08:34 GUANGNAN (HOLD)<01203> - Results Announcement (2) 2. Non-operating income Note 2004 2003 HK$'000 HK$'000 Write-back of liabilities (i) 76,223 33,185 Net gain on disposal of an associate 83 - Recovery of bad debts (ii) - 24,239 Net gain on disposal of a subsidiary - 9,097 --------- --------- 76,306 66,521 ========= ========= Notes: (i) The amounts mainly represent the write-back of liabilities which have been outstanding for a long time with no demand for settlements. The directors are of the opinion that it is not likely that the creditors will lodge claims against the Group. (ii) During the year ended 31 December 2003, certain bad debts were recovered and the related provisions were written back to the profit and loss account accordingly. 3. Non-operating expenses 2004 2003 HK$'000 HK$'000 Provisions for impairment losses on fixed assets - 30,862 ======== ======== In view of the poor trading conditions experienced by certain subsidiaries during the year ended 31 December 2003, the directors reviewed the carrying value of the relevant subsidiaries' fixed assets and concluded that it was appropriate to recognise impairment losses of $30,862,000 against certain fixed assets as at 31 December 2003. 4. Net loss on disposal of discontinued operations In December 2004, the Group's feed production and livestock farming operations were discontinued following the disposal of two subsidiaries in the People's Republic of China. The net loss on disposal of the discontinued operations amounted to HK$11,793,000. 5. Earnings per share (a) Basic earnings per share The calculation of basic earnings per share is based on the profit attributable to shareholders of HK$132,248,000 (2003: HK$102,762,000) and the weighted average of 9,015,833,000 (2003: 9,003,262,000) ordinary shares in issue during the year. (b) Diluted earnings per share The diluted earnings per share for the year ended 31 December 2004 is not presented as there is no dilutive potential ordinary shares at the year end. The calculation of diluted earnings per share for the year ended 31 December 2003 is based on the adjusted profit attributable to ordinary shareholders of HK$106,205,000 and the weighted average number of 9,496, 412,000 ordinary shares after adjusting for the effects of all dilutive potential ordinary shares for the year ended 31 December 2003. (c) Reconciliation 2004 2003 Number Number of shares of shares (thousand) (thousand) Weighted average number of ordinary shares used in calculating basic earnings per share 9,015,833 9,003,262 Deemed issue of ordinary shares for no consideration - 493,150 ----------- ---------- Weighted average number of ordinary shares used in calculating diluted earnings per share 9,015,833 9,496,412 =========== ========== 2004 2003 HK$'000 HK$'000 Profit attributable to shareholders 132,248 102,762 Interest saving at following conversion of the convertible notes - 3,443 --------- --------- Adjusted profit attributable to shareholders used in calculating diluted earnings per share 132,248 106,205 ========= ========= 6. Summary of the Auditors Report KPMG have confirmed that an unqualified audit opinion will be given in respect of the Group's accounts for the year ended 31 December 2004. For more details, please refer to the press announcement today.