深华发Ａ(000020)深华发Ｂ2003年年度报告摘要（英文版）

Stock code : 000020, 200020 Short form of the stock : SHENHUAFA A, SHENHUAFA B Public Notice No.: 2004-09 SHENZHEN HUAFA ELECTRONICS CO., LTD. 2003 ANNUAL REPORT SUMMARY (Overseas Version) §1. Important Notes 1.1 The Board of Directors of Shenzhen Huafa Electronics Co., Ltd. (hereinafter referred to as the Company) 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 2003 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 Shenzhen Nanfang Min- He Certified Public Accountants and Ho and Ho & Company Certified Public Accountants audited the 2003 financial report of the Company and issued the standard unqualified Auditors’Report respectively. 1.3 Chairman of the Board of the Company Mr. Wu Dehua, General Manager Mr. Zhang Yongcheng, Deputy General Manager and concurrently Chief Accountant Mr. Hu Jianping and Head of Financial Department Mr. Wang Yiqing 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 SHENHUAFA A, SHENHUAFA B Stock code 000020, 200020 Listed stock exchange Shenzhen Stock Exchange Registered address and office 411 Bldg., Huafa North Road, Futian District, Shenzhen address Post code 518031 Internet web site of the Company http://www.hwafa.com E-mail of the Company szhf@hwafa.com 2.2 Contact person and method Secretary of the Board of Representative in charge of Directors Securities Affairs Name Hu Jianping Liu Yang th Contact address 6 Floor, 411 Bldg., Huafa North Road, Futian District, Shenzhen Telephone (86) 755-83352207 Fax (86) 755-83323169 E-mail Sz000020@163.net §3. Summary of Accounting Data and Financial Indexes 1 3.1 Main Accounting Highlights Unit: RMB’000 Increase/decrease 2003 2002 over last year（％） Operating Income 151,392 164,082 -7.73% Profit before Tax -7,734 1,110 --- Net profit -7,734 1,110 --- At the end of At the end of Increase/decrease 2003 2002 over last year Total assets 476,381 466,311 2.16% Total equity 276,579 281,280 -1.67% Net cash from operating 822 1,920 -57.19% activities 3.2 Financial Indexes: Unit: RMB Increase/decrease 2003 2002 over last year Earnings per share -0.027 0.004 --- Return on equity -2.80% 0.39% -3.19% Ratio Net cash from operating activities 0.017 0.024 -29.17% per cash Increase/decrease At the end of 2003 At the end of 2002 over last year Net assets per share 0.98 0.99 -1.01% 3.3 Difference of the CAS and IAS □Applicable √Inapplicable The Company is a listed company of both A-share and B-share. The net profit of the Company as calculated according to CAS and IAS and relevant system was no difference. §4. Changes in Share Capital and Particulars about Shareholders 4.1 Statement of change in share capital (Unit: share) Increase/decrease of this time (+, - ) Before the After the Items Allotment Bonus Capitalization of Additional Others Subtotal change change of share shares public reserve issuance Ｉ． Unlisted shares 1. Promoters’shares Including: Domestic legal person’s shares 124,925,828 0 124,925,828 Foreign legal person’s shares Others (Domestic legal person’s transferred allotted shares ) 2. Raised legal person’s shares 2 3. Inner employees’shares 4. Preference shares or others Total unlisted circulating shares 124,925,828 0 124,925,828 II. Listed shares 1. RMB ordinary shares 56,239,563 0 56,239,563 2.Domestically listed foreign 101,995,836 0 101,995,836 shares 3.Foreign listed foreign shares 4.Others Total listed circulating shares 158,235,399 0 158,235,399 ＩＩＩ. Total shares 283,161,227 0 283,161,227 4.2 Statement of shares held by the top ten shareholders and Statement of shares held by the top ten circulating shareholders Total number of shareholders at the end of report year 37,342 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) Domestic Legal person Shenzhen SEG Group Co., Ltd. 62,462,914 22.06 Non-circulating 38,860,410 shareholder Domestic Legal person China Zhenhua Electronics Industrial Co. 62,462,914 22.06 Non-circulating 0 shareholder SEG (Hong Kong) Co., Ltd. 16,569,560 5.85 Circulating 0 Circulating shareholder GOOD HOPE CORNET INVESTMENTS 13,900,000 4.91 Circulating 0 Circulating shareholder LTD ADVANCE FUTURE GROUP LIMITED -4,301,400 3,674,410 2.82 Circulating 0 Circulating shareholder Yin Gang +720,145 720,145 0.25 Circulating 0 Circulating shareholder DBS VICKERS (HONG KONG) LTD A/C +548,262 548,262 0.19 Circulating 0 Circulating shareholder CLIENTS Huang Min +373,620 373,620 0.13 Circulating 0 Circulating shareholder Zhuang Xinjian +362,350 362,350 0.13 Circulating 0 Circulating shareholder BEST RELIANCE INVESTMENTS LTD +350,306 350,306 0.12 Circulating 0 Circulating shareholder Explanation on associated relationship SEG (Hong Kong) Co., Ltd. is overseas wholly-owned subsidiary of Shenzhen SEG among the top ten shareholders or Group Co., Ltd.. The Company is unaware of whether there existed related relationship consistent action among the other shareholders. Particulars about shares held by the top ten circulating shareholders Holding shares at the Shareholders’name (Full Name) Type (A, B, H or others) year- end (share) SEG (Hong Kong) Co., Ltd. 16,569,560 B share GOOD HOPE CORNET INVESTMENTS LTD 13,900,000 B share 3 ADVANCE FUTURE GROUP LIMITED 3,674,410 B share Yin Gang 720,145 B share DBS VICKERS (HONG KONG) LTD A/C CLIENTS 548,262 B share Huang Min 373,620 B share Zhuang Xinjian 362,350 A share BEST RELIANCE INVESTMENTS LTD 350,306 B share WONG, CHI HO 300,000 B share Ye Baicai 291,400 B share The Company is unaware of whether there existed Explanation on the relationship of the top ten related relationship among the top ten circulating circulating shareholders shareholders. 4.3 Particulars about controlling shareholders and actual controller of the Company 4.3.1 Particulars about change on controlling shareholders and actual controller of the Company □Applicable √Inapplicable Name of the controlling shareholder: Shenzhen SEG Group Co., Ltd. Legal representative: Sun Yulin Date of foundation: Aug. 23, 1984 Registered capital: RMB 1,355.42 million Business scope: Production and research of electronic products, electrical home appliances; undertake various electronic system project (Import and export business and exclusive dealings commodities were conducted according to the regulation); raise development funds and invest credit; development of technology and information service and maintenance; high- floor sightseeing, supporting food and drink, marketplace and exhibition of SEG Plaza. Shenzhen Investment Holding Corporation is the First Principle Shareholder of Shenzhen SEG Group Co., Ltd., and holds 46.52% equity of Shenzhen SEG Group Co., Ltd.. §5. Particulars About Directors, Supervisors, Senior Executives 5.1 Particulars about changes in shares held by directors, supervisors and senior executives Number of holding shares (share) Name Gender Age Title Office term At the Increase At the year-begin /Decrease year-end Wu Dehua Male 58 Chairman of the Board Apr. 2001-Present 0 0 0 Feng Quanbao Male 58 Vice Chairman of the Board Apr. 2001-Present 0 0 0 Zhang Yongcheng Male 52 Director, General Manager Apr. 2001-Present 0 0 0 Che Wenshen Male 55 Director Apr. 2001-Present 0 0 0 Wang Chu Male 46 Director Dec. 2001-Present 0 0 0 Zhou Daozhi Male 53 Independent Director Jun. 2002-Present 0 0 0 Zhao Junrong Male 40 Independent Director Jun. 2002-Present 0 0 0 4 Chairman of the Ye Daming Male 59 Apr. 2001-Present 30,433 0 30,433 Supervisory Committee Liu Jingju Female 49 Supervisor Apr. 2001-Present 0 0 0 Li Liangzhen Male 39 Supervisor Jun. 2002-Present 0 0 0 Cai Guiyong Male 56 Deputy General Manager Jun. 2001-Present 33,645 1.900 35,545 Deputy General Manager, Hu Jianping Male 42 Chief Accountant, Secretary Apr. 2001-Apr. 2004 0 0 0 of Board of Directors Sun Lei Male 39 Deputy General Manager Jun. 2001-Apr. 2004 0 0 0 5.2 Particulars about directors and supervisors holding the post in Shareholding Company √Applicable □Inapplicable Drawing the payment Name of Shareholding Title in Shareholding Name Office term from the Shareholding Company Company Company (Yes / No) China Zhenhua Electronics Wu Dehua Group Co. Shenzhen General Manager Apr, 2001 to now Yes Electronics Co., Ltd. Feng Quanbao Shenzhen SEG Group Co., Ltd. Deputy General Manager Jun. 1992 to now Yes China Zhenhua Electronics Che Wenshen Chief Accountant Aug. 2000 to now Yes Group Co. Wang Chu Shenzhen SEG Group Co., Ltd. Assistant Manager Aug. 2001 to now Yes Liu Jingju Shenzhen SEG Group Co., Ltd. Deputy Secretary May 1997 to now Yes 5.3 Particulars about the annual payment of directors, supervisors and senior executives Total annual payment RMB 1,707,000 Total annual payment of the top three directors RMB 399,000 drawing the highest payment Total annual payment of the top three senior RMB 854,000 executives drawing the highest payment Allowance of independent director per person/ RMB 36,000 year Other treatment of independent directors No Name of directors and supervisors receiving no Wu Dehua, Feng Quanbao, Che Wenshen, Wang Chu, payment or allowance from the Company Liu Jinju Payment Number of persons Under RMB 50,000 2 RMB 200,000 ～ RMB 300,000 5 Over RMB 300,000 1 §6. Report of the Board of Directors 6.1 Discussion and analysis to the whole operation in the report period 5 1. According to the accounting policy approved by the resolution of the Board, the houses in the Company’s fixed assets were formerly appropriated depreciation according to the estimated usable year- limit of 50 years. The partial house property of the Company bought in 1982 and 1985 obtained real estate certification in Nov. 1999 and at the beginning of 2003 and the usable year- limit stated in the real estate certification was 30 years. According to the usable year- limit stated in the real estate certification and as approved by the resolution with SHFDZ [2004] NO.4 of the 1st provisional Board of Directors of the Company in 2004 (the notice was published on China Securities and Ta Kung Pao dated Mar. 23, 2004), the Company changed the estimated usable year- limit of the above house property into 30 years and appropriated depreciation of net value of fixed assets on account by amortizing as beeline method within the left year-limit since the 2nd month after receiving the real estate certification. Because of the change of the above accounting assessment, the Company increased the accumulated depreciation amounting to RMB 4,903,800 in 2003 and correspondingly decreased profit; made backward adjustment and correspondingly decreased the retained earnings amounting to RMB 12,705,500 at the beginning of 2003. 2、At the end of this year, the amount of the inventory of the Company was RMB 81,892,300. The Company appropriated provision for inventory’s depreciation caused by derogation, price-falling and other factors according to the regulars of provision calculation. The provision for price-falling appropriated this year was RMB 3,665,900. 3. At the beginning of 2003, Chinese color-TV enterprises encountered the anti-dumping case of the occident countries, which hampered the product export business of many color-TV manufacturers in the country and meanwhile because of the influence of SARS, the purchase ability of the civil market descended in a large range and it caused the large decrease of the orders of OEM customers of the Company; the dissension of patent right of DVD caused the large decrease of output of the civil DVD manufacturers and had large influence on the sale of the Double Sided PCB of the Company; the processing expense of color-TV and the sale price of PCB dropped consistently and it had a serious influence on the income from main business. Whereas the scurviness of the market environment, the Company made efforts to improve the technology level and earning ability, made the development of the products toward multi-structure and multi- field, cast off the simplex complexion of the products and customers, actively searched the market, descended cost and raised performances. 4. The property lease of the Company is mainly commercial use. “SARS ”directly effected the normal operation of the renters, so the Company debated partial rent. Whereas so, the rent rate of the Company’ s property, the rent income of the whole year still created the highest level since renting and the actual received rent in the whole year was RMB 33.08 million. 6.2 Statement of main operations classified according to products Classified Income from Cost of main Gross Increase/decrease Increase/decrease Increase/decrease according main operations profit in income from in cost of main in gross profit 6 to products operations (RMB’0000) ratio main operations operations over ratio over the last (RMB’0000) (%) over the last year the last year (%) year (%) (%) Color TVs: Processing 1,637.93 1,619.40 1.13 -8.94 -3.56 -5.52 Inside sale of 73.13 240.85 --- -74.10 -51.16 --- inventories Outside 1,115.73 1,065.56 4.50 -52.33 -54.46 4.48 sale Circuit 7,850.07 7,008.22 10.72 1.56 1.86 -0.27 Board Plastic injection 1,175.38 972.23 17.28 57.76 54.36 1.82 hardware Including: related 0 0 transaction Pricing principle of Inapplicable related transaction Explanation on necessity and Inapplicable consistency of related transaction 6.3 Particulars about main operations classified according to areas □Applicable √Inapplicable The product sale of the main business of the Company is mainly in the South China. 6.4 Particulars about the customers of purchase and sales Unit: RMB’0000 Proportion in the Total amount of purchase from the 4,668.55 total amount of 51.06% top five suppliers purchase Total amount of sale to the top five Proportion in the 7,012.76 59.17% sale customers total amount of sale 6.5 Operation of share-holding companies □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 7 operations 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 previous 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 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 changed projects □Applicable √Inapplicable 6.13 Application of the proceeds not raised through shares offering □Applicable √Inapplicable 6.14 Explanation of the Board of Directors on the “Non-standard Opinion”made by the Certified Public Accountants □Applicable √Inapplicable 6.15 Business plan as of the next year of the Board of Directors √Applicable □Inapplicable The Company will push in large step and concentrate on doing the following works in 2004: 1. Regulating the product structure of Circuit Board, extending product market, improving product quality, increasing the product competition ability and earning profits space; 2. Making the OEM production of color TVs and SMI greater and stronger by improving the production ability and dropping cost. 3. Stabilizing property income and supporting the Company’ s development continually. Profit estimation of the next year □Applicable √Inapplicable 6.16 The preplan on the profit distribution and capitalization of capital public reserve of the Board of Directors Neither profit distribution nor capitalization of capital public reserve in 2003. §7. Significant Events 7.1 Purchase of assets □Applicable √Inapplicable 8 7.2 Sales of assets □Applicable √Inapplicable 7.3 Important guarantee □Applicable √Inapplicable 7.4 Related credits and liabilities current □Applicable √Inapplicable 7.5 Entrusted assets □Applicable √Inapplicable 7.6 Implementation of commitment items □Applicable √Inapplicable 7.7 Significant lawsuit and arbitration □Applicable √Inapplicable 7.8 Particulars about the performance of obligations of Independent Directors □Applicable √Inapplicable According to relevant regulations of Company Law, Administration Rules for Listed Company, Articles of Association of the Company and Independent Director System, Independent Director, Mr. Zhou Daozhi and Mr. Zhao Junrong performed their duties of Independent Director in a patient and responsible way, attended every meeting of the Board according to request and expressed professional opinion on the proposals of the meetings; examined the financial statement of the Company each month and mastered the operation status and financial situation of the Company in time; actively participated in the decision- making of the significant events of the Company, contributed stratagem and decision to the development of the Company in the professional view and meanwhile played a good role in the normative administration of the Company. §8. Report of the Supervisory Committee The Supervisory Committee believes that there existed no problems in operation according to laws, financial situation, usage of raised capital, transactions of purchase and sale of assets and related transactions. §9. Financial Report Consolidated Income Statement, Balance Sheet, Equity Change Statement and Cash Flow Statement (attached) Board of Directors of Shenzhen Huafa Electronics Co., Ltd. Apr. 24, 2004 9 CONSOLIDATED INCOME STATEMENT 1. YEAR ENDED 31ST DECEMBER 2003 NOTE 2003 2002 RMB’000 RMB’000 Revenue 4 151,392 164,082 Cost of sales (125,374) (134,475) Gross profit 26,018 29,607 Other revenue 96 486 Selling and distribution costs (3,335) (1,841) Administrative expenses (23,001) (19,400) Other operating expenses (750) (497) (Loss)/Profit from operations 5 (972) 8,355 Net finance costs 6 (6,762) (7,245) Net (Loss)/ Profit from ordinary activities before taxation (7,734) 1,110 Income tax expenses 7 - - (Loss)/profit attributable to shareholders (7,734) 1,110 (Loss)/earnings per share –Basic 9 (RMB0.027) RMB0.004 10 CONSOLIDATED BALANCE SHEET 2. AS AT 31ST DECEMBER 2003 NOTE 2003 2002 RMB’000 RMB’000 (a) ASSETS (Restated) I. II. Non-current assets Property, plant and equipment 11 290,183 297,947 Construction in progress 12 469 1,256 Other investment 13 - - Total non-current assets 290,652 299,203 Current assets Inventories 14 45,192 45,139 Bills receivable 4,042 - Trade accounts receivable 63,870 51,810 Prepaid expenses and other current assets 15 25,355 24,285 Cash and cash equivalents 16 47,270 45,874 Total current assets 185,729 167,108 Total assets 476,381 466,311 EQUITY AND LIABILITIES III. IV. Capital and reserves Share capital 17 283,161 283,161 Share premium 18 98,461 98,461 Property revaluation reserve 19 3,033 - Surplus reserves 20 77,391 77,391 Accumulated losses (185,467) (177,733) 276,579 281,280 (b) Current liabilities Trade accounts payable 42,720 37,390 Accrued exp enditures and other payables 21 23,082 23,641 Short -term bank borrowings 22 134,000 124,000 Total current liabilities 199,802 185,031 Total equity and liabilities 476,381 466,311 11 CONSOLIDATED STATEMENT OF CHANGES IN EQUITY (c) YEAR ENDED 31ST DECEMBER 2003 Property Share Share revaluation Surplus Accumulated capital premium reserve reserve losses Total RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 Balance at 1st January 2002 - As previous reported 283,161 98,461 - 77,391 (170,388) 288,625 - Prior period adjustment(note 2) - - - - (8,455) (8,455) - As restated 283,161 98,461 77,391 (178,843) 280,170 Profit attributable to shareholders - As previous reported - - - - 5,360 5,360 - Prior period adjustment(note 2) - - - - (4,250) (4,250) - As restated - - - - 1,110 1,110 Balance at 31st December 2002 and 1st January 2003 283,161 98,461 - 77,391 (177,733) 281,280 Revaluation surplus - - 3,033 - - 3,033 Loss attributable to shareholders - - - - (7,734) (7,734) Balance at 31st December 2003 283,161 98,461 3,033 77,391 (185,467) 276,579 12 CONSOLIDATED CASH FLOW STATEMENT (d) YEAR ENDED 31ST DECEMBER 2003 2003 2002 RMB’000 RMB’000 OPERATING ACTIVITIES (Loss)/profit before taxation (7,734) 1,110 Adjustment: Bank interest income (293) (361) Interest expenses 7,131 7,540 Depreciation 22,702 17,641 Gain on disposals of property, plant and equipment (10) (156) Written off construction-in-progress 19 17 (Increase)/decrease in inventories (53) 1,576 Increase in trade and other receivables (18,580) (36,567) Increase in trade and other payables 4,771 18,660 Cash generated from operations 7,953 9,460 Interest paid (7,131) (7,540) V. NET CASH FROM OPERATING ACTIVITIES 822 1,920 INVESTING ACTIVITIES Interest received 293 361 Purchase of property, plant and equipment (2,985) (3,950) Increase in construction in progress (6,779) (14,657) Proceeds from disposals of property, plant and equipment 45 586 NET CASH USED IN INVESTING ACTIVITIES (9,426) (17,660) FINANCING ACTIVITIES New bank loans 172,000 124,000 Repayment of bank loans (162,000) (116,000) NET CASH FROM FINANCING ACTIVITIES 10,000 8,000 INCREASE/(DECREASE) IN CASH AND CASH EQUIVALENTS 1,396 (7,740) CASH AND CASH EQUIVALENTS AT BEGINNING OF YEAR 45,874 53,614 ANALYSIS OF THE BALANCES OF CASH AND CASH EQUIVALENTS Cash and bank balances 47,270 45,874 13