CHINA STATE CONSTRUCTION DEVELOPMENT HOLDINGS LIMITED — Earnings Release 2002

Apr 28, 2003

Listed Company Information

UNIVERSAL HOLD<00419> - Results Announcement Universal Holdings Limited announced on 25/04/2003: (stock code: 00419 ) Year end date: 31/12/2002 Currency: HKD Auditors' Report: Unqualified (Audited ) (Audited ) Last Current Corresponding Period Period from 1/1/2002 from 1/1/2001 to 31/12/2002 to 31/12/2001 Note ('000 ) ('000 ) Turnover : 51,791 128,875 Profit/(Loss) from Operations : (154,256) (155,337) Finance cost : (3,979) (3,443) Share of Profit/(Loss) of Associates : (11,393) N/A Share of Profit/(Loss) of Jointly Controlled Entities : (1,727) (6,930) Profit/(Loss) after Tax & MI : (95,103) (138,404) % Change over Last Period : N/A % EPS/(LPS)-Basic (in dollars) : (0.034) (0.05) -Diluted (in dollars) : N/A N/A Extraordinary (ETD) Gain/(Loss) : N/A N/A Profit/(Loss) after ETD Items : (95,103) (138,404) 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 Group reorganization The Company was incorporated in the Cayman Islands as an exempted company with limited liability on 27th May 2002 under the Companies Law (2002 Revision) (Cap. 22) of the Cayman Islands. On incorporation, the Company had authorized share capital of HK$100,000 divided into 10,000,000 shares of HK$0.01 each. Pursuant to a reorganization scheme (the "Group Reorganization"), the Company became the holding company of the companies now comprising the Group on 23rd October 2003. This was accomplished by acquiring the entire issued share capital of Universal Appliances Limited ("UAL"), the intermediate holding company of the other subsidiaries as set out in note 38 to the accounts, consideration of and in exchange for the allotment and issue of 240,760,000 preference shares of HK$0.01 each and 2,774,293,000 ordinary shares of HK$0.01 each in the share capital of the Company, in which 240,760,000 preference shares and 2,774,283,000 ordinary shares were allotted and issued on 23rd October 2002 credited as fully paid. The Company also applied a sum of HK$10,000 out of its share premium account for the 1,000,000 shares of the Company which had been issued nil paid on 27th May 2002. Further details of the Group Reorganization are set out in the notes 26 and 27 to the accounts and in UAL's circular dated 31 July 2002. UAL consequently became the intermediate holding company of such subsidiaries. The Group resulting from the Group Reorganisation is regarded as a continuing entity. Accordingly, the accounts of the Group have been prepared on the basis as if the Company had always been the holding company of the Group using the principles of merger accounting in accordance with statement of Standard Accounting Practice ("SSAP") 27 "Accounting for Group Reconstructions". 2 Principal accounting policies These accounts have been prepared in accordance with accounting principles generally accepted in Hong Kong and comply with accounting standards issued by the Hong Kong Society of Accountants ("HKSA"). They have been prepared under the historical cost convention, except for short-term investments which are carried at their fair values as at the balance sheet date. In the current year, the Group adopted the following Statements of Standard Accounting Practice ("SSAP") issued by the HKSA which are effective for accounting periods commencing on or after 1 January 2002: SSAP 1 (revised) : Presentation of financial statements SSAP 11 (revised) : Foreign currency translation SSAP 15 (revised) : Cash flow statements SSAP 34 : Employee benefits 3. Dividends The directors do not recommend the payment of a dividend. 4 Operating loss Operating loss is stated after crediting and charging the following: Group 2002 2001 HK$'000 HK$'000 Crediting --------- Net other operating expenses including: Net gain on dilution of interests in subsidiaries 23,684 6,338 Write-back of provision against doubtful debts 0 8,228 Net gain on disposal of subsidiaries 11,549 0 Net gain on disposal of fixed assets 621 0 Gain on disposal of short-term investments 0 353 Write-back of provision for taxation 2,180 0 Write-back of other payable 1,437 0 Write-back of provision for legal case 12,418 0 ====================== Charging -------- Cost of inventories sold 25,445 62,844 Cost of services provided 6,070 9,998 Depreciation of owned assets 19,474 15,670 Auditors' remuneration 1,535 1,500 ----------------------- Staff costs (excluding directors' remuneration) Wages and salaries 50,734 67,130 Unutilised annual leave 687 0 Termination benefits 1,253 50 Contributions to defined contribution Mandatory Provident Fund 2,291 4,514 Less: Costs capitalised (13,198) (12,917) Less: Forfeited contributions (96) (506) ------------------------ 42,301 58,271 ------------------------ Operating lease rentals: Land and buildings 8,451 17,162 Equipment 354 286 ------------------------ 8,805 17,448 ------------------------ Net other operating expenses including: Amortisation of intangibles: Film rights 3,489 5,985 Goodwill 2,024 2,598 Development costs 3,908 2,967 Write-off of fixed assets 0 5,663 Write-off of inventory 625 0 Provision against inventories 4,531 1,251 Provision for bad and doubtful debts 6,108 34,554 Write-off of bad and doubtful debts 33,855 4,568 Net unrealised loss of short-term investments 6,692 8,134 Net loss on disposal of subsidiaries 0 1,171 Net loss on disposal of fixed assets 0 112 Provision for impairment loss on investment securities 382 23,032 Exchange losses, net 55 202 ====================== 5 Taxation No provision for Hong Kong and overseas profits tax has been made in the accounts as the Group did not have any assessable profit for the year (2001: Nil). The tax credit for the current year represents over provision for Hong Kong profits tax in prior years. No provision for deferred tax has been made in the accounts as the crystallisation of the net deferred tax asset in the foreseeable future is uncertain. 6 Loss per share The calculation of the basic loss per share is based on the Group's loss attributable to ordinary shareholders of HK$95,103,000 (2001: HK$138,404,000) and on the weighted average number of 2,774,293,000 (2001: 2,774,293,000) ordinary shares in issue during the year. No diluted loss per share is shown for the two years ended 31st December 2002 and 2001 as the share options and convertible preference shares outstanding had an anti-dilutive effect on the basic loss per share for both years. 7. Continuing Operation / Discontinued Operation All the turnover and loss of the Group are derived from Continuing Operation. The Group did not discontinue any of its operation in year 2002 and 2001. For more details, please refer to the press announcement today.