Glorious Sun Enterprises Limited — Earnings Release 2002

Apr 14, 2003

Listed Company Information

SHENYIN WANGUO<00218> - Results Announcement Shenyin Wanguo (H.K.) Limited announced on 11/4/2003: (stock code: 00218 ) Year end date: 31/12/2002 Currency: HKD Auditors' Report: Qualified (Audited ) (Audited ) Last Current Corresponding Period Period from 1/1/2002 from 1/1/2001 to 31/12/2002 to 31/12/2001 Note ($ ) ($ ) Turnover : 247,418,435 368,685,498 Profit/(Loss) from Operations : (11,298,032) 4,935,291 Finance cost : (58,539) (922,853) Share of Profit/(Loss) of Associates : (24,386) 23,894 Share of Profit/(Loss) of Jointly Controlled Entities : 26,651,089 17,123,750 Profit/(Loss) after Tax & MI : 10,668,473 18,043,716 % Change over Last Period : -40.9 % EPS/(LPS)-Basic (in dollars) : 0.0205 0.0347 -Diluted (in dollars) : 0.0182 0.0344 Extraordinary (ETD) Gain/(Loss) : N/A N/A Profit/(Loss) after ETD Items : 10,668,473 18,043,716 Final Dividend : 1 cent 1 cent per Share (Specify if with other : N/A N/A options) B/C Dates for Final Dividend : 12/5/2003 to 16/5/2003 bdi. Payable Date : 23/5/2003 B/C Dates for Annual General Meeting : 12/5/2003 to 16/5/2003 bdi. Other Distribution for : N/A Current Period B/C Dates for Other Distribution : N/A Remarks: 1. TURNOVER Turnover represents the aggregate of sales proceeds from securities and futures contracts trading, gross interest income from securities financing and direct loans, commission and brokerage income less rebates, fees for the rendering of services and dividend income. Revenue from the following activities has been included in turnover: 2002 2001 HK$ HK$ Financial services: Sales proceeds from securities and futures contracts trading 144,168,566 235,117,740 Interest income from securities financing and direct loans 33,453,645 41,465,898 Commission and brokerage income 49,552,831 72,957,435 Rendering of services 9,867,328 7,950,715 ___________ ___________ 237,042,370 357,491,788 ___________ ___________ Others: Bank interest income 3,686,117 2,094,339 Dividend income from Listed equity investments 1,106,887 847,306 Unlisted equity investment - an unconsolidated subsidiary 5,216,402 7,086,492 Others 366,659 1,165,573 ___________ ___________ 10,376,065 11,193,710 ___________ ___________ 247,418,435 368,685,498 =========== =========== 2. PROFIT/(LOSS) FROM OPERATING ACTIVITIES The Group's profit/(loss) from operating activities is arrived at after charging/(crediting): 2002 2001 HK$ HK$ Provision for bad and doubtful debts 119,400,000 1,500,000 Gain on disposal of subsidiaries and an unconsolidated subsidiary (19,224,728) (495,151) Write-back of prior years' accrued interest expenses on settlement of other loans and convertible note (12,000,000) (51,795,688) Gain on cancellation of convertible note (92,000,000) - Impairment provisions on long term investments 6,286,190 56,401,830 Interest expenses for financial services operations - on bank loans and overdrafts 5,518,585 8,451,083 - on other loans wholly repayable within five years 4,420,445 11,011,137 Net realised loss/(gain) on trading of listed equity investments and future contracts (895,244) 11,099,635 Net unrealised loss/(gain) on listed equity investments 4,053,400 (3,135,403) =========== ============ 3. EARNINGS PER SHARE (a) Basic earnings per share The calculation of basic earnings per share is based on the net profit from ordinary activities attributable to shareholders for the year of HK$10,668,473 (2001: HK$18,043,716) and the weighted average of 521,118,030 (2001: 519,696,660) ordinary shares in issue during the year. (b) Diluted earnings per share The calculation of diluted earnings per share is based on the net profit from ordinary activities attributable to shareholders for the year of HK$10,668,473 (2001: HK$18,043,716). The weighted average number of ordinary shares used in the calculation comprises the 521,118,030 (2001: 519,696,660) ordinary shares in issue during the year, as used in the basic earnings per share calculation, and the weighted average of 4,112,945 (2001: 4,242,910) ordinary shares assumed to have been issued at no consideration on the deemed exercise of all options outstanding during the year, and the weighted average of 59,961,590 (2001: Nil) ordinary shares assumed to have been issued on the full conversion of the convertible note outstanding during the year. 4. SUMMARY OF REPORT OF AUDITORS The auditors have considered the recovery of the Group's long term receivable of HK$183 million, net of provision for bad and doubtful debts of HK$110 million, as stated in the paragraph headed "Disclosure under Practice Note 19" below. This amount is due for repayment and there have been no settlements in respect thereof up to the date of this announcement. In the opinion of the auditors, although the Group has made a provision for bad and doubtful debts of HK$110 million during the year against the long term receivable as at 31 December 2002, the Group is unlikely to recover the remaining amount of HK$183 million in full and a further provision should have been made against this receivable in the financial statements. However, due to the absence of sufficient information, it is impracticable to quantify the amount of the sufficient provision to be made and the amount of this provision which should have been charged to the profit and loss accounts of the current and prior years. If sufficient provision had been made, the Group's profit before tax for the year ended 31 December 2002 and the Company's and Group's net assets at 31 December 2002 would have been reduced by the amount thereof. The auditors' reports dated 20 April 2001 and 17 April 2002, on the financial statements of the Group for the years ended 31 December 2000 and 2001, were also qualified in respect of the long term receivable which amounted to HK$286 million as at 31 December 2000 and 2001. Accordingly, some or all of the provision referred to the above may relate to prior years. Except for the absence of a provision against the net long term receivable balance of HK$183 million referred to the above, in the opinion of the auditors, the financial statements give a true and fair view of the state of affairs of the Company and the Group as at 31 December 2002 and of the profit and cash flows of the Group for the year then ended and have been properly prepared in accordance with the Hong Kong Companies Ordinance. 5. DISCLOSURE UNDER PRACTICE NOTE 19 At 31 December 2002, the Group had amounts receivable from Century City International Holdings Limited ("CCIH") and its subsidiaries (collectively the "CC Group") in the aggregate amount of HK$292,767,388 (2001: HK$292,767,388), representing approximately 45% (2001: 46%) of the Group's net assets at the balance sheet date. The aggregate balance comprises receivables arising from securities and options trading, a claim under an indemnity in relation to the acquisition of the interests in jointly-controlled entities and accrued interest income. These receivables are secured by marketable securities, guaranteed by CCIH and are due for repayment. As the directors consider that the receivable of HK$293 million is unlikely to be recovered within the next 12 months, the amount has been classified as a long term receivable and a provision of HK$110,000,000 has been made against this receivable in the current year. The amounts receivable from the CC Group bear interest ranging from prime rate plus 3.05% to 4% (2001: prime rate plus 3.05% to 4%) per annum but no interest has been accrued due to the uncertainty of the recoverability of the receivable.