小天鹅Ａ(000418)小天鹅Ｂ2004年年度报告摘要（英文版）

WUXI LITTLE SWAN COMPANY LIMITED SUMMARY OF ANNUAL REPORT 2004 §1. Important Notice 1.1 The Board of Directors of Wuxi Little Swan Company Limited (hereinafter refereed to as the Company) and all directors individually and collectively accept responsibility for the correctness, accuracy and completeness of the contents of this report and confirm that there are no material omissions nor errors which would render any statement misleading. The summary of annual report 2004 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 director stated that they couldn’t ensure the correctness, accuracy and completeness of the contents of the Annual Report 2004 or have objection for this report. 1.3 Name list of Director having not attended the meeting Name of Directors having not Reason Assignee’name attended the Board meeting Lv Wei Busy business Yang Jiaye Zhang Ai’min Busy business Yang Jiaye Gu Qun Busy business Li Shisheng 1.4 Shanghai Shu Lun Pan Certified Public Accountants and Horwath Certified Public Accountants (H.K.) Co., Ltd. issued the unqualified Auditors’Report for the Company respectively. 1.5 Mr. Li Shisheng, Chairman of the Board of the Company, and Mr. Bian Yanglin, Chief Financial Officer hereby confirm that the Financial Report of the Annual Report is true and complete. 1.6 This report was prepared in both Chinese and English. Should there be any difference in interpretation between the two versions, the Chinese version shall prevail. §2. Company Profile 2.1 Basic information Short form of the stock Little Swan A, Little Swan B Stock code 000418, 200418 Listed stock exchange Shenzhen Stock Exchange Registered address and office address Registered address: No.1 Hanjiang Road, National High-Tech Industrial Development Zone, Wuxi Office address: No. 67, Huiqian Road, Wuxi Jiangsu Post code Post code of registered address: 214028 Post code of office address: 214035 Internet web site of the Company http://www.lit tleswan.com E-mail of the Company info@littleswan.com.cn 2.2 Contact person and method Secretary of the Board of Directors Securities Affairs Representative Name Qiao li Guo Zuwei Contact address No. 67, Huiqian Road, Wuxi Jiangsu No. 67, Huiqian Road, Wuxi Jiangsu Telephone 0510-3704003-2192 0510-3704003-2022 Fax 0510-3720879 0510-3720879 E-mail qiaol@littleswan.com.cn securities@littleswan.com.cn §3. Summary of Accounting Data and Financial Indexes 3.1 Major accounting data Unit: RMB Increase/decrease over 2004 2003 2002 last year（％） Income from main operations 2,422,932,739.43 2,901,320,283.34 -16.49% 2,941,801,551.71 Total profit 48,578,464.57 62,235,110.63 -21.94% -636,968,930.75 Net profit 39,036,607.58 35,990,311.11 8.46% -564,803,384.45 Net profit after deducting 13,883,992.17 10,454,331.18 32.81% -565,957,245.61 non-recurring gains and losses Net cash flow arising from -179,327,253.79 191,451,894.82 -193.67% 86,553,355.26 operating activities Increase/decrease At the end of At the end of At the end of from the end of 2004 2003 2002 previous year（％） Total assets 3,117,214,816.88 3,079,063,440.49 1.24% 3,175,780,748.53 Shareholders’equity 1,141,820,628.36 1,106,830,465.42 3.16% 1,088,684,900.87 (excluding minority interests) 3.2 Major financial indexes Unit: RMB Increase/decrease 2004 2003 2002 over last year（％） Earnings per share 0.11 0.10 10.00% -1.55 Earnings per share (note) 0.11 - - - Return on equity 3.42% 3.25% 0.17% -51.88% Return on equity as calculated based on net profit 1.22% 0.94% 0.28% -51.99% after deducting non-recurring gains and looses Net cash flow per share arising from operating -0.49 0.52 -194.23% 0.24 activities Increase or At the At the At the decrease from the end of end of end of previous end of 2004 2003 2002 year（％） Net assets per share 3.13 3.03 3.30% 2.98 Net assets per share after adjustment 3.02 2.91 3.78% 2.85 Note: Earnings per share was calculated based on new share capital if share capital was changed from the end of the report period to disclosure date of the report. Items of non-recurring gains and losses v Applicable ? Inapplicable Items of non-recurring gains and losses Amount Gains/losses from disposal of long-term equity investment, fixed assets, 5,539,081.14 project in construction, intangible assets and other long-term assets Various government subsidies 10,314,095.29 Other non-operating income/expenses after deducting daily reserve for impairment losses of assets allotted by the Company based on -137,035.31 regulations of Accounting System for Business Enterprise Switching back various reserves for impairment losses allotted over the 10,145,916.20 previous years Impact on income tax -709,441.91 Total 25,152,615.41 3.3 Difference of net profit as audited by Chinese Accounting Standard (CAS) and International Accounting Standard (IAS) v Applicable ? Inapplicable Unit: RMB’000 CAS IAS Net profit 39,037.00 26,961.00 Difference in consolidation scope: 1889.00 Staff’s bounty and welfare funds : -2152.00 Unconfirmed investment losses -3508.00 Consolidating insolvent affiliated companies : -7387.00 Liquidation of affiliated companies: 15649.00 Explanation on the Investment difference occurred from difference increasing investment to affiliated companies: -878.00 Canceling of organization expenses: -6840.00 Minority interests -832.00 Writing off over-appropriate wages: -17031.00 Other 9014.00 §4. Change in Share Capital and Particulars about Shareholders 4.1 Statement of change in share Unit: share Before the change Increase / decrease in this year (+ / -) After the change Other Subtotal I. Unlisted shares 1. Sponsors’shares 109,622,592 0 0 109,622,592 Including: State-owned shares 101,628,864 -101,628,864 -101,628,864 0 Domestic legal person’ s 7,993,728 101,628,864 101,628,864 109,622,592 shares Foreign legal person’ s shares 0 0 0 0 Others 0 0 0 0 2. Raised legal person’ s shares 56,124,000 0 0 56,124,000 3. Inner employees’shares 0 0 0 0 4. Preference shares or others 0 0 0 0 Total unlisted shares 165,746,592 0 0 165,746,592 II. Listed shares 1. RMB ordinary shares 72,000,000 0 0 72,000,000 2. Domestically listed foreign 127,357,248 0 0 127,357,248 shares 3. Overseas listed foreign shares 0 0 0 0 4. Others 0 0 0 0 Total listed shares 199,357,248 0 0 199,357,248 III. Total shares 365,103,840 0 0 365,103,840 The amount of shares offered by funds, inner employees’shares traded in the counter, shares offered by strategic investor and shares offered ordinary juridical person should be disclosed respectively ? Applicable v Inapplicable 4.2 Statement of shares held by the top ten shareholders and the top ten shareholders of circulation share Total number of shareholders at the end of report year 61,990 Particulars about shares held by the top ten shareholders Number Nature of Increase / S hares held Type of shares of share shareholders decrease in at the Proportio Full name of Shareholders (Circulating/N pledged/ (State-owned the report year-end n (%) on-circulating) frozen shareholder/foreig year (share) (share) (share) n shareholder) Jiangsu Little Swan Group 0 0 101,628,864 27.84% Non-circulation Other Co., Ltd. Greater China Development 0 Other 0 26,014,349 7.13% Circulating Co., Ltd. Wuxi Industry Development 0 State-owned 0 16,496,640 4.52% Non-circulation Fund shareholder Wuxi City and Town 0 0 7,993,728 2.19% Non-circulation Other Industrial United Committee China Southern Securities 7,570,900 0 7,570,900 2.07% Non-circulation Other Co., Ltd. Xi’an Wanguo Real Estate 0 0 4,800,000 1.31% Non-circulation Other Development Co., Ltd. Shenyang Lianya Industrial 0 0 2,160,000 0.59% Non-circulation Other Development Co., Ltd. Chen Shaoming 606,959 1,643,159 0.45% Circulating 0 Other China Construction Bank 0 Dalian Trust Investment Co., 0 1,440,000 0.39% Non-circulation Other Ltd. Beijing Liancheng 0 Investment Consulting Co., 0 1,440,000 0.39% Non-circulation Other Ltd. Particulars about shares held by the top ten shareholders of circulation share Number of circulation shares held at the Type (A-share, B-share, H-share Name of shareholder (full name) and others) year-end GREATER CHINA DEVELOPMENT CO., 26,014,349 B-share LTD. CHEN SHAO MING 1,643,159 B-share HUANG YING HUI 1,015,900 B-share SHANGHAI (HK) WANGUO SECURITIES 567,386 B-share JIANG YUE HAU 488,100 B-share FANG WEN JING 390,000 B-share JIANG XU 390,000 B-share LI YU TIAN 388,000 B-share BEAR, STEARNS SECURITIES CORPORA 430,000 B-share TION WANG JUN GANG 376,900 B-share Explanation on associated relationship Among the top ten shareholders as listed above, there exists no associated among the top ten shareholders or consistent relationship or consistent action. action 4.3 Particulars about the controlling shareholders and actual controller of the Company 4.3.1 Particulars about change in the controlling shareholders and actual controller of the Company ? Applicable v Inapplicable 4.3.2 Introduction of especial situation for controlling shareholder and other actual controller The controlling shareholder of the Company is Jiangsu Little Swan Group Co., Ltd.: Legal representative: Mr. Zhu Dekun Date of foundation: Dec. 1995 Registered capital: RMB 387.9776 million Business scope: manufacture and sales of electrical home appliances; production of raw material, subsidiary material, equipment, parts and components; consultation of economy and financing, agenc y service, technical service of electrical home appliances. ② The actual controller of the Company is Mr. Yan Xiaoqun: Name: Yan Xiaoqun Nationality: the People’s Republic of China (obtained no other right of residence of other country or area) Particulars about his post over recent five year: CEO of Nanjing SVT Group 4.3.3 Property right and controlling relationship between the actual controller of the Company and the Company is as follows: Yan Xiaoqun Wuxi State-owned Assets Administration 80% Commission Xi’an Tongyou Technology Investment Co. 94% 17.78% Nanjing VST Group Co. 24.38% 57.84% Jiangsu Little Swan Group Co. 27.84% Wuxi Little Swan Co., Ltd. §5. Particulars About Director, Supervisor and Senior Executives 5.1 Directors, supervisors and senior executives Holding shares Holding Reason for Name Title Gender Age Office term at the shares at the change year-begin year-end Apr. 1, 005- Li Shisheng Chairman of the Board Male 51 0 0 Jul. 1, 2006 Apr. 1, 004- Gu Qun Vice Chairman of the Board Female 42 0 0 Jul. 1, 2006 Apr. 1, 004- Chai Xinjian General Manager Male 42 0 0 Jul. 1, 2006 Liang Jun. 1, 004- Director Male 49 0 0 Bingcong Jul. 1, 2006 Jul. 1, 2003- Li Guodong Director Male 57 0 0 Jul. 1, 2006 Peng Jul. 1, 2003- Director Male 48 0 0 Zhouhong Jul. 1, 2006 Jul. 1, 2003- Lv Wei Independent Director Male 42 0 0 Jul. 1, 2006 Jul. 1, 2003- Yang Jiaye Independent Director Male 69 0 0 Jul. 1, 2006 Jul. 1, 2003- Zhang Aimin Independent Director Male 40 0 0 Jul. 1, 2006 Chen Chairman of the Dec.1, 004- Female 60 0 0 Yanmeng Supervisory Committee Jul. 1, 2006 Zhang Jul. 1, 2003- Supervisor Male 59 24,000 24,000 Zhizheng Jul. 1, 2006 Jul. 1, 2003- Ma Jun Supervisor Male 34 0 0 Jul. 1, 2006 Secretary of the Board of Jul. 1, 2003- Qiao Li Male 45 0 0 Director Jul. 1, 2006 Jul. 1, 2003- Li Hong Deputy General Manager Male 42 0 0 Jul. 1, 2006 Jul. 1, 2003- Mao Zhiliang Deputy General Manager Male 48 0 0 Jul. 1, 2006 Sep. 1, 004- Bian Yanglin Chief Financial Officer Male 44 0 0 Jul. 1, 2006 5.2 Particulars about directors and supervisors holding the post in Shareholding Company v Applicable ? Inapplicable Drawing the payment Title in Shareholding from the Name Name of Shareholding Company Office term Company Shareholding Company (Yes / No) Jiangsu Little Swan Group Co., Chairman of the Board Sep. 1, 2003 to Li Shisheng and concurrently vice Yes Ltd. now President Jiangsu Little Swan Group Co., Sep. 1, 2003 to Gu Qun Vice-president No Ltd. now Jiangsu Little Swan Group Co., Jan. 1, 2003 to Chen Yanmeng President assistance No Ltd. now Jiangsu Little Swan Group Co., Chief director of Jun. 1, 2004 to Ma Jun No Ltd. trademark department now Wuxi Industry Developing Funds General Manager of Jun. 1, 1998 to Li Guodong Yes operation department now South Securities Co., Ltd. General Manager of Jan. 1, 1993 to Peng Zhouhong Yes Internal Auditing Dept. now 5.3 Particulars about the annual payment of directors, supervisors and senior executives Total annual payment RMB 4,020,000 Total annual payment of the top three directors RMB 2,160,000 drawing the highest payment Total annual payment of the top three senior RMB 1700,000 executives drawing the highest payment Allowance of independent director RMB 50,000 per person/year for independent director, while RMB 20,000 per person/ year for non-independent director Other treatment of independent directors The Company reimbursed the reasonable charges according to the actual situation, which independent directors attended the meeting of the Board, shareholders’ general meeting or exercise their functions and powers in accordance with Company Law. Name of directors and supervisors receiving Gu Qun and Chen Yanmeng no payment or allowance from the Company Payment Number of persons RMB 200,000 ～ RMB 500,000 6 RMB 500,000- RMB 900,0000 1 RMB 900,000- RMB 1,500,000 1 § 6. Report of the Board of Directors 6.1 Discussion and analysis to the whole operation in the report period The competition of overseas and domestic home electronic appliance was very keen in 2004; washing machine was especially obvious, unceasing price fight and jump-up of the raw material made the profit space of the Company smaller and smaller, internationalization of domestic market, some domestic washing machine enterprise endured unprecedented impact, operation environment getting more and more urgent. Under such difficult situations, and under right leading and direct help of the Board of Directors, the Company well- grasped the developing opportunity of international business, further strengthen internationalized cooperate pace, simultaneously opened up an own way for development within and without. In 2004, realized sales profit amounted to RMB 2,422,930,000, net profit amounted to RMB 39,036,600, export business eared foreign exchange amounting to USD 49,940,000, annually imported washing machine 600,000 pieces, increasing 42% comparing with the same time of the previous year, parent company exported 320,000 pieces, increasing by 36%, taking up one forth of annual output. Up to now, the company has founded long-term cooperation with 7 MNC, including General Motor Co. , and so on. In 2004, the trademark “Little Swan”was appraised one of the fast developing trademark within 10 years, the value of trademark reaching up RMB 7.632 billion, rising up RMB 0.8 billion comparing with 2003, and fulfilled the remove special treatment of the Company at the same time. 6.2 Statement of main operations classified according to industries or products Unit: RMB’0000 M ain operations classified according to industries Classified according to Income from Cost of main Gross Increase/decrease Increase/decrea Increase/decrease industries or products main operations profit in income from se in cost of in gross profit operations (RMB) ratio (%) main operations main operations ratio over the last operations (RMB) ratio (%) main operations main operations ratio over the last (RMB) over the last year over the last year (%) (%) year (%) Manufacture of daily 191,476.20 151,583.30 20.83% -25.00% -27.53% 15.28% electric appliances Manufacture of casting 14,902.65 14,557.71 2.31% -2.52% 28.79% -91.12% Other industries 35,914.42 29,943.61 16.63% 83.79% 83.67% 0.32% Including: related transactions M ain operations classified according to products Washing machine 162,828.89 128,425.70 21.13% -12.12% -12.80% 3.00% Electric engines 10,926.43 9,619.70 11.96% -20.85% -11.97% -42.62% Refrigerators 25,484.66 20,100.74 21.13% -4.47% -6.96% 11.10% Casting 14,902.65 14,557.71 2.31% -2.52% 28.79% -91.12% Air-conditioners 3,162.64 3,056.86 3.34% -90.75% -90.45% -47.55% Other 24,988.00 20,323.91 18.67% 444.11% 366.29% 266.57% Including: related transactions Pricing rules for The related transactions were confirmed as agreed prices, the same as the prices in non-related related transactions transactions, no higher or lower than the price in the normal transactions materially. The transactions were all settled by adopting irregular settlement with payment having no appended conditions. Necessity and durative The market and products were complemented mutually, increasing the competitive capability in the of related transactions market of the Company. Including: total amount of related transactions that the listed company sold products or provided labor service to the controlling shareholder and its subsidiaries was RMB 117,811,900 in the report period. 6.3 Particulars about main operations classified according to areas Unit: RMB’0000 Areas Income from main Increase/decrease in income from main operations (RMB) operations over the last year (%) Domestic 194,667.74 23.66% Overseas 47,625.53 35.56% 6.4 Particulars about the customers of purchase and sales Unit: RMB’0000 Total amount of purchase of Proportion in the total 67,577.03 34.11% the top five suppliers amount of purchase Total amount of sales of the Proportion in the total 39,638.34 16.36% top five sales customers amount of sales 6.5 Operation of share- holding companies v Applicable ? Inapplicable Unit: RMB’0000 Name of share-holding Boxiwei Household Appliance Co., Ltd. company Investment earnings contributed 3,629.36 Proportion in net profit 92.97% in the period of listed company Share-holding Business scope Engaged in the production and sales of washing machines, company drying machines, dishwashers and kitchen appliance electric appliance and its accessories and fittings represented by hearth appliance set, hearth set, disinfecting tanks. Net profit 9,073.41 6.6 Explanation on reasons of material changes in main operations and its structure ? Applicable v Inapplicable 6.7 Explanation on reasons of material changes in profitability capability of main operations (gross profit ratio) than that in the last year ? Applicable v Inapplicable 6.8 Analysis to reasons of material changes in operating results and profit structure compared with the previous year ? Applicable v Inapplicable Analysis to reasons of material changes in the whole financial position than that in the last year ? Applicable v Inapplicable 6.9 Explanation on the past, current and future important effects of the material changes in production and operation environment, macro-policies and regulations on the Company’ s financial position and operating results v Applicable ? Inapplicable In 2004, the State strengthened the control for the macroeconomy, export tax rebate rate was down, the total level of ex- factory price of industry products increased by 6.1% over the last year; the retail price of commodities increased by 2.8%; purchasing price of raw materials, fuel and power increased by 11.4%. In 2004, the competition in the industry of household electric appliance was much more intensified; the whole operation environment further worsened. Data indicated: comparing the price purchased by the enterprises of household electric appliance in Oct. 2004 with the year 2003, the price of steels increased by 70%, the price of plastic increased by 73.9%, the price of copper materials increased by RMB 1600 per ton. For the industry of washing machine, the pressure of cost increased obviously, thus, the Company’ s space of making profit was down and operation pressure and risk were sharpening. 6.10 Completion of the profit estimation ? Applicable v Inapplicable 6.11 Completion of the business plan ? Applicable v Inapplicable 6.12 Application of the raised proceeds ? Applicable v Inapplicable Particulars about the changed projects ? Applicable v Inapplicable 6.13 Application of the proceeds not raised through shares offering v Applicable ? Inapplicable Unit: RMB’0000 Name of projects Amount of Progress of projects Earnings of projects projects Wuxi Yidaixi Household 3,370.00 The Company has No earnings in the Appliances Co., Ltd. completed the registration report year Total 3,370.00 - - 6.14 Explanation of the Board of Directors on the “Qualified Opinion” made by the Certified Public Accountants ? Applicable v Inapplicable 6.15 Business plan as of the next year of the Board of Directors (If it has) v Applicable ? Inapplicable In 2005, the Company insisted on the operation policy of “seeking development with renovation”, which took market as the guidance and enhancement of brand as objection, and strengthened and enlarge the main business of washing machine through the international cooperation. The main measures were as follows: 1) To take market as the guidance, seize two large markets of domestic market and overseas market and international cooperation; conduct the full- scale cooperation with the global’s manufacturer of household electric appliance through launching initiatively, develop the joint purchasing of accessories and conducted full- scale cooperation of open domestic market and overseas market such as jointly develop, manufacture and sell the combination machine and etc.. 2) To insist on the renovation idea and quicken development of new products; know and hold the market tendency timely, unify the design style of products, reduce design cost, enhance design quality and advance standardization degree; reinforce the protection of the Company’s intellectual property, combine middle- and long-term development project with short-term development project; import DFSS development instrument step by step; perfect the checking system of project; intensify the examination of design plans, and design and develop products demanded by the market in order to satisfy consumers. 3) To strengthen management. With reducing cost as center, keep improving in production, make the budget better, strengthen the control, increase benefit, carry through the idea of people oriented in order to reach the purpose of improving the work efficiency, emphasize the speed of decision- making and implementation, sparkplug the cooperation and information communication among each department, elevate management talent without stick to one pattern, be clear about the responsibility and celerity response; improve the detail quality of every link in the valuation links; reduce the cost, import management accounting system and scientific decision- making, quicken the information construction, perfect network construction and introduce the bar codes information system of accessories and enhance the efficiency of labor production. 4) To further standardize the operating of enterprises, strengthen information disclosure work and reinforce the management of investor relationship. Profit estimation of the next year ? Applicable v Inapplicable 6.16 The preplan on the profit distribution and capitalization of capital public reserve of the Board of Directors v Applicable ? Inapplicable Audited by Shanghai Shu Lun Pan Certified Public Accountants as per Chinese accounting principles, profit for distribution in consolidated accounting statements of 2004 was RMB –176,691,916.54 and profit for distribution in accounting of 2004 was RMB –176,691,916.54 and profit for distribution in accounting statements of parent company was RMB –108,448,416.31; Audited by Horwath Certified Public Accountants as per international accounting principles, profit for distribution of the Company was RMB –188,133,162.00. According to the Company Law and regulations of accounting system, the Company planned to use capital reserve amounting to RMB 108,488.31 for making up losses. The Company did not appropriate share distribution preplan though the Company achieved the profit in the report period ? Applicable v Inapplicable § 7. Significant Events 7.1 Purchase of assets ? Applicable v Inapplicable 7.2 Sales of assets ? Applicable v Inapplicable 7.3 Significant guarantees v Applicable ? Inapplicable Unit: RMB’0000 Particulars about the external guarantee of the Company (Barring the guarantee for the controlling subsidiaries) Date of Guarantee Complete Name of the Company happening (date Amount of Guarantee for related Guarantee term Implementation guaranteed of signing guarantee type party (yes or or not agreement) not) Wuxi Little Swan Joint Nov. 15, Household Electrical Nov. 15, 2004 500.00 responsibility 2004-May 15, No Yes Appliances guarantee 2005 Wuxi Little Swan Joint Dec. 30, Household Electrical Dec. 30, 2004 500.00 responsibility 2004-Jun. 30, No Yes Appliances guarantee 2005 Wuxi Lifangda Joint Jun. 28, Electrical Appliances Jun. 28, 2004 150.00 responsibility 2004-Jun. 28, No Yes Co., Ltd. guarantee 2005 Wuxi Lifangda Joint Mar. 24, Electrical Appliances Mar. 24, 2004 200.00 responsibility 2004-Mar. 24, No Yes Co., Ltd. guarantee 2005 Total amount of guarantee in the report period 26,999.00 Total balance of guarantee at the end of the report period 26,499.00 Guarantee of the Company for the controlling subsidiaries Total amount of guarantee for controlling subsidiaries in the report period 25,149.00 Total balance of guarantee for controlling subsidiaries at the end of the report 25,149.00 period Particulars about the external guarantee of the Company (Including the guarantee for the controlling subsidiaries) Total amount of guarantee 26,499.00 The proportion of the total amount of guarantee in the net assets of the 23.21% Company Particulars about the guarantees out of line Total amount of guarantee for other related parties, which the Company or 1,350.00 controlling shareholders held less than 50% The debts guarantee amount provided for the guarantee of which the 19,199.00 assets-liability ratio exceeded 70% Proportion of total amount of guarantee in net assets of the Company No exceeded 50% (Yes of No) Total amount of guarantee breaking regulations 20,549.00 7.4 Significant related transactions 7.4.1 Current related purchase and sale v Applicable ? Inapplicable Unit: RMB’000 Selling products and providing service Purchasing products and accepting service to related parties to related parties Related parties Transaction Proportion in the Transaction Proportion in the amount same kind of amount same kind of transaction amount transaction amount Little Swan (Jinzhou) Sanjin 3,186.30 1.31% 26,325.04 13.29% Electrical Appliance Co., Ltd. Little Swan Jinzhou Electrical 0.00 0.00% 8,768.81 4.42% Appliance Co., Ltd. Wuhan Little Swan Washing 892.27 0.37% 6,760.88 3.41% Machine Co., Ltd. Wuxi Little Swan Dish Washer 145.73 0.00% 364.14 0.18% Co., Ltd. Wuxi Little Swan Household 1,929.02 0.80% 3,009.54 1.52% Electrical Appliances Co., Ltd. Wuxi Panasonic Compressor 1,377.36 0.60% 95.90 0.01% Co., Ltd. Wuxi Panasonic Freezing 1,222.74 0.50% 300.89 0.02% Machine Co., Ltd. Ningbo Little Swan Electrical 0.00 0.00% 33,612.46 16.97% Appliances Co., Ltd. Wuxi Little Swan Jiangbo Mould Precise Machine 0.00 0.00% 1,458.74 0.07% Manufacture Co., Ltd. Wuxi Little Swan 0.00 0.00% 90.94 0.00% Transportation Co., Ltd. Guangzhou Antaida Logistics 0.00 0.00% 4,204.16 2.12% Co., Ltd. Wuxi Little Swan Dryer Co., 0.00 0.00% 33.68 0.00% Ltd. Wuxi Little Swan Co., Ltd. 0.00 0.00% 29.91 0.00% Wuxi Little Swan Central 295.58 0.12% 0.00 0.00% Air-conditioner Co., Ltd. Boxiwei Household Electrical 477.44 0.18% 0.00 0.00% Appliances Co., Ltd. Wuxi Little Swan-Merlonic 3.08 0.00% 0.00 0.00% Dish-washer Co., Ltd. Ningbo Xinle Electrical 325.18 0.13% 0.00 0.00% Appliance Co., Ltd. Toshiba Washing Machine 1,682.24 0.07% 0.00 0.00% (Wuxi) Co., Ltd. Little Swan Palaima Industrial 220.18 0.01% 0.00 0.00% Co., Ltd. Wuxi Little Swan Kitchen Co., 24.07 0.00% 0.00 0.00% Ltd. Total 11,781.19 4.15% 85,055.09 42.93% 7.4.2 Current related credits and liabilities v Applicable ? Inapplicable Unit: RMB’000 Supply funds to related parties Related parties supplied funds to the Related parties Company Occurred amount Balance Occurred amount Balance Jiangsu Little Swan Group Co., Ltd. (controlling 760.73 811.44 1,630.00 0.00 shareholder) Wuxi Little Swan Central Air-conditioner Co., Ltd. 160.80 127.56 0.00 0.00 (belong to same parent company) Wuxi Little Swan Kitchen Co., Ltd. (belong to same 1,051.23 -146.83 0.00 0.00 parent company) Wuxi Little Swan Household Electrical Appliances Co., 4,506.79 24.64 0.00 0.00 Ltd. (belong to same parent company) Wuxi Little Swan Jiangbo Mould Precision Machine 2,721.21 647.32 0.00 0.00 Manufacturing Co., Ltd. (non consolidated subsidiary) Wuxi Little Swan Ceramic Co., Ltd. (non consolidated 231.32 1,158.65 0.00 0.00 subsidiary) Wuxi Little Swan Dish Washer Co., Ltd. (non 291.76 285.11 0.00 0.00 consolidated subsidiary) Boxiwei Household Electrical Appliance Co., Ltd. 0.00 2,225.74 230.14 0.00 (associate company) Wuxi Little Swan Telecommunication Co., Ltd. 4,000.00 -11.20 0.00 0.00 (belong to same parent company) Toshiba Washing Machine (Wuxi) Co., Ltd. (associate 1,850.88 825.50 0.00 0.00 Company) Wuxi Little Swan Transportation Co., Ltd. (non 14.43 24.20 0.00 0.00 consolidated controlling subsdiary) Wuxi Lifangda Household Electrical Appliance Co., Ltd. 0.00 823.29 0.00 0.00 (associate Company) Total 15,589.15 6,795.42 1,860.14 0.00 Including: in the report period, the capital amount the listed company provided to controlling shareholder and its subsidiaries was RMB 155891500 and the balance was RMB 67954200. 7.5 Entrusted assets ? Applicable v Inapplicable 7.6 Implementation of commitment items ? Applicable v Inapplicable 7.7 Significant lawsuit and arbitration ? Applicable v Inapplicable 7.8 Particulars about the performance of obligations of Independent Directors Particulars about the independent directors attending the Board Name of This year times Presence in Entrusted Absence Notes Independent of attending the person presence (Times) Board meeting (times) Directors Yang Jiaye 17 17 0 0 Lv Wei 17 16 1 0 Zhang Aimin 17 17 0 0 Particulars about the independent directors proposed different opinions about the relevant matters of the Company ? Applicable v Inapplicable §8.Report of the Supervisory Committee v Applicable ? Inapplicable I. Meetings held by the Supervisory Committee In the report period, meetings held by the Supervisory Committee totaled three. 1. The 2nd meeting of the 4th Supervisory Committee of Wuxi Little Swan Co., Ltd. was held at 11 am. on Apr. 23, 2004 in Wuxi. The meeting examined and unanimously approved the Work Report 2003 of the Supervisory Committee, and prudently examined and deliberated the proposals passed at the 11th meeting of the 4th Board of Directors of the Company. For more details, please refer to China Securities, Securities Times and Hong Kong Ta Kung Pao dated Apr. 23, 2004. 2. On Oct. 26, 2004, the 3rd meeting of the 4th Supervisory Committee of Wuxi Little Swan Co., Ltd. was held through communication. The meeting examined and approved the following proposals: (1) Examined and approved the proposal on Ms. Jiang Lanzhen’ s resignation from the positions of Chairman of the Supervisory Committee, and supervisor of the Company. Due to work reason, Chairman of the Supervisory Committee of the Company Ms. Jiang Lanzhen had asked to resign from the posts of Chairman of the Supervisory Committee and supervisor of the Company. (2) Examined and approved the proposal on recommending supervisors. Since supervisor Ms. Jiang Lanzhen had asked to resign from the positions of Chairman of the Supervisory Committee and supervisor, now the Supervisory Committee had nominated Ms. Chen Yanmeng as the supervisor candidate of the 4th Supervisory Committee of the Company. This proposal would be submitted to the Shareholders’General Meeting of the Company for examination. For more details, please refer to China Securities, Securities Times and Hong Kong Ta Kung Pao dated Oct. 28, 2004. (3) On Dec. 13, 2004, the 4th meeting of the 4th Supervisory Committee of Wuxi Little Swan Co., Ltd. was held in the Company. 3 supervisors should attend, and actually all 3 had attended. The meeting had approved the proposal on election of the Chairman of the Supervisory Committee, and supervisors present at the meeting unanimously voted Ms. Chen Yanmeng Chairman of the Supervisory Committee of the Company. For more details, please refer to China Securities, Securities Times and Hong Kong Ta Kung Pao dated Dec. 14, 2004. II. Opinions of the Supervisory Committee In the report period, according to the provisions in Company Law of the P.R.C. and the Articles of Association of the Company, all members in the Supervisory Committee of the Company had implemented their supervision duties and functions devotedly in the operating activities of the Company and had formed the following opinions through a series of supervision and examination activities: 1. In the report period, the decision- making procedures of the Company had been fully in compliance with the state laws and regulations, and a relatively perfect internal control system had been established. When performing their duties of the Company, the Company’s directors and senior administrative personnel had no behaviors disobeying the laws and regulations and the Articles of Association or doing harm to the interests of the Company. 2.Shu Lun Pan Certified Public Accountants Co., Ltd. (the domestic auditor) and Hong Kong Horwath Certified Public Accountants (the overseas auditor) had both audited the Financial Report 2004 of the Company, and furnished standard unqualified Auditors’ Reports. The Supervisory Committee believed that these auditing opinions had been objective and fair, and the Financial Report of this year had truly reflected the Company’s financial status and operation achievements. 3. The transaction prices of the purchases and sales of assets made by the Company in the report period had been reasonable, and no insider dealings had ever been discovered, nor had cases occurred which would do harm to the rights and interests of the shareholders or lead to the loss of the Company’ s assets. 4. In the report period, there had been related transactions with related parties. The transaction prices had been fair and square, and impartial. No harm had ever been done to the rights and interests of non-related shareholders or the interests of the Listed Company. § 9. Financial Report 9.1 Auditor’s opinions Auditor’s opinions : Standard unqualified auditor ’ s opinions 9.2 Financial statement (attachment) 9.3 Explanation on changes of accounting policy, accounting estimation and settlement compared with the latest annual report ? Applicable v Inapplicable 9.4 Contents, correct amount, reason and its influence of significant accounting errors ? Applicable v Inapplicable 9.5 Explanation on change of consolidated scope compared with the latest annual report v Applicable ? Inapplicable Compared with last year, Wuxi Little Swan General Electrical Appliance Co., Ltd. was newly increased this year, which was invested and set up this year. Board of Directors of Wuxi Little Swan Co., Ltd. Apr. 20, 2005 CONSOLIDATED INCOME STATEMENT FOR THE YEAR ENDED 31 DECEMBER 2004 (Expressed in Renminbi thousands) 2004 2003 Notes RMB’000 RMB’000 Sales 4 Continuing operation 2,434,613 2,807,163 Discontinued operation 5 - 94,037 2,434,613 2,901,200 Cost of sales (1,976,209) (2,283,487) Gross profit 458,404 617,713 Other revenue 48,670 - Distribution costs (347,832) (390,638) Administrative expenses (112,467) (114,826) Provision for bad and doubtful debts (15,338) (12,252) Provision for inventory obsolescence (11,206) (38,466) Other operating expenses, net (15,195) (36,795) Gain on sale of discontinuing operation 5 - 6,413 Profit from operations 6 5,036 31,149 Finance costs, net 7 (11,885) (23,770) Share of results of associates 41,469 46,957 Gain on liquidation of a subsidiary 8 15,649 - Profit before taxation Continuing operation 50,269 40,460 Discontinued operation 5 - 13,876 50,269 54,336 Profit before taxation Continuing operation 50,269 40,460 Discontinued operation 5 - 13,876 50,269 54,336 Income tax Continuing operation 14,456 12,356 Discontinued operation 5 - 3,451 10 (14,456) (15,807) Profit before minority interests 35,813 38,529 Minority interests (8,852) (11,567) Net profit for the year 26,961 26,962 Earnings per share 11 - Basic RMB0.07 RMB0.07 - Diluted Not applicable Not applicable CONSOLIDATED BALANCE SHEET AS AT 31 DECEMBER 2004 (Expressed in Renminbi thousands) 2004 2003 (Restated) Notes RMB’ 000 RMB’ 000 Assets and liabilities Non-current assets Leasehold land 12 65,326 66,511 Property, plant and equipment 13 605,532 675,903 Intangible assets 14 7,644 16,269 Investments in unconsolidated subsidiaries 15 101,487 39,106 Investments in associates 16 195,574 194,050 Available -for-sale investments 17 6,670 8,818 982,233 1,000,657 Current assets Inventories 18 509,091 362,298 Receivables, advances to suppliers and other current assets 19 805,755 735,055 Cash and bank balances 852,448 954,190 2,167,294 2,051,543 Current liabilities Trade and other payables 20 1,230,105 1,215,189 Current tax liabilities 8,800 29,826 Borrowings 21 712,490 635,690 1,951,395 1,880,705 Net current liabilities 215,899 170,838 Total assets less current liabilities brought forward 1,198,132 1,171,495 Total assets less current liabilities carried forward 1,198,132 1,171,495 Minority interests (76,510) (76,834) Net assets 1,121,622 1,094,661 Representing: Share capital 22 365,104 365,104 Reserves 23 756,518 729,557 Shareholders’funds 1,121,622 1,094,661 The financial statements were approved and authorised for issue by the board of directors on 18 April 2005 CONSOLIDATED STATEMENT OF CHANGES IN SHAREHOLDERS’EQUITY FOR THE YEAR ENDED 31 DECEMBER 2004 (Expressed in Renminbi thousands) Reserves Statutory Discretionary Statutory common common public Total Share Share reserve reserve welfare Accumulated shareholders’ capital surplus funds funds funds losses equity RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 (Note 22) (Note 23(a)) (Note 23(b)) (Note 23(a)) (Note 23(c)) Balance at 31 December 2002 - As previously reported 365,104 1,087,895 218,566 204,224 111,027 (921,626) 1,065,190 - Prior year adjustments (Note 27) - - - - - 11,418 11,418 - Adjustment on income appropriations in respect of prior years - - (12,644) - 2,352 10,292 - - As restated 365,104 1,087,895 205,922 204,224 113,379 (899,916) 1,076,608 Termination of subsidiaries - - (5,939) - (2,970) - (8,909) Net profit for the year - - - - - 26,962 26,962 Reserve to offset loss - (299,218) (169,285) (204,224) - 672,727 - Appropriations for the year - - 468 - 54 (522) - Balance at 31 December 2003 365,104 788,677 31,166 - 110,463 (200,749) 1,094,661 Balance at 31 December 2003 - As previously reported 365,104 788,677 42,673 - 107,701 (220,912) 1,083,243 - Prior year adjustments (Note 27) - - - - - 11,418 11,418 - Adjustment on income appropriations in respect of prior years - - (11,507) - 2,762 8,745 - - As restated 365,104 788,677 31,166 - 110,463 (200,749) 1,094,661 Net profit for the year - - - - - 26,961 26,961 Income appropriations - - 4,834 762 725 (6,321) - Balance at 31 December 2004 365,104 788,677 36,000 762 111,188 (180,109) 1,121,622 CONSOLIDATED STATEMENT OF CASH FLOWS FOR THE YEAR ENDED 31 DECEMBER 2004 (Expressed in Renminbi thousands) 2004 2003 RMB’000 RMB’000 Operating activities: Net profit before tax 50,269 54,336 Adjustment for: Depreciation 69,888 82,653 Amortisation of intangible assets 1,656 2,908 Amortisation of leasehold land 2,574 1,345 Provision for bad and doubtful debts 15,338 12,252 Provision for inventory obsolescence 11,206 38,466 Provision for available -for-sale investments 148 1,702 Loss on increase in share of equity in a subsidiary through capital injection 878 - Loss on sale of property, plant and equipment 2,588 5,223 Gain on disposal of discontinuing operation - (6,413) Impairment loss for property, plant and equipment 224 - Interest income (26,091) (16,073) Interest expenses 64,532 40,263 Share of results of associates (41,469) (46,957) Cash flow from operations before changes in working capital: 151,741 169,705 (Increase)/decrease in receivables, advances to suppliers and other current assets (136,858) 198,136 (Increase)/decrease in inventories (157,999) 227,269 Increase/(decrease) in trade and other payables 42,961 (77,686) Cash (used in)/generated from operations (100,155) 517,424 Interest paid (64,532) (40,263) Tax paid (9,242) (77,387) Net cash (used in)/generated from operating activities (173,929) 399,774 Investing activities Purchase of property, plant, equipment, intangible assets and leasehold improvement (66,874) (82,369) Acquisition of investments in unconsolidated subsidiaries, investments in associates and other investments (57,950) (5,604) Proceed from disposal of investments in unconsolidated subsidiaries and other investments 4,434 2,644 Receipts of dividend from associates 42,885 19,603 Placement of pledged deposits (125,002) - Interest received 26,091 16,073 Proceed from disposal of property, plant and equipment, and land use rights 56,855 21,601 Disposal of subsidiary, net of cash disposed - 4,483 Net cash used in investing activities (119,561) (23,569) Financing activities Proceeds from borrowings 912,290 895,490 Repayments of borrowings (835,490) (956,090) Dividends paid to group shareholders - (8,993) Dividends paid to min ority interests (10,054) (7,678) Increase in minority interest - 7,303 Net cash generated from/(used) in financing activities 66,746 (69,968) Net (decrease)/increase in cash and cash equivalents (226,744) 306,237 Cash and cash equivalents at beginning of year 932,690 626,453 Cash and cash equivalents at end of year 705,946 932,690 Analysis of cash and cash equivalents Cash and bank balances 852,448 954,190 Less : Pledged deposits (146,502) (21,500) 705,946 932,690