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.
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