南玻Ａ(000012)南玻Ｂ2003年年度报告摘要（英文版）

CSG Holding Co., Ltd. 2003 Annual Report Summary CSG HOLDING CO., LTD. 2003 ANNUAL REPORT SUMMARY CEO:ZENG NAN March 2004 CSG Holding Co., Ltd. 2003 Annual Report Summary CSG Holding Co, Ltd. 2003 Annual Report Summary §1 Important Notes 1.1 The Board of Directors of CSG Holding Co., Ltd. (hereinafter referred to as the Company) hereby confirms that there are no important omissions, fictitious statements or serious misleading information carried in this report, and shall take all responsibilities, jointly and severally, for the truthfulness, accuracy and completeness of the whole contents. The 2003 annual report summary is abstracted from the full text of annual report. And 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 All directors attended the Board meeting. 1.4 Pricewaterhouse Coopers CPAs issued standard unqualified Auditor ’ s Report for the Company. 1.5 Chairman of the Board of the Company Mr. Chen Chao, CEO Mr. Zeng Nan and Chief financial supervisor Ms. Sun Jingbo hereby confirm that the Financial Report of the Annual Report is true and complete. §2 Company Profile 2.1 Basic information Short form of stock Southern Glass A, Southern Glass B Stock code 000012, 200012 Listed stock exchange Shenzhen Stock Exchange Registered address and office address CSG Building, No.1, 6th Industrial Road, Shekou, Shenzhen, China Post code 518067 Internet web site http://www.csgholding.com E-mail nbdnb@public.szptt.net.cn 2.2 Contact person and method Secretary of the Board of Directors Representative in charge of Securities Affais Name Wu Guobin Li Tao Address CSG Building, No.1, 6th Industrial Road, CSG Building, No.1, 6th Industrial Road, Shekou, Shenzhen, China Shekou, Shenzhen, China Telephone (86)755-26860666 (86)755-26860666 Fax (86)755-26692755 (86)755-26692755 E-mail szcsgcsg@public.szptt.net.cn szcsgcsg@public.szptt.net.cn -1- CSG Holding Co., Ltd. 2003 Annual Report Summary §3 Summary of Accounting Data and Financial Indexes 3.1 Major accounting data Unit: RMB’000 Increase/Decrease 2003 2002 over last year (%) 2001 Sales 1,320,900 1,047,831 26.06 1,016,561 Gross profit 475,369 394,317 20.56 364,341 Net profit 202,632 162,802 24.47 153,207 Increase/Decrease from the end of At the end of 2003 At the end of 2002 previous year (%) At the end of 2001 Total assets 3,526,990 2,978,128 18.43 2,687,912 Shareholders’equity 2,132,202 2,011,116 6.02 1,936,768 Net cash from 394,075 284,365 38.45 306,005 operating activities 3.2 Major financial indexes Unit: RMB Increase/Decrease 2003 2002 over last year (%) 2001 Earnings per share 0.30 0.24 25.00 0.23 Return on equity (%) 9.50 8.10 17.28 7.91 Net cash flows from 0.58 0.42 38.10 0.45 operating activities per share Increase/Decrease from the end of At the end of 2003 At the end of 2002 previous year (%) At the end of 2001 Equity per share 3.15 2.97 6.06 2.86 3.3 Difference on net profit as audited by Chinese Accounting Standard (CAS) and International Accounting Standard (IAS) √ Applicable □ Inapplicable Unit: RMB’000 CAS IAS Net profit 203,910 202,632 Recognition of deferred income tax 481 Derecognition of long-term deferred expenses (3,638) Explanation on difference Recognition of sales of properties based on transfer of title 1,879 -2- CSG Holding Co., Ltd. 2003 Annual Report Summary §4 Changes in Share Capital and Particulars about Shareholders 4.1 Statement of change in share capital Unit: Share Before the change Increase/Decrease in this time After the change I Unlisted shares i Promoters’shares 242,326,589 0 242,326,589 Including: State-owned shares 0 Domestic legal person’ s shares 242,326,589 0 242,326,589 Foreign legal person’ s shares 0 Others 0 ii Raised legal person’ s shares 28,430,284 0 28,430,284 iii Inner employees’shares 0 iv Preference shares or others 0 Total unlisted shares 270,756,873 0 270,756,873 II Listed shares i Ordinary RMB shares 107,165,997 0 107,165,997 ii Domestically listed foreign shares 299,052,546 0 299,052,546 iii Overseas listed foreign shares 0 iv Others 0 Total listed shares 406,218,543 0 406,218,543 III Total shares 676,975,416 0 676,975,416 4.2 Statement of shares held by the top ten shareholders and the top ten shareholders of circulating share Total number of shareholders at the end of the year 59,554 Particulars about shares held by the top ten shareholders: Increase/ Decrease Holding Share in the shares at pledged/ report year the year-end Proportion Type of frozen Nature of Name of shareholders (share) (%) (%) shares (share) shareholders Yiwan Industial Development (Shenzhen) Co., Ltd. 0 87,898,367 12.98 Non-circulating 0 China Northern Industry Shenzhen Corporation 0 87,175,364 12.88 Non-circulating 0 Xin Tong Chan Development (Shenzhen) Co., Ltd. 0 76,204,633 11.26 Non-circulating 0 China Merchants (Glass Industry) Holding Co., Ltd. -202,304 11,015,268 1.63 Circulating Unknown Foreign shareholder Shenzhen Jun An Securities Co., Ltd. 0 5,878,371 0.87 Non-circulating 0 Deutsche Bank AG London Unknown 5,605,240 0.83 Circulating Unknown Foreign shareholder China Merchants Securities Co., Ltd. 0 3,808,883 0.56 Non-circulating 0 San Xia Securities Co., Ltd. 0 3,721,727 0.55 Circulating Unknown Btfe-Value Partners Intelligent FD-China B SHS FD Unknown 3,569,016 0.53 Circulating Unknown Foreign shareholder Nomura TB / Nomura ITM Unknown 2,820,000 0.42 Circulating Unknown Foreign shareholder Explanation on associated relationship among the The existed the associated relationship between Yiwan Industial top ten shareholders or consistent action Development (Shenzhen) Co., Ltd. and Xin Tong Chan Development (Shenzhen) Co., Ltd., which controlled by Shenzhen International Holdings Ltd.. Except for this, there existed no associated relationship among the other shareholders. -3- CSG Holding Co., Ltd. 2003 Annual Report Summary Particulars about shares held by the top ten shareholders of circulating share: Holding circulating share at the Name of shareholders year-end (share) Type China Merchants (Glass Industry) Holding Co., Ltd. 11,015,268 B股 Deutsche Bank AG London 5,605,240 B股 San Xia Securities Co., Ltd. 3,721,727 A股 Btfe-Value Partners Intelligent FD-China B SHS FD 3,569,016 B股 Nomura TB / Nomura ITM 2,820,000 B股 Shanghai (HK) Wanguo Securities Co., Ltd. 2,374,628 B股 DZ BK Intl SA A/C Union Investment Lux SA S/A Uniem Fernost 2,100,000 B股 Barings (Ireland) SA The Atlantis China Fund PLC 1,999,927 B股 PICTET & CIE 1,550,000 B股 M errill Lynch International 1,500,000 B股 Explanation on associated relationship among the top ten Among the top ten shareholders of circulating share, the shareholders of circulating share Company is unknown whether there exists associated relationship, or whether the rest shareholders belong to the consistent actionist regulated by the Management Measure of Information Disclosure on Change of Shareholding for Listed Company. 4.3 Particulars about holding shareholders and actual controller of the Company 4.3.1 Particulars about change in holding shareholders and actual controller of the Company □ Applicable √ Inapplicable 4.3.2 Introduction of especial situation for holding shareholder and other actual controller Introduction of shareholders holding no less than 10% of total shares of the Company: a. Yiwan Industrial Development (Shenzhen) Co., Ltd. was founded on 13 September 1994, which is a wholly owned subsidiary of Shenzhen International Holdings Limited. Its registered capital is HKD 20 million. Legal representative: Chen Chao Business scope: Manufacture and operation of construction material, decoration material, new-style macromolecular material, energy saving electromechanical products, refining chemical industry products and etc. b. China Northern Industry Shenzhen Corporation was founded on 22 May 1981, which is a wholly owned subsidiary of China Northern Industry Corporation. Its registered capital is RMB 124.85 million. Legal representative: Jiao Zhiren Business scope: Domestic trading, supply and marketing of materials, storage and etc. c. Xin Tong Chan Development (Shenzhen) Co., Ltd. was founded on 8 September 1993, which was wholly owned subsidiary company of Shenzhen International Holdings Co., Ltd.. Legal representative: Chen Chao Business scope: Consultation of transport information, development of special-purpose software of transport flat and setting up industry. -4- CSG Holding Co., Ltd. 2003 Annual Report Summary §5 Director, Supervisor and Senior Executive 5.1 Particulars about changes in shares held by directors, supervisors and senior executives Shares held Share held at the at the Reason of Name Title Sex Age Term office year-begin year-end change Chen Chao Chairman of the Board Male 48 2002/5-2005/5 0 0 — Zeng Nan Director / CEO Male 59 2002/5-2005/5 67,680 67,680 — Long Long Independent Director Male 48 2002/5-2005/5 0 0 — Yan Ganggang Independent Director Male 44 2002/5-2005/5 0 0 — Zhang Jianjun Independent Director Male 39 2003/5-2005/5 0 0 — Zhou Daozhi Director Male 54 2002/5-2005/5 0 0 — Li Jingqi Director Male 47 2002/5-2005/5 0 0 — Ding Jiuru Director Male 41 2002/5-2005/5 0 0 — Liu Jun Director Male 40 2002/5-2005/5 0 0 — Jiao Zhiren Chairman of the Supervisory Male 57 2002/5-2005/5 0 0 — Committee Yang Hai Supervisor Male 42 2002/5-2005/5 0 0 — Sun Jingbo Chief Financial Female 41 2002/5-2005/5 24,816 24,816 — Ke Haiqi Deputy General Manager Male 38 2003/1-2005/5 0 0 — Lu Wenhui Deputy General Manager Male 40 2003/1-2005/5 0 0 — Yuan Dingfu Deputy General Manager Male 42 2003/11-2005/5 0 0 — (Supervisor)* Wu Guobin Secretary of the Board of Male 39 2002/5-2005/5 0 0 — Directors * Mr. Yuan Dingfu has submitted an application to resign the post of Supervisor, which would take effect under the approval of the 2003 Shareholders’General Meeting. 5.2 Particulars about directors, supervisors holding the post in Shareholding Company √ Applicable □ Inapplicable Drawing the Title in Shareholding Name Name of Shareholding Company Term office payment from Company the Company Chen Chao Xin Tong Chan Development (Shenzhen) Co., Ltd. Chairman of the Board Apr. 1993 to now No Chen Chao Yiwan Industrial Development (Shenzhen) Co., Ltd. Chairman of the Board Apr. 2000 to now No Li Jingqi Xin Tong Chan Development (Shenzhen) Co., Ltd. Director Sep. 2002 to now No Li Jingqi Yiwan Industrial Development (Shenzhen) Co., Ltd. Director Dec. 2003 to now No Ding Jiuru China Northern Industry Shenzhen Corporation Chief Accountant Jun. 1998 to now Yes Liu Jun Xin Tong Chan Development (Shenzhen) Co., Ltd. Director Sep. 2002 to now No Liu Jun Yiwan Industrial Development (Shenzhen) Co., Ltd. Director Apr. 2000 to now No Jiao Zhiren China Northern Industry Shenzhen Corporation General Manager Jan. 2000 to now Yes Yang Hai Yiwan Industrial Development (Shenzhen) Co., Ltd. Director/General Manager Apr. 2000 to now Yes Yang Hai Xin Tong Chan Development (Shenzhen) Co., Ltd. Director Mar. 2001 to now No 5.3 Particulars about the annual payment of directors, supervisors and senior executives Unit: RMB’0000 Total annual payment 200.72 Total annual payment of the top three directors drawing the highest payment 0.00 Total annual payment of the top three senior executives drawing the highest payment 123.05 Allowance of independent director 5.00 per person/year Other treatment of independent director None Name of directors and supervisors received no payment or allowance form Chen Chao, Zhou Daozhi, Li Jingqi, Ding the Company Jiuru, Liu Jun, Jiao Zhiren, Yang Hai Payment Number of person 50~59 1 30~39 3 20~29 2 -5- CSG Holding Co., Ltd. 2003 Annual Report Summary §6 Report of the Board of Directors 6.1 Discussion and analysis of the operation In the first half year of 2003, the demand in national economy was mild and operation was restricted due to the influence of SARS. The price of the Company’ s main products declined generally. At the same time, the international price of crude oil ascended which influenced by the War of Iraq, and international exchange rate fluctuated acutely. The Company’s operating pressure increased suddenly. Facing these negative influences, the Company adjusted product structure actively and persisted in enhancing additional value of products through developing high-tech products, stabilized the confidence, strengthened the preponderant industries, enlarged the productive capability and sped up the construction of those projects newly constructed, organized and managed in scientific and elaborate way, reinforced the cost and expense control. The Company not only dispelled the above negative completely, but also has still kept the steady growth in the achievement. In the second half year of 2003, the country implemented active financial policies continuously and widen the domestic demand, and export increased in a fast way. The national economy recovered quickly and increased strongly. The demand for glass products in the market was prosperous and their prices recovered in a stable way. The Company saw a delightful condition that the production and sales were both prosperous and the main products’ supply fell short of demand. The Company’ s benefits ascended in a large margin. The Company finished the productive & operative targets and tasks in investment & construction for 2003 completely. In the report period, the Company realized net profit more than RMB 200 million, and reached the highest historical level of the Company. The glass market outlook for 2004 in China, we estimate that it will still keep a relatively high growth speed and the prices of main products shall be relatively stable with good market environment. Thus the Company has established operating management strategy: combines the market demand tightly, adjusts product structure continually, reinforces the development of new products, improves further objective cost management system, controls the cost and expense strictly, speeds the construction of newly projects constructed, cultivates and enhances the core competitiveness continually, catches the advantageous chances, expands market share continually, strengthens the profitability and keeps the Company’ s continued and rapid development. 6.2 Sales classified according to products: Unit: RMB’000 2003 2002 Sales of glass products 1,198,944 947,214 Sales of ceramics products 53,195 44,398 Sales of properties 39,667 42,688 Glass installation service revenue 29,094 13,531 Total 1,320,990 1,047,831 6.3 Sales classified according to location: Unit: RMB’000 2003 2002 PRC 1,156,459 806,652 United States 57,492 83,762 Australia 26,847 19,968 Others 80,102 137,449 Total 1,320,990 1,047,831 -6- CSG Holding Co., Ltd. 2003 Annual Report Summary 6.4 Particulars about the customers of purchase and sales Unit: RMB’0000 Total amount of purchase of the 21,020 Proportion in the total 28.36% top five suppliers amount of purchase Total amount of sales of the top 18,900 Proportion in the total 14.21% five sales customers amount of sales 6.5 Operation of share- holding companies (applicable to the situation where investment equity takes over 10% of its net profit) □ Applicable √ Inapplicable 6.6 Explanation on reasons of material changes in main operations and its structure □ Applicable √ Inapplicable 6.7 Explanation on reasons of material changes in profitability capability of main operations (gross profit ratio) than that in the last year □ Applicable √ Inapplicable 6.8 Analysis to reasons of material changes in operating results and profit structure compared with the last year □ Applicable √ Inapplicable Analysis to reasons of material changes in the whole financial position than that in the last year □ Applicable √ Inapplicable 6.9 Explanation on the past, current and future important effects of the material changes in production and operation environment, macro-policies and regulations on the Company’s financial position and operation results √ Applicable □ Inapplicable In the report period, the production environment tends to be favorable, and the microscopic policy and the regulations are relatively stable. It put a positive effect on the achievement increase. 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 changed projects □ Applicable √ Inapplicable -7- CSG Holding Co., Ltd. 2003 Annual Report Summary 6.13 Application of the proceeds not raised through shares offering √ Applicable □ Inapplicable Unit: RMB’0000 Projects Amount Progress Earnings Tianjin Architectural 34,000 The projects’ construction was basically finished and None Glass Project production lines were still in experiment and adjustment. The project will be put into production totally in the first quarter of 2004. Color Light-filter 26,486 The factory building was almost finished. The None Glass Project project will be put into production around July to August in 2004. Construct U type 73,000 Majority of the basic engineering of furnace has None special glass been completed. The basic construction and production line installation & adjustment of equipments imported will be completed as a whole in 2004. The project will be put into production gradually from 2005. The 3rd term of 20,000 The factory building was almost finished and None Automobile Glass parts of the important instruments were in place Production Line for adjustment. The project will be put into project production around July to August in 2004. Total 153,486 -- -- 6.14 Explanation of the Board of Directors on the “Qualified Opinion”made by the CPAs □ Applicable √ Inapplicable 6.15 Business plan as of the next year of the Board of Directors □ Applicable √ Inapplicable Profit estimation of the next year □ Applicable √ Inapplicable 6.16 The preplan of profit distribution and capitalization of capital public reserve of the Board of Directors As audited by Pricewaterhouse Coopers Zhong Tian CPAs Co., Ltd., the net profit of the Company was RMB 203,910,236. The Board of Directors proposed to make profit distribution as follows: 10% of the net profit is to be withdrew as statutory common reserve fund amounting to RMB 20,391,546 and 5% of the net profit is to be withdrew as statutory public welfare fund amounting to RMB 10,195,512. Plus RMB 196,331,546 undistributed profit carried down from the previous year and minus the cash dividend RMB 101,546,312 distributed in the last year, the profit available for distribution for shareholders is 268,108,934. Based on the total share capital of 676,975,416 shares at the end of 2003, the dividends will be distributed to the whole Shareholders in cash at the rate of RMB 1.80 for every 10 shares (including tax), and the totally amounts of cash dividends is RMB 121,855,575. The surplus profit will be retained for distribution in future year. -8- CSG Holding Co., Ltd. 2003 Annual Report Summary §7 Significant Events 7.1 Purchase of assets □ Applicable √ Inapplicable 7.2 Sales of assets □ Applicable √ Inapplicable 7.3 Significant guarantees □ Applicable √ Inapplicable 7.4 Current related credits and liabilities □ Applicable √ Inapplicable 7.5 Entrusted assets management □ Applicable √ Inapplicable 7.6 Implementation of commitments √ Applicable □ Inapplicable a. The estimated profit distribution policy for 2003was disclosed in 2002 Annual Report of the Company. The details is: 20%~50% of the net profit to be realized in the year 2003 will be used for profit distribution, 10%~50% of the undistributed profit at the end of 2002 will be used for profit distribution in the year 2003. In fact, distribution proportion for 2003 proposed by the Board of Directors accords with the estimated profit distribution proposal. b. The Shareholders holding over 5% shares of the Company made no commitment on the designated in the report period. 7.7 Significant lawsuit and arbitrations √ Applicable □ Inapplicable The case of the Home of Overseas Chinese between Hainan CSG Industrial Development Co. (hereinafter referred to as Hainan CSG), the Company’ s wholly owned subsidiary, and Hainan Yuehai Construction Economic Development Company (hereinafter referred to as Yuehai Company) received two judgments from Hainan Provincial High People’ s Court on 17 December 2003. According to the retrial judgment of the Supreme Court, Hainan Provincial High People ’s Court made the final judgment for the two cases including Hainan CSG and Yuehai Company, Hainan Zhongda Industrial Development Co., Ltd. (hereinafter referred to as Zhongda Company) and Qiongshan Overseas Chinese Development Construction Company (hereinafter referred to as Overseas Chinese) on the dissension of presale contract of commercial house, Home of Overseas Chinese, according to procedure of trial and supervision. (2003) QMZZZ No.12 Civil Judgment judged Overseas Chinese delivers the corresponding houses of the integrated building in Home of Overseas Chinese to Zhongda Company according to payment for buying houses, RMB 5.21 million paid by Zhongda Company and pays Zhongda Company amount of breaching of faith RMB 0.9 million and amount of refunds advertisement RMB 78,000. The houses that Zhongda Company has attained after applying for execution and conducing the procedure of transferring owner in register over the above amount, Zhongda Company should refund them to Overseas Chinese. The house sold, paid debt in kind to the well- meaning third-person by Zhongda Company and cannot be returned, Zhongda Company should refund the -9- CSG Holding Co., Ltd. 2003 Annual Report Summary corresponding payment. (2002) QGFMZZZ No.4 Civil Judgment maintained the original trial, namely Yuehai Company should refund payment for buying houses of Hainan CSG amounting to RMB 17,153,423.36 and 70% of the lost interest of the payment. And meanwhile judged Overseas Chinese should undertake repayment responsibilities on the expense that was caused by Yuehai Company’ s not repaying the debt of Hainan CSG. Whereas Yuehai Company and Overseas Chinese lack seriously of abilities of repaying debt, it is estimated that mostly above payment cannot be received. Against the case, the Company has withdrawn provision of inventory accumulatively amounting to RMB 22.81 million. So the result of execution of the case will not influence on the achievement of the Company in future. 7.8 Particulars about duties performance of Independent Directors The Board of Directors of the Company engaged three independent directors. The independent directors take no position of any post except the independent director. Since the accession of the independent directors, they implemented the responsibility according to relevant laws and regulations, put toward independent opinion on significant ma tters such as the assign of senior managers of the Company and safeguarded the interests of the Company and small or medium shareholders. -10- CSG Holding Co., Ltd. 2003 Annual Report Summary §8 Financial Report CSG HOLDING CO., LTD. CONSOLIDATED INCOME STATEMENT FOR THE YEAR ENDED 31 DECEMBER 2003 Notes 2003 2002 RMB’000 RMB’000 Sales 4 1,320,900 1,047,831 Cost of sales (845,531) (653,514) Gross profit 475,369 394,317 Other operating income 14,742 26,031 Distribution costs (108,029) (90,141) Administrative expenses (119,023) (112,167) Other operating expenses (9,339) (6,183) Profit from operations 5 253,720 211,857 Finance costs, net 6 (20,608) (17,578) Profit before tax 233,112 194,279 Income tax expense 8 (17,182) (17,772) Profit after tax 215,930 176,507 Minority interests 27 (13,298) (13,705) Net profit 202,632 162,802 Earnings per share 9 RMB 0.30 RMB 0.24 -11- CSG Holding Co., Ltd. 2003 Annual Report Summary CSG HOLDING CO., LTD. CONSOLIDATED BALANCE SHEET AS OF 31 DECEMBER 2003 Notes 2003 2002 RMB’000 RMB’000 ASSETS Non-current assets Property, plant and equipment 11 2,064,436 1,692,554 Construction-in-progress 12 559,601 454,615 Land use rights 13 91,283 89,243 Intangible assets 14 (5,954) (7,089) Available-for-sale investments 15 9,078 8,663 Deferred tax assets 23 927 446 2,719,371 2,238,432 Current assets Inventories 16 103,887 93,819 Properties held for sale 17 231,558 246,972 Trade receivables 18 214,317 172,000 Other receivables and prepayments 38,154 38,327 Trading investments 859 500 Cash and cash equivalents 19 218,844 188,078 807,619 739,696 Total assets 3,526,990 2,978,128 EQUITY AND LIABILITIES Shareholders’equity Share capital 24 676,975 676,975 Reserves 25 1,196,089 1,145,502 Retained earnings 26 259,138 188,639 2,132,202 2,011,116 Minority interests 27 91,272 76,035 Non-current liabilities Borrowings 22 163,337 50,000 Current liabilities Trade and other payables 20 337,869 273,473 Current tax liabilities 21 18,626 7,770 Borrowings 22 783,684 559,734 1,140,179 840,977 Total equity and liabilities 3,526,990 2,978,128 -12- CSG Holding Co., Ltd. 2003 Annual Report Summary CSG HOLDING CO., LTD. CONSOLIDATED STATEMENT OF CHANGES IN SHAREHOLDERS’EQUITY FOR THE YEAR ENDED 31 DECEMBER 2003 Statutory Statutory common public Share Capital reserve welfare Hedging Exchange Retained Notes capital reserve fund fund reserve reserve earnings Total RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 Balance at 1 January 2002 676,975 927,897 115,803 76,689 - 1,063 138,341 1,936,768 Dividend relating to 2001 - - - - - - (88,007) (88,007) Currency translation differences - - - - - (447) - (447) Net profit for the year - - - - - - 162,802 162,802 Appropriation to reserve funds 25 - - 16,331 8,166 - - (24,497) - Balance at 31 December 2002 and 1 January 2003 676,975 927,897 132,134 84,855 - 616 188,639 2,011,116 Dividend relating to 2002 10 - - - - - - (101,546) (101,546) Capital exchange reserve recognised in current year - 5 - - - - - 5 Net fair value gain in current year relating to cash flow hedge - - - - 19,924 - - 19,924 Currency translation differences - - - - - 71 - 71 Net profit for the year - - - - - - 202,632 202,632 Appropriation to reserve funds 25 - - 20,391 10,196 - - (30,587) - Balance at 31 December 2003 676,975 927,902 152,525 95,051 19,924 687 259,138 2,132,202 -13- CSG Holding Co., Ltd. 2003 Annual Report Summary CSG HOLDING CO., LTD. CONSOLIDATED CASH FLOW STATEMENT FOR THE YEAR ENDED 31 DECEMBER 2003 Notes 2003 2002 RMB’000 RMB’000 Cash flows from operating activities Cash generated from operations 28 434,122 317,815 Interest paid (23,723) (24,312) Income tax paid (16,324) (9,138) Net cash from operating activities 394,075 284,365 Cash flows from investing activities Purchase of property, plant and equipment (599,040) (467,208) Purchase of land use rights (5,626) (6,206) Purchase of intangible assets (185) (641) Purchase of trading investments (359) - Purchase of interests in subsidiaries from minority shareholders - (3,880) Proceeds from sale of property, plant and equipment 754 27,000 Interest received 1,345 1,534 Net cash used in investing activities (603,111) (449,401) Cash flows from financing activities Proceeds from borrowings 1,841,546 1,324,688 Repayments of borrowings (1,504,259) (1,116,717) Dividends paid to shareholders (101,146) (91,050) Dividends paid to minority interests (11,653) (836) Capital contributed by minority shareholders 13,592 36,221 Pledged bank deposits withdrawn 3,228 10,374 Net cash generated from financing activities 241,308 162,680 Effect of exchange rate changes 1,722 52 Net increase (decrease) in cash and cash equivalents 33,994 (2,304) Cash and cash equivalents at beginning of year 179,865 182,169 Cash and cash equivalents at end of year 19 213,859 179,865 Board of Directors of CSG Holding Co., Ltd. 12 March 2004 -14-