*ST本实B(200041)2004年年度报告摘要（英文版）

SHENZHEN BENELUX ENTERPRISE CO., LTD. SUMMARY OF ANNUAL REPORT 2004 §1. Important Notes 1.1 Board of Directors of SHENZHEN BENELUX ENTERPRISE CO., LTD. (hereinafter referred to as the Company) hereby confirms that there are no any important omissions, fictitious statements or serious misleading information carried in this report, and shall take all responsibilities, individual and/or joint, for the reality, accuracy and completion of the whole contents. The summary of annual report 2004 is abstracted from the full text of the annual report; the investors are suggested to read the full text of annual report to learn more details. 1.2 No directors stated that they couldn’t ensure the correctness, accuracy and completeness of the contents of the Annual Report or have objections to this report. 1.3 List of directors who are absent Name Reason for not attending the Meeting Assignee Mr. Huang Personal reason Naught Xianfeng Mr. Li Has tendered his resignation Naught Yinghong 1.4 Hainan Congxin Certified Public Accountants issued the Auditors’Report which could not express their opinion on the Company; the Board of Directors and the Supervisory Committee of the Company made explanations in details for the relevant events, and the investors are recommended to notice the content. 1.5 Mr. Xu Min, person in charge of the Company, and Ms. Li Lingling, person in charge of accounting 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 *ST BENELUX-B Stock code 200041 Listed stock exchange Shenzhen Stock Exchange Registered address: 6/F, Blg. No. 11, Nanyou Zhongxing Registered address and office Industry Village, Nanshan District, Shenzhen address Office address: 6/F, Blg. No. 11, Nanyou Zhongxing Industry Village, Nanshan District, Shenzhen Registered address: 518054 Post code Office address: 518054 Internet web site of the Company Naught E-mail of the Company szshbshi@public.szptt.net.cn 1 2.2 Contact person and method Secretary of the Board of Directors Name Shen Yanlei 6/F, Bld. No. 11, Nanyou Zhongxing Industry Village, Nanshan District, Contact address Shenzhen Telephone 0755-26068614、26068025 Fax 0755-26068031 E-mail szshbshi@public.szptt.net.cn §3. Summary of Accounting Data and Financial Indexes 3.1 Major accounting data (Unit: In RMB) Increase/decreas 2003 2002 e compared with 2004 Before the last year Before After adjustment （％） After adjustment adjustment adjustment Income from main 17,519,894.41 49,574,924.26 49,574,924.26 -64.66% 56,938,732.26 56,938,732.26 operations Total profit -284,876,019.14 -33,993,812.00 -15,489,189.80 -738.02% -10,863,122.84 7,655,019.19 Net profit -223,898,509.58 -36,536,808.11 -18,032,185.91 -512.80% -15,596,471.47 2,921,670.56 Net profit after deducting -204,125,494.73 -17,921,861.26 -23,770,448.95 -1,038.97% -15,810,263.81 2,707,878.22 non-recurring gains and losses Net cash flow arising from -21,224,668.73 -56,000,458.84 -56,000,458.84 62.10% 14,779,230.64 14,779,230.64 operating activities Increase/decreas At the end of 2003 e compared with At the end of 2002 At the end of the end of 2004 Before previous year Before After adjustment After adjustment adjustment （％） adjustment Total assets 61,134,298.20 305,182,140.08 305,182,140.08 -79.97% 262,144,738.49 262,144,738.49 Shareholder’ s equity (excluding -377,671,636.12 -110,405,615.77 107,295,525.03 -242.08% -73,868,807.66 125,327,710.94 minority interests) 3.2 Major financial indexes (Unit: In RMB) 2003 Increase/decrease 2004 compared with the 2002 After Before last year（％） adjustment adjustment Earnings per share -3.70 -0.60 -0.30 -516.67% 0.05 Earnings per share (note) -3.70 -0.60 -0.30 -516.67 - Return on equity -- -- -- -- 2.23% Return on equity as calculated based on net profit after -- -- -- -- 2.22% deducting non-recurring gains and losses 2 Net cash flow per share arising from -0.35 -0.93 -0.93 62.37% 0.24 operating activities Increase/decrease At the end of 2003 At the At the end compared with the end of of 2004 After Before end of previous year 2002 adjustment adjustment （％） Net assets per share -6.24 -1.82 1.77 -242.86% 2.07 Net assets per share after adjustment -6.33 -1.85 1.76 -242.16% 1.91 Note: Earnings per share calculated based on new share equity if the share equity has changed from the end of the report to the date of report disclosure. Items of non-recurring gains and losses √Applicable □Inapplicable (Unit: In RMB) Non-recurring gains and losses Amount Non-business income 2,389.20 Payment cost -18,695,647.63 Net losses for disposal of fixed assets -1,079,144.42 Penalty expenditure -512.08 Other expenditure -100.00 Total -19,773,014.93 3.3 Difference of net profit as audited by Chinese Accounting Standard (CAS) and International Accounting Standard (IAS) √Applicable □Inapplicable (Unit: In RMB) CAS IAS Net profit -223,898,509.58 -507,266,000.00 Net assets -377,671,636.12 -399,970,000.00 Balance on net assets is mainly due to long-term equity investment and related measure Explanation for the difference on debts; Balance on net profit is mainly due to elements on retroactive difference adjustment. §4. Changes in Share Capital and Particulars about Shareholders 4.1 Statement of change in share capital (Unit: share) Increase / decrease in Before the change After the change this time (+, -) Subtotal I. Unlisted Shares 1. Sponsors’shares 43,318,000 0 43,318,000 Including: state-owned share 0 0 0 Domestic legal person’ s shares 28,031,078 0 28,031,078 3 Foreign legal person’ s shares 15,286,922 0 15,286,922 Others 0 0 2. Raised legal person’ s shares 0 0 3. Inner employees’shares 1,452,000 0 1,452,000 4. Preference shares or others 0 0 Total unlisted shares 44,770,000 0 44,770,000 II. Listed Shares 1. RMB ordinary shares 0 0 2. Domestically listed foreign shares 15,730,000 0 15,730,000 3. Overseas listed foreign shares 0 0 4. Others 0 0 Total listed shares 15,730,000 0 15,730,000 III. Total shares 60,500,000 0 60,500,000 The amount of shares offered by funds, inner employees’shares traded in the counter, shares offered by strategic investor and shares offered by ordinary juridical person should be disclosed respectively □Applicable √Inapplicable 4.2 Statement of shares held by the top ten shareholders and the top ten shareholder of circulation share Total number of shareholders at the end of the report 5,020 Particulars about shares held by the top ten shareholders Nature of Increase/ Type of shares Shares Full name of Shares held at proportion shareholders decrease in the (circulating/non- pledged or shareholders the year-end （％） (state-owned or report year circulating) frozen foreign) Hainan Topywood 14,668,557 14,668,557 24.25% Non-circulating 14,668,557 Other Industry, Co., Ltd. Hong Kong Jiali Precision Foreign 14,247,290 23.55% Non-circulating Manufacturing Co., Ltd. shareholder Wuhan Huaxing 8,473,001 14.00% Non-circulating 8,473,001 Other Electronic Co., Ltd. Shekou Hansheng -14,668,557 4,889,520 8.08% Non-circulating 4,889,520 Other Electronic Co., Ltd. Hong Kong Oriental Foreign 1,039,632 1,039,632 1.72% Non-circulating Investment Co., Ltd. shareholder SUN LI FENG Foreign 215,316 327,416 0.54% Circulating shareholder WANG YAN Foreign 17,901 290,000 0.48% Circulating shareholder CHEUNG, HON HING Foreign 274,420 0.45% Circulating shareholder KOTO TRANSPORT Foreign 200,000 0.33% Circulating LTD shareholder 4 WANG JUN BIN Foreign 42,902 171,402 0.17% Circulating shareholder Particular about shares held by the top ten circulating shareholders Circulating shares held at the Full name of shareholders Type (A, B H shares or others) year-end SUN LI FENG 327,416 B-share WANG YAN 290,000 B-share CHEUNG, HON HING 274,420 B-share KOTO TRANSPORT LTD 200,000 B-share WANG JUN BIN 171,402 B-share WANG YONG 163,100 B-share WAN ZI HONG 128,901 B-share YANG YA DONG 114,729 B-share QU GUO HUA 103,070 B-share ZHOU ZHONG XIN 101,030 B-share Explanation for associated relationship or consistent actionThe Company was unknown whether there existed associated relationship among the above-mentionedamong the top ten shareholders of circulation shares. shareholders 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 Name of new controlling shareholders Hainan Topywood Industry, Co., Ltd. Name of new actual controller HSU WEN Change date of new controlling shareholder：Feb.28, 2004 Date of change Change date of new actual controller：Feb.28, 2004 Publishing date of and newspaper for change February 28, 2004 of new controlling shareholder Securities Times and Hong Kong Ta Kung Pao Publishing date of and newspaper for change February 28, 2004 of new actual controller Securities Times and Hong Kong Ta Kung Pao 4.3.2 Introduction to the especial situation for controlling shareholder and other actual controller Hainan Topywood Industry Co., Ltd, the controlling shareholder of the Company was founded in Feb., 1993 with registered capital of USD 4 million and legal representative of Mr. Xu Min. The business scope of Hainan Topywood is the production and sales of furniture and wood products. The company is concurrently running plant production of primary products. The actual controller of the Company is the natural person Ms. HSU WEN. Ms. HSU WEN, aged 49, is American Born Chinese who has been working for MCDONALD’S TAIWAN since 1997 till present. She is currently the deputy financial director of MCDONALD’S TAIWAN. 5 4.3.3 Property right and controlling relationship between the actual controller of the Company and the Company shows as follows: 40％ HSU WEN Hainan Topywood Industry Co., Ltd Parkview Holdings, Ltd 30％ 100％ LIU ZHEN LIANG 30％ CHEN XIU ZHEN §5. Particulars About Directors, Supervisors and Senior Executives 5.1 Particulars about changes in shares held by directors, supervisors and senior executives Shares held at Shares held at Reason for Name Title Sex Age Office term the year-begin the year-end change Jun.15, 2001- 0 0 Zhou Jiachen Director Male 52 Jun.30, 2004 Jun.15, 2001- 0 0 Zhou Jiaping Director Male 55 Jun.30, 2004 Jun.15, 2001- ０ ０ Lin Bingjun Director Male 56 Jun.30, 2004 Sep.30, 2003- ０ ０ Zhang Lihong Director Female ３６ Feb.17, 2005 Independent Sep.30, 2003- ０ ０ Li Yinghong M ale ３４ Director Jun.30, 2007 Jun.15, 2001- ２４，２００ ２４，２００ Huang Xianfeng Director Male ５６ Jun.30, 2007 Chairman of the Jun.30, 2004 ０ ０ Xu Min Male ５２ Board -Jun.30, 2007 Vice Chairman of Jun.30, 2004 ０ ０ Liu Zhenliang Male ５３ the Board -Jun.30, 2007 Jun.30, 2004 ０ ０ Chen Xiuzhen Director Female ３６ -Jun.30, 2007 Jun.30, 2004 ０ ０ Luo Wencheng Director Male ４４ -Jun.30, 2007 6 Chairman of the Jun.15, 2001- ５００ ５００ Hui Shujian Supervisory Male ５０ Jun.15, 2004 Committee Jun.15, 2001- １，２１０ １，２１０ Li Lingling Supervisor Female ４１ Jun.15, 2004 Jun.15, 2001- ０ ０ Zhou Jiaqing Supervisor Male ４２ Jun.15, 2004 Jun.15, 2001- ０ ０ Li Mian General Manager Male ３６ Mar.31, 2004 Jun.30, 2004 ０ ０ Wang Changsheng General Manager Male ５５ -Jun.30, 2007 Chief Financial Jun.30, 2004 ０ ０ Jiang Lianping Female ４７ Office -Mar.28, 2005 Secretary of the Jun.15, 2001 ０ ０ Shen Yanlei Male ３５ Board -Jun.30, 2007 5.2 Particulars about directors and supervisors holding posts in the Shareholding Company √Applicable □Inapplicable Drawing payment from Title in Shareholding Name Name of Shareholding Company Office term the Shareholding Company Company (Yes / No) Hainan Topywood Industry, Co., Ltd. June 6, 1992 Xu Min Chairman of the Board No till now Deputy General June 6, 1992 Liu Zhenliang Hainan Topywood Industry, Co., Ltd. Yes Manager till now May 7, 1991 Chen Xiuzhen Parkview Holddings, Ltd. Director No till now Huang Mar.7, 1988 till Shekou Hansheng Electronic Co., Ltd. Director No Xianfeng now Jieli (Hong Kong) Sound Industry Feb.7, 1997 till Lin Bingjun Chairman of the Board No Co., Ltd. now 5.3 Particulars about the annual remuneration of directors, supervisors and senior executives (Unit: RMB’0000) Total annual remuneration 32.4 Total annual remuneration of the top three 19.2 directors drawing the highest payment Total annual remuneration of the top three senior 25.2 executives drawing the highest payment Allowance of independent directors 2.50 RMB’0000 per person/ year Other treatment for independent directors Naught 7 Name of directors and supervisors receiving no Mr. Liu Zhenliang, Mr. Luo Wencheng and Ms. Chen remuneration or allowance from the Company Xiuzhen Payment Number of persons RMB 50,000 ～ RMB 100,000 3 RMB 10,000 ～ RMB 30,000 3 §6. Report of the Board of Directors 6.1 Discussion of and analysis to the whole operation in the report period In the report period, due to the disputes between Wuhan Sanjiu Zhongyuan Industrial Co., Ltd., which is the former shareholder of the Company’s subsidiary of Wuhan Ruide Biological Products Co., Ltd. (99% of its shares held by the Company; hereinafter referred to as Wuhan Ruide.), and Shekou Hansheng Electronics Co., Ltd, the former principal shareholder of the Company on the payment and settlement of transferring share funds of Wuhan Ruide (for details, please refer to the Supplementary Notice on External Guarantees and Lawsuits the Company had published in Securities Times and Hong Kong Ta Kung Pao on Oct. 30, 2004.), Wuhan Ruide had refused to provide the Company the financial statements of 2004 and other related materials, and also refused to let the auditing personnel of the Certified Public Accountants engaged by the Company to get in and do the aud iting work. Although the Board of the Company had negotiated with each party concerned for times, no consensus was reached to solve the related issues. The Company was forced to complete the financial report of 2004 on the basis of not including Wuhan Ruide in the consolidation scope. Wuhan Ruide plays a extremely significant role in the consolidation statements of the Company (by Dec. 31, 2003, the total assets of this company had taken up 58.92% of the total assets of the Company, and its main operating income had taken up 60.78% of that of the Company.), thus the abovementioned events has great influence on the Company’s financial status of 2004. 6.2 Statement of main operations classified by industries or products Unit: RMB’0000 Classified by industries Classified by industries Income from Cost of Gross profit Increase/decrease Increase/ Increase/decrease or products main main ratio (%) in income from decrease in cost in gross profit ratio operations operations main operations of main over the last year (RMB) (RMB) over the last year operations over (%) (%) the last year (%) Stationer goods 1,196.99 1,135.63 5.13% 4.57% 0.93% 4.17% Manufacturing Manufacture of medical 443.42 250.11 43.60% -42.07% -21.76% -14.64% instruments Manufacture of other 111.58 754.69 -576.37% 227.11% -2,941.88% special equipments 8 Including: related 0.00 0.00 0.00% 0.00% 0.00% 0.00% transactions Classified by products Stationer goods 1,196.99 1,135.63 5.13% 4.57% 0.93% 4.17% M edical instruments 443.42 250.11 43.60% -42.07% -21.76% -14.64% other special 111.58 754.69 -576.37% 227.11% -2,941.88% equipments Including: related 0.00 0.00 0.00% 0.00% 0.00% 0.00% transaction Pricing rules for related No related transaction transactions Necessity and durative No related transaction of related transactions Therein: In the report period, the amount of related transactions on the sales of products and provisions of labor force by the listed company to the controlling shareholders and its subsidiaries amounted to RMB 0.00. 6.3 Particulars about main operations classified by regions Unit: RMB’0000 Increase/decrease of income Regions Income from main operations from main operations over the last year (%) Hong Kong, China 1,196.99 4.57% Mainland, China 555.00 -85.44% 6.4 Particulars about the customers of purchase and sales Unit: RMB’0000 Total amount of purchase 1,012.12 Proportion in the total 92.67% of the top five suppliers amount of purchase Total amount of sales of the 1,428.51 Proportion in the total 66.69% top five sales customers amount of sales 6.5 Operation of shareholding companies □Applicable √Inapplicable 6.6 Explanation on reasons for material change in main operations and its structure √Applicable □Inapplicable Due to the change of consolidation scope，the main operations and the structure of the Company has been an important development in the report period. 6.7 Explanation on reasons for material changes in profitability capability of main operations (gross profit ratio) compared with the previous year □Applicable √Inapplicable 9 6.8 Analysis to reasons for material changes in operating results and profit structure compared with the previous year √Applicable □Inapplicable Due to the change of consolidation scope, the operating results and the profit structure of the Company has been an important development in the report period. Analysis to the reasons for material changes in the whole financial condition compared with last year √Applicable □Inapplicable Due to the change of consolidation scope, the whole financial condition of the Company compared with the previous year has been an important development in the report period. 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 √Applicable □Inapplicable In the report period, due to the disputes between Wuhan Sanjiu Zhongyuan Industrial Co., Ltd., which is the former shareholder of the Company’s subsidiary of Wuhan Ruide Biological Products Co., Ltd. (99% of its shares held by the Company; hereinafter referred to as Wuhan Ruide.), and Shekou Hansheng Electronics Co., Ltd, the former principal shareholder of the Company on the payment and settlement of transferring share funds of Wuhan Ruide (for details, please refer to the Supplementary Notice on External Guarantees and Lawsuits the Company had published in Securities Times and Hong Kong Ta Kung Pao on Oct. 30, 2004.), Wuhan Ruide had refused to provide the Company the financial statements of 2004 and other related materials, and also refused to let the auditing personnel of the Certified Public Accountants engaged by the Company to get in and do the auditing work. Although the Board of the Company had negotiated with each party concerned for times, no consensus was reached to solve the related issues. The Company was forced to complete the financial report of 2004 on the basis of not including Wuhan Ruide in the consolidation scope. Wuhan Ruide plays a extremely significant role in the consolidation statements of the Company (by Dec. 31, 2003, the total assets of this company had taken up 58.92% of the total assets of the Company, and its main operating income had taken up 60.78% of that of the Company.), thus the abovementioned events has great influence on the Company’s financ ial status of 2004 and the years to come. 6.10 Completion of the profit estimation □Applicable √Inapplicable 6.11 Completion of the business plan □Applicable √Inapplicable 6.12 Application of the raised proceeds □Applicable √Inapplicable 10 Particulars about the changed projects □Applicable √Inapplicable 6.13 Application of the proceeds not raised through shares offering □Applicable √Inapplicable 6.14 Explanation by the Board of Directors on the “Unqualified Opinion”expressed by the Certified Public Accountants √Applicable □Inapplicable Since Jul. 1, 2004 till now, the Company has been making careful investigation to find out the true financial condition. It is only because the former Chairman of the Board Mr. Huang Xianfeng refused to provide lots of related materials so that the Board had difficulty in sorting out the true status of the Company and the subsequent related work had also been hindered. In the meantime, the Company lost control of the subsidiary of Wuhan Ruide due to the share-transfer fund disputes between the Company’s former principal shareholder and the former shareholder of this subsidiary. In view of the above-said issues, the Company is still trying to get help from relevant departments at present, in the hope of finding out the true status of the Company through investigations by some authoritative organs. Related investigation work is currently underway. As to the Company’ s losing control over its subsidiary, the Company had done the accounting on the cost basis and determined its investment cost according to the original book va lue. Since investment realization had been significantly limited, a long-term investment depreciation reserve totaled RMB 99,454,126.10 had been withdrawn. 6.15 Business plan as of the next year of the Board of Directors □Applicable √Inapplicable Profit estimation of the next year □Applicable √Inapplicable 6.16 The preplan of profit distribution and capitalization of capital public reserve of the Board of Directors □Applicable √Inapplicable In the report period, the Company made profits but did not propose Dividend Distribution Preplan. □Applicable √Inapplicable §7. Significant Events 7.1 Purchase of assets □Applicable √Inapplicable 7.2 Sales of assets □Applicable √Inapplicable 11 7.3 Important guarantee √Applicable □Inapplicable In the report period, the Board of Director found that there existed a large number of undisclosed external guarantees during the last session of Board of Director of the Company, and the Company has carried out the disclosures on Securities Times and Hong Kong Ta Kung Pao dated October 30, 2004 about detailed information on relevant guarantee events. At present the Company is still carrying out the check-out one by one under the assistant of related administrative organization. 7.4 Significant related transactions 7.4.1 Related sales and purchase □Applicable √Inapplicable 7.4.2 Related credits and liabilities current √Applicable □Inapplicable Unit: RMB’0000 Supply of funds to related parties Related parties supplied funds to the Related parties Company Occurred amount Balance Occurred amount Balance Shekou Hansheng Electronic Co., 0.00 2,674.08 0.00 0.00 Ltd. Total amount 0.00 2,674.08 0.00 0.00 Including: In the report period, the amount of capital of the listed company provided to the controlling shareholders and its subsidiaries was RMB 0.00; the balance was RMB 26.74 million. 7.5 Entrusted assets □Applicable √Inapplicable 7.6 Implementation of commitment items □Applicable √Inapplicable 7.7 Significant lawsuit and arbitration √Applicable □Inapplicable For the detailed information on significant lawsuit and arbitration events in the report period, please refer to the annotations of Financial Statement in the appendix 5.1 and appendix 8. 7.8 Particulars about the performance of obligations of Independent Directors Particulars about the independent directors attending the Board Times of Entrusted Name of Independent Presence in Absence compulsory presence Notes Directors person (Times) attendance in 2004 (times) Has tendered Li Yinghong 5 5 0 0 his resignation 12 Particulars about the independent directors proposed different opinions about the relevant matters of the Company □Applicable √Inapplicable §8.Report of the Supervisory Committee √Applicable □Inapplicable I. Work of the Supervisory Committee: during the report period, the Supervisory Committee held 2 meetings in total, with details as follows: 1. On Apr. 29, 2004, the Supervisory Committee held a meeting and passed the following resolutions: 1) Examined and approved the text and the summary of the Annual Report 2003; 2) Examined and approved the Financial Final Report 2003; 3) Examined and approved the Profit Distribution Preplan 2003; 4) Examined and approved the explanations made by the Supervisory Committee on relevant contents of the Auditing Report with stressed items but no reserved opinion furnished by Shenzhen Nanfang-Minhe Certified Public Accountants; 5) Examined and approved the 1st Quarterly Report 2004. 2. On Oct. 27, 2004, the Supervisory Committee held the 2nd meeting, and passed the Semi-Annual Report 2004 as well as the 3rd Quarterly Report 2004. II. Independent Opinions of the Supervisory Committee: 1. Operating according to laws: The Supervisory Committee held that there had been serious problems concerning the decision- making process and Company management of the previous Board of Directors of the Company, which had impaired the Company’s interests. It is suggested that the Board of Directors go through all the issues down to the bottom to safeguard the interests of all the shareholders and the Company. 2. Financial status of the Company: The Supervisory Committee believed that the auditing report furnished by Hainan Congxin Certified Public Accountants had truly reflected the financial status and management achievement of the Company. 3. As to the Auditing Report with disclaimer of opinions by Certified Public Accountants, the Supervisory Committee maintained that the present Board of Directors could not find out the Company’s true status due to the lack of large amounts of related materials and the refusal of relevant parties to cooperate, resulting in the Company’s auditing work being hindered and the Certified Public Accountants furnishing an Auditing Report with disclaimer of opinions. The Supervisory Committee suggested that the Board of Directors of the Company continue to seek for the supports of relevant departments in charge and find out the true status of the Company as quick as possible, so as to lay a solid foundation to solve related problems in the future. 13 §9. Financial Report 9.1 Auditor’s opinion Auditor’s opinion: disclaimer of opinion 9.2 Financial statement 9.2.1 Consolidated Balance Sheet CONSOLIDATED BALANCE SHEET AT DECEMBER 31, 2004 Notes 2004 2003 RMB’000 RMB’000 ASSETS Non-currents assets Property, plant and equipment 10 25,588 65,505 Intangible assets 11 160 55,997 Negative goodwill 12 - (856) Deferred assets - 817 25,748 121,463 Current assets Inventories 13 5,765 14,624 Trade receivables 14 7,590 134,490 Trade deposit 1,671 - Other receivables 15 6,049 - Bank balances and cash 16 524 34,605 21,599 183,719 Current liabilities Trade payables 1,424 25,548 Other payables and accruals 117,974 - Receipts in advance 6,846 4,116 Rental deposit received 647 - Amounts due to shareholders 17 5,188 - Provision for guarantee 18 239,997 - Borrowings 19 88,946 153,527 Tax payable 1,243 5,187 462,265 188,378 14 CONSOLIDATED BALANCE SHEET –(continued) AT DECEMBER 31, 2004 Notes 2004 2003 RMB’000 RMB’000 Net current liabilities (440,666 ) (4,659 ) Total assets less current liabilities (414,918) 116,804 Non-current liabilities Borrowings - 5,000 Minority interests 20 14,948 4,508 NET (LIABILITIES)/ASSETS (399,970) 107,296 CAPITAL AND RESERVES Registered capital 21 60,500 60,500 Reserves 22 61,564 61,564 Accumulated losses (522,034) (14,768) (399,970) 107,296 9.2.2 Consolidated Income Statement CONSOLIDATED INCOME STATEMENT FOR THE YEAR ENDED DECEMBER 31, 2004 Notes 2004 2003 RMB’000 RMB’000 Turnover 4 17,520 49,575 Cost of sales (21,429) (30,292) Gross (loss)/profit (3,909) 19,283 Other revenue 4 1,963 5,076 Distribution costs (2,482) (2,239) Administrative expenses (8,404) (29,714) 15 Loss from operations 5 (12,832) (7,594) Property, plant and equipment written off (1,074) - Impairment loss on intangible assets (2,875) - Obsolete inventories written off (867) - Impairment loss on interests in subsidiaries (112,991) - - Provision for doubtful receivables (113,070) - Provision for guarantee (239,997) Finance costs 7 (41,764 ) (7,895 ) Loss before taxation (525,470) (15,489) Income tax 8 - (2,771 ) Loss after taxation (525,470 ) (18,260 ) Minority interests 20 18,204 228 Net loss for the year (507,266 ) (18,032 ) Loss per share Basic 9 RMB(8.38 ) RMB(0.30 ) 9.2.3 Consolidated Cash Flow Statement CONSOLIDATED CASH FLOW STATEMENT FOR THE YEAR ENDED DECEMBER 31, 2004 2004 2003 RMB’000 RMB’000 Cash flows from operating activities Loss before taxation (525,470) (15,489 ) Adjustment for: Amortisation of intangible assets - 3,015 Depreciation 2,270 4,567 16 Interest paid 41,764 9,681 Interest income (22) (1,865 ) Provision for impairment loss on receivables - 18,750 Amortisation of deferred assets - 396 Amortisation on goodwill - (122 ) Increase in the provision for guarantee 239,997 - Decrease in intangible assets 55,837 - Decrease in negative goodwill (856) - Decrease in deferred assets 817 - Property, plant and equipment written off 37,690 - Operating loss before working capital changes (147,973 ) 18,933 Decrease in inventories 8,859 1,129 Decrease/(Increase) in trade receivables 126,900 (85,327 ) Increase in trade deposit (1,671) - Increase in other receivables (6,049) - (Decrease)/Increase in trade payables (24,124) 11,633 Increase in other payables and accruals 117,974 - Increase in receipts in advance 2,730 - Increase in rental deposit received 647 - Increase in amounts due to shareholders 5,188 - Decrease in tax payable (3,944) (2,368 ) Increase in minority interest (1,252) - Cash generated from/(used in) operations 77,285 (56,000 ) Interest paid (41,764) (7,020 ) Net cash from/(used in) operating activities 35,521 (63,020 ) CONSOLIDATED CASH FLOW STATEMENT –(continued) FOR THE YEAR ENDED DECEMBER 31, 2004 2004 2003 RMB’000 RMB’000 Cash flows (used in)/from investing activities Interest received 22 - Proceeds on disposal of property, plant and equipment - 33,600 Purchase of property, plant and equipment (43) (494 ) Net cash (used in)/from investing activities (21) 33,106 Cash flows (used in)/from financing activities Proceeds from borrowings - 113,991 17 Repayments of borrowings (69,581) (51,959 ) Net cash (used in)/from financing activities (69,581) 62,032 Net (decrease)/increase in cash and cash equivalents (34,081) 32,118 Cash and cash equivalents at the beginning of the year 34,605 2,487 Cash and cash equivalents at the end of the year 524 34,605 Analysis of cash and cash equivalents at the end of the year Bank balances and cash 524 34,605 9.3 Explanation on changes of accounting policy, accounting estimation and settlement compared with the latest annual report □Applicable √Inapplicable 9.4 Contents, correct amount, reason and its influence of significant accounting errors √Applicable □Inapplicable In the year 1997, the Company had presented a guarantee for the letter of credit of Weiyu (Hong Kong) Co., Limited and Gangyu Industrial Company (for details, please refer to Note 8.7 and 8.8.). Since no repayment had been made on the expiration date, the court ruled between August and September 2000 that the Company shoulder joint responsibility for the aforesaid debt. On Jun. 20, 2005, Industrial and Commercial Bank of China Shenzhen Branch Office proved that, by Dec. 31, 2003, the principal and interest of the aforesaid debt had totaled RMB 217,701,140.80, and the Company had not taken it into account as estimated liabilities in 2003. As to this accounting error, the Company had adjusted the number of retained earnings at the year-begin and other relevant items according to the retroactive adjustment method; columns concerning numbers of the previous year in the profit and profit distribution statements had been filled with adjusted sums. The number influenced by the aforesaid change of accounting policy totaled RMB 217,701,140.80. The net profit of 2003 had been reduced by RMB 18,504,622.20; the retained earnings at the year-begin of 2003 reduced by RMB 199,196,518.60, of which retained earnings had been reduced by RMB 199,196,518.60; retained earnings at the year-begin of the previous year in the profit and profit distribution statement had been reduced by RMB 199,196,518.60. 9.5 Explanation on change of consolidated scope compared with the latest annual report √Applicable □Inapplicable Due to the disputes on the payment and settlement of the share-transfer funds between the principal shareholder of the Company Shekou Hansheng Electronics Co., Ltd and the former principal shareholder of Wuhan Ruide Biological Products Co., Ltd., Wuhan Ruide Biological Products Co., Ltd. has refused to provide the Company the 18 financial statements of 2004 and other related materials. Therefore, the year-end consolidation scope of the financial statements of 2004 has not taken Wuhan Ruide Biological Products Co., Ltd. into account. This report has been prepared both in Chinese and English. Should there be any ambiguity concerning the contents of the two versions, the Chinese version shall prevail. Board of Directors of Shenzhen Benelux Enterprise Co., Ltd. August 27, 2005 19