay,Hamiltonowns20.
00%ofitsissuedsharecapital.
(2)4,102sharesareheldbyacompanywholly-ownedbyMrChengKar-Shing,Peterand11,767sharesareheldbySunCityHoldingsLimited("SunCity"),ofwhichMrChengKar-Shing,Peterisdeemedtobeinterestedin45.
63%ofitsissuedsharecapital.
(3)ThesesharesarebeneficiallyownedbyacompanywhichisjointlyownedbyDrSinWai-Kin,Davidandhisspouse.
DisclosureofInterests40Directors'InterestsinShares,UnderlyingSharesandDebentures(continued)(4)Thesesharesarebeneficiallyownedbyacompanywhichiswholly-ownedbyMrChengKar-Shing,Peter.
(5)ThesesharesarebeneficiallyownedbyacompanyofwhichMrLeungChi-Kin,Stewarthasadirectinterestof55%.
(6)ThesesharesareheldbyacompanyofwhichMrChengKar-Shing,Peterhasanindirectinterestof48.
18%.
(7)MrChengKar-Shing,PeterisdeemedtobeinterestedinthesharesofSunLegendInvestmentsLimitedbyvirtueofhisinterestinSunCity.
(B)Longpositioninunderlyingshares—shareoptionsUndertherespectiveshareoptionschemesofNWCL,NWSH,NWTMTandNWMHL,shareoptionsmaybegrantedrespectivelytocertaindirectorsandemployeesofNWCL,NWSH,NWTMTandNWMHLtosubscribeforshares.
CertainDirectorsoftheCompanyhavepersonalinterestinshareoptionstosubscribeforsharesinthesecompaniesrespectively.
LongpositioninunderlyingsharesofNWCL—shareoptionsShareoptionsgrantedtoDirectorsNumberofshareoptionswithexercisepriceofHK$1.
955pershareExercisedReclassifiedBalanceatBalanceatduringduring31DecemberNameofDirectorDateofgrantExercisableperiod1July2004theperiodtheperiod2004Dr.
ChengKar-Shun,Henry7February20018March2001to7March20065,000,000——5,000,000Mr.
ChengKar-Shing,Peter9February200110March2003to9March20062,500,000(1,000,000)(3)—1,500,000Mr.
LeungChi-Kin,Stewart7February20018March2001to7March2006500,000——500,000Mr.
ChanKam-Ling9February200110March2002to9March2006(2)400,000(200,000)(4)(200,000)(5)—Mr.
ChowKwai-Cheung9February200110March2005to9March2006500,000——500,0008,900,000(1,200,000)(200,000)7,500,000Notes:(1)Theshareoptionsareexercisableduringaperiodoffiveyearscommencingfromtheexpiryofonemonthafterthedatesofeachgrantwhentheoffersofshareoptionswereaccepted,providedthatthemaximumnumberofshareoptionsthatcanbeexercisedduringayearis20.
0%ofthetotalnumberoftheshareoptionsgrantedtogetherwithanyunexercisedshareoptionscarriedforwardfromthepreviousyears,unlessotherwisespecifiedinnote2.
(2)Theshareoptionswereexercisableduringtheremainingexercisableperiodoffouryears,providedthatthemaximumnumberofshareoptionsthatcanbeexercisedduringayearis25.
0%oftheoutstandingbalanceoftheshareoptionsheld.
DisclosureofInterests41(3)Shareoptionsrepresenting500,000shareseachwereexercised.
TheweightedaverageclosingpriceofthesharesimmediatelybeforethedatesonwhichshareoptionswereexercisedwereHK$2.
70andHK$2.
90respectively.
(4)TheweightedaverageclosingpriceofthesharesimmediatelybeforethedateonwhichshareoptionswereexercisedwasHK$2.
125.
(5)MrChanKamLingresignedasdirectoroftheCompanyon30August2004.
TheinterestsofMrChanKamLingintheshareoptionswerereclassifiedasemployee'sinterests.
(6)ThecashconsiderationpaidbyeachDirectorforeachgrantoftheshareoptionsisHK$10.
0.
Shareoptionsgrantedtoemployees2000ShareOptionSchemeNumberofshareoptionsBalanceRe-classifiedExercisedLapsedBalanceExercisepriceat1Julyduringtheduringtheduringtheat31DecemberpershareDateofgrant2004period(4)period(6)period2004HK$5February2001to2March200125,338,400200,000(7,484,800)(812,000)17,241,6001.
9558February2001to17February20013,200,000———3,200,000(2)1.
9552May2001to29May2001402,000—(18,800)—383,2002.
60529June2001to26July20012,097,200——(153,600)1,943,6003.
19231August2001to27September2001590,000—(40,000)(12,000)538,0002.
38026March2002to22April2002861,200—(172,000)—689,2002.
26532,488,800200,000(7,715,600)(977,600)23,995,6002002ShareOptionSchemeNumberofshareoptionsBalanceGrantedExercisedLapsedBalanceExercisepriceat1Julyduringtheduringtheduringtheat31DecemberpershareDateofgrant2004period(5)period(7)period2004HK$3January2003to30January2003676,800—(14,800)—662,0001.
33012May2003to6June20031,544,000—(264,600)(137,200)1,142,2001.
00028October2003to22November2003237,600——(200,800)36,8001.
81018December2003to14January20041,300,000—(400,000)—900,000(3)1.
83025March2004to21April2004976,000—(68,400)(73,200)834,4002.
47018June2004to15July2004—560,400(74,400)(132,800)353,2001.
8104November2004to1December2004—282,800——282,8002.
7254,734,400843,200(822,200)(544,000)4,211,400DisclosureofInterests42Directors'InterestsinShares,UnderlyingSharesandDebentures(continued)Notes:(1)Theshareoptionsareexercisableduringaperiodoffiveyearscommencingfromtheexpiryofonemonthafterthedatesofeachgrantwhentheoffersofshareoptionswereaccepted,providedthatthemaximumnumberofshareoptionsthatcanbeexercisedduringayearis20.
0%ofthetotalnumberoftheshareoptionsgrantedtogetherwithanyunexercisedshareoptionscarriedforwardfromthepreviousyears,exceptotherwisespecifiedinnotes2and3.
(2)Theshareoptionswereexercisableduringtheremainingexercisableperiodoffouryears,providedthatthemaximumnumberofshareoptionsthatcanbeexercisedduringayearis25.
0%oftheoutstandingbalanceoftheshareoptionsheld.
(3)Theshareoptionsareexercisableduringaperiodoftwoyearscommencingfromtheexpiryofonemonthafterthedatesofeachgrantwhentheoffersofshareoptionswereaccepted,providedthatthemaximumnumberofshareoptionsthatcanbeexercisedduringayearis50.
0%ofthetotalnumberoftheshareoptionsgrantedtogetherwithanyunexercisedshareoptionscarriedforwardfromthepreviousyear.
(4)Theshareoptionsarere-classifiedasemployee'sinterestwhicharepreviouslycountedasdirector'sinterestduetotheresignationofadirectoroftheCompanywhoremainstoactasemployeeoftheGroup.
(5)Theclosingpricespershareimmediatelybefore18June2004and4November2004,thedatesofgrant,wereHK$1.
76andHK$2.
675respectively.
(6)Theweightedaverageclosingpriceofthesharesimmediatelybeforethedatesonwhichshareoptionswereexercisedunderthe2000ShareOptionSchemewasHK$2.
863.
(7)Theweightedaverageclosingpriceofthesharesimmediatelybeforethedatesonwhichshareoptionswereexercisedunderthe2002ShareOptionSchemewasHK$2.
40.
(8)ThecashconsiderationpaidbyeachemployeeforeachgrantoftheshareoptionisHK$10.
0.
ThefairvaluesoftheshareoptionsgrantedduringtheperiodwithexercisepricespershareofHK$1.
81andHK$2.
725areestimatedatHK$1.
81andHK$1.
40,respectively,usingtheBlack-Scholesoptionpricingmodel.
Valuesareestimatedbasedontherisk-freerateof1.
39%perannumwithreferencetotherateprevailingontheExchangeFundNotes,aone-yearperiodhistoricalvolatilityof0.
46,assumingnodividendsandanexpectedoptionlifeof5years.
TheBlack-Scholesoptionpricingmodelwasdevelopedforuseinestimatingthefairvalueoftradedoptionsthathavenovestingrestrictionsandarefullytransferable.
Inaddition,suchoptionpricingmodelrequiresinputofhighlysubjectiveassumptions,includingtheexpectedstockpricevolatility.
Asthecharacteristicsoftheoptionsgrantedduringtheperiodaresignificantlydifferentfromthoseofpubliclytradedoptionsandchangesinthesubjectiveinputsmaymateriallyaffectthefairvalueestimate,theBlack-Scholesoptionpricingmodeldoesnotnecessarilyprovideareliablemeasureofthefairvalueoftheshareoptions.
DisclosureofInterests43LongpositioninunderlyingsharesofNWSH—shareoptionsShareoptionsgrantedtoDirectorsNumberofshareoptionswithexercisepriceofHK$3.
725pershareExercisedReclassifiedBalanceatBalanceatduringduring31DecemberNameofDirectorDateofgrantExercisableperiod1July2004theperiod(2)theperiod2004Dr.
ChengKar-Shun,Henry21July200321July2005to20July20082,000,000(1,000,000)—1,000,000Mr.
ChengKar-Shing,Peter21July200321July2005to20July2008333,334(166,667)—166,667Mr.
LeungChi-Kin,Stewart21July200321July2004to20July2008134,000(66,000)—68,000(1)Mr.
ChanKam-Ling21July200321July2005to20July20081,333,334—(1,.
333,334)(3)—3,800,668(1,232,667)(1,333,334)1,234,667Notes:(1)Dividedinto2tranchesexercisablefrom21July2004and21July2005to20July2008respectively.
(2)TheweightedaverageclosingpriceofthesharesimmediatelybeforethedateonwhichtheshareoptionswereexercisedwasHK$10.
13.
(3)Mr.
ChanKam-LingresignedasdirectoroftheCompanyon30August2004.
TheinterestofMrChanKam-Lingintheshareoptionswerere-classifiedasothereligiblepersons.
(4)ThecashconsiderationpaidbyeachDirectorforeachgrantoftheshareoptionsisHK$10.
0.
Shareoptionsgrantedtoothereligiblepersons1997ShareOptionSchemeNumberofshareoptionswithexercisepriceofHK$6.
93pershareExercisedLapsedBalanceatBalanceatduringduring31DecemberDateofgrant1July2004theperiod(3)theperiod200411May19991,900,000(1,300,000)(600,000)—(1)11May199930,000(30,000)——(2)1,930,000(1,330,000)(600,000)—DisclosureofInterests44Directors'InterestsinShares,UnderlyingSharesandDebentures(continued)Notes:(1)Dividedinto4tranchesexercisablefrom5November1999,5May2001,5May2002and5May2003respectivelyto4November2004.
(2)Exercisablefrom5May2004to4November2004.
(3)TheweightedaverageclosingpriceofthesharesimmediatelybeforethedateonwhichshareoptionswereexercisedwasHK$10.
89.
2001ShareOptionSchemeNumberofshareoptionswithexercisepriceofHK$3.
725pershareReclassifiedExercisedLapsedBalanceatBalanceatduringduringduring31DecemberDateofgrant1July2004theperiod(3)theperiodtheperiod200421July20034,800,0021,333,334(666,667)(4)—5,466,669(1)21July200320,234,668—(10,673,134)(5)(397,922)9,163,612(2)25,034,6701,333,334(11,339,801)(397,922)14,630,281Notes:(1)Dividedinto2tranchesexercisablefrom21July2004and21July2005respectivelyto20July2008.
(2)Dividedinto3tranchesexercisablefrom21January2004,21July2004and21July2005respectivelyto20July2008.
(3)Theshareoptionsarere-classifiedasothereligibleperson'sinterestwhicharepreviouslycountedasdirector'sinterestduetotheresignationofadirectoroftheCompanywhoremainstoactasemployeeoftheGroup.
(4)TheweightedaverageclosingpriceofthesharesimmediatelybeforethedateonwhichshareoptionswereexercisedwasHK$10.
13.
(5)TheweightedaverageclosingpriceofthesharesimmediatelybeforethedateonwhichshareoptionswereexercisedwasHK$9.
40.
(6)ThecashconsiderationpaidbyeacheligiblepersonforeachgrantoftheshareoptionisHK$10.
0.
DisclosureofInterests45LongpositioninunderlyingofNWTMT—shareoptionsShareoptionsgrantedtoemployees1997ShareOptionSchemeNumberofshareoptionsBalanceatExercisepriceBalanceat31DecemberpershareDateofgrant1July20042004HK$23September1999240,000240,000(1)10.
2023September1999960,000960,000(2)12.
001,200,0001,200,000Notes:(1)Exercisablefrom1July2000to1June2005.
(2)Dividedinto3tranchesexercisablefrom1July2001,1July2002and1July2003respectivelyto1June2005.
(3)ThecashconsiderationpaidbyeachemployeeforeachgrantoftheshareoptionisHK$10.
0.
LongpositioninunderlyingsharesofNWMHL—shareoptionsShareoptionsgrantedtoemployeesNumberofshareoptionswithexercisepricepershareofHK$2.
44BalanceatBalanceatLapsedduring31DecemberDateofgrantExercisableperiod1July2004theperiod20048February20029February2002to8February2008448,000(1)(23,000)425,000(1)Note:(1)Adjustmentsonthenumberofshareoptionsandtheexercisepriceasaresultofthecompletionofthesubscriptionagreementdated29March2004andtheconsolidationofNWMHL'ssharesfromevery100issuedorunissuedordinarysharesofHK$0.
01eachinto1consolidatedordinaryshareofHK$1.
00each.
DisclosureofInterests46Directors'InterestsinShares,UnderlyingSharesandDebentures(continued)Saveasdisclosedabove,asat31December2004,noneofthedirectors,chiefexecutiveoranyoftheirassociateshadordeemedtohaveanyinterestsorshortpositionsintheshares,registeredcapital,underlyingsharesanddebenturesoftheCompanyoranyofitsassociatedcorporationsasdefinedintheSFOthatwererequiredtobeenteredintotheregisterkeptbytheCompanypursuanttosection352oftheSFOorwererequiredtobenotifiedtotheCompanyandTheStockExchangeofHongKongLimitedpursuanttotheModeCodeforSecuritiesTransactionsbyDirectorsofListedCompanies.
SubstantialShareholders'InterestsinSharesAsat31December2004,theregisterkeptbytheCompanyunderSection336oftheSFOshowsthefollowingpartieshadinterestsin5.
0%ormoreoftheissuedsharecapitaloftheCompany.
LongpositioninsharesNumberofsharesPercentagetoBeneficialCorporatetheissuedNameinterestsinterestTotalsharecapitalChowTaiFookEnterprisesLimited("CTFEL")(1)1,093,068,180126,032,0621,219,100,24235.
26MarathonAssetManagementLtd("MAM")(2)208,191,948—208,191,9486.
02Notes:(1)CTFELanditssubsidiaries.
(2)ThesesharesareheldbyMAMInvestmentLtd.
,awhollyownedsubsidiarycompanyofMAM.
Saveasdisclosedabove,thereisnootherinterestisrecordedintheregisterthatisrequiredtobekeptunderSection336oftheSFOashavinganinterestin5.
0%ormoreoftheissuedsharecapitaloftheCompanyasat31December2004.
CorporateInformation47BoardofDirectorsExecutivedirectorsDato'Dr.
ChengYu-Tung(Chairman)Dr.
ChengKar-Shun,Henry(ManagingDirector)Dr.
SinWai-Kin,DavidMr.
LiangChong-Hou,DavidMr.
LeungChi-Kin,StewartNon-executivedirectorsMr.
ChengYue-PuiMr.
ChengKar-Shing,PeterMr.
ChowKwai-CheungMr.
HoHau-Hay,HamiltonMr.
LiangCheung-Biu,ThomasIndependentnon-executivedirectorsLordSandberg,MichaelMr.
YeungPing-Leung,HowardDr.
ChaMou-Sing,PaysonJPMr.
ChaMou-Zing,Victor(alternatedirectortoDr.
Cha-MouSing,Payson)Mr.
LeeLuen-Wai,JohnJPCompanySecretaryMr.
LeungChi-Kin,StewartJointAuditorsPricewaterhouseCoopersH.
C.
Watt&CompanyLimitedSolicitorsYung,Yu,Yuen&CompanyWoo,Kwan,Lee&LoCorporateInformation48ShareRegistrarsandTransferOfficeTengisLimitedGroundFloor,BankofEastAsiaHarbourViewCentre,56GloucesterRoad,Wanchai,HongKongRegisteredOffice30Floor,NewWorldTower,18Queen'sRoadCentral,HongKongTel:(852)25231056Fax:(852)28104673PrincipalBankersBankofChinaBNPParibasCitibankN.
A.
DBSBankHangSengBankIndustrialandCommercialBankofChina(Asia)Ltd.
NanyangCommercialBankSumitomoMitsuiBankingCorporationStandardCharteredBankTheHongkongandShanghaiBankingCorporationUFJBankStockCodeHongKongStockExchange0017Reuters0017HKBloomberg17HKInvestorInformationFormoreinformationabouttheGroup,pleasecontacttheCorporateAffairsDepartmentat:NewWorldDevelopmentCompanyLimited,30Floor,NewWorldTower,18Queen'sRoadCentral,HongKongTel:(852)21316790Fax:(852)28104673e-mail:newworld@nwd.
com.
hkWebsitewww.
nwd.
com.
hkNewWorldDevelopmentCompanyLimited30/F.
,NewWorldTower,18Queen'sRoadCentral,HongKongTel:(852)25231056Fax:(852)28104673www.
nwd.
com.
hk