东旭光电(000413)宝石Ｂ2003年年度报告摘要（英文版）

Ｓｕｍｍａｒｙ ｏｆ ２００３ Ａｎｎｕａｌ Ｒｅｐｏｒｔ ｏｆ Ｓｈｉｊｉａｚｈｕａｎｇ Ｂａｏｓｈｉ Ｅｌｅｃｔｒｏｎｉｃ Ｇｌａｓｓ Ｃｏ．， Ｌｔｄ． Summary of 2003 Annual Report of Shijiazhuang Baoshi Electronic Glass Co., Ltd. §1 Important notes 1.1 The Board of Directors and the directors of the Company hereby warrant that there are no misstatement, misleading representation or important omissions in this report and shall assume joint and several liability for the authenticity, accuracy and completeness of the contents hereof. The summary of this annual report is selected from the annual report. If investors intend to know the detailed contents, they should read the full text of the annual report. 1.2 No director declares inability to warrant or objection to the authenticity, accuracy and completeness of the content of the annual report. 1.3. Ａｌｌ ｄｉｒｅｃｔｏｒｓ ａｔｔｅｎｄｅｄ ｔｈｅ ｂｏａｒｄ ｍｅｅｔｉｎｇ． 1.4.Pricewaterhouse Coopers Zhongtian Certified Public Accountants Co., Ltd. issued unqualified auditors' report with no explanatory notes for the Company. 1.3 The board chairman of the Company Mr. Dong Qingxiang, general manager Mr. Song Hongbo and chief accountant Mr. Zhou Yumao represent and warrant the financial report in this annual report is true and complete. §2 Basic Information 2.1 Basic information Stock abbreviation Baoshi A, Baoshi B Stock code 000413、200413 Stock exchange Shenzhen Stock Exchange for listing Registered address No.9, Huanghe Road, Shijiazhuang High-tech Industrial Development Area, and business Shijiazhuang, Hebei Province address Zip code 050035 Website Nil E-mail baoshi@mx.hebei.net.cn 2.2 Contact person and contact manner Board secretary Securities affair representative Name Luo Lina Wang Hua No.2, Huaqing Street, Zhongshan East No.2, Huaqing Street, Zhongshan East Contact address Road, Shijiazhuang, Hebei Province（the Road, Shijiazhuang, Hebei Province（the Securities Dept. of the Company） Securities Dept. of the Company） Tel 0311-6044705 0311-6044705 Fax 0311-6041503 0311-6041503 E-mail bsdz@heinfo.net bsdz@heinfo.net §3 Highlights of Accounting Data and Financial Indicators －1－ Ｓｕｍｍａｒｙ ｏｆ ２００３ Ａｎｎｕａｌ Ｒｅｐｏｒｔ ｏｆ Ｓｈｉｊｉａｚｈｕａｎｇ Ｂａｏｓｈｉ Ｅｌｅｃｔｒｏｎｉｃ Ｇｌａｓｓ Ｃｏ．， Ｌｔｄ． 3.1 Main accounting data Unit: RMB 2003 (the report 2002 (the previous Increase/decrease 2001 year) year) (%) Income from key 80,896,915.00 53,621,716.00 50.87% 62,388,165.00 business Total profit 25,976,164.00 35,201,642.00 -26.21% 51,326,150.00 Net profit 22,070,871.00 29,198,154.00 -24.41% 39,390,980.00 Net profit after deducting 8,228,582.00 31,199,627.00 -73.63% 41,703,438.00 non-recurring gains and losses End of 2003 End of 2003 Increase/decrease End of 2001 (End of report (End of previous (%) year) year) Total assets 1,412,218,041.00 1,505,567,156.00 -6.20% 1,538,478,066.00 Shareholders' equity (not 599,526,291.00 577,455,420.00 3.82% 547,155,173.00 including minority interests) Net cash flow from -171,489,155.00 -22,862,978.00 -- -83,467,597.00 operating activities 3.2 Main financial indicators Unit: RMB 2003 (the report 2002 (the previous Increase/decrease 2001 year) year) (%) Earnings per share 0.058 0.076 -23.68% 0.103 Earnings per share(In case of change of share capital, EPS is to 0.058 -- -- -- be calculated according to new share capital) Return on net 3.68% 5.06% -27.27% 7.20% assets Return on net assets calculated on basis of net profit after 1.37% 5.40% -74.63% 7.62% deducting non-recurring gains and losses Net cash flow per share from -0.45 -0.06 -- -0.218 operating activities End of 2003 End of 2002 Increase/decrease End of 2001 (End of report (End of previous (%) year) year) Net assets per 1.57 1.51 3.78% 1.43 share Net assets per share after 1.54 1.49 3.36% 1.41 adjustment 3.3 Difference of domestic and foreign accounting standards √applicable□not applicable －2－ Ｓｕｍｍａｒｙ ｏｆ ２００３ Ａｎｎｕａｌ Ｒｅｐｏｒｔ ｏｆ Ｓｈｉｊｉａｚｈｕａｎｇ Ｂａｏｓｈｉ Ｅｌｅｃｔｒｏｎｉｃ Ｇｌａｓｓ Ｃｏ．， Ｌｔｄ． Domestic accounting standards Overseas accounting standards Net profit 2,207.09 2,207.09 Notes to There was no adjustment for the difference between the items stated pursuant to domestic difference and international accounting standards in the report year. § 4 Particulars about the Changes of Share Capital and Shareholders 4.1 Schedule of Change in Share Capital Unit: shares Before this change Increase or decrease this After this change time (+/-) I. Non-negotiable shares 1. Promoter's shares 233,410,500 0 233,410,500 Of which: State-owned 230,410,500 0 230,410,500 shares Domestic corporate 3,000,000 0 3,000,000 shares Overseas corporate 0 0 shares Others 0 0 2. Raised corporate 4,500,000 0 4,500,000 shares 3. Staff shares 0 0 4. Preferred shares or 17,100 0 17,100 others Total non-negotiable 237,927,600 0 237,927,600 shares II. Negotiable shares 1. RMB common shares 45,072,400 0 45,072,400 2. Domestically listed 100,000,000 0 100,000,000 foreign-capital shares 3. Overseas listed 0 0 foreign-capital shares 4. Others 0 0 Total negotiable shares 145,072,400 0 145,072,400 III. Total shares 383,000,000 0 383,000,000 4.2 Table of shareholding of the top ten shareholders Total number of shareholders at the end of 40,194 the report period Particulars about the shareholding of the top ten shareholders Name of shareholder Increase Number of Propo Type of share Quantity Nature of (full name) or shares held rtion (Negotiable or of shareholder decrease at the end of (%) non-negotiable) pledged (state-owned in the year or frozen shareholder or year (shares) shares foreign (shares) (shares) shareholder) －3－ Ｓｕｍｍａｒｙ ｏｆ ２００３ Ａｎｎｕａｌ Ｒｅｐｏｒｔ ｏｆ Ｓｈｉｊｉａｚｈｕａｎｇ Ｂａｏｓｈｉ Ｅｌｅｃｔｒｏｎｉｃ Ｇｌａｓｓ Ｃｏ．， Ｌｔｄ． Shijiazhuang Baoshi 230,410,50 State-owned Electronic Group Co., 0 60.16 Non-negotiable 8,965,517 0 shareholder Ltd. DIAWA SECS SMBC Shareholders HONG KONG 0 6,500,000 1.70 Negotiable Unknown of B shares LTD-CLIENTS China Electronic 2,000,000 0.52 State-owned Import and Export 0 Non-negotiable Unknown shareholder Corporation Zhonghua Hebei 0 1,000,000 0.26 State-owned Import and Export Non-negotiable Unknown shareholder Co. Shijiazhuang Trust 1,000,000 0.26 State-owned 0 Non-negotiable Unknown Investment Co. shareholder 99,700 543,400 0.14 Shareholders Jiang Fengmei Negotiable Unknown of B shares 57,800 539,762 0.14 Shareholders Chen Yongquan Negotiable Unknown of B shares Shanghai Yibaoxing 0 473,500 0.12 State-owned Non-negotiable Unknown Trade Co., Ltd. shareholder 466,000 0.12 Shareholders Wang Ximing Unknown Negotiable Unknown of B shares 420,000 0.11 Shareholders Zhang Sheng Unknown Negotiable Unknown of B shares Notes to the related relationship The related relation between the top ten shareholders is unknown. between the top ten shareholders They are not persons taking concerted action specified in Regulations or their concerted action on the Information Disclosure of the Change of Shareholding of Shareholders of Listed Companies. Particulars about the shareholding of the top ten shareholders Name of shareholder (full name) Number of shares held at the end Type（A、B and H shares or of year (shares) other） DAIWA SECS SMBC HONG 6,500,000 KONG LTD-CLIENTS B shares Jiang Fengmei 543,400 B shares Chen Yongquan 539,762 B shares Shanghai Yiboxing Trade Co., Ltd 473,500 A shares 466,000 Wang Ximing B shares 420,000 Zhang Sheng B shares Shanghai Hong Kong Wanguo 419,358 Securities B shares Wu Sumei 394,200 B shares Zhong Peijin 379,900 B shares Beijing Licheng Investment 365,800 Management Co., Ltd A shares Notes to the relation between the top The relation between the top ten shareholders is unknown. ten shareholders holding negotiable shares: 4.3 Introduction of the controlling shareholder and actual controller 4.3.1 Change of the controlling shareholder and actual controller □ applicable√ not applicable －4－ Ｓｕｍｍａｒｙ ｏｆ ２００３ Ａｎｎｕａｌ Ｒｅｐｏｒｔ ｏｆ Ｓｈｉｊｉａｚｈｕａｎｇ Ｂａｏｓｈｉ Ｅｌｅｃｔｒｏｎｉｃ Ｇｌａｓｓ Ｃｏ．， Ｌｔｄ． 4.3.2 Particulars about the controlling shareholder and other actual controller The controlling shareholder of the Company is Shijiazhuang Baoshi Electronic Group Co., Ltd. (Baoshi Group Co.) It holds 60.16% equity of the Company. Date of establishment: October 10, 1997. Nature: Wholly state-owned enterprise. Registered capital: RMB 0.9 billions, Legal representative: Dong Qingxiang. Business scope: Dealing in state-owned capital within authorized scope, color cathode-ray tube series products and supporting electronic components, etc. The actual controller of the controlling shareholder is Shijiazhuang State-owned Asset Management Committee. §5 Directors, Supervisors and Senior Executives 5.1 Change of Shareholdings of Directors, Supervisors and Senior Executives No. of No. of shares held shares at the held at Reason Name Position Sex Age Term of office beginning the end of for change of year year (shares) (shares) Dong Chairman of Ma ２００３．６－２００６．６ Qingxiang Board of le 65 2,000 2,000 Directors Gao Tiezhan Deputy Male ２００３．６－２００６．６ Chairman of 60 500 500 Board of Directors Wang Deputy Male ２００３．６－２００６．６ Rongxian Chairman of 59 1,500 1,500 Board of Directors Song Director & Male 49 ２００３．６－２００６．６ 0 0 Hongbo GM Zhou Bo Director Male 38 6,800 6,800 ２００３．６－２００６．６ Ye Huifen Director Female 44 0 0 ２００３．６－２００６．６ Hu Shouling Independent Male 68 ２００３．６－２００６．６ 0 0 Director Ma Chao Independent Male 38 ２００３．６－２００６．６ 0 0 Director Zhang Hao Independent Male 59 ２００３．６－２００６．６ 0 0 Director Li Supervisor Male 60 ２００３．６－２００６．６ 0 0 Zhenzhong Fan Supervisor Male 47 ２００３．６－２００６．６ 1,000 1,000 Zhenping Li Huiming Supervisor Male 49 2,400 2,400 ２００３．６－２００６．６ Zhang Supervisor Female 53 ２００３．６－２００６．６ 0 0 Yanqiao Li Hong Male 49 800 800 ２００３．６－２００６．６ Yao Junting Supervisor Male 34 0 0 ２００３．６－２００６．６ Zhang Supervisor Male 42 ２００３．６－２００６．６ 0 0 Zhanshuan Gao Dacai Deputy GM Female 58 0 0 ２００３．６－２００６．６ －5－ Ｓｕｍｍａｒｙ ｏｆ ２００３ Ａｎｎｕａｌ Ｒｅｐｏｒｔ ｏｆ Ｓｈｉｊｉａｚｈｕａｎｇ Ｂａｏｓｈｉ Ｅｌｅｃｔｒｏｎｉｃ Ｇｌａｓｓ Ｃｏ．， Ｌｔｄ． Yang Guang Deputy GM Male 51 0 0 ２００３．６－２００６．６ Zhang Deputy GM Male 52 ２００３．６－２００６．６ 0 0 Wenhai Gao Deputy GM Male 36 ２００３．６－２００６．６ 0 0 Yanxiong Zhou Yumao Chief Male 51 ２００３．６－２００６．６ 0 0 accountant Luo Lina Board Female 48 ２００３．６－２００６．６ 0 0 secretary 5.2 Particulars about the directors and supervisors of the Company holding positions at shareholder companies √applicable□not applicable Whether receiving Name Name of shareholder Position Term of office remuneration or subsidy Dong Shijiazhuang Baoshi Board chairman 1997 - now Yes Qingxiang Electronic Group Co., Ltd. Director, general Gao Shijiazhuang Baoshi manager and chief 1997 - now Yes Tiezhan Electronic Group Co., Ltd. accountant Wang Shijiazhuang Baoshi Deputy GM 1997 - now Yes Rongxian Electronic Group Co., Ltd. Song Shijiazhuang Baoshi Director 1997 - now Yes Hongbo Electronic Group Co., Ltd. Shijiazhuang Baoshi Zhou Bo Director 1997 - now No Electronic Group Co., Ltd. Shijiazhuang Baoshi Manager of Operation Ye Huifen 1997 - now Yes Electronic Group Co., Ltd. Dept. Li Shijiazhuang Baoshi Chairman of the 1997 - now Yes Zhenzhong Electronic Group Co., Ltd. supervisory committee Fan Shijiazhuang Baoshi Deputy director of Public 1997 - now Yes Zhenping Electronic Group Co., Ltd. Security Section Yao China Electronic Import Deputy GM of Finance 1997 - now Yes Junting and Export Corporation Management Dept. Deputy manager of Zhang Zhonghua Hebei Import Comprehensive 1995 to now Yes Zhanshuan and Export Co. Management Dept. 5.3 Annual Remuneration of Directors, Supervisors and Senior Executives Unit: RMB'0000 Total amount of annual 25.71 remuneration The total amount of the 5.78 remuneration of the top three directors receiving the remuneration of the highest amount The total amount of the 11.52 remuneration of the top three senior executives receiving the remuneration of the highest amount Subsidy of independent RMB 10,000 / person /year directors Other benefits of independent Nil directors －6－ Ｓｕｍｍａｒｙ ｏｆ ２００３ Ａｎｎｕａｌ Ｒｅｐｏｒｔ ｏｆ Ｓｈｉｊｉａｚｈｕａｎｇ Ｂａｏｓｈｉ Ｅｌｅｃｔｒｏｎｉｃ Ｇｌａｓｓ Ｃｏ．， Ｌｔｄ． Name of directors and supervisors not receiving Dong Qingxiang,Gao Tiezhan、Wang Rongxian、Zhou Bo、Ye Huifen、 remuneration and subsidy Li Zhenzhong、Fan Jianping、Yao Junting and Zhang Zhanshuan. from the Company Range of remuneration Number of person RMB 20,000 - 30,000 4 RMB 30,000 - 40,000 3 Over RMB 40,000 1 §6 Report of the Board of Directors 6.1 Discussion and analysis of the overall operation status in the report period The Company is engaged in the electronic parts and components industry, mainly in the manufacturing and sales of electronic vacuum glass devices and supporting electronic parts and components, export of the self-produced products of the Company and the import of mechanical equipment, parts and components, raw and auxiliary materials needed by the Company. In 2003, the Company's business environment was still highly unfavorable. Due to keen horizontal competition at home and abroad and the challenge of new technological revolution of color TV industry, the Company's production and operation was affected by the unfavorable factors including the lowering of product price and rise of raw material price. Meanwhile, it experienced the severe test of unprecedented epidemic situation of SARS. For attaining the production and operation objective for the report year, all employees of the Company made concerted efforts to overcome the adverse influence of market environment and the epidemic situation of SARS and ensured the normal production and operation of the Company through scientific planning, elaborate organization, technical renovation, product innovation, intensification of management and market development. In the report period, income from main operation, cost of main operation and profit from main operation of the Company were RMB 80.90 million, RMB 57.95 and RMB 22.22 million respectively. The gross profit rate and market share of its products were 28.37% and 30% respectively. 6.2 Table of the status of key business in terms of line of business or product Unit: RMB'0000 In terms of Increase/dec Increase/dec Increase/dec line of Income from Cost of key Gross profit rease of rease of rease of cost business or key business business rate (%) gross profit income (%) (%) product rate (%) Electronic component 8,090.00 5,795.00 28.37 50.88 85.50 -32.03 manufacturi ng industry Of which： related 2,840.00 2,034.00 28.38 69.15 107.98 -32.02 transaction －7－ Ｓｕｍｍａｒｙ ｏｆ ２００３ Ａｎｎｕａｌ Ｒｅｐｏｒｔ ｏｆ Ｓｈｉｊｉａｚｈｕａｎｇ Ｂａｏｓｈｉ Ｅｌｅｃｔｒｏｎｉｃ Ｇｌａｓｓ Ｃｏ．， Ｌｔｄ． Principle of pricing of The market price is taken as the basis for pricing and the price is determined related transaction through consultation with related parties. Notes to the necessity and As the products of the Company are the upstream products of Shijiazhuang continuity of related Baoshi Electric Glass Co., Ltd. and the electronic components supporting its transactions color bulb products, the sale of products to it is necessary and long-term. 6.3 The status of key business in terms of areas Unit: RMB'0000 Area Income from key business Increase/decrease of income (%) North China 8,090.00 50.88 6.4 Particulars about suppliers and customers Unit: RMB'0000 Total of the amount of Proportion of total purchase from the top 3,898.00 74.40% purchase amount five suppliers Total of the amount of Proportion of total sales sales to the top five 7,626.00 96.19% amount customers 6.5 Operation of invested companies (the investment income from whom accounts for over 10% of the net profit of the Company) √applicable□not applicable Name of invested company Shijiazhuang Baoshi Electric Glass Co., Ltd. Investment income contributed in 3,800.00 this period Proportion of the net profit of the 172.17% Company Production ,proc essing and sale of glass bulbs for color kinescopes and Invested Business scope color displays. company Net profit 7,420.00 Unit: RMB'0000 Name of invested company Shijiazhuang Baoshi Electric Glass Co., Ltd. Investment income contributed in this period Proportion of the net profit of the Company Production and sales of glass bulbs for colour kinescope and electronic glass products 6.6 Reasons for the material change of key business and its structure √applicable□not applicable L-35 glass tube production line was put into production in January 2003, the production and sales of this product as part of main operation of the Company increased. 6.7 Reasons for the material change of the profitability ( gross profit rate) of the key business compared with the previous year √applicable□not applicable The reasons for the lowering of the gross profit rate of the Company's products: (1) The price of raw materials rose; (2) The L-35 glass tube project of the Company newly put into production has not reached its designed capacity, which has resulted in high cost and low profitability. －8－ Ｓｕｍｍａｒｙ ｏｆ ２００３ Ａｎｎｕａｌ Ｒｅｐｏｒｔ ｏｆ Ｓｈｉｊｉａｚｈｕａｎｇ Ｂａｏｓｈｉ Ｅｌｅｃｔｒｏｎｉｃ Ｇｌａｓｓ Ｃｏ．， Ｌｔｄ． 6.8 Analysis of the reasons for the material change of operating results and profit structure compared with the previous year □ applicable√ not applicable Analysis of the reasons for the material change of overall financial status compared with the previous year □ applicable√ not applicable 6.9 Notes to the existing, current and future important influence of the material cha nge of production and business environment, macro-policies, laws and regulations on the Company's financial status and operating results. □ applicable√ not applicable 6.10 The fulfillment of profit target □ applicable√ not applicable 6.11 Fulfillment of operation plan □ applicable√ not applicable 6.12 Utilization of raised funds □ applicable√ not applicable Particulars about the change of investment projects □ applicable√ not applicable 6.13 Investment projects not utilizing raised funds □ applicable√ not applicable 6.14 Explanation of the board of directors to the "nonstandard opinions" □ applicable√ not applicable 6.15 Operation plan of the board of directors for the new year(if any). √applicable□not applicable With the development of domestic color TV industry, China has become the largest production base for color TV and its supporting products, which has provided good development opportunities to the Company. However, it should also be seen that the intensification of international trade protectionism during the development of world economy and the new technological revolution in color TV industry in recent period have made traditional color TV industry face challenge. The Company's business environment has been more rigorous and the market competition has been fiercer. The Company will pay close attention to the change of domestic and international market, seize opportunities and rise to challenges. It will establish scientific development values, closely center on the subject of －9－ Ｓｕｍｍａｒｙ ｏｆ ２００３ Ａｎｎｕａｌ Ｒｅｐｏｒｔ ｏｆ Ｓｈｉｊｉａｚｈｕａｎｇ Ｂａｏｓｈｉ Ｅｌｅｃｔｒｏｎｉｃ Ｇｌａｓｓ Ｃｏ．， Ｌｔｄ． developme nt, give play to its own advantages, greatly develop its key business, actively carry out science and technology innovation and product innovation ， strengthen speciality management and basic management，deepen reform and explore new mode of capital operation to realize its continuous, rapid, coordinated and healthy development in the new year. 1. With China's becoming a production base of traditional color TV and its supporting products, the demand of the Company's pins, anode caps and l- 35 glass tubes will increase greatly. The Company will seize this opportunity，actively create conditions ， increase investment，constantly carry out renovation, enlarge scale and arrange the completion of the phase-II project of technical renovation of the production lines of pin and anode cap. Meanwhile, it will actively seek international partners, strive to open up international market based on consolidating and enlarging domestic market share and attain the objective of great development on the strength of high output, great variety, high quality and quick development. 2. The Company will enhance its technological development ability，speed up the localization of manufacture of raw materials for pin and anode cap products, enhance the output and quality of L-35 glass tube products, lower product cost and enhance the price competitiveness of its products through strengthening basic mana gement, production control and technical management. 3. The Company will keep track of domestic and international market demands and product development direction, strengthen product development, actively develop new products, increase best-selling varieties, develop new users and satisfy customer demands to the greatest extent. 4. The Joint Venture Co. will give play to its technical advantages，continue to strengthen technical renovation and technological innovation，enhance the proportion of large-screen planarized color bulbs, adopt new technologies to make glass bulb develop toward the direction of light type, flat type and environment-friendliness and strive to realize wide variety, differentiation, high quality, low cost and high efficiency of color bulb products. 5. The Company will deeply explore new development strategy and strive to seek greater development through capital and assets integration. V. Business development plan for the next year －10－ Ｓｕｍｍａｒｙ ｏｆ ２００３ Ａｎｎｕａｌ Ｒｅｐｏｒｔ ｏｆ Ｓｈｉｊｉａｚｈｕａｎｇ Ｂａｏｓｈｉ Ｅｌｅｃｔｒｏｎｉｃ Ｇｌａｓｓ Ｃｏ．， Ｌｔｄ． Forecast of profit for the new year(if any). □ applicable√ not applicable 6.16 The preplan of the board of directors for profit distribution or capitalization of capital common reserve fund It decided neither to distribute the profit and nor capitalize common reserve fund. §7 Important Events 7.1 Asset acquisition □ applicable√ not applicable 7.2 Disposal of assets □ applicable√ not applicable 7.3 Material guarantee □ applicable√ not applicable 7.4 Particulars of related transactions √applicable□ not applicable Unit: RMB million Financing to related party Financing of related party to the Company Related party Transaction Balance Transaction Balance amount amount Shijiazhuang Baoshi Electronic Group Co., 125.63 0.00 603.83 437.54 Ltd. Shijiazhuang Baoshi 0.00 116.14 173.75 0.00 Electric Glass Co., Ltd. Shijiazhuang Baoshi Electronic Group 1.49 0.00 0.00 0.41 Industrial and Trading Co., Ltd. Shijiazhuang Baoshi 0.96 1.38 0.00 0.00 Large-diameter Plastic Tube Co., Ltd. Shijiazhuang Baoshi Ruiming Co., 0.57 1.09 0.00 0.00 Ltd. Shijiazhuang Baoshi Zhonghe 1.00 1.62 0.00 0.00 Steel Plastic Shape Co., Ltd. Total 129.65 120.23 777.58 437.95 －11－ Ｓｕｍｍａｒｙ ｏｆ ２００３ Ａｎｎｕａｌ Ｒｅｐｏｒｔ ｏｆ Ｓｈｉｊｉａｚｈｕａｎｇ Ｂａｏｓｈｉ Ｅｌｅｃｔｒｏｎｉｃ Ｇｌａｓｓ Ｃｏ．， Ｌｔｄ． 7.5 Entrusted asset management □ applicable√ not applicable 7.6 Performance of commitments √applicable□not applicable 1. The Company published the announcement of the resolutions of the 9th meeting of the third Board of Directors on China Securities Daily and Hong Kong Commercial Daily on November 7, 2001. The Board of Directors of the Company and Baoshi Group Co. has reached agreement on the competition between the Company and Baoshi Group Co. in the same industry arising from the project of renovating and constructing L-35 glass tube production line and will properly solve this issue by the means of asset exchange or other means. At present, this matter is in active discussion. 2. The Company published the announcement of the resolutions of the 11th meeting of the third board of directors on China Securities Daily and Hong Kong Commercial Daily on December 14, 2002. The Company planned to solve part of accounts payable by Baoshi Group Co. to Color Bulb Co. formed during business transaction by debt reorganization or assets reorganization in 2002. As of the end of 2003, the Company had settled it by debt restructuring. 3. As of October 31, 2001, the Joint Venture Co. borrowed funds of RMB 0.26 billion from SBCB. It plans to fully repay the borrowing in the next two years. The Company will urge both parties to implement the plan. In the report period, the Joint Venture Co. repaid RMB 93.38 million according to plan. At the end of the report period, the balance of the funds borrowed by the Joint Venture Co. from SBCB was RMB 116.14 million. 7.7 Material lawsuits and arbitration □ applicable√ not applicable 7.8 Particulars about duty performance of independent directors In the report period，the Company further improved independent director system， appointed independent directors as required within specified time limit so that the number of independent directors reached one third of total directors, actively implemented rules and regulations including the Articles of Association of the Company, Rules of Procedure of Shareholders' General Meeting, Rules of Procedure of the Board of Directors, Rules of Procedure of the Supervisory Committee and Detailed Working Rules of General Manager according to the requirements of the Company Law, the Securities Law, relevant laws and regulations of CSRC and Listing Rules of Shenzhen Stock Exchange and constantly enhanced －12－ Ｓｕｍｍａｒｙ ｏｆ ２００３ Ａｎｎｕａｌ Ｒｅｐｏｒｔ ｏｆ Ｓｈｉｊｉａｚｈｕａｎｇ Ｂａｏｓｈｉ Ｅｌｅｃｔｒｏｎｉｃ Ｇｌａｓｓ Ｃｏ．， Ｌｔｄ． its administration level. §8 Report of the Supervisory Committee (1) The operation of the Company according to law In 2003, the Company was able to operate in accordance with relevant laws and regulations of the state, the Artic les of Association of the Company and the resolutions of shareholders' general meeting. Its decision making procedure was legal. The Company established corresponding internal control system while gradually perfecting its corporate administration structure. No act of the directors and managers of the Company was found to violate the laws, regulations and the Articles of Association or harm the Company's interests when they performed their duties. （2）The 2003 financial reports of the Company truly reflected the financial status and operating results of the Company. The standard unqualified auditors' report issued by Pricewaterhouse Coopers Zhongtian Certified Public Accountants Co., Ltd. was objective and fair. （3）. The Company did not raise funds in the report period. （4）. The Company neither acquired nor disposed of assets in the report period. （5）. The related transactions were fair and did not harm the interests of the Company. §9 Financial Report 9.1 Audit opinions The financial report of the Company for 2003 was audited by Pricewaterhouse Coopers Zhongtian Certified Public Accountants Co., Ltd. It issued Pricewaterhouse Coopers Zhongtian SZ (2004) No. 830 standard unqualified auditor's report. 9.2 Balance Sheet Prepared by: Shijiazhuang Baoshi Electronic Glass Co., Ltd. Domestic statements Unit: RMB Report period Same period of the previous year Item Parent Consolidated Consolidated Parent company company Current assets: Monetary capital 24,255,318.00 12,151,804.00 68,669,113.00 3,973,817.00 Short-term investment Bills receivable 24,898,417.00 19,248,417.00 31,223,311.00 30,223,311.00 Dividends receivable Interests receivable Accounts receivable 30,473,874.00 30,473,874.00 19,349,282.00 19,349,282.00 Other receivables 75,650,907.00 22,231,235.00 59,800,857.00 17,893,080.00 Prepayments 3,002,454.00 2,961,735.00 2,808,710.00 2,604,991.00 －13－ Ｓｕｍｍａｒｙ ｏｆ ２００３ Ａｎｎｕａｌ Ｒｅｐｏｒｔ ｏｆ Ｓｈｉｊｉａｚｈｕａｎｇ Ｂａｏｓｈｉ Ｅｌｅｃｔｒｏｎｉｃ Ｇｌａｓｓ Ｃｏ．， Ｌｔｄ． Subsidy receivable Inventory 51,717,995.00 51,374,891.00 24,276,479.00 24,132,341.00 Expenses to be amortized 26,719.00 26,719.00 84,201.00 84,201.00 Long-term creditors' right investment to mature within one year Other current assets 58,000,000.00 58,000,000.00 Receivables form subordinate 65,333,051.00 16,659,423.00 138,391,786.00 15,317,099.00 Company Total current assets 333,358,735.00 155,128,098.00 402,603,739.00 113,578,122.00 Long-term investment Long-term equity investment 818,415,139.00 432,794,930.00 798,820,916.00 416,564,436.00 Long-term creditors' right investment Total long-term investment 818,415,139.00 432,794,930.00 798,820,916.00 416,564,436.00 Of which ： Consolidated price difference Fixed assets Fixed assets- Original cost 360,590,850.00 307,991,022.00 311,914,533.00 259,314,705.00 Less: accumulated depreciation 167,633,189.00 158,999,242.00 146,948,308.00 140,654,015.00 Net value of fixed assets 192,957,661.00 148,991,780.00 164,966,225.00 118,660,690.00 Less: Fixed asset depreciation reserve 3,326,003.00 1,191,293.00 3,450,646.00 1,315,936.00 Net amount of fixed assets 189,631,658.00 147,800,487.00 161,515,579.00 117,344,754.00 Engineering materials 4,259,753.00 4,259,753.00 Construction-in-process 137,913.00 137,913.00 52,813,323.00 52,813,323.00 Fixed assets liquidation Total fixed assets 189,769,571.00 147,938,400.00 218,588,655.00 174,417,830.00 Intangible assets and other assets Intangible assets 14,135,206.00 14,135,206.00 14,431,064.00 14,431,064.00 Long-term expenses to be amortized 5,737,403.00 5,737,403.00 Other long-term assets Long-term receivables form 50,801,987.00 0.00 71,122,782.00 0.00 subordinate Company Total intangible assets and other assets 70,674,596.00 19,872,609.00 85,553,846.00 14,431,064.00 Deferred tax Debit item of deferred tax Total assets 1,412,218,041.00 755,734,037.00 1,505,567,156.00 718,991,452.00 Current liabilities Short-term loan 5,403,892.00 15,403,892.00 Bills payable 24,127,609.00 24,087,609.00 15,686,472.00 15,646,472.00 Accounts payable 30,662,492.00 21,331,007.00 23,565,094.00 10,189,332.00 Accounts received in advance 1,309,598.00 1,309,598.00 513,510.00 513,510.00 Wages payable Welfare expenses payable 2,793,942.00 2,583,148.00 5,884,131.00 4,714,044.00 Dividends payable Tax payable 7,421,572.00 6,131,156.00 8,721,336.00 7,356,868.00 Other accounts to be paid 118,450.00 15,186.00 157,039.00 54,887.00 Other payables 482,342,162.00 100,550,042.00 35,561,437.00 84,389,667.00 Expenses drawn in advance 79,584,374.00 200,000.00 135,956,903.00 18,671,252.00 Estimated liabilities Long-term liabilities within one year 511,477,304.00 Deferred income Other current liabilities 83,000,000.00 83,000,000.00 Total current liabilities 716,764,091.00 156,207,746.00 835,927,118.00 141,536,032.00 Long-term liabilities Long-term loan Long-term bonds Long-term accounts payable Special accounts payable Other long-term liabilities Total long-term liabilities Deferred tax Debit item of deferred tax Total liabilities 716,764,091.00 156,207,746.00 835,927,118.00 141,536,032.00 Minority interest 95,927,659.00 92,184,618.00 Owner's equity （ or shareholders' equity）: Share capital 383,000,000.00 383,000,000.00 383,000,000.00 383,000,000.00 Less:：return investment 0.00 0.00 0.00 0.00 －14－ Ｓｕｍｍａｒｙ ｏｆ ２００３ Ａｎｎｕａｌ Ｒｅｐｏｒｔ ｏｆ Ｓｈｉｊｉａｚｈｕａｎｇ Ｂａｏｓｈｉ Ｅｌｅｃｔｒｏｎｉｃ Ｇｌａｓｓ Ｃｏ．， Ｌｔｄ． Net amount of share capital 383,000,000.00 383,000,000.00 383,000,000.00 383,000,000.00 Capital common reserve 536,433,509.00 536,433,509.00 536,433,509.00 536,433,509.00 Surplus common reserve 27,454,788.00 27,454,788.00 27,454,788.00 27,454,788.00 Of which: Statutory public welfare fund Retained profit -347,362,006.00 -347,362,006.00 -369,432,877.00 -369,432,877.00 Of which:：Cash dividends 0.00 0.00 0.00 0.00 Converted difference of foreign currency statements Total owner's equity （ or 599,526,291.00 599,526,291.00 577,455,420.00 577,455,420.00 shareholders' equity）: Total liabilities and owner's equity 1,412,218,041.00 755,734,037.00 1,505,567,156.00 718,991,452.00 （or shareholders' equity） Profit and Profit Distribution Statement Prepared by: Shijiazhuang Baoshi Electronic Glass Co., Ltd. Domestic statements Unit: RMB Report period Same period of the previous year Item Consolidated Parent company Consolidated Parent company I. Income from the key business 80,896,915.00 80,896,915.00 53,621,716.00 53,621,716.00 Less: Cost of key business 57,948,711.00 57,948,711.00 31,244,581.00 31,244,581.00 Key business tax and surtax 729,598.00 729,598.00 656,219.00 656,219.00 II. Profit from key business 22,218,606.00 22,218,606.00 21,720,916.00 21,720,916.00 (negative for loss) Add: Profit from other 18,572,248.00 14,004,785.00 24,076,371.00 20,858,498.00 businesses (negative for loss) Less: Operating expenses 1,121,290.00 1,121,290.00 565,868.00 565,868.00 Administration expenses 34,270,640.00 27,039,508.00 27,982,384.00 22,932,631.00 Financial expenses 16,992,081.00 1,931,218.00 15,965,078.00 3,293,922.00 III. Operating profit (negative for -11,593,157.00 6,131,375.00 1,283,957.00 15,786,993.00 loss) Add: Investment income(negative 37,998,536.00 16,230,494.00 36,086,888.00 17,518,777.00 for loss) Subsidy income Non-operating income 75,760.00 75,760.00 123,332.00 110,332.00 Less: non-operating expenses 504,975.00 204,505.00 2,292,535.00 2,254,602.00 IV. Total profit (negative for loss) 25,976,164.00 22,233,124.00 35,201,642.00 31,161,500.00 Less: income tax 162,253.00 162,253.00 1,963,346.00 1,963,346.00 Less::Gains and losses of 3,743,040.00 4,040,142.00 minority shareholders V. Net profit (negative for loss) 22,070,871.00 22,070,871.00 29,198,154.00 29,198,154.00 Add: Year-beginning retained -369,432,877.00 -369,432,877.00 -398,631,031.00 -398,631,031.00 profit Other amount transferred in VI. Distributable profit -347,362,006.00 -347,362,006.00 -369,432,877.00 -369,432,877.00 Less: Statutory surplus common reserve appropriated Statutory public welfare fund appropriated Staff and workers' bonus and welfare fund appropriated Reserve fund appropriated Enterprise development fund appropriated Returned investment income －15－ Ｓｕｍｍａｒｙ ｏｆ ２００３ Ａｎｎｕａｌ Ｒｅｐｏｒｔ ｏｆ Ｓｈｉｊｉａｚｈｕａｎｇ Ｂａｏｓｈｉ Ｅｌｅｃｔｒｏｎｉｃ Ｇｌａｓｓ Ｃｏ．， Ｌｔｄ． VII. Profit distributable to investors -347,362,006.00 -347,362,006.00 -369,432,877.00 -369,432,877.00 Less: Dividend of preferred shares payable Discretionary surplus common reserve appropriated Dividend of common shares payable Capitalized dividends of common shares VIII、Retained profit -347,362,006.00 -347,362,006.00 -369,432,877.00 -369,432,877.00 Supplementary information: 1. Proceeds from the sales or disposal of departments or invested companies 2. Losses from natural calamities 3. Total profit increased (or decreased) by the change of accounting policy 4. Total profit increased (decreased) by the change of accounting estimate 5. Losses from debt restructuring 6. Other Cash Flow Statement Prepared by: Shijiazhuang Baoshi Electronic Glass Co., Ltd. Domestic statements Unit: RMB Report period Item Consolidated Parent company I. Cash flow from operating activities: Cash received from commodity sales and labor provision 242,326,664.00 216,794,763.00 Refunded taxes and levies Other cash receipts related to operating activities 118,340.00 60,456.00 Subtotal of cash inflow 242,445,004.00 216,855,219.00 Cash paid for purchasing commodities and accepting 163,155,472.00 156,608,286.00 labor Cash paid to and for staff and workers 28,302,025.00 17,936,511.00 Taxes and levies paid 13,920,721.00 12,659,135.00 Other cash payments related to operating activities 208,555,941.00 26,210,702.00 Subtotal of cash outflow 413,934,159.00 213,414,634.00 Net cash flow from operating activities -171,489,155.00 3,440,585.00 2. Cash flow from investing activities Cash received from investment recovery 97,320,795.00 Cash received from obtaining investment 18,404,313.00 income Net cash received from the disposal of fixed assets, 134,329.00 134,329.00 intangible assets and other long-term assets Other cash receipts related to investing activities 6,612,850.00 Subtotal of cash inflow 122,472,287.00 134,329.00 Cash paid for constructing or purchasing fixed 2,876,083.00 2,876,083.00 assets, intangible assets and other long-term assets Cash payment to Investment activities cash payment related to financing activities Subtotal of cash outflow 2,876,083.00 2,876,083.00 Net cash flow from investing activities 119,596,204.00 -2,741,754.00 3. Net cash flow from financing activities Cash received from absorption of investment Cash received from loan Other cash receipts from financing activities Subtotal of cash inflow －16－ Ｓｕｍｍａｒｙ ｏｆ ２００３ Ａｎｎｕａｌ Ｒｅｐｏｒｔ ｏｆ Ｓｈｉｊｉａｚｈｕａｎｇ Ｂａｏｓｈｉ Ｅｌｅｃｔｒｏｎｉｃ Ｇｌａｓｓ Ｃｏ．， Ｌｔｄ． Cash paid for debt repayment Cash paid for distribution of dividends or profits or interest reimbursement Other cash payment related to financing activities Subtotal of cash outflow Net cash flow from financing activities 4. Influence of the change of exchange rate on cash 5. Net increase of cash and cash equivalents -51,892,951.00 698,831.00 Supplementary information:: 1. Adjusting net profit to net cash flow in operating activities: Net profit 22,070,871.00 22,070,871.00 Add: Asset depreciation reserve provided -648,276.00 -1,070,951.00 Fixed assets depreciation 20,849,045.00 18,509,391.00 Amortization of intangible assets 295,858.00 295,858.00 Amortization of long-term expenses to be amortized -5,737,403.00 -5,737,403.00 Decrease of expenses to be amortized (Less: increase) 57,482.00 57,482.00 Increase of expenses drawn in advance (Less: decrease) -56,372,529.00 -18,471,252.00 The losses from the disposal of fixed assets, intangible 109,255.00 109,255.00 assets and other long-term assets (less: gains) Loss from scrapping of fixed assets Financial expenses 17,074,504.00 1,955,919.00 Investment losses (less: gains) -37,998,536.00 -16,230,494.00 Credit item of deferred tax (Less: debit item) Decrease of inventories(less: increase) -28,381,359.00 -27,759,718.00 Decrease of operating accounts receivable (less: -138,429,055.00 -4,027,472.00 increase) Increase of operating accounts payable(less: 31,877,948.00 33,739,099.00 decrease) Other Current income of Minority shareholders 3,743,040.00 Net cash flow from operating activities -171,489,155.00 3,440,585.00 2. Investing and financing activities not involving cash receipts and expenditure Debts converted into capital Convertible corporate bond to mature within one year Fixed assets under financing lease 3. Net increase of cash and cash equivalents Balance of cash at the end of the period 12,958,527.00 855,013.00 Less: Balance of cash at the beginning of the period 64,851,478.00 156,182.00 Add:Balance of cash equivalent at the end of the period Less: Balance of cash equivalent at the beginning of the period Net increase/decrease) of cash and cash equivalents -51,892,951.00 698,831.00 9.3 The company started to implement revised accounting standards for business enterprises-matters after balance sheet date from July 1,2003. Before the implementation of this revised standard,cash dividends were transferred out from shareholders equity and recognized as liabilities in the period for profit distribution plan formulated by the board of directors. After july 1,2003,cash dividends are recognized as liabilities in the period for the approval of profit distribution plan by the shareholders’general meeting. The implementation of this standard had no material influence on the poerating results for the report year. 9.4 The consolidation scope of this report period remained unchanged compared with the annual report of the previous year. Shijiazhuang Baoshi Electronic Glass Co., Ltd. April 22, 2004 －17－