WH Group Limited — Earnings Release 2001

Jul 23, 2001

SING PAO MEDIA GROUP LIMITED

(to be renamed as PREMIUM LAND LIMITED)

(Incorporated in Bermuda with limited liability)

ANNOUNCEMENT OF RESULTS

FOR THE YEAR ENDED 31ST MARCH, 2001

RESULTS

The board of directors (the "Directors") of Sing Pao Media Group Limited (to be renamed as Premium Land Limited) (the "Company") announces the audited consolidated results of the Company and its subsidiaries (the "Group") for the year ended 31st March, 2001 together with comparative figures for the previous year as follows:

For the year ended

31st March,

2001 2000

Notes HK$'000 HK$'000

Turnover 1 514,658 693,899

Cost of sales (338,668 ) (566,173 )

175,990 127,726

Other revenue 12,588 14,103

Administrative expenses (78,587 ) (51,875 )

Other operating expenses (6,792 ) -

Profit from operations 103,199 89,954

Finance costs (85,469 ) (103,101 )

Loss on disposal of subsidiaries (864,078 ) (2,075 )

Unrealised holding loss on other investment

reclassified after disposal of a former associate (42,166 ) -

Write-off of goodwill (46,855 ) -

Loss on deemed disposal of interest in an associate (1,797 ) -

Share of results of associates (35,215 ) 86,503

(Loss) profit before taxation (972,381 ) 71,281

Taxation 2 (4,096 ) (22,476 )

(Loss) profit before minority interests (976,477 ) 48,805

Minority interests (48,820 ) (30,272 )

(Loss) profit for the year (1,025,297 ) 18,533

(Loss) earnings per share 3

• Basic (HK$) (3.276 ) 0.059

• Diluted (HK$) (3.281 ) 0.046

Notes:

1. Turnover and segmental information

Contribution

Turnover from operations

2001 2000 2001 2000

HK$'000 HK$'000 HK$'000 HK$'000

Property development and investment 412,513 527,820 140,755 (5,946 )

Property rental 72,487 92,913 67,587 87,420

Publishing of newspaper and magazines

and advertising income 24,560 - (12,890 ) -

Securities trading and investments 5,098 73,166 (6,889 ) 46,252

Software development - - (12,573 ) -

514,658 693,899 175,990 127,726

Other revenue 12,588 14,103

Administrative expenses (78,587 ) (51,875 )

Other operating expenses (6,792 ) -

Profit from operations 103,199 89,954

No segmental information by geographical location is presented as over 90% of the Group's turnover and contribution to operating results for the year were derived from Hong Kong.

2. Taxation

2001 2000

HK$'000 HK$'000

The charge comprises:

Hong Kong Profits Tax

Current year - 280

Underprovision in prior years - 761

- 1,041

Overseas taxation

Current year 30 54

Underprovision in prior years 347 -

377 54

Share of taxation attributable to associates 3,719 21,381

Taxation charge for the year 4,096 22,476

Hong Kong Profits Tax is calculated at the rate of 16% on the estimated assessable profit for the year derived from Hong Kong.

Overseas taxation is calculated at the rates prevailing in the respective jurisdictions.

3. (Loss) earnings per share

The calculation of the basic and diluted (loss) earnings per share for the year is based on the following data:

2001 2000

HK$'000 HK$'000

(Loss) earnings for the purposes of basic

(loss) earnings per share (1,025,297 ) 18,533

Effect of dilutive potential ordinary shares:

• adjustment to the share of results of a former subsidiary

based on dilution of its earnings per share (1,230 ) (3,604 )

• adjustment to the share of results of a former associate

based on dilution of its (loss) earnings per share (158 ) (618 )

(Loss) earnings for the purposes of diluted

(loss) earnings per share (1,026,685 ) 14,311

2001 2000

Number of Number of

shares shares

Weighted average number of ordinary shares

for the purposes of basic (loss) earnings per share 312,947,194 312,947,194

Effect of dilutive potential ordinary shares

in respect of share options - 397,812

Weighted average number of ordinary shares

for the purposes of diluted (loss) earnings per share 312,947,194 313,345,006

The weighted average number of ordinary shares for the purpose of basic and diluted (loss) earnings per share for 2001 and 2000 has been adjusted for the effect of share consolidation approved on 2nd April, 2001.

For the year ended 31st March, 2001, the computation of diluted loss per share did not assume the conversion of the Company's convertible redeemable notes and share options which were surrendered in February 2001 as the Group incurred a loss for the year.

For the year ended 31st March, 2000, the computation of diluted earnings per share did not assume the conversion of the Group's convertible guaranteed bonds which were fully redeemed in February 2000 and the Company's outstanding convertible redeemable notes since their exercise would result in an increase in earnings per share from continuing ordinary operations. Also, the computation of diluted earnings per share did not assume the conversion of the Company's share options which lapsed in October 1999 as the exercise price was higher than the average fair value per share.

FINAL DIVIDEND

The Directors do not recommend the payment of a final dividend for the year ended 31st March, 2001 (2000: nil).

BUSINESS REVIEW

Results

The Group recorded a total turnover of approximately HK$514.7 million in the financial year ended 31st March, 2001 with a decrease of approximately 26% as compared to that of the last year of approximately HK$693.9 million. The decrease was mainly attributable to decrease in revenue generated from (i) property development and investment amounting to approximately HK$115 million; (ii) rental income from investment properties amounting to approximately HK$20 million; and (iii) securities trading and investments amounting to approximately HK$68 million.

The Group's loss attributable to shareholders for the year ended 31st March, 2001 was approximately HK$1,025 million. The significant loss was mainly resulted from as to approximately HK$864 million arising from the loss on the disposal of subsidiaries including the disposal of an approximately 63.68% interest in the issued capital of Asean Resources Holdings Limited ("Asean Resources") and as to approximately HK$37 million in connection with the media business, with the balance from the other operations.

Liquidity and financial information

During the year, the Company disposed of its equity interest in Asean Resources and the sale proceeds of approximately HK$573 million was applied to repay the Company's certain outstanding borrowings of approximately HK$389 million and the acquisition of the media interests of HK$110 million. The balance of approximately HK$74 million was used as general working capital of the Group.

The total of the Group's bank and other borrowings as at 31st March, 2001 amounted to approximately HK$108 million compared with approximately HK$1,342 million as at 31st March, 2000. Cash and bank balances and short-term listed investments amounted to approximately HK$75 million as at 31st March, 2001 compared with approximately HK$263 million as at 31st March, 2000. Net borrowings amounted to approximately HK$33 million as at 31st March, 2001 compared with approximately HK$1,079 million as at 31st March, 2000.

Gearing ratio of the Group which is expressed as a percentage of total borrowings to the shareholders' fund was approximately 51% as at 31st March, 2001 compared with approximately 55% as at 31st March, 2000. Net gearing ratio of the Group which is expressed as a percentage of net borrowings to the shareholders' funds was approximately 16% as at 31st March, 2001 compared with approximately 44% as at 31st March, 2000.

Of the Group's bank and other borrowings as at 31st March, 2001, approximately HK$101 million would be due within one year and approximately HK$7 million would be due beyond one year, but not exceeding two years.

The annual revaluation of the Group's investment properties was carried out by RHL Appraisal Limited, an independent property valuer. The total value as at 31st March, 2001 amounted to approximately HK$85 million compared with approximately HK$2,039 million as at 31st March, 2000. The decrease was mainly due to the disposal of the Company's equity interest in Asean Resources.

Shareholders' fund of the Group as at 31st March, 2001 was approximately HK$211 million compared with approximately HK$2,447 million as at 31st March, 2000.

Review of operations

In January 2001, the Company disposed of its equity interest in Asean Resources at a price of HK$0.70 per share, details of which have been set out in the Company's circular dated 2nd January, 2001. At the same time, China Strategic Holdings Limited ("China Strategic") and Star East Holdings Limited ("Star East") became the controlling shareholders of the Company while the Company acquired the following media business ("media business") :

• "Sing Pao" name and production facilities

A publication right of a Chinese newspaper in Hong Kong with over 62 years' history under the name of "Sing Pao Daily News" and "成報", together with a data library and related printing machinery and equipment.

• Magazine and Internet business

"Wide Angle" magazine, which is a public affairs magazine focused mainly on political and military news since 1972, and a 60% equity interest in a joint venture operating an Internet portal which provides news and information mainly related to China.

In July 2001, a subsidiary of Capital Strategic Investment Limited ("Capital Strategic") purchased approximately 60% of the entire issued share capital of the Company from China Strategic and Star East where the Group at the same time sold its media business back to China Strategic and Star East, details of which were set out in the circular to the Company's shareholders dated 18th June, 2001. The gross proceeds of HK$110 million from the disposal of the media interests are being used as the general working capital for the Group.

Employees and remuneration policy

The Group has 481 employees as at 31st March, 2001. Employees' remuneration packages are reviewed and determined by reference to the market pay and individual performance. A new share option scheme was adopted on 9th April, 2001 which enhances staff motivation and performance, thereby encouraging them to contribute further to the success of the Group.

Charges on group assets

As at 31st March, 2001, an investment property of HK$80,000,000 was pledged to a bank to secure banking facilities granted to the Group.

Exposure to fluctuations in exchange rates and any related hedges

The businesses of the Group were mainly conducted in Hong Kong during the year and most transactions were settled in Hong Kong dollars. The exposure to fluctuations in exchange rates was, therefore, insignificant.

OUTLOOK

After the completion of the disposal of media business, the principal assets of the Group continue to be properties and securities. The Group will continue to be engaged in property investment and development and securities trading and investment. Capital Strategic, the controlling shareholder, believes in the positive long-term prospects of the real estate property market throughout Asia and intends to exploit opportunities in strategic land and property investment and development within this region. As the regional economies continue their recovery and market confidence continues to improve, property and land assets are expected to appreciate in both capital and rental values. In view of the recovery of economies in the Asian region, the Group will focus more on the strategic potential real estate projects.

CHANGE OF NAME

Subject to the approval of the Registrar of Companies in Bermuda, the name of the Company will be changed to Premium Land Limited to reflect the principal business of the Group.

PURCHASE, SALE OR REDEMPTION OF THE COMPANY'S LISTED SECURITIES

Neither the Company nor any of its subsidiaries purchased, redeemed or sold any of the Company's listed shares during the year.

COMPLIANCE WITH THE CODE OF BEST PRACTICE

The Company had complied throughout the year ended 31st March, 2001 with the Code of Best Practice as set out in Appendix 14 of the Rules Governing the Listing of Securities ("Listing Rules") on The Stock Exchange of Hong Kong Limited ("Stock Exchange"), except that the non-executive directors of the Company have no fixed terms of office but will retire from office on a rotation basis in accordance with the Company's bye-laws.

PUBLICATION OF INFORMATION ON STOCK EXCHANGE'S WEBSITE

A detailed results announcement containing information required by paragraphs 45(1) to 45(3) of Appendix 16 of the Listing Rules will be published on the website of the Stock Exchange in due course.

By Order of the Board

Cheung Kwok Wah

Deputy Chairman and Managing Director

Hong Kong, 20th July, 2001

notice of annual general meeting

NOTICE IS HEREBY GIVEN that the Annual General Meeting of Sing Pao Media Group Limited (the "Company") will be held at Victoriana Room, 4th Floor, Hotel Furama Hong Kong, 1 Connaught Road Central, Hong Kong on Wednesday, 29th August, 2001 at 10:00 a.m. for the following purposes:

1. To receive and consider the audited financial statements and the reports of the directors and the auditors for the year ended 31st March, 2001.

2. To re-elect directors and to authorise the board of directors to fix the directors' remuneration.

3. To appoint auditors and to authorise the board of directors to fix their remuneration.

As special business, to consider and, if thought fit, to pass with or without amendments the following resolutions as ordinary resolutions:

1. "THAT:

(i) subject to paragraph (iii) below, the exercise by the directors of the Company during the Relevant Period (as hereinafter defined) of all the powers of the Company to allot, issue and deal with additional shares in the capital of the Company and to make or grant offers, agreements and options (including warrants, bonds, debentures, notes and other securities which carry rights to subscribe for or are convertible into shares of the Company) which might require the exercise of such powers be and is hereby generally and unconditionally approved in substitution for and to the exclusion of any existing authority previously granted;

(ii) the approval in paragraph (i) above shall authorise the directors of the Company during the Relevant Period to make or grant offers, agreements and options (including warrants, bonds, debentures, notes and other securities which carry rights to subscribe for or are convertible into shares of the Company) which might require the exercise of such powers after the end of the Relevant Period;

(iii) the aggregate nominal amount of share capital of the Company allotted or agreed conditionally or unconditionally to be allotted (whether pursuant to an option or otherwise) and issued by the directors of the Company pursuant to the approval in paragraph (i) above, otherwise than pursuant to:

(a) a Rights Issue (as hereinafter defined);

(b) the exercise of rights of subscription or conversion under the terms of any existing warrants, bonds, debentures, notes and other securities which carry rights to subscribe for or are convertible into shares of the Company;

(c) the exercise of options granted under any option scheme or similar arrangement for the time being adopted for the grant or issue to officers and/or employees of the Company and/or any of its subsidiaries of shares or rights to acquire shares of the Company; and

(d) any scrip dividend or similar arrangement providing for the allotment of shares in lieu of the whole or part of a dividend on shares of the Company in accordance with the bye-laws of the Company,

shall not exceed 20% of the aggregate nominal amount of the issued share capital of the Company as at the date of the passing of this Resolution and the said approval shall be limited accordingly; and

(iv) for the purpose of this Resolution:

"Relevant Period" means the period from the date of the passing of this Resolution until whichever is the earliest of:

(a) the conclusion of the next annual general meeting of the Company;

(b) the expiration of the period within which the next annual general meeting of the Company is required by the bye-laws of the Company or any applicable laws of Bermuda to be held; or

(c) the revocation or variation of the authority given under this Resolution by an ordinary resolution of the shareholders of the Company in general meeting; and

"Rights Issue" means an offer of shares of the Company or issue of options, warrants or other securities giving the right to subscribe for shares of the Company open for a period fixed by the directors of the Company to holders of shares of the Company whose names appear on the register of members of the Company (and, where appropriate, to holders of other securities of the Company entitled to the offer) on a fixed record date in proportion to their then holdings of such shares or, where appropriate, such other securities (subject in all cases to such exclusions or other arrangements as the directors of the Company may deem necessary or expedient in relation to fractional entitlements or having regard to any restrictions or obligations under the laws of, or the requirements of any recognised regulatory body or any stock exchange in, any territory outside Hong Kong)."

1. "THAT:

(i) subject to paragraph (ii) below, the exercise by the directors of the Company during the Relevant Period (as hereinafter defined) of all powers of the Company to purchase its issued shares in the capital of the Company on The Stock Exchange of Hong Kong Limited (the "Stock Exchange") or on any other stock exchange on which the shares of the Company may be listed and recognised by the Securities and Futures Commission of Hong Kong and the Stock Exchange for this purpose subject to and in accordance with all applicable laws and the requirements of the Rules Governing the Listing of Securities on the Stock Exchange or of any other stock exchange as amended from time to time be and is hereby generally and unconditionally approved in substitution for and to the exclusion of any existing authority previously granted;

(ii) the aggregate nominal amount of shares of the Company which may be repurchased by the Company pursuant to the approval in paragraph (i) above shall not exceed 10% of the aggregate nominal amount of the issued share capital of the Company as at the date of the passing of this Resolution and the said approval shall be limited accordingly; and

(iii) for the purpose of this Resolution:

"Relevant Period" means the period from the date of the passing of this Resolution until whichever is the earliest of:

(a) the conclusion of the next annual general meeting of the Company;

(b) the expiration of the period within the next annual general meeting of the Company is required by the bye-laws of the Company or any applicable laws of Bermuda to be held; or

(c) the revocation or variation of the authority given under this Resolution by an ordinary resolution of the shareholders of the Company in general meeting."

1. "THAT subject to the passing of Ordinary Resolutions Nos. 4 and 5 set out in the notice convening this meeting, the general mandate granted to the directors of the Company to exercise the powers of the Company to allot shares pursuant to Ordinary Resolution No. 4 set out in the notice convening this meeting be and is hereby extended by the addition thereto of an amount representing the aggregate nominal amount of the share capital of the Company repurchased by the Company under the authority granted pursuant to Ordinary Resolution No. 5 set out in the notice convening this meeting, provided that such extended amount shall not exceed 10% of the aggregate nominal amount of the issued share capital of the Company as at the date of the passing of this Resolution."

By Order of the Board

Ma Wai Man, Catherine

Company Secretary

Hong Kong, 20th July, 2001

Principal Place of Business in Hong Kong:

7th Floor, Sing Pao Building

101 King's Road

North Point

Hong Kong

Notes:

1. Every member entitled to attend and vote at the above meeting is entitled to appoint one or more proxies to attend and vote on his behalf. A proxy need not be a member of the Company.

2. In order for such appointment to be valid, the proxy form together with the power of attorney or other authority (if any) under which it is signed, or a notarially certified copy of such power or authority, must be deposited at the Company's branch registrars in Hong Kong, Secretaries Limited, at 5th Floor, Wing On Centre, 111 Connaught Road Central, Hong Kong not less than 48 hours before the time appointed for holding the above meeting or any adjournment thereof.

Please also refer to the published version of this announcement in the Hong Kong iMail.