GREATWALL CYBER<00689> - Announcement
GREAT WALL CYBERTECH LIMITED
(Incorporated in Bermuda with imited liability)
Practice Note 19 Disclosure
This announcement is made under Practice Note 19 of the Rules
Governing of the Listing of Securities on The Stock Exchange of Hong
As shown in the audited consolidated financial statements for the year
ended 31 March 2001 of Great Wall Cybertech Limited, advances to an
entity and financial assistance and guarantees to affiliated companies
each in aggregate exceeds 25% of the Group's net assets value of
HK$1,345,923,000, therefore giving rise to a disclosure obligation
under paragraphs 3.2.1 and 3.3 of the Practice Note 19 respectively.
In view of the delay in the timing of release of this announcement,
The Stock Exchange of Hong Kong Limited reserves its rights to take
any action against the Company and/or its directors, if appropriate,
under the Rules Governing the Listing of Securities on The Stock
Exchange of Hong Kong Limited.
This announcement is made by Great Wall Cybertech Limited (the
"Company", together with its subsidiaries the "Group") pursuant to the
requirement under Practice Note 19 ("PN19") of the Rules ("Listing
Rules") Governing the Listing of Securities on The Stock Exchange of
Hong Kong Limited (the "Stock Exchange"). Advances by the Group to an
entity under paragraph 3.2.1 of PN 19 and financial assistance and
guarantees provided by the Group to its affiliated companies under
paragraph 3.3 of PN 19 each in aggregate exceeds 25% of the Group's
net assets value of HK$1,345,923,000 as disclosed in the Company's
2001 Annual Report for the year ended 31 March 2001.
DISCLOSURE PURSUANT TO PARAGRAPH 3.2.1 OF PN19
Advances to an Entity
The aggregate of amount due to the Group by Qingyuan Rowa Electronics
Co. Ltd. ("QY Rowa") and its associates under paragraph 3.2.1 of PN 19
amounted to HK$860,794,000 representing approximately 64% of the
Group's net assets value of HK$1,345,923,000 as at 31 March 2001.
Details of the advances have been disclosed in the Company's 2001
Annual Report dated 31 August 2001 and are set out in sub-section
headed "Advances to Affiliated Companies" under the heading
"Disclosure pursuant to paragraph 3.3 of PN19" below.
DISCLOSURE PURSUANT TO PARAGRAPH 3.3 OF PN19
Advances to Affiliated Companies
As at 31 March 2001, the Group advanced a total sum of HK$860,794,000
to its affiliated companies, for the details, please refer to the press
Advances to the aforesaid affiliated companies were funded by internal
resources and/or bank borrowings and were made for the purpose of
providing investment fund and/or working capital.
All the said advances were unsecured, interest-free and had no fixed
repayment terms except for the trade receivable from QY Rowa and Rowa
HK having a credit term of 90 days.
Total amount of financial assistance and guarantees to affiliated
companies being net trade receivables over 90 days, loan and
guarantees in aggregate amounted to HK$649,194,000 (A).
Financial Assistance and Guarantees to Affiliated Companies
As at 31 March 2001, financial assistance and guarantees provided by
the Group to its affiliated companies amounted to HK$145,294,000
details, please refer to the press announcement today.
The aggregate of advances, loans, and guarantees to affiliated
companies amounting to HK$794,488,000 by the Group as at 31 March 2001
representing 59% of the Group's net assets value as at 31 March 2001.
The financial assistance given by the Group to Great Wall Electronics
Ltd. arose from several guarantees issued in favour of certain
financial institutions securing for credit or loan facilities.
All the said financial assistance and guarantees were unsecured,
interest-free and had no fixed repayment terms.
TIMING OF DISCLOSURE UNDER PARAGRAPH 3.2.1 AND 3.3 OF PN 19
The disclosure obligation under paragraph 3.3 of PN 19 arose on 31
March 2000 when some restructuring of the Group took place, as a
result of which Great Wall Electronics Limited ceased to be a
wholly-owned subsidiary but became an associate of the Company.
The disclosure obligation under paragraph 3.2.1 of PN 19 arose no
later than September 2000 when the aggregate of amounts due from and
all guarantees given on behalf of QY Rowa and its associates in
aggregate exceeded HK$384,224,750, an amount being 25% of the net
asset value of HK$1,536,899,000 of the Group as at 31 March 2000.
Therefore, the Company has committed breaches of the relevant
disclosure obligation under the PN 19. The Stock Exchange reserves its
rights to take any action against the Company and/or its directors, if
appropriate, under the Listing Rules.
MEASURES TO BE TAKEN TO AVOID FUTURE BREACH
In order to avoid any future breach of disclosure obligation under PN
19, the Company has formulated a monitoring procedure which requires
particulars subject to PN 19 disclosure be reported monthly to the
Board by the PN 19 committee, a committee formed to monthly review the
position in relation thereto. Members of the committee include an
executive director, internal accountants and other responsible
The Directors consider that there is no general disclosure obligation
under paragraphs 3.6, 3.7.1 or 3.7.2 of PN 19 as at the date of this
The Directors undertake to comply with the continuing disclosure
requirements under paragraphs 3.8 and 3.10 of PN 19.
By Order of the Board
Tse On Kin
Hong Kong, 8 October 2001.