23. Interests in Subsidiaries
All subsidiaries other than Trustland Inc are indirectly held by the Company. The particulars of the Company's subsidiaries are as follows:
* Dongguan Texwinca Textile & Garment Limited ("DGT") was formed as a joint venture in the People's Republic of China ("PRC") under a joint venture agreement with a term of 50 years with effect from 28 July 1992. This agreement is subject to renewal by mutual consent of the joint venture partners upon expiry. The paid up capital thereof as at 31 March 1998 was HK$683,153,712.
Pursuant to a revised agreement between the Group and the other joint venture partners dated 28 July 1993, the entire operations of DGT became subject to the management and control of the Group and all profits and losses arising from DGT's operations became wholly attributable to the Group. In return, the Group has agreed to pay an annual fee to the other joint venture partners which will be reflected as Group operating expenses for each respective year.
** Winca (Dongguan) Motor Service Ltd was formed as a wholly foreign-owned enterprise with a term of 50 years in the PRC with effect from 26 July 1994.
*** Dongguan Texwinca Knitting Limited ("DTKL") was formed as a joint venture in the PRC under a joint venture agreement with a term of 50 years with effect from 21 June 1995. This agreement is subject to renewal by mutual consent of the joint venture partners upon expiry. The paid up capital as at 31 March 1998 was HK$54,367,872.
Pursuant to a revised agreement between the Group and the joint venture partner dated 8 August 1995, the entire operations of DTKL became subject to the management and control of the Group and all profits and losses arising from DTKL's operations became wholly attributable to the Group.
(a) Reconciliation of operating profit to net cash inflow from operating activities:
(b) Analysis of changes in financing during the year:
(c) Major non-cash transactions:
During the year, the Group entered into finance lease arrangements in respect of assets with a total capital value at the inception of the leases of HK$25,864,000 (1997: HK$39,123,000).
During the year, the Group acquired 50% equity interest of an associated company, Megawell Industrial Limited at a consideration of HK$150 million which was satisfied by cash payment of HK$37,500,000 and issue of 19,430,052 new ordinary shares of the Company at HK$5.79 per share aggregating HK$112,500,000.
Irrevocable and unconditional guarantees aggregating HK$1,120 million have been given by the Company in respect of an associated company's and certain subsidiaries' bank facilities and borrowings aggregating HK$155,389,000.
Commitments for capital expenditures at the balance sheet date were as follows:
Certain companies of the Group had transactions with the following companies of which Poon Bun Chak, a director of the Company, is a director and/or controlling shareholder.
In addition, the Company paid rental expenses of HK$600,000 (1997: HK$780,000) to Sonway Enterprises Limited of which Ting Kit Chung, a director of the Company, is a director and the controlling shareholder.
In the opinion of the directors, the ultimate holding company is Farrow Star Limited, which is incorporated in the British Virgin Islands.
Subsequent to the balance sheet date, the Company repurchased certain of its own shares on the Stock Exchange of Hong Kong Limited as follows:
The directors believe that the repurchases are in the best interests of the Company and its shareholders. Such purchases lead to an enhancement of the net assets and earnings per share of the Company.
Certain comparative figures were reclassified to conform with the current year's presentation.
The financial statements were approved by the board of directors on 18 August 1998.
24. Notes to the Consolidated Cash Flow Statement
25. Contingent Liabilities
26. Capital Commitments
27. Operating Lease Commitments
28. Related Party Transactions
29. Ultimate Holding Company
30. Subsequent Events
31. Comparative Figures
32. Approval of the Financial Statements
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