富奥股份(000030)ST盛润Ｂ2005年年度报告摘要（英文）

Stock Code: 000030, 200030 Short Form of the Stock: ST Sunrise A, ST Sunrise B No.: 2006-004 GUANGONG SUNRISE HOLDINGS CO., LTD. SUMMARY OF ANNUAL REPORT 2005 §1. Important Notes 1.1 The Board of Directors, the Supervisor Committee, directors, supervisors and senior executives of Guangdong Sunrise Holdings Co., Ltd. (hereinafter referred to as the Company) 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 2005 is abstracted from the full text of annual report; the investors are suggested to read the full text of annual report to understand more details. 1.2 No directors stated that he/she couldn’t ensure the correctness, accuracy and completeness of the contents of the Annual Report or have objection for this report. 1.3 All directors attended the Board meeting. 1.4 Shenzhen Dahua Tiancheng Certified Public Accountants issued an auditors’ report that unable to express opinion. The Board of Directors issued the special explanation on relevant events, and the Supervisory Committee expressed the clear opinion for the special explanation issued by the Board of Directors. Investors are requested to pay attention on it. 1.5 Chairman of the Board of the Company Mr. Yang Fenbo, Person in charge of Accounting Affairs and concurrently General Manager Mr. Wang Jianyu, Person in charge of Accounting Organization Yu Deshan 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 Sunrise A, ST Sunrise B Stock code 000030, 200030 Listed stock exchange Shenzhen Stock Exchange Registered address: Tairan Industrial Zone, Chegongmiao, Shenzhen, Guangdong, P. R. China Registered address and office address Office address: 4th Floor East, Block 203, Tairan Industrial Zone, Chegongmiao, Shenzhen Post code of registered address: 518040 Post code Post code of office address: 518040 Internet website http://www.cninfo.com.cn/default.htm E-mail lionda@mailcenter.com.cn 2.2 Contact person and method 1 Secretary of the Board of Directors Securities Affairs Representative Name Ao Yingchun Chen Liantan th Secretariat of the Board, 4 Floor East, Secretariat of the Board, 4th Floor East, Contract Block 203, Tairan Industrial Zone, Block 203, Tairan Industrial Zone, address Chegongmiao, Shenzhen Chegongmiao, Shenzhen Tel. (0755)83877511 (0755)83875531 Fax (0755)83875212 (0755)83875212 E-mail lionda@mailcenter.com.cn lionda@mailcenter.com.cn §3. Summary of Accounting Data and Financial Indexes 3.1 Major accounting data Unit: RMB Yuan Increase/decrease 2005 2004 over the previous 2003 year（％） Income from main 81,842,030.77 142,606,802.22 -42.61% 77,267,774.95 operations Total profit -52,275,527.36 -47,598,307.34 - 11,952,274.35 Net profit -57,181,772.54 -47,938,995.60 - 11,391,186.93 Net profit after deducting -65,950,923.81 -58,441,733.94 - -44,254,649.78 non-recurring gains and losses Net cash flow arising from operating 27,499,312.61 13,695,335.45 100.79% -10,742,755.13 activities Increase/decrease At the end of At the end of over the end of At the end of 2003 2005 2004 previous year（％） Total assets 39,195,650.78 298,458,668.64 -86.87% 378,293,188.86 Shareholder’s equity (excluding minority -1,649,171,767.47 -1,591,989,994.93 - -1,544,474,179.38 interests) 3.2 Major financial indexes Unit: RMB Yuan Increase/decrease 2005 2004 from the previous 2003 year（％） Earnings per share -0.1983 -0.1662 - 0.0395 Earnings per share (Note) -0.1983 - - - Return on equity - - - - Return on equity as calculated based on net - - - - 2 profit after deducting non-recurring gains and losses Net cash flow per share arising from operating 0.0953 0.0475 100.63% -0.0372 activities Increase/decrease At the end At the end of At the end from the end of of 2005 2004 of 2003 previous year（％） Net assets per share -5.7180 -5.5197 - -5.3549 Net assets per share after adjustment -5.7180 -5.7801 - -5.6173 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 √Applicable □Inapplicable Unit: RMB Yuan Item of non-recurring gains and losses Amount Net non-operating income expenses 8,769,151.27 Total 8,769,151.27 3.3 Difference between Chinese Accounting Standard (CAS) and International Accounting Standard (IAS) √Applicable □Inapplicable Unit: RMB CAS IAS Net profit -57,181,772.54 -57,023,000.00 Reason for difference in net profit accounted under CAS and IAS Items Loss due to shareholders Explanation on the (RMB’000) difference Financial Report audited by Chinese CPA -57,181.77 Adjusted: write back of deferred expenses 159.00 Under International Accounting Standard -57,023.00 §4. Changes in Share Capital and Particulars about Shareholders 4.1 Statement of change in shares Unit: share Before the change Change of this term (+,-) After the changed Number Proportion Subtotal Number Proportion I. Nontradable shares 208,560,00 208,560,000 72.31% 0 72.31% 0 1. Sponsor shares 191,400,00 191,400,000 66.36% 0 66.36% 0 Including: 3 Shares held by the State 191,400,00 191,400,000 66.36% 0 66.36% 0 Shares held by domestic legal 0 0.00% 0 0 0.00% person Shares held by overseas legal 0 0.00% 0 0 0.00% person Others 0 0.00% 0 0 0.00% 2. Raised legal persons shares 17,160,000 5.95% 0 17,160,000 5.95% 3. Inner employee shares 0 0.00% 0 0 0.00% 4. Preference shares or others 0 0.00% 0 0 0.00% II. Tradable shares 79,860,000 27.69% 0 79,860,000 27.69% 1. Ordinary RMB shares 40,260,000 13.96% 0 40,260,000 13.96% 2. Domestically listed foreign 39,600,000 13.73% 0 39,600,000 13.73% shares 3. Overseas listed foreign 0 0.00% 0 0 0.00% shares 4. Others 0 0.00% 0 0 0.00% III. Total of capital shares 288,420,00 288,420,000 100.00% 0 100.00% 0 4.2 Statement of shares held by the top ten shareholders and the top ten shareholders of tradable share Total number of shareholders at the end of report period 15,164 Particulars about shares held by the top ten shareholders Total Number of Share Full name of Shareholder Type of shareholders Proportion number of nontradable pledged or shares held shares held frozen Shenzhen Lionda Group Co., Ltd. Other 66.36% 191,400,000 191,400,000 0 Shenzhen Coloured Metal Financial Co. Other 1.83% 5,280,000 5,280,000 0 Ltd. Shenzhen International Trust & Other 1.83% 5,280,000 5,280,000 0 Investment Co. Shenzhen Huachengda Investment Other 1.37% 3,960,000 3,960,000 0 Holding Co., Ltd. CHINA EVERBRIGHT HOLDINGS CO. Other 1.02% 2,908,735 0 0 LTD Shenzhen Guoyin Investment Other 0.92% 2,640,000 2,640,000 2,640,000 Development Co., Ltd. CHEN JIA ZHAO Other 0.37% 1,063,248 0 0 WANG XIAO LONG Other 0.33% 951,100 0 0 QIAN SHI BING Other 0.23% 659,551 0 0 WU CHING Other 0.21% 610,322 0 0 Particulars about shares held by the top ten shareholders of tradable share 4 Name of shareholders Numbers of tradable shares held Type of shares CHINA EVERBRIGHT HOLDINGS CO. Domestically listed foreign LTD 2,908,735 shares CHEN JIA ZHAO 1,063,248 Ordinary RMB shares WANG XIAO LONG Domestically listed foreign 951,100 shares QIAN SHI BING 659,551 Ordinary RMB shares WU CHING Domestically listed foreign 610,322 shares WU WEN Domestically listed foreign 426,700 shares GENG XIAN HUA 417,900 Ordinary RMB shares XU HUI 363,827 Ordinary RMB shares GAO SHAO HUA Domestically listed foreign 348,300 shares YI BING 330,000 Ordinary RMB shares Explanation on associatedThe Company is unknown whether there exists associated relationship among the aboverelationship among the shareholders of tradable shares. shareholders or acting-in-concert 4.3 Particulars about controlling shareholders and actual controller of the Company 4.3.1 Particulars about change in controlling shareholders and actual controller of the Company □Applicable √Inapplicable 4.3.2 Introduction of especial situation for holding shareholder and other actual controller (1) The Controlling shareholders Shenzhen Lionda Group Co., Ltd., the controlling shareholder of the Company, was incorporated in June 1997 with registered capital of RMB 586.49 million. Mr. Ge Weimin is the legal representative. The company is involved in investing and starting of industrial (subject to report individually), domestic commerce, goods supplying (special and monopolized goods not included), international trading (as set by the qualification certification), and developing of land No. T306-0013. (2) The practical controller For Shenzhen Lionda Group Co., Ltd., the controlling shareholder, was restructured on March 4 2004. Shenzhen Investment Holding Co., Ltd., the shareholder of the group were replaced by the union of Shenzhen Lionda Group Co., Ltd. (account for 90%) and the union of Shenzhen Yili Industrial Co., Ltd. (account for 10%), therefore the practical controller is the union of Shenzhen Lionda Group Co., Ltd. 4.3.3 Property right and controlling relationship between the actual controller of the Company and the Company is as follows: 5 The workers’ union of Shenzhen Lionda Group Co., Ltd. ↓ Shenzhen Lionda Group Co., Ltd. ↓ Guangdong Sunrise Holdings Co., Ltd. §5. Particulars about Director, Supervisor and Senior Executive Drawing Total payment Number Number of payment from drawn from of holding holding Reasons the shareholding Office the Company Name Title Sex Age shares at shares at on companies or term in the report the the change other related period year-begin year-end parties or not (RMB’0000) (Yes / No) Yang Fenbo Chairman Male Apr. 24, 2005- 48 0 0 18.30 No Apr. 24, 2008 Wang Jianyu General Male Apr. 24, Manager 2005- 40 0 0 15.10 No Apr. 24, 2008 Ao Yingchun Director Male Apr. 24, 2005- 37 0 0 13.50 No Apr. 24, 2008 Xie Heng Director Male Apr. 24, 2005- 34 0 0 0.50 Yes Apr. 24, 2008 Guo Shiping Independent Male Apr. 24, Director 2005- 48 0 0 3.00 No Apr. 24, 2008 Ma Hong Independent Male 38 Apr. 24, 0 0 3.00 No 6 Director 2005- Apr. 24, 2008 Ban Wu Independent Male Apr. 24, Director 2005- 60 0 0 3.00 No Apr. 24, 2008 Gong Yida Supervisor Female Apr. 24, 2005- 33 0 0 0.30 Yes Apr. 24, 2008 Niu Suyan Supervisor Female Apr. 24, Buying 2005- in this 49 0 6,000 10.80 No Apr. 24, period 2008 Chen Hong Supervisor Female Apr. 24, 2005- 35 0 0 10.60 No Apr. 24, 2008 Total － － － － － － － 78.10 － §6 Report of the Board of Directors 6.1 Discussion and analyses of the management team In the report period, the main business of the Company was printing and packing, and the Company continued to take paying off debts, restricting expenses and tap the assets, etc as the main work, incessantly strengthen the internal management, and tighten financial budget, so as to keep the production and operation activities going. Since the Company had failed to perform its statutory duty of paying the principal and the interest totaling RMB 16,579,232 owed to Shenzhen Investment Company (now named as Shenzhen Investment Holdings Co., Ltd), Shenzhen Intermediate People’s Court sequestrated the 26.54 percent equity of Shenzhen Goodyear Enterprise Co., Ltd held by the Company and auctioned it off. Due to this lawsuit, Shenzhen Goodyear Enterprise Co., Ltd had stopped being included in the consolidation scope of the Company since September 2005, and the Company had lost its main business. In 2005, the income from the main business of the Company totaled RMB 81,842,030.77 and the business profit totaled RMB 11,202,132.89. Compared with those of the last year, the income and the profit from the main business had decreased by 42.61 percent and 31.66 percent respectively. The main reasons were that Shenzhen Goodyear Enterprise had stopped being included in the consolidation scope of the Company since September 2005 and the main business of Shenzhen Goodyear Enterprise Co., Ltd had suffered some downslide in the year 2005. What’s more, the short-term loans of the Company reached as high as RMB 519 million, resulting in 7 the Company’s high financial expenses totaling RMB 24,562,553.07, and the management expenses of the Company still remained high. All these factors had led to the losses during the whole year of 2005 and a net profit of RMB -57,181,772.54. While share merger reforms were being carried out in the whole country, the Company had tried the mode of combining the share merger reform and the restructuring together, and spent hard efforts in the debt restructuring and assets restructuring as well. However, the creditors and credit amounts were scattered and most of the creditors were State-owned banks, so it was hard to get the debt restructuring policy. Apart from these, the Company also had great guarantee risks, which made it even more difficult to reach agreements with the creditors on the debt restructuring problem. Therefore little progress had been made in the debt restructuring work, and it was also hard for the Company to introduce any restructuring partner of good faith and strength. 6.2 Main business classified according to industry and product Unit: RMB’0000 Main business classified according to industry Increase or Profit Increase or decrease Increase or decrease Income decrease of the Cost of ratio of of the income from of the profit ratio of Industry or from cost of main main main main business main business product main business business business compared with last compared with last business compared with (%) year (%) year (%) last year (%) Printing 8,184.00 7,060.00 13.73％ -42.61％ -43.99％ 18.26％ industry Main business classified according to product Printing 8,184.00 7,060.00 13.73％ -42.61％ -43.99％ 18.26％ product 6.3 Main business in different regions Unit: RMB’0000 Income from main Increase or decrease of the income from main business Regions business compared with last year (%) Northeast 1,033.00 -10.41％ Guangdong 6,333.00 -44.52％ Others 818.00 -51.54％ Total 8,184.00 -42.61％ 6.4 Use of raised proceeds □Applicable √Inapplicable 8 Projects changed □Applicable √Inapplicable 6.5 Projects invested with non-raised proceeds □Applicable √Inapplicable 6.6 Explanation given by the Board on the “qualified opinions” of the Certified Public Accountants √Applicable □Inapplicable Since it was believed that the repayment pressure of short-term liabilities of the Company was huge. And there were lots of guarantee liabilities being sued, which would directly influence the operation continuity of Guangdong Sunrise Holdings Co., Ltd if they could not be eliminated in the short run. Because of the influences of the great uncertainty of continuous operation on the financial statements, Shenzhen Dahua Tiancheng Certified Public Accountants could not express any opinions on whether or not the accounting statements of the Company had been in conformity with the Business Accounting Standards and the Business Accounting System issued by the State. As to this, the Board of the Company believed that, even though the Company confronted with great short-term repayment pressure and lots of guarantee lawsuits, the Company had made some progress in debt paying and assets tapping, and that it could get the operation capital needed to maintain the normal production and operation. In the mean time, in the background of nationwide share merger reforms being promoted, the Company had made some attempts on the mode of combining the share merger reform with restructuring, and it had also spent great efforts in the aspects of debt restructuring and assets restructuring. The debt restructuring of Shenzhen China Bicycle Company (Holdings) Limited (hereinafter referred to as SCB) continued within the Framework Agreement of SCB Restructuring, and this would free the Company from the guarantee responsibility for the principal and the relevant interests totaling RMB 917 million owed by SBC to Huarong Company and reduce the contingent liabilities of the Company. Based upon the SBC debt restructuring, the Company would also continue to promote the debt restructuring work, actively communicate and negotiate with the creditors and endeavor to make some breakthroughs in the aspect of debt restructuring, so as to lighten the burden on the Company and cut financial expenses. The Company would also adopt the share merger reform mode of combining the reform with restructuring, try to win supports from the principal shareholder and relevant government institutions, endeavor to recover the capital occupied by related parties and actively search for a restructuring partner of real strength, good faith and operation capability, so as to improve the Company’s capacity of continuous operation. 6.7 Preplan of profit distribution or capitalization of public reserves made by the Board √Applicable □Inapplicable As audited by Shenzhen Dahua Tiancheng Certified Public Accountants, the net profit 9 realized by the Company in 2005 totaled RMB -57,181,772.54 and the retained profit totaled RMB -2,442,762,449.09. The Company would not distribute any profit, nor would it transfer any capital reserves into share capital. This preplan still needs to be submitted to the Shareholders’ General Meeting for examination. There was profit made by the Company in the report period, but no cash profit distribution preplan had been proposed: □Applicable √Inapplicable §7 Significant Events 7.1 Purchase of assets □Applicable √Inapplicable 7.2 Sales of assets □Applicable √Inapplicable 7.3 Important guarantees √Applicable □Inapplicable Unit: RMB’0000 External guarantees of the Company (excluding guarantees for shareholding subsidiaries) Guarante e for Date (agreement Time Finished Company guaranteed Amount Guarantee type related signing date) Lasting or not party or not Shenzhen Lionda Bonded May 30, 2000- 1. May 30, 2000 850.00 Joint - responsibility guarantee Yes Trading Co., Ltd May 30, 2001 Shenzhen Sun Pipeline Dec. 30, 1993- Dec. 30, 1993 4,335.00 Joint - responsibility guarantee No Yes Co., Ltd Dec. 30, 1998 Shenzhen Gaokeda Mar.10, 1994 - Mar. 10, 1994 50.00 Joint - responsibility guarantee No Yes Electronics Co., Ltd Mar. 10, 1995 Shenzhen Yuda Import & Jul. 8, 1998 - Export Jul. 8, 1998 480.00 Joint - responsibility guarantee No Yes Jan. 25, 2000 Co., Ltd Shenzhen China Bicycle 29,116.0 Dec. 19, 1995 - Company (Holdings) Dec. 19, 1995 Joint - responsibility guarantee No Yes 0 Nov. 25, 1998 Limited 10 Yue-Shen Light Industry Dec. 30, 1993 - Dec. 30, 1993 900.00 Joint - responsibility guarantee No Yes & Trading Company Jun. 22, 1996 Guangzhou Xufeng May 2, 1995 - Enterprise Group Co., May 2, 1995 1,500.00 Joint - responsibility guarantee No No May 2, 1996 Ltd Shenzhen Jinbeisheng Jun. 22, 1995 - Jun. 22, 1995 7,760.00 Joint - responsibility guarantee No No Investment Co., Ltd Jun. 22, 1996 Shenzhen Guoyin Dec.13, 1995 - Investment Group Co., Dec.13, 1995 4,030.00 Joint - responsibility guarantee No Yes Jan. 28, 2001 Ltd Shenzhen Paina Garment Apr. 30, 1998 - Apr. 30, 1998 130.00 Joint - responsibility guarantee No No Co., Ltd Jan. 30, 1999 Shenzhen Jintian Jun. 30, 1997 - Jun. 30, 1997 2,675.00 Joint - responsibility guarantee No No Industrial Group Co., Ltd Dec. 31, 1999 Shenzhen Zhongwu Apr. 30, 1997 - Resources Import & Apr. 30, 1997 1,679.00 Joint - responsibility guarantee No No Apr. 30,1999 Export Co., Ltd Shenzhen Guangyingda Sep. 25, 1995 - Industrial Development Sep. 25, 1995 8,623.01 Joint - responsibility guarantee No Yes Jan. 31, 1999 Corporation Shenzhen Ligang Aug. 15, 1996 - Aug. 15, 1996 723.38 Joint - responsibility guarantee No No Industrial Company Aug. 15, 1997 Shenzhen Maoyuan Jan. 30, 1995 - Investment Development Jan. 30, 1995 856.00 Joint - responsibility guarantee No No Jan. 30, 1996 Co., Ltd Shenzhen Xingda May 1, 1996 - May 1, 1996 40.00 Joint - responsibility guarantee No No Industry & Trade Co., Ltd May 1, 1998 Mar. 5, 1997- Shenzhen Huasu Co., Ltd Mar. 5, 1997 1,500.00 Joint - responsibility guarantee No No Mar. 5, 1998 Shenzhen Jinhai Apr. 7, 1996 - Apr. 7, 1996 350.00 Joint - responsibility guarantee No No Electronics Co., Ltd Apr. 7, 1997 11 Shenzhen Guanghualin May 23, 1996 - May 23, 1996 1,220.00 Joint - responsibility guarantee No No Investment Co., Ltd May 23, 1997 Shenzhen Tiantai Jun. 20, 1995 - Jun. 20, 1995 166.00 Joint - responsibility guarantee No No Petrochemical Co., Ltd Jun. 20, 1996 Shenzhen Building Mar.1, 1998 - Mar. 1, 1998 80.00 Joint - responsibility guarantee No No Materials Group Mar. 1, 1999 Shenzhen Jingyuan Apr. 30, 1997- Industry & Trade Apr. 30, 1997 80.00 Joint - responsibility guarantee No Apr. 30, 1998 Company Hainan Wanda Industry & Aug. 16, 1996 - Aug. 16, 1996 3,093.86 Joint - responsibility guarantee No No Trade Co., Ltd Aug. 16, 1997 Jun. 10, 1995 - Shenzhen Xuena Co., Ltd Jun. 10,1995 112.91 Joint - responsibility guarantee No No Dec. 10, 1996 Shenzhen Light Industry Jul. 31, 1997 - Import and Export Jul. 31, 1997 273.00 Joint - responsibility guarantee No Yes Dec. 31, 1999 Corporation Jun. 30, 1996 - Jilin Lionda Company Jun. 30, 1996 350.00 Joint - responsibility guarantee No Yes Dec. 30, 1997 Shenzhen Big World Mar. 1, 1996 - Mar.1, 1996 1,402.70 Joint - responsibility guarantee No No Shopping Center Mar. 1, 1997 Shenzhen Lionda Apr. 25, 1996 - Apr. 25, 1996 781.50 Joint - responsibility guarantee No Yes Development Co., Ltd Apr. 25, 1999 Shenzhen Lionda Electric Nov. 3, 1996- Nov. 3, 1996 985.00 Joint - responsibility guarantee No Yes Appliance Co., Ltd Nov. 3, 1999 Shenzhen Paper Mar. 15, 1997 - Mar. 15, 1997 1,790.00 Joint - responsibility guarantee No Yes Manufacturing Company Mar. 15, 2000 Shenzhen Lionda Food Sep. 1, 1996 - Sep.1, 1996 2,940.00 Joint - responsibility guarantee No Yes Staff Co., Ltd Mar. 1, 2000 Shenzhen Lionda Material Aug.13, 1995 6,566.04 Joint - responsibility guarantee Aug. 13, 1995 - No Yes 12 Import & Export Co., Ltd Aug. 13, 2000 Oct. 25, 1997 - Hunan Lionda Company Oct. 25, 1997 325.00 Joint - responsibility guarantee No Yes Oct. 25, 1998 Shenzhen Lionda Leke 12,850.0 Jul. 4, 1996 - Jul. 4, 1996 Joint - responsibility guarantee No Yes Box Co., Ltd 0 Jul. 4, 1998 Shenzhen Haima Electric Apr. 1, 1995 - Apr. 1, 1995 1,750.00 Joint - responsibility guarantee No Yes Appliance Co., Ltd Apr. 1, 2000 Total guarantee amount occurred in the report period 0.00 Total guarantee balance at the end of the report period 87,373.21 Guarantees for shareholding subsidiaries by the Company Total guarantee amount occurred in the report period for 0.00 shareholding subsidiaries Total guarantee balance at the end of the report period for 14,697.54 shareholding subsidiaries Total guarantee amount of the Company (including guarantees for shareholding subsidiaries) Total guarantee amount 87,373.21 Proportion of the Company’s net assets taken by the total -52.98% guarantee amount Including: Guarantee amount for shareholders, the actual controller or its 49,209.23 related parties Guarantee amount for the debts of the guaranteed companies 64,044.86 with an asset-liability ratio of over 70%, directly or indirectly The amount by which the total guarantee amount exceeded 50 87,373.21 percent of the net assets Total amount of the above three guarantees 87,373.21 7.4 Significant related transactions 7.4.1 Related transactions concerning routine operation 13 □Applicable √Inapplicable 7.4.2 Related credits and liabilities current √Applicable □Inapplicable Unit: RMB’0000 Capital provided to related Capital provided to the Listed Related parties parties Company by related parties Amount Balance Amount Balance Shenzhen Lionda Food 0.00 499.87 0.00 0.00 Industry Co., Ltd Shenzhen Lionda -265.50 5,651.63 0.00 0.00 Development Co., Ltd Shenzhen Lionda Material 0.00 2,793.53 0.00 0.00 Import & Export Co., Ltd Shenzhen China Bicycle Company (Holdings) -1,298.80 23,280.17 0.00 0.00 Limited Shenzhen Keruite New 0.00 21.40 0.00 0.00 Materials Co., Ltd Shenzhen Sun Pipeline Co., 0.00 2,568.67 0.00 0.00 Ltd Shenzhen Jiadeng Trade Co., 0.00 100.85 0.00 0.00 Ltd Shenzhen Yingte Enterprise 0.00 47.75 0.00 0.00 Co., Ltd Beijing Pipeline Co., Ltd -100.00 1,698.85 0.00 0.00 Shenzhen Ke’enda 0.00 1.32 0.00 0.00 Technology Co., Ltd Shenzhen Guangyingda 0.00 1,418.00 0.00 0.00 Industrial Co., Ltd Shenzhen Oriental Enterprise -150.00 2,618.31 0.00 0.00 Co., Ltd Total -1,814.30 40,700.35 0.00 0.00 In the report period, the Listed Company had provided RMB 0.00 to the controlling shareholder and its subsidiaries, and the balance was RMB 57,364,800. Capital occupation and plan for clearing: √Applicable □Inapplicable The credits and liabilities between the Company and related parties were problems left by transactions in previous years, while the capital occupations by related parties were mainly caused by loans, guarantee funds or payment on behalf, etc. By Dec. 31, 2005, the balance of the capital of the listed company occupied irregularly by related parties totaled RMB 407,003,500, down by RMB 18,143,000 14 compared with that at the beginning of the period, i.e. down by 4.27 percent. Since most of the related parties that occupied the capital of the Company had stopped operation, or had their business licenses withdrawn, or gone bankruptcy due to bad operation, it was hard for the Company to recover those capitals. As to the three related parties still in operation, i.e. Beijing Sun Pipeline Co., Ltd and Shenzhen Oriental Enterprise Co., Ltd, Shenzhen Guangyingda Industrial Co., Ltd, the Company had the following the clearing plan: The Company would make the present principal shareholder Shenzhen Lionda Group Co., Ltd purchase all the equity of the Company held by the former principal shareholder Shenzhen Investment Management Company, so as to write off the capital of the listed company occupied by the principal shareholder and related parties. Could the clearing plan guarantee the ultimate solving of the capital occupation problem before the end of 2006 or not: □Yes √No □Inapplicable Timetable for the implementation of the clearing plan: Amount of Planned time for Clearing clearing Note repayment mode (RMB’0000) At the end of 0.00 January 2006 At the end of 0.00 February 2006 At the end of 0.00 March 2006 At the end of 0.00 April 2006 At the end of May 0.00 2006 At the end of June 0.00 2006 At the end of July 0.00 2006 At the end of 0.00 August 2006 15 For details, please refer to the At the end of part of the capital occupations 5,736.48 September 2006 and the explanations on clearing plan. At the end of 0.00 October 2006 At the end of 0.00 November 2006 At the end of 0.00 December 2006 Total 5,736.48 - 7.5 Financing entrustment □Applicable √Inapplicable 7.6 Implementation of commitments 7.6.1 Timetable of the share merger reform The Company had attempted to seize the opportunity of nationwide share merger reforms being carried out, and tried the mode of combining the share merger reform with restructuring. And the Company had spent lots of efforts in the debt restructuring aspect especially, trying to make some breakthroughs in that. In the mean time, the Company had also endeavored further to find some restructuring partner of operation strength. However, the creditors and credit amounts were scattered and most of the creditors were State-owned banks, so it was hard to get the debt restructuring policy. Apart from these, the Company also had great guarantee risks, which made it even more difficult to reach agreements with the creditors on the debt restructuring problem. Therefore little progress had been made in the debt restructuring work, and it was also hard for the Company to introduce any restructuring partner of real strength, good faith and operation capacity. The Company would enter into the procedures of the share merger reform before the end of Jun. 30, 2006 and hand in all documents to the Shenzhen Stock Exchange. 7.6.2 Other commitments □Applicable √Inapplicable 7.7 Significant lawsuits and arbitrations √Applicable □Inapplicable 1. On security disputation by Shenzhen office of China Great Wall Asset Management Corporation, Shenzhen intermediate People's court’s civil judgments are as follows: we as the defendant reimburse the plaintiff Shenzhen office of China Great Wall Asset 16 Management Corporation in 10 days after enforcement of the judgments principal RMB 16,792,914.75 plus its correspondent interest, and lawsuit fee RMB 63,871.94 as well. The total fee of this case will not influence the profit over the period for it has been budgeted. 2. On contract disputation among Shangbu Branch of China Merchants Bank, our guarantor Jin Tian Industrial Co., Ltd (Group) and us. The civil judgments (2002) Shenzhen Futian No.1773 by Shenzhen Futian Count has been in force. We as identity should reimburse the applications holder Shangbu Branch of China Merchants Bank principal RMB 4,000,000 and relevant interest. Also the identity, Jin Tian Industrial Co., Ltd (Group), shares the responsibility to urge the debt mentioned above. During the process of enforcement by Shenzhen Futian Court, RMB 332,644.28 has been reimbursed to Shangbu Branch of China Merchants Bank, while not enough to pay off the debt yet. Survey shows that we, and our guarantor Jin Tian Industrial Co., Ltd (Group) don’t have any other asset that can offset the debt. Therefore Shenzhen Futian Court’s judgments are: Suspending the civil judgments (2002) Shenzhen Futian No. 1773 until the identity has enough asset to pay off the debt, subjected to further application. The total fee of this case will not influence the profit over the period for it has been budgeted. 3. On Futian Branch of China Merchants Bank’s application according to enforcement of reimbursement judgments of Shenzhen Futian Court No. 68 (1999), Shenzhen Futian Court issued the civil judgments (2000) No. 138 on November 29, 1999, attaching 618-4, A618-5, A618-3 plots including the buildings on these areas belonging to Shenzhen Sun Pipeline Co. Limited because Shenzhen Pipeline Co. Limited had not have the title cards. Meanwhile, after the judgments being sent, Shenzhen Sun Pipeline Co. Limited had the real estate certificate already but didn’t declare to courts, it collateralized real estate certificate to our stockholder instead. Considering there maybe disputation about the property ownership, Shenzhen Futian Court announced (2001) SFFZZ No. 1661 civil judgments on Sep. 6, 2002, suspending the enforcement of civil judgments of Shenzhen Futian Court (1999), No.68. Futian Branch of China Merchants Bank then litigated to Shenzhen Intermediate People's Court. Shenzhen Intermediate People's Court gave the following judgments through trial: claming the mortgage contracts signed on October 8, 2001 and all other relevant activities between Shenzhen Sun Pipeline Co. Limited and us void without legally binding. The lawsuit fee of this case RMB 246,110 is by Shenzhen Sun Pipeline Company. We counter this sum of money in this case default thus has no effect on the profit over the period. 4. Guaranteed by Shenzhen China Bicycle Company (holdings) Limited, we loaned USD 1,000,000 from Renmin Bridge Branch of Shenzhen Development Bank on September 30, 1997. Till January 10, 2005, we have paid the principal USD 1,000,000 back, still the interest USD 41,997.6 and compound USD 35,614.12 to be paid. Failed to collect the interest and compound back through some efforts, Renmin Bridge Branch of Shenzhen Development Bank then litigated to Shenzhen Luohu Court. On hearing the case and through trial on March 25, 2005, Shenzhen Luohu courts’ civil judgments are as follows: we should reimburse all the interest of USD 41,997.6 and 17 compound to Renmin Bridge Branch of Shenzhen Development Bank ten days after the judgments enforcement. Shenzhen China Bicycle Company (holdings) Limited has the legal relevant responsibility. We would pay the lawsuit fee of this case RMB 11,607. We had budgeted for this sum of money thus no effects on the profit over the period. For more details of the four events mentioned above please refer to Securities Times (April 9, 2005) or Hong Kong Ta Kung Pao lawsuits notices 2005-007. 5. On China Merchants Bank Co., Ltd. Shenzhen Luohu Branch law suiting Shenzhen China Bicycles Company (holdings) Limited for both its loans and disputation on guarantees. Through both parties efforts, reconciliation gained as following: on basis of assessment Shenzhen China bicycles Company (holdings), Limited sells its land estate of 4th building (Shenzhen Real estate certificate No.4200052), hereby mentioned as “the building”, which had been mortgaged to China Merchants Bank Shenzhen Luohu Branch but attached by Railway court later, on Buxin Rd Luohu Shenzhen for RMB 21,455,535, in which USD 1,350,000 reimbursed Shenzhen China bicycles (Group) Co. , to Shenzhen Investment Limited consisting China. Through the trial of Guangzhou Railway Intermediate Court, the judgments approved reconciliation agreement, and cancelled the attachment when the building was handed over. We had budgeted for this case in advance but spared RMB 4,482,000.Therefore increased our profit over the period. For more details on the fifth event please refer to Securities Times (August 19, 2005) or Hong Kong Ta Kung Pao lawsuit notice 2005-027. 6. On disputation among Shenzhen Branch of China Merchants Bank Luohu, the sincerity of Shenzhen China Bicycles Company (Holdings) Limited and us, Guangzhou Railway Intermediate Court declared to place the three cases on file and implement. During the process the identity, Shenzhen China bicycles Company (holdings) Limited, was under assessment and attachment. Now the application holder and the identity has reached reconciliation and all the duties have been discharged. So Guangzhou Railway Intermediate Court made the following judgments: ending the enforcement mediation of Shenzhen Intermediate Court (1998) No. 367, No. 368, No. 369. This civil arbitration offered a surplus of RMB 15,217,000 from the three cases thus increased the profit by RMB 6,089,200 over this period. 7. On loan contract disputation, Shenzhen Investment Management Company prosecuted us to Shenzhen Intermediate Court. Because we, as the identity, failed to reimburse Shenzhen Investment Management Company the principal of RMB 16,579,232 and the relevant interest, Shenzhen Intermediate Court assessed the property of our Shenzhen Goodyear Enterprise Co., Ltd Co., Ltd. and auction 26.54% shares which was owned by Shenyang Yi Jie electronic machinery Limited for RMB 11,841,200. Therefore Shenzhen Intermediate Court made the following arbitration: 1. ending the attachment of 26.54% of our Shenzhen Goodyear Enterprise Co., Ltd; 2. handing over this part of property to Shenyang Yi Jie electronic machinery Limited. Meanwhile Shenzhen Intermediate Court sent an assisting notice to Shenzhen Administration of Industry and Commerce; Shenzhen Trade & Industry Bureau issued “on the change of share and share holder name of foreign invest share company of 18 Shenzhen Goodyear Enterprise Co., Ltd Co., Ltd. Until December 1, 2005, the above mentioned procedures had been finished. This arbitration made Shenzhen Goodyear Enterprise Co., Ltd out of our list in the 4th quarter of 2005. We lost main business and the financial influence is RMB 26,335,301.11 long-term investment decrease and RMB 11,841,200 debts resisting- fund decrease, thus lead to RMB 14,494,101.11 profit decrease. For more details of 6-7 events please refer to Securities Times (December 7, 2005) or Hong Kong Ta Kung Pao lawsuits notices 2005-039. §8 Report of the Supervisory Committee √Applicable □Inapplicable In the report period, the Supervisory Committee had conducted effective supervision over the finance of the Company, directors, managers and senior executives strictly in accordance with the regulations and requirements of the Company Law, Securities Law, Listing Rules and the Articles of Association, and had expressed its independent opinions on the following issues: 1. Operation In the report period, the Company had continued to improve its internal control system and had modified the Articles of Association. The Supervisory Committee believed that the Board and senior executives of the Company had dutifully performed their responsibilities and obligations endowed by the Company Law and the Articles of Association; the decision-making procedures of the operation had been legal; while executing their duties, the directors and managers had no behavior that had gone against the laws, regulations, or the Articles of Association, or done harm to the interests of the Company or the interests of the shareholders. 2. Financial inspection The Supervisory Committee had conducted strict and careful inspection into the financial system and financial status of the Company, and it believed that the Financial Report 2005 prepared by the Company had truly reflected the financial status and operation achievements of the Company, and that the comments made by Shenzhen Dahua Tiancheng Certified Public Accountants and Hong Kong K.C.OH & Company Certified Public Accountants had been fair and objective. 3. In the report period, the Company had no purchases or sales of assets, nor did it have any inside dealings or any cases that had done harm to the interests of part of the shareholders or had led to the loss of the Company’s assets. 4. In the report period, the Company had no significant related transactions, nor did it use any raised proceeds. 5. Implementation of the resolutions of the Shareholders’ General Meeting by the Board Members of the Supervisory Committee had attended the Board meetings and the Shareholders’ General Meeting, and it also had conducted supervision over the implementation of the resolutions of the Shareholders’ General Meeting. It believed that the Board had strictly executed the various resolutions made at the Shareholders’ General Meeting. 19 6. Opinions of the Supervisory Committee on the explanation given by the Board of the Company on the Auditors’ Report without any opinions expressed by the Certified Public Accountants Shenzhen Dahua Tiancheng Certified Public Accountants had furnished an Auditors’ Report but had been unable to express any opinions for the year 2005, and the Board of the Company had given special explanations on those issues mentioned in this Report. The Supervisory Committee believed that the Auditors’ Report furnished by Shenzhen Dahua Tiancheng Certified Public Accountants had truly reflected the financial status and operation achievements of the Company, and that the explanations given by the Board on the issues mentioned in the Auditors’ Report had fit the actual conditions of the Company. The Supervisory Committee would actively cooperate with the Board in various works, urge the Board to strengthen the debt restructuring work and seek for a restructuring partner of real operation strength together with the Board, so as to try to improve the continuous operation capacity of the Company. §9 Financial Report 9.1 Auditing opinions Auditing opinions: unable to express any opinions 9.2 Financial statements 9.2.1 Balance Sheet 2005 Note RMB’000 Non-current assets Property, plant and equipment 9 9,443 Land use rights – non-current portion 10 - Construction in progress 11 - Interests in unconsolidated subsidiaries 12 ( 1,019 ) Interests in associates 13 4,385 Long-term investments 14 11,112 23,921 Current assets Land use rights – current portion 10 - Inventories 15 2,000 Account receivables 16 - Other receivables and prepayments 17 13,553 Tax recoverable - 20 Note receivables - Short-term investments - Cash and bank balances 86 15,639 Total assets 39,560 Capital and reserves Share capital 18 288,420 Reserves ( 1,937,399 ) Equity attributable to equity holders of the parent ( 1,648,979 ) Minority interests 24 - TOTAL EQUITY ( 1,648,979 ) Current liabilities Bank and other loans 19,24 519,800 Account payables - Other payables and accrued charges 20 1,168,739 1,688,539 Total equity and liabilities 39,560 9.2.2 Profit and Profit Distribution Statement 2005 2004 Note RMB’000 RMB’000 Turnover 5 81,842 142,607 Cost of sales ( 70,640 ) ( 126,214 ) Gross profit 11,202 16,393 21 Other incomes 6,963 7,879 Distribution costs ( 2,904 ) ( 6,487 ) Administrative costs ( 30,115 ) ( 40,710 ) Operating loss ( 14,854 ) ( 22,925 ) Finance costs ( 24,563 ) ( 32,545 ) Other non-operating items 6 ( 12,767 ) 7,829 Share of results from associates 136 59 Loss before taxation 7 ( 52,048 ) ( 47,582 ) INCOME TAX 8 ( 1,079 ) 536 Loss for the year ( 53,127 ) ( 47,046 ) Attributable to : Equity holders of the parent ( 57,023 ) ( 47,923 ) Share of loss for minority interests 3,896 877 ( 53,127 ) ( 47,046 ) Loss per share to equity holders of the parent - basic RMB(0.198) RMB(0.166) 9.2.3 Cash Flow Statement Reserves 22 Statutory Share capital and Capital public total reserves Share reserve Statutory welfare Discretionary Total RMB’000 Accumulated capital RMB’00 surplus reserve fund surplus reserve reserves RMB’000 0 RMB’000 RMB’000 RMB’000 ‘ loss RMB’000 RMB’000 As at January 1, 2004 288,420 298,744 78,894 18,366 40,621 ( 2,269,501 ) ( 1,832,876 ) ( 1,544,456 ) Loss for the year of ( 47,923 ) 2004 - - - - - ( 47,923 ) ( 47,923 ) Difference from renovation work on ‘ staff housing - - - 423 - - 423 423 As at December 31, ( 1,591,956 ) 2004 288,420 298,744 78,894 18,789 40,621 ( 2,317,424 ) ( 1,880,376 ) Loss for the year of ( 57,023 ) 2005 - - - - - ( 57,023 ) ( 57,023 ) As at December 31, ( 1,648,979 ) 2005 288,420 298,744 78,894 18,789 40,621 ( 2,374,447 ) ( 1,937,399 ) 2005 2004 RMB’000 RMB’000 Cash flow from operating activities Loss before taxation ( 52,048 ) ( 47,582 ) Adjustment items : Interest income ( 39 ) ( 78 ) Dividend income - ( 2 ) 23 Interest expense 30,774 32,357 Depreciation of property, plant and equipment 6,436 11,856 Amortisation of land use rights 377 589 Impairment loss provision on property, plant ,and equipment - 961 (Profit)/loss on disposal of property, plant and equipment 330 ( 2,636 ) Impairment loss provision on unconsolidated ,subsidiaries 1,130 - Loss on disposal of a nominated subsidiary 14,257 - Impairment loss provision on interests in associates 3,181 2,690 Share of results from associates ( 136 ) ( 59 ) Profit on disposal of long-term investments - ( 2,061 ) Impairment loss provision on long-term investments 2,690 - Reversal for inventory obsolescence - ( 3,469 ) Reversal for doubtful debts on account receivables - ( 3,755 ) Provision for doubtful debts on other receivables - 22,365 Bad debts written off for other receivables - 8,695 Reversal for loss on guarantees ( 8,821 ) ( 6,781 ) Net operating cash inflow/(outflow) before movements in working capital ( 1,869 ) 13,090 Decrease in amounts due to unconsolidated subsidiaries - ( 4,150 ) Decrease in amounts due to associates - ( 373 ) Decrease in inventories 5,114 5,432 (Increase)/decrease in account receivables 3,203 ( 7,961 ) 24 Decrease in other receivables and prepayments 37,635 34,806 Decrease in note receivables 189 441 Decrease in account payables ( 607 ) ( 2,656 ) Increase/(decrease) in other payables and accrued charges ( 16,380 ) 6,731 Increase/(decrease) in note payables 10,225 ( 2,880 ) Cash inflow from operating activities before interest and tax payments 37,510 42,480 2005 2004 Note RMB’000 RMB’000 Cash inflow from operating activities before interest and tax payments 37,510 42,480 Interest paid ( 690 ) ( 724 ) Corporate and profits tax refunded/(paid) ( 735 ) 719 Net cash inflow from operating activities 36,085 42,475 Investing activities Interest received 39 78 Dividend received - 2 Purchases of property, plant and equipment ( 85 ) ( 5,860 ) Proceeds from disposal of property, plant and equipment 306 10,971 (Increase)/decrease in construction in progress 172 ( 5,112 ) Net cash outflow from disposal of a nominated subsidiary 21 ( 7,932 ) - Net cash outflow from de-consolidation of a subsidiary 22 ( 76 ) - 25 Net cash outflow from de-consolidation of a nominated subsidiary 23 ( 56 ) - Proceeds from disposal of long-term investments - 2,061 Net cash inflow/(outflow) from investing activities ( 7,632 ) 2,140 Financing activities Bank and other loans repaid 24 ( 41,811 ) ( 54,078 ) Dividend paid to minority shareholders 24 ( 3,783 ) ( 724 ) Net cash outflow from financing activities ( 45,594 ) ( 54,802 ) Decrease in cash and cash equivalents ( 17,141 ) ( 10,187 ) Cash and cash equivalents as at beginning of the year 17,227 27,414 Cash and cash equivalents as at end of the year 86 17,227 9.3 Detailed explanation on the changes in the accounting policies, accounting estimation or accounting methods compared with the latest Annual Report □Applicable √Inapplicable 9.4 Content of significant accounting errors, amounts changed, reasons and influences □Applicable √Inapplicable 9.5 Detailed explanation on the changes in the consolidation scope compared with the latest Annual Report √Applicable □Inapplicable 1. Due to bad operation, Shenzhen Lionda Industry & Trade Co., Ltd had gone into liquidation. Starting from Jan. 1, 2005, this company was not and would not be included in the consolidation scope of the Company any more. 2. Since the Company had failed to perform its statutory duty of paying the principal and the interest totaling RMB 16,579,232 owed to Shenzhen Investment Company (now named as Shenzhen Investment Holdings Co., Ltd), Shenzhen Intermediate People’s Court sequestrated the 26.54 percent equity of Shenzhen Goodyear Enterprise Co., Ltd held by the Company and auctioned it off. Due to this lawsuit, Shenzhen Goodyear Enterprise Co., Ltd had stopped being included in the 26 consolidation scope of the Company since September, 2005, and the Company had lost its main business. Guangdong Sunrise Holdings Co., Ltd Board of Directors: Yang Fenbo Mar. 30, 2006 27