08:35 CHINA UNITED<00273> - Results Announcement (2) 3. TURNOVER 2004 2003 HK$'000 HK$'000 Proceeds from sale of trading securities 81,765 80,091 Interest income 10,661 43,800 Brokerage fees and commission income - 9,102 Dividend income from listed securities - 88 Rental income 318 5,856 ----------------------- 92,744 138,937 ======================= 4. SUMMARY OF AUDITORS' REPORT The auditors of the Company (the "Auditors") planned their audit so as to obtain all the information and explanations which they considered necessary in order to provide them with sufficient evidence to give reasonable assurance as to whether the financial statements are free from material misstatement. However, the evidence available to them was limited to the extent that: (1) The auditors had not been able to form a view in the previous year on the recoverability of loans receivable of HK$15,362,000 as at 31 December 2003 and had qualified our audit report accordingly. Details of their qualification were more fully explained in the 2003 annual report. The amount concerned has been fully provided for during the year of 2004. Any adjustments to the loans receivable balance as at 31 December 2003 would have consequential effect on the loss of the Group for the years ended 31 December 2004. (2) As at 31 December 2003, the net assets of the Group included interest in an associate of HK$320,624,000 in respect of Hennabun Management Inc. ("HMI"). As the consolidated financial statements of HMI for the year ended 31 December 2003 were subject to audit qualifications, the auditors had been unable to form a view as to whether the Group's share of HMI's net assets at 31 December 2003 was fairly stated. The auditors had therefore qualified their auditors' report for that year. Details of their qualification were more fully explained in the 2003 annual report. Any adjustments to the Group's share of HMI's net assets at 31 December 2003 would have consequential effect on the loss of the Group for the year ended 31 December 2004. 5. INCLUDED IN LOSS FROM ORDINARY ACTIVITIES BEFORE TAXATION ARE THE FOLLOWING MATERIAL ITEMS: 2004 2003 HK$'000 HK$'000 Impairment losses of: - property, plant and equipment - (21,000) - investment properties - (20,300) - goodwill on consolidation of subsidiaries - (1,006) - interests in associates (75,036) (1,485) - other securities - (13,652) Negative goodwill released upon recognition of impairment loss in an associate 21,246 - Profit on disposal of interests in subsidiaries - 245,319 Profit on disposal of partial of interests in subsidiaries - 1,056 Loss on disposal of partial interests in subsidiaries - (1,809) (Loss) Profit on deemed disposal of interest in an associate (24,045) 2,500 Net provision for bad and doubtful debts (63,747) (213,207) Net unrealised holding loss on trading securities (1,920) (77,329) Surplus arising on revaluation of investment properties 3,350 760 Surplus arising on revaluation of leasehold land and buildings 11,033 - ------------------------- (129,119) (100,153) ========================= 6. LOSS PER SHARE The calculation of the loss per share is based on the loss for the year of HK$336,868,000 (2003: HK$33,739,000) and on the weighted average number of 1,209,700,000 shares (2003: 368,868,500 shares) in issue during the year. No diluted loss per share is presented for the years as conversion of the Company's and a subsidiary's outstanding convertible notes have an anti- dilutive effect. For more details, please refer to the press announcement today.