深基地Ｂ(200053)2003年年度报告摘要（英文版）

SHENZHEN CHIWAN PETROLEUM SUPPLY BASE CO LTD ABSTRACT OF 2003’S ANNUAL REPORT §1 Important Notes 1.1 The Board of Directors guarantees that there exist no omission, misstatement, or misleading information in this annual report. The Board of Directors is responsible, individually and jointly, for the authenticity, accuracy and integrity of the information herein. The Annual Report is written in both English and Chinese. In case of conflict between the two versions, Chinese version prevails. 1.2 There is no director who cannot guarantee the authenticity, accuracy and integrity of the content of this annual report or who has different opinion. 1.3 There were seven directors attended the Board meeting. Madam Wang Fen and Mr. Lin Zhijun did not attend the meeting but aut horized Mr. Han Guimao and Mr. Bai Youzhong to vote for them respectively. 1.4 Shenzhen Dahua Tiancheng Certified Public Accountants and PricewaterhouseCoopers both presented audit reports with standard and no-reserved audit opinion for our company. 1.5 Dr. Fu Yuning, the Chairman of the Board of Directors, Mr. Cui Wei, the Financial Controller, and Ms. Yu Zhongxia, the Financial Manager, guarantees the authenticity and integrity of the financial results of this annual report. §2 Company Profile 2.1 Company Profile Stock Series Shenzhen Base (B share) Stock Code 200053 Stock Exchange Shenzhen Stock Exchange Office Place Base Building, Chiwan, Nanshan District, Shenzhen, PRC Post Code 518068 Website for Publishing the Annual Report E-mail Address sa@cpsb-cn.com 1 2.2 Contacts and Contact Means Secretary of Company’s Board Securities Representatives Name Fu Jialin Yu Zhongxia, Ren Qianli Address Base Building, Chiwan, Nanshan Base Building, Chiwan, Nanshan District, Shenzhen, PRC District, Shenzhen, PRC Tel （0755）26694211 （0755）26694211 Fax （0755）26694227 （0755）26694227 E- mail sa@cpsb-cn.com sa@cpsb-cn.com §3 Accounting Data and Financial Index Abstract 3.1 Main Accounting Data UNIT:RMB Up/down 2003（this year） 2002（last year） (%)compared with 2001 last year Income from main 14.8 109,619,298.98 95,473,649.27 102,797,604.04 business lines Total Profit 83,556,842.27 70,489,303.20 18.5 68,146,622.43 Net Profit 75,349,896.88 62,939,454.06 19.7 60,180,567.41 Net Profit after 19.5 deducting 75,423,195.17 63,113,825.47 60,328,521.74 non-recurring gains and losses Up/down 2003 year-end 2002 year-end 2001year-end (%)compared with （this year-end） （last year-end） last year-end Total assets 700,107,667.89 638,718,242.00 9.6 616,844,732.09 Shareholders’ equity (minorities’ 525,280,104.52 equity excluded) 632,099,728.40 556,749,831.55 13.5 Net cash flows arising from 68,836,676.69 72,864,975.72 -5.5 84,704,587.29 operating activities 2 3.2 Main Financial Index Up/down 2003（this year） 2002（last year） (%)compared 2001 with last year Earnings per 19.8 share 0.327 0.273 0.261 (%) Return on equity 5.4 11.92% 11.35 11.46 (%) Return on equity calculated on the base of net profit after deducting 11.93% 11.34% 11.49 non-recurring 5.3 gains and losses (%) Net cash flows per share arising -5.4 0.299 0.316 0.367 from operating activities Up/down 2003 year-end 2002 year-end 2001 year-end (%)compared （this year-end） （last year-end） with last year-end Net assets per 13.55 2.741 2.414 2.267 share Net assets per 13.82 share after 2.693 2.366 2.220 adjustment 3.3 Differences between International and Domestic Accounting Standards √Applicable □Inapplicable Unit：RMB Domestic Accounting Standards International Accounting Standards Net Profit 75,349,896.88 75,349,896.88 Explanation for Nil Difference 3 §4 Change of Share Capital and Shareholders 4.1 Form for Change of Share: Unit: share Before Change in number of shares After change rights bonus conversion others subtotal change shares of reserves to shares 1. Untradable shares a. Public promoter’s shares State owned share Domestic legal entity owned 119,420,000 119,420,000 share Foreign investment legal 51,180,000 51,180,000 entity owned share Others b. Shares raised from legal entity c. Employee’s shares d. Preferred shares Total 170,600,000 170,600,000 2. Tradable shares a. A shares b. B shares c. Overseas listed shares 60,000,000 60,000,000 d. Others Total 60,000,000 60,000,000 3. Total of shares 230,600,000 230,600,000 4 4.2 Holding Information of the Top Ten Shareholders and the Top Ten Tradable-share Shareholders are listed as follow Unit: share Total of Shares by the end of 13,106 report period Holding information of top ten shareholders Shareholder’s name（full Change in Shares Rate Category Shares State name） this year holding by the （％） (tradable or impaw shareholder end of this untradable) ned or or Foreign year frozen investment shareholder 0 119,420,000 51.79 untradable 0 Domestic CHINA NANSHAN Legal DEVELOPMENT entity shares (GROUP) INCORPORATION OFFSHORE JOINT 0 51,180,000 22.19 untradable 0 Foreign SERVICES (BASES) CO investment OF SGP PTE LTD legal entity shares SEMBCORP 0 2,087,093 0.91 tradable 0 Foreign LOGISTICS LTD investment shareholders Wang Meilan 460,000 0.20 tradable unkn own BIN LIANG 306,737 0.14 tradable unkn own Zhang Yanqiang 288,800 0.13 tradable unkn own Ma Zeqi 266,200 0.12 tradable unkn own Zhou Liqing 251,991 0.11 tradable unkn own Wu Huixia 200,300 0.09 tradable unkn own WONG MAN SHU 200,000 0.09 tradable unkn own 5 Explanation for the Affiliated Among the top ten shareholders, the domestic legal entity shareholder China Nanshan Development (Group) Incorporation Relations or United Action of the Top has no affiliated relations with other shareholders and does not Ten Shareholders fall into the scope of united action person stipulated by “Regulation of Information Disclosure of the Change of Shareholding of listed company “. Foreign investment legal entity shareholder OFFSHORE JOINT SERVICES (BASES) CO OF SGP PTE LTD is the filiale held by the company’ s third major shareholder SEMBAWANG MARINE & LOGISTICS LTD ( now changed its name to SEMBCORP LOGISTICS LTD). It is unknown that whether other tradable- share shareholders fall into the scope of united action person. Holding information for the top ten tradable-share shareholders Shareholder’s Name (full Shares holding by the end of Category（A-share、B-share、H-share or name) the year others） SEMBCORP LOGISTICS 2,087,093 B LTD Wang Meilan 460,000 B BIN LIANG 306,737 B Zhang Yanqiang 288,800 B Ma Zeqi 266,200 B Zhou Liqing 251,991 B Wu Huixia 200,300 B Wong Manshu 200,000 B Xu Yuenan 196,200 B Lee Hoi 191,500 B Explanation for the Affiliated Relations or United Action of the unknown Top Ten Tradable-share Shareholders 4.3 Information of Holding Shareholders and Substantial Controller of Holding Shareholders 4.3.1 Information of Holding Shareholders and Substantial Controller of Holding Shareholders □Applicable √Inapplicable 6 4.3.2 Details of Holding Shareholders and Other Substantial Controller 1. China Nanshan Development (Group) Incorporation Legal representative: Fu Yuning Date of registration: October 1982 Business scope: land development; port transportation, industrial, commercial, real property and tourism; customs bonded warehouses business; etc. 2. Substantial Controller of Holding Shareholders: China Merchant Group Co., Ltd. Legal representative: Qin Xiao Date of registration: October 1986 Registered Capital: 800 million RMB Business Scope: passengers transport and freight by water and land; leasing and deputizing water-land conveyance and equipment; quay and storage business; salvage, refloatation, towage; building, fixing, inspecting and selling ship and offshore petroleum drilling equipment; fixing and inspecting artesian well flat-roof and container; contracting and constructing construction project and offshore petroleum exploitation and providing logistics services; stocking, supplying and selling water-land conveyance; developing traffic undertaking and industrial and commercial enterprise; organizing and managing finance, insurance operation and correlative service operation; developing and managing Shekou industry district. §5 Directors, Supervisors, Senior Executives 5.1 Change of Shareholding of Directors, Supervisors, Senior Executives □Applicable √Inapplicable 5.2 Information of Directors and Supervisors Holding a Post in Shareholder’ s Company √Applicable □Inapplicable Post in the Wether Name Shareholder of the Company Shareholder’s Duration Receiving Company Salary/Allowance Fu China Nanshan Development No Chairman From Dec.,1998 Yuning (Group) Incorporation China Nanshan Development No Wang Fen (Group) Incorporation President From Mar. 2003 China Nanshan Development Vice No Liu Fu From May, 2003 (Group) Incorporation Chairman Zhong China Nanshan Development Vice From Aug., No Jingshen (Group) Incorporation Chairman 2000 Zhu China Nanshan Development No Director From Jun., 2000 Tiansheng (Group) Incorporation Han China Nanshan Development Senior Vice No From Mar. 2002 Guimao (Group) Incorporation President Fan China Nanshan Development Senior Vice No From Dec. 1998 Zhaoping (Group) Incorporation President 7 5.3 Annual Salary Information of Directors, Supervisor and Other Senior Executives Unit: RMB yuan Total of Annual Salary 2.30 million Total of the Top 3 of 0 Directors Total of the Top 3 Senior 1.91 million executives Independent Director 60 thousand for each Allowance Other Welfare of 0 Independent Director Directors and Supervisors Fu Yuning, Xu Siqiang,Han Maokui, Fang Yuguang, Wang Fen, Liu not paid by the company Fu, Zhong Jingshen, Zeng Xilian, Zhu Tiansheng, Fan Zhaoping Amount of Salary Number of Persons 100-200 Thousand 3 Over 200 thousand 3 §6 Report of Board of Directors 6.1 Discussions and Analysis of the Overall Operation Information during the Report Period As the new upsurge of the development of China economy continued, the demand of energy increased. Offshore oil exploration activities in the east part of South China Sea, the company’ s main service area, increased steadily. The profit from main business of the Company was up by 14.8%, among that, profit from businesses correlative to the oil business were up by 25.9%. Other business was increased steadily as well. The profit from main business of the Company reached 5.9%, notwithstanding that the interest income was heavily reduced because of investment activities. The investment income of the company was up by 49%, reached US$3.6 million, and increased mainly because of the excellent performance of the company’ s investor, Shenzhen Chiwan Sembawang Engineering Co., Ltd.. During the report year, the total profit after tax of the company is US$9.1 million and up by 19.7%. The rate of return on equity was 11.92% and up by 5.4%. For the year of 2003, the utilization rates of warehouse and yard reached 96% which was up by 6.6% compared with that of last year. The income was up by 8.8%. Despite keen competition in warehouse service, the company benefited from the demand brought by offshore operation activities and also exploit new customers actively. Therefore, the income rate of storage service increased steadily. Though occupancy rate improved to 70% from 52%, realised income moved marginally higher than the previous year. This was due mainly to a 22 year lease of Chiw an Building to CSE, of which rental was paid in advance for the duration of the lease. 8 Income from Petroleum logistics services increased in large scale because of the increase of the offshore oil exploration business in South China Sea. As to the service of consolidating and packaging containers, there was an increase in the performance as well which made the company’ s resources utilized efficiently. For the year of 2003, company’ s petroleum services and non-oil services are up by 25.9% and 11.7% respectively. By virtue of domestic macro environment of desirable overall economic operation and the increasing requirement of energy, import and export trade, the company has obtained a steady increase in every business area, especially a remarkable increase in the investment income which resulted in the highest level ever of the net profit of US$9.1 million and was up by 19.7% compared with that of the last year. The company has implemented its new investment plan in the year 2003 and taken a good step out by accomplishing the operation of the first stage of Shanghai Baowan International Logistics Center and the equity acquisition of Shenzhen Chiwan Godown Co., Ltd. (Renamed later for Shenzhen Chiwan Logistics Co., Ltd.), which became a solid foundation of the new business development of the company. 6.2 Main Business Statement Categorized by Business or Production Unit：RMB yuan Increase/ Increase/ Increase/ decrease of decrease of decrease of Gross income from cost of main Business or Income for Cost of main gross interest interest main business business line production main business business rate compared rate(%) line compared compared with last year with last year with last year （％） （％） （％） Operation 45,585,929.16 14,438,465.28 68.33 25.83 6.83 8.98 business Office 13,035,504.40 7,574,871.97 41.89 4.38 2.18 3.08 rental Warehouse 45,793,816.94 16,562,414.70 63.83 8.79 2.74 3.45 business CFS 5,204,048.48 3,209,888.47 38.32 11.61 12.64 -1.47 In which: affiliated 12,845,037.24 7,464,192.37 41.89 46.50 10.87 3.08 transaction Price fixing standard for According to the market price affiliated transactions 9 Explain for the necessity and Part of the business of the company continuity of the affiliated transaction 6.3 Main Business Statement Categorized by District Increase/decrease of income from main business line District Income from main business compared with last year（％） Shenzhen 109,619,298.98 14.82 6.4 Information of Customer of Purchase and Sales Total of sales amount 43.69% proportion of the total of the top five sales 47,888,225.72 sales amount customer 6.5 Operation Situation of Company Shareholder (Investment earnings represented over 10% of net profit) √Applicable □Inapplicable Unit: RMB Name of company shareholder Shenzhen Sembawang Engineering Co., Ltd 29,740,026.09 Proportion of net 39.47% Investment profit contributed profit of the during this period company Manufacturing and distributing steel-structured products for Business Company Offshore engineering, land engineering and civil engineering; Scope shareholder after-sale service for self-made product. Net Profit 92,937,582 6.6 Statement for Reasons of Material Change of Main Business and Its Structure □Applicable √ Inapplicable 6.7 Statement for Reasons of Material Change of Main Business’ s Ability to Make Profits (Gross Interest Rate) Compared with that of last year □Applicable √ Inapplicable 10 6.8 Analysis for Reasons of Material Change of Operation Outcome and Profit Structure Compared with those of last year □Applicable √ Inapplicable Analysis for Reasons of Material Change of Overall Financial Situation Compared with those of last year □Applicable √ Inapplicable 6.9 Statement for the Material Cha nge of Manufacture and Operation Circumstances, Macro Policies, Regulations and Laws which had affected, is affecting or will affect the finance situation and business outcome materially. □Applicable √ Inapplicable 6.10 Statement for Accomplishing Profit Estimate √Applicable □Inapplicable Unit：RMB Estimate of profit（this year） Actual amount of this year Income from main 101,853,108 109,619,298.98 business Total amount of profit 68,842,321 83,556,842.27 Net profit 61,496,305 75,349,896.88 Statement for Difference Company’s subsidiary Shenzhen Chiwan Sembawang Engineering Co., Ltd had accomplished the profit estimate in a big scale. 6.11 Statement for Accomplishing Business Plan √Applicable □Inapplicable Unit： Formal business plan for this year Actual amount of this year Income 101,853,108 109,619,298.98 Cost & expenses 52,717,187 56,046,572.31 6.12 Statement for the Use of Collection Funds □Applicable √ Inapplicable Statement for the Change of items □Applicable √ Inapplicable 6.13 Statement for Non-collection Funds Items √Applicable □Inapplicable 11 Item Name Item amount Item Plan Item Earnings Shanghai Baowan 168 million RMB Completed on From 2004 International Logistics yuan Dec., 2003 Center Shenzhen Chiwan 37.3797 million Purchase Consolidate Report Logistics and RMB yuan Completed on Form in 2004 Distribution Co., Ltd Dec., 2003 Share Purchasing Total 205.3797 million RMB yuan 6.14 Statement by Board of Directors for “Non-standard Opinion”of Certified Public Accountants □Applicable √ Inapplicable 6.15 Business Plan of Board of Directors for the Next Year √Applicable □Inapplicable By virtue of the rapid increase of domestic economy, we shall expect a continuous increase in oil & gas production and petroleum logistics services in the coming ten years, which would result in a sustained increase in the petroleum service business of the company. Non-petroleum business, which accounted for 20% of the annual revenue, had played an important role in maintaining the operating earnings of the company. Import and export trade will be largely promoted by a new round of economic development. We shall be able to make more efficient utilization of the resources and facilities of the company, and to raise the income of non-petroleum business by taking full advantage of increasingly infrequent coastline and land resources. The offshore engineering sector will be a continual increase. We shall expect a good return rate of Shenzhen Chiwan Sembawang Engineering Co. Ltd., which is the pioneer of offshore engineering activities. Chiwan Sembawang Company will continue to enhance its productivity to provide a firm foundation for rapid increase of the company business. The contribution from the logistics sector will be an important source of growth of the company’ s revenue and profit. The commission of Shanghai first phase logistics park in Oct 2003 has laid a strong foundation for economic returns: We expect this to contribute over 15% to our total turnover and net profit respectively. The newly acquired Shenzhen Chiwan Logistics Company is undergoing strategic restructuring process, to promote utilization of customs bonded and supervision function; to promote total city and regional distribution chain to importers and manufacturers; and to utilize the company’ s vintage location to promote port related logistics. Barring any unforeseen circumstances, the forecast state of our various segmental businesses is indicative of yet another good year and beyond for the company. The company will expand its logistics investment. The investment to the second stage of Shanghai Baowan Logistics Park and Beijing Logistics Park projects will be examined by the Board and the AGM and be implemented within the year 2004. The board of directors will try to 12 seize the trend of the logistics industry in accordance with the developing plan of the company, to perfect the function of every logistics service and to provide excellent and complete logistics services to logistics service providers and industrial manufacturers to enlarge the contribution of logistics business to the revenue and profit of the company. Profit Estimate of the Next Year □Applicable √ Inapplicable 6.16 Preplan of the Board of Directors for Divident Distribution or Converting Capital Public Reserve into Share Capital or Rights for This Time Profits available for distribution is US$ 9,100,229.09, divident distribution preplan is set out as follows: １． Withdraw 10% of Statutory public reserve US$910,022.91； ２． Withdraw 5% of Statutory public welfare fund US$455,011.45； ３． Withdraw 5% of Discretionary public reserve US$455,011.45； ４． The cash dividend for the year 2003 of US$0.3157 for each ten shares (tax included) or US$3,800,691.67 in total would be paid by the Company and for this purpose the conversion will be based on the closing rate between US$ and HK$ announced by the People’ s Bank of China on the first working day after the day on which the resolution is approved by the AGM. ５． The Company will neither convert any reserves into share capital or rights nor declare interim dividend. §7 Significant Events 7.1 Purchase of Assets √Applicable □Inapplicable The other party of Date of Purchase price Net profit Whether it is the transaction and purchase contributed to affiliated transaction the assets the listed (if yes, explain the purchased company price fixation from the date principle) of purchase to the Year-end Shenzhen Chiwan Dec., 2003 19.7397 million Nil Affiliated transaction, Godown Co., Ltd RMB yuan according to the estimated price by independent financial consultant on the basis of the net assets of the company 13 7.2 Sale of Assets □Applicable √ Inapplicable Unit：Thousand RMB yuan Affiliated Party Funds provided to the affiliated party Funds provided by the affiliated party to the listed company Amount paid Balance Amount paid Balance Shenzhen Chiwan 17640 17640 Logistics Co., Ltd Shenzhen Offshore 1990 165.6 Petroleum Equipment Manufacture and Repair Co., Ltd. China Nanshan 2650 260 Development (Group) Incorporation Shenzhen Nanshan 500 7 Industrial Co., Ltd. Shenzhen Chiwan Wharf 500 30 Co., Ltd. Total 23280 18102.6 7.3 Significant Security □Applicable √Inapplicable 7.4 Affiliated Credit and Debt √Applicable □Inapplicable 7.5 Financing by Mandate □Applicable √ Inapplicable 7.6 Fulfillment of Undertakings □Applicable √ Inapplicable 7.7 Significant Litigation and Arbitration □Applicable √ Inapplicable 7.8 Information of Independent Directors’Performance According to the requirement of the CSRC and Shenzhen Securities Regulatory Office, the company employed three specialists as independent directors, major in law, accounting and professional area of the company. The company established three special committees of the Board of Directors and made and improved “Detailed Work Rules of Nomination and Salary Committee of the Board of Directors”, “Detailed Work Rules of Strategy and Development Committee the 14 Board of Directors “and “Detailed Work Rules of Audit Committee of the Board of Directors”. During the period under review, in accordance with the requirement of CSRC’s “Guidance Opinion for Listed Company to Establish of Independent Directors System”，”Article of Association” and “Work System of Independent Director”the company’ s independent directors exercised their duties, took part in the decision-making of the company’ s importance affairs, presented independent director’s opinion and fully exerted the function of independent director. §8 Report of the Board of Supervisors (1) The Company’ s decision procedures were both healthy and lawful. The Company’ s management systems and internal control procedures were in place. The meeting also confirmed that neither the directors nor senior managers had acted in contravention of the laws, regulations, Articles of Association or detrimental to the interest of the company. (2) The Board of Supervisors carefully reviewed the financial report of the company and confirmed that the company was in good financial situation. The meeting further confirmed that the audit report prepared by the independent auditors Shenzhen Dahua Tiancheng and Price Waterhouse Coopers gave a true and fair presentation of the Company’ s financial performance by offering clear opinion in the audit report for the year 2003. (3) In 2002 the Company did not raise capital or engage in any sale of the Company’ s assets. (4) All the affiliated transactions in 2003 were conducted in arm-length princ iple and the Company’ s interests were safeguarded. §9 Financial Report 9.1 Audit Opinion To the Board of Directors and Shareholders of Shenzhen Chiwan Petroleum Supply Base Co., Ltd., In accordance with the authorization, we have audited the accompanying consolidated balance sheet of Shenzhen Chiwan Petroleum Supply Base Co., Ltd. (the “Company”) as of 31st December 2003 and the profit and profit distribution statements and cash flow statements for the year then ended. These financial statements set out are the responsibility of the Company’ s management. Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in accordance with Independent Audit Standards of China Certified Accountants. Those Standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statments are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion. In our opinion the financial statements comply with the provisions of Enterprise Accounting Standard and Enterprise Accounting System promulgated by the state and present fairly in all material respects the financial position of the Group as of 31st December 2003 and of the results of its operations and its cash flows for the year then ended. Shenzhen Dahua Tiancheng China Certified Accountant: Li Bing Certified Public Accountants China Certified Accountant: Wu Jianhui Shenzhen, PR China 15 9.2 Annotation Form SHENZHEN CHIWAN PETROLEUM SUPPLY BASE CO., LTD BALANCE SHEET FOR THE YEAR ENDED 31ST DECEMBER 2003 Units: RMB yuan Assets Note 2003-12-31 2002-12-31 Current assets： Currency capital 1 77,429,054.13 141,237,830.44 Short-term investments - - Dividends receivable - - Interest receivable - - Accounts receivable 2 20,370,029.91 17,890,510.47 Other receivables 3 18,267,449.11 14,144,968.01 Prepayments 63,710,331.33 31,569,843.49 Inventories 4 1,235,824.86 1,071,384.39 Pending amortization expenses 5 123,312.05 70,894.19 Mature long-term creditor investment in one year - - Other current assets - - Total current assets 181,136,001.39 205,985,430.99 Long-term investment： Long-term equity investments 6 135,889,454.03 114,765,710.70 Long-term creditor investments - - Total long-term assets 135,889,454.03 114,765,710.70 thereinto：price difference consolidated - - thereinto：balance of equity investments - - Property, plant and equipment： Original cost of property, plant and equipment 7 317,762,421.70 313,272,549.06 Minus: accumulated depreciation 7 137,869,674.40 128,607,041.18 Net value of fixed assets 7 179,892,747.30 184,665,507.88 Minus: depreciation reserve of fixed assets - - Net worth of fixed assets 179,892,747.30 184,665,507.88 Project material - - Construction in progress 8 93,937,992.86 9,707,348.05 Fixed assets liquidation - - Total fixed assets 273,830,740.16 194,372,855.93 Intangible assets and others Intangible assets 9 98,350,683.98 112,602,616.43 Long-term pending amortization expenses 10 10,900,788.33 10,991,627.96 Other long-term assets - - Total intangible and deferred assets 109,251,472.31 123,594,244.39 Deferred taxation： Deferred taxation debit item - - Total assets 700,107,667.89 638,718,242.01 16 SHENZHEN CHIWAN PETROLEUM SUPPLY BASE CO., LTD BALANCE SHEET (continuous) FOR THE YEAR ENDED 31ST DECEMBER 2003 Units: RMB yuan Indebtedness and shareholders’equity Note 2003-12-31 2002-12-31 Current liability： Short-term loan 11 18,000,000.00 - Accounts payable 12 861,819.99 318,019.07 Prepayments 13 28,703,412.81 27,291,421.76 Wage payable 15 2,898,716.05 2,361,010.45 Welfare payable 237,789.76 100,468.11 Dividend payable - 31,469,727.03 Accrued taxes payable 17 4,024,233.51 5,127,971.09 Other accounts should be handed in - - Other accounts payable 14 4,489,560.07 5,233,086.93 Pre-withdrew expenses 18 434,690.56 466,600.36 Estimated liability - - Long-term liabilities - current portion - - Other current liabilities - - Total current liability 59,650,222.75 72,368,304.80 Long-term liability： Long-term loan - - Bond payable - - Long-term accounts payable 19 8,357,716.74 9,600,105.65 Special-purpose accounts payable - - Other long-term liability - - Total long-term liability 8,357,716.74 9,600,105.65 Deferred taxations： Deferred taxation debit item - - Total liability 68,007,939.49 81,968,410.45 Minority interests： Minority interests 20 230,600,000.00 230,600,000.00 Rights and interests of shareholders： 21 218,558,237.08 218,558,237.08 Capital stock 22 103,236,402.57 88,166,423.19 Additional paid-in capital 23 27,333,504.63 27,333,504.63 Capital surplus reserve (7,908,333.36) (7,908,333.34) Inappropriate profits 16 60,279,917.48 Declared cash dividend 632,099,728.40 556,749,831.56 Total shareholders’equity 700,107,667.89 638,718,242.01 Chief accountant agency： 17 SHENZHEN CHIWAN PETROLEUM SUPPLY BASE CO., LTD PROFIT AND PROFIT DISTRIBUTION STATMENT FOR THE YEAR ENDED 31ST DECEMBER 2003 Units: RMB yuan Accumulative total of Accumulative total of Item Note this year last year 1. Earnings of main operation 24 109,619,298.98 95,473,649.27 Minus: cost of main operation 24 41,785,640.42 39,898,544.63 Taxation and surtax of main operation 25 4,715,012.30 4,116,792.32 2. Profits of main operation 63,118,646.26 51,458,312.32 plus：profits of other operation - - minus： Operating expenses - - Overhead expenses 11,351,578.60 7,953,477.95 Financial affairs fee 26 (1,805,659.01) (7,001,864.51) 3. Profits of operation 53,572,726.67 50,506,698.88 plus：Yield 27 30,057,413.89 20,156,975.74 Earnings of allowance - - Non-operating revenue 28 103,754.36 83,864.81 Minus: Non-operating expenses 28 177,052.65 258,236.23 4. Total profits 83,556,842.27 70,489,303.20 minus：income tax 8,206,945.39 7,549,849.15 Profits and loss of minority shareholders - - deficit of subsidiary company 75,349,896.88 62,939,454.05 5. Net profits 27,333,504.63 8,451,668.42 plus：inappropriate profits of the beginning of the year - - Other roll-in 102,683,401.51 71,391,122.47 6. Distributable profits 7,534,989.66 6,293,945.41 minus：Withdraw legal capital surplus reserve 3,767,494.86 3,146,972.70 Withdraw legal public welfare - - Withdraw welfare and encouragement fund 91,380,916.99 61,950,204.36 7. Distributable profits for shareholders - - minus:payable preference stock dividend 3,767,494.86 3,146,972.70 Withdraw arbitrary capital surplus reserve 60,279,917.50 31,469,727.03 Payable common stock dividend - - Common stock dividend switched to capital stock 27,333,504.63 27,333,504.63 18 8. Inappropriate profits Complementary data： Accumulative total of Accumulative total of Item this year last year Sales and disposal the equity of departments or investment-receive units - - Losses resulted from natural disaster - - Increase (or decrease) of overall profit due to changes in accounting policy - - Increase (or decrease) of overall profit due to changes in accounting estimates - ： 19 SHENZHEN CHIWAN PETROLEUM SUPPLY BASE CO., LTD. CASH FLOW STATEMENT FOR THE YEAR ENDED 31ST DECEMBER 2003 Units: RMB yuan Item Note 2003 Cash flows from operating activities Cash received from merchandise distribution and labor services offering 108,639,228.08 Rentals received - Other cash received from operating activities 3,524,181.85 Cash in-flow subtotal 112,163,409.93 Cash paid for merchandise purchase and labor services 9,149,857.06 Value-added tax paid 141,227.82 Cash paid to and paid for employees 9,090,42.76 Income tax and cost paid 10,980,462.80 Payments for taxes and costs except value-added tax and income tax 6,383,673.58 Other payments for operating activities 7,581,069.22 Cash outflow subtotal 43,326,733.24 Net cash from operating activities 68,836,676.69 Cash flows from investing activities Disinvestments received - Income from investments received 18,579,930.84 Net cash received from disposal of capital asserts, intangible assets and other long-term assets 6,060.05 Cash received from other investing activities 13,244,000.01 Cash in-flow subtotal 31,829,990.90 Purchase of capital asserts, intangible assets and other long-term assets 8,236,407.37 Cash paid for investment 125,026,051.63 Including acquisition of subsidiaries 9,652,994.65 Cash paid for other activities related to financing 17,708279.84 Cash outflow subtotal 150,970,738.84 Net cash used in investing activities (119,140,747.94) Cash flows from financing activities Cash from absorbing investments 18,000,000.00 Cash from borrowings - Cash received from other financing activities - Cash in-flow subtotal 18,000,000.00 Cash for debts repayment - Cash for dividend payments or interest repayments 31,504,705.06 Cash paid for registered capital reduction - Cash paid for other financing activities - Cash outflow subtotal 31,504,705.06 Net cash used in financing activities (13,504,705.06) Movement in cash influenced by changes of exchange rate - Net increase in cash and cash equivalents (63,808,776.31) 20 Annotations: Item Note 2003 Investing and financing activities not involved in cash income and expenses Transformations from debts to capital - Corporate translatable bonds due within one year - Financing and lease of capital assets - Translating net profits into cash flows from operating activities - Net profits 75,349,896.88 Plus: Accrual reserve - Depreciation of capital assets 9,867,362.44 Amortization of intangible assets and long-term pending amortization charge 15,939,791.57 Decrease of amortization charge (5,329.42) Increase of withholding expense 31,909.80 Losses from disposal of capital assets, intangible assets and other long-term assets 65,513.60 Losses of disusing capital assets 47,982.35 Financial expense (19,385.80) Losses from investment (30,057,413.89) Deferred taxation (1,242,388.91) Decrease of inventories (39,875.16) Decrease of operating receivable items (2,073,695.12) Increase of payable items 972,308.35 Others - Net cash from operating activities 68,836,676.69 Situation of net increase in cash and cash equivalents Cash balance at the end of year 77,429,054.13 Decrease: cash balance at the beginning of year 141,237,830.44 Increase: cash equivalents at the end of year - Decrease: cash equivalents at the beginning of year - Net increase in cash and cash equivalents (63,808,776.31) 9.3 There is no change as to the Account Policy, Account Estimate and Accounting Method compared with those of the report of last year. 9.4 There is no change as to the scope of consolidation compared with that of the report of last year. 21