08:48     HON PO GROUP<00228> - Results Announcement (2)                      

                                                                              
    3.      (LOSS) / PROFIT FROM OPERATIONS                                   
                                                                              
    The Group's (loss) / profit from operations is arrived at after charging/ 
    (crediting):                                                              
                                            2004            2003              
                                            HK$'000         HK$'000           
    Gain on disposal of leasehold land and buildings                          
                                            -               (37,281)          
    Gain arising from de-consolidation of subsidiaries                        
                                            (7,452)         (42,594)          
    Rental income, gross                    (666)           (3,398)           
                                            ========        =========         
                                                                              
    Auditors' remuneration                  580             800               
    Loss on disposal of property, plant and equipment                         
                                            4,710           -                 
    Loss on disposal of other assets        779             -                 
    Cost of inventories consumed            79,337          164,740           
    Depreciation                            6,354           8,801             
    Staff cost (including directors' remuneration):                           
         Wages and salaries and other staff benefits                          
                                            108,436         187,124           
         Pension scheme contributions       4,438           8,441             
    Minimum lease payments under operations                                   
         leases on land and buildings:                                        
         Related companies                  4,523           7,896             
         Certain fellow subsidiaries for the benefit of the                   
                                                                              
              ultimate holding company      4,185           12,559            
         Third parties                      24,222          42,931            
    Provision for impairment                                                  
         on land and buildings:             -               540               
                                            =========       ========          
                                                                              
    4.      DIVIDENDS                                                         
                                                                              
    No dividend was paid or proposed for the year ended 31 December 2004, nor 
    has any dividend been proposed since the balance sheet date.              
                                                                              
    5.      (LOSS) / EARNINGS PER SHARE                                       
                                                                              
    The calculation of basic loss per share for the year ended 31 December    
    2004 is based on the loss attributable to shareholders of approximately   
    HK$39,988,000 (2003: earnings of HK$31,223,000) and the weighted average  
    of 630,000,000 (2003: 630,000,000) ordinary shares in issue during the    
    year.                                                                     
                                                                              
    Diluted (loss)/earnings per share is not presented as there was on        
    dilutive potential ordinary shares in existence for the years ended 31    
    December 2004 and 31 December 2003.                                       
                                                                              
    EXTRACT OF REPORT OF THE AUDITORS                                         
                                                                              
    FUNDAMENTAL UNCERTAINTY RELATING TO THE GOING CONCERN BASIS               
                                                                              
    In forming our opinion, we have considered the adequacy of the disclosures
    made in note 1(c) to the financial statements concerning the adoption of  
    the going concern basis on which the financial statements have been       
    prepared.  As at 31 December 2004, the Group had net liabilities of HK$35 
    ,585,000 and net loss of HK$39,988,000 for the year then ended.  The      
    financial statements have been prepared on a going concern basis, the     
    validity of which depends upon future funding being available to meet its 
    debts as and when they fall due in the foreseeable future.  The financial 
    statements do not include any adjustments that would result from the      
    failure to obtain such funding.  We consider that appropriate estimates   
    and disclosures have been made in the financial statements and our opinion
    is not qualified in this respect.                                         
                                                                              
    OPINION                                                                   
                                                                              
    In our opinion the financial statements give a true and fair view of the  
    state of affairs of the Company and of the Group as at 31 December 2004   
    and of the loss and cash flows of the Group for the year then ended and   
    have been properly prepared in accordance with the disclosure requirements
    of the Hong Kong Companies Ordinance.                                     
                                                                              
    For more details, please refer to the press announcement today.