Yearly Results announcement form Name of listed company : GRANDY APPLIED ENVIRONMENTAL TECHNOLOGY CORPORATION Stock code : 8143 Year end date : 31 MARCH 2002 Auditors' report : Qualified Modified X Neither Important Note : This result announcement form only contains extracted information from and should be read in conjunction with the detailed results announcement of the issuer, which can be viewed on the GEM website at http://www.hkgem.com Currency: HK$'000 (Audited) (Audited) Final Results Announcement Current Last Corresponding Period Period from 1 APRIL 2001 from 1 APRIL 2000 to 31 MARCH 2002 to 31 MARCH 2001 HK$'000 HK$'000 Turnover : 26,322 7,118 Profit/(Loss) from Operations : 4,672 (1,098) Finance cost : (2,228) (76) Share of Profit/(Loss) of Associates : 0 0 Share of Profit/(Loss) of Jointly Controlled Entites : 0 0 Profit/(Loss) after Taxation & MI : 2,407 (1,174) % Change Over the Last Period : N/A % EPS / (LPS) - Basic : 0.38 CENT (0.18) CENT - Diluted : N/A N/A Extraordinary (ETD) Gain/(Loss) : 0 0 Profit (Loss) after ETD Items : 2,407 (1,174) Final Dividend per Share : NIL NIL (specify if with other options) : N/A N/A B/C Dates for Final Dividend : N/A to N/A bdi. Payable Date : N/A B/C Dates for AGM/SGM : 29 JULY 2002 to 2 AUGUST 2002 bdi. Other Distribution for Current Period: NIL B/C Dates for Other Distribution : N/A to N/A bdi. (bdi: both days inclusive) For and on behalf of GRANDY APPLIED ENVIRONMENTAL TECHNOLOGY CORPORATION Signature : Name : WILFRED WONG Title : COMPANY SECRETARY Responsibility statement The directors of the Company (the "Directors") as at the date hereof hereby collectively and individually accept full responsibility for the accuracy of the information contained in this results announcement form (the "Information") and confirm, having made all reasonable inquiries, that to the best of their knowledge and belief the Information are accurate and complete in all material respects and not misleading and that there are no other matters the omission of which would make the Information herein inaccurate or misleading. The Directors acknowledge that the Stock Exchange has no responsibility whatsoever with regard to the Information and undertake to indemnify the Exchange against all liability incurred and all losses suffered by the Exchange in connection with or relating to the Information. Notes: 1. Group Reorganisation and Basis of Presentation and Consolidation The Company was incorporated in the Cayman Islands on 28 May 2001 as an exempted company with limited liability under the Companies Law, Cap. 22 (Law 3 of 1961, as consolidated and revised) of the Cayman Islands. Subsequent to the balance sheet date, on 10 May 2002, the shares of the Company were listed on the Growth Enterprise Market of The Stock Exchange of Hong Kong Limited (the "GEM"). Pursuant to a group reorganisation (the "Reorganisation") to rationalise the structure of the Group in preparation for the listing of the Company's shares on the GEM, the Company became the holding company of the companies now comprising the Group on 17 July 2001. This was accomplished by the acquisition of the entire share capital of Grandy Environmental (H.K.) Limited ("Grandy HK") from its then shareholders by Worlday Investments Limited, a wholly-owned subsidiary of the Company, on 16 July 2001. Further details of the Reorganisation, together with the details of Grandy HK acquired pursuant thereto, are set out in the prospectus of the Company dated 29 April 2002. The Reorganisation involved companies under common control. The consolidated financial statements have been prepared on the basis of merger accounting in accordance with SSAP 27 "Accounting for Group Reconstructions". On this basis, the Company has been treated as the holding company of its subsidiaries for the financial years presented rather than from the date of its acquisition of Grandy HK pursuant to the Reorganisation. Accordingly, the consolidated results of the Group for the years ended 31 March 2001 and 2002 include the results of the Company and its subsidiaries with effect from 1 April 2000 or since their respective dates of incorporation, where this is a shorter period. 2. Segment Information During the year, since the Group was principally engaged in the manufacturing and selling of environmental protection products in Hong Kong and all of the Group's products were sold in Hong Kong, the Board consider that the Group operates within a single business and geographical segment. Accordingly, no segment information is presented. 3. Turnover Turnover represents the net invoiced value of goods sold, after allowances for returns and trade discounts. 4. Profit/(Loss) from operating activities The Group's profit/(loss) from operating activities is arrived at after charging: 2002 2001 HK$ HK$ Depreciation 156,734 125,858 Loss on disposal of fixed assets 15,238 - 5. Finance costs 2002 2001 HK$ HK$ Interest on bank loans and overdrafts wholly repayable within five years 38,366 66,751 Interest on a finance lease 9,252 9,252 Interest on convertible notes 504,329 - Redemption premium on convertible notes 1,675,472 - Total finance costs 2,227,419 76,003 6. Tax Hong Kong profits tax has been provided at the rate of 16% on the estimated assessable profits arising in Hong Kong during the year. No provision for Hong Kong profits tax was made in the prior year as the Group had no assessable profit arising in Hong Kong for that year. The Group and the Company have no significant potential deferred tax liabilities for which provision has not been made. 7. Earnings/(Loss) per share The calculation of basic earnings/(loss) per share is based on the net profit from ordinary activities attributable to shareholders for the year of HK$2,407,432 (2001: net loss of HK$1,174,212) and 640,000,000 shares (2001: 640,000,000 shares) deemed to have been in issue and issuable during the year on the assumption that the Reorganisation and the subsequent capitalisation issue of 631,333,333 shares of the Company had been effective on 1 April 2000. Diluted earnings/(loss) per share for the years ended 31 March 2002 and 2001 have not been disclosed as no diluting events existed during these years. 8. Reserves Share Contributed Capital Accumulated premium surplus reserve losses Total HK$ HK$ HK$ HK$ HK$ (Note a) (Note b) At 1 April 2000 - 2,935,416 - (2,304,196) 631,220 Net loss for the year - - - (1,174,212)(1,174,212) At 31 March 2001 and at 1 April 2001 - 2,935,416 - (3,478,408) (542,992) Issue of new shares 3,588,697 - - - 3,588,697 Arising from professional services received - - 300,000 - 300,000 Net profit for the year - - - 2,407,432 2,407,432 At 31 March 2002 3,588,697 2,935,416 300,000 (1,070,976)5,753,137 Notes: (a) The Group's contributed surplus represents the difference between the nominal value of the shares of Grandy HK acquired pursuant to the Reorganisation as set out in note 1 over the nominal value of the Company's shares issued in exchange therefore. (b) The capital reserve represents certain professional services fees payable by the Group settled in the form of share options of the Company granted to two professional services providers in lieu of cash consideration.