神城A退(000018)深中冠Ｂ2001年年度报告（英文版）

.ANNUAL REPORT 2001（Summary） SHENZHEN VICTOR ONWARD TEXTILE INDUSTRIAL CO., LTD SHENZHEN VICTOR ONWARD TEXTILE INDUSTRIAL CO., LTD. ANNUAL REPORT 2001（Summary） Important Note The Board of Directors of the Company hereby guarantees that there are no material omissions, misstatement or seriously misleading representation in this report and shall assume joint and several liability for the authenticity, accuracy and completeness of the contents hereof. Chapter 1 Brief Introduction of the Company I. Name of the Company In Chinese : 深圳中冠纺织印染股份有限公司 In English : Shenzhen Victor Onward Textile Industrial Co., Ltd. II. Legal Representative : Mr. Dong Binggen III. Secretary of the Board of Directors : Mr. Ren Yuanwei Authorized representative: Mr. Ma Gen Sheng Tel : (755) 232 0942, (852) 2428 1823 Fax : (755) 233 9100 (852) 2480 5666 E-mail : szvo@udcgroup.com szvo@sohu.com IV. Registered address: Flat C, 10/F, Real Estate Building, Renmin Nan Road, Shenzhen China Office address: 18/F, CRE Center, No.889, Changshawan Road, Kowloon, Hong Kong. Post Code: 518001 V. Press for information disclosure: Times Square and Hong Kong Commercial Daily Website for information disclosure: http://www.cninfo.com.cn VI. Stock Exchange with Which the Company’s Stocks Are Listed: Shenzhen Stock Exchange Stock abbreviation : Shen Victor Onward A Shares and B Shares Stock Code : 000018 200018 Chapter 2 Financial Highlights (I) The Total Profits of 2001 and its Composition Unit: HKD’000 Revenue 133,362 Cost of sales (118,898) Gross profit 14,464 Distribution and selling expenses (6,462) General and administration expenses (7,651) Other operating income, net 2,404 Profit from operations 2,755 Finance cost ,net (965) Income from associates 70 Other income, net 328 Profit before tax 2,188 Income tax expense (389) Net profit 1,799 (II) Accounting Data and Financial Indicators Over the Past 3 Years by the End of the Report Period (Unit: HKD ’000) Item 2001 2000 1999 Revenue 133,362 153,774 258,746 Net profit 1,799 4,754 10,365 Total assets 358,119 413,289 351,415 Shareholders’ equity 276,585 285,256 280,502 Earnings per share (HK$) 0.01 0.03 0.06 Net assets per share(HK$) 1.69 1.69 1.66 Net cash flows per share from operating activities(HK$) 0.01 0.12 0.11 Net assets income ratio (%) 0.6 1.67 3.7 (III) Particulars about Changes of Shareholders’ Equity during the Report Period(HKD’000) Item Share capital reserve Total shareholders’ equity At beginning of the period 207,871 66,915 274,786 Increase in this period 1,799 1,799 -1- .ANNUAL REPORT 2001（Summary） SHENZHEN VICTOR ONWARD TEXTILE INDUSTRIAL CO., LTD Decrease in this period At end of the period 207,871 68,714 306,915,248 Chapter 3 Particulars about the Changes of Capital Shares and Shareholders 1. At the end of 1999, the Company had 24,068 registered shareholders in total including 16,135 shareholders of A shares, 7,933 shareholders of B shares. 2. Particulars about the shares held by principal shareholders Name of shareholders No. of Shares Proportion 1 Shenzhen Union China Holdings Ltd. 47,359,859 28% 2 Shenzhen Textile Holdings Ltd. 24,458,231 14.46% 3 Style-Success Ltd. 24,446,429 14.45% 4 Union Developing Group of China Ltd. 7,671,163 4.54% 5 Rich Crown Investment Co., Ltd. 6,114,556 3.62% 6 Shing Ying Chieh 5,666,696 3.35% 7 Overseas Associates Ltd. 3,114,556 1.84% 8 Liu Liaoyuan 461,306 0.27% 9 Chen Song 311,400 0.18% 10 Yu Ching 150,000 0.09% Chapter 4 Directors, Supervisors, Senior Executives and Staff of the Company I. Directors, Supervisors and Senior Executives 1. Basic information Name Sex Age Title Term of Date of starting and Shares held at Shares held at office ending year-beginning year-end Dong Male 51 Chairman of the Board 3 years 2000.5-2003.5 0 0 Binggen of Directors Hu Male 38 Deputy chairman of 3 years 2000.5-2003.5 0 0 Yongfeng the Board Li Zhihua Male 44 Deputy chairman of 3 years 2000.5-2003.5 0 0 the Board Guan Female 55 Director 3 years 2000.5-2003.5 0 0 Tongke Fan Lian Male 54 Director 3 years 2000.5-2003.5 0 0 Song Tao Male 49 Managing director 3 years 2000.9-2003.5 0 0 Sun Male 36 Deputy managing 3 years 2000.5-2003.5 0 0 Zhiping director Ding Yue Male 43 Chairman of the 3 years 2000.5-2003.5 0 0 Supervisory Committee Gui Liping Male 43 Supervisor 3 years 2000.5-2003.5 0 0 Su Male 56 Supervisor 3 years 2000.5-2003.5 0 0 Tingfang Chen Male 59 Deputy GM 3 years 2000.5-2003.5 0 0 Jingqiu Ren Male 51 Deputy GM/Financial 3 years 2000.5-2003.5 0 0 Yuanwei Controller/Board Secretary 2. Annual remuneration The annual remuneration of the directors, supervisors and senior executives of the Company receiving remuneration from the Company in the report period is independently determined by the Board of Directors and the Shareholders’ General Meeting of the Company according to relevant principles of the Articles of Association of the Company and the its production and operation status and by referring to the practice of the companies engaged in the same industry. II. Particulars about Staff By the end of the report period, the Company had 400 staff members in total, including 20 managing personnel, 350 production personnel, 20 sales personnel (including those of Hong Kong Co.), 8 financial personnel, 36 professional technicians and 30 professionals with senior and semi-senior professional titles. The Company has provided social insurance to its staff according to relevant regulations of Shenzhen. Chapter 5 Administrative Structure Since establishment and listing, the Company has been continually improving its administrative structure and standardizing the operation pursuant to the PRC Company Law and the PRC Securities Law and other relevant laws and regulations, has worked out and updated the Articles of Association, Rules of Procedures of the Shareholders’ Meeting, Rules of Procedures of the Board of Directors, Rules of Procedures of the Supervisory Committee, the Working Instructions of General Manager, the Provisions for Control over the Information -2- .ANNUAL REPORT 2001（Summary） SHENZHEN VICTOR ONWARD TEXTILE INDUSTRIAL CO., LTD Disclosure of the Listed Company, and other management systems. The Company’s administration and operation basically comply with such regulations as the Rules for Administration of Listed Companies promulgated by China Securities Regulatory Commission (CSRC). Chapter 6 Shareholders’ General Meeting In the report year, the Company had held one Shareholders’ General Meeting ,the Shareholders’ General Meeting examined and adopted the following proposals by voting: 1. Resolution of Adopting 2000 Working Report of Board of Directors 2. Resolution of Adopting 2000 Working Report of Supervisory Committee 3. Resolution of Adopting 2000 Financial Settlement Report 4. Resolution of Adopting 2000 Profit Distribution Proposal and the Policy concerning the Expected 2001 Profit Distribution 5. Resolution concerning the Investment of Victor Onward Printing and Dyeing (Hong Kong) Limited, a subsidiary of the Company in PET and PBT Resin Project with Annual Production Output of 330,000 tons. 6. Proposal on Amendment of Partial items of the Articles of Association Chapter 7 Report of the Board of Directors Ⅰ. Operation (Ⅰ) Scope and Operation of the Principal Businesses 1. Principal Business Lines The Company’s principal business scope covers printing and dyeing, processing and sales of various pure cotton, pure linen, polyester-mixed cotton, linen-mixed cotton and blended high-grade lining and the finished garments. 2. Operation Influenced from the International politics and economic situation, the competition of the textile and dyeing and printing market is extremely severe in 2001. The Company took a series of measures in production and operation, by developing the market and enhancing the management, strengthening technical renovation and creation, so that the Company had overcome the difficulties. (Ⅱ) Summary of operation results achieved by the wholly owned subsidiaries and the principal holding braches 1. Victor Onward Printing and Dyeing (Hong Kong) Limited Victor Onward Printing and Dyeing (Hong Kong) Limited is a solely owned subsidiary of the Company, engaged for developing foreign market for the Company. It was registered in 1984 in Hong Kong, with registered capital of HK$ 5 million. The Company holds 100% of its equity. Its principal businesses are to supply raw materials to the Company and marketing the Company’s products. At present, the company owns commercial and office building, warehouses, and a big scales truck transportation fleet. 2. Shenzhen South China Printing and Dyeing Co., Ltd. Shenzhen South China Printing and Dyeing Co., Ltd. was established in July 1988. The Company is holding 49.56% of its equity. It is mainly engaged in printing and dyeing of various garment linings. In 2001, the company realized a turnover amounting to HK$ 70,129,904.64 and after-tax profit amounting to HK$ 1,186,584.92. (Ⅲ) Major Suppliers and Customers The calculated purchase amount to the top five suppliers accounts for 26 % of the Company’s total purchase amount. The calculated sales amount to the top five customers accounts for 34.3% of the Company’s total sales amount. (Ⅳ) Investment 1. On June 28, 2001, the Company signed equity transfer agreement with UDC Group. According to the agreement, the Company invested RMB 14.3594 million to accept 36.54% equity of South China Printing and Dyeing Co., Ltd. held by UDC Group. After the transfer, the Company holds 49.56% equity of the said company. 2. Victor Onward Printing & Dyeing (Hong Kong) Limited, one of the Company’s subsidiaries, was to invest RMB 175 million to jointly register and establish Ningbo Hualian New Materials Technology Co., Ltd. in Ningbo together with Union China Holdings Co., Ltd. for initiating PET and PBT engineering resin project with annual capacity of 330,000 tons. At present, the project is in process of preparation. 3. With a view to complying with the market situation after China’s accession to WTO, the Company invested over RMB 7.68 million, for overall innovation of the pre-treatment and post-finishing equipment and facilities. -3- .ANNUAL REPORT 2001（Summary） SHENZHEN VICTOR ONWARD TEXTILE INDUSTRIAL CO., LTD Ⅱ. Financial Position and Reasons of Change In the report year, the Company enjoyed good financial position, carried out the operation in a steady and healthy way, had sufficient fund for circulation. Summary of Changes in Financial Data: Items Ended 2001 (in HK$’000) ended 2000 (in HK$’000) Increase/Decrease rate (+/-%) Total assets 385,119 402,819 -4.4% Long-term liabilities 6,553 7,607 -13.9% Shareholders’ equity 276,585 274,786 0.7% Profit from operation 2,755 4,440 -38.0% Net profit 1,799 5,175 -65.2% V. Report of the Board of Directors 1. Board meetings and resolutions in the report year In the report year, the Company had held three board meetings and examined 17 resolutions with details as follows: 1) The 3rd meeting of the 3rd Board was held at Shenzhen UDC Building on March 20, 2001. The meeting examined and adopted the following resolutions. 2000 Work Report of the Board of Directors, 2000 Financial Settlement and Profit Distribution Preplan , 2000 Annual Report , Resolution on Establishing Independent Directors, Resolution on Engaging Manager of the Financial Department ,Resolution of Application for Loan with Nanyang Bank Shenzhen Branch, Resolution of Offering Loan Guarantee to Shenzhen South China. 2) The 4rd meeting of the 3rd Board was held at Shenzhen UDC Building on May 30, 2001. The meeting examined and adopted the following resolutions. Resolution of holding 2000 Shareholders’ General Meeting, Resolution of Amendment of Partial Articles of the Articles of Association, Resolution of Investing PET and PBT Project with Annual Capacity of 33 Tons, Resolution on Engaging the Company’s Chief Financial Supervisor , 3) The 5th meeting of the 3rd Board was held at Shenzhen UDC Building on August 7, 2001. The meeting examined and adopted the following resolutions. 2001 1st Half-year Work Report of the Board of Directors, 2001 1st Half-year Financial Report, 2001 Interim Profit Distribution Preplan, 2001 Interim Report, Resolution of the Equipment Improvement Project of the Second Half Year of 2001 ,Internal Control System for Disposal of the Assets Loss of the Company , 2. Implementation of the Resolutions of the Shareholders’ General Meeting by the Board of Directors: 2000 Shareholders’ General Meeting was held on June 30, 2001 at Shenzhen UDC Building, the meeting adopted the Resolution of Adopti ng 2000 Working Report of Board of Directors Resolution of Adopting 2000 Work Report of Supervisory Committee Resolution of Adopting 2000 Financial Settlement Resolution of Approval of 2000 Profit Distribution Plan and 2001 Predicted Profit Distribution Policy, and the Resolution concerning the Investment of Victor Onward Printing and Dyeing (Hong Kong) Limited, a subsidiary of the Company in PET and PBT Resin Project with Annual Production Output of 330,000 tons. The Board of Directors earnestly implemented all the aforesaid resolutions according to the resolution requirements at 2001 Shareholders’ General Meeting. VI. Profit Distribution Preplan for 2001 and Policy on Profit distribution for 2002 The Profit before tax of the Company in 2001 was RBM 1.25 million, the after-tax net profit was RMB 0.84 million. In accordance with the provisions of the Articles of Association,10% of the remaining profit, i.e., RMB 84 thousand, and 5% thereof, i.e., RMB 42 thousand, will be set aside as statutory revenue and statutory public welfare fund respectively, the year-end profit available for distribution was RMB 0.72 million. Adding the Undistributed profit at beginning of 2001, i.e., RBM 3.13 million, the total profit available for distribution was RMB 3.85 million. Considering that the Company will demand more fund to investment and equipment rebuilding, the Company preplan neither to pay dividends nor to capitalize the Reserves for the reported year. The policy on profit distribution for 2002 of the Company is that, considering the fund demands of operation and investment in 2002, the Company will not distribute the profit of the current year and the retained profit after the ending of 2001. The Board of Directors will determine the profit distribution preplan according to actual circumstances and make corresponding adjustment to it according the operation and development status of the Company. Chapter 8 Report of the Supervisory Committee I. The particulars about the work of the Supervisor Committee and the meetings held by it In the report period, the members of the Supervisory Committee attended all meetings of the Board of Directors and fully expressed their -4- .ANNUAL REPORT 2001（Summary） SHENZHEN VICTOR ONWARD TEXTILE INDUSTRIAL CO., LTD opinions according to the items on agenda and their duties. The Supervisory Committee conducted wide supervision over the production and operation of the Company in daily work in accordance with the Company Law and the Articles of Association of the Company. In the report period, the Supervisory Committee held three meetings in total. The particulars of the meetings are as follows: The 3rd meeting of the third Supervisory Committee was held at Union Building on March 20, 2001. The meeting examined and adopted 2000 Annual Work Report, Resolution for 2000 Final Accounting and Profit Distribution Preplan, the Resolution for 2000 Annual Report of the Company, the Resolution for the Appointment of Independent Directors, the Resolution for the Appointment of the Manager of Finance Dept., the Resolution for Borrowing Loan from Nanyang Bank Shenzhen Branch and the Resolution for Providing Loan Guarantee to Shenzhen South China. The 4th meeting of the third Supervisory Committee was held at Union Building on May 30, 2001. The meeting examined and adopted the Resolution for Holding 2000 Annual Shareholders’ General Meeting, the Resolution for Revising Part of Articles of the Articles of Association of the Company, the Resolution for Investing in the Project with Annual Output of PET and PBT of 33 Tons and the Resolution for Appointing the Financial Controller of the Company. The 5th meeting of the third Supervisory Committee was held at Union Building on August 7, 2001. The meeting examined and adopted the Work Report of the Company for the First Half of 2001, the Financial Report of the Company for the First Half of 2001, 2001 Interim Profit Distribution Preplan of the Company, 2001 Interim Report of the Company, the Resolution for the Equipment Renovation Project in the Second Half of 2001 and the Internal Control System Concerning the Disposal of the Asset Loss of the Company. II. Independent Opinions of the Supervisory Committee In the report period, the Company operated strictly according to Company Law, Securities law and the Articles of Association of the Company and other relevant laws and regulations. The Company’s procedure of decision was legal and its internal control system was sound. The directors and managers of the Company all did their duties during their work and none of their acts were found to violate the laws, regulations and the Articles of Association or harm the Company’s interests. The Supervisory Committee carefully checked and examined the financial data of the Company including 2001 financial report audited by Anderson Certified Public Accountant, and held the opinion that its financial status was good and its financial structure was reasonable in 2001. 2001 unqualified auditors’ report issued by Anderson Certified Public Accountant, for the Company was true and truly reflected the financial status and operating results of the Company. III. The Company did not raise funds in the report period. The funds last raised after listing were invested in such projects as promised in Prospectus. IV. Neither insider trading nor act that caused harm to the rights and interests of part of shareholders or the loss of the Company’s assets was found in respect of the transaction price of the assets purchased or sold by the Company. V.The related transactions between the Company and associated enterprises (companies) were conducted in a fair manner and at market prices. VI. Certified Public Accountant issued 2001 unqualified auditors’ report for the Company. Chapter 9 Important Events (I) The Company was not involved in any material lawsuits and arbitration in the report period. (II) There was no punishment imposed by supervision and administrative departments on the Company, the directors or senior executives of the Company in the report period. (III) Events concerning acquisition or sale of the assets, absorption or merger in the report period. The Company entered into equity transfer agreement with Union Developing Group Ltd. on June 28 and invested RMB 14.3594 million in acquiring 36.54% equity of South China Printing and Dyeing Co., Ltd. (Shenzhen South China) held by Union Group so that it held 49.56% equity of Shenzhen South China According to the Resolution for Subscription for the New Shares of Fujian Industry Bank adopted by the provisional shareholders’ general meeting of the previous year and the limit approved by the People’s Bank of China, the Bank invested RMB 30.9 million in subscribing for 15 million new shares issued by Fujian Industry Bank at the price of RMB 2.06 per share. This project had generated good result by the end of the report period. -5- .ANNUAL REPORT 2001（Summary） SHENZHEN VICTOR ONWARD TEXTILE INDUSTRIAL CO., LTD As the board of directors of Shenzhen Lianhong Garment Co., Ltd. (Lianhong) failed to go through the relevant statutory application procedure in respect of the share participation of the Company in this company for long time, the Company cancelled the intent of investing in this company. The investment has been completely recovered. For highlighting its key business, the Company transferred 25% equity of Shanghai Shengguan Property Development Co., Ltd. held by it through the investment of RMB 3.75 million to Shanghai Huashun Investment Management Co., Ltd. at the price of RMB 4.875 million. The total amount of the transfer was settled. The investment income from this equity transfer was RMB 1.125 million. (IV) Important related transactions During the year, the Group had the following significant related parties transactions: 1.In 1992, the Company together with Union Development Group of China Ltd. (previously known as Union Textile of China (Group) Limited) (“Union Development”), a major shareholder of the Company, and other independent third parties jointly invested in a company listed on The Stock Exchange of Hong Kong Limited. The investor is principally engaged in the manufacturing and sales of garments. It has garment factories in the Guangdong Province of the PRC. The portion of the joint investment the Group held on behalf of Union Development and other independent third parties are offset against the funds advanced. As of December 31, 2001, the funds advanced to the joint investment amounted to approximately HKD11,187,000 (2000: HKD 11,187,000). The Group’s share of the joint investment was included in investments. In accordance with the joint investment agreement, the Group was responsible for the management of this investment. Any income or loss, net of related expenses, from the investment unless otherwise agreed in writing, would be shared between the Group and other parties according to their share of interests. As of December 31, 2001, the Group held 6,620,000 (2000: 6,620,000) ordinary shares of this Hong Kong listed company. Details were as follows: 2001 2000 HKD’000 HKD’000 Cost 4,250 4,250 Less: Provision for permanent diminution in value (3,363) (3,363) Net book value 887 887 Market value 887 887 Transactions with related companies Other than the acquisition of equity interests in an associate from a related party , the Group has the following material related party transactions: Sales China Crown 123 516 South China 918 - Shenzhen United Fashion Co., Ltd. 502 - Interest Income Union Heater 1,067 - Shenguan 955 - Purchases of raw materials Shenzhen United Fashion Co., Ltd. 994 - 2. RELATED PARTY TRANSACTIONS (Cont’d) Balances with related companies Balances due from (to) related companies as of December 31, 2001 were as follows: 2001 2000 HKD’000 HKD’000 Trade receivable from related parties 165 1,507 Loans receivable from related parties 4,488 26,212 Trade payable to related parties (994) (647) The above balances were non-interest bearing, unsecured and repayable on demand. 3. Trusting, contracting for and lease of assets In the report year, the Company did not trust or contract for or lease the assets of other companies. Other companies were not entrusted to -6- .ANNUAL REPORT 2001（Summary） SHENZHEN VICTOR ONWARD TEXTILE INDUSTRIAL CO., LTD trust, contract for or lease the assets of the Company. 4. The engagement of certified public accountants The Company neither changed nor dismissed certified public accountants in the report period. It still engaged Andersen Certified Public Accountants and Andersen-Huaqiang Certified Public Accountants as the auditing organ of the Company in 2001. 5. The Company did not sign any material contract in the report period. 6. The Company did not change its name or the abbreviation of the stock name in the report period. 7. There were no other important events in the report period Chapter 10 Financial Report Auditors’ Report The 2001 financial report of the Company has been audited by Huaqiang-Andersen Certified Public Accountant. This Certified Public Accountant issued unqualified auditors’ report. Financial Statements (Enclosed hereinafter) Notes to Financial Statements Chapter 11 Documents Available for Inspection 1. The original of the annual report bearing the signature of the Chairman of the Board of Directors of the Company; 2. Annual financial report bearing the seal and signature of legal representative, financial controller and accounting personnel.The original of the annual auditors’ report bearing the seal of the Certified Public Accountants and the signature and seal of CPA. The original of all Company’s documents and the original manuscripts of announcements publicly disclosed on the press designated by China Securities Regulatory Commission in the report period.The Articles of Association of the Company adopted by the latest shareholders’ general meeting.The Annual Report published in other securities markets. The Board of Directors of Shenzhen Victor Onward Textile Industrial Co., Ltd. 23 March,2002 AUDITORS’ REPORT AQS-FA-2002-0140 TO THE SHAREHOLDERS OF VICTOR ONWARD TEXTILE INDUSTRIAL COMPANY LIMITED: We have audited the accompanying consolidated balance sheet of Victor Onward Textile Industrial Company Limited (the “Company”) and its subsidiaries (the “Group”) as of December 31, 2001 and the related consolidated statements of income, changes in equity and cash flows for the year then ended. These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in accordance with International Standards on Auditing. Those Standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion. In our opinion, the consolidated financial statements give a true and fair view of the financial position of the Group as of December 31, 2001, and the results of its operations and its cash flows for the year then ended in accordance with International Financial Reporting Standards, as published by the International Accounting Standards Board. Shenzhen March 20, 2002 VICTOR ONWARD TEXTILE INDUSTRIAL COMPANY LIMITED AND ITS SUBSIDIARIES CONSOLIDATED BALANCE SHEET AS OF DECEMBER 31, 2001 (Expressed in thousands of Hong Kong dollars) Note 2001 2000 ASSETS NON-CURRENT ASSETS: -7- .ANNUAL REPORT 2001（Summary） SHENZHEN VICTOR ONWARD TEXTILE INDUSTRIAL CO., LTD Property, plant and equipment, net 3,11 116,930 116,926 Investment in unconsolidated subsidiaries - 1,533 Investment in associates 4 29,130 3,760 Investments 5,20 30,009 43,856 Pledged deposits 3,000 22,392 Other non-current assets 6 24,824 25,983 203,893 214,450 CURRENT ASSETS: Inventories 7 62,060 59,363 Trade and other receivables, net 8 53,964 57,260 Investments 5 3,118 849 Prepayments and other current assets 353 1,284 Due from related companies 20 4,653 27,719 Cash and cash equivalents 30,078 41,894 154,226 188,369 Total assets 358,119 402,819 EQUITY AND LIABILITIES CAPITAL AND RESERVES: Share capital 9 207,871 207,871 Reserves 10 68,714 66,915 276,585 274,786 NON-CURRENT LIABILITIES: Long-term bank borrowings 11 6,553 7,607 Due to original shareholders 1 14,754 14,754 21,307 22,361 CURRENT LIABILITIES: Trade and other payables 18,230 29,551 Short-term bank borrowings 11 38,847 72,321 Current portion of long-term bank borrowings 11 1,054 1,054 Due to related companies 20 994 647 Taxes payable 630 724 Provision for long service payments 12 472 1,375 60,227 105,672 Total equity and liabilities 385,119 402,819 VICTOR ONWARD TEXTILE INDUSTRIAL COMPANY LIMITED AND ITS SUBSIDIARIES CONSOLIDATED STATEMENT OF INCOME FOR THE YEAR ENDED DECEMBER 31, 2001 (Expressed in thousands of Hong Kong dollars except for earnings per share data) Note 2001 2000 Revenue 13 133,362 153,774 Cost of sales (118,898) (137,121) -8- .ANNUAL REPORT 2001（Summary） SHENZHEN VICTOR ONWARD TEXTILE INDUSTRIAL CO., LTD Gross profit 14,464 16,653 Distribution and selling expenses (6,462) (6,211) General and administration expenses (7,651) (7,054) Other operating income, net 2,404 1,052 Profit from operations 2,755 4,440 Finance cost ,net (965) (1,284) Income from associates 70 - Other income, net 14 328 2,346 Profit before tax 15 2,188 5,502 Income tax expense 16 (389) (327) Net profit 1,799 5,175 Dividends 17 - - Earnings per share - Basic 18 HKD 0.01 HKD 0.03 - Diluted N/A N/A VICTOR ONWARD TEXTILE INDUSTRIAL COMPANY LIMITED AND ITS SUBSIDIARIES CONSOLIDATED STATEMENT OF CASH FLOWS FOR THE YEAR ENDED DECEMBER 31, 2001 (Expressed in thousands of Hong Kong dollars) Note 2001 2000 CASH FLOWS FROM OPERATING ACTIVITIES: Cash generated from operations 19 5,377 16,315 Interest paid (3,221) (2,605) Income tax paid (377) (116) Net cash provided by operating activities 1,779 13,594 CASH FLOWS FROM INVESTING ACTIVITIES: Purchase of property, plant and equipment (9,026) (2,563) Acquisition of investments (16,835) (42,970) Proceeds from disposal of investments 25,993 5,695 Interest received 1,409 1,454 Net cash provided by (used in) investing activities 1,541 (38,384) CASH FLOWS FROM FINANCING ACTIVITIES: -9- .ANNUAL REPORT 2001（Summary） SHENZHEN VICTOR ONWARD TEXTILE INDUSTRIAL CO., LTD Decrease (increase) in pledged deposits 19,392 (19,392) Repayment of short-term bank borrowings (72,321) (2,606) Proceeds from short-term bank borrowings 38,847 54,532 Repayment of long-term bank borrowings (1,054) (1,294) Net cash (used in) provided by financing activities (15,136) 31,240 Net (decrease) increase in cash and cash equivalents (11,816) 6,450 Cash and cash equivalents at beginning of year 41,894 35,444 Cash and cash equivalents at end of year 19 30,078 41,894 - 10 -