大洋B1(420047)ST大洋Ｂ2002年年度报告（英文）

Shenzhen Great Ocean Shipping Co., Ltd. 2002 Annual Report Summary 1. Important Notes 1.1 Board of Directors of Shenzhen Great Ocean Shipping Co., Ltd. and its directors individually and collectively accept responsibility for the correctness, accuracy and completeness of the contents of this report and confirm that there are no material omissions nor errors which would render any statement misleading. The 2002 annual report summary is abstracted from the annual report; the investors are suggested to read the full text of annual report to understand more details. 1.2 No director stated that they couldn’t ensure the correctness, accuracy and completeness of the contents of the Annual Report or have objection for this report. 1.3 The whole directors attended the Board meeting. 1.4 Shenzhen Pengcheng Certified Public Accountants issued an Auditors’ Report with explanatory notes for the Company, to which and the Board of Directors and the Supervisory Committee made detailed explanations, the investors are suggested to read the content. 1.5 Chairman of the Board of the Company Mr. Lv Zhiyun, Chief Financial Supervisor Ms. Luo Xiaoqing and Person in charge of Accounting Ms. Luo Xiaoqing hereby confirm that the Financial Report of the Annual Report is true and complete. 2. Company Profile 2.1 Basic information Short form of the stock ST GREAT OCEAN - B Stock code 200057 Listed stock exchange Shenzhen Stock Exchange Registered address and office address Room 1805, Tower A, Electronics Tech. Bldg., Futian Dis., Shenzhen Post code 518031 Internet web site of the Company E-mail of the Company szdayang@ec-h.com 2.2 Contact person and method Secretary of the Board of Directors Name Yan Zhongyu Contact address Room 1805, Tower A, Electronics Tech. Bldg., Futian Dis., Shenzhen Telephone 0755-83780763 Fax 075583780771 E-mail yzy@vip.163.com 3. Summary of Accounting Data and Financial Indexes 3.1 Major accounting data (Unit: In RMB) Increase/decrease 2002 2001 2000 over last year（％） Income from core business - 0.00 Total profit -30,571,410.77 6,831,495.77 -547.51% -85,176,127.78 Net profit -30,571,410.77 6,831,495.77 -547.51% -85,176,127.78 Net profit after deducting -28,747,251.76 -20,193,229.02 - -35,695,838.45 non-recurring gains and losses Increase/decrease At the end of At the end of At the end of from the end of 2002 2001 2000 previous year（％） Total assets 93,306,051.14 115,413,856.14 -19.16% 105,075,027.00 Shareholder’s equity (excluding -89,943,972.32 -59,372,561.55 - -66,204,057.32 minority interests) Net cash flows arising from -24,282,471.09 -5,397,287.23 - -589,988.88 operating activities 3.2 Major financial indexes (Unit: In RMB) Increase/decrease over 2002 2001 2000 last year（％） Earnings per share -0.15 0.04 -540.00% -0.43 Earnings per share * -0.15 - - - Return on equity 33.99% -11.51% - 128.66% Return on equity as calculated based on net profit after deducting non-recurring gains 32.00% 34.01% -5.91% 53.92% and losses Net cash flows per share arising from -0.12 -0.03 - 0.00 operating activities Increase or decrease At the end At the end At the end from the end of of 2002 of 2001 of 2000 previous year（％） Net assets per share -0.45 -0.30 - -0.33 Net assets per share after adjustment -0.74 -0.68 - -0.67 3.3 Difference of net profit as audited by Chinese Accounting Standard (CAS) and International Accounting Standard (IAS) □Applicable √Inapplicable 4. Changes in Share Capital and Particulars about Shareholders 4.1 Statement of change in share capital (Unit: share) Increase / decrease in Before the change After the change this time (+, -) I. Unlisted shares 1. Promoters’ shares 118,800,000 0 118,800,000 Including: State-owned share 0 0 Domestic legal person’s shares 118,800,000 0 118,800,000 Foreign legal person’s shares 0 0 0 Others 0 0 2. Raised legal person’s shares 0 0 3. Inner employees’ shares 0 0 4. Preference shares or others 0 0 Total unlisted shares 118,800,000 0 118,800,000 II. Listed shares 1. RMB ordinary shares 0 0 2.Domestically listed foreign shares 79,200,000 0 79,200,000 3. Overseas listed foreign shares 0 0 4. Others 0 0 Total listed shares 79,200,000 0 79,200,000 III. Total shares 198,000,000 0 198,000,000 4.2 Statement of shares held by the top ten shareholders Total number of shareholders at the end of report year 8,980 Particulars about shares held by the top ten shareholders Number of Nature of Increase / Holding Type of shares share shareholders decrease in shares at Proportion Full name of Shareholders (Circulating/No pledged/ (State-owned the report the year-end (%) n-circulating) frozen shareholder/foreign year (share) (share) (share) shareholder) Jiangxi Jiangnan Trust and Investment Co., State-owned 0 43,023,256 21.73 Non-circulating 0 Ltd. shareholder Shenzhen E & Sea-gull Group Co., Ltd. State-owned -26,516,679 32,843,721 16.59 Non-circulating 32,843,721 shareholder Shenzhen Orient Xinda Investment Co., State-owned 26,516,679 26,516,679 13.39 Non-circulating 0 Ltd. shareholder Shenzhen Orient Jida Commerce Co., Ltd. State-owned 0 16,416,344 8.29 Non-circulating 0 shareholder Xie Yingjun 0 5,280,000 2.67 Circulating Unknown Foreign shareholder Ren Jun Development Co., Ltd. 22,500 2,180,000 1.10 Circulating Unknown Foreign shareholder Zhang Ting Jiang 0 1,980,000 1.00 Circulating Unknown Foreign shareholder Xu Jing Xin 1,398,849 1,398,849 0.71 Circulating Unknown Foreign shareholder Shanghai (Hong Kong) Wangguo 1,076,235 1,076,235 0.54 Circulating Unknown Foreign shareholder Securities Gu Qun 0 627,000 0.32 Circulating Unknown Foreign shareholder Explanation on associated Among the top ten shareholders as listed above, Shenzhen E & Sea-gull relationship among the top ten Group Co., Ltd. is the controlling shareholder of Shenzhen Orient Xinda shareholders or consistent action Investment Co., Ltd., so the first largest shareholder is actually Shenzhen E & Sea-gull Group Co., Ltd.. For the other shareholder, the Company is unknown whether there exists associated relationship. 4.3 Particulars about controlling shareholders and actual controller of the Company 4.3.1 Particulars about change in controlling shareholders and actual controller of the Company □Applicable √Inapplicable 4.3.2 Introduction of especial situation for controlling shareholder and other actual controller Shenzhen E & Sea-gull Group Co., Ltd. is the first largest shareholder of the Company, which was founded on Dec. 30, 1993. Its registered capital is RMB 88,600,000; legal representative is Wang Jie. Business scope: domestic business, supply and marketing of material, import and export business. 5. Particulars About Directors, Supervisors, Senior Executives 5.1 Particulars about changes in shares held by directors, supervisors and senior executives Holding Holding shares at Reason of Name Title Gender Age Office term shares at the the change year-end year-begin Dec. 16, 2001- Lv Zhiyun Chairman of the Board Male 31 0 0 Dec. 16, 2004 Dec. 16, 2001- Zeng Qingqun Director Male 34 0 0 Dec. 16, 2004 Director Dec. 16, 2001- Zhu Min Female 49 0 0 Dec. 16, 2004 Director Dec. 2, 2002- Xiong Yin Female 35 0 0 Dec. 2, 2005 Director Dec. 2, 2002- Wang Jiping Male 37 0 0 Dec. 2, 2005 Director Dec. 2, 2002- Yan Zhongyu Male 28 0 0 Dec. 2, 2005 May 16, 2001- Li Caimou Independent Director Female 56 0 0 May 16, 2004 May 16, 2001- Yang Caiqin Independent Director Female 46 0 0 May 16, 2004 Dec. 2, 2002- Liu Hongling Independent Director Female 47 0 0 Dec. 2, 2005 May 16, 2001- Yuan Jiucai Supervisor Male 59 0 0 May 16, 2004 May 18, 2001- Shen Xueqin Supervisor Male 40 0 0 May 18, 2004 May 18, 2001- Li Bin Supervisor Female 36 0 0 May 18, 2004 Dec. 16, 2001- Song Jie Supervisor Female 27 0 0 Dec. 16, 2004 Dec. 16, 2001- Hu Yinglu Supervisor Male 31 0 0 Dec. 16, 2004 Jun. 19, 2002- Luo Xiaoqing Chief Financial Supervisor Female 32 0 0 Jun. 19, 2003 5.2 Particulars about directors and supervisors holding the post in Shareholding Company √Applicable □Inapplicable Drawing the payment Title in Shareholding Name Name of Shareholding Company Office term from the Shareholding Company Company (Yes / No) Shenzhen E & Sea-gull Group Co., Jan. 1, 2003- Zeng Qingqun Vice-president No Ltd. Dec. 31,2003 Shenzhen E & Sea-gull Group Co. Vice-president, Chief Jan. 1, 2003- Xiong Yin No Ltd. Financial Supervisor Dec. 31,2003 Shenzhen E & Sea-gull Group Co. General Manager of Auto Jan. 1, 2003- Zhu Min No Ltd. Trade Dept. Dec. 31,2003 Shenzhen E & Sea-gull Group Co. Assistant of Chairman of Jan. 1, 2003- Wang Jiping No Ltd. the Board Dec. 31,2003 Shenzhen E & Sea-gull Group Co. Jan. 1, 2003- Song Jie Assistant president No Ltd. Dec. 31,2003 Shenzhen E & Sea-gull Group Co. Deputy General Manager Jan. 1, 2003- Li Bin No Ltd. of Dept. Dec. 31,2003 Shenzhen E & Sea-gull Group Co. Jan. 1, 2003- Yuan Jiucai Deputy General Manager No Ltd. Dec. 31,2003 Shenzhen E & Sea-gull Group Co. Jan. 1, 2003- Lv Zhiyun Director No Ltd. Dec. 31,2003 5.3 Particulars about the annual payment of directors, supervisors and senior executives Total annual payment RMB 212,000 Total annual payment of the top three directors RMB 146,000 drawing the highest payment Total annual payment of the top three senior RMB 195,000 executives drawing the highest payment Allowance of independent director RMB 20,000 per person/ year Other treatment of independent directors The Company reimbursed the reasonable charges (including allowances for a business trip and accommodation allowances) according to the actual situation, which independent directors attended the meeting of the Board, shareholders’ general meeting or exercise their functions and powers in accordance with the relevant regulations of Company Law and Articles of Association. Name of directors and supervisors receiving no Lv Zhiyun, Zeng Qingqun, Xiong Yin, Zhu Min, Wang payment or allowance from the Company Jiping, Yuan Jiucai, Song Jie and Li Bin Payment Number of persons RMB 30,000 ～ RMB 50,000 2 RMB 50,000 ～ RMB 90,000 2 6. Report of the Board of Directors 6.1 Discussion and analysis of the whole operation in the report period The Company is mainly engaged in container shipping along Hong Kong, Macao and short-range ocean lines and development of technology to grow vegetables, fruits and teas without pollution and relevant series products development. In the report period, the Company’s previous main business of ocean shipping was still suspended without any income. The Company continued the trusteeship of Shenye (Shenzhen) Industrial and Trading Co., Ltd and in the report period, realized income from trusteeship of RMB 1,465,391.26. The Company originally entrusted Shenzhen Shenye Jingzhao Trading Co., Ltd. to dispose agricultural and byproducts trade of the Company with Shenzhen Penggang City Investment Development Co., Ltd. and Shenzhen Jiasheng Industrial and Commercial Co., Ltd.. Due to the changes in the rice market, after agreed by the Company, on Oct.30, 2002, Jingzhao Company and Penggang City Company signed Release Agreement of Rice Market that the purchase and sales contract of rice signed on Jan.3, 2002 by the two parties stopped the implementation. On Aug.26, 2002, after examined and approved by the Board of Directors of the Company, the Company entrusted Shenzhen Shenye Jingzhao Trading Co., Ltd. to dispose the trade of raw materials among the Company, Shenzhen Penggang City Investment Development Co., Ltd. and Lida Knit Wears Manufacturer. According to the aforesaid agreements, the Company became the supplier of raw materials of Lida Knit Wears Manufacturer in 2003. Since the financial expense of the Company was comparatively high and the Company appropriated bad debts amounting to RMB 20,546,546.67 from the total amount of original accounts receivable to Shekou Great Ocean, Hong Kong Great Ocean Agent and GOSCO.LINE, as audited by Shenzhen Pengcheng Certified Public Accountants, the net profit of the Company in 2002 was RMB-30,571,410.77, which incurred a comparatively large loss. 6.2 Statement of core business classified according to industry or product Unit: RMB’0000 Classified Income Cost of Gross Increase/decre Increase/de- Increase/de according to from core core profit ase of income crease of crease of industry or business business ratio from core cost of core gross profit product (%) business business ratio compared compared compared with the with the with the previous year previous previous (%) year (%) year (%) Container 0.00 0.00 -- 0.00 0.00 0.00 shipping Including: 0.00 0.00 -- 0.00 0.00 0.00 amount of related transaction Rule of No pricing of related transaction Explanation No of necessity and durative of related transaction 6.3 Particulars about core business classified according to area Unit: RMB’0000 Area Income from core business Increase/decrease of income from core business compared with the previous year (%) 6.4 Particulars about the customers of purchase and sales Unit: RMB’0000 Total amount of purchase of 0.00 Proportion in the total 0.00% the top five suppliers amount of purchase Total amount of sales of the 0.00 Proportion in the total 0.00% top five sales customers amount of sales 6.5 Operation of share-holding companies (applicable to the situation of investment equity’s taking over 10% of net profit) □Applicable √Inapplicable 6.6 Explanation of reason of material change of core business and its structure □Applicable √Inapplicable 6.7 Explanation of reason of material change of profitability capability of core business (gross profit ratio) compared with the previous year □Applicable √Inapplicable 6.8 Analysis of reason of material change of operating results and profit structure compared with the previous year □Applicable √Inapplicable Analysis of reason of material change of the whole financial position compared with the previous year □Applicable √Inapplicable 6.9 Explanation of the past, current and future important effects of the material change of production and operation environment, macro-policies and regulations on the Company’s financial position and operating results □Applicable √Inapplicable 6.10 Completion of the profit estimation □Applicable √Inapplicable 6.11 Completion of the business plan □Applicable √Inapplicable 6.12 Application of the raised proceeds □Applicable √Inapplicable Particulars about the change projects □Applicable √Inapplicable 6.13 Application of the proceeds not raised through share offering □Applicable √Inapplicable 6.14 Explanation of the “Non-standardized Opinion” of Certified Public Accountants by the Board of Directors √Applicable □Inapplicable In 2002, the trusteeship business of the Company was in normal status. The Board of Directors and the Operating Management continued to keep the contact and communication with all major creditors and further negotiated on the plan of liabilities reorganization. Besides, the assets reorganization plan of the Company was under gestation. What’s more, the Company tried hard to seek profit origins from multi-sides with details as follows: the Company has been in the trusteeship of Shenye (Shenzhen) Indutrial and Trading Co., Ltd., an affiliated enterprise of Shenzhen E& Sea-gull Group Co., Ltd., which is the 1st largest shareholder of the Company and realized income of trusteeship expense amounting to RMB 1,465,391.26 in 2002. After studied and approved by the Board of Directors held on Aug.26, 2002, the Company made use of self-owned assets to entrust Shenzhen Shenye Jingzhao Trading Co., Ltd. to dispose the trade of raw materials of cotton yarn etc. among the Company, Lida Knit Wears Manufacturer and Shenzhen Penggang City Investment Development Co., Ltd.. The Company has been carried through talk on plan of liabilities reorganization with all major creditors, which established foundation for the next liabilities reorganization. Of which, after checked by Shekou Sub-branch of Shenzhen Development Bank, the Company’s guarantee responsibility of providing for the loan amounting to HKD 23 million of Wandelai Company was released. The Company is negotiating with relevant parties on the assets reorganization plan at present, shooting at accomplishing material assets reorganization of the Company in this year and recovering the core business and financing capability. We believe, after strived together by the Board of Directors, the Management and all staffs, along with the further pushing of reorganization work of liabilities and assets and other operating business, the Company is definite to smoothly realize the transformation of leading industry of the Company and recover the durative profitability capability of the Company. 6.15 Business plan as of the new year of the Board of Directors √Applicable □Inapplicable In the new year, the Company still shall seek energetic support of all shareholders, tried hard to push the progress of reorganization work of liabilities and assets and shoot at reaching liabilities reorganization agreement with all creditors. And based on this, to implement material assets reorganization work of the Company and push the transformation of core business and recovery of durative profitability capability of the Company so as to ensure the interests of all shareholders of the Company. Profit estimation of the new report year ·Applicable ·Inapplicable 6.16 The preplan of the profit distribution and capitalization of capital public reserve of the Board of Directors Neither to distribute profit nor to convert capital public reserve into share capital. 7. Significant Events 7.1 Purchase of assets □ Applicable √ Inapplicable 7.2 Sales of assets □ Applicable √ Inapplicable 7.3 Important guarantee √ Applicable □ Inapplicable Unit: RMB’0000 Date of happening Complete Guarantee for Name of the Company Amount of Guarantee (date of signing Guarantee type Implementation or related party or guaranteed guarantee term agreement) not not Joint June 10, Guangdong Maite Xinghua June 10, 1998 4,000.00 responsibility 1998-June 8, No No Pharmaceuticals Co., Ltd. guarantee 2000 Jan.17, Shenzhen Great Ocean Jan.7, 1997 2,628.83 Joint 1997-Nov.26, No No Investment Co., Ltd. 1997 Guangdong Taiyuan Sep.28, Information Industry Co., Sep.28, 1998 3,000.00 Joint 1998-Sep.28, No No Ltd. 1999 Tianjin Steamboat Industrial Dec.1, Development Group Co., Dec.1, 1998 230.00 Joint 1998-Dec.1, No No Ltd. 1998 Sep.21, Shenzhen Great Ocean Sep.21, 1996 827.81 Joint 1996-Sep.21, No No Container Co., Ltd. 1998 Total amount of guarantee 0.00 Total balance of guarantee 10,686.64 Including: Total balance of related guarantee 0.00 7.4 Current related credits and liabilities √ Applicable □ Inapplicable Provided capital to related Provided capital to listed companies Related parties parties by related parties Occurred Balance Occurred Balance Shenzhen E & Sea-gull 0.00 0.00 198.28 28.05 Industry Co., Ltd. Total 0.00 0.00 198.28 28.05 7.5 Entrusted financing □ Applicable √ Inapplicable 7.6 Implementation of projects committed □ Applicable √ Inapplicable 7.7 Significant lawsuit and arbitration √ Applicable □ Inapplicable 1. Dalian Container Wharf Co., Ltd. lodged a complaint to Dalian Marine Court on the port activity expense and late fee owed to it by the Company and Shenzhen Shekou Great Ocean Shipping Co., Ltd. on April 19 and requested Marine Court to judge the Company and Shenzhen Shekou Great Ocean to take joint responsibility. According to (2001) DHFSCZ No.368 and No.370 Civil Intermediation and (2001) DHFSCZ No.141 Civil Judgment promulgated by Dalian Marine Court on Dec.25, 2001, the Company and Dalian Container Wharf Co., Ltd. reached the following agreement: the Company paid activity expense amounting to RMB 300,000 to Dalian Container Wharf Co., Ltd. before Jan.31, 2002 and paid activity expense amounting to RMB 250,000 to Dalian Container Wharf Co., Ltd. before Feb. 28, 2002. The expense for accepting and hearing a case amounting to RMB 19,997 was undertaken by Dalian Container Wharf Co., Ltd.. If the Company could not pay the aforesaid payments to Dalian Container Wharf Co., Ltd. on time, the Company also should pay the interests of the aforesaid payments from April 1, 1999 to the actual paying date according to the standard of calculation of overdue loan interests of financial organizations promulgated by People’s Bank of China. Dalian Container Wharf Co., Ltd. gave up all the other requests on the ship activity expense of “Jinpeng” steamboat and “Weikang” steamboat and withdrew the prosecution to the Company. In Oct. 2002, the Company paid RMB 30,000. Ended Dec.31, 2002, there was RMB 520,000 still not paid. 2. On June 3, 2002, Guangdong Zengcheng People’s Court accepted and heard the case of construction contract dispute of construction project appealed to the Company by Heilongjiang Kenqu Longken Construction Engineering Corporation. The accuser appealed and requested the Company to pay engineering account of RMB 1,628,915.39, compensation expense in the shutdown period of RMB 148,449.16 and penalty funds of overdue payment of RMB 191,955.37, which all totally amounted to RMB 1,969,319.92. On June 26, 2002, Zengcheng People’s Court opened the court and heard this case and the Company appeared in court and submitted the answer letter. On Aug.26, 2002, the Company received (2002) ZFMCZ No.1482 Civil Judgment that judged the Company to pay RMB 1,777,364.55 and penalty funds of overdue payment, which was calculated as per 0.02% per day from May 31, 2002 to the date of payment clearing, to Heilongjiang Kenqu Longken Construction Engineering Corporation within 15 days from the date of receiving the Judgment. Ended Dec.31, 2002, the Company still did not pay the aforesaid payments. On Dec.31, 2002, the Company confirmed a liability amounting to RMB 1,777,364.55 for this and at the same time reckoned in the item of “non-business income and expenditure” of the Company. 3. On May 27, 1998, the Company lodged a complaint to PRC Tianjin Marine Court on the issue that Hebei Baoding Light Textile Import and Export Company owed shipping expense amounting to USD 15,960.00 (converting to RMB 132,105.71) to the Company. On Nov.17, 1998, after judged by Tianjin Marine Court with JHFSCPZ No. 164 Civil Judgment, Hebei Baoding Light Textile Import and Export Company should repay the aforesaid arrearage shipping expense and interest. Ended Dec.31, 2002, the Company still did not receive the aforesaid payments. 4. On June 2, 1998, the Company lodged a complaint to PRC Tianjin Marine Court on the issue that Hebei Cangzhou Yanfeng Import and Export Co., Ltd. (hereinafter referred to “Yanfeng Company”) owed shipping expense amounting to RMB 399,743.00 to the Company. On May 25, 1999, after mediated by Tianjin Marine Court (1998) JHFBSTZ No.222 Civil Intermediation, Yanfeng Company agreed to repay RMB 100,000.00 to the Company before June 10, 1999 and repay RMB 219,743.00 before July 30, 1999. Ended Dec.31, 2002, the Company still did not receive the aforesaid payments. 5. Since the Company could not repay the loan amounting to RMB 15,000,000.00 to Shekou Sub-branch, Shenzhen Branch, Bank of China, after mediated by Guangdong Shenzhen Intermediate People’s Court with (1998) SZFJTCZ No.638 Civil Intermediation, the Company should repay the interests and penalty interests ended Nov.21, 1998 of Shekou Sub-branch, Shenzhen Branch, Bank of China before Dec.20, 1998 and repay the principal amounting to HKD 15,000,000.00 (converting to RMB 15,916,500.00) and overdue interests before March 31, 1999. Shenzhen Wandelai Communication Equipments Co., Ltd. (hereinafter referred to as “Wandelai Company”), the guarantee party, should take the joint recovery responsibility. On April 16, 2000, since the Company and Wandelai Company had no assets that could be implemented, Shenzhen Intermediate People’s Court made known to lower levels (1999) SZFZZ No.15-519 Civil Judgment and stopped implementing the former No.638 Civil Intermediation. Ended Dec.31, 2002, the Company still did not repay the aforesaid loan principal and overdue interests and penalty interests. 6. On Oct. 31, 1997, the Company signed Loan Agreement with Zhongjingkai Company. The Company borrowed funds of RMB 25,000,000.00 from Zhongjingkai Company with the annual interest rate of 18% and the Company should repay loan principal and interest once on Dec.31, 1997. Since this borrow funds has not been transferred into the account of the Company and was remitted directly to Changjiang Co. Ltd. by Zhongjingkai Company, thus the Company did not carry through accounting disposal to this loan and corresponding credit in 1997. In 1998, the Company complementarily reckoned this loan and corresponding credit into the accountant as per the aforesaid loan agreement. In 1998, the Company signed Transfer Agreement of Credit and Liability with Changjiang Co., Ltd. and China Huadian Real Estate Company (hereinafter referred to as “Huadian Real Estate Company”). The original funds of RMB 25,000,000.00 remitted to Changjiang Co., Ltd. by Zhongjingkai Company was undertaken by Huadian Real Estate Company and the credit of the Company receivable from Changjiang Co., Ltd. was changed into credit receivable from Huadian Real Estate Company. Ended Dec.31, 2002, the Company still did not receive the aforesaid funds. Since the Company did not repay the loan of RMB 25,000,000.00, Zhongjingkai Company thus lodged a complaint to Guangdong Shenzhen Intermediate People’s Court. On March 9, 1999, after judged by Guangdong Shenzhen Intermediate People’s Court with (1999) SZFJYCZ No.24 Civil Judgment, the Company should repay the loan principal amounting to RMB 25,000,000.00 to Zhongjingkai Company and the interests was calculated as per the floating rate of loan of the same period of People’s Bank of China with the interest term from Nov.8, 1997 to the date of clearing the owed payments. Simultaneously, since the debit and credit action between the Company and Zhongjingkai Company was against the state law and relevant regulations of financial management, the Court judged penalty payments amounting to RMB 100,000.00 respectively to both parties of the case. Ended Dec.31, 2002, the Company still did not repay the loan principal and interests owing to the Zhongjingkai Company. 7. On March 29, 1999, due to the loan dispute case between the Company and Nantou Sub-branch, Shenzhen Development Bank, Shenzhen Nanshan People’s Court judged the Company to repay loan principal of USD 800,000.00 (converting to RMB 6,621,840.00) and its interests (of which the interest from Oct.30, 1998 to April 26, 1999 was calculated as per 0.04% and that from April 27, 1999 to the date of repayment confirmed in this judgment was calculated as per 0.03%) to the accuser within 10 days from the effective date of this judgment. Shekou Great Ocean took the joint recovery responsibility as the guarator. On Nov.4, 1999, Shenzhen Nanshan People’s Court sealed up the property right of partial real estate of the Company in Tianjin with (1999) SNFZZ No.380 Civil Judgment (for details, please refer to Notes VI 5(2)). On Dec.23, 1999, Shenzhen Nanshan People’s Court judged and publicly sold Audi Car (YB12115) of the Company with SNFZ (1999) No.1-380 Civil Judgment with the auction amount of RMB 70,000.00. On Dec.29, 1999, Shenzhen Nanshan People’s Court judged and publicly sold Mitsubishi Jeep (YB54709) with SNFZ (1999) No.1-380 Civil Judgment with the auction amount of RMB 25,000.00. On Aug.25, 2000, Shenzhen Nanshan People’s Court judged and publicly sold the real property (original real property no.06578) of the Company of Unit A, B, L and M amounting to an area of 351 sq. m. in 15/F, Liyuan Building, No.16, Mingze Street, Zhongshan District, Dalian with SNFZ (1999) No.1-380 Civil Judgment with the net amount of auction of RMB 1,242,885.00. Shenzhen Development Bank Nantou Sub-branch received the implementation amount of RMB 1,328,885.00 under the case of SNFZ (1999) No.1-380 from Shenzhen Nanshan People’s Court in 2000. Ended Dec.31, 2002, the Company still did not repay the aforesaid loan. 8. On May 4, 1999, due to the dispute case of loan contract between the Company and Shenzhen Branch of French Industrial Bank, Guangdong Shenzhen Intermediate People’s Court judged the Company to repay the overdue loan amounting to USD 2,000,000.00 (converting to RMB 16,554,600.00) and overdue interest (the interest was calculated as per the most preferential interest rate of native interest of London Trade Market adding the 2.5% of the annual interest and the interest calculation time was from Jan.12, 1999 to the effective date of Judgment) to French Industrial Bank with (1999) SZFJECZ No.61 Civil Judgment. Ended Dec.31, 2002, the Company still did not repay the aforesaid payments. 9. On April 6, 1999, due to the dispute of damage compensation of shipping goods between Tianjin Branch of the Company and Guangzhou Yuexiu Enterprise (Group) Company (hereinafter referred to as “Yuexiu Company”), Tianjin Marine Court judged the Company to repay maintenance expense amounting to HKD 119,800.00 (converting to RMB 127,119.78) to Yuexiu Company with (1998) JHFGCPZ No.198 Civil Judgment and the interest was calculated as per 0.05% per day from July 30, 1997 to the effective date of judgment. On April 28, 1999, the Company appealed to Tianjin Higher People’s Court. The Company thought the law adopted by Tianjin Marine Court in the judgment was not reasonable and the body of the accuser was wrong, thus requested the 2nd trial court rejected the 1st trial judgment according to the law and changed to judge that the Company would not undertake any compensation responsibility. On Jan.10, 2000, Tianjin Higher People’s Court mediated that the Company should compensate and pay the damage of people and goods of amounting to HKD 40,000.00 to Yuexiu Company with (1999) GJZZ No.166 Civil Judgment and this payment should be all cleared up at the end of Feb.2000. On Dec.31, 2000, the Company confirmed a liability for this amounting to HKD 40,000.00 (converting to RMB 42,444.00). Ended Dec.31, 2002, the Company still did not pay the aforesaid payments. 10. On Nov.24, 1998, due to the issue of damage happened by the Company’s taking the shipping of its goods, Yanfeng Company lodged a complaint to PRC Tianjin Marine Court and requested to get a compensation amounting to USD 120,816.30 and RMB 47,833.81, which all converted to RMB 1,047,871.53. Ended Dec.31, 2002, the Company did not receive relevant judgment. 11.On July 29, 1999, concerning the lawsuit of loan contract between the Company and Shenzhen Commercial Bank Nanshan Sub-branch (initial Shenzhen Municipal Cooperation Commercial Bank Nanshan Sub-branch, Shenzhen Intermediate People’s Court judged the Company to repay RMB 4,000,000.00 debt and its interest owed to the accuser with 15 days since the effect of the judgement through (1999) SZFJTCZI NO.356 Civil Judgement. (The interest is calculated according to contract in the term of the contract and the overdue interest is calculated as the interest rate of overdue loan of the same period regulated by China People’s Bank. The interest term is from the date of owing interest to the date of repaying). The debt interest in term of implementing lingeringly is paid two times if overdue. Ended as of Dec.31, 2001, the Company has not repaid the aforesaid debts. 12.On June 10, June 29, July 29, 1998, Agricultural Bank of China Guangzhou Taojin Sub-branch, Guangdong Maite Xinghua Pharmaceuticals Co., Ltd. signed Guarantee Loan Contract with the Company. The Company provided nonreversible guarantee for RMB 40,000,000.00 loan in Loan Contract signed by Agricultural Bank of China Guangzhou Taojin Sub-branch and Guangdong Maite Xinghua Pharmaceuticals Co., Ltd with the term of June 10, 1998 to June 8, 2000. Because Guangdong Maite Xinghua Pharmaceuticals Co., Ltd. did not repay the principal and interest in stipulated time, Agricultural Bank of China Guangzhou Taojin Sub-branch indicted to Guangzhou Intermediate People’s Court on Nov.7, 2000. On June 14, 2001, the Company received civil judgement of Guangzhou Intermediate People’s Court, which judged Guangdong Maite Xinghua Pharmaceuticals Co., Ltd. to repay the aforesaid debt and punishment interest and the Company to take joint liability. Ended as of Dec.31, 2002, Guangdong Maite Xinghua Pharmaceuticals Co., Ltd. has not repaid the aforesaid debts. 13.On Jan.17, 1997, Shenzhen Great Ocean Investment Co., Ltd. (hereinafter referred to as Great Ocean Investment) signed Temporary Line of Credit Contract with China Construction Bank Shenzhen Branch Shangbu Sub-branch (hereinafter referred to as Construction Bank Shangbu Sub-branch), which gave Great Ocean Investment temporary T/R acceptance limit amounting to USD 3,600,000.00. The Company issued a nonreversible guarantee to Construction Bank Shangbu Sub-branch for the aforesaid contract of Great Ocean Investment). From July 14, 1997 to Nov.17, 1997, Construction Bank Shangbu Sub-branch advanced USD 3,600,000.00 L/C to Great Ocean Investment. Due to the default on the aforesaid debt by Great Ocean Investment, Construction Bank Shangbu Sub-branch indicted to Shenzhen Intermediate People’s Court. On Dec.3, 1998, Shenzhen Intermediate People’s Court judged Great Ocean Investment to repay USD 3,600,000.00 principal of advance payment and corresponding interest and the Company to take joint repayment liability through (1998) SZFJYCZI NO.128 Civil Judgement. On Jan.8, 1999, the Company indicted to Guangdong Provincial High People’s Court. The Company believed that the register for establishment and loan were involved in illegal actions and appealed the 2nd trial court to inspect comprehensively relevant witnesses, find relevant facts, relieve the initial trial and transfer the lawsuit to police authorities with domination right. On Nov.26, 1999, Guangdong Provincial High People’s Court judged the Company to take joint repayment liability of USD 3,600,000.00 debt of Great Ocean Investment advanced by Construction Bank Shangbu Sub-branch and payment for breaching the faith through (1999) YFJEZZI NO209. On Sep.12, 2000, the Company applied for retrial to Guangdong Provincial High People’s Court. On Dec.11, 2001, Guangdong Provincial High People’s Court released (2000) YGFSJJSZI NO.242 Notification and rejected the retrial application of the Company. On Apr.19, 2000, the Company submitted a report to Shenzhen Public Security Bureau to apply for putting on record and investigating. Due to the aforesaid events, on Oct.19, 2000, the rest house of the Company locating in 75 Building, Nanyou B District with net assets of RMB 1,197,284.65 was sold publicly in an obliged way, the price of the public sale was RMB 950,000.00. On Jan.12, 2001, the houses for office of the Company locating in 11/F, New Resource Building, Nanyou Avenue, Nanshan District with net amount of RMB 3,858,689.24 was sold publicly in an obliged way by Shenzhen Intermediate People’s Court. The price of the public sale was RMB 2,560,000.00. Ended as of Dec.31, 2000, the Company affirmed RMB 28,851,160.00 liabilities. Ended as of Dec.31, 2002, the Company affirmed RMB 26,288,280.00 liabilities. Ended as of Dec.31, 2002, Great Ocean Investment has not repaid the aforesaid debts. 14. As agreed by the Board of Directors of the Company, the Company signed Contract of Guarantee for Loan with Bank of Communication Guangzhou Branch on Sep.28, 1998. The Company provided nonreversible credit guarantee for RMB 30,000,000.00 loan of Taiyuan Information Company from Bank of Communication Guangzhou Branch. Meanwhile, Taiyuan Information Company lent RMB 10,000,000.00 among of the aforesaid loan to the Company with the term of one year. Because Taiyuan Information Company did not repay the principal and interest of the aforesaid loan, Bank of Communication Guangzhou Branch indicted to Guangdong Provincial Guangzhou Municipal Intermediate People’s Court. On May 26, 2000, Guangzhou Municipal Intermediate People’s Court judged Taiyuan Information Company to repay RMB 30,000,000.00 principal and punished interest to Bank of Communication Guangzhou Branch within 10 days since the effectiveness date of the judgement and the Company to take joint repayment liabilities through (2000) SZFJCZI NO.122 & NO.123. Ended as of Dec.31, 2000, the Company affirmed one liabilities amounting to RMB 6,000,000.00. Ended as of Dec.31, 2002, Taiyuan Information Company has not repaid the aforesaid amount yet. 15.The Company provided pledge guarantee for RMB 2,300,000.00 bank loan of Tianchuan Company as the office building of Tianjin Filiale. 16.Because the Company owed several fees including port loading and unloading fees to Dongfang Company, it signed Contract of Pledge Guarantee with Dongfang Company on Feb.12, 1999 and promised to repay 70% of the debt before June 1, 1999 and all debt before July 1, 1999 and used the houses equaling to the balance after deducting the pledged houses amounting to RMB 2,300,000.00 among of the real estate which located in No.59, Shenyang Avenue, Heping District, Tianjin (the office building of Tianjin Filiale of the Company. On Dec.7, 1999, Dongfang Company indicted to Tianjin Admiralty Court and required the Company to repay the debt. On Jan.4, 2000, Tianjin Admiralty Court judged to seal up all A & B Office Building, which located in Kangleli, Gansu Rd, Heping District, Tianjin with land No. ZEZI 1/1025 and house property certification No.98JHGZI0004 and other equivalent assets through (1999) JHFSBZI NO.849-1 Civil Judgement. On July 5, 2000, Tianjin Admiralty Court noticed the Company to repay RMB 4,311,726.00 debt and interest owed to Dongfang Company within 10 days and otherwise to be put teeth according to laws through (2000) HFZTZI NO.1281 Execution Notification. Ended as of Dec.31, 2002, the Company has not repaid the aforesaid expense yet. 17.On June 12, 1999, due to the lawsuit of loan contract dissension between Container Co., Ltd. and Shenzhen Development Bank Longgang Sub-branch, Shenzhen Municipal Longgang District People’s Court judged Container Co., Ltd. to repay USD 1,000,000.00 principal (converted into RMB 8,277,300.00) and interest (calculated as the loan interest rate of the People’s Bank of China in the same period from Sep.21, 1998 to the repayment date) within 10 days since the effectiveness date of the contract through (1999) LFJCZI NO.163 and the Company to take joint repayment liability. Ended as of Dec.31, 2000, the Company affirmed one liability amounting to USD 1,000,000.00 (converted into RMB 8,277,300.00). Ended as of Dec.31, 2002, Container Co., Ltd. has not repaid the aforesaid amount. 18.According to Liabilities Affirmance Contract among Great Ocean Agency Company, Hong Kong Chenggong Port Co., Ltd. (hereinafter referred to as Hong Kong Chenggong Port Co., Ltd.) and the Company, the 1st Order Shipping Pledge Contract signed by the Company and Hong Kong Chenggong Port and Debt Certification, the Company ensured Great Ocean Agency Company as the shipping agency of the Company in Hong Kong, to undertake the final responsibility concerning the agreement of use and service of the port equipment signed by Great Ocean Agency Company and Hong Kong Chenggong Port and all expenses and liabilities from it and take charge of repaying port operation expense Great Ocean Agency Company owed to Hong Kong Chenggong Port ended as of May 31, 1998 amounting to HKD 16,017,502.40 and converting into RMB 16,996,171.80. The Company actually paid the aforesaid port operation expense amounting to RMB 6,000,000.00 in 1999. On Dec.1, 1999, Wuhan Admiralty Court judged to bid the container ship “Jinpeng” through (1999) WHFZZZ NO.74 Civil Judgement and the amount of the bid was RMB 5,500,000.00. On Dec.18, 2000, the Company repaid to relevant creditors according to the allotment result of liabilities repayment judged by (2000) WHFZZI NO.263 of Wuhan Admiralty Court. The repayment amount of Hong Kong Chenggong Port was RMB 811,034.50. On Apr.11, 2000, Tianjin Admiralty Court judged to bid the container ship “Jinpeng” through (2000) HSCZI NO.107-2 Civil Judgement and the amount of bid was RMB 5,000,000.00. The Company has offset part port operation fee of Hong Kong Chenggong Port from the bid amount. Ended as of Dec.31, 2002, the Company still owed port operation fee amounting to HKD 4,927,394.34 to Hong Kong Chenggong Port and converting into RMB 5,228,458.13. 19.On June 30, 2001, Tianjin High People’s Court judged the Company to repay RMB 600,000.00 to liquidation team of Tianjin Shipbuilding Company after the effectiveness of the judgement through (2000)GJPCZI NO.2-9-8 Civil Judgement on the lawsuit of the Company’s defaulting the ship’s repair expense of the bankrupted enterprise, Tianjin Shipbuilding Company. On Dec.19, 2001, the Company paid liquidation team of Tianjin Shipbuilding Company RMB 15,000.00. The Company still owed RMB 585,000.00 ship’s repair expense to liquidation team of Tianjin Shipbuilding Company. On Apr.17, 2002, the Company signed Pacification Agreement of Debt’s Repayment with Tianjin New Port Ship Factory (the 2nd name of Tianjin Shipbuilding Company). Because the Company defaulted RMB 600,000 repair expense of Jinlu Vessel of Tianjin New Port Ship Factory, by many negotiations, Tianjin New Port Ship Factory agreed to decrease part debt of the Company and the Company to repay RMB 200,000. After this, the credit and liabilities would be finished and other items would not be run each other. The Company should repay the aforesaid amount to Tianjin New Port Ship Factory for one time before Sep.30, 2002. Ended as of Dec.31, 2002, the Company has not repaid the aforesaid expense yet. 7.8 Particulars about the performance of obligations of Independent Directors On Dec.2, 2002, as examined and approved by the 1st Extraordinary Shareholder’s General Meeting of 200, Liu Honglin was elected as the independent directors of the Company. So far, the Company has 3 independent directors reaching one third of the number of the Board of Directors of the Copmany. Independent directors, Ms. Li Caimou, Ms. Yang Caiqin and Ms. Liu Honglin attended the Board of Directors and the Shareholders’ General Meeting of the Company in 2002 and played an active role in the respect of protecting the interest of the whole company and the legal interest and right of the medium and small shareholders. 8.Report of the Supervisory Committee (I) The Company totally held 3 meetings of the Supervisory Committee in the report period with details as follows: 1.On Apr.11, 2002, the Supervisory Committee of the Company held the meeting, which examined and approved the following resolutions” ① Examined and approved 2001 Auditor’s Report of the Company ② Examined and approved 2001 Work Report of the Supervisory Committee ③ Examined and approved 2001 Annual Report and Summary ④ Examined and approved other proposals submitted to 2001 Shareholders’ General Meeting for approval and other documents. 2.On Aug.12, 2002, the Supervisory Committee of the Company held the meeting, which examined and approved the following resolutions” ① Examined and approved 2002 Semi Annual Report and Summary ② Examined and approved 2002 Semi Annual Profit Distribution Proposal put forward by the Board of Directors (II) The Supervisory Committee expressed independent opinions on the following events” 1.According to laws, regulations and Articles of Association, the Supervisory Committee supervised over the procedure of holding, discussion and decision of the Shareholders’ General Meeting and the Board of Directors and implementation of the resolutions of Shareholders’ General Meeting by the Board of Directors and the management and believed that the Board of Directors and the management worked in an honest and diligent way, implemented effectively and actually every resolution of the Shareholders’ General Meeting. The procedure of decision-making was in conformity with the relevant regulations. The Company established more consummated internal control system. The directors and the senior executives of the Company had no actions of breaking laws and regulations and Articles of Association or harming for the interest of the Company. 2.2002 auditor’s report issued by Shenzhen Pengcheng Certified Public Accountants for the Company reflected actually the actual financing status and operation result. 3.The related transactions of the Company were fair and reasonable and did not harm for the interest of the listed company. 4.The Supervisory Committee expressed independent opinions on the explanation of the auditor’s report with explanation of the Board of Directors: The Supervisory Committee believed that the explanation of the auditor’s report with explanation of the Board of Directors reflected the operation of the Company since 2002 and pointed direction for the next work emphasis of the Company. The Supervisory Committee will urge the Board of Directors and the management to push actively the reorganization work of the Company’s liabilities and assets and other operation businesses in order to ensure the Company realizing the type-changing of the main industry of the Company and resume the ability of the consistent earning. 9. Financial Report 9.1 Auditors’ Report AUDITORS’ REPORT SPSGSZ [2003] No. 50 TO THE SHAREHOLDERS OF GREAT OCEAN SHIPPING CO., LTD.: Under the entrustment of Great Ocean Shipping Co., Ltd. (the “Company”), We have audited the accompanying consolidated balance sheet of and the Company and the subsidiaries (the “Group”) as of December 31, 2002, and the consolidated profit and profit distribution statement for the year ended 2002 and the consolidated cash flow statements for the year ended 2002.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 audits in compliance with Independent Auditing Standards for Chinese Certified Public Accountants. In our opinion, the consolidated financial statements comply with the relevant regulations in Enterprise Accounting Standards and Enterprise Accounting Regulations; present fairly, in all material respects, the financial position of the Group as of December 31, 2002 and 2002, and the results of its operations and its cash flows for the years then ended. The continuous principal is adopted in the accounting. We noticed that: the Company’s principal business, shipping business, was in suspension presently and the owned overdue liabilities unpaid. With a view to improving the said situation, the Company was engaged in the trade of raw material such as cotton yarn by means of entrustment, etc.; and is negotiating with major creditors for the liabilities reorganization. Under the environment as stated above, the Company made necessary adjustment on its financial statements in terms of assets, liabilities and classification take into consideration the discontinuous operation. Shenzhen Pecheng Certified Public Accountants CPA: Wang Lei Certified Public Accountants CPA: Zhang Keli Shenzhen, PRC April 16, 2003 Note: 1. The Company’s principal business, shipping business, was in suspension presently and the owned overdue liabilities unpaid, the Company made necessary adjustment on its financial statements in terms of assets, liabilities and classification take into consideration the discontinuous operation; meanwhile, the Company implemented the following measure: (1) As stated in Note 6.4 (1), the Company entrusted Jingzhao Company to deal with raw material such as cotton yarn among the Company, Penggangcheng Company and Lida Company. Ended Dec. 31, 2002, the Company prepaid payment for goods amounting to RMB 28,703,778.00 to Penggangcheng Company. (2) The Company is negotiating with major creditors on the liabilities reorganization. 9.2 Financial statement Balance Sheet Shenzhen Great Ocean Shipping Co., Ltd. Unit: RMB Dec. 31, 2002 Dec. 31, 2001 Items Consolidation Parent Company Consolidation Parent Company Current assets: Monetary funds 53,080.85 13,210,313.94 Short-term investment Notes receivable Dividend receivable Interests receivable Account receivable 3,428,542.48 14,271,670.99 Other account receivable 53,502,308.44 79,803,034.80 Accounts prepaid 28,712,284.00 8,506.00 Subsidy receivable Inventories Expenses to be apportioned Long-term credit investments due within 1 year Other current assets Total current assets 85,696,215.77 107,293,525.73 Long-term investment: Long-term equity investment Long-term credit investment Total of long-term investment Including: consolidated price difference Fixed assets: Fixed assets, original 19,845,199.36 19,779,271.36 Less: accumulated depreciation 6,852,421.65 6,318,015.53 Fixed assets, net 12,992,777.71 13,461,255.83 Less: provisions for devaluation 5,387,719.88 5,340,925.42 of fixed assets Net fixed assets 7,605,057.83 8,120,330.41 Engineering material Construction in progress Disposal of fixed assets Total fixed assets 7,605,057.83 8,120,330.41 Intangible assets and other assets: Intangible assets Long-term expenses to be 4,777.54 apportioned Other long-term assets Total intangible assets and other 4,777.54 assets Deferred taxes: Deferred taxes-borrowings Total assets 93,306,051.14 115,413,856.14 Current liabilities: Short-term loans 80,392,940.00 80,396,510.00 Notes payable Accounts payable 9,886,057.08 9,666,152.72 Accounts received in advance Accrued payroll 206,652.34 181,724.50 Welfare funds payable 405,506.12 405,506.12 Dividend payable Taxes payable 1,729,756.49 1,620,434.85 Other duties payables Other accounts payables 19,081,751.18 18,779,375.46 Accrued expenses 29,161,971.70 23,131,275.38 Projected liabilities 42,385,388.55 40,605,438.66 Long-term liabilities due within 1 year Other current liabilities Total current liabilities 183,250,023.46 174,786,417.69 Long-term liabilities: Long-term loans Bonds payable Long-term accounts payable Special accounts payable Other long-term liabilities Total long-term liabilities Deferred taxes: Deferred taxes-credit item Total liabilities 183,250,023.46 174,786,417.69 Minority interests Owner’s equity (Shareholders’ equity) Paid-in capital (Share capital) 198,000,000.00 198,000,000.00 Less: Returned investment Paid-in capital (Share capital), net 198,000,000.00 198,000,000.00 Capital public reserve 70,224,836.90 70,224,836.90 Surplus public reserve 12,593,573.49 12,593,573.49 Including: statutory public welfare 4,197,857.83 4,197,857.83 funds Retained profit -370,762,382.71 -340,190,971.94 Translation balance difference Total owner’s equity (shareholders’ -89,943,972.32 -59,372,561.55 equity) Total liabilities and owner’s equity 93,306,051.14 115,413,856.14 (shareholders’ equity) Shenzhen Great Ocean Shipping Co., Ltd. I. Consolidated Profit and Profit Distribution Statement As of the year 2002 Unit: RMB Year 2002 Year 2001 Items Consolidation Parent Company Consolidation Parent Company I. Income from core business Less: Cost of core business 0.00 0.00 Taxes and extras of core business II. Profit from core business (Loss “-”) 0.00 0.00 Add: Profit from other business (Loss “-”) 1,465,391.26 406,335.47 Less: Operating expenses 236,874.00 600,000.00 Administrative expenses 23,829,364.43 13,846,874.01 Financial expenses 6,146,404.59 6,152,690.48 III. Operating profit (Loss “-”) -28,747,251.76 -20,193,229.02 Add: Investment income (Loss “-”) 29,351,900.00 Subsidy income Income from non-operating Less: Expenses of non-operating 1,824,159.01 2,327,175.21 IV. Total Profit (Loss “-”) -30,571,410.77 6,831,495.77 Less: Income taxes Minority shareholders’ gains and losses V. Net profit (Loss “-”) -30,571,410.77 6,831,495.77 Add: Retained profit at the year-begin -340,190,971.94 -347,022,467.71 Other transferring into VI. Profit available for distribution -370,762,382.71 -340,190,971.94 Less: Allotted statutory surplus public reserve Allotted statutory public welfare fund Allotted employees’ reward and welfare fund Allotted reserve fund Allotted enterprise development fund Profit restored to investment VII. Profit available for distribution to -370,762,382.71 -340,190,971.94 investor Less: Dividend of preference share payment Allotted arbitrary surplus public reserve Dividend of ordinary share payment Dividend of ordinary share transferred as capital (or share capital) VIII. Retained profit -370,762,382.71 -340,190,971.94 Supplementary information: 1. Income from disposal of subsidiaries or 29,351,900.00 investees 2. Losses of natural disaster 3. Increase (decrease) in total profit due to -905,538.93 changes in accounting policy 4. Increase (decrease) in total profit due to changes in accounting estimation 5. Losses of debts reorganization 6. Others Shenzhen Great Ocean Shipping Co., Ltd. II. Consolidated Cash Flow Statement As of the year 2002 2002 Items Consolidation Parent Company I. Cash flows arising from operating activities: Cash receivable from selling commodities and providing labor services Drawback of taxes receivable Other cash received in connection with the operating activities 7,943,879.45 Subtotal of cash inflows 7,943,879.45 Cash paid for commodities and labor services 28,703,778.00 Cash paid to/for staff and workers 421,084.94 Various taxes paid Other cash paid in connection with operating activities 3,101,487.60 Subtotal of cash outflows 32,226,350.54 Net cash flows arising from operating activities -24,282,471.09 II. Cash flows arising from investment activities: Cash received from recovery of investment 11,125,238.00 Cash received from investment income Net cash received from proposal of fixed, intangible and other long-term assets Other cash received in connection with investment activities Subtotal of cash inflows 11,125,238.00 Cash paid for purchasing fixed, intangible and other long-term assets Cash paid for investment Other cash paid in connection with investment activities Subtotal of cash outflows 0.00 Net cash flows arising from investment activities 11,125,238.00 III. Cash flows arising from financing activities: Cash received by absorbing investment Cash received from loans Other cash received in connection with financing activities Subtotal of cash inflows Cash paid for settling debts Cash paid for distribution of dividend, profit or interest repaying Other cash paid in connection with financing activities Subtotal of cash outflows Net cash flows arising from financing activities IV. Influences on cash from fluctuation in exchange rate V. Net increase in cash and cash equivalents -13,157,233.09 Supplementary information: 1. Adjusting net profit into cash flow for operating activities Net profit -30,571,410.77 Add: Withdrawal of provision for devaluation of assets 21,178,703.82 Depreciation of fixed assets 534,406.12 Amortization of intangible assets Amortization of long-term expenses to be apportioned 1,592.46 Decrease (less: increase) of expenses to be apportioned Increase (less: decrease) of accrued expenses 6,030,696.32 Losses on proposal of fixed, intangible and other long-term assets (Less: income) Losses on rejection of fixed assets Financial expenses Investment losses (Less: income) Deferred taxes-credit item Decrease of inventory (less: increase) Decrease of receivables in operation (Less: increase) -23,817,070.49 Increase of payable in operation (Less: decrease) 2,360,611.45 Others Income of minority shareholders Net cash flow arising from operating activities -24,282,471.09 2. Investment and financing activities involving no cash incoming or outgoing: Debts transferred as capital The Company’s transferable bonds within 1 year Renting fixed assets for financing purpose 3. Net increase in cash and cash equivalents Balance of cash at the year-end 53,080.85 Less: Balance of cash at the year-begin 13,210,313.94 Add: Balance of cash and cash equivalents at the year-end Less: Balance of cash and cash equivalents at the year-begin Net increase in cash and cash equivalents -13,157,233.09 9.3 There were no changes in the accounting policies, calculation method compared with the latest annual report. 9.4 The consolidation scope of financial statement remained unchanged compared with the latest annual report.