Quarterly Results announcement form Name of listed company :Grandy Applied Environmental Technology Corporation Stock code :8143 Year end date :31/03/2003 Auditors' report : Modified Qualified Unqualified X N/A 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$'000 (Unaudited) (Unaudited) Quarterly Results Announcement Current Last Corresponding Period Period from 1 APRIL 2002 from 1 APRIL 2001 to 30 JUNE 2002 to 30 JUNE 2001 HK$'000 HK$'000 Turnover : 8,390 2,214 Profit/(Loss) from Operations : 651 -536 Finance cost : -515 -26 Share of Profit/(Loss) of Associates : 0 0 Share of Profit/(Loss) of Jointly Controlled Entites : 0 0 Profit/(Loss) after Taxation & MI : 136 -562 % Change Over the Last Period : N/A % EPS / (LPS) - Basic : 0.018 CENT -0.088 CENT - Diluted : 0.017 CENT N/A Extraordinary (ETD) Gain/(Loss) : 0 0 Profit (Loss) after ETD Items : 136 -562 1st Q Dividend per Share : NIL NIL (specify if with other options) : N/A N/A B/C Dates for 1st Q Dividend : N/A to N/A bdi. Payable Date : N/A B/C Dates for AGM/SGM : N/A to N/A 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. Remarks: 1. Group Reorganisation and Basis of Presentation Group Reorganisation 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. 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 GEM,the Company became the holding company of the companies now comprising the Group on 17 July 2001. The Company's shares have been listed on GEM since 10 May 2002. Basis of presentation The unaudited consolidated profit and loss account includes the results of the Company and its subsidiaries for the three months ended 30 June 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 three months ended 30 Jun 2001 rather than from the date of its acquisition of the subsidiary pursuant to the Reorganisation. Accordingly, the unaudited consolidated results of the Group for the three months ended 30 Jun 2001 include the results of the Company and its subsidiaries with effect from 1 April 2001 or since their respective dates of incorporation, where this is a shorter period. Although the Reorganisation had not been completed and the Group did not legally exist until 17 July 2001, in the opinion of the Directors, the unaudited consolidated profit and loss account prepared on the above basis present more fairly the results of the Group as a whole. All significant intercompany transactions within the Group have been eliminated on consolidation. 2. Turnover and revenue Turnover represents the net invoiced value of goods sold, after allowances for returns and trade discounts. Revenue arising from interest income is disclosed on the face of the consolidated profit and loss account. 3. Tax No provision for Hong Kong profits tax has been made as the Group did not have any assessable profits arising in Hong Kong during the period. (2001: NIL) 4. Earnings/(Loss) per share The calculation of basic earnings/(loss) per share is based on the unaudited net profit attributable to shareholders for the three months ended 30 June 2002 of HK$136,000 (2001:unaudited net loss of HK$562,000) and the weighted average of 754,835,000(2001:640,000,000) ordinary shares deemed to be in issue on the assumption that the Reorganisation and the capitalisation issue of 631,333,000 ordinary shares of the Company have been effective on 1 April 2001. The calculations of diluted earnings per share for the three months ended 30 June 2002 is based on the unaudited net profit attributable to shareholders of HK$136,000 and 782,592,000 ordinary shares, being 754,835,000 ordinary shares as used in calculation of basic earnings per share and the weighted average of 27,757,000 ordinary shares assumed to have been in issue at no consideration on the deemed exercise of the Pre-Initial Public Offering share options. A diluted loss per share for the three months ended 30 June 2001 has not been disclosed as no diluting events existed during that period.