Listed Company Information
 

401 HOLDINGS<00401> - Results Announcement

401 Holdings Limited announced on 15/02/2005:
(stock code: 00401 )
Year end date: 31/03/2005
Currency: HKD
Auditors' Report: N/A
Interim report reviewed by: Auditors

                                                        (Unaudited )
                                     (Unaudited )       Last
                                     Current            Corresponding
                                     Period             Period
                                     from 01/04/2004    from 01/04/2003
                                     to 30/09/2004      to 30/09/2003
                               Note  ('000      )       ('000      )
Turnover                           : 38,946             1,863             
Profit/(Loss) from Operations      : 3,120              (5,744)           
Finance cost                       : (2,131)            (1,741)           
Share of Profit/(Loss) of 
  Associates                       : N/A                (32)              
Share of Profit/(Loss) of
  Jointly Controlled Entities      : N/A                N/A               
Profit/(Loss) after Tax & MI       : 759                (7,517)           
% Change over Last Period          : N/A       %
EPS/(LPS)-Basic (in dollars)       : 0.0017             (0.0196)          
         -Diluted (in dollars)     : N/A                N/A               
Extraordinary (ETD) Gain/(Loss)    : N/A                N/A               
Profit/(Loss) after ETD Items      : 759                (7,517)           
Interim Dividend                   : NIL                NIL
  per Share                                              
(Specify if with other             : N/A                N/A
  options)                                               
                                                         
B/C Dates for 
  Interim 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       BASIS OF PREPARATION 

The Provisional Liquidators were appointed on 3 August 2004 and do not 
have the same detailed knowledge of the financial affairs of the Company 
and the Group, as would have the directors of the Company ("Directors"). 
The accounting staff responsible for maintaining the books and records of 
the Company and preparing its accounts left the Company prior to the 
appointment of the Provisional Liquidators. The Provisional Liquidators 
have made enquiries of the Directors and have reviewed the available books 
and records of the Group. 

The Provisional Liquidators found that the Group's accounting records and 
supporting vouchers for the period up to 3 August 2004, the date when the 
Provisional Liquidators of the Company were appointed were incomplete. 
Accordingly, the accounts of the Company and the Group for the six months 
ended 30 September 2004 have been prepared on the following bases:

(A)     The accounts have been prepared on the basis of management 
accounts prepared by the Provisional Liquidators. The Provisional 
Liquidators prepared the management accounts on the basis of the 
information available to them, vouchers prepared by the Group's former 
employees, the Provisional Liquidators' enquiries, as well as the Group's 
books and records that are available to the Provisional Liquidators. 

(B)     The disclosure in respect of contingent liabilities and litigation 
has been based on the annual report of the Company for the year ended 31 
March 2003 which was published in January 2004, press announcements made 
and circulars issued by the Company prior to the appointment of the 
Provisional Liquidators, those books and records made available to them 
following their appointment and on the basis of requests made of and 
information provided by the Group's former legal advisers.

(C)     The disclosure of related party transactions is based on the 
information available to the Provisional Liquidators following their 
appointment. 

(D)     The Company is currently proposing to restructure its affairs 
through a self-restructuring proposal (the "Proposed Self-Restructuring"). 
As the Proposed Self-Restructuring remains subject to, amongst other 
things, the approval of The Stock Exchange of Hong Kong Limited (the "
Stock Exchange"), the accounts for the six months ended 30 September 2004 
were not prepared on a full going concern basis, and in particular: 

a.      Fixed assets are stated at the Provisional Liquidators' best 
estimate of their net realisable value. For presentation purposes they are 
shown as non-current assets.

b.      Current assets are stated at the Provisional Liquidators' best 
estimate of their respective net realisable values.

c.      Current liabilities are based on the records of the Company and 
the Provisional Liquidators' investigations to date. The Provisional 
Liquidators have not yet adjudicated any notices of claim from the 
creditors of the Company. This will need to be completed to establish the 
creditors of the Company with certainty. In any event, if the Proposed 
Self-Restructuring can be implemented successfully, all the debts of the 
Company will be compromised and discharged in full through the schemes of 
arrangement being proposed between the Company and its creditors.

d.      Should the listing of the Company's shares finally be cancelled 
and the Company be wound up, further adjustments may be required to reduce 
the value of properties for sale to their forced sale value.

2       THE INDEPENDENT ACCOUNTANTS' REVIEW REPORT

The interim financial report has been reviewed by the Company's 
independent accountants, Graham H. Y. Chan & Co (the "Independent 
Accountants") in accordance with Statement of Auditing Standards No. 700 
"Engagements to review interim financial reports" issued by the HKICPA, 
except that the scope of their review was limited as explained below.

A review consists principally of making enquiries of the Directors and the 
Provisional Liquidators and applying analytical procedures to the interim 
financial report and based thereon, assessing whether the accounting 
policies and presentation have been consistently applied unless otherwise 
disclosed.  A review excludes audit procedures such as tests of controls 
and verification of assets, liabilities and transactions.  It is 
substantially less in scope than an audit and therefore provides a lower 
level of assurance than an audit.  Accordingly the Independent Accountants 
do not express an audit opinion on the interim financial report.

The scope of the Independent Accountants' review was limited because as 
stated in Note 1 above, the accounts for the six months ended 30 September 
2004 have been prepared based on the management accounts prepared by the 
Provisional Liquidators on the basis of the information available to them 
which may not be complete for the period up to 3 August 2004, the date 
when the Provisional Liquidators of the Company were appointed.  In these 
circumstances, save and except for the period after the appointment of the 
Provisional Liquidators, the Independent Accountants were unable to carry 
out all the review procedures, or obtain all the information and 
explanations they considered necessary.


Fundamental uncertainty

The trading of the Company's shares has been suspended since 28 March 
2003.  On 19 May 2004, the Stock Exchange announced that the Company had 
been placed into the third stage of the de-listing procedure.  The Stock 
Exchange imposed a six-month period to 18 November 2004 for the Company to 
submit a viable resumption proposal.

On 25 October 2004, the Company submitted a resumption proposal (the "
Resumption Proposal") to the Listing Division of Stock Exchange ("Listing 
Division").  The Resumption Proposal set out a proposed self-restructuring 
proposal of the Company, under which, amongst other things, the full 
amount of the liabilities of the Company will be discharged and 
compromised through schemes of arrangement with the creditors and the 
entire interest of the Company in its dormant or insolvent subsidiaries 
will be transferred to a nominee of the scheme administrators.  However, 
the Listing Division did not consider the Resumption Proposal represented 
a viable proposal and has advised that it will apply to the Listing 
Committee of the Stock Exchange ("Listing Committee") for the cancellation 
of listing of the Company's shares.  The Company has requested a review of 
the Listing Division by the Listing Committee.  Notwithstanding this, in 
light of, inter alia, the petitioning creditor's support for the proposed 
self-restructuring, the High Court of Hong Kong Special Administrative 
Region on 10 January 2005 further adjourned the hearing of the petition to 
wind up the Company to 14 March 2005.

Should the listing of the Company's shares be cancelled, the petitioning 
creditor may proceed with the winding-up petition and the Company may be 
wound up.  In these circumstances, adjustments might have to be made 
further to reduce the value of properties for sales to their forced sales 
value.

Details of the circumstances relating to this fundamental uncertainty are 
described in note 1(D) above.

Inability to reach a review conclusion

Because of the possible significance of the effects of the limitation in 
evidence available to them prior to the appointment of the Provisional 
Liquidators on 3 August 2004, the Independent Accountants are unable to reach 
a review conclusion as to whether material modifications should be made to the 
interim financial report for the six months ended 30 September 2004.

3       SEGMENTAL INFORMATION 

        Business segments
        An analysis of the Group's turnover and results for the six months ended 
30 September 2004 by business segments is as follows:

        (Unaudited)                     (Unaudited)
        Turnover                        Segment result  
        Six months ended                Six months ended
        30 September    30 September    30 September    30 September
        2004            2003            2004            2003
        HK$'000         HK$'000         HK$'000         HK$'000 

By principal activities:                                                        
                                                        
Sales and leasing of properties 
        -               888             (513)           129
Trading, logistics and freight forwarding services      
        38,853          481             1,300           (882)
Property and household services 
        -               4               (41)            (402)
Sales of goods  
        93              291             (13)            2
Consultancy, marketing and other services       
        -               199             -               36
Others  -               -               (8)             (1)
        ---------------------------------------------------------
        38,946          1,863           725             (1,118)
        =======         ======                          
Unallocated corporate expenses          (3,268)         (4,626)
Gain on disposal of subsidiaries        5,663           -     
                                        -------------------------
Profit/(loss) from operations           3,120           (5,744)
                                        ========================

4       EARNINGS/(LOSS) PER SHARE

The calculation of basic earnings/(loss) per share is based on the net profit 
attributable to shareholders for the period of HK$759,000 (for the six months 
ended 30 September 2003: loss of HK$7,517,000), and the weighted average number 
of 446,093,866 ordinary shares (for the six months ended 30 September 2003: 
383,339,768) in issue during the period.

Diluted earnings/(loss) per share for the six months ended 30 September 2003 and 
2004 has not been presented as the effect of any dilution is anti-dilutive.