2011 - Li & Fung Limited

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NOTES TO THE ACCOUNTS (CONTINUED) 6 TAXATION (CONTINUED) On 11 June 2010, the Group also applied for a judicial review of the decision of the Commissioner of the HKIR rejecting LFT’s application for an unconditional holdover of tax for the year of assessment 2008/09 pending the determination of the objection lodged with the HKIR. The Group purchased tax reserve certificates in respect of LFT for the year of assessment 2008/09 as directed by the Commissioner of the HKIR pending the decision of the judicial review application. As of the date of this annual report, the hearing date for the judicial review application is yet to be fixed. 7 PROFIT ATTRIBUTABLE TO SHAREHOLDERS OF THE COMPANY The profit attributable to shareholders of the Company is dealt with in the accounts of the Company to the extent of US$562,977,000 (2010: US$569,383,000) (Note 26). 8 EARNINGS PER SHARE The calculation of basic earnings per share is based on the Group’s profit attributable to shareholders of US$681,229,000 (2010: US$548,491,000) and on the weighted average number of 8,079,799,000 (2010: 7,644,510,000) shares in issue during the year after taking into account the effect of the Share Subdivision in May 2011. Diluted earnings per share is calculated by adjusting the weighted average number of 8,079,799,000 (2010: 7,644,510,000) ordinary shares in issue by 35,476,000 (2010: 86,438,000), after taking into account the effect of the Share Subdivision in May 2011, to assume conversion or all dilutive potential ordinary shares granted under the Company’s Option Scheme and release of all shares held by escrow agents for settlement of acquisition consideration. For the calculation of dilutive potential ordinary share granted under the Company, a calculation is done to determine the number of shares that could have been acquired at fair value (determined as the average annual market share price of the Company’s shares) based on the monetary value of the subscription rights attached to outstanding share options. The number of shares calculated as above is compared with the number of shares that would have been issued assuming the exercise of the share options. 9 DIVIDENDS 100 LI & FUNG LIMITED | ANNUAL REPORT 2011 2011 2010 US$’000 US$’000 (Restated) Interim, paid, of US$0.024 (equivalent to HK$0.19) (2010: US$0.024 (equivalent to HK$0.19)) per ordinary share (Note) Final, proposed, of US$0.044 (equivalent to HK$0.34) 197,360 185,816 (2010: US$0.033 (equivalent to HK$0.26)) per ordinary share (Note) 354,611 269,234 551,971 455,050 At a meeting held on 22 March 2012, the Directors proposed a final dividend of US$0.044 (equivalent to HK$0.34) per share. The proposed dividends are not reflected as a dividend payable in these accounts, but will be reflected as an appropriation of retained earnings for the year ending 31 December 2012 (Note 26). NOTE: Interim and final dividend per share of 2010 have been adjusted for the effect of Share Subdivision in May 2011.
10 STAFF COSTS INCLUDING DIRECTORS’ EMOLUMENTS NOTES TO THE ACCOUNTS (CONTINUED) 2011 2010 US$’000 US$’000 (Restated) Salaries and bonuses 1,078,720 675,893 Staff benefits 78,259 55,076 Pension costs of defined contribution plans 47,117 27,106 Employee share option expenses 18,906 33,281 Pension costs of defined benefits plans (Note 28) 3,066 1,694 Long service payments 961 184 1,227,029 793,234 Forfeited contributions totalling US$1,142,000 (2010: US$2,364,000) were utilized during the year and no remaining amount was available at the year-end to reduce future contributions. 11 DIRECTORS’ AND SENIOR MANAGEMENT’S EMOLUMENTS (a) DIRECTORS’ AND SENIOR MANAGEMENT EMOLUMENTS The remuneration of every Director for the year ended 31 December 2011 is set out below: Salary & Discretionary Name of Director Fees allowance bonuses (Note) scheme Total US$’000 US$’000 US$’000 US$’000 US$’000 US$’000 Executive directors 2011 Other benefits Employer’s contribution to pension William Fung Kwok Lun 21 615 4,105 – 2 4,743 Bruce Philip Rockowitz 21 572 4,104 43 2 4,742 Spencer Theodore Fung 21 1,024 301 10 2 1,358 Non-executive directors Victor Fung Kwok King 70 – – – – 70 Paul Edward Selway-Swift 56 – – – – 56 Allan Wong Chi Yun 46 – – – – 46 Franklin Warren McFarlan 44 – – – – 44 Martin Tang Yue Nien 45 – – – – 45 Benedict Chang Yew Teck 19 – – – – 19 Fu Yuning 7 – – – – 7 LI & FUNG LIMITED | ANNUAL REPORT 2011 101
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LI & FUNG LIMITED (Incorporated in
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CORPORATE INFORMATION NON-EXECUTIVE
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THE AMERICAS Guatemala City Lima Ma
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CHAIRMAN’S STATEMENT Victor Fung
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CHAIRMAN’S STATEMENT (CONTINUED)
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CONSUMER NEEDS THE SUPPLY CHAIN CON
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MANAGEMENT DISCUSSION & ANALYSIS Wi
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MANAGEMENT DISCUSSION & ANALYSIS (C
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CORPORATE GOVERNANCE The Board of D
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CORPORATE GOVERNANCE (CONTINUED) In
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CORPORATE GOVERNANCE (CONTINUED) LI
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CORPORATE GOVERNANCE (CONTINUED) RI
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CORPORATE GOVERNANCE (CONTINUED) CO
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CORPORATE GOVERNANCE (CONTINUED) As
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CORPORATE GOVERNANCE (CONTINUED) Th
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CORPORATE GOVERNANCE (CONTINUED) CO
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SUSTAINABILITY OVERVIEW In 2011, we
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SUSTAINABILITY (CONTINUED) A summar
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SUSTAINABILITY (CONTINUED) WELL-BEI
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DIRECTORS AND SENIOR MANAGEMENT DIR
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DIRECTORS AND SENIOR MANAGEMENT (CO
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Page 55 and 56: REPORT OF THE DIRECTORS The directo
Page 57 and 58: Number of Share Options REPORT OF T
Page 59 and 60: SUBSIDIARIES Details of the Company
Page 61 and 62: DIRECTORS The directors during the
Page 63 and 64: REPORT OF THE DIRECTORS (CONTINUED)
Page 65 and 66: REPORT OF THE DIRECTORS (CONTINUED)
Page 67 and 68: OPINION INDEPENDENT AUDITOR’S REP
Page 69 and 70: CONSOLIDATED PROFIT AND LOSS ACCOUN
Page 71 and 72: CONSOLIDATED BALANCE SHEET As at 31
Page 73 and 74: BALANCE SHEET As at 31 December 201
Page 75 and 76: CONSOLIDATED STATEMENT OF CHANGES I
Page 77 and 78: NOTES TO THE ACCOUNTS 1 BASIS OF PR
Page 79 and 80: NOTES TO THE ACCOUNTS (CONTINUED) 1
Page 93 and 94: 2 CRITICAL ACCOUNTING ESTIMATES AND
Page 95 and 96: 3 SEGMENT INFORMATION (CONTINUED) Y
Page 97 and 98: 3 SEGMENT INFORMATION (CONTINUED) N
Page 99 and 100: 4 OPERATING PROFIT (CONTINUED) The
Page 101: 6 TAXATION (CONTINUED) NOTES TO THE
Page 105 and 106: 11 DIRECTORS’ AND SENIOR MANAGEME
Page 107 and 108: 12 INTANGIBLE ASSETS Brand Buying a
Page 109 and 110: 12 INTANGIBLE ASSETS (CONTINUED) NO
Page 111 and 112: 13 PROPERTY, PLANT AND EQUIPMENT (C
Page 113 and 114: 17 AVAILABLE-FOR-SALE FINANCIAL ASS
Page 115 and 116: 19 DUE FROM/(TO) RELATED COMPANIES
Page 117 and 118: 21 TRADE AND OTHER RECEIVABLES (CON
Page 119 and 120: 22 CASH AND CASH EQUIVALENTS NOTES
Page 121 and 122: 24 BANK BORROWINGS (CONTINUED) The
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Page 129 and 130: 27 LONG-TERM LIABILITIES NOTES TO T
Page 131 and 132: 27 LONG-TERM LIABILITIES (CONTINUED
Page 133 and 134: 28 POST-EMPLOYMENT BENEFIT OBLIGATI
Page 135 and 136: 29 DEFERRED TAXATION (CONTINUED) NO
Page 137 and 138: 30 NOTES TO THE CONSOLIDATED CASH F
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Page 141 and 142: 31 BUSINESS COMBINATIONS (CONTINUED
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Page 145 and 146: 36 FINANCIAL RISK MANAGEMENT NOTES
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Page 149 and 150: 38 FAIR VALUE ESTIMATION NOTES TO T
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41 PRINCIPAL SUBSIDIARIES AND ASSOC
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LIFUNG TOWER 888 Cheung Sha Wan Roa
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2011 - Li & Fung Limited

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