本钢板材(000761)ST板材2003年年度报告摘要（英文版）

BENGANG STEEL PLATES CO., LTD. Annual Report 2003 Summary (Upon International Accounting Standard) §1 Important Statements： 1.1 The Board of Directors and the directors of the Company guarantee that there are no significant omissions, fictitious or misleading statements carried in the Report and we will accept individual and joint responsibilities for the truthfulness, accuracy and completeness of the Report. This is the summary abstracted from the complete version of Annual Report 2003, for details please refer to the complete version. 1.2 No Director(s) declares disagreement on the truthfulness, accuracy and completeness. 1.3 All of the members of the Board of Directors presented the board meeting. 1.4 Ho and Ho & Co., CPA issued the auditors’report without qualified opinion. 1.5 The Chairman of the Board – Mr. Li Mohua, Chief Accounting Supervisor – Mr. Liang Guangde, Administrator of the Accounting Department – Ms. Dong Xin hereby declare: the truthfulness and completeness of the report are guaranteed. §2 Company Profile 2.1 Basic Information Stock Name ST Bancai ST Bancai B Before being changed: Bengang Bancai, Bengang Bancai B Stock Code 000761 200761 Stock listed in Shenzhen Stock Exchange Registered Address No.16, Renmin Road, Pingshan District, Benxi City, Liaoning Province Post code 117000 Website N/A Email bgbctwg@mail.bxptt.ln.cn 1 2.2 Liaisons Secretary of the Board Representative of Stock Affairs Name Liang Guangde Sun Zhongzheng No.16, Renmin Road, Pingshan District, No.16, Renmin Road, Pingshan District, Address Benxi City, Liaoning Province Benxi City, Liaoning Province Tel 0414-7828360 0414-7827344 Fax 0414-7828360 0414-7827004 Email Bgbcgdl@online.Ln.cn Bgbcszz@online.Ln.cn §3 Financial Highlights 3.1 Major accounting data (in RMB10 thousand) Change of current 2003 2002 2001 year than prev. year Major business 11,210,196 7,750,477 44.64% 5,242,814 turnover Total profit 728,906 545,816 33.54% 298,393 Net profit 473,512 346,120 36.81% 266,131 Net profit deducted non-recurring 461,564 367,280 25.67% 266,131 gain/loss Change of end of End of 2001 End of 2003 End of2002 current year than end of prev. year Total Assets 7,398,116 7,319,306 1.08% 6,060,014 Shareholders’equity ( minority 4,646,385 4,172,874 11.35% 4,026,747 shareholders’equity not included) Net cash flow generated by 854,077 764,227 11.76% 90,287 business operation 2 3.2 Major accounting indices (in RMB) Change of current year than 2003 2002 2001 prev. year Earnings per share 0.42 0.30 40.00% 0.23 Earnings per share - -- -- -- Net earnings / capital ratio 10.19% 8.29% 22.92% 6.61% Net earnings per share ratio based on deducting 9.93% 8.80% 12.84% 6.61% of non-recurring gain/loss Net Cash flow generated by business operation 0.75 0.66 12.16% 0.08 End of End of Change of current year than End of 2003 2002 end of prev. year 2001 Net asset per share 4.09 3.67 13.60% 3.54 Net asset per share adjusted 4.08 3.67 13.56% 3.54 3.3 Discrepancy of domestic and international accounting standards √Applicable □Non –Applicable In RMB10 thousand Upon Domestic Accounting Standard Upon IAS Net profit 52,472.45 47,351.00 Statement about the Refer to the auditors’report variance 3 §4. Change of Share Capital and Shareholders 4.1 Change of shares (in shares) End of prev. Changed by End of current year (+,-) year I. Non-current Shares 1. Promoters’shares 616,000,000 0 616,000,000 Including: State-owned shares 616,000,000 0 616,000,000 Domestic corporate shares 0 0 Foreign corporate shares 0 0 Others 0 0 2. Raised corporate shares 3. Employees’shares 30,000 0 30,000 4. Preferred Shares or others Total non-current shares 616,030,000 0 616,030,000 II. Current Shares 1. RMB conventional shares 119,970,000 0 119,970,000 2. Domestically listed foreign investment 400,000,000 0 400,000,000 shares 3. Overseas listed foreign investment shares 0 0 4. Others 0 0 Total current shares 519,970,000 0 519,970,000 III. Total Shares 1,136,000,000 0 1,136,000,000 4 4.2 Top 10 shareholders (in shares) Total shareholder accounts at the end of report term: 96,835 Name of Shareholder Changed Shares Share Category of Frozen Property of in the held at the end portion share share current of year % (current / year non current) Benxi Steel (Group) Co., Ltd. 0 616,000,000 54.23 Non-current 0 State-owned DEUISCHE BANK AG LONDON 0 6,991,350 0.62 Current 0 Foreign DIAM CHINA OPEN MOTHER 0 3,050,071 0.27 Current 0 Foreign FUND Li Weiqin 0 2,579,300 0.23 Current 0 Foreign YULAN DANG DE FE 0 2,539,968 0.22 Current 0 Foreign Zhen Xinrong 0 2,207,500 0.19 Current 0 Foreign Zhang Zhukun 0 1,953,800 0.17 Current 0 Foreign Fang Yinjun 0 1,785,740 0.16 Current 0 Foreign Huang Liandi 0 1,763,924 0.16 Current 0 Foreign Zhang Yongqian 0 1,570,000 0.14 Current 0 Foreign Statement on associated relationship There isn’t any associated relationship between the 1st shareholder and or “acting in concert”. the other shareholders among the top-10 list. None of them are regarded as “acting in concerts” in accordance with “The rules of information disclosure on change of shareholding.” Shareholders beyond the top-10 list are unknown for their condition of “associated relationship” and “acting in concert”. 5 Top 10 holders of current shares at the end of the report term (in shares) Name of the shareholder Shares held (B shares) Share category DEUISCHE BANK AG LONDON 6,991,350 Current B share DIAM CHINA OPEN MOTHER 3,050,071 Current B share FUND Li Weiqin 2,579,300 Current B share YULAN DANG DE FE 2,539,968 Current B share Zhen Xinrong 2,207,500 Current B share Zhang Zhukun 1,953,800 Current B share Fang Yinjun 1,785,740 Current B share Huang Liandi 1,763,924 Current B share Zhang Yongqian 1,570,000 Current B share NTC/Municipal Employees Retirement 1,413,000 Current B share System of Michigan Statement on associated relationship or The relationship among the top 10 current share holders are “acting in concert”. unknown. 4.3 Controlling shareholders and practical controllers 4.3.1 Change of controlling shareholders and practical controllers. □Applicable √Non –Applicable 4.3.2 Particulars about controlling shareholders and practical controllers: Name of shareholder: Benxi Steel (Group) Co., Ltd. Legal representative: Zhang Yingfu Incorporated on: July 10, 1996 Registered capital: RMB4.7 billion Business property: sole state-operated, authorized operation Business range: smelt of steel and iron, mining, steel plate rolling, make of oxygen, making of pipes, power plant, coal chemistry, specialized steel, heating, supplying of water/electricity/air/gas, process of metal, maintaining and building of machinery and equipment, construction and installation, railway and road transportation, cross board trading, tourism, construction materials, fire-resistance materials, electronic instruments, material supplying, real-estate developing, science research, design, information service 6 §5 About the Directors, Supervisors, Senior Managements, and Employees 5.1 Change of share holding Name Position Sex Age Term Shares Shares held at held at the the beginning end of of year year Li Mohua Chairman/GM Male 55 2003/07/26-2006/07/26 0 0 Yu Vice Chairman Male 51 2003/07/26-2006/07/26 10,000 10,000 Tiancheng Director Vice Liang GM, Secretary of Male 49 2003/07/26-2006/07/26 10,000 10,000 Guangde the Board Li Yu Director Male 49 2003/07/26-2006/07/26 0 0 Zhang Guiyu Director Male 43 2003/07/26-2006/07/26 0 0 Employees’ Guan Representative Male 57 2003/07/26-2006/07/26 0 0 Dianguo Director Independent Zhong Tianli Female 48 2003/07/26-2006/07/26 0 0 director Xue Independent Male 50 2003/07/26-2006/07/26 0 0 Xiangxin director Chairman of the Liu Junyou Supervisory Male 51 2003/07/26-2006/07/26 0 0 Committee Vice Chairman of He Xusheng the Supervisory Male 53 2003/07/26-2006/07/26 0 0 Committee Sun Xiao Supervisor Male 59 2003/07/26-2006/07/26 0 0 Employees’ Zhang Representative Male 54 2003/07/26-2006/07/26 0 0 Fuchen Supervisor Employees’ Wu Wei Representative Male 49 2003/07/26-2006/07/26 10,000 10,000 Supervisor 7 5.2 Particulars about directors and supervisors take job position in any of the shareholders. √Applicable □Non –Applicable Name Holds position in Position Job term Takes salary or allowance from the shareholding party ? Li Mohua Benxi Steel (Group) April 1996 till Co., Ltd. / director present No Yu Tiancheng Benxi Steel (Group) February Yes Co., Ltd. / director, GM 2001till present Li Yu Benxi Steel (Group) February Yes Co., Ltd. / chief of accounting department 2000 till present Liu Junyou Benxi Steel (Group) August 2000 Yes Co., Ltd. / secretary of discipline committee till present He Xusheng Benxi Steel (Group) January 1998 Yes Co., Ltd. / chief of planning department till present Sun Xiao Benxi Steel (Group) May 1999 till Yes Co., Ltd. / former chief of auditing department present 5.3 Annual payroll of the directors, supervisors and senior management (in RMB10 thousand) Overall annual payrolls 29.22 The annual payrolls of the top-3 directors 19.10 The annual payrolls of the top-3 managements 19.10 The allowances for independent directors RMB20 thousand / people.year Extra benefits for independent directors RMB500 per year of transportation allowance The directors and supervisors who are not taking salaries Yu Tiancheng Li Yu Liu Junyou He Xusheng Sun Xiao from the Company Range of salary Number of people 1.5-4 2 4-5 3 5-10 1 10 or up 0 8 §6. Report of the Board of Directors 6.1 Analyzing of overall business status for the report term In year 2003, the national economy was showing a rapid developing trend. Under this background, the lower industries of iron and steel industry were growing steadily, and brought up the requirement for steel products. That led to dramatic increasing of sales price. In the meantime, as effected by the increasing of overall productivity of domestic steel industry, the upper supplying of resources became tight though. That naturally led to continuous climbing up of raw material prices. Anyhow, the Company reached its business target in 2003 and achieved good result. The Company realized output of hot-rolling plate of 4.02 million ton, which was 25.63% over that of the pervious year, sales volume of hot-rolling plate of 4.14 million ton, which was 39% over that of the pervious year, business turnover of RMB11,210,200,000 which was 44.64% over that of the previous year; major business profit of RMB957,720,000, which was 15.64% over that of the previous year; net profit of RMB525,280,000, which was 36.47% over that of the previous year. As proposed by the 16th convention of the CCP, the old industrial bases of Northeast area will be supported to speed up their reforming and adjustment. The Company is standing upon the long-term development strategy and keeps following with the national arrangement, put its target on building the Company into a base of fine-quality steel plate products, and modern enterprise and international competitor. 9 6.2 Distribution of major business on categories of business or products (in 10 thousand RMB) Change of Major Change of Major Change of gross Industry or Major business Major business Gross profit ratio business turnover business cost over profit ratio over products turnover cost % over the last year the last year ％ the last year ％ ％ Steel 1,121,019.65 1,023,414.91 8.71 44.64 48.28 -0.19 Incl. Related 549,140.38 509,654.96 7.19 61.49 70.26 39.93 transaction Molten steel 19,376.98 19,832.61 -2.35 25.84 23.54 44.71 Steel billet 237.24 296.73 -25.08 -80.79 -80.78 0.28 Continuous 20,176.84 19,528.18 3.21 -83.08 -82.91 -23.02 casting billet Hot Plate 1,065,270.77 966,794.76 9.24 71.68 79.76 -29.36 Disposal of 6,791.92 7,854.69 -15.65 -29.30 -21.35 -296.20 materials Others 9,165.89 9,107.93 0.63 1.32 1.50 -23.17 Related 549,140.38 509,654.96 7.19 61.49 70.26 39.93 transaction Pricing principle of related Pricing policies of related transactions are based upon relative agreements or normal transaction market clauses. Necessity and continuous of related Related transactions of the Company is for long-term and indispensable. transaction 6.3 Major business distribution in territories: (in 10 thousand RMB) Region Turnover Changed over previous year（％） North 174,920.63 73.92 North-east 550,590.62 16.49 East 316,175.22 167.46 Mid-south 57,974.52 181.14 North-west 798.46 -46.06 South-west 59.52 42.74 Exported 20,500.67 -66.66 10 6.4 Major purchase and sales (in 10 thousand RMB) Total of purchase from top-5 vendors 862,742.29 Portion in the total purchase 96.09% Total of sales to top-5 buyers 462,388.98 Portion in the total sales 41.45% 6.5 Operation of the shareholding companies (applicable for the company which the investment earnings takes more than 10% or over.) □Applicable √Non - Applicable 6.6 Causations of significant changes occurred on the major business and its structure. □Applicable √Non - Applicable 6.7 Causations of significant changes occurred on the profitability of major business comparing with the previous year □Applicable √Non - Applicable 6.8 Causations of significant change of the operation result and profit structure comparing with the previous year □Applicable √Non –Applicable Causations of significant change occurred in the entire financial status comparing with the previous year. □Applicable √Non –Applicable 6.9 Influence on the business operation of the company from the changing of business environment, macro policies, laws and regulations □Applicable √Non –Applicable 6.10 Fulfilling of profitability forecasting □Applicable √Non –Applicable 6.11 Fulfilling of the business target □Applicable √Non –Applicable 6.12 Utilizing of raised fund □Applicable √Non –Applicable Particulars about changing of utilization □Applicable √Non –Applicable 11 6.13 Particulars about projects invested by non-raised fund √Applicable □Non –Applicable In RMB10 thousand Specification of the project Amount of the project Progress Profitability 9#225 crane project 808 Completed Not in operation yet Rolling collector project 567 Completed Not in operation yet Slurry transporting project 43 Completed Not in operation yet Dock crane project 152 Completed Not in operation yet Zero electric motor project 34 Completed Not in operation yet Molten iron pre-process project: 2964 Invested 152 Not in operation yet 13 sector project 1360 Invested 1211 Not in operation yet Roller polish workshop 6031 Invested 2073 Not in operation yet reconstruction project 3# heating furnace project 7800 Invested 491 in Not in operation yet preparation 4# converter project 87587 Invested 934 in Not in operation yet preparation Furnace disassembling machine 220 Invested 166 in Not in operation yet project preparation 5# heating furnace project 9146 Invested 11 in preparation Not in operation yet Supplementary reconstruction 21093 Invested 2949 in Not in operation yet of continuous rolling project preparation Total 137805 --7987 -- 6.14 Statement of the Board of Directors on the “non-standard comments” of the public accountant □Applicable √Non –Applicable 6.15 Plan of the Board for the coming new year √Applicable □Non –Applicable 2004 will be an important year for the national government to implement the strategy of promoting the reborn of old industrial bases in northeast region of China. The Company will go for the leader of the wave. 1. Through upgrading of production management and fully developing of potentials, the Company sets its goal unhesitatingly at 5.2 million ton of steel and 4.07 million ton of hot-rolled plate. 2. With closer observing of the market, the marketing strategies will be tuned flexibly with stress laid on domestic market. Focuses will be put on the regions of northeast, north, Shandong province, and manufacturing industries of automobile, home appliance, tube, and container. Developing of certain key types of products will also be on the important place. Under the integrated marketing strategy of 12 fully adopting the advantages of the clients, the Company will continue to co-operate with its clients on developing of new steel products. 3. Technological reforming and researching of new products are also the key points of the Company in the coming year. The Company will do great effort to ensure the product line to be following with the requirement of the market, and the overall strategy of the national government. Attention will be concentrated on those “double-high”products which are badly needed in the domestic market and will bring the Company new growth point of profitability. 4. Targeting at the advanced managing technologies of the world, the Company is also wishing to increasing the business efficiency through adopting of adopting of mature management standards. In the coming year, the ISO9001:2000 quality management system will be practiced in every aspects of the Company’ s business with viewing of greatly improve the quality control standard. Practices of assessment and control on process costs will be carried further into each process of production. The purpose is set at dramatically reducing the process costs in comparison with the previous year, and reaches the industrial average level in energy consuming. Facing with the severe condition of resource supplying market, the purchasing management will also be practically improved to reduce the costs in every possibility. In financial aspects, the Company will keep improving the capital structure and speed up the financial circle. Practically enforce the accounting management to reduce the controllable expenses by 10% at the basis of the previous year. Profitability prediction for the coming new year □Applicable √Non –Applicable 6.16 Profit distribution or capitalization of capital public reserves for the current term As audited by Beijing Tianhua CPA, the Company has realized the net profit of RMB524,724,466.62 in year 2003. In accordance with the Article of Association of the Company, 10% of the net profit will be drawn as statutory surplus reserves, which is amounted to RMB52,472,446.66, and 5% of the net profit will be drawn as public welfare fund amounted to RMB26,236,223.33. After the drawing of the statutory surplus reserves and public welfare fund, the net profit distributable for year 2003 is amounted to RMB446,015,796.63, plus the distributable profit retained from the end of year 2002 amounted to RMB1,034,761,624.19, the total profit distributable for this time is amounted to RMB1,480,777,420.82. Therefore the profit distribution plan for year 2003 is as: upon the total capital share of 1,136,000,000 at December 31st, 2003, cash dividend of RMB2.00 (tax included) will be distributed to each 10 shares. Namely RMB227,200,000.00 will be distributed as common share dividend in total. The retained of RMB1,253,577,420.82 will be carried over to the next year as distributable profit. 13 §7. Significant Events 7.1 Assets acquisition □Applicable √Non –Applicable 7.2 Assets placing √Applicable □Non –Applicable In RMB10 thousand Specification of the Date of the placing Price Net profit contributed to Gain/loss due Provide pricing transaction party and the the Company since the to the placing policy if it is a asset placing beginning of year till the related date of placing transaction Scrap of assets Jan 01, 2003 1,288.00 0.00 2,362.00 No Impact of the acquisition and placing on the continuity and stability of the Company’s business and executive team. 7.3 Significant guarantees □Applicable √Non –Applicable 7.4 Associated credits and debts √Applicable □Non –Applicable In RMB10 thousand Provide fund to related Receiving fund from related Related parties parties parties Occurred Balance Occurred Balance Bengang International Trading 149.00 244.00 185.00 185.00 Bengang Group -21,447.00 151,013.00 31,065.00 36,954.00 Bengang Group Fire Resistance Co., Ltd. 4.00 4.00 0.00 0.00 Bengang Construction Co. 10.00 10.00 4,572.00 4,572.00 Bengang Group Steel Processing and 450.00 450.00 2,869.00 2,869.00 Logistics Co., Ltd. Bengang Group Special Steel Co., Ltd. 1,341.00 6,049.00 0.00 0.00 14 Dalian Boluole Steel Tube Co., Ltd. 140.00 140.00 1,032.00 2,628.00 Guang Zhou Free Trade Zone Sales Co., Ltd. 671.00 671.00 -1,345.00 0.00 Shanghai Bengang Material Co., Ltd. 273.00 273.00 0.00 0.00 Tianjin Benchu Materials Trading Co., Ltd. 2,444.00 2,444.00 0.00 0.00 Tianjing Bengang Steel Iron Trading Co., 1,626.00 1,626.00 10,868.00 10,868.00 Ltd. Wuxi Bengang Sales Co., Ltd. 6,868.00 6,868.00 -255.00 0.00 Xiamen Bengang Sales Co., Ltd. 637.00 637.00 0.00 0.00 Yantai Bengang Sales Co., Ltd. 1,350.00 1,350.00 2,746.00 2,746.00 Bengang No.2 Furnace Construction Team 0.00 0.00 -126.00 0.00 Bengang No.2 Factory Labour Service Team 0.00 0.00 -314.00 0.00 Bengang No.2 Labor Service Construction 0.00 0.00 -92.00 0.00 Team Bengang Rolling Factory 0.00 0.00 11.00 11.00 Bengang Gongyou Industrial Co. 0.00 0.00 -103.00 0.00 Bengang Group Electronic Co. Ltd. 0.00 0.00 173.00 173.00 Bengang Group International Trading 0.00 0.00 323.00 323.00 Bengang Trucking Co. 0.00 0.00 377.00 377.00 Bengang Group Institution 0.00 0.00 107.00 107.00 Bengang Construction 0.00 0.00 6,688.00 6,688.00 Bengang Industrial Co. 0.00 0.00 739.00 739.00 Bengang Special Steel Installation Co. 0.00 0.00 72.00 757.00 Bengang Xi’an Materials Trading Co., Ltd. 0.00 0.00 235.00 235.00 Bengang Metallurgy Senior Technical School 0.00 0.00 115.00 115.00 Bengang Slag Co. 0.00 0.00 562.00 562.00 Bengang Group Machinery Plant. Co. 0.00 0.00 885.00 885.00 Bengang Group Tengda Holdings Co., Ltd. 0.00 0.00 -17.00 662.00 Benxi Steel Co, Steel Rolling Equipment 0.00 0.00 -81.00 0.00 Plant Changchun Bengang Sales Co. Ltd. 0.00 0.00 863.00 863.00 Haerbin Bengang Trading Co., Ltd. 0.00 0.00 2,298.00 2,298.00 15 Jufengde Development Co. 0.00 0.00 -120.00 348.00 Nanjing Bengang Sales Co., Ltd. 0.00 0.00 -28.00 0.00 Shanghai Bengang Sales Co., Ltd. 0.00 0.00 -290.00 0.00 Shenyang North Bengang Sales Co., Ltd. 0.00 0.00 1,791.00 1,791.00 Total -5,484.00 171,779.00 65,805.00 77,756.00 7.5 Consigned financing □Applicable √Non –Applicable 7.6 Fulfilling of commitment event □Applicable √Non –Applicable 7.7 Significant lawsuit and arbitration □Applicable √Non –Applicable 7.8 Particulars about the independent directors As empowered by the relative laws and regulations and Article of Association of the Company, the independent directors presented every meeting of the Board in the report term, they performed their duties properly and took active role in the decision-making processes of the Board. They were practically protecting the benefits of the investors and the entire company. §8 Report of the Supervisory Committee In accordance with the Company Law, Securities Law, and Article of Association, the supervisory committee issues the following independent opinion on the accounting staffs, directors and senior executives. 1. Operation of the Company in respecting of relative law. The Committee regards the Board of Directors and the management of the Company were operating in respect to the terms of the Article of Association, the Company Law, the Managing Standard of Public Companies, Rules of the Shareholders’General Meeting and Rules of the Board Meeting. The making and implementing of the significant decisions were scientific and legal. Therefore ensures the legality of operation of the Company. The Committee found no illegal behavior violating the Article of Association, or harming the benefits of the Company and the shareholders took place with the directors, the general manager and other senior managements in executing of their duties. 2. Inspection on the financial situations of the Company The Committee undertook inspections on the accounting system and financial situation of the Company. In the opinion of the Supervisory Committee, the financial report truly reflected the Company’ s financial position and operation result of the year 2003. 16 3. In the report period, the Company had not been involved in such activities as acquisition and placing of assets, under-table transactions or harming the benefit of the shareholders or causing losses of the assets of the Company. 4. Related transactions occurred in the report term were on fair base and harmed no benefit of the Company. 17 §9. Financial Report 9.1 Auditors’opinion: Refer to the Annual Report 9.2 Financial statements Income statement for the year ended 31st December 2003 (Expressed in Renminbi Thousand Yuan) Note 2003 2002 RMB’000 RMB’000 Turnover 4 11,210,196 7,750,477 Cost of sales (10,295,582) (6,966,569) Gross profit 914,614 783,908 Other operating income 5 5,479 - Selling expenses (61,346) (84,389) Administrative expenses (51,303) (50,293) Other operating expenses 6 (3,364) (31,582) Profit from operations 7 804,080 617,644 Net finance costs 8 (75,174) (71,828) Profit before tax 728,906 545,816 Income tax expenses 9 (255,394) (199,696) Net profit for the year 473,512 346,120 Earnings per share- basic 10 RMB0.42 RMB0.30 2 Balance sheet as at 31st December 2003 (Expressed in Renminbi Thousand Yuan) Note 2003 2002 RMB’000 RMB’000 (Re-stated) Assets Non-current assets Property, plant and equipment 13 3,346,888 3,789,049 Construction in progress 14 94,149 11,513 Deferred tax assets 15 14,713 24,509 Total non-current assets 3,455,750 3,825,071 Current assets Inventories 16 841,007 732,496 Amount due from related companies 17 1,742,177 1,713,779 Accounts receivable 18 17,265 2,324 Bills receivable 273,555 122,648 Prepaid expenses and other current assets 19 34,815 8,314 Prepaid tax 20 30,352 18,005 Bank balances and cash 1,003,195 896,669 Total current assets 3,942,366 3,494,235 Total assets 7,398,116 7,319,306 3 Balance sheet as at 31st December 2003 (Expressed in Renminbi Thousand Yuan) Note 2003 2002 RMB’000 RMB’000 (Re-stated) Equity and Liabilities Shareholders’equity Share capital 22 1,136,000 1,136,000 Reserves 23 3,510,386 3,036,874 4,646,386 4,172,874 Non-current liabilities Bank loans –repayable after one year 24 325,688 928,597 Current liabilities Amount due to related companies 25 777,566 60,630 Accounts payable 26 109,403 110,714 Bills payable 20,756 - Other payable and accrued charges 27 70,392 107,711 Receipt in advance 834,542 1,260,661 Short-term bank loans 24 - 678,119 Bank loans- repayable within one year 24 613,383 - Total current liabilities 2,426,042 2,217,835 Total liabilities 2,751,730 3,146,432 Total equity and liabilities 7,398,116 7,319,306 The financial statements on pages 2 to 28 were approved and authorized for issue by the Board of Directors on 20th April 2004 and are signed on its behalf by: 4 Statement of changes in equity for the year ended 31st December 2003 (Expressed in Renminbi Thousand Yuan) Total equity RMB’000 Balance at 1st January 2002 4,026,747 Payment of 2001 final dividends (199,993) Net profit for the year 346,120 Balance at 31st December 2002 and 1st January 2003 4,172,874 Net profit for the year 473,512 Balance at 31st December 2003 4,646,386 5 Cash flow statement for the year ended 31st December 2003 (Expressed in Renminbi Thousand Yuan) 2003 2002 RMB’000 RMB’000 Profit from operations 804,080 617,644 Adjustments for: Depreciation on property, plant and equipment 455,762 420,594 Impairment loss on property, plant and equipment - 25,620 Impairment losses on property, plant and equipment written back on disposal (25,963) (7,157) Loss on disposal of property, plant and equipment 23,615 10,131 Unrealized exchange loss (20,062) (15,764) Operating cash flows before movements in working capital 1,237,432 1,051,068 (Increase) decrease in inventories (108,511) 91,931 Increase in amount due from related companies (28,398) (602,760) Increase in accounts receivable (14,941) (984) (Increase) decrease in bills receivable (150,907) 64,492 Decrease in prepaid tax 55 117,221 (Increase) decrease in pre-paid expenses and other current assets (26,501) 2,706 Increase (decrease) in amount due to related companies 716,936 (1,690) (Decrease) increase in account payable (1,311) 51,706 Increased (decrease) in bills payable 20,756 (6,900) (Decrease) increase in receipt in advance (426,119) 300,084 Increase (decrease) in other payable and accrued charges (37,319) (31,997) Cash generated from operations 1,181,172 1,034,877 Income tax paid (258,000) (198,000) Interest paid (67,389) (72,132) Bank charges paid (1,706) (518) Net cash from operating activities 854,077 764,227 1 Cash flow statement for the year ended 31st December 2003 (Expressed in Renminbi Thousand Yuan) 2003 2002 RMB’000 RMB’000 Net cash from operating activities 854,077 764,227 Investing activities Receipt of interest income 13,983 4,191 Proceeds from disposal of property, plant and equipment 5,598 6,966 Acquisition of property, plant and equipment (99,487) (145,360) Increase in fixed deposits with maturity more than three months (109,505) (465,111) Net cash used in investing activities (189,411) (599,314) Financing activities Dividends paid - (199,993) New bank loans - 662,056 Repayment of bank loans (667,645) (278,738) Net cash (used in) from financing activities (667,645) 183,325 (Decrease) increase in cash and cash equivalents (2,979) 348,238 Cash and cash equivalents at beginning of year 431,558 83,320 Cash and cash equivalents at end of year (note 21) 428,579 431,558 9.3 Comparing with the previous annual report, no changes been made on accounting policies, accounting estimating and method of calculating. 9.4 Comparing with the previous annual report, the range of consolidating has not been changed. 2