冰山冷热(000530)大冷Ｂ2004年年度报告摘要（英文版）

Stock Code: 000530; 200530 Short Form of the Stock: Daleng Gufen; Daleng B; No: 2005-001 Dalian Refrigeration Co., Ltd. 2004 Annual Report Summary (For Disclosing Overseas) §1 Important Notes 1.1 The Board of Directors of Dalian Refrigeration Co., Ltd. (hereinafter referred to as the Company) and its directors hereby confirm that there are no any important omissions, fictitious statements or serious misleading carried in this report, and shall take all responsibilities, individual and/or joint, for the reality, accuracy and completeness of the whole contents. 1.2 All directors attend the meeting of the Board of Directors. 1.3 This summary is extracted from the original of the annual report. For more information, the investors are recommended to refer to the original. 1.4 This report is written respectively in Chinese and in English. In the event of any discrepancy between the two above-mentioned versions, the Chinese version shall prevail. 1.5 Chairman of the Board of Directors of the Company Mr. Zhang He, Financial Majordomo and the head of Accounting Department Ms. Xu Xiaorui hereby confirm that the financial report of the annual report is true and complete. §2 Company Profile 2.1 Basic information Short form of the stock DALENG GUFEN; DALENG-B Stock code 000530; 200530 Listed stock exchange Shenzhen Stock Exchange Registered address and office address 888 Xinan Road, Shahekou District, Dalian Post code 116033 Internet web site of the Company www.daleng.cn E-mail of the Company dlzqb@bingshan.com 2.2 Contact person and method Secretary of the Board of Directors Authorized representative in charge of securities affairs Name Ms. Lv Lianzhen Ms. Ge Yan Contact address Office of Dalian Refrigeration Co., Securities Department of Dalian Ltd. Refrigeration Co., Ltd. Telephone 0086-411-86538100 0086-411-86538131 Fax 0086-411-86641470 0086-411-86654530 E-mail bingzhen@bingshan.com geyan@bingshan.com §3 Summary of Accounting Data and Financial Indexes 3.1 Major accounting data (Unit: In RMB’000) 1 Increase/decrea 2004 2003 se over last 2002 year(%) Revenue 1,258,411 1,068,564 17.77% 976,884 Profit before taxation and 144,820 116,453 24.36% 97,511 minority interests Net profit 108,764 86,634 25.54% 70,524 Increase/decrea 2004.12.31 2003.12.31. se over last 2002.12.31 year(%) Total assets 1,935,420 1,925,066 0.54% 1,880,642 Shareholder’ s equity(excluding 1,320,646 1,246,193 5.97% 1,194,492 minority interests) Net cash generated from 28,631 119,312 -76.00% 91,166 operating activities 3.2 Major financial indexes (Unit: In RMB) Increase/decrea 2004 2003 se over last 2002 year(%) Earnings per share 0.31 0.25 24% 0.20 Increase 1.29 Return on equity 8.24% 6.95% percentage 5.90% points Net cash per share generated from 0.08 0.34 -76.47% 0.26 operating activities Increase/decrea 2004.12.31 2003.12.31 se over last 2002.12.31 year(%) Net assets per share 3.77 3.56 5.90% 3.41 3.3 Difference in net profit as audited by Chinese Accounting Standards (CAS) and International Financial Reporting Standards (IFRS) (Unit: In RMB’000) √Applicable □Inapplicable CAS IFRS Net profit 100,955 108,764 Explanation on the difference Impact of IFRS adjustment on net profit is as follows: - Accounting for installation service contract 9,526 - Deferred taxation 1,597 - Equity accounting of investments (3,953) - Waived liabilities to third parties in capital surplus in statutory account 202 - Others 436 2 §4 Changes in Share Capital and Particulars about Shareholders 4.1 Statement of changes in share Unit: share Before the Increase/decrease in this After the change change time(+, -) I. Shares unlisted 1、Initiator shares 104,422,500 1,944,250 106,366,750 Including： State-owned shares 104,422,500 1,944,250 106,366,750 Domestic legal person’ s shares Foreign legal person’ s shares Others 2、Raised legal person’ s shares 32,222,250 -1,944,250 30,278,000 3、Inner employee’ s shares 4、Preference shares or others Total of shares unlisted II. Shares listed 136,644,750 136,644,750 1、Common shares (in RMB yuan) 2、Domestically listed foreign shares 98,370,225 98,370,225 3、Others 115,000,000 115,000,000 Total of shares listed 213,370,225 213,370,225 III. Total shares 350,014,975 350,014,975 4.2 Statement of shares held by the top ten shareholders Total shareholders at the end of report year 66,203 Particulars about shares held by the top ten shareholders（Unit: ’0000 shares） Increase/de Holding Proportion Type of Number Nature of crease in shares at to total shares of shares shareholders Full name of shareholders the report the shares（％） pledged year year-end or frozen 194.425 10,636.675 30.39 Non-circul State-owned Dalian Binshan Group Co., Ltd. ating A 0 shareholder shares 0 3,500.15 10.00 Circulating Foreign Sanyo Electric Co., Ltd. 0 B shares shareholder 0 315.00 0.90 Non-circul Jilin Jiuzhou Development Co. ating A 0 shares 0 315.00 0.90 Non-circul Taiyuan Zhaohe Investment Development ating A 0 Co. shares 3 0 283.70 0.81 Non-circul Shenyin Wanguo Securities Co., Ltd. ating A 0 shares 0 179.50 0.51 Non-circul Dalian Huaxin Trust Investment Co., Ltd. ating A 0 shares 0 175.00 0.50 Non-circul Dalian Thermal Power Co., Ltd. ating A 0 shares 0 162.225 0.46 Non-circul Dalian Marine Diesel Works ating A 0 shares 162.225 162.225 0.46 Non-circul Dalian Industrial Development & ating A 0 Investment Co. shares 0 157.50 0.45 Non-circul Huaxia Securities Co., Ltd. ating A 0 shares Particulars about shares held by the top ten negotiable shareholders（Unit: ’0000 shares） Holding negotiable shares at the Name of shareholders Type of shares year-end Sanyo Electric Co., Ltd. 3,500.15 Circulating B shares Chaohuang Investment Co., Ltd. 97.00 Circulating B shares Huabao Industrial Multi-strategy Growth Securities 71.5634 Circulating A shares Investment Fund Huang Shuxian 70.00 Circulating B shares Shanghai Hong Kong Wanguo Securities Co., Ltd. 68.777 Circulating B shares Fang Yijun 62.398 Circulating B shares Kingsway Financial Services Group Limited 40.00 Circulating B shares Lin Lejian 38.6823 Circulating A shares Xian Guanchang 38.00 Circulating B shares Xian Xiaojing 38.00 Circulating B shares 4 Explanation on associated relationship among these There was no associated relationship between the top ten shareholders shareholders of the Company. It is unknown whether there are associated relations between the top ten negotiable shareholders of the Company and between them and the top shareholders of the Company. 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 √Inapplicable 4.3.2 Introduction of especial situation for controlling shareholder and other actual controller Dalian Bingshan Group Co., Ltd. (hereinafter referred to as the Group) held 30.39% of the total shares of the Company by the end of the year. The Group’ s legal representative is Zhang He. The Group was established on May 22, 1996 and has the registered capital of 126,540 thousand yuan, being mainly engaged in the manufacture and installation of the complete sets of refrigerators, air conditioners, cold chains and electrical appliances, etc. for industrial and commercial poposes. Its minor businesses include the electronic and household electrical appliances, light industry, chemical industry, import and export trading, etc. The Group is a state-owned solely-funded company subordinate to Dalian Municipal People’s Government State-Owned Assets Supervision & Administration Commission. Dalian Municipal People’s Government State-Owned Assets Supervision & Administration Commission ↓100% Dalian Bingshan Group Co., Ltd. ↓30.39% Dalian Refrigeration Co., Ltd. §5 Particulars about the Directors, Supervisors and Senior Staff Members 5.1 Particulars about changes in shares held by directors, supervisors and senior staff members 5 Holding Holding Term of shares at shares at Reason of Name Title Sex Age duty the the change year-begin year-end Directors (9 persons) Chairman of Zhang He Male 67 04.6—07.6 25,650 25,650 No change the Board Mu Vice chairman Male 55 04.6—07.6 22,650 22,650 No change Chuanjiang of the Board Yang Bin Director Male 48 04.6—07.6 0 0 No change Xu Director Female 41 04.6—07.6 3,000 3,000 No change Xiaorui Shimada Director Male 60 04.6—07.6 0 0 No change Tadao Chen Director M ale 37 04.6—07.6 0 0 No change Geng Lv Independent Male 63 04.6—07.6 7,125 7,125 No change Zhongli director Wang Independent Male 68 04.6—07.6 0 0 No change Dong director Zhang Independent Male 64 04.6—07.6 0 0 No change Guile director Supervisor (3 persons) Yu Fuchun Chairman Male 46 04.6—07.6 7,800 7,800 No change Men Supervisor Male 52 04.6—07.6 750 750 No change Yuesheng Chi Feng Supervisor Female 33 04.6—07.6 0 0 No change 6 Senior Staff Members General Zhang He Male 67 04.6—07.6 25,650 25,650 No change Manager Standing Deputy Yang Bin Male 48 04.6-07.6 0 0 No change General Manager Deputy Zhang General Male 46 04.6-07.6 21,125 21,125 No change Hongzhi Manager Deputy Wang General Male 53 04.6—07.6 14,250 14,250 No change Dekun Manager Deputy Wang General Male 43 04.6—07.6 0 0 No change Zhiqiang Manager Deputy Hu Xitang General Male 37 04.6—07.6 0 0 No change Manager Xu Financial Female 41 04.6—07.6 3,000 3,000 No change Xiaorui Majordomo 5.2 Particulars about directors and supervisors holding the position in Shareholding Company √Applicable □Inapplicable Title in Drawing the payment Name of Shareholding Name Shareholding Term of duty from the Shareholding Company Company Company (Yes/No) Dalian Binshan Group Chairman of the From 1999 to Yes Zhang He Co., Ltd. Board now Mu Dalian Binshan Group General From 2003 to Yes Chuanjiang Co., Ltd. Manager now 5.3 Particulars about the annual remuneration of directors, supervisors and senior staff members 7 Total annual remuneration RMB1,180,000 Total annual remuneration of the top three RMB 390,000 directors drawing the highest remuneration Total annual remuneration of the top three senior staff members drawing the highest RMB 390,000 remuneration Allowance of independent director RMB 25,000 Other treatment of independent director No Name of directors and supervisors receiving no Chen Geng, Shimada Tadao payment or allowance from the Company Payment Number of person RMB 120,000—RMB 140,000 2 RMB 100,000—RMB 120,000 5 RMB 80,000—RMB 100,000 2 RMB 40,000—RMB 80,000 3 Bellow RMB 40,000 1 §6 Report of the Board of Directors 6.1 Discussion and analysis of the whole operation in the report period ① The main business In 2004, undergoing the adverse situation that the state made the macro adjustment and control, the raw material prices rose rapidly and the market competitions were increasingly intensive, the Company took the initiative and raised the idea of “calmly analyzing and taking active countermeasures to ensure the market share”. The following performances were made: the incomes on main business of 1,258,411 thousand yuan, with a comparable increase of 17.77%; the total amount of profit of 144,820 thousand yuan, with a comparable increase of 24.36%; and the net profit of 108,764 thousand yuan, with a comparable increase of 25.54%. For the breakdown of the incomes on main business listed on the basis of industries and geographic distribution, see the Explanatory Note 1 to the Accounting Report. In the report period, the Company contracted 12 package projects over five million yuan, including five large package projects over ten million yuan and two super large package projects over 20 million yuan. 8 In the report period, the Company completed development of more than 20 new products including the optimized design of the centrifugal type water chiller, the semi-hermitic screw water chiller and the screw compressor special for petrochemical industry. Two new products, i. e. the CJZS812.5CDW marine ultra low-temperature refrigeration compressor and the modular ice-water unit, won the Science & Technology Prize of China machine-building industry for the year 2004. In the report period, the Company was honorably listed among the top ten advanced informatized enterprises in Dalian. The ERP has gone into operation in the whole Company. The Company’s major functional departments, including the accounting ledger system, the purchasing system, the inventory system, the sales system and the product delivery and production organization system, are integrated and operated in the Intranet, attaining the dynamic administration on Bingshan website and the online office automation in the whole Company. In the report period, the chairman Zhang He, as one in the first group in China, was honorably awarded the senior professional manager qualification certificate by China Enterprise Directors Association. In the report period, the Company made full use of the advantage of Bingshan Group as a whole and took active attempt to the Group-based gang purchase. In November, the first Group-based gang purchase of copper pipes was successful with the purchase amount more than 50 million yuan and saved cost more than one million yuan. In the report period, through mobilization among all employees and all-around cost reduction, the negative influence of rapid price rise of raw materials such as steel and iron was offset somewhat. The three expenses totaled 144.26 million yuan, with a comparable decrease of 12.17 million yuan. Of these expenses, the distribution costs decreased by 2.62 million yuan, the administrative expenses decreased by 3.75 million yuan, and the finance costs decreased by 5.8 million yuan, The expenses were well controlled. ② The group of joint ventures By the end of 2004, the group of joint venture companies of the Company had the total assets of 3,309.17 million yuan, with a comparable increase of 14.24%; and had the net assets of 1,630.77 million yuan, with a comparable increase of 9.09%. In 2004, the group of joint venture companies of the Company made the sales income of 3,531.71 million yuan, with a comparable increase of 27.63%. The sales income on exported products was 695.42 million yuan, with a comparable increase of 85.69%. The Company earned the returns on investment of 10,547 thousand yuan, with a comparable increase of 19.80%. In the report period, there were five joint venture companies that made the returns on investment accounting for 10% or higher of the total net profit of the Company and they are Sanyo Compressor Co., Ltd., Sanyo Air Conditioner Co., Ltd., Sanyo Cold Chain Co., Ltd., Sanyo Refrigeration Co., Ltd., and Thermo King-Dalian Transport Refrigeration Co., Ltd. In the report period, six joint venture companies of the Company made the sales income on main business with a comparable increase higher than 30%, four made the net profit with a comparable increase higher than 30%, and six made the net asset income ratio higher than 15%. Among these companies, three made the sales income on main business over 500 million yuan and four made the net profit over 50 million yuan. In the report period, Sanyo Compressor won the honor of “the first customer -satisfactory brand of compressor in quality in Chinese compressor market”in the First Satisfaction Inquiry on Product 9 Quality in Chinese Market held by People’s Daily Information Center. The company successfully passed the supplier qualification examination of American YORK. The construction work of the R & D Center having the floor space of more than 12,000 m2 was commenced in October. After the construction is completed, it will be the highest-grade overseas R & D center for Sanyo Electric Co., Ltd. In the report period, Sanyo Cold Chain Co., Ltd. has successfully gone into cooperation with Chinese retailer giants such as Shanghai Agriculture, Industry & Commerce Group and Dashang Group. The company has formed the strategic partnership with Carrefour, winning 60% of its annual order. Showing a strong going-up trend in catering market, the company further kept near 100% of the share from KFC and Dicos . By establishing the R & D system, the Chinese part and the Japanese part jointly developed the series products of low-temperature medical apparatus and cold-storage cases, which further promoted its flagship position in the industry. In the report period, Sanyo Air Conditioner Co., Ltd. developed the new series of eco-friendly refrigerant products and started the substitution for eco-friendly refrigerants as the first one in China. The enthalpy difference lab for the triple split system passed all appraisements by Japan Refrigeration and Air Conditioning Industry Association (JRAIA), laying a solid foundation for mass export of air conditioners. The company has successfully put the commercial and home air conditioners into Japan, Central and North America, Middle East, Europe, West Asia and other regions. In the report period, Sanyo Refrigeration Co., Ltd. honorably won the “ Recognition Award for China Environmental Labeling” from the State Environment Protection Administration of PR China. The GHP gas-combustion heat pump has gone through trial production and put into normal production. The company successfully passed the ASME field certification and examination, being qualified to go into the international market. 6.2 Statement of core business classified according to industry or product (Unit: RMB’0000) Increase/decr Increase/decr Increase/decr ease of ease of gross Classified ease of cost revenue profit margin according to Gross profit compared Revenue Cost compared compared industry or ratio with the with the with the product previous year previous year previous year (%) (%) (%) Decrease 2.5 Refrigeration 125,841.00 108,262.00 13.97% 17.77% 21.30% percentage equipment points Including: Decrease amount of 2.84 13,752.00 11,770.00 14.41% 105.07% 112.12% related percentage transaction points Rule of pricing Complete price of market of related 10 transaction Explanation of necessity and duration of Normal transaction related transaction 6.3 Particulars about core business classified according to area (Unit: RMB’0000) Increase/decrease of revenue compared with the Area Revenue previous year（％） Northeast 125,841.00 17.77% China area 6.4 Particulars about the customers of purchase and sales (Unit: RMB’0000) Total amount of purchase of the Proportion to the total 34.66% 32,586 top five suppliers amount of purchase Total amount of sales of the top Proportion to the total 9.29% 11,308 five sales customers amount of sales 6.5 Operation of share-holding companies (applicable to the situation of investment equity’s taking over 10% of net profit) (Unit: RMB’0000) √Applicable □Inapplicable Name of share-holding company Dalian Sanyo Compressor Co., Ltd. Returns on investment in the report Proportion to the net 2,272.00 22.50% year profit of the Company Business scope Producing and selling semi-hermetic compressors and scroll compressors Share-holding company Net profit 6,175.00 Name of share-holding company Dalian Sanyo Air Conditioner Co., Ltd. Returns on investment in the report Proportion to the net 2,225.00 22.04% year profit of the Company Business scope Producing and selling air conditioners Share-holding company Net profit 5,963.00 11 Name of share-holding company Dalian Sanyo Cold-chain Co., Ltd. Returns on investment in the report Proportion to the net 1,975.00 19.65% year profit of the Company Business scope Producing and selling refrigerators for supermarkets Share-holding company Net profit 5,356.00 Name of share-holding company Dalian Sanyo Refrigeration Co., Ltd. Returns on investment in the report Proportion to the net 1,560.00 15.45% year profit of the Company Business scope Producing and selling lithium bromide refrigerators Share-holding company Net profit 4,109.00 Name of share-holding company Thermo King-Dalian Transport Refrigeration Co., Ltd. Returns on investment in the report Proportion to the net 1,273.00 12.61% year profit of the Company Business scope Producing and selling cold storage vehicles Share-holding company Net profit 5,417.00 6.6 Explanation of reason of material change of core business and its structure □Applic able √Inapplicable 6.7 Explanation of reason of material change of profitability capability of core business (gross profit ratio) compared with the previous year □Applicable √Inapplicable 6.8 Analysis of reason of material change of operating results and profit structure compared with the previous year □Applicable √Inapplicable Analysis of reason of material change of the whole financial position compared with the previous year □Applicable √Inapplicable 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 √Inapplicable 6.10 Completion of the profit estimation 12 □Applicable √Inapplicable 6.11 Completion of the business plan (Unit: RMB’0000) √Applicable □Inapplicable Business targets Results of operations Sales income 120,000 125,841 Total amount of profit 12,000 14,482 Explanation of the difference Through hard working, the Company has satisfactorily attained these business targets. 6.12 Application of the raised proceeds (Unit: RMB’0000) √Applicable □Inapplicable Total amount of raised proceeds that 4,630.62 were used in the report year Total amount of raised 36,000 proceeds Total amount of raised proceeds that 33,345.56 have been used Changed Amount Amount really Amount of Tallied with the Projects committed project committed used earnings plan (Yes/No) (Yes/No) The expansion project of Dalian Sanyo 15,525.56 No 15,525.56 1,700.05 No Compressor Co., Ltd. Explanations of failure It was originally planned to make one-off investment to the expansion project of Dalian to attain the schedule Sanyo Compressor Co., Ltd. but delayed investment addition by the foreign partner to and the income target the joint venture caused the project delayed. Particulars about the change projects □Applicable √Inapplicable 6.13 Application of the proceeds not raised through share offering(Unit: RMB’0000) √Applicable □Inapplicable Earning of Name of project Amount of project Progress of project project Dalian Fuji-Bingshan Vending Machine Co., 2,300 Started business None Ltd. 13 Dalian Jiale Vending Machine Sales Co., Ltd. 1,875 Started business None Acquired 30% of the shareholding of Wuhan 879 Finished Yes New World Refrigeration Industry Co., Ltd. Acquired 40% of the shareholding of Shenyang 395 Finished Yes Sanyo Air Conditioner Co., Ltd. 6.14 Explanation of the “Non-standardized Opinion”of Certified Public Accountants by the Board of Directors □Applicable √Inapplicable 6.15 Business plan as of the new year of the Board of Directors √Applicable □Inapplicable The Company’s business targets for the year 2005 are as follows: Sales income: 1,500 million yuan Total amount of profit: 140 million yuan (1) Clearly identifying and keeping updated information about the orientation of the state’s policies for macro adjustment and control and the market trend, and paying close attention to the two markets. Making full use of the Company’s advantage in three series of products, i. e. refrigeration/cold storage, two-storage package and air conditioner package. Putting more efforts to sustainable markets such as food industry, petrochemical industry and energy industry. Accelerating formation of nationwide joint ventures to bring about selling, service and package installing in local areas. (2) Based on adjustment of the product mix, promoting new product development, technical transformation and cooperation through joint ventures and cooperative operation to build up the Company’s core competence. Attaching importance to the key technical transformation projects, including the new product development of CO2 & ammonia combined chiller unit and precise air conditioners for computer room, the reconstruction of the product lab, the import of the horizontal machining center, as well as the capital increase projects for Sanyo Compressor and Sanyo Cold Chain. (3) Bringing up innovations in business management to improve the economic operation quality. Paying more attention to cost reduction and applying the Group-based gang purchase for important materials. Making much of increase of the receivables and keeping them within limits. Highlighting the product quality and the quality of purchased materials. Further improving the ERP informatized management. (4) With combination of the ideological and political work and the production and operation, building up the “responsibility sense, crisis sense and urgency sense”and improving the leaders’ ability to command the market and accomplish their own jobs. Profit estimation of the new report year □Applicable √Inapplicable 6.16 The preplan of the profit distribution and capitalization of capital public reserve of the Board of Directors As audited by Dalian Hualian Certified Public Accountants, the after-tax profit of the Company in 2004 was 100.955 million yuan. In accordance with the relevant regulations of the state and the 14 Articles of Association of the Company, 10% of the after-tax profit, i. e. 9.985 million yuan, shall be set aside as the legal surplus public reserve, another 10%, i. e. 9.985 million yuan, as legal public welfare fund and 1.561 million yuan as the consolidated reserves for the subsidiary companies. A total of 21.531 million yuan was drawn. With the undistributed profit of 102.845 million yuan carried forward from the previous year, the profit available for distribution to shareholders is 182.269 million yuan. As audited by Price WaterHouseCoopers Zhongtian Certified Public Accountants, the after-tax profit of the Company in 2004 was 108.764 million yuan. With the remaining after-tax profit after drawing legal surplus public reserve, legal public welfare fund, consolidated reserves for the subsidiary companies plus the undistributed profit of 67.387 million yuan carried forward from the previous year, the profit available for distribution to shareholders is 152.124 million yuan. In accordance with the Articles of Association of the Company and relevant regulations, the lower of the aforesaid distributable profits shall be distributed. Therefore, the profit available for distribution to the shareholders for this year is 152.124 million yuan, 10% of which, i. e. 9.985 million yuan, will be drawn as the optional surplus public reserve, and 35.001 million yuan for payment of the dividends. The balance of 107.138 million yuan will be carried forward to the next year for distribution. The profit distribution preplan of the Company for 2004: With 350,014,975 shares in total by the end of 2004, cash dividend of one yuan (including tax) for each ten shares will be paid. The cash dividends for B-shares will be converted into HK$ for payment. No capital public reserve is to be converted into additional shares in this year. This preplan should be presented to and reviewed and adopted at the 2004 shareholder general meeting. §7 Significant Events 7.1 Purchase of assets □Applicable √Inapplicable 7.2 Sales of assets □Applicable √Inapplicable 7.3 Important guarantee □Applicable √Inapplicable 7.4 Important matters concerning associated transactions 7.4.1 associated transactions taking place in purchase of goods √Applicable □Inapplicable purchasing auxiliary products for selling auxiliary spare parts to package projects from associate associate parties parties Associated party Proportion to the Proportion to the Amount similar amount similar transactions transactions Dalian Sanyo Cold-Chain Co., 56.00 0.05% 18,199.00 19.36% Ltd. Dalian Sanyo Compressor 4,103.00 3.37% 4,452.00 4.74% Co., Ltd. Total 4,159.00 3.42% 22,651.00 24.10% 15 7.4.2 associated debts and claims □Applicable √Inapplicable 7.5 Entrusted financing □Applicable √Inapplicable 7.6 Implementation of projects committed □Applicable √Inapplicable 7.7 Significant lawsuit and arbitration □Applicable √Inapplicable 7.8 Particulars about the performance of obligations of Independent Directors Now the Company has three independent directors. These independent directors duly attended the meetings of the Board of Directors of the Company and actively presented their independent opinions, well performing their duties and protecting the legal rights and interests of minor shareholders of the Company. §8 Report of the Supervisory Committee The Supervisory Committee considered that the Company operated according to laws and there existed no problems in terms of the financial status, use of raised capital, purchase and sales of assets and related transactions of the Company. §9 Financial Report 9.1 Auditor’s Report: The financial report has been audited by Price WaterHouseCoopers Zhongtian Certified Public Accountants who has presented unqualif ied opinion audit report. 9.2 Accounting statement (attached hereunder) 9.3 Explanation on change of consolidation scope in the report period compared with the latest annual report In May 2004, Dalian Economic & Technical Development Zone Bingshan Trading Co. and Dalian Economic & Technical Development Zone Daleng Trading Co. were written off. The consolidated accounting statements for the current year excluded these two companies. In November 2004, by investing RMB 1.53 million yuan accounting 51% of the registered capital, Dalian Bingshan Group Sales Co., Ltd. together with two natural individuals, Kong Wei and Zhou Yafen, established Ningbo Bingshan Refrigeration and Air-Conditioning Engineering Co., Ltd. The consolidated accounting statements for the current year were worked out. Dalian Bingshan Group Sales Co., Ltd. that joined in Dalian Refrigeration Co., Ltd. this year worked out the consolidated accounting statements. Board of Directors of Dalian Refrigeration Co., Ltd. April 21,2005 16 DALIAN REFRIGERATION COMPANY LIMITED CONSOLIDATED INCOME STATEMENT FOR THE YEAR ENDED 31 DECEMBER 2004 (All amounts in Renminbi (“RMB”) thousands, except for earnings per share) Year ended 31 December Notes 2004 2003 Sales, net 1,22(c) 1,258,411 1,068,564 Cost of sales 22(c) (1,082,621) (892,527) Gross profit 175,790 176,037 Distribution costs (52,523) (55,146) Administrative expenses (92,035) (95,783) Other income, net 2 7,164 6,218 Profit from operations 38,396 31,326 Finance costs, net 3 297 (5,501) Share of profit of associates and joint ventures 105,474 88,042 before tax Dividend income from available-for-sale 653 2,586 investments Profit before tax and minority interests 4 144,820 116,453 Income tax expense 5 (32,936) (28,072) Profit before minority interests 111,884 88,381 Minority interests 17 (3,120) (1,747) Net profit 108,764 86,634 Earnings per share - Basic 6 RMB 0.31 RMB 0.25 - Diluted Not applicable Not applicable The accompanying accounting policies and notes form an integral part of these consolidated financial statements. 17 DALIAN REFRIGERATION COMPANY LIMITED CONSOLIDATED BALANCE SHEET AS OF 31 DECEMBER 2004 (All amounts in RMB thousands) As of 31 December Notes 2004 2003 ASSETS Non-current assets Leasehold land 7 39,869 40,274 Property, plant and equipment 8 293,752 293,329 Investments in associates and joint ventures 9 695,964 580,946 Available-for-sale investments 10 41,133 41,301 1,070,718 955,850 Current assets Inventories 11 240,439 265,332 Gross amount due from customers for 12 46,401 50,259 contract work Divedends receivable 9,262 9,724 Prepayments and other current assets 25,902 30,860 Due from related parties 22(d) 9,845 18,212 Trade receivables 13 228,814 198,750 Cash and cash equivalents 21(b) 304,039 396,079 864,702 969,216 Total assets 1,935,420 1,925,066 18 DALIAN REFRIGERATION COMPANY LIMITED CONSOLIDATED BALANCE SHEET (CONTINUED) AS OF 31 DECEMBER 2004 (All amounts in RMB thousands) As of 31 December Notes 2004 2003 EQUITY AND LIABILITIES Equity Share capital 14 350,015 350,015 Reserves 15,16 970,631 896,178 1,320,646 1,246,193 Minority interests 17 35,621 30,992 LIABILITIES Non-current liabilities Long-term bank borrowings 20(b) 50,000 79,000 Deferred tax liabilities 5(iii) 12,667 14,264 62,667 93,264 Current liabilities Gross amount due to customers for contract 18 5,037 11,409 work Dividends payable 3,000 2,949 Due to related parties 22(d) 30,011 40,604 Trade and other payables 19 347,438 351,655 Short-term bank borrowings 20(a) 131,000 148,000 516,486 554,617 Total equity and liabilities 1,935,420 1,925,066 The accompanying accounting policies and notes form an integral part of these consolidated financial statements. 19 DALIAN REFRIGERATION COMPANY LIMITED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY FOR THE YEAR ENDED 31 DECEMBER 2004 (All amounts in RMB thousands) Reserves Statutory Statutory Discretionary Share Capital surplus public surplus reserve Unappro-pri Total capital reserve reserve fund welfare fund fund ated profits reserves Total equity (Note 13) (Note 14(a)) (Note 14(b)) (Note 14(c)) (Note 1 4(d)) (Note 15) Balance at 1 January 2003 350,015 557,152 99,605 62,120 38,496 87,104 844,477 1,194,492 Appropriations to discretionary surplus reserve fund relating to 2003 - - - - 8,843 (8,843) - - Dividends relating to 2003 - - - - - (35,001) (35,001) (35,001) Net p rofit for 2003 - - - - - 86,634 86,634 86,634 Appropriations to statutory reserves: - statutory surplus reserve fund - - 8,726 - - (8,726) - - - statutory public welfare fund - - - 8,723 - (8,723) - - Profit appropriations to statutory reserves by subsidiaries - - 1,472 1 - (1,473) - - Other(Note 15(a)) - 68 - - - - 68 68 Balance at 31 December 2003 350,015 557,220 109,803 70,844 47,339 110,972 896,178 1,246,193 Appropriations to discretionary surplus reserve fund relating to 2004 - - - - 8,584 (8,584) - - Dividends relating to 2004 - - - - - (35,001) (35,001) (35,001) Net p rofit for 2004 - - - - - 108,764 108,764 108,764 Profit appropriations to statutory reserves: - statutory surplus reserve fund - - 11,234 - - (11,234) - - - statutory public welfare fund - - - 11,232 - (11,232) - - Appropriations to statutory reserves by subsidiaries (Note 16(b)) - 1,561 - - (1,561) - - Other(Note 15(a)) - 690 - - - - 690 690 Balance at 31 December 2004 350,015 557,910 122,598 82,076 55,923 152,124 970,631 1,320,646 20 DALIAN REFRIGERATION COMPANY LIMITED CONSOLIDATED CASH FLOW STATEMENT FOR THE YEAR ENDED 31 DECEMBER 2004 (All amounts in RMB thousands) Year ended 31 December Notes 2004 2003 CASH FLOWS FROM OPERATING ACTIVITIES: Cash generated from operations 21(a) 43,911 128,338 Interest income received 1,777 2,999 Income tax paid (17,057) (12,025) Net cash generated from operating activities 28,631 119,312 CASH FLOWS FROM INVESTING ACTIVITIES: Increase in investments in associates and joint ventures (96,692) (45,185) Increase in available-for-sale investments - (1,755) Proceeds from transfer of shares in associates 6,285 - Proceeds from disposal of available-for-sale 168 - investments Purchase of leasehold land and property, plant and (28,894) (20,091) equipment Proceeds from disposals of property, plant and 2,142 246 equipment Dividends received from associates and joint 76,126 43,596 ventures Dividends received from available-for-sale 1,115 2,586 investments Net cash used in investing activities (39,750) (20,603) CASH FLOWS FROM FINANCING ACTIVITIES: Net decrease in short-term bank borrowings (46,000) (80,000) Interest expense paid (1,480) (8,500) Capital contributions from minority shareholders 3,516 2,342 Dividends paid (34,950) (41,287) Dividends paid to minority shareholders (2,007) (2,440) Net cash used in financing activities (80,921) (129,885) Net decrease in cash and cash equivalents (92,040) (31,176) Cash and cash equivalents at beginning of year 21(b) 396,079 427,255 Cash and cash equivalents at end of year 21(b) 304,039 396,079 The accompanying accounting policies and notes form an integral part of these consolidated financial statements. 21