Bloks Group Limited — Earnings Release 2003

Dec 12, 2003

Listed Company Information

HK PHARMA<00182> - Results Announcement Hong Kong Pharmaceutical Holdings Limited announced on 12/12/2003: (stock code: 00182 ) Year end date: 31/03/2003 Currency: HKD Auditors' Report: Qualified (Audited ) (Audited ) Last Current Corresponding Period Period from 01/04/2002 from 01/04/2001 to 31/03/2003 to 31/03/2002 Note ('000 ) ('000 ) Turnover : 108,321 71,063 Profit/(Loss) from Operations : (72,225) (17,224) Finance cost : (6,683) (6,385) Share of Profit/(Loss) of Associates : N/A N/A Share of Profit/(Loss) of Jointly Controlled Entities : N/A N/A Profit/(Loss) after Tax & MI : (59,263) (19,559) % Change over Last Period : N/A % EPS/(LPS)-Basic (in dollars) : (0.0427) (0.0142) -Diluted (in dollars) : N/A N/A Extraordinary (ETD) Gain/(Loss) : N/A N/A Profit/(Loss) after ETD Items : (59,263) (19,559) Final Dividend : NIL NIL per Share (Specify if with other : N/A N/A options) B/C Dates for Final Dividend : N/A Payable Date : N/A B/C Dates for (-) General Meeting : N/A Other Distribution for : N/A Current Period B/C Dates for Other Distribution : N/A Remarks: 1. LOSS PER SHARE The calculation of basic loss per share is based on the net loss from ordinary activities attributable to shareholders for the year of approximately HK$59,263,000 (2002: approximately HK$19,559,000), and the weighted average number of 1,389,411,493 (2002: 1,374,136,424) ordinary shares in issue during the year. Diluted loss per share amounts for the years ended 31 March 2003 and 2002 have not been presented because the effects of the assumed conversion of the share options and convertible notes of the Company during these years were anti-dilutive. 2. DIVIDEND The Directors do not recommend the payment of any dividend for the year ended 31 March 2003 (2002:Nil). 3. SUMMARY OF THE AUDITORS' REPORT Fundamental uncertainty relating to going concern basis In forming the opinion, the auditors have considered the adequacy of the disclosures made in notes to the financial statements concerning the adoption of the going concern basis on which the financial statements have been prepared. As explained in notes to the financial statements, the Group is currently undertaking a number of measures to relieve its current liquidity problems. The financial statements have been prepared on a going concern basis, the validity of which depends upon the successful outcome of the proposed debt restructuring plan of the Group, the ongoing support of the Group's principal banks and other lenders, the availability of additional external funding and the attainment of profitable and positive cash flow operations. The financial statements do not include any adjustment that may be necessary should the implementation of such measures be unsuccessful. The auditors consider that appropriate disclosures have been made, but the fundamental uncertainty relating to whether the going concern basis is appropriate is so extreme that they have disclaimed their opinion. Disagreement about accounting treatment - insufficient provisions against amounts due from intermediate holding companies As more fully explained in notes to the financial statements, the Group's receivables from intermediate holding companies included in current assets in the balance sheet comprise an aggregate amount of approximately HK$13,378,000 due from Tin Ming Management Limited and Hong Tau Investment Limited. The repayment dates of these receivables have been revised on a number of occasions, and have been further extended to 31 March 2004. Only HK$700,000 has been settled subsequent to the balance sheet date. Notwithstanding the revised repayment terms, the auditors consider that, in the absence of any security for these debts or other reliable financial information about these intermediate holding companies and their ability to settle these overdue amounts, the auditors believe that the Group is unlikely to recover the remaining balance of approximately HK$12,678,000 in full and a provision should have been made against these receivables. However, due to the absence of sufficient information, it is also impracticable to quantify the amount of the provision to be made. If such provision had been made, the Company's and the Group's net loss from ordinary activities attributable to shareholders for the year ended 31 March 2003 would have been increased and the Company's and Group's net assets as at 31 March 2003 would have been reduced by the amounts thereof. Disclaimer of opinion Because of the significance of the fundamental uncertainty relating to the going concern basis, the auditors are unable to form an opinion as to whether the financial statements give a true and fair view of the state of affairs of the Company and of the Group as at 31 March 2003 and of the loss and cash flows of the Group for the year ended and have been properly prepared in accordance with the disclosure requirements of the Hong Kong Companies Ordinance. Had they not disclaimed their opinion, they would have qualified their report with respect to their disagreement with the Group's accounting treatment under the heading "Disagreement about accounting treatment - insufficient provisions against amounts due from intermediate holding companies" above.