Guangdong Investment Limited
Annual Report 1994

The Directors are pleased to announce that the Group's turnover for 1994 increased by 37% from the previous year to HK$3,760,689,189.  Profit attributable to shareholders rose 32% to HK$437,193,563.




Review of Operations (Brief)

The Directors are highly satisified with the expansion and overall performance of the Group's core business in 1994.  Through acquisitions and strategic investment, the Group has acquired a further 40% stake in Shenzhen Brewery Company Limited, increasing its attributable interest from 24.5% to 64.5%; 100% interests in The Wharney Hotel, Guangdong Hotel and Guangdong (International) Hotel Management Limited; a 45.9% controlling interest in Shaoguan Power (D) Plant; a 75.59% interest in Nanhai Tannery & Leather Products Co. Ltd.; additional interests in Guangdong Teem (Holdings) Limited, making it a 51% subsidiary of the Group; a 26.01% controlling interest in Guangnan (Holdings) Limited, whose shares were successfully listed on The Hong Kong Stock Exchange on 9 December 1994; and has undertaken the establishment of two joint ventures, namely Guang Dong Nanhua Cement Limited with Yingde Cement Plant and Qingyuan Cement No. 2 Limited with Qingyuan Longweishan Cement Plant, of which contracts have been signed respectively.

All Acquistions have been completed according to schedule and the anticipated objective has been achieved, laying a solid foundation in the balanced development of the Group's five core businesses, strengthening the Group's flexibility in responding to changes in market conditions and its competitiveness, as well as enabling its varous businesses to complement each other.  The businesses of the Group's key subsidiaries have shown outstanding performance, despite a slowdown in economic growth in both China and Hong Kong and rising interest rates last year.

The Company was selected as a Hang Seng Index constituent stock in November 1994.


Dividends

An interim dividend of 3.8 cents per share was paid on 28 October 1994. The Directors recommend the payment of a final dividend of 4.8 cents per share, in respect of the year ended 31 December 1994, to shareholders on the register of members on 28 June 1995.



 
Consolidated Profit and Loss Account        
Year ended 31st December 1994        
    1994
HK$'000
  1993
HK$'000
TURNOVER   3,760,689    2,751,653
         
OPERATING PROFIT BEFORE EXCEPTIONAL ITEMS   575,362    281,778 
Exceptional items   49,124    108,389 
         
OPERATING PROFIT   624,486    390,167 
Share of profits less losses of associated companies   9,353   13,888
PROFIT BEFORE TAXATION   633,839    404,055 
         
Taxation   (37,153)   (29,690)
PROFIT BEFORE MINORITY INTERESTS   596,686    374,365 
         
Minority interests   (159,492)   (43,903)
NET PROFIT ATTRIBUTABLE TO SHAREHOLDERS   437,194    330,462 
         
Retained profits at beginning of year   287,391   78,135
    724,585    408,597 
Dividends   (164,960)   (114,002)
    559,625    294,595 
         
Transfer to reserves   (40,563)   (7,204)
RETAINED PROFITS AT END OF YEAR   519,062   287,391 
       
EARNINGS PER SHARE        
- Basic   26.9 cents   23.6 cents
- Fully diluted   25.8 cents   21.5 cents



 
Consolidated Balance Sheet        
31 December 1994        
    1994
HK$'000
  1993
HK$'000
FIXED ASSETS   5,562,366   1,721,191
PROPERTIES UNDER DEVELOPMENT   679,007 526,924
INVESTMENT PROPERTIES   550,669   196,747
INTERESTS IN ASSOCIATED COMPANIES   133,332   513,554
CONTRACTUAL JOINT VENTURES   566,974   586,689
LONG TERM INVESTMENTS   203,804   172,669
OTHER LONG TERM ASSETS   70,093   26,650
    7,766,245   3,744,424
         
CURRENT ASSETS   3,803,416   1,702,858
CURRENT LIABILITIES   (3,355,556)   (1,417,953)
NET CURRENT ASSETS   447,860   284,905
         
TOTAL ASSETS LESS CURRENT LIABILITIES   8,214,105   4,029,329
LONG TERM LOANS   (1,264,678)   (516,401)
LONG TERM PORTION OF LEASE PAYABLES   (10,506)   (713)
CONVERTIBLE BONDS   (595,499)   (788,843)
DEFERRED TAXATION   (2,120)   (2,120)
MINORITY INTERESTS   (1,279,076)   (269,187)
    5,062,226   2,452,065
         
SHARE CAPITAL   993,974   708,746
RESERVES   3,549,190   1,455,928
RETAINED PROFITS   519,062   287,391
    5,062,226   2,452,065



 
Consolidated Cash Flow Statement        
Year ended 31st December 1994        
    1994
HK$'000
  1993
HK$'000
NET CASH INFLOW/(OUTFLOW) FROM OPERATING ACTIVITIES   711,702    (33,034)
         
RETURNS ON INVESTMENTS AND SERVICING OF FINANCE        
INTEREST RECEIVED   67,554    25,413 
INTEREST PAID   (165,157)   (54,903) 
INTEREST ELEMENT OF FINANCE LEASE PAYMENT   (1,978)   (105)
DIVIDENDS FROM ASSOCIATED COMPANIES   5,942    150 
DIVIDENDS PAID TO MINORITY INTERESTS   (7,065)   (9,036)
DIVIDENDS PAID    (134,268)   (90,844) 
         
NET CASH OUTFLOW FROM RETURNS ON INVESTMENTS AND SERVICING OF FINANCE   (234,972)   (129,325)
         
TAXATION        
HONGKONG PROFITS TAXES PAID   (20,848)   15,187 
PRC TAXES PAID   (8,891)   (1,336)
TAXES PAID   (29,739)   (16,523)
         
INVESTING ACTIVITIES        
PURCASES OF FIXED ASSETS   (513,886)   (508,207)
PURCHASES OF SUBSIDIARIES   (556,508)    (222,360) 
DISPOSAL OF A SUBSIDIARY   -   (263)
ADDITIONS TO PROPERTIES UNDER DEVELOPMENT   (114,341)   (360,563)
PURCHASES OF SHORT TERM INVESTMENTS   (73,232)   (131,319)
PURCHASES OF INVESTMENT PROPERTIES   (114,303)   (8,671)
PURCHASES OF LONG TERM INVESTMENTS   (46,361)   (709,306)
ADDITIONS TO OTHER LONG TERM ASSETS   (44,586)   (105)
(INCREASE)/DECREASE IN BANK DEPOSITS   250,519    (348,217)
PURCHASES OF AND CAPITAL INJECTIONS TO ASSOCIATED COMPANIES   (3,107)   (311,349)
PROCEEDS FROM THE SALE OF FIXED ASSETS   52,074    10,416 
PROCEEDS FROM THE SALE OF INVESTMENT PROPERTIES   -   413,437 
PROCEEDS FROM THE SALE OF SHORT TERM INVESTMENTS   53,768    126,810 
PROCEEDS FROM THE SALE OF LONG TERM INVESTMENTS   413   -
NET CASH OUTFLOW FROM INVESTING ACTIVITIES   (1,109,550)   (2,049,697)
         
NET CASH OUTFLOW BEFORE FINANCING ACTIVITIES   (662,559)   (2,228,579)
         
FINANCING ACTIVITIES        
ISSUE OF SHARE CAPITAL   839,651    36,740 
PROFEEDS FROM SHARE ISSUE ON INITIAL PUBLIC OFFERING OF A SUBSIDIARY   113,300    8,531 
EXPENSES ON INITIAL PUBLIC OFFERING OF A SUBSIDIARY   (14,285)   -
INTEREST INCOME DERIVED FROM SHARE APPLICATION MONIES RECEIVED
DURING THE INITIAL PUBLIC OFFERING OF A SUBSIDIARY
  5,156    -
SHARE ISSUE EXPENSES   (26,806)   (312)
CAPITAL CONTRIBUTED BY MINORITY INTERESTS   58,749    158,432 
NEW BANK LOANS   969,747    668,219 
NEW OTHER LOANS   21,333    19,039 
PROCEEDS FROM BOND ISSUE   -   788,843 
BOND ISSUE EXPENSES   -   (24,018)
REPAYMENT OF BANK LOANS   (362,960)   422,356 
REPAYMENT OF OTHER LOANS   (23,107)   -
CAPITAL ELEMENT OF FINANCE LEASE PAYMENT   (2,933)   (496)
NET CASH INFLOW FROM FINANCING ACTIVIES   1,577,845   1,232,622
         
INCREASE/(DECREASE) IN CASH AND CASH EQUIVALENTS   915,286    (995,957)
         
CASH AND CASH EQUIVALENTS AT BEGINNING OF YEAR   142,247    1,169,321 
EFFECT OF FOREIGN EXCHANGE RATE CHANGES, NET   8,092   (31,117)
CASH AND CASH EQUIVALENTS AT END OF YEAR   1,065,625   142,247 
         
ANALYSIS OF BALANCES OF CASH AND CASH EQUIVALENTS        
CASH AND BANK BALANCES   1,227,535    206,875 
BANK LOANS AND OVERDRAFTS   (161,910)   64,628
    1,065,625   142,247