粤高速Ａ(000429)粤高速2004年年度报告摘要（英文版）

Summary of 2004 Annual Report Guangdong Provincial Expressway Development Co., Ltd. March 2005 Guangdong Provincial Expressway Development Co., Ltd. Summary of 2004 Annual Report §1 Important Notes 1.1 The Board of Directors and the directors of the Company hereby warrant that there are no misstatement, misleading representation or important omissions in this report and shall assume joint and several liability for the authenticity, accuracy and completeness of the contents hereof. The summary of this annual report is selected from the annual report. If investors intend to know the detailed contents, they should read the full text of the annual report. 1.2 Director Mr. Ma Chunsheng did not attend the board meeting due to business trip and authorized another director Lin jian to attend the board meeting and vote on his behalf. 1.3 The board chairman of the Company Mr. Cao Xiaofeng, general manager Mr. Huo Yanbin and chief accountant Mr. Xiao Laijiu represent and warrant the financial report in this annual report is true and complete. §2 Basic Information 2.1 Basic information Stock abbreviation Guangdong Expressway A, Guangdong Expressway B Stock code 000429、200429 Stock exchange for listing Shenzhen Stock Exchange Registered address and business address 85 Baiyun Road, Guangzhou, Guangdong Zip code 510100 Website www.gpedcl.com E-mail ygs@gpedcl.com 2.2 Contact person and contact manner Board secretary Securities affair representative Name Xiao Laijiu Zuo Jiang Contact address 85 Baiyun Road, Guangzhou, 85 Baiyun Road, Guangzhou, Guangdong Guangdong Tel (020)83731365 (020)83731388-230 Fax (020)83731384 (020)83731384 E-mail xiaolaijiu@163.com zeozj@163.net 1 Guangdong Provincial Expressway Development Co., Ltd. Summary of 2004 Annual Report §3 Highlights of Accounting Data and Financial Indicators 3.1 Main accounting data Unit: RMB 2003 Increase/de 2002 2004 Before Adjust After Adjust crease (%) Before Adjust After Adjust Income from 902,454,921.50 797,190,721.00 797,190,721.00 13.20% 753,156,947.00 753,156,947.00 key busines Total profit 493,498,744.04 410,328,890.85 410,328,890.85 20.27% 405,976,517.31 405,976,517.31 Net profit 258,201,252.90 181,182,988.13 174,985,974.02 47.56% 171,024,582.16 155,173,786.62 Net profit after deducting non-recurring 257,873,730.62 179,523,737.75 173,326,723.64 48.76% 191,140,498.94 171,855,878.87 gains and losses 2003 Increase/de 2002 2004 Before Adjust After Adjust crease (%) Before Adjust After Adjust Total assets 6,837,621,820.60 6,663,419,082.32 6,663,419,082.32 2.61% 6,140,580,965.34 6,140,580,965.34 Shareholders' equity (not including 3,634,903,493.42 3,534,078,664.97 3,503,299,837.45 3.76% 3,480,312,041.99 3,455,730,228.58 minority interests) Net cash flow from operating 674,823,385.84 674,823,385.84 453,597,911.36 48.77% 355,915,982.54 355,915,982.54 activities 2 Guangdong Provincial Expressway Development Co., Ltd. Summary of 2004 Annual Report 3.2 Main financial indicators Unit: RMB 2003 Increase/d 2002 2004 Before After ecrease Before After adjust adjust adjust (%) adjust Earnings per share 0.21 0.14 0.14 50% 0.14 0.12 （diluted） Earnings per share 0.21 0.14 0.14 50% 0.14 0.12 （weighted） Return on net assets 7.30% 5.07% 5.07% 2.23% 4.86% 4.55% Return on net assets calculated on basis of net profit after 7.29% 5.03% 5.03% 2.46% 5.20% 4.90% deducting non-recurring gains and losses Net cash flow per share from operating 0.54 0.36 0.36 50% 0.28 0.28 activities 2003 Increase/d 2002 2004 Before After ecrease Before After adjust adjust adjust (%) adjust Net assets per share 2.89 2.81 2.79 3.58% 2.77 2.75 Net assets per share 2.88 2.80 2.78 3.60% 2.75 2.73 after adjustment 3 Guangdong Provincial Expressway Development Co., Ltd. Summary of 2004 Annual Report Items of non-recurring gains and losses Book amount（+ representing gains / - representing losses） 1. Gains and losses on disposition of long-term equity investment, fixed assets, construction in progress, intangible assets and other long-term assets -40,034,275.59 2. Tax refund, deduction and exemption that is examined and approved by authority exceeding or has no official approval document - 3. Government subsidy in various forms - 4. Fund possession cost collected from non-financial enterprises and accounted for as gains and losses for the current period 27,679,864.76 5. Short-term investment gains and losses 591,565.85 6. Gains and losses on entrusted investment - 7. Non-operating income and expenses after deducting fixed provision for 445,706.40 impairment of assets generally made by the Company according to Accounting Regulations for Business Enterprises. 8. Provision for impairment of assets made due to force majeure factors such as natural calamity 9. Writeback of provision for impairment made in previous years 13,599,149.59 10. Gains and losses on debt restructuring 11. Gains and losses on asset swap 12. Gains and losses on the part exceeding fair value generated by the transaction price that is apparently unfair 13. Retroactive adjustment by the change of accounting policies to the net profit of previous periods in comparative financial statements 14. Other items confirmed by CSRC Subtotal 2,282,011.01 15. Amount of influence of the above items on income tax -1,954,488.73 Amount involved by the above items 327,522.28 4 Guangdong Provincial Expressway Development Co., Ltd. Summary of 2004 Annual Report 3.3 Difference of domestic and foreign accounting standards √ applicable □not applicable Unit: RMB Domestic accounting standards Overseas accounting standards Net profit 258,201 194,522 Unit of amount: RMB'000 Net Net assets profit Stated pursuant to Chinese accounting standards 258,201 3,634,903 Depreciation adjustment, net -11,730 -97,656 Adjustment of goodwill amortization generated by the acquisition of the shareholders' equity of affiliated companies and subsidiaries, net 10,732 32,241 Writeback adjustment of the unrealized income from the transfer of difference Jiujiang Bridge 2,496 -36,392 Reason Write-off adjustment of deferred tax and assets corresponding to the unrealized income from the transfer of Jiujiang Bridge -822 1,569 Recognition and amortization of other long-term assets -2,859 10,293 Deferred tax recognition -29,359 -59,559 The income tax and overdue fine additionally paid and appropriated as required by tax bureau in the report year -30,779 Others -1,358 -3,659 Stated pursuant to international accounting standards 194,522 3,481,740 5 Guangdong Provincial Expressway Development Co., Ltd. Summary of 2004 Annual Report §4 Particulars about the Changes of Share Capital and Shareholders 4.1 Statement of changes in shares (appendix 1) Unit：share Increase or decrease this time (+/-) Before this Capitalization of After this change Right Bonus common Secondary change shares shares reserve fund offering Others Subtotal I. Non-negotiableshares 1. Promoter's shares 512,142,945 512,142,945 Including： State-owned shares 474,780,525 474,780,525 Domestic corporate 37,362,420 37,362,420 shares Overseas corporate shares Others 2. Raised corporate 166,694,053 -45,000,000 -45,000,000 121,694,053 shares Including： Domestic corporate 121,694,053 121,694,053 shares Overseas corporate 45,000,000 -45,000,000 -45,000,000 0 shares 3. Staff shares 4. Preferred shares or others Total non-negotiable 678,836,998 -45,000,000 -45,000,000 633,836,998 shares II. Negotiable shares 1. Domestically listed 274,530,750 274,530,750 RMB common shares 2. Domestically listed foreign investment 303,750,000 +45,000,000 +45,000,000 348,750,000 shares 3. Overseas listed foreign investment shares 4. Others Total negotiable shares 578,280,750 +45,000,000 +45,000,000 623,280,750 III. Total shares 1,257,117,748 0 0 1,257,117,748 6 Guangdong Provincial Expressway Development Co., Ltd. Summary of 2004 Annual Report 4.2 Table of shareholding of the top ten shareholders Total number of shareholders at the end of the report period 98,736 Particulars about the shareholding of the top ten shareholders Name of Increase or Number of Proportion Type of share Quantity Nature of shareholder decrease in shares held at the (%) of pledged shareholder the year end of year or frozen (shares) shares Guangdong State-owned Communication 474,780,525 37.77% Non-negotiable Nil shares Group Co., Ltd. Shareholder IJM OVERSEAS holding foreign VENTURES 65,055,917 5.18% Negotiable Nil investment SDN.BHD. shares Guangdong Corporate Expressway Co., 19,377,187 1.54% Non-negotiable Nil shares Ltd. Guangdong Yuecai Corporate Trust Investment 14,062,500 1.12% Non-negotiable Nil shares Co., Ltd. Shareholder National Social holding +13,080,481 13,080,481 0.72% Negotiable Nil Security Fund 108 negotiable shares Shanghai Haitong Shareholder Securities holding 9,065,698 0.41% Negotiable Nil Shenzhen Business negotiable Dept. shares Shareholder Yuyuan Security holding +8,001,181 8,001,181 0.34% Negotiable Nil Investment company negotiable shares Shareholder Boshi Security holding Investment +6,569,819 6,569,819 0.30% Negotiable Nil negotiable company shares Xinhui City Siqian Corporate Town Economic 5,176,890 0.28% Non-negotiable Nil shares Union Head Office Shareholder Yulong Security holding +4,079,878 4,079,878 0.27% Negotiable Nil Investment Fund. negotiable shares 7 Guangdong Provincial Expressway Development Co., Ltd. Summary of 2004 Annual Report Notes to the related relationship Among the top ten shareholders，Guangdong Communication Group Co., Ltd. is between the top ten shareholders or the parent company of Guangdong Expressway Co., Ltd. National Social their concerted action Security Fund 108, Yuyuan Security Investment company, Boshi Jingxuan Security company and Yulong Security Investment Fund are all managed by Boshi Fund management company. There is no relation between other shareholders and they are not persons taking concerted action defined in Regulations on Disclosure of Information about Change in Shareholding of Shareholders of Listed Companies. Particulars about the shareholding of the top ten shareholders holding negotiable shares Name of shareholder Number of shares held at the end of year Type of shares（A、B and H shares (shares) or other） IJM OVERSEAS VENTURES 65,055,917 B shares SDN.BHD. National Social Security Fund 108. 13,080,481 A shares Haitong Securities Co., Ltd. 9,065,698 A shares Yuyuan Security Investment 8,001,181 A shares company Boshi Jingxuan Security 6,569,819 A shares Investment company Yulong Security Investment Fund. 4,079,878 A shares NAITO SECURITIES CO., LTD. 3,372,387 B shares National United Andesheng 2,439,409 A shares Security Investment company Baodexin Quantized Core Security 2,377,908 A shares Investment company TOYO SECURITIES ASIA 2,263,100 B shares LIMITED-A / C CLIENT Notes to the related The National Social Security Fund 108, Yuyuan Security Investment company, relationship between the top Boshi Jingxuan Security company and Yulong Security Investment Fund are all ten shareholders or their managed by Boshi Fund management company. There is no relation between concerted action other shareholders and they are not persons taking concerted action defined in Regulations on Disclosure of Information about Change in Shareholding of Shareholders of Listed Companies. Note 1 According to ZJGSZ (2003) No.3 approval document of CSRC - Notice of Approving the Listing of Non-listed Foreign Investment Shares of Guangdong Expressway Development Co., Ltd., 45 million non-listed foreign investment shares of Guangdong Expressway Development Co., Ltd. held by IJM OVERSEAS VENTURES SDN.BHD are to be converted into negotiable B shares and listed on March 8, 2004. 4.3 Introduction of the controlling shareholder and actual controller 4.3.1 Change of the controlling shareholder and actual controller □ applicable√ not applicable 8 Guangdong Provincial Expressway Development Co., Ltd. Summary of 2004 Annual Report 4.3.2 Particulars about the controlling shareholder and other actual controller Guangdong Communication Group Co., Ltd. is the largest shareholder of the Company. legal representative: Zhu Xiaoling. Date of establishment: August 23, 2000. Registered capital: RMB 16.8 billion. It is a solely state-owned limited company. Business scope：equity management, organization of asset reorganization and optimized allocation, raising funds by means including mortgage, transfer of property rights and joint stock system transformation, project investment, operation and management, traffic infrastructure construction, highway and railway project operation and relevant industries, technological development, application, consultation and services, highway and railway passenger and cargo transport, ship industry, relevant overseas businesses. 4.3.3 Relationship between company and actual controller: Guangdong province state-owned property supervising committee 100% Guangdong Communication Group Co., Ltd 37.77% Guangdong province Expressway Development Co., Ltd 9 Guangdong Provincial Expressway Development Co., Ltd. Summary of 2004 Annual Report §5 Directors, Supervisors and Senior Executives 5.1 Change of Shareholdings of Directors, Supervisors and Senior Executives Term of No. of No. of shares office shares held at the held at the Increase/decrease Name Position Sex Age beginning of end of (shares) (year) period period (shares) (shares) Cao Xiaofeng Chairman of the board of directors Male 40 2002—2005 18,400 18,400 0 HuoYanbin Director & general manager Male 38 2002—2005 15,300 15,300 0 Xiao Laijiu Director, deputy general manager, Male 41 2002—2005 15,300 15,300 0 chief accountant and the secretary to the board of directors Ling Jian Director Male 43 2003—2005 0 0 -22,330 Ma Chunsheng Director Male 40 2003—2005 0 0 Wang Tao Director Male 41 2002—2005 15,300 15,300 0 Li Wenzheng Director Male 53 2002—2005 23,400 23,400 0 Liu Qin Independent director Male 40 2002—2005 0 0 0 He Hongdi Independent director Female 64 2002—2005 0 0 0 He Qiang Independent director Male 52 2003—2005 0 0 Xiang Tiangui Independent director Female 48 2003—2005 0 0 Li Dongshan The chairman of the supervisory Male 40 2002—2005 0 0 0 committee Wu Jianxiang Supervisor Male 57 2003—2005 0 0 Xu Yan Supervisor Female 50 2002—2005 44,550 44,550 0 Li Mei Supervisor Female 35 2002—2005 94,050 94,050 0 Tu Huiling Supervisor Female 45 2002—2005 43,425 43,425 0 Dong Guofeng Deputy general manager Male 2002—2005 43,425 43,425 0 35 Yun Wujun Chief economic engineer Male 50 2002—2005 15,300 15,300 0 Wang Jiachen Chief engineer Male 40 2002—2005 33,580 33,580 0 Peng Xiaofang Person in charge of internal audit Female 42 2002—2005 6,100 6,100 0 5.2 Particulars about the directors and supervisors of the Company holding positions at shareholder companies √applicable□not applicable 10 Guangdong Provincial Expressway Development Co., Ltd. Summary of 2004 Annual Report Whether receiving Name of Name Position Term of office remuneration and shareholder subsidy（Yes or no） Guangdong Director of 2000.6 to the Ling Jian Communication Yes Investment Dept. present Group Co., Ltd. Guangdong General manager 2003.4 to the Ma Chunsheng Expressway Co., and member of Yes present Ltd. Party committee Guangdong Yuecai Trust Deputy general 1995.7 to the Wang Tao Yes Investment Co., manager present Ltd. IJM OVERSEAS 1996.6 to the Li Wenzheng VENTURES Finance director Yes present SDN.BHD Director of Guangdong Planning and 2003.3 to the Li Dongshan Communication Yes Financial Audit present Group Co., Ltd. Dept. Guangdong Vice chairman of 2003.3 to the Wu Jianxiang Communication Yes labor union present Group Co., Ltd. 11 Guangdong Provincial Expressway Development Co., Ltd. Summary of 2004 Annual Report 5.3 Annual Remuneration of Directors, Supervisors and Senior Executives Unit: RMB'0000 Total amount of annual remuneration 308.83 The total amount of the remuneration of the top three directors receiving the 91.89 remuneration of the highest amount The total amount of the remuneration of the top three senior executives 91.89 receiving the remuneration of the highest amount Subsidy of independent directors RMB 60,000 / person /year Other benefits of independent directors Business trip expense of apply for reimbursement Name of directors and supervisors not receiving remuneration and subsidy Nil from the Company Range of remuneration Number of person RMB 0 - 100,000 11 persons RMB100, 000-200,000 2 persons RMB200, 000-300,000 6 persons RMB300, 000-400,000 2 persons 12 Guangdong Provincial Expressway Development Co., Ltd. Summary of 2004 Annual Report §6 Report of the Board of Directors 6.1 Discussion and analysis of the overall operation status in the report period In the good macroscopic environment of 2004, due to the strong growth of Zhusanjiao local economy and CEPA and the impels impetus of Zhusanjiao economical circle, The through train current capacity and general spent income of the company controlled subsidiaries and joint ventures are obtain the double figure growth. Increase or Increase or decrease Volume of Toll income in decrease over over the same period vehicle traffic in 2004 (RMB the same period of the previous year 2004 (million) million) of the previous (%) year (%) Guangfo Expressway 29.65 17.56% 324.27 11.05% Fokai Expressway 13.92 21.44% 530.99 15.64% Jiujiang Bridge 7.02 2.11% 47.54 3.34% Huiyan Expressway 15.37 20.65% 218.21 17.79% Maozhan Expressway 1.91 27.20% 65.35 51.71% Jingzhu Expressway Guangzhu East 16.59 21.70% 569.22 20.17% Section Guangzhao Expressway 4.90 22.70% 111.18 22.07% Guangzhao First-class Highway 8.91 24.27% 82.61 31.45% Guangfo expressway has completed the overhaul project and the through train current capacity and general spends income has appear the recoverable growth, obtained the biggest increased range of recent years. Fokai expressway, Huiyan expressway and Jingzhu expressway east section has entered the fast increases period. The traffic flow magnitude and general spends has a bigger growth, brings a greater income to the company. Along with the clear of Maoyang expressway, The expressway from Guangzhou to Zhanjiang has linked up. It greatly increased the train current capacity and general spends income. On the other hand Maozhan expressway (22km) has also cleared. It increased the amortizes expense and loss of Maozhan expressway.Guangzhao expressway and Guangzhao first-class Highway had realized profit, and general income will increase along with the traffic flow magnitude year by year and provide a greater income for the company."Guanghui expressway has cleared on December 2003 and realiz ed profit of 0.9 billion. It will be a highlight to the income of company. In the report period，the income from main operation and net profit of the Company were RMB 9020 million and RMB 2580 million net income, an increase of 13.17% and 47.43% respectively over the same period of the previous year. The cash flow from operating activities was RMB 6750 million, an increase of 46.68% over the same period of the previous year. The net increase of cash and cash equivalents was RMB 2640million. As of December 31, 2004，the assets-liabilities ratio of the Company was 35.67%. Long-term liabilities accounted for 71.63% of total liabilities. There were no due but unsettled debts. The Company had sufficient overall equity capital and its assets and liabilities structure was good, which is exposed to low financial risk. 13 Guangdong Provincial Expressway Development Co., Ltd. Summary of 2004 Annual Report The Company operated in good condition in 2004. The progress of the projects under construction is as follows: 62.83% of Jiangzhong Expressway (including phase-II Jianghe Expressway) was completed. It expected to be completed at the end of 2005. The overhaul project of Guangfo Expressway was completed in August 2004. 6.2 Table of the status of key business in terms of line of business or product Increase/decrease Increase/decrea In terms of Gross Increase/decrease Income of income from se of gross line of Cost of main profit of cost of main from main main operation over profit rate over business or operation rate operation over the operation the previous year the previous product (%) previous year (%) (%) year (%) RMB Expressway RMB 70.84 902,454,921 13.20% 11.52% 0.44% toll income 263,188,193.28 % .50 Including： Amount of Nil related transaction 6.3 The status of main operation in terms of area Increase/decrease of income from main Area Income from main operation operation over the previous year (%) Guangdong Province 902,454,921.50 13.20% 6.4 Particulars about suppliers and customers □applicable√not applicable 6.5 Operation of invested companies (the investment income from whom accounts for over 10% of the net profit of the Company) √applicable□not applicable Name of invested company Shenzhen Huiyan Expressway Co., Ltd. Proportion of the Investment income contributed in 36,450,924.42 net profit of the 14.12% this period Company The company is engaged in the organization and management of the construction of the main line of Shenzhen section of Huiyan Expressway, its operation, management and maintenance after its invested Business scope completion, collection of toll and road service management, the company construction management of road, bridge and culvert projects and engineering consultation. Net profit 110,515,373.91 14 Guangdong Provincial Expressway Development Co., Ltd. Summary of 2004 Annual Report Name of invested company Jingzhu Expressway Guangzhu East Section Proportion of the Investment income contributed 55,416,820.69 net profit of the 21.63% in this period Company The company is engaged from Guangzhou to Zhuhai Expressway, its Business invested operation, management and maintenance, collection of toll and road scope company service management, the construction management of road. Net profit 147,769,482.21 Note: In the report period, this company has obtained the investment income including equity investment income RMB29, 553,896.44 and creditor’s right investment income RMB25, 862,924.25, totally RMB55, 416,820.69. Name of invested company Guangdong Guanghui Expressway Proportion of the Investment income contributed 27,143,398.94 net profit of the 10.51% in this period Company Guanghui expressway company investment, management and Business invested maintenance, collection of toll and road service management, and scope company Net profit 90,477,996.46 6.6 Reasons for the material change of key business and its structure □ applicable√ not applicable 6.7 Reasons for the material change of the profitability ( gross profit rate) of the key business compared with the previous year □ applicable√ not applicable 6.8 Analysis of the reasons for the material change of operating results and profit structure compared with the previous year(note 12) □ applicable√ not applicable Analysis of the reasons for the material change of overall financial status compared with the previous year □ applicable√ not applicable 6.9 Notes to the existing, current and future important influence of the material change of production and business environment, macro-policies, laws and regulations on the Company's financial status and operating 15 Guangdong Provincial Expressway Development Co., Ltd. Summary of 2004 Annual Report results. □ applicable√ not applicable 6.10 The fulfillment of profit target □ applicable√ not applicable 6.11 Fulfillment of operation plan √applicable□ not applicable Unit: RMB'0000 The operation plan for the report year Actual amount of the report year originally formulated Income 77,000 90,245 Costs and expenses 26,251 26,319 Notes to difference Growth of volume of vehicle traffic 6.12 Utilization of raised funds □ applicable√ not applicable Particulars about the change of investment projects □ applicable√ not applicable 16 Guangdong Provincial Expressway Development Co., Ltd. Summary of 2004 Annual Report 6.13 Investment projects not utilizing raised funds √applicable□not applicable Income from Project name Project amount Project progress projects Construction and operation The Company invested Jiangzhong Expressway RMB 104.65 million in Construction in project (including phase-II total. It invested 62.83% progress. No project of Jianghe RMB21.36 million in the income. Expressway) report period. Equity participation in The Company invested Guanghui Expressway RMB678 million in - RMB total. It invested RMB 100% 27,143,398.94 78 million in the report year. The Company invested - RMB Total RMB 99.36 million in － 27,143,398.94 total in the report year. 6.14 Explanation of the board of directors to the "nonstandard opinions" □ applicable√ not applicable 6.15 Operation plan of the board of directors for the new year √applicable□not applicable 1. To strengthen expressway operation management, strictly control the plans, cost, profit target management and performance appraisal of operation companies and strengthen examination, internal audit and supervision. The target income from main operation and cost of main operation for 2005 are RMB 940.86million and RMB 316.55 million respectively. 2. Positively coordinate with the transportation group to complete the property right reform and the property reorganization plan, participate transport business project of stockholder's rights transfer, purchases the high quality property in the group at the right moment, strengthen the main camp service. 3. Strengthens the management of Jiangzhong expressway and the constructing project of Jianghe expressway two issues. 4. Strengthens the management investor relationship. Strictly observes the correlation stipulation and discloses the company information to the investor, through all kinds of channels to strengthen communication with investors, Enhances the company transparency and investor cognition. 17 Guangdong Provincial Expressway Development Co., Ltd. Summary of 2004 Annual Report Forecast of profit for the new year □ applicable√ not applicable 6.16 The preplan of the board of directors for profit distribution or capitalization of capital common reserve fund According to the audit of the financial position and profit status of the Company for 2003 by Yangcheng Certified Public Accountants pursuant to Chinese enterprise accounting standards, the after-tax profit of the Company for 2004 is RMB 258,201,252.90 and the accumulative distributable profit is RMB 497,423,716.86 As audited by Ernst and Young pursuant to international accounting standards, the after -tax profit of the Company for 2004 is RMB 194,522,000.00 and the accumulative distributable profit is 323,055,000.00 According to the provisions of the Articles of Association of the Company, regulations of CSRC and relevant financial regulations, profit distribution should be carried out based on the lower of the profits calculated pursuant to Chinese and international accounting standards. The distribution plan is as follows: 1. As audited by Yangcheng Certified Public Accountants, the after-tax profit of the Company for 2004 is RMB 258,201,252.90. 10% of the after-tax profit, i.e., RMB 25,820,125.29 is to be appropriated for statutory common reserve fund and 5% thereof, i.e., RMB 12, 910,062.65, is to be appropriated for statutory public welfare fund. 2. RMB 150,854,129.76 is to be allocated from the profit available for distribution to shareholders as the fund for dividend distribution for 2004. The board of directors decided the Company would distribute profit for 2004 in the form of cash dividend payment. The Company is to pay RMB 1.20 (including tax) for each 10 shares with the total share capital, i.e., 1,257,117,748 shares, as the base. Cash dividends of RMB 150,854,129.76 are to be distributed in total. The remaining undistributed profits are to be carried forward to the next year. The foreign exchange translation rate for the cash dividends payable to shareholders of B shares and overseas corporate shares is to be determined according to the bank's selling rate of HKD: RMB exchange rate published by the foreign exchange purchase bank on the date of foreign exchange purchase within two months after 2004 annual shareholders' general meeting makes the resolution for dividend distribution. 18 Guangdong Provincial Expressway Development Co., Ltd. Summary of 2004 Annual Report §7 Important Events 7.1 Asset acquisition □ applicable√ not applicable 7.2 Disposal of assets □ applicable√ not applicable 7.3 Material guarantee □ applicable√ not applicable 7.4 Related creditor's rights and debts √applicable □not applicable Unit: RMB'0000 Related party Financing to related party Financing of related party to the Company Transaction amount Balance Transaction amount Balance Guangdong Communication 80.36 1,695.01 Industrial Investment Company Total 80.36 1,695.01 7.5 Entrusted asset management □ applicable√ not applicable 7.6 Performance of commitments □ applicable√ not applicable 7.7 Material lawsuits and arbitration □ applicable√ not applicable 7.8 Particulars about duty performance of independent directors The Company appointed four independent directors, i.e., Liu Qin, He Hongdi, He Qiang and Xiang Tiangui. In the report period，the four independent directors expressed independent opinions on the appointment of senior executives and related transactions of the company, put 19 Guangdong Provincial Expressway Development Co., Ltd. Summary of 2004 Annual Report forward professio nal opinions on the significant investment decisions and future development strategy of the Company, enhanced the independence of the board of directors, intensified the strategy management function of the board of directors, further optimized corporate administration structure and promoted the standardized operation of the Company. 1,The condition of independent directors attending the meeting of defectors of board. Name The frequency of The frequency of The frequency The Remarks meeting of board of personally attend of entrust attend frequency of directors absence Liu qin 4 4 0 0 He hongdi 4 4 0 0 He qiang 4 4 0 0 Xiang tiangui 4 4 0 0 2、The situation of independent directors` objections. In this period of time, they didn’t raise any objection. §8 Report of the Supervisory Committee In the opinion of the supervisory committee, the Company operated according to law and no serious problems in respect of the financial status, the utilization of raised funds, the acquisition and disposal of assets and related transactions of the Company were found. 20 §9 Financial Report REPORT OF THE AUDITORS To the members Guangdong Provincial Expressway Development Co., Ltd. (Established in People’ s Republic of China with limited liability) We have audited the accompanying consolidated balance sheet of Guangdong Provincial Expressway Development Co., Ltd. (the “Company”) and its subsidiaries (collectively referred to as the “Group”) as at 31 December 2004 together with the related consolidated income statement and consolidated cash flow statement for the year then ended. These financial statements are the responsibility of the directors. Our responsibility is to express an opinion on these financial statements based on our audit. This report is made solely to you, as a body, in accordance with our agreed terms of engagement, and for no other purpose. We do not assume responsibility towards or accept liability to any other person for the contents of this report. We conducted our audit in accordance with International Standards on Auditing. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and the significant estimates made by management, as well as evaluating the overall financial statements presentation. We believe that our audit provides a reasonable basis for our opinion. In our opinion, the financial statements give a true and fair view of the financial position of the Group as at 31 December 2004 and of the results of the Group’ s operations and its cash flows for the year then ended in accordance with International Financial Reporting Standards. Hong Kong 9 March 2005 1 GUANGDONG PROVINCIAL EXPRESSWAY DEVELOPMENT CO., LTD. CONSOLIDATED INCOME STATEMENT Year ended 31 December 2004 Notes 2004 2003 RMB’000 RMB’000 Turnover 4 855,696 754,775 Operating costs (265,611) (247,681) Gross profit 590,085 507,094 Other revenue 4 40,747 51,331 Administrative expenses (72,430) (65,228) Other operating expenses (32,868) (30,456) PROFIT FROM OPERATING ACTIVITIES 5 525,534 462,741 Finance costs 6 (108,320) (67,741) Share of profits and losses of associates 50,727 3,246 PROFIT BEFORE INCOME TAX 467,941 398,246 Income tax expense 7 (155,408) (132,198) PROFIT BEFORE MINORITY 312,533 266,048 INTERESTS Minority interests (118,011) (121,554) NET PROFIT ATTRIBUTABLE TO SHAREHOLDERS 194,522 144,494 Dividends 8 150,854 125,712 EARNINGS PER SHARE - BASIC 9 RMB0.155 RMB0.115 Other than the net profit for the year attributable to shareholders, the Group had no recognised gains or losses. Accordingly, a consolidated statement of recognised gains and losses is not presented in the financial statements. 1 GUANGDONG PROVINCIAL EXPRESSWAY DEVELOPMENT CO., LTD. CONSOLIDATED BALANCE SHEET 31 December 2004 Notes 2004 2003 RMB’000 RMB’000 ASSETS Non-Current Assets Fixed assets 10 4,053,613 4,174,182 Construction in progress 11 13,418 17,946 Goodwill 12 28,416 43,555 Interests in associates 13 1,843,302 1,725,500 Other investments, unlisted 14 143,310 128,119 Other long term assets 15 17,740 21,404 Bridge operating rights 17 49,308 52,830 Deferred income tax assets 7 1,570 2,392 Total Non-Current Assets 6,150,677 6,165,928 Current Assets Cash and cash equivalents 512,711 246,142 Prepayments and other receivables 11,652 19,016 Current investment securities 18 2,134 48,469 Inventories 142 107 Due from associates 13 8,464 8,000 Due from related companies 19 22,869 14,675 Total Current Assets 557,972 336,409 TOTAL ASSETS 6,708,649 6,502,337 Continued/… 2 GUANGDONG PROVINCIAL EXPRESSWAY DEVELOPMENT CO., LTD. CONSOLIDATED BALANCE SHEET (continued) 31 December 2004 Notes 2004 2003 RMB’000 RMB’000 EQUITY AND LIABILITIES Capital and Reserves Issued capital 22 1,257,118 1,257,118 Reserves 23 2,224,622 2,155,812 Total Equity 3,481,740 3,412,930 Minority Interests 730,383 666,560 Non-Current Liabilities Interest-bearing loans and borrowings 21 1,200,000 1,350,000 Due to minority shareholders 20 513,325 513,325 Deferred income tax liabilities 7 55,662 43,444 Amounts payable 2,077 2,077 Total Non-Current Liabilities 1,771,064 1,908,846 Current Liabilities Current portion of interest-bearing loans and borrowings 21 400,000 320,000 Other payables 52,510 54,846 Tax payable 36,683 26,580 Due to associates 13 96,230 - Due to related companies 19 54,404 46,788 Due to minority shareholders 20 85,635 65,787 Total Current Liabilities 725,462 514,001 Total Liabilities 2,496,526 2,422,847 TOTAL EQUITY AND LIABILITIES 6,708,649 6,502,337 Director Director 3 GUANGDONG PROVINCIAL EXPRESSWAY DEVELOPMENT CO., LTD. CONSOLIDATED CASH FLOW STATEMENT Year ended 31 December 2004 Note 2004 2003 RMB’000 RMB’000 NET CASH INFLOW FROM OPERATING ACTIVITIES 24(a) 579,877 407,895 CASH FLOW FROM INVESTING ACTIVITIES Interest received 3,180 2,182 Purchases of current investment securities, listed (17,123) (57,083) Purchases of fixed assets and additions of construction in progress (65,438) (105,017) Acquisition of equity interest and shareholders’ loans in associates (800) (430,518) Acquisition of available-for-sale financial assets (21,360) (30,000) Proceeds from disposal of equity interest in a subsidiary 9,012 1,711 Proceeds from disposal of an available -for-sale financial asset 1,000 17,000 Proceeds from disposal of fixed assets 466 90 Proceeds from disposal of current investment securities, listed 64,443 149,694 Proceeds from an advance repaid by an associate 10,000 6,000 Dividends received from an associate 29,001 26,834 Advance to an associate (78,000) (38,430) Net cash outflow from investing activities (65,619) (457,537) CASH FLOW FROM FINANCING ACTIVITIES Equity dividends paid (125,712) (125,712) Dividends paid to minority shareholders (51,977) (96,035) Repayment of loans to minority shareholders - (624,407) Proceeds from loans and borrowings 275,000 1,985,000 Repayment of loans and borrowings (345,000) (975,000) Net cash inflow/(outflow) from financing activities (247,689) 163,846 INCREASE IN CASH AND CASH EQUIVALENTS 266,569 114,204 Cash and cash equivalents at beginning of year 246,142 131,938 4 CASH AND CASH EQUIVALENTS AT END OF YEAR 512,711 246,142 ANALYSIS OF BALANCES OF CASH AND CASH EQUIVALENTS Cash at bank and cash on hand 512,711 246,142 5