Listed Company Information
 

SHUN CHEONG<00650> - Results Announcement

Shun Cheong Holdings Limited announced on 18/07/2006:
(stock code: 00650 )
Year end date: 31/03/2006
Currency: HKD
Auditors' Report: Unqualified

                                                        (Audited   )
                                     (Audited   )       Last
                                     Current            Corresponding
                                     Period             Period
                                     from 01/04/2005    from 01/04/2004
                                     to 31/03/2006      to 31/03/2005
                               Note  ('000      )       ('000      )
Turnover                           : 195,871            123,780           
Profit/(Loss) from Operations      : (1,582)            (15,323)          
Finance cost                       : (1,216)            (995)             
Share of Profit/(Loss) of 
  Associates                       : N/A                N/A               
Share of Profit/(Loss) of
  Jointly Controlled Entities      : N/A                N/A               
Profit/(Loss) after Tax & MI       : (11,102)           (33,729)          
% Change over Last Period          : N/A       %
EPS/(LPS)-Basic (in dollars)       : (0.0958)           (0.2909)          
         -Diluted (in dollars)     : N/A                N/A               
Extraordinary (ETD) Gain/(Loss)    : N/A                N/A               
Profit/(Loss) after ETD Items      : (11,102)           (33,729)          
Final Dividend                     : NIL                NIL
  per Share                                              
(Specify if with other             : N/A                N/A
  options)                                               
                                                         
B/C Dates for 
  Final Dividend                   : N/A   
Payable Date                       : N/A
B/C Dates for (-)            
  General Meeting                  : N/A   
Other Distribution for             : N/A
  Current Period                     
                                     
B/C Dates for Other 
  Distribution                     : N/A   

Remarks:

1.      Impact of new and revised Hong Kong Financial Reporting Standards

The financial statements have been prepared in accordance with Hong Kong 
Financial Reporting Standards ("HKFRS") (which also include Hong Kong 
Accounting Standards ("HKASs") and Interpretations) issued by the Hong 
Kong Institute of Certified Public Accountants, accounting principles 
generally accepted in Hong Kong and the disclosure requirements of the 
Hong Kong Companies Ordinance. The following new and revised HKFRSs affect 
the Group and are adopted for the first time for the current year's 
financial statements:

HKAS 1  Presentation of Financial Statements
HKAS 2  Inventories
HKAS 7  Cash Flow Statements
HKAS 8  Accounting Policies, Changes in Accounting Estimates and Errors
HKAS 10 Events after the Balance Sheet Date
HKAS 11 Construction Contracts
HKAS 12 Income Taxes
HKAS 14 Segment Reporting
HKAS 16 Property, Plant and Equipment
HKAS 17 Leases
HKAS 18 Revenue
HKAS 19 Employee Benefits
HKAS 21 The Effects of Changes in Foreign Exchange Rates
HKAS 23 Borrowing Costs
HKAS 24 Related Party Disclosures
HKAS 27 Consolidated and Separate Financial Statements
HKAS 32 Financial Instruments: Disclosure and Presentation
HKAS 33 Earnings per Share
HKAS 36 Impairment of Assets
HKAS 37 Provisions, Contingent Liabilities and Contingent Assets
HKAS 39 Financial Instruments: Recognition and Measurement
HKFRS 3 Business Combinations
HKFRS 5 Non-current Assets Held for Sale and Discontinued Operations
HK-Int 4        Leases - Determination of the Length of Lease Term in 
respect of Hong Kong Land Leases

The adoption of the HKASs 2, 7, 8, 10, 11, 12, 14, 16, 17, 18, 19, 21, 23, 
27, 33, 36, 37, HKFRS 3 and HK-Int 4 has had no material impact on the 
accounting policies of the Group and the Company and the methods of 
computation in Gruop's and the Company's financial statements.

The impact of adopting the other HKFRSs to the current year's financial 
statements is summarized as follows:

(a)     HKAS 1 has affected the presentation of minority interests on the 
face of the consolidated balance sheet, consolidated income statement, 
consolidated statement of changes in equity and other disclosures.

(b)     HKAS 24 has expanded the definition of related parties and 
affected the Group's related-party disclosures.

(c)     The impact of the adoption of HKAS 32 and HKAS 39 is summarized as 
follows:

In prior years, the Group classified its investments in equity securities 
as long term investments.  Those investments which were intended to be 
held on a long term basis and for non-trading purposes were stated at 
their fair values on an individual basis with gains and losses recognised 
in the income statement.  Upon the adoption of HKAS 39, these non-trading 
securities held by the Group at 1 April 2005 in the amount of HK$2,500,000 
are designated as available-for-sale investments under the transitional 
provisions of HKAS 39 and accordingly are stated at fair value with gains 
or losses being recognised as a separate component of equity until 
subsequent derecognition or impairment.  The remaining equity securities 
held by the Group at 1 April 2005 in the amount of HK$514,000 were 
designated as financial assets at fair value through profit or loss under 
the transitional provisions of HKAS 39 and accordingly are stated at fair 
value with gains or losses being recognised in the income statement.

The adoption of HKAS 39 has not resulted in any change in the measurement 
of these equity securities.

(d)     HKFRS 5 has been applied prospectively in accordance with the 
transitional provisions of HKFRS 5, which has resulted in a change in 
accounting policy on the recognition of a discontinued operation.  Under 
the previous SSAP 33 "Discontinuing Operations", the Group would recognize 
a discontinued operation at the earlier of the date the Group enters into 
a binding sale agreement and the date the board of directors have approved 
and announced a formal disposal plan.  HKFRS 5 requires a component of the 
Group to be classified as discontinued when the criteria to be classified 
as held for sale have been met or it has been disposed of. An item is 
classified as held for sale if its carrying amount will be recovered 
principally through a sale transaction rather than through continuing use. 
Such a component represents a separate major line of business or 
geographical area of operations, is part of a single co-ordinated plan to 
dispose of a separate major line of business or geographical area of 
operations or is a subsidiary acquired exclusively with a view to resale.  
The principal impact of this change in accounting policy is that a 
discontinued operation is recognised by the Group at a later point than it 
would be under SSAP 33 due to the stricter criteria in HKFRS 5.

2.      Analysis of Turnover

                Continuing operation            Discontinued operations
                2006            2005            2006            2005
                HK$'000         HK$'000         HK$'000         HK$'000
                                                        
Building services contracting and maintenance businesses        
                195,871         123,780         369,912         479,171
Project management income       
                -               -               2,649           2,222
Trading and installation of electrical and mechanical engineering 
  materials and equipment
                -               -               39,168          24,181
                --------        -----------     ----------      -------- 
                195,871         123,780         411,729         505,574
                ========        ===========     ==========      ========

                        Eliminations                    Total
                2006            2005            2006            2005
                HK$'000         HK$'000         HK$'000         HK$'000
                                                                
Building services contracting and maintenance businesses                
                (98,687)        (79,323)        469,096         523,628
Project management income               
                -               -               2,649           2,222
Trading and installation of electrical and mechanical engineering 
  materials and equipment               
                -               -               39,168          24,181
                ---------       ---------       ---------       ---------
                (98,687)        (79,323)        508,913         550,031
                =========       =========       =========       =========

3.      Analysis of Profit/(Loss) from Continuing Operation and 
Discontinued Operations

                Continuing operation            Discontinued operations
                2006            2005            2006            2005
                HK$'000         HK$'000         HK$'000         HK$'000
                                                        
Profit/(loss) from operations   
                1,236           (13,333)        (7,908)         (19,409)
Loss on disposal of discontinued operations     
                (2,818)         -               -               -
Finance costs   (1,216)         (995)           (450)           (89)
                ---------       ---------       ----------      ---------
Loss before tax (2,798)         (14,328)        (8,358)         (19,498)
Tax             (114)           (53)            (53)            (688)
                ---------       ---------       ----------      ---------
Loss for the year
                (2,912)         (14,381)        (8,411)         (20,467)
Minority interests      
                (145)           1,119           366             (281)
                ---------       ---------       ----------      ---------
Loss attributable to equity holders of the parent       
                (3,057)         (13,262)        (8,045)         (20,467)
                =========       =========       ==========      =========       

                        Eliminations                    Total
                2006            2005            2006            2005
                HK$'000         HK$'000         HK$'000         HK$'000
                                                                
Profit/(loss) from operations           
                -               -               (6,672)         (32,742)
Loss on disposal of discontinued operations             
                -               -               (2,818)         -
Finance costs   -               -               (1,666)         (1,084)
                                                ----------      ---------
Loss before tax                                 (11,156)        (33,826)
Tax             -               -               (167)           (741)
                                                ----------      ---------
Loss for the year                               (11,323)        (34,567)
Minority interests              
                -               -               221             838
                ----------      ---------       ----------      ---------
Loss attributable to equity holders of the parent               
                -               -               (11,102)        (33,729)
                =========       ========        ==========      =========


4.      Loss before Tax

Loss before tax is arrived at after charging/(crediting):

                Continuing operation            Discontinued operations
                2006            2005            2006            2005
                HK$'000         HK$'000         HK$'000         HK$'000
                                                        
Cost of inventories sold        
                -               -               395             17,332
Cost of maintenance and installation    
                174,355         116,077         387,935         472,364
                ---------       ---------       ---------       ---------
                174,355         116,077         388,330         489,696
                ---------       ---------       ---------       ---------
                                                        
Depreciation    496             911             552             838
Minimum lease payments under operating leases in respect of land and 
buildings       478             476             559             619
Auditors' remuneration  
                326             348             495             452
Employee benefits expenses (including directors' remuneration)  
                16,620          16,555          21,120          26,578
Provision for bad and doubtful debts    
                1,099           71              2,026           1,460
Recovery of doubtful debts      
                -               -                               (134)
Loss/(gain) on disposals of property, plant and equipment       
                (695)           18              2               (47)
Impairment loss of available-for-sale investments       
                -               -               2,160           -
Fair value gain on equity investments at fair value through profit or loss      
                -               -               (50)            -
Unrealised (gain)/loss on investment at fair value through profit or loss       
                -               -               -               -
Interest income (3)             (327)           (957)           (990)
                =========       ===========     ==========      =========

                        Eliminations                    Total
                2006            2005            2006            2005
                HK$'000         HK$'000         HK$'000         HK$'000
                                                                
Cost of inventories sold                
                -               -               395             17,332
Cost of maintenance and installation            
                (98,687)        (79,323)        463,603         509,118
                ---------       ----------      ----------      ---------
                (98,687)        (79,323)        463,998         526,450
                ---------       ----------      ----------      ---------                                                                

Depreciation    -               -               1,048           1,749
Minimum lease payments under operating leases in respect of land and 
buildings       -               -               1,037           1,095
Auditors' remuneration
                -               -               821             800
Employee benefits expenses (including directors' remuneration)          
                -               -               37,740          43,133
Provision for bad and doubtful debts    
                -               -               3,125           1,531
Recovery of doubtful debts      
                -               -               -               (134)
Loss/(gain) on disposals of property, plant and equipment
                -               -               (693)           (29)
Impairment loss of available-for-sale investments
                -               -               2,160           -
Fair value gain on equity investments at fair value through profit or loss      
                -               -               (50)            
Unrealised (gain)/loss on investment at fair value through profit or loss       
                -               -               -               654
Interest income
                -               -               (960)           (1,317)
                =========       ==========      ==========      =========

5.      Loss per Share

The calculations of basic loss per share based on:

                                        2006            2005
                                        HK$'000         HK$'000
Loss                    
Loss attributable to equity holders of the parent                       
   From a continuing operation          (3,057)         (13,262)
   From discontinued operations         (8,045)         (20,467)
                                        ---------       ---------
                                        (11,102)        (33,729)
                                        =========       =========
Shares                  
Weighted average number of ordinary
  shares in issue during the year       115,930,400     115,930,400
                                        ============    ============

Diluted loss per share amounts for the years ended 31 March 2006 and 2005 
have not been presented as no diluting events existed during the both 
years.

6.      EVENTS AFTER THE BALANCE SHEET DATE

(a)     On 12 April 2006, Chinney Alliance Group Limited ("CAG"), a then 
substantial shareholder of the Company, sold its 27.6% equity interest in 
the Company to Upsky Enterprises Limited ("Upsky"), a company wholly owned 
by a non-executive director of CAG.

(b)     On 8 May 2006, the Company received a voluntary conditional cash 
offer by Upsky to acquire all the Company's shares in issue (the "Offer") 
at the offer price of HK$0.30 for each of share of the Company.  On 3 July 
2006, the Offer was declared unconditional.  On 17 July 2006, the Offer 
closed and Upsky received valid acceptances in respect of 38,178,749 
shares of the Company under the Offer.  As a result, Upsky owns 70,178,749 
shares of the Company, representing 60.53% of the issued share capital of 
the Company as at the date hereof and becomes the ultimate holding company 
of the Company.

(c)     Subsequent to the balance sheet date, the corporate guarantees 
provided by the Company to certain banks in respect of general banking 
facilities granted to certain former subsidiaries of the Company amounted 
to HK$75 million have been released and cancelled before 30 June 2006 
pursuant to the terms of the agreement for the disposal of the Company's 
entire interests in Shun Cheong Investments Limited dated 26 January 2006.

7.      COMPARATIVE AMOUNTS

As explained in note 1 above, due to the adoption of new and revised 
HKFRSs during the current year, the accounting treatment and presentation 
of certain items and balances in the consolidated financial statements 
have been revised to comply with new requirements. Accordingly, certain 
comparative amounts have been reclassified and restated to conform with 
the current year's presentation and accounting treatment.