You must answer FIVE (5) questions. (Total 100 marks) Question 1 Please refer to the attached financial statements for Noble Group Limited for the financial year ended December 31, 2009 which also provides comparative figures for the financial year ended December 31, 2008. In order to evaluate the Group, calculate the following ratios for the financial years ended 2009 and 2008. (a) Two ratios that are used to assess the risk from use of debt also known as financial leverage (one ratio using total debt and one ratio using long term debt) (b) One ratio which measures the debt servicing capability of the company from the pre-tax profit. (Assume that Finance Costs are the Interest costs for the purpose of this calculation.) Comment on the changes in the ratios from a credit analysis perspective. (20 marks) Question 2 Please refer to the attached financial statements for Noble Group Limited for the financial year ended December 31, 2009 which also provides comparative figures for the financial year ended December 31, 2008. In order to evaluate the Group, calculate the following ratios for the financial years ended 2009 and 2008. (a) Two ratios that are used in short term Liquidity Analysis using current asset and current liability items only (b) One ratio that is used in profitability margin analysis Comment on the changes in the ratios from a credit analysis perspective. (20 marks) FIN365 Copyright 2010 SIM University Examination - July Semester 2010 Page 2 of 7 Question 3 Please refer to the Consolidated Statement of Cashflow of Keppel Corporation provided below: (a) In order to understand better the liquidity position of Keppel Corporation, the analyst needs to study the statement of cashflow. Analyse the significant changes in the key items in each component of the cashflow statement that have contributed to the improvement in the cash position of the company in 2009 over 2008. (10 marks) FIN365 Copyright 2010 SIM University Examination - July Semester 2010 Page 3 of 7 (b) Using the cashflow statement and the additional information provided in the table below, calculate the following for Keppel Corporation for 2009 and 2008 using the financial statements for 2009 and 2008. Comment briefly on the changes: x x Cashflow Yield Free Cashflow (Use Net Capital Expenditure from table below.) Particulars (Figures in SGD '000) Net Income Net Capital Expenditure 2009 1,829,831 426861 2008 1,321,411 391942 2007 (10 marks) Question 4 Please refer to the following common-size statement for Noble Group Limited for the financial year ended December 31, 2009 which also provides comparative figures for the financial year ended December 31, 2008. (a) Complete the two missing figures for Net Profit. Review the common size income statement for the year 2008 and 2009 and comment on the significant changes with possible reasons for the same given the business and economic conditions the company was operating in. (10 marks) Revenue Cost of sales Gross Profit Other operating income net of expenses Selling, Administrative and Operating expenses Share of results of - associates - jointly-controlled entities Profit before interest and tax Finance income Finance costs Profit before taxation Taxation Profit for the year FIN365 Copyright 2010 SIM University Examination - July Semester 2010 2009 USD 000 31,183,114 30,078,068 1,105,046 125,503 % 100% 96.46% 3.54% 0.40% 2008 USD 000 36,090,161 34,742,563 1,347,598 103,856 % 100% 96.27% 3.73% 0.29% -422,912 -1.36% -567,584 -1.57% -20,597 -4,189 782,851 32,425 -195,126 620,150 -65,020 555,130 -0.07% -0.01% 2.51% 0.10% -0.63% 1.99% -0.21% ? -21,609 5,802 868,063 42,988 -235,075 675,976 -96,238 579,738 -0.06% 0.02% 2.41% 0.12% -0.65% 1.87% -0.27% ? Page 4 of 7 (b) Given that Noble Group operates in different countries with various operating currencies and has borrowings on which interest is payable at a floating rate, identify two risks that the company faces due to this and for each risk, suggest a derivative instrument which may be used to hedge that risk. (10 marks) Question 5 Noble Group has the following comment in its annual report for the financial year 2009: Note 39 to the financial statements: Operating Lease Commitments (b) As lessee The Group leases certain of its vessels and office properties under operating lease arrangements for terms up to 20 years. Future minimum lease rentals payable under non-cancellable operating leases as at 31 December 2009 were as follows: Within one year In the second to fifth years, inclusive After five years Total 2009 US$'000 131,929 251,407 184,908 568,244 2008 US$'000 83,551 77,624 18,942 180,117 It also has the following note on the accounting policy for associates: Associates The Group's investments in associates are accounted for under the equity method of accounting. An associate is an entity, not being a subsidiary or jointly controlled entity, in which the Group has a long-term interest of generally not less than 20% of the equity voting rights and over which it is in a position to exercise significant influence. (a) If Noble Group had entered into a financial or capital lease as opposed to an operating lease, what would have been the impact on their financials such as: (i) (ii) (iii) (iv) (v) (vi) Fixed Assets Total Liabilities Interest Expense Depreciation Operating Income Interest Coverage Ratio Indicate whether each item would be higher or lower explaining why. (10 marks) (b) From an analyst's perspective, comment on the use of equity method vs. consolidation in terms of information additionally available or lost. (10 marks) FIN365 Copyright 2010 SIM University Examination - July Semester 2010 Page 5 of 7 Question 6 Noble Group has made the following disclosures about significant accounting policies in its annual report for the year 2009. (1) Property Plant and Equipment Depreciation is calculated on the straight-line basis to write off the cost of each item of property, plant and equipment to its residual value over its estimated useful life. The principal annual rates used for this purpose are as follows: Land and buildings - 2 1/2% or over the terms of the leases, if shorter Leasehold improvements - over the terms of the leases Vessels - 4% to 10% Plant and equipment - 5% to 33 1/3% Motor vehicles - 22 1/2% to 33 1/3% Land held on a freehold basis is not depreciated. Borrowing costs Borrowing costs directly attributable to the acquisition, construction or production of qualifying assets, i.e. assets that necessarily take a substantial period of time to get ready for their intended use or sale, are calculated using the effective interest rate method in accordance with IAS 39 and are capitalised as part of the cost of those assets. The capitalisation of such borrowing costs ceases when the assets are substantially ready for their intended use or sale. Investment income earned on the temporary investment of specific borrowings pending their expenditure on qualifying assets is deducted from the borrowing costs capitalised. (2) Mine properties On acquisition of mining related operations and businesses, fair values reflecting conditions at the date of acquisition are attributed to the identifiable assets and liabilities acquired. Mineral reserves and resources, include mining rights, which can be reliably valued, are recognised in the assessment of fair values on acquisition. Other potential reserves and resources and mining rights, for which, in the directors' opinion, values cannot be reliably determined, are not directly recognised at their fair values. The mineral reserves and resources are amortised over the estimated lives of the mines. Costs directly attributable to the construction and development of a mine are capitalised as mine development until such time as production commences. These amounts, together with the capitalised exploration costs, are amortised over the estimated life of the resource from the period when production commences. Costs that are not directly attributable to construction and development are expensed as incurred. (3) Inventories Inventories principally comprise commodities held for trading and inventories that form part of the Group's normal purchase, sale or usage requirements for its manufacturing or processing activities. FIN365 Copyright 2010 SIM University Examination - July Semester 2010 Page 6 of 7 All the other inventories are stated at the lower of cost and net realisable value. Raw material cost is determined on the first-in, first-out basis, weighted average basis or on a specific basis if such inventories are not ordinarily interchangeable. Finished products include raw material costs, direct labour and a proportion of manufacturing overheads based on normal operating capacity. Net realisable value is based on estimated selling prices less estimated costs of completion and the estimated costs necessary to make the sales. (a) With respect to Item 1 above, what would be the impact on the financial statements of Noble Group if the company adopted an accelerated depreciation method as opposed to straight line method? (5 marks) (b) Again with respect to Item 1 above, what adjustment will you make if you are comparing the financials of Noble Group with another company that does not capitalise borrowing costs? (7 marks) (c) With respect to Item 2 above, what alternate method can Noble Group adopt to amortise the mineral reserves and resources as well as the capitalized costs? Discuss why this may be more appropriate for such a natural resource. (3 marks) (d) With respect to Item 3 above, as an analyst, how would you adjust Noble Group's financials such as inventory value, cost of goods sold in order to ensure that the parameters used accurately reflect the latest market prices? (5 marks) ----- END OF PAPER ----- FIN365 Copyright 2010 SIM University Examination - July Semester 2010 Page 7 of 7 Announcement $ # g u i d {0 CE4 4 1 8 E-0 A9 C-4 8 A3 -8 6 F8 -1 9 E5 F3 A0 6 7 7 C}# $ Noble Group Limited Full Year Financial Statements And Dividend Announcement Financial statements for the year ended 31 December 2009 These figures have been audited PART I INFORMATION REQUIRED FOR ANNOUNCEMENTS OF QUARTERLY (Q1, Q2, Q3), HALF YEAR AND FULL YEAR RESULTS 1(a)(i) An income statement (for the group) together with a comparative statement for the corresponding period of the immediately preceding financial year Notes REVENUE Cost of sales and services Gross profit Other income and gains net of other expenses Selling, administrative and operating expenses Share of profits and losses of: Jointly controlled entities Associates PROFIT BEFORE INTEREST AND TAX Finance income Finance costs Year ended 31/12/2009 US$'000 Year ended 31/12/2008 US$'000 Increase/ (Decrease) % 31,183,114 36,090,161 (14) (30,078,068) (34,742,563) (13) 1,105,046 1,347,598 (18) 125,503 (422,912) 103,856 (567,584) 21 (25) (4,189) (20,597) 5,802 (21,609) N/A (5) 782,851 868,063 (10) 32,425 (195,126) 42,988 (235,075) (25) (17) PROFIT BEFORE TAX (A) 620,150 675,976 (8) Tax (B) (65,020) (96,238) (32) PROFIT FOR THE YEAR 555,130 579,738 (4) Attributable to: Equity holders of the parent Non-controlling interests 556,010 (880) 577,279 2,459 (4) N/A 555,130 579,738 (4) 16.41 17.87 16.03 17.46 EARNINGS PER SHARE (see paragraph 6) - Basic, for profit for the year attributable to ordinary equity holders of the parent (US cents) - Diluted, for profit for the year attributable to ordinary equity holders of the parent (US cents) 1 | NOBLE GROUP LIMITED | Announcement | Announcement $ # g u i d {0 CE4 4 1 8 E-0 A9 C-4 8 A3 -8 6 F8 -1 9 E5 F3 A0 6 7 7 C}# $ Noble Group Limited Full Year Financial Statements And Dividend Announcement 1(a)(ii) A comprehensive income statement (for the group) together with a comparative statement for the corresponding period fo the immediately preceding financial year Year ended 31/12/2009 US$'000 Profit for the year Year ended 31/12/2008 US$'000 555,130 579,738 (152,049) 24,391 (127,658) (94,166) (34,859) (129,025) 45,469 45,469 (169,507) 8,331 (161,176) 28,402 844 (48,790) (601) (941) Other comprehensive losses for the year, net of tax (52,943) (340,533) Total comprehensive income for the year, net of tax (see paragraph 1(d)(i)) 502,187 239,205 Attributable to: Equity holders of the parent Non-controlling interests 502,223 (36) 237,687 1,518 502,187 239,205 Other comprehensive income/(losses) Net debit to cashflow hedging reserve, net of tax: Net losses on cashflow hedges before tax Income tax effect Net credit/(debit) to long term investment revaluation reserve, net of tax: Net gains/(losses) on revaluation of long term investments before tax Income tax effect Net credit/(debit) to exchange differences on translation of foreign operations Realisation of revaluation reserve Other comprehensive income/(losses) attributable to non-controlling interests 1(a)(iii) Notes for 1a(i) (A) The Group's profit before tax is arrived at after charging/(crediting): Depreciation Amortisation of mine properties Losses/(gain) on disposal of long term investments Charge on repurchase of senior notes Excess over the costs of a business combination Revaluation of pre-existing interest in an acquired subsidiary to fair value Impairment of trade receivables Impairment of long term investments Fair value losses/(gain) on short term investments Year ended 31/12/2009 US$'000 Year ended 31/12/2008 US$'000 63,457 71,328 4,348 27,712 (141,419) (12,581) 23,216 3,132 (976) 52,810 52,525 (139,527) 30,063 29,634 13,768 Year ended 31/12/2009 US$'000 Year ended 31/12/2008 US$'000 (B) Taxes on assessable profits have been calculated at the tax rates prevailing in the jurisdictions which the Group operates, based on existing legislations, interpretations and practices in respect thereof: Provision for the year Net deferred tax charge 55,838 9,182 64,241 31,997 Net tax expenses for the year 65,020 96,238 2 | NOBLE GROUP LIMITED | Announcement | Announcement $ # g u i d {0 CE4 4 1 8 E-0 A9 C-4 8 A3 -8 6 F8 -1 9 E5 F3 A0 6 7 7 C}# $ Noble Group Limited Full Year Financial Statements And Dividend Announcement 1(b)(i) A balance sheet (for the issuer and group), together with a comparative statement as at the end of the immediately preceding financial year Group Company As at As at As at As at 31/12/2009 31/12/2008 31/12/2009 31/12/2008 US$'000 US$'000 Notes US$'000 US$'000 NON-CURRENT ASSETS Property, plant and equipment Prepaid land leases Mine properties Intangible assets Investments in subsidiaries Interests in jointly controlled entities Interests in associates Long term investments Agricultural assets Loan receivables Deferred tax assets Total non-current assets 1,522,650 13,872 96,653 41,496 24,363 113,511 89,791 92,546 85,361 66,310 2,146,553 1,003,818 14,467 87,504 43,526 29,608 187,105 128,688 84,043 19,124 45,890 1,643,773 167,009 70 22,003 189,082 13,049 10,164 23,213 937,287 1,140,571 1,940,870 77,062 3,414,566 7,510,356 1,318,249 931,399 2,466,865 35,336 1,757,002 6,508,851 5,512,104 2,029 123,388 50,268 5,687,789 3,349,296 1,703 816,956 30,393 4,198,348 998,113 - - - 8,508,469 6,508,851 5,687,789 4,198,348 3,614,240 40,439 609,168 30,253 4,294,100 3,507,209 19,170 506,254 73,978 4,106,611 747,472 113,368 43,158 1,000 904,998 760,697 88,793 305,903 1,000 1,156,393 252,108 - - - Total current liabilities 4,546,208 4,106,611 904,998 1,156,393 NET CURRENT ASSETS 3,962,261 2,402,240 4,782,791 3,041,955 TOTAL ASSETS LESS CURRENT LIABILITIES 6,108,814 4,046,013 4,971,873 3,065,168 1,133,059 280,039 1,518,873 138,649 3,070,620 629,425 261,430 1,159,016 135,274 2,185,145 933,457 280,039 1,518,873 1,200 2,733,569 424,504 261,430 1,159,016 1,200 1,846,150 3,038,194 1,860,868 2,238,304 1,219,018 CURRENT ASSETS Due from subsidiaries Due from associates Cash and cash equivalents Trade receivables Prepayments, deposits and other receivables Contracts in progress Inventories (A) Assets of a disposal group classified as held for sale (D) Total current assets CURRENT LIABILITIES Due to subsidiaries Trade and other payables and accrued liabilities Excess of progress billings over contract costs Bank debts and current portion of long term debts Tax payable Liabilities of a disposal group classified as held for sale NON-CURRENT LIABILITIES Long term bank debts Convertible bonds Senior notes Deferred tax liabilities Total non-current liabilities NET ASSETS 3 | NOBLE GROUP LIMITED | Announcement | (D) (B) (C) Announcement $ # g u i d {0 CE4 4 1 8 E-0 A9 C-4 8 A3 -8 6 F8 -1 9 E5 F3 A0 6 7 7 C}# $ Noble Group Limited Full Year Financial Statements And Dividend Announcement 1(b)(i) A balance sheet (for the issuer and group), together with a comparative statement as at the end of the immediately preceding financial year (cont'd) Group Company As at As at As at As at 31/12/2009 31/12/2008 31/12/2009 31/12/2008 US$'000 US$'000 US$'000 US$'000 EQUITY Equity attributable to equity holders of the parent Issued capital 123,493 103,736 123,493 103,736 Share premium 1,197,009 402,444 1,197,009 402,444 Reserves (177,706) (53,894) 2,270 1,300 Reserves of a disposal group classified as held for sale (D) 3,910 Retained profits 1,808,731 1,398,859 915,532 711,538 2,955,437 1,851,145 2,238,304 1,219,018 Non-controlling interests Non-controlling interests attributable to a disposal group classified as held for sale TOTAL EQUITY 5,697 9,723 - - 77,060 82,757 9,723 - - 3,038,194 1,860,868 (D) 2,238,304 1,219,018 Notes: (A) Inventories Inventories of the Group include readily marketable inventories (hedged or pre-sold) of US$3,248,937,000 (2008: US$1,596,240,000), of which inventories in transit to customers amounted to US$716,927,000 (2008: US$123,868,000). Readily marketable inventories are certain commodity inventories which are readily convertible to cash because of their commodity characteristics, widely available markets and international pricing mechanisms. (B) Convertible bonds US$250,000,000 zero coupon convertible bonds due 13 June 2014 In June 2007, the Company issued US$250 million zero coupon convertible bonds. The convertible bonds are convertible into fully paid ordinary shares on and after 13 July 2007 up to the close of business on 13 May 2014 at an initial conversion price of S$2.779 per share (using a fixed exchange rate of S$1.5158 to US$1) as adjusted from time to time as described in the terms and conditions of the bonds. The conversion price of the bonds was adjusted to S$2.31 per share with effect from 26 May 2008 due to scrip dividend of one new ordinary share for every five shares held. Unless previously redeemed, converted or purchased and cancelled, the bonds will be redeemed at 150.234% of their principal amount on 13 June 2014. The bonds may be redeemed any time after 13 December 2009 but not less than seven business days prior to 13 June 2014 if on each of any 20 trading days out of the 30 consecutive trading days, prior to the date upon which notice of such redemption is given, the closing price of the shares is at least 125% of the early redemption amount divided by the conversion ratio as defined in the terms and conditions of the bond. The effective interest rate on the liability component of the convertible bond is 6.721%. All or some of the bonds may be redeemed by the holder on 13 June 2011 at 126.186% of their principal amount. (C) Senior notes US$191,859,000 (Originally US$700,000,000 Senior Notes due 17 March 2015) In March 2005, the Company issued 6.625% senior notes of US$700 million at 99.059%. The Company may redeem some or all of the senior notes at any time on or after 17 March 2010 at the redemption prices stipulated in the agreement of the senior notes (\"Optional Redemption\"). In addition, the Company may redeem all, but not less than all, of the senior notes at a price equal to their principal amount plus the accrued and unpaid interest upon certain changes in the tax laws of any relevant tax jurisdiction. If the Company experiences specific kinds of change of control, unless the Company has exercised its right to redeem all of the senior notes under Optional Redemption, each holder will have the right to require the Company to repurchase all or any part of the senior notes at a purchase price equal to 101% of their principal amount plus accrued and unpaid interest. During the year 2009, the Company repurchased US$488,141,000 (2008: US$20,000,000) of its US$700,000,000 6.625% senior notes. Such senior notes were cancelled on 19 November 2009 (2008: 6 November 2008), following which the total amount of senior notes outstanding was US$191,859,000. 4 | NOBLE GROUP LIMITED | Announcement | Announcement $ # g u i d {0 CE4 4 1 8 E-0 A9 C-4 8 A3 -8 6 F8 -1 9 E5 F3 A0 6 7 7 C}# $ Noble Group Limited Full Year Financial Statements And Dividend Announcement 1(b)(i) A balance sheet (for the issuer and group), together with a comparative statement as at the end of the immediately preceding financial year (cont'd) (C) Senior notes (continued) US$500,000,000 Senior Notes due 30 May 2013 In May 2008, the Company issued 8.500% senior notes of US$500 million at 100%. The Company may redeem all or any portion of the notes at 100% of the principal amount plus applicable premium plus accrued and unpaid interest stipulated in the agreement of the notes (\"Optional Redemption\"). At any time prior to 30 May 2011, the Company may redeem up to a maximum of 35% of the outstanding notes, with the proceeds of certain equity offerings, at 108.500% of the principal amount plus accrued and unpaid interest. In addition, the Company may redeem all, but not less than all, of the notes at a price equal to their principal amount plus accrued and unpaid interest upon certain changes in the tax laws of any relevant tax jurisdiction. If the Company experiences change of control, unless the Company has exercised its right to redeem all of the senior notes under Optional Redemption, each holder will have the right to require the Company to repurchase all or any part of the senior notes at a purchase price equal to 101% of their principal amount plus accrued and unpaid amount. US$850,000,000 Senior Notes due 29 January 2020 In October 2009, the Company issued 6.750% senior notes of US$850 million at 99.105%. The Company may redeem some or all of the senior notes at the redemption prices equal to 100% of the principal amount plus applicable premium plus accrued and unpaid interest stipulated in the agreement of the notes (\"Optional Redemption\"). In addition, the Company may redeem all, but not less than all, of the senior notes at a price equal to their principal amount plus the accrued and unpaid interest upon certain changes in the tax laws of any relevant tax jurisdiction. If the Company experiences specific kinds of change of control, unless the Company has exercised its right to redeem all of the senior notes under Optional Redemption, each holder will have the right to require the Company to repurchase all or any part of the senior notes at a purchase price equal to 101% of their principal amount plus accrued and unpaid interest. Recent corporate event Subsequent to the statement of financial position date, on 4 February 2010, the Company announced its intention to issue US$400,000,000 in principal amount of the 2020 Notes ("Additional 2020 Notes"). The Additional 2020 Notes will be consolidated and form a single series with the 2020 Notes issued on 29 October 2009. On 9 February 2010, the Company successfully issued the US$400 million 6.75% senior notes due 2020. The Notes will constitute general unsecured debt obligations of the Company and are listed in the Singapore Exchange Securities Trading Limited. (D) Held for sale operation On 22 December 2009, the Group announced that it had entered into various conditional agreements under which it would dispose of its equity interests in Gloucester Coal Limited (\"GCL\") and Middlemount Coal Pty Ltd (\"Middlemount\") to Macarthur Coal Limited (\"Macarthur\") for a mix of cash and scrip, collectively the \"disposal group\". The sale of GCL and Middlemount to Macarthur are inter-conditional. The disposal of GCL would, subject to the satisfaction of various conditions, be by way of acceptance by the Group of all share off market offer takeover offer by Macarthur. On 29 January 2010, the Group announced that it had entered into definitive agreements for the sale of Middlemount. As at 23 January 2010, the sale of the Group's interests in GCL and Middlemount, remained inter-conditional and moved to completion. As at 31 December 2009, the assets and liabilities of the disposal group were classified as a held for sale operation. 1(b)(ii) Aggregate amount of group's borrowings and debt securities As at 31/12/2009 Secured Unsecured US$'000 US$'000 As at 31/12/2008 Secured Unsecured US$'000 US$'000 (a) Amount repayable in one year or less, or on demand 34,259 574,909 63,022 443,232 (b) Amount repayable after one year 80,523 2,851,448 166,279 1,883,592 (c) Details of any collateral: Certain short term bank debts were secured by certain trade receivables and inventories of the Group as at 31 December 2009 and 31 December 2008. Certain long term bank debts were secured by certain of the Group's vessels and land and buildings as at 31 December 2009 and 31 December 2008. (d) On 28 October 2009, the Company announced that syndication for its Revolving Credit Facilities (the "Facilities") had been successfully closed. Due to exceptional interest the facilities increased to US$2.4 billion from the then existing US$1.2 billion. 5 | NOBLE GROUP LIMITED | Announcement | Announcement $ # g u i d {0 CE4 4 1 8 E-0 A9 C-4 8 A3 -8 6 F8 -1 9 E5 F3 A0 6 7 7 C}# $ Noble Group Limited Full Year Financial Statements And Dividend Announcement 1(c ) A cash flow statement (for the group), together with a comparative statement for the corresponding period of the immediately preceding financial year Year ended 31/12/2009 US$'000 CASH FLOWS FROM OPERATING ACTIVITIES Profit before tax Adjustments for: Share of profits and losses of: Jointly controlled entities Associates Interest income Interest expenses Dividend income from long term investments Arrangement fee income Excess over the costs of a business combination Revaluation of pre-existing interest in an acquired subsidiary to fair value Charge on repurchase of senior notes Net losses/(gain) on disposal of property, plant and equipment Losses/(gain) on disposal of long term investments Gain on repurchase of senior notes Impairment of long term investments Impairment of loan receivables Fair value losses/(gain) on short term investments Provision for losses on lease commitments Impairment of prepayments Impairment of goodwill Impairment of inventories Impairment of trade receivables Provision for legal claims Depreciation Amortisation of intangible assets Amortisation of mine properties Amortisation of prepaid land leases Share-based payment expenses Equity-settled share option expenses Gain on disposal of a subsidiary Operating profit before working capital changes Increase in trade receivables Decrease/(increase) in prepayments, deposits and other receivables Decrease/(increase) in contracts in progress Decrease/(increase) in inventories Increase in trade and other payables and accrued liabilities Increase/(decrease) in excess of progress billings over contract costs Net repayments/(additions) of cash balances with futures brokers not immediately available for use in the business operations Interest received Taxes paid Net cash inflow/(outflow) from operating activities CASH FLOWS FROM SHORT TERM FINANCING ACTIVITIES Net additions/(repayments) of short term bank debts Interest paid on short term financing activities Net cash inflow/(outflow) from short term financing activities Net cash inflow/(outflow) from operating and short term financing activities 6 | NOBLE GROUP LIMITED | Announcement | Year ended 31/12/2008 US$'000 620,150 675,976 4,189 20,597 (32,425) 195,126 (1,709) (141,419) (12,581) 27,712 2,367 4,348 3,132 (976) 23,216 3,745 63,457 2,211 71,328 343 12,921 15,076 (3,354) 877,454 (5,802) 21,609 (42,988) 235,075 (3,226) (6,372) (3,590) (139,527) (6,874) 29,634 4,960 13,768 4,720 4,933 637 1,775 30,063 2,200 52,810 3,279 52,525 194 23,567 11,633 (2,919) 958,060 (227,575) 364,687 (41,726) (1,650,579) 110,639 21,269 (11,320) (511,801) 85,269 40,730 900,986 (44,480) (179,014) 32,425 (117,207) (809,627) 56,959 42,988 (47,014) 1,470,377 60,096 (17,460) 42,636 (328,102) (52,851) (380,953) (766,991) 1,089,424 Announcement $ # g u i d {0 CE4 4 1 8 E-0 A9 C-4 8 A3 -8 6 F8 -1 9 E5 F3 A0 6 7 7 C}# $ Noble Group Limited Full Year Financial Statements And Dividend Announcement 1(c ) A cash flow statement (for the group), together with a comparative statement for the corresponding period of the immediately preceding financial year (cont'd) Year ended 31/12/2009 US$'000 Year ended 31/12/2008 US$'000 (766,991) 1,089,424 (626,885) 17,167 (94,447) (31,517) (264,800) 6,783 (2,277) (43) (21,279) 1,460 87 70 2,713 (6,891) (66,237) 1,930 (54,426) 1,709 (1,136,883) (506,152) 10,786 (30,055) (49,005) 2,919 (13,191) (13,410) (65,869) (303) 58 3,774 178,710 (93,961) (11,936) 3,226 (584,409) CASH FLOWS FROM LONG TERM FINANCING ACTIVITIES Exercise of share options Repurchase of own shares Share placement Additions of long term bank debts Repayments of long term bank debts Net proceeds from issuance of senior notes Repurchase of senior notes Dividend paid Interest paid on long term financing activities Net cash inflow from long term financing activities 2,662 733,655 1,010,000 (470,446) 835,968 (507,600) (107,829) (140,072) 1,356,338 9,217 (61,302) 148,736 346,928 (498,974) 491,250 (12,725) (68,011) (151,052) 204,067 NET INCREASE/(DECREASE) IN CASH AND CASH EQUIVALENTS Net foreign exchange differences Cash and cash equivalents at beginning of year (547,536) (8,465) 1,175,758 709,082 (4,465) 471,141 619,757 1,175,758 296,205 641,082 3,975 941,262 1,038,055 280,194 1,318,249 (321,505) 619,757 (142,491) 1,175,758 Net cash inflow/(outflow) from operating and short term financing activities CASH FLOWS FROM INVESTING ACTIVITIES Acquisition of property, plant and equipment Proceeds from disposal of property, plant and equipment Increase in mine properties Increase in agricultural assets Net cash paid on acquisition of subsidiaries Net cash received on disposal of a subsidiary Investment in associates Investment in jointly controlled entities Increase in amounts due from associates Decrease/(increase) in amounts due from jointly controlled entities Dividend income from an associate Dividend income from jointly controlled entities Proceeds from disposal of long term investments Payments for acquisition of long term investments Increase in loan receivables Contribution from non-controlling interests Acquisition of non-controlling interests Dividend income from long term investments Net cash outflow from investing activities CASH AND CASH EQUIVALENTS AT END OF YEAR ANALYSIS OF BALANCES OF CASH AND CASH EQUIVALENTS Bank balances and short term time deposits Cash balances with futures brokers Cash balance attributable to a disposal group classified as held for sale Less: Cash balances with futures brokers not immediately available for use in the business operations 7 | NOBLE GROUP LIMITED | Announcement | Announcement $ # g u i d {BD0 3 2 4 5 9 -DA5 B-4 C7 D-AA0 5 -5 BF3 B7 F5 9 0 1 E}# $ Noble Group Limited Quarterly Financial Statements And Dividend Announcement These figures have been audited 1(d)(i) A statement (for the issuer and group) showing either (i) all changes in equity or (ii) changes in equity other than those arising from capitalisation issues and distributions to shareholders, together with a comparative statement for the corresponding period of the immediately preceding financial year Attributable to equity holders of the parent Reserves Sharebased Capital payment redemption reserve reserve US$'000 US$'000 Capital reserve US$'000 Share option reserve US$'000 Cashflow hedging reserve US$'000 Long term investment revaluation reserve US$'000 Acquisition of noncontrolling interests US$'000 Held for sale operation US$'000 Share premium US$'000 At 1 January 2008 83,617 304,742 - 3,840 11,638 15,219 99,195 126,344 601 14,786 - - 889,591 Total comprehensive income, net of tax (See 1a(ii)) Issue of shares on exercise of share options Bonus shares issued Share-based payment Share placement Repurchase of own shares Amortisation of issuance expenses Equity-settled share option expenses Cash dividends 1,219 17,581 509 3,207 (2,397) - 7,998 (17,581) 23,058 145,529 (61,302) - - 2,397 - 45 - 11,633 - (129,025) - (161,176) - (601) - (48,790) - - - 577,279 (68,011) 402,444 - 6,237 11,683 26,852 (29,830) (34,832) - (34,004) - - 1,398,859 1,851,145 - - 556,010 502,223 (1,028) 992 (38,309) (107,829) - 2,662 12,921 733,655 10 15,076 (107,829) (54,426) 1,930 (4,928) - 76,068 - 5,697 77,060 Total comprehensive income, net of tax (See 1a(ii)) Non-controlling interests arising on business combination Contribution from non-controlling interests Disposal of a subsidiary Held for sale operation Issue of shares on exercise of share options Share-based payment Share placement Scrip dividends Amortisation of issuance expenses Equity-settled share option expenses Cash dividends Acquisition of non-controlling interests At 31 December 2009 8 | NOBLE GROUP LIMITED | Announcement | 103,736 - - - - - (127,658) 45,469 - 28,402 205 1,486 16,861 1,205 - 2,457 38,210 716,794 37,104 - (26,775) - - - 10 - 15,076 - (3,910) - - - - 123,493 1,197,009 (26,775) 6,237 11,693 41,928 (161,398) 10,637 - (5,602) (54,426) 3,910 - (54,426) 3,910 Retained profits US$'000 1,808,731 Total US$'000 1,549,573 237,687 9,217 23,567 148,736 (61,302) 45 11,633 (68,011) 2,955,437 Non-controlling interests US$'000 Non-controlling interests attributable to held for sale operation US$'000 Issued capital US$'000 At 31 December 2008 and 1 January 2009 Revaluation reserve US$'000 Exchange fluctuation reserve US$'000 8,205 - 1,518 9,723 Total equity US$'000 1,557,778 - 239,205 9,217 23,567 148,736 (61,302) 45 11,633 (68,011) 1,860,868 502,187 76,068 1,930 (4,928) 2,662 12,921 733,655 10 15,076 (107,829) (54,426) 3,038,194 Announcement $ # g u i d {0 CE4 4 1 8 E-0 A9 C-4 8 A3 -8 6 F8 -1 9 E5 F3 A0 6 7 7 C}# $ Noble Group Limited Full Year Financial Statements And Dividend Announcement 1(d)(ii) Details of any changes in the company's share capital arising from rights issue, bonus issue, share buy-backs, exercise of share options or warrants, conversion of other issues of equity securities, issue of shares for cash or as consideration for acquisition or for any other purpose since the end of the previous period reported on. State also the number of shares that may be issued on conversion of all the outstanding convertibles, as well as the number of shares held as treasury shares, if any, against the total number of issued shares excluding treasury shares of the issuer, as at the end of the current financial period reported on and as at the end of the corresponding period of the immediately preceding financial year Company As at As at 31/12/2009 31/12/2008 Share'000 Share'000 ISSUED CAPITAL At 1 January Issues of shares on exercise of share options Share-based payment Repurchase of own shares Share placement Issue of bonus shares on 26 May 2008 of one share for every five then existing shares held Issue of shares under Scrip Dividend Scheme 3,231,330 6,343 46,069 522,700 37,352 548,532 - At 31 December 3,843,794 3,231,330 223,583 187,251 SHARE OPTION OUTSTANDING AT 31 DECEMBER 2,603,482 38,013 15,891 (74,588) 100,000 There were no shares held as treasury shares as at 31 December 2009 (31 December 2008: nil) 1(d)(iii) To show the total number of issued shares excluding treasury shares as at the end of the current financial period and at the end of the immediately preceding year Total number of issued shares excluding treasury shares as at 31 December 2009 was 3,843,794,000 shares (31 December 2008: 3,231,330,000 shares). 1(d)(iv) A statement showing all sales, transfer, disposal, cancellation and/or use of treasury shares as at the end of the current financial period reported on N/A 2 Whether the figures have been audited, or reviewed and in accordance with which auditing standard or practice The financial statements have been audited, in accordance with Hong Kong Standards on Auditing. 3 Whether the figures have been audited or reviewed, the auditors' report (including any qualifications or or emphasis of matter) The Auditors' Report on the financial statements is unqualified. 4 Whether the same accounting policies and methods of computation as in the issuer's most recently audited annual financial statements have been applied The Group has adopted the new and revised IFRSs effective for annual periods beginning on or after 1 January 2009, including the adoption of IAS 1 (Revised) which resulted in new and amended disclosure as presented on the comprehensive income statement and the statement of changes in equity referred to in paragraphs 1(a)(ii) and 1(d)(i), such presentation hence does not follow the previous form presented in the most recently audited financial statements. The Group has early adopted IFRS 3 (Revised) for Business Combinations and IAS 27 (Revised) Consolidated and Separate Financial Statements effective for financial statements commencing on or after 1 July 2009. Such adoption has resulted in a change in accounting policies and the methods of computation applicable to accounting for business combinations and the acquisition of non-controlling interest. Except for the early adoption of IFRS 3 (Revised), the same accounting policies and methods of computation as in the issuer's most recently audited annual financial statements have been applied. 9 | NOBLE GROUP LIMITED | Announcement | Announcement $ # g u i d {0 CE4 4 1 8 E-0 A9 C-4 8 A3 -8 6 F8 -1 9 E5 F3 A0 6 7 7 C}# $ Noble Group Limited Full Year Financial Statements And Dividend Announcement 5 If there are any changes in the accounting policies and methods of computation, including any required by an accounting standard, what has changed, as well as the reasons for, and the effect of, the change The early adoption of IFRS 3 (Revised) and IAS 27 (Revised) as mentioned in paragraph 4 has had no material impact on the Group's results of operation and financial position. 6 Earnings per ordinary share of the group for the current period reported on and the corresponding period of the immediately preceding financial year, after deducting any provision for preference dividends Basic and diluted earnings per share amounts are calculated by dividing the profit for the year attributable to ordinary equity holders of the parent, respectively, by the weighted average number of ordinary shares outstanding during the year, and by the weighted average number of ordinary shares outstanding during the yeaer plus the weighted average number of ordinary share that would be issued on the conversion of all the dilutive potential ordinary shares into ordinary shares. 7 Year ended 31/12/2009 Share'000 Year ended 31/12/2008 Share'000 Weighted average number of ordinary shares Dilutive effect of share options 3,388,740 79,149 3,229,614 77,584 Weighted average number of ordinary shares adjusted for the dilutive effect 3,467,889 3,307,198 Net asset value (for the issuer and group) per ordinary share based on the total number of issued shares excluding treasury shares of the issuer at the end of the (a) current financial period reported on; and (b) immediately preceding financial year Group As at As at 31/12/2008 31/12/2009 Net asset value per ordinary share based on issued share capital at end of the year 8 US 77 cents US 57 cents Company As at As at 31/12/2008 31/12/2009 US 58 cents US 38 cents A review of the performance of the group, to the extent necessary for a reasonable understanding of the the group's business. It must include a discussion of the following:a) any significant factors that affected the turnover, costs, and earnings of the group for the current financial period reported on, including (where applicable) seasonal or cyclical factors; and b) any material factors that affected the cash flow, working capital, assets or liabilities of the group during the current financial period reported on Please refer to the attached appendix: management's discussion and analysis of financial condition and results of operations. 9 Where a forecast, or a prospect statement, has been previously disclosed to shareholders, any variance between it and nd the actual results No forecast was previously given. 10 A commentary at the date of this announcement of the significant trends and competitive conditions of the industry in which the group operates and any known factors or events that may affect the group in the next reporting period and the next 12 months Please refer to the attached appendix: management's discussion and analysis of financial condition and results of operations. 10 | NOBLE GROUP LIMITED | Announcement | Announcement $ # g u i d {0 CE4 4 1 8 E-0 A9 C-4 8 A3 -8 6 F8 -1 9 E5 F3 A0 6 7 7 C}# $ Noble Group Limited Full Year Financial Statements And Dividend Announcement 11 Dividend (a) Current financial period reported on Name of dividend Dividend type Dividend rate Par value of shares Tax rate Year ended 31 December 2009 Final Cash with option to elect scrip dividend per below US3.6 cents per ordinary share HK$0.25 N/A Final Scrip 6 for every 11 shares held HK$0.25 N/A Subsequent to the statement of financial position date, the directors recommend the payment of a cash dividend of US3.6 cents per share and the payment of a scrip dividend in the form of bonus shares to be alloted to the shareholders of the Company on the basis of six new shares for every eleven then existing issued shares. The dividend proposals are subject to the shareholders' approval at the forthcoming annual general and, in the case of scrip dividend, are also subject to the approval of the SGX-ST. In addition, under the Company's Scrip Dividend Scheme, sharesholders entitled to this dividend may elect to receive either cash or an allotment of ordinary shares in the Company credited as fully paid in lieu of cash. The payment of the Scrip Dividend will be subject to the receipt of in-principle approval from the SGX-ST for the listing and quotation of the new shares which may be issued under the Scheme in connection with the final dividend. (b) Corresponding period of the immediately preceding financial year Name of dividend Dividend type Dividend rate Par value of shares Tax rate Year ended 31 December 2008 Final Cash with option to elect scrip dividend per below US4.4 cents per ordinary share HK$0.25 N/A During the year, a Scrip Dividend Scheme was declared and the directors had determined that the Scrip Dividend Scheme would be applicable to the final dividend in which shareholders entitled to this dividend may elect to receive either cash or an allotment of shares in the Company credited as fully paid in lieu of cash. As a result, 37,351,813 shares were allotted to eligible shareholders who have elected to participate in the Scrip Dividend Scheme in respect of the final dividend. (c) Date payable : To be fixed later (d) Books closure date : To be fixed later 12 If no dividend has been declared/recommended, a statement to that effect Dividend recommended is stated in paragraph 11 above. 11 | NOBLE GROUP LIMITED | Announcement | Announcement $ # g u i d {0 CE4 4 1 8 E-0 A9 C-4 8 A3 -8 6 F8 -1 9 E5 F3 A0 6 7 7 C}# $ Noble Group Limited Full Year Financial Statements And Dividend Announcement PART II ADDITIONAL INFORMATION REQUIRED FOR FULL YEAR ANNOUNCEMENT (THIS PART IS NOT APPLICABLE TO Q1, Q2, Q3 OR HALF YEAR RESULTS) 13 Segmented revenue and results for business or geographical segments (of the group) in the form presented in the issuer's most recently audited annual financial statements, with comparative information for the immediately preceding year 2009 Sales to external 2008 Inter segment Sales to external Inter segment customers sales Total customers sales Total US$'000 US$'000 US$'000 US$'000 US$'000 US$'000 Segment revenue: Agriculture Energy Metals, minerals and ores Logistics Eliminations Total revenue 7,367,532 18,205,755 4,725,855 883,972 __________- 7,367,532 - 18,205,755 4,725,855 391,606 1,275,578 (_________ 391,606) __________ ( 391,606) 10,141,558 18,160,257 6,188,564 1,599,782 __________- - 10,141,558 - 18,160,257 6,188,564 656,774 2,256,556 (656,774) __________ ( 656,774) ________ 31,183,114 __________ __________ 31,183,114 _________- __________ _________ __________ 36,090,161 __________ __________ 36,090,161 ________- __________ ________ __________ Segment gross profit: Agriculture Energy Metals, minerals and ores Logistics Total gross profit 343,805 448,828 135,537 176,876 __________ 1,105,046 __________ 420,763 351,525 127,882 447,428 __________ 1,347,598 __________ 536,009 108,927 __________ 644,936 358,421 333,362 __________ 691,783 Share of profits and losses of: Jointly-controlled entities Associates Profit before tax Tax ( 4,189) ( 20,597) __________ 620,150 ( 65,020) __________ 5,802 ( 21,609) __________ 675,976 ( 96,238) __________ Profit for the year 555,130 __________ __________ 579,738 __________ __________ Segment results: Profit from operating activities: Agriculture, Energy and Metal, minerals and ores Logistics 12 | NOBLE GROUP LIMITED | Announcement | Announcement $ # g u i d {0 CE4 4 1 8 E-0 A9 C-4 8 A3 -8 6 F8 -1 9 E5 F3 A0 6 7 7 C}# $ Noble Group Limited Full Year Financial Statements And Dividend Announcement 14 In the review of performance, the factors leading to any material changes in contributions to turnover and earnings by the business or geographical segments Please refer to the attached appendix: management's discussion and analysis of financial condition and results of operations. 15 A breakdown of the Group's sales as follows: (a) Sales reported for the first half year (b) Operating profit after tax before deducting minority interests reported for the first half year (c) Sales reported for the second half year (d) Operating profit after tax before deducting minority interests reported for the second half year 16 Year ended 31/12/2009 US$'000 Year ended 31/12/2008 US$'000 13,255,042 340,225 19,928,691 291,091 (33) 17 17,928,072 16,161,470 11 214,905 288,647 (26) A breakdown of the total annual dividend (in dollar value) for the issuer's latest full year and its previous full year Year ended 31/12/2009 US$'000 (a) Ordinary (b) Preference Total 17 Increase % Interest Persons Transactions N/A BY ORDER OF THE BOARD Richard Samuel Elman Executive Chairman 23 February 2010 13 | NOBLE GROUP LIMITED | Announcement | 146,138 N/A 146,138 Year ended 31/12/2008 US$'000 68,011 N/A 68,011