中集集团(000039)2003年年度报告摘要（英文版）

CHINA INTERNATIONAL MARINE CONTAINERS (GROUP) CO., LTD. (Incorporated in People’ s Republic of China) ANNUAL REPORT 2003 (SUMMARY) Ended Dec. 31, 2003 1. Important Notes 1.1 The Board of Directors of CHINA INTERNATIONAL MARINE CONTAINERS (GROUP) CO., LTD. (hereinafter referred to as the Company) and its directors individually and collectively accept full responsibility for the correctness, accuracy and completeness of the contents of this report and confirm that there is neither any omission of material facts, untrue presentations, nor any misleading statement contained in the information herein. The 2003annual report summary is abstracted from the annual report; the investors are suggested to read the full text of annual report to understand more details. 1.2 No Directors stated that they couldn’t ensure the correctness, accuracy and completeness of the contents of the Annual Report or have objection for this report. 1.3 Eight Directors were expected to attend the Board meeting and actually seven of them were present. Director Mr. Yan Chengxiang was absent from the Board meeting due to some reasons. 1.4 KPMG Certified Public Accountants issued an unqualified Auditors’Report 1.5 Chairman of the Board of the Company Mr. Li Jianhong, President Mr. Mai Boliang and General Manager of Financing & Management Dept. Mr. Jin Jianlong hereby confirm that the Financial Report contained in the Annual Report is authentic and complete. 2. Company Profile 2.1 Basic information Short form of the stock CIMC Stock code 000039、200039 Listed stock exchange Shenzhen Stock Exchange Registered address 5/F, Financial Center of Shekou Industrial Zone, Shenzhen, Guangdong Province, P.R.C Office address R&D Center of CIMC, No. 2 Gangwan Avenue, Shekou Industrial Zone, Shenzhen, Guangdong Province, P.R.C Post code 518067 Internet web site of the Company www.cimc.com E-mail of the Company shareholder@cimc.com 1 2.2 Liaison person and liaison method Authorized Representative in Charge Secretary of the Board of Directors of Securities Affairs Name Yu Yuqun Wang Xinjiu Liaison address R&D Center of CIMC, No. 2 R&D Center of CIMC, No. 2 Gangwan Avenue, Shekou Industrial Gangwan Avenue, Shekou Industrial Zone, Shenzhen, Guangdong Zone, Shenzhen, Guangdong Telephone (86) 755-2669 1130 (86) 755-2669 1130 Fax (86) 755-2682 6579 (86) 755-2682 6579 E-mail shareholder@cimc.com shareholder@cimc.com 3. Summary of Accounting Data and Financial Indexes 3.1 Three-year financial information summary Three-year Financial Information Summary (Prepared under International Financial Reporting Standards [“IFRS”]) Unit： RMB’000 Items 2003 2002 Increase/Decrease 2000 in the year（%） Container sales volume (TEU) 1,173,293 751,578 65.80 697,355 Revenue 13,705,212 9,025,986 51.84 8,851,900 Profit from operations 905,376 512,948 76.50 692,854 Income from associates 8,747 121,677 -92.81 50,541 Profit before tax 888,830 569,622 56.04 614,567 Income tax expense 111,361 58,669 89.81 65,760 Profit after tax 777,469 510,953 52.16 548,807 Minority interests 83,418 87,660 -4.84 84,075 Net profit of the year 694,051 423,293 63.96 464,732 Basic earnings per share* (RMB Yuan) 1.33 0.83 60.24 0.91 Total assets 10,258,356 8,073,894 27.06 6,586,036 Shareholders' equities 5,295,653 2,850,497 85.78 2,101,398 Net assets per share (RMB Yuan) 8.40 5.59 50.27 4.12 Rate of Return on Stockholders’Equity (ROE) 13.11 14.85 -11.72 22.12 Cash flows from operating activities 615,122 -677,635 190.78 -238,630 Net (decrease)/increase in cash and cash 324,667 -9,441 3612.75 544,683 equivalents Dividend (per share) Cash dividend of Cash dividend － 0.20 RMB0.38, converting RMB0.50, public reserve into 0.50 share share capital at the rate bonus of 0.6 share 2 * The calculation of basic earnings per share is based on profit attributable to shareholders of RMB694,051,000 (2002: RMB423,293,000) and a weighted average number of shares in issue during the year ended 31 December 2003 of 522,137,712 (2002: 510,302,000). There were no diluting potential ordinary shares in existence during the years ended 31 December 2002 and 2003. 3.2 Reconciliation of the Group’s consolidated results and net assets prepared under International Financial Reporting Standards (“IFRS”) and the PRC Accounting Rules and Regulations: √Applicable □Non-applicable Profit attributable to shareholders for the year ended Net assets at 31 December 2003 31 December 2003 RMB’000 RMB’000 Prepared under the PRC Accounting Rules and Regulations 682,688 5,290,940 Adjustments to align with IFRS: (i) Adjustment to minority interests 665 8,635 (ii) Adjustment to deferred tax assets 306 20,202 (iii) Adjustment to goodwill and negative Goodwill (9,579) (51,388) (iv) Adjustment to interest capitalization 1,051 12,938 (v) Others 19,938 14,326 Prepared under IFRS 694,051 5,295,653 ======== ======== Profit attributable to shareholders for 4. Changes in Share Capital and Particulars about Shareholders 4.1 Statement of change in share capital 3 Unit: share Before the Increase/decrease After the Share ratio (%) change (+/－) change I. Unlisted shares 1. Sponsor’s shares 227,363,133 0 227,363,133 36.07 Including: Shares held by domestic legal person 102,313,410 0 102,313,410 16.23 Shares held by foreign legal person 125,049,723 0 125,049,723 19.84 2. Shares held senior executives* 346,332 －109,308 237,024 0.04 Total unlisted shares 227,709,465 －109,308 227,600,157 36.11 II. Listed shares 1. RMB ordinary shares 68,986,930 120,109,308 189,096,238 30.00 2. Domestically listed foreign shares 213,605,701 0 213,605,701 33.89 Total listed share 282,592,631 0 402,592,631 63.89 III. Total shares 510,302,096 120,000,000 630,302,096 100 Note: Shares held by senior executives refer to the frozen shares held by directors, supervisors and senior executives with totally amounting to 237,024 shares. 4.2 Statement of shares held by the top ten shareholders 4.2.1 the top ten shareholders Total shareholders at the end of Ended Dec. 31, 2003, the Company has totally 38,370 shareholders, of them, 27,193 report year shareholders of A-share and 11,177 shareholders of B-share. Particulars about shares held by the top ten shareholders Increase / Number of Holding shares Proportion Type of shares decrease in share Nature of Name of Shareholder at the year-end in total (Circulating/Non-ci the report pledged or shareholders (share) shares (%) rculating) year frozen 1. China Ocean Shipping (Group) 0 102,313,410 16.23% Non-circulating 0 Domestic legal Company person 2. CHINA MERCHANTS CONTAINER 0 102,313,410 16.23% Non-circulating 0 Foreign legal person INDUSTRIAL CO., LTD. 3. FAIR OAKS DEVELOPMENT LIMITED +1,213,680 38,278,680 6.07% Circulating 0 Foreign investment shareholder 4. PROFIT CROWN ASSETS LIMITED 0 22,736,313 3.61% Non-circulating 0 Foreign legal person 5. EMERGING MARKETS GROWTH +10,069,64 10,069,645 1.60% Circulating Unknown Foreign investment FUND,INC. 5 shareholder 6. GT PRC FUND +5,639,126 7,639,126 1.21% Circulating Unknown Foreign investment shareholder 7. JPMORGAN FLEMING FUNDS-ASIA +6,907,282 6,907,282 1.10% Circulating Unknown Foreign investment EQUITY FUND shareholder 8. LONG HONOUR INVESTMENTS 0 5,994,817 0.95% Circulating Unknown Foreign investment LIMITED shareholder 9. HONGYANG SECURITIES +5,516,269 5,516,269 0.88% Circulating Unknown Social public INVESTMENT FUNDS 4 10. E FUND STEADY INCREASE +5,184,245 5,184,245 0.82% Circulating Unknown Social public SECURITIES INVESTMENT FUNDS (1) Among the above the top ten shareholders, there exists the associated relationship as well as the consistent action between the No. 1 shareholder and No. 7 shareholder, namely Long Honour Investment Limited is the wholly-owned subsidiary company of China Ocean Shipping (Group) Company (COSCO). The said two shareholders didn’t belong to the persons acting in concert regulated by the Management Regulation of Information Disclosure on Change of Shareholding for Listed Companies with the other shareholders. There existed the associated relationship as well as the consistent action between the No. 2 shareholder and the No. 3 shareholder, namely China Merchants Container Industrial Co., Ltd. and Explanation on associated Fair Oaks Development Limited are the wholly-owned subsidiary companies of China Merchant Holdings (International) Co., Ltd. (CMHI). The said two shareholders didn’t belong to the persons relationship among the top ten acting in concert regulated by the Management Regulation of Information Disclosure on Change of shareholders or consistent action Shareholding for Listed Companies with the other shareholders. The Company is not aware of their associated relationships among other shareholders of circulation share, whether belongs to the persons acting in concert regulated by the Management Regulation of Information Disclosure on Change of Shareholding for Listed Companies. (2) On Dec. 22, 2003, CSRC approved to transfer 102,313,410 non-listed foreign shares of the Company held by China Merchants Container Industry Co., Ltd. and 22,736,313 non-listed foreign shares of the Company held by Profit Crown Assets Limited into B shares, which will be listed and circulated in B share market of Shenzhen Exchange after one year since the approval date. 4.2.2 The top ten shareholders of circulating share Holding shares at the Shareholders’name Proportion Type of shares period-end (share) 1. FAIR OAKS DEVELOPMENT LIMITED 38,278,680 6.07% B-share 2. EMERGING MARKETS GROWTH FUND,INC. 10,069,645 1.60% B-share 3. GT PRC FUND 7,639,126 1.21% B-share 4. JPMORGAN FLEMING FUNDS-ASIA EQUITY FUND 6,907,282 1.10% B-share 5. LONG HONOUR INVESTMENTS LIMITED 5,994,817 0.95% B-share 6. HONG YANG SECURITIES INVESTMETN FUNDS 5,516,269 0.88% A-share 7. E FUNDS PLACIDNESS INCREASE SECURITIES INVESTMENT FUNDS 5,184,245 0.82% A-share 8. SOUTERN STEADY GROWING SECURITIES INVESTMENT FUNDS 5,099,396 0.81% A-share 9. E FUNDS STRATEGY GROWING SECURITIES INVESTMENT FUNDS 4,642,859 0.74% A-share 10. JING FU SECURITIES INVESTMENT FUNDS 4,484,063 0.71% A-share Explanation on associated relationship among the top ten shareholders or consistent action: E FUNDS PLACIDNESS INCREASE SECURITIES INVESTMENT FUNDS and E FUNDS STRATEGY GROWING SECURITIES INVESTMENT FUNDS are both of securities investment funds managed by E FUND MANAGEMENT CO., LTD. 4.3 Particulars about controlling shareholders and actual controller of the Company 4.3.1 Particulars about change in controlling shareholders and actual controller of the Company □Applicable √Non-applicable 4.3.2 Introduction of controlling shareholder and other actual controller There are no shareholders (holding shareholder) who hold over 30% of the Company’ s total shares. 5 Legal Date of Registered Structure Shareholder’s name Proportion Business scope representative foundation capital of equity COSCO 16.23% Wei Jiafu Apr. 27, 1961 RMB 1.9 (Note 1) Carry on international passenger billion and cargo transportation business, receive domestic and foreign business for booking and leasing ships or storehouses, undertake lease, construction, sale and borrowing and repair of ships, containers and spare parts, and dispose undertaking, storing, applying to customers, forwarding, all-type transportation and door-to-door transportation for domestic and foreign import and export cargoes CHINA MERCHANTS CONTAINER 16.23% Jan. 17, 1995 HKD (Note 2) Investment and Shareholding INDUSTRIAL CO., LTD. 10,000 Note 1: COCSO is one of the 44 mainstay enterprises under the direct control of the central government. Note 2: China Merchants Container Industrial Co., Ltd. is a wholly-owned subsidiary company of CMHI, which is mainly engaged in investment and shareholding. CMHI is a listed company in the Stock Exchanges of Hong Kong, China Merchants Group (Hong Kong) Co., Ltd. holds 53.146% equity of CMHI. 5. Particulars About Director, Supervisor, Senior Executive 5.1 Particulars about changes in shares held by Directors, Supervisors and Senior executives Name Title Sex Age Office term Holding Holding Increase or Reason for share at the share at the decrease change year-begin year-end Li Jianhong Chairman of the Male May 2001 -May 2004 0 0 0 47 Board Zhao Huxiang Vice Chairman of Male May 2001 -May 2004 0 0 0 48 the Board Mai Boliang Director Male May 2001 -May 2004 117,117 117,117 0 President 45 May 2001 -May 2004 Du Feng Director Male May 2001-June 2003 109,308 0 －109,308 resigned from 60 the position of 6 Director Wang Xiaodong Director Male 45 May 2001-June 2003 0 0 0 Yan Chengxiang Director Male 35 May 2001 -May 2004 0 0 0 Wang Zhixian Director Male 37 May 2002-May 2005 0 0 0 Liu Jie Director Male 32 May 2002-June 2003 0 0 0 Xiao Zhuoji Independent Male May 2001 -May 2004 0 0 0 70 director Han Xiaojing Independent Male May 2001 -May 2004 0 0 0 48 director Zhang Limin Independent Male Nov. 2002-Nov. 2005 0 0 0 48 director Zhao Qingsheng Vice-president Male 52 Aug. 2003 -Aug. 2004 0 0 0 Li Yinhui Vice-president Male 36 Oct. 2002-Oct. 2003 0 0 0 Li Ruiting Vice-president Male 56 June 2001 -June 2004 78,078 78,078 0 Tang Guocai Vice-president Male 65 June 2001 -June 2004 0 0 0 Gu Hongren Vice-president Male 48 June 2001-June 2004 41,828 41,828 0 Zhou Bosheng Vice-president Male 61 Aug. 2003-Aug. 2004 0 0 0 Du Yongcheng Chairman of the Male May 2002 -May 2005 0 0 0 Supervisory 54 Committee Shi Lei Supervisor Female 46 May 2002 -May 2005 0 0 0 Feng Wanguang Supervisor Male 57 May 2002-May 2005 0 0 0 Wu Fapei Secretary of the Male Aug. 2003-Aug. 2004 0 0 0 46 Board 5.2 Particulars about directors, supervisors holding the post in Shareholding Company √Applicable □Non-applicable Name Name of Shareholding Company Title in Shareholding Company Office term Whether draw remuneration from shareholding company Li Jianhong COSCO Vice-president 2000 to Drawing from Shareholding Company Zhao Huxiang China Merchants Group Co., Ltd. Vice-president 2001.11 to Drawing from associated company of shareholder Wang Xiaodong COSCO Industrial Co. General Manager 1998.1 to Drawing from associated company of shareholder Yan Chengxiang COSCO Shipyard Engineering Group Co., Ltd. Manager of Corporate Planning Dept. 2000.7 to Drawing from associated company of shareholder Wang Zhixian CMHI General Manager of Enterprise 2002.3 to Drawing from associated Management Dept. company of shareholder Liu Jie CMHI Deputy CFO 2002.5 to Drawing from associated company of shareholder Du Yongcheng CMHI Director, Deputy General Manager 1998 to Drawing from associated 7 company of shareholder Shi Lei COSCO Shipyard Engineering Group Co., Ltd. Chief Accountant 2001.6 to Drawing from associated company of shareholder 5.3 Particulars about the annual payment of directors, supervisors and senior executives Total annual payment RMB 4,350,000 Total annual payment of the top three Directors drawing RMB 1,260,000 the highest payment Total annual payment of the top three Senior executives RMB 1,660,000 drawing the highest payment Allowance of independent Director RMB 80,000 /per person/ year Other treatment of Independent Directors No Name of Directors and Supervisors received no payment Director: Li Jianhong, Zhao Huxiang, Wang Xiaodong, Yan or allowance from the Company Chengxiang, Wang Zhixian and Liu Jie Supervisor: Du Yongcheng and Shi Lei Payment Number of persons RMB 500,000 ～ RMB 800,000 2 RMB 300,000 ～ RMB 490,000 7 RMB 50,000 ～ RMB 100,000 3 6. Report of the Board of Directors 6.1 Discussion and analysis of the whole operation in the report period 1. Summary In 2003 and especially in the second half of the year, the economy in all main areas all over the world took on a trend of strong recovery. The total amount of export in the foreign trade of China increased by 37.1% than that in the same period of last year, jumping to rank in the 4th place all over the world, which was the fastest increase since 1980. The container throughput in main ports of China increased by 31% than that in the same period of last year. Under this background, the global demand of containers climbed up strongly and created the new historical record. The Group realized Revenue and Net profit for the year amounting to RMB13,705,212,000 and RMB694,051,000 respectively, an increase of 51.84% and 63.97% respectively over the same period of last year. The container business continued to keep good condition like last year with product price recovering continuously and the Group sold accumulative containers amounting to 1,173,300TEUs, an increase of 56.11% over the same period of last year, which created the new highest record in the same periods of previous years. The industrial position of the Group’ s container business was firmer. In the manufacturing business of road transport vehicles, the Group also gained piercing progress in such aspects as construction of productive base, acquisition and market expansion. The Group sold 8,991 units of vehicles accumulatively in the whole year and realized sales income amounting to RMB 685 million in the road transport vehicle business. Since the government has not approved the equity acquisition, the sales income amounting to RMB 667 million in it has not been placed into the consolidated scope of the Company’ s financial statements. 8 The Company finished the additional issuance of A shares amounting to 120 million shares and enriched share capital amounting to RMB 1,751 million, which has improved the Company’ s liability structure obviously and has provided strong support of capital for the push of the Group’ s development strategy; has enhanced the negotiability of A shares and was beneficial for the Company’ s value to be fully represented in the securities market. Viewing 2004, the global economy has entered into the rapid recovery phase. The further deepening of upgrading of industrial structure and accelerating of manufacturing industry’ s transfer to Asia especially to China shall create relatively loose market environment for the rapid and stable growth of international economy and trade in a certain period in the future. The impetus of factors in China to global economy growth boosts up increasingly. Global economy especially territorial trade is hopeful to increase fast and the container trade shall climb up continuously. Thus, the demand for containers shall also continue to keep steady growth. In the aspect of modern road transport vehicle manufacturing business, in 2004, the Group’ s semi-trailer business shall receive a broader and more beneficial operating environment. The Group shall expand the productive scale, do the operating management well, continue to push the acquisition and merger and improve the layout of productive base. 2. Analysis to the main financial data (1) Particulars about Revenue, profit and cash flow Analysis: Revenue increased by 51.84% than that in the same period of last year, which was mainly because that the demand for containers in the whole year kept prosperous and the sales volume of containers increased by a big margin with recovering price. Gross profit increased by 52.89% than that in the same period of last year and net profit for the year increased by 63.97% than that in the same period of last year, which was mainly because that the sales volume of containers increased by a big margin and the price recovered. Net increase in cash and cash equivalents increase by 3.54 times than that in the same period of last year, which was mainly because that the Company additionally issued 120 million A shares in Nov. 2003 and its productive and operating scale was expanded. (2) Particulars about assets and shareholders’equity Analysis In the report period, the Company’ s assets structure was still in good status. The total assets increased by27.06% than that at the beginning of the year, which was mainly because that the sales of products still kept prosperous at the end of the year, resulting into the increase in current assets. In the current assets: Cash and cash equivalents increased by 85.01% than that at the beginning of the period and Trade and other receivables increased by 39.09%. In the report year, the Company’ s main assets indexes kept in good level: The velocity of total assets was 1.495; the velocity of accounts receivable was 3.58; the velocity of inventories was 9.80; the assets-liability rate decreased to 41.95%. The shareholders’equity increased by 85.78% than that at the beginning of the year, which was 9 mainly because that the Company finished to additionally issue 120 million A shares in the report period in the report period, from which the raised proceeds was RMB 1,751 million (deducting 6.2 Statement of main business classified according to industry or product Unit: RMB’000 Increase/decrease of revenue compared with Product Revenue the previous year (%) Containers 13,117,175 49.60 6.3 Particulars about main business classified according to region Unit: RMB’000 Increase/decrease of revenue compared Region Revenue with the previous year (%) USA 3,591,483 65.16 Europe 6,308,050 55.72 Asia 3,504,819 50.59 Other regions 300,860 －61.03 Total 13,705,212 51.84 6.4 Particulars about the customers of purchase and sales Unit: RMB’000 Total purchase amount of Proportion in the total 1,490,220 36.48% the top five suppliers purchase amount (%) Total sales amount of the Proportion in the total 4,567,874 33.10% top five sales customers sales amount (%) 6.5 Operation of associates companies (applicable to investment income taking over more than 10% of net profit of the Company) □Applicable √Non-applicable 6.6 Explanation of reason of material change of main business and its structure □Applicable √Non-applicable 6.7 Explanation of reason of material change of profitability capability of main business (gross margin) compared with the previous year □Applicable √Non-applicable 6.8 Analysis of reason of material change of operating results and profit structure compared with the previous year □Applicable √Non-applicable 10 Analysis of reason of material change of the whole financial position compared with the previous year □Applicable √Non-applicable 6.9 Explanation of the past, current and future important effects of the material change of production and operation environment, macro-policies and regulations on the Company’s financial position and operating results √Applicable □Non-applicable In 2003, the global economy rapidly increased, the increase of the global container trade was more rapid and the growing speed of foreign trade of China created a new record. Meanwhile, because the economy of China continuously increased in temperature, industry structure rapidly developed toward the type under the leading of heavy and chemical industry, the internal need of raw material thrived, the price of steel products could keep in top place in longer time. On Oct. 13, 2003, Ministry of Finance and State Administration of Taxation promulgated Notification on Adjusting Export Rebate Rate that made structure adjustment of the present tax reimbursement rate of VAT of export goods since Jan. 1, 2004. Among of it, the rebate rate of export goods for containers, the main product of the Group, drops from 17% to 13%. In 2003, the national and provincial governments started to adjust policy and regulations on road transportation. For example, some provinces reformed collection way and standard of transit charge of road transportation from collecting as marked rated dead weight tonnage to collecting transit charge as the actual weight of goods; from Dec. 1, 2003, the transportation management departments of five provinces and cities in North of China cooperated and carried on action of Administrating Over-weight and Over-limit of Road Transportation. The above events show that the danger of road transportation under over-weight and over-limit has aroused the high emphasis of the government. Its influence on the Group’ s business development mainly shows in the following aspects: 1. The need of containers in the whole year keeps bloom, the price of container also gets rise to the top level in recent years and the order and sale amount increases in a large scope. The dropping of export tax reimbursement rate of partial commodities perhaps has a structure influence on the decrease and increase of some products’export of China. The export tax reimbursement rate of container drops from 17% to 13% and it is estimated to make product’ s cost increase slightly in 2004. The Group took such measures as increasing and rebuilding production base, enlarging production ability, improving service of container delivery and so on to meet the market need. Aiming at the pressure of production cost of dry van container of the Group caused by the undulation of price of raw material in high place, the Group improved purchase management, controlled the range of cost’s rise and maintained the stability of level of gross ratio. Concerning falling of export rebate rate, since Jan. 1, 2004, the Group will appropriately adjust the sale stratagem, so it is estimated that the influence caused by falling of export rebate rate can be basically counteracted. 2. The national and local governments’starting to adjust and amend policy and regulations on road transportation is in favor of the business development of road transportation vehicle of the Group. 11 6.10 Completion of the profit estimation □Applicable √Non-applicable 6.11 Completion of the business plan □Applicable √Non-applicable 6.12 Application of the raised funds proceeds √Applicable □Non-applicable On Nov. 20, 2003, the Company has raised capital of RMB 1.751 billion by the accomplishment of additional issuance of 120,000,000 A shares (issuance costs deducted) Unit: RMB’000 Committed projects Planned Changes of Planned Actual Progress of Profit of project investment investment amount of amount of project investment investment contrast with in the period of the period the plan Transform of dry container No 329,060 329,060 Yes 16,450 plant 329,060 Improvement of the No 181,730 181,730 Yes 17,000 productivity of container for district purpose and container for special purpose 413,500 Remolding for improving the No 182,060 182,060 Yes 21,100 productivity of the reefer container 221,060 Tank Container 145,390 No 110,000 110,000 Yes 8,720 Compartmental semi-Trailer 231,560 No 231,560 231,560 Yes Not accrued yet Container chassis 190,210 No 0 0 No Not accrued yet Compartmental semi-Trailer No 213,880 213,880 Yes Not accrued yet for the processing of overseas raw materials 240,120 Total 1,770,900 — 1,248,290 1,248,290 — 63,270 Note: Some investment of projects have not accrued revenue yet in 2003; The investment of Container chassis project has been postponed contrast with the plan. Ended the end of the report period, the raised capital amounting to RMB 502.814 million, which hasn’t been put into use, would supplement the current fund temporarily. 6.13 Application of the proceeds not raised by issuing share √Applicable □Non-applicable 12 Unit: RMB’000 Name of item Amount of item Progress of project Profit of project Additional investment to Shanghai CIMC 111,780 Completed Not accrued yet Baowell Industrial Co., Ltd. Additional holding of 5% share capital of 7,452 2,000 Completed Shanghai CIMC Far East Container Co., Ltd Additional holding of 16.21% equity of Qingdao 40,365 14,500 Completed CIMC Reefer Co., Ltd Additional holding of 8.37% equity of Qingdao 80,026 Uncompleted Not accrued yet CIMC Container Manufacture Co., Ltd. Setting up Ningbo CIMC Logistics Equipment 12,420 Uncompleted Not accrued yet Co., Ltd Total 252,043 — — 6.14 Explanation of the “Non-standardized Opinion”of Certified Public Accountants by the Board of Directors □Applicable √Non-applicable 6.15 Business plan as of the new year of the Board of Directors √Applicable □Non-applicable 1. Development background and operation goal of the Company’s business in 2004 (1) Development background of business If expecting 2004, the increase speed of the world economy will be accelerated, the progress of the global manufacture industry’ s diverting to China will continue, the global shipping industry will be a continuous prosperity, the international trade and container trade will stably increase and China will still keep higher increase speed of import and export of foreign trade. It is estimated that the market need of container in the whole 2004 will has some rise compared with that in 2003 and meanwhile, the price of container will has an up creep in some range. Seeing from the background of industry development of modern road transportation vehicle, at present, the advantage of China as the global manufacture base appears, the civil consumption structure further upgrades, the internal need further enlarges, the development of modern logistics industry inside the country is rapid, the new-style logistics enterprises are growing and grandness and the need of late-model efficient transportation tool in market of road transportation. On the other hand, the state has established the transportation layout and industry policy of pushing industry development of new-style efficient road transportation vehicle. In 2004, the state will enhance construction of the principal line of the state-owned road, layout the state’ s freeway network and continue to strengthen administration of road transportation under over-weight and over limit. In Feb. 2004, National Development and Reform Commission promulgated notification and started to administrate vehicles products with the type of carrying goods of Large Tonnage and Small Standard (note: namely the dead weight tonnage stated in vehicle driving certification is 13 less than the actual designed parameter) and it shows nonstandard road transportation’ s negative influence on such aspects as transportation efficiency, cost and security has already aroused the high emphasis of the government and modern road transportation vehicles’taking place of traditional common carrying trunks has stared in the face. The step of economy resuscitation of USA clearly quickens, it will enter increasing period and the level of need of road transportation vehicle improves. It will be beneficial to the extension of manufacture business of road transportation of the Group in foreign market. (2) Business operation goal The Company will make efforts to hanker higher product quality, wider product line, more normative enterprise’s administration structure and operation, customer service with better quality and more added-value business for the consumers and try our best to make the Company become the industry’ s leader with mission sense and responsibilities. The whole operation goal is: ① in aspect of container business, the Company will strengthen technology innovation and management innovation, consummate layout of production base, improve products quality and extend service fields; ② in aspect of business of road transportation vehicle, the Company will further consummate distribution of production and sale network, reorganize production elements of the industry, improve rapidly the sale scale and strengthen the benign communication of domestic and foreign businesses; ③ strengthen the group management and fully realize the effect of cooperation; ④ in aspects of other businesses, the Company will continue to maintain the guideline of controlling risk and self-discipline operation, roll and develop by itself. 2. Operation measure of the Company’s business in 2004 (1) In aspect of business of container, the Group will continue to optimize the network distribution of industry base; take effective measures to realize the promise that the Company provides more convenient and rapid added-value service for the customers; further establish and consummate the system of technology innovation, consummate management of basic technology and management and service of product’ s research and development and make the R&D system of products and technology of the Group support the continuous development of businesses in order to ascend the position in the industry; carve out and innovate and extend the service fields of business. (2) In aspect of business of modern road transportation vehicle, the Group will increase resource’ s input and rapidly form the industry’ s scale; ensure the business development of the purchased companies and smooth process of operation and management of the newly-established factories, push the work of purchase and merge of semi-trailer enterprises in a stable step, preliminary complete distribution of production base; strengthen construction of frame and system of marketing service and cooperation system of fitting purchase. (3) In aspect of other businesses, the Group will continue to exploit manufacture business of airport floor equipments. In 2004, CIMC Tianda will complete the obtained full orders of the 14 domestic main airports and will continue to exploit the real estate market in Shanghai and Guangdong. Profit estimation of the New Year □Applicable √Non-applicable 6.16 The preplan of profit distribution and capital public reserve Audited by Shenzhen Pan-China Schinda Certified Public Accountants, in 2003 the Company realized net profit less tax and minority’ s equity amounting to RMB682,688,009.42. Based on the Company’ s share capital amounting to 630,302,096 shares ended Dec.31, 2003, earnings per share is RMB1.0831. The suggested preplan on profit and dividends distribution in 2003 is: according to the Articles of Association and current Accounting System, based on the net profit amounting to RMB713,772,761.87 of the parent company in 2003, appropriating 10% of the net profit as statutory public reserve amounting to RMB71,377,276.15, appropriating 5% of the net profit as public welfare fund amounting to RMB35,688,638.08, plus the undistributed profit carried down from last year amounting to RMB 532,674,486.59, the total profit available for distribution to the shareholders in 2003 was RMB1,139,381,334.23. Based on the total share capital of the Company amounting to 630,302,096 shares ended Dec.31, 2003, distributing cash dividends at the rate of RMB3.8 (tax included) for every 10 shares, which totally amounts to RMB239,514,796.48. After the distribution, RMB 850,000,000 is appropriated as discretionary reserves. Preplan on conversion of public reserve into share capital: suggest converting public reserve into share capital at the rate of 6 shares for every 10 shares. After the conversion, the total share capital of the Company increases from 630,302,096 shares to 1,008,483,353 shares and the capital reserve of the Company decreases from RMB 2,257,128,190.94 to RMB1,878,946,933.34. The above preplans are subject to Annual Shareholders’General Meeting 2003 for consideration and approval before implementation and are to be submitted to the Shareholders’General Meeting for authorizing the Board of Directors to amend the Articles of Association on the clauses relevant to registered capital after their implementations. 7. Significant Events 7.1 Purchase of assets □Applicable √ Non-applicable 7.2 Sales of assets □Applicable √Non-applicable 7.3 Important guarantee √ Applicable □ Non-applicable 15 Unit:RMB ‘000 Date of happening Complete Guarantee Name of the Company Amount of Guarantee (date of signing Guarantee term Implementation for related guaranteed guarantee type agreement) or not party or not Shenzhen Southern Zhongji 1,010,572 Related 2003.6.1— 2004.8.31 not yes Containers Manufacture 2003.6.1 Guarantee Co., Ltd. Xinhui CIMC Container 317,640 Related 2003.5.1 –2004.6.30 not yes Co., Ltd. 2003.5.1 Guarantee Shanghai CIMC Far East 276,552 Related 2003.5.1— 2004.6.30 not yes Container Co., Ltd. 2003.5.1 Guarantee Nantong CIMC - Smooth 226,400 Related 2003.5.1— 2004.6.30 not yes Sail Container Co., Ltd. 2003.5.1 Guarantee Nantong CIMC Special 7,904,990 Related 2003. 4.1— 2004.6.30 not yes Transportation Equipment 2003. 4.1 Guarantee Manufacture Co., Ltd. Qingdao CIMC Container 132,480 Related 2003.5.1— 2004.7.31 not yes Manufacture Co., Ltd. 2003.5.1 Guarantee Dalian CIMC Container 1,897,280 Related 2003.4.1— 2004.6.30 not yes Manufacturing Co., Ltd. 2003.4.1 Guarantee Tianjin CIMC North Ocean 1,999,600 Related 2003.4.1— 2004.6.30 not yes Container Co., Ltd. 2003.4.1 Guarantee Qingdao CIMC Reefer 115,920 Related 2003.4.1 –2004.6.30 not yes Container Manufacture Co., 2003.4.1 Guarantee Ltd. Xinhui CIMC Container 247,559.6 Related 2003.5.1 –2004.6.30 not yes Flooring Co., Ltd. 2003.5.1 Guarantee Shenzhen CIMC Wood Co., 82,800 Related 2003. 4 .6— 2004.4.30 not yes Ltd. 2003. 4 6 Guarantee Shenzhen CIMC - Tianda 77,960 Related 2003.3.3— 2004.3.31 not yes Airport Support Ltd. 2003.3.3 Guarantee Shanghai CIMC Generating 15,700 Related 2003. 6. not yes Set Co., Ltd. 2003. 6.10 Guarantee 10— 2004.6.30 7.4 Related credits and liabilities transaction □Applicable √ Non-applicable 7.5 Entrusted assets 16 □ Applicable √ Non-applicable 7.6 Implementation of commitment items □Applicable √Non-applicable 7.7 Significant lawsuit and arbitration □ Applicable √ Non-applicable 7.8 Particulars about the performance of Independent Directors 7.8.1 Pursuant to the requirements of relevant laws and regulations of the Supervisory departments as well as of the Articles of Associations of the Company, the Company engaged three specialists on economy, accounting and law as Independent Directors in order to have a perfect structure of the Board of Directors, ensure the standard operation of the Company and the improvement of the decision-making of the Board of Directors. The three Independent Directors have participated in the significant decision-making activities of the Board of Directors in line with the laws and regulations of Supervisory departments and the Articles of Association of the Company. By taking into account the interests of the shareholders, especially the medium and small shareholders, they issued their own independent opinions supported by their professional knowledge while discussing proposals on operational activities, investment, financing, strategic development plans and increase the issuance of shares at the Board of Directors. They have fulfilled their functions and responsibilities as Independent Directors and played their due role. 7.8.2(1) Special-item explanation on the accumulated and current guarantee of the Company for external parties and implementation of regulation of Document No. 56 of CSRC Ended as at Dec. 31, 2003, the guarantees of the Company for external parties are as follows: (1) The Company has not provided guarantee for any company and person outside the Group and only provided guarantee for the operation capital of the auxiliary subsidiaries of the Group. The Company is a wholly-listed one and provided guarantee for operation capital in budget of the auxiliary subsidiaries mainly due to the need of operation and development of businesses. (2) According to the regulation of Document No. 56 of CSRC of 2003, the listed company can not provide guarantee for other related parties, of whom the Company held less 50% equity The Company provided guarantee for Xinhui CIMC Container Flooring Co., Ltd.. The Company has 40% equity capital of Xinhui CIMC Container Flooring Co., Ltd.. but the Company contracted and operated it through the Company’ s wholly-owned subsidiary-China International Marine Container (HK) Co., Ltd.. In the contact period from Jan. 1, 2001 to Dec. 31, 2005, China International Marine Container (HK) Co., Ltd. wholly manages the affairs of Xinhui CIMC Container Flooring Co., Ltd. such as operation, operation, financing and personal and etc., so it has actual control right. Ended as at Dec. 31, 2003, the balance of contingent liabilities caused by guarantee that the Company provided for Xinhui CIMC Container Flooring Co., Ltd. was RMB 57.62 million. 17 (3) According to the regulation of Notification of Problem on Standardizing Current Capital between Listed Company and Related Party and Listed Company’ s Guarantee for External Parties (ZJF[2003] No. 56), the total amount of guarantee the Company provides for external parties can not exceed 50% of net assets in the latest accounting year. Ended Dec. 31, 2003, the balance of contingent liabilities caused by guarantee the Company provided for its subsidiaries was RMB 1.207 billion; (including the above guarantee amount for Xinhui CIMC Container Co., Ltd.), taking by 22.82% of net assets at the end of 2003 amounting to RMB 5.298 billion (4) According to the regulation of Document No. 56 of CSRC, in order to control financial risk in smaller scope, the Company has made amendment aiming at relevant guarantee terms of Articles of Association of the Company and formed relevant proposals which would be submitted to the annul meeting of the Board of Directors held in Mar. 2004 for discussion and approval. 7.8.2(2). Independent opinions We believe that the control of guarantee for external parties of the Company is better and the control of financial risk is steady. Although the above guarantee for external parties is need of business development, the proportion does not exceed the regulation, there exists no large risk and causes no damage for the interest of the Company’ s shareholders, especially the minority shareholders, the Company’ s guarantee for external parties in the future will continue to be conducted according to relevant regulations. 8.Report of the Supervisory Committee (Omitted) 9. Financial Report 9.1 Auditor’s Opinion KPMG Certified Public Accountants audited 2003 Financial Report of the Company, and issued unqualified Auditor’ s Report. 9.2 Balance Sheet (attached), Income Statement (attached), Cash Flow (attached) 18 Consolidated income statement for the year ended 31 December 2003 Note 2003 2002 RMB’000 RMB’000 Revenue 13,705,212 9,025,986 Cost of sales (11,921,559) (7,859,335) Gross profit 1,783,653 1,166,651 Other operating income 141,126 80,198 Distribution expenses (342,007) (229,580) Administrative expenses (496,964) (328,311) Other operating expenses (180,432) (176,010) Profit from operations 905,376 512,948 Net financing costs (25,293) (65,003) Income from associates 8,747 121,677 Profit before tax 888,830 569,622 Income tax expense (111,361) (58,669) Profit after tax 777,469 510,953 Minority interests (83,418) (87,660) Net profit for the year 694,051 423,293 ========= ========= Basic earnings per share (RMB Yuan) 1.33 0.83 === === Consolidated statement of recognised gains and losses for the year ended 31 December 2003 There are no gains or losses other than those recognised in the above consolidated income statement for the current and prior years. 19 Consolidated balance sheet for the year ended 31 December 2003 2003 2002 RMB’000 RMB’000 Assets Property, plant and equipment 2,248,866 1,482,419 Lease prepayments - non-current portion 251,434 187,189 Construction in progress 172,435 226,717 Timber concession rights 175,129 228,967 Intangible assets 9,243 14,824 Interests in associates 57,555 617,584 Investments in equity securities 274,260 292,359 Long-term receivables 45,005 86,621 Prepayment for investments 193,008 6,749 Deferred tax assets 20,205 19,897 Total non-current assets 3,447,140 3,163,326 -------------- -------------- Lease prepayments - current portion 9,572 7,216 Investments in equity securities 168,775 16,468 Properties under development 62,162 150,382 Completed properties for sale 61,074 72,027 Inventories 1,350,628 1,081,516 Trade and other receivables 4,452,401 3,201,022 Cash and cash equivalents 706,604 381,937 Total current assets 6,811,216 4,910,568 -------------- -------------- Total assets 10,258,356 8,073,894 ======== ======== 20 Consolidated balance sheet as at 31 December 2003 (continued) Note 2003 2002 RMB’000 RMB’000 Equity Share capital 25 630,302 510,302 Reserves 26 4,665,351 2,340,195 Total equity 5,295,653 2,850,497 -------------- -------------- Minority interests 659,804 617,625 -------------- -------------- Liabilities Interest-bearing bank loans 27 422,084 81,000 Total non-current liability 422,084 81,000 -------------- -------------- Interest-bearing bank loans 27 512,326 1,996,679 Non interest-bearing bank loan 28 29,670 - Trade and other payables 29 2,906,130 2,128,517 Provision 30 383,846 373,434 Taxation 9 48,843 26,142 Total current liabilities 3,880,815 4,524,772 -------------- -------------- Total liabilities 4,302,899 4,605,772 -------------- -------------- Total equity, minority interests and liabilities 10,258,356 8,073,894 ======== ======== 21 Consolidated cash flow statement for the year ended 31 December 2003 2003 2002 RMB’000 RMB’000 Net profit for the year 694,051 423,293 Depreciation 168,136 127,731 Impairment losses of property, plant and equipment 39,248 12,822 Net amortisation of goodwill/(negative goodwill) 18,956 16,503 Amortisation of other intangible assets 4,455 3,088 Amortisation of negative goodwill in an associate (255) (255) Loss on sale of property, plant and equipment and construction in progress 21,282 29,579 Interest income (19,007) (11,200) Interest expenses 45,406 64,580 (Gain)/loss on disposal of equity securities (7,990) 12,079 Impairment losses of unlisted equity securities 21,805 - Amortisation of timber concession rights 7,967 6,410 Impairment losses of timber concession rights 45,871 34,996 Dividend income (8,705) (2,432) Income from associates (8,747) (121,677) Income tax expenses 111,361 58,669 Minority interests 83,418 87,660 Operating profit before changes in working capital 1,217,252 741,846 Increase in lease prepayments (61,255) (32,827) Decrease in long-term receivables 41,616 66,960 Increase in trade and other receivables (951,811) (2,111,612) Increase in inventories (184,745) (363,612) Increase in trade and other payables 533,745 977,409 Increase in provision 10,412 76,952 Decrease/ (increase) in properties under development 88,270 (44,511) Decrease in completed properties for sale 10,953 66,515 Cash generated from/(used in) operations 704,437 (622,880) PRC income tax paid (89,315) (54,755) Cash flows from operating activities 615,122 (677,635) -------------- -------------- 22 Consolidated cash flow statement for the year ended 31 December 2003 (continued) Note 2003 2002 RMB’000 RMB’000 Investing activities Interest received 15,590 11,200 Payment for property, plant and equipment (70,674) (32,883) Payment for construction in progress (767,783) (268,225) Payment for acquisition of equity securities (300,948) (71,161) Payment for acquisition of associates (13,500) - Prepayment for investments (186,259) (6,749) Payment for acquisition of minority shareholdings (102,425) (5,401) Loan to an associate (13,500) - Repayment of loan to an associate 108,697 278,708 Payment for acquisition of subsidiaries, net of cash acquired 4 (76,857) - Dividend received 16,878 2,432 Proceeds from sales of property, plant and equipment and construction in progress 14,972 14,344 Proceeds from dissolution of an associate 477,592 - Proceeds from disposal of partial interest in subsidiary 5,982 - Proceeds from sales of equity securities 156,899 83,949 Repayment of advances to minority shareholders 14,460 - Advance to minority shareholders (8,000) (14,047) Cash flows from investing activities (728,876) (7,833) -------------- -------------- 23 Consolidated cash flow statement for the year ended 31 December 2003 (continued) Note 2003 2002 RMB’000 RMB’000 Financing activities Interest paid (55,338) (69,080) Proceeds from bank loans 33 12,210,004 6,487,139 Repayment of bank loans 33 (13,437,263) (5,886,397) Proceeds from Receivables Framework Agreement 23 55,943 313,790 Net proceeds from issuance of shares 25 & 26 1,751,105 - Capital injection from minority shareholders 22,432 46,700 Dividends paid 10 - (170,101) Dividends paid to minority shareholders (108,462) (46,024) Cash flows from financing activities 438,421 676,027 -------------- -------------- Net increase/(decrease) in cash and cash equivalents 324,667 (9,441) Cash and cash equivalents at 1 January 381,937 391,378 Cash and cash equivalents at 31 December 24 706,604 381,937 ======== ======== 9.3 There occurred change in settlement method of guarantee reserve fund compared with the latest annual report. □ Applicable √ Non-applicable 9.4 Explanation of change of consolidation scope in the report period compared with the latest annual report. In the report year, the subsidiaries brought into the consolidation scope are as following: 24 Name Date of foundation Registered capital Equity held Main Business Type (USD) Xinhui CIMC Special Transportation ２００３．１．２０ ３，０００，０００．００ １００％ Manufacture of Limited Company Equipment Manufacture Co., Ltd. containers Manson Technology Limited －－－ １０，０００．００ １００％ Investment holding Limited Company CHUANG JIA Co., Ltd. ２００３．３．２５ ２．００ １００％ Investment holding Limited Company Nantong CIMC Tank Equipment Co., ２００３．８．１４ ２，１００，０００．００ ６６．９０％ Manufacture of Limited Company Ltd. containers Shanghai CIMC Baowell Industries Co., １９９３．４．９ ２８，５００，０００．００ ４７．３７％ Manufacture of Limited Company Ltd. containers ＣＩＭＣ ＵＳＡ，ＩＮＣ． １０．００ １００％ Limited Company ２００２．１１．１５ Ｖａｎｇｕａｒｄ Ｎａｔｉｏｎａｌ Ｔｒａｉｌｅｒ ２００３．０４．１２ １０．００ １００％ Manufacture of Limited Company Ｃｏｒｐｏｒａｔｉｏｎ containers 25