Hung Hing Printing Group Limited — Earnings Release 2002

Jun 30, 2003

Listed Company Information

ECYBERCHINA<00254> - Results Announcement (Summary) eCyberchina Holdings Limited announced on 27/06/2003: (stock code: 00254 ) Year end date: 30/06/2002 Currency: HKD Auditors' Report: Qualified (Audited ) (Audited ) Last Current Corresponding Period Period from 01/07/2001 from 01/07/2000 to 30/06/2002 to 30/06/2001 Note ('000 ) ('000 ) Turnover : 6,889 8,213 Profit/(Loss) from Operations : (70,510) (53,829) Finance cost : (8,810) (11,087) Share of Profit/(Loss) of Associates : (1,106) (146) Share of Profit/(Loss) of Jointly Controlled Entities : N/A N/A Profit/(Loss) after Tax & MI : (450,201) (81,358) % Change over Last Period : N/A % EPS/(LPS)-Basic (in dollars) : (0.21) (0.07) -Diluted (in dollars) : N/A N/A Extraordinary (ETD) Gain/(Loss) : N/A N/A Profit/(Loss) after ETD Items : (450,201) (81,358) 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) General The difference between the unaudited results of the Group announced on 20th November, 2002 and the audited results of the Group as disclosed herein was mainly attributable to the additional impairment losses recognized in respect of the interests in associates and other investment, and the goodwill arising on acquisition of associates and subsidiaries. (2) Loss from operations 2002 2001 HK$'000 HK$'000 Loss from operation has been arrived at after charging: Depreciation and amortisation on: - Assets owned by the Group 149 148 - Assets held under finance leases 581 402 === === (3) Taxation No provision for Hong Kong Profits Tax has been made in the financial statements as the companies comprising the Group did not have any assessable profit for the year. (4) Loss per share The calculation of the basic loss per share is based on the loss for the year of approximately HK$450,201,000 (2001: HK$81,358,000) and on the weighted average of 2,115,247,945 (2001: 1,226,458,904) shares in issue throughout the year. No diluted loss per share has been presented because the exercise of the Company's outstanding share options would have an anti-dilutive effect on loss per share for the year ended 30th June, 2002. There were no diluting events existed for the year ended 30th June, 2001. (5) Dividends The Directors do not recommend any dividend for the year ended 30th June, 2002 (2001: Nil). (6) EXTRACT OF OPINION FROM AUDITORS 1. Scope limitation - fundamental uncertainty - going concern basis of the Group The auditors have considered the adequacy of the disclosures made in notes to the financial statements concerning the basis of the preparation by the directors. As explained in notes to the financial statements, the Group incurred a net loss attributable to shareholders of HK$450,201,000 for the year ended 30th June, 2002. At the balance sheet date, the Group had consolidated net current liabilities of HK$4,590,000 including short-term borrowings of HK$91,973,000. The Group's financial statements have been prepared on a going concern basis, the validity of which is dependent upon the successful outcome of the measures currently being undertaken by the Directors to ensure that adequate cash resources are available to the Group to enable it to meet its future working capital and financial requirements. The financial statements do not include any adjustments that would result from the failure of such measures. The auditors consider that appropriate disclosures have been made in the financial statements but the inherent uncertainties surrounding the circumstances under which the Group might successfully continue to adopt the going concern basis are so extreme that the auditors have disclaimed their opinion. 2. Scope limitation - the People's Republic of China ("PRC") subsidiaries not audited by the auditors The Company has equity interests in two PRC subsidiaries as stated in notes to the financial statements. The unaudited financial information of the PRC subsidiaries was included in the financial statements of the Group. Due to the fact that certain books and records of these subsidiaries were either not properly updated or could not be located as explained in notes to the financial statements and audited financial statements of these subsidiaries prepared under Hong Kong generally accepted accounting principles are not available, the auditors have not been able to satisfy themselves that the results and state of affairs of the PRC subsidiaries are properly stated in the financial statements of the Group for the year ended 30th June, 2002. 3. Scope limitation - completeness of books and records (a) As more fully explained in notes to the financial statements, due to the significant staff and management turnover within the Group during the year and subsequent to the balance sheet date, certain underlying books and records of the Group were either not properly updated or could not be located. Accordingly, the auditors have not been provided with adequate evidence to satisfy themselves as to the completeness and accuracy of the following amounts included in the financial statements recorded by (i) the Group and (ii) the Company and as to the reliability of the related disclosures in the financial statements. (i) The Group Included in consolidated income statement - Turnover of HK$6,889,000 * - Direct costs of HK$1,254,000 * - Other revenue of HK$2,962,000 * - Finance costs of HK$8,810,000 * - Share of results of associates of HK$1,106,000 - Taxation with nil amount * - Minority interest of HK$783,000 * - Loss attributable to shareholders (excluding revaluation deficit, impairment loss and amortisation on goodwill aggregating HK$412,359,000) of HK$37,842,000 Included in consolidated balance sheet - Fixed assets of HK$2,963,000 * - Inventories of HK$4,527,000 * - Trade and other receivables of HK$9,083,000 * - Trade payable, other payables, tax payable and accruals of HK$44,116,000 * - Minority interest of HK$886,000 * * including figures of the PRC subsidiaries (ii) The Company - Loss for the current year (excluding impairment loss on interests in subsidiaries of HK$549,055,000) of HK$16,341,000 (b) As explained in notes to the financial statements, the books and records of the Group were either not properly updated or could not be located subsequent to the balance sheet date. Accordingly, the auditors have not been able to carry out the necessary audit procedures to complete their review of subsequent events from the balance sheet date up to the date of this report. Such procedures might have resulted in the identification of adjustments to the amounts reported in and/or disclosed as notes to the financial statements. 4. Scope limitation and disagreement over accounting treatment and disclosure - interests in three associates Included in the consolidated income statement for the year ended 30th June, 2002 are provisions aggregating HK$12,344,000 made against the Group's interests in three associates which were acquired by the Group during the years ended 30th June, 2001 and 2002. As explained in notes to the financial statements, due to the unavailability of the audited financial information, the auditors have not been able to satisfy themselves that the equity method has been properly adopted and disclosure has been made in respect of the Group's interests therein in accordance with the provisions and disclosure requirements as set out in Statement of Standard Accounting Practice ("SSAP") 10 "Accounting for investments in associates" issued by the Hong Kong Society of Accountants ("HKSA"). Furthermore, as further explained in notes to the financial statements, the Group has made full provisions aggregating HK$12,344,000 against the Group's interests in these associates. The auditors have been unable to obtain from the Directors sufficient information to form an opinion on whether any further commitment made by the Group and the provisions made are appropriate. Any adjustments to the provisions recorded would have a consequential impact on the Group's net assets as at 30th June, 2002 and the net loss attributable to shareholders for the year then ended. 5. Scope limitation - properties under development held for sale Included in the consolidated balance sheet as at 30th June, 2002 are properties under development held for sale with carrying value of HK$83,900,000 (net) in respect of which provision of HK$10,000 has been made in the current year. The auditors have been unable to obtain direct confirmation from the developer in the PRC to satisfy themselves as to the Group's ownership on properties under development held for sale and as to the appropriateness or adequacy of the provision made. 6. Scope limitation - fixed assets located in the PRC Included in the consolidated balance sheet as at 30th June, 2002 are certain fixed assets of the two PRC subsidiaries, in the amount of HK$1,871,000 (net) which are located in the PRC. The auditors have been unable to obtain sufficient information, or to carry out alternative audit procedures to satisfy themselves as to the ownership, existence and accuracy of fixed assets located in the PRC and as to the appropriateness or adequacy of the provision or impairment loss made. 7. Scope limitation - inventories The auditors were appointed on 3rd June, 2003 which was subsequent to the end of the Group's financial year. As a result, they were unable to carry out audit procedures necessary to obtain adequate assurance regarding the quantities and condition of inventories included in the consolidated balance sheet at HK$4,527,000. The auditors have been unable to obtain sufficient information to assess whether any provision is required in respect of any inventories for which net realisable value is below cost and the existence of inventories. Any adjustments to the figure may have a consequential impact on the Group's net assets as at 30th June, 2002 and the net loss attributable to shareholders for the year then ended. 8. Scope limitation - trade and other receivables As explained in notes to the financial statements, included in the consolidated balance sheet as at 30th June, 2002 are trade and other receivables at approximately HK$9,083,000. The auditors have been unable either to obtain sufficient financial information, or to carry out alternative audit procedures to satisfy themselves as to the existence, completeness and accuracy of this amount. Accordingly, the auditors were unable to determine whether a provision, if any, is required against the trade and other receivables. 9. Scope limitation - uncertainty about the extent of disclosures As explained in notes to the financial statements, because certain books and records were either not properly updated, or could not be located, the auditors are uncertain as to the accuracy and completeness of disclosures required by Hong Kong Companies Ordinance, SSAPs and the Listing Rules. In forming the auditors' opinion, the auditors also evaluated the overall adequacy of the presentation of information in the financial statements. The auditors believe that their audit provides a reasonable basis for their opinion. Disclaimer of opinion Because of the significance of the possible effects in view of the extent of the uncertainty relating to the going concern basis and of the limitations in evidence available to us referred to in the basis of opinion section of this report, 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 the Group as at 30th June, 2002 or of the loss and cash flows of the Group for the year then ended and as to whether the financial statements have been properly prepared in accordance with the disclosure requirements of the Hong Kong Companies Ordinance. In respect alone of the limitations on their work as set out in the basis of opinion section of this report: " the auditors have not obtained all the information and explanations that the auditors considered necessary for the purpose of their audit; and " the auditors were unable to determine whether proper books of account have been kept. For more details, please refer to the press announcement today.