13:22 HUALING<00382> - Results Announcement (2) 5. An analysis of the Group's results by business segment for the year ended 31 December 2004 was as follows: Contribution to operating Turnover loss HK$'000 HK$'000 Refrigerator business 309,460 (207,561) Air-conditioner business 1,158,219 (327,629) Mini-refrigerator business 423,804 16,003 Gain on disposal of taxi licences 9,524 ----------- ----------- 1,891,483 (509,663) ========== Unallocated costs (75,370) ---------- (585,033) ========== 6. Extracts of auditors' report We conducted our audit in accordance with Statements of Auditing Standards issued by the Hong Kong Institute of Certified Public Accountants except that the scope of our work was limited as explained below. An audit includes examination, on a test basis, of evidence relevant to the amounts and disclosures in the accounts. It also includes an assessment of the significant estimates and judgements made by the directors in the preparation of the accounts, and of whether the accounting policies are appropriate to the circumstances of the Company and the Group, consistently applied and adequately disclosed. We planned our audit so as to obtain all the information and explanations which we considered necessary in order to provide us with sufficient evidence to give reasonable assurance as to whether the accounts are free from material misstatement. However, in the absence of sufficient documentary evidence, we were unable to ascertain whether the assumptions made by the directors in preparing the accounts on a going concern basis, as set out in Note 1 to the accounts, are fair and reasonable. Accordingly, we were unable to satisfy ourselves that the going concern basis is proper and appropriate. There were no other satisfactory audit procedures that we could adopt to satisfy ourselves as to the appropriateness of the going concern basis. The accounts do not include any adjustments that would result from the failure of the Company and the Group to continue as a going concern. Had the going concern basis not been used, adjustments would have to be made in the accounts to reduce the value of the assets to their recoverable amounts, to provide for any further liabilities which might arise and to reclassify non-current assets and liabilities as current assets and liabilities, respectively. Such adjustments may have a consequential significant effect on the Group's loss for the year and the net deficit of the Company and the Group as at 31st December 2004. In forming our opinion we also evaluated the overall adequacy of the presentation of information in the accounts. We believe that our audit provides a reasonable basis for our opinion. Qualified Opinion: Disclaimer on view given by the accounts Because of the significance of the possible effects of the limitation in the evidence available to us as mentioned in the above paragraphs, we are unable to form an opinion as to whether the accounts give a true and fair view of the state of affairs of the Company and of the Group as at 31st December 2004 and of the Group's loss and cash flows for the year then ended and have been properly prepared in accordance with the Hong Kong Companies Ordinance. In respect alone of the limitation on our work referred to above, we have not obtained all the information and explanations that we considered necessary for the purpose of our audit.