CHINA STATE CONSTRUCTION DEVELOPMENT HOLDINGS LIMITED — Earnings Release 1999

May 4, 2000

Listed Company Information

UNIVERSAL APPLI<0419> - Results Announcement Universal Appliances Limited announced on 3/5/2000: (stock code: 419) Year end date: 31/12/1999 Currency: Hong Kong Dollars (Audited) (Audited) Last Current Corresponding Period Period from 1/1/1999 from 1/1/1998 to 31/12/1999 to 31/12/1998 ('000) ('000) Turnover - Continuing : 727,726 638,925 - Discontinued : - 129,855 Operating Profit/(Loss) - Continuing : (112,178) (250,519) - Discontinued : 101,319 128,071 Total Operating Profit/(Loss) : (10,859) (122,448) Share of Profit/(Loss) of Associated Companies : 9 - Share of Profit/(Loss) of Jointly Controlled Entities : 2,041 - Minority Interests : 78,204 2,292 Tax Recovery : 1,164 - Profit/(Loss) after Tax & MI : 70,559 (120,156) % Change over Last Period : N/A EPS/(LPS)-Basic : 3.3 cents (6.1 cents) -Diluted : - - Extraordinary (ETD) Gain/(Loss) : - - Profit/(Loss) after ETD Items : 70,559 (120,156) Final Dividend per Share : NIL NIL (Specify if with other options) : - - B/C Dates for Final Dividend : - Payable Date : - B/C Dates for (-) General Meeting : - Other Distribution for Current Period : - B/C Dates for Other Distribution : - Remarks: (1) Loss From Operating Activities The Group's loss from operating activities is arrived at after charging / (crediting): 1999 1998 HK$'000 HK$'000 (Restated) Amortization of deferred development costs 13,490 9,035 Amortization of goodwill 3,894 2,602 Goodwill written off 56,725 - Compensation for early termination of a director's service contract - 5,000 Compensation paid for settlement of legal case - 5,000 Write-off of deferred development costs 10,675 6,454 Provision against inventories 89,396 46,733 Inventories written-off 9,406 - Provision for bad and doubtful debts 108,621 28,725 Foreseeable loss on contract work in progress 2,789 10,326 Gain on dilution of interests in subsidiaries (1,272) - Loss on partial devestment of subsidiaries 5,596 - Gain on disposal of subsidiaries (430,296) - Gain on disposal of discontinued operations (101,319) (123,829) Unrealized holding loss on short term investment 16,742 - (2) Prior Year Adjustment In prior years, the Group adopted an accounting policy of capitalizing pre-operating expenses. On 11 April 2000, The Hong Kong Society of Accountants has issued Interpretation No. 9 "Accounting for Pre- operating Costs", which prohibits pre-operating expenses from being recognized as assets. As a result, the Group has written off the balance of its pre-operating expenses against the accumulated losses and restated the previous years' financial statements, as if the pre-operating expenses had never been capitalized as assets. In restating the Group's results for prior years on the basis of the new policy, the net loss attributable to shareholders of the Group for the year ended 31 December 1998 has been decreased by HK$6,323,000 and the accumulated deficit brought forward as at 1 January 1998 has been increased by HK$15,835,000. (3) Earnings per share The calculation of the basic earning (1998: loss) per share is based on the net profit attributable to the shareholders for the year ended 31 December 1999 of HK$70,559,000 (1998: net loss as restated HK$120,156,000) and the weighted average of 2,168,341,486 ordinary shares (1998: 1,983,689,157 ordinary shares) in issue during the year. There was no dilutive potential ordinary shares in 1998 and 1999 and therefore, no diluted profit or loss per share for the year were shown. (4) Taxation Hong Kong profits tax has not been provided (1998: Nil) as the Group did not generate any assessable profits during the year. Overseas profits tax has not been provided (1998: Nil) as the foreign subsidiaries and associates did not generate any assessable profits attributable to their operations in their respective countries of operation during the year. For more details, please refer to the press announcement today.