CHYY Development Group Limited — Annual Report 2002

Dec 30, 2002

GEM

IIN INT'L<08128> - Results Announcement (Final, 2001/2002, Summary)

IIN International Limited announced on 27/12/2002
(stock codes: Ord: 08128)

Year end date :30/09/2002
Currency :HKD
Auditors' report :Unqualified
Review of Quarterly Report by :N/A

Important Note :

This result announcement form only contains extracted information from
and should be read in conjunction with the detailed results announcement
of the issuer, which can be viewed on the GEM website at
http://www.hkgem.com

                                         (Audited)         (Audited)
                                       Current    Last Corresponding
                                       Period           Period
                                   from 01/10/2001   from 01/10/2000
                                     to 30/09/2002     to 30/09/2001
                                             $'000             $'000

Turnover : 59,522 262,978
Profit/(Loss) from Operations : (53,126) 55,185
Finance cost : (4,102) (5,233)
Share of Profit/(Loss) of Associates : N/A N/A
Share of Profit/(Loss) of Jointly
Controlled Entites : N/A N/A
Profit/(Loss) after Taxation & MI : (54,422) 48,540
% Change Over the Last Period : N/A
EPS / (LPS)
Basic (in dollar) : (HKD 0.0412) HKD 0.0533
Diluted (in dollar) : N/A HKD 0.0513
Extraordinary (ETD) Gain/(Loss) : N/A N/A
Profit (Loss) after ETD Items : (54,422) 48,540
Final Dividends per Share : NIL NIL
(specify if with other options) : N/A N/A
B/C Dates for Final Dividends : N/A
Payable Date : N/A
B/C Dates for Annual General Meeting : 23/01/2003 to 24/01/2003 bdi.
Other Distribution for Current Period : NIL
B/C Dates for Other Distribution : N/A
(bdi: both days inclusive)

                                   For and on behalf of
                                    IIN International Limited
                        Signature :
                             Name :Cheng Wing Tsan
                            Title :Executive Director

Responsibility statement

The directors of the Company (the "Directors") as at the date hereof
hereby collectively and individually accept full responsibility for the
accuracy of the information contained in this results announcement form
(the "Information") and confirm, having made all reasonable inquiries,
that to the best of their knowledge and belief the Information are
accurate and complete in all material respects and not misleading and
that there are no other matters the omission of which would make the
Information herein inaccurate or misleading. The Directors acknowledge
that the Stock Exchange has no responsibility whatsoever with regard
to the Information and undertake to indemnify the Exchange against all
liability incurred and all losses suffered by the Exchange in connection
with or relating to the Information.

Remarks:

1. Basis of Preparation

The Company was incorporated as an exempted company with limited
liability in the Cayman Islands on 14 December 1999 under the
Companies Law (1998 Revision) of the Cayman Islands. The
registered office of the Company is located at Huntlaw Building,
George Town,Grand Cayman,Cayman Islands.

Pursuant to a reorganisation scheme (the "Reorganisation") to
rationalise the Group��s structure in preparation for the public
listing of the Company��s shares on The Growth Enterprise Market
(the "GEM") of The Stock Exchange of Hong Kong Limited (the "Stock
Exchange"), the Company became the holding company of the
companies now comprising the Group on 31 December 1999. This was
accomplished by acquiring the entire issued share capital of II
Networks International Limited, the Group��s former holding company,
in consideration of and in exchange for the Company��s allotted and
issued share capital.

Further details of the Reorganisation and the subsidiaries acquired
pursuant thereto are set out in the Company's prospectus dated 26
November 2001. The shares of the Company were listed on the GEM
of the Stock Exchange on 30 November 2001.

The principal activity of the Company is investment holding.
During the year, the Group was principally engaged in the
provision of network solutions to the telecommunication service
providers in the People's Republic of China, excluding Hong Kong
and Macau (the "PRC").

The financial statements have been prepared in accordance with the
Hong Kong Statements of Standard Accounting Practice ("SSAPs"),
accounting principles generally accepted in Hong Kong and the
disclosure requirements of the Hong Kong Companies Ordinance.
They have been prepared under the historical cost convention,
except for the periodic revaluation of certain fixed assets.

The following recently-issued and revised SSAPs and related
Interpretations are effective for the first time for the
current year's financial statements.

�P SSAP 9 (Revised): "Events after the balance sheet date"
�P SSAP 18 (Revised): "Revenue"
�P SSAP 26: "Segment reporting"
�P SSAP 28: "Provisions, contingent liabilities and
contingent assets"
�P SSAP 29: "Intangible assets"
�P SSAP 30: "Business combinations"
�P SSAP 31: "Impairment of assets"
�P SSAP 32: "Consolidated financial statements and
accounting for investments in subsidiaries"
�P Interpretation 12: "Business combinations - subsequent
adjustment of fair values and goodwill
initially reported"
�P Interpretation 13: "Goodwill - continuing requirements for
goodwill and negative goodwill previously
eliminated against/credited to reserves"

1. Turnover and Other Revenue

Turnover represents the net invoiced value of goods sold, after
allowances for returns, trade discounts and business tax where
applicable, and services rendered. All significant intra-group
transactions have been eliminated on consolidation.

An analysis of the Group's turnover and other revenue is as follows:

                                         2002           2001
                                       HK$'000        HK$'000

Turnover
Telecommunications network
infrastructure solutions 31,112 218,367
Network management solutions 18,890 20,012
Other network solutions for sectors other
than telecommunications 9,520 24,599
------- -------
59,522 262,978
------- -------

Other revenue:
Bank interest income 869 1,008
Gain on partial disposal of a subsidiary 213 -
Gain on disposal of subsidiaries - 29,046
Others 2,399 1,188
------- -------
3,481 31,242
------- -------
63,003 294,220
======= =======

1. Taxation

Hong Kong profits tax has not been provided as the Group did not
generate any assessable profits arising in Hong Kong during the
year (2001: HK$1,400,000).

PRC corporate income tax has not been provided for Hunan IIN
Technologies Engineering Co., Limited, Hubei IIN-Galaxy Network
Co.,Limited, Hunan IIN Education Information Co., Limited and
Hunan Modern Time Technology Limited as none of these entities
generated any net assessable profits attributable to their
operations in the PRC during the year (2001: Nil).

PRC corporate income tax has not been provided for Beijing IIN
Data Network Technology Co., Ltd., Hunan IIN International Co.,
Ltd.("Hunan IIN International") and Hunan IIN-Galaxy Software
Development Co., Limited ("Hunan Galaxy"), which are Sino-foreign
joint ventures registered in the PRC, as none of these entities
generated any assessable profits attributable to their operations
in the PRC during the year (2001: Nil). All of these entities are
entitled to certain tax incentives under the relevant PRC tax laws.

Deferred tax has not been provided as there were no significant
timing differences which would give rise to a deferred tax
liability at the balance sheet date (2001: Nil).

1. Dividend

A special dividend of approximately HK$44,566,000 (the "Special
Dividend") was declared and approved by the board of directors and
shareholders of the Company for the benefit of the shareholders
whose names appeared on the register of members of the Company
on 31 October 2001 (except for Messrs. Wong Lee Ping, Lo Wai
Shun and Chan Kam Ching, all being shareholders of the
Company, who had waived their entitlements thereto).

The distribution of the Special Dividend was made out of the share
premium account of the Company immediately following the listing
of the Company's shares on the GEM of the Stock Exchange on
30 November 2001.

The Company resolved not to declare a final dividend in respect of
the year (2001: Nil).

1. (Earnings)/Loss per share

The calculation of basic earnings/(loss) per share is based on the
net loss from ordinary activities attributable to shareholders
for the year of HK$54,422,000 (2001: net profit of HK$48,540,000)
and the weighted average of 1,321,557,339 (2001: 911,197,350)
ordinary shares in issue during the year.

A diluted loss per share amount for the year ended 30 September
2002 has not been presented as the potential ordinary shares
outstanding had an anti-dilutive effect on the basic loss per
share for the year.

The calculation of diluted earnings per share for the year ended 30
September 2001 was based on the net profit from ordinary activities
attributable to shareholders for that year of HK$48,540,000 as used
in the basic earnings per share calculation. The weighted
average number of ordinary shares used in the calculation of
diluted earnings per share for that year was
945,877,750 shares, which included
911,197,350 shares in issue during that year, as used in the basic
earnings per share calculation, and the weighted average of
34,680,400 shares for that year assumed to have been issued at
nil consideration on the deemed exercise of the options granted
pursuant to the Pre-IPO Share Option Plan, adjusted to
reflect the share consolidation and capitalisation issue
subsequent to 30 September 2001

1. Impairment of Goodwill

The Group has adopted a policy to assess goodwill eliminated
against the capital reserve for impairment. As a result, the Group
has recognised an impairment of part of the goodwill previously
eliminated against the capital reserve, of HK$4,000,000 as a
charge to the consolidated profit and loss account during the year.
The situation giving rise to the impairment of the goodwill did
not materialise in the prior year as assessed by the directors.
Accordingly, this change of accounting policy has had no impact
on the figures reported in the prior year.