Walnut Capital Limited — Earnings Release 2002

Sep 23, 2002

(Incorporated in the Cayman Islands with limited liability)

ANNOUNCEMENT OF 2002 INTERIM RESULTS

INTERIM RESULTS

The Board of Directors (the “Directors”) of Haywood Investments Limited (the “Company”) announce the unaudited condensed consolidated results of the Company and its subsidiaries (the “Group”) for the six months ended 30th June, 2002 as follows:-

		Six months ended
		30.6.2002		30.6.2001
		HK$’000		HK$’000
	Notes	(unaudited)		(unaudited)
Turnover	1	623		212
Loss on disposal of
listed investments		(33	)	-
Administrative expenses		(3,606	)	(1,384	)
Provision for bad and
doubtful debt		-		(1,015	)
Impairment loss recognised
in respect of investments
in securities		-		(6,750	)
Loss before taxation	2	(3,016	)	(8,937	)
Taxation	3	-		-
Loss for the period		(3,016	)	(8,937	)
Dividend		-		-
Loss per share	4	HK(2.69) cents		HK(8.94) cents

Notes :

1. TURNOVER

	Six months ended
	30.6.2002		30.6.2001
	HK$’000		HK$’000
An analysis of the Group’s
turnover is as follows:
Dividend income	52		70
Interest income	571		142
	623		212

All of the Group’s turnover and operating results are attributable to investment activities which are carried out or originated principally in Hong Kong.

2. LOSS BEFORE TAXATION

	Six months ended
	30.6.2002		30.6.2001
	HK$’000		HK$’000
Loss before taxation has been
arrived at after charging:
Depreciation	211		75
Investment management
fee	342		492

3. TAXATION

No provision for Hong Kong Profits Tax has been made in the financial statements since the Group had no assessable profit for both periods.

4. LOSS PER SHARE

The calculation of the loss per share is based on the loss for six months ended 30th June, 2002 of approximately HK$3,016,000 (six months ended 30th June, 2001:loss of approximately HK$8,937,000) and on the weighted average number of 111,933,702 shares (six months ended 30th June, 2001: 100,000,000 shares) in issue during the period.

INTERIM DIVIDEND

The Directors resolved not to pay an interim dividend for the six months ended 30th June, 2002 (six months ended 30th June, 2001: nil).

BUSINESS REVIEW AND PROSPECTS

The Group reported a loss of approximately HK$3,016,000 for the six months ended 30th June, 2002 as compared with a loss of approximately HK$8,937,000 for the same period in 2001.

In March 2002, the Company successfully raised net proceeds of approximately HK$6,600,000 through a shares placing and subscription arrangement in respect of the issue of 20,000,000 Company’s new shares at a price of HK$0.35 per share. The Company’s capital base has been significantly strengthened as a result and the proceeds raised are for making investments and working capital purposes.

During the period under review, the Company continued its investments in the three convertible loan notes from which substantial amount of the Company’s turnover was derived. The additional capital raised in March 2002 has been invested in listed securities in Hong Kong temporarily pending longer term investment opportunities.

The Directors of the Company consider that the current investment environment in Hong Kong continues to be uncertain and unfavourable in the foreseeable future in view of the present economic situation. On the other hand, the significant economic growth in China Mainland will strengthen the value of the Company’s Mainland related investments and provide further investment opportunity.

INVESTMENT MANAGER

Pursuant to an agreement dated 6th July, 1998, the Company has appointed Haywood Investment Management Limited (“HIML”) as its manager to provide investment management and administration services for the Company. According to the agreement, HIML is entitled to an agreed investment management fee payable on a monthly basis. During the six months ended 30th June, 2002, the Company paid a management fee amounting to approximately HK$342,000 (six months ended 30th June, 2001 HK$492,000) to HIML.

PURCHASE, SALE OR REDEMPTION OF THE COMPANY’S LISTED SHARES

During the period, neither the Company nor any of its subsidiaries purchased, sold or redeemed any of the Company’s listed shares.

PUBLICATION OF FINANCIAL INFORMATION

The Company’s 2002 interim report containing all the information required by paragraphs 46(1) to 46(6) of Appendix 16 to the Rules Governing the Listing of Securities on The Stock Exchange of Hong Kong Limited (the “Stock Exchange”) will be published on the website of the Stock Exchange in due course.

By Order of the Board

Peter Lee Yip Wah

Secretary

Hong Kong, 23rd September, 2002

Please also refer to the published version of this announcement in The Standard dated 24 September 2002.