Medlive Technology Co., Ltd. — Earnings Release 2002

Apr 4, 2003

Listed Company Information

GUANGDONG KELON<00921> - Results Announcement (Summary) Guangdong Kelon Electrical Holdings Company Limited announced on 3/4/2003: (stock code: 00921) Year end date: 31/12/2002 Currency: RMB 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 ('000 ) ('000 ) Turnover : 4,878,257 4,381,616 Profit/(Loss) from Operations : 182,006 (1,407,445) Finance cost : (90,637) (96,295) Share of Profit/(Loss) of Associates : (4,134) (611) Share of Profit/(Loss) of Jointly Controlled Entities : N/A N/A Profit/(Loss) after Tax & MI : 84,593 (1,491,356) % Change over Last Period : N/A % EPS/(LPS)-Basic (in dollars) : RMB0.09 (RMB1.50) -Diluted (in dollars) : N/A N/A Extraordinary (ETD) Gain/(Loss) : N/A N/A Profit/(Loss) after ETD Items : 84,593 (1,491,356) 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 Annual General Meeting : 18/4/2003 to 18/5/2003 bdi. Other Distribution for : N/A Current Period B/C Dates for Other Distribution : N/A Remarks: 1. REVISED FINANCIAL STATEMENTS These financial statements are revised financial statements which supersede the original financial statements issued by the Company dated 28 March 2003 and which were the subject of the Company's results announcement dated 31 March 2003. In the original financial statements, a repayment of bank loans of Guangdong Kelon Refrigerator Co., Ltd (formerly known as Guangdong Sanyo Electric Kelon Refrigerator Co., Ltd.) ("Sanyo Kelon") in the sum of RMB154 million by Japan Sanyo Electrical Corporation ("Japan Sanyo"), the Company's former joint venture partner, was recognised in the income statement as compensation income. The directors now consider that this payment was not in substance in the nature of compensation and should have been taken into consideration in the determination of the amount of negative goodwill arising on the acquisition of the remaining 56% interest in Sanyo Kelon by the Group as disclosed in note 18. Accordingly, in preparing the revised financial statements compensation income of RMB154 million has been derecognised, impairment loss in respect of goodwill of approximately RMB77 million has been reversed, capital reserve of approximately RMB11.6 million has been derecognised and negative goodwill of approximately RMB88.6 million has been recognised. Of negative goodwill recognised of approximately RMB88.6 million, approximately RMB2.4 million has been released to income statement in the current year. Also, in the original financial statements, there was a reversal in the income statement of an allowance for slow moving inventories of approximately RMB25 million which had been made in year 2001. The directors now consider that such allowance should not have been reversed and have re-instated it accordingly. The combined effect of these adjustments is to reduce the net assets of the Group by approximately RMB111.2 million as at 31 December 2002 and the net profit of the Group for the year then ended by approximately RMB99.6 million. 2. BASIC EARNINGS (LOSS) PER SHARE The calculation of basic earnings (loss) per share for the year is based on the net profit for the year of RMB84,593,000 (2001: net loss for the year of RMB1,491,356,000) and on 992,006,563 shares (2001: 992,006,563 shares) outstanding during the year. No diluted earnings (loss) per share have been presented as these were no dilutive potential ordinary shares in issue in either 2002 and 2001. 3. PRIOR PERIOD ADJUSTMENTS The effect of correction of accounting errors accounted for as prior period adjustments is as follows: 2002 2001 RMB'000 RMB'000 Error in recognising accrual for advertising expenses (note a) 79,681 - Excess loss of minority shareholders of subsidiaries taken up by the Group (note b) - (158,116) ------------------------- 79,681 (158,116) ========================= Notes: (a) Included in the other payables as at 31 December 2001 was an accrual for advertising fees amounting to approximately RMB80 million. However, no advertising services have been received by the Group in connection with this accrual. Accordingly, the present directors have concluded that there was no proper basis for recognising this accrual in 2001 and have made a prior period adjustment in respect of this amount. (b) As of 31 December 2000, accumulated losses attributable to the minority interest of one of the Group's subsidiaries exceeded the minority interest in the equity of that subsidiary ("excess loss") by approximately RMB158,116,000. The excess loss was charged to the minority interest in the consolidated financial statements for the year ended 31 December 2000 with the belief that the minority interest would agree to absorb the excess loss through additional funding. During year 2001, management considered that it was not probable that the minority shareholder would provide additional financial contribution to absorb the excess loss. Accordingly, the excess loss of RMB158,116,000 was considered as a correction of accounting error and was charged to the consolidated income statement for the year ended 31 December 2000.